M/s. Sagar Assicates, Baroda V. The Income tax Officer,Ward-2(2), Baroda

ITA 460/AHD/2013

• Counselvise Citation: 46020514 RSA 2013
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-09-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 18-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL SRDR

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER 1. ./ I.T.A. NO.460/AHD/2013 - / A.Y.2005-06 2. ./ I.T.A. NO.461/AHD/2013 - / A.Y.2005-06 1.M/S.SAGAR ASSOCIATES DARSHANAM, OPP.GULMOHAR SOCIETY GOTRI, BARODA-390 021 PAN: AALFM5191K 2.M/S.SAGAR BUILDERS A-2,SEVASHRAM SOCIETY JYOTI ASHRAM ELLORA PARK BARODA-390 023 PAN: AAKFM 6146P / VS. 1. THE INCOME TAX OFFICER WARD-2(2) BARODA 2. THE ASST.CIT CIRCLE-3 BARODA ( / // / APPELLANTS ) .. ( !/ RESPONDENTS ) ASSESSEE(S) BY : SHRI MUKUND BAKSHI REVENUE BY : SHRI P.L.KUREEL, SR.DR '# $ %&' / / / / DATE OF HEARING : 03/09/2013 () $ %&' / DATE OF PRONOUNCEMENT : 26/11/2013 *+ / O R D E R PER SHRI A.K.GARODIA ACCOUNTANT MEMBER : BOTH THESE APPEALS ARE ASSESSEES APPEALS WHICH AR E DIRECTED AGAINST TWO SEPARATE ORDERS OF LD.CIT (A)-V BARODA BOTH DATED 2 1/11/2012 IN RESPECT OF TWO DIFFERENT ASSESSEES, I.E. M/S.SAGAR ASSOCIATES AND M/S.SAGAR BUILDERS FOR ASST.YEAR 2005-06. SINCE THE ISSUE INVOLVED IS CO MMON AND IDENTICAL, BOTH ITA NOS.460 & 461/ADH/29013 M/S.SAGAR ASSOCIATES VS. ITO & M/S.SAGAR BUILDERS VS. ACIT (RESPECTIVELY) ASST.YEAR - 2005-06 - 2 - THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DIS POSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. GROUNDS RAISED BY THE ASSESSEE ARE IDENTICAL IN BOTH THE CASES, EXCEPT DIFFERENCE IN AMOUNT AND, HENCE, WE REPRODUCE THE G ROUNDS OF APPEAL FROM THE APPEAL OF THE ASSESSEE IN THE CASE OF M/S.SAGAR ASS OCIATES, I.E. ITA NO.460/AHD/2013. THE GROUNDS ARE AS UNDER:- ALL THE GROUNDS OF APPEAL IN THIS APPEAL ARE MUTUAL LY EXCLUSIVE AND WITHOUT PREJUDICE TO EACH OTHER. 1. THE LD.CIT (A)-V, BARODA HAS ERRED IN LAW AND I N FACTS IN HOLDING THAT THE APPELLANT IS NOT A BUILDER AND DEVELOPER, WHO IS NOT ASSUMING THE ENTREPRENEURIAL RISK AND THAT THE BUSINESS UNDE RTAKEN BY IT IS IN THE NATURE OF A WORKS CONTRACTOR. 2. THE LD.CIT(A)-V, BARODA HAS ERRED IN LAW AND IN FACTS IN HOLDING THAT APPELLANT, THOUGH DEVELOPING AND BUILDING RESI DENTIAL HOUSES CANNOT BE SAID TO HAVE FULFILLED THE CONDITIONS FOR THE CL AIM OF DEDUCTION U/S.80IB(10) AS IN SALE OF THE HOUSES, THE APPELLAN T HAS EXECUTED THE SALE DEED OF THE INCOMPLETE HOUSE AND THAT THE EXECUTION OF CONSTRUCTION AGREEMENT FOR CONSTRUCTION OF THE INCOMPLETE HOUSE WOULD RENDER THE APPELLANT INELIGIBLE FOR THE CLAIM OF DEDUCTION U/S .80IB(10) AND THAT SUCH ACT WOULD TANTAMOUNT TO UNDERTAKING THE BUSINESS AS A WORKS CONTRACTOR AND THAT THE PROFIT FROM SUCH BUSINESS IS INELIGIBL E FOR THE CLAIM OF THE DEDUCTION U/S.80IB(10). 3. THE LD.CIT(A)-V, BARODA HAS ERRED IN LAW AND IN FACTS IN DENYING TO THE APPELLANT THE CLAIM OF DEDUCTION U/S.80IB(10) A MOUNTING TO RS.83,185 DESPITE THE APPELLANT HAVING FULFILLED ALL THE COND ITIONS FOR SUCH CLAIM INCLUDING THAT OF THE DEVELOPMENT AND BUILDING OF H OUSING PROJECTS. THE APPELLANT MAY PLEASE BE ALLOWED THE CLAIM AS MADE. 4. YOU APPELLANT CRAVES THE LIBERTY TO ADD, ALTER, AMEND OR DELETE ANY OR ALL OF THE ABOVE GROUND(S) OF APPEAL. ITA NOS.460 & 461/ADH/29013 M/S.SAGAR ASSOCIATES VS. ITO & M/S.SAGAR BUILDERS VS. ACIT (RESPECTIVELY) ASST.YEAR - 2005-06 - 3 - 2.1. IN THE CASE OF OTHER APPEAL, I.E. M/S.SAGAR B UILDERS IN ITA NO.461/AHD/2013, THE AMOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE IS RS.6,45,908/-. 3. IT WAS AGREED BY BOTH THE SIDES THAT, IN BOTH TH E APPEALS, THE CLAIM OF THE ASSESSEE(S) REGARDING DEDUCTION U/S.80-IB(10) OF TH E ACT WAS DISALLOWED BY LD.CIT(A) ON THIS BASIS THAT THE ASSESSEE SOLD THE PLOT SEPARATELY AND COMPLETED THE CONSTRUCTION WORK SEPARATELY AND, THEREFORE, NO T ELIGIBLE FOR DEDUCTION U/S.80-IB(10) OF THE ACT. 4. LEARNED AR OF THE ASSESSE SUBMITTED THAT THE ISS UE INVOLVED IN THESE TWO APPEALS IS SQUARELY COVERED IN FAVOUR OF THE ASSESS EE BY THE FOLLOWING TRIBUNAL DECISIONS:- SL.NO(S) DECISION IN THE CASE OF. REPORTED IN. 1. DCIT VS. SMR BUILDERS (P.)LTD. (2012)24 TAXMAN.C OM 194 (HYD.) 2. M/S.VARDHMAN BUILDERS AND DEVELOPERS VS. ITO ITA NO.559/IND/2010 DATED 09/05/2012 3. RAGHAVA ESTATES VS. DY.CIT ITA NOS.248 & 49/VIZAG/2009 DATED 04/08/2011 5. AT THE TIME OF HEARING OF THESE APPEALS, IT WAS POINTED OUT BY THE BENCH TO BOTH THE SIDES THAT IN THE SIMILAR FACTS, ONE MORE APPEAL WAS HEARD BY THE ITAT C BENCH AHMEDABAD IN THE CASE OF SATSANG DEVELOPE RS VS. ACIT IN ITA NO.1011/AHD/2012 FOR AY 2008-09 AND ONE OF THE MEMB ERS, I.E. ACCOUNTANT ITA NOS.460 & 461/ADH/29013 M/S.SAGAR ASSOCIATES VS. ITO & M/S.SAGAR BUILDERS VS. ACIT (RESPECTIVELY) ASST.YEAR - 2005-06 - 4 - MEMBER IS COMMON AND, THEREFORE, THE ISSUE WILL BE DECIDED ON SIMILAR LINE AS PER THE DECISION IN THAT CASE. BOTH THE SIDES AGRE ED TO THIS PROPOSITION. 5.1 AS PER THE RECENT TRIBUNAL ORDER RENDERED IN T HE CASE OF SATSANG DEVELOPERS (SUPRA), THIS ISSUE WAS DECIDED BY THE T RIBUNAL IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE TRIBUNAL DECISIONS: SL.NO(S) DECISION IN THE CASE OF. REPORTED IN. 1. DCIT VS. SMR BUILDERS (P.)LTD. (2012)24 TAXMAN.C OM 194 (HYD.) 2. M/S.VARDHMAN BUILDERS AND DEVELOPERS VS. ITO ITA NO.559/IND/2010 DATED 09/05/2012 3. RAGHAVA ESTATES VS. DY.CIT ITA NOS.248 & 49/VIZAG/2009 DATED 04/08/2011 5.2. BEFORE US IN THE PRESENT TWO APPEALS ALSO, REL IANCE WAS PLACED ON THESE TRIBUNAL DECISIONS ONLY. RESPECTFULLY FOLLOWING THE TRIBUNAL DECISION IN THE CASE OF SATSANG DEVELOPERS (SUPRA) AND OTHER TRIBUNAL DE CISIONS WHICH WERE FOLLOWED BY THE TRIBUNAL IN THAT CASE AND CITED BEF ORE US ALSO, WE DECIDE THE ISSUE IN THE PRESENT TWO APPEALS ALSO IN FAVOUR OF THE ASSESSEE. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D ON CAPTION PAGE. SD/- SD/- (D.K. TYAGI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 26/11/2013 ,&.., .../ T.C. NAIR, SR. PS ORDER PRONOUNCED ON 26/11/13 SD/- SD/- AM JM (AC) ( DKT) ITA NOS.460 & 461/ADH/29013 M/S.SAGAR ASSOCIATES VS. ITO & M/S.SAGAR BUILDERS VS. ACIT (RESPECTIVELY) ASST.YEAR - 2005-06 - 5 - *+ $ %- .*-% *+ $ %- .*-% *+ $ %- .*-% *+ $ %- .*-%/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. % '/ / CONCERNED CIT 4. '/() / THE CIT(A)-V, BARODA 5. -23 % , , / DR, ITAT, AHMEDABAD 6. 34 5# / GUARD FILE. *+' *+' *+' *+' / BY ORDER, !-% % //TRUE COPY// 6 66 6/ // / 7 7 7 7 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION 28.10.13 (DICTATION-PAD 5-PAGES ATTACHED WITH THE FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30.10.13/7.11.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.26.11.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 26.11.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DISPATCH OF THE ORDER