TMI Blog2020 (12) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... IB(10) and there is no other business carried on by the assessee, it deduction u/s.80IB(10) has been rightly claimed on the On money . This issue is also decided in favour of assessee. - I.T.A No. 1042/AHD/2016 - - - Dated:- 6-11-2020 - Shri Pawan Singh, Hon'ble Judicial Member And Shri Arjun Lal Saini, Hon'ble Accountant Member For the Assessee : None. For the Revenue : Ms. AnupamaSingla Sr.DR ORDER PER PAWAN SINGH, JM: 1. This appeal by the Assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals), Valsad dated 02.12.2015, which in turn arise from the penalty order levied under section 271(1)(c) for the Assessment Year (AY) 2010-11. The assessee raised the following grounds of appeal as under: 1. The Learned CIT(A) has erred in law and facts to confirm levy of penalty without framing charge that there is furnishing of inaccurate particulars or concealment of income. 2. The Learned CIT(A) has erred in law and facts to confirm that the penalty on income of ₹ 8,59,500/- cannot be levied on refusal of bonafide claim u/s 80IB(10) as there is no furnishing of inaccurate particulars or concealment of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 15,61,500/- to tax in the year under consideration ( AY-2010- 11). The AO while passing assessment order initiated penalty proceedings under section 271(1)(c) of the Act. 5. On appeal before the ld. CIT (A), the action of AO was affirmed. On receipt of order from ld. CIT(A) in quantum assessment, the AO passed penalty order under section 271(1)(c) of the Act dated 09.01.2015. Before passing the penalty order AO issued show- cause notice under section 274 read with section 271(1)(c). In reply to the show-cause notice, the assessee submitted that assessee has not made any incorrect claim and no inaccurate particulars were furnished. Mere making a claim which is not sustainable in law itself will not account to furnishing inaccurate particulars regarding the income of the assessee. The contention of the assessee was not accepted by the AO. The AO noted that 100% of tax sought to be evaded on the the additions made by AO is ₹ 7,48,089/-. The AO levied penalty @ 150% of tax sought to be evaded. Thus, the AO worked out penalty of ₹ 11,22,133/-. 6. On further appeal before the ld. CIT(A), the order of penalty was upheld. Thus, further aggrieved, the assessee has fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtmental Representative (DR) for the Revenue. 10. The Ld. DR for the Revenue submits that penalty proceedings are separate and independent. The learned DR defended the order of lower authorities. However, on confronting the fact that additions/disallowance on the basis of which the penalty was initiated has been deleted by Co-ordinate Bench of Tribunal, the ld. DR submits that Bench may take decision in accordance with the Law. 11. We have noted that in the quantum assessment, the assessee filed appeal before the Tribunal and raised following grounds of appeal as under: 1. The learned Commissioner of Income Tax (Appeal) has erred in law and in facts to confirm addition of ₹ 15,61,500/- as income being the sales effected in F.Y. 2010-11 and also erred to assess it under the head income from other sources. 2. The learned Commissioner of Income Tax(Appeal) has erred in law and in facts to confirm the assessment of the income of ₹ 8,59,500/- being on money under the head income from other sources as against business income. 3. The learned Commissioner of Income Tax(Appeal) has erred in law and in facts to not allowing deduction u/s.80IB(10) for on money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year of receipt of the On money or year in which the possession is handed over and sale deed is registered. We find that this issue is squarely covered by the decision of the Co-ordinate Bench in the case of DCIT Vs Ohm Developers (supra) Co-ordinate Bench has followed the judgment of jurisdictional High Court in the case of CITvs. MotilalC.Patel and Co. reportedat 173 ITR 666 (Guj.) and held that the amount of on money is to be accounted for in the year when sale deed is executed by observing as follows: 5.4. In the case in hand, the admitted position is that during the course of search, certain documents were seized. On the basis of the documents, the AO observed that the total price related to the sale of flats was ₹ 7,88,02,178/- against the documented price of ₹ 2,48,38,289/-. The AO observed that on the statement taken on oath of Shri Shantilal Patel admitted that the receipts contain net profit of ₹ 2,29,20,847/-. Before the AO, the explanation of the assessee was that substantial amount of the sale consideration was pending for collection. Before the AO, in response to the notice issued, the assessee submitted that total sale consideration is &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, it is not disputed that sale-deeds were executed in the year subsequent to the year under appeal. Therefore, in view of the binding precedent, we are of the considered view that the authorities below were not justified in taxing the amount including 'on money' during the year under appeal. Further, the assessee has submitted that it has offered for tax the amount including 'on money' in the year whenever sale-deed was executed. This fact is also not controverted by the Revenue by placing any contrary material on record. Therefore, the AO is hereby directed to verify whether the assessee has offered for taxing the amount as its income in the year when the sale-deed was executed. If it is found that the assessee has offered the amount in the year in which the sale-deed was executed, then the AO would delete the addition made in this year. We are conscious of the fact that this Tribunal had taken a contrary view, since now the decision of the Coordinate Bench in the case of ITO vs. Shri Siddharth S.Patel in ITA Nos. 1852 1853/Ahd/2003 is brought to our notice and no distinguishing fact is pointed out by the ld.Sr. D.R. In the light of the above discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act is concerned, we find that Co-ordinate Bench in the case of M/s.Nilka nth Develpers Vs ITO (supra) has dealt the issue of allowability of deduction u/s.80IB(10) of the Act on the On money in detailed by observing as follows: 7. We have heard the rival submissions and perused the orders of the lower authorities and material available on record. In the instant case, we find that the Assessing Officer observed in respect of activities of the assessee during the year under consideration as follows:- 3. The assessee is a partnership firm, engaged in the activity of developing and building housing projects approved by the local authority. The assessee-firm commenced its residential project in FY 2009-10 called Nilkanth Heights, Block A, B C at Dumbhal, Sural. During the year under consideration the assessee has not completed the said project but booked receipt from sale of flats during the year for which sale documents have been executed and shown net profit at ₹ 78,870/- after claiming deduction 80IB of the Act. 8. A survey operation u/s 133A of the Act was conducted on 27.08.2009. During the course of survey, loose documents marked as BF-44 was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from other sources. 11. Before us, the AR of the assessee claimed that, details of ₹ 1,25,00,000/- was noted in the loose paper found during the course of survey and the same was treated as income of the assessee only on the basis of the said document. During the course of survey, the assessee explained that the same represents an additional income of the business of the assessee which was accepted by the survey officials. As the assessee's business was solely of 'Nilkanth Heights, Block A, B C at Dumbhal, Surat Project', it was not open to the Department to not allow statutorily allowable deduction after accepting the same as additional income of the said business. The AR of the assessee has relied upon following decisions:- (i) Order of Hon'ble Gujarat High Court in the case of CIT vs. Mhaskar General Hospital (Guj), in Tax Appeal No. 1474 of 2009, order dated 09.08.2011; (ii) CIT v. Simian Paper Boards Ltd., (2009) 314 TTR 119; (iii) ITAT, Ahmedabad Bench order dated 19.11.2010 in the case of AC IT v. M/s. Virat Gems passed in ITA Nos.3541 3756/Ahd/2008. (iv) ITAT, Ahmedabad Bench order dated 21.09.2012 in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erived from the eligible housing project. In the instant case, it is not in dispute that the business of the assessee of developing and building residential project in the name and style of Nilkanth Heights Project was eligible housing project u/s 80IB of the Act. Therefore, in view of the facts and circumstances of the case, statutorily allowable deduction to the assessee cannot be denied. We, therefore, allow the ground of appeal of the assessee. 15. As far as the case relied upon by Learned Departmental Representative in the case of ACIT Vs VrajDevelper is concerned we find that facts are not similar to that we are dealing in, so much so that, in this case assessee had not even identified the customer from whom such unaccounted receipt i.e On money was received which could have helped to ascertain the proported existence of obligation to return the On money . Due to lack of this details, Coordinate Bench decided that the unaccounted money is to be taxed in the year of receipts itself. Whereas the facts of the appeal, we are dealing in are different as all details relating to specific flats were provided and were even found by Revenue authorities during the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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