The ITO, Ward-9(2), Ahmedabad V. M/s. Krishna Developers, Ahmedabad

ITA 1332/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85696 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: B R POPAT
• Keywords: Opportunity of being heard
• Section: 143(3); 80IB; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI , A.M. & SHRI KUL BHARAT, J.M. ) I. T. A. NO. 1332 / AHD/ 20 11 (A SSESSMENT YEAR: 2008 - 09) THE I.T.O, WARD 9(2), AHMEDABAD V/S M/S. KRISHNA DEVELOPERS C/O. VINOD T. PATEL VASTRAPUR, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAMFM 4076G APPELLANT BY : SHRI M.K. SINGH, SR. D.R. RESPONDENT BY : SHRI B.R. POPAT ( )/ ORDER DATE OF HEARING : 21 - 1 - 2015 DATE OF PRONOUNCEMENT : 13 - 02 - 2015 PER SHRI A NIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) - XV, AHMEDABAD DATED 04.03.2011 FOR A.Y. 2008 - 09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF COMMERCIAL BUILDING AS WELL AS RESIDENTIAL UNITS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 08 - 09 ON 19.09.2008 DECLARING TOTAL INCOME OF RS. NIL AFTER CLAIMING DEDUCTION OF RS. 79,63,073/ - ITA NO . 1332/AHD/2011 . A .Y. 2008 - 09 2 U/S. 80IB(10) OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 24.11.2010 AND THE TOTAL INCOME WAS DETERMINED AT RS. 79,63,073/ - BY DISALLOWING THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO BY FOLLOWING THE ORDER OF THE ASSESSEE IN A.Y. 2007 - 08 VIDE ORDER DATED 04.03.2011 ALLOWED THE CLAIM OF THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A ), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS; - 1. THE ID. COMMISSIONER OF INCOME - TAX (A) - XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS, IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE ASSESSEE'S CLAIM FOR DEDUCTION OF RS.79,63,073/ - U/S. 80IB(10) OF THE ACT. 2. THE ID. COMMISSIONER OF INCOME - TAX (A) - XV, AHMEDABAD HAS ERRED IN HOLDING THAT THE ASSESSEE FULFILLS THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S.80!B(10) EVEN WHEN THE LAND WAS IN THE NAME OF SHRI KRISHNA MEMBERS ASSOCIA TION WHICH IS A SEPARATE LEGAL ENTITY IN THE EYE OF LAW AND THE ASSESSEE ENTERED INTO THE PROJECT BY A DEVELOPMENT AGREEMENT WITH THE SOCIETY. THE ENTIRE RESPONSIBILITY TO EXECUTE THE HOUSING PROJECT AND ABIDE BY THE TERMS AND CONDITIONS OF ITS APPROVAL RI GHT FROM THE INCEPTION OF THE PROJECT .TILL ITS COMPLETION RESTS WITH THE SOCIETY. ASSESSEE WAS JUST A CONTRACTOR OF THE LAND OWNERS CONSTRUCTING 76 RESIDENTIAL BUNGALOWS AND NOT A DEVELOPER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMM ISSIONER OF INCOME - TAX (A) - XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE ID. COMMISSIONER OF INCOME - TAX(A) - XV, AHMEDABAD MAY BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 4. BEFORE US, IT WAS SUBMITTED THAT THE ONLY EFFECTIVE GROUND IS WITH RESPECT TO DEDUCTION U/S. 80IB OF THE ACT. ITA NO . 1332/AHD/2011 . A .Y. 2008 - 09 3 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NOTICED THAT ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT. HE ALSO NOTICED THAT W HILE PASSING THE ORDER FOR A.Y. 07 - 08 U/S. 143(3) ( ORDER DATED 22.12.2009 ) THE CLAIM OF ASSESSEE WAS DISALLOWED. HE ACCORDINGLY FOLLOWING THE REASONS RECORDED IN A.Y. 2007 - 08 DISALLOWED THE CLAIM OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION . AGGRIEVE D BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING AS UNDER: - 3. THE ONLY GROUND OF APPEAL PERTAINS TO THE DISALLOWANCE OF DEDUCTION CLAIMED U/S.80 IB(10). PERUSAL OF THE ASSESSMENT ORDER SHO WS THAT THE DEDUCTION WAS DENIED BY THE AO ON THE SAME GROUNDS AS THOSE TAKEN FOR MAKING THE DISALLOWANCE IN AY 2007 - 08 VIDE ASSESSMENT ORDER DATED 22.12.2009. AFTER GOING THROUGH RIVAL SUBMISSIONS THE AO IS DIRECTED TO ALLOW THE DEDUCTION BECAUSE FACTS TH IS YEAR ARE SAME AS WERE IN AY 2007 - 08 WHERE THROUGH THIS OFFICE APPELLATE ORDER DATED 19.11.2010 THE DEDUCTION WAS ALLOWED, THEREFORE RELYING ON THE APPELLATE ORDER IN THIS CASE FOR AY 2007 - 08 DEDUCTION IS ALLOWED THIS YEAR ALSO. 6. AGGRIEVED BY THE AFORESA ID ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 7. BEFORE US, LD. D.R. SUBMITTED THAT LD. CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF ASSESSEE HAD RELIED ON THE DE CISION IN THE ASSESSEE S OWN CA SE FOR A.Y. 2007 - 08. AGAINST THE ORDER FOR A.Y. 2 007 - 08, REVENUE HAD PREFERRED APPEAL BEFORE HON BLE TRIBUNAL. HON BLE TRIBUNAL WHILE DECIDING THE APPEAL IN ITA NO. 24/AHD/2011 ( ORDER DATED 17.05.2013 ) HAD REMITTED ISSUE BACK TO THE FILE OF LD. CIT(A) TO DECIDE THE ISSUE AFRESH. THE LD. D.R. THEREFORE SU BMITTED THAT SINCE THE ISSUE FOR A. Y. 2007 - 08 HAS BEEN RESTORED BACK TO THE FILE OF LD. CIT(A), THE PRESENT APPEAL ALSO NEEDS TO BE RESTORE D TO THE FILE OF LD. CIT(A). THE LD. A .R. ON THE OTHER HAND SUPPORTED THE ORDER OF LD. CIT(A). ITA NO . 1332/AHD/2011 . A .Y. 2008 - 09 4 8. WE HAVE HEARD THE RI VAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT A.O HAD DISALLOWED THE CLAIM OF THE ASSESSEE OF DEDUCTION UNDER 80IB(10) BY FOLLOWING THE DECISION IN THE ASSESSEE S OWN CASE FOR A.Y. 07 - 08. WE F URTHER FIND THAT LD. CIT(A) WHILE ALLOWING TH E CLAIM OF THE ASSESSEE , BY A CRYPTIC ORDER AND FOLLOWING THE DECISION OF LD. CIT(A) FOR A.Y. 07 - 08 , DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AGAINST WHICH APPEAL WAS PREFERRED BEFORE HON BLE TRIBUNAL BY REVENUE. WE FIND THAT THE CO - ORDINATE BENCH OF T RIBUNAL WHILE DECIDING THE APPEAL FOR A.Y. 07 - 08 FILED BY THE REVENUE , HAS REMITTED THE ISSUE BACK TO THE FILE OF LD. CIT(A) BY HOLDING AS UNDER: - 4. FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT A VERY CRYPTIC ORDER HAS BEEN PASSED BY LD. C IT(A) FOR DECIDING THIS ISSUE AND THE OBSERVATION OF LD. CIT(A) IN THIS PARA ARE CONTRADICTORY. LD. CIT(A) HIMSELF NOTED THAT THE AMOUNT OF MONEY GIVEN BY THE ASSESSEE OF RS.78,70,685/ - IS APPEARING IN THE BALANCE SHEET AS DEPOSITS AND ADVANCES AND AT THE SAME TIME, HE HAS NOTED THAT THE ASSESSEE HAS PRACTICALLY PURCHASED THE LAND AND ALSO BORE THE COST AND RISK OF DEVELOPING IT. WE FAIL TO UNDERSTAND AS TO WHEN THE AMOUNT PAID BY THE ASSESSEE IS BEING DECLARED AS DEPOSITS AND ADVANCE, HOW IT COULD BE SAID THAT THE ASSESSEE HAS PRACTICALLY PURCHASED THE LAND IN QUESTION. THIS FINDING OF LD. CIT(A) THAT THE ASSESSEE BORE THE COST AND RISK OF DEVELOPING THE LAND IS ALSO WITHOUT ANY BASIS AND HENCE, WE FEEL THAT UNDER THESE FACTS, THE ORDER OF LD. CIT(A) IS NOT SUSTAINABLE BUT WE ALSO FEEL THAT IN THE INTEREST OF JUSTICE, THIS ISSUE SHOULD GO BACK TO THE FILE OF LD. CIT(A) FOR A FRESH DECISION BY WAY OF PASSING A SPEAKING AND REASONED ORDER. ACCORDINGLY, THE ORDER OF LD. CIT(A) ON THIS ISSUE IS SET ASIDE AND THE MATTER IS RESTORED BACK TO HIS FILE FOR A FRESH DECISION. LD. CIT(A) SHOULD PASS SPEAKING AND REASONED ORDER AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 9. SINCE THE FACTS OF THE CASE UNDER APPEAL ARE IDENTICAL TO THAT OF A.Y. 07 - 08 AND WHICH HAS BEEN ADMITTED BY THE LOWER AUTHORITIES WHILE PASSING THE ITA NO . 1332/AHD/2011 . A .Y. 2008 - 09 5 RESPECTIVE ORDERS , WE FOR SIMILAR REASONS GIVEN BY THE CO - ORDINATE BENCH OF TRIBUNAL WHILE DECIDING THE APPEAL FOR A.Y. 07 - 08 ALSO RESTORE THE ISSUE BACK TO THE FILE OF LD. CIT(A) TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AND AFTER GIVING A REASONABLE OPPORTUNITY OF HE ARING TO THE ASSESSEE. THUS THE GROUND S OF REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PUR POSES. ORDER PRONOUNCED IN OPEN COURT ON 13 - 02 - 201 5 . SD/ - SD/ - (KUL BHARAT ) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD