Full News
ITAT confirmed penalty as there was desire to avoid tax
ITAT confirmed penalty as there was desire to avoid tax
Assessee received 1/4th share of a property through a will of an HUF and entered into a development agreement for construction of a commercial complex. Assessee filed return of income claiming status of HUF. AO held that property became individual and not HUF property, and made addition and imposed penlaty. CIT(A) deleted both. ITAT confirmed the penalty.-500287
1. Assessee received 1/4th share of a property through a will of an HUF and entered into a development agreement on 4-10-97 for construction of a commercial complex.
2. The entire cost of construction was to be borne by developers.
3. Assessee treated the date of agreement as date of conversion of capital asset into stock in trade.
4. Assessee filed return of income claiming status of HUF.
5. AO issued notice u/s 143(2) (of Income Tax Act, 1961) and held that consequent to partition of HUF the property became individual and not HUF property.
6. AO initiated proceedings u/s 148 (of Income Tax Act, 1961).
7. AO made addition.
8. CIT(A) deleted the addition.
9. AO subsequently initiated penalty proceedings u/s 271(1)(c) (of Income Tax Act, 1961).
10. CIT(A) deleted the penalty.
On appeal, the ITAT held as under:
11. As per settled canons of Hindu Law, HUF having been completely partitioned the share of property became individual property of the assessee by operation of law.
12. Tax advantages derived by the assessee have not been denied.
13. Besides assessee has failed to demonstrate that it was a convincible mistake.
14. Looking at the facts it appears to be an attempt to avoid tax.
15. In our considered view following the guiding light of this case the assessee's potential wrong claim driven by a desire of avoiding taxes deserves imposition of penalty u/s 271(1)(c) (of Income Tax Act, 1961), which is confirmed.
Case Reference - Income Tax Officer, vs Praveen Chand Sanghi.
IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YADAV, AM
ITA No. 70/JP/2013
(Assessment Years : 2005-06)
×
