Case Law Details
Satyam Print House Vs Additional/Joint/Deputy/Assistant Commissioner of Income Tax, Income Tax Officer (ITAT Mumbai)
The case of Satyam Print House versus the Additional/Joint/Deputy/Assistant Commissioner of Income Tax and the Income Tax Officer (ITAT Mumbai) revolves around the imposition of a penalty under Section 270A of the Income Tax Act, 1961. The dispute arose from the assessment year 2018-19, with the Assessee challenging the penalty imposed by the Commissioner of Income Tax (Appeals) [CIT(A)] for under-reporting income.
The Assessee contested the penalty on several grounds, primarily arguing that the addition made under Section 50C of the Act, relating to the valuation of immovable property, was based on presumptions and inferences rather than concrete evidence. They contended that the transaction occurred at the prevailing market price, and thus, there was no under-reporting of income. Additionally, they argued that the Assessing Officer did not question the actual sales consideration received by the Assessee and that the addition was purely based on deeming provisions.
During the assessment proceedings, it was found that the Assessee had purchased immovable property for INR 2,10,00,000, whereas the market value for stamp duty purposes was INR 3,23,55,630. The difference was attributed to the demolition of an existing factory building, for which the Assessee had obtained approval. Despite providing explanations, the Assessing Officer initiated penalty proceedings under Section 270A for under-reporting income.
The Assessee, however, agreed to the addition and paid the additional tax liability within the stipulated time frame. They argued that they had disclosed all material facts and should therefore be granted immunity from penalty under Section 270AA of the Act. The CIT(A) upheld the penalty, prompting the Assessee to appeal to the Income Tax Appellate Tribunal (ITAT).
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