ACIT, CHENNAI V. Shanmugham Muthu Palaniappan, CHENNAI

ITA 1755/CHNY/2013

• Counselvise Citation: 175521714 RSA 2013
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-02-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 13-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI JT; NAGESWARA RAO
• Assessee Lawyers: G BASKAR
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , . . !' , # '$ % [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.1755/MDS/2013 / ASSESSMENT YEAR : 2010-11 THE ASSTT. COMMISSIONER OF INCOME-TAX BUSINESS CIRCLE IV CHENNAI VS. SHRI SHANMUGHAM MUTHU PALANIAPPAN CHETTINADU HOUSING NO.1 9 TH AVENUE, ASHOK NAGAR CHENNAI - 83 [PAN AAQPP 7494 P] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI T.N.BETGIRI, JT.CIT & SHRI NAGESWARA RAO, CIT /RESPONDENT BY : SHRI G. BASKAR, ADVOCATE / DATE OF HEARING : 03-02-2014 / DATE OF PRONOUNCEMENT : 04-02-2014 '* / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE FOR ASSESSMENT Y EAR 2010- 11, IS DIRECTED AGAINST THE ORDER OF THE COMMISSION ER OF INCOME-TAX (APPEALS-V) CHENNAI DATED 17.6.2013, PASSED IN APPE AL NO. 78/12- I.T.A.NO.1755/13 :- 2 -: 13(A)-V, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. IT IS TO BE SEEN FROM THE CASE FILE THAT THE ONLY G RIEVANCE OF THE REVENUE IS THAT THE CIT(A) OUGHT TO HAVE AFFIRM ED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER TO THE E XTENT OF ` 19,50,52,889/- BY DENYING HIM CLAIM OF DEDUCTION U/ S 80IB(10) OF THE ACT. 3. THE ASSESSEE, AN INDIVIDUAL IS A CIVIL CONTRACTOR AND PROMOTER. ON 15.10.2010, HE HAD FILED HIS RETURN D ISCLOSING INCOME OF ` 2,26,93,191/- AFTER CLAIMING DEDUCTION U/S 80IB(10) PERTAINING TO A HOUSING PROJECT NAMELY CHETTINADD ENCLAVE, SITUAT ED AT PALLIKARANAI, CHENNAI. THE ASSESSEE HAD CLAIMED HIMSELF TO BE DEVELOPER OF A PLOT MEASURING 14.75 ACRES ALONGWTIH ALL BASIC AMENITIES LIKE ROADS, PARKS, STREET LIGHTS, CHILDREN PLAY AREA ETC. WE FIND FRO M THE ASSESSMENT ORDER DATED 12.2.2013 THAT THE ASSESSING OFFICER DI D NOT TREAT THE ASSESSEE TO HAVE FULFILLED BASIC INGREDIENTS OF THE RELEVANT STATUTORY PROVISION FOR THE PURPOSE OF CLAIMING THE IMPUGNED DEDUCTION. THEREFORE, HE DISALLOWED THE CLAIM, INTER ALIA, BY OBSERVING THAT IF ALL SPACE WITHIN THE COMPOUND WALL OF A HOUSING UNIT IS TAKEN AS PRIVATE SPACE, THEN THE BUILT-UP AREA WOULD EXCEED THE STA TUTORY LIMIT OF 1500 I.T.A.NO.1755/13 :- 3 -: SQ FT, THE PLOT IN QUESTION HAD FIVE LAYOUT APPROVA LS, FIRST ONE OF THEM STIPULATED COMPLETION OF PROJECT BY 31.3.2008 WHERE AS THE PROJECT HAD BEEN COMPLETED BY THE ASSESSEE ONLY BY 31.3.2011 A ND A PART OF LAND HAD ALSO BEEN ADDED TO THE PLOT IN QUESTION LA TER ON. THE THIRD AND LAST REASON STATED IN THE ASSESSMENT ORDER READ S THAT IN ASSESSING OFFICERS OPINION, SINCE THE ASSESSEE WAS ONLY A W ORKS CONTRACTOR AND NOT A DEVELOPER IN VIEW OF THE FACT THAT THE RESI DENTIAL UNITS HAD BEEN SOLD BY THE CONCERNED LAND OWNER AND HIS ROLE WAS C ONFINED ONLY TO THAT OF A CONFIRMING AUTHORITY, HE DID NOT SATISF Y THE ESSENTIAL INGREDIENTS OF THE RELEVANT STATUTORY PROVISION. I N THIS MANNER, THE IMPUGNED DISALLOWANCE/ADDITION WAS MADE IN THE ASS ESSEES INCOME. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE TH E CIT(A). IT IS EVIDENT TO US THAT IN LOWER APPELLATE PROCEED INGS, THE ASSESSEES CONTENTIONS HAVE BEEN ACCEPTED BY THE CIT(A). THIS LEAVES THE REVENUE AGGRIEVED WHO HAS PLEADED THE FOLLOWING GRO UNDS: 2.1 THE LEARNED CIT(A) ERRED IN ALLOWING DEDUCTIO N UNDER SEC. 80IB(10) OF THE ACT TO THE ASSESSEE TO THE EXTENT OF ` 19,50,52,889/- 2 .2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E BALCONIES IN THE HOUSING UNITS ARE NOT OPEN TERRACE AREA BUT INS EPARABLE FROM THE BUILT-UP AREA AND IS VERY MUCH PART AND PARCEL OF THE BUILT-UP AREA. I.T.A.NO.1755/13 :- 4 -: 2.3. THE LEARNED CIT(A) OUGHT TO HAVE TAKEN NOTE OF THE DETAILED PHOTOGRAPHS OF THE HOUSING UNITS WHICH FORMS PART O F THE ASSESSMENT ORDER FOR THE INSTANT ASST. YEAR, INSTEA D OF FOLLOWING HIS EARLIER ORDER IN THE ASSESSEE'S OWN CASE FOR THE AS ST. YEAR 2009- 10. 2.4. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT O NLY THE BUYER OF THE RESIDENTIAL UNIT HAS EXCLUSIVE ACCESS TO THE BA LCONY. 2.5. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT, UNLIKE THE CASES RELIED UPON HIM, IN THE INSTANT CASE, THE PHOTOGRAP HS WHICH FORMS PART OF THE ASSESSMENT ORDER INDICATES THAT THE BAL CONY IS A SERVICE AREA WHICH CAN BE USED FOR MULTI PURPOSES, INCLUDIN G RESIDENTIAL PURPOSES. 2.6. THE LEARNED CIT(A) OUGHT TO HAVE NOTED THAT 'BUILT-UP AREA', FOR THE PURPOSES OF SEC.80IB(10), MEANS THE INNER M EASUREMENTS OF THE RESIDENTIAL UNITS AT THE FLOOR LEVEL AND INCLUDES THE PROJECTIONS AND BALCONIES . 2.7. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE ASSESSEE INITIALLY OBTAINED BUILDING PLAN APPROVAL, ONLY, FO R THREE HOUSES COMPRISING AN AREA OF 5988 SQ. FT. OF LAND AND HENC E, THE HOUSING PROJECT IS ON AN AREA OF LESS THAN ONE ACRE OF LAND . 2.8. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE HOUSING PROJECT APPROVAL DATE, REFERRED IN SEC.80IB (10)(A), IS THE 'LAYOUT APPROVAL DATE' AND NOT THE 'BUILDING PLAN A PPROVAL DATE'. 2.9. THE LEARNED CIT(A) FAILED TO NOTE THAT THE ASS ESSEE HAS CARRIED OUT THE HOUSING PROJECT ON A LAND WHICH HAS FIVE LAYOUT APPROVALS AND THE EARLIEST OF THE APPROVALS IS THE 'DATE OF APPROVAL' FOR THE PURPOSE OF DEDUCTION U/S 80IB(10) . 2.10 THE LEARNED CIT(A) OUGHT TO HAVE NOTED THAT THE ASSESSEE HAS NOT COMPLETED THE PROJECT WITHIN THE TIME PRESC RIBED U/S 80IB(10)(A), THE TIME LIMIT BEING RECKONED FROM THE EARLIEST DATE OF THE LAY OUT APPROVALS. I.T.A.NO.1755/13 :- 5 -: 5. IN THE COURSE OF HEARING, THE REVENUE REITERATES TH E PLEADINGS AND PRAYS FOR ACCEPTANCE OF ITS APPEAL. 6. PER CONTRA, THE ASSESSEE STATES THAT AN IDENTICAL CLAIM OF DEDUCTION HAD BEEN DISALLOWED BY THE ASSESSING OFFI CER IN ASSESSMENT YEAR 2009-10 AND THE TRIBUNAL VIDE ORDER DATED 12 .11.2013 HAS CONFIRMED SIMILAR FINDINGS OF THE CIT(A) DELETING T HE SAME. IN SUPPORT THEREOF, COPY OF THE ORDER IN I.T.A.NO. 1650/MDS/20 12 HAS ALSO BEEN PLACED ON RECORD BY THE ASSESSEE. 7. ON BEING GRANTED OPPORTUNITY TO REBUT THIS FACTUAL POSITION, THE REVENUE FAILS TO DRAW ANY DISTINCTION. 8. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE CASE FILE. IT TRANSPIRES TO US THAT IN PRECEDING AS WEL L AS THE IMPUGNED ASSESSMENT YEAR, THE ASSESSING OFFICER HAD MADE DIS ALLOWANCE OF DEDUCTION U/S 80IB(10) QUA THE VERY PROJECT CHET TINADD ENCLAVE SOUGHT TO HAVE BEEN DEVELOPED BY THE ASSESSEE ON S IMILAR ANALOGY OF REASONS (SUPRA). WE FIND FROM THE TRIBUNALS ORDER THAT SIMILAR GROUNDS WERE RAISED WHEREIN ISSUE OF DEDUCTION STANDS DECI DED IN FAVOUR OF THE ASSESSEE. IN THESE CIRCUMSTANCES, BY FOLLOWIN G THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE VERY PRO JECT IN THE NATURE OF I.T.A.NO.1755/13 :- 6 -: DEDUCTION U/S 80IB(10)OF THE ACT , WE SEE NO REASO N TO ADOPT A DIFFERENT VIEW IN THE IMPUGNED ASSESSMENT YEAR. CO NSEQUENTLY, THE CIT(A)S FINDINGS ARE AFFIRMED. 9. THE REVENUES APPEAL FAILS. IT IS DISMISS ED. ORDER PRONOUNCED ON TUESDAY, THE 4 TH OF FEBRUARY, 2014, AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (S. S. GODARA) JUDICIAL MEMBER DATED: 4 TH FEBRUARY, 2014 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR