M/s. Thakkers Harmony, Mumbai V. ITO, Nashik

ITA 287/PUN/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3179 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 25-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S SINGH SMT MANJU AJWANI
• Assessee Lawyers: S U PATHAK
• Keywords: Retrospective amendment; Assessment record
• Section: 80IB; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NO. 287/PN/09 & 522/PN/09(ASSTT. YEAR 2004-05) M/S. THAKKERS HARMONY 215, LAMBA BUILDING, HINDUJA COLONY, SIR BHALCHANDRA MARG, MATUNGA MUMBAI 400 019 PAN NO. AACFT4250B .... APPELLANT VS. ITO, WARD 2(1), NASHIK . RESPONDENT APPELLANT BY : SHRI S.U PATHAK RESPONDENT BY : SHRI A.S. SINGH/ SMT. MANJU AJWANI ORDER PER D. KARUNAKARA RAO AM THESE ARE THE TWO APPEALS FILED BY ASSESSEE AGAINST THE ORDER OF CIT-I, NASHIK IDENTICALLY DATED 18/12/2008 FOR THE A.Y 2004 -05 PASSED U/S. 263 OF THE I.T. ACT. 2. AT THE VERY OUTSET, LD. COUNSEL FOR THE ASSESSE E STATED THAT CIT ASSUMED JURISDICTION U/S. 263 INVALIDLY WITHOUT APPRECIATING THE FACT THAT THE AMENDED PROVISIONS U/S. 80IB(10)(A)(I) OF THE ACT ARE NOT APP LICABLE TO THE YEAR UNDER CONSIDERATION. HE IS UNDER MISTAKEN BELIEF THAT THE A MENDED PROVISIONS ARE RETROSPECTIVE IN NATURE. IN THIS REGARD, LD. COUNSEL D EMONSTRATED THAT THE SAID AMENDED PROVISIONS OF SEC. 80IB(10)(A)(I) ARE APPLIC ABLE W.E.F 01/04/2004 WHEREAS THE YEAR UNDER CONSIDERATION IS A.Y 2004-05. HE ALSO M ENTIONED THAT THE NEW SUB SECTION 10 SUBSTITUTED IS INAPPLICABLE TO THE ASSES SEE AS IT DOES NOT HAVE RETROSPECTIVE EFFECT. ALTERNATIVELY, LD. COUNSEL ARGUED STATING THAT THE ISSUE OF APPLICABILITY OF THESE AMENDED PROVISIONS RETROSPECTIV ELY IS A DEBATABLE ISSUE AND THE CIT IS PREVENTED IN ASSUMING JURISDICTION U/S. 26 3 WHEN THE ISSUE IN QUESTION IS ITA NO. 287 & 522/PN/09 A.Y 2004-05 PAGE 2 OF 4 DEBATABLE IN NATURE. IN THIS REGARD, LD. COUNSEL RELIED ON THE JURISDICTIONAL SUPREME COURT JUDGMENT IN THE CASE OF GABRIAL INDIA CO LTD 24 3 ITR 83 AND MAX INDIA LTD 295 ITR 282. FURTHER, THE AR ARGUED STATING THAT THERE IS NO CONDITION THAT THAT CONSTRUCTION OF THE PROJECT APPROVED UNDER OLD PROVISIO NS OF SUBSECTION 10 OF SECTION 80(IB) OF THE ACT HAVE TO BE COMPLETED BEFORE 4 YEARS AND IT IS THE CONDITION IN THE NEW PROVISIONS, WHICH ARE INAPPLICABLE TO THE ASSESSE ES PROJECT. ON THE OTHER HAND, DR FOR REVENUE ARGUED STATING THAT IT IS AN ADMITTED POSITION THAT THE ASSESSEE DID NOT COMPLETE THE PROJECT WITHIN 4 YEARS. IN SUCH SIT UATION, THE CIT VALIDLY ASSUMED JURISDICTION. OTHERWISE, THE DR RELIED ON THE ORDER OF T HE CIT. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORD ER OF THE REVENUE, REASON OF ASSUMING JURISDICTION U/S. 263 READS AS UNDE R:- IT IS SEEN FROM THE ASSESSMENT RECORDS FOR A.Y 200 4-05 THAT THE A.O. HAD CONDUCTED SURVEY ACTION IN THE PREMISES OF THE ASSE SSEE AND BROUGHT ON RECORD THE FACT THAT THE HOUSING PROJECT APPROVED B Y THE LOCAL AUTHORITY BEFORE 1 ST APRIL 2004 WAS NOT COMPLETED BY THE ASSESSEE BY 31 .3.2008, IN VIOLATION OF THE CONDITIONS LAID DOWN IN STATUTE IN SECTION 80IB(10)(A)(I). THUS THE CLAIM OF DEDUCTION OF RS. 1796899 FOR A.Y 2004- 05 WAS NOT SUPPORTED BY THE STATUTE AND THEREFORE, THE ALLOWANCE OF THE AFO RESAID DEDUCTION FOR ASSESSMENT YEAR 2004-05 WAS ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF REVENUE. IT IS SEEN THAT THE A.O HAS PLACED THE REP ORTS ON THE RECORD . 4. FROM THE ABOVE, IT IS EVIDENT THAT THE NEW SUB-SE CTION 10 OF SEC. 80IB REPLACED THE OLD ONE W.E.F. 01/04/2004. WE HAVE COMP ARED SUBSECTION 10 AS EXISTED PRIOR TO THE AMENDMENT WITH THAT OF THE ONE B ROUGHT IN BY THE SAID AMENDMENT. A.SUB SEC 10 AS EXISTED PRIOR TO AMENDMENT BY THE F IN ACT (NO 2) 2004: 10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKIN G DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH, 2005 BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF- (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEV ELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE; AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP ARE A OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETERS FROM THE MUNICIPAL LI MITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. B. SUB SECTION 10 AS INTRODUCED BY THE FINANCE ACT (NO 2) 2004: [(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UND ERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH, [2008] BY A LOCAL ITA NO. 287 & 522/PN/09 A.Y 2004-05 PAGE 3 OF 4 AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING P ROJECT IF- (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEV ELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION- 5. FROM THE ABOVE, IT IS EVIDENT THAT THERE WAS NO TI ME SPECIFIED FOR COMPLETION OF THE HOUSING PROJECT AND SUCH CONDITION WAS INCORPO RATED FOR THE FIRST TIME BY THE SAID AMENDMENT AND THE SAME IS IN OPERATION W.E.F. 0 1/04/2004. NOTHING IS BROUGHT TO OUR NOTICE BY THE REVENUE TO DEMONSTRATE TH AT THE SAID AMENDMENT IS RETROSPECTIVE. IN FACT, LD. COUNSEL REFERRED TO SPECIAL BENCH DECISION IN THE CASE OF BRAMHA ASSOCIATES, WHEREIN CLAUSE (D) OF THE SAME 80I B(10) IS PROSPECTIVE IN NATURE AND ACCORDINGLY, IT IS APPLICABLE TO A.Y 2005-06 ONL Y. IN ANY CASE, THE ISSUE UNDER CONSIDERATION IS DEBATABLE ONE. IN SUCH CIRCUMSTANCES , THE APPLICABILITY OF THE JURISDICTIONAL SUPREME COURT JUDGMENT IN THE CASES OF GABRIAL INDIA CO LTD (SUPRA) AND MAX INDIA LTD (SUPRA) TO THE FACTS OF THE CASE A RE BEYOND A DOUBT AND IN SUCH CASE, CIT ASSUMED JURISDICTION IN THIS CASE INVALIDL Y . NO DECISION ON MERITS OF ADDITIONS. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ITA NO. 522/PN/09 7. ABOVE APPEAL HAS EMANATED FROM THE RECTIFICATION F ILED BY THE ASSESSEE IN THE CONTEXT OF THE ORDER OF THE CIT PASSED U/S. 263 OF TH E ACT. DURING THE PROCEEDINGS BEFORE US, LD. COUNSEL MENTIONED THAT THE APPEAL VID E ITA NO. 587/PN/09 ABOVE IS DECIDED IN HIS FAVOUR, THIS APPEAL BECOMES INFRUCTUOU S AND MERELY AN ACADEMIC EXERCISE. DR HAS NO OBJECTION IN THE SAID PROPOSITION . HOWEVER, HE RELIED ON THE ORDER OF THE CIT. CONSIDERING THE FACT THAT WE HAVE AL LOWED THE ASSESSEES APPEAL VIDE ITA NO. 587/PN/09 IN FAVOUR OF THE ASSESSEE, WE ARE OF THE OPINION THAT ADJUDICATING THE PRESENT APPEAL IS MERELY AN ACADEMIC EXERCISE. THEREFORE, THIS APPEAL UNDER CONSIDERATION IS DISMISSED AS INFRUCTUOUS . 8. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH NOVEMBER, 2010. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 12 TH NOVEMBER, 2010 R ITA NO. 287 & 522/PN/09 A.Y 2004-05 PAGE 4 OF 4 COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. ITO, WARD 2(1), NASHIK 3. CIT-I, NASHIK 4. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE