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2008 (2) TMI 450 - AT - Income TaxLevy of penalty u/s 271(1) (c) - Concealment Of Income - mere change of head of income - loss case and the assessee-company had discontinued its business of real estate - balance-sheet of the assessee-company for the year under consideration wherein the said property was shown under the head "Fixed assets" - HELD THAT:- It is observed that while computing the profit/loss arising from the sale of the aforesaid property under the head "Capital gain", the fair market value of the said property as on the date of sale as valued by the District Valuation Officer at Rs. 2,44,16,000 in a report obtained by making a reference under section 55A was adopted by the Assessing Officer as sale consideration in place of the sale consideration of Rs. 1,62,00,000 shown in the relevant agreement. In the present case, no such material was brought on record by the Assessing Officer to show that the sale consideration of the property in question actually received by the assessee was more than what was declared in the relevant agreement and this being the undisputed position, we are of the view that the action of the Assessing Officer in adopting the fair market value on the basis of the District Valuation Officer's report as sale consideration for computing the higher income under the head "Capital gain" itself was not tenable in law and the addition made on the basis of such action cannot be treated as concealed income of the assessee to attract the penalty. Moreover, as held by the hon'ble Madras High Court in the case of Apsara Talkies [1981 (11) TMI 2 - MADRAS HIGH COURT] and by the hon'ble Supreme Court in the case of Dilip N. Shroff [2007 (5) TMI 198 - SUPREME COURT], the valuation made by the District Valuation Officer is an estimate which can be a basis for making addition to the income of the assessee for the purpose of assessment, but the same alone cannot be the basis to construe concealment for the purpose of imposing penalty under section 271(1)(c). Therefore, we are of the view that considered from any angle, the penalty imposed by the Assessing Officer u/s 271(1)(c) was not sustainable and the ld CIT (A) was fully justified in cancelling the same. The impugned order of the ld CIT (A) is, therefore, upheld dismissing this appeal filed by the Revenue. In the result, the appeal of the Revenue is dismissed.
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