Deputy Commissioner of Income-tax, V. D.S. Kulkarni Developers Pvt. Ltd., Pune

ITA 1438/PUN/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9914 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-09-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 02-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHEI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1437 TO 1439/PUN/2015 ! ! / ASSESSMENT YEAR : 2006-07, 2011-12 & 2012-13 DY.CIT, CIRCLE-1(2), PUNE ....... / APPELLANT / V/S. D.S. KULKARNI DEVELOPERS PVT. LTD., DSK HOUSE, 1187/60, J.M. ROAD, SHIVAJINGAR, PUNE 411005 PAN : AAACD6413H / RESPONDENT APPELLANT BY : SHRI SANJEEV GHEI RESPONDENT BY : NONE / DATE OF HEARING : 18.09.2018 / DATE OF PRONOUNCEMENT : 26.09.2018 / ORDER PER D. KARUNAKARA RAO, AM THERE ARE 3 APPEALS FILED BY THE REVENUE UNDER CONSIDER ATION INVOLVING A.YRS. 2006-07, 2011-12 AND 2012-13. THEY ARE FILE D AGAINST THE SEPARATE ORDERS OF CIT(A)-1, PUNE, COMMONLY DATED 2 4-08-2015. REVENUE RAISED IDENTICAL GROUNDS IN THESE APPEALS. FOR TH E SAKE OF CONVENIENCE, ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DECIDED IN THIS COMPOSITE ORDER. 2 ITA NOS1437 TO 1439/PUN/2015 D.S. KULKARNI DEVELOPERS PVT. LTD., 2. THERE IS NONE TO REPRESENT THE ASSESSEE DESPITE SE RVICE OF NOTICE. ACKNOWLEDGEMENT IS PLACED ON RECORD. HOWEVER, ON GOING T HROUGH THE FACTS AND THE ISSUE RAISED IN THESE APPEALS AND KEEPING IN VIEW THE AVAILABILITY OF ASSISTANCE OF LD. DR FOR THE REVENUE, WE PROCE ED TO ADJUDICATE THE APPEAL IN THE SUCCEEDING PARAGRAPHS. WE SHALL TAKE UP APPEAL OF THE REVENUE FOR A.Y. 2006-07 AS A STANDARD ONE. ITA NOS. 1437/PUN/2015 A.Y. 2006-07 3. BRIEFLY STATED RELEVANT FACTS OF THE ASSESSEE INCLUDE TH AT THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. ASSESSEE FILED THE RETURN OF INCOME DECLARING T OTAL INCOME OF RS.4,91,92,810/-. THE SCRUTINY ASSESSMENT HAS BEEN COMPLE TED DETERMINING THE TOTAL INCOME AT RS.7,43,15,900/-. HOWEVER, ON FINDING THAT THE ASSESSEE CLAIMED DEDUCTION OF RS.4,66,88,386/- U/S .80IB(10) OF THE ACT IN RESPECT OF PROJECT DSK SUNDARBAN AT HAD APSAR, PUNE. THE AO ALLOWED THE DEDUCTION EVENTHOUGH THE ASSESSEE DID NO T PRODUCE THE COMPLETION CERTIFICATE ON THE ASSUMPTION THAT THE PROJECT WILL BE COMPLETED WITHIN 4 YEARS FROM THE DATE OF COMMENCEMENT. AT THE END OF THE ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT, THE AO MADE ADDIT ION OF RS.4,66,88,386/-. 4. THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) RELYING ON T HE ORDER OF TRIBUNAL IN THE ASSESSEES OWN CASE VIDE ITA NOS. 723 TO 725/PUN/20 13, FOR THE A.YRS. 2007-08 TO 2009-10 ALLOWED THE DEDUCTION C LAIMED BY THE ASSESSEE U/S.80IB(10) OF THE ACT. 3 ITA NOS1437 TO 1439/PUN/2015 D.S. KULKARNI DEVELOPERS PVT. LTD., 5. AGGRIEVED WITH THE ORDER OF CIT(A), THE REVENUE IS IN A PPEAL BEFORE THE TRIBUNAL WITH THE FOLLOWING GROUNDS : 1. THE ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) GROSSLY ERRED IN DELETING THE DIS ALLOWANCE MADE BY THE ASSESSING OFFICER OF THE ASSESSEES CLAIM OF DE DUCTION OF RS.4,66,83,386/- IN RESPECT OF HOUSING PROJECT DSK SUNDARBAN INSTEAD OF CONFIRMING THE SAID DISALLOWANCE. 3. THE LD.CIT(A) GROSSLY ERRED IN INTERPRETING SECT ION 80IB(10) IN THE CONTEXT OF APPLICABILITY OF CLAUSE (D) IN A MANNER NEITHER CONTEMPLATED NOR PROVIDED FOR UNDER THE ACT. 4. THE LD.CIT(A) GROSSLY ERRED IN HOLDING THE ASSES SEE AS ELIGIBLE FOR DEDUCTION U/S.80IB(10) WHEN THE PROJECT HAD BEEN AP PROVED AS A RESIDENTIAL AND COMMERCIAL PROJECT & NOT AS A HOUSI NG PROJECT AND THE BUILT UP AREA OF COMMERCIAL UNITS EXCEEDED 2000 SQ.FT. VI OLATING THE PROVISIONS OF SECTION 80IB(10)(D) OF THE ACT. 5. THE LD.CIT(A) ERRED IN HOLDING THAT THE AMENITY SPACE I AND II OF THE PROJECT DSK SUNDARBAN WERE INDEPENDENT PROJECT AND NOT PART OF THE RESIDENTIAL PROJECT CONSTRUCTED BY THE ASSESSEE COM PANY. 6. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LD.CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 7. THE APPELLANT CRAVES TO ADD, AMEND, ALTER OR DEL ETE ANY OF THE GROUNDS OF APPEAL DURING THE COURSE OF APPELLATE PR OCEEDINGS BEFORE THE HONBLE TRIBUNAL. 6. BEFORE US, LD. DR FOR THE REVENUE SUBMITTED THAT THE ISSUE RAISED IN THE APPEAL RELATES TO ALLOWABILITY OF DEDUCTION U/S.80IB(10) OF THE ACT. THE AO DENIED THE BENEFIT OF DEDUCTION HOLDING THAT THE AS SESSEE EXCEEDED THE CONSTRUCTION OF COMMERCIAL SPACE, THE LIMITS SPECIFIED IN THE ACT. NON FILING OF COMPLETION CERTIFICATE WAS ALSO A REAS ON FOR DENIAL OF DEDUCTION. LD. DR BROUGHT OUR ATTENTION TO THE ORDER OF CIT(A) AND SUBMITTED THAT THE APPEAL IS ALLOWED ON THIS ISSUE OF DEDUC TION U/S.80IB(10) OF THE ACT. CONTENTS OF PARA NO.6 OF THE ORDER OF CIT(A) CONSTITUTES THE OPERATIONAL PARA. OTHERWISE PARA NOS. 4 TO 6 DEALS WITH THIS ISSUE. CIT(A) NARRATED THE RELEVANT FACTS IN THE SAID PARAGRAPHS. CIT(A) CONSIDERED THE WRITTEN SUBMISSIONS OF THE ASSESSEE AND GRANTED 4 ITA NOS1437 TO 1439/PUN/2015 D.S. KULKARNI DEVELOPERS PVT. LTD., RELIEF RELYING ON THE ORDER OF THE TRIBUNAL IN ASSESSEES O WN CASE FOR THE A.YRS. 2007-08 TO 2009-10. HOWEVER, LD. DR FAIRLY MENTIONE D THAT THE TRIBUNALS DECISION IS APPLICABLE ON MERITS TO THE FACTS OF TH E PRESENT CASE. 7. WE HEARD THE LD. DR FOR THE REVENUE AND PERUSED TH E ORDERS OF THE AO/CIT(A) AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THE SOLITARY ISSUE RAISED BY THE REVENUE ON THE ALLOWABILITY OF DEDUCTION U/S.80IB(10) OF THE ACT. IT IS UNDISPUTED FACT THAT THE AO ORIGINALLY COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT AND THE P RESENT ASSESSMENT IS MADE U/S.148 OF THE ACT HOLDING THAT THE A SSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S.80IB(10) OF THE ACT. HOWEVER , VIDE THE CONTENTS OF PARA NO.5 OF THE ORDER OF CIT(A), ON SIMILAR FAC TS, THE ASSESSEE WAS GIVEN RELIEF BY THE TRIBUNAL. IN PARA NO.6 OF THE ORDER OF CIT(A), THE CIT(A) RELIED ON THE ORDER OF TRIBUNAL IN THE AS SESSEES OWN CASE FOR THE A.YRS. 2007-08 TO 2009-10. WE HAVE SEIZED UP WITH THE SIMILAR ISSUE IN THE A.YRS. 2006-07, 2011-12 AND 2012-13. L D. DR FAIRLY SUBMITTED THAT THERE IS NO DIFFERENCE ON FACTS. WE FIND IT IS THE DECISION OF THE TRIBUNAL THAT THE AO IS NOT JUSTIFIED IN REJECTING TH E CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. WE THEREFORE PROCEED TO EXTRACT THE RELEVANT PARAGRAPHS FROM THE ORDER OF CIT(A). 4. GROUNDS NO. 2 TO 5 : GROUNDS NO. 2 TO 5 PERTAIN TO THE APPELLANTS GRIE VANCE IN RESPECT OF DISALLOWANCE OF DEDUCTION U/S.80IB(10) OF THE I.T. ACT, 1961 AMOUNTING TO RS.4,66,88,386/- IN RESPECT OF PROJECT CALLED DSK SUNDARBAN. THE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER IN T HE ASSESSMENT ORDER DATED 11-3-2014 ON THE BASIS OF FINDINGS MADE IN A. Y. 2007-08. 5. . .. 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CAS E AS WELL AS REPLY OF THE APPELLANT. IT IS SEEN THAT THE HON. ITAT IN IT S ORDER DATED 31/7/2014 IN APPELLANTS OWN CASE IN ITA NOS. 723 TO 725/PN/2 013 FOR AYRS 2007- 5 ITA NOS1437 TO 1439/PUN/2015 D.S. KULKARNI DEVELOPERS PVT. LTD., 08 TO 2009-10 HAS ALLOWED DEDUCTION U/S.80IB(10) OF THE I.T. ACT, 1961 IN RESPECT OF DSK SUNDARBAN FOR A.Y. 2007-08 TO 2009-1 0 RESPECTIVELY. THE RELEVANT PORTION OF THE TRIBUNALS ORDER IS REPRODU CED AS UNDER : 2.5.5 IN VIEW OF THE ABOVE DISCUSSION, THE FACTS OF SHROFF DEVELOPERS (SUPRA)ARE IDENTICAL TO THE FACTS OF THE ASSESSEE'S CASE AND ACCORDINGLY, AMENITY SPACE 1 AND 2 SHOULD BE CONSID ERED AS SEPARATE AND INDEPENDENT PROJECT. REGARDING THE OBJ ECTION OF THE ASSESSING OFFICER IN THE WEBSITE OF ASSESSEE COMPAN Y, THE ASSESSEE ITSELF HAS SHOWN SHOPS AVAILABLE IN DSK SU NDARBAN PROJECT. THE ISSUE IS NOT RELEVANT TO DECIDE WHETHE R THE RESIDENTIAL AND AMENITY SPACE ARE SEPARATE PROJECTS OR ONE AND THE SAME. SO LONG AS THE BUILDING PLANS ARE INDEPENDENTLY SANCTI ONED, TWO PROJECTS ARE SEPARATELY AND ACCORDINGLY, DISALLOWAN CE WAS NOT RIGHTLY REJECTED ON THIS ACCOUNT. ACCORDINGLY, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING CLAIM OF THE ASSESSE E UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT IN RESPEC T OF DSK SUNDARBAN. THE ASSESSING OFFICER IS DIRECTED ACCORD INGLY. SIMILAR ISSUE AROSE WITH REGARD TO DSK SUNDARBAN IN ASSESSE E'S APPEALS IN ITA NOS.724 & 725/PN/2013 FOR A.YS.2008-09 & 2009-1 0 RESPECTIVELY. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE ASSE SSEE'S CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT WITH REGARD TO PR OJECT DSK SUNDARBAN.' SINCE THE FACTS BEING SAME, FOLLOWING THE TRIBUNAL S ORDER AS ABOVE, THE APPELLANTS CLAIM OF DEDUCTION U/S.80IB(10) OF THE I.T. ACT, 1961 AMOUNTING TO RS.4,66,88,386/- IS ALLOWED. THUS, GROUND NOS. 2 TO 5 ARE ALLOWED. THUS, WE FIND THE LD. DR HAS NOT MADE OUT A CASE THAT T HE SAID ORDER OF THE TRIBUNAL IS INAPPLICABLE TO THE FACTS OF THE PRESENT CA SE. THEREFORE, WE ARE OF THE OPINION THAT THE ORDER OF CIT(A) IS FAIR AND R EASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 9. SINCE THE FACTS, ISSUES, DECISIONS OF AO/CIT(A) ARE SAME IN THE REMAINING A.YRS. 2011-12 AND 2012-13 AS THAT OF A.Y. 2006 -07, OUR DECISION OF ALLOWING DEDUCTION U/S.80IB(10) TO THE ASSESSEE R ELYING ON THE ORDER OF TRIBUNAL FOR THE A.YRS. 2007-08 TO 2009-10 W ILL APPLY TO THE A.YRS. 2011-12 AND 2012-13 AS WELL. ACCORDINGLY, THE GROU NDS RAISED BY THE REVENUE IN THESE APPEALS ARE ALSO DISMISSED. 6 ITA NOS1437 TO 1439/PUN/2015 D.S. KULKARNI DEVELOPERS PVT. LTD., 10. TO SUM UP, ALL THE THREE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH SEPTEMBER, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 26 TH SEPTEMBER, 2018. SATISH % ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-1, PUNE 4. THE PR.CIT-1, PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE