DCIT, Jaipur V. RENU AGARWAL, Jaipur

ITA 764/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4865 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 29-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NASIR ALI
• Keywords: Wrong claim; Deemed dividend; Revised return
• Section: 80IB; 139(5)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR JH HKKXPUN] YS[KK LNL; ,O JH DQY HKKJR] U;KF;D L NL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHAR AT, JM VK;DJ VIHY LA-@ ITA NO. 764/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 THE DCIT CENTRAL CIRCLE- 3 JAIPUR CUKE VS. SMT. RENU AGARWAL 25, DAYAL NAGAR GOPALPURA BYEPASS, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAOPA 6576 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY :SHRI NASIR ALI, CIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI VIJAY GOYAL LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15/12/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 20 /12/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDER OF LD. CIT(A) -4, JAIPUR DATED 31.08.2015 FOR THE ASSESSMENT YEAR 201 1-12 RAISING THEREIN FOLLOWING GROUND OF APPEAL:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN DELETING THE PENAL TY OF RS. 1,47,78,000/- IMPOSED BY THE AO U/S 271(1)(C) OF TH E I.T. ACT, 1961. ITA NO. 764/JP/2015 THE DCIT, CENTRAL CIRCLE- 3, JAIPUR VS. SMT. RENU AGARWAL, JAIPUR . 2 2.1 THE FACTS OF THE ISSUE AS EMERGES FROM THE ORDE R OF THE LD. CIT(A) IS AS UNDER:- 3.1.3 I HAVE DULY CONSIDERED ASSESSEE'S SUBMISSION AND CAREFULLY GONE THROUGH PENALTY ORDER PASSED BY THE AO. I HAVE ALSO PERUSED THE FACTS OF THE CASE. ON PERUSAL , FOLLOWING POINTS EMERGE:- (I) THE AO LEVIED PENALTY U/S 271(1)( IN RESPECT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB OF T HE ACT AMOUNTING TO RS. 4,58,25,167/- BY HOLDING THE ASSES SEE HAD MADE A WRONG CLAIM OF DEDUCTION U/S 80IB OF THE ACT . THE FACTUAL POSITION IS THAT THE ASSESSEE CLAIMED DEDUC TION U/S 80IB ON THE BASIS OF AUDIT REPORT IN FORM NO. 10CCB .THE CLAIM OF THE ASSESSEE WAS BASED ON LEGAL DOCUMENT N AMED DEVELOPMENT AGREEMENT. IN THE ASSESSMENT PROCEE DINGS ALSO, ASSESSEE HAS SUBMITTED HER EXPLANATION FOR JU STIFICATION OF CLAIM OF DEDUCTION U/S 80IB VIDE LETTER DATED 18 -03-2013 (REFER PB PG 126 TO 128) AND LETTER DATED 21-03-201 3 & 26- 03-2013 (REFER PB PG 129 TO 131). THEREFORE, THE CL AIM OF ASSESSEE FOR DEDUCTION U/S 80IB WAS BONA FIDE AND BASED ON EXPERTS ADVICE. IN THE CASE OF GURU PRAGYA, THE CLA IM OF DEDUCTION OF 80IB FOR A.Y. 2010-11 WAS DISALLOWED B Y THE AO FOR WANT TO COMPLETION CERTIFICATE BUT THE SAME AS ALLOWED BY CIT (APPEALS)-1, JAIPUR VIDE ORDER DATED 24-2- 2015 IN ITA NO. 25/13-14. HOWEVER, THE ASSESSEE WIT HDREW HER CLAIM OF DEDUCTION U/S 80IB BY FILING REVISED R ETURN U/S 139(5) OF THE ACT WITHIN THE TIME ALLOWED BY THE A CT AND ALSO PAID TAXES ALONGWITH INTEREST THEREOF. IT IS A LSO PERTINENT TO MENTION NOTE THAT THE ASSESSEE FILED REVISED ROI BEFORE ANY SHOW CAUSE NOTICE FROM THE AO OR BRINGING TO TH E NOTICE TO THE ASSESSEE ABOUT ENQUIRIES CONDUCTED BY THE AO OF THE DEVELOPER. AO SIMPLY REJECTED THE REVISED ROI U/S 139(5) OF THE ACT ON THE GROUND THAT THERE WAS NO INADVERTENT MISTAKE, DISCOVERY OF OMISSION OR WRONG STATEMENT IN THE ROI (REFER PG 23-24 OF THE PENALTY ORDER). ASSESSEE IS ALLOWED UNDER THE LAW TO REVISE HER ROI WITHIN THE STIPULATED TIME FR AME U/S 139(5) OF THE ACT. THE DICTIONARY MEANING OF OMISSI ON IS THE ACT OF NOT INCLUDING OR NOT DOING. FURTHER, THE ITA NO. 764/JP/2015 THE DCIT, CENTRAL CIRCLE- 3, JAIPUR VS. SMT. RENU AGARWAL, JAIPUR . 3 DICTIONARY MEANING OF MISTAKE IS AN ACTION OR AN OPINION THAT IS NOT CORRECT. THEREFORE, THE ACTIO N OF WITHDRAWAL OF 80IB CLAIM COMES WITHIN THE PURVIEW O F MISTAKE. AO HAS SUMMARILY REJECTED THE EXPLANATION OF THE ASSESSEE WITH REGARD TO THE REVISED RETURN FILED. (II) AO HAS LEVIED PENALTY U/S 271(1) ON THE GROUND OF FURNISHING OF INACCURATE PARTICULARS OF I NCOME BY THE ASSESSEE. IT IS A FACT THAT CLAIMS MADE BY THE ASSESSEE WERE BASED ON EXPERTS ADVICE AND BACKED BY CERTIFIC ATION ISSUED IN FORM 10CCB. FURTHER, REVISED RETURN SO FI LED WAS ALSO A VALID RETURN FILED WITHIN THE STIPULATED TIM E. AR HAS ALSO RELIED UPON THE HON'BLE JURISDICTIONAL HIGH CO URTS DECISION IN THE CASE OF CHANDER PAL BAGGA & HARSHWA RDHAN CHEMICALS & MINERALS LTD. (SUPRA) WHEREIN IT IS HEL D THAT NO PENALTY CAN BE IMPOSED IF EXEMPTION IS CLAIMED ON T HE BASIS OF ADVICE OF ADVOCATE. EVEN THE HON'BLE APEX COURT IN THE CASE OF PRICE WATERHOUSE COOPERS (P) LTD. (SUPRA) H AS HELD THAT INADVERTENT AND BONA FIDE ERROR DOES NOT AMOUN T TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS . (III) EVEN OTHERWISE ALSO AS PER SUB CLAUSE 3 OF SECTION 271AAA OF THE ACT, NO PENALTY IS LEVIBALE U /S 271(1) OF THE ACT ON THE FACTS AND CIRCUMSTANCES O F THE CASE. (IV) IT IS ALSO A FACT THAT DEEMED DIVIDEND U/S 2(22)(E) IS A DEEMING PROVISION AND ADDITION WAS MA DE ON THE BASIS OF ENTRIES IN THE REGULAR BOOKS OF ACCOUN TS WHICH IS CREATED UNDER DEEMING FICTION AND IN SUCH CASE, PEN ALTY FOR CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS CANNOT BE LEVIED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FURNISHED EXPLANATION VIDE LETTER DATE D 27-03- 2013 (REFER PB PG 183 TO 188) THAT TRANSACTION IS I N THE NATURE OF COMMERCIAL TRANSACTION AND THE ASSESSEE R ECEIVED MONEY FROM THE COMPANY AGAINST THE AGREEMENT TO SAL E OF LAND TO THE COMPANY AND ASSESSEE HAS SUBMITTED EVID ENCE IN SUPPORT OF CONTENTION. AO HAS SIMPLY REJECTED THE EXPLANATION WITHOUT ANY POSITIVE MATERIALS WHICH CA N BE PROVE ASSESSEE'S EXPLANATION AS FALSE OR UNTRUE. ITA NO. 764/JP/2015 THE DCIT, CENTRAL CIRCLE- 3, JAIPUR VS. SMT. RENU AGARWAL, JAIPUR . 4 IN VIEW OF FACTS AND CIRCUMSTANCE OF THE CASE AS MENTIONED ABOVE, LEVY OF PENALTY OF RS. 1,47,78,000 /- U/S 271(1) OF THE ACT CANNOT BE SUSTAINED, HENCE DELET ED. 2.2 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDER OF THE AO. 2.3 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A) AND FILED THE WRITTEN S UBMISSION WHICH HAS BEEN TAKEN INTO CONSIDERATION WHILE ADJUDICATING UP ON THE ISSUE IN QUESTION. 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. A SEARCH WAS CONDUCTED ON 22-0 9-2010 IN THE CASE OF SHREE RAM GROUP, JAIPUR TO WHICH THE ASSESSEE BELON GS. THE ASSESSEE IS AN INDIVIDUAL AND SHE DERIVES INCOME FROM REAL ESTA TE BUSINESS, AND CAPITAL GAIN. THE ASSESSEE PURCHASED AGRICULTURAL L AND AND GOT IT CONVERTED INTO RESIDENTIAL AND COMMERCIAL PLOT AFTER GETTING THE SAME APPROVED FROM JDA (I.E. JAIPUR DEVELOPMENT AUTHORITY). THE ASSESS EE FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 7,11,74,000/-/ - ON 27-09-2011 U/S 139(1) (COPY AT PB PAGE 8-12) . IN ORIGINAL RETURN FILED U/S 139(1), SHE CLAIMED DEDUCTION OF RS. 4,58,25,167/- U/S 80IB(10) AGAINST THE JOINT VENTURE HOUSING PROJECT WITH GURU PRAGYA INFRASTRUC TURE PVT LTD. IN ITA NO. 764/JP/2015 THE DCIT, CENTRAL CIRCLE- 3, JAIPUR VS. SMT. RENU AGARWAL, JAIPUR . 5 SUPPORT OF THIS CLAIM, THE ASSESSEE FILED CERTIFICA TE OF CA IN FORM NO 10CCB (COPY AT PB PAGE 36-42) . HOWEVER, WHEN IT CAME TO THE KNOWLEDGE OF THE ASSESSEE THAT THE CLAIM OF DEDUCTI ON U/S 80IB(10) WOULD ATTRACT THE PROLONGED LITIGATION WITH DEPARTMENT, S HE CHOOSE THE PATH OF PEACE AND IN ORDER TO AVOID THE LITIGATION, SHE WIT HDREW THE CLAIM OF DEDUCTION U/S 80IB VIDE LETTER DATED 26.03.2013 (COPY AT PB PAGE 130- 131) AND FILED REVISED RETURN U/S 139(5) OF INCOME TAX ACT WITHIN THE TIME ALLOWED BY THE LAW. THE REVISED RETURN OF INCO ME WAS FILED ON 26- 03-2013 DECLARING TOTAL INCOME AT RS. 11,69,99,170/ - (COPY AT PB PAGE 43-47) AND DUE TAXES WERE PAID ALONGWITH THE REVISED RETUR N THEREON. IN THE ASSESSMENT, THE AO MADE A FURTHER ADDITION OF R S. 20,00,000/- ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E) OF INCOME T AX ACT, 1961 TREATING THE BUSINESS ADVANCE TAKEN FROM COMPANY NA MING M/S ASHISH BUILDCON PVT LTD AS LOANS & ADVANCES COVERED U/S 2( 22)(E) OF INCOME TAX ACT, 1961 (COPY OF ORDER AT PB PAGE 156 TO 182) . THE AO REJECTED THE SUBMISSION OF THE ASSESSEE BECAUSE OF MAINLY FO LLOWING REASONS: - (I) CLAIM OF DEDUCTION U/S 80IB(10) IS NOT BONAFIDE AS THE ASSESSEE ACTUALLY SOLD LAND AND SHOWED THE SAME AS CONTRIBUTED TO JOINT VENTURE. (II) THE ASSESSEE REVISED THE RETURN ONLY ON 26.03. 2013 AFTER KNOWING THE VIEW OF THE DEPARTMENT IN RESPECT OF WRONG CLAIM OF DEDUCTION U/S 80IB. ITA NO. 764/JP/2015 THE DCIT, CENTRAL CIRCLE- 3, JAIPUR VS. SMT. RENU AGARWAL, JAIPUR . 6 (III) THE REVISED RETURN IS NOT VALID AS THERE WAS NO DISCOVERY OF ANY OMISSION OR WRONG STATEMENT IN THE ORIGINAL RETURN OF INCOME. (IV) THE IMMEDIATE SOURCE OF PROFIT IS FROM SALE OF LAND AND NOT FROM DEVELOPMENT OF PROJECT. (V) FINDINGS HAVE BEEN NOTICED BY THE A.O. AT THE T IME OF ASSESSMENT, HENCE PENALTY U/S 271(1)(C) CAN BE IMPOSED AND THERE IS NO OVERLAPPING WITH SECTION 271AAA. (VI) PENALTY IS IMPOSED FOR INTENTIONALLY FILLING I NACCURATE PARTICULARS OF INCOME. THE AO THUS PASSED AN ORDER UNDER SECTION 271(1) (C) OF I.T. ACT, 1961 IMPOSING A PENALTY OF RS. 1,47,78,000/- BEING 100% OF TAX LEVIABLE ON FOLLOWING INCOME TREATING THE SAME AS CONCEALED INC OME OF THE ASSESSEE: - I) RS. 4,58,25,167/- ON A/C OF WITHDRAWALS OF DEDUCTIO N U/S 80IB OF INCOME TAX ACT, 1961 ON INCOME EARNED ON JOINT VENTURE HOUSING PROJECT WITH GURU PRAGYA INFRASTRUCTURE PVT LTD. II) RS. 20,00,000/- ON A/C OF ADDITION U/S 2(22)(E) OF INCOME TAX ACT, 1961. FURTHER THE AO ALSO IMPOSED PENALTY U/S 271AAA OF I NCOME TAX ACT, 1961 BY PASSING A SEPARATE ORDER ON ALLEGED UNDISCL OSED INCOME WHICH SHE DETERMINED BY TREATING THE LAND UNDER JV AS OUTRIG HT SALE ON INCOME OF RS. 10,60,80,000/-, THEREFORE ON SAME INCOME TWO DIFFER ENT PENALTIES WERE ITA NO. 764/JP/2015 THE DCIT, CENTRAL CIRCLE- 3, JAIPUR VS. SMT. RENU AGARWAL, JAIPUR . 7 IMPOSED ONE TREATING THE UNDISCLOSED INCOME AND OTH ER FOR CONCEALMENT OF PARTICULARS OF INCOME. THE ASSESSEE CARRIED THE MAT TER BEFORE THE LD. CIT(A) WHO CANCELLED THE PENALTY VIDE HIS DETAILED ORDER D ATED 31-08-2015. IT IS NOTED FROM THE RECORDS THAT THE CLAIMS MADE BY THE ASSESSEE WERE BASED ON EXPERTS ADVICE AND BACKED BY CERTIFICATION ISSUED I N FORM 10CCB. IT IS ALSO NOTED THAT THE REVISED RETURN SO FILED WAS ALSO A V ALID RETURN FILED WITHIN THE STIPULATED TIME. THE LD. AR RELIED ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CHANDER PAL BAGGA & HARSHVARDH AN CHEMICALS LTD WHEREIN IT IS HELD THAT NO PENALTY CAN BE IMPOSED I F EXEMPTION IS CLAIMED ON THE BASIS OF ADVICE OF ADVOCATE. THE HONBLE SUPREM E COURT IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD HELD THAT INADVER TENT AND BONA FIDE ERROR DOES NOT AMOUNT TO CONCEALMENT OR FURNISHING OF IN ACCURATE PARTICULARS. IT IS ALSO NOTED THAT THE ASSESSEE HAD FURNISHED THE E XPLANATION VIDE LETTER DATED 27-03-2013 (PG 183 TO 188) THAT TRANSACTION I S IN THE NAME NATURE OF COMMERCIAL TRANSACTION AND THE ASSESSEE RECEIVED MO NEY FROM THE COMPANY AGAINST THE AGREEMENT TO SALE OF LAND TO THE COMPAN Y AND ASSESSEE HAS PROVIDED ALL THE EVIDENCE IN SUPPORT OF HER CONTENT ION. THUS IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE CONCU R WITH THE FINDINGS OF THE LD. CIT(A) ON THE ISSUE IN QUESTION. THUS THE A PPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO. 764/JP/2015 THE DCIT, CENTRAL CIRCLE- 3, JAIPUR VS. SMT. RENU AGARWAL, JAIPUR . 8 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 -12-20 16. SD/- SD/- DQY HKKJR HKKXPUN (KUL BHARAT) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20/12/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT,CENTRAL CIRCLE- 3 JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SMT. RENU AGARWAL, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 764/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR