Income-tax Officer, V. Brahma Associates, Pune

ITA 2134/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1782 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 18 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: 02-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Retrospective amendment
• Section: 143(3)

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.2134/PN/2014 ASSESSMENT YEAR : 2011-12 THE INCOME TAX OFFICER, WARD 7(1), PUNE. . APPELLANT VS. BRAMHA ASSOCIATES, C/O- RESIDENCY CLUB, 3, QUEENS GARDEN ROAD, PUNE 411 001. PAN : AAAJB0412B . RESPONDENT / APPELLANT BY : SHRI M. K. SINGH / RESPONDENT BY : SHRI KISHOR PHADKE / DATE OF HEARING : 18.05.2016 / DATE OF PRONOUNCEMENT: 20.05.2016 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE REVENUE IS AGAINS T THE ORDER OF CIT(A)-II, PUNE DATED 29.09.2014 RELATING TO ASSESS MENT YEAR 2011-12 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT). 2. BY WAY OF THE PRESENT APPEAL, THE REVENUE HAS CH ALLENGED THE ACTION OF THE CIT(A) IN ALLOWING THE ASSESSEES CLAIM OF DEDU CTION UNDER SECTION 80IB(10) OF THE ACT MADE BY THE ASSESSING OFFICER. 3. BRIEFLY STATED, THE RELEVANT FACTS AS PER ASSESS MENT ORDER ARE THAT THE ASSESSEE AOP IS A JOINT VENTURE AND IS ENGAGED IN T HE BUSINESS OF REAL ESTATE AND A PROJECT NAMED BRAMHA ESTATE WAS FLOATED AT KONDHWA KHURD, PUNE IN THE FINANCIAL YEAR 2000-01. THE ASSESSEE CLAIMED T HE SAID PROJECT TO BE AN ELIGIBLE PROJECT UNDER SECTION 80IB(10) OF THE ACT AND CLAIMED A DEDUCTION OF 2 ITA NO.2134/PN/2014 RS.59,96,801/-. THE COMMENCEMENT CERTIFICATE FOR T HE SAID PROJECT WAS OBTAINED FROM THE LOCAL AUTHORITY ON 06.10.2000. T HE ASSESSEE DECLARED PROFITS FROM THE PROJECT FOR THE FIRST TIME IN ASSESSMENT Y EAR 2003-04 AND CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON THE ENTIRE PROJECT. THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2003-04 WAS COMPLETED ON 27.03.2006 DENYING THE DEDUCTION U NDER SECTION 80IB(10) OF THE ACT ON THE GROUND THAT THE PROJECT WAS NOT COMP LETED AS ON 31.03.2006 AND THE PROJECT WAS A COMMERCIAL PLUS RESIDENTIAL PRO JECT HAVING COMMERCIAL BUILT UP AREA OF MORE THAN 20% OF THE TOTAL BUILT U P AREA WHICH EXCEEDS THE LIMIT OF COMMERCIAL BUILT UP AREA BROUGHT IN BY AN AMENDMENT TO SECTION 80IB(10) OF THE ACT. IT WAS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSMENT TRAVELLED THROUGH APPELLATE STAGES AND THE ASSESSEE HAS BEEN ALLOWED RELIEF. IT WAS ALSO NOTED BY THE ASSESSING OFFICER THAT THE HO NBLE BOMBAY HIGH COURT WAS ALSO PLEASED TO HOLD THAT THE ASSESSEE WAS ELIG IBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, THOUGH IT WAS NOT AN E XCLUSIVE HOUSING PROJECT. THE HONBLE HIGH COURT WAS PLEASED TO ORDER THAT TH E LIMIT ON THE COMMERCIAL BUILT UP AREA BROUGHT IN BY AN AMENDMENT TO SECTION 80IB(10) OF THE ACT CANNOT BE HELD TO HAVE RETROSPECTIVE EFFECT. THE A SSESSING OFFICER CONFRONTED THE ASSESSEE REGARDING THE ALLOWABILITY OF THE CLAI M. IT WAS CONTENDED BY THE ASSESSEE THAT IN VIEW OF THE DECISION OF THE HONBL E HIGH COURT THAT THE PROJECT BRAHMA ESTATE IS ELIGIBLE FOR DEDUCTION UNDER SEC TION 80IB(10) OF THE ACT FROM THE FIRST YEAR OF CLAIM, I.E. FROM ASSESSMENT YEAR 2003-04. THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IS JUST IFIED SINCE THE PROJECT IS THE SAME. VARIOUS DECISIONS WERE ALSO BROUGHT TO THE N OTICE OF THE ASSESSING OFFICER. 4. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE NOTED THAT ALTHOUGH THE JURISDICTIONAL HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, HO WEVER, THE REVENUE HAS PREFERRED FURTHER APPEAL BEFORE THE HONBLE APEX CO URT BY WAY OF SPECIAL LEAVE PETITION. ACCORDING TO THE ASSESSING OFFICER , AS PER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT, THE ASSESSEE FOR GETTI NG THE BENEFIT HAS TO FULFILL THE FOLLOWING CONDITIONS :- 3 ITA NO.2134/PN/2014 A) HOUSING PROJECT HAS TO BE APPROVED BY LOCAL AUTH ORITY. B) PROJECT TO BE COMPLETED BEFORE 31.03.2003. C) PROJECT TO COMMENCE ON OR AFTER 01.10.1998. D) SIZE OF THE PLOT OF THE LAND FOR THE PROJECT SHO ULD HAVE A MINIMUM OF 1 ACRE. E) RESIDENTIAL UNIT IN CITIES OTHER THAN DELHI OR M UMBAI SHOULD HAVE MAXIMUM BUILT UP AREA OF 1,500 SQ.FT. 5. HOWEVER, SINCE THE PROJECT BRAHMA ESTATE WAS N OT COMPLETED BEFORE 31.03.2003 AND SINCE THE COMMERCIAL BUILT UP AREA O F THE PROJECT BRAHMA ESTATE IS 7128.87 SQ.MTRS. BEING MORE THAN 20% OF THE TOTAL BUILT UP AREA AND SINCE THE INCOME THAT HAS ACCRUED DURING THE FINANC IAL YEAR RELEVANT TO ASSESSMENT YEAR 2011-12 HAS EXCLUSIVELY DERIVED BY THE SALE OF 5 COMMERCIAL UNITS ADMEASURING 4003 SQ.FT., THE ASSESSING OFFICE R HELD THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. AGGRIEVED BY SUCH ACTION OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). 6. THE CIT(A) FOLLOWING THE EARLIER DECISIONS OF TH E CO-ORDINATE BENCH OF ITAT IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEARS 2003-04, 2004-05, 2005-06, 2006-07 AND 2009-10 ALLOWED THE CLAIM OF T HE ASSESSEE. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US. 8. THE LD. AUTHORIZED REPRESENTATIVE (AR) FOR THE A SSESSEE, AT THE OUTSET, POINTED OUT THAT THE IDENTICAL ISSUE HAS BEEN CONSI STENTLY DECIDED BY THE CO- ORDINATE BENCH OF THE ITAT IN FAVOUR OF THE ASSESSE E. IN THIS REGARD, THE LD. AR RELIED UPON THE EARLIER DECISION OF THE CO-ORDIN ATE BENCH OF ITAT IN ASSESSEES OWN CASE IN ITA NO.1757/PN/2014 RELATING TO ASSESSMENT YEAR 2010-11, ORDER DATED 09.03.2016. 4 ITA NO.2134/PN/2014 9. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE FAIRLY ADMITTED THAT THE ISSUE STANDS DECIDED AGAINST THE REVENUE B UT RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 10. WE HAVE PERUSED THE ORDERS OF THE LOWER AUTHORI TIES. WE FIND THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO-ORDINATE BENCH OF ITAT IN ASSESSEES OWN CASE IN ITA NO.1757/PN/2014 RELATING TO ASSESSMENT YEAR 2010-11, ORDER DATED 09.03.2016. THE RELEVANT PARA S OF THE ORDER OF THE ITAT IN ASSESSEES OWN CASE VIDE ITA NO.1757/PN/2014 (SU PRA) ARE REPRODUCED HEREINBELOW FOR READY REFERENCE :- 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILE D ON BEHALF OF THE ASSESSEE. WE FIND ON APPEAL FILED BY THE REVENUE AGAINST THE ORD ER OF THE TRIBUNAL THE FOLLOWING QUESTIONS OF LAW WERE ADMITTED FOR A.Y. 2003-04 IN ASSESSEES OWN CASE : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE INCOME-TAX APPELLATE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE DEDUCTION U/S.80IB(10), AS APPLICABLE PRIOR TO APRIL 1, 2005 IS ADMISSIBLE TO A HOUSING PROJECT COMPRISING OF RESIDENTIAL HOUSING UNITS AN D COMMERCIAL ESTABLISHMENTS ? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE INCOME-TAX APPELLATE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT A PROJECT HAVING COMMERCIAL AREA UP TO 10 PER CENT OF THE PRO JECT IS ELIGIBLE FOR DEDUCTION ON THE ENTIRE PROFITS OF THE PROJECT U/S. 80IB(10) UP TO APRIL 1 2005? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE INCOME-TAX APPELLATE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE PROJECTS WHEREIN THE COMMERCIAL AREA IS MORE THAN 10 PER CEN T OF THE PROJECT AND THE PROFITS FROM THE RESIDENTIAL DWELLING UNITS IN THAT PROJECT CAN BE WORKED OUT SEPARATELY THEN, SUBJECT TO FULFILLING OTHER CONDIT IONS, DEDUCTION ON THE PROFITS RELATABLE TO THE RESIDENTIAL PART OF THE PROJECT WO ULD BE ELIGIBLE FOR DEDUCTION U/S.80IB(10)? 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE INCOME-TAX APPELLATE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE LIMIT ON COMMERCIAL USE OF THE BUILT UP AREA AS PRESCRIBED B Y CLAUSE (D) OF SECTION 80IB(10) HAS NOT RETROSPECTIVE APPLICATION AND IT A PPLIES ONLY WITH EFFECT FROM THE ASSESSMENT YEAR 2005-06? 10. WE FIND AFTER CONSIDERING VARIOUS DECISIONS THE HONBLE HIGH COURT IN ASSESSEES OWN CASE HAS DECIDED THE ISSUE AGAINST T HE REVENUE. IT WAS HELD THAT CLAUSE (D) INSERTED TO SECTION 80IB(10) WITH EFFECT FROM APRIL 1, 2005, IS PROSPECTIVE AND NOT RETROSPECTIVE AND HENCE COULD NOT BE APPLIE D FOR THE PERIOD PRIOR TO APRIL 1, 2005. SINCE DEDUCTION U/S.80IB(10) WERE ON THE PRO FITS DERIVED FROM THE HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY AS A WHOLE , THE TRIBUNAL WAS NOT JUSTIFIED IN RESTRICTING THE SECTION 80IB(10) DEDUCTION ONLY TO A PART OF THE PROJECT. HOWEVER, IN THE PRESENT CASE, SINCE THE ASSESSEE HAD ACCEPTED T HE DECISION OF THE TRIBUNAL IN ALLOWING SECTION 80IB(10) DEDUCTION TO A PART OF TH E PROJECT, THE FINDINGS OF THE TRIBUNAL IN THAT BEHALF COULD NOT BE DISTURBED. 5 ITA NO.2134/PN/2014 11. SINCE THE AO FOLLOWING THE ORDER FOR PRECEDING ASSESSMENT YEARS HAS DENIED THE CLAIM OF DEDUCTION U/S.80IB(10) AND SINCE THE C IT(A) FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING A SSESSMENT YEARS HAVE ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) AND SINCE THE J URISDICTIONAL HIGH COURT HAS ALSO DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN ASSE SSEES OWN CASE FOR A.Y. 2003-04, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROU GHT TO OUR NOTICE THE ORDER OF THE CIT(A) HAS TO BE UPHELD. MERELY BECAUSE THE REVENU E HAS FILED AN SLP BEFORE THE HONBLE APEX COURT, THE SAME CANNOT BE A BASIS TO T AKE A CONTRARY VIEW THAN THE VIEW TAKEN BY THE JURISDICTIONAL HIGH COURT IN ABSE NCE OF ANY CONTRARY MATERIAL. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY D ISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 11. FOLLOWING THE PARITY OF REASONING, WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF CIT(A). THUS, WE FIND NO MERIT IN THE GRO UND RAISED BY THE REVENUE. HENCE, REVENUE FAILS ON ITS GROUND. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 20 TH DAY OF MAY, 2016. SD/- SD/- ( VIKAS AWASTHY ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 20 TH MAY, 2016. & ' () *+( ! COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. &, / BY ORDER , '# //TRUE COPY// $ %&# '( / SR. PRIVATE SECRETARY ) '* + / ITAT, PUNE