Deputy Commissioner of Income-tax, V. M/s. Pharande Developers, Pune

ITA 1971/PUN/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8519 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 08-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: UDAY BHATIA; SUNIL GANOO S C BHATIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1971/PN/2013 (ASSESSMENT YEAR : 2006-07) ITO, WARD 8(3), PUNE . APPELLANT VS. PHARANDE DEVELOPERS 98/2, GURUVIHAR PUNE NASHIK ROAD BHOSARI, PUNE 411039 PAN: AAFFP3023R . RESPONDENT ASSESSEE BY : S/SHRI SUNIL GANOO, S.C. BHATIA & UDAY BHATIA DEPARTMENT BY : SHRI B.C. MALAKAR DATE OF HEARING : 13-10-2014 DATE OF PRONOUNCEMENT : 16-10-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, PUNE DA TED 20.08.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 30.03.2012 PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE IT. ACT, WITHOUT CONSIDERING THE ISSUES INVOLVED AND IG NORING THE MERITS OF THE CASE ? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE IT. ACT ON THE BASIS OF THE SUBMISSION MADE BY THE ASSE SSEE THAT THE QUANTUM ADDITION IN RESPECT OF WHICH PENALTY HAS BE EN LEVIED BY THE ASSESSING OFFICER HAS BEEN DELETED BY THE HON'BLE I TAT, WITHOUT VERIFYING THAT THE DEPARTMENT IS PREFERRING APPEAL AGAINST THE ORDER OF HON'BLE ITAT AND WHEN THE MATERIALS CLEARLY SHOW TH AT THE TAXES WERE ITA NO.1971/PN/2013 PHARANDE DEVELOPERS EVADED BY CLAIMING DEDUCTIONS WITHOUT COMPLYING TO THE PRESCRIBED CONDITIONS? 3. ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT ESSENTIALLY, THE GRIEVANCE IS AGAINST THE ORDER OF CIT(A) IN DIRECTING THE ASSESSING OFFICER TO DELETE THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT AMOUNTING TO RS.20,91,973/- AFTER CERTAIN VERIFICAT IONS. 4. IN BRIEF, THE RELEVANT FACTS ARE AS FOLLOWS. TH E RESPONDENT ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOP MENT OF LAND, CONSTRUCTION OF BUILDINGS AND SALE THEREOF. IN THE ASSESSMENT O RDER DATED 22.12.2008 FOR ASSESSMENT YEAR 2006-07, ASSESSING OFFICER ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.71,60,030/- AFTER DISALLOWING THE CL AIM OF DEDUCTION U/S 80IB(1) OF THE ACT AMOUNTING TO RS.63,39,314/-. SUBSEQUENT LY, THE ASSESSING OFFICER HELD THE ASSESSEE GUILTY OF CONCEALMENT OF INCOME W ITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT QUA THE DEDUCTION U/S 80IB(10) OF THE ACT DISALLOWED IN THE ASSESSMENT PROCEEDINGS. ACCORDIN GLY, IN AN ORDER PASSED U/S 271(1)(C) OF THE ACT DATED 30.03.2012, THE ASSE SSING OFFICER LEVIED PENALTY EQUIVALENT TO 100% OF THE TAX SOUGHT TO BE EVADED O N THE AFORESTATED AMOUNT OF DEDUCTION DISALLOWED. AS A RESULT, A PENALTY OF RS.20,91,973/- WAS LEVIED. 5. THE DISALLOWANCE PERTAINS TO A DEDUCTION U/S 80I B(10) OF THE ACT CLAIMED BY THE ASSESSEE IN RESPECT OF A PROJECT LA KSHDWEEP. THE DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT AMOUNTING TO RS.63, 39,314/- WAS DISALLOWED ON THE GROUND THAT UNIT NOS.G-1 & G-2 WERE COMBINED AND AREA OF THE CONSOLIDATED BUNGALOW WAS 1975 SQ. FT., WHICH WAS M ORE THAN THE PRESCRIBED LIMIT OF 1500 SQ. FT. IN SECTION 80IB(10)(C) OF THE ACT. THE CIT(A) HAS DELETED THE PENALTY ON ACCOUNT OF AN ORDER OF TRIBUNAL IN T HE ASSESSEES OWN CASE IN THE QUANTUM PROCEEDINGS DATED 25.06.2013 IN ITA NO. 175/PN/2011. THE RELEVANT DISCUSSION IN THE ORDER OF THE CIT(A) READ S AS UNDER: ITA NO.1971/PN/2013 PHARANDE DEVELOPERS 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AS WELL AS REPLY OF THE APPELLANT. IN THIS CASE, IT IS SEEN THAT TH E ISSUE HAS BEEN DECIDED BY THE HON'BLE ITAT VIDE ORDER DATED 25.06.2013, WH EREIN THE ASSESSING OFFICER HAS BEEN DIRECTED TO RECOMPUTE TH E DEDUCTION U/S. 80IB(10) OF INCOME-TAX ACT AFTER EXCLUDING THE PROF IT OF BUNGLOW NO. G- 1 & G-2. THE LEARNED COUNSEL OF THE APPELLANT HAS SUBMITTED THAT BUNGLOW NO.G-1 & G-2 WAS SOLD IN A.Y. 2005-06 AND T HEREFORE, THE ISSUE OF RECOMPUTATION OF PROFIT OF BUNGLOW G-1 & G -2 IN THE PRESENT ASSESSMENT YEAR I.E. 2006-07 WILL NOT ARISE. THE A PPELLANT HAS NOT BEEN ABLE TO FURNISH THE COPY OF ORDER, GIVING EFFE CT TO HON'BLE ITAT'S ORDER. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO VERIFY THIS ASPECT AND IN CASE PROFIT OF G-1 & G-2 IS NOT INCLUDED IN THE PROFIT OF A.Y. 2006- 07, HE IS DIRECTED TO DELETE THE PENALTY LEVIED U/S . 271(1)(C) OF INCOME- TAX ACT AMOUNTING TO RS.20,91,973/- AFTER VERIFICAT ION. THUS, THE GROUND IS ALLOWED FOR STATISTICAL PURPOSE. 6. THE AFORESAID DISCUSSION BY THE CIT(A) REVEALS T HAT THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE DE DUCTION CLAIMED U/S 80IB(10) OF THE ACT AFTER EXCLUDING THE PROFITS OF UNIT NOS.G-1 & G-2. THE CLAIM OF THE ASSESSEE WAS THAT THE DEDUCTION CLAIME D ORIGINALLY U/S 80IB(10) OF THE ACT, THUS, STOOD ALLOWED AS PER THE ORDER OF TH E TRIBUNAL DATED 25.06.2013 (SUPRA) AND THEREFORE, THE PENALTY LEVIED BY THE AS SESSING OFFICER U/S 271(1)(C) OF THE ACT DID NOT SURVIVE. IT WAS ALSO ASSERTED B Y THE ASSESSEE THAT THE PROFITS RELATING TO BUNGALOW NO.G-1 & G-2 WERE DECLARED IN THE PRECEDING ASSESSMENT YEAR 2005-06 AND THEREFORE, THERE WAS NO ELEMENT OF PROFIT IN THE CURRENT ASSESSMENT YEAR RELATING TO BUNGALOW NO.G-1 & G-2 WHICH FORMED PART OF THE DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT. THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO VERIFY THE LATTER ASSERTION OF THE ASSESSEE AND AFTER VERIFICATION, HE HAS FURTHER DIRECTED THE ASSESSING OFFICER TO DELETE THE APPROPRIATE AMOUNT OF PENALTY. AGAINST SUCH DIRECT IONS, REVENUE IS IN APPEAL BEFORE US. 7. AT THE TIME OF HEARING, THE ONLY PLEA RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS THAT THE ORDER OF THE TRIBUNAL DA TED 25.06.2013 (SUPRA) IN THE QUANTUM PROCEEDINGS HAS NOT BEEN ACCEPTED BY TH E DEPARTMENT AND IT IS ITA NO.1971/PN/2013 PHARANDE DEVELOPERS PREFERRING APPEAL BEFORE THE HONBLE HIGH COURT. N EVERTHELESS, THERE IS NO ASSERTION OR ANY MATERIAL TO SUGGEST THAT THE ORDER OF THE TRIBUNAL DATED 25.06.2013 (SUPRA) HAS BEEN ALTERED BY ANY HIGHER A UTHORITY. THUS, THE ORDER OF THE TRIBUNAL DATED 25.06.2013 (SUPRA) CONTINUES TO HOLD FIELD AND IN THAT LIGHT, WE FIND THAT THE CIT(A) MADE NO ERROR IN PAS SING THE IMPUGNED DIRECTIONS. 8. IN THE RESULT, WE AFFIRM THE ORDER OF THE CIT(A) AND THE REVENUE FAILS. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE, DATED: 16 TH OCTOBER, 2014. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A)-V, PUNE 4) THE CIT-V, PUNE 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE