M/S HIGH RISE CONSTRUCTION,,NAGPUR vs. I.T.O. WARD -1(5), NAGPUR

The assessee raised sole ground of appeal challenging the action of CIT(A) in confirming the penalty imposed by the AO u/s. 271(1)(c) of the Act.

Heard both the parties and perused the material available on record. We note that the assessee is a firm engaged in the business of construction and builder. The assessee conducts its business under the name and style of “M/s. High Rise Construction”. According to the AO that the assessee filed return of income declaring a total income at Rs. Nil by claiming deduction u/s. 80IB(10) of the Act. We note that the assessee constructed a housing scheme and earned a total profit of Rs.42,20,301/- against which a deduction u/s. 80IB(10) of the Act claimed. The AO vide order dated 24-02-2015, we note, that the assessee has violated the provisions of section 80IB(10) of the Act and the project was incomplete and denied deduction u/s. 80IB(10) of the Act. As matter stood thus, the AO also initiated proceedings u/s. 271(1)(c) of the Act. In the penalty order dated 09-03-2016 vide Para No. 4 it was held that the assessee failed to produce supporting documents like completion certificate issued by the local authority during the assessment proceedings. It was contended that the assessee submitted circumstantial evidences in the form of Tax Receipt, NOC for electrical connection, valuation certificate issued by the Architect for financing loan, possession letter etc. and also requested the AO to put the penalty proceedings in abeyance in view of appeal being pending before the ITAT but however, the AO imposed penalty of Rs.13,04,100/- by holding that the assessee furnished inaccurate particulars of income in respect of deduction u/s. 80IB(10) of the Act as was confirmed by the CIT(A). It was brought to our notice by the ld. AR that the SMC Bench of Tribunal deleted the disallowance made by the AO u/s. 80IB(10) of the Act and the same is placed on record. On perusal of the order dated 18-01- 2017 passed by Nagpur Bench of the Tribunal which held by examination of relevant evidences that the assessee duly completed the housing project and entitled for claiming deduction u/s. 80IB(10) of the Act vide Para Nos.

In the result, the appeal of assessee is allowed.