SH.PAWAN ANAND,DEHRADUN vs. ITO, DEHRADUN

This appeal is filed by the assessee against the order of the Ld. CIT(Appeals)-NFAC, Delhi dated 28.02.2024 for the AY 2016-17 in sustaining the penalty levied u/s 271(1)(c) of the Act.

We have heard the rival contentions, perused the orders of the authorities below. In this case, we noticed that an addition of Rs.10,68,000/- was made while completing the assessment u/s 143(3) r.w.s. 147 of the Act, being the difference between the stamp duty value and the actual sale consideration. The assessee purchased a flat in Dehradun for an amount of Rs.21,67,410/- out of which the sale consideration was Rs.20 lakhs and the stamp duty and other legal expenses were Rs.1,67,410/-. However, the market value as per the circle rate was Rs.30,68,000/- and therefore there was a difference of Rs.10,68,000/- between the actual consideration and stamp value and this amount was added as undisclosed income of the assessee by the Assessing Officer while completing the assessment. The Assessing Officer also initiated penalty proceedings for concealed particulars of income and levied penalty of Rs.2,93,083/-. On appeal the Ld. CIT(A) sustained the penalty.

In our considered view the difference between the stamp duty value and the actual sale consideration which was arrived on account of deeming provision u/s 50C cannot be said to be concealment of particulars of income. The assessee here neither concealed his income nor the particulars of such income so as to attract penalty u/s 271(1)(c) of the Act. Hence, we direct the Assessing Officer to delete the penalty levied u/s 271(1)(c) of the Act.

In the result, appeal of the assessee is allowed.