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2015 (3) TMI 46 - AT - Income TaxPenalty u/s 271(1)(c) - withdrawal of claim of section 54 by the assessee - Held that:- In the instant case, the assessee tried hard to purchase a flat from Mr. Vrijesh Kumar Gupta to enjoy effect of section 54 of the Act but the deal failed due to dispute in the family of the seller and finally during the year under consideration, the assessee offered the amount of long term capital gain for taxation and also paid the tax within prescribed limit, therefore, the authorities below were wrong in holding that the assessee did not furnish any explanation in this regard and the AO grossly erred in holding that the case of the assessee is found covered by clause (a) of Explanation 2 to section 271(1)(c) of the Act because the assessee furnished a plausible explanation during the quantum proceedings which was also filed before the AO during penalty proceedings. Hence, we reach to a logical conclusion that the AO imposed penalty on the basis of wrong premises and erroneous interpretation of the provisions of the Act and the same was wrongly upheld by the CIT(A). Accordingly, we are inclined to hold that penalty is not leviable on the assessee in the present case. - Decided in favour of assessee.
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