ASST CIT CEN CIR 17 & 28, MUMBAI V. NIRMAL LIFESTYLE LTD, MUMBAI

ITA 3623/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8557 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 05-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDRAJIT SINGH
• Keywords: Search and seizure
• Section: 143(3); 153A; 80IB; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . , . / BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER / AND , . . SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 3622/MUM/2011 / ASSESSMENT YEAR 2004-05 . / ITA NO. 3623/MUM/2011 / ASSESSMENT YEAR 2005-06 . / ITA NO. 3624/MUM/2011 / ASSESSMENT YEAR 2006-07 ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIR. 17 & 28, ROOM NO. 401, 4 TH FLOOR,AYAKAR BHAVAN,M.K. ROAD, MUMBAI-20. VS. M/S. NIRMAL LIFESTYLE LTD. JAWAHAR TALKIES COMPOUND, DR. R.P. ROAD, MULUND (WEST) MUMBAI 400 080. PAN: AAACN 9145 J ( / APPELLANT ) ( ! / RESPONDENT ) REVENUE BY : SHRI SURENDRAJIT SINGH ASSESSEE BY : SHRI BHUPENDRA SHAH ' #$% / DATE OF HEARING : 15 -10-2012 &' ' #$% / DATE OF PRONOUNCEMENT : 19 -10-2012 () / O R D E R PER BENCH, THE PRESENT APPEALS ARE FILED AGAINST THE ORDERS DT .01-02-2011 OF THE CIT(A)- 39, MUMBAI ON THE FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW PROPORTION ATE DEDUCTION OF 80IB(10) ON FLATS WHICH ARE HAVING BUILT UP AREA OF BELOW 1000 SQ. FT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE CONDITIONS OF 80IB(10) HAVE NOT BEEN FULFILLED FOR THE WHOLE PROJECT / BUILDING AND CANNOT BE APPROVED IN PIECEMEAL FOR SO ME FLATS IN THE BUILDING. THE APPELLANT CRAVES TO LEAVE TO ADD, TO AMEND AND / OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUND S STATED ABOVE, THE ORDER OF THE CIT(A)-39, MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER RESTORED. ITA NO. 3622/MUM/2011 ITA NO. 3623/MUM/2011 ITA NO. 3624/MUM/2011 M/S. NIRMAL LIFESTYLE LTD. 2 2. ASSESSEE-FIRM, ENGAGED IN THE BUSINESS OF CONSTRUCT ION OF RESIDENTIAL AND COMMERCIAL UNITS. A SEARCH AND SEIZURE ACTION U/S. 132 OF THE INCOME TAX ACT,1961 (ACT) WAS CARRIED OUT IN THE NIRMAL GROUP OF CASES, INCLUDING ASSESSEE, ON 15-11-2007. NOTICE U/S. 153A WAS ISSUED ON 17-10-2008 FOR THE A Y 2002-03 TO 2007-08. IN RESPONSE TO THAT, ASSESSEE FILED RETURNS OF INCOME AS UNDER: ASSESSMENTS WERE FINALIZED BY THE ASSESSING OFFICER (AO) U/S. 143(3) (3) R.W.S. 153(A) OF THE ACT. S.NO A.Y. INCOME DECLARED AS PER ORIGINAL RETURN (RS) DATE OF FILING OF ORIGINAL RETURN INCOME RETURNED U/S. 153A (RS.) DATE OF FILING 1. 2004 - 05 3,81,82,450 30 - 10 - 2004 3,81,82,450 19 - 11 - 2008 2. 2005 - 06 4,90,30,580 31 - 10 - 2005 4,90,30,579 19 - 11 - 2008 3. 2006-07 4,70,00,697 12-12-2006 4,70,00,697 19-11-2008 3. DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT T HE ASSESSEE HAD CONSTRUCTED VARIOUS HOUSING UNITS THAT HAD BUILT UP AREA OF MORE THAN 1,000 SQ. FT., AO DIS-ALLOWED CLAIM MADE BY THE ASSESSEE U/S. 80I B(10) OF THE ACT, AMOUNTING TO RS. 13.33 CRORES AS HE WAS OF THE OPINION THAT COND ITIONS OF THE SAID SECTION WERE NOT FULFILLED. AGGRIEVED BY THE ORDER OF THE AO, ASSES SEE FILED AN APPEAL BEFORE THE FAA. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A ND AO, FAA HELD THAT THE APPELLANT ITSELF HAD CONSTRUCTED FLATS WITH BUILT-U P AREA MORE THAN 1,000 SQ. FT., THAT WITH A PURPOSE TO CLAIM THE BENEFIT U/S. 80IB(10) A SSESSEE HAD SHOWN THE SINGLE FLAT AS SEVERAL FLATS (TWO OR THREE) AND HAD SHOWN EACH FLA T WITH BUILT-UP AREA LESS THAN 1,000 SQ. FT., THAT TRIBUNAL IN VARIOUS DECISIONS HAD HEL D THAT THE ASSESSEE WILL NOT LOSE BENEFIT U/S. 80IB(10) FOR WHOLE PROJECT IF A FEW OF THE FLATS WERE MORE THAN 1,000 SQ. FT., HE HELD THAT ASSESSEE WAS ELIGIBLE FOR DEDUCT ION 80IB(10) ON PROPORTIONAL BASIS FOR THE FLATS IN WHICH THE BUILT-UP AREA WAS LESS T HAN 1,000 SQ. FT., HE RELIED UPON THE ORDER OF THE ITAT IN THE CASE OF SHETH DEVEOPERS P . LTD., (ITA NO. 4545/M/2006 AY 2003-04 DT. 25-06-2009). HE DIRECTED THE AO TO RE-WORK THE DIS-ALLOWANCE U/S. 80IB(10) ACCORDING TO THE DECISION OF THE TRIBUNAL. 4. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) SUBMIT TED THAT DEDUCTION U/S. 80IB WAS AVAILABLE FOR PROJECT, THAT ONCE CONDITION S ALLOWED IN SECTION 80IB(10) WERE VIOLATED, ASSESSEE WAS NOT ENTITLED FOR ANY DEDUCTI ON, PROPORTIONATE BENEFIT U/S. 80IB SHOULD NOT BE GIVEN TO THE ASSESSEE-FIRM, THAT ASSE SSEE HAD ADMITTED THAT THERE WERE FLATS IN THE BUILDING CONSTRUCTED BY IT WHICH MEASU RED MORE THAN 1,000 SQ. FT., AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT ASSES SEE WAS ENTITLED FOR PROPORTIONATE BENEFIT, THAT CUSTOMERS HAD CONVERTED FLATS INTO BI GGER FLATS, THAT ASSESSEE HAD NOT CONSTRUCTED ANY FLAT MORE THAN 1,000 SQ. FT., THAT FAA WAS LEGALLY CORRECT IN ALLOWING PROPORTIONATE BENEFIT. HE RELIED UPON THE CASES OF SHETH DEVELOPERS (P) LTD., [33 SOT 277 (BOM)]; EKTA HOUSING P. LTD., MUMBAI (ITA N O. 3649/MUM/2009); JAHANGIR HC JAHANGIR, MUMBAI (ITA NO. 2050/MUM/2009 ); MR. JOHAR HASSAN ZOJWALLA(ITA NO. 5404/MUM/2008); SHREE BALAJI DEVEL OPERS (ITA NO. 2592/ MUM/ 2006); G.V. CORPORATION [38 SOT 174 (MUM)];HE ALSO RELIED UPON THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD., (BAHDL) DECIDED I N FAVOUR OF THE ASSESSEE BY THE CALCUTTA BENCH OF THE TRIBUNAL. HE FURTHER STA TED THAT APPEAL FILED BY THE REVENUE BEFORE THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF BAHDL WAS DISMISSED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROU GH THE MATERIAL PUT BEFORE US. IN THE CASE OF JAHANGIR HC JAHANGIR (ITA NO. 2 050/MUM/2009 AY 2005-06 WE ITA NO. 3622/MUM/2011 ITA NO. 3623/MUM/2011 ITA NO. 3624/MUM/2011 M/S. NIRMAL LIFESTYLE LTD. 3 HAVE, ON 16-05-2012, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. IN THAT CASE, WE HAVE RELIED UPON THE ORDER OF THE NAGPUR BENCH IN T HE CASE OF AIR DEVELOPERS [122 ITD125 (NAG)] AND THIRD MEMBER DECISION IN THE CASE OF SANGHVI & DOSHI ENTERPRISES, CHENNAI BENCH (131ITD151).WE HAD ALSO DISCUSSED THE CASE OF BAHDL, WHILE DECIDING THE ISSUE. 6. AFTER REFERRING TO THESE DECISIONS, FINALLY, IT WAS HELD THAT ASSESSEE WAS ENTITLED TO PROPORTIONATE ALLOWANCE U/S. 80IB(10) OF THE ACT . WE DO NOT SEE ANY REASON TO DISAGREE WITH OUR EARLIER ORDER.UPHOLDING THE ORDER OF THE FAA, WE REJECT THE GROUNDS OF APPEAL FILED BY THE AO. APPEALS FILED BY THE AO STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH OCTOBER, 2012. SD/- SD/ - ( . . / B.R. MITTAL ) ( / RAJENDRA ) (* / JUDICIAL MEMBER % (* / ACCOUNTANT MEMBER MUMBAI, +( DATE: 19 TH OCTOBER, 2012 TNMM () () () () ' '' ' #, #, #, #, -,# -,# -,# -,# / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR B BENCH, ITAT, MUMBAI 6. GUARD FILE !,# # //TRUE COPY// () () () () / BY ORDER, . .. . / / / / / DY./ASSTT. REGISTRAR , / ITAT, MUMBAI