PARADISE PREMISES P. LTD, MUMBAI V. ACIT CIR 10(3), MUMBAI

ITA 8206/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79352 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-03-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 26-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIKANT NAMDEO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.8206/M/2010 ( AY: 2003 - 2004) M/S. PARADISE PREMISES PVT LTD., 15/16, HAZATRI BAUG, L.B.S. MARG, VIKHROLI, MUMBAI - 400083. / VS. THE ACIT - CIR.10(3), MUMBAI. ./ PAN : AAACP2335A ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DHARMESH SHAH / RESPONDENT BY : SHRI SHRIKANT NAMDEO / DATE OF HEARING : 08 .7.2014 / DATE OF PRONOUNCEMENT : 16 .7.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 26.11.2011 IS AGAINST THE ORDER OF CIT (A) - 22, MUMBAI DATED 10.8.2010 FOR THE ASSESSMENT YEAR 2003 - 2004. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS IN PASSING ORDER U/S 250 OF THE ACT D ATED 10.8.2010 DISMISSING THE APPEAL FILED BY THE APPELLANT. 2. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT WAS BAD IN LAW AND INVALID. 3. THE LD CIT (A) O UGHT TO HAVE APPRECIATED THAT THE INITIATION OF THE PENALTY U/S 271(1)(C) OF THE ACT WAS VOID AB INITIO AND HENCE THE PENALTY ORDER WAS ALSO INVALID. 4. THE LD CIT (A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE PENALTY U/S 271(1)(C) OF THE ACT TO THE TUNE OF RS. 16,11,600/ - . 3. AT THE OUTSET, SHRI DHARMESH SHAH, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THIS IS A CASE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF INCOME EARNED BY THE ASSESSEE OUT OF CONSTRUCTION ACTIVITIES. ASSESSEE CLAI MED DEDUCTION U/S 80IB(10) OF THE ACT . SUBSEQUENTLY, THE CLAIM OF SUCH DEDUCTION WAS WITHDRAWN DURING THE FIRST APPELLATE PROCEEDINGS. IT IS THE CASE OF THE REVENUE THAT THE 2 ASSESSEE SOLD TWO ADJACENT FLATS TO THE CUSTOMERS WHO EVENTUALLY CONVERTED THE S AID FLATS INTO ONE, WHICH EXCEEDED THE PERMITTED AREAS UNDER STATUTE. CONSIDERING THE VIOLATION OF THE SAID PROVISIONS, AO LEVIED PENALTY U/S 271(1)(C) OF THE ACT. INFORMING THAT THE SIMILAR ISSUE CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL IN THE CASE O F THISTLE PROPERTIES PVT LTD VS. ACIT VIDE ITA NO.6873/M/2008, DATED 20.2.2013 FOR THE AY 2006 - 07, LD COUNSEL MENTIONED THAT THE FACTS ARE IDENTICAL AND THE VIOLATION, IF ANY, BY THE ASSESSEE MAY BE RELEVANT FOR CONFIRMING THE ADDITION ON MERITS. HOWEVER, REGARDING THE PENAL PROVISIONS, IT IS THE FINDING OF THE TRIBUNAL THAT THE PENALTIES ARE NOT SUSTAINABLE. IN THIS REGARD, ASSESSEE FILED A COPY OF THE SAID ORDER OF THE TRIBUNAL DATED 20.2.2013 (SUPRA) AND PARA 39 IS RELEVANT IN THIS REGARD. 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS CITED ORDER OF THE TRIBUNAL IN THE CASE OF THISTLE PROPERTIES PVT LTD (SUPRA). ON PERUSAL OF THE SAID ORDER OF THE TRIBUNAL (SUPRA), WE FIND THE FACTS ARE SIMILAR, WHERE THE ASSESSEE CONSTRUCTED 104 FLATS AND THE SAME WERE SOLD TO 52 PERSONS. THE FLATS SOLD ARE IN PAIRS AND THE AREA OF THE TWO FLATS IS EXCEEDED THE SPECIFIED LIMITS. IN SUCH FACT UAL MATRIX IN THE CASE OF THISTLE PROPERTIES PVT LTD (SUPRA), WHEREIN ONE OF US (AM) IS A PART TO THE ORDER, THE PENALTY U/S 271(1)(C) WAS HELD UNSUSTAINABLE IN LAW. CONSIDERING THE SAME, WE FIND THE PENALTY IS NOT SUSTAINABLE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED . 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 1 6 T H JULY, 2014. S D / - S D / - ( VIJAY PAL RAO ) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 1 6 /7/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI