ACIT, Pune V. H.A.Developers, Pune

ITA 1274/PUN/2012

• Counselvise Citation: 127424514 RSA 2012
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 11-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.869/PN/2012 (A.Y.2007-08) M/S. H.A. DEVELOPERS, P.NO.2, LALIT RAJ PARK, TANAJI NAGAR, CHINCHWAD, PUNE - 411033 PAN: AACFH5498M APPELLANT VS. JT. CIT, RANGE-9, PUNE RESPONDENT ITA NO.1274/PN/2012 (A.Y.2007-08) JT. CIT, RANGE-9, PUNE APPELLANT VS. M/S. H.A. DEVELOPERS, P.NO.2, LALIT RAJ PARK, TANAJI NAGAR, CHINCHWAD, PUNE - 411033 PAN: AACFH5498M RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK DEPARTMENT BY : SHRI P.L. PATHADE DATE OF HEARING : 04.12.2013 DATE OF ORDER : 24.12.2013 ORDER PER SHAILENDRA KUMAR YADAV, J.M: BOTH THESE CROSS APPEALS AROSE OUT OF ORDER OF CIT (A)-V, PUNE DATED 07.03.2012 AND PERTAINS TO THE SAME ASSESSEE. SO THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 2. IN ITA NO.869/PN/2012, THE ASSESSEE RAISED THE F OLLOWING GROUNDS: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE OF DEDUCTION U/S 80IB(10) OF RS.75,67,268/- IN RESPECT OF THE PROFITS OF THE PROJECT 'DWARAKA RAJ PARK'. 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE APPELL ANT WAS NOT ENTITLED TO CLAIM DEDUCTION U/S 80IB(10) ON THE GROUND THAT THE BUILT UP AREA OF SOME OF THE UNITS EXCEEDE D 1500 SQ.FT. AND HENCE, ONE OF THE BASIC CONDITIONS FOR C LAIMING DEDUCTION U/S 80IB(10) WAS NOT FULFILLED BY THE APP ELLANT. 3. WITHOUT PREJUDICE TO THE GROUND NOS.1 & 2, THE LEAR NED A.O. ERRED IN NOT ALLOWING THE DEDUCTION U/S 80IB(10) ON THE PROFITS FROM THE PROJECT DWARAKA RAJ PARK AT LEAST IN RESPECT OF THE OTHER FIATS / UNITS WHOSE BUILT UP AREA WAS LESS THAN 1500 SQ.FT. 4. THE APPELLANT CRAVES /EAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILD ERS AND DEVELOPERS. THE ASSESSEE HAS BEEN DENIED DEDUCTION U/S.80IB(10) OF RS.75,67,268/- IN RESPECT OF PROFIT DERIVED FROM PR OJECT DWARAKA RAJ PARK. THE DISALLOWANCE WAS MADE BY THE ASSESSING O FFICER THAT BUILT UP AREA OF THE UNIT EXCEEDED 1500 SQ.FT AND HENCE O NE OF THE BASIC CONDITIONS FOR CLAIM U/S.80IB(10) WAS NOT FULFILLED , SAME WAS CONFIRMED BY CIT(A). AT THE OUTSET OF HEARING, LEA RNED AUTHORIZED REPRESENTATIVE POINTED OUT THAT THE ISSUE IS COVERE D IN FAVOUR OF ASSESSEE BY THE ORDER OF ITAT IN ITA NO.423/PN/2011 FOR A.Y. 2007- 08 IN THE CASE OF M/S. ROHAN HOMES VS. ACIT, WHEREI N, THE TRIBUNAL HAS DECIDED THE SIMILAR ISSUE IN FAVOUR OF ASSESSEE BY OBSERVING AS UNDER: 15. PERTINENTLY, IT WOULD ALSO BE APPROPRIATE TO NOTICE THAT THE AFORESAID DECISION OF THE KOLKATA BENCH OF THE TRIB UNAL HAS SINCE BEEN CONFIRMED BY THE HONBLE CALCUTTA HIGH C OURT VIDE ITS ORDER IN THE CASE OF BENGAL AMBUJA HOUSING DEVE LOPMENT LTD., DATED 05.01.2007. THE PUNE BENCH OF THE TRIB UNAL IN THE CASE OF D.S. KULKARNI DEVELOPERS LTD. (SUPRA) HAS A LSO UPHELD SIMILAR PROPOSITION FOLLOWING THE AFORESAID PRECEDE NTS. 3 16. FOLLOWING THE AFORESAID PRECEDENTS, WE ARE THE REFORE, OF THE VIEW THAT MERELY THE ASSESSEE HAS VIOLATED THE COND ITIONS U/S. 80-IB(10)(C) OF THE ACT IN RELATION TO 17 FLATS, IT CANNOT BE DENIED THE DEDUCTION U/S 80-IB(10) OF THE ACT ON ENTIRE PR OFITS OF THE PROJECT WHICH PERTINENTLY INCLUDE PROFITS IN RELATI ON TO RESIDENTIAL UNITS WHICH COMPLY WITH THE LIMITS PRES CRIBED IN SEC. 80-IB(10)(C) OF THE ACT. OF COURSE, THE DEDUCTIONS U/S 80-IB(10) OF THE ACT SHALL BE DENIED ON THE PROFITS PROPORTIO NATE TO 17 FLATS WHICH ARE IN VIOLATION OF SEC. 80-IB(10) OF T HE ACT. FOR BALANCE OF THE RESIDENTIAL UNITS, THE PLEA OF THE A SSESSEE FOR DEDUCTION U/S 80-IB(10) OF THE ACT, IN OUR VIEW, IS FAIR AND REASONABLE. WE HOLD SO. 4. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASO NING, WE HOLD THAT THE ASSESSEE IS ENTITLED TO PROPORTIONATE DEDU CTION EXCLUDING UNITS WHERE BUILT UP AREA EXCEEDS 1500 SQ.FT. THIS VIEW IS FORTIFIED BY THE ORDER OF ITAT IN THE CASE OF M/S. ROHAN HOME S VIDE ITA NO.423/PN/2011. THEREFORE, WE RESTORE THE ISSUE TO THE ASSESSING OFFICER TO RE-WORK AND ALLOW U/S.80IB(10) TO THE AS SESSEE. 5. IN ITA NO.1274/PN/2012, THE REVENUE HAS RAISED F OLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSE SSEE IN RESPECT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S. 8 0IB(10) IN RESPECT OF THE PROJECT MORYA GOSAVI RAJ PARK, 1 ST PHASE, WITHOUT CONSIDERING THAT THE PROJECT CONSISTED OF C OMMERCIAL AREA AND WAS SANCTIONED PRIOR TO THE AMENDED PROVIS IONS W.E.F. 01.04.2005. 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER A NY OF THE ABOVE GROUNDS OF APPEAL. 6. THE ISSUE IS REGARDING ALLOWABILITY OF DEDUCTION CLAIMED U/S. 80IB(10) IN RESPECT OF PROJECT MORYA GOSAWI RAJ PA RK, 1 ST PHASE ON ACCOUNT OF COMMERCIAL AREA. THIS ISSUE IS COVERED BY THE ORDER OF ITAT IN ASSESSEES OWN CASE FOR A.Y.2005-06 VIDE PA RA NO.2 OF ITA NO.373/PN/2009 AND ITA NO.611/PN/2009. NOTHING CON TRARY WAS BROUGHT TO OUR KNOWLEDGE. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, WE ARE NOT INCLINED TO INTERFERE WI TH THE FINDINGS OF CIT(A), WHO HAS ALLOWED THE CLAIM OF DEDUCTION U/S. 80IB(10) IN RESPECT OF MORYA GOSAWI RAJ PARK, 1 ST PHASE, WHICH WAS DISALLOWED 4 ON ACCOUNT OF COMMERCIAL ARE IN THE PROJECT. MOREO VER, THIS ISSUE IS FORTIFIED BY THE DECISION OF BOMBAY HIGH COURT IN T HE CASE OF BHAHMA ASSOCIATES AND OTHERS (2011) 239 CTR 30 (BO M). PROVISIONS UNDER SUB-SECTION 10 TO 80IB(10) AS AMEN DED W.E.F. 01.04.2005, THE LEGISLATURE ALWAYS INTENDED THAT TH E PROJECT MUST BE APPROVED BY LOCAL AUTHORITY, THUS IN THOSE APPROVED PROJECTS, WHERE CONSTRUCTION HAS BEEN STARTED EARLIER 01.04.2005, A SSESSEE IS REQUIRED TO COMPLETE THE PLAN AS IT HAS BEEN APPROV ED. AS PUTTING SUCH ASSESSEE TO COMPLETE THE PLAN MEETING OUT THE CONDITIONS OF CLAUSE (D) OF SUB-SECTION WOULD LEAD INTO ABSURDITY AND IMPOSSIBILITY FOR THE ASSESSEE AND IN CONTRADICTION OF PROVISIONS U/S.80IB(10) AS PREVAILED AT THE TIME OF APPROVAL AND COMMENCEMENT OF CONSTRUCTION OF PROJECTS WELL BEFORE 01.04.2005. IN THE PRESENT CASE, PROJECT HAS COMMERCIAL AREA, HENCE WAS SANCTIONED PRIOR TO AMEN DED PROVISIONS W.E.F. 01.04.2005. THIS AMENDMENT IS NOT RETROSPEC TIVE, ACCORDINGLY, ORDER OF CIT(A) ON THE ISSUE IS UPHELD. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND THE APPEAL OF REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THE DAY OF 24 TH DECEMBER 2013. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 24 TH DECEMBER, 2013 GCVSR COPY TO:- 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-V, PUNE 4. THE CIT-V, PUNE 5. THE DR, A BENCH, I.T.A.T., PUNE. 6. GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE