ITO, CHENNAI V. M/s. Chettinadd Housing Constructions, CHENNAI

ITA 2202/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8065 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 21-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS JT
• Assessee Lawyers: G BASKAR
• Keywords: Competent authority
• Section: 143(3)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI , ! ' # $' # % . &' , ( ! )* BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I T.A. NO. 2202/MDS/2016 / ASSESSMENT YEAR :2012-13 INCOME TAX OFFICER, NON-CORPORATE WARD-1(5), ROOM NO.304, III FLOOR, WANAPARTHY BLOCK, 121, M.G.ROAD, CHENNAI 600 034 VS. CHETTINADD HOUSING CONSTRUCTIONS, NO.8/2, KENNEDY SECOND STREET, MYLAPORE, CHENNAI 600 004 [PAN:AAFFC 2827A] ( +, /APPELLANT ) ( -.+, / RESPONDENT ) / APPELLANT BY : SHRI SHIVA SRINIVAS, JT. CIT / RESPONDENT BY : SHRI G.BASKAR, ADVOCATE / DATE OF HEARING : 03.01.2017 /DATE OF PRONOUNCEMENT : 25.01.2017 / / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2 DATED 30.03. 2016 (CIT(A) FOR SHORT) PASSED UNDER SECTION 143(3) OF THE INCOME TA X ACT, 1961 [ACT IN SHORT], FOR THE ASSESSMENT YEAR (AY) 2012-13 VIDE O RDER DATED 30.01.2015. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND VIZ. 2) THE LD. CI(A) FAILED TO APPRECIATE THAT THE A SSESSEE HAD OBTAINED SEPARATE BUILDING PLAN APPROVALS FOR THE 3 8 INDIVIDUAL RESIDENTIAL UNITS(VILLAS) AND NOT FOR THE PROJECT A S A WHOLE. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .2202 2202 2202 2202/M /M/M /MDS DSDS DS/ // /201 201201 2016 66 6 2 3. THE REVENUE HAS RAISED GROUND NO. 2 THAT; 2. THE ASSESSING OFFICER HAS HELD THAT IN THE ASSESSMEN T ORDER U/S. 143(3) DT. 26.3.2013 FOR ASST. YEAR 2010-11, T HE ASSESSEE'S CLAIM OF DEDUCTION U/S. 80 IB(10) WAS DISALLOWED BY THE ITO, BUSINESS WARD III(2), CHENNAI FOR THE FOLLOWING REAS ONS: I. THE ASSESSEE FIRM HAS PURCHASED A LAND WITH AN E XTENT OF 71334 SQ. FT. AND CONSTRUCTED 56307 SQ. FT. THE PROJECT, 'CHETTINADD GREEN VILLAGE' WAS STARTED AFTER MARCH, 2007 AND COMPLETED BY FEBRUARY 2010. II. THE ASSESSEE FIRM HAS CLAIMED AN AMOUNT OF RS. 8,53,40,112/- AS EXEMPT U/S. 80 18(10) IN RESPECT OF THE PROJECT DEVELOPED WHICH CONSISTED OF 38 INDEPENDENT VILLAS. III. THE ASSESSEE FIRM HAS OBTAINED APPROVALS FOR T HE LAYOUT OF THE PROJECT IN NOS. 132 TO 140 & 144/2006-07 DATED 7.3.2007 AND 68/2006-07 DATED 10.10.2006, FROM THE PRESIDENT OF PERUMBAKKAM PANCHAYAT. IV. THE BUILDING PLANS HAVE BEEN OBTAINED FROM PERU MBAKKAM PANCHAYAT FOR THE INDIVIDUAL VILLAS (AND NOT FOR TH E HOUSING PROJECT AS A WHOLE) ON VARIOUS DATES IN MARCH 2007. EACH PLAN HAS A DIFFERENT NUMBER MEANING THAT THEY ARE ALL SE PARATELY OBTAINED AND A COMPOSITE APPROVAL FOR THE HOUSING P ROJECT HAS NOT BEEN OBTAINED. EVERY PANCHAYAT CAN APPROVE ONLY SINGLE RESIDENTIAL UNITS IN G+1 PATTERN UPTO MAXIMUM OF 40 00 SQ. FT. ONLY WHICH CLEARLY INDICATES THAT THE ASSESSEE FIRM HAS NOT OBTAINED A COMPOSITE APPROVAL FOR THE ENTIRE HOUSIN G PROJECT. THE ASSESSEE FIRM HAS PROMOTED THIS PROJECT A SA LA YOUT OF RESIDENTIAL PLOTS AND NOT RESIDENTIAL UNITS. V. COMPLETION CERTIFICATES HAVE BEEN OBTAINED FROM THE PERUMBAKKAM PANCHAYAT ON DIFFERENT DATES. THE ASSESSEE FIRM HAS OBTAINED COMPLETION CERTIFICATES SEPARATELY FOR EACH VILLA A ND THIS SHOWS THAT NO SINGLECOMPLETION CERTIFICATE HAS BEEN OBTAI NED. VI. AS PER THE RETURN OF INCOME, ON THE DATE OF THE CLAIM, THE ASSESSEE DID NOT ADHERE TO THE CONDITIONS PRESCRIBE D U/S. 80I B(10) AS PER DISCUSSIONS IN PARA NO. 3 1 PAGE 11 ABOVE. THE COPY OF THE LETTER DT. 14.3.2013 FROM THE PRESI DENT OF PERUMBAKKAM PANCHAYAT FURNISHED BY THE ASSESSEE IS ALSO NOT CATEGORICAL ABOUT WHETHER A COMPOSITE APPROVAL WAS OBTAINED FOR THE PROJECT. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .2202 2202 2202 2202/M /M/M /MDS DSDS DS/ // /201 201201 2016 66 6 3 3.1. THE ASSESSING OFFICER HAS STATED THAT THE ASSE SSEE'S APPEAL FOR THE ASST. YEAR 2010-11 WAS ALLOWED BY THE CIT(A)V, CHENNAI AND THE DEPARTMENT HAS PREFERRED FURTHER APPEAL BEFORE THE HON'BLE ITAT, CHENNAI AGAINST THE ORDER OF THE CIT(A)-V, CHENNAI. FURTHER, THE ASSESSING OFFICER HELD THAT IN CONSISTENCY WITH THE STAND TAKEN BY THE REVENUE FOR THE ASST. YEAR 2010-11, THE DEDUCTION U /S. 80 IB(10) OF RS. 1,64,93,520/- FOR THE ASST. YEAR 2012-13 IS DIS ALLOWED AND ADDED BACK TO THE TOTAL INCOME. 3.2. THUS, THE ASSESSMENT ORDER U/S. 143(3) OF THE IT ACT, 1961 WAS PASSED ON 30.1.2015, ASSESSING THE TOTAL INCOME AT RS. 1,64,93,520/- AS AGAINST THE RETUNED INCOME OF RS. NIL DECLARED B Y THE ASSESSEE. 4. ON APPEAL OF CIT(A) ALLOWED THE DEDUCTION U/S. 8 0IB OF THE ACT PLACING RELIANCE ON THE EARLIER ORDER OF CIT(A) FOR THE AY 2010-11.AAGAINST THIS ASSESSEE APPEAL. 5. WE HAVE HEARD BOTH PARTIES AND PERUSED THE MATERIAL ON RECORD. FOR THE AY 2010-11 THE REVENUE CAME IN APPEAL BEFORE TH IS TRIBUNAL IN ITA NO.1670/MDS/2013 AND CO.159/MDS/2013 VIDE ORDER DAT ED 28.10.2016 DISMISSING THE REVENUES APPEAL BY HOLDING AS FOLLO WS: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 80-IB(10) OF THE ACT ON THE GROUND THAT WHAT WAS DEVELOPED BY THE ASSESSEE IS A LAYOUT AND NOT THE HOUSING PROJECT. WE HAVE CAREF ULLY GONE THROUGH I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .2202 2202 2202 2202/M /M/M /MDS DSDS DS/ // /201 201201 2016 66 6 4 THE AGREEMENT SAID TO BE ENTERED BY THE ASSESSEE AN D BUYER OF THE PROPERTY AND ALSO COPIES OF THE SALE DEED AVAILABLE IN THE PAPER- BOOK. A BARE READING OF THE AGREEMENT AND SALE DEED CLEARLY SHOW THAT THE ASSESSEE ACQUIRED 1.64 ACRES OF LAND AND D EVELOPED A COMPOSITE HOUSING PROJECT. THE ASSESSEE CONCEIVED T HE IDEA OF HOUSING PROJECT, DESIGNED, DEVELOPED AND EXECUTED T HE PROJECT IN A SYSTEMATIC MANNER. THE ASSESSEE ADMITTEDLY CONSTRUC TED 38 INDEPENDENT VILLAS AFTER OBTAINING NECESSARY APPROV AL OF PERUMBAKKAM PANCHAYAT. IT IS NOT IN DISPUTE THAT PE RUMBAKKAM PANCHAYAT IS THE COMPETENT AUTHORITY TO GRANT APPRO VAL FOR CONSTRUCTION OF INDEPENDENT VILLAS. AS RIGHTLY SUB MITTED BY THE LD.COUNSEL FOR THE ASSESSEE, WHAT IS REQUIRED TO BE DEVELOPED IS A HOUSING PROJECT. THE ASSESSING OFFICER MISCONSTRUE D THE TERM 'HOUSING PROJECT' TO A MULTISTORY RESIDENTIAL BUILD ING. A HOUSING PROJECT CAN BE AN INDEPENDENT VILLA OR IT MAY ALSO BE MULTISTORY RESIDENTIAL UNIT. IF THE ASSESSEE DEVELOPED INDEPEN DENT VILLAS IN A LAND EXCEEDING MORE THAN ONE ACRE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CLAIM OF THE ASSESSEE CANNOT BE RE JECTED. WHEN THE ASSESSEE DEVELOPED A COMPOSITE PROJECT OF LAYING OU T OF LAND OF MORE THAN ONE ACRE AND CONSTRUCTED INDIVIDUAL VILLAS THE REON, AND SOLD THE INDEPENDENT VILLAS TOGETHER WITH' LAND, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE COMPLIED WITH ALL THE CONDITIONS REQUIRED FOR CLAIMING EXEMPTION UNDER SECTION 80-IB (10) OF THE ACT. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. THIS TRIBUNAL DO NOT FIND ANY REASON TO I NTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SA ME IS CONFIRMED. 6. IN VIEW OF THE ABOVE, THE ORDER OF THE TRIBUNAL, WE INCLINED TO DISMISS THE APPEAL ON SIMILAR LINE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 25 TH JANUARY, 2017 AT CHENNAI. SD/- SD/- (DUVVURU RL REDDY) JUDICIAL MEMBER (CHANDRA POOJARI) ACCOUNTANT MEMBER CHENNAI, DATED, THE 25.01.2017 EDN I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .2202 2202 2202 2202/M /M/M /MDS DSDS DS/ // /201 201201 2016 66 6 5 !' #$ %$ /COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. & ( ) /CIT(A) 4. & /CIT 5. $'( ) /DR 6. (* + /GF