SUMMAIYA ENTERPRISES, MUMBAI V. ACIT 24(2), MUMBAI

ITA 12/MUM/2009

• Counselvise Citation: 1219914 RSA 2009
• Duration Of Justice: 2 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 06-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 01-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Assessee Lawyers: M P MAKHIJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH: MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NO.12/MUM/2009 (ASSESSMENT YEAR: 2005-06) M/S. SUMMAIYA ENTERPRISES, HUMARA PARK, SURVEY NO.273, PATHANWADI, MALAD (E), MUMBAI -400 097 ....... APPELLANT VS ITO, RANGE -12(1))(2), MUMBAI ..... RESPONDENT PAN: AAGFS 8814 E APPELLANT BY: MR. M.P. MAKHIJA RESPONDENT BY: MR. B. JAYA KUMAR O R D E R PER R.S. PADVEKAR, JM THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING TH E IMPUGNED ORDER OF THE LD. CIT (A) 24, MUMBAI, DATED 3.10.200 8. THE ASSESSEE HAS TAKEN FOLLOWING TWO EFFECTIVE GROUNDS:- 1. THE LEARNED CIT (APPEALS) IS NOT JUSTIFIED IN C ONFIRMING THE ACTION OF THE ASSESSING OFFICER IN REJECTING ASSESS EES CLAIM OF DEDUCTION U/S.80IB(10) OF I.T. ACT, 1961 WITHOUT PROPERLY APPRECIATING THE FACTS OF CASE AND PROVISIONS OF LA W. 2. WITHOUT PREJUDICE TO ABOVE APPELLANTS SUBMITS. THAT THE LEARNED CIT (APPEALS) IS NOT JUSTIFIED IN HOLDING THAT AMENDED PROVISIONS OF SEC. 80IB(10) ARE APPLIC ABLE TO ITA NO.12/MUM/2009 M/S. SUMMAIYA ENTERPRISES 2 APPELLANTS CASE WITHOUT APPRECIATING THAT THE PLANS OF THE PROJECT WERE PASSED MUCH EARLIER. 2. WE HAVE HEARD THE PARTIES. THE ASSESSEE FIRM IS IN THE BUSINESS OF CONSTRUCTION AND DEVELOPMENT OF PROPERTY. THE A SSESSEE HAD CLAIMED THE DEDUCTION OF ` 7,32,440/- IN THE A.Y. 2005-06. THE A.O. HAS OBSERVED THAT THE LOCAL AUTHORITY HAS APPROVED THE PROJECT FOR WHICH DEDUCTION U/S.80IB(10) WAS CLAIMED, AS RESIDE NTIAL-CUM- SHOPPING PROJECT. THE A.O. DENIED THE DEDUCTION T O THE ASSESSEE FOR THE REASON THAT THE PROJECT SHOULD NOT HAVE SHOPS O R COMMERCIAL UNITS. THE A.O. ALSO REFERRED TO THE DECISION OF T HE ITAT MUMBAI IN THE CASE OF M/S. LAUKIK DEVELOPERS IN ITA NO.532/MU M/2006. THE A.O. ALSO OBSERVED THAT THERE IS AMENDMENT BY THE F INANCE ACT 2004 TO SECTION 80IB(10) W.E.F. 1.4.2005 AND ONLY IN THO SE CASES WHERE THE COMMERCIAL AREA IS LESS THAN 5% OF THE TOTAL BUILT- UP AREA, THE DEDUCTION IS ALLOWABLE. THE ASSESSEE CHALLENGED TH E ASSESSMENT ORDER BEFORE THE LD. CIT (A) BUT WITHOUT SUCCESS. NOW, T HE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD. COUNSEL SUBMITS THAT IN ASSESSEES OWN CASE IN THE A.Y. 2001-02 AND 2003-04 THE LD. CIT (A) HAS ACCEPT ED THE CLAIM OF THE ASSESSEE AND THE ORDER OF THE LD. CIT (A) HAVE BEEN CONFIRMED BY THE TRIBUNAL. THE ASSESSEE FILED THE COPY OF THE T RIBUNAL ORDER IN ASSESSEES OWN CASE BEING ITA NOS.1986 AND 1987/MUM /2010 DATED 21.4.2011 AND COPY OF THE SAME IS PLACED ON RECORD. HE, FURTHER, SUBMITS THAT AS THE PROJECT IS COMMENCED PRIOR TO 1 .4.2005 THE SAID AMENDMENT IS NOT APPLICABLE. HE, FURTHER SUBMITS T HAT THE DECISION OF THE HONBLE SPECIAL BENCH (PUNE) IN THE CASE OF BRA HMA ASSOCIATES 122 TTJ 433 (SB)(PUNE) HAS BEEN CONFIRMED BY THE HO NBLE HIGH COURT OF BOMBAY. HE FURTHER SUBMITS THAT IN THE CASE OF HIRANANDANI AKRUTI JV VS. DCIT ITA NO.4516/MUM/2009 ORDER DATED 30.3.2 010, THE TRIBUNAL HAS CONSIDERED THE EFFECT OF THE AMENDMENT TO SEC. 80IB(10) ITA NO.12/MUM/2009 M/S. SUMMAIYA ENTERPRISES 3 MADE BY THE FINANCE ACT, 2004 W.E.F. 1.4.2005. WE HAVE ALSO HEARD THE LD. D.R. 4. WE FIND THAT UPTO A.Y. 2004-05 THE LD. CIT (A) H AS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. MOREOVER, THE ORD ERS OF THE LD. CIT (A), MORE PARTICULARLY, FOR THE A.YS. 2001-02 AND 2 003-04 HAVE BEEN CONFIRMED BY THE TRIBUNAL. IN RESPECT OF A.Y. 2005 -06 THE ONLY OBJECTION OF THE LD. D.R. IS THAT AS SECTION 80IB(1 0) HAS UNDERGONE AMENDMENT AND AS THE COMMERCIAL AREA IN THE ASSESSE ES CASE IS MORE THAN PRESCRIBED ONE AS PER THE SAID AMENDMENT, HENC E, THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING THE DEDUCTION. 5. WE FIND THAT THE IDENTICAL OBJECTION HAS BEEN CO NSIDERED BY THE TRIBUNAL IN THE CASE OF HIRANANDANI AKRUTI JV (SUPR A) AND IT IS HELD THAT WHEN THE ASSESSEE SUBMITS THE PROPOSAL FOR CAR RYING OUT THE DEVELOPMENT OF HOUSING PROJECT THEN WHATEVER LAW IS ON THAT DAY, THAT WOULD REGULATE THE RIGHTS OF THE ASSESSEE. IN THE PRESENT CASE, ADMITTEDLY, THE ASSESSEES PROJECT WAS COMMENCED PR IOR TO 1.4.2005. IN OUR OPINION, AS HELD IN THE CASE OF HIRANANDANI AKRUTI JV (SUPRA), THE RESTRICTIONS PLACED BY THE FINANCE ACT, 2004 IN RESPECT OF THE MAXIMUM PERMISSIBLE COMMERCIAL AREA IS NOT APPLICAB LE TO THE PROJECT APPROVED PRIOR TO 1.4.2005. WE, ACCORDINGLY, HOLD THAT THE ASSESSEE IS ELIGIBLE FOR THE DEDUCTION U/S.80IB(10) IN THE A.Y. 2005-06 ALSO. THE A.O. IS, THEREFORE, DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE U/S.80IB(10). 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 6 TH JUNE 2011. SD/- SD/- ( RAJENDRA SINGH ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 06TH JUNE, 2001 ITA NO.12/MUM/2009 M/S. SUMMAIYA ENTERPRISES 4 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)XXIV, MUMBAI. 4) THE CIT-24, MUMBAI. 5) THE D.R. E BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN ITA NO.12/MUM/2009 M/S. SUMMAIYA ENTERPRISES 5 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 06.06.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 06.06.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER