Income tax Officer, Pune V. M/s. Nirmitee & Associates, Pune

ITA 1050/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2489 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 26-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: IS DIRECTED AGAINS T PASSED

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH C, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER . / ITA NO.1050/PUN/2017 / ASSESSMENT YEAR : 2012-13 ITO, WARD-12(1), PUNE VS. M/S. NIRMITEE & ASSOCIATES, 8 NAMJOSHI BHAVAN, LBS ROAD, NAVI PETH, PUNE 411 030 PAN : AAGFN2080H (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PA SSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-5, PUNE ON 09 -12-2016 IN RELATION TO THE ASSESSMENT YEAR 2012-13. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE DIRECTION OF THE LD. CIT(A) TO ALLOW DEDUCTION U/S.80IB(10) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT) ON PRO-RATA BASIS. ASSESSEE BY SHRI V. JAYRAMAN REVENUE BY SHRI PANKAJ GARG DATE OF HEARING 03-09-2019 DATE OF PRONOUNCEMENT 04-09-2019 ITA NO.1050/PUN/2017 M/S. NIRMITEE & ASSOCIATES 2 3. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FIR M IS ENGAGED IN THE ACTIVITY OF PROMOTERS AND BUILDERS. DURING THE YEAR UNDER CONSIDERATION, IT CARRIED OUT CONSTRUCTION OF A HOUSING PROJECT, NAMELY NIRMITI ZION, S.NO.36/3 AND 36/4, BALEWADI, PUNE. TH E ASSESSEE CLAIMED DEDUCTION U/S. 80IB(10) AMOUNTING TO RS.4,36,38,861/-. TO VERIFY THE ELIGIBILITY OF CLAIM OF DEDU CTION, THE GOVERNMENT APPROVED VALUER WAS COMMISSIONED BY THE AO TO CONDUCT AN ENQUIRY OF THE AFORESAID PROJECT VIS-A-VIS THE PROVISIONS OF SECTION 80IB(10). THE VALUER SUBMITTED HIS REPORT STATING THA T TWO DUPLEX FLATS BEARING NOS. 901 AND 902 WERE HAVING AREAS OF 2609.48 SQ.FT. AS AGAINST THE PROVISIONS OF SECTION 80IB(10) PROVIDIN G FOR AREA OF A RESIDENTIAL UNIT LOCATED IN CITIES OTHER THAN MUMBAI AND DELHI AT LESS THAN 1500 SQ.FT. THE ASSESSEE WAS CONFRONTED WITH TH E REPORT. IN ITS OBJECTIONS, AND IN THE ALTERNATE, THE ASSESSEE SUBMITTED THAT THE DEDUCTION SHOULD BE ALLOWED ON PROPORTIONATE BASIS. NOT CONV INCED, THE AO DENIED THE BENEFIT OF FULL AMOUNT OF DEDUCTION U/S.80IB (10) AT RS.4.36 CRORE. THE LD. CIT(A) HELD THAT PROPORTIONATE DED UCTION SHOULD BE ALLOWED IN RESPECT OF THE ELIGIBLE FLATS AFTER EXCLUDIN G THE PROFITS OF NON-ELIGIBLE FLATS. THE REVENUE HAS APPROACHED THE TRIBUNAL AGAINST THIS FINDING. 4. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELE VANT MATERIAL ON RECORD. THERE IS NO DISPUTE ON THE FACT THAT T HE ASSESSEE IS ITA NO.1050/PUN/2017 M/S. NIRMITEE & ASSOCIATES 3 OTHERWISE ELIGIBLE FOR DEDUCTION U/S.80IB(10) OF THE ACT FULFILLIN G ALL THE STIPULATED REQUIREMENTS. THE AO DENIED THE BENEFIT OF DED UCTION FOR THE ENTIRE AMOUNT OF DEDUCTION U/S.80IB(10) ONLY ON THE GROUND THAT OUT OF THE TOTAL PROJECT, ONLY TWO FLATS ADMEASURED MORE THAN THE STIPULATED 1500 SQ.FT. AREA. BUT FOR THAT, THERE IS NO OBJECT ION OF THE AO TO ANY OF THE CONDITIONS STIPULATED IN SECTION 80IB(10). IN THIS REGARD, IT IS OBSERVED THAT THE LD. CIT(A) IN HOLDING FOR THE PROPORTIO NATE DEDUCTION HAS RELIED ON SEVERAL DECISIONS INCLUDING THE ORDER OF THE MUMBAI TRIBUNAL IN M/S. SUNCITY HOUSING VS. ACIT IN ITA NO.5183/MUM/2014 DATED 30-05-2016 AND ANOTHER DECISION OF PUNE BENCH IN THE CASE OF DCIT VS. SAI DRISHTI CONSTRUCTION IN ITA NO.991/PUN/2014, DATED 15-02-2016 . NO CONTRARY DECISION HAS BEEN BROUGHT ON RECORD BY THE LD. DR. SINCE THE IMPUGNED ORD ER IS BASED ON SEVERAL TRIBUNAL ORDERS GRANTING DEDUCTION U/S.80IB(10) ON PROPORTIONATE BASIS, RESPECTFULLY FOLLOWING THE PRECEDENTS, WE APPROVE THE ACTION OF THE LD. CIT(A). 5. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH SEPTEMBER, 2019. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 04 TH SEPTEMBER, 2019 ITA NO.1050/PUN/2017 M/S. NIRMITEE & ASSOCIATES 4 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-5, PUNE 4. 5. 6. THE PR.CIT-4, PUNE , , / DR C, ITAT, PUNE; / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 03-09-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 03-09-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *