DCIT, Nanded V. M/s. Sai Developers, Latur

ITA 1020/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9718 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 11-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIB JAIN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.1020/PN/2011 (ASSTT. YEAR : 2008-09) DCIT, CIRCLE-3, NANDED. .. APPELLANT VS. M/S.SAI DEVELOPERS, KARWA COMPLEX, M.G.ROAD, LATUR. .. RESPONDENT PAN: AAUFS6302B ASSESSEE BY : SHRI KISHORE PHADKE DEPARTMENT BY : SHRI RAJIB JAIN DATE OF HEARING : 24.08.2012 DATE OF PRONOUNCEMENT : 28.08.2012 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON THE FOLLOWING GROUNDS: 1. THE HON'BLE CIT(A), AURANGABAD, HAS ERRED IN DELETI NG THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F 80IB(10) OF RS.1,29,37,649/- SINCE THE PROJECT WAS NOT COMPL ETED WITHIN THE STIPULATED PERIOD. THE ASSESSEE HAS NOT CONSTRUCTED BUILDING ON PLOT NO.47. 2. THE HON'BLE CIT(A) HAS ERRED IN IGNORING THE FACT T HAT CLAUSE(E) IS INSERTED IN SUB-SECTION (10) OF SECTION 80IB BY THE FINANCE (NO.2) ACT, 2009 W.E.F. 01.04.2010 WHICH STATES AS UNDER: (E) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUS ING PROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELO PERS. THE ASSESSEE FIRM HAS CONSTRUCTED A HOUSING PROJECT AS PER THE COMMENCEMENT CERTIFICATES DATED 22.10.2003 AND 23.0 3.2005. THE TOTAL AREA OF LAND OF THE HOUSING PROJECT IS 14744 SQ.MTRS. THE HOUSING PROJECT WAS COMPLETED AS PER VARIOUS OCCUPA NCY 2 CERTIFICATES DATED 05.03.2005, 08.05.2006, 07.02.20 07 AND 28.03.2008 ISSUED BY MUNICIPAL CORPORATION OF LATUR AS PER OCCUPANCY CERTIFICATES ISSUED FOR VARIOUS RESIDENTI AL UNITS IN THE PROJECT. THE ASSESSEE HAS FILED RETURN OF INCOME O N 13.09.2008 DECLARING INCOME OF RS.18,12,910/- AFTER CLAIMING D EDUCTION U/S.80IB OF RS.1,29,37,649/-. THE ASSESSING OFFICE R HAS THE ASSESSED INCOME OF THE ASSESSEE AT RS.1,47,61,559/- AFTER DISALLOWING DEDUCTION U/S.80IB(10) CLAIMED BY THE A SSESSEE AT RS.1,25,37,649/- STATING THAT THE PROJECT HAS NOT B EEN COMPLETED UPTO 31.03.2008. MATTER WAS CARRIED BEFORE THE FIR ST APPELLATE AUTHORITY WHEREIN THE CIT(A) ALLOWED THE CLAIM OF T HE ASSESSEE FOLLOWING THE REASONING IN ASSESSEES OWN CASE FOR A.YS. 2006-07 AND 2005-06 BY OBSERVING AS UNDER: 5.1. THE A.O. HAS DISALLOWED THE DEDUCTION U/S.80 IB(10) OF THE ACT CLAIMED BY THE APPELLANT STATING FOLLOWI NG REASONS IN THE CONCLUDING PARA OF THE ASSESSMENT ORDER: 5. THE COUNSEL HAS STATED THAT THE PLOT NO.47 IS S TILL VACANT AND STATED THAT THE ASSESSEE HAS OBTAINED NO C FOR KEEPING VACANT OF PLOT NO.47 OF THIS PROJECT. T HE ASSESSEE HAS NOT SUBMITTED REVISED PLAN OF PROJECT FOR APPROVAL OF MUNICIPAL COUNCIL, LATUR. THE NOC IS N OT REVISED APPROVAL FOR CHANGES IN ORIGINAL PLAN. THE REFORE, THE ASSESSEE HAS NOT FULFILLED THE CONDITION LAID D OWN IN SECTION FOR DEDUCTION U/S.80IB(10) OF THE ACT, 1961 . HENCE THE DEDUCTION CLAIMED U/S.80IB IS HEREBY DISALLOWED. 5.2. THE FACTS OF THE CASE FOR THE YEAR UNDER APPEA L AND THAT FOR THE A.Y. 2006-07 AND FOR A.Y. 2005-06 ARE IDENT ICAL. MY PREDECESSOR HAS DECIDED THE ALLOWABILITY OF DEDUCTI ON U/S.80IB(10) OF THE ACT IN THE CASE OF THE APPELLAN T FOR A.Y. 2006-07 VIDE ORDER BEARING NO.ABD/CIT(A)/224/2008-2 009 DATED 18/10/2010. THE RELEVANT PORTION OF THE SAID ORDER IS REPRODUCED BELOW: I HAVE CONSIDERED FACTS OF THE CASE, SUBMISSION OF THE AR AND POSITION OF LAW, IN MY OPINION, THE APPELLANT DESERVES TO SUCCEED. TAX INCENTIVE ALLOWED BY THE LEGISLATIVE BY WAY OF DEDUCTION U/S.80IB(10) OF THE I.T. ACT, 1961 IS PREDOMINANTLY FOR THE PURPOSE OF AUGMENTING AFFORDA BLE DWELLING UNITS AND IT MUST BE INTERPRETED IN THE LI GHT OF ITS INTENTION. ALL THE PRE-CONDITIONS LAID DOWN FO R 3 ALLOWABILITY OF AFORESAID DEDUCTION WAS STRICTLY AD HERED BY THE APPELLANT IN THIS CASE. IN VIEW OF ABOVE TH E AO WAS NOT JUSTIFIED IN REJECTING THE APPELLANTS CLAI M OF DEDUCTION MERELY ON THE GROUND THAT BY KEEPING PLOT NO.47 VACANT, THE APPELLANT DEVIATED FROM THE PLAN APPROVED BY THE MUNICIPAL AUTHORITIES. WHILE DEDUC ING SO, THE AO COMPLETELY IGNORED THE FACT THAT THE PLO T WAS KEPT VACANT AFTER TAKING NOC FROM THE LOCAL AUTHORI TY AND EVEN OTHERWISE SUCH MINOR VARIATION FROM APPROV ED BUILDING PLAN CANNOT BE TREATED AS VIOLATION OF ANY OTHER CONDITIONS FULFILLING THE REQUIREMENT OF SECTION 80 IB OF THE I.T. ACT, 1961. FOR COMPLETION OF PROJECT, CONSTRUCTION OF INDIVIDUAL BUILDING IS NOT RELEVANT . VIDE ITS LETTER DATED 05.11.2003, THE MUNICIPAL CORPORAT ION OF LATUR CATEGORICALLY STATED THAT IT HAS NO OBJECTION IN KEEPING THE PLOT NO.47 VACANT AND UNCONSTRUCTED. SUBSEQUENT TO THE NOC, MUNICIPAL CORPORATION, LATUR ISSUED OCCUPANCY CERTIFICATES IN RESPECT OF VARIOUS BUNGALOWS CONSTRUCTED BY THE APPELLANT. THE AFORESA ID FACT CLEARLY SHOWS THAT THE PROJECT WAS CONSTRUCTED AFTER TAKING DUE APPROVAL FROM THE MUNICIPAL AUTHORITY AN D THE SAME WAS COMPLETED WITHIN THE STIPULATED PERIOD . NO COMPLETION CERTIFICATE IN RESPECT OF PLOT NO.47 IS PENDING WITH THE MUNICIPAL CORPORATION AND THE AFORESAID PL OT WAS HANDED OVER TO THE OWNER AND THE APPELLANT HAS NO CONTROL OVER IT. SO FAR THE APPELLANT IS CONCERNED, THE PROJECT IS COMPLETE, SOLD OUT AND HANDED OVER TO TH E OWNERS. THEREFORE, THE AO WAS NOT JUSTIFIED IN DENY ING THE BENEFIT OF DEDUCTION U/S 80IB(10) ON THE GROUND THAT THE PLOT NO.47 WAS KEPT VACANT. IN VIEW OF THE ABOV E IN MY OPINION THE DEDUCTION U/S 80IB(10) OF THE I.T. A CT, 1961 IS AVAILABLE TO THE APPELLANT AND THE AO IS, THEREFORE, DIRECTED TO ALLOW THE APPELLANT'S CLAIM OF DEDUCTION AMOUNTING TO RS.33,75,201/-. 5.3 THE FACTS ARE IDENTICAL FOR THE YEAR UNDER CONS IDERATION. THE DECISION GIVEN BY MY PREDECESSOR VIDE HIS ORDER DATED 18/01/2010 FOR THE AY.2006-2007 APPLIES WITH EQUAL FORCE IN THE AY.2008-09 FOR THE REASONS MENTIONED THEREIN. T HEREFORE, THE A.O. IS DIRECTED TO ALLOW THE APPELLANT'S CLAIM OF DEDUCTION U/S.80IB(L0) AMOUNTING TO RS.1,29,37,649/- IN AY 20 08-09 ALSO. 3. IN A.Y. 2006-07, THE TRIBUNAL HAS DECIDED THE IS SUE IN FAVOUR OF ASSESSEE BY DISMISSING THE REVENUES APPEAL, BY OBSERVING AS UNDER: 3. THERE IS NO DISPUTE ON THE MATERIAL FACT THAT P LOT NO.47 WAS KEPT VACANT AFTER TAKING NOC FROM THE LOCAL AUT HORITY VIDE THEIR LETTER DATED 5.11.2003 AND SUBSEQUENT TO THE NOC, 4 MUNICIPAL CORPORATION, LATUR, HAD ISSUED OCCUPANCY CERTIFICATES IN RESPECT OF VARIOUS BUNGALOWS CONSTR UCTED BY THE ASSESSEE. THUS, IN OUR VIEW, THE LD. CIT(A) HAS RI GHTLY COME TO THE CONCLUSION THAT THE PROJECT WAS CONSTRUCTED AFT ER TAKING DUE APPROVAL FROM THE MUNICIPAL AUTHORITY AND THE S AME WAS COMPLETED WITHIN THE STIPULATED PERIOD. UNDER THES E CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFE RE WITH THE FIRST APPELLATE ORDER ON THE ISSUE THAT THE AO WAS NOT JUSTIFIED IN DENYING THE BENEFIT OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT PLOT NO.47 WAS KEPT VACANT. THE FIRST APPELLA TE ORDER IN THIS REGARD IS THUS UPHELD. THE GROUND IS ACCORDIN GLY REJECTED. IN RESULT, APPEAL IS DISMISSED. 4. THE FACTS BEING SIMILAR, FOLLOWING SAME REASONIN G, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING OF THE CIT(A ) WHO HAS ALLOWED THE DEDUCTION U/S.80IB(10) OF THE ACT. SAME IS UPHE LD. 5. AS A RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF AUGUST, 2012. SD/- SD/- ( R.K.PANDA ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 28 TH AUGUST, 2012 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DCIT, CIRCLE-3, NANDED. 3. THE CIT(A), AURANGABAD. 4. THE CIT, AURANGABAD. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.