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TMI Blog2010 (10) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... The return of income was accompanied by a detailed statement showing the computation of the entire capital gain assessable and as well as non-assessable portion on account of deduction under section 54F arising from the same single property subjected to joint development. The Assessing Officer however restricted the exemption under section 54F to only one flat out of the 10 flats claimed by the assessee disagreeing with the various case laws cited by the assessee relating to exemption under Section 54/ 54F relating to meaning and interpretation of the word "a" used in the said provision of the Act in support of the claim for exemption of more than one flat under section 54 F. The various cases cited by the assessee in support of the interpretation that the exemption would be available for more than one flat were as follows:- 1) Smt. Fulwanti C. Rathod vs. ITO I.T.A. No 1092/M/1995 Dated 3-5-2002, 2) K.G. Vyas vs. 7th ITO (16 ITD 195)(Bom), 3) Shri. Khoobchand Madhavdas Makhija in ITA No. 659/2001/98-99 dated 14-12-2001, 4) Shri. Ratanchand Murarka in ITA No.4485/Mum/1999 dated 12-09-2001. The quantum assessment was affirmed by the Tribunal. & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 54F of the Income Tax Act by relying on various judgments. In brief the submission made by the appellant during the appellate proceedings are as under: 7.0 The Karnataka High Court in CIT vs. D. Ananda Basappa = [2009] 309 ITR 329 has considered the following question of law "Whether the Tribunal was correct in holding that out of the sale proceeds of the property bearing No. 9, Brunton Road, Bangalore, owned by the assessee he could invest the same in two residential flats bearing No. G-01 and G-02, and claim deduction in respect of both these flats in accordance with section 54 read with section 54F of the Act for the assessment year 1996-97?" The Hon'ble Karnataka High Court held as follows:- "A plain reading of the provision of section 54(1) of the Income-tax Act discloses that when an individual-assessee or Hindu undivided family- assessee sells a residential building or lands appurtenant thereto, he can invest capital gains for purchase of residential building to seek exemption of the capital gains tax. Section 13 of the General Clauses Act declares that whenever the singular is used for a word, it is permissible to include the plural. &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The appellant cannot be held to have concealed any particulars or furnished inaccurate particulars of joint development agreement merely because he claimed a deduction based on a view that was favorable to him when two divergent views were possible. The AO also has conceded that all the relevant particulars of computation of capital gain was furnished. 8.1 I have considered the appellant submission on law and on facts. I agree with the proposition that simply because the assessment stood confirmed up to the tribunal it does not automatically leads to the conclusion that the facts of the case deserve penalty u/s 271 (1)(c) of the Act. There being no concealment or omission of any particulars, the levy of penalty u/s 271(1)(c) is questionable when various appellate authorities, on the issue under question, hold divergent view. Further the High Court in CIT vs. Mata Prasad [2005] 278 ITR 354 (All) found no merit in departmental appeal questioning the deletion of penalty on the grounds, that there was no fraud or willful concealment on the part of the assessee based on appreciation of evidence and material placed on record although there was an addition of Rs. 38,000/- uphel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular its own decision in the case of D Ananda Basappa (91 ITD 53). 5.1 The assessee has furnished all particulars on facts and in law. Nowhere has the AO said that the particulars furnished by the assessee are inaccurate or in correct. He levied penalty only because judicial decisions are against the assessee. It is not the case of the revenue that the capital gain was suppressed or concealed. The particulars furnished were not faulted or found inadequate and incorrect. The taxable capital gain is shown in the return of income and non-taxable capital gain claimed according to the assessee, which is explained elaborately above was detailed in the computation sheet that accompanied the return of income. 5.2 Even assuming the assessee's claim is wrong; the Tribunal order with regard to the quantum assessment would show there is plethora of decisions for and against the assessee and the issue can be considered as debatable. In this context, it is relevant to quote the judgment of the Hon'ble Supreme Court in the in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. = [2010] 322 ITR 158 which reads as follows:- "A mere making of a claim, which is not sustainabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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