Deputy Commissioner of Income-tax, V. M/s. Naiknavare Developers Pvt. Ltd., Pune

ITA 2010/PUN/2013

• Counselvise Citation: 201024514 RSA 2013
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 19-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAZHAR AKRAM
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.2010 & 2011/PN/2013 (ASSESSMENT YEAR: 2006-07 & 2008-09) DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1 (2), PUNE. . APPELLANT VS. M/S NAIKNAVARE DEVELOPERS PVT. LTD, (FORMERLY KNOWN AS NAIKNAVARE & ASSOCIATES) 1204/4, GHOLE ROAD, SHIVAJI NAGAR, PUNE 411 004. PAN : AABFN 5815 H . RESPONDENT DEPARTMENT BY : SHRI MAZHAR AKRAM ASSESSEE BY : SHRI NIKHIL PATHAK DATE OF HEARING : 29-09-2014 DATE OF PRONOUNCEMENT : 29 -09-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED TWO APPEALS BY THE REVENUE ARE DIRECT ED AGAINST A CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS) II, PUNE DATED 27.05.2013 WHICH, IN TURN, HAS ARISEN FROM TW O SEPARATE ORDER DATED 30.12.2008 AND 31.12.2010 PASSED BY THE ASSESSING O FFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO ASSESSMENT YEAR S 2006- 07 & 2008-09 RESPECTIVELY. 2. IN BOTH THE APPEALS, A SOLITARY COMMON ISSUE IS WITH RESPECT TO ASSESSEES CLAIM OF DEDUCTION U/S 80IB (10) OF THE ACT, WHICH WAS DENIED BY THE ASSESSING OFFICER. THE GRIEVANCE OF THE REVENU E IS THAT THE CIT (A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE. 3. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT F ACTS AND CIRCUMSTANCES IN BOTH THE CAPTIONED ASSESSMENT YEAR S ARE IDENTICAL, THEREFORE, WE TAKE UP THE APPEAL FOR ASSESSMENT YEAR 2006-07 A S THE LEAD CASE. THE ITA NO.2010 & 2011/PN/2013 A. Y.: 2006-07 & 2008-09 RESPONDENT ASSESSEE IS ENGAGED IN THE BUSINESS OF P ROMOTER AND DEVELOPERS AND FOR THE ASSESSMENT YEAR 2006-07, IT FILED A RET URN OF INCOME DECLARING NIL INCOME, WHICH INTER-ALIA, CONTAINED A CLAIM OF DEDU CTION U/S 80IB (10) OF THE ACT AMOUNTING TO RS.3,24,28,017/- IN RESPECT OF THE PROFITS DERIVED FROM DEVELOPMENT AND CONSTRUCTION OF A HOUSING PROJECT IMPERIAL RESIDENCY. THE ASSESSING OFFICER HAS DENIED THE CLAIM OF THE ASSES SEE ON THE GROUND THAT THE PROJECT IN QUESTION CONTAINED BUILT-UP AREA OF COM MERCIAL SPACE TO THE EXTENT OF 9438 SQ.FT AND THEREFORE, IT DID NOT QUALIFY TO BE A HOUSING PROJECT FOR THE CLAIM OF DEDUCTION U/S 80IB (10) OF THE ACT. AS PE R THE ASSESSING OFFICER THE BUILT UP AREA OF SHOPS AND COMMERCIAL SPACE WAS MOR E THAN EVEN THE LIMIT PRESCRIBED BY CLAUSE (D) SECTION 80IB (10) OF THE A CT. 4. THE CIT (A) HAS ALLOWED THE CLAIM OF THE ASSESSE E ON THE GROUND THAT THE PROVISIONS OF CLAUSE (D) OF SECTION 80IB (10) O F THE ACT INSERTED BY THE FINANCE ACT (NO.2), 2004 W.E.F. 01.04.2005 PRESCRI BING A LIMIT ON COMMERCIAL SPACE IN A HOUSING PROJECT IS NOT APPLICABLE TO A P ROJECT APPROVED BY THE LOCAL AUTHORITY PRIOR TO 01.04.2005, AND, THEREFORE PRESE NCE OF COMMERCIAL AREA IN VIOLATION OF SECTION 80IB(10) (D) OF THE ACT, WOULD NOT EFFECT THE CLAIM OF THE ASSESSEE IN THIS CASE. THE CIT (A) HAS NOTED THAT THE PROJECT OF THE ASSESSEE WAS APPROVED BY THE LOCAL AUTHORITY I.E. PUNE MUNIC IPAL CORPORATION ON 31.03.2001, WHICH WAS PRIOR TO THE INSERTION OF CLA USE (D) OF SECTION 80IB (10) OF THE ACT BY THE FINANCE ACT (NO.2), 2004 W.E.F. 0 1.04.2005. IN COMING TO SUCH CONCLUSION, THE CIT (A) HAS RELIED UPON THE JU DGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF IN COME TAX VS. BRAHMA ASSOCIATES 333 ITR 289 (BOM). 5. AGAINST THE AFORESAID DECISION OF THE CIT (A), R EVENUE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING, IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE CONCLUSION OF THE CIT (A) IS IN LINE WITH A RECENT JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS HAP PY HOME ENTERPRISES ITA NO.2010 & 2011/PN/2013 A. Y.: 2006-07 & 2008-09 VIDE INCOME TAX APPEAL NO.201 OF THE 2012 DATED 19. 09.2014, A COPY OF WHICH HAS BEEN PLACED ON RECORD. 6. THE HONBLE HIGH COURT WAS CALLED UPON TO INTERP RET THE PROVISIONS OF SECTION 80IB (10) OF THE ACT IN TWO DIFFERENT SCENA RIOS. FIRSTLY, THE HONBLE HIGH COURT EXAMINED WHETHER THE SAID PROVISION APPL IES TO A HOUSING PROJECT APPROVED BEFORE 31.03.05 AND COMPLETED BEFORE 01.04 .2005. SECONDLY, THE HONBLE HIGH COURT EXAMINED WHETHER THE SAID PROVIS ION APPLIES TO A HOUSING PROJECT APPROVED BEFORE 31.03.05 BUT COMPLETED ON O R AFTER 1 ST APRIL 2005. AS PER THE HONBLE HIGH COURT IN BOTH THE SCENARIOS, C LAUSE (D) OF SUB-SECTION (10) OF SECTION 80IB CANNOT HAVE ANY APPLICATION TO HOUSING PROJECTS THAT ARE APPROVED BEFORE 31.03.2005. AS PER THE HON'BLE HIGH COURT THE SAID CLAUSE (D) BEING INEXTRICABLY LINKED TO THE DATE OF APPROVAL O F THE HOUSING PROJECT, IT WOULD OPERATE ONLY PROSPECTIVELY I.E. FOR HOUSING PROJECT S APPROVED AFTER 1 ST APRIL, 2005. 7. IN OUR VIEW, THE AFORESAID JUDGMENT OF THE HONB LE BOMBAY HIGH COURT SQUARELY COVERS THE CONTROVERSY BEFORE US. THE HOU SING PROJECT OF THE ASSESSEE HAS BEEN APPROVED BY THE LOCAL AUTHORITY I .E. PMC ON 31.03.2001 CONTAINING 32 SHOPS AGGREGATING TO A BUILT UP AREA OF 9438 SQ.FT WHICH WAS 4.5% OF THE TOTAL BUILT UP AREA OF THE PROJECT. THE PROJECT OF THE ASSESSEE WAS APPROVED BY PMC AS A RESIDENTIAL PROJECT. THE AF ORESAID SCENARIO IS COVERED BY THE JUDGMENT OF THE BOMBAY HIGH COURT I N THE CASE OF HAPPY HOME ENTERPRISES (SUPRA), ACCORDING TO WHICH THE PR OVISIONS OF SECTION 80IB (10) (D) OF THE ACT HAS NO APPLICATION FOR DENYING ASSESSEES CLAIM FOR DEDUCTION U/S 80IB (10) OF THE ACT. ACCORDINGLY, T HE DECISION OF THE CIT (A) IS HEREBY AFFIRMED. ITA NO.2010 & 2011/PN/2013 A. Y.: 2006-07 & 2008-09 8. SINCE THE ISSUE INVOLVED AND THE FACTS AND CIRCU MSTANCES IN THE TWO CAPTIONED ASSESSMENT YEARS ARE SIMILAR, THE CONCLUS ION OF THE CIT (A) IN BOTH THE CAPTIONED YEARS IS HEREBY AFFIRMED. 9. RESULTANTLY BOTH THE APPEALS PREFERRED BY THE R EVENUE ARE DISMISSED. 10. ABOVE DECISION WAS PRONOUNCED IN THE OPEN COUR T IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING O N 29 TH SEPTEMBER, 2014. . SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 29 TH SEPTEMBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A),PUNE; 4) THE CIT, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE