ACIT, Pune V. Shri SANJAY D BHUJBAL, Pune

ITA 1104/PUN/2012

• Counselvise Citation: 110424514 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: VIPIN GUJRATHI
• Keywords: Competent authority; Non passing of speaking order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1104/PN/2012 A.Y. 2008-09 ACIT, CIRCLE 4, PUNE APPELLANT VS. SHRI SANJAY D. BHUJBAL TALEGAON DHAMDHERE, TAL SHIRUR, PUNE - 412208 PAN: AARPB9159L RESPONDENT APPELLANT BY : SHRI P.L. P ATHADE RESPONDENT BY : SHRI VIP IN GUJRATHI DATE OF HEARING: 13.02.2014 DATE OF ORDER : 19.02.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-II, [SHORT C IT(A)-II] PUNE, DATED 20.01.2012 FOR A.Y. 2008-09 ON THE FOLLOWING GROUNDS. 1) THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN ALLOWING THE DEDUCTION OF 31,01,075/- CLAIMED BY THE ASSESSEE U/S 80IB(10) INSTEAD OF CON FIRMING THE ORDER OF THE ASSESSING OFFICER. 3) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN HOLDING THAT THE DEDUCTION UNDER S ECTION 80IB(10), IS ADMISSIBLE IN THE CASE OF 'HOUSING PRO JECT' WHERE AREA OF THE CONSTRUCTION IS LESS THAN 1 ACRE. 2 4) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN ACCEPTING THE ASSESSEE'S PLEA THAT THE AREA MEANT FOR ROAD WIDENING, AMENITIES SPACE ETC. SHOUL D BE CONSIDERED AS PART OF THE PROJECT. 5) WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRE D IN NOT TAKING INTO ACCOUNT THE TWO OTHER DISCR EPANCIES POINTED OUT BY THE ASSESSING OFFICER VIZ EXISTENCE OF A BUILDING PRIOR TO THE APPROVAL DT.24.05.2006 BY THE TOWN PLANNING DEPARTMENT, SHOWN AS PHASE I BUILDING OF T HE ASSESSEE'S PROJECT AND NON-PRODUCTION OF COMMENCEME NT CERTIFICATE IN RESPECT OF THE IMPUGNED PROJECT. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN NOT ADJUDICATING ON THESE ISSUES IN ANY MANNER IN THE A PPELLATE ORDER. 6) IN VIEW OF THE ABOVE GROUND, THE LEARNED COMMISSION ER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN FAILING TO AP PRECIATE THAT SINCE THERE WAS ALREADY AN EXISTING BUIL DING, THE APPROVAL DT. 24.05.2006 TO THE ASSESSEE'S P ROJECT COULD NOT BE TREATED AS AN APPROVAL TO AN ALTOGETHER NEW PROJECT. 7) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN FAILING TO APPRECIATE THAT NO COMP LETION CERTIFICATE HAD BEEN OBTAINED BY THE ASSESSEE IN RE SPECT OF HIS PROJECT AS WAS REQUIRED AS PER THE EXPLANATION (II) TO SEC. 80 IB(10)(A) OF THE INCOME-TAX ACT, 1961. 8) FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF THE HEARING, THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME-TAX (APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 9) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 2. THE ASSESSEE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS AS OF DEALING IN AGRICULTURAL EQUIPMENTS S UCH AS PVC PIPES, ELECTRICAL MOTOR AND PUMP SETS UNDER THE NAM E AND STYLE 'SHREENATH MACHINERY STORES' AT TALEGAON DHAMDHERE, PUNE. THE ASSESSEE IS ALSO ENGAGED IN THE BUSINESS OF BUILDIN G CONSTRUCTION UNDER THE NAME AND STYLE 'SANJAY BHUJBAL BUILDING C ONSTRUCTION & DEVELOPER'. DURING THE ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUC TION U/S 80IB(10) OF THE IT. ACT, 1961. IN RESPONSE TO THE Q UERY OF 3 ASSESSING OFFICER, THE ASSESSEE EXPLAINED THE ELIGI BILITY FOR THE CLAIM OF DEDUCTION U/S 80IB(10) AND SUBMITTED THAT THE RESIDENTIAL PROJECT WAS ON A PLOT OF LAND ADMEASURI NG 8500 SQ. MTS. HOWEVER, THE ASSESSING OFFICER AFTER REFERRIN G TO THE LAYOUT OF THE PROJECT 'KSHITIJ VIHAR' CONCLUDED THAT THE A SSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10) AS THE AREA OF PLOT NO.1 ON WHICH THE ASSESSEE WAS CONSTRUCTING THE RESIDENTIAL HOUSING PROJECT WAS LESS THAN 1 ACRE AND ALSO THE ASSESSEE HAD NOT FURNISHED THE COMMENCEMENT CERTIFICATE OF THE PROJE CT FROM THE TOWN PLANNING AUTHORITY AND THE COMPETENT AUTHORITY DID NOT ISSUE COMPLETION CERTIFICATE OF THE PROJECT UNDER C ONSIDERATION. THUS, HE DISALLOWED THE CLAIM U/S.80IB(10) AMOUNTIN G TO 31,01,705/-. 3. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY, WHEREIN, THE CLAIM OF THE ASSESSEE WAS ALLOWED. TH E SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE. THE FI RST OBJECTION IS WITH REGARD TO THE ADMISSIBILITY OF CLAIM U/S.80 IB(10) TO THE AREA OF PLOT. THE MAIN ISSUE BEFORE CIT(A) WAS THA T WHETHER NET AREA OF 4015 SQ. MTRS. WAS AVAILABLE FOR THE PURPOS E OF CONSTRUCTION AND SAME SHOULD BE CONSIDERED OR THE GROSS AREA AFTER INCLUDING THE PROPORTIONATE AREA OF OPEN SPAC E, AMENITIES, ROAD WIDENING ETC. FOR THE PURPOSE OF ARRIVING AT T HE FIGURE OF TOTAL AREA OF 1 ACRE AS PER THE PROVISIONS OF SECTION 80I B(10)(B). THE ITAT, PUNE IN THE CASE OF BUNTY BUILDER VS. ITO (20 10) 127 ITD 286 (PUN) HELD THAT THE AREA OF AMENITY SPACE COMPU LSORILY REQUIRED TO BE HANDED OVER TO MUNICIPAL AUTHORITIES BY THE ASSESSEE CONSTITUTES AN INTEGRAL PART OF THE HOUSIN G PROJECT AND HENCE THE SAME IS REQUIRED TO BE CONSIDERED WHILE C ALCULATING THE ONE ACRE AREA OF PLOT OF LAND OF THE HOUSING PROJEC T FOR THE PURPOSES OF DEDUCTION U/S.80IB(10). NOTHING CONTRA RY WAS BROUGHT IN THIS REGARD, SO CIT(A) WAS JUSTIFIED IN ALLOWING THE CLAIM ON THIS ACCOUNT BY FOLLOWING THE RATIO OF BUN TY BUILDER. 4 4. REGARDING OTHER ISSUES RAISED BY REVENUE ARE THA T CIT(A) HAS ERRED IN NOT TAKING INTO ACCOUNT THE TWO OTHER DISCREPANCIES POINTED OUT BY THE ASSESSING OFFICER VIZ. EXISTENCE OF A BUILDING PRIOR TO THE APPROVAL DT. 24.05.2006 BY THE TOWN PL ANNING DEPARTMENT, SHOWN AS PHASE I BUILDING OF THE ASSESS EE'S PROJECT AND NON-PRODUCTION OF COMMENCEMENT CERTIFICATE IN R ESPECT OF THE IMPUGNED PROJECT. THE ISSUE OF EXISTENCE OF BU ILDING HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONB LE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VANDANA PROPERTIE S, WHEREIN IT WAS HELD THAT THE ASSESSEE, SUBJECT TO FULFILLING O THER CONDITIONS BECOMES ENTITLED TO DEDUCTION U/S.80IB(10) ON THE C ONSTRUCTION OF HOUSING PROJECT ON A PLOT HAVING AREA OF ONE ACR E IRRESPECTIVE OF THE FACT THAT THERE EXIST OTHER HOUSING PROJECTS OR NOT. WE UPHOLD THE ORDER OF CIT(A) ON THIS ACCOUNT AS WELL. 5. REGARDING THE REVENUES TWO OTHER OBJECTIONS I.E . NON PRODUCTION OF COMMENCEMENT CERTIFICATE IN RESPECT O F THE IMPUGNED PROJECT AND IN THE ABSENCE OF COMPLETION C ERTIFICATE, WE FIND THAT THIS ISSUE HAS BEEN SPECIFICALLY RAISED B Y THE REVENUE IN GROUNDS OF APPEAL WHICH READS AS UNDER: WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMIS SIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN NOT T AKING INTO ACCOUNT THE TWO OTHER DISCREPANCIES POINTED OUT BY THE ASSESSING OFFICER VIZ EXISTENCE OF A BUILDING PRIOR TO THE APPROVAL DT.24.05.2006 BY THE TOWN PLANNING DEPART MENT, SHOWN AS PHASE I BUILDING OF THE ASSESSEE'S PROJECT AND NON- PRODUCTION OF COMMENCEMENT CERTIFICATE IN RESPECT O F THE IMPUGNED PROJECT. THE LEARNED COMMISSIONER OF INCOM E-TAX (APPEALS) GROSSLY ERRED IN NOT ADJUDICATING ON THES E ISSUES IN ANY MANNER IN THE APPELLATE ORDER. IN VIEW OF THE ABOVE GROUND, THE LEARNED COMMISSION ER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN FAILING TO AP PRECIATE THAT SINCE THERE WAS ALREADY AN EXISTING BUIL DING, THE APPROVAL DT. 24.05.2006 TO THE ASSESSEE'S P ROJECT COULD NOT BE TREATED AS AN APPROVAL TO AN ALTOGETHER NEW PROJECT. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GR OSSLY ERRED IN FAILING TO APPRECIATE THAT NO COMPLETION C ERTIFICATE HAD BEEN OBTAINED BY THE ASSESSEE IN RESPECT OF HIS 5 PROJECT AS WAS REQUIRED AS PER THE EXPLANATION (II) TO SEC. 80 IB(10)(A) OF THE INCOME-TAX ACT, 1961. 6. BUT, WE DO NOT FIND ANY ADJUDICATION OF THE ISSU E IN THE ORDER OF CIT(A) AS AGREED BY THE LEARNED AUTHORIZED REPRESENTATIVE OF ASSESSEE IN THE HEARING PROCEEDIN GS BEFORE US. SO IT AMOUNTS TO NON SPEAKING ORDER ON THIS ASPECT WHILE GIVING RELIEF TO THE ASSESSEE U/S.80IB(10) WHICH IS NOT JU STIFIED, SO, IN THE INTEREST OF JUSTICE, WE SET ASIDE THESE TWO ISS UES OF COMMENCEMENT AND COMPLETION CERTIFICATES FOR CLAIMI NG DEDUCTION U/S.80IB(10) AND REMIT TO THE CIT(A) WITH A DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS PA RTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 19 TH OF FEBRUARY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 19 TH FEBRUARY, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-II, PUNE 4) THE CIT-II, 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