The ACIT, Circle-5, Baroda V. M/s. Om Shiv Ashish Builders, Baroda

ITA 2322/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6247 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 30-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 80IB

Judgement Text

ITA NO .2322/AHD/2009 ASSESSM ENT YEAR 2004-05. . 1 IN THE INCOME TAX APPELLATE TRIBUNAL BBENCH, AHME DABAD. ( BEFORE SHRI T.K.SHARMA & SHRI A.K. GARODIA) I.T.A. NO. 2322/AHD/2009 (ASSESSMENT YEAR 2004- 05) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5, 5 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA. (APPELLANT) VS. M/S. OM SHIV ASHISH BUILDERS C/O. SHRI VIKRAM GUPTA, 1 ST FLOOR, 62, VISHWAS COLONY, JETALPUR ROAD, BARODA. (RESPONDENT) PAN: AAAEO 4660 G APPELLANT BY : SHRI SAMIR TEKRIWAL, SR. D. R. RESPONDENT BY : NONE. ( (( ( )/ )/)/ )/ ORDER PER: SHRI A.K. GARODIA, A.M. THIS IS A REVENUES APPEAL DIRECTED AGAINST THE ORD ER OF LD. C.I.T. (A)-V, BARODA DATED 12-5-2009 FOR ASSESSMENT YEAR 2004-05. 2. GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN ALLOWING DEDUCTION OF RS.26,98,178/- UNDER SECTION 80IB(10) OF THE INCOME TAX ACT DESPITE THE ASSESSEES UNDERTAKI NG NOT BEING APPROVED BY THE LOCAL AUTHORITY. THE LD. CIT (A) RELIED ON T HE ITATS DECISION IN THE CASE OF M/S. RADHE DEVELOPERS. THE SAID DECISIO N HAVE NOT BEEN ACCEPTED BY THE DEPARTMENT AND AN APPEAL TO THE HIG H COURT HAS BEEN FILED. ITA NO .2322/AHD/2009 ASSESSM ENT YEAR 2004-05. . 2 2. THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT TH E APPROVAL FOR DEVELOPING AND BUILDING HOUSING PROJECTS WAS GRANTE D TO THE ORIGINAL OWNERS OF THE LAND AND NOT TO THE ASSESSEE, WHO ACT ED ONLY AS AN AGENT FOR EXECUTION OF THE PROJECT WHICH RIGHTS WERE OBTAINED BY THE ASSESSEE FIRM FROM THE ORIGINAL OWNERS. 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE LAND B EING AN ESSENTIAL AND INTRINSIC PART OF DEVELOPING AND BUILDING OF A HOUSING PROJECT, APPROVAL IS GRANTED BY THE LOCAL AUTHORITY TO THE O WNER OF THE LAND FOR DEVELOPING AND BUILDING HOUSING PROJECTS THEREON, A ND ANY OTHER PERSON, TO WHOM HE ENTRUSTS THE WORKS CONNECTED WITH THE EXECU TION OF THE PROJECT INSTEAD OF TAKING IT UP HIMSELF, CANNOT BE SAID TO BE AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B Y THE LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 80IB(10) OF THE ACT. 4. THE LD. CIT(A) FAILED TO APPRECIATE THAT IT IS T HE OWNERS OF THE LAND WHO ENTERED INTO AGREEMENTS FOR SALE OF THE DEVELOP ED UNITS TO THE BUYERS AND THE ASSESSEE ACTED ONLY AS A CONFIRMING PARTY W HICH RENDERS THE OWNERS OF THE LAND AND NOT THE ASSESSEE AS AN UNDERTAKING IN TERMS OF SECTION 80IB(10). 5. THE LD. CIT (A) ERRED IN ADOPTING LIBERAL INTERP RETATION OF A BENEVOLENT PROVISION DESPITE THE SAME DOING VIOLENC E TO THE EXPRESS LANGUAGE USED IN THE PROVISION IN CONTRAVENTION OF THE RATIO SETTLED IN THE CASE OF PETRON ENGINEERING CONSTRUCTION P. LTD. VS. CBDT 175 ITR 523 (SC), CIT VS. BUDHARAJA & CO., 204 ITR 412 (SC), PA NDIAN CHEMICALS LTD. VS. CIT 262 ITR 278 (SC) AND IPCA LABORATORIES LTD. VS. CIT 262 ITR 278 (SC). 3. NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF NOTICE HAVING BEEN SERVED ON THE ASSESSEE AS PER THE ACKNOWLEDGEMENT A VAILABLE ON RECORD AND HENCE, WE PROCEED TO DECIDE THIS APPEAL OF THE REVE NUE EX-PARTE QUA THE ASSESSEE. ITA NO .2322/AHD/2009 ASSESSM ENT YEAR 2004-05. . 3 4. IT IS SUBMITTED BY THE LD. D.R. OF THE REVENUE T HAT THE LD. CIT(A) HAS DECIDED THIS ISSUE BY FOLLOWING THE TRIBUNAL DECISI ON RENDERED IN THE CASE OF SHAKTI CORPORATION IN ITA NO.1503/AHD/2008. HE SUBM ITTED THAT IN PARAGRAPH 4.3 OF HIS ORDER, IT IS NOTED BY THE LD. CIT(A) THA T IN THE CASE OF DECISION RENDERED IN THE CASE OF SHAKTI CORPORATION(SUPRA), THE TRIBU NAL HAS CAUTIONED THAT THE LAW LAID DOWN IN THE CASE OF M/S. RADHE BUILDERS ITA NO .2482/AHD/2006 CANNOT BE UNIVERSALLY APPLIED WITHOUT LOOKING INTO THE DEVELO PMENT AGREEMENT AND OTHER AGREEMENTS ENTERED INTO BY THE DEVELOPERS WITH THE LAND-OWNER. IT IS SUBMITTED THAT THIS TRIBUNAL DECISION RENDERED IN THE CASE OF SHAKTI CORPORATION (SUPRA) WAS NOT AVAILABLE TILL THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER ON 18- 12-2006 AND THE LD. CIT (A) HAS NOT PROVIDED AN OPP ORTUNITY TO THE A.O. IN THE LIGHT OF THIS DECISION OF THE TRIBUNAL RENDERED IN THE CASE OF SHAKTI CORPORATION (SUPRA) AND HENCE, THIS ISSUE SHOULD GO BACK TO THE FILE OF THE A.O. FOR FRESH DECISION AFTER CONSIDERING THE TRIBUNAL DECISION RE NDERED IN THE CASE OF SHAKTI CORPORATION (SUPRA). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D. R. OF THE REVENUE AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BEL OW. WE FIND THAT THE A.O. HAD REJECTED THE CLAIM OF THE ASSESSEE U/S. 80IB (10) O N THIS BASIS THAT THE ASSESSEE IS NOT THE LEGAL OWNER OF THE LAND ON WHICH HOUSING PR OJECT WAS DEVELOPED. THE LD. CIT (A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASS ESSEE BY FOLLOWING THE TRIBUNAL DECISION RENDERED IN THE CASE OF SHAKTI CORPORATION (SUPRA) AND ALSO THE EARLIER TRIBUNAL DECISION RENDERED IN THE CASE OF RADHE DEV ELOPERS (SUPRA). WE FIND THAT THE LD. CIT (A) HAS NOTED IN PARAGRAPH 4.3 THAT IN THE CASE OF SHAKTI CORPORATION (SUPRA), THE TRIBUNAL HAS CAUTIONED THAT THE LAW LA ID DOWN IN THE CASE OF M/S. ITA NO .2322/AHD/2009 ASSESSM ENT YEAR 2004-05. . 4 RADHE DEVELOPERS (SUPRA) CANNOT BE UNIVERSALLY APPL IED WITHOUT LOOKING INTO DEVELOPMENT AGREEMENT AND OTHER AGREEMENTS ENTERED INTO BY THE DEVELOPERS WITH THE LANDOWNER. IN THIS FACTUAL AND LEGAL POSITION, WE FEEL THAT THE LD, CIT(A) SHOULD HAVE OBTAINED REMAND REPORT FROM THE A.O. IN THE LIGHT OF THIS LATEST DECISION IN THE CASE OF SHAKTI CORPORATION (SUPRA) BUT THIS WAS NOT DONE BY THE LD. CIT (A) AND HENCE, WE FEEL THAT IN THE INTEREST OF JUSTICE, THIS ISSUE SHOULD GO BACK TO THE FILE OF THE A.O. FOR FRESH DECISION AFT ER EXAMINING THE DEVELOPMENT AGREEMENT AND OTHER AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH THE LANDOWNER IN THE LIGHT OF THESE TWO TRIBUNAL DECISIONS RENDER ED IN THE CASE OF SHAKTI CORPORATION (SUPRA) AND M/S. RADHE DEVELOPERS (SUPR A). WE THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT (A) AND RESTORE THE MATTER BACK TO THE FILE OF THE A.O. FOR FRESH DECISION AS PER THE ABOVE DISCUSSION, AFTER P ROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE REVENUE STANDS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 30 -06 - 2011. SD/- SD/- (T. K. SHARMA) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. DATED: 30- 06 - 2011. S.A.PATKI. ITA NO .2322/AHD/2009 ASSESSM ENT YEAR 2004-05. . 5 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-V,BARODA. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 28 - 06 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 29 / 06 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 29 - 6 -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 30 - 6 -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 30 - 6 -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..