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

आयकर अपीलीय अिधकरण, ‘ए’ �ायपीठ, चे�ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI �ी वी दुगा� राव, �ाियक सद� एवं �ी जी मंजूनाथा, लेखा सद� के सम$ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1730/Chny/2019 िनधा�रण वष� /Assessment Year: 2012-13

Shri R. Vasudevan, The Dy. Commissioner of Flat No.R-35, TNHB Complex, Income Tax, T.S. Krishna Nagar, Vs. Central Circle-1(1), Mugappair West, Chennai. Chennai – 600 050. [PAN: ABPPV 1970J] (&'थ(/Respondent) (अपीलाथ�/Appellant) अपीलाथ( की ओर से/ Appellant by : Mr. I. Dinesh, Advocate &'थ( की ओर से /Respondent by : Mrs. R. Anitha, Addl. CIT सुनवाई की तारीख/Date of Hearing : 01.09.2021 घोषणा की तारीख /Date of Pronouncement : 24.09.2021 आदेश / O R D E R Per V. Durga Rao, Judicial Member: This appeal filed by the assessee is directed against 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 relevant to the Assessment Year 2012-13.

I.T.A No.1730 /Chny/2019 :- 2 -: capital gain of Rs. 1,28,30,287/-. The assessee has claimed deduction

u/s. 54F of the Income Tax Act, 1961 (hereinafter as “the Act”) of Rs.

1,12,06,199/-. The A.O after examining the entire facts, 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 appeal 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 the copy of the

document in respect of land purchased at No.OP-8(SP) in the

Government Industrial Estate, Ambattur, Chennai. The sale registered

vide No.2832/2013 dated 14.06.2013 was also furnished as per the

sale deed and the assessee was authorized to use the property only for

the purpose of running an industry and other connected 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 allotted therefore, it

was clear that the very nature of the property purchased for industrial

and not a residential house. Therefore, denying the claim u/s. 54F of

the Act. He further noted that the assessee is already having more

than one house one is at Mogappiar another one is at 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 Act and simply

because denial of claim u/s. 54F of the Act not warranted penalty u/s.

271(1)(c) of the Act. He relied on the decision on the decision of the

Hon’ble 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.

submitted that the assessee has purchased a vacant land for which he

is not entitled for deduction u/s. 54F of the Act and therefore, it is a

clear concealment and the A.O has rightly levied penalty u/s. 271(1)(c)

of the Act. He strongly supported the orders of the authorities below.

record and gone through the orders of the authorities 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 sale 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 property 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 property which is supposed

to be purchased only residential house and not an industrial property.

Therefore, the assessee is not entitled for the deduction u/s. 54 of the

Act. Therefore, the A.O denied the claim u/s. 54 of the Act and the Ld.

CIT(A) confirmed and ITAT also finally upheld the order of the Ld.

CIT(A). So far as penalty is concerned, the assessee 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 Hon’ble

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 that penalty can be

levied. Therefore, following the judgment of the Hon’ble 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 confirmed by the Ld.CIT(A)

is not correct. In view of the above, we cancel the penalty levied under

section 271(1)(c) of the Act by the Assessing Officer.

I.T.A No.1730 /Chny/2019 :- 5 -:

Order pronounced on 24th September, 2021 in Chennai.

Sd/- Sd/- (�ी जी मंजूनाथा) (वी दुगा� राव) (G. MANJUNATHA) (V. DURGA RAO) लेखा सद�/ACCOUNTANT MEMBER �ाियक सद�/JUDICIAL MEMBER चे�ई/Chennai, �दनांक/Dated: 24th September, 2021. EDN/- आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु� (अपील)/CIT(A) 4. आयकर आयु�/CIT 5. िवभागीय �ितिनिध/DR 6. गाड� फाईल/GF