M/s. Anant Developers, Baroda V. The Income tax Officer,Ward-5(4), Baroda

ITA 254/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5884 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR MAJUMDARSR
• Assessee Lawyers: M K PATEL
• Keywords: Competent authority
• Section: 80IB; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.254/AHD/2013 ( / ASSESSMENT YEAR : 2008-09) M/S. ANANT DEVELOPERS C/O. TEJAS BHAVSAR 19, SHIV BUNGALOW KHODIYAR CHART RASTA NEW VIP ROAD VADODARA 390 006 / VS. THE INCOME TAX OFFICER WARD-5(4) VADODARA 390 007 $ ./ ./ PAN/GIR NO. : AAHFA 6752 C ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI M.K. PATEL, AR ($'*) / RESPONDENT BY : SHRI PRADEEP KUMAR MAJUMDAR,SR.DR +,*- / DATE OF HEARING 01/05/2017 ./0*- / DATE OF PRONOUNCEMENT 17/ 05/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-V, BAROD A [CIT(A) IN SHORT] DATED 06/11/2012 FOR THE ASSESSMENT YEAR (AY) 2008-09. 2. THE GROUND OF APPEAL RAISED BY THE ASSESSEE RE ADS AS UNDER:- ITA NO.254/AHD/ 2013 M/S.ANANT DEVELOPERS VS. ITO ASST.YEAR 2008-09 - 2 - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.COMMISSIONER OF INCOME TAX (APPEALS)-V ERRED IN DISALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE IN COME TAX ACT, 1961 AMOUNTING TO RS.46,01,488/- ON THE GROUND THAT THE APPELLANT IS NOT A BUILDER AND DEVELOPER OF HOUSING PROJECT. 3. BRIEFLY STATED, THE SHORT QUESTION IN ISSUE IS E LIGIBILITY OF DEDUCTION UNDER S.80IB(10) OF THE INCOME TAX ACT, 1961 (HEREI NAFTER REFERRED TO AS 'THE ACT') ON PROFITS IN THE CASE OF THE UNDERTAKIN G OF THE ASSESSEE ENGAGED IN DEVELOPING AND BUILDING HOUSING PROJECT. THE ASSESSING OFFICER (AO) IN THE COURSE OF THE ASSESSMENT FOR 20 08-09 HAS OBSERVED THAT THE ASSESSEE IS NOT THE OWNER OF THE LAND ON W HICH THE HOUSING PROJECT IS CONSTRUCTED AND THE APPROVAL AND THE LEG AL AUTHORITY IS ALSO NOT IN THE NAME OF THE ASSESSEE-FIRM. THE AO OBSERVE D IN CONCLUSION THAT THE CONDITIONS OF SECTION 80IB(10) HAS NOT BEEN FUL FILLED BY THE ASSESSEE IN THE INSTANT CASE AND HE ACCORDINGLY DENIED THE C LAIM OF DEDUCTION OF RS.46,01,488/- CLAIMED BY THE ASSESSEE UNDER S.80IB (10) OF THE ACT. 4. THE CIT(A) ALSO REFUSED TO INTERFERE WITH THE OR DER OF THE AO IN FIRST APPEAL. 5. WE FIND THAT SIMILAR ISSUE AROSE IN ASSESSEES O WN CASE FOR AY 2007-08 IN ITA NO.2062/AHD/2010 ORDER DATED 31/10/2 012 WHERE THE RELIEF HAS BEEN GRANTED BY THE CO-ORDINATE BENCH SU BJECT TO CERTAIN ITA NO.254/AHD/ 2013 M/S.ANANT DEVELOPERS VS. ITO ASST.YEAR 2008-09 - 3 - DIRECTIONS. THE RELEVANT PARA OF THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL FOR AY 2007-08(SUPRA) IS REPRODUCED HE REUNDER:- 3. THE FACTUAL MATRIX OF THE CASE IS THAT THE ASSE SSEE HAD DECLARED GROSS TOTAL INCOME OF RS.34,67,092/- AND AFTER CLAIMING D EDUCTION U/S.80IB OF THE IT ACT, THE TOTAL INCOME HAD BEEN RETURNED AT RS.NIL. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION OF BUILDING/SOCI ETY PROPERTY DEVELOPERS BUILDERS. DURING THE YEAR, THE APPELLANT HAD UNDER TAKEN CONSTRUCTION OF RESIDENTIAL HOUSING PROJECT INCLUDING SHOPS LOCATIO N OF R.S. NO. 213 & 214 SHESH NARAYAN SOCIETY BESIDE GANESH ESTATE NEW VI P SARDAR ESTATE RING ROAD, VADODARA. THE LD. A.O. GAVE REASONABLE OPPOR TUNITY OF BEING HEARD ON THE OWNERSHIP OF LAND WHICH WAS NOT IN THE NAME OF APPELLANT AND COMMERCIAL AREA OF THE PROJECT WAS MORE THAN LIMIT PRESCRIBED U/S. 80IB(10) (D) OF THE IT ACT. THE ASSESSEES REPLY WAS CONSIDERED. AFTER A NALYZING THE FACT OF THE CASE, THE A.O. HELD : (I) LAND WAS NOT IN THE NAME OF THE ASSESSEE. (II) NO COST OF LAND HAD BEEN PAID BY THE APPELLANT . (III) MODE AND AMOUNT OF COST OF LAND HAD NOT BEEN SUBMITTED BEFORE THE A.O. (IV) THE EVIDENCE OF SALE OF HOUSE WAS NOT GIVEN TO THE A.O. (V) THE ASSESSEE VIOLATED THE PROVISIONS OF SECTION 80IB(10)(D) OF THE IT ACT I.E. COMMERCIAL CONSTRUCT ION IS RESTRICTED TO 5% OF AGGREGATE BUILT UP AREA OF THE HOUSING PROJECT OR 2000 SQ.FT., WHICHEVER, IS LESS. AFTER DETAILED DISCUSSION MADE BY THE LD. A.O., HE DISALLOWED THE DEDUCTION OF RS.34,67,092/- U/S. 80IB(10) OF THE IT ACT. 4. BEING AGGRIEVED BY THE ORDER OF A.O., THE ASSESS EE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAS ALSO CONFIRMED THE ADDITI ON ON THE BASIS THAT THE APPELLANT HAD PURCHASED THE LAND FOR FIXED CONSIDER ATION AND IS DEVELOPING HOUSING PROJECT ON ITS OWN COST AND RISK AND THERE IS NO JOINT VENTURE WITH THE LAND OWNER. IT FULFILLED THIS CONDITION. THUS, IN TERMS OF THE DECISION IN CASE OF ITA NO.254/AHD/ 2013 M/S.ANANT DEVELOPERS VS. ITO ASST.YEAR 2008-09 - 4 - ITO VS M/S. SHAKTI CORPORATION AND FAQIR CHAND GULA TI VS UPPAL AGENCIES PVT. LTD. & ANR. HE ALSO RELIED UPON IN CASE OF R ADHE DEVELOPERS VS. ITO, BUT CONDITION LAID DOWN IN SECTION 80IB(10) IN CLAUSE ( A) TO (D) HAD NOT BEEN CUMULATIVELY SATISFIED. AS THE ASSESSEE HAD BUILT UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHES EXCEED 5% OF THE AGGREGATE B UILT UP AREA OF THE HOUSING PROJECT OR 2000 SQ.FT., WHICHEVER IS LESS. 5. NOW THE MATTER IS BEFORE US. THE LD. A.R., SHRI M.K. PATEL CONTENDED THAT THE AMENDMENT MADE IN SECTION 80IB(10) IS EFFE CTIVE ON PROJECT SANCTIONED AFTER 31 ST MARCH, 2005 NOT PROJECT APPROVED ON OR BEFORE THIS DATE. HE ALSO RELIED UPON THE DECISION IN CASE OF MANAN CORPO RATION VS. ACIT, CIRCLE-5 IN TAX APPEAL NO.1053 OF 2011 OF HONBLE GUJARAT HIGH COURT, ORDER DATED 03/09/2012 FOR A.Y. 2006-07 WHEREIN HONBLE GUJAR AT HIGH COURT HAD CONCLUDED THAT THE AMENDMENT IN SECTION 80IB(10 ) IS EFFECTIVE ON PROJECT APPROVED AFTER 31 ST MARCH,2005 NOT PROJECT APPROVED BY THE COMPETENT AUTHORITY ON OR BEFORE THAT DATE AND HELD AS UNDER: 34. ABOVE DISCUSSION CUMULATIVELY WHEN EXAMINED WI TH THE OBJECTIVES AND INTENT IT SOUGHT TO ACHIEVE IN BRING ING ABOUT THE SAID PROVISION OF SECTION 80IB(10), THIS AMENDED TA XING STATUTE REQUIRES TO BE INTERPRETED IN FAVOUR OF THE ASSESSE E RATHER THAN INSISTING UPON STRICT COMPLIANCE LEADING TO ABSURDI TY. FROM THE SIDE OF THE REVENUE, LD. D.R. FAIRLY CONCE DED THE FACT OF THE CASE. 6. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW AND GONE THROUGH THE CASE LAWS CITED BY THE APPELLANT. IN CASE OF M ANAN CORPORATION VS. ACIT (SUPRA), THE ISSUE BEFORE THE HONBLE GUJARAT HIGH COURT WAS IDENTICAL IN WHICH DEDUCTION U/S.80IB(10) WAS NOT ALLOWED ON THE BASIS OF AMENDED PROVISION IN CLAUSE (D) OF SUB SECTION 10 OF SECTIO N 80IB ACT BY THE A.O. BUT IN CASE OF APPELLANT, DATE OF APPROVAL OF THE PROJE CT BY THE COMPETENT AUTHORITY HAS NOT BEEN GIVEN AT ANY STAGE. THEREFO RE, THE A.O. IS DIRECTED TO VERIFY THE FACT OF THE ASSESSEES CASE AND TAKE DEC ISION AS PER LAW. ACCORDINGLY, THE MATTER IS SET ASIDE FOR LIMITED PU RPOSE. ITA NO.254/AHD/ 2013 M/S.ANANT DEVELOPERS VS. ITO ASST.YEAR 2008-09 - 5 - 6. IN CONSONANCE WITH THE AFORESAID ORDER OF THE CO -ORDINATE BENCH IN ASSESSEES OWN CASE, THE DIRECTIONS GIVEN BY THE CO ORDINATE BENCH IN AY 2007-08 SHALL APPLY MUTATIS MUTANDIS TO THE IMPUGNED AY 2008-09. THE AO IS DIRECTED TO GIVE SIMILAR EFFECT TO THE DIRECT IONS NOTED IN AY 2007- 08 TO THIS APPEAL ALSO. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS OF DIRECTIONS NOTED ABOVE. THIS ORDER PRONOUNCED IN OPEN COURT ON 17 / 05/2017 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 17/ 05 /2017 4..+,.+../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-V, BARODA 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD