TaxTMI 
TaxTMI 
2016 (7) TMI 1129
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on 31st October, 2005 declaring total income of Rs. 1,47,02,126/-. In the assessment addition of Rs. 1,13,27,415/- was made on account of capital gain with respect to some shops which were revalued in the F.Y. 1996-97. These shops were further transferred into stock in trade in assessment year 1999-2000, some of the shops were sold in assessment year 2004-05, and the remaining shops, which were not sold, were not reflected in the balance sheet of the assessee. On inquiry, it was admitted by the assessee that these shops were taken over by the society for a consideration of at least Rs. 36 lacs. The original cost of these assets were Rs. 25,62,798/- and which were revalued for Rs. 1,48,00,550/- and reserve of Rs. 1,22,37,752/- was created. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessing officer but the return was revised to avoid unnecessary litigation. It was further submitted that a specific condition has been mentioned in the letter accompanying the return that no penalty proceedings may be initiated therefore the penalty may not be levied. However the Ld. assessing officer rejected all the contentions of the assessee and levied a penalty of Rs. 36,85,892/- . Against this assessee preferred an appeal before the Ld. CIT (A) who in turn held that in fact there is no income but there is a trading loss arising into the hands of the assessee. He further held that though in the year under consideration the appellant had not declared any income yet in the subsequent year that is assessment year 2006-2007 by furnishing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hen the detection of chargeability of capital gain was made known by the Ld. AO . Therefore it was submitted that it is not the case of bona fides but violation of the law and merely because the assessee has surrendered the income with the condition it cannot lead to a situation that no penalty should be levied. Further LD DR vehemently stated that revision in the return of income has been done after the assessee was confronted with the issue and there is no dispute of income subject to taxation in which year therefore the reliance by the Ld. CIT(A) in deleting the penalty on the decision of the Hon'ble Gujarat High Court is erroneous. Therefore it was submitted that the Ld. AO has rightly levied the penalty and Ld. CIT (A) has erred in del....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orted the order of the Ld. Commissioner of Income Tax (A) and submitted that the penalty under section 271(1) (c ) may not be levied and the order of Ld CIT (A) may be upheld. 5. We have carefully considered the rival contentions and also perused the orders of the lower authorities in penalty proceedings as well as the order of the Ld. assessing officer under section 143 (3) of the Income Tax Act 1961. On perusal of the assessment order it is apparent that the assessee did not disclose in its original return of income capital gain chargeable to income tax under section 45 (2) of Rs. 1,13,27,415/-. During the course of assessment proceedings the assessee submitted vide letter dated 20/03/2007 surrendering a sum of Rs. 11327415/- on the co....