ADDL CIT 17(2), MUMBAI V. ROYAL ENTERPRISES, MUMBAI

ITA 829/MUM/2013

• Counselvise Citation: 82919914 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TRIPURA SUNDARI
• Assessee Lawyers: RAHUL K HAKANI
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 829/MUM/2013 ASSESSMENT YEAR: 2007-08 ACIT-17(2), ROOM NO. 217, 2 ND FLOOR, PIRAMAL CHAMBERS, PAREL MUMBAI- 400 012 VS. M/S. ROYAL ENTERPRISES, 4/98, AMRIT VILLA, R.A. KIDWAI ROAD, WADALA, MUMBAI (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- AAAFR 1378 Q ASSESSEE BY : SHRI RAHUL K. HAKANI REVENUE BY : SMT. TRIPURA SUNDARI DATE OF HEARING : 06.08.2014 DATE OF PRONOUNCEMENT : 28.08.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A)-17, MUMBAI DATED 19.11.2012 DELETING THE PENALTY OF RS.8,76,040/- LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME-TAX ACT FOR T HE ASSESSMENT YEAR 2007-08. 2. BRIEFLY STATED, THE ASSESSEE, A REGISTERED FIRM, ENGAGED IN THE BUSINESS OF CONSTRUCTION ACTIVITY, DURING THE YEAR UNDER CONSID ERATION HAD DECLARED A TOTAL INCOME AT RS.1,00,00,000/-. THE ASSESSEE HAD CONSTR UCTED NUMBER OF BUILDINGS WHICH WERE NAMED AS 2, 3 TO 7, 8 & 9 AND 10 &11. BU ILDING NOS 2, 3 TO 7, 10 & 11 WERE QUALIFIED FOR DEDUCTION U/S 80IB AND BUILDING NOS. 8 & 9 DID NOT QUALIFY FOR DEDUCTION U/S 80IB. THE ASSESSEE HAD OFFERED THE IN COME FROM BUILDINGS 8 & 9 OF 1 CRORE DURING THE YEAR CONSIDERATION. IN THE ASSESSM ENT FRAMED, THE AO OBSERVED THAT THE COST OF BUILDING 8 & 9 HAD BEEN SHOWN MORE AS COMPARED TO OTHER BUILDINGS. ACCORDINGLY, THE AO AVERAGED OUT THE TOT AL COST AND ESTIMATED AN ADDITIONAL INCOME OF RS.26,02,600/- ARISING FROM BU ILDING NO. 8 & 9. THE ASSESSEE DID NOT PREFER ANY APPEAL AGAINST THE ADDITION MADE BY THE AO. CONSEQUENTLY, THE ITA NO. 829/MUM/2013 M/S. ROYAL ENTERPRISES, ASSESSMENT YEAR: 2007-08 2 AO INITIATED THE PENALTY PROCEEDING U/S 271(1)(C) W HICH RESULTED IN THE LEVY OF PENALTY OF RS.8,76,040/-. ON APPEAL AGAINST THE PEN ALTY ORDER, THE LD. CIT(A) DELETED THE IMPUGNED PENALTY ON THE REASON THAT THE ASSESSEE DID NOT PROVIDE INACCURATE PARTICULARS OF INCOME OR CONCEALED ANY I NCOME. AGGRIEVED BY THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE US. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT IS PERTINENT TO MENTION THAT THE PERUSAL OF THE ASSESS MENT ORDER INDICATES THAT THE AO HAS NOT POINTED OUT ANY SPECIFIC EVIDENCE REGARDING THE INFLATION OF EXPENSES OR MAKING AN INFLATED CLAIM U/S 80IB. THE AO ENTERED I NTO A SCIENTIFIC EXERCISE AND WORKED OUT THE AVERAGE COST OF CONSTRUCTION. THE BU ILDING NOS. 8 & 9 ARE DUPLEX FLAT BUILDING AND THE CONSTRUCTION COST IS HIGHER ACCORD ING TO THE ASSESSEE AND THIS FACT HAS BEEN IGNORED BY THE AO AS OBSERVED BY THE LD.CI T(A). IT IS ALSO PERTINENT TO MENTION THAT THE AO HAS NOT BROUGHT ON RECORD ANY S PECIFIC INSTANCES OF INFLATION OF EXPENSES BY THE ASSESSEE. ALSO, IT IS OBSERVED THAT THE ASSESSEE HAS FILED ALL DETAILS BEFORE THE AO AND HENCE THERE IS NO QUESTION OF FUR NISHING INACCURATE PARTICULARS OF INCOME OR THE ASSESSEE HAS CONCEALED ANY INCOME. IN VIEW OF THAT MATTER, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD.CIT(A) DELETING THE IMPUGNED PENALTY LEVIED BY THE AO AND THUS THE SAME IS UPHELD. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF AUGUST, 2014. SD/- SD/- (RAJENDRA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 28.08.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.