Concealment penalty on deemed property valuation addition deleted where no actual suppression and explanation remained unrebutted.

Penalty under section 271(1)(c) was held unsustainable where the addition arose only from section 56(2)(x) on the difference between stated purchase price and stamp duty value. The assessee offered a plausible explanation that the property had low utility and could not fetch jantri value, and the Revenue did not disprove that explanation, show it was not bona fide, or conduct effective verification to establish concealment. As there was no finding of actual payment over and above the recorded consideration, the deeming addition alone did not justify concealment penalty. The penalty was deleted and the appeal succeeded.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable where the addition arose from section 56(2)(x) of the Income-tax Act, 1961 on account of difference between purchase price and stamp duty value of property.

Analysis: The addition was made on a deeming basis under section 56(2)(x) and there was no finding that the assessee had actually paid any amount over and above the stated consideration. The assessee had given an explanation that the property was of low utility and could not fetch the jantri value, and the Revenue neither found that explanation false nor established that it was not bona fide. No effective inquiry or verification was undertaken to rebut the explanation, and the surrender was made to buy peace of mind without admitting concealment in substance.

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

Final Conclusion: The appeal succeeded and the penalty imposed on the deemed addition was set aside.

Ratio Decidendi: Penalty for concealment or furnishing inaccurate particulars cannot be sustained where the addition rests only on a deeming provision, the assessee offers a plausible explanation, and the Revenue fails to disprove bona fides or establish actual suppression of income.

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