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2017 (11) TMI 793 - AT - Income TaxLevy of penalty u/s. 271(1)(c) - capital gain computation - difference in cost of acquisition adopted - AO did not accepted the cost of acquisition as on 01.04.1981 as adopted by the assessee and relied on the Indian Valuers Directory & Reference Book , to incorporate the market value of the property of Mumbai as on 01.04.1981 - Held that - Hon ble Supreme Court in the case of Dilip N Shroff vs. JCIT 2007 (5) TMI 198 - SUPREME Court on the issue of capital gain on the basis of the valuer s report, which was not accepted by the Assessing Officer, the penalty was deleted Also the assessee has disclosed all the particulars and nothing was concealed by the assessee and Hon ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. 2010 (3) TMI 80 - SUPREME COURT has clearly concluded that in case there is no concealment on facts or particulars, it cannot be a fit case for levy of penalty of income for furnishing inaccurate particulars of income. In the present case also the disputed penalty is levied only because the opinion of registered valuer is not accepted or some other expert gives another opinion, is not by itself sufficient for arriving at a conclusion that the assessee had furnished inaccurate particulars of income attracting penalty u/s 271(1)(c). Assessee has chosen to obtain the opinion of a registered valuer and the registered valuer has arrived at his opinion on certain basis. While he making the valuation report, disclosed all particulars. There can be a genuine difference of opinion of different expert and hence, once there is difference of opinion, the penalty u/s 271(1)(c) of the Act cannot be levied - Decided in favour of assessee.
Issues Involved:
1. Levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 for concealment of income and furnishing inaccurate particulars of income. Issue-wise Detailed Analysis: 1. Levy of Penalty under Section 271(1)(c): The primary issue in this appeal is the confirmation of the penalty levied by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act, 1961, for alleged concealment of income and furnishing inaccurate particulars of income by the assessee. Facts and Background: The assessee, along with two co-owners, sold an immovable property and computed the long-term capital gain by taking the cost of acquisition as on 01.04.1981 at ?1.15 crores for his 1/3rd share. This resulted in a declared long-term capital loss of ?4,37,37,000/-. The AO, during the assessment of one of the co-owners, found discrepancies and re-opened the assessee's case. The AO substituted the cost of acquisition based on the "Indian Valuers Directory & Reckoner," resulting in a final computed long-term capital gain of ?62,60,801/-. The AO initiated penalty proceedings under section 271(1)(c) for furnishing inaccurate particulars of income and concealment of income. Assessing Officer's Findings: The AO observed that the assessee attempted to conceal income by furnishing a misleading valuation report, which showed a higher cost of acquisition. The AO noted that the same valuer had provided a different valuation for the same property in the case of another co-owner. Consequently, the AO levied a penalty of ?1,13,29,500/-. Commissioner of Income Tax (Appeals) [CIT(A)] Findings: The CIT(A) upheld the AO's decision, emphasizing that the appellant colluded with the valuer to obtain a favorable valuation report, thereby manipulating the cost of acquisition to evade taxes. The CIT(A) dismissed the assessee's reliance on various court decisions, stating that the facts of the case justified the penalty. Tribunal's Analysis: The Tribunal examined whether the penalty under section 271(1)(c) was justified. The Tribunal noted that the AO did not accept the cost of acquisition as declared by the assessee and relied on the "Indian Valuers Directory & Reference Book" for valuation. However, the Tribunal emphasized that the assessee had disclosed all particulars and relied on the registered valuer's report. The Tribunal referred to the Supreme Court's decision in the case of Dilip N Shroff vs. JCIT, which held that a genuine difference of opinion between experts does not constitute furnishing inaccurate particulars of income. The Tribunal also cited the Supreme Court's ruling in Reliance Petro Products Pvt. Ltd., which stated that no penalty can be levied if there is no concealment of facts or particulars. Conclusion: The Tribunal concluded that the assessee had disclosed all particulars based on the registered valuer's opinion, and the difference in opinion between experts could not justify the penalty under section 271(1)(c). Therefore, the Tribunal deleted the penalty levied by the AO and confirmed by the CIT(A). Final Judgment: The appeal of the assessee was allowed, and the penalty of ?1,13,29,500/- levied under section 271(1)(c) of the Income Tax Act, 1961, was deleted. The order was pronounced in the open court on 11 October 2017.
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