M/S. ACME ASSOCIATES, MUMBAI V. ACIT CEN CIR 9, MUMBAI

ITA 649/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5045 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 05-08-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 24-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SINGH
• Keywords: Search and seizure; Initiation of penalty proceedings
• Section: 143(3); 153A; 80IB; 132

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . , , ! ! ! ! '# $% '# $% '# $% '# $% , ,, , & & & & ' ' ' ' BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER . / ITA NO. 649/MUM./2011 ( &) * !+* / ASSESSMENT YEAR : 200506 ) M/S. ACME ASSOCIATES ACME GHAR, 19, K. DESAI ROAD BEHIND SRASRA RESTAURANT VILE PARLE (WEST), MUMBAI 400 056 .. ,- / APPELLANT ) V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE9, MUMBAI 400 020 .... ./,- / RESPONDENT , . / PERMANENT ACCOUNT NUMBER AAKFA2679K &) *1# 2 3 / ASSESSEE BY : MR. VIJAY MEHTA 4! 2 3 / REVENUE BY : MR. O.P. SINGH )! 2 # / DATE OF HEARING 05.08.2013 $ 5+ 2 # / DATE OF ORDER 13.09.2013 $ $ $ $ / ORDER '# $% '# $% '# $% '# $% , ,, , & & & & 6 6 6 6 / PER AMIT SHUKLA, J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE, CHALLENGING THE IMPUGNED ORDER DATED 9 TH DECEMBER 2010, PASSED BY THE LEARNED COMMISSIONER (APPEALS)-XXXVII, MUMBAI, FOR THE ASSE SSMENT YEAR 200506, M/S. ACME ASSOCIATES 2 IN THE MATTER OF PENALTY OF ` 74,85,091, LEVIED UNDER SECTION 271(1)(C) BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER (APPEALS). 2. FACTS IN BRIEF : THE ASSESSEE IS A PARTNERSHIP FIRM WHICH IS ENGA GED IN THE REAL ESTATE DEVELOPMENT. THE ASSESSEE WAS DEVEL OPING A HOUSING PROJECT NAMED AS AMARTARUVII AT ANDHERI (E), MUMBAI. IN THE RETURN OF INCOME FILED ON 31 ST OCTOBER 2005, THE ASSESSEE HAD SHOWN THE NET PROFI T FROM THE BUSINESS TO THE TUNE OF ` 2,04,55,261 AND THE SAME WAS CLAIMED AS 100% DEDUCTION UNDER SECTION 80IB(10). SUCH A CLAIM WAS DULY SUPPORTED BY THE AUDIT REPORT IN THE PRESCRIBED FORM. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE DATE OF COMMENCEMENT CERTIFICATE, APPROVED PLANS AND PERCENTAGE OF COMPLETION OF WORK WAS DULY FURNISHED . ON VERIFYING THE COPIES OF AGREEMENT OF SALE WITH THE FLATS PURCHASERS, THE ASSESSING OFFICER NOTED THAT IN CASE OF TWO BUYERS, SULBHA M. WAGHLE AND MA NGESH G. WAGHLE, THEY HAVE ENTERED INTO A JOINT AGREEMENT OF THE SAID FLA TS ADMEASURING 300 SQ.FT. AND 674 SQ.FT. RESPECTIVELY TOTALING TO ` 974 SQ.FT. CARPET AREA WAS CONVERTED INTO BUILTUP AREA AFTER TAKING 15% AS BOOKING AREA WHICH EXCEEDED 1,000 SQ.FT. THUS, THE TOTAL FLAT AREA HAD BECOME 1120 SQ .FT. OF THE BUILTUP AREA. FROM THIS INSTANCE, THE ASSESSING OFFICER CAME TO T HE CONCLUSION THAT BUILT UP AREA OF THE UNIT HAS EXCEEDED TO 1,000 SQ.FT. AN D, THEREFORE, AS PER THE PROVISIONS OF SECTION 80IB(10), THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION ESPECIALLY WHEN THESE TWO FLATS HAVE BEEN SOLD TO O NE FAMILY. SIMPLY ON THIS PREMISE THE DISALLOWANCE OF THE DEDUCTION UNDER SEC TION 80IB(10) WAS MADE BY THE ASSESSING OFFICER VIDE ORDER DATED 28 TH DECEMBER 2007. THE PENALTY UNDER SECTION 271(1)(C) WAS ALSO INITIATED ON THIS REASONING ONLY. 3. AGAINST THIS, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS), HOWEVER, DURING THE PENDENC Y OF THE APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS), A SEARCH AND SE IZURE ACTION WAS INITIATED UNDER SECTION 132 IN CASE OF ACME GROUP O F COMPANIES ON 24 TH JULY 2008. THE ASSESSEE, IN THE WAKE OF SEARCH PROCEEDIN GS AND ISSUANCE OF M/S. ACME ASSOCIATES 3 NOTICE UNDER SECTION 153A, WHICH INCLUDED ASSESSMEN T YEAR 200506 ALSO, WITHDREW THE APPEAL FROM THE LEARNED COMMISSIONER ( APPEALS). THE LEARNED COMMISSIONER (APPEALS), VIDE ORDER DATED 23 RD JANUARY 2008, DISMISSED THE APPEAL OF THE ASSESSEE AS WITHDRAWN. 4. THE ASSESSING OFFICER, DURING THE PENALTY PROCEEDIN GS UNDER SECTION 271(1)(C), OBSERVED THAT THE PENALTY WAS INITIATED ON ACCOUNT OF VIOLATION OF PROVISIONS OF SECTION 80IB(10) AS IN ONE CASE, TWO FAMILY MEMBERS HAD JOINED THE FLAT WHICH EXCEEDED THE 1,000 SQ.FT. WHI CH WAS IN VIOLATION OF THE SAID PROVISIONS. THE PENALTY WAS INITIATED AND LEVI ED ON THIS GROUND ONLY. 5. BEFORE THE ASSESSING OFFICER, DETAIL SUBMISSIONS AN D EXPLANATION WAS MADE WHICH HAS BEEN INCORPORATED BY THE ASSESSING O FFICER FROM PAGE3 TO 6 OF THE PENALTY ORDER. THE ASSESSING OFFICER REJEC TED THE ASSESSEES CONTENTION AND ALSO NOTED THE FACT THAT AFTER THE S EARCH, IT HAS COME TO THE NOTICE THAT THE ASSESSEE HAS NOT COMPLETED THE PROJ ECT BEFORE 31 ST MARCH 2008 AND, THEREFORE, THE ASSESSEE HAS VIOLATED THE OTHER CONDITIONS OF SECTION 80IB(10) AND THAT THE ASSESSEE HAS, LATER O N, WITHDRAWN THE CLAIM OF DEDUCTION EARLIER CLAIMED UNDER SECTION 80IB(10). H OWEVER, THE ASSESSING OFFICER FOUND THAT INITIAL FINDINGS OF THE ASSESSIN G OFFICER IN THE ORIGINAL ASSESSMENT ORDER IS SUFFICIENT FOR LEVYING PENALTY UNDER SECTION 271(1)(C). ACCORDINGLY, PENALTY OF ` 74,85,091, WAS MADE ON THE ENTIRE CLAIM OF DEDUCTION OF ` 2,04,55,261. 6. DURING THE FIRST APPELLATE PROCEEDINGS, THE LEARNED COMMISSIONER (APPEALS) HAS CONFIRMED THE PENALTY MAINLY ON THE G ROUND THAT AFTER THE SEARCH AND SEIZURE OPERATION, THE ASSESSEE HAD MADE DISCLOSURE AND ADMITTED UNDER SECTION 132(4) THAT ITS PROJECT COUL D NOT BE COMPLETED BEFORE 31 ST MARCH 2008 AND HAS ITSELF WITHDRAWN THE ENTIRE CLA IM. SOLELY ON THIS GROUND THE LEARNED COMMISSIONER (APPEALS) HAS GIVEN VERY DETAIL REASONING AS TO WHY PENALTY HAS TO BE CONFIRMED. SUCH A DETAI L FINDING HAS BEEN GIVEN M/S. ACME ASSOCIATES 4 BY THE LEARNED COMMISSIONER (APPEALS) FROM PAGE7 T O 16 OF THE APPELLATE ORDER. 7. BEFORE US, THE LEARNED COUNSEL, MR. VIJAY MEHTA, ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE PENALTY PROCEEDINGS HA S BEEN INITIATED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) VIDE ORDER DATED 28 TH DECEMBER 2007. THE REASON FOR INITIATION OF PENALT Y PROCEEDINGS WAS THAT IN ONE CASE, THE TWO MEMBERS O F THE FAMILY HAVE JOINT THE FLATS WHICH HAVE AGGREGATED TO MORE THAN 1,000 SQ.FT. AND, HENCE, THERE IS A VIOLATION OF THE PROVISIONS OF 80IB(10). THE R EASONS GIVEN BY THE LEARNED COMMISSIONER (APPEALS) IS THE POST EVENT I.E., SEAR CH AND SEIZURE ACTION, WHICH WAS CARRIED ON AT A MUCH LATER DATE I.E., ON 24 TH JULY 2008. AT THAT TIME, THE ASSESSEE HAD TIME UPTO 31 ST MARCH 2008 FOR COMPLETION OF THE PROJECT. THE PENALTY CANNOT BE CONFIRMED ON THE REA SONING GIVEN BY THE LEARNED COMMISSIONER (APPEALS) BECAUSE THOSE ARE PO ST ASSESSMENT EVENT AND COMPLETELY DIFFERENT FROM THE GROUND OF INITIAT ION OF PENALTY PROCEEDINGS BY THE ASSESSING OFFICER. ONCE THE PENALTY HAS BEEN INITIATED ON ONE GROUND, THE SAME CANNOT BE CONFIRMED ON ALL TOGETHER DIFFER ENT GROUNDS AND REASONING. MOREOVER, THE REASON BEING GIVEN BY THE ASSESSING OFFICER THAT SUCH A JOINING OF FLATS VIOLATES THE CONDITIONS PRO VIDED IN THE SECTION 80IB(10) AS THE AREA OF 1,000 SQ.FT. HAVE EXCEEDED, IS WHOLLY ERRONEOUS. IN THE PRESENT CASE, INSOFAR AS THE ASSESSEE IS CONCER NED, IT HAS SOLD TWO DIFFERENT FLATS VIDE TWO DIFFERENT AGREEMENTS AND L ATER ON IF THOSE TWO FLATS HAVE BEEN JOINT BY THE FAMILY MEMBERS, THE ASSESSEE CANNOT BE HELD RESPONSIBLE. IN ANY CASE, IT CANNOT BE ADVERSELY VI EWED IN THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C). IN SUPPORT OF THIS CONDITION, HE RELIED UPON THE VARIOUS DECISIONS OF THE TRIBUNAL. HE FURT HER SUBMITTED THAT WITHOUT PREJUDICE, THE ASSESSEE WAS ENTITLED TO CLAIM OF DE DUCTION UNDER SECTION 80IB(10) ON PERCENTAGE COMPLETION METHOD AND IN CAS E THE ASSESSEES PROJECT COULD NOT BE COMPLETED BY 31 ST MARCH 2008. FOR SUCH KIND OF SITUATION, THE CBDT HAS ISSUED A CIRCULAR THAT THE CLAIM CAN BE WITHDRAWN M/S. ACME ASSOCIATES 5 SUBSEQUENTLY. HOWEVER, THIS DOES NOT MEAN THAT AT T HE TIME OF FILING OF RETURN OF INCOME, THE ASSESSEES CLAIM WAS NOT GENU INE OR BOGUS, THEREFORE, THE PENALTY CANNOT BE LEVIED. HE STRONGLY RELIED UP ON THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN GUJARAT CREDIT CORPORAT ION V/S ACIT, [2008] 302 ITR (AT) 250 (ADH.) (SB). 8. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESE NTATIVE SUBMITTED THAT ADMITTEDLY AFTER THE SEARCH, IT CAME TO THE LIME LIGHT THAT THE ASSESSEE HAS NOT FULFILLED THE MAIN CONDITION OF CO MPLETING THE PROJECT, BEFORE 31 ST MARCH 2008, THEREFORE, THE ENTIRE CLAIM OF THE ASS ESSEE WAS NOT GENUINE AND, THEREFORE, THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) IS ENTIRELY CORRECT. HE THUS STRONGLY RELIED UPON T HE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) ON THIS SCORE. ON THE ISSUE OF LEVY OF PENALTY BY THE ASSESSING OFFICER, HE SUBMITTED THAT THERE WAS NO S UBSTANTIAL CHANGE IN LAW AND ONE OF THE CONDITIONS OF FLATS SOLD FOR LESS TH AN 1,000 SQ.FT., WAS CLEARLY VIOLATED, THEREFORE, THE PENALTY IS JUSTIFIED. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS, PERUSED THE RELEVANT FINDINGS OF THE ASSESSING OFFICER AS WELL AS THE LEARNED COMMISSIONER (APPEALS) AND THE MATERIAL PLACED ON R ECORD. THE ASSESSEE WHICH HAS DEVELOPED A HOUSING PROJECT HAD RECEIVED THE APPROVED PLANS ON 10 TH OCTOBER 2003. AS ON 31 ST MARCH 2005, THE ASSESSEE COMPLETED 65% OF THE WORK IN RESPECT TO THE SAID HOUSING PROJECT. SI NCE THE ASSESSEE WAS FOLLOWING PERCENTAGE COMPLETION METHOD, IT HAD OFFE RED NET PROFIT OF ` 2,04,55,261 AND HAS CLAIMED 100% DEDUCTION UNDER SE CTION 80IB(10). THE ASSESSEES CLAIM HAS BEEN DENIED BY THE ASSESSING O FFICER DURING THE COURSE OF SCRUTINY PROCEEDINGS UNDER SECTION 143(3), MAINL Y ON THE GROUND THAT IN ONE OF THE INSTANCES OF THE SALE, TWO MEMBERS OF TH E SAME FAMILY HAD ENTERED INTO TWO SEPARATE AGREEMENTS FOR TWO FLATS WHICH WAS LATER JOINED BY THEM WHICH RESULTED INTO AREA OF SLIGHTLY MORE THAN 1,000 SQ.FT. ONCE THE ASSESSEE HAS MADE TWO SEPARATE UNITS WHICH WAS LESS THAN 1,000 SQ.FT. AND HAS SOLD THESE UNITS SEPARATELY THEN THE SUBSEQUENT EVENT OF JOINING OF THE M/S. ACME ASSOCIATES 6 FLATS BY THE PURCHASERS CANNOT BE ADVERSELY VIEWED AGAINST THE ASSESSEE FOR DENYING THE CLAIM OF DEDUCTION UNDER SECTION 80IB(1 0), ON THE GROUND THAT IT HAS VIOLATED THE CONDITIONS OF SECTION 80IB(10). TH E ASSESSING OFFICER HAS INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) ON THIS CONDITION ONLY WHICH IS EVIDENT FROM ORDER DATED 28 TH DECEMBER 2007. THE APPEAL AGAINST THE SAID ASSESSMENT ORDER IN QUANTUM PROCEE DINGS WAS LATER ON WITHDRAWN BY THE ASSESSEE ON THE GROUND THAT PROCEE DINGS UNDER SECTION 153A HAVE BEEN INITIATED FOR THE ASSESSMENT YEAR 20 0506, IN THE WAKE OF SEARCH AND SEIZURE ACTION CONDUCTED ON 24 TH JULY 2008. THERE WAS NO FINDING ON MERIT BY THE LEARNED COMMISSIONER (APPEALS) QUA THIS DISALLOWANCE MADE BY THE ASSESSING OFFICER. IN THE PENALTY ORDER PASS ED BY THE ASSESSING OFFICER, THE ASSESSING OFFICER THOUGH NOTED THE EVE NT OF SEARCH AND SEIZURE OPERATION, HOWEVER, HAS LEVIED PENALTY SOLELY ON TH E GROUNDS AND REASONS MENTIONED IN THE ASSESSMENT ORDER WHICH IS EVIDENT FROM PARA7 TO 10 OF THE PENALTY ORDER. THE LEARNED COMMISSIONER (APPEALS) W HILE ADJUDICATING THE ISSUE ON WHICH PENALTY PROCEEDINGS WERE INITIATED H AS TRANSGRESSED AND HAS GONE ALTOGETHER ON DIFFERENT GROUND AND REASONING T HAT THE ASSESSEE WAS UNABLE TO COMPLETE THE PROJECT UP TO 31 ST MARCH 2008, WHICH WAS DISCOVERED ONLY DURING THE COURSE OF SEARCH AND SEIZURE OPERAT ION CARRIED OUT ON 24 TH JULY 2008. ALL THESE EVENTS ARE SUBSEQUENT TO THE I NITIATION OF PENALTY PROCEEDING I.E., AT THE TIME OF PASSING OF ASSESSME NT ORDER. ONCE AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C), THE CHARGE LEVIED UPON THE ASSESSEE WAS DIFFERENT THEN THE LEA RNED COMMISSIONER (APPEALS) CANNOT CONFIRM THE PENALTY ON ALL TOGETHE R DIFFERENT CHARGE OR BASIS. THE ASSESSEES EXPLANATION HAS TO BE SEEN QU A THE CHARGE LEVIED BY THE ASSESSING OFFICER WHEN THE PENALTY PROCEEDINGS WERE INITIATED. THE ASSESSEES EXPLANATION CANNOT BE REJECTED ON ALL TO GETHER FOR DIFFERENT CHARGE OR CONDITIONS AT A SUBSEQUENT STAGE. THUS, IN OUR O PINION, THE CONFIRMATION OF PENALTY BY THE LEARNED COMMISSIONER (APPEALS) ON DI FFERENT GROUND IS UNWARRANTED IN LAW. M/S. ACME ASSOCIATES 7 10. EVEN OTHERWISE ALSO, IT IS A SETTLED LAW THAT THE C ONDITIONS OF FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF PARTICU LARS OF INCOME HAVE TO BE SEEN AT THE TIME OF FILING OF THE RETURN OF INCOME. ONCE IT HAS BEEN FOUND THAT AT THE STAGE OF FILING OF RETURN OF INCOME, THE ASS ESSEE HAS FURNISHED INACCURATE PARTICULARS AND OR HAS CONCEALED PARTICU LARS OF INCOME THEN ONLYL THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) CAN BE INITIATED. IN THE PRESENT CASE, AT THE TIME OF FILING OF RETURN OF IN COME, THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) ON IT S PROFIT WHICH WAS BASED ON PERCENTAGE COMPLETION METHOD. WHETHER THE ASSESS EE COULD COMPLETE THE PROJECT UP TO 31 ST MARCH 2008 OR NOT, IS A MUCH SUBSEQUENT EVENT WHIC H CANNOT BE TAKEN INTO COGNIZANCE AT THE TIME OF FILI NG OF RETURN OF INCOME. IN CASE, IT IS FOUND THAT THE ASSESSEE HAS NOT FULFILL ED THE CONDITIONS OF COMPLETION OF PROJECT AFTER 31 ST MARCH 2008, THEN ONLY THE DEDUCTION ALLOWED CAN BE WITHDRAWN. THIS CAN BE DONE ONLY AT THE SUBS EQUENT STAGE I.E., POST 31 ST MARCH 2008. THIS HAS ALSO BEEN CLARIFIED BY THE CB DT VIDE INSTRUCTION NO.4 OF 2009 DATED 30 TH JUNE 2009 WHICH, FOR THE SAKE OF READY REFERENCE, IS REPRODUCED HEREIN BELOW: INSTRUCTION NO 04/2009, DATED: JUNE 30, 2009 SUB: SECTION 801B - DEDUCTION U/S 801B(10) AVAILABL E ON A YEAR TO YEAR BASIS WHERE THE ASSESSEE IS SHOWING PROFIT FROM PARTIAL C OMPLETION OF THE PROJECT IN EVERY YEAR 1. UNDER SUB-SECTION (10) OF SECTION 80-LB AN UNDER TAKING DEVELOPING AND BUILDING HOUSING PROJECTS IS ALLOWED A DEDUCTION OF 100% OF ITS PROFITS DERIVED FROM SUCH PROJECTS IF IT COMMENCED THE PROJECT ON O R AFTER 1.10.1998 AND COMPLETES THE CONSTRUCTION WITHIN FOUR YEARS FROM T HE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHOR ITY. 2. CLARIFICATIONS HAVE BEEN SOUGHT BY VARIOUS CCSIT ON THE ISSUE WHETHER THE DEDUCTION U/S 80-IB(L0) WOULD BE AVAILABLE ON A YEA R TO YEAR BASIS WHERE AN ASSESSEE IS SHOWING PROFIT ON PARTIAL COMPLETION OR IF IT WOULD BE AVAILABLE ONLY IN THE YEAR OF COMPLETION OF THE PROJECT UNDER SECTION 80-IB(10). 3. THE ABOVE ISSUE HAS BEEN CONSIDERED BY THE BOARD AND IT IS CLARIFIED AS UNDER: M/S. ACME ASSOCIATES 8 (A) THE DEDUCTION CAN BE CLAIMED ON A YEAR TO YEAR BASIS WHERE THE ASSESSEE IS SHOWING PROFIT FROM PARTIAL COMPLETION OF THE PR OJECT IN EVERY YEAR. (B) IN CASE IT IS LATE, FOUND THAT THE CONDITION OF COMPLETING THE PROJECT WITHIN THE SPECIFIED TIME LIMIT OF 4 YEARS AS STARTED IN S ECTION 80-IB(10) HAS NOT BEEN SATISFIED, THE DEDUCTION GRANTED TO THE ASSESS EE IN THE EARLIER YEARS IS SHOULD BE WITHDRAWN. 4. THE ABOVE INSTRUCTION WILL OVERRIDE EARLIER CLAR IFICATION ON THIS ISSUE CONTAINED IN MEMBER (R)S D.O. LETTER NO. 58/MISC./ 2008/CIT(IT&CT) DATED 29.04.2008 AND MEMBER (IT)S D.O. LETTER NO. 279/MI SC./46/08-ITJ DATED 2.5.2008. 5. THIS MAY KINDLY BE BROUGHT TO THE NOTICE TO THE NOTICE OF THE ALL ASSESSING OFFICERS IN YOUR CHARGE. F. NO.178/32/2009-ITA.I (RAMAN CHOPRA) DIRECTOR (ITAI) FROM THE ABOVE, IT IS AMPLY CLEAR THAT THERE IS NO PROHIBITION FOR THE ASSESSEE TO CLAIM DEDUCTION ON YEARTOYEAR BASIS W HEN THE ASSESSEE IS SHOWING PROFIT ON PARTIAL COMPLETION METHOD I.E., P ERCENTAGE COMPLETION METHOD. 11. THE CHARGE LEVIED BY THE ASSESSING OFFICER IN THE A SSESSMENT ORDER THAT THE ASSESSEE HAS VIOLATED THE CONDITIONS OF CO NSTRUCTING THE UNIT (FLATS) OF MORE THAN 1,000 SQ.FT. IS NOT CORRECT, BECAUSE I NSOFAR AS THE ASSESSEE IS CONCERNED, IT HAS CONSTRUCTED ALL THE UNITS LESS TH AN 1,000 SQ.FT. AND LATER ON THE PURCHASERS HAVE JOINED THE TWO FLATS, THIS CANN OT BE THE GROUND FOR DENYING THE BENEFIT OF THE CLAIM UNDER SECTION 80IB (10) TO THE ASSESSEE. AT LEAST THIS CANNOT BE ADVERSELY VIEWED IN THE PENALT Y PROCEEDINGS AND THE ASSESSEES EXPLANATION HAS NOT BEEN FOUND TO BE FAL SE OR ANY MATERIAL HAS BEEN BROUGHT ON RECORD, THAT RIGHT FROM THE DEVELOP MENT STAGE TO THE SALE OF FLATS, THE ASSESSEE HAS CONSTRUCTED FLATS FOR MORE THAN 1,000 SQ.FT. OR HAS SOLD ANY UNIT FOR MORE THAN 1,000 SQ.FT. THUS, ON T HIS CHARGE, THE ASSESSEE CANNOT BE HELD TO BE GUILTY OF FURNISHING OF INACCU RATE PARTICULARS OF INCOME OR FOR CONCEALMENT OF INCOME. THUS, THE PENALTY CAN NOT BE LEVIED OR CONFIRMED ON THIS SCORE. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER M/S. ACME ASSOCIATES 9 PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND DE LETE THE PENALTY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARN ED COMMISSIONER (APPEALS). 12. 1 #7 &) *1# 2 !# 8 ) 4# 9: ; 12. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. $ 2 5+ < =)7 13 TH SEPTEMBER 2013 2 > ; ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER 2013 SD/- . .. . B. RAMAKOTAIAH ACCOUNTANT MEMBER SD/- '# '# '# '# $% $% $% $% & & & & AMIT SHUKLA JUDICIAL MEMBER MUMBAI, =) =) =) =) DATED : 13 TH SEPTEMBER 2013 $ 2 .&#'? @?+# / COPY OF THE ORDER FORWARDED TO : (1) &) *1# / THE ASSESSEE; (2) 4! / THE REVENUE; (3) A () / THE CIT(A); (4) A / THE CIT, MUMBAI CITY CONCERNED; (5) ?!D> .&#&) , , / THE DR, ITAT, MUMBAI; (6) >E* F / GUARD FILE. /?# .&# / TRUE COPY $) / BY ORDER . 4. GH / PRADEEP J. CHOWDHURY !1I &)4 G! / SR. PRIVATE SECRETARY J / 9 4 / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI