B. ALIM BUILDERS,MUMBAI vs. ITO 12(3)(4), MUMBAI

O R D E R

PER AMARJIT SINGH, JM:

3. The brief facts of the case are that the assessee filed its return of income on 12.10.2007 declaring the total income to the tune of Rs.Nil. The return was filed beyond the time limit for filing of return and accordingly was ab-initio void. During the course of assessment proceedings in the case of A.Y. 2006-07, it was seen that the firm was totally different from the earlier firm & the partners were entirely different and there was revaluation of property held by the assessee which was taken over by Shri K.K. Motwani & Shri D.K. Motwani who obtained the property by taking over the firm and continuing with the same name i.e. B. Alim Builders. The said transfer had taken place during F.Y. 2004-05 relevant to A.Y. 2005-06. Thereafter, the assessment proceeding u/s 147/148 was initiated and statutory notices u/s 143(2) and 142(1) of the Act were issued and served upon the assessee. The assessee was a builder. There was no activity except for transfer of the revalued asset and other assets and liabilities to another concern by the same name constituted in June, 2004. The long term capital gain on the transfer assets was assessed to the tune of Rs.3,25,12,443/- and accordingly, the penalty was initiated. The assessee also received the advances in lieu of sale of the property to the tune of Rs.22,40,000/-. However, after the non-utilization of the fund, the same was returned but an amount of Rs.3,00,000/- was found in the account of the assessee and the penalty was also initiated u/s 271(1)(c) of the Act. After the issuance of the penalty notice, the penalty to the tune of Rs.67,98,350/- was imposed on the basis of assessed long term capital gain to the tune of Rs.3,25,12,443/-.