AI Drafter 
TaxTMI 
TaxTMI 
2017 (3) TMI 1179
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....25,25,570/- (ITA No.305/PUN/2014) and Rs. 12,36,240/- (ITA No.306/PUN/2014) u/s.271(1)(c) of the Act levied by the Assessing Officer." 4. The only issue raised in the present appeal is against levy of penalty under section 271(1)(c) of the Act. Briefly in the facts of the case search and seizure action under section 132 of the Act was carried out on the premises of the assessee on 28-09-2006. During the course of search various documents were seized from the residence of the assessee which reflected that assessee along with four co-owners had received cash component on account of sale proceeds for a piece of land in Adgaon, Nashik. The assessee had executed a development agreement on 16-03-2006 and had also executed General Power of Attorney. The transaction was in respect of the land situated at Gat Nos. 556,558, 560, 567 and 559 at Adgaon, Taluka and District Nashik. The said land was divided into two parts, i.e. retention land and excess land. The Assessing Officer during the course of assessment proceedings elaborated on the various facets of the said transaction and held the assessee liable to tax the income under the head long term capital gains. The 1/5th share in the sai....
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....ending, then there is no merit in holding the assessee to have concealed its income and making it liable for levy of penalty under section 271(1)(c) of the Act. He further drew our attention to the certificate issued by Talati dated 19-04-2010 which is placed at page 32 of the paper book under which also, clearly, it is mentioned that different survey numbers owned by the assessee and others are under attachment of the Commissioner of Income Tax. The Ld. Authorised Representative for the assessee referred to the copy of the development agreement which is placed from page 87 onwards and referred to survey numbers and the area of the plot which was agreed to be developed and also referred to the attachment order and pointed out that all the portion of the plots, which the assessee had agreed to be developed have been attached by the Department. In other words, the said properties are still owned by the assessee and there is no question of charging the same to tax and in any case there is no merit in holding that the assessee had concealed its income and making it liable for levy of penalty under section 271(1)(c) of the Act. 8. The Ld. Authorised Representative for the assessee re....
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....see claims that though it had entered into the development agreement, but certain dispute arose between the parties. The terms of the said agreement could not be complied with and the civil suits are pending between the parties. In other words, the assessee has retained the said land till date and the same has not been transferred. The question which arises is because of the changed circumstances, where development of the property could not be completed and consequently the same could not be transferred, merely because the assessee had offered the cash component as income in his hands in the year under appeal, can the assessee he held to be liable to levy of penalty under section 271(1)(c) of the Act. 11. In order to adjudicate the issue, it is necessary to refer to the facts and events which have happened after the year under appeal, i.e. because of dispute between the parties, the transaction of development of property could not be completed. The said dispute has resulted in civil suit being filed and pending before the court. Various public notices have been issued for cancellation of development agreement. The assessee has filed additional evidences in this regard from pages....
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....nished before the said date, such income has not been declared therein; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, [unless,- (1) such income is, or the transactions resulting in such income are recorded, - (i) in a case falling under clause (a), before the date of the search; and (ii) in a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner] before the said date ; or (2) he, in the course of the search, makes a statement under sub-section (4) of section 132 that any money, bullion, jewellery or other valuable article or thing found in his posses....