SHANKESHWAR CONSTRUCTIONS, MUMBAI V. ITO 13(3)(4), MUMBAI

ITA 4616/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75638 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 13-02-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 09-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NARAYAN ATAL IZRFKHZ DH LS
• Keywords: Business income; Bonafide belief; Wrong claim
• Section: 80IB; 10

Judgement Text

- 1 - VK;DJ VIHYH; VF/KDJ.K BZ U;K;IHB EQACBZ ESAA IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI JH JH JH JH CH CHCH CH- -- - VKJ VKJVKJ VKJ- -- - CK CKCK CKLDJ.K LDJ.K LDJ.K LDJ.K] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA JH VFER 'KQDYK JH VFER 'KQDYK JH VFER 'KQDYK JH VFER 'KQDYK] U;KF;D ] U;KF;D ] U;KF;D ] U;KF;D LNL; DS LE{K LNL; DS LE{K LNL; DS LE{K LNL; DS LE{K BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER. VK;DJ VIHY LA[;K /ITA NO.4616/MUM/2012 FU/KKZJ.K O'KZ @ ASSESSMENT YEAR 2005-06. SHANKESHWAR CONSTRUCTION. B-10, SHANKESHWAR DARSHAN, SETH MOTHISHA LANE, MAZGAON, MUMBAI 400 020. CUKE@ VS. INCOME TAX OFFICER 13(3)(4) AAYKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. PAN:- AATFS3100Q VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT VIHYKFKHZ DH VKSJ LS @ ASSESSEE BY SHRI NARAYAN ATAL IZR;FKHZ DH VKSJ LS @ REVENUE BY SHRI ASHOK SURI VKNS'K VKNS'K VKNS'K VKNS'K @ @@ @ ORDER PER AMIT SHUKLA, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER DATED 16.04.2012 PASSED BY CIT(APPEALS)-24, MUMBAI, IN RELATION TO THE PENALTY PROCEEDINGS U/S 271(1)(C) FOR THE ASSES SMENT YEAR 2005-06. THE ASSESSEE IN THIS APPEAL IS MAINLY AGGRIEVED BY THE LEVY OF PENALTY OF LQUOKBZ DH RKJH[K @ DATE OF HEARING 14 - 0 2 - 2014 ?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT 21 - 0 2 - 2014 - 2 - RS. 38,17,837/- U/S 271(1)(C) ON ACCOUNT OF DISALL OWANCE OF CLAIM OF DEDUCTION U/S 80IB(10). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF PROPERTIES AND HOUSING P ROJECTS. DURING THE RELEVANT YEAR, THE ASSESSEE HAS COMPLETED A PROJECT FOR REDEVELOPMENT OF A BUILDING UNDER THE NAME NAVKAR DARSHAN CONS ISTING OF 3 WINGS. THE ASSESSEE HAS DECLARED TOTAL SALES OF RS. 4,32,0 0,000/-. IN THE RETURN OF INCOME IT HAS CLAIMED DEDUCTION U/S 80IB(10) OF RS. 1,09,08,105/- BEING 100% OF NET PROFIT EARNED ON REDEVELOPMENT OF THE SAID BUILDING. THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO T HE ASSESSEE, AS TO WHY THE DEDUCTION U/S 80IB(10) SHOULD NOT BE DISALL OWED FOR THE REASON THAT:- I) THE AREA OF THE PLOT IS LESS THAN 1 ACRE OF LAND; II) THE AREA IS NOT DECLARED AS A SLUM AREA; AND III) THE COMMENCEMENT CERTIFICATE WAS IN DIFFERENT NAME. 3. IN RESPONSE THE ASSESSEE FILED FOLLOWING EXPLANA TION:- WE HAVE DEVELOPED THE PROJECT OF RECONSTRUCTION/RE DEVELOPMENT OF EXISTING BUILDING IN ACCORDANCE WITH THE MODIFIE D D.C. REGULATION 33(7) AND APPENDIX-III TO THIS REGULATIO N 33(7) SANCTIONED BY THE GOVT. IN URBAN DEVELOPMENT MANTRA LAYA VIDE - 3 - NOTIFICATION PUBLISHED IN GOVT. GAZETTE DATED 25 TH JANUARY 1999. THE SAIS PROJECT SATISFIED THE FOLLOWING CONDITIONS LAID DOWN UNDER SECTION 80IB(10) OF THE INCOME TAX ACT, 1961. 1) THE PROJECT IS APPROVED BY LOCAL AUTHORITY I.E. MUNICIPAL CORPORATION OF GREATER MUMBAI. 2) THE PROJECT HAD COMMENCED ON 6/12/2001 AND THE B UILDING COMPLETION CERTIFICATE WAS ISSUED ON 19/8/2004. PHO TOCOPY OF COMMENCEMENT CERTIFICATE DATED 06/12/2001 AND PHOTOCOPY OF BUILDING COMPLETION CERTIFICATE DATED 19-8- 2004 ARE ENCLOSED HEREWITH. 3) THE MAXIMUM AREA OF EACH RESIDENTIAL UNIT IN WIN G A IS 55.760 SQ. MTRS. I.E. 600.1956 SQ. FT. AND IN WING B IS 81.210 SQ. MTRS I.E. 874.1372 SQ. FT. 4) THE SIZE OF THE PLOT ON WHICH THE SAID PROJECT I S CONSTRUCTED IS 1191.01 SQ. METERS WHICH IS LESS THAN 1 ACRE. HO WEVER, THE CONDITION THAT THE SIZE OF THE PLOT OF LAND SHO ULD BE MINIMUM 1 ACRE IS NOT APPLICABLE TO OUR PROJECT AS PER THE PROVISO TO CLAUSE (B) UNDER SUB SECTION 10 OF SECTI ON 80IB OF THE INCOME TAX ACT, 1961. 3.1 AS REGARDS ASSESSEES EXPLANATION GIVEN IN PARA NO. 1, 2 AND 3, THE AO ACCEPTED THE CONTENTION OF THE ASSESSEE. HOWEVER WITH REGARD TO SUBMISSION MADE IN PARA NO. 4, HE HELD THAT THE ARE A OF THE PLOT IS ONLY 1191.01 SQ. MTRS. WHICH IS LESS THAN 1 ACRE OF LAND , HENCE DOES NOT FALL UNDER THE PROVISO TO CLAUSE (B) UNDER SUB SECTION 10 OF SECTION 80IB , AS THE AREA IS NOT NOTIFIED SLUM AREA. THE ASSESSEE TH EREAFTER FILED ANOTHER LETTER DATED 28/11/2007, WHICH FOR THE SAKE OF REA DY REFERENCE IS REPRODUCED HEREIN BELOW:- - 4 - OUR PROJECT IS HOUSING PROJECT OF RECONSTRUCTION /REDEVELOPMENT. THE PROJECT IS IN ACCORDANCE WITH THE MODIFIED D. C. REGULATION 33(7) AND APPENDIX-III TO THIS REGULATION 33(7) SAN CTIONED BY THE GOVT. IN URBAN DEVELOPMENT MANTRALAYA VIDE NOTIFICA TION PUBLISHED IN GOVT GAZETTE DATED 25 TH JANUARY 1999. 1. THE CONDITION OF AREA OF PLOT OF 1 ACRE OF LAND IS NOT APPLICABLE IN OUR PROJECT IN VIEW OF THE PROVISO TO CLAUSE (B) OF SUB SECTION 10. 2. ORIGINALLY THE PROPERTY WAS OWNED BY JAYSHREE CO NSTRUCTION THEN M/S. JAYSHREE CONSTRUCTION ENTERED INTO A DEED OF ASSIGNMENT DATED 14/10/1998 WHICH IS REGISTERED WIT H SUB- REGISTRAR OF ASSURANCE AT MUMBAI ON 11 TH DECEMBER 2000 BETWEEN M/S JAYSHREE CONSTRUCTION AND M/S SHANKESHW AR CONSTRUCTION. M/S JAYSHREE CONSTRUCTION ASSIGNED THE LESSEE OF TH E LAND TO M/S. SHAKESHWAR CONSTRUCTION. WE ARE ENCLOSING HEREWITH THE TITLE CERTIFICATE OF THE PROPERTY AND THE DEED OF ASSIGNM ENT FOR YOUR REFERENCE. IN VIEW OF THE ABOVE , M/S SHAKESHWAR CONSTRUCTION OBTAINED THE RIGHT TO REDEVELOP THE PROPERTY AND FOR SALE OF RES IDENTIAL UNITS. SINCE THE ENTIRE WORK IS CARRIED OUT BY M/S. SHANKE SHWAR CONSTRUCTION, THE PROJECT IS ELIGIBLE U/S. 80IB(10) OF THE I.T. ACT 3.2 HOWEVER, THE AO REJECTED THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE CONDITIONS LAID DOWN IN PROVISO TO CLAUSE (B) OF SECTION 80IB(10) IS NOT FULFILLED BECAUSE THE ASSESSEE HAS NOT UNDERTAKEN ANY REDEVELOPMENT OR RECONSTRUCTION IN SLUM AREA UNDER SCHEME NOTIFIED BY CENTRAL OR STATE GOVERNMENT. AFTER DETAIL REASONING HE DISALLOWED THE - 5 - ASSESSEES CLAIM U/S 80IB(10). SUCH A DISALLOWANCE ALSO STOOD CONFIRMED FROM THE STAGE OF CIT(A) ALSO. 4. IN THE PENALTY PROCEEDINGS, IN RESPONSE TO THE S HOW CAUSE NOTICE THE ASSESSEE SUBMITTED THAT ITS REDEVELOPMENT OF HO USING PROJECT WAS CARRIED OUT IN ACCORDANCE WITH THE SCHEME FRAMED BY THE STATE GOVERNMENT FOR RECONSTRUCTION/REDEVELOPMENT OF EXIS TING BUILDING. SINCE IT WAS A NOTIFIED SCHEME OF THE STATE GOVERNM ENT, THE ASSESSEE CLAIMED DEDUCTION U/S 80IB(10) AND IN THE AUDIT REP ORT FILED ALONGWITH THE RETURN OF INCOME A DETAIL NOTE WAS GIVEN IN FRO M NO. 10CCB, GIVING THE REASONS, AS TO WHY THE ASSESSEE HAS CLAIMED SUC H A DEDUCTION. IT WAS FURTHER SUBMITTED THAT, IF THE SCHEME OF THE STATE GOVERNMENT HAS NOT BEEN NOTIFIED BY THE BOARD, SUBSEQUENTLY, THEN, IT CANNOT LEAD TO ANY INFERENCE THAT ASSESSEE HAS MADE ANY FALSE CLAIM, A S IT WAS UNDER A BONAFIDE BELIEF THAT ITS CLAIM WOULD BE ALLOWED. T HE RELEVANT EXPLANATION OF THE ASSESSEE BEFORE AO WERE AS UNDER :- YOUR GOOD SELF WILL APPRECIATE THAT AS PER THE PRO VISO TO CLAUSE (B) OF SUB SECTION 10 OF SECTION 80-IB OF THE INCOME TA X ACT, 1961, OUR PROJECT IS NOT REQUIRED TO FULFILL THE CONDITION OF MINIMUM 1 ACRE AREA. OUR PROJECT IS A HOUSING PROJECT WHICH IS CAR RIED OUT IN ACCORDANCE WITH THE SCHEME FRAMED BY STATE GOVERNME NT FOR RECONSTRUCTION/REDEVELOPMENT OF EXISTING BUILDING. OUR PROJECT - 6 - BEING IN ACCORDANCE WITH THE NOTIFIED SCHEME OF THE STATE GOVERNMENT, WE CLAIMED DEDUCTION U/S 80-IB (10) IN OUR RETURN OF INCOME AND THESE FACTS WERE SUBMITTED IN DETAIL IN TAX AUDIT REPORT VIDE CLAUSE NO. 26 AND BY WAY OF NOTE IN FO RM NO. 10CCB. THE TAX AUDIT REPORT AND FORM NO. 10CCB WERE SUBMIT TED ALONG WITH RETURN OF INCOME AND THE SAME WAS ALSO BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER DURING THE ASSESSMENT PROC EEDINGS. AS PER THE PROVISIONS OF THE SECTION 80IB(10), THE SCHEME FRAMED BY STATE GOVERNMENT HAS TO BE NOTIFIED BY THE BOARD. TO THE BEST OF OUR KNOWLEDGE AND TO OUR SURPRISE TILL DATE THE BOARD H AS NOT ANY SCHEME. THEREFORE, OUR CLAIM FOR DEDUCTION U/S 80-I B HAS NOT BEEN ALLOWED. WE HAVE PREFERRED AN APPEAL PETITION BEFOR E THE HONBLE TRIBUNAL WITH THE HOPE THAT THE SCHEME WILL BE NOTI FIED BY THE BOARD AND WE WILL BE ELIGIBLE FOR DEDUCTION U/S 80I B(10) OF THE INCOME TAX ACT, 1961. WE HAD MADE FULL DISCLOSURE OF THE FAT REGARDING DEDUCTION U/S 80-IB(10) IN THE RETURN OF INCOME. OUR CLAIM IS NOT ACCEPTED BECAUSE STILL THE SCHEME IS NOT BEING NOTIFIED BY T HE BOARD WHICH IS BEYOND OUR CONTROL. IN VIEW OF THIS, YOUR GOOD SELF WOULD APPRECIATE T HAT THERE IS NO CONCEALMENT OF INCOME WHATSOEVER OR FURNISHING O F INCORRECT DETAILS/PARTICULARS LEADING TO CONCEALMENT OF INCOM E. 4.1 THE AO HELD THAT THE ASSESSEE HAS RAISED A WRON G CONTENTION WHICH IS AGAINST THE PROPOSITION OF LAW, BECAUSE IT IS NOT ENTITLED FOR CLAIM OF DEDUCTION U/S 80IB(10) FOR THE DETAIL REAS ONS GIVEN BY THE AO IN THE QUANTUM PROCEEDINGS. SUCH A CLAIM MADE BY THE A SSESSEE AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME A ND IF THE CASE OF THE ASSESSEE WOULD NOT HAVE BEEN SELECTED FOR SCRUTINY, FACT OF CONCEALMENT - 7 - OF INCOME COULD NOT HAVE BEEN DISCOVERED. ACCORDING LY, HE LEVIED THE PENALTY OF RS. 38,17,837/- ON SUCH A CLAIM OF DEDUC TION. 5. IN THE FIRST APPEAL, LD. CIT(A) ALSO CONFIRMED T HE LEVY OF PENALTY GIVING DETAIL REASONING THAT THE ASSESSEES CASE DO ES NOT FALL UNDER THE PROVISO TO CLAUSE (B) OF SUB-SECTION 10 OF SECTION 80IB, A S THE ASSESSEES HOUSING PROJECT IS NEITHER IN THE AREA NOTIFIED AS SLUM AREA, NOR THE SCHEME UNDER WHICH THE ASSESSEE HAS RECONSTRUCTED T HE PROJECT HAS BEEN NOTIFIED BY THE BOARD. EVEN THE NOTE GIVEN IN FORM NO. 10CCB WILL NOT HELP THE ASSESSEE, AS THE CLAIM FOR DEDUCTION I TSELF WAS ON WRONG PREMISE. AFTER RELYING UPON THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. ZOOM COMMUNICATION LTD. ( 32 7 ITR 510), HE CONFIRMED THE PENALTY. 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ASSESSEE HAS CARRIED OUT RECONSTRUCTION/REDEVELOPME NT OF EXISTING BUILDING AS PER THE SCHEME NOTIFIED BY THE STATE GO VERNMENT OF MAHARASHTRA. AT THAT TIME A LOT OF REPRESENTATION W ERE BEING MADE TO THE FIANCE MINISTRY, GOVT. OF INDIA, WHICH WAS ALSO ENDORSED AND - 8 - RECOMMENDED BY SEVERAL HONBLE MEMBERS OF PARLIAMEN T THAT IN MUMBAI, PROJECT FOR REPAIRS AND RECONSTRUCTION SHO ULD ALSO BE GIVEN BENEFIT OF TAX EXEMPTION U/S 80IB(10). BEFORE US, H E HAS FILED THE COMPILATION OF ADDITIONAL DOCUMENTS CONSISTING OF V ARIOUS LETTERS WRITTEN BY PROPERTY RE-DEVELOPERS ASSOCIATION AND VARIOUS HONBLE MEMBERS OF PARLIAMENT TO THE FINANCE MINISTERS TO INCLUDE S UCH SCHEME WHEREIN THE BUILDERS UNDERTAKE RECONSTRUCTION/REDEVELOPMENT OF THE HOUSING PROJECT ESPECIALLY IN MUMBAI WHERE THOUSANDS OF BUI LDING ARE IN A DILAPIDATED STAGE. HE EVEN SHOWED US SOME OF THE NE WS-PAPER CUTTINGS THAT GOVERNMENT IS CONSIDERING SUCH REPRESENTATION MADE BY VARIOUS FORUMS TO THE FINANCE MINISTRY. BESIDES THIS, HE SU BMITTED THAT IN THE TAX AUDIT REPORT AND IN THE STATEMENTS OF ACCOUNT, THE ASSESSEE HAS GIVEN DETAIL NOTE FOR MAKING SUCH A CLAIM IN THE RETURN O F INCOME AND IT CANNOT BE SAID THAT ASSESSEE HAS FURNISHED ANY INACCURATE PARTICULARS OF INCOME, AS IT HAS NOT CONCEALED ANY MATERIAL FACTS. HE ALSO DREW OUR ATTENTION TO SUCH NOTE MADE IN THE FORM NO. 10CCB BY THE AUDITOR . THUS AT THE TIME OF MAKING THE CLAIM OF DEDUCTION U/S 80IB(10), THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT GOVERNMENT OF INDIA, WILL TAKE INTO CONSIDERATION THE REPRESENTATIONS MADE BY THE VARIOUS FORUMS AND THAT SUCH A SCHEME - 9 - OF GOVERNMENT OF MAHARASHTRA WOULD GET THE APPROVAL OF CBDT. IN SUPPORT OF HIS CONTENTION THAT THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS, HE STRONGLY RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUC T PVT. LTD. (322 ITR 158), AND SUBMITTED THAT, EVEN THOUGH THE SAID CLA IM FOR DEDUCTION HAS BEEN DISALLOWED IN THE QUANTUM PROCEEDINGS ON THE G ROUND THAT IT HAS BEEN FOUND UNSUSTAINABLE IN LAW, IT DOES NOT LEAD T O ANY INFERENCE THAT ASSESSEE HAS FURNISHED ANY INACCURATE PARTICULARS W ITHIN THE AMBIT OF SECTION 271(1)(C). AT THE TIME OF MAKING SUCH A CLA IM IN RETURN OF INCOME THE ASSESSEE WAS GENUINELY UNDER A BONAFIDE BELIEF THAT CBDT WILL NOTIFY THE SCHEME OF STATE GOVERNMENT AND ASSESSEE WOULD B E ELIGIBLE FOR CLAIM OF DEDUCTION. 7. LD. DR ON THE OTHER HAND STRONGLY OPPOSING THE C ONTENTIONS RAISED BY THE LD. COUNSEL, SUBMITTED THAT RIGHT AT THE STA GE OF FILING OF RETURN OF INCOME, THE ASSESSEE WAS VERY WELL AWARE, THAT ITS CLAIM FOR DEDUCTION U/S 80IB(10) IS NOT ALLOWABLE IN LAW AS THE BASIC C ONDITION OF MINIMUM REQUIREMENT OF 1 ACRE OF LAND HAS NOT BEEN FULFILLE D. THIS IS EVEN EVIDENT FROM THE NOTES GIVEN IN TAX AUDIT REPORT WHICH HAS BEEN REFERRED BY THE - 10 - LD. COUNSEL. THE ASSESSEES CASE ALSO DOES NOT FALL UNDER THE P ROVISO TO CLAUSE (B) OF SECTION 80IB(10), AS NEITHER THE ASSE SSEES PROJECT WAS IN A NOTIFIED SLUM AREA NOR IT WAS SO PROPOSED IN THE SA ID SECTION. THE ASSESSEE IN COMPLETE DEFIANCE OF LAW, HAS CLAIMED S UCH A DEDUCTION WHICH AMOUNTS TO FURNISHING OF INACCURATE PARTICULA RS OF INCOME. HE ALSO REFERRED TO THE DECISION OF CO-ORDINATE BENCH OF TR IBUNAL IN THE CASE OF ITO VS. MS. ASHA KASHIPRASAD RINGSHIA PANDURANG SA DAN, REPORTED IN [2013] 29. TAXMANN. COM 160, WHEREIN THE TRIBUNAL H AS TAKEN NOTE OF THE FACT THAT PROVISO IS APPLICABLE ONLY TO THOSE SCHEMES WHICH HAS BEEN FRAMED BY CENTRAL OR STATE GOVERNMENT FOR RECONSTRU CTION OR REDEVELOPMENT OF EXISTING BUILDINGS DECLARED TO BE SLUM AREAS. HE ALSO REFERRED TO THE CBDT NOTIFICATION MENTIONED IN THE SAID ORDER AND THE FINANCE MINISTERS SPEECH IN THIS REGARD. THUS, RI GHT FROM THE BEGINNING, ASSESSEES CLAIM WAS PRIMA FACIE WRONG AND THERE CO ULD NOT BE ANY BONAFIDE BELIEF FOR MAKING SUCH A CLAIM. HE ALSO RE FERRED TO VARIOUS OBSERVATIONS MADE BY THE LD. CIT(A) IN THE PENALTY ORDER. THUS THE PENALTY LEVIED BY THE AO AND AS CONFIRMED BY CIT(A) SHOULD BE SUSTAINED. - 11 - 8. BY WAY OF REJOINDER THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE EXTRACT OF FINANCE MINISTERS SPEECH AS GI VEN IN THE DECISION OF TRIBUNAL IN THE CASE OF ITO VS. ASHA KASHIPRASAD RI NGSHIA PANDURANG SADAN (SUPRA) GOES TO REVEAL THAT AT THE TIME OF IN TRODUCTION OF SAID PROVISO THERE WAS NO MENTION OF SLUM AREA BUT ONLY THE SCH EME WHICH ARE FOR RECONSTRUCTION OR REDEVELOPMENT PROJECTS AP PROVED BY THE CENTRAL OR STATE GOVERNMENT. FROM THIS IT CAN BE GA ZED, THAT AT THE TIME OF INTRODUCTION OF THE BILL THE WAIVER OF MINIMUM P LOT SIZE OF 1 ACRE WAS NOT MERELY FOR THE SLUM AREA. THUS THE ASSESSEES B ONAFIDE BELIEF CAN ALSO BE TAKEN INTO CONSIDERATION FROM THE FINANCE M INISTERS SPEECH. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PER USED THE RELEVANT RECORDS. AT THE OUTSET IT IS NOTED THAT THE VARIOUS DOCUMENTS WHICH HAS BEEN FILED BY THE LD. COUNSEL BEFORE US IN THE FORM OF REPRESENTATION LETTERS TO THE FINANCE MINISTRY AND NEWS PAPER CUTT INGS HAS NOT BEEN FURNISHED EITHER BEFORE THE AO OR BEFORE THE CIT(A) IN ANY OF THE PROCEEDINGS. THE EXPLANATION GIVEN BY THE LD. COUNS EL BASED ON SUCH DOCUMENTS IS THAT, AT THE TIME OF MAKING SUCH A CLA IM FOR DEDUCTION, THE ASSESSEE HAD A BONAFIDE AND GENUINE BELIEF THAT THE SCHEME OF THE STATE - 12 - GOVERNMENT IN WHICH IT HAS UNDERTAKEN RECONSTRUCTIO N/REDEVELOPMENT OF THE PROJECT WILL GET APPROVED. THOUGH THIS PLEA WAS THERE IN THE ASSESSMENT PROCEEDINGS AS WELL AS PENALTY PROCEEDIN GS, HOWEVER SUCH A PLEA WAS NOT SUPPORTED BY ANY DOCUMENT OR EVIDENCE BEFORE THE AUTHORITIES BELOW. ASSESSEES MAIN EXPLANATION WAS THAT, IT SATISFIES THE CONDITIONS OF PROVISO TO CLAUSE (B) OF SECTION 80IB (10) BECAUSE THE ASSESSEE HAS UNDERTAKEN THE REDEVELOPMENT OF THE PR OJECT UNDER THE SCHEME OF THE STATE GOVERNMENT. THIS EXPLANATION OF THE ASSESSEE HAS NOT BEEN FOUND TO BE TENABLE IN LAW BY THE DEPARTME NTAL AUTHORITIES EITHER IN THE QUANTUM PROCEEDINGS OR IN THE PENALTY PROCEEDINGS. IN THE QUANTUM PROCEEDINGS, ASSESSEES DISALLOWANCE OF CLA IM FOR DEDUCTION U/S 80IB(10) HAD ATTAINED THE FINALITY, WHICH IS AL SO IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. NOW THE ISSUE BEFORE US IS, WHETHER SUCH A FINDING GIVEN IN THE QUANTUM PROCEEDINGS CAN BE HEL D TO BE RESJUDICATA FOR DRAWING ADVERSE INFERENCE IN THE PENALTY PROCEE DINGS ALSO. IT IS A TRITE LAW THAT THE FINDINGS GIVEN IN THE ASSESSMENT PROCEEDINGS, THOUGH HAVE RELEVANT AND PROBATIVE VALUE, BUT SUCH A FINDI NG OR MATERIAL ALONE MAY NOT JUSTIFY IMPOSITION OF PENALTY IN A GIVEN CA SE, BECAUSE THE CONSIDERATIONS THAT ARISES IN THE PENALTY PROCEEDIN GS ARE DIFFERENT FROM - 13 - THOSE IN THE ASSESSMENT PROCEEDINGS. IN THE PENALTY PROCEEDINGS IT HAS TO BE SEEN WHETHER AT THE TIME OF FILING OF RETURN OF INCOME, THE ASSESSEE HAD A GENUINE AND BONAFIDE BELIEF THAT HIS CLAIM FOR DEDUCTION OF INCOME IN THE RETURN OF INCOME IS ALLOWABLE OR N OT. EVEN THOUGH SUCH A CLAIM HAS BEEN ADVERSELY VIEWED IN THE ASSESSMENT PROCEEDINGS, BUT THEY ARE NOT THE FINAL WORD IN THE PENALTY PROCEEDI NGS UPON THE PLEAS WHICH CAN BE TAKEN AT THE PENALTY STAGE TO PROVE IT S BONAFIDE AND HOWSOEVER RELEVANT FINDING HAVE BEEN GIVEN IN THE Q UANTUM PROCEEDINGS, THEY ARE NOT CONCLUSIVE SO FAR AS PENA LTY PROCEEDINGS ARE CONCERNED. IN THE PENALTY PROCEEDINGS THE ASSESSEE MAY ADDUCE A FRESH EVIDENCE TO ESTABLISH THAT IT IS NOT GUILTY OF FURN ISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. THE ASSESSEE CANNOT BE DEBARRED FROM TAKING APPROPRIATE PLEAS OR FURNISHING OF ANY FRESH EVIDENCE, SIMPLY ON THE GROUND THAT SUCH A PLEA OR EVIDENCE HAD NOT BEEN FILED BEFORE THE AUTHORITIES BELOW IN THE QUANTUM PROCEEDINGS. THE P RESUMPTION RAISED EVEN IN THE EXPLANATION 1 CAN BE REBUTTED BY FURNIS HING SUCH EVIDENCE WHICH THE ASSESSEE MAY RELY TO PROVE ITS BONAFIDE B ELIEF OR HE MAY RELY UPON THE SAME MATERIAL TO PROVE THAT AT THE TIME OF FILING OF RETURN, THE - 14 - ASSESSEE ENTERTAINED A BONAFIDE BELIEF FOR MAKING A NY CLAIM FOR DEDUCTION OUT OF HIS INCOME. 10. FROM THE PERUSAL OF THESE DOCUMENTS FURNISHED BY THE LD. COUNSEL, IT IS SEEN THAT ENTIRE CONTEXT OF ASSESSEE S EXPLANATION ON BONAFIDE BELIEF GETS A DIFFERENT COLOUR ALTOGETHER. WHETHER THESE DOCUMENTS PROVE THE ASSESSEES BONAFIDE BELIEF OR N OT, WE ARE NOT EXPRESSING ANY OPINION. SINCE THESE DOCUMENTS WERE NOT AVAILABLE WITH THE AUTHORITIES BELOW, WE ARE OF THE CONSIDERED OPI NION THAT IN THE INTEREST OF JUSTICE, ENTIRE MATTER OF PENALTY SHOU LD BE REMANDED BACK TO THE FILE OF AO TO CONSIDER THESE DOCUMENTS FROM THE ANGLE, THAT WHETHER THE ASSESSEE HAD ANY BONAFIDE BELIEF FOR CLAIMING S UCH A DEDUCTION U/S 80IB(10) AT THE TIME OF FILING OF RETURN OF INCOME OR NOT. WITHOUT ENTERING INTO THE MERITS OF THE ISSUE, WE REMIT THE ENTIRE MATTER TO THE FILE OF ASSESSING OFFICER, TO BE DECIDED AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE AND EFFECTIVE OPPORTUNITY OF HEARI NG TO THE ASSESSEE AND TO ALLOW THE ASSESSEE TO PRODUCE SUCH EVIDENCE AS IT MAY BE DEEMED NECESSARY TO PROVE ITS CASE, THAT AT THE TIME OF FI LING OF RETURN OF INCOME IT HAD BONAFIDE BELIEF OF CLAIMING SUCH DEDUCTION. ACCORDINGLY THE - 15 - GROUNDS RAISED BY THE ASSESSEE ARE TREATED AS ALLOW ED FOR STATISTICAL PURPOSES. 11. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 21/02/2014 SD/- SD/- ( B.R. BASKARAN ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 21 /02/2014 SKS SR. P.S COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI