TMI Blog2016 (4) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... posit which was treated as part of sales consideration was refunded to the builder upon handing over of the 1800 sq.ft. flats on first floor of the new property in three installments as agreed. Thus under these facts we are of the considered opinion that the assessee has not furnished any inaccurate particulars of income and order of ld.CIT(A) upholding the penalty u/s 271(1)(c) of the Act cannot be sustained - Decided in favour of assessee - I.T.A. No.7967/Mum/2010 - - - Dated:- 9-3-2016 - SHRI AMIT SHUKLA, JM AND SHRI RAJESH KUMAR, AM For The Appellant : Shri Kantilal B Parekh For The Respondent : Shri Navin Guptra ORDER PER RAJESH KUMAR, AM : This is an appeal filed by the assessee against the order dated 28.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said construction company. Under the said agreement, the assessee was paid ₹ 95 lakhs as an interest free security deposits by the construction company till the building is constructed and it handed over 1800 sq.ft area on the first floor to the assessee. The assessee declared the sale of property in the return of income by showing sale consideration of ₹ 1,30,00,000 and cost of acquisition after indexation at ₹ 64,86,946/- which was calculated on the basis of register valuar s report, valuing the property at ₹ 21,05,573/- and from the capital gain so calculated the assessee claimed deduction of ₹ 40,27,575/- u/s 54 in respect of the property purchased on 18.4.1994 at Rameshwar Co-Op.Hsg Soc, Santa Cruz (W), M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qua new flat purchased. 4. The matter travelled up to the Tribunal, however the assessee despite taking the ground against taking of sale considerations at ₹ 2,25,00,000/- did not press the same and pressed only for allowing relief under section 54 in respect of ₹ 95,00,000/-. The Tribunal allowed the second ground of appeal in favour of the assessee as the assessee did not press the first ground of the appeal. Thus, the tribunal did not give any finding on the first ground. It is noteworthy that the assessee returned and refunded the said interest free security deposit to the builder company in three installments i.e. ₹ 40 lakhs on 31.3.1995, ₹ 45 lakhs on 31.3.1996 and ₹ 10 lakhs on 31.3.1997 upon receivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even though in the grounds of appeal filed, it has duly raised this issue. It is evident from the perusal of details especially the order of the ITAT in the appellant's own case Supra that the appellant has conceded the submission before ITAT. In other words, the very reason for which it sought an appeal before ITAT inter-alia challenging the addition on account of security deposit of ₹ 95 Lacs was unhinderdly conceded by the appellant, after the transactions were held as 'Sham' and an arrangement between parties to evade taxes legitimately due to the revenue. With these facts of the appellant's case, protruding from all the sides and when these facts are juxtaposed with the provision of sec.271 (1)(c) of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the penalty levied by the AO was inconsistent with the fact that there was neither any sale nor any transfer of 1800 sq.ft area on the first floor of the property known as Madhu Sadan. The ld. Counsel submitted that vide agreement dated 20.7.1995 the property sold to the builder was to be demolished and as per the condition in the agreement the builder was to handover an area of 1800 sq. ft on the first floor of the new property after development to the assessee which was also condition in the old agreement dated 11.9.1993. The ld. Counsel submitted that the contention of assessee that interest free security deposit of ₹ 95 lakhs was to be refunded when the builder handed over the possession of the area of 1800 sq. Ft on the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders of authorities below. 7. We have considered the rival submissions and perused the material placed before us. We find that the assessee transferred the property to the builder vide agreement dated 11.9.1997 to M/s Lake End Constructions Pvt Ltd for development of the property while retaining 1800 sq. ft area on the first floor of the building. We also note that the assessee vide agreement dated 20.7.1994 entered with the said developer agreed to handover the possession of the entire property including 1800 sq. ft. area on the first floor of the property on the condition that the builder would pay interest free security deposit of ₹ 95 lakhs to the assessee and it would be refunded after the builder handed over 1800 sq. ft area ..... X X X X Extracts X X X X X X X X Extracts X X X X
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