आदेश/ORDER 

PER RAMIT KOCHAR, Accountant Member:

This appeal, filed by Revenue, being ITA No. 6612/Mum/2017, is directed against appellate order dated 22.08.2017 in appeal no. CIT(A)-34/ITO-22(1)(4)/IT-179/2016-17, passed by learned Commissioner of Income Tax (Appeals)-34, Mumbai (hereinafter called “the CIT(A)”), for assessment year (AY) 2011-12, the appellate proceedings had arisen before learned CIT(A) from the penalty order dated 29.03.2016 passed by learned Assessing Officer (hereinafter called “the AO”) u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter called “the Act”) for AY 2011-12.

2. The grounds of appeal raised by Revenue in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called “the tribunal”) read as under:-

1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the amounting of Rs.24,14,101/- being penalty levied under section 271(1)(c) of the Income-tax Act, 1961, for the reason that the quantum addition made in the assessment has been deleted by the Hon’ble ITAT, ignoring the fact that the Department has filed appeal before the Hon’ble High Court against the said Hon’ble ITAT’s order dated 22.07.2016 and the appeal is still pending".

2."on the facts and in the circumstances of the case and in law, the Ld.CIT(A) deleted the penalty levied under section 271(1)(c) of the Income-tax Act, 1961 amounting to Rs.24,14,101/-, whereas an addition has been made on the basis that the assessee has not held the flat for three years and hence the capital gain of the assessee is treated as Short term capital gain resulting in disallowance of the claim made under section 54 of the Income-tax Act 1961, by investing in another residential flat".

3. "The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the AO be restored."

4. "The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary".

3. The brief facts of the case are that the assessee is an individual having income from business and income from other sources. The case of the assesseee was selected for framing scrutiny assessment u/s 143(3) read with Section 143(2) of the 1961 Act. The assessee had sold an immovable property for consideration of Rs. 70 Lakh having a market value of Rs. 1,15,87,600/- on 06.01.2011. The said property was gifted to the assessee by his father on 29.04.2008. The assessee has invested sale proceeds of the aforesaid property on purchase of a new residential flat for a consideration of Rs. 87,88,500/-. The assessee did not file any income under the head „Income from Capital Gains‟ in the computation of income furnished to the AO. The said sale and purchase of immovable property was captured by Revenue in ITS details of the department. During the course of assessment proceedings conducted by the AO u/s 143(3) read with Section 143(2) of the 1961 Act, the assessee filed copies of gift deed , copy of purchase deed of a new flat purchased and copy of agreement for purchase of flat by father of the assessee before the AO. On perusal of the purchase agreement entered into by the father of the assessee , the AO was of the opinion that the property which is sold was a short term capital asset as it was held by the assessee for not more than 36 months while the assessee was claiming the same to be long term capital asset. The assessee had claimed that he gave the possession of the property on 14th May 2011 vide clause 2(b) of the sale agreement, as against the sale agreement registered on 06.01.2011 which agreement provided for a period of 10/30 days for giving actual possession of flat by the vendor to the purchaser and hence period of holding of the said property was more than 36 months.

4. The AO as well learned CIT(A) rejected the contentions of the assessee in quantum and the matter finally reached tribunal which granted relief to the assesee in ITA no. 98/Mum/2015 vide appellate order dated 22.07.20