Deputy Commissioner of Income-tax, V. M/s. B.U. Bhandari Schemes, Pune

ITA 205/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9413 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 10-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V L JAIN
• Keywords: Competent authority
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO , AM AND SHRI VIKAS AWASTHY, JM . / I TA NO. 205 /PUN/20 16 / ASSESSMENT YEAR : 2010 - 11 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2(4), PUNE. ....... / APPELLANT / V/S. M/S. B.U. BHANDARI SCHEMES, 1182/1/3, F.C. ROAD, SHIVAJI NAGAR, PUNE - 411 005. PAN :AAGFB6865J / RESPONDENT REVENUE BY : SHRI RAJEEV KUMAR, CIT A SSESSEE BY : SHRI V.L. JAIN / DATE OF HEARING : 16.01.2018 / DATE OF PRONOUNCEMENT : 19 .01.2018 / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3, PUNE DATED 23.11.2015 FOR THE ASSESSMENT YEAR 2010 - 11. 2 ITA NO.205 /PUN/2016 A.Y. 2010 - 11 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF PROMOTERS & BUILDERS. THE ASSESSEE DEVELOPED A HOUSING PROJECT ACCOLADE A AND B , COLONNADE C, EVERGLADE D AND PROMENADE E AT HADAPSAR B YPASS R OAD, KHARADI , PUNE ON LAND ADMEASURING 49,900 SQ.MTRS. THE FIRST PLAN COMPRISING OF BUILDING A HAVING FIVE WINGS WITH 100 TENEMENTS WAS APPROVED ON 22.07.2005. THEREAFTER, PLAN WAS REVISED INCREASING TENEMENTS FROM 100 TO 200 AND THE SAME WAS APPROVED ON 27.06.2006 . T HEREAFTER, ASSESSEE SUB - DIVIDED THE PLOT INTO A, B, C, D AND E AND GOT PLAN APPROVED FOR BUILDINGS B, C AND D ON 30.03.2007. DURING ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE CLAIMED DEDUCTION OF RS.14,49,08,514/ - IN RESPECT OF SALE OF FLAT S IN BUILDING A AND B IN PART. THE ASSESSING OFFICER REJECTED ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFER TO AS THE ACT) ON THE GROUND THAT THE HOUSING PROJECT IS NOT COMPLETE BEFORE THE DUE DATE . THE INITIAL APPROVAL WAS GRANTED TO THE ASSESSEE ON 22.07.2005. THEREFORE, PROJECT SHOULD HAVE BEEN GRANTED TO THE ASSESSEE ON 22.07.2005. THEREFORE, PROJECT SHOULD HAVE BEEN COMPLETED ON OR BEFORE 31.03.2011. THE BUILDING C AND BUILDING D ARE NOT COMPLETED WITHIN THE AFORESAID PERIOD, T HEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB (10) OF THE ACT. 3. AGGRIEVED BY THE ASSESSMENT ORDER DATED 28.03.2013, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS). THE C OMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HIGH COUR T IN THE CASE OF CIT VS. V ANDANA PROPERTIES REPORTED AS 353 ITR 36 HELD THAT THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDU CTION U/S. 80IB (10) OF THE ACT AND REVERSED THE FINDINGS OF ASSESSING OFFICER. NOW, THE REVENUE IS IN APPEAL BEFORE TRIBUNAL . A SSAILING THE FINDINGS OF COMMI SSIONER OF INCOME TAX (APPEALS), THE DEPARTMENT HAS RAISED FOLLOWING GROUNDS IN APPEAL : 3 ITA NO.205 /PUN/2016 A.Y. 2010 - 11 1 . ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE ASSESSEES CONTENTION THAT THE APPROVALS TAKEN ON DATES LATER THAN 22.07.2005 WERE ON EXTENSION OF THE ORIGINAL APPROVAL AND NOT SEPARATE SANCTIONS. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE ASSESSEES CLAIM U/S. 80IB(10) DESPITE THE FA CT THAT THE PROJECT WAS NOT COMPLETED BEFORE THE LIMITATION DATE. 3. THE ORDER OF THE LD.CIT(A) MAY BE VACATED AND THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND MODIFY ANY OF THE ABOVE GROUNDS OF APPEAL. 4 . SHRI RAJEEV KUMAR REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDING THE FINDINGS OF ASSESSING OFFICER SUBMITTED THAT IT IS WELL SETTLED LAW THAT ONLY FIRST APPROVAL FROM THE COMPETENT AUTHORITY, IS TO BE CONSIDERED FOR DETERMINING THE PERIOD OF COMPLETIO N. IN THE PRESENT CASE, UNDISPUTEDLY, FIRST APPROVAL WAS GRANTED TO THE ASSESSEE BY PMC ON 22.07. 2005. THEREFORE, TO BE ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB (10), THE ASSESSEE WAS REQUIRE D TO COMPLETE THE HOUSING PROJECT ON OR BEFORE 31.03.2011. THE COMMI SSIONER OF INCOME TAX (APPEALS) HAS ERRED IN GRANTING BENEFIT OF DEDUCTION U/S. 80IB(10) OF THE ACT ON THE BASIS OF SUBSEQUENT APPROVALS OBTAINED BY ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT APPRECIATING THE FACT THAT SUBSEQUENT A PPROVAL WOULD NOT GRANT EXTENSION OF TIME FOR CLAIMING DEDUCTION U/S. 80IB (10) OF THE ACT. 5. SHRI V.L JAIN APPEARING ON BEHALF OF ASSESSEE VEHEMENTLY DEFENDING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) SUBMITTED THAT FIRST APPROVAL IN RESPECT O F BUILDING A WAS GRANTED TO THE ASSESSEE ON 22.07.2005. A T THE TIME OF FIRST APPROVAL, BUILDING B, C, D AND E WERE NOT PART OF THE APPROVED PLAN. APPROVAL S FOR BUILDING B, C, D AND E WERE OBTAINED BY THE ASSESSEE FOR THE FIRST TIME ON 30.03.2007 . AS FAR AS BUILDING A IS CONCERNED, 4 ITA NO.205 /PUN/2016 A.Y. 2010 - 11 DUE DATE OF COMPLETION WAS 31.03.2011. THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING A WAS RECEIVED IN TWO PARTS. FIRST COMPLETION CERTIFICATE WAS RECEIVED BY ASSESSEE ON 24.11.2008 AND SECOND COMPLETION CERTIFICAT E WAS RECEIVED ON 31.05.2010. THEREFORE, BUILDING A WAS COMPLETED IN EVERY RESPECT WELL BEFORE THE DUE DATE OF COMPLETION AS PER PROVISION OF THE ACT. IN RESPECT OF BUILDING B, THE COMPLETION CERTIFICATE WAS AGAIN RECEIVED IN TWO PARTS. FIRST COMPLETION CE RTIFICATE WAS RECEIVED ON 31.05.2010 AND SECOND COMPLETION CERTIFICATE WAS RECEIVED ON 19.03.2011. THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING C WAS RECEIVED ON 29.11.2011 AND 19.03.2012. THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING D WAS RECEIV ED BY ASSESSEE ON 05.03.2012. SINCE APPROVAL IN RESPECT OF BUILDING B, C AND D WAS RECEIVED FOR THE FIRST TIME ON 30.03.2007, THE DUE DATE OF COMPLETION OF THE SAID BUILDING WAS 31.03.2012. THE DOCUMENTS ON RECORD CLEARLY INDICATE THAT ALL THE AFORESAID BU ILDING WERE COMPLETED WELL BEFORE THE DUE DATE OF COMPLETION. THEREFORE, COMMISSIONER OF INCOME TAX (APPEALS) RIGHTLY GRANTED BENEFIT OF DEDUCTION COMMISSIONER OF INCOME TAX (APPEALS) RIGHTLY GRANTED BENEFIT OF DEDUCTION U/S. 80IB(10) OF THE ACT TO THE ASSESSEE . THE LD. AR SUBMITTED THAT HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VANDANA PROPERTIES (SUPRA) HAS HELD THAT BENEFIT OF DEDUCTION U/S. 80IB(10) IS ALLOWABLE ON HOUSING PROJECT ON PLOT HAVING OF AREA 1 ACRE, IRRESPECTIVE OF THE FACT THAT OTHER HOUSING PROJECT EXISTS ON THE SAID LAND. IN THE PRESENT CASE, PL AN FOR BUIL DING A WAS FIRST APPROVED ON LAND HAVING AREA OF MORE THAN TEN ACRE S . THE OTHER BUILDING S VIZ. B, C AND D ARE SUBSEQUENT ADDITIONS FORMING DIFFERENT HOUSING PROJECT S . 6. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT THAT THE FIRST PLAN APPROVED ON 22.07.2 005 WAS WITH RESPECT TO B UILDING A. THE OTHER BUILDING S I.E. B, C AND D WERE APPROVED FOR THE FIRST TIME ON 5 ITA NO.205 /PUN/2016 A.Y. 2010 - 11 30.03.2007. AS PER THE PROVISION OF SECTION 80IB(10)(A)(III) WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1 ST DAY OF APRIL, 2005, THE CONSTRUCTION OF THE SAID HOUSING PROJECT SHOULD BE COMPLETED WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WH ICH HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. THUS, THE DUE DATE OF COMPLETION FOR BUILDING A WAS 31.03.2011. SINCE , THE REMAINING BUILDING S I.E. B, C AND D WERE APPROVED FOR THE FIRST TIME ON 30.03.2007, THE DUE DATE OF COMPLETION FOR AFORESAID BUILDING S TO BE CONSIDERED ELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT W AS 31.03.2012. THE COMPLETION CERTIFICATES IN RESPECT OF ALL THE BUILDINGS WER E RECEIVED BY ASSESSEE AS UNDER : BUILDING DATE OF RECEIVING COMPLETION CERTIFICATE A 24.11.2008 31.05.2010 B 31.05.2010 19.03.2011 A PERUSAL OF THE ABOVE DETAILS REVEAL THAT BUILD ING A, B, C AND D WERE COMPLETE WELL BEFORE THE DUE DATE , AS HAS BEEN MANDATED UNDER THE PROVISION OF SECTION 80IB(10) OF THE ACT. IN THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAS CLAIMED DEDUCTION IN RESPECT OF SALE OF FLAT S IN BUILDING A AND B. SINCE , COMPLETION CERTIFICATE IN RESPECT OF BOTH THE BUILDING S WERE RECEIVED BEFORE THE DUE DATE, WE FIND NO INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN GRANTING DEDUCTION U/S.80IB(10) TO THE ASSESSEE IN RESPECT OF SAID HOUSING PROJECT. A PERUSAL OF DOCUMENTS ON RECORD SUGGEST THAT BUILDING A, B, C AND D ARE SEPARATE HOUSING PROJECT ON THE SAME PLOT OF LAND AND SIZE OF THE PLOT IS MUCH MORE THAN MINIMUM PRESCRIBED AREA OF 1 ACRE. IN VIEW OF THE DECISION RENDERED BY THE HON'BLE 19.03.2011 C 29.12.2011 19.03.2012 B 05.03.2012 6 ITA NO.205 /PUN/2016 A.Y. 2010 - 11 BOMBAY HIGH COURT IN THE CASE OF CIT VS. VANDANA PROPERTIES (SUPRA), THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB(10) IN RESPECT OF MULTIPLE HOUSING PROJECT S ON SAME PLOT OF LAND . 7. IN VIEW OF ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND THE SAME IS UPHELD. THUS, APP EAL OF THE DEPARTMENT IS DISMISSED BEING DEVOID OF ANY MERIT. 8. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRO NOUNCED ON FRIDAY , THE 19 TH DAY OF JANUARY , 201 8 . SD/ - SD/ - ( . / D. KARUNAKARA RAO ) ( /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 19 TH JANUARY , 201 8 . / PUNE; / DATED : 19 JANUARY , 201 8 . SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS) - 3, PUNE. 4. THE CIT - 3, PUNE. 5 . , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE .