ACIT 25(2), MUMBAI V. MIRAJ ENTERPRISES, MUMBAI

ITA 4657/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79502 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 11-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAMIR G DALAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 4657/MUM/2012 ASSESSMENT YEAR: 2009-10 ACIT 25(2) C-11 PRATYAKSHKAR BHAVAN R. NO. 108 BKC BANDRA (E), MUMBAI 400 051 VS. M/S. MIRAJ ENTERPRISES B-602, PREM NAGAR, BLDG NO. 6 MCF UDYAN MARG, BORIVALI (W) MUMBAI 400 092 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :-AAATN 0043 Q ASSESSEE BY : SHRI SAMIR G. DALAL REVENUE BY : SHRI JEEVANLAL LAVIDIYA DATE OF HEARING : 17.07.2014 DATE OF PRONOUNCEMENT : 30.07.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD.CIT(A)-35, MUMBAI DATED 27.04.2012 FOR THE ASSES SMENT YEAR 2009-10. 2. IN THIS APPEAL, THE REVENUE HAS AGITATED THE DEC ISION OF THE LD.CIT(A) ALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IB(10) OF THE INCOME-TAX ACT. 3. BRIEFLY STATED, THE ASSESSEE, A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS WHILE DECLARING A TOTAL INC OME AT RS. NIL HAD CLAIMED THE DEDUCTION U/S 80IB(10) AT RS.1,08,32,592/-. FURTHER FACTS ARE THAT THE ASSESSEE HAD DEVELOPED A PROPERTY ON PLOT OF LAND BEARING CTS NO . 353A OF VILLAGE MALVANI, TALUKA BORIVALI HAVING PLOT AREA OF 1.10 ACRES BY CONSTRUC TING BUILDING NO. 1 COMPRISING OF A, B & C WING AND BUILDING NO. 2 COMPRISING OF D & E WING KNOWN AS MIRAJ RESIDENCY SITUATED IN MALAD (WEST), MUMBAI-95. THE ASSESSEE DECLARED SALES OF RS.20,00,000/- FROM A-WING OF BUILDING NO. 1, RS.2, 47,30,000/- FROM D WING OF BUILDING NO. 2 AND RS.93,75,000/- FROM E WING OF BU ILDING NO. 2 FOR THE YEAR UNDER CONSIDERATION AND ACCORDINGLY CLAIMED A DEDUCTION O F RS RS.1,08,32,592/- U/S 80IB(10) OF THE ACT. THE AO DID NOT ALLOW THE SAID CLAIM OF DEDUCTION U/S 80IB(10) IN ITA NO. 4657/MUM/2012 M/S. MIRAJ ENTERPRISES ASSESSMENT YEAR: 2009-10 2 RESPECT OF THE ENTIRE PROJECT ON THE FOLLOWING GROU NDS THAT (I) BUILDING NO. 1 (WING A, B, C) & 2 (WING D & E) ARE SEPARATE PROJECTS AND IN DIVIDUAL BUILDINGS WHICH ARE NOT ON PLOT HAVING AREA OF 1 ACRE SINCE THE TOTAL AREA OF THE PLOT ITSELF IS ONLY 1.10 ACRE, (II) WING A OF BUILDING NO. 1 HAS MERGED FLATS HAVI NG AREA MORE THAN 1,000 SQ. FT AND THERE IS COMMERCIAL PREMISES HAVING AREA OF 1,5 00 SQ.FT. IN B WING OF BLDG. NO.1. THE AO RELIED ON THE MATERIALS GATHERED AT TH E TIME OF SURVEY TO HOLD THAT THE ASSESSEE HAD AMALGAMATED TWO ADJACENT FLATS IN A WING OF BUILDING NO. 1 AND THEREBY THE AREA OF AMALGAMATED FLAT EXCEEDED 1,000 SQ.FT. THE AO FURTHER NOTICED THAT THERE WAS A COMMERCIAL AREA OF 1,500 SQ.FT. WH ICH WAS USED FOR KIDS SCHOOL AND AS PER SECTION 80IB(10), THERE SHOULD NOT BE ANY CO MMERCIAL AREA IN RESPECT OF HOUSING PROJECT APPROVED BEFORE 31.03.2005. THUS, T HE AO REJECTED THE CLAIM OF DEDUCTION U/S 80IB(10). ON APPEAL, THE LD.CIT(A) AL LOWED THE CLAIM OF DEDUCTION BY RELYING ON HIS OWN ORDER IN THE ASSESSEES CASE FOR THE A.Y. 2005-06. THE LD.CIT(A) HAS ALSO CONSIDERED THE DECISION OF THE TRIBUNAL IN THE CASE OF ASSESSEES SISTER CONCERN, M/S. VANDANA PROPERTIES. ON THE ISSUE OF T HE AMALGAMATION OF FLATS, THE LD.CIT(A) HAD OBSERVED THAT THIS ISSUE WAS ALREADY DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. 4. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, ON THE ISSUE THAT THE PLOT AREA OF BUILDING NO. 1 IS LESS THAN O NE ACRE AND THERE ARE FEW FLATS EXCEEDING 1,000 SQ.FT. AND FURTHER THERE IS COMMERC IAL PREMISES HAVING AREA OF 1,200 SQ. FT. IN B WING OF BUILDING NO. 1 USED F OR KIDS SCHOOL, IT IS PERTINENT TO MENTION THAT THE LD.CIT(A) WHILE DEALING WITH THE APPEAL FOR A.Y. 2005-06 HAS HELD THAT BLDG NO. 1 &2 SHOULD BE TREATED AS A SINGLE PR OJECT. IT IS ALSO RELEVANT TO STATE THAT THE TRIBUNAL IN THE CASE OF ASSESSEES SISTER CONCERN, M/S. VANDANA PROPERTIES HAS HELD THAT THERE IS NO REQUIREMENT THAT EACH BUI LDING SHOULD HAVE INDEPENDENT PLOT AREA OF ONE ACRE AND THEREFORE THE REJECTION O F CLAIM OF DEDUCTION U/S80IB(10) IS NOT CORRECT. ACTUALLY IN THE SAID CASE, SOME OF THE PROJECTS WERE NOT ENTITLED TO DEDUCTION U/S80IB(10) AND EVEN THEN THE TRIBUNAL HA S HELD THAT THE AREA OF THE ENTIRE PROJECT OF BUILDINGS A,B,C,D & E SHOULD BE C ONSIDERED TOGETHER FOR THE PURPOSE OF ASCERTAINING THE PLOT AREA OF ONE ACRE. IN THE CASE OF ASSESSEE, EVEN THOUGH THE PROJECT FOR BUILDING NO. 1 AND BUILDING NO. 2 ARE SEPARATELY APPROVED ON DIFFERENT DATES AND THE PROJECTS HAVE ALSO BEEN COM MENCED ON DIFFERENT DATES AND ITA NO. 4657/MUM/2012 M/S. MIRAJ ENTERPRISES ASSESSMENT YEAR: 2009-10 3 COMPLETED ON DIFFERENT DATES, THE TOTAL AREA OF BUI LDING NO. 1 AND BUILDING NO. 2 SHOULD BE CONSIDERED TOGETHER FOR THE PURPOSE OF AS CERTAINING THE AREA OF PROJECT. THUS, THE ENTIRE AREA OF BUILDING NO. 1 AND BUILDIN G NO. 2 IS TO BE CONSIDERED AND THE AO IS NOT JUSTIFIED IN SPLITTING THE AREA OF BU ILDING NO. 1 AND BUILDING NO. 2. REGARDING THE AMALGAMATION OF FLATS, IT IS FOUND TH AT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE A ND THE AO HAS NOT BROUGHT ON RECORD ANY NEW FACTS FOR THIS A.Y. EXCEPT REPEATING WHAT HAS BEEN STATED IN THE ASSESSMENT ORDER FOR A.Y. 2005-06. ALSO, THE SAID D ECISION OF THE TRIBUNAL HAVE BEEN UPHELD BY THE HONBLE HIGH COURT OF BOMBAY. FURTHER , THE PROVISIONS OF SECTION 80IB(10)(E) HAS BEEN BROUGHT TO THE STATUTE BOOK WI TH EFFECT FROM 1.4.2010 AND HENCE THE SAME IS NOT APPLICABLE TO THE CASE IN HAN D BEING THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2009-10. CONSIDERING THE ENT IRETY OF FACTS, WE ARE INCLINED TO CONCUR WITH THE FINDINGS OF THE LD.CIT(A) THAT THE ASSESSEE HAS NOT CONSTRUCTED JOINT FLATS AND HAS NOT GIVEN POSSESSION OF FLATS AREA MO RE THAN 1,000 SQ. FTS, BUILDING NO. 1 & 2 COMPRISING OF BUILDING A TO E ARE IN ONE PRO JECT AND SAME ARE ON LAND AREA OF WHICH IS MORE THAN 1 ACRE AND AS REGARDS THE COMMER CIAL AREA OF 1,500 SQ.FT. OF KIDS SCHOOL, THE ISSUE IS COVERED BY THE DECISIONS OF HO NBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES, WHEREIN IT HAS BEEN HELD THAT THERE CAN BE CONVENIENT COMMERCIAL AREA EVEN UP TO 10% OF THE TOTAL BUILT-U P AREA. IN VIEW OF THAT MATTER, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE DECISION OF THE LD.CIT(A) AND THUS THE SAME IS UPHELD. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JULY, 2014. SD/- SD/- (SANJAY ARORA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.07.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR B BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.