The ITO, Ward-2(5), Baroda V. M/s. Shiv Developers, Baroda

ITA 1787/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9063 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 18-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NOS: 1787 & 1800/AHD/2013 (ASSESSMENT YEARS: 2008-09 & 2009-10) INCOME TAX OFFICER, WARD- 2 (5), BARODA INCOME TAX OFFICER, WARD- 2 (3), BARODA V/S V/S M/S. SHIV DEVELOPERS 103- A, SILVER POINT, B/H. EXPRESS HOTEL, R.C. DUTT ROAD, BARODA PAN NO. AAYFS5506R AND M/S. RADHA KRISHNA DEVELOPERS. 45, EARTH COMPLEX, OLD PADRA ROAD, BARODA PAN NO. AAIFR8085N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KEYUR PATEL, SR. D.R. RESPONDENT BY : SHRI S.N. SOPARKAR, A.R. ( )/ ORDER DATE OF HEARING : 08 -03-201 7 DATE OF PRONOUNCEMENT : 09 -03-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NOS. 178 7 & 1800/AHD/2013 . A.YS. 2008- 09 & 2009-10 2 1. ITA NOS. 1787 & 1800/AHD/2013 ARE APPEALS BY THE RE VENUE FOR TWO DIFFERENT ASSESSEE PREFERRED AGAINST TWO SEPARATE O RDERS OF THE LD. CIT(A)-II, BARODA DATED 11.03.2013 & 18.03.2013 PERTAINING TO A.YS. 2008-09 & 2009- 10 RESPECTIVELY. 2. THE ISSUES INVOLVED IN THE IMPUGNED APPEALS ARE IDE NTICAL AND RELATE TO THE SIMILAR SET OF FACTS; THEREFORE, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON FOR THE SAKE OF CONV ENIENCE. 3. WE HEARD THE RIVAL CONTENTIONS ON THE FACTS OF THE ITA NO. 1787/AHD/2013 WHEREIN THE GRIEVANCE OF THE REVENUE READS AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE ID.CIT (APPEALS) ERRED IN ALLOWING DEDUCTION OF RS.1,07,62,655/- U/S 80IB(10) OF THE INCOME-TAX ACT WITHOUT APPRECIATING THAT THE NATURE OF AGREEME NT BETWEEN THE ASSESSEE AND THE UNIT PURCHASERS SHOWS THAT IT WAS ONLY A 'WORKS CONTRACT' IN SO FAR AS THE AGREEMENT ENTERED INTO BEFORE THE CONSTRUCTIONS WAS COMPLETE AND NOT AFTER THE FLAT OR UNIT WAS CONSTRUCTED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE ID CIT (APPEALS) ERRED IN ALLOWING DEDUCTION U/S 80IB(10) R.W.S. 80I B(1) TO THE ASSESSEE ON THE PROFIT OF RS. 16,93,317/- DERIVED FROM SALE OF UNUT ILIZED FSI NOT BEING THE ELEMENT OF PROFITS DERIVED FROM THE BUSINESS ACTIVITY OF DE VELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT RELATING TO THE SALE OF TENEMEN TS. 4. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSE E DREW OUR ATTENTION TO THE ASSESSMENT ORDER AND POINTED OUT THAT THE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS CONSIDERED IN THE CASE OF RA DHE DEVELOPERS. THE LD. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT THE A.O. DID NOT ACCEPT THE ITA NOS. 178 7 & 1800/AHD/2013 . A.YS. 2008- 09 & 2009-10 3 DECISION IN THE CASE OF RADHE DEVELOPERS GIVEN IN I TA NO. 2482/AHD/2006 BECAUSE THE DEPARTMENT HAS NOT ACCEPTED THE JUDGMEN T OF THE TRIBUNAL. 5. HOWEVER, WE FIND THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF RADHE DEVELOPERS (SUPRA) HAS BEEN CONFIRMED BY THE HONBL E JURISDICTIONAL HIGH COURT OF GUJARAT IN 341 ITR 403. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE TO THE FILES OF THE A.O . THE A.O. IS DIRECTED TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE DECISIO N OF THE HONBLE JURISDICTIONAL HIGH COURT GIVEN IN THE CASE OF RADH E DEVELOPERS (SUPRA). GROUND NO. 1 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 6. INSOFAR AS THE SECOND ISSUE IS CONCERNED, THE LD. D .R. BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT OF GUJARAT IN THE CASE OF DESAI DEVELOPERS IN TAX APPEAL NO. 150 OF 2014 2 32 TAXMANN.COM. 490. IT IS THE SAY OF THE LD. D.R. THAT THE HONBLE JURI SDICTIONAL HIGH COURT HAS DECIDED THIS ISSUE IN FAVOUR OF THE REVENUE AND AGA INST THE ASSESSEE. THE LD. SENIOR COUNSEL FAIRLY CONCEDED TO THIS BUT BROUGHT TO OUR NOTICE THE ORDER OF THE HONBLE SUPREME COURT BY WHICH SPECIAL LEAVE PETITION HAS BEEN ADMITTED BY THE HONBLE SUPREME COURT IN A BUNCH OF APPEALS HAVING IDENTICAL ISSUES. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS BROUGHT TO OUR NOTICE. IN OUR CONSIDERED OPINION, THIS ISSUE NEEDS TO BE SENT BACK TO THE FILES OF THE A.O. FOR RECONSIDERATION IN THE LIGHT OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN DESAI DEVELOPE RS (SUPRA), AFTER ITA NOS. 178 7 & 1800/AHD/2013 . A.YS. 2008- 09 & 2009-10 4 CONSIDERING THE OUTCOME OF THE SPECIAL LEAVE PETITI ON ADMITTED BY THE HONBLE SUPREME COURT, GROUND NO. 2 IS TREATED AS A LLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 09- 03- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 09 /03/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD