VIVEK OMPRAKASH ABROL Vs. INCOME TAX OFFICER

Parties Involved

Facts Summary

The assessee, Vivek Omprakash Abro, purchased agricultural land for Rs.5,74,38,100/- as against the market value by stamp duty authorities at Rs.16,29,95,760/-. The difference of Rs.10,55,57,660/- was proposed to be treated as income from other sources under section 56(2)(vii)(b)(ii) of the Act. The Assessing Officer completed the assessment by making an addition of Rs.10,55,57,660/-. The DVO passed a report estimating the fair market value of three properties at a value less than the respective purchase consideration. However, in respect of one property, the fair market value was estimated at Rs. 93,23,000/- as against the purchased consideration of Rs.71,59,500/- leaving a difference of Rs.21,63,500/-. The Assessing Officer passed a rectification order revising the total income to Rs.1,61,29,510/- and reduced the addition made under section 56(2)(vii)(b)(ii) of the act to Rs.21,63,500/-. The learned CIT(A) rejected the valuation adopted by the DVO and sustained the addition made in the assessment order. The tribunal held that the income/addition resulting from the application of deeming provisions does not ipso facto attract the penalty under section 271(1)(c) of the Act.…

Legal Issues

• 1. Whether penalty levied on the basis of addition made u/s 56(2)(vii)(b)(ii) tantamount to furnishing inaccurate particulars of income or concealment of income.
• 2. Whether the addition made by the AO by applying the provisions of section 56(2)(vii)(b)(ii) of the Act attracts penalty under section 271(1)(c).

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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