Vijaysingh J Jadhavrao, Pune V. Income-tax Officer, Ward - 2(5), Pune

ITA 2245/PUN/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2832 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 25-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: HARI KRISHAN
• Keywords: Business income; Revised return
• Section: 80C; 143(3); 80IB; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA No. 2245/PUN/2017 (Assessment Year: 2012-13) Shri Vijaysingh Jaysingh Jadhavrao Shivajinagar Jangali Maharaj Road Pune 411005 Vs. The Income Tax Officer - 2(5) PMT Building Swargate, Pune 411037 PAN – AAQPJ3021L Appellant Respondent Appellant by: Shri Hari Krishan Respondent by: Shri S.P. Walimbe Date of Hearing: 29.04.2022 Date of Pronouncement: 06.05.2022 O R D E R Per S.S. Godara, JM This assessee’s appeal for AY 2012-13 is against the CIT(A)-3, Pune’s order dated 28.07.2017 passed in case No. CIT (A), Pune-3/10424/2015-16 involving proceedings under Section 143(3) of the Income Tax Act, 1961 (in short the Act). Heard both parties. Case file perused. 2. A perusal of the assessee’s main as well as additional substantive ground indicates that his first and foremost grievance is directed against the learned lower authorities’ action denying Section 80IB(10) deduction of Rs.3,76,98,194/- as derived from sale of housing project/unit as per corresponding joint venture agreement dated 01.12.2006 executed with M/s. Raviraj Realties. His next argument in light of the additional ground read with additional evidence petition dated 26.04.2022 is that its foregoing income deserves to be treated under the head “capital gains” wherein the cost of ITA No. 2245/Pun/2017 Shri Vijaysingh Jaysingh Jadhavrao 2 acquisition in lieu of valuable consideration comes to “Nil” only since the first predecessor in interest had been granted “Inam” by the erstwhile ruling clan. Learned counsel has taken pains to file a detailed note of arguments as well reading as under: - “1. I respectfully submit as follows: 2. The assessee is a descendent of Subeder Pilajiro, who was in the service of Sambhaji Maharaj. As noted by the Assessing Officer on page 5 para 5 of the assessment order, the assessee has given ancestral land at village Wagholi, Taluka Haveli, Dist Pune for development to M/s Raviraj Realities, by way of a Joint Venture Agreement dated 01-12-2006 here in after also referred to as Joint Venture Agreement (Paper Book No. 1). As mentioned on page 5 of the Joint Venture Agreement the assessee has received the said land under the will and testament dated 27-08-1966 of his grandfather Sh. Amrutrao Sambhaji Jadhavrao. Somewhere in 18 th Century, Subeder Pilajirao was awarded a large piece of land in village Wagholi as “INAM” by Sambhaji Maharaj. He copy of extract of the Alienation Register maintained by the Pune District Administration, provided by the Assistant Director Archives Office Pune, in response to the assessee‟s application dated 03-12-2021, evidencing the same is placed at Page No. 1 to 6 of the Paper Book No. 2 (additional evidence). Entry No. 228 (1685) under the village „Vagholi‟ shows that in pursuance of the order dated 08-06-1870 of His Excellency, The Governor of Bombay, the land bearing survey No. 136 awarded as “Class-II Personal INAM” is entered in the Alienation Register, in the name of Sambhajirao Bin Anandrao Subhanrao Bin Laxmanrao Jadhavrao and the name of the earlier holder is metioned as Anandrao Pilaji Jhadav Vagholikar. As per the copy of the family tree of Shri Pilajirao (enclosed herewith) the assessee is the descendent of Subeder Pilajirao. 3. As mentioned in Para 10 of the Joint Venture Agreement, the assessee and M/s. Raviraj Realities have created a Joint Venture “Raviraj Realities and Viraj Venture Assocaites – Ozon”. Under the said Joint Venture Agreement the assessee and M/s Raviraj Realities were respectively entitled to withdraw 20% and 80% of the sale proceeds of the constructed area. The assessee has withdrawn an amount of Rs.3,76,98,194/- in the assessment year under consideration. 4. In view of the said joint venture created by the Joint Venture Agreement with particular reference to its para 35 reproduced below, the assessee was of the view that the amount of Rs.3,76,98,194/- withdrawn from the joint venture Association Of ITA No. 2245/Pun/2017 Shri Vijaysingh Jaysingh Jadhavrao 3 Persons is the capital withdrawn from the joint venture and was not taxable under the Income Tax Act. “35. Nothing herein contained shall be construed as constituting or implying or importing or imposing any provisions of Partnership Act ad this agreement shall always be deemed to be a is purely a Joint Venture Agreement between the party of the First Part and party of the Second Part, as Association of Persons as contemplated hereunder. Further it is not the intention of the parties hereto to carry on the said business other in partnership or as agents of one another.” The assessee has accordingly not declared any income in his return of income in respect of the amount of Rs.3,76,98,194/- withdrawn in the Assessment Year under consideration. 5. When the Assessing Officer, in the scrutiny assessment proceedings, raised the query, as to why addition should not be made to the income on account of the amount of Rs.3,76,98,194/-, the assessee vide letter dated 25-03-2015 of Sh. V.S. Karmakr, Chartered Accountant filed in respect of the hearing dated 16-03- 2013, made the claim before the Assessing Officer that the assessee is eligible for deduction u/s 80IB(10) of the Income Tax Act in respect of the amount of Rs.3,76,98,194/-. It was further submitted that M/s Raviraj Realities, the other party to the joint venture has already claimed deduction u/s 80IB (10) of the Act in respect of 80% of the sale proceeds of the joint Venture. The copy of the assessment order in the case of M/s Raviraj Realities was produced before the Assessing Officer. It was argued that on the same lines the assessee is also eligible for deduction u/s 80IB(10) of the Income Tax Act and therefore no addition is warranted to the income of the assessee on this account. 5.1 As mentioned in page 4 Para 5 of the assessment order, the assessee has also filed, necessary supporting documents such as bank account extract, extract of the account of M/s Raviraj Realities alongwith the confirmation from M/s. Raviraj Realities in respect of the amount of Rs.3,76,98,194/- received from them. 5.2 The Assessing Officer however did not accept the contention of the assessee and made addition of Rs.3,76,98,194/- u/s 68 of the Income Tax Act by completely disregarding the supporting documents such as Bank account extract, the extract of the account of M/s Raviraj Realities and confirmation from M/s Raviraj Realities. 5.3 In Para 5.1 of the assessment order the Assessing Officer though has mentioned that the deduction u/s 80IB(10) of the Income Tax Act cannot be allowed in view of the judgement of the Hon‟ble Supreme Court in the case of Goetze (India) Ltd. [2006] 157 Taxman 1 (SC)/[2006) 284 ITR 323 (SC) wherein it is held that the claim made by the assessee otherwise than by filing a revised return is not allowable, however the Assessing Officer has ITA No. 2245/Pun/2017 Shri Vijaysingh Jaysingh Jadhavrao 4 proceeded to the examine the claim of deduction u/s 80IB(10) on merits in detail and has held that the assessee could not establish that the conditions laid down in section 80IB(10) are fulfilled, because the assessee has not submitted the copies of the approved plan, commencement certificate and completion etc.” 3. We have given out thoughtful consideration to assessee’s foregoing contentions and find no merit therein. We make it clear that the learned counsel could hardly rebut the fact that the assessee had not raised any impugned 80IB deduction claim by filing Section 139(1) return within the “due date” prescribed in light of Section 80A(5) r.w.s. 80(a)(c) of the Act. We make it clear that Section 80A(5) postulates that no deduction under Chapter VI shall be allowed wherein the assessee concerned fails to make a claim in its return of income. This is coupled with the latter provision envisaging such a return is to be filed on or before the due date specified under Section 139(1) of the Act. There is further no issue that both these statutory provisions incorporate the clinching expression “shall” only. Meaning thereby that filing of a return on or before the date specified under Section 139(1) raising the impugned deduction claim very much forms a mandatory condition for the purpose of claiming Section 80IB(10 deduction. We thus adopt stricter interpretation in light of the Commissioner of Customs vs. Dilip Kumar (2018) 9 SCC (SC)(FB)) to affirm the learned lower authorities’ action disallowing the assessee’s Section 80IB(10) deduction in principle. Hon’ble jurisdictional high court’s recent decision in (2019) 107 taxmann.com 220 (Bom) EBR Enterprises vs. Union of India has also decided the instant issue against the assessee and in department’s favour that no deduction under Chapter VI-C is admissible in absence of a Section 139(1) return raising the corresponding claim. 4. Learned counsel at this stage quoted apex court’s landmark decision in Goetze (India) Ltd. (2006) 284 ITR 323 (SC) as well as CIT vs. Pruthvi Stock Brokers and Shareholders Pvt. Ltd 349 ITR 336 (Bom) that an assessee can very well be allowed to raise a afresh deduction claim in appellate proceedings as well without filing a revised return. He invited out attention to their lordships ratio that the jurisdiction of the appellate authorities under the provision of the Act qua an additional ground has nowhere been impinged ITA No. 2245/Pun/2017 Shri Vijaysingh Jaysingh Jadhavrao 5 upon as an Officer could not entertain a fresh claim without a revised return. Mr. Hari Krishan further made a very valiant attempt to buttress the point that when the Assessing Officer raises a particular issue in scrutiny in seeking to add an additional head of income/disallowance, as the case may be, the concerned assessee can very well raise its fresh deduction claim, if admissible in law. We find no merit in assessee’s instant argument as its case is hit by the foregoing statutory embargo ie Section 80A(5) r.w.s. 80C of the Act having overriding effect over all general provisions. We accordingly reject the assessee’s foregoing arguments to hold that its impugned Section 80IB(10) deduction is not allowable in law. 5. Next comes assessee’s latter stand that its income derived from the foregoing housing project ought to be assessed under the head capital gains wherein the cost of acquisition is “nil” only. The same is going against the assessee’s stand adopted all along that he is a developer having borne 20% risk in the housing project in the nature of adventure in real estate business. His computation has also treated this income as business income only. That being the case, we fail to understand as to how the assessee would be assessed as merely an investor in the land giving rise to the corresponding capital gains as prayed before us in the additional grounds. We accordingly reject assessee’s instant additional ground as well as evidence since not relevant to the issue of assessment of its alleged business income sought to be claimed as eligible for Section 80IB(10) deduction. The assessee fails in all of his latter arguments as well. 6. This assessee’s appeal is dismissed in above terms. 7. Order pronounced in the open court on 6 th May, 2022. Sd/- Sd/- (Dipak P. Ripote) (S.S. Godara) Accountant Member Judicial Member Pune, Dated: 6 th May, 2022 ITA No. 2245/Pun/2017 Shri Vijaysingh Jaysingh Jadhavrao 6 Copy to: The Appellant 1. The Respondent 2. The CIT(A) -3, Pune 3. The Pr. CIT - 2, Pune 4. The DR, “A” Bench, ITAT, Pune By Order //True Copy// Assistant Registrar ITAT, Pune Benches, Pune n.p.