Assistant Commissioner of Income-tax, V. Parmar Properties Private Ltd., Pune

ITA 1838/PUN/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8631 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-07-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 09-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Keywords: Business income; Opportunity of being heard; Rule of consistency; Earning of tax free income; Revised return
• Section: 14A; 80IB; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1838/PUN/2014 / ASSESSMENT YEAR : 2010-11 ACIT, CIRCLE-4, PUNE. ....... / APPELLANT / V/S. PARMAR PROPERTIES PVT. LTD., OFFICE NO.2-A, WING-1, THACKER HOUSE, 2418, EAST STREET, PUNE-411001. PAN : AABCP1016F / RESPONDENT . / ITA NO.1908/PUN/2014 / ASSESSMENT YEAR : 2010-11 PARMAR PROPERTIES PVT. LTD., OFFICE NO.2-A, WING-1, THACKER HOUSE, 2418, EAST STREET, PUNE-411001. PAN : AABCP1016F ....... / APPELLANT / V/S. ADDL.CIT, RANGE-4, PUNE. / RESPONDENT REVENUE BY : SHRI S. B. PRASAD ASSESSEE BY : SHRI KISHOR PHADKE / DATE OF HEARING : 03.07.2019 / DATE OF PRONOUNCEMENT : 03.09.2019 / ORDER PER D. KARUNAKARA RAO, AM: THESE ARE THE CROSS APPEALS FILED BY THE REVENUE AND THE ASSESSEE AGAINST THE ORDER OF CIT(A)-II, PUNE DATED 30.05.2014 FOR THE ASSESSMENT YEAR 2010-11. 2 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 2. FIRST WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE FOR ADJUDICATION IN THE FOLLOWING PARAGRAPHS. ITA NO.1908/PUN/2014 BY ASSESSEE 3. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THE LEARNED CIT(A)-II ERRED IN LAW AND ON FACTS IN CONFIRMING PROTECTIVE ADDITION MADE BY A.O. ON ACCOUNT OF NOTIONAL RENT OF UNSOLD AREA OF 32,995 SQ FT AS INCOME FROM HOUSE PROPERTY DISREGARDING THE FACT THAT THE SAME WAS HELD AS STOCK-IN-TRADE OF THE APPELLANT. 2. ALTERNATIVELY AND WITHOUT PREJUDICE TO GROUND NO.1, THE LEARNED CIT(A)-II ERRED IN LAW AND ON FACTS IN NOT CONFIRMING THE PROTECTIVE ADDITION OF LEASE RENT ON UNSOLD AREA OF 10,505 SQ FT INSTEAD OF AREA OF 32,955 SQ FT IN THE KPCT PROJECT. THE LEARNED CIT(A)-II, PUNE OUGHT TO HAVE APPRECIATED THAT THE REMAINING BALANCE AREA OF 22,450 SQ FT (I.E. 32,955 10,505) WAS STILL UNDER CONSTRUCTION AND NOT HAVING COMPLETION CERTIFICATE OF PMC. 3. THE CIT(A)-II ERRED IN LAW AND ON FACTS IN DIRECTING DISALLOWANCE OF FOLLOWING EXPENSES ON THE ANALOGY THAT THE SAID EXPENSES WERE FOR REPAIRS AND MAINTENANCE FOR RENTED AREA OF 88,105 SQ FT AREA OF THE KPCT PROJECT A) MATERIAL PURCHASE RS.12,16,734 B) LABOUR CHARGES RS.5,20,138 C) REPAIRS & MAINTENANCE RS.21,58,647 4. THE LEARNED CIT(A)-II ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF RS.1,70,566 U/S 14A OF THE ITA, 1961 WITHOUT APPRECIATING APPELLANTS CONTENTION THAT NO ANY DEDUCTION IS CLAIMED FOR EXPENSES INCURRED IN RELATION TO THE EXEMPT INCOME OF RS.6,750/-. 5. ALTERNATIVELY AND WITHOUT PREJUDICE TO GROUND NO.4, THE CIT(A)-II, PUNE ERRED IN NOT CONFINING THE DISALLOWANCE U/S 14A, TO THE EXTENT OF EXEMPT INCOME OF RS.6,750/- . 6. THE LEARNED CIT(A)-II ERRED IN LAW AND ON FACTS IN DENYING THE DEDUCTION OF RS.3,72,400/- CLAIMED U/S 80-IB(10) OF THE ITA, 1961 TO THE ASSESSEE COMPANY. 7. THE APPELLANT CRAVES LEAVE TO ADD/MODIFY/ALTER/DELETE ALL/ANY OF THE GROUNDS OF APPEAL. 3 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 4. GROUNDS NO.1 AND 2 OF THE ASSESSEES APPEAL RELATE TO THE TAXATION OF NOTIONAL RENTAL INCOME RELATING TO THE UNSOLD AREA OF THE MALL BUILT BY THE ASSESSEE. THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE BUILT THE KPTC MALL AND A RESIDENTIAL FLATS CALLED PARMAR GARDEN IN THE YEAR UNDER CONSIDERATION. THE CONSTRUCTION OF PARMAR GARDEN IS COMPLETED AND THE FLATS ARE SOLD AND THERE IS NO LITIGATION ABOUT IT. HOWEVER, WITH REFERENCE TO THE KPTC MALL, THE ASSESSEE CONSTRUCTED TOTAL AREA OF 2,43,149 SQ.FT.. OUT OF THAT, 1,22,048 ST.FT. WAS ALREADY SOLD AT THE END OF THE ANOTHER FINANCIAL YEAR LEAVING BEHIND THE UNSOLD AREA OF 1,21,101 SQ.FT.. OUT OF THAT, 88,106 SQ.FT. AREA WAS LEASED OUT AND RECEIVED RENT. IN THE RETURN FILED ORIGINALLY U/S 139 OF THE ACT, THE ASSESSEE OFFERED THE SAME AS BUSINESS INCOME OF THE ASSESSEE. SUBSEQUENTLY, THE ASSESSEE REVISED RETURN OF INCOME AND THE SAID INCOME WAS SHOWN AS INCOME FROM HOUSE PROPERTY. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REJECTED THE REVISED CLAIM OF THE ASSESSEE AND NOT ONLY HELD IT AS BUSINESS INCOME BUT ALSO EXTENDED EXTRAPOLATED THE NOTIONAL RENTAL INCOME TO THE BALANCE OF 32,955 SQ.FT TOO (TOTAL OF 1,21,101 SQ.FT.). IT IS THE CLAIM OF THE ASSESSEE THAT RENTAL INCOME SHOULD BE TAXED ON ACTUAL RECEIPT BASIS ONLY AND NOT ON NOTIONAL BASIS. AS PER THE ASSESSING OFFICER, THE RENTAL INCOME SHOULD BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND NOT UNDER THE HEAD PROFITS OR GAINS FROM BUSINESS OR PROFESSION. THE SAID ADDITION IS MADE BY THE ASSESSING OFFICER ON PROTECTIVE BASIS. 5. ON THIS ISSUE OF NOTIONAL RENTAL INCOME WITH RESPECT TO THE UNSOLD/UNLET AREA OF 32,955 SQ.FT. AND TAXATION OF SUCH INCOME UNDER THE 4 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 HEAD INCOME FROM HOUSE PROPERTY, BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE ISSUES NOW STAND COVERED IN FAVOUR OF THE ASSESSEE BY SERIES OF DECISIONS OF THIS TRIBUNAL AND ALSO THE SERIES OF JUDGEMENTS OF VARIOUS HIGH COURTS. REFERRING TO THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005-06 VIDE ITA NO.344/PUN/2010 AND OTHERS DATED 08.11.2017, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IDENTICAL ISSUE WAS ADJUDICATED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. COMING TO THE NOTIONAL RENT-ALV RELATABLE TO THE UNSOLD/UNLET AREAS WHICH WAS NEVER ACTUAL LET OUT, THE TRIBUNAL HELD THAT THE SAME IS NEVER CHARGEABLE TO TAX AS THE SAME CONSTITUTES ONLY UNREAL INCOME. HIGHLIGHTING THE DISALLOWANCES OR THE ADDITIONS ON PROTECTIVE BASIS, LD. AR SUBMITTED THAT THE CONSTRUCTION OF DIFFERENT IN AREA OF 32,955 SQ.FT., IT IS NOT YET FULLY COMPLETED. THEREFORE, THE LETTING OF THE SAME IN THE YEAR UNDER CONSIDERATION DOES NOT ARISE. 6. ON HEARING BOTH THE SIDES, WE FIND THE IDENTICAL ISSUE CAME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005- 06 VIDE ITA NO.344/PUN/2010 AND OTHERS DATED 08.11.2017 WHERE THE TRIBUNAL, FOR RENT OR NOTIONAL RENT, ADJUDICATED THE SIMILAR ISSUE AND DECIDED THE SAME IN FAVOUR OF THE ASSESSEE. THE CONTENTS OF PARA 44 TO 47 OF THE SAID ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) ARE RELEVANT AND THE SAME ARE EXTRACTED HEREUNDER :- 44. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE APPEAL FILED BY THE REVENUE IS AGAINST ASSESSABILITY OF RENTAL INCOME RECEIVED BY THE ASSESSEE IN RESPECT OF UNSOLD SHOPS IN THE KPCT PROJECT. THE ASSESSEE HAD CLAIMED THE SAID RENTAL INCOME UNDER THE HEAD INCOME FROM PROPERTY. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAME IS ASSESSABLE AS INCOME FROM BUSINESS. THE CIT(A) RELYING ON DIFFERENT DECISIONS OF THE APEX COURT 5 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 AND THE SPECIAL BENCH IN THE CASE OF ATMA RAM PROPERTIES (SUPRA), HELD THAT THE SAME IS ASSESSABLE AS INCOME FROM PROPERTY. THE APEX COURT IN SHAMBHU INVESTMENT PVT. LTD. VS. CIT (SUPRA) HAD LAID DOWN THE LAW OF LAND HOLDING THAT IF THE PRIMARY OBJECT OF THE ASSESSEE WHILE EXPLOITING THE PROPERTY WAS TO LET OUT THE SAME, THEN THE SAME IS TO BE CONSIDERED AS RENTAL INCOME OR INCOME FROM PROPERTY. HOWEVER, WHERE THE INTENTION WAS TO EXPLOIT IMMOVABLE PROPERTY BY WAY OF COMPLEX COMMERCIAL ACTIVITY, THEN IN THAT EVENT IT HAD TO BE HELD AS BUSINESS INCOME. SIMILAR PROPOSITION WAS LAID DOWN BY THE SPECIAL BENCH IN THE CASE OF ATMA RAM PROPERTIES (SUPRA). 45. WE FURTHER FIND THAT THE HONBLE HIGH COURT OF BOMBAY IN CIT VS. SANE & DOSHI ENTERPRISES (SUPRA) CONSIDERED THE CASE OF DEVELOPER, WHEREIN THE UNSOLD FLATS OR UNITS WERE GIVEN ON LEASE BY THE SAID FIRM, THE RENTAL INCOME RECEIVED FROM THE SAID UNSOLD FLATS OR UNITS WERE DECLARED AS INCOME FROM HOUSE PROPERTY. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE LEASING OF UNSOLD UNITS WAS NOTHING BUT A TRANSACTION TO GENERATE BUSINESS INCOME. THE CIT(A) AND THE TRIBUNAL ALLOWED THE CLAIM OF ASSESSEE, AGAINST WHICH THE REVENUE WAS IN APPEAL BEFORE THE HONBLE HIGH COURT OF BOMBAY. AFTER HEARING THE SUBMISSIONS OF ASSESSEE AND RELYING ON DIFFERENT DECISIONS, THE HONBLE HIGH COURT OF BOMBAY HELD THAT THE TREATMENT GIVEN IN THE BOOKS OF ACCOUNT BY THE ASSESSEE AS STOCK IN TRADE WOULD NOT, THEREFORE, ALTER THE CHARACTER OR NATURE OF THE INCOME AS HELD BY THE APEX COURT. THE HONBLE HIGH COURT HELD THAT THE SAID INCOME IS TO BE ASSESSED UNDER THE HEAD INCOME FROM PROPERTY IN THE HANDS OF ASSESSEE. 46. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE HONBLE HIGH COURT OF DELHI IN CIT VS. ANSAL HOUSING & CONSTRUCTION (SUPRA), WHERE THE LETTING OUT OF THE PROPERTY WAS NOT PART OF BUSINESS AND OBJECT OF THE ASSESSEE AND IN CASE THE SAME ASSETS ARE LET OUT, THEN THE SAME IS TO BE ASSESSED AS INCOME FROM PROPERTY. 47. APPLYING THE SAID PRINCIPLE LAID DOWN BY THE HONBLE HIGH COURT OF BOMBAY IN CIT VS. SANE & DOSHI ENTERPRISES (SUPRA) AND THE HONBLE HIGH COURT OF DELHI IN CIT VS. ANSAL HOUSING & CONSTRUCTION (SUPRA) AND ALSO THE SPECIAL BENCH OF TRIBUNAL AND THE APEX COURT IN EARLIER DECISIONS, WE HOLD THAT RENTAL INCOME RECEIVED BY THE ASSESSEE ON LETTING OUT UNSOLD SHOPS IS TO BE ASSESSED AS INCOME FROM PROPERTY IN THE HANDS OF ASSESSEE. THE CIT(A) HAS ALREADY DIRECTED THAT IN CASE ANY EXPENDITURE IN RELATION TO THE MARKETABILITY OF THE SAID UNSOLD SHOPS IS DEBITED BY THE ASSESSEE, THEN THE SAME IS NOT TO BE ALLOWED IN THE HANDS OF ASSESSEE, AGAINST WHICH THE ASSESSEE IS NOT IN APPEAL. IN VIEW THEREOF, WE FIND NO MERIT IN THE STAND OF THE ASSESSING OFFICER IN THIS REGARD. APPLYING THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF BOMBAY IN CIT VS. SANE & DOSHI ENTERPRISES (SUPRA), EVEN IF THE ASSET IS IN STOCK IN TRADE OF ASSESSEE, THEN TILL THE TIME IT IS UNSOLD AND HAS BEEN EXPLOITED BY LETTING OUT, THEN THE SAID INCOME IS TO BE ASSESSED IN THE HANDS OF ASSESSEE AS INCOME FROM PROPERTY. ACCORDINGLY, WE HOLD SO. UPHOLDING THE ORDER OF CIT(A), WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE BOTH IN ASSESSMENT YEARS 2007-08 AND 2008-09. 7. FROM THE ABOVE, IT IS EVIDENT THAT THE REAL RENTAL INCOME EARNED BY THE ASSESSEE OUT OF LETTING OF THE UNSOLD FLATS IS TAXABLE UNDER THE HEAD 6 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 INCOME FROM HOUSE PROPERTY AND THE SAME IS THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SANE & DOSHI ENTERPRISES, 377 ITR 165 (BOM) AND OTHERS. THEREFORE, CONSIDERING THE ABOVE SETTLED LEGAL PROPOSITION ON THIS ISSUE, WE ARE OF THE OPINION THAT THE GROUND NO.1 RAISED BY THE ASSESSEE IS SHOULD BE ALLOWED IN FAVOUR OF THE ASSESSEE. THUS, THE GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED . 8. GROUND NO.2 IS RAISED WITHOUT PREJUDICE TO THE GROUND NO.1. THE SAME IS ALLOWED IN FAVOUR OF THE ASSESSEE. THEREFORE, GROUND NO.2 IS DISMISSED AS ACADEMIC IN VIEW OF THE RELIEF GRANTED TO THE ASSESSEE IN GROUND NO.1 ABOVE. THUS, THE GROUND NO.2 IS DISMISSED . 9. GROUND NO.3 RELATES TO THE DISALLOWANCE OF EXPENSES RELATING TO THE MATERIAL PURCHASE AND LABOUR CHARGES. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME ARE ERRONEOUSLY DISALLOWED BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACTS THAT THE SAID EXPENSES WERE ALREADY CALCULATED AS PART OF THE WORK-IN-PROGRESS ACCOUNT, WHEREBY THESES EXPENSES STAND CAPITALIZED. THEREFORE, LD. COUNSEL SUBMITTED THAT THE SAID ADDITION MUST BE DELETED. 10. REFERRING TO THE REPAIR AND MAINTENANCE EXPENSES OF RS.21,58,647/-, LD. COUNSEL SUBMITTED THAT THESE ARE THE EXPENSES INCURRED IN CONNECTION WITH THE UNSOLD FLATS. THE ASSESSING OFFICER DISALLOWED THE SAME IN VIEW OF THE BONA-FIDE BELIEF THAT THE EXPENSES ARE NOT ALLOWABLE FOR THE REASON OF CLAIM OF DEDUCTION ALLOWED U/S 24 OF THE 7 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 ACT IN RESPECT OF FLATS RENTED OUT WHICH EARNED THE RENTAL INCOME. HOWEVER, THE ASSESSING OFFICER AND THE CIT(A) DID NOT APPRECIATE THE FACT THAT THE IMPUGNED REPAIR AND MAINTENANCE EXPENSES RELATE TO THE UNSOLD FLATS WHICH WERE NEVER RENTED OUT. THEREFORE, THESE REPAIR AND MAINTENANCE EXPENSES ARE NOT DISALLOWABLE. FURTHER, LD. AR ON THE ABOVE REFERRED FACTS AND ARGUMENTS, SUBMITTED THAT THE SAID ISSUE MAY BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THE SAID PRAYER OF THE ASSESSEE APPEARS TO BE FAIR AND REASONABLE. ACCORDINGLY, WE ORDER. THE ASSESSING OFFICER SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE ON THIS ISSUE AND EXAMINE THE CLAIM OF THE ASSESSEE BEFORE PASSING A SPEAKING ORDER ON THE MATTER OF APPRECIATION. IN THE REMAND PROCEEDINGS, ASSESSING OFFICER SHALL EXAMINE THE ABOVE CITED ARGUMENTS. ACCORDINGLY, GROUND NO.3 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 11. GROUNDS NO.4 AND 5 RELATE TO THE DISALLOWANCE U/S 14A OF THE ACT. DEVIATING FROM THE MAIN ARGUMENTS IN THE SAID GROUNDS, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE U/S 14A OF THE ACT NEEDS TO BE RESTRICTED TO THE TOTAL EXEMPT INCOME OF RS.6,750/- WHICH IS EARNED DURING THE YEAR AND FORMED PART OF THE TOTAL INCOME OF THE ASSESSEE. IN THIS REGARD, LD. COUNSEL RELIED ON THE VARIOUS JUDICIAL DECISIONS IN SUPPORT OF THE CLAIM. 12. ON HEARING BOTH THE SIDES ON THIS ISSUE AND CONSIDERING THE SETTLED NATURE OF THE ISSUE, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER SHOULD BE DIRECTED TO RESTRICT THE DISALLOWANCE TO THE SAID SUM OF 8 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 RS.6,750/- ONLY. ACCORDINGLY, WE ORDER. THUS, THE GROUNDS NO.4 AND 5 ARE PARTLY ALLOWED . 13. GROUND NO.6 RELATES TO THE DENYING OF DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT. 14. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS IDENTICAL TO ONE ALREADY ADJUDICATED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012-13 VIDE ITA NO.2225/PUN/2016 DATED 28.03.2019 AND THE CONTENTS OF PARA 13 AND 14 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA) ARE RELEVANT IN THIS REGARD. 15. ON HEARING BOTH THE SIDES, WE FIND IDENTICAL ISSUE CAME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012-13 (SUPRA) AND THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE CONTENTS OF PARA 13 AND 14 OF THE SAID ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) ARE RELEVANT AND THE SAME ARE EXTRACTED HEREUNDER :- 13. GROUND NOS. 6 AND 7 RELATES TO DENIAL OF DEDUCTION/PROPORTIONATE DEDUCTION CLAIMED U/S.80IB(10) OF THE ACT. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THESE GROUNDS ARE COVERED IN FAVOUR OF THE ASSESSEE IN EARLIER YEARS AS PER THE TRIBUNALS ORDER IN ASSESSEES OWN CASE IN ITA NO.344/PUN/2010 FOR THE ASSESSMENT YEAR 2005-06. 14. WE HAVE PERUSED THE CASE RECORDS AND HAVE GIVEN CONSIDERABLE THOUGHT TO THE DECISION PLACED BEFORE US. IN ITA NO.344/PUN/2010 FOR THE ASSESSMENT YEAR 2005-06, THE ASSESSEE HAS RAISED THIS ISSUE BEFORE TRIBUNAL IN THE GROUND OF APPEAL WHICH IS AS UNDER: 1. THE LEARNED CIT(A)-II, PUNE ERRED IN LAW AND FACTS IN DISMISSING THE APPEAL OF THE APPELLANT AND IN HOLDING THAT THE APPELLANT IS NOT ELIGIBLE TO CLAIM DEDUCTION OF RS.1,70,96,381/- U/S.80IB (10) OF THE ITA, 1961. HE OUGHT TO HAVE CONSIDERED THE FACTS ON PROPER MERITS. THE CO-ORDINATE BENCH OF THE PUNE TRIBUNAL WITH REGARD TO THIS ISSUE HAS HELD AS UNDER: 9 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 11. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN ITA NOS.234/PUN/2009 AND 569/PUN/2009, RELATING TO ASSESSMENT YEARS 2003-04 AND 2004-05 AND VIDE ORDER DATED 22.03.2017, THE ASSESSEE WAS HELD TO BE ENTITLED TO PROPORTIONATE DEDUCTION UNDER SECTION 80IB (10) OF THE ACT IN RESPECT OF UNITS WHICH FULFILS THE CONDITIONS LAID DOWN OF HAVING BUILT UP AREA OF 1500 SQ.FT. 12. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FAIRLY ADMITTED THAT SIMILAR ISSUE WAS RAISED IN ASSESSMENT YEARS 2003-04 AND 2004-05 IN RESPECT OF PARMAR GARDEN PROJECT, WHICH HAS BEEN DECIDED BY THE TRIBUNAL. 13. FOLLOWING THE SAME PARITY OF REASONING, AS IN THE ORDERS OF TRIBUNAL IN EARLIER YEARS, WE HOLD THAT THE ASSESSEE IS ENTITLED TO PRORATA DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. ACCORDINGLY, WE HOLD SO. THE FIRST ISSUE RAISED BY THE ASSESSEE BY WAY OF GROUNDS OF APPEAL NO.1 TO 3 IS THUS, ALLOWED. RESPECTFULLY, FOLLOWING THE AFORESAID DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL, WE ALLOW GROUND NO. 6 AND 7 OF APPEAL OF THE ASSESSEE. 16. ALLOWABILITY OF THE PRO-RATA DEDUCTION U/S 80IB(10) OF THE ACT IS A DECIDED ISSUE IN THE OWN CASE OF THE ASSESSEE IN EARLIER YEARS. CONSIDERING THE ABOVE SETTLED LEGAL NATURE OF THIS ISSUE, WE FIND THE ORDER OF THE CIT(A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. THUS, THE GROUND NO.6 IS ALLOWED . 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 18. NOW, WE SHALL TAKE UP THE APPEAL OF THE REVENUE FOR ADJUDICATION IN THE FOLLOWING PARAGRAPHS. ITA NO.1838/PUN/2014 BY REVENUE 19. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER :- 10 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT THE RENT RECEIVED BY THE ASSESSEE IN RESPECT OF THE BUILDING HELD AS STOCK-IN-TRADE COULD ONLY BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY, AS HAD BEEN SHOWN BY THE ASSESSEE IN ITS RETURN OF INCOME, AND NOT UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, AS HAD BEEN ASSESSED BY THE ASSESSING OFFICER. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN FAILING TO APPRECIATE THAT AS THE FACTS AND CIRCUMSTANCES PERTAINING TO THE CASE WOULD CLEARLY SHOW, THE INTENTION OF THE ASSESSEE WAS TO LET OUT OF THE BUILDING HELD AS STOCK-IN-TRADE FOR THE PURPOSE OF BUSINESS AS ALSO FOR ITS COMMERCIAL EXPLOITATION; AND, IN THE CIRCUMSTANCES, THE RENTAL INCOME DERIVED BY THE ASSESSEE FROM THE SAID BUILDING WAS CLEARLY ASSESSABLE UNDER THE HEAD BUSINESS AND NOT UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 3. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT (APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 20. THE GROUNDS NO.1 AND 2 RELATES TO THE PROPER HEAD OF INCOME FOR ASSESSING THE RENTAL INCOME EARNED FROM LETTING OF THE UNSOLD FLATS OF THE ASSESSEE. 21. CONSIDERING THE RELIEF GRANTED TO THE ASSESSEE ON THIS ISSUE IN GROUND NO.1 IN ASSESSEES APPEAL VIDE ITA NO.1838/PUN/2014 (ABOVE), WE FIND THE ADJUDICATION OF THESE GROUNDS NO.1 AND 2 OF THE REVENUE BECOMES INFRUCTUOUS. WE ALREADY HELD THAT THE HEAD OF INCOME I.E. INCOME FROM HOUSE PROPERTY IS THE PROPER HEAD AND FOLLOWED THE RULE OF CONSISTENCY IN THIS REGARD. THEREFORE, THE GROUNDS NO.1 AND 2 OF THE REVENUE ARE DISMISSED. 22. GROUNDS NO.3 AND 4 BEING GENERAL IN NATURE ARE DISMISSED AS SUCH. 11 ITA NO.1838/PUN/2014 ITA NO.1908/PUN/2014 23. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 24. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 03 RD DAY OF SEPTEMBER, 2019. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 03 RD SEPTEMBER, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-II, PUNE. 4. THE CCIT, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.