SHRI VIKASH R.PATEL,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-6(5), AHMEDABAD

ITSSA 79/AHD/2016Status: DisposedITAT Ahmedabad18 March 2025AY 2008-096 pages
AI SummaryPartly Allowed

What were the facts?

The assessee, Shri Vikas R. Patel, is appealing an order dated December 14, 2015, by the Commissioner of Income Tax (Appeals)-4, Ahmedabad, which confirmed a penalty under Section 271(1)(c) of the Income Tax Act, 1961, for Assessment Year 2008-09. The assessee was a partner in M/s. Uma Shakti Corporation. The firm purchased land for Rs. 2.5 crores, with Rs. 1.63 crores paid as unaccounted collection before the firm's formation on October 20, 2007. Protective additions were made to three partners, including the assessee. The CIT(A) granted relief of Rs. 20,00,000, considering it paid by cheque from the firm's regular income, leaving Rs. 1,43,00,000 as paid by erstwhile partners. This resulted in a confirmed addition of Rs. 47,66,666. Subsequently, the Assessing Officer levied a penalty of Rs. 16,25,970 for concealed income.

What did the Tribunal hold?

The Tribunal, referring to a Co-ordinate Bench decision in the case of the Partnership Firm and other partners (M.A. No. 10/AHD/2022 arising out of IT(SS)A No. 196/AHD/2013 and Others dated 24-07-2024), noted that a sum of Rs. 41,00,000, which was taxable in AY 2007-08, was erroneously included in the present AY 2008-09. The Co-ordinate Bench had recalled its earlier order and directed the deletion of this Rs. 41 lakhs addition. However, the Co-ordinate Bench upheld the additions made in the hands of the three partners (including the assessee) because the assessee's own submission dated 23.12.2011 indicated that these three were the main partners who utilized funds from projects for land purchase payments. The Tribunal confirmed the protective addition made in the assessee's hands based on this finding. Consequently, the Assessing Officer was directed to revise the penalty order under Section 275(1A) of the Act, providing the assessee with a proper opportunity of hearing. The appeal was partly allowed for statistical purposes.

What were the issues?

1. Whether the Learned CIT(A) erred in confirming the penalty under Section 271(1)(c) of the Income Tax Act, 1961, for Rs. 16,25,970, given that the assessee was not a party to the transaction for the on-money paid as per the Memorandum of Outstanding dated 03-04-2007. Assessee's Contention: The assessee argued that they were not a party to the transaction for the on-money paid as per the Memorandum of Outstanding dated 03-04-2007, and therefore, no protective addition or penalty under Section 271(1)(c) should be levied in their hands. Revenue's Contention: The judgment does not record specific arguments from the Revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 275(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH

Before: Shri T.R. Senthil Kumar & Shri Makarand Vasant Mahadeokar

PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against the appellate order dated 14.12.2015 passed by the Commissioner of Income Tax (Appeals)-4, Ahmedabad confirming the levy of Penalty under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2008-09. I.T(SS)A No. 79/Ahd/2016 A.Y. 2008-09 Page No 2

2.

Brief facts of the case is that the assessee was a partner in M/s. Uma Shakti Corporation. The firm purchased a land bearing Survey No. 217/1 & 217/2 at Chandlodiya for a consideration of Rs.

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 271(1)(c)

All 24,918 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →