ITO WD 21(2)(4), MUMBAI V. VITHALNAGAR CO- OPERATIVE HSG. SOCIETY, MUMBAI

ITA 5887/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8704 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 18-01-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 05-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABAMNI KANTA NAYAK
• Keywords: Earning of tax free income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, F, MUMBAI BEFORE SHRI S V MEHROTRA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 5887/MUM/2009 (ASSESSMENT YEAR 2002-03) INCOME TAX OFFICER WARD 21(2)(4), PRATYAKSHA KAR BHAVAN, 503, C-10, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051 . APPELLANT VS THE VITHALNAGAR CO-OPERATIVE HOUSING SOCIETY, PLOT NO.51, 2 ND FL, JAI HIND CLUB, N S ROAD NO.11, JVPD SCHEME, VILE PARLE (W), MUMBAI-400056 RESPONDENT APPELLANT BY : SHRI ABAMNI KANTA NAYAK RESPONDENT BY : SHRI SHALIN S DIVAT IA O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE REVENUE DIRECTED AGAINST THE ORD ER DATED 17.08.2009 OF THE CIT(A) ARISING FROM THE PE NALTY ORDER PASSED U/S 271(1)( C ) FOR THE ASSESSMENT YEAR 2002 -03. ITA NO. 5887/MUM/2009 (ASSESSMENT YEAR 2002-03) 2 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: 1) (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.4,66,704 LEVIED BY THE AO U/S 271(1)( C ) OF THE IT ACT, 1961; (II) BY DELETING THE PENALTY LEVIED U/S 271(1)( C ) , THE CIT(A) HAS ERRED ON THE GROUNDS THAT ONCE THE SUBSTANTIATIE ADDITION HAS BEEN ANALYZED AND CONFIRMED BY THE APPELLATE AUTHORITY, IT AUTOMATICA LLY LEADS TO THE CONCLUSION OF THE CONCEALMENT OF INCOM E OR FILING OF THE INACCURATE PARTICULARS OF INCOME DEPENDING UPON THE FACTS OF THE CASE 2. WE HAVE HEARD THE LEARNED DR AS WELL AS THE LEAR NED AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT RECORD. WE FIND THAT WHILE COMPLETING THE ASSESSMENT U/S 143(3) ON 24.3.2005, THE AO MADE THE FOLLOWING ADDITIONS TO THE TOTAL I NCOME OF THE ASSESSEE (A) IN RESPECT OF REFUNDABLE DEPOSITS FOR CONSTRUCTION BY MEMBERS USING TDR RS.20,16,400/- AND (B) IN RESPECT OF REFUNDABLE DEPOSITS RECEIVED BY THE SOCIETY ON TRANSFER OF PLOTS OF RS.30,52,760/- 3. ON APPEAL, THE CIT(A) DELETED THE ADDITION WITH REGARD TO THE REFUNDABLE DEPOSITS FOR CONSTRUCTION BY THE MEM BERS USING THE TDR OF RS.20,16,400/-. ACCORDINGLY, THE AO L EVIED THE PENALTY OF RS.4,66,704/- VIDE ORDER DATED 30.3.200 7 UNDER ITA NO. 5887/MUM/2009 (ASSESSMENT YEAR 2002-03) 3 SECTION 271(1)( C ) OF THE ACT IN RESPECT OF THE R EFUNDABLE DEPOSIT RECEIVED FROM THE TRANSFER OF FLATS. 4. ON APPEAL, THE CIT(A) HAS DELETED THE PENALTY BY HOLDING AS UNDER : 3.3 I HAVE CAREFULLY CONSIDERED THE ISSUE. THERE IS NO DENYING THE FACT THAT THE ISSUE OF TAXABILITY OF THE TRANSFER FEES AND REFUNDABLE DEPOSITS RECEIVED BY T HE SOCIETY FROM ITS MEMBERS ON THE OCCASION OF TRANSFE R OF PLOTS/FLATS HAS BEEN A CONTENTIONS ISSUE AND PENDING BEFORE VARIOUS COURTS IN THE CASE OF INNUMERABLE SOCIETIES. THEREFORE, THE CLAIM MADE BY THE APPELLANT HIDDEN ANY BASIC FACTS WHICH AMOUNTS TO FILING OF INACCURATE PARTICULARS OF INCOME. ACCORDI NGLY, IT IS HELD THAT PENALTY U/S 271(1)( C ) IS NOT LEV IABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE AO IS DIRECTED TO DELETE THE PENALTY OF RS.4,66,704 LEVI ED U/S 271(1)( C) OF THE IT ACT 5. SINCE THE ISSUE OF TRANSFER OF FEES RECEIVED FRO M THE MEMBERS OF THE SOCIETY IS A DEBATABLE ISSUE AND AS PER THE DECISION OF THE HONOURABLE JURISDICTIONAL HIGH COU RT IN THE CASE OF NEW SINDH CO-OPERATIVE HOUSING SOCIETY REPO RTED IN 317 ITR 47 CANNOT BE TREATED AS INCOME OF THE CO-O PERATIVE HOUSING SOCIETY, THOUGH WITH CERTAIN RIDERS. SINCE THE ISSUE IS DEBATABLE ISSUE AND ASSESSEE HAS CLAIMED THE SAME A S EXEMPT INCOME WHICH DOES NOT AMOUNT TO CONCEALMENT OF THE INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME WHEN THE PRIMARY FACTS WERE DISCLOSED BY THE ASSESSEE. THE ASSESSEE ALSO RELIED UPON THE DECISIONS OF THE HONBLE SUPRE ME COURT IN ITA NO. 5887/MUM/2009 (ASSESSMENT YEAR 2002-03) 4 THE CASE OF CIT V/S RELIANCE PETROPRODUCTS PVT.LT D REPORTED IN 322 ITR 158(SC). THEREFORE, IN VIEW OF THE DECI SION OF THE HON. SUPREME COURT IN THE CASE OF CIT V/S RELIANCE PETROPRODUCTS PVT LTD , WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LEARNED CIT(A) AND ACCORDINGLY, WE CONFIRM THE SAME. 6. IN THE RESULT, APPEAL OF THE REVENUE STANDS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.01.2011 SD SD (S V MEHROTRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI, DATED 28TH JAN 2011 SRL:18111 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI