ASST CIT CIR 3, MUMBAI V. SADHANA BUILDERS P.LTD, THANE

ITA 2099/MUM/2015

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84510 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AWADESH KUMAR
• Assessee Lawyers: M V RAJGURU
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO.2099/M/2015 ASSESSMENT YEAR: 2010-11 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-3, ROOM NO.02, 6 TH FLOOR, ASHAR IT PARK, B-WING, WAGLE INDL. ESTATE, THANE (W) 400 604 VS. M/S. SADHANA BUILDERS PVT. LTD., DHAVAL CHHAYA, RAM GANESH GADKARI PATH, TALAOPALI, THANE (W)-400 601 PAN: AABCS 4673D (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI M.V. RAJGURU, A.R. REVENUE BY : SHRI AWADESH KUMAR, D.R. DATE OF HEARING : 01.12.2016 DATE OF PRONOUNCEMENT : 15.12.2016 O R D E R PER C.N. PRASAD, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2 [(HEREINAFTE R REFERRED TO AS THE CIT(A)] DATED 23.01.15 FOR THE ASSESSMENT YEAR 2010 -11 ARISING OUT OF THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A)-2, THANE FAILED TO APPRECIATE THE FACT THAT IN ORDER TO AVAIL THE DEDUCTION U/S 80IB(10) THE ENTIRE PROJECT SHOULD HA VE BEEN COMPLETED ON OR BEFORE 31.03.2009 HOWEVER THE CONSTRUCTION OF BUILD INGS E & F HAD REMAINED INCOMPLETE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A)-2, THANE FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAS NOT BUILT THE WHOLE PROJECT BUT MADE AN AGREEMENT WITH ANOTHE R BUILDER, M/S GAYATRI ASSOCIATES ON CONTRACT BASIS BUT BOTH THE PARTIES H AVE NOT FULFILLED THE CONDITIONS OF WORK CONTRACT. ITA NO.2099/M/2015 M/S. SADHANA BUILDERS PVT. LTD. 2 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ISSUE IN APPEAL HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE B Y THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE IMMEDI ATELY PRECEDING ASSESSMENT YEAR IN ITA NO.597/M/2013 DATED 01.01.16 WHEREIN TH E TRIBUNAL FOLLOWING THE JURISDICTIONAL HIGH COURT IN THE CASE OF VANDANA PR OPERTIES (353 ITR 36) ALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 80I B(10) OF THE ACT ON THE HOUSING PROJECT NAMELY DHAWAL HILLS PROJECT. THE L D. COUNSEL SUBMITS THAT IN THIS YEAR ALSO THE CLAIM UNDER SECTION 80IB(10) ON THE VERY SAME PROJECT HAS BEEN DENIED ON THE GROUND THAT ASSESSEE HAS NOT CON STRUCTED THE HOUSING PROJECT BUT HAS SOLD ONLY DEVELOPMENT RIGHTS TO GAY ATRI ASSOCIATES AND THEREFORE INCOME OF THE ASSESSEE IS NOT FROM CONSTR UCTION ACTIVITY AND CONSEQUENTLY DEDUCTION UNDER SECTION 80IB(10) IS NO T ALLOWABLE AND IN THE ALTERNATIVE THE ASSESSING OFFICER ALSO HELD THAT DH AWAL HILLS PROJECT WAS NOT COMPLETED WITHIN THE TIME PRESCRIBED UNDER SECTION 80IB(10) THEREFORE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SECTIO N 80IB(10). THE LD. COUNSEL SUBMITS THAT ON IDENTICAL FACTS THE DEDUCTION WAS D ENIED TO THE ASSESSEE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR AND THE CO-OR DINATE BENCH OF THE TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE CO-ORDINATE BENCH DEC ISION IN ASSESSEES OWN CASE. WE FIND THAT ON IDENTICAL FACTS THE CO-ORDIN ATE BENCH FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR ALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 80IB(10) OF THE ACT ON THE HOUSING PROJECT DHAWAL H ILLS OBSERVING AS UNDER: 5.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL BEFORE US. WE FIND THAT THE AO HAD DENIED THE BENEFIT OF DEDUCTIO N U/S.80IB(10) OF THE ACT AS HE WAS OF THE OPINION THAT THE ASSESSEE HAD NOT FULFIL LED THE CONDITIONS STIPULATED BY THE PROVISIONS OF THE ACT, THE NON COMPLETION OF E & F BUILDINGS WAS SUFFICIENT REASON FOR DENYING THE BENEFIT. BASIC UNDISPUTED FA CTS ARE THAT THE PROJECT WAS CONSTRUCTED ON A PLOT THAT WAS MORE THAN ONE ACRE, THAT THE ASSESSEE HAD CLAIMED DEDUCTION FOR A & B BUILDINGS ONLY U/S.80IB OF THE ACT, THAT BECAUSE OF COURT PROCEEDINGS IT COULD NOT COMPLETE E & F BUILDINGS, THAT THE COMPLETION CERTIFICATE ISSUED BY THE MUNICIPAL AUTHORITIES PROVED THAT THE PROJECT WAS COMPLETED BEFORE DUE DATE I.E. 31. 03. 2009. THUS, ALL THE CONDITION STIPULATED BY THE SECTION ITA NO.2099/M/2015 M/S. SADHANA BUILDERS PVT. LTD. 3 80IB(10)OF THE ACT WERE FULFILLED BY THE ASSESSEE F OR CLAIMING DEDUCTION. HERE, WE WOULD LIKE TO RELY UPON THE CASE OF VANDANA PROPERT IES(353 ITR36)WHICH READS AS UNDER: THE OBJECT OF SECTION 80-IB(10) OF THE INCOME-TAX ACT, 1961, IN GRANTING DEDUCTION EQUAL TO ONE HUNDRED PER CENT. OF THE PRO FITS OF AN UNDERTAKING ARISING FROM DEVELOPING AND CONSTRUCTING A HOUSING PROJECT IS WITH A VIEW TO BOOST THE STOCK OF HOUSES FOR LOWER AND MIDDLE INCO ME GROUPS, SUBJECT TO FULFILLING OF THE SPECIFIED CONDITIONS. THE EXPRESS ION HOUSING PROJECT IS NEITHER DEFINED UNDER SECTION 2 OF THE ACT NOR UNDE R SECTION 80-IB(10) OF THE ACT. EVEN UNDER THE MUMBAI MUNICIPAL CORPORATION AC T, 1998, AS ALSO UNDER THE DEVELOPMENT CONTROL REGULATIONS FOR GREATER MUM BAI, 1991, THE EXPRESSION HOUSING PROJECT IS NOT DEFINED. THEREF ORE, THE EXPRESSION HOUSING PROJECT IN SECTION 80-IB(10) WOULD HAVE T O BE CONSTRUED AS COMMONLY UNDERSTOOD. THE EXPRESSION HOUSING PROJEC T IN COMMON PARLANCE WOULD MEAN CONSTRUCTING A BUILDING OR GROU P OF BUILDINGS CONSISTING OF SEVERAL RESIDENTIAL UNITS. THEREFORE, IT IS CLEAR THAT CONSTRUCTION OF EVEN ONE BUILDING WITH SEVERAL RESIDENTIAL UNITS OF THE SIZE NOT EXCEEDING 1000 SQ. FT WOULD CONSTITUTE A HOUSING PROJECT UN DER SECTION 80-IB(10)THE SECTION ALLOWS DEDUCTION TO A HOUSING PROJECT (SUBJ ECT TO FULFILLING ALL OTHER CONDITIONS) CONSTRUCTED ON A PLOT OF LAND HAVING MI NIMUM AREA OF ONE ACRE AND IT IS IMMATERIAL AS TO WHETHER OR NOT ANY OTHER HOUSING PROJECTS ARE EXISTING ON THE PLOT OF LAND.THE EXPLANATION TO SE CTION 80-IB(10)(A) REFERS TO THE APPROVAL GRANTED TO THE SAME HOUSING PROJECT MORE THAN ONCE AND WOULD NOT APPLY WHERE THE APPROVAL IS GRANTED TO DI FFERENT HOUSING PROJECTS. CONSIDERING THE ABOVE WE ARE OF THE OPINION THAT TH E FAA HAD RIGHTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE. THEREFORE, CONFIRMING HIS ORDER, WE DECIDE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. 5. SINCE THE FACTS AND CIRCUMSTANCES BEING IDENTICA L, RESPECTFULLY FOLLOWING THE SAID DECISION WE HOLD THAT THE ASSESSEE IS ENTI TLED FOR DEDUCTION UNDER SECTION 80IB(10) FOR THIS ASSESSMENT YEAR ALSO ON T HE HOUSING PROJECT DHAWAL HILLS. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 15.12.2016. SD/- SD/- (MANOJ KUMAR AGGARWAL) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 15.12.2016. * KISHORE, SR. P.S. ITA NO.2099/M/2015 M/S. SADHANA BUILDERS PVT. LTD. 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.