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2022 (5) TMI 522 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance of deduction u/s 54F of the Act - denial of deduction u/s 54F is that the purchase of the property i.e. new asset was beyond the period of one year vis-à-vis sale of the old asset in this regard - It is the case of the assessee that although the purchase of new asset is beyond one year vis-à-vis sale of the old asset, the security deposit for sale of old asset was taken within a period of one year, and therefore, the action for sale of old asset started rolling within the stipulated period. It is the case of the assessee that the provisions of Section 54F are beneficial in nature and the Courts have always accorded liberal interpretation and a small delay of few days have been condoned for the eligibility purposes - HELD THAT:- We find merit in the plea of the assessee for cancellation of penalty. While the admissibility of deduction under Section 54F in the circumstances may be somewhat debatable due to non compliance of strict letter of law. However, this by itself, would not result in imposition of penalty as a consequential measure. The case of the assessee is fully supportable by the decision of the Hon’ble Supreme Court in the case of CIT vs. Reliance Petro Products Pvt . Ltd. [2010 (3) TMI 19 - SUPREME COURT] Admittedly, no inaccuracy was found in the particulars of deduction claimed as such. The assessee also has a basis for claim of deduction in the light of the fact that security deposit was accepted from the brokers against the sale of property which ultimately materialized 20-25 days later resulting in slight delay in actual execution of sale agreement of old asset. In such circumstances, small breach in the stipulated period of one year between purchase and sale of assets would not justify imposition of onerous penalty. - Decided in favour of assessee.
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