ITAT confirmed deletion of penalty

1. A search was conducted at Nector Life Science Ltd’s premises.

2. It surrendered Rs.15 crores as undisclosed income over and above the regular income u/s 132(4) (of Income Tax Act, 1961).

3. Further, it made a disclosure in a letter of income of Rs 12.5 crores derived from real estate transactions.

4. In the return filed in pursuance to notice u/s 153A (of Income Tax Act, 1961), assessee disclosed surrendered amount in its return and paid due taxes.

5. AO initiated penalty proceedings u/s 271AAA (of Income Tax Act, 1961), and imposed penalty of Rs 1.25 crores.

6. CIT(A) deleted the penalty.

On appeal, the ITAT held as under:

7. The only reason for which the Assessing Officer imposed penalty u/s 271AAA (of Income Tax Act, 1961) was that by merely stating that the undisclosed income has arisen from real estate transactions, is not good enough and the assessee has not been able to substantiate its stand by giving full details as to the names & addresses of the sellers, names & addresses of the properties and the evidences as regard to the cheque transactions, etc.

8. The present case is on better footing in the sense that the manner was disclosed by the assessee while the only contention of the Assessing Officer was that it has not substantiated the manner.

9. Therefore, we do not find any infirmity in the order of the learned CIT (Appeals) while deleting the penalty u/s 271AAA (of Income Tax Act, 1961) levied by the Assessing Officer.

Case Reference - The D.C.I.T., Vs. M/s Nector Life Science Ltd.

 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH

BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER

AND MS. RANO JAIN, ACCOUNTANT MEMBER

ITA No.107/Chd/2015

(Assessment Year : 2011-12)