ITO, Ward 2(2), Kolhapur V. M/s. Mohite & Suraj Estate Developers (JV), Kolhapur

ITA 2533/PUN/2012

• Counselvise Citation: 253324514 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 21-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.2533/PN/2012 (A.Y: 2009-10) ITO, WARD 2(2), KOLHAPUR APPELLANT VS. M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV), ROYAL COURTS, SHAHUPURI, KOLHAPUR PAN: AAAAM7778E RESPONDENT CO NO.14/PN/2014 (A.Y: 2009-10) M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV), ROYAL COURTS, SHAHUPURI, KOLHAPUR PAN: AAAAM7778E CROSS OBJECTOR VS ITO, WARD 2(2), KOLHAPUR RESPONDENT APPELLANT BY : SHRI RAJESH DAMOR RESPONDENT BY : SHRI NIKH IL PATHAK DATE OF HEARING: 04.08.2014 DATE OF ORDER : 26.08.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE ARISING OUT OF THE ORDER OF COMMISSION ER OF INCOME TAX (APPEAL), KOLHAPUR, DATED 03.10.2012 FOR A.Y. 2 009-10. THE REVENUE HAS FILED ITS APPEAL ON THE FOLLOWING GROUN DS. 2 ITA NO.2533/PN/12 CO NO.14/PN/2014 M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) HAS ERRED IN RESTRICTING DISALLOWANCE U/S. 8 0IB(10) TO RS.9,90,300/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT(A) HAS ERRED IN GIVING PROPORTIONATE DISALLOWAN CE U/S. 80IB(10) WHEN THERE IS NO PROVISION IN THE ACT TO G IVE DEDUCTION U/S. 80IB(10) ON PROPORTIONATE BASIS. 3. THE APPELLANT PRAYS THAT THE ORDER OF LD CIT(A) BE VACATED AND THAT OF AO'S ORDER MAY BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MO DIFY ANY OF THE ABOVE GROUNDS RAISED, ANY OTHER GROUNDS AT THE TIME OF PROCEEDINGS BEFORE THE HON'BLE TRIBUNAL WHI CH MAY PLEASE BE GRANTED. 2. THE CROSS OBJECTIONS OF THE ASSESSEE ARE AS UNDE R: 1. THE LEARNED CIT(A) ERRED IN HOLDING THAT BUILT UP A REA OF SOME OF THE UNITS IN THE HOUSING PROJECT - ROYAL GREENFIELDS WAS MORE THAN 1500 SQ.FT. AND THEREFORE , THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION 80IB(1 0) IN RESPECT OF THE SAID UNITS. 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE BU ILT UP AREA OF NONE OF THE UNITS EXCEEDED 1500 SQ.FT. AND ACCORDINGLY, THE ASSESSEE SHOULD HAVE BEEN ALLOWED DEDUCTION IN RESPECT OF ALL THE UNITS IN THE SAID P ROJECT. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE BU ILT UP AREA CALCULATED BY THE DVO WAS NOT CORRECT AND HENC E, IF THE CORRECT CALCULATIONS WERE CONSIDERED, THE BUILT UP AREA OF ALL THE UNITS WAS LESS THAN 1500 SQ.FT. AND ACCORDINGLY, THE ASSESSEE SHOULD HAVE BEEN ALLOWED THE DEDUCTION FOR THE ENTIRE PROJECT. 4. THE RESPONDENT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE CROSS OBJECTIONS. 3. THE ASSESSEE AN AOP CAME INTO EXISTENCE ON 24.11 .2000 AND WAS REGISTERED ON 22.05.2006 FOR CONSTRUCTION O F PROJECT 'ROYAL GREENFIELD' AT KOLHAPUR. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED ITS RETURN OF INCOME ON 24.09.20 09 DECLARING 3 ITA NO.2533/PN/12 CO NO.14/PN/2014 M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV) TOTAL INCOME AT RS.53,850/-. THIS CASE WAS SELECTE D FOR SCRUTINY AS PER COMPUTER ASSISTED SCRUTINY SYSTEM (CASS) AND CONSEQUENTLY AN ORDER UNDER SECTION 143(3) WAS PASS ED WHEREIN AN ADDITION U/S.80IB(10) WAS MADE TO THE TOTAL INCO ME ON ACCOUNT OF DISALLOWANCE OF CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. 4. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AU THORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF THE ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAS HELD AS UNDER: 10. I HAVE GONE THROUGH THE SUBMISSION OF THE APPE LLANT AND HAVE ALSO PERUSED THE VARIOUS CASE LAWS CITED B Y THE APPELLANT. TWO ISSUES ARE INVOLVED IN THIS CASE. FI RST IS IN RESPECT OF ALLOWING DEDUCTION UNDER SECTION 80IB IN RESPECT OF EIGHT FLATS WHICH WERE SOLD TO DIFFERENT FAMILY MEMBERS AND WERE SUBSEQUENTLY COMBINED TO FORM FOUR FLATS. IN RESPECT OF THESE FLATS, IT IS A FACT THAT THE PLAN WAS APPROVED BY THE KOLHAPUR MUNICIPAL CORPORATION AS EIGHT DIFF ERENT FLATS AND THE SAME WERE SOLD SEPARATELY TO DIFFEREN T PERSONS. MUNICIPAL ASSESSMENT IS SEPARATELY MADE IN RESPECT OF THE FLATS AND MUNICIPAL TAX IS PAID SEPARATELY. SOCIETY MAINTENANCE CHARGES ARE LEVIED SEPARATELY ON EACH F LAT. THEY HAVE SEPARATE ENTRANCE ALSO. THE FAMILY MEMBER S HAVE JOINED THE FLATS AFTER PURCHASE OF THE SAME TO FORM ONE LARGER FLAT. SALE OF FLATS TO FAMILY MEMBERS IS PRO HIBITED BY CLAUSES (E) AND (F) OF SECTION 80IB(10). BUT THESE CLAUSES HAVE BEEN MADE EFFECTIVE FROM 01/04/2010 AND ARE PROSPECTIVE IN NATURE. AS HELD IN THE CASES OF (I) EMGEEN HOLIDAY PVT. LTD. V/S DCIT 47 SOT 98 (II) ARCADE BH OOMI ENTERPRISES IN IT A NO. 366/MUM./2010 AND (III) SAN GHVI & DOSHI ENTERPRISES 141 TTJ 1 (CHENNAI)(TM), THE PROV ISIONS OF CLAUSES (E) AND (F) OF SECTION 80IB(10), BEING P ROSPECTIVE IN APPLICATION, WILL NOT BE APPLICABLE IN THE CASE OF THE APPELLANT. DEDUCTION UNDER SECTION 80IB(10) CANNOT BE DENIED MERELY BECAUSE THE END USERS BUY MORE THAN O NE UNIT IN THE NAME OF VARIOUS FAMILY MEMBERS AND COMB INE / MERGE THE FLATS TO CONVERT THE RESIDENTIAL UNITS IN TO UNITS OF LARGER SIZE, WHICH IS IN EXCESS OF THE SIZE SPECIFI ED FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 80IB(10 ). THE APPELLANT SUCCEEDS ON THIS GROUND. 4 ITA NO.2533/PN/12 CO NO.14/PN/2014 M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV) 11. IN RESPECT OF THE SECOND CONTENTION OF THE APPE LLANT THAT PROPORTIONATE DEDUCTION UNDER SECTION 80IB(10) SHOU LD BE ALLOWED, THERE IS A RECENT DECISION OF THE HONOURAB LE JURISDICTIONAL TRIBUNAL IN THE CASE OF SOMANI BAFNA & ASSOCIATES V/S ACIT, CIRCLE(5), PUNE IN ITA NO. 1024/PN/2011 DATED 28/08/2012. IN SOMANI BAFNA CASE , THE ASSESSING OFFICER HAD FOUND THAT OUT OF THE 164 RESIDENTIAL UNITS, ONLY SIX FLATS WERE COMBINED INT O THREE UNITS WHERE THE TOTAL BUILT-UP AREA EXCEEDED 1500 S Q.FT. THE ASSESSING OFFICER DENIED DEDUCTION UNDER SECTION 80 IB(10). THE ALTERNATE CONTENTION OF THE APPELLANT THAT PROP ORTIONATE DEDUCTION SHOULD BE GRANTED TO THE ASSESSEE UNDER S ECTION 80IB(10) WAS ACCEPTED BY THE HONOURABLE TRIBUNAL. I N DOING SO, THE HONOURABLE TRIBUNAL TOOK NOTE OF THE DECISI ON IN THE CASE OF M/S TUSHAR DEVELOPERS V/S ITO VIDE ITA NO. 165/PN/2007, ITA NO. 94/PN/2008 FOR ASSESSMENT YEAR S 2003-04 AND 2004-05 IN ORDER DATED 30/07/12. THE HONOURABLE TRIBUNAL HAS TAKEN NOTE OF THE OBSERVATI ONS MADE BY THE COORDINATE BENCH IN ITA NO. 165/PN/2007 THAT ALL THE DECISIONS OF THE COORDINATE BENCHES OF THE TRIBUNAL IN RESPECT OF PRORATA DEDUCTION UNDER SECT ION 80IB(10) ARE IN FAVOUR OF THE ASSESSEE. IN FACT, TH E JUDGMENT OF CALCUTTA HIGH COURT IN THE CASE OF BENGAL AMBUJA AND HOUSING DEVELOPMENT LTD. IN ITA NO.458 OF 2006, UPH OLDING THE VIEW OF THE CALCUTTA 'C' BENCH OF THE TRIBUNAL THAT A PRORATA DEDUCTION IS PERMISSIBLE UNDER SECTION 80IB (10) IS THE ONLY DECISION OF A CONSTITUTIONAL COURT ON THIS SUBJECT AND HAS TO BE FOLLOWED, IS RECOGNIZED IN THE CASE O F SOMANI BAFNA & ASSOCIATES V/S ACIT (SUPRA) BY THE JURISDIC TIONAL TRIBUNAL. 12. IN MY OPINION, SINCE THE PRINCIPLE OF PRORATA DEDUCTION, IF AVAILABLE, IS RECOGNIZED IN A PLETHORA OF DECISI ONS OF THE HONOURABLE BENCHES OF THE TRIBUNAL INCLUDING THE JURISDICTIONAL TRIBUNAL IN ITA NO.165/PN/2007 AND I TA NO. 1024/PN/2011, I HOLD THAT THE ASSESSEE IS ENTITLED TO PRORATA DEDUCTION UNDER SECTION 80IB(10). THEREFOR E, PROPORTIONATE DISALLOWANCE UNDER SECTION 80IB(10) W ILL BE RESTRICTED TO RS.9,90,300/-. THIS GROUND OF APPEAL IS ALLOWED. 5. THUS, THE CIT(A) HAS GRANTED PRORATA DEDUCTION W HICH HAS BEEN OPPOSED BY THE REVENUE, INTER ALIA, SUBMITTING THAT THE CIT(A) WAS NOT JUSTIFIED IN GIVING PRORATA DEDUCTIO N U/S.80IB(10) OF THE ACT WHEN THERE IS NO PROVISION IN THE ACT TO GIVE DEDUCTION U/S. 80IB(10) ON PROPORTIONATE BASIS. ACCORDINGLY, THE ORDER OF 5 ITA NO.2533/PN/12 CO NO.14/PN/2014 M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV) CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER B E RESTORED. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATI VE BY WAY OF CROSS OBJECTION HAS SUBMITTED THAT THE CIT(A) ERRED IN RESTRICTING THE DISALLOWANCE U/S.80IB(10) OF THE ACT TO RS.9,90 ,300/-. THE CIT(A) ERRED IN GIVING PROPORTIONATE DISALLOWANCE U /S.80IB(10) OF THE ACT WHEN THERE WAS NO PROVISION IN THE ACT TO G IVE DEDUCTION U/S. 80IB(10) ON PROPORTIONATE BASIS. ACCORDINGLY, THE LEARNED AUTHORIZED REPRESENTATIVE HAS OPPOSED DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A). 6. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD, WE FIND THAT THE ASSESSING OFFICER DENIED D EDUCTION U/S.80IB(10) OF THE ACT AND THE CIT(A) HAS GRANTED RELIEF ON PRORATA BASIS ON THE BASIS OF SIZE OF SAME FLATS. THE MOHITE & SURAJ ESTATE DEVELOPERS JOINT VENTURE CAME INTO EXI STENCE ON 24 NOVEMBER, 2000 AND REGISTERED ON 22.05.2006 FOR CON STRUCTION OF PROJECT CALLED 'ROYAL GREENFIELD' AT C.S. NO. 148 - A/E, KOLHAPUR. THE PROJECT WAS ON SIZE OF PLOT ADMEASURING 8400.43 SQ.MTS. WHICH IS MORE THAN ONE ACRE AND SITUATED WITHIN KOL HAPUR MUNICIPAL CORPORATION. THERE WAS NO COMMERCIAL CON STRUCTION IN THE SAID PROJECT. THE HOUSING PROJECT WAS APPRO VED BY KOLHAPUR MUNICIPAL CORPORATION ON 04.07.2006. AS P ER BUILDING PLAN, THE RESIDENTIAL UNITS HAVE BUILT-UP AREA LESS THAN 1500 SQ.FTS. THE CONSTRUCTION OF PROJECT STARTED ON 02.1 0.2006 AND COMPLETED IN THE PERIOD RELEVANT TO A.Y. 2010-11. FOR A.Y. 2009- 10 I.E. YEAR UNDER CONSIDERATION, THE RETURN OF INC OME WAS FILED ON 24.09.2009 ELECTRONICALLY DECLARING TOTAL INCOME OF RS.53,850/- AFTER CLAIMING DEDUCTION OF RS.2,34,98, 879/- U/S 80-IB(10) OF THE I.T.ACT. 6.1 THE DEDUCTION WAS CLAIMED IN RESPECT OF THE HOU SING PROJECT ROYAL GREEN FIELD. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT WHEREIN, HE DISALLOWED THE CLAIM OF DEDU CTION 6 ITA NO.2533/PN/12 CO NO.14/PN/2014 M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV) U/S.80IB(10) OF THE ACT. ACCORDING TO HIM, BUILT U P AREA OF SOME OF THE UNITS EXCEEDED 1500 SQ.FT. THE ASSESSING OF FICER OBSERVED THAT BUILT UP AREA OF FLAT NO.A-505, B-05 AND B-505 EXCEEDED 1500 SQ.FT. WHICH IS PRESCRIBED LIMIT FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE ACT. THE ASSESSING OFFICER FOU ND THAT SOME OF THE UNITS WERE COMBINED AND HE HAS TAKEN BUILT UP A REA OF COMBINED UNITS. THE RELEVANT DISCUSSION IN THIS RE GARD WAS MADE AT PARA 4 TO 5.3 OF ASSESSMENT ORDER. THE ASS ESSING OFFICER WHILE DISALLOWING THE CLAIM OF THE ASSESSEE HAS REL IED UPON REPORT OF DEPARTMENTAL VALUATION OFFICER (DVO), SOLAPUR IN ORDER TO HOLD THAT BUILT UP AREA OF ABOVE THREE RESIDENTIAL UNITS EXCEEDS 1500 SQ.FT. 6.2 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF THE ASSESSEE, WHERE THE ASSESSEE HAS SUBMITTED THAT BUI LT UP AREA OF THE UNITS WAS LESS THAN 1500 SQ.FT. THE STAND OF T HE ASSESSEE HAS BEEN THAT THE AREA COVERED BY STAIR CASE WAS CONSID ERED TWICE BY THE CONCERNED ASSESSING OFFICER. THE ASSESSING OFF ICER WAS NOT JUSTIFIED IN CALCULATING THE BUILT UP AREA OF COMBI NED RESIDENTIAL UNITS AS ONE UNIT. THE RESIDENTIAL UNITS WERE SANC TIONED SEPARATELY. IT WAS CLARIFIED ON BEHALF OF THE ASSE SSEE THAT FLATS WERE COMBINED BY PURCHASERS AND TO THIS EFFECT APPL ICATION OF THE PURCHASERS WERE SUBMITTED IN ASSESSMENT PROCEEDINGS STATING THE ABOVE FACT. IN THIS BACKGROUND, THE STAND OF T HE ASSESSEE HAS BEEN THAT BUILT UP AREA SHOULD BE CALCULATED SEPARA TELY AND NOT AFTER COMBINING THE TWO UNITS. 6.3 THE FIRST APPELLATE AUTHORITY HAS ACCEPTED THE CONTENTIONS OF THE ASSESSEE THAT BUILT UP AREA OF THE COMBINED FLA TS SHOULD BE TAKEN SEPARATELY. IT WAS APPRECIATED THAT THE ASSE SSEE HAS RECEIVED COMMENCEMENT AND COMPLETION CERTIFICATES F OR RESPECTIVE UNITS. IT WAS ALSO OBSERVED THAT FLATS WERE COMBINED 7 ITA NO.2533/PN/12 CO NO.14/PN/2014 M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV) BY THE PURCHASERS AS DISCUSSED ABOVE. ACCORDINGLY, THE CIT(A) HELD THAT BUILT UP AREA SHOULD BE COMPUTED INDEPEND ENTLY. HOWEVER, WITH REGARD TO THE BUILT UP AREA OF THREE UNITS AS DISCUSSED ABOVE, THE CIT(A) HELD THAT BUILT UP AREA OF ABOVE THREE FLATS EXCEEDED 1500 SQ.FT. AND THEREFORE, THE ASSES SEE WAS ENTITLED TO PROPORTIONATE DEDUCTION IN RESPECT OF FLATS WHOS E BUILT UP AREA, ACCORDING TO HIM WAS LESS THAN 1500 SQ.FT. ACCORDIN GLY, HE ALLOWED DEDUCTION ON PRORATA BASIS AND DISALLOWANCE WAS RESTRICTED TO RS.9,90,300/-. 6.4 AS STATED ABOVE THE DEPARTMENT HAS FILED AN APP EAL, INTER ALIA, STATING THAT SUCH PROPORTIONATE DEDUCTION ALL OWED BY CIT(A) IS NOT JUSTIFIED. ON THE OTHER HAND, THE ASSESSEE BY WAY OF CROSS OBJECTIONS CONTENDED THAT BUILT UP AREA OF THREE DI SPUTED UNITS I.E. FLAT NO.A-505, B-05 AND B-505 WAS LESS THAN 15 00 SQ.FT. ACCORDINGLY, THE DEDUCTION SHOULD BE ALLOWED ON ENT IRE PROJECT IN DECIDING THESE THREE FLATS. OUR ATTENTION WAS DRAW N TOWARDS THE REPORT OF DVO, SOLAPUR. THE MAIN AREA OF DISPUTE I S FOUND WITH REGARD TO INTERNAL STAIRCASE. AS STATED ABOVE, THE STAND OF THE ASSESSEE HAS BEEN THAT THE AREA OF STAIRCASE HAS WR ONGLY BEEN CONSIDERED BY THE DVO, SOLAPUR TWICE WHILE CALCULAT ING BUILT UP AREA OF THESE FLATS. IT WAS CLEARLY EXPLAINED ON B EHALF OF THE ASSESSEE THAT STAIRCASE WAS ON LOWER FLOOR OF DUPLE X AND AREA OF SAME HAS ALREADY TAKEN INTO ACCOUNT. THUS, IT WAS EXPLAINED TO US THAT THE DVO HAS INCLUDED THE AREA OF STAIRCASE ON UPPER FLOOR OF DUPLEX WITHOUT APPRECIATING THAT ONLY LANDING AR EA OUGHT TO HAVE BEEN INCLUDED SINCE THE BALANCE AREA IS NOT CO RRECT AREA AND ALREADY INCLUDED WHILE CALCULATING THE BUILT UP ARE A OF THE LOWER FLOOR. THUS, THE DVO WAS NOT JUSTIFIED TO INCLUDE THE SAME AND HAVING CALLED FOR REMAND REPORT FROM ASSESSING OFFI CER AND COMMENTS FROM AUTHORIZED REPRESENTATIVE ON BEHALF O F ASSESSEE, THE CIT(A) HAS GRANTED THE RELIEF TO THE ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE. WE FI ND THAT AFTER 8 ITA NO.2533/PN/12 CO NO.14/PN/2014 M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV) EXCLUDING AREA OF STAIRCASE ON UPPER FLOOR THE BUIL T UP AREA OF ALL THREE UNITS WAS LESS THAN 1500 SQ.FT. SO, NO DISAL LOWANCE WAS JUSTIFIED. 6.5 IT WAS BROUGHT TO OUR NOTICE THAT IN COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 2012-13, THE ASSESSING OFFICER HAS AGAIN REFERRED THE ISSUE TO DVO FOR CALCULATING THE BUILT UP AREA, WHEREIN THE CONCERNED DVO, MUMBAI HAS SUBMITTED ITS REPORT, INTER ALIA, CORRECTED THE MISTAKE COMMITTED BY DVO, SOLAPUR AS DISCUSSED ABOVE. THE SAID REPORT IS PLACED AT PAGE 16-17 OF PAPER BOOK FILED BEFORE US, INTER ALIA, IT HAS BEEN CLARIFIED THAT THE DVO, SOLAPUR HAS WRONGLY CONSIDERED NON-EXISTEN T AREA OF UPPER FLOOR OF DUPLEX AS PART OF BUILT UP AREA. TH E DVO HAS RECTIFIED THIS MISTAKE, ACCORDING TO WHICH THE BUIL T UP AREA OF THESE THREE UNITS IS LESS THAN 1500 SQ.FT. AS REGA RDS ARGUMENT OF LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE CIT(A) HAS NOT DECIDED THIS ISSUE, IT WAS UNDISPUTED THAT THIS OBJ ECTION WAS RAISED BEFORE CIT(A) AND THE SAME WAS NOT DECIDED. IT IS DEEMED THAT THE SAME HAS BEEN DECIDED AGAINST THE ASSESSEE BY THE CIT(A). THIS VIEW IS FORTIFIED BY THE DECISION OF ITAT, PUNE BENCH IN THE CASE OF PRAKASH DUGAD VS. DY.CIT (2005) 98 T TJ 506. THE DECISION IN PRAKASH DUGAD (SUPRA) WAS RENDERED AT T HE STRENGTH OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. SCINDIA STEAM NAVIGAT ION CO. LTD. (1961) 42 ITR 589 (SC) WHEREIN, IT WAS HELD THAT IF AN ISSUE RAISED BY THE ASSESSEE BEFORE CIT(A) AND THE SAME H AS NOT BEEN DECIDED, IT IS DEEMED THAT THE ISSUE WAS DECIDED AG AINST THE ASSESSEE. IN VIEW OF ABOVE, THE CIT(A) WAS NOT JUS TIFIED TO RESTRICT DEDUCTION ON PRORATA BASIS. THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF DEDUCTION IN A.Y. 2009-10. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED AND THAT OF CROSS OBJECTIONS FILED BY THE ASSESSEE IS A LLOWED. 9 ITA NO.2533/PN/12 CO NO.14/PN/2014 M/S. MOHITE & SURAJ ESTATE DEVELOPERS (JV) PRONOUNCED IN THE OPEN COURT ON THIS THE 26 TH DAY OF AUGUST, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 26 TH AUGUST, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A), KOLHAPUR 4) THE CIT, KOLHAPUR 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE