OM SAIRAM DEVELOPRS, MUMBAI V. ITO RG 25(2)(4), MUMBAI

ITA 257/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3325 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.257/M/13 ( / ASSESSMENT YEAR: 2006-07) OM SAIRAM DEVELOPERS A- 401, SWETA PARK, DAULAT NAGAR, ROAD NO.2, BORIVALI (E), MUMBAI - 400066 / VS. INCOME TAX OFFICER 25(2)(4), C-11, PRATYAKSHAR BHAVAN, 1 ST FLOOR, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI - 400051 ./ ./PAN/GIR NO. : AAAFO8056G ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 09.12.2015 /DATE OF PRONOUNCEMENT: 16.03.2016 ! / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS CHALLENGED THE ORDER DATED 05.10.2012 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) 35, MUMBAI [HEREINAFTER REFERRED TO AS TH E LEARNED CIT(A)] RELEVANT TO THE A.Y.2006-07 WHEREIN THE LEARNED CIT(A) CONFIRMED THE PENALTY TO THE TUNE OF RS.4,17 ,220/- U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961. ASSESSEE BY: SHRI RAJIV THAKKAR DEPARTMENT BY: SHRI SHIDDARAMAPPA K. NAVAR ITA NO.257/MUM/2013 ASSESSMENT YEAR: 2006-07 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINI NG THE PENALTY RS.4,17,220/- LEVIED UNDER SECTION 271( 1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) BY THE LEARNE D ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF RS.10,59,230/- IN RESPECT OF PROJECT VRINDAVAN COMP LEX ON THE GROUND THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS AND CONCEALED INCOME. 2. THE LEARNED AUTHORITIES FAILED TO DISCHARGE THE BURDEN CAST ON THEM TO PROVE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OR CONCEALED PARTICULARS OF INCOME BEFORE LEVYING PENALTY U/S. 271(1)(C) OF THE ACT. 3. THE LEARNED AUTHORITIES OUGHT NOT TO HAVE LEVIED PENALTY IN THE ABSENCE OF A FINDING OF MALAFIDE CON DUCT ON THE PART OF THE ASSESSEE. 3. THE APPELLANT IS A FIRM AND ITS ASSESSMENT WAS C OMPLETED ON 26.12.2008 DETERMINING TOTAL INCOME TO THE TUNE OF RS.15,04,694/- AS AGAINST THE RETURNED LOSS TO THE TUNE OF RS.9,5 7,605/-. AFTER THE SCRUTINY ASSESSMENT THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS:- 1. RS.10,59,230/- IN RESPECT OF PROJECT VRINDAVAN COMPLEX 2. RS.5,00,000/- IN RESPECT OF PROJECT SAI ASHIRWAD 3. RS.13,77,556/- UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 ITA NO.257/MUM/2013 ASSESSMENT YEAR: 2006-07 3 3.1 AFTER THE ABOVE SAID ADDITION THE APPELLANT WEN T IN THE APPEAL BEFORE THE LEARNED CIT(A) AND THE LEARNED CI T(A) DELETED THE ADDITION NO.2 AND 3 AND UPHELD THE ADDITION IN CONNECTION WITH THE VRINDAVAN COMPLEX MENTIONED ABOVE. THEREAFTER, ASSESSING OFFICER INITIATED THE PENALTY PROCEEDING AND IMPOSE D THE PENALTY TO THE TUNE OF RS.4,17,220/-. THEREAFTER, UNDER APPEA L THE LEARNED CIT(A) UPHELD THE PENALTY ORDER PASSED BY THE ASSES SING OFFICER. FEELING AGGRIEVED THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE FILE. IN THE INSTANT CASE PENALTY HAS BEEN IMPOSED ON THE GROUND OF ADDITION SUSTAINED BY THE LEARNED CIT(A). THE FINDING OF TH E LEARNED CIT(A) IN THIS CONNECTION IS REPRODUCED AS UNDER:- (I) A SUM OF INR 5,39,514/- REPRESENTS SALE PROCEEDS OF FLAT NO. C-403 WAS TO BE ADJUSTED AGAINST DEPOSIT OF INR 21,00,000/- TO BE RECEIVED FROM M/S. KALARIA CONSTRUCTION, BUT THE SAME WAS INADVERTENTLY INCLUDED IN THE SALE OF FLATS DURING A.Y. 2005-06 AND WAS OFFERED TO TAX AND SUCH MISTAKE WAS RECTIFIED DURING THE YEAR IN THE BOOKS OF THE APPELLANT. (II) SIMILARLY, THE APPELLANT WRONGLY TREATED THE REPAYMENT OF DEPOSIT OF INR 7,00,000 OUT OF THE TOTAL DEPOSIT OF INR 21,00,000 BY M/S. KALARIA CONSTRUCTIONS BY REDUCING THE ITA NO.257/MUM/2013 ASSESSMENT YEAR: 2006-07 4 CONSTRUCTION COST DURING THE PERIOD OF A.Y. 2005-06. AS A RESULT HIGHER INCOME WAS OFFERED IN A.Y.2005-06, HOWEVER THE APPELLANT RECTIFIED SUCH MISTAKE DURING THIS YEAR. III) RS.1,80,284/- BEING LIABILITY PAYABLE TO M/S. KALARIA CONSTRUCTION IN RESPECT OF THE ABOVE PROJECT WAS NOT LONGER PAYABLE HENCE WRITTEN OFF AND REDUCED FROM THE EXPENSES IN RESPECT OF THE SAID PROJECT. 4.1 IT IS ARGUED THAT THE CLAIMING OF EXPENSES BY R ECTIFYING THEIR ACCOUNTING MISTAKE OR ERROR ADDED IN EARLIER YEAR A CCOUNTS IS NOT THE CASE OF FURNISHING INACCURATE PARTICULARS OF HI S INCOME AND THE CONCEALMENT OF PARTICULARS OF HIS INCOME. IT IS AL SO ARGUED THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE LEADS T O THE FACTS AND CIRCUMSTANCES THAT THE ASSESSEE WAS NOT LIABLE TO B E PAY THE TAX AND WAS ELIGIBLE TO DEDUCTION U/S.80IB(10). THE GROUND TO LEVY THE PENALTY ARE THE ABOVE SAID THREE ADDITIONS VIDE WHI CH TWO HAVE BEEN DELETED AND ONE ADDITION REGARDING THE VRINDAV AN PROJECT HAS BEEN SUSTAINED. THE LEARNED CIT(A) IN THE APPEAL O F ASSESSMENT ORDER GAVE THE ABOVE MENTIONED FINDING WHICH SPEAKS ABOUT THE MISTAKE OF ASSESSEE AND GOT RECTIFIED LATERON. NO D OUBT WHEN THIS FACT HAVE ENUMERATED IN THE JUDGEMENT PASSED BY THE LEARNED CIT(A) THEN IN THE SAID CIRCUMSTANCES APPARENTLY TH E CASE OF THE APPEAL DOES NOT FALL WITHIN THE AMBIT OF CONCEALMEN T OF INCOME OR FURNISHING OF INACCURATE PARTICULAR OF HIS INCOME. IN THIS REGARD ITA NO.257/MUM/2013 ASSESSMENT YEAR: 2006-07 5 THERE ARE CATINA OF JUDGEMENTS PASSED BY THE COURTS OF LAW OUT OF WHICH SOME ARE MENTIONED BELOW I.E. T.ASHOK PAI VS. COMMISSIONER OF INCOME TAX [2007] 292 ITR 11 (SC), COMMISSIONER OF INCOME TAX VS. SOMANY EVERGREE KNIT S LTD. [2013] 352 ITR 592 (BOMBAY HIGH COURT), COMMISSIONE R OF INCOME TAX VS. SIDHARTHA ENTERPRISES [2010] 322 ITR 80 (P&H HC) AND COMMISSIONER OF INCOME TAX AND ANOTHER VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 IT R 565 (KARNATAKA HIGH COURT). IN VIEW OF THE PECULIAR FA CTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE LAW R ELIED BY THE ASSESSEE WE ARE OF THE VIEW THAT WHEN THE CASE OF T HE ASSESSEE IS IN CONNECTION WITH THE CORRECTION OF ACCOUNTS ON ACCOU NT OF MISTAKE THEN NO PENALTY IS LEVIABLE IN ACCORDANCE WITH LAW ACCORDINGLY WE SET ASIDE THE ORDER OF LEARNED CIT(A) AND DELETE TH E PENALTY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH, 2016. SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) / ACCOUNTANT MEMBER # $ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 16 TH MARCH, 2016 MP MP MP MP ITA NO.257/MUM/2013 ASSESSMENT YEAR: 2006-07 6 !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )* + $$,- , ,- , % & / DR, ITAT, MUMBAI 6. + ./ 0 / GUARD FILE. / BY ORDER, ) $ //TRUE COPY// % / & ' (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI