Modi Builders & Realtors Pvt.Ltd., Hyd, Hyderabad V. ITO, Ward-16(1), Hyd, Hyderabad

ITA 1067/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6024 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: S RAMA RAO
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.1067/HYD/2016 ASSESSMENT YEAR 2010-2011 MODI BUILDERS & REALTORS P. LTD., HYDERABAD. PAN AACCM2490D VS. THE INCOME TAX OFFICER, WARD-16(1), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO FOR REVENUE : SMT. SUMAN MALIK DATE OF HEARING : 16.11.2016 DATE OF PRONOUNCEMENT : 16.11.2016 ORDER PER D. MANMOHAN, V.P. THIS APPEAL IS FILED AT THE INSTANCE OF THE ASSESSEE- COMPANY AND IT PERTAINS TO THE A.Y. 2010-2011. THOUGH TH E ASSESSEE HAS RAISED AS MANY AS 05 GROUNDS, THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WITH REGARD TO THE DEDUCTION ELIGIBLE UNDER SECTION 80IB OF THE I.T. ACT. FOR THE SAKE OF CO MPLETENESS, THE GROUNDS URGED BEFORE US ARE EXTRACTED HEREUNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TA X (APPEALS) IS ERRONEOUS TO THE EXTENT IT IS PREJUDIC IAL TO THE APPELLANT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN CONFIRMING DISALLOWANCE OF DEDUCTION CLAIMED UND ER SECTION 80IB OF RS.25,15,728/-. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN HOLDING THAT THE BUILT UP AREA OF EACH HOUSE IS MORE 2 ITA.NO.1067/HYD/2016 MODI BUILDERS & REALTORS P. LTD., HYDERABAD. THAN 1500 SQ. FT., WHEN ALL THE HOUSES ARE OF THE A REA OF LESS THAN 1500 SQ. FT. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE SEEN THAT THE OPEN TERRACE AND OPEN PORTICO CANNOT FORM PART OF THE BUILT UP AREA FOR THE PURPOSE OF SEC.80IB(10) AND IF THE OPEN TERRACE WERE TO BE EXC LUDED, THE BUILT UP AREA IS LESS THAN 1500 SQ. FT EACH AND THE APPELLANT IS ENTITLED FOR DEDUCTION U/S 80LB OF THE I.T. ACT. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2. THE ASSESSEE-COMPANY IS ENGAGED IN REAL ESTATE BUSINESS AND IT HAS UNDERTAKEN DEVELOPMENT OF CERTAIN RESIDENTIAL HOUSING PROJECTS. DURING THE PREVIOUS YEA R RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE COMPANY DE RIVED PROFITS FROM THREE HOUSING PROJECTS AND CLAIMED DEDUC TION THEREFROM ON THE GROUND THAT THE ABOVE HOUSING PROJECTS FULFILLED THE STIPULATIONS PROVIDED UNDER SECTION 80IB(10) OF THE ACT. 3. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDI NGS THE ASSESSING OFFICER OBSERVED THAT ONE OF THE CONDITIO NS PRESCRIBED UNDER SECTION 80IB(10) OF THE ACT IS WITH RE GARD TO THE BUILT-UP AREA OF EACH PLOT I.E., THE RESIDENTIAL UNIT EXCEED 1000 SQ. FEET OF BUILT-UP AREA WHERE SUCH RESIDENTIAL UNI T IS SITUATED IN MUMBAI OR DELHI AND 1500 SQ. FEET AT ANY OTHER PLACE. THE ASSESSING OFFICER NOTICED THAT THE BUILT-UP OF THE PR OJECT OF GREENWOODS AND SUNSHINE PARK WAS IN EXCESS OF 1 500 SQ. FEET. IDENTICAL ISSUE WAS CONSIDERED BY THE ASSESSING OFFIC ER IN A.YS. 2007-08 TO 2009-10 AND FOR THE REASONS GIVEN THEREIN THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE IS NOT E LIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 3 ITA.NO.1067/HYD/2016 MODI BUILDERS & REALTORS P. LTD., HYDERABAD. 4. THE CASE OF THE ASSESSEE ON THE OTHER HAND WAS THAT PORTICO AND OPEN TERRACE AREA NEEDS TO BE EXCLUDED IN COMPUTING THE BUILT-UP AREA. RELIANCE WAS ALSO PLACED ON THE DE CISION OF ITAT, AHMEDABAD BENCH IN THE CAASE OF YUG CORPORATIO N. THE ASSESSING OFFICER WAS HOWEVER OF THE OPINION THAT THE AFORECITED CASE IS DISTINGUISHABLE ON FACTS INASMUCH AS IT IS A P ROJECT INVOLVING MULTIPLE FLOOR CONSTRUCTION, WHEREAS IN THE PRESENT CASE THE PROJECT INVOLVE CONSTRUCTION OF INDEPENDENT HOUSING/ UNITS AND PROJECTIONS AND PARKINGS ARE EXCLUSIVE OF EACH U NIT AND ARE NOT COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNITS I N WHICH EVENT THEY SHOULD BE TREATED AS PART OF THE BUILT-UP AR EA. 5. ON AN APPEAL FILED BY THE ASSESSEE, THE LD. CIT( A) OBSERVED THAT IN ASSESSEES OWN CASE FOR THE A.Y. 2008 -09 THE ITAT, HYDERABAD BENCHES CONFIRMED THE ADDITION MADE B Y THE ASSESSING OFFICER AND THE FACTS BEING IDENTICAL THE O RDER PASSED BY THE ASSESSING OFFICER WAS CONFIRMED. 6. FURTHER AGGRIEVED, THE ASSESSEE-COMPANY IS IN APP EAL BEFORE US. THE LEARNED COUNSEL FOR THE ASSESSEE FAI RLY ADMITTED THAT THE ITAT, HYDERABAD BENCHES, IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS, HAD TAKEN A VIEW IN FAVOUR OF THE R EVENUE AND ALSO PLACED COPIES OF THE ORDERS PASSED BY ITAT, HYD ERABAD BENCHES. HE HAS FILED WRITTEN SUBMISSIONS TO SUBMIT THAT THE COMPANY CONSTRUCTED VILLAS OF LESS THAN 1500 SQ. FEET AND EVEN THE PAYMENT OF MUNICIPAL TAX ETC., DEPICT THAT EACH VILLA IS LESS THAN 1500 SQ. FEET. IT WAS ALSO SUBMITTED THAT THE EXPRESSI ON BUILT-UP AREA MEANS THE INTERIOR MEASUREMENTS OF TH E RESIDENTIAL UNIT AND PARKINGS AND COMMON AREAS SHOUL D NOT BE TAKEN INTO CONSIDERATION. HE HAS ALSO RELIED UPON SEVE RAL CASE LAW 4 ITA.NO.1067/HYD/2016 MODI BUILDERS & REALTORS P. LTD., HYDERABAD. IN THIS REGARD IN SUPPORT OF HIS CONTENTION THAT OPEN TE RRACE AREA CANNOT BE CONSIDERED AS BUILT-UP AREA AND CAR PARKIN G CANNOT BE CONSIDERED AS PART OF BUILT-UP AREA. 7. ON THE OTHER HAND, THE LD. D.R. STRONGLY RELIED UP ON THE ORDER PASSED BY THE ITAT (ITA.NO.1566/HYD/2013 AN D BATCH DATED 29.01.2016) WHEREIN THE BENCH OBSERVED THAT THE NO RMAL MEANING OF BUILT-UP AREA BUT FOR THE DEFINITION INCLU DE PROJECTION AND BALCONY, WOULD DEFINITELY EXCLUDE THE LATTER. THE REFORE, THERE CAN BE NO DOUBT THAT PRIOR TO THE INTRODUCTION OF THE DEF INITION, BUILT-UP AREA MAY NOT INCLUDE PROJECTION AND PARKING BUT AFTER THE ENACTMENT BUILT-UP INCLUDES BOTH PROJECTION AND BAL CONIES AS INCREASED BY THE THICKNESS OF THE WALL BUT IT DOES NOT I NCLUDE COMMON AREAS THAT HAS TO BE SHARED WITH OTHERS. BY AP PLYING THE ABOVE LOGIC, THE TRIBUNAL UPHELD THE VIEW TAKEN BY THE ASSESSING OFFICER. CONSISTENT VIEW TAKEN BY THE ITAT, HYDERABAD BENCHES APPEARS TO HAVE BEEN CHALLENGED BEFORE THE JURISDICTI ONAL HIGH COURT. TILL THE DECISION OF THE JURISDICTIONAL BENCH IS REVERSED THE ORDER OF THE ITAT DESERVES TO BE FOLLOWED FOR THE SAKE OF CONSISTENCY. UNDER THESE CIRCUMSTANCES, WE UPHOLD THE O RDER OF THE CIT(A) AND DISMISS THE APPEAL FILED BY THE ASSESSE E-COMPANY. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2016. SD/- SD/- (B.RAMAKOTAIAH) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED 16 TH NOVEMBER, 2016. VBP/- 5 ITA.NO.1067/HYD/2016 MODI BUILDERS & REALTORS P. LTD., HYDERABAD. COPY TO 1. MODI BUILDERS & REALTORS P. LTD., HYDERABAD. C/O. SHRI S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYA S ELEGANCE, 3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERAB AD. 2. THE INCOME TAX OFFICER, WARD-16(1), INCOME TAX T OWERS, A.C. GUARDS, HYDERABAD. 3. CIT(A)-4, 2 ND FLOOR A BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABAD 500 004. 4. PR. CIT-4, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE.