The ACIT, 1(2), Bhopal V. M/s. Fortune Builders, Bhopal

ITA 591/IND/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99031 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO.591/ IND/2013 A.Y. : 2006-07 ACIT(CENTRAL) M/S. FORTUNE BUILDERS, BHOPAL VS BHOPAL. APPELLANT RESPONDENT P.A.N. NO A AAFF9074H APPELLANT BY SHRI RAHUL RAMAN, DR RESPONDENT BY NONE. DATE OF HEARING : 05 .08.2015 DATE OF PRONOUNCEMENT : 30 .09.2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A), BILASPUR, CAMP AT BHOPAL, DATED 06.08.20 13 FOR THE ASSESSMENT YEAR 2006-07. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUND :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN CANCELLING THE PEN ALTY OF RS. 8,00,000/- LEVIED BY THE ASSESSING OFFICER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AS FURNISHED ITS RETURN OF INCOME DECLARING INCOME AT NIL ON 31.10.2006 AFTER CLAIMING DEDUCTION U/S 80IB(10) OF THE INCOME-TAX ACT, 1961, OF RS. 23,04,302/-. THE AO OB SERVED THAT THE ASSESSEE DID NOT FULFILL CONDITIONS LAID D OWN U/S 80IB(10) AND FOR SUCH FAILURE OF THE ASSESSEE, HE D ISALLOWED THE DEDUCTION. THE LD. CIT(A)-I, BHOPAL, CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THEREAF TER, AFTER -: 3: - 3 ISSUING SHOW CAUSE NOTICE TO THE ASSESSEE, THE AO L EVIED MINIMUM PENALTY OF RS. 8 LACS U/S 271(1)(C) OF THE ACT OBSERVING THAT THE ASSESSEE HAD FILED INACCURATE PA RTICULARS OF INCOME IN THE RETURN. DURING THE APPELLATE PROCEEDI NGS, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE PREFERRED AN APPEAL AGAINST THE APPELLATE ORDER OF LD. CIT(APPEALS)-1, BHOPAL AND HON'BLE ITA T, INDORE BENCH, INDORE ALLOWED THE APPEAL IN ITA NO.513/1ND/ 2010 DATED 21.11.2011. THUS, AS PER THE ORDER OF THE HON 'BLE ITAT, THE DEDUCTION U/S 80IB(10) STANDS ALLOWED TO THE AS SESSEE FOR ASSESSMENT YEAR 2006-07. SINCE, THE DISALLOWANCE MA DE BY THE AO OF DEDUCTION U/S 80IB(10) ON WHICH PENALTY W AS LEVIED HAS BEEN DELETED BY THE HON'BLE ITA T, NOW THERE REMAINS NO GROUND FOR PENALTY LEVIED U/S 271(1)(C) AND THE SAM E THEREFORE MAY PLEASE BE DELETED. 4. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) CANCELLED THE PENALTY BY OBSERVING AS UNDER :- I HAVE CAREFULLY CONSIDERED SUBMISSION OF THE APP ELLANT AND FACTS OF THE CASE. THE AO HAS LEVIED PENALTY U/ S 271 -: 4: - 4 (1 )(C) FOR A.YS.2006- 07 ON THE BASIS OF DISALLOWA NCE OF CLAIM OF DEDUCTION U/S 801B(1 0) OF RS. 23,04,302/- . IN THE APPEAL FILED BY THE APPELLANT, THE HON'BLE ITAT , INDORE BENCH, INDORE IN ITA NO.513/LND/2010 FOR A.Y.2006-0 7 DATED 21.11.2011 HAS ALLOWED THE DEDUCTION U/S 80IB (10) AS CLAIMED BY THE APPELLANT IN ITS RETURN OF INCOME FOR A.Y.2006-07. THE RELEVANT CONCLUDING PORTION OF THE ORDER OF HON'BLE ITAT IS REPRODUCED AS UNDER: 'IN VIEW OF THE ABOVE DISCUSSION, IT IS CLEAR THAT EACH INDIVIDUAL UNIT CONSTRUCTED AND SOLD BY THE ASSESSE E WAS BELOW 1500 SQ.FT. AFTER EXCLUSION OF THE COMMERCIAL AREA AND THE COMPLETION OF THE PROJECT WAS WITHIN THE STATUTORY PERIOD PRESCRIBED UNDER AC T AS MENTIONED IN THE CERTIFICATE ISSUED BY THE COMPETENT AUTHORITY. CONSEQUENTLY, THERE IS MERIT I N THE APPEAL OF THE ASSESSEE AND THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT, THEREFORE, THESE APPEALS ARE ALLOWED. ' FROM THE ABOVE, IT IS CLEAR THAT THE BASIS ON WHICH PENALTY -: 5: - 5 U/S 271 (1 )(C) WAS LEVIED I.E. DISALLOWANCE OF DED UCTION U/S 8018(10) HAS ITSELF BEEN DELETED BY THE HON'BLE ITAT, THEREFORE, THE PENALTY CANNOT STAND BY ITSELF AND, THUS, THE SAME IS LIABLE TO BE CANCELLED. IN THIS REGARD, REF ERENCE IS MADE TO THE OBSERVATION OF HON'BLE APEX COURT IN TH E CASE OF K.C.BUILDERS VS. ACIT REPORTED IN 265 ITR 562 WH EREIN THE HON'BLE COURT HAS OBSERVED AS UNDER: WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER, ON THE BASIS OF WHICH, PENALTY FOR CONCEALMENT WAS LEVIED, ARE DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY FOR CONCEALMENT AND, THEREFORE, IN SUCH A CASE NO SUCH PENALTY CAN SURVIVE AND THE SAME IS LIABLE TO BE CANCELLED AS IN THE INSTANT CASE. ORDINARILY, THE PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. WHERE AN ORDER OF ASSESSMENT OR REASSESSMENT ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED ON THE ASSESSEE HAS ITSELF BEEN FINALLY SET ASIDE OR CANCELLED BYTE HE TRIBUNAL OR OTHERWISE, THE PENALTY CANNOT STAND BY ITSELF AN D -: 6: - 6 THE SAME IS LIABLE TO BE CANCELLED AS IN THE INSTANT CASE ORDERED BY THE TRIBUNAL AND LATER CANCELLATION OF PENALTY BY THE AUTHORITIES [PARA 14].' ALSO RELIANCE IS PLACED IN THE DECISION OF THE HON' BLE HIGH COURTS IN THE CASE OF CIT V. BAHRI BROS (P) LT D [1987] 167 ITR 880 (PAT.), CIT V. BHAGWAN LTD. [1987] 68 I TR 846 (CAL), CIT V.BENGAL JUTE MILLS CO.LTD [1988] 17 4 ITR 402 (CAL), CIT V.MADANLAL SOHANLAL [1989]176 ITR 18 9 (CAJ,), CIT V.BEDI & CO.(P) LTD. [1990] 183 ITR 9 ( KAR.), CIT V. AGARWALLA BROS. [1991] 189 ITR 786 (PAT.), A DDL CIT V.BADRI PRASAD KASHI PRASAD [1993] 200 ITR 206 (AIL), CIT V. ROY DURLABHJI [1995] 211 ITR 470 (RAJ .) IN VIEW OF THE ABOVE, SINCE THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80IB(10) MADE BY T HE AO ON THE BASIS OF WHICH THE PENALTY HAS BEEN LEVIE D IS DELETED BY THE HON'BLE ITAT, THERE REMAINS NO BASIS FOR IMPOSITION OF PENALTY AND SINCE THE PENALTY CANNOT BE STAND BY ITSELF, THEREFORE, THE SAME IS CANCELLED. 5. NOBODY APPEARED ON BEHALF OF THE ASSESSEE. 6. WE HAVE HEARD THE LD. DR AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE FINDING RECORDED BY THE I.T.A.T. INDORE BENCH. SINC E THE -: 7: - 7 ADDITION ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/ S 80IB MADE BY THE ASSESSING OFFICER ON THE BASIS OF WHICH THE PENALTY HAS BEEN LEVIED IS DELETED BY THE I.T.A.T. INDORE BENCH, THERE REMAINS NO BASIS FOR IMPOSITION OF PENALTY AN D SINCE THE PENALTY CANNOT STAND BY ITSELF, THE SAME IS CANCELL ED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 30 TH SEPTEMBER, 2015. CPU* 8