2010 (11) TMI 977 - AT - Income Tax

Summary

Issues involved: Appeal against penalty order u/s 271(1)(c) for AY 2006-07.

Summary:

Issue 1: Justification of penalty under section 271(1)(c)
- The AO revised long term capital gains resulting in a capital gain of &8377; 13,67,010/-.
- CIT(A) provided relief of &8377; 8,72,101/- for shares of family members, confirming addition of &8377; 4,95,200/-.
- Penalty of &8377; 93,942/- imposed by AO under section 271(1)(c).
- Assessee challenged penalty before CIT(A) which was confirmed.
- Assessee argued that no penalty is warranted when additions are made by deeming provisions like section 50C.
- Assessee also claimed entitlement to deduction u/s 54F for investment in new flat.
- Assessee contended that sale value was accurate and not concealment of income.
- Tribunal held that deeming provisions application does not constitute concealment of income.
- Valuation for capital gain purposes is subjective and not final.
- Penalty not warranted as no concealment or inaccurate particulars found.
- Penalty deleted, appeal allowed.

Order pronounced on 10.11.2010