Janapriya Engineers Syndicate (JV), Hyd, Hyderabad V. ITO, Ward-6(3), Hyderabad, Hyderabad

ITA 166/HYD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6587 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 15-02-2016
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ES B , HYDERABAD BEFORE S HRI D . MA NMOHAN , VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1 66 /H YD /20 16 ASSESSMENT YEAR : 20 11 - 12 M/S. JANA PRIYA ENGINEERS SYNDICATE - (J.V) , HYD ERABAD [PAN: A A EFJ4368G ] VS INCOME TAX OFFICER , WARD - 6( 3 ), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A. SRINIVAS, AR FOR REVENUE : SHRI B. KURMI NAIDU, DR DATE OF HEARING : 10 - 05 - 201 6 DATE OF PRONOUNCEMENT : 10 - 05 - 201 6 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS ) - 6, HYDERABAD DATED 23 - 11 - 2015. ASSESSEE IS AGGRIEVED ON TWO ISSUES AND RAISED FOUR GROUNDS: 2. THE AO OUGHT NOT TO HAVE DISALLOWED AN AMOUNT OF RS. 3,87,19,272/ - BEING THE CLAIM MADE U/S. 80IB. 3. THE APPELLATE COMMISSIONER OUGHT NOT TO HAVE DISMISSED THE CLAIM OF THE DEDUCTION U/S. 80IB AMOUNTING TO RS. 3,87,19,272/ - . I.T.A. NO. 1 66 / HYD / 20 16 : - 2 - : 4. THE AO OUGHT NOT TO HAVE DISALL OWED AN AMOUNT OF RS. 3,89,713/ - BEING FINANCE CHARGES CLAIMED BY THE ASSESSEE. 5. THE APPELLATE COMMISSIONER OUGHT NOT TO HAVE DISALLOWED THE CLAIM OF THE DEDUCTION FINANCE CHARGES AMOUNTING TO RS.3,89,713/ - . 2. BRIEFLY STATED, ASSESSEE IS A JOINT - VENT URE ORGANIZATION AND IS IN BUSINESS OF CONSTRUCTION OF HOUSING PROJECTS. FOR THE YEAR UNDER CONSIDERATION, ITS RETURN OF INCOME AT NIL AFTER CLAIMING DEDUCTION OF ITS ENTIRE PROFIT OF RS. 3,87,19,272/ - U/S. 80IB(10) OF THE ACT. AO REJECTED THE CLAIM MAIN LY ON THE GROUND THAT PROJECT WAS NOT COMPLETED BY 31 - 03 - 2008 AND HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 80IB. IN ARRIVING AT THAT CONCLUSION THE CERTIFICATE FROM GHMC , WHICH STATED THAT PROJECT WAS STILL TO BE COMPLETED BY AUGUST, 2010 WAS RELIE D . IT WAS ALSO CONSIDERED THAT THE PROJECT WAS ALSO NOT IN THE NAME OF JOINT - VENTURE. AO ALSO FOLLOWED THE DECISION OF THE ITAT IN ASSESSEES OWN CASE FOR THE EARLIER YEARS WHEREIN, THE DISALLOWANCE OF THE CLAIM U/S. 80IB FOR THE SAME PROJECT WAS UPHELD. IN ADDITION TO THE ABOVE ISSUE, AO ALSO DISALLOWED THE AMOUNT OF RS. 3,89,713/ - CLAIMED AS EXPENDITURE TOWARDS FINANCIAL CHARGES U/S. 40(BA) O F THE ACT FOLLOWING THE DECISION GIVEN BY ITAT IN EARLIER YEARS. ACCORDING TO AO, ANY PAYMENT BY JV TO MEMBER C ONSTITUENT UNDER THE HEAD INTEREST, SALARY, BONUS, COMMISSION AND REMUNERATION WAS NOT ALLOWABLE AS A DEDUCTION. FURTHER, IT WAS FOUND OUT THAT ASSESSEE HAS NOT AVAILED THE LOAN AND ACCORDINGLY, DEDUCTION IN RESPECT OF INTEREST ON SUCH LOAN WAS NOT ALLOWA BLE. 3. AGGRIEVED, THE MATTER WAS CARRIED TO THE CIT(A), WHO CONSIDERING THE ORDERS OF ITAT IN ITS ORDER DT. 29 - 11 - 2013 IN ITA NO. 1250 - 1253/HYD/2012 UPHELD THE ORDER OF AO ON BOTH THE ISSUES. THE ORDER OF LD. CIT(A) IS AS UNDER: I.T.A. NO. 1 66 / HYD / 20 16 : - 3 - : 04.0 IT IS SEEN THAT T HE APPELLANT HAD CLAIMED DEDUCTION U/S. 80IB(10) FOR THE AYS. 2005 - 06 TO 2008 - 09. THIS ISSUE HAD COME FOR CONSIDERATION BEFORE THE HON'BLE ITAT, HYDERABAD AND THE HON'BLE TRIBUNAL VIDE ITS ORDER DATED 29.11.2013 IN ITA NO. 1250 - 1253/HYD/2012 AFTER DISCUSS ING IN DETAIL THE CLAIM MADE BY THE APPELLANT U/S. 80IB(10) IN PARA NO. 9 OF ITS ORDER HELD THAT: IN OUR OPINION, THEREFORE, THE ASSESSING OFFICER WAS CORRECT AND JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER S. 80IB OF THE ACT, FOR THE YEARS UNDER APPEAL. CONSEQUENTLY, WE FIND NO INFIRMITY IN THE ACTION OF THE CIT(A), IN CONFIRMING THE VIEW TAKEN BY THE ASSESSING OFFICER WHILE DENYING THE ASSESSEES CLAIM FOR DEDUCTION UNDER S.80IB OF THE ACT. WE ACCORDINGLY UPHOLD THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE AND REJECT THE GROUNDS OF THE ASSESSEE IN ITS APPEAL FOR ALL THE FOUR YEARS. 04.1. REGARDING THE DISALLOWANCE OF INTEREST U/S. 40(BA) OF THE ACT, THE ISSUE CAME BEFORE THE HON'BLE ITAT (SUPRA) AND IT HELD THAT SINC E THE ASSESSEE ITSELF HAS NOT AVAILED THE LOAN, AND IT IS THE CONSTITUENT OF THE ASSESSEES JV WHICH AVAILED THE LOAN, ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION IN RESPECT OF INTEREST ON SUCH LOAN, EVEN IF IT WAS PAID BY THE ASSESSEE DIRECTLY TO THE AP STATE FINANCE CORPORATION. WE THEREFORE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE CIT(A) ON THIS ISSUE. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A), AND REJECT THE GROUNDS OF THE ASSESSEE ON THIS ISSUE . 04.2 . THE FACTS OF THIS YEAR ARE IDENTICAL TO TH E FACTS FOR AYS. 2005 - 06 TO 2008 - 09 ON THE BASIS OF WHICH THE HON'BLE ITAT HAD UPHELD THE ORDER OF THE ASSESSING OFFICER AND NOTHING NEW HAS BEEN BROUGHT ON RECORD. IN VIEW OF IT, RESPECTFULLY FOLLOWING THE RATIO OF THE DECISION OF THE HON'BLE ITAT (SUPRA ) IN APPELLANTS OWN CASE FOR A YS. 2005 - 06 TO 2008 - 09, THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE CLAIM FOR DEDUCTION U/S. 80IB(10) AND OF INTEREST U/S. 40(BA) OF THE ACT IS UPHELD. 4. AT THE OUTSET, LD. DR SUBMITTED THAT THE ISSUES IN THIS APPEAL ARE COVERED BY THE ORDERS OF THE CO - ORDINATE BENCH ES IN EARLIER YEARS AND BOTH AO AND CIT(A) HAVE FOLLOWED THE SAME IN DISALLOWING THE CLAIMS. LD. DR WHILE FAIRLY ADMITTING THAT THE ISSUES ARE COVERED AGAINST ASSESSEE , SUBMITTED THAT THE MATTERS AR E PENDING BEFORE THE HON'BLE HIGH COURT. 5. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSING THE ORDERS OF THE AUTHORITIES, WE ARE OF THE OPI NION THAT THERE IS NO NEED TO DI F F ER FROM THE FINDINGS . ITAT IN EARLIER YEARS ON THE SAME I.T.A. NO. 1 66 / HYD / 20 16 : - 4 - : PROJECT , HAS CONFIRM ED THE REVENUE STAND, AND THESE ORDERS WERE FOLLOWED BY THE REVENUE AUTHORITIES IN DISALLOWING ASSESSEES CLAIMS. ACCORDINGLY, WE FIND NO MERIT IN THE GROUNDS RAISED BY ASSESSEE. 6. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN TH E OPEN COURT ON 10 TH MAY, 2016 UPON COMPLETION OF HEARING SD/ - SD/ - (D . MANMOHAN ) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED 10 TH MAY, 201 6 TNMM COPY TO : 1. M/S. JANA PRIYA ENGINEERS SYNDICATE (J.V) , 8 - 2 - 120/86, PLOT NO. 11 AND 12, KEERTHI AND PRIDE TOWERS, ROAD NO. 2, BANJARA HILLS, HYDERABAD. 2 . INCOME TAX OFFICER, WARD - 6 (3), IT TOWERS, AC GUARDS, HYDERABAD. 3 . CIT ( APPEAL S ) - 6 , HYDERABAD. 4. PR. C IT - 6 , HYDERABAD. 5 . D.R. ITAT, HYDERABAD. 6 . GUARD FILE.