SHRI GHANSHYAM HARICHAND KHANDELWAL, Amaravati V. CIT- I, Nagpur

ITA 159/NAG/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3120 (ITAT-NAGPUR)
• Duration Of Justice: 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 13-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 80IB; 263

Judgement Text

1 ITA NO. 159/NAG/2015 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 159/NAG/2015 ASSESSMENT YEAR : 2010 - 11. GHANSHYAM HARICHAND KHANDELWAL, COMMISSIONER OF INCOME - TAX - I, AMRAVATI. VS. NAGPUR. PAN ABEPK0014F. APPELLANT RESPONDENT APPELLANT BY : SHRI R.B. ATAL. RESPONDENT : SHRI NARENDRA KANE. DATE OF HEARING : 12 - 01 - 2016 DATE OF PRONOUNCEMENT : 25 TH FEB. , 2016. O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM AN ORDER PASSED U/S 263 OF I.T. ACT DATED 11 - 03 - 2015. THE APPELLANT HAS CHALLENGED THE VALIDITY OF THE SAID ORDER AS PER THE FOLLOWING GROUNDS : 1. THE C.I.T. - I ERRED IN SETTING ASIDE THE ORDER U/S.143(3) PASSED BY A.CI.T. - A.C., AND DIRECTING TO REFRAME THE ASSESSMENT BY IGNORING THE FACT THAT THE ORDER IS PASSED AFTER APPLICATION OF MIND AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE IN RESPONSE TO THE QUERIES RAISED BY THE AO ON THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S.80IB(10). 2. THAT KEEPING IN VIEW THE FACTS OF THE CASE, THE HONBLE CIT ERRED IN HOLDING THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN FACT, M ORE PARTICULARLY AS THE ASSESSMENT ORDER IS PASSED AFTER5 CONSIDERING THE ISSUE IN DETAIL AND AFTER APPLICATION OF MIND ON THE POINT OF GRANTING DEDUCTION U/S.80 - IB(10). THE DEDUCTION IS ALLOWED EVEN IN THE EARLIER YEARS. 2 ITA NO. 159/NAG/2015 2. AN ASSESS MENT WAS MADE U/S 143(3) DATED 28 - 12 - 2012 WHEREIN A DEDUCTION U/S 80IB(10) WAS ALLOWED AMOUNTING TO RS.12,64,153/ - . THE ASSESSEE IN INDIVIDUAL CAPACITY IS STATED TO BE IN CIVIL CONSTRUCTION BUSINESS. HOWEVER, AS PER LEARNED COMMISSIONER, THE CLAIM OF DEDUC TION U/S 80IB(10) WAS WRONGLY GRANTED BY THE AO. THE REASONS GIVEN IN THE IMPUGNED ORDER PASSED U/S 263 WERE AS UNDER : _ . 3. I HAVE CAREFUL L Y CONS I DERE D THE S U BMI SSIONS MADE BY THE LD . AR . AS D I SCUSS E D ABOVE , THE HOUS I N G P R OJECT OF THE AS SE SS EE I N R ESPEC T OF WHI CH DEDUCT I O N U / S 80 - I B ( 1 0) HAS B EEN A LL O W ED B Y THE AA COMPR ISE D OF 22 P L O T S . SE RI AL NUMBE RS O F THE PL OT S ON WH I C H T HE HOUS I NG PROJECT I S S IT UATED ARE N OT C ON SE CUT I V E. PR IM A FAC IE , I T W OU L D APPEA R TO A NY PERSON THAT GROUPS OF T H ESE PLOTS ARE NOT CON TI GUO U S E SPEC I A LLY W HEN , IN A . Y. 2009 - 1 0 , T H E A O HAD HELD THAT THE P L OT NOS. 82 TO 87 WERE NOT CO NTI GUOUS . TO BE ELIG I B L E F O R DEDUCT I O N U / S 8 0 IB(10), THE ASSESSEE HAS TO SATISFY C E RTAIN BAS I C COND I T I ONS. ON E OF THE CON D I T IO NS AS PROVIDED IN CLAUSE (B) OF THE SECTION 80 - IB(10) I S THAT HOUSING PROJECT SHOULD B E ON T HE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE. KEEPING IN VIEW TH E NON - CONSECUTIVENESS OF THE SERIAL NUMBER OF THE PLOTS ON WHICH THE HOUSING PROJECT W AS CONSTRUCTED, I T WAS THE INCUMBENT ON TH E PART OF THE AA TO MAKE ENQUIR IE S AS TO W H ETH ER THE PLOTS WERE CONT I GUOUS SO AS TO SAT I S FY T HE C OND I T I O N O F THE HOUS I NG PRO J ECT BE I N G O N A PLOT OF LAND HA VI NG MINIMUM A R EA O F ONE A C RE . D U RIN G TH E COURS E O F HEARING, THE LD. AR H AS F IL E D A COP Y O F LE TTE R DATED 6 / 7 / 2 0 12 OF THE A MA R A V ATI MU N I C IP A L C ORPOR A TION. 3 . 1 ON A CA R EFUL R EADING OF THE SA I D LETTER, I F I ND THAT THE ASS E SSE E H AS MADE A C L A IM OF ALL THE 22 P L OTS BE I NG CONTIGUOUS T O EAC H OTHER O N THE B AS I S OF P ARA - 3 T HEREOF . HO WEVER, IT DOES NOT APPEAR TO BE SO. THIS L ETTER S T ATES T HAT AN APPL I CAT I ON W AS MADE SEE KING PERMISSION FOR CONSTRUCTION ON 22 PLOTS ON 17/11/2000. THE LETTER DOES NOT C L ARIFY - WHETHER SEPARATE APP LI CAT I ONS WE R E MADE OR ONE SINGLE A PP LICA T I ON W AS MADE I N RE SP ECT OF A L L THE 22 P L OTS. AS PER THE L ETTER , SO ME OF THE PLO T S HAVE I DE NTI CA L AREA WH ER EA S S OME PLOTS HAVE D I FFERENT AREAS. IT F URTHER S T A TE S THAT FOR DIFFERENT PLOTS, BUILDING PLA N S A S PER ADM I SS I B L E CA R PET AR E A W ERE SUBM I TT E D FO R PERM I SS I O N OF CONSTRU C TION . IN PARA - 3, I T I S STA TED THAT THE PERM I SSION W AS GRANTED I N T HE N A ME OF O NE P ERSON ON THE SAME DA Y VIDE ORDER NO. 1699 DATED 19/1 / 2001 . FURTHER I T I S STATED IN TH E L E T T ER T HAT THESE PERM I SS I O N S AR E RE L ATED TO RESPECTIVE PLOTS. THUS, FROM TH I S L E T TER , IT R E MA I NS U NPROVEN WHETHER AL L THE 22 P L O T S A RE CONT I GUOUS OR NOT . NO OTHER EV I DENCE I N TH E F ORM OF A SANCT I ONED AND APPROVED L A YOUT PLAN/MAP OF THE LAYOUT PLAN . WITH PLOT NU M B E R S, OP E N SPACES, LAND L EFT OP EN FOR PUBLI C UTILITY, LANES AND BY - LANES ETC HAS B E E N FURN IS H E D I N SUPPORT BY THE ASSESSEE DURING T HE ASSESSMENT PROCEEDINGS. IN FACT, TH I S I S WHE R E THE A O HAS F ALLEN IN AN ERROR. HE OU GHT TO HAVE SAT I SFIED HIMSELF THAT ALL THE 2 2 P L O TS WERE I ND EE D CO N T I GUOUS. H E SH O U LD NOT HAV E A LL O W ED T H E DEDU CTION WI THOUT AN Y CLEAR SAT I SFA C TION. FU R THER, THE CONTENT I ON OF TH E L D . A R T HAT THE I SSUE RE IATING TO SAT ISF A CT I ON OF T H E C O ND IT ION S FOR ALLOWANCE 3 ITA NO. 159/NAG/2015 OF DEDUCT I ON U/S 80 - IB ( 10) CAN BE E X A MI NED ONLY I N T H E INITIA L YEAR I S D EV O I D O F M E RI T . THE R E A R E ' NUMBER O F DEC I S I ONS I NCLUD I NG TH OSE OF HON ' B L E SU PREME COU RT T HA T THE PR I NC I P L E OF R ES JU D I CATA DOE S N OT APP LY T O INCO ME TA X PROCEED IN GS. A S REGARD S THE DE C I S I O N OF T HE C I T (A) ALLO WI N G DEDUCT I ON U / S 80 - 18 (1 0) TO THE ASSESS EE FOR THE A. Y . 200 9 - 1 0 , IT I S S EEN TH A T H E HAS NO T ALLOWED THE DEDUCTION ON THE BASIS OF LETT ER I SSU E D B Y T H E AMARAVATI MUN I C I PA L CORPO R A TION BUT ON THE BASIS OF THE FACT THAT THE SA I D DEDUCTION HAS BEEN ALLOWED TO THE ASSESSE E - IN A.Y . 2010~ 11 . THEREFORE THE ASSTT. ORD E R HAS BEEN PASSED BY THE AO WITHOUT AN Y APPLICATION OF MIND . 4. IN THE FOLLOWING DECIS I ONS , I T HAS BEEN HEL D T HAT TH E ORDER PASSED BY THE AO WI T H O UT APPL I CAT I ON OF M IN D WOUL D BE ER RON E O U S AND PRE J UD I C I AL TO THE IN T ERE ST O F R EVENUE : 1. C IT VS EM ERY STON E MANUFAC T UR I NG CO , 2 1 3 ITR 843(R A J . ) 2. M O FU SS IL WAREHOUSE & T R AD ING C O . LTD .VS . C I T 238 I TR 8 67 (MAD) 3. ASHO K LEYLAND LTD. VS CIT 26 0 I TR 5 99 (M A D) 4. CIT VS BHAGWANDAS 272 I T R 3 6 7( A II ) 5. SHERAFFUDIN VS CIT 41 DTR ( K E R) 263 2. IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD. VS CIT 243 ITR 83(SC), IT WAS HELD THAT WHERE THE ORDER WAS PASSED WITHOUT APPLICATION OF MIND, IT WOULD BE AN ERRONEOUS ORDER. THEREFORE, THE ORDER DATED 28/12/2012 P ASSED BY THE AO U/S 143(3) OF THE LT . ACT FOR TH E A . Y. 2010 - 11 IS CONSIDERED TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENU E . ACCORDINGLY, THE SAID ORDER IS SET ASIDE WITH A DIRECTION TO THE AO TO RE - EXAMINE ASSESSE E ' S CLAIM OF DEDUCTION U/S 80 - IB(10) IN THE LIGHT OF ABOVE OBSERVATIONS. THE ASSESSEE SHOU LD DEMONSTRATE TO THE AO WITH THE HELP OF MAP - /PLANS ETC . THAT THE PLOTS ARE CONTIGUOUS SO AS TO SATISFY THE CONDITION THAT THE HOUSING PROJECT IS ON THE SIZE OF PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE. THE AO SHOU LD REDO THE ASSESSMENT AFTER ALLOWING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 3. ON THIS ISSUE WE HAVE HEARD BOTH THE SIDES. THE ONLY ARGUMENT OF LEARNED D.R. MR. NARENDRA KANE IS THAT THE PLOTS IN QUESTION WERE PHYSICALLY SEPARATED, HENCE THEY WERE NOT CONSTRUCTED ON A PLOT HAVING A PRESCRIBED SIZE OF ONE ACRE. HE HAS PLEADED THAT THE REQUIREMENT OF SIZE OF PLOT OF ONE ACRE WAS NOT FULFILLED. HENCE THE AO HAS WRONGLY ALLOWED THE CLAIM WHICH WAS RIGHTLY SET ASIDE BY THE LEARNED COMMISSIONER. 4 ITA NO. 159/NAG/2015 4. ON THE OT HER HAND, FROM THE SIDE OF THE ASSESSEE LEARNED A.R. MR. R.B. ATAL HAS INFORMED THAT IN RESPECT OF THIS VERY PROJECT A VIEW HAS ALREADY BEEN EXPRESSED IN FAVOUR OF THE ASSESSEE BY THIS VERY TRIBUNAL IN ITA NO. 251/NAG/2014 FOR ASSESSMENT YEAR 2009 - 10 DATED 28 - 08 - 2015 WHEREIN IT WAS HELD AS UNDER : 2 . FACTS IN BRIEF, AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER DATED 29 TH DECEMBER 2011, PASSED UNDER SECTION 143(3) OF THE ACT, WHERE THE ASSESSEE, IN INDIVIDUAL CAPACITY, IS IN THE BUSINESS OF CIVIL CONSTRUCTION. THE ASSESSEE HAS DEVELOPED A HOUSING PROJECT IN AMRAVATI. THE CONSTRUCTION WAS STARTED FROM THE FINANCIAL YEAR 200 0 01. THE ASSESSEE HAD MADE A CLAIM OF DEDUCTION UNDER SECTION 80 IB OF THE ACT, FOR THE YEAR UNDER CONSIDERATION AT ` 13,11,323. THE ASSESSING OFFICER HAS RAISED THE OBJECTION THAT THE PLOTS ON WHICH THE HOUSING PROJECT WAS DEVELOPED WAS NOT ON A SINGLE P LOT BUT ON DIFFERENT PLOTS WHICH WERE NOT CONTIGUOUS. ACCORDING TO THE ASSESSING OFFICER, SINCE THE PLOTS WERE NOT CONTIGUOUS, THEREFORE, A CRITERIA OF PROJECT TO BE DEVELOPED ON A PIECE OF LAND OF MORE THAN ONE ACRE WAS NOT FULFILLED. RESULTANTLY, THE CLA IM WAS DISALLOWED. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE LEARNED CIT(A) HAS GRANTED THE RELIEF AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE WRITTEN SUBMISSIONS OF THE APPELLANT. IT IS APPARENT THAT THE APPELLANT HAS BEEN CLAIMING DEDUCTION U/S. 80IB FOR THE LAST SEVERAL YEARS AND THE SAME HAS BEEN ALLOWED TO THE APPELLANT. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS ALSO, VARIOUS DETAILS WERE FURNISHED BY THE APPELLANT AS REQUIRED BY THE LD. AO TO ESTABLISH ITS CLAIM OF DEDUCTION. IT WAS ONLY ON 16 - 12 - 2011 THAT THE LD. AD REQUIRED THE APPELLANT TO FURNISH A CERTIFICATE FROM AMRAVATI MUNICIPAL CORPORATION TO ESTABLISH THAT THE PLOTS OF LAND INVOLVED IN THE CONSTRUCTION ARE CONTIGUOUS. IT WAS BECAUSE OF LACK OF TIME THAT THE APPELLANT COULD NOT FURNISH A CERTIFICATE AND THE LD. AD DISALLOWED THE CLAIM OF DEDUCTION U/S 801B. THE SAID CE RTIFICATE WAS EVENTUALLY RECEIVED BY THE APPELLANT ON 06 - 07 - 2012 WHICH WAS THEN SUBMITTED BY THE APPELLANT BEFORE THE LD. AD DURING THE COURSE OF 5 ITA NO. 159/NAG/2015 ASSESSMENT PROCEEDINGS FOR THE SUBSEQUENT ASSESSMENT YEARS I.E. AY 2010 - 11. THE SAID ASSESSMENT WAS ALSO COM PLETED IN SCRUTINY VIDE ORDER DATED 28 - 12 - 2012 AND THE CLAIM OF THE APPELLANT OF DEDUCTION U/S 80IB AMOUNTING TO RS. 1264133/ - HAS BEEN EXEMPTED BY THE LD. AD AND ALLOWED AFTER VERIFICATION. THE APPELLANT HAS ALSO SUBMITTED A COPY OF THE SAID ASSESSMENT O RDER PASSED U/S 143(3). IN VIEW OF THE ABOVE FACTS IT IS EVIDENT THAT THE APPELLANT HAS CORRECTLY CLAIMED DEDUCTION U/S 80IB AND THE SAME IS THEREFORE HELD TO BE ALLOWABLE. THIS GROUND IS THEREFORE ALLOWED. BEING AGGRIEVED, THE REVENUE IS BEFORE US. 2. WE HAVE HEARD BOTH THE SIDES. AT THE OUTSET, WE HAVE BEEN INFORMED THAT IN ASSESSEES OWN CASE, FOR ASSESSMENT YEAR 2010 11, AN ASSESSMENT WAS MADE UNDER SECTION 143(3) OF THE ACT DATED 28 TH DECEMBER 2012, WHEREIN THE ASSESSING OFFICER, AFTER SCRUTINY, HA S ALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT OF ` 12,64,133. THEREFORE, IT IS ARGUED THAT THE CLAIM OF DEDUCTION UNDER SECTION 80IB OF THE ACT WAS NOT ONLY ALLOWED IN THE PAST YEARS BUT ALSO IN THE SUBSEQUENT YEARS BY THE REVENUE DEPA RTMENT. ONLY IN THIS YEAR, A DIFFERENT VIEW WAS TAKEN BY THE ASSESSING OFFICER THAT TOO WITHOUT CONSIDERING THE FACTS OF THE CASE. OUR ATTENTION HAS ALSO BEEN DRAWN ON A LETTER DATED 6 TH JULY 2012, ISSUED BY THE ASSISTANT DIRECTOR, TOWN PLANNING, MUNICIPAL CORPORATION, AMRAVATI, WHEREIN IT WAS CERTIFIED THAT THE PLOTS WERE JOINT WITH EACH OTHER. THUS, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND CERTAIN EVIDENCES PLACED IN THE SHORT COMPILATION THAT WE ARE OF THE VIEW THAT THE REV ENUE DEPARTMENT SHOULD HAVE TAKEN A CONSISTENT VIEW ON IDENTICAL FACTS IN THE CASE OF THIS ASSESSEE. WE HEREBY AFFIRM THE FACTUAL FINDINGS OF THE LEARNED CIT(A) AND DISMISS THE GROUNDS RAISED BY THE REVENUE. 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE SID ES, WE ARE OF THE CONSIDERED OPINION THAT THE INVOCATION OF JURISDICTION U/S 263 OF I.T. ACT WAS NOT AS PER LAW. 6 ITA NO. 159/NAG/2015 WE HAVE BEEN INFORMED THAT FOR THE YEAR UNDER CONSIDERATION CERTAIN ENQUIRIES HAVE BEEN RAISED BY THE AO WHICH WERE PROPERLY COMPLIED WITH, HEN CE THE CLAIM OF DEDUCTION WAS ALLOWED BY THE AO AFTER DUE APPLICATION OF MIND. SECONDLY, IT HAS BEEN CATEGORICALLY STATED THAT THE SANCTIONED LAYOUT WAS SITUATED IN FOUR ACRES OF LAND, HENCE THE OBJECTION OF THE LEARNED COMMISSIONER WAS INCORRECT. BE THAT AS IT WAS, THE PRESENT POSITION IS THAT AFTER CONSIDERING THE FACTS AS WELL AS THE CIRCUMSTANCES OF THE CASE THE RESPECTED COORDINATE BENCH HAS ALREADY GRANTED RELIEF IN RESPECT OF THE SAID PROJECT BY GRANTING DEDUCTION U/S 80IB(10) OF I.T. ACT. SINCE IN T HE ASSESSMENT YEAR 2009 - 10 A DEDUCTION U/S 80IB(10) HAS ALREADY BEEN GRANTED AND THE SAME PROJECT WAS STATED TO BE CONTINUED FOR ASSESSMENT YEAR 2010 - 11, THE YEAR UNDER CONSIDERATION, THEREFORE RESPECTFULLY FOLLOWING THE VIEW ALREADY TAKEN, WE HEREBY HOLD THAT THERE WAS NO VALID REASON ON THE PART OF THE LEARNED COMMISSIONER TO SET ASIDE THE ORDER WITH A DIRECTION TO EXAMINE WHETHER THE PLOTS WERE CONTIGUOUS OR NOT. WE, THEREFORE, QUASH THE ORDER PASSED U/S 263 DATED 11 - 03 - 2015. GROUNDS RAISED ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF FEB. 2016. SD/ - SD/ - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 25 - 02 - 2016. 7 ITA NO. 159/NAG/2015 COPY FORWARDED TO : 1. GHANSHYAM HARICHAND KHANDELWAL, NEW CONGRESS NAGAR, AMRAVATI. 2. A.C.I.T., AMRAVATI CIRCLE, AMRAVATI. 3. COMMISSIONER OF INCOME - TAX - ,NAGPUR. 4. D.R., ITAT, NAGPUR. 5. GUARD FILE TRUE COPY BY ORDER WAKODE. ASSISTANT REGISTRAR, ITAT, NAGPUR