Mrs. Pooja Rohit Bhandari, Pune V. Income-tax Officer,

ITA 174/PUN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93829 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y K BHASKAR
• Assessee Lawyers: VIPIN GUJRATHI
• Keywords: Capital asset; Business income; Additional evidence; Initiation of penalty proceedings; Wrong claim; Difference of opinion; Onus to prove; Bonafide mistake
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NOS.173 & 174/PN/2014 (ASSESSMENT YEARS : 2005-06 & 2006-07) MRS. POOJA ROHIT BHANDARI 401/402, POONAM PLAZA, MARKET YARD, PUNE-411037 PAN NO.AEOPR3288P .. APPELLANT VS. ITO, WARD-2(1), PUNE .. RESPONDENT APPELLANT BY : SHRI VIPIN GUJRATHI DEPARTMENT BY : SHRI Y.K. BHASKAR DATE OF HEARING : 10-06-2015 DATE OF PRONOUNCEMENT : 30-06-2015 ORDER PER R.K. PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 30-09-2013 OF THE CIT (A)-II, PUNE RELATING TO ASSESSMENT YEARS 2005-06 & 2006-07 RESPECTIVELY . FOR THE SAKE OF CONVENIENCE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. LEVY OF PENALTY OF RS.21,39,266/- U/S.271(1)(C) OF THE I.T. ACT BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A) FOR A.Y. 2 005-06 (RS. 43,91,971/- FOR A.Y. 2006-07) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL FOR BOTH THE YEARS. 3. FIRST WE TAKE UP ITA NO.174/PN/2014 FOR A.Y. 2006-07 A S THE LEAD CASE. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 30-07-200 8 DECLARING TOTAL INCOME OF RS.2,75,990/-. DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSE E SOLD PART 2 OF LAND AT S.NO 277 SITUATED IN THE INDUSTRIAL AREA AT MAAN , PUNE TO M/S W B ENGINEERS PVT. LTD ON 29-3-2005 FOR A CONSID ERATION OF RS. 2,30,00,000/- AND THE BALANCE PORTION OF THE SAID LAND W AS SOLD IN THE SUBSEQUENT A.Y. 2006-07 TO M/S. GLOBAL INFRASTR UCTURE ON 13-4-2005 FOR A CONSIDERATION OF RS. 1,50,00,000/-. THERE AFTER THE LAND WAS TRANSFERRED TO SAKAL PAPERS LTD FOR A CONS IDERATION OF RS. 2,95,00,000/-. THE ASSESSEE CLAIMED THAT LAND TO BE OF T HE NATURE OF AGRICULTURAL LAND AS PER SEC 2(14)(III) OF THE ACT AND ACCORDINGLY THE PROFIT DERIVED FROM ITS SALE WAS CLAIMED TO BE EXEMPT AND NOT LIABLE TO TAX. THE ASSESSEE FILED THE 7/12 EXTRACT OF THE LAND AND CONTENDED THAT THE LAND WAS AGRICULTURAL LAN D AND THE SAME WAS USED FOR AGRICULTURAL ACTIVITIES ON WHICH GRAS S WAS CULTIVATED AND THAT THE GRASS CULTIVATION INVOLVED HUMAN LABOUR AND SKILL AND WAS NOT GROWN SPONTANEOUSLY. 4. IT WAS ALSO SUBMITTED BEFORE THE ASSESSING OFFICER THAT THERE WAS NOT MUCH PROFIT AS EXPENDITURE WAS EQUAL TO THE INCO ME AND HENCE NO AGRICULTURAL INCOME WAS DECLARED. THE ASSESSEE A LSO CLAIMED THAT SHE HAD INCURRED THE EXPENDITURE ON THE DE VELOPMENT OF THE SAID LAND FOR THE USE OF AGRICULTURAL PURPOSE AND TILL THE DATE OF TRANSFER OF THE LAND IT WAS NOT CONVERTED TO NON-AGRIC ULTURAL USE. THE SAID LAND WAS PURCHASED IN THE MONTH OF JUNE 2000 A ND WAS CULTIVATED FOR AGRICULTURAL PURPOSES FOR 5 YEARS. HOWEVER, W HEN THE FACT GATHERED BY THE ASSESSING OFFICER WAS CONFRONTED TO THE ASSESSEE, THE ASSESSEE FILED LETTER DATED 16-12-2008 AND ADMITTED THAT IT WAS A CAPITAL ASSET AND THE CLAIM MADE TO BE A BONAFIDE MISTAKE AND THERE WAS NO DELIBERATE INTENTION TO EVADE TAX. THE ASSESSEE ALSO STATED THAT THE DISTANCE FROM PCMC LIMIT R EMAINED UN-NOTED DUE TO OVERSIGHT AND HENCE MADE THE WRONG C LAIM OF EXEMPTION BY MISTAKE. THE ASSESSING OFFICER WAS ALSO OF THE 3 OPINION THAT THE SAID LAND TRANSACTION WAS ADVENTURE IN THE NATURE OF TRADE AND PROFIT ON THE SALE OF LAND TO BE WORKED OUT AS BUSINESS PROFITS. 5. THE ASSESSEE'S EXPLANATION IN THIS REGARD WAS NOT FOUND TO BE ACCEPTABLE TO THE ASSESSING OFFICER WHO OBSERVED THAT WH EN THE LAND WAS PURCHASED, THE ASSESSEE WAS HARDLY 19 YEARS OLD AND SUBSEQUENTLY MIGRATED TO CHENNAI AFTER MARCH 2005 AND THAT HER FATHER WAS THE SOLE CONTROLLING AUTHORITY ON THE BASIS OF T HE POWER OF ATTORNEY AND WHO HAD ALSO OBTAINED LOAN FROM JANATA SAHAKARI BANK, PUNE ON HYPOTHECATION/MORTGAGE OF THE SAID LAND. TH E ASSESSING OFFICER THUS TREATED THE SAID TRANSACTION AS AN ADVENTURE IN THE NATURE OF TRADE AND TREATED PROFIT/GAIN ON SALE OF LAND AS BUSINESS INCOME. THE ASSESSEE, THEREAFTER, CHALLENGED THE A CTION OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A) TREATING THE SAID LAND AS THE CAPITAL ASSET AND CLAIMED THAT IT WAS BEYOND 8 KMS O F THE PCMC LIMITS AND HENCE THE SAME CANNOT BE TREATED AS CA PITAL ASSET U/S. 2(14) AND, THEREFORE, THE PROFIT OR GAIN ON TRANSFER WAS NOT TAXABLE. 6. THE ASSESSEE ALSO CHALLENGED THE ACTION OF THE ASSESS ING OFFICER IN TREATING THE PROFIT ON SALE OF THE PLOT OF LAND AS B USINESS INCOME AND CONTENDED TO TREAT THE SAME AS CAPITAL GAIN. THE ASSESSEE, TO PROVE HER STAND, ALSO PRODUCED CERTIFICATES OF THE KAMGAR TALATHI, MAAN, TAL: MULSHI, DIST: PUNE AND FILED THE SAME UNDER RULE 46A WITH A REQUEST TO ADMIT THE SAID CERTIFICA TE AS AN EVIDENCE. 7. THE LD. CIT(A) CALLED FOR A REPORT OF THE ASSESSING OFFICE R IN THIS REGARD. THE ASSESSING OFFICER IN HIS REPORT DENIED TH E CLAIM OF THE ASSESSEE THAT THE SAID CERTIFICATE WAS SUBMITTED DUR ING 4 ASSESSMENT PROCEEDINGS. IN THE COMMENTS THE ASSESSING OFFICER NOTED THAT THE CERTIFICATE OBTAINED FROM THE ASSTT. DIIECT OR, TOWN PLANNING IN RESPECT OF THE DISTANCE OF LAND WAS COMMUNICAT ED TO THE ASSESSEE AND IN RESPONSE THE ASSESSEE HAD FILED LETT ER DATED 16-12-2008 ADMITTING THE MISTAKE AND STATED THAT THE DISTANCE FROM THE PCMC LIMIT REMAINED UNQUOTED THROUGH OVERSIGHT. T HE ASSESSING OFFICER THUS OBJECTED FOR ADMITTING THE CERTIFICAT E OBTAINED BY THE ASSESSEE FROM KAMGAR TALATHI DATED 14-1 -2010. THE LD. CIT(A) WITH RESPECT TO ONE OF THE ISSUES I.E. OF TREA TMENT OF THE GAIN/PROFIT ON SALE OF LAND ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE SALE OF THE PLOT OF LAND CANNOT BE TRE ATED AS AN ADVENTURE IN THE NATURE OF TRADE AND HELD THE SAME TO BE ASSESSED UNDER THE HEAD 'CAPITAL GAIN'. HOWEVER ON THE SECOND ISS UE WHETHER THE SAID LAND IS AN AGRICULTURAL LAND THE CONTENTIO N OF THE ASSESSEE WAS REJECTED AND HELD THAT THE LAND IN QUESTIO N WAS WITHIN 8 KMS OF THE PCMC LIMITS. THE LD. CIT(A) ALSO REJECTED THE REQUEST OF THE ASSESSEE TO ADMIT THE ADDITIONAL EVIDENCE FURNISHED BEFORE HIM UNDER RULE 46A. IT MAY BE PERTINENT TO NOTE THAT IN FURTHER APPEAL FILED BY THE ASSESSEE THE TRIBUNAL UPHELD T HE ORDER OF THE LD CIT(APPEALS). IN ITS OBSERVATION REGARDING THE NA TURE OF THE SAID LAND, THE TRIBUNAL HAS HELD AS UNDER: '7. WE FIND THAT ASSESSEE IS TAKING CONTRADICTORY STAND BEFOR E THE A.O. AND BEFORE CIT(A) ON THIS PARTICULAR ASPECT. WHEN THE ASSESSEE FILES A CERTIFICATE FROM THE TALATHI, SHE HAS TO FIRST OF ALL CONTROVERT HOW THE CERTIFICATE GIVEN BY THE ANOTHER COMPETENT AUTH ORITY IS NOT CORRECT. BUT SHE PREFERS TO BE SILENT ON THIS IMPORTANT CERTIFI CATE. SO FAR AS THE REJECTION OF THE EVIDENCE BY THE LD. CIT(A) IS CONCE RNED, WE ADMIT THE EVIDENCE IN THE FORM OF CERTIFICATE ISSUED BY KAMGAR TALATHI IN THE INTEREST OF JUSTICE. AS TRIBUNAL BEING LAST FACT FINDIN G /AUTHORITY, THE ASSESSEE SHOULD HAVE EVERY OPPORTUNITY TO PROVE HIS/HER C AST. EVEN IF THE SAID CERTIFICATE IS ADMITTED, THE SAME IS NOT MUCH MORE HELP TO THE ASSESSEE. ASSESSEE HAS FILED THE COPY OF THE SAID CERTIFICATE AT PAGE 11 OF THE COMPILATION WHICH IS IN MARATHI AND ENGLISH TR ANSLATION AT PAGE NO. 12. WE HAVE ANXIOUSLY PERUSED THE CERTIFICATE ISSUE D BY THE KAMGAR TALATHI AND WE FIND THAT IT IS GENERAL IN NAT URE. IF THE ASSESSEE HAS TO DESTROY THE EVIDENCE AGAINST HER, THEN SHE SHOULD HAVE FILED SUCH CERTIFICATE WHICH SHOULD BE SUPPORTED BY A PROPER MAP, AS THE 5 DISTANCE CANNOT BE DETERMINED ON THE BASIS OF LOCAL EN QUIRIES AS MENTIONED BY THE 'KAMGAR TALATHI' IN HIS CERTIFICATE . DETERMINATION OF DISTANCE IS A TECHNICAL SUBJECT AND SAME CANNOT BE CONC LUDED OR DETERMINED ON BASIS OF LOCAL ENQUIRES. HENCE, CERTIFIC ATE OF TALATHI WHICH IS FILED BY THE ASSESSEE DOES NOT SUPPORT HER CASE O N THIS POINT.' 8. DURING THE PENALTY PROCEEDINGS THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSION FILED BY THE ASSESSEE HELD THAT THE ASSESSEE HAD MADE A WRONG CLAIM OF THE LAND IN QUESTION T O BE OF THE NATURE OF AGRICULTURAL LAND AND THE SAME WAS CLEARLY A CAPITAL ASSET WHICH IS CONFIRMED BY THE OFFICE OF TOWN PLANNING & VALUATION DEPARTMENT AND ALSO ADMITTEDLY ACCEPTED BY TH E ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS TO BE A MISTAKE OF TREATING THE LAND AS AN AGRICULTURAL LAND EXEMPT AND NO T LIABLE FOR TAX. THE ASSESSING OFFICER, REGARDING THE CERTIFICATE OF TALATHI PRODUCED BEFORE THE LD CIT(A), NOTED THAT THE ASSESSEE NOT ONLY MADE A WRONG CLAIM BEFORE THE ASSESSING OFFICER BUT ALSO BE FORE THE LD. CIT(A) DURING THE APPELLATE PROCEEDINGS. THE ASSESS ING OFFICER THUS LEVIED MINIMUM PENALTY OF RS.43,91,971/- FOR A.Y. 2005-06 AND RS.21,39,266/- FOR A.Y. 2006-07 AFTER HAVING SATISFIED THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME FOR BOTH THE ASSESSMENT YEARS I.E. A.Y. 2005-06 AND A.Y. 2006-07. 9. BEFORE CIT(A) IT WAS SUBMITTED THAT THE ASSESSING OFFICER IS UNSURE OF THE FACT WHETHER IT IS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME AND TH E ASSESSMENT ORDER REFERS TO DELIBERATE ATTEMPT TO EVADE THE TAX WHEREAS THE PENALTY ORDER REFERS TO CONCEALMENT OF PART ICULARS OF INCOME. THE ASSESSEE DREW THE ATTENTION OF THE CIT(A) TO THE STATEMENT OF INCOME AND ACCOUNTS WHICH REFLECT THE FACTUM OF SALE OF LAND AND A NOTING BELOW WHICH SHOWS THAT THE ASSESSEE SOLD AGRICULTURAL LAND BEYOND 8 KMS FROM THE LOCAL LIMITS OF MUNICIP AL CORPORATION AND PROFIT ON THE SAME BEING NON-TAXABLE NOT INCLUDED 6 IN THE COMPUTATION OF INCOME. THE ASSESSEE ALSO DREW THE ATTENTION OF THE CIT(A) TOWARDS THE OBSERVATION OF THE ITAT PUNE THAT ON THE ISSUE OF NATURE OF LAND, WHETHER IT IS AGRICULTURAL OR NON- AGRICULTURAL, THE CIT(A) AND THE ASSESSING OFFICER HAVE NOT G IVEN ANY CLEAR FINDING. THE ASSESSEE STATED THAT ON THE ISSUE OF DISTANC E OF 8 KMS IN PARAS 7 AND 8 OF THE ORDER, ITAT HAS CLEARLY INDICATED THAT THERE IS EVIDENCE IN SUPPORT OF THE CONTENTION OF TH E ASSESSEE BUT THE SAME HAS NOT BEEN ACCEPTED RESULTING IN NEGATIO N OF THE CLAIM AND, THEREFORE, AT BEST THIS IS THE CASE OF ERRONEOUS CLAIM AND NOT A CASE OF CONCEALMENT OF PARTICULARS OF INCOME AS CONC LUDED BY THE ASSESSING OFFICER. THE ASSESSEE SUBMITTED THAT THE AS SESSING OFFICER HAS CHOSEN TO IGNORE THE JUDICIAL PRECEDENTS CITED BEFORE HIM IN THE SUBMISSION DATED 5-8-2011 IN SUPPORT OF THE PROPOSITION THAT THERE IS NO CASE OF LEVY OF PENALTY. THE A SSESSEE FURTHER PLACED RELIANCE ON THE DECISION OF THE HONBLE KARN ATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATHA COTTON GINN ING FACTORY VIDE ITA NO 2564/05 DATED 13-12-2012, THE DEC ISION OF AMRITSAR BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS PA THANKOT PRIMARY CO-OP. DEVELOPMENT BANK LTD., REPORTED IN 142 TTJ 401(ASR) AND THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS RAJIV BHATARA REPORTED IN (2013) 94 DTR 137 (P&H) IN SUPPORT OF THE CLAIM. 10. HOWEVER, THE LD.CIT(A) WAS ALSO NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE PENALTY LEVIED BY THE ASSESSING OFFICER BY OBSERVING AS UNDER : 3.4 THE SUBMISSION MADE BY THE APPELLANT HAS BEEN CAREFULL Y CONSIDERED AND THE MATERIAL ON RECORD PERUSED. THE W ORD 'CONCEAL' MEANS TO HIDE, TO KEEP SECRET. THE PHRASE 'CONCEALED T HE PARTICULARS OF HIS/HER INCOME' WOULD INCLUDE FALSE DEDUCTION OR EXEM PTIONS CLAIMED BY THE ASSESSEE IN HIS/HER RETURN. THE WORD 'CONCEAL' IN VOLVES A KNOWLEDGE ON THE PART OF THE ASSESSEE OF THE REAL INCOM E WHEN GIVING THE PARTICULARS. CONCEALMENT MIGHT ARISE EVEN IF THE STATEMENT AS TO 7 THE INCOME IS GUARDED ONE, AS FOR E.G. THE ENQUIRY SH OULD BE MADE TO ASCERTAIN THE CORRECT INCOME. IF THERE IS DELIBERATE UNDERESTIMATE OF INCOME, AN INFERENCE OF CONCEALMENT CAN BE DRAWN. C ONCEALMENT OF INCOME MAY ARISE IN VARIOUS WAYS. THE APPELLANT IN THE PRESENT CASE HAS NOT INCLUDED THE PROFIT ARISING OUT OF THE SALE O F LAND TREATING THE SAME AS NON-TAXABLE BEING NOT A CAPITAL ASSET U/S 2(14) (III) OF THE ACT. THE APPELLANT HAS TAKEN A STAND THAT THE SAID LAND WAS AN AGRICULTURAL LAND SITUATED BEYOND THE DISTANCE OF 8 KMS, THE LIMIT OF THE MUNICIPAL CORPORATION. HOWEVER, DURING THE COURSE OF ASSESSMENT PR OCEEDINGS THE ASSESSING OFFICER FOUND THE LAND TO BE SITUATED IN T HE INDUSTRIAL ZONE AT MAAN. FURTHER ENQUIRIES CARRIED OUT BY THE A SSESSING OFFICER WITH THE OFFICE OF THE TOWN PLANNING AGRICULTURAL D EPT AND THE ASSTT. DIRECTOR OF TOWN PLANNING REVEALED THAT THE SAID LAN D WAS SITUATED WITHIN 8 KMS TO THE EXTENT LIMIT CHINCHWAD MUNICIPAL CORPORATION (PCMC) W.E.F. 11-9-1997. THE APPELLANT ON BEING CON FRONTED WITH THE AFORESAID FACT ADMITTED VIDE LETTER DATED 16-12-2008 THAT IT WAS A CAPITAL ASSET AND THE CLAIM WAS BONAFIDE MISTAKE AND T HERE WAS NO DELIBERATE INTENTION TO EVADE TAX. THE APPELLANT AL SO STATED THAT DISTANCE FROM PCMC LIMIT REMAINED UN-NOTED DUE TO OV ERSIGHT AND HENCE MADE THE WRONG CLAIM OF EXEMPTION BY MISTAKE. IT HAS ALREADY BEEN SEEN THAT THE SAID PLOT OF LAND WAS PURCHASED BY T HE APPELLANT WHEN SHE WAS HARDLY 19 YEARS OLD AND WHO SUBSEQUENTLY MI GRATED TO CHENNAI AND HER FATHER BEING THE SOLE CONTROLLING AU THORITY ON THE BASIS OF POWER OF ATTORNEY HAD ALSO OBTAINED LOAN AMOU NTING TO RS. 3.02 CRORES' FROM JANATA SAHAKARI BANK, PUNE ON THE HYPOTHECATION/MORTGAGE OF THE SAID LAND. THE APPELLA NT AFTER HAVING ADMITTED THE LAND TO BE A CAPITAL ASSET AGAIN CHALLEN GED THE ACTION OF THE ASSESSING OFFICER BEFORE THE LD CIT(A) AND AGAIN STA TED THE LAND TO BE BEYOND 8 KMS OF THE MUNICIPAL CORPORATION LIMITS A ND FOR WHICH CERTIFICATES OF TALATHI MAAN, MULSHI TALUKA WAS PRODUC ED WHICH HOWEVER, WAS NOT ADMITTED AS ADDITIONAL EVIDENCE U/R 46A THOUGH THE SAME WAS ALLOWED TO BE ADMITTED BY THE ITAT AND IT HA S BEEN OBSERVED THAT EVEN IF THE CERTIFICATE IS ADMITTED, T HE SAME IS NOT MUCH MORE HELP TO THE ASSESSEE AS THE SAME WAS FOUND TO BE OF 'GENERAL IN NATURE 1 AND THE SAME WAS NOT CONSIDERED TO SUPPORT THE CASE OF THE APPELLANT. IT WAS ALSO NOTED BY THE ITAT THAT THE APP ELLANT HAS BEEN TAKING CONTRADICTORY STAND BEFORE THE ASSESSING OFFICER AND THE CIT(A) ON THIS PARTICULAR ASPECT. THE ITAT EVEN CONSIDERED TH E JUDICIAL DECISIONS RELIED UPON BY THE APPELLANT AND NOTED THAT THE ASSESSEE HAS FAILED TO PROVE THE LAND IN QUESTION IS BEYOND DISTANC E OF 8 KMS FROM THE LOCAL LIMIT OF PCMC. THE APPELLANT DURING THE A SSESSMENT PROCEEDINGS HAD ADMITTED THE MISTAKE AND CONCEDED THE INCOME TO BE TAXABLE UNDER CAPITAL GAINS AND HAD EVEN FURNISHED T HE DETAILED WORKING OF THE SAME VIDE LETTER DATED 26-12-2008. TH E LD. CIT(A) IN HIS ORDER HAS CLEARLY NOTED THAT DURING THE APPELLATE PROCEEDINGS THE CONTRADICTORY STAND TAKEN BY THE APPELLANT WAS AN AFT ERTHOUGHT AND A DEVICE TO ESCAPE THE LEGITIMATE TAX LIABILITY. THE ASSTT. DIRECTOR TOWN PLANNING IN ITS LETTER DATED 8-12-2008 HAD SPECIFICAL LY MENTIONED THAT THE LAND WAS SITUATED WITHIN 8 MS OF THE EXTENDED LIMI TS OF PCMC W.E.F. AS EARLY AS 11-9-1997 AND THE PURCHASE OF LAND WAS MADE BY THE APPELLANT DURING A.Y. 2000-01. THUS THE FACT ON RECO RD CLEARLY INDICATE THAT THE APPELLANT ALONG WITH HER FATHER WHO HAD BE EN INSTRUMENTAL IN UTILIZING THE LAND THROUGH POWER OF ATTORNEY WERE F ULLY AWARE OF THE LAND BEING SITUATED WITHIN 8 KMS OF THE PCMC LIMITS AN D WITHIN THE INDUSTRIAL ZONE. THE APPELLANT AT NO POINT OF TIME H AVE OBJECTED TO THE CERTIFICATE GIVEN BY THE ASSTT. DIRECTOR OF TOWN PLAN NING NOR EVEN CONTROVERTED ITS CORRECTNESS RATHER CHOSE TO FILE A CER TIFICATE FROM THE TALATHI WHICH HAS BEEN FOUND TO BE OF NO HELP TO THE APPELLANT. THUS THE APPELLANT HAD CONSCIOUSLY FILED INACCURATE PARTIC ULARS AND 8 CONCEALED THE INCOME ARISING OUT OF THE SALE OF LAND. THE FINDINGS OF THE HON'BLE ITAT CLEARLY POINT OUT TO THE FACT THAT THE ISSUE WAS NEITHER DEBATABLE AS CLAIMED BY THE APPELLANT NOR AN ERRONEOUS CLAIM MADE BY HER. IT IS A CLEAR CASE OF CONCEALMENT OF INC OME AND A DELIBERATE ACT OF OMISSION ON THE PART OF THE APPELL ANT IN FILING INACCURATE PARTICULARS. THUS THE CASE LAWS RELIED UPON BY THE APPELLANT EVEN BEFORE THE ASSESSING OFFICER OF THE APEX COURT IN CIT VS RELIANCE PETROPRODUCTS P. LTD, 322 ITR 158 IS NOT APPLICABLE T O THE FACTS OF THE PRESENT CASE AS IN THAT CASE THE DETAILS SUPPLIED BY THE ASSESSEE IN THE RETURN WAS NOT FOUND TO BE INCORRECT OR ERRONEOUS AND THAT WAS HELD TO NOT ATTRACT PENALTY U/S 271(1)(C) AS ALL RELEVANT INFORMATION WAS DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. IN THE PRESENT CASE THE APPELLANT HAS NOT DISCLOSED ALL THE RELEVANT I NFORMATION IN THE RETURN OF INCOME AND RATHER DELIBERATELY CHOSE TO CL AIM THE INCOME EXEMPT BY FILING INACCURATE PARTICULARS AND THEREBY CONCEALING THE INCOME AS THE DETAILS FILED IN THE RETURN WERE FOUND TO BE INCORRECT. 3.5 THE CLAIM THUS MADE WAS NOT BONAFIDE RATHER IT WA S WITH A MALAFIDE INTENT. A WRONG CLAIM BY ITSELF DOES NOT WAR RANT PENALTY IF THE FACTS RELATING TO THE SAME ARE DISCLOSED. IN ORDER TO C ALL THE PARTICULARS AS ACCURATE THE ASSESSEE MUST BELIEVE THAT THE SAID PARTIC ULARS ARE ACCURATE ON FACT AND DISCLOSURE WHICH HAS BEEN MADE I N ANY PART OF THE RETURN WHICH IS INCORRECT OR FALSE TO THE KNOWLEDGE O F THE ASSESSEE IF THAT FACT IS ESTABLISHED SUCH DISCLOSURE CANNOT TAKE IT O UT FROM THE PURVIEW OF THE ACT OF FURNISHING OF INACCURATE PARTI CULARS THEREBY CONCEALMENT OF THE PARTICULARS FOR THE PURPOSE OF LEV Y OF PENALTY. THUS THE RELIANCE PLACED BY THE APPELLANT ON THE APEX CO URT DECISION IN THE CASE OF RELIANCE PETROPRODUCT PVT. LTD (CITED SUPRA) BEFORE THE ASSESSING OFFICER AS ON THE FACT THE SAID CASE LAW DO NOT APPLY AS IT DOES NOT PERTAIN TO DISCLOSURE OF CLAIM OR DIFFERENCE OF OPINION RATHER IT IS A CASE OF FILING INACCURATE PARTICULARS. THE HON 'BLE SUPREME COURT CLARIFIED IN DILIP N SHROFF VS JCIT (2007) 291 ITR 5 19 (SC) THAT EXPLANATION-L RAISED A LEGAL FICTION BY REASON WHEREO F THE BURDEN OF PROOF SHIFTS FROM THE DEPARTMENT TO THE ASSESSEE. HOWEVE R, LEGAL FICTION CAN BE GIVEN FULL EFFECT ONLY WHEN THE COND ITIONS PRECEDENT THEREOF IS SATISFIED. THE WORD 'INACCURATE' SIGNIFIES A DELIBERATE ACT OR OMISSION ON THE PART OF THE ASSESSEE. SUCH DELIBERATE AC T MUST BE EITHER FOR THE PURPOSE OF FURNISHING INACCURATE PARTI CULARS OR CONCEALMENT OF INCOME. IT ALSO HELD THAT UNDER EXPLA NATION-L THE ASSESSING OFFICER IS REQUIRED TO ARRIVE AT A FINDING THA T THE EXPLANATION OFFERED BY THE ASSESSEE IN THE EVENT HE OFFERS ONE, WAS FALSE. HE MUST BE FOUND TO HAVE FAILED TO PROVE THAT SUCH EXPLANATI ON IS NOT ONLY BONAFIDE BUT ALL THE FACT RELATING TO THE SAME AND M ATERIAL TO THE INCOME WERE NOT DISCLOSED BY HIM. THE ASSESSING OFFICER I N THE PRESENT CASE HAS CLEARLY GIVEN A FINDING AS TO HOW AND IN WHAT MANNER THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF HER INCOME. 3.5.1 THUS IN VIEW OF THE EXPLANATION I TO SEC 271(1) (C) WHICH PROVIDES THAT WHERE IN RESPECT OF ANY FACT, MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON, SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND T O BE FALSE OR OFFER AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AN D FAIL TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE F ACT RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF INCOME HAVE DISCLOSED BY HIM THEN THE AMOUNT ADDED OR DISALLOWED SHALL BE DEEM ED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS H AVE BEEN CONCEALED FOR THE PURPOSES OF SEC 271(1)(C). THUS IN VI EW OF EXPLANATION I TO SEC 271(1)(C), THE PRIMARY ONUS IS ON THE ASSESSEE TO PROVE THAT THERE WAS NO CONCEALMENT. THE FACT OF TH E PRESENT CASE DO 9 NOT SHOW THE CONDUCT OF THE APPELLANT TO BE BONAFIDE AND INNOCENT RATHER THE CONTUMACIOUS CONDUCT OF THE APPELLANT CAN REASONABLY BE INFERRED. 3.5.2 THE OTHER CASE OF THE APEX COURT RELIED UPON B Y THE APPELLANT BEFORE THE ASSESSING OFFICER DURING PENALTY PROCEEDINGS, OF UOI VS RAJASTHAN SPINNING AND WEAVING MILLS, 23 DTR 158 HELD THAT ONLY CONSCIOUS OR DELIBERATE WRONG DOING WOULD ATTRACT PEN ALTY AND ON FACTS THE AFORESAID DECISION OF THE APEX COURT IN FACT SUPPORTS THE PRESENT CASE AS IT HAS ALREADY BEEN SEEN THAT THE ACTION OF THE APPELLANT IS OF CONSCIOUSLY AND DELIBERATELY FURNISHING INACCURATE PARTICULARS THEREBY CONCEALED THE INCOME KNOWING FUL LY WELL THAT THE LAND IN QUESTION WAS A CAPITAL ASSET U/S 2(14) THE PROFI T OF WHICH WAS TAXABLE. THE DECISION OF PUNJAB & HARYANA HIGH' COUR T IN THE CASE OF CIT VS RAJIV BHATARA RELIED UPON BY THE APPELLANT, T HE ASSESSEE IN THAT CASE HAD APPENDED THE COPY OF THE CHEQUE RECEIVED FR OM THE COLLECTOR AND THE CERTIFICATE OBTAINED FROM SUB DIVISIONAL ENG INEER, PWD, WHEREIN IT WAS SHOWN THAT THE DISTANCE OF THE VILLAGE IN WHICH THE LAND OF THE ASSESSEE WAS SITUATED 8.2 KMS FROM THE MUNICIPAL LI MIT OF SONEPAT MUNICIPAL, ALONG WITH THE RETURN ITSELF. IN THE PRESENT CASE THE APPELLANT HAS NOT FURNISHED ANY SUCH PARTICULARS SO AS TO CLAIM AND SUBSTANTIATE THAT THE LAND WAS BEYOND THE LIMITS OF 8 K MS FROM MUNICIPAL CORPORATION. IN FACT IN THE PRESENT CASE TH E LAND WAS SITUATED IN THE INDUSTRIAL ZONE OF MAAN AND THE CERTI FICATE FROM THE TOWN PLANNING AUTHORITY CLEARLY REVEALED THAT THE L AND WAS WITHIN 8 KMS LIMITS OF PCMC W.E.F. 11.09.1997 ITSELF. THUS, THE INTENTION OF THE APPELLANT OF CONSCIOUSLY CONCEALING THE INCOME BY FUR NISHING INACCURATE PARTICULARS BECOMES EVIDENT. THE ASSESSEE IN T HE AFORESAID CASE RELIED UPON BY THE APPELLANT HAD GIVEN THE BASIS ON WHICH THE INCOME HAD BEEN CLAIMED TO BE NON-TAXABLE A FACT WH ICH IS TOTALLY ABSENT IN THE PRESENT CASE OF THE APPELLANT. THE APPEL LANT IN THE PRESENT CASE HAD COMMITTED AN ERROR WHICH WAS NOT INAD VERTENT RATHER HAS INTENDED TO CONCEAL ITS INCOME BY FURNISHIN G INACCURATE PARTICULARS, WHICH THE APPELLANT KNEW IT TO BE FALSE . THE ASSESSING OFFICER IN THE PRESENT CASE HAD POSITIVE AND DEFINITE MATERIAL TO SHOW THAT THE SAID LAND WAS WITHIN THE 8 KMS LIMIT OF MUNIC IPALITY, A FACT WHICH WAS ABSENT IN THE CASE RELIED BY THE APPELLANT. HENCE, ON FACTS THE CASE RELIED UPON BY THE APPELLANT IS DISTINGUISHABL E. 3.5.3 IN A RECENT DECISION IN THE CASE OF CIT VS MANJU NATHA COTTON & GINNING FACTORY, ITA NO. 2564 OF 2005 ORDER DATED 1 3.12.2012 ALSO RELIED UPON BY THE APPELLANT, THE KARNATAKA HIGH CO URT HAS DEALT WITH VARIOUS PRINCIPLES GOVERNING PENALTY. IT HAS BEEN HELD THAT FOR THE APPLICABILITY OF SECTION 271(1)(C), CONDITIONS STIPULA TED THEREIN MUST EXIST AND THE FACTS AS BROUGHT OUT ABOVE CLEARLY SHOW T HAT THE CONDITIONS U/S 271(1)(C) EXIST AND HENCE THE LEVY OF P ENALTY IS JUSTIFIED. THE COURT WITH RESPECT TO THE SATISFACTION O F A.O. FOR INITIATION OF PENALTY PROCEEDINGS HAS HELD THAT THE P ROVISIONS OF SECTION 271(1)(C) MAKES IT ABUNDANTLY CLEAR THAT SATISF ACTION SHOULD BE THAT ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME O R FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND EVEN IN THE ABSENCE OF THOSE EXPRESSED WORDS OR FINDINGS RECORDED IN THE ASSESSMENT PROC EEDINGS, IF A DIRECTION IS MENTIONED, IT CONSTITUTES SATISFACTIO N OF THE ASSESSING OFFICER. THUS IN VIEW OF THE ABOVE, THE DECISION RE LIED UPON BY THE APPELLANT IS IN FACT FAVOUR OF THE REVENUE. 3.5.4 A FALSE CLAIM SHOULD CERTAINLY WARRANT PENALTY AS HELD IN CIT VS ESCORTS FINANCE LTD (2010) 328 ITR 44 (DEL). WHERE UN TENABLE CLAIM FOR SET OFF OF CARRIED FORWARD LOSS WAS MADE IN THE CASE OF A PARTNER, 10 SUCH A CLAIM COULD NOT BE ACCEPTED AS BONA FIDE, SO TH AT PENALTY IS EXIGIBLE - ACIT VS DINESH GOEL (2011)10 ITR (TRIB) 33 0 (DEL). 3.5.5 IN ACIT VS KANCHENJUNGA ADVERTISING (P) LTD (20 11) 10 ITR 649 (DEL), WHERE A CLAIM FOR BAD DEBT WAS FOUND TO H AVE BEEN WRONGLY MADE AND INFERABLE IN THE FACT OF THE CASE AS A DEVIC E ADOPTED TO MISLEAD THE ASSESSING OFFICER WITH RELEVANT FACT NOT DISC LOSED, PENALTY IS LEVIABLE. 3.6 IN VIEW OF THE ABOVE FACT AND CIRCUMSTANCES OF TH E CASE, THE MINIMUM PENALTY U/S 271(1)(C) OF THE ACT, @ 100% OF THE TAX SOUGHT TO BE EVADED LEVIED BY THE ASSESSING OFFICER FOR A.Y. 2 005-06 AT RS. 43,91,971/- AND FOR A.Y. 2006-07 AT RS. 21.39.266/- IS UPHELD AND THE GROUND OF APPEAL NO. 2 RAISED BY THE APPELLANT IS DISM ISSED FOR BOTH THE YEARS UNDER CONSIDERATION. 11. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS) - II, PUNE ERRED IN CONFIRMING THE PENALTY OF RS. 21,39,266/- LEVIED UND ER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 WITHOUT APPRE CIATING THE FACTS OF THE CASE AND LAW IN PROPER PERSPECTIVE. THE APPELL ANT HEREBY PRAYS THAT THE PENALTY LEVIED UNDER SECTION 271(1)(C) MAY PLEASE BE DELETED. 2. THE APPELLANT HEREBY RESERVES THE RIGHT TO ADD, AMEND, ALTER, DELETE, OR RAISE ANY ADDITIONAL GROUND/S ON OR BEFORE THE DATE OF HEARING. IDENTICAL GROUNDS HAVE BEEN TAKEN FOR A.Y. 2005-06. 12. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND IN A.Y. 2 006- 07 WHICH READS AS UNDER : 'THE LEARNED AO HAS LEVIED AND THE HONOURABLE CIT (A ) HAS CONFIRMED THE PENALTY UNDER SECTION 271(1)(C) AT RS. 21,39,266/ - CONSIDERING THE PROFIT ON TRANSFER OF LAND UNDER QUESTION AS 'PROFITS A ND GAINS OF BUSINESS'. THE ISSUE UNDER WHICH HEAD OF INCOME THE PROF IT SHOULD BE TAXED HAS REACHED FINALITY BY THE HONOURABLE ITAT'S O RDER DATED 31 ST JANUARY 2013 AND THE HONOURABLE ITAT HAS CONFIRMED T HAT THE INCOME UNDER CONSIDERATION IS TAXABLE AS 'CAPITAL GAIN'. THE APPELLANT, THEREFORE PRAYS THAT PENALTY UNDER SECTION 271(1)(C) MAY PLEASE BE REDUCED WITH REFERENCE TO THE CAPITAL GAIN ON TRANSF ER OF LAND UNDER CONSIDERATION INSTEAD OF PENALTY LEVIED WITH REFERENC E TO PROFITS AND GAINS OF THE BUSINESS' SIMILAR ADDITIONAL GROUND HAS BEEN TAKEN IN A.Y. 2005-06. 11 13. AFTER HEARING BOTH THE SIDES AND CONSIDERING THAT N O NEW FACTS ARE REQUIRED TO BE LOOKED INTO THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR BOTH THE YEARS IS ADMITTED FOR ADJUDICATION. 14. THE LD. COUNSEL FOR THE ASSESSEE WHILE ARGUING FOR BOT H THE YEARS STRONGLY CHALLENGED THE ORDER OF THE CIT(A). REFER RING TO PAGE 3 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE D REW THE ATTENTION OF THE BENCH TO THE NOTE GIVEN BELOW THE COMP UTATION OF TOTAL INCOME FOR A.Y. 2006-07 WHICH STATED THAT THE ASSE SSEE DURING THE YEAR HAS SOLD AGRICULTURAL LAND BEYOND 8 KMS FR OM THE LOCAL LIMITS OF MUNICIPALITY. PROFIT ON THE SAME BEING NON-TAXA BLE NOT INCLUDED IN THE COMPUTATION OF TOTAL INCOME. REFERRING TO PAGE 13 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENC H TO THE SIMILAR NOTING IN THE COMPUTATION STATEMENT FOR A.Y. 2006-07 . HE SUBMITTED THAT FULL DETAILS WERE THERE AND THE ASSESSEE H AS NOT CONCEALED ANY PARTICULARS OF HER INCOME. FURTHER, THE ASS ESSEE DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL HAS ALS O FILED CERTIFICATE FROM THE TALATHI WHICH STATES THAT THE LAND SOLD BY THE ASSESSEE IS AT A DISTANCE OF APPROXIMATELY MORE THAN 25 KMS FROM PMC AND IS APPROXIMATELY MORE THAN 9 KMS FROM PCMC. 14.1 REFERRING TO THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF RELIANCE PETROPRODUCTS LTD. REPORTED IN 322 ITR 158 HE SUBMITTED THAT THE HONBLE SUPREME COURT IN THE SAID DE CISION HAS HELD THAT MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING THE INACCURATE PARTICU LARS REGARDING THE INCOME OF THE ASSESSEE. HE ALSO RELIED ON T HE FOLLOWING DECISIONS AND SUBMITTED THAT UNDER SOMEWHAT SIMILAR CIRCUMSTANCES PENALTY HAS BEEN FINALLY DELETED : 1. CIT & ANOTHER VS. MANJUNATH COTTON FACTORY REPO RTED IN 359 ITR 111 (KAR.) 12 2. CIT VS. ESCORTS FINANCE LTD. REPORTED IN 328 ITR 44 (DELHI.) 3. CIT VS. RAJIV BHATARA REPORTED IN 360 ITR 121 (P&H) 4. ACIT VS. KANCHENJUNGA ADVERTISING PVT. LTD. REPORTED IN 51 SOT 125 (DELHI) (TRIBUNAL) 5. ACIT VS. DINESH GOEL REPORTED IN 52 SOT 132 (DELHI) (TRIBUNAL) HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) U PHOLDING THE PENALTY LEVIED BY THE AO SHOULD BE CANCELLED. 14.2 REFERRING TO THE ADDITIONAL GROUND FILED BY THE ASSESSE E HE SUBMITTED THAT SINCE THE TRIBUNAL HAS CATEGORICALLY GIVEN A FINDING THAT THE INCOME IS CAPITAL GAIN AND NOT BUSINESS INCOME, TH EREFORE, PENALTY, IF ANY, SHOULD BE RESTRICTED TO THE TAX SOUGHT TO BE EVADED ON THE AMOUNT OF CAPITAL GAIN AND NOT ON THE BUSINESS INC OME. SINCE THE TAX ON THE CAPITAL GAIN IS LESSER THAN THE TAX ON BUSINESS PROFIT, THEREFORE, SUITABLE DIRECTION MAY BE GIVEN FOR REDUCIN G THE PENALTY SO COMPUTED BY THE AO. 15. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT THE LAND IN QUESTION WAS WITHIN 8 KMS FROM THE PCMC. DESPITE T HE ADMISSION BY THE ASSESSEE BEFORE THE AO THAT IT WAS A M ISTAKE, THE ASSESSEE IS STILL TRYING TO JUSTIFY HER WRONG CLAIM BY PROD UCING CERTAIN DOCUMENTS TO SUBSTANTIATE THAT THE LAND SOLD IS BEYOND 8 KMS FROM THE MUNICIPAL LIMITS. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE TRIBUNAL HAS GIVEN A C ATEGORICAL FINDING THAT THE ASSESSEE WAS UNABLE TO DEMOLISH THE EVID ENCE GATHERED BY THE AO AGAINST HER. FURTHER, THE TRIBUNAL A FTER CONSIDERING THE CERTIFICATE ISSUED BY THE TALATHI HAS ALSO H ELD THAT THE SAME IS NOT SUPPORTED BY ANY PROPER MAP AND THE DISTANCE HAS 13 BEEN DETERMINED BY THE TALATHI ON THE BASIS OF LOCAL ENQUIR Y FOR WHICH THE TRIBUNAL HAS CATEGORICALLY HELD THAT THE SAME WILL BE OF NO HELP TO THE ASSESSEE. FURTHER, THE CIT(A) HAS ALREA DY DISTINGUISHED VARIOUS DECISIONS CITED BEFORE HIM AND WHICH AR E BEING RELIED ON BY THE LD. COUNSEL NOW. SINCE IT IS A CLEAR CASE OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULAR S OF INCOME, THEREFORE, THE PENALTY LEVIED BY THE AO AND UPHELD BY THE CIT(A) SHOULD BE CONFIRMED. THE LD. DEPARTMENTAL REPRESE NTATIVE HOWEVER SUBMITTED THAT THE PENALTY CAN BE REDUCED TRE ATING THE INCOME AS CAPITAL GAIN SINCE THE TRIBUNAL BEING THE FINAL FACT FINDING AUTHORITY HAS HELD THAT SUCH INCOME TO BE IN THE NATURE OF CAPITAL GAIN. 16. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE H AVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE ASSESSEE SOLD CERTAIN LAND AND TREATED THE SAME AS AGRICULTURAL LAND WHICH IS BEYOND 8 KMS FROM THE LOCAL LIMITS OF MUNICIPALITY AND TREATED SUCH INCOME AS NON TAXABLE BEING EXEMPT. WE FIND DURING THE COURSE OF ASSESSMENT PROCEE DINGS THE AO ON THE BASIS OF INFORMATION GATHERED BY HIM CONFRONTED THE SAME TO THE ASSESSEE TO WHICH THE ASSESSEE ADMITTED H ER MISTAKE VIDE LETTER DATED 16-12-2008 AND ACCEPTED THAT THE SA ID LAND IN QUESTION CANNOT BE TREATED AS AN AGRICULTURAL LAND EXEM PT FROM CAPITAL GAIN TAX. THE ASSESSEE ALSO ADMITTED THAT THE LA ND IN QUESTION IS WITHIN 8 KMS OF THE MUNICIPAL LIMITS. THE RELEVANT OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORD ER FOR A.Y. 2006-07 AT PARA 10 AND 11 ARE AS UNDER : 14 10. ON RECEIPT OF THE ABOVE REPLY FROM THE ASSESSEE T HIS OFFICE HAS MADE THE ENQUIRIES FROM THE OFFICE OF TOWN PLANNING & VALUATION DEPARTMENT PUNE BRANCH PUNE AND THE ASSTT. DIRECTOR O F TOWN PLANNING VIDE HIS OFFICE LETTER NO. MOUJE MANN/ TAL. MULSHI/ S.NO. 277 NO. 1,2,&3 / ADTP/5513/ DATED 8.12.2008 HAS CLARIFIE D THAT 1) THE LAND UNDER TRANSACTION IS SITUATED WITHIN 8 K.M . FROM THE EXTEND LIMIT OF PIMPRI - - CHINCHWAD MUNICIPAL CORP ORATION WITH EFFECT FROM THE DATE 11.09.1997. 2) AS PER THE MODIFICATION UNDER SECTION 20 OF MAHARSH TRA REGIONAL & TOWN PLANNING ACT 1966 IN THE SANCTIONED REGIONAL PL AN OF PUNE DISTRICT UNDER NOTIFICATION DATED 23.6.2002 LAND IS I NCLUDED IN INDUSTRIAL ZONE. THE ABOVE FACTS WERE COMMUNICATED TO THE ASSESSEE VIDE T HIS OFFICE LETTER DATED 08.12.2008 AND HIS ATTENTION WAS DRAWN T O THE FACT THAT THE EXPLANATION OFFERED BY HIM IN THE LETTER DATED 28.11.2008 HAS BECOME REDUNDANT IN VIEW OF THE CLARIFICATION FROM THE ABOVE AUTHORITY AND THE LAND IS CLEARLY SITUATED IN MUNICIP AL CORPORATION AND IT CANNOT BE AGRICULTURAL LAND IN VIEW OF THE PROVI SIONS OF SEC. 2(14)(III)(B) OF THE ACT. THE ASSESSEE WAS THEREFORE GIV EN AN OPPORTUNITY TO EXPLAIN AS TO WHY THE INCOME EARNED O N SALE OF LAND SHOULD NOT BE TAXED ACCORDINGLY. 11. THE ASSESSEE VIDE LETTER DATE 16.12.2008 HAS ADMITT ED MISTAKE IN CONSIDERING THE LAND AS AGRICULTURAL LAND AS A CAPI TAL ASSET. IT IS SUBMITTED IN THE LETTER THAT IT WAS A CASE OF BONA FID E MISTAKE AND NOT A DELIBERATE MISTAKE IN ORDER TO EVADE ANY TAXES. IN F ACT IN COMPUTATION OF INCOME, NOTE REGARDING CLAIM OF EXEMPTION WAS ALSO MENTIONED WHILE FILING THE RETURN. DISTANCE FROM PCMC LIMIT RE MAINED UNNOTED OVER SIGHT. ACCORDINGLY CLAIM FOR EXEMPTION OF CAPIT AL GAIN WAS MADE BY MISTAKE WITHOUT ANY INTENTION OR DESIRE TO HIDE OR CONCEAL THE INCOME SO AS TO AVOID THE IMPOSITION OF TAX THEREON. THE ABOVE FINDING GIVEN BY THE ASSESSING OFFICER COULD NOT B E CONTROVERTED BY THE LD. COUNSEL FOR THE ASSESSEE. THE REFORE, THE FACT REMAINS THAT THE LAND IN QUESTION IS NOT AN AGRICULTU RAL LAND. AS REGARDS THE OTHER ISSUE, I.E. THE DISTANCE OF THE LAND FR OM THE PCMC IS CONCERNED, WE FIND THE TRIBUNAL HAS ALREADY GIVEN A CATEGORICAL FINDING THAT THE LAND IN QUESTION IS WITHIN 8 KMS FROM THE PCMC AS PER THE CERTIFICATE GIVEN BY THE ASST. DIRECT OR OF TOWN PLANNING. THE ABOVE CERTIFICATE ALSO REMAINS UNCHALLENGED. T HE CERTIFICATE PRODUCED BY THE ASSESSEE FROM THE TALATHI WAS ALSO CONSIDERED BY THE TRIBUNAL AND WAS REJECTED ON THE GRO UND THAT IT IS GENERAL IN NATURE AND THE CERTIFICATE ISSUED ON THE BAS IS OF LOCAL ENQUIRY IS NOT SUPPORTED BY ANY PROPER MAP. THE TRIBUN AL HAS 15 FURTHER HELD THAT DISTANCE CANNOT BE DETERMINED ON THE BASIS OF LOCAL ENQUIRIES AS MENTIONED BY THE KAMGAR TALATHI IN HIS CERTIFICATE. THUS, THE LAND IN QUESTION IS NEITHER AGRICULTURA L LAND NOR SITUATED BEYOND A DISTANCE OF 8 KMS OR MORE FROM TH E MUNICIPAL AREA, I.E. PCMC HEREIN QUESTION. UNDER THESE CIRCUMSTANCES THE QUESTION THAT ARISES IS AS TO WHETHER PENALTY CAN BE LEVIED U/S.271(1)(C) OF THE I.T. ACT. 16.1 WE FIND FROM THE VARIOUS DETAILS FURNISHED BY THE ASSES SEE IN THE PAPER BOOK AS WELL AS THE SUBMISSIONS MADE BEFORE TH E AO, CIT(A) AND THE TRIBUNAL THAT THE ASSESSEE HAS CONSCIOUSL Y AND DELIBERATELY CONCEALED HER PARTICULARS OF INCOME AND FURNISH ED INACCURATE PARTICULARS OF INCOME ARISING OUT OF THE SALE OF LAND. EVEN THE TRIBUNAL IN ITS ORDER HAS ALSO MENTIONED THAT T HE ASSESSEE HAS TAKEN CONTRADICTORY STAND BEFORE THE AO AND THE CIT(A) ON THIS PARTICULAR ASPECT. IN OUR OPINION, IT IS A CLEAR CASE OF CONCEALMENT OF INCOME AND A DELIBERATE ACT OF OMISSION ON T HE PART OF THE ASSESSEE IN FILING THE INACCURATE PARTICULARS OF INCOM E. THE NOTE GIVEN BY THE ASSESSEE IN HER COMPUTATION STATEMEN T WILL NOT ABSOLVE THE ASSESSEE FROM THE MISCHIEF OF PENALTY U/S.271( 1)(C) OF THE I.T. ACT SINCE IT WAS VERY MUCH KNOWN TO THE ASSES SEE THAT THE LAND IN QUESTION WAS NEITHER AGRICULTURAL LAND NOR SITUATED BEYOND A DISTANCE OF 8 KMS FROM THE MUNICIPAL LIMITS. THEREFORE, THE VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASS ESSEE WILL NOT BE OF ANY HELP TO THE ASSESSEE. HAD IT BEEN A BON AFIDE MISTAKE OR BONAFIDE OMISSION OR COMMISSION, THE DECISIONS WOULD HAVE BEEN APPLICABLE BUT WHEN THE PARTICULARS GIVEN BY THE AS SESSEE CONSCIOUSLY TO DEFRAUD THE REVENUE BY NOT PAYING THE LE GITIMATE TAX DUE, THE DECISIONS WILL NOT COME TO THE HELP OF THE ASSESSE E. UNDER THESE CIRCUMSTANCES AND IN VIEW OF THE DETAILED REASONING GIVEN BY 16 THE CIT(A) UPHOLDING THE LEVY OF PENALTY WE DO NOT FIND ANY INFIRMITY IN THE SAME. ACCORDINGLY, THE ORDER OF THE CIT(A) IS UPHELD SO FAR AS THE LEVY OF PENALTY IS CONCERNED. 17. HOWEVER, COMING TO THE QUANTUM OF PENALTY TO BE LEVIE D, IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT S INCE THE PROFIT HAS BEEN HELD BY THE TRIBUNAL TO BE OF LONG TERM C APITAL GAIN AND NOT BUSINESS INCOME, THEREFORE, THE PENALTY SHOULD BE RESTRICTED TO THE QUANTUM OF TAX SOUGHT TO BE EVADED. WE FIND MERIT IN THE ABOVE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. SINCE THE TAX ON LONG TERM CAPITAL GAIN IS LOWER THAN THE TAX ON THE BUSINESS INCOME, THEREFORE, THE PENALTY SHOULD BE RESTRICTE D TO THE TAX SOUGHT TO BE EVADED WHICH IN THE INSTANT CASE WILL B E THE TAX SOUGHT TO BE EVADED ON THE CAPITAL GAIN AND NOT ON BUS INESS INCOME. SINCE THE TRIBUNAL HAS ALREADY HELD THAT THE INCOM E IN QUESTION IS LONG TERM CAPITAL GAIN, THEREFORE, THE TAX SOUGH T TO BE EVADED IS ON THE LONG TERM CAPITAL GAIN WHICH IS LOWER THAN THE TAX COMPUTED BY THE AO ON THE BUSINESS INCOME. WE THEREFO RE DIRECT THE AO TO RECOMPUTE THE PENALTY TREATING THE INCOME AS LONG TERM CAPITAL GAIN WHICH HAS ATTAINED FINALITY AFTER THE ORDER OF T HE TRIBUNAL. WE HOLD AND DIRECT ACCORDINGLY. THE ADDITIONAL G ROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED WHEREAS TH E OTHER GROUNDS ARE DISMISSED. ITA NO.173/PN/2014 (A.Y. 2005-06) : 18. THE FACTS IN THE IMPUGNED APPEAL ARE IDENTICAL TO THE FACTS IN ITA NO.174/PN/2014 FOR A.Y. 2006-07. WE HAVE ALREADY UP HELD THE ORDER OF THE CIT(A) CONFIRMING THE LEVY OF PENALTY U/S.2 71(1)(C) OF THE I.T. ACT. HOWEVER, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS BEEN ACCEPTED AND THE AO HAS BEEN DIREC TED TO RECOMPUTE THE PENALTY TREATING THE INCOME ON WHICH PENA LTY HAS 17 BEEN LEVIED AS CAPITAL GAIN AS AGAINST BUSINESS INCOME HELD BY THE AO. FOLLOWING THE SAME REASONINGS, THE ADDITIONAL GROUND RA ISED BY THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR IS ALS O ALLOWED AND THE OTHER GROUNDS ARE REJECTED. 19. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30-06-2015. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE DATED: 30 TH JUNE, 2015 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-II, PUNE 4. CIT-II, PUNE 5. THE D.R, B PUNE BENCH 6. 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