TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 1095
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....e Act. The assessee filed reply requesting to keep the penalty proceedings in abeyance. However, in view of the proviso to Section 275(1) of the Act, the AO completed the penalty proceedings levying penalty of Rs. 1,00,000/-. 3. Brief facts of the case are that the assessee, resident of Palakol is a mechanical engineer. He last worked for Petrofact E&C International Ltd., Jebel Ali, Dubai upto 19.03.2008 and thereafter he returned to India permanently. During the previous year relevant to the assessment year 2008-09, the assessee had received the sale proceeds from the sale of disputed property and paid the advance tax of Rs. 21,30,000/-. The assessee filed the return of income declaring Nil income and claimed the refund of the entire amount of advance taxes paid along with detailed note on long term capital gains, wherein, he has mentioned the complete details of the transaction as under : *NOTE REGARDING LONG TERM CAPITAL GAINS An agreement of sale-cum-general power of attorney was executed by Shri R.K.Mittal on 10.10.2002 for the sale of 9507 sq.yds. in T.S.No.20/1A, 20/2 and 20/3 at Somajiguda, Hyderabad in favour of the assessee @Rs. 28,100/- per sq.yd. In respect of the ....
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....ht to tax. Since the AO treated the receipt as business income and the receipts exceeded the specified limit of Rs. 40,00,000/-, the AO initiated penalty proceedings u/s 271B of the Act. Accordingly levied the penalty of Rs. 1,00,000/- for non-maintenance of books of accounts, for assessee's failure to get the accounts audited as required u/s 44AB of the Act. 4. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and submitted that the assessee had received Rs. 3.4 Crores as advance and offered the total receipt for capital gains and paid advance tax. Therefore, admission of capital gains itself is reasonable cause for not getting the accounts audited. Therefore, argued that the assessee's case squarely falls under the exception provided u./s 271B in as much as there is reasonable cause for not getting the accounts audited, hence there is no case for penalty u/s 271B , accordingly requested the Ld.CIT(A) to cancel the penalty imposed by the AO. The Ld.CIT(A) considered the explanation of the assessee and observed that the AO passed the order treating the income received by the assessee as business income instead of long term capital gains as admitted b....
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....se of land admeauring 9507 sq.yds at Somajiguda, Hyderabad and paid an initial advance of Rs. 50,000/- and made certain payments subsequently. Shri RK Mittal was the decree holder for the property in question. Subsequently, a tripartite agreement was entered into between 1) RK Mittal (seller), the assessee(seller) and M/s Fortuna Infrastructure P.Ltd. represented by ShriP.C.Ashok of Hyderabad. By virtue of the said tripartite agreement, the property in question got vested in M/s Fortuna Infrastructure P.Ltd., Hyderabad. The final consideration that accrued to the assessee was Rs. 3,40,00,000/-. The amount was physically received by the assessee during the year. There was another tripartite agreement dated 10.04.2010 by the same parties. The tripartite agreements entered on 12.11.2007 and 10.04.2010 are similar and there is no substantive change. In the supplementary agreement dated 10.04.2010, it was agreed upon that the initial amounts paid by virtue of the tripartite agreement dated 12.11.2007 were accepted as final amounts and that no further amounts would be payable. Barring this there is nothing distinguishable in the supplementary agreement dated 10.04.2010. During the sc....
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....ted 10.10.2002 and the balance amounts were paid to him years later i.e. in Feb 2007. 6. The stamp paper verification dated 10.10.2002 revealed that the stamp papers sent for verification either not sold by the stamp vendor Shri M.Satyanarayana or they might have old stamp papers, which are tampered with the date of purchase. 7. The assessee has entered into similar deals of land purchase where the land in litigation which clearly establishes the fact that the assessee has been carrying out the business of purchasing of lands in litigation and selling them at a higher price where risk and margins are high. Therefore, the purchase of land in question can no way be termed as an investment, but is only a stock in trade. 8. The consideration received by the assessee represented consideration received in relinquishment of rights acquired through an agreement entered into with RK Mittal. Even the buyers, M/s Fortune Infra P.Ltd are fully aware that the assessee cannot improve upon the title. Whatever right that he had acquired by virtue of the agreement dated 10.10.2002 is being transferred for a definite consideration. 9. As far as the assessee is concerned, there is no obligati....