ITO, Nashik V. M/s Daptarya Realtors P.Ltd, Nashik

ITA 1276/PUN/2013

• Counselvise Citation: 127624514 RSA 2013
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: SUNIL PATHAK
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1276/PN/2013 A.Y. 2009-10 ITO, WARD 1(2), NASHIK APPELLANT VS. M/S. DAPTARYS REALTORS PVT. LTD., 8, SUYOJANA, VISE MALA, CANADA CORNER, NASHIK - 422005 PAN: AAACD6253B RESPONDENT APPELLANT BY : SHRI P.L. P ATHADE RESPONDENT BY : SHRI SUN IL PATHAK DATE OF HEARING: 17.02.2014 DATE OF ORDER : 18.02.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-I, [SHORT CI T(A)-I] NASHIK, DATED 25.03.2013 FOR A.Y. 2009-10 ON THE FO LLOWING GROUNDS. 1) IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT(A) ERRED IN DELETING THE ADDITI ON OF RS. 17,71,446/- MADE BY THE A.O. BY DISALLOWING THE ASSESSEE'S CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. 2) IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT (A) ERRED IN HOLDING THAT THE ASSESSEE HAD FULFILLED ALL THE CONDITIONS PRESCRIBED UNDER S ECTION 80IB(10) OF THE ACT AND ACCEPTING THE ASSESSEE'S CL AIMS. 2 3) IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT (A) IS NOT JUSTIFIED IN NOT APPREC IATING THAT COMMERCIAL AREA IN THE HOUSING PROJECT EXCEEDED 2000 SQ. FT. THUS CONTRAVENING ONE OF THE PROVISION FOR B EING ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTIO N 80IB(10). 4) THE ORDER OF THE LD. CIT (A) BE CANCELLED AND THAT OF THE A.O. BE RESTORED. 5) THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND GROUN DS OF APPEAL. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND CA RRYING ON THE BUSINESS AS BUILDERS AND DEVELOPERS. THE ASSES SEE COMPANY CONSTRUCTED PROJECT SIDDHAMUNI RESIDENTIAL COMPLEX AT S.NO.858/2A + 2B+859/2/1 AT GANESHBABA NAGAR. THE ASSESSEE FOLLOWED PROJECT COMPLETION METHOD AND HAS SHOWN SA LES OF 67,91,916/- ON WHICH INCOME OF 17,71,446/- HAS BEEN DECLARED. THE ASSESSEE CLAIMED DEDUCTION U/S.80IB( 10) ON THE INCOME OF 17,71,446/-. THE ASSESSING OFFICER DISALLOWED THE ASSESSEES CLAIM OF DEDUCTION U/S.80IB(10) AMOUNTIN G TO 17,71,446/- ON THE GROUND THAT THE ASSESSEE DID NOT FULFILL THE CONDITIONS PRESCRIBED U/S.80IB(10) OF I.T. ACT. TH E MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHO H AS ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE ASSESSEES O WN CASE ON SIMILAR ISSUE FOR A.Y. 2008-09. NOTHING CONTRARY W AS BROUGHT TO OUR KNOWLEDGE. FACTS BEING SIMILAR, SO FOLLOWING T HE SAME REASONING, WE ARE NOT INCLINED TO INTERFERE WITH TH E FINDINGS OF CIT(A) WHO HAS ALLOWED THE CLAIM OF THE ASSESSEE U/ S.80IB(10) FOLLOWING THE TRIBUNALS DECISION IN ASSESSEES OWN CASE FOR A.Y. 2008-09, WHEREIN THE TRIBUNAL HAS HELD AS UNDER: 18. WE HAVE CAREFULLY CONSIDERED THE PLEA SET UP B Y THE ASSESSEE TO THE EFFECT THAT THE ADDITION IN QUESTIO N IS ELIGIBLE FOR DEDUCTION U/S 80-IB(10) OF THE ACT AND THEREFOR E, THE SAME IS REVENUE NEUTRAL. THE PRIMARY BASIS FOR THE PLEA OF THE ASSESSEE IS THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SHETH DEVELOPERS (SUPRA). IN THE CASE BEFORE THE HONBLE BOMBAY HIGH COURT, THE ISSUE REL ATED TO 3 DETERMINATION OF UNDISCLOSED INCOME FOR THE BLOCK P ERIOD. PERTINENTLY, THE UNDISCLOSED INCOME IN QUESTION FOU ND WAS IN THE FORM OF CASH WHICH WAS EXPLAINED BY THE ASSE SSEE AS HAVING BEEN ACQUIRED WHILE CARRYING ON BUSINESS AS A BUILDER AND SUCH EXPLANATION WAS ACCEPTED BY THE ASSESSING OFFICER AND WHILE ASSESSING THE UNDISCLOS ED INCOME FOR THE BLOCK PERIOD, THE SAME WAS ASSESSED AS INCOME FROM PROFITS AND GAINS OF BUSINESS OR PROFE SSION. IN THIS BACKGROUND, THE HONBLE HIGH COURT NOTICED THA T THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80-IB(10) O F THE ACT WITH RESPECT TO SUCH INCOME. 19. IN THE PRESENT CASE, THE FACTS ARE QUALITATIVEL Y DIFFERENT. PERTINENTLY, IN THE PRESENT CASE, THE INCOME IN QUE STION HAS BEEN ASSESSED BY THE ASSESSING OFFICER AS INCOME F ROM OTHER SOURCES, AND HE HAS NOT ACCEPTED THE PLEA OF THE ASSESSEE THAT SUCH INCOME IS LIABLE TO BE ASSESSED AS PROFITS AND GAINS FROM BUSINESS OR PROFESSION. THE DIRECT IONS ISSUED BY THE ADDITIONAL CIT U/S 144A ON THIS ASPEC T CLEARLY POINTS OUT INVOKING OF SECTION 69A OF THE ACT AND F OR THAT REASON THE AMOUNT IS ASSESSED AS INCOME UNDER THE H EAD INCOME FROM OTHER SOURCES. IN THE CASE BEFORE TH E HONBLE HIGH COURT, IT WAS SPECIFICALLY NOTED BY THE HONBL E HIGH COURT THAT THE APPLICABILITY OF SECTIONS 68, 69, 69 A, 69B AND 69C DOES NOT ARISE AS THE SAME WERE NOT INVOKED BY THE DEPARTMENT, AND IT WAS THEREFORE, AN ADMITTED POSIT ION IN THE CASE BEFORE THE HONBLE HIGH COURT THAT THE UND ISCLOSED INCOME WAS, IN FACT, RECEIVED BY THE ASSESSEE IN TH E COURSE OF CARRYING OUT ITS BUSINESS ACTIVITIES AS A BUILDE R. IN THE PRESENT CASE, THE FACTS ARE QUITE OTHERWISE. IN FA CT, WE HAVE ALREADY EXTRACTED EARLIER THE STATEMENT TENDERED BY THE DIRECTOR OF THE ASSESSEE IN RESPONSE TO THE SPECIFI C QUESTION WHICH SHOWS THAT THE PURPOSE OF SUCH RECEIPT HAS NOT BEEN EXPLAINED. IN FACT, THE ASSESSING OFFICER IN PARA 5.1 OF THE ASSESSMENT ORDER HAS AGAIN NOTED THAT THE DETAILS W ITH REGARD TO THE PURPOSE HAD NOT BEEN FURNISHED BY THE ASSESSEE. THE PLEA OF THE LEARNED COUNSEL FOR THE A SSESSEE THAT THE NAME OF THE CUSTOMERS AND THE AMOUNT RECEI VED ARE IDENTIFIED, IN OUR VIEW, THE AFORESAID BY ITSE LF DOES NOT SHOW AS TO FOR WHAT PURPOSE THE AMOUNTS HAVE BEEN RECEIVED SO AS TO INFER WHETHER THE SAME ARE DERIVE D FROM THE ACTIVITIES ELIGIBLE FOR DEDUCTION U/S 80-IB(10) BENEFITS. FOR THE AFORESAID REASONS, WE THEREFORE, DO NOT FIN D THAT THE CLAIM OF THE ASSESSEE IS JUSTIFIABLE AS THE FACTS A ND CIRCUMSTANCES ARE QUITE DISTINCT FROM THOSE CONSIDE RED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SHETH DEVELOPERS (SUPRA). THUS, THE ASSESSEE HAS TO FAIL IN ITS GROUND OF APPEAL. 4 20. SO FAR AS THE GRIEVANCE OF THE REVENUE IS CONCE RNED, ON THIS ASPECT ALSO, WE FIND THAT THE CIT(A) HAD NO JU STIFIABLE REASONS TO REDUCE THE ADDITION TO RS. 6,50,828/- IN STEAD OF RS. 19,77,000/-. THE CIT(A) HAS GONE ON A PRESUMPT ION THAT THE AMOUNT RECEIVED WOULD BE FOR ANY SPECIFIC PURPOSE WHICH REQUIRED INCURRENCE OF EXPENDITURE IN THE FOR M OF LABOUR AND MATERIAL, ETC. PERTINENTLY, AT NO STAGE HAS THE ASSESSEE EXPLAINED THE PURPOSE OF SUCH RECEIPTS SO AS TO GAUGE THAT ANY CORRESPONDING EXPENDITURE WOULD HAVE BEEN INCURRED BY IT. IN FACT, THE ANSWER OF THE DIRECTOR OF THE ASSESSEE-COMPANY, EXTRACTED BY US IN PARA 13 OF OU R ORDER, SHOWS THAT WHATEVER EXPENDITURE WAS IDENTIFIED BY T HE ASSESSEE WAS ALLOWED REDUCTION AND ONLY THE BALANCE HAS BEEN ASSESSED AS INCOME FROM OTHER SOURCES. IN T HE VERY SAME ANSWER, IT WAS AVERRED THAT THE DETAILS FOR SU CH BALANCE AMOUNT VIZ. PURPOSE, ETC. WOULD BE PROVIDED LATER. OSTENSIBLY, NO SUCH DETAILS HAVE BEEN PROVIDED LATE R IN THE ASSESSMENT PROCEEDINGS. THEREFORE, WE SET ASIDE T HE ORDER OF THE CIT(A) ON THIS ASPECT AND RESTORE THE ADDITI ON OF RS. 19,77,000/- AS MADE BY THE ASSESSING OFFICER. ON T HIS GROUND, THE REVENUE SUCCEEDS. 21. RESULTANTLY, WHEREAS THE APPEAL OF THE REVENUE IS PARTLY ALLOWED AND THAT OF THE ASSESSEE IS DISMISSE D. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONI NG, CIT(A) WAS JUSTIFIED IN ALLOWING THE CLAIM OF ASSESSEE, DE NIED BY THE ASSESSING OFFICER, BECAUSE THE ASSESSEE HAS FULFILL ED THE CONDITIONS LAID DOWN U/S.80IB(10). SO, THERE WAS N O JUSTIFICATION DONE BY THE ASSESSING OFFICER BY DISALLOWING THE CL AIM MADE BY THE ASSESSEE. ACCORDINGLY, THE ORDER OF CIT(A) IS UPHELD ON THE ISSUE. 3. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 18 TH OF FEBRUARY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 18 TH FEBRUARY, 2014 GCVSR 5 COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I, NASHIK 4) THE CIT-I, NASHIK 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