ITO WD 29(2)(5), MUMBAI V. PADMAVATI ENTERPRISES, MUMBAI

ITA 1709/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8950 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Department
• Bench Allotted: H
• Next Hearing Date: 05-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 24-03-2015
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHAN
• Assessee Lawyers: SUBODH RATNAPARKHI
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMARJIT SIGH, JUDICIAL MEMBER ITA NO.1709/M/2015 (AY 2011 - 2012) ITA NO. 7747 /M/2014 (AY 2010 - 2011) INCOME TAX OFFICER - 29(2)(5), MUMBAI. / VS. M/S. PADMAVATI ENTERPRISES, SHOP NO.1 & 2, VITRAG DARSHAN, D.S. GAIKWAD ROAD, OLD MULUND, MULUND (W), MUMBAI 400 080. ./ PAN : AAIFP0655Q ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI M.C. OMI NINGSHAN, DR / RESPONDENT BY : SHRI SUBODH RATNAPARKHI / DATE O F HEARING : 11.01.2017 / DATE OF PRONOUNCEMENT : 11 .01.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. BOTH THESE APPEALS ARE FILED BY THE REVENUE FOR THE AYS 2010 - 11 AND 2011 - 12. SINCE, THE ISSUES RAISED IN THESE APPEALS ARE INTER - CONNECTED / IDENTICAL, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAS OF THIS ORDER. 2. FIRSTLY, WE SHALL TAKE UP APPEAL ITA NO. 7747/M/2014 (AY 2010 - 11). THIS APPEAL FILED BY THE REVENUE ON 30.12.2014 IS AGAINST THE ORDER OF THE CIT (A) - 1, THANE DATED 22.09.2014 FOR THE ASSESSMENT YEAR 2010 - 2011. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DELETING THE ADDITION MADE BY THE AO WHEREIN HE HAS DENIED THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10)(A)(III), WITHOUT APPRECIATING THE FACTS BROUGHT OUT BY THE AO IN THE ASSESSMENT ORDER THAT THE PROJECT WAS ORIGINALLY APPROVED ON 15.02.2005. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS FAILED TO CONSIDER THE FACT THAT SOME FLATS HAD BEEN ALLOTTED TO EITHER THE 2 SAME PERSON OR THE MEMBER OF THE SAME FAMILY AND FLAT NOS. 1507 AND 1508 IN B - W ING ARE A SINGLE UNIT AND ITS BUILT UP AREA IS 1227.96 SQ FT. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A BUILDER AND DEVELOPER AND FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 76,984/ - FOR THE AY 2010 - 11. AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT DETERMINING THE ASSESSED INCOME AT RS. 9.44 CRS. IN THE ASSESSMENT, AO DISALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT HOLDING THAT THE HOUSING PROJECT WAS NOT COMPLETED WITHIN THE TIME PERMITTED UN DER THE STATUTE AND ALSO FOR VIOLATION OF THE BUILT UP AREA OF THE FLAT IN THE SAID HOUSING PROJECT. EXPLAINING THE BRIEF FACTS, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE CONSIDERED 15.6.2006 AS THE DATE OF APPROVAL OF THE HOUSING PROJECT WI THIN THE MEANING OF THE PROVISO TO SUB - SECTION (10) OF SECTION 80IB OF THE ACT. THIS WAS THE DATE APPROVED BY THE MUNICIPAL CORPORATION AUTHORITIES APPROVING THE ASSESSEES HOUSING PROJECT. HOWEVER, ASSESSING OFFICER CONSIDERED 15.7.2005 AS THE DATE OF AP PROVAL IGNORING THE FACT THAT THE SAID DATE IS ACTUALLY THE DATE OF INTIMATION OF DISAPPROVAL (IOD) OF THE PROJECT IN THE HANDS OF SHIR H.B. SINGH AND OTHERS. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE BROUGHT TO PAGE OF THE PAPER BOOK, WHICH IS THE LE TTER OF APPROVAL / COMMENCEMENT CERTIFICATE. 4. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE SAID PAGES OF THE PAPER BOOK, WE FIND, THE DOCUMENTS RELIED UPON BY THE AO ARE NOT THE APPROVALS AS THEY ARE LETTER OF IOD U/S 346 OF THE MUNICIPAL CORP ORATION ACT. CONSIDERING THE FACTUAL MATRIX OF THE CASE, CIT (A), FOR THE DETAILS DISCUSSION GIVEN IN HIS ORDER, ALLOWED THE APPEAL OF THE ASSESSEE ON THIS ISSUE. WE FIND, THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE ON THIS ISSUE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THIS GROUND RAISED BY THE REVENUE IN BOTH THE APPEALS IS DISMISSED. 5. THE 2 ND GROUND OF THE REVENUE IN BOTH THE APPEALS RELATES TO THE BUILT UP AREA OF FLAT NOS. 1507 AND 1508 IN B - WING. IN THE ASSESSMENT, ASSESSING O FFICER HELD THAT THESE FLATS ARE OWNED BY THE SAME FAMILY MEMBERS AND THEY ARE JOINED A SINGLE FLAT THEREBY BUILT UP AREA OF THE JOINED FLAT EXCEEDED THE PERMITTED BUILT UP AREA UNDER THE STATUTE. IN THIS REGARD, AO DISMISSED THE ASSESSEES ARGUMENT THAT THE SAID FLATS WERE INDEPENDENT, NOT JOINED AT THE TIME OF SALE OF THE TWO FLATS TO THE TWO MEMBERS OF THE SAME FAMILY. THIS JOINING OR MERGER OF FLATS, IF ANY, WAS DONE AFTER 3 THEY WERE SOLD UNDER THE INITIATION OF THE FAMILY MEMBERS. THEREFORE, THE DECIS ION OF THE AO IS UNSUSTAINABLE. WE FIND, CIT (A) APPRECIATED THE ARGUMENTS OF THE LD COUNSEL FOR THE ASSESSEE AND ALLOWED THIS GROUND IN FAVOUR OF THE ASSESSEE. BEFORE US ALSO, THE REVENUE HAS NOT BROUGHT ANY INFORMATION OR CLINCHING EVIDENCE TO PROVE TH AT THE SAID FLATS WERE CONSTRUCTED JOINTLY BY THE DEVELOPER AND THE MERGER OF THE FLATS, IF ANY, IS NOT DONE BY THE INDIVIDUAL OWNERS OF THE FLATS AND POST SALES PERIOD. CONSIDERING THE SAME, WE FIND, THE FINDING OF THE CIT (A) ON THIS ISSUE IS ALSO REAS ONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. THEREFORE, THE GROUND NO.2 , WHICH IS IDENTICAL IN BOTH THE APPEALS, RAISED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, BOTH THE APPEALS FILED THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN CO URT ON 1 1 T H JANUARY, 2017. S D / - S D / - ( AMARJIT SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 11.01.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI