Sanjiv Park Co.Op.Hsg.Soc.Ltd., Ahmedabad V. The Income tax Officer,Ward-10(4), Ahmedabad

ITA 554/AHD/2010

• Counselvise Citation: 55420514 RSA 2010
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-09-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 18-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: PARESH S SHAH
• Keywords: Bonafide belief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH SANJIV PARK CO. OP. HSG. SOC. LTD MEGHDOOT B/H. FADIA CHAMBER OPP. BEHRA MOONGA SCHOOL, ASHRAM ROAD, AHMEDABAD PAN: AABBS0313C (APPELLANT) VS THE INCOME TAX OFFICER, WARD-10(4), SURAT (RESPONDENT) ASSESSEE BY: SRI PARESH S. SHAH, A.R . REVENUE BY: SRI B.L. YADAV, SR .D.R. DATE OF HEARING : 16-09-2013 DATE OF PRONOUNCEMENT : 16-09-20 13 / ORDER PER : B.P. JAIN, ACCOUNTANT MEMBER:- THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LD. CIT(A)-XVI AHMEDABAD DATED 23-11-2009 FOR THE ASSESSMENT YEAR 2005-06. ITA NO. 554/AHD/2010 ASSESSMENT YEAR 2005-06 I.T.A NO. 554/AHD/2010 A.Y. 2005-06 PAGE NO SANJIV PARK CO. OP. HSG SOC LTD VS. ITO 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- YOUR APPELLANT BEING AGGRIEVED BY THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), GANDHINAGAR A GAINST PENALTY U/S. 271(1)(C) OF THE IT ACT, PRESENTS THIS APPEAL AGAINST THE SAME ON THE FOLLOWING AMONGST OTHER GROUNDS. 1. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING TH E PENALTY U/S. 271(1)(C) OF THE I T ACT. THE APPELLANT SUBMITS TH AT THERE IS NEITHER CONCEALMENT NOR FURNISHING OF INACCURATE PARTICULAR S OF INCOME. THE APPELLANT CLAIMED THE DEDUCTION U/S. 80P(2)(E) OF T HE I.T. ACT. SAME DEDUCTION WAS ALLOWED IN IMMEDIATELY PRECEDING YEAR . WE HAD BONAFIDE BELIEF THAT THE DEDUCTION IS AVAILABLE TO US, AS IT WAS ALLOWED. IT IS THEREFORE SUBMITTED THAT THE PENALTY MAY KIND LY BE CANCELLED. 2. THE ORDER PASSED BY THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS) IS BAD IN LAW AND CONTRARY TO THE PROVISI ONS OF LAW AND FACTS. IT IS SUBMITTED THAT THE SAME BE HELD SO. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A C O-OPERATIVE HOUSING SOCIETY. THE ASSESSEE CLAIMED DEDUCTION OF RS. 2,1 8,285/- U/S 80P(2)(E) OF THE RENTAL INCOME FROM UNIQUE SALES AGENCY AND M/S. REDINGTON (INDIA) LTD. AS PER THE AGREEMENT THE PREMISES WAS TO BE U SED FOR GODOWN PURPOSES. IN THE ASSESSMENT ORDER PASSED U/S. 143(3 ) THE ASSESSING OFFICER DID NOT ALLOW THE DEDUCTION U/S. 80P(2) ON THE GROU ND THAT THE ASSESSEE IS A CO OPERATIVE HOUSING SOCIETY AND LETTING OUT OF ITS PREMISES WOULD NOT AMOUNT TO LETTING OUT OF GODOWN WITHIN THE MEANING OF SECTION 80P(2). THE APPEAL OF THE ASSESSEE WAS DISMISSED BOTH BY THE CI T(A) & BY THE ITAT A'BAD ON THE GROUND THAT MERELY A RESIDENTIAL PREMI SES IS LET OUT BY THE ASSESSEE TO A THIRD PARTY & THE THIRD PARTY HAS USE D THE SAME AS ITS GODOWN, THAT DOES NOT MEAN THE PREMISES WAS A GODOWN WITHIN THE MEANING OF SEC 80P(2)(E). THE ASSESSING OFFICER THEN PROCEEDED W ITH THE LEVY OF PENALTY I.T.A NO. 554/AHD/2010 A.Y. 2005-06 PAGE NO SANJIV PARK CO. OP. HSG SOC LTD VS. ITO 3 ON THE ADDITION OF RS. 2,18,285/- . MINIMUM PENALTY OF RS. 62,485/- U/S. 271 (1)(C) WAS LEVIED BY HIM. 4. LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE CONFIRMED THE ACTION OF AO. 5. LD. COUNSEL FOR THE ASSESSEE, SRI PARESH S SHAH ARGUED THAT THE PROPERTY RENTED OUT WAS A COMMERCIAL PROPERTY FOR R ENTING THE WAREHOUSE WHICH IS AVAILABLE ON LEASE AGREEMENT PLACED AT PA PER BOOK PAGE NO. 228 IN CLAUSE A OF THIS AGREEMENT. IT WAS SPECIFICALLY ME NTIONED IN THE SAID AGREEMENT THAT THE SAID LEASED PREMISES SHALL NOT B E USED FOR ANY OTHER PURPOSES OTHER THAN WAREHOUSING OPERATION OF THE LE SSEE. HE FURTHER ARGUED THAT THE SAID PREMISES WERE LET OUT AS GODOWN WHICH AT THE SAME TIME IS USED BY THE LESSER AS A GODOWN FOR STORAGE OF GOODS FOR MARKETING OF COMMODITIES WHICH QUALIFIED FOR DEDUCTION U/S. 80P(2)(E) OF THE INCOME TAX ACT. THE SAID FACTS ARE AVAILABLE AS LEASE AGREEMENT BILL M/ S UNIQUE SALES AGENCY AND REDINTON INDIA WHICH WERE AVAILABLE BEFORE BOTH THE AUTHORITIES BELOW. THERE IS NO CONCEALMENT OF FACT AND NO FURNISHING O F INACCURATE PARTICULARS OF ANY INCOME. ALSO THERE IS NO MALAFIDE INTENTION OF WHATSOEVER KIND. HE FURTHER ARGUED THAT THE ASSESSEE HAS SUBMITTED THE EXPLANATION AND HAS CLAIMED DEDUCTION BONAFIDELY. LEARNED COUNSEL FOR THE ASSESSEE DISTINGUISHED THE DECISION RELIED BY THE LD. CIT(A) . THE PRESENT PROPERTY WAS A COMMERCIAL PROPERTY AND NOT AS A RESIDENTIAL PROPERTY WHICH HAS BEEN LEASED OUT AS A GODOWON BY THE ASSESSEE LESSER WHIC H IN THE SAME FORM HAS BEEN USED AS A GODOWN FOR STORAGE OF GOODS FOR MARK ETING OF COMMODITIES. 6. LD. DR ON THE OTHER HAND RELIED UPON THE ORDERS OF AUTHORITIES BELOW. I.T.A NO. 554/AHD/2010 A.Y. 2005-06 PAGE NO SANJIV PARK CO. OP. HSG SOC LTD VS. ITO 4 7. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE FACTS OF THE CASE. IN THE PRESENT CASE, THE ADDITION HAS BEEN CONFIRMED B Y THE ITAT IS NOT UNDER DISPUTE. AS PER PROVISIONS OF SECTION 271(1)(C) OF THE ACT, MAINLY IT HAS TO BE SEEN WHETHER THE ASSESSEE HAS CONCEALED OF THE I NCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME OR HAS FAILED TO OFFER AN EXPLANATION OR THE EXPLANATION OFFERED IS FALSE OR WHETHER THE EXP LANATION MADE IS BONAFIDE. THE ASSESSEE DURING THE PENALTY PROCEEDINGS HAS SUB MITTED THAT THE EXPLANATION THAT THE PREMISES ARE COMMERCIAL AND HA S BEEN LET OUT AS GODOWN AS A LESSER TO THE LESSEE FOR THE USE AS A G ODOWN FOR STORAGE OF GOODS FOR MARKETING OF COMMODITIES. AS FAR AS LETTING OU T OF THE PREMISES AND THE USE OF THE SAME AS A GODOWN FOR STORAGE OF GOODS FO R MARKETING OF COMMODITIES HAS NOT BEEN DISPUTED, THE ASSESSEE HAS SUBMITTED THE EXPLANATION AND NO PARTICULARS HAS BEEN CONCEALED T HEREIN. THE MAIN OBJECTION OF THE LD. CIT(A) IN PARA 4 OF HIS ORDER IS THAT THE RESIDENTIAL PREMISES ARE FOR USE AS A GODOWN. THE ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACTS AND HAS NOT CONCEALED ANY PARTICULAR S OF INCOME. THE CASES RELIED UPON BY THE LD. CIT(A) ARE NOT APPLICABLE, S INCE THE ASSESSEE HAS OFFERED THE EXPLANATION ACCORDING TO ME IS SATISFAC TORY AND BONAFIDE. DECISION OF ITAT MUMBAI BENCH IN THE CASE OF CIT VS . SUPREME INDUSTRIES REPORTED IN 122 IIJ 56 RELIED BY THE LD. CIT(A) IS NOT APPLICABLE FOR THE REASONS THAT IN THAT CASE THE ASSESSEE HAS WRONGLY BROUGHT FORWARD INVESTMENTS ALLOWANCE AFTER EXPIRY OF 8 YEARS IN VI OLATION OF THE PROVISIONS OF SECTION 32A(6) AND 72A(1) WHEREAS IN THE PRESENT CASE THERE IS NO CONCEALMENT OF SUCH TYPE. AS REGARDS THE DECISION IN THE CASE OF UDAIPUR SAHAKARI UPABHOKTA THOK BHANDAR LTD REPORTED IN 315 ITR 21 (SUPREME COURT), I AM OF THE VIEW THAT THE SAID DECISION ALS O CANNOT BE MADE I.T.A NO. 554/AHD/2010 A.Y. 2005-06 PAGE NO SANJIV PARK CO. OP. HSG SOC LTD VS. ITO 5 APPLICABLE IN THE PRESENT CASE FOR THE REASONS MENT IONED HEREINABOVE. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, WE FIND NO CON CEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND ACCORDINGLY LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY A .O.. THE SAME IS THEREFORE DIRECTED TO BE DELETED. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER IS PRONOUNCED IN OPEN COURT ON 16-09-201 3 SD/- ( B. P. JAIN) ACCOUNTANT MEMBER AHMEDABAD : DATED 16/09/2013 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,