2002 (10) TMI 735

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... llowed. He further claimed exemption of Rs. 1,90,000 under section 54F on the ground that above amount would be spent on construction of a house. The Assessing Officer in the course of assessment proceedings, found that the assessee did purchase a plot but did not construct residential house nor deposited the amount in the specified account with the bank. He held that the assessee was not entitled to deduction of Rs. 1,90,000 claimed under section 54F. The above amount was treated as assessee s income and accordingly penalty notice under section 271(1)( c ) was issued. 3. After hearing the assessee, the Assessing Officer imposed penalty of Rs.1,02,600 vide order dated 25-10-1995. In the penalty order, he observed that the assessee bel .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... on 271(1)( c ) of the Act. The penalty imposed was accordingly cancelled. 5. The Revenue has come up in appeal. The Ld. D.R. in support of the appeal drew our attention to observations of the Assessing Officer wherein he has held that the assessee an educated man did not deliberately deposit sum of Rs. 1.60 lacs in the prescribed scheme. Alternatively, the assessee did not invest the amount in the construction of a residential house within the stipulated period. It was, therefore, a clear case of furnishing of inaccurate particulars in the return. A false deduction was claimed and, therefore, levy of penalty was fully justified. The ld. Counsel for the assessee, on the other hand, relied on the order of the CIT(A). He further filed befo .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... see is entitled to construct the house within three years of the sale of the property. As the return is required to be filed much before the above stipulated period, the statute provides that unutilised amount be deposited in a specified account with the bank. So the charge is that instead of depositing the above amount in a specified account, the assessee kept the amount in some other account. In our considered opinion, it is not a fit case where penalty under section 271(1)( c ) should have been imposed. The penalty was imposed merely because the amount was not kept in a specified account. According to the assessee, the specified account was not available in bank at Sahnewal where the agricultural land sold by him was situated. The Assess .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X