ITO WD 2(3), MUMBAI V. PARADISE HOME MAKER, ULHASNAGAR

ITA 5220/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75558 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 08-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Keywords: Loose papers; Tax effect
• Section: 132

Judgement Text

1 ITA NO.5220/M/11 IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.5220/M/11 ASSESSMENT YEAR:2008 - 09 INCOME TAX OFFICER, WARD - 2(3), 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN(W) - 421301 VS. M/S PARADISE HOME MAKER, GROUND FLOOR, AMIT ASHIANA, NR. GOAL M AIDAN, ULHASNAGAR - 421002 PAN: AA GFP8733P (APPELLANT) (RESPONDENT) REVENUE BY : SHRI A.C. TEJPAL ASSESSEE BY : SHRI VIJAY MEHTA DATE OF HEARING : 06.02.2014 DATE OF PRONOUNCEMENT : 12.02.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) DATED 31.3.2011 . 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL : - 1 ) ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LEARNED CIT(A) - I, THANE ERRED IN DELETING THE ADDITION OF RS. 1,00,60,000/ - BEING CASH COMPONENT RECEIVED BY THE ASSESSEE ON SALE OF PARKING SLOTS AND SERVANT QUARTERS. 2) ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) - I, THANE ERRED IN HOLDING THAT THE REC EIPT OF CASH COMPONENT BY THE ASSESSEE HAS BEEN MADE ON MERE PRESUMPTION & ASSUMPTION AND WITHOUT ANY CORROBORATIVE EVIDENCE. 2 ITA NO.5220/M/11 3) ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) - I, THANE ERRED IN NOT APPRECIATING THE FACT THAT THE DOCUMENT IMPOUNDED FROM THE ASSESSEES OWN PREMISES CLEARLY INDICATES CASH COMPONENT IN THE SALE OF PARKING SLOTS AND SERVANT QUARTERS. 4) ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) - I, THANE ERRED IN HOLDING THAT INCO ME OF RS. 1,00,60,000/ - IS ELIGIBLE FOR DEDUCTION U/S 801B( 10), WITHOUT APPRECIATING THE FACT THAT THIS INCOME IS EARNED FROM SALE OF PARKING SLOTS AND SERVANT QUARTERS AND NOT FROM SALE OF RESIDENTIAL UNITS AS SUCH THE SAID INCOME IS NOT ELIGIBLE FOR DEDUCTION U/S 801B(10) OF THE I.T. ACT., 1961. 5) THE APPELLANT PRAYS THAT THE ORDER OF THE LEARNED CIT(A) - I, THANE, BE CANCELED AND THAT OF THE A.O. BE RESTORED. 3 . THE BRIEF FACT S OF THE CASE ARE THAT THE PREMISES OF THE ASSESSEE FIRM WAS SEARCHED UNDER SECTION 132 OF THE INCOME TAX ACT. NO ADDITIONAL INCOME HOWEVER WAS DISCLOSED BY THE ASSESSEE. IN RESPONSE TO NOTICE U/S 153A, A RETURN WAS FILED DECLARING NIL INCOME. THE AO NOTICED FROM THE LOOSE PAPERS FOUND DURING THE SURVEY THAT THE ASSESSEE HAD RECEIVED AN ADDITIONAL CASH FROM THE SALE OF SERVANT ROOM, CAR PARKING AND STILT PARKING TOTALING RS.1 ,00,60000 / - WHICH THE ASSESSEE HAD NOT ACCOUNTED IN ITS BOOKS OF ACCOUNTS. THE ASSESSEE , HOWEVER, DENIED THE RECEIPT OF ANY SUCH ADDITIONAL INCOME , HOWEVER CLAIMED THE DEDUCTION OF THE ABOVE AMOUNT @ 100% OF THE PROFITS U/S 80IB(10). AFTER HEARING THE ASSESSEE, THE AO COMPLETED THE ASSESSMENT DETERMINING THE INCOME OF THE ASSESSEE AT RS. 1,06,20,700/ - DENYING THE DEDUCTION OF RS.10060000/ - CLA IMED BY THE ASSESSEE U/S 80IB(10). 4 . ON APPEAL, THE LD. CIT(A) HELD THAT THE ABOVE MENTIONED ADDITION WAS MADE BY THE AO ON THE BASIS OF MERE ASSUMPTIONS AND PRESUMPTIONS WITHOUT ANYCORROBORATIVE EVIDENCE. EVEN ASSUMING THAT SUCH ON - MONEY WAS RECEIVED BY THE ASSESSEE, STILL THE SAME WAS ELIGIBLE FOR DEDUCTION U/S 80IB(10). HE THEREFORE DELETED THE ADDITION SO MADE BY THE AO. THE REVENUE IS THUS IN APPEAL BEFORE US. 3 ITA NO.5220/M/11 5 . BEFORE US, THE LD. D.R. HAS RELIED ON T HE GROUND S OF APPEAL AND SUPPORTED THE ORDER OF AO. 6. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT THE SERVANT ROOM, CAR PARKING ETC. WERE PART OF THE HOUSING PROJECT AND THE SAME WERE SOLD TO THE PURCHASERS OF THE HOUSES AND NOT TO THIRD P ARTIES. EVEN ASSUMING FOR THE SAKE OF ARGUMENTS,( WITHOUT ADMITTING ) THAT THE ASSESSEE MIGHT HAVE RECEIVED THE EXTRA CONSIDERATION FOR CAR PARKING ETC. STILL BEING THE PART OF THE HOUSING PROJECT WAS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. HE HAS FURTHER SUBMITTED THAT IF THE GROUND NO. 4 OF THE APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE, THEN THE GROUNDS NO. 1 TO 3 OF THE APPEAL WOULD BE RENDERED INFRUCTUOUS. 7 . WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PARTIES AND HAVE ALSO GONE THROUGH THE R ECORD. 8. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE AO HAS DISALLOWED ONLY THE ALLEGED CASH COMPONENT OF THE CONSIDERATION ALLEGEDLY RECEIVED BY THE ASSESSEE FROM THE SALE OF SERVANT ROOM, PARKING SLOTS ETC. HE HOWEVER ALLOWED THE DEDUCTION WHICH ACCORDING TO HIM WAS RECEIVED BY THE ASSESSEE THROUGH CHEQUE S ETC. FROM THE SALE OF SUCH SERVANT ROOMS AND PARKING SLOTS ETC. HE HAS EVEN ALLOWED THE DEDUCTION OF AMOUNT OF RS.2075000/ - WHICH THE ASSESSEE RECEIVED IN CASH BUT WAS SHOWN IN THE BOOKS OF THE ACCOUNTS. SO THE AO HAS NOT DISPUTED THE FACT THAT THE SERVANT ROOM AND PARKING SLOT ETC. WERE INTEGRAL PART OF THE HOUSING PROJECT UNDERTAKEN BY THE ASSESSEE. THERE IS ALSO NO DISPUTE AS TO THE PROVISIONS OF LAW THAT UNDER SECTION 80IB(10 ) OF THE ACT, TH E SAID HOUSING PROJECT WAS ELIGIBLE FOR 100% DEDUCTION OF PROFITS EARNED FROM THE SAID PROJECT. SO EVEN ASSUMING THAT THE ALLEGED SALE CONSIDERATION WAS RECEIVED BYTHE ASSESSEE IN CASH AND HAD NOT BEEN SHOWN BY THE ASSESSEE IN ITS BOOKS OF THE ACCOUNT, STILL THE FACT REMAINS THAT SUCH A 4 ITA NO.5220/M/11 PROFIT WOULD BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THERE WOULD HAVE BEEN NO TAX EFFECT, SO FAR THE ASSESSEE IS CONCERNED, EVEN IF, THE SAID AMOUNT WAS ACCOUNTED IN THE BOOKS OF THE ASSESSEE. IT IS NOT THE CASE OF THE AO THAT SUCH AN INCOME WAS NOT RECEIVED FROM THE SALE OF HOUSING PROJECT OR THE SAME WOULD NOT HAVE BEEN ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT , EVEN IF , SHOWN IN THE BOOKS OF THE ASSESSEE . ONCE IT I S HELD THAT SUCH AN INCOME WAS ELIGIBLE FOR DEDUCTION, THEN THERE REMAINS NO CASE FOR TAXING THE SAME. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) DELETING THE ADDITION SO MADE BY THE AO ON THIS GROUND. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF FEBRUARY, 2014. SD/ - SD/ - ( N.K.SAINI ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 12. 02.2014 PKM COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR H BENCH //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI.