The ACIT, Central Circle-2(4), Ahmedabad V. M/s. Swagat Infrastructure Pvt.Ltd., Ahmedabad

ITA 1378/AHD/2008

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6460 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 17-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 27/5/2011 DRAFTED ON: 30 /5/2011 ITA NO.1378/AHD/2008 ASSESSMENT YEAR : 2003-04 ACIT CENTRAL CIRCLE 2(4) AHMEDABAD VS. M/S.SWAGAT INFRASTRUCTURE PVT.LTD. 202, SHIKHAR COMPLEX NVRANGPURA, AHMEDABAD PAN/GIR NO. : AACCS 1351 H ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI P.L. KUREEL, SR.D.R. RESPONDENT BY: -NONE- O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHI CH HAS EMANATED FROM THE ORDER OF THE LEARNED CIT(APPEALS)-III, AHM EDABAD DATED 25/01/2008 AND THE ONLY GRIEVANCE OF THE REVENUE IS AGAINST THE DELETION OF PENALTY LEVIED U/S.271(1)(C) OF THE I.T.ACT OF R S. 5,42,033/-. 2. ON THE DATE OF HEARING NO ONE APPEARED FROM THE SIDES OF THE RESPONDENT-ASSESSEE, THOUGH THE NOTICE HAS BEEN SE RVED BY THE REVENUE AS PER THE INTIMATION PLACED ON RECORD. THEREFORE, WE HAVE DECIDED TO PROCEED EX-PARTE QUA THE RESPONDENT-ASSESSEE AFTER HEARING LEARNED DEPARTMENTAL REPRESENTATIVE MR.P.L. KUREEL. ITA NO.1378/AHD /2008 ACIT VS. M/S.SWAGAT INFRASTRUCTURE P.LTD. ASST.YEAR 2003-04 - 2 - 3. WE HAVE PERUSED THE CORRESPONDING PENALTY ORDER DATED 30/03/2007 U/S.271(1)(C) OF THE I.T.ACT AND HAVE NO TICED THAT THE ASSESSEE HAS CLAIMED A DEDUCTION U/S.80IB(10) OF RS.14,74,92 1/- WHICH WAS DISALLOWED AND THE PENALTY WAS INITIATED. WHILE IM POSING THE PENALTY, THE ASSESSING OFFICER HAS MENTIONED THAT AS PER THE REQUIREMENT OF LOW DEDUCTION U/S.80IB(10) OF THE I.T.ACT SHOULD NOT BE ALLOWED UNLESS THE ACCOUNTS OF THE UNDERTAKING HAVE BEEN AUDITED AND R EPORT IS FURNISHED ALONGWITH RETURN IN FORM NO.10CCB. HE HAS NOTED TH AT SINCE THE ASSESSEE HAD FAILED TO FILE THE REQUISITE REPORT, T HE CLAIM WAS DISALLOWED AND ESTABLISHED THAT THE REQUISITE INFORMATION WAS NOT FURNISHED WITH THE PURPOSE TO CONCEAL THE PARTICULARS. ACCORDINGLY, T HE IMPUGNED PENALTY WAS LEVIED. THE MATTER WAS CARRIED BEFORE THE FIRS T APPELLATE AUTHORITY WHO HAD REVERSED THE FINDINGS OF THE ASSESSING OFFI CER BY ASSIGNING FOLLOWING REASONS:- 5. THE CONTENTIONS WERE CONSIDERED CAREFULLY. IT IS SEEN THT THE ASSESSMENT AND PENALTY PROCEEDINGS ARE SEPARATE. T HE REASONING GIVEN IN THE ASSESSMENT ORDER CONSTITUTES EVIDENCE AND FORMS THE BASE FOR LEVY OF PENALTY U/S.271(1)(C). THE FINDIN G IN THE ASSESSMENT ORDER, HOWEVER IS NOT CONCLUSIVE FOR PUR POSES OF SECTION 271(1)(C). IN THE FACTS OF THE APPELLANT, IT HAD BEEN CONTENDED THAT THE CLAIM OF DEDUCTION U/S.80IB(10) WAS IN THE BONA FIDE BELIEF THAT ITS BUSINESS WAS SUBSERVIENT AND R ELATING TO CONSTRUCTION WORK. A LEGAL OPINION HAD BEEN OBTAIN ED INDEPENDENTLY. IN THE RETURN OF INCOME FILED ON 17 /11/2003, INCOME FROM BUSINESS OR PROFESSION WAS SHOWN AT RS. 14,59,986/- AND FROM OTHER SOURCES AT RS.15,015/- WHILE THE DED UCTION UNDER CHAPTER VI-A WAS SHOWN AT RS.14,74,921/-. IN THE E NCLOSED STATEMENT OF TOTAL INCOME, THE DEDUCTION OF THE ENT IRE GROSS TOTAL INCOME WAS SHOWN WITH A NOTING THAT THE CLAIM OF DE DUCTION U/S.80IB HAS BEEN MADE IN VIEW OF HIS WORK AS A DEV ELOPER AND ITA NO.1378/AHD /2008 ACIT VS. M/S.SWAGAT INFRASTRUCTURE P.LTD. ASST.YEAR 2003-04 - 3 - SEPARATE ACCOUNT FOR 80IB RECEIPTS AND EXPENDITURE WAS ENCLOSED. A BIFURCATION OF THE P & L ACCOUNT, AND FORM NO.10C CB WAS ALSO FILED, AS PER THIS NOTING, WITH THE RETURN. IN ANY CASE, THE APPELLANT HAD DISCLOSED THE FACT OF HIS SEEKING CLAIM OF DEDU CTION U/S.80IB, BEFORE THE A.O. THE DISALLOWANCE OF THE CLAIM BY T HE A.O. AND CONFIRMATION OF THIS ACT BY THE CIT(A) IN THE BACK DROP OF ALL DETAILS HAVING BEEN DISCLOSED, ONLY CONSTITUTE A DI SALLOWANCE AND NOT A VALID GROUND FOR IMPOSING THE PENALTY U/S.271 (1)(C). THE A.O. HAS NOT POINTED OUT TO ANY OF THE MATERIAL FAC TS RELATING TO COMPUTATION OF INCOME THAT HAD NOT BEEN DISCLOSED. THE JUDICIAL DECISIONS CITED BEFORE ME, HEAVE HELD THAT THE DISA LLOWANCE OF CLAIM DOES NOT AMOUNT TO CONCEALMENT AND THAT THE F INDINGS IN THE ASSESSMENT ORDER ARE NOT CONCLUSIVE FOR THE PURPOSE OF LEVY OF PENALTY. IN THE CASE OF PANDIT GOVIND PRASAD MISHR A VS. CIT, 238 ITR 338 (ALL.) IT WAS HELD THAT WHEN THE ASSESSEE W AS UNDER A MISTAKEN BELIEF PENALTY WOULD NOT BE LEVIED U/S.271 (1)(C). THUS, IN THESE FACTS AND CIRCUMSTANCES AND THE JUDICIAL DECI SION(S), THE PENALTY IMPOSED BY THE A.O. IS NOT SUSTAINABLE AND THE PENALTY ORDER IS THEREFORE CANCELLED. 4. NOW BEFORE US, AN ORDER OF THE TRIBUNAL IN RESP ECT OF THE QUANTUM APPEAL FOR DISALLOWANCE OF SECTION 80IB(10) OF THE I.T.ACT BEARING ITA NO.871/AHD/2006 OF ITAT D BENCH AHMEDABAD FOR ASS ESSMENT YEAR 2003-04 DATED 04/12/2008 TITLED AS SWAGAT INFRASTRU CTURE PVT.LTD. VS. ITO HAS BEEN PLACED, WHEREIN AS PER THE FOLLOWING P ARAGRAPH NO.8, THE ISSUE OF CLAIM OF DEDUCTION HAS BEEN RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER; REPRODUCED BELOW:- 8. IN VIEW OF THE FORGOING, FOR THE ENDS OF JUSTIC E, WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND RESTOR E THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE AO SHALL LOOK INTO THE AGREEMENT ENTERED INTO BY T HE ASSESSEE WITH THE LANDOWNER AND DECIDE WHETHER THE ASSESSEE HAS I N FACT PURCHASED THE LAND FOR A FIXED CONSIDERATION FROM T HE LANDOWNER ITA NO.1378/AHD /2008 ACIT VS. M/S.SWAGAT INFRASTRUCTURE P.LTD. ASST.YEAR 2003-04 - 4 - AND HAS DEVELOPED THE HOUSING PROJECT AT ITS OWN CO ST AND RISKS INVOLVED IN THE PROJECT. IN CASE THE AO FINDS THA T PRACTICALLY THE LAND HAS BEEN BOUGHT BY THE DEVELOPER AND DEVELOPER HAS ALL DOMINANT CONTROL OVER THE PROJECT AND HAS DEVELOPED THE LAND AT HIS OWN COST AND RISKS, THE AO SHOULD ALLOW THE DE DUCTION TO THE ASSESSEE U/S.80IB(10). IN CASE THE AO FINDS THAT THE DEVELOPER HAS ACTED ON BEHALF OF THE LANDOWNER AND HAS GOT TH E FIXED CONSIDERATION FROM THE LANDOWNER FOR THE DEVELOPMEN T OF THE HOUSING PROJECTS, THE ASSESSEE SHOULD NOT BE ALLOWE D DEDUCTION U/S.80IB(10) TO THE ASSESSEE. 5. SINCE THE MATTER IS YET TO BE FINALIZED DUE TO RESTORATION OF THE ISSUE BY THE TRIBUNAL BACK TO THE FILE OF THE ASSES SING OFFICER, THEREFORE, AT PRESENT THE ISSUE DOES NOT SURVIVE. RESULTANTLY , THERE IS NO FORCE IN THE GROUND OF THE REVENUE, HENCE, REJECTED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 31/ 5 /2011. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 31 / 05 /2011 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DE PARTMENT. 3. THE CIT CONCERNED. 4. THE LD. CIT( APPEALS)-III, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD ITA NO.1378/AHD /2008 ACIT VS. M/S.SWAGAT INFRASTRUCTURE P.LTD. ASST.YEAR 2003-04 - 5 - 1. DATE OF DICTATION..30/5/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30/5/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 31.5.2011 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.5.2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER