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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI RAJENDRA, ACCOUNTATN MEMBER & SHRI SAKTIJIT DEY
आदेश / ORDER शक्तिजीि दे, न्याययक सदस्य के द्वारा / PER SAKTIJIT DEY, J.M.
The present appeal preferred by the Revenue is directed against the impugned order dated 28th August 2013, passed by the learned Commissioner (Appeals)–19, Mumbai, deleting the penalty imposed
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.
Briefly the facts are, the assessee a company filed its return of income for the assessment year under consideration on 29th November 2006, declaring loss of ` 12,80,636, under the normal provisions and book profit of ` 73,03,098 under section 115JB of the Income Tax Act, 1961 (for short "the Act"). During the assessment proceedings, the Assessing Officer, on verifying the material on record, found that the assessee, during the relevant previous year, has sold two office premises at Prime Plaza, Santacruz, Mumbai, for a declared sale consideration of ` 2,07,90,000, for each of the office premises. Whereas, the Dy. Registrar, Andheri, Mumbai, while registering the sale documents has valued each of the flat at ` 2,23,87,054, for stamp duty purpose. Therefore, alleging that sale consideration shown by the assessee is lesser than the market value by ` 15,97,054, in respect of each flat the Assessing Officer sought to invoke the provisions of section 50C of the Act. Though the assessee objected to invoking the provisions of section 50C, but the Assessing Officer, rejecting assessee’s contention, invoked the provisions of section 50C of the Act and considered the total sale consideration for the two flats of ` 4,47,74,108, being the value adopted by the registering authority for stamp duty purpose. This resulted in addition of ` 31,94,108, as short
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.
The learned Commissioner (Appeals), after considering the submissions of the assessee, observed that the assessee has furnished all particulars of the transactions relating to the sale of the property as well as value adopted by the stamp valuation authority. Hence, question of furnishing of inaccurate particulars of income does not arise. Further, he observed that the issue whether the value adopted by the stamp valuation authority for stamp duty purpose is the actual consideration received by the assessee is a debatable issue in view of the deeming provisions of section 50C of the Act. Hence, it cannot be said that the assessee has furnished inaccurate particulars of income. On the aforesaid observation, he deleted the imposition of penalty.
When the case was called for hearing, none appeared on behalf of the assessee. Therefore, having heard the learned Departmental Representative and on a perusal of the material available on record, we do not find any infirmity in the order of the learned Commissioner (Appeals) in deleting the penalty imposed under section 271(1)(c) of the Act. As can be seen, the addition made on account of short term capital gain was under section 50C, as a result of the valuation made by the stamp valuation authority for stamp duty purpose. On a plain reading of the aforesaid provision, it is absolutely clear that in a case
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.