JCIT 25(1), MUMBAI V. CREATIVE BUILDERS, MUMBAI

ITA 2079/MUM/2010

• Counselvise Citation: 207919914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L K AGARWAL
• Assessee Lawyers: HARI S RAHEJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, C, MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND RAJENDRA SINGH ( A.M ) ITA NO.2079/MUM/2010 (ASSESSMENT YEAR: 2006-07) DY. COMMISSIONER OF INCOME TAX, 25(1), 202,C-11, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051 M/S.CREATIVE BUILDERS G-1/B-3, AKHIL TOWERS, RATTAN NAGAR, DAHISAR (E), MUMBAI-400068. PAN: AAAFC 0687 P APPELLANT V/S RESPONDENT APPELLANT BY : SHRI L.K.A GARWAL RESPONDENT BY : SHRI HARI S R AHEJA O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29.12.2009 PASSED BY THE LE ARNED COMMISSIONER OF INCOME TAX (A) FOR THE ASSESSMENT YEAR 2006-07 TAKING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE DE DUCTION U/S 80IB(10) OF THE IT ACT WITHOUT APPRECIATING TH E FACT THAT THE ASSESSEES PROJECT ALSO CONSISTS OF COMME RCIAL AREA. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) FURTHER ERRED IN HOLDING THAT THE ASSESSEES PROJECT HAS BEEN APPROVED AS RESIDENTIAL PROJECT WITHOUT APPRECIATING THE FACT THAT SECTION 80IB(10) PRIOR TO AMENDMENT DOES NOT SPEAK ABOUT INCLUSION OF ANY COMMERCIAL AREA IN THE PROJECT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN APPRECIATING TH E FACT ITA NO.2079/MUM/2010 (ASSESSMENT YEAR: 2006-07) 2 THAT THE LANGUAGE OF SECTION 80IB(10) AS IT STOOD B EFORE THE AMENDMENT IS VERY CLEAR AND DOES NOT CALL FOR A NY INTERPRETATION AS PROPOSED BY THE ASSESSEE. INTERPRETATION OF SECTION IS REQUIRED ONLY WHEN THE RE IS SOME AMBIGUITY IN THE LANGUAGE OF THE PROVISION WHI CH IS NOT THE CASE IN THE CASE OF THE LANGUAGE OF SECTION 80IB(10). THE SECTION VERY CLEARLY PROVIDES THAT TH E PROJECT HAS TO BE A HOUSING PROJECT WHICH IS A C ONDITION PRECEDENT FOR AVAILING THE DEDUCTION. THE SECTION PROVIDES FOR WHAT WAS INTENDED BY THE LEGISLATURE. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS TO BE SET ASIDE AND THAT OF T HE AO BE RESTORED 2. AT THE TIME OF HEARING, THE LEARNED D.R. SUPPORT S THE ORDER OF THE AO. 3. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ISSUE IS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN INCOME TAX OFFICER V/S M/S CREATIVE BUILDERS IN ITA NOS. 2474 AND 4166/MUM/2008 (AYS-2004-05 AND 2005-06) ORDER DATED 23.7.2009 WHICH HAS ALSO BEEN UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT VIDE SEPARATE JUDGMENT D ATED 22.3.2011 IN INCOME TAX APPEAL NO.6030 AND 6031 OF 2010. HE ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER S. HE, THEREFORE, SUBMITS THAT THE ISSUE MAY BE DECIDED AC CORDINGLY. 4. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON REC ORD WE FIND ITA NO.2079/MUM/2010 (ASSESSMENT YEAR: 2006-07) 3 THAT THE ASSESSEE FIRM ENGAGED IN THE BUSINESS AS A BUILDER AND HAS SHOWN ITS INCOME ON THE BASIS OF PERCENTAGE COMPLETION METHOD. IT CLAIMED DEDUCTION UNDER SECT ION 80IB(10) ON THE PROFIT OF A PROJECT NAMED AS GREE N WAYS. THE AO IN VIEW OF THE FINDINGS RECORDED IN THE ASSE SSMENT ORDER FOR THE ASSESSMENT YEAR 2004-05, THE OBSERVAT IONS MADE DURING THE SURVEY CONDUCTED UNDER SECTION 133 A OF THE INCOME TAX ACT, 1961 (THE ACT) ON 30.10.2006 AND T HE STATEMENTS OF VARIOUS PERSONS RECORDED DURING THE COURSE OF SURVEY FOR THE REASONS AS MENTIONED AT PAGES 2 TO 5 OF THE ASSESSMENT ORDER HELD THE ASSESSEE IS NOT ENTITLE D TO THE DEDUCTION UNDER SECTION 80IB(10) OF ACT. ON APPEAL , THE LEARNED COMMISSIONER OF INCOME TAX (A), HOWEVER, HE LD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80IB(10) OF THE ACT AND DIRECTED THE AO TO DELETE THE ADDI TION MADE BY THE AO. WE FURTHER FIND THAT THE TRIBUNAL IN T HE ASSESSEES OWN CASE (SUPRA) VIDE PARAGRAPH 5 OF ITS ORDER HAS HELD AS UNDER : 5. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE PERMISSION OF THE MIRA-BHAYANDER MUNICIPAL CORPORA TION THE ASSESSEES PROJECT IS A HOUSING PROJECT WITH C ERTAIN SHOPS WHICH THE LEARNED CIT(A) HAS HELD AS CONVENIE NT SHOPPING AREA. THIS COMMERCIAL AREA IS LESS THAN 5 % OF THE TOTAL PROJECT BEING LESS THAN 2% AS PER THE SUBMISSIONS OF THE LEARNED COUNSEL. FOR THE AY 200 5-06 THE AMENDMENT ITSELF ALLOWS THE COMMERCIAL AREA IN THE HOUSING PROJECT. SINCE THE ASSESSEE FULFILLS THE CO NDITION FOR BOTH THE ASSESSMENT YEARS INVOLVED THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10). FOR THE ITA NO.2079/MUM/2010 (ASSESSMENT YEAR: 2006-07) 4 DETAILED DISCUSSION MADE BY THE LEARNED CIT(A) IN THE ORDER, WHICH WE FIND THERE IS NO NEED TO REPEAT IN THIS ORDER, WE AGREE WITH THE FINDINGS AND HOLD THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80IB(10). ACCORDINGLY THE ORDERS OF THE CIT(A) ARE CONFIRMED THE ABOVE VIEW HAS BEEN UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT VIDE JUDGMENTS DATED 22 .3.2011 BY FOLLOWING THE DECISION IN THE CASE OF COMMISSIO NER OF INCOME TAX V/S BRAHMA ASSOCIATES REPORTED IN (2011) 51 DTR 298 (BOM). IN THE ABSENCE OF ANY DISTINGUISHI NG FEATURES BROUGHT ON RECORD BY THE REVENUE, WE RE SPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, CONFIRMED BY T HE HONBLE JURISDICTIONAL HIGH COURT HOLD THAT SINCE THE ASSES SEE FULFILLS ALL THE CONDITIONS, THE ASSESSEE IS ELIGIBLE FOR D EDUCTION UNDER SECTION 80IB(10) OF THE ACT AND ACCORDINGLY W E DECLINE TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A) ON THIS ACCOUNT. THE GROUNDS TAKEN BY THE REVENUE ARE THEREFORE REJECTE D. 5. IN THE RESULT, THE REVENUES APPEAL STANDS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20TH MAY,2011 . SD SD (RAJENDRA SINGH ) (D.K.A GARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 20 TH MAY, 2011 ITA NO.2079/MUM/2010 (ASSESSMENT YEAR: 2006-07) 5 SRL:11511 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILED. TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI