Appeal details
Counselvise Citation
[2013] 120 COUNSELVISE.COM (IT) 3648 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-04-2013
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
24-01-2013
Assessment Year
2006-2007
Appeal Filed On
07-10-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BE NCH, MUMBAI . , !' #$ #$ #$ #$ %& ', () %*+ ( %' BEFORE SHRI D. MANMOHAN, V. P. AND SHRI SANJAY ARO RA, A. M. %./ I.T.A. NOS.6773 & 6775/MUM/2011 ( - $.- - $.- - $.- - $.- / / / / ASSESSMENT YEAR: 2006-07 & 2007-08) BHAVESH C. MEHTA PROP. M/S. MEHTA REALTORS GOKUL, AGASHI ROAD, VIRAR (W), VASAI TALUKA, THANE DISTRICT / VS. INCOME TAX OFFICER, WARD-4(1), THANE +/ () % ./ &0 % ./ PAN :ABPPM 2298 A ( /1 / APPELLANT ) : ( 23/1 / RESPONDENT ) /1 4 %( / APPELLANT BY : SHRI ANIL SATNE 23/1 5 4 %( / RESPONDENT BY : SHRI MOHIT JAIN %$ 5 6) / // / DATE OF HEARING : 24.01.2013 7. 5 6) / DATE OF PRONOUNCEMENT : 19.04.2013 *(8 / O R D E R PER SANJAY ARORA, A. M.: THIS IS A SET OF TWO APPEALS BY THE ASSESSEE AGITAT ING THE SEPARATE ORDERS BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, THANE (CIT (A) FOR SHORT) FOR TWO CONSECUTIVE YEARS, BEING ASSESSMENT YEARS (A.YS) 20 06-07 AND 2007-08, OF EVEN DATE, I.E., 25.06.2011, CONFIRMING THE LEVY OF PENALTY U/ S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) IN THE SUM OF RS.10.69 LAKHS AND RS.23.72 LAKHS FOR THE TWO YEARS RESPECTIVELY. THE FACTS AS WELL AS THE DECISI ON BY THE AUTHORITIES BELOW BEING THE 2 ITA NOS.6773 & 6775/MUM/2011 (A.YS. 2006-07 & 2007-08) BHAVESH C. MEHTA VS. ITO SAME, THE SAME WERE TAKEN UP FOR HEARING TOGETHER, AND ARE BEING DISPOSED OF VIDE A COMMON, CONSOLIDATED ORDER. THE FACTS 2.1 THE PRIMARY FACTS OF THE CASE ARE SIMPLE AN D UNDISPUTED. THE ASSESSEE IS A PROPRIETOR OF A PROPRIETARY CONCERN, M/S. MEHTA REA LTORS, CARRYING ON BUSINESS AS A DEVELOPER. THE ASSESSEE UNDERTOOK THE CONSTRUCTION OF A HOUSING PROJECT (COMPRISING BUILDINGS F2-134 (WINGS D & E), F1-136 (WINGS A & B ), E2-135 (WING C) BY THE NAME GOKUL SATSANG AT VIRAR (WEST), MUMBAI, ON A LAND BEARING SERIAL NO.164. HE RETURNED HIS INCOME FOR THE RELEVANT YEARS [ON 31.10.2006 (F OR A.Y. 2006-07) AND ON 31.10.2007 (FOR A.Y. 2007-08)], CLAIMING DEDUCTION U/S.80-IB(1 0) ON THE PROFITS OF THE GOKUL SATSANG PROJECT, AN EXCLUSIVELY RESIDENTIAL PROJEC T, IN THE SUM OF RS.33.43 LAKHS AND RS.69.13 LAKHS RESPECTIVELY. THE SAID PROJECT STOOD COMMENCED VIDE COMMENCEMENT CERTIFICATE DATED 18.08.2003 AND ITS COMPLETION WAS SIGNIFIED VIDE OCCUPANCY CERTIFICATE DATED 17.04.2006. 2.2 IN VERIFICATION OF THE SAID CLAIM U/S.143(3) , CARRIED OUT BY THE DEPARTMENT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR A.Y. 2 006-07 THROUGH INSPECTION BY A REGISTERED GOVERNMENT VALUER ON 18.12.2008, IT WAS FOUND THAT THE SAID HOUSING PROJECT WAS CONSTRUCTED ON A PLOT OF LAND ADMEASURING 3300 SQ. MTRS. EVEN IF THE AREA OF THE ADJOINING ROAD, ADMEASURING 270 SQ. MTRS., WAS TO B E INCLUDED, THE TOTAL AREA, AT 3570 SQ. MTRS., WOULD WORK TO LESS THAN ONE ACRE, WHICH IS T HE MINIMUM AREA OF THE PLOT OF LAND FOR A HOUSING PROJECT THEREON TO BE ELIGIBLE U/S.80-IB( 10). THE AREA OF ANOTHER RESIDENTIAL BUILDING BY THE NAME GOKUL PLAZA (Z-1) COULD NOT BE TAKEN INTO ACCOUNT, AS THE SAME WAS A DIFFERENT PROJECT; IN FACT, UNDERTAKEN BY A P ARTNERSHIP FIRM, M/S. MEHTA REALTY, IN WHICH THE ASSESSEE IS A PARTNER ALONG WITH HIS BROT HER, SHRI PARESH MEHTA. IN FACT, EVEN CONSIDERING THE LAND LYING BETWEEN THE GOKUL SATSAN G AND GOKUL PLAZA, THE AREA OF PLOT ON WHICH THE GOKUL SATSANG STANDS CONSTRUCTED WOULD BE LESS THAN ONE ACRE. FURTHER, EVEN IF THE TWO PROJECTS WERE CONSIDERED AS ONE, SO AS T O QUALIFY IN TERMS OF AREA, THE SAID 3 ITA NOS.6773 & 6775/MUM/2011 (A.YS. 2006-07 & 2007-08) BHAVESH C. MEHTA VS. ITO PROJECT, WHICH HAD TO BE COMPLETED BY 31.03.2008; T HE APPROVAL BEING PRIOR TO 01.04.2004, WAS COMPLETED SUBSEQUENTLY, SO AS TO BE INELIGIBLE FOR DEDUCTION. THIS IS AS THE CONSTRUCTION OF GOKUL PLAZA WAS ADMITTEDLY COMP LETED ONLY ON 23.10.2008. AS SUCH, NO BENEFIT COULD BE DERIVED BY THE ASSESSEE FROM TH E CONSTRUCTION OF THE SAID PROJECT. THE ASSESSEE'S CLAIM U/S.80-IB(10) WAS, ACCORDINGLY, DI SALLOWED VIDE ASSESSMENT DATED 24.12.2008, INITIATING THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT. THE ASSESSMENT FOR A.Y. 2007-08, THE SECOND YEAR UNDER REFERENCE, WAS ALSO FRAMED LIKEWISE, DISALLOWING CLAIM U/S.80-IB VIDE ASSESSMENT U/S.143(3) R.W.S. 1 47 DATED 21.12.2009, ALSO INITIATING PENALTY PROCEEDINGS. AS IT APPEARS, NO APPEALS STO OD PREFERRED BY THE ASSESSEE IN RESPECT OF THE SAID ASSESSMENTS. 2.3 IN THE PENALTY PROCEEDINGS, THUS INITIATED, THE ASSESSEE'S STAND WAS THAT THE PROJECT, WHEN COMMENCED (01.04.2004), WAS ON A LAND SIZE OF 4975 SQ. MTRS. HOWEVER, AS IT WAS FOUND BY HIM DURING THE COURSE OF THE BUSINESS THAT HE WOULD NOT BE ABLE TO COMPLETE THE PROJECT ON HIS OWN, HE ENTERED INTO A PARTNERSHIP, M/S. MEHTA REALTY, USING A PART OF THE LAND FOR THE SAME. IT IS THIS THAT LED TO THE SIZE OF THE PLOT OF THE LAND FALLING BELOW ONE ACRE. THE SAME WAS FOUND UNACCEPTABLE BY THE ASSESS ING OFFICER (A.O.) AS THE PLOT SIZE CONSTITUTES A BASIC CONDITION FOR THE CLAIM OF DEDU CTION U/S.80-IB(10). PENALTY WAS, ACCORDINGLY, LEVIED AT 100% OF THE TAX SOUGHT TO TH E EVADED FOR BOTH THE YEARS VIDE ORDERS DATED 14.03.2011 AND 28.06.2010 FOR THE TWO CONSECU TIVE YEARS RESPECTIVELY. THE SAME STOOD CONFIRMED IN APPEAL BY THE FIRST APPELLATE AU THORITY. THE ASSESSEE'S CLAIM THAT THE PROJECT WAS AN ELIGIBLE PROJECT U/S.80-IB(10) WHEN IT WAS COMMENCED WAS WITHOUT MERIT. THE ASSESSEE HAD CLEARLY NOT FURNISHED CORRECT PART ICULARS OF HIS INCOME PER HIS RETURNS, WHICH RATHER CAME TO LIGHT ONLY ON THE SURVEY DURIN G THE COURSE OF THE PROCEEDINGS. IN FACT, EVEN THE SAID SURVEY WAS UNDERTAKEN BY THE RE VENUE MUCH LATER, ON 18.12.2008 , SO THAT THE ASSESSEE COULD HAVE REVISED THE RETURNS FO R THE RELEVANT YEARS, HAVING BEEN FILED MUCH EARLIER. THE ASSESSEE'S CLAIM WAS IN FACT CONS IDERED AS MALA FIDE BY HIM. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 4 ITA NOS.6773 & 6775/MUM/2011 (A.YS. 2006-07 & 2007-08) BHAVESH C. MEHTA VS. ITO 3. WE HAVE HEARD THE PARTIES, AND PERUSED TH E MATERIAL ON RECORD. 3.1 OUR FIRST OBSERVATION IN THE MATTER IS THAT THE ASSESSEE'S CLAIM THAT HE HAD FILED THE CORRECT PARTICULARS OF INCOME PER HIS RETURNS IS NO T TRUE ON THE FACE OF IT. THE AUTHORITIES BELOW HAVE GIVEN A CATEGORICAL FINDING THAT THE FAC T AS REGARDS THE SIZE OF THE LAND ON WHICH THE PROJECT GOKUL SATSANG, QUA WHICH THE DEDUCTION U/S.80-IB(10) IS CLAIMED, IS LESS THAN ONE ACRE, WHICH REPRESENTS A QUALIFYING C ONDITION, CAME TO SURFACE ONLY DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR A.Y. 2 006-07 ON SURVEY ON 18.12.2008. ALL THAT THE ASSESSEE HAD TO DO IS TO SHOW US, WITH REF ERENCE TO ITS RETURN/S OR THE ACCOMPANYING COMPUTATIONS OF INCOME, THAT THIS 'FAC T' OR EXPLANATION, I.E., THAT A PART OF THE LAND HAD BEEN TRANSFERRED TO ANOTHER FIRM, WHIC H THOUGH WOULD NOT IMPACT THE ELIGIBILITY OF THE PROJECT U/S. 80-IB(10), STOOD CO NVEYED THROUGH OR INFORMED THE SAME. THE ASSESSEE HAS NOT DONE SO, WHICH IN FACT WOULD B E ITS SOLE CASE, ADEQUATELY EXPLAINING HIS POSITION. IN FACT, EVEN IN THAT CASE, HE WOULD BE REQUIRED TO SHOW THE TRUTH OF THIS STATEMENT, I.E., AS A MATTER OF FACT, OR ELSE WOULD AMOUNT TO A MIS-STATEMENT OR A MIS- LEADING INFORMATION. 3.2 HOWEVER, THIS WOULD NOT BY ITSELF LEAD TO THE L EVY OF PENALTY FOR THE SIMPLE REASON THAT NOT FURNISHING CORRECT PARTICULARS OF INCOME D OES NOT ESTABLISH FURNISHING INACCURATE PARTICULARS OF INCOME, BUT ONLY THAT WHAT IS BEING SAID IS NOT BORNE OUT OF THE RETURN. THAT IS, THE SAME, THOUGH NOT FORMING PART OF THE ASSESS EE'S RETURN, COULD YET BE A PART OF THE ASSESSEE'S EXPLANATION IN HOLDING A BONA FIDE VIEW THAT HE WAS ENTITLED TO DEDUCTION U/S.80-IB(10) IN RESPECT OF THE PROFITS ARISING OF THE GOKUL SATSANG PROJECT. TOWARD THIS, WE FIRST ADVERT TO THE DEED OF DISTRIBUTION DATED 0 2.01.2004 (PB PGS.11 TO 32), WHEREBY EIGHT PERSONS, INCLUDING THE ASSESSEE, LISTED THERE IN (AS PARTIES OF THE FIRST TO THE EIGHTH PART), BEING POSSESSED OF AND, AS STATED THEREIN, O THERWISE ENTITLED TO PIECES AND PARCELS OF LAND, BEARING (NEW) SURVEY NO. 164, FOR A TOTAL OF 139180 SQ. MTS., SITUATED AT VILLAGE BOILINJ, TALUKA VASAI, DISTRICT-THANE, DISTRIBUTED THE SAID LAND AMONGST THEMSELVES. THE PARTICULARS OF THE ASSESSEE'S SHARE IN THE SAID LAN D, WHICH IS AT A TOTAL OF 7557.432 SQ. MTRS, 5 ITA NOS.6773 & 6775/MUM/2011 (A.YS. 2006-07 & 2007-08) BHAVESH C. MEHTA VS. ITO IS SPECIFIED AT THIRD SCHEDULE TO THE SAID DEED, TH E RELEVANT PART OF WHICH IS REPRODUCED AS UNDER: THIRD SCHEDULE ABOVE REFERRED TO THE F.S.I. ALLOTTED TO THE PARTY OF THE SECOND PART MR. BHAVESH CHIMANLAL MEHTA. BUILDING TYPE & NO. NEW S. NO. BUILT UP AREA IN SQ. FT. BUILT UP AREA IN SQ. METRES Z1-138 164 36005.31 1344.975 F1-136 164 18216.13 1692.320 E2-135 164 9228.05 857.307 F2-134 164 17898.70 1662.830 THE ENTIRE LAND STOOD ALREADY CONVERTED, AND PERMIS SION FOR CONSTRUCTION OF RESIDENTIAL PREMISES THEREON GRANTED BY CITY AND IN DUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA (CIDCO). THE ASSESSEE'S EXPLANATION, I .E., THAT THE PROJECT WAS COMMENCED ON A TOTAL AREA OF 4975 SQ. MTRS., THOUGH A PART OF WHICH WAS LATER TRANSFERRED TO A FIRM, HAS, THEREFORE, A BASIS IN FACTS. THE NEXT THING THAT WOULD BE REQUIRED TO BE SEEN IS IF THE LAND ALLOCATED TO THE ASSESSEE, OR AT LEAST 4975 SQ. MTRS. OF IT, REFERRE D TO BY THE ASSESSEE, IS A CONTIGUOUS PIECE OF LAND. THIS IS AS ONLY WHERE IT IS SO COULD THE A SSESSEE CLAIM THE SAME TO BE, IN HIS VIEW, FORMING PART OF A SINGLE PROJECT, A PART OF WHICH W AS THOUGH LATER TRANSFERRED TO ANOTHER ON ACCOUNT OF A BUSINESS EXIGENCY. THERE IS NO FINDING IN THE MATTER BY THE AUTHORITIES BELOW. TWO, WHAT IS EQUALLY IMPORTANT IS THAT THE APPROVAL FOR THE 'TWO PROJECTS' WAS TAKEN AS A SINGLE HOUSING PROJECT. THIS IS AS IF THE TWO WERE CONSIDERED BY THE ASSESSEE HIMSELF AS SEPARATE PROJECTS, AND APPROVAL IN THEIR RESPECT SO UGHT SEPARATELY, I.E., INDEPENDENT OF EACH OTHER, THE TWO, IRRESPECTIVE OF THE DATE OF TH EIR COMMENCEMENT OR COMPLETION, ARE INDEPENDENT PROJECTS, ON SEPARATELY EAR-MARKED LAND S, WHICH, THEREFORE, CANNOT BE CONSTRUED AS ONE. THE ONLY COMMON FACTOR BETWEEN TH E TWO PROJECTS IN THAT CASE WOULD BE OF BEING PROMOTED BY A SINGLE PERSON, WHICH CANNOT BE CONSIDERED TO BE A RELEVANT FACTOR. WE STATE SO AS THE A.O. ARGUES THAT EVEN CONSIDERIN G THE LAND LYING BETWEEN THE GOKUL SATSANG AND GOKUL PLAZA PROJECTS, THE AREA OF THE L AND ON WHICH GOKUL SATSANG IS 6 ITA NOS.6773 & 6775/MUM/2011 (A.YS. 2006-07 & 2007-08) BHAVESH C. MEHTA VS. ITO CONSTRUCTED, WORKS TO LESS THAN ONE ACRE. THIS GIVE S AN IMPRESSION THAT THE LAND FOR THE TWO PROJECTS IS INDEPENDENT AND SEPARATELY EAR-MARK ED. THE DEDUCTION U/S.80-IB(10), IT NEEDS TO BE APPRECI ATED, IS QUA A PROJECT. IT IS, THEREFORE, NOT RELEVANT AS TO WHO ULTIMATELY DEVELO PS THE SAME. THE ELIGIBILITY OF THE PROJECT FOR DEDUCTION HAS TO BE VIEWED IN TERMS OF ITS QUALIFYING CONDITIONS. IF THE PROJECT QUALIFIES AS AN ELIGIBLE PROJECT AT THE BEGINNING, IT WOULD CONTINUE TO BE SO, IRRESPECTIVE THAT IT WAS LATER CONSIDERED PROPER THAT THE SAME M AY BE DEVELOPED BY ANOTHER. IT WOULD, THEREFORE, NOT BECOME INELIGIBLE ON THAT SCORE. OF COURSE, THIS IS PROVIDED IT DOES NOT LEAD TO, IN TERMS OF ITS APPROVAL, A DISQUALIFICATION TH ERE-UNDER. NO DOUBT, IF IT DOES NOT MEET THE OTHER STIPULATED CRITERIA, AS BEING COMPLETED W ITHIN THE TIME LIMIT PROVIDED UNDER THE STATUTE, THE PROFITS THERE-FROM WOULD NOT BE ELIGIB LE FOR DEDUCTION. THAT, HOWEVER, IS A MATTER SUBSEQUENT, AND NEITHER HAS BEEN ANY DEDUCTI ON CLAIMED ON THE GOKUL PLAZA PROJECT. FURTHER, THAT THE SAID TRANSFER IS MOTIVAT ED, SO THAT THE GOKUL SATSANG MAY BE CONSIDERED AS A SEPARATE PROJECT, COMPLETED WITHIN TIME, AND DEDUCTION CLAIMED THERE- UNDER, IS OF LITTLE CONSEQUENCE. IF AT ALL, IT RATH ER STRENGTHENS THE ASSESSEE'S CASE. EACH ONE IS ENTITLED TO ARRANGE HIS AFFAIRS IN A MANNER THAT WOULD REDUCE TAX INCIDENCE. AS NOTED EARLIER, IT MATTERS LITTLE AS TO WHO THE DEVELOPER IS; THE DEDUCTION BEING QUA A QUALIFYING PROJECT, AND WHICH WOULD NOT CEASE TO BE SO MERELY BECAUSE IT IS SUBSEQUENTLY DEVELOPED BY ANOTHER; IN FACT, A PARTNERSHIP FIRM BY THE ORIG INAL PROMOTER. AS SUCH, IN OUR VIEW, IF IT IS INDEED SO THAT THE TWO PROJECTS WERE CONCEIVED A ND APPROVED AS ONE, AND A PART OF THE PROJECT, STYLED GOKUL PLAZA, SUBSEQUENTLY TRANSFE RRED, SO THAT THE BALANCE PROJECT COULD BE COMPLETED WITHIN THE TIME FRAME PROVIDED BY LAW, THE SAME LENDS CREDENCE AND SUBSTANCE TO THE ASSESSEE'S CASE OF HOLDING A HONES T AND GENUINE BELIEF OF BEING ENTITLED TO THE CLAIM, RATHER THAN EXHIBITING HIS MALA FIDES , AS INFERRED BY THE LD. CIT(A). NO DOUBT, ON MERITS, NO CLAIM WOULD YET BE ELIGIBLE, AS THE T OTAL PROJECT CANNOT BE SAID TO HAVE BEEN COMPLETED WITHIN THE TIME PROVIDED BY LAW, YET THE HOLDING OF A REASONABLE BELIEF OF A PART OF THE PROJECT BEING ENTITLED TO DEDUCTION WOU LD FORM A REASONABLE CAUSE IN TERMS OF 7 ITA NOS.6773 & 6775/MUM/2011 (A.YS. 2006-07 & 2007-08) BHAVESH C. MEHTA VS. ITO SECTION 273B OF THE ACT, SAVING PENALTY. THE MATTER WOULD, THEREFORE, NEED TO BE RESTORED TO THE FILE OF THE A.O. FOR THE RELEVANT FACTUAL FI NDINGS. 3.3 THE ASSESSEE HAS BEFORE US ALSO RELIED ON THE D ECISION BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VANDANA PROPERTIES (2012) 206 TAXMAN 584 (BOM) (COPY ON RECORD/PB PGS.47-54), UPHOLDING THE ORDER BY THE TRIBUNAL, REPORTED AT [2009] 31 SOT 392 (PB PGS. 33-46). THE HON'BLE HIGH COURT IN ITS SAID DECISION HAS REFERRED TO AND RELIED UPON THE LETTER BY THE CBDT DATED 04.05.2001 TO THE MAHARASHTRA CHAMBER OF HOUSING INDUSTRY, CLARIFYING THAT ANY PROJECT WHICH HAS BEEN APPROVED BY THE LOCAL AUTHORITY AS A HOUSING PROJECT WOULD BE ADEQUATE FO R THE PURPOSE OF SECTIONS 10(23G) AND 80-IB(10). IT WOULD, THUS, BE NOTED THAT THIS IS IN AGREEMENT WITH OUR UNDERSTANDING OF THE HOUSING PROJECT AS EXPLAINED (SUPRA). FURTHER, THE HON'BLE HIGH COURT HAS PER ITS SAID DECISION HELD THAT THE LAND HAS TO BE RECKONED WITH REFERENCE TO A CONTIGUOUS PIECE OF LAND, AND NOT PROJECT-WISE. THE CRITERIA OF LAND SI ZE AS A QUALIFYING CONDITION, THUS, LOOSES ITS SIGNIFICANCE, AND MORE THAN ONE HOUSING PROJECT CAN BE CONSIDERED AS HAVING BEEN CONSTRUCTED ON THE SAME PIECE OF LAND, I.E., U/S.80 -IB(10)(B), THE CLAUSE SPECIFYING THE CONDITION AS TO THE LAND SIZE (REFER PARA 29 OF THE JUDGMENT). AS SUCH, THE LAND SEIZE WOULD NEED TO BE TAKEN AS A WHOLE, AND NOT DIVIDED OR ALLOCATED AMONGST THE HOUSING PROJECTS CONSTRUCTED OR TO BE CONSTRUCTED THEREON, SO THAT WHERE NOT LESS THAN ONE ACRE, THE DEDUCTION U/S.80-IB(10) WOULD HOLD. AS SUCH, WHAT W OULD, THEREFORE, NEED TO BE CONFIRMED IS NOT WHETHER THE TWO PROJECTS, GOKUL SA TSANG AND GOKUL PLAZA, WERE CONCEIVED AND APPROVED AS INDEPENDENT PROJECTS, OR AS ONE SINGLE PROJECT (FOR THE ASSESSEE TO BE CONSIDERED AS HOLDING A BONA FIDE BELIEF OF BEING ENTITLED TO A DEDUCTION ON A PART OF THE PROJECT), AS STATED BY US IN THE FOREGOING PART OF THIS ORDER, BUT WHETHER THE TWO ARE ON A CONTIGUOUS PIECE OF LAND AND THE COMBINED AREA OF THE TWO IS NOT LESS THAN ONE ACRE. THIS IS AS, IF SO, THE ASSESSEE HAS A ARGUABLE CASE FOR DEDUCTION, SO THAT NO PENALTY COULD BE LEVIED, I.E., IN VIEW OF THE DECISION OF THE HON 'BLE HIGH COURT IN THE CASE OF VANDANA PROPERTIES (SUPRA), WHICH IS BINDING ON US. IN FACT, THIS APPE ARS TO BE THE CASE IN VIEW OF THE AO ALSO INCLUDING THE LAND LYING BETWEEN THE TW O PROJECTS IN SUBSTANTIATING HIS CASE 8 ITA NOS.6773 & 6775/MUM/2011 (A.YS. 2006-07 & 2007-08) BHAVESH C. MEHTA VS. ITO AS TO THE LEVY OF PENALTY. SUBJECT TO THIS FINDING, FOR WHICH WE REMIT THE MATTER BACK TO THE FILE OF THE A.O., THE PENALTY FOR BOTH THE YEARS IS DELETED. 4. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED ON THE AFORESAID TERMS. 9 6: -96 5 ;)6 +$< 6 5 &6 = ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH APRIL, 2013 *(8 5 7. )( >*: 5 ? SD/- (D. MANMOHAN) (SANJAY ARORA) !' / VICE PRESIDENT () %*+ / ACCOUNTANT MEMBER MUMBAI; >* DATED : 19.04.2013 $..%./ ROSHANI , SR. PS *(8 5 26@ A(@. *(8 5 26@ A(@. *(8 5 26@ A(@. *(8 5 26@ A(@.6 66 6/ COPY OF THE ORDER FORWARDED TO : 1. /1 / THE APPELLANT 2. 23/1 / THE RESPONDENT . 3. B ( ) / THE CIT(A) 4. B / CIT - CONCERNED 5. @$E? 26 , , / DR, ITAT, MUMBAI 6. ?- F / GUARD FILE. *(8% *(8% *(8% *(8% / BY ORDER, / // /% & % & % & % & (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI 9 ITA NOS.6773 & 6775/MUM/2011 (A.YS. 2006-07 & 2007-08) BHAVESH C. MEHTA VS. ITO ITA NO. 6773 & 6775/MUM/2011 I HAVE CAREFULLY PERUSED THE ORDER PASSED BY THE LE ARNED ACCOUNTANT MEMBER AND ALSO DISCUSSED WITH THE LEARNED MEMBER. THE CASE OF THE ASSESSEE IS THAT WHEN IT STARTED THE PROJECT ON 01.04.2004 T HE SIZE OF THE LAND USED FOR THE PROJECT WAS 4975 SQ. MTRS AND EVEN TILL THE DAT E OF COMPLETION OF THE PROJECT I.E. TILL 17.04.2006 THE SIZE OF THE PLOT REMAINED THE SAME BUT THE ASSESSEE USED A PORTION OF THE LAND FOR ANOTHER PROJECT AS ITS SH ARE OF CAPITAL IN THAT PROJECT ON 22.02.2008. IN OTHER WORDS, IF THE ENTIRE LAND IS T AKEN AS A CONTAGIOUS PIECE OF LAND IT IS MORE THAN ONE ACRE, THOUGH IT IS UTILISE D FOR DEVELOPMENT OF MORE THAN ONE PROJECT. PLACING RELIANCE UPON THE DECISI ON OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF VANDANA PR OPERTIES 206 TAXMAN 584 IT WAS CONTENDED THAT THE ASSESSEE HAS NOT FURNISHED I NCORRECT PARTICULARS OF INCOME OR CONCEALED INCOME SINCE HE WAS OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON THE PROJECT UNDER REFERENCE. MY LEARNED BROTHER APPEARS TO BE OF THE VIEW THAT IF THE FACTS AS STATED BY THE ASSESSEE ARE PROVED THEN PENALTY IS N OT LEVIABLE. HOWEVER, THE RECORD DO NOT REFLECT THE FACTS IN ITS ENTIRETY AND HENCE THE MATTER WAS RESTORED TO THE FILE OF THE AO FOR BOTH YEARS WITH A SPECIFI C MENTION THAT IF THE FACTS STATED BY THE ASSESSEE, AS MENTIONED, ARE PROVED, P ENALTY NEED NOT BE LEVIED. I AGREE WITH THE VIEW TAKEN BY THE LEARNED ACCOUNTANT MEMBER. SD/- (D. MANMOHAN) VICE PRESIDENT
Mehul