Dy. Commissioner of Income Tax , Lucknow V. Arif Industries Ltd., Lucknow

ITA 284/LKW/2013

• Counselvise Citation: 28423714 RSA 2013
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-11-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 22-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAFALI SWROOP
• Assessee Lawyers: RAKESH GARG SHRI RAJIV JOSHI
• Keywords: Assessment record
• Section: 80IB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.284 /LKW/201 3 A.Y.: 2007 - 08 DY. C.I.T ., RANGE - 1, LUCKNOW. VS. M/S ARIF INDUSTRIES LTD., 28, NAVAL KISHORE ROAD, HAZARATGANJ, LUCKNOW. PAN:AACCA2048M (APPELLANT) (RESPONDENT) APPELLANT BY SMT. SAFALI SWROOP, D.R. RESPONDENT BY SHRI RAKESH GARG, ADVOCATE SHRI RAJIV JOSHI, FCA DATE OF HEARING 18/11/2013 DATE OF PRONOUNCEMENT 2 9 /11/2013 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - II, LUCKNOW DATED 25/02/2013 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. THE GROUNDS RAISED BY REVENUE ARE AS UNDER: 1. THE CIT ( A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN HOLDING THAT THE AMENDED PROVISIONS WITH EFFECT FROM 01/04/2005 ARE NOT APPLICABLE TO THE ASSESSEE FOR THE RELEVANT A.Y. 2007 - 08, AS THE PROJECT FOR WHICH THE DEDUCTION U/S 80IB OF THE ACT HAS BEEN CLAIMED WA S APPROVED BY THE LDA ON 08 - 01 - 2002 & STARTED THE PROJECT PRIOR TO 01 - 04 - 2005. 2. THE CTT ( A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN HOLDING THAT THERE WAS NO SUCH REQUIREMENT AS REGARDS FURNISHING OF COMPLETION CERTIFICATE TILL 2005 IN SPITE OF [ 2 ] AB SOLUTELY CLEAR PROVISIONS OF SEC. 80IB (A)(I) WHICH SAYS THAT IN CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BETWEEN 01 - 10 - 98 & 01 - 04 - 04, THE PROJECT SHOULD BE COMPLETED ON OR BEFORE 31 - 03 - 2008. 3. THE CIT(A) HAS ERRED IN LAW AN D ON FACTS OF THE CASE IN HOLDING THAT AREA OF TERRACE & BALCONY IS NOT INCLUDIBLE IN THE BUILT UP AREA IN CASE OF PROJECTS WHICH HAVE COMMENCED PRIOR TO 01 - 04 - 2005 IN CONTRAVENTION TO THE PROVISIONS OF SEC. 80IB(10)(C) READ WITH SEC. 80IB(14)(A) OF THE AC T. 4. THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN HOLDING THAT THE PROVISIONS OF SEC. 80IB(10)(D) REGARDING BUILT UP AREA OF SHOPS & COMMERCIAL ESTABLISHMENT DO NOT EXCEED 5% OF THE AGGREGATE BUILT UP AREA OF THE HOUSING PROJECT, ARE NOT APPLI CABLE TO THE ASSESSEE FOR THE RELEVANT YEAR. 5. APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL, AS STATED ABOVE AS AND WHEN NEED OF DOING SO ARISES WITH THE PRIOR PERMISSION OF THE HON'BLE BENCH. 3. IN THIS CASE, THE ONLY DISPUTE IS REGARDING ALLOWABILITY OF DEDUCTION TO THE ASSESSEE U/S 80IB(10) OF THE ACT. THE FIRST OBJECTION OF THE ASSESSING OFFICER IS THAT THE PROJECT HAS NOT BEEN COMPLETED BEFORE 31/03/2008 AS PER THE PROVISION S OF CLAUSE (A)(I) OF SECTION 80IB(10) OF THE ACT. THE SECOND OBJECTION OF THE ASSESSING OFFICER IS THAT THE APPROVED COMMERCIAL AREA IS IN EXCESS OF 5% OF THE BUILT UP AREA OF THE PROJECT. THE THIRD OBJECTION OF THE ASSESSING OFFICER IS THAT THE BUILT UP AREA EXCEEDS 1,500 SQ. FT. THERE IS ONE MORE OBJEC TION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS FAILED TO FURNISH THE PRESCRIBED REPORT IN FORM NO. 10CCB AND NON PREPARATION AND FILING OF SEPARATE PROFIT & LOSS ACCOUNT AND BALANCE SHEET FOR THE METRO CITY PROJECT FOR WHICH THE DEDUCTION HAS BEEN CLA IMED U/S 80IB(10) OF THE ACT. FOR ALL THESE OBJECTIONS, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) OF THE ACT. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A), WHO HAS DEALT WITH ALL THESE OBJEC TIONS OF THE [ 3 ] ASSESSING OFFICER BUT DID NOT FIND MERIT IN ANY OF THESE OBJECTIONS AND HENCE, HE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 4. LEARNED D.R. SUPPORTED THE ASSESSMENT ORDER AND PLACED RELIANCE ON THE JUDGMENT OF HON'BLE SUPREME CO URT IN THE CASE OF BAJAJ TEMPO LTD. VS COMMISSIONER OF INCOME - TAX [1996] 196 ITR 188 (SC) . 5. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. AS AGAINST THIS, LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO PLACED R ELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (A) CIT VS. BRAHMA ASSOCIATES 330 ITR 289 (BOM) (B) MANAN CORPORATION VS. ACIT TAX APPEAL NO. 1052 OF 2011 DATED 03/09/2012 (GUJ) 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON REC ORD AND THE JUDGMENT S CITED BY THE LEARNED AR . REGARDING THE LAST OBJECTION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT FURNISHED THE PRESCRIBED AUDIT REPORT IN FORM NO.10CCB AND NON PREPARATION AND FILING OF SEPARATE PROFIT & LOSS ACCOUNT AND BALAN CE SHEET FOR THE METRO CITY PROJECT, WE FIND THAT A CLEAR FINDING IS GIVEN BY LEARNED CIT(A) THAT THESE OBSERVATIONS OF THE ASSESSING OFFICER ARE NOT FACTUALLY CORRECT. HE HAS ALSO GIVEN A FINDING THAT THESE DOCUMENTS ARE AVAILABLE AT SR.NO. 321 TO 331 O F THE PAPER BOOK FILED BEFORE HIM AND THE SAME WAS VERIFIABLE FROM THE ASSESSMENT RECORD. HENCE, ON THIS ASPECT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A) BECAUSE THESE FINDINGS OF THE LEARNED CIT(A) COULD NOT BE CONTROVERTED BY LEARNED D.R. OF THE REVENUE. 6.1 REGARDING THE OBJECTION OF THE ASSESSING OFFICER THAT A FEW RESIDENTIAL UNITS OF THE METRO CITY PROJECT ARE HAVI NG BUILT UP AREA OF MORE THAN 1,500 SQ. [ 4 ] FT., WE FIND THAT A CLEAR FINDING IS GIVEN BY LEARNED CIT(A) THAT AS PER THE R ULES OF THE LOCAL AUTHORITY SANCTIONING THE PROJECT, THESE AUTHORITIES CONSIDER ONLY 50% OF THE OPEN BALCONY FOR THE PURPOSE OF BUILT UP AREA AND WHEN SUCH WORKING IS DONE BY INCLUDING ONLY 50% AREA OF THE OPEN BALCONY, NONE OF THE FLAT S IS EXCEEDING BUILT UP AREA OF 1,500 SQ. FT. ON THE BASIS OF THIS FACTUAL FINDING, IT WAS HELD BY LEARNED CIT(A) THAT IN VIEW OF THIS , THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADOPTING THE BUILT UP AREA OF THE ASSESSEES FLATS AS MORE THAN 1,500 SQ. FT. LEARNED D.R. COULD NOT CONTROVERT THIS FINDING OF LEARNED CIT(A) AND THEREFORE, ON THIS ASPECT ALSO , WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LEARNED CIT(A). 6.2 THE MOST IMPORTANT OBJECTION OF THE ASSESSING OFFICER IS THAT THE PROJECT HAS NOT BEEN COMPLETED BEFORE 31/03/2008 AS PER THE AMENDED PROVISION OF SECTION 80IB(10) OF THE ACT. ON THIS ISSUE, RELIANCE HAS BEEN PLACED BY LEARNED A.R. OF THE ASSESSEE BEFORE US ON THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF MANAN CORPORATION (SUPRA) WHEREIN IT WAS HELD THAT THE AMENDED PROVISION S ARE NOT APPLICABLE IN RESPECT OF THOSE PROJECTS, WHICH ARE APPROVED PRIOR TO 01/04/2005 AND IN THE PRESENT CASE, THE PROJECT WAS APPROVED PRIOR TO 01/04/2005 AND THEREFORE, THE SAID AMEND ED PROVISIONS ARE NOT APPLICABLE IN THE PRESENT CASE. WE DO NOT CONSIDER IT NECESSARY TO ENTER INTO THIS CONTROVERSY BECAUSE THE ASSESSMENT YEAR BEFORE US IS ASSESSMENT YEAR 2007 - 08 FOR WHICH THE PREVIOUS YEAR HAS ENDED ON 31/03/2007 AND ADMITTEDLY EVEN AS PER THE ASSESSING OFFICER, THE ASSESSEE CAN COMPLETE THE PROJECT UP TO 31/03/2008 AND THEREFORE, IN OUR CONSIDERED OPINION, IN THE PRESENT YEAR, THIS ASPECT DOES NOT REQUIRE ANY CONSIDERATION OR COMMENTS FROM US. HENCE, WE LEAVE IT AT THAT AND HOLD THAT IN THE PRESENT YEAR, THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) IS TO BE ALLOWED BECAUSE THE DUE DATE FOR COMPLETION OF THE PROJECT AS PER THE AMENDED [ 5 ] PROVISIONS ALSO HAS NOT EXPIRED TILL LAST DATE OF THE PREVIOUS YEAR RELEVANT TO PRESENT ASSESSM ENT YEAR. 6.3 THE LAST OBJECTION OF THE ASSESSING OFFICER IS THAT THE COMMERCIAL AREA, AS PER THE APPROVED PROJECT, IS IN EXCESS OF 5% OF THE TOTAL BUILT UP AREA OF THE PROJECT. ON THIS ISSUE, THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF MAN AN CORPORATION (SUPRA) IS IN FAVOUR OF THE ASSESSEE A ND AS PER THE SAME, THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND HENCE, RESPECTFULLY FOLLOWING THIS JUDGMENT, WE HOLD THAT THIS OBJECTION OF THE ASSESSING OFFICER IS ALSO NOT VALID. 6. 4 AS PER OUR ABOVE DISCUSSION, WE HAVE FOUND THAT NONE OF THE OBJECTIONS RAISED BY THE ASSESSING OFFICER IS VALID AND HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2 9 T H NOV. 2013. *C.L.SINGH COPY OF THE O RDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A ) 5. DR, ITAT, LUCKNOW ASSISTANT REGISTRAR