2023 (1) TMI 516 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - Computation of capital gain - whether any addition made because of legal fiction created under the Act i.e. to say addition made u/s 50C will amount furnishing inaccurate particular of income? - HELD THAT:- In this connection, we note that the Hon’ble Courts have held that there cannot be any penalty on the amount representing the deemed consideration. In this regard, we find support and guidance from the judgment in case of PCIT vs. Sun on Peak Hotel (P) Ltd [2018 (6) TMI 1055 - GUJARAT HIGH COURT]

We are of the opinion that the assessee cannot be made subject levy of penalty under section 271(1)(c) of the Act merely for reason that the consideration shown in the computation of capital was less than the value adopted for stamp duty or the value determined by the DVO under the provision of section 50C. Therefore, we hereby set aside the finding of the CIT(A) and direct the AO to delete the penalty levied under section 271(1)(c) of the Act. Hence the ground of appeal of the assessee is hereby allowed.