No Penalty If Assessee Discloses Transaction of Sale of Agricultural Land in the hands of assessee’s HUF as the Property was Ancestral: ITAT [Read Order]

Indore bench of Income Tax Appellate Tribunal (ITAT) deleted the penalty imposed by the Assessing Officer (AO) by considering the fact that the assessee conceded the transaction of Sale of Agricultural Land in the hands of his Hindu Undivided Family (HUF).

Assessee in the instant case is an individual duly filed his return of income and declared total income at Rs.2,52,000 and agricultural income at Rs.85,000.

Thereafter, the AO reopened the assessment on the basis of getting an information regarding a sale of land at Rs.2,90,80,000 as against sale consideration shown at Rs.1,83,20,000. By holding this information the AO recomputed long term capital gain at Rs.96,93,340 and simultaneously penalty proceedings initiated under section  271(1)(c) of the Income Tax Act 1961 with the view that the assessee has tried to conceal the above mentioned income.

On appeal CIT(A) granted relief to the assessee by deleting the penalty imposed by the AO.

Revenue was on appeal before the Tribunal against the order pronounced by the CIT(A).

Before the bench assessee contended that the transaction of sale of land has been shown by him in the return of income through Hindu Undivided Family (HUF) and all necessary details have been submitted therein.

After hearing submissions of both sides the tribunal bench comprising Judicial Member Kul Bharat and Accountant Member Manish Borad upheld the order of the CIT (A). The bench observed that the assessee has filed all the details of the aforesaid transaction of sale of agriculture land which have been shown in the income tax return filed by the assessee in the capacity of his HUF. Hence it cannot be presumed that the assessee concealed particulars of income or furnished inaccurate particulars of income because the assessee has shown transaction of sale of agriculture land in the hands of assessee’s HUF as a hereditary property. Hence there is no significance to impose penalty under section 271(1)(c) of the act, consequently the division bench upheld the decision of the CIT(A) to delete the penalty imposed by the AO.