TaxTMI 
TaxTMI 
2020 (8) TMI 445
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....eciation of the question proposed, it would be apposite to deal with the relevant facts :- (i) Appellant is an assessee under the Act. Appellant alongwith 4 others executed an agreement for sale dated 07.12.2004 in respect of a plot of land at Vasai. The total consideration stated in the agreement was Rs. 2,60,00,000.00 and conveyance was to be executed only upon receipt of the entire consideration. The appellant's share in the sale consideration of the said plot of land was 49.2%. During the financial year under consideration, a sum of Rs. 1,05,01,111.00 was received out of the total consideration of Rs. 2,60,00,000.00. Hence during the said financial year conveyance was not executed and possession was not handed over of the said plot. (ii) In the return of income filed by the appellant for the Assessment Year 2005-06, appellant offered to tax his share in the consideration received during the previous year i.e. Rs. 51,66,548.00. (iii) Respondent by notice dated 18.04.2007, called upon the appellant to furnish details of capital gains earned during the year under consideration i.e. Assessment Year 2005-06. Appellant furnished the requisite information alongwith a copy of the....
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....hat the revised returns would not be accepted in view of the appellant's letter dated 02.06.2008 by which the appellant had requested the respondent to consider the original return as the return in compliance to the notice under Section 148 of the Act. (xi) Appellant thereafter submitted a revised working of capital gains for the Assessment Years 2005-06 and 2006-07 and requested the respondent to complete the assessment for the 3 years, viz; Assessment Years 2005-06, 2006-07 and 2007-08. (xii) Respondent completed the reassessment for the Assessment Year 2005-06 on 26.11.2008 and taxed the appellant's share of capital gains arising on the entire sale consideration of Rs. 2,60,00,000.00 for the said Assessment Year 2005-06. However, while completing the above assessment respondent also initiated penalty proceedings against the appellant for furnishing inaccurate particulars of income as a result of deferring the charge on capital gains arising pursuant to execution of the sale agreement with respect to the said plot of land. (xiii) The assessments for the Assessment Years 2006-07 and 2007-08 were completed keeping in mind the reassessment completed for the Assessment Year 200....
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..... No. Date Particulars Exh. Pg. Nos. 1 07-12-2004 Agreement to sell land in Vasai for Rs. 2.6 crores- Appellant's share in land = 49.2%. Appellant receives only Rs. 51.66 Lakhs during F.Y. 2004-05. A 19-27 2 31-10-2005 Return for A.Y. 2005-06 offering Rs. 51,66,548/- and claiming exemption u/s. 54EC of the Act. B 28-30 3 31-03-2005 Assessment Order for A.Y. 2005-06 accepting Assessee's claim D 33-35 4 28-10-2006 Return for A.Y. 2006-07 filed offering Rs. 63,96,000/- as capital gains on Vasai Land being amount received during the year. E 36-42 5 16-11-2007 Return for A.Y. 2007-08 filed offering Rs. 7,38,000/- as capital gains on Vasai land being amount received during the year. F 43-45 6 21-04-2008 148 Notice issued by Respondents for A.Y. 2005-06 to bring to tax the entire gains in A.Y. 2005-06 7 20-08-2008 Revised return filed for A.Y. 2006-07 - withdrawing offer of capital gains in view of offer of entire gains to be made in A.Y. 200506 - revision not accepted in view of reopening of A.Y. 2005-06 I 50-56 8 21-08-2008 Revised return filed for A.Y. 2005-06 offering the entire gains to tax - not accepted since the return was b....
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.... that even though after receipt of the reassessment notice if the appellant had accepted assessibility of capital gains in Assessment Year 2005-06, it did not imply or mean that the appellant had furnished inaccurate particulars of income or the appellant had concealed particulars of income. The copy of agreement for sale dated 07.12.2004 was disclosed by the appellant at the time of scrutiny at the first instance i.e. in the Assessment Year 2005-06. The agreement was an unregistered document on a stamp paper worth Rs. 100.00. As per Clause 8 of the agreement, conveyance was required to be executed only upon receipt of the entire consideration which had not been fulfilled. Under Clause 14 of the agreement possession was required to be handed over only upon execution of conveyance. Again under Clause 12 of the agreement, appellant had given permission to the purchaser to fence the property as a mere licensee. On the basis of the aforesaid submissions he concluded that the agreement to sale did not constitute a "sale" under Section 2(47)(i) of the Act and, therefore, the land could not be deemed to be transferred under the Act. While levying the penalty, respondent was completely sil....
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....roperty Act and hence does not constitute transfer u/s 2(47)(v) of the Act- Sheshasayee Steel P. Ltd. v/s. ACIT - 421 ITR 46 (SC). C. Unregistered agreement to sell on Rs. 100 stamp paper does not result in a transfer u/s. 2(47)(v) of the Act - CIT v/s. Balbir Singh maini 398 ITR 531 (SC). D. Agreement specifically provides for conveyance and possession only on full payment, pending conveyance all permissions etc. in the name of Vendors - hence no de facto transfer for the purposes of 2(47) (vi) of the Act - Sheshasayee Steel p. Ltd. Vs. ACIT - 421 ITR 46(SC). E. When dispute between assessee and revenue is year of tax ability, penalty u/s 271(1)(c) should not be levied: (i) CIT Vs. Otis Elevator Co. Ltd. - ITXA No. 758 OF 2014 (ii) D M Dhanukar vs CIT - 65 ITR 280 (Bom) (iii) CIT vs Sri Shraddha Textile Processors - 286 ITR 499 (Mad) (iv) BTX Chemicals vs CIT - 288 ITR 196 (Guj) (v) CIT vs Jagjit Engineering Works P.Ltd.-275 ITR 239(P&H) F. Initiation of penalty for one offence and levy for another offence is not permissible - CIT vs Samson Perincherry [392 ITR 4] (Bom) G. This defect is compounded when the notice u/s 274 is blank, as it shows complete non-appl....
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....sub- clauses (v) and (vi), "immovable property" shall have the same meaning as in clause (d) of section 269UA;] Explanation 2. - For the removal of doubts, it is hereby clarified that "transfer" includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India;) "Section 53A of the Transfer of Property Act, 1882: 53A. Part performance.- Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, bein....
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....aled the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, in addition to the tax payable by him, a sum which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of particulars of his income or furnishing of inaccurate particulars of such income. 10. The two key expressions in Section 271(1)(c) of the Act are "concealment of particulars of his income" and "furnishing inaccurate particulars of such income". These two expressions comprise of the two limbs for imposition of penalty under Section 271(1)(c) of the Act. Gujarat High Court in the case of Manu Engineering Vs. CIT, 122 ITR 306 and Delhi High Court in Virgo Marketing P. Ltd. Vs. CIT, 171 Taxmann 156 held that levy of penalty has to be clear as to the limb for which the penalty is levied. If the Assessing Officer proposes to invoke the first limb, then the notice has to be appropriately marked. Similarly, if the Assessing Officer wants to invoke the second limb then the notice has also to be appropriately marked. If there is no striking off of the inapplicable portio....
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....ed that in the notice issued in printed format the inapplicable portion was not struck off. Therefore in that case, this Court found that in addition to the notice being defective, there was no finding or satisfaction recorded in relation to concealment or furnishing of inaccurate particulars of income. 14. This Court in a recent judgment passed in the case of Ventura Textiles Ltd. vs. Commissioner of Income Tax - Mumbai City - 11 in Income Tax Appeal No.958 of 2017 dated 12.06.2020 was concerned with a similar question with respect to issuance of the statutory show-cause notice under Section 274 read with Section 271 of the Act proposing to impose penalty. While dealing with the basic question of validity of the notice, this Court in paragraph Nos.23 to 25 held as under :- "23. The statutory show-cause notice under Section 274 read with Section 271 of the Act proposing to impose penalty was issued on the same day when the assessment order was passed i.e., on 28.02.2006. The said notice was in printed form. Though at the bottom of the notice it was mentioned 'delete inappropriate words and paragraphs', unfortunately, the Assessing Officer omitted to strike off the inapplicable p....
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....f furnishing inaccurate particulars of income whereas the penalty was imposed additionally for concealment of income, the order of penalty as upheld by the lower appellate authorities could be justifiably interfered with, still we would like to examine whether there was furnishing of inaccurate particulars of income by the assessee in the first place because that was the core charge against the assessee. 17. In CIT Vs Reliance Petroproducts Pvt. Ltd., 322 ITR 158 (SC), Supreme Court examined the meaning of the words 'particulars' and 'inaccurate'. As per Law Lexicon, the word 'particulars' means 'detail or details; the details of a claim or the separate items of an account'. Therefore, it was held that the word 'particulars' used in Section 271(1)(c) of the Act would embrace the meaning of the details of the claim made. Referring to Webster's Dictionary where the word 'inaccurate' has been defined as 'not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript', Supreme Court held that the two words i.e., 'inaccurate' and 'particulars' read in conjunction must mean that the details supplied in the return are not accurate, n....