TMI Blog2021 (9) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... d levied penalty u/s. 271(1)(c) - 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. 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. [ 2010 (3) TMI 80 - SUPREME COURT] , wherein, explained that whether a claim simply not accepted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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