DHWANI MERCANTILE P.LTD,MUMBAI vs. ITO 2(1)(2), MUMBAI

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ITA 2090/MUM/2015Status: DisposedITAT Mumbai20 July 2016AY 2010-113 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that a penalty under Section 271(1)(c) should not be levied when the addition is based on the DVO's valuation, as it constitutes an estimation and lacks incriminating material for concealment or inaccurate particulars.

What were the facts?

The assessee sold a property, and the Assessing Officer (AO) invoked Section 50C, referring the valuation to the DVO. The DVO's valuation resulted in a disallowance of a portion of the claimed short-term capital loss.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when additions are based on DVO's valuation under Section 50C.

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, “J” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO & SHRI SANJAY GARG

For Appellant: Shri Rajesh Loya, Director of the assessee-company
For Respondent: Shri C.W. Angolwkar, Sr. AR
Hearing: 20.07.2016Pronounced: 20.07.2016

सुनवाई की तायीख / Date of Hearing : 20.07.2016 घोषणा की तायीख /Date of Pronouncement : 20.07.2016 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

1.

This appeal filed by the assessee on 10.4.2016 is against the order of the CIT (A)-4, Mumbai dated 22.8.2013 for the assessment year 2010-2011.

2.

The only issue raised in this appeal relates to the penalty of Rs. 6,05,700/-, which was levied by the AO u/s 271(1)(c) of the Act and confirmed by the CIT (A). 3. Before us, Ld Counsel for the assessee narrated the brief facts of the case and submitted that during the assessment proceedings, AO noticed that the assessee sold a property for a sum of Rs. 7,63,93,000/-. However, AO considered the sale consideration to the extent of Rs. 6.5 Crs. Invoking the provisions of section 50C of the Act, AO referred the property to the DVO who determined the price at Rs.6,69,60,192/-. AO quantified the difference of Rs. 83,83,499/- and restricted the short term capital loss to the same against the claim of Rs. 1,03,43,691/-. The excess claim disallowed by the AO works out to Rs. 19,60,192/-. This is the subject matter of penalty u/s 271(1)(c) of the Act.

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