The ITO, Ward-1(3), RAJKOT-GUJARAT V. M/s. Ketan Builders, RAJKOT-GUJARAT

ITA 306/RJT/2012

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0108 (ITAT-RAJKOT)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 10-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: M J RANPURA C A
• Section: 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA, JM AND SHRI A. K.GARODIA, AM ITA NOS.306 TO 308/RJT/2012. / ASSESSMENT YEARS 2004-05 TO 2006-07 INCOME-TAX OFFICER, WARD 1 (3), RAJKOT. ( / APPELLANT) VS. M/S. KETAN BUILDERS, OSCAR TOWER, OPP: CHANDRA PARK, 150 RING ROAD, RAJKOT. PAN : AAEFK0376K / RESPONDENT / REVENUE BY SHRI AVINASH KUMAR, D. R. ' / ASSESSEE BY SHRI M.J.RANPURA, C. A. & / DATE OF HEARING 30.7.2012 & / DATE OF PRONOUNCEMENT 03-8.2012 / / / / ORDER PER T. K. SHARMA, JM THESE THREE APPEALS BY THE REVENUE ARE AGAINST THE T HREE SEPARATE ORDERS DATED 29.2.2012 OF COMMISSIONER OF INCO ME-TAX(A)-I, RAJKOT. SINCE THE FACTS ARE IDENTICAL AND ISSUES INVOLVE TH EREIN ARE COMMON, THESE APPEALS WERE HEARD TOGETHER AND ARE BEIN G DISPOSED OF BY THIS CONSOLIDATED ORDER. 2. IN ALL THESE THREE APPEALS THE GROUNDS TAKEN BY THE REVENUE ARE IDENTICAL, THEREFORE, FOR THE SAKE OF CONVENIENCE, WE REPRODUCE THE GROUNDS OF APPEAL TAKEN BY THE REVENUE IN APPEAL NO. 306/RAJ/2012: 1. THE LD. CIT (A)-I, RAJKOT HAS ERRED IN LAW AND ON FACT OF THE CASE IN QUASHING THE REOPENING PROCEEDINGS U/S 147 OF THE I.T. ACT AND IN ALSO DELETING THE DISALLOWANCE OF D EDUCTION U/S ITA NO.126/RJT/2012. 2 80LB OF RS. 5,02,080/- BY RELYING UPON THE DECISION OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF MIS RAMKRISHNA STHAPATYA VTS ITO IN SPECIAL CIVIL APPLICATION NO.17056/57/59 OF 2011 FOR WHICH THE DEPARTMENT HAS ACCEPTED THE DECISION AND NO SLP FILED. 2. THE LD. CIT (A)- I, RAJKOT HAS ERRED IN LAW AND ON FACT OF THE CASE BY HOLDING THAT THE LAND IS BROUGHT INTO P ARTNERSHIP AS A CAPITAL BY THE PARTNERS AND THE BUILDING PLAN HAS BEEN APPROVED BY DUE DATE AND THUS THE HOUSING' PROJECT IS APPROVED IN THE NAME OF PARTNERS FOR AND ON BEHALF OF THE F IRM. 3. ON THE FACTS OF THE CASE, LD. CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER AS THE RELIED UPON CASE THE LOCAL MUNICIPAL AUTHORITY HAD APPROVED THE PROJECT IN THE NAME OF ONE OF ITS PARTNER I.E. SH. SURESHBHAI M. MAKADIA AND OTHERS WHEREAS, IN THIS INSTANT CASE, THE LOCAL MUNICIPAL AUTHORITY APPROVED THE PROPOSAL OF DEVELOPMENT OF H OUSING PROJECT IN THE NAME OF TWO OF THE PARTNERS OF FIRM I.E. (I) PANKAJBHAI RANCHHODBHAI PATEL (II) MAGANBHAI BOVANB HAI VARASADA BUT IN THE ASSESSEE FIRM THERE AREFIVE PAR TNERS (I) PANKAJBHAI RANCHHODBHAI PATEL (II) MAGANBHAI BOVANB HAI VARASADA (ILL) SH. VIPULKUMAR BABUBHAI PATEL (IV) SH. SAMLR RASIKBHAI PATEL AND (V) ,SH. JITENDRA LALJIBHAI PATEL; 4. IT IS, THEREFORE', PRAYED THAT THE ORDER OF THE LD. CIT (A) M,AY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. AT THE OUTSET, THE LD.AR APPEARING ON BEHALF O F THE ASSESSEE POINTED OUT THAT IN THE IMPUGNED ORDER, THE LD.CI T(A) FOLLOWING HIS OWN DECISION IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT ORDER 2007-08 VIDE ORDER NO.CIT(A)-I/RJT/315/09-10 DATED 25.5.20 10 ON IDENTICAL FACTS DIRECTED THE AO TO ALLOW THE DEDUCTION U/S 80IB(10) OF THE INCOME TAX ACT, 1961. HE FURTHER SUBMITTED THAT THE APPEAL OF THE REVENUE FILED BEFORE THE TRIBUNAL AGAINST THE ORDER OF THE CIT( A) DATED 25.5.2010 BEARING ITA NO. 1095/RJT/2010 (AY-2007-08) HAS BEE N DISMISSED BY THE TRIBUNAL VIDE ORDER DATED 20.7.2012. THEREFORE, F OLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT Y EAR 2007-08, THE VIEW TAKEN BY THE CIT(A) IN THE IMPUGNED ORDER FOR ALL THE THREE ASSESSMENT YEARS IS UPHELD. ITA NO.126/RJT/2012. 3 4. SHRI AVINASH KUMAR, LD. D. R. APPEARED FOR THE REVENUE COULD NOT CONTROVERT THE AFORESZAID SUBMISSIONS OF THE LD.AR OF THE ASSESSEE . 5. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE TH ROUGH THE ORDERS OF AUTHORITIES BELOW AS WELL AS THE DECISION OF TH E TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 SUPRA), I N WHICH ONE OF US (JUDICIAL MEMBER) IS A PARTY. IT IS PERTINENT TO NOTE THAT IN THE ASSESSMENT YEAR 2007-08, THE AO DENIED THE DEDUCTION U /S 80IB(10) ON THE GROUND THAT THE BUILDING PLAN HAS NOT BEEN APPR OVED IN THE NAME OF THE PARTNERSHIP FIRM BUT IS APPROVED IN THE NAME OF THE PARTNERS. IN THAT ASSESSMENT YEAR, THE CIT(A) DIRECTED THE AO TO ALLOW DE DUCTION U/S 80IB(10) OF THE ACT. THE APPEAL OF THE REVENUE IS DI SMISSED BY THE TRIBUNAL IN ITA NO.1095/RJT/2010 (AY- 2007-08) ORD ER DATED 20.7.2012. THE RELEVANT PORTION OF THE ORDER IN PARAGRAPH 4 I S REPRODUCED BELOW : 4. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE TH ROUGH THE ORDER OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE T HAT IN THE IMPUGNED ORDER, THE LD. CIT(A) HAS FOLLOWED THE DECISI ON OF ITAT, AHMEDABAD BENCH IN THE CASE OF RADHE DEVELOPERS WHEREI N IT IS HELD THAT DEDUCTION U/S.80IB(10) IN RESPECT OF PROJECT UNDERTAKEN BY THE FIRM CANNOT BE DENIED MERELY BECAUSE THE APPROVAL BY THE LOCAL AUTHORITY AND PERMISSION TO DEVELOP THE PROJECT AND CO MMENCE CONSTRUCTION WERE NOT IN THE NAME OF THE ASSESSEE. THE AP PEAL OF THE REVENUE AGAINST THIS ORDER HAS BEEN DISMISSED BY THE HONBLE GUJARAT HIGH COURT AS REPORTED IN 341 ITR 403 (GUJ.) . THE VIEW TAKEN BY LD. CIT(A) IN THE IMPUGNED ORDER IS IN CONFOR MITY WITH THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF RADHE DEVELOPERS (SUPRA). WE THEREFORE, INCLINED TO UPHELD T HE ORDER OF LD. CIT(A) DIRECTING THE AO TO ALLOW THE DEDUCTION U/S.80I B(10) OF THE INCOME-TAX ACT, 1961. 6. IN THE IMPUGNED ORDER, THE CIT(A) HAS FOLLOWED T HE ORDER FOR THE ASSESSMENT YEAR 2007-08. THE APPEAL OF THE REVENUE FO R THE ASSESSMENT YEAR 2007-08 DISMISSED BY THE TRIBUNAL VIDE O RDER DATED 20.7.2012. WE, THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 (SUPRA) U PHELD THE ITA NO.126/RJT/2012. 4 ACTION OF THE CIT(A) IN DIRECTING THE AO TO ALLOW TH E DEDUCTION U/S 80IB(10) FOR THE ASSESSMENT YEAR UNDER APPEAL. 7. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED HEREINABOVE. SD/- SD/- ( A. K.GARODIA) ( T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER +/ ORDER DATE 03- 08-2012. /RAJKOT SRL - - - - .- .- .- .- / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT-, 2. / RESPONDENT- 3. 4 / CONCERNED CIT. 4. 4- / CIT (A). 5. - , , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , SENIOR PRIVATE SECRETARY , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.