Concealment penalty cannot rest on higher market valuation alone without evidence of undisclosed sale consideration.

Penalty under section 271(1)(c) is not attracted merely because the declared sale consideration for property is substituted with a higher market value for capital gains assessment. Where the assessee disclosed the sale in the return and accepted that any taxable capital gain could be assessed, concealment or furnishing of inaccurate particulars is not established unless there is evidence that extra consideration actually passed between the parties. On these facts, the absence of material showing suppression of income or receipt of additional sale proceeds meant the penalty was not exigible and stood deleted.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was sustainable where the assessee had disclosed the sale of property and the declared consideration, but the assessment of capital gains was enhanced on the basis of a higher market value.

Analysis: The assessee had disclosed the sale of the property in the return and had stated that any capital gain found chargeable could be assessed. The Department relied on a valuation report to substitute a higher market value and to sustain the capital gains addition, but no material was produced to show that any amount over and above the declared consideration actually passed from the vendee to the vendor. In these circumstances, the mere enhancement of the sale value for assessment purposes did not establish concealment of income or furnishing of inaccurate particulars.

Conclusion: The penalty under section 271(1)(c) was not exigible and its deletion was ; the departmental appeal failed.

Ratio Decidendi: Penalty for concealment cannot be imposed merely because the declared sale consideration is substituted for assessment purposes unless there is evidence that the assessee suppressed income or received additional consideration.

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