Nilkanth Developers, Surat V. Income Tax Officer, Ward-5(3), Surat

ITA 2610/AHD/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6930 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 23-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: S B VAIDYA
• Keywords: Business income; Income from undisclosed sources; Search and seizure; Question of law; Surrender of tenancy right; Revised return
• Section: 133A; 80IB; 56; 263; 10

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 0 0 , , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ITA NO . 2610 / AHD/ 201 4 [ [ / ASSESSMENT YEAR : 2010 - 11 M/S. NILKANTH DEVELOPERS, NILKANTH HEIGHTS, F.P. NO.11, S. NO.12, BESIDE GOKULAM APPT., OPP S K NAGAR, DUMBHAL, SURAT PAN : AABPZ 5503 A VS THE INCOME TAX OFFICER, WARD - 5 (3) SURAT / (APPELLANT) / (RESPONDENT) ASSESSEE(S) BY : SHRI S.B. VAIDYA, AR REVENUE BY : SHRI M.K. SINGH, SR. DR / DATE OF HEARING : 12 /1 1 /2014 / DATE OF PRONOUNCEMENT: 19 /1 2 /2014 / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - I , SURAT DATED 18 .0 8 .201 4 FOR THE ASSESSMENT YEAR 2010 - 11. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT (A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING DEDUCTION U/S 80IB ON INCOME OF RS.1,25,00,000/ - DISCLOSED DURING THE SURVEY BY TREATING THIS INCO ME AS INCOME FROM OTHER SOURCES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN DEVELOPMENT AND BUILDING OF HOUSING PROJECTS. A SURVEY ACTION U/S 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF ASSESSEE ON ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 2 27.08.2009. DURING THE SURVEY, STATEMENTS OF SHRI RAJIVBHAI B. KHENI PARTNER OF THE ASSESSEE FIRM WAS RECORDED ON OATH, WHEREIN HE ADMITTED TO HAVE UNACCOUNTED INCOME OF RS.1,25,00,000/ - ON THE BASIS OF ENTRIES RECORDED ON PAGE NOS. 59 & 60 FOUND DURING THE SURVEY AND OFFERED THE SAME FOR TAXATION OF THE ASSESSEE FIRM AS ADDITIONAL INCOME FOR THE YEAR. HE ALSO STATED THAT DEDUCTION U/S 80IB(10) WOULD NOT BE CLAIMED ON THIS UNACCOUNTED INCOME. BUT, THIS INCOME WAS CLAIMED BY THE ASSESSEE AS DEDUCTION U/S 8 0IB(10) IN THE RETURN OF INCOME ON THE GROUND THAT THE SAID INCOME HAS BEEN EARNED FROM THE PROJECT UNDERTAKEN BY THE ASSESSEE AND THEREFORE, IT WAS BUSINESS INCOME ENTITLED FOR DEDUCTION U/S 80IB(10) OF THE ACT. DURING THE COURSE OF ASSESSMENT, THE ASSESS EE COULD NOT GIVE DETAILS OF PERSONS SUCH AS NAMES, ADDRESSES, AMOUNTS RECEIVED, PANS, DATES OF PAYMENTS ETC. FROM WHOM THE AMOUNTS OF RS.1,25,00,000/ - WERE RECEIVED BY THE ASSESSEE AND CONSEQUENTLY, THE ASSESSING OFFICER TREATED THE SAID RECEIPTS AS INCO ME FROM OTHER SOURCES AND DISALLOWED THE CLAIM U/S 80IB(10) OF THE ACT. 4. ON APPEAL, THE CIT(A) OBSERVED THAT IT IS AN ADMITTED FACT THAT THE DISCLOSURE OF RS.1,25,00,000/ - WAS MADE BY THE ASSESSEE ON ACCOUNT OF UNDISCLOSED RECEIPTS FROM THE PROJECT AND THE EVIDENCE OF THESE UNDISCLOSED RECEIPTS WAS FOUND BY D EPARTMENT DURING THE SURVEY PROCEEDINGS U/S. 133A OF THE ACT. IT WAS ALSO ADMITTED BY THE ASSESSEE DURING SURVEY THAT THE SAID RECEIPTS ARE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE - F IRM . THE ASSESSEE HAS INCLUDED THESE UNDISCLOSED RECEIPTS IN ITS TOTAL TURNOVER AND CONSEQUENTLY TO ITS NET PROFIT AN D CLAIMED DEDUCTION U/S. 80IB(10 ) OF THE ACT. THUS, NO TAX HAS BEEN PAID BY THE ASSESSEE ON THE INCOME WHICH HE WAS FORCED TO DISCLOSE DUE TO ACTION/DETECTION BY THE D EPARTMENT DURING THE SURVEY PROCEEDINGS. THE DETAILS OF SUCH RECEIPTS SUCH AS NAMES AND ADDRESSES OF THE PERSONS FROM WHOM AMOUNTS WERE RECEIVED, THEIR PANS, ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 3 AMOUNTS, DATES ETC. WERE ALSO NOT PROVIDED BY THE ASS ESSEE SO THAT HE COULD CORRELATE THESE RECEIPTS WITH THE ACTUAL PERSONS TO HOLD THAT THESE RECEIPTS BELONG TO THE BUSINESS OF THE ASSESSEE . IN ABSENCE OF THESE DETAILS, THE ASSESSING OFFICER ASSESSED THE RECEIPTS AS INCOME FROM OTHER SOURCES . THE CIT(A) FURTHER OBSERVED THAT, IN SUCH SITUATION, WHETHER ONE SHOULD BE ALLOWED TO GET BENEFIT OF DEDUCTION U/S. 80IB( 10 ), BY NOT PAYING ANY TAX, ON THE INCOME WHICH IS NOT VOLUNTARILY DISCLOSED TO THE DEPARTMENT BY THE ASSESSEE. THE CIT(A) OPINED TH AT THE BENEFICIAL PROVISIONS OF THE ACT ARE FOR THOSE ASSESSEES WHO COMPLY THE PROVISIONS OF ACT VOLUNTARILY AND DISCLOSE THEIR INCOME AND OTHER MATERIAL FACTS TO THE DEPARTMENT IN TRUE AND CORRECT MANNER. THESE PROVISIONS ARE NOT FOR THOSE ASSESSEES WHO H IDE THEIR INCOME DELIBERATELY AND CONSCIOUSLY. IN THE CASE OF ASSESSEE , IT WAS OBLIGED TO DISCLOSE THE RECEIPTS OF RS 1,25,00,000 / - IN ITS BOOKS OF ACCOUNT TRULY AND CORRECTLY WHICH , AS ADMITTED BY THE ASSESSEE , WAS NOT DISCLOSED IN ITS REGULAR BOOKS OF AC COUNT WITH THE INTENTION OF HIDING IT TO THE D EPARTMENT. THIS SHOWS THAT THE ASSESSEE ACTED DELIBERATELY IN DEFIANCE OF PROVISIONS OF LAW AND CONDUCTED DISHONESTLY AND ACTED IN CONSCIOUS DISREGARD TO ITS OBLIGATION. A FTER CONDUCTING IN THIS MANNER, IT HAS CLAIMED THE BENEFIT OF DEDUCTION U/S. 80 IB(10) AND DID NOT PAY ANY TAX. THE ASSESSEE HAS GOT THE BENEFIT OF DEDUCTION EVEN AFTER CONCEALING THE INCOME AND NOT DISCLOSING IT VOLUNTARILY. THE ASSESSEE HAS DISCLOSED THE INCOME ONLY WHEN THE D EPARTMENT DETECTE D THE CONCEALMENT DURING SURVEY PROCEEDING AND CONFRONTED IT TO THE ASSESSEE . THE CIT(A) FURTHER OBSERVED THAT, O N THE SIMILAR FACTS, HON'BLE DELHI HIGH COURT IN THE CASE CIT VS. USHA INTERNATIONAL LTD. , HAS HELD THAT WHEN THE ASSESSEE IS CORNERED BY THE E VIDENCE OR MATERIAL COLLECTED BY THE REVENUE AUTHORITIES, EVEN BY FILING BY REVISED RETURN , THE ASSESSEE CAN GAIN NOTHING FROM IT AND HE IS LIABLE FOR PENAL PROVISIONS U/S. 271( 1 )(C) OF THE ACT. THE CIT(A) FURTHER OBSERVED THAT SIMILARLY , DIFFERENT HON'BLE COURTS, INCLUDING APEX COURT, HAVE OPINED THAT IF IT IS GATHERED BY ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 4 R EVENUE THAT THE OMISSION WAS ATTRIBUTABLE TO A INTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL THE INCOME SO AS TO AVOID THE IMPOSITION OF TAX THERE ON, PENALTY FOR CONCEALMENT IS LEVIABLE ON ASSESSEE. IN THE CASE OF THE ASSESSEE, IT IS CLAIMING NOT EVEN LIABLE TO PAID REGULAR TAXES ON THE UNDISCLOSED INCOME DETECTED BY THE D EPARTMENT WHICH IT WAS FORCED TO DISCLOSE WHEN CORNERED BY DEPARTMENTAL AUTHOR ITIES WITH THE EVIDENCE AND MATERIAL COLLECTED DURING SURVEY PROCEEDING. AS PER ADMISSION OF THE ASSESSEE , UNDISCLOSED RECEIPTS OF RS. 1, 25,00,000/ - WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT WITH THE INTENTION OF NOT DISCLOSING IT TO THE D EPARTMENT. THUS, ON ONE HAND THE APPELLANT HIDES ITS RECEIPTS AND CONDUCTS IN CONSCIOUS DISREGARD TO ITS OBLIGATION AND DEPRIVES THE EXCHEQUER WITH ITS DUE, ON THE OTHER HAND, WHEN CAUGHT, DISCLOSES THE INCOME AND CLAIMS BENEFIT U/S. 80IB(10) AND GETS SCOT FREE. THE REFORE, THE CIT(A) OPINED THAT THE INTENTION OF ACT IS NOT TO GIVE BENEFIT OF SUCH PROVISIONS TO THOSE ASSESSEES WHO DISREGARD THEIR OBLIGATION AND ACT DELIBERATELY IN DEFIANCE OF LEGAL PROVISIONS, BUT, FOR THOSE ASSESSEES WHO COMPLY THE PROVISIONS OF ACT HONESTLY AND REGARD THEIR OBLIGATIONS AND DISCLOSE THEI R TRUE AND CORRECT INCOME TO THE D EPARTMENT. FURTHER, THE CIT(A) OBSERVED THAT UNLESS THE COMPLETE DETAILS ARE AVAILABLE TO ESTABL I SH THAT THE UNACCOUNTED RECEIPTS PERTAIN TO THE ELIGIBLE PROJECT AS RE CEIVED FROM PURCHASERS OF THE PROJECT, THE SE AMOUNTS CANNOT BE TREATED AS BUSINESS RECEIPTS FROM THE ELIGIBLE PROJECT. THE SUBMISSION OF THE ASSESSEE DURING ASSESSMENT PROCEEDINGS WAS THAT IT HAS CLAIMED DEDUCTION AS PER PROVISIONS OF INCOME TAX ACT AND VA RIOUS JUDGMENTS, DOES NOT HAVE ANY FORCE IN ABSENCE OF S PECIFIC DETAILS/DOCUMENTS TO CO RRELATE THESE RECEIPTS WITH ELIGIBLE PROJECT. HE, THEREFORE, CONFIRMED THE ACTION OF THE ASSESSING OFFICER DISALLOWING DEDUCTION ON THE UNDISCLOSED RECEIPTS OF RS.1,25,00,000/ - . ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 5 5. THE AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS IN THE BUSINESS OF DEVELOPING AND BUILDING OF HOUSING PROJECT AN D SINCE THE UNDISCLOSED INCOME WAS OUT OF THE PROJECT STYLED NILKANTH HEIGHTS PROJECT WHICH WAS THE ONLY PROJECT STARTED DURING THE YEAR UNDER CONSIDERATION, THE ADDITIONAL INCOME DISCLOSED BY THE ASSESSEE PERTAINED TO THE SAID PROJECT AND THEREFORE, WAS ALLOWABLE DEDUCTION TO THE ASSESSEE. DURING THE COURSE OF SURVEY, IN THE STATEMENT OF THE PARTNERS OF THE ASSESSEE - FIRM, THE SAME FACT WAS ALSO STATED. IF THE ASSESSING OFFICER ACCEPTS THE ADDITIONAL INCOME ON THE BASIS OF SUCH STATEMENT OF PARTNERS OF T HE ASSESSEE - FIRM DURING THE SURVEY, THEN HE CANNOT RELY ON PART OF THE STATEMENT AND NOT RELY UPON OTHER PART OF THE STATEMENT. HE RELIED ON THE FOLLOWING DECISIONS: - (1) CIT VS. MHASKAR GENERAL HOSPITAL (GUJ), IN TAX APPEAL NO.1474 OF 2009, ORDER DATED 09.08.2011, WHEREIN WHILE DECIDING QUESTION NO.(B), THE HONBLE GUJARAT HIGH COURT HELD AS UNDER: - WITH RESPECT TO SECOND QUESTION, WE MAY NOTICE THAT THE ASSESSEE'S STAND IS THAT ITS SOLE BUSINESS WAS THAT OF RUNNING A HOSPITAL. IT HAD NO OTHER SOURCE O F INCOME AND THAT THEREFORE, TREATING SUCH UNDISCLOSED INCOME FROM OTHER SOURCE WAS NOT JUSTIFIED. IN THE CASE OF DEPUTY CIT V. RADHE DEVELOPERS INDIA LTD., (2010) 329 ITR 1(GUJ.), THIS COURT WHILE DISTINGUISHING THE DECISION IN THE CASE OF FAKIR MOHMED HAJI HASAN (SUPRA), OBSERVED AS UNDER: THE DECISIONS OF THIS COURT IN THE CASE OF FAKIR MOHMED HAJI HASAN (SUPRA) AND KRISHNA TEXTILES (SUPRA) ARE NEITHER RELEVANT NOR GERMANE TO THE ISSUE CONSIDERING THE FACT THAT IN NONE OF THE DECISIONS THE LEGISLATIVE SCHEME EMANATING FROM CONJOINT READING OF PROVISIONS OF SECTIONS 14 & 56 OF THE ACT HAVE BEEN CONSIDERED. THE APEX COURT IN THE CASE OF D.P.SANDU BROS. CHEMBUR P. LTD.,(SUPRA) HAS DEALT WITH THIS VERY ISSUE WHILE DECIDING THE TREATMENT TO BE GI VEN TO A TRANSACTION OF SURRENDER OF TENANCY RIGHT. THE EARLIER DECISIONS OF THE APEX COURT COMMENCING FROM CASE OF UNITED COMMERCIAL BANK LTD.VS. CIT (1957) 32 ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 6 ITR 688 (SC) HAVE BEEN CONSIDERED BY THE APEX COURT AND, HENCE, IT IS NOT NECESSARY TO REPEAT T HE SAME. SUFFICE IT TO STATE THAT THE ACT DOES NOT ENVISAGE TAXING ANY INCOME UNDER ANY HEAD NOT SPECIFIED IN SECTION 14 OF THE ACT. IN THE CIRCUMSTANCES, THERE IS NO QUESTION OF TRYING TO READ ANY CONFLICT IN THE TWO JUDGMENTS OF THIS COURT AS SUBMITTED B Y THE LEARNED COUNSEL FOR THE REVENUE. IN ANY CASE, WE ARE CONVINCED THAT THE TRIBUNAL WAS CORRECT IN HOLDING THAT EVEN IF TWO VIEWS ARE POSSIBLE, POWERS UNDER SECTION 263 OF THE ACT COULD NOT AND OUGHT NOT TO HAVE BEEN EXERCISED. THE APEX COURT IN THE CA SE OF MALABAR INDUSTRIAL CO. LTD. OBSERVED AS UNDER: THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF ASSE SSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN INCOME - TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME - TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME - TAX OFFICER IS UNSUSTAINABLE IN LAW. IT HAS BEEN HELD BY THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HANDS ON HIS SO OFFERING, THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME AS SUCH WILL BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. RAMPYARI DEVI SARA OGI V. COMMISSIONER OF INCOME - TAX, (1968) 67 ITR 84 (SC) AND IN SMT. TARA DEVI AGGARWAL V. COMMISSIONER OF INCOME - TAX, WEST BENGAL, 88 ITR 323. IN THE CASE OF S.K.SRIGIRI AND BROS. (SUPRA), THE KARNATAKA HIGH COURT HELD AS UNDER: WE HAVE PERUSED THE ORDE RS OF THE TRIBUNAL. THE TRIBUNAL HAS CAREFULLY CONSIDERED THE QUESTIONS PUT BY THE AUTHORITY AND THE ANSWER OF THE PARTNERS OF THE ASSESSEE'S FIRM AND BASED ON THE SAME, THE TRIBUNAL HAS COME TO THE CONCLUSION THAT THE ADDITIONAL INCOME RECEIVED BY THE ASS ESSEE IN THE INSTANT CASE IS FROM BUSINESS AND NOT FROM OTHER SOURCES. IF THE TRIBUNAL HAS COME TO THE CONCLUSION THAT THE ADDITIONAL INCOME IS FROM BUSINESS, ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 7 THE REMUNERATION PAID TO THE PARTNERS HAS TO BE DEDUCTED WHILE CONSIDERING THE PROFIT AND LOSS. I N THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT ON FACTS THE REVENUE HAS NO CASE ON THE MERITS. SO FAR AS THE QUESTION OF LAW IS CONCERNED, WE HAVE TO ANSWER THE SAME IN FAVOUR OF THE REVENUE. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY QUESTION O F LAW ARISES. TAX APPEAL IS THEREFORE, DISMISSED. (2) CIT VS. SUMAN PAPER & BOARDS LTD, REPORTED IN (2009) 314 ITR 119 (GUJ.), WHEREIN THE HONBLE GUJARAT HIGH COURT HELD AS UNDER: - THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80 - 1 / 80 - IA OF THE INCOME - TAX ACT, 1961,IN RESPECT OF THE TOTAL UNDISCLOSED INCOME FOR THE BLOCK PERIOD COMMENCING FROM 1986 - 87 TO JANUARY 6, 1996. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE, THE TRIBUNAL ON AN INTERPRETATION OF THE PROVISIONS OF SECTIONS 158BB (1) , 158BB(4) AND 158BH AS APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 80 - I OR SECTION 80 - IA IN RESPECT OF THE UNDISCLOSED INCOME ASSESSED BY THE ASSESSING OFFICER UNDER THE BLOCK PE RIOD SINCE THE UNDISCLOSED INCOME DECLARED IN FORM NO. 2B WAS UNDER THE HEAD 'BUSINESS INCOME' FROM INDUSTRIAL UNDERTAKING AS THE ONLY ACTIVITY OF THE ASSESSEE WAS THAT OF MANUFACTURE AND SALE OF BOARD PAPER AND CRAFT PAPER WHICH HAD BEEN ALL ALONG ASSESSE D AS BUSINESS INCOME AND IN ALL THE ASSESSMENT YEARS FALLING WITHIN THE BLOCK PERIODS. ON A REFERENCE CONTENDING THE TRIBUNAL WAS REQUIRED TO CONSIDER THE AMENDED PROVISIONS AND DECIDE ABOUT AVAILABILITY OF RELIEF UNDER SECTION 80 - I OR SECTION 80 - IA OF THE ACT AFTER DETERMINING (I) WHETHER THE ENTIRE UNDISCLOSED INCOME IS RELATAB LE TO THE INDUSTRIAL UNDERTAKING ; AND (II) THE REQUIREMENTS OF FILING THE AUDIT REPORT, WHICH MAY BE EVEN DURING THE COURSE OF THE APPELLATE PROCEEDINGS.: HELD, THAT IN SO FAR AS TH E FIRST CONTENTION WAS CONCERNED, IT WAS NOT RAISED BEFORE THE TRIBUNAL AND, HENCE, IT WAS NOT NECESSARY TO ISSUE ANY DIRECTIONS AT THIS STAGE TO THE TRIBUNAL, LEAVING IT OPEN TO THE REVENUE TO RAISE THE ISSUE AT THE TIME WHEN THE TRIBUNAL ADJUSTS ITS DECI SION IN ACCORDANCE WITH THE JUDGMENT OF THIS COURT. SIMILARLY, IN RELATION TO THE FILING OF AUDIT REPORT, THE TRIBUNAL HAS ALREADY DEALT WITH THE ASPECT OF THE MATTER. HOWEVER, IT ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 8 WILL BE OPEN TO THE REVENUE TO SEEK PROCEDURAL COMPLIANCE WITH THE PROVISION S OF SECTION 80 - I (7) OF THE ACT BY MOVING THE TRIBUNAL IN THIS REGARD WHEN THE TRIBUNAL ADJUSTS ITS DECISION IN ACCORDANCE WITH THE JUDGMENT OF THIS COURT, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S 80 - I OR SECTION 80 - IA OF THE ACT. (3) ORDER OF AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V. M/S. VIRAT GEMS, ORDER DATED 19.11.2010 PASSED IN ITA NOS.3541 & 3756/AHD/2008 FOR AY 2005 - 06, WHEREIN THE TRIBUNAL HAS HELD AS UNDER: - WE FIND THAT THE ASSESSEE - FIRM WAS ENGAGED IN THE BUSINESS OF DIAMONDS AND ACCORDINGLY IT HAD NO OTHER SOURCE OF INCOME AND AS PER THE DISCLOSURE MADE DURING THE COURSE OF SURVEY IT HAD DISCLOSED AMOUNT OF RS.70 LACS AS INCOME DISCLOSED U/S 133A OF THE ACT UNDER THE HEAD INCOME FROM OPE RATIONS IN ITS PROFIT AND LOSS ACCOUNT, WHATEVER WAS FOUND AT THE TIME OF SURVEY IS IN THE NATURE OF BUSINESS INCOME WHICH WAS NOT DISCLOSED BY THE ASSESSEE BEFORE THE SURVEY. THE ASSESSEE CLAIMED THAT THE ADDITIONAL INCOME WAS DISCLOSED THE ADDITIONAL IN COME WAS DISCLOSED WHICH HAS DIRECT NEXUS WITH THE BUSINESS OF THE ASSESSEE AND FURTHER CONTENDED THAT THE WORDS BOOK PROFIT DEFINED IN SECTION 40(B) OF THE ACT MEANS NET PROFIT AS SHOWN IN PROFIT AND LOSS ACCOUNT COMPUTED IN THE MANNER LAID DOWN IN CHAP TER IV - D. THE ASSESSEE - FIRM INCLUDED THE INCOME DISCLOSED U/S 133A IN ITS PROFIT AND LOSS ACCOUNT UNDER THE YEAR CONSIDERATION AND BOOK PROFIT COMPUTED IN THE MANNER LAID DOWN IN CHAPTER IV - D. WE FIND THAT THE SUBJECT INCOME FORMS PART OF BOOK PROFIT AND ASSESSEE - FIRM IS NOT CARRYING ON ANY OTHER BUSINESS AND HAS NO OTHER SOURCE OF INCOME AND WHATEVER INCOME ARISING TO THE ASSESSEE - FIRM IS BUSINESS INCOME AND HENCE, COMPUTATION IS IN ACCORDANCE WITH CHAPTER - IV_D. EVEN OTHERWISE, THIS ISSUE IS COVERED BY TH E DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ACIT V. PRABHUDAS PAREKH CASE NO.18759/2001 DECIDED ON 27.06.2001 HAS DISMISSED THE APPEAL OF THE REVENUE FILED AGAINST THE ORDER OF THE TRIBUNAL AND IN THIS CASE THE TRIBUNAL IN ITA NO.2408/AH D/1993 VIDE ORDER DATED 19.12.1999 WHILE DISMISSING THE APPEAL OF THE REVENUE HELD AS FOLLOWS: - . THEREFORE, AS LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF MENTIONED ABOVE, THE PRACTICAL NOTING MUST ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 9 BE APPLIED TO FIND OUT THE HEAD OF INCOME. THE HEAD OF INCOME HAS TO BE DETERMINED FROM THE NATURE OF THE BUSINESS THE ASSESSEE WAS CARRYING ON AT THE TIME OF SEARCH. IN THIS PARTICULAR CASE, THE ASSESSEE WAS NOT CARRYING ON ANY OTHER ACTIVITY FOR EARNING THE INCOME. THEREFORE, THE INCOME DISCLOSED BY THE ASSESSEE U/S 132(4) HAS TO BE ASSESSEE UNDER BUSINESS INCOME FROM THE COMMON NOTION OF A PRACTICAL MAN. THE HEAD INCOME FROM OTHER SOURCES IS A RESIDUAL HEAD AND THE INCOME HAS TO BE ASSED UNDER THAT HEAD ONLY IF THE SAME IS NOT COVERED UNDER ANY OT HER HEAD. FROM THE ABOVE FACTS AND PROPOSITION LAID DOWN BY HONBLE JURISDICTIONAL HIGH COURT, WE HOLD THAT THE INCOME DISCLOSED BY THE ASSESSEE - FIRM DURING THE COURSE OF SEARCH WAS BUSINESS INCOME AND THE ASSESSEE IS ELIGIBLE FOR DEDUCTION OF REMUNERATION AND INTEREST PAID TO PARTNERS IN TERMS OF SEC TION 40(B) OF THE ACT. (4) ORDER OF AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF CIT V. M/S. SHREE PADMAVATI DEVELOPERS, ORDER DATED 21.09.2012, PASSED IN ITA NO.268/AHD/2010 FOR AY 2007 - 08, WHEREIN THE TRIBUNAL HAS HELD AS UNDER : 7. WE HAVE HEARD BO TH THE SIDES. WE HAVE ALSO PERUSED THE IMPUGNED STATEMENT OF MR.MAHENDRA KATARIA RECORDED ON 27/28.12.2006. IN REPLY TO A QUESTION, IT WAS CATEGORICALLY STATED, QUOTE (I)RS.50,000/ - SALES PROCEEDS OF FLAT NOT RECORDED IN BOOKS. UNQUOTE. CONSEQUENT THERE UPON, THE SAID AM OUNT OF RS.50 LACS WAS DULY DISCLOSED IN THE PROFIT & LOSS ACCOUNT DRAWN ON 31.3.2007. IN THE CASE OF THE CIT VS. SUMAN PAPER AND BOARD LTD. [2009]314 ITR 119 (GUJ.) AN OBSERVATION HAS BEEN MADE THAT MANUFACTURING AND SALE OF BOARD PAPER AND CRAFT PAPER HAPPENED TO BE THE ONLY SOURCE OF INCOME OF THE ASSESSEE, THEREFORE THE AMOUNT DISCLOSED CONSEQUENCE UPON THE SEARCH PARTAKES THE CHARACTER OF BUSINESS INCOME AND ELIGIBLE FOR THE DEDUCTION U/S.80IB/80IA OF THE I.T. ACT. IN THE PRESENT CASE , THE ASSESSEE HAS ADMITTED THAT THE IMPUGNED AMOUNT WAS PART OF THE SALE CONSIDERATION RECEIVED IN CASH AT THE TIME OF BOOKING OF FLATS AND, THEREFORE, THE AMOUNT HAD DIRECT AND PROXIMATE CONNECTION WITH THE NORMAL BUSINESS OF CONSTRUCTION ACTIVITY, HENCE ELIGIBLE FOR THE DEDUCTION U/S.80IB(10) OF THE I.T. ACT. BECAUSE OF THE FACTUAL AS ALSO LEGAL ASPECT OF THE CASE, WE HEREBY CONFIRM THE FINDING OF LEARNED CIT(APPEALS) AND DISMISS THIS G ROUND OF THE REVENUE. ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 10 (5) ORDER OF RAJKOT BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V. PRABHUDAS S. PAREKH, ORDER DATED 15.12.1999, PASSED IN ITA NO.1408/AHD/1993 IN AY 1991 - 92, WHEREIN THE TRIBUNAL HAS HELD AS UNDER: - 4. W E HAVE HEARD BOTH THE PARTIES. THE RESPONDENT IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF MANUF ACTURE, SALE AND EXPORT OF GOLD/SILVER ARTICLES. SEARCH AND SEIZURE OPERATION UNDER SEC.132 OF THE I.T. ACT TOBK PLACE AT THE BUSINESS PREMISES OF THE RESPONDENT ON 24/25 - 8 - 1990 AND 4 - 9 - 1990. DURING THE COURSE OF SEARCH, THE RESPONDENT HAD IN HIS STATEM ENTS RECORDED UNDER SEC.132(4) OF THE ACT ON 25 - 8 - 1990 AND 4 - 9 - 1990 CONFESSED UNRECORDED BUSINESS INCOME OF RS.8 , 50,000 UNDER EXPLANATION 5 TO SEC. 271(1) (C) READ WITH SEC.132(4) OF THE ACT AND OFFERED THE SAME FOR TAXATION. THE MAIN ISSUE BEFORE US FOR D ECISION IS WHETHER THE INCOME OF RS.8,50,000/ - DISCLOSED BY THE RESPONDENT UNDER SEC. 132(4) OF THE ACT IS INCOME FROM BUSINESS OR THE SAME IS TO BE TREATED AS INCOME FROM OTHER SOURCES. SEC.14 OF THE ACT DEFINES VARIOUS HEADS OF INCOME AND ALL THE HEADS ARE MUTUALLY EXCLUSIVE. INCOME EARNED FROM BUSINESS CANNOT IPSO FACTO BE TAKEN AS INCOME FROM SOME OTHER SOURCE. DURING THE COURSE OF SEARCH, THE ASSE S SEE EXPLAINED IN HIS STATEMENT RECORDED UNDER SEC.132(4) THAT THE UNDISCLOSED INCOME WAS FROM BUSINESS BECAUSE HIS ONLY SOURCE OF INCOME IS BUSINESS IN SALE AND EXPORT OF GOLD AND SILVER ORNAMENTS. THIS STATEMENT HAS BEEN ACCEPTED BY THE DEPARTMENT. THEREFORE, THE DEPARTMENT CANNOT TAKE A DIFFERENT VIEW DURING THE COURSE OF REGULAR ASSESSMENT THAT THE INC OME INVESTED IN JEWELLERY WAS INCOME OF THE ASSESSEE FROM OTHER SOURCES. DURING THE COURSE OF SEARCH THE DEPARTMENT COULD NOT FIN D OUT ANY EVIDENCE TO REBUT THE STATEMENT OF THE ASSESSEE THAT THE INCOME EARNED WAS FROM BUSINESS. THE CONTENTION OF THE LEARNED DEPART MENT AL REPRESENTATIVE THAT THE INCOME ASSESSED UNDER SEC. 69B OF THE ACT HAS TO BE TREATED AS INCOME OF THE ASSESSEE FROM OTHER SOURCES, IS WITHOUT ANY LEGAL BASIS. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT SUPPORT HIS CONTE NTION S WIT H ANY LEGAL PROVISION IN THE INCOME - TAX ACT. 5. IN THE CASE OF EAST INDIA HOUSING & LAND DEVELOPMENT TRUST LTD. V. CIT (1961) 42 ITR 49 ( S C), THE APEX COURT LAID DOWN THAT 'IF THE INCOME FROM A SOURCE FALLS WITHIN A SPECIFIED HEAD SET OUT IN SECTION 14, THE FACT THAT IT MAY IND IREC T LY BE COVERED BY ANOTHER HEAD WILL NOT MAKE THE INCOME TAXABLE UNDER THE LATTER HEAD.' IN THE CASE OF ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 11 NALINIKANT AMBALAL MODY V. S.A. L. NARAYAN ROW, CIT (1966) 61 ITR 428 (SC), THE APEX COURT HELD THAT THE HEADS OF INCOME MU ST BE DECIDED FROM THE NATURE OF THE INCOME BY. THE ASSESSEE IS DEALING IN JEWELLERY. THEREFORE, AS LAID DOWN BY HONOURABLE SUPREME COURT IN THE CASES MENTIONED ABOVE, THE PRACTICAL NOTION MUST BE APPLIED TO FIND OUT THE HEAD OF I NCOME. THE HEAD OF INCOME HAS TO BE DETERMINED FROM THE NATURE OF THE BUSINESS THE ASSESSEE WAS CARRYING ON AT THE TIME OF SEARCH. IN THIS PARTICULAR CASE, THE ASSESSEE WAS NOT CARRYING ON ANY OTHER ACTIVITY FOR EARNING THE INCOME. THEREFORE, THE INCOME DISCLOSED BY THE ASSESSEE U NDER SEC.132(4) HAS TO BE ASSESSED UNDER BUSINESS INCOME F ROM THE COMMON NOTION OF A PRACTICAL MAN. THE HEAD INCOME FROM OTHER SOURCES' IS A RESIDUAL HEAD AND THE INCOME HAS TO BE ASSESSED UNDER THAT HEAD ONLY IF THE SAME IS NOT COVERED UNDER ANY OTHER HE AD. IN THE PRESENT CASE, AS IS ADMITTED BY THE ASSESSEE UNDER SEC.132(4) AND ACCEPTED BY THE DEPARTMENT, THE INCOME HAS TO BE ASSESSED AS INCOME FROM BUSINESS AND THE QUESTION OF ASSESSING THIS INCOME UNDER 'OTHER SOURCES' DOES NOT ARISE. 7. UNDER THE CI RCUMSTANCES AND IN VIEW OF THE LEGAL POSITION, DISCUSSED ABOVE, THE DEPARTMENT'S CASE FAILS AND WE /Q ARE OF THE CONSIDERED OPINION THAT THE INCOME HAS BEEN CORRECTLY TREATED BY THE LEARNED COMMISSIONER (APPEALS) AS INCOME FROM BUSINESS AND HIS FINDINGS DO NOT REQUIRE ANY INTERFERENCE FROM OUR SIDE . HE FURTHER SUBMITTED THAT THIS ORDER OF THE TRIBUNAL DATED 15.12.1999 WAS CONFIRMED BY THE HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO.169 OF 2001 VIDE ORDER DATED 27.06.2001, WHICH IS PLACED ON RECORD. 6 . ON THE OTHER HAND, THE DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, WE FIND THAT THE ASSESSING OFFICER OBS ERVED IN RESPECT OF ACTIVITIES OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AS FOLLOWS: - ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 12 3. THE ASSESSEE IS A PARTNERSHIP FIRM, ENGAGED IN THE ACTIVITY OF DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY. THE ASSESSEE - FIRM COMMENCED ITS RESIDENTIAL PROJECT IN FY 2009 - 10 CALLED NILKANTH HEIGHTS, BLOCK A, B & C AT DUMBHAL, SURAT. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS NOT COMPLETED THE SAID PROJECT BUT B OOKED RECEIPT FROM SALE OF FLATS DURING THE YEAR FOR WHICH S ALE DOCUMENTS HAVE BEEN EXECUTED AND SHOWN NET PROFIT AT RS.78,870/ - AFTER CLAIMING DEDUCTION 80IB OF THE ACT. 8 . A SURVEY OPERATION U/S 133A OF THE ACT WAS CONDUCTED ON 27.08.2009. DURING THE COURSE OF SURVEY, LOOSE DOCUMENTS MARKED AS BF - 44 WAS FOUND. DURING THE COURSE OF SURVEY, THE ASSESSEE EXPLAINED THAT IN THE FILE THERE ARE EXPENSE VOUCHERS ALONGWITH RECEIPTS OF AMOUNTS RECEIVED WHICH IS ALREADY RECORDED IN THE BOOKS OF ACCOUNTS. BESIDES, THE AMO UNTS RECORDED IN PAGE NOS.59 - 60, WERE NOT ACCOUNTED IN THE BOOKS OF ACCOUNTS WHICH REPRESENTS INCOME BESIDES REGULAR INCOME OF THE BUSINESS. IN THESE FACTS, THE ASSESSEE DISCLOSED ADDITIONAL INCOME OF THE BUSINESS AT RS.1,25,00,000/ - IN ADDITION TO THE INC OME ALREADY RECORDED IN THE BOOKS OF ACCOUNTS. 9 . DURING THE COURSE OF SURVEY, THE ASSESSEE FURTHER STATED THAT IT WOULD NOT CLAIM DEDUCTION U/S 80IB(10) IN RESPECT OF THE SAID ADDITIONAL INCOME. HOWEVER, IN THE RETURN OF INCOME FILED BY THE ASSESSEE, TH E ASSESSEE CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF THE SAID ADDITIONAL INCOME OF RS.1,25,00,000/ - ALSO. THE ASSESSING OFFICER DID NOT ALLOW DEDUCTION U/S 80IB(10) IN RESPECT OF THIS ADDITIONAL INCOME OF RS.1,25,00,000/ - ON THE GROUND THAT THE ASSESSEE COULD NOT GIVE DETAILS OF THE RECEIPTS OF RS.1,25,00,000/ - AND COULD NOT GIVE EVIDENCE TO SHOW THAT THE SAME WAS IN RESPECT OF BUSINESS OF THE ASSESSEE. 1 0 . ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. HE OBSERVED THAT THE ASSESSEE, DURING THE SURVEY, ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 13 ADMITTED UNRECORDED RECEIPTS IN THE REGULAR BOOKS OF ACCOUNTS. HAD THE DEPARTMENT NOT CONDUCTED SURVEY U/S 133A AT THE BUSINESS P REMISES OF THE ASSESSEE - FIRM AND DETECTED THE UNDISCLOSED INCOME, THE ASSESSEE WOULD NOT HAVE DISCLOSED THESE RECEIPTS TO THE DEPARTMENT. THE ASSESSEE HAS INCLUDED THESE UNDISCLOSED RECEIPTS IN THE TOTAL TURNOVER AND CONSEQUENTLY IN ITS NET PROFIT AND CLAI MED DEDUCTION U/S 80IB(10) OF THE ACT. THUS, NO TAX HAS BEEN PAID BY THE ASSESSEE ON THE INCOME WHICH HE WAS FORCED TO DISCLOSE DUE TO THE ACTION/DETECTION BY THE DEPARTMENT DURING THE SURVEY PROCEEDINGS. ACCORDING TO THE CIT(A), THE INTENTION OF THE LEG ISLATURE IS TO GIVE INCENTIVE TO HONEST ASSESSEES TO COMPLY WITH THE PROVISIONS OF THE ACT AND DISCLOSE THE TRUE AND CORRECT INCOME VOLUNTARILY AND NOT TO DEFAULTERS/ EVADERS OF I NCOME - TAX. THEREFORE, THE ASSESSEE HAS WRONGLY CLAIMED THE BENEFIT OF DEDUCTIO N U/S 80IB(10) OF THE ACT. HE, THEREFORE, HELD THAT THE ASSESSING OFFICER HAS CORRECTLY ASSESSED THE ADDITIONAL INCOME OF RS.1,25,00,000/ - DISCLOSED BY THE ASSESSEE DURING THE COURSE OF SURVEY AS INCOME FROM OTHER SOURCES. 1 1 . BEFORE US, THE AR OF THE AS SESSEE CLAIMED THAT DETAILS OF RS.1,25,00,000/ - WAS NOTED IN THE LOOSE PAPER FOUND DURING THE COURSE OF SURVEY AND THE SAME WAS TREATED AS INCOME OF THE ASSESSEE ONLY ON THE BASIS OF THE SAID DOCUMENT. DURING THE COURSE OF SURVEY, THE ASSESSEE EXPLAINED T HAT THE SAME REPRESENTS AN ADDITIONAL INCOME OF THE BUSINESS OF THE ASSESSEE WHICH WAS ACCEPTED BY THE SURVEY OFFICIALS. AS THE ASSESSEES BUSINESS WAS SOLELY OF NILKANTH HEIGHTS, BLOCK A, B & C AT DUMBHAL, SURAT PROJECT, IT WAS NOT OPEN TO THE DEPARTMENT TO NOT ALLOW STATUTORILY ALLOWABLE DEDUCTION AFTER ACCEPTING THE SAME AS ADDITIONAL INCOME OF THE SAID BUSINESS. T HE AR OF THE ASSESSEE HAS RELIED UPON FOLLOWING DECISION S: - ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 14 (I) ORDER OF HONBLE GUJARAT HIGH COU RT IN THE CASE OF CIT VS. MHASKAR GENERAL HOSPITAL (GUJ), IN TAX APPEAL NO.1474 OF 2009, ORDER DATED 09.08.2011; (II) CIT V. SUMAN PAPER & BOARDS LTD., (2009) 314 ITR 119 ; (II I ) ITAT, AHMEDABAD BENCH ORDER DATED 19.11.2010 IN THE CASE OF ACIT V. M/S. VIRAT GEMS PASSED IN ITA NOS.3541 & 3756/AHD/2008. (I V ) ITAT, AHMEDABAD BENCH ORDER DATED 21.09.2012 IN THE CASE OF CIT V. M/S. SHREE PADMAVATI DEVELOPERS PASSED IN ITA NO.268/AHD/2010. (V) ITAT, RAJKOT BENCH ORDER DATED 15.12.1999 IN THE CASE OF ACIT V. PRAB HUDAS S. PAREKH PASSED IN ITA NO.1408/AHD/1993. 1 2 . WE FIND THAT THIS BENCH OF THE TRIBUNAL IN THE CASE OF CIT V. M/S. SHREE PADMAVATI DEVELOPERS (SUPRA) HAS HELD AS UNDER: - 7. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO PERUSED THE IMPUGNED STATEMENT OF MR.MAHENDRA KATARIA RECORDED ON 27/28.12.2006. IN REPLY TO A QUESTION, IT WAS CATEGORICALLY STATED, QUOTE (I)RS.50,000/ - SALES PROCEEDS OF FLAT NOT RECORDED IN BOOKS. UNQUOTE . CONSEQUENT THEREUPON, THE SAID AM OUNT OF RS.50 LACS WAS DULY DISCLOSED IN THE PROFIT & LOSS ACCOUNT DRAWN ON 31.3.2007. IN THE CASE OF THE CIT VS. SUMAN PAPER AND BOARD LTD. [2009]314 ITR 119 (GUJ.) AN OBSERVATION HAS BEEN MADE THAT MANUFACTURING AND SALE OF BOARD PAPER AND CRAFT PAPER HAPPENED TO BE THE ONLY SOURCE OF INCOME OF THE ASSESSEE, THEREFORE THE AMOUNT DISCLOSED CONSEQUENCE UPON THE SEARCH PARTAKES THE CHARACTER OF BUSINESS INCOME AND ELIGIBLE FOR THE DEDUCTION U/S.80IB/80IA OF THE I.T. ACT. IN T HE PRESENT CASE, THE ASSESSEE HAS ADMITTED THAT THE IMPUGNED AMOUNT WAS PART OF THE SALE CONSIDERATION RECEIVED IN CASH AT THE TIME OF BOOKING OF FLATS AND, THEREFORE, THE AMOUNT HAD DIRECT AND PROXIMATE CONNECTION WITH THE NORMAL BUSINESS OF CONSTRUCTION ACTIVITY, HENCE ELIGIBLE FOR THE DEDUCTION U/S.80IB(10) OF THE I.T. ACT. BECAUSE OF THE FACTUAL AS ALSO LEGAL ASPECT OF THE CASE, WE HEREBY CONFIRM THE FINDING OF LEARNED ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 15 CIT(APPEALS) AND DISMISS THIS G ROUND OF THE REVENUE. 13. IN THE INSTANT CASE, WE F IND THAT IT IS NOT IN DISPUTE THAT THE ONLY BUSINESS OF THE ASSESSEE WAS OF DEVELOPING AND BUILDING OF HOUSING PROJECT STYLED NILKANTH HEIGHTS PROJECT. NO MATERIAL HAS BEEN BROUGHT BEFORE US TO SHOW THAT THE ASSESSEE WAS ENGAGED IN ANY OTHER ACTIVITY. FU RTHER, DURING THE COURSE OF SURVEY, THE ASSESSEE HAS CATEGORICALLY STATED THAT THE AMOUNTS MENTIONED IN LOOSE DOCUMENTS MARKED AS BF - 44 REPRESENTS ADDITIONAL INCOME OF THE SAID BUSINESS. ONLY ON THE BASIS OF THIS DECLARATION OF THE ASSESSEE , THE INCOME OF THE ASSESSEE OF RS.1,25,00,000/ - WAS ACCEPTED BY THE SURVEY OFFICIALS IN THE HANDS OF THE ASSESSEE AND WAS ASSESSED IN THE HANDS OF THE ASSESSEE. FURTHER, WE FIND THAT AS PER PROVISIONS OF SECTION 80IB, DEDUCTION IS ALLOWABLE IN RESPECT OF INCOME DERIVED FROM THE ELIGIBLE HOUSING PROJECT. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE BUSINESS OF THE ASSESSEE OF DEVELOPING AND BUILDING RESIDENTIAL PROJECT IN THE NAME AND STYLE OF NILKANTH HEIGHTS PROJECT WAS ELIGIBLE HOUSING PROJECT U/ S 80IB OF THE ACT. THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, STATUTORILY ALLOWABLE DEDUCTION TO THE ASSESSEE CANNOT BE DENIED. WE, THEREFORE, ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE CO URT ON F R I D A Y , THE 1 9 T H OF DECEMBER , 2014 AT AHMEDABAD. SD/ - SD/ - (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 1 9 /1 2 /2014 BIJU T., PS ITA NO. 2610/AHD/2014 NILKANTH DEVELOPERS, SURAT FOR AY 2010 - 11 16 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - I, SURAT 5. , , / DR, ITAT, AHMEDABAD 6. [ / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD