Tribunal upholds penalty in long-term capital gain case. Commissioner's order overturned.

The appeal against dropping penalty proceedings for surrendering long term capital gain during assessment was dismissed as the Tribunal found the assessing authority had considered the respondent's reply before dropping the penalty proceedings. The Commissioner's order setting aside the dropping of penalty proceedings was overturned by the Tribunal.

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The respondent surrendered long term capital gain during assessment for 2001-02 to avoid penalty. Penalty proceedings were dropped after respondent's reply. Commissioner set aside the order, but Tribunal allowed the appeal. Tribunal found assessing authority considered reply before dropping penalty proceedings. No substantial question of law, appeal dismissed.

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