ITO WD 3(2), MUMBAI v. SHREE SAMARTH DEVELOPERS, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI S. V. MEHROTRA (AM) AND SMT ASHA VIJAYA RAGHAVAN (JM) ITA NO. 4101/MUM/2009 (ASSESSMENT YEAR-2005-06) THE ITO WARD 3(2) 2 ND FLOOR RANI MANSION MURBAD ROAD KALYAN VS. SHREE SAMARTH DEVELOPERS 2 BAJRANG APT. R.P. ROAD RTO OFFICE KALYAN (W) PAN-ASEFS 4063P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.K. SINGH RESPONDENT BY: SHRI VIPUL B. JOSHI SHRI SAMEER G. DALAL O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A)-1 THANE DATED 13.3.2009 FOR THE A.Y.2005 -06 DELETING THE PENALTY OF RS.18 61 027/- LEVIED U/S 271(1)(C). 2. THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 U/S 139(1) OF THE I.T ACT 1961 ON 31.10.05 DISCLOSING TOTAL INCOME AT RS NIL AFTER CLAIMING DEDUCTION U/S 80IB (10) O F THE I.T ACT AT RS. 50 85 653/-. LATER ON THE ASSESSEE FILED ANOTHER RE TURN OF INCOME FOR A.Y 2005-06 ON 6.11.07 DISCLOSING TOTAL INCOME OF RS. 5 0 85 650/-. IN THE RETURN OF INCOME FILED ON 6.11.07 THE ASSESSEE HAD WITHDR AWN ITS CLAIM OF DEDUCTION U/S 80-IB (10) ON THE GROUND THAT THE ASS ESSEE HAD GOT ITS BUILDING PLAN AMENDED AND THE PROVISIONS OF SEC. 80 IB(10) WERE NOT APPLICABLE FOR THE AMENDED BUILDING PROJECT. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HELD THAT THE RETURN OF INCOME FILED ON 6.11.07 COU LD NOT BE CONSIDERED AS A REVISED RETURN AS THE SAME WAS FILED ON 6.11.07 I.E . FILED AFTER ONE YEAR FROM THE END OF THE RELEVANT A.Y. THE AO WAS OF THE VIEW THAT THE ASSESSEE HAD ITA NO. 4101/M/09 2 WITHDRAWN ITS CLAIM OF DEDUCTION U/S. 80-IB (10) ON LY AFTER ITS CASE WAS SELECTED FOR SCRUTINY. THE WITHDRAWAL OF CLAIM U/S. 80IB (10) WAS NOT VOLUNTARY. THE ASSESSEE HAD FURNISHED INACCURATE PA RTICULARS OF ITS INCOME AND HAD CONCEALED ITS TRUE AND CORRECT INCOME IN TH E ORIGINAL RETURN FILED U/S 139(1) OF THE I.T ACT. THE AO INITIATED THE PE NALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T ACT. 4. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN TH E BUSINESS OF DEVELOPING A REAL ESTATE PROJECT AT KALYAN DIST TH ANE. THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR A.Y 2005-06 U/S 139 (1) OF THE I.T ACT ON 31.10.2005 DECLARING TOTAL INCOME AT RS NIL. THE AS SESSEE HAD CLAIMED ITS ENTIRE INCOME OF RS 50 85 650/- TO BE EXEMPT U/S 80 IB (10) OF THE I.T. ACT 1961. AS ADMITTED BY THE LEARNED AO THE RETURN OF INCOME OF THE ASSESSEE WAS ACCOMPANIES BY AUDIT REPORT U/S 44 AB REPORT U NDER SEC 80 IB AND THE AUDITED FINANCIAL STATEMENTS OF THE ASSESSEE FOR TH E YEAR UNDER APPEAL. AS PER THE BUILDING PLANS ORIGINALLY SANCTIONED THE AS SESSEE WAS DEVELOPING A HOUSING PROJECT WHICH FULLY COMPLIED WITH THE CONDI TIONS IMPOSED BY SECTION 8-IB(10) OF THE IT ACT 1961. THIS FACT WAS FURTHER CERTIFIED TO BE CORRECT BY THE AUDITOR OF THE ASSESSEE FIRM VIDE HIS REPORT IN FORM NO 10CCB IN RESPECT OF THE ASSESSEES ELIGIBILITY FOR CLAIM OF DEDUCTIO N U/S 80IB(10). SUBSEQUENT TO THE FILING OF RETURN FOR A.Y 2005-06 U/S 139(1) OF THE I.T ACT ON 31.10.95 THE APPELLANT FIRM DECIDED TO AMEND THE BUILDING PL ANS BY INCREASING THE BUILT UP AREA OF THE SHOPS AND OTHER COMMERCIAL EST ABLISHMENTS TO EXCEED MORE THAN 2000 SQ.FT. THIS WAS OCCASIONED DUE TO RO AD WIDENING BY THE CORPORATION WHICH MADE DEVELOPMENT OF LARGER COMMER CIAL AREA MORE FEASIBLE. THE ASSESSEE FELT THAT ON REVISING THE BU ILDING PLANS AND THEREBY INCREASING THE AREA OF COMMERCIAL ESTABLISHMENT TO EXCEED 2000 SQ.FT. THE ASSESSEE WOULD BREACH THE PROVISIONS CONTAINED IN SUB SECTION (D) OF SEC 80IB (10) AND THEREFORE SUO MOTO DECIDED TO WITHDRA W ITS CLAIM FOR DEDUCTION U/S 80IB(10). THE ASSESSEE THEREFORE VOLU NTARILY FILED REVISED RETURN OF INCOME ON 6.11.07 WHERE UNDER THE EARLIER MADE CLAIM FOR DEDUCTION U/S 80IB(10) WAS WITHDRAWN AND TOTAL INCO ME OF RS 50 85 650/- WAS DECLARED TO BE THE INCOME OF THE APPELLANT FIRM . ITA NO. 4101/M/09 3 5. THE LD. AO REJECTED THE EXPLANATION OF THE ASSES SEE FOR THE FOLLOWING REASON: (I) THE ORIGINAL RETURN OF INCOME FILED U/S 139(1) ON 3 1.10.05 DID NOT CONTAIN ANY OMISSION OR WRONG STATEMENT AND THEREFO RE THE APPELLANT WAS PRECLUDED FROM REVISING THE RETURN OF INCOME U/S 139(5) AND FURTHER THAT (II) THE REVISION OF THE RETURN WAS BEYOND THE TIME LIMI T PROVIDED U/S 139(5) AND HELD THAT THE REVISION OF RETURN BY THE APPELLANT ON 6.11.07 WAS NOT ACCEPTABLE. 6. ON APPEAL BEFORE THE LD.CIT(A) THE ASSESSEE SUBM ITTED AS UNDER: THE LD AO HAS CATEGORICALLY HELD THAT THE REVISION OF RETURN BY THE APPELLANT ON 6.11.07 WAS NOT VALID AND THEREFOR E HAS PROCEEDED TO ASSESS THE APPELLANT ON THE BASIS OF ORIGINAL RETUR N OF INCOME FILED. THIS FACT IS CLEAR FROM THE COMPUTATION OF INCOME APPEAR ING ON PAGE NO. 6 OF THE ASST. ORDER WHEREIN THE LD AO HAS PROCEEDED FRO M THE NIL INCOME FILED IN THE ORIGINAL RETURN OF INCOME. THE LD AO IN THE BODY OF THE ASST.ORDER HAS ALSO MADE IT CLEAR THAT HE DOES NOT ACCEPT THE REVISED RETURN OF INCOME FILED ON 6.11.07 AS THE SAME IS NO T A VALID RETURN. THE LD. AO IN THE ASSESSMENT AS WELL AS PENALTY ORD ER HAS MADE IT CATEGORICALLY CLEAR THAT THERE IS NO OMISSION OR WRONG STATEMENT IN THE ORIGINAL RETURN OF INCOME. IT WAS SUBMITTED BY THE AR THAT IF THE ASSESSEE WOULD NOT HAVE REVISED THE RETURN OF INCOM E AND BROUGHT THE SUBSEQUENT CHANGE IN THE BUILDING PLANS THAT ALTERE D HIS CLAIM FOR DEDUCTION U/S 80IB (10) TO THE ATTENTION OF THE LD AO THEN IN ALL PROBABILITY THE APPELLANTS CLAIM FOR DEDUCTION U/S 80IB (10) WOULD HAVE BEEN ALLOWED BY THE DEPARTMENT. IT IS THE APPELLAN T WHO HAS SUO MOTO BROUGHT TO THE ATTENTION OF THE LD AO THE ALTERED B UILDING PLANS AT A SUBSEQUENT DATE. THIS ACT ESTABLISHES THE BONAFIDE S OF THE APPELLANT. 7. ON FURTHER APPEAL THE ASSESSEE SUBMITTED THAT AS TH ERE IS NO OMISSION OR WRONG STATEMENT IN THE ORIGINAL RETURN OF IN COM E FILED AND THE ORIGINAL RETURN OF INCOME FILED ON 31.10.05 IS THE ONE ON TH E BASIS OF WHICH THE ASSESSMENT HAS BEEN FRAMED BY THE LD AO THE PENA LTY FOR CONCEALMENT OF INCOME IS NOT ATTRACTED BY THE ASSESSEE . 8. THE ASSESSEE FURTHER SUBMITTED BEFORE THE LD. CI T(A) THAT EVEN OTHERWISE THE WITHDRAWAL OF DEDUCTION CLAIMED U/S 8 0IB(10) BY THE ASSESSEE ITA NO. 4101/M/09 4 ON THE BASIS OF HIS PROPOSED INCREASE OF COMMERCIAL ESTABLISHMENTS IN THE HOUSING PROJECT WOULD NOT ATTRACT PENALTY FOR CONCE ALMENT OF INCOME FOR THE YEAR UNDER APPEAL AS (I) THE BUILDING PLANS WERE NOT REVISED IN THE YEAR UND ER APPEAL AND ACCORDINGLY IN THE YEAR UNDER APPEAL THE PROJEC T OF THE APPELLANT WAS A HOUSING PROJECT ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80IB (10) OF THE IT ACT. (II) THE ASSESSEE UNDER THE BONAFIDE BNELIEF THAT HE WAS NOT ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80IB (10) WITHDRAW SUCH DEDUCTION EARLIER CLAIMED UNDER THE ORIGINAL RETURN OF INCOME FILED ON 31.10.05. AS THE WITHDRAWAL OF CLAIM WAS ON THE BA SIS OF BELIEF BONAFIDELY HELD IT IS SUBMITTED THAT PENALTY U/S 27 1(1)(C) WOULD NOT BE ATTRACTED. 9. THE ASSESSEE FURTHER SUBMITTED THAT IT IS AN EST ABLISHED PROPOSITION IN LAW THAT PENALTY PROCEEDINGS ARE SEPARATE FROM ASSE SSMENT PROCEEDINGS AND PENALTY U/S 271(1)(C) IS NOT ATTRACTED AUTOMATICALL Y ON ANY ADDITION MADE IN THE COURSE OF ASSESSMENT PROCEEDINGS 10. THE ASSESSEE THEREFORE REITERATED THAT THE CLAI M FOR DEDUCTION U/S 80IB (10) WAS BASED UPON A BONAFIDE BELIEF THAT THE APPELLANT WAS FULLY ELIGIBLE FOR THE SAME. THE CLAIM WAS ALSO SUPPORTED BY THE EXPERT OPINION OF A CHARTERED ACCOUNTANT. IN THIS REGARDS THE ASSESSE E RELIES ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF DILIP N . SHROFF VS CIT 291 ITR 519(SC) WHEREIN IT WAS HELD THAT PENALTY U/S 271(1) (C) WAS NOT ATTRACTED WHEN THE ASSESSEE RELIED UPON THE OPINION OF A EXPE RT VALUER AND CLAIMED FAIR MARKET VALUES AS ON 1.4.81 AT A PARTICULAR AMO UNT WHEREAS THE DVO HAD WORKED OUT A LOWER AMOUNT. IT WAS HELD THAT TH IS IN ITSELF WAS NOT SUFFICIENT TO IMPOSE THE BURDEN OF PENALTY U/S 271( 1)(C) AS THE ASSESSEE HAD RELIED UPON THE OPINION OF AN EXPERT WHO HAD DISCLO SED ALL MATERIAL FACTS IN HIS VALUATION REPORT. FURTHER IN THE CASE OF THE A PPELLANT ALSO UNDISPUTEDLY ALL THE CRUCIAL FACTS RELATING TO THE FACTS OF THE MATTER WERE PLACED ON THE ITA NO. 4101/M/09 5 RECORD OF THE LD AO ON THE ABOVE BACKGROUND THE ASS ESSEE SUBMITTED THAT IT CANNOT BE HELD TO BE GUILTY OF FURNISHING INACCURAT E PARTICULARS OF INCOME ATTRACTING PENALTY U/S 271(1)(C) ONLY FOR THE REAS ON OF SUBSEQUENT WITHDRAWAL OF SUCH CLAIM BY THE APPELLANT ON PROPOS ED CHANGE OF FACTS PARTICULARLY WHEN THE ORIGINAL CLAIM WAS NOT LIGHTL Y MADE. 11. THE ASSESSEE ALSO FINDS JUDICIAL SUPPORT FOR I TS CLAIM THAT PENALTY FOR CONCEALMENT IS NOT ATTRACTED BY RELYING UPON THE F OLLOWING RECENT DECISIONS: (A) CIT VS INTERNATIONAL AUDIO VISUAL 288 ITR 570(D ELHI) (2007) IN THIS CASE THE ASSESSEE CLAIMED DEDUCTION U/S 80 HHC IN RESPECT OF SALE OF DUBBING RIGHTS OF FILMS TO A FOR EIGN COMPANY. AO DID NOT ACCEPT THE SAME AND HELD THE PAYMENT RECEIVED T O BE ROYALTY. THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT IT WAS SE LLING GOODS OR MERCHANDISE BY SELLING DUBBING RIGHTS. IT WAS HELD THAT EVEN THROUGH THE ASSESSEES CONTENTION MAY BE INCORRECT THERE WA S NOTHING TO SUGGEST THAT IT MISREPRESENTED THE PARTICULARS OF INCOME O R CONCEALED ITS TRUE INCOME. THERE BEING NO CONCEALMENT OF PENALTY FACTS ASSESSEE WAS HELD NOT LIABLE FOR PENALTY U/S 271(1)(C). (B) CIT VS NATH BROS EXIM INTERNATIONAL 288 ITR 670 (DELHI) (2007) IN THIS CASE THE ASSESSEE CLAIMED DEDUCTION U/S 80H HC BY TREATING DIVIDEND INCOME AS ITS BUSINESS INCOME. TH E AO DID NOT AGREE WITH THE SAME. THERE WAS FULL DISCLOSURE OF ALL REL EVANT MATERIAL. IT WAS HELD THAT EVEN THOUGH ASSESSEE HAD MADE ERRONEOUS C LAIM IT WAS NOT LIABLE FOR PENALTY U/S 271(1)(C). (C) CIT VS BACARDI MARTINI INDIA LTD 288 ITR 585(DE LHI) (2006) DISALLOWANCE OF CLAIM FOR CERTAIN EXPENDITURE DUE T O DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE AO DID NOT AMO UNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME AND THEREFORE PENALTY U/S 271(1)(C) WAS NOT LEVIABL E. (D) CIT VS HARSHVARDHAN CHEMICALS & MINERALS LTD 25 9 ITR 212(RAJ) (2004) A DEBENTABLE CLAIM FOR DEDUCTION WOULD NOT ATTRACT PENALTY U/S 271(1)(C) (E) CIT VS SIVANANDA STEELS LTD 256 ITR 683(MAD)(20 02) ITA NO. 4101/M/09 6 CLAIM FOR DEPRECIATION AND INVESTMENT ALLOWANCE M ADE BY THE ASSESSEE ON THE BASIS OF TEST RUN OF THE MACHINE BA SED ON A DECISION OF THE JURISDICTIONAL HIGH COURT BEING A BONAFIDE CLAI M THOUGH SUBSEQUENTLY WITHDRAWN CANNOT JUSTIFY LEVY OF PENALTY U/.S 271(1 )(C). THE ASSESSEE THEREFORE SUBMITTED THAT THE LD AO ERR ED IN LEVYING PENALTY OF RS 18 61 027/- BY HOLDING THAT THE ASSES SEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. 12. THE ASSESSEE FURTHER SUBMITTED AS FOLLOWS: IN THE COURSE OF ASST. PROCEEDINGS PENALTY PROCEED INGS AND IN THE PROCEEDINGS BEFORE YOUR HONOUR THE APPELLANT HAS AR GUED THAT ORIGINALLY BUILDING PLANS WERE SANCTIONED FOR THE HOUSING PROJ ECT AT KALYAN DIST. THANE IN SUCH A MANNER SO AS TO CONFIRM WITH THE CO NDITIONS IMPOSED BY THE PROVISIONS OF SEC 80 IB(10(). THEREAFTER AR OUND THE LATER PART OF 2007 THE ROAD SKIRTING THE APPELLANTS HOUSING PROJ ECT WAS CONSIDERABLY WIDENED WHEREBY IT BECAME THE MAIN ROAD AND ALL TR AFFIC TRAVELLING TO NASHIK WENT BY THE SAID ROAD INCREASING ITS COMMERC IAL POTENTIAL EXPONENTIALLY. THE APPELLANT WHO WAS THEN DEVELOPIN G THE HOUSING PROJECT IN SUCH MANNER THAT THE COMMERCIAL ESTABLI SHMENTS IN THE PROJECTS DID NOT EXCEED 2000 SQ.FT. (BUILT UP AREA) DECIDED TO AMEND THE BUILDING PLANS WHEREBY THE COMMERCIAL AREA WAS INCR EASED SUBSTANTIALLY SO AS TO TAKE THE PROJECT OUT OF THE AMBIT OF THE PROVISIONS OF SEC 80IB (10). ON DECIDING TO INCREASE THE COMM ERCIAL ESTABLISHMENTS THE APPELLANT REVISED HIS RETURN OF INCOME FOR THE YEAR UNDER APPEAL WITHDRAWING HIS CLAIM FOR DEDUCTION U/S 80IB (10). THE REVISION OF BUILDING PLANS TOOK SOME TIME AND THE AMENDED PLANS WERE SANCTIONED BY THE LOCAL AUTHORITY ON 14.5.08. 13. THE LD. CIT(A) ALLOWED THE ASSESSEES CLAIM AND DELETED THE PENALTY BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE PENALTY ORD3R PASSED BY T HE AO AND THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT DURI NG THE COURSE OF APPELLATE PROCEEDINGS. I HAVE ALSO PERUSED ALL THE DOCUMENTS FILED BY THE APPELLANT BEFORE ME. THE CASE LAWS RELIED UPON BY THE APPELLANT HAVE BEEN CAREFULLY PERUSED. ON CONSIDERATION OF T HE FACTS OF THE CASE I FIND THAT THE APPELLANT HAD MADE ITS CLAIM U/S 80IB (10) IN THE ORIGINAL RETURN OF INCOME FILED U/S 139(1) ON VALID GROUNDS. LATER ON THE BUILDING PLAN WAS AMENDED ON 10.2.06 AND 14.5.08. IN THE AM ENDED BUILDING PLAN APPROVED ON 10.2.06 THE COMMERCIAL PORTION OF THE BUILDING PROJECT WAS KEPT WITHIN 2000 SQ.FT. SO AS TO COMPLY WITH TH E PROVISIONS OF SEC 80IB (10)(D) SUBSEQUENT TO THIS HAPPENING THERE WAS A ROAD WIDENING BY THE CORPORATION WHICH NECESSITATED SECOND AMENDM ENT IN THE BUILDING PLAN IN ORDER TO ENCASH THE OPPORTUNITY BY INCREASING THE AREA ITA NO. 4101/M/09 7 OF SHOPS AND COMMERCIAL CONSTRUCTION. THIS WAS PURE LY A COMMERCIAL DECISION TAKEN BY THE APPELLANT. AFTER TAKING THE DECISION OF EXPANDING THE COMMERCIAL AREA OF THE BUILDING PLAN THE APPELL ANT WITHDREW ITS CLAIM OF DEDUCTION U/S 80IB(10) BY FILING ANOTHER RETURN OF INCOME. TECHNICALLY THE RETURN OF INCOME FILED ON 6.11.07 W AS NOT A VALID REVISED RETURN BUT THE INTENTION OF THE APPELLANT FOR WITHD RAWING THE CLAIM OF DEDUCTION U/D 80IB(10) WAS MADE CLEAR BEFORE THE AO BY THE APPELLANT. IN THE ORIGINAL RETURN THE APPELLANT HAD CLAIMED TH E DEDUCTION U/S 80IB (10) WITH A BONAFIDE BELIEF THAT THE APPELLANTS BU ILDING PROJECT WAS FULLY COMPLYING WITH THE VARIOUS CONDITIONS LAID DOWN IN SEC 80IB(10) OF THE IT ACT. THE AO HAS ALSO ACCEPTED IN THE ASSESSMENT ORDER. THAT THERE WAS NO MISTAKE OR OMISSION IN THE ORIGINAL RETURN F ILED BY THE APPELLANT. THE ACTION OF THE APPELLANT WITHDRAWING THE CLAIM O F DEDUCTION U/S 80IB (10) CANNOT BE HELD AS CONCEALMENT OF INCOME BY THE APPELLANT. IN THE ORIGINAL RETURN THE CLAIM U/S 80IB(10) WAS MADE AS THE PROJECT WAS SATISFYING THE CONDITIONS LAID DOWN IN SECTION 80IB (10). SUBSEQUENT WITHDRAWAL OF THE CLAIM DID NOT PROVE THAT THERE WA S DELIBERATE FURNISHING OF INACCURATE PARTICULARS OF ITS INCOME BY THE APPELLANT AT THE TIME OF FILING THE ORIGINAL RETURN OF INCOME. THE C ASE LAWS RELIED UPON BY THE APPELLANT ARE RELATED TO THE WITHDRAWAL OF CLA IM OF DEDUCTIONS UNDER CHAPTER VIA OF THE IT ACT UNDER VARIOUS CIRCU MSTANCES. IN THE CIRCUMSTANCES OF THOSE CASES IT HAS BEEN HELD BY D IFFERENT HIGH COURTS THAT WITHDRAWAL OF CLAIM OF DEDUCTION DOES NOT AMOU NT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS O F INCOME. THE RATIO LAID DOWN IN THESE CASES IS APPLICABLE TO THE INSTA NT CASE ALSO. IN VIEW OF THE FACTS DISCUSSED ABOVE AND ALSO IN VI EW OF THE EXISTING LEGAL POSITION I AM OF THE VIEW THAT THE AO IS NOT JUSTIFIED IN IMPOSING THE PENALTY U/S 271(1)(C) OF THE IT ACT 1 961 ON THE APPELLANT AS HE HAS NOT BEEN ABLE TO SHOW HOW THE APPELLANT H AD CONCEALED ITS INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF I TS INCOME. THE PENALTY OF RS 18 61 027/- IMPOSED U/S 271(1)(C) IN THIS CASE IS THEREFORE SET ASIDE. THE GROUNDS OF APPEAL TAKEN BY THE APPELLANT STAND ALLOWED. 14. AGGRIEVED THE REVENUE IS ON APPEAL BEFORE US. 15. WE HEARD BOTH THE PARTIES. IT IS NOT IN DISPUTE THAT AS PER THE ORIGINAL APPROVED PLAN ASSESSEES PROJECT WAS ENTITLED TO R ELIEF U/S 80IB(10). THERAFTER THE ASSESSEE FELT THAT IT WOULD BE MORE C OMMERCIALLY VIABLE TO CONSTRUCT A LARGER PERCENTAGE OF COMMERCIAL AREA AN D HENCE FILED A REVISED PLAN FOR APPROVAL. HAVING DONE THAT HE FILED A REVI SED RETURN ON 6.11.07 WITHDRAWING THE CLAIM FOR RELIEF U/S 80 IB (10) BEC AUSE THE ASSESSEE FELT THAT THEY WILL NOT BE ENTITLED TO RELIEF U/S 80IB(10) AS PER THE REVISED PLAN. IN FACT ITA NO. 4101/M/09 8 THE ASSESSEE SUBMITS THAT THE REVISED PLAN WAS APPR OVED ONLY ON 14.5.08 TILL SUCH TIME THE ORIGINAL PLAN IS THE APPROVED ONE AND THE ASSESSEE IS ENTITLED TO RELIEF U/S 80IB(10). BUT THE ASSESSEE IN ANTICIP ATION HAD WITHDRAWN THE RELIEF U/S 80IB(10). FURTHER AT THE TIME THE ASSESS EE FILED THEIR RETURN ON 31.10.05 THE REVISED PLAN WAS APPROVED ONLY ON 14. 5.08. ONLY WHEN THE REVISED PLAN WAS APPROVED BY THE APPROPRIATE AUTHOR ITY CAN THE ASSEESSEE BE SAID NOT ENTITLED TO RELIEF U/S 80IB(10). BY THA T TIME IN MAY 2008 THE TIME FOR FILING REVISED RETURN HAS ELAPSED AND THER E IS NOTHING THE ASSESSEE CAN DO BUT INFORM THE AO OF THEIR INTENTION OF WITH DRAWING THEIR CLAIM FOR RELIEF U/S 80IB(10) BY WAY OF LETTER OR A REVISED RETURN WHICH THE ASSESSEE HAS DONE IN THIS CASE. 16. THE APEX COURT IN THE CASE OF COMMISSIONER OF I NCOME TAX VS RELIANCE PETRO PRODUCTS LTD. HAS HELD AS UNDER: A GLANCE AT THE PROVISIONS OF SEC 271(1)(C) OF THE INCOME TAX ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT T HERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICU LARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SEC 271 (1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INF ORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE T HE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY UNLESS THE CASE IS STRICTLY COV ERED BY THE PROVISION THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRE TCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE THE LIA BILITY WOULD ARISE. TO ATTRACT PENALTY THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH O R ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REG ARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNO T AMOUNT TO FURNISHING INACCURATE PARTICULARS. ITA NO. 4101/M/09 9 17. FROM THE ABOVE IT IS CLEAR THAT MERE MAKING OF THE CLAIM WHICH IS LATER DISALLOWED CANNOT AMOUNT TO FURNISHING OF INACCURAT E PARTICULARS AND HENCE CANNOT INVITE LEVY OF PENALTY. AS OBSERVED EARLIER AT THE TIME OF FILING OF THE RETURN IN FACT THE ASSESSEE WAS ENTITLED TO THE RE LIEF U/S 80IB(10) AND ONLY WHEN THE REVISED PLAN WAS APPROVED LATER IN MAY 200 8 THE PROJECT BECAME DISENTITLED TO CLAIM RELIEF U/S 80IB(10). IN THE CI RCUMSTANCES WE CONCUR WITH THE CIT(A) AND HOLD THAT THE ASSESSEE HAS NOT FURNI SHED ANY INACCURATE PARTICULARS IN THE RETURN OF INCOME AND HENCE ON TH E FACTS AND CIRCUMSTANCES OF THE CASE THE AO ERRED IN LEVYING P ENALTY OF RS 18 61 027/- U/S 271(1)(C). 18. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED ORDER PRONOUNCED ON THIS 25 TH DAY OF FEBRUARY 2011 SD/- SD/- (S.V. MEHROTRA) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI DATED 25 TH FEBRUARY 2011. RJ COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASST. REGISTRAR I.T.A.T MUMBAI ITA NO. 4101/M/09 10 DATE INITIALS 1 DRAFT DICTATED ON: 17.02.2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 18.02.2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: ______ 9 DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER: ______