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2022 (11) TMI 828 - ITAT NAGPURPenalty u/s 271(1)(c) - assessee could not prove during the former proceedings to have re-invested the capital gains for the purpose of claiming Section 54 deduction since plot in issue was found to be a vacant one only - HELD THAT:- We find no merit in the Revenue’s vehement contentions supporting the impugned penalty. It is an admitted fact that the assessee’s plot formed part of a group housing society’s lay-out plan which ultimately was found as not constructed, which in turn, made the assessee to surrender the impugned deduction claim itself. DR could hardly rebut the clinching settled legal preposition that quantum and penalty are parallel proceedings wherein each and every disallowance/addition made in course of the former does not ipso facto attract to penal mechanism as per CIT vs., Reliance Petro Products [2010 (3) TMI 80 - SUPREME COURT]. We thus note that even if the assessee is ultimately found to have not been able to prove her plot in question as a constructed one, that itself would not make him liable for the impugned penalty. We further make it clear that this is not the Revenue’s case that assessee had not although re-invested his capital gains in a housing society plot which could not ultimately be completed owing to various issues amongst the members thereof. Assessee’s appeal is allowed.
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