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2014 (6) TMI 607 - AT - Income TaxLevy of penalty u/s 271(1)(c) of the Act - Claim of deduction u/s 54F - investment in two adjacent houses Held that:- The assessee has made a claim u/s 54F to the extent of the investment made in three flats at same floor of the building - out of the three flats one flat was purchased in the name of assessee himself and two other flats were purchased in the joint name of assessee and his wife as well as the assessee and his son respectively - the investment made in flats are from the sale proceeds of the asset sold by the assessee and there is no dispute on this fact - if the investment is made by the assessee in the new asset though in the joint name of the assessee and his wife, the exemption u/s 54/54F is allowable Relying upon ITO Vs. Ms. Sushila M. Jhaveri [2007 (4) TMI 289 - ITAT BOMBAY-I] - the exemption u/s 54F is available in respect of the investment in two adjacent houses which constitute one residential unit. The claim u/s 54/54F may be allowable in case of purchase of more than one new flats when more than one flat constitutes one residential house - all three flats in which the assessee invested the consideration received on sale of the old assets are located at the same floor of the building - the claim of the assessee would not fall under the category of bogus of absolute untenable claim under the law - The assessee has brought on record the entire facts relating to the claim and further there are various decisions supporting the claim of assessee, even the assessee withdrew the claim u/s 54F in respect of two flats out of three, the mere withdrawal of the claim would not turn the bonafide claim of the assessee into the category of wholly untenable and unsustainable claim having no basis - the claim of exemption u/s 54F is a highly debatable one and it cannot be said that it is an absolutely untenable claim under the law thus, the penalty levied u/s 271 (1)(c) is not justified and is to be set aside Decided in favour of Assessee.
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