The ITO, Ward-2(5), Baroda V. M/s. Shakti Developers, Baroda

ITA 2146/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0463 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 23-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMADABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 2146/AHD/2010 ASSESSMENT YEAR :2004-05 THE INCOME TAX OFFICER, WARD-2(5), 1 ST FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA. V/S . M/S. SHAKTI DEVELOPERS SUJANYA SOCIETY GIDC, VADSAR ROAD, BARODA PAN NO. A A FOS4898J (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI T. SANKAR, SR. D.R. /BY RESPONDENT SHRI S. N. SOPARKAR, SR. ADV. WITH SHRI D. K. PARIKH /DATE OF HEARING 11.01.2013 /DATE OF PRONOUNCEMENT 08.03.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHIC H HAS EMANATED FROM THE ORDER OF CIT(A)-V, BARODA, DATED 16.04.201 0 FOR A.Y. 2004-05. THE SOLE GROUND OF APPEAL IS AGAINST DELETING THE PENAL TY OF RS.5,97,014/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT THOUGH THE ASSESSEE WAS NOT ELIGIBLE FOR TH E DEDUCTION AS THE PROJECT OF THE ASSESSEE WAS APPROVED AS RESIDENTIAL-CUM-COM MERCIAL PROJECT AND NOT AS HOUSING PROJECT. 2. LD. A.O. IMPOSED PENALTY U/S. 271(1)(C) OF THE I T ACT VIDE HIS ORDER DATED 12.03.2009 AND IT WAS HELD THAT THE APPELLANT HAD CLAIMED DEDUCTION U/S. 80IB AMOUNTING TO RS. 16,64,147/- IN HIS COMPU TATION OF INCOME FILED ITA NO. 2146/AHD/10 A.Y. 04-05 PAGE 2 ALONGWITH THE RETURN OF INCOME. IT WAS OBSERVED BY HIM THAT PROJECT INCLUDED CONSTRUCTION OF COMMERCIAL COMPLEX ADMEASURING 740. 50 SQ.MTRS. THE ASSESSEE FIRM HAD OBTAINED APPROVAL FOR CONSTRUCTIO N SHOPS ON GROUND FLOOR OF THE FLATS. THE TOTAL FSI DEMARCATED FOR SHOPS WAS 484.64 SQ.MTR. THE ASSESSEE HAD VIOLATED THE CONDITIONS PRESCRIBED IN CLAUSE (D) OF SECTION 80IB(10), AS ITS APPROVED PROJECT INCLUDES COMMERCI AL COMPLEX IN EXCESS OF 2000 SQ.FT. AFTER CONSIDERING THE DETAILED REPLY O F THE ASSESSEE, HE IMPOSED PENALTY U/S.271(1)(C) AT RS.5,97,014/-ON CONCEALING THE INCOME OF RS.16,64,147/-FOR FURNISHING INACCURATE PARTICULARS AND CONCEALING HIS INCOME. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ) WHO HAD DELETED THE ADDITION ON THE BASIS OF FINDINGS GIVEN IN A.Y. 04- 05 AND HELD THAT IT CAN BE SAFELY COMMENTED THAT THE CLAIM IS AT BEST DEBATABL E. IT IS EVIDENT THAT THE APPELLANT HAD ADOPTED THE INTERPRETATION SUITABLE T O HIM AND HAS ALSO SUBSTANTIATED ITS ARGUMENTS, IT CANNOT BE INFERRED FROM THE FACTS THAT THE SUBMISSIONS OF THE APPELLANT WERE FALSE OR THE CLAI M WAS NOT BONAFIDE. THE PENALTY U/S.271(1)(C) WAS THUS DIRECTED TO BE DELET ED. 4. NOW THE REVENUE IS BEFORE US AND HE HAS FAIRLY A CCEPTED THAT IN QUANTUM APPEAL IN A.Y. 04-05 IN ITA NO. 2256/AHD/20 08 HAD BEEN RESTORED BACK TO THE A.O. VIDE CO-ORDINATE B BENCH, AHMADA BAD, ORDER DATED 07.03.2011 AS THE PENALTY ORDER IN ITA NO. 1558/AHD /2010 HAS ALSO BEEN SET ASIDE BY THE CO-ORDINATE D BENCH VIDE ORDER DATED 14.09.2012. THE OPERATIVE PORTION OF THE ORDER IS AS UNDER: 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT HONBLE ITAT VIDE ITS ORDER DATED 07-03-2011 I N ITA NO. 2256- 2257/AHD/2008 FOR A.YS. 2004-05 & 2005-06 IN QUANTU M PROCEEDING ITA NO. 2146/AHD/10 A.Y. 04-05 PAGE 3 HAS SET ASIDE THE ORDER PASSED BY AUTHORITIES BELOW IN RESPECT OF ADDITION ON WHICH PENALTY U/S. 271(1)(C) OF THE ACT OF RS.5,70,350/- HAS BEEN IMPOSED BY ASSESSING OFFICER AND SUSTAINED BY LD. CIT(A) AND THE MATTER HAS BEEN RESTORED BACK TO THE FILE O F AO FOR FRESH ADJUDICATION. SINCE, THE BASIS ON WHICH THIS PENAL TY WAS LEVIED IS NO LONGER THERE THE PENALTY DOES NOT SURVIVE AND THE O RDERS OF AUTHORITIES BELOW LEVYING / SUSTAINING PENALTY ARE HEREBY SET ASIDE. IT IS ALSO MADE CLEAR THAT IN CASE THE AO AFTER PAS SING THE ORDER IN QUANTUM PROCEEDINGS, IS SO, SATISFIED HE MAY RE-INI TIATE THE PENALTY PROCEEDING U/S.271(1)(C) OF THE ACT. THE FACTS OF THE CASE ARE IDENTICAL, THEREFORE, ON THE SAME REASONING, WE HELD THAT WHEN QUANTUM ADDITION HAS BEEN SET ASIDE, THE PENALTY PROCEEDING NO LONGER IS SURVIVED. THE A.O. IS FREE TO INITIATE P ENALTY PROCEEDING U/S. 271(1)(C) AFTER DECIDING THE SET ASIDE PROCEEDING I N QUANTUM APPEAL. 5. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSE. THIS ORDER PRONOUNCED IN OPEN COURT ON 08.03.2013 SD/- SD/- ( MUKUL KR. SHRAWAT ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;