Aftab Abdul Rehman Badshah, Mumbai vs Assessee

सव ी डी. म मोहन, उपा य एवं नरे कुमार ब लै या, लेखा सद य के सम

BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND

SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER

आयकर अपील सं/ I.T.A. No. 7307/Mum/2013 ( नधारण वष / Assessment Year : 2009-10 Shri Aftab Abdul Rehman बनाम/ The ITO, Ward 13(1)(2), Badshah, Mumbai Vs. 286, Badshah Stores, Abdul Rehman Street, Mumbai-400 003 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. :ADDPA 6466C (अपीलाथ /Appellant) .. ( यथ / Respondent) अपीलाथ ओर से/ Appellant by: Shri Vimal Punmiya यथ क ओर से/Respondent by: Shri Azghar Zain

सन ु वाई क तार ख / Date of Hearing :13.05.2015 घोषणा क तार ख /Date of Pronouncement :20.05.2015

आदे श / O R D E R

PER N.K. BILLAIYA, AM:

This appeal by the assessee is preferred against the order of the Ld. CIT(A)-24, Mumbai dt. 6.9.2013 pertaining to assessment year 2009-

10.

2. The sole grievance of the assessee is that the Ld. CIT(A) erred in upholding the levy of penalty made u/s. 271(1)(c) of the Act.

2 ITA. No. 7307/M/2013 3. The roots for the levy of penalty lie in the assessment order dt. 21.12.2011 Made u/s. 143(3) of the Act wherein the Assessing Officer noticed that the assessee has made Long Term Capital gain from which it has claimed exemption u/s. 54F of the Act. After carefully perusing the details, the AO allowed the deduction u/s. 54F partly and in respect of the balance claim, penalty proceedings were initiated u/s. 271(1)(c) of the Act.

3.1. During the course of penalty proceedings, the assessee was allowed an opportunity to present his case as to why penalty should not be levied for false claim u/s. 54F of the Act. The assessee explained that there is no false claim made on the contrary all the details relating to the claim of deduction u/s. 54F was furnished during the course of the assessment proceedings itself. It was further pointed out that the claim was withdrawn partly during the course of the assessment proceedings itself therefore it cannot be said that the assessee has willfully concealed the particulars of income or filed inaccurate particulars of income. The AO did not accept the submissions made by the assessee and proceeded by levying minimum penalty of Rs. 2,55,535/- u/s. 271(1)(c) of the Act.

4. The assessee carried the matter before the Ld. CIT(A) but without any success.

5. Before us, the Ld. Counsel for the assessee vehemently stated that u/s. 54F of the Act the stipulation is in relation to the purchase of property before one year of the sale, there is no stipulation in so far as the payment for the property is concerned. The Ld. Counsel further pointed 3 ITA. No. 7307/M/2013

out that no doubt the assessee has advanced loan of Rs. 12.75 lakhs much earlier to the builder but at the same time in the sale deed, the said loan has been converted into sale consideration therefore the assessee had made claim u/s. 54F of the Act which cannot be said to be a false claim. In respect of the additions made to the property, it is the say of the Ld. Counsel that all the necessary details were furnished before the AO. The Ld. Counsel concluded by saying that merely because the assessee had withdrawn the claim would not amount to filing of inaccurate particulars of income or concealment of income.

6. Per contra, the Ld. DR strongly supported the orders of the First Appellate authority.

7. We have carefully perused the orders of the authorities below. We have also gone through the assessment order. It is an undisputed fact that the assessee has tendered loan to the builder much earlier to the date of purchase. It is also an undisputed fact that the loan amount of Rs. 12.75 lakhs was converted into sale consideration which is also evident from the sale deed placed on record. Whether the assessee is entitled for deduction u/s. 54F of the Act on this conversion of loan into sale consideration is definitely a highly debatable issue, therefore, in our considered opinion, penalty cannot be levied u/s. 271(1)(c) of the Act in respect of the claim of Rs. 12.75 lakhs. In so far as the claim of deduction in respect of additions/alteration of Rs. 08 lakhs is concerned, we find that the assessee had furnished all the details although he failed to succeed in claiming the deduction but that by itself would not make the claim a false claim. We, therefore, do not find this a fit case for the levy of penalty u/s. 271(1)(c) of the Act.

4 ITA. No. 7307/M/2013 8. In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 20th May, 2015

Sd/- Sd/-

(D.MANMOHAN ) (N.K. BILLAIYA) उपा य /VICE PRESIDENT लेखा सद य / ACCOUNTANT MEMBER मंब ु ई Mumbai; दनांक Dated : 20 May , 2015 th

व. न.स./ RJ , Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु त(अपील) / The CIT(A)-

4. आयकर आयु त / CIT

5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब ु ई / DR, ITAT, Mumbai

6. गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, स या पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मंब ु ई / ITAT, Mumbai