The Income Tax Appellate Tribunal (ITAT), Ahmedabad set aside penalty imposed under Section 271(1)(c) of the Income Tax Act,1961 as there was no payment made above purchase price of asset.
The present appeal has been filed by the assessee, Dipakkumar Ishwarlal Panchal against order passed by the Commissioner of Income-Tax (Appeals) Ahmedabad confirming the levy of penalty for concealing/furnishing inaccurate particulars of income, under section 271(1)(c) of the Income Tax Act, 1961.
The penalty was levied on account of addition made amounting to Rs.3,85,000 to the income of the assessee on account of a property purchased by the assessee for consideration less than its stamp duty value, as per the provisions of section 56(2)(x) of the Act. The jantri value /stamp duty value of the property purchased by the assessee being Rs.67,27,000, and the consideration actually paid by the assessee being Rs.48 lakhs.
The assesse’s share in the property being 20%, difference in the afore stated values to this extent therefore, amounting to Rs.3,85,000/-, was added to the income of the assessee and penalty levied thereon u/s 271(1)(c) of the Act for concealing/furnishing inaccurate particulars of income, @ 100% of the tax sought to be evaded thereon amounting to Rs.1,18,965.
The Bench consisting of Annapurna Gupta, Accountant Member and Madhumita Roy, Judicial Member held that “In the facts and circumstances, where the assessee had objected to the invocation of section 56(2)(x) of the Act in its case for the purpose of making addition and had given a reason for the same, which the Revenue has not found to be false or not bona fide and in any case the addition having been made on account of deeming fiction, the assessee having not been found to have actually made any payment in excess of the such price, we are of the view that the assessee cannot be said to have concealed or furnished inaccurate particulars of income so as to attract levy of penalty under section 271(1)(c) of the Act amounting to Rs.1,18,965/-.”
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