Case Law Details
Brief of the case:
Punjab & Haryana High Court held in Manpreet Kaur vs CIT that if the assesse had claimed exemption u/s 54 for utilizing the sales proceeds in the construction of the residential house then the onus to prove that the sales proceeds had actually been used in the construction of residential house in on assesse. If assesse failed to prove that the sales proceeds had actually been used in the construction of residential house then the exemption u/s 54 would be disallowed and penalty u/s 271(1)(c) would be levied. Assessee was required to satisfy the AO that sales proceeds had actually been utilized in the construction of residential house by presenting the bill of construction, proof of completion of construction etc.
Facts of the case:
Assessee had sold a residential house on 15-02-2006 for Rs 27 Lacs and after claiming exemption under Section 54F of the Act thereby claiming to have utilized in construction the whole of the sale proceeds upto 15.10.2006, net capital gain had been declared at nil. The assessee had claimed to have invested 8,32,000/- in the purchase of plot on 2.6.2005 and in respect of investment in construction of the property at 24,30,000/-. However, the exemption claimed in respect of expenditure incurred on construction was denied by the Assessing Officer as the assessee had failed to furnish any evidence in respect of the same during the assessment proceedings and expenditure for the purchase of plot was allowed.
As AO disallowed the exemption by Rs 24,30,000/-, so he levied penalty u/s 271(1)(c) for disclosing wrong particulars in return of income.
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