B.U. Bhandari Raviraj Developers, V. Income-tax Officer,

CO 93/PUN/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9769 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 06-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Assessee Lawyers: V L JAIN
• Keywords: Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.2374/PN/2012 (ASSESSMENT YEAR : 2004-05) ITO, WARD-3(2), PUNE .. APPELLANT VS. M/S. B.U. BHANDARI RAVIRAJ DEVELOPERS, 1182, 1/3, F.C. ROAD, PUNE-411005 .. RESPONDENT PAN NO.AABFR5029F CO.NO.93/PN/2013 (ASSESSMENT YEAR : 2004-05) M/S. B.U. BHANDARI RAVIRAJ DEVELOPERS, 1182, 1/3, F.C. ROAD, PUNE-411005 .. CROSS OBJECTOR PAN NO.AABFR5029F VS. ITO, WARD-3(2), PUNE .. APPELLANT IN THE APPEAL ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SMT. S. PRAVEENA DATE OF HEARING : 02-07-2014 DATE OF PRONOUNCEMENT : 08-07-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE AND THE CO FILED B Y THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 09-07-2012 OF THE CIT(A)-II, PUNE RELATING TO ASSESSMENT YEAR 2004-05. FOR THE SAKE OF CONVENIENCE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER. 2 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS A FIRM CARRYING ON THE BUSINESS OF PROMOTERS AND BUILDERS. THE ASS ESSEE HAD EXECUTED THE HOUSING PROJECT CALLED 'PLANET MILLENNIUM' A T PIMPLE SAUDAGAR, THE PROFITS OF WHICH WERE CLAIMED AS DEDUCTION U/S 80IB(10) OF THE IT. ACT, 1961. THE ASSESSEE HAD FILED ITS ORIGINAL RETU RN ON 28-10-2004 DECLARING INCOME OF RS. NIL AFTER CLAIMING DEDUCTIO N OF RS.5,09,83,630/- U/S 80IB(10). THE ASSESSMENT U/S 1 43(3) R.W.S. 144A WAS COMPLETED ON 24-3-2006 ALLOWING DEDUCTION U/S.8 0IB(10) TO THE EXTENT OF RS. 4,95,59,276/- BEING PROFIT ON RESIDEN TIAL PORTION AND TAXING THE PROFITS RECEIVED FROM SALE OF COMMERCIAL SPACE AT RS.14,24,354/. THEREAFTER NOTICE U/S 148 WAS ISSUED ON 25-3-2011 F OR THE FOLLOWING REASONS : 'IN YOUR CASE IT IS SEEN FOR A. Y. 2004-05 THAT THOUGH THE COMMERCIAL SPACE EXCEEDED 2000 SQ. FT. THE A.O. HAD ALLOWED DED UCTION U/S 80IB(10) TO THE ASSESSEE I.E. BY TAXING THE PROFITS FROM COMMERC IAL SPACE AND ALLOWING THE REMAINING CLAIM MADE BY YOU WHEREAS THE ENTIRE CLAIM OF DEDUCTION U/S 80IB(10) WAS TO BE DISALLOWED. FOR A.Y. 2004-05 THE PROFITS FROM COMMERCIAL SPACE TO THE EXTENT OF RS.14,2 4,354/- WAS TAXED AND THE REMAINING PROFITS WERE ALLOWED TO YOU U/S 80I B(10) TO THE EXTENT OF RS. 4,95,59,276/- WHICH IS TO BE DISALLOWED . I HAVE REASON TO BELIEVE THE INCOME AMOUNTING TO RS.4,95,59,276/- HA S ESCAPED ASSESSMENT.' 2.1 THE ASSESSEE OBJECTED TO THE REOPENING OF THE A SSESSMENT ON THE GROUND THAT NOTICE U/S 148 WAS BASED ONLY ON CHANGE OF OPINION BASED ON THE SAME SET OF FACTS AND WITHOUT ANY JUDICIAL S UPPORT. THE ASSESSEE DURING THE RE-ASSESSMENT PROCEEDINGS PLACED RELIANC E ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (2011) 333 ITR 289 (BOM). THE OBJECTION TO THE REAS SESSMENT PROCEEDINGS WAS FILED BY THE ASSESSEE ON 31-10-2011 WHICH WAS RESPONDED BY THE ASSESSING OFFICER BY PASSING A SPE AKING ORDER VIDE LETTER DATED 29-11-2011. THE ASSESSING OFFICER ALS O ISSUED COMMISSION 3 U/S.131(1)(D) TO THE GOVT. REGISTERED VALUER AND TH E VALUER VIDE LETTER DATED 27-12-2011 INTIMATED THE ASSESSING OFFICER TH AT THE NECESSARY DETAILS/DOCUMENTS WERE NOT PROVIDED BY THE ASSESSEE AND A VISIT TO THE SITE WAS NOT POSSIBLE. THE ASSESSING OFFICER, THERE AFTER, SOUGHT DIRECTIONS U/S 144A FROM THE ADDL CIT, RANGE-3 PUNE VIDE LETTER DATED 23-12-2011 WHO AFTER PROVIDING DUE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE ON 26-12-2011 ISSUED DIRECTIONS U/S 144A V IDE LETTER DATED 29- 12-2011. THE ASSESSING OFFICER, THEREAFTER HOLDING THAT THE HOUSING PROJECT INCLUDED COMMERCIAL SPACE OF 4299 SQ.FT WHI CH WAS MORE THAN 2000 SQ.FT, DISALLOWED THE ENTIRE CLAIM OF DEDUCTIO N U/S 80IB(10) AMOUNTING TO RS. 4,95,59,276/-. 3. IN APPEAL THE LD.CIT(A) FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES REPORTED IN 333 ITR 289 ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE I.T. ACT. HE HOWEVER DID NOT ADJUDICATE THE GROUND RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF THE REASSESSMENT PROCEE DINGS U/S.148 OF THE I.T. ACT ALTHOUGH A SPECIFIC GROUND WAS TAKEN BEFOR E HIM. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE AS WELL AS THE ASSESSEE ARE IN APPEAL BEFORE US WITH THE FOLLO WING GROUNDS : GROUNDS BY REVENUE : 1. THE LD.CIT(A) ERRED IN ALLOWING DEDUCTION OF RS. 5,09,83,630/- U/S.80IB(10) OF INCOME TAX ACT, 1961. 2. THE LD.CIT(A) ERRED IN APPLYING THE DECISION IN B RAHMA ASSOCIATES 333 ITR 289 (BOMBAY) IGNORING THAT THE ASSESSEE HAD NOT PROVIDED THE NECESSARY DETAILS/DOCUMENTS TO THE GOVERN MENT REGISTERED VALUER FOR VERIFICATION OF THE CONDITIONS SPECIFIED IN SECTION 80IB(10) OF INCOME TAX ACT, 1961. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 4 GROUNDS BY ASSESSEE : 1. THE LD.CIT(A) ERRED IN LAW IN NOT ADJUDICATING AND DISMISSING THE GROUND THAT THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION U/S.148 OF THE INCOME TAX ACT, 1 961. 2. THE LD.CIT(A) ERRED IN LAW IN NOT ADJUDICATING AND DISMISSING THE GROUND THAT THE ASSESSING OFFICER FURTHER ERRED IN LAW AND ON FACTS IN NOT PASSING A SPEAKING ORDER AGAINST THE OBJECTIONS RAISED TO THE REASSESSMENT PROCEEDINGS. 3. THE RESPONDENT CRAVES LEAVE TO ADD, OR TO ALTER OR MODIFY ANY OF THE GROUNDS OF APPEAL, IF DEEMED NECESSARY. 5. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 AND THEREFORE THE VIEW TAKEN BY TH E TRIBUNAL IN THE SAID DECISION HAS TO BE FOLLOWED FOR THIS YEAR ALSO . THE LD. DEPARTMENTAL REPRESENTATIVE ALSO AGREED FOR THE ABO VE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. 6. AFTER HEARING BOTH THE SIDES, WE FIND THE TRIBUN AL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 VIDE ITA NO.368/PN/2013 & CO.12/PN/2014 ORDER DATED 26-06-2014 HAS DISMISSED THE APPEAL FILED BY THE REVENUE AND CO FILED BY THE ASSESSEE BY OBSE RVING AS UNDER : 6. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING OF CIT( A) BECAUSE HE HAS DECIDED THE ISSUE BY FOLLOWING THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) WHICH HAS BEEN DELIVERED ON THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE. THE REST RICTION OF COMMERCIAL SPACE HAS BEEN INSERTED IN THE STATUTE BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 01.04.2005 IN TERMS OF CLAUSE (D) T O SECTION 80IB(10) CANNOT BE APPLIED TO THE PROJECTS WHICH HAVE COMMENCE D PRIOR TO 01.04.2005. IN OUR OPINION, THE AFORESAID PROPOSITION L AID DOWN BY THE HONBLE HIGH COURT COVERS THE CONTROVERSY BEFORE US AS THE PROJECT IN QUESTION HAS COMMENCED PRIOR TO 01.04.2005 AND ALSO S TAND COMPLETED BEFORE THE PRESCRIBED DATE. IN VIEW OF THIS NEWLY INSE RTED CLAUSE (D) TO SECTION 80IB(10) COULD NOT BE INVOKED TO DISENTITLE THE ASSESSEE FROM CLAIMING DEDUCTION U/S.80IB(10) OF THE ACT FOR A.Y. 20 05-06. ACCORDINGLY, THE ORDER OF CIT(A) ON THIS ISSUE NEEDS N O INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 5 6.1 THE LEARNED AUTHORIZED REPRESENTATIVE HAS RAISED THE GROUNDS BY WAY OF FILING CROSS OBJECTIONS WITH REGARD TO RE-OPENING OF THE CASE. SINCE WE HAVE DECIDED THE ISSUE ON MERIT IN FAVOUR OF TH E ASSESSEE, THE ISSUE OF RE-OPENING GOING ACADEMIC AND THE SAME MAY BE AGITATED AS PER LAW AS AND WHEN IT IS REQUIRED. SO, WE DISMISS THE CROS S OBJECTIONS AS ACADEMIC. 7. IN RESULT, THE REVENUES APPEALS AS WELL AS CROS S OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. 6.1 RESPECTFULLY FOLLOWING THE ORDER OF THE COORDIN ATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 TH E APPEAL FILED BY THE REVENUE AND CO FILED BY THE ASSESSEE ARE DISMIS SED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE A ND CO FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 08-07-2014. SD/- SD/- (R.S. PADVEKAR) (R.K. PAND A) JUDICIAL MEMBER ACCOUN TANT MEMBER PUNE DATED: 08 TH JULY, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE