TMI Blog2014 (1) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... ttal, JM: The department has filed this appeal for assessment year 2007-08 against the order of ld. CIT(A) dated 14.3.2012 on following grounds : "On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the penalty imposed u/s 271(1)( c ) of the Income Tax Act, 1961 by the AO at Rs.3,82,88,250/- on the assessee for wrongly claiming proportionate deduction under section 80IB(10) in its return of income though it did not fulfill the conditions required for allowance of the said deduction" 2. The relevant facts are that the assessee is an AOP and developed a Housing Project in the name of "Ekta Meadows". As per return filed for the assessment year, the assessee declared profit on account of the said projec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave also gone through the case laws cited by the Ld. AR of the appellant. The only point of dispute in the present penalty proceedings is regarding the availability of deduction u/s. 80-lB on proportionate basis on those flats, has fulfilled all the criteria's of section 801B, i.e. having area less than 1000 sq. ft, which consists approximately 65% in this case. The AO is of the view that once any of the conditions of section 80-lB is violated by the builder appellant , then the appellant looses benefit of deduction it its entirety and such deduction cannot be availed on pro-rata basis/proportionate basis even on those flats which does not violate the size limit prescribed u/s 801B. On the other hand, the case of the appellant is that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urate particulars of income whether any attempt of concealment of income has been made by the assessee. In the instant case, it is noted that the appellant has made a claim u/s. 80-IB on the basis of the audit report and prima facie it does not appear to be a case, where the appellant has made a false claim or a claim, which is absolutely wrong and not a debatable claim at all. The central issue involved in this appeal is liability of deduction on proportionate basis, which is a highly debatable issue and various higher Courts including the jurisdictional ITAT, Mumbai has decided this issue in favour of the appellant including in the case of sister concern of the appellant. Therefore, I agree with the appellant that in the light of the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of ld. CIT(A). Ld. AR referred pages 1 to 10 of the paper book which contain a copy of the said order of the Tribunal. Ld. AR submitted in the quantum appeal, the disallowance made by department was deleted by Tribunal and accordingly the very basis for which penalty was levied by AO does not survive. Ld. DR has not disputed the above contention of ld. AR. 5. In view of above facts and considering the order of Tribunal dated 28.9.2012 in assessee's own case in the quantum proceedings (supra), we agree that the very basis of additions for which this penalty has been levied has been deleted and accordingly the levy of penalty does not survive. Hence, in view of above, we uphold the order of ld. CIT(A) in cancelling the penalty levied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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