The ITO, Ward-9(1), Ahmedabad V. M/s. Shivdhara Developers, Ahmedabad

ITA 631/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72814 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-12-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 25-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: MK PATELAR
• Keywords: Wrong claim
• Section: 80IB

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BENCH, AHMEDABAD .., ! '# '# '# '# $ %&, ! BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER #./ I.T.A. NOS.631 & 632/AHD/2010 ( ( ')( ( ')( ( ')( ( ')( / / / / ASSESSMENT YEARS:2003-04 & 2004-05 RESPECTIVELY ) ITO WARD-9(1) AHMEDABAD / VS. M/S.SHIVDHARA DEVELOPERS NR.HERITAGE HOMES SHILAJ ROAD THALTEJ AHMEDABAD !* #./+, #./ PAN/GIR NO. : AALFS 9702 N ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI R.K.DHANESTA, SR.D.R. ./*- 1 0 / RESPONDENT BY : SHRI M.K.PATEL, A.R. $'2 1 & / / / / DATE OF HEARING : 30/12/2013 34) 1 & / DATE OF PRONOUNCEMENT : 08/01/2014 5 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGA INST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS )-XV, AHMEDABAD(CIT(A) FOR SHORT) BOTH IDENTICALLY DAT ED 23/04/2009 PERTAINING TO ASSESSMENT YEARS (AYS) 2003-04 & 2004 -05. SINCE BOTH THE APPEALS PERTAIN TO THE SAME ASSESSEE AND COMMON ISSUE IS INVOLVED, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.631 & 632/AH D/2010 ITO VS. M/S.SHIVDHARA DEVELOPERS ASST.YEARS 2003-04 & 2004-05 - 2 - 2. THE FOLLOWING COMMON GROUNDS HAVE BEEN RAISED BY THE REVENUE IN ITS APPEALS:- 1) THE LD.COMMISSIONER OF INCOME-TAX(A)-XV, AHMEDAB AD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY O F RS.15,06,750/- (FOR AY 2003-04) AND RS.14,35,000/- FOR AY 2004-05 LEVIED U/S.271(1)(C). 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASS ESSING OFFICER. 3) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE L D.COMMISSIONER OF INCOME-TAX(A)-XV, AHMEDABAD MAY BE SET ASIDE AND TH AT OF THE ASSESSING OFFICER BE RESTORED. 3. FIRST, WE TAKE UP ITA NO.631/AHD/2010 FOR AY 200 3-04. 3.1. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 24/03/2006, THEREBY THE ASSESSING OFFICER(AO) REJECTED THE CLAI M OF THE ASSESSEE MADE U/S.80-IB(10) OF THE ACT AMOUN TING TO RS.41 LACS. WHILE FRAMING THE ASSESSMENT, THE AO ALSO INITIATED THE PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT AND LEVIED A P ENALTY OF RS.15,06,750/- IN RESPECT OF AY 2003-04. AGAINST THIS, ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DELETED THE PENALTY. NOW, THE REVEN UE IS IN APPEAL BEFORE US FOR BOTH THE YEARS. THE ONLY EFFECTIVE GROUND I S AGAINST DELETION OF PENALTY OF RS.15,06,750/- (FOR AY 2003-04) LEVIED U /S.271(1)(C) OF THE ACT. 3. THE LD.SR.DR SUPPORTED THE PENALTY ORDER AND SUB MITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY . ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE SHRI MEHUL PATEL SUPPOR TED THE ORDER OF THE ITA NOS.631 & 632/AH D/2010 ITO VS. M/S.SHIVDHARA DEVELOPERS ASST.YEARS 2003-04 & 2004-05 - 3 - LD.CIT(A). HE SUBMITTED THAT THE PENALTY WAS LEVIE D ON THE GROUND OF CONCEALMENT OF INCOME. HE SUBMITTED THAT EVERYTHIN G WAS DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME. THE ONLY ISSU E IN THIS CASE IS THAT THE ASSESSEE CLAIMED DEDUCTION U/S.80-IB(10) OF THE ACT WHICH WAS REJECTED BY THE AO. THE REJECTION OF CLAIM OF DEDUCTION IS A DEBATABLE ISSUE, HOWEVER, THE APPEAL FILED IN THE QUANTUM PROCEEDING S WAS DISMISSED IN DEFAULT BY THE HONBLE ITAT. THIS GOES TO SHOW THA T THE ISSUE WAS NOT DECIDED ON MERIT. HE SUBMITTED THAT MERELY ON THE BASIS OF A WRONG CLAIM OR A CLAIM WHICH IS AS PER THE REVENUE IS NOT ALLOWABLE, CANNOT BE THE SOLE GROUND FOR LEVY OF PENALTY. MOREOVER, IN THIS CASE, THE ASSESSEE HAS DISCLOSED ALL MATERIAL FACTS AND NOTHING BROUGH T ON RECORD BY THE REVENUE THAT THE ASSESSEE HAS CONCEALED ANY INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IN SUPPORT OF HIS CONTENTION THAT A CLAIM WRONGLY MADE BY THE ASSESSEE UNDER THE BELIEF THAT ASSESSEE WAS ENTITLED FOR SUCH CLAIM CANNOT BE THE BASIS FOR LEV Y OF PENALTY. HE RELIED UPON THE DECISION OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS . RELIANCE PETROPRODUCTS PVT.LTD. 322 ITR 158 (SC). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGEMENT CITED BY THE LD.COUNSEL FO R THE ASSESSEE. THE UNDISPUTED FACTS AS TRANSPIRED FROM THE RECORDS ARE THAT THE ASSESSEE MADE A CLAIM U/S.80-IB(10) OF THE ACT WHICH WAS FOUND NO T TO BE ALLOWABLE BY THE AO. THE ASSESSEE HAD DISCLOSED ALL MATERIAL FA CTS AND THE REVENUE HAS NOT PLACED ANYTHING ON RECORD THAT SUCH PARTICU LARS WERE NOT AVAILABLE WITH THE AO. THE AO HAS LEVIED PENALTY ON THE GROU ND THAT THE ASSESSEE ITA NOS.631 & 632/AH D/2010 ITO VS. M/S.SHIVDHARA DEVELOPERS ASST.YEARS 2003-04 & 2004-05 - 4 - HAS CONCEALED THE INCOME. WE FIND THAT THE LD.CIT( A) HAS DELETED THE ADDITION BY OBSERVING AS UNDER:- 4. THE PERUSAL OF THE PENALTY ORDER SHOWS THAT TH E AO LEVIED PENALTY U/S.271(1)(C) BECAUSE IN THE ASSESSMENT ORD ER PASSED U/S.143(3) DATED 24.3.2006 THE CONDITION STIPULATED IN CLAUSE (A) OF SECTION 80IB(10) WAS NOT FOUND FULFILLED, ABOUT THE DATES ON WHICH THE APPROVAL WAS GIVEN BY THE LOCAL AUTHORITY AND C OMPLETION OF PROJECT WITHIN THE TIME SPECIFIED. HOWEVER, CIT(A) XV WHILE DENYING DEDUCTION HAS NTO GONE INTO THE TECHNICALIT IES OF DATES AND THE PERUSAL FO THE APPELLATE ORDER SHOWS THAT THIS POINT OF THE AO WAS NOT CONFIRMED BY THE CIT(A) THE DENIAL OF 80IB( 10) WAS CONFIRMED RELYING ON LEGAL ASPECTS THAT THE APPELLA NT WAS NOT THE OWNER OF THE LAND ON WHICH THE PROJECT WAS DEVELOPE D, THE LOCAL AUTHORITY GAVE APPROVAL TO THE LAND OWNER AND THE A PPELLANT ACTED AS A MERE CONTRACTOR OF THE HOUSING SOCIETY. THE A PPELLANTS APPEAL AGAINST CIT(A) ORDER IS PENDING BEFORE HONB LE ITAT. IN THIS BACKGROUND I AM INCLINED TO DIRECT THE AO T O DELETE THE PENALTY IMPOSED U/S.271(1)(C) BECAUSE FIRSTLY THE P ENALTY HAS BEEN IMPOSED FOR CONCEALING INCOME OF RS.41,00,000, WHIC H IS NOT THE CASE HERE. SECONDLY IN THE PENALTY ORDER PROPER EX AMINATION OR EVALUATION OF FACTS HAS NOT BEEN MADE WHICH IS REQU IRED UNDER LAW AND STATEMENTS HAVE BEEN LIFTED FROM ASSESSMENT ORD ER PASSED U/S.143(3), WHEREAS IN THE WRITTEN SUBMISSION GIVEN DURING THE PRESENT APPELLATE PROCEEDINGS SEVERAL FACTUAL POINT S PERTAINING TO DATES HAVE BEEN MADE AND THE SAME HAVE BEEN INFORME D TO HAVE BEEN SUBMITTED TO THE AO. THESE POINTS HAVE NOT BE EN DISCUSSED AT ALL BY THE AO. THIRDLY CIT(A)XV HAS CONFIRMED 80IB (10) DEDUCTION DENIAL ON LEGAL ASPECTS LIKE WHETHER THE APPELLANT NOT OWING LAND IS ELIGIBLE FOR 80IB(10) DEDUCTION, THOU GH THE FACT IS THAT ALL DEVELOPERS/BUILDERS ARE CLAIMING THIS DEDU CTION EN-MASSE THOUGH LAND IS OWNED BY THE HOUSING COOPERATIVE SOC IETIES. THEREFORE IN MY VIEW THERE IS NO CONCEALMENT CASE A ND THE AO IS DIRECTED TO DELETE THE PENALTY. 4.1. WE FIND THAT THE HONBLE APEX COURT IN THE CASE OF CIT VS . RELIANCE PETROPRODUCTS PVT.LTD. 322 ITR 158 (SC) HA S HELD AS UNDER:- ITA NOS.631 & 632/AH D/2010 ITO VS. M/S.SHIVDHARA DEVELOPERS ASST.YEARS 2003-04 & 2004-05 - 5 - A GLANCE AT THE PROVISIONS OF SECTION 271(1) OF TH E INCOME-TAX ACT, 1961, SUGGEST THAT IN ORDER TO BE COVERED BY I T, THERE HAS TO BE CONCEALMENT OF PARTICULARS OF THE INCOME OF THE ASS ESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULAR S USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY O F FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASS ESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIO N, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAG INATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICU LARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INAC CURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DET AILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISH ING INACCURATE PARTICULARS. DECISION OF THE GUJARAT HIGH COURT AF FIRMED. 4.2. THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LA ID DOWN BY THE HONBLE APEX COURT IN THE CASE OF CIT VS . RELIANCE PETROPRODUCTS PVT.LTD.(SUPRA), WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE LD.CIT(A), THE SAME IS HEREBY UPHELD AND DELETE THE PENALTY. AS A RESULT, GROUND OF REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, REVENUES APPEAL FOR AY 2003-04 I S DISMISSED. 6. NOW, WE TAKE UP ITA NO.632/AHD/2010 FOR AY 2004- 05. ITA NOS.631 & 632/AH D/2010 ITO VS. M/S.SHIVDHARA DEVELOPERS ASST.YEARS 2003-04 & 2004-05 - 6 - 6.1. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE FACTS ARE IDENTICAL AS WERE IN REVENUES APPEAL IN ASSESSEES OWN CASE BE ARING ITA NO.631/AHD/2010 FOR AY 2003-04(SUPRA), WHEREIN WE H AVE UPHELD THE ORDER OF THE LD.CIT(A) AND DISMISSED THE APPEAL OF THE REVENUE. SINCE THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES O F THE CASE, FOR THE SAME REASONING, WE DISMISS THE REVENUES APPEAL FOR AY 2004-05. 7. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) ($ %&) ! ! ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 08/ 01 /2014 8.., '.../ T.C. NAIR, SR. PS 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)&/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. ## & $; / CONCERNED CIT 4. $;() / THE CIT(A)-XV, AHMEDABAD 5. 9'%< .& , , / DR, ITAT, AHMEDABAD 6. <( =2 / GUARD FILE. 5$ 5$ 5$ 5$ / BY ORDER, /9& .& //TRUE COPY// > >> >/ // / #+ #+ #+ #+ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD