RISHI PRAKASH,NEW DELHI vs. ACIT, CIRCLE-28(1), NEW DELHI

When the appeal was called for hearing none appeared for the assessee.

Considering the nature of dispute, we proceed to dispose of the appeal ex-parte qua the assessee after hearing learned Departmental Representative and based on materials on record.

Briefly the facts are, the resident assessee, since deceased, was an individual. For the assessment year under dispute, assessee had filed his return of income on 31.07.2009 declaring income of Rs.50,14,402/-. As it appears from the discussion made by the Assessing Officer in the assessment order, in course of assessment proceedings assessee filed a revised computation of income enhancing the taxable income to Rs.56,83,721/-. The enhanced income declared was due to the difference in interest income, short term capital gain and non-inclusion of long term capital gain on sale of land. In course of proceeding, the Assessing Officer called upon the assessee to furnish circle rate for determining the long term capital gain. In compliance, the assessee furnished the circle rate of the land sold before the Assessing Officer. As stated by the Assessing Officer, assessee came forward to offer long term capital gain based on the circle rate. Thus, ultimately, the Assessing Officer added an amount of Rs.27,46,957/- as long term capital gain on sale of land. Since, the assessee had initially offered long term capital gain of Rs.5,25,082/-, the Assessing Officer initiated proceeding for imposition of penalty under section 271(1)(c) of the Act alleging furnishing inaccurate particulars of income/concealment of income and ultimately passed an order on 28.03.2016 imposing penalty of Rs.6,49,203/-. Though, the assessee filed an appeal before learned Commissioner (Appeals) challenging the imposition of penalty, however, he was unsuccessful.

We have heard learned Departmental Representative and perused the materials on record. As could be seen from the facts on record, in the year under consideration, the assessee derived long term capital gain on sale of land and offered the same for taxation. In course of assessment proceeding, on the direction of the Assessing Officer, the assessee furnished circle rate of the land on the date of sale, based on which, long term capital gain was computed and as it appears, the assessee also agreed to the same.

Undisputedly, on the long term capital gain so computed, which was higher than the long term capital gain initially offered by the assessee, the Assessing Officer not only initiated proceeding for imposition of penalty under section 271(1)(c) of the Act but ultimately passed an order imposing penalty. The issue which arises for consideration is, whether based on notional addition of long term capital gain relying upon circle rate, penalty under section 271(1)(c) of the Act can be imposed. It is a fact on record that not only the assessee has furnished all the details relating to the land sold but has also offered the long term capital gain based on the sale consideration received. In fact, the assessee himself has produced the circle rate of the land on the date of sale. Therefore, the assessee cannot be accused of furnishing inaccurate particulars of income. Further, there is no cogent material on record to demonstrate that the assessee had received anything in excess over the declared sale consideration.

In the result, the appeal is allowed.