Tribunal overturns penalty for inaccurate income particulars

The Tribunal allowed the appeal, concluding that the penalty imposed under section 271(1)(c) for furnishing inaccurate particulars of income was unjustified. The Tribunal found that while section 50C was correctly applied for capital gain computation, there was no evidence of income concealment or inaccurate particulars by the assessee. The full disclosure of relevant documents during assessment supported the lack of inaccurate particulars, leading to the deletion of the penalty.

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Issues:
Penalty under section 271(1)(c) for furnishing inaccurate particulars of income.

Analysis:
The appeal was against the penalty imposed under section 271(1)(c) for the assessment year 2008-2009. The assessee, a non-resident Indian, declared income including short term capital gain from the sale of shares and immovable property in Hyderabad. The assessing officer (A.O.) computed capital gain invoking section 50C due to variance in sale consideration declared and stamp duty valuation. The CIT(A) and ITAT upheld this computation. The A.O. then imposed a penalty for furnishing inaccurate particulars of income, which was confirmed by the CIT(A).

The assessee contended that there was no conclusive evidence of receiving additional amounts beyond the sale deed consideration. The deeming provision of section 50C should not dictate penalty imposition. The assessee provided all relevant documents during assessment, arguing against inaccurate particulars. The Department argued that the assessee knowingly undervalued the property for capital gain computation, justifying the penalty due to upheld section 50C application by ITAT.

The Tribunal observed that while section 50C was appropriately applied for capital gain computation, it did not prove inaccurate particulars or income concealment by the assessee. Positive evidence of receiving the SRO valuation amount was crucial for penalty imposition. The assessee's full disclosure during assessment supported the lack of inaccurate particulars. Referring to precedent judgments, the Tribunal concluded that penalty under section 271(1)(c) was unjustified in this case, deleting the penalty.

In conclusion, the Tribunal allowed the assessee's appeal and pronounced the order on 04.09.2015.

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