Assistant Commissioner of Income-tax, V. Kunal Shelters Pvt. Ltd., Pune

ITA 37/PUN/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7473 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 08-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP GARG
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NOS. 35, 36 & 37/PUN/2015 $& ' !(' / ASSESSMENT YEARS : 2006-07, 2007-08 & 2008-09 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 14, PUNE ....... / APPELLANT )& /VS. KUNAL SHELTERS PVT. LTD., KUNAL HOUSE, OPP. KAMLA NEHRU PARK, OFF PRABHAT ROAD, SHIVAJINAGAR, PUNE - 411005 PAN : AAACK8711F / RESPONDENT ASSESSEE BY : SHRI SUHAS BORA REVENUE BY : SHRI SANDEEP GARG / DATE OF HEARING : 05-01-2017 / DATE OF PRONOUNCEMENT : 06-01-2017 * / ORDER PER VIKAS AWASTHY, JM : THESE THREE APPEALS BY THE REVENUE ARE DIRECTED AGAIN ST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DATE D 28-03-2014 COMMON FOR THE ASSESSMENT YEARS 2006-07, 2 007-08 AND 2008-09. 2 ITA NOS. 35, 36 & 37/PUN/2015 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE COMPANY IS ENGAGED IN EXECUTION OF HOUSING PROJ ECTS AND REAL ESTATE DEVELOPMENT. IN THE ASSESSMENT YEARS UNDER AP PEAL, THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB(10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) IN RESPECT OF ITS TH REE HOUSING PROJECTS NAMELY; KUNAL ICON, KUNAL ESTATE AND KUNAL PURA M. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS IN THE T HREE ASSESSMENT YEARS UNDER APPEAL, THE ASSESSING OFFICER DISALLOWED THE A SSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) IN RESPECT OF AFOREMENTIONED PROJECT S. AGGRIEVED BY THE ASSESSMENT ORDERS, THE ASSESSEE FILED A PPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE RES PECTIVE ASSESSMENT YEARS. THE COMMISSIONER OF INCOME TAX (APPEALS ) ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND ALLOWED THE DEDUCT ION CLAIMED BY THE ASSESSEE U/S. 80IB(10) BY FOLLOWING THE ORDER OF TRIBUNA L IN ASSESSEES OWN CASE IN ASSESSMENT YEARS 2004-05 AND 2005-06 IN ITA NOS. 1420/PN/2007 AND 220/PN/2009 DECIDED ON 30-08-20 13. NOW, THE DEPARTMENT IS IN APPEAL AGAINST THE ORDER OF COMMISSIO NER OF INCOME TAX (APPEALS) IN GRANTING DEDUCTION U/S. 80IB(10) TO THE ASSESSEE. 3. THE DEPARTMENT IN APPEAL FOR THE ASSESSMENT YEAR 20 06-07 HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TA X (APPEALS)-1, PUNE CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-1, PUNE GROSSLY ERRED IN ON FACTS AND LAW IN ALLOWING THE CLAIM U/S 801B( 10) OF THE INCOME TAX ACT, 1961. 3 ITA NOS. 35, 36 & 37/PUN/2015 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALSL-I, PUNE HAS ERRED ON FACTS AND IN LAW IN ALLOWING PRO-RATA CLAIM OF SECT ION 801B(10) WITH REFERENCE TO THE AREA OF FLATS WHICH ARE 1500 SQ FT IN THE HOUSING PROJECT. 4. WITHOUT PREJUDICE TO ABOVE, THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS)-I, PUNE HAS ERRED ON FACTS AND IN LAW IN ALLOWING PRO- RATA/PROPORTIONATE CLAIM U/S 801B(10) WITH REFERENC E TO THE RESIDENTIAL PORTION OF THE HOUSING PROJECT. 5. FOR THE FACTS AND SUCH OTHER REASONS AS MAY BE URGE D AT THE TIME OF HEARING, THE ORDER OF THE LD. COMMISSIONER OF INCOM E-TAX (APPEALS)-I, PUNE MAY BE VACATED AND THAT OF THE ASSESSING OFFIC ER BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL DURING THE COURSE OF APPELL ATE PROCEEDINGS BEFORE THE HONBLE TRIBUNAL. 4. IN ASSESSMENT YEAR 2007-08 THE DEPARTMENT HAS AS SAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THE FOLLOWING GROUNDS : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TA X (APPEALS)-1, PUNE CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS )-1 , PUNE GROSSLY ERRED IN ON FACTS AND LAW IN ALLOWING THE CLAIM U/S . 80IB(10) OF THE INCOME TAX ACT, 1961. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE HAS ERRED IN INTERPRETING THE PROVISIONS OF SECTION 80IB(10)(C). 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE HAS ERRED IN INTERPRETING THE PROVISIONS OF SECTION 80IB(10) PER TAINING TO COMPLETION CERTIFICATE AND THEREBY ALLOWING DEDUCTION TO THE A SSESSEE U/S 80IB(10). 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE HAS ERRED ON FACTS AND IN LAW IN ALLOWING PRO-RATA CLAIM OF SECT ION 80IB(10) WITH REFERENCE TO THE AREA OF FLATS WHICH ARE 1500 SQ FT IN THE HOUSING PROJECT. 6. WITHOUT PREJUDICE TO ABOVE, THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS)-I, PUNE HAS ERRED ON FACTS AND IN LAW IN ALLOWING PRO- 4 ITA NOS. 35, 36 & 37/PUN/2015 RATA/PROPORTIONATE CLAIM U/S 80IB(10 WITH REFERENCE TO THE RESIDENTIAL PORTION OF THE HOUSING PROJECT. 7. FOR THE FACTS AND SUCH OTHER REASONS AS MAY BE URGE D AT THE TIME OF HEARING, THE ORDER OF THE LD. COMMISSIONER OF INCOM E-TAX (APPEALS)-I, PUNE MAY BE VACATED AND THAT OF THE ASSESSING OFFIC ER BE RESTORED. 8. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL DURING THE COURSE OF APPELL ATE PROCEEDINGS BEFORE THE HONBLE TRIBUNAL. SIMILAR GROUNDS HAVE BEEN RAISED BY THE DEPARTMENT IN TH E APPEAL FOR ASSESSMENT YEAR 2008-09. 5. SHRI SUHAS BORA APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED AT THE OUTSET THAT THE ASSESSEES CLAIM OF DEDUCTION U/ S. 80IB(10) WAS DISALLOWED BY THE ASSESSING OFFICER FOR SIMILAR REASONS IN ASSE SSMENT YEARS 2004-05 AND 2005-06. THE MATTER TRAVELLED UP TO THE TRIBUNAL. THE TRIBUNAL ALLOWED THE APPEALS OF ASSESSEE BY HOLDING T HAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) IN RESPEC T OF ITS HOUSING PROJECTS WHICH ARE SUBJECT MATTER OF PRESENT S ET OF APPEALS AS WELL. ON SIMILAR SET OF FACTS THE ASSESSING OFFICER HAS DISALLOWE D DEDUCTION U/S. 80IB(10) IN ASSESSMENT YEARS 2006-07, 2007 -08 AND 2008-09. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS FOLLO WED THE ORDER OF TRIBUNAL AND HAS GRANTED RELIEF TO THE ASSESSEE. THE LD. AR VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOM E TAX (APPEALS). THE LD. AR FURTHER POINTED THAT IN THE PRESENT SET OF APPEALS THERE HAS BEEN NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE . 6. ON THE OTHER HAND SHRI SANDEEP GARG REPRESENTING TH E DEPARTMENT PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER AND RESTORING THE FINDINGS OF ASSESSING OFFICER. THE LD. DR SUBMITTED THAT T HE 5 ITA NOS. 35, 36 & 37/PUN/2015 ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB(10) WITHOUT COMP LYING THE CONDITIONS LAID DOWN IN THE SAID SECTION. THE HOUSING PROJ ECTS ON WHICH THE ASSESSEE HAS CLAIMED DEDUCTION HAVE FAILED TO QU ALIFY THE CONDITIONS SET OUT IN SECTION 80IB(10) OF THE ACT. THE COM MERCIAL AREA IN THE HOUSING PROJECTS IS MORE THAN THE STATUTORY LIMIT PRESCRIBED IN CLAUSE (D) OF SECTION 80IB(10), THE BUILT UP AREA OF SOME OF T HE FLATS IS MORE THAN THE LIMIT PRESCRIBED UNDER CLAUSE (C) OF SECTION 8 0IB(10), COMPLETION CERTIFICATE IN RESPECT OF SOME OF THE FLATS IS STILL PENDING, THUS, THE HOUSING PROJECTS ARE NOT ELIGIBLE TO CLAIM DEDUC TION U/S. 80IB(10) OF THE ACT. HOWEVER, THE LD. DR FAIRLY ADMITTED TH AT THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS. 1420/PN/2007 AND 220/PN/2009 FOR ASSESSMENT YEARS 2004-05 AND 2005-06 HAS HELD THAT THE PROJECTS KUNAL ICON AND KUNAL PURAM ARE ELIGIBLE TO CLAIM DEDUCTION AND THE COMMISSIONER OF INCOME TAX (APPEALS) HAS FOLLOWED THE EARLIER ORDER OF TRIBUNAL WHILE GRANTING RELIEF TO THE ASSESSEE. 7. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB(10) OF THE AC T IN RESPECT OF HOUSING PROJECTS KUNAL ICON, KUNAL ESTATE AND KUNAL PURA M IN THE ASSESSMENT YEARS UNDER APPEAL ARE TABULATED HERE-IN-BELOW : ASSESSMENT YEAR PROJECT DEDUCTION CLAIMED U/S. 80IB(10) 2006 - 07 AGGREGATE DEDUCTION IN RESPECT OF HOUSING PROJECTS ` `` ` 4,12,10,214/ - 2007 - 08 KUNAL ICON ` 6,59,27,060/ - KUNAL ESTATE ` 2,20,667/ - KUNAL PURAM NIL TOTAL ` `` ` 6,61,47,728/ - 2008 - 09 KUNAL ICON ` 9,55,62,764/ - KUNAL ESTATE ` 3,03,722/ - KUNAL PURAM ` 1,96,281 TOTAL ` `` ` 9,60,62,767/ - 6 ITA NOS. 35, 36 & 37/PUN/2015 8. THE ASSESSING OFFICER REJECTED THE CLAIM OF ASSESSEE U/S . 80IB(10) INTER ALIA ON THE GROUNDS THAT IN THE CASE OF PROJECT KU NAL ICON, IT WAS FOUND THAT CERTAIN RESIDENTIAL UNITS OF THE SAID PROJECT EX CEEDED THE MAXIMUM BUILT UP AREA OF 1500 SQ. FT., CONSTRUCTION OF COMME RCIAL SPACE WAS IN EXCESS OF LIMIT PRESCRIBED AND PHASE C AND D OF THE PROJECT WAS STILL UNDER CONSTRUCTION. IN THE CASE OF KU NAL ESTATE AND KUNAL PURAM, IT WAS FOUND THAT THE COMMERCIAL AREA IN THE SAID PROJECTS EXCEEDED THE MAXIMUM LIMIT OF 5%. 9. DURING THE FIRST APPELLATE PROCEEDINGS THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF DEDUCTION U/S. 80IB (10) BY FOLLOWING THE ORDER OF TRIBUNAL IN ITA NOS. 1420/PN/2007 AN D 220/PN/2009 (SUPRA). ALTHOUGH, THE ORDER OF TRIBUNAL PERT AIN TO HOUSING PROJECTS KUNAL ICON AND KUNAL PURAM, SINCE, THE FA CTS IN RESPECT OF KUNAL ESTATE ARE SIMILAR AND THE DISALLOWANCES O F DEDUCTION U/S. 80IB(10) WAS MADE FOR THE SIMILAR REASONS THE COMMISSIO NER OF INCOME TAX (APPEALS) GRANTED RELIEF OF DEDUCTION U/S. 80IB(10 ) IN RESPECT OF PROJECT KUNAL ESTATE ON THE SAME ANALOGY. THE COMMISSIONER OF INCOME TAX (APPEALS) IN DETAILED AND WELL REAS ONED ORDER BY PLACING RELIANCE ON THE ORDER OF TRIBUNAL HAS G RANTED RELIEF TO THE ASSESSEE. FOR THE SAKE OF BREVITY WE ARE NOT REPR ODUCING DETAILED FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS). HOWEVE R, FOR QUICK REFERENCE CONCLUDING PARA OF COMMISSIONER OF INCOME T AX (APPEALS) WHEREIN HE HAS SUMMARIZED THE ISSUES AND THE RE LIEF GRANTED IS REPRODUCED HERE-IN-UNDER : 4.4 TO SUM-UP, THE DECISION ON THE ALLEGED CONTRAVENTIONS OF THE VARIOUS CONDITIONS LAID DOWN IN SEC. 80IB(10) AS PO INTED OUT BY THE ASSESSING OFFICER, IS SUMMARIZED AS UNDER:- 7 ITA NOS. 35, 36 & 37/PUN/2015 CONTRAVENTION PROJECTS KUNAL ESTATE KUNAL PURAM KUNAL ICON CONSTRUCTION OF COMMERCIAL SPACE IN EXCESS OF THE LIMIT PRESCRIBED; THIS CONDITION IS HELD TO BE NOT ATTRACTED IN RESPE CT OF ALL THE THREE PROJECTS AS THE PROJECTS WERE COMMENCED PR IOR TO 01/04/2005 I.E. BEFORE INSERTION OF CLAUSE (D) OF S EC. 80IB(10), PLACING RESTRICTION ON CONSTRUCTION OF CO MMERCIAL SPACE IN THE HOUSING PROJECT. INCIDENCE OF BUILT- UP AREA OF CERTAIN DWELLING UNITS EXCEEDING THE MAXIMUM LIMIT PRESCRIBED OF 1500 SQ. FT - - A. O. IS DIRECTED TO FOLLOW THE SAME CONCLUSION THAT WOULD BE ARRIVED AT FOLLOWING THE DIRECTION OF THE ITAT ON THE ISSUE FOR THE A.Y. 2004-05 & 2005-06 FAILURE TO COMPLETE THE PROJECTS / OBTAIN COMPLETION CERTIFICATES WITHIN THE TIME ALLOWED BY THE STATUTE. A.O. IS DIRECTED TO FOLLOW THE SAME ACTION THAT WOU LD BE TAKEN AFTER CARRYING OUT THE EXERCISE AND ALLOW THE DEDUCTION IN THE MANNER AS DESCRIBED IN THE RELEVAN T PARAGRAPHS OF THE ORDER OF THE ITAT FOR A.Y. 2004-0 5 AND 2005-06, AS EXTRACTED IN PARA 4.3.1 HEREINABOVE. SI MILARLY, IF THE UNITS IN SECTORS C AND D OF KUNAL ICON WERE COMPLETE AND POSSESSION THEREOF WAS HANDED OVER TO THE CUSTO MERS ON OR BEFORE 31.03.2008, APPELLANT'S CLAIM SHOULD B E ALLOWED. IN CASE, PLEA OF THE APPELLANT IS NOT FOUN D CORRECT THEN DEDUCTION U/S. 80IB(10) OF THE ACT SHOULD BE A LLOWED ON PRO-RATA BASIS. 4.4.1 RESPECTFULLY FOLLOWING THE DECISIONS OF THE I TAT ON THE ALLEGED CONTRAVENTIONS OF THE VARIOUS CONDITIONS LAID DOWN U/S 801B(10), THE ASSESSING OFFICER IS DIRECTED TO GRANT DEDUCTION U/ S 80IB(10) TO ALL THE THREE PROJECTS IN QUESTION IN THE ASSTT. YEARS UNDE R APPEAL AS INDICATED IN THE CHART BROUGHT OUT ABOVE. SUBJECT TO THE ABOV E, THE VARIOUS GROUNDS RAISED BY THE APPELLANT ON THE ISSUE STAND PARTLY ALLOWED. 10. THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE FINDING S OF TRIBUNAL IN ASSESSEES OWN CASE IN THE ASSESSMENT YEARS 2004-05 AND 2005-06. THERE IS NO MATERIAL ON RECORD TO SHOW ANY D ISTINGUISHABLE FACTS AND CIRCUMSTANCES IN THE ASSESSMENT YEARS UNDER APPEAL FROM THAT OF ASSESSMENT YEARS 2004-05 AND 2005-06. 8 ITA NOS. 35, 36 & 37/PUN/2015 11. THUS, IN VIEW OF THE WELL REASONED AND UNREBUTTED FINDING S OF THE COMMISSIONER OF INCOME TAX (APPEALS), WE UPHOLD THE IMPUGNE D ORDER AND DISMISS THE APPEALS OF THE DEPARTMENT. 12. IN THE RESULT, ALL THE THREE APPEALS OF THE REVENUE ARE DISMISSED . ORDER PRONOUNCED ON FRIDAY, THE 06 TH DAY OF JANUARY, 2017. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 06 TH JANUARY, 2017 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, PUNE 4. ' / THE CIT-I, PUNE 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE