The ITO, Ward-1(3), RAJKOT-GUJARAT V. Ramkrishna Sthapatya, RAJKOT-GUJARAT

ITA 359/RJT/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62808 (ITAT-RAJKOT)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-04-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 15-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESH PANDEY
• Assessee Lawyers: RD LALCHANDANI
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT . .. . . . . . , , , , . .. . . . . . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K . SRIVASTAVA, AM ITA NO. 359/RJT/2011 / ASSESSMENT YEAR 2008-09 ITO., WD.-1(3) V. RAMKRISHNA STHAPATYA RAJKOT. 110-MADHAV COMPLES DR. YAGNIK ROAD, RAJKOT. PAN: AAGFR2395K. DATE OF HEARING : 25-04-2012. DATE OF PRONOUNCEMENT : 22-05-2012. REVENUE BY: SHRI YOGESH PANDEY, D.R ASSESSEE BY: SHR I R. D. LALCHANDANI,. / // / ORDER . .. . . . . . /D. K. SRIVASTAVA: THE APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 28-06-20 11, ON THE FOLLOWING GROUNDS:-. 1. THE LD. CIT(A)-I, RAJKOT HAS ERRED IN LAW AND O N FACT IN DELETING THE ADDITIONS MADE ON ACCOUNT OF DEDUCTION U/S.80IB (10) OF RS.78,98,317/-. 2. ON THE FACTS OF THE CASE, THE LD. CIT(A) OUGHT T O HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF HOUSE PROPERTIES. IT I S A PARTNERSHIP FIRM CONSTITUTED BY 3 PARTNERS NAMELY, GIRISHKUMAR MADHAVJIBHAI MAKADIA , SURESHKUMAR MADHAVJIBHAI MAKADIA AND PRAMODKUMAR MADHAVJIBHAI MAKADIA. THE A SSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT UNDER APPEAL ON 30-06-200 8 RETURNING TOTAL INCOME AT RS.8,110/- AFTER CLAIMING DEDUCTION U/S.80IB OF THE INCOME-TAX ACT. AFTER PROCESSING, THE RETURN WAS TAKEN UP FOR A SCRUTINY DURING WHICH IT WAS FOUND THAT THE ASSESSEE FIRM WAS NEITHER THE OWNER OF THE LAND ON WHICH THE BUILDING WAS OWNED BY IT NOR HAD THE REQUISITE PERMISSIONS/APPRO VALS WERE GIVEN BY THE RAJKOT MUNICIPAL CORPORATION I FAVOUR OF THE ASSESSEE. TH E AO FOUND THAT THE PLOT OF LAND ON WHICH THE BUILDING WAS DEVELOPED BY THE ASSESSEE FIRM WAS OWNED BY THE PARTNERS OF THE FIRM AND IT STOOD IN THEIR NAMES. HE ALSO FOUND THAT THE REQUISITE PERMISSIONS/APPROVALS WERE OBTAINED BY THE AFORESAI D PARTNERS FROM RAJKOT MUNICIPAL CORPORATION. IN THIS VIEW OF THE MATTER, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80IB WI TH THE FOLLOWING OBSERVATIONS:- 2 ITA 359/RJT/2011 4.1 THE ASSESSEE;S CONTENTION IS NOT ACCEPTABLE IN VIEW OF THE AFORESAID FACTS AND IN THE CIRCUMSTANCES OF THE CASE. IT FEL T THAT THE HOUSING PROJECT HAS NOT BEEN APPROVED AND AS ALSO COMPLETED IN THE NAME F THE UNDERTAKING (ASSESSEE FIRM) CLAIMING THE DEDUCTION U/S.80IB OF THE ACT. ACCORDINGLY, SINCE THE ASSESSEE FIRM HAS NOT FULFILLED ALL THE C ONDITIONS AS DISCUSSED ABOVE, THE ASSESSEE FIRM IS NOT ELIGIBLE TO CLAIM T HE DEDUCTION US.80IB OF THE ACT. ACCORDINGLY, AN AMOUNT OF RS.78,98,317/- AS C LAIMED U/S.80IB OF THE ACT IS DISALLOWED. PENALTY PROCEEDINGS U/S.274 READ WI TH SECTION 271(1)(C) OF THE ACT ARE INITIATED FOR FURNISHING INACCURATE PARTICU LARS OF INCOME. 3. AGGRIEVED BY THE DENIAL OF DEDUCTION U/S.80IB BY THE AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A), WHO, HAD IN HIS ORDER DA TED 28-06-2011 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS:- 3. THE APPELLANT HAS TAKEN ONLY ONE GROUND OF APPE AL, IN WHICH THE APPELLANT HAS CHALLENGED THE ASSESSING OFFICERS AC TION IN DISALLOWING THE CLAIM FOR DEDUCTION OF RS.7898317/ U/S.80IB OF THE I.T. ACT, 1961. THE ASSESSING OFFICER HAS DISCUSSED THIS ISSUE ON PAGE- 2 IN PARAA-3 ONWARDS OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER SHOW C AUSE THE ASSESSEE AS TO WHY THE AMOUNT OF DEDUCTION OF RS.7898317/- U/S. 80IB OF THE I. T. ACT,1961 SHOULD NOT BE DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN RESPONSE TO SHOW CAUSE NOTICE, THE AS SESSEE FILED DETAILED REPLY/SUBMISSION VIDE LETTER DATED 4-8-2010, 6-12-2 010 & 10-12-2010, HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE C ONTENTION OF THE ASSESSEE AND HELD THAT THE HOUSING PROJECT HAS NOT BEEN APPR OVED AND AS ALSO COMPLETED IN THE NAME OF THE UNDERTAKING (ASSESSEE FIRM) THE DEDUCTION OF U/S.80IB OF THE I.T. ACT, 1961 AND ACCORDINGLY, THE ASSESSEE FIRM HAS NOT FULFILLED OTHER CONDITIONS LAID DOWN U/S.80IB OF TH E ACT AND HENCE, THE ASSESSEE FIRM IS NOT ELIGIBLE TO CLAIM THE DEDUCTIO N U/S.80IB OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER DISALLOWED AN AM OUNT OF RS.7898317/- AS CLAIMED U/S.80IB OF THE I. T. ACT, 1961. 4. AGGRIEVED BY THE ORDER PASSED BY THE CIT(A), THE DEPARTMENT IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 5. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE VIEW TAKEN BY THE CIT(A) IN THE MATTER HAS SINCE BE EN CONFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT IN CIT V. RADHE DEVELOPER S IN TAX APPEAL NO. 546 OF 2008. THE LD. DEPARTMENTAL REPRESENTATIVE HOWEVER, SUPPOR TED THE ORDER PASSED BY THE CIT(A).S 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THEIR SUBMISSIONS. IN CIT V. RADHE DEVELOPERS (SUPRA), THE LD. HIGH CO URT HAS HELD AS UNDER:- 3 ITA 359/RJT/2011 45. UNDER THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE TRIBUNAL COMMITTED NO ERROR IN HOLDING THAT THE ASSESSEE WER E ENTITLED TO THE BENEFIT UNDER SECTION 80IB (10) OF THE ACT EVEN WHERE THE T ITLE OF THE LANDS HAD NOT PASSED ON TO THE ASSESSEE AND IN SOME CASES, THE DE VELOPMENT PERMISSIONS MAY HAVE ALSO BEEN OBTAINED IN THE NAME OF THE ORIG INAL LAND OWNERS. 9. SINCE THE ORDER PASSED BY THE CIT(A) IS IN CONFO RMITY WITH THE LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN CIT V. RADHE DEVELOPERS (SUPRA), THE APPEAL FILED BY THE REVENUE DESERVES TO BE DISMISSE D AND WE ACCORDINGLY DISMISS.. ) + 22-05-2012 - ) THIS ORDER PRONOUNCED IN OPEN COURT ON 22-05-2012 SD/- SD/- ( .. / T. K. SHARMA) ( .. / D. K. SRIVASTAVA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER +/ DATE 22-05-2012. /RAJKOT ) )) ) 01 01 01 01 21 21 21 21 / COPY OF ORDER FORWARDED TO:- 1. 5 / APPELLANT-. THE INCOME-TAX OFFICER, WD.-1(3), RA JKOT. 2. 075 / RESPONDENT-RAMKRISHNA STHAPATYA, RAJKOT.. 3. : / CONCERNED CIT-I, RAJKOT. 4. :- / CIT (A)-I, RAJKOT.. 5. 1 0, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , ASSTT. REGISTRAR/ , / ITAT, RAJKOT