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ITAT deleted the penalty imposed u/s 271(1)(c) (of Income Tax Act, 1961)
ITAT deleted the penalty imposed u/s 271(1)(c) (of Income Tax Act, 1961)
Assessee sold a plot of land purchased in 2001 for Rs 22.8 kahs, in 2007 for Rs. 3.2 crores, and claimed deduction u/s 54F (of Income Tax Act, 1961) on investment in residential houses. AO held that investment was in the nature of family settlement for avoiding long term capital gains, and disallowed claim, and imposed penalty. CIT(A) upheld AO's action. ITAT deleted the penalty.-500279
1. Assessee sold a plot of land 17-09-2007 for Rs. 3.2 crores, which was purchased in June, 2001 for Rs 22.8 lakhs.
2. Assessee claimed deduction u/s 54F (of Income Tax Act, 1961) on investment in residential houses amounting to Rs 1.82 croes and in REC bonds of Rs 50 lacs, and offered capital gains of Rs 58 lakhs.
3. AO concluded that assessee's alleged investment was in the nature of family settlement for avoiding long term capital gains from being taxed.
4. AO disallowed deduction claim.
5. AO initiated impugned penalty proceedings for concealment and furnishing inaccurate particulars of income u/s 271(1)(c) (of Income Tax Act, 1961).
6. CIT(A) upheld AO's action.
On appeal the ITAT held as under:
7. We hold in these circumstances that ld. co- ordinate bench's view rejecting assessee's section 54F (of Income Tax Act, 1961) deduction claim based on purchase of properties in question not allowable on the ground that the same is not a formal transfer under relevant statutory provisions, is not entirely free from doubt.
8. It has come on record that its correctness is subject matter of an appeal already admitted in the hon'ble jurisdictional high court (supra).
9. Secondly, the fact also remains that the assessee raised a deduction claim which has been rejected after treating the same as a colourable exercise.
10. Be that as it may, we are dealing with penalty proceedings and the above stated quantum findings do not mean that the assessee can be held concealed and furnished inaccurate particulars of income.
11. We accordingly reject Revenue's arguments supporting the impugned penalty of Rs. 37,67,280.
Case Reference - Bansilal Lakhimal Kanjani vs The DCIT.
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD "A" BENCH
Before: Shri Pramod Kumar, Accountant Member
and Shri S. S. Godara, Judicial Member
ITA No. 2021/Ahd/2015
(Assessment Year 2008-09)
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