Income-tax Officer, V. M/s. Shree Venkatesh Realty, Pune

ITA 1142/PUN/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6162 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-01-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 10-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHAI
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1142/PUN/2015 / ASSESSMENT YEAR : 2010-11 ITO, WARD- 3(1), PUNE. ....... / APPELLANT / V/S. M/S. SHREE VENKATESH REALTY, 2, LOUKIK, 870, ABOVE HDFC BANK, BHANDARKAR ROAD, PUNE. PAN : ABIFS0084Q / RESPONDENT REVENUE BY : SHRI SANJEEV GHAI ASSESSEE BY : SHRI KISHORE PHADKE / DATE OF HEARING : 02.01.2019 / DATE OF PRONOUNCEMENT : 09.01.2019 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-3, PUNE DATED 30.03.2015 FOR THE ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER :- 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN ALLOWING THE ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE FIRST APPROVAL IN RESPECT OF THE HOUSING PROJECT NAMELY SHREE VENKATESH KSHITIJ WAS GIVEN BY THE PMC ON 15/09/2008, WHICH IS MUCH LATER THAN THE REQUISITE DATE I.E. 31/03/2008, AS PER THE CONDITION LAID DOWN IN PROVISIONS OF SEC. 80IB(10) OF THE ACT. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN ALLOWING THE CLAIM U/S. 80IB(10) OF THE ACT ON PARTIAL COMPLETION OF THE HOUSING PROJECT ON PRO-RATA BASIS WITH RESPECT TO BLOCKS AND UNITS SATISFYING THE CONDITIONS U/S. 80IB(10) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE DEDUCTION IS ALLOWABLE ON THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND THERE IS NO QUESTION OF ALLOWING DEDUCTION TO A PART OF THE PROJECT. 2 ITA NO.1142/PUN/2015 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL DURING THE COURSE OF APPELLATE PROCEEDINGS. 3. BRIEFLY, THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE CONSTRUCTION BUSINESS. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TAXABLE INCOME AT NIL. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE DEVELOPED A HOUSING PROJECT NAMELY SHREE VENKATESH KSHITIJ AT S.NO.8/1, HISSA NO.1A/1+2, AMBEGAON KHRUD, PUNE. THE ASSESSEE CLAIMED THE DEDUCTION U/S 80IB(10) OF THE ACT AMOUNTING TO RS.2,02,02,200/- ON THE INCOME EARNED FROM THE SAID PROJECT. IN THIS REGARD, THE ASSESSEE FILED VARIOUS DOCUMENTS VIZ. DEVELOPMENT AGREEMENT, PURCHASE OF LAND AGREEMENT, APPROVALS FROM THE LOCAL AUTHORITIES, OTHER DETAILS OF THE SAID PROJECT, ETC BEFORE THE ASSESSING OFFICER AND CLAIMED THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. IN THIS PROJECT, WHICH CHANGED HANDS FROM TIME TO TIME, THERE ARE TWO APPROVALS OF THE LOCAL AUTHORITY NEW ONE AND THE REVISED ONE. THE ASSESSING OFFICER HELD THAT THE SUBSEQUENT AND THE REVISED APPROVAL IS TO BE CONSIDERED. THE ASSESSING OFFICER CONSIDERED THE SAME AND FOUND THE SAME IS DATED AFTER 1.4.2008. THE PROJECTS APPROVED AFTER 31.03.2008 ARE OUTSIDE THE SCOPE OF THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER REJECTED THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. 4. AGGRIEVED WITH THE SAID ACTION OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE FILED THE WRITTEN SUBMISSION AND RELIED ON VARIOUS JUDGEMENTAL 3 ITA NO.1142/PUN/2015 LAWS ON THIS ISSUE. AFTER CONSIDERING THE SAME, THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED WITH THE SAID ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US WITH THE ABOVE EXTRACTED GROUNDS. 6. BEFORE US, AS PER THE LD. AR, THIS IS A CASE WHERE THE ASSESSING OFFICER DENIED THE BENEFIT OF DEDUCTION U/S 80IB(10) OF THE ACT CONSIDERING THE REVISED PLAN OF THE HOUSING PROJECT APPROVED AFTER 31.03.2008. OTHERWISE, THE SAID HOUSING PROJECT WAS INITIALLY APPROVED FOR THE FIRST TIME ON 30.03.2007. THE LD. DR FOR THE REVENUE, AT THE OUTSET, SUBMITTED THAT THE ASSESSEE ACQUIRED THE SAID PROJECT WHICH WAS ALREADY APPROVED BY THE LOCAL AUTHORITIES IN THE HANDS OF THE EARLIER OWNER OF THE PROJECT. THE AMENDED PLAN WAS APPROVED BY THE LOCAL AUTHORITIES ON 15.09.2008 IN THE HANDS OF THE ASSESSEE. THE RELEVANT EVIDENCES IN THIS REGARD ARE PLACED AT PAGE 315 READ WITH OWNERSHIP TRANSACTION KEPT AT PAGE 480 OF THE PAPER BOOK-I AND PAPER BOOK-II RESPECTIVELY. ACCORDING TO THE LD. DR, THE DATE OF APPROVAL IN THE HANDS OF THE ASSESSEE IS RELEVANT FOR PURPOSE OF APPLYING THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. IN THIS REGARD, LD. DR READ OUT THE RELEVANT PROVISIONS OF THE SAID SUB-SECTION (10) TO SECTION 80IB OF THE ACT AND ARGUED THAT THE PROJECTS APPROVED AFTER 31.03.2008 ARE NOT ELIGIBLE FOR BENEFIT OF DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF THE SAID HOUSING PROJECT. THE LD. DR PRAYED FOR APPROVING THE ORDER OF THE ASSESSING OFFICER AND REVERSING THE ORDER OF THE CIT(A). 4 ITA NO.1142/PUN/2015 7. PER CONTRA , LD. AR FOR THE ASSESSEE EXPLAINED ABOUT THE PROJECT AND SUBMITTED THAT THE PROJECT WAS ORIGINALLY OWNED BY SHRI BALDEVPRASAD GUPTA AND THE SAID PROJECT WAS APPROVED ORIGINALLY BY THE LOCAL AUTHORITIES ON 31.03.2007. IN SUPPORT OF THIS ARGUMENT, LD. AR BROUGHT OUR ATTENTION TO PAGE 63 OF THE PAPER BOOK (SIMILAR COPIES OF TRANSACTION ARE PLACED AT PAGE 477 TO 479 OF THE PAPER BOOK-II). HE ALSO BROUGHT OUR ATTENTION TO THE WORD NEW AS HIGHLIGHTED BY HIM. FURTHER, BRINGING OUR ATTENTION TO PAGE 66 OF THE PAPER BOOK, LD. AR SUBMITTED THAT THE REVISED PROJECT PLANS ARE APPROVED ON 29.03.2008. LD. AR SUBMITTED THAT THE PROJECT WAS REVISED AND THE RELEVANT COMMENCEMENT CERTIFICATE ISSUED BY THE PUNE MUNICIPAL CORPORATION SHOWING THE REVISED 1 IS KEPT AT PAGE 480 OF THE PAPER BOOK-II. FURTHER, BRINGING OUR ATTENTION TO THE PROVISIONS OF THE INCOME TAX ACT WITH REFERENCE TO THE APPROVALS BY THE LOCAL AUTHORITIES, LD. COUNSEL READ OUT THE CONTENTS OF THE EXPLANATION TO CLAUSE (A) OF SUB-SECTION (10) TO SECTION 80IB OF THE ACT, LD. COUNSEL SUBMITTED THAT IN CASE WHERE THE APPROVAL OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, FIRST APPROVAL BY THE LOCAL AUTHORITIES IS SACROSANCT. ON THESE LAW, LD. COUNSEL SUBMITTED THAT IT IS THE FIRST APPROVAL DATED 30.03.2007 IS RELEVANT AND THE SAID DATE BECOMES DATE OF COMMENCEMENT OF THE PROJECT FOR THE PURPOSE OF SECTION 80IB(10) OF THE ACT. ACCORDINGLY, THE BENEFIT OF PROVISIONS OF SECTION 80IB(10) OF THE ACT IS AVAILABLE TO THE ASSESSEE. HE ALSO MENTIONED THAT THE PROJECT IS DULY COMPLETED AS PER THE DUE DATES SPECIFIED IN CLAUSE (A) OF SUB-SECTION (10) TO SECTION 80IB OF THE ACT. IN VIEW OF THE ABOVE, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DECISION TAKEN BY THE CIT(A) ON THIS ISSUE IS FAIR AND REASONABLE AND THE SAME SHOULD NOT BE ALTERED. 5 ITA NO.1142/PUN/2015 8. WE HAVE HEARD BOTH THE PARTIES ON THE LIMITED ISSUE OF CONTROVERSY WITH REFERENCE TO THE CONTENTS OF THE EXPLANATION OF CLAUSE (A) OF SUB- SECTION (10) TO SECTION 80IB OF THE ACT. FOR THE PURPOSE OF COMPLETENESS, WE PROCEED TO EXTRACT THE SAID EXPLANATION AS UNDER :- EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY ; 9. FROM THE ABOVE, THE LAW IS VERY CLEAR THAT THE APPROVAL BY THE LOCAL AUTHORITY IS SPECIFIC TO THE HOUSING PROJECT IN QUESTION AND NOT TO THE OWNER OF THE HOUSING PROJECT. THUS, THE ASSESSING OFFICER INTERPRETED THE LAW WRONGLY. FURTHER, WHEN THERE ARE APPROVALS TAKEN FOR MORE THAN ONCE IN RESPECT OF THE SAME HOUSING PROJECT, THE FIRST APPROVAL GIVEN BY THE LOCAL AUTHORITY IS RELEVANT FOR THE PURPOSE OF CLAUSE (A) OF SUB-SECTION (10) TO SECTION 80IB OF THE ACT. CONSIDERING THE UNAMBIGUOUS EXPRESSIONS PROVIDED IN THE SAID EXPLANATION, FIRST APPROVAL OF THE HOUSING PROJECT BECOMES A SIGNIFICANT AND NOT THE OWNER OF THE HOUSING PROJECT. IN OUR VIEW, THE ASSESSING OFFICER HAS ERRED IN LINKING WITH THE PROVISIONS TO THE OWNER OF THE HOUSING PROJECT INSTEAD OF LINKING WITH THE HOUSING PROJECT ITSELF. FURTHER, WE PERUSED THE ORDER OF THE CIT(A) AND FIND THE CIT(A) GIVEN JUSTIFIABLE REASON IN PARA 4.7.10 OF HIS ORDER. THE RELEVANT LINES OF THE SAID ORDER OF THE CIT(A) ARE AS UNDER :- THUS, IN VIEW OF THE ABOVE FACTS, THE RATIO OF THE JUDICIAL DECISIONS AND THE APPELLANT HAVING SATISFIED THE OTHER CONDITION AS STIPULATED U/S 80IB(10) SUCH AS REGARDING THE AREA OF THE PLOT, SIZE OF THE FLATS ETC. THE APPELLANT GETS ENTITLED TO THE DEDUCTION U/S 80IB(10) ON PRO RATA BASIS WITH RESPECT TO PHASE-I OF THE HOUSING PROJECT COMPRISING OF BUILDINGS A, B, CIT(A), D, E & G, WHICH PERTAINED TO THE FSI ELIGIBLE FOR CONSTRUCTION VIDE ORIGINAL SANCTION DATED 30.03.2007 WHICH HAS ALSO BEEN REVISED FROM TIME TO TIME. 6 ITA NO.1142/PUN/2015 10. CONSIDERING THE ABOVE PROVISIONS OF THE EXPLANATION TOGETHER WITH THE FACTS OF THE PRESENT CASE, WE ARE OF THE OPINION THE ORDER OF THE CIT(A) IS FAIR AND REASONABLE ON THIS ISSUE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED ON LEGAL ISSUE. FURTHER, THE ADJUDICATION OF OTHER GROUNDS ON MERITS BECOMES AN ACADEMIC EXERCISE. THUS, THESE MERITS LINKED GROUNDS ARE DISMISSED AS ACADEMIC. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 09 TH DAY OF JANUARY, 2019. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 09 TH JANUARY, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-3, PUNE. 4. THE PR. CCIT, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.