Income-tax Officer, V. M/s. Kevin Properties, Pune

ITA 2132/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1779 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 01-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT HALDAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , ! # $% , & ' BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ( / ITA NO. 2132/PN/2014 ) * +* / ASSESSMENT YEAR : 2011-12 INCOME TAX OFFICER, WARD 7(1), PUNE ....... / APPELLANT ) / V/S. M/S. KEVIN PROPERTIES, 2413, KUMAR CAPITAL, EAST STREET, CAMP, PUNE 411001 PAN : AAGFK2148H / RESPONDENT #,'( / CO NO. 21/PN/2016 ) * +* / ASSESSMENT YEAR : 2011-12 M/S. KEVIN PROPERTIES, 2413, KUMAR CAPITAL, EAST STREET, CAMP, PUNE 411001 PAN : AAGFK2148H ....... / APPELLANT ) / V/S. INCOME TAX OFFICER, WARD 7(1), PUNE / RESPONDENT ASSESSEE BY : SHRI RAJENDRA AGIWAL REVENUE BY : SHRI ABHIJIT HALDAR / DATE OF HEARING : 16-05-2016 / DATE OF PRONOUNCEMENT : 20-05-2016 2 ITA NO. 2132/PN/2014 AND CO NO. 21/PN/2016, A.Y. 20 11-12 - / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 29-09 -2014 FOR THE ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS FILED C ROSS OBJECTIONS IN SUPPORT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND SALE OF RESIDENTIAL FLATS. THE ASSESSEE DEVELOPED A HOUSING PROJEC T UNDER THE NAME KUMAR PARADISE SITUATED AT S. NO. 13411/1/1/1A, P LOT NO. 2, PART-B, HADAPSAR, PUNE. IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 THE ASSESSEE HAD CLAIMED DEDUCTION OF ` 93,34,346/- U/S. 80IB(10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) IN RESPECT OF AFORESAID PROJECT CONSISTING OF TWO BU ILDINGS B1 AND B2. THE PROJECT WAS COMMENCED ON 28-06-2006 AND THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING B1 COMPRISING OF 44 FLATS WAS ISSUED BY THE PUNE MUNICIPAL CORPORATION (PMC) ON 18-03-2008. THE ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF BUILDING B1 ALONE. THE ASSESSING OFFICER HELD THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) ON BUILDING B1 ON STANDALONE BASIS. THE COMMENCEMENT CERTIFICATE WAS ISSUED BY THE PMC ON 28-06 -2006 IN RESPECT OF BUILDINGS B1 AND B2, THEREFORE, THE ASSESSEE WO ULD BE ELIGIBLE TO CLAIM DEDUCTION ONLY IF BOTH THE BUILDINGS ARE COMP LETE IN EVERY RESPECT. THE ASSESSING OFFICER, ACCORDINGLY, DISALLOWE D THE ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. 3 ITA NO. 2132/PN/2014 AND CO NO. 21/PN/2016, A.Y. 20 11-12 AGGRIEVED BY THE ASSESSMENT ORDER DATED 21-01-2014, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) BY FOLLOWING EARLIER ORDER IN THE CASE OF ASSESSEE FOR ASSESSMENT YEA RS 2009-10 AND 2010-11 DIRECTED THE ASSESSING OFFICER TO DELETE THE DISALLO WANCE AND RESTORE THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. NO W, THE REVENUE IS IN APPEAL AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN RESTORING THE DEDUCTION U/S. 80IB(10) CLAIME D BY THE ASSESSEE. 3. SHRI RAJENDRA AGIWAL APPEARING ON BEHALF OF THE ASSESS EE SUBMITTED AT THE OUTSET THAT ISSUE RAISED IN THE PRESEN T APPEAL BY THE DEPARTMENT IS IDENTICAL TO THE ISSUE ADJUDICATED BY THE C O-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 169/PN/2014 FOR THE ASSESSMENT YEAR 2009-10 DECIDED ON 29-01-2016 . THE LD. AR POINTED THAT THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB(10) IN THE PRESENT CASE IS ON THE SAME PROJECT WHICH WAS SUBJECT OF APPEAL IN ASSESSMENT YEAR 2009-10. THE LD. AR PLACED ON RECORD A COPY OF THE TRIBUNAL ORDER IN AFORESAID APPEAL FILED BY THE REVENUE. T HE LD. AR SUBMITTED THAT THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOU R OF THE ASSESSEE. THE LD. AR PRAYED FOR DISMISSING THE APPEAL OF THE REVENUE. 4. SHRI ABHIJIT HALDAR REPRESENTING THE DEPARTMENT VEHE MENTLY SUPPORTED THE FINDINGS OF ASSESSING OFFICER. HOWEVER, THE LD. DR FAIRLY ADMITTED THAT THE ISSUE RAISED BY THE DEPARTMENT IN PRE SENT APPEAL IS IDENTICAL TO THE ISSUE DECIDED BY THE CO-ORDINATE BENCH O F THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 169/PN/2014 (SUPRA). 4 ITA NO. 2132/PN/2014 AND CO NO. 21/PN/2016, A.Y. 20 11-12 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE ONLY ISSUE RAISED BY THE DEPARTMENT IN PRESENT APPEAL IS AGAINST THE ACTION OF COMMISSIONER OF INCOME TAX (APPEALS) IN ACCEPTING THE CLAIM OF DEDUCTION U/S. 80IB(10) ON BUILDING B1 KUMAR PARADISE D EVELOPED BY THE ASSESSEE. WE OBSERVE THAT THE ISSUE RAISED IN T HE PRESENT APPEAL BY THE DEPARTMENT IS IDENTICAL TO THE ISSUE ADJUDICATED B Y THE CO- ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 169/PN/2014 (SUPRA). THE TRIBUNAL REJECTED THE APPEAL O F THE DEPARTMENT AND UPHELD THE FINDINGS OF COMMISSIONER OF INCO ME TAX (APPEALS) IN ALLOWING DEDUCTION U/S. 80IB(10) OF THE ACT. THE R ELEVANT EXTRACT OF THE FINDINGS OF THE TRIBUNAL ARE AS UNDER: 19. IT IS THE CASE OF THE REVENUE THAT SINCE THE A SSESSEE HAS NOT COMPLETED THE B2 PROJECT, THEREFORE, THE ASSESSEE I S NOT ENTITLED TO DEDUCTION U/S.80IB(10). IT IS THE CASE OF THE ASSES SEE THAT IT HAS COMPLETED A1, A2 AND B1 OF THE PROJECT AND BECAUSE OF INADEQUATE FSI THE ASSESSEE DID NOT COMPLETE B2 BUILDING AS IT WAS NOT ECONOMICALLY VIABLE. THEREFORE, ON STAND ALONE BASIS ITSELF, IT IS ENTITLED TO DEDUCTION U/S.80IB(10) IN RESPECT OF WHATEVER PORTION IS COMP LETED. IT IS ALSO THE CASE OF THE ASSESSEE THAT IN A.Y. 2007-08 THE DEDUC TION CLAIMED U/S.80IB(10) WAS ALLOWED IN ORDER PASSED U/S.143(3) . IN A.Y. 2008-09 THE DEDUCTION CLAIMED WAS ALLOWED IN THE ORDER PASS ED U/S.143(3)/147. THEREFORE, THERE IS NO JUSTIFICATION FOR DENYING TH E CLAIM OF BENEFIT OF DEDUCTION U/S.80IB(10). 20. WE FIND MERIT IN THE ABOVE SUBMISSIONS OF THE L D. COUNSEL FOR THE ASSESSEE. THE AO IN THE ASSESSMENT PROCEEDINGS FOR A.Y. 2007- 08 HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT PART A AND PART B ARE SEPARATE PROJECTS AND ACCORDINGLY ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) FOR PART A OF THE PROJECT. SIMILARLY, IN THE ASSESSMENT ORDER FOR A.Y. 2008-09 THE AO IN THE ORDER PASSED U/S.143 (3) R.W.S. 147 HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESP ECT OF A1 AND A2 UNITS. THERE IS NO DISPUTE TO THE FACT THAT THE ASS ESSEE IN THE INSTANT CASE HAS COMPLETED THE B1 BUILDING CONSISTING OF 44 FLAT S. AS MENTIONED EARLIER THE BUILDING B1 IS HAVING BUILT UP AREA OF MORE THAN 1 ACRE. THE BUILT UP AREA OF ALL THE RESIDENTIAL UNITS ARE LESS THAN 1,500 SQ.FT. AND THERE IS NO COMMERCIAL CONSTRUCTION AND THE BUILDIN G INDEPENDENTLY ON STANDALONE BASIS SATISFIES ALL THE CONDITIONS U/S.8 0IB(10). IT HAS BEEN HELD BY VARIOUS DECISIONS THAT DEDUCTION U/S.80IB(1 0) OF THE INCOME TAX ACT, 1961 IS TO BE ALLOWED ON STANDALONE BASIS ON S ATISFACTION OF THE CONDITIONS PRESCRIBED UNDER THE SAID SECTION. 5 ITA NO. 2132/PN/2014 AND CO NO. 21/PN/2016, A.Y. 20 11-12 21. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF P ADMAVATI DEVELOPERS (SUPRA) HAS HELD THAT ASSESSEE IS ENTITLED TO PRO-R ATA DEDUCTION IN RESPECT OF THE RESIDENTIAL UNITS IN THE HOUSING PROJECT WHI CH HAVE COMPLIED WITH THE CONDITIONS AS WELL AS ELIGIBLE FOR DEDUCTION U/ S.80IB(10). THE RELEVANT OBSERVATION OF THE TRIBUNAL FROM PARA 36 TO 38 READ S AS UNDER : 36. NOW, COMING TO THE SECOND HOUSING PROJECT IN S ECTOR NO.7. ADMITTEDLY, THE ASSESSEE IN ASSESSMENT YEAR 2006-07 HAS COMPLETED ONLY 2 BUILDINGS I.E. Q-1, Q-2 AND SOME F LATS IN ASSESSMENT YEAR 2007-08. THE BUILDING COMPRISED IN P-1 TO P-6 AND THE ROW HOUSES HAVE NOT BEEN CONSTRUCTED BY THE ASSESSEE TILL THE DATE OF SURVEY AND UPTO 31.03.2008. 37. THE HONBLE MADRAS HIGH COURT IN VISWAS PROMOTE RS PVT. LTD. VS. ACIT, (2013) 255 CTR 149 (MAD.) HAVE LAID DOWN THAT WITHIN A COMPOSITE HOUSING PROJECT, WHERE THERE ARE ELIGIBLE AND INTELLIGIBLE UNITS, THE ASSESSEE CAN CLAIM DEDUCTION IN RESPECT OF ELIGIBLE UNITS IN THE PROJECT AND EVEN WITHIN THE BLOCK, THE ASSES SEE IS ENTITLED TO CLAIM PROPORTIONATE RELIEF AGAINST THE UNITS SATISF YING THE EXTENT OF BUILT-UP AREA. 38. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE B ANGALORE BENCH OF THE TRIBUNAL IN DCIT VS. BRIGADE ENTERPRIS ES (P.) LTD., (2008) 119 TTJ 269 (BANG) AND THE PUNE BENCH OF THE TRIBUNAL IN RUNWAL MULTIHOUSING PVT. LTD. VS. ACIT IN ITA NOS.1 015, 1016 AND 1017/PN/2011 RELATING TO ASSESSMENT YEARS 2003- 04 TO 2005-06, ORDER DATED 21.11.2012. FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT THE ASSESSEE IS ENTITLED TO PRO-RATA DEDUCTION IN RESPECT OF RESIDENTIAL UNITS IN THE HO USING PROJECT NO.7, WHICH HAVE COMPLIED WITH THE CONDITIONS AND W ERE ELIGIBLE FOR THE DEDUCTION UNDER SECTION 80-IB(10) OF THE AC T. HOWEVER, THE SAID DEDUCTION IS ALLOWABLE TO THE ASSESSEE ONLY IN RESPECT OF UNITS CONSTRUCTION OF WHICH HAS BEEN COMPLETED UPTO 31ST MARCH, 2008. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE IN THIS REGARD IN ASSESSMENT YEARS 2006-07 AND 2007-08 AND IF THE ASSESSEE HAS FULFILLED THE A FORESAID CONDITIONS UNDER SECTION 80- IB(10) OF THE ACT, PRO -RATA DEDUCTION UNDER THE SAID SECTION COULD BE ALLOWED TO THE ASSE SSEE IN RELATION TO THE BUILDINGS / FLATS COMPLETED IN SECTOR NO.7. CONSEQUENTLY, THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS PART LY ALLOWED. 22. SINCE THE ASSESSEE IN THE INSTANT CASE HAS COMP LETED THE 44 UNITS OF PROJECT B1 BEFORE 31-03-2008, A FACT BROUGHT ON REC ORD BY THE AO AT PAGE 2 OF THE ORDER, THEREFORE, THE ASSESSEE IS ENTITLED TO PRO-RATA DEDUCTION IN RESPECT OF SAID UNITS. THE VARIOUS DECISIONS RELIED ON BY LD. DEPARTMENTAL REPRESENTATIVE ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE DISCUSSION AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE CIT(A) WE FI ND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, THE SAME IS UPHELD AND THE GROU NDS RAISED BY THE REVENUE ARE DISMISSED. 6 ITA NO. 2132/PN/2014 AND CO NO. 21/PN/2016, A.Y. 20 11-12 6. RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH O F THE TRIBUNAL, WE UPHOLD THE ORDER OF COMMISSIONER OF INCOME T AX (APPEALS) AND DISMISS THE APPEAL OF THE REVENUE BEING DEVOID OF ANY MERIT. CO NO. 22/PN/2016 7. THE CROSS OBJECTION FILED BY THE ASSESSEE IS MERELY IN SUPPORT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). SINCE, WE HAVE DISMISSED THE APPEAL OF THE REVENUE THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED AS SUC H. 8. IN THE RESULT, THE APPEAL OF THE REVENUE, AS WELL AS CR OSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 20 TH DAY OF MAY, 2016. SD/- SD/- (PRADIP KUMAR KEDIA) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 20 TH MAY, 2016 RK -.#/01+/ / 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, B BENCH, PUNE. 6. )/0 12 / GUARD FILE. // ' // TRUE COPY// #3 / BY ORDER, 4 *. / PRIVATE SECRETARY, # *+ , / ITAT, PUNE