DR. SANJAY J. MEHTA,MUMBAI vs. ACIT - 16(3), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER:

1. Penalty LEVIED U/S 271(1)(c) FOR EXEMPTION u/s. 54F – Rs. 1,35,05,423/- a) The learned CIT(A) erred in holding that the Appellant has not purchased any residential house as required u/s. 54F and confirmed the penalty u/s 271(1)(c), although the Appellant has furnished sufficient documentary evidence to show that the purchase was genuine and bonafide. b) The learned CIT(A) erred in confirming the denial of exemption u/s. 54F, on the ground that the Appellant has not made a bonafide - Dr. Sanjay J. Mehta

agreement for purchase of a residential house, since it was not duly stamped and registered before the filing of the return. 2. Brief facts of the case are that the assessee filed return of income for relevant AY on 25.10.2008. The assessment was completed on 23.12.2010 under section 143(3) of the Act. The AO while passing the assessment order made the addition of Rs. 3,96,96,640/- by disallowing Long Term Capital Gain (LTCG) and made addition on account of interest expenses of Rs. 12,28,883/-. On appeal before the ld. CIT(A), the addition on account of interest of Rs. 12,28,883/- was restricted to Rs. 10,00,000/-. However, the addition of Rs. 3,96,96,640/- on account of LTCG was sustained. The AO levied the penalty on disallowance of deduction under section 54F of Rs. 3,96,96,640/- and on addition of interest of Rs. 12,28,883/-. The AO levied the penalty of Rs. 1,35,05,423/- @ 100% of the tax sought to be evaded. On appeal before the ld. CIT(A), the penalty was sustained on disallowance of LTCG. However, it was deleted on interest expenses. Thus, further aggrieved by the order of ld. CIT(A), the present appeal is filed before us.

raised in the present appeal are covered by the decision of Tribunal in assessee’s case in quantum appeal. It was argued that the addition on disallowance of claim/exemption under section 54F has already been allowed in favour of assessee by the Tribunal in assessee’s appeal vide 2 Dr. Sanjay J. Mehta order dated 15.02.2017. On the other hand, the ld. DR fairly conceded that the Tribunal has deleted the disallowance on account of LTCG.

4. We have considered the rival submission of the parties and have gone through the orders of authorities below. We have noted that the AO levied the penalty on disallowance of deduction under section 54F for Rs. 3,96,96,640/- and on addition of interest of Rs. 12,28,883/-. On appeal, the ld. CIT(A) deleted the penalty on interest expenditure of Rs. 12,28,833/-.

The addition/disallowance under section 54F has been deleted by the Tribunal in dated 15.02.2017. Thus, considering the fact that the addition on account of LTCG on which the penalty was sustained by ld. CIT(A) has already been deleted by the Tribunal in ITA No. 7795/Mum/2012 dated 15.02.2017. Thus, the consequent penalty order is also set-aside. 5. In the result, appeal of the assessee is allowed. 6. Order pronounced in the open court on 3rd day of January 2018.