Income Tax Officer, Ward-16(2), Hyderabad V. M/s Peeti Real Estate Pvt Ltd., Hyderabad

ITA 315/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82442 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Keywords: Additional evidence
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 314 & 315/HYD/2014 ASSESSMENT YEARS : 2006-07 & 2009-10 INCOME-TAX OFFICER, WARD 16(2), HYDERABAD. M/S PEETI REAL ESTATE PVT. LTD., HYDERABAD PAN AACCP 3605M (APPELLANT) (RESPONDENT) REVENUE BY SHRI B. RAMAKRISHNA ASSESSEE BY NONE DATE OF HEARING 14-10-2014 DATE OF PRONOUNCEMENT 22-10-2014 O R D E R PER SAKTIJIT DEY, J.M.: THESE APPEALS BY THE DEPARTMENT ARE DIRECTED AGAI NST SEPARATE ORDERS PASSED BY CIT(A)-V, HYDERABAD DATED 31/10/2 013 PERTAINING TO THE ASSESSMENT YEARS 2006-07 AND 2009-10. 2. AT THE OUTSET, IT NEEDS TO BE MENTIONED THAT AS PER THE ORDER SHEET ENTRY WHEN THESE APPEALS WERE FIXED FOR HEARI NG ON 09/06/14 ASSESSEES COUNSEL REQUESTED FOR ADJOURNMENT AND ON HIS REQUEST, THESE APPEALS WERE POSTED FOR HEARING ON 14/10/2014 AND BOTH THE PARTIES WERE INFORMED ABOUT THE DATE OF HEARING IN THE OPEN COURT. HOWEVER, WHEN THE APPEALS WERE CALLED FOR HEARING ON 14/10/14, NEITHER ANY ONE REPRESENTED ASSESSEE NOR THERE IS A PETITION SEEKING ADJOURNMENT. IN THAT VIEW OF THE MATTER, WE PROCEED TO DISPOSE OF 2 ITA NOS.314 & 315 /HYD/2014 M/S PEETI REAL ESTATE PVT. LTD. THESE APPEALS EX-PARTE QUA ASSESSEE-RESPONDENT AFTE R HEARING THE LEARNED DR. ITA NO. 314/HYD/2014 FOR AY 2006-07 3. THE EFFECTIVE GROUNDS RAISED BY THE DEPARTMENT A RE AS UNDER: 1. THE CIT(A)-V, HYDERABAD ERRED IN NOT DISCUSSING GROUNDS OF APPEAL FILED BY THE ASSESSEE. THEREFORE, THE ORDER OF THE CIT(A)- V, HYDERABAD IS NOT MAINTAINABLE BOTH IN FACTS AND LAW. 2. THE CIT(A)-V IS NOT JUSTIFIED BOTH ON FACTS AND LAW. THE CIT(A)-V, HYDERABAD RELIED ON CONSEQUENTIAL ORDER P ASSED BY THE AO AND ALLOWED RELIEF IGNORING THE GROUNDS OF APPEA L OF THE ASSESSEE. 3. BRIEFLY THE FACTS ARE, ASSESSEE A COMPANY IS ENG AGED IN THE BUSINESS OF DEVELOPING AND BUILDING HOUSING PROJECT S. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED ITS R ETURN OF INCOME ON 11/11/2006 DECLARING TOTAL INCOME AT NIL AFTER CL AIMING DEDUCTION OF RS. 14,60,372 U/S 80IB(10) OF IT ACT. ASSESSMENT IN CASE OF ASSESSEE WAS COMPLETED U/S 143(3) OF THE ACT BY ACCEPTING TH E INCOME DECLARED. HOWEVER, SUBSEQUENTLY, CIT IN EXERCISE OF POWER U/S 263 OF THE ACT REVISED THE ASSESSMENT ORDER AND DIRECTED AO TO WITHDRAW THE BENEFIT GRANTED U/S 80IB(10). IN PURSUANCE TO T HE DIRECTION OF CIT, AO COMPLETED THE ASSESSMENT U/S 143(3) READ WITH SE CTION 263 OF THE AT VIDE ORDER DATED 28/09/11 BY WITHDRAWING THE DED UCTION CLAIMED OF RS. 14,16,372 U/S 80IB(10) OF THE ACT. IT WAS OBSER VED BY AO IN THE IMPUGNED ASSESSMENT ORDER THAT ASSESSEE COULD NOT F URNISH ANY EVIDENCE TO SHOW THAT THE PLOT OF LAND ON WHICH HOU SING PROJECT WAS DEVELOPED AT VISAKHAPATNAM AGAINST WHICH DEDUCTION U/S 80IB(10) WAS CLAIMED IS MORE THAN ONE ACRE. BEING AGGRIEVED OF THE ASSESSMENT ORDER, SO PASSED, ASSESSEE PREFERRED APP EAL BEFORE THE CIT(A). 4. DURING THE PENDENCY OF THE APPEAL BEFORE THE CIT (A), ASSESSEES APPEAL AGAINST THE ORDER PASSED U/S 263 CAME UP FOR HEARING BEFORE 3 ITA NOS.314 & 315 /HYD/2014 M/S PEETI REAL ESTATE PVT. LTD. THE TRIBUNAL. THE TRIBUNAL IN ITS ORDER DATED 22/02 /2013 IN ITA NO. 844/HYD/2011, THOUGH, UPHELD THE EXERCISE OF JURISD ICTION U/S 263 OF THE ACT, BUT, AT THE SAME TIME HELD THAT CIT WAS NO T JUSTIFIED IN WITHDRAWING THE DEDUCTION U/S 80IB(10) OF THE ACT, HIMSELF. THE TRIBUNAL DIRECTED THE AO TO CONDUCT IN DEPTH ENQUIR Y AND DECIDE THE ISSUE OF CLAIM OF DEDUCTION U/S 80IB(10). IN COURS E OF HEARING OF APPEAL BEFORE THE CIT(A), ASSESSEE BROUGHT IT TO TH E NOTICE OF CIT(A) THAT IN PURSUANCE TO THE DIRECTION OF TRIBUNAL, AO IN THE MEANWHILE HAS PASSED A CONSEQUENTIAL ORDER ON 29/05/2013 ACC EPTING ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) OF THE A CT. THEREFORE, CONSIDERING THE FACT THAT THE AO HIMSELF HAS GRANTE D RELIEF TO ASSESSEE IN RESPECT OF ITS CLAIM U/S 80IB(10). CIT( A) DISPOSED OFF ASSESSEES APPEAL BY OBSERVING AS UNDER: 5. MEANWHILE, THE AO AFTER RECEIPT OF THE ORDER OF THE TRIBUNAL REFERRED TO ABOVE, HAD PASSED A CONSEQUENT IAL ORDER DATED 29/05/13 GIVING RELIEF IN RESPECT OF DEDUCTIO N U/S 80IB(10) AMOUNTING TO RS. 14,16,372 AND ASSESSED THE INCOME AT RS. 16,103 AS ASSESSED IN THE ORIGINAL ASSESSMENT ORDER U/S 143(3) DATED 12-122008. 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE AO U/S 143(3) RWS 263 AND THE ORDER OF THE TRIBUNAL CITED SUPRA. SINCE THE AO HAS GIVEN RELIEF IN RESPE CT OF DEDUCTION U/S 80IB(10) OF THE ACT AMOUNTING TO RS. 14,16,372 VIDE HIS CONSEQUENTIAL ORDER DATED 29/05/13, THE REASON FOR WHICH THE APPELLANT HAS FILED THIS APPEAL WAS ALREADY FULFILL ED. 7. IN THE RESULT, THE APPEAL IS ALLOWED. 5. WE HAVE HEARD THE LEARNED DR AND PERUSED THE ORD ERS OF THE REVENUE AUTHORITIES ON THE ISSUE. AS CAN BE SEEN, IN PURSUANCE TO THE DIRECTION OF THE TRIBUNAL, AO IN CONSEQUENTIAL ORDER DATED 29/05/13 HAS ACCEPTED ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) AMOUNTING TO RS. 14,16,372/-. IN VIEW OF THE AFORES AID FACTUAL POSITION, WE FAIL TO UNDERSTAND THE GRIEVANCE OF TH E DEPARTMENT IN THE PRESENT APPEAL. WHEN AO HIMSELF HAS ACCEPTED ASSESS EES CLAIM OF DEDUCTION U/S 80IB(10), NOTHING, REMAINS TO BE DECI DED BY CIT(A). IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF 4 ITA NOS.314 & 315 /HYD/2014 M/S PEETI REAL ESTATE PVT. LTD. CIT(A) IN ALLOWING ASSESSEES APPEAL. ACCORDINGLY, GROUNDS RAISED BY REVENUE ARE DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO. 315/HYD/14 FOR AY 2009-10. 7. THE EFFECTIVE GROUNDS RAISED BY THE DEPARTMENT A RE AS UNDER: THE CIT(A)-V HAS NOT FOLLOWED THE PROVISIONS OF SEC TION 251(1)(A) OF IT ACT. THE CIT(A)-V HAS GIVEN FINDINGS DIFFERENTLY ON SIMI LAR ISSUE FOR TWO AYS WHICH IS NOT ACCEPTABLE I.E. AY 2006-07 AND 2009-10. 8. BRIEFLY THE FACTS ARE, IN THE ASSESSMENT YEAR UN DER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 05/09/2009 DECLARING TOTAL INCOME OF RS. 25,555 AFTER CLAIMING DEDUCTION U/S 8 0IB(10) AMOUNTING TO RS. 43,86,808 ON THE HOUSING PROJECT DEVELOPED A T VISAKHAPATNAM. AO OBSERVING THAT IN THE ASSESSMENT YEAR 2006-07 SI MILAR DEDUCTION CLAIMED BY ASSESSEE U/S 80IB(10) WAS WITHDRAWN IN P URSUANCE TO THE DIRECTION OF CIT U/S 263 OF THE ACT, DISALLOWED THE DEDUCTION CLAIMED U/S 80IB(10) FOR THE IMPUGNED ASSESSMENT YEAR ALSO. BEING AGGRIEVED OF THE DISALLOWANCE MADE BY AO, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 9. IN COURSE OF HEARING OF APPEAL BEFORE THE CIT(A) ON THE SUBMISSIONS MADE BY ASSESSEE, CIT CALLED FOR A REMA ND REPORT FROM AO. IN THE REMAND REPORT, AO STATED THAT ASSESSEE H AD NOT FILED ANY ADDITIONAL EVIDENCE TO ESTABLISH THAT THE AREA ON W HICH HOUSING PROJECT WAS DEVELOPED IS MORE THAN ONE ACRE. HE FUR THER STATED THAT THE CIT AFTER EXAMINING THE DOCUMENTARY EVIDENCE AN D PERMISSION OF THE MUNICIPAL AUTHORITY FILED BY ASSESSEE IN COURSE OF PROCEEDING U/S 263 FOR AY 2006-07, HAS CONCLUDED THAT ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 80IB(10) AND DIRECTED AO TO WITHDRAW THE SAME. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE AND R EMAND REPORT OF 5 ITA NOS.314 & 315 /HYD/2014 M/S PEETI REAL ESTATE PVT. LTD. AO AS WELL AS DOCUMENTARY EVIDENCE FILED BEFORE HIM BY ASSESSEE, SUCH AS, SANCTION LETTER OF VISAKHAPATNAM MUNICIPAL CORPORATION DATED 04/04/08 INDICATING THE AREA TO BE MORE THAN ONE ACRE, SANCTIONED PLAN AND DEVELOPMENT AGREEMENT DISPOSED OF THE APPEAL WITH FOLLOWING DIRECTIONS: 6.1 AFTER CAREFULLY CONSIDERING THE ABOVE, THE AO I S DIRECTED TO FOLLOW THE TRIBUNALS DIRECTIONS GIVEN ABOVE AND CONDUCT A DETAILED ENQUIRY TO ASCERTAIN THE CORRECTNESS OF TH E DISCREPANCIES NOTICED BY THE CIT-IV IN HIS ORDER U/ S 263, ABOUT THE EXTENT OF LAND FROM THE MUNICIPAL AUTHORITIES O F VISAKHAPATNAM AND OTHER AUTHORITIES AS REQUIRED, AN D IF FOUND CORRECT, ALLOW THE DEDUCTION U/S 80IB(10), ACCORDIN GLY. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED. 10. BEING AGGRIEVED OF THE AFORESAID ORDER OF CIT(A ), THE DEPARTMENT IS IN APPEAL BEFORE US. 11. WE HAVE HEARD THE LEARNED DR AND PERUSED THE OR DERS OF THE REVENUE AUTHORITIES AS WELL AS MATERIALS ON RECORD. AFTER GOING THROUGH THE ORDER OF THE FIRST APPELLATE AUTHORITY AS WELL AS OTHER MATERIALS ON RECORD, WE DO NOT FIND ANY INFIRMITY I N THE SAID ORDER OF THE CIT(A). WE FAIL TO UNDERSTAND THE GRIEVANCE OF THE DEPARTMENT AS CIT(A) HAS DIRECTED THE AO TO FOLLOW THE DIRECTIONS OF THE TRIBUNAL AND DECIDE THE ASSESSEES CLAIM U/S 80IB(10) OF THE ACT . MORE SO, WHEN THE FACTS OBTAINING IN DEPARTMENTS APPEAL FOR AY 2 006-07, DEALT WITH BY US HEREINABOVE, SHOW THAT THE AO HIMSELF HAS ACC EPTED ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) IN RESPE CT OF THE SAME HOUSING PROJECT IN THE CONSEQUENTIAL ORDER PASSED I N PURSUANCE TO THE DIRECTION OF THE TRIBUNAL. IN OUR VIEW APPEAL FILED BY THE DEPARTMENT IS THOROUGHLY MISCONCEIVED. ACCORDINGLY, WE DISMISS TH E GROUNDS AS WELL AS APPEAL BY DEPARTMENT. 6 ITA NOS.314 & 315 /HYD/2014 M/S PEETI REAL ESTATE PVT. LTD. 13. TO SUM UP BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22 ND OCTOBER14. SD/- SD/- (P.M. JAGTAP) (S AKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 22 ND OCTOBER, 2014 KV COPY TO:- 1) ITO, WARD 16(2), ROOM NO. 615, 6 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 500 004 2) M/S PEETI REAL ESTATE PVT. LTD., 4-1-969/7, SUR ABHI SHRADAH BLOCK, AHUJA ESTATES, ABIDS, HYDERABAD. 3) CIT(A)-V, HYDERABAD 4) CIT-IV, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.