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TMI Blog2020 (12) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the view that as the Adinath project was eligible for housing project u/s.80IB(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. X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- 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 filed present appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (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 of ₹ 8,59,500/- 4. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuted 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 ₹ 1,39,88,777/- only rather than ₹ 7,53,83,326/- as entered in the assessee's working (₹ 7,88,02,178/-) is the total receipt as per annexure B-2/25 and B- 02/26. The assessee objected to the addition on the ground that even though the sale consideration of the project was received, the income has not accrued as sale deed has not been signed or possession in respect of flats has not been handed over. The assessee relied on the judgements of Hon 'ble Gujarat High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 discussion, the appeal of the assessee (in the case of M/s. Ohm Developers) is allowed for statistical purposes in the terms as indicated hereinabove. 11. From perusal of above decision of Co-ordinate Bench we find that in the case of assessee where there is no evidence put forth by the Revenue that there is any other source of income or receipts by the assessee other than from sale of flats at "Adinath" project. We therefore respectfully following the decision of Coordinate Bench in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer 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. During the course of survey, the assessee explained that in the file there are expense vouchers alongwith receipts of amounts received which is already recorded in the books of accounts. Besides, the amounts recorded in page Nos. 59-60, were not accounted in the books of accounts which represents income besides regular income of the business. In these facts, the assessee disclosed additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 v. M/s. Shree Padmavati Developers passed in ITA No.268/Ahd/2010. (v) ITAT; Rajkot Bench order dated 15.12.1999 in the case of ACIT v. Prabhudas S. Parekh passed in ITA No. 1408/Ahd/1993. 12. We find that this Bench of the Tribunal in the case of CIT v. M/s. Shree Padmavati Developers (supra) has held as under:- "7. We have heard both the sides. We have also perused the impugned statement of Mr.Mahendra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied. 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 course of survey. The "On money" which was offered to revenue in subsequent assessment year were shown as liability as "advance for sale of flat" Due to these variation of facts Revenue will be unable to get any benefit out of this decision. 16. We therefore in the given facts and circumstances of the case and respectfully following the decisions of Co-ordinat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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