MILIND SHANKARRAO KANGALI,SOMALWADA MANISH NAGAR NAGPUR V. ITO BUILDING GONDIA, GONDIA

ITA 219/NAG/2025

AI Insights

The case involves Milind Shankarrao Kangali, the appellant, who contested a penalty imposed by the Income Tax Officer (ITO), Gondia, following an addition made to his income due to a difference between the declared sale consideration of a land transaction and its value as determined by the Stamp Valuation Authority (SVA). The land, purchased in 2014, was registered in 2017 after obtaining necessary permissions, during which time the SVA's valuation increased significantly. The AO added the difference to Kangali's income and imposed a penalty, which was contested in this appeal. The Tribunal, referencing several precedents, concluded that no penalty was justified under the circumstances, leading to the allowance of Kangali's appeal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 843828 (ITAT-NAGPUR)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 31-03-2025
• Other Referred Cases: Shamoon Ahmed Mulla Vs ITO, Gunwant Sohanlal Kherodiya Vs DCIT, Poonam Ramesh Sohajwani Vs ITO, Bankimbhai Natwarbhai Patel Vs ITO, CIT Vs Reliance Petroproduct Private Limited, CIT Vs Samson Perinchery
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRISURJIT KUMAR SAHA
• Assessee Lawyers: DILIP LOHIYA
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 271(1)(c); 50C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “NAGPUR” BENCH, NAGPUR BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI KHETTRA MOHAN ROY, ACCOUNTANT MEMBER ITA No. 219/NAG/2025 (A.Y.: 2017-18) (Physical hearing) Milind Shankarrao Kangali 24, Sai Sidhi Somalwada, Manish Nagar, Nagpur – 440015. PAN: ABSPK4934G Vs ITO Building Gondia Appellant /Assessee Respondent /Revenue Assessee by Shri Dilip Lohiya, CA Revenue by ShriSurjit Kumar Saha,SR. DR Date of hearing 24.02.2026 Date of pronouncement 17.03.2026 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [for short “CIT(A)”], dated 27.01.2025, for assessment year 2017-18, wherein penalty levied u/s. 271(1)(c) was confirmed. Though, the assessee has raised multiple grounds of appeal, however, in our considered view, the substantial grounds of appeal relate to validity of penalty levied u/s. 271(1)(c) on the addition made on account of difference vis-à-vis the sale consideration and the value determined by the Stamp Valuation Authority on transaction of sale of immovable asset. Printed from counselvise.com ITA No.219/Nag/2025 (AY 2017-18) Milind Shankarrao Kangali 2 2. Rival submissions of both the parties have been heard and record perused.The ld. Authorised Representative (AR) of the assessee submits that the assessee purchased a piece of land on 22.10.2014 for a sale consideration of Rs. 12,45,000/-. The registration of transaction before Sub-Registrar was delayed due to the fact that permission from District Collector for sale of Adivasi land was granted only on 17.01.2017. In the meantime, the ready reckoner rate/rate of Stamp Valuation Authority (SVA) was increased. Fair market value of such land was assessed by SVA at Rs. 40,00,000/-. The AO while passing the assessment order made addition on account of difference vis-à-vis, the value declared by assessee and the value determined by the SVA. The AO levied penalty on such differences. The ld. AR of the assessee submits that no penalty is leviable on the addition made by AO by invoking deeming provision of Section 50C of the Act or Section 56(2). There is no concealment or furnishing inaccurate particulars of income. The AO made addition without making a reference to District Valuation Officer (DVO). The assessee has not paid anything except the sale consideration declared in the registered sale deed. Otherwise, mere addition in the assessment or which is made by AO by taking a different view, will not, if so facto, will lead to concealment of particular of income or inaccurate particulars of income. No specific charge was specified in the show cause notice under section 274rws 271(1)(c). To support his various submission, the ld. AR relied upon the following decisions.  Shamoon Ahmed Mulla Vs ITO in ITA No. 6070/Mum/2024, Printed from counselvise.com ITA No.219/Nag/2025 (AY 2017-18) Milind Shankarrao Kangali 3  Gunwant Sohanlal Kherodiya Vs DCIT in ITA No. 650/Mum/2023,  Poonam Ramesh Sohajwani Vs ITO in ITA No. 2252/Mum/2029,  Bankimbhai Natwarbhai Patel Vs ITO in ITA No. 45/Ahd/2022,  CIT Vs Reliance Petroproduct Private Limited 322 ITR 158-SC and  CIT Vs Samson Perinchery (2017) 392 ITR 4 (Bom). 3. On the other hand, ld. Senior departmental representative (SR. DR) for revenue supported the order of lower authorities. 4. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that there is no much dispute on the fact. We find that in the assessment order, the AO made addition on account of difference vis-à-vis the sale consideration shown on the sale deed and the value determined by stamp valuation authority. The assessee has declared value of sale consideration at Rs. 12,45,000/-, the stamp value authority determined the value of land for the purpose of registration of transaction at Rs. 40,32,000/-. Hence, there was addition on account of deeming provision. We find that in a series of decision including in Shamoon Ahmed Mulla Vs ITO (supra), Gunwant Sohanlal Kherodiya Vs DCIT (supra) and in Poonam Ramesh Sohajwani Vs ITO (supra) it has as has been held by coordinate bench of Tribunal that when the addition is made under deeming provision, there is no furnishing of inaccurate particulars or concealment of income. Thus, respectfully following the consistent of coordinate benches, we do not find any justification for levying penalty under section 271(1)(c). Hence, penalty levied by AO u/s. 271(1)(c) is deleted. In the result, the grounds of appeal raised by the assessee are allowed. Printed from counselvise.com ITA No.219/Nag/2025 (AY 2017-18) Milind Shankarrao Kangali 4 5. In result, the appeal of the assessee is allowed. Order was pronounced on 17.03.2026 as per Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1963. Sd/- KHETTRA MOHAN ROY ACCOUNTANT MEMBER Sd/- PAWAN SINGH JUDICIAL MEMBER Mumbai, Dated: 17/03/2026 Karishma J. Pawar, SR. PS Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. By Order Assistant Registrar/Senior Private Secretary ITAT, Nagpur Printed from counselvise.com "