SHRI R. VASUDEVAN, CHENNAI V. DCIT, CENTRAL CIRCLE - 1 (1), CHENNAI

ITA 1730/CHNY/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5158 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 03-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS R ANITHA
• Section: 271(1)(c); 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ ITA NO.1730/CHNY/2019 /ASSESSMENT YEAR: 2012-13 SHRI R. VASUDEVAN, FLAT NO.R-35, TNHB COMPLEX, T.S. KRISHNA NAGAR, MUGAPPAIR WEST, CHENNAI 600 050. [PAN: ABPPV 1970J] VS. THE DY . COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(1), CHENNAI. ( /APPELLANT) ( &'( /RESPONDENT) ( / APPELLANT BY : MR. I. DINESH, ADVOCATE &'( /RESPONDENT BY : MRS. R. ANITHA, ADDL. CIT /DATE OF HEARING : 01.09.2021 / DATE OF PRONOUNCEMENT : 24.09.2021 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-16 , CHENNAI IN I.T.A NO.08/CIT(A)-18/2017-18 DATED 12.04.2019 RELE VANT TO THE ASSESSMENT YEAR 2012-13. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAS SOLD PROPERTY FOR A CONSIDERATION OF RS. 1,61,32,000/- A ND HE HAS DECLARED I.T.A NO.1730 /CHNY/2019 :- 2 -: CAPITAL GAIN OF RS. 1,28,30,287/-. THE ASSESSEE HA S CLAIMED DEDUCTION U/S. 54F OF THE INCOME TAX ACT, 1961 (HEREINAFTER A S THE ACT) OF RS. 1,12,06,199/-. THE A.O AFTER EXAMINING THE ENTIRE F ACTS, HE HAS DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE U/ S. 54F OF THE ACT AND THE SAME WAS CONFIRMED BY THE LD. CIT(A). ON AP PEAL THE ITAT ALSO UPHELD THE ORDER PASSED BY THE LD. CIT(A). IN THE PENALTY ORDER, THE A.O HAS NOTED THAT THE ASSESSEE HAS FURNISHED T HE COPY OF THE DOCUMENT IN RESPECT OF LAND PURCHASED AT NO.OP-8(SP ) IN THE GOVERNMENT INDUSTRIAL ESTATE, AMBATTUR, CHENNAI. T HE SALE REGISTERED VIDE NO.2832/2013 DATED 14.06.2013 WAS ALSO FURNISH ED AS PER THE SALE DEED AND THE ASSESSEE WAS AUTHORIZED TO USE TH E PROPERTY ONLY FOR THE PURPOSE OF RUNNING AN INDUSTRY AND OTHER CONNEC TED ACTIVITIES AND FOR NO OTHER PURPOSE. THE ASSESSEE WAS REQUIRED TO UTILIZE THE ALLOTMENT OF LAND ONLY FOR CONSTRUCTING INDUSTRIAL WORK SHEDS AND FOR RUNNING AN INDUSTRY FOR WHICH IT WAS INTENDED AND A LLOTTED THEREFORE, IT WAS CLEAR THAT THE VERY NATURE OF THE PROPERTY PURC HASED FOR INDUSTRIAL AND NOT A RESIDENTIAL HOUSE. THEREFORE, DENYING TH E CLAIM U/S. 54F OF THE ACT. HE FURTHER NOTED THAT THE ASSESSEE IS ALR EADY HAVING MORE THAN ONE HOUSE ONE IS AT MOGAPPIAR ANOTHER ONE IS A T ANNA NAGAR, CHENNAI AND THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S. 54F OF THE ACT AND LEVIED PENALTY U/S. 271(1)(C) OF THE ACT AND THE SAME WAS CONFIRMED BY THE LD. CIT(A). I.T.A NO.1730 /CHNY/2019 :- 3 -: 3. ON APPEAL BEFORE US, THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS MADE BONAFIDE CLAIM U/S. 54F OF THE AC T AND SIMPLY BECAUSE DENIAL OF CLAIM U/S. 54F OF THE ACT NOT WAR RANTED PENALTY U/S. 271(1)(C) OF THE ACT. HE RELIED ON THE DECISION ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. [2020] 322 ITR 158 (SC) AND SUBMITTED THAT NO PENALTY CAN BE LEVIED. 4. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESE NTATIVE HAS SUBMITTED THAT THE ASSESSEE HAS PURCHASED A VACANT LAND FOR WHICH HE IS NOT ENTITLED FOR DEDUCTION U/S. 54F OF THE ACT A ND THEREFORE, IT IS A CLEAR CONCEALMENT AND THE A.O HAS RIGHTLY LEVIED PE NALTY U/S. 271(1)(C) OF THE ACT. HE STRONGLY SUPPORTED THE ORDERS OF TH E AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERI ALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ASSESSEE HAS SOLD A PROPERTY AND PURCHASED ANOTHER PROPERTY AND CLAIMED DEDUCTION U/S. 54F OF THE ACT. THE A.O HAS CALLED THE DETAILS OF THE PURCHASED PROPERTY. AFTER EXAMINING THE SAL E DEED, THE A.O NOTICED THAT THE HOUSE PURCHASED BY THE ASSESSEE IS NOT A RESIDENTIAL HOUSE AND IT IS ONLY FOR THE PURPOSE OF FOR RUNNING THE INDUSTRY AND OTHER CONNECTED ACTIVITIES AND THEREFORE, THE VERY NATURE OF THE PROPERTY PURCHASED BY THE ASSESSEE IS ONLY INDUSTRIAL PROPER TY NOT A RESIDENTIAL I.T.A NO.1730 /CHNY/2019 :- 4 -: HOUSE AND LEVIED PENALTY U/S. 271(1)(C) OF THE ACT. IT IS A FACT THAT THE ASSESSEE HAS NOT PURCHASED A RESIDENTIAL HOUSE. IT IS A BONAFIDE CLAIM OF THE ASSESSEE THAT ON SALE OF THE PROPERTY HE CAN PURCHASE ANOTHER PROPERTY, BUT, THE FACT REMAINS THAT ANOTHER PROPER TY WHICH IS SUPPOSED TO BE PURCHASED ONLY RESIDENTIAL HOUSE AND NOT AN I NDUSTRIAL PROPERTY. THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR THE DED UCTION U/S. 54 OF THE ACT. THEREFORE, THE A.O DENIED THE CLAIM U/S. 54 O F THE ACT AND THE LD. CIT(A) CONFIRMED AND ITAT ALSO FINALLY UPHELD THE O RDER OF THE LD. CIT(A). SO FAR AS PENALTY IS CONCERNED, THE ASSESS EE SIMPLY MADE A CLAIM, WHICH IS NOT ACCEPTABLE TO THE A.O, PENALTY CANNOT BE LEVIED U/S. 271(1)(C) OF THE ACT AUTOMATICALLY AS HAS BEEN HELD IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (SUPRA), WHEREIN, THE HONBLE SUPREME COURT EXPLAINED THAT WHETHER A CLAIM SIMPLY NOT ACCEPTED BY THE A.O., IT DOES NOT MEAN THAT IT IS A CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME SO T HAT PENALTY CAN BE LEVIED. THEREFORE, FOLLOWING THE JUDGMENT OF THE HO NBLE SUPREME COURT, WE ARE OF THE OPINION THAT THE ASSESSEE HAS NEITHER CONCEALED THE INCOME NOR FURNISHED INACCURATE PARTICULARS IN THIS CASE AND THEREFORE, THE PENALTY LEVIED BY THE A.O AND CONFIR MED BY THE LD.CIT(A) IS NOT CORRECT. IN VIEW OF THE ABOVE, WE CANCEL TH E PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT BY THE ASSESSING OFFIC ER. I.T.A NO.1730 /CHNY/2019 :- 5 -: 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 24 TH SEPTEMBER, 2021 IN CHENNAI. SD/ - SD/ - ( ) (G. MANJUNATHA) /ACCOUNTANT MEMBER ( ) (V. DURGA RAO) /JUDICIAL MEMBER /CHENNAI, /DATED: 24 TH SEPTEMBER, 2021 . EDN/- /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF