Ishwar Construction Pvt. Ltd., Pune V. Income-tax Officer,

CO 46/PUN/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0595 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 25-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: R R VORA
• Keywords: Capital asset; Business income; Principle of natural justice; Additional evidence; Competent authority; Capital receipt
• Section: 143(3); 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE M S SUSHMA CHOWLA , JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1501 /PN/201 2 ASSESSMENT YEAR: 200 7 - 08 THE INCOME TAX OFFICER , WARD 1( 4 ), PUNE . APPELLANT VS. ISHWA R CONSTRUCTIONS PVT. LTD., PARMAR TRADE CENTRE, C' WING, 12, SADHU VASWANI CHOWK, CANNOUGHT ROAD, CANNOUGHT ROAD, PUNE 411001 . RESPONDENT PAN: AAAC I4136J CO NO. 46 /PN/201 3 ASSESSMENT YEAR: 200 7 - 08 ISHWAR CONSTRUCTIONS PVT. LTD., PARMAR TRADE CENTRE, C' WING, 12, SADHU VASWANI CHOWK, CANNOUGHT ROAD, CANNOUGHT ROAD, PUNE 411001 . CROSS OBJECTOR PAN: AAACI4136J VS. THE INCOME TAX OFFICER, WARD 1(4), PUNE . RESPONDENT ASSESSEE BY : SHRI R.R. VORA REVENUE BY : SHRI HARESHWAR SHARMA , CIT DATE OF HE ARING : 2 8 - 0 4 - 201 5 DATE OF PRONOUNCEMENT : 29 - 0 5 - 201 5 ORDER PER SUSHMA CHOWLA, J M : THE CAPTIONED APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) - I , PUNE , DATED 2 8 . 1 2 .201 1 RELATING TO ASSESSMENT YEAR 20 0 7 - 08 PASSED U NDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION AGAINST THE APPEAL FILED BY THE REVENUE. ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 2 2. BOTH , THE APPEAL OF REVENUE AND CROSS OBJECTION RELATING TO THE SAME ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOS ED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3 . THE REVENUE IN ITA NO. 1501 /PN/201 2 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEAL) ERRED IN RELYIN G UPON ONLY ONE ROUTINE OBSERVATION MADE BY THE A.O., WHICH WILL HAVE BEEN ONLY AN INADVERTENT MISREPRESENTATION OF FACTS. THE SAME HAS BEEN INTERPRETED INADVERTENT AS CHANGE IN ACCOUNTING POLICY BY THE APPELLATE AUTHORITY WRITTEN BY THE A.O. AND INFERRIN G THAT THE ACCOUNTING POLICY WAS CHANGED TO MAKE ADDITION IN THE IMPUGNED ASSESSMENT ORDER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME - TAX(APPEAL) ERRED IN NOT INTERPRETING THE ASSESSMENT ORDER IN TOTALITY, WHEREIN T HERE WAS NO ATTEMPT TO CHANGE THE ACCOUNTING ENTRIES BUT ONLY TO TREAT REVENUE RECEIPTS AS INCOME ACCRUED DURING THE YEAR, WHICH WERE TREATED AS CAPITAL RECEIPTS BY THE ASSESSEE BY WAY OF WIP. FURTHER, THE A.O. WAS NOT GIVEN ANY OPPORTUNITY BY WAY OF REMA ND PROCEEDINGS; HENCE THE PRINCIPLE OF NATURAL JUSTICE STANDS VIOLATED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME - TAX(APPEAL) ERRED IN NOT RECOGNIZING THE FACT THAT THE ASSESSEE HAD INDULGED IN TRADING OF TDR RECEIV ED BY IT AS ONLY A PARTY OF THE SECOND PART AS SPECIFIED IN THE DEVELOPMENT AGREEMENT. SECOND PART AS SPECIFIED IN THE DEVELOPMENT AGREEMENT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME - TAX(APPEAL) ERRED IN HOLDING THAT BRINGING THE TDR RECEIPTS OUT OF THE BALANCE SHEET T O THE P & L ACCOUNT BY THE A.O. WAS ONLY A PRESENTATION OF THE TRUE PICTURE OF THE ASSESSEES AFFAIRS AND NOT CHANGING THE ACCOUNTING POLICY OF THE ASSESSEE AS CONTENDED BY THE ASSESSEE AND UPHELD BY THE COMMISSIONER OF INCOME - TAX(APPEALS). 5. ON THE FACT S AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME - TAX(APPEAL) ERRED IN OVERLOOKING THE FACTUAL FINDING OF THE A.O. WHEREBY THE TDR SALES HAVE BEEN DELINKED FROM THE DEVELOPMENT PROJECT AS APPROVED BY THE SRA AS THE APPROVAL WAS ACCORDED T O SHRI V L JADHAVRAO, PARTY OF THE SECOND PART. 6. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF THE HEARING, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 7. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUND OF APPEAL DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE HONBLE TRIBUNAL. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS O F REAL ESTATE DEVELOPMENT, CONSTRUCTION MANAGEMENT , CONTRACTS AND OTHER RELATED ACTIVITIES. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FILED A RETURN OF INCOME DECLARING NIL INCOME WHICH WAS PROCESSED UNDER SECTION ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 3 143(1) OF THE ACT. DURING THE Y EAR UNDER CONSIDERATION, THE ASSESSEE HAD TAKEN - UP SLUM REHABILITATION PROJECT (SRP) AT NANA PETH. THE ASSESSEE, FOR THE YEAR HAD BOOKED THE EXPENSES BUT AT THE CLOSE OF THE YEAR , SUCH EXPENSES WE RE CAPITALIZED AND NO SALE WAS SHOWN BY THE ASSESSEE. ON T HE PERUSAL OF THE BALANCE SHEET, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD SHOWN BOOKING ADVANCES/SUNDRY CREDITORS OF RS.7.56 CRORES AS TDR SALES/ADVANCES. IN REPLY, THE ASSESSEE EXPLAINED THAT IT HAD RECEIVED ADVANCE TOWARDS TDR OF RS.7.56 CRORES FRO M DIFFERENT PARTIES, TOTALING NUMBER 6. THE ASSESSEE FURTHER CLAIMED THAT THE TOTAL TDR GENERATED AT STAGE 1 WAS 7780.47 SQ.MTRS. WHICH, IN TURN, WAS SOLD TO THE SAID PARTIES AS ENUMERATED AT PAGE 3 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER NOTED TH AT THE ASSESSEE HAD ALSO RECEIVED SUM OF RS.1.32 CRORES AS ADVANCE AGAINST TDR , A S PER SCHEDULE 9 OF THE BALANCE SHEET . T HE ASSESSING OFFICER WAS OF THE VIEW THAT THE SALE OF TDR WAS NOT PROFIT ELIGIBLE FOR DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT. T HE ASSESSING OFFICER SHOW - CAUSED THE ASSESSEE THAT WHERE THE COMPETENT AUTHORITY UNDER THE SLUM AREA CAUSED THE ASSESSEE THAT WHERE THE COMPETENT AUTHORITY UNDER THE SLUM AREA REHABILITATION ACT HAD GRANTED PERMISSION IN THE NAME OF THE PARTY OF THE THIRD PART AS DEVELOPER AND THE POWER OF ATTORNEY OF LAND OWNERS FOR REDEVELOPMEN T OF THE SAID PROPERTIES AND WHERE THE PARTY OF THE THIRD P ART HAD GOT THE BUILDING LAYOUT OF THE SAID PROPERTIES APPROVED AND SANCTIONED FROM THE PMC , WHY SAME SHOULD NOT BE ADDED IN THE HANDS OF ASSESSEE . THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHETHER THE ORIGINAL TDR WAS GRANTED IN FAVOUR OF THE ORIGINAL OWNERS AND WHE THER THE SAME HAS BEEN TRANSFERRED AS A RESULT OF AN AGREEMENT/POWER OF ATTORNEY ISSUED BY THE ORIGINAL OWNERS IN FAVOUR OF THE ASSESSEE , THEN UNDER SUCH CIRCUMSTANCES , WHETHER THE ASSESS EE COULD CLAIM DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT AND ALSO WHETHER SALE OF TDR COULD BE CLAIMED AS PROFIT DERIVED FROM SUCH HOUSING PROJECT. ANOTHER ISSUE RAISED BY THE ASSESSING OFFICER IN THE SHOW - CAUSE NOTICE WAS THAT AS THE TOTAL ACTIVITY OF CONSTRUCTION WAS ONLY WORK - IN - PROGRESS AND NO DEDUCTION UNDER SECTION 80 - IB(10) OF THE A CT WAS CLAIMED, WHY AGAINST SALE OF TDR , THE DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT SHOULD BE ALLOWED. THE REPLY OF THE ASSESSEE IS INCORPORATED AT ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 4 PAGES 6 TO 1 6 OF THE ASSESSMENT ORDER , UNDER WHICH IT WAS EXPLAINED BY THE ASSESSEE THAT THE TDR GENERATED OUT OF THE SRA SCHEME WAS IN THE NAME OF THE ASSESSEE ONLY AND SINCE IT HAD THE LEGAL TITLE TO EXECUTE THE SAID SRA SCHEME/AVAIL THE BENEFIT OF TDR AND OTHER BEN EFITS , IT WAS ENTITLED TO CLAIM THE DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT. THE ASSESSING OFFICER VIDE PARA 4.1 NOTED THAT THE ASSESSEE HAD RECEIVED TOTAL AMOUNT OF RS.11,68,48,820/ - (RS.10,36,48,820/ - PLUS RS.1,32,00,000/ - ) AGAINST SALE OF TDR. AS PER THE ASSESSEE, THE SAID AMOUNT REPRESENT S THE SALE PROCEEDS OF TDR GENERATED FROM NANA PETH PROJECT. THE SAID PROJECT WAS FOR THE REHABILITATION OF THE SLUM , UNDER WHICH THE ASSESSEE HAD TO CONSTRUCT CERTAIN BUILDINGS, WHERE INDIVIDUAL UNITS (TENEMENT S) COULD BE GIVEN TO THE SLUM DWELLERS AS PART OF THEIR REHABILITATION AND IN LIEU THEREOF THE ASSESSEE WAS ENTITLED TO GET TDR GENERATED ON SUCH LAND, WHICH IT COULD S ELL IN THE OPEN MARKET. IT WA S FURTHER EXPLAINED BY THE ASSESSEE THAT IT HAD BUILT AND HAND ED - OVER 624 UNITS OF 300 SQ.FT. EACH I.E. 608 UNITS TO THE EXISTING SLUM DWELLERS AND 16 TO LOCAL AUTHORITY I.E. PMC, AS AGAINST THE TOTAL AREA EXISTING SLUM DWELLERS AND 16 TO LOCAL AUTHORITY I.E. PMC, AS AGAINST THE TOTAL AREA OF THE PROJECT OF 14,889 SQ.MTRS. I.E. 1,60,265 SQ.FT. . THE PMC, DURING THE YEAR UNDER CONSIDERATION, RELEA SED TDR TOWARDS NANA PETH PROJECT FOR TOTAL AREA OF 7780.47 SQ.MTRS., WHICH, IN TURN, THE ASSESSEE SOLD THE SAME FOR CONSIDERATION OF RS.10.36 CRORES. FURTHER, THE ASSESSEE ALSO PASSED ON 935 SQ.MTRS. OF TDR TO THE OWNER OF THE LAND, SHRI V.L. JADHAVRAO A S PER THE TERMS AND CONDITIONS OF THE AGREEMENT WITH THE OWNERS. THE ASSESSING OFFICER NOTED THAT THE PLAN FOR CONSTRUCTION HAD BEEN SANCTIONED FOR THE WHOLE PLOT ON 21.02.1998, AS MENTIONED IN THE AGREEMENT WITH THE OWNERS AND ALSO IN THE COPY OF THE SAN CTIONED PLAN, WHICH HAD BEEN SUBSEQUENTLY REVISED. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE FIRST PLAN HAS BEEN SANCTIONED BEFORE 01.10.1998, IN VIEW OF SUB - CLAUSE (1) OF EXPLANATION TO CLAUSE (A) OF SECTION 80 - IB(10) OF THE ACT , THE SAID DEDU CTION WAS NOT AVAILABLE TO THE ASSESSEE . 5 . ANOTHER ISSUE RAISED BY THE ASSESSING OFFICER WAS THAT OUT OF THE TOTAL LAND OF 14 , 889 SQ.MTRS. THE ASSESSEE STARTED CONSTRUCTION ON PART OF THE LAND ONLY AND ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 5 ON THE BALANCE LAND NO CONSTRUCTION HAS STARTED TI LL NOW ; THOUGH THE SANCTIONED PLAN REVEALED THAT THE ASSESSEE HAD TO CONSTRUCT OTHER BUILDING ALSO. THE ASSESSEE WAS CLAIMING THAT ONLY PART OF THE PROJECT RELATED TO SRA AS A SEPARATE PROJECT. IT WAS FURTHER CLAIMED THAT THIS PROJECT WAS COMPLETED AND A CCORDINGLY QUALIFIED FOR THE DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE SANCTIONED LAYOUT WAS ONE, THE PROJECT REMAINED ONE FOR THE ENTIRE SANCTION ED LAYOUT ON THE PLOT OF LAND AND THE SAME COULD NOT BE A SEPARATE AND DISTINCT PROJECT. THE CLAIM OF THE ASSESSEE THAT ONLY SRA CONSTRUCTION WAS ELIGIBLE PROJECT UNDER SECTION 80 - IB(10) OF THE ACT , WAS FOUND TO BE IN CORRECT. 6 . ANOTHER ASPECT OF THE ISSUE NOTED BY THE ASSESSING OFFICER WAS THAT THE ORIGI NAL OWNER SHRI V.L. JADHAVRAO AND NOT THE ASSESSEE COMPANY HAD SUBMITTED THE ORIGINAL PLAN TO THE LOCAL AUTHORITY ON 16.08.1996 WHICH WAS SANCTIONED BY PMC ON 21.07.2003. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE LAST DATE FOR COMPLETION OF THE PROJ ECT APPROVED BEFORE 01.04.2004 WAS 31.03.2008 AND WHERE THE ASSESSEE HAD CLAIMED TO HAVE COMPLETED ONLY THE REHAB BUILDINGS, THE PROJECT AS A WHOLE COULD NOT BE SAID TO BE COMPLETE AND HENCE THE DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT ON THIS GROUND W AS ALSO REJECTED. FURTHER SRA PROJECT UNDERTAKEN BY THE ASSESSEE COMPANY WAS NOT NOTIFIED BY THE BOARD IN VIEW OF THE PROVISIONS OF CLAUSE (A) AND (B) OF SECTION 80 - IB(10) OF THE ACT AND HENCE NOT ELIGIBLE . FURTHER, THE ASSESSING OFFICER OBSERVED THAT AS AGAINST THE TOTAL TDR OF 33 , 926.39 SQ.MTRS., THE ASSESSEE HAD RECEIVED TDR OF 7780.48 SQ.MTRS. WHICH WAS LESS THAN 25% OF THE TOTAL TDR TO BE GENERATED WHICH, IN TURN, IMPLIES THAT TILL THE END OF THE RELEVANT FINANCIAL YEAR I.E. 31.03.2007 AT MOST 25% OF THE TOTAL PROJECT WAS COMPLETE. FURT HER, THE ASSESSEE HAD SUBMITTED COMPLETION CERTIFICATES IN RESPECT OF 384 RESIDENTIAL UNITS AND 12 COMMERCIAL UNITS AND WHEREAS, AS PER THE SRA PROJECT, THE ASSESSEE COMPANY WAS SUPPOSED TO HANDOVER 624 TENEMENTS. IN VIEW THEREOF, WHERE THE SRA SCHEME WAS NOT ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 6 COMPLETED BEFORE 31.03.2008, THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT. 7 . ANOTHER ASPECT NOTED BY THE ASSESSING OFFICER IN RESPECT OF TDR WAS VIDE PARA 5 .0 TO 5 .5 , WHICH READ AS UNDER : - 5.0 THE SECOND AND MAJOR ISSUE IS RELATING TO SALE OF TDR BY THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATION. AS MENTIONED EARLIER THE ASSESSEE COMPANY HAS SOLD TDR OF 7780 SQ.MTRS. DURING THE YEAR. 5.1 AS PER THE SRA SCHEME WHAT THE ASSESSEE COMPANY WAS SUPPOSED TO RECEIVE FROM THE WHOLE PROJECT WAS THE TDR GENERATION FOR REHABILITATING THE SLUM DWELLERS. THE ASSESSEE IN HIS SUBMISSION DATED 28.12.2009 HAS ALSO STATED THAT THE ONLY MANNER IN WHICH PROFIT CAN BE EARNED FROM SRA PROJECT IS TO SALE THE TDR AS OTHERWISE THERE IS NO OTHER MANNER TO EARN THE PROFIT . HOWEVER, FROM THE SANCTIONED PLAN IT APPEARS THAT THE ASSESSEE COMPANY IS TO GET THE ENTIRE TDR (WHICH IT HAS AND WILL SELL IN THE OPEN MARKET) AS WELL AS THE S ALE PROCEEDS FROM THE COMMERCIAL SALE OF BUILDINGS WHICH THE ASSESSEE WILL CONSTRUCT IN FUTURE. THE AGREEMENT BETWEEN THE LAND OWNERS AND THE ASSESSEE COMPANY ALSO MENTIONS THIS FACT. 5.2 THE ASSESSEE COMPANY VIDE SUB M ISSION DATED 21/12 / 09 (POINT #6) HAS ALSO STATED THAT THE ENTIRE SCHEME OF SR A IS THAT THE HUTMENT DWELLERS AR E ALLOTTED TENEMENTS FREE OF COSTS AND THE DEVELOPER IS COMPENSATED BY ALLOTTING TDR WHICH CAN BE SOLD IN THE OPEN MARKET. UNLESS THE TD R IS ALLOTTED, NO ONE TDR WHICH CAN BE SOLD IN THE OPEN MARKET. UNLESS THE TD R IS ALLOTTED, NO ONE WOULD COME FORWARD FOR DEVELOPMENT OF T HE PROPERTY SINCE NO AMOUNT CAN BE CHARGED FROM THE HUT ME NT DWELLERS. THE TENEMENTS ARE GIVEN FREE OF COSTS AND THE ENTIRE DEVELOPMENT COSTS INCLUDING THE COST OF CONSTRUCTION OF THE TENEMENTS IS RECOUPED BY SALE OF TDR ON THE BASIS OF THE STAGES OF COMPLETION OF THE PROJECT IN ORDER TO ENABLE THE DEVELOPER FOR CARRYING OUT THE CONSTRUCTION OF THE BALANCE PORTION OF THE PROPERTY . 5.3 FROM THE ABOVE SUBMISSION IT APPEARS THAT THE ONLY COMPENSATION RECEIVED BY THE ASSESSEE IN THIS PROJECT IS THE TDR AND NOTHING ELSE. HOWEVER FROM THE COPY OF SANCTIONED PLAN IT IS SEEN THAT THE ASSESSEE, IN ADDITION TO THE PROCEEDS OF TDR SALE, WILL ALSO BE RECEIVING PROCEEDS FROM CO M MERCIAL SALE OF PROPERTY BEING CONSTRUCTED ON THE PLOT OF LAND APPROVED UND ER THE SRA SCHEME. THIS CLEARLY SHOWS THAT THE TOR SALE IS NOT THE ONLY COMPENSATION THAT THE ASSESSEE WILL RECEIVE. 5.4 FURTHER EVEN IF THE ASS E SSEE S CONTENTION IS ADMITTED BUT NOT ACCEPTED THAT THE TD R GENERATION HAS A DIRECT NEXUS WITH THE REHABILITAT ION OF THE SLUM DWELLERS AND AS SUCH THE PROFITS OF SUCH SALE ARE ELIGIBLE FOR CLAIMING DEDUCTION U / S 801B(10), THE FACT REMAINS THAT AS DISCUSSED SUPRA THE ENTIRE PROJECT ITSELF IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/ S 80IB(10) FOR REASONS DISCUSSED ABOVE. HENCE THE RECEIPTS ON THE SALE OF TDR ARE ALSO NOT ELIGIBLE FOR CLAIMING DEDUCTION U / S 80IB(1 0 ). 5.5 THE TDR RECEIVED BY THE ASSESSEE COMPANY DURING THE YEAR IS 7780 SQ MTRS IN THE FORM OF DEVELOPMENT RIGHT CERTIFICATE. THE DEVELOPMENT RIGHTS ARE TRANSFERABLE IN NATURE IN THE SENSE THAT EITHER THE PERSON RECEIVING THE DRCS CAN USE THESE RIGHTS HIMSELF OR TRANSFER THE SAME TO ANY OTHER PERSON. BASICALLY, TDR SALE IS A ONETIME TRANSACTION. THEREFORE, THE AMOUNT RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION ON SALE OF TDR CANNOT BE TREATED AS ADVANCES RECEIVED AGAINST SALE OF TDR. THE ASSESSE COMPANY ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 7 FOLLOWS THE PERCENTAGE COMPLETION METHOD FOR RECOGNITION OF PROFITS. HOWEVER, THE SALE OF TDR IS AN INDEPENDENT ACTIVITY. AS SUCH THE A SSESSEE SHOULD HAVE SHOWN THE RECEIPTS ON ACCOUNT OF SALE OF TDR DURING THE YEAR UNDER CONSIDERATION ONLY INSTEAD OF SHOWING ADVANCES. THEREFORE, THESE RECEIPTS NEEDS TO BE TAXED DURING THE YEAR UNDER CONSIDERATION ONLY. PENALTY PROCEEDINGS U/ S 271(1)(C) A RE BEING SEPARATELY INITIATED FOR FURNISHING INACCURATE PARTICULARS. IT HAS ALREADY BEEN DISCUSSED THAT THE ASSESSEE COMPANY IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S. 801B(10) AGAINST THESE RECEIPTS. AT THE MOST THE ASSESSEE CAN CLAIM VARIOUS EXPENSES INCU RRED IN ORDER TO GET THESE RECEIPTS SUCH AS LAND COST, CONSTRUCTION COST ETC. THE PROFITABILITY OUT OF THESE RECEIPTS IS THEREFORE WORKED OUT AS UNDER: SALES PROCEEDS OF TDR AMOUNT (RS.) I . IN RESPECT OF NANA PETH PROJECT 10,36,48,820/ - II. IN RESP ECT OF OTHERS 1,32,00,000/ - (SHOWN IN SCH.9 OF B/S.) TOTAL 11,68,48,820/ - THE AMOUNT PAID TO SHRI V.L. JADHAVRAO ON ACCOUNT OF SALE OF TDR (AS PER AGREEMENT IN CASH AS WELL AS IN KIND) IS CONSIDERED AS TOTAL COST OF LAND & ACCORDINGLY PROPO RTIONATE LAND COST IS ALLOWED. A. NET SALE PROCEEDS 11,68,48,820/ - B. PROPERTIONATE COST TOTAL COST COST AS PER STAGE B. PROPERTIONATE COST TOTAL COST COST AS PER STAGE A) LAND COST RS. OF COMPLETION RS. I. BLDG. B 1 (102 UNITS) 49,85,072/ - 47,82,670/ - II. BLDG. B 2 (102 UNITS) 49,85,0 72/ - 29,91,043/ - B) CONSTRUCTION & TRANSHIPMENT COST I. BLDG. B 1 (102 UNITS) 21,726,000/ - 20,856,960/ - II. BLDG. B 2 (102 UNITS) 21,726,000/ - 13,035,600/ - TOTAL COST 4,16,69,273/ - C. PROFIT (A - B) 7,51,79,547/ - 8 . ACCORDINGLY, THE ASSESSIN G OFFICER COMPUTED THE PROFIT ON SALE OF TDR IN THE HANDS OF THE ASSESSEE BY ALLOCATING THE AMOUNT PAID TO SHRI V.L. JADHAVRAO ON ACCOUNT OF SALE OF PLOT AS TOTAL COST OF LAND AND PROPORTIONATE LAND COST IS ALLOWED AS A DEDUCTION AND THE PROFIT WAS COMPUTE D AT RS.7,51,79,547/ - . THE ASSESSING OFFICER ADJUSTED THE INCOME OF THE ASSESSEE AGAINST THE BROUGHT FORWARD LOSSES AND THE TOTAL INCOME WAS COMPUTED AT RS.6,02,67,266/ - . ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 8 9 . BEFORE THE CIT(A), THE MAIN CONTENTION OF THE ASSESSEE WAS THAT IT WAS CONSISTEN TLY FOLLOWING PROJECT COMPLETION METHOD AND THE ASSESSING OFFICER HAD ERRED IN STATING THAT THE ASSESSEE WAS FOLLOWING PERCENTAGE COMPLETION METHOD. ANOTHER OBJECTION RAISED BY THE ASSESSEE BEFORE THE CIT(A) WAS THAT THE ASSESSING OFFICER HAD ERRED IN TRE ATING TDR AS SEPARATE, FOR WHICH PROJECT COMPLETION METHOD WAS REGULARLY FOLLOWED. THE CIT(A) VIDE PARA 4.1 AT PAGES 15 16 OF THE APPELLATE ORDER OBSERVED THAT THE ASSESSING OFFICER HAD FAILED TO APPRECIATE THE SUBMISSIONS OF THE ASSESSEE IN RESPECT OF SYSTEM OF ACCOUNTING BEING REGULARLY FOLLOWED FOR REAL ESTATE DEVELOPMENT. THE CIT(A) HELD THAT WHERE THE ASSESSEE WAS FOLLOWING PROJECT COMPLETION METHOD AND THE TDR WAS PART OF THE SAME SRA PROJECT, WHICH WAS UNDER DEVELOPMENT IN THE YEAR, THE FINDING OF THE ASSESSING OFFICER VIDE PARA 5.5 OF THE ASSESSMENT ORDER THAT THE ASSESSEE COMPANY WAS FOLLOWING PERCENTAGE COMPLETION METHOD OR RECOGNITION OF PROFITS WAS FACTUALLY INCORRECT , WHERE THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. THE OR DER OF THE ASSESSING OFFICER TO DELINK THE TDR RECEIPT FROM ACCOUNTING. THE OR DER OF THE ASSESSING OFFICER TO DELINK THE TDR RECEIPT FROM THE SRA PROJECT TO CLAIM THAT THE REVENUE SHOULD BE RECOGNIZED ON ITS SALE AND ITS RECOGNITION FOR THE PURPOSE OF TAXATION SHOULD NOT BE DELAYED ON THE GROUND THAT TDR SALE WAS A ONETIME TRANSACTI ON, WAS CONSIDERED BY THE CIT(A) ALONG WITH THE PLEA OF THE ASSESSEE ON THE SAID ISSUE , WHICH ARE INCORPORATED UNDER PARA 4.2 AT PAGES 17 TO 22 OF THE APPELLATE ORDER. THE CIT(A) VIDE PARA 4.3 HELD AS UNDER : - 4.3. I HAVE CAREFULLY CONSIDERED THE FACTS O F THE CASE AND THE LAW AS ARE APPARENT FROM RECORDS. IT IS AN UNDISPUTED FACT THAT THE APPELLANT WAS ENGAGED IN THE DEVELOPMENT OF SRA PROJECT AT NANA PETH AS PER THE DEVELOPMENT AGREEMENT DATED 09.08.2004. THE APPELLANT IS ALSO RECOGNIZED AS A REGISTERE D DEVELOP ER OF CA TEGORY A BY THE SLUM REHABILITATION AUTHORITY VIDE NO. SRAL 03/06 DATED 25.5.2006 FOR PUNE AND PIMPRI CHINCHWAD AREA. AS PER THE DOCUMENTS PLACED ON RECORD, IT IS APPARENT THAT AREA ADMEASURING 14889 SQ.MTRS OF CTS NO. 1046 TO 1054 OF NANA PETH, PUNE WAS RECOGNIZED BY THE COMPETENT AUTHORITY AS A SLUM AND SHRI V. L. JADHAVRAO, THE ORIGINAL DEVELOPER OBTAINED THE PERMISSION FROM THE COMPETENT AUTHORITY TO UNDERTAKE SLUM REHABILITATION PROJECT AT THE AFORESAID LAND. THE APPELLANT ENTERED INTO THE AGREEMENT WITH THE ORIGINAL DEVELOPER AND THE LAND OWNERS TO DEVELOP THE SAID PROJECT ON THE TERMS AND CONDITIONS MENTIONED IN THE DEVELOPMENT AGREEMENT DATED 9.8.2004, AS PER WHICH THE APPELLANT WAS TO RECEIVE 5,90,000 SQ.FT. OF FSI/ TDR OUT OF TH E TOTAL FSI/ TDR OF ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 9 6,45,249.49 SQ.FT. OUT OF THE AREA ALLOCATED TO THE APPELLANT, 2,500 WAS FURTHER TO BE G IVEN TO ONE OF THE TRUST LAND OWNER AND FSI OF 1,92,500 SQ.FT. WAS TO BE UTILIZED FOR CONSTR UCTING THE FREE TENEMENTS TO BE GIVEN TO THE SLUM DW ELLERS. THE APPELLANT WAS ENTITLED TO CONSTRUCT 1,00,460 SQ.FT. OF BUILDING WHICH CAN BE SOLD IN OPEN MARKET. IN ADDITION TO THIS THE APPELLANT WAS ALSO TO RECEIVE THE BALANCE FSI OF 2,94,040 SQ.TT IN THE FORM OF TDR WHICH CAN BE SOLD IN THE OPEN MARKET. AS PER THE SLUM DEVELOPMENT SCHEME, T D R IS TO BE RELEASED BY THE COMPETENT AUTHORITY ON THE BASIS OF STAGE OF DEVELOPMENT OF THE PROJECT. A PAYMENT OF RS.3.55 CRORES HAS ALSO BEEN MADE BY THE APPELLANT TO LAND OWNERS FOR GETTING THE DEVELOPMENT RIGHTS AS P ER THE AGREEMENT QUOTED ABOVE, IT IS ALSO APPARENT THAT THE APPELLANT WAS TO BEAR ALL THE COST OF DEVELOPMENT, INCLUDING THE COST OF SANCTION OF PLANS PERMISSIONS AND INCIDENTAL COST. AS PER THE SCHEME APPROVED BY THE PMC, 6 BUILDINGS WERE TO BE CONSTRUCTE D FOR HUTMENT DWELLERS HAVING 624 TENEMENTS. THE APPELLANT HAS STARTED THE CONSTRUCTION FOR 4 BUILDIN G S ONLY OUT OF 6 AND AS PER CLAUSE K - 6 OF THE SRA SCHEME, THE APPELLANT RECEIVED 25 % OF THE ELIGIBLE T D R I . E. 7780 SQ.MTRS ON PLINTH AREA CHECKING OF 4 BUI LDINGS. AS PER CLAUSE K - 6, IT HAS BEEN DEMONSTRATED THAT THE COMPETENT AUTHORITY CAN ISSUE, ON PLINTH CHECKING OF THE BUILDINGS, 25% OF THE T D R. THE APPELLANT CLAIMS THAT THE PLINTH CHECKING CERTIFICATE FOR THE 4 BUILDINGS UNDERTAKEN FOR CONSTRUCTION, WAS ISSUED BY THE PMC ON THE BASIS OF WHICH THE T D R OF 7780 SQ.RNTRS. WAS ISSUED, THE APPELLANT FURTHER CLAIMS THAT THE ENTIRE T D R IS THE ONLY REVENUE RECEIVED ON SALE AS THE BUILDIN G S REQUIRED TO BE FIRST CONSTRUCTED WERE FOR FREE HUT M ENTS. AS PER THE AU THORISED REPRESENTATIVE THE ENTIRE SCHEME IS CONCEIVED AND CAN BE OPERATIONALISED ON THE BASIS OF ALLOTMENT OF T D R ONLY, WITHOUT WHICH SUCH SCHEMES CANNOT BE EXECUTED. THEREFORE, IT HAS BEEN CLAIMED THAT NO DEVELOPER WOULD COME FORWARD UNLESS TD R IS AL LOTTED AND ALLOWED TO BE SOLD/ USED. ON THIS BASIS IT HA S BEEN CLAIMED AL LOTTED AND ALLOWED TO BE SOLD/ USED. ON THIS BASIS IT HA S BEEN CLAIMED THAT THE FINDING OF THE ASSESSING OFFICER THAT THE APPELLANT HAS DEALT IN T D R IS INCORRECT. IT HAS ALSO BEEN SHOWN THAT THE TOR HAS BEEN ALLOTTED TO THE APPELLANT FOR THE SRA PROJEC T AND IT HAS NOT BEEN ISSUED TO THE ORIGINAL DEVELOPER AND THEN TRANSFERRED TO THE APPELLANT, AS THE T D R CAN ONLY BE ISSUED AT DIFFERENT STAGES OF DEVELOPMENT IN PROPORTIONATE BASIS TO THE DEVELOPER ENGAGED IN SRA DEVELOPMENT. THEREFORE, IT HAS BEEN CLAIM ED THAT THE T D R RECEIVED AND SOLD IS INEXTRICABLY LINKED TO THE DEVELOPMENT OF THE SRA PROJECT AND THEREFORE, THE SALE PROCEEDS OF THE T D R HAS TO BE TREATED AS DERIVED FROM THE SRA PROJECT. ON CAREFUL CONSIDERATION, THE CLAIM OF THE APPELLANT HAS TO BE TRE ATED AS CORRECT. IN FACT, I DO NOT THINK THAT ANY OTHER INTERPRETATION IS POSSIBLE. ASSESSING OFFICER HAS NOT PROPERLY ANALYSED THIS ASPECT. HE GOT CONFUSED BY ANOTHER CONSIDERATION VIZ. SALE OF TDR IS A ONETIME TRANSACTION ETC. THE APPELLANT HAS ALSO P LACED RELIANCE ON RADHE DEVELOPERS 23 SOT 420 (AHD) AND VIMAL BUILDERS ITA 3646/MUM/2007 DATED 28.7.2007. ON THE METHOD OF ACCOUNTING IT HAS BEEN CONTENDED THAT THE CONSTRUCTION OF ONLY 4 BUILDINGS HAS BEEN STARTED. AS THE TENEMENTS BEING CONSTRUCTED IN 6 BUILDINGS ARE TO BE GIVEN TO THE HUTMENTS FREE OF COST, AND THE APPELLANT FOLLOWS COMPLETION METHOD OF ACCOUNTING, THE EXPENSES WERE CAPITALIZED AS WIP AND THE RECEIPTS FROM SALE OF T D R WAS TAKEN AS ADVANCE FOR THE AFORESAID HOUSING PROJECT. IT WAS CONTEN DED THAT THE TORS ISSUED WERE ONLY PART OF THE T D RS WHICH WAS ISSUED A G AINST COMPLETION OF PLINTH LEVEL OF 4 BUILDINGS ONLY. IT HAS BEEN STATED THAT THE APPELLANT HAS OFFERED THE TAX BY RECOGNIZING THE 4 BUILDINGS UNDERTAKEN FOR CONSTRUCTION FIRST, AS COMP LETE IN A.Y. 2008 - 09. IT HAS BEEN ALSO STATED THAT THE APPELLANT HAS BEEN FOLLOWING THE PROJECT COMPLETION METHOD FOR LAST SEVERAL YEARS AND THEREFORE, THE SAME CANNOT BE CHANGED WITHOUT ANY VALID REASON. THE APPELLANT HAS ALSO PLACED ON RECORD THE NOTES T O ACCOUNT APPEARING IN SCHEDULE 11 OF THE BALANCE SHEET IN SUPPORT OF THEIR CLAIM. ON VERIFICATION, IT IS FOUND CORRECT. IN FACT THERE IS NO FINDING OF THE ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 10 ASSESSING OFFICER WHY HE DECIDED TO SWITCH TO PERCENTAGE COMPLETION METHOD WHEN THE REGULARLY FOLLOW ED METHOD OF APPELLANT WAS PROJECT COMPLETION METHOD. THE ASSESSING OFFICER HAS CLEARLY ERRED IN STATING IN ASSESSMENT ORDER THAT THE APPELLANT FOLLOWS PERCENTAGE COMPLETION METHOD. (PARA 5.5 OF THE ASSESSMENT ORDER). IN SUCH A VIEW OF THIS MATTER, THE F INDING OF ASSESSING OFFICER IS TOTALLY INCORRECT. THE APPELLANT HAS ALSO RELIED ON MUMBAI IT AT GIVEN IN THE CASE OF CHEMBUR TRADING CORPORATION, PRESTIGE STATE PROJECTS AND AVDHESH BUILDERS QUOTED SUPRA THAT THE METHOD OF ACCOUNTING EMPLOYED BY THE ASS ESSEE IS CORRECT AND CANNOT BE DISTURBED. SECTION 145 IS A MACHINERY SECTION AND NOT AN ASSESSMENT SECTION. THIS PROVISION DEALS WITH METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE AND THE CIRCUMSTANCES IN WHICH THE INCOME TAX AUTHORITIES CAN COMPUTE THE INCOME OF THE ASSESSEE IN A MANNER OTHER THAN WHAT THE ASSESSEE FOLLOWS. THE LAW ON THIS ISSUE IS WELL SETTLED. WHERE AN ASSESSEE RE G ULARLY EMPLOYS A METHOD OF ACCOUNTING , HIS INCOME HAS TO BE COMPUTED IN ACCORDANCE WITH SUCH REGULAR METHOD UNLESS BY THAT METHOD THE TRUE PROFITS CANNOT BE ARRIVED AT. [ CIT VS. MOON MILLS LTD. (1966) 59 ITR 574 (SC); KESHAV MILLS LTD. VS. CLT (1953) 231TH 230 (SC); TATA IRON STEEL CO. LTD. VS. CIT (1977) 106 ITR 363 (BORN)]. THEREFORE, THE ASSESSING OFFICER CAN COMPUTE THE INCOME ON A DIFFERENT BASIS U/S 144 OF THE I.T. ACT ONLY IF IT IS FOUND THAT THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE DOES NOT REFLECT THE CORRECT INCOME. SECTION 145(1) SAYS 'INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR P ROFESSION OR INCOME FROM OTHER SOURCES SHALL, SUBJECT TO THE PROVISIONS OF SUB SEC.(2), BE COMPUTED IN ACCORDANCE WITH EITHER CASH OR MERCANTILE SYSTEM OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE. IN FACT, FOR THE WORDS 'REGULARLY ' EMPLOYED BY THE A SSESSEE' APPEARING IN THIS SUB SECTION, IT HAS BEEN HELD IN MANY CASES THAT SEC. 145 IS A MANDATORY PROVISION WHICH COMPELS THE DEPARTMENT TO ACCEPT THAT SEC. 145 IS A MANDATORY PROVISION WHICH COMPELS THE DEPARTMENT TO ACCEPT ASSESSEE'S METHOD OF ACCOUNTING UNLESS IT COULD BE ESTABLISHED BY THE ASSESSING OFFICER THAT THE METHOD IS DEFECTIVE OR IS INCAPABLE OF COMPUTING THE REAL INCOME. AS NOTHING OF THAT SORT WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER, I FIND THAT THE FINDING OF THE ASSESSING OFFICER IS ERRONEOUS. IN VIEW OF THE ABOVE, IT IS HELD THAT THE INCOME FROM BUSINESS AN D PROFESSION SHALL BE CONTINUED TO BE COMPUTED UNDER THE REGULARLY EMPLOYED METHOD OF PROJECT COMPLETION METHOD. IT IS ALSO APPARENT FROM THE MATERIALS AVAILABLE ON RECORD THAT THE PROJECT IS NOT COMPLETE IN THIS ASSESSMENT YEAR. CONSTRUCTION FOR ONLY 4 OUT OF 6 BUILDINGS HAS BEEN STARTED AND EVEN IN THIS RESPECT ONLY UPTO 25% WAS RECO G NIZED BY THE PMC AS ELIG IBLE FOR GRANT OF T D R. THESE FACTS ARE ALSO NOT IN DISPUTE. IN SUCH VIEW OF THE MATTER IT CANNOT ALSO BE HELD THAT THE PROJECT WAS COMPLETE IN T HIS ASSESSMENT YEAR. FURTHERMORE, RECEIPT AND SALE OF TDR CANNOT BE TREATED AS A SEPARATE ACTIVITY IN THE FACTS OF THIS CASE AS THE DOCUMENTS CLEARLY SHOW THAT ISSUE OF T D R IS INEXTRICABLY LINKED TO THE SRA PROJECT FOR WHICH INCOME IS TO BE COMPUTED UND ER THE HEAD PROJECT COMPLETION METHOD. THE ASSESSING OFFICER IS DIRECTED TO ASSESS INCOME ON THE PRINCIPLE OF ACCOUNTING FOLLOWED BY APPELLANT AND BY TREATING RECEIPTS OF TDR AS PART OF SRA PROJECT. THEREFORE, GROUNDS NO. 1 AND 3 ARE ALLOWED. 10 . THE SECO ND ASPECT OF THE ISSUE I.E. THE CLAIM OF DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT WHICH WAS DENIED BY THE ASSESSING OFFICER WAS HELD TO BE PREMATURE IN THE YEAR UNDER CONSIDERATION AND THE SAID ISSUE WAS NOT ADJUDICA TED BY THE CIT(A) AFTER OBSERVING AS UNDER : - ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 11 5.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE LAW. IT IS IMPORTANT TO FIRST POINT OUT THAT THE APPELLANT IN THIS ASSESSMENT YEAR HAD NOT CLAIMED DEDUCTION U/S 80 - IB(10) IN THEIR RETURN OF INCOME, AS IT HAS TREATED THE PROJECT AS NOT COMPLETE. IN VIEW OF THE SAME, THE ENTIRE EXPENDITURE WAS TREATED AS WORK - IN - PROGRESS AND THE RECEIPT FROM SALE OF TD RS AS ADVANCE. A DETAILED DISCUSSION ON THIS ISSUE HAS ALREADY BEEN MADE IN PARA 4 ABOVE. THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ISSUE OF ALLOWABILITY OF SEC. 8018(10) CAME UNDER CONSIDERATION AS THE ASSESSING; OFFICER PROCEEDED TO ASSESS THE INCOME FROM THE SRA PROJECT ON PERCENTAGE COMPLETION METHOD. THE APPELLANT, IN VIEW OF THE ABOVE HAD CLAIMED THAT THE PROJECT IS ELIGIBLE FOR DEDUCTION U/S 801B(1 0 ) AND THEREFORE, THE SAID CLAIM SHOULD BE ALLOWED IF THE ASSESSING OFFICER DECIDES TO ASSESS THE INCOME AS PROPOSED. THE APPELLANT THEREFORE, SUBMITTED THE STATUTORY AUDITORS' REPORT BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASSESS ING OFFICER WAS NOT SATISFIED ABOUT THE ELIGIBILITY OF THE DEDUCTION AND DECIDED TO HOLD THAT DEDUCTION U/S 801B (10) IS NOT ELIGIBLE TO THE SRA PROJECT AS NOTED IN PARA 2 AND PARA 5.1 ABOVE. THE APPELLANT THEREFORE, HAS ALSO RAISED THE GROUND WHICH IS U NDER CONSIDERATION AND HAS ALSO MADE SUBMISSIONS AS NOTED IN PARA 5.2 ABOVE. HOWEVER, IN MY CONSIDERED OPINION, SINCE THE GROUNDS NO.1 AND 3 HAVE BEEN ALLOWED, AS PER WHICH THERE IS NO COMPUTABLE INCOME FROM THE SRA PROJECT IN THIS ASSESSMENT YEAR, GRO UND NO.2 HAS BECOME ONLY ACADEMIC IN NATURE. THOUGH THE APPELLANT HAS TRIED TO MEET ALL THE OBJECTIONS OF THE ASSESSING OFFICER, TO SHOW THAT THE S R A PROJECT IS ELIGIBLE FOR DEDUCTION U/S 8018(10), IT IS HELD PREMATURE TO DECIDE THE SAME IN THIS ASSESS MENT YEAR. GROUND NO.2 THEREFORE, IS TREATED AS DISMISSED BEING NOT REQUIRED TO BE ADJUDICATED IN VIEW OF DECISION IN FAVOUR OF THE APPELLANT IN RESPECT OF GROUNDS NO.1 AND 3. DECISION IN FAVOUR OF THE APPELLANT IN RESPECT OF GROUNDS NO.1 AND 3. FOR STATISTICAL PURPOSES, GROUND NO.2 IS TREATED AS DISMISSED. THIS ISSUE WI LL BE RELEVANT IN SUBSEQUENT AS SESSMENT YEARS WHERE THE PROFIT FROM SRA PROJECT BECOME ASSESSABLE . 11 . THE REVENUE IS IN APPEAL AGAINST THE ORDER OF THE CIT(A). 12 . THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THOUG H THE ASSESSEE HAD SOLD THE TDR DURING THE YEAR UNDER CONSIDERATION, BUT THE AS SESSEE HAS CAPITALIZED THE SAME CONSIDERING IT AS COST OF PROJECT. HOWEVER, THE ASSESSING OFFICER TREATED THE SAME AS BUSINESS RECEIPT AND TAXED THE SAME IN THE HANDS OF THE ASSESSEE. OUR AT TENTION WAS DRAWN TO THE COPY OF THE DEVELOPMENT AGREEMENT PLACED AT PA GES 81 TO 119 OF THE PAPER BOOK WITH SPECIAL REFERENCE TO PAGE 98 OF THE PAPER BOOK. 13 . THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE PERUSAL OF PARAS 4 6 OF THE AGREEMENT REFLECT THAT THE ASSESSEE HAD PURCHASED TDR RIGHTS. IN CASE, THE TDR IS SELF - GENERATED THEN REVENUE HAS NO CASE BUT, ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 12 HOWEVER, IN THIS REGARD, PART Y OF THIRD PART MADE THE TDR RIGHTS AVAILABLE TO THE ASSESSEE AND CONSEQUENTLY THE SAME I S TAXABLE IN THE HANDS OF THE ASSESSEE AS TRADING RECEIPT. THE ISSUE TO BE DECIDED IN THE PRESENT APPEAL, AS PER THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE WAS WHETHER THE TDR WAS TRADING RECEIPT OR TDR WAS SELF - GENERATED RECEIPT. 14 . THE LD. A UTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HAS RELIED UPON PERCENTAGE COMPLETION METHOD WHICH HAS NO BEARING TO THE PRESENT ISSUE. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE SCHEME OF DEVE LOPMENT UNDERTAKEN BY THE ASSESSEE WAS UNDER THE SLUM REHABILITATION SCHEME, A COPY OF WHICH IS PLACED AT PAGE 151 OF THE PAPER BOOK. IT WAS FURTHER POINTED OUT BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, THE SCHEME ITSELF ENVISAGED THE RELEASE OF TDR ONLY ON CONSTRUCTION OF THE SATISFIED LEVEL. HE FURTHER STATED THAT THE SCHEME ISSUED BY THE GOVERNMENT OF INDIA AND FORMULATED BY GOVERNMENT OF MAHARASHTRA AND EXECUTED TH ROUGH PCNTDA , T HE RIGHTS ACQUIRED UNDER THE SCHEME WERE TRANSFERRED . THE L D. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE DEVELOPMENT AGREEMENT WAS NOT DONE BY THE OWNERS OR THE PARTY N O.3 BUT BY THE ASSESSEE AND CONSEQUENTLY THE RIGHTS OF TDR WERE ACQUIRED BY THE ASSESSEE. THE LD. AUTHORIZED REPRESENTATIVE F OR THE ASSESSEE FURTHER POINTED OUT THAT THE AGREEMENT WAS ENTERED INTO BETWEEN THE PARTIES ON 09.08.2004 AND THE COMMENCEMENT CERTIFICATE FOR THE DEVELOPMENT OF THE SAID PROJECT WAS ISSUED ON 11.05.2006 . T HE DEVELOPER OF THE SRA PROJECT DECIDED TO FOLLOW PROJECT COMPLETION METHOD BECAUSE OF MANY TECHNICAL ITIES OF REHABILITATION PROJECT AND REVENUE WOULD BE ACCOUNTED FOR ON COMPLETION OF THE PROJECT. IT WAS POINTED OUT BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THERE WAS NO DISPUTE OF QUAN TUM OF PROFIT BETWEEN ASSESSING OFFICER AND THE ASSESSEE. THE ASSESSING OFFICER HAS GRANTED THE DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT IN LATER YEARS. H OWEVER, IN THE YEAR UNDER APPEAL , THE ASSESSING OFFICER HAS TREATED THE ASSESSEE AS TRADER OF TD R AND TAXED THE RECEIPT OF SALE OF TDR AS ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 13 INCOME OF THE ASSESSEE. THE CASE PUT UP BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT WHERE A PARTICULAR METHOD OF ACCOUNT ING IS BEING FOLLOWED BY THE ASSESSEE , THE SAME CANNOT BE DISTURBED. FURT HER, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE TDR RECEIVED ON SLUM REHABILITATION SCHEME WOULD BE TREATED AS INCOME FROM THAT HOUSING PROJECT AS LAID DOWN BY THE MUMBAI BENCH OF THE TRIBUNAL IN ACIT VS. M/S SKYLARK BUILD IN ITA NO.4307 & 4308/PN/2009 RELATING TO ASSESSMENT YEAR 2006 - 07 AND 2007 - 08, ORDER DATED 12.07.2011 AND ALSO IN ITO VS. M/S SONASHA ENTERPRISES IN ITA NO.4911 & 4912/MUM/2010 RELATING TO ASSESSMENT YEAR 2007 - 08 AND 2008 - 09 , ORDER DATED 31.10.2011. THE LD. AUT HORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE RATIO LAID DOWN IN ITO VS. M/S CHEMBUR TRADING CORPORATION IN ITA NOS.2593/MUM/2006 AND ITA NOS.4194 TO 4 197/MUM/2007 RELATING TO ASSESSMENT YEARS 2000 - 01 TO 2004 - 05, ORDER DATED 21.01. 2009 . THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE FACTS BEFORE MUMBAI BENCH OF THE TRIBUNAL ARE IDENTICAL TO THE FACTS OF THE PRESENT CASE. IT MUMBAI BENCH OF THE TRIBUNAL ARE IDENTICAL TO THE FACTS OF THE PRESENT CASE. IT WAS FURTHER POINTED OUT BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE HONBLE BOMBAY HIGH COURT IN CIT VS. M/S CHEMBUR TRADING CORPORATION IN INCOME TAX APPEAL NO.3179 OF 2009 , ORDER DATED 14.09.2011 HAS U PHELD THE ORDER OF THE TRIBUNAL AND DISMI SSED THE APPEAL OF THE REVENUE. FURTHER, RELIANCE WAS PLACED ON THE RATIO L AID DOWN IN ACIT VS. M/S VIDEOCON ATITHI SHELTERS PVT. LTD. IN ITA NOS.3496, 3497, 3498 & 3499/MUM/2009 RELATING TO ASSESSMENT YEARS 2004 - 05, 2005 - 06, 2006 - 07 & 2007 - 08, ORDER DATED 15.09.2010 , WHEREIN SIMILAR PROPOSITION WAS LAID DOWN. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER REFERRED TO THE ASSESSMENT ORDERS PASSED IN CASE OF THE ASSESSEE RELATING TO ASSESSMENT YEAR 2010 - 11 AND POINTED OUT THAT THE INCOME WAS OFFERED TO TAX ON THE COMPLETION OF THE PROJECT. IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT NO NEW ADDITIONAL EVIDENCE WAS FILED BEFORE THE CIT(A), THOUGH SPECIFIC GROUND IN THIS REGARD WAS RAISED BY THE REVENUE. ANOTHER CONTENTION RAISED BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS TH AT THE TDR RIGHTS ARE TO BE ASSIGNED TO THE PRIMARY ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 14 DEVELOPER AND THE ASSESSEE HAD ASSIGNED THE AGREEMENT WITH SLUM REHABILITATION AUTHORITY UNDER WHICH BOTH THE TDR RIGHTS AND FSI WERE GRANTED TO THE ASSESSEE. 15 . IN REJOINDER, THE LD. DEPARTMENTAL REPR ESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ASSESSEE IS THE SECOND DEVELOPER . THE BUILDING LAYOUT PLANS WERE SUBMITTED BY T HE FIRST DEVELOPER ON THE BASIS OF WHICH PCMC SANCTIONED 6 , 45 , 000 SQ.FTS. OF TDR/FSI . T HUS, THERE WAS DIFFERENCE BETWEEN SANCTI ON AND COMMENCEMENT OF THE PROJECT , WAS THE NEXT PLEA RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE . HE FURTHER SUBMITTED THAT AS PER THE SCHEME, THE ASSESSEE WAS ENTITLED TO TWO ENTITLEMENTS I.E. FSI UNDER WHICH HE WAS ENTITLED TO CON STRUCT BUILDING AND SELL THE SAME FOR PROFIT AND THE SECOND WAS THE GRANT OF TDR , WHICH WAS SANCTIONED TO FIRST DEVELOPER AND WAS RELEASED TO THE SECOND DEVELOPER. HE STRONGLY CONTENDED THAT IN THE PRESENT CASE WHERE THE ASSESSEE HAS PURCHASED THE TDR , IT SHOULD BE BROUGHT TO TAX . I T WAS POINTED OUT BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT RS.3.55 CRORES WAS PAID BY THE ASSESSEE FOR ACQUIRING THE TDR AND HENCE THE SAME IS TO BE TAXED IN THE YEAR OF SALE OF TDR. ANOTHER CONTENTION RAISE D BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE WAS THAT THE ASSESSING OFFICER HAS GIVEN A FINDING THAT THE SAID SCHEME WAS NOT APPROVED BY THE CBDT. 16 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROMOTERS, BUILDERS, DEVELOPMENT AND CONSTRUCTION ACTIVITIES. THE ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT ON 9 TH AUGUST, 2004, COPY OF WHICH IS PLACED AT PAGES 81 TO 119 OF THE PAPER BOOK. THE PERUSAL OF THE SAID AGREEMENT REFLECTS THAT THE PARTY OF THE FIRST PART ENLISTED THEREIN WERE THE ABSOLUTE OWNERS OF THE PIECE OF LAND WITH BUILDING AND STRUCTURE STANDING THEREON BEARING CTS NO.1046 1054, NANA PETH, PUNE ADMEASURING 14,889 SQ.MTRS.. SOME PORTION OF THE SAID PROPERTY WERE OCCUPI ED BY TENANTS/LESSEES AND SOME PORTION WERE OCCUPIED BY HUTMENT DWELLERS. ALL THE PORTIONS IN OCCUPATION OF THE OWNERS/TENANTS/LESSEES/HUTMENT DWELLERS WAS DECLARED AS SLUM BY THE PMC UNDER THE MAHARASHTRA SLUM AREAS (IMPROVEMENT, ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 15 CLEARANCE AND REDEVELOPM ENT) ACT, 1971 AND THE NOTIFICATION TO THAT EFFECT WAS PUBLISHED IN THE GAZETTE. THE COMPETENT AUTHORITY UNDER THE SLUM AREA REHABILITATION ACT GRANTED PERMISSION IN THE NAME OF SHRI VIKRAMSINGH LAXMANSINGH JADHAVRAO I.E. A PARTY OF THE THIRD PART AS DEVE LOPER AND THE POWER OF ATTORNEY HOLDER OF LAND OWNERS FOR THE REDEVELOPMENT OF THE SAID PROPERTIES. THE PARTY OF THE THIRD PART OFFERED AND UNDERTOOK TO GET DONE THE WORK OF ENTERING INTO AGREEMENT WITH THE HUTMENT DWELLERS AND OBTAIN ALL THE NECESSARY OR DERS AND PERMISSIONS FOR DEVELOPMENT AND CONSTRU CTION. THE PARTY OF THIRD PART ON BEHALF OF THE SHAMBHURAJE JADHAVRAO RELIGI OU S TRUST APPLIED FOR PERMISSION T O THE CHARITY COMMISSIONER FOR PERMISSION TO RE - DEVELOP OF THE SAID PROPERTY BELONGING TO THE TRU ST WHICH WAS GRANTED IN FAVOUR OF THE ASSESSEE B EFORE US , V IDE ORDER DATED 27.06.1996 , SUBJECT TO THE PAYMENT OF CONSIDERATION TO BE PAID BY THE DEVELOPER TO THE SAID TRUST AND PREMISES ADMEASURING 2500 SQ.FTS. FSI IN THE PROPOSED BUILDING TO BE RETAINED B Y THE TRUST FOR ITS ACTIVITIES. THE PARTY OF THE THIRD PART, WHO WAS ALSO ONE OF THE LAND OWNERS, THEREAFTER OBTAINED THE SLUM THE THIRD PART, WHO WAS ALSO ONE OF THE LAND OWNERS, THEREAFTER OBTAINED THE SLUM CLEARANCE ORDER DATED 14.04.1996 FROM THE COMPETENT AUTHORITY AND GOT THE BUILDING LAYOUT PLANT APPROVED AND SANCTIONED FROM PMC VIDE ORDER DATED 21.02.1998. THE PLANS OF THE BUILDING HAVING TOTAL FSI OF 6 , 45 , 249.49 SQ. FTS. W ERE GOT APPROVED AND SANCTIONED FROM THE PMC VIDE COMMENCEMENT CERTIFICATE DATED 27.01.2003. THE SAID PLANS WERE REVISED AND THE SAME HAVE BEEN SUBMITTED TO THE PMC FOR SANCTION. 17. THEREAFTER, THE PARTY OF THE SECOND PART I.E. ASSESSEE BEFORE US OFFERED TO UNDERTAKE THE DEVELOPMENT OF FSI/TDR OF 5,90,000 SQ.FTS. OUT OF TOTAL FSI/TDR OF 6,45,000 SQ.FT. AND AFTER NEGOTIATION THE PARTIES SETTLED THE TERMS O F THE AGREEMENT. IN VIEW THEREOF, THE PARTY OF THE THIRD PART ASSURED THE PARTY OF THE SECOND PART THAT THE TOTAL FSI/TDR ADMEASURING 6,45,000 SQ.FT. WOULD BE AVAILABLE FOR ALL THE PROPERTIES I.E. SCHEDULE - I PROPERTY , OUT OF WHICH FSI/TDR ADMEASURING 5,90 ,000 SQ.FT. WOULD BE AVAILABLE , OUT OF WHICH FSI OF 2500 SQ.FT. WOULD BE CONSTRUCTED FOR THE TRUST OWNER , FSI OF 1 , 92 , 500 SQ.FT. WOULD BE ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 16 CONSTRUCTED FOR THE OTHER OWNERS AND THE TENANTS AND HUTMENT DWELLERS AND BALANCE FSI/TDR OF 3 , 94 , 500 SQ.FT. WOULD BE AVAILABLE TO THE PARTY OF THE SECOND PART FOR SALE/TRANSFER IN OPEN MARKET. THE PARTY OF THE THIRD PART UNDERTOOK ALL THE RESPONSIBILITY OF DEALING WITH THE PMC, SLUM DWELLERS, TENANTS, THEIR REPRESENTATIVE, LEADERS AND FURTHER TO RESOLVE ALL DISPUTES AND PROBLEMS OF THE HUTMENTS DWELLERS AND ALSO TO OBTAIN THE PERMISSION FOR EXTENSION FOR COMPLETING THE CONSTRUCTION WORK FROM THE CHARITY COMMISSIONER AND TO GENERALLY OBTAIN ALL PERMISSIONS AND CLEARANCES AND MAKE AVAILABLE TO THE PARTY OF THE SECOND PART OF THE SAID PROPERTY HAVING CLEAN, CLEAR AND MARKETABLE TITLE FREE FROM ENCUMBRANCES, CLAIMS ETC.. THE PARTY OF THE THIRD PART WAS ALSO RESPONSIBLE FOR SECURING CLEAR AND MARKETABLE TITLE OF THE SCHEDULED PROPERTIES AND VESTING SUCH TITLE IN THE VARIOUS B UYERS OF UNITS ALSO. AS PER THE TERMS OF THE AGREEMENT, THE ASSESSEE AG REED TO PAY TO THE PARTY OF THE THIRD PART A SUM OF RS.3,55,70,000/ - TOWARDS PAYMENTS TO BE MADE TO EACH OF THE PARTY OF THE FIRST PART , INCLUDING THE TRUST AND TOWARDS REIMBURSEMENT O F ALL THE EXPENSES, COSTS AND CHARGES TRUST AND TOWARDS REIMBURSEMENT O F ALL THE EXPENSES, COSTS AND CHARGES INCURRED BY HIM FOR GETTING THE VARIOUS ORDERS AND PERMISSIONS, ETC., OUT OF WHICH SUM OF RS.1,25,00,000/ - WAS AGREED TO BE ADJUSTED TOWARDS CONSTRUCTION COST OF THE PREMISES TO BE CONSTRUCTED BY THE PARTY OF THE SECON D PART FOR THE PARTY OF THE FIRST PART AND THE THIRD PART. IT WAS AGREED BETWEEN THE PARTIES THAT THE PARTY OF THE SECOND PART I.E. THE ASSESSEE SHALL CONSTRUCT FOR AND ON BEHALF OF THE OWNERS AND AS AN AGENT OF ALL THE PART IES OF THE FIRST AND THIRD PART , PREMISES ADMEASURING 29 , 265 SQ.FT. EXCLUSIVE OF BALCONIES AND FOR THE LUMP SUM CONSTRUCTION COST OF RS.1,10,00,000/ - . IT WAS FURTHER AGREED THAT THE PARTY OF THE SECOND PART SHALL PAY TO THE TRUST A SUM OF RS.90,00,000/ - AS PER THE ORDER OF THE CHARITY COMMISSIONER AND THE BALANCE AMOUNT OF RS.2,80,70,000/ - TO THE PARTY OF THE THIRD PART. AS PER CLAUSE 6 OF THE AGREEMENT, IT WAS AGREED UPON THAT THE CONSIDERATION AGREED WAS FOR TOTAL FSI/TDR OF 3,94,500 SQ.FT. BEING MADE AVAILABLE TO THE PARTY OF THE SE COND PART FOR THE PURPOSES OF DEVELOPMENT, CONSTRUCTION AND SALE. AS PER CLAUSE 7 OF THE AGREEMENT, THE PARTY OF THE SECOND PART SHALL BE ENTITLED TO UTILIZE FSI OF 1 , 00,460 SQ.FT. IN RESPECT OF THE SAID PROPERTY ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 17 ITSELF AND FURTHER THE ASSESSEE SHALL ALSO BE ENTITLED TO UTILIZE THE TDR ADMEASURING OF 2,94,040 SQ.FT. OR PART THEREOF OF THE SAID PROPERTY. IT WAS FURTHER AGREED BETWEEN THE PARTIES THAT THE BALANCE FSI OF 55,000 SQ.FT. SHALL REMAIN WITH THE PARTY OF THE THIRD PART. THE SAID BALANCE FSI WAS A FTER DEDUCTING THE TDR ADMEASURING 2,96,540 SQ.FT. TO BE RELEASED IN FAVOUR OF THE PARTY OF THE SECOND PARTY, 1,00,460 SQ.FT. FOR FREE SALE IN MARKET, 1,95,000 SQ.FT. FOR THE OWNERS AND HUTMENT DWELLERS. THE PARTY OF THE SECOND PART WAS TO PAY 50% OF THE DIFFERENCE IN THE RATE OF THE TDR TO THE PARTY OF THE THIRD PART IF THE PARTY OF THE SECOND PART CHOOSES TO UTILIZE FSI ON THE PROPERTY IN EXCESS OF 1,00,460 SQ.FT.. IT WAS FURTHER AGREED AS PER CLAUSE 9 OF THE AGREEMENT THAT THE PARTY OF THE SECOND PART WILL ALONE BE ENTITLED TO S ELL /TRANSFER/ASSIGN THE BALANCE TDR TO ANY THIRD PERSON. OUT OF THE TDR RELEASED AT EVERY STAGE, THE AGREEMENT WAS THAT 12% WOULD BE AVAILABLE TO THE PARTY OF THE THIRD PART AND THE BALANCE WILL BE AVAILABLE TO THE PARTY OF THE SECOND PART AND ANY REDUCTION IN TDR WOULD ACCRUE TO THE SHARE OF THE PARTY OF THE THIRD PART AND NOT TO THE SHARE OF THE PARTY OF THE SECOND PART. AS THE PARTY OF THE THIRD PART AND NOT TO THE SHARE OF THE PARTY OF THE SECOND PART. AS PER CLAUSE 10 OF THE AGREEMENT, IT WAS AGAIN REITERATED THAT OUT OF THE TOTAL FSI/TDR ADMEASURING 6,45,0 00 SQ.FT., THE FSI/TDR ADMEASURING 5,90,000 SQ.FT. WOULD BE AVAILABLE TO THE PARTY OF THE SECOND PART, OUT OF WHICH FSI OF 2500 SQ.FT. WOULD BE CONSTRUCTED FOR THE TRUST - OWNER, FSI OF 1,92,500 SQ.FT. WOULD BE CONSTRUCTED FOR THE OTHER OWNERS AND THE TENANT S HUTMENT DWELLERS AND THE PARTY OF THE THIRD PART AND BALANCE FSI/TDR WAS 3,94,500 SQ.FT. OUT OF THE SAID 3,94,500 SQ.FT., 1,00,460 SQ.FT. WOULD BE CONSTRUCTED B Y THE PARTY OF THE SECOND PART AND THE SAID PROPERTY WOULD BE AVAILABLE FOR SALE IN OPEN MARKE T AND THE BALANCE OF 2,94,040 SQ.FT. WOULD BE AVAILABLE TO THE PARTY OF THE SECOND PART IN THE FORM OF TDR FOR SALE /TRANSFER IN OPEN MARKET IN STAGES. FURTHER, IT WAS RESPONSIBILITY OF THE PARTY OF THE THIRD PART TO GET THE TDR ADMEASURING 2,94,040 SQ.FT. RELEASED IN THE NAME OF THE PARTY OF THE SECOND PART AND GET THE DRC TO THAT EFFECT IN THE NAME OF THE PARTY OF THE SECOND PART. IT WAS AGREED THAT PARTY OF THE THIRD PART IS TO MAKE FSI ADMEASURING 1,00,460 SQ.FT. AVAILABLE TO THE PARTY OF THE SECOND PA RT FOR CONSTRUCTION AND SALE IN THE OPEN MARKET. ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 18 18. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD UNDERTAKEN A SLUM REHABILITATION P ROJECT (HEREINAFTER REFERRED TO AS SRA PROJECT) AT NANA PETH, PUNE ADMEASURING 14,889 SQ.MTS . AS PER THE SRA SCH EME, THE ASSESSEE WAS TO CONSTRUCT THE TENEMENTS FOR SLUM DWELLERS FREE OF COST AND IN THE RETURN, PUNE MUNICIPAL CORPORATION, IN TURN, WAS TO PROVIDE TRANSFERRABLE DEVELOPMENT RIGHTS (TDR) FOR A PARTICULAR AREA FOR THE USE OF THE ASSESSEE OR FOR SALE. TH E AREA AT NANA PETH ADMEASURING 14,889 SQ.MTS. WAS TREATED AS SLUM BY SLUM CLEARANCE ORDER NO.11/1996 DATED 29.03.1996 BY THE COMPETENT AUTHORITY I.E. PMC. THE COPY OF THE SAID CERTIFICATE IS ENCLOSED AT PAGES 141 TO 146 OF THE PAPER BOOK ALONG WITH ENG LISH TRANSLATION AT PAGES 147 TO 148 OF THE PAPER BOOK. THE COPY OF THE SLUM REHABILITATION SCHEME IS PLACED AT PAGES 149 TO 167 O F THE PAPER BOOK. THE ASSESSEE WAS REGISTERED AS A DEVELOPER WITH THE SLUM REHABILITATION AUTHORITY , PUNE - PIMPRI CHINCHWAD AREA AND WAS ELIGIBLE TO APPLY AND EXECUTE THE SLUM REHABILITATION SCHEME UNDER THE SRA RULES VIDE THE REGISTRATION CERTIFICATE DATED 25.05.2006 ISSUED BY THE SLUM REHABILITATION AUTHORITY IN THE NAME OF THE ASSESSEE . T HE COPY OF THE SAID REGISTRATION CER TIFICATE IS PLACED AT PAGE 147 OF THE PAPER BOOK. FURTHER, THE PUNE MUNICIPAL CORPORATION ALSO ISSUED A DEVELOPMENT RIGHTS CERTIFICATE UNDER THE SLUM REHABILITATION SCHEME FOR THE PROPERTY TO THE ASSESSEE THROUGH ITS MANAGING DIRECTOR VIDE ORDER DATED 04 T H OCTOBER, 2006. THE CASE OF THE ASSESSEE BEFORE US WAS THAT SINCE THE LAND OWNERS WERE NOT ABLE TO DEVELOP THE SAID PROPERTY, THE RIGHTS WERE ASSIGNED TO THE ASSESSEE VIDE SAID AGREEMENT FOR DEVELOPMENT DATED 09 TH AUGUST, 2004. AFTER EXECUTING THE SAID DEVELOPMENT AGREEMENT, THE ASSESSEE HAD THE RIGHT TO DEVELOP THE SAID PROPERTY IN FURTHER ANCE OF THE SCHEME OF SRA APPROVED BY THE PMC , UNDER WHICH ALL THE COST RELATING TO THE DEVELOPMENT OF THE PROPERTY HAD TO BE BORNE BY THE ASSESSEE. AS PER SRA SCHEME APPROVED BY THE PMC, TOTAL SIX BUILDINGS WERE TO BE CONSTRUCTED FOR HUTMENT DWELLERS AND TOTAL NUMBER OF UNITS TO BE PROVIDED WERE 624 IN NUMBER. THE ASSESSEE INITIALLY STARTED THE DEVELOPMENT OF 4 BUILDINGS OUT OF THE TOTAL 6 ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 19 BUILDINGS UNDER THE SRA SCH EME . T HE TDR ALLOTTED BY PMC TO THE DEVELOPER DEPEND ED UPON THE LEVEL OF THE CONSTRUCTION. AS PER CLAUSE K(6) OF THE SRA SCHEME, THE SAID TDR WAS TO BE MADE AVAILABLE BY PMC IN LINE WITH THE LEVEL OF CONSTRUCTION CARRIED OUT BY THE DEVELOPER . O UT OF TOT AL TDR , 25% OF THE SAME WAS ALLOTTED , ON ISSUE OF PLINTH CHECKING CERTIFICATE OF REHAB BUILDING. THE PMC THUS, ISSUED THE TDR OF 7780 SQ.MTRS. AFTER THE ISSUE OF PLINTH CHECKING CERTIFICATE OF THE 4 BUILDINGS OF WHICH CONSTRUCTION WAS STARTED BY THE ASSES SEE. 1 9 . THE DEVELOPER UNDER THE SRA SCHEME IS ENTITLED TO THE TDR ONLY IN COMPLIANCE WITH THE CONDITIONS OF THE SAID SCHEME AND ON THE BASIS OF SUCH COMPLETION OF LEVELS OF CONSTRUCTION. I N OTHER WORDS, THE TDR WHICH IS TO BE GRANTED AS CONSIDERATION FO R THE DEVELOPMENT OF THE PROJECT CANNOT BE CLAIMED BY THE OWNER AND ONLY THE DEVELOPER HAS THE RIGHT TO CLAIM THE SAID TDR. THE ASSESSEE FURTHER STATED BEFORE US THAT THE SAID TDR WAS RELEASED ON THE BASIS OF THE REQUEST MADE BY IT BEFORE PMC AND NO SUCH TDR WAS ISSUED IN THE NAME OF THE OWNER. 20 . ON PERUSAL OF THE SRA SCHEME, IT TRANSPIRES THAT FOR THE REHABILITATION OF THE HUTMENT DWELLERS , CERTAIN LAND IS EARMARKED FOR DEVELOPMENT , UNDER WHICH THE DEVELOPMENT RIGHTS ARE GRANTED FOR THE CONSTRUCTION OF THE TENEMENTS, WHICH IN TURN ARE ALLOTTED FREE OF COST TO THE HUTMENT DWELLERS , AGAINST WHICH THE DEVELOPER IS COMPENSATED BY ALLOTMENT OF TDR WHICH, IN TURN, CAN BE SOLD IN OPEN MARKET. WHERE THE TENEMENTS ARE TO BE ALLOTTED FREE OF COST TO THE HUTMENT DWELLERS O N RE - DEVELOPMENT , THEN THE COMPENSATION TO THE DEVELOPER IS IN THE FORM OF TDR , ON SALE OF WHICH THE ENTIRE DEVELOPMENT COST INCLUDING THE COST OF CONSTRUCT ION OF SUCH TENEMENTS CAN BE RE CO U PED BY THE DEVELOPER. THE SAID TDRS ARE ALLOTTED ON THE BASIS OF DIFFERENT STAGES OF COMPLETION OF THE PROJECT , IN ORDER TO CONTROL THE CARRYING OUT OF THE CONSTRUCTION BY THE DEVELOPER. IN THE ABOVE CIRCUMSTANCES, WHERE THE ALLOTMENT OF TDR IS INEXTRICABLY LINKED TO THE CONSTRUCTION OF THE PROJECT UNDER THE S RA SCHEME, THE CASE PUT UP BY THE REVENUE HAS NO BASIS . WE FIND NO MERIT IN THE PLEA OF THE ASSESSING OFFICER THAT ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 20 THE ASSESSEE BY ENTERING INTO AGREEMENT HAD PURCHASED THE TDR RIGHTS AND SUCH PROFITS ARISING ON SALE OF SUCH TDR RIGHTS IS NOT LINKED TO TH E HOUSING PROJECT AND IS TO BE SEPARATELY ASSESSED IN THE HAND OF THE ASSESSEE AS INCOME OF THE YEAR IN WHICH THE SAME WAS SOLD. IN THE FACTS OF THE PRESENT CASE BEFORE US, WHERE THE TDR RIGHTS WERE ACQUIRED BY THE ASSESSEE ON COMPLETION OF THE VARIOUS ST AGES OF CONSTRUCTION, AS IN THE SRA SCHEME FORMULATED BY THE GOVERNMENT OF MAHARASHTRA, THE RIGHTS ARISING THEREON BEING PERSON SPECIFIC, RELATED TO THE ASSESSEES DEVELOPMENT OF THE PROJECT AND HENCE ARE ARISING FROM THE DEVELOPMENT OF THE HOUSING PROJECT UNDERTAKEN BY THE ASSESSEE. IN OTHER WORDS, THE SAID TDR RECEIVED BY THE ASSESSEE IS ONE OF THE PROOFS OF THE HOUSING PROJECT UNDERTAKEN BY THE ASSESSEE AND THE PROFITS ARISING THEREON ARE IN CONTINU ATION OF THE ASSESSEE CARRYING ON THE DEVELOPMENT OF TH E PROJECT UNDER THE SRA SCHEME . THE SAID TDR HAD BEEN ALLOTTED TO THE ASSESSEE IN ORDER TO RECO U P HIS COST OF CONSTRUCTION AND ACQUISITION, SINCE THE TENEMENTS BUILT BY THE ASSESSEE UNDER THE SRA HAD TO BE ALLOTTED FREE OF COST TO THE HUTMENT DWELLERS. ASSESSEE UNDER THE SRA HAD TO BE ALLOTTED FREE OF COST TO THE HUTMENT DWELLERS. T HE PLOT UNDER RE - DEVELOPMENT WAS RESERVED FOR REHABILITATION UNDER SRA SCHEME AND CONSEQUENCE OF SUCH RE - DEVELOPMENT IS THE RELEASE OF TDR, WHERE THE PROJECT IS EARMARKED UNDER SRA SCHEME, THEN NEXT STEP IS ITS RE - DEVELOPMENT, CONSEQUENT TO WHICH TDR IS TO BE RELEASED TO THE DEVELOPER. MERELY BECAUSE THE LAND WAS EARMARKED DOES NOT MAKE THE OWNERS OR ANY OTHER PERSONS ENTITLED TO SUCH TDRS. IT IS THE DEVELOPER OF THE PROJECT WHO IS ENTITLED TO TDR RIGHTS, WHICH IN TURN ARE RELEASED AT DIFFERENT STAGES OF CONSTRUCTION. THE ASSESSEE BEFORE US HAD UNDERTAKEN THE DEVELOPMENT OF SRA PROJECT AND THE TDR RELEASED IS CONSEQUENT TO THE CONSTRUCTION ACTIVITY CARRIED ON BY ASSESSEE AND IS SELF ACQUIRED. IT CANNOT BE HELD TO BE TRADING RECEIPTS IN THE HANDS OF ASSES SEE. 2 1 . NOW, THE SECOND ASPECT OF THE ISSUE IS THE YEAR IN WHICH THE SALE OF TDR IS TO BE TAXED IN THE HANDS OF THE ASSESSEE. THE ASSESSEE IS FOLLOWING THE PROJECT COMPLETION METHOD AND HAS NOT RECOGNIZED THE INCOME FROM THE ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 21 DEVELOPMENT ACTIVITIES CAR RIED ON BY IT, SINCE THE PROJECT HAS NOT BEEN COMPLETED IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE BEFORE US IS CONSISTENTLY FOLLOWING THE PROJECT COMPLETION METHOD, WHICH IS A PRESCRIBED METHOD OF ACCOUNTING. C ONSEQUENTLY WHERE IT IS FOLLOWING A PART ICULAR METHOD OF RECOGNITION OF REVENUE , THE SAME CANNOT BE DISTURBED. THE SAID PROPOSITION HAS BEEN LAID DOWN BY VARIOUS BENCHES OF THE TRIBUNAL IN THE FOLLOWING CASES : - (I) PREM ENTERPRISES , 54 SOT 367 (MUM); (II) TRUE ZONE BUILDWELL PVT. LTD., 35 CCH 91 (DEL); (III) AWADHESH BUILDERS 37 SOT 122 (MUM); AND, (IV) HAWARE CONSTRUCTION, 64 DTR 251 (MUM) 2 2 . FURTHER, THE SAID JUDICIAL PRECEDENTS HELD THAT THE PROJECT COMPLETION METHOD IS PRESCRIBED METHOD OF ACCOUNTING. ACCORDINGLY, WE HOLD THAT WHE RE THE ASSESSEE IS FOLLOWING A PARTICULAR METHOD OF ACCOUNTING , WHICH IS PRESCRIBED, THE SAME CANNOT BE DISTURBED. 2 3 . UNDER THE PROJECT COMPLETION METHOD, WHICH WAS CONSISTENTLY FOLLOWED BY THE ASSESSEE, IT WAS DEB ITING THE COST AND EXPENSES TO THE WORK - IN - PROGRESS AND ANY RECEIPT RELATED TO THE SAID PROJECT WERE CREDITED TO THE SAID WORK - IN - PROGRESS. THE ASSESSEE HAD CREDITED THE AMOUNT RECEI VED ON SALE OF TDR ALSO TO WORK - IN - PROGRESS FOR THE YEAR UNDER CONSIDERATION. FURTHER, THE PLEA OF THE ASSESSEE BEFORE US WAS THAT THE INCOME ARISING FROM THE SAID PROJECT WAS OFFERED TO TAX IN ASSESSMENT YEAR 2010 - 11 AND ADMITTEDLY, THE ASSESSEE WAS ALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 80 - IB(10) OF THE ACT I.E. THE YEAR IN WHICH THE SAID PROJECT WAS COMPLE TED BY THE ASSESSEE. HENCE, THE SALE OF TDR CANNOT BE TAXED IN THE HANDS OF ASSESSEE IN THE INSTANT YEAR. 24. ANOTHER ASPECT OF THE ISSUE RAISED BEFORE US IS THE TREATMENT OF THE TDR RECEIPT UNDER THE SLUM REHABILITATION SCHEME AND WHE THER THE SAME IS TO BE TREATED AS INCOME FROM THE HOUSING PROJECT OR TO BE SEPARATELY ASSESSED. W E ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 22 FIND THAT THE MUMBAI BENCH OF THE TRIBUNAL IN ACIT VS. M/S SKYLARK BUILD (SUPRA) HAD HELD THAT THE TDR RECEIPT UNDER THE SRA IS TO BE TREATED AS INCOME FROM THE HOUSING PROJEC T , CONSEQUENT TO WHICH , THE ISSUE TO BE ADJUDICATED IS THE YEAR IN WHICH SUCH RECEIPTS ARE TO BE OFFERED TO TAX. 2 5 . WE FIND THAT THE SIMILAR ISSUE OF TAXABILITY OF PROCEEDS ON SALE OF TDR AROSE BEFORE THE MUMBAI BENCH OF THE TRIBUNAL IN ITO VS. M/S CHEMB UR TRADING CORPORATION (SUPRA) . THE TRIBUNAL AFTER ELABORAT ING UPON THE ISSUE HELD AS UNDER : - 29. WE HAVE ALSO EXAMINED THE ORDER OF THE CIT(A) AND WE FIND THAT CIT(A) H AS EXAMINED THIS ISSUE IN THE LIGHT OF THE DETAILED FACTS AND THE OBJECT OF TH E S CHEME AND HAS FINALLY CONCLUDED THAT THIS ROAD TDR IS DIRECTLY RELATED TO THE SAID P R OJECT AND SALE PROCE E DS AGAINST THIS TDR ARE TO BE RECOGNIZED AS A REVENUE RECEIPT IN THE YE A R IN WHICH THE PROJECT IS COMPL E TED. 30. DURING THE COURSE OF HEARING OF THE APPEAL, THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT BRING OUT ANYTHING ON RECORD TO ESTABLISH THAT THE ASSESSING OFFICER CAN ADOPT TWO METHOD OF ACCOUNTING IN ONE PROJECT TO DETERMINE THE INCOME OF THE ASSESSEE. THE RECOGNIZED METHOD OF ACCOU NTING IN THE CASE OF CONSTRUCT ION ARE MAINLY TWO METHODS I.E. (1 ) T HE PROJECT COMPLETION METHOD AND CONSTRUCT ION ARE MAINLY TWO METHODS I.E. (1 ) T HE PROJECT COMPLETION METHOD AND (2) PERCENTAGE COMPLETION METHOD. THE ASSESSEE HAS A RIGHT OR A PRIVILEGE TO ADOPT ANY ONE OF THE METHODS OF ACCOUNTING FOR DETERMINING ITS PROFIT. IN THE I NSTANT CASE THOUGH THE ASSESSEE HAS BEEN FOLLOWING THE PROJECT COMPLETION METHOD TO DETERMINE THE PROFITS OF A PRO JECT FOR THE LAST SO MANY YEARS, BUT, THE YEAR UNDER A CCOUNTS, THE ASSESSING OFFICER HAS DISSECTED THE PROJECT IN TWO SEGMENTS AND FOR ONE SEG MENT, HE APPLIED PROJECT COMPLETION METHOD AND FOR THE REMAINING SEGMENT , HE DETERMINED THE PROFIT ON SALE OF THE TDR. THE METHOD ADOPTED BY THE ASSESSING OFFICER IS NEITHER PREVALENT NOR RECOGNIZED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OR UNDER ANY LA W. UNDISPUTE DLY, THE TRANSFER OF LAND FOR EASTERN EXPRESS FREE WAY IS THE PART OF THE COMP OSITE AGREEMENT AND THE SALE PROCEEDS OF TDR, RECEIVED ON ACCOUNT OF TRANSFER OF LAND , WAS UTILIZED BY THE ASSESSEE FOR CONSTRUCTION OF THE TENEMENTS AS PER THE TERM S OF THE CONTRACT. U NDER THESE CIRCUMSTANCES. WE ARE OF THE CONSIDERED VIEW THAT IT WAS A COMPOSITE AGREEMENT OR A PROJECT AND THE ASSESSEE HAS RIGHTLY COMPUTED ITS PROFIT ON THE BASIS OF THE COMPLETION METHOD. WE , THEREFORE, FIND NO INFIRMITY IN THE O RDER OF THE CIT(A) AND WE CONFIRM THE SAME. 2 6 . THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN INCOME TAX APPEAL NO.3179 OF 2009, ORDER DATED 14.09.2011 AFFIRMING THE ORDER OF THE TRIBUNAL HELD AS UNDER : - 1. WHETHER THE AMOUNT RECEIVED ON THE SALE OF TRA NSFER OF DEVELOPMENT RIGHT (TDR) IS ASSESSABLE IN THE YEAR IN WHICH IT IS RECEIVED OR IT IS LIABLE TO BE ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 23 ASSESSE D IN THE YEAR IN WHICH THE PROJECT WAS COMPLETED, IS THE QUESTION RAISED IN THIS APPEAL. 2. IT IS NOT IN DISPUTE THAT THE ASSESSEE ON COMPLETION OF THE PROJECT HAS OFFERED THE INCOME RECEIVED ON SALE OF TDR IN THE SUBSEQUENT YEAR A.Y. 2008 - 09 AND THE SAME HAS BEEN DULY ASSESSED. IN THESE CIRCUMSTANCES, SUSTAINING THE ADDITION OF THE ASSESSMENT YEAR IN QUESTION DOES NOT ARISE. CONSEQUENTLY, DELET ING ADDITION OF AMOUNT RECEIVED BY THE ASSESSEE ON TRANSFER OF TDR IN THE YEAR 2002 - 03 BY THE ITAT CANNOT BE FAULTED. ACCORDINGLY, THE APPEAL IS DISMISSED WITH NO ORDER AS TO COSTS. 2 7 . SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE DIFFERENT BENCHES OF THE TRIBUNAL, WHICH ARE AS UNDER : - (I) VIDEOCON ATITHI SHELTERS PVT. LTD., ITA NO.3496, 3497, 3498 & 3499/MUM/2009 DATED 15 SEPTEMBER 2012; (II) PUSHPA CONSTRUCTION CO., ITA NO.193/MUM/2010 DATED 25 APRIL 2012; (III) SKYLARK BUILD, ITA NO.4307/MUM/20 09 DATED 12 JULY 2011; AND, (IV) SONASHA ENTERPRISES, ITA NO.4911/MUM/2010 DATED 31 OCTOBER 2011. 2 8 . FOLLOWING THE ABOVE SAID PROPOSITION LAID DOWN BY THE HONBLE HIGH COURT IN CIT VS. M/S CHEMBUR TRADING CORPORATION (SUPRA) AND VARIOUS BENCHES OF THE TRIBUNAL, WE HOLD THAT WHERE THE ASSESSEE WAS FOLLOWING PROJECT COMPLETION METHOD , THE SALE PROCEEDS OF TDR ARE TO BE TAXED IN THE HANDS OF THE ASSESSEE IN THE YEAR IN WHICH THE SAID PROJECT IS COMPLETED. IN VIEW THEREOF, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE IN THIS REGARD . IN VIEW OF HOLDING THAT SALE PROCEEDS OF TDR ARE TAXABLE IN THE YEAR OF COMPLETION OF PROJECT, WE ARE NOT ADJUDICATING THE ISSUE OF GRANT OF PERMISSION BY BOARD. A CCORDINGLY, WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 2 9 . A NOTHER PLEA HAS BEEN RAISED BY THE REVENUE IN GROUND OF APPEAL NO.2 THAT THE CIT(A) HAD NOT GIVEN AN Y OPPORTUNITY BY WAY OF REMA ND PROCEEDINGS BEFORE ADJUDICATING THE ISSUE ON THE BASIS OF DOCUMENTS FILED . 30 . THE PLEA OF THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE US IS THAT ALL THE DOCUMENTS REFERRED BY THE CIT(A) WERE FILED BEFORE THE ASSESSING OFFICER AND ON THE BASIS OF THE SAID DOCUMENT, THE ASSESSING OFFICER HAD COME TO THE CONCLUSION THAT THE INCOME OF SALE OF THE TDR IS CHARGEABLE TO TAX IN THE ITA NO . 1501 /PN/20 1 2 CO NO. 46 /PN/201 3 ISHWAR CONSTRUCTIONS P VT. LTD . 24 CURRENT YEAR. IN THE ENTIRETY OF THE ABOVE FACTS AND CIRCUMSTANCES, WE FIND NO MERIT IN THE OBJECTION RAISED BY THE REVENUE IN THIS REGARD AND THE SAME IS DISMISSED . 31 . NOW, COMING TO THE C ROSS - OBJECTION FILED BY THE ASSESSEE. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY STATED THAT IN CASE THE APPEAL OF THE REVENUE IS DISMISSED, THE CROSS - OBJECTION FILED BY THE ASSESSEE BECOME INFRUCTUOUS. IN VIEW THEREOF, WE DISMISS THE CROS S - OBJECTION OF THE ASSESSEE. 3 2 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND THE CROSS - OBJECTION OF THE ASSESSEE IS ALSO DISMISSED. ORDER P RONOUNCED ON THIS 29 TH DAY OF MAY , 201 5 . SD/ - SD/ - ( R.K. PANDA ) ( SUSHMA CHOWLA ) ( R.K. PANDA ) ( SUSHMA CHOWLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 29 TH MAY , 2015 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A) - I , PUNE ; 4) THE CIT - I, PUNE ; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY I.T.A.T., PUNE