TaxTMI 
TaxTMI 
2016 (12) TMI 243
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..... 1. The learned CIT(A) erred in upholding the order of A.O. levying penalty u/s.271(1)(c) of the Act of Rs. 4,50,368/- on addition u/s. 50C of Rs. 13,25,000/- being difference between stamp duty value and agreement value without appreciating that Assessee has neither concealed any income nor furnished inaccurate particulars of income as Assessee had made all bona fide disclosures during Assessment proceedings, Assessee was under the bonafide impression that land considered as sold was agricultural land and Capital Gains from sale of Agricultural Land was exempt and Assessee is regularly paying Income Tax and therefore penalty u/s. 271(1)(c) of Rs. 4,50,368/- may be deleted. 2. The learned CIT(A) erred in upholding the order of A.O. levying penalty u/s. 271(1)(c) of the Act of Rs. 4,50,368/- on addition u/s. 50C of Rs. 13,25,000/- being difference between stamp duty value and agreement value without appreciating that Sec. 50C is a deeming provision and addition u/s. 50C does not amount to concealment of income or furnishing inaccurate particulars of income and hence penalty u/s. 271(1)(c) of Rs. 4,50,368/- may be deleted. " 3. The Brief facts of the case are that the asses....
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....f Rs. 4.55 lacs was an unrealized consideration. The assessee submitted that the difference of Rs. 4.55 lacs was added to the income of the assessee by the AO in quantum assessment proceedings u/s 143(3) of the Act which was not accepted by the assessee. The assessee submitted there were no concealment of income or inaccurate particulars furnished by the assessee. It was submitted by the assessee that all the details were submitted by the assessee before the Revenue explaining the reasons for selling the land for Rs. 31.20 lacs. The A.O. rejected the contention of the assessee whereby it was observed that the assessee has not contested the basic fact with respect to the nondisclosure of capital gains earned on sale of land. It was observed by the AO that if the case of the assessee would not have been selected for scrutiny then the capital gains which were not disclosed by the assessee in the return of income filed with Revenue would not have been detected. The contention of the assessee during the assessment proceedings that he was under the belief that tax is not leviable on agricultural land and hence he did not disclose the said capital gains in the return of income filed wi....
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....th the Revenue. It was observed by the learned CIT(A) that even though the said income was exempt, still it was the duty of the assessee to show such exempt income in the return of income filed with the Revenue. The assessee did not include the particulars of capital gains in the original return of income as well as in the revised return of income filed with the Revenue, hence, penalty u/s 271(1)(c) of the Act is leviable as the assessee has concealed the particulars of income relating to capital gains earned by the assessee even till assessment was framed by the AO. The ld. CIT(A) observed that the assessee sold the land for a consideration of Rs. 31,20,000/- on 15.02.2008 , and stamp duty valuation adopted by registering authorities was at Rs. l,39,80,000/-. However, the DVO valued the property at Rs. 35,75,000/-. Thus, it is clear that the assessee has earned capital gain against this transaction which was not disclosed in the original return as well as revised return of income filed with the Revenue , despite the transaction of having earned capital gains being in the knowledge of the assessee but still it was not disclosed in the return of income filed with the Revenue. The le....
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....g thereon are exempted from capital gain tax u/s 54B of the Act. It was submitted that the land sold was an industrial land and reinvestment in the new land was also into an industrial land and not an agricultural land. Reference was drawn to the sale agreement/purchase agreement which are placed in the paper book filed with the Tribunal. It was also submitted that no consideration has been received in the impugned assessment year which was received in the subsequent year. It was submitted that no taxes were paid in the subsequent year also as the said capital gains were not even declared in the succeeding year. It is submitted that assesse is buying land regularly and disclosure has been made in the balance sheet.It was submitted that the sale consideration of the land was reduced from the Block of the Asset for the next year i.e. financial year 2008-09. It was also submitted that the land was purchased from the same person(s) to whom this land under consideration was sold and hence the assessee was under a bonafide belief that the land was exchanged , the assessee did not disclose and pay capital gain on the sale of this land while capital gains w.r.t. other transactions in prope....
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....Perusal of the development agreement dated 29-02-2008 with respect to sale of land being survey no. 32 Hissa No 3/27/6 admeasuring 00H, 06R means total area 2600 square meters lying being situated within the limits of industrial area in the village Kondhva Budruk , Pune , MIDC area (page 87/pb) and it is clearly stated in the development agreement dated 29-02-2008 as under(page 91/pb) :- " AND WHEREAS :- The said properties are not under cultivation . It is a barren land there is no source of water. The said property is under Industrial Area as per the plan of Municipal Corporation of Pune." Thus, the plea of the assessee that the land is an agricultural land lacks merit and is not borne out of the records and the assessee during assessment accepted that the land is not agricultural land but an industrial land. Thus, this explanation offered by the assessee that the said land was an agricultural land and hence not exigible to tax could not be held to be a bonafide explanation as the facts narrates a totally different story that the said land being under MIDC and a barren land having no source of water is not under cultivation , to take it out of ambit from the penalty prov....
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.... to the capital asset which include 'exchange' of the asset. The word 'transfer in relation to a capital asset is defined as under: "Definitions. 2. In this Act, unless the context otherwise requires,- **** **** (47) ["transfer", in relation to a capital asset, includes,- (i) the sale, exchange or relinquishment of the asset ; or **** ****" Thus, the explanation offered by the assessee could not be considered a bonafide explanation keeping in view the clear definition of the word 'transfer' under the provisions and scheme of the Act as contained in Section 2(47) of the Act which is exigible to tax under Chapter IV-E of the Act. In any case the assessee entered into two different agreements for sale and purchase of land and also the consideration were paid and received in monetary terms at the time of purchase and sale of two different land's and it was not an exchange of land. The assessee claimed that the DVO valuation of Rs. 35.75 lacs was substituted by actual sales consideration of Rs. 31.20 lacs , wherein the difference was added to the income owing to deeming fiction created by Section 50C of the Act. We are in agreement with the a....