Deputy Commissioner of Income tax, Pune V. Jindal Mittal Griha Nirman Pvt.Ltd, Pune

ITA 1440/PUN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2815 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 07-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority; Set aside
• Section: 143(3); 148

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NOS.1439 & 1440/PUN/2017 / ASSESSMENT YEARS : 2011-12 & 2012-13 THE DY. COMMISSIONER OF INCOM E - TAX, CIRCLE 14, PUNE. . / APPELLANT V/S JINDAL MITTAL GRIHA NIRMAN PVT. LTD., MITTAL HOUSE, 2096 VIJAYANAGAR COLONY, NILAYAM THEATRE CHOWK, SADASHIV PETH, PUNE. PAN : AABCJ3501F. . / RESPONDENT ASSESSEE BY : SHRI VINOD GUPTA. REVENUE BY : SHRI SUDHENDU DAS. / ORDER PER ANIL CHATURVEDI, AM : 1. THESE TWO APPEALS FILED BY THE REVENUE ARE EMANATING O UT OF SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) 7, PUNE DATED 15.12.2016 FOR A.YS. 2011-12 AND 2012-13, RESPECTIVELY. 2. BEFORE US, AT THE OUTSET, BOTH THE PARTIES SUBMITTED T HAT THOUGH THE APPEALS FILED BY THE REVENUE ARE FOR TWO DIFFERENT ASSESSME NT YEARS BUT THE FACTS AND ISSUES INVOLVED IN BOTH THE APPEALS ARE IDEN TICAL EXCEPT FOR THE ASSESSMENT YEAR AND THE AMOUNTS INVOLVED AND THE REFORE THE SUBMISSIONS MADE BY THEM WHILE ARGUING ONE APPEAL WOULD BE EQUALLY APPLICABLE TO THE OTHER APPEAL ALSO AND THUS BOTH THE A PPEALS CAN BE / DATE OF HEARING : 06.06.2019 / DATE OF PRONOUNCEMENT: 11.06.2019 2 ITA NOS.1439 & 1440/PUN/2017 HEARD TOGETHER. IN VIEW OF THE AFORESAID SUBMISSIONS OF BO TH THE PARTIES, WE, FOR THE SAKE OF CONVENIENCE, PROCEED TO DISPOSE OF BOT H THE APPEALS BY A CONSOLIDATED ORDER BUT HOWEVER, PROCEED WITH NARRATING THE FACTS IN ITA NO.1439/PUN/2017 FOR ASSESSMENT YEAR 2011-12. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS A COMPANY STATED TO BE ENGAGED AS BUILDER S AND DEVELOPERS. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCO ME FOR A.Y. 2011-12 ON 13.09.2012 DECLARING TOTAL INCOME OF RS.39,89,55 0/- AFTER CLAIMING DEDUCTION OF RS.3,62,38,796/- U/S 80IB(10) OF THE AC T. IT WAS NOTED THAT ASSESSEE HAD CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT IN A.Y. 2010-11 WHICH WAS DISALLOWED BY THE AO. SINCE THE ASSESS EE HAD CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT FOR THE SAME PRO JECT IN A.Y. 2011-12, AO AFTER RECORDING THE REASONS, ISSUED NOTICE U /S 148 OF THE ACT ON 01.07.2013 WHICH WAS SERVED ON THE ASSESSEE. TH EREAFTER, THE CASE WAS TAKEN UP FOR SCRUTINY. SUBSEQUENTLY, ASSESSME NT WAS FRAMED U/S 143(3) R.W.S. 147 OF THE ACT VIDE ORDER DATED 03.03.201 5 AND THE TOTAL INCOME WAS DETERMINED AT RS.4,02,28,750/- BY DENYING THE C LAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. AGGRIEVED BY THE ORD ER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.15.1 2.2016 (IN APPEAL NO.PN/CIT(A)-7/CIR-14/86/2015-16) ALLOWED THE APPE AL OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US, AND HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE L D. CIT(A)-7 WAS NOT JUSTIFIED IN ALLOWING PROPORTIONATE DEDUCTION U/S 8 0IB(10) WHEN NO SUCH 3 ITA NOS.1439 & 1440/PUN/2017 PROVISION FOR PROPORTIONATE AND PERCENTAGE DEDUCTIO N EXISTS IN THE ACT WITH RESPECT TO THIS SECTION UNDER CONSIDERATION AS MENT IONED ABOVE. 2. FOR THE FACTS AND SUCH OTHER REASONS AS MAY BE U RGED AT THE TIME OF HEARING, THE ORDER OF COMMISSIONER OF INCOME TAX (A PPEALS) 7 PUNE MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RES TORED. 4. SIMILAR GROUNDS HAVE BEEN RAISED IN I.T.A. NO.1440/PUN /2017 FOR A.Y. 2012-13. 5. AO NOTICED THAT ASSESSEE HAD CONSTRUCTED A PROJEC T CALLED AS SUN ORBIT AT SUN CITY ROAD, ANAND NAGAR, PUNE. AO NOTED T HAT WHILE COMPLETING THE ASSESSMENT FOR A.Y. 2010-11, IT WAS NOTICED THAT IN RESPECT OF B BUILDING, THE AREA OF 10 FLATS EXCEEDED 1500 SQ. FT. AO WAS OF THE VIEW THAT AS PER THE PROVISIONS OF CLAUSE (D) OF SEC.80IB(10) OF THE ACT, THE BUILT UP AREA OF A FLAT IN THE HOUSING PROJECT SH OULD NOT EXCEED 1500 SQ.FT. IN CASE OF ASSESSEE SINCE THE CONDITIONS SPEC IFIED IN CLAUSE (D) OF SEC.80IB(10) OF THE ACT WERE NOT FULFILLED, AO WAS OF THE V IEW THAT THE PROFITS OF THE ENTIRE PROJECT ARE NOT ELIGIBLE FOR DEDUCTION AND HE ACCORDINGLY DENIED THE CLAIM OF DEDUCTION U/S 80IB(10) OF TH E ACT AMOUNTING TO RS.3,62,38,796/- FOR THE ENTIRE PROJECT. AG GRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO FOLLOWING THE DECISION OF HIS PREDECESSOR FOR A.Y. 2010-11 NOTED THA T ASSESSEE HAD FULFILLED THE OTHER CONDITIONS STIPULATED U/S 80IB(10) OF THE AC T REGARDING THE AREA OF THE PLOT, HAVING COMMERCIAL AREA WITHIN THE LIMIT S ETC. AND THEREFORE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S 80IB(10 ) OF THE ACT ON PRO-RATA BASIS WITH RESPECT TO THE BLOCKS AND UNITS SA TISFYING THE CONDITIONS STIPULATED U/S 80IB(10) OF THE ACT. HE ACCORD INGLY GRANTED PROPORTIONATE DEDUCTION TO THE UNITS/FLATS WHICH WERE H AVING AREA LESS THAN 1500 SQ. FT. AND DENIED THE CLAIM WITH RESPECT TO U NITS/FLATS WHOSE AREA EXCEEDED THE SPECIFIED LIMITS. 4 ITA NOS.1439 & 1440/PUN/2017 AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW BEFORE US. 6. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF AO. LD.A.R. ON THE OTHER HAND, REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CI T(A) AND FURTHER SUBMITTED THAT WHILE DECIDING THE ISSUE IN CASE OF A SSESSEE FOR A.Y. 2010-11, THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS ALLO WED THE CLAIM OF THE ASSESSEE AND UPHELD THE ORDER OF LD.CIT(A) WIT H RESPECT TO THE GRANTING OF PROPORTIONATE DEDUCTION. HE PLACED ON RE CORD THE COPY OF THE AFORESAID ORDER. HE SUBMITTED THAT SINCE THE PROJEC T IN THE YEAR UNDER CONSIDERATION IS THE SAME PROJECT AS IN A.Y. 2010-11 AND WITHOUT THERE BEING ANY CHANGE IN FACTS, THE ORDER OF LD.CIT(A) NEEDS TO BE UPHELD. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT T O THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. WE FIND THAT IN A.Y. 2010 -11, THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT WAS DENIED FOR TH E ENTIRE PROJECT BY THE AO. THEREAFTER, THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY AND LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTIO N WITH RESPECT TO THE UNITS WHICH WERE HAVING AREA LESS THAN 1500 SQ.FT. A GAINST THE ORDER OF LD.CIT(A), REVENUE AND ASSESSEE HAD CARRIED THE MATTER BEFORE THE TRIBUNAL. THE CO-ORDINATE BENCH OF THE TRIBUNA L (IN ITA NOS.981 & 1015/PUN/2015 ORDER DATED 27.10.2017) UPHELD THE ORDER OF LD.CIT(A) BY OBSERVING AS UNDER : 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPE CT TO DENIAL OF DEDUCTION U/S 80IB(10) OF THE ACT. WE FIND THAT THE CLAIM OF ASSESSEE OF DEDUCTION U/S 80IB(10) FOR THE ENTIRE PROJECT WAS DISALLOWED BY A O FOR THE REASON THAT OUT OF THE TOTAL 149 FLATS BUILT BY ASSESSEE, 10 FLATS WERE HAVING AREA OF MORE THAN 1500 SQ FT. WE FIND THAT WHILE DECIDING THE IS SUE, LD CIT(A) HAS GIVEN A FINDING THAT THE PROJECT WAS ON A PLOT AREA OF 13 400 SQ MTRS (I.E.3.31 5 ITA NOS.1439 & 1440/PUN/2017 ACRES) WHICH WAS MORE THAN 1 ACRE, APPROVAL FROM TH E COMPETENT AUTHORITY FOR COMMENCEMENT OF PRESENT PROJECT WAS GRANTED ON 30.03.2007 AND THE COMPLETION OF THE PROJECT WAS RECEIVED ON 28.02.201 2 I.E. WITHIN THE DUE DATE OF 31.03.2012. HE HAS FURTHER GIVEN A FINDING THAT THE OTHER REQUIRED CONDITIONS WERE ALSO FULFILLED BY THE ASSESSEE. AS FAR AS THE ISSUE OF AREA OF 10 FLATS IS CONCERNED, AO HAD NOTED THAT THE VALUER APPOINTED BY THE REVENUE AUTHORITIES HAD CERTIFIED THAT 10 FLATS WER E HAVING AN AREA EXCEEDING 1500 SQ. FT. ON THE OTHER HAND, THE 2 V ALUERS / ARCHITECTS APPOINTED BY THE ASSESSEE HAD CERTIFIED THAT THE AR EA IN RESPECT OF THE 10 FLATS WERE LESS THAN 1500 SQ.FT. THE REASON FOR TH E DIFFERENCE IN THE AREA AS CALCULATED BY THE VALUERS WAS ON ACCOUNT OF THE MEA SUREMENT OF THE THICKNESS OF THE WALL. THE VALUER APPOINTED BY THE REVENUE HAD CONSIDERED THE THICKNESS OF THE EXTERNAL WALLS AT 18 AT SIX P LACES WHICH WAS IN ACTUAL A DOUBLE WALL TAKEN AS AN ARCHITECTURAL PROJECTION FOR AESTHETIC PURPOSE WHEREAS THE ARCHITECTS HAD CONSIDERED THE THICKNESS OF THE WALL AT 6 WHICH WAS AS PER THE SANCTIONED PLAN. WE FIND THAT CIT(A) IN HIS ORDER HAS ALSO NOTED THAT THE VALUER APPROVED BY REVENUE HAD NOT GIVEN THE BREAKUP OF THE CALCULATION FOR ARRIVING AT THE AREA EXCEEDI NG 1500 SQ.FT. FOR 10 FLATS. HE HAS ALSO NOTED THAT THAT SHRI RUPAREL HAS OBSERV ED THAT AS A GENERAL TREND PREVALENT IN THE INDUSTRY, THE ARCHITECTURAL PROJECTIONS IN THE FORM OF FEATURES, CHAJJAS, HOLLOW BOXES, SOLID BOXES FOR EN HANCING THE AESTHETICS OF THE BUILDING WHICH IS ALSO ALLOWED BY THE LOCAL AUT HORITIES ARE NOT COUNTED BY ANY CORPORATION IN THE BUILT-UP AREA CALCULATION S AND THE PROJECTIONS WAS NOT UTILIZABLE FROM INSIDE AND NEITHER IT WAS A DDED TO THE CARPET AREA NOR IT WAS IN HABITABLE NATURE. THE FINDINGS NAMELY THAT THE PROJECTIONS ARE EXTERNAL PROJECTIONS, IT IS FOR THE PURPOSE OF AEST HETIC BEAUTY OF THE BUILDING, ARE NOT HABITABLE AND NOT UTILIZABLE FROM INSIDE AN D ALL ALLOWED BY THE CORPORATION AND NOT CONSIDERED BY THEM FOR THE PURP OSE OF CALCULATING THE AREA OF THE FLAT, HAS NOT BEEN CONTROVERTED BY THE REVENUE. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT THE DEDUCTION U /S 80IB(10) OF THE ACT CANNOT BE DENIED TO THE ASSESSEE. WE THEREFORE DIRE CT THE AO TO ALLOW THE DEDUCTION ON THE ENTIRE PROJECT. THUS THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 9. AS FAR AS REVENUES GRIEVANCE WITH RESPECT TO GR ANTING OF PRO-RATA DATA IS CONCERNED, WE FIND THAT LD.CIT(A) AFTER CON SIDERING THE DECISIONS CITED IN HIS ORDER HAS NOTED THAT THE VARIOUS AUTHO RITIES HAVE HELD THAT ASSESSEE IS ENTITLED TO DEDUCTION WITH RESPECT TO T HE UNITS WHICH HAVE COMPLIED WITH THE CONDITION LAID DOWN U/S 80IB(10) OF THE ACT. BEFORE US, REVENUE HAS NOT BROUGHT ON RECORD ANY CONTRARY BIND ING DECISION IN ITS SUPPORT NOR HAS CONTROVERTED THE FINDINGS OF LD.CIT (A). WE THEREFORE FIND NO REASON TO INTERFERE WITH THAT PORTION OF ORDER OF L D.CIT(A) AND THUS THE GROUNDS OF REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D AND THAT OF THE REVENUE IS DISMISSED. 8. BEFORE US, REVENUE HAS NOT POINTED OUT ANY DISTINGUISH ING FEATURE IN THE FACTS OF THE PRESENT CASE AND TO THAT OF ASSESSE ES OWN CASE IN A.Y. 2010-11 NOR HAS PLACED ANY MATERIAL ON RECORD TO DEMO NSTRATE THAT THE DECISION OF PUNE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 20 10-11 WHICH HAS BEEN RELIED UPON BY LD.CIT(A) HAS BEEN SET ASIDE / O VERTURNED OR 6 ITA NOS.1439 & 1440/PUN/2017 STAYED BY HIGHER JUDICIAL FORUM. IN VIEW OF THE AFORESAID FAC TS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS THE GROUNDS OF REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF REVENUE IN ITA NO.143 9/PUN/2017 FOR A.Y. 2011-12 IS DISMISSED. 10. NOW WE TAKE UP REVENUES APPEAL IN ITA NO.1440/PUN/ 2017 FOR A.Y 2012-13. 11. AS FAR AS THE GROUNDS RAISED IN APPEAL IN ITA NO.144 0/PUN/2017 FOR A.Y. 2012-13 ARE CONCERNED, IN VIEW OF THE SUBMISSION OF BOTH THE PARTIES THAT THE FACTS OF THE CASE IN THE YEAR BEING IDEN TICAL TO THE FACTS AND ISSUE OF THE CASE IN ITA NO.1439/PUN/2017 FOR A.Y. 20 11-12, WE THEREFORE FOR THE REASONS STATED HEREIN WHILE DISPOSING OF THE APPEAL IN ITA NO.1439/PUN/2017 FOR A.Y. 2011-12, AND FOR SIMILAR REA SONS, DISMISS THE GROUNDS OF REVENUE. THUS, THE APPEAL OF REVENUE IN ITA NO.1440/PUN/2017 FOR A.Y. 2012-13 ARE DISMISSED. 12. TO SUM UP, BOTH THE APPEALS OF REVENUE ARE DISMIS SED. ORDER PRONOUNCED ON 11 TH DAY OF JUNE, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 11 TH JUNE, 2019. YAMINI 7 ITA NOS.1439 & 1440/PUN/2017 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-7, PUNE. PR. CIT-6, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.