M/s. Hinduja Land Development Pvt. Ltd., Bangalore V. ACIT-Circle-11(4), Bangalore

ITA 1784/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8502 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 17-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 1784/BANG/2016 ASSESSMENT YEAR : 2006- 07 M/S. HINDUJA LAND DEVELOPMENT PVT. LTD., 1B, RICHMOND ROAD, BANGALORE 560 025. PAN: AABCH 2768J VS. THE ASSISTANT COMMISSIONER OF INCOME- TAX, CIRCLE 11(4), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S V RAVI SHANKAR, ADVOCATE RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT (DR) DATE OF HEARING : 01.03.2017 DATE OF PRONOUNCEMENT : 15.03.2017 O R D E R PER VIJAY PAL RAO, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED: 11.08.2016 OF CIT(A) FOR THE ASSESSMENT YEAR 2006-0 7. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. ITA NO. 1784/BANG/2016 PAGE 2 OF 9 ITA NO. 1784/BANG/2016 PAGE 3 OF 9 2. THE ASSESSEE IS A COMPANY AND ENGAGED IN THE BUSINE SS OF LAND DEVELOPMENT AND CONSTRUCTION OF DWELLING HOUSES. T HE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON 30.11.2006 AND CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT. TH E ASSESSING OFFICER HAS DENIED THE CLAIM OF DEDUCTION U/S. 80IB(10) ON THE GROUND THAT THE ITA NO. 1784/BANG/2016 PAGE 4 OF 9 SIZE OF THE HOUSING UNIT IS EXCEEDING 1,500 SQ.FT., THE LIMIT SPECIFIED UNDER THE PROVISIONS OF SECTION 80IB(10). THE ASSE SSEE CHALLENGED THE ACTION OF THE AO BEFORE THE CIT(A), HOWEVER COULD N OT SUCCEED. BEFORE THE TRIBUNAL, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT THE AO TOOK THE BUILT UP AREA OF THE HOUSING UNIT AS PER THE BR OCHURE ISSUED BY THE ASSESSEE WITHOUT MEASURING THE ACTUAL BUILT UP AREA . HE HAS ALSO REFERRED SECTION 80IB(14)(A) OF THE ACT AND SUBMITTED THAT A S PER THE DEFINITION OF THE BUILT UP AREA, THE COMMON AREA IS REQUIRED TO B E EXCLUDED FOR THIS PURPOSE. HE HAS REFERRED TO THE DETAILS OF THE BUI LT UP AREA, COMMON AREA AS GIVEN IN THE STATEMENT OF DETAILS AT PAGE 8 TO 1 0 OF PAPER BOOK AND CONTENTED THAT THE AO HAS TAKEN THE BUILT UP AREA A S TOTAL AREA WHICH INCLUDES THE COMMON AREA. WHEREAS AS PER THE PROVI SIONS OF SECTION 80IB(14)(A) THE COMMON AREA HAS TO BE EXCLUDED FOR THIS PURPOSE. HE HAS FURTHER CONTENTED THAT SOME OF THE UNITS ARE SH OWN AS HAVING MORE AREA BECAUSE OF THE FACT THAT TWO SEPARATE UNITS WE RE MERGED. HOWEVER THOSE WERE SOLD VIDE SEPARATE SALE DEEDS. THUS, TH E LD. AR HAS SUBMITTED THAT WHEN THE TWO UNITS WERE SHOWN SEPARATELY THEN THE SAME SHOULD BE TAKEN INDEPENDENT UNITS AND SHOULD NOT BE CLUBBED T OGETHER FOR THE PURPOSE OF MEASURING THE BUILT UP AREA OF EACH UNIT . HE HAS FURTHER CONTENTED THAT IN SOME OF THE UNITS AT THE GROUND F LOOR, THE AO HAS TAKEN INTO CONSIDERATION THE PRIVATE GARDEN AREA AS PART OF THE BUILT UP AREA AND ITA NO. 1784/BANG/2016 PAGE 5 OF 9 THEREFORE THE ENTIRE MEASUREMENT OF THE AREA WAS WR ONGLY TAKEN INTO CONSIDERATION BY THE AO. THE GARDEN AREA OF THE UN IT HAS ONLY USER RIGHT OF THE OWNER OF THE UNIT AND NO OWNERSHIP WAS GIVEN TO THE PURCHASER. HE HAS RELIED UPON THE DECISION DATED: 17.11.2015 O F THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. RAJES HWARI COTTON GINNING AND PRESSING INDUSTRIES VS. ACIT IN ITA NO. 801/200 9 & ITA NOS. 840- 841/2009 AS WELL AS IN THE CASE OF CIT VS G.R. DEV ELOPERS 353 ITR 1 (KARN). THE LD. AR HAS FURTHER POINTED OUT THAT FO R THE ASSESSMENT YEAR 2007-08 THE AO HAS ACCEPTED THE CLAIM OF DEDUCTION U/S. 80IB(10). ALTERNATIVELY, THE LD. AR HAS CONTENTED THAT EVEN I N CASE SOME UNITS ARE FOUND TO BE EXCEEDING THE AREA OF 1,500 SQ.FT. ONLY ON THE PROPORTIONATE DISALLOWANCE OF DEDUCTION U/S. 80IB(10) HAS TO BE C ONSIDERED. 3. ON THE OTHER HAND, THE LD. AR HAS SUBMITTED THAT RE SIDENTIAL UNITS IN QUESTION WERE INSPECTED AND MEASURED BY THE ARCHITE CT OF THE ASSESSEE AND IN THE PRESENCE OF THE ASSESSEE. THEREFORE, TH E FINDING OF THE AO IS BASED ON THE FACTS AS PER THE MEASUREMENT CARRIED O UT AT THE SITE. HE HAS FURTHER CONTENTED THAT THE AO HAS CATEGORICALLY STA TED IN THE ASSESSMENT ORDER THAT WHEN THIS POINT WAS CONFRONTED TO THE AS SESSEE, THE ASSESSEE WITHDRAWN THE CLAIM OF DEDUCTION U/S. 80IB(10) AND FILED A REVISED RETURN. THE ASSESSMENT HAS BEEN FRAMED BY THE AO O N THE BASIS OF THE ITA NO. 1784/BANG/2016 PAGE 6 OF 9 REVISED RETURN. THEREFORE NO FAULT CAN BE FOUND IN THE ASSESSMENT FRAMED BY THE AO ON THE BASIS OF THE REVISED RETURN. THE CIT(A) HAS ALSO TAKEN INTO CONSIDERATION THE FACTS AS RECORDED BY THE AO THAT THE SIZE OF THE FLATS WAS FOUND MORE THAN 1,500 SQ.FT. DURING THE I NSPECTION AND MEASUREMENT CARRIED OUT BY THE ARCHITECT OF THE ASS ESSEE AND CONSEQUENTLY THE ASSESSEE WITHDREW THE CLAIM OF DED UCTION U/S. 80IB(10). HE HAS RELIED UPON THE ORDERS OF THE AUT HORITIES BELOW. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND RELEVAN T MATERIAL ON RECORD, IT IS NOTED THAT THE ASSESSING OFFICER HAS POINTED OUT THAT VARIOUS RESIDENTIAL FLATS IN THE PROJECT WERE EXCEEDING THE BUILT UP AREA LIMIT OF 1,500 SQ.FT. AS PROVIDED U/S. 80IB(10). WHEN THIS F ACT WAS CONFRONTED WITH THE ASSESSEE, THE ASSESSEE FILED A REVISED RET URN OF INCOME AND WITHDREW THE CLAIM. ACCORDINGLY, THE AO HAS FRAMED THE ASSESSMENT ON THE BASIS OF THE REVISED RETURN AND THERE WAS NO QU ESTION OF DENIAL OF CLAIM OF DEDUCTION U/S. 80IB(10). THE ASSESSEE RAI SED THIS ISSUE BEFORE THE CIT(A), HOWEVER, THE CIT(A) HAS DENIED THE CLAI M OF DEDUCTION U/S. 80IB(10) BY TAKING NOTE OF THE FACT THAT THE ASSESS EE HIMSELF HAS WITHDRAWN THIS CLAIM BY FILING THE REVISED RETURN. THEREFORE, THE ASSESSEE HAS REITERATED HIS CLAIM OF DEDUCTION U/S. 80IB(10) AND ASSERTED THAT THE AREA OF THESE FLATS WAS WRONGLY TAKEN BY THE AO WIT HOUT EXCLUDING THE ITA NO. 1784/BANG/2016 PAGE 7 OF 9 COMMON AREA. THERE IS NO BAR OF RAISING THE FRESH PLEA OR MAKING CLAIM AT THE APPELLATE STAGE HOWEVER, IF THE CLAIM OF THE ASSESSEE IS BASED ON THE FACTS WHICH ARE REQUIRED TO BE INVESTIGATED THE N THIS RULE OF RAISING THE FRESH PLEA BEFORE THE APPELLATE AUTHORITY AS HE LD BY THE HONBLE SUPREME COURT IN THE CASE OF NTPC VS CIT 229 ITR 38 3 IS NOT APPLICABLE. IN THE CASE IN HAND IT IS UNDISPUTED T HAT THE AO HAS POINTED OUT TO THE ASSESSEE THAT THE AREA OF THE FLATS IN T HE PROJECTS ARE EXCEEDING 1,500 SQ.FT. AND THEREFORE THE ASSESSEES CLAIM IS NOT ALLOWABLE UPON WHICH THE ASSESSEE HAD WITHDRAWN HIS CLAIM BY FILIN G A REVISED RETURN. SINCE THE REVISED RETURN WAS FILED WITHIN THE PERIO D OF LIMITATION AND IT WAS A VALID RETURN OF INCOME THEREFORE, THE ASSESSI NG OFFICER HAS FRAMED THE ASSESSMENT ON THE BASIS OF REVISED RETURN. THU S, IT IS CLEAR THAT THE AO HAS NOT PROCEEDED FURTHER TO VERIFY AND COUNTER THE CLAIM OF THE ASSESSEE ON THE ISSUE OF BUILT UP AREA OF DWELLING UNITS. THIS ISSUE IS NOT A PURE LEGAL ISSUE BUT IT INVOLVES THE QUESTION OF FACTS TO BE VERIFIED AND THEN ONLY THE LEGAL PROVISIONS ARE TO BE APPLIED. THERE IS NO QUARREL ON THE LEGAL PROVISIONS THAT AS PER SECTION 80IB(14)(A ) THE COMMON AREA OF THE PROJECTS ARE TO BE EXCLUDED FOR THE PURPOSE OF CONSIDERING THE BUILT UP AREA. HOWEVER, BY APPLYING THE SAID PROVISIONS OF THE ACT, THE ACTUAL BUILT UP AREA IS REQUIRED TO BE MEASURED AND VERIFI ED. THE ASSESSEE HIMSELF HAS ACCEPTED THE OBJECTIONS OF THE AO DURIN G THE ASSESSMENT ITA NO. 1784/BANG/2016 PAGE 8 OF 9 PROCEEDINGS. THEREFORE THIS CLAIM OF THE ASSESSEE RAISED BEFORE THE CIT(A) AS WELL AS THIS TRIBUNAL CANNOT BE ACCEPTED. AS REGARDS THE ASSESSMENT YEAR 2007-08 IS CONCERNED IT IS NOTED TH AT THE AO HAS NOT GIVEN ANY FINDING ON THIS ISSUE AND THEREFORE IT IS NOT A CASE THAT THE AO HAS CARRIED OUT ANY EXERCISE OF MEASURING THE BUILT UP AREA OF THE FLATS IN QUESTION. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTA NCES OF THE CASE, NO FAULT CAN BE FOUND IN THE ORDERS OF THE AUTHORITIES BELOW. THE DECISION RELIED UPON BY THE LD. AR CAN BE APPLIED ONLY WHEN THE ISSUE IS DENIED BY APPLYING THE PROVISIONS OF THE LAW AND NOT ON TH E BASIS OF THE ACTUAL AREA FOUND TO BE MORE THAN THE LIMIT PRESCRIBED UND ER THE PROVISIONS. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF MARCH, 2017 SD/- (VIJAY PAL RAO) JUDICIAL MEMBER BANGALORE, DATED, THE 15 TH MARCH, 2017. / MS/ ITA NO. 1784/BANG/2016 PAGE 9 OF 9 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.