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TMI Blog2018 (6) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... d to have been received in terms of subsection [1] of Section 50C of the Act. Application of subsection [1] of Section 50C therefore cannot automatically give rise to penalty proceedings. In the present case, the assessee had in fact at one stage disputed such valuation by pointing out inter alia that the property was facing certain restrictions from the forest department, and that therefore, the valuation prescribed by the stamp valuation authority could not be automatically adopted. In the facts of the case, we do not find any reason to interfere with judgment of the Tribunal. This is so since the assessee had, as noted above, initially disputed the stamp valuation. However, once the assessee gave up the challenge, revised the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return in accordance with Section 50C without disclosing all the facts and the penalty was supported by Explanation 1 to Section 271 [1](c) and the decision in Zoom Communication [P] Limited, [321 ITR 51] ? ? Issue pertains to penalty imposed by the Assessing Officer which eventually was deleted by the Tribunal by the impugned judgment. The issue arises in the following factual background. The respondentassessee is a private company registered under the Companies Act, 1956. During the period relevant to the assessment year 2009-2010, the assessee had sold immovable property in the nature of land and building called Hotel Sun Set Inn situated at Mount Abu for a declared sale consideration of ₹ 2.75 Crores. The sale deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not aware about the stamp valuation and came to know about the same only upon receipt of a notice under Section 142 [1] of the Act. The assessee had shown bona fide by offering additional tax on the basis of revised valuation. The Assessing Officer, however, was not convinced about such explanation. He was of the opinion that the assessee was required to offer capital gain on the deemed consideration as envisaged under Section 50C of the Act. The assessee had revised the income only after the Assessing Officer had specifically pointed out the defect. There was thus lack of bona fide on the part of the assessee. He also believed that the Director of the company was aware about the stamp valuation. The Tribunal, by the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision. The assessee ought to have offered capital gain tax on the basis of valuation adopted by the Stamp Valuation authorities. The Tribunal committed an error in deleting the penalty in respect of the same which the assessee has concealed. Merely because Section 50C refers to deeming income, it does not mean that penalty under Section 271 [1](c) cannot be imposed, since the penalty is to be levied for tax sought to be evaded. In this respect, counsel for the revenue relied upon decision of Division Bench of Orissa High Court in the case of Commissioner of Incometax, Orissa v. Ganpatrai Gajanand , reported in [1977] 108 ITR 403 in which, in the context of addition under Section 68 of the Act, it was held that merely because Section 68 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f deemed consideration for the purpose of Section 48 of the Act. There is thus a clear distinction between sale consideration actually received and deemed to have been received in terms of subsection [1] of Section 50C of the Act. Application of subsection [1] of Section 50C therefore cannot automatically give rise to penalty proceedings. Counsel for the Revenue strongly argued that the assessee was required to declare the valuation adopted by the Stamp Valuation authority and offer capital gain on the basis of such valuation which he failed to do, and therefore, the assessee was guilty of providing inaccurate particulars of income. To examine this contention, we must refer to subsection [2] of Section 50C which starts with an expression ..... X X X X Extracts X X X X X X X X Extracts X X X X
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