The ACIT, Circle-3, Surat V. Shri Prakash Ranchhodji Patel, Surat

ITA 1676/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9288 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 22-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, D-BENCH,AHMED ABAD. BEFORE :SHRI MAHAVIR SINGH, JUDICIAL MEM BER, AND SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER. ITA NO.1676 /AHD/2009 (ASSESSMENT YEAR 2006-2007) ACIT, CIRCLE-3, SURAT. VERSUS SHRI PRAKASH RANCHHODJI PATEL, PROP OF M/S. LAXMI ENTERPRISE, 5-A, CITY CROWN, PARLE POINT, ATHWA LINES, SURAT. (APPELLANT) (RESPONDENT) PAN: ADQPP 0623 H FOR THE APPELLANT: SHRI C.K. MISHRA, D.R. FOR THE RESPONDENT SHRI URVASHI SHODHAN, A.R. ORDER PER SHRI D.C. AGRAWAL: THIS IS AN APPEAL FILED BY THE REVENUE RAISING FOLLOWING GROUNDS. 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A), SURAT HAS ERRED IN DELETING THE ADD ITION MADE BY THE ASSESSING OFFICER OF RS. 9,85,187/- HOLDING THAT TH E ASSESSEE HAD CARRIED OUT THE CONSTRUCTION OF BALCONY AS PER SANCTIONED PLAN INCLUDING BALCONY COVER AND NO UNAUTHORIZED OR ILLEGAL CONS TRUCTION IS CARRIED OUT BY THE ASSESSEE. 2. .ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF TH E ASSESSING OFFICER ON THIS ISSUE. 3.IT IS THEREFORE, PRAYED THAT THE ORDER OF THE CIT (A) MAY BE SET-ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONST RUCTION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTICED THAT ASSESSEE CLAIMED AN EXPENDITURE OF RS. 9,15,687/- BEING AMOU NT PAID TO SURAT MUNICIPAL CORPORATION (S.M.C. IN SHORT) FOR PROJECT WORK. WH EN DETAILS WERE CALLED, ASSESSING OFFICER FOUND THAT THE AMOUNT IS IN THE N ATURE OF PENALTY. THE ASSESSEE HAS CARRIED OUT CONSTRUCTION OVER THE BALC ONY, THOUGH WITH THE 2 ITA NO.1676/AHD/2009 (ASSESSMENT YEAR 2006-07) PERMISSION OF S.M.C. BUT HE TREATED THIS PAYMENT A S IN THE NATURE OF PENALTY AND DISALLOWED THE CLAIM. 3. THE LEARNED CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS U NDER: IN THE WRITTEN SUBMISSIONS, IT HAS BEEN CONTENDED BY THE AR THAT THE APPELLANT UNDERTOOK CONSTRUCTION ACTIVITY AND THE P LAN WAS PLACED FOR THE APPROVAL OF SURAT MUNICIPAL CORPORATION. THE C ORPORATION HAS CHARGED CERTAIN FEES FOR PASSING THE PLAN. AS PER RESOLUTION NUMBER 554/2001, NOTIFIED ADDITIONAL FEES FOR BALCONY COVE R PREMIUM. THE APPELLANT CARRIED OUT THE CONSTRUCTION WORK AS PER THE SANCTIONED PLAN INCLUDING BALCONY COVER. THE APPELLANT ALSO OBTAIN ED BUC FROM THE CORPORATION CERTIFYING THAT THE WORK IS CARRIED OUT AND COMPLETED AS PER PLAN SANCTIONED AND NO AUTHORISED OR ILLEGAL CONSTR UCTION IS CARRIED OUT BY THE APPELLANT. THE APPELLANT FURTHER SUBMITTED THE DETAILS OF VARIOUS ACTIVITIES CARRIED OUT BY HIM CHRONOLOGICALLY. THE APPELLANT ALSO SUBMITTED THAT EVEN PRIOR TO BEGIN THE CONSTRUCTION ACTIVITY THE PLAN WAS SANCTIONED AND THEREAFTER ACTIVITY WAS CARRIED OUT AS PER THE SANCTIONED PLAN AND THE SAME HAS NOT BEEN CONTESTED BY THE ASS ESSING OFFICER. THE APPELLANT ATTACHED THE COPY OF APPLICATION MADE BEF ORE THE SMC FOR THE SANCTION OF CONSTRUCTION OF BALCONY AND THE COPY OF THE SANCTION LETTER GRANTING PERMISSION FOR SUCH CONSTRUCTION. THE APP ELLANT RELIES UPON VARIOUS JUDGMENTS ANNEXED TO THE SUBMISSIONS OF THE APPELLANT. I HAVE CAREFULLY CONSIDERED THE VIEW TAKEN BY THE A SSESSING OFFICER ON THIS ISSUE, THE WRITTEN SUBMISSIONS MADE BY THE APP ELLANT THAT, THE ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING THE AMOUNT OF FEE PAID AGAINST SANCTION OF COVERING BALCONY AS PENALTY. T HE ASSESSING OFFICER HAS NOT BROUGHT ANY CORROBORATIVE EVIDENCE WHICH JU STIFIES HIS STAND NOR HE COULD DEFINE ANY AMOUNT PAID BY THE APPELLANT TO SMC AS PENALTY EVEN AFTER THE NOTIFICATION OF TOWN PLANNING OFFICE OF SURAT MUNICIPAL CORPORATION WAS PROVIDED TO HIM BY THE APPELLANT. THE ASSESSING 3 ITA NO.1676/AHD/2009 (ASSESSMENT YEAR 2006-07) OFFICER HAS NOT GIVEN ANY REASON AS SUCH FOR DISALL OWING THE SAID AMOUNT HE SIMPLY STATED THAT, THE FACT REMAINS SAM E THAT THE SAID FEE IS FOR VIOLATION RELATED TO COVERED BALCONY ONLY.. F ROM THE FACTS OF THE CASE AND THE DOCUMENTARY EVIDENCES PRODUCED BY THE APPELLANT, IT IS EVIDENT THAT THE APPELLANT HAS ACTUALLY PAID THE SA ID AMOUNT AGAINST GETTING PERMISSION FOR CONSTRUCTING PENALTY WHICH C ANNOT BE TREATED AS PENALTY. IN ANY CASE THE ADDITIONAL CONSTRUCTION H AS BROUGHT ADDITIONAL SALE PROCEEDS WHICH HAVE BEEN SUBJECTED TO TAX. HE NCE, THE ADDITION OF RS. 915687/- STANDS DELETED. IN THE RESULT, THE APPELLANTS APPEAL IS ALLOWED. 4. WE HAVE HEARD LEARNED A.R. AND LEARNED D.R.. IN OUR CONSIDERED VIEW, THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF T HE LEARNED CIT(A). PAYMENT MADE BY THE ASSESSEE TO SMC IS NOT IN THE NATURE OF PENALTY. IT IS A FEES PAID FOR COVERING BALCONY WITH THE PRIOR PERMISSION OF S MC. THERE IS NO VIOLATION OF ANY LAW. ONCE PERMISSION HAS BEEN TAKEN FROM SM C, QUESTION OF HOLDING THAT THERE IS ANY VIOLATION OF ANY RULE OR LAW DOES NOT ARISE. 5. WE ACCORDINGLY CONFIRM THE ORDER OF THE LEARNED CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S REJECTED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DATED 28 TH AUGUST, 2009. SD/- SD/- (MAHAVIR SINGH) (D .C. AGRAWAL) JUDICIAL MEMBER ACCOUN TANT MEMBER AHMEDABAD; DATED:28/08/2009 ANKIT* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT, 4 ITA NO.1676/AHD/2009 (ASSESSMENT YEAR 2006-07) 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT, AHMEDABAD BENCHES, AHMEDABAD.