{"id":8248,"date":"2014-08-06T17:45:36","date_gmt":"2014-08-06T12:15:36","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=8248"},"modified":"2014-08-06T17:45:36","modified_gmt":"2014-08-06T12:15:36","slug":"harish-voovaya-shetty-vs-ito-itat-mumbai-s-2711c-direct-judgements-holding-that-failure-to-apply-s-50c-does-not-attract-penalty-have-to-be-followed","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/harish-voovaya-shetty-vs-ito-itat-mumbai-s-2711c-direct-judgements-holding-that-failure-to-apply-s-50c-does-not-attract-penalty-have-to-be-followed\/","title":{"rendered":"Harish Voovaya Shetty vs. ITO (ITAT Mumbai)"},"content":{"rendered":"\n\n
Click here to download the judgement (harish_shetty_50C_penalty.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nNo S. 271(1)(c) penalty for failure to compute capital gains as per s. 50C. Direct judgements on the topic have to be followed <\/strong> <\/p>\n

The assessee sold property for a sale consideration of Rs.4.50 lakhs. The said plot of land was valued for Stamp Duty purposes at Rs.15,89,000. The AO applied s. 50C and considered the difference between the sale price and Stamp Duty value for purposes of computation of capital gain. He also levied concealment penalty u\/s 271(1)(c) on such difference. The levy of penalty was confirmed by the CIT(A). Before the ITAT, the assessee claimed that the issue was covered in his favour by Renu Hingorani<\/a><\/strong> (ITAT Mum), Chimanlal Manilal Patel<\/a><\/strong> (ITAT Ahd) & Madan Theatres<\/a><\/strong> 260 CTR (Cal) 75 where it was held that as the AO had not questioned the actual consideration received by the assessee and as s. 50C was a deeming provision, it could not be said that the assessee had filed inaccurate particulars of income so as to attract levy of penalty u\/s 271(1)(c) of the Act. The department claimed that as the assessee was aware of s. 50C, it ought to have applied it and failure to do so was a deliberate attempt to furnish inaccurate particulars of his income which entailed concealment penalty. Reliance was placed on Zoom Communications<\/strong> 327 ITR 510 (Del) & Escort Finance<\/strong> 328 ITR 44 (Del). HELD by the Tribunal: <\/p>\n

There are direct judgements which hold that where addition is made on account of application of s. 50C and there is no material on record to show that the assessee had received more amount than that shown by it on sale of property then penalty u\/s 271(1)(c) cannot be levied. The decisions relied upon by the Dept are not directly on the issue and distinguishable on facts. The context in which the decisions have been rendered is entirely different from the context of the present case. The law in this regard is well settled as held in Sun Engineering<\/strong> 198 ITR 297 (SC). When there is a direct decision available on the issue, then it will be appropriate to follow the same particularly when no contrary decision on the same very issue is cited by the opposite side.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"


\nNo S. 271(1)(c) penalty for failure to compute capital gains as per s. 50C. Direct judgements on the topic have to be followed <\/strong><\/p>\n

There are direct judgements which hold that where addition is made on account of application of s. 50C and there is no material on record to show that the assessee had received more amount than that shown by it on sale of property then penalty u\/s 271(1)(c) cannot be levied. The decisions relied upon by the Dept are not directly on the issue and distinguishable on facts. The context in which the decisions have been rendered is entirely different from the context of the present case. The law in this regard is well settled as held in Sun Engineering<\/strong> 198 ITR 297 (SC). When there is a direct decision available on the issue, then it will be appropriate to follow the same particularly when no contrary decision on the same very issue is cited by the opposite side<\/p>\n

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