Income tax Officer, Ward 7(1), Pune V. M/s. Skyline Developers, Pune

ITA 1695/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1119 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 07-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 148; 143(3); 143(1)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1695/PUN/2017 / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, WARD-7(1), PUNE. . / APPELLANT. V/S M/S. SKYLINE DEVELOPERS, D-436, CLOVER CENTER, D-436, 7, MOLEDINA ROAD, PUNE 411 001. PAN : AASFS6230J. . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE. REVENUE BY : SHRI SHASHANK DEOGADKAR. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) PUNE-5, PUNE DATED 28.04 .2017 FOR THE ASSESSMENT YEAR 2010-11. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINES S OF REAL ESTATE DEVELOPMENT. ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME FOR A.Y. 2010-11 ON 15.10.2010 DECLARING TOTAL INCOME AT RS. N IL AFTER CLAIMING DEDUCTION OF RS.24,16,16,000/- U/S 80IB(10) OF THE ACT. SU BSEQUENTLY, THE / DATE OF HEARING : 05.08.2019 / DATE OF PRONOUNCEMENT: 12.09.2019 2 ASSESSEE REVISED RETURN OF INCOME ON 29.03.2012 AFTER MOD IFYING THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT AT RS.49,47,079/-. TH E RETURN WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, THE CASE WAS RE- OPENED BY ISSUING NOTICE U/S 148 OF THE ACT. SUBSEQUEN TLY, ASSESSMENT WAS FRAMED U/S 143(3) R.W.S 147 OF THE ACT VIDE ORDER DT. 21.03.2014 AND THE TOTAL INCOME WAS DETERMINED AT RS.1,64,47,607/- INTER- ALIA BY DENYING THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.28.04.2017 (IN APPEAL NO.PN/CIT(A)-5/ITO.WD-4(5), PUNE/382/ 2014-15) GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE AS SESSEE WAS ELIGIBLE FOR CLAIMING DEDUCTION U/ S . 80IB(10) OF THE ACT WITHOUT APPRECIATING THAT DEDUCTION U/S.80IB(10) WAS AVAILABLE TO AN UNDERTAKING ENGAGED IN DEVELOPING AND BUILDING HOUSI NG PROJECT AND THE ASSESSEE HAD ONLY PROVIDED THE LAND TO THE JOINT VENTURE FORMED I.E. BRAHMA SKYLINE JV. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT APPRECIATING TH AT THE ASSESSEE HAD CARRIED OUT ITS OBLIGATION AS BUILDER A ND DEVELOPER IN DEVELOPMENT OF 2,40 , 000 SQ.FT. ONLY AND DID NOT PLAY ANY ROLE AS BUILDER AND DEVELOPER IN RESPECT OF CONSTRUCTION OF HOUSING PROJECT ON 4,63,103 SQ.FT . OF LAND ON WHICH DEDUCTION IX] S.80IB(10) WAS CLAIMED AND NOT ALLOWED . 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT APPRECIATING TH AT THE CLAIM OF DEDUCTION U/S.80IB(10) COULD ONLY BE CONSIDERED IN THE HANDS OF AOP AND AS NO RETURN OF INCOME HAD BEEN FILED . BY THE AOP, THE SAME COULD NOT BE CONSIDERED AND THE REVENUE SHARIN G ARRANGEMENTS AT 32:68 WAS INTENDED TO COMPENSATE TH E TWO MEMBERS OF JV FOR THEIR RESPECTIVE CONTRIBUTION AND EXPENSES INCURRED. 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 4. AO NOTICED THAT ASSESSEE HAS CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT ON THE INCOME FROM BRAMHA-SKYLINE JOINT VENTURE (JV). AO NOT ED THAT ASSESSEE IS A MEMBER OF BRAMHA-SKYLINE WHICH IS A JV BETW EEN BRAMHA 3 BUILDERS AND SKYLINE DEVELOPERS. HE NOTED THAT THE PROJ ECT WAS FIRST COMMENCED FROM 03.03.2007 AND COMPLETED ON 04.11.2009. HE ALSO NOTED THAT M/S. SKYLINE DEVELOPERS HAD INTRODUCED LAND ADMEASU RING 38200 SQ.MTRS AND M/.S BRAHMA BUILDERS HAD AGREED TO CONSTRU CT ON THE LAND. ACCORDINGLY BRAHMA SKYLINE JV WAS FORMED FOR DEVELOPING THE SKYLINE HOUSING PROJECT. AO NOTED THAT THE MEMBERS OF THE JV HAD DECIDED TO SHARE THE GROSS SALE PROCEEDS RECEIVED FROM THE SALE O F THE UNITS AND FROM ALL SALEABLE AREAS INCLUDING PARKING, TERRACE, ETC., IN THE RATIO OF 32:68. THE AO ALSO NOTED THAT THE JV HAD NOT FILED ANY RETURN SINCE ITS FORMATION AND ACCORDING TO HIM IT WAS THE JV WHICH COULD HAVE CLAIME D THE DEDUCTION U/S 80IB(10) OF THE ACT. HE NOTED THAT SINCE A SSESSEE HAD MERELY INTRODUCED LAND AND HAD NOT PERFORMED THE ROLE O F BUILDER AND DEVELOPER OF A HOUSING PROJECT, IT WAS NOT ENTITLED TO CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT. HE ACCORDINGLY DENIED THE CLAIM OF DEDUCTION. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO NOTED THAT IN ASSESSEES OWN CASE, HER PREDECESSO R HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN A.Y. 2009-10. SHE ACCOR DINGLY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER : 4.3 I HAVE PERUSED CAREFULLY TOE MATERIAL ON RECO RD AND TOE CONTENTION OF TOE APPELLANT I FIND THAT, ON THE SAME ISSUE REGARDING THE CLAIM OF DEDUCTION U/ S 80IB(10) AND FOR THE SAME PROJECT, TOE CIT(A) IN TH E APPELLANTS OWN CASE FOR AY 2009-10 HAS DECIDED IN FAVOUR OF THE APPELLANT B Y HOLDING AT PARA 3.5 AS UNDER:- THE ASSESSING OFFICER HAS REJECTED THE CLAIM OF DE DUCTION U/ S 80IB(10) ON THE PLEA THAT THE APPELLANT MERELY INTR ODUCED THE LAND IN THE JV AND DID NOT PERFORM THE ROLE OF BUILDER AND DEVELOPER WHICH IS PRIMA FACIE NOT CORRECT AS THE APPELLANT DID CONSTR UCT THE FLATS FOR THE MEMBERS OF THE SOCIETY IN TERMS OF THE DEVELOPMENT AGREEMENT AND, THEREAFTER, AFTER GETTING THE RIGHTS TO DEVELOP THE BALANCE PORTION OF THE LAND ENTERED INTO A JV WITH M/S. BRAMHA BUILDE RS. THE FACT 'THUS BROUGHT ON RECORD CLEARLY INDICATES THE APPELLANT T O HAVE ACTED AS A DEVELOPER AND BUILDER AND NOT MERELY INTRODUCED THE LAND. IT IS RELEVANT TO POINT OUT THAT THE DEVELOPMENT OF THE P ROJECT WAS CARRIED OUT BY THE APPELLANT FIRM FIRSTLY ON ITS OWN WITH R ESPECT TO THE PORTION OF THE PROPERTY TO BE CONSTRUCTED AND HANDED OVER T O THE SOCIETY AND; SECONDLY IN JV WITH M/S. BRAMHA BUILDERS WITH RESPE CT TO THE PORTION OF THE PROPERTY WHICH WAS TO BE SOLD TO OUTSIDERS A ND THE APPELLANT 4 IN THE JV WORKED WITH EQUAL RISK. FURTHER, THE APPE LLANT ALSO SATISFIED ALL OTHER CONDITIONS AS STIPULATED UNDER THE PROVISIONS OF SECTION 80IB(10) AND THEREFORE, IT IS VERY MUCH ELI GIBLE TO CLAIM DEDUCTION UNDER THE SAID SECTION. HOWEVER, IT IS VE RY MUCH ELIGIBLE TO CLAIM DEDUCTION UNDER THE SAID SECTION. HOWEVER, TH E SAID CLAIM HAS TO BE RESTRICTED TO RS. 1,05,72,657/- WHICH IS THE NET PROFIT ARRIVED AS PER THE AUDITED ACCOUNT STATEMENT THAT CLEARLY INDI CATES THE TOTAL GROSS INCOME AT RS. 9,67,83,200/- AND THE EXPENDITU RE OF RS. 8,62,10,542/-. THUS, IN VIEW OF THE EXISTING FACT A ND CIRCUMSTANCES OF THE CASE AND THE REASONING OF THE JUDICIAL AUTHO RITIES ON THE SUBJECT IN MY CONSIDERED OPINION, THE APPELLANT IS ENTITLED TO CLAIM THE DEDUCTION U/S 80IB(10) OF THE ACT.' FOLLOWING JUDICIAL DISCIPLINE, IN VIEW OF THE ABOVE ORDER IT IS HELD THAT THE APPELLANT IS ENTITLED TO CLAIM DEDUCTION U/S 80 IB(10) OF THE I. T. ACT, 1961. THE AO IS DIRECTED TO ALLOW THE CLAIM AC CORDINGLY. THEREFORE, THIS GROUND OF APPEAL IS ALLOWED. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW BEFORE US. 5. BEFORE US, LD. D.R. SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6. LD.A.R. ON THE OTHER HAND, REITERATED THE SUBMISSIONS M ADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT AGAINST THE O RDER OF LD.CIT(A) FOR A.Y. 2009-10, REVENUE HAD PREFERRED APPEAL BEFORE THE T RIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 10.01.2018 IN ITA NO.1503/PUN/ 2014 HAD DISMISSED THE APPEAL OF THE REVENUE. HE ALSO PLACED ON RE CORD THE COPY OF THE AFORESAID DECISION. HE THEREFORE SUBMITTED THAT IN VIE W OF THE AFORESAID FACTS, NO INTERFERENCE TO THE ORDER OF LD.CIT(A) IS CALLED FOR. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPEC T TO THE DENIAL OF CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. WE FIND THAT LD.C IT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HAD RELIED ON HER PREDECESSORS ORDER IN ASSESSEES OWN CASE FOR A.Y. 2009-10. WE FURT HER FIND THAT AGAINST THE ORDER OF LD.CIT(A) FOR A.Y. 2009-10, REVENUE H AD PREFERRED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL IN ITA NO.1503 /PUN/2014 VIDE ORDER DATED 10.01.2018 HAD DISMISSED THE APPEAL OF TH E REVENUE 5 MEANING THEREBY THAT THE ORDER OF LD.CIT(A) FOR A.Y. 2009-1 0 HAS ATTAINED FINALITY. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON TO DEMONSTRATE THAT THE ORDER OF ITAT FOR A.Y. 2009-10 HAS BEEN SET A SIDE BY HIGHER JUDICIAL FORUM. FURTHER, REVENUE HAS ALSO NOT POINTED OUT ANY FALLACY IN THE FINDINGS OF LD.CIT(A). IN SUCH CIRCUMSTANCES, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). THUS, THE GROUNDS OF THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 12 TH DAY OF SEPTEMBER, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 12 TH SEPTEMBER, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-5, PUNE. PR. CIT-4, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.