Mudra Builders, Ahmedabad vs Department Of Income Tax

IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI KUL BHARAT, JUDICIAL MEMBER आयकर अपील सं./ ./ ITA No. 2409/Ahd/2011 िनधा रण वष /Assessment Year: 2005-06 ITO, M/s. Mudra Builders, Ward-9(2), 9, Vrundavan Colony, Ahmedabad B/h Devar Tower, Shahibaug Deafnala Road, Ahmedabad PAN : AAHEM 4263 G

अपीलाथ / अपीलाथ / (Appellant) ू यथ यथ / थ / (Respondent)

Revenue by : Shri M.K. Singh, Sr. DR.

Assessee(s) by : Smt Arti N. Shah, AR

सुनवाई क# तार%ख/ / Dateof Hearing : 19/03/2015 घोषणा क# तार%ख / Date of Pronouncement: 19/03/2015

आदे श/O R D E R

PER G.D. AGRAWAL, VICE PRESIDENT:

This is an appeal filed by the Revenue and is directed against the order of the Ld. Commissioner of Income-tax(Appeals)-XV, Ahmedabad dated 29.07.2011 pertaining to the Assessment Year 2005-06.

2. The only ground raised in this appeal by the Revenue is against the deletion of penalty of Rs.38,00,000/- which was levied by the Assessing Officer u/s 271(1)(c) of the Act.

3. The facts of the case are that the Assessing Officer levied penalty u/s 271(1)(c) in respect of two additions, namely, disallowance u/s 80IB(10) of Rs.84,92,482/- and disallowance u/s 40(a)(ia) of Rs.18,77,885/-. The CIT(A) cancelled the penalty with the following findings:-

ITA No. 2409/Ahd/2011 ITO vs. Mudra Builders For AY 2005-06 2

"3. It is seen that the appellant made available all the details to the Department during assessment proceedings and the claim of 80IB(10) was denied in toto on the ground that part of the residential units exceeded 1500 sq feet limit. The BU permission depicting this was made available to the AO by the appellant itself. Hon'ble ITAT vide order dated 15.07.2011 have restored the quantum addition that is regular assessment order back to the file of the AO with the direction to allow 80IB(10) deduction proportionately for the flats constructed within the prescribed limit of 1500 sq. ft. Therefore, the penalty imposed on 80IB(10) disallowance does not remain as the disallowance itself has been restored back to the file of the AO.

Addition u/s 40(a)(ia) was upheld by this office because TDS was deposited late in the government account that is on 01.06.2006.

The appellant did not go in appeal to Hon'ble Tribunal against this confirmation still in my view rejection of deduction on account of technical breach of law (late deposit of TDS) does not warrant imposition of penalty u/s 271(1)(c), specially when jurisdictional Tribunal has been upholding deletion of penalty made on addition u/s. 40(a)(ia)."

4. The Revenue, aggrieved with the order of the CIT(A), is in appeal before us.

5. We have heard both the parties and perused the material placed before us. After considering the arguments of both the sides and the facts of the case, we do not find any infirmity in the order of the CIT(A). So far as the disallowance u/s 80IB(10) is concerned, the ITAT vide order dated 15.07.2011 have set aside the addition and restored the matter back to the file of the Assessing Officer. When the disallowance itself has been set aside, the penalty based upon such disallowance cannot be sustained and therefore, the CIT(A) rightly deleted the same. We may only observe that if after completing set aside assessment the Assessing Officer again makes addition, he will be at liberty to reinitiate the penalty proceedings in accordance with law if the facts of the case so warrant.

ITA No. 2409/Ahd/2011 ITO vs. Mudra Builders For AY 2005-06 3

6. So far as the other addition is concerned, it was a technical disallowance u/s 40(a)(ia) because of delay in deposit of TDS by the assessee. There is no dispute that the expenditure in respect of the deduction was claimed, was incurred by the assessee and the same was for the purpose of business. Merely because there was delay in deposit of the TDS and as per provisions of Section 40(a)(ia), disallowance is to be made in the year under appeal, in our opinion, it cannot be said that the assessee concealed the income or furnished inaccurate particulars of income. While taking this view, we derive support from the decision of Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt Ltd , (2010) 322 ITR 158 (SC). In view of the above, we respectfully following the decision of Hon'ble Apex Court in the case of Reliance Petroproducts Pvt Ltd (supra) uphold the order of CIT(A) and dismiss the appeal filed by the Revenue.

7. In the result, the Revenue's appeal is dismissed.

Order pronounced in the Court on 19th March, 2015 at Ahmedabad.

Sd/- Sd/-

(KUL BHARAT) G.D. AGRAWAL JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 19/03/2015 Biju T., PS षत Copy आदे श क# ूितिल+प अमे+षत/ of the Order forwarded to : 1. अपीलाथ / The Appellant 2. ू यथ / The Respondent. 3. संबंिधत आयकर आयु- / Concerned CIT 4. आयकर आयु-(अपील) / The CIT(A)- XV, Ahmedabad

5. +वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

/ BY ORDER, आदे शानु सार

TRUE COPY Dy./Asstt.Registrar) उप/सहायक पंजीकार ( उप/ अिधकरण, अहमदाबाद / आयकर अपीलीय अिधकरण, ITAT, Ahmedabad