ASST CIT RG 21(3), MUMBAI V. SUN CITY HOUSING, MUMBAI

ITA 6233/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4283 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 03-07-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 09-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABANIKANT NAYAK
• Assessee Lawyers: MANISH SANGHAVI
• Keywords: Bonafide belief

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , !'#$ , % &' BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI N.K. BILLAIYA, AM ./I.T.A. NO. 6233/MUM/2011 ( ( ( ( ( / ASSESSMENT YEAR : 2006-07 THE ACIT, CIRCLE-21(3), PRATYAKSH KAR BHAVAN, BKC, BANDRA (E), MUMBAI-400 051 M/S. SUN CITY HOUSING, 101-D, PRASHANT APARTMENTS, OPP. I.I.T MAIN GATE, POWAI, MUMBAI-400 076 ') % ./ *+ ./PAN/GIR NO. : AAPFS 4720G ( ), /APPELLANT ) .. ( -.), / RESPONDENT ) ), / / APPELLANT BY : ` SHRI ABANIKANT NAYAK -.), 0 / /RESPONDENT BY : SHRI MANISH SANGHAVI 0 12% / DATE OF HEARING :03.07.2013 34( 0 12% / DATE OF PRONOUNCEMENT : 10.3.2013 &5 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-32, MUMBAI DT.17.6.2011 PERTAINING TO A.Y. 2 006-07. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 1,06,79,023/- LEVIED U/S. 271(1)(C) OF THE ACT. IT IS THE SAY OF THE REVENUE THAT THE ASSESS EE COULD NOT SUBSTANTIATE ITS CLAIM OF DEDUCTION U/S. 80IB(10) OF THE I.T. AC T. ITA NO.6233/MUM/2011 2 3. THE ASSESSEE IS IN THE BUSINESS OF BUILDING CONS TRUCTION. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS SELE CTED FOR SCRUTINY ASSESSMENT. DURING THE YEAR, THE ASSESSEE HAS SHOW N TO HAVE COMPLETED ITS ONE PROJECT NAMELY MERCURY ON WHICH A NET PRO FIT OF RS. 3,33,42,391/- IS SHOWN. THE ASSESSEE HAS CLAIMED D EDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF THE ENTIRE PROFIT OF THE PROJECT MERCURY. HOWEVER, THE AO OBSERVED THAT THE ASSES SEE HAS FILED THE RETURN OF INCOME BEYOND THE TIME LIMIT PRESCRIBED U /S. 139(1) OF THE ACT, THEREFORE IN VIEW OF THE PROVISIONS OF SEC. 80AC OF THE ACT, THE ASSESSEE WAS NOT ENTITLED FOR DEDUCTION AS THE RETURN WAS FI LED BEYOND THE TIME LIMIT PRESCRIBED U/S. 139(1) OF THE ACT. ACCORDING LY, THE CLAIM OF THE ASSESSEE U/S. 80IB(10) WAS DENIED. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS MADE AN APPLICATION TO THE BOARD U/S. 119(2)(C) OF THE ACT REQUESTING THE BOARD FOR RELAXATION OF REQUIREMENT IN RESPECT OF FILING DELAYED RETURN IN ITS CASE FOR CLAIMING DEDUCTION U /S. 80IB(10) OF THE ACT. HOWEVER, THE DECISION OF THE BOARD IS YET TO COME. ON MERITS OF THE CASE, THE AO FURTHER NOTICED THAT THE PROJECT MERCURY H AS 21 SHOPS ADMEASURING 4023.27 SQ. FT WHICH IS MORE THAN THE PRESCRIBED LIMIT OF 2000 SQ. FT UNDER CLAUSE (D) OF SEC. 80IB(10). TH E AO OBSERVED THAT EVEN ON MERIT OF THE CASE, THE ASSESSEE WAS NOT ENT ITLED FOR THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. 4. THE ASSESSEE TOOK AN ALTERNATE PLEA TO ALLOW DED UCTION U/S. 80IB(10) IN RESPECT OF RESIDENTIAL UNIT AND TAX PRO FIT DERIVED FROM COMMERCIAL AREA. THE AO FURTHER NOTICED THAT THE A SSESSEE HAS FILED TWO STATEMENTS OF COMPUTATION OF INCOME ONE IN WHICH TH E ASSESSEE HAS NOT CLAIMED DEDUCTION U/S. 80IB(10) AND THE OTHER IN W HICH THE ASSESSEE HAS ACTUALLY CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT . THE ASSESSEE HAS MADE IT VERY CLEAR THAT IT IS FILING TWO COMPUTATI ON OF INCOME AS A MATTER ITA NO.6233/MUM/2011 3 OF ABUNDANT PRECAUTION. THE AO WAS CONVINCED THAT THE ASSESSEE HAS INTENTIONALLY FILED INACCURATE PARTICULARS OF ITS I NCOME AND ACCORDINGLY LIABLE FOR PENALTY U/S. 271(1)(C) OF THE ACT. HOWE VER, THE ASSESSMENT WAS COMPLETED AS PER THE COMPUTATION OF INCOME OF THE A SSESSEE. THE AO ISSUED NOTICED U/S. 271(1)(C) OF THE ACT ASKING THE ASSESSEE WHY PENALTY SHOULD NOT BE LEVIED FOR FILING INACCURATE PARTICUL ARS. ON RECEIVING NO PLAUSIBLE REPLY FROM THE ASSESSEE, THE AO WENT ON T O LEVY PENALTY OF RS. 1,06,79,023/-. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). AFTER CONSIDERING THE FACTS AND SUBMISSIONS OF THE ASSESS EE, THE LD. CIT(A) OBSERVED THAT THE VERY BASIS OF COMPUTATION OF PEN ALTY IS TAX SOUGHT TO BE EVADED WHICH IS TAX ON ASSESSED INCOME AS REDUCED B Y THE TAX ON RETURNED INCOME. THE LD. CIT(A) FURTHER OBSERVED THAT IN TH E INSTANT CASE TAX ON ASSESSED INCOME AND TAX ON RETURNED INCOME ARE SAME . THEREFORE THE AMOUNT OF TAX SOUGHT TO BE EVADED IS NIL THEREFORE, LEVY OF PENALTY CANNOT BE JUSTIFIED. 6. THE LD. CIT(A) FURTHER WENT ON TO DISCUSS THE ME RITS OF THE CASE AND OBSERVED THAT THE ASSESSEE HAS NOT CLAIMED DEDU CTION U/S. 80IB(10) IN THE RETURN OF INCOME. THE LD. CIT(A) FURTHER NOTED THAT AS AN ABUNDANT PRECAUTION, THE ASSESSEE HAD MADE AN ALTERNATIVE CL AIM BY WAY OF FOOT NOTE. THAT IF THE AO IS CONVINCED, THE ASSESSEE MA Y BE ALLOWED DEDUCTION U/S. 80IB(10) OF THE ACT. THE LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE COULD NOT HAVE CLAIMED THE BENEFIT O F DEDUCTION AS IT HAD ALREADY OFFERED THE INCOME IN THE RETURN AND PAID T HE TAX WITHOUT CLAIMING DEDUCTION. HENCE, THERE WAS NO CONCEALMENT IN RETU RN OF INCOME FILED AND ACCORDINGLY DIRECTED THE AO TO DELETE THE PENAL TY SO LEVIED. ITA NO.6233/MUM/2011 4 7. AGGRIEVED BY THIS FINDING OF LD. CIT(A), REVENUE IS BEFORE US. 8. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE ASSESSMENT ORDER. IT IS THE SAY OF THE LD. DR THA T THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT THOUGH T HE SAME WAS NOT ALLOWED BY THE AO FOR THE SPECIFIC REASONS MENTIONE D IN THE ASSESSMENT ORDER. THE ASSESSEE HAS FILED INACCURATE PARTICULAR S BY CLAIMING FALSE DEDUCTION, THEREFORE, THE LEVY OF PENALTY IS JUSTIF IED. 9. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE ORDERS OF THE LOWER AUTHORITIES. IT IS NOT IN DISPUTE THA T THE ASSESSEE HAD MADE AN ALTERNATE PLEA DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. IT IS ALSO AN ADMITTED FACT THAT THE CLAIM WAS NOT MADE IN THE RETURN OF INCOME BUT ONLY BY WAY OF AN ALTERNATE PLEA IN THE FORM OF CO MPUTATION OF INCOME. IT IS SEEN THAT THE ASSESSEES PROJECT WAS APPROVED VIDE ORDER DT. 13.8.2002, WHICH CONTAIN SOME AREA FOR COMMERCIAL S HOP. DURING THE EARLIER YEARS OF THE PROVISIONS OF SEC. 80IB(10), T HERE WAS NO CAP ON COMMERCIAL AREA. THE RESTRICTION HAS BEEN BROUGHT ON STATUTE W.E.F. 1.4.2005 I.E. A.Y. 2005-06. SINCE THE ASSESSEES P ROJECT WAS APPROVED MUCH PRIOR TO THE AMENDMENT, THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT IT IS ENTITLED FOR DEDUCTION U/S. 80IB(10) OF THE ACT, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS MADE A FALSE C LAIM. AT THE MOST, IT CAN BE SAID THAT THE ASSESSEE HAS MADE A WRONG CLAI M. THEREFORE, IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS 322 ITR 158, WHEREIN THE HO NBLE SUPREME ITA NO.6233/MUM/2011 5 COURT HAS HELD THAT A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE . 11. CONSIDERING THE FACTS OF THE CASE, IN THE LIGHT OF THE AFORESAID DECISION OF THE HONBLE SUPREME COURT, WE DO NOT FI ND ANY REASON TO TAMPER OR INTERFERE WITH THE FINDINGS OF THE LD. CI T(A). 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY, 2013 &5 0 4( % 6 7&8 10/07/2013 4 0 9 SD/ SD/- (H.L. KARWA ) (N.K . BILLAIYA ) / PRESIDENT % &' / ACCOUNTANT MEMBER MUMBAI; 7& DATED 10/07 /2013 . . ./ RJ , SR. PS &5 &5 &5 &5 0 00 0 -1! -1! -1! -1! :!(1 :!(1 :!(1 :!(1 / COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. ; ( ) / THE CIT(A)- 4. ; / CIT 5. !<9 -1 , , / DR, ITAT, MUMBAI 6. 9= > / GUARD FILE. &5 &5 &5 &5 / BY ORDER, .!1 -1 //TRUE COPY// ? ?? ? / @ @ @ @ * * * * (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI