TMI Blog2012 (5) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... nt : Shri Pavan Ved For the Respondent : Shri J.P. Bairagra O R D E R PER J. SUDHAKAR REDDY AM: This appeal filed by the revenue is directed against the order of the CIT(A)-XIX, Mumbai dated 16.8.2010 for the assessment year 2006-07, wherein the first appellate authority has cancelled the penalty of ₹ 14,53,22,773/- levied by the AO under section 271(1)(c) vide order dated 22.5.2009. 2. The facts in brief are that the assessee is a company which is in the business of construction and development of residential and commercial buildings. It has filed its return of income on 17.11.2006 declaring income of ₹ 57,29,597/-, after claiming deduction of ₹ 4,55,22,203/- under section 80IB(10) of the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can not be a part of the bigger lay out. It was submitted that the claim was withdrawn because of difference of opinion and ambiguity of law. It was further submitted that the claim of deduction was not made with the malafide intention to avoid taxes. The AO did not agree with these contentions of the assessee. He concluded that the survey team of the department has detected that deduction under section 80IB(10) is not allowable and the same is also accepted by the director of the company. He held that the assessee furnished inaccurate particulars leading to concealment of income within the meaning of section 271(1)(c). He confirmed the penalty. 3. On appeal the first appellate authority cancelled the penalty by holding that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons specified in the section were satisfied. He pleaded that the size of the plot on which building No.8 and 13 were located, was more than one acre and the size of each residential unit did not exceed 1000 sq.ft. and that both building No.8 and 13 were approved after 1.10.1998 but before 31.3.2007. He submitted that all the conditions were fulfilled. He argued that there was a legal issue was whether the plot of land on which each building stood should be more than one acre or the building should be located in a plot of land which is more than one acre. Due to this ambiguity in law the assessee chose to withdraw the claim and paid taxes. He vehemently contended that subsequent judicial decisions including that of the Hon'ble Bombay Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 80IB(10) has been fulfilled, was decided in favour of the assessee by the Hon'ble Bombay High Court wherein it is held as follows :- 6.2 In the case of CIT vs. M/s. Vandana Properties Income tax appeal No.3663 of 2009 dated 28.3.2012. The High Court had to consider the following questions on interpretation of section 80IB(10): (i) what is a housing project u/s. 80-IB(10)?, (ii) whether if approval for construction of E building was granted by the local authority subject to the conditions set out in the first approval granted on 12.5.1993 for construction of A and B building, construction of E building is an extension of the earlier housing project for which approval was granted prior to 1.10.1998 and, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0IB(10) is to boost the stock of houses. There can be multiple housing projects on a plot of land having minimum area of one acre. (iv) On facts, as there was no merger of flats and no application was made to the local authority seeking merger of two flats, there was no violation. 6.3 The claim that deduction under section 80IB(10) was supported by an audit report given by the C.A. in form No.10CCB. Thus this clearly shows that there was a cleavage of opinion on this legal issue. On these facts we agree with the findings of the CIT(A) that the preposition laid down by the Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. (322 ITR 158) are applicable. The Hon'ble Supreme Court held that in order to expo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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