Assistant Commissioner of Income-tax, V. M/s. Atharwa Builders & Developers, Aurangabad

ITA 1848/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8553 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-08-2018
• Assessment Year: 2007-2008
• Appeal Filed On: 26-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Retrospective amendment; Valuation report
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NOS.1848 & 1849/PUN/2016 / ASSESSMENT YEARS : 2007-08 & 2008-09 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3, AURANGABAD. ....... / APPELLANT / V/S. M/S. ATHARWA BUILDERS & DEVELOPERS, 11-12, ATHARWA PLAZA, VENKATESH MANGAL KARYALAY, GARKHEDA, AURANGABAD-431 005 PAN :AALFA8629G / RESPONDENT ASSESSEE BY : SMT. DEEPA KHARE REVENUE BY : SHRI PANKAJ GARG / DATE OF HEARING : 31.12.2018 / DATE OF PRONOUNCEMENT : 01.01.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THESE TWO APPEALS PREFERRED BY THE REVENUE EMANATES FROM THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEA LS)-2, AURANGABAD DATED 09.06.2016 FOR ASSESSMENT YEARS 2007-08 AND 2008-09, AS P ER GROUNDS OF APPEAL ON RECORD. 2 ITA NOS.1848 & 1849/PUN/2016 A.YS.2007-08 & 2008-09 2. THESE CASES WERE HEARD TOGETHER AND SINCE ISSUES C OMMON, FACTS SIMILAR, THEY ARE DISPOSED OF VIDE THIS CONSOLIDATED ORDER. TH OUGH THE REVENUE HAS TAKEN MULTIPLE GROUNDS OF APPEAL, THE CRUX O F THE GRIEVANCE IN BOTH THE ASSESSMENT YEARS IS DELETION OF THE ADDITIONS MA DE BY THE ASSESSING OFFICER DISALLOWING DEDUCTION U/S.80IB(10) OF THE INCOME TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. ASSESSMENTS WERE COMPLETED U/S.143(3) R.W.S. 147 OF THE ACT. THE LD. CIT(APPEALS) HAS PROVIDED RELIEF TO THE ASSESSEE BY DELETING ADDITIONS WITH REGARD TO DEDUCTION U/S.80IB(10) OF THE ACT. 4. THE LD. AR FOR THE ASSESSEE APPRAISED THE BENCH AT THE TIME OF HEARING THAT IN PARA 22 OF THE CIT(APPEALS)S ORDER FOR ASSESSMEN T YEAR 2007-08, THE ENTIRE CRUX OF THE MATTER IS WELL DEFINED AND DISCUSSED AND THEREBY, RELIEF PROVIDED TO THE ASSESSEE BY THE FIRST APPELLATE AUTHORI TY. THE RELEVANT PORTION OF THE LD. CIT(APPEALS)S ORDER IS AS UNDER: 22. THE ASSESSING OFFICER HAS STATED IN EXPLICIT TE RMS THAT HE IS RELYING ON THE PROVISIONS OF CLAUSE-(A) OF SECTION 80IB(14) , AND RELYING ON THE REPORT OF THE DEPARTMENT OF VALUATION OFFICER DATED 27.10.2014 WHEREIN THE AREAS OF BALCONIES, BOXES, PROJECTIONS AND TERR ACE ADJOINING TO THE STAIRCASE AT GROUND FLOOR AND FIRST FLOOR WERE ALSO INCLUDED WHILE ARRIVING AT THE MAXIMUM BUILT UP AREA CONTEMPLATED IN CLAUSE -(C) OF SECTION 80IB(10). THE DEPARTMENTAL VALUATION OFFICER VIDE H IS LETTER DATED 19.02.2015 ADDRESSED TO THE ASSESSING OFFICER HAS S PECIFIED THAT IN THE VALUATION REPORT ISSUED BY HIS OFFICE ON 27.10.2014 THE BUILT UP AREA WAS CALCULATED INCLUDING COVERED AREAS OF BALCONIES, BO XES, PROJECTIONS AND TERRACE. IN THE REPORT DATED 19.02.2015, THE DEPART MENTAL VALUATION OFFICER HAS EXCLUDED THE AREAS OF BALCONIES, PROJEC TIONS, BOXES AND TERRACE WHILE CALCULATING THE BUILT UP AREA OF THE ROW-HOUSES. IT IS NOTEWORTHY THAT THE ASSESSING OFFICER HAS NOT TAKEN INTO CONSIDERATION THE SECOND REPORT DATED 19.02.2015 SUBMITTED BY THE DEPARTMENT VALUATION OFFICER. IN FACT, THE ASSESSING OFFICER H AS NOT EVEN TAKEN INTO COGNIZANCE THE DIRECTION GIVEN BY THE LEARNED CIT, AURANGABAD IN PARA 3.4 OF THE ORDER PASSED U/S.263 WHEREIN HE HAS CATE GORICALLY STATED THAT THE DEFINITION OF BUILT UP AREA HAS BEEN INSERTED IN SECTION 80IB(14) WITH EFFECT FROM 01.04.2005 AND BECAUSE THE PROJECT IN QUESTION HAS GOT APPROVAL ON 06.12.2004 I.E. BEFORE THE AMENDMENT, T HE AREA OF BALCONY AND PROJECTIONS WILL NOT BE INCLUDED IN CALCULATING THE TOTAL BUILT UP AREA. THE ASSESSING OFFICER HAS NOT FOLLOWED THIS DIRECTI ON GIVEN BY THE LEARNED CIT, AURANGABAD. IT HAS BEEN DECIDED BY THE HON'BLE KARNATAKA HIGH 3 ITA NOS.1848 & 1849/PUN/2016 A.YS.2007-08 & 2008-09 COURT THAT THE AMENDMENT WITH RESPECT TO BUILT UP A REA IS A SUBSTANTIVE AMENDMENT AND NOT A CLARIFICATORY ONE. ACCORDINGLY, SAME HAS NO RETROSPECTIVE EFFECT. HENCE, IN VIEW OF THE DISCUSS ION ABOVE, I HOLD THAT IN THE INSTANT CASE, FOR THE PURPOSES OF COMPUTING THE MAXIMUM BUILT UP AREA APPEARING IN CLAUSE (C) OF SECTION 80IB(10), THE AREA COVERED BY BALCONY, TERRACE, BOXES AND PROJECTIONS AS APPEARIN G IN CLAUSE (A) OF SECTION 80IB(14) HAS TO BE EXCLUDED. IT IS EVIDENT THAT AFTER THE EXCLUSION OF THE AREAS COVERED BY BALCONY, TERRACE, BOX AND P ROJECTIONS THE BUILT UP AREA OF ALL THE ROW-HOUSES CONSTRUCTED BY THE ASSESSEE DOES NO T EXCEED 1500 FT IN AREA. HENCE, IT IS TO BE CONCLUDED THAT THE ASSESSEE HAS FULFILLED THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE ACT. THEREFORE, THE A SSESSING OFFICER IS DIRECTED TO ALLOW THE DEDUCTION CLAIMED U/S. 80IB (10) OF THE ACT TO THE ASSESSEE. GROUND NO.2 IS ALLOWED. 5. WE HAVE PERUSED THE CASE RECORDS, HEARD THE RIVAL CONTENTIONS AND ANALYZED THE FACTS AND CIRCUMSTANCES IN THE CASE. THE ISSUE IN QUESTION IS WHETHER THE AMENDMENT REGARDING DEFINITION OF BUILT UP ARE A WHICH HAS BEEN INSERTED IN SECTION 80IB (14) WITH EFFECT FROM 01.04.2005 AND BECAUSE THE PROJECT IN QUESTION HAS GOT APPROVAL ON 06.12.2004 I.E. BEFO RE THE AMENDMENT WHETHER THE RIGOURS OF SUCH AMENDMENT WILL HAVE EFFECT ON THE PROJECT WHICH GOT APPROVAL EVEN PRIOR TO THE SAID AMENDMENT. WE FIND T HAT THE LD. CIT(APPEALS) HAS FOLLOWED THE VIEW OF HON'BLE KARNATAKA HIGH COURT THAT THE AMENDMENT WITH RESPECT TO BUILT UP AREA IS A SUBSTANTIVE AMENDMENT AND NOT A CLARIFICATORY ONE. THEREFORE, IT DOES NOT HAVE ANY RE TROSPECTIVE EFFECT. MEANING THEREBY, WHATEVER WAS NOT INCLUDED IN THE DEFINITION OF BUILT UP AREA PRIOR TO 01.04.2005 CANNOT BE INSERTED SINCE THE P ROJECT VIZ. GOT APPROVAL ON 06.12.2004 I.E. BEFORE THE AMENDMENT CAME INTO EFFECT. THIS IS THE GROUND IN WHICH LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE. FACTUALLY ALSO, WE FIND THAT AS ON RECORD, THE ASSESSING OFFICER HAS STATED IN EXPLICIT TERMS THAT HE IS RELYING ON THE PROVISIO NS OF CLAUSE (A) OF SECTION 80IB(14) AND RELYING ON THE REPORT OF THE DEPART MENT OF VALUATION OFFICER DATED 27.10.2014 WHEREIN THE AREAS OF BALCONIES, BOX ES, PROJECTIONS AND TERRACE ADJOINING TO THE STAIRCASE AT GROUND FLOOR A ND FIRST FLOOR WERE ALSO INCLUDED WHILE ARRIVING AT THE MAXIMUM BUILT UP AREA CONTEMP LATED IN CLAUSE 4 ITA NOS.1848 & 1849/PUN/2016 A.YS.2007-08 & 2008-09 (C) OF SECTION 80IB(10). THE DEPARTMENT VALUATION OFFICER VIDE HIS LETTER DATED 19.02.2015 ADDRESSED TO THE ASSESSING OFFICER HAS S PECIFIED THAT IN THE VALUATION REPORT ISSUED BY HIS OFFICE ON 27.10.2014, THE BUILT UP AREA WAS CALCULATED INCLUDING COVERED AREAS OF BALCONIES, BOXES, PRO JECTIONS AND TERRACE. IN THE REPORT DATED 19.02.2015, THE DEPARTMENT AL VALUATION OFFICER HAS EXCLUDED THE AREAS OF BALCONIES, PROJECTIONS, BOXES AN D TERRACE WHILE CALCULATING THE BUILT UP AREA OF THE ROW-HOUSES. THE ASSES SING OFFICER HAS NOT TAKEN INTO CONSIDERATION SECOND REPORT DATED 19.02.2015 SUBMITTED BY THE DEPARTMENTAL VALUATION OFFICER. IN FACT, THE ASSESSING OFFICER HAS NOT EVEN TAKEN INTO COGNIZANCE THE DIRECTION GIVEN BY THE LD. CIT(A ), AURANGABAD IN PARA 3.4 OF THE ORDER PASSED U/S.263 OF THE ACT WHEREIN HE HAS CATEGORICALLY STATED THAT THE DEFINITION OF BUILT UP AREA HAS BEEN INS ERTED IN SECTION 80IB(14) W.E.F. 01.04.2005 AND BECAUSE THE PROJECT IN QUES TION HAS GOT APPROVAL ON 06.12.2004 I.E. BEFORE THE AMENDMENT, THE AREA OF BALCONY AND PROJECTIONS WILL NOT BE INCLUDED IN CALCULATING THE TOTAL BUILT UP AREA. IT IS ON THIS BACKGROUND, THE CIT(A) HAS HELD THAT FOR THE PURPOSE S OF COMPUTING THE MAXIMUM BUILT UP AREA APPEARING IN CLAUSE-(C) OF SECTION 8 0IB(10), THE AREA COVERED BY BALCONY, TERRACE, BOX AND PROJECTIONS AS APP EARING IN CLAUSE (A) OF SECTION 80IB(14) HAS TO BE EXCLUDED. AFTER THE EXCLUSION OF THE AREAS COVERED BY BALCONY, TERRACE, BOX AND PROJECTIONS THE BUILT UP A REA OF ALL THE ROW- HOUSES CONSTRUCTED BY THE ASSESSEE DOES NOT EXCEED 1500SQ.FT. IN AREA. HENCE, THE ASSESSEE HAS FULFILLED THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE ACT AND THE SAME WAS ALLOWE D BY THE LD. CIT(APPEALS). THAT EVEN AS PER THE LEGAL PARAMETERS OPINED BY THE HON'BLE KARNATAKA HIGH COURT AS ON RECORD, IT IS VERY MUCH CLEAR THAT THE PROJECTIONS WHATEVER WAS TAKEN PRIOR TO THE AMENDMENT IN DEFINITION O F BUILT UP AREA WHICH GOT INSERTED IN SUB SECTION (A) OF SECTION 80IB, WH ICH CAME INTO EFFECT FROM 01.04.2005, THE RIGORS OF THE AMENDMENT CANNOT BE AP PLIED 5 ITA NOS.1848 & 1849/PUN/2016 A.YS.2007-08 & 2008-09 RETROSPECTIVELY TO PUT THE ASSESSEE IN JEOPARDY. ACCOR DINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(APPEALS) AND THEREFORE, RELIEF GRANTED BY CIT(APPEALS) TO THE ASSESSEE IS SUSTAINED. ACCORDINGLY, G ROUNDS OF APPEAL RAISED BY REVENUE FOR THE ASSESSMENT YEAR 2007-08 ARE DISMISSED . 6. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO.1848/PU N/2016 IS DISMISSED. 7. SINCE THE FACTS ARE SIMILAR AND ISSUES ARE COMMON IN IT A NO.1849/PUN/2016, THE DECISION TAKEN BY US IN ITA NO.1848 /PUN/2016 SHALL ALSO BE APPLIED FOR ITA NO.1849/PUN/2016. 8. IN COMBINED RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSE D. ORDER PRONOUNCED ON 1 ST DAY OF JANUARY, 2019. SD/- SD/- D. KARUNAKARA RAO PARTHA SARAT HI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 1 ST JANUARY, 2019. SB !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-2, AURANGABAD. 4. THE PR. CIT-2, AURANGABAD. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 6 ITA NOS.1848 & 1849/PUN/2016 A.YS.2007-08 & 2008-09 DATE 1 DRAFT DICTATED ON 31 .12.2018 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 01.01 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER