Dilip N. Shroff Vs JCIT (Supreme Court of India)
In Supreme Court of India, the case concerns imposition of penalty under Section 271(1)(c) of the Income Tax Act, 1961 on an assessee HUF for allegedly furnishing inaccurate particulars of income. The assessee had declared long-term capital loss arising from sale of a 1/4th undivided share in a Mumbai property, supported by a valuation report from a registered valuer estimating the fair market value as on 01.04.1981 at ₹2.52 crore. The Assessing Officer referred the matter to a District Valuation Officer (DVO), who determined a significantly lower value of approximately ₹1.44 crore based on selected sale instances. Relying on the DVO’s report, the Assessing Officer recomputed capital gains and initiated penalty proceedings, ultimately imposing penalty for furnishing inaccurate particulars.
The assessee contended that all material facts were disclosed and that the difference arose solely due to differing valuation methods. It was argued that reliance on a registered valuer’s report constituted a bona fide explanation and did not amount to concealment or inaccurate particulars. However, the penalty was upheld by the Commissioner of Income Tax and the Income Tax Appellate Tribunal, which held that the valuer’s methodology was flawed and that incorrect valuation resulted in inaccurate disclosure.
