ITO 17(3)(5), MUMBAI V. VARDHAN BUILDERS, MUMBAI

ITA 2202/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1682 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 29-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BUBGOTRA
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI M ANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 2202 / MUM/2017 ( ASSESSMENT YEAR : 20 12 13 ) INCOME TAX OFFICER WARD 17(3)(5), MUMBAI . APPELLANT V/S VARDHAN BUILDERS 422, COMMERCE HOUSE 140, NAGIN MASTER ROAD FORT, MUMBAI 400 023 PAN AAAFV0694B . RESPONDENT ITA NO. 2203/MUM/2017 ( ASSESSMENT YEAR : 2011 12 ) INCOME TAX OFFICER WARD 17(3)(5), MUMBAI . APPELLANT V/S VARDHAN BUILDERS 422, COMMERCE HOUSE 140, NAGIN MASTER ROAD FORT, MUMBAI 400 023 PAN AAAFV0694B . RESPONDENT 2 VARDHAN BUILDERS ITA NO. 2204/MUM/2017 ( ASSESSMENT YEAR : 20 10 11 ) INCOME TAX OFFICER WARD 17(3)(5), MUMBAI . APPELLANT V/S VARDHAN BUILDERS 422, COMMERCE HOUSE 140, NAGIN MASTER ROAD FORT, MUMBAI 400 023 PAN AAAFV0694B . RESPONDENT ASSESSEE BY : SHRI DINKLE HARIA REVENUE BY : SHRI RAJEEV BUBGOTRA DATE OF HEARING 31.07.2018 DATE OF ORDER 31.08.2018 O R D E R PER SAKTIJIT DEY, J.M. A FORESAID APPEAL S HAVE BEEN FILED BY THE REVENUE CHALLENGING THREE SEPARATE ORDERS , ALL DATED 2 ND DECEMBER 2016, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 28, MUMBAI, PERTAINING TO ASSESSMENT YEARS 2010 11, 2011 12 AND 2012 13. 2 . THE ONLY COMMON ISSUE RAISED BY THE REVENUE RELATES TO ALLOWANCE OF ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). 3 . SINCE , FACTS ARE COMMON IN ALL THES E APPEALS, EXCEPT VARIATION IN FIGUR ES, FOR THE SAKE OF CONVENIENCE WE PROPOSE TO DISCUSS THE FACTS AS 3 VARDHAN BUILDERS INVOLVED IN ITA NO.2204/MUM./2017, FOR THE ASSESSMENT YEAR 2010 11, AS THE SUBSTANTIVE ORDER OF THE LEARNED COMMISSIONER (APPEALS) RELATES TO THIS ASSESS MENT YEAR. 4 . BRIEF FACTS ARE, FOR THE ASSESSMENT YEAR 2010 11 THE ASSESSEE FILED ITS RETURN OF INCOME ON 24 TH SEPTEMBER 2010 DECLARING NIL INCOME AFTER CLAIMING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF A RESIDENTIAL HOUSING PROJECT , NAMELY , POSEIDON, AT YARI ROAD, VARSOVA, ANDHERI (WEST), MUMBAI. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY AND IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF THE PROFIT DERIVED FROM SALE OF FLATS IN THE AFORESAID HOUSING PROJECT. HE ALSO FOUND THAT A SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 1 ST DECEMBER 2011 AND DURING THE SURVEY IT WAS FOUND THAT THERE IS VIOLATION OF VARIOUS CONDITIONS OF SECTION 80IB(10) OF THE ACT IN RELATION TO THE CONCERNED HOUSING PROJECT . T HEREFORE, HE CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT SHO ULD NOT BE DISALLOWED. IN RESPONSE, THE ASSESSEE MADE ELABORATE SUBMISSIONS VIDE LETTER DATED 31 ST JANUARY 2013, JUSTIFYING THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. IN THE SAID LETTER, THE ASSESSEE FURNISHED THE DETAILS OF FLAT S IN THE HOU SING PROJECT INCLUDING THEIR 4 VARDHAN BUILDERS BUILT UP AREA AND ALSO EXPLAINED THAT ALL THE CONDITIONS OF SECTIO N 80IB(10) OF THE ACT WAS SATISFIED. IT WAS SUBMITTED THAT THE COMMENCEMENT OF THE PROJECT WAS APPROVED ON 15 TH APRIL 2002, AND WAS COMPLETED IN MARCH 2008. IT W AS SUBMITTED THAT SIZE OF EACH FLAT IN THE HOUSING PROJECT IS LESS THAN 1,000 SQ.FT. AND THE TOTAL AREA OF LAND ON WHICH THE HOUSING PROJECT WAS CONSTRUCTED IS MORE THAN ONE ACRE. FURTHER, IT WAS SUBMITTED THAT THE COMMERCIAL AREA DEVELOPED IS ABOUT 179.96 SQ.MTR. WHICH IS LESS THAN 5% OF THE TOTAL CONSTRUCTED AREA OR 2,000 SQ.FT. , WHICHEVER IS LOWER, AS PER THE PROVISION OF THE ACT. THUS, IT WAS SUBMITTED THAT THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT IS TO BE ALLOWE D. IN SUPPORT OF HIS CONTE NTION THE ASSESSEE ALSO FURNISHED VARIOUS DOCUMENTARY EVIDENCES. THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WHILE REFERRING TO THE OBSERVATIONS OF THE SURVEY TEAM OBSERVED THAT SOME OF THE FLATS IN THE HOUSING PROJECT MEASURED MORE THAN 1,000 SQ.FT. REFERRING TO COPIES OF ADVERTISEMENT GIVEN IN NATIONAL DAILIES, HE OBSERVED THAT THE HOUSING PROJECT H AS FLATS 2/3/4 BED ROOM, HALL, KITCHEN AND PENT HOUSES. REFERRING TO CERTAIN MATERIAL FOUND DURING SURVEY, THE ASSESSING OFFICER UL TIMATELY CONCLUDED THAT ASSESSEE HAS NOT COMPLIED TO THE CONDITION OF SECTION 80IB(10) OF THE ACT AS SOME OF THE FLATS CONSTRUCTED IN A WING OF THE BUILDING EXCEEDS 1,000 SQ.FT. THUS, HE PASSED THE ASSESSMENT ORDER DISALLOWING ASSESSEES CLAIM OF 5 VARDHAN BUILDERS DEDUCTI ON UNDER SECTION 80IB(10) OF THE ACT. BEING AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 5 . THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE FOUND THAT SIM ILAR DISALLOWANCE MADE BY THE ASSESSING OFFICER ON IDENTICAL REASONING IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 09 AND 2009 10 W AS DELETED BY THE LEARNED COMMISSIONER (APPEALS) WHILE DECIDING ASSESSEES APPEAL S . HE FURTHER NOTED THAT WHEN THE DEPART MENT WENT IN APPEAL BEFORE THE TRIBUNAL CHALLENGING THE DELETION, THE TRIBUNAL UPHELD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 09 AND 2009 10, THE LEARNED COMMISSIONER (APPEALS) ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE , THOUGH , AGREED THAT IN THE EARLIER ASSESSMENT YEARS THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, HOWEVER, HE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER. 7 . THE LEARNED AUTHORISED REPRESENTATIVE STRONGLY RELIED UPON THE DECISION OF THE TRIBUNAL IN EARLIER ASSESSMENT YEAR S . 6 VARDHAN BUILDERS 8 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATER IALS ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, RELYING UPON THE OBSERVATIONS OF THE SURVEY TEAM AS WELL AS CERTAIN OTHER MATERIALS FOUND DURING SURVEY, THE ASSESSING OFFICER HAS CONCLUDED THAT SOME OF THE FLATS IN THE A WING EXCEEDED THE PRES CRIBED LIMIT OF 1,000 SQ.FT. AS PROVIDED UNDER SECTION 80IB(10) OF THE ACT. ACCORDINGLY, HE DISALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. NOTABLY, DISALLOWANCE OF ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON IDENTICAL REASONING WAS MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2008 09 AND 2009 10. HOWEVER, WHILE DECIDING ASSESSEES APPEAL S FOR THE SAID ASSESSMENT YEAR S , THE LEARNED COMMISSIONER (APPEALS) AFTER EXAMINING THE MATERIAL ON RECORD FOUND THAT ALL THE CONDITIONS OF SECTION 80IB(10) OF THE ACT WERE SATISFIED BY THE ASSESSEE. THEREFORE, HE ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE AFORESAID ORDERS OF THE LEARNED COMMISSIONER (APPEALS) FOR ASSESSMENT YEAR S 2008 0 9 AND 2009 10, WERE CHALLENGED BY THE DEPARTMENT BEFORE THE TRIBUNAL. THE TRIBUNAL WHILE DECIDING REVENUES APPEAL ON THE DISPUTED ISSUE IN ITA NO.4635/MUM./2013, DATED 28 TH OCTOBER 2013, FOR THE ASSESSMENT YEAR 2009 10 UPHELD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) BEING SATISFIED WITH THE FACT THAT CONDITIONS OF SECTION 80IB(10) OF THE ACT IN RESPECT OF THE HOUSING PROJECT WERE SATISFIED. 7 VARDHAN BUILDERS THE SAME VIEW WAS AGAIN EXPRESSED BY THE TRIBUNAL WHILE DECIDING THE REVENUES APPEAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 09 IN ITA NO.4081/MUM./2014, DATED 25 TH OCTOBER 2016. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT BROUGHT TO OUR NOTICE ANY DIFFERENCE IN FACT BETWEEN ASSESSMENT YEAR 2008 09 AND 2009 10 AND THE ASSESSMENT YEARS WHICH ARE UNDER APPEAL BEFORE US. THEREFORE, RESPECTFULLY FOLLOWING THE CONSISTENT VIEW OF THE TRIBUNAL IN ASSESSEES OWN CASE , AS AFORESAID, WE UPHOLD THE DECISION OF THE LEARNED COMMIS SIONER (APPEALS) ON THE ISSUE OF ALLOWABILITY OF ASSESSEES CLAIM OF DEDUCTION UN DER SECTION 80IB(10) OF THE ACT. CONSEQUENTLY , THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9 . THE AFORESAID DECISION OF OURS APPLIES MUTATIS MUTANDIS TO THE OTHER TWO APPEALS UNDER CONSIDERATION. 10 . IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.08.2018 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 31.08.2018 8 VARDHAN BUILDERS COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI