TaxTMI 
TaxTMI 
2018 (6) TMI 1055
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....of the Incometax Act levied against the assessee with respect to transfer of property being land and building of "Hotel Sunset Inn" bearing Survey No. 146/8 situated at Mount Abu ?" [B] "Whether in the facts and circumstances of the case, the Tribunal has erred in law and on facts in deleting the penalty of Rs. 20,10,700/= levied under Section 271 [1](c) of the Income Tax Act without appreciating that the assessee had not disclose all the facts in its return and had failed to explain any it had not shown capital gain in the return in accordance with Section 50C without disclosing all the facts and the penalty was supported by Explanation 1 to Section 271 [1](c) and the decision in Zoom Communication [P] Limited, [321 ITR 51] ? ?" Issue....
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....ings, however, later on, assessee accepted the liability to pay capital gain on the basis of stamp valuation and in fact made a revision in the return. Accordingly, Assessing Officer passed the order of assessment in which besides making appropriate addition, he ordered initiation of penalty proceedings. In the penalty proceedings, the assessee mainly contended that the work of preparation of sale deed and payment of stamp duty was done by the purchaser and the Director of the assessee company was not aware about the stamp valuation and came to know about the same only upon receipt of a notice under Section 142 [1] of the Act. The assessee had shown bona fide by offering additional tax on the basis of revised valuation. The Assessing Offi....
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....assessee agreed to addition on the basis of valuation made by the stamp valuation authority cannot be a conclusive proof that the sale consideration as per the sale agreement is seemed to be incorrect and wrong. In view of these facts, we are of the considered view that penalty cannot be levied on the basis of deeming provision. We accordingly delete the same." In the present appeal, counsel for the Revenue vehemently contended that Section 50C of the Act makes a mandatory provision. The assessee ought to have offered capital gain tax on the basis of valuation adopted by the Stamp Valuation authorities. The Tribunal committed an error in deleting the penalty in respect of the same which the assessee has concealed. Merely because Section 5....
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....for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed would, for the purposes of Section 48 of the Act, be deemed to be the full value of consideration received or accruing as a result of such transfer. As is well settled, capital gain can be levied on actual sale consideration and not on fair market value. Subsection [1] of Section 50C of the Act makes a deviation in this principle and introduces a concept of deemed consideration for the purpose of Section 48 of the Act. There is thus a clear distinction between sale consideration actually received and deemed to have been received in terms of subsection [1] of Section 50C of the Act. Application of subsection [1] of Section 50C therefore ca....