Section 271B of Income Tax Act, 1961— Penalty u/s 271B— In the instant case, the assessee has received advance of Rs. 2,90,40,600/- on account of selling of immovable property. According to the assessee, the amount received by her is capital gains and accordingly she filed her return of income, however, the Assessing Officer is not accepted the explanation of the assessee on the ground that she had purchased the land which is in litigation, it is adventure in the nature of trade. Accordingly, he treated the transaction as business transaction and raised a tax demand of Rs. 72,46,989/- and subsequently imposed penalty of Rs. 1.00 lakh u/sec. 271B for non-auditing the books of accounts as per section 44AB of the Act.

Held that— It is a fact that the assessee had entered into only a single transaction. It is also a fact that she has bonafide belief that the transaction entered into by her leads to capital gains and not business transaction. It is also a fact that during the year under consideration, the assessee entered into a single transaction though the amounts received by her attracts the provisions of section 44AB. Under these facts and circumstances of the case, we are of the opinion that the explanation given by the assessee is bonafide and also justified, no penalty can be levied u/sec. 271B of the Act.[SMT. S. CHINATALLI VERSUS ITO, WARD-1, PALAKOL.][2019] 16 ITCD Online (6) [ITAT VISAKHAPATNAM]