INCOME TAX ACT, 1961

Section 276C

Prosecution - Unsecured loan towards sale of land and unsecured loan - Assessee had already deposited a sustained part of demand raised -

Assessee's case was taken for scrutiny assessment and order was passed under section 143(3), taxable income of assessee was determined which comprised of income from sale of land due to disallowance of additional cost, unsecured loan/advance taxed as an income from the sale of property and unexplained cash credit. CIT(A) partly allowed the appeal of assessee whereby the additions made as an unsecured loan towards the sale of land and unsecured loan partly came to be deleted. However, appeal was pending adjudication before the ITAT. Held: It was found on merit that there was no contravention of the provisions of Act in the adjudication proceeding, the trial of the person concerned shall be an abuse of the process of the Court. Demand raised by Department was not crystallized as the appeal preferred by assessee was pending adjudication on merits. Since assessee has already deposited a substantial part of demand raised by Department, the High Court was of the opinion that continuation of prosecution against assessee for the same allegations could not be permitted. Prosecution initiated against assessee by way of Criminal Case pending with the Court for the offence punishable under section 276C(2) shall remain stayed until the final judgment is delivered by the ITAT.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

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