DCIT, Cirlce-2(1), Hyd, Hyderabad V. Janapriya Properties Pvt.Ltd., Hyd, Hyderabad

ITA 417/Hyd/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5499 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2008-2009
• Appeal Filed On: 28-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Deduction Disallowance
• Section: 143(3); 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH : HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NOS.416 AND 417/HYD/2016 (ASSESSMENT YEARS: 2007-08 AND 2008-09) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1), HYDERABAD. ..APPELLANT. VS. M/S. JANA PRIYA PROPERTIES PVT. LTD., 8-2-120/86, PLOT NO.11 & 12, KEERTHI AND PRIDE TOWER, ROAD NO.2, BANJARA HILLS, HYDERABAD. PAN NO.AABCJ9001E. ..RESPONDENT. APPELLANT BY : SHRI A. SRINIVAS, AR. RESPONDENT BY : SHRI SUNKU SRINIVAS, DR. DATE OF HEARING : 08.09.2021 DATE OF PRONOUNCEMENT : 09.09.2021 O R D E R PER S.S. GODARA, J.M. : THESE TWO REVENUES APPEALS FOR AYS 2007-08 AND 200 8-09 ARISE AGAINST THE COMMISSIONER OF INCOME-TAX (APPEA LS) 2, HYDERABADS SEPARATE ORDERS; BOTH DATED 23.12.2015, PASSED IN 2 ITA NOS.416 & 417/HYD/2016 CASE NOS.0213 AND 214/2014-15, INVOLVING PROCEEDING S U/S 143(3) R.W.S. 254 AND 143(3) OF INCOME TAX ACT, 196 1 [IN SHORT, THE ACT], RESPECTIVELY. HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. THE REVENUE HAS PROPOSED THE FOLLOWING IDENTICAL TWIN SUBSTANTIVE GROUNDS IN THE INSTANT APPEALS : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHET HER THE CIT(A) IS CORRECT IN ALLOWING THE GROUND F THE ASSESSEE THAT THE AO CANNOT DENY THE DEDUCTION UNLESS THE CENTRAL GOVERNMENT RESCIND TH E APPROVAL AND NOTIFICATION ISSUED, BY FOLLOWING THE JURISDICTION AL TRIBUNAL DECISION IN THE CASE OF MS.. ANNAPURNA BUILDERS IN ITA NO.100 6/HYD/2012 DATED 27.11.2012. 2 IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHETH ER THE CIT(A) IS CORRECT IN ALLOWING THE GROUND OF THE ASSESSEE EVEN WHEN T HE ASSESSEE DEVIATED FROM THE SPECIFIC CONDITION IMPOSED BY THE CBDT TH AT NO SINGLE UNIT SHALL OCCUPY MORE THAN 50% OF THE ALLOCABLE INDUSTRIAL A REA OF AN INDUSTRIAL PARK. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHETH ER THE CIT(A) IS CORRECT IN ALLOWING THE GROUND OF THE ASSESSEE THAT PROVIS IONS OF SEC.40(A)(IA) NOT APPLICABLE BY FOLLOWING THE DECISION OF THE VIZAG SPECIAL BENCHS DECISION IN THE CASE OF M/S. MERYLIN SHIPPING PVT LTD., WHE N THE SAID DECISION WAS SUSPENDED BY THE HONBLE HIGH COURT OF A.P. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL PLEADINGS QUA THE REVENUE INSTANT TWIN SUBSTANTIVE GRIEVANCE. IT EMERGES AT THE OUTSET THAT THIS TRIBUNAL ORDER IN THE REVENUE S IDENTICAL APPEALS IN ITA NOS.2272 AND 2273/HYD/2018 FOR AYS. 2013-14 3 ITA NOS.416 & 417/HYD/2016 AND 2014-15 DATED 25.06.2021 HAS DECIDED THE FORMER ISSUE (GROUNDS 1 AND 2) AS FOLLOWS : 3. WE NOTICE AT THE OUTSET WITH THE ABLE ASSISTANC E OF BOTH THE PARTIES THAT THE CIT(A) HAS GONE BY HIS DETAILED DISCUSSION IN A Y.2008-09 DELETING THE VERY NATURE OF SECTION 80-IA(4) DEDUCTION DISALLOWA NCE FOR THE SOLE REASON THAT THIS TAXPAYER HAD LET OUT MORE THAN 50% OF THE AREA TO A SINGLE TENANT. BOTH THE LEARNED REPRESENTATIVE INFORMED US VERY FA IRLY THAT THIS COORDINATE BENCHS DECISION IN REVENUES APPEAL NO.1746/HYD/20 16, AY.2011-12 DECIDED ON 07-04-2017 HAS TAKEN NOTE OF THE CBDT CI RCULAR DT.13-11-2006 AS WELL AS A CATENA OF OTHER CO-ORDINATE BENCHES O RDERS THEREBY DECLINING THE DEPARTMENTS VERY GRIEVANCE. WE MAKE IT CLEAR T HAT THERE IS NO DISTINCTION IN THE ABOVE EXTRACTED PLEADINGS ON FACTS IN ALL T HESE ASSESSMENT YEARS QUA THE ASSESSEES ELIGIBLE UNDERTAKING. WE THUS AD OPT JUDICIAL CONSISTENCY TO AFFIRM THE CIT(A)S ACTION DELETING THE IMPUGNE D SECTION 80-IA FOR DEDUCTION DISALLOWANCE OF RS. 2,47,72,990/-. THE R EVENUES SOLE SUBSTANTIVE GRIEVANCE AS WELL AS THE MAIN APPEAL IT A NO.2272/HYD/2018 FAIL THEREFORE. 4. WE ADOPT JUDICIAL CONSISTENCY AND IN THE ABSE NCE OF ANY DISTINCTION ON FACTS TO DECLINE THE REVENUES INSTA NT FORMER TWO SUBSTANTIVE GROUNDS. COMING TO THE LATTER ISSUE OF SEC.40(A)(IA), DISALLOWANCE MADE BY THE ASSESSING OFFICER AND REVE RSED IN THE CIT(A)S ORDER BY FOLLOWING TRIBUNALS SPECIAL BEN CH DECISION OF M/S. MERYLIN SHIPPING AND TRANSPORTS LTD., VS. AC IT IN (2012) 136 ITD 23 (SB) (45) THAT THE SAME ONLY COVERS THO SE EXPENSES WHICH REMAIN PAYABLE ON THE LAST DAY OF THE RELEV ANT ACCOUNTING PERIOD, WE FIND THAT THE SAME IS NO MORE RES INTEG RA SINCE HONBLE APEX COURT IN PALAM GAS SERVICE VS. CIT IN 394 ITR 300 (SC) HOLDS 4 ITA NOS.416 & 417/HYD/2016 THAT SEC.40(A)(IA) ALSO COVERS BOTH PAID AS WELL AS PAYABLE EXPENSES. THE FACT ALSO REMAINS THAT THE LEGISLAT URE HAS INSERTED SEC.40(A)(IA) 2 ND PROVISO BY THE FINANCIAL ACT, 2012 W.E.F. 01.04.2013 THAT THE IMPUGNED DISALLOWANCE DOES NOT COME INTO PLAY IN CASE THE ASSESSEE / DEDUCTOR CONCERNED IS N OT THE ASSESSEE- IN-DEFAULT IN VIEW OF SECTION 201(1) FIRST PROVISO OF THE ACT. AND THAT CASE LAW CIT VS. ANSAL LAND MARKET TOWNSHIP L IMITED IN (2015) 377 ITR 635 (DEL) HOLDS THE FOREGOING PROVI SO TO BE HAVING RETROSPECTIVE EFFECT BEING CURATIVE IN NATURE. WE THEREFORE REVERSE THIS CIT(A)S ORDER ON THE FOREGOING LEGAL ISSUE AN D RESTORE THE ISSUE BACK TO THE ASSESSING OFFICER FOR HIS NECESSARY FA CTUAL VERIFICATION IN LIGHT OF SEC.40(A)(IA) 2 ND PROVISO IN ORDER TO CROSS CHECK AS TO WHETHER THE ASSESSEES / PAYEES CONCERNED HAVE BEE N ASSESSED QUA THE VERY INCOME OR NOT, AS PER LAW WITHIN THRE E EFFECTIVE OPPORTUNITIES OF HEARING. THE REVENUES INSTANT LAT TER SUBSTANTIVE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 5. NO OTHER GROUND HAS BEEN PRESSED BEFORE US. 5 ITA NOS.416 & 417/HYD/2016 6. THESE TWO REVENUES APPEALS ARE PARTLY ALLOWED F OR STATISTICAL PURPOSES IN THE ABOVE TERMS. ORDERED ACCORDINGLY. A COPY OF THIS COMMON ORDER IS PLACED IN RESPECTIVE FILES. ORDER PRONOUNCED ON 9 TH DAY OF SEPTEMBER, 2021. SD/- SD SD/- SD/- // D SD/- (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL ME MBER HYDERABAD, DT 09.09.2021. *TYNM COPY FORWARDED TO: 1. M/S. JANA PRIYA PROPERTIES PVT. LTD., (8-2-120/86, PLOT NO.11 & 12, KEERTHI AND PRIDE TOWER, ROAD NO.2, BANJARA HI LLS, HYDERABAD. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1 ), HYDERABAD. 3. CIT(APPEALS) 2, HYDERABAD. 4. PR.CIT-2, HYDERABAD. 5. D.R. ITAT HYDERABAD. 6. GUARD FILE. BY ORDER // C O P Y //