M/s. Surana Mutha Bhansali Developers, Pune V. Assistant Commissioner of Income-tax, Circle - 11(2), Pune

ITA 2825/PUN/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1723 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-07-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LD CITA ON IN RELATION TO A Y
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Business income; Revised return
• Section: 133A; 133(6); 131; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH , A PUNE VIRTUAL COURT BEFORE SH RI R.S. SYAL, VICE PRESIDENT AND SH RI S.S. VISWANETHRA RAVI , J UDICIAL MEMBER . / ITA NO. 2825 / PUN /201 7 / ASSESSMENT YEAR : 2010 - 11 M/S. SURANA MUTHA BHASALI DEVELOPERS 236, PATIL PLAZA, NR. SARAS BAUG, PUNE - 411009 PAN: A BGFS1894K VS. ACIT, CIRCLE 11(2) , PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 19 . 05 .201 7 IN RELATION TO THE A.Y. 2010 - 11 . 2. THE ONLY ISSUE RAISED HEREIN IS AGAINST THE DENIAL OF DEDUCTION U/S 80IB(10) OF THE INC OME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON CERTAIN ON - MONEY RECEIVED BY THE ASSESSEE WHICH WAS ALSO DECLARED AS INCOME . 3. BRIEFLY STATED, THE FACTUAL MATRIX OF THE CASE IS THAT THE ASSESSEE IS A BUILDER, PROMOTER AND DEVELOPER. A SURVEY WAS ASSESSEE BY SHRI VARDHAMAN JAIN REVENUE BY SHRI VITTHAL BHOSALE DATE OF HEARING 01 - 0 7 - 2021 DATE OF PRO NOUNCEMENT 02 - 0 7 - 2021 ITA NO. 2825 /PUN/201 7 M/S. SURANA MUTHA BHANSALI DEVELOPERS 2 CONDUCTED ON 04.02.2010, D URING WHICH IT TRANSPIRED THAT IT RECEIVED ON - MONEY AMOUNTING TO RS.5.57 CRORES ON FLAT BOOKINGS IN SRI SHANTISAGAR PROJECT , WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT . SUCH A SUM WAS OFFERED FOR TAXATION AND THE RETURN W AS ACCORDINGLY FILED DECLARING TOTAL INCOME AT RS.5,30,50,000 INCLUD ING THE AMOUNT SURR E NDE RE D AT RS.5.57 CRORES. LATER ON , THE ASSESSEE FILED A REVISED RETURN ON 31.03.2012 DECLARING TOTAL INCOME AT RS.2,79,640 BY CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT AMOUNTING TO RS.5,27,70,356 WHICH WAS NOT CLAIMED IN THE ORIGINAL RETURN OF INCOME . THE AO CALLED UPON THE ASSESSEE TO SUBMIT DETAILS OF RS.5.57 CRORES WITH NAME AND ADDRESS OF THE PERSONS WHO ALLEGEDLY GAVE ON - MONEY ALONG WITH THEIR ADDRESS ETC. THE ASSESSEE COMPLIED WITH THE SAME AND FURNISHED A LIST OF SUCH 42 PERSONS . THEREAFTER, THE AO REQUIRED THE ASSESSEE TO PRODUCE THE PERSONS, FOR WHICH THE ASSESSEE EXPRESSED ITS INABILITY. THE AO ISSUED NOTICES U/S 133(6) OF THE ACT AND ALSO RECORDED STATEME NT OF 12 PERSONS U/S 131 OF THE ACT , ALL OF WHOM DENIED HAVING GIVEN ANY ON - MONEY TO THE ASSESSEE. IN VIEW OF THESE FACTS, THE AO CAME TO THE ITA NO. 2825 /PUN/201 7 M/S. SURANA MUTHA BHANSALI DEVELOPERS 3 CONCLUSION THAT THE ASSESSEE COULD NOT PROVE THAT THE SUM OF RS.5.57 CRORES WAS RECEIVED AS ON - MONEY ON FLAT BOOK INGS AND HENCE SUCH AN AMOUNT WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. THE LD. CIT(A) ECHOED THE ASSESSMENT ORDER , AGAINST WHICH THE ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL . 4 . WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AN D GONE THROUGH THE RELEVANT MATERIAL ON RECORD . THE AO HAS DENIED THE BENEFIT OF DEDUCTION U/S 80IB(10) OF THE ACT ON RS.5.57 CRORES SIMPLY ON THE GROUND THAT THE ASSESSEE COULD NOT PROVE THAT SUCH AN INCOME WAS FROM THE SALE OF FLATS. BUT FOR THAT THERE , NO DENT HAS BEEN FOUND ON THE OTHERWISE ELIGIBILITY OF THE DEDUCTION. WE HAVE GONE THROUGH THE STATEMENT OF THE ASSESSEE RECORDED AT THE TIME OF SURVEY U/S 133A , WHOSE COPY HAS BEEN GIVEN AT PAGE 1 ONWARDS OF THE PAPER BOOK. IN RESPONSE TO QUESTION NO.3 5 AND OTHER RELATED QUESTIONS ABOUT THE MENTION OF CERTAIN AMOUNTS ON THE BACK SIDE OF FLAT BOOKING RECEIPTS, THE ASSESSEE CONCEDED THAT SUCH SUMS , OVER AND ABOVE THE AMOUNT AS PER REGISTERED DEEDS , W ERE ON - MONEY. I N RESPONSE TO QUESTION NO S . 40 /41 , THE AS SESSEE SU RRENDERED THE ENTIRE ON - MONEY RECORDED ON TH E BACK SIDE OF FLAT BOOKING RECEIPTS AS ITS ITA NO. 2825 /PUN/201 7 M/S. SURANA MUTHA BHANSALI DEVELOPERS 4 INCOME FROM OTHER SOURCES , BY STATING THAT . I HAVE ALSO SUBMITTED A LETTER TO THIS EFFECT. THE TOTAL INCOME DECLARED FROM OTHER SOURCES IN RESPECT OF SRI S HANTI NAGAR PROJECT I.E. ON MONEY COLLECTION WORKS OUT TO RS.5.57 CROES. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE ASSESSEE RECEIVED A SUM OF RS.5.57 CRORES AS ` ON - MONEY WHICH WAS NOT DECLARED IN THE BOOKS OF ACCOUNT BUT OFFERED AS ADDITIONAL INCOME DU RING THE COURSE OF SURVEY IN RESPECT OF ITS OTHERWISE ELIGIBLE HOUSING PROJECT . THE SAID MONEY WAS DULY ACCOUNTED FOR IN THE TOTAL INCOME AT THE TIME OF FILING OF THE RETURN. HOWEVER, WHEN THE ISSUE OF A LLOWING THE DEDUCTION CROPPED UP , THE AO CAME TO HO LD THAT THE SAID AMOUNT COULD NOT BE CONSIDERED AS ` BUSINESS INCOME AS THE BUYERS DENIED HAVING GIVEN SUCH ON - MONEY. WE ARE AT LOSS TO COMPREHEND AS TO HOW THE SUM OF RS.5.57 CRORES , ADMITTEDLY RECEIVED AS ON - MONEY ON THE BOOKING OF FLATS , CAN BE CON STRU ED AS NOT ARISING FROM THE SAME SOURCE WHEN THE QUESTION OF GRANTING DEDUCTION U/S 80IB(10) THEREON SURFACED . 5 . THE DOCTRINE OF APPROBATE AND REPROBATE DOES NOT ALLOW THE DEPARTMENT TO BLOW HOT AND COLD IN THE SAME BREATH, THEREBY ACCEPTING ONE CONSE QUENCE ARISING FROM THE STATEMENT OF THE ASSESSEE WHILE REJECTING THE OTHER ONE . WHEN THE ASSESSEE MADE A ITA NO. 2825 /PUN/201 7 M/S. SURANA MUTHA BHANSALI DEVELOPERS 5 SURRENDER WITH THE CLEAR BACKDROP OF HAVING RECEIVED `ON MONEY AND THE REVENUE ACCEPTED THE SAME WHILE INCLUDING IT IN THE TOTAL INCOME, IT CANNOT LA TER ON CLAIM THAT NO DEDUCTION U/S 80IB(10) CAN BE GRANTED ON THE SAME AS THE ASSESSEE FAILED TO PROVE THAT THE FLAT BOOKE RS GAVE SUCH ON - MONEY. IF WE ACCEPT THE VIEW POINT OF THE REVENUE THAT SOURCE OF THE INCOME IS UNEXPLAINED AND DOES NOT PERTAIN TO THE HOUSING PROJECT, THEN, IN THE GIVEN FACTS, WHEN THERE IS NO POSITIVE MATERIAL OTHER THAN THE ASSESSEES STATEMENT OF RECEIVING SUCH AN AMOUNT AS ` ON MONEY , THEN THERE IS NO INCOME IN THE FIRST INSTANCE CALLING FOR ITS INCLUSION IN THE TOTAL INCOME. ONCE IT IS AGREED TO BE ` ON - MONEY FROM THE FLATS - BOOKINGS AT THE TIME OF ITS INCLUSION IN THE TOTAL INCOME , A FORTIORI, SUCH AN INCOME , BEING FROM SALE OF FLATS ALBEIT RECEIVED AS ON - MONEY , QUALIFIES FOR THE DEDUCTION AS WELL . WE, THEREFORE, OVERTURN THE IMPU GNED ORDER ON THIS SCORE AND ORDER TO ALLOW DEDUCTION U/S 80IB(10) ON SUCH AMOUNT. 6 . IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JU LY , 2021. SD/ - SD/ - ( S.S. VISWANETHRA RAVI ) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT PUNE ; DATED : 2 ND JU LY , 2021 GCVSR ITA NO. 2825 /PUN/201 7 M/S. SURANA MUTHA BHANSALI DEVELOPERS 6 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT (A) - 4 , PUNE 4. 5. 6. THE PR. CIT - 3, PUNE DR, ITAT, A BENCH, PUNE / GUARD FILE . / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 01 - 0 7 - 2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 02 - 0 7 - 2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISC USSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE O N WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. * *