The ITO, Ward-2, Bharuch V. M/s. Shakti Builders, Bharuch

ITA 3697/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9157 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-12-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 18-09-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MATHIVANAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL, VP AND BHAVNESH SAINI , JM) ITA NO.3697/AHD/2007 A. Y.: 2004-05 THE INCOME TAX OFFICER, WARD -2, BANK OF BARODA BUILDING, STATION ROAD, BHARUCH VS M/S. SHAKTI BUILDERS, SRIRANG PARK SOCIETY, B/H. SHANTI PARK, GNFC TOWNSHIP ROAD, BHARUCH PA NO. -- (APPELLANT) (RESPONDENT) APPELLANT BY SHRI MATHIVANAN, DR RESPONDENT BY SHRI MILIN MEHTA, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI, BARODA DATED 31 -07-2007 FOR ASSESSMENT YEAR 2004-05, CHALLENGING THE ORDER OF T HE LEARNED CIT(A) IN ALLOWING DEDUCTION U/S 80-IB (10) OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT AND CONSTRUCTION OF HO USING PROJECT AND HAD UNDERTAKEN THE PROJECT FOR LAND DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT UNDER THE NAME AND STYLE OF SRIRANG PARK SOCIETY, GNFC TOWNSHIP ROAD, BHARUCH. AS PER THE AUDIT REPORT, TH E SIZE OF THE PLOT OF LAND OF THE PROJECT UNDERTAKEN BY THE ASSESSEE IS 1 0740.38 SQM I.E. 2.35 ACRES. THE ASSESSEE ENTERED INTO DEVELOPMENT AGREEM ENT WITH THE ORIGINAL LAND OWNERS AND OTHERS AND ACQUIRED DEVELO PMENT RIGHT IN RESPECT OF THE LAND. THE ASSESSEE CLAIMED THAT IT H AD BECOME ENTITLED FOR DEDUCTION. HOWEVER, THE APPROVAL FROM THE GRAM PANC HAYAT WAS OBTAINED IN THE NAME OF THE ORIGINAL LAND OWNERS. T HE AO ACCORDINGLY, DISALLOWED THE CLAIM OF THE ASSESSEE U/S 80 IB(10) OF THE IT ACT. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LEARNED CIT(A) AND THE ITA NO.3697/AHD/2007 ITO, W-2, BHARUCH VS M/S. SHAKTI BUILDERS 2 ALTERNATE PLEA OF THE ASSESSEE WAS AGAINST NOT ALLO WING THE PROFIT ATTRIBUTABLE TO THE SALE OF UNUTILIZED FSI. THE LEA RNED CIT(A) DECIDED BOTH THE ISSUES TOGETHER. IT WAS SUBMITTED BEFORE THE LE ARNED CIT(A) THAT SIMILAR ISSUE CAME UP BEFORE THE ITAT AHMEDABAD BEN CH IN THE CASE OF RADHE BUILDERS AND OTHERS AND ACCORDING TO THAT IT WAS NOT NECESSARY FOR THE ASSESSEE TO OWN THE LAND. THEREFORE, NO DEDUCTI ON COULD BE DISALLOWED. THE LEARNED CIT(A) REPRODUCED THE ABOVE DECISION IN THE IMPUGNED ORDER IN WHICH IT WAS HELD THAT THE REQUI REMENT FOR CLAIMING DEDUCTION IS THAT SUCH A UNDERTAKING MUST DEVELOP A ND BUILD HOUSING PROJECT, BE IT ON THEIR OWN LAND OR ON THE LAND OF OTHERS AND FOR WHICH A TRIPARTITE AGREEMENT HAS BEEN ENTERED INTO FOR DEVE LOPING AND BUILDING HOUSING PROJECT OR BE THE ASSESSEE A CONTRACTOR FOR DEVELOPING AND BUILDING HOUSING PROJECT. WITH REGARD TO UNUTILIZED FSI, THE TRIBUNAL HELD THAT THERE IS NO REQUIREMENT AS TO THE FSI UNDER TH E SCHEME OF PROVISIONS OF SECTION 80 IB (1) OF THE IT ACT. IT WAS HELD THA T SUCH A CONCEPT OF ELEMENT OF UNUTILIZED FSI SOLD IS IMAGINARY AND BAS ED ON SURMISES AND CONJECTURES. THE LEARNED CIT(A) FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL DIRECTED THE AO TO DELETE THE DISALLOWANCE . 3. THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES STATED THAT THE ISSUE IS COVERED IN FAVOR OF THE ASSESSEE BY THE JU DGMENT OF THE ITAT AHMEDABAD BENCH IN THE CASE OF RADHE BUILDERS AND O THER (SUPRA). 4. IN VIEW OF THE ABOVE AND IN THE ABSENCE OF ANY M ATERIAL AGAINST THE FINDING OF THE LEARNED CIT(A), WE ARE OF THE VIEW T HAT NO INFERENCE IS CALLED FOR IN THE MATTER. THE ISSUES RAISED IN THE DEPARTM ENTAL APPEAL HAVE BEEN DEALT WITH BY THE LEARNED CIT(A) ON FACTS BY FOLLOW ING THE ORDER OF THE TRIBUNAL. IN THE ABSENCE OF ANY CHALLENGE TO THE SA ME AND IN THE ABSENCE OF ANY ADVERSE MATERIAL ON RECORD, WE DO NOT FIND A NY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A). WE ACCORDINGLY, DO NOT FIND ITA NO.3697/AHD/2007 ITO, W-2, BHARUCH VS M/S. SHAKTI BUILDERS 3 ANY MERIT IN THE DEPARTMENTAL APPEAL. THE SAME IS A CCORDINGLY DISMISSED. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED ON 2-12-2010 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 2-12-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD