Mauli Hills Cottages, Pune V. Income-tax Officer, Pune

ITA 1678/PUN/2011

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0031 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH; VINEETA MENON
• Assessee Lawyers: S R NADPUROHIT
• Keywords: Difference of opinion; Change of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S.PADVEKAR, JUDICIAL MEMBER. AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.1678/PN/2011 (ASSTT. YEAR : 2006-07) M/S.MAULI HILLS COTTAGES, 798, BHANDARKAR INSTITUTE ROAD, PUNE 411004. .. APPELLANT PAN: AAGFM9040A VS. ITO, WARD-3(1), PUNE. .. RESPONDENT ASSESSEE BY : SHRI S.R.NADPUROHIT DEPARTMENT BY : SHRI S.K.SINGH AND SMT.VINEETA MENON DATE OF HEARING : 18.12.2012 DATE OF PRONOUNCEMENT : 28.12.2012 ORDER PER R.S.PADVEKAR, JM : IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMP UGNED ORDER OF THE LD. CIT(A)-II, PUNE, DATED 12.10.2011 FOR TH E A.Y. 2006-07. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN APP EAL: 1. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED BOTH ON FACTS AND IN LAW, IN HOLDING THAT MERELY BE CAUSE THE HOUSING PROJECT UNDERTAKEN BY THE APPELLANT WAS SAN CTIONED AS TOURIST CENTRE (RESORT) BY THE COLLECTOR, IT IS NOT A HOUSING PROJECT. HE OUGHT TO HAVE HELD THAT BY SANCTIONING IT AS TOURIST CENTRE IT DOES NOT CEASE TO BE A HOUSING PROJECT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) OUT TO HAVE HELD ON FACTS THAT THE EXPRESSION HOUSING PROJECT IS NOT DEFINED IN THE ACT AND HENCE ORDINARY POPULAR MEANING HAS T O BE ADOPTED WHICH SHOWS THAT A HOUSE MEANS A BUILDING F OR HUMAN HABITATION, HOUSING MEANS HOUSES CONSIDERED COLLE CTIVELY AND A PROJECT MEANS AN ENTERPRISE CAREFULLY PLANNED T O ACHIEVE A PARTICULAR AIM. 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN INTRODUCING NEW CONDITIONS NOT SPECIFIED BY THE SEC TION IN INTERPRETING THE EXPRESSION HOUSING PROJECT AND W RONGLY 2 IGNORED THE VITAL FACTS THAT IT WAS RECOGNIZED BY H OUSING DEVELOPMENT FINANCE CORPORATION LTD FOR GRANTING LO ANS FOR HOUSING. 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) IS ERRED IN LAW AND ON FACTS IN CONFIRMING A CONTRARY VIEW TAKE N BY ASSESSING OFFICER WITH CHANGE OF OPINION THAN THE E ARLIER DECISION GRANTING DEDUCTION U/S.80-IB(10) IN THE SA ME SET OF FACTS AND CIRCUMSTANCES OF THE CASE FOR EACH OF THE ASSESSMENT YEARS 2003-04 TO 2005-06; AND AS SUCH, THE DEDUCTIO N AS CLAIMED BE ALLOWED. 2. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBM ITS THAT THE ISSUE OF DEDUCTION U/S.80IB(10) HAS BEEN ALREADY DE CIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE IN THE IMMEDIATE PRECEDING YEAR AS WELL AS SUBSEQUENT YEAR I.E., 2005-06 AND 2007-0 8. THE LD. COUNSEL ALSO FILED COPY OF THE TRIBUNALS ORDER IN ASSESSEES OWN CASE FOR THE A.YS. 2005-06 AND 2007-08 IN ITA.NO.76 5/PN/2010 AND ITA.NO.146/PN/2011. SO FAR AS A.Y. 2007-08 IS CONCERNED, THE ISSUE HAS BEEN DECIDED ON MERIT. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND DEVELOPMENT OF RES IDENTIAL UNITS/COTTAGES. THE ASSESSEE HAS UNDERTAKEN A PROJ ECT AS MAULI HILLS ON THE PLOT OF LAND ADMEASURING ABOUT 2,23,0 37 SQ.MTRS. AT VILLAGE AGLAMBE, TALUKA HAVELI, DISTRICT PUNE. THE SAID PROJECT HAS BEEN SANCTIONED BY THE COLLECTOR OF PUNE VIDE HIS O RDER DATED 31.08.2000 AND 17.05.2001. THE ASSESSEE HAS CLAIME D THE DEDUCTION U/S.80IB(10) TO THE EXTENT OF RS.17,20,69 9/-. AFTER EXAMINING THE DETAILS FILED BY THE ASSESSEE, THE AS SESSING OFFICER CAME TO THE CONCLUSION THAT THE PROJECT UNDERTAKEN BY THE ASSESSEE WAS NOT A HOUSING PROJECT AND HENCE, THE ASSESSEE I S NOT ENTITLED FOR DEDUCTION U/S.80IB(10) OF THE ACT. THE ASSESSING O FFICER, THEREFORE, DENIED THE DEDUCTION TO THE ASSESSEE U/S.80IB(10) A ND THE ACTION OF THE ASSESSING OFFICER WAS CONFIRMED BY THE LD. CIT( A). 3. WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF T HE ASSESSEE BY THE DECISION OF THE ITAT PUNE BENCH IN A.YS. 2005-0 6 AND 2007-08 BEING ITA.NO.765/PN/2010 AND ITA.NO.146/PN/2011 ORD ER DATED 14.09.2012. THERE IS NO DIFFERENCE IN THE FACTS IN THIS YEAR. THE OPERATIVE PART OF THE REASONING AND FINDING OF THE TRIBUNAL IS AS UNDER: 3 9. IN THIS CASE AS PER THE DOCUMENTS ON RECORD. WE FIND THAT THE ASSESSEES PROJECT IS SANCTIONED AS A TOURISM DEVELOPMENT CENTRE (TDC). WE FURTHER FIND THAT IN RESPECT OF THE AREA OF THE LAND AS WELL AS THE AREA OF THE UNITS THERE IS NO R ESERVATION OF THE AUTHORITIES BELOW THAT THE SAME ARE IN CONFORMI TY WITH THE PROVISIONS OF SECTION 80IB(10). THE ONLY OBJECTION OF THE AUTHORITIES BELOW IS THAT THE PROJECT OF THE ASSESS EE IS SANCTIONED AS TOURISM DEVELOPMENT CENTRE. THE LEAR NED CIT(A) HAS RELIED ON THE DECISION OF THE ITAT SPECIAL BENC H, PUNE IN THE CASE OF BRAHMA ASSOCIATES AND OTHERS 122 TTJ 443 ( PUNE) (SB) WHICH HAS BEEN SUBSEQUENTLY AFFIRMED BY THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. BRAHMA ASSOC IATES 333 ITR 289. IN THE SAID CASE THE CONTROVERSY AROSE FO R ALLOWING THE DEDUCTION U/S.80IB(10) AS IN SAID PROJECT THERE WE RE COMMERCIAL UNITS/CONVENIENCE SHOPPING. IN THE VIEW OF THE REVENUE AUTHORITIES, THE SAID PROJECT UNDERTAKEN BY THE APPELLANT COULD NOT BE TREATED AS THE HOUSING PROJE CT. IN OUR HUMBLE OPINION, THE INTERPRETATION GIVEN IN SAID C ASE FOR TREATING A PARTICULAR PROJECT WHETHER IT IS A HOUSI NG PROJECT OR NOT IS TO BE SEEN IN THE CONTEXT OF CONTROVERSY OR ISSU E BEFORE THE HONBLE HIGH COURT. ADMITTEDLY ON THE FACTS OF THA T CASE A RESERVATION OF THE REVENUE AUTHORITIES WAS THERE BE CAUSE IN THEIR VIEW THE HOUSING PROJECT SHOULD BE EXCLUSIVELY FOR THE PURPOSE OF RESIDENCE AND IT SHOULD NOT BE FOR ANY COMMERCIAL E XPLOITATION AND EVEN IF SOME AREA COMPRISE OF THE COMMERCIAL UN ITS THEN THAT WILL NOT BE WITHIN THE EXPRESSION HOUSING PROJ ECT. IN THAT CONTEXT WHILE APPROVING THE ORDER OF THE SPECIAL BE NCH, PUNE IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) THEIR LORDSHI PS OBSERVED THAT ONCE THE LOCAL AUTHORITY HAD APPROVED THE SAID PROJECT AS A HOUSING PROJECT THEN THERE IS NO REASON TO TAKE A DIFFERENT VIEW, EVEN IF PART OF PROJECT COMPRISED OF CONVENIE NCE SHOPPING. IN FACT SUBSEQUENT AMENDMENT INTRODUCED W.E.F. A.Y. 2005-06 SUGGEST THAT IT SHOULD BE PREDOMINANTLY FOR RESIDEN TIAL PURPOSE AND NOT FOR COMMERCIAL PURPOSE. 10. IN THE CASE BEFORE US IT IS NOT DENIED BY THE R EVENUE THAT THE LAND ON WHICH THE PROJECT IS UNDERTAKEN IS NOTI FIED AS A GREEN ZONE FOR PROTECTING THE NATURES, FLORA AND F AUNA. IT IS ALSO NOT DENIED BY THE REVENUE AUTHORITIES THAT THE PROJECT IN WHICH THE UNITS/COTTAGES ARE CONSTRUCTED BY THE ASS ESSEE ARE USED ONLY FOR THE RESIDENTIAL PURPOSE OF THE BUYERS OR THEIR FAMILIES, IN OTHER WORDS FOR HUMAN HABITATION. WE D O NOT AGREE WITH THE INTERPRETATION GIVEN BY THE ASSESSING OFFI CER THAT THE UNIT OR COTTAGE/HOUSE SHOULD BE FOR THE PERMANENT RESIDENCE THEN ONLY IT CAN BE TREATED AS A HOUSING PROJECT. IN FACT AS PER THE STATEMENT MADE AT BAR BY THE LD. SENIOR COUNSEL , MANY OF THE BUYERS ARE PERMANENTLY RESIDING THEIR AND NOT A SINGLE COTTAGE OR HOUSE IS EXPLOITED FOR ANY COMMERCIAL PU RPOSE. IN OUR OPINION, FOR DETERMINING WHETHER THE PROJECT UNDERT AKEN BY THE ASSESSEE IS COVERED WITHIN THE EXPRESSION HOUSING P ROJECT, IT IS TO BE SEEN THAT IN FACT THE HOUSES OR COTTAGES DEVE LOPED & 4 CONSTRUCTED AND SOLD BY THE ASSESSEE ARE ONLY USED AND EXPLOITED FOR THE PURE RESIDENCE AND NOT FOR ANY CO MMERCIAL PURPOSES. IN SUM AND SUBSTANCE, WHERE THE END USE OF THE COTTAGE IS PREDOMINANTLY FOR THE PERSONAL RESIDENCE OR NOT IS TO BE SEEN. ADMITTEDLY, NOWHERE IT IS THE CASE OF AUTH ORITIES BELOW THAT OTHER THAN SELF RESIDENTIAL USE, ANY COTTAGE O R HOUSE IS EXPLOITED FOR ANY COMMERCIAL PURPOSES. WE, THEREFO RE, HOLD THAT THE PROJECT UNDERTAKEN BY THE ASSESSEE IN VILLAGE A GLAMBE, TALUKA HAVELI, DISTRICT PUNE IS A HOUSING PROJECT W ITHIN THE MEANING OF SECTION 80IB(10) OF THE ACT AND HENCE, T HE ASSESSEE IS ENTITLED FOR THE DEDUCTION IN THE SAID PROVISION . WE ACCORDINGLY ALLOW THE GROUNDS TAKEN BY THE ASSESSEE IN ASST. YEAR 2007-08 AND DIRECT THE ASSESSING OFFICER TO AL LOW THE DEDUCTION. 4. WE, THEREFORE, FOLLOWING THE DECISION OF THE TRI BUNAL IN ASSESSEES OWN CASE DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION TO THE ASSESSEE U/S.80IB(10) AND GROUNDS TAKEN BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF DECEMBER, 2012. SD/- SD/- ( R.K.PANDA ) ( R.S.PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 28 TH DECEMBER, 2012. COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ITO, WARD-3(1), PUNE. 3. THE CIT(A)-II, PUNE. 4. THE CIT-II, PUNE. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.