2013 (12) TMI 539 - AT - Income Tax

Addition u/s 50C Held that - The assessee has not been able to explain as to why provisions laid down u/s 50C are not applicable in his case The valuation done by the stamp value authority has been accepted by A.O. Decided against assessee. Cost of acquisition Held that - The assessee had furnished bifurcation of the indexed cost into various years which was not accepted by the authorities - The AO had given the logical estimation while reallocating such expenses into various years which was agreed upon by the assessee Decided against assessee. Deduction u/s 54F - Held that - The investment was made in a vacant plot and not in the residential house The assessee was not able to prove otherwise Decided against assessee. Penalty u/s 271(1)(c) Held that - There was no concealment of particulars of income or furnishing inaccurate particulars thereof on the part of the assessee on the above addition/disallowance to attract the penal provisions laid down u/s 271 (1) ( C) Decided in favour of assessee.

Summary

Issues involved:
1. Upholding addition u/s 50C of the Act and related disallowance/addition
2. Imposing penalty u/s 271(1)(C) of the Act
3. Denial of claimed deduction u/s 54F of the Act

Analysis:
1. The assessee contested the first appellate orders upholding the AO's actions in making additions u/s 50C of the Act and related disallowances, as well as imposing penalties u/s 271(1)(C) of the Act. The AO valued the property sold at Rs.14,90,000 based on stamp valuation authority's assessment, while the assessee declared Rs.14,00,000. The AO also denied claimed deduction u/s 54F, stating the property bought was a vacant plot. The AO calculated long term capital gain at Rs.4,02,189, adopting the sale consideration of Rs.14,90,000 u/s 50C of the Act. The Tribunal found no reason to interfere as the assessee failed to show why provisions of 50C were not applicable, thus rejecting the appeal.

2. The AO did not accept the claimed indexed cost of acquisition due to lack of supporting evidence. The AO estimated the expenses allocation into different years, which the assessee agreed to during assessment. The Tribunal upheld the AO's action, stating the assessee had no grounds to challenge it, having consented during assessment. The claimed deduction u/s 54F was denied as the investment was in a vacant plot, not a residential house. Since the assessee failed to provide further evidence, the Tribunal upheld the first appellate order, rejecting the appeal on this ground as well.

3. In another appeal, the assessee challenged the penalty u/s 271(1)(C) imposed on the additions/disallowances. The Tribunal found that the AO had used deemed provisions u/s 50C to determine the property's consideration and estimated the indexed cost of acquisition. The denial of deduction u/s 54F was based on information provided by the assessee. The Tribunal concluded there was no concealment of income particulars to justify the penalty, thus directing its deletion and allowing the appeal.

In conclusion, ITA No. 4646/Del/2011 was dismissed, while ITA No. 4647/Del/2011 was allowed, with the penalty under section 271(1)(C) being deleted.