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Facts
The assessee declared a loss in their income return. The Assessing Officer made additions, including capital gains under Section 50C of the Income Tax Act, 1961. The CIT(A) upheld these additions. Subsequently, a penalty was levied under Section 271(1)(c) for Rs. 13,65,104.
Held
The Tribunal held that the AO was correct in invoking Section 50C for additions based on stamp duty valuation, but this alone does not automatically attract penalty under Section 271(1)(c) if there is no evidence of concealment or furnishing inaccurate particulars. The addition was based on deeming provisions, not conclusive proof of higher actual consideration received by the assessee.
Key Issues
Whether penalty under Section 271(1)(c) is leviable when additions are made based on Section 50C's deeming provisions without establishing concealment of income.
Sections Cited
271(1)(c), 50C, 2(47)
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Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SUNIL KUMAR SINGH
This appeal has been preferred by the assessee against order dated 22.03.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2010-11, raising following grounds:
“GROUND 1
M/s Mascot Constructions Pvt. Ltd. M/s Mascot Construction A. On the facts and circumstances of the case, Commissioner of Income A. On the facts and circumstances of the case, Commissioner of Income A. On the facts and circumstances of the case, Commissioner of Income - Tax Appeals (the CIT Appeals)erred in Tax Appeals (the CIT Appeals)erred in passing an order u/s 271(1)(c) four passing an order u/s 271(1)(c) four years after the order of CIT(A) u/s 250, which is barred by time and thus years after the order of CIT(A) u/s 250, which is barred by time and thus years after the order of CIT(A) u/s 250, which is barred by time and thus bad at law. B. The appellant, therefore, prays that penalty charged of Rs.13,65,104/ B. The appellant, therefore, prays that penalty charged of Rs.13,65,104/ B. The appellant, therefore, prays that penalty charged of Rs.13,65,104/ - maypleasebedeleted. maypleasebedeleted. GROUND2 A. On the facts and circumstanc A. On the facts and circumstances of the case, Commissioner of Income es of the case, Commissioner of Income - Tax Appeals (the CIT Appeals)erred in levying the penalty of Rs. 13,65, Tax Appeals (the CIT Appeals)erred in levying the penalty of Rs. 13,65, Tax Appeals (the CIT Appeals)erred in levying the penalty of Rs. 13,65, 104/ - notappreciatingthefactthat the additions are made by invoking notappreciatingthefactthat the additions are made by invoking notappreciatingthefactthat the additions are made by invoking deeming provision of Section 50C of the Act on sale of reversionary deeming provision of Section 50C of the Act on sale of reversionary deeming provision of Section 50C of the Act on sale of reversionary nights, which is outside the purview of Penalty which is outside the purview of Penalty U/s271(1)(c) bad at law U/s271(1)(c) bad at law as per legal pronouncements as per legal pronouncements B. The appellant, therefore, prays that penalty charged of Rs. B. The appellant, therefore, prays that penalty charged of Rs. B. The appellant, therefore, prays that penalty charged of Rs. 13,65,104/-may may please be deleted. GROUND 3 A. On the facts and circumstances of the case, the Commi A. On the facts and circumstances of the case, the Commi A. On the facts and circumstances of the case, the Commissioner of Income - Tax Appeals (the CIT Appeals)erred innot adjudicating Ground 3 Tax Appeals (the CIT Appeals)erred innot adjudicating Ground 3 Tax Appeals (the CIT Appeals)erred innot adjudicating Ground 3 pertaining to levying penalty of Rs. 13,65, 104/ pertaining to levying penalty of Rs. 13,65, 104/ - being 100% of the tax being 100% of the tax sought to be evaded by working out the tax at regular rates of tax, sought to be evaded by working out the tax at regular rates of tax, sought to be evaded by working out the tax at regular rates of tax, whereas the income is assessed a whereas the income is assessed as Capital Gain at the special rate of s Capital Gain at the special rate of tax. B. The appellant, therefore, prays that penalty if levied shall be worked B. The appellant, therefore, prays that penalty if levied shall be worked B. The appellant, therefore, prays that penalty if levied shall be worked out at the same rate of tax levied at the Assessment Order. out at the same rate of tax levied at the Assessment Order.
Briefly stated, facts of the case are that against the return of Briefly stated, facts of the case are that against the return of Briefly stated, facts of the case are that against the return of income filed by the assessee declaring loss d by the assessee declaring loss of Rs.1,60,444/ of Rs.1,60,444/- on 25.11.2010, the Assessing Officer completed the assessment u/s he Assessing Officer completed the assessment u/s he Assessing Officer completed the assessment u/s 143(3) of the Income 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) tax Act, 1961 (in short ‘the Act’) on 9/11/2012, wherein he made various additions and assessed the wherein he made various additions and assessed the wherein he made various additions and assessed the total income at Rs.45,53,301/ 45,53,301/-. One of the additions additions made was in respect of capital gain assessed invoking section 50C of the Act. respect of capital gain assessed invoking section 50C of the Act. respect of capital gain assessed invoking section 50C of the Act.
On further appeal, the Ld. CIT(A) upheld the said addition On further appeal, the Ld. CIT(A) upheld the said addition On further appeal, the Ld. CIT(A) upheld the said addition which was made invoking section 50C of the Act. Aggrieved, the which was made invoking section 50C of the Act. which was made invoking section 50C of the Act.
M/s Mascot Constructions Pvt. Ltd. M/s Mascot Construction assessee filed appeal before the Income assessee filed appeal before the Income-tax Appellate Tribunal tax Appellate Tribunal however, in the Tribunal dismissed the however, in ITA No. 1695/Mum/2014, the Tribunal dismissed the however, in ITA No. 1695/Mum/2014, the Tribunal dismissed the ground raised by the assessee. ground raised by the assessee. Prior to passing of Prior to passing of the order by ITAT, the Assessing Officer vide order dated 26.03.2018, levied ITAT, the Assessing Officer vide order dated 26.03.2018 ITAT, the Assessing Officer vide order dated 26.03.2018 penalty u/s 271(1)(c) of the Act in respect of addition of nalty u/s 271(1)(c) of the Act in respect of addition of nalty u/s 271(1)(c) of the Act in respect of addition of Rs.40,99,413/- made under section 50C of the Act made under section 50C of the Act. The Ld. CIT(A) . The Ld. CIT(A) upheld the penalty observing as under: observing as under:
“6. As regards ground 2, I have perused the facts of the case and have As regards ground 2, I have perused the facts of the case and have As regards ground 2, I have perused the facts of the case and have also examined the o also examined the order of the AO and the submissions filed by the rder of the AO and the submissions filed by the appellant. The appellant in his capacity as landlord had received a certain appellant. The appellant in his capacity as landlord had received a certain appellant. The appellant in his capacity as landlord had received a certain sum from two tenants in the conversion of their tenancy rights into sum from two tenants in the conversion of their tenancy rights into sum from two tenants in the conversion of their tenancy rights into ownership rights for the flats in which these two tenants were r ownership rights for the flats in which these two tenants were r ownership rights for the flats in which these two tenants were residing. The appellant had shown an amount of Rs. 5 lacs as the The appellant had shown an amount of Rs. 5 lacs as the The appellant had shown an amount of Rs. 5 lacs as the sum received from the sale of reversionary rights to these two parties. In its audited from the sale of reversionary rights to these two parties. In its audited from the sale of reversionary rights to these two parties. In its audited accounts, the appellant company showed the amount of Rs. 5 lacs under accounts, the appellant company showed the amount of Rs. 5 lacs under accounts, the appellant company showed the amount of Rs. 5 lacs under the heading of 'Capital Receipts'. the heading of 'Capital Receipts'. However, the AO treated this transaction However, the AO treated this transaction as an outright sale and levied capital gains tax. While doing so, the AO as an outright sale and levied capital gains tax. While doing so, the AO as an outright sale and levied capital gains tax. While doing so, the AO took recourse to section 50C and used the sale value used by the Stamp took recourse to section 50C and used the sale value used by the Stamp took recourse to section 50C and used the sale value used by the Stamp Valuation authorities. Subsequently, the AO initiated and levied a pena Valuation authorities. Subsequently, the AO initiated and levied a pena Valuation authorities. Subsequently, the AO initiated and levied a penalty u/s 271(1)(c) on the appellant company and the same is the subject of an u/s 271(1)(c) on the appellant company and the same is the subject of an u/s 271(1)(c) on the appellant company and the same is the subject of an appeal before the undersigned. appeal before the undersigned. In the submission filed during the appeal proceedings, the appellant In the submission filed during the appeal proceedings, the appellant In the submission filed during the appeal proceedings, the appellant contended that the AO had computed capital gains by using the sale value contended that the AO had computed capital gains by using the sale value contended that the AO had computed capital gains by using the sale value adopted by the Stamp Valuation authorities and that since this sale value d by the Stamp Valuation authorities and that since this sale value d by the Stamp Valuation authorities and that since this sale value was merely an estimate, no penalty u/s 271(1)(c) could be levied on the was merely an estimate, no penalty u/s 271(1)(c) could be levied on the was merely an estimate, no penalty u/s 271(1)(c) could be levied on the assessee. Several citations and case laws have been submitted by the assessee. Several citations and case laws have been submitted by the assessee. Several citations and case laws have been submitted by the appellant in support of his contentions. appellant in support of his contentions. However, a careful observation of the facts of the case shows that the r, a careful observation of the facts of the case shows that the r, a careful observation of the facts of the case shows that the appellant has furnished inaccurate particulars of his income from the very appellant has furnished inaccurate particulars of his income from the very appellant has furnished inaccurate particulars of his income from the very outset. The conversion of tenancy rights into ownership rights clearly falls outset. The conversion of tenancy rights into ownership rights clearly falls outset. The conversion of tenancy rights into ownership rights clearly falls within the definition of Transfer' as g within the definition of Transfer' as given in section 2(47) of the Income Tax iven in section 2(47) of the Income Tax Act, 1961 and hence the income received from the transaction would be Act, 1961 and hence the income received from the transaction would be Act, 1961 and hence the income received from the transaction would be vulnerable to a capital gains tax. vulnerable to a capital gains tax. Inspite of this the appellant showed the Inspite of this the appellant showed the amount received from the tenant as a 'Capital Receipt' thereby furnish amount received from the tenant as a 'Capital Receipt' thereby furnish amount received from the tenant as a 'Capital Receipt' thereby furnishing inaccurate particulars of his income. Further, since the appellant had inaccurate particulars of his income. Further, since the appellant had inaccurate particulars of his income. Further, since the appellant had shown a paltry sum of Rs. 2.50 lacs as the sale value of each of the two shown a paltry sum of Rs. 2.50 lacs as the sale value of each of the two shown a paltry sum of Rs. 2.50 lacs as the sale value of each of the two flats, the AO had no alternative but to invoke section 50 C of the Income flats, the AO had no alternative but to invoke section 50 C of the Income flats, the AO had no alternative but to invoke section 50 C of the Income Tax Act, 1961 and adopt as sale co Tax Act, 1961 and adopt as sale consideration the value used by the nsideration the value used by the Stamp Valuation authorities. Stamp Valuation authorities.
M/s Mascot Constructions Pvt. Ltd. M/s Mascot Construction Hence, in light of the preceding arguments, it is held that the AO was Hence, in light of the preceding arguments, it is held that the AO was Hence, in light of the preceding arguments, it is held that the AO was correct in levying a penalty u/s 271(1)(c) on the appellant company as the correct in levying a penalty u/s 271(1)(c) on the appellant company as the correct in levying a penalty u/s 271(1)(c) on the appellant company as the latter had furnished inaccurate particulars of latter had furnished inaccurate particulars of its income by reporting as a its income by reporting as a 'Capital Receipt' an item of income which was clearly attracting a capital 'Capital Receipt' an item of income which was clearly attracting a capital 'Capital Receipt' an item of income which was clearly attracting a capital gain tax.”
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. The brief facts qua the issue in dispute relevant material on record. The brief facts qua the issue in dispute relevant material on record. The brief facts qua the issue in dispute are that the assessee had transferred its right into two at the assessee had transferred its right into two at the assessee had transferred its right into two flats by way of sale deed entered into with of sale deed entered into with tenants namely Mr. Mr. Bharat Somani and Mr. Vikram Somani in respect of Flat No. B-24 and B-23 and Mr. Vikram Somani in respect of Flat No. B and Mr. Vikram Somani in respect of Flat No. B respectively. The assessee declared a sum of Rs.2.5 The assessee declared a sum of Rs.2.5 lakhs lakhs each from hese two tenants. However, the Assessing Officer invoked section these two tenants. However, the Assessing Officer invoked section hese two tenants. However, the Assessing Officer invoked section 50C of the Act and determined the sale consideration on stamp 50C of the Act and determined the sale consideration on stamp 50C of the Act and determined the sale consideration on stamp duty value amounting to Rs.23,78,300/ duty value amounting to Rs.23,78,300/- and Rs.20,01,000/ and Rs.20,01,000/- respectively. The Assessing Officer also allowed the cost of respectively. The Assessing Officer also allowed the cost of respectively. The Assessing Officer also allowed the cost of acquisition against the said expenditure and n against the said expenditure and computed computed capital gain from both these properties totaling to Rs.40,57,280/-. The addition from both these properties totaling to Rs.40,57,280/ from both these properties totaling to Rs.40,57,280/ being sustained by the Ld. CIT(A), the Assessing Officer levied being sustained by the Ld. CIT(A), the Assessing Officer levied being sustained by the Ld. CIT(A), the Assessing Officer levied penalty u/s 271(1)(c) of the Act for furnishing inaccurate penalty u/s 271(1)(c) of the Act for furnishing inaccurate penalty u/s 271(1)(c) of the Act for furnishing inaccurate -. Before us, the particulars of income of income amounting to Rs.13,65,104/- Ld. counsel for the assessee referred to the decision of the Hon’ble Ld. counsel for the assessee referred to the decision of the Hon’ble Ld. counsel for the assessee referred to the decision of the Hon’ble High Court of Calcutta Calcutta in the case of Commissioner of Income in the case of Commissioner of Income-tax v. Madan Theatres Ltd. reported in (2013) 260 CTR 75 (Cal) wherein Madan Theatres Ltd. reported in (2013) 260 CTR 75 (Cal) where Madan Theatres Ltd. reported in (2013) 260 CTR 75 (Cal) where the Hon’ble High Court held as under: the Hon’ble High Court held as under: “3. The Revenue preferred an appeal. The learned Tribunal dismissed The Revenue preferred an appeal. The learned Tribunal dismissed The Revenue preferred an appeal. The learned Tribunal dismissed the appeal holding, inter alia, as follows: the appeal holding, inter alia, as follows: "Thus obviously, it is only on account of deeming provisions of "Thus obviously, it is only on account of deeming provisions of "Thus obviously, it is only on account of deeming provisions of section 50C, the AO has made the addition by adopting the sale section 50C, the AO has made the addition by adopting the sale section 50C, the AO has made the addition by adopting the sale
M/s Mascot Constructions Pvt. Ltd. M/s Mascot Construction consideration of Rs.5,19,77,000/ consideration of Rs.5,19,77,000/-, being the value adopted for , being the value adopted for the purpose of stamp valuation. The revenue has also not shown the purpose of stamp valuation. The revenue has also not shown the purpose of stamp valuation. The revenue has also not shown as to how the assessee could be held to have actually received to how the assessee could be held to have actually received to how the assessee could be held to have actually received this amount which is in excess of the amount of Rs.2,51,50,000/ this amount which is in excess of the amount of Rs.2,51,50,000/ this amount which is in excess of the amount of Rs.2,51,50,000/-. It has also not been shown as to whether any corresponding It has also not been shown as to whether any corresponding It has also not been shown as to whether any corresponding addition has been made in the hands of the buyer. In any case, addition has been made in the hands of the buyer. In any case, addition has been made in the hands of the buyer. In any case, the issu the issue is also now squarely covered by the decision of the e is also now squarely covered by the decision of the Coordinate Bench of this Tribunal in the case of Renu Hingorani Coordinate Bench of this Tribunal in the case of Renu Hingorani Coordinate Bench of this Tribunal in the case of Renu Hingorani (supra). In the circumstances, respectfully following the decision (supra). In the circumstances, respectfully following the decision (supra). In the circumstances, respectfully following the decision of the Coordinate Bench of this Tribunal in the case of Renu of the Coordinate Bench of this Tribunal in the case of Renu of the Coordinate Bench of this Tribunal in the case of Renu Hingorani Hingorani (supra) as also on account of the fact that the revenue (supra) as also on account of the fact that the revenue has not been able to dislodge the findings of the Ld. CIT(A) that has not been able to dislodge the findings of the Ld. CIT(A) that has not been able to dislodge the findings of the Ld. CIT(A) that the bona fides of the assessee are genuine, the findings of the ld. the bona fides of the assessee are genuine, the findings of the ld. the bona fides of the assessee are genuine, the findings of the ld. CIT(A) stand confirmed. In the circumstances, the appeal of the CIT(A) stand confirmed. In the circumstances, the appeal of the CIT(A) stand confirmed. In the circumstances, the appeal of the revenue is dismissed." venue is dismissed."
4. Mr. Niaumuddin, learned Advocate appearing for the Revenue, 4. Mr. Niaumuddin, learned Advocate appearing for the Revenue, 4. Mr. Niaumuddin, learned Advocate appearing for the Revenue, contended that the assessee had a choice to dispute the valuation on the contended that the assessee had a choice to dispute the valuation on the contended that the assessee had a choice to dispute the valuation on the basis of the deemed value, but the assessee did not take that basis of the deemed value, but the assessee did not take that basis of the deemed value, but the assessee did not take that opportunity. The assessee had a choic opportunity. The assessee had a choice or he could have litigated. The e or he could have litigated. The fact remains that the actual amount received was offered for taxation. It fact remains that the actual amount received was offered for taxation. It fact remains that the actual amount received was offered for taxation. It is only on the basis of the deemed consideration that the proceedings is only on the basis of the deemed consideration that the proceedings is only on the basis of the deemed consideration that the proceedings under Section 271(C) started. The revenue has failed to produce any iota under Section 271(C) started. The revenue has failed to produce any iota under Section 271(C) started. The revenue has failed to produce any iota of evidence that the assessee actually received one paise more than the idence that the assessee actually received one paise more than the idence that the assessee actually received one paise more than the amount shown to have been received by him. amount shown to have been received by him.” 4.1 Similarly Hon’ble Allahabad High Court in the case of Similarly Hon’ble Allahabad High Court in the case of Similarly Hon’ble Allahabad High Court in the case of Rajendra Prasad Agarwal v. Income Tax Settlement Commission & Rajendra Prasad Agarwal v. Income Tax Settlement Commission & Rajendra Prasad Agarwal v. Income Tax Settlement Commission & Ors. Writ Tax No. 660 of Ors. Writ Tax No. 660 of 2010 wherein the Hon’ble High Court held 2010 wherein the Hon’ble High Court held as under:
“24. In short, we conclude that it was legally permissible to the 24. In short, we conclude that it was legally permissible to the 24. In short, we conclude that it was legally permissible to the Settlement Commission to consider imposition of the penalty under Settlement Commission to consider imposition of the penalty under Settlement Commission to consider imposition of the penalty under Section 271(1) (c) of the Act, yet in the facts of the present case, elem Section 271(1) (c) of the Act, yet in the facts of the present case, elem Section 271(1) (c) of the Act, yet in the facts of the present case, element of concealment of income was not established. We further conclude, of concealment of income was not established. We further conclude, of concealment of income was not established. We further conclude, merely because addition may be made on the quantum side by invoking merely because addition may be made on the quantum side by invoking merely because addition may be made on the quantum side by invoking Section 50 C of the Act, it did not itself establish that such estimated Section 50 C of the Act, it did not itself establish that such estimated Section 50 C of the Act, it did not itself establish that such estimated consideration had actually passed on to the consideration had actually passed on to the petitioner. Therefore, no petitioner. Therefore, no conclusion of concealment may have arisen solely occasioned by that conclusion of concealment may have arisen solely occasioned by that conclusion of concealment may have arisen solely occasioned by that estimation of income by way of capital gains made by the Settlement estimation of income by way of capital gains made by the Settlement estimation of income by way of capital gains made by the Settlement Commission. In absence of any independent evidence to establish receipt Commission. In absence of any independent evidence to establish receipt Commission. In absence of any independent evidence to establish receipt of extra consideration of extra consideration and in absence of any finding to reject the fact and in absence of any finding to reject the fact explanation furnished by the petitioner, both as to ignorance of the sale explanation furnished by the petitioner, both as to ignorance of the sale explanation furnished by the petitioner, both as to ignorance of the sale deed executed by his Power of Attorney and also with respect to the deed executed by his Power of Attorney and also with respect to the deed executed by his Power of Attorney and also with respect to the actual consideration received, element actual consideration received, element of concealment actual consideration received, element of concealment of concealment was not was was not not established in the present case. Accordingly, the writ petition succeeds in tablished in the present case. Accordingly, the writ petition succeeds in tablished in the present case. Accordingly, the writ petition succeeds in part. The levy of penalty under Section 271(1)(c) of the Act under the part. The levy of penalty under Section 271(1)(c) of the Act under the part. The levy of penalty under Section 271(1)(c) of the Act under the M/s Mascot Constructions Pvt. Ltd. M/s Mascot Construction order dated 27.10.2010 passed by the Income Tax Settlement order dated 27.10.2010 passed by the Income Tax Settlement order dated 27.10.2010 passed by the Income Tax Settlement Commission, is set aside. Commission, is set aside.” 4.2 Further, the Co Further, the Co-ordinate Bench of the Tribunal in the case of ate Bench of the Tribunal in the case of Renu Hingorani in Renu Hingorani in ITA No. 2210/Mum/2010 also deleted the also deleted the penalty levied in respect of addition between difference of sale penalty levied in respect of addition between difference of sale penalty levied in respect of addition between difference of sale consideration as per the sale agreement and the valuation made by consideration as per the sale agreement and the valuation made by consideration as per the sale agreement and the valuation made by the stamp valuation authori the stamp valuation authority invoking section 50C of the Act. The ty invoking section 50C of the Act. The relevant finding of the Tribunal is reproduced as under: relevant finding of the Tribunal is reproduced as under: relevant finding of the Tribunal is reproduced as under:
8. We have considered the rival contentions and relevant record. We find 8. We have considered the rival contentions and relevant record. We find 8. We have considered the rival contentions and relevant record. We find that the AO had made addition of Rs.9,00,824/ that the AO had made addition of Rs.9,00,824/- being difference being difference between the sale between the sale consideration as per sale agreement and the valuation consideration as per sale agreement and the valuation made by the Stamp Valuation Authority. Thus, the addition has been made by the Stamp Valuation Authority. Thus, the addition has been made by the Stamp Valuation Authority. Thus, the addition has been made by the AO by applying the provisions of section 50C of the Act. It is made by the AO by applying the provisions of section 50C of the Act. It is made by the AO by applying the provisions of section 50C of the Act. It is evident from the assessment order that the AO has not questi evident from the assessment order that the AO has not questi evident from the assessment order that the AO has not questioned the actual consideration received by the assessee but the addition is made actual consideration received by the assessee but the addition is made actual consideration received by the assessee but the addition is made purely on the basis of deeming provisions of the Income Tax Act, 1961. purely on the basis of deeming provisions of the Income Tax Act, 1961. purely on the basis of deeming provisions of the Income Tax Act, 1961. The AO has not given any finding that the actual sale consideration is The AO has not given any finding that the actual sale consideration is The AO has not given any finding that the actual sale consideration is more than the sale consideration a more than the sale consideration admitted and mentioned in the sale dmitted and mentioned in the sale agreement. Thus it does not amount to concealment of income or agreement. Thus it does not amount to concealment of income or agreement. Thus it does not amount to concealment of income or furnishing inaccurate particulars of income. It is also not the case of the furnishing inaccurate particulars of income. It is also not the case of the furnishing inaccurate particulars of income. It is also not the case of the revenue that the assessee has failed to furnish the relevant record as revenue that the assessee has failed to furnish the relevant record as revenue that the assessee has failed to furnish the relevant record as called by the AO to disclose the primary facts. The assessee has e AO to disclose the primary facts. The assessee has e AO to disclose the primary facts. The assessee has furnished all the relevant facts, documents/material including the sale furnished all the relevant facts, documents/material including the sale furnished all the relevant facts, documents/material including the sale agreement and the AO has not doubted the genuineness and validity of agreement and the AO has not doubted the genuineness and validity of agreement and the AO has not doubted the genuineness and validity of the documents produced before him and the sale consideration r the documents produced before him and the sale consideration r the documents produced before him and the sale consideration received by the assessee. Under these facts and circumstances, it cannot be said by the assessee. Under these facts and circumstances, it cannot be said by the assessee. Under these facts and circumstances, it cannot be said that the assessee has not furnished correct particulars of income. Merely that the assessee has not furnished correct particulars of income. Merely that the assessee has not furnished correct particulars of income. Merely because the assessee agreed for addition on the basis of valuation made because the assessee agreed for addition on the basis of valuation made because the assessee agreed for addition on the basis of valuation made by the Stamp Valuation Authori by the Stamp Valuation Authority would not be a conclusive proof that ty would not be a conclusive proof that the sale consideration as per this agreement was incorrect and wrong. the sale consideration as per this agreement was incorrect and wrong. the sale consideration as per this agreement was incorrect and wrong. Accordingly the addition because of the deeming provisions does not ipso Accordingly the addition because of the deeming provisions does not ipso Accordingly the addition because of the deeming provisions does not ipso facto attract the penal ty u/s 271(1)(c). Hence in view of the decision o facto attract the penal ty u/s 271(1)(c). Hence in view of the decision o facto attract the penal ty u/s 271(1)(c). Hence in view of the decision of the Hon’ble Supreme Court in the case of CIT V/s Reliance Petroproducts the Hon’ble Supreme Court in the case of CIT V/s Reliance Petroproducts the Hon’ble Supreme Court in the case of CIT V/s Reliance Petroproducts Pvt.Ltd (supra), the penalty levied u/s 271(1)(c) is not sustainable. The Pvt.Ltd (supra), the penalty levied u/s 271(1)(c) is not sustainable. The Pvt.Ltd (supra), the penalty levied u/s 271(1)(c) is not sustainable. The same is deleted. same is deleted.
4.3 Since in the instant case also , the Assessing Officer has levied Since in the instant case also , the Assessing Officer has levied Since in the instant case also , the Assessing Officer has levied the penalty in respect of addition made on the basis of valuations ct of addition made on the basis of valuations ct of addition made on the basis of valuations made by the Stamp value authority invoking section 50C of the Act, made by the Stamp value authority invoking section 50C of the Act, made by the Stamp value authority invoking section 50C of the Act, respectfully following the above decisions, we are of the view that no espectfully following the above decisions, we are of the view that no espectfully following the above decisions, we are of the view that no M/s Mascot Constructions Pvt. Ltd. M/s Mascot Construction penalty is leviable on the difference of sale consideration assessed penalty is leviable on the difference of sale consideration assessed penalty is leviable on the difference of sale consideration assessed invoking section 50C of the Act being valuation made by the stamp voking section 50C of the Act being valuation made by the stamp voking section 50C of the Act being valuation made by the stamp valuation authority not a conclusive proof that sale consideration as valuation authority not a conclusive proof that sale consideration as valuation authority not a conclusive proof that sale consideration as per the agreement was incorrect. The addition has been made per the agreement was incorrect. The addition has been made per the agreement was incorrect. The addition has been made merely under the deeming provisions merely under the deeming provisions, which ipso facto cannot so facto cannot attract the penalty u/s 270(1)(c) of the Act. Accordingly, the penalty ttract the penalty u/s 270(1)(c) of the Act. Accordingly, the penalty ttract the penalty u/s 270(1)(c) of the Act. Accordingly, the penalty levied is cancelled. The ground No. 2 of the appeal of the assessee is . The ground No. 2 of the appeal of the assessee is . The ground No. 2 of the appeal of the assessee is allowed and therefore, the ground No allowed and therefore, the ground Nos. 1 and 3 of the appeal are . 1 and 3 of the appeal are rendered merely academic rendered merely academic, hence, we are not adjudicating upon. cating upon.
In the result, the appeal of the assessee is allowed. 5. In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.