M/s. Akshay Builders & Associates, Pune V. Income-tax Officer,

CO 45/PUN/2016

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2842 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 22-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Keywords: Condonation of delay
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , ! , $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURV EDI, AM . / ITA NO.2035/PUN/2014 & & / ASSESSMENT YEAR: 2010-11 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE . APPELLANT VS. M/S. AKSHAY BUILDERS & ASSOCIATES, S.NO.15/2, AKSHAY PARK, AUNCH, CHINCHWAD ROAD, THERGAON, CHINCHWAD, PUNE 411033 . RESPONDENT PAN: AAKFA9511G '($ ./ CO NO.45/PUN/2016 & & / ASSESSMENT YEAR : 2010-11 (OUT OF ITA NO.2035/PUN/2014) M/S. AKSHAY BUILDERS & ASSOCIATES, S.NO.15/2, AKSHAY PARK, AUNCH, CHINCHWAD ROAD, THERGAON, CHINCHWAD, PUNE 411033 / CROSS OBJECTOR PAN: AAKFA9511G VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE . RESPONDENT . / ITA NO.2055/PUN/2014 & & / ASSESSMENT YEAR: 2008-09 THE INCOME TAX OFFICER, WARD 9(1), PUNE . APPELLANT ITA NOS.2035 & 2055/PUN/2014 CO NOS.44 & 45/PUN/2016 M/S. AKSHAY BUILDERS & ASSOCIATES 2 VS. M/S. AKSHAY BUILDERS & ASSOCIATES, S.NO.15/2, AKSHAY PARK, AUNCH, CHINCHWAD ROAD, THERGAON, CHINCHWAD, PUNE 411033 . RESPONDENT PAN: AAKFA9511G '($ ./ CO NO.44/PUN/2016 & & / ASSESSMENT YEAR : 2008-09 (OUT OF ITA NO.2055/PUN/2014) M/S. AKSHAY BUILDERS & ASSOCIATES, S.NO.15/2, AKSHAY PARK, AUNCH, CHINCHWAD ROAD, THERGAON, CHINCHWAD, PUNE 411033 / CROSS OBJECTOR PAN: AAKFA9511G VS. THE INCOME TAX OFFICER, WARD 9(1), PUNE . RESPONDENT ASSESSEE BY : SHRI SUHAS P. BORA REVENUE BY : SHRI ANIL CHAWARE DATE OF HEARING : 01.02.2017 / DATE OF PRONOUNCEMENT: 15.02.2017 / ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEALS FILED BY THE REVENUE ARE AGAINST S EPARATE ORDERS OF CIT(A)-V, PUNE, BOTH DATED 18.08.2014 RELATING TO A SSESSMENT YEAR 2010-11 AND 2008-09 AGAINST RESPECTIVE ORDERS PASSED UNDER SECTION 143(3) AND 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT T HE ACT). THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS AGAINST THE APPEALS OF REVENUE. ITA NOS.2035 & 2055/PUN/2014 CO NOS.44 & 45/PUN/2016 M/S. AKSHAY BUILDERS & ASSOCIATES 3 2. BOTH THE APPEALS FILED BY THE REVENUE AND THE CR OSS OBJECTIONS FILED BY THE ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISP OSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. FIRST, WE SHALL TAKE UP THE APPEALS FILED BY THE REVENUE. HOWEVER, IN ORDER TO ADJUDICATE THE ISSUE, WE MAKE REFERENCE TO THE FACTS IN ITA NO.2035/PUN/2014. 4. THE REVENUE IN ITA NO.2035/PUN/2014 HAS RAISED T HE FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN NOT REJECTING THE ASSESSEE' S CLAIM OF DEDUCTION U/S 80IB(10) OF THE IT ACT, 1961, WHEN THE CIT(A) HIMSE LF HAS AGREED THAT THE BUILT UP AREA OF 2 DWELLING UNITS I . E. RH/D-6 AND RH-3 IN THE PROJECT EXCEEDED THE RESTRICTION RESULTING INTO CLEAR VIOLA TION OF CLAUSE (C) OF SUB- SECTION (10) OF SECTION 80IB RW CLAUSE (A) OF SUB-S ECTION (14) OF SECTION 80IB OF THE IT ACT, 1961 ? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESS EE WAS ENTITLED TO DEDUCTION U/S 80IB(10) OF THE I . T . ACT, 1961 ON PRO-RATA BASIS IN RESPECT OF ELIGIBLE UNITS, WHEN THERE IS NO SUCH PR OVISION IN THE ACT? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN GRANTING DEDUCTION U/S 80IB(10) ON PROPORTIONATE BASIS TO INDIVIDUAL DWELLING UNITS WH EREAS AS PER SECTION 80IB(10), THE DEDUCTION IS ALLOWABLE TO THE PROJECT AS A WHOLE ON THE FULFILMENT OF PRESCRIBED CONDITIONS BY THE ENTIRE P ROJECT . 5. THE ASSESSEE IN CO NO.44PN/2016 HAS RAISED THE F OLLOWING GROUNDS OF OBJECTIONS:- 1] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE BUI LT UP AREA OF ROW HOUSE NO.D6 AND 3 WAS MORE THAN 1500 SQ. FT. AND HENCE, T HE ENTIRE PROFITS OF THE HOUSING PROJECT CONSTRUCTED BY THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10). 2] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAD COMMENCED THE HOUSING PROJECT NAMED AKSHAY PARK P RIOR TO 01.04.2005 AND AS PER THE D.C. RULES OF THE LOCAL A UTHORITY, THE BUILT UP AREA OF ALL THE UNITS IN THE HOUSING PROJECT WAS LE SS THAN 1500 SQ. FT. AND ACCORDINGLY, THE ASSESSEE WAS ENTITLED TO CLAIM DED UCTION U/S. 80IB(10) IN RESPECT OF THE ENTIRE PROFITS OF THE SAID PROJECT. ITA NOS.2035 & 2055/PUN/2014 CO NOS.44 & 45/PUN/2016 M/S. AKSHAY BUILDERS & ASSOCIATES 4 6. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF CONSTRUCTION, LAND DEVELOPMENT, ETC. AN D ALSO CONSTRUCTING RESIDENTIAL HOUSING PROJECTS. DURING THE YEAR UNDE R CONSIDERATION, THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON THE PROFITS DERIVED FROM THE HOUSING PROJECT AKSHAY PARKAT RS.44,92,8 66/-. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS AS TO FULFILLMENT OF C ONDITIONS LAID DOWN IN SECTION 80IB(10) OF THE ACT FOR ELIGIBILITY OF THE SAID CLA IM. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD UNDERTAKEN A PROJECT WHICH WA S CLAIMED AS 80IB(10) AND ANOTHER PROJECT AS NON-80IB(10). HE ALSO NOTED THA T DURING THE COURSE OF ASSESSMENT PROCEEDINGS RELATING TO ASSESSMENT YEAR 2009-10, THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT WAS DENIE D TO THE ASSESSEE BECAUSE OF NON-FULFILLMENT OF CONDITIONS WITH RESPECT TO BU ILT UP AREA. DURING THE EARLIER ASSESSMENT PROCEEDINGS, REFERENCE WAS MADE TO THE G OVERNMENT VALUATION OFFICER, SOLAPUR TO ASCERTAIN THE BUILT UP AREA AND HE REPORTED THAT THE BUILT UP AREA INCLUDING PROJECTIONS AND AREA PERTAINING TO P ROJECTED TERRACE IN RESPECT OF TWO UNITS I.E. R.H./D6 AND R.H-3 WAS IN EXCESS OF P ERMISSIBLE LIMIT OF 1500 SQ.FT. THE ASSESSING OFFICER NOTED THAT THE POSITION WITH RESPECT TO BUILT UP AREA WAS STILL PREVAILED DURING THE YEAR UNDER CONSIDERATION AND THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID DEDUCTION CLAIMED UND ER SECTION 80IB(10) OF THE ACT SHOULD NOT BE DISALLOWED. IN RESPONSE, THE ASS ESSEE STRESSED THAT ALL THE UNITS OF HOUSING PROJECT WERE LESS THAN 1500 SQ.FT. AND WERE COMPLETED WITHIN STIPULATED PERIOD. THE ASSESSING OFFICER REJECTING THE CLAIM OF ASSESSEE AND IN VIEW OF EXCESS AREA IN RESPECT OF TWO UNITS, DENIED THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 7. THE CIT(A) ALLOWED THE CLAIM OF ASSESSEE IN VIEW OF THE ORDER RELATING TO ASSESSMENT YEAR 2009-10. IN THE ORDER RELATING TO ASSESSMENT YEAR 2009-10, THE CIT(A) HAD HELD THAT THE AREA OF UNITS WITH TER RACE EXCEEDED THE PERMISSIBLE ITA NOS.2035 & 2055/PUN/2014 CO NOS.44 & 45/PUN/2016 M/S. AKSHAY BUILDERS & ASSOCIATES 5 LIMITS AND PROJECT ITSELF WAS NOT ELIGIBLE FOR DEDU CTION UNDER SECTION 80IB(10) OF THE ACT. HOWEVER, PRORATA DEDUCTION FOR BALANCE FL ATS EXCLUDING TWO UNITS I.E. R.H./D6 AND R.H-3 WAS ALLOWED TO THE ASSESSEE. 8. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CI T(A) IN ALLOWING PRORATA DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, WHERE THE BUILT UP AREA OF TWO DWELLING UNITS EXCEEDED THE LIMITS PRESCRIBED. 9. THE ASSESSEE HAS FILED CROSS OBJECTIONS IN NOT A LLOWING DEDUCTION ON THE ROW HOUSES D6 AND 3 HOLDING THAT THE BUILT UP AREA WAS MORE THAN 1500 SQ.FT. INCLUDING PROJECTIONS. 10. THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE FILED AFTER DELAY OF 37 DAYS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR TH E ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY OF 37 DAYS ALO NG WITH AN AFFDIAVIT, WHEREIN HE HAS POINTED OUT THAT DUE TO ILLNESS AND HOSPITAL IZATION OF HIS BROTHER, THE DOCUMENT COULD NOT BE HANDED OVER TO THE COUNSEL. WE FIND MERIT IN THE SAID PLEA OF THE ASSESSEE AND ACCORDINGLY, CONDONE THE D ELAY IN FILING THE CROSS OBJECTIONS LATE BY PERIOD OF 37 DAYS RELATING TO AS SESSMENT YEARS 2010-11 AND 2008-09. 11. IT MAY BE CLARIFIED HEREIN THAT PURSUANT TO DIS ALLOWANCE MADE IN ASSESSMENT YEAR 2009-10, THE ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2008-09 WERE REOPENED UNDER SECTION 147 OF THE ACT BY THE ASSESSING OFFICER AND THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT WAS DENIED TO THE ASSESSEE. ITA NOS.2035 & 2055/PUN/2014 CO NOS.44 & 45/PUN/2016 M/S. AKSHAY BUILDERS & ASSOCIATES 6 12. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE PRORATA DEDUCTION ALLOWABLE TO THE ASSESSEE IN CASE TWO OF THE UNITS ARE HELD TO BE EXCEEDING THE PERMISSIBLE COVERED AREA. THE CROSS OBJECTIONS RAI SED BY THE ASSESSEE ARE AGAINST THE ORDERS OF AUTHORITIES BELOW IN HOLDING THAT FOR PROJECTS WHICH WERE APPROVED PRIOR TO 01.04.2005, THE PROJECTIONS ARE T O BE CONSIDERED AS PART OF BUILT UP AREA. IN THIS REGARD, THE LEARNED AUTHORI ZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE TRIBUNAL IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2009-10 IN ITA NO.563/PN/2014 AND IN CO NO.22/ PN/2015, VIDE ORDER DATED 03.02.2016, HAD HELD THE ASSESSEE ELIGIBLE FO R PRO-RATA DEDUCTION. FURTHER THE TRIBUNAL HAS GIVEN FINDING THAT PRIOR TO INSERT ION OF DEFINITION OF BUILT UP AREA BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 01.04.2005, PROJECTIONS, BALCONIES AND OPEN TERRACE COULD NOT BE CONSIDERED AS PART OF BUI LT UP AREA OF RESIDENTIAL UNITS. ADMITTEDLY, THE PROJECT OF ASSESSEE WAS SANCTIONED PRIOR TO 01.04.2005 AND THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS STATED DURING THE COURSE OF HEARING THAT THE PROJECT WAS COMPLETED WI THIN STIPULATED PERIOD I.E. BY 31.03.2008, HENCE, THE ASSESSEE WAS ENTITLED TO CLA IM THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 13. THE TRIBUNAL WHILE DISMISSING THE APPEAL OF REV ENUE IN ASSESSMENT YEAR 2009-10 HAD IN TURN, RELIED ON THE RATIO LAID DOWN BY THE HONBLE MADRAS HIGH COURT IN CIT VS. ARUN EXCELLO FOUNDATIONS (P.) LTD. REPORTED IN 86 DTR (MAD) 99 AND THE PUNE BENCH OF TRIBUNAL IN M/S. ROHAN HOMES VS. ACIT IN ITA NO.423/PN/2011 RELATING TO ASSESSMENT YEAR 2007-08, ORDER DATED 31.01.2013 TO HOLD THAT ANY PROJECT WHERE SOME OF RESIDENTIAL UNITS EXCEEDED THE BUILT UP AREA THEN ALSO PROPORTIONATE DEDUCTION IS TO BE ALL OWED TO THE ELIGIBLE UNITS. IN VIEW THEREOF, WE FIND NO MERIT IN THE GROUNDS OF AP PEAL RAISED BY THE REVENUE AGAINST THE ORDER OF CIT(A) IN ALLOWING PROPORTIONA TE DEDUCTION. HOWEVER, SINCE THE ASSESSEE IS HELD TO BE ENTITLED TO CLAIM THE DE DUCTION ON THE TWO UNITS AS ITA NOS.2035 & 2055/PUN/2014 CO NOS.44 & 45/PUN/2016 M/S. AKSHAY BUILDERS & ASSOCIATES 7 PROJECTIONS AND OPEN TERRACE ARE NOT TO BE INCLUDED IN BUILT UP AREA FOR SUCH PROJECTS WHICH WERE SANCTIONED BEFORE 01.04.2005, T HE ASSESSEE IS HELD TO BE ENTITLED TO CLAIM THE DEDUCTION ON SUCH UNITS ALSO AND CONSEQUENTLY, WHERE ALL THE UNITS OF PROJECT ARE ELIGIBLE UNITS, THE ASSESS EE IS ENTITLED TO THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT IN RESPEC T OF WHOLE PROJECT. ACCORDINGLY, WE HOLD SO. THE GROUNDS OF APPEAL RAI SED BY THE REVENUE ARE THUS, DISMISSED AND THE CROSS OBJECTIONS FILED BY T HE ASSESSEE ARE ALLOWED. 14. THE APPEAL RELATING TO ASSESSMENT YEAR 2008-09 IS PURSUANT TO RE- ASSESSMENT PROCEEDINGS INITIATED AGAINST THE ASSESS EE PURSUANT TO THE ORDER PASSED IN ASSESSMENT YEAR 2009-10 AND THE ISSUE RAI SED IN THE SAID APPEAL BY THE REVENUE IS IDENTICAL TO THE ISSUE RAISED IN ASS ESSMENT YEAR 2010-11 AND FOLLOWING THE SAME PARITY OF REASONING, WE DISMISS THE APPEAL FILED BY THE REVENUE. HOWEVER, THE GROUNDS OF OBJECTIONS RAISED IN CROSS OBJECTIONS BY THE ASSESSEE IN ASSESSMENT YEAR 2008-09 ARE IDENTICAL T O THE GROUNDS OF OBJECTIONS IN ASSESSMENT YEAR 2010-11 AND FOLLOWING THE SAME P ARITY OF REASONING, WE ALLOW THE CLAIM OF ASSESSEE. 15. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISMISSED AND BOTH THE CROSS OBJECTIONS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 15 TH DAY OF FEBRUARY, 2017. SD/- SD/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 15 TH FEBRUARY, 2017. GCVSR ITA NOS.2035 & 2055/PUN/2014 CO NOS.44 & 45/PUN/2016 M/S. AKSHAY BUILDERS & ASSOCIATES 8 7 '89 :9 / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; ' () THE CIT(A)-V, PUNE; ' / THE CIT-V, PUNE; * --., ., / DR A, ITAT, PUNE; 3 / GUARD FILE. / BY ORDER * - // TRUE COPY // / ASSISTANT REGISTRAR, . , / ITAT, PUNE