Modi Builders & Realtors (P) Ltd, Secunderabad V. ACIT, Circle-16(2), Hyderabad

ITA 1458/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59348 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 17-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS; K VISHWANATHAM
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 1457/HYD/2011 (ASSESSMENT YEAR : 2008-09) M/S. MODI SHELTERS PVT. LTD. SECUNDERABAD PAN: AADCM8355N VS. INCOME TAX OFFICER WARD-16(1) HYDERABAD APPELLANT RESPONDENT I.T.A. NO. 1458/HYD/2011 (ASSESSMENT YEAR : 2008-09) M/S. MODI BUILDERS & REALTORS (P) LTD. SECUNDERABAD PAN: AACCM2490D VS. ASS. COMMISSIONER OF INCOME - TAX, CIRCLE-16(2), HYDERABAD APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI K. VISHWANATHAM AND SHRI V. SRINIVAS DATE OF HEARING: 22 .03.2012 DATE OF PRONOUNCEMENT: 22.03.2012 O R D E R PER CHANDRA POOJARI, AM: THESE TWO APPEALS BY DIFFERENT ASSESSEES ARE DIREC TED AGAINST THE DIFFERENT ORDERS OF THE CIT(A)-V, HYDER ABAD DATED 16.6.2011. 2. THE FIRST COMMON GROUND IN THESE APPEALS IS WITH RE GARD TO ALLOWABILITY OF DEDUCTION U/S. 80IB(10) OF THE INCO ME-TAX ACT, 1961. 3. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OPINI ON THAT SIMILAR ISSUE CAME FOR CONSIDERATION BEFORE THIS TR IBUNAL IN THE CASE OF MODI BUILDERS & REALTORS PVT. LTD., IN I.T. A. NO. I.T.A. NOS. 1457 & 1458/HYD/2011 M/S. MODI SHELTERS PVT. LTD. & ANR. ========================== 2 1541/HYD/2010. THE TRIBUNAL VIDE ORDER DATED 31 ST MARCH, 2011 HELD AS FOLLOWS: '11. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE MAIN CONTEN TION HEREIN IS WITH REGARD TO INCLUSION OF PORTICO AND B ALCONY FOR THE PURPOSE OF DETERMINING THE BUILT-UP AREA AS PER CLAUSE (A) OF SUBSECTION (14) OF SECTION 80IB OF TH E INCOME-TAX ACT, 1961. AS PER THIS CLAUSE THE DEFIN ITION OF BUILT-UP AREA IS AS FOLLOWS: 80IB(14)[(A) BUILT-UP AREA MEANS THE INNER MEASUREMENTS OF THE RESIDENTIAL UNIT AT THE FLOOR LEVEL, INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREASED BY THE THICKNESS OF THE WALLS BUT DOES NOT INCLUDE THE COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNITS;] 12. THE ABOVE DEFINITION WAS INTRODUCED BY FINANCE (NO. 2) ACT, 2004. THIS AMENDMENT STARTS WITH INN ER MEASUREMENT OF RESIDENTIAL UNIT. EVEN AS PER COMM ON PARLANCE BUILT-UP AREA IS THE CARPET AREA COVERED B Y THICKNESS OF WALL + BALCONY + PORTICO (PROJECTION). THUS, WHETHER IT IS THE INNER MEASUREMENT OR OUTER MEASUREMENT ONE THING IS AMPLY CLEAR THAT, IT SHOUL D BE ACTUAL MEASUREMENT NOT ANY ESTIMATE. THE DISPUTE HEREIN IS WITH REGARD INCLUSION OF PORTICO AND BALC ONY FOR MEASURING THE BUILT-UP AREA OF EACH RESIDENTIAL UNIT. IF THE PORTICO AND BALCONY AREA IS ADDED, THE BUILT -UP AREA WOULD EXCEED 1500 SQ. FT. PER UNIT. AS PER TH E DEFINITION AS STATED IN SECTION 80IB(14)(A) BUILT-U P AREA INCLUDES PROJECTION AND BALCONY. ACCEPTED RULES OF INTERPRETATION FOR AND INCLUSIVE DEFINITION AS ELUC IDATED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. TAJMAHAL HOTEL (1973) CTR (SC) 480; AIR 1972 (SC) 168 IS THAT IF THE WORD INCLUDE IS USED IN AN INTERPRETATIVE CLAUSE, IT MUST BE CONSTRUED AS APPREHENDING NOT ONLY SUCH AS IT SIGNIFIES TO ITS N ATURE AND MERIT, BUT ALSO THINGS WHICH THE INTERPRETATIVE CLAUSE DECLARES WHAT THEY SHALL INCLUDE. SO NORMAL MEANING OF BUILT-UP AREA, BUT FOR THE DEFINITION IN CLUDE PROJECTION AND BALCONY, WOULD DEFINITELY EXCLUDE TH E LATER. THEREFORE, THERE CAN BE NO DOUBT THAT PRIOR TO THE INTRODUCTION OF THE DEFINITION AFORESAID CLAUSE BUI LT-UP AREA WOULD NOT INCLUDE PROJECTIONS AND BALCONY AS NORMALLY UNDERSTOOD. HOWEVER, AFTER THE ENACTMENT ITSELF CLEARLY SPECIFIES THAT BUILT-UP AREA INCLUDE S BOTH PROJECTIONS AND BALCONIES AS INCREASED BY THE THICK NESS I.T.A. NOS. 1457 & 1458/HYD/2011 M/S. MODI SHELTERS PVT. LTD. & ANR. ========================== 3 OF WALLS AND DOES NOT INCLUDE COMMON AREA SHARED WITH OTHERS. THIS DEFINITION GIVES THE ENLARGED ME ANING OF BUILT-UP AREA WHICH INCLUDES BALCONY AND PROJECT ION. AFTER INCLUSION OF BALCONY AND PROJECTION IF THE TO TAL AREA OF BUILT-UP AREA EXCEEDS 1500 SQ, FT. IN THIS CASE THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S. 80IB OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE JUDGEMENT OF SUPREME COURT IN THE C ASE OF BAJAJ TEMPO, 196 ITR 188 WHEREIN IT WAS HELD THA T A PROVISION IN A TAXING STATUTE GRANTING INCENTIVES F OR PROMOTING GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY; AND SINCE A PROVISION FOR PROM OTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY, TH E RESTRICTION ON IT TOO HAS TO BE CONSTRUED SO AS TO ADVANCE THE OBJECTIVE OF THE PROVISION AND NOT TO FRUSTRATE IT. IN OUR OPINION THIS CASE LAW HAS NO APPLICATION TO THE FACTS OF THE ASSESSEES CASE. T HE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE IS GOOD IN PART BUT THE INFERENCE DOES NOT LOGICALLY F OLLOW. IN OUR OPINION, THE LEGISLATIVE EXPEDIENCE ADOPTED TO ACHIEVE THAT OBJECTIVE IN THE PROVISION REQUIRES TO BE GIVEN EFFECT ON IT IS OWN LANGUAGE. THERE IS NO AMBIGUITY IN CLAUSE (A) OF SUBSECTION (14) OF SECTI ON 80IB OF THE ACT. AS THERE IS NO AMBIGUITY IN THE STATUTORY LANGUAGE, RESORT TO INTERPRETATION PROCES S TO UNFOLD THE LEGISLATIVE INTENT BECOMES IMPERMISSIBLE . THE SUPPOSED INTENTION OF THE LEGISLATURE CANNOT TH EN BE APPEALED TO WHITTLE DOWN STATUTORY LANGUAGE WHICH I S OTHERWISE UNAMBIGUOUS. IF THE INTENDMENT IS NOT IN THE WORDS USED, IT IS NOWHERE ELSE. THE NEED FOR INTERPRETATION ARISES WHEN THE WORDS USED IN THE STATUTE ARE ON THEIR OWN TERMS AMBIVALENT AND DO NO T MANIFEST THE INTENTION OF THE LEGISLATURE. THE WO RDS IN THE STATUTE MUST, PRIMA FACIE, BE GIVEN THEIR ORDIN ARY MEANINGS. WHERE THE GRAMMATICAL CONSTRUCTION IS CL EAR, MANIFEST AND WITHOUT DOUBT, THAT CONSTRUCTION OUGHT TO PREVAIL UNLESS THERE ARE SOME STRONG AND OBVIOUS REASONS TO THE CONTRARY. IT HAS TO BE REITERATED T HAT THE OBJECT OF INTERPRETATION OF A STATUTE IS TO DISCOVE R THE INTENTION OF PARLIAMENT AS EXPRESSED IN THE ACT. T HE DOMINANT PURPOSE IN CONSTRUING A STATUTE IS TO ASCE RTAIN THE INTENTION OF THE LEGISLATURE AS EXPRESSED IN TH E STATUTE, CONSIDERING IT AS A WHOLE AND IN ITS CONTE XT. THAT INTENTION, AND, THEREFORE, THE MEANING OF THE STATUTE, IS PRIMARILY TO BE SOUGHT IN THE WORDS USE D IN THE STATUTE ITSELF, WHICH MUST, IF THEY ARE PLAIN A ND UNAMBIGUOUS, BE APPLIED AS THEY STAND. I.T.A. NOS. 1457 & 1458/HYD/2011 M/S. MODI SHELTERS PVT. LTD. & ANR. ========================== 4 13. BEING SO, WE CANNOT ADOPT MEANING AS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE. IN OUR OP INION, BUILT-UP AREA INCLUDES PORTICO AND BALCONY ALSO AND IN THIS CASE IT EXCEEDS 1500 SQ. FT. PER RESIDENTIAL U NIT. ACCORDINGLY THE ASSESSEE IS DISENTITLED FOR THE BEN EFIT U/S. 80IB OF THE ACT. THE ORDER OF THE CIT(A) IS U PHELD ON THIS ISSUE. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED.' 4. BEING SO, IN VIEW OF THE ABOVE ORDER OF THE TRIBUNA L, WE ARE INCLINED TO DISMISS THE GROUND RELATING TO 80IB(10) OF THE ACT. 5. GROUND NO. 4 IN I.T.A. NO. 1458/HYD/2011 IS AS FOLL OWS: '4. THE LEARNED CIT(A) FAILED TO ADJUDICATE ON THE GROUND NO. 4 OF THE APPEAL WITH RESPECT TO WORKING OF ELIGIBLE DEDUCTION U/S. 80IB(10) OF IT ACT. HE FAI LED TO APPRECIATE THAT THE ELIGIBLE DEDUCTION U/S. 80IB(10 ) SHOULD HAVE BEEN WORKED OUT AFTER NETTING OF THE INTEREST PAID AGAINST THE INTEREST INCOME. THIS GR OUND OF APPEAL HAS NOT BEEN ADJUDICATED STATING THAT THE SAME IS AN INFRUCTUOUS ISSUE AS THE ENTIRE DEDUCTIO N U/S. 80IB(10) HAS BEEN HELD AS NOT ALLOWABLE.' 6. THIS GROUND REQUIRES NO ADJUDICATION AS FOR THE MAI N GROUND RELATING TO DEDUCTION U/S. 80IB(10) ITSELF THE ASSE SSEE IS NOT ENTITLED. BEING SO, THIS GROUND IS ONLY ACADEMIC I N NATURE AND DISMISSED AS INFRUCTUOUS. 7. IN THE RESULT, APPEALS OF THE BOTH THE ASSESSEES AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH, 2012. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 22 ND MARCH, 2012 I.T.A. NOS. 1457 & 1458/HYD/2011 M/S. MODI SHELTERS PVT. LTD. & ANR. ========================== 5 COPY FORWARDED TO: 1. M/S. MODI SHELTERS PVT. LTD., 5 - 4 - 187/3 AND 4, 3 RD FLOOR, SOHAM MANSION, M.G. ROAD, SECUNDERABAD-500 003. 2. M/S. MODI BUILDERS & REALTORS (P) LTD., 5 - 4 - 187/3 AND 4, 3 RD FLOOR, SOHAM MANSION, M.G. ROAD, SECUNDERABAD. 3 . THE ASST. COMMISSIONER OF INCOME - TAX, CIRCLE - 16(2), HYDERABAD. 4 . INCOME TAX OFFICER, WARD - 16(1), HYDERABAD. 5 . THE CIT(A) - V , HYDERABAD 6 . THE CIT - I V , HYDERABAD. 7 . THE DR A BENCH, ITAT, HYDERABAD. TPRAO