Penalty U/s. 271(1)(c) not justified based on mere high stamp duty valuation of property

ITO Vs. Shri Ajay Sharma (ITAT Delhi)

Where assessee had offered actual amount received on sale of property for taxation, revenue authorities were not justified in passing penalty order under section 271(1)(c) by adopting higher sale consideration under section 50C on basis of stamp duty valuation of said property.

The assessee has disclosed all the relevant facts of sale of the property to the Revenue Department. The assessee declared the sale consideration of Rs. 1,27,50,000 as per sale deed and also offered the short term capital gain for taxation. The A.O. however, applied the deeming provisions of Section 50C of the I.T. Act, for the purpose of making the addition. Thus, the A.O. did not bring any positive evidence on record to show that assessee has concealed particulars of income or furnished any inaccurate particulars. The valuation of the Stamp Valuation Authority is not a conclusive evidence of receipt of the money by assessee over and above what is recorded in the sale deed. The A.O. has not brought any concrete evidence of concealment of income in the order. The A.O. at the stage of assessment, simply applied the deeming provisions of Section 50C of the I.T. Act without bringing any evidence on record for concealment of income or furnishing inaccurate particulars by the assessee. In the absence of any positive evidence with respect to concealment of income, there were no justification for the A.O. to levy penalty in the matter.

Full Text of the ITAT Order is as follows:-