GIRDHARILAL K. LULLA, MUMBAI V. ADDL CIT RG 2, THANE

CO 254/MUM/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9729 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 09-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 21-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH N OTWANI
• Assessee Lawyers: R K SAHU
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 105/MUM/2012 (ASSESSMENT YEAR: 2008-09) ACIT, CIRCLE - 2 SHRI GIRDHARILAL K. LULLA KALYAN VS. M/S. SHREE GANESH BUILDES & OSHO DHARA DEVELOPERS SHOP NO. 1, LADSON APARTMENTS GOL MAIDAN, ULHASNAGAR-1 PAN - AAJPL7607D APPELLANT RESPONDENT CO NO. 254/MUM/2012 (ASSESSMENT YEAR: 2008-09) SHRI GIRDHARILAL K. LULLA ACIT, CIRCLE - 2 M/S. SHREE GANESH BUILDES & OSHO DHARA DEVELOPERS SHOP NO. 1, LADSON APARTMENTS GOL MAIDAN, ULHASNAGAR-1 VS. KALYAN PAN - AAJPL7607D APPELLANT RESPONDENT APPELLANT BY: SHRI R.K. SAHU RESPONDENT BY: SHRI SURESH N. OTWANI DATE OF HEARING: 09.06.2014 DATE OF PRONOUNCEMENT: 09.06.2014 O R D E R PER D. MANMOHAN, V.P. THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-II, THANE AND IT PERTAINS TO A.Y. 2008-09. 2. FOLLOWING GROUNDS WERE URGED BY THE REVENUE: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S. 80IB(10), RELYING ON THE DECISION IN THE CASE OF CI T VS BRAHMA ASSOCIATED, (2011) 33 ITR 289 (BOM), DESPITE THE FA CT THAT TOTAL BUILD UP AREA OF THE SHOPS IS 11,854 SQ.FT. WHICH E XCEEDS ITA NO. 105/MUM/2012 & CO 254 SHRI GIRDHARILAL K. LULLA 2 PRESCRIBED LIMIT OF 5% OF TOTAL BUILT UP AREA OR 2 000 SQ.FT. WHICHEVER IS LESS AS AMENDED BY FINANCE (NO. 2) AC T, 2004. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN UPHOLDING THE ASSESSEES CONTENTION THAT S UBSTITUTED PROVISIONS OF SECTION 80IB(10) BY FINANCE ACT (NO.2 ), 2004 ARE APPLICABLE PROSPECTIVELY AND NOT RETROSPECTIVELY. ON THE OTHER HAND, THE ASSESSEE, IN THE CROSS OBJEC TION, RAISES THE FOLLOWING GROUND: - 1. THE CIT(A) ERRED IN GIVING THE DIRECTION IN THE LAST PARA OF THE ORDER AT PAGE NO. 2 BY EXPRESSING THE OPINION THAT THE DEDUCTION ON PROFIT FROM COMMERCIAL AREAS TO THE EXTENT OF PR ESCRIPTION AS PER CLAUSE (D) OF SECTION 80IB(10) OF THE IT ACT, 1961 MAY BE ALLOWED AS AGAINST THE DECISION WHICH WAS FOLLOWED BY CIT(A )-II, THANE WHEREIN AS PER CLAUSE V OF THE DECISION FINDING WAS GIVEN WHEREIN COMMERCIAL BUILT UP AREA DOES NOT EXCEED 1 0% OF THE TOTAL AREA ARE ELIGIBLE FOR BENEFIT AS SUCH PRO JECTS ARE PREDOMINANTLY RESIDENTIAL IN NATURE APPELLANTS CASE IS COVERED BY THIS FINDINGS BEING HAVING IDENTICAL FAC TS (333 ITR 289 BRAHMA ASSOCIATED VS JCIT). 3. FACTS NECESSARY FOR DISPOSAL OF THE APPEALS ARE STA TED IN BRIEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION . FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE CLAIMED DEDUCTION OF ` 1.08 CRORES UNDER SECTION 80IB OF THE ACT. THIS DEDUCTION HAS BEEN CLAIMED AG AINST SHREE GANESH PLAZA-II. THE AO OBSERVED THAT SUCH CLAIM WAS NOT A CCEPTED IN THE PREVIOUS YEARS IN VIEW OF THE FACT THAT BUILT UP AREA OF SHO PS AND OTHER COMMERCIAL ESTABLISHMENTS EXCEEDED 5% OF THE AGGREGATE BUILT U P AREA OR BY 2000 SQ.FT. THOUGH IT WAS ADMITTED THAT THE ISSUE WAS DISPOSED OF BY THE CIT(A) AND AN APPEAL IS PENDING BEFORE THE TRIBUNAL, IN ORDER TO KEEP THE MATTER ALIVE THE AO FOLLOWED THE SAME PATTERN AND DISALLOWED THE CLA IM OF DEDUCTION UNDER SECTION 80IB OF THE ACT. 4. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THA T SHREE GANESH PLAZA-II WAS APPROVED BY THE LOCAL AUTHORITY, I.E. CIDCO AS RESIDENTIAL- CUM-HOUSING PROJECT VIDE APPROVAL DATED 01.12.2003 COMPRISING OF SIX WINGS WITH RESIDENTIAL UNITS AND COMMERCIAL SHOPS. IN ALL THERE ARE 155 FLATS AND 26 SHOPS. THE TOTAL AREA OF THE SHOPS WORKS OUT TO 11854 SQ.FT. WHEREAS THE TOTAL AREA OF THE FLATS, FROM A TO F WINGS, WOR KS OUT TO 131261 SQ.FT. IN THE FIRST YEAR THE AO APPEARS TO HAVE DISCUSSED THE ISSUE IN DETAIL. IN THE ITA NO. 105/MUM/2012 & CO 254 SHRI GIRDHARILAL K. LULLA 3 OPINION OF THE AO THE ASSESSEE CONSTRUCTED COMMERCI AL AREA OF MORE THAN 2000 SQ.FT., WHICH IS IN EXCESS OF THE PRESCRIBED L IMIT AS PER THE CONDITIONS LAID DOWN IN SECTION 80IB(10)(D) OF THE INCOME TAX ACT. IT WAS BROUGHT TO THE NOTICE OF THE FIRST APPELLATE AUTHORITY THAT THE IT AT G BENCH, MUMBAI, VIDE ITS ORDER IN ITA NO. 4207/MUM/2009 AND CO NO. 97/MU M/2010 (DATED 13.05.2011), DISMISSED THE REVENUE APPEAL AND ALLOW ED THE CROSS OBJECTION FILED BY THE ASSESSEE. IT WAS, THEREFORE, SUBMITTED THAT THE ISSUE STANDS SQUARELY COVERED BY THE AFORECITED DECISION, WHICH IN TURN IS BASED UPON THE DECISION OF THE ITAT SPECIAL BENCH, PUNE IN THE CAS E OF BHRAMA ASSOCIATES VS. JCIT (AFFIRMED BY THE HON'BLE BOMBAY HIGH COURT ). THE LEARNED CIT(A) OBSERVED THAT WHETHER COMMERCIAL UNITS ARE PERMITTE D IN HOUSING PROJECT IS NOW SETTLED BY THE DECISION OF THE HON'BLE BOMBAY H IGH COURT IN THE CASE OF JCIT VS. BRAHMA ASSOCIATED 333 ITR 289 WHEREIN THE COURT OBSERVED THAT IN CASE OF HOUSING PROJECT COMPRISING OF COMMERCIAL AR EA AS PERMITTED UNDER THE RULES OF THE LOCAL AUTHORITY, DEDUCTION UNDER S ECTION 80IB(10) CANNOT BE DENIED. THE AO IS, THEREFORE, DIRECTED TO ALLOW DED UCTION UNDER SECTION 80IB(10) ON THE COMMERCIAL COMPONENT OF SHREE GANES H PLAZA-II. IN SHORT, THE APPEAL FILED BY THE ASSESSEE WAS ALLOWED THOUGH THERE WAS SOME REFERENCE TO THE FACT THAT THE COMMERCIAL AREA OF C ONSTRUCTION EXCEEDS THE LIMIT OF 2000 SQ.FT. 5. AGGRIEVED BY THE ORDER PASSED BY THE CIT(A), REVENU E PREFERRED AN APPEAL WHEREIN IT WAS CONTENDED THAT THE ASSESSEE I S NOT ENTITLED FOR DEDUCTION UNDER SECTION 80IB(10) SINCE THE TOTAL AR EA OF THE SHOPS IS 11,854 SQ.FT., WHICH EXCEEDS THE PRESCRIBED LIMIT OF 5% OF THE TOTAL BUILT UP AREA OR 2000 SQ.FT. WHICHEVER IS LESS AS AMENDED BY FINANCE (NO. 2) ACT, 2004. IN OTHER WORDS, THE CASE OF THE REVENUE IS THAT THE PR OVISIONS AS SUBSTITUTED BY THE FINANCE (NO. 2) ACT, 2004 IS APPLICABLE RETROSP ECTIVELY. BY WAY OF ABUNDANT PRECAUTION THE ASSESSEE CONTENDS THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE BOM BAY HIGH COURT IN THE CASE OF BHRAMA ASSOCIATES (SUPRA). 6. AT THE TIME HEARING THE LEARNED COUNSEL FOR THE ASS ESSEE PLACED BEFORE US COPIES OF THE FOLLOWING ORDERS OF THE TRIBUNAL T O SUBMIT THAT THE ITAT G ITA NO. 105/MUM/2012 & CO 254 SHRI GIRDHARILAL K. LULLA 4 BENCH, MUMBAI, IN ASSESSEES OWN CASE FOR OTHER YEA RS, HAS CONSISTENTLY APPROVED THE PLEA OF THE ASSESSEE IN THE LIGHT OF T HE DECISION OF THE HON'BLE BOMBAY HIGH COURT (SUPRA) BY HOLDING THAT THE AMEND MENT IS PROSPECTIVE IN OPERATION AND FOR THE PROJECTS WHICH HAVE COMMENCED PRIOR TO THE SAID DATE THE ASSESSEE IS ENTITLED TO CLAIM THE BENEFIT UNDER SECTION 80IB(10) OF THE ACT: - 1. ITA NO. 4207/MUM/2009 & CO NO. 97/MUM/2010 DATED 30 .05.2011. 2. ITA NO. 5906/MUM/201O & CO NO. 116/MUM/2011 DATED 3 1.10. 2011. 3. ITA NO. 6996/MUM/2012 DATED 19.02.2014. 7. THE LEARNED D.R., ON THE OTHER HAND, RELIED UPON T HE ORDER PASSED BY THE ASSESSING OFFICER. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. CONSISTENT WITH THE VIEW BY THE ITAT IN THE AFORECITED CASES WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE C IT(A). THEREFORE, WE DISMISS THE APPEAL FILED BY THE REVENUE AND ALLOW T HE CROSS OBJECTION FILED BY THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JUNE, 2014. SD/- SD/- (N.K. BILLAIYA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 9 TH JUNE, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) II, THANE 4. THE CIT III, THANE 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.