2018 (10) TMI 723

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....u/s. 271(l)(c) of the Income tax Act, 1,961, amounting to Rs. 80,4,044/-, without appreciating the view taken .by the AO." 2. The brief facts of the case are that the assessee firm is engaged in the business of builders filed its return of income for AY 2010-11 on 31- 07-2010 declaring total income of Rs. 2,49,96,730. The case was selected for scrutiny and the assessment was completed u/s 143(3) of the Act, on 31-01-2013 determining total income at Rs. 4,40,07,670, wherein the AO has assessed surplus from sale of property at Badlapur under the head 'Income from business' as aginst assessee's admission under the head 'Income from long term capital gain'. Thereafter, the AO initiated penalty proceeding u/s 271(1)(c) of the Income-tax Act, ....

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....s 271(1)(c) of the Act. The relevant observations of the Ld.CIT(A) is extracted below:- 9. I have carefully considered the above submssions of the AR of the appellant and I intend to agree with the contention made during appellate proceedings. The Hon'ble ITAT, Mumbai Bench "G". in the assessee's own case for A..Y. 2010-11 in !TA No.6692/Mumn/2013 vide order dated 25.05.2015 has held as under- "8. We have considered rival contentions and carefully gone through thwe orders of authorities below and also deliberated on the judicial pronouncements referred by lower authorities in their respective orders os we!! as cited by Id AR & Id. AR during the course of heating before us........ 9............. 10....

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....th the accounting of inventories prescribed in AS-2 nor incompliance to the provisions of Income Tax Act as laid down by the Hon'bte Bombay High Court in the case of Lokhanawala Construction (supra) and other decisions. e) The Badlapur Land was vested as Capital Asset by the assessee through MOU dt. 4.04.7 998 entered into between the partners of the assessee firm which was executed on Rs. 500 stamp paper and is duly notarised. The AO did not accept the MOU solely on the basis of doubts, surmise end conjecture, without any basis. f) The nomenclature given to Badlapur Land as WIP in books of accounts is an inadvertent mistake on the part of the assessee, solely due to the reason that the books of accounts of the assesse....

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....s. 84,49,0447- imposed by the AO u/s.271(1)(c) is deleted. 4. None appeared for the assessee. Therefore, we heard the Ld.DR and dispose of the appeal on the basis of material available on record. 5. We have heard the Ld.DR and considered the material available on record. The ITAT, Mumbai Bench "G" in ITA No.6692/Mum/2013, vide order dated 25-05-2016 has considered the issue of surplus from sale of land at Badlapur and after considering relevant facts held that surplus from sale of land is assessable under the head 'Income from long term capital gain" as claimed by the assessee, but not under the head "Income from business". The AO has levied penalty u/s 271(1)(c) for furnishing inaccurate particulars of income in respect of addition m....