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TMI Blog2023 (12) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... eviable u/s 271(1)(c) looking into the facts of the instant case as at the time of sale of aforesaid immovable property the assessee had already made payment of taxes on 26.12.2014 (including tax deducted at source under Section 194 IA of the Act). Accordingly, it is evident that there was no intention of evading payment of taxes on short-term capital gain arising from sale of aforesaid property. Secondly, it is observed that the additions have been made by the AO by adding the difference by invoking the deeming provisions of Section 56(2)(vii)(b) of the Act by holding that the purchase price of the property was lower than the FMV of the property for stamp duty valuation purposes. Therefore, the addition was made by invoking the deeming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. The Gujarat High Court held that whether once the assessee initially disputed stamp valuation and later on gave up the challenge and offered additional deemed income to tax, the impugned order passed by Ahmedabad Tribunal deleting penalty was to be upheld. Accordingly, we are of the considered view that penalty under Section 271(1)(c) of the Act is liable to be deleted in the instant set of facts. - Decided in favour of assessee. - Smt. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : Ms. Arti N. Shah, A.R. For the Respondent : Ms. Saumya Pandey Jain, Sr. D.R. ORDER PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the course of assessment, the Assessing Officer was of the view that the assessee had purchased the aforesaid property for a consideration which was less than the Fair Market Value (in short FMV ) for the purpose of stamp duty valuation. Accordingly, the Assessing Officer added the difference to the total income of the assessee under Section 56(vii)(b) of the Act, to the tune of Rs. 8,18,717/-. Besides the above the Assessing Officer also made an addition of Rs. 20,000/- on the ground that the assessee has not explained the source of Rs. 20,000/- towards payment of stamp duty charges. Thereafter, the Assessing Officer levied penalty under Section 271(1)(c) of the Act on the ground that had the case of the assessee not be selected f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271(1)(c) cannot be levied in respect of any addition of deemed income. This stand of Appellant is factually incorrect. The issue of addition u/s 56(2)(vii)(b) of difference in actual consideration and consideration as per Stamp Duty Valuation is not a new issue These provisions are applicable over a period of last few AY's Appellant cannot take a stand that since it is a deemed addition so no penalty u/s 271(1)(c) can be levied. Penalty u/s 271(1)(c) can be levied wherever there is a concealment of Income or furnishing of inaccurate particulars of Income irrespective of the fact whether the addition is a normal addition or a deemed addition. Thus, this contention of Appellant is not acceptable. d) In respect of third addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it was submitted that no penalty can be levied on deemed addition under Section 271(1)(c) of the Act. 7. In response, the Ld. D.R. argued that penalty can be levied even in tax neutral transactions, which have been declared in the original return of income. The Ld. D.R. placed reliance on the observation made by the Ld. CIT(A) and also placed reliance on the case of Hon ble Supreme Court in the case of MAK Data Pvt. Ltd. 358 ITR 593 (SC) , wherein it was held that Voluntary disclosure does not release the assessee from the mischief of penal proceedings under Section 271(1)(c) of the Act. 8. We have heard the rival contentions and perused the material on record. On going through the facts of the instant case, we are of the consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 3.40 crores. The assessee initially opposed the valuation adopted by the stamp valuation authorities but later on accepted liability to pay capital gains on the basis of stamp valuation and in fact filed a revised return of income. The Assessing Officer passed order of assessment in which, besides making appropriate additions, he also levied penalty under Section 271(1)(c) of the Act. In appeal, the Ahmedabad Tribunal opined that merely because assessee agreed to addition on the basis of valuation made by the stamp valuation authority, this could not be a conclusive proof that sale consideration as per sale agreement was deemed to be incorrect. The Tribunal thus held that penalty cannot be levied on the basis of deeming provision. In fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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