NIKHIL MUKESH PATEL,MUMBAI vs. ACIT 21(1), MUMBAI

The captioned appeals filed by the assessees are directed against the order of the Commissioner of Income Tax (Appeals)-37, Mumbai [in short ‘CIT(A)’] and arise out of penalty passed u/s 271(1)(c) of the Income Tax Act 1961 (the ‘Act’). As common issues are involved, we are proceeding to dispose them off through a consolidated order for the sake of convenience. ITA No. 290/MUM/2017 Assessment Year: 2009-10 2. The grounds of appeal

Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal filed by the assessee by holding that- “The appellant is under a mandatory obligation to disclose all the material facts in the return of income so that the assessing officer can arrive at his correct income for the year. Further, by operation of explanation 1 to section 271(1)(c), the onus squarely lies on the appellant and the findings given at the time of assessment are relevant and have much probative value where the appellant offered no explanation/details. The AO has further observed that the appellant has not discharged the onus cast on him even by a preponderance of probabilities. The appellant has not furnished any satisfactory explanations/details/submissions during the proceedings about Niraj & Nikhil Mukesh Patel 4 291/Mum/2017 inaccurate particulars regarding the difference of long term capital of Rs.33,43,487/- and with regard to exemption u/s 54F of I.T. Act. Further, CIT(A)-32, Mumbai in his order dated 29/11/2012 has confirmed the addition of Rs.33,43,487/- on account of long term capital gain and restricted the deduction to Rs.23,75,705/- u/s 54F of I.T. Act. It is clear that the appellant had concealed the particulars of income/furnished inaccurate particulars of income in the return of income filed by him. It can safely be held that where in respect of any facts material to the computation of the total income of any person under the Act, such person fails to offer an explanation or offers an explanation which is found by the officers of the income-tax to be false, or such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount disallowed in computing the total income of such person as a result thereof shall, for the purposes of section, be deemed to represent the income in respect of which particulars have been concealed. Therefore, after considering the facts of the case, submissions made by the appellant and the judicial decisions cited above, I find that the penalty levied is in order and the same is upheld. Accordingly, the grounds raised

On the other hand, the Ld. DR supports the order passed by the Ld. CIT(A).

We have heard the rival submissions and perused the relevant materials on record. The 1st issue relates to the levy of penalty u/s 271(1)(c) on the difference of valuation between the stamp duty authorities and the one shown by the assessee. In Fortune Hotels & Estates (P) Ltd. (supra), the Hon’ble Bombay High Court has held that “in terms of section 50C, higher sales consideration of property determined Niraj & Nikhil Mukesh Patel 6 291/Mum/2017 by DVO did not by itself amount to furnishing inaccurate particulars of income so as to levy penalty u/s 271(1)(c) of the Act.” In Madan Theaters Ltd. (supra), the Hon’ble Calcutta High Court has held that “where actual amount received on account of sale of property was offered for taxation but the Assessing Officer, invoking section 50C deemed sale consideration at higher sum, in absence of any iota of evidence that the assessee had received more amount than that shown by it, penalty u/s 271(1)(c) was not leviable.” Facts being identical, we follow the ratio laid down in the above decisions and delete the penalty levied on the difference between the value determined by the stamp duty authorities and the one shown by the appellant. 7.1 Now we turn to the 2nd issue. There is no dispute that the appellant had claimed deduction of Rs.27,82,584/- u/s 54 of the Act. The same was claimed while filing the return of income. The AO denied the above claim made by the appellant. The AO has mentioned these facts in the introductory para of his penalty order dated 28.03.2014. In the case of Reliance Petroproducts (P) Ltd. (supra), the Hon’ble Supreme Court has held that merely because assessee had claimed expenditure, which claim was not accepted or was not acceptable to revenue, that by itself would not attract penalty u/s 271(1)(c) of the Act. Facts being identical, we follow the ratio laid down the above decision and delete the penalty levied by the AO on disallowance of claim of deduction u/s 54F.