September 2013
Penalty: Concealment: Section 271(1)(c): Sale of immovable property for Rs. 2,51,50,000 which was valued at Rs. 5,19,77,000 for stamp duty: Assessee computed capital gain by taking actual consideration of Rs. 2,51,50,000: AO applied section 50C and also imposed penalty u/s. 271(1)(c): Penalty not justified:
By K. B. Bhujle, Advocate
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CIT vs. Madan Theatres Ltd.; 260 CTR 75 (Cal):
The assessee had sold an immovable property for a consideration of Rs. 2,51,50,000. The said property was valued at Rs. 5,19,77,000 for the purpose of stamp duty. The assessee computed the capital gain by taking actual consideration of Rs. 2,51,50,000. The Assessing Officer computed the capital gain taking deemed consideration u/s. 50C at Rs. 5,19,77,000 being the stamp duty valuation. The assessee did not dispute the said computation as it would not have made any difference because the capital gain still remained a loss. The Assessing Officer also imposed penalty u/s. 271(1)(c) for concealment of income. The Tribunal cancelled the penalty.
On appeal by the Revenue, the Calcutta High Court upheld the decision of the Tribunal and held as under:
“Revenue having failed to produce any evidence to the effect that the assessee has actually received more amount than that shown by it on the sale of property, penalty u/s. 271(1)(c) cannot be levied simply because the Assessing Officer has worked out the capital gain by taking into account deemed sale consideration by invoking section 50C(1) instead of actual sale consideration shown by the assessee.”
