SHREE SALASAR CONSTRUCTION CO., MUMBAI V. ITO CEN RG, THANE

ITA 4711/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4030 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 17-07-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 07-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH R PRASAD
• Assessee Lawyers: AJAY R SINGH; DR T SHIVARAM
• Keywords: Search and seizure; Opportunity of being heard
• Section: 143(3); 133A; 80IB; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 4711 /MUM/2010 ASSESSMENT YEAR: 2005-06 SHREE SALASAR CONSTRUCTION CO., GROUND FLOOR, VRINDAVAN, SALASAR BRIJBHOOMI, TEMBA HOSPITAL ROAD, BHAYANDAR (W), DIST. THANE 401 101 PAN: ABCFS 6099 N VS. THE ITO CENTRAL RANGE THANE (APPELLANT) (RESPONDENT) & ITA NO. 4290 /MUM/2010 ASSESSMENT YEAR: 2005-06 THE ITO CENTRAL RANGE THANE VS. SHREE SALASAR CONSTRUCTION CO., GROUND FLOOR, VRINDAVAN, SALASAR BRIJBHOOMI, TEMBA HOSPITAL ROAD, BHAYANDAR (W), DIST. THANE 401 101 PAN: ABCFS 6099 N (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. T. SHIVARAM & AJAY R. SINGH REVENUE BY : MR. RAJESH R. PRASAD DATE OF HEARING : 17.07.2013 DATE OF PRONOUNCEMENT : 26.07.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THESE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LD.CIT (A)-1, MUMBAI DATED 29.01.2010 FOR THE ASSESSMENT YEAR 2005-06. BOTH THE APPEALS ARE DISPOSED OFF BY THIS COMMON OR DER. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REL ATE TO THE SOLITARY ISSUE OF DISALLOWANCE OF RS.3,91,635/- MADE BY THE AO AGAINS T THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IB(10) AND THE SAME CONFIRMED BY THE LD.CIT(A). ITA NO. 4711 /MUM/2010 & ITA NO. 4290 /MUM/2010 SHREE SALASAR CONSTRUCTION CO., ASSESSMENT YEAR: 2005-06 2 2.1 BRIEFLY STATED, THE ASSESSEE, A PARTNERSHIP FIR M CONSISTING OF FIVE PARTNERS WAS ENGAGED IN THE BUSINESS OF BUILDING CONSTRUCTION AC TIVITY. A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF THE P ARTNERS AND THE BUSINESS PREMISES OF THE ASSESSEES FIRM WAS SURVEYED U/S 133A OF THE AC T ON 21.02.2007. CONSEQUENTLY, IN RESPONSE TO A NOTICE ISSUED U/S 153(A)(A), THE ASSE SSEE FILED A RETURN DECLARING NIL INCOME AFTER CLAIMING A DEDUCTION U/S 80IB(10) TO T HE TUNE OF RS.3,91,635/- IN RESPECT OF THE BUILDING PROJECT CALLED PUSHPA NIKETAN ON A P LOT AT BHAYANDAR. IN THE ASSESSMENT FRAMED U/S 143(3) R.W.S. 153(A)(B), THE AO DISALLOW ED THE CLAIM OF DEDUCTION, AS THE PROJECT WAS SANCTIONED AS COMMERCIAL RESIDENTIAL B UILDING AND THE AREA OF THE SHOPS IN THE PROJECT WAS 8815 SQ FT WHICH WAS MORE THAN 2000 SQ FT THEREBY THE ASSESSEE WAS NOT ENTITLED FOR THE DEDUCTION AS PER THE AMENDED PROVI SION OF SECTION 80IB (10) W.E.F. ASSESSMENT YEAR 2005-06. 2.2 ON APPEAL, THE LD.CIT(A), CONFIRMED THE DISALLO WANCE MADE BY THE AO AS THE ASSESSEE HAD NOT FULFILLED THE PRESCRIBED CONDITION S REGARDING THE SIZE OF THE LAND IN WHICH THE SAID HOUSING PROJECT WAS CONSTRUCTED. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 2.3 HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD, IT IS PERTINENT TO MENTION THAT AS REGARDS THE ISSUE OF COMMERCIAL SPA CE EXCEEDING 2000 SQ FT IS CONCERNED THE LD.CIT(A) HAS CORRECTLY RELIED ON THE DECISION OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF BRAHMA ASSOCIATES. ALSO, WITH REGARD TO THE APPLICABILITY OF CLAUSE D INTRODUCED TO SECTION 80IB (10) W.E.F. 01.04.2005, THE LD.CIT(A) HAS CORRECTLY RELIED ON THE DECISION OF ITAT IN THE CASE OF SAROJ SALES ORGANISATION VS. IT O [3 DTR (MUMBAI) 494 (2008)] WHEREIN IT HAS BEEN HELD THAT THE SAID AMENDMENT WO ULD NOT APPLY TO PROJECTS APPROVED PRIOR TO 01.04.2005. AS THE HOUSING PROJECT GOT COM MENCED FROM 28.05.2003, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD.CIT(A) THAT THE SAID AMENDMENT IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AND THE ASSE SSEE CANNOT BE DEPRIVED THE BENEFIT OF DEDUCTION ON THE GROUND THAT THE PROJECT HAVING COM MERCIAL AREA EXCEEDING 2000 SQ FT. 2.3.1 AS REGARDS DECISION CONFIRMING THE DISALLOWAN CE ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PROVE THE PLOT AREA TO BE MORE THAN O NE ACRE, WHICH IS ONE OF THE CONDITIONS FOR CLAIMING THE DEDUCTION U/S 80IB(10), THE LD. AR HAS CONTENDED THAT THE PLOT AREA OF THE PROJECT IS MORE THAN ONE ACRE AND THEREBY THE A SSESSEE IS ENTITLED FOR THE DEDUCTION ITA NO. 4711 /MUM/2010 & ITA NO. 4290 /MUM/2010 SHREE SALASAR CONSTRUCTION CO., ASSESSMENT YEAR: 2005-06 3 UNDER THE PROVISIONS OF SECTION 80IB(10). IN SUPPOR T OF THE CONTENTION, THE LD. AR HAS SHOWN SOME DOCUMENTS INCLUDING THE PLAN PAPERS. IT IS NOTED THAT THE LOWER AUTHORITIES HAVE NOT PROPERLY VERIFIED WHETHER THE SAID PLOT AR EA IS MORE THAN ONE ACRE OR NOT WHILE MAKING/CONFIRMING THE IMPUGNED DISALLOWANCE. IN VIE W OF THAT MATTER, WE ARE OF THE CONSIDERED OPINION THAT IT IS JUST AND PROPER TO SE T ASIDE THIS LIMITED ISSUE BACK TO THE FILE OF THE AO FOR VERIFYING WHETHER THE PLOT AREA OF TH E PROJECT IS MORE THAN ONE ACRE AND THEREBY TO DECIDE AFRESH THE DEDUCTION UNDER THE PR OVISIONS OF SECTION 80IB(10) AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD. WE DIRECT AND ORDER ACCORDINGLY. 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE RELA TE TO THE ISSUE OF THE CIT(A) HOLDING THAT THE ASSESSEE IS OTHERWISE ELIGIBLE FOR DEDUCTION U/S 80IB (10) EVEN THOUGH THE PROJECT IS APPROVED AS COMMERCIAL CUM RESIDENTI AL PROJECT AND THE ASSESSEE HAS A COMMERCIAL UNIT IN THE PROJECT HAVING TOTAL AREA EX CEEDING 2000 SQ FT. AS THIS ISSUE HAS BEEN ALREADY DISCUSSED IN PARA 2.3 AS AFOREMENTIONE D, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) ON THIS COUNT AND THE SAME I S UPHELD. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE AND THAT OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF JULY, 2013. SD/- S D/- (B.RAMAKOTAIAH) (DR. S.T.M.PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 26.07.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR F BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.