ITO Wd 11[4] Pune, Pune V. M/s A. G. Joshi & Co, Pune

ITA 288/PUN/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 66908 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 10-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P SARANGI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.287 & 288/PN/2012 (ASSTT. YEAR : 2006-07 & 2007-08) ITO, WARD-1(4), PUNE. .. APPELLANT VS. M/S.A.G.JOSHI & CO., 49/1, PARVATI, PUNE SATARA ROAD, PUNE. .. RESPONDENT PAN: AACFA1851B ASSESSEE BY : SHRI KISHOR PHADKE DEPARTMENT BY : SHRI S.P.SARANGI DATE OF HEARING : 06.05.2013 DATE OF PRONOUNCEMENT : 16.05.2013 ORDER PER SHAILENDRA KUMAR YADAV, JM : BOTH THESE APPEALS PERTAIN TO SAME ASSESSEE ON SIM ILAR ISSUE, SO THEY ARE BEING DISPOSED OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ONLY ISSUE IN BOTH THE APPEALS IS REGARDING CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. THE ASSESSEE, E NGAGED IN THE BUSINESS OF MANUFACTURING OF SHADOW-LESS LAMPS AND REAL ESTATE CONSTRUCTION, HAD CLAIMED DEDUCTION U/S.80IB(10) OF THE ACT ON VARIOUS AMOUNTS STARTING FROM A.Y. 2004-05 TO 2007- 08 FOR PHASE-I OF RUTURANG PROJECT. PHASE-I CONSISTS OF BUILDINGS TERMS AS A, B, C, D, E, F, G AND H BUILDINGS. COMMENCEMENT CERTIFICA TE OF THIS PHASE-I WAS RECEIVED ON 16.05.2000 AND COMPLETION C ERTIFICATE FOR THIS PHASE WAS ISSUED VIDE CERTIFICATE DATED 11.03. 2003. THIS PROJECT WAS APPROVED BY THE PUNE MUNICIPAL CORPORAT ION (PMC) AS 2 RESIDENTIAL CUM COMMERCIAL. THE COMMERCIAL BUILT U P AREA IN PHASE-I CONSISTS OF 2,454.64 SQ.MT. OUT OF TOTAL AR EA OF PHASE-I OF 16,803.74 SQ.MT. THE ASSESSING OFFICER INITIALLY A LLOWED THE DEDUCTION U/S.80IB(10) FOR PROFIT DECLARED FROM THI S PROJECT IN A.YS. 2004-05 AND 2005-06. HOWEVER, PROCEEDINGS U/S.263 WERE INITIATED. IN THE ASSESSMENT SUBSEQUENTLY COMPLETE D BY THE ASSESSING OFFICER FOR AFORESAID TWO ASSESSMENT YEAR S U/S.143(3) R.W.S. 263, DEDUCTION ORIGINALLY ALLOWED U/S.80IB(1 0) WAS DISALLOWED. THE ASSESSEE PREFERRED APPEAL BEFORE T HE FIRST APPELLATE AUTHORITY FOR AFORESAID TWO YEARS AGAINST ORDER PAS SED U/S.143(3) R.W.S. 263 OF THE ACT. THE ASSESSEE HAD ALSO SIMUL TANEOUSLY CHALLENGED THE LEGALITY OF THE ORDER PASSED U/S.263 IN ABOVE MENTIONED TWO YEARS BEFORE THE ITAT, PUNE, WHEREIN ITAT DID NOT APPROVE THE ACTION TAKEN BY THE CIT, PUNE, U/S.263 OF THE ACT. IN VIEW OF ABOVE, ASSESSMENT COMPLETED SUBSEQUENTLY U/ S.143(3) R.W.S. 263 BECAME INFRUCTUOUS AND WERE TREATED AS N ON EST. THESE APPEALS OF THE ASSESSEE FOR A.YS. 2004-05 AND 2005- 06 ARISING FROM THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S. 263, WERE DISPOSED OF ACCORDINGLY. HOWEVER, THE APPEAL IN PRESENT YEA R, I.E., A.Y. 2006- 07 IS ARISING FROM THE ORDER PASSED U/S.143(3) DATE D 10.12.2008 WHEREIN DEDUCTION U/S.80IB(10) CLAIMED FOR THE SAME PHASE-I OF PROJECT RUTURANG WAS DISALLOWED IN THE YEAR UNDER C ONSIDERATION. IN APPEAL, THE CIT(A) FOLLOWING THE DECISION IN THE CASE OF BRAHMA ASSOCIATES (2011) 333 ITR 289, OBSERVED THAT PROJEC TS APPROVED BY THE PUNE MUNICIPAL CORPORATION AS RESIDENTIAL CUM COMMERCIAL HAS TO BE TREATED AS COVERED UNDER HOUSING PROJECT TO WHICH THIS DEDUCTION IS ALLOWABLE SUBJECT TO FULFILMENT OF ALL OTHER REMAINING CONDITIONS. AS AFORESAID PROJECT FALLS IN THIS CAT EGORY, THE OBJECTION OF THE ASSESSING OFFICER COULD NOT BE SUSTAINED IN VIEW OF THE DECISION IN THE CASE OF BRAHMA ASSOCIATES (SUPRA). IT IS ALSO ADMITTED FACT THAT COMMERCIAL AREA INCLUDED IN PROJ ECT OF 2,454.64 SQ.MT. CONSTITUTED 14.6% OF THE TOTAL BUILT UP AREA OF THE PROJECT WHICH IS HIGH FOR LAW APPLICABLE FROM A.Y. 2005-06, SUBSEQUENT TO THE AMENDMENT TO THE PROVISION. THE ITAT, PUNE BEN CH, IN THE CASE OF D.S.KULKARNI & ASSOCIATES, OPEN SHELTERS PV T. LTD., TUSHAR 3 DEVELOPERS AND HIRANANDANI ACKRUTI JV, ETC., HAVE H ELD THAT IF PROPERTIES ARE APPROVED AND COMPLETED BEFORE THE DA TE OF AMENDMENT, LAW APPLICABLE BEFORE AMENDMENT BROUGHT BY FINANCE (NO.2) ACT, 2004, WILL BE APPLICABLE AS THE ASSESSE E COULD NOT BE EXPECTED TO FOLLOW A LAW WHICH WAS PASSED SUBSEQUEN T TO THE APPROVAL OF THE PROJECT AND ITS COMPLETION. THERE FORE, THE TRIBUNAL TOOK A VIEW IN ABOVE SAID CASES THAT EVEN IF SALES AND PROFITS ARE DERIVED FROM SUCH PROPERTIES FROM A.Y. 2005-06 ONWA RDS, RESTRICTION IMPOSED IN RESPECT OF THE COMMERCIAL PR OPORTION WILL BE INCLUDED IN HOUSING PROJECT WOULD NOT APPLY. IN CA SE BEFORE US, THE ASSESSING OFFICER HAS ADMITTED THAT PHASE-I OF THE PROJECT COMMENCED ON 16.05.2000 AND WAS COMPLETED ON 11.03. 2003, THEREFORE, AFORESAID LAW HAS TO BE APPLIED IN THIS CASE. THEREFORE, THE CIT(A) RIGHTLY HELD THAT DISALLOWANCE MADE WAS NOT SUSTAINABLE AND THE ASSESSING OFFICER WAS RIGHTLY DIRECTED TO A LLOW THE SAME. THIS REASONED FACTUAL FINDING OF CIT(A) NEEDS NO IN TERFERENCE FROM OUR SIDE. THIS VIEW IS FORTIFIED BY THE DECISION O F HON'BLE GUJARAT HIGH COURT IN MANAN CORPORATION VS. ACIT, 255 CTR ( GUJ) 415, WHEREIN IT WAS HELD THAT CONDITION OF BUILT UP AREA ARE PROSPECTIVE IN NATURE AND NOT APPLICABLE TO PROJECTS APPROVED P RIOR TO 01.04.2005. SINCE WHOLE PROJECT WAS APPROVED AND C OMPLETED PRIOR TO INSERTION OF AMENDED PROVISION OF SECTION 80IB(1 0), SAME WAS ENTITLED TO 100% BENEFIT U/S.80IB(10) OF THE ACT. ACCORDINGLY, ASSESSEES CLAIM WAS ALLOWED UNDER THE PROVISIONS O F SECTION 80IB(10) OF THE ACT. SIMILAR ISSUE AROSE IN A.Y. 2 007-08. FACTS BEING SIMILAR SO FOLLOWING SAME REASONING ORDER OF THE CIT(A) ON ISSUE OF DEDUCTION U/S.80IB(10) IS ALSO UPHELD. 3. AS A RESULT, BOTH THE APPEALS FILED BY THE REVEN UE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 16 TH DAY OF MAY, 2013. SD/- SD/- ( R.K.PANDA ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 16 TH MAY, 2013 4 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ITO, WARD-1(4), PUNE. 3. THE CIT(A)-I, PUNE. 4. THE CIT-I, PUNE. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.