DOSTI ASSOCIATES, MUMBAI V. DCIT CEN CIR 1, MUMBAI

ITA 3917/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8946 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-08-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 14-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K MEHTA
• Assessee Lawyers: N JAYENDRAN

Judgement Text

PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI G. E. VEERABHADRAPPA, PRESIDENT & SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 3917 & 3918/MUM/2010 ASSESSMENT YEAR : 2005-06 & 2006-07 M/S. DOSTI ASSOCIATES C/O. M/S. NATVARLAL VEPARI & CO. ORICON HOUSE, 4 TH FLOOR, 12, K. DUBASH MARG, MUMBAI-400 023 PAN NO: AACFD 1616 P VS. DCIT, CENTRAL CIRCLE 1, 9 TH FLOOR, CGO ANNEXE BLDG., M.K. ROAD, MUMBAI-400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N. JAYENDRAN RESPONDENT BY : SHRI N. K. MEHTA DATE OF HEARING: 08.08.2012 DATE OF PRONOUNCEMENT: 05.09.2012 O R D E R PER VIVEK VARMA, J.M. : THE TWO APPEALS EMANATE FROM THE ORDERS OF CIT(A)- 36, MUMBAI BOTH DATED 16.02.2010, WHEREIN THE ASSESSEE HAS TAKEN TH E FOLLOWING GROUNDS, WHICH ARE IDENTICAL IN BOTH THE YEARS :- 1. THE COMMISSIONER OF INCOME-TAX (APPEALS) [CIT(A )] FAILED TO ADJUDICATE GROUND NO. 1 & 2 OF GROUNDS OF APPEALS. 2. THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF I NCOME-TAX, CENTRAL CIRCLE 1, MUMBAI (AO), U/S.143(3) R.W.S 153 CIT(A) OF THE ACT, IS BAD- IN-LAW, AS NO ASSET OR BOOKS OF ACCOUNTS OR DOCUMEN TS OF THE APPELLANT WERE SEIZED DURING THE SEARCH ACTION U/S.132 OF THE ACT, IN THE CASE OF SHRI KISHAN C. GORADIA AND OTHERS. 3. THE APPELLANT SUBMITS THAT BASIC REQUISITE FOR I SSUE OF NOTICE U/S.153C IS NOT SATISFIED AND THEREFORE ASSESSMENT FRAMED IN PU RSUANCE OF SAID NOTICE IS WITHOUT JURISDICTION AND BAD-IN-LAW. M/S.DOSTI ASSOCIATES ITA NOS.3917 & 39185/MUM/2010 PAGE 2 OF 5 4. (I) THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE A.O. IN RESPECT OF DISALLOWANCE OF CLAIM OF DEDUCTION OF `. 38,76,647/- U/S.80IB(10) OF THE ACT, REPRESENTING PROFIT DERIVED BY THE APPELLANT F IRM FROM SALE OF UNSOLD STOCK OF ITS HOUSING PROJECT AT DOSTI ESTATE AND PROJECT IRIS/LILY AT DOSTI ACRES, WADALA, WHICH HAVE BEEN APPROVED AND C OMPLETED BEFORE 01.04.2005 AND SATISFY THE PROVISIONS OF THE SECTIO N 80IB(10) ON WHICH DEDUCTION U/S.80IB(10) HAS BEEN ALLOWED FRO THE EAR LIER ASSESSMENT YEARS. (II) THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANC E OF CLAIM OF THE APPELLANT U/S.80IB(10) IN RESPECT OF PROFIT DERIVED FROM SALE OF UNSOLD STOCK OF ITS PROJECTS AT DOSTI ESTATE AND DOSIT ACR ES ON THE GROUND THAT THE AMENDED PROVISIONS OF SECTION 80IB(10) WOULD AP PLY TO THE CASE OF THE APPELLANT EVEN THOUGH THE PROJECT WAS CONCEPTUA LIZED AND COMPLETED BEFORE THE AMENDMENTS CARRIED OUT BY THE FINANCE (NO.2) ACT 2004 W.E.F. 01.04.2005. 5. EACH OF THE ABOVE GROUNDS IS WITHOUT PREJUDICE T O ONE ANOTHER. 6. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, VAR Y OR CANCEL ANY OF THE ABOVE GROUNDS OF APPEAL. 2. AT THE TIME OF HEARING, THE AR CONCEDED GROUNDS NO. 2 & 3 AS NOT PRESSED. SINCE THE GROUNDS ARE NOT PRESSED, HENCE, THESE ARE DISMISSED. 3. THE ONLY EFFECTIVE GROUND LEFT FOR OUR CONSIDERA TION IS GROUND NO. 4 WHICH PERTAINS TO THE DISALLOWANCE OF DEDUCTION CLAIMED U /S 80IB(10). 4. THE FACTS OF THE CASE AS CULLED OUT FROM THE IMP UGNED ORDER IS THAT THE ASSESSEE HAD NOT FULLY COMPLIED WITH THE PROVISIONS OF SECTION 80IB(10) AND HENCE THE DEDUCTION AS CLAIMED HAD BEEN DISALLOWED. ACCORDING TO THE OBSERVATIONS OF REVENUE AUTHORITY, FOR THE HOUSING PROJECTS AT DOSTI ESTATE AND IRIS/LILY AT DOSTI ACRES AT WADALA, THE PROVISIONS U/S 80IB(10) HAD NOT BEEN COMPLIED WITH. 5. THE CIT(A) SUSTAINED THE ORDERS OF THE A.O. 6. AT THE TIME OF HEARING BEFORE US, THE AR POINTED OUT THAT SO FAR AS PROJECTS AT DOSTI ESTATES AND IRIS/LILY AT DOSTI AC RES AT WADALA ARE CONCERNED, M/S.DOSTI ASSOCIATES ITA NOS.3917 & 39185/MUM/2010 PAGE 3 OF 5 WHICH ARE IMPUGNED HERE, HAD BEEN APPROVED ON 09.07 .2002 AND 17.10.2002 AND WERE COMPLETED MUCH BEFORE 01.04.2005. IT WAS O NLY THE SALE OF SOME UNSOLD STOCK WHICH REMAINED AND THE REASON FOR DENI AL AS PER CIT(A) ORDER ARE THE PROJECTS OTHER THEN THE ONE MENTIONED ABOVE. TH E AR FURTHER POINTED OUT THAT THE TWO PROJECTS APPROPRIATE DEDUCTION ON THE SAME HAD BEEN CONSIDERED AND HAD BEEN ALLOWED IN THE ABOVE TWO PRECEDING YEA RS, I.E. ASSESSMENT YEAR 2003-04 AND 2004-05. IN THAT SENSE, IT WAS TOTALLY OUT OF PLACE TO NOT ALLOW THE CLAIM IN YEAR UNDER CONSIDERATION (PLACED COPY OF A SSESSMENT ORDER FOR THE A.Y. 2004-05). 7. THE AR ALSO PLACED COPY OF ORDER OF THE CO-ORDIN ATE BENCH IN THE CASE OF HARWARE CONSTRUCTIONS PVT. LTD. IN ITA NO. 5601/MUM /2009 (AND OTHER ITA NOS.), WHEREIN, RELIANCE WAS PLACED ON THE DECISION OF SPECIAL BENCH IN BRAHMA ASSOCIATES, REPORTED IN 122 TTJ 443 AND THE CASE OF GIRDHARILAL K LULLA IN ITA NO. 4207/MUM/2009, WHEREIN IT WAS HELD THAT FOR THE APPROVALS OF PROJECTS PRIOR TO 01.04.2005, THE OLD LAW SHALL ONLY APPLY. IN THI S CASE, THE RATIO LAID DOWN BY THE COORDINATE BENCHES AT MUMBAI, IN THE CASES OF S AROJ SALES ORGANISATION (WHERE ONE OF US WAS A PARTY), HIRANANDANI AKRUTI J V AND SHETH DEVELOPERS HAVE BEEN CONSIDERED AND FOLLOWED. 8. IN THE INSTANT CASE, IT IS UNDISPUTED THAT THE P ROJECTS HAD BEEN APPROVED ON 08.07.2002 & 17.10.2002, I.E. MUCH BEFORE THE CH ANGE OF LAW AND THE PROJECTS HAD BEEN COMPLETED AS WELL PRIOR TO THE CU T OFF DATE OF 01.04.2005, THEREFORE, WE DO NOT FIND ANY REASON TO SUSTAIN THE DISALLOWANCES. THEREFORE, M/S.DOSTI ASSOCIATES ITA NOS.3917 & 39185/MUM/2010 PAGE 4 OF 5 RESPECTFULLY FOLLOWING THE DECISIONS OF THE CO-ORDI NATE BENCHES IN MUMBAI, WE SET ASIDE THE ORDERS OF THE CIT(A) IN BOTH THE YEAR S UNDER CONSIDERATION AND DIRECT THE A.O. TO ALLOW THE CLAIM OF DEDUCTION U/S 80IB(10) AS CLAIMED. 9. THE APPEALS FILED BY THE ASSESSEE FOR THE A.Y. 2 005-06 & 2006-07 ARE THUS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 05/09/2012. SD/- SD/- (G. E. VEERABHADRAPPA) (VIVEK VARMA) PRESIDENT JUDICIAL MEMBER MUMBAI: 05/09/2012 ROSHANI COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY/ ASST.REGISTRAR,ITAT MUMBAI.