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2015 (10) TMI 742 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance u/s 54F - CIT(A) confirmed part penalty - Held that:- From the facts of the case of the assessee and the provisions of Section 54F under which claim has been made, the claim is clearly inadmissible. Therefore, the penalty u/s 271(1)(c) is to be imposed on wrong claim u/s 54F made on purchase of plots at B-10 and B-1, Raghunandan Vihar, Jaipur for ₹ 3,05,336/- and ₹ 3,59,048/- respectively. The A.R. himself has admitted that the penalty may be reduced proportionately as per the order of the ld. CIT(A). Thus the AO is directed to reduce the penalty u/s 271(1) (c) proportionately on the tax evaded on the disallowance u/s 54F confirmed by the ld. CIT(A) of ₹ 6,64,384/-. To that extent, the penalty is confirmed u/s 271(1)( c) for filing inaccurate particulars of income - the directions of the ld. CIT(A) in the penalty order are in consonance with the directions of the ld. CIT(A) in the quantum proceedings in relation to disallowance of deduction of ₹ 664,384 claimed by the assessee. What the assessee has failed to consider is that he has raised an additional claim before the ld. CIT(A) towards the cost of construction of the house which has been allowed to him by the ld. CIT(A) by exercising his jurisdiction as he has coterminous power under the I.T. Act. The amount which is finally disallowed would ,therefore, suffer the consequent penalty provisions under section 271(1)(c) of the Act. - Decided against assessee. Exemption u/s 54F is available in respect of investments in two adjacent houses which constitute one residential unit. In the case of the assessee, it has invested the consideration received on sale of plot of land in 03 different plots of lands which were geographically located at 03 different locations i.e, at Santosh Vihar, at B-10 Raghunandan Vihar and at B-1, Raghunandan Vihar. Further, a residential house has been constructed only on the plot of land at Santosh Vihar. It is thus clear that in the facts of the present case, the assessee doesn’t have any legal and tenable basis for claim of deduction in respect of 03 separate plots of land which are physically at different locations as by no stretch of imagination, they would collectively satisfy the definition of “a residential house”. Therefore, it is clearly a case of striking in the dark which the assessee has been unsuccessful as rightly held by the lower authorities. It is clearly a case where the factual position doesn’t support the claim of the assessee and there cannot be any dispute or debate that the assessee was eligible for claim at first place. Accordingly, in the facts and circumstances of the case, we are of the considered view that claim of the assessee under section 54 was not a bonafide claim and levy of penalty u/s 271(1)(c) was justified and hence confirmed. - Decided against assessee.
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