ACIT, Pune V. Shri Mahesh Pandurang Bhagwat., Pune

ITA 2364/PUN/2012

• Counselvise Citation: 236424514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: S N DOSHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.2364/PN/2012 (ASSESSMENT YEAR 2009-10) ACIT, CIRCLE-III, PUNE .. APPELLANT VS. SHRI MAHESH PANDURANG BHAGWAT, 1007-1009, JANKI CORNER, SADASHIV PETH, PUNE-411030 PAN NO. ABBPB2876P .. RESPONDENT ASSESSEE BY : SHRI S.N. DOSHI REVENUE BY : SHRI S.P. WALIMBE DATE OF HEARING : 04-03-2014 DATE OF PRONOUNCEMENT : 10-03-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 16-07-2012 OF THE CIT(A)-II, PUNE RELATING TO ASSESSMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND PROPRIETOR OF M/S. JANKI CONSTR UCTIONS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF RESIDENTIAL UNITS. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING INCOME AT RS. 20,17, 640/- AFTER CLAIMING DEDUCTION U/S 80IB(10) OF RS. 74,02,267/ - IN RESPECT OF THE HOUSING PROJECT 'JANKI RAINBOW'. THE A.O. ASSESSED THE SAME DETERMINING TOTAL INCOME AT RS. 94,19,910/- DENYING THE AFORESAID DEDUCTION U/S. 80IB(10) OF THE ACT. DURING THE COU RSE OF ASSESSMENT 2 PROCEEDINGS THE AO NOTED THAT THE HOUSING PROJECT W AS CONSTRUCTED ON A PLOT ADMEASURING 3283 SQ. MTRS., THEREFORE, TH E AREA WAS LESS THAN 1 ACRE I.E. 4047 SQ. MTRS. AS REQUIRED BY THE PROVISION OF SECTION 80IB(10) OF THE IT. ACT, FOR CLAIMING THE AFORESAID DEDUCTION. ON BEING QUESTIONED BY THE A.O. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE PLOT WAS 4500 SQ.MTRS. WHICH IS SUPPORTED BY THE PURCHASE AGREEMENT AND THE PMC HAD ALSO SANC TIONED THE PLAN. HOWEVER, THE PMC I.E. THE SANCTIONING AUTHORI TY DECIDES THE MAXIMUM PERMISSIBLE FLOOR SPACE AREA WHICH CAN BE C ONSTRUCTED ON A PLOT AS PER THEIR RULES AND REGULATIONS AND ACCORDI NGLY HAD GRANTED PERMISSION TO CONSTRUCT ONLY 3283.60 SQ. MTRS. AFTE R ALLOWING THE DEDUCTION FOR GREEN BELT, NALLA, GARDEN AND INTE RNAL ROAD RESERVATIONS ETC. WHICH LED TO THE PHYSICAL REDUC TION IN THE SIZE OF THE PLOT. THE ASSESSEE ALSO RELIED ON THE CBDT CIRC ULAR NO. 5/2005. HOWEVER, THE AO DID NOT ACCEPT THE ABOVE SUBMISSION S BY THE ASSESSEE. RELYING ON THE DECISION OF THE PUNE BENC H OF THE TRIBUNAL IN THE CASE OF OM ENGINEERS AND BUILDERS VS. ITO R EPORTED IN (2006) 104 TTJ 604 (PUNE) HE HELD THAT THE CONDITIO N PRESCRIBED IN THE SECTION 80IB(10) FOR CLAIMING THE DEDUCTION WAS NOT FULFILLED. THE AO FURTHER NOTED THAT THE APPEALS FOR A.Y. 2007 -08 AND A.Y. 2008-09 IN ASSESSEE'S CASE HAVE BEEN DECIDED IN ITS FAVOUR. HOWEVER, THE DEPARTMENT HAD FILED APPEALS BEFORE THE TRIBUNA L AND THE DECISION IS AWAITED. THEREFORE, TO KEEP THE MATTER ALIVE HE REJECTED THE CLAIM OF THE ASSESSEE. 2.1 IN APPEAL THE LD.CIT(A) FOLLOWING THE ORDER OF HIS PREDECESSOR FOR A.Y. 2007-08 AND 2008-09 AND THE ORDER OF THE T RIBUNAL IN 3 ASSESSEES OWN CASE FOR A.Y. 2007-08 DECIDED THE AP PEAL IN FAVOUR OF THE ASSESSEE. 3. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPE ALS) ERRED IN HOLDING THAT THE DEDUCTION UNDER SEC. 80IB(10) IS A DMISSIBLE IN THE CASE OF A HOUSING PROJECT WHERE THE ACTUAL AREA OF CONST RUCTION IS LESS THAN ONE ACRE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) GROSSLY ERRED IN NOT APPRECIATING THAT TO CLAIM THE DEDUCTION U/S 80IB(10), THE PHYSICAL SIZE OF THE LAND ON WHICH THE PROJECT IS BUILT SHOUL D BE AT LEAST ONE ACRE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APP EALS) ERRED IN FAILING TO APPRECIATE AND APPLY CIRCULAR NO. 5 DT. 15.07.2005 ISSUED BY THE CBDT WHEREIN IT WAS CATEGORICALLY STATED THAT T HE AREA LIMIT OF THE PLOT HAS TO BE CONSTRUED WITH REFERENCE TO THE AREA OF THE SITE ON WHICH THE HOUSING PROJECT IS CONSTRUCTED AND NOT WITH REFE RENCE TO THE DEMARCATION OF LAND DONE BY THE DEVELOPMENT AUTHORI TY. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APP EALS) ERRED IN FAILING TO APPRECIATE THAT THE AREAS RESERVED FOR G REEN BELT, NALA GARDEN AND EXISTING INTERNAL ROAD, WHICH ARE DEDUCTED FROM THE AREA OF THE HOUSING PROJECT ARE NOT TOWARDS THE AMENITIES OF THE HOUSING PROJECT. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) ERRED IN FAILING TO APPRECIATE THAT THE PERMISSION GRANTED F OR THE TOTAL CONSTRUCTION OF THE PROJECT WAS FOR 3283.60 SQ. MTRS AND AS SUCH, THE PERMISSION IS NOT IN PROPORTION OF THE PLOT AREA OF 4500 SQ. MTRS. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPE ALS) ERRED IN APPLYING THE DECISION IN THE CASE OF BUNTY BUILDERS WHEN THE FACTS OF THE PRESENT CASE ARE PATENTLY DISTINGUISHABLE. 4. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFO RE THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2007-08. THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND DISMISSED THE A PPEAL FILED BY THE REVENUE BY OBSERVING AS UNDER : 4. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE RAISED B Y THE REVENUE IN THIS APPEAL IS SQUARELY COVERED IN FAVOU R OF THE ASSESSEE BY THE DECISION CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE 4 CASE OF M/S. BUNTY BUILDERS (SUPRA). IN THE CASE OF M/S . BUNTY BUILDERS (SUPRA) THERE WERE DEDUCTIONS MENTIONED FOR R OAD WIDENING AREA, OPEN SPACE, AREA UNDER INTERNAL ROADS, AMENITIES SPACES AND TRANSFORMER AND THE NET AREA AFTER DEDUCTIO N CARNE ONLY TO 2923.25 SQ. MTRS. THE TRIBUNAL ALSO RELIED UPON THE CBDT CIRCULAR NO. 5 OF 2005 DATED 15-7-2005 WHICH CONTAINED THE E XPLANATORY NOTES ON AMENDMENTS BROUGHT OUT BY THE FINANCE ACT (N O. 2) CITED IN 276 ITR 170 (STATUTE), WHEREIN THE GUIDELINES ISSUED W ERE AS FOLLOWS: 'EXTENSION OF THE TIME LIMIT FOR OBTAINING APPROVAL OF HOUSING PROJECTS FOR THE PURPOSE OF TAX HOLIDAY UNDER SECTION 80-IB AND ALLOWING DEDUCTION FOR RE-DEVELOPMENT OR RECONST RUCTION OF EXISTING BUILDING IN SLUM AREAS. THIS SECTION DOES NOT SPECIFICALLY PROVIDE AREA LIMIT F OR THE GARDEN, THE DEVELOPMENT PLAN ROADS, INTERNAL MEANS O F ACCESS, ETC., IN THE HOUSING PROJECT. THEREFORE, THE S AME SHOULD CONFORM TO THE PROJECT PLAN APPROVED BY THE LOCAL AUTHORITY IN ACCORDANCE WITH THE REGULATIONS IN FORC E. ALSO, THE AREA LIMIT OF THE PLOT HAS TO BE CONSTRUED WITH R EFERENCE TO THE AREA OF THE SITE ON WHICH THE HOUSINGPROJECT IS CONSTRUCTED AND NOT WITH REFERENCE TO THE DEMARCATI ON OF LAND DONE BY THE LAND DEVELOPMENT AUTHORITY'. 5. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF T HE TRIBUNAL IN THE CASE OF BUNTY BUILDERS (SUPRA), WE HOLD THAT TH E ASSESSEE IS ENTITLED TO DEDUCTION U/S 80.18(10) OF THE ACT BASED ON THE AREA OF THE PLOT AS PER 7/12 EXTRACT BEING 4500 SQ. MTRS, WHIC H IS MORE THAN THE MINIMUM STIPULATED AREA OF ONE ACRE (4047 SQ. MTR S). ACCORDINGLY, WE DIRECT THE AUTHORITIES BELOW TO ALLO W THE DEDUCTION U/S 80-16(10) AS CLAIMED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED 4.1 WE FURTHER FIND THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NO.824/PN/2011 ORDER DATED 28-08-2012 FOR A.Y. 2008 -09 HAS UPHELD THE ORDER OF THE CIT(A) AND DISMISSED THE AP PEAL FILED BY THE REVENUE. SINCE THE ASSESSEES CASE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL FOR A.YRS. 2007-08 AND 2008-09, THEREFORE, RESPECTFULLY FOLLOWING THE DECI SION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE 2 PRECEDING YEARS AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOT ICE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ALLOWING THE C LAIM OF DEDUCTION 5 U/S.80IB(10) OF THE ACT MADE BY THE ASSESSEE. WE A CCORDINGLY UPHOLD THE SAME AND THE GROUNDS RAISED BY THE REVEN UE ARE DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON 10-03-2014. SD/- SD/- (R.S.PADVEKAR ) ( R.K. PAND A ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED 10 TH MARCH , 2014 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE 5. THE DR B BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE