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TMI Blog2020 (12) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... enue is rejected - ITA NO.2651/MUM/2019 - - - Dated:- 17-11-2020 - Shri C.N. Prasad, Hon'ble Judicial Member And Shri M. Balaganesh, Hon'ble Accountant Member For the Assessee : None For the Department : Ms. Usha Gaikwad ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals) 42, Mumbai [hereinafter in short Ld.CIT(A) ] dated 31.01.2019 for the Assessment Year 2012-13. 2. The only grievance of the Revenue in its appeal is that the Ld.CIT(A) deleted the penalty levied u/s. 271(1)(c) of the Act on the ground that quantum additions/disallowance were deleted by the Hon'ble ITAT vide order dated 18.10.2018 for the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act are deleted. 6. We have perused the order of the Tribunal in quantum proceedings in ITA.No. 7122/Mum/2016 dated 18.10.2018 and find that the only issue in the quantum proceedings was that the Assessing Officer treated the gains on sale of residential flat of the assessee as short term capital gain as against the claim of the assessee that it should be assessed as long term capital gain. The Tribunal allowed claim of the assessee observing as under: - 11. We have considered the rival submissions of the parties and have gone through the orders of the authorities below. The narrow dispute before us is whether the Capital Gain earn by assessee is short term or the long term capital gain and / or the assessee is entitled for ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nked to the progress of the construction. 12. The CBDT vide circular No. 471 [F. NO. 207/27/85-IT(A-II)], DATED 15- 10-1986 issued following instruction: 1. Sections 54 and 54F provide that capital gains arising on transfer of a longterm capital asset shall not be charged to tax to the extent specified therein, where the amount of capital gain is invested in a residential house. In the case of purchase of a house, the benefit is available if the investment is made within a period of one year before or after the date on which the transfer took place and in case of construction of a house, the benefit is available if the investment is made within three years from the date of the transfer. 2. The Board had occasion to examine as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be paid in instalments does not affect the legal position stated above. In view of these facts, it has been decided that cases of allotment of flats under the Self-Financing Scheme of the D.D.A. shall be treated as cases of construction for the purpose of capital gains. 13. The CBDT in Circular No. 672 dated 16-12-1993 issued following instructions: 1. Attention is invited to Board's Circular No. 471, dated 15-10-1986. It was clarified therein that cases of allotment of flats under the Self-Financing Scheme of the Delhi Development Authority (DDA) should be treated as cases of construction for the purposes of sections 54 and 54F of the Income-tax Act. The Board has since received representations that even in respect of allot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the possession of flat was given to the assessee on 15.05.1986. The allotment letter issued indicates the flat number and the balance amount payable. The assessee sold the flat on 06.01.1989 and claimed Long Term Capital Gain and further claimed the set off of capital on purchase of another flat. The Assessing Officer disallowed the claim of assessee that possession of flat was given only on 15.05.1986 and, therefore, the capital gain on sale of flat were Short Term Capital Gain. On appeal before the ld. CIT(A), the action of Assessing Officer was upheld. Tribunal also dismissed the appeal of the assessee. On further appeal before the Hon ble Delhi High Court, the a Long Term Capital Gain and was also entitled for set off under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee prior to 15.05.1986 was the right in the property. In such situation, it cannot be held that prior to that said date, the assessee was not holding the flat and the assessee was allowed. 7. Since the Tribunal accepted the claim of the assessee and deleted addition the consequential penalty u/s. 271(1)(c) of the Act has no legs to stand. In the circumstances we do not find any infirmity in the order passed in deleting the penalty since the very basis for levy of penalty i.e. addition made in the assessment proceedings was deleted by the Tribunal and in which case penalty will not survive. Thus, we confirm the order of the Ld.CIT(A) in deleting the penalty. Ground raised by the Revenue is rejected. 8. In the result, appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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