2011 (4) TMI 1414 - AT - Income Tax

Appeal success: Penalty under I.T. Act canceled for 2005-2006 assessment year

The appeal against the penalty imposed under section 271(1)(c) of the I.T. Act, 1961 for the assessment year 2005-2006 was allowed. The Tribunal held that ... - Issues involved: Appeal against penalty u/s 271(1)(c) of the I.T. Act, 1961 for assessment year 2005-2006.Summary:The appeal was filed against the penalty imposed under section 271(1)(c) of the I.T. Act, 1961. The Assessing Officer had made an addition of &8377; 3,60,518/- as long term capital gain u/s 50C. Subsequently, a penalty of &8377; 73,546/- was levied. The Commissioner of Income Tax(Appeals) directed the re-computation of the penalty at 100% of Tax sought to be evaded on income determined u/s 154. The assessee contended that no penalty can be imposed for not showing deemed income. The Revenue supported the penalty. The Tribunal noted that there was no finding that the assessee received more than the consideration in the sale deed. The Tribunal referred to a similar case where the penalty was canceled as the valuation by Stamp Valuation Authorities was not binding on the assessee. The Tribunal held that the penalty was not leviable under the main provision or explanation-1 to section 271(1)(c) and canceled the penalty on the confirmed income of &8377; 1,80,259/-.In conclusion, the appeal filed by the Assessee against the penalty u/s 271(1)(c) for the assessment year 2005-2006 was allowed.