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2016 (4) TMI 170 - BOMBAY HIGH COURT

2016 (4) TMI 170 - BOMBAY HIGH COURT - TMI - Appeal admitted on second substantial question of law:

Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in coming to the conclusion that no penalty is imposable under Section 271(1) (c) of the Act? - Income Tax Appeal No. 2344 of 2013 - Dated:- 22-3-2016 - M. S. Sanklecha And A. K. Menon, JJ. For the Appellant : Mr. Arvind Pinto For the Respondent : Mr. S. R. Mody with Ms. Aasifa Khan ORDER P. C .....

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nt had constructed and sold flats in excess of the permissible area as per Section 80IB(10)? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in coming to the conclusion that no penalty is imposable under Section 271(1) (c) of the Act? 3 Re:Question (i): (a) The Respondent-Assessee is in the business of construction of residential buildings. For the Assessment Year200607 in respect of its housing project at Baner, Pune, the Respondent-Assessee h .....

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d the Tribunal by its order dated 1st April, 2011. (b) Being aggrieved of the order dated 1st April, 2011 of the Tribunal in quantum proceedings, the Respondent-Assessee filed an appeal under Section 260A of the Act to this Court, being Appeal bearing No.2560 of 2011 and the same was admitted on 12th March, 2013. (c) In the meantime, the Assessing Officer had initiated in his Assessment order, penalty proceedings under Section 271 (1)(c) of the Act. The Assessing Officer, thereafter had proceede .....

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evidence before it, records the finding that 104 units had been constructed in accordance with the plan approved by the local authorities and on completion of the project, the local authorities had also issued completion certificate. The sanctioned plans was the basis of which completion certificate was given to the Petitioner. It is on the basis of this that the Respondent-Assessee had claimed the benefit of Section 80IB(10) of the Act. Further, the impugned order also negatived the contention .....

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grievance of the Revenue as canvassed by Mr. Pinto is that in the quantum proceedings, the Tribunal had denied the benefit of Section 80IB(10) of the Act to the Respondent-Assessee. Therefore, it is submitted that penalty must necessarily follow as claim made by the Respondent-Assessee in its return of income, has been rejected. (f) We find that the impugned order of the Tribunal has not ignored the fact that there was an order in quantum proceedings against Respondent-Assessee. However, as obse .....

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Section 80IB(10) of the Act was on the basis of interpretation. Therefore, even if we accept/ assume that Respondent-Assessee is not entitled to the benefit of Section 80IB(10) of the Act, yet penalty may not be warranted as the claim was made on the basis of the local authorities sanctioning the building plans and granting a Completion Certificate. Besides, the sale of adjacent flats to members of same family during the subject Assessment Year was not barred. It was barred only after introduct .....

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dings on which reliance placed by the Revenue by itself evidences the fact that the issue is debatable. (h) For the above reasons, Question No.1 does not give rise to any substantial question of law. Hence not entertained. 4 Appeal admitted on substantial question of law (ii). Normally, we would not have admitted Question No.(ii) as the question would be academic in view of the fact that on merits, we have found no reason to disturb the findings of the Tribunal, that no penalty is imposable. How .....

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