Income-tax Officer, V. Shri B.U. Bhandari Nandgude Patil Associates, Pune

ITA 1737/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0733 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 17-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR CHAWARE
• Assessee Lawyers: V L JAIN
• Keywords: Valuation report
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1736 & 1737/PN/2014 '% % / ASSESSMENT YEARS : 2010-11 & 2011-12 ITO, WARD - 3(2 ), PUNE . / APPELLANT V/S SHRI B.U. BHANDARI NANDGUDE PATIL ASSOCIATES, 1182/1/3, F.C. ROAD, SHIVAJI NAGAR, PUNE 411 005 PAN : AAGFB8429C . /RESPONDENT / APPELLANT BY : SHRI ANIL KUMAR CHAWARE / RESPONDENT BY : SHRI V.L. JAIN / ORDER PER R.K.PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE REVENUE ARE DIRECTED A GAINST THE COMMON ORDER DATED 15-05-2014 OF THE CIT(A)-II, P UNE RELATING TO ASSESSMENT YEARS 2010-11 & 2011-12 RESPECTIVELY. SINC E IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN BOTH THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF B Y THIS COMMON ORDER. ITA NO.1737/PN/2014 (A.Y. 2010-11) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS, PROMOT ERS AND / DATE OF HEARING :03.10.2016 / DATE OF PRONOUNCEMENT: 05.10.2016 2 ITA NOS.1736 & 1737/PN/2014 DEVELOPERS. IT FILED ITS RETURN OF INCOME ON 07-08-2010 D ECLARING TOTAL INCOME OF NIL. DURING THE COURSE OF ASSESSMENT PROCE EDINGS THE AO OBSERVED THAT ASSESSEE HAS UNDERTAKEN DEVELOP MENT OF LAND SITUATED AT SURVEY NO.167 AND 168, WAKAD, PUNE. THE ASS ESSEE HAS UNDERTAKEN A HOUSING PROJECT NAMED AS EDENN AT PU NE AND HAS CLAIMED DEDUCTION U/S.80IB(10) OF THE ACT TO THE TUNE OF RS.75,94,282/-. THE AO ASKED THE ASSESSEE TO FURNISH DETA ILS IN RESPECT OF THE PROJECT AND TO JUSTIFY THE CLAIM OF DED UCTION U/S.80IB(10) OF THE ACT ALONG WITH DOCUMENTARY EVIDENCE. 3. FROM THE DETAILS FURNISHED BY THE ASSESSEE THE AO NO TED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 200 6-07 A VALUATION REPORT WAS OBTAINED FROM THE REGISTERED VALUER WHO HAD UNDERTAKEN THE MEASUREMENT OF CERTAIN FLATS. IT WAS NOT ED FROM THE REPORT OF THE VALUER THAT AFTER INSPECTION OF FLATS IN BUILDING NO.C FLAT NOS. 102 AND 103 THE AREA OF THE FLAT EXCEEDED THE SPEC IFIED LIMIT. ACCORDINGLY, THE AO HAD HELD THAT THERE IS CLEAR VIOLATION OF SUB- CLAUSE (C) OF SECTION 80IB(10) AND ACCORDINGLY IT WAS HELD TH AT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S.80IB(10). THE APP EAL FILED BY THE ASSESSEE WAS ALSO DISMISSED BY THE CIT(A) AND THE APPEAL FILED BY THE ASSESSEE BEFORE THE TRIBUNAL IS AWAITED. FOLLOWING THE SAME REASONINGS DEDUCTION U/S.80IB(10) OF THE ACT WAS DENIED TO THE ASSESSEE FOR A.YRS. 2007-08 AND 2008-09 WHICH HAS BEEN UPHELD BY THE CIT(A). THE AO, THEREFORE, FOLLOWING HIS ORDER FOR A.YRS. 20 06-07, 2007-08, 2008-09 AND 2009-10 DISALLOWED THE CLAIM OF DEDUC TION U/S.80IB(10) OF THE ACT AND DETERMINED THE TOTAL INCOME AT RS.75,94,282/- 3 ITA NOS.1736 & 1737/PN/2014 4. IN APPEAL THE LD.CIT(A) FOLLOWING THE DECISION OF THE TRIBU NAL IN ASSESSEES OWN CASE FOR A.Y. 2009-10 ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. THE RELEVANT OBSERVATION OF THE C IT(A) FROM PARA 3.4 ONWARDS READ AS UNDER : 3.4 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPEL LANT AND PERUSED MATERIAL ON RECORD. THE APPELLANTS CASE FOR THE ASSESSMENT YEARS UNDER CONSIDERATION IS FOUND TO BE SQUARELY COVE RED BY THE DECISION OF THE ITAT, PUNE GIVEN IN APPELLANTS OWN C ASE FOR A.Y. 2009-10 WHEREIN IT HAS BEEN HELD THAT : 3. WE HAVE HEARD THE PARTIES. THE LEARNED COUNSEL SUBM ITS THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR A.YRS. 2006-07, 2007- 08 AND 2008-09. THE LD. CIT (DR) WAS FAIR ENOUGH TO SUBMIT THAT THE ISSUE ARISING IN THIS APPEAL STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN THE PRECEDIN G YEARS. THE LEARNED COUNSEL HAS FILED THE COPIES OF THE ORDERS OF THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE PRECEDING YEARS WH ICH ARE PLACED ON RECORD. IN THE A.YS. 2005-06, 2006-07 AND 2007-08 BEING ITA NOS. 1438 & 1439/PN/2009 AND ITA NO. 432/P N/2011 ORDER DATED 31-10-2012 THE IDENTICAL ISSUE HAS BEEN CO NSIDERED BY THE TRIBUNAL AND HAS HELD AS UNDER: '11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S. IN THIS CONNECTION, THE FIRST AND FOREMOST ISSUE IS WITH REGARD TO THE MEANING OF THE EXPRESSION 'BUILT-UP AREA' FOR THE PUR POSE OF CLAUSE (C) TO SEC. 80 IB(10) OF THE ACT. SEC. 80IB ( 14) (A) WAS INSERTED BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 1-4- 2005 PRESCRIBING THE DEFINITION OF THE EXPRESSION 'BUILT-UP AREA'. IN TERMS OF THE SAID DEFINITION, THE 'BUILT-UP AREA' INT ER-ALIA, INCLUDES THE AREA OF PROJECTIONS AND BALCONIES. THE MOOT POIN T IS AS TO WHETHER THE SAID DEFINITION IS APPLICABLE IN RESPECT O F THE PROJECT IN QUESTION BEFORE US. ADMITTEDLY, IT IS EMERGING FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THE PROJECT OF THE ASSESS EE WAS APPROVED BY THE LOCAL AUTHORITY IN MAY 2004 AND IT ALSO COMMENCED PRIOR TO THE 1-4-2005. THEREFORE, REVENU E AUTHORITIES ARE NOT JUSTIFIED IN INCLUDING THE BALCON IES/OPEN TERRACES IN THE CALCULATION OF 'BUILT UP AREA' AND T HE DEFINITION OF 'BUILT UP AREA' IN TERMS OF SEC. 80IB(14)(A) OF THE ACT CANNOT BE APPLIED TO PROJECTS COMMENCED PRIOR TO 1-4-2005. THE AFORESAID PROPOSITION IS IN LINE WITH THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HAWARE CONSTRUCTIONS (SUP RA) AS ALSO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN TH E CASE OF PRIME PROPERTIES (SUPRA). SINCE THE DEFINITION OF 'B UILT-UP AREA' CONTAINED IN SEC. 80IB(14)(A) OF THE ACT IS NOT APPL ICABLE IN PRESENT CASE, BEING A PROJECT HAVING COMMENCED PRIOR TO 1-4- 2005, IN OUR CONSIDERED OPINION FOR SUCH LIKE SITUATIO N, IT WOULD BE IN FITNESS OF THE THINGS THAT THE EXPRESSION 'BUILT-U P AREA' IS UNDERSTOOD AS PER THE DEVELOPMENT CONTROL RULES OF THE LOCAL AUTHORITY, WHICH HAS APPROVED SUCH A PROJECT.' 4 ITA NOS.1736 & 1737/PN/2014 THE ABOVE DECISION HAS BEEN FOLLOWED SUBSEQUENTLY IN TH E A.Y. 2008-09 IN ITA NO. 99/PN/2012 ORDER DATED 24-06-201 3. WE, THEREFORE, FOLLOWING THE DECISIONS OF THIS TRIBUNAL I N THE ASSESSEE'S OWN CASE IN THE A.YRS. 2005-06, 2006-07, 2007-0 8 AND 2008-09, THE GROUNDS TAKEN BY THE ASSESSEE ARE ALLOWED AND DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/S. 80IB(10). 3.5 IN VIEW OF THE ABOVE FACTS AND THE DECISION OF HO NBLE PUNE ITAT IN THIS REGARD, THE ADDITION MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF WITHDRAWAL U/S.80IB(10) DEDUCTION CLAIM IS DIRECTED T O BE DELETED. ACCORDINGLY, GROUND NO.1 FOR A.Y. 2010-11 & GROUND OF APPEAL NO.3 FOR A.Y. 2011-12 ARE ALLOWED. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE ORDER OF THE LD.CIT(A) IS CONTRARY TO LAW AN D TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD.CIT(A) ERRED IN ALLOWING THE CLAIM OF DED UCTION U/S.80IB(10) MADE BY THE ASSESSEE ALTHOUGH THERE IS CLEAR VIOLATION OF SUB CLAUSE (C) OF SECTION 80IB(10) OF THE ACT AS BUILT UP AREA OF TWO UNITS OF THE PROJECT EXCEEDED THE LIMIT OF 1500 SQ.FT. 3. THE LD.CIT(A) ERRED IN HOLDING THAT THE AMENDED PROVISIONS U/S.80IB(14)(A) WOULD NOT BE APPLICABLE TO A.Y. 2005 -06 & SUBSEQUENT YEARS IF THE PROJECTS COMMENCED PRIOR TO 01-04-2005 W ITHOUT APPRECIATING AND APPLYING THE PRINCIPLE LAID DOWN B Y HONBLE SUPREME COURT IN THE CASE OF CIT VS. ISTHMIAN STEAMSHIP LINE (2 0 ITR 52). KARIMTHARUVI TEA ESTATE LTD. (60 ITR 262) AND RELIAN CE JUTE INDUSTRIES VS. CIT REPORTED IN (120 ITR 921). 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 6. AFTER HEARING BOTH THE SIDES, WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE CIT(A) WHO HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT BY FOLLOWING THE DECISION OF THE TRIBU NAL IN ASSESSEES OWN CASE FROM A.YRS.2005-06 TO 2009-10. TH E LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANY CONTRAR Y MATERIAL SO AS TO TAKE A DIFFERENT VIEW THAN THE VIEW TAKEN BY TH E LD.CIT(A). ACCORDINGLY, THE ORDER OF THE LD.CIT(A) IS UPHELD AND THE G ROUNDS RAISED BY THE REVENUE ARE DISMISSED. 5 ITA NOS.1736 & 1737/PN/2014 7. IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN ITA NO.1737/PN/2014. FOLLOWING THE REASONING GIVEN ABOVE THE GROUNDS RAISED BY THE REVENUE FOR A.Y. 2011-12 ARE ALSO DISMISSED. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05-10-2016. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ' DATED : 05 TH OCTOBER, 2016. ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. THE CIT(A) - I I , PUNE THE CIT- II, PUNE 5. $ ''( , ( , / DR, ITAT, A PUNE; 5 . + / GUARD FILE. / BY ORDER, // $ ' //TRUE COPY // -. ' ( / SR. PRIVATE SECRETARY ( , / ITAT, PUNE