ITO, Pune V. M/S Namrata Developers, Pune

ITA 1281/PUN/2012

• Counselvise Citation: 128124514 RSA 2012
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 11-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: NITIN W KHARE

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.1281/PN/2012 A.Y. 2008-09 ITO, WARD 8(3), PUNE APPELLANT VS. M/S. NAMRATA DEVELOPERS 592, RAVIWAR PETH TALEGAON DABHADE, TALUKA MAVAL, DIST. PUNE 410506 PAN: AABFN1735C RESPONDENT APPELLANT BY : SHRI P.L. P ATHADE RESPONDENT BY : SHRI NIT IN W. KHARE DATE OF HEARING: 05.03.2014 DATE OF ORDER : 11.03.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-V, [SHORT CI T(A)-V] PUNE, DATED 30.03.2012 FOR A.Y. 2008-09 ON THE FOLLOWING GROUNDS. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION U/S.80IB (10) ON TWO DIFFERENT PROJECTS CONSTRUCTED ON TWO PLOTS EAR MARKED AS PLOT NO.I AND PLOT NO.II ADMEASURING LESS THAN O NE ACRE, INDIVIDUALLY? 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER A NY OF THE ABOVE GROUNDS OF APPEAL. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILD ING CONSTRUCTION, HAD MADE CLAIM OF DEDUCTION U/S.80IB( 10) OF I.T. 2 ACT, AMOUNTING TO 60,86,057/-, WHICH PERTAINED TO TWO BUILDINGS NAMED AS NAMRATA SATELLITE AND NAMRATA MAGIC LOCATED AT S.NO.6/1/1(P), S.NO.7/1 & S.NO.7/2, PIMP ALE SAUDAGAR, PUNE. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, THE AREA OF TWO BUILDINGS WAS GOT MEASURED BY DEPAR TMENTAL VALUATION OFFICER (HEREINAFTER REFERRED TO AS DVO) WHO FILED THE REPORT BASED ON THE FIRST LAYOUT PLAN THAT BOTH THE BUILDINGS LOCATED AT PLOT NO. I AND PLOT NO. II WERE LESS THA N ONE ACRE AS THE AREA OF RESPECTIVE PLOTS WAS 1980 SQ. MTRS. AND 228 6.55 SQ. MTRS. RESPECTIVELY. THE ASSESSING OFFICER NOTICED THAT P LOT ON WHICH ABOVE TWO BUILDINGS WERE CONSTRUCTED WAS DIVIDED IN TO TWO PARTS DUE TO 30 METERS RESERVATION FOR D.P. ROAD AND 30 M ETERS RESERVATION FOR HCMTR (HIGH CAPACITY MASS TRANSPORT ATION ROUTE). THE ASSESSING OFFICER HELD THAT, SINCE THE PLOT OF LAND WAS DIVIDED ON ACCOUNT OF ABOVE RESERVATION AND SIN CE BOTH THE BUILDINGS WERE LOCATED IN PLOT NO. I AND PLOT NO. I I AS PER FIRST LAYOUT APPROVAL AND ALSO BECAUSE PLOT AREA OF THESE TWO BUILDINGS WERE LESS THAN ONE ACRE INDIVIDUALLY, THE ASSESSEE DID NOT FULFILL THE CONDITIONS STIPULATED IN THE PROVISIONS OF SECT ION 80IB(10) OF I.T. ACT, THEREFORE, HE HELD THAT THE ASSESSEE WAS NOT ENTITLED FOR DEDUCTION U/S.80IB(10). 2. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AU THORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AND HAVING BEEN CONSIDERED THE SAME, THE CIT(A) HAD GRANTED RELIEF TO THE ASSESSEE IN RESPECT OF DEDUCTION U/S. 80IB(10) AS DISCUSSED ABOVE. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE, INTER ALIA STATED THAT THE CIT(A ) WAS NOT JUSTIFIED IN ALLOWING DEDUCTION U/S.80IB(10) ON TWO DIFFERENT PROJECTS CONSTRUCTED ON TWO PLOTS EARMARKED AS PLOT NO.I AND PLOT NO.II ADMEASURING LESS THAN ONE ACRE, INDIVIDUALLY, ACCORDINGLY, THE ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESS ING OFFICER ON THE ISSUE BE RESTORED. ON THE OTHER HAND, LEARNED AUTHORIZED 3 REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A) AND SU BMITTED THAT THE ASSESSING OFFICER HAD ERRED IN DISALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) OF ACT BY TREATING THE SIZE OF PLOT AS LESS THAN ONE ACRE. THE ASSESSING OFFICER HAD FURTHER E RRED IN CONSTRUING THE STATEMENTS MADE BY THE GOVERNMENT AP PROVED VALUER IN HIS REPORT WITH REFERENCE TO THE AREA COV ERED UNDER EACH BUILDING AND HAS WRONGLY DEDUCED IT AS THE ARE A OF THE PLOT, ACCORDINGLY, THE ORDER OF CIT(A) ON THE ISSUE BE UP HELD. 3. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD, WE FIND THAT THE ASSESSEE FIRM HAD OBTAINED DEVELOPMENT RIGHTS IN PLOT NO.6/L/L(P) VIDE AGREEMENT DATED 05. 01.2005, WHICH WAS REGISTERED WITH THE CONCERNED SUB-REGISTRAR, PI MPRI CHINCHWAD. THE TOTAL AREA OF THIS PLOT WAS 6900 SQ .MTS. AND AFTER REDUCING 300 SQ.MTS OF APPROACH ROAD, REMAINI NG AREA WAS 6600 SQ.MTS. THE ASSESSEE GOT FIRST APPROVAL OF PC MC AUTHORITIES ON 28.04.2005. IN THE SAID APPROVAL, THE AREA OF L AND HAS BEEN SHOWN AT 6600 SQ.MTS. IT WAS EVIDENT THAT 30 MTS. WIDE D.P. ROAD AS WELL AS 30 MTS. HCMTR RESERVATION WAS THERE RIGHT IN BETWEEN THE PLOT. DUE TO THIS RESERVATION, THE PLO T HAS BEEN DIVIDED INTO TWO PARTS WHICH WAS SHOWN AS PLOT I & PLOT II IN THE AREA STATEMENT. THE ISSUE REGARDING TWO PLOTS HAS ARISEN BECAUSE OF MISTAKE ON ACCOUNT OF ARCHITECT AS THE P LOT WAS ONLY ONE AND THE NUMBERING AS PLOT I AND PLOT II WAS SHO WN IN THE AREA STATEMENT JUST FOR THE SAKE OF CONVENIENCE IN THE LIGHT OF RESERVATION MADE FOR D.P. ROAD AS WELL AS HCMTR. T HE PLAN WAS AGAIN REVISED ON 27.04.2006 INTER ALIA OPEN SPACE F OR THE FIRST BUILDING WAS LEFT ON PLOTS WHICH WERE LOCATED ON BO TH SIDES OF THE RESERVATION AS MENTIONED ABOVE. THEREAFTER, THE ASS ESSEE ACQUIRED TWO ADJACENT PLOTS AT S.NO.7/1 & 7/2 WHICH WERE MERGED AND CONSOLIDATED WITH THE EARLIER PLOT VIDE APPROVAL DATED 30.03.2007 AND THE OPEN SPACE FOR THE BUILDING WAS ALSO EARMARKED IN THIS NEWLY ACQUIRED AND CONSOLIDATED P LOT AT S.NO. 4 7/1 & 7/2 AS PER BUILDING PLAN APPROVED ON 30.03.20 07. THE PLOT NO.6/1/1/P WHICH WAS THE ORIGINAL PLOT WAS ONE PLOT IN 7/12 EXTRACT AND DUE TO RESERVATION IN THE PLOT ON ACCOU NT OF D.P. ROAD AS WELL AS HCMTR, IT COULD NOT BE SAID THAT THE PLO TS WERE TWO. THE FACTS OF THE CASE CAN BE SUMMARISED AS UNDER: 1. ORIGINALLY, THE PLOT 6/L/L(P) WAS ONE PLOT AND JUST BECAUSE THERE WAS RESERVATION ON THE PLOT ON ACCOUN T OF D.P. ROAD AS WELL AS HCMTR IT CANNOT BE SAID THAT T HE PLOT HAS BEEN DIVIDED INTO TWO. THE NUMBERING OF PLOTS IN PLOT I AND PLOT II BY THE ARCHITECT IN THE PLAN DATED 28.0 4.2005 WAS ONLY FOR THE SAKE OF CONVENIENCE AND THE FACT D OES NOT CHANGE DUE TO THAT. 2. IN 7/12 EXTRACT, THE PLOT HAS BEEN SHOWN AS ONE PLOT. 3. THE AREA STATEMENT SHOWS THE PLOT AS ONE PLOT. 4. THE OPEN SPACE FOR BOTH THE BUILDINGS HAVE BEEN SHOWN ON BOTH SIDES OF THE RESERVATION EARMARKED BY MUNIC IPAL AUTHORITIES FOR D.P. ROAD AND HCMTR. 5. TWO PLOTS I.E. S.NO.7/1 & 7/2 ARE ACQUIRED AND CONSOLIDATED IN THE ORIGINAL PLOT. 6. IN THE FIRST APPROVAL DATED 28.04.2005, THE AREA ON WHICH NAMRATA MAGIC BLDG. WAS CONSTRUCTED WAS NOT SHOWN A S DIFFERENT PROJECT BUT WAS SHOWN AS FUTURE DEVELOPME NT. 4. IN THIS BACKGROUND, IT WAS OBSERVED BY CIT(A) TH AT BOTH THE BUILDINGS WERE NOT SITUATED ON DIFFERENT PLOTS AND THEY WERE NOT DIFFERENT PROJECTS. FROM THE ABOVE, IT IS APPARENT THAT THE RESERVATION ON ACCOUNT OF D.P. ROAD AS WELL AS HCMT R WOULD NOT ALTER THE FACT THAT PLOT NO.6/L/L(P) WAS ONE PLOT A ND MERE DIVISION ON ACCOUNT OF RESERVATION WOULD NOT CHANGE THE CHAR ACTER OF THE EXISTING PLOT. THE CONDITION STIPULATED IN SECTION 80IB(10) WAS THAT PROJECT SHOULD BE OF ONE ACRE OF PLOT AND JUST BECAUSE THERE WAS RESERVATION ON THE PLOT ON ACCOUNT OF D.P. ROAD AS WELL AS HCMTR IT COULD NOT BE INFERRED THAT BOTH SIDES OF T HE PLOT WILL HAVE TO BE TREATED INDIVIDUALLY. IF THE AREA OF BOT H SIDES OF THE 5 PLOT WAS TAKEN TOGETHER THEN THE AREA EXCEEDS ONE A CRE AND THEREFORE, THE ASSESSEE WAS RIGHTLY HELD ENTITLED T O DEDUCTION U/S.80IB(10) OF THE ACT. THIS VIEW IS FORTIFIED BY THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . M/S.VANDANA PROPERTIES (2013) 353 ITR 36 (BOM), WHE REIN IT WAS HELD THAT MULTIPLE PROJECTS COULD BE COMPLETED ON O NE ACRE PLOT OF LAND. IN THIS BACKGROUND, THE CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/S.80IB(1 0). WE UPHOLD THE SAME. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 11 TH OF MARCH, 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 11 TH MARCH, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 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