Adoption of stamp duty value as sale consideration does not alone constitute inaccurate particulars; penalty deleted after valuation based addition.

Adoption of stamp duty value as sale consideration under the deeming provision for property valuation does not, by itself, constitute furnishing inaccurate particulars of income so as to attract penalty for concealment; the revenue must establish that the assessee actually received and retained the excess amount over the deed value. The finding relied solely on the deeming valuation to make a proportionate income addition, without proof of receipt or corresponding inclusion in the buyer's hands, precludes imposition of penalty for inaccurate particulars; penalty was directed to be deleted.

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Issues: (i) Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 can be levied on an assessee where the addition arises solely by operation of the deeming provision of Section 50C of the Income-tax Act, 1961.

Issue (i): Whether penalty under Section 271(1)(c) can be sustained where the assessing officer made an addition by applying the deeming fiction in Section 50C without any evidence that the assessee actually received higher consideration or furnished inaccurate particulars.

Analysis: Section 50C operates as a deeming provision adopting stamp duty/valuation authority value as deemed consideration for computation of capital gains. The question is whether invocation of that deeming provision, without independent evidence that the assessee actually received a higher amount or concealed receipt, constitutes furnishing of inaccurate particulars or concealment of income for the purposes of Section 271(1)(c). The authorities relied upon and the Tribunal's reasoning examine whether the revenue produced evidence of actual receipt in excess of the sale deed amount and whether any corresponding adjustments were shown on the buyer's side. The Tribunal follows coordinate-bench decisions holding that an addition made solely by invoking Section 50C, without proof of actual higher receipt or inaccurate disclosure, does not establish the mens rea or factual foundation required for penalty under Section 271(1)(c).

Conclusion: Penalty under Section 271(1)(c) cannot be sustained where the only basis for the addition is the deeming provision of Section 50C and the revenue fails to show that the assessee actually received a higher consideration or furnished inaccurate particulars; conclusion is in favour of the assessee.

Final Conclusion: The appeal is allowed and the penalty imposed under Section 271(1)(c) is deleted; the decision establishes that additions based solely on Section 50C do not, without more, attract penalty under Section 271(1)(c).

Ratio Decidendi: An addition effected solely by the deeming provision of Section 50C, in the absence of evidence that the assessee actually received or concealed higher consideration or furnished inaccurate particulars, does not warrant levy of penalty under Section 271(1)(c) of the Income-tax Act, 1961.

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