SHREE DATTA DEVELOPERS, MUMBAI V. DCIT 17(3), MUMBAI

ITA 3314/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1852 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 25-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 11-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 80IB

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 3314 /MUM/2012 I.T.A. NO. 3314/MUM/2012 (ASSESSMENT YEAR: 2007-08) M/S. SHREE DATTA DEVELOPERS, 62/A PRADHAN LODGE, PARLE VILLAGE, MUMBAI 400 012. V. D.C.I.T. 17(3),MUMBAI IT OFFICES, (6 TH FLOOR), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012. PAN/GIR NO. AAMFS8023P ( APPELLA NT ) : ( RESPONDENT ) APPELLANT BY : SHRI M. SUBRAMANIAN RESPONDENT BY : SHRI RAKESH RANJAN DATE OF HEARING : 03.12.2015 DATE OF PRONOUNCEMENT : 16.12.2015 O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDERS BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-19, MU MBAI (CIT(A) FOR SHORT) DATED 13.01.2012 , THE ASSESSEES APPEAL CONTESTIN G ITS ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR TH E ASSESSMENT YEAR (A.Y.) 2007-08. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN MEMO OF APPEAL FILED WITH THE TRIBUNAL ARE AS UNDER: 2 I.T.A. NO. 3314/MUM/2012 (ASSESSMENT YEAR: 2007-08) 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED C.I.T.(A) ERRED IN DISMISSING THE APPEAL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE LEARNED C.I.T.(A) ERRED IN DISMISSING THE APPEAL AND THAT TOO WITHOUT GIVING FULL AND PROPER OPPORTUNITY OF BEING HEARD IN THE MATTER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE LEARNED C.I.T.(A) ERRED IN DISMISSING THE APPEAL AND THAT TOO WITHOUT APPRECIATING FULLY AND PROPERLY THE FACTS OF THE CASE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED C.I.T.(A) ERRED IN CONFIRMING THE ACTION OF THE A. O. IN DENYING THE BENEFITS OF THE PROVISION OF SECTION 80IB (10) OF THE I.T. ACT . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS DOING THE BUSINESS AS BUILDERS AND DEVELOPERS AND IS CONSTRUCTING BUILDING UNDER REDEVELOPMENT SCHEME OF SRA PROJECT NAMED SHREE DATTA ENCLAVE AT PAREL VILLAGE FOR THE LAST SIX YEARS . THE PROJECT IS STILL INCOMPLETE AND THE ASSESSEE IS OBSERVING P ROJECT COMPLETION METHOD. 4. DURING THE ASSESSMENT YEAR, ASSESSEE HAS RECEIVE D RS.3,60,68,121/- AS BOOKING ADVANCES AND WIP OF THE ASSESSEE IS RS.3,41,95,102/ - AND THE ASSESSEE HAS EARNED THE NET PROFIT OF RS.18,73,019/- WHICH IS TRANSFERRED T O PARTNERS CAPITAL ACCOUNT. THE ASSESSEE PROJECT OF RECONSTRUCTION OF EXISTING BUIL DING IS IN A SLUM AREA AS DECLARED BY THE BMC AND GOVERNMENT OF MAHARASHTRA HOWEVER, THE SCHEME IS NOT NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) AND AS PER THE ASSESSING OFFICER (HEREINAFTER CALLED THE AO) NO DEDUCTION CAN BE ALLOWED TO TH E ASSESSEE UNDER CLAUSE (B) OF SECTION 80-IB(10) UNLESS SUCH A SCHEME OF REDEVELOP MENT IS NOTIFIED BY THE CBDT WHICH THE ASSESSEE ALSO EXPRESSLY AGREED BEFORE THE AO THAT NO NOTIFICATION HAS BEEN ISSUED IN RESPECT OF THE ASSESSEES SCHEME BY THE CBDT AND THEREFORE, THE ASSESSEE IS 3 I.T.A. NO. 3314/MUM/2012 (ASSESSMENT YEAR: 2007-08) NOT ELIGIBLE FOR DEDUCTION U/S. 80-IB(10) AS CLAIME D BY THE ASSESSEE. THUS , THE AO DISALLOWED THE CLAIM OF DEDUCTION BY THE ASSESSEE U /S. 80-IB(10) OF THE ACT. 5. AGGRIEVED BY THE ASSESSMENT ORDERS PASSED BY TH E AO U/S 143(3) OF THE ACT, THE ASSESSEE FILED FIRST APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSEE IS IN THE BUSINESS OF RECO NSTRUCTION OF HOUSING PROJECTS APPROVED BY CENTRAL OR STATE GOVERNMENT AND FOR A R ECONSTRUCTION SCHEME, APPROVAL BY THE CENTRAL OR STATE GOVERNMENT IS SUFFICIENT AN D FOR WHICH CBDT APPROVAL / NOTIFICATION IS NOT REQUIRED . THE ASSESSEE SUBMITT ED THAT THE CBDT APPROVAL IS REQUIRED FOR REDEVELOPMENT OF EXISTING BUILDINGS IN THE SLUM AREA AS PER SECTION 80IB(10) OF THE ACT AND NOT FOR RECONSTRUCTION BUSI NESS. THE CIT(A) REJECTED THE CONTENTIONS OF THE ASSESSEE BY OBSERVING THAT THER E IS NO NOTIFICATION ISSUED BY CBDT FOR THE PROJECT UNDERTAKEN BY THE ASSESSEE U/S 80-I B(10) OF THE ACT AND THE ENTIRE PROVISION HAS TO BE READ TOGETHER AND RECONSTRUCTIO N AND REDEVELOPMENT CANNOT BE SPLIT AS INDEPENDENT PHRASES AND DISALLOWANCE BY TH E AO WAS HELD JUSTIFIED AND CONFIRMED. . 6. AGGRIEVED BY THE ORDERS OF THE CIT(A) , THE ASS ESSEE FILED SECOND APPEAL WITH THE TRIBUNAL . 7. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE IS DOING THE PROJECT OF RECONSTRUCTION OF EXISTING BUILDING IN A SLUM AREA AS DECLARED BY BMC AND GOVERNMENT OF MAHARASHTRA AND THE FIRST YEAR WHEN THE DEDUCTION U/S 80IB(10) OF THE ACT WAS CLAIMED BY THE ASSESSEE WAS THE ASSESSMENT YEAR 2005-06. THE LD. COUNSEL OF THE ASSESSEE MADE STATEMENT BEFORE US THAT THE C BDT NOTIFICATION WITH RESPECT TO THIS PROJECT SHREE DATTA ENCLAVE AT PAREL VILLAGE AS REQUIRED UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT HAS BEEN ISSUED BY THE CBDT. THE ASSESSEE SUBMITTED 4 I.T.A. NO. 3314/MUM/2012 (ASSESSMENT YEAR: 2007-08) THAT THE SECOND APPEAL BEFORE THE MUMBAI TRIBUNAL F OR THE SAID ASSESSMENT YEAR 2005- 06 WHICH WAS THE FIRST ASSESSMENT YEAR OF CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT, WAS DECIDED BY THE MUMBAI TRIBUNAL IN ITA NO. 1863/ MUM/2010, WHEREBY THE MUMBAI TRIBUNAL HAS SET ASIDE THE MATTER TO THE FIL E OF AO FOR DE-NOVO DETERMINATION AND ADJUDICATION OF THE CLAIM OF THE ASSESSEE U/S 8 0IB(10) OF THE ACT , AS THE NOTIFICATION BY THE CBDT HAS BEEN ISSUED ONLY AFTE R THE ORDERS WERE PASSED BY THE CIT(A) FOR THE ASSESSMENT YEAR 2005-06. THE RELEVA NT EXTRACTS FROM THE ORDERS OF THE TRIBUNAL IN ITA NO. 1863/MUM/2010 FOR ASSESSMENT YE AR 2005-06 ARE REPRODUCED BELOW:- 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED COUNSEL F OR THE ASSESSEE HAS SUBMITTED THAT THE NOTIFICATION HAS BEEN ISSUED BY THE CBDT ONLY AFTER THE IMPUGNED ORDER WAS PASSED BY THE LEARNED CIT(APPEA LS) AND THE ASSESSEE, THEREFORE, COULD NOT PRODUCE THE SAME EI THER BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR EVEN BEFOR E THE LEARNED CIT(APPEALS) DURING THE COURSE OF APPELLATE PROCEE DINGS. HE HAS URGED THAT THIS MATTER MAY, THEREFORE, BE RESTORED TO THE FIL E OF THE ASSESSING OFFICER FOR GIVING THE ASSESSEE AN OPPORTUNITY TO PRODUCE THE REQUIRED APPROVAL OF THE CBDT TO THE PROJECT UNDERTAKEN BY THE ASSESSEE. WE FIND MERIT IN THIS ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE A ND KEEPING IN VIEW THE INTEREST OF JUSTICE, WE SET ASIDE THE IMPUGNED ORD ER OF THE LEARNED CIT(APPEALS) ON THE ISSUE UNDER CONSIDERATION AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH AFTER AFFORDING THE ASSESSEE ONE MORE OPPORTUNITY TO SUPPORT AND SUBSTANTIATE ITS C LAIM FOR DEDUCTION U/S. 80-IB(10). SINCE THE ASSESSMENT YEAR UNDER APPEAL IS 2007-08 , WHILE THE FIRST ASSESSMENT YEAR IN WHICH THE ASSESSEE CLAIMED DEDUCTION U/S 80 IB(10) OF THE ACT WAS ASSESSMENT YEAR 2005-06 FOR WHICH THE MATTER HAS ALREADY BEEN SET ASIDE BY THE TRIBUNAL IN ITA NO. 1863/MUM/2010 TO THE FILE OF ASSESSING OFFICER FOR DE-NOVO DETERMINATION AND ADJUDICATION OF CLAIM OF THE ASSSESSEE FOR DEDUCTIO N U/S 80IB(10) OF THE ACT AS 5 I.T.A. NO. 3314/MUM/2012 (ASSESSMENT YEAR: 2007-08) DISCUSSED ABOVE , WE RESPECTFULLY FOLLOWING THE O RDERS OF THE CO-ORDINATE BENCHES OF THE MUMBAI TRIBUNAL IN ITA NO. 1863/MUM/2010 ALSO RESTORE THIS ISSUE IN THE PRESENT APPEAL FOR ASSESSMENT YEAR 2007-08 TO THE F ILE OF ASSESSING OFFICER FOR ADJUDICATION AND DETERMINATION OF THE CLAIM OF THE ASSESSEE U/S 80IB(10) IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT PROPER AN D ADEQUATE OPPORTUNITY WILL BE GIVEN BY THE AO TO THE ASSESSEE IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE AND IN ACCORDANCE WITH LAW AND THE ASSSESSEE WILL BE ALLOWED TO PRODUCE NECESSARY EVIDENCE IN SUPPORT OF ITS CONTENTIONS AND CLAIM U/ S 80IB(10) OF THE ACT IN HIS DEFENSE. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 16 TH , 2015 SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 16.12.2015 PS:- POOJA K. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE 6 I.T.A. NO. 3314/MUM/2012 (ASSESSMENT YEAR: 2007-08) BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI