Shri Pritesh Arvindbhai Shah, Ahmedabad V. The Income tax Officer,Ward-4(2), Ahmedabad

ITA 909/AHD/2010

• Counselvise Citation: 90920514 RSA 2010
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 26-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESHCHANDRA SHARMASR D R
• Keywords: Salary income; Wrong claim

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.909/AHD/2010 ( & ' & ' & ' & ' / / / / ASSESSMENT YEAR : 2005-06) PRITESH ARVINDBHAI SHAH PROP.OF JOHNSON ENTERPRISE 45-A, ADVAIT SOCIETY RADHASWAMI SATSANG ROAD RANIP, AHMEDABAD & & & & / VS. THE ITO WARD-4(2) AHMEDABAD ( '# ./)* ./ PAN/GIR NO. : AFQPS3756N ( (+ / // / APPELLANT ) .. ( ,-(+/ RESPONDENT ) (+ . '/ APPELLANT BY : -NONE- ,-(+ / . ' / RESPONDENT BY : SHRI DINESHCHANDRA SHARMA,SR.D.R. &0 / #/ // / DATE OF HEARING : 15/05/2012 12' / # / DATE OF PRONOUNCEMENT : 25/5/12 '3/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING F ROM THE ORDER OF LEARNED CIT(APPEALS)-VIII, AHMEDABAD DATED 18.11.20 09 AGAINST THE CONFIRMATION OF PENALTY U/S.271(1)(C) OF THE I.T.AC T OF RS.2,35,863/-. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING PENALTY ORDER PASSED U/S.271(1)(C) OF THE I.T. ACT, 1961 DATED 1 0.7.2008 AND THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T.ACT D ATED 31.8.2007 WERE THAT THE ASSESSEE IS EARNING SALARY INCOME AND INCO ME FROM OTHER SOURCES. ITA NO .909/AHD/2010 PRITESH ARVINDBHAI SHAH VS. ITO ASST.YEAR 2005-06 - 2 - THE ASSESSEE WAS ALSO RUNNING A PROPRIETARY-CONCERN IN INDIVIDUAL CAPACITY UNDER THE NAME AND STYLE OF M/S.JOHNSON EN TERPRISE. THE ASSESSEE DERIVES INCOME FROM SALES, BUSINESS AND FO RM OTHER SOURCES. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE REL EVANT PERIOD DECLARING TOTAL INCOME AT RS.79,060/-. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT DISALLOWED ASSESSEES CLAIM FOR DEDUCTIO N U/S.80IA OF THE ACT AMOUNTING TO RS.7,22,912/- HOLDING THAT BEING AN IN DIVIDUAL HE WAS NOT ENTITLED FOR THE SAME. THE ASSESSING OFFICER INITI ATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT FOR MAKING A W RONG CLAIM FOR DEDUCTION U/S.80IA. THE ASSESSEE FILED AN APPEAL B EFORE THE LD.CIT(A) AGAINST THE ORDER SO FRAMED BY THE A.O. THE LD.CIT (A)-VIII, AHMEDBAD VIDE HIS ORDER DATED 29.2.2008 IN APPEAL NO.CIT/VII I/ITO WD4(2)/89/2007-08 CONFIRMED THE DISALLOWANCE OF CLA IM U/S.80IA OF THE ACT AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 3. ON THE DATE OF HEARING FROM THE SIDE OF THE APPE LLANT, AN ADJOURNMENT APPLICATION WAS MOVED, HOWEVER, CONSIDE RING THE SMALLNESS OF THE ISSUE INVOLVED THE SAID ADJOURNMENT APPLICAT ION WAS NOT ENTERTAINED AND REJECTED. LD.SR.DR MR.DINESHCHANDR A WAS HEARD WHO HAS PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIE S BELOW. 3.1. THE ONLY REASON FOR LEVYING THE PENALTY WAS DI SALLOWANCE OF A CLAIM MADE U/S.80IA OF THE I.T.ACT. HOWEVER, THE ASSESSEE HAS DISCLOSED THE FACTS IN RESPECT OF THE CLAIM OF DEDU CTION U/S.80IA AS PER THE RETURN FILED AND THE STATEMENT OF TOTAL INCOME ANNEXED THEREIN. THE ASSESSEE HAS ALSO FURNISHED A REQUISITE FORM NO.10C CB FOR THE PURPOSE OF CLAIM OF DEDUCTION U/S.80IA OF THE I.T.ACT. THE SA ID REPORT WAS DULY ITA NO .909/AHD/2010 PRITESH ARVINDBHAI SHAH VS. ITO ASST.YEAR 2005-06 - 3 - CERTIFIED BY A CHARTERED ACCOUNTANT. RATHER, IT WA S VEHEMENTLY ARGUED THAT THE ASSESSEE HAD MADE THE SAID CLAIM ON THE BA SIS OF THE ADVICE OF A CHARTERED ACCOUNTANT. IN SUPPORT OF THOSE ARGUMENT S, THE ASSESSEE HAS PLACED RELIANCE ON CIT VS. CAPLIN POINT LABORATORIE S LTD. 293 ITR 524 (MAD.). WE HAVE NOTICED THAT IN THIS PRECEDENT T HE ASSESSEE HAS MADE A WRONG CLAIM OF DEDUCTION. THE DEDUCTION WAS CLAIME D U/S.80HHC AND 80I OF THE I.T.ACT BY SHOWING INTEREST INCOME AS BU SINESS INCOME. THE HONBLE COURT HAS HELD THAT NEITHER THERE WAS FURNI SHING OF INACCURATE PARTICULARS NOR THE ASSESSEE HAS CONCEALED THE INCO ME. IN THE PRESENT CASE AS WELL, UNDER WRONG ADVICE AND INCORRECT UNDERSTAN DING OF LAW, THE ASSESSEE HAS MADE THE CLAIM. THE ASSESSEE HAD CARR IED OUT AN INFRASTRUCTURE DEVELOPMENT AND ON THAT BASIS HE WAS OF THE OPINION THAT THE SAID CONTRACT WORK WAS ELIGIBLE TO A SUB-CONTRA CTOR BEING CONTRACT WAS CONNECTED TO HIGHWAY AUTHORITIES. IT WAS ADVISED B Y A TAX CONSULTANT THAT THE INCOME GENERATED FROM INFRASTRUCTURAL CONT RACT WORK QUALIFIES FOR THE DEDUCTION. WE, THEREFORE, HOLD THAT FOLLOWING THE CASE LAWS CITED, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE, THE ASSESSEE SHOULD NOT BE PENALIZED U/S.271(1)(C) OF T HE I.T.ACT. THE ASSESSEE HAS OFFERED AN EXPLANATION WHICH WAS NOT F OUND ALTOGETHER UNTRUE OR FALSE, THEREFORE IN VIEW OF EXPLANATION-1 TO SECTION 271(1)(C), WE HEREBY DIRECT TO DELETE THE PENALTY. GROUND IS ALLOWED. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. SD/- SD/- ( .. ) ( ) '# ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 25/ 5 /2012 ..&, .&../ T.C. NAIR, SR. PS ITA NO .909/AHD/2010 PRITESH ARVINDBHAI SHAH VS. ITO ASST.YEAR 2005-06 - 4 - '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4'/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. 6 / CONCERNED CIT 4. 6() / THE CIT(A)-VIII, AHMEDABAD 5. 49: ,& , , / DR, ITAT, AHMEDABAD 6. :; <0 / GUARD FILE. '3& '3& '3& '3& / BY ORDER, -4 , //TRUE COPY// = == =/ // / ) ) ) ) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..16.512 (PAD PG NOS.1 TO 6 ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16.5.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S25.5.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.5.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER