|CORAM:||B. Ramakotiah (AM), Saktijit Dey (JM)|
|CATCH WORDS:||concealment of income, deemed income, furnishing inaccurate particulars of income, penalty|
|DATE:||September 4, 2015 (Date of pronouncement)|
|DATE:||September 12, 2015 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 271(1)(c): Failure to apply s. 50C and offer capital gains as per the stamp value does not constitute concealment/ furnishing of inaccurate particulars of income for levy of penalty u/s 271(1)(c)|
(i) As can be seen from the facts and materials on record, while the assessee computed capital gain on the basis of sale consideration mentioned in the registered sale deed, the A.O. computed the capital gain by invoking the provisions of section 50C of the Act as the registering authority of the State Government has valued the property for the purpose of stamp duty at Rs.2.55 crores. Though, it may be a fact that the ITAT while deciding assessee’s quantum appeal has upheld application of section 50C of the Act for the purpose of computation of capital gain but that itself will not lead to the conclusion that assessee either has furnished inaccurate particulars of income or concealed the particulars of income. As can be seen from the language of section 50C it is a deeming provision. In a case where A.O. finds that the value determined by the stamp duty authority for the purpose of stamp duty is more than the consideration claimed to have been received by the party, then the value adopted by the SRO shall be deemed to be the consideration received by the assessee for the purpose of computation of capital gain.
(ii) Thus, for application of section 50C of the Act, it is not necessary for the A.O. to examine whether actually assessee has received anything over and above the amount mentioned in the sale deed as he simply has to go by the valuation adopted by the SRO. However, as far as imposition of penalty is concerned, there must be positive evidence before the A.O. to conclude that assessee has received the amount as valued by SRO for stamp duty purpose. Unless there are positive evidence to indicate receipt of on money to the extent of valuation made by SRO by the assessee, penalty under section 271(1)(c) cannot be imposed. Further, in the present case as is evident from the materials on record, the assessee in the course of assessment proceeding has furnished all necessary and relevant documents relating to the transaction of the property in question including registered sale deed. The assessee has not suppressed any material fact from the notice of the A.O. In these circumstances, the imposition of penalty under section 271(1)(c) of the Act alleging furnishing of inaccurate particulars of income or concealment of income, in our view, is not appropriate.
(Renu Hingorani, Mumbai vs. ACIT, Range 19(3), Mumbai Order dt.22.12.2010 in ITA.No.2210/Mum/2010, Shri Chimanlal Manilal Patel, Surat vs. ACIT, Cir.6, Surat Order dt.22.06.2012 in ITA.No.508/Ahd/2010, ACIT 14(1), Mumbai vs. M/s. Sunland Metal Recycling, Mumbai Order dt.10.12.2014 in ITA.No.6454/Mum/2011, Shri C. Basker, Karur vs. The ACIT, Circle-II, Trichy Order dt.12.10.2012 in ITA.No.997/Mds/2012 & 998/Mds/2012 and Judgment of Hon’ble Kolkata High Court in the case of CIT vs. Madan Theatres Ltd., GA.No.684 of 2013 dated 14.05.2013 followed).