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Ms. Vijay Buildcom Pvt Ltd., (Now Knows as Vijay Grihanirman Pvt Ltd) Versus Dy. Commissinr of Income Tax-CC-15-16, Mumbai

Penalty proceedings under section 271(1)(c) - disallowance of deduction claimed u/s 80IB(10) - Held that:- For mere making of claim which is not acceptable to the revenue, the penalty u/s 271(1)( c) cannot be levied. In the present case, the assessee has made claim which the deduction u/s 80IB (10) of the Act for the first time was allowed by the revenue whereas in the second assessment disallowed and rejected the same and therefore, this is not a fit case for levy of penalty. - Decided in favou .....

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(A) as levied by the AO under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act). 3. Facts of the case are that a search and seizure action u/s 132(1) of the Income Tax Act, 1961 was carried out on 22.9.2005. The assessment proceedings were completed u/s 143(3)(ii) of the Act determining the total income at ₹ 17,272/-. Thereafter, the Commissioner of Income Tax exercising the revisionary powers under section 263 of the Act set aside the assessment being erro .....

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using project was obtained more than once and in that case, when the project approved was taken more than once then the housing project would be deemed to have been approved on the date on which the building plan was first approved by the local authority and thus held that the date of commencement of project was 10.1.1996 and therefore, denied deduction u/s 80IB(10) of Rule 18BBB for the reasons that the assessee has not fulfilled the condition as provided in the section 80IB(10) of the Act. The .....

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eted accordingly and thus, the assessee disclosed all the facts qua the project in the return of income and thus neither furnished inaccurate particulars of income nor concealed any particulars of income in the return of income filed by the assessee. In response to query by the AO that no separate profit and loss account, balance sheet was prepared as required under the provisions of section 18BBB, the assessee submitted that since there was only one project in hand and therefore, no separate pr .....

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O by imposing the penalty by giving details observation in para 6 of the appeal order as observing and holding as under: 6. I have very carefully considered the facts of the case, the findings of the AO and the submissions as made by the appellant. Needless to state, in a taxing statue penalty provisions are provided to plug leakages wherever attempts are made to contravene the provisions of the Act, so as to make taxation laws effective. It is certainly true that additions made in assessment pr .....

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it was not eligible for the claim. The provisions of the Act are crystal clear and there is no ambiguity. Despite the clear provisions of law the appellant has made the claim and therefore as stated by the AO, it s submissions that it was a claim bonafide made, rings hollow, It is not as though two views were possible, in the instant case of the appellant, on facts there is only one view possible, the view that the appellant is not entitled to deduction under section 80IB(10). In the circumstan .....

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the conclusion that in the facts of the case, the assessee has concealed income with a view to avoid the payment of tax, the imposition of penalty was valid. As regards to the contention/additional ground raised that the order of penalty is void abinitio, for the reason that the order has been passed on a non existing entity, when the matter was referred to the Assessing Officer during the course of appellate proceedings the Assessing Officer as per letter No. ACIT CC 15& 16/Addl. Ground/201 .....

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in the name of Vijay Buildcon Pvt Ltd and the assessee responded to the said notice from time to time. Accordingly, , the assessment proceedings under section 143(3) and reassessment proceedings under section 143(3) r.w.s 263 was completed in the name of M/s Vijay Buildcone Pvt ltd only and the assessee neither challenged these proceedings nor raised any objection during the assessment proceedings. I am in agreement with the said observations of AO. The penalty proceedings had been initiated in .....

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y. The additional ground is without merits, and is dismissed. Now, aggrieved by the order of ld.CIT(A), the assessee in appeal before this Tribunal. 4. The ld. AR submitted before us that the order passed by the ld.CIT(A) was wrong as the assessee has not concealed its income or filed inaccurate particulars of income and has fully disclosed all the details /facts qua claiming deduction u/s 80IB(10) of the Act, in the return of income, and that in the original assessment proceedings, the claim of .....

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r rejection of claim of the assessee u/s 80IB(10) of the Act by relying on the Rule 18BBB of the Rules that the conditions were not fulfilled for claiming deduction whereas as a matter of fact, the assessee acquired the development of right of the project vide agreement dated 28.4.1999 and obtained the fresh certificate of commencement on 11.07.2000 and thereafter the project was completed accordingly. Therefore the deduction under section 80IB(10) rightly claimed by the assessee. It was also su .....

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the assessee has made claim which was not acceptable to the revenue and mere non acceptance of claim which might be wrong would not attract penalty at all as the same would not amount to filing inaccurate particulars of income or concealment of income. The assessee also filed a copy of audit report certified by the Chartered Account which stated that the assessee was entitled to claim deduction u/s 80IB(10) of ₹ 14,84,029/-. In defence of his arguments, the ld.AR relied on the decision of .....

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e. 5. We have carefully considered the submissions of the parties, perused the material placed before us including the orders of authorities below and case laws relied upon by the parties. In the present case, the assessee claimed deduction u/s 80IB(10) of the Act of ₹ 14,84,029/- in respect of the housing project for which the assessee acquired development rights on 28.4.1999 and thereafter obtained first commencement certificate on 11.7.2000. In respect of the said housing project the co .....

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income of the assessee at ₹ 14,88,910/- by rejecting the claim of the assessee u/s 80IB(10) of the Act. Looking into the facts of the case in totality we find merit in the argument of the ld.AR that in case of certificate of commencement/approval was granted twice to the housing project then the later date or subsequent approval/commencement certificate shall be considered for the purpose of determining the claim of the assessee under section 80IB(10) of the Act. The another plea of the ld .....

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ble to the revenue, the penalty u/s 271(1)( c) cannot be levied. In the present case, the assessee has made claim which the deduction u/s 80IB (10) of the Act for the first time was allowed by the revenue whereas in the second assessment disallowed and rejected the same and therefore, this is not a fit case for levy of penalty. In the case of Prakash Steelage Ltd (supra), the Co-ordinate Bench of the Tribunal has held as under : Once the assessee had not offered any income in consequence of sear .....

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