DCIT 22(2), NAVI MUMBAI vs. NANDITA MIRANI, MUMBAI

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ITA 5172/MUM/2012Status: DisposedITAT Mumbai22 March 2017AY 2006-073 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that an addition made by the AO based on the deeming provision of Section 50C, which relies on stamp duty valuation, does not automatically attract penalty under Section 271(1)(c). The addition alone does not conclusively prove the original sale consideration was incorrect.

What were the facts?

The assessee sold an immovable property and offered capital gain based on Rs. 5.00 lakhs sale consideration. The AO, however, adopted the stamp duty valuation of Rs. 50,02,000/- as the sale consideration under Section 50C, leading to an addition of Rs. 45,02,000/-. Subsequently, the AO levied penalty under Section 271(1)(c) on this addition.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied solely on an addition made by the AO based on the deeming provisions of Section 50C without proving concealment of income or furnishing inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” Bench, Mumbai

Before: Shri B.R. Baskaran (AM)& Shri Ravish Sood (JM)

Hearing: 22.3.2017Pronounced: 22.3.2017

O R D E R Per B.R. Baskaran (AM) :-

The revenue has filed this appeal challenging the order dated 15-05-2012 passed by Ld CIT(A)-33, Mumbai deleting the penalty of Rs.10,10,249/- levied by the AO u/s 271(1)(c) of the Act for the assessment year 2006-07.

2.

None appeared on behalf of the assessee despite service of notice by RPAD. Hence we proceed to dispose of the appeal ex-parte, without the presence of the assessee.

3.

We have heard Ld D.R and perused the record. The facts relating to the case are discussed in brief. During the year under consideration, the assessee sold an immovable property for a sum of Rs.5.00 lakhs and accordingly offered capital gain thereon by taking the sale consideration as Rs.5.00 lakhs. The AO

2 Ms. Nandita Mirani noticed that the stamp duty valuation of the property stood at Rs.50,02,000/- and hence he recomputed the capital gain by adopting the sale consideration as Rs.50,02,000/- in terms of sec. 50C of the Act. Later the assessing officer levied penalty u/s 271(1)(c) of the Act to the tune of Rs.10,10,249/- on the amount of Rs.45,02,000/-, being the difference amount of sale consideration adopted in terms of sec. 50C of the Act. The Ld CIT(A), however, deleted the penalty by holding the addition of Rs.45,02,000/- to the sale consideration has been made by the AO on technical ground by applying the provisions of sec.50C of the Act and the same would not attract penalty u/s 271(1)(c) of the Act. Aggrieved by the decision of Ld CIT(A), the revenue has filed this appeal.

4.

We notice that an identical issue was considered by co-ordinate bench of Tribunal in the case of Renu Hingorani (ITA No.2210/Mum/2010 dated 22-12- 2010), wherein the Tribunal has expressed the view that merely because the assessing officer made the addition on the basis of valuation made by the Stamp Valuation Authority, the same would not conclusively prove that the sale consideration as per the agreement was incorrect and wrong. It was further held that the addition made on account of deeming provision does not ipso facto attract penalty u/s 271(1)(c) of the Act.

5.

We notice that the Ld CIT(A) has also taken identical view on this matter and hence we do not find any reason to interfere with his order. Accordingly we confirm the order passed by Ld CIT(A).

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