The ACIT, 1(2), Indore V. M/s. NAVRATAN TECHBUILD PVT. LTD., Indore

ITA 597/IND/2014

• Counselvise Citation: 59722714 RSA 2014
• Duration Of Justice: 1 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 18-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV VARSHNEY
• Assessee Lawyers: ASHVIN KUMAR
• Keywords: Bonafide belief; Wrong claim; Difference of opinion
• Section: 115JB; 80IB; 32

Judgement Text

ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 597/IND/2014 A.Y.2008-09 ASSTT. COMMR. OF INCOME TAX 1(2) INDORE ::: APPELLANT VS M/S NAVRATAN TECHBUILD PVT.LTD. INDORE PAN AACCN 0937-A ::: RESPONDENT APPELLANT BY SHRI RAJIV VARSHN EY RESPONDENT BY SHRI ASHVIN KUMAR DATE OF HEARING 9 .9.2015 DATE OF PRONOUNCEMENT 6 . 1 0 .2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE REVENUE EMANATES FROM THE ORDER OF THE LEARNED CIT(A)-I, INDORE, DATED 6.6. 2014. ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 2 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT AND CONSTRUCT ION OF RESIDENTIAL AND HOUSING PROJECTS. THE RETURN OF INCOM E WAS FILED ON 29 TH SEPTEMBER, 2008 DECLARING INCOME AT NIL AFTER CLAIMING DEDUCTION U/S 80IB(10) OF THE INCOME TAX A CT AT RS.13,37,31,420/- IN RESPECT OF THE INCOME DERIVED FROM THE PROJECT OMAX CITY INDORE AT VILLAGE MAYAKHEDI, IND ORE. THE ASSESSEE PAID TAX U/S 115JB ON BOOK PROFIT OFRS.13,37,33,960/-. THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE INCOME T AX ACT AND THE ASSESSEE COULD NOT GET RELIEF ON THIS ISSUE U P TO THE HON'BLE JURISDICTIONAL HIGH COURT AND THE SLP FILED BEFORE THE HON'BLE SUPREEME COURT IS PENDING. THE ASSESSIN G OFFICER LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT EQUAL TO 200% OF THE TAX ALLEGEDLY SOUGHT TO BE EVADED BY THE ASSESSEE AT RS. 8,02,40,376/- VIDE ITS ORDER DATED 19.2.2014. THE ASSESSEE PREFERRED APPEAL AND THE LEARN ED ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 3 CIT(A) VIDE ITS ORDER DATED 6.6.2014 DELETED THE PEN ALTY. NOW THE REVENUE IS IN APPEAL BEFORE US AGAINST DELETION OF PENALTY U/S 271(1)(C) OF THE ACT. 3. THE LEARNED CIT(A) GRANTED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER :- 4. I HAVE SEEN THE PENALTY ORDER, THE GROUNDS OF APPEAL AND SUBMISSIONS OF APPELLANT. 5. THE APPELLANT IS A DEVELOPER OF HOUSING PROJECT AND IS ENGAGED IN DEVELOPING AN INTEGRATED TOWNSHIP AT BYE PASS OF INDORE IN THE NAME OF OMAXE CITY. THOUGH APPELLANT HAS GOT APPROVAL FOR DEVELOPMENT OF HOSING PROJECT. HOWEVER DURING THE YEAR UNDER CONSIDERATION, APPELLANT HAS ONLY ACQUIRED LAND AND EVEN DEVELOPMENT OF LAND WAS NOT DONE BY APPELLANT, AS IT WAS RESPONSIBILITY OF M/S OMAXE CONSTRUCTION LTD. HENCE AO CAME TO THE CONCLUSION THAT NEITHER ANY DEVELOPMENT OF LAND ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 4 WAS DONE BY APPELLANT, NOR ANY RESIDENTIAL UNIT WAS CONSTRUCTED DURING THE YEAR. THE ONLY SOURCE OF REVENUE WAS FROM THE SALE OF LAND PLOTS. THEREFORE AO HELD THAT THERE WAS NO DEVELOPMENT OR CONSTRUCTION OF HOUSING PROJECT BY APPELLANT DURING THE YEAR AND INCOME IS ONLY FROM SALE OF LAND PLOTS AND HE DISALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE I.T. ACT OF RS13,37,31,420/-. 6. SUCH DISALLOWANCE WAS CONFIRMED BY LD. CIT(A). THE HONBLE MEMBERS OF ITAT, INDORE IN ITA NO.547/IND/2012 DATED 30-07-2013 ALSO DISMISSED THE APPEAL FILED BY APPELLANT BY OBSERVING THAT MERE DEVELOPMENT OF INFRASTRUCTURE & DEVELOPMENT OF LAND DOES NOT AMOUNT TO CONSTRUCTION OF RESIDENTIAL UNITS, WHICH IS A SIN Q UA NON FOR CLAIM OF DEDUCTION U/S 80IB(10) OF THE I.T. ACT. HONBLE HIGH COURT OF MADHYA PRADESH IN ITA ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 5 NO.83/2013 DATED 27-01-2014 ALSO DECIDED AGAINST APPELLANT BY HOLDING THAT THE LEGAL ISSUES WERE CLEARLY UNDERSTOOD BY THE TRIBUNAL & IT IS NOT THE CASE WHERE ANY INTERPRETATION OF LAW WAS REQUIRED. 7. IN THE AFORESAID BACKGROUND THE AO INITIATED THE PENALTY PROCEEDINGS BY DULY WRITING AT THE END OF ASSESSMENT ORDER REGARDING INITIATION OF SUCH PENALTY. THE APPELLANT HAS OBJECTED TO SUCH INITIATION OF PENALTY ON THE GROUND THAT THERE WAS NO FINDING/SATISFACTION, AS REQUIRED IN LAW, TO THE EF FECT THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME. BUT THAT STAND IS NOT TRUE BECAUSE AS PER FACTS OF THE CASE, AO HAD DULY INITIATED PENALTY PROCEEDINGS AT THE CONCLUDING PART OF THE ASSESSMENT ORDER AND SINCE THERE IS ADDITION ONLY ON ONE GROUND, OBVIOUSLY PENALTY WAS INITIATED ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 6 AGAINST THAT ADDITION ONLY. WRITING OF WORDS PENALTY PROCEEDINGS INITIATED IN ASSESSMENT ORDER ARE SUFFICIENT FOR INVOKING PENAL ACTION AS HELD IN CASE OF M. SAJJANRAJ NAHAR AND ORS (MAD) 283 ITR 230 & NAINU MAL HET CHAND (ALL) 294 ITR 185. THEREFORE THERE WAS VALID INITIATION OF PENALTY IN THIS CASE. 8. SECOND ARGUMENT OF APPELLANT IS THAT THE TOTAL AMOUNT OF INCOME HAS NOT CHANGED, BECAUSE WHILE APPELLANT HAS SHOWN INCOME OF RS.13,37,31,420/- U/S 115JB, THE AO HAS ARRIVED AT SAME INCOME UNDER THE NORMAL PROVISIONS OF THE ACT. THIS ARGUMENT IS ALSO REJECTED BECAUSE WHILE APPELLANT HAS SHOWN NIL INCOME UNDER THE NORMAL PROVISIONS, SUCH INCOME UNDER NORMAL PROVISIONS IS DETERMINED AT RS.13,34,31,420/- BY THE AO. THAT IS WHY THE TAX SOUGHT TO BE EVADED AS DETERMINED UNDER THE ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 7 PROVISION OF SECTION 271(1)(C) IS NOT NIL BUT IS DETERMINED BY AO IN PENALTY ORDER AT RS.4.01 CRORES . 9. NEXT ARGUMENT OF APPELLANT THAT SUCH DETERMINATION OF TAX SOUGHT TO BE EVADED BY AO IS ERRONEOUS, AS TAX PAID BY APPELLANT U/S 115JB OF I. T. ACT AT RS.1.51 CRORE MUST BE REDUCED FROM SUCH AMOUNT, IS FOUND TO BE A JUSTIFIED CLAIM. THE OTHER ARGUMENT OF APPELLANT THAT AO HAS NOT GIVEN ANY REASON FOR LEVYING PENALTY AT THE RATE OF 200% OF TAX SOUGHT TO EVADED, IS ALSO FOUND CORRECT, AS NO REAS ON WHATSOEVER IS GIVEN BY AO TO LEVY TWICE THE AMOUNT OF MINIMUM PENALTY LEVIABLE IN THE AFORESAID CASE. 10. NOW I COME TO DISCUSS THE CRUX OF THE MATTE R. WHETHER CONDITIONS PRE-REQUISITE FOR LEVY OF PENALT Y WERE PRESENT IN THE CASE. THE CLAIM OF APPELLANT U/ S 80IB(10) OF I.T. ACT WAS DULY EXPLAINED BY APPELLAN T DURING PENALTY PROCEEDINGS FROM FACTS PECULIAR TO ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 8 APPELLANTS CASE, IN WHICH, WHILE ALL THE AUTHORITI ES UPTO HONBLE MADHYA PRADESH HIGH COURT RECORDED THE FACTS WHEREIN APPELLANT WAS HELD BEING APPROVED AS HOUSING PROJECT APPELLANT HAS IN FACT DEVELOP ED A COMPREHENSIVE HOUSING PROJECT OVER THE YEARS KNOWN AS OMAXE CITY IN INDORE, CONSISTING OF DEVELOPMENT OF PLOT OF LAND, CONSTRUCTION OF HOUSIN G UNITS, CONSTRUCTION OF COMMERCIAL UNITS ETC OVER 89 .14 ACRE LAND. BUT DURING THE YEAR UNDER CONSIDERATION APPELLANT SOLD ONLY LAND PLOTS AND WAS NOT FOUND ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80IB(10) BECAUS E IT DID NOT CONSTRUCT OR SALE ANY HOUSING UNIT. HOWEVER THIS WAS NOT A CASE OF AN APPELLANT ENGAGED ONLY IN DEVELOPMENT & SALE OF LAND PLOTS. APPELLANT HAS IN FACT CONSTRUCTED & SOLD HOUSING UNITS IN SUBSEQUENT YEARS. HONBLE ITAT, INDORE ALSO OBSERVED THAT NO PRECEDENCE COULD BE FOUND SIMILAR TO THE FACTS OF ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 9 APPELLANTS CASE. IN THESE CIRCUMSTANCES, WHEN APPELLANT WAS GOING TO CONSTRUCT A COMPREHENSIVE HOUSING PROJECT CONSISTING OF PLOTS/HOUSING UNITS/COMMERCIAL SPACES AND NO PRECEDENCE WAS AVAILABLE, IT WAS BONAFIDE & JUSTIFIED, ON THE PART OF APPELLANT TO FORM AN OPINION, THAT IN SUCH A CASE C LAIM U/S 80IB(10) COULD BE MADE, ESPECIALLY WHEN IT WAS SUPPORTED BY AUDITORS CERTIFICATE IN FORM 10CCB AS WELL AS LEGAL OPINION TAKEN BY THEM ON THIS ISSUE. HAVING MADE AN OPINION, WHICH WAS A POSSIBLE VIEW IN AFORESAID CIRCUMSTANCES & HAVING FOUGHT THAT VIE W UPTO HONBLE HIGH COURT & FURTHER READY TO FIGHT EV EN IN HONBLE SUPREME COURT MAKE IT ABSOLUTELY CLEAR THAT APPELLAN WAS UNDER BONAFIDE BELIE THAT SUCH A CLAIM WAS POSSIBLE. 4. WE HAVE HEARD BOTH THE SIDES. THE ASSESSING OFFIC ER LEVIED THE PENALTY BY HOLDING THAT THE ASSESSEE HAS ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 10 CONCEALED/FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS FAILED TO DISCLOSE ALL MATERIAL FACTS RELATING TO COMPUTATION OF TOTAL INCOME. ON THIS ISSUE, THE LEARN ED COUNSEL FOR THE ASSESSEE SUBM,ITTED THAT THE ASSESSIN G OFFICER HERSELF WAS NOT CLEAR REGARDING CHARGE AGAINST TH E ASSESSEE WHETHER PENALTY IS BEING LEVIED FOR CONCEALIN G THE INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME O R FOR NOT DISCLOSING MATERIAL FACTS. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT IT ITSELF ESTABLISHES THAT SHE HAS NOT APPLIED HER MIND RATHER PROCEEDED MECHANICALLY WHILE LEVYING THE PENALTY WHICH IS A DISCRETIONARY PROVISION. ON THIS ISSUE WE HOLD THAT THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS B Y HOLDING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND IS, THEREFORE, LIABLE FOR PEN AL CONSEQUENCES. WHILE LEVYING THE PENALTY THE ASSESSING OFFICER HAS MENTIONED THAT THE ASSESSEE HAS ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 11 CONCEALED/FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS FAILED TO DISCLOSE ALL MATERIAL FACTS AND HAS FAILED TO OFFER SATISFACTORY BONAFIDE EXPLANATION. HON'BLE DELHI H IGH COURT IN THE CASE OF MADHUSHREE GUPTA; 317 ITR 107 H ELD 19. IN THE RESULT, OUR CONCLUSION ARE AS FOLLOWS : - (I) SECTION 271(1B) OF THE ACT IS NOT VIOLATIVE OF ARTICLE 14 OF THE CONSTITUTION. (II) THE POSITION OF LAW BOTH PRE AND POST AMENDMENT IS SIMILAR IN AS MUCH THE ASSESSING OFFICER WILL HAVE TO ARRIVE AT A PRIMA FACIE SATISFACTION DURING THE COURSE OF PROCEEDINGS WITH REGARD TO THE ASSESSEE HAVING CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS, BEFORE HE INITIATES PENALTY PROCEEDINGS. ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 12 (III) PRIMA FACIE SATISFACTION OF THE ASSESSING OFFICER THAT THE CAASEMAY DESERVE THE IMPOSITION OF PENALTY SHOULD SHOULD BE DISCERNIBLE FROM THE ORDER PASSED DURING THE COURSE OF THE PROCEEDINGS. OBVIOUSLY THE ASSESSING OFFICER WOULD ARRIVE AT A DECISION, I.E. A FINAL CONCLUSION ONLY AFTER HEARING THE ASSESSEE. FURTHER, IN THE CASE OF ACIT VS. GRAND ORGANICS (SHRI ASHISH GOYAL AND SHRI N.D. PATWA) LTD.; 137 ITD 252 THE PANAJI BENCH OF THE TRIBUNAL, FOLLOWING THE DECISION OF MADHUSHREE GUPTA (SUPRA) HELD AS UNDER :- 10. THIS IS THE SETTLED LAW THAT THE PENALTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE DIFFERENT. THE PENALTY PROCEEDINGS CAN BE INITIATED ON 2 CHARGES I.E. (I) ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 13 CONCEALMENT OF PARTICULARS OF INCOME AND (II) FURNISHING OF INACCURATE PARTICULARS OF INCOME. BOTH THE CHARGES ARE ENTIRELY DIFFERENT. IF THE PROCEEDINGS ARE INITIATED ON THE CHARGE OF CONCEALMENT, THEN PENALTY CANNOT BE LEVIED ON THE CHARGE OF FURNISHING INACCURATE PARTICULARS OF INCOME AND VICE VERSA. THUS, THERE MUST BE CLEAR FINDING ABOUT CHARGE FOR WHICH PENALTY IS IMPOSED OR INITIATED. IT IS INCUMBENT UPON THE A.O. TO STATE WHETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THE ABSENCE OF SUCH FINDINGS, THE ORDER WOULD BE BAD IN LAW (EMPHASIS SUPPLIED). 5. BEFORE US, IT WAS CLAIMED BY THE LEARNED COUNSEL FO R THE ASSESSEE THAT THE ASSESSING OFFICER HAS FAILED TO P OINT OUT HOW THE ASSESSEE HAS CONCEALED THE PARTICULARS OF ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 14 INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. HE PLEADED THAT THE ASSESSEE HAS DISCLOSED ALL MATERIAL FACTS RELATING TO THE COMPUTATION OF INCOME IN THE RETURN O F INCOME ITSELF AND ALSO SUBMITTED ALL THE RELEVANT DETAI LS AT THE ASSESSMENT STAGE. IT WAS ALSO SUBMITTED THAT THE ASSESSEE FURNISHED INDEPENDENT AUDITORS REPORT IN FO RM NO. 10CCB WHICH IS THE REQUIREMENT FOR CLAIMING THE DEDUCTION. THE ASSESSEE ALSO FURNISHED APPROVED PLAN FROM THE LOCAL AUTHORITY DATED 27.5.2006 WHERE THE PRO JECT IS APPROVED AS HOUSING PROJECT. THE ASSESSEE ALSO SUBMITTED APPROVED LAY OUT PLAN OF THE HOUSING PROJEC T AND ALL THE RELEVANT REQUISITE INFORMATION AND DOCUMENTS WER E SUBMITTED DURING THE ASSESSMENT PROCEEDINGS TO ENABLE TO FULLY SCRUTINISE THE CLAIM OF THE ASSESSEE MADE UNDER SECTION 80IB(10) OF THE INCOME TAX ACT, 1961. THE ASSESSING OFFICER NOWHERE MENTIONED THAT THE ASSESSEE HAS MADE ANY FALSE CLAIM EXCEPT IN PARA 2.11 MENTIONING THAT ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 15 THE ASSESSEE HAS CLAIMED INAPPROPRIATE CLAIM UNDER SECTI ON 80IB(10). IT WAS SUBMITTED BEFORE US THAT ALTHOUGH THE ASSESSEE COULD NOT SUCCEED IN THE QUANTUM PROCEEDINGS BUT THAT DOES NOT TANTAMOUNT TO THE FACT THAT THE ASSESSE E HAS MADE ANY WRONG CLAIM. AT THE BEST IT CAN BE SAID TH AT IT WAS AN INCORRECT CLAIM WHICH COULD NOT MEET THE TES T AS LAID DOWN BY VARIOUS COURTS AND IT WAS A BONAFIDE CLAIM MADE UNDER A BONAFIDE BELIEF THAT THE ASSESSEE IS ELIGIB LE FOR DEDUCTION. IT WAS NOT BASED ON ANY HYPOTHETICAL OR IMAGINATION. RATHER IT WAS BASED ON RATIONAL JUDGMENT. FOR THIS BONAFIDE BELIEF THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DEDUCTION U/S 80IB(10) OF THE IN COME TAX ACT IS AVAILABLE TO AN UNDERTAKING ENGAGED IN BUILDI NG HOUSING PROJECTS SUBJECT TO FULFILMENT OF CERTAIN C ONDITIONS. NO DOUBT, THE ASSESSEE WAS ENGAGED IN DEVELOPING THE HOUSING PROJECT, APPROVAL WAS RECEIVED FROM TOWN & COUNTRY PLANNING DEPARTMENT FOR HOUSING PROJECT ON ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 16 27.5.2006. IT WAS ALSO PLEADED THAT THE REPRESENTATION OF MAHARASHTRA CHAMBER OF HOUSING INDUSTRY MET THE HON'BLE FINANCE MINISTER AND SUBMITTED ITS MEMORANDUM , ON IST JANUARY, 2001 WHERE THE CLARIFICATION WAS REQUESTE D TO DEFINE THE TERM HOUSING PROJECT. CONSEQUENTLY C BDT DEPTT. OF REVENUE ADDRESSED A REPLY UNDER FILE NO. 205/3/2001/IT A-II DATED 4 TH MAY, 2001 WHEREIN IT WAS CLARIFIED AS UNDER :- WITH REGARD TO YOUR QUERY REGARDING THE DEFINITION OF HOUSING PROJECT, IT IS CLARIFIED THAT ANY PROJECT WHICH HAS BEEN APPROVED BY A LOCAL AUTHORITY AS A HOUSING PROJECT SHOULD BE CONSIDERED ADEQUATE FOR THE PURPOSE OF SECTIONS 10(23G) AND 80-IB(10). RELIANCE WAS ALSO PLACED ON THE DECISION OF THE ITAT MUMBAI BENCH IN THE CASE OF LAUKIK DEVELOPERS VS. DCIT ; 105 ITD 657 WHEREIN THE HON'BLE ITAT HELD AS UNDER : ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 17 THE CLARIFICATION OF CBDT VIDE LETTER DT. 04.05.01 TO MAHARASHTRA CHAMBER OF HOUSING INDUSTRY CLEARLY STATES THAT ANY PROJECT WHICH IS APPROVED BY LOCAL AUTHORITY AS A HOUSING PROJECT SHOULD BE CONSIDE RED ADEQUATE FOR THE PURPOSE OF SECTION 10(23G) AND 80IB(10) OF THE ACT. THIS CLARIFICATION BY THE CBDT IS OF NO HELP TO THE CASE OF THE ASSESSEE FOR THE REASON THAT THE BUILDING PROJECT OF THE ASSESSEE WAS NOT APPROV ED BY THE LOCAL AUTHORITY NAMELY KDMC AS A HOUSING PROJECT AND WAS IN FACT APPROVED AS A RESIDENTIAL AS WELL AS COMMERCIAL PROJECT BY THEM. IT WAS ALSO PLEADED THAT ALTHOUGH THIS CASE WAS DECIDED AGAINST THE ASSESSEE THAT HIS PROJECT WAS NOT APPROVED AS A HOUSING PROJECT BUT AS A RESIDENTIAL-CUM-COMMERCIAL PROJECT BUT THE ITAT REACHED THE CONCLUSION BY PLACIN G RELIANCE ON THE CLARIFICATION ISSUED BY CBDT. IT WAS AL SO PLEADED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT TH ERE ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 18 IS NO DEFINITION OF HOUSING PROJECT UNDER SECTION 8 0IB(10) OF THE INCOME TAX ACT, 1961 BUT HOUSING PROJECT IS DEF INED U/S 80HHB WHICH IS ALSO UNDER THE SAME CHAPTER VIA AND THE RELEVANT PORTION IS AS UNDER :- 80HHBA. DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM HOUSING PROJECTS IN CERTAIN CASES.. EXPLANATION : (A) HOUSING PROJECT MEANS A PROJECT FOR (I) THE CONSTRUCTION OF ANY BUILDING, ROAD, BRIDGE OR OTHER STRUCTURE IN ANY PART OF INDIA. (II) THE EXECUTION OF SUCH OTHER WORK (OF WHATEVER NATURE) AS MAY BE PRESCRIBED. THE ASSESSEE UNDERTOOK CONSTRUCTION OF ROADS, OTHER STRUCTURES LIKE STP, WATER TANKS IN THE HOUSING PROJE CT AND THIS FACT IS ESTABLISHED FROM THE COMPLETION CERTIFIC ATE ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 19 ISSUED BY GRAM PANCHAYAT DATED 27.12.2007. IT WAS ALSO SUBMITTED THAT THE LAW MAKERS IN THEIR WISDOM NEED NO T SEE THE NEED OF DEFINING THE HOUSING PROJECT IN SEC TION 80IB(10) AND A REFERENCE COULD VERY WELL BE MADE FROM SECTION 80HHBA. THESE ARE INCENTIVES FOR PROJECT FOR DEVELOPMENT OF HOUSING PROJECT. RELIANCE WAS PLACED O N THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. ARUN EXCELLO FOUNDATIONS PVT. LTD.; 259 I TR 362 WHEREIN IT WAS HELD THERE IS NO DEFINITION OF 'HOUSING PROJECT' UN DER SECTION 80IB(10) OF THE ACT. THIS, HOWEVER, DOES NOT POSE ANY DIFFICULTY. FOR READING SECTION 80HHBA AND SECTION 80IA , IT IS CLEAR THAT SECTION 80IB IS CONCERNED ABOUT HOUSING PROJECT NAMELY, CONSTRUCTION OF ANY BUILDING OTHER THAN WHAT IS CONTEMPLATED AS AN INFRASTRUCTURE FACILITY UNDER SECTION 80IA . THUS WHEN UNDER THE VERY SAME CHAPTER DEALING WITH DEDUCTION, ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 20 THE EXPRESSION 'HOUSING PROJECT' HAS ALREADY BEEN DEFINED IN A RELATED PROVISION, WE DO NOT FIND, THE ABSENCE OF THE SAME UNDER SECTION 80IB SHOULD POSE A PROBLEM IN UNDERSTANDING THE MEANING OF THE SAID EXPRESSION. IN THE ABSENCE OF DEFINITION OF THE EXPRESSION 'HOUSING PROJECT' ANYWHERE ELSE IN THE A CT AND THE SAID EXPRESSION BEING DEFINED IN A RELATED DEDUCTION PROVISION UNDER THE SAME CHAPTER VIA, WE FEEL, IT WOULD BE MORE APPROPRIATE TO GO BY THE DEFINITION OF THE EXPRESSION 'HOUSING PROJECT', AS AVAILABLE UNDER SECTION 80HHBA FOR THE PURPOSE OF UNDERSTANDING THE SAID EXPRESSION OF 'HOUSING PROJE CT' UNDER SECTION 80-IB OF THE ACT. 31. AS SEEN ALREADY, 'HOUSING PROJECT' DEFINED UNDE R SECTION 80HHBA REFERS NOT ONLY BUILDING, BUT ALSO ROAD, BRIDGE OR OTHER STRUCTURE IN ANY PART OF INDIA.. DEFINED IN THE EXPLANATION, WE HOLD THAT ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 21 THE HOUSING PROJECT CONTEMPLATED UNDER SECTION 80- IB(10) REFERS CONSTRUCTION OF 'ANY BUILDING' AND WIDEST POSSIBLE MEANING HAS TO BE GIVEN TO THE WORD 'BUILDING' AND CANNOT BE RESTRICTED TO AND AS REFER ABLE TO A HOUSING PROJECT COVERING RESIDENTIAL UNITS ONL Y. IT WAS ALSO SUBMITTED THAT IN VIEW OF THESE FACTS, THE ASSESSEE HAS FORMED THE BONAFIDE BELIEF THAT IT WAS DEVELOPING AND BUILDING HOUSING PROJECT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE FULFILLED VARIOUS CONDITIONS, AREA OF THE PROJECT WAS 8 9.14 ACRE OUT OF 64.1 ACRE WAS ELIGIBLE FOR CLAIMING DEDUCT ION U/S 80IB(10) OF THE INCOME TAX ACT CONSISTING ONLY OF PLOTS AND RESIDENTIAL UNITS HAVING AREA OF LESS THAN 1500 SQ.FT. , COMMERCIAL AREA AND VILLAS HAVING BUILT UP AREA OF MORE THAN PERMITTED LIMIT WERE EXCLUDED FROM THE ELIGIBLE PROJECT AND NO DEDUCTION WAS CLAIMED ON SUCH UNITS. THUS, THE ASSESSEE WAS FULFILING ALL THE CONDITIONS IN RESPECT O F THE ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 22 AREA OF THE PROJECT, RESTRICTION OF THE BUILT UP AREA OF COMMERCIAL AND RESIDENTIAL UNITS. IT WAS ALSO SUBMITTED THAT THE AUDITOR MADE AN UNQUALIFIED REPORT STATING AS UNDER :- IN OUR OPINION, THE ENTERPRISE SATISFIES THE CONDIT IONS STIPULATED IN SECTION 80-IB SUBJECT TO OUR DISCLOSU RE IN ENCLOSED FORM NO. 10CCB AND THE AMOUNT OF DEDUCTION CLAIMED UNDER THIS SECTION IN ITEM 30 IS AS PER THE PROVISIONS OF THE INCOME TAX ACT AND MEETS THE REQU IRED CONDITIONS AS DISCLOSED IN ATTACHED FORM NO. 10CCB. THIS FACT SHOWS THAT THE AUDITOR AFTER DUE CONSIDERATION OF FACTS AND THE DOCUMENTS FORMED AN INDEPENDENT OPINION REGARDING SATISFYING THE CONDITIONS LAID DOWN IN SECTI ON 80IB AND THE ASSESSEE CLAIMED DEDUCTION. THE ASSESSEE FORMED A BONAFIDE BELIEF ALSO ON THE BASIS OF ADVICE FR OM THE TAX EXPERTS AND IT WAS SUBMITTED THAT THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY. THE REV ENUES ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 23 CLAIM THAT THE ISSUE WAS NOT DEBATABLE IS ALSO NOT CORREC T. THERE IS NO DIRECT CASE AGAINST THE ASSESSEE. THE ASSESS EE MADE A PARTICULAR STAND AND IT MAY OR MAY NOT FIND FAVOUR IN THE MATTER BUT THE ASSESSEE WAS UNDER A BONAFIDE BELI EF REGARDING ITS CLAIM. IT WAS PURELY AN ISSUE OF INTERPRE TATION OF LAW WHICH CAN BE DECIDED EITHER WAY OR A MATTER OF OPINION. IT IS TRITE LAW THAT WHERE THERE ARE TWO VIE WS POSSIBLE ON ANY ISSUE, PENALTY CANNOT BE LEVIED. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO DISTINGUISHED TH E RELIANCE PLACED BY THE LEARNED DR ON THE DECISION IN T HE CASE OF CIT VS. ZOOM COMMUNICATION; 191 TAXMANN. 179 (DEL). THE FACTS OF THIS CASE WERE ENTIRELY DIFFERENT . IN THAT CASE THE ASSESSEE CLAIMED DEDUCTION WITH RESPECT TO EQUIPMENT WRITTEN OFF AND INCOME TAX PAID. THESE DEDUCTIONS ARE CLEARLY PRESCRIBED BY LAW IN TERMS OF SECTION 37READ WITH SECTIONS 32 AND 40(A) OF THE IT ACT. IN VI EW OF THESE FACTS, THE HON'BLE COURT HELD THE PENALTY LEVIAB LE DUE ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 24 TO PECULIAR NATURE OF DISALLOWANCE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT UNDER NO CIRCUMSTANCES, NO SUCH DEDUCTION WAS ALLOWABLE. FURTHER, THE LEARNED COUNSEL FOR THE ASSESSEE ALSO DISTINGUISHED FROM THE CASE OF CIT VS. HEIL KALINDI ARSSPL; 37 TAXMAN.COM 347(DEL). IT WAS ALSO SUBMITTED THAT IN THAT CASE THE WAS IN THE BUSINESS OF EXECUTING WORKS CONTRACT AND CLAIMED DEDUCTION U/S 80I A AND DUE TO EXPLANATION 13 TO SECTION 80IA WHEREIN IT H AS BEEN CLEARLY AND CATEGORICALLY BARRED FROM CLAIMING THE DEDUCTION U/S 80IA AND IN THESE CIRCUMSTANCES THE HON 'BLE HIGH COURT REVERSED THE ORDER OF ITAT AND CONFIRMED THE PENALTY AS THE BONAFIDES OF THE ASSESSEE WERE NOT PROVE D. IN THE ASSESSEES CASE, THE FACTS ARE ENTIRELY DIFFEREN T. IN THE ASSESSEES CASE THERE WAS NO CLARIFY OF LAW AND THE ASSES SEE WAS ENGAGED IN DEVELOPING THE HOUSING PROJECT. THERE WERE NO DEFINITION UNDER THIS SECTION BUT THERE WAS A DEFI NITION IN OTHER SECTION UNDER THE SAME CHAPTER AND THE AUDITOR S ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 25 HAVE ISSUED A CERTIFICATE AND ON THAT BASIS THE FIRM FORM ED THE BONAFIDE OPINION. 6. CONSIDERING ALL THE ASPECTS AND THE CASE LAW RELIED ON BY BOTH THE SIDES, WE ARE OF THE VIEW THAT THE FACTS I NVOLVED IN THE CASE OF ZOOM COMMUNICATION (SUPRA) AND CIT VS. HEIL KALINDI ARSSPL (SUPRA) WERE QUITE DIFFERENT FROM THE FACTS OF THE PRESENT CASE. IN THOSE CASES THE CLAIM WAS MADE EVEN WHEN THERE WAS A CLEAR PROHIBITION IN THE ACT ITSELF. IN THE CASE OF ZOOM COMMUNICATION (SUPRA) THE CLAIM WAS IN RESPECT OF DEDUCTION WITH RESPECT TO EQUIPMENT WRITTEN OFF AND INCOME TAX PAID AND SUCH DEDUCTIONS WERE CLEARLY PROHIBITED UNDER SECTION 37 READ WITH SECTIONS 32 AND 40(A) OF THE ACT AND IN THE CASE O F VS. HEIL KALINDI ARSSPL (SUPRA) THE ASSESSEE WAS ENGAGED IN EXECUTING WORKS CONTRACT AND MADE A CLAIM U/S 80IA. EXPLANATION 13 TO SECTION 80IA CLEARLY AND CATEGORICALLY BARRED FROM CLAIMING SUCH DEDUCTION U/S 80IA, WHERE T HE ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 26 ASSESSEE IS ENGAGED IN THE BUSINESS OF EXECUTING THE WORKS CONTRACT. THEREFORE, THE ASSESSEES FACTS ARE ENTIRELY DIFFERENT. IN THE ASSESSEES CASE THE AUDITOR HAS ISSU ED THE CERTIFICATE WITH REGARD TO QUALIFYING FOR DEDUCTION. TH ERE WAS NO DEFINITION OF HOUSING PROJECT IN SECTION 80IB (10). HOWEVER, IN SECTION 80HHBA THERE WAS DEFINITION OF HOUSING PROJECT UNDER THE SAME CHAPTER WHERE THE HOUS ING PROJECT IS DEFINED WHICH STATES THAT THE HOUSING PROJ ECT MEANS A PROJECT FOR THE CONSTRUCTION OF ANY BUILDING, ROAD, BRIDGE OR OTHER CONSTRUCTION IN ANY PART OF INDIA AND T HE EXECUTION OF SUCH OTHER WORKS (OF WHATEVER NATURE) AS MAY BE PRESCRIBED. THE ASSESSEE GOT THE PLAN SANCTIONED. THE ASSESSEE WAS FOUND QUALIFIED FOR DEDUCTION UNDER SECTI ON 80IB(10) OF THE INCOME TAX ACT, 1961 IN THE SUBSEQUE NT YEARS AS THE PROJECT WAS A LARGE PROJECT. IN OUR CONSIDE RED VIEW, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING TH E PENALTY. THE VIEW TAKEN BY THE LEARNED CIT(A) AND ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 27 SUSTAINED BY US ALSO GET STRENGTH FROM THE FOLLOWING CASE LAWS :- (I) CIT VS. RELIANCE PETROPRODUCTS PVT. LTD.; 322 I TR 158 THE ASSESSEE HAD CLAIMED DEDUCTION OF EXPENDITURE B Y WAY OF INTEREST (RS.28,77,242/-) ON BORROWING FOR T HE PURPOSE OF PURCHASE OF SHARES OF IPL BY WAY OF ITS BUSINESS POLICY. THE ASSESSEE DID NOT EARN ANY INCO ME FROM THOSE SHARES AND THE ASSESSING OFFICER (A.O.) DISALLOWED THE CLAIM OF THE SAID INTEREST EXPENDITU RE BY INVOKING PROVISION OF S. 14A. ACCORDINGLY, THE INCO ME WAS ASSESSED AT RS.2,22,688/-. ON BEHALF OF THE DEPARTMENT, IT WAS, INTER ALIA, CONTENDED THAT THE CLAIM OF INTEREST EXPENDITURE WA S TOTALLY WITHOUT ANY LEGAL BASIS AND WAS MADE WITH MALAFIDE INTENTIONS AND THE CLAIM WAS ALSO NOT ACCE PTED BY THE FIRST APPELLATE AUTHORITY AND HENCE IT WAS ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 28 OBVIOUS THAT SUCH CLAIM DID NOT HAVE ANY BASIS. IN SHORT, THE CONTENTION WAS THAT THE ASSESSEE HAD MAD E A CLAIM WHICH WAS TOTALLY UNACCEPTABLE IN LAW AND THEREBY HAD INVITED THE PROVISIONS RELATING TO CONCEALMENT PENALTY AND HAD EXPOSED ITSELF TO SUCH PROVISIONS. ON BEHALF OF THE ASSESSEE IT WAS INTER ALIA CONTEND ED THAT THE LANGUAGE OF THE PROVISION OF CONCEALMENT PENALTY HAD TO BE STRICTLY CONSTRUED, THIS BEING PA RT OF A TAXING STATUTE AND MORE PARTICULARLY THE ONE PROVID ING FOR PENALTY. ACCORDINGLY, UNLESS THE WORDING DIRECT LY COVERED THE ASSESSEE AND THE FACTUAL SITUATION THER EIN, THERE COULD NOT BE ANY PENALTY UNDER THE ACT. IT WA S ALSO POINTED OUT THAT THERE WAS NO CASE OF CONCEALE D INCOME OR THE CASE OF FURNISHING INACCURATE PARTICU LARS OF INCOME IN THE RETURN FURNISHED BY THE ASSESSEE. ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 29 IN THAT CASE, THEIR LORDSHIPS HELD AS UNDER :- .A MERE MAKING OFA CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CA NNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. (EMPH ASIS SUPPLIED ) THEIR LORDSHIPS FURTHER OBSERVED THAT ONCE THE ASSES SEE HAD FURNISHED ALL THE DETAILS OF THE EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS IN THEMSELVE S, WERE NOT FOUND TO BE INACCURATE, PENALTY WAS NOT LEVIABLE UNDER SECTION 27!(1)(C) OF THE ACT. (II) DCIT VS. KARNA INTERNATIONAL ITA NO. 1347/CHD/2010 THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT AS AGAINST RETURNED INCOME OF RS. 74,31,802/-, THE ASSESSMENT WAS COMPLETED ON A TOTAL INCOME OF ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 30 RS. 99,10,802/-. WHILE COMPUTING THE INCOME, THE DEDUCTION U/S 80IB OF THE ACT WAS RECOMPUTED BY EXCLUDING THE VALUE OF EXPORT INCENTIVE ON ACCOUNT OF DEPB AND MISC. INCOME OF RS. 38,50,000/- REPRESENTING THE AMOUNT SURRENDERED DURING THE COURSE OF SURVEY. THE SAID DEDUCTION WAS DENIED TO THE ASSESSEE ON THE BASIS OF THE JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF LIBERTY INDIA LTD DATED 22.9.2006, WHICH WAS SUBSEQUENTLY APPROVED BY THE HON'BLE SUPREME COURT IN ITS DECISION DATED 31.8.2010. THE TRIBUNAL DELETED THE PENALTY FOLLOWING THE RATIO LAID DOWN BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. CHIRAG INTERNATIONAL. ..ACCORDINGLY WE UPHOLD THE DELETION OF PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN RESPECT OF DISALLOWANCE ON CLAIM OF DEDUCTION ON EXPORT ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 31 INCENTIVES U./S 80IB OF THE ACT. FURTHER THE HON'BL E SUPREME COURT IN CIT V RELIANCE PETRO PRODUCTS LTD (SUPRA) HAVE LAID DOWN THE PROPOSITION THAT NO PENALTY U/S 271 (1)(C) OF THE ACT IS LEVIABLE BY HOLDING THAT MERELY MAKING OF AN INCORRECT CLAIM DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME. FOLLOWING THE ABOVE SAID RATIO, WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A) IN DELETING THE PENALTY LEVIED U/S 271 (1)(C) OF THE ACT. THE SECOND PLEA RAISED BY THE ASSESSEE BEFORE CIT(A) WAS THAT THE CLAIM OF DEDUCTION U/S 80IB WAS MADE ON THE BASIS OF CERTIFICATES ISSUED BY CHARTERED ACCOUNTANT AND HENCE THE CLAIM OF DEDUCTION WAS MADE IN A BONAFIDE MANNER NOT ATTRACTING LEVY OF PENALTY U/S 271 (1)(C) OF THE AC T, IS ALSO UPHELD IN VIEW OF THE RATIO LAID DOWN BY TH E HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS. S.D. ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 32 RICE MILLS [275 ITR 206 (P&H)]. WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD ALSO AND DISMISS THE GROUND OF APPEAL RAISED BY THE REVENUE. (III) M/S CHAITRA REALTY LTD. VS. DCIT; ITA NO. 2520/M/2010 THE ASSESSEE WAS A DEVELOPER WHO WAS EXECUTING A PROPERTY DEVELOPMENT PROJECT AND METHOD OF ACCOUNTI NG FOLLOWED WAS PROJECT COMPLETION METHOD. THE ASSESSE E HAD HOWEVER CLAIMED EXPENSES AMOUNTING TO RS.33,11,617/- CONSISTING INTEREST OF RS.25,22,797/ - AND OTHER DAY TO DAY EXPENSES IN THE PROFIT AND LOS S ACCOUNT. THIS HAS BEEN DISALLOWED BY THE AO ON THE GROUND THAT THE EXPENDITURE COULD BE CLAIMED ONLY I N THE YEAR OF COMPLETION. THE DISALLOWANCE HAD BEEN ACCEPTED BY THE ASSESSEE. HOWEVER THE AO HAD ALSO IMPOSED PENALTY UNDER SECTION 271(1)(C) @ 200% OF T AX SOUGHT TO BE EVADED WHICH IN APPEAL WAS REDUCED BY THE CIT(A) TO 100% OF TAX SOUGHT TO BE EVADED. ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 33 ON FURTHER APPEAL, THE PENALTY IMPOSED WAS DELETED BY THE TRIBUNAL BY HOLDING THAT THE CLAIM HAD BEEN MAD E UNDER A BONA FIDE BELIEF AND IT WOULD NOT BE APPROP RIATE TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT. (IV) ACIT VS. ROHAN ENGG. CONSTRUCTION; ITA NO.867/PN/2011 THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF THE COMMERCIAL AR EA, WHICH WAS DISALLOWED BY THE ASSESSING OFFICER AND T HE SAME WAS NOT CONTESTED BY THE ASSESSEE. THEREAFTER, PENALTY UNDER SECTION 271(1)(C ) OF THE ACT WAS IMP OSED ON THE ASSESSEE ON DENIAL OF DEDUCTION UNDER SECTIO N 80IB(10) OF THE ACT. IN APPEAL, THE TRIBUNAL HELD D ELETING THE PENALTY AS UNDER :- 6. WE FURTHER FIND THAT THE ASSESSEE HAS FURNISHE D ALL THE PARTICULARS BEFORE THE A.O AT THE TIME OF ASSESSMENT PROCEEDINGS ALONG WITH THE RETURN. WHEN ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 34 IT WAS FOUND THAT SOME OF THE CONDITIONS FOR CLAIMI NG THE DEDUCTION U/S. 80IB (10) IN RESPECT OF THE HOUS ING PROJECT ROHAN HEIGHTS WERE NOT FULFILLED, THE ASSESSEE WITHDREW HIS CLAIM. WE FURTHER FIND THAT S O FAR AS DISALLOWANCE MADE U/S. 40(A)(IA) IS CONCERNE D, I.E. TOWARDS NON-DEDUCTION OF THE TDS, NOWHERE IT I S THE CASE OF THE A.O THAT ANY BOGUS CLAIM IS MADE BY THE ASSESSEE. IN OUR OPINION, THE ASSESSEES CASE I S SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD., 322 ITR 158 (SC). IN THE SAID C ASE, THEIR LORDSHIPS HAVE HELD THAT MERELY BECAUSE THE CLAIM IS DISALLOWED WHICH IS OTHERWISE BONAFIDE, TH E ASSESSEE CANNOT BE SUBJECTED TO PENAL CONSEQUENCES U/S. 271(1)(C) OF THE ACT. MOREOVER, THE LD CIT(A) H AS CONSIDERED THE ISSUE IN DETAIL. WE FIND NO REASON T O TAKE DIFFERENT VIEW BUT CONFIRM THE ORDER OF THE CI T(A). ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 35 (V) CIT VS. JAKSON LTD.; 214 TAXMAN 94(DEL) IT WAS HELD THAT MERELY BECAUSE THE CLAIM OF DEDUC TION GETS DOWNSCALED, PENALTY CANNOT BE LEVIED ALLEGING FURNISHING OF INACCURATE PARTICULARS. THE COURT HEL D THAT THE MERE MAKING OF A CLAIM WHICH IS ULTIMATELY HELD NOT TO BE SUSTAINABLE IN LAW, WOULD NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF AN ASSESSEE. IT WAS OBSERVED THAT IN THE PRESENT APPEALS, IT WAS ONLY THAT THE CLAIM OF DEDUCTION U/ S 80IB WAS DOWNSCALED, WHICH BY ITSELF WOULD NOT MEAN THAT IT IS A CASE OF FURNISHING INACCURATE PARTICUL ARS OF INCOME. FURTHERMORE, SINCE THERE WAS NO FINDING IN THE PENALTY ORDER AS TO WHICH PART OF THE INCOME THE ASSESSEE HAD CONCEALED AND WITH REGARD TO WHICH PARTICULAR FACET OF HIS INCOME HAD THE ASSESSEE PRO VIDED INACCURATE PARTICULARS THEREOF, NO PENALTY COULD BE LEVIED. ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 36 (VI) ACIT VS. TUDOR KNITTING WORKS (SHRI ASHISH G OYAL AND SHRI N.D. PATWA)LTD. 415/CHANDIGARH/2011 THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT CLAIMED DEDUCTION U/S 80-IB AMOUNTING TO RS. 36,99,141/-. THE DEDUCTION HAD BEEN CLAIMED ON ITEMS INCLUDING RS. 1.20 CRORE SURRENDERED BY THE APPELLANT DURING THE SURVEY ON ACCOUNT OF CERTAIN DISCREPANCIES. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AO OBSERVED THAT THE DEDUCTION WAS AVAILABLE ONLY ON THE INCOME WHICH HAD A DIRECT NEXUS OR ORIGINATES FROM THE INDUSTRIAL UNDERTAKING ITSELF BUT SUCH ITEMS WERE NOT ELIGIBLE FOR CLAIMING OF DEDUCTION. THEREFORE, THE AO OBSERVED THAT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF INCOME AND INITIATED PENALTY U/S 271(1)(C) OF THE ACT AND ISSUED NOTICE ACCORDINGLY. IN RESPONSE, ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 37 THE APPELLANT FIELD ITS REPLY BEFORE THE AO BUT THE SAME WAS REJECTED BY THE AO AND ULTIMATELY LEVIED PENALTY AMOUNTING TO RS. 12,91,583/-. CIT(A) OBSERVED THAT .THOUGH RATIO OF THIS DECISION WOULD REQUIRE ADDITION MADE IN RESPECT OF THE DISALLOWANCE TO BE CONFIRMED WITHOUT ANY DOUBT, QUESTION INVOLVED IN THE PRESENT APPEAL IS NOT ON ACCOUNT OF ADDITION BUT IN RESPECT OF LEVY O F PENALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF OF T HIS DISALLOWANCE. AND DELETED THE PENALTY. ON FURTHER APPEAL TO THE TRIBUNAL, IT WAS HELD AS UNDER :- THE PROVISION OF SECTION 271(1(C) COVERS THE SITUATION OF FALSE CLAIM BUT NOT AN INCORRECT CLAIM . IN THE PRESENT CASE, THE ASSESSEE HAS MADE CLAIM WHICH DOES NOT FALL UNDER THE PROVISIONS OF SECTION ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 38 271(1)(C) OF THE ACT, AS THERE ARE DIVERGENT JUDICI AL OPINIONS, ON SUCH CLAIM MADE BY THE ASSESSEE. HAVING REGARD TO THE ABOVE LEGAL AND FACTUAL DISCUSSIONS AND RESPECTFULLY FOLLOWING THE DECISIONS OF THE HON'BLE SUPREME COURT AND THE HON'BLE JURISDICTIONAL HIGH COURT REPRODUCED ABOVE, THE FINDING OF THE LD. CIT(A) IS UPHELD. (VII) M/S MERIDIAN IMPEX VS.ACIT; ITA NO. 01/RJT/201 1 (TM) THE CLAIM OF DEDUCTION UNDER SECTION 81IB OF THE ACT WAS MADE BY THE ASSESSEE THOUGH THE AUDITOR OF THE ASSESSEE COMPANY HAD REJECTED SUCH CLAIM. HOWEVER, THE CLAIM WAS WITHDRAWN SUBSEQUENTLY ON ACCOUNT OF WHICH THE ASSESSING OFFICER IMPOSED PENALTY UNDER SECTION 271(1((C) OF THE ACT. THE PERTINENT FINDINGS OF THE TRIBUNAL ARE REPRODUCED AS UNDER :- ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 39 THERE CAN ALWAYS BE A DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE REVENUE REGARDING INTERPRETATION OF SOME PROVISION OF LAW. THERE IS N O MATERIAL ON RECORD BROUGHT ON BEHALF OF THE REVENUE TO SUGGEST THAT THE CLAIM OF THE ASSESSEE IN THIS REGARD WAS NOT BONA FIDE. I FIND THAT IN FA CT THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB OF THE ACT WAS MADE BY THE A.O. ON THE BASIS OF CLAIM MADE IN THIS REGARD BY THE ASSESSEE IN ITS STATEMENT OF INCOME FILED ALONG WITH THE RETURN OF INCOME. THIS IS NOT THE CASE OF THE REVENUE THAT IT HAS GATHERED SOME OTHER MATERIAL NOT DISCLOSED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS NOT THE LAW THAT WHEREVER THE ASSESSEES CLAIM OF DEDUCTION WAS FOUND NOT ACCEPTABLE BY THE DEPARTMENT, THE ASSESSEE SHOULD BE VISITED WITH PENALTY FOR FURNISHING OF INACCURAT E ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 40 PARTICULARS OF INCOME UNDER SECTION 271(1)(C ) OF T HE ACT. IN THIS CASE, THE ASSESSEE HAS DURING THE COURSE OF ASSESSMENT PROCEEDINGS FILED A WRITTEN LETTER DATED 24.12.2008 BEFORE THE A.O. WITHDRAWING CLAIM OF DEDUCTION UNDER SECTION 80IB EVEN IF THE ASSESSEE HAS NOT WITHDRAWN ITS CLAIM OF DEDUCTION AND HAD INSISTED FOR ALLOWANCE OF DEDUCTION EVEN THEN IN THE ABSENCE OF ANY MATERIAL BROUGHT ON RECORD TO IMPLICATE THE ASSESSEE BY SHOWING THAT HIS CLAIM OF DEDUCTION WAS NOT BONA FIDE, IT CANNOT BE SAID THAT THE ASSESSEE IS GUILTY OF FILING INACCURATE PARTICULARS OF INCOME. (EMPHASIS SUPPLIED) 7. IN VIEW OF THE ABOVE DISCUSSION, WE FIND NO ER ROR IN THE ORDER OF THE LEARNED CIT(A) AND, THEREFORE, UPHOLD T HE SAME. ACIT VS. M/S NAVRATAN TECHBUILD PVT.LTD ITA NO. 597/IND/2014 41 8. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. PRONOUNCED IN OPEN COURT ON 6 TH OCTOBER, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 6 TH OCTOBER, 2015 DN/-