Tulip Infrastructure, Ahmedabad V. The Income tax Officer,Ward-9(1), Ahmedabad

ITA 2807/AHD/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9691 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 04-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , , BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2807/AHD/2010 ( / ASSESSMENT YEAR : 2006-07) TULIP INFRASTRUCTURE 8, PRAYAG APARTMENTS 14-B VADNAGAR PATIDAR SOCIETY RAMBAUG, MANINAGAR AHMEDABAD / VS. THE INCOME TAX OFFICER WARD-9(1) AHMEDABAD ' ./ ./ PAN/GIR NO. : AADFT 6000 E ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '% ( / APPELLANT BY : SMT. ARTI N. SHAH, AR &''% ) ( / RESPONDENT BY : SMT. SONIA KUMAR, SR.DR * ) / DATE OF HEARING 19/01/2016 +,-. ) / DATE OF PRONOUNCEMENT 22/01/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDABA D [CIT(A) IN SHORT] DATED 12/07/2010 PERTAINING TO ASSESSMEN T YEAR (AY) 2006-07. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APP EAL:- ITA NO.2807 /AH D/2010 TULIP INFRASTRUCTURE VS. ITO ASST.YEAR 2006-07 - 2 - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-X V, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE BY HOLDING THAT THE APPELLANT IS NOT ELIGIBLE FOR DEDUCTION U/ S.80IB(10) OF THE INCOME TAX ACT, 1961, RELYING ON LETTER DATED 11/06 /2010 OF DISTRICT VALUER ADDRESSED BY HIM TO THE CIT(A)-XV, AHMEDABAD AND LEARNED CIT(A)-XV HAS ERRED IN NOT ALLOWING SUFFICI ENT OPPORTUNITY TO THE APPELLANT TO REPLY TO THE DISTRICT VALUERS COMMENTS. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 26/12/2008, THEREBY THE ASSESSING OFFICER (AO IN SHORT) DISALLOWED THE CLAIM OF DEDUCTION U/S.80-IB(10) OF THE ACT. THE ASSESSEE BEING AGGRIEVED BY THE ASSESSMENT ORDER, PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. WHILE DISMISSING THE APPEAL OF THE ASSESSEE, THE LD.CIT(A) HAS OBSERVED THAT DESPITE GIVING OPPORTUN ITIES, THE ASSESSEE HAS NOT BOTHERED TO FURNISH ANY COMMENTS ON THE OBJECTI ON RAISED BY THE DVO THAT IT DID NOT DEVELOP ONE ACRE OF LAND AS REQ UIRED VIDE CLAUSE (B) OF SECTION 80IB(10) WHICH SHOWS THAT THE ASSESSEE A GREES THAT IT VIOLATED CONDITION AS PER CLAUSE(B) OF SECTION 80IB(10). A GGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE LD.CIT(A) FAILED TO GIVE SUFFICIENT OPPORTUNITY TO THE ASSESSEE FOR RAISING ANY COMMENT AGAINST THE DVOS OBJECTION. THE LD.COUNSEL FOR TH E ASSESSEE SUBMITTED ITA NO.2807 /AH D/2010 TULIP INFRASTRUCTURE VS. ITO ASST.YEAR 2006-07 - 3 - THAT IF ANY OPPORTUNITY WAS GIVEN TO THE ASSESSEE, THE ASSESSEE WOULD HAVE DEMONSTRATED THAT THE OBJECTION OF DVO IS ILL-FOUND ED. 3.1. ON THE CONTRARY, LD.SR.DR SMT.SONIA KUMAR VEHE MENTLY OPPOSED THE SUBMISSION OF THE ASSESSEE THAT NO OPPORTUNITY WAS GRANTED TO THE ASSESSEE TO FURNISH COMMENTS, IF ANY, AGAINST THE O BJECTION RAISED BY THE DVO. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) DECIDED THIS ISSUE AGAIN ST THE ASSESSEE IN PARAS-16 & 17 OF HIS ORDER BY OBSERVING AS UNDER:- 16. THE APPELLANT ENTERED INTO A WORKS CONTRACT IS CLEAR FROM CLAUSES 1 AND 16 OF THE DEVELOPMENT AGREEMENT DATED 19.11.2003 AND NO DEDUCTION CAN BE ALLOWED U/S.80IB(1) AS PER EXPL ANATION INSERTED IN SECTION 80IB(10) RETROSPECTIVELY I.E. W.E.F. 1 ST APRIL, 2001. THE EXPLANATION IS AS UNDER:- FOR THE REMOVAL OF DOUBTS IT IS HEREBY DECLARED TH AT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY TO ANY UN DERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORKS CONTRACT AW ARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT) 17. THUS THE DISALLOWANCE MADE BY THE AO U/S.80IB(1 0) IS CONFIRMED BECAUSE THE APPELLANT FIRM DID NOT MAKE ANY INVESTM ENT TOWARDS LAND, FOR THIS RELIANCE IS PLACED ON HONBLE ITAT A BENCH AHMEDABAD DECISION IN THE CASE OF SHAKTI CORPORATION DATED 7. 11.2008. THE LAND WAS PURCHASED AND OWNED BY THE SWATI (RAKHIAL) COOP ERATIVE HOUSING SOCIETY LTD., WITH WHICH THE APPELLANT ENTERED INTO A WORKS CONTRACT FOR CONSTRUCTING TENEMENTS WHICH IS OBVIOUS FROM THE CL AUSES OF THE DEVELOPMENT AGREEMENT AND IS NOT ELIGIBLE FOR DEDUC TION U/S.80IB(10) ITA NO.2807 /AH D/2010 TULIP INFRASTRUCTURE VS. ITO ASST.YEAR 2006-07 - 4 - AS PER EXPLANATION ON WORKS CONTRACT INSERTED IN TH E STATUE IN SECTION 80IB(10) W.E.F. 1.4.2001 VIDE FINANCE (NO.2) ACT, 2 009. LAST BUT NOT THE LEAST THE APPELLANT DESPITE OPPORT UNITIES GIVEN HAS NOT BOTHERED TO FURNISH ANY COMMENTS ON THE OBJECTION R AISED BY THE DVO THAT IT DID NOT DEVELOP ONE ACRE OF LAND AS REQUIRE D VIDE CLAUSE (B) OF SECTION 80IB(10) WHICH SHOWS THAT THE APPELLANT AGR EES THAT IT VIOLATED CONDITION AS PER CLAUSE (B) OF SECTION 80IB(10). 4.1. IT IS THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE THAT THE DVOS OBJECTION IS ILL-FOUNDED. THE LD.CIT(A) OBSE RVED THAT THE REPORT OF THE DVO DATED 11.6.2010 WHICH WAS ANNEXED AS A NNEXURE-I, WHICH ARE IN THE FOLLOWING TERMS:- NO.8(5)/DVO/2010-11/153 JUNE 11,2010 TO THE CIT(APPEALS)-XV, AHMEDABAD SUB : VERIFICATION OF THE SIZE OF THE PLOT OF LAND OF THE PROJECT AND BUILT UP AREA OF THE RESIDENTIAL UNIT AS PER CONDITIONS FOR ALLOWANCE OF 80IB(10) OF HOUSING PROJECT NAMED NAMED 'ASHWAMEGH TENEMENT', S ITUATED AT FINAL PLOT NO.183, TPS NO11 OF RAKHIAL,AHMEDABAD - ASSESSEE M/S TULIP INFRASTRUCTURE - REF : I) THIS OFFICE LETTER OF EVEN NUMBER DATED 27/1/10 II) DISCUSSION IN YOUR CHAMBER ON 3/6/2010 MADAM, THE CONTENTS OF THIS OFFICE LETTER DATED 27/1 /10 A RE REPRODUCED HEREUNDER: QUOTE - 'THE ASSESSEE HAS AVOIDED TO PROVIDE COMPLE TE DETAILS AND COPY OF APPROVED LAYOUT PLAN OF PLOT AREA MEASURING 21137 S Q.M. AS NOTED FROM COPY OF PURCHASE DEED OF PLOT DATED 5/6/1999. ITA NO.2807 /AH D/2010 TULIP INFRASTRUCTURE VS. ITO ASST.YEAR 2006-07 - 5 - AS PER COPY OF RAJA CHITHI OF BLOCK A TO E DATED 18 /10/2003 TO 7/08/2004 AND BUILDING USE PERMISSION FROM 13/12/2004 TO 7/4/2005 , IN ALL 70 UNITS, MEASURING TOTAL BUILT UP AREA OF 3464.88 SQ.M ONLY CONSTRUCTED. THUS, STATUS OF REMAINING AREA OF PLOT (BALANCE AREA OF PLOT) IS TO BE VERIFIED. THUS, PLOT IS NOT DEVELOPED FULLY AND MIGHT HAVE BE EN DEVELOPED FOR ABOUT 10% OF PERMISSIBLE F.S.I. THUS ASSESSEE MAY NOT QUA LIFY TO AVAIL BENEFIT OF SECTION 80 IB (10) OF IT. ACT. HOW CO-OPERATIVE SOCIETY REALIZE MONEY SPENT ON PUR CHASE OF PLOT OF LAND. IT APPEARS, IN NUMBER OF CASES THAT PROFIT RETURNED BY ASSESSEE IS SUBSTANTIALLY HIGHER THAN NORMALLY EXPECTED IN UNDERTAKING CONSTR UCTION OF BUILDINGS. ' - UNQUOTE IN THIS REGARD, IT IS TO MENTION HERE THAT THE ASSE SSEE HAS NOT DEVELOPED RESIDENTIAL UNITS TO SATISFY MANDATORY REQUIREMENT OF DEVELOPING PLOT OF LAND MEASURING MINIMUM AREA OF 1 ACRE. IN THIS CASE 70 RESIDENTIAL UNITS MEASURING TOTAL B UILT-UP AREA OF 3464.88 SQ.M ONLY IS CONSTRUCTED. WITH PERMISSIBLE FS1 OF 1.8, BUILT-UP AREA DEVELOPED CAN BE CONSIDERED IN PLOT AREA MEASURING 3464.88 SQ.M/1 .8 = 1924.93 SQ.MT., WHICH IS LESS THAN ONE ACRE. THOUGH, ASSESSEE HAS NOT ARRANGED INSPECTION IN SPI TE OF REMINDING BY YOUR GOOD SELF ALSO, HOWEVER, IN VIEW OF AFORESAID, CLAI M OF ASSESSEE BE DISALLOWED AS THEY DO NOT SATISFY MANDATORY REQUIREMENT OF DEV ELOPING PLOT OF LAND MEASURING MINIMUM AREA OF 1 ACRE. YOURS FAITHFULLY, SD/- (O.P. PUROHIT) DISTRICT VALUATION OFFICER INCOME TAX DEPT., AHMEDABAD COPY TO: 1) THE CIT-IV, AHMEDABAD 2) THE ADDL.CIT, RANGE 9, AHMEDABAD 4.2. THE CONTENTION OF THE ASSESSEE IS ALSO THAT SU FFICIENT OPPORTUNITY WAS NOT GRANTED TO GIVE FINDINGS ON THE OBJECTION O F THE DVO. ITA NO.2807 /AH D/2010 TULIP INFRASTRUCTURE VS. ITO ASST.YEAR 2006-07 - 6 - 4.3. AFTER PERUSING THE RECORDS AND LOOKING TO THE TOTALITY OF THE FACTS OF THE CASE AS THE LD.CIT(A) HAS BASED HER FINDING ON THE DVOS REPORT DATED 11/06/2010, WE ARE OF THE CONSIDERED VIEW TH AT THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO GIVE COMMENTS ON THE DVO S REPORT. THEREFORE, WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND RESTORE THE ISSUE BACK TO THE FILE OF LD.CIT(A) FOR DECISION AFRESH. NEEDLESS TO SAY THAT THE LD.CIT(A) WOULD AFFORD REASONABLE OPPORTUNITY TO TH E ASSESSEE FOR MAKING COMMENTS UPON THE DVOS REPORT DATED 11.6.20 10. THE ASSESSEE IS HEREBY DIRECTED TO CO-OPERATE WITH LD.CIT(A) FOR FURNISHING THE COMMENTS ON THE DVOS REPORT. IF NEEDED, THE LD.CI T(A) WOULD BE AT LIBERTY TO MAKE FURTHER ENQUIRY THROUGH THE ASSESSI NG OFFICER WITH REGARD TO ELIGIBILITY OF DEDUCTION U/S.80IB(10) OF THE ACT . ACCORDINGLY, ASSESSEES GROUND IS ALLOWED FOR STATISTICAL PURPOS ES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 22 N D DAY OF JANUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 22/ 01 /2016 2.., .../ T.C. NAIR, SR. PS ITA NO.2807 /AH D/2010 TULIP INFRASTRUCTURE VS. ITO ASST.YEAR 2006-07 - 7 - !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-XV, AHMEDABAD 5. 7 8 &45 , 45. , 3 / DR, ITAT, AHMEDABAD 6. 8:; <* / GUARD FILE. ! / BY ORDER, '7 & //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 19.1.2016 (DICTATION-PAD 8 -- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 20.1.2016 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.22.1.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 22.1.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER