DCIT CIR 3, THANE V. VIKRAM BUILDERS, THANE

ITA 1961/MUM/2010

• Counselvise Citation: 196119914 RSA 2010
• Duration Of Justice: 4 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 24-12-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 11-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMBIT MISHRA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE HONBLE S/SHRI D. MANMOHAN , VICE-PRESIDENT AND B.R.BASKARAN (AM) , . , . . , ! ./I.T.A. NO.1961/MUM/2010 ( '#$ % / ASSESSMENT YEAR : 2006-07) DY. COMMISSIONER OF INCOME TAX, CIRCLE-3, VARDAAN, LOWER GROUND FLOOR, MIDC, WAGLE INDL. ESTATE, THANE / VS. M/S VIKRAM BUILDERS, MANISHA BLDG, OPP MARUTI MARDIR, KALWA, THANE-400605 ( !&' / APPELLANT) .. ( ()&' / RESPONDENT) & ./ *+ ./ PAN/GIRNO.:AAAFV8941K !&' , / APPELLANT BY : S HRI SAMBIT MISHRA ()&' - , /RESPONDENT BY : NONE . / - 01 / DATE OF HEARING : 23.7.2014 2 %$ - 01 /DATE OF PRONOUNCEMENT : 10.9.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 15.11.2009 PASSED BY LD CIT(A)-I, THANE AND IT RELA TES TO THE ASSESSMENT YEAR 2006-07. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN GRANTING DEDUCTION U/S 80IB(10) OF THE ACT TO THE ASSESSEE. I.T.A. NO.1961/MUM/2010 2 2. FROM THE RECORD, WE NOTICE THAT THE ASSESSEE HAS GIVEN POWER OF ATTORNEY / VAKALATHNAMA TO THE FOLLOWING COUNSELS:- (A) SHRI VILAS B BONGALE, ADVOCATE ON 25-01-2011 (B) SHRI NILESH JOSHI, ADVOCATE ON 27-09-2011 (C) SHRI VIJAY MEHTA, CHARTERED ACCOUNTANT ON 21. 03.2012 WE ALSO NOTICE THAT THE ADJOURNMENT REQUESTS ARE BE ING MADE BY SHRI VIJAY MEHTA, CHARTERED ACCOUNTANT ON ONE OCCASION AND BY M/S JOSHI & CO., ADVOCATE ON SOME OTHER OCCASION IN ALTERNATE MANNER. WHEN THIS APPEAL WAS POSTED FOR HEARING ON 22-07-2014, AN ADJOURNMENT PETITION WAS FILED BY SHRI NILESH JOSHI, ADVOCATE AND THE SAME WAS BROUGHT BY AN ASSISTANT, WHO CLAIMED TO BE AN ARTICLED CLERK OF A C.A FIRM. IN VIEW OF THE AVAIL ABILITY OF MULTIPLE POWER OF ATTORNEYS / VAKALATHNAMAS, THE BENCH PASSED FOLLOWI NG ORDER DIRECTING THE ASSESSEE TO CLARIFY THE POSITION:- MR. VIJAY MEHTA HAS FILED POWER OF ATTORNEY & MR. NILESH JOSHI HAS ALSO FILED POWER OF ATTORNEY WITHOUT OBTAINING NO OBJEC TION FROM EARLIER COUNSEL. ONE OF THEM APPEARED BEFORE US, LETTER DA TED 22-07-2014 WAS BROUGHT BEFORE US BY ARTICLED CLERK OF THE SOME OF THE C.AS FIRM WHO WAS NOT AWARE OF THE FACTS. POST TOMORROW, I.E., 23/7/ 14 FOR CLARIFICATION. BOTH PARTIES INFORMED. WHEN THE CASE WAS CALLED ON 23.07.2014, NONE OF THE COUNSEL APPEARED TO OFFER THE CLARIFICATION SOUGHT BY THE BENCH. NO PETITION WAS ALSO FILED SEEKING ADJOURNMENT. HENCE, WE PROCEED TO HEAR THE APPEAL EX-PARTE, WITHOUT THE PRESENCE OF THE ASSESSEE. 3. WE HEARD LD D.R AND PERUSED THE RECORD. THE FACTS GATHERED BY US ARE THAT THE ASSESSEE HEREIN IS A BUILDER. INITIALLY T HE ASSESSEE OBTAINED APPROVAL TO CONSTRUCT TWO BLOCKS NAMED BLOCK A AND BLOCK B IN A PIECE OF LAND. SUBSEQUENTLY, THE ASSESSEE MODIFIED ITS PROJECT AND OBTAINED APPROVAL TO CONSTRUCT THREE BLOCKS VIZ., BLOCK A, BLOCK B AND B LOCK C. THE ASSESSEE I.T.A. NO.1961/MUM/2010 3 COMPLETED THE CONSTRUCTION OF BLOCK A AND BLOCK B W ITHIN THE PRESCRIBED DATE, VIZ., BEFORE 31.3.2008, BUT BLOCK C WAS COMPLETED T HEREAFTER. THE ASSESSEE CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT IN RESPEC T OF THE PROFITS DERIVED FROM BLOCK A AND BLOCK B ONLY. THE ASSESSEE CONSIDERED BLOCK C AS A SEPARATE INDEPENDENT PROJECT AND DID NOT CLAIM DEDUCTION U/S 80IB(10) AT ALL IN RESPECT OF BLOCK C. HOWEVER, THE ASSESSING OFFICER TREATED AL L THE THREE BLOCKS AS FORMING PART OF THE SAME PROJECT, SINCE THE ASSESSEE HAD OB TAINED COMMON APPROVAL AND FURTHER ALL THE THREE BLOCKS WERE CONSTRUCTED ON SA ME PIECE OF LAND. SINCE THE ENTIRE PROJECT WAS NOT COMPLETED BEFORE THE PRESCRI BED DATE OF 31.3.2008, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS FAILED TO COMPLY WITH THE MANDATORY CONDITIONS PRESCRIBED U/S 80IB(10) OF THE ACT AND A CCORDINGLY REJECTED THE CLAIM MADE BY THE ASSESSEE UNDER THAT SECTION. 4. IN THE APPEAL FILED BY THE ASSESSEE, THE LD CIT (A) ACCEPTED THAT THE BLOCK C IS A SEPARATE PROJECT AND ACCORDINGLY DIRECTED TH E AO TO ALLOW DEDUCTION U/S 80IB(10) CLAIMED BY THE ASSESSEE IN RESPECT OF BLOC K A AND BLOCK B. AGGRIEVED, THE REVENUE HAS FILED BEFORE US. 5. THE LD D.R SUBMITTED THAT THE LD CIT(A) HAS IGN ORED THE FACT THAT THE ASSESSEE HAD OBTAINED APPROVAL FOR ALL THE THREE BL OCKS AND FURTHER ALL THE THREE BLOCKS WERE CONSTRUCTED ON THE SAME PIECE OF LAND. THE LD D.R FURTHER SUBMITTED THAT THE AMENITIES PROVIDED IN THAT PLACE WERE COMMON FOR ALL THE THREE BLOCKS. THE LD D.R FURTHER SUBMITTED THAT TH E ASSESSEE HAS GIVEN NEW EXPLANATION BEFORE THE LD CIT(A) AS TO HOW THE BLOC K C CAME TO BE CONSTRUCTED DUE TO THE ALLEGED RELAXATION OF PROVISIONS. HOWEV ER, THE LD CIT(A) HAS ACCEPTED THE SAID EXPLANATIONS WITHOUT CONFRONTING THE SAME WITH THE ASSESSING I.T.A. NO.1961/MUM/2010 4 OFFICER. ACCORDINGLY HE SUBMITTED THAT THE LD CIT( A) WAS NOT CORRECT IN LAW IN HOLDING THAT THE BLOCK C IS A SEPARATE PROJECT WITH OUT APPRECIATING THE FACTUAL ASPECTS OF THE PROJECT. 6. WE FIND MERIT IN THE CONTENTIONS OF LD D.R. WE NOTICE THAT THE LD CIT(A) SEEMS TO HAVE ACCEPTED THE EXPLANATIONS GIVEN BEFOR E HIM FOR THE FIRST TIME WITH REGARD TO THE DEVELOPMENT OF BLOCK C. THE SAID EXP LANATIONS APPEAR TO CONTAIN CERTAIN FACTS, WHICH NEED VERIFICATION. FURTHER TH ERE IS A VALID POINT WITH REGARD TO THE CONTENTIONS OF THE ASSESSEE THAT THE AMENITI ES ARE COMMON FOR ALL THE THREE BLOCKS. HENCE, THE QUESTION THAT BOILS DOWN IS WHETHER BLOCK C CAN BE CONSIDERED AS A SEPARATE PROJECT WHEN THE APPROVAL IS OBTAINED AND THE AMENITIES ARE PROVIDED FOR ALL THE THREE BLOCKS IN COMMON. WE NOTICE THAT THE LD CIT(A) HAS NOT GONE THROUGH THE FACTUAL ASPECTS SUR ROUNDING THE PROJECT AND INSTEAD, HE APPEARS TO HAVE BEEN CARRIED AWAY BY TH E EXPLANATIONS GIVEN BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFIC ER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE THE MATTER TO HI S FILE WITH THE DIRECTION TO EXAMINE THE MATTER AFRESH AFTER CONFRONTING THE EXP LANATIONS GIVEN BY THE ASSESSEE WITH THE ASSESSING OFFICER, ASCERTAINING T HE PHYSICAL FEATURES OF THE PROJECT AND CONDUCTING SUCH OTHER ENQUIRY AS HE MAY DEEM IT NECESSARY TO ADJUDICATE THE MATTER. AFTER GIVING NECESSARY OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE, THE LD CIT(A) MAY TAKE APPROPRIATE DECISI ON IN ACCORDANCE WITH THE LAW. I.T.A. NO.1961/MUM/2010 5 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN C OURT ON 10 TH SEPT, 2014 . 2 %$ . 3 4 5 6 10 TH SEPT, 2014 - 7/ 8 SD SD ( . / D. MANMOHAN ) ( . . , / B.R. BASKARAN ) / VICE- PRESIDENT / ACCOUNTANT MEMBER . / MUMBAI: 10 TH SEPT,2014. . ' . ./ SRL , SR. PS !'#$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. !&' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. . =0 ( ! ) / THE CIT(A)- CONCERNED 4. . =0 / CIT CONCERNED 5. 6. >?7 ('0'@# , !1 !@#$ , . / / DR, ITAT, MUMBAI CONCERNED 7 / / GUARD FILE. A . / BY ORDER, TRUE COPY * (ASSTT. REGISTRAR) !1 !@#$ , . / /ITAT, MUMBAI