RAJESH BUILDERS, MUMBAI V. DCIT 22(2), MUMBAI

ITA 1119/MUM/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7089 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 16-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Document seized
• Section: 148; 271(1)(c); 143(3); 80IB

Judgement Text

ITA No.1119/Mum/2017 & ITA No.1299/Mum/2021 A.Y.2007-08 M/s Rajesh Builders Vs. ACIT-22(2) 1 IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORESHRI AMARJIT SINGH, ACCOUNTANT MEMBER & SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.1119/Mum/2017 (A.Y 2007-08) M/s Rajes h Builders 1/1 Ghanshyam Baug, Cama Lane, Hansoti Road, Ghatkopar (W) Mumbai – 400086 Vs. ACIT 22(2) Mumbai लेख सं./ज आइआर सं./PAN/GIR No.: AAEFR6687G Appellant .. Respondent ITA No.1299/Mum/2021 (A.Y 2007-08) Rajesh Builde rs 1/1 Ghanshyam Baug, Cama Lane, Hansoti Road, Ghatkopar (W) Mumbai – 400086 Vs. DCIT, Circ le-27(3) Vashi Station Complex, Vashi, Maharas htra - 400703 लेख सं./ज आइआर सं./PAN/GIR No.: AAEFR6687G Appellant .. Respondent Appellant by : Mani Jain Respondent by : T. Shankar Date of Hearing 22.02.2022 Date of Pronouncement 11.03.2022 ITA No.1119/Mum/2017 & ITA No.1299/Mum/2021 A.Y.2007-08 M/s Rajesh Builders Vs. ACIT-22(2) 2 आदेश / O R D E R PER AMARJIT SINGH, AM: The present appeal filed by the assessee is directed against the order passed by the CIT(A)-25, Mumbai, dated 11.11.2016 which in turn arises from the assessment order passed by the A.O u/s 143(3) r.w.s 147 of the I.T. Act, dated 01.03.2013 for A.Y. 2007-08. The assessee has raised the following grounds before us: “1. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax erred in confirming the action of Ld. AO in not allowing deduction of Rs. 2,76,05,035/- u/s. 80IB(10). 2. The Appellant craves leaves to add, to amend, alter, modify and/or withdraw any or all of the above grounds of appeal, each of which are without prejudice to one another. The appellant prays this Hon'ble Tribunal to delete the additions/disallowance by the Ld. A.O and confirmed by the Ld. CIT(A). 2. The fact in brief is that assessee has filed its original return of income on 31.10.2007 declaring total income at Rs.13,71,620/-. The assessment u/s 143(3) of the Act was completed on 29.12.2009 determining total income of Rs.23,93,82,030/- after adding profit from Manish Garden (Rs.2,42,51,035/-), profit on sale of land (Rs.11,04,54,860/-), long term capital gain (Rs.9,09,29,507/-) and bank interest (Rs.3,25,009/- to the total income. The ld. CIT(A) vide order dated 14.10.2010 confirmed the order of the assessing officer. Thereafter the assessment for the year under consideration was reopened u/s 147 of the Act, on the basis of survey u/s 133 of the Act conducted in the offices/sites of the assessee at Pune & Mumbai on 23.12.2008. During the course of survey at the premises of assessee it was found that as per annexure P the assessee has received an amount of Rs.33,54,000/- as ITA No.1119/Mum/2017 & ITA No.1299/Mum/2021 A.Y.2007-08 M/s Rajesh Builders Vs. ACIT-22(2) 3 on money in cash during A.Y. 2006-07 relevant to assessment year under consideration and the said annexure contained the detail of entries of cash receipts exceeding Rs.1 lac for the period 12.06.2002 to 22.10.2008. In response to notice u/s 148 dated 26.03.2012 the assessee filed return of income on 24.01.2013 wherein an amount of Rs.33,54,000/- was shown as a part of total business income of the assessee. The assessee has claimed an amount of Rs.2,76,05,035/- as deduction u/s 80IB of the Act on the profit from its Pimpari Projects. This claim of deduction was arrived at by clubbing profit from Pimpari Project (Manish Garden) (Rs.2,42,51,035/-) and unexplained income (Pimpari Project) (Rs.33,54,000/-). During the course of assessment the assessee explained vide letter dated 15.03.2013 before the assessing officer that it is entitled for deduction u/s 80IB(10) of the Act on the aforesaid income which is attributable to the business of the assessee. Regarding the claim of deduction u/s 80IB(10) of the Act, the AO stated that the project was completed in 2008-09, therefore, assessee was not entitled for deduction u/s 80IB(10) in the assessment year 2007-08. 3. The assessee being aggrieved with the order of the A.O has carried the matter before the CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee vide order dated 11.11.2016 retreating the facts stated by the assessing officer. 4. During the course of appellate proceedings before us, the ld. Counsel at the outset referred the decision of coordinate bench in the case of assessee itself vide ITA No. 2955/Mum/2012 viz. Rajesh Builder. ITAT held that in view of the decision of Hon’ble jurisdictional Bombay High Court in the case of CIT Vs. Vandana Properties (2013) 353 ITR 36 (Bom) deduction u/s 80IB(10) is allowable where a new housing project is constructed at a plot of land having minimum area of 1 acre but with ITA No.1119/Mum/2017 & ITA No.1299/Mum/2021 A.Y.2007-08 M/s Rajesh Builders Vs. ACIT-22(2) 4 existing housing project and entitlement to construction additional building on plot of land. In consequent upon the Hon’ble ITAT’s order No. 2955/Mum/2012 vide order giving effect dated 13.12.2017 the assessing officer has allowed the claim of deduction u/s 80IB(10) for the year under consideration to the amount of Rs.2,41,05,224/-. It is further submitted by the ld. Counsel that the remaining deduction u/s 80IB(10) in respect of amount of Rs.33,54,000/- pertaining to unaccounted receipt from the project added u/s 143(3) r.w.s 147 of the Act was required to be allowed to the assessee. The ld. Counsel has referred the decision of ITAT, Pune in the case of M/s Surana Mutha Bhasali Developers Vs. ACIT, Circle 11(2) vide ITA No. 2825/Pun/2017 dated 02.07.2021 wherein held that income received as on money is eligible for deduction u/s 80IB(10) of the Act. On the other hand, the ld. D.R relied on the order of the lower authorities. 5. Heard both the sides and perused the material on record. Without retreating the facts as elaborated above, during the course of survey proceedings carried out on 23.12.2008 the assessee has disclosed unaccounted receipt from Pimpari Project amounting to Rs.33,54,000/-. The assessee has claimed deduction u/s 80IB(10) of the Act on the aforesaid unaccounted receipt of Rs.33,54,000/-. In the original assessment u/s 143(3) the claim of deduction u/s 80IB of the Act for assessment year 2007-08 was denied on the ground that project was not completed in that year. However, the ITAT vide order Number 2955/Mum/2012 has held that assessee is entitled for the deduction after following the decision of Hon’ble Bombay High Court in the case of CIT Vs. Vandana Properties (2013) 353 ITR 36 (Bom). After giving effect ITA No.1119/Mum/2017 & ITA No.1299/Mum/2021 A.Y.2007-08 M/s Rajesh Builders Vs. ACIT-22(2) 5 to the order of ITAT the assessing officer has already allowed the claim of deduction u/s 80IB(10) of Rs.2,41,05,224/- vide order dated 13.10.2017. In respect of the remaining amount of Rs.33,54,000/- we find that it is demonstrated from the document seized during the course of survey that this unaccounted receipt of Rs.33,54,000/- was attributable to the housing project and assessee has claimed deduction u/s 80IB(10) of the Act. We consider that the coordinate bench of the ITAT in the case of M/s Surana Mutha Bhasali Developers Vs. ACIT, Circle 11(2) has clearly held that on money received is qualified for deduction u/s 80IB(10) of the Act. The relevant part of the order of ITAT is reproduced as under: “5. The doctrine of approbate and reprobate does not allow the Department to blow hot and cold in the same breath, thereby accepting one consequence arising from the statement of the assessee while rejecting the other one. When the assessee made a surrender with the clear backdrop of having received `on money’ and the Revenue accepted the same while including it in the total income, it cannot later on claim that no deduction u/s 80IB(10) can be granted on the same as the assessee failed to prove that the flat bookers gave such on-money. If we accept the view point of the Revenue that source of the income is unexplained and does not pertain to the housing project, then, in the given facts, when there is no positive material other than the assessee’s statement of receiving such an amount as `on money’, then there is no income in the first instance calling for its inclusion in the total income. Once it is agreed to be `on-money’ from the flats- bookings at the time of its inclusion in the total income, a fortiori, such an income, being from sale of flats albeit received as on-money, qualifies for the deduction as well. We, therefore, overturn the impugned order on this score and order to allow deduction u/s 80IB(10) on such amount.” After perusal of material on record we find that it is undisputed fact that impugned on money of Rs.33,54,000/- was pertained to the undisclosed business receipt attributable to the Pimpri project of the assessee. The A.O has not proved contrary to the claim of the assessee that the aforesaid on money was business receipt. Therefore, following the decision of the coordinate bench of Pune as supra. We direct the A.O to allow deduction u/s 80IB(10) on the amount of Rs.33,54,000/-. Accordingly, the appeal of the assessee is allowed. ITA No.1119/Mum/2017 & ITA No.1299/Mum/2021 A.Y.2007-08 M/s Rajesh Builders Vs. ACIT-22(2) 6 ITA No. 1299/Mum/2021 A.Y. 2007-08 6. The solitary ground of appeal of the assessee is filed against the decision of ld. CIT(A). The following grounds has been raised by the assessee: “On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in passing the impugned order and dismissing the appeal, filed by the appellant against the penalty order u/s 271(l)(c) of the Act, under the impression that the appellant has opted for Vivaad Se Vishwas Scheme in respect of the said appeal, disregarding the fact that the appellant had expressly informed CIT(A)of not having opted for the scheme and that the request for withdrawal of appeal on the e-portal was sent inadvertently.” The fact in brief is that A.O has levied penalty u/s 271(1)(c) of the Act vide order dated 31.03.2018 for Rs.11,28,956/-. The assessee has filed appeal before the ld. CIT(A), however the ld. CIT(A) has dismissed the appeal of the assessee holding that assessee has opted for Vivad se Vishwas Scheme, vide application dated 21.01.2021. 7. During the course of appellate proceedings before us the ld. Counsel contended that assessee has not opted for Vivad se Vishwas Scheme in respect of the impugned penalty levided by the assessing officer vide order dated 31.03.2018. In this regard the assessee has filed paper book comprising copies of form No. 1 & 5 of Vivad se Vishwas Scheme along with submission made before the ld. CIT(A). On the other hand, the ld. D.R could not controvert the contention of the ld. Counsel. ITA No.1119/Mum/2017 & ITA No.1299/Mum/2021 A.Y.2007-08 M/s Rajesh Builders Vs. ACIT-22(2) 7 8. Heard both the sided and perused the material on record. The ld. CIT(A) has dismissed the appeal of the assessee holding that assessee has opted for Vivad se Vishwas Scheme vide application dated 21.01.2021. However, the ld. Counsel submitted that the assessee has not opted for Vivad se Vishwas Scheme in respect of the appeal filed against levied of penalty of Rs.11,28,956/- pertaining to the year under consideration. After considering the submission of the assessee and material on record we restore this issue to the order of the ld. CIT(A) for deciding afresh on merit after taking into consideration the submission of the assessee that they have not availed option for the Vivad se Vishwas Scheme, pertaining to the impugned issue of penalty levied u/s 271(1)(c) of the Act. Therefore, this ground of appeal of the assessee is allowed for statistical purposes. 9. In the result, the appeal of the assessee vide ITA No. 1119/Mum/2017 is allowed for allowing claim of deduction u/s 80IB(10) on income of Rs.33,54,000/- and appeal vide ITA No. 1299/Mum/2021 is allowed for statistical purpose. Order pronounced in the open court on 11.03.2022 Sd/- Sd/- (SANDEEP SINGH KARHAIL) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 11.03.2022 PS: Rohit ITA No.1119/Mum/2017 & ITA No.1299/Mum/2021 A.Y.2007-08 M/s Rajesh Builders Vs. ACIT-22(2) 8 आदेश की े /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. संबंिधत आयकर आय / The CIT(A) 4. आयकर आय ( ) / Concerned CIT 5. िवभ ग य िति िध, आयकर य िधकरण, हमद ब द / DR, ITAT, Mumbai 6. ग $% फ ई / Guard file. आदेशानुसार/BY ORDER, स ािपत ित //True Copy// ( Asst. Registrar) ITAT, Mumbai