Niraj Mithal, Lucknow V. Income Tax Officer-1(2), Lucknow

ITA 878/LKW/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92297 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 02-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Assessee Lawyers: YOGESH AGARWAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.878/LKW/2014 ASSESSMENT YEAR:2010-11 SMT. NEERJA MITHAL 1/115, VIKRAM KHAND, GOMTI NAGAR, LUCKNOW V. INCOME TAX OFFICER 1(2) LUCKNOW PAN:AFWPM7671L (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. YOGESH AGARWAL RESPONDENT BY: SHRI. R K SINGH, CIT D.R. DATE OF HEARING: 21 07 2015 DATE OF PRONOUNCEMENT: 30 07 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE APPELLANT AGAINST THE ORDER DATED 23.09.2014 OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1, LUCKNOW CONFIRMING THE PENALTY OF RS 2,18,300 LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). 2. THE LD. CIT(A) WHILE CONFIRMING THE LEVY OF PENALTY BY THE CIT HAS GIVEN THE FOLLOWING FINDING IN HIS EX-PARTE ORDER DATED 12.08.2013: I HAVE CONSIDERED THE MATTER AND PERUSED THE PENALTY ORDER AND GROUNDS OF APPEAL FILED BY THE APPELLANT. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS NOT CONTRADICTED THE FINDINGS OF THE CIT IN THE PENALTY ORDER. IT IS ALSO FOUND THAT THE APPELLATE HAS NOT FURNISHED ANY BONAFIDE EXPLANATION IN RESPECT OF THE ADDITIONS MADE BY THE CIT EITHER DURING THE PENALTY PROCEEDINGS OR APPELLATE :- 2 -: PROCEEDINGS. IN THE PENALTY ORDER, THE CIT HAS DISCUSSED THE ISSUES INVOLVED IN PROPER PERSPECTIVE. SINCE THERE IS NO INFIRMITY IN THE PENALTY ORDER, PENALTY OF RS 2,18,300 IMPOSED BY THE CIT UNDER SECTION 271(1)CIT OF THE ACT IS UPHELD. 3. ON PERUSAL OF THE GROUNDS OF APPEAL, IT IS NOTED THAT PRINCIPALLY, THERE ARE TWO GROUNDS OF APPEAL AGAINST THE ORDER OF THE LD. CIT (A) WHEREBY HE HAS CONFIRMED THE LEVY OF PENALTY WHICH IS NOW BEING CONTESTED BEFORE US: A) LEVY OF PENALTY IN RELATION TO DISALLOWANCE OF EXCESS CLAIM OF INTEREST DEDUCTION UNDER SECTION 24(B) OF THE ACT B) LEVY OF PENALTY IN RELATION TO SHORT COMPUTATION OF LONG TERM CAPITAL GAINS A. LEVY OF PENALTY IN RELATION TO DISALLOWANCE OF EXCESS CLAIM OF INTEREST DEDUCTION UNDER SECTION 24(B) OF THE ACT 4. DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT HAS CLAIMED INTEREST DEDUCTION UNDER SECTION 24(B) OF THE INCOME TAX ACT AMOUNTING TO RS 150,000/- IN RESPECT OF SELF-OCCUPIED PROPERTY WHICH WAS IN HER JOINT NAME ALONG WITH HER HUSBAND. THE ASSESSING OFFICER IN HIS ORDER PASSED UNDER SECTION 143(3) OF THE ACT HAS REDUCED THE DEDUCTION TO RS 75000/- AND THEREAFTER PENALTY WAS LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 5. DURING THE COURSE OF THE HEARING, THE LD. COUNSEL FOR THE APPELLANT HAS CONTENDED THAT THE DEDUCTION UNDER SECTION 24(B) OF THE ACT IS PROVIDED TO AN ASSESSEE WHERE SHE FULFILLS THE REQUISITE CONDITIONS. FURTHER, THE LD COUNSEL HAS CONTENDED THAT WHETHER SHE IS HOLDING THE PROPERTY INDIVIDUALLY OR JOINTLY WITH OTHER CO-OWNERS IS NOT DETERMINANT OF THE QUANTUM OF DEDUCTION THAT WILL BE PROVIDED TO HER. 6. THE LD. DR HAS PLACED RELIANCE ON THE ORDERS OF AO AND LD. CIT(A). :- 3 -: 7. IN HIS PENALTY ORDER, THE AO HAS MENTIONED THAT THE ASSESSEE HAS DISCLOSED THE PARTICULARS BUT SUCH DISCLOSURE IS NOT CORRECT, THEREFORE THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME WILLINGLY AND KNOWINGLY AND IS LIABLE FOR PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HOWEVER, THERE IS NO FINDING OF THE AO THAT THE APPELLANT HAS CONCEALED HER INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE LD. CIT(A) HAS MERELY CONFIRMED THE AOS ORDER WITHOUT ANY FURTHER FINDING. THE QUESTION IS WHERE THE APPELLANT HAS DISCLOSED THE PARTICULARS OF INCOME IN THE RETURN OF INCOME BY WAY OF DETERMINING THE ANNUAL VALUE OF THE HOUSE PROPERTY AS NIL AND CLAIMING INTEREST DEDUCTION AMOUNTING TO RS 150,000/- UNDER THE PROVISIONS OF SECTION 24(B) THE ACT, CAN IT BE SAID THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF HER INCOME. 8. IT IS NOT IN DISPUTE THAT THE APPELLANT IS THE JOINT OWNER OF THE PROPERTY AND THE PROPERTY IS UNDER SELF-OCCUPATION DURING THE YEAR. IT IS ALSO NOT IN DISPUTE THAT THE APPELLANT HAS BORROWED FUNDS AND HAS PAID INTEREST ON SUCH BORROWED FUNDS AMOUNTING TO RS 150,000/- DURING THE SUBJECT YEAR. IT IS ALSO NOT IN DISPUTE THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION UNDER SECTION 24(B) OF THE ACT WHICH SHE HAD CLAIMED IN HER RETURN OF INCOME UNDER SECTION 24(B) OF THE ACT. 9. IN THE ABOVE CONTEXT, THE LIMITED DISPUTE INVOLVED IS WHETHER, THE APPELLANT BEING THE CO-OWNER OF THE PROPERTY, BY CLAIMING DEDUCTION TO THE TUNE OF RS 150,000/- INSTEAD OF RS 75,000/- HAS CONCEALED HER INCOME OR FURNISHED INACCURATE PARTICULARS OF HER INCOME. 10. THE SECOND PROVISO OF SECTION 24(B) OF THE ACT READS AS UNDER: PROVIDED FURTHER THAT WHERE THE PROPERTY REFERRED TO IN THE FIRST PROVISO (PROPERTY REFERRED TO IN SECTION 23(2)) IS ACQUIRED OR CONSTRUCTED WITH CAPITAL BORROWED ON OR AFTER APRIL 1, 1999 AND SUCH ACQUISITION OR CONSTRUCTION IS COMPLETED WITHIN THREE YEARS FROM THE :- 4 -: END OF THE FINANCIAL YEAR IN WHICH CAPITAL WAS BORROWED, THE AMOUNT OF DEDUCTION SHALL NOT EXCEED RS 150,000/-. 11. IF ONE WERE TO READ THIS PROVISO TO SECTION 24(B) ON A STANDALONE BASIS, ONE WOULD GET THE IMPRESSION THAT THE QUANTUM OF DEDUCTION OF RS 150,000/- IS LINKED TO THE PROPERTY UNDER QUESTION AND WHERE THE PROPERTY IS JOINT OWNED BY ONE OR MORE PERSONS, THE MAXIMUM DEDUCTION TO ALL CO- OWNERS WOULD BE RESTRICTED TO RS 150,000/-. APPARENTLY, IT SEEMS THAT THE AO HAS CARRIED THE SAID IMPRESSION WHILE THE PASSING THE ASSESSMENT ORDER THOUGH THERE IS NO DISCUSSION IN HIS ORDER. 12. HOWEVER, IF ONE WERE TO READ THE ABOVE PROVISO TO SECTION 24(B) IN CONTEXT OF SECTION 22, SECTION 23(2) READ WITH SECTION 26 OF THE ACT, IT APPEARS THAT ONE HAS TO COMPUTE THE INCOME FROM HOUSE PROPERTY IN THE HANDS OF THE APPELLANT AND THE DETERMINATION OF ANNUAL VALUE AS WELL AS THE DEDUCTIONS WHERE APPLICABLE, ARE IN THE HANDS OF THE APPELLANT WHETHER SUCH INDIVIDUAL IS HOLDING THE PROPERTY IN HER OWN NAME OR JOINTLY WITH OTHER CO-OWNER. 13. IN THE ABOVE CONTEXT, IT THEREFORE APPEARS TO US THAT THE APPELLANT HAS TAKEN A PLAUSIBLE VIEW THAT SHE WAS ELIGIBLE FOR INTEREST DEDUCTION TO THE EXTENT OF RS 150,000/-. IN OUR VIEW, WHERE THE CLAIM OF THE APPELLANT IS NOT UNDER DISPUTE AND ON QUANTUM OF DEDUCTION, THE APPELLANT HAS TAKEN A PLAUSIBLE VIEW, THE AO CAN DIFFER WITH THE SAID VIEW BY WAY OF DISALLOWING THE EXCESS CLAIM BUT THE SAME CANNOT BE A BASIS FOR LEVY OF PENALTY. IN RESULT, THE LEVY OF PENALTY ON ACCOUNT OF EXCESS CLAIM OF INTEREST DEDUCTION U/S 24(B) OF THE ACT IS DELETED. B. LEVY OF PENALTY IN RELATION TO SHORT COMPUTATION OF LONG TERM CAPITAL GAINS 14. DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT HAS SOLD COMMERCIAL PROPERTY AT BELAPUR AND HAS DISCLOSED LONG TERM CAPITAL LOSS :- 5 -: AMOUNTING TO RS 12,10,870 UNDER THE HEAD CAPITAL GAINS IN HER COMPUTATION OF INCOME. THE ASSESSING OFFICER IN HIS ORDER PASSED UNDER SECTION 143(3) OF THE ACT HAS HOWEVER COMPUTED LONG TERM CAPITAL GAINS AMOUNTING TO RS 10,18,210 AND THEREAFTER PENALTY WAS LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 15. DURING THE COURSE OF THE HEARING, THE LD. COUNSEL FOR THE APPELLANT HAS CONTENDED THAT WHERE THE AO HAS COMPUTED CAPITAL GAINS UNDER SECTION 50C OF THE ACT, THE SAME CANNOT BE THE BASIS FOR LEVY OF PENALTY. IN SUPPORT OF HIS CONTENTION, HE HAS CITED THE JUDGEMENT OF MUMBAI BENCH OF ITAT IN CASE OF HARISH VOOVAYA SHETTY (ITA NO. 6383/MUM/2012) AND JUDGEMENT OF HONBLE CALCUTTA HIGH COURT IN CASE OF MADAN THEATRES 260 CTR 75. 16. THE LD DR HAS PLACED RELIANCE ON THE ORDERS OF AO AND LD CIT(A). 17. ON PERUSAL OF THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT, IT IS NOTED THAT THE AO HAS RECOMPUTED THE CAPITAL GAINS BY MAKING THE FOLLOWING ADJUSTMENTS: AS SUBMITTED BY THE APPELLANT (RS) AS CONSIDERED BY THE AO (RS) ADJUSTMENT (RS) SALE CONSIDERATION 53,59,000 64,36,500 SALE CONSIDERATION INCREASED BY RS 10,77,500 COST OF ACQUISITION AND IMPROVEMENT 45,76,000 38,32,240 COST REDUCED BY RS 7,43,760 18. AFTER CONSIDERING THE ABOVE ADJUSTMENTS, THE AO HAS RECOMPUTED THE CAPITAL GAINS AT RS 10,18,210/- AFTER PROVIDING THE NECESSARY INDEXATION. :- 6 -: 19. IT WOULD BE RELEVANT TO EXAMINE IN DETAIL EACH OF THE ABOVE TWO ADJUSTMENTS IN ORDER TO DETERMINE WHETHER THE SAME CALL FOR LEVY OF PENALTY. ADJUSTMENT ON ACCOUNT OF INCREASE IN SALE CONSIDERATION BY RS.10,77,500 20. THE AO HAS CONSIDERED SALE CONSIDERATION AS PER DM CIRCLE RATE AMOUNTING TO RS 64,36,500, BEING THE MARKET VALUE TO BE CONSIDERED AS PER PROVISIONS OF SECTION 50C OF THE ACT AS AGAINST SALE CONSIDERATION OF RS 53,59,000 RECEIVED BY THE APPELLANT. IN THE PENALTY ORDER, THE AO HAS MENTIONED THAT WHEN THE ASSESSEE WAS CORNERED IN THIS REGARD, THE ASSESSEE SUBMITTED A REVISED COMPUTATION OF INCOME TAKING MARKET VALUE (THE DM CIRCLE RATE) AS FULL VALUE OF CONSIDERATION UNDER SECTION 50C OF THE ACT. THE LD. CIT(A) HAS MERELY CONFIRMED THE ORDER OF THE AO WITHOUT ADJUDICATING ON THE MERITS OF LEVY OF PENALTY. 21. ON PERUSAL OF THE PAPERBOOK, IT IS NOTED THAT THE APPLICANT HAS DISCLOSED IN HER COMPUTATION OF INCOME BOTH THE FIGURES OF ACTUAL SALE CONSIDERATION OF RS 53,59,000 AS WELL AS DM CIRCLE RATE OF RS 64,36,500. HOWEVER, WHILE COMPUTING THE CAPITAL GAINS/LOSS, THE FIGURE OF RS 53,59,000 HAS BEEN CONSIDERED BY THE APPELLANT. THUS, THE PRIMARY FACTS IN TERMS OF ACTUAL SALES CONSIDERATION AS WELL AS VALUE AS PER DM VALUE WERE SUBMITTED AND NOT DISPUTED BY THE AO. FURTHER, IT IS NOTED FROM THE COPIES OF THE SUBMISSIONS FILED BEFORE THE AO (AS CONTAINED IN THE PAPERBOOK) WHEREBY THE APPELLANT HAS STATED THAT THE CALCULATION IN THE ANNEXED SHEET (COMPUTATION OF INCOME) HAS BEEN MADE ON THE BASIS OF VALUE AS PER DM CIRCLE RATE. LATER ON, IT IS NOTED FROM THE ORDER OF THE AO THAT THE APPELLANT HAS NOT DISPUTED THE ADOPTION OF STAMP DUTY VALUATION AND CONCEDED THE SAME BEFORE THE AO. FURTHER, NO APPEAL APPARENTLY HAS BEEN FILED AGAINST THE ORDER OF THE AO. IT IS ALSO NOTED THAT IN EITHER CASE WHERE AO CONSIDERS :- 7 -: SALE CONSIDERATION AT RS 53,59,000 OR RS 64,36,500, AND WHERE THE COST OF ACQUISITION AND IMPROVEMENT IS TAKEN AS PER THE APPELLANT, THE RESULTANT FIGURE AFTER PROVIDING THE INDEXATION BENEFIT WOULD BE A CAPITAL LOSS, THE SUBSTITUTION OF DM CIRCLE RATE AS AGAINST ACTUAL SALE CONSIDERATION WOULD BE REVENUE NEUTRAL. IN THIS VIEW OF THE MATTER, WHERE THE APPELLANT HAS SUBMITTED ALL PRIMARY FACTS WHICH ARE NOT DISPUTED BY THE AO, IT CANNOT BE SAID THAT THE APPELLANT HAS CONCEALED HER INCOME OR FURNISHED INACCURATE PARTICULARS OF HER INCOME. 22. FURTHER, REFERENCE CAN BE DRAWN TO THE PROVISIONS OF SECTION 50C OF THE ACT. THE PROVISIONS OF SECTION 50C(1) OF THE ACT PROVIDES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. 23. ON READING OF SECTION 50C(1) OF THE ACT AND APPLYING THE SAME IN CONTEXT OF SUBJECT FACTS, IT IS CLEAR THAT IT IS A DEEMING PROVISION WHERE THE VALUE ADOPTED FOR DETERMINING THE STAMP DUTY BY THE STATE GOVERNMENT AUTHORITY IS CONSIDERED AND REPLACED FOR THE ACTUAL SALE CONSIDERATION ACCRUED/RECEIVED BY THE APPELLANT. IT IS NOT THE CASE OF THE DEPARTMENT THAT THE APPELLANT HAS RECEIVED MORE THAN THE VALUE DISCLOSED AS SALES CONSIDERATION AND HAS FAILED TO DISCLOSE THE SAME IN HER RETURN OF INCOME. WHERE THE ACTUAL SALE CONSIDERATION IS LESS THAN THE STAMP DUTY VALUE AND BY VIRTUE OF A DEEMING FICTION, THE LATTER IS DEEMED BY THE AO TO BE THE FULL VALUE OF CONSIDERATION, IT CANNOT BE SAID THAT THE APPELLANT HAS CONCEALED HER INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. :- 8 -: 24. IN THIS REGARD, WE LIKE TO REFER TO THE DECISION OF THE COORDINATE BENCH IN CASE OF RENU HINGORANI VS. ACIT (ITAT MUMBAI) ITA NO. 221 0/MUM/2010 WHERE ON IDENTICAL FACTS AND ISSUES, IT WAS HELD AS UNDER: WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RELEVANT RECORD. WE FIND THAT THE AO HAD MADE ADDITION OF RS.9,00,824/- BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER SALE AGREEMENT AND THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY. THUS, THE ADDITION HAS BEEN MADE BY THE AO BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BASIS OF DEEMING PROVISIONS OF THE INCOME TAX ACT, 1961. THE AO HAS NOT GIVEN ANY FINDING THAT THE ACTUAL SALE CONSIDERATION IS MORE THAN THE SALE CONSIDERATION ADMITTED AND MENTIONED IN THE SALE AGREEMENT. THUS IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS FAILED TO FURNISH THE RELEVANT RECORD AS CALLED BY THE AO TO DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNISHED ALL THE RELEVANT FACTS, DOCUMENTS/MATERIAL INCLUDING THE SALE AGREEMENT AND THE AO HAS NOT DOUBTED THE GENUINENESS AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICULARS OF INCOME. MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BASIS OF VALUATION MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS INCORRECT AND WRONG. ACCORDINGLY THE ADDITION BECAUSE OF THE DEEMING PROVISIONS DOES NOT IPSO FACTO ATTRACT THE :- 9 -: PENALTY U/S 271(1)(C ). HENCE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S RELIANCE PETROPRODUCTS PVT.LTD (SUPRA), THE PENALTY LEVIED U/S 271(1)( C ) IS NOT SUSTAINABLE. THE SAME IS DELETED. 25. THE LD COUNSEL FOR THE APPELLANT HAS FURTHER DRAWN OUR ATTENTION TO THE SUBSEQUENT DECISION OF THE COORDINATE BENCH IN CASE OF HARISH VOOVAYA SHETTY (ITA NO. 6383/MUM/2012) FOLLOWING THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN CASE OF MADAN THEATRES 260 CTR 75 WHERE IT WAS HELD AS UNDER: WHERE THE ADDITION IS MADE ON ACCOUNT OF PROVISIONS OF SECTION 50C AND THERE IS NO MATERIAL ON RECORD TO SHOW THAT ASSESSEE HAS RECEIVED MORE AMOUNT THAN THAT SHOWN BY IT ON SALE OF PROPERTY, THE PENALTY UNDER SECTION 271(1)(C) CANNOT BE LEVIED. 26. AFTER DETAIL EXAMINATION OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 50C ARE DEEMING PROVISIONS AND THERE IS NOTHING THAT HAS BEEN BROUGHT ON RECORD BY THE DEPARTMENT THAT THE APPELLANT HAS RECEIVED SALE CONSIDERATION HIGHER THAN WHAT HAS BEEN DISCLOSED IN THE SALES AGREEMENT AND IN HER RETURN OF INCOME. ALL THE PRIMARY FACTS HAVE BEEN DULY DISCLOSED BY THE APPELLANT INCLUDING DM CIRCLE RATE AND THE SAME HAVE NOT BEEN DISPUTED. THE FACT THAT THE ASSESSEE AGREED TO THE ADDITION IS NOT CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER AGREEMENT WAS INCORRECT AND WRONG. WE ARE THEREFORE OF THE VIEW THAT WHERE THE ACTUAL SALE CONSIDERATION IS REPLACED BY THE SALE CONSIDERATION DETERMINED AS PER DM CIRCLE RATE UNDER THE DEEMING PROVISIONS OF SECTION 50C, THE SAME CANNOT BE BASIS FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HENCE, THE PENALTY ON THIS ACCOUNT IS DELETED. :- 10 -: ADJUSTMENT ON ACCOUNT OF COST OF ACQUISITION/IMPROVEMENT AMOUNTING TO RS.7,43,760 27. FROM THE PERUSAL OF THE ASSESSMENT ORDER, WE FOUND THAT COST OF ACQUISITION AND COST OF IMPROVEMENT HAS BEEN REDUCED FROM RS 45,76,000 TO RS 38,32,240 RESULTING IN DISALLOWANCE OF COST BY RS 7,43,760 FOR WANT OF DOCUMENTARY EVIDENCE. AS FAR AS PENALTY IS CONCERNED, NOTHING HAS BEEN BROUGHT ON RECORD AS TO WHETHER THE APPELLANT HAS CONCEALED ANY INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME. ON ACCOUNT OF NON- ACCEPTANCE OF THE EXPLANATION OF THE ASSESSEE, THE ADDITIONS CAN BE MADE BUT PENALTY UNDER SECTION 271(1)(C) CANNOT BE LEVIED. 28. IN THE RESULT, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE PENALTY OF RS 2,18,300. THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:30 TH JULY, 2015 VSY COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR