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Sanjiv Park Co. Op. Hsg. Soc. Ltd Meghdoot B/h. Fadia Chamber Opp. Behra Moonga School, Ashram Road, Ahmedabad Vs The Income Tax Officer, Ward-10(4), Surat (Respondent)
September, 25th 2013
                   AHMEDABAD "SMC" BENCH

                      ITA No. 554/Ahd/2010
                     Assessment Year 2005-06

     Sanjiv Park Co. Op. Hsg.            The Income Tax
     Soc. Ltd "Meghdoot" B/h.            Officer, Ward-10(4),
     Fadia Chamber Opp.             Vs   Surat
     Behra Moonga School,                (Respondent)
     Ashram Road, Ahmedabad
     PAN: AABBS0313C

        Assessee by:          Sri Paresh S. Shah, A.R.
        Revenue by:           Sri B.L. Yadav, Sr.D.R.

       Date of hearing                   :   16-09-2013
       Date of pronouncement             :   16-09-2013



     This appeal of the assessee arises from the order of Ld. CIT(A)-XVI
Ahmedabad dated 23-11-2009 for the assessment year 2005-06.
I.T.A No. 554/Ahd/2010    A.Y. 2005-06                       Page No          2
Sanjiv Park Co. Op. Hsg Soc Ltd vs. ITO

2.     The assessee has raised following grounds of appeal:-

       "Your appellant being aggrieved by the order passed by the learned
       Commissioner of Income-tax (Appeals), Gandhinagar against penalty
       u/s. 271(1)(c) of the IT Act, presents this appeal against the same on
       the following amongst other grounds.

       1.      The Learned CIT(Appeals) erred in confirming the penalty u/s.
       271(1)(c) of the I T Act. The appellant submits that there is neither
       concealment nor furnishing of inaccurate particulars of income. The
       Appellant claimed the deduction u/s. 80P(2)(e) of the I.T. Act. Same
       deduction was allowed in immediately preceding year. We had
       bonafide belief that the deduction is available to us, as it was allowed.
       It is therefore submitted that the penalty may kindly be cancelled.

       2.     The Order passed by the learned Commissioner of Income Tax
       (Appeals) is bad in law and contrary to the provisions of law and
       facts. It is submitted that the same be held so."

3.     Brief facts of the case are that assessee is a co-operative housing
society. The assessee claimed deduction of Rs. 2,18,285/- u/s 80P(2)(e) of
the rental income from Unique Sales Agency and M/s. Redington (India)
Ltd.   As per the agreement the premises was to be used for godown
purposes. In the assessment order passed u/s. 143(3) the Assessing Officer
did not allow the deduction u/s. 80P(2) on the ground that the assessee is a
co operative housing society and letting out of its premises would not
amount to letting out of godown within the meaning of section 80P(2). The
appeal of the assessee was dismissed both by the CIT(A) & by the ITAT
A'bad on the ground that merely a residential premises is let out by the
assessee to a third party & the third party has used the same as its godown,
that does not mean the premises was a godown within the meaning of sec
80P(2)(e). The Assessing Officer then proceeded with the levy of penalty
I.T.A No. 554/Ahd/2010    A.Y. 2005-06                     Page No            3
Sanjiv Park Co. Op. Hsg Soc Ltd vs. ITO

on the addition of Rs. 2,18,285/-. Minimum penalty of Rs. 62,485/- u/s. 271
(1)(c) was levied by him.

4.     Ld. CIT(A) after considering the submission of the assessee
confirmed the action of AO.

5.    Ld. counsel for the assessee, Sri Paresh S Shah argued that the
property rented out was a commercial property for renting the warehouse
which is available on lease agreement placed at paper book page no. 228 in
clause A of this agreement.       It was specifically mentioned in the said
agreement that the said leased premises shall not be used for any other
purposes other than warehousing operation of the lessee. He further argued
that the said premises were let out as godown which at the same time is used
by the lesser as a godown for storage of goods for marketing of commodities
which qualified for deduction u/s. 80P(2)(e) of the Income Tax Act. The
said facts are available as lease agreement bill M/s Unique Sales Agency and
Redinton India which were available before both the authorities below.
There is no concealment of fact and no furnishing of inaccurate particulars
of any income. Also there is no malafide intention of whatsoever kind. He
further argued that the assessee has submitted the explanation and has
claimed deduction bonafidely.             Learned counsel for the assessee
distinguished the decision relied by the Ld. CIT(A). The present property
was a commercial property and not as a residential property which has been
leased out as a godowon by the assessee lesser which in the same form has
been used as a godown for storage of goods for marketing of commodities.

6.    Ld. DR on the other hand relied upon the orders of authorities below.
I.T.A No. 554/Ahd/2010    A.Y. 2005-06                      Page No         4
Sanjiv Park Co. Op. Hsg Soc Ltd vs. ITO

7.    I have heard the rival contentions and perused the facts of the case. In
the present case, the addition has been confirmed by the ITAT is not under
dispute. As per provisions of section 271(1)(c) of the Act, mainly it has to
be seen whether the assessee has concealed of the income or has furnished
inaccurate particulars of such income or has failed to offer an explanation or
the explanation offered is false or whether the explanation made is bonafide.
The assessee during the penalty proceedings has submitted that the
explanation that the premises are commercial and has been let out as
godown as a lesser to the lessee for the use as a godown for storage of goods
for marketing of commodities. As far as letting out of the premises and the
use of the same as a godown for storage of goods for marketing of
commodities has not been disputed, the assessee has submitted the
explanation and no particulars has been concealed therein.         The main
objection of the Ld. CIT(A) in para 4 of his order is that the residential
premises are for use as a godown.         The assessee has disclosed all the
material facts and has not concealed any particulars of income. The cases
relied upon by the Ld. CIT(A) are not applicable, since the assessee has
offered the explanation according to me is satisfactory and bonafide.
Decision of ITAT Mumbai Bench in the case of CIT vs. Supreme Industries
reported in 122 IIJ 56 relied by the Ld. CIT(A) is not applicable for the
reasons that in that case the assessee has wrongly brought forward
investments allowance after expiry of 8 years in violation of the provisions
of section 32A(6) and 72A(1) whereas in the present case there is no
concealment of such type. As regards the decision in the case of Udaipur
Sahakari Upabhokta Thok Bhandar Ltd reported in 315 ITR 21 (Supreme
Court), I am of the view that the said decision also cannot be made
I.T.A No. 554/Ahd/2010    A.Y. 2005-06                    Page No         5
Sanjiv Park Co. Op. Hsg Soc Ltd vs. ITO

applicable in the present case for the reasons mentioned hereinabove. In the
circumstances and facts of the case, we find no concealment of income or
furnishing of inaccurate particulars of income and accordingly Ld. CIT(A) is
not justified in confirming the penalty levied by A.O..       The same is
therefore directed to be deleted.

8.    In the result, assessee's appeal is allowed.

       Order is pronounced in open court on 16-09-2013

                                                     ( B. P. JAIN)
                                                ACCOUNTANT MEMBER

Ahmedabad : Dated 16/09/2013
     / Copy of Order Forwarded to:-
1. Assessee
2. Revenue
3. Concerned CIT
4. CIT (A)
5. DR, ITAT, Ahmedabad
6. Guard file.

                                                              By order/  ,

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