TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 160
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.... DLC rate, the levy of penalty u/s 271(1){c} of the IT Act, 1961 is justified, whereas valuation as per section 50-C of the IT Act, 1961 is deemed provision for computation of Long Term Capital Gain & as such it cannot be the basis for levy of penalty u/s 271(1){c} of the IT Act. Thus penalty so imposed by the ld. ITO Ward 4(1), Jaipur at Rs. 1869410/- & confirmed by the ld. CIT(A)-II, Jaipur deserved to be deleted. 3) That on the facts and circumstances of the case the ld. CIT(A)-II, Jaipur has grossly erred in not appreciating that the valuation as per section 50-C of the IT Act, 1961 may be deemed to be the sale consideration for purpose of computation of Long Term Capital Gain, but cannot be the basis for levy of penalty U/s 271(1){c} of the IT Act, 1961. Thus penalty so imposed U/s 271(1){c} of the Act, the ld. ITO & confirmed by the ld. CIT(A)-II, Jaipur deserves to be cancelled. 4) That on facts and circumstances of the case as well as in law, the ld. CIT(A)-II, Jaipur and also ld. Assessing Officer Ward 4(1), Jaipur have wrongly held that all the facts material to the computation of income have not been disclosed by the appellant, whereas the appellant has neither con....
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....ordingly, invoked the provisions of section 50C and computed the capital gain at Rs. 83,64,430/- after reducing the indexed cost of acquisition at Rs. 31,27,478/- out of the consideration determined u/s 50C of the Act for which assessee has also consented. Accordingly, an addition of Rs. 75,91,908/- was made on account of capital gain. Since the assessee has accepted the addition thus it was not challenged in appeal and due taxes were duly paid. Thereafter, the ld. AO proceeded with the pending penalty proceedings and imposed penalty u/s 271(1)(c) at Rs. 18,69,410/- on account of such addition. It is submitted that in the instant case, the penalty u/s 271(1)(c) has been levied merely on account of the additions made by ld. AO during the course of assessment proceedings without in any manner specifying as to how those additions indicate any concealment of income on part of assessee or furnishing of inaccurate particulars of income. It is submitted that, no penalty u/s 271(1)(c) can be levied on account of additions made being the differential value of declared consideration and the value adopted by the sub-registrar for the purpose of stamp duty in terms of provisions of u/s 5....
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....ade either in the assessment order or in the penalty order. The above contention of assessee finds support from the following judicial pronouncements which squarely cover the case of assessee: CIT vs. Madan Theatres Ltd., 260 CTR (Cal) 7 (Cal HC) 3. The revenue preferred an appeal. The ld. Tribunal dismissed the appeal holding inter alia, as follows: Thus obviously, it is only on account of deeming provisions of s. 50C, the AO has made the addition by adopting the sale consideration of Rs. 5,19,77,000, being the value adopted for the purpose of stamp valuation. The Revenue has also not shown as to how the assessee could be held to have actually received this amount which is in excess of the amount of Rs. 2,51,50,000. It is has also not been shown as to whether any corresponding addition has been made in the hands of the buyer. In any case, the issue is also now squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the case of Renu Hingorani (supra). In the circumstances, respectfully following the decision of the Co-ordinate Bench of this Tribunal in the case of Renu Hingorani (supra) as also on account of the fact that the Revenue has not been a....
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....gs. The case law referred by the assessee are squarely applicable. In this case also, there is no evidence with the revenue to prove that the assessee has received much more than reflected in the return. The addition was on account of deeming provision, therefore, we delete the penalty confirmed by the ld. CIT(A). (APB 30) Renu Hingorani vs. ACIT, ITA No. 2210/Mum/2010 (ITAT Mumbai) "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 Stamp Valuation Authority. Thus, the addition has been made by the AO by applying the provisions of section 50C of the Act. It is evident from the assessment order that the AO has not questioned the actual consideration received by the assessee but the addition is made purely on the basis of deeming provisions of the income Tax Act, 1961. The AO has not given any finding that the actual sale consideration is more than the sale consideration admitted and mentioned in the sale agreement. Thus, it does not amount to concealment of income or furnishing inaccurate particulars of incom....
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....nalty u/s 271(1)(c) could have been levied and therefore, the penalty so levied at Rs. 81,69,410/- deserved to be deleted. " 5. On the contrary, the ld. Departmental Representatives opposed the submissions. However, conceded that the issue is squarely covered in favour of the assessee by the decision of the Co-ordinate Bench in the case of Anita Beniwal in ITA No. 743/JP/2012 and also judgement of the Hon'ble Calcutta High Court rendered in the case CIT Vs Madan Teater Ltd. The ld. Departmental Representatives conceded the fact that the issue is decided by the Hon'ble Tribunal against the Revenue by following the judgment of the Hon'ble Calcutta High Court. 6. We have heard the rival submissions, perused the material available on record. It is contended that the facts are identical as were in ITA No. 743/JP/2012 in the case of Anita Beniwal v/s ITO. The Co-ordinate Bench of this Tribunal decided this issue as under:- "We have heard the rival contentions of both the parties and perused the material available on the record. The assessee had shown sale consideration at Rs. 8 lacs whereas as per section 50 of the Act, the Stamp Authority has assessed the value of property at Rs. 1....