2014 (4) TMI 857

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.... Appellate Tribunal, Bangalore Bench-'B' (for short 'the Tribunal'). The Tribunal upheld the Long Term Capital Gain Tax (for short 'LTCG') and denied exemption under Section 54-F of the Act and so also penalty under Section 271(1)(c) of the Act. 2. Both the appeals before the Tribunal were filed by the appellant-assessee against two different orders passed by the 1st Appellate Authority, both dated 11.08.2006. By the first order, the Appellate Authority upheld the order of the Assessing officer, whereby, he brought capital gain of Rs.5,15,970/- to LTCG tax and initiated penalty proceedings under Section 271(1)(c) separately. In view thereof, a separate order imposing penalty under Section 271(1) (c) came to be passed by the Assessing Off....

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.... 148 of the Act. The assessment, thereafter, was completed accepting the return, so filed in regard to the capital gains and the penalty proceedings under Section 271(1)(c) were initiated. 6. The Assessing officer initiated penalty proceedings under Section 274 r/w Section 271(1)(c) of the Act against the assessee by issuing notice dated 25.11.2005. In response to the notice, the assessee filed reply dated 25.05.2006. It would be advantageous to reproduce the reply for better appreciation of the case pleaded by the assessee. The reply dated 25.05.2006 reads thus:-         "1. In my case the assessment year 2003- 04 has been completed on 25.11.2005 by bringing to tax the long term capital gain of Rs.2....

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....23 lakh. But, unfortunately to my bad luck the property is under litigation among the family members of Smt.B.J.Prema who have brought stay on the property. Though the title of the property is very clear and B.J.Prema whos is also my relative has promised to register the property is my name after the case is settled. Now, I am running from pillar to post and though I had sold my property and invested the amount in another property I am suffering due to mental stress and stain due to the litigation inspite of paying the long term capital gain tax. I am enclosing the copies of the court papers and stay order for your kind consideration.         6. I have neither concealed my income nor have furnished inac....

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....e purchase of new property. The Assessing Officer also noticed that the assessee had not invested the amount for purchase of residential property. These findings of the Assessing Officer were confirmed by the first Appellate Authority and then by the Tribunal. 8. At the outset, we find that the Assessing Officer quoted wrong provision of law viz., Section 54 when admittedly, the exemption was claimed under Section 54F of the Act. The assessee had sold a plot of land for Rs.30,00,000/- vide registered sale deed dated 11-12-2002 and he was supposed to invest/utilize the said amount for purchasing a residential house on or before 10- 12-2004 or to construct a residential house on or before 10- 12-2005 as contemplated by Section 54F of the A....