VASTUSANKALPA DEVELOPERS, KALYAN V. ASST CIT CIR 3, KALYAN

CO 252/MUM/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9164 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 21-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Section: 143(3)

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNALF BENCH, MUMB AI . .. . . .. . , ,, , !' !' !' !' , # # # # $ % & $ % & $ % & $ % &, ,, , ' !' ' !' ' !' ' !' ( ( ( ( BEFORE SHRI P.M. JAGTAP, AM AND SHRI AMIT SHUKLA, J M ITA NO. 6074/MUM/2012 ASSESSMENT YEAR-2006-07 ACIT CIR-3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN(W)-421301, DIST-THANE ) ) ) ) / VS. M/S VASTUSANKALP DEVELOPERS, 108, MADHAV BAUG, GAUSHALA ROAD, SHIVAJI PATH, KALYAN (W) '* ./ PAN :AADFV5372R ( *+ / APPELLANT ) .. ( ,-*+ / RESPONDENT ) C.O.NO. 252/MUM/2013 ASSESSMENT YEAR-2006-07 M/S VASTUSANKALP DEVELOPERS, 108, MADHAV BAUG, GAUSHALA ROAD, SHIVAJI PATH, KALYAN (W) ) ) ) ) / VS. ACIT CIR-3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN(W)-421301, DIST-THANE '* ./ PAN :AADFV5372R ( *+ / APPELLANT ) .. ( ,-*+ / RESPONDENT ) ITA NO. 6075/MUM/2012 ASSESSMENT YEAR-2009-10 ACIT CIR-3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN(W)-421301, DIST-THANE ) ) ) ) / VS. M/S VASTUSANKALP DEVELOPERS, 108, MADHAV BAUG, GAUSHALA ROAD, SHIVAJI PATH, KALYAN (W) '* ./ PAN :AADFV5372R ( *+ / APPELLANT ) .. ( ,-*+ / RESPONDENT ) C.O.NO. 253/MUM/2013 ASSESSMENT YEAR-2009-10 M/S VASTUSANKALP DEVELOPERS, 108, MADHAV BAUG, GAUSHALA ROAD, SHIVAJI PATH, KALYAN (W) ) ) ) ) / VS. ACIT CIR-3 2 ND FLOOR, RANI MANSION, MURBAD ROAD, KALYAN(W)-421301, DIST-THANE '* ./ PAN :AADFV5372R ( *+ / APPELLANT ) .. ( ,-*+ / RESPONDENT ) 2 ITA NO.6074 & 6075/MUM/2012, C.O.252 & 253/MUM/2013. M/S VASTUSANKALP DEVELOPERS. '# . / / REVENUE BY: SHRI SURENDRA KUMAR . / / ASSESSEE BY : SHRI K.SHIVRAM )# . / DATE OF HEARING : 04/12/2013 012 . / DATE OF PRONOUNCEMENT : 13/12/2013 !% !% !% !% / ORDER PER P.M.JAGTAP, AM :- . .. . . .. . , ,, , !' !' !' !' THESE TWO APPEALS PREFERRED BY THE REVENUE AGAINST SEPARATE ORDERS PASSED BY THE LD. CIT(A)-1, THANE, DATED 11/07/2012 AND 19/07/2012 FOR A.Y. 2006-07 AND 2009-10 INVOLVE A COMMON ISSUE AND THE SAME THEREFORE HAVE BEEN HEARD TOGETHER AND ARE BEING DI SPOSED OF BY THIS SINGLE CONSOLIDATED ORDER ALONGWITH CROSS OBJECTION S FILED BY THE ASSESSEE BEING C.O. NO.252 & 253/MUM/2013. 2. THE SOLITARY ISSUE INVOLVED IN THE APPEALS OF TH E REVENUE RELATES TO THE DELETION BY THE LD. CIT(A) OF THE ADDITION MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF ASSESSEES CLAIM FOR THE DEDUCTION U/S 80IB(10) OF THE INCOME-TAX ACT, 1961. 3. THE ASSESSEE IN THE PRESENT CASE IS PARTNERSHIP WHICH IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. IN THE RETUR N OF INCOME FILED FOR THE YEARS UNDER CONSIDERATION, DEDUCTION U/S 80IB(10) O F THE ACT WAS CLAIMED BY THE ASSESSEE AMOUNTING TO RS.1,05,97,493/- AND RS.59,48,132/- FOR A.Y.2006-07 AND 2009-10 RESPECTIVELY. IN THE ASSES SMENT ORIGINALLY COMPUTED U/S 143(3) VIDE ORDER DATED 28.12.2007, TH E ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) WAS ALLOWED BY THE AO SU BJECT TO THE CONDITION THAT THE RELEVANT PROJECT OF THE ASSESSEE WOULD BE COMPLETED BY 31.03.2009 WHICH WAS THE MAXIMUM TIME ALLOWED TO TH E ASSESSEE IN ORDER TO THE ENTITLED FOR DEDUCTION U/S 80IB(10). DURING THE COURSE OF ASSESSMENT PROCEEDING FOR A.Y. 2007-08, IT WAS NOTI CED BY THE AO THAT THE ASSESSEE COULD NOT COMPLETE THE SAID PROJECT BY 31 ST MARCH 2009. THE STAND TAKEN BY THE ASSESSEE IN THIS REGARD BEFORE T HE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS THAT THE TOTAL AREA OF PROJECT WAS 3 ITA NO.6074 & 6075/MUM/2012, C.O.252 & 253/MUM/2013. M/S VASTUSANKALP DEVELOPERS. 22,267 SQ. MTR. ON WHICH FURTHER TDR OF 12,166 SQ. MTR. WAS LOADED VIDE REVISED APPROVAL DATED 30.03.2007. IT WAS CONTEND ED THAT THE TOTAL WORK COMPLETED ON THE PROJECT UP TO 31.03.2007 ITSELF CO VERED THE AREA OF MORE THAN 1 ACRE AND THEREFORE THE ASSESSEE SHOULD BE EN TITLED TO GET THE DEDUCTION U/S U/S 80IB(10). THIS STAND OF THE ASSE SSEE WAS NOT FOUND ACCEPTABLE BY THE AO. ACCORDING TO HIM, THE PART C OMPLETION OF THE PROJECT WAS NOT RECOGNIZED UNDER THE ACT WHICH REFE RRED TO THE PROJECT AS A WHOLE. HE THEREFORE, HELD THAT THE BENEFIT OF DEDU CTION U/S 80IB(10) CANNOT BE EXTENDED TO THE HALF COMPLETED PROJECT EV EN THOUGH THE AREA OCCUPIED BY SUCH HALF COMPLETED PROJECT WAS MORE T HAN ONE ACRE. ACCORDINGLY, HE THEREFORE, DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) IN THE ASSESSMENT COMPLETED FOR A.Y. 2007-08 AND ALSO REOPENED THE ASSESSMENT FOR A.Y. 2006-07 AND D ISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) AMOUNTIN G TO RS.1,05,97,493/ RELYING ON HIS ORDER FOR A.Y. 2007-08. IN THE ASSE SSMENT COMPLETED FOR AY. 2009-10 U/S 143(3), HE ALSO FOLLOWED HIS ORDER FOR AY. 2007-08 AND DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) AMOUNTING TO RS. 59,48,132/-. 4. AGAINST THE REASSESSMENT ORDER PASSED BY THE AO U/S 143(3) R.W.S. 147 FOR A.Y. 2006-07, APPEAL WAS PREFERRED BY THE A SSESSEE BEFORE THE LD. CIT(A) CHALLENGING THE VALIDITY OF THE SAID ASSESS MENT AS WELL AS DISPUTING MADE ON THE ADDITION ACCOUNT OF DISALLOWANCE OF DED UCTION U/S 80IB(10). AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AS WELL AS MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) UPHELD THE VALI DITY OF THE ASSESSMENT MADE BY THE AO U/S 143(3) R.W.S. 147 HOLDING THAT T HE SAME DID NOT SUFFER FROM ANY INFIRMITY OR DEFECT. HE HOWEVER, DELETED THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCT ION U/S 80IB(10) RELYING ON THE ORDER OF HIS PREDECESSORS IN ASSESSE ES OWN CASE FOR A.Y. 2007-08 WHICH WAS UPHELD BY THE TRIBUNAL VIDE ITS O RDER DATED 31 ST MARCH 2012 PASSED IN ITA NO. 6758/MUM/2010. THE CIT(A) A LSO ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) WH ILE DISPOSING OF THE APPEAL OF THE ASSESSEE FOLLOWING THE ORDER OF THE T RIBUNAL IN ASSESSEE OWN CASE FOR A.Y. 2007-08 (SUPRA) GIVING RELIEF TO THE ASSESSEE ON THE SIMILAR ISSUE. 4 ITA NO.6074 & 6075/MUM/2012, C.O.252 & 253/MUM/2013. M/S VASTUSANKALP DEVELOPERS. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. AS AGREED BY LD. REPR ESENTATIVES OF BOTH THE SIDES, THE SOLITARY COMMON ISSUE INVOLVED IN THESE APPEALS OF THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY TH E DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2007-08 RE NDERED BY ITS ORDER DATED 31 ST MARCH 2012 (SUPRA) WHEREIN THE SIMILAR CLAIM OF TH E ASSESSEE FOR DEDUCTION U/S 80IB(10) IN RESPECT OF SAME PROJ ECT WAS ALLOWED BY THE TRIBUNAL VIDE PARA NO. 6 OF ITS ORDER WHICH READS A S UNDER:- WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORDS. WE FIND THAT FIRST PLAN OF THE ASSESSEES PROJECT WAS APPROVED ON 14.12.2004 VIDE C.C. OF THE SAME DATE (PAGE NO.37 OF THE COMPILATION AND COPY OF THE PLAN IS PLACED AT PAGE NO.57 OF THE COMPILATION). ON EXAMIN ING THE APPROVED PLAN, THE TOTAL AREA OF THE PLOT WAS SHOWN AT 22,267 SQ.MTRS. AND AFTER MAKING REQUIRED ADJUSTMENT IN TH E FORM OF DEDUCTIONS LIKE ROAD, SET-BACK AREA, PROPOSED ROADS , RECREATION GROUND ARE ETC., THE TOTAL ELIGIBLE AREA FOR THE CO NSTRUCTION HAS BEEN SHOWN AT 19,328.47 SQ.MTRS. AS THE PERMISSIBLE BUILT UP AREA BUT AS PER THE TOTAL PROPOSED AREA, IT WAS SHO WN AT 18,659.52 SQ.MTRS. AND CONSUMPTION OF THE FSI IS SH OWN AT 97%. SUBSEQUENTLY, THE ASSESSEE OBTAINED THE TDR AN D FILED THE PLAN FOR THE APPROVAL. APPROVING THE TDR THE AS SESSEE WAS ALLOWED TO COMMENCE THE CONSTRUCTION IN THE SECOND PHASE GIVEN BY THE ASSESSEE WHICH, IS APPROVED ON 30.03.2 007. IT IS TRUE THAT IN THE SECOND PLAN THE BUILDINGS SHOWN IN THE FIRST PLANT ARE APPEARING BUT IN ORIGINAL PLAN SAID BUILD INGS ARE NOT APPEARING. THE ARGUMENT OF THE LD. COUNSEL IS THAT THE AS THE PLOT IS COMMON, HENCE, THE ASSESSEE HAS SHOWN THE B UILDINGS APPEARING IN THE FIRST PLANT ALSO. ADMITTEDLY, WHEN THE FIRST PLAN WAS APPROVED BY THE LOCAL AUTHORITY, AT THAT T IME, THE ASSESSEE HAS CONSUMED 97% OF THE FSI AND THERE WAS NO BALANCE FSI, WHICH THE ASSESSEE COULD COMMERCIALLY EXPLOIT. SUBSEQUENTLY, THE ASSESSEE OBTAINED THE TDR AND UTI LISED 5 ITA NO.6074 & 6075/MUM/2012, C.O.252 & 253/MUM/2013. M/S VASTUSANKALP DEVELOPERS. PORTION OF THE LAND ON WHICH OTHERWISE AS PER THE E XISTING REGULATIONS IT WAS NOT PERMISSIBLE TO HAVE ANY CONS TRUCTION AND IT WAS IN THE FORM OF THE OPEN SPACE ONLY. ONLY DUE TO OBTAINING THE TDR THE ASSESSEE COULD GO WITH THE SECOND PHASE OF THE PROJECT. THE TERM PROJECT HAS NOT BEEN DEFINED FO R THE PURPOSE OF SEC.80I(10). IN THE DIFFERENT JUDICIAL PRONOUNCE MENT THE TERM PROJECT HAS BEEN INTERPRETED KEEPING THE LIBERAL APPROACH. IN OUR OPINION, THE FIRST PHASE ITSELF IS A SEPARATE PROJECT AND ADMITTEDLY, THE ASSESSEE COMPLETED THE BUILDING SHO WN IN THE FIRST PHASE WITHIN FOUR YEARS FROM THE FINANCIAL YE AR IN WHICH THE COMMENCEMENT CERTIFICATE WAS ISSUED I.E. IN F.Y . 2004-05. THE LD. D.R. REFERRED TO THE TRADING IN THE COMPLET ION CERTIFICATE WHERE IT IS STATED THAT THE PROJECT IS PARTLY COMPL ETED. IN OUR OPINION, AS THE PLOT OF LAND IS COMMON FOR BOTH THE PHASES, HENCE, AS PER THEIR REGULATIONS THE MUNICIPAL AUTHO RITIES HAVE ISSUED PART COMPLETION CERTIFICATE. AFTER GIVING OU R ANXIOUS CONSIDERATION TO THE ENTIRETY OF THE FACTS AND CONS IDERING THE PROVISIONS OF THE LAW, WE ARE OF THE OPINION THAT T HE LD. CIT (A) RIGHTLY HELD THAT TWO PHASES ARE OF TWO DIFFERENT P ROJECTS AND SO FAR AS PHASE-1 IS CONCERNED, THE ASSESSEE HAS COMPL ETED THE PROJECT WITHIN TIME PRESCRIBED. IT IS PERTINENT TO NOTE HERE IN THE ENTIRE CONTROVERSY THAT THE A.O. HAS NO RESERVATION OR OBJECTION IN RESPECT OF OTHER CRITERIA PROVIDED IN THE ACT. M OREOVER, SO FAR AS SECOND PHASE IS CONCERNED, WHICH HAS BEEN COMMEN CED, WHICH IS TOTALLY BASED ON THE TDR, THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION U/S.80IB(10) AS PER THE STATE MENT MADE BY THE LD. COUNSEL. WE ARE, THEREFORE, OF THE OPINI ON THAT THERE IS NO MERIT IN THE APPEAL FILED BY THE REVENUE. WE, ACCORDINGLY, CONFIRM THE ORDER OF THE LD. CIT (A). 6. AS THE ISSUE INVOLVED IN THE YEARS UNDER CONSIDE RATION AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THAT OF A.Y. 2007-08, WE RESPECTFULLY FOLLOW THE ORDER OF THE COORDINATE BEN CH OF THIS TRIBUNAL FOR A.Y. 2007-08 (SUPRA) AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) DELETING THE ADDITIONS MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF 6 ITA NO.6074 & 6075/MUM/2012, C.O.252 & 253/MUM/2013. M/S VASTUSANKALP DEVELOPERS. ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10). BOTH THE APPEALS OF THE REVENUE ARE ACCORDINGLY DISMISSED. 7. AS REGARDS THE CROSS OBJECTION FILED BY THE ASSE SSEE FOR 2006-07 BEING C.O. NO. 252/MUM/2013, IT IS OBSERVED THAT TH E SOLITARY ISSUE INVOLVED THEREIN IS RELATING TO THE VALIDITY OF THE ASSESSMENT MADE BY THE AO U/S 143(3) R.W.S. 147. AS AGREED BY THE LD. REP RESENTATIVES OF BOTH THE SIDES, THIS ISSUE HAS BEEN BECOME ACADEMIC OR INFRU CTUOUS AS A RESULT OF OUR DECISION RENDERED ABOVE DELETING THE ENTIRE ADD ITION MADE BY THE AO IN THE SAID ASSESSMENT ON ACCOUNT OF DISALLOWANCE O F ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10). WE THEREFORE DO NOT CONSIDE R IT NECESSARY OR EXPEDIENT TO ADJUDICATE UPON THIS ISSUE AND DISMISS THIS CROSS OBJECTION OF THE ASSESSEE AS INFRUCTUOUS. 8. AS REGARDS THE ASSESSEES CROSS OBJECTION FOR A. Y. 2009-10 BEING ITA NO.253/MUM/2013, IT IS OBSERVED THAT IN THE GROUNDS RAISED THEREIN, THE ASSESSEE HAS MERELY SUPPORTED THE IMPUGNED ORDER OF THE LD. CIT(A) ALLOWING THE CLAIM OF THE ASSESSEE OF DEDUCTION U/S 80IB(10). AS WE HAVE ALREADY UPHELD THE ORDER OF THE LD. CIT(A) FOR A.Y. 2009-10 ALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10), T HE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS ACCORDINGLY DISMISSED. 9. IN THE RESULT, APPEALS OF THE REVENUE AS WELL AS CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER 2013. SD/- SD/- AMIT SHUKLA P.M.JAGTAP (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) MUMBAI , 3!) 3!) 3!) 3!) DATED: 13.12.2013 F{X~{T? P.S. 7 ITA NO.6074 & 6075/MUM/2012, C.O.252 & 253/MUM/2013. M/S VASTUSANKALP DEVELOPERS. !% . ,'$4 542 / COPY OF THE ORDER FORWARDED TO : (1) ') 67 / THE ASSESSEE; (2) '# / THE REVENUE; (3) 8() / THE CIT(A); (4) 8 / THE CIT, MUMBAI CITY CONCERNED; (5) 4#; ,'') , , / THE DR, ITAT, MUMBAI; (6) <6 / GUARD FILE. -4 ,' / TRUE COPY !%) / BY ORDER = / > / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI