The ACIT,(OSD)Circle-9, Ahmedabad V. Pushkar Construction Co., Ahmedabad

ITA 2227/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94561 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKESH JHA SR DR
• Assessee Lawyers: P M MEHTA
• Keywords: Initiation of penalty proceedings
• Section: 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .. , ( .) , BEFORE SHRI G.D. AGARWAL,VICE PRESIDENT (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.2111/AHD/2012 AY 2007-08 2. ./ I.T.A. NO.2227/AHD/2012 AY 2006-07 1. PUSHKAR CONSTRUCTION CO. AMBIKA NIVAS NR.UMA SOCIETY,PALDI AHMEDABAD 2. THE ACIT (OSD) CIRCLE-9 AHMEDABAD / VS. 1. ITO, WARD-9(1) AHMEDABAD 2. M/S.PUSHKAR CONSTRUCTION CO. PALDI, AHMEDABAD % & ./ ./ PAN/GIR NO(S). :AAIFP 1527 B ( %( / APPELLANTS ) .. ( )*%( / RESPONDENTS ) ASSESSEE(S) BY : SHRI P.M. MEHTA, AR RE VENUE BY : SHRI RAKESH JHA, SR.DR +, - .& / DATE OF HEARING 30/09/2015 /012 - .& / DATE OF PRONOUNCEMENT 21/10/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : OUT OF THESE TWO APPEALS; ONE APPEAL IN QUANTUM PE RTAINING TO ASSESSMENT YEAR (AY) 2007-08 IS ON BEHALF OF ASSESS EE AND ANOTHER APPEAL IS ON BEHALF OF THE REVENUE IN PENALTY PROCE EDINGS PERTAINING TO AY 2006-07 AGAINST THE SEPARATE ORDERS OF THE LD.CO MMISSIONER OF ITA NO.2111/AHD/2012 (BY ASSESSEE) AND ITA NO.2227/AHD/2012 (BY REVENUE) PUSHKAR CONSTRUCTION CO. VS. ITO/ACIT ASST.YEARS 2007-08 & 2006-07 RESPECTIVELY - 2 - INCOME TAX(APPEALS)-XV, AHMEDABAD [CIT(A) IN SHORT] DATED 11/08/2010 AND 06/07/2012 RESPECTIVELY. SINCE BOTH THESE APPEALS RELATE TO SAME ASSESSEE, THESE WERE HEARD TOGETHER AND AR E BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . 2. FIRST, WE TAKE UP THE ASSESSEES APPEAL IN ITA N O.2111/AHD/2012 FOR AY 2007-08. THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL:- 1. IN LAW AND ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE, THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APP EALS)-XV [HEREINAFTER REFERRED TO AS 'CIT(A)'], IS BAD IN LA W AND DESERVES TO BE CANCELLED, AS SHE HAS PASSED AN ORDER WITHOUT CONSI DERING AND APPRECIATING THE FACTS OF CASE OF APPELLANT. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN UPHOLDING T HE DISALLOWANCE FOR DEDUCTION U/S. 80IB(10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS 'THE ACT') AMOUNTING TO RS. 74,32,885/- , WHEN SHE OUGHT TO HAVE ALLOWED THE CLAIM OF THE APPELLANT. 3. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE CHARG ING OF INTEREST U/S. 234B OF THE ACT, AMOUNTING TO RS. 8,25,630/-, WHEN NO SUCH INTEREST IS CHARGEABLE IN THE APPELLANT'S CASE. THE APPELLANT D ENIES ITS LIABILITY TO PAY INTEREST. 4. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE CIT(A) HAS GROSSLY ERRED IN NOT ENTERTAINING TH E GROUND AGAINST THE INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C). ITA NO.2111/AHD/2012 (BY ASSESSEE) AND ITA NO.2227/AHD/2012 (BY REVENUE) PUSHKAR CONSTRUCTION CO. VS. ITO/ACIT ASST.YEARS 2007-08 & 2006-07 RESPECTIVELY - 3 - 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 2.1. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 24.12.2009, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE DISALLOWANCE OF DEDUCTION CLAIMED U/S.80IB(10) OF T HE ACT OF RS.74,32,885/-. THE ASSESSEE BEING AGGRIEVED BY TH E ASSESSMENT ORDER, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. APROPOS TO GROUND NO.1, THE LD.COUNSEL FOR THE A SSESSEE HAS NOT MADE ANY EFFECTIVE SUBMISSIONS, THEREFORE THE SAME IS DISMISSED AS SUCH. 4. GROUND NO.2 IS AGAINST THE DISALLOWANCE OF DEDUC TION U/S.80IB(10) OF THE ACT OF RS.74,32,885/-. THE LD.COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS FOLLOWED THE ORDER OF HER PR EDECESSOR PASSED IN AY 2006-07, HOWEVER THE ASSESSEE FEELING AGGRIEVED BY THE ORDER OF THE LD.CIT(A) HAD PREFERRED AN APPEAL BEFORE THE TRIBUN AL (ITAT C BENCH AHMEDABAD) AND THE COORDINATE BENCH OF THIS TRIBUNA L IN ASSESSEES OWN CASE IN ITA NO.1544/AHD/2010 FOR AY 2006-07 VID E ITS ORDER DATED 28/08/2015 HAD ALLOWED THE DEDUCTION. THE LD.COUN SEL FOR THE ASSESSEE ITA NO.2111/AHD/2012 (BY ASSESSEE) AND ITA NO.2227/AHD/2012 (BY REVENUE) PUSHKAR CONSTRUCTION CO. VS. ITO/ACIT ASST.YEARS 2007-08 & 2006-07 RESPECTIVELY - 4 - SUBMITTED THAT IN THE PRESENT APPEAL ALSO, THE FACT S ARE IDENTICAL TO THAT OF AY 2006-07. 4.1. ON THE CONTRARY, THE LD.SR.DR SUPPORTED THE OR DER OF THE AO AND SUBMITTED THAT THE ASSESSEE IS NOT ELIGIBLE FOR DED UCTION U/S.80IB(10) OF THE ACT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISION OF THE COORDINATE BENCH REL IED UPON BY THE LD.COUNSEL FOR THE ASSESSEE. WE FIND THAT THE FACT S IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THE FACTS AS WERE IN THE AY 2006-07 IN ASSESSEES OWN CASE AND THE COORDINATE BENCH IN ITA NO.1544/AH D/2010(SUPRA) HAS DECIDED THE ISSUE BY OBSERVING AS UNDER:- 11. AS FAR AS DENIAL OF DEDUCTION ON THE GROUND OF FLAT SIZE BEING IN EXCESS OF 1500 SQ. FT. IS CONCERNED, WE FIND THAT T HE ASSESSEE HAD SOLD 4 FLATS NAMELY C-401, 402, 403 AND 404 TO 4 DIFFERENT PURCHASERS VIDE SEPARATE SALE DEEDS WHICH HAVE ALSO BEEN CONFIRMED BY THE RESPECTIVE PURCHASERS AND AT THE TIME OF ITS SALE EACH FLAT WA S LESS THAN 1500 SQ. FT. IT IS ALSO A FACT THAT THE INSPECTION WAS CARRIED O UT BY THE DVO SUBSEQUENT AND MUCH AFTER THE DATE WHEN ASSESSEE HA D HANDED OVER THE POSSESSION TO RESPECTIVE OWNERS OF THE FLAT. THE RE SPECTIVE OWNERS HAVE ALSO CONFIRMED BY CARRYING OUT THE MODIFICATION IN THOSE FLATS AND COMBINING THOSE 4 FLATS INTO 2 FLATS. IN SUCH A SIT UATION THE ACT OF THE PURCHASERS OF FLATS OF CONVERTING THE 2 FLATS IN TO 1 FLAT RESULTING INTO THE AREA OF ARE COMBINED FLAT BEING EXCESS OF 1500 SQ. FT. CANNOT BE SAID TO BE DONE BY ASSESSEE AND THEREFORE IT CANNOT BE SAID THAT ASSESSEE HAS SOLD FLAT WHOSE AREA WAS IN EXCESS OF 1500 SQ. FT. ITA NO.2111/AHD/2012 (BY ASSESSEE) AND ITA NO.2227/AHD/2012 (BY REVENUE) PUSHKAR CONSTRUCTION CO. VS. ITO/ACIT ASST.YEARS 2007-08 & 2006-07 RESPECTIVELY - 5 - 12. BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTR ARY BINDING DECISION IN ITS SUPPORT IN VIEW OF THE AFORESAID FACTS, WE A RE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80IB(10) AND THEREFORE SET ASIDE THE ORDER OF A.O. ON THIS GROUND. THUS THIS GROUND OF ASSESSEE IS ALLOWED. 5.1. SINCE THE REVENUE HAS NOT POINTED OUT ANY CHAN GE INTO THE FACTS AND CIRCUMSTANCES OF THE CASE, THEREFORE TAKING A C ONSISTENT VIEW, WE HEREBY DELETE THE DISALLOWANCE AND ALLOW THE DEDUCT ION U/S.80IB(10) OF THE ACT. THUS, ASSESSEES THIS GROUND OF APPEAL IS ALLOWED. 6. GROUND NO.3 IS AGAINST CHARTING OF INTEREST U/S. 234B OF THE ACT OF RS.8,25,630/-. THIS GROUND IS BEING CONSEQUENTIAL IN NATURE, HELD ACCORDINGLY. 7. GROUND NO.4 IS AGAINST INITIATION OF PENALTY PRO CEEDINGS U/S.271(1)(C) OF THE ACT. THIS GROUND IS BEING PRE -MATURE, THEREFORE THE SAME IS DISMISSED AS SUCH. 8. GROUND NO.5 IS GENERAL IN NATURE WHICH REQUIRES NO INDEPENDENT ADJUDICATION. 9. AS A RESULT, ASSESSEES APPEAL IN ITA NO.2111/AH D/2012 FOR AY 2007-08 IS PARTLY ALLOWED. ITA NO.2111/AHD/2012 (BY ASSESSEE) AND ITA NO.2227/AHD/2012 (BY REVENUE) PUSHKAR CONSTRUCTION CO. VS. ITO/ACIT ASST.YEARS 2007-08 & 2006-07 RESPECTIVELY - 6 - 10. NOW, WE TAKE UP THE REVENUES APPEAL IN ITA NO .2227/AHD/2012 FOR AY 2006-07, WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE:- 1) THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AH MEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENAL TY OF RS.36,12,311/- LEVIED U/S.271(1)(C) OF THE ACT. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.COMMISSIONER OF INCOME-TAX(APPEALS)-XV, AHMEDABA D OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.CO MMISISONER OF INCOME-TAX(APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 11. GROUND NOS. 2 & 3 ARE GENERAL IN NATURE WHICH R EQUIRE NO INDEPENDENT ADJUDICATION. 11.1. THE ONLY EFFECTIVE GROUND IN THIS REVENUES A PPEAL IS AGAINST DELETION OF PENALTY OF RS.36,12,311/- LEVIED U/S.27 1(1)(C) OF THE ACT. 11.2. BRIEFLY STATED FACTS ARE THAT WHILE FRAMING T HE ASSESSMENT U/S.143(3) OF THE ACT, THE ASSESSING OFFICE (AO) VI DE ORDER DATED 26.12.2008 MADE TWO DISALLOWANCES; (I) U/S.80IB(10 ) OF THE ACT OF RS.62,83,272/- AND (II) U/S.40(A)(IA) OF THE ACT OU T OF LABOUR EXPENSES OF ITA NO.2111/AHD/2012 (BY ASSESSEE) AND ITA NO.2227/AHD/2012 (BY REVENUE) PUSHKAR CONSTRUCTION CO. VS. ITO/ACIT ASST.YEARS 2007-08 & 2006-07 RESPECTIVELY - 7 - RS.44,48,483/-. THE AO ALSO INITIATED PENALTY PROC EEDINGS U/S.271(1)(C) OF THE ACT. CONSEQUENTLY, THE AO VIDE ORDER DATED 22/03/2011, LEVIED A PENALTY OF RS.36,12,311/- ON THE TOTAL DISALLOWANCE OF RS.1,07,31,755/-. 12. AT THE OUTSET, LD.COUNSEL FOR THE ASSESSEE SUBM ITTED THAT IN QUANTUM APPEAL, THE ASSESSEE HAD CHALLENGED BOTH THE DISALL OWANCES AND THE HONBLE TRIBUNAL IN AY 2006-07 IN ITA NO.1544/AHD/2 010 FOR AY 2006-07 (ASSESSEES OWN APPEAL) WAS PLEASED TO DELE TE THE DISALLOWANCE MADE ON ACCOUNT OF DISALLOWANCE FOR DEDUCTION U/S.8 0IB(10) OF THE ACT AND WITH RESPECT TO DISALLOWANCE U/S.40(A)(IA) OF T HE ACT, THE ISSUE HAS BEEN RESTORED TO THE FILE OF AO FOR RE-EXAMINATION. 12.1. ON THE CONTRARY, LD.SR.DR HAS SUPPORTED THE O RDER OF THE AO. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISION RELIED UPON BY THE LD.COUNS EL FOR THE ASSESSEE. WE FIND THAT THE COORDINATE BENCH IN ITA NO.1544/AHD/2 010 FOR AY 2006- 07 (IN ASSESSEES OWN CASE IN QUANTUM APPEAL) HAS A LLOWED THE DEDUCTION U/S.80IB(10) OF THE ACT AND RESTORED THE ISSUE OF D ISALLOWANCE U/S.40(A)(IA) OF THE ACT, FOR DECISION AFRESH. THI S FINDING OF THE TRIBUNAL HAS NOT BEEN CONTROVERTED BY THE REVENUE. THEREFOR E, IN OUR CONSIDERED VIEW, ONCE THE DISALLOWANCE ON THE BASIS OF WHICH P ENALTY HAS BEEN ITA NO.2111/AHD/2012 (BY ASSESSEE) AND ITA NO.2227/AHD/2012 (BY REVENUE) PUSHKAR CONSTRUCTION CO. VS. ITO/ACIT ASST.YEARS 2007-08 & 2006-07 RESPECTIVELY - 8 - DELETED/SET ASIDE BY THE TRIBUNAL, PENALTY WOULD NO T SURVIVE. THUS, THIS GROUND OF REVENUES APPEAL IS REJECTED. AS A RESUL T, REVENUES APPEAL IN ITA NO.2227/AHD/2012 FOR AY 2006-07 IS DISMISSED. 14. IN THE COMBINED RESULT, ASSESSEES APPEAL IS PA RTLY ALLOWED, WHEREAS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 21 ST DAY OF OCTOBER, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( . ) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 21/ 10 /2015 5...+, .+../ T.C. NAIR, SR. PS !'#$%$&' / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 678 9 / CONCERNED CIT 4. 9 ( ) / THE CIT(A)-XV, AHMEDABAD 5. :; )+78 , . 782 , 6 / DR, ITAT, AHMEDABAD 6. ;< =, / GUARD FILE. / BY ORDER, *: ) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD