The ACIT, Circle 2(2), Baroda V. M/s. Shakti Developers, Baroda

ITA 1964/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0588 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 15-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 19-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Tax effect
• Section: 143(3)

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI S.S. GODARA, JM, AND SHRI MANISH BORAD, AM ./ITA.NO.1964/AHD/2013 ( / ASSTT YEAR : 2009-10) ACIT, CIRCLE-2(2), BARODA. VS. M/S SHAKTI DEVELOPERS, SOUJANYA SOCIETY , NR. VADSAR VILLAGE, KALALI GIDC, VADSAR ROAD, BARODA. PAN AAQFS 3259K (APPELLANT) (RESPONDENT) / APPELLANT BY: SHRI PRASOON KABRA, SR. DR / RESPONDENT BY: SMT. URVASHI SHODHAN, AR / DATE OF HEARING 15/9/2016 /DATE OF PRONOUNCEMENT 16/9/2016 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER THIS APPEAL OF REVENUE IS DIRECTED AGAINST THE OR DER OF LD.CIT(A)-II, BARODA , DATED 10.04.2013 PASSED AGAINST THE ORDER U/S 143(3) OF THE IT ACT, 1961(IN SHORT THE ACT) DT.08.12.2011 FRAMED B Y ITO, WD-2(5), BARODA. 2. GRIEVANCES OF THE REVENUE, IN THIS APPEAL ARE AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID.CIT (APPEALS) ERRED IN ALLOWING DEDUCTION OF RS. 32,84, 117/- U/S 80IB(10) OF THE INCOME-TAX ACT WITHOUT APPRECIATING THAT THE LEGAL RELATIONSHIP BETWEEN THE ASSESSEE AND THE END USER OF THE UNITS WAS THAT OF 'WORK CONTRACT'. ITA NO. 1964/AHD/2013 ASST. YEAR 2009-10 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID CIT(APPEALS) ERRED IN ALLOWING DEDUCTION OF RS.16,4 4,786/- U/S.80IB(10) R.W.S. 80IB(1) TO THE ASSESSEE ON PROFIT DERIVED FROM SALE OF UNUTILIZED FSI NOT BEING THE ELEMENT OF PROFITS DERIVED FROM THE BUSINESS AC TIVITY OF DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT RELATING TO THE SALE OF TENEMENTS. 3. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR A LTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIMED IN APPEAL IT IS PRAYED THAT THE ORDER OF THE CIT (APPEALS) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THIS APPEAL WAS PRESENTED ON 19/7/2013. ON 10. 12.2015 THE CBDT HAS ISSUED INSTRUCTIONS BEARING NO. 21/2015 PROHIBI TING ITS SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUN AL AGAINST THE ORDER OF THE CIT(A) WHERE THE TAX EFFECT BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.10 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRU CTIONS ARE APPLICABLE ON PENDING APPEAL ALSO. WE OBSERVE THAT IN GROUND NO. 1 REVENUE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN ALLOWING DED UCTION OF RS. 32,84,117/- U/S 80IB(10) OF THE ACT. ON PERUSAL OF THE ASSESSMENT ORDER WE FIND TH AT THE ONLY ADDITION MADE IS OF RS. 32,84,117/- U/S 80IB(10) OF THE ACT AND. TOTAL TAX ON THIS ADDITION IS RS.9,85,236/- WHICH IS REVEALED FROM THE INCOME-TAX COMPUTATION FORM ATTACHED TO THE DEMAND NOTICE DATE D 8/12/2011. AS THE TAX EFFECT ON DELETION OF THE ADDITION IN THIS APPEAL I S LESS THAN RS.10 LACS THE GROUND NO.1 DESERVES TO BE DISMISSED. 4. AS FAR AS GROUND NO.2 IS CONCERNED IN THE ASSESS MENT ORDER LD. AO HAS JUST TAKEN AN ADDITIONAL VIEW TOWARDS PROPORTIONATE DISALLOWANCE U/S 80IB(10) OF THE ACT TOWARDS THE SALE OF UNUSED FSI BUT THERE IS NO SPECIFIC ADDITION MADE IN THE ORDER. AS BY VIRTUE OF CBDT IN STRUCTION REFERRED TO ITA NO. 1964/AHD/2013 ASST. YEAR 2009-10 3 ABOVE, THE APPEAL IS BEING DISMISSED ON ACCOUNT OF LOW TAX EFFECT, IT WILL BE JUST ACADEMIC TO DEAL WITH GROUND NO.2. WE ARE, THE REFORE, NOT ADJUDICATING THIS GROUND. 5. FURTHER ON RE-VERIFICATION AT THE END OF THE AO, IT COMES TO THE NOTICE THAT THE TAX EFFECT IS MORE OR THEY FALL WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTION, THEN THE DEPARTMENT WI LL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THIS ORDER. SU CH APPLICATION SHOULD BE FILED WITHIN LIMITATION PROVIDED IN LAW. 6. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED ON ACCOUNT OF TAX EFFECT BEING LESS THAN RS.10 LACS BY VIRTUE OF CBDT INSTRUCTION NO.21/2015 (SUPRA). 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 16 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- (S. S. GODARA) JUDICIAL MEMBER SD/- (MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED, 16/9/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITA NO. 1964/AHD/2013 ASST. YEAR 2009-10 4 1. DATE OF DICTATION .. : 15/9/2016. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER :15/9/2016 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 16 /9 /16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER..