M/s. Khandge Mehta Associates, Pune V. ITO Wd.-8(2), Pune

ITA 399/PUN/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4340 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 29-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C SARANGI
• Assessee Lawyers: N W KHARE

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 399/PN/2012 (ASSTT.YEAR : 2008-09) KHANDGE MEHTA ASSOCIATES, SHOP NO.7, PURUSHOTTAM NIWAS, MALI ALI, TALEGAON DABHADE, TALUKA MAVAL, PUNE 410506 .. APPELLANT PAN NO.AAOFS 1009H VS. ITO WARD-8(2), PUNE .. RESPONDENT APPELLANT BY : SHRI N.W. KHARE RESPONDENT BY : SHRI S.C. SARANGI DATE OF HEARING : 07-05-2013 DATE OF PRONOUNCEMENT : 14 -05-2013 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 22-12-2011 OF THE CIT(A)-V, PUNE RELATING TO ASSESS MENT YEAR 2008-09. 2. DENIAL OF DEDUCTION OF RS.63,05,239/- U/S.80IB(1 0) BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS THE ONLY ISS UE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPMENT OF LAND, CON STRUCTION OF BUILDING AND SALE THEREOF. IT FILED RETURN OF INCOME ON 29- 09-2008 DECLARING NIL INCOME AFTER CLAIMING DEDUCTION OF RS.63,05,239/- U /S.80IB(10). THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS UNDER TAKEN DEVELOPMENT AND CONSTRUCTION OF SHANTAI NAGARI PROJECT IN PART O F SURVEY NO.380, OPP : TALEGAON DABHADE MUNICIPAL COUNCIL, TAL : MAVAL DIS T, PUNE. IT CONSISTS OF 2 63 RESIDENTIAL UNITS AND 12 SHOPS. THE SIZE OF THE PLOT ON WHICH SAID HOUSING PROJECT IS UNDERTAKEN IS 5824.90 SQ.MTRS. THE HOUS ING PROJECT HAS BEEN SANCTIONED BY THE TALAGAON MUNICIPAL COUNCIL AND TH E DATE OF COMMENCEMENT OF THE HOUSING PROJECT IS 06-01-2005. 4. THE ASSESSING OFFICER FOLLOWING THE ORDER FOR A. Y. 2006-07 IN THE CASE OF THE ASSESSEE DENIED THE DEDUCTION U/S.80IB( 10) CLAIMED BY THE ASSESSEE ON THE GROUND THAT THE PROJECT SHANTAI NA GARI IS NOT AN ELIGIBLE PROJECT FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE INCOME TAX ACT. IN APPEAL THE LD. CIT(A) FOLLOWING HIS ORDER FOR A.Y. 2006-07 UPHELD THE ACTION OF THE ASSESSING OFFICER AND REJECTED THE C LAIM OF THE ASSESSEE. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSE E IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET F ILED A COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 200 6-07 AND SUBMITTED THAT THE TRIBUNAL HAS ALLOWED THE CLAIM OF DEDUCTION U/S .80IB(10) VIDE ITA NO.558/PN/2011 ORDER DATED 31-12-2012 FOR THE A.Y. 2006-07. SINCE THE ASSESSING OFFICER AND THE CIT(A) HAVE RELIED ON THE ORDER FOR A.Y. 2006-07 WHILE DENYING DEDUCTION U/S.80IB(10) AND SINCE THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEE, THEREFORE, THIS BEING A COVE RED MATTER IN FAVOUR OF THE ASSESSEE THE GROUND RAISED BY THE ASSESSEE SHOULD B E ALLOWED. 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND WHILE SUPPORTING THE ORDER OF THE ASSESSING OFFICER AND C IT(A) FAIRLY CONCEDED THAT THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR O F THE ASSESSEE. 3 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE ASSESSING OFFICER, FOLLOWING THE ORDER FOR A.Y. 2006-07 IN THE CASE OF THE ASSESSEE, DENIED THE CLAIM OF DEDUCTION U/S.80IB(10). WE FIND THE LD. C IT(A) FOLLOWING HIS ORDER FOR A.Y. 2006-07 IN ASSESSEES OWN CASE UPHEL D THE ACTION OF THE ASSESSING OFFICER AND REJECTED THE CLAIM OF DEDUCTI ON U/S.80IB(10) MADE BY THE ASSESSEE. WE FIND THE TRIBUNAL IN ASSESSEES O WN CASE FOR A.Y. 2006-07 IN ITA NO.558/PN/2011 ORDER DATED 31-12-2012 HAS AL LOWED THE CLAIM OF DEDUCTION U/S.80IB(10) MADE BY THE ASSESSEE BY HOLD ING AS UNDER : 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PART IES AND PERUSED THE RECORD. THE LD. COUNSEL SUBMITS THAT IF THE PROJEC T IS APPROVED ON PIECE-MEAL BASIS, THAT CANNOT BE REASON FOR NOT CONSIDERING TH E AREA OF ENTIRE PLOT WHICH IS TAKEN FOR DEVELOPMENT, WHICH IS ADMITTEDLY MORE THA N ONE ACRE. HE SUBMITS THAT SO FAR AS THE COMMERCIAL AREA IN THE PROJECT IS CON CERNED, THE DVO HAS REPORTED THAT THE BUILT UP COMMERCIAL AREA IS 2225 SQ.FT.. IN FACT, THERE IS A WRONG CALCULATION AREA OF THE SHOP NO. 24B WHICH IS NOT 830.65 SQ.FT. BUT 28.80 SQ. MTRS AND IT IS CLEAR FROM THE CONVEYANCE DEED REGISTERED IN THE NAME OF MRS. RUPALI BHEGDE. HE SUBMITS THAT ONE RESIDENTIAL UNIT ADJOI NING TO THE SHOP IS SOLD TO ONE SHRI NAVANATH BHEGDE, THAT IS ALSO CONSIDERED AS A PART OF THE COMMERCIAL UNIT. SO FAR AS THE CHARGE OF EXCESS BUILT UP AREA OF THE 2 UNITS/FLAT IS CONCERNED, HE SUBMITS THAT AS PER THE SANCTION PLAN, THERE ARE TW O UNITS AND AFTER PURCHASING THE UNITS/FLATS, THE PURCHASERS HAVE MERGED THE PR EMISES AS ONE AND ASSESSEE CANNOT HAVE THE CONTROL OVER THE SAME. ALTERNATIVE LY, HE PLEADED THAT IF THERE IS A VIOLATION OF 2 UNITS IN RESPECT OF THE BUILT-UP ARE A, THEN TO THAT EXTENT THE PRO-RATA DEDUCTION MAY NOT BE ALLOWED. WE HAVE ALSO HEARD THE LD. D.R. 6. SO FAR AS THE TOTAL AREA OF THE PLOT IS CONCERNE D, WE FIND THAT THE LD CIT(A) IS TOTALLY SILENT ON THE SAME AND IT IS MORE THAN 1 ACRE. MERELY BECAUSE THE PROJECT IS SANCTIONED IN STAGES, THAT CANNOT BE DEC ISIVE TO CALCULATE THE TOTAL AREA UNDER THE PROJECT. THERE WILL BE DIFFERENT REASON FOR THE DEVELOPER TO GO WITH PIECEMEAL DEVELOPMENT, BUT THE FACTUAL ASPECT WE HA VE TO SEE WHETHER THE AREA IS MORE THAN 1 ACRE. SO FAR AS THE CHARGE OF VIOL ATION OF THE BUILT UP AREA OF THE FLAT/UNIT IS CONCERNED, IN OUR OPINION, AT THE MOST , TO THAT EXTENT DEDUCTION U/S. 80 IB(10) SHOULD NOT BE ALLOWED ON THE PROFITS ATTR IBUTABLE TO THOSE TWO FLATS, BUT THE ASSESSEE CANNOT BE DENIED ENTIRE BENEFIT U/S. 8 0 IB (10). ON THIS ISSUE, WE MAY REFER HERE DECISIONS OF THE CO-ORDINATE BENCHE S AS UNDER : 1. EMGREEN HOLDINGS (P.) LTD. V. DCIT, ITA NOS. 359 4, 3595, 3647 & 3648/MUM/2009, ORDER DATED 29.7.2011. 2. SJR BUILDERS V. ACIT, 3 ITR (TRIB) 569 (BANG.) 3. SREEVATSA REAL ESTATES (P.) LTD. V. ITO, ITA NO. 2505 AND 2506/MAD/2006, ORDER DATED 23.4.2010 4 4. G.V. CORPORATION V. ITO (MUM), 38 SOT 174(MUM.) IN ALL THE ABOVE DECISIONS, THE CO-ORDINATE BENCHES HAVE TAKEN VIEW THAT TO THE EXTENT OF VIOLATION OF THE BUILT UP AREA, THE ASSES SEE SHOULD NOT BE DENIED THE ENTIRE BENEFIT OF SEC. 80 IB (10), BUT PRO-RATA DED UCTION SHOULD BE ALLOWED. WE, ACCORDINGLY, DIRECT THE A.O TO ALLOW THE PRO RATA DEDUCTION TO THE ASSESSEE IN THE LIGHT OF OUR ABOVE DECISIONS. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. 8. SINCE THE ASSESSING OFFICER AND THE CIT(A) HAVE FOLLOWED THE ORDER FOR A.Y. 2006-07 WHILE DENYING THE CLAIM OF DEDUCTI ON U/S.80IB(10) AND SINCE THE TRIBUNAL HAS ALLOWED THE CLAIM OF DEDUCTI ON U/S.80IB(10) FOR THE A.Y. 2006-07, THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2006-07 AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE SET-ASIDE THE OR DER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S.80IB(10). THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY AL LOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF MAY, 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K.P ANDA) JUDICIAL MEMBER ACC OUNTANT MEMBER PUNE, DATED THE 14 TH MAY 2013 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-V, PUNE 4. THE CCIT, PUNE 5. D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // PRIVAT E SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE 5