Smt. Saroj Kapoor P/o. Krishana Homes, Bhopal V. The A..C.I.T., Indore

ITA 238/IND/2010

• Counselvise Citation: 23822714 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: H P VERMA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 238/IND/2010 A.Y. 2006-07 SMT. SAROJ KAPOOR BHOPAL PAN ABWPK 4857E ..APPELLANT V/S. ACIT-1(1), BHOPAL ..RESPONDENT DATE OF HEARING : 6.9.2011 DATE OF PRONOUNCEMENT : 14.10.2011 APPELLANT BY : SHRI H.P. VERMA A ND SHRI ASHISH GOYAL RESPONDENT BY : SHRI ARUN DEWAN ORDER PER JOGINDER SINGH, JUDICIAL MEMBER 2 THIS APPEAL IS BY THE ASSESSEE CHALLENGING THE ORD ER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DATED 21.9.2010 ON THE GROUND THAT ON THE FACTS AND IN TH E CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY ERRED IN SUSTAINING THE DISALLOWANCE OF RS.51,143/- U/S 8 0IB(10) OF THE ACT AND FURTHER BY HOLDING THAT THE ASSESSMENT WAS BARRED BY LIMITATION AS THE ASSESSMENT ORDER WAS RECEIVED ON 2.1.2009. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I H.P. VERMA ALONG WITH SHRI ASHISH GOYAL, LD. COUNSEL FOR ASSESSEE AND SHRI ARUN DEWAN, LEARNED SR. DR. THE CRUX OF A RGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE AMENDMENT MAD E TO SECTION 80IB(10) REGARDING BUILT UP AREA IS NOT APP LICABLE TO THE PROJECTS WHICH WERE APPROVED BEFORE 1.4.2005. IT W AS SUBMITTED THAT SANCTION OF APPROVAL WAS GRANTED ON 8.10.1998 AND COMPLETION CERTIFICATE WAS ISSUED ON 30.4.2005 AS THE PROJECT WAS COMPLETED ON MARCH, 2005. IN NUTSHELL, IT WAS SUBMITTED THAT THE DEFINITION WHICH WAS MADE EFFECT IVE FROM 1.4.2005 IS NOT APPLICABLE TO THE FACTS OF THE PRES ENT FOR WHICH 3 RELIANCE WAS PLACED ON THE DECISION IN 14 ITJ 585 ( INDORE) ORDER DATED 16.4.2010. RELIANCE WAS ALSO PLACED IN 197 TAXMAN 459 (BOM). ON THE OTHER HAND, THE LEARNED SR DR DEFENDED THE I MPUGNED ORDER BY PLACING RELIANCE ON THE DECISION IN 120 IT R 921 (SC). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS CARRYING ON THE BUSINESS OF DEVELOPER A ND BUILDER, DECLARED INCOME OF RS. 18,04,570/- AFTER CLAIMING D EDUCTION U/S 80IB(1) OF THE ACT AMOUNTING TO RS.51,143/-. THE BO OKS OF ACCOUNT ARE DULY AUDITED ON THE PRESCRIBED FORM 10C CB WHICH WAS FURNISHED ALONG WITH THE RETURN. THE ASSESSING OFFICER DISALLOWED THE AMOUNT OFRS.51,143/- WHICH WAS CLAIM ED U/S 80- IB(10) OF THE ACT. BEFORE COMING TO ANY CONCLUSION , WE ARE REPRODUCING HEREUNDER SECTION 80IB(10) OF THE ACT : - [(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH, 6A [ 2008 ] BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY 4 ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE (A) OR CLAUSE (B) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH A SCHEME 5 FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DECLARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITY OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; 6B [ AND ] (D) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED FIVE PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR TWO THOUSAND SQUARE FEET, WHICHEVER IS LESS.] THE FOLLOWING CLAUSES (E) AND (F) SHALL BE INSERTED AFTER CLAUSE (D) OF SUB-SECTION (10) OF SECTION 80-IB BY THE FINANCE (NO. 2) ACT, 2009, W.E.F. 1-4-2010 : (E) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND (F) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UNIT IN SUCH HOUSING PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS, NAMELY: (I) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL, (II) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA, 6 (III) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA. 6C [ EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY TO ANY UNDERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT). ] SUB-SECTION (10) TO SECTION 10IB WAS SUBSTITUTED BY THE FINANCE (NO. 2) ACT, 2004 WITH EFFECT FROM 1.4.2005 . PRIOR TO ITS SUBSTITUTION, SUB-SECTION (10) AS AMENDED BY THE FI NANCE ACT, 2000, WITH EFFECT FROM 1.4.2001 AND FINANCE ACT, 20 03 WITH EFFECT FROM 1.4.2002 READ AS UNDER :- (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAK ING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31 ST DAY OF 2005 BY A LOCAL AUTHORITY SHALL BE 100% OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESS MENT YEAR FROM SUCH HOUSING PROJECT IF; (A) SUCH UNDERTAKING HAS COMMENCE OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE IST DAY OF OCTOBER, 1998 (B) THE PROJECT IS ON THE SIZE OF THE PLOT WHICH HAS A MINIMUM AREA OF ONE ACRE, AND 7 (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT UP AREA O F 1000 SQ.FT. WHICH SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN 25 KMS FROM THE MUNICIPAL LIMITS OF THESE CITIES AND 1500 SQ.FT. AT ANY OTHER PLACE. IF THE AFORESAID PROVISIONS OF THE ACT IS KEPT IN J UXTAPOSITION WITH THE FACTS OF THE PRESENT APPEAL, WE FIND THAT THE P LAN WAS APPROVED ON 8.10.1998 (PAGE 10) OF THE PAPER BOOK. THE PROJECT WAS COMPLETED ON 30.4.2005 (COMPLETION CERT IFICATE AT PAGE 33 OF THE PAPER BOOK). IN VIEW OF THESE FACTS , IT CAN BE SAID THAT THE AMENDED PROVISION IS NOT APPLICABLE T O THE FACTS OF THE PRESENT APPEAL. THE ASSESSEE IS FORTIFIED BY T HE DECISION OF INDORE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS . SMT. SAROJ KAPOOR (2010) 14 ITJ 585 WHEREIN THE DEFINITION OF BUILT UP AREA U/S 80IB(10) OF THE ACT HAS BEEN DISCUSSED AND WAS DECIDED IN FAVOUR OF THE ASSESSEE. EVEN OTHERWISE, THE PROVISI ON IS BENEFICIAL, THEREFORE, IT SHOULD BE INTERPRETED IN A LIBERAL MANNER. SECTION 80IB(14) OF THE ACT WHICH DESCRIBE S BUILT UP AREA WAS INTRODUCED PROSPECTIVELY AND APPLIES WITH EFFECT FROM ASSESSMENT YEAR 2005-06 AND PRIOR TO THAT DEFINITIO N THE LOCAL LAWS SHALL BE ADOPTED. AN ELABORATE DISCUSSION HAS BEEN 8 MADE BY THIS BENCH IN THE CASE OF GLOBAL REALITY AN D GLOBAL STATES (ITA NO. 145/IND/2011, 434/IND/10, 86/IND/20 11 AND 81 TO 85/IND/2011) WHICH ARE NOT BEING REPEATED BEING A MATTER OF RECORD. VARIOUS JUDICIAL PRONOUNCEMENTS HAVE ALSO B EEN DISCUSSED IN THE AFORESAID CASES. THEREFORE, RESPE CTFULLY FOLLOWING THE SAME, THE APPEAL OF THE ASSESSEE IS A LLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED SR. DR ON 14 TH OCTOBER, 2011. SD SD (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14.10.2011 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD FILE DN/-