2023 (11) TMI 288

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....ncome Tax Appellate Tribunal, Rajkot in ITA No. 110/Rjt/2020 and ITA No. 111/Rjt/2020 for the assessment year 2017-18. 2. The substantial question of law raised in the present appeals is as under: "Whether the Appellate Tribunal has erred in law and on facts in confirming the order of CIT(A) deleting the penalty levied under Section 270A of the Act without appreciating that this case of misreporting of income under Section 270A(8) and 270A(9) of the Act?" 3. For the sake of brevity and convenience, facts of Tax Appeal No. 649 of 2023 are taken for consideration: 3.1 During the year under consideration, the assessees Shri Prafulbhai Fuletra and Shri Dinesh Fuletra had entered into land sale transactions in respect of severa....

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....hri Dinesh Fuletra for the sale consideration of Rs. 4,20,60,000/- over and above amount of Rs. 46,08,000/- as per registered sale documents. The AO observed that in case no search action had been conducted on the searched party Shri Rajnikant Bhesdadia, the assessee would have shown only Rs. 46,08,000/- as sale consideration in respect of the above properties as per registered sale documents presented before the sub-registrar. Therefore, the on-money receipts of Rs. 4,20,60,000/- would have remained unaccounted in the books of the assessee, in case the search would not have been made at the premises of Shri Rajnikant Bhesdadia. Therefore, as per the AO this was a case of misreporting of income under subsection (8) and (9) of section 270A o....

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....held as under: "We have heard the rival contentions and perused the material on record. In view of the facts stated above, we observe that search was conducted at the premises of the third party and on the basis of diary seized during the course of search, certain additions were offered to tax by the assessee in order to buy peace. Since the search was conducted during the year under consideration, the accounts of the assessee were not finalised and there was still time for the assessee to file return of income. Accordingly, the addition amount offered to tax was reflected in the return of income filed by the assessee on 08-03-2018." 4. Reading the order of the Tribunal would indicate that the Tribunal while confirming the order....