IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1820/MDS/2011 (ASSESSMENT YEARS : 2006-07) THE INCOME TAX OFFICER, BUSINESS WARD XV(1), CHENNAI - 600 034 . (APPELLANT) V. M/S GLOBE SHOE COMPANY, NO.38, MADHAVA ROAD, MAHALINGAPURAM, CHENNAI - 600 034 . PAN : AAGFG7784B (RESPONDENT) APPELLANT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL RESPONDENT BY : SHRI ANIL NAIR , CA DATE OF HEARING : 18.01.2012 DATE OF PRONOUNCEMENT : 18.01.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, IT ASSAILS O RDER DATED 30.8.2011 OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-XII, CHENNAI, DELETING THE PENALTY LEVIED ON THE ASSESSE E UNDER SECTION 271(1)(C) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE A CT'). I.T.A. NO. 1820/MDS/11 2 2. SHORT FACTS APROPOS ARE THAT ASSESSEE HAD FILED RETURN FOR IMPUGNED ASSESSMENT YEAR ADMITTING NIL INCOME. DUR ING THE RELEVANT PREVIOUS YEAR, ASSESSEE HAD TRANSFERRED VACANT LAND S AT GUDUVANCHERY, CHENNAI, AND FOR SUCH LAND TRANSFERRE D, THE SALE CONSIDERATION SHOWN IN THE RETURN OF INCOME WAS ` 41,29,500/- AND ` 80,76,100/- RESPECTIVELY. HOWEVER, A.O., ON GOING THROUGH THE REGISTERED DOCUMENT, NOTICED THAT THE VALUE ADOPTED BY STAMPING AUTHORITY FOR THE PURPOSE OF REGISTRATION OF THE DO CUMENT WAS ` 41,33,280/- AND ` 1,02,02,400/-. ASSESSING OFFICER ENDEAVOURED TO SUBSTITUTE SUCH AMOUNTS WITH WHAT WAS SHOWN BY THE ASSESSEE FOR COMPUTING CAPITAL GAINS AND THIS WAS NOT OBJECTED B Y THE ASSESSEE. THE ASSESSMENT WAS ACCORDINGLY COMPLETED. THEREAFT ER, ASSESSEE WAS PUT ON NOTICE WHY PENALTY UNDER SECTION 271(1)( C) OF THE ACT SHOULD NOT BE LEVIED FOR HAVING GIVEN A WRONG VALUE AS SALE CONSIDERATION. REPLY OF THE ASSESSEE WAS THAT IT H AD CO-OPERATED WITH THE ASSESSING AUTHORITY DURING THE ASSESSMENT PROCEEDINGS AND THERE WAS NO INTENTION TO CONCEAL ANY INCOME. AS P ER THE ASSESSEE, THE ADDITION WAS ONLY DUE TO APPLICATION OF SECTION 50C OF THE ACT I.T.A. NO. 1820/MDS/11 3 WHICH WAS NOT MANDATORY IN ALL CASES AND THEREFORE, LEVY OF PENALTY ON SUCH ADDITION WAS NOT JUSTIFIED. HOWEVER, THE A.O. WAS NOT IMPRESSED. ACCORDING TO HIM, ASSESSEE DID NOT FURN ISH COPIES OF THE REGISTERED SALE DEED AND JUST FOR A REASON THAT ASS ESSEE HAD CO- OPERATED DURING ASSESSMENT PROCEEDINGS, IT COULD NO T BE CONCLUDED THAT THERE IS NO INTENTION TO CONCEAL INCOME. ACCO RDING TO HIM, COPIES OF THE SALE DEED WERE AVAILABLE ONLY SINCE THE STAM P VALUING AUTHORITY PROVIDED IT ON HIS REQUEST. HE, THEREFORE, CONCLUD ED THAT ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND FURNISHED I NACCURATE PARTICULARS WITH REGARD TO COMPUTATION OF CAPITAL G AINS. A MINIMUM PENALTY OF ` 4,65,718/- WAS LEVIED UNDER SECTION 271(1)(C) OF T HE ACT. 3. IN ITS APPEAL BEFORE LD. CIT(APPEALS), ARGUMENT OF THE ASSESSEE WAS THAT WHAT WAS STATED IN THE RETURN OF INCOME, VIZ. ` 41,29,500/- AND ` 80,76,100/- WAS THE ACTUAL SALE CONSIDERATION. ACC ORDING TO IT, SUCH SALE CONSIDERATION WAS LOWER THAN THE VALUE AD OPTED BY THE STAMP VALUING AUTHORITY DUE TO MARKET CONDITIONS AN D IT HAD NOT CHALLENGED THE ADDITION MADE BY THE A.O. TO AVOID L ITIGATION. ACCORDING TO ASSESSEE, NOTHING WAS BROUGHT ON RECOR D BY THE A.O. TO I.T.A. NO. 1820/MDS/11 4 SHOW THAT ANY AMOUNT THAN WHAT WAS STATED BY THE AS SESSEE WAS RECEIVED BY IT. LD. CIT(APPEALS) WAS APPRECIATIV E OF THIS CONTENTION. ACCORDING TO HIM, EVERY ADDITION OF INCOME MADE IN THE ASSESSMENT NEED NOT NECESSARILY ATTRACT PENALTY UNDER SECTION 271(1)(C) OF THE ACT. JUST BECAUSE THE A.O. HAD SUBSTITUTED THE VAL UE OBTAINED FROM SUB-REGISTRARS OFFICE AS FAIR MARKET PRICE, IT COU LD NOT BE CONCLUDED THAT THERE WAS ANY INACCURATE PARTICULARS FURNISHED BY THE ASSESSEE. RELYING ON THE DECISION OF CO-ORDINATE BENCH OF THI S TRIBUNAL IN THE CASE OF CIT V. N. MEENAKSHI (125 TTJ 856), LD. CIT( APPEALS) OPINED THAT THE GUIDELINE VALUE ADOPTED BY THE REGISTRATIO N DEPARTMENT WAS NOT A CONCLUSIVE PROOF REGARDING MARKET PRICE. WIT H THIS OBSERVATION, HE DELETED THE PENALTY. 4. NOW BEFORE US, LEARNED D.R., STRONGLY ASSAILING THE ORDER OF LD. CIT(APPEALS) , SUBMITTED THAT ASSESSEE HAD NEVER CO -OPERATED BUT, ON THE OTHER HAND, FAILED TO FURNISH COPIES OF THE SALE DEED AND THIS WAS DONE WITH AN INTENTION OF CONCEALING THE GUIDEL INE VALUE ADOPTED FOR REGISTRATION PURPOSES. ACCORDING TO HIM, SUCH AN ACTION OF THE ASSESSEE BY ITSELF SHOWED THAT IT HAD NO INTENTION TO RETURN THE CORRECT INCOME. BUT, FOR THE EFFORTS OF THE A.O. IN OBTAIN ING COPIES OF THE SALE I.T.A. NO. 1820/MDS/11 5 DEED FROM THE REGISTERING AUTHORITY, THE CORRECT CA PITAL GAINS COULD NOT HAVE BEEN WORKED OUT. THEREFORE, AS PER THE LEARNE D D.R., ASSESSEE HAD NOT DISCLOSED PARTICULARS OF INCOME IN FULL, AN D WAS GUILTY OF CONTUMACIOUS CONDUCT. 5. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. NO DOUBT, ASSESSEE HAD RETURNED IN ITS RETURN OF IN COME CAPITAL GAINS AS NIL AND HAD SHOWN SALE CONSIDERATION RECEIVED ON SALE OF LANDS AS ` 41,29,500/- AND ` 80,76,100/-. IT IS ALSO NOT DISPUTED THAT THE VALU E ADOPTED ON THE SAID PROPERTIES BY THE STAMP AUTHORI TIES WERE ` 41,33,280/- AND ` 1,02,02,400/-. AS PER THE A.O., ASSESSEE DID NOT GIVE COPIES OF THE SALE DEED DESPITE VARIOUS REQUES TS FROM HIS SIDE. IT MIGHT BE TRUE THAT THE ASSESSEE DID NOT FURNISH COP IES OF THE SALE DEED AND THE ASSESSMENT WAS COMPLETED SUBSTITUTING THE VALUE AS PER THE REGISTERING AUTHORITY, IN ACCORDANCE WITH T HE MANDATE UNDER SECTION 50C OF THE ACT. SECTION 50C OF THE ACT CAL LS FOR SUBSTITUTION OF THE ACTUAL CONSIDERATION ON A TRANSFER, WITH TH E VALUE ADOPTED BY AN AUTHORITY OF STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY FOR CALCULATION OF CAPITAL GAINS. BUT, THE ACTUAL I.T.A. NO. 1820/MDS/11 6 CONSIDERATION RECEIVED BY THE ASSESSEE WILL NOT GET ALTERED BY SUCH SUBSTITUTION. IT IS ONLY FOR THE PURPOSE OF COMPUT ATION OF CAPITAL GAINS, THE SUBSTITUTION IS DONE BY THE ASSESSING OFFICER. CLAUSE (2) OF SECTION 50C CLEARLY GIVES THE ASSESSEE A RIGHT TO C LAIM BEFORE ASSESSING OFFICER THAT THE VALUE ADOPTED BY THE STA MP VALUATION AUTHORITY EXCEEDED FAIR MARKET VALUE OF THE PROPERT Y AS ON THE DATE OF TRANSFER. IT MIGHT BE TRUE THAT THE ASSESSEE HAS N OT EXERCISED SUCH OPTION FOR A REASON THAT IT DID NOT WANT TO PROLONG LITIGATION. WE CANNOT ALSO SAY THAT THE ASSESSEE WAS NON-COOPERATI VE JUST BECAUSE THE REGISTERED SALE DEED COPIES WERE NOT FURNISHED. SALE DEEDS IN GENERAL ARE COLLECTED BY THE BUYERS AND UNLESS BUYE RS GIVE A COPY TO SELLERS, IT MAY NOT BE EASY FOR A SELLER TO GET COP IES THEREOF. JUST BECAUSE THERE IS A SUBSTITUTION OF VALUATION MENTIO NED IN SECTION 50C OF THE ACT AS THE FAIR VALUE, WE CANNOT SAY THAT TH ERE WAS ANY CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS. AS NOTED BY LD. CIT(APPEALS) , IT IS NOT THAT IN EVERY CASE, WHERE THERE IS AN ADDITION THAT HAS TO BE A LEVY OF PENALTY. WE C ANNOT SAY THAT THE ASSESSEE WAS GUILTY OF FURNISHING INACCURATE PARTIC ULARS OR CONCEALMENT SO AS TO ATTRACT PENALTY UNDER SECTION 271(1)(C) OF THE I.T.A. NO. 1820/MDS/11 7 ACT. WE CANNOT FIND ANY REASON TO INTERFERE WITH T HE ORDER OF LD. CIT(APPEALS) . 6. IN THE RESULT, APPEAL FILED BY THE REVENUE STAND S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 18 TH JANUARY, 2012. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 18 TH JANUARY, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-XII, CHENNAI-34 (4) CIT-X, CHENNAI (5) D.R. (6) GUARD FILE