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TMI Blog2015 (10) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee has not pressed the Ground No. 4. Therefore, the same is dismissed being not pressed. 3.1 Now we take up Ground No. 2 and 3 of the assessee for adjudication. 3.2 The facts in brief of the case are that the assessee filed its return of income on 31-10-207 declaring an income of Rs. 18,95,470/- The case of the assessee was selected for scrutiny and order u/s 143(3) of the Act was passed on 25-1-2009 determining the income of the assessee at Rs. 30,87,790/-. During the course of assessment proceedings, the AO observed that the assessee had shown capital gains of Rs. 12,71,000/- after getting benefit of indexation by sale of Plot at Bal Vihar for Rs. 13,01,000/-. The assessee had claimed deduction u/s 54 of the Act after buying 03 plots of land totaling to Rs. 11,06,684/- and paid tax on balance amount of Rs. 1,64,316/-. The AO observed that the assessee reinvested the capital gains for buying the new plots of land and not in a residential house which is the pre-condition for claiming deduction u/s 54 of the Act. The AO asked the assessee to explain as to why the amount so invested for buying the new plots of land amounting to Rs. 11,06,684/- be not added to his tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty, the assessee preferred an appeal before the ld. CIT(A) who has partially confirmed the penalty u/s 271(1)(c) of the Act. The AO taking cognizance of the CIT(A) order (ITA No. 108/10-11) dated 22.08.2012 has given a consequent effect by his order dated 3.10.2012 whereby the original penalty of Rs. 2,28,340/- u/s 271(1)(c) has been reduced to Rs. 1,49,088/-. 3.6 In light of above facts, the limited issue before us is whether levy of penalty of Rs. 1,49,088 under section 271(1)(c) is justified or not 3.7 Firstly, in relation to ground no. 3, during the course of hearing, the ld. AR of the assessee submitted that the ld. CIT(A) has erred in directing the AO to compute the penalty on disallowance Rs. 6,64,384/- instead of Rs. 5,07,884/- u/s 54F of the Act and has submitted the working as under: Deduction claimed by the assessee u/s 54 - Rs. 11,06,684 Deduction allowed by the CIT(A) u/s 54F - Rs. 5,98,800 Balance amount Rs. 5,07,884 3.8 In context of quantum proceedings, it is observed from the order of the CIT(A) that he has allowed deduction in respect of the value of land at Santosh Vihar colony, Jhotwara, Jaipur and related stamp duty of Rs. 4,42,300/- which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n finally allowed to him. The amount which is finally disallowed would ,therefore, suffer the consequent penalty provisions under section 271(1)(c) of the Act. We therefore do not find any infirmity in the order of the ld. CIT(A) and the same is upheld on this ground. In the result, ground no. 3 raised by the assessee is dismissed. 3.11 Now coming to ground no. 2, the ld. AR of the assessee has raised two broad contentions before us. Firstly, he has submitted that there was no concealment of particulars of income or furnishing inaccurate particulars of income for the reason that whatever income was to be disclosed was disclosed and the deduction claimed by the assessee was in the computation of income of the assessee. However, the deduction claimed by the assessee was not acceptable to the Department and the same has been disallowed. The ld. AR further submitted that mere erroneous claim made in the return will not be a ground for levying the penalty. Secondly, he has submitted that the return of the assessee was filed in a hurried manner by the ld. AR of the assessee on the last date of filing of appeal on 31-10-2007 and if the return had not been filed by the assessee then the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has submitted that the return of the assessee was filed in a hurried manner by the ld. AR of the assessee on the last date of filing of appeal on 31-10-2007 after claiming deduction of Rs. 11,06,684/- u/s 54 of the Act without fully verifying the facts of the case. Thus there was no fault of the assessee in claiming more deduction u/s 54 of the Act and to this effect, an affidavit of Shri Sushil Varma was filed before the ld. CIT(A). It would be interesting to observe that during the course of the assessment proceedings, the assessee has not corrected so called mistake and has continued with the position that claim under section 54 is maintainable. It would be also relevant to note that the ld. AR Shri Sushil Varma who has filed the return has also represented the assessee during the course of the assessment proceedings which shows that the ld AR has been duly authorized to represent the assessee. If it was a case of a bonafide mistake and making a claim in a hurriedly manner, the assessee through its AR has got ample opportunity to withdraw such claim during the assessment proceedings specially when a specific show cause made by the AO on this specific matter of deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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