DCIT 9(1), MUMBAI vs. BHARAT HOMES LTD, MUMBAI

आदेश / ORDER शक्तिजीि दे, न्याययक सदस्य के द्वारा / PER SAKTIJIT DEY, J.M.

BHARAT HOMES LIMITED 2 under section 271(1)(c) of the Income Tax Act, 1961 (for short "the Act") for the assessment year 2006–07.

BHARAT HOMES LIMITED 3 term capital gain. Being aggrieved of such addition, though the assessee preferred an appeal before the learned Commissioner (Appeals), but as it appears, the first appellate authority confirmed the application of provisions of section 50C of the Act. On the basis of addition made, the Assessing Officer initiated proceedings under section 271(1)(c) of the Act alleging furnishing of inaccurate particulars of income and issued a show cause notice to the assessee. Though, the assessee in its explanation requested for dropping the penalty proceedings by stating that the assessee has not furnished inaccurate particulars of income and the addition was as a result of addition made by invoking the provisions of section 50C of the Act but the Assessing Officer, rejecting the explanation of the assessee, passed an order dated 25th March 2011, imposing penalty under section 271(1)(c) of the Act for an amount of ` 10,75,136, being 100% of the tax sought to be evaded. Being aggrieved of the penalty order, the assessee preferred appeal before the first appellate authority, inter–alia, on the ground that when the addition has been made by applying the provisions of section 50C of the Act, it is a debatable issue, hence, penalty is not imposable. In this context, he relied upon the decision of the Hon'ble Rajasthan High Court in CIT v/s Harshvardhan Chemicals & Minerals Ltd., 259 ITR 212 (Raj.). He also relied upon the decision of the Hon'ble Supreme Court in CIT v/s Reliance Petroproducts Pvt. Ltd., [2010] 322 ITR 158 (SC), to submit

BHARAT HOMES LIMITED 4 that making of an legally inadmissible claim by itself would not lead to a case of furnishing of inaccurate particulars of income.

BHARAT HOMES LIMITED 5 where the declared sale consideration by the assessee is lesser than the value adopted by the stamp valuation authority for stamp duty purpose such value shall be the sale consideration deemed to have been received by the assessee of course, subject to the provisions contained under sub–sections (2) and (3) of the Act. Thus, from the aforesaid provisions, it is clear that for applying the said provision, the Assessing Officer need not have to establish whether actual sale consideration received by assessee is the value adopted by the stamp valuing authority for stamp duty purpose. However, as far as imposition of penalty under section 271(1)(c) of the Act is concerned, the Assessing Officer has to prove the fact that the assessee actually received as sale consideration, the amount determined as the value for stamp duty purpose. There is not even a single evidence brought on record by the Assessing Officer which could even remotely establish that the assessee has received anything over and above the declared sale consideration. Merely because the addition was made by applying the provisions of section 50C of the Act on the basis of value determined by the stamp valuation authority, the assessee cannot be saddled with penalty under section 271(1)(c) of the Act either for furnishing of inaccurate particulars of income or for concealment of income. Moreover, in the present case, the Assessing Officer has imposed penalty for furnishing inaccurate particulars of income. However, as could be seen, the assessee has furnished all particulars

BHARAT HOMES LIMITED 6 relating to the sale of property before the Assessing Officer. In these circumstances, the allegation by the Assessing Officer that the assessee has furnished inaccurate particulars of income is without any substance. In view of the aforesaid, we do not see any reason to interfere with the order of the learned Commissioner (Appeals) and consequently, the same is hereby upheld.