Penalty under section 271(1)(c) not sustainable where section 43CA addition rested only on stamp value difference and no concealment was shown.

Penalty under section 271(1)(c) could not be sustained merely because an addition was made under section 43CA on account of the difference between the declared sale price and stamp value of residential stock-in-trade. The addition was a deemed income adjustment based on valuation difference, and there was no material to show that the assessee had actually received consideration over and above the declared price. In the absence of evidence of concealment of income or furnishing of inaccurate particulars, the penalty provision was not attracted. The assessee therefore succeeded on the substantive issue.

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Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 could be sustained solely because an addition was made under section 43CA of the Income-tax Act, 1961 on account of difference between actual sale price and stamp value.

Analysis: The addition under section 43CA was treated as arising from a deemed income adjustment based on the valuation difference of the residential units sold as stock-in-trade. There was no material to show that the assessee had actually received consideration over and above the declared sale price. In such circumstances, the mere existence of an addition under section 43CA did not by itself establish concealment of income or furnishing of inaccurate particulars so as to attract penalty under section 271(1)(c).

Conclusion: Penalty under section 271(1)(c) was not sustainable and the assessee succeeded on the substantive ground.

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