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TMI Blog2017 (5) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances of the case as well as in law, the ld. CIT(A)-II, Jaipur has grossly erred in confirming the penalty imposed u/s 271(1){c} of the IT Act, 1961 by the ld. ITO Ward 4(1), Jaipur at ₹ 1869410/- without establishing case of concealment furnishing of inaccurate particulars of income. Thus the penalty so imposed deserves to be quashed. 2) That on the facts and in the circumstances of the case as well as in law, the ld. CIT(A)-II, Jaipur has committed a gross error of law and facts in coming to the conclusion that there is huge difference between the stated sale consideration and the DLC rate, the levy of penalty u/s 271(1){c} of the IT Act, 1961 is justified, whereas valuation as per section 50-C of the IT Act, 1961 is deemed provision for computation of Long Term Capital Gain as such it cannot be the basis for levy of penalty u/s 271(1){c} of the IT Act. Thus penalty so imposed by the ld. ITO Ward 4(1), Jaipur at ₹ 1869410/- confirmed by the ld. CIT(A)-II, Jaipur deserved to be deleted. 3) That on the facts and circumstances of the case the ld. CIT(A)-II, Jaipur has grossly erred in not appreciating that the valuation as per section 50- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Counsel for the assessee are reproduced as under:- Grounds of Appeal Nos. 01 to 04: All of these grounds of appeal pertain to the challenge made by assessee to the imposition of penalty u/s 271(1)(c) of the Act at ₹ 18,69,410/-, therefore the same are being canvassed together for the sake of convenience. Brief facts of the case are that, during the year under appeal, the assessee had sold an immovable property for a consideration of ₹ 39.00 lacs/- and declared capital gain of ₹ 7,72,522/- thereon. However, the value adopted u/s 50C by the Sub-Registrar for the purpose of charging stamp duty is ₹ 1,07,40,030/-. The ld. AO, accordingly, invoked the provisions of section 50C and computed the capital gain at ₹ 83,64,430/- after reducing the indexed cost of acquisition at ₹ 31,27,478/- out of the consideration determined u/s 50C of the Act for which assessee has also consented. Accordingly, an addition of ₹ 75,91,908/- was made on account of capital gain. Since the assessee has accepted the addition thus it was not challenged in appeal and due taxes were duly paid. Thereafter, the ld. AO proceeded with the pending penalty proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation of a property on a higher side cannot ipso facto lead to the conclusion that the assessee has received any consideration over and above the consideration mentioned by him in the sale deed and disclosed in the return of income, especially when there is no such allegation in the assessment order itself. Further, it has been held by Courts from time to time that no penalty can be levied u/s 271(1)(c) merely because the assesee did not voluntarily apply provisions of section 50C. Therefore, merely on account of addition made by invoking section 50C penalty u/s 271(1)(c) cannot be levied for the reason that no allegation of any concealment or understatement of sale consideration has been made either in the assessment order or in the penalty order. The above contention of assessee finds support from the following judicial pronouncements which squarely cover the case of assessee: CIT vs. Madan Theatres Ltd., 260 CTR (Cal) 7 (Cal HC) 3. The revenue preferred an appeal. The ld. Tribunal dismissed the appeal holding inter alia, as follows: Thus obviously, it is only on account of deeming provisions of s. 50C, the AO has made the addition by adopting the sale co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lcutta High Court in case of Madan Theaters Ltd. and Co-ordinate Bench in case of Renu Hingorani, Chimanlal Manilal Patel. Hence, respectfully following the same, we delete the levy of penalty in respect of additions under section 50C of the Act. (APB 21) Anita Beniwal vs. ITO, ITA No. 743/JP/2012 (ITAT, Jaipur) 6. We have heard the rival contentions of both parties and perused the material available on the record. The assessee had shown sale consideration at ₹ 8lacs whereas as per section 50C of the Act, the Stamp Authority has assessed the value of property at ₹ 12,35,730/-. there was difference at ₹ 4,75,658/- in the capital gain, which has been accepted by the assessee during the course of assessment proceedings. The case law referred by the assessee are squarely applicable. In this case also, there is no evidence with the revenue to prove that the assessee has received much more than reflected in the return. The addition was on account of deeming provision, therefore, we delete the penalty confirmed by the ld. CIT(A). (APB 30) Renu Hingorani vs. ACIT, ITA No. 2210/Mum/2010 (ITAT Mumbai) 8. We have considered the rival contentions and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50. The assessee has furnished all the facts of sale, documents/material before the AO. The AO has not doubted the genuineness of the documents/details furnished by the assessee. Only because the assessee agreed to the additions because of the deeming provisions it cannot be construed to be filing of inaccurate particulars on the part of the assessee. The assessee agreed to addition on the basis of valuation made by the stamp valuation authority cannot be a conclusive proof that the sale consideration a per the sale agreement is deemed to be incorrect and wrong. In view of these facts we are of the considered view that penalty cannot be levied on the basis of deeming provision. We accordingly delete the same. It is thus submitted that in no circumstance penalty u/s 271(1)(c) could have been levied and therefore, the penalty so levied at ₹ 81,69,410/- deserved to be deleted. 5. On the contrary, the ld. Departmental Representatives opposed the submissions. However, conceded that the issue is squarely covered in favour of the assessee by the decision of the Co-ordinate Bench in the case of Anita Beniwal in ITA No. 743/JP/2012 and also judgement of the Hon ble Calcut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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