Facts: There was
a search conducted under Section 132 of the Act, and in which it was revealed
that in a real estate dealings, there were "on-money" transactions
and cash of Rs.27,00,000/- was seized. The assessee offered to admit the
"on-money", but claimed that it was taxable only on completion of the
projects under the 'completed contract method'. The assessee’s claim was
rejected by all the authorities including the High Court.
Penalty
proceedings were also initiated under Section 271(1)(c) of the Act. Against
which, the assessee claimed that there was a mistake in the entries regarding
the sale of flats to J.B. Exports in as much as the rate at which the property
was shown as sold to the said party was much higher than the rate at which the
property was sold to other parties. The AO and CIT(A) rejected the claim but
the Tribunal accepted it on the basis that the huge difference in the rate of
sale of the flat recorded in other cases and in the case of J.B. Exports
supported the assessee’s contention that there may be a mistake in recording
the rate. It held that as the department had failed to prove concealment without
any doubt, penalty could not be imposed. The department preferred an appeal to
High Court.
HELD
in favour of assessee:
Firstly,
it is to be stated that the findings recorded by the Tribunal is a finding of
fact. Therefore, unless it is shown that such finding is perverse, the same
cannot be interfered, while considering an appeal which can be entertained only
on a question of law.
Further, merely because the assessment
proceedings have been confirmed does not automatically mean that penalty u/s
271(1)(c) is justified.
The Hon'ble
Supreme Court in the case of Commissioner of Income Tax vs. Reliance
Petroproducts Pvt., Ltd., reported in [2010] 322 ITR 158 (SC)
pointed out that a “mere making of a claim,
which is not sustainable in law, by itself, would not amount to furnishing of
inaccurate particulars regarding the income of the assessee.”
The Hon’ble
SC in the case of Mak Data P. Ltd., vs. Commissioner of Income Tax-II), held
that the question would be whether the assessee had offered an
explanation for concealment of particulars of income or furnishing inaccurate particulars
of income and the Explanation to Section 271(1) raises a presumption of
concealment, when a difference is noticed by the Assessing Officer between the
reported and assessed income.
The burden
is then on the assessee to show otherwise, by cogent and reliable evidence and
when the initial onus placed by the explanation, has been discharged by the
assessee, the onus shifts on the Revenue to show that the amount in question
constituted their income and not otherwise.
On facts, the
onus cast upon the assessee has been discharged by giving a cogent and reliable
explanation. If the department did not agree with the explanation, then the
onus was on the department to prove that there was concealment of particulars
of income or furnishing inaccurate particulars of income. In the instant case,
such onus which shifted on the department has not been discharged. In the
circumstances, we do not find that there is any ground for this Court to substitute
our interfere with the finding of the Tribunal on the aspect of the bonafides
of the conduct of the assessee.
rahuljain@rpmd.in
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