The ITO, Bhopal V. M/s Fortune Associates, Bhopal

ITA 320/IND/2010

• Counselvise Citation: 32022714 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 20-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L L CHOUBEY
• Assessee Lawyers: GIRISH AGRAWAL; SSH ASHISH GOYAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.320/IND/2010 AY: 2006-07 ITO-1(2), BHOPAL ..APPELLANT V/S. M/S. FORTUNE ASSOCIATES, BHOPAL PAN AABFF 3398 P ..RESPONDENT DEPARTMENT BY : SHRI L.L. CHOUBEY, SR. DR ASSESSEE BY : S/SH. ASHISH GOYAL & GIRISH AGR AWAL O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE IS IN APPEAL AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, BHO PAL, DATED 18.3.2010 ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELL ATE AUTHORITY ERRED IN DELETING THE ADDITION OF RS.11,7 9,837/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLO WANCE OF DEDUCTION U/S 80IB(10) OF I.T. ACT, 1961. 2 2. DURING THE HEARING OF THIS APPEAL, WE HAVE HEARD SHRI L.L. CHOUBEY, LD. SR. DR AND SHRI ASHISH GOYAL ALONG WITH SHRI GIRISH AGRAWAL, LD. COUNSEL FOR THE ASSESSEE. THE LD. SR. DR RELIED UPON THE ORDER OF T HE ASSESSING OFFICER WHEREAS LD. COUNSEL FOR ASSESSEE SUBMITTED THAT A REASONED ORDER HAS BEEN PASSED BY THE LD. CIT(A), THEREFORE, NO INTERFERENCE IS REQUIRED BY FURTHER POINTING OUT THAT THE PROJECT OF THE ASSESS EE WAS APPROVED BY THE LOCAL AUTHORITY ON 7.6.2005 AND THE SAME WAS TO BE COMPLETED ON OR BEFORE 31.3.2010. OU R ATTENTION WAS ALSO INVITED TO THE AMENDMENT IN FINA NCE BILL 2010. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. WE FIND THA T THE ONLY GRIEVANCE OF THE REVENUE PERTAINS TO DELETING THE ADDITION OF RS.11,79,837/- MADE BY THE LD. ASSESSIN G OFFICER ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80IB(10) OF THE ACT. THE FACTS, IN BRIEF, ARE THAT THE 3 ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF DEVELOP ING AND CONSTRUCTION OF HOUSING PROJECT. THE ASSESSEE I N ITS RETURN DECLARED NIL INCOME AFTER CLAIMING THE DEDUC TION OF RS.11,79,837/- U/S 80IB(10). HOWEVER, THE LD. ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE ON THE PLEA THAT THE PROJECT WAS APPROVED BY THE MUNIC IPAL CORPORATION ON 7.6.2005 & 24.8.2006 AND FROM THE FA CTS, IT COULD NOT BE ASCERTAINED WHETHER THE PROJECT WAS COMPLETED WITHIN THE SPECIFIED PERIOD BY OBSERVING AS UNDER: THE PROJECT IS STILL IN PROGRESS AS PER COLUMN 18(R) OF THE 10CCB REPORT, AS SUCH THE CONDITION REGARDING COMPLETION OF PROJECT CANNOT BE VERIFIED IN THE A.Y. UNDER QUESTION. AS SUCH NOT ALLOWABLE. ACCORDINGLY, THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) AMOUNTING TO RS.11,79,840/- IS HEREBY REJECTED AND THE AMOUNT IS BROUGHT TO TAX. THE WHOLE GRIEVANCE OF THE LD ASSESSING OFFICER IS THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS OF COMPLE TION OF THE PROJECT. THE LD. CIT(A) BY FOLLOWING INSTRUCTIO N NO.4 OF 4 2009 DATED 30.6.2009, WHICH HAS BEEN REPRODUCED AT PAGE 3 & 4 OF THE IMPUGNED ORDER, DIRECTED THE ASSE SSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. IN VIEW OF THESE FACTS, IN PRINCIPLE, WE ARE IN AGREEMENT WITH THE CONCLUSION DRAWN IN THE IMPUGNED ORDER, HOWEVER, MODIFY THE SAME ONLY TO THE EXTENT THAT THE ASSESSI NG OFFICER IS AT LIBERTY TO VERIFY THE CLAIM OF THE AS SESSEE WHETHER THE PROJECT WAS COMPLETED BY THE ASSESSEE WITHIN THE PRESCRIBED TIME. THE ASSESSING OFFICER M AY FURTHER VERIFY THE COMPLETION CERTIFICATE, IF ANY, ISSUED BY THE MUNICIPAL AUTHORITIES BECAUSE EVEN OTHERWISE, A S PER SUB-SECTION (B) OF THE CLARIFICATION, IT HAS BEEN C LARIFIED THAT IN CASE, IT IS LATER ON FOUND THAT THE CONDITI ON OF COMPLETING THE PROJECT, WITHIN THE SPECIFIED PERIOD , AS STATED IN SEC. 80IB(10), HAS NOT BEEN SATISFIED, TH E DEDUCTION GRANTED TO THE ASSESSEE SHOULD BE WITHDRA WN. SINCE THE COMPLETION CERTIFICATE WAS NOT AVAILABLE WITH THE ASSESSING OFFICER, THEREFORE, THE LD. ASSESSING OFFICER WILL BE WITHIN HIS RIGHTS TO VERIFY THE VERACITY OF 5 COMPLETION OF PROJECT IN THE LIGHT OF COMPLETION CE RTIFICATE, IF ANY, ISSUED BY THE MUNICIPAL AUTHORITIES. FINALLY, THIS APPEAL OF THE REVENUE IS PARTLY ALLO WED IN TERMS AND CONDITIONS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT THE CONCLUS ION OF THE HEARING ON 26 TH JULY, 2011. (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH JULY, 2011 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD F ILE !VYS!