ITO WD 2(3), THANE V. DREAM HOUSE REALTORS, MUMBAI

ITA 35/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92370 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 02-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Wrong claim; Competent authority

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D , MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 35 /M/2013 ASSESSMENT YEAR: 200 4 - 05 INCOME TAX OFFICER, WARD 2(3) THANE, 6 TH FLOOR, B WING, ROOM NO.13, ASHAR IT PARK, ROAD NO.16 - Z, NR. AMBIKA NAGAR, WAGLE ESTATE, THANE 400 604 VS. M/S. DREAM HOUSE REALTORS, SHOP NO.7, NEEL AKASH GANGA, GROUND FLOOR, LAXMI PARK, NAYA NAGAR, MIRA ROAD (E), THANE - 400107 PAN: AADFD 9736B (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI LOVE KUMAR , D.R. DATE OF HEARING : 2 7 .04. 201 5 DATE OF PRONOUNCEMENT : 27.04.2015 O R D E R PER VIJAY PAL RAO , JUDICIAL MEMBER: THIS A PPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 12 . 1 0 .2012 OF CIT(A) ARISING FROM THE PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 200 4 - 0 5 . THE REVENUE H AS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S 271(1)(C) OF AN AMOUNT OF RS.29,50,465/ - . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) DID NOT APPREC IATE THE FACT THAT THE CLAIM OF U/S 80IB(10) MADE BY THE ASSESSEE WAS FRAUDULENT AND WAS DETECTED ONLY AFTER A SURVEY WAS CONDUCTED. THIS SHOWS THAT THE ASSESSEE HAD MALAFIDE INTENTION TO CONCEAL HIS INCOME BY MAKING FALSE CLAIM. ITA NO. 35 /M/2013 M/S. DREAM HOUSE REALTORS 2 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE WHEN THIS APPEAL WAS CALLED FOR HEARING. WE FIND THAT THE NOTICES ISSUED THROUGH RPAD WERE RECEIVED UNDELIVERED WITH THE POSTAL REMARK LEFT. ACCORDINGLY, WE PROPOSE TO HEAR AND DISPOSE OFF THE APPEAL OF THE REVENUE EX - PARTE. 3 . WE HAVE HEARD THE LD. D.R. AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT IN THE QUANTUM APPEAL THE TRIBUNAL VIDE ORDER DATED 20.04.12 HAS SET ASIDE AND RESTORED THE MATTER BACK TO THE RECORD OF THE CIT(A) ON THE ISSUE OF DI SALLOWANCE OF DED UCTION UNDER SECTION 80IB(10) IN PARA 4 AS UNDER: 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING DENIAL OF DEDUCTION UNDER SECTION 801B(10). THE DEDUCTION UNDER THE SAID SECTION IS ALLOWABLE IN RESPECT OF HOUSING PROJECT SUBJECT TO FULFILLMENT OF CERTAIN CONDITIONS. ONE OF THE CONDITIONS IS THAT BUILT - UP AREA OF EACH FLAT SHOULD BE LESS THAN 1000 SQ.FT. IN CASE PROJECT LOCATED WITHIN THE MUNICIPAL LIMITS AND 1500 SQ.FT. IN CASE PROJ ECT LOCATED MORE THAN 25 KMS FROM MUNICIPAL LIMITS. IN THIS CASE, AO HAD NOTED THAT THE ASSESSEE HAD SOLD SIX FLATS WITH TWO FLATS JOINED TOGETHER TO FORM THREE INDEPENDENT DWELLING UNITS. THE ALTERATIONS HAD BEEN MADE BEFORE THE POSSESSIONS HAD BEEN HANDE D OVER AND THEREFORE, BUILT UP AREA IN EACH CASE WAS MORE THAN 1000 SQ.FT. IN THE SAID CALCULATION, AO HAD TAKEN THE BUILT - UP AREA OF EACH FLAT IN THE BUILDING A - 3, B - 3 AND B - 4 IN WHICH THE FLATS HAD BEEN JOINED TOGETHER AT 790 SQ.FT., 510 SQ.FT. AND 510 S Q.FT. THE ASSESSEE HAS HOWEVER FILED COPY OF AGREEMENTS IN WHICH IT IS MENTIONED THAT 790 SQ.FT. WAS SUPER BUILT - UP AREA OF EACH FLAT WHICH ALSO INCLUDED COMMON AREA. THE ASSESSEE HAS ALSO POINTED THAT BUILT - UP AREA OF EACH FLAT IN THESE BUILDINGS WAS 662 .10 SQ.FT., 477.30 SQ.FT. AND 301.90 SQFT. AND THEREFORE EVEN IF THE TWO FLATS ARE TAKEN TOGETHER, THE BUILT - UP AREA WAS LESS THAN 1500 SQ.FT. AND ASSESSEE WAS FULFILLING THE CONDITIONS. 4. AS REGARDS THE COMMERCIAL AREA, THERE IS NO LIMIT ON COMMERCIAL AREA IN THE SCHEME IS APPROVED PRIOR TO 1.4.2005 IN VIEW OF THE JUDGMENT OF HON ' BLE HIGH COURT OF BOMBAY IN THE CASE OF BRAHMA ASSOCIATES (SUPRA). THE AO HAS MADE DISALLOWANCE ON THE GROUND THAT THERE WAS VIOLATION OF THE LIMIT OF 1000 SQ.FT. BASED ON BUIL T - UP AREA OF ONE FLAT AND ALSO BECAUSE OF COMMERCIAL AREA IN THE BUILDING. WE FIND THAT CIT(A) HAS NOT GIVEN ANY FINDING ON THESE RESPECTS AS TO WHETHER THE BUILT - UP AREA WAS IN EXCESS OF THE PRESCRIBED LIMIT AND WHETHER COMMERCIAL AREA WAS IN VIOLATION OF PROVISIONS. FURTHER, CLAIM OF THE ASSESSEE IS THAT PROJECT WAS LOCATED MORE THAN 25 KMS AWAY FROM THE MUNICIPAL LIMIT AND, THEREFORE, BUILT - UP AREA OF 1500 SQ.FT. WOULD APPLY IN RESPECT OF EACH FLAT. THIS ASPECT HAS ALSO NOT BEEN EXAMINED. CIT(A) HAS MADE DISALLOWANCE ON THE GROUND THAT THE PROJECT DID NOT HAVE PROPER APPROVAL. THE ASSESSEE HAS SUBMITTED THAT THE PROJECT HAD BEEN DULY APPROVED BY ITA NO. 35 /M/2013 M/S. DREAM HOUSE REALTORS 3 THE ASSISTANT DIRECTOR TOWN PLANNING WHO WAS THE COMPETENT AUTHORITY. IN OUR VIEW, MATTER REQUIRES FRESH CONSID ERATION AT THE LEVEL OF CIT(A) IN VIEW OF THIS CLAIM OF THE ASSESSEE AND ALSO BECAUSE OF THE FACT THAT CIT(A) HAS GIVEN NO FINDING IN RESPECT OF CERTAIN ASPECTS MENTIONED ABOVE. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HI M FOR NECESSARY EXAMINATION AND FOR PASSING A FRESH ORDER AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. SINCE THE ISSUE IS SET ASIDE TO THE RECORD OF THE CIT(A), THEREFORE THE PENALTY IS NOT SURVIVED AND ACCORDINGLY THE SAME IS DELETED WITH THE LIBERTY TO THE AO TO TAKE NECESSARY ACTION, IF REQUIRE, AS PER THE OUTCOME OF THE SET ASIDE PROCEEDINGS. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 .04. 201 5 . S D/ - SD/ - ( R.C. SHARMA ) ( VIJAY PAL RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 27. 04.2015 . * KISHORE , SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT TH E CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.