The ACIT, Circle-6, Surat V. Smt. Sarla Rajkumar Verma , Surat

ITA 2269/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6252 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 08-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R N VEPARI
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ACIT, CIRCLE - 6, ROOM NO. 612, AAYAKAR BHAVAN, MAJURA GATE, SURAT 395001 (APPELLANT) VS SMT. SARLA RAJKUMAR VERMA, A/26, BHAGYALAXMI SOCIETY, PIPLOD, SURAT 395007 PAN: AICPV7936L (RESPONDENT) REVENUE BY : MR. ASHISH POP HARE , SR. D . R. ASSESSEE BY: MR. R.N. VEPARI A.R. DATE OF HEARING : 07 - 03 - 2 017 DATE OF PRONOUNCEMENT : 12 - 04 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTA NT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2010 - 11 , AR I SES FROM ORDER OF THE CIT(A) - I, SURAT DATED 26 - 05 - 2014 IN APPEAL NO. CAS - I/1 7 4/2013 - 14 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 2269 / A HD/20 14 A SSESSMENT YEAR 2010 - 11 I.T.A NO. 2269 /AHD/20 14 A.Y. 2010 - 11 PAGE NO ACIT VS. SMT. SARLA RAJKUMAR VERMA 2 2. THE REVENUE HAS RAIS ED FOLLOWING GROUND OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION OF RS.90,41,235/ - TO THE ASSESSEE OUT OF ADDITION OF RS. 90,41,235/ - MADE BY THE ASSESSING OFFICER ON ACCO UNT OF DISALLOWANCE OF CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE S THAT THE RETURN OF INCOME DECLARING INCOME OF RS. 20,27,444/ - WAS FILED ON 15 TH OCTOBER, 2010. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF CONSTRUCTION ACT IVITIES. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING NOTICE U/S. 143(2) ON 25 TH AUGUST, 2011. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSIN G OFFICER NOTICED THAT ASSESSEE HAS CLAIMED DEDUCTION OF RS. 90 , 41 , 235/ - AT 100% OF I TS TOTAL PROFIT U/S. 80IB(10) OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE LAND ON WHICH THE HOUSING PROJECT WAS CONSTRUCTED WAS PURCHASED BY LATE SHRI OMPRAKASH, GULABCHAND VARMA, PROPRIETOR OF M/S. SATYAM BUILDERS, FATHER OF THE ASSESSEE ON 19 T H JANUARY, 2007. THE APPLICATION AND PLAN FILED BY THE FIRM FOR THE APPROVAL OF THE LOCAL AUTHORITY AND LOCAL AUTHORITY ACCORDED THE PERMISSION FOR DEVELOPMENT AND CONSTRUCTION OF THE PROJECT ON 17 TH SEPTEMBER, 2009. THE ASSESSING OFFICER OBSERVED THAT A S PER THE PROVISION OF SECTION 80IB(10)(A)(I) WHEREIN HOUSING PROJECT WAS APPROVED BY LOCAL AUTHORITY BEFORE 01 - 04 - 2004 , TH EN THE SAME HAS TO BE COMPLETED ON OR BEFORE 31 ST MARCH, 2008 FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT. ON PERUSAL OF PURCHASE DEED THE ASSESSING OFFICER OBSERVED THAT PERMISSION FOR CONSTRUCTION FIRST WAS GRANTED BY THE SU RAT URBAN DEVELOPMENT AUTHORITY (SUDA) ON 05.02.1997 WHICH WAS TO BE I.T.A NO. 2269 /AHD/20 14 A.Y. 2010 - 11 PAGE NO ACIT VS. SMT. SARLA RAJKUMAR VERMA 3 COMPLETED ON OR BEFORE 31.03.2008 FOR CLAIMING DEDUCTION BUT THE SAME WAS ACTUALLY COMPLE TED ON 01.10.2010.IN VIEW OF THIS THE ASSESSING OFFICER CONCLUDED THAT THE DEDUCTION U/S 80IB(10) OF THE ACT WAS NOT AVAILABLE. THE ASSESSEE EXPLAINED THAT PERMISSION DT 05/02/97 TAKEN FROM SUDA BELONGED TO EARLIER OWNER OF THE LAND AND SHE FURTHER STATED THAT IN FAC T DEVELOPMENT PERMISSION WAS GRANTED BY THE LOCAL AUTHORITY ON 17 TH SEPTEMBER, 2009. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND DISALLOWE D THE CLAIM U/S. 80IB OF RS. 9 0 , 41 , 235/ - OF THE ACT. 4. AGGRIEVED AGAINST THE IMPUGNED ORDER OF THE ASSE SSING OFFICER, THE REVENUE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: - 5. I HAVE CONSIDERED THE FACTS OF THE; CASE AND SUBMISSIONS OF THE APPELLANT. IT IS CLE AR FROM THE ASSESSMENT ORDER AN D SUBMISSIONS OF APPELLANT THAT THE DATE OF PERMISSION FROM SUDA AS ON 05.0 2.1997 HAS BEEN TAKEN BY AO FROM PURCHASE DEED OF LAND FILED BY APPELLANT DURING ASSESSMENT PROCEEDINGS. BUT, IT WAS CLARIFIED BY APPELLANT DURING ASSESSMENT PROCEEDINGS TO AO AS WELL AS DURING AP PELLATE PROCEEDINGS THAT SAID D ATE OF PERMISSION WAS GRANTED TO EARLIER OWNER OF THE LAND, NOT THE APPELLANT. IT H AS BEEN CLEARLY EXPLAINED THAT LATE SHRI OMPR AKASH GULABCHAND VARMA, FATHER O F THE APPELLANT HAD PURCHASED THE LAND BY PURCHASED D OCUMENT DATED 19.01.2 007 FROM SHRI HEMANT ISHVARLAL DESAI AND AS PER DESCRIPTION GIVEN IN THE DOCUMENT, THE LAND WAS ORIGINALLY OF HUF OF JAYANTILAL JASHWANTISINH AND SHANTABE N BHAGWANSINH WITH NUMBER OF CO - PARCENERS A ND AFTER PARTITIONS AND TRANSFER, ULTIMATELY HEMANT ISHVARLAL DESAI PURCHASED LAND WHICH IS SOLD TO THE APPELLANT'S FATHER ON WHOSE DEATH THE PROJECT CAME TO THE APPELLANT. IT IS FURTHER CLARIFIED THAT THE SUDA HAD GIVEN PERMISSION AS ON 05.02 .1997 TO ITS ERSTWHILE OWNERS FOR MAKING PLOTS AND THEREAFTER CONSTRUCTION TO PLINTH AND LOUT OF THOSE PLOTS, TWO PLOTS WERE PUR CHASED BY HEMANT I. DESAI AS ON 27.03.2000 WHICH WAS SUBS EQUENTLY PURCHASED BY FATHER OF APPELLANT AND W HICH, IN TURN, I.T.A NO. 2269 /AHD/20 14 A.Y. 2010 - 11 PAGE NO ACIT VS. SMT. SARLA RAJKUMAR VERMA 4 CAME IN P OSSESSION OF APPELLANT. FROM THESE FACTS, IT IS CLEAR TH AT THE DATE OF 05.02.1997 HAS WRONGLY BEEN TAK EN BY AO FOR THE PURPOSE OF COM PUTING DEDUCTION U/S. 80IB(10) IN THE CASE OF HOUSING PROJECT COMPLETED BY APPELLANT. FROM THE FACTS, IT IS ALSO CLEAR THAT THE PERMISSION TO DEVELOP HOUSING PROJECT AS ON 23.02.2007 WAS OBTAINED IN THE NAME OF HEMAT ISHVARBHAI DESAI BECAUSE THE APPLICATION WAS MADE BY THE APPEL LANT EVEN WHEN LAND WAS UNDER NEGOTIATION. HOWEVER, THIS WAS REVISED BY PE RMISSION DATED 17.09.2009 AND AS PER REVISED PERMISSION, THE HOUSING PROJECT WAS COMPLETED AS ON 31.03.2010. IN VIEW OF THESE FACTS, IT IS CLEAR THAT THE AO SHOULD HAVE TAKEN THE DATE OF PERMISSION BY MUNICIPAL AUTHORITY AS ON 23.0 2.2007 AND DATE OF COMPLETION AS ON 31.03.2010 FOR COMPUTING THE DEDUCTI ON U/S. 80IB(10) OF THE ACT. AS PER SUB - CLAUSE (II) OF CLAUSE (A) OF SECTION 8 0IB(10), IN A CASE WHERE HOUSIN G PROJECT HAS BEEN OR IS APPROVED BY LOCAL AUTHORITY ON OR AFTER 01.04.2004 AND COMPLETED WITHIN 4 YEARS FROM THE END OF FINA NCIAL YEAR IN WHICH T HE HOUSIN G PROJECT IS APPROVED BY LOCA L AUTHORITY, DEDUCTION U/S..801B (10) IS ALLOWABLE OH THE PROFIT EARNED BY ASSESSEE ON SUCH PROJECT. IN THE CASE OF APPELLANT, PROJECT WAS COMMENCED ON 23.02.2007 AND COMPLETED WITHIN 4 YEARS FROM T HE END OF FINANCIAL YEAR OF COMMENCEMENT. THUS, THE CONDITION OF COMPLETION OF PROJECT WITHIN PRESCRIBED TIME IS FULFILLED BY ASSESSEE IN HER CASE. IN CASE OF OTHER CONDITIONS FOR ALLOWING DEDUCTION, AO HAS NOT RAIS ED ANY OBJECTION. THE CASE LAWS QUOTED BY APPELLANT IN HER S UBMISSIONS AL SO SUPPORT HER CASE. IN VIEW OF THESE FACTS, I HOLD THAT THE AO HAS WRONGLY DISALLOWED THE DEDUCTION. I, THEREFORE, ALLOW THE DEDUCTION OF RS. 90,41,235/ - U/S. 80IB(1) OF THE ACT TO APPELLANT. THE GROUNDS T AKEN BY APPELLANT ARE ALLOWED. 5. WE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE PAPER BOOK FURNISHED BY THE LD. COUNSEL DURING THE COURSE OF APPELLATE PROCEEDINGS CONTAINING DETAILS OF SUBMISSION MADE BEFORE THE ASSESSIN G OFF ICER AND LD. CIT(A) . WE HAVE NOTICED THAT SUDA HAD GIVEN PERMISSION AS ON 5 TH FEB, 199 7 TO ITS ERSTWHILE OWNERS FOR MAKING PLOTS AND THEREAFTER CONSTRUCTION TO PLINTH AND OUT OF THOSE PLOTS, TWO PLOTS WERE PURCHASED BY THIS HEMANT I DESAI AS ON 27 TH MARCH , 2000 WHICH WAS SUBSEQUENTLY I.T.A NO. 2269 /AHD/20 14 A.Y. 2010 - 11 PAGE NO ACIT VS. SMT. SARLA RAJKUMAR VERMA 5 PURCHASED BY THE FATHER OF THE ASSESSEE WHICH IN TURN CAME IN POSSESSION OF THE ASSESSEE. WE FURTHER NOTICED FROM THE SUPPORTING MATERIAL THAT THE PERMISSION TO DEVELOP HOUSING PROJECT WAS OBTAINED ON 23 RD FEB , 2007 WHICH WAS REVISED ON 17ND SEPTEMBER, 2009 AND AS PER THE PERMISSION THE HOUSING PROJECT WAS COMPLETED ON 31 ST MARCH, 2010. WE FIND THE LD.CIT(A) HAS ELABORATED IN HIS FINDINGS AND ORDER THAT THE CONDITION OF COMPLETION OF PROJECT WITHIN PRESCRIBED TIME WERE FULFI LLED BY ASSESSEE IN HER CASE . AFTER CONSIDERING THE ABOVE FACTS AND DETAILED ORDER OF THE LD.CIT(A) WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF THE LD.CIT(A). 6. IN THE RE SULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 12 - 04 - 201 7 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 12 /04 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,