DCIT, New Delhi V. M/s. Ferrous Infrastructure Pvt. Ltd., Gurgaon

ITA 4535/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90982 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARVINDER KAUR
• Assessee Lawyers: S K GUPTA
• Keywords: Question of law; Revised return
• Section: 115JB; 80IB

Judgement Text

1 ITA 4535/DEL/2013 DCIT VS. FERROUS INFRASTRUCTURE P LTD. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI C.M. GARG: JUDICIAL MEMBER ITA NO. 4535/DEL/2013 A.Y. 2009-10 DCIT, CIRCLE 11(1), VS. FERROUS INFRASTRUCTURE PVT . LTD., NEW DELHI. VATIKA TOWERS, IST FLOOR, BLOCK-B, GOLF COURSE ROAD, SECTOR-54, GURGAON. PAN: AAACF 9776 H ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SMT. PARVINDER KAUR SR. DR RESPONDENT BY : SHRI S.K. GUPTA CA DATE OF HEARING : 25/03-2015 DATE OF ORDER : 24-04-2015. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, PREFERRED BY THE REVENUE, IS DIRECTED AGAINST CIT(A)S ORDER DATED 28-5-2013 RELATING TO AY 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, I N THE RELEVANT YEAR WAS ENGAGED IN REAL ESTATE DEVELOPMENT. IT FILED ITS R ETURN OF INCOME SHOWING TOTAL INCOME AT RS. 98,35,997/- AND BOOK PROFIT U/S 115JB DECLARED AT RS. 2,14,59,962/-. THE AO NOTICED THAT ASSESSEE HAD CLA IMED DEDUCTION U/S 80IB FOR THE PROJECT AT SECTOR 89, FARIDABAD IN THE INCO ME-TAX RETURN. IN THE ASSESSMENT ORDER HE HAS OBSERVED THAT AS PER SECTIO N 80IB(14)(A), BUILT UP 2 ITA 4535/DEL/2013 DCIT VS. FERROUS INFRASTRUCTURE P LTD. AREA MEANS THE INNER MEASUREMENTS OF THE RESIDENT IAL UNIT AT THE FLOOR LEVEL, INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREAS ED BY THE THICKNESS WALLS BUT DOES NOT INCLUDE THE COMMON AREAS SHARED WITH O THER RESIDENTIAL UNITS. HE, ACCORDINGLY, RECALCULATED THE BUILT UP AREA AND CONCLUDED THAT ASSESSEE HAD WRONGLY CLAIMED DEDUCTION U/S 80IB(10). THE ASS ESSEE SURRENDERED THE CLAIM MADE U/S 80IB(10) VIDE ITS SUBMISSIONS DATED 5-12-2011 WHICH ARE REPRODUCED HEREUNDER: 'THE ASSESSEE HAS CLAIMED A DEDUCTION U/S 8018(10) ON PROJECT AT SECTOR 89 FARIDABAD AMOUNTING TO RS. 73,48,416/- WHICH COMPRISES OF THE FOLLOWING: (A) ON FLATS WITH A COVERED AREA OF 994..75 SQ. FT. IN TERMS OF PROVISION OF SECTION 80IB(10) RS. 2682314/- (B) ON FLATS WITH A COVERED AREA OF 1126.45 SQ. FT. IN TERMS OF PROVISOIN OF SECTION 80IB(10) RS. 4666102/- TOTAL: RS. 73,48,416/-. THE DEDUCTION ON FLATS OF 1126.45 SQ. FT. HAS BEEN CLAIMED BASED ON THE OPINION THAT THE AREA OF BALCONIES IN A FLAT WHICH IS NOT COUNTED TOWARDS COVERED AREA IN TERMS OF THE LOCAL BUILDING BYE LAW S SHOULD NOT BE TAKEN INTO THE ACCOUNT WHILE DETERMINING THE COVERED AREA OF THE FLAT UNDER ANY OTHER LAW. THE ISSUE IS DEBATABLE AND THEREFORE IN ORDER OF AVOID ANY CONFUSION THE ASSESSEE IS SURRENDERING THE DEDUCTION CLAIMED UNDER 8018(10) AMOUNTING TO RS. 46,66,102/- CLAIMED ON FLATS OF COVERED AREA OF 1126.45 SQ. FT. WHEN COUNTED INCLUDING THE AREA OF THE BALCONIES. SECONDLY THE ASSESSEE IS ALSO SURRENDERING THE DEDUCTION CLAIMED AS IN THE OPINION OF THE ASSESEE IT WILL NOT BE POS SIBLE FOR IT TO GET THE COMPLETION CERTIFICATE FOR THIS P ART OF THE PROJECT BEFORE 31 ST MARCH 2012. 3 ITA 4535/DEL/2013 DCIT VS. FERROUS INFRASTRUCTURE P LTD. 2.1. ACCORDINGLY, THE AO HAD MADE ADDITION OF RS. 4 6,66,102/- AND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C). 2.2. IN PENALTY ORDER THE AO HAS OBSERVED THAT DURI NG THE COURSE OF PENALTY PROCEEDINGS THE ASSESSEE COULD NOT PRODUCE ANY COGE NT REPLY OR THE EVIDENCE TO JUSTIFY NON-IMPOSITION OF PENALTY. HE REFERRED T O VARIOUS CASE LAWS AND CONCLUDED THAT THE ASSESSEE COMPANY HAD FURNISHED I NACCURATE PARTICULARS OF INCOME AND ACCORDINGLY ASSESSEES CASE WAS COVERED BY THE EXPLANATION 1 TO SECTION 271(1)(C).HE IMPOSED A PENALTY OF RS. 15,86 ,008/-. 2.3. LD. CIT(A) TAKING INTO CONSIDERATION THAT ASSE SSEES CLAIM WAS BONA FIDE AND WAS BASED ON OPINION AND INTERPRETATION OF THE LAW AND ALSO SQUARELY COVERED BY THE DECISION OF HONBLE DELHI H IGH COURT IN THE CASE OF CIT VS. JAKSON LTD. 214 TAXMAN 94 (DEL.) AS ALSO OT HER DECISIONS, AS MENTIONED IN HIS ORDER, ALLOWED THE ASSESSEES APPE AL. 2.4. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFOR E US. 3. HAVING HEARD BOTH THE PARTIES WE FIND THAT IN RE GARD TO PROJECT AT SECTOR 89, FARIDABAD THE ASSESSEE HAD CLAIMED DEDUC TION U/S 80IB(10) ON THE GROUND THAT BUILT UP AREA OF THE RESIDENTIAL UNIT W AS 971.97 SQ. FT. WITHOUT BALCONY, THE SUPER AREA OF FLAT BEING 1412 SQ. FT. THE AREA OF BALCONY WAS 154.48 SQ. FT AND, THEREFORE, IF THE AREA OF BALCON Y WAS TO BE INCLUDED IN THE BUILT UP AREA, THEN THE SAME EXCEEDED 1000 SQ. FT., DISENTITLING THE ASSESSEE TO DEDUCTION U/S 80IB(10). THE BUILT UP AREA HAS BEEN DEFINED U/S 80IB(14)(A) TO MEAN THE INNER MEASUREMENTS OF THE RESIDENTIAL U NIT AT THE FLOOR LEVEL, INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREAS ED BY THE THICKNESS WALLS BUT DOES NOT INCLUDE THE COMMON AREAS SHARED WITH O THER RESIDENTIAL UNITS. THE ASSESSEE HAD ADVANCED ITS CLAIM ON THE BASIS OF OPINION OBTAINED AS PER 4 ITA 4535/DEL/2013 DCIT VS. FERROUS INFRASTRUCTURE P LTD. LOCAL BUILDING BYE LAWS AS PER WHICH BALCONY WAS TO BE EXCLUDED WHILE CALCULATING THE BUILT UP AREA. THUS, II WAS A CASE OF THE CLAIM BEING ADVANCED UNDER A BONA FIDE BELIEF THAT THE COVERED AREA AS D EFINED IN THE LOCAL BUILDING BYE LAWS SHOULD BE SUBSTITUTED FOR ANY OTHER DEFINI TION UNDER ANY OTHER LAW. AFTER CONSIDERING THE SPECIFIC DEFINITION UNDER THE INCOME-TAX ACT, THE ASSESSEE SURRENDERED ITS CLAIM. 3.1. LD. CIT(A) HAS, INTER ALIA, RELIED ON THE DECI SION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JAKSON LTD. (SUPR A). IN THIS CASE PENALTY WAS IMPOSED BECAUSE OF THE REASON THAT DEDUCTION C LAIMED U/S 80IB BY THE ASSESSEE WAS ULTIMATELY ALLOWED AT A LOWER LEVEL. T HE ENHANCED CLAIM FOR DEDUCTION U/S 80IB MADE IN THE REVISED RETURN WAS N OT ACCEPTED AND ONLY THE ORIGINAL AMOUNTS, CLAIMED BY THE ASSESSEE AT THE TI ME OF FILING OF ORIGINAL RETURN, WAS ALLOWED. UNDER THESE CIRCUMSTANCES, HON BLE DELHI HIGH COURT OBSERVED AS UNDER: 5. IT IS APPARENT FROM THE ABOVE EXTRACT, THAT THE MERE MAKING OF A CLAIM WHICH IS ULTIMATELY HELD NOT TO BE SUSTAINA BLE IN LAW, WOULD NOT AMOUNT TO FURNISHING INACCURATE PARTICULA RS REGARDING THE INCOME OF AN ASSESSEE. IN THE PRESENT APPEALS IT IS ONLY THAT THE CLAIMS OF DEDUCTION UNDER SECTION 80I B HAVE BEEN DOWNSCALED. THIS, BY ITSELF, WOULD NOT MEAN THAT IT IS A CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME. FURTHE RMORE, THERE IS NO FINDING IN THE PENALTY ORDER AS TO WHIC H PART OF THE INCOME THE ASSESSEE HAD CONCEALED AND WITH REGARD T O WHICH PARTICULAR FACET OF HIS INCOME HAD THE ASSESSEE PRO VIDED INACCURATE PARTICULARS THEREOF. IN THESE CIRCUMSTAN CES, WE FEEL THAT THE TRIBUNAL HAS CORRECTLY APPLIED THE DECISIO N OF THE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA). NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION IN THESE APPEALS. THE APPEALS ARE DIS MISSED. 5 ITA 4535/DEL/2013 DCIT VS. FERROUS INFRASTRUCTURE P LTD. 3.2. IN THE PRESENT CASE, THERE IS NO DISPUTE AS RE GARDS THE PARTICULARS FURNISHED BY ASSESSEE AND THE ONLY DISPUTE WAS WITH REGARD TO INCLUSION OF BALCONY IN THE BUILT UP AREA AS PER THE DEFINITION U/S 80IB(14)(A). IT APPEARS THAT WHEN CONFRONTED WITH SPECIFIC PROVISION OF LAW , THE ASSESSEE SURRENDERED ITS CLAIM, WHICH INITIALLY APPEARS TO H AVE BEEN MADE ON THE BASIS OF LOCAL BYE LAWS. THUS, CLAIM ADVANCED BY ASSESSEE WAS NOT SUSTAINABLE IN LAW AND, THEREFORE, HE HAD SURRENDERED THE CLAIM. W E FIND THAT HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. 322 ITR 158 HAS, INTER ALIA, HELD AS UNDER: 9. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH T HE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE P ARTICULARS. IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEE N DEFINED AS: NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORD ING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRAN SCRIPT. WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTI CULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORD S IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT A CCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT O R ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE N O QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LA W, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULAR S REGARDING THE INCOME OF THE ASSESSEE . SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. (EMPHASIS SUPPLIED BY US) 6 ITA 4535/DEL/2013 DCIT VS. FERROUS INFRASTRUCTURE P LTD. 3.3. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) IN DELETING THE PENALTY IN QUESTION. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 24-04-2015. SD/- SD/- (C.M. GARG ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24-04-2015. MP: C OPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR