M/s. Daptary's Realtors Pvt. Ltd., Nashik V. Income-tax Officer,

ITA 1849/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1112 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Business income; Income from undisclosed sources; Capital receipt; Revised return
• Section: 80HHC; 133A; 153A; 80IB; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NOS. 1848 & 1849/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2008-09 M/S. DAPTARYS REALTORS PVT. LTD., 4, D-REST ADWAIT COLONY, BEHIND NIRAMAY NURSING HOME, CANADA CORNER, NASHIK-422005 PAN : AAACD6253B ....... / APPELLANT ' / V/S. ITO, WARD 1(2), NASHIK / RESPONDENT ASSESSEE BY : SHRI SUNIL PATHAK REVENUE BY : SHRI R.K. RASTOGY, SHRI SUDHANSHU SHEKAR / DATE OF HEARING : 16-06-2016 / DATE OF PRONOUNCEMENT : 12-08-2016 * / ORDER PER VIKAS AWASTHY, JM : THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK FOR THE A SSESSMENT YEAR 2008-09. 2 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 IN ITA NO. 1848/PN/2014 THE ASSESSEE HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) DATED 23-04-2014. T HE FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER HAS DISMISSED THE APPEAL OF ASSESSEE AGAINST LEVY OF PENALTY ` 1,95,248/- U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE AC T) AS HAVING BECOME INFRUCTUOUS. ITA NO. 1849/PN/2014 IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) DATED 14-08-2014 IN C ONFIRMING THE LEVY OF PENALTY ` 6,10,893/- U/S. 271(1)(C) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF BUILDING AN D DEVELOPING REAL ESTATE. THE ASSESSEE HAD DEVELOPED A HO USING PROJECT NAMED SIDDHAMUNI RESIDENTIAL COMPLEX AT GANESHBABA NAGA R, OFF PUNE ROAD, NASHIK ON WHICH DEDUCTION U/S. 80IB(10) WAS CLA IMED. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 05-08-2008 DECLARING TOTAL INCOME AS NIL. THE AS SESSEE CLAIMED DEDUCTION OF ` 2,01,88,958/- U/S. 80IB(10) OF THE ACT IN THE AFORESAID RETURN OF INCOME. THEREAFTER, THE ASSESSEE FILED REVISED RETURN OF INCOME ON 25-10-2008 DECLARING TOTAL INCOME AS NIL. HOWE VER, IN THE REVISED RETURN OF INCOME THE ASSESSEE CLAIMED DEDUCTION OF ` 1,91,25,340/- U/S. 80IB(10) OF THE ACT, AFTER CLAIMING SET OFF O F LOSSES OF EARLIER YEARS ` 10,00,978/- BROUGHT FORWARD FROM ASSESSMENT YEAR 2007-08. A SURVEY U/S. 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF ASSESSEE ON 09-11-2009. DURING THE COURSE OF SURVEY CERTAIN PAPERS WERE IMPOUNDED WHICH REVEALED THAT THE A SSESSEE HAD TAKEN ` 26,15,085/- OVER AND ABOVE THE PRICE MENTIONED IN THE S ALE 3 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 DEED IN RESPECT OF SALE OF FLATS IN THE HOUSING PROJECT. TH E ASSESSEE ADMITTED ` 19,77,000/- AS EXTRA SALE CONSIDERATION. THE ASSESSING OFFICER MADE ADDITION OF ` 19,77,000/- UNDER THE HEAD, INCOME FROM OTHER SOURCES. THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) MAKING TWO ALTERNATE SUBMISSIONS. IN THE FIRST PLACE, THE ASSESSEE CHALLENGED TH E ADDITION UNDER THE HEAD, INCOME FROM OTHER SOURCES. THE CONT ENTION OF THE ASSESSEE WAS THAT THE EXTRA SALE CONSIDERATION RECEIVED BY THE ASSESSEE IS IN RESPECT OF SALE OF FLATS IN THE PROJECT WHICH IS ELIGIBLE FO R DEDUCTION U/S. 80IB(10) OF THE ACT. THE ASSESSEE IS ELIGIBLE TO CLAIM D EDUCTION ON THE ADDITIONAL INCOME DECLARED. THUS, THE ADDITION WOULD BE REVENUE NEUTRAL. IN AN ALTERNATE PRAYER THE ASSESSEE PRAYED T HAT IF AT ALL THE ADDITION HAS TO BE SUSTAINED, IT SHOULD BE ONLY TO THE EXTENT OF NET PRO FIT RATIO TO THE TOTAL TURNOVER WHICH WAS COMPUTED AT 32.92 %. THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE ALTERNAT E SUBMISSION OF THE ASSESSEE AND REDUCED THE ADDITION TO ` 6,50,828/-. 2.1 AGGRIEVED BY THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), BOTH THE DEPARTMENT AND THE ASSESSEE CARRIED THE MA TTER IN APPEAL TO THE TRIBUNAL IN ITA NO. 1135/PN/2011 AND ITA NO. 1051/P N/2011, RESPECTIVELY. THE TRIBUNAL VIDE ORDER DATED 25-02-2013 REVERSED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN REDUCING TH E ADDITION TO ` 6,50,828/-. THE TRIBUNAL RESTORED THE FINDINGS OF ASSESSING OFFICER AND ENHANCED THE ADDITION TO ` 19,77,000/-. 2.2 IN THE MEANTIME, AFTER THE ORDER OF COMMISSIONER OF IN COME TAX (APPEALS) REDUCING THE ADDITION FROM ` 19,77,000/- TO ` 6,50,828/-, THE 4 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) AN D PASSED ORDER LEVYING PENALTY OF ` 1,95,248/- U/S. 271(1)(C) ON 21-03-2013 FOR CONCEALING/FURNISHING INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF ` 6,50,828/-. OSTENSIBLY, AT THE TIME OF PASSING OF PENALTY ORDER, THE ASSESSING OFFICER WAS UNAWARE OF THE OR DER PASSED BY TRIBUNAL ON 25-02-2013 ENHANCING THE DISALLOWANCE FROM ` 6,50,828/- TO ` 19,77,000/-. THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ON 05-04-2013 AGAINS T THE PENALTY ORDER DATED 21-03-2013. SUBSEQUENTLY, THE ASS ESSING OFFICER IN GIVING EFFECT TO THE ORDER OF TRIBUNAL PASSED ANOTHER OR DER LEVYING PENALTY OF ` 6,10,893/- U/S. 271(1)(C) OF THE ACT ON 21-08-2013. THE ASSESSEE FILED APPEAL AGAINST THE SECOND ORDER LEVYING PEN ALTY U/S. 271(1)(C) BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ON 26-09-2013. 2.3 THE COMMISSIONER OF INCOME TAX (APPEALS) DISMISSED THE FORMER APPEAL OF THE ASSESSEE AGAINST LEVY OF PENALTY ` 1,95,248/- U/S. 271(1)(C). THE COMMISSIONER OF INCOME TAX (APPEALS) WHILE DISMIS SING THE APPEAL OF THE ASSESSEE OBSERVED THAT THE TRIBUNAL HAS ENHANCED THE ADDITION TO ` 19,77,000/- AND THE ASSESSING OFFICER SUBSEQUENTLY PASSED PENALTY ORDER ON 21-08-2013 IN LINE WITH THE ORDE R OF TRIBUNAL. THE COMMISSIONER OF INCOME TAX (APPEALS) DISMISSED THE APPE AL OF THE ASSESSEE AS INFRUCTUOUS. IN THE LATTER APPEAL OF THE AS SESSEE AGAINST THE LEVY OF PENALTY ` 6,10,893/- U/S. 271(1)(C), THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE LEVY OF PENALTY ON MERITS . NOW, THE ASSESSEE HAS FILED APPEAL AGAINST BOTH THE ORDERS OF COMM ISSIONER OF INCOME TAX (APPEALS). 5 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 ITA NO. 1848/PN/2014 3. IN APPEAL THE ASSESSEE HAS ASSAILED THE ORDER OF CO MMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 23-04-2014 ON THE GROUND THAT THERE CANNOT BE TWO PENALTY ORDERS FOR SAME OFFENCE FOR THE SAME ASSESSMENT YEAR. THE ORDER LEVYING PENALTY U/S. 271(1)(C) DATED 21-03-2013 WAS PASSED BY THE ASSESSING OFFICER IN ACCORD ANCE WITH THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) REDUCING THE AMOUNT OF ADDITION. SUBSEQUENTLY, WHEN THE APPEAL WAS FILED BY THE DEPARTMENT AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN RESTRICTING THE ADDITION TO ` 6,50,828/-, THE TRIBUNAL REVERSED THE SAID ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND RESTORED THE FINDINGS OF ASSESSING OFFICER UPHOLDING THE ADDITION OF ` 19,77,000/-. THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) THUS, ME RGED WITH THE ORDER OF TRIBUNAL. THE ASSESSING OFFICER AGAIN PASSED ORDER ON 21- 08-2013 LEVYING PENALTY OF ` 6,10,893/- U/S. 271(1)(C) IN CONFORMITY WITH THE ORDER OF TRIBUNAL IN QUANTUM APPEAL. SINCE, THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) MERGED WITH THE ORDE R OF TRIBUNAL, THE PENALTY LEVIED BY THE ASSESSING OFFICER ON THE BASIS OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IS LIABLE TO BE CANCELLED. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN OBSE RVING THAT THE APPEAL REGARDING LEVY OF PENALTY ` 1,95,248/- ON ` 6,50,828/- U/S. 271(1)(C) IS LIABLE TO BE DISMISSED AS INFRUCTUOUS. WE ARE OF TH E CONSIDERED OPINION THAT IN VIEW OF SECOND PENALTY ORDER PA SSED BY ASSESSING OFFICER LEVYING PENALTY U/S. 271(1)(C), THE FORMER ORDER LEVYING PENALTY U/S. 271(1)(C) HAS TO BE ANNULLED. ACCORDINGLY, THE IM PUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IN IT A NO. 1848/PN/2014 IS ALLOWED. 6 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 1849/PN/2014 4. SHRI SUNIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE ASSESSEE WAS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB (10) ON THE INCOME/GAINS OF THE HOUSING PROJECT DEVELOPED BY THE AS SESSEE. THE AMOUNT OF ` 19,77,000/- ADMITTED BY THE ASSESSEE DURING THE COURSE OF SURVEY WAS ON ACCOUNT OF EXTRA SALES CONSIDERATION FOR A DDITIONAL FACILITIES PROVIDED BY THE ASSESSEE TO THE ALLOTTEES. THIS FA CT HAS BEEN ACKNOWLEDGED BY THE ASSESSING OFFICER IN THE ASSESSMENT O RDER. THE ADDITIONS MADE DURING THE ASSESSMENT PROCEEDINGS ON THE BASIS OF DISCLOSURE STATEMENT DURING SURVEY WOULD BE REVENUE NEU TRAL AS THEY WOULD ALSO BE ELIGIBLE FOR DEDUCTION U/S. 80IB(10). THERE WAS NO INTENTION ON THE PART OF ASSESSEE TO SUPPRESS SUCH REC EIPTS. THE ASSESSING OFFICER MADE ADDITION OF THE AMOUNT DISCLOSED DURIN G SURVEY UNDER THE HEAD INCOME FROM OTHER SOURCES, WHEREAS IT SHOULD HAVE BEEN CONSIDERED AS INCOME FROM BUSINESS. THE ASSESSE E CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (AP PEALS) AGAINST THE FINDINGS OF ASSESSING OFFICER FOR MAKING ADDITION UN DER THE HEAD INCOME FROM OTHER SOURCES. THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING OFFICER IN TREATING T HE EXTRA SALE CONSIDERATION AS INCOME FROM OTHER SOURCES. IN SECOND AP PEAL THE TRIBUNAL CONFIRMED THE FINDINGS OF AUTHORITIES BELOW. THE LD . AR SUBMITTED THAT IT IS AN UNDISPUTED FACT THAT THE UNDISCLOS ED AMOUNT OF ` 19,77,000/- RECEIVED BY ASSESSEE IS AN ACCOUNT OF ADDITIO NAL WORK EXECUTED BY THE ASSESSEE IN CERTAIN FLATS. THE LD. AR CON TENDED THAT ADDITIONAL INCOME DECLARED DURING THE COURSE OF SURVEY IS FR OM THE HOUSING PROJECT WHICH IS ELIGIBLE FOR DEDUCTION U/S. 80IB(10). THUS, THE SAID ADDITIONAL INCOME IS ALSO ELIGIBLE FOR DEDUCTION U/S. 80IB(1 0). IN 7 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 SUPPORT OF HIS CONTENTIONS THE LD. AR PLACED RELIANCE ON T HE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF MALPANI ESTATES VS. ASSISTANT COMMISSIONER OF INCOME TAX REPORTED AS 164 TT J 803 (PUNE) AND AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF MADHA V CORPORATION VS. ACIT IN IT(SS)A NOS. 380 TO 382/AHD/2014 FOR ASSESSMENT YEARS 2006-07 TO 2008-09 DECIDED ON 28-07 -2015 REPORTED AS (2016) TAXCORP (LJ) 9904 (ITAT-AHMEDABAD). 4.1 THE LD. AR OF THE ASSESSEE SUBMITTED THAT ADDITIONAL IN COME DECLARED FROM THE HOUSING PROJECT, WHETHER TO BE CONSIDE RED AS INCOME FROM OTHER SOURCES OR INCOME FROM BUSINESS AND ELIGIBLE FOR DEDUCTION U/S. 80IB(10) IS A DEBATABLE ISSUE. THEREFORE, NO PENALTY IS TO BE LEVIED WHERE TWO VIEWS ARE POSSIBLE OR ISSUE IS DEBATABLE. THE LD . AR CONTENDED THAT IN QUANTUM APPEAL THE FIRST APPELLATE AUT HORITY HAD REDUCED THE AMOUNT OF ADDITION. IN SECOND APPEAL THE TR IBUNAL RESTORED THE ORIGINAL ADDITION. THIS FURTHER SHOWS THAT T HE VIEWS OF APPELLATE AUTHORITIES WERE NOT IN CONGRUENCE IN SO FAR AS THE QUANTUM OF ADDITION IS CONCERNED. THEREFORE, ON THIS ACCOUNT AS WE LL THE PENALTY IS LIABLE TO BE SET ASIDE. 4.2 THE LD. AR OF THE ASSESSEE POINTED THAT IN THE ASSESS MENT ORDER WHILE RECORDING THE SATISFACTION THE ASSESSING OFFICER OBSERV ED THAT PENALTY PROCEEDINGS U/S. 271(1)(C) ARE SEPARATELY INITIATED FOR CONCEALING OF INCOME. HOWEVER, WHILE ISSUING NOTICE U/S. 274 R .W.S. 271(1)(C) OF THE ACT, THE ASSESSING OFFICER HAS NOT STRIKED O F IRRELEVANT PARTS OF THE STEREOTYPE NOTICE AND HAS ISSUED NOTICE FOR CONCEALING THE PARTICULARS OF INCOME OR/AND FURNISHING OF INACCURATE PARTIC ULARS OF 8 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 INCOME. THE LD. AR FURTHER POINTED THAT AT THE TIME OF PAS SING OF THE PENALTY ORDER U/S. 271(1)(C), THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE IS LIABLE FOR PENALTY U/S. 271(1)(C) R.W.S. 275 (1A) OF TH E ACT FOR CONCEALING/FURNISHING INACCURATE PARTICULARS OF INCOME. THUS, THE ASSESSING OFFICER HIMSELF IS NOT CLEAR WHETHER THE PENALTY HA S TO BE LEVIED FOR CONCEALING OF INCOME OR FURNISHING OF INACCURATE PARTICULARS O F INCOME OR BOTH. THE LD. AR PRAYED FOR SETTING ASIDE THE IM PUGNED ORDER AND ACCEPTING THE APPEAL OF THE ASSESSEE. 5. AU CONTRAIRE SHRI R.K. RASTOGY AND SHRI SUDHANSHU SHEKAR REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. THE LD. DR SUBMITTED THAT IN QUANT UM PROCEEDINGS THE TRIBUNAL HAS NOWHERE HELD THAT THE ADDIT IONAL INCOME DECLARED BY THE ASSESSEE WAS TOWARDS EXTRA SALES CONS IDERATION. THE TRIBUNAL AND THE AUTHORITIES BELOW HAD CATEGORICALLY HELD T HAT THE ADDITIONAL INCOME DECLARED IS LIABLE TO BE ASSESSED UNDER TH E HEAD, INCOME FROM OTHER SOURCES. THUS, THE ASSESSEE WAS N OT ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) ON THE ADDITIONAL INCOME DECLARE D I.E. ` 19,77,000/-. THE LD. DR FURTHER CONTENDED THAT THE ASSES SEE HAS NOT FILED ANY APPEAL AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) HOLDING EXTRA SALE CONSIDERATION AS NOT ELIGIBLE FOR D EDUCTION U/S. 80IB(10) OF THE ACT. 6. THE LD. AR OF THE ASSESSEE VEHEMENTLY REBUTTED TH E SUBMISSIONS MADE BY THE LD. DR WITH RESPECT TO THE ISSUE RAISED BY A SSESSEE IN APPEAL BEFORE THE TRIBUNAL CHALLENGING THE ELIGIBILITY OF ADDITION AL 9 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 AMOUNT DECLARED FOR CLAIMING DEDUCTION U/S. 80IB(10) OF THE A CT. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR REFERRED TO PARA 12 OF THE ORDER OF TRIBUNAL IN ITA NO. 1135/PN/2011 AND ITA NO. 1051/PN/2011 (SUPRA ). THE LD. AR SUBMITTED THAT THE DOCUMENT FOUND AND SEIZED DURING SURVEY CLEARLY SHOWS THAT THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE IS ON ACCOUNT OF EXTRA SALE CONSIDERATION OR O N-MONEY RECEIVED ON SALE OF FLATS. IN BOTH THE EVENTS THE ADDITION AL AMOUNT DECLARED IS ELIGIBLE FOR DEDUCTION U/S. 80IB(10). THE LD. AR RE ITERATED HIS RELIANCE PLACED ON DECISION RENDERED IN THE CASE OF MALP ANI ESTATES VS. ASSISTANT COMMISSIONER OF INCOME TAX (SUPRA) AND THE D ECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SHETH D EVELOPERS (P) LTD. REPORTED AS 254 CTR 127 (BOM). 7. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO CONSIDERED THE DECISIONS ON WHICH THE LD. AR OF T HE ASSESSEE HAS PLACED RELIANCE. THE ADDITION OF ` 19,77,000/- HAS BEEN MADE IN THE INCOME RETURNED BY THE ASSESSEE ON THE BASIS OF DO CUMENTS IMPOUNDED DURING THE COURSE OF SURVEY AND THE STATEMEN T OF SHRI SACHIN DAPTARY, MANAGING DIRECTOR OF THE ASSESSEE COMPAN Y RECORDED ON 09-11-2009 AND 10-11-2009 AT THE TIME OF SURVEY. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER IN THE CONCLUDING PARAGRAPH HAD ACCEPTED THE CONTENTION OF THE ASSESSEE THAT SUM OF ` 19,77,000/- IS IN RESPECT OF ADDITIONAL WORK AND HAS BEEN R ECEIVED OVER AND ABOVE THE REGISTERED SALE CONSIDERATION. THE RELEVANT EXTRACT OF THE FINDINGS OF ASSESSING OFFICER ARE REPRODUCED HERE-IN-UNDER : 11.1 IN VIEW OF THE ABOVE, THE RECEIPTS OF ` 19,77,000/- IN RESPECT OF ADDITIONAL WORK WHICH HAS BEEN RECEIVED OVER AND AB OVE THE REGISTERED 10 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 SALE CONSIDERATION OF THE UNITS SOLD BY THE COMPANY AND ARE NOT ACCOUNT FOR, IS TO BE BROUGHT TO TAX IN THE INSTANT ASSESSM ENT PROCEEDINGS. RECEIPTS IN RESPECT OF THE ADDITIONAL WORK EXECUTED BY THE COMPANY IS NOT AS PER THE APPROVED PLAN THE SAME WILL NOT DIRE CTLY FORM PART OF THE PROJECT. THE SAID AMOUNT IS THEREFORE TAXED AS INC OME OF THE COMPANY UNDER THE HEAD INCOME FROM OTHER SOURCES. AS ASS ESSEE HAS CONCEALED THE AMOUNT OF ` 19,77,000/- BY NOT ACCOUNTING FOR IT/NOT DISCLOSING THE SAME IN RETURN OF INCOME FILED, PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME U/S. 271(1)(C) IS SEPARATELY INITIATED AS TH E ASSESSEE HAS ALSO FILED INACCURATE PARTICULARS OF SUCH INCOME. 8. A PERUSAL OF THE FINDINGS OF ASSESSING OFFICER CLEARLY INDI CATES THAT THE ADDITION HAS BEEN MADE ON ACCOUNT OF EXTRA S ALE CONSIDERATION RECEIVED ON SALE OF FLATS. YET THE ADDITION WAS MADE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE FINDINGS OF THE ASSESSIN G OFFICER HAVE BEEN UPHELD BY THE TRIBUNAL. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MALP ANI ESTATES VS. ASSISTANT COMMISSIONER OF INCOME TAX (SUPRA) HAS HELD ON- MONEY RECEIVED BY THE ASSESSEE AND DECLARED AS ADDITIO NAL INCOME DURING THE SEARCH ACTION U/S. 132 AS BUSINESS INCOME ELIGIB LE FOR DEDUCTION U/S. 80IB(10). IN THE SAID CASE THE ASSESSEE W AS ENGAGED IN CONSTRUCTION BUSINESS AND WAS SUBJECT TO SEARCH ACTION U/S. 132 OF THE ACT. IN THE COURSE OF SEARCH, ONE OF THE PARTNERS OF TH E ASSESSEE FIRM IN STATEMENT RECORDED U/S. 132(4) ADMITTED CERTAIN UNDISCLOSE D INCOME IN RELATION TO HOUSING PROJECT DEVELOPED BY THE ASSESSEE. THE ASSESSEE DISCLOSED THE ADDITIONAL INCOME IN ITS RETURN OF INCOME FILED IN PURSUANCE TO NOTICE ISSUED U/S. 153A OF THE ACT. SINCE, T HE HOUSING PROJECT WAS ELIGIBLE FOR DEDUCTION U/S. 80IB(10), THE ASSESSE E CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT ON THE ADDITIONAL INCOME DECLARED. THE ASSESSING OFFICER DISALLOWED THE SAME AND HELD THE ADDIT IONAL 11 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 INCOME RECEIVED AS ON-MONEY AS INCOME FROM OTHER SOU RCES. THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE ACTION OF A SSESSING OFFICER. THE ASSESSEE CARRIED THE MATTER IN APPEAL TO THE TRIBUNAL. THE TRIBUNAL REVERSED THE FINDINGS OF LOWER AUTHORITIES AND HELD THE ON- MONEY RECEIVED BY THE ASSESSEE AS BUSINESS INCOME, ELIG IBLE FOR DEDUCTION U/S. 80IB(10) OF THE ACT. THE RELEVANT EXTRACT OF THE FINDINGS OF THE TRIBUNAL ARE AS UNDER : 11. IN THE COURSE OF SEARCH, IN A STATEMENT DEPOSE D U/S 132(4) OF THE ACT, ASSESSEE DECLARED CERTAIN ADDITIONAL INCOME PE RTAINING TO THE HOUSING PROJECT IN QUESTION. THE ADDITIONAL INCOME DECLARED WAS ON ACCOUNT OF ON-MONEY RECEIVED FROM THE CUSTOMERS TO WHOM FLATS WERE SOLD IN THE SAID PROJECT. AT THE TIME OF HEARING, L EARNED COUNSEL REFERRED TO THE COPY OF STATEMENT RECORDED U/S 132(4) OF THE ACT OF SHRI RAJESH MALPANI, A PARTNER OF THE ASSESSEE FIRM AND ALSO CO PIES OF SOME OF THE SEIZED PAPERS, WHICH INDICATED RECEIPT OF ON-MONEY, AND THE SAME HAVE PLACED IN THE PAPER BOOK AT PAGES 35 TO 52. A PERUS AL OF THE SEIZED MATERIAL SHOWS THAT A COMPLETE DETAIL OF THAT ON-MO NEY RECEIVED IS ENUMERATED, VIZ. NAME OF THE CUSTOMERS, AMOUNT AND THE RESPECTIVE FLAT SOLD IN THE PROJECT. EVEN IN THE DEPOSITION MADE U/ S 132(4) OF THE ACT, THE PARTNER OF THE ASSESSEE FIRM MADE A YEARWISE DETAIL OF ADDITIONAL INCOME DECLARED ON ACCOUNT OF ON-MONEY RECEIVED ON SALE OF FLATS IN THE PROJECT. ACCORDINGLY, THE IMPUGNED SUM HAS BEEN DECLARED AS UNACCOUNTED INCOME FROM THE HOUSING PROJECT IN QUESTION. IN THE RETURN OF INCOME FILED IN RESPONSE OF NOTICE ISSUED U/S 153A(1)(A) OF THE ACT, ASSESSEE HAS DECLARED SUCH ADDITIONAL INCOME AS INCOME FROM HOUS ING PROJECT, THE CREST AT PIMPLE SAUDAGAR, PUNE. THE DECLARATION MA DE IN THE RETURN OF INCOME HAS NOT BEEN DISPUTED BY THE ASSESSING OFFIC ER. THE ONLY DISPUTE RAISED BY THE ASSESSING OFFICER IS WITH REGARD TO N ATURE OF SUCH INCOME, WHICH ACCORDING TO THE ASSESSING OFFICER DOES NOT FALL UNDER OF THE ANY HEADS OF INCOME AS DESCRIBED U/S 14 OF THE I.T. ACT . IN COMING TO SUCH CONCLUSION, HE HAS DISAGREED WITH THE STAND OF THE ASSESSEE THAT SUCH ADDITIONAL INCOME WAS A BUSINESS INCOME OF THE AS SESSEE RELATING TO THE HOUSING PROJECT, THE CREST AT PIMPLE SAUDAGAR, PU NE. HOWEVER, AS PER THE CIT(A), THE INCOME IN QUESTION IS ASSESSABLE UN DER THE HEAD INCOME FROM OTHER SOURCES. OSTENSIBLY, THE CIT(A) HAS NOT AGREED WITH THE INFERENCE OF THE ASSESSING OFFICER THAT THE IMPUGNE D INCOME DOES NOT FALL 12 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 UNDER ANY HEADS OF INCOME U/S 14 OF THE ACT BECAUSE ACCORDING TO HER SUCH INCOME IS LIABLE TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. THUS, AS OF NOW, BEFORE US THE INFERENCE O F THE ASSESSING OFFICER DOES NOT SURVIVE ANY LONGER SINCE THE ORDER OF THE ASSESSING OFFICER HAS MERGED IN THE ORDER OF THE CIT(A) AND IN ANY CASE T HE REVENUE IS NOT IN APPEAL ON THIS ASPECT. BE THAT AS IT MAY, FACTUALLY SPEAKING, IT CANNOT BE DENIED THAT THE ADDITIONAL INCOME IN QUESTION RELAT ES TO THE HOUSING PROJECT, THE CREST AT PIMPLE SAUDAGAR, PUNE UNDER TAKEN BY THE ASSESSEE. THE MATERIAL SEIZED IN THE COURSE OF SEAR CH; THE DEPOSITION MADE BY THE ASSESSEES PARTNER DURING SEARCH U/S 13 2(4) OF THE ACT; AND, ALSO THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S 153A(1)(A) OF THE ACT AFTER THE SEARCH, CLEARLY SHO W THAT THE SOURCE OF IMPUGNED ADDITIONAL INCOME IS THE HOUSING PROJECT, THE CREST AT PIMPLE SAUDAGAR, PUNE. THE AFORESAID MATERIAL ON RECORD DE PICTS THAT THE IMPUGNED INCOME IS NOTHING BUT UNACCOUNTED MONEY RE CEIVED BY THE ASSESSEE FROM CUSTOMERS ON ACCOUNT OF SALE OF FLATS OF ITS HOUSING PROJECT, THE CREST AT PIMPLE SAUDAGAR, PUNE. CLEARLY, THE SOURCE OF THE ADDITIONAL INCOME IS THE SALE OF FLATS IN THE HOUSI NG PROJECT, THE CREST. THEREFORE, ONCE THE SOURCE OF INCOME IS ESTABLISHED THE ASSESSABILITY THEREOF HAS TO FOLLOW. THE NATURE OF INCOME, THUS O N FACTS, HAS TO BE TREATED AS BUSINESS INCOME ALBEIT, THE SAME WAS NO T ACCOUNTED FOR IN THE ACCOUNT BOOKS. IN THIS MANNER, WE ARE UNABLE TO ACCEPT THE STAND OF THE ASSESSING OFFICER OR OF THE CIT(A) THAT THE SAI D INCOME IS NOT LIABLE TO BE TAXED AS BUSINESS INCOME. 12. NOW, COMING TO THE POINT AS TO WHETHER SUCH BU SINESS INCOME QUALIFIES TO BE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT IN THE COURSE OF AN ASSESSMENT MADE U/S 153A(1)(B) OF THE ACT. ON THIS ASPECT, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSMENT IN CASES OF SEARCH ACTION OR REQUISITION ARE MADE U/S 153A OR 153C OF THE ACT IN ORDER TO ASSESS UNDECLARED INCOMES AND SUCH PROVISIONS ARE FOR THE BENEFIT OF THE REVENUE AND THEREFORE A CLAIM U/ S 80IB(10) OF THE ACT CANNOT BE CONSIDERED IN SUCH PROCEEDINGS, ESPECIALL Y WHEN SUCH A CLAIM WAS NOT MADE IN THE RETURN OF INCOME ORIGINALLY FIL ED UNDER SECTION 139 OF THE ACT. IN THIS REGARD, THE LEARNED DEPARTMENTAL R EPRESENTATIVE HAS REFERRED TO THE JUDGMENT OF THE HONBLE SUPREME COU RT IN THE CASE OF CIT VS. SUN ENGINEERING WORKS PVT. LTD., 198 ITR 297 (S C) TO POINT OUT THAT EVEN IN THE CASES OF RE-ASSESSMENT U/S 147/148 OF T HE ACT FRESH CLAIMS CANNOT BE RAISED BY THE ASSESSEE. SECONDLY, IT IS P OINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT EVEN IF TH E CLAIM WAS TO BE 13 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 CONSIDERED THEN IT WAS NOT ALLOWABLE BECAUSE THE RE QUISITE CONDITION THAT THE RETURN OF INCOME HAS TO BE ACCOMPANIED BY THE P RESCRIBED AUDIT REPORT HAS NOT BEEN COMPLIED WITH BY THE ASSESSEE. ON THE BASIS OF AFORESAID REASONS, THE CLAIM OF THE ASSESSEE HAS BE EN OPPOSED. 13. SECTIONS 153A TO 153C OF THE ACT CONTAIN PROVIS IONS RELATING TO ASSESSMENTS TO BE MADE IN CASES WHERE SEARCH IS INI TIATED U/S 132 OR A REQUISITION IS MADE U/S 132A OF THE ACT AFTER 31ST MAY, 2003. CLAUSE (B) OF SUB-SECTION (1) OF SECTION 153A POSTULATES ASSES SMENT OR RE- ASSESSMENT OF TOTAL INCOME OF SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SUCH SEARCH IS CONDUCED OR REQUISITION IS MADE. SHORN OF OTHER DE TAILS, IT WOULD SUFFICE FOR US TO NOTICE CLAUSE (I) OF THE EXPLANATION BELO W SECTION 153A(2) OF THE ACT, WHICH READS AS UNDER :- EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HE REBY DECLARED THAT, - (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SEC TION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHAL L APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION. 14. IN TERMS OF THE ABOVE REFERRED CLAUSE (I) OF TH E EXPLANATION, IT IS EVIDENT THAT ALL THE PROVISIONS OF THE ACT SHALL AP PLY TO AN ASSESSMENT MADE U/S 153A OF THE ACT SAVE AS OTHERWISE PROVIDED IN THE SAID SECTION, OR IN SECTION 153B OR SECTION 153C OF THE ACT. IN T HE BACKGROUND OF THE EXPRESSION ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY CONTAINED IN EXPLANATION (I) BELOW SECTION 153A OF THE ACT, AND IN THE CONTEXT OF THE CONTROVERSY BEFORE US, THE MOOT POINT TO BE EXAMINE D IS AS TO WHETHER OR NOT DEDUCTIONS ENUMERATED IN CHAPTER VIA OF THE ACT ARE TO BE CONSIDERED IN MAKING AN ASSESSMENT MADE U/S 153A(1) (B) OF THE ACT. SECTION 153A(1)(B) OF THE ACT REQUIRES THE ASSESSIN G OFFICER TO ASSESS OR REASSESS THE TOTAL INCOME OF THE ASSESSMENT YEARS SPECIFIED THEREIN. OSTENSIBLY, SECTION 80A(1) OF THE ACT PRESCRIBES TH AT IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE, THERE SHALL BE ALLOW ED FROM HIS TOTAL INCOME THE DEDUCTIONS SPECIFIED IN CHAPTER VIA OF THE ACT. THE MOOT POINT IS AS TO WHETHER THE AFORESTATED POSITION PRE VAILS IN AN ASSESSMENT MADE U/S 153A(1)(B) OR NOT? IN OUR CONSIDERED OPINI ON, HAVING REGARD TO THE EXPRESSION ALL OTHER PROVISIONS OF THIS ACT SH ALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION IN EXPLANATION (I) OF SECTION 153A OF THE ACT, IT CLEARLY IMPLIES THAT IN ASSESSING OR REASSESSING THE TOTAL 14 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 INCOME FOR THE ASSESSMENT YEARS SPECIFIED IN SECTI ON 153A(1)(B) OF THE ACT, THE IMPORT OF SECTION 80A(1) OF THE ACT COMES INTO PLAY, AND THERE SHALL BE ALLOWED THE DEDUCTIONS SPECIFIED IN CHAPTE R VIA OF THE ACT, OF COURSE SUBJECT TO FULFILLMENT OF THE RESPECTIVE CON DITIONS. THEREFORE, WE ARE UNABLE TO SUBSCRIBE TO THE STAND OF THE CIT(A) TO THE EFFECT THAT THE BENEFITS OF CHAPTER VIA OF THE ACT, WHICH INTER-ALI A INCLUDE SECTION 80IB(10) OF THE ACT, ARE NOT APPLICABLE TO AN ASSES SMENT MADE UNDER SECTIONS 153A TO 153C OF THE ACT. IN OUR CONSIDERED OPINION, THE PHRASEOLOGY OF SECTION 153A R.W. EXPLANATION (I) AS NOTED ABOVE, DOES NOT SUPPORT THE PREMISE ARRIVED AT BY THE CIT(A) AND AC CORDINGLY, THE SAME IS REJECTED. THEREFORE, ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT EVEN WITH REGARD TO THE ENHANCED INCOME WAS WEL L WITHIN THE SCOPE AND AMBIT OF AN ASSESSMENT U/S 153A(1)(B) OF THE AC T AND THE ASSESSING OFFICER WAS OBLIGATED TO CONSIDER THE SAME AS PER L AW. 9. IN THE CASE OF MADHAV CORPORATION VS. ACIT (SUPRA) T HE AHMEDABAD BENCH OF THE TRIBUNAL UNDER SIMILAR CIRCUMSTANCE S HAS HELD THAT ON-MONEY RECEIVED BY THE ASSESSEE IN RESPECT OF HOUSING PROJECT WHICH IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10), TH E ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S. 80IB(10) ON THE ON-MONE Y WHICH HAS BEEN DISCLOSED SUBSEQUENT TO SEARCH. THE RELEVANT EXT RACT OF THE FINDINGS OF TRIBUNAL ARE AS UNDER : FURTHER THE FINDING OF CIT (A) IS WITHOUT PROPERLY ADDRESSING THE OBJECTIONS OF THE ASSESSEE. IT IS NOT IN DISPUTE TH AT THE 'ON MONEY' IS RELATABLE TO BUSINESS INCOME ONLY, AND THERE IS NO FINDING OF THE REVENUE AUTHORITIES THAT IT IS OTHERWISE, ONCE IT HAS BEEN DISCLOSED PURSUANT TO SEARCH IN THE HANDS OF THE ASSESSEE. THE DEPARTMENT IS UNABLE TO DISLODGED THE SAME BY ANY COGENT REASONING. IN SUCH SITUATION, REVENUE AUTHORITIES WERE NOT JUSTIFIED TO IGNORE THE SAME A S FAR AS ASSESSEES CLAIM OF DEDUCTION U/S.80IB(10) IN THIS REGARD IS C ONCERN. IT IS SETTLED LEGAL POSITION THAT DOCUMENT HAS TO READ AS WHOLE H AS TO APPRECIATE WHICH WHOLE MAKING ASSESSMENT ON THE BASIS OF SEIZE D DOCUMENT REVENUE AUTHORITIES ARE NOT ALLOWED TO MAKE PICK AN D CHOOSE APPROACH WHILE INTERPRETING THE NOTINGS OF SEIZED DOCUMENT. IN VIEW OF ABOVE, THE CIT (APPEALS) HAS GROSSLY ERRED IN VIEWING THE 'ON MONEY' COMPONENT, AS 15 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 UNRECORDED IN THE REGULAR BOOKS OF ACCOUNTS WHICH W AS IN FACT OFFERED AS INCOME DURING THE COURSE OF RECORDING OF STATEMENT U/S. 132(4) OF THE ACT DURING THE COURSE OF SEARCH PROCEEDINGS CARRIED OUT . THE RETURN OF INCOME FILED IN PURSUANCE OF NOTICE U/S. 153A IS TH E RETURN OF INCOME U/S. 139 OF THE ACT ONLY. THE SAID BOOKS OF ACCOUNTS ARE DULY AUDITED AND SUPPORTED BY THE REQUISITE AUDIT REPORT U/S. 80IB I N FORM NO. 10CCB DATED 25/01/2012. IT IS AN UNDISPUTED FACT THAT THE BUSINESS ACTIVITY OF THE FIRM IS THAT OF DEVELOPING THE HOUSING PROJECTS UNDER THE NAME AND STYLE 'MADHAV PARK (NIKOL)' AND THERE WAS NO OTHER BUSINESS ACTIVITY OF ASSESSEE AS CERTIFIED BY THE AUDITOR IN THE ABOVE S AID REPORT IN FORM NO. 10CCB. IN THE LIGHT OF ABOVE FACTUAL AND LEGAL DISCUSSION, WE ARE OF THE VIEW THAT ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTION IN RESP ECT OF ADDITIONAL INCOME DETECTED CONSEQUENT TO SEARCH IS ENTITLED TO CLAIM OF DEDUCTION U/S. 80IB(10) OF ACT WHICH IS PART OF SALE PROCEEDS OF F LATS OF THE PROJECT. THIS VIEW IS FORTIFIED BY DECISION OF HONBLE GUJARAT HI GH COURT IN CASE OF CIT VS. SUMAN PAPER BOARDS LTD. [2009] 221 CTR 781 (GUJ ). SIMILAR VIEW HAS BEEN TAKEN BY HONBLE BOMBAY HIGH COURT IN CASE OF C.I.T VS. SHETH DEVELOPERS (P) LTD. [2012] 25 TAXMANN.COM 123 (BOM) . THE ASSESSEE FIRM HAS ALREADY SUBMITTED SPECIAL AUDITED REPORT U /S. 80IB OF THE ACT (FORM NO. 10 CCB) WHEREIN IT IS CLEARLY STATED THAT THE ASSESSEE FIRM HAS NO OTHER BUSINESS ACTIVITIES (I.E. OTHER THEN DEVEL OPING A BUILDING HOUSING PROJECTS AS DEFINED 80IB(10) OF THE ACT). ACCORDIN GLY, ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S.80IB(10). ACCORDINGLY APPEAL OF THE ASSESSEE PARTLY ALLOWED. 10. A PERUSAL OF THE CASE LAWS ON WHICH THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE VIZ A VIZ THE FACTS OF THE CASE IN HAN D TAKES US TO AN INEVITABLE CONCLUSION THAT THE ADDITIONAL INCOME DECLARED AT THE TIME OF SEARCH/SURVEY DERIVED FROM HOUSING PROJECT IN THE FORM O F ON-MONEY OR EXTRA SALES CONSIDERATION, WHETHER TO BE TREATED AS IN COME FROM OTHER SOURCES OR BUSINESS INCOME IS A DEBATABLE ISSUE. IT IS A WELL SETTLED LAW THAT WHERE THE ISSUE IS DEBATABLE, PENALTY CANNOT BE LEVIED. IN THE CASE OF ASSESSEE THE TRIBUNAL H AS HELD THE 16 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 ADDITIONAL INCOME DECLARED BY ASSESSEE ON ACCOUNT OF EXTR A SALE CONSIDERATION TO BE ASSESSED UNDER THE HEAD INCOME FR OM OTHER SOURCES. WHEREAS, THERE ARE DECISIONS OF THE TRIBUNAL WH ERE ON-MONEY DECLARED DURING SEARCH WAS HELD TO BE BUSINESS INCOME A ND THE ASSESSEE WAS ALLOWED TO CLAIM BENEFIT OF DEDUCTION U/S. 80IB (10) ON SUCH INCOME DISCLOSED. IN SUCH CIRCUMSTANCES NO PENALTY C AN BE LEVIED WHERE TWO DIFFERENT VIEWS HAVE BEEN TAKEN AND THE ISSUE BECOMES DEBATABLE. THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GURDASPUR CO-OPERATIVE SU GAR MILLS REPORTED AS 354 ITR 27 (P&H) HAS DELETED THE PENALTY LEV IED U/S. 271(1)(C) OF THE ACT WHERE THE ASSESSEE CLAIMED GRANT IN AID AS CAPITAL RECEIPT AND THE REVENUE TREATED THE SAME AS REVENUE RECEIPT. THE HON'BLE HIGH COURT HELD THAT THE ISSUE IS DEBATABLE HENCE NO PENALTY U/S. 271(1)(C) CAN BE IMPOSED. 11. IN THE CASE OF COMMISSIONER OF INCOME TAX VS. LAKHA NI INDIA LIMITED REPORTED AS 1 TAXMANN.COM 164 (P&H), THE HON'BLE H IGH COURT DELETED THE PENALTY LEVIED FOR CONCEALMENT OF INCOME U/S. 27 1(1)(C) ON THE GROUND THAT THE ISSUE IS DEBATABLE. IN THE SAID CA SE, THE ASSESSEE CLAIMED DEDUCTION U/S. 80HHC WHICH WAS DISALLOWED BY THE AS SESSING OFFICER. THE ASSESSING OFFICER LEVIED PENALTY U/S. 271(1)(C) OF THE ACT. IN FIRST APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) DE LETED THE PENALTY ON GROUND THAT MERELY FOR RAISING DEBATABLE ISSUE , PENALTY COULD NOT BE IMPOSED IN ABSENCE OF ANY CONCEALMENT OR MISAPPROPRIATION BY THE ASSESSEE. THE HON'BLE HIGH COURT UPHOLDING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND TRIB UNAL OBSERVED THAT PENALTY COULD NOT BE IMPOSED ON DEBATABLE ISSUE. 17 ITA NOS. 1848 & 1849/PN/2014, A.Y. 2008-09 12. IN VIEW OF THE FACTS OF THE CASE AND THE JUDGMENTS DISCUSSED ABOVE, WE HOLD THAT IN THE INSTANT CASE PENALTY U/S. 271(1 )(C) HAS BEEN LEVIED ON THE ADDITION WHICH IS DEBATABLE. THUS, IT IS NOT A FIT CASE FOR LEVY OF PENALTY. THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 13. SINCE, WE HAVE ACCEPTED THE FIRST CONTENTION OF THE A SSESSEE, THE OTHER ARGUMENTS OF THE LD. AR OF THE ASSESSEE HAVE BECO ME ACADEMIC AND HENCE, ARE NOT DELIBERATED IN THE ORDER. 14. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 12 TH DAY OF AUGUST, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 12 TH AUGUST, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, NASHIK 4. ' / THE CIT-I, NASHIK 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE