M/s. Shree Triveni Builders, Jabalpur V. ITO, Jabalpur

ITA 18/JAB/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0962 (ITAT-JABALPUR)
• Duration Of Justice: 8 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 18-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 01-04-2011
• Court: TRIBUNAL
• Department Lawyers: D R LATHORIYA
• Section: 80IB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NOS. 18 TO 20/IND/2011 A.YS.2005-06 TO 2007-08 M/S SHREE TRIVENI BUILDERS JABALPUR ::: APPELLANT VS INCOME TAX OFFICER WARD 2(3), JABALPUR ::: RESPONDENT APPELLANT BY SHRI ANIL KUMAR GUPTA RESPONDENT BY SHRI D.R. LATHORIYA DATE OF HEARING 18.5.2015 DATE OF PRONOUNCEMENT 1 7 . 7.2015 O R D E R PER SHRI B.C. MEENA, AM ALL THESE APPEALS FILED BY THE ASSESSEE EMANATE FROM THE COMBINED ORDER OF THE LEARNED CIT(A) DATED 7.12.2 010. 2 2. DURING THE YEAR THE ASSESSEE WAS INVOLVED IN BUILD ING HOUSING PROJECTS. THE HOUSING PROJECTS WERE APPROVE D PRIOR TO 31 ST MARCH, 2004. THE GREEN RESIDENCY PROJECT OF THE ASSESSEE WAS APPROVED BY TOWN AND COUNTRY PLANNING ON 18.6.2002 BY NAGAR NIGAM ON 14.10.2002 (COLONY CELL ) AND BY NAGAR NIGAM (BUILDING SECTION) ON 13.11.2002. CONSTRUCTION OF 70 UNITS ON 4 ACRES WAS COMPLETED PRI OR TO 31.3.2008 AND THE AREA OF 2.25 ACRES WAS UNDER ENCROACHMENT AND ADVERSE POSSESSION AND LITIGATION WAS PENDING IN HIGH COURT. THE SIZE OF THE PLOT WAS 6.2 5 ACRE. THE ASSESSEE CLAIMED EXEMPTION U/S 80IB(10) OF THE A CT WHICH HAS NOT BEEN ALLOWED BY ASSESSING OFFICER FOR T HE REASON THAT BEFORE PRESCRIBED DATE I.E. 31.3.2008. THE LEARNED CIT(A) SUSTAINED THE ACTION OF THE ASSESSING O FFICER AND NOW THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING COMMON GROUNDS :- 3 1. LD. A.O. AS WELL AS LD. CIT ERRED IN NOT CONSIDERING THE FACT THAT THE CONDITION OF COMPLETI ON OF PROJECT WITHIN FOUR YEAR AS INSERTED BY FINANCE ACT, 2005 W.E.F. 01.04.2005 IS APPLICABLE ONLY FOR THE PROJECTS WHICH WERE APPROVED AFTER 01/04/2004 (A.Y. 05-06) NOT FOR THE PROJECT APPROVED BEFORE 01-04-2004. 2. THE LD. CIT AS WELL AS LD. A.O. ERRED IN NOT APPRECIATING THE FACT THAT ENTIRE PROJECT COULD NOT BE COMPLETED DUE TO THE REASONS BEYOND THE CONTROL OF APPELLANT, THEREFORE, CONSIDERING THE RULE OF FORCE MEASURE DEDUCTION U/S 80IB(10) IS ALLOWABLE TO THE APPELLANT IN RESPECT OF 70 UNITS COMPLETED OUT OF 131 UNITS. 3. THE HON'BLE CIT(APPEALS) ERRED IN CONFIRMING THE A.O.S ORDER DENYING PROPORTIONATE DEDUCTION 4 U/S 80IB(10) IN RESPECT OF 70 UNITS COMPLETED WITHIN THE STIPULATED TIME. 2. WE HAVE HEARD BOTH THE SIDES. ON THE ISSUE OF THE PROJECTS APPROVED PRIOR TO 1.4.2004. 70 UNITS WERE COMPLETE IN ALL RESPECT AND POSSESSION WAS HANDED OVER TO THE PURCHASERS AND THESE WERE OCCUPIED BY THEM. THE AR EA ON WHICH THESE COMPLETED UNITS WERE CONSTRUCTED WAS 4 ACRES. THE REMAINING LAND WAS IN ADVERSE POSSESSION AND ASSESSEE WAS NOT IN POSITION TO CARRY OUT CONSTRUCTION ON THIS PORTION OF LAND. 3. LITIGATION WAS PENDING IN THE HIGH COURT. THIS WAS THE REASON THE ASSESSEE COULD NOT COMPLETE THE PROJEC T FULLY. HOWEVER, 70 UNITS WERE COMPLETED OUT OF 13 AN D PROPORTIONATE DEDUCTION SHOULD BE ALLOWED TO THE ASSES SEE. IT WAS NOT POSSIBLE BY ALL MEANS OF THE ASSESSEE TO CO MPLETE THE PROJECT AS THE LAND COULD NOT BE GOT VACATED FROM T HE ENCROACHERS AND THE COURT LITIGATION WAS PENDING. ASSES SEE 5 HAS BEEN CLAIMING DEDUCTION U/S 80IB(10) ON PHASEWISE COMPLETION AND IT HAS BEEN CLAIMED IN EARLIER YEARS ALSO . ASSESSEE COULD NOT BE ASKED TO COMPLY WITH THE CONDI TION WHICH WAS BEYOND HIS CONTROL AS HELD BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHD DEVELOPERS; 36 2 ITR 177 (DEL). THE AMENDED PROVISIONS OF SECTION 80IB(10 ) OF THE ACT CAME INTO EXISTENCE W.E.F. 1.4.2005. THESE PROVISIONS CANNOT BE APPLIED RETROSPECTIVELY FOR THE PROJECTS WHICH WERE SANCTIONED PRIOR TO 1.4.2004. IN THE ASSE SSEES CASE WHERE THE PROJECT MAPS WERE SANCTIONED PRIOR TO 1.4.2004, SUCH CONDITIONS SHALL NOT BE APPLIED. HON' BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. VOORA PROPERT Y DEVELOPERS P. LTD.; 373 ITR 317 (MAD.) HAS HELD AS UN DER :- HELD, DISMISSING THE APPEAL, THAT THERE WAS NO DISPUTE IN THE APPROVAL GRANTED BY THE CMDA IN RESPECT OF THE COMPOSITE HOUSING SCHEME. WHEN THE LEGISLATURE INTRODUCED 100 6 PER CENT, DEDUCTION IT WAS KNOWN THAT THE LOCAL AUTHORITIES COULD APPROVE A HOUSING PROJECT TO THE EXTENT PERMITTED UNDER THE DEVELOPMENT CONTROL RULES. WHEN THE PROJECT FULFILLED THE CRITERIA FOR BEING APPROVED AS A HOUSING PROJECT, THE DEDUCTION COULD NOT BE DENIED UNDER SECTION 80IB(10) MERELY BECAUSE THE ASSESSEE HAD OBTAINED A SEPARATE PLAN PERMITS FOR THE SIX BLOCKS. IF THE CONDITIONS SPECIFIED UNDER SECTION 80IB ARE SATISFIED, THEN DEDUCTION IS ALLOWABLE ON THE ENTIRE PROJECT. SINCE THE PROJECT WAXS APPROVED IN ACCORDANCE WITH THE DEVELOPMENT CONTROL RULES, THE ASSESSEE WOULD BE ENTITLED TO 100 PER CENT, DEDUCTION ON THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY. THE ASSESSEE CONSTRUCTED SIX BLOCKS IN A LAND MEASURING ONE ACRE AND 6.5 CENTS WHICH ADMITTEDLY EXCEEDED 7 THE REQUIRED AREA SPECIFIED IN CLAUSE (A) SUB- SECTION (10) OF SECTION 80-IB, VIZ. ONE ACRE. THEREFORE, THE ASSESSEE WAS ENTITLED TO DEDUCTION. IN THE CASE OF ITO VS. PARAS BUILDERS; ITAT PUNE B BENCH HELD AS UNDER :- HELD, DISMISSING THE APPEAL, THAT ADMITTEDLY, AFTER THE MERGING OF THE TWO UNITS, THE TOTAL COVERED AREA WAS MORE THAN 1,500 SQ. FT. WHICH WAS THE CONDITION STIPULATED IN SECTION 80IB(10) OF THE ACT. MERELY BECAUSE THE ASSESSEE HAD VIOLATED THE PROVISIONS OF SECTION 80IB(10) OF THE ACT IN RESPECT OF TWO UNITS, THE DEDUCTION COUL D NOT BE DENIED IN ENTIRETY. THE ASSESSEE WAS ENTITLED TO DEDUCTION IN RESPECT OF THE REMAINING UNITS WHICH HAD BEEN CONSTRUCTED IN TERMS OF THE CONDITIONS LAID DOWN UNDER THE ACT. THE DEDUCTION 8 WAS TO BE DENIED ONLY IN RESPECT OF CONSTRUCTION OF ONE UNIT IN ROW HOUSES. THERE WAS NO INFIRMITY IN THE ORDER OF THE COMMISSIONER (APPEALS). IN VIEW OF THESE PECULIAR FACTS AND CIRCUMSTANCES, THE ASSESSEE DESERVES TO PROPORTIONATE DEDUCTION IN RESPE CT OF COMPLETED WORK OF 70 UNITS. WE ORDER ACCORDINGLY. 4. IN THE RESULT, THE APPEALS OF THE ASSESSEE STAND PART LY ALLOWED. PRONOUNCED IN OPEN COURT ON 17 TH JULY, 2015 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 17 TH JULY, 2015 DN/-