DCIT, CIR-2, Siliguri, Siliguri V. M/s Shelcon Properties Pvt.Ltd., Siliguri

ITA 372/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1157 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 08-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K TULSIYAN
• Assessee Lawyers: SHALLONG YADEN
• Section: 80IB; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, KOLKATA BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 372/KOL/2015 ASSESSMENT YEAR: 2009-10 DCIT, CIRCLE-2, SILIGURI ..... APPELLANT M/S SHELCOM PROPERTIES PVT. LTD................. ....RESPONDENT [PAN : AAHCS 6766 R] APPEARANCES BY: SHRI SHALLONG YADEN APPEARING ON BEHALF OF THE ASSE SSEE. SHRI S.K. TULSIYAN, APPEARING ON BEHALF OF THE REVE NUE. DATE OF CONCLUDING THE HEARING : AUGUST 23, 2017 DATE OF PRONOUNCING THE ORDER : OCTOBER 31, 201 7 ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-SILIGURI (HERE INAFTER THE LD. CIT(A)), DT. 20.02.2015 WHEREIN THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) W AS CANCELLED. 2. THE ASSESSEE COMPANY IS A REAL ESTATE DEVELOPER AND IS A PROMOTER. THE ASSESSEE HAS CONSTRUCTED A BUILDING ON A LAND M EASURING 61.52 KOTTAH. ON THIS LAND THE ASSESSEE GOT APPROVAL OF A PLAN IN THE MONTH OF MARCH, 2005, THEREAFTER CONSTRUCTED RESIDENTIAL FLATS ON T HE SAID LAND. THE ASSESSEE 2 I.T.A. NO. 372/KOL/2015 ASSESSMENT YEAR: 2009-10 M/S SHELCOM PROPERTIES PVT. LTD. STATED THAT FLOOR AREA OF EACH RESIDENTIAL FLAT WAS LESS THAN 1500 SQ FEET SO THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB (10) OF THE INCOME TAX ACT, 1961. IN SUPPORT OF THE SAID CLAIM THE ASSESSEE FIE LD FORM 10CCB ALONG WITH THE AUDIT REPORT , COMPLETION CERTIFICATE OF THE SA ID BUILDING, COPY OF SANCTIONED PLAN, LAND DEEDS COPY ETC. THE ASSESSEE STATED THAT IN THIS FINANCIAL YEAR MAJOR PORTION OF THE FLATS WERE SOLD AND THE ENTIRE INCOME FROM THAT RESIDENTIAL PROJECT IS DEDUCTIBLE U/S 80I B(10)OF THE INCOME TAX ACT, 1961. INSPECTOR WAS DEPUTED TO VERIFY THE ASSE SSEES CLAIM. HE MADE THE INQUIRY AND FURNISHED A REPORT. THE ASSESSEE HA S ALSO CONSTRUCTED OTHER PROJECTS AND RECOGNIZED PROFIT THEREON. OUT OF TOTAL SALE PROCEEDS OF RS. 7,29,55,320/-, A SUM OF RS. 3,72,68,020/- WAS RECEIVED ON SALE OF FLATS ON WHIC H THE ASSESSEE CLAIMED THAT IT WAS ENTITLED TO 80IB CLAIM ON THE REST OF T HE SALE PROCEEDS ON OTHER FLATS THE ASSESSEE DECLARED PROFIT AND OFFERED THAT PROFIT FOR TAXATION. THE ASSESSEE FURNISHED A SEPARATE TRADING & PROFIT AND LOSS ACCOUNT IN RESPECT OF THE PROJECT ON WHICH THE ASSESSEE IS ENTITLED TO 80IB(10) CLAIM. THE ASSESSEE FILED THE RETURN OF INCOME ON 11.02.20 10. THIS IS A BELATED RETURN OF INCOME. THE PROVISION U/S 80AC OF THE INC OME TAX ACT, 1961 STATED AS FOLLOWS: WHERE IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1 ST DAY OF 3 I.T.A. NO. 372/KOL/2015 ASSESSMENT YEAR: 2009-10 M/S SHELCOM PROPERTIES PVT. LTD. APRIL, 2006 OR ANY SUBSEQUENT YEAR, ANY DEDUCTION I S AVAILABLE U/S 80IA OR SECTION 80IB OR SECTION 80IC [OR SECTION 80ID OR SECTION 80IE], NO SUCH DEDUCTION SHALL BE ALLOWED TO HIM UNLESS HE FU RNISHES A RETURN OF HIS INCOME FOR SUCH ASSESSMENT YEAR ON OR BEFORE TH E DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139. THIS LACUNA WAS POINTED OUT TO THE ASSESSEE BY THE AO AND THE SUBMISSION OF THE ASSESSEE IN THIS REGARD WAS CAREFULLY CONSID ERED AND IT WAS FOUND THAT THE CASES REFERRED TO BY IT HAS NO RELEVANCE I N THIS CASE. THE LD. AO HELD THAT NONE OF THE CASES WERE RELATED TO DEDUCTI ON U/S 80IB. THEREFORE, THE PROVISIONS OF SECTION 80AC OF THE IN COME TAX ACT, 1961 WAS HELD AS SQUARELY APPLICABLE IN THIS CASE AND HENCE, THE ASSESSEE IS NOT ENTITLED TO THE DEDUCTION U/S 80IB(10) OF THE INCOM E TAX ACT, 1961. THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) IS THERE FORE REJECTED BY THE AO. 3. ON THE APPEAL, THE LD. CIT(A) CONFIRMED THE ORDE R BY THE AO. ON FURTHER APPEAL, THE KOLKATA BENCH OF ITAT DELETED THE ADDIT ION. THEREAFTER, THE REVENUE MOVED HONBLE HIGH COURT AND THE HIGH COURT VIDE ITS ORDER DATED 16.01.2014 CONFIRMED THE ORDER OF THE AO AND REVERS ED THE ORDER OF THE I.T.A.T. THE AO GAVE A SHOW CAUSE NOTICE TO THE ASS ESSEE AND THEREAFTER LEVIED PENALTY U/S 271(1)(C) OF THE ACT. AGGRIEVED THE ASSESSEE CARRIED THE MATTER ON APPEAL. THE FIRST APPELLATE AUTHORITY DEL ETED THE PENALTY BY OBSERVING THAT NO INACCURATE PARTICULARS OF INCOME WERE FILED BY THE 4 I.T.A. NO. 372/KOL/2015 ASSESSMENT YEAR: 2009-10 M/S SHELCOM PROPERTIES PVT. LTD. ASSESSEE AND THAT ONLY THE CLAIM OF THE ASSESSEE FO R DEDUCTION U/S 80IB(10) WAS FOUND TO BE INCORRECT AND UNDER THOSE CIRCUMSTA NCES PENALTY CANNOT BE LEVIED. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE U S. 4. THE HONBLE HIGH COURT IN THIS CASE HAS ALLOWED THE REVENUE APPEAL BY DISALLOWING THE CLAIM FOR DEDUCTION U/S 80IB(10) ON THE GROUND THAT THE RETURN OF INCOME WAS NOT FILED IN TIME. HENCE, IN O UR CONSIDERED OPINION IT IS NEITHER THE CASE OF FURNISHING INACCURATE PARTIC ULARS NOR OF CONCEALMENT OF INCOME. THE ASSESSEE HAD FURNISHED ALL THE NECES SARY INFORMATION AS PER LAW. THE INFORMATION IS NOT FOUND TO BE INACCURATE. NO INCOME WAS CONSIDERED BY THE ASSESSEE. THE DISALLOWANCE WAS M ADE AN TECHNICAL GROUNDS. THE HON'BLE SUPREME COURT IN THE CASE OF R ELIANCE PETROPRODUCTS PVT. LTD. REPORTED IN (2010) 322 ITR 158 WHEREIN IT WAS HELD AS FOLLOWS: PENALTY UNDER S. 271(1)(C)-CONCEALMENT- DISALLOWAN CE OF CLAIM FOR DEDUCTION- IN ORDER TO ATTRACT THE PROVISIONS OF S. 271(1)(C), THER E HAS TO BE A CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF HIS INCOME BY THE ASSESSEE- IN THE INSTANT CASE, ASSESSEE CLAIMED DEDUCTION OF INTERES T ON LOANS TAKEN BY IT FOR PURCHASE OF SHARES- AO DISALLOWED SUCH INTEREST- ADMIT TEDLY, NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURAT E- HENCE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS- MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE PA RTICULARS- MERELY BECAUSE THE ASSESSEE CLAIMED DEDUCTION WHICH HAS NOT BEEN ACCEPTED BY THE REVENUE, PENALTY UNDER S. 271(1)(C) IS NOT ATTRACTED- IF THE CONTENTI ON OF THE REVENUE IS ACCEPTED, THE ASSESSEE WOULD BE LIABLE FOR PENALTY UNDER S. 271(1 )(C) IN EVERY CASE WHERE THE CLAIM MADE BY THE ASSESSEE IS NOT ACCEPTED BY THE A O FOR ANY REASON- THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. HELD: 5 I.T.A. NO. 372/KOL/2015 ASSESSMENT YEAR: 2009-10 M/S SHELCOM PROPERTIES PVT. LTD. A GLANCE AT THE PROVISION OF S. 271(1)(C) WOULD SUG GEST THAT IN ORDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE I NCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. PRESENT IS NOT THE CASE OF CONCEALMENT OF THE INCOME. THAT IS NOT THE CASE OF THE REVENUE EITHER. AS PER LAW LEXICON, THE MEANING OF THE WORD PARTICULAR IS A DETAIL OR DETAILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM , OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFORE, THE WORD PARTICULARS USED IN THE SECTION 271(1)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFORMATION GIVEN IN THE RET URN WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY, STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST PRIMA FA CIE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE WORD S ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER S. 271(1)(C) MUST EXIST BEFORE THE PENALTY IS IMPOSE D. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAUS E THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS IN COME- CIT VS. ATUL MOHAN BINDAL (2009) 225 CTR (SC) 248 : (2009) 28 DTR (SC) 1: (2009) 9 SCC 589 FOLLOWED. (PARAS 7 & 8) READING THE WORDS INACCURATE AND PARTICULARS IN C ONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCUR ATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. IN THIS CASE, THERE I S NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE , THERE WOULD BE NO QU ESTION OF INVITING THE PENALTY U/S 271(1)(C). A MERE MAKING OF THE CLAIM, WHICH IS N OT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PAR TICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMO UNT TO THE INACCURATE PARTICULARS. THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WE RE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T. MERELY BECAUSE, THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT ATTRACT THE PENA LTY UNDER S. 271(1)(C). IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN IN CASE O F EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY AO FOR ANY REASON, THE ASSES SEE WILL INVITE PENALTY UNDER S. 271(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE L EGISLATURE. THE TRIBUNAL, AS WELL AS THE LD. CIT(A) AND THE HIGH COURT HAVE CORRECTL Y REACHED THIS CONCLUSION. SHREE KRISHNA ELECTRICALS VS. STATE OF TAMIL NADU & A NR. (2009) 23 VST 249 (SC) APPLIED; RELIANCE PETROPRODUCTS (P) LTD. (JUDGMENT D ATED. 23 RD OCTOBER, 2007 OF THE GUJRAT HIGH COURT IN TAX APPEAL NO. 1149 OF 2007) AF FIRMED. (PARAS 9,10, & 12) 6 I.T.A. NO. 372/KOL/2015 ASSESSMENT YEAR: 2009-10 M/S SHELCOM PROPERTIES PVT. LTD. CONCLUSION: MERELY BECAUSE THE ASSESSEE CLAIMED DEDUCTION OF IN TEREST EXPENDITURE WHICH HAS NOT BEEN ACCEPTED BY THE REVENUE, PENALTY UNDER S. 27 1(1)(C) IS NOT ATTRACTED; MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOM E OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE PROPOSITION LAID DOWN TH E ABOVE CASE LAWS TO THE FACTS OF THE CASES, WE UPHOLD THE ORDER OF THE FIRS T APPELLATE AUTHORITY AND DISMISSED THE APPEAL OF THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. KOLKATA, THE 31 ST DAY OF OCTOBER, 2017. SD/- SD/- [ S.S. VISWANETHRA RAVI ] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31.10.2017 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1 . DCIT, CIRCLE-2, SILIGURI AAYAKAR BHAWAN, B-WING, GROUND FLOOR, PARIBAHAN NAGAR, MATIGARA, SILIGURI-734010. 2 . M/S SHELCOM PROPERTIES PVT. LTD. 7 TH FLOOR, NILADRI SHIKHAR BUILDING, HILL CART ROAD, SILIGURI-734001 3. CIT(A)- 7 I.T.A. NO. 372/KOL/2015 ASSESSMENT YEAR: 2009-10 M/S SHELCOM PROPERTIES PVT. LTD. 4. CIT- , 5. CIT(DR), TRUE COPY BY ORDER SENIOR PRIV ATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES