Deputy Commissioner of Income-tax, V. Paradise Construction, Pune

ITA 124/PUN/2014

• Counselvise Citation: 12424514 RSA 2014
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.124/PN/2014 (ASSESSMENT YEAR : 2009-10) DY. COMMISSIONER OF INCOME TAX, CIRCLE- 4, PUNE. . APPELLANT VS. PARADISE CONSTRUCTION, 21, GULMOHAR APARTMENT, 2420, EAST STREET CAMP, PUNE 400 001. PAN : AAHEP3703C . RESPONDENT DEPARTMENT BY : SHRI B. C. MALAKAR ASSESSEE BY : SHRI SUHAS BORA DATE OF HEARING : 05-01-2015 DATE OF PRONOUNCEMENT : 12-01-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE D ATED 26.09.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 15.12.2011 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, REVENUE HAS RAISED MULTIPLE GROU NDS OF APPEAL BUT THE SOLITARY ISSUE RELATES TO A CLAIM OF DEDUCTION U/S 80-IB(10) OF THE ACT AMOUNTING TO RS.16,96,771/- MADE BY THE ASSESSEE, W HICH WAS DISALLOWED BY THE ASSESSING OFFICER AND DELETED BY THE CIT(A). 3. IN BRIEF, THE RELEVANT FACTS GIVING RISE TO THE IMPUGNED DISPUTE CAN BE SUMMARIZED AS FOLLOWS. THE APPELLANT IS A PARTNERS HIP FIRM ENGAGED IN THE BUSINESS OF PROMOTERS, BUILDERS AND DEVELOPERS. DU RING THE ASSESSMENT YEAR UNDER CONSIDERATION, IT FILED AN E-RETURN OF INCOME DECLARING TOTAL INCOME AT NIL ITA NO.124/PN/2014 AFTER CLAIMING DEDUCTION U/S 80-IB(10) OF THE ACT A MOUNTING TO RS.16,96,771/-, WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON TH E GROUND THAT THE PROJECT OF THE ASSESSEE, NAMED GULMOHAR PARADISE HOME, KH ARADI WAS NOT COMPLETED WITHIN THE STIPULATED PERIOD OF TIME. TH E ASSESSING OFFICER NOTED THAT THE PROJECT, GULMOHAR PARADISE HOME INITIALL Y COMPRISED OF 80 FLATS AS PER THE COMMENCEMENT CERTIFICATE ISSUED BY THE LOCA L AUTHORITY, I.E. PUNE MUNICIPAL CORPORATION (PMC) ON 28.04.2004. SUBSEQU ENTLY, 46 MORE FLATS WERE ADDED IN TWO BUILDINGS BY THE REVISED SANCTION ED PLAN IN THE YEAR 2005. DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, ASS ESSEE SHOWED SALE RECEIPTS TO THE TUNE OF RS.57,13,265/- FROM THE AFO RESAID PROJECT, NAMELY, GULMOHAR PARADISE HOME AND CLAIMED DEDUCTION U/S 80-IB(10) OF THE ACT AMOUNTING TO RS.16,96,771/- WITH RESPECT TO THE PRO FITS OF THE SAID PROJECT. THIS CLAIM WAS DISALLOWED BY THE ASSESSING OFFICER. THEREFORE, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), WHO HAS SINCE DISAGREED WITH THE VIEW OF THE ASSESSING OFFICER AND ALLOWED THE C LAIM OF DEDUCTION OF RS.16,96,771/- MADE BY THE ASSESSEE U/S 80-IB(10) O F THE ACT. AGAINST SUCH A DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 4. BEFORE US, IT WAS A COMMON POINT BETWEEN THE PAR TIES THAT AN IDENTICAL CONTROVERSY HAS BEEN CONSIDERED BY THE PUNE BENCH O F THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2007-08 AN D 2008-09 VIDE ITA NO.233/PN/2011 & ITA NO.346/PN/2012 RESPECTIVELY DA TED 26.06.2013 AND THE RELEVANT PORTION OF THE ORDER READS AS UNDER :- 9. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROMOTERS, BUILDERS AND DEVELOPERS. TH E ASSESSEE HAD CONSTRUCTED A PROJECT UNDER THE NAME OF GULMOHAR PA RADISE HOME, KHARADI. THIS PROJECT INITIALLY COMPRISED OF 80 FLATS AS PER COMMENCEMENT CERTIFICATE ISSUED BY THE PMC ON 28.04.2004. SUBSEQUENTLY, 46 MORE FLATS WERE ADDED IN SECOND BUILDING BY REVISED SANCTION PLAN IN 2005 . IT IS UNDISPUTED THAT THE ASSESSEE RECEIVED OCCUPATION/COMPLETION CERTIFICATE FOR 126 FLATS FROM PMC AS FOLLOWS: CERTIFICATE PART-I DT. 13.02.2006 FOR 80 F LATS IN BUILDINGS A & B. ITA NO.124/PN/2014 CERTIFICATE PART-II DT. 06.05.2008 FOR 40 FLATS IN BUILDING D. CERTIFICATE PART-III DT. 15.12.2008 FOR 40 FL ATS IN BUILDING C. 10. ACCORDING TO THE ASSESSING OFFICER, THE FINAL COMPLETION/OCCUPATION CERTIFICATE FOR PROJECT WAS N OT ISSUED BY PMC AND AS PER BUILDING BY-LAWS ASSESSEE WAS REQUIRED TO HANDO VER 15% OF THE AREA TO PMC FOR AMENITIES. IN FACT, ASSESSEES INITIAL PRO JECT WAS FOR 126 FLATS FOR WHICH COMPLETION CERTIFICATE WAS RECEIVED BY THE AS SESSEE ON 15.12.2008, I.E., BEFORE DUE DATE OF COMPLETION I.E., 31.03.2009. IN ACCORDANCE WITH THE REVISED PLAN UPTO 25.05.2005, 126 FLATS COMPRISED 4 0 FLATS EACH IN BUILDINGS A, B AND D AND 6 FLATS WERE RAISED IN BUILDIN G C. THUS, THE ASSESSEE GOT COMPLETION CERTIFICATE WITH REGARDS TO 126 FLATS BE FORE STIPULATED TIME PRESCRIBED U/S.80IB(10) I.E., 31.03.2009. SUBSEQUE NT TO THIS, IN LIEU OF 15% OF AMENITIES AREA, I.E., 1200 SQ.MTRS., ADDITIONAL FSI AMOUNTING TO SALEABLE AREA OF 18,700 SQ.FT. WAS SANCTIONED BY PMC VIDE COMMENC EMENT CERTIFICATE DATED 10.06.2009 WHICH WAS SUBSEQUENT TO DATE OF 31.03.20 09, WHICH WAS TIME LIMIT FOR COMPLETION OF THE PROJECT HAVING 126 FLATS. TH E ADDITIONAL FSI WAS UTILISED BY CONSTRUCTING 30 ADDITIONAL FLATS IN BUILDING C . AS PER CLARIFICATION ISSUED ON BEHALF OF CBDT DATED 04.05.2001, THE ADDITIONAL HOU SING PROJECT ON EXISTING HOUSING PROJECT SITE COULD QUALIFY AS INFRASTRUCTUR E FACILITY UNDER THE PROVISIONS OF SECTION 80IB(10) PROVIDED IT IS UNDERTAKEN BY SE PARATE UNDERTAKING HAVING SEPARATE BOOKS OF ACCOUNTS SO AS TO ENSURE THAT COR RECT PROFIT COULD BE ASCERTAINED FOR PURPOSE OF SECTION 80IB(10). DEDUC TION U/S. 80IB(10) IS GRANTED VIS-A-VIS PROJECT AND CORRECT PROFITS ARE A SCERTAINABLE WITH REGARDS TO PROFITS FROM ADDITIONAL PROJECT. BUT HERE IN CASE BEFORE US, IT IS NOT THE CASE OF ASSESSEE BECAUSE ASSESSEE HAS NOT CLAIMED DEDUCTION U/S. 80IB(10) WITH REGARD TO ADDITIONAL FLATS RAISED IN BUILDING C A T THE STRENGTH OF ADDITIONAL FSI IN LIEU OF SURRENDER OF 15% OF AMENITIES AREA TO PM C. TAKING THE SPIRIT OF CLARIFICATION OF CBDT LETTER DATED 04.05.2001, IT I S CLEAR THAT ADDITIONAL CONSTRUCTION AT THE STRENGTH OF TDR QUALIFY FOR CLA IM OF DEDUCTION IN ITS OWN FACTS AND CIRCUMSTANCES. SAME REASONING APPLY FOR ADDITIONAL FSI RECEIVED IN LIEU OF SURRENDER OF 15% OF AMENITIES AREA BY THE A SSESSEE. SO THE CONSTRUCTION AT THE STRENGTH OF ADDITIONAL FSI SHOU LD BE TAKEN SEPARATE FOR PURPOSE OF CLAIMING DEDUCTION U/S.80IB(10). HAVING SAID SO, IT IS CLEAR THAT CONSTRUCTION OF INITIAL 126 FLATS AS MENTIONED ABOV E SHOULD NOT BE LINKED WITH ADDITIONAL 30 FLATS COMPLETED SUBSEQUENT TO 31.03.2 009. HAD THE ASSESSEE BEEN ELIGIBLE FOR DEDUCTION U/S.80IB(10) EVEN SUBSE QUENT TO 31.03.2009, HIS CLAIM WOULD HAVE BEEN ENTITLED FOR WITH REGARDS TO 30 FLATS AS WELL. BUT THERE IS NO CLAIM OF 30 FLATS WITH REGARD TO DEDUCTION U/S.8 0IB(10). BUT CLAIM OR NO CLAIM OF 30 FLATS RAISED AT THE STRENGTH OF ADDITIO NAL FSI WILL NOT DISTURB THE ENTITLEMENT OF 126 FLATS RAISED ON BUILDINGS A (4 0 FLATS), B (40 FLATS) , C (6 FLATS) AND D (40 FLATS), WHICH WERE COMPLETED IN ALL RESPECTS ON 15.12.2008, I.E., BEFORE 31.03.2009. THE BENEFICIAL PROVISIONS OF SECTION 80IB(10) SHOULD NOT BE DILUTED BY NARROW UNTENABLE INTERPRETATION B Y THE REVENUE AUTHORITIES. ACCORDINGLY, WE HOLD THAT THE ASSESSEE IS ENTITLED FOR CLAIMING DEDUCTION U/S.80IB(10) IN RESPECT OF 126 FLATS COMPLETED BEFO RE 31-3-2009 AS DISCUSSED ABOVE. THE ASSESSING OFFICER IS DIRECTED ACCORDING LY. SIMILAR ISSUE AROSE IN A.Y. 2008-09. FACTS BEING SIMILAR, SO FOLLOWING SA ME REASONING, THE CLAIM OF DEDUCTION U/S.80IB(10) IS DIRECTED TO BE ALLOWED. 5. SIMILAR ISSUE WAS ALSO CONSIDERED BY THE TRIBUNA L IN ASSESSMENT YEAR 2006-07 VIDE ITA NO.2133/PN/2012 DATED 13.06.2014 A ND BY FOLLOWING THE EARLIER PRECEDENT DATED 26.06.2013 (SUPRA), ASSESSE ES CLAIM FOR DEDUCTION U/S ITA NO.124/PN/2014 80-IB(10) OF THE ACT IN RELATION TO GULMOHAR PARAD ISE HOME, KHARADI PROJECT WAS ALLOWED. 6. FOLLOWING THE AFORESAID PRECEDENTS WHICH CONTINU E TO HOLD THE FIELD, WE HEREBY AFFIRM THE ORDER OF THE CIT(A) AND THE REVEN UE HAS TO FAIL ACCORDINGLY. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JANUARY, 2015. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 12 TH JANUARY, 2015. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE