Asstt.Commissioner of Income Tax ,Amravati Circle-Amravati, Amaravati V. M/s S .Navin Builders, Amaravati

ITA 280/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93419 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 19-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH DAWANDE
• Keywords: Business income
• Section: 143(3); 260A; 80IB; 263

Judgement Text

1 ITA NOS. 280 AND 281/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T. A. NOS. 280 & 281/NAG/2013 ASSESSMENT YEARS 2008 - 09 & 2009 - 10. ASSTT. COMMISSIONER OF INCOME - TAX, M/S S. NAVIN BUILDERS, AMRAVATI CIRCLE, AMRAVATI. V/S. WANI MARKET, RALLIES PLOT, AMRAVATI. PAN AAYFS5446A (APPELLANT) RESPONDENT. APPELLANT BY : SHRI RAMESH DAWANDE. RESPONDENT BY : SHRI K. P. DEWANI. DATE OF HEARING : 14 - 05 - 2015 DATE OF PRONOUNCEMENT : 13 TH JULY, 2015. O R D E R PER SHRI MUKUL K. SHRAWAT, J.M. BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE DEPARTMENT ARISING FROM THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR IDENTICALLY DATED 19 TH MARCH, 2013. THE GROUNDS RAISED BY THE REVENUE DEPARTMENT ARE REPRODUCED BELOW : A ASSESSMENT YEAR : 2008 - 09. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) HAS ERRED IN ALLOWING DEDUCTION U/S 80IB OF THE ACT (AS AMENDED W.E.F. 01.04.2005) RELYING ON THE DECISION OF THE ITAT IN THE ASSESSEES OWN CASE FOR A.Y. 2 005 - 06 WHICH WAS NOT ACCEPTED BY THE DEPARTMENT AND APPEAL U/S 260A OF THE ACT WAS FILED. 2 ITA NOS. 280 AND 281/NAG/2013 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) HAS ERRED BY DELETING ADDITION MADE BY THE AO BY VARYING COST O F COMMERCIAL FSI BY AN AMOUNT OF ` .24/ - SQ.FT. WITHOUT APPRECIATING THE FACT OF THE CASE. B ASSESSMENT YEAR : 2009 - 10. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) HAS ERRED IN ALLOWING DEDUCTION U/S 80IB OF THE ACT (AS AMENDED W.E.F. 01.04.2005) RELYING ON THE DECISION OF THE ITAT IN THE ASSESSEES OWN CASE FOR A.Y. 2005 - 06 WHICH WAS NOT ACCEPTED BY THE DEPARTMENT AND APPEAL U/S 260A OF THE ACT WAS FILED. 2. WHETHER ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) HAS ERRED IN ALLOWING DEDUCTION U/S 80IB(10) OF THE ACT WITHOUT APPRECIATING THAT THE RETURN WAS FILED ON 01.10.2009 WHICH WAS BEYOND THE PRESCRIBED TIME LI8MIT U/S 139(1) OF THE ACT. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) HAS ERRED BY DELETING ADDITION MADE BY THE AO BY VARYING COST OF COMMERCIAL FSI BY AN AMOUNT OF ` .24/ - SQ.FT. WITHOUT APPRECIATING THE FACT OF THE CASE. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) HAS ERRED BY DELETING ADDITION OF ` .1,10,789/ - AND ` .1,98,800/ - MADE BY THE AO ON ACCOUNT OF INCREASE IN COMMERCIAL PROFIT WITHOUT APPRECIATING THE FACT OF THE CASE. SINCE THE FACTS AS WELL AS SOME OF THE GROUNDS IN BOTH THE YEARS ARE IDENTICAL, THEREFORE, THESE APPEALS ARE CONSOLIDATED. 2. AS PER THE FACTS FOR ASSESSMENT YEAR 2008 - 09 NARRATED BY THE ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT ORDER PASSED UNDER SECTI ON 143(3) DATED 29 - 12 - 2010 WERE THAT THE ASSESSEE FIRM WAS IN THE BUSINESS OF CONSTRUCTION, THEREFORE, BUILT A PROJECT AT AMRAVATI CONTAINING SEVEN BLOCKS. ACCORDING TO THE ASSESSING OFFICER, BLOC K S A, B, D WERE PARTLY COMMERCIAL. BLOCK C WAS HAVING COMM ERCIAL AREA. BLOCKS E, F, G WERE PURELY RESIDENTIAL BLOCKS. IN THE ASSESSMENT ORDER, THE 3 ITA NOS. 280 AND 281/NAG/2013 ASSESSING OFFICER HAD BIFURCATED THE ACTIVITIES INTO TWO I.E. RESIDENTIAL CONSTRUCTION AND COMMERCIAL CONSTRUCTION. THE ASSESSING OFFICER HAS GRANTED DEDUCTION UNDER S ECTION 80IB ONLY IN RESPECT OF FULLY RESIDENTIAL BLOCKS I.E. BLOCK E, F, G. THE ASSESSING OFFICER HAS, THEREFORE, DENIED THE BENEFIT OF DEDUCTION UNDER SECTION 80IB IN RESPECT OF OTHER BLOCKS. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHO RITY, THE LEARNED CIT(APPEALS) HAS BEEN INFORMED THAT IN ASSESSMENT YEAR 2005 - 06 THE SAID ISSUE WAS RAISED BY LEARNED COMMISSIONER UNDER SECTION 263 OF I.T. ACT, HOWEVER, THAT ORDER WAS QUASHED BY THE HONBLE ITAT IN ITA N O. 305/NAG/2008. THE LEARNED COMMI SSIONER HAS REPRODUCED THE RELEVANT PARAGRAPHS OF THE SAID ORDER OF THE TRIBUNAL AND THEREAFTER GRANTED RELIEF IN THE FOLLOWING MANNER: 7. PERUSAL OF THE ABOVE ORDER OF THE HONBLE ITAT MAKES IT EVIDENT THAT THE HONBLE ITAT HAS COME TO THE CONSIDERED C ONCLUSION THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S 80IB(10). THE HONBLE ITAT HAS ALSO FOUND THE ACCEPTANCE BY THE LD.AO OF FSI AT ` .550/ - PER SQ.FT. TO BE ON THE BASIS OF COMMERCIAL PRUDENCE. THE PERUSAL OF THE DEVELOPMENT AGREEMENT ALSO INDIC ATES THAT THE APPELLANT HAS COMPUTED SEPARATE COST OF FSI WITH REGARD TO THE COMMERCIAL AREA V IS - A - VIS THE RESIDENTIAL AREA. IN ANY CASE THE GENUINENESS OF THE AGREEMENT OF DEVELOPMENT HAS NOT BEEN DISPUTED BY THE LD.AO. THE L D .AO HAS ACCEPTED THE DEVELOPMENT AGREEMENT IN RESPECT OF EVERY ASPECTS INCLUDING TOTAL COST IN THE DEVELOPMENT AGREEMENT AND HENCE THERE IS NO JUSTIFICATION FOR VARYING THE COST OF FSI OF THE COMMERCIAL AREA BY AN AMOUNT OF ` .24/ - PER SQ.FT. 7.1 CONSI DERING THE ABOVE FACTUAL POSITION AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ITAT IN THE CASE OF THE APPELLANT AND IN THE CASE OF BRAMHA ASSOCIATES (SUPRA) , I ALSO HOLD THAT THERE IS NO JUSTIFICATION FOR BIFURCATING THE TOTAL PRICE PAID FOR RESIDENTIAL AND COMMERCIAL PREMISES BY VARYING AT DIFFERENT RATES THAN THAT PROVIDED IN THE DEVELOPMENT AGREEMENT AND I THEREFORE HOLD THAT CONSEQUENTLY THE ADDITION MADE BY THE LD.AO FOR MAKING SUCH VARIATION IS UNJUSTIFIED AND THE SAME IS DIRECTED TO BE DELETED. 4 ITA NOS. 280 AND 281/NAG/2013 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT IN A SITUATION WHEN A VIEW HAS ALREADY BEEN TAKEN BY THE RESPECTED COORDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005 - 06 BEARING ITA N O. 305/NAG/2008 OR DER DATED 31 - 07 - 2009 AND THAT VIEWS OF THE TRIBUNAL HAS BEEN FOLLOWED BY LEARNED CIT(APPEALS) WHILE GRANTING RELIEF, THEREFORE, NO OPTION IS AVAILABLE BUT TO FOLLOW THE SAID ORDER OF THE TRIBUNAL. IN ADDITION TO THE SAID ORDER OF THE TRIBUNAL PRONOUNCED IN ASSESSEES OWN CASE, TWO MORE DECISIONS, NAMELY, M/S BRAMHA ASSOCIATES 333 ITR 289 (BOM.) AND M/S VANDANA PROPERTIES 353 ITR 36 (BOM.) HAVE ALSO BEEN CITED. RESPECTFULLY FOLLOWING THESE DECISIONS, WE HEREBY HOLD THAT THERE WAS NO FALLACY IN THE VERDICT O F LEARNED CIT(APPEALS), HENCE THE SAME IS HEREBY CONFIRMED. THEREFORE, GROUND NO.1 OF THE REVENUE FOR ASSESSMENT YEAR 2008 - 09 IS HEREBY DISMISSED. 5. AS FAR AS GROUND N O.2 IS CONCERNED, WE ARE OF THE VIEW THAT MERELY ON A PRESUMPTION THE ASSESSING OFFICER HAS BIFURCATED THE FSI OF THE COMMERCIAL AREA. HENCE LEARNED CIT(APPEALS) HAS RIGHTLY HELD THAT THERE WAS NO JUSTIFICATION FOR ADOPTING A DIFFERENT COST OF FSI OF COMMERCIAL AREA. WE, THEREFORE, DISMISS THIS GROUND OF THE REVENUE AS WELL. 6. APROPOS GROUND S RAISED BY THE REVENUE FOR ASSESSMENT YEAR 2009 - 10, WE HAVE NOTED THAT ALL OF THEM ARE COVERED AS DISCUSSED HEREIN ABOVE. EVEN IN RESPECT OF GROUND N O.4, WE ARE NOT INCLINED TO DISTURB THE FINDING OF LEARNED CIT(APPEALS) THAT THE IMPUGNED ADDITION WAS ALREADY PART OF THE BUSINESS INCOME DISCLOSED IN THE RETURN OF INCOME. THEREFORE, THERE WAS NO BASIS TO TAX THE SAID AMOUNT AGAIN IN THE HANDS OF THE ASS ESSEE. DUE TO THIS REASON THE LEARNED A.R. HAS ALSO ARGUED BEFORE US THAT THE IMPUGNED ADDITION WAS NOTHING BUT DOUBLE ADDITION IN THE HANDS OF THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE 5 ITA NOS. 280 AND 281/NAG/2013 NOT INCLINED TO DISTUR B THE FINDINGS OF LEARNED CIT(APPEALS). HENCE THE SAME ARE HEREBY CONFIRMED AND THE REVENUES GROUNDS ARE DISMISSED. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF JULY, 2015. SD/ - SD/ - ( SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 13 TH JULY, 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR