Income-tax Officer, V. M/s. Prathamesh Developers, Pune

ITA 2009/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0423 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 12-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R G NAHAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . . , , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 2009/PN/2014 '% % / ASSESSMENT YEAR : 2011-12 INCOME TAX OFFICER WARD-3(4) PUNE ....... / APPELLANT / V/S. M/S PRATHAMESH DEVELOPERS, S. NO. 41/1 WARJE, PUNE PAN : AAJFP3456G / RESPONDENT ASSESSEE BY : SHRI R.G NAHAR REVENUE BY : SHRI RAJEEV KUMAR / DATE OF HEARING : 30-11-2016 / DATE OF PRONOUNCEMENT : 30 -11-2016 / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 25.08.20 14 FOR THE ASSESSMENT YEAR 2011-2012. 2 ITA NO. 2009/PN/2014 2. THE SOLITARY ISSUE RAISED BY THE DEPARTMENT IN APPEAL IS AGAINST ALLOWING THE CLAIM OF DEDUCTION U/S 80 IB (10) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON PART COMPLETION OF HOUSING PR OJECT AMRUTVEL. 3. THE ASSESSEE IS A PROMOTER, BUILDER AND DEVELOPER OF R EAL ESTATE. THE ASSESSEE CLAIMED DEDUCTION OF RS.10,44,03,809/- U/S 80 IB (10) IN RESPECT OF HOUSING PROJECT AMRUTVEL. THE ASSESSEE DEV ELOPED THE PROJECT IN TWO PHASES. IN PHASE-I, THE ASSESSEE CONSTRUCTED BU ILDING-C COMPRISING OF EIGHTY SIX (86) RESIDENTIAL UNITS AND IN PHASE-2 , THE ASSESSEE PROPOSED TO CONSTRUCT TWO BUILDINGS, B1 AND B2 COMPRISING OF SEVENTY FIVE (75) AND SIXTY SIX (66) RESIDENTIAL UNITS, RESPE CTIVELY. THE ASSESSEE OBTAINED INITIAL COMMENCEMENT CERTIFICATE FROM PUNE MUNIC IPAL CORPORATION ON 28.03.2007 IN RESPECT OF HOUSING PROJECT. THE SANCTION WAS REVISED FROM TIME TO TIME AND LAST REVISION OF SANCTION OF THE PROJECT WAS ON 04.10.2010. THE ASSESSEE COMPLETED PHASE-I OF T HE PROJECT COMPRISING OF BUILDING-C ON 31.05.11 AND CLAIMED DEDUCTION U/ S 80 IB (10) OF THE ACT ON SAME. THE ASSESSING OFFICER DENIED THE CLA IM OF DEDUCTION TO THE ASSESSEE ON THE GROUND THAT THE HOU SING PROJECT OF THE ASSESSEE IS NOT COMPLETE AND CONSTRUCTION WORK ON BUILD ING B1 AND B2 IS STILL IN PROCESS. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 25.03.2014, T HE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) BY PLA CING RELIANCE ON VARIOUS DECISIONS OF TRIBUNAL AND THE HONBLE HIG H COURTS INCLUDING DECISIONS RENDERED IN THE CASES OF CIT V/S. VANDA NA 3 ITA NO. 2009/PN/2014 PROPERTIES, 206, TAXMAN 584 ( BOM.), VISVAS PROMOTERS (P) L TD V/S. ITAT 29 TAXMANN.COM 19 (MADRAS) AND CIT V/S ARUN EXCELLO FOUN DATION PVT. LTD, 29 TAXMANN.COM 149 (MADRAS) ALLOWED THE APPEAL OF THE ASSESSEE. AGAINST THE FINDINGS OF THE COMMISSIONER OF INCOM E TAX (APPEALS), THE DEPARTMENT IS NOW IN APPEAL BEFORE TRIBUNAL. 5. SHRI R.G NAHAR APPEARING ON BEHALF OF THE ASSESSEE SUBM ITTED AT THE OUTSET THAT THE ISSUE IN APPEAL; WHETHER THE ASSES SEE IS ELIGIBLE TO CLAIM PROPORTIONATE DEDUCTION ON THE PART COMPLETION OF TH E HOUSING PROJECT? HAS BEEN DECIDED BY THE TRIBUNAL AND VARIOUS H ONBLE HIGH COURTS IN FAVOUR OF THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE PUNE BENCH OF THE TRIBUNAL IN RAHUL CO NSTRUCTION CO. V/S ITO- REPORTED AS 21 TAXMANN.COM 435, DICT V/S. MAGARPATTA TOWSHIP DEVELOPMENT & CONSTRUCTION CO. 32 TAXMANN.COM 6 3 AND IN VARIOUS OTHER DECISIONS HAVE HELD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION ON PROPORTIONATE BASIS U/S 80 IB (10) OF THE ACT ON THE PART COMPLETION OF HOUSING PROJECT. THE ASSESSING OFFICER WHILE RE JECTING THE CLAIM OF THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION O F TRIBUNAL IN THE CASE OF VISVAS PROMOTERS (P) LTD V/S. ACTT (2013). THE SAID DECISION OF THE TRIBUNAL HAS BEEN REVERSED BY THE HONBLE MADRAS HIGH COURT LONG AGO. 6. SHRI RAJEEV KUMAR REPRESENTING THE DEPARTMENT SUBMIT TED THAT THE ASSESSEE HAS CLAIMED DEDUCTION IN RESPECT OF BUILDING-C IN PHASE-I OF THE HOUSING PROJECT. THE OTHER TWO BUILDINGS I.E B1 AND B2 WERE STILL UNDER CONSTRUCTION WHEN THE ASSESSEE CLAIMED DEDUCTION. THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S 80 IB (10) OF THE ACT ON CO MPLETION OF 4 ITA NO. 2009/PN/2014 ENTIRE HOUSING PROJECT BEFORE THE DUE DATE. HOWEVER, THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE ISS UE WITH RESPECT TO ALLOWBILITY OF PRO-RATA DEDUCTION ON THE HOUSING PROJECT U/S 80 IB (10) OF THE ACT HAS BEEN ACCEPTED BY VARIOUS BENCHES OF THE TRIBUNAL AND HONBLE HIGH COURTS. 7. WE HAVE HEARD THE SUBMISSION MADE BY THE REPRESENTA TIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE ISSUE RELATING TO ALLOWBILITY OF PRO-RATA DEDUCTION U/S 80 I B (10) OF THE ACT ON THE HOUSING PROJECT IS NO MORE RES-INTEGRA. 8. IN THE PRESENT CASE, THE ASSESSEE INITIALLY OBTAINED COMMENCEM ENT CERTIFICATE IN RESPECT OF HOUSING PROJECT AMRUTVEL ON 28 .03.2007. THUS, THE TIME LIMIT FOR COMPLETING THE PROJECT AND AVAILING THE DE DUCTION U/S 80 IB (10) OF THE ACT WAS UP TO ON 31.03.2012. THE ASSE SSEE DIVIDED THE PROJECT IN TWO PHASES. IN PHASE-I, THE ASSESSEE CONSTR UCTED BUILDING-C AND IN PHASE-II, THE ASSESSEE PROPOSED TO CONSTRUCT T WO BUILDINGS B1 AND B2. THE ASSESSEE COMPLETED THE BUILDING C IN PHASE-I ON 31.05.2011. UNDISPUTEDLY, THE ASSESSEE COMPLETED THE BUIL DING C WELL BEFORE THE STIPULATED DATE AND CLAIMED DEDUCTION OF RS. 10,4 4,03,809/- IN RESPECT OF SAID BUILDING. 9. THE ASSESSING OFFICER DECLINED THE CLAIM OF DEDUCTION MER ELY ON THE GROUND THAT THE ENTIRE PROJECT IS NOT COMPLETE. TH E COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF ASSESSEE BY FOLLOWIN G VARIOUS DECISIONS OF THE TRIBUNAL AS WELL AS HONBLE HIGH COURTS. THE ASSESSING OFFICER HAS CERTAINLY FELL IN ERROR IN DECLINING THE BENEFIT OF D EDUCTION U/S 80 IB (10) OF THE ACT TO THE ASSESSEE ON BUILDING C. THE HONBLE 5 ITA NO. 2009/PN/2014 HIGH COURTS AS WELL AS VARIOUS BENCHES OF TRIBUNAL HAS HE LD THAT PRO- RATA DEDUCTION CAN BE CLAIMED BY THE ASSESSEE ON THE P ART OF HOUSING PROJECT WHICH IS COMPLETE IN EVERY RESPECT BEFORE THE DU E DATE. THE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF RAHUL CONST RUCTION CO. V/S ITO (SUPRA) GRANTED DEDUCTION TO THE ASSESSEE U/S 80 IB (10) OF THE ACT ON PROPORTIONATE BASIS WHERE ONLY PART OF THE PROJECT WAS C OMPLETE. 10. WE DO NOT FIND ANY ERROR IN THE WELL REASONED AND DE TAILED ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND THUS, UPHOLD THE S AME. THE APPEAL OF THE DEPARTMENT IS DISMISSED BEING DEVOID OF ANY MERIT. ORDER PRONOUNCED ON WEDNESDAY, THE 30 TH DAY OF NOVEMBER, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) '/ ACCOUNTANT MEMBER $% '/ JUDICIAL MEMBER / PUNE; & / DATED : 30TH NOVEMBER, 2016 SB ) *', - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE. 5. ! %%* , * , - , / DR, ITAT, A BENCH, PUNE. 6. / / GUARD FILE. // TRUE COPY // / BY ORDER, % * / PRIVATE SECRETARY, * , / ITAT,