2018 (4) TMI 882

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....d reasonable cause for not filing the appeal within the stipulated time. Ld D.R. did not have any objection for condoning the delay. We, therefore, condone the delay of 108 days in filing the appeal before the Tribunal and admit the appeal for hearing. 3. The sole issue involved in the grounds of appeal is that the CIT(A) erred in confirming the levy of penalty of Rs. 5,97,480/- u/s.271(1)(c) of the I.T.Act, 1961. 4. The brief facts of the case are that the Assessing Officer disallowed deduction of Rs. 16,65,43/- claimed under section 80 IB of the Act for the following reasons: "The assessee had claimed deduction of Rs. 16,65,433/- u/s.80IB of the I.T.Act, 1961 in respect of its project at Patia, POChandrasekharpur and at Gha....

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....e claim of Rs. 16,65,433/- was disallowed by the AO and added back to the total income." 5. Thereafter, the Assessing Officer levied penalty of Rs. 5,97,480/- for concealment of income u/s.271(1)(c) of the Act, which was confirmed in appeal by the CIT(A). 6. Ld A.R. of the assessee argued before us that penalty cannot be levied where deduction claimed in the return of income by the assessee is disallowed by the Assessing Officer. He relied on the decision of Hon'ble Supreme Court n the case of CIT vs. Reliance Petroproducts (P) Lt., 322 ITR 158 (SC), wherein, it was held that "merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the revenue, that by itself would not attract the....

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...., the area was 1689.7 sq.ft, which being more than 1500 sq.ft, is not allowable in view of the provisions of section 80IB(10)(c) of the Act. Therefore, he disallowed the deduction for the entire project claimed by the assessee. We find that Hon'ble Madras High Court in the case of VISWAS PROMOTERS PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX, 255 CTR 149 (Mad) vide order dated 2November, 2012 has observed as under: "14. On the facts admitted by the Revenue, in the projects "Agrini" and "Vajra", there are number of flats which are below 1500 sq.ft., and the relevant built-up area requirement is specified under Section 80IB(10)(c) of the Income Tax Act. Thus, the built-up area in some of the flats in both these projects a....

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....f any building and the wordings in Section 80IB(10) of the Act. In the circumstances, we hold that the mere fact that one of the blocks have units exceeding built-up area of 1500 sq.ft, per se, would not result in nullifying the claim of the assessee for the entire projects. Consequently, in respect of each of the blocks, the assessee is entitled to have the benefit of deduction in respect of residential units satisfying the requirement under Section 80IB(10)(c) of the Act. In so holding, we also agree with the decision of the Bombay High Court reported in (2012) 206 TAXMAN 584 (CIT v. Vandana Properties), which was decided by the Bombay High Court on similar lines as in the assessee's case before us. 15. In the light of the ab....