Case Law Details
Varshaben Vipulbhai Bhalani Vs DCIT (ITAT Ahmedabad)
ITAT held that penalty cannot be levied on the difference of addition made by the Ld. AO consequent to the order passed by the Ld. CIT(A) under Section 50C of the Act, since, this is nothing but deeming provision. The Sub-Section (1) of Section 50C of the Act cannot automatically to give rise to penalty proceeding.
Section 50C of the Act would indicate that full sale consideration received by the assessee required to be considered for the purposes of computing capital gain under Section 48 of the Act, is to be replaced with the help of deeming fiction provided in this. This replacement is further subject to determination of FMV as contemplated under Section 2 of the Act. Thus, addition to the income of the assessee with the aid of Section 50C of the Act is only under deeming condition which may vary in the event a reference is made to be District Valuation Officer under Sub-Section (2) to Section 50C of the Act.
Under these circumstances, the assessee cannot be held to be liable for concealment of income or furnishing inaccurate particulars of income. The assessee may stick to the stand that whatever has been paid as consideration amount for the property, the same can only be tested by making reference by District Valuation Officer under Sub-Section (2) to Section 50C of the Act. Thus, the assessee cannot be liable for penalty under Section 271(1 )(c) of the Act when an addition is being made with the help of the deeming provision of Section 50C of the Act.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
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