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2021 (12) TMI 1245 - ITAT AHMEDABADPenalty u/s 271(1)(c) - non disclosure of capital gain on sale of land in the income tax return - Land sold by co-owners - HELD THAT:- Admittedly, the capital gain was not shown by the assessee in the income tax return. The land was sold by the assessee along with the co-owners. The impugned land was sold by the assessee along with the co-owners for ₹ 56 Lacs but the same was valued for the purpose of the stamp duty at ₹ 58.55 Lacs. The share of income of the assessee under the head capital gain was worked out by the authorities below taking the sale consideration of ₹ 58.55 Lacs under the provisions of section 50C of the Act which is a deeming provision. Thus the amount of profit worked out, as attributable to the assessee, was containing 2 elements. One of the element was the actual sale consideration as per the sale deed i.e. ₹ 14 Lacs (56 Lacs/4) and deemed sale consideration of ₹ 63750 (2.55 Lacs/4) only. It is an admitted fact that there cannot be any penalty on the profit calculated for the assessee based on deeming section/fiction. The land in dispute was acquired dated 25 April 1977 at ₹ 36,915.00 which was taken as the cost of acquisition for the purpose of computing the capital gain capital gain whereas the assessee was given option to take the fair market value of the impugned land as on 1 April 1981 as the cost of acquisition under the provisions of section 55(2)(b) of the Act. However we find that none of the authority below has pointed out in their respective orders whether the assessee was given the opportunity to take the value as on 1 April 1981 as the cost of requisition for the purpose of the capital gain. Generally, the rate of the land increases year after year. Thus, the value of the property in dispute, acquired in the year 1977, should have increased as on 1 April 1981 which should have been taken as the cost of acquisition. Thus, no prudent assessee will take the cost of requisition as applicable for the year 1977 when the property was acquired until and unless the facts and circumstances suggest otherwise. But nothing is available on record, neither the revenue has carried out any exercise to find out the actual value of the property as on 1st April 1981. Thus, the revenue is not expected to derive any benefit out of the ignorance of the assessee. We are of the view that there was no deliberate act on part of the assessee to conceal/furnish inaccurate particulars of income. Therefore, we are of the view that the penalty levied by the AO and sustained by the ld. CIT(A) is not maintainable. Hence we direct the AO to delete the penalty imposed u/s. 271(1)(c) - Decided in favour of assessee.
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