Deputy Commissioner of Income-tax, Circle - 14, Pune V. M/s. Marigold Premises Pvt.Ltd, Pune

ITA 1874/PUN/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6191 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-09-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 01-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Business income
• Section: 143(3); 13

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE ( THROUGH VIRTUAL COURT) BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT (KZ) AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER . / ITA NO.1874/PUN/2017 / ASSESSMENT YEAR: 2012-13 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 14, PUNE. . / APPELLANT. V/S M/S. MARIGOLD PREMISES PVT. LTD., S.NO.15, VADGAONSHERI, KALYANI NAGAR, PUNE 411014. PAN : AABCM2608J. . / RESPONDENT ASSESSEE BY : SHRI DHARMESH SHAH. REVENUE BY : SHRI S.P. WALIMBE. / ORDER PER SHRI PARTHA SARATHI CHAUDHURY, JM: THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM TH E ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 7, PUNE D ATED 21.11.2016 FOR A.Y. 2012-13 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE HON'BLE CIT(A) WAS JUSTIFIED IN ALLOWING THE DEDUCT ION U/S 80IA(4)(III) OF THE I.T. ACT, 1961, WHEN THERE WAS NO NOTIFICATION AT THE TIME OF COMPLETION OF THE ASSESSMENT (THE NOTIFIC ATION NO. 209/2007/F.NO.178/78/2007-ITA-I OF CBDT HAS BEEN AC TUALLY ISSUED ON 03/07/2007).' / DATE OF HEARING : 2 4 .09. 2020 / DATE OF PRONOUNCEMENT : 25 .0 9 .2020 2 2) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE HON'BLE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE A SSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IA(4)(III) OF THE I.T.ACT, 19 61 THOUGH THE SPECIFIC CONDITION IN THE NOTIFICATION PERTAINING TO THE ASSESSEE REGARDING THE NUMBER OF UNITS WAS NOT FULFILL ED.' 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE HON'BLE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSE SSEE IS ELIGIBLE FOR DEDUCTION U/ S 80IA(4)(III) OF THE I.T.ACT, 1961 WHILE THE CONDITION THAT ASSESSEE SHOULD HAVE COMMENCED OP ERATION AS ON 31.03.2009, IS VIOLATED. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE HON'BLE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSE SSEE IS ELIGIBLE FOR DEDUCTION U/S 80IA(4)(III) OF THE I.T.ACT, 196 1 WHILE THE CONDITION THAT NO SINGLE ENTITY OR ITS RELATED ENTE RPRISE CAN OCCUPY MORE THAN 25% OF THE ALLOCABLE AREA WAS VIOLA TED.' 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE HON'BLE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSE SSEE IS ELIGIBLE FOR DEDUCTION IS] S 80IA(4)(III) OF THE I.T.ACT, 1961 WHILE THE CONDITION THAT MINIMUM NUMBER OF 30 UNITS SHOULD BE OPERATIONAL FOR AVAILING THE BENEFIT WAS NOT MET SINCE BY 31.03.2010 ONLY 16 UNITS WERE OPERATIONAL.' 2. THE ISSUE IN QUESTION IN THIS APPEAL IS WITH REGARD TO T HE ALLOWABILITY OF DEDUCTION U/S 80IA(4)(III) OF THE ACT. 3. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE HA D CLAIMED DEDUCTION UNDER SEC.80IA(4)(III) OF THE ACT FOR THE FIRST TIME IN A.Y. 2003-04 AND HAD SINCE CLAIMED IT FOR ALL THE SUBSEQUENT Y EARS. THE YEAR UNDER CONSIDERATION I.E., A.Y. 2012-13 IS THE LAST YEAR OF ITS CLAIM. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT T HE CLAIM OF THE ASSESSEE WAS REJECTED IN FIRST TWO YEARS I.E., 2003-04 AND 2004-05. IN THE FIRST YEAR, ASSESSEE HAD LOST THE APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), BEFORE ITAT, PUNE A ND WAS IN APPEAL BEFORE THE HONBLE MUMBAI HIGH COURT AND THE DECIS ION IS PENDING. THE SUBSEQUENT YEARS I.E., IN A.YS. 2005-06 TO 2 009-10, THE CLAIM OF THE ASSESSEE WAS ALLOWED. AGAIN IN A.YS. 2010-11 AND 2011-12, 3 THE ACIT, CIRCLE-11(2), PUNE HAD REJECTED THE CLAIM OF DED UCTION UNDER SEC.80IA(4)(III) OF THE ACT. 4. THAT IN THE RELEVANT YEAR, THE ASSESSEE HAD SUBMITTE D FORM 10CCB AND ALSO SUBMITTED DETAILS OF SEPARATE ACCOUNTS BE ING MAINTAINED FOR THE RENTAL INCOME PERTAINING TO SOFTWARE PAR K AND BUSINESS INCOME IN RESPECT OF DEVELOPMENT ACTIVITY. THE DETAILED WORKING OF DEDUCTION CLAIMED HAS BEEN FURNISHED BEFORE THE LEARNED ASSESSING OFFICER. THE LEARNED ASSESSING OFFICER OBSERVED TH AT THE ASSESSEE IN FORM 10CCB HAS STATED THAT THE CONSTRUCT ION WAS COMPLETED IN PHASES IN 2002, 2003, 2004 AND 2005. ORIGINAL P ROPOSED UNITS WERE 30 AND THEN REVISED TO 105. IN THE APPLICATIO N FORM, THE PROPOSED COMMENCEMENT WAS MENTIONED AS DECEMBER, 2003 WHEN THE ASSESSEE MADE A CLAIM UNDER SEC.80IA(4)(III) FOR THE FIRST TIME IN A.Y. 2003-04. THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION UN DER SEC.80IA(4)(III) IN THE FIRST YEAR AND THIS WAS CONFIRMED THEREAFT ER IN THE TWO APPELLATE STAGES. THAT ON THIS PREMISE, THE LEARNED A SSESSING OFFICER DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE UN DER SEC.80IA(4)(III) OF THE ACT FOR A.Y. 2012-13. 5. THAT BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) DETAILED SUBMISSIONS WERE FILED BY THE ASSESSEE AND THE FIRS T APPELLATE AUTHORITY AFTER CONSIDERING THE ASSESSMENT ORDER AND TH E SUBMISSIONS OF THE ASSESSEE PRIMARILY RELIED ON THE DECISION OF HONBLE SUPREME COU RT IN THE CASE OF DCIT VS. GANESH HOUSING CORPORATION LIMITE D REPORTED AT 25 TAXMANN.COM 305 (SC) AND HELD THAT THE ASSESSE E HAS FULFILLED ALL THE CONDITIONS IN ORDER TO CLAIM DEDUCTION UNDER SEC.8 0IA(4)(III) OF 4 THE ACT. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALSO OBSERVED THAT THE ASSESSEE HAD CLAIMED DEDUCTIONS UNDE R THE SAID PROVISION IN A.YS. 2005-06 TO 2009-10 WHICH WERE ALLOWED BY THE LEARNED ASSESSING OFFICER. FURTHER, IN A.Y. 2011-12 WHICH IS THE IMMEDIATE PRECEDING YEAR, THE CLAIM OF DEDUCTION UNDER SEC.8 0IA(4)(III) HAS BEEN ALLOWED BY LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) AND THEREFORE, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR A.Y. 2012- 13 ALSO ALLOWED DEDUCTION UNDER SEC.80IA(4)(III) OF THE ACT THE FACTS AND CIRCUMSTANCES BEING IDENTICAL. AT THE TIME OF HEARING, THE LEARNED AUTHORISED REPRESENTATIVE APPRAISED THE BENCH THAT FOR THE PRECEDING ASSESSMENT YEAR 2011-12 IN ASSESSEES OWN CASE IN THE APPEAL PREFERRED BY THE REVENUE BEFORE ITAT, PUNE BENCHES, THE PUNE TR IBUNAL HAD DISMISSED THE APPEAL AND SUSTAINED THE RELIEF PROVIDED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TO THE ASSESSEE. TH E LEARNED AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THAT THE FAC TS AND CIRCUMSTANCES ARE ABSOLUTELY IDENTICAL FOR THIS YEAR ALSO A ND THEREFORE, THE DEDUCTION ALLOWED IN THE PRECEDING YEAR I.E., A.Y. 2011-12 SHOULD ALSO BE ALLOWED IN THIS RELEVANT YEAR ALSO. 6. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE PLACED STRONG RELIANCE ON THE ORDER OF THE LEARNED ASSESSING OFFICER. 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE CASE RECORDS AND ANALYZED THE JUDICIAL PRONOUNCEMENTS PLACED BEFORE US. T HAT ON RECORDING THE SUBMISSIONS OF LEARNED AUTHORISED REPRESENT ATIVE AND FROM THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS), WE FIND THAT IN THE PRECEDING YEAR I.E., A.Y. 2011-12, THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE HAD GIVE N RELIEF TO 5 THE ASSESSEE AND ON AN APPEAL BY THE REVENUE BEFORE T HE PUNE TRIBUNAL THE RELIEF WAS SUSTAINED. THE RELEVANT PORTION OF THE DEC ISION OF PUNE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2011-12 IN I.T.A.NO.1345/PUN/2016 IS EXTRACTED HEREUNDER : WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E RECORD. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS ENGAGED IN THE DEVELOPMENT, SALE, LEASE AND MAINTENANCE OF PROPERTY FOR RESIDENTIAL A ND COMMERCIAL PURPOSE AND ALSO IN THE DEVELOPMENT OF SOFTWARE PAR K. THE ASSESSEE OWNED TWO UNDERTAKINGS CARRYING ON DEVELOPMENT, MAI NTENANCE AND OPERATION OF INDUSTRIAL PARK AND DEVELOPMENT OF RES IDENTIAL AND COMMERCIAL COMPLEXES. THE ASSESSEE HAD MAINTAINED S EPARATE BOOKS OF ACCOUNT FOR BOTH THE UNDERTAKINGS. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IA(4)(III) OF THE ACT IN RESPECT OF INCOME FROM DEVELOPMENT, MAINTENANCE AND OPERATION OF INDUSTRIAL PARK AS PER INDUSTRIAL PARK SCHEME (IPS), 2002. THE ASSESSEE WAS DENIED DEDUCTI ON UNDER SECTION 80IA(4) OF THE ACT BY THE TRIBUNAL IN ASSESSMENT YE AR 2003-04 IN ITA NO.723/PN/2007, VIDE ORDER DATED 27.07.2011. THE CO PY OF SAID ORDER IS PLACED AT PAGES 79 TO 81 OF PAPER BOOK. THE HONBLE BOMBAY HIGH COURT IN ITA NO.484 OF 2012 VIDE ORDER DATED 26.03.2013 H AS ADMITTED THE APPEAL OF ASSESSEE, WHICH IS PENDING FOR DISPOSAL, COPY OF SAID ORDER IS PLACED AT PAGES 82 AND 83 OF PAPER BOOK. THEREAFTER , ASSESSMENT FOR ASSESSMENT YEAR 2004-05 WAS COMPLETED UNDER SECTION 143(3) OF THE ACT AND DEDUCTION CLAIMED WAS DENIED. THE TRIBUNAL IN I TA NO.536/PN/2012, VIDE ORDER 26.11.2014 HAS UPHELD TH E ADDITION, HOWEVER, DIRECTED THE ASSESSING OFFICER TO FOLLOW T HE DECISION OF HONBLE BOMBAY HIGH COURT IN VIEW OF DECLARATION FILED BY T HE ASSESSEE UNDER SECTION 158A(1) OF THE ACT. MEANWHILE, THE ASSESSME NT ORDER UNDER SECTION 143(3) OF THE ACT WAS COMPLETED FOR ASSESSM ENT YEAR 2005-06 ON 28.12.2007. THE COPY OF SAID ORDER IS PLACED AT PAG ES 112 TO 118 OF THE PAPER BOOK. THE ASSESSING OFFICER NOTES THAT THE UN DERTAKING HAD TO BE APPROVED BY THE MINISTRY OF COMMERCE & INDUSTRIES I N THE CENTRAL GOVERNMENT. THE TERMS AND CONDITIONS OF THE SCHEME WERE AMENDED AND THE ASSESSEE HAD COMPLIED WITH ALL CONDITIONS IN AS SESSMENT YEAR 2005- 06, RELATING TO NOTIFICATION OF CBDT FOR THE FIRST TIME. THE ASSESSING OFFICER VIDE PARA 5 ALSO NOTES THE RECORDS FOR ASSESSMENT Y EARS 2003-04 AND 2004-05. SINCE THE ASSESSEE HAD SATISFIED THE REQUI REMENT REGARDING NUMBER OF UNITS AFTER THE SAME WAS ADOPTED AT 105, THE ASSESSING OFFICER HELD THE ASSESSEE TO HAVE SATISFIED THE CONDITIONS FOR ASSESSMENT YEAR 2005-06. CONSEQUENTLY, THE ASSESSING OFFICER ALLOWE D DEDUCTION UNDER SECTION 80IA(4)(III) OF THE ACT TO THE ASSESSEE AS PER CLAUSE (6) OF IPS, 2002. THEREAFTER, THE ASSESSING OFFICER UNDER SECTION 143 (3) OF THE ACT, ORDER DATED 31.03.2010 FOR ASSESSMENT YEAR 2007-08 AND VI DE ORDER DATED 22.10.2011 FOR ASSESSMENT YEAR 2009-10 ALLOWED THE DEDUCTION CLAIMED UNDER SECTION 80IA(4)(III) OF THE ACT. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2011-12 HAD CLAI MED THE DEDUCTION UNDER SECTION 80IA(4)(III) OF THE ACT AT 62,38,339/- FOR WHICH FORM NO.10CCB WAS FILED. THE COPY OF THE SAME IS PLACED ON RECORD AT PAGES 127 TO 132 OF THE PAPER BOOK. HOWEVER, THE ASSESSIN G OFFICER DENIED THE CLAIM OF DEDUCTION TO THE ASSESSEE ON THE GROUND TH AT IT WAS NOT CLEAR FROM THE COMPUTATION OF INCOME WHETHER THE ASSESSEE HAD DERIVED ANY INCOME FROM THE ELIGIBLE BUSINESS OF SOFTWARE PARK. 6 7. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT T HE ASSESSING OFFICER HAD IGNORED THE PROFIT AND LOSS ACCOUNT RELATING TO SOFTWARE BUSINESS FILED VIDE LETTER DATED 14.02.2014. THE ASSESSEE AL SO REFERRED TO THE COMPUTATION OF INCOME, IN WHICH THE ASSESSEE HAD EA RNED INCOME BY WAY OF RENT AND MAINTENANCE CHARGES FROM SOFTWARE PARK AMOUNTING TO 1,05,89,042/-. THE ASSESSEE ALSO FILED THE NET RENT AL INCOME AND BUSINESS INCOME ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80IA(4)(III) OF THE ACT AS PART OF ITS SUBMISSIONS, WHICH ARE REPRODUCED AT PAGE 3 OF APPELLATE ORDER. THE CIT(A) IN VIEW OF SUBMISSIONS OF ASSESSE E AND IN VIEW OF ALLOWING THE CLAIM OF ASSESSEE IN EARLIER YEARS, AL LOWED DEDUCTION UNDER SECTION 80IA(4)(III) OF THE ACT. THE RELEVANT FINDI NGS OF CIT(A) ARE IN PARA 6.3 WHICH IS BEING REFERRED TO, BUT NOT BEING REPRO DUCED FOR THE SAKE OF BREVITY. IN THE TOTALITY OF THE ABOVE SAID FACTS AN D CIRCUMSTANCES, WHERE THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE HAS FAILED TO CONTROVERT THE FINDINGS OF CIT(A) IN PARA 6.3 AND I N VIEW OF EVIDENCES FILED BY THE ASSESSEE IN AUDIT REPORT IN FORM NO.10CCB, W E HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM THE AFORESAID DEDUCTI ON UNDER SECTION 80IA(4)(III) OF THE ACT. 8. BEFORE PARTING, WE MAY ALSO NOTE THAT DESPITE TH E DISALLOWANCE OF DEDUCTION IN ASSESSMENT YEARS 2003-04 AND 2004-05, THE ASSESSING OFFICER HIMSELF HAD OBSERVED THAT THE ASSESSEE HAD FULFILLED ALL THE CONDITIONS IN ASSESSMENT YEAR 2005-06 AND ALLOWED T HE DEDUCTION TO THE ASSESSEE IN THE SAID YEAR AND ALSO IN SUBSEQUENT YE ARS. THE ASSESSEE HAS BEEN ALLOWED THE AFORESAID DEDUCTION BY WAY OF ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT FOR ASSESSME NT YEARS 2005-06, 2007-08 AND 2009-10. ITA NO.1345/PUN/2016 M/S. MARI GOLD PREMISES PVT. LTD. 6 CONSEQUENTLY, WE FIND NO MERIT IN THE G ROUNDS OF APPEAL RAISED BY THE REVENUE AND THE SAME ARE DISMISSED. 9. IN TH E RESULT, THE APPEAL OF REVENUE IS DISMISSED. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT CO NTRAVENE THESE FACTS ON RECORD AND ALSO COULD NOT BRING ANY MATE RIAL ON RECORD / EVIDENCES TO SHOW THAT THE FACTS AND CIRCUMSTANCES FOR THE RELEVANT ASSESSMENT YEAR I.E., A.Y. 2012-13 WERE SOMETHING DIFFERENT AS COMPARED TO THE FACTS FOR A.Y. 2011-12 WHICH IS THE PRECE DING YEAR. WHEN THE FACTS AND CIRCUMSTANCES ARE ABSOLUTELY IDENTICA L, WHEN THERE IS NO COUNTER FINDINGS PLACED ON RECORD BY THE DEPARTMEN T, WE DO NOT FIND ANY REASON TO DEVIATE FROM THE VIEW TAKEN IN ASSESS EES OWN CASE FOR A.Y. 2011-12 (SUPRA) AND FOLLOWING THE SAME, WE ARE OF TH E CONSIDERED VIEW THAT THE RELIEF PROVIDED BY THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) TO THE ASSESSEE ALLOWING THE CLAIM OF D EDUCTION 7 UNDER SEC.80IA(4)(III) OF THE ACT WAS DONE CORRECTLY AND TH E SAID RELIEF PROVIDED TO THE ASSESSEE IS SUSTAINED. 9. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON 25 TH DAY OF SEPTEMBER, 2020. SD/- SD/- - ( P.M. JAGTAP ) ( PARTHA SARATHI CHAUDHURY ) VICE PRESIDENT JUDICIAL MEMBER PUNE; DATED : 25 TH SEPTEMBER, 2020. YAMINI , -./0 10. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(APPEALS)-7, PUNE. PR. CIT-6, PUNE. '#$ %%&',) &', / DR, ITAT, A PUNE; $,-./ GUARD FILE. / BY ORDER , // TRUE COPY // /01%2&3 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.