M/s. Pratham Properties, Baroda V. The Dy.CIT, Circle-2(2), Baroda

ITA 1404/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6159 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-08-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 80IB

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JM AND SHRI AMARJIT SINGH, AM ./ITA.NO. 1404/AHD/2014 ( / ASSTT YEAR : 2008-09) M/S. PRATHAM PROPERTIES, PRATHAM, MAKARAND DESAI ROAD, NR. MOTHERS SCHOOL, BARODA-390007 PAN: AAHFP5012C VS. THE DCIT CIRCLE-2(2), AAYAKAR BHAWAN, RACE COURSE CIRCLE, VADODARA-390007 (APPELLANT) (RESPONDENT) / APPELLANT BY: NONE / RESPONDENT BY: RAJDEEP SINGH, SR. D.R / DATE OF HEARING 09-01-2018 /DATE OF PRONOUNCEMENT 01-02-2018 / O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER: IN THIS CASE RETURN OF INCOME DECLARING INCOME OF RS. 28,54,240/- WAS FILED ON 18.09.2008. SUBSEQUENTLY T HE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING NOTICE U/S. 143 (2) OF THE ACT ON 29.09.2009. ITA.NO.1404/AHD/2014 ASSESSMENT YEAR 2008-09 - 2 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. HAS NOTICED THAT ASSESSEE HAS UNDERTAKEN PROJECT LOCATE D IN FULLY DEVELOPED AREA OPPOSITE STAR HOTEL ON THE MAIN ROAD AND ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB(10) BY SHOWING PROF IT AROUND 30%. THEREFORE THE ASSESSEE WAS ASKED TO EXPLAIN BY THE RATE OF PROFIT ON WHICH DEDUCTION U/S. 80IB(10) WAS CLAIMED HIGHER THAN THE RATE OF PROFIT SHOWN AT 23.47% IN THE CASE OF R ESIDENTIAL PROJECTS AND 36.12% IN THE CASE OF COMMERCIAL PROJE CT. THE ASSESSEE HAS NOT SATISFACTORILY EXPLAINED THE COST OF CONSTRUCTION/SELLING RATE COMPARING WITH HIS OTHER PROJECTS IN WHICH DEDUCTION U/S. 80IB(10) WERE CLAIMED. THEREFORE THE A.O. HAS ESTIMATED THE PROFIT OF RESIDENTIAL UNIT AT 30% AND IN THE CASE OF COMMERCIAL 40% AS AGAINST SHOWN OF 36.11 BY THE ASS ESSEE. 3. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. C IT(A). THE LD. CIT(A) HAS SUSTAINED THE ADDITION BY STATING AS UNDER:- I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED AU THORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFIC ER. THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE THAT THE PROFIT R ATE OF M/S, PRATHAM DEVELOPERS IN WHICH THE ASSESSEE HAS CLAIMED DEDUCT ION U/S. 80 IB(10) AND HAS SHOWN PROFIT ON AROUND 30% CANNOT BE APPLIE D, IS WITHOUT ANY BASIS. THE ASSESSING OFFICER HAS MADE THE ESTIMATIO N OF PROFIT ON THE BASIS OF ASSESSEE'S OWN SISTER CONCERN WHICH IS BUI LDING PROJECTS IN ALMOST SAME VICINITY. APPELLANT HAS NOT BEEN ABLE TO DEMON STRATE IN ANY MANNER THAT HOW THE PROFIT RATE IN HIS CASE SHOULD BE LOWE R THAN THE NEIGHBORING PROJECTS. THE ASSESSEE WAS ASKED FOR THE EXPLANATIO N WHY THE PROFIT IN THE CASE WHERE CLAIM U/S. 80 18(10) IS HIGHER RATE OF P ROFIT AS COMPARED TO THE PROJECT UNDERTAKEN AS SHOWN 23.47% IN THE CASE OF RESIDENTIAL PROJECTS AND 36.12% IN THE CASE COMMERCIAL PROJECT. THE ONLY ARGUMENT OF THE ASSESSEE IS THAT IT IS DUE TO DIFFERENTIAL R ATE OF LAND OF THE PROJECT UNDER TAKEN AND DIFFERENT PROJECTS UNDERTAKEN IN WH ICH DEDUCTION U/S, 80 IB OF THE ACT. THE COST OF CONSTRUCTION IS ALMOST S AME. THE ASSESSEE HAS ITA.NO.1404/AHD/2014 ASSESSMENT YEAR 2008-09 - 3 SUBMITTED STATEMENT OF COST OF RESIDENTIAL AND COMM ERCIAL PROJECT FROM WHICH IT WAS OBSERVED THAT THE COST OF CONSTRUCTION INCLUDING LAND IN THE CASE OF RESIDENTIAL PROJECT IS 671.51 AND SELLING P RICE OF PER UNIT PER SQ.FT IS 877.47. WHEREAS, IN THE COMMERCIAL PROJECT THE TOTAL COST IS RS.751.06 SQ.FT AND SELLING RATE IS 1175.69. THE AS SESSING OFFICER HAS RIGHTLY CONTENDED THAT THE ASSESSEE HAS SHOWN COST OF CONSTRUCTION OF RESIDENTIAL AT RS.671.51 AND COST OF CONSTRUCTION O F COMMERCIAL UNIT AS 751.06. NORMALLY IN THE CASE OF FLATS, THE DIFFER ENT TYPE OF AMENITIES TO BE PROVIDED WHEREAS IN THE CASE OF COMMERCIAL SHOPS NO SUCH AMENITIES REQUIRED TO BE PROVIDED. IN THE SHOPS, THREE WALL S WITH SHUTTER ARE TO BE PROVIDED AND THEREFORE, THE COST OF CONSTRUCTION OF THE SHOP SHOULD BE LESS THAN THE COST OF CONSTRUCTION OF FLATS. IN VIEW OF ABOVE THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS NOT SA TISFACTORILY COST OF CONSTRUCTION, SELLING RATE COMPARING WITH HIS OTHER PROJECTS IN WHICH DEDUCTION U/S. 80 IB(10) CLAIMED. HE THEREFORE, EST IMATE PROFIT OF RESIDENTIAL UNIT AT 30% AS AGAINST 23.47% SHOWN BY THE ASSESSEE AND IN THE CASE OF COMMERCIAL 40% AS AGAINST 36.11%. THE A SSESSING OFFICER ACCORDINGLY MADE ADDITION OF RS.10,83,700/- I.E. RS .5,22,000/- IN RESPECT OF COMMERCIAL UNITS SOLD (40-36.12% ON SALES OF RS. 1,34,47,287/-) AND ADDITION OF RS.5,61,700/- IN RESPECT OF RESIDENTIAL UNITS SOLD (30-23,47% ON SALES OF RS.86,04,400). CONSIDERING THE TOTAL FA CTS, IT IS HELD THAT THE ACTION OF THE ASSESSING OFFICER DOES NOT CALL FOR A NY INTERFERENCE AND THE ADDITION MADE BY HIM IS CONFIRMED. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US. NO ONE HAS ATTENDED FROM THE SIDE OF THE ASSESSEE. THE LD. D.R HAS SUPPORTED THE ORDER OF LD. CIT(A). AFTER PERUSAL OF MATERIAL ON RECORD CAREFULLY, WE OBSERVED THAT THE ASSESSEE HAS NOT SUBSTANTIATED WITH RELEVANT FACTS THAT WHY THE GROS S PROFIT IN RESPECT OF PROJECT ON WHICH DEDUCTION U/S. 80IB WA S CLAIMED SHOWN AT HIGHER RATE COMPARED TO THE OTHER PROJECT UNDERTAKEN FOR RESIDENTIAL AND COMMERCIAL PROJECT. WE OBSERVE THAT THE ASSESSEE HAS NOT EXPLAINED WITH RELEVANT EVIDENCES THAT WHY RATE OF PROFIT IN ITA.NO.1404/AHD/2014 ASSESSMENT YEAR 2008-09 - 4 RESPECT OF PROJECT ON WHICH 80IB(10) DEDUCTION IS A VAILABLE IS MORE COMPARED TO THE PROJECT ON WHICH 80IB(10) DEDUCTION IS NOT AVAILABLE. THE ASSESSEE HAS NOT HIGHLIGHTED ANY OTH ER FACTOR WHICH CAN AFFECT THE PROFITABILITY OF THE RESIDENTIAL AND COMMERCIAL UNITS IN THE SAME LOCALITY AND IN THE SAME CITY. THEREFORE A FTER CONSIDERING THE DETAIL FINDING OF THE LD. CIT(A) WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF LD. CIT(A). 5. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 01/ 02/2018 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (AMARJIT SINGH) ACCOUNTANT MEMBER DATED, 01/ 02/2018 MUKUL !' #' / COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. &$% / THE RESPONDENT. 3. '(( ) * / CONCERNED CIT 4. ) * ( ) / THE CIT(A)- 5. '-. , , /DR,ITAT, AHMEDABAD. 6. .0 12 / GUARD FILE. ) ' / BY ORDER, ' (3 (ASSTT.REGISTRAR) ITAT, AHMEDABAD