SPR Builders, CHENNAI V. ITO Non Corporate Ward 6(3), CHENNAI

ITA 2781/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5230 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 20-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Benefit of exemption

Judgement Text

, / SMC , IN THE INCOME TAX APPELLATE TRIBUNAL C / SMC BENCH: CHENNAI , , ! | BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NO.2781/CHNY/2017 /ASSESSMENT YEAR: 2013-14 M/S.SPR BUILDERS, 135, SAPNA TRADE CENTRE, POONAMALLEE HIGH ROAD, EGMORE, CHENNAI-600 084. [PAN: ABEFS 7408 K] VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD-6(3), CHENNAI. ( & /APPELLANT) ( '(& /RESPONDENT) & ) / APPELLANT BY : MR. S.SRIDHAR, ADV. '(& ) /RESPONDENT BY : MR. B.SAGADEVAN, JCIT ) /DATE OF HEARING : 19.04.2018 ) / DATE OF PRONOUNCEMENT : 19.04.2018 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO.2781/CHNY/2017 IS AN APPEAL FILED BY THE AS SESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-5 , CHENNAI, IN ITA NO.84/CIT(A)-5/2016-17 DATED 21.09.2017 FOR THE AY 2013-14. 2. SHRI B.SAGADEVAN, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND SHRI S.SRIDHAR, ADV., REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.2781/CHNY/2017 :- 2 -: 3. IT WAS SUBMITTED BY THE LD.AR THAT THE ASSESSEE IS A PARTNERSHIP FIRM DOING THE BUSINESS OF REAL ESTATE. THE ASSESS EE HAD COMPLETED A PROJECT OCEAN HEIGHTS AT OLD WASHERMENPET. IT WA S A SUBMISSION THAT THE TOTAL AREA OF THE LAND IN RESPECT OF THE PROJEC T WAS 40 GROUNDS AND 373 SQ.FT. AFTER LEAVING OSR BEING THE COMPULSORY AREA TO BE LEFT OPEN, THE BALANCE AREA AVAILABLE FOR THE PROJECT WAS 37 GROUN DS AND 1107 SQ.FT. WHICH WAS APPROXIMATELY 1.75 ACRES OF LAND. THE AS SESSEE HAD CONSTRUCTED FLATS WITHIN THE SPECIFIED CRITERIA AND HAD CLAIMED THE BENEFIT OF EXEMPTION U/S.80IB(10) OF THE ACT FOR THE AY 201 0-11. THERE IS A VIOLATION WHICH HAD ALREADY BEEN CONSIDERED FOR THE AY 2012-13 LEADING TO THE DENIAL OF THE DEDUCTION U/S.80IB(10). FOR THOSE REASONS, THE AO HAD DISALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) FOR THE RELEVANT ASSESSMENT YEAR ALSO. IT WAS A SUBMISSION THAT FOR THE AYS 2010-11, 2011-12 & 2012-13 TRIBUNAL HAD CONFIRMED THE STAND OF THE AO IN RESPECT OF THE DENIAL OF THE DEDUCTION U/S.80IB(10). IT WA S SUBMITTED BY THE LD.AR THAT THE ORDER OF THE TRIBUNAL FOR THE AYS 20 10-11, 2011-12 & 2012-13 WERE PENDING BEFORE THE HONBLE JURISDICTIO NAL HIGH COURT. IT WAS, HOWEVER, A PRAYER THAT THE FACTS HAVE NOT BEEN PROPERLY ASSIMILATED AND THE CLAIM OF THE PROPORTIONATE DEDUCTION HAS AL SO NOT BEEN CONSIDERED. IT WAS A PRAYER THAT THE ISSUE MAY BE RESTORED TO THE FILE OF THE AO FOR ASSIMILATING THE CORRECT FACTS AND DO AN INDEPENDENT ENQUIRY REGARDING THE FACTS AND IN THE EVENT THAT THERE IS ANY VIOLATION THEN TO SUCH EXTENT PROPORTIONATE DEDUCTION U/S.80IB(10) BE GRANTED TO THE ASSESSEE TO AN EXTENT OF SUCH FLATS WHERE THERE IS NO VIOLATION. ITA NO.2781/CHNY/2017 :- 3 -: 4. IN REPLY, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS COMPLETED ONLY ONE PROJECT NAMELY OCEAN HEIGHTS. IT WAS A SUBMI SSION THAT THE BENEFIT OF DEDUCTION U/S.80IB(10) IS TO BE CONSIDERED FOR A PROJECT AS A WHOLE AND NOT FOR INDIVIDUAL FLATS IN THE PROJECT. IT WAS A FURTHER SUBMISSION THAT IF THE ISSUES WERE BEING RESTORED TO THE FILE OF THE A O FOR ASSIMILATION OF THE CORRECT FACTS AND FOR CONSIDERING THE PROPORTIONATE OR PRO-RATA DEDUCTION U/S.80IB(10), THEN WHEN PROPORTIONATE DEDUCTION IN RESPECT OF THE FLATS ARE CONSIDERED, THEN THE PRO-RATA UNDIVIDED INTERES T IN RESPECT OF THE LAND IN RESPECT OF SUCH FLATS, WHICH ARE NOT ELIGIBLE TO BE CONSIDERED FOR THE CLAIM OF DEDUCTION U/S.80IB(10) MUST ALSO BE EXCLUD ED. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. 6. AS HAS BEEN POINTED OUT BY THE LD.AR, THE ASSESS MENT ORDER IN THE PRESENT CASE DOES NOT BRING OUT ALL THE FACTS AS AR E NECESSARY FOR ADJUDICATING THE ISSUE. IT IS AN ADMITTED FACT THAT THE BENEFIT OF DEDUCTION U/S.80IB(10) IS IN RESPECT OF A PROJECT AND NOT IN RESPECT OF A SPECIFIC UNIT. ADMITTEDLY, THE ASSESSEE, HEREIN, HAS DONE ONLY ONE PROJECT NAMELY OCEAN HEIGHTS AT OLD WASHERMENPET. THOUGH, THE A O TALKS OF VIOLATION HAVING BEEN DONE FOR THE EARLIER ASSESSMENT YEARS, WHAT WERE THE SPECIFIC VIOLATIONS IS NOT EMANATING OUT OF THE ASSESSMENT O RDER. THE SAID PROJECT AS PER THE ASSESSMENT ORDER CONSISTS OF 154 UNITS. HOW MANY OF THESE UNITS HAVE VIOLATED THE CONDITIONS FOR THE CLAIM OF DEDUCTION U/S.80IB(10) ARE ALSO NOT CLEAR FROM THE ASSESSMENT ORDER. THIS BEING SO, THE ITA NO.2781/CHNY/2017 :- 4 -: ASSESSEES ALTERNATE PRAYER FOR THE CLAIM OF PROPOR TIONATE DEDUCTION IS DIRECTED TO BE CONSIDERED BY THE AO IN VIEW OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S.ARUN E XCELLO FOUNDATIONS (P) LTD, (2012 (12) TMI 415 - MADRAS HIGH COURT). WHEN CONSIDERING THE PRO- RATA DEDUCTION U/S.80IB(10), THE AO SHALL EXCLUDE T HE UNDIVIDED INTEREST IN THE LAND IN RESPECT OF SUCH FLATS WHICH HAVE BEEN H ELD TO HAVE VIOLATED THE CONDITIONS PRESCRIBED U/S.80IB(10). AFTER EXCLUDI NG THE UNDIVIDED INTEREST IN THE LAND IN RESPECT OF THE FLATS WHICH HAVE BEEN FOUND TO HAVE VIOLATED THE CONDITIONS U/S.80IB(10), IF THE BALANC E LAND FALLS BELOW THE BASIC REQUIREMENT OF 1.00 ACRE OF LAND IN RESPECT O F THE PROJECT THEN AUTOMATICALLY THE CLAIM OF DEDUCTION U/S.80IB(10) I N ITS ENTIRETY WOULD STAND DENIED. IN THESE CIRCUMSTANCES, WITH THE ABOV E DIRECTIONS, THE ISSUES IN THIS APPEAL ARE RESTORED TO THE FILE OF T HE AO FOR RE-ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 19, 20 18, AT CHENNAI. SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ITA NO.2781/CHNY/2017 :- 5 -: /CHENNAI, 1 /DATED: APRIL 19, 2018. TLN ) ' 23 43 /COPY TO: 1. & /APPELLANT 4. 5 /CIT 2. '(& /RESPONDENT 5. 3 ' /DR 3. 5 ( ) /CIT(A) 6. /GF