Pharande Developers, Pune V. Income-tax Officer,

ITA 1765/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1626 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 24-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 1765 /PN/201 4 / ASSESS MENT YEAR : 20 0 7 - 0 8 PHARANDE DEVELOPERS, 98/2, GURUVIHAR, BHOSARI, PUNE 39 . / APPELLANT PAN: A AFFP3023R VS. THE INCOME TAX OFFICER, WARD 8 ( 3 ), PUNE . / RESPONDENT / APPELLANT BY : SHRI SU NIL GANOO / RESPONDENT BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 2 9 . 0 6 .201 6 / DATE OF PRONOUNCEMENT: 30 . 0 6 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS A GAINST THE ORDER OF CIT (A) - V , PUNE , DATED 2 2 . 0 7 .20 1 4 RELATING TO ASSESSMENT YEAR 20 0 7 - 0 8 AGAINST ORDER PASSED UNDER SECTION 14 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAD ORIGINALLY FILED THE GROUNDS OF APPEAL AS PART OF MEMO APPEAL , OUT OF WHICH GROUND OF APPEAL NO.1 IS NOT PRESSED. THE ASSESSEE FILED ITA NO. 1765 /PN/20 1 4 PHARANDE DEVELOPERS 2 CONCISE GROUNDS OF APPEAL ON 01.02.2016. ON THE APPOINTED DATE OF HEARING I.E. 29.06.2016, THE ASSESSEE HAS AGAIN FILED THE CONCISE GROUNDS OF APPEAL, WHICH AS PER THE ASSESSE E, ARE FINAL AND WHICH READS AS UNDER: - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, IN AS MUCH AS THE EVIDENCES PRODUCED BY THE APPELLANT PARTIC ULARLY THE CORRESPONDENCE OF THE APPELLANT WITH THE DVO WAS NOT CONSIDERED BY THE LEARNED CIT(A). HENCE IN THE INTEREST OF JUSTICE THE IMPUGNED ORDER OF THE LEARNED CIT(A) BE RESTORED TO HIS FILE WITH A DIRECTION TO PASS FRESH ORDER BY CONSIDERING THE EVI DENCES PRODUCED BY THE APPELLANT. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE DEDUCTION OF RS.11,62,280.00 AS CLAIMED BY THE APPELLANT U/S 80 - IB(10) OF THE I.T. ACT, 1961 MAY PLEASE BE ALLOWED. 3. THE ASSESSEE HAS ALSO FURNISHED AN APPLI CATION FOR ADMISSION OF ADDITIONAL EVIDENCE ALONG WITH LIST OF ADDITIONAL EVIDENCES PLACED AT PAGES 1 TO 5 OF PAPER BOOK. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, THE MATTER NEEDS TO BE SET - ASIDE TO THE FILE OF ASSESSING OFFICER TO VERIFY THE CLAIM OF ASSESSEE. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 5. BRIEFLY, IN THE FACTS OF THE CASE, T HE ASSESSEE WAS ENGAGED IN THE DEVELOPMENT OF LAND, CONSTRUCTION OF BUILDINGS AND SALE THEREOF. THE ASSESSEE HAD UNDERTAKEN TWO HOUSING PROJECTS I.E. SAMRATHA NAGARI PROJECT AND LAKSHDWEEP PROJECT AND THE ASSESSEE HAD CLAIMED THE DEDUCTION UNDER SECTION 8 0IB(10) OF THE ACT IN RESPECT OF SALE OF FLATS IN THE PROJECT LAKSHDWEEP PROJECT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD CLAIMED THE AFORESAID DEDUCTION UNDER SECTION 80IB(10) OF THE ACT FOR THE FIRST TIME IN ASSESSMENT YEAR 2005 - 06, WHICH WAS DENIED BY THE ASSESSING OFFICER. THE SAID PROJECT WAS VALUED BY THE APPROVED VALUER TO ASCERTAIN THE ALLOWABILITY OF ITA NO. 1765 /PN/20 1 4 PHARANDE DEVELOPERS 3 DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE ASSESSING OFFICER IN ASSESSMENT YEAR 2005 - 06 FOUND THAT THE ASSESSEE HAD SOLD TWO NEIGHB OURING FLATS IN ITS PROJECT LAKSHDWEEP I.E. BU NGALOWS G - 1 AND G - 2 TO ONE FAMILY. THE PHYSICAL INSPECTION AND SITE VISIT ALSO CONFIRMED THAT THE BUNGALOW S G - 1 AND G - 2 HAD BEEN PHYSICALLY AMALGAMATED INTO ONE BUNGALOW MEASURING 1794 SQ.FT. AND WAS USED BY ONE FAMILY AND THERE EXISTED ONE KITCHEN IN THE SAID BUNGALOW. THE ASSESSING OFFICER FURTHER OBSERVED THAT SIMILAR WAS THE POSITION IN RESPECT OF BUNGALOW S G - 3 AND G - 4. THE ASSESSING OFFICER THUS, HELD THAT THE SAID PROJECT LAKSHDWEEP DID NOT FULFIL THE CONDITIONS AND CONTRAVENE THE BASI C CONDITIONS OF CLAUSE (C) TO SECTION 80IB(10) R.W.S. 80IB(14)(A) OF THE ACT AND ACCORDINGLY, THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS DISALLOWED BY THE ASSESSING OFFICER. SIMILARLY, IN ASSESSMENT YEAR 2006 - 07 ALSO, THE DEDUCTION WAS NOT ALLOWED TO THE ASSESSEE, WHICH WAS UPHELD BY THE CIT(A). THE ASSESSING OFFICER FOR THE YEAR UNDER CONSIDERATION ALSO NOTED THAT THE POSITION OF BUNGALOW S G - 3 AND G - 4 WAS SIMILAR TO THE BUNGALOW S G - 1 AND THE POSITION OF BUNGALOW S G - 3 AND G - 4 WAS SIMILAR TO THE BUNGALOW S G - 1 AND G - 2, THE A SSESSEE WAS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AND THE SAME WAS DISALLOWED. 6. BEFORE THE CIT(A), THE ASSESSEE PLACED RELIANCE ON THE ORDER OF TRIBUNAL IN ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 IN ITA NO.715/PN/2009 AND ITA NO.175/PN/2011, ORDER DATED 25.06.2013. THE CIT(A) NOTED THAT IN THE INSTANT ASSESSMENT YEAR, THE ASSESSEE HAD RECEIVED SALE CONSIDERATION IN RESPECT OF BUNGALOW S G - 3 AND G - 4 AS WELL AS RS.50,000/ - IN RESPECT OF BUNGALOW S G - 1 AND G - 2 ON ACCOUNT OF EX TRA WORK CHARGES. SINCE THE POSITION OF BUNGALOW S G - 3 AND G - 4 REMAINED THE SAME AS IN THE CASE OF BUNGALOW S G - 1 AND G - 2, THUS, ON THE BASIS OF PARITY, THE ASSESSING OFFICER WAS DIRECTED TO RE - COMPUTE THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT EXCLU DING THE PROFIT OF ITA NO. 1765 /PN/20 1 4 PHARANDE DEVELOPERS 4 BUNGALOW S G - 3 AND G - 4 AS WELL AS SUM OF RS.50,000/ - RECEIVED IN RESPECT OF BUNGALOW S G - 1 AND G - 2. 7. THE ASSESSEE IS AGGRIEVED BY THE AFORESAID OBSERVATIONS OF CIT(A). THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) HAS FAILED TO TAKE INTO CONSIDERATION THE CORRESPONDENCE OF THE ASSESSEE WITH THE DVO BEFORE ADJUDICATING THE ISSUE. AS PER THE CORRESPONDENCE WITH THE DVO, THE ASSESSEE POINTED OUT THAT THE DVO HAD NOT ACTUALLY SUBMITTED SEPARATE REPORT FOR BUNGALOW S G - 3 AND G - 4 LOCA TED IN THE PROJECT LAKSHDWEEP, BUT HAD RELIED ON THE MEASUREMENTS OF BUNGALOW S G - 1 AND G - 2 AS THE SAME WERE IDENTICAL IN PLANS. THE ASSESSEE CLAIMS THAT BOTH THE BUNGALOW S G - 3 AND G - 4 ARE INDEPENDENT BUNGALOWS AND EVEN PROP E RT Y TAX BILLS FOR THEM ARE SE PARATE AND ONCE THE SAME HAVE NOT BEEN CONSOLIDATED, THE BUILT UP AREA OF INDEPENDENT BUNGALOWS IS WITHIN LIMITS PRESCRIBED UNDER SECTION 80IB(10) OF THE ACT AND CONSEQUENTLY, THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION CONSEQUENTLY, THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 8. THE TRIBUNAL WHILE DECIDING THE ISSUE RAISED BY THE ASSESSEE IN ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 NOTED THAT THE BUILT UP AREA OF TWO BUNGALOWS G - 1 AND G - 2 WAS BEYOND THE PRESCRIBED LIMIT PROVIDED UNDER SECTION 80IB(10) OF THE ACT AND HENCE, THE ASSESSEE WAS HELD TO BE ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF BALANCE PORTION OF BUILDING AND EXCLUDING THE CONSIDERATION RECEIVED FOR BUNGALOW S G - 1 AND G - 2 . H ENCE, PROPORTIONATE DEDUCTION WAS ALLOWED UNDER SE CTION 80IB(10) OF THE ACT. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2005 - 06 HAS MENTIONED THAT THE POSITION OF BUNGALOW S G - 3 AND G - 4 IN LAKSHDWEEP IS SIMILAR TO THE BUNGALOW S G - 1 AND G - 2. THE ITA NO. 1765 /PN/20 1 4 PHARANDE DEVELOPERS 5 ASSESSEE HAS FILED ON RE CORD THE COPY OF VALUERS REPORT AND OTHER DOCUMENTS AND ALSO REFERRED TO THE CORRESPONDENCE WITH THE DVO, WHICH WAS FILED AS ADDITIONAL EVIDENCE BEFORE THE CIT(A). THE ASSESSEE VEHEMENTLY CLAIMS THAT THE SAID BUNGALOW S G - 3 AND G - 4 HAVE NOT BEEN JOINED AN D ARE OCCUPIED BY TWO DIFFERENT PERSONS, AGAINST WHICH THERE ARE SEPARATE PROPERTY TAX BILLS. THE PERUSAL OF ADDITIONAL EVIDENCES FILED BY THE ASSESSEE REFLECTS THAT BUNGALOW G - 3 STANDS IN THE NAME OF ONE SHRI PARVEEN SOUD INAMDAR AND G - 4 STANDS IN THE NA ME OF ONE SHRI SIKINDER USMANBHAI INAMDAR. THE ASSESSEE HAS PLACED ON RECORD THE PROPERTY TAX BILLS OF TWO FLATS AS ADDITIONAL EVIDENCE AND ALSO HAS REFERRED TO THE E - MAIL COMMUNICATION WITH THE DVO, WHO HAS DENIED THAT HE HAD NOT SUBMITTED ANY REPORT WIT H REGARD TO BUNGALOW S G - 3 AND G - 4. THE PHYSICAL ASPECT OF THE FLATS BEING SEPARATE OR JOINT CAN BE VERIFIED BY THE PHYSICAL INSPECTION OF THE PROPERTY OR BY OBTAINING REPORT THROUGH DVO . IN THE INTEREST OF JUSTICE AND IN VIEW OF THE ADDITIONAL EVIDENCE F ILED BY THE ASSESSEE, I DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO CARRY OUT DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO CARRY OUT THE NECESSARY VERIFICATION AND / OR AFTER GETTING THE REPORT FROM DVO AND DECIDE THE ISSUE IN ACCORDANCE WITH THE LAW. THE ASSESSEE HAS ALREADY BEE N HELD ENTITLED TO CLAIM THE PROPORTIONATE DEDUCTION IN RESPECT OF UNITS SOLD IN THE BUILDING LAKSHDWEEP AND SIMILARLY THE ASSESSING OFFICER SHALL DECIDE THE ISSUE IN LINE WITH THE RATIO LAID DOWN BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2005 - 06 AFTER VERIFYING THE CLAIM OF ASSESSEE IN RESPECT OF NON - JOINING OF BU NGALOWS G - 3 AND G - 4 . IT MAY BE POINTED OUT HEREIN THAT THE ASSESSEE HAD RECEIVED RS.50,000/ - DURING THE YEAR IN RESPECT OF BU NGALOWS G - 1 AND G - 2, ON WHICH THE ASSESSEE IS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. ACCORDINGLY, THE ISSUE IS RESTORED BACK TO THE FILE OF ASSESSING OFFICER AND THE CONCISE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. SINCE THE MATTER IS BEING SENT ITA NO. 1765 /PN/20 1 4 PHARANDE DEVELOPERS 6 BACK TO THE FILE OF ASSESSING OFFICER FOR CARRYING OUT THE VERIFICATION, THE ISSUE IS NOT ADJUDICATED ON MERITS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 30 TH JUNE , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPON DENT; 2. / THE RESPON DENT; 3. ( ) / THE CIT(A) - V , PUNE ; 4. / THE CIT - V, PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE