Penalty cannot be levied for mere disallowance of claim of deduction u/s 54

ITO Vs Shri Kantilal G. Kotecha (ITAT Mumbai)

We find that with regard to claim of deduction u/s 54 of the Act, this tribunal in quantum proceedings had granted deduction u/s 54 of the Act to the extent of payments made within the prescribed limitation period i.e payments made within one year prior to the date of transfer of original property. The ld AR argued that it was a bonafide belief on the part of the assessee that since the last payment for purchase of new house was made within the prescribed limitation period by the

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