ITO 16(2)(4), MUMBAI V. PRESTIGE BUILDERS, MUMBAI

ITA 3355/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3825 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 09-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R KIRTNEY
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA , ACCOUNTANT MEMBER ITA NO. 3355/MUM/2014 : (A.Y : 20 1 0 - 11 ) ITO - 16(2)(4) (APPELLANT) VS M /S . PRESTIGE BUILDERS 1 ST FLOOR, 297, OLD TARDEO ROAD, NANA CHOWK, MUMBAI 400 007. PAN : AAKFM1063B (RESPONDENT) APPELLANT BY : SHRI S.R. KIRTNEY (DR) RESPONDENT BY : NONE DATE OF HEARING : 10/02/2016 DAT E OF PRONOUNCEMENT : 24 / 02 /2016 O R D E R PER ASHWANI TANEJA , A M : THIS APPEAL IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 27, MUMBAI (IN SHORT REFERRED TO AS CIT(A)) AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER (IN SHO RT REFERRED TO AS THE AO) U/S 143(3) DT. 22.3.2013 FOR A.Y 2010 - 11, FILED BY THE R EVENUE ON THE FOLLOWING GROUNDS : - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM U/S 80IB(10) DESPITE THE FACT THAT CONSTRUCTION OF THE PROJECT BY BUILDER ASSESSEE HAS NOT BEEN COMPLETED WITHIN STIPULATED PERIOD AS PRESCRIBED UNDER LAW ? 2. DURING THE COURSE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. SHRI S.R. KIRTNEY, LEARNED DEPARTMENTAL REPRESENTATIVE (IN 2 M/S. PRESTIGE BUILDERS ITA NO. 3355/MUM/2014 SHORT REFERRED TO AS DR) ARGUED THE MATTER ON BEHALF OF THE REVENUE. IT IS NOTED THAT ON EARLIER DATE ALSO, NONE APPEARED ON BEHALF OF THE ASSESSEE. IT IS NOTED BY US THAT THE SOLITARY ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS THAT THE CIT(A) HAS ERRED IN ALLOWING THE CLAIM U/S 80IB(10) DESPITE THE FA CT THAT CONSTRUCTION OF THE PROJECT BY THE BUILDER WAS NOT COMPLETED WITHIN THE STIPULATED PERIOD AS PRESCRIBED UNDER THE LAW. T HE ISSUE INVOLVED IN THIS CASE IS APPARENTLY COVERED BY VARIOUS JUDG MENT S AND THEREFORE UNDER THESE CIRCUMSTANCES, WE ARE PROCEE DING TO DISPOSE THIS APPEAL EX PARTE QUA THE ASSESSEE. 3. THE BRIEF FACTS AS CULLED OUT FROM THE ORDERS ARE THAT THE ASSESSEE - COMPANY WAS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CONSTRUCTION OF RESIDENTIAL BUILDINGS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE AO THAT HOUSING PROJECT SHOULD BE COMPLETED BY 31.3.2009 AS PER LAW SINCE THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY AFTER 1.4.2004 BUT BEFORE 31.3.2005. IT WAS FURTHER NOTED BY HIM THAT ALTHOUGH THE APPLICAT ION FOR COMPLETION OF HOUSING PROJECT WAS SUBMITTED ON 20.2.2008, BUT THE OCCUPATION CERTIFICATE WAS GRANTED BY THE CONCERNED AUTHORITIES ON 9.7.2009, WHICH WAS BEYOND THE STATUTORY PERIOD PRESCRIBED U/S 80IB(10) AND THUS, DEDUCTION CLAIMED WAS NOT IN ACCO RDANCE WITH LAW, AND THEREFORE, THE SAME WAS DISALLOWED BY THE AO. 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) WHEREIN DETAILED SUBMISSIONS WERE MADE SHOWING THAT THE PROJECT OF THE ASSESSEE WAS COMPLETED ON 10.2.2008 AND APPL ICATION FOR SEEKING OCCUPATION CERTIFICATE WAS SUBMITTED ON 20.2.2008. IT WAS FURTHER SUBMITTED THAT ISSUANCE OF OCCUPATION CERTIFICATE BY THE THANE MUNICIPAL CORPORATION WAS BEYOND THE CONTROL OF THE ASSESSEE. IT WAS 3 M/S. PRESTIGE BUILDERS ITA NO. 3355/MUM/2014 ALSO SUBMITTED THAT THE PROJECT OF T HE ASSESSEE WAS APPROVED ON 30.8.2004, AND THEREFORE, THE AMENDMENT MADE IN THE LAW SHOULD NOT BE APPLIED RETROSPECTIVELY AND IN SUPPORT THESE ARGUMENT S , THE ASSESSEE RELIED UPON VARIOUS JUDG MENTS IN THE WRITTEN SUBMISSION S . VARIOUS EVIDENCES WERE SUBMITT ED SHOWING THAT THE PROJECT WAS COMPLETED BEFORE 20.2.2008, I.E. THE DATE OF APPLICATION FO R OCCUPATION CERTIFICATE. L D. CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE IN DETAIL AND THEREAFTER DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. BEING AGGRIEV ED, THE REVENUE FILED AN APPEAL BEFORE THE TRIBUNAL. DURING THE COURSE OF HEARING, THE LD. DR HAS RELIED UPON THE ORDER OF THE AO. 5. WE HAVE GONE THROUGH THE DETAILE D FINDINGS OF THE LD. CIT(A). I T IS NOTED BY US THAT HE HAS CAREFULLY EXAMINED EACH AND EVERY EVIDENCE S FILED BY THE AS SESSEE BEFORE ARRIVING AT THE FACTUAL CONCLUSION THAT COMPLETION OF THE PROJECT WAS DONE WITHIN THE STIPULATED TIME WHICH IS EVIDENT FROM THE FACT THAT THE ASSESSEE APPLIED FOR OBTAINING OCCUPATION CERTIFICATE FROM THE THANE MUNICIPAL CORPORATION ON 20.2.2008. NO DISCREPANCY WAS POINTED OUT BY THE SAID AUTHORITY BEFORE GRANTING THE OCCUPATION CERTIFICATE ON 9.7.2009. IN THIS REGARD, THE LD. CIT(A) ALSO ANALYZED THE POSITION OF LAW THAT IF NOTHING IS PENDING ON THE PART OF THE ASSESSEE, THEN, AFTER FILING APPLIC ATION FOR COMPLETION CERTIFICATE WITH THE CONCERNED AUTHORITY, NOTHING REMAINS IN THE CONTROL OF THE ASSESSEE, AND THEREFORE, ON WHATEVER DATE THE COMPLETION CERTIFICATE IS GRANTED BY THE AUTHORITY, IT SHOULD RELATE BACK TO THE DATE OF FILING OF THE APPLIC ATION BY THE ASSESSEE FOR OBTAINING THE COMPLETION CERTIFICATE. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND FIND THAT EVERYTHING WAS COMPLETED ON THE PART OF THE ASSESSEE ON THE DATE OF MAKING APPLICATION FOR OBTAINING THE OCCUPATION CERTIFICATE. THER EAFTER, GRANTING OF THE CERTIFICATE WAS 4 M/S. PRESTIGE BUILDERS ITA NO. 3355/MUM/2014 NOT IN THE HANDS OR IN THE CONTROL OF THE ASSESSEE. THE DELAY OCCURRED IN GRANTING OF THE OCCUPATION CERTIFICATE BY THE CONCERNED AUTHORITY , IN OUR VIEW, SHOULD NOT BE ATTRIBUTED ON THE PART OF THE ASSESSEE IN THE G IVEN FACTS AND CIRCUMSTANCES OF THE CASE PARTICULARLY WHEN NOTHING HAS BEEN BROUGHT BEFORE US TO SHOW THAT SOMETHING WAS PENDING IN THE PROJECT OR THAT DELAY OCCURRED DUE TO SOME REASONS ATTRIBUTABLE TO THE ASSESSEE. THE THANE MUNICIPAL CORPORATION GRANTE D THE OCCUPATION CERTIFICATE EVENTUALLY ON 9.7.2009. IN OUR CONSIDERED VIEW, THE DATE OF GRANTING OF OCCUPATION CERTIFICATE SHOULD RELATE BACK TO THE DATE OF FILING OF APPLICATION BY THE ASSESSEE I.E. 20.2.2008. THUS, IN OUR CONSIDERED VIEW, THE PROJECT HAS BEEN COMPLETED WELL IN TIME AND ASSESSEE HAS MADE COMPLIANCE WITH THE MANDATORY CONDITIONS OF THE LAW AND THUS, THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S. 80IB. OUR VIEW IS FORTIFIED BY MANY JUDG MENTS. WE PLACE RELIANCE ON THE JUDG MENT OF THE HON'B LE DELHI HIGH COURT IN THE CASE OF CIT V. SANDAN VIKAS (INDIA) LTD. , 335 ITR 117 WHEREIN THE HON'BLE HIGH COURT HAS RELYING UPON ANOTHER JUDGEMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT V. CLARIS LIFESCIENCES LTD., 326 ITR 251 (GUJ.) HAS TAKEN A SIMILAR VIEW. S IMILAR VIEW WAS TAKEN BY THE HON'BLE BOMBAY HIGH COURT IN THE C ASE OF CIT V. ACKRUTI CITY LTD., 31 TAXMANN.COM 275 (BOMBAY) WHEREIN THE HON'BLE BOMBAY HIGH COURT HELD AS UNDER : - IN THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 2005 - 06, FOLLOWING QUESTIONS OF LAW HAVE BEEN PROPOSED FOR OUR CONSIDERATION. (A) . (B) . (C) . (D ) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN 5 M/S. PRESTIGE BUILDERS ITA NO. 3355/MUM/2014 LAW, TRIBUNAL IS RIGHT IN LAW IN HOLDING THAT ASSESSEE IS ENTITLED TO DEDUCTION UN DER SECTION 80 I A(4)(III) OF THE INCOME TAX ACT ON PROFITS ON INDUSTRIAL PARK AT MAROL ANDHERI WHEN ASSESSING OFFICER MADE DISALLOWANCE AS PER RULE 1 8 - C OF THE INCOME TAX RULES AND PROJECT OF THE ASSESSEE WAS NOT NOTIFIED BY THE CBDT IN THE ASSESSMENT YEAR 2005 - 06 AND ASSESSEE HAS NOT SHOWN RELEVANT INCOME AS BUSINESS INCOME IN THE ORIGINAL RETURN OF INCOME FILED ? 2. ... 3. INSOFAR AS QUESTION (D) IS CONCERNED, THE TRIBUNAL BY THE IMPUGNED ORDER UPHELD THE ORDER OF T HE COMMISSIONER OF INCOME TAX (A) HOLDING THAT THE RESPONDENT - ASSESSEE IS ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECTION 80IA(4)(III) OF THE INCOME TAX ACT, 1961 ('ACT' FOR SHORT). THE OBJECTION OF THE REVENUE THAT THE DEDUCTION UNDER SECTION 80IA(4) (III) OF THE ACT IS AVAILABLE TO AN INDUSTRIAL PARK ONLY ON CBDT NOTIFYING THE INDUSTRIAL PARK UNDER RULE 18C OF THE INCOME TAX RULES, 1962 ('THE RULES' FOR SHORT). THIS THE CBDT DID ONLY ON 5 TH JUNE 2006. THEREFORE, ACCORDING TO THE REVENUE THE BENEFIT OF SECTION 80IA OF THE ACT IN TERMS OF SUB - SECTION (4)(III) THEREOF WOULD BE AVAILABLE AS FROM ASSESSMENT YEAR 2007 - 08 AND NOT EARLIER. THE COMMISSIONER OF INCOME TAX (A) AS WELL AS THE TRIBUNAL HAVE HELD THAT THE MINISTRY OF COMMERCE AND INDUSTRY HAD FINALL Y BY LETTER DATED 31 ST DECEMBER 2004 APPROVED THE INDUSTRIAL PARK AND A COPY OF THE SAME WAS FORWARDED TO THE CBDT. IN TERMS OF RULE 18C(4) OF THE RULES, ONCE THE INDUSTRIAL PARK IS APPROVED BY THE MINISTRY OF COMMERCE & INDUSTRY, THE CBDT HAS TO SUO - MOTTO ISSUE THE NOTIFICATION. THE TRIBUNAL, ON EXAMINATION OF ALL FACTS CONCLUDED THAT ALL THE REQUISITE CONDITIONS FOR CLAIMING BENEFIT UNDER SECTION 80IA(4)(III) OF THE ACT HAS BEEN COMPLIED WITH BY THE RESPONDENT - ASSESSEE DURING THE ASSESSMENT YEAR IN QUES TION. FURTHER, THERE IS NO REASON TO HOLD THE BENEFIT UNDER SECTION 80IA(4)(III) OF THE ACT IS AVAILABLE ONLY PROSPECTIVELY FROM THE DATE OF THE ISSUE OF NOTIFICATION BY THE CBDT. IN THESE CIRCUMSTANCES, AS THE DECISION OF THE TRIBUNAL IS BASED ON FINDING OF FACT AND MERE DELAY ON THE PART OF THE CENTRAL BOARD OF DIRECT TAXES IN ISSUING THE NOTIFICATION WOULD NOT WARRANT THE RESPONDENT - ASSESSEE BEING DENIED THE BENEFIT OF SECTION 80IA(4)(III). THIS IS SO, PARTICULARLY WHEN THE REVENUE HAS 6 M/S. PRESTIGE BUILDERS ITA NO. 3355/MUM/2014 NOT BEEN ABLE TO POINT OUT ANY INFIRMITY IN THE APPROVAL AS GRANTED BY THE MINISTRY FOR COMMERCE AND INDUSTRY RECOGNIZING THE RESPONDENT - ASSESSEE AS INDUSTRIAL PARK. THE VIEW OF THE COMMISSIONER OF INCOME TAX (A) AND THE TRIBUNAL IS A REASONABLE VIEW IN THE FACTS OF THE CASE AND THUS WE SEE NO REASON TO ENTERTAIN QUESTION (D). (EMPHASIS SUPPLIED) 6. IT IS FURTHER NOTED BY US THAT IN THIS CASE AMENDMENT MADE IN SEC. 80IB(10) BROUGHT ABOUT BY INSERTION OF CLAUSE (D) W.E.F. 1.4.2005 WILL NOT APPLY TO ANY APPROVAL GRANTED IN ANY YEAR PRIOR TO A.Y 2005 - 06. THIS ISSUE HAS AL SO BEEN DECIDED IN VARIOUS JUDGMENTS, INCLUDING THE JUDG MENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. JOGANI CONSTRUCTIONS LTD., 35 TAXMANN.COM 9 (BOMBAY) . SIMILAR VIEW HAS BEEN TAKEN BY THE HO N'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. G.R. DEVELOPERS, 22 TAXMANN.COM 265 AND THE MUMBAI BENCH OF THE ITAT IN THE CASE OF HAWARE CONSTRUCTIONS (P) LTD., 64 DTR 251 (ITAT MUMBAI) . 7. THUS, IN VIEW OF THE FACTS OF THE CASE AND THE SETTLED POSITIO N OF LAW AS DISCUSSED ABOVE, WE FIND NOTHING WRONG IN THE FINDING S OF THE LD. CIT(A) , AND THEREFORE , THESE ARE UPHELD. THEREFORE, THE GROU NDS RAISED BY THE REVENUE IN THIS APPEAL ARE DISMISSED. 8. AS A RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 2 4 T H F E B R U A R Y , 2016. SD/ - SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER (ASHWANI TANEJA) ACCOUNTANT MEMBER MUMBAI, DATE : 2 4 . 0 2 . 2016 7 M/S. PRESTIGE BUILDERS ITA NO. 3355/MUM/2014 COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, C BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR *SSL* I.T.A.T, MUMBAI