Assistant Commissioner of Income Tax Circle-1, Nagpur V. M/s. Aryaman Builders And Developers, Nagpur

ITA 165/NAG/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1921 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 14-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D P T IWARI
• Assessee Lawyers: M MANI
• Section: 80IB

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M ITA NO. 165 & 338 / N AG / 20 1 1 ( ASSESSMENT YEAR S : 200 7 - 0 8 & 200 8 - 0 9 ) ACIT, CIRCLE 1, NAGPUR (MS) VS. M/S ARYAMAN BUILDERS AND DEVELOPERS, 24, NIT COMPLEX, GOKULPEETH, NAGPUR . PAN/GIR NO. : A AKFA 3517 E ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : M R. D.P.TIWARI /ASSESSEE BY : MR. M.MANI DATE OF HEARING : 2 8 TH JAN ., 201 3 DATE OF PRONOUNCEMENT : 1 ST FEB. ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH E SE TWO APPEALS HAVE BEEN PREFERRED BY THE DEPARTMENT BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER OF LEANED CIT (A) - I , NAGPUR (MAHARASHTRA) RELATING TO THE ASSESSMENT YEAR 200 7 - 0 8 AND 200 8 - 0 9 , RESPECTIVELY , WHICH HAVE BEEN HEARD THROUGH E - COURT, MUMBAI . 2 . THE DEPARTMENT IS OBJECTING IN ALLOWING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT FOR THE ASSESSMENT YEARS 2007 - 08 AND 2008 - 09, RESPECTIVELY . ITA NO S . 165 & 338 /20 1 1 2 3 . SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE CASES, THEREFORE, FOR THE SAKE OF CONVENIENCE , BOTH THESE CASES HAVE BEEN HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDER TOGETHER. 4 . LEARNED DR, WHO APPEARED ON BEHALF OF THE DEPARTMENT, PLACED RELIANCE ON THE ORDER OF AO. 5 . ON THE OTHER HAND, LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF THE LEARNED CIT(A). IT WAS SUBMITTED THAT LEARNED CIT(A) HAS ALLOWED THE ISSUE FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEAR. 5 . WE HAVE HEA RD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND ORDERS OF THE AUTHORITIES BELOW, WE FOUND NO INFIRMITY IN THE FINDING OF THE LEARNED CIT(A) . 6 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM HAS FILED ORIGINAL RETURN DECLARING TOTAL INCOME OF RS. NIL AFTER CLAIMING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT FOR ASSESSMENT YEAR 2007 - 08. SIMILARLY, FOR THE ASSESSMENT YEAR 2008 - 09, THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF RS. 40,36,690/ - AFTER CLAIM ING DEDUCTION OF RS. 2,78,23,515/ - UNDER SECTION 80IB(10) OF THE ACT. THE ASSESSEE COMPANY IS A BUILDER AND DEVELOPER OF HOUSING PROJECT. THIS FIRM HAS TAKEN UP A PROJECT AT SAROJ NAGAR FOR CONSTRUCTION OF A HOUSING PROJECT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE FIRM HAS EXCEEDED THE PRESCRIBED LIMIT OF 1500 SQ.FT. IN RESPECT OF CERTAIN FLATS AND CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON PRO - RATA BASIS. DURING THE ASSESSMENT PROCEEDINGS, THE ITA NO S . 165 & 338 /20 1 1 3 AO DISALLOWED THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF PROJECT CALLED SAROJ NAGAR SPREAD OVER AN AREA OF MORE THAN 8 ACRES. THE ASSESSEE CLAIMED THAT THE PROJECT SAROJ NAGAR IS A SINGLE HOUSING PROJECT WHICH ARE DIVIDED INTO VARIOUS PLOTS AFTE R PROVIDING ROAD, STORM WATER DRAINS, OPEN SPACES AND PUBLIC UTILITY LAND. HOWEVER, THE AO DISALLOWED THE CLAIM MADE BY THE ASSESSEE STATING THAT THE ASSESSEE FIRM HAS VIOLATED SECTION 80IB(10) OF THE ACT AND DEDUCTION PRO - RATA BASIS IS ALSO NOT ADMISSIBLE . ACCORDING TO THE AO, THERE IS NO CONSOLIDATED APPROVAL OBTAINED OF HOUSING PROJEC T. INDIVIDUAL SANCTIONS ARE NOT ON THE SIZE OF PLOT OF LAND OF 1 ACRE AND CERTAIN UNITS HAVE EXCEEDED THE PERMISSIBLE LIMIT OF 1500 SQ.FT. FURTHER THE AO STATED THAT THERE I S NO PROFIT DERIVED IN THE PRESENT YEAR BY THE UNDERTAKING, THEREFORE, DEDUCTION IS NOT ALLOWABLE. 7 . SIMILAR ORDER WAS PASSED FOR BOTH OF THE YEARS. ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) FOR BOTH OF THE YEARS. DETAIL SUBMISSIONS WERE FILED BEFORE THE LEARNED CIT(A) MENTIONING THE AREA OF PLOT AND REASONING FOR ALLOWABILITY. THE ASSESSEE ALSO FURNISHED DETAIL OF SANCTION AND REVISED SANCTION OBTAINED WHICH HAS BEEN INCORPORATED BY THE LEARNED CIT(A) IN HIS ORDER. RELIANCE WAS PLACED ON THE CL ARIFICATION ISSUED BY THE CBDT IN F.NO.205/3/2001/ITA - II, DTD.04 - 05 - 2001. ALL THE DETAILS WERE SENT TO THE AO FOR HIS REMAND REPORT. A REPLY WAS RECEIVED FROM THE AO WHICH IS ALSO INCORPORATED IN THE ORDER OF THE LEARNED CIT(A) IN PARA 6 OF ITS ORDER FOR A SSESSMENT YEAR 2007 - 08. THE ASSESSEE ALSO FILED REPLY IN ITA NO S . 165 & 338 /20 1 1 4 RESPONSE TO THE REMAND REPORT, WHICH IS ALSO REPRODUCED IN THE ORDER OF LEARNED CIT(A) IN PARA 7 OF HIS ORDER. AFTER CONSIDERING SUBMISSION AND PERUSING MATERIAL ON RECORD, LEARNED CIT(A) FOUND THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB. LEARNED CIT(A) NOTED THAT ON SIMILAR FATS THE TRIBUNAL IN THE CASE OF AIR DEVELOPERS, PASSED IN ITA NO. 447/NAG/2001, VIDE ORDER DATED 21 - 5 - 2008 , THE SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. IT HAS BEEN HELD BY THE TRIBUNAL THAT WHEN MULTIPLE SANCTIONS WERE GRANTED BY THE NIT , IT WOULD NOT DISENTITLE THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. LEARNED CIT(A) NOTED THAT IN THE CASE OF THE ASSESSEE, THERE WAS A HOUSIN G PROJECT DEVELOPED O N LAND EXISTING 1 ACRE WHEREIN INDIVIDUAL DWELLING RESIDENTIAL UNITS WAS LESS THAN 1500 SQ.FT. ACCORDINGLY, IT WAS FOUND THAT SANCTION ON DIFFERENT DATES FOR CONSTRUCTION IS TO BE CONSIDERED ONE HOUSING PROJECT. THEREFORE, THE VIEW OF THE AO WAS FOUND NOT ACCEPTABLE THAT THE HOUSING PROJECT WAS NOT THE ONE PROJECT. 8 . AS REGARD THE OBJECTION OF THE AO THAT CERTAIN UNITS EXCEED THE PRESCRIBED AREA OF 1500 SQ.FT., THIS ISSUE ALSO STANDS COVERED IN FAVOUR OF THE ASSESSEE IN CASE OF AIR D EVELOPERS , 122 ITD 125 . IN THIS CASE, THE TRIBUNAL HELD THAT PRO - RATA DEDUCTION IS AVAILABLE WHEN CERTAIN UNITS EXCEED 1500 SQ.FT. THIS WOULD NOT DISENTITLED THE PROJECT TO DEDUCTION UNDER SECTION 80IB AND ACCORDINGLY THE AO WAS DIRECTED TO ALLOW THE DEDUC TION. LEARNED CIT(A) HAS ALSO CONSIDERED THE DECISION OF THE H O N BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIATES, 51 DTR 298 , WHEREIN IT HAS BEEN DECIDED THAT PRO - RATA ITA NO S . 165 & 338 /20 1 1 5 DEDUCTION IS AVAILABLE WHEN CONDITIONS LAID DOWN IN SECTION 80IB(10) ARE SATISFIED. THESE FINDINGS OF THE LEARNED CIT(A) NEITHER COULD BE CONTROVERTED BY THE LEARNED DR NOR ANY OTHER MATERIAL TO BE BROUGHT ON RECORD TO ESTABLISH OTHERWISE. THEREFORE, IN VIEW OF THE REASONING GIVEN BY THE LEARNED CIT(A) , WHICH ARE IN CONSONANCE WITH THE ORDER OF THE TRIBUNAL AS WELL AS THE HON BLE BOMBAY HIGH COURT IN THE C A SE OF BRAHMA ASSOCIATES (SUPRA) , WE CONFIRM THE ORDER OF THE LEARNED CI T(A) FOR BOTH OF THE YEARS AS THE FACTS ARE SIMILAR. 9 . IN THE RESULT , BOTH THE APPEAL S OF THE DEPARTM ENT ARE DISMISSED . ORDER PRONOUNCED IN THE E - COURT ON THIS 1 ST DAY OF FEB , 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 0 1 / 02 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE AP PELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI