M/s S.K. Builders, Pune V. ITO Wd 8(4), Pune

ITA 341/PUN/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67077 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 20-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO S . 341 & 342 / P N/ 20 12 ASSESSMENT YEAR S : 2005 - 06 & 2006 - 07 M/S. S.K. BUILDERS, PLOT NO. 70, SAI KUNJ, OPP. PCMC LAWNS, NEAR ASHOK THEATRE, PIMPRI, PUNE VS. ITO, WARD 8(4), PUNE (APPELLANT) (RESPONDENT) PAN NO. AARFS8625G APPELLANT BY: SHRI SUNIL GANOO RESPONDENT BY: MS. ANN KAPTHUAMA DATE OF HEARING : 26 - 06 - 2013 DATE O F PRONOUNCEMENT : 28 - 06 - 2013 ORDER P ER R.S. PADVEKAR , JM : - THESE TWO APPEALS ARE FILED BY THE ASSESSEE CHALLENGING THE RESPECTIVE IMPUGNED ORDERS OF THE LD. CIT(A) - V, PUNE FOR THE A.YS. 2005 - 06 & 2006 - 07. THE FIRST COMMON ISSUE IN APPEALS IS DIS ALLOWANCE OF THE DEDUCTION U/S. 80IB(10) IN BOTH THE ASSESSMENT YEARS AS UNDER: 2. THE FACTS PERTAINING TO ISSUE IN CONTROVERSY ARE IN NARROW COMPASS. THE ASSESSEE IS THE BUILDER AND DEVELOPER. THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S. 80IB(10) IN RES PECT OF THE HOUSING PROJECTS NAME AS SAI GARDEN AT SURVEY NO. 11, PIMPLE SAUDAGAR, PUNE. THE SAID PROJECT CONSISTS OF 3 BUILDINGS, 4 ROW HOUSES AND 6 SHOPS. THE ASSESSING OFFICER DENIED THE DEDUCTION TO THE ASSESSEE ON THE TWO REASONS (I) THE COMMERCIA L AREA IN THE SAID HOUSING PROJECT IS BEYOND THE PERMISSIBLE LIMIT BUT THE LD. CIT(A) ALLOWED THE RELIEF TO THE ASSESSEE ON THE SAID GROUND AND (II) REASON GIVEN BY THE ASSESSING OFFICER IS THAT THE PLOT OF LAND ON WHICH SAI GARDEN HOUSING PROJECT IS UND ER TAKEN BY THE ASSESSEE IS HAVING THE AREA OF LESS THAN 1 ACRE. THE ASSESSING OFFICER 2 ITA NOS.341 & 342, S.K. BUILDERS, PUNE HAS OBSERVED THAT AS PER THE ARCHITECT REPORT , THE AREA OF THE PLOT IS 4,000 SQ. MTRS. WHERE AS TO CONSTITUTE 1 ACRE OF THE PLOT OF LAND THE AREA SHOULD BE 4046.82 SQ. MTRS. AS OBSERVED BY THE ASSESSING OFFICER , AS PER REPORT OF THE APPROVED ARCHITECT THE TOTAL AREA OF THE PLOT OF PROJECT AS PER PLAN IS 0.989 ACRE. H E , THEREFORE , ON THIS GROUND ALSO DENIED THE DEDUCTION TO THE ASSESSEE IN BOTH THE ASSESSMENT YEARS. TH E ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER FOR DENYING THE DEDUCTION TO THE ASSESSEE U/S. 80IB(10) ON BOTH THE REASONS AS STATED EARLIER. ONE OF THE REASON , IT IS A COMMERCIAL SHOPPING WAS DECIDED IN FAVOUR OF THE ASSESSEE AND ONLY ISSUE N OW WHICH REMAIN BEFORE US IN RESPECT OF THE AREA OF THE PLOT OF LAND. THE LD. CIT(A) IS DISCUSSED THIS ISSUE IN PARA NO. 7 WHICH READS AS UNDER: HOWEVER, SO FAR AS THE AREA OF THE PLOT IS CONCERNED, IT IS A MATTER OF RECORD THAT ON THE APPROVED BUILDING PLAN, THE AREA MENTIONED WAS 4000 SQ.MTS, WHICH WAS LESS THAN THE REQUIRED MINIMUM AREA OF ONE ACRE WHICH IS EQUIVALENT 4046.82 SQ.MTS. THIS WAS MADE AMPLY CLEAR BY THE DISCUSSION IN THE ASSESSMENT ORDER, WHICH INCLUDED THE REPORT OF THE ARCHITECT MENTIONE D THEREIN. THE APPELLANT HAS ALSO CITED THE VALUATION REPORT OF THE VALUATION OFFICER OF THE I.T. DEPARTMENT, SOLAPUR DATED 18/12/2008, WHICH HAS BEEN CONSIDERED IN THE ASSESSMENT ORDER FOR A.Y. 2006 - 07 I.E. THE SUBSEQUENT YEAR. THIS VALUATION REPORT CATEG ORICALLY MENTIONED THAT THE AREA OF THE PLOT WAS 4000 SQ.MTS ONLY I.E. LESS THAN ONE ACRE. THE CLAIM THAT IN 7/12 EXTRACT, AREA OF ONE ACRE WAS MENTIONED, DOES NOT COME TO THE RESCUE OF THE APPE LLANT, IN VIEW OF THE DECISION OF THE ITAT PUNE BENCH IN THE C ASE OF BUNTY BUILDERS (2010) 127 ITD 286 (PUNE). ACCORDING TO THIS DECISION, THE AREA MENTIONED IN THE APPROVED PLAN BY THE CORPORATION, WHICH WAS ADOPTED AS A BASE FIGURE FOR THE CALCULATION OF AMENITY SPACE, INTERNAL ROAD ETC., WAS THE AREAR WHICH WAS TO BE CONSIDERED FOR THE PURPOSES OF PLOT AREA U/S.80IB(10). THE AREA STATEMENT GIVEN ON THE APPROVED/SANCTIONED LAY OUT PLAN AND BUILDING PLANS APPROVED BY THE PCMC IN THIS CASE EVERYWHERE MENTIONED THE PLOT AREA AT 4000 SQ.MTS OR 40R, WHICH IS NO DOUBT LE SS THAN ONE ACRE. THE APPELLANT'S CONTENTION IN THIS REGARD THAT 4OR WHICH 3 ITA NOS.341 & 342, S.K. BUILDERS, PUNE IS EQUIVALENT TO 4000 SQ.MTS SHOULD BE CONSIDERED AS EQUIVALENT TO ONE ACRE IS INCORRECT AND NOT TENABLE. THEREFORE, THE APPELLANT HAS CLEARLY FAILED TO SATISFY THE CONDITIONS SPEC IFIED U/S.80IB(10)(B) AS THE AREA OF THE PROJECT WAS LESS THAN ONE ACRE. ON THIS BASIS, DENIAL OF DEDUCTION U/S.80IB(10) IS HEREBY UPHELD AND THIS GROUND OF APPEAL IS DISMISSED. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE US. WE HAVE HEARD THE PARTIES A ND PERUSED THE RECORD. WE FIND THAT AS NOTED BY THE ASSESSING OFFICER THE AREA OF PLOT IS LESS THAN 4046.82 SQ. MTRS. AND AS PER THE SANCTIONED PLAN THE AREA OF PLOT IS 4000 SQ. MTRS. HENCE, IN SUM AND SUBSTANCE THE PLOT O N WHICH THE HOUSING PROJECT HAS BEEN CONSTRUCTED IS SOUGHT BY 4046.82 SQ. MTRS. THE LEARNED COUNSEL SUBMITS THAT AS PER THE RECORD OF THE CITY SURVEY THE AREA OF THE PLOT IS 4068 SQ. MTRS. THE LEARNED COUNSEL REFERS TO PAPER BOOK IN WHICH THE COPY OF THE MAP OF THE PLOT IS PLACED. HE SUBMITS THAT THIS IS VERY OLD LAND AND EARLIER AS PER RECORD OF RIGHTS, THE LANDS WERE MEASURE D IN ACRES AND GUNTHAS I.E. AS PER IMPERIAL MEASURES. S UBSEQUENTLY AS PER THE GOVERNMENT DECISION METRIC MEASURES WERE ADOPTED AND AREA SHOWN ON THE RECORD OF RI GHTS WAS CONVERTED INTO THE H ECTARES AND A RES. HE REFERS TO THE HAND BOOK OF THE GOVERNMENT GIVING THE GUIDELINES HOW TO CONVERT THE ACRES AND GUNTHAS INTO HECTARES AND A RES. AS PER THE SAID MANUAL , THE REVENUE AUTHORITIES ARE TO TAKE ONE GUNTHA AS ONE A RES. THE SAID CONVERSION TOOK PLACE LONG BACK IN 197 0 . H E ALSO REFER S TO DCR RULES MORE PARTICULARLY APPENDIX - A UNDER RULE 6.1 AND 6.5 AND SUBMITS THAT AS PER THE REGULATIONS THE M INIMUM AREA IS CONSIDERED FOR GRANTING THE PERMISSION. HE ARGUES THAT I N THE A.Y. 2006 - 07 THE ASSESSING OFFICER REFERRED THE MATTER TO THE DVO, INCOME - TAX DEPARTMENT, SOLAPUR ON THIS SPECIFIC ISSUE OF AREA OF PLOT OF LAND AND THE DVO SENT THE REPORT STATING THAT AS PER DEMARCATION PLAN , THE PLOT AREA IS 4224.39 SQ. MTRS AND 7 X 12 EXTRACT SHOWS THE LAND AREA AS ONE ACRE. HE THEREFORE , PLEADED FOR ALLOWING THE CLAIM OF DEDUCTION U/S. 80IB(10) IN BOTH THE ASSESSMENT 4 ITA NOS.341 & 342, S.K. BUILDERS, PUNE YEARS. THE LD. DR RELIED ON THE DECISION OF THE BUNTY BUILDERS 127 ITD 286 ( PUNE ). WE HAVE ALSO HEARD THE LD. DR. 4. WE FIND THAT BOTH THE AUTHORITIES HAVE HELD THAT THE AREA OF PLOT IS LESS THAN ONE ACRE . IT IS ONE OF THE MANDATE U/S. 80IB(10) THAT THE HOUSING PROJECT SHOULD BE ON THE PLOT OF LAND HAVING THE M INIMUM AREA OF ONE ACRE. BOTH THE AUTHORITIES H AVE PLACED THE RELIANCE ON THE APPROVED PLAN ON WHICH THE TOTAL PLOT AREA IS MENTIONED AS 4000 SQ. MTRS. WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL . F ROM THE EVIDENCE PRODUCED BY HIM IN THE FORM OF THE MUTATION ENTRY, WE FIND THAT THERE WAS A C ONVERSION O F THE EARLIER MEASUREMENT SHOWING AREA OF LAND IN THE FORM OF ACRES AND GUNTHAS WHICH IS CONVERTED INTO HECTARES AND A RES BUT THE METHOD FOLLOWED FOR CONVERSION DOES NOT APPEARS TO BE SCIENTIFIC. ADMITTEDLY IN THE A.Y. 2006 - 07 , MATTER WAS SPECI FIC ALLY REFERRED BY THE ASSESSING OFFICER TO THE DVO WHO HAS CERTIFIED THAT THE AREA OF THE PLOT IS ONE ACRE. IT IS PERTINENT TO NOTE HERE THAT ON 7/12 EXTRACT ALSO THE AREA OF PLOT IS SHOWN AS ONE ACRE. IT IS TRUE THAT THE APPROVED PLAN SHOWS THE PLOT A REA AT 4000 SQ. MTRS. WE FIND THAT AS PER THE D CR WHILE GIVING THE PERMISSION THE AREA SHOWN ON THE REVENUE RECORD IS C ONSIDERED I F IT IS A LESS THAN THE ACTUAL ONE. WE HAVE ALSO FIND THAT AS PER THE MEASUREMENT MAP BY THE CITY SURVEY OFFICE, PIMPRI - CHIN CHVAD THE AREA OF THE PLOT OF LAND IS MORE THAN ONE ACRE . IT IS SUPPORTED BY THE REPORT OF THE DEPARTMENTAL VALUER , WE HAVE ALSO GONE THROUGH THE DECISION RELIED BY THE LD. CIT(A) IN THE CASE OF BANTI BUILDERS BUT IN OUR OPINION THE FACTS ARE TOTALLY DIFF ERENT AS THE AREA UNDER THE AMENITIES WAS IN DISPUTE WHETHER THE SAID FORM PART OF THE PLOT OF LAND ON WHICH THE SAID HOUSING PROJECT WAS UNDERTAKEN. IN OUR OPINION THE SAID DECISION HAS NO RELEVANCE TO THE FACTS OF THIS CASE. IN OUR OPINION BOTH THE AUT HORITIES BELOW HAVE NOT JUSTIFIED DENYING THE CLAIM OF DEDUCTION TO THE ASSESSEE U/S. 80IB(10) . W E THEREFORE , ALLOW THE RESPECTIVE GROUNDS TAKEN BY THE ASSESSEE IN BOTH THE ASSESSMENT YEARS 5 ITA NOS.341 & 342, S.K. BUILDERS, PUNE AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESS EE U/S. 80IB(10) BY HOLDING THAT THE ASSESSEE HAS COMPLIED WITH CONDITION OF AREA OF THE PLOT AS PROVIDED IN SEC. 80IB(10)(B) OF THE ACT. 5. NOW THE NEXT ISSUE IS THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S. 40(A) (IA) OF RS.3,66,849/ - WHICH HAVE N OT BEEN CONSIDERED AS A PART OF ELIGIBLE PROFIT FOR COMPUTING THE DEDUCTION U/S. 80IB(10) AND THIS ISSUE ARISES IN THE A.Y. 2005 - 06. 6. WE HAVE HEARD THE PARTIES. THE LEARNED COUNSEL RELIED ON THE DECISION OF THE HON'BLE HIGH COURT OF GUJARAT IN THE CAS E OF ITO VS. KEVAL CONSTRUCTION (2013) 33 TAXMANN.COM 277(GUJARAT). WE FIND THE ISSUE ARISING IN THIS APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE B Y THE DECISION IN CASE OF KEVAL CONSTRUCTION (SUPRA). THE OPERATIVE PART OF THE SAID DECISION IS A S UNDER: DURING THE COURSE OF THE ASSESSMENT, THE ASSESSING OFFICER ALSO DISALLOWED THE EXPENDITURE OF SUM OF RS. 10,93,134/ - UNDER SECTION 40(A)(IA) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAD FAILED TO DEDUCT THE TAX AT SOURCE ON PAYMENT OF TRANSPORT ATION CHARGES. ASSESSEE EARNED THE MATTER IN APPEAL. CIT (APPEALS) CONFIRMED THE DISALLOWANCE UPON WHICH THE ASSESSEE APPROACHED THE TRIBUNAL. BEFORE THE TRIBUNAL, ASSESSEE TOOK TWO STANDS. HE FIRSTLY CONTENDED THAT THIS WAS THE FIRST YEAR OF APPLICABILIT Y OF THE PROVISIONS AND THEREFORE, OUT OF IGNORANCE, THE DEDUCTION WAS NOT MADE. HE SECONDLY CONTENDED THAT IN ANY CASE SUCH DISALLOWANCE SHOULD QUALIFY FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE TRIBUNAL ALLOWED HIS APPEAL ACCEPTING THE ALTERNAT E CONTENTION AND DIRECTED THE ASSESSING OFFICER TO GRANT DEDUCTION ACCORDINGLY. THIS CONCLUSION OF THE TRIBUNAL HAS GIVEN RISE TO QUESTIONS (HA) AND (IIB) NOTED ABOVE. IDEALLY SINCE THIS QUESTION HAD ARISEN OUT OF THE ASSESSEE'S APPEAL, AS CONTRASTING THE FIRST QUESTION WHICH HAD ARISEN OUT OF REVENUE'S APPEAL AGAINST TRIBUNAL'S ORDER, REVENUE SHOULD HAVE PRESENTED TWO SEPARATE APPEALS BEFORE US. WE ARE HOWEVER, NOT COMPELLING FOR TWO SEPARATE APPEALS. 6 ITA NOS.341 & 342, S.K. BUILDERS, PUNE WE, THEREFORE, FOLLOWING THE DECISION IN THE CASE OF KEVAL CONSTRUCTION (SUPRA), ALLOW THE GROUND NO. 3 TAKEN BY THE ASSESSEE IN THE A.Y. 2005 - 06 AND DIRECT THE ASSESSING OFFICER TO INCLUDE THE SAID AMOUNT OF DISALLOWANCE IN THE ELIGIBLE PROFIT FOR COMPUTING THE DEDUCTION U/S. 80IB(10) . 7. IN THE RESULT , BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 - 06 - 20 1 3 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 28 TH JUNE, 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - V, PUNE 4 THE C CIT , PUNE 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE