DCIT 9(1), MUMBAI V. GEMSTAR CONSTRUCTION P. LTD, MUMBAI

ITA 344/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3849 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 06-03-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 13-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINHA
• Section: 80IB

Judgement Text

ITA NOS. 344 /MUM/2011 M/S GE MSTAR CONSTRUCTION PVT. LTD. 1 | PA GE IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.344 /MUM/2011 (ASSESSMENT YEAR; - 2006-07) DCIT RG 9(1), R. NO. 223 AAYKAR BHAVAN, M.K. ROAD. MUMBAI-400 020. VS. M/S GEMSTAR CONSTRUCTION PVT. LTD. EESSHA KRIPA, BRAHMAN SABHA ROAD, MALAD (W), MUMBAI 400 064. APPELLANT RESPONDENT ASSESSEE BY: NONE DEPARTMENT BY: SHRI D.K. SINHA DATE OF HEARING: 16/5/2013 DATE OF PRONOUNCEMENT: 16/ 5 /2013 O R D E R PER RAJENDRA SINGH A.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 26.10.2010 OF CIT (A) FOR THE ASSESSMENT YEAR 2006- 07. THE ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING LEVY OF PENALTY U/S 271 (1) (C), WHICH HAS BEEN UPHELD BY CIT (A). 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE WHO IS A B UILDER AND DEVELOPER HAD CONSTRUCTED A HOUSING PROJECT AT LINK ROAD, MALAD WEST, MUMBAI. THE INCOME FROM THE HOUSING PROJECT HAD BEE N CLAIMED EXEMPT U/S 80IB (10). THE AO NOTED THAT THE ASSESSE EE HAD ALSO CLAIMED EXEMPTION IN RESPECT OF OTHER CHARGES AMOUN TING TO RS. 816650/- WHICH RELATED TO HEALTH CLUB CHARGES, LEGA L CHARGES, REGISTRATION CHARGES ETC., WHICH AS PER THE AO WAS NOT ALLOWABLE AS DEDUCTION U/S 80 IB (10). THE AO OBSERVED THAT THE SAID CHARGES HAD BEEN RECEIVED BY THE ASSESSEE ON ACCOUNT OF VARIOUS FACILITIES PROVIDED WHICH WAS NOT PART OF CONSIDERATION FOR FLAT. THE A O, THEREFORE, DISALLOWED THE CLAIM OF DEDUCTION IN RELATION TO TH E SAID CHARGES AND ITA NOS. 344 /MUM/2011 M/S GE MSTAR CONSTRUCTION PVT. LTD. 2 | PA GE MADE ADDITION OF RS. 643848/-. THE AO HAD ALSO INIT IATED PENALTY PROCEEDINGS U/S 271 (1) (C) FOR CONCEALMENT OF INCO ME AND LEVIED PENALTY AT THE MINIMUM RATE OF 100% OF TAX SOUGHT T O BE EVADED AMOUNTING TO RS. 216718/-. THE ASSESSEE DISPUTED TH E DECISION OF AO AND SUBMITTED BEFORE CIT A) THAT THE ASSESSEE HAD N OT CONCEALED ANY INCOME OR FILED INADEQUATE PARTICULARS OF INCOME, I T WAS SUBMITTED BY THE ASSESSEE THAT FULL AND COMPLETE DETAILS OF INCO ME FROM THE HOUSING PROJECT INCLUDING THE OTHER CHARGES COLLECTED FROM FLAT BUYERS HAD BEEN DULY REFLECTED IN P&L ACCOUNT. IT WAS ALSO SUBMITTE D THAT OTHER CHARGES WERE NOTING BUT PART OF SALE CONSIDERATION INCLUDED UNDER DIFFERENT HEADS. IT WAS FURTHER SUBMITTED THAT CLAIM MADE BY THE ASSESSEE WAS A BONAFIDE CLAIM. CIT (A) AFTER CONSIDERING THE EXPLA NATION OF THE ASSESSEE OBSERVED THAT THE AO HIMSELF HAD ALLOWED DEDUCTION IN RELATION TO SOME OTHER CHARGES UNDER DIFFERENT HEADS BUT HAD DISALLO WED CLAIMS UNDER SOME OF THE HEADS. CIT (A) FURTHER OBSERVED THAT TH E CLAIM MADE BY ASSESSEE WAS A BONAFIDE CLAIM AND FULL DETAILS HAD BEEN FILED BY THE ASSESSEE AND, THEREFORE, NO PENALTY COULD BE LEVIED IN RESPECT OF SUCH DISALLOWANCES. CIT (A) ACCORDINGLY, DELETED THE PEN ALTY LEVIED, AGGRIEVED BY WHICH THE REVENUE IS IN APPEAL BEFORE TRIBUNAL. 3. BEFORE US, NO ONE APPEARED ON BEHALF OF THE ASSESS EE TO REPRESENT THE CASE AT THE TIME OF HEARING OF THE APPEAL, THOU GH THE NOTICE OF HEARING HAD BEEN GIVEN WELL IN ADVANCE. NOR ANY ADJ OURNMENT APPLICATION HAS BEEN RECEIVED. WE THEREFORE, PROCEE D TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LEARNED DR WHO PLACED RELIANCE ON THE ORDER OF ASSE SSING OFFICER. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED MATTER C AREFULLY. THE DISPUTE IS REGARDING LEVY OF PENALTY FOR CONCEA LMENT OF INCOME U/S 271 (1) (C) OF THE IT ACT. THE PENALTY HAS BEEN LEV IED IN RELATION TO THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF PART OF THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80 IB (10). THE DISALLO WANCE RELATED TO ITA NOS. 344 /MUM/2011 M/S GE MSTAR CONSTRUCTION PVT. LTD. 3 | PA GE OTHER CHARGES RECEIVED BY THE ASSESSEE FROM FLAT BU YERS IN RESPECT OF WHICH ALSO THE ASSESSEE HAD CLAIMED DEDUCTION WHICH WAS DISALLOWED BY THE AO. CIT (A) HAS DELETED THE PENALTY ON THE GROU ND THAT THE CLAIM MADE BY THE ASSESSEE WAS A BONAFIDE CLAIM. THE ASSE SSEE HAD FURNISHED COMPLETE PARTICULARS IN RESPECT OF THE CLAIMS MADE. THE FINDING OF CIT (A) THAT THE ASSESSEE HAD GIVEN FULL AND COMPLETE D ETAILS OF THE CLAIM IN P&L ACCOUNT WHICH HAS NOT BEEN CONTROVERTED BEFORE US. IT IS A SETTLED LEGAL POSITION THAT NO PENALTY U/S 271 (1) (C) COUL D BE LEVIED AS PER EXPLANATION I TO SECTION 271 (1) (C) IF THE EXPLANA TION OF THE ASSESSEE IS FOUND TO BE BONAFIDE. THE INCOME OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT IS ALLOWED AS DEDUCTION FU LLY TO THE EXTENT OF INCOME DERIVED FROM SUCH PROJECT. THE ASSESSEE HAD RECEIVED OTHER CHARGES ONLY FROM THE FLAT BUYERS AS PART OF THE AC TIVITY RELATING TO HOUSING PROJECT. MOREOVER, AS PER FINDING GIVEN BY THE AO HIMSELF, THE CLAIM HAD BEEN MADE BY THE ASSESSEE ON THE BASIS OF REPORT BY CHARTERED ACCOUNTANT IN FORM NO. 10CCB. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE WE SEE NO INFIR MITY IN THE ORDER OF CIT (A) COMING TO THE CONCLUSION THAT THE CLAIM MAD E BY THE ASSESSEE WAS A BONAFIDE CLAIM AND, THEREFORE, NO PENALTY COU LD BE LEVIED IN SUCH CASES. ORDER OF CIT (A) DELETING THE PENALTY IS ACC ORDINGLY UPHELD. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT TODAY I.E. 16/5/ 2013. SD/- SD/- (AMIT SHUKLA ) (RAJENDRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 16TH MAY, 2013. SK ITA NOS. 344 /MUM/2011 M/S GE MSTAR CONSTRUCTION PVT. LTD. 4 | PA GE COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, K BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI