TaxTMI 
TaxTMI 
2013 (2) TMI 93
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....ment order that this time as well, the total income and agricultural income remained same. In scrutiny proceedings, the Assessing Officer took cognizance of the fact that the assessee had sold immovable property on 30.11.2006, in which he was having ½ share and the other ½ share belonged to his brother namely Shri C. Vijayakumar [assessee's connected case I.T.A. No. 998/Mds/2012] and the assessee in his revised return dated 04.06.2008 had declared the sale consideration of Rs.28,54,200/- for the purpose of computing capital gains. The Assessing Officer noted from the ITS details that the immovable property was valued at Rs.95,40,000/-. The assessee clarified before the Assessing Officer that the said value as noticed by the Assessing Officer was only the guideline value for the purpose of stamp fees and registration. The Assessing Officer did not accept the assessee's explanation and by invoking section 50C(2) of the "Act", adopted deemed sale consideration as Rs.95,40,000/- and worked out the capital gain as under: Rs. "Sale consideration 95,40,000 Less: Indexed cost (as returned) 24,89,065 70,50,935 50% share of the assessee ....
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....f the guideline value on the ground that being a seller the appellant himself signed the documents in the presence of Registering Authority on the stamp paper. The value of the property sold by the appellant is determined on the guideline value of the property and it is invariably mentioned in the document itself before the registration of the sale deed takes place. 7. Section 50C is a special provision inserted by the Finance Act 2002 w.e.f. 01.04.2003 with a view to tackle unaccounted income generated by the understatement of consideration in the acquisition of property. For working out the capital gains on sale of immoveable property the appellant has to adopt the value determined by the stamp valuation authority. The only option available to the appellant is to file an appeal if the value is considered to be higher or request the Assessing Officer to refer the matter to the Valuation Officer. Since the Assessing Officer has not found it fit to refer the case to departmental valuation cell even though appellant has made request. However, the appellant has not filed any appeal against the decision taken by the Assessing Officer. 8. The ....
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.... by the appellant are rejected. 9. In the result the appeal is DISMISSED." Therefore, the assessee is in appeal. 4. Reiterating the grounds of appeal raised, the AR representing the assessee has vehemently contended that the CIT(A) has erred in confirming the penalty under section 271(1)(c) of the "Act" merely because in assessment proceedings the Assessing Officer had invoked the deeming provision as enshrined in section 50C(2) of the "Act." It is the contention of the AR that in the absence of any substantive allegation that the assessee received any amount over and above what was stated in the assessment proceedings, the primary condition of furnishing false and inaccurate particulars as mandated under section 271(1)(c) of the "Act" does not stand satisfied. To buttress his plea, he has also submitted compilation of following case law: "Sl.No. Particulars 1 Special Provision for full value of consideration [Section 50C] 2 Failure to furnish returns, comply with notices, concealment of income, etc. [Section 271] 3 Dr. Ajith Kumar Pandey Vs. Income Tax Appellate Tribunal 4 Renu Hingorani Vs. ACIT, Range, 19(3), Mumbai ITA N....
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..... On the same basis, the Assessing Officer issued penalty notice, which culminated in imposition of penalty in question. It is not the case of the Revenue that the assessee had received any consideration over and above what was disclosed. In our opinion, the mere fact that the Assessing Officer had invoked section 50C(2) of the "Act" and adopted guideline value for computing capital gains ignoring what was disclosed by the assessee ipso facto cannot be the sole basis for imposing penalty. It transpires that the assessee is not guilty of furnishing any false and inaccurate particulars regarding the valuation of the property sold for the purpose of computing capital gains. We notice that in case law of Renu Hingorani vs. ACIT (supra), the Coordinate Bench of ITAT Mumbai Bench has held that penalty merely on the basis of invoking section 50C(2) of the "Act" cannot be sustained. The relevant portion of the order is hereby reproduced as under: "8. We have considered the rival contentions and relevant record. We find that the AO had made addition of Rs.9,00,824/- being difference between the sale consideration as per sale agreement and the valuation made by the Stam....
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....the ratio of the above said case law qua the facts of the present case, we find that there is no allegation against the assessee of any understatement of the value of the property sold. Hence, we hold that section 50C(2) is only a deeming provision which cannot be taken as to be an understatement for the purpose of imposing penalty. 9. Now we come to the observation of the CIT(A) relying case law of Dharmendra Textile Processors (supra). It is observed that the Hon'ble Bombay High Court in case of CIT vs. M/s. Aditya Birla Nova Limited vide judgment dated 14.08.2012 in Income Tax Appeal No. 3899 of 2010 has distinguished the ratio of the case law of Dharmendra Textile Processors (supra) by holding as under: "10. In support of his submission, Mr.Malhotra relied upon the following observations of the Supreme Court in Union of India & Ors.vs. Dharmendra Textile Processors & Ors. (2008) 13 SCC 369 =(2008) 306 ITR 277:- "17. It is of significance to note that the conceptual and contextual difference between Section 271(1)(c) and Section 276-C of the IT Act was lost sight of in Dilip Shroff case. ....