ITO, Dehradun V. M/s Shri Ganesh Developers & Builders, Dehradun

ITA 4328/DEL/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0223 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 08-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 12-11-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Section: 40(a)(ia); 80IB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH G GG G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI K.G.BANSAL K.G.BANSAL K.G.BANSAL K.G.BANSAL, AM , AM , AM , AM ITA NO. ITA NO. ITA NO. ITA NO.4328/DEL/2009 4328/DEL/2009 4328/DEL/2009 4328/DEL/2009 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2006 2006 2006 2006- -- -07 0707 07 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(2), 1(2), 1(2), 1(2), DEHRADUN. DEHRADUN. DEHRADUN. DEHRADUN. VS. VS. VS. VS. M/S SHRI GANESH DEVELOPERS & M/S SHRI GANESH DEVELOPERS & M/S SHRI GANESH DEVELOPERS & M/S SHRI GANESH DEVELOPERS & BUILDERS, BUILDERS, BUILDERS, BUILDERS, 6, C 6, C 6, C 6, CROSS ROAD, ROSS ROAD, ROSS ROAD, ROSS ROAD, DEHRADUN. DEHRADUN. DEHRADUN. DEHRADUN. PAN NO. PAN NO. PAN NO. PAN NO.ABBFS0152K. ABBFS0152K. ABBFS0152K. ABBFS0152K. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KISHORE B., DR. RESPONDENT BY : SHRI K.SAMPATH, ADVOCATE. ORDER ORDER ORDER ORDER PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI, J , J, J , JM : M : M : M : THE REVENUE IS IN APPEAL AGAINST THE ORDER DATED 2 7.8.2009 PASSED BY THE LEARNED CIT(A) FOR THE AY 2006-07. 2. GROUND NO.1 IS DIRECTED AGAINST CIT(A)S ORDER I N ALLEGEDLY DELETING THE DISALLOWANCE OF `7,23,081/- U/S 40(A)( IA) OF THE IT ACT AS ASSESSEE FAILED TO DEDUCT TAX AT SOURCE FROM THE SA ID PAYMENT. 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 4. ON PERUSAL OF PARAGRAPH 7 OF THE CIT(A)S ORDER, WE FIND THAT THE CIT(A) HAS OBSERVED THAT THERE WAS A LIABILITY UPON THE ASSESSEE TO DEDUCT TAX AT SOURCE ON THE PAYMENT OF `7,23,081/- AND THE ASSESSEE WAS OBLIGED TO DEDUCT TAX AT SOURCE AND PAY THE SAM E TO THE GOVERNMENT ACCOUNT. THE CIT(A) FURTHER OBSERVED TH AT SINCE THIS HAS NOT BEEN DONE, THE DISALLOWANCE WAS CALLED FOR ACCO RDING TO LAW. IT IS THUS SEEN THAT THE DISALLOWANCE OF PAYMENT OF `7,23 ,081/- MADE BY THE AO HAS BEEN CONFIRMED BY THE CIT(A). HOWEVER, CIT( A) FURTHER STATED ITA-4328/DEL/2009 2 THAT EVEN IF THIS DISALLOWANCE MADE BY THE AO IN TE RMS OF SECTION 40(A)(IA) IS TAKEN INTO ACCOUNT, THE ASSESSED INCOM E OF THE ASSESSEE SHALL BE INCREASED BY THAT AMOUNT WHICH WILL AUTOMA TICALLY QUALIFY FOR DEDUCTION U/S 80IB(10) AS THE ASSESSEE HAS BEEN DER IVING ITS INCOME ONLY FROM THE ELIGIBLE BUSINESS OF CONSTRUCTION OF FLATS IN RESPECT OF WHICH THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80I B(10). IN THE LIGHT OF THIS VIEW TAKEN BY THE LEARNED CIT(A), IT IS CLEAR THAT DISALLOWANCE OF `7,23,081/- U/S 40(A)(IA) HAS BEEN UPHELD BY THE CI T(A) BUT, AT THE SAME TIME, HE DIRECTED THE AO TO ALLOW DEDUCTION U/ S 80IB(10) ON THIS AMOUNT IF THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB(10) OF THE ACT. WE, THEREFORE, REJECT THIS GROUND OF APPEAL FILED B Y THE REVENUE. BEFORE PARTING WITH THIS ISSUE, IT MAY BE OBSERVED THAT THE ASSESSEE HAS ALSO NOT FILED ANY APPEAL AGAINST CIT(A)S ORDE R IN HOLDING THAT DISALLOWANCE OF THE PAYMENT OF `7,23,081/- IN VIOLA TION OF SECTION 40(A)(IA) WAS CALLED FOR. 5. GROUND NO.2 TAKEN BY THE REVENUE IS AS UNDER:- THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE DISALLOWANCE U/S 80IB(10) OF THE I.T.ACT, 1961 WITH OUT JURISDICTION IN AS MUCH AS IN ABSENCE OF THE COMPLE TION CERTIFICATE BEFORE THE AO AT THE TIME OF ASSESSMENT , THE DISALLOWANCE MADE BY THE AO WAS JUSTIFIED. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE ORDERS OF AUTHORITIES BELOW. 7. THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) W AS NOT ALLOWED BY THE AO ONLY FOR THE REASON THAT THE ASSESSEE FAI LED TO PRODUCE THE COMPLETION CERTIFICATE AS PER PROVISIONS OF CLAUSE (10) OF SECTION 80IB OF THE ACT. HOWEVER, THE ASSESSEE PRODUCED THE REL EVANT CERTIFICATE DATED 21.3.2009 BEFORE LEARNED CIT(A) IN RESPECT OF WHICH A REMAND REPORT WAS CALLED FOR BY THE LEARNED CIT(A) FROM TH E AO. ON THE BASIS ITA-4328/DEL/2009 3 OF THE CERTIFICATE PRODUCED BY THE ASSESSEE BEFORE THE LEARNED CIT(A), THE LEARNED CIT(A) DIRECTED THE AO TO ALLOW THE CLA IM. LEARNED CIT(A) FURTHER OBSERVED THAT SUCH A SITUATION COULD HAVE B EEN MET BY WAY OF RECTIFICATION OF THE ASSESSMENT ORDER MADE BY THE A O, U/S 154 OF THE ACT AS THE CERTIFICATE WAS FURNISHED WITHIN THE STA TUTORY TIME LIMIT WHICH HAD EXPIRED ON 31.3.2009. SINCE THE AO HAS N OT CARRIED OUT ANY SUCH RECTIFICATION U/S 154 ON THE STRENGTH OF COMPL ETION CERTIFICATE FURNISHED BY THE ASSESSEE, THE CIT(A) OBSERVED THAT THE AO SHOULD HAVE OF HIS OWN ACCOUNT CARRIED OUT THE RECTIFICATI ON NOW AND ALLOW THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. 8. IN THE COURSE OF HEARING, THE LEARNED DR SUBMITT ED THAT THIS CERTIFICATE WAS NOT FULLY EXAMINED AND VERIFIED BY THE AO. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMIT TED THAT HE HAS NO OBJECTION IF AO IS DIRECTED TO EXAMINE AND VERIFY T HE CERTIFICATE FOR THE PURPOSE OF ALLOWING DEDUCTION U/S 80IB(10) OF THE A CT. WE, THEREFORE, RESTORE THIS MATTER BACK TO THE FILE OF THE AO FOR A LIMITED PURPOSE TO EXAMINE THE COMPLETION CERTIFICATE DATED 21.3.2009 FURNISHED BY THE ASSESSEE AND THEN TO DECIDE THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB ACCORDINGLY. THE AO SHALL PROVIDE REASONABLE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S TREATED TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH, 2011. SD/- SD/- (K.G.BANSAL (K.G.BANSAL (K.G.BANSAL (K.G.BANSAL) )) ) (C.L.SETHI (C.L.SETHI (C.L.SETHI (C.L.SETHI) )) ) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 11.03.2011. VK. ITA-4328/DEL/2009 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR