2015 (11) TMI 123

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....No.1223/CHD/2012 for the assessment year 2006-07, claiming following substantial questions of law:- i) Whether in the present facts and circumstances of the case, the learned ITAT was justified in confirming the action of the authorities below in levying the penalty under Section 271(1) (c) on the disallowance of exemption under Section 54 for construction wherein the exemption under section 54 was allowed for purchase of plot, however the exemption under section 54 is available for the construction of residential house and not for the purchase of plot? ii)Whether in the present facts and circumstances of the case, the learned ITAT was justified in confirming the action of the authorities below in levying the penalty under section 271....

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....d. Aggrieved by the order, the assessee went in appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 19.5.2009, the appeal was partly allowed. The issue of disallowance of exemption under Section 54 of the Act was decided against the appellant. Thereafter, the Assessing Officer passed order under Section 271 (1)(c) of the Act. Against the penalty order, the assessee went in appeal before the CIT(A) which was dismissed vide order dated 24.9.2012, Annexure A.2. Aggrieved by the order, the assessee filed appeal before the Tribunal. Vide order dated 17.5.2013, Annexure A.3, the Tribunal partly allowed the appeal. The issue of penalty under Section 271(1)(c) on disallowance of exemption claimed under Section 54 amoun....

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....m. It was noticed in para 16 as under:- "16. The third addition made in the hands of the assessee was on account of disallowance of exemption claimed under section 54 of the Act. The assessee in the return of income had claimed deduction under section 54F of the Act which during the course of assessment proceedings was revised to the claim of deduction under section 54 of the Act. The assessee had claimed to have invested Rs. 8,32,000/- in the purchase of plot on 2.6.2005 and in respect of investment in construction of the property at Rs. 24,30,000/-. The Assessing Officer allowed the investment made in plot at Rs. 8,23,000/- as allowance under section 54 of the Act. However, the exemption claimed in respect of expenditure incurred on co....