Amount received over and above registered sale deed will be taxed under IOS ? and whether sec 271(1) (c) also applicable?

ACIT vs. Mohinder Singh (ITAT Chandigarh)- 23 Jan 2018

Some of the major discussions/ pointers for easy reference:

1- During the assessment proceedings in the case of Shri Mohinder Singh, the AO concluded that in the registered sale deeds the sale proceeds were mentioned at Rs. 42,37,500/- and the AO treated the same as capital gain. The rest of amount of Rs 2,03,92,500/- was considered as unexplained cash for which the assessee had failed to offer satisfactory explanation and he accordingly added the same into the income of the assessee u/s 69A of the Act.

2- That the land sold by Shri Mohinder Singh was rural agricultural land and that the amount recovered from him was on account of consideration for the sale of land and, hence, no addition was warranted in the hands of Shri Mohinder Singh. He in this respect has relied upon the decisions of the Hon’ble Allahabad High Court in the case of ‘CIT vs Intezar Ali’ vide order dt 26.7.2013 in ITA No. 162 of 2013

3- we have held that the amount received by the assessee Mohinder Singh, over and above the sale consideration mentioned in the sale deed, is liable to be assessed as income from other sources; however, we are of the view that this is not a fit case for levy of penalty u/s 271(1)(c) of the Act. The assessee had disclosed the source of income being the amount received from Sh. Malkiat Singh on account of sale of his land. The assessee was under bona-fide belief that since the entire amount received by him was on account of consideration for the sale of land, the land being an agriculture rural land falling outside the purview of the definition of a capital asset, the income from the sale of land was exempt from taxation, hence, non-offering of the said income for taxation cannot be said to be a deliberate act on the part of assessee Mohinder Singh of furnishing of inaccurate particulars of income or concealment of income.

For reading full text of the case please refer link - http://itatonline.org/archives/acit-vs-mohinder-singh-itat-chandigarh-an-assessee-who-understates-the-consideration-received-for-sale-of-agricultural-land-to-avoid-payment-of-stamp-duty-is-defrauding-the-exchequer-he-cannot-take-a/mohinder-singh-agricultural-land-capital-gains/