M/s. Shashwati Constructions, Pune V. Commissioner of Income-tax - II,

ITA 2010/PUN/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7681 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-01-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 13-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Assessee Lawyers: SUNIL U PATH AK
• Keywords: Principle of natural justice; Additional evidence; Reasonable cause
• Section: 80IB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , ! ' , # $ BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO. 2010/PUN/2014 #& ' (' / ASSESSMENT YEAR : 2009-10 M/S. SHASHWATI CONSTRUCTIONS, 1199/B, CHANKYAPURI, FC ROAD, SHIVAJI NAGAR, PUNE-411 005. PAN : AACAS8021L ....... / APPELLANT & / V/S. THE INCOME TAX OFFICER, WARD 3(2), PUNE. / RESPONDENT ASSESSEE BY : SHRI SUNIL U. PATHAK REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 20.02.2018 / DATE OF PRONOUNCEMENT : 09.05.2018 ) / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX-II, PUNE DATED 11.03.2014 PASSED UNDER SE CTION 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A PROMOTER AND BUILDER. THE ASSESSEE FILED RETURN OF INCOME FOR IMPUGNED 2 ITA NO. 2010/PUN/2014 A.Y. 2009-10 ASSESSMENT YEAR CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF ITS HOUSING PROJECT BHAGWATI PALMS, THERGAON, PUNE. THE ASS ESSING OFFICER VIDE ORDER DATED 27.12.2011 ACCEPTED THE CLAIM OF ASSESSEE. TH E COMMISSIONER OF INCOME TAX INVOKED THE PROVISIONS OF SECTION 263 AND ISS UED NOTICE ON 17.02.2013 ON THE GROUND THAT ASSESSING OFFICER HAS FAILED T O TAKE NOTE OF THE FACT THAT THE AREA OF PLOT OF LAND ON WHICH HOUSING PROJE CT HAS BEEN DEVELOPED IS 4000 SQ. MT. THAT IS LESS THAN MINIMUM AREA OF 1 ACRE AS R EQUIRED UNDER SECTION 80IB (10) OF THE ACT. THE COMMISSIONER OF INCOME TA X SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO D ISALLOW ASSESSEES CLAIM OF DEDUCTION U/S.80IB (10) OF THE ACT. AGAINST THE FINDING S OF COMMISSIONER OF INCOME TAX, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI SUNIL U. PATHAK APPEARING ON BEHALF OF ASSESSEE SUB MITTED THAT THE COMMISSIONER OF INCOME TAX HAS ERRED IN PRESUMING THAT T HE AREA OF PLOT OF LAND ON WHICH HOUSING PROJECT HAS BEEN CONSTRUCTED IS LE SS THAN 1 ACRE. THE ASSESSEE WAS UNDER BONA-FIDE IMPRESSION THAT 4000 SQ. MT . IS EQUAL TO 1 ACRE. THE LD. AR FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDEN CE IN THE FORM OF CERTIFICATE OF ARCHITECT TO THE EFFECT THAT AREA OF PLOT B Y TRIANGULAR METHOD IS 4097.13 SQ. MT. WHICH IS MORE THAN 1 ACRE. THE LD. AR TO S UPPORT HIS SUBMISSIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS: 1) TAURUS ENTERPRISE VS. DCIT, ITA NO. 85/PN/2011, ASSESSME NT YEAR 2007-08 DECIDED ON 12.04.2012. 2) LATE SHRI KRISHANCHAND VASWANI VS. ITO, ASSESSMENT YEAR 2009-10 DECIDED ON 31.12.2014. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER MAY BE DIRE CTED TO CONSIDER THE CERTIFICATE FROM ARCHITECT. THE LD. AR FURTHER C ONTENDED THAT THE ASSESSEE HAS NO OBJECTION EVEN IF FRESH MEASUREMENT OF T HE PLOT OF LAND IS CARRIED OUT. 3 ITA NO. 2010/PUN/2014 A.Y. 2009-10 4. ON THE OTHER HAND, DR. VIVEK AGGARWAL REPRESENTING TH E DEPARTMENT VEHEMENTLY DEFENDED THE ACTION OF COMMISSIONER OF INCOME TAX IN SETTING ASIDE THE ASSESSMENT ORDER AND DIRECTING ASSESSING OFFICER TO R E-FRAME THE ASSESSMENT AFTER WITHDRAWING BENEFIT OF DEDUCTION U/S. 80IB (10) OF THE ACT. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT PLACED ON RE CORD ANY EVIDENCE WHATSOEVER BEFORE THE AUTHORITIES BELOW INDICATING THAT T HE LAND OF THE ASSESSEE IS MORE THAN 4046.87 SQ. MT. I.E. EQUAL TO 1 ACRE. IN FACT, THE ASSESSEE HAS ADMITTED BEFORE THE COMMISSIONER OF INCOME TAX AND THE A SSESSING OFFICER THAT AREA OF PLOT OF LAND ON WHICH HOUSING PROJECT HAS BEEN CO NSTRUCTED IS 4000 SQ. MT. 4.1 THE LD. DR TAKING STRONG OBJECTION TO THE ADDITIONAL EVIDENCE FILED BY ASSESSEE SUBMITTED THAT NO REASON WHATSOEVER HAS BEE N GIVEN BY THE ASSESSEE, FOR NOT FURNISHING THE CERTIFICATE OF ARCHITECT BEFORE THE AU THORITIES BELOW. THE LD. DR FURTHER ASSERTED THAT NO FRESH EVIDENCE SHOULD BE ACCEPTED IN PROCEEDINGS U/S. 263 OF THE ACT. THE LD. DR IN SUPPORT O F HIS SUBMISSION PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT O F INDIA IN THE CASE OF A. ANDISAMY CHETTIAR VS. A. SUBBURAJ CHETTIAR REPORTED AS (2015) 17 SCC 713. THE LD. DR FURTHER POINTED THAT THE ASSESSING OFFICER HAS A LREADY GIVEN EFFECT TO THE ORDER OF COMMISSIONER OF INCOME TAX AND HAS PASSED ASSESSMENT ORDER ON 25.09.2014. IF THE ASSESSEE HAS ANY GRIEVANCE WITH RESPE CT TO THE AREA OF PLOT OF LAND, HE CAN FILE ADDITIONAL DOCUMENT IN PROCEEDINGS BEFORE THE COMMISSION ER OF INCOME TAX (APPEALS). 4.2 THE LD. DR SUBMITTED THAT THE CERTIFICATE OBTAINED BY T HE ASSESSEE FROM AN ARCHITECT IS A SELF SERVING DOCUMENT. THE TAX AUDIT REP ORT FILED BY ASSESSEE TO CLAIM DEDUCTION U/S. 80IB (10) MENTIONS THE AREA OF PLOT AS 4000 SQ. MT. THE SALE DEED OF THE PLOT MENTIONS THE AREA AS 40R = 4000 S Q. MTS. THE ASSESSEE HAS PAID STAMP DUTY ON THE PLOT MEASURING 4000 SQ. MTS . THE ASSESSEE HAS NOT 4 ITA NO. 2010/PUN/2014 A.Y. 2009-10 FURNISHED ANY DOCUMENT TO SHOW THAT ADDITIONAL STAMP DUT Y HAS BEEN PAID IN RESPECT OF AREA IN EXCESS OF 4000 SQ. MTS. 5. CONTROVERTING THE SUBMISSION MADE BY THE LD. DR, THE LD . AR SUBMITTED THAT THERE IS NO BAR IN FURNISHING ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL IN PROCEEDING ARISING FROM THE ORDER OF COMMISSIONER OF INCOME TAX U/S. 263 OF THE ACT. IN SUPPORT OF HIS SUBMISSION, THE LD. AR PLACED RELIA NCE ON THE DECISION OF HON'BLE HIGH COURT OF HIMACHAL PRADESH IN THE CASE OF VIR BHADRA SINGH (HUF) VS. PR. CIT REPORTED AS 86 TAXMANN.COM 113. 5.1 THE LD. AR FURTHER SUBMITTED THAT ASSESSEE WOULD NOT BE ABLE TO AGITATE THIS ISSUE BY FURNISHING ADDITIONAL EVIDENCE IN PROCEEDINGS BE FORE THE COMMISSIONER OF INCOME TAX (APPEALS) ARISING OUT OF ASSESSM ENT ORDER PASSED U/S. 143 R.W.S. 263 OF THE ACT, IF HE DOES NOT RAISE THE OB JECTION IN PROCEEDINGS U/S.263 ITSELF. TO SUPPORT HIS CONTENTIONS, THE LD. AR PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF HERDILLIA CHEMICALS LTD. VS. COMMISSIONER OF INCOME TAX REPORTED AS 221 ITR 194 ( BOM.). THE LD. AR FURTHER SUBMITTED THAT DUTY OF THE ASSESSING OFFICER IS TO ASSESS CORRECT INCOME IN THE HANDS OF ASSESSEE. WHERE THE ASSESSEE HAS INADVE RTENTLY OFFERED MORE INCOME TO TAX, THE DUTY IS CAST UPON THE ASSESSING OFFICER TO GUIDE THE ASSESSEE AND ASSESS CORRECT TAX LIABILITY. THE LD. AR IN SUPPORT OF H IS SUBMISSION PLACED RELIANCE ON THE CBDT CIRCULAR DATED 11.04.1955 AND THE DE CISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF AHMEDABAD ELECTRICITY CO. LTD. VS. COMMISSIONER OF INCOME TAX REPORTED AS 199 ITR 351 (FB). 5.2 THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE CANNO T BE PENALIZED FOR THE WRONG ADVICE GIVEN BY CHARTERED ACCOUNTANT. THE ASSESSEE HAS OBTAINED CERTIFICATE FROM THE ARCHITECT AFTER COMPLETION OF PROCEEDING S U/S. 263 OF THE 5 ITA NO. 2010/PUN/2014 A.Y. 2009-10 ACT. THEREFORE, THERE WAS NO OCCASION FOR THE ASSESSEE TO FURNISH THIS DOCUMENT EITHER BEFORE THE COMMISSIONER OF INCOME TAX OR THE ASSESSING OFFICER . 6. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIV ES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. WE HAV E ALSO CONSIDERED THE VARIOUS JUDGMENTS ON WHICH RELIANCE HAS BEEN PLACED BY RIVAL PARTIE S. 7. THE FIRST ISSUE THAT EMANATES FROM SUBMISSIONS MADE BY BOTH THE SIDES IS; WHETHER THE ADDITIONAL EVIDENCE FILED BY ASSESSEE CAN B E ACCEPTED IN APPELLATE PROCEEDINGS ARISING FROM ORDER PASSED U/S. 263 OF THE ACT. THE ASSESSEE HAS OBTAINED CERTIFICATE FROM ARCHITECT INDICA TING THE AREA OF PLOT OF LAND MEASURED BY APPLYING TRIANGULAR METHOD AS 40 97.13 SQ. MT. THE ADDITIONAL EVIDENCE FILED BY ASSESSEE I.E. CERTIFICATE OF ARCHITEC T IS DATED 03.09.2015. BY THE TIME, ASSESSEE OBTAINED AFOREMENTIONED C ERTIFICATE, ASSESSMENT ORDER U/S. 143 R.W.S. 263 WAS ALREADY PASSED . THUS, THERE WAS NO OCCASION FOR THE ASSESSEE TO FURNISH THIS CERTIFICATE BEFORE THE AUTHORITIES BELOW. IN SO FAR AS THE POWER OF THE TRIBUNAL TO ACCEPT ADDITION AL EVIDENCE IN PROCEEDINGS ARISING FROM SECTION 263 IS CONCERNED; WE ARE OF CONSIDERED VIEW THAT THERE IS NO IMPEDIMENT, PROVIDED THE ASSESSEE IS ABLE TO SHOW REASONABLE CAUSE IN NOT FURNISHING THE DOCUMENTS BEFORE THE AUTHOR ITIES BELOW. OUR VIEW IS SUPPORTED BY THE DECISION OF HON'BLE HIGH COURT OF HIMACHA L PRADESH IN THE CASE OF VIRBHADRA SINGH (HUF) VS. PR. CIT (SUPRA.). IN THE SAID CASE, REVENUE HAD PLACED ADDITIONAL MATERIAL TO SUPPORT ITS CASE BEFORE T HE TRIBUNAL. THE TRIBUNAL ACCEPTED THE ADDITIONAL EVIDENCE AND CONFIRMED THE ORDER OF COMMISSIONER OF INCOME TAX PASSED U/S. 263 OF THE ACT. T HE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE HON'BLE HIGH COURT INTER ALIA CHALLENGING ADMISSION OF ADDITIONAL EVIDENCE BY THE TRIBUNAL. THE HON'BLE HIGH COURT APPROVED THE ACTION OF TRIBUNAL IN ADMITTING ADDITIONAL EVIDE NCE AND HELD THAT 6 ITA NO. 2010/PUN/2014 A.Y. 2009-10 THE SCOPE OF THE TRIBUNAL TO EXAMINE CORRECTNESS OF THE EXERCISE OF JURISDICTION BY COMMISSIONER IS WIDE ENOUGH TO ADMIT ADDITIONAL EVIDENCE AT ITS DISCRETION FOR DOING SUBSTANTIAL JUSTICE IN THE MATTER AS DEFINED UNDE R SECTION 263 OF THE ACT. THE RELEVANT EXTRACT OF THE JUDGMENT OF HONBLE HIGH COURT APPROVING THE ACTION OF TRIBUNAL IN ACCEPTING ADDITIONAL EVIDENCE IN PROCEED INGS U/S. 263 READS AS UNDER: 118. THUS, IN THE GIVEN FACTS AND CIRCUMSTANCES, W E HOLD THE TRIBUNAL TO HAVE CORRECTLY AFFIRMED THE ORDER PASSED BY THE COMMISSIO NER. ALSO, IT CANNOT BE SAID THAT THE TRIBUNAL ERRED IN ACCEPTING THE ADDIT IONAL EVIDENCE PLACED ON RECORD BY THE REVENUE. IT ALSO CANNOT BE SAID THAT THE TRIBUNAL COMMITTED ANY MATERIAL IRREGULARITY AND VIOLATED ANY PROCEDURE AN D SUCH ACTION IS ILLEGAL OR BAD IN LAW. IN FACT, WE FIND PRINCIPLES OF NATURAL JUSTICE AND FAIR PLAY TO HAVE BEEN ADHERED TO AND FULLY COMPLIED WITH . FURTHER, THE HON'BLE HIGH COURT HELD THAT THE TERM REC ORD AS MENTIONED UNDER SECTION 263 OF THE ACT DOES NOT IMPEDE THE POWER S OF TRIBUNAL TO CONSIDER ADDITIONAL MATERIAL FOR PASSING NECESSARY ORDERS. THE HON'B LE HIGH COURT OBSERVED: 122. AS IS EVIDENT, DEFINITION OF WORD 'RECORD', IN CLUSIVE IN NATURE, IS RESTRICTED TO AND CONFINED ONLY TO THE EXERCISE OF POWER BY THE COMMISSIONER AND WOULD NOT RELATE TO THE AMPLITUDE O F THE POWER EXERCISABLE BY THE TRIBUNAL 'TO PASS SUCH ORDERS' ' AS IT DEEMS FIT '. THUS, FROM THE DECISION OF HON'BLE HIGH COURT, IT IS AMPLY CLEAR THAT THE TRIBUNAL CAN ACCEPT ADDITIONAL EVIDENCE FOR PROPER ADJUDIC ATION OF THE CASE EVEN IN PROCEEDINGS U/S. 263 OF THE ACT. 8. WE OBSERVE THAT THE ADDITIONAL EVIDENCE FILED BY ASSESSE E IN THE FORM OF CERTIFICATE FROM AN ARCHITECT INDICATING THE AREA OF PLOT OF LA ND BY APPLYING TRIANGULAR METHOD AS MORE THAN 4046.87 SQ. MT. WAS OBTAI NED BY ASSESSEE ON 03.09.2015 I.E. MUCH AFTER THE PASSING OF ASSESSMENT ORDER GIVING EFFECT TO THE ORDER OF COMMISSIONER OF INCOME TAX U/S. 263 OF THE ACT. T HEREFORE, THERE WAS NO OCCASION FOR THE ASSESSEE TO FURNISH CERTIFICATE BEFORE COMMISSIONER OF INCOME TAX OR THE ASSESSING OFFICER. WE ARE OF CONSIDERE D VIEW THAT THE 7 ITA NO. 2010/PUN/2014 A.Y. 2009-10 ADDITIONAL EVIDENCE FURNISHED BY ASSESSEE GOES TO THE ROO T OF ISSUE IN DETERMINING ASSESSEES ELIGIBILITY TO CLAIM BENEFIT OF DEDUCTIO N U/S. 80IB (10) OF THE ACT. THE ADMISSION OF ADDITIONAL EVIDENCE IS THUS, NECESS ARY FOR PROPER ADJUDICATION OF THE CASE. NON ACCEPTANCE OF ADDITIONAL EVIDE NCE WOULD RESULT IN ASSESSEE LOOSING THE BENEFIT IF OTHERWISE; THE ASSESSEE IS E LIGIBLE FOR CLAIMING THE SAME. THEREFORE, WE ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASS ESSEE. 9. SINCE THIS CERTIFICATE FROM AN ARCHITECT HAS BEEN FURNISH ED FOR THE FIRST TIME BEFORE THE TRIBUNAL AS ADDITIONAL EVIDENCE, THE REVENU E HAD NO OCCASION TO TEST VERACITY OF THIS DOCUMENT. THE LD. AR HAS STATED AT THE BAR THAT THE ASSESSEE HAS NO OBJECTION IF THE MATTER IS REMITTED TO T HE ASSESSING OFFICER FOR VERIFICATION AND RE-MEASUREMENT OF THE LAND. ACCORDINGLY, WE DEEM IT APPROPRIATE TO MODIFY THE DIRECTION GIVEN BY THE COMMISSIO NER OF INCOME TAX, THE ASSESSING OFFICER IS DIRECTED TO RE-ADJUDICATE THE ISSU E OF ASSESSEES ELIGIBILITY FOR CLAIMING DEDUCTION U/S. 80IB (10) SUBJECT TO MEAS UREMENT OF AREA OF PLOT OF LAND ON WHICH HOUSING PROJECT HAS BEEN CONSTRU CTED. THE BENEFIT OF DEDUCTION U/S. 80IB (10) BE ALLOWED TO THE ASSESSEE, IF THE AREA OF PLOT OF LAND IS MORE THAN OR EQUAL TO 4046.87 SQ. MT (1ACRE) AFTER MEASU REMENT. ACCORDINGLY, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS A FORESAID. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 09 TH DAY OF MAY, 2018 SD/- SD/- ( . / D. KARUNAKARA RAO ) ( ! ' /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 09 TH MAY, 2018 SB 8 ITA NO. 2010/PUN/2014 A.Y. 2009-10 ) * +#,-! .!(, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT-II, PUNE. 4 . $%& '( , ) '( , * *+, , / DR, ITAT, B BENCH, PUNE. 5. &-. /0 / GUARD FILE. // TRUE COPY // )1 / BY ORDER, 2 ', / PRIVATE SECRETARY ) '( , / ITAT, PUNE.