The ITO, Vapi Ward-3, Valsad V. M/s. Shree Padmavati Developers, SILVASSA

ITA 1473/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1500 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIBHA BHALLA
• Keywords: Principle of natural justice; Retrospective amendment; Additional evidence

Judgement Text

I.T.A. NO . 14 73 /AHD/ 20 1 3 ASSESSMENT YEAR: 200 9 - 10 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD C BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM AND S.S. GODARA JM ] I.T.A. NO. 14 73 /AHD/ 20 1 3 ASSESSMENT Y EAR : 200 9 - 10 INCOME TAX OFFICER, VAPI WARD - 3, VAPI. .... .......... .APPELLANT VS . SHREE PADMAVATI DEVELOPERS, ............. . RESPONDENT SURVEY NO.19/2/2, SUNDERVAN SOCIETY, DADRA & NAGAR HAVELI, SILVASSA. [ PAN: A AACW 1721 H ] APPEARANCES BY: VIBHA BHALLA , FOR THE APPELLANT URVASHI SHODHAN , FOR THE RESPONDENT D ATE OF CONCLUDING THE HEARING : APRIL 12 TH , 201 6 DATE OF PRONOUNCING THE ORDER : MAY 31 ST , 201 6 O R D E R PER PRAMOD KUMAR AM : BY WAY OF THIS APPEAL , THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 21.03.2013 PASSED BY THE L EARNED CIT ( A ) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3 ) OF THE INCOME TAX ACT, 1961 ( THE ACT FOR SHORT) FOR THE ASSESSMENT YEAR 2009 - 10 , ON THE FOLLOWING GROUND : - WHETHER THE FACTS AND THE CIRCUMSTANCES OF T HE C ASE, THE LEARNED CIT(A) WAS RIGH T IN DELETING THE DISALLOWANCE OF RS.41,27,990/ - MADE BY THE A.O. ON ACCOUNT OF DEDUCTION U/S.80IB(1 0 ) EVEN THOUGH THE ASSESSEE FAILED TO FULFIL THE CONDITIONS LAID DOWN IN SECTION 80IB(10) OF THE ACT ? 2. BRIEFLY STATED , THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE HAD FILED RETURN OF INCOME DISCLOSING NIL INCOME ON 29.09.2009. DURING THE COURSE OF I.T.A. NO . 14 73 /AHD/ 20 1 3 ASSESSMENT YEAR: 200 9 - 10 PAGE 2 OF 6 ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80 IB(10) IN RESPECT OF PADMA TI VIHAR PROJECT AMOUNTING TO RS.41, 2 7,990/ - . HE FURTHER NOTED THAT SINCE THE PROJECT IS NOT COMPLETED IN TIME, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) . IN THIS REGARD , HIS OBSERVATION WAS THAT WHILE THE PROJECT COULD HAVE BEEN COMPLETED WITHIN FOUR YEARS FROM THE END OF FINANCIAL YEAR IN THE FIRST APPROVAL ISSUED , BUT THE ASSESSEE HAS NOT DONE SO. THE ASSESSEE IS THUS NOT ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. HE FURTHER NOTED THAT MORE THAN ONE UNIT ARE SOLD BY THE ASS ESSEE TO A SINGLE PERSON . W H I LE HE FAIRLY ACCEPTS THAT RELATED AMENDMENT TO THE FINANCE ACT WAS W.E.F. 01.04.2010 VIDE F INANCE ACT 2009 , HE NEVERTHELESS DISALLOWED DEDUCTION UNDER SECTION 80 IB(10) ON THIS GROUND ALSO. THE EXPLANATION GIVEN BY THE ASSESS EE WAS REJECTED AND THE A SSESSING OFFICER IN THIS BACKDROP PROCEEDED TO DISALLOW DEDUCTION UNDER SECTION 80 IB(10) OF THE ACT. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT(A). LD. C IT(A) , REL YING UPON HIS PREDECESSOR S ORDER IN ASSE SSEE S OWN CASE FOR THE ASSESSMENT YEAR 2008 - 09 , GRANTED A RELIEF AND UPHELD ADMISSIBILITY OF DEDUCTION UNDER SECTION 80 IB(10) OF THE ACT. WHILE DOING SO, HE OBSERVED AS FOLLOWS : - 2.5 I HAVE CONSIDERED THE ASSESSMENT ORDER, THE SUBMISSIONS OF THE APPE LLANT AND THE REMAND REPORT OF THE ASSESSING OFFICER. I AGREE WITH THE ARGUMENTS AND THE SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE REASON THAT THE SUFFICIENT OPPORTUNITY WAS NOT GIVEN TO THE APPELLANT. THEREFORE, IN THE INTEREST OF NATURAL JUSTICE, T HE ADDITIONAL EVIDENCE OF THE APPELLANT IS ADMITTED. THE RELIANCE IS PLACED ON THE FOLLOWING JUDGEMENTS: (I) GUJARAT HIGH COURT IN CASE OF PARI MANGALDAS GIRDHARDAS [1977 - CTR - 647] HAD HELD THAT PRODUCTION OF THE ADDITIONAL EVIDENCE WAS NECESSARY TO ENA BLE TO PRONOUNCE THE JUDGEMENT OR FOR ANY OTHER SUBSTANTIAL CAUSE AND THAT SUCH EVIDENCE ENABLES IT TO PASS ORDER AS ALSO WHEN IT FINDS THAT THERE IS ANY LACUNA OR DEFECT WHICH NEEDS TO BE FILLED UP SO THAT IT COULD PRONOUNCE AN ORDER. (II) AHMEDABA D TRIBUNAL IN CASE OF RANCHODBHAI BHULABHAI PATEL ALSO DEALT WITH THE ABOVE AND HELD IN PARA 7 THAT EVEN THE PROBABILITY OF DECIDING THE CASE IN A MORE SATISFACTORY MANNER IS SUFFICIENT GROUND FOR ADMITTING ADDITIONAL EVIDENCE. IT FURTHER STATED THAT IMPOR TANT CONSIDERATION IS THE INTEREST OF JUSTICE WHICH HAS BEEN EXPLAINED ABOVE AS NOT MERELY I.T.A. NO . 14 73 /AHD/ 20 1 3 ASSESSMENT YEAR: 200 9 - 10 PAGE 3 OF 6 SOMETHING ESSENTIAL FOR GIVING DECISION BUT IN DECIDING THE MATTER IN A MORE SATISFACTORY MANNER. (III) J AIPUR TRIBUNAL IN CASE OF ANMOL COLOURS INDIA P . LTD. [10 - D TR - 381] ADMITTED THE ADDITIONAL EVIDENCE ON THE ABOVE CONSIDERATIONS; BUT IT ALSO HELD THAT THE ASSESSEE SHOULD NOT BE MADE TO SUFFER FOR THE LAPSE ON THE PART OF THE COUNSEL WHEN ALL THE DOCUMENTS, EVIDENCES WERE GIVEN BY THE ASSESSEE TO ITS COUNSEL BUT H E DID NOT CARE TO ATTEND THE PROCEEDINGS BEFORE THE ASSESSING OFFICER. (IV) BOMBAY H IGH COURT, NAGPUR BENCH IN CASE OF SUHASHINIBAI GOENKA [216 - 1TR - 518] HELD THAT THERE WAS SUBSTANTIAL CAUSE FOR THE TRIBUNAL TO ALLOW ADDITIONAL DOCUMENTS TO BE FILED IN TH E APPEAL BEFORE IT FOR FAIR AND JUST DISPOSAL BY EXERCISING ITS POWER TO ALLOW PRODUCTION OF ADDITIONAL EVIDENCE. (V) CALCUTTA HIGH COURT IN CASE OF B.N. BHATTACHARYA [112 - ITR - 423] TOOK THE SAME VIEW. (VI) D ELHI BENCH OF TRIBUNAL IN CASE OF M AHAVIR PRASAD GUPTA [100 - TTJ - 1078] HELD THAT FRESH EVIDENCE SOUGHT TO BE PRODUCED AIMED AT CLEARING OBSCURITY WHETHER THE CAPITAL GAIN IS SHORT TERM OR LONG TERM IS ADMISSIBLE BEING WITHIN THE REALM OF FOR ANY OTHER SUBSTANTIAL CAUSE ENVISAGED IN RULE 29. (VII) AGAIN DELHI TRIBUNAL IN CASE OF UPO LLC [12 - SOT - 499] HELD THAT ADDITIONAL EVIDENCE CAN BE ALLOWED NOT ONLY IF SUCH EVIDENCE IS REQUIRED 'TO ENABLE IT TO PRODUCE PRONOUNCE JUDGMENT' BUT ALSO 'FOR ANY OTHER SUBSTANTIAL CAUSE'. (VIII) INDORE TRIBU NAL IN CASE OF A. M. MATHUR [117 - TTJ - 953] ADMITTED ADDITIONAL EVIDENCE FOR SUBSTANTIAL CAUSE AND TO ENABLE THE TRIBUNAL TO PASS APPROPRIATE ORDER. (IX) AGAIN MADHYA PRADESH HIGH COURT IN CASE OF SHIYA DAWOODI BOHRA JAMAT [170 - TAXMAN193] TOOK THE SAME VIE W. (X) LASTLY, IN CASE OF MASCON GLOBAL LIMITED, CHENNAI BENCH (TM) ADMITTED THE ADDITIONAL EVIDENCE ON THE LOGIC THAT SUBSTANTIAL JUSTICE SHOULD BE DONE AND THE INTEREST OF JUSTICE SHOULD BE THE OVERRIDING CONSIDERATION.' A) AS REGARDS THE FIR ST OBJECTION REGARDING COMPLETION OF THE PROJECT THAT THE SAME WAS NOT COMPLETED WITHIN FOUR YEARS: THE ISSUE HAS BEEN DECIDED BY MY LEARNED PREDECESSOR FOR A.Y.2008 - 09 WHO HAS CONSIDERED ALL THE FACTS AND HELD AS UNDER: '2.3 I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS OF THE APPELLANT. I AGREE WITH THE ARGUMENTS AND THE SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE FOLLOWING REASONS: I.T.A. NO . 14 73 /AHD/ 20 1 3 ASSESSMENT YEAR: 200 9 - 10 PAGE 4 OF 6 A ) ON PERUSAL OF CERTIFICATES OF APPROVAL AND CERTIFICATES OF COMPLETION ISSUED BY LOCAL AUTHORITY FROM TIME TO TI ME IT IS FOUND THAT ALL TOWERS WERE COMPLETED BEFORE THE STIPULATED DATE. THE APPELLANT SO FAR AS THE TOWER 'A IS CONCERNED, IT WAS NOT CONSTRUCTED AND INSTEAD THE SPACE FOR TOWER 'A' WAS UTILIZED FOR THE PURPOSE OF CONSTRUCTION OF A TEMPLE WITH APPROVAL OF LOCAL AUTHORITY AND THE TOWER 'M' WAS RENAMED AS TOWER 'A . THE TOWER 'M' (RENAMED AS TOWER 'A') WAS COMPLETED ON 17.09.2009 I.E. BEFORE 31.03.2010. THE COMPLETION CERTIFICATES IN RESPECT OF OTHER TOWERS G & J WERE OBTAINED ON 17.10 . 2008 & 30.09.2009 RE SPECTIVELY. THESE ALL DATES FALL BEFORE 31.03.2010. THE TOWER 'K' WAS SOLD AS FSL AND SO THERE IS NO QUESTION OF COMPLETION CERTIFICATE IN TOWER 'K . TOWER 'K' WAS NEVER CONSTRUCTED. IN FACT, THE TOWER 'M' (RENAMED AS TOWER 'A'), G & J WERE COMPLETED BEFOR E 31.03.2010 AND EVEN THE SALES IN RESPECT OF UNITS OF THESE TOWERS WERE SHOWN IN A.Y. 2009 - 10 & A.Y.2010 - 11 IN THE RETURN OF INCOME WHICH WERE AVAILABLE AT THE TIME OF ASSESSMENT PROCEEDINGS. SO, EVEN IF THE CONSTRUCTION OF TOWER IS CONSIDERED TO BE A SIN GLE PROJECT, IT WAS COMPLETED BEFORE 31.03.2010 IN KEEPING WITH THE CONDITION THAT EXISTED IN SUB CLAUSE (II) OF CLAUSE (A) OF SECTION 801B(10). B) AS REGARDS OBSERVATIONS OF LEARNED AO REGARDING AMENDMENT IN PROVISIONS INCREASING THE PERIOD OF COMPLETIO N FROM FOUR TO FIVE YEARS TO BE NOT APPLICABLE FOR THIS YEAR, IT IS SEEN THAT THE WORDINGS OF SECTION ARE VERY CLEAR TO GIVE BENEFIT TO THE APPELLANT. THE AMENDED SECTION READS AS UNDER: SECTION 80IB(10)(A)(III) 'IN A CASE WHERE HOUSING PROJECT HAS BEEN A PPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1 ST DAY OF APRIL 2005,WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. THE ABOVE AMENDMENT IS VERY CLEAR THAT IT APPLIES TO ALL HOUSING PR OJECTS WHICH WERE APPROVED AFTER T HAT DATE I.E. 20 - 10 - 2005. THE OBSERVATION OF THE ASSESSING OFFICER THAT SECTION 80IB(10) WAS AMENDED BY FINANCE ACT, 2010 W.E.F. 01.04.2010 EXTENDING THE TIME LIMIT FOR COMPLETION OF PROJECT FROM FOUR YEARS TO FIVE YEARS W AS NOT APPLICABLE AS THIS AMENDMENT WAS NOT APPLICABLE FROM RETROSPECTIVE EFFECT IS BASICALLY ERRONEOUS AND CONTRARY TO THE LETTER AND SPIRIT OF THE AMENDED SECTION. THIS AMENDED SECTION IS APPLICABLE FOR ALL THE PROJECTS WHICH WERE APPROVED AFTER 1 - 4 - 2005 AND FIVE YEARS TO BE ALLOWED FOR COMPLETION OF THE PROJECT FROM THE END OF THE FINANCIAL YEAR OF THE DATE OF APPROVAL. IF THE ARGUMENTS OF THE ASSESSING OFFICER ARE ACCEPTED THEN ALL PROJECTS APPROVED BETWEEN 2 - 4 - 2005 AND 31 - 3 - 2006 BUT NOT COMPLETED UP TO 31 - 3 - 2010 WOULD NOT BE GETTING BENEFIT OF EXTENDED PERIOD OF FIVE YEARS, WHICH IS NOT, CERTAINLY, THE SPIRIT OF THE AMENDED SECTION. THE ARGUMENTS OF THE ASSESSING OFFICER ARE CONTRARY TO THE PROVISIONS OF AMENDED SECTION. IN THE CASE OF APPELLANT APPROVA L WAS GIVEN BY THE LOCAL AUTHORITY ON 20 - 10 - 2005 SO THE TIME ALLOWED FOR 'COMPLETION OF THE PROJECT WAS FIVE YEARS FROM THE END OF THE FINANCIAL YEAR OF THE DATE OF APPROVAL. THIS IS ALSO SUPPORTED BY THE DECISION OF DC IT VS . ANSAL PROPERTIES & INDUSTRIES ITA NO 5296/DEL/2003 WHEREIN IT WAS HELD , 'BENEFICIAL LEGISLATION SHOULD RECEIVE LIBERAL CONSTRUCTION WITH A VIEW TO IMPLEMENTING THE LEGISLATIVE INTENTION . T HEREFORE, THE BENEFITS OF PROVISIONS OF SECTION 80 IB (10) AS I.T.A. NO . 14 73 /AHD/ 20 1 3 ASSESSMENT YEAR: 200 9 - 10 PAGE 5 OF 6 AMENDED BY THE FINANCE ACT, 2000, W.E.F. 1 ST APRIL, 2001 WOULD BE AVAILABLE TO ALL PROJECTS COMMENCED ON OR AFTER 1 ST OCT. 1998 AND COMPLETED WITHIN THE EXTENDED PERIOD, VIZ, 31 ST MARCH, 2003.' CONCLUSION: THE BENEFITS OF PROVISIONS SEC 80 IB (10) AS AMENDED BY THE FINANCE ACT, 2000, W.E.F. 1 ST APRIL, 2001 WOULD BE AVAILABLE TO A LL PROJECTS COMMENCED ON OR AFTER 1 ST OCT. 1998 AND COMPLETED WITHIN EXTENDED PERIOD, VIZ, 31 ST MARCH, 2003.' IN VIEW OF THESE FACTS, REASONING AND THE DECISIONS MENTIONED ABOVE, I HAVE NO REASON TO DIFFER FROM MY LE ARNED PREDECESSOR'S DECISION. THE ASSESSING OFFICER IS DIRECTED TO ALLOW BENEFITS OF PROVISIONS OF SECTION 80IB(10) OF THE INCOME T AX ACT. HENCE, THE GROUNDS OF APPEAL ARE ALLOWED. 3. ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 4 . WE HAVE HEARD TH E RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. W E FIND THAT THERE IS NO DISPUTE THAT IN THE IMPUGNED ORDER THE LD . CIT(A) HAS MERELY FOLLOWED HIS PREDECESSOR S O RDER FOR ASSESSMENT YEAR 2008 - 09 IN ASSESSEE S OWN CASE. THE SAID ORDER HAS COME UP FOR CONSIDERATION BEFORE A CO - ORDINATE BENCH OF THIS T RIBUNAL AND THE CO - ORDINATE BENCH VIDE ORDER DATED 24.07.2015 HAS CONFIRMED THE SAME BY OBSERVING AS FOLLOWS : - 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. AFTER CONSIDERING THE FACTS OF THE CASE AND THE ARGUMENTS OF BOTH THE SIDES, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CIT(A). THE ASSESSING OFFICER DENIED THE EXEMPTION TO THE ASSESSEE ON THE GROUND THAT THE PROJECT OF THE ASSESSEE WAS CONSISTED OF 13 TOWERS AND OUT OF THOSE 13 TOWERS, THE ASSESSEE DID NOT COMPLETE 4 TOWERS, I.E., TOWER A , G , J AND K BEFORE THE STIPULATED PERIOD AS PER SECTION 80IB(1 0). THE CIT(A) HAS RECORDED THE FINDING THAT TOWER K WAS NEVER CONSTRUCTED, BECAUSE THE ASSESSEE SOLD THE FSI RELATING TO TOWER K . HE ALSO RECORDED THE FINDING THAT TOWER G & J WERE COMPLETED MUCH BEFORE THE STIPULATED DATE AND HE ALSO MENTIONED TH E DATE OF COMPLETION CERTIFICATE WHICH WERE 17.10.2008 AND 30.09.2009 RESPECTIVELY FOR TOWER G & J . HE ALSO POINTED OUT THAT THE TOWER M WAS RENAMED AS TOWER A AND WHICH WAS ALSO COMPLETED ON 17.09.2009. THESE FACTUAL FINDINGS RECORDED BY THE CIT(A ) HAVE NOT BEEN CONTROVERTED BEFORE US. THUS, WHEN ALL THE TOWERS WERE ALREADY COMPLETED BEFORE THE STIPULATED DATE, I.E., 31.03.2010; IN OUR OPINION, THE CIT(A) WAS FULLY JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IB(10). WE, TH EREFORE, FIND NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CIT(A) WHICH IS SUSTAINED AND THE REVENUE S APPEAL IS DISMISSED. I.T.A. NO . 14 73 /AHD/ 20 1 3 ASSESSMENT YEAR: 200 9 - 10 PAGE 6 OF 6 6. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING THE ESTEEMED VIEW OF THE CO - ORDINATE BENCH, WE CONFIRM THE RELIEF GRANTED BY THE LD . CIT(A) AND DECLINE TO INTERFERE IN THE MAT T ER. THE REASONING FOR 2008 - 09 HAVING BEEN APPROVED BY THE CO - ORDINATE BENCH AND THIS IS WHAT EXACTLY THE LD . CIT ( A ) FOLLOWED IN THE IMPUGNED ORDER , THERE IS NO OCCASION FOR US TO INTERFERE IN THE MATTER . 7. IN THE RESULT, APPEAL IS DISMISSED. P RONOUNCED IN THE OPEN COUR T TODAY ON THE 31 ST DAY OF MAY , 2016 . SD/ - SD/ - S.S. GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: THE 31 ST DAY OF MAY , 2016. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD