The ITO, Ward-9(1), Ahmedabad V. M/s. Sukum Infratructure, Ahmedabad

ITA 1177/AHD/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9788 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 29-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDHAN
• Keywords: Cost of acquisition
• Section: 143(3); 80IB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.1177/AHD/2012 ( / ASSESSMENT YEAR : 2008-09) THE ITO WARD-9(1) AHMEDABAD / VS. M/S.SHAKUN INFRASTRUCTURE 9, GAYATRI FLAT B/H. CIRCUIT HOUSE SHAHIBAUG, AHMEDABAD $ ./ ./ PAN/GIR NO. : ABGFS 0974 C ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI K. MADHUSUDHAN, SR.DR ($'*) / RESPONDENT BY : -NONE- +,*- / DATE OF HEARING 01/12/2016 ./0*- / DATE OF PRONOUNCEMENT 09/12/2016 / O R D E R PER PRADIP KUMAR KEDIA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS-XV, AHMEDABAD [C IT(A) IN SHORT] DATED 26/03/2012 PASSED FOR ASSESSMENT YEAR (AY) 2008-09. 2. BRIEFLY STATED, THE ASSESSEE IS A PARTNERSHIP-FI RM. THE ASSESSEE- FIRM IS ENGAGED IN THE BUSINESS OF DEVELOPING AND C ONSTRUCTING HOUSES, ITA NO.1177/AHD /2012 ITO VS. M/S.SHUKUN INFRASTRUCTURE ASST.YEAR 2008-09 - 2 - FLATS, APARTMENTS, OFFICES, SHOPS, COMMERCIAL COMPL EXES ETC. AND DEVELOPING AND BUILDING HOUSING PROJECTS. THE ASSE SSEE FILED ITS RETURN OF INCOME FOR AY 2008-09 WHEREIN DEDUCTION U/S.80IB(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ) FOR A SUM OF RS.1,69,26,936/- WAS CLAIMED. THE ASSESSING OFFICE R (AO) WHILE FRAMING ASSESSMENT ORDER UNDER SECTION 143(3) OF TH E ACT REJECTED THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80I B(10) FOR THE AFORESAID AMOUNT OF 1.69 CRORES. THE AO MADE REFER ENCE TO THE DEVELOPMENT AGREEMENT ENTERED INTO BY THE ASSESSEE WITH THE LAND OWNERS, NAMELY, S/SHRI BIPIN CHANDRA CHIMANLAL PATE L AND HARSHADBHAI DHANJIBHAI PATEL. IT WAS THE CASE OF THE AO THAT T HE ASSESSEE HAS MERELY ACTED AS A WORK CONTRACTOR AND NOT AS A DEVELOP ER AND ACCORDINGLY IN THE LIGHT OF THIS BELIEF, THE DEDUCTION UNDER SECTI ON 80IB(10) OF THE ACT WAS REJECTED IN RESPECT OF HOUSING PROJECT NAMED AS SUKUN INFRASTRUCTURE. THE AO OBSERVED THAT THE ENTIRE RESPONSIBILITY TO EXECUTE THE AFORESAID HOUSING PROJECT AND ABIDE BY THE TERMS AND CONDITIONS OF ITS APPROVAL RIGHT FROM THE INCEPTION OF THE PROJECT AND TILL ITS COMPLETION RESTED WITH THE LAND OWNERS. THE LO CAL AUTHORITY HAS ALSO GRANTED PERMISSION FOR DEVELOPMENT OF THE PROJECT I N FAVOUR OF THE LAND OWNERS ONLY. THUS THE ASSESSEE BEING JUST A CONT RACTOR OF THE LAND OWNERS CONSTRUCTING RESIDENTIAL UNITS AND CANNOT BE REGARDED AS DEVELOPER IN AND HIS OWN RIGHT. ALL THESE REASON ING, THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) WAS DENIED TO THE ASSESSEE. ITA NO.1177/AHD /2012 ITO VS. M/S.SHUKUN INFRASTRUCTURE ASST.YEAR 2008-09 - 3 - 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A). THE STATEMENT OF FACTS FILED BY THE ASSESSEE BEFORE THE CIT(A) READS AS UNDER:- STATEMENT OF FACTS : (1) THE RETURN OF INCOME FOR A.Y. 2008-09 WAS FILED ON 24.09.2008 DECLARING TAXABLE INCOME OF RS.NIL/- AFTER CLAIMING DEDUCTION U/S.80IB(10) OF THE ACT OF RS.1,69,26,936/-. (2) THE APPELLANT IS A PARTNERSHIP FIRM. THE ASSESSEE FIRM HVING BUSINESS OF DEVELOPING & CONSTRUCTING OF ALL TYPESE OF BUILDING AND STRUCTURES INCLUDING HOUSES, FLATS, AP ARTMENTS, OFFICES, GODOWNS, WAREHOUSES, SHOPES, COMMERCIAL COMPELXES, RESIDENTIAL COMPLEXES, AND TO PURCHASE, SALE OR DEAL IN ALL TYPES OF MOVABALE OR IMMOVABLE PROPERTI ES/LAND & REAL ESTATE FOR DEVELOPMENT, INVESTMENT, OR FOR RES ALE ETC. AND DEVELOPING AND BUILDING HOUSING PROJECTS UNDER SUB SECTION 80IB OF I.T. ACT, 1961 OR SUCH OTHER BUSINESS OR B USINESSES ETC. (3) THE LEARNED INCOME-TAX OFFICER, WARD 9(1), AHMEDAB AD (HEREIN AFTER REFERRED TO AS LEARNED A.O.) HAS PASS ED ORDER U/S.143(3) WHERE IN FOLLOWING ADDITIONS WERE MADE T O THE RETURNED INCOME. PARTICULARS AMT. AMT. INCOME AS PER COMPUTATION OF INCOME ADD:- DISALLOWANCE OF DEDUCTION CLAIM U/S.80IB(10). 1,69,26,936.00 NIL 1,69,26,936.00 ITA NO.1177/AHD /2012 ITO VS. M/S.SHUKUN INFRASTRUCTURE ASST.YEAR 2008-09 - 4 - TOTAL ASSESSED INCOME 1,69,26,936.00 (4) ASSESSEE FIRM DEVELOPING AND BUILDING HOUSING PRO JECTS NAME SUKUN INFRASTRUCTURE. AS ALL THE PLANS AND ALL TYPES OF GOVERNMENT APPROVALS LIKE PERMISSION O F N.A., RAJACHITTHI, DEVELOPMENT PERMISSION, PLAN PASSED IN AUDA, ETC IN THE NAME OF LAND OWNER AS IT IS DECIDED WHIL E MAKING DEVELOPMENT AGREEMENT. ASSESSEE HAD PRACTICALLY PURCHASED THE LAND AND IT BARE THE ENTIRE COST AND RISK OF THE DEVELOPING THE PROJECTS AND MADE THE PAYMENT OF LAND COST TO THE LAND OWNERS ALSO FR OM THE BANK ACCOUNT OF THE ASSESSEE FIRM TO THE LAND OWNER S ACCOUNT BY CHEQUE. THE ASSESSEE FIRM HAS CARRIED OUT THE PROJECT AT OW N COST AND RISK BY DEVELOPMENT, CONSTRUCTION AND SALE OF UNITS TO BE CONSTRUCTED ON THE SAID LAND PURCHASED AND THE LAND OWNER IS A MERE INSTRUMENT TO MAKE PROCESS FASTER FOR GETTIN G PERMISSION FROM VARIOUS AUTHORITY AND SMOOTHENING THE WORK OF THE ASSESSEE. THE ASSESSEE FIRM HAS CARRIED OUT THE PROJECT AT OW N COST AND RISK BY DEVELOPMENT, CONSTRUCTION AND SALE OF UNITS TO BE CONSTRUCTED ON THE SAID LAND PURCHASED AND THE LAND OWNER IS A MERE INSTRUMENT TO MAKE PROCESS FASTER FOR GETTIN G PERMISSION FROM VARIOUS AUTHORITY AND SMOOTHENING THE WORK OF THE ASSESSEE. ASSESSEE ALSO MADE PAYMENT OF STAMP DUTY AT THE RAT E OF 1% UNDER THE BOMBAY STAMP ACT ON LAND COST OF RS.43,50 ,000/-, AS THE PRICE DECIDED BY THE GOVERNMENT (KNOWN AS JA NTRI PRICE) VIDE CHALLAN ON DATE 20.07.2006 IN GANDHINAGAR BRA NCH OF STATE BANK OF INDIA BY EXECUTING SUPPLEMENTARY AGRE EMENT ON ITA NO.1177/AHD /2012 ITO VS. M/S.SHUKUN INFRASTRUCTURE ASST.YEAR 2008-09 - 5 - THE STAMP PAPER BEING REMAINED OUTSTANDING AND NOT UTILIZED IN DEVELOPMENT AGREEMENT USED WITHIN RELEVANT TIME PER IOD. THE ASSESSEE FIRM HAD MADE PAYMENT OF RS.2,51,12,28 0/- TOWARDS LAND DEVELOPMENT RIGHT AND THIS IS NOTHING BUT THE ACQUISITION COST OF THE ONCE YOUR GOOD SELF WILL APPRECIATE THE ABOVE FACTS , YOUR GOOD SELF WOULD APPRECIATE FROM THE BELOW TABLE THAT THE ASSESSEE HAS DULY COMPLIED WITH ALL THE REQUIREMENT U/S.80(IB) O F THE ACT WHICH IS SUMMARIZED AS UNDER:- SR. NO. CONDITIONS SPECIFIED FOR DEDUCTION U/S.80 IB FULFILLMENT OF CONDITIONS OF DEDUCTION U/S.80IB 1. DATE OF APPROVAL BY LOCAL AUTHORITY APPROVAL DATE: - 05/09/2006 2. DATE OF COMPLETION OF HOUSING PROJECT : 29/10/2007 3. SIZE OF THE PLOT OF LAND MORE THAN 1 ACRE I.E. 1.48 ACRE 4. BUILT UP AREA OF 1500 SQ FEET FOR EACH RESIDENTIAL UNIT EACH RESIDENTIAL UNIT IS HAVING BUILT UP AREA OF LESS TH AN 1500 SQ.FT. AS PER THE APPROVED PLAN. IN VIEW OF ABOVE FACT AND CIRCUMSTANCES APPELLANT H AS PREFERRED THIS APPEAL BEFORE YOUR HONOR. THE GROUNDS OF APPEAL ARE ACCOMPANY. 5. THE CIT(A) IN TURN ACCEPTED THE PLEA OF THE A SSESSEE FOLLOWING THE DECISION RENDERED IN ITS OWN CASE FOR EARLIER AY 2 007-08 VIDE ORDER DATED 26/03/2012. THE OPERATIVE PARA OF THE ORDER OF THE CIT(A) READS AS UNDER:- ITA NO.1177/AHD /2012 ITO VS. M/S.SHUKUN INFRASTRUCTURE ASST.YEAR 2008-09 - 6 - 5. IN RESPECT OF MAIN GROUND OF APPEAL RELATED TO DISALLOWANCE OF CLAIM OF THE APPELLANT/S.80IB(10) OF THE ACT OF RS. 1,69,26,936, THE FACTS AND SUBMISSIONS OF THE APPELLANT ARE SAME AS THAT HAVE BEEN TAKEN BEFORE THE AO AND LD.CIT(A) IN THE CASE OF AP PEAL PROCEEDINGS IN THE CASE OF THE APPELLANT FOR PREVIO US YEAR RELEVANT TO AY 2007-08. ALL THE DETAILS, EVIDENCES AND CONTENTIONS WERE ALR EADY CONSIDERED BY ME IN APPELLANTS CASE FOR AY 2007-08 IN MY ORDE R DATED 26.3.2012 IN RESPECT OF APPEAL NO.CIT(A)- XV//ACIT(OSD)/CIR.9/312/09-10. FOLLOWING THE RATIO OF HONBLE GUJARAT HIGH COURT IN THE LATEST DECISION IN THE CA SE OF RADHE DEVELOPERS 204 TAXMANN 543 AND FINDING THE FACTS IN THE CASE OF THE APPELLANT ARE SIMILAR TO THAT AS CONSIDERED BY THE HONBLE GUJARAT HIGH COURT IN THE RESPECTIVE CASE, THE CLAI M OF THE APPELLANT U/S.80IB(10) OF THE ACT WAS ALLOWED. IT IS THEREFORE FOLLOWING THE SAME RATIO FOR AY 2007-08, IN THE PRE VIOUS YEAR RELEVANT TO AY 2008-09 I.E. YEAR IN QUESTION, THE A PPELLANTS CLAIM U/S.80IB(10) OF THE ACT OF RS.1,69,26,936 IS DIRECT ED TO BE ALLOWED. THE APPELLANT GETS RELIEF OF RS.1,69,26,936. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE GROUNDS OF APPEAL RAISED BY THE AO READ AS U NDER:- 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AH MEDABAD HAS ERRED IN LAW ON FACTS IN DIRECTING THE ASSESSIN G OFFICER TO ALLOW THE ASSESSEES CLAIM FOR DEDUCTION OF RS.1,69,26,93 6/- U/S.80IB(10) OF THE ACT. 2. THE LD.COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHM EDABAD HAS ERROR IN HOLDING THAT THE ASSESSEE FULFILLS THE CON DITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S.80IB(10) EVEN WHEN THE L AND WAS IN THE ITA NO.1177/AHD /2012 ITO VS. M/S.SHUKUN INFRASTRUCTURE ASST.YEAR 2008-09 - 7 - NAMES OF SHRI BIPINCHANDRA CHIMANLAL PATEL AND SHRI HARSHADBHAI DHANJIBHAI PATEL., WHO ARE SEPARATE LEGAL ENTITIES IN THE EYE OF LAW AND THE ASSESSEE ENTERED INTO THE PROJECT BY A DEVE LOPMENT AGREEMENT WITH THEM. THE ENTIRE RESPONSIBILITY TO EXECUTE THE HOUSING PROJECT AND ABIDE BY THE TERMS AND CONDITIO NS OF ITS APPROVAL RIGHT FROM THE INCEPTION OF THE PROJECT TI LL ITS COMPLETION RESTS WITH THEM. THE LOCAL AUTHORITY HAD GRANTED P ERMISSION FOR DEVELOPMENT TO THEM. ASSESSEE WAS JUST A CONTRACTO R OF THE LAND OWNERS CONSTRUCTING RESIDENTIAL UNITS AND NOT A DEV ELOPER. 8. NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSESS EE AND THE MATTER WAS PROCEEDED EX-PARTE AS NOTED ABOVE. 9. THE LD.DR FOR THE ASSESSEE REITERATED THE OBSER VATIONS MADE BY THE AO IN ITS ASSESSMENT ORDER AND SUBMITTED THAT T HE ASSESSEE IS MERELY A CONTRACTOR AND NOT A DEVELOPER AND IS THEREFORE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. ON BEING ASKED BY THE BENCH AS TO WHETHER THE ORDER OF THE CIT(A) RELEVAN T TO AY 2007-08 FORMING THE BASIS THE ORDER OF THE CIT(A) HAS BEEN CONTESTED OR NOT, THE LD.DR DREW BLANK. 10. WE HAVE HEARD THE LD.DR, PERUSED THE MATERIA L AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE ONLY ISSUE INVOLVED IN THE PRESENT CASE IS WHETHER THE ASSESSE E IS ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN THE FACTS OF THE CASE OR NOT. WE NOTICE THAT SIMILAR DENIAL OF DEDUCTION WAS MADE IN THE EARLIER AY 2007-08 BY THE AO WHICH WAS REVERSED BY THE CIT( A) IN FIRST ITA NO.1177/AHD /2012 ITO VS. M/S.SHUKUN INFRASTRUCTURE ASST.YEAR 2008-09 - 8 - APPEAL. THE REVENUE HAS NOT BROUGHT ON RECORD ANY ORDER OF THE SUPERIOR AUTHORITY DISLODGING THE AFORESAID ORDER O F THE CIT(A) RELEVANT TO AY 2007-08. IT CAN THUS BE SAFELY ASSUMED THAT THE ORDER OF THE CIT(A) FOR AY 2007-08 ON SIMILAR FACTS THEREFORE S URVIVES. THE ORDER OF THE CIT(A) RELEVANT IN THE AY 2008-09 APPEALED A GAINST HAS MERELY FOLLOWED THE DECISION RENDERED IN THE EARLIER ASSE SSMENT YEAR IN ASSESSEES OWN CASE. WE DO NOT FIND ANYTHING REP UGNANT IN THE ACTION OF THE CIT(A). THE DEPARTMENT HAS NOT BROUGHT ANY FRESH FACTS ON RECORD TO JUSTIFY A DEPARTURE FROM THE EARLIER DECISION. THUS, JUDICIAL PROPRIETY REQUIRES CONSISTENTLY. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY JUSTIFIABLE CAUSE TO INTERFERE WITH THE ORDER OF TH E CIT(A). 11. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED. THIS ORDER PRONOUNCED IN OPEN COURT ON 09 / 1 2 /2016 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 09/ 12 /2016 4..+,.+../ T.C. NAIR, SR. PS ITA NO.1177/AHD /2012 ITO VS. M/S.SHUKUN INFRASTRUCTURE ASST.YEAR 2008-09 - 9 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-XV, AHMEDABAD 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION ..08/12/2016 (DICTATION-PAD 13- PAGES ATTACHED AT THE END OF THIS APPEAL- FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 08/12/2016 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.9.12.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 9.12.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER