ITO WD 1(2), KALYAN V. KANTILAL DHANRAJ JAIN (HUF), BHIWANDI

ITA 2743/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2232 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 22-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Assessee Lawyers: SEJAL LALIT JAIN
• Section: 147

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SANJAY ARORA , A M ./ I.T.A. NO. 2743/MUM/2014 ( / ASSES SMENT YEAR: 2006 - 07 ) INCOME TAX OFFICER, WARD 1(2), KALYAN, 1 ST FLOOR, MOHAN PLAZA, WAYALE NAGAR, KHADAKPADA, KALYAN / VS. KANTILAL DHANRAJ JAIN (HUF) H. NO. 64/2, 1 ST FLOOR, MALANI BHUWAN, PRABHU ALI, MANDAI, BHIWANDI 421 302 ./ ./ PAN/GIR NO. AABHJ 8351 E ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI B. S. BIST / RESPONDENT BY : MS. SEJAL LALIT JAIN / DATE OF HEARING : 16.11.2015 / DATE OF PRONOUNCEMENT : 27 .11.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE REVENUE ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - I , THANE (CIT(A) FOR SHORT) DATED 16.01.2014 , PARTLY A LLOWING THE A SSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143(3) R/W S. 147 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2006 - 07 VIDE ORDER DATED 30.12.2010 . 2. THE ONLY ISSUE ARISING PER THE INSTANT APPEAL IS THE V ALIDITY OF THE DELETION OF THE DISALLOWANCE OF THE ASSESSEES, A HUF IN THE BUSINESS OF PROP E RTY DEVELOPMENT, CLAIM 2 ITA NO. 2743/MUM/2014 (A.Y. 2006 - 07) ITO VS. KANTILAL DHANRAJ JAIN (HUF) FOR DEDUCTION U/S.80 - IB(10) , PREFERRED IN THE SUM OF RS.13,67,159/ - IN RESPECT OF A HOUSING PROJECT BY THE NAME SILVER LEAF RESIDENCY AT BHI WANDI , BY THE LD. CIT(A) IN FIRST APPEAL. THE SAME, AS APPARENT FROM THE GROUNDS RAISED AS WELL AS THE READING OF THE ASSESSMENT ORDER, WAS DENIED BY THE ASSESSING OFFICER (A.O.) ON TWO GROUNDS , VIZ: A) T HE PLOT SIZE OF THE PROJECT BEING LESS THAN ONE ACRE (4 046.85 SQ. MTRS.); AND B) S O ME FLATS HAVING BUILT - UP AREA OF MORE THAN 1000 SQ. FT., S O THAT THE CONDITION OF SECTION 80 - IB(10) (B) AND (C) RESPECTIVELY STOOD VIOLATED, WITH IT BEING TRITE LAW THAT ALL THE CONDITIONS HAVE TO BE MET SIMULTANEOUSLY FOR A HOUSIN G PROJECT TO QUALIFY AS AN ELIGIBLE PROJECT. THE LD. CIT(A) , WHOSE ORDER IS COMBINED ORDER FOR A.YS. 2005 - 06 AND 2006 - 07, ALLOWED RELIEF TO THE ASSESSEE ON THE BASIS OF THE DECISION IN FIRST APPE A L FOR A.Y. 2007 - 08; THE FACTS BEING THE SAME. AS REGARDS THE S O ME FLATS HAVING BUILT - UP AREA OF OVER 1000 SQ. FT. , HE DIRECTED PROPORTIONATE DEDUCTION, I.E., BY EXCLUDING THE AREA (OF THE TOTAL AREA) OCCUPIED BY SUCH F LATS , WORKING OUT THE SAME THOUGH BY EXCLUDING THE AREA OF THE BALCONY (REFER PARA 7 OF THE IMPUGN ED ORDER). AGGRIEVED, THE REVENUE IS IN APPEAL. 3. AT THE OUTSET, THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, WOULD SUBMIT THAT THE ISSUE / S ARISING IN THIS APPEAL IS SQUARELY COVERED BY THE O RDER BY THE T RIBUNAL IN THE ASSESSEES OWN C ASE FOR A.Y. 2007 - 08 (IN ITA NO. 6485/MUM /2013 DATED 16.10.2015/COPY ON RECORD). SHE WOULD THEN ADVERT TO THE RELEVANT PART OF THE SAID ORDER. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE SAID ASSERTION BY THE LD. AR. 4. THE PARTIES WERE HEARD , AND THE MATERIAL ON RECORD PERUSED. THE HOUSI NG PROJECT FOR WHICH THE DEDUCTION U/S.80 - IB(10) IS UNDER CONSIDERATION IS THE SAME AS THAT FOR A.Y. 2007 - 08. WITH REGARD TO THE PLOT AREA, THE TRIBUNAL HAS, WITH REFERENCE TO THE DECISION BY THE HON'BLE JURISDICTIONAL HIGH COURT IN 3 ITA NO. 2743/MUM/2014 (A.Y. 2006 - 07) ITO VS. KANTILAL DHANRAJ JAIN (HUF) THE CASE OF VANDANA PROPERTIES (REPORTED AT [2012] 19 TAXMANN.COM 316 (MUM)) , CLARIFI ED THAT THE AREA OF THE PLOT IS TO BE WORKED OUT FOR THE ENTIRE HOUSING PROJECT, I.E., AS APPROVED, AND NOT WITH REFERENCE TO ANY PARTICULAR BUILDING. FURTHER, RELYING ON THE DECISION IN THE CASE OF BUNTY BUILDERS VS. ITO [2010] 127 ITD 286 (PUNE) , IT STANDS HELD THAT THE AMENITY SPACE AND THE LAND SURRENDERED FOR THE ROAD IS NOT TO BE EXCLUDED WHILE RECKONING THE PLOT AREA IN - AS - MUCH AS THE SA ME FORM S AN INTEGRAL PART OF THE HOUSING PROJECT. AS REGARDS THE BUILT - UP AREA, THE SAME IS TO BE WORKED OUT BY NOT EXCLUDING THE BALCONY AREA , AS THE PROJECT UNDER REFERENCE STANDS APPROVED ON 24.6.1999, I.E., PRIOR TO THE AMENDMENT DEFIN ING BUILT - UP AREA , EFFECTIVE 01.4.2005, FOLLOWING THE DECISIONS IN THE CASES OF CIT VS. ANRIYA PROJECT MANAGEMENT SERVICES PVT. LTD. [2012] 21 TAXMANN.COM 140 (KAR) AND CIT VS. G. R. DEVELOPERS (IN ITA NO. 355 OF 2009) . THE LD. C IT(A) HAS DIRECTED FOR ALLOWANCE OF DEDUCTIO N ON PROPORTIONATE BASIS, WHERE THE BUILT - UP AREA, SO C ALCULATED , YET WORKS TO IN EXCESS OF 1000 SQ. FT. ; THE CONCURRENT FINDING OF THE AUTHORITIES BELOW BEING THAT THE ASSESSEES PROJECT STANDS LO CATED WITHIN THE PRESCRIBED DISTANCE OF 25 KMS . FROM THE MU NICIPAL LIMIT OF MUMBAI. THE CONCEPT OF PROPORTIONATE DEDUCTION STANDS APPROVED BY THE TRIBUNAL VIDE ITS ORDER IN ASST. CIT VS. EKTA SANKALP DEVELOPERS [2015] 53 TAXMANN.COM 75 (MUM - TRIB), CONSIDERING ALSO THE DECISION BY THE HON'BLE JURISDICTIONAL HIGH C OURT IN CIT VS. BRAHMA ASSOCIATES [2011] 197 TAXMANN 459 (BOM). U NDER THE CIRCUMSTANCES, WE FIND NO REASON TO INTERFERE WITH THE IMPUGNED ORDER , WHICH STANDS AFFIRMED. I DECIDE ACCORDINGLY. 5. IN THE RESULT, THE R EVENUE S APPEAL IS DISM ISSED . ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 27 , 201 5 SD/ - (S ANJAY ARORA) / A CCOUNTANT MEMBER MUMBAI ; DATED : 27 . 11 .201 5 4 ITA NO. 2743/MUM/2014 (A.Y. 2006 - 07) ITO VS. KANTILAL DHANRAJ JAIN (HUF) . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI