TMI Blog2013 (11) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-24, Mumbai ('CIT(A)' for short) dated 31.01.2011, confirming the levy of penalty u/s.271(1)(c) of the Income Tax Act, 1961 ('the Act' hereinafter) for the Assessment Year (A.Y.) 2004-05 in its case by the Assessing Officer (A.O.) vide order dated 24.03.2009. 2.1. Though the appeal raises as many as five grounds, the same in substance only agitates the impugned penalty levied in the sum of Rs.17,87,820/-. It would be relevant to recount the background facts of the case, which find mention both in the assessment order (dated 29.11.2006) as well as the penalty order by the A.O. The assessee, a partnership firm engaged in the business of contractors, filed its return of income on 01.11.2004, i.e., a due date, at an income of Rs. Nil. The same bore a deduction u/s.80-IB(10) of the Act at Rs.79,83,468/-. A survey u/s.133A of the Act was conducted at the assessee's business premises at Samuel Street, Vadgadi, Mumbai on 30.12.2005 to verify the assessee's claim for deduction u/s.80-IB, which could not be substantiated by it. It, accordingly, filed a 'revised' return on 29.03.2006 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty u/s.271(1)(c) was subsequently levied on the same basis, i.e., that the construction of Phase-2 of the complex Haridas Park, comprising buildings A, B, C and D (also known as 'New Haridas Park'), and the construction of which started only after 01.10.1998, did not constitute a separate project by itself, and was only a continuation of the earlier project. Further, even if each Wing of the project was to be considered as a separate project by itself, the area available per Wing would fall below one acre, so that the assessee's claim was even theoretically not valid/acceptable. 2.3. In appeal, the assessee raised several grounds, which stand enumerated at pgs. 2 to 7 of the impugned appellate order. The assessee's claim for deduction u/s.80-IB(10), to which it was not eligible, stood withdrawn only consequent to the discovery of its invalidity per survey proceedings on 30.12.2005. There was no basis for the assessee's claim inasmuch as there is no differentiating factor between different Wings of the housing project, all of which constitute and form part of a single project. Even taking the separate Wings to constitute separate projects would not help the assessee inasmuch as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencement of work as 10.08.2001 (PB pgs. 27, 112). It was on account of this revision in the plan that the TDR stood enhanced to a large extent, so that while the Wings E, F G of the project were for ground floor + 4 floors, the other Wings, i.e., A to D, were for ground + 7 floors. The Wings A and B were constructed and sold during the previous years relevant to the A.Ys 2001-02 and 2002-03. The assessee having suffered losses and also having sufficient brought forward losses, there was no occasion to claim deduction u/s.80-IB(10), which arose for the first time only for the current year on sale of the flats constructed under Wings C D. There were, thus, sufficient reasons for the assessee to claim deduction there-under. Even so, could the assessee's claim, which stands though withdrawn, be said to be so unreasonable so as to justify a levy of penalty u/s.271(1)(c)? Reliance was placed on the decisions based on the proposition that the penalty is not leviable in the case of bona fide claim, for which all the details are on record, and to that withdrawal of claim to buy peace and save protracted litigation would not attract penalty. 3.2. The ld. DR, on the other hand, reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. 26), would not make it a case of either a fresh approval or of a new project. Further, again, there is no question of treating Wings C D as a separate project, as sought to be projected before us by the ld. AR, which, if at all, would have to be reckoned on per Wing basis, in which case the land size would fall below one acre each, as the Revenue is at pains to drive home. 4.2. So, however, even as we find that the assessee has not been able to substantiate its explanation, we find its case as falling u/s.273B of the Act, which is a separate and distinct provision, operating independent of and notwithstanding the rigour of the penalty provision itself. The same saves penalty, inter alia, u/s.271(1)(c), where the assessee can show a reasonable cause, and which we find it to have in the instant case. This is not for the reason either of any confusion with regard to the area of the project or the date of its commencement, but the very fact that the construction of the Wings A to D started much subsequent to the other part of the project, so that it was considered as Phase 2 of the project, being even titled separately as 'New Haridas Park'. 4.3. It is, thus, the second Phase ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
