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Bhavana Thanawala Versus Income Tax Officer Ward 18 (2) (4) Mumbai

ITA No. 1171/Mum/2009 - Dated:- 30-4-2010 - SHRI S V MEHROTRA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER Appellant by: Shri Jignesh R Shah. Respondent by: S/Shri Anil Kumar Mishra and S S Rana O R D E R PER VIJAY PAL RAO, JM This appeal by the assessee is directed against the order dated 25.10.2008 of CIT(A)-XVIII, Mumbai arising from the penalty order passed u/s 271(1)(c) of the Act for the assessment year 1997-98. 2. Only issue arises for a consideration and adjudication whethe .....

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s available to the assessee in the same premises in which the assessee has acquired further share of other co-owners. By getting her larger share in the said property there is no addition to higher right to stay or additional enjoyment in the said property except for accounting purposes. Thus the AO held that the assessee already owning a residential house, therefore, the exemption u/s 54F is not available. 4. The issue was decided against the assessee on further appeal up to this Tribunal. The .....

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that the assessee disclosed all the material facts to the computation of total income and there is no case of concealment or furnishing inaccurate particulars of income by the assessee. He has referred to Explanation to Section 271(1)( c ) and submitted that the explanation offered by the assessee was bonafide one because the assessee was under the bonafide belief that the share in the property let out does not bar the claim of the assessee under section 54F. Therefore, the assessee was under im .....

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ur of the assessee in the case of the assessee s sister then there is no reason to dis-believe bonafide belief of the assessee for making the claim u/s 54F. He has relied upon thee decision of the Hon ble Supreme Court in the case of CIT V/s Reliance Petroproducts Pvt.Ltd reported in 322 ITR 158(SC) and contended that for in correct claim in law cannot tantamount to furnish inaccurate particulars of income. 6. On the other hand, the learned DR has submitted that the assessee claimed for exemptio .....

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s leviable and the assessee cannot be take a plea of ignorance of law. He has relied upon the orders of the lower authorities. 7. We have considered the rival contentions and relevant record. The AO has disallowed the exemption u/s 54F on the ground that the assessee has just acquired further share in he same property by investing the long term capital gains from the sale of shares. The AO was of the view that when the assessee was already having a residential property then the exemption u/s 54F .....

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as made claim of exemption u/s 54F which was disallowed by the AO as the same was not available to the assessee because the assessee was already having a share in the residential premises. In view of the decision of this Tribunal in assessee s sister case In ITA No.6257/Mum/2002 dated 24.2.2006, it cannot be ruled out that the assessee was under the bonafide belief about the entitlement of the claim u/s 54F. Therefore, the explanation of the assessee in our view is not only bonafide but also sub .....

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not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false, Such not being the case, there would be no question of inviting the penalty under section 271(1)(c) of the Act. A mere making of the claim which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of he assessee. Such claim made in .....

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that since the assessee had claimed excessive deductions knowing that they are incorrect, it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms ; (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an exaggerated amount ) claimed and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one s income as well as .....

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not, in our opinion, attract the penalty under section 271(1)(c). If we accept the contention of the revenue then in case of every return where the claim mad is not accepted by the AO for any reason, the assessee will invite penalty under section 271(1)(c). That is clearly not the intendment of the Legislature. 13. In this behalf the observations of this court made in Sree Krishna Electricians V/s State of Tamil Nadu (2009) 23 VST 249 as regards the penalty are apposite. In the aforementioned de .....

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