TaxTMI 
TaxTMI 
2015 (11) TMI 1576
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....alty by ignoring the provisions of explanation SA of section 271(1)(c) of I. T. Act, 1961 which are squarely applicable to this case and where it is clearly mentioned that income declared in any return of income furnished on or after the date of search, assessee shall be deemed to have concealed the particulars of income or furnished inaccurate particulars of such income for the purposes of imposition of penalty under clause (c) of sub - section (l) of section 271." 2. Briefly stated, the facts of this case are that a search and seizure operation was conducted at the corporate/administrative office premises as well as other business premises of the company Orris Group at house No.C- 3/260, Janakpuri, New Delhi, and a survey u/s 133 of the Act was also conducted. The assessee filed return of income on 24.03.2008 declaring 'nil' income and consequently notice u/s 153C was served upon the assessee and in response thereto, he has filed return declaring income of Rs. 39,76,600/- on 05.11.2009. 3. During search and seizure operation, it has come on record that by virtue of one agreement to sell, the assessee's group has received a cash of Rs. 1,15,00,000/- against sale of some land....
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....cals (2011) 335 ITR 259 (Del.). 7. The sole question arises for determination is, "as to whether Ld. CIT(A) has erred in quashing the penalty of Rs. 13,46,400/- imposed by the A.O. u/s 271(1)(c) of the Act". 8. We have heard Authorized Representatives of the parties, gone through the material placed on record in the light of facts and circumstances of the case and orders of tax authorities below. 9. Undisputedly, during the search and seizure operation conducted by the Revenue on 30.03.2008 at the premises of Orris group companies an amount of Rs. 1,15,00,000/- was found to have been received in cash by the company of the assessee by virtue of agreement to sell out of which, assessee has surrendered an amount of Rs. 40,00,000/- which was added to his taxable income; that in pursuance to notice u/s 153C, the assessee filed return declaring income of Rs. 39,76,600/- on 05.11.2009. 10. Ld. CIT(A) in para 6 & 7 of the impugned order came to the conclusion that since the surrendered amount of Rs. 40,00,000/- was received by the assessee company in the form of forfeiture of advance amount as sale has not been culminated and advance received against the sale of land, treated a....
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....the said amount in the F/Y 2009-10 had been filed it could be easily concluded that the said forfeiture actually happened in F/Y 2006-07 and same was in the knowledge of Shri Vijay Gupta and that is why he agreed to disclose the same as income for the F/Y 2006-07 as on the date of Search i.e. 13th March, 2008. The AR in response to this submitted his arguments that neither the receipt of advance nor its forfeiture constituted taxable income as the receipt of advance on account of proposed sale would remain the liability of the assessee till the transaction of sale actually takes place. It was submitted that in the event of forfeiture in the A/Y 2007-08 itself, the amount of advance received would lead to reduction in the work-in-progress and at the time of actual sale only the amount of advance received would automatically become the profit and hence income arid therefore, the timing of forfeiture did not materially effect the taxable income. The AR placed reliance upon the provisions of 5.51 of the LT. Act in support of his arguments. The AR therefore concluded his argument that since no sale actually took place therefore, the advance received in terms of agreement to sell did not....
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.... ) of the LT. Act, 1961. 8. It would also be relevant to refer to the judgement of Hon'ble Apex Court in the case of CIT Vs. Suresh Chandra Mittal 251 ITR 9(SC), wherein, the assessee had originally filed returns showing meager income. After search u/s 132 and notice for re-opening, revised returns were filed showing higher income. In penalty proceedings under section 271, assessee claimed that he had offered additional income to purchase peace and avoid litigation. Penalty orders were passed and Commissioner (Appeals) confirmed the orders. The Tribunal held that the department had not discharged its burden of proving concealment and no penalty can be levied. The High Court held that no penalty could be levied for concealment on the facts found by the Tribunal. On further appeal the Supreme Court dismissed the appeals by the department. The facts of the case clearly shows that the assessee agreed for inclusion of an item as income and there is no material besides the factum of disclosure by the assessee to show that the amount in question constituted income much less undisclosed income. The admission on part of the assessee that the amount received belongs to him did not ....