R.V. Nirmaan Private Limited, Hyderabad V. Dy. Commissioner of Income Tax, Circle-3(1), Hyderabad

ITA 1749/Hyd/2017

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9260 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 04-11-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 23-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN
• Keywords: Set aside
• Section: 115JB; 143(1); 13; 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO.1749/HYD/2017 ASSESSMENT YEAR:2012 - 13 M/S. R.V. NIRMAAN PRIVATE LIMITED, HYDERABAD. PAN: AABCR 0774 L VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 3(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI A. SRINIVAS REVENUE BY: SRI K. RAVI KIRAN, DR DATE OF HEARING: 04/11/2020 DATE OF PRONOUNCEMENT: 26 /11/2020 ORDER PER A. MOHAN ALANKAMONY, A.M: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX - 3, HYDERABAD IN APPEAL F.NO.10/PR.CIT - 3/263/16 - 17, DATED 17/02/2017 PASSED U/S. 263 OF THE ACT FOR THE A.Y. 2012 - 13. 2. THE ASSESSEE HAS RAISED FIVE GROUNDS IN ITS APPEAL AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: 2 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX IS CONTRARY TO THE LAW, FACTS AND THE CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX ERRED IN COMING TO A CONCLUSION THAT THE ASSESSMENT FOR THE A.Y. 2012 - 13 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE INSOFAR AS IT RELATED TO C LAIM OF DEDUCTION U/S. 80IB(10). 3. THE COMMISSIONER OF INCOME TAX OUGHT TO HAVE SEEN THAT THIS IS NOT THE 1 ST YEAR IN WHICH THE CLAIM FOR DEDUCTION U/S. 80IB(10) WAS CLAIMED AND THE CLAIM WAS ALLOWED IN EARLIER YEARS ALSO. 4. THE COMMISSIONER OF INCOME TA X OUGHT NOT TO HAVE SET ASIDE THE ORDER OF THE A.O. TO EXAMINE THE ISSUE OF CLAIM OF DEDUCTION U/S. 80IB(10). 5. ANY OTHER GROUNDS WHICH THE APPELLANT MAY URGE EITHER BEFORE OR AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION OF FLATS AND DEVELOPMENT OF PROPERTY FILED ITS RETURN OF INCOME FOR THE AY 2012 - 13 20/09/2012 DECLARING TOTAL INCOME OF RS. 1,26,26,320/ - AFTER CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT S FOR RS. 7,22,28,561/ - UNDER THE NORMAL PROVISIONS AND U/S. 115JB OF THE ACT RS. 8,65,30,697/ - . INITIALLY THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT AND SUBSEQUENTLY THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS COMPLETED ON 20/01/2015 WHERE IN THE LD. AO GRANTED THE DEDUCTION CLAIMED U/S. 80IB(10) OF THE ACT, HOWEVER HE MADE CERTAIN OTHER ADDITIONS. THEREAFTER, THE LD. CIT, AFTER EXAMINING THE CASE OF THE ASSESSEE ARRIVED AT THE CONCLUSION THAT THE LD. AO HAD GRANTED DEDUCTION U/S. 80IB(10) O F THE ACT WITHOUT PROPER VERIFICATION . THEREFORE THE LD. CIT INVOKING HIS POWERS U/S. 263 OF THE ACT AND SET - ASIDE THE ORDER OF THE LD. AO DIRECTING HIM TO EXAMINE THE ISSUE OF DEDUCTION U/S. 3 80IB(10) OF THE ACT AND THEREAFTER PASSED APPROPRIATE ORDER AFTER PROVIDING PROPER OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. AGGRIEVED BY THE ORDER OF THE LD. CIT, THE ASSESSEE IS NOW ON APPEAL BEFORE US. 4. THE LD. CIT WHILE ARRIVING HIS CONCLUSION MADE THE FOLLOWING OBSERVATION: (I) THE ASSESSEE HAD DECLARED PROFIT @ 23.74% WITH RESPECT TO THE PROJECT WHEREIN DEDUCTION U/S. 80IB(10) WAS CLAIMED WHILE AS GENERALLY IN T HE LINE OF BUSINESS PROFIT RANGES BETWEEN 8 TO 15%. THEREFORE, IT IS OBVIOUS THAT THE ASSESSEE HAS ARRIVED AT THE HIGHER PROFIT @ 23.74% ONLY TO CLAIM HIGHER DEDUCTION U/S. 80IB(10) OF THE ACT. (II) THE LD. AO HAS NOT VERIFIED THE SIZE OF THE FLATS AND APP ROVALS FROM THE REGULATORY AUTHORITIES WITH RESPECT TO THE CONSTRUCTION ACTIVITIES CARRIED OUT BY HIM . (III) THE LD. AO HAS FAILED TO EXAMINE THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT WITH REFERENCE TO THE AMENDED CLAUSE (E) & (F) OF SECTION 80IB(10 ) WHICH ARE BROUGHT TO THE STATUTE W.E.F. AY: 2010 - 11. (IV) DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LD. AO HAD NOT SOUGHT ANY INFORMATION FROM THE ASSESSEE WITH REGARD TO ITS CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT AND 4 HAD GRANTED DEDUCTION ONL Y ON THE BASIS OF THE DETAILS FURNISHED IN FORM NO.10CCE OF THE RULES. 5. THE LD. CIT THEREAFTER EXAMINING THE DETAILED SUBMISSIONS MADE BY THE ASSESSEE WHICH ARE EXTRACTED AND EMBEDDED IN HIS ORDER AND PLACING RELIANCE ON VARIOUS DECISIONS CITED IN HIS OR DER, SET - ASIDE THE ORDER PASSED BY THE LD. AO INVOKING HIS POWERS U/S. 263 OF THE ACT AND DIRECTED THE LD. AO TO EXAMINE THE ISSUE OF DEDUCTION U/S. 80IB(10) OF THE ACT IN THE CASE OF THE ASSESSEE AND THEREAFTER PASS APPROPRIATE ORDER AFTER AFFORDING AN OP PORTUNITY TO THE ASSESSEE OF BEING HEARD. 6. THE LD. AR VEHEMENTLY ARGUED BEFORE US STATING THAT THE ASSESSEE HAD SUBMITTED ALL THE REQUISITE DETAILS REQUIRED FOR CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT BEFORE THE LD. AO AND THE LD. AO AFTER EXAMINING THOSE PARTICULARS HAD GRANTED DEDUCTION TO THE ASSESSEE. IT WAS THEREFORE PLEADED THAT THE ORDER PASSED BY THE LD. AO MAY BE REINSTATED. THE LD. AR FURTHER SUBMITTED THAT THE VIEW OF THE LD. CIT THAT IN THE LINE OF BUSINESS OF THE ASSESSEE THE PROFIT VARIES BETWEEN 8 TO 15% IS NOT APPROPRIATE AND THE PROFIT DECLARED BY THE ASSESSEE IS GENUINE. THE LD. DR ON THE OTHER HA ND RELIED ON THE ORDER OF THE LD. CIT AND REQUESTED FOR CONFIRMING THE SAME. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE MATERIALS ON RECORD. APPARENTLY, FROM THE ORDER OF THE LD. AO WE FIND THAT THERE ARE NO DISCUSSION S R ELATING TO THE CLAIM OF DEDUCTION U/S. 5 80IB(10) OF THE ACT. IT IS ALSO EVIDENT FROM THE RECORDS PRODUCED BEFORE US THAT THE LD. AO HAS NOT SOUGHT ANY INFORMATION FROM THE ASSESSEE WITH RESPECT TO THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT . T HE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO NEGATE THE SAME. FURTHER, FROM THE ORDER OF THE LD. CIT IT IS CLEAR THAT, HE HAS ONLY DIRECTED THE LD. AO TO EXAMINE THE ISSUE OF DEDUCTION CLAIMED U/S. 80IB(10) OF THE ACT AND THEREAFTER PASS APPROPRIATE ORDER IN ACCORDANCE WITH MERIT AND LAW . THUS, T HE LD. CIT HAS ONLY KEPT THE ISSUE OPEN FOR THE LD. AO TO DECIDE THE ISSUE AFTER EXAMINING THE CLAIM OF THE ASSESSEE WITHOUT PASSING ANY NEGATIVE REMARKS ON MERITS OTHER THAN THE ABNORMAL PROFIT DECLARED BY THE ASSESSEE WHICH APPEARS TO BE JUSTIFIABLE . IT IS ALSO PERTINENT TO MENTION THAT WHERE THE ASSESSEE IS UNDERTAKING DIFFERENT PROJECTS I.E., PROJECTS WHEREIN DEDUCTION U/S. 80IB(10) IS ELIGIBLE AND PROJECTS WHEREIN DEDUCTION S U/S. 80IB(10) IS NOT ELIGIBLE , THERE ARE POSSIBILITIES TO DECLARE MORE PRO FIT IN THE PROJECTS ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF THE ACT AND LESS PROFITS IN THE INELIGIBLE PROJECTS BY SHIFTING OF EXPENDITURE. WE ALSO MAKE IT CLEAR THAT OUR ABOVE OBSERVATION IS ONLY GENERAL IN NATURE AND NOT A FINDING IN THE CASE OF THE ASSE SSEE. HOWEVER, KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE BEFORE US , W E DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LD. CIT. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE DISPOSED OFF. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. 6 PRONOUNCED IN THE OPEN COURT ON 2 6 TH NOVEMBER, 2020. SD/ - SD/ - (SMT. P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 2 6 TH NOVEMBER, 2020. OKK COPY TO: - 1) M/S. R.V. NIRMAAN PRIVATE LIMITED, 2 - 2 - 1130/19, 5D, SHIVAM ROAD, NEW NALLAKUNTA, HYDERABAD. 2) THE DCIT, CIRCLE - 3(1), HYDERABAD. 3) THE PRINCIPAL COMMISSIONER OF INCOME TAX - 3, HYDERABAD. 4) THE ADDL. CIT, RANGE - 3, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE