Penalty for concealment not sustainable when revised disclosure preceded detection and deemed capital gain alone did not prove intent.

Penalty under section 271(1)(c) was not justified where the assessee filed a revised computation and paid tax before the Revenue detected the additions, and the disclosed particulars were already reflected in the books. The deemed capital gain adjustment under section 45(3) did not, by itself, establish concealment or furnishing of inaccurate particulars. On the facts, the Revenue failed to show any deliberate suppression of income or dishonest intent, so the penalty was deleted in favour of the assessee.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable for alleged concealment / furnishing of inaccurate particulars in respect of capital gain computed on a deemed basis under section 45(3) and disallowance of interest expenditure.

Analysis: The assessee had filed a revised computation and paid tax before the Revenue detected the additions in the assessment proceedings. The disclosed particulars were already reflected in the books and the surrounding facts did not show any dishonest intent to suppress income. The addition relating to capital gain arose on a deemed basis under section 45(3), and such a deemed addition does not by itself automatically justify penalty under section 271(1)(c). On these facts, the Revenue failed to establish deliberate concealment or furnishing of inaccurate particulars.

Conclusion: Penalty under section 271(1)(c) was not sustainable and was directed to be deleted, in favour of the assessee.

Ratio Decidendi: Penalty for concealment or inaccurate particulars cannot be imposed where the assessee voluntarily and before detection discloses the income and pays the tax, and a deemed addition does not by itself establish concealment.

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