A.C.I.T. 25(2), MUMBAI V. MIRAJ ENTERPRISES, MUMBAI

ITA 2475/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92294 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR DR
• Section: 80IB

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.2475/MUM/2012 ASSESSMENT YEAR: 2008-09 ACIT-25(2), C-11, 1 ST FLOOR, PRATYAKSHKAR BHAVAN, BANDRA(E), MUMBAI-400051 / VS. M/S MIRAJ ENTERPRISES B-602, PREM NAGAR, BLDG. NO.6, MCF UDYAN MARG, BORIVALI (W) MUMBAI-400092 ( / REVENUE) ( '#$% & /ASSESSEE) P.A. NO. AAGFM6792B / REVENUE BY SHRI LOVE KUMAR-DR '#$% & / ASSESSEE BY SHRI SAMEER G. DALAL ' '( ) & * / DATE OF HEARING 07/04/2015 ) & * / DATE OF ORDER: 07/04/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 20/01/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO A LLOWING M/S MIRAJ ENTERPRISES . 2 THE CLAIMED DEDUCTION U/S 80IB(10) OF THE INCOME TA X ACT, 1961 (HEREINAFTER THE ACT) ON THE PLEA THAT THE ASS ESSEE DID NOT FULFILL THE CONDITIONS STIPULATED FOR ELIGIBILI TY OF DEDUCTION HOLDING THAT THE COMPLETION CERTIFICATE DATED 06/01 /2005 WAS ISSUED BY MCGM AND CONSTRUCTED AS APPROVED PLAN . 2. DURING HEARING OF THIS APPEAL, SHRI LOVE KUMAR, LD. DR, ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED BY FURTHER SUBMITTING THAT AS PER APP ROVED PLAN, NO RESIDENTIAL UNIT SHOULD HAVE AREA MORE THA N 100 SQ. FT., AND SUCH CONDITION HAS BEEN CONVENIENTLY I GNORED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WHILE GRANTING RELIEF TO THE ASSESSEE. IT WAS ALSO PLEADED THAT TH E REQUIRED CONDITIONS MENTIONED IN THE SECTION ITSELF HAS NOT BEEN FULFILLED BY THE ASSESSEE, CONSEQUENTLY, A WELL REA SONED ASSESSMENT ORDER HAS BEEN FRAMED. PLEA WAS ALSO RA ISED THAT THERE IS NO AMBIGUITY IN THE SECTION WHICH ITS ELF PROVIDES THAT THE PROJECT HAS TO BE A HOUSING PROJ ECT, WHICH IS A CONDITION PRECEDENT FOR AVAILING THE DEDUCTION . 2.1. ON THE OTHER HAND, SAMEER DALAL, LD. COUNSEL FOR THE ASSESSEE, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY FURTHER SUBMITTING THAT FOR AY 20 04-05, 2005-06, 2006-07 AND 2009-10 THAT TOO IN THE CASE O F ASSESSEE ITSELF, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, CONFIRMING THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. M/S MIRAJ ENTERPRISES . 3 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, AS CANVASSED BY THE LD. COUNSEL FOR THE ASSESSEE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION ONE OF THE LATER ORDER DATED 30/07/2014 (AY 2009-10 ) IN ITA NO.4657/MUM/2012 FOR READY REFERENCE AND PERUSAL/ANALYSIS:- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD.CIT(A)-35, MUMBAI DATED 27.04.2012 FOR THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, THE REVENUE HAS AGITATED THE DEC ISION OF THE LD.CIT(A) ALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IB(10) OF THE INCOME-TAX ACT. 3. BRIEFLY STATED, THE ASSESSEE, A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS WHILE DE CLARING A TOTAL INCOME AT RS. NIL HAD CLAIMED THE DEDUCTION U/S 80I B(10) AT RS.1,08,32,592/-. FURTHER FACTS ARE THAT THE ASSESS EE HAD DEVELOPED A PROPERTY ON PLOT OF LAND BEARING CTS NO . 353A OF VILLAGE MALVANI, TALUKA BORIVALI HAVING PLOT AREA O F 1.10 ACRES BY CONSTRUCTING BUILDING NO. 1 COMPRISING OF A, B & C WING AND BUILDING NO. 2 COMPRISING OF D & E WING KNOWN AS M IRAJ RESIDENCY SITUATED IN MALAD (WEST), MUMBAI-95. THE ASSESSEE DECLARED SALES OF RS.20,00,000/- FROM A-WING OF BUI LDING NO. 1, RS.2,47,30,000/- FROM D WING OF BUILDING NO. 2 AND RS.93,75,000/- FROM E WING OF BUILDING NO. 2 FOR TH E YEAR UNDER CONSIDERATION AND ACCORDINGLY CLAIMED A DEDUCTION O F RS RS.1,08,32,592/- U/S 80IB(10) OF THE ACT. THE AO DI D NOT ALLOW THE SAID CLAIM OF DEDUCTION U/S 80IB(10) IN RESPECT OF THE ENTIRE PROJECT ON THE FOLLOWING GROUNDS THAT (I) BUILDING NO. 1 (W ING A, B, C) & 2 (WING D & E) ARE SEPARATE PROJECTS AND INDIVIDUAL B UILDINGS WHICH ARE NOT ON PLOT HAVING AREA OF 1 ACRE SINCE THE TOT AL AREA OF THE PLOT M/S MIRAJ ENTERPRISES . 4 ITSELF IS ONLY 1.10 ACRE, (II) WING A OF BUILDING N O. 1 HAS MERGED FLATS HAVING AREA MORE THAN 1,000 SQ. FT AND THERE IS COMMERCIAL PREMISES HAVING AREA OF 1,500 SQ.FT. IN B WING OF B LDG. NO.1. THE AO RELIED ON THE MATERIALS GATHERED AT THE TIME OF SURVEY TO HOLD THAT THE ASSESSEE HAD AMALGAMATED TWO ADJACENT FLAT S IN A WING OF BUILDING NO. 1 AND THEREBY THE AREA OF AMALGAMAT ED FLAT EXCEEDED 1,000 SQ.FT. THE AO FURTHER NOTICED THAT T HERE WAS A COMMERCIAL AREA OF 1,500 SQ.FT. WHICH WAS USED FOR KIDS SCHOOL AND AS PER SECTION 80IB(10), THERE SHOULD NOT BE AN Y COMMERCIAL AREA IN RESPECT OF HOUSING PROJECT APPROVED BEFORE 31.03.2005. THUS, THE AO REJECTED THE CLAIM OF DEDUCTION U/S 80 IB(10). ON APPEAL, THE LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTIO N BY RELYING ON HIS OWN ORDER IN THE ASSESSEES CASE FOR THE A.Y. 2 005-06. THE LD.CIT(A) HAS ALSO CONSIDERED THE DECISION OF THE T RIBUNAL IN THE CASE OF ASSESSEES SISTER CONCERN, M/S. VANDANA PRO PERTIES. ON THE ISSUE OF THE AMALGAMATION OF FLATS, THE LD.CIT( A) HAD OBSERVED THAT THIS ISSUE WAS ALREADY DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. 4. HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD, ON THE ISSUE THAT THE PLOT AREA OF BUILDING NO. 1 IS LESS THAN ONE ACRE AND THERE ARE FEW FLATS EXCEEDING 1,000 SQ .FT. AND FURTHER THERE IS COMMERCIAL PREMISES HAVING AREA OF 1,200 S Q. FT. IN B WING OF BUILDING NO. 1 USED FOR KIDS SCHOOL, IT IS PERTINENT TO MENTION THAT THE LD.CIT(A) WHILE DEALING WITH THE A PPEAL FOR A.Y. 2005-06 HAS HELD THAT BLDG NO. 1 &2 SHOULD BE TREAT ED AS A SINGLE PROJECT. IT IS ALSO RELEVANT TO STATE THAT THE TRIB UNAL IN THE CASE OF ASSESSEES SISTER CONCERN, M/S. VANDANA PROPERTIES HAS HELD THAT THERE IS NO REQUIREMENT THAT EACH BUILDING SHOULD H AVE INDEPENDENT PLOT AREA OF ONE ACRE AND THEREFORE THE REJECTION OF CLAIM OF DEDUCTION U/S80IB(10) IS NOT CORRECT. ACTU ALLY IN THE SAID CASE, SOME OF THE PROJECTS WERE NOT ENTITLED TO DED UCTION U/S80IB(10) AND EVEN THEN THE TRIBUNAL HAS HELD THA T THE AREA OF THE ENTIRE PROJECT OF BUILDINGS A,B,C,D & E SHOULD BE CONSIDERED M/S MIRAJ ENTERPRISES . 5 TOGETHER FOR THE PURPOSE OF ASCERTAINING THE PLOT A REA OF ONE ACRE. IN THE CASE OF ASSESSEE, EVEN THOUGH THE PROJECT FO R BUILDING NO. 1 AND BUILDING NO. 2 ARE SEPARATELY APPROVED ON DIFFE RENT DATES AND THE PROJECTS HAVE ALSO BEEN COMMENCED ON DIFFERENT DATES AND COMPLETED ON DIFFERENT DATES, THE TOTAL AREA OF BUI LDING NO. 1 AND BUILDING NO. 2 SHOULD BE CONSIDERED TOGETHER FOR TH E PURPOSE OF ASCERTAINING THE AREA OF PROJECT. THUS, THE ENTIRE AREA OF BUILDING NO. 1 AND BUILDING NO. 2 IS TO BE CONSIDERED AND TH E AO IS NOT JUSTIFIED IN SPLITTING THE AREA OF BUILDING NO. 1 A ND BUILDING NO. 2. REGARDING THE AMALGAMATION OF FLATS, IT IS FOUND TH AT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND THE AO HAS NOT BROUGHT ON RECORD ANY N EW FACTS FOR THIS A.Y. EXCEPT REPEATING WHAT HAS BEEN STATED IN THE ASSESSMENT ORDER FOR A.Y. 2005-06. ALSO, THE SAID DECISION OF THE TRIBUNAL HAVE BEEN UPHELD BY THE HONBLE HIGH COURT OF BOMBAY. FU RTHER, THE PROVISIONS OF SECTION 80IB(10)(E) HAS BEEN BROUGHT TO THE STATUTE BOOK WITH EFFECT FROM 1.4.2010 AND HENCE THE SAME I S NOT APPLICABLE TO THE CASE IN HAND BEING THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2009-10. CONSIDERING THE ENTIRETY OF FACTS, WE ARE INCLINED TO CONCUR WITH THE FINDINGS OF THE LD.CIT( A) THAT THE ASSESSEE HAS NOT CONSTRUCTED JOINT FLATS AND HAS NO T GIVEN POSSESSION OF FLATS AREA MORE THAN 1,000 SQ. FTS, B UILDING NO. 1 & 2 COMPRISING OF BUILDING A TO E ARE IN ONE PROJECT AND SAME ARE ON LAND AREA OF WHICH IS MORE THAN 1 ACRE AND AS REGAR DS THE COMMERCIAL AREA OF 1,500 SQ.FT. OF KIDS SCHOOL, TH E ISSUE IS COVERED BY THE DECISIONS OF HONBLE BOMBAY HIGH COURT IN TH E CASE OF BRAHMA ASSOCIATES, WHEREIN IT HAS BEEN HELD THAT TH ERE CAN BE CONVENIENT COMMERCIAL AREA EVEN UP TO 10% OF THE TO TAL BUILT-UP AREA. IN VIEW OF THAT MATTER, WE DO NOT FIND ANY JU STIFIABLE REASON TO INTERFERE WITH THE DECISION OF THE LD.CIT(A) AND THUS THE SAME IS UPHELD. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. M/S MIRAJ ENTERPRISES . 6 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, DENYING CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AV AILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE CO UNSEL, IF KEPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT TH E TRIBUNAL ON IDENTICAL FACT/ISSUE THAT TOO IN THE CASE OF ASS ESSEE ITSELF FOR EARLIER AND LATER ASSESSMENT YEARS, DELIBERATED UPON THE ISSUE AND DECIDED IN FAVOUR OF THE ASSESSEE. THE AR GUMENTS ADVANCED BY THE LD. DR HAS ALREADY BEEN DEALT WITH IN THE ORDERS OF THE TRIBUNAL AND BY FOLLOWING THE DECISIO N FROM HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASS OCIATES (30 SOT 155). IT IS ALSO NOTED THE PROVISIONS OF S ECTION 80IB (10)(E) OF THE ACT WERE BROUGHT TO THE STATUTE BOOK WITH EFFECT FROM 01/04/2010, CONSEQUENTLY, THE SAME IS NOT APPL ICABLE TO THE CASE IN HAND BEING THE AY 2008-09. THE TRIBU NAL IN THE CASE OF ASSESSEE (ITA NO.4015, 4178 AND 3740 /MUM/2010) CONSIDERED THE DECISION FROM HONBLE BOM BAY HIGH COURT IN THE CASE OF SETH DEVELOPERS (P.) LTD. 254 CTR 127 (BOM.) AND THE ISSUE OF JOINING/AMALGAMATION OF THE FLAT BY CONSIDERING THE DECISION OF THE CO-ORDINATE BENC H OF THE TRIBUNAL (PARA-11 AT PAGE 5 OF THE ORDER), WHEREIN IT WAS HELD AS UNDER:- FOR THE PURPOSE OF ALLOWING DEDUCTION U/S 80IB(10) , THE ASSESSEE SHOULD FULFILL ALL THE CONDITIONS MENTIONE D THEREIN, FROM THE BROCHURES FOUND DURING THE COURSE OF SURVEY, IT IS CLEAR THAT THE ASSESSEES INTENTION WAS TO BUILD 3BHK FLAT ON 6 TH TO 9 TH FLOORS OF A WING. THE ACTUAL CONSTRUCTION AS FOUND DURI NG THE SURVEY IS AS PER THE PLAN SHOWN INTEREST HE BROCHURES. THIS HAS THUS CREATED A DOUBT IN MINDS OF REVENUE AUTHORITIES. A S PROVIDED UNDER THE EXPLANATION (III) TO CLAUSE (A) OF SUB-SE CTION (10) OF SEC. M/S MIRAJ ENTERPRISES . 7 80IB, THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. INTEREST THE CASE BEFORE US THE COMPLETION CERTIFIC ATED DATED 06.01.2005 HAS BEEN ISSUED BY THE MCGM AS CONSTRUCT ED AS PER APPROVED PLAN. THE DUTY OF THE ASSESSEE COMPANY END S ON THE SAID DATE. AS PER THE APPROVED PLAN, THERE ARE NO RESIDENTIAL UNITS HAVING AREA OF MORE THAN 1000 SQ. FT. THEREFO RE, WE ARE OF THE OPINION, THAT THE ASSESSEE HAS FULFILLED THE CO NDITIONS PRESCRIBED U/S 80IB(10) OF THE ACT AND WE SEE NO RE ASON TO INTERFERE WITH THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. CONSIDERING THE DECISION OF THE TRIBUNAL IN THE CAS E OF ASSESSEE AND FOLLOWING THE DECISION FROM THE HONBL E JURISDICTIONAL HIGH COURT, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). IT IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 07/04/2015. SD/- SD/- ( D.KARUNAKARA RAO ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER ' ( MUMBAI; +' DATED : 07/04/2015 F{X~{T? P.S/. '. . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT M/S MIRAJ ENTERPRISES . 8 2. 01./ / THE RESPONDENT. 3. 2 2 ' 3& ( ,- ) / THE CIT, MUMBAI. P4. 2 2 ' 3& / CIT(A)- , MUMBAI 5. 56 0&'# , 2 ,-* ,# , ' ( / DR, ITAT, MUMBAI 6. $ 7( / GUARD FILE. / BY ORDER, 15-& 0& //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI