Income-tax Officer, V. M/s. Sai Siddhi Atul Enterprises, Pune

ITA 2420/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2335 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: N O N E
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2 420 /P U N/201 6 / ASSESSMENT YEAR : 20 12 - 13 INCOME TAX OFFICER, WARD 3(4), PUNE ....... / APPELLANT / V/S. M/S. SAI SIDDHI ATUL ENTERPRISES, PARVATI CHAMBER, 16/1, SANGAM PRESS ROAD, KOTHRUD, PUNE 411038 PAN : ABJFS7771C / RESPONDENT ASSESSEE BY : N O N E REVENUE BY : SHRI S.B. PRASAD / DATE OF HEARING : 13 - 11 - 201 8 / DATE OF PRONOUNCEMENT : 15 - 1 1 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3, PUNE DATED 04 - 07 - 2016 FOR THE ASSESSMENT YEAR 2012 - 13. 2 ITA NO . 2420/PUN/2016, A.Y. 2012 - 13 2. NOTICE OF THE APPEAL WAS SENT TO THE ASSESSEE THROUGH RPAD ON 17 - 10 - 2018 FOR TODAY I.E. 13 - 11 - 2018. THE ACKNOWLEDGMENT OF THE NOTICE AVAILABLE ON FILE SHOWS THAT THE NOTICE WAS DULY SERVED ON THE ASSESSEE. DESPITE SERVICE OF NOTICE NONE IS PRESENT ON BEHALF OF THE ASSESSEE / RESPONDENT TO DEFEND THE IMPUGNED ORDER. IT SEEMS THAT THE ASSESSEE IS NOT KEEN TO DEFEND THE IMPUGN ED ORDER. UNDER SUCH CIRCUMSTANCES WE ARE CONSTRAINED TO PROCEED WITH THE HEARING OF APPEAL WITH THE ASSISTANCE OF LD. DR AND MATERIAL AVAILABLE ON RECORD. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE - PARTNERSHIP FIRM IS A PROMOTER AND DEVELOPER. THE ASSESSEE DEVELOPED A HOUSING PROJECT NAMED PARADISO AT S. NO. 240/2, WAKAD, TAL. MULSHI, DISTT. PUNE. THE SAID PROJECT CONSISTS OF A BUILDING WITH THREE WINGS VIZ. A, B AND C AND COMMERCIAL AREA . THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB(10) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) IN RESPECT OF THE ABOVE SAID HOUSING PROJECT. THE ASSESSING OFFICER REJECTED ASSESSEES CLAIM AS THE ASSESSEE FAILED TO PRODUCE COMPLETION CERTIFICATE IN RESPECT OF ENTIRE PROJECT. HOWEVER, PART COMPLETION CERTIFICATE DATED 31 - 03 - 2012 QUA WINGS A AND B WAS PRODUCED BY THE ASSESSEE. THE ASSESSING OFFICER REJECTED ASSESSEES ENTIRE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. THE ASSESSING OFFICER FURTHER OBSERVED T HAT THE SIZE OF THE PLOT ON WHICH THE HOUSING PROJECT WAS DEVELOPED IS LESS THAN ONE ACRE. ON BOTH THESE COUNTS THE ASSESSEE S CLAIM OF DEDUCTION U/S. 80IB(10) WAS REJECTED BY THE ASSESSING OFFICER. AGGRIEVED BY THE ASSESSMENT ORDER DATED 05 - 03 - 2015 PASS ED U/S. 143(3) OF THE ACT, THE ASSESSEE FILED APPEA L BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE FIRST APPELLATE AUTHORITY AFTER PLACING RELIANCE 3 ITA NO . 2420/PUN/2016, A.Y. 2012 - 13 ON THE DECISION OF TRIBUNAL IN THE CASE OF RUNWAL MULTI HOUSING PVT. LTD. VS. ACIT IN ITA NOS. 1015, 1016 & 1017/PN/2011 ALLOWED PROPORTIONATE DEDUCTION U/S. 80IB(10) IN RESPECT OF COMPLETED PART OF PROJECT. AS REGARDS THE AREA OF PLOT , THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER PLACING RELIANCE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF COMMISSIONER OF INCOME TAX VS. VANDANA PROPERTIES REPORTED AS 353 ITR 36 AND THE ORDER OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF BUNTY BUILDERS VS. INCOME TAX OFFICER REPORTED AS 127 ITD 286 HELD THAT THE AREA EAR MARKED FOR DP ROAD HAS TO BE INCL UDED FOR COMPUTING THE ENTIRE SIZE OF THE PLOT. IF THE AREA OF DP ROAD IS INCLUDED THE SIZE OF PLOT IS MORE THAN ONE ACRE. HENCE, THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) NEGATING BOTH THE OBJECTIONS RA ISED BY THE ASSESSING OFFICER. NOW, THE REVENUE IS IN APPEAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 4. SHRI S.B. PRASAD REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE FINDINGS OF ASSESSING OFFICER AND PRAYED FOR REJECTING ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY THE LD. DR AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE REVENUE IN APPEAL HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) ON TWO G ROUNDS : I . ALLOWING PRO - RATA DEDUCTION U/S. 80IB(10) OF THE ACT. II . ALLOWING DEDUCTION U/S. 80IB(10) CONSIDERING SIZE OF PLOT AS MORE THAN ONE ACRE AFTER INCLUDING AREA ACQUIRED FOR DP ROAD . 4 ITA NO . 2420/PUN/2016, A.Y. 2012 - 13 6. IN SO FAR AS FIRST ISSUE IS CONCERNED A PERUSAL OF ASSESSMENT ORDER SHOWS THAT THE ASSESSEE HAS DEVELOPED HOUSING PROJECT WITH THREE WINGS A, B AND C. THE HOUSING PROJECT WAS APPROVED ON 30 - 03 - 2007. AS PER THE PROVISIONS OF SECTION 80IB(10)( A )( III ) THE PROJECT SHOULD HAVE BEEN COMPLETED ON OR BEFORE 31 - 03 - 2012. DU RING SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSEE FURNISHED PART COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY ON 31 - 03 - 2012 IN RESPECT OF WINGS A AND B AND COMMERCIAL UNITS. THE ASSESSEE COULD NOT PRODUCE COMPLETION CERTIFICATE IN RESPECT OF WING C. THE ASSESSING OFFICER DISALLOWED ASSESSEES ENTIRE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING VARIOUS JUDICIAL RULINGS OF THE HONBLE HIGH COURTS AND THE TRIBUNAL ALLOWED PRO - RATA DEDUCTION IN RESPECT OF COMPLETED UNIT TO THE ASSESSEE. 7. THE ALLOWABILITY OF PROPORTIONATE DEDUCTION U/S. 80IB(10) IN RESPECT OF COMPLETED UNITS IS NO MORE RES INTEGRA. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. BRAHMA ASSOCIATES REPORTED AS 333 ITR 289, COMMISSIONER OF INCOME TAX VS. VANDANA PROPERTIES (SUPRA), THE HONBLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ARUN EXCELLO FOUNDATIONS (P) LTD. REPORTED AS 259 CTR 362 HAVE APPROVED ALLOWING OF PROPORTIONATE DEDUCTION U/S. 80IB(10) IN RESPECT OF COMPLETED ELIGIBLE UNITS. THE TRIBUNAL IN CATENA OF ORDERS HAVE BEEN CONSISTENTLY ALLOWING PROPORTIONATE DEDUCTION U/S. 80IB(10) IN RESPECT OF UNITS WHICH ARE COMPLE TE IN EVERY RESPECT IN CONSONANCE WITH THE CONDITIONS SET OUT U /S. 80IB(10) OF THE ACT. THE LD. DR HAS NOT BROUGHT TO OUR KNOWLEDGE ANY CONTRARY DECISION OF HONBLE JURISDICTIONAL HIGH COURT OR THE HONBLE APEX COURT. WE DO NOT FIND ANY INFIRMITY IN THE 5 ITA NO . 2420/PUN/2016, A.Y. 2012 - 13 FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING PRO - RATA DEDUCTION TO THE ASSESSEE IN RESPECT OF COMPLETED RESIDENTIAL UNITS. ACCORDINGLY, GROUND NOS. 2 AND 3 OF THE APPEAL BY THE REVENUE ARE DISMISSED BEING DEVOID OF ANY MERIT. 8. THE SE COND ISSUE RAISED IN GROUND NOS. 4 AND 5 OF THE APPEAL IS WITH RESPECT TO SIZE OF PLOT. THE PROVISIONS OF SECTION 80IB(10) MANDATES THAT THE PROJECT SHOULD BE ON THE SIZE OF PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE. IN THE PRESENT CASE, THE TOTAL ARE A OF SIZE OF PLOT ON WHICH THE HOUSING PROJECT HAS BEEN CONSTRUCTED IS 7689 SQ. MTRS. A FTER REDUCING THE AREA OF 1502.25 SQ. MTRS. ACQUIRED BY PCMC FOR CONSTRUCTION OF APPROACH ROAD , T HE NET AREA OF THE PLOT ON WHICH THE RESIDENTIAL COMPLEX HAS BEEN CONST RUCTED IS 6186.75 SQ. MTRS. THE ASSESSING OFFICER WHILE COMPUTING THE AREA OF PLOT ONLY CONSIDERED SALEABLE AREA OF WING A AND B AND FURTHER ERRED IN REDUCING THE AREA EAR MARKED FOR DP ROAD. THE ASSESSING OFFICER WORKED THE TOTAL AREA OF PLOT AS 3808.56 SQ. MTRS. THE FIRST APPELLATE AUTHORITY WHILE ADJUDICATING THIS ISSUE FOLLOWED THE DECISION RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. VANDANA PROPERTIES (SUPRA) AND BUNTY BUILDERS VS. INCOME TAX OFFICER (SUPRA) AND CALCULATED THE SIZE OF PLO T BY INCLUDING THE AREA MARKED FOR DP ROAD AND THE OTHER AREAS EXCLUDED BY ASSESSING OFFICER. WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, THE SAME ARE UPHELD AND GROUND NOS. 4 AND 5 OF THE APPEAL ARE DISMISSED BEING DEVOID OF ANY MERIT. 9. THE GROUND NOS. 1, 6 AND 7 ARE GENERAL IN NATURE, HENCE, REQUIRE NO ADJUDICATION. 6 ITA NO . 2420/PUN/2016, A.Y. 2012 - 13 10. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 15 TH DAY OF NOVEMBER, 2018 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 15 TH NOVEMBER, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 3, PUNE 4. THE PR. C.I.T. 2, PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE