Income -tax Officer, Pune V. M/s. Eisha Supershwa Developments, Pune

ITA 1259/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6068 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 18-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASHANT GUDEKAR
• Assessee Lawyers: VIPIN GUJARATHI
• Keywords: Non compliance
• Section: 143(3); 80IB

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1259/PUN/2017 / ASSESSMENT YEAR : 2013-14 THE INCOME TAX OFFICER, WARD 7(1), PUNE. . / APPELLANT. V/S M/S. EISHA SUPERSHWA DEVELOPMENTS, 5, SAN MAHU COMPLEX, BUND GARDEN ROAD, OPP. POONA CLUB, PUNE. PAN : AACFE3247R. . / RESPONDENT ASSESSEE BY : SHRI VIPIN GUJARATHI. REVENUE BY : SHRI PRASHANT GUDEKAR. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A)-5, PUNE DATED 12.12.2016 FO R THE ASSESSMENT YEAR 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN T HE BUSINESS OF REAL ESTATE DEVELOPMENT. ASSESSEE FILED ITS RET URN OF INCOME FOR A.Y. 2013-14 ON 29.09.2013 DECLARING TOTAL INCOME AT RS.NIL AFTER CLAIMING DEDUCTION OF RS.2,01,05,481/- U/S 80IB(10) OF THE ACT. THE / DATE OF HEARING : 17.07.2019 / DATE OF PRONOUNCEMENT: 01.08.2019 2 CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSME NT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.08.02.2016 AND THE TO TAL INCOME WAS DETERMINED AT RS.2,53,31,910/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.12.1 2.2016 (IN APPEAL NO.PN/CIT(A)-5/ITO WARD-7(1), PUNE/406/2015-16) GR ANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORD ER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLO WING EFFECTIVE GROUND : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD.CIT(A) WAS JUSTIFIED IN ALLOWING THE DEDUCTION U/S 80IB(10) OF THE INCOME TAX ACT, 1961 ON PROPORTIONA TE BASIS IN RESPECT OF THE HOUSING PROJECT EISHA LOREAL. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT ASSESSEE HAD CLAIMED DEDUCTION OF RS.2,01,05,481/- U/S 80IB (10) OF THE ACT IN RESPECT TO THE HOUSING PROJECT NAMED EISHA LOR EALS CONSTRUCTED ON A PLOT OF LAND SITUATED AT SR.NO.13, H.NO.2, 3, 4/2, KONDWA KHUND, PUNE. AO ON PERUSING THE REPORT OF GOVERNMENT REGIST ERED VALUER SHRI NITIN LELE, NOTICED THAT TWO FLATS BEARING NO.B-201 AND B- 504 WERE SOLD TO SAME PERSON. AO ON THE BASIS OF AFORESAID REPOR T OF REGISTERED VALUER, CONCLUDED THAT ASSESSEE HAD FAILED TO COMPLY WITH THE CONDITION NAMELY, OF ALLOTTING MORE THAN ONE RESIDENTIAL UNIT IN A HOU SING PROJECT TO ONE PERSON AND THEREBY VIOLATED THE PROVISIONS OF SEC .80IB(10) OF THE ACT. HE WAS OF THE VIEW THAT FOR CLAIMING DEDUCTION U/S 80 IB(10) OF THE ACT, ALL THE CONDITIONS STIPULATED THEREIN ARE REQUIRED TO B E FULFILLED IN TOTALITY. HE NOTED THAT SINCE ASSESSEE HAS FAILED TO COMP LY WITH ONE OF THE CONDITIONS STIPULATED U/S 80IB(10) OF THE ACT THEREFO RE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. HE ACCOR DINGLY DENIED THE ENTIRE CLAIM OF DEDUCTION OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO FOLLOWIN G THE 3 DECISIONS OF HONBLE HIGH COURT AND TRIBUNAL CITED IN HER OR DER HELD THAT ASSESSEE IS ENTITLED TO PROPORTIONATE DEDUCTION ON THE PROFITS OF THE ELIGIBLE UNITS WHICH COMPLIED WITH THE PROVISIONS OF SEC.80IB(10) OF THE ACT AND WHERE THERE HAS BEEN NON COMPLIANCE OF PROVISION S OF SEC.80IB(10) (E) AND (F), THE DEDUCTION CLAIMED ON THOSE RESIDEN TIAL UNITS HAS TO BE DISALLOWED. SHE ACCORDINGLY DIRECTED THE AO TO WORK OUT THE PROPORTIONATE DEDUCTION. AGGRIEVED BY THE ORDER OF LD.C IT(A), REVENUE IS NOW BEFORE US. 4. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF AO. LD.A.R. ON THE OTHER HAND, REITERATED THE SUBMISSIONS MADE BEFORE AO AN D LD.CIT(A) AND FURTHER RELIED ON THE DECISION OF PUNE TRIBUNAL IN THE CASE OF SUKHWANI CHAWLA COMBINE VS. ACIT IN ITA NO.697 & 900/PUN/ 2015 ORDER DT.25.09.2017 FOR THE PROPOSITION THAT THE PRINCIPLE OF PROPORTIONATE DEDUCTION IS TO BE ALLOWED TO THE EXTENT A SSESSEE HAS COMPLIED WITH THE PROVISIONS OF SEC.80IB(10) OF THE ACT. HE P OINTED TO THE RELEVANT PARA 8 OF THE ORDER. HE THUS SUPPORTED T HE ORDER OF LD.CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPEC T TO DENIAL OF CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. AO HAD DENIE D THE ENTIRE CLAIM OF DEDUCTION FOR THE REASON THAT ASSESSEE HAD SOLD TWO FLATS TO THE SINGLE BUYER, THEREBY VIOLATING THE PROVISIONS OF SEC.80IB( 10)(E) OF THE ACT. LD.CIT(A) BY FOLLOWING THE ORDERS OF TRIBUNAL AND HON BLE HIGH COURT CITED IN HER ORDER HAS HELD THAT THE ASSESSEE CA NNOT BE DENIED THE BENEFIT OF DEDUCTION ON THE ENTIRETY AND THE DEDUCTION C AN BE DENIED ONLY ON UNITS WHERE THERE HAS BEEN VIOLATION OF PROVISION S OF 4 SEC.80IB(10). WE ALSO FIND THAT THE HONBLE MADRAS HIGH C OURT IN THE CASE OF CIT VS. ARUN EXCELLO FOUNDATIONS (P) LTD., REPORT ED IN 29 TAXMAN.COM 149 (MAD) HAS APPROVED THE PRINCIPAL OF PROPOR TIONATE DEDUCTION TO THE EXTENT ASSESSEE HAS COMPLIED WITH THE PROVISIONS OF SEC.80IB(10) OF THE ACT. BEFORE US, REVENUE HAS NOT PLACE D ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF LD. CIT(A) NOR HAS PLACED ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFO RESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). THUS, THE GROUND OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON 1 ST DAY OF AUGUST, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 1 ST AUGUST, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A) 5, PUNE. PR. CIT, PUNE-4, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.