Section 50C valuation adjustment alone cannot sustain concealment penalty without proof of higher sale consideration.

Penalty under section 271(1)(c) was deleted where capital gains were recomputed by applying section 50C, but the assessee had disclosed the sale consideration stated in the registered sale deed and no material showed receipt of any higher amount. The ITAT held that a section 50C deeming adjustment for computation purposes does not, by itself, establish concealment or furnishing of inaccurate particulars. In the absence of factual evidence that the return was false or incomplete, the penalty provision was not attracted, and the penalty addition did not survive.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where capital gains were recomputed by applying section 50C without any material showing receipt of higher consideration than the sale deed value.

Analysis: The assessee had disclosed the sale consideration stated in the registered sale deed, and no evidence was brought on record to show that any amount over and above that consideration had actually been received. A mere substitution of value under section 50C, even through reference to the Valuation Officer, does not by itself establish concealment or furnishing of inaccurate particulars. Penalty under section 271(1)(c) requires a factual foundation showing that the return contained incorrect particulars or that income was concealed; absent such material, the deeming exercise for capital gains computation cannot automatically sustain penalty.

Conclusion: Penalty under section 271(1)(c) was not attracted and was deleted.

Final Conclusion: The appeal was allowed and the penalty addition did not survive.

Ratio Decidendi: In the absence of evidence that the assessee received more consideration than that disclosed in the registered sale deed, application of section 50C for capital gains computation does not, by itself, justify penalty for concealment or furnishing inaccurate particulars under section 271(1)(c).

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