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TMI Blog2015 (8) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty order, the CIT has discussed the issues involved in proper perspective. Since there is no infirmity in the penalty order, penalty of Rs. 2,18,300 imposed by the CIT under section 271(1)CIT of the Act is upheld." 3. On perusal of the grounds of appeal, it is noted that principally, there are two grounds of appeal against the order of the Ld. CIT (A) whereby he has confirmed the levy of penalty which is now being contested before us: a) Levy of penalty in relation to disallowance of excess claim of interest deduction under section 24(b) of the Act b) Levy of penalty in relation to short computation of long term capital gains A. Levy of penalty in relation to disallowance of excess claim of interest deduction under section 24(b) of the Act 4. During the year under consideration, the appellant has claimed interest deduction under section 24(b) of the Income tax Act amounting to Rs. 150,000/- in respect of self-occupied property which was in her joint name along with her husband. The Assessing officer in his order passed under section 143(3) of the Act has reduced the deduction to Rs. 75000/- and thereafter penalty was levied under section 271(1)(C) of the Act. 5. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the end of the financial year in which capital was borrowed, the amount of deduction shall not exceed Rs. 150,000/-." 11. If one were to read this proviso to section 24(b) on a standalone basis, one would get the impression that the quantum of deduction of Rs. 150,000/- is linked to the property under question and where the property is joint owned by one or more persons, the maximum deduction to all coowners would be restricted to Rs. 150,000/-. Apparently, it seems that the AO has carried the said impression while the passing the assessment order though there is no discussion in his order. 12. However, if one were to read the above proviso to section 24(b) in context of section 22, section 23(2) read with section 26 of the Act, it appears that one has to compute the income from house property in the hands of the appellant and the determination of annual value as well as the deductions where applicable, are in the hands of the appellant whether such individual is holding the property in her own name or jointly with other co-owner. 13. In the above context, it therefore appears to us that the appellant has taken a plausible view that she was eligible for interest deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r provisions of section 50C of the Act as against sale consideration of Rs. 53,59,000 received by the appellant. In the penalty order, the AO has mentioned that when the assessee was cornered in this regard, the assessee submitted a revised computation of income taking market value (the DM Circle rate) as full value of consideration under section 50C of the Act. The Ld. CIT(A) has merely confirmed the order of the AO without adjudicating on the merits of levy of penalty. 21. On perusal of the paperbook, it is noted that the applicant has disclosed in her computation of income both the figures of actual sale consideration of Rs. 53,59,000 as well as DM circle rate of Rs. 64,36,500. However, while computing the capital gains/loss, the figure of Rs. 53,59,000 has been considered by the appellant. Thus, the primary facts in terms of actual sales consideration as well as value as per DM value were submitted and not disputed by the AO. Further, it is noted from the copies of the submissions filed before the AO (as contained in the paperbook) whereby the appellant has stated that the calculation in the annexed sheet (computation of income) has been made on the basis of value as per DM ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 221 0/Mum/2010 where on identical facts and issues, it was held as under: "We have considered the rival contentions and relevant record. We find that the AO had made addition of Rs. 9,00,824/- being difference between the sale consideration as per sale agreement and the valuation made by the Stamp Valuation Authority. Thus, the addition has been made by the AO by applying the provisions of section 50C of the Act. It is evident from the assessment order that the AO has not questioned the actual consideration received by the assessee but the addition is made purely on the basis of deeming provisions of the Income Tax Act, 1961. The AO has not given any finding that the actual sale consideration is more than the sale consideration admitted and mentioned in the sale agreement. Thus it does not amount to concealment of income or furnishing inaccurate particulars of income. It is also not the case of the revenue that the assessee has failed to furnish the relevant record as called by the AO to disclose the primary facts. The assessee has furnished all the relevant facts, documents/material including the sale agreement and the AO has not doubted the genuineness and validity of the docu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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