A.J.HAMEED SULAIMAN,CHENNAI vs. ITO NON CORPORATE WARD 1(3), CHENNAI

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

This appeal of the assessee is directed against the order of

the Commissioner of Income Tax (Appeals) -2, Chennai, dated

28.09.2017, confirming the penalty levied by the Assessing Officer

under Section 271(1)(c) of the Income-tax Act, 1961 (in short 'the

Act') for the assessment year 2013-14.

2 I.T.A. No.2719/Chny/17

submitted that during the course of assessment, the assessee claimed deduction under Section 54F of the Act in respect of the investment in purchase of property at Nerkundram Road,

Vadapalani, Chennai. According to the Ld. counsel, the assessee had sold a property at Lathams Bungalow Road, Ramanathapuram and the capital gain was invested in the new property at Vadapalani.

According to the Ld. counsel, the assessee claimed exemption under Section 54F of the Act to the extent of ₹50,55,152/-. The Assessing Officer, however, disallowed the claim of the assessee. According to the Ld. counsel, a mere claim in the return of income

under Section 54F of the Act cannot be a ground for levy of penalty under Section 271(1)(c) of the Act. The Ld.counsel placed his reliance on the judgment of Apex Court in CIT v. Reliance

Petroproducts Pvt. Ltd. (322 ITR 158).

Representative, submitted that the assessee originally claimed deduction under Section 54F of the Act in respect of capital gain on sale of property at Lathams Bungalow Road, Ramanathapuram. During the course of assessment proceeding, according to the Ld.

3 I.T.A. No.2719/Chny/17

D.R., the Assessing Officer found that the new property purchased

by the assessee at Nerkundram Road, Vadapalani, is a commercial

one. Therefore, the assessee by a letter dated 10.02.2016, offered

to withdraw the claim made under Section 54F of the Act. Since the

assessee withdrew the claim of deduction under Section 54F of the

Act after the Assessing Officer pointed out that the property

purchased by the assessee by investing the capital gain is a

commercial one, according to the Ld. D.R., the assessee has

furnished inaccurate particulars in respect of capital gain. Hence,

the CIT(Appeals) has rightly confirmed the penalty levied by the

Assessing Officer.

perused the relevant material available on record. It is not in

dispute that the long term capital gain accrued to the assessee on

sale of property at Ramanathapuram. It is also not in dispute that

the assessee invested the capital gain in a property at Nerkundram

Road, Vadapalani, Chennai. The assessee claimed deduction

under Section 54F of the Act. The Assessing Officer found that the

investment made by the assessee in the property at Nerkundram,

Vadapalani is a commercial one, therefore, the assessee is not

4 I.T.A. No.2719/Chny/17

eligible to claim deduction under Section 54F of the Act. In view of

the above, the assessee withdrew his claim. The question arises

for consideration is whether a mere claim under Section 54F of the

Act for deduction in respect of long term capital gain and

subsequent withdrawal of the same by a letter amounts to furnishing

of inaccurate particulars of income or not? It is not in dispute that

the assessee has furnished entire capital gain arose out of the sale

of property. The assessee also claimed deduction under Section

54F of the Act. This Tribunal is of the considered opinion that the

assessee has not concealed any particulars of his income or

furnished any inaccurate particulars of his income. As found by the

Apex Court in Reliance Petroproducts Pvt. Ltd. (supra), a mere

statutory claim in the return of income does not amount to

concealing any part of income or furnishing any inaccurate

particulars. In view of the above, we are unable to uphold the order

of the CIT(Appeals). Accordingly, orders of both the authorities

below are set aside and the penalty levied by the Assessing Officer

under Section 271(1)(c) of the Act is deleted.

5 I.T.A. No.2719/Chny/17

Order pronounced in the court on 19th September, 2018 at Chennai.

sd/- sd/- (ए. मोहन अलंकामणी) (एन.आर.एस. गणेशन) (A. Mohan Alankamony) (N.R.S. Ganesan) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member

चे�नई/Chennai, �दनांक/Dated, the 19th September, 2018.

Kri.

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A)-2, Chennai-34 4. Principal CIT-1, Chennai 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.