DCIT CEN CIR 36, MUMBAI V. AKRUTI CITY LTD, MUMBAI

ITA 4852/MUM/2009

• Counselvise Citation: 485219914 RSA 2009
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 29-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 21-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Search and seizure; Opportunity of being heard; Additional evidence; Question of law; Deemed dividend; Commercial expediency
• Section: 153A; 80IB; 132; 154

Judgement Text

1 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G BEFORE SHRI D.K. AGARWAL, J.M. AND SHRI R.K. PANDA, A.M. ITA NO. 4873/MUM/2009 ASSESSMENT YEAR 2005-06 M/S ACKRUTI CITY LTD., (FORMERLY KNOWN AS AKRUTI NIRMAN LTD.) AKRUTI TRADE CENTRE, 6 TH FLOOR, ROAD NO. 7, MAROL MIDC, ANDHERI (E), MUMBAI 93 PAN AAACA6101D. VS. DCIT CENTRAL CIR. 36, AAYKAR BHAVAN, M.K. ROAD, MUMBAI.400020. APPELLANT RESPONDENT ITA NO. 4851/MUM/2009 ASSESSMENT YEAR 2005-06 DCIT CENTRAL CIR. 36, AAYKAR BHAVAN, M.K. ROAD, MUMBAI.400020. VS. M/S ACKRUTI CITY LTD., (FORMERLY KNOWN AS AKRUTI NIRMAN LTD.) AKRUTI TRADE CENTRE, 6 TH FLOOR, ROAD NO. 7, MAROL MIDC, ANDHERI (E), MUMBAI 93 PAN AAACA6101D. APPELLANT RESPONDENT ITA NO. 4874/MUM/2009 ASSESSMENT YEAR 2006-07 M/S ACKRUTI CITY LTD., (FORMERLY KNOWN AS AKRUTI NIRMAN LTD.) AKRUTI TRADE CENTRE, 6 TH FLOOR, ROAD NO. 7, MAROL MIDC, ANDHERI (E), MUMBAI 93 PAN AAACA6101D. VS. DCIT CENTRAL CIR. 36, AAYKAR BHAVAN, M.K. ROAD, MUMBAI.400020. APPELLANT RESPONDENT 2 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. ITA NO. 4852/MUM/2009 ASSESSMENT YEAR 2006-07 DCIT CENTRAL CIR. 36, AAYKAR BHAVAN, M.K. ROAD, MUMBAI.400020. VS. M/S ACKRUTI CITY LTD., (FORMERLY KNOWN AS AKRUTI NIRMAN LTD.) AKRUTI TRADE CENTRE, 6 TH FLOOR, ROAD NO. 7, MAROL MIDC, ANDHERI (E), MUMBAI 93 PAN AAACA6101D. APPELLANT RESPONDENT ASSESSEE BY SHRI VIJAY MEHTA DEPARTMENT BY SHRI PAVAN VED ORDER PER R.K. PANDA A.M. THE ABOVE CROSS APPEALS FOR A.Y. 2005-06 AND 2006-0 7 ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 22.06.2009 AND 23 .06.2009 RESPECTIVELY OF THE LD. CIT(A) - VI, MUMBAI. SINCE COMMON ISSUES AR E INVOLVED IN ALL THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 4873/MUM/2009 (BY ASSESSEE FOR A.Y. 2005-06 ) 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT AND SLUM RE HABILITATION. DURING THE YEAR UNDER CONSIDERATION, THE TOTAL INCOME OF THE A SSESSEE COMPRISED OF BUSINESS INCOME. THE ASSESSEE HAS ALSO CLAIMED DED UCTION UNDER SECTION 80IB(10) OF THE ACT AMOUNTING TO ` 5,54,20,691/- AND DEDUCTION U/S 80IA(4)(III) 3 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. AMOUNTING TO ` 10,59,56,901/-. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT U/S 132 OF THE ACT IN THE CASE OF THE ASSESSEE AND ITS SISTER CONCERNS ON 10.8.2006. IN RESPONSE TO NOTICE U/S 153A, THE ASS ESSEE FILED RETURN OF INCOME ON 8.5.2007 DECLARING NIL INCOME. THE A.O. AT PA RA NO. 3.1 OF HIS ORDER HAS MENTIONED THE VARIOUS PROJECTS UNDERTAKEN BY THE AS SESSEE DURING THE YEAR FROM A.Y. 2001-02 TO 2007-08. IN THE RELEVANT A.Y. , THE A.O. NOTED FROM THE FINDINGS OF THE SEARCH AND SEIZURE CONDUCTED AT THE ASSESSEES PREMISES, AS WELL AS POST SEARCH ENQUIRIES THAT THE COMMERCIAL S PACE AT GAWANPADA PROJECT IS MORE THAN 3000 SQ. FT. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO HOW THE CONDITIONS LAID DOWN IN THE PROVISIONS OF SECTI ON 80IB(10) ARE FULFILLED. 2.1 IT WAS SUBMITTED THAT THE ASSESSEE WAS AWARDED SLUM REHABILITATION PROJECT AT GAWANPADA BY SLUM REHABILITATION AUTHORI TY (HEREINAFTER REFERRED TO AS SRA). AS PER THE LETTER OF APPROVAL ISSUED BY S RA, THE TOTAL AREA OF PLOT IS 6993.75 SQ.MT. WHICH IS EQUIVALENT TO 1.728 ACRES. THE TOTAL PLOT AREA IS DIVIDED AS FOLLOWS:- A) THE PLOT AREA FOR REHAB PORTION AT GAWANPADA IS 3,110,10 SQ. MT. WHICH IS EQUIVALENT TO 0.769 ACRES. B) THE SALE BUILDING PORTION IS OF 2386.30 SQ. MT. WHICH IS EQUIVALENT TO 0.590 ACRE. C) THE REMAINING AREA IS DIVIDED INTO ROAD SETBACK WHICH IS 1120.90 SQ. MT. AND ROAD DEPOT WHICH IS 373.90 SQ. MT. THE COMMERCIAL DEVELOPMENT IN SLUM REHABILITATION P ROJECT IS 3960.51 SQ. FT. THE PROPORTION OF BUILT UP AREA OF COMMERCIAL DEVEL OPMENT TO THE TOTAL BUILT UP AREA IS APPROXIMATELY 6%. THE ASSESSEE HAS BEEN GRA NTED BUILDING-WISE 4 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. COMMENCEMENT CERTIFICATES AND OBTAINED OCCUPATION C ERTIFICATES FOR ALL THE BUILDINGS DEVELOPED ON REHAB PORTION OF GAWANPADA P ROJECT. ALL THE ABOVE REHAB BUILDINGS ARE HOUSING PROJECTS HAVING UNIT SI ZE OF 225 SQ. FT. AS APPROVED BY SRA. 2.2 HOWEVER, THE A.O. WAS NOT CONVINCED WITH THE E XPLANATION GIVEN BY THE ASSESSEE. SINCE THE COMMERCIAL SPACE AT GAWANPADA P ROJECT IS 3960.51 SQ. FT. WHICH IS IN EXCESS OF 2000 SQ. FT., THEREFORE, THE A.O. REJECTED THE CLAIM OF DEDUCTION U/S 80IB(10) IN THE CASE OF GAWANPADA PRO JECT AMOUNTING TO ` 5,638,963/-. 2.3 BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT TH E PROVISIONS OF SECTION 80IB(10) WERE AMENDED BY FINANCE ACT 2004 BY INSERT ING CLAUSE (D) WHICH SPECIFIED THE LIMIT FOR MAXIMUM BUILT-UP AREA OF SH OPS OR COMMERCIAL ESTABLISHMENT IN AN ELIGIBLE HOUSING PROJECT U/S 80 IB(10). IT WAS SUBMITTED THAT THE PROVISIONS WERE AMENDED W.E.F. 1.4.2005 WH EREAS THE GAWANPADA PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BE FORE 1.4.2005. REFERRING TO THE DECISION OF THE TRIBUNAL IN THE CASE OF SAROJ S ALES ORGANISATION VS. ITO (2008) 115 TTJ (MUM) 485, IT WAS SUBMITTED THAT IF THE PROJECT WAS APPROVED BEFORE 31.3.2005, THERE WAS NO STIPULATION AS TO TH E SHOPPING COMPLEX AREA PERMISSIBLE AND HENCE DEDUCTION WAS TO BE ALLOWED. SINCE THE COMMENCEMENT CERTIFICATES WERE GRANTED TO THE GAWANPADA PROJECT BY 23 RD SEPTEMBER, 2003I.E. BEFORE 31.3.2005, THEREFORE, DEDUCTION U/S 80IB(10) SHOULD NOT BE DENIED. THE 5 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF BRAHMA ASSOCIATES WAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(A). AS REGARDS THE SIZE OF THE PLOT, THE ASSESSEE RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF VANDANA PROPERTIES V. ACIT IN ITA NO. 1253/MUM/2007 WHEREIN IT HAS BEEN HELD THAT IN DETERMINING THE FULFILLMENT OF CONDITION THAT THE P ROJECT SHOULD BE ON THE SIZE OF A PLOT OF LAND WHICH HAD A MINIMUM AREA OF ONE ACRE , ONE HAS TO TAKE INTO CONSIDERATION THE ENTIRE AREA OF THE PLOT ON WHICH ALL THE BUILDING PROJECTS HAD BEEN PLANNED THOUGH SOME OF THE BUILDINGS DO NOT QU ALIFY FOR DEDUCTION U/S 80IB(10) OF THE ACT. IT WAS SUBMITTED THAT SINCE T HE PROJECT FOR WHICH THE DEDUCTION WAS CLAIMED U/S 80IB(10) WAS SITUATED ON AN AREA WHICH WAS MORE THAN ONE ACRE INCLUDING THE BUILT UP AREA NOT ELIGI BLE FOR DEDUCTION U/S 80IB(10), THE ASSESSEE OUGHT TO BE ALLOWED DEDUCTIO N. IT WAS SUBMITTED THAT IN DETERMINING WHETHER OR NOT THE PROJECT WAS ON AN AR EA OF LAND WHICH WAS MORE THAN ONE ACRE, THE ENTIRE AREA OF THE PLOT SHOULD B E CONSIDERED. THE PLOT INCLUDED THE AREA OF BOTH I.E. THE BUILDINGS WHICH QUALIFIED FOR DEDUCTION U/S 80IB(10) AND THOSE WHICH DID NOT SO QUALIFY. IT WA S SUBMITTED THAT IN THE INSTANT CASE THE TOTAL PLOT AREA OF GAWANPADA PROJE CT WAS 6993.75 SQ. MT. (EQUIVALENT TO 1.728 ACRES) DIVIDED BETWEEN SLUM RE HAB BUILDING PORTION OF 3110.10 SQ. MT. (EQUIVALENT TO 0.769 ACRES) WHICH Q UALIFIED FOR DEDUCTION U/S 80IB(10) AND SALE BUILDING PORTION 2386.30 SQ. MT. (EQUIVALENT TO 0.590 ACRES) WHICH DID NOT QUALIFY FOR DEDUCTION U/S 80IB(10). THUS, TAKING INTO CONSIDERATION, BOTH THE COMPONENTS OF GAWANPADA, TH E PROJECT WAS ON AN AREA WHICH IS MORE THAN ONE ACRE AND APPLYING THE RATIO LAID DOWN IN THE CASE OF 6 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. VANDANA PROPERTIES , THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. 2.4 HOWEVER, THE LD. CIT(A) WAS NOT CONVINCED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. ACCORDING TO HIM, WHAT NEEDS TO BE R IGHTLY CONSIDERED IS THE AREA OF LAND OF THE PROJECT WHICH WAS QUALIFIED AS HOUSI NG PROJECT NAMELY THE REHABILITATION PART OF THE PROJECT IGNORING THE ARE A OF LAND COVERED BY SALE BUILDING WHICH WAS NOT QUALIFIED FOR DEDUCTION U/ S 80IB(10). HE DISTINGUISHED THE DECISIONS IN THE CASE OF BRAHMA ASSOCIATES AND SAROJ SALES ORGANISATION (SUPRA). ACCORDING TO HIM, EVEN THOUGH THE TOTAL A REA OF THE PLOT IS MORE THAN 1 ACRE, THE AREA COVERED BY THE ELIGIBLE COMPONENT OF THE PROJECT ON A STANDALONE BASIS IS LESS THAN ONE ACRE AND THEREFORE, DOES NO T STAND THE TEST LAID DOWN BY THE SPECIAL BENCH OF ITAT IN THE CASE OF BRAHMA ASS OCIATES. SINCE THE ASSESSEE DOES NOT SATISFY THE AREA OF PLOT BEING MO RE THAN 1 ACRE, HE HELD THAT THE DISALLOWANCE MADE BY THE A.O. HAS TO BE CONFIRM ED. HE, HOWEVER, DID NOT ADJUDICATE THE ISSUE REGARDING THE DISALLOWANCE ON THE GROUND OF CONSTRUCTION OF EXCESS COMMERCIAL AREA. 3. AGGRIEVED BY SUCH ORDER OF THE LD. CIT(A), THE A SSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS:- 1(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION OF ` 56,38,963/- THAT WAS CLAIMED UNDER SECTION 80IB(10) OF THE I. TAX ACT, 1961 FOR THE PROJECT OF GAWANPADA, MULUND HOLD ING THAT EVEN THOUGH THE TOTAL AREA OF THE PLOT IS MORE THAN ACRE (1.728 ACRES), THE AREA COVERED BY THE ELIGIBLE COMPONENT OF THE PROJE CT ON A STANDALONE BASIS IS LESS THAN ONE ACRE. 7 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. 1(B) WITHOUT PREJUDICE TO THE ABOVE AND WITHOUT ADM ITTING ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT ADJUDICATING THE ALTERNATE GROUND RELA TING TO ALLOWANCE OF PRO RATE DEDUCTION OF ` 56,38,963/- THAT WAS CLAIMED UNDER SECTION 80IB(10) OF THE I. TAX ACT 1961 FOR THE PRO JECT AT GAWANPADA. 3.1 THE ASSESSEE HAS ALSO TAKEN THE FOLLOWING ADDIT IONAL GROUND:- THE LEARNED CIT(A) HAS ERRED IN LAW AND FACT IN CON FIRMING THE DISALLOWANCE OF DEDUCTION U/S 80-IB(10) OF THE ACT IN RESPECT OF GAVANPADA PROJECT WHICH IS A SLUM REHABILITATION PROJECT APPROVED BY THE CBDT. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF CLAIM U/S 80IB(10) I N RESPECT OF ITS DEVELOPMENT PROJECT AT GAWANPADA, MULUND (E). THE ASSESSEE HAS ALSO COME TO KNOW OF THE NOTIFICATION NO. 67/2010 DATED 03.08.2010 ISSUED BY THE CBDT WHERE UNDER IT HAS NOTIFIED THE SCHEME CONTAINED IN REGULATION 33( 10) OF THE DEVELOPMENT CONTROL REGULATION FOR GREATER MUMBAI, 1991 AS A SC HEME FOR THE PURPOSE OF SECTION 80IB(10) OF THE ACT. HENCE, THE SAID PROJEC T IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. ALL THE MATERIAL FACTS REQUIR ED FOR THE PURPOSE OF ADJUDICATION OF THE ABOVE GROUND ARE ALREADY ON REC ORD AND, THE ADDITIONAL GROUND RAISED BEING PURELY A QUESTION OF LAW AND NO NEW FACTS ARE BROUGHT ON RECORD, THEREFORE, THE SAME SHOULD BE ADMITTED AND ADJUDICATED. FOR THIS PROPOSITION, HE RELIED ON THE FOLLOWING DECISIONS:- 1. NATIONAL THERMAL POWER CORPORATION V. CIT [229 ITR 383) (SC) 2. JUTE CORPORATION OF INDIA LTD. V. CIT [187 ITR 688 (SC) 3. AHMEDABAD ELECTRICITY CO. LTD. V. CIT [199 ITR 351 (BOM) (FB)] 8 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. 5. THE LD. D.R., ON THE OTHER HAND, STRONGLY OPPOSE D THE ADMISSION OF THE ADDITIONAL GROUND. 6. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE FACT THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PURELY A QUESTION OF LAW AND NO NEW FACTS ARE REQUIRED TO BE BROUGHT ON RECORD, THEREFORE, FOLLOW ING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC (SUPRA) A ND JUTE CORPORATION OF INDIA LTD. (SUPRA), THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTED. 6.1 THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT THE ISSUE RELATING TO DEDUCTION U/S 80IB(10) WHERE THE COMMER CIAL AREA EXCEEDS 2000 SQ.FT. IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DECISIONS OF THE TRIBUNAL INCLUDING THE DECISION IN THE CASE OF SARO J SALES ORGANISATION (SUPRA), WHICH HAS SINCE BEEN UPHELD BY THE JURISDICTIONAL H IGH COURT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) DIVI DED THE SIZE OF THE PLOT NOTIONALLY. HOWEVER, IN THE RECORDS OF THE LOCAL AU THORITY THERE WAS NO SUCH DIVISION. HE SUBMITTED THAT AFTER ELABORATE DISCUS SION, THE TRIBUNAL HELD THAT IF THE HOUSING PROJECT IS APPROVED BEFORE 31.3.2005, T HE CONDITION LAID DOWN U/S 80IB(10) REGARDING COMMERCIAL AREA WOULD NOT BE APP LICABLE. SIMILAR VIEW HAS BEEN TAKEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ITO V. PATHARE & ASSOCIATES IN ITA NO. 993/MUM/2009 ORDER DTD. 17.12.2009 FOR A.Y. 2005-06 AND IN THE CASE OF HIRANANDANI AKRUTI JV V. DCIT IN ITA NO. 5416/MUM/2009 FOR A.Y. 2006-07. HE SUBMITTED THAT THE TRIBUNAL IN THE CASE 9 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. OF HIRANANDANI AKRUTI JV HAS DISCUSSED THE ISSUE RE GARDING THE HARDSHIPS FACED BY THE ASSESSEES DUE TO CHANGE IN LAW FROM A. Y. 2005-06 WITH REGARD TO COMMERCIAL AREA OF HOUSING PROJECT. HE ACCORDINGLY SUBMITTED THAT THE ISSUE RELATING TO COMMERCIAL AREA BEING MORE THAN 2000 SQ . FT. IS COVERED BY VARIOUS DECISIONS OF THE CO-ORDINATE BENCHES OF THE TRIBUNA L. SO FAR AS THE ADDITIONAL GROUND IS CONCERNED, HE SUBMITTED THAT IN VIEW OF T HE CBDT INSTRUCTION DT. 3 RD AUG. 2010 REPORTED IN 326 ITR 9 (STATUTE), THE ISSU E NEEDS TO GO BACK TO THE FILE OF LD. CIT(A) SINCE HIS ORDER IS PRIOR TO THE DATE OF NOTIFICATION. SO FAR AS THE ALTERNATE GROUND IS CONCERNED, HE SUBMITTED THAT TH E ASSESSEE HAS TAKEN THE GROUND FOR PRORATA DEDUCTION. HOWEVER, IT DOES NOT ARISE SINCE THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB (10) OF THE ACT FOR THE WHOLE PROJECT. 6.2 THE LD. D.R., ON THE OTHER HAND, WHILE SUPPORTI NG THE ORDER OF THE LD. CIT(A) SUBMITTED THAT THE NOTIFICATION IS NOT APPLI CABLE SINCE THE SCHEME WAS APPROVED EARLIER. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE CIT(A) AND T HE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND THE A.O. DENIED THE BENEFIT OF D EDUCTION U/S 80IB(10) FOR THE GAWANPADA PROJECT ON THE GROUND THAT THE COMMERCIAL AREA FOR THE SAID PROJECT BEING 3960.51 SQ. FT. IS MORE THAN 2000 SQ. FT. WE FIND THE LD. CIT(A) WHILE UPHOLDING THE ORDER OF THE A.O. IN DENYING THE DEDU CTION U/S 80IB(10) HELD THAT SINCE THE AREA OF THE PLOT IS LESS THAN ONE AC RE, THEREFORE, THE ASSESSEE IS 10 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. NOT ENTITLED TO DEDUCTION U/S 80IB(10). HE, THEREF ORE, DID NOT ADJUDICATE THE ISSUE RELATING TO THE COMMERCIAL AREA EXCEEDING 200 0 SQ. FT. SINCE THE APPROVAL TO THE GAWANPADA REHAB HOUSING PROJECT WAS APPROVED ON 16.10.98, A FACT BROUGHT ON RECORD BY THE A.O. AT PAGE -11 OF HIS OR DER AND NOT DISPUTED BY THE LD. D.R., THEREFORE IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SAROJ SALES ORGANISATION (S UPRA) AND HIRANANDANI AKRUTI JV (SUPRA), THE CONDITION PUT BY CLAUSE (D) OF SECTION 80IB(10) WOULD NOT BE APPLICABLE. SO FAR AS THE ISSUE RELATING TO THE AREA OF 1 ACRE IS CONCERNED WE FIND MERIT IN THE SUBMISSIONS OF THE LD. COUNSEL FO R THE ASSESSEE THAT THE MATTER REQUIRES FRESH ADJUDICATION AT THE LEVEL OF LD. CIT(A) IN VIEW OF THE CBDT INSTRUCTION DTD. 3.10.10 SINCE HIS ORDER IS PRIOR T O SUCH CBDT INSTRUCTIONS. WE, THEREFORE, DEEM IT PROPER TO RESTORE THE GROUND S OF APPEAL NO. 1(A) & 1(B) AND THE ADDITIONAL GROUND TO THE FILE OF THE LD. CI T(A) FOR FRESH ADJUDICATION IN THE LIGHT OF OUR ABOVE OBSERVATIONS AND IN ACCORDAN CE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOL D AND DIRECT ACCORDINGLY. THE ABOVE GROUNDS ARE ACCORDINGLY ALLOWED FOR STATI STICAL PURPOSE. 8. IN GROUNDS OF APPEAL NO. 2, THE ASSESSEE HAS CHA LLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF ` 13,34,412/- AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT MADE BY THE A.O. 8.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSE E OWNED 24% SHARES IN CITY GOLD MANAGEMENT SERVICES PVT. LTD. WHICH HAD AN ACC UMULATED PROFIT IN ITS 11 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. BOOKS OF ACCOUNT AT ` 71,61,479/- AS ON 31 ST MARCH, 2005. IN THE BOOKS OF THE ASSESSEE, THE ACCOUNT OF CITY GOLD MANAGEMENT SERVI CES PVT. LTD. REFLECTED A BALANCE OF ` 42,67,555/- ON THE CREDIT SIDE. AFTER CONSIDERING THE ACCUMULATED PROFITS AND THE ADDITIONS ALREADY MADE AS DEEMED DI VIDEND IN THE PREVIOUS YEAR, THE A.O. MADE AN ADDITION OF ` 13,34,412/- IN THE HANDS OF THE ASSESSEE AS DEEMED DIVIDEND IN THE IMPUGNED ASSESSMENT YEAR. 8.2 BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT T HE ASSESSEE AND CITY GOLD MANAGEMENT SERVICES PVT. LTD. ARE BOTH CORPORATE EN TITIES AND AS SUCH THE TRANSACTION BETWEEN THESE COMPANIES WERE IN THE NAT URE OF INTER CORPORATE DEPOSITS. THEREFORE, THE SAME COULD NOT BE TREATED AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. FOR THIS PROPOSITION, THE DECI SION OF THE TRIBUNAL IN THE CASE OF BOMBAY OIL INDUSTRIES LTD. VS. DCIT REPORTED IN 28 SOT 283 (MUM) WAS RELIED UPON WHEREIN IT HAS BEEN HELD THAT CORPORATE DEPOSITS WERE DIFFERENT FROM LOANS AND ADVANCES AND WOULD NOT COME WITHIN T HE PURVIEW OF DEEMED DIVIDEND U/S 2(22)(E) OF THE INCOME-TAX ACT. THE A SSESSEE ALSO TOOK AN ALTERNATE PLEA THAT THE ABOVE TRANSACTIONS WERE IN THE NATURE OF CURRENT ACCOUNT AND NOT IN THE NATURE OF LOAN OR ADVANCE. T HEREFORE, THE SAME CANNOT BE ALLOWED TO BE CONSIDERED FOR THE PURPOSE OF DEEM ED DIVIDEND. 8.3 HOWEVER, THE LD. CIT(A) WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BEFORE HIM. HE ALSO DISTINGUISHED THE DECISION OF THE TRIBUNAL IN THE CASE OF BOMBAY OIL INDUSTRIES LTD. ON THE GROUND THAT THE DUE PROCEDURE LAID DOWN U/S 292/293 AND 372A OF THE COMPANIES ACT HAS NOT B EEN FOLLOWED BY THE 12 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. ASSESSEE. THEREFORE, THE ADVANCES RECEIVED BY THE ASSESSEE COMPANY FROM CITY GOLD MANAGEMENT SERVICES PVT. LTD. ON WHICH THE ASS ESSEE COMPANY OWNS 24% SHARES COULD NOT BE TERMED AS INTER CORPORATE DEPOS ITS. FURTHER, IN THE CASE OF BOMBAY OIL INDUSTRIES (SUPRA) THERE WAS INTEREST PA YMENT ON THE INTER- CORPORATE DEPOSIT WHEREAS IN THE INSTANT CASE NO SU CH PAYMENT OF INTEREST HAS BEEN RECEIVED OR PAID. FURTHER, THERE WAS NO FORMA L INTER-CORPORATE DEPOSIT INVITED OR ACCEPTED. HE ALSO REJECTED THE PLEA THAT THE TRANSACTIONS BETWEEN THE ASSESSEE AND THE CITY GOLD MANAGEMENT SERVICES PVT. LTD. WERE IN THE NATURE OF CURRENT ACCOUNT. ACCORDING TO THE LD. CIT(A) MA KING ENTRIES OF ADVANCES THROUGH AN ACCOUNT TERMED AS CURRENT ACCOUNT WOUL D NOT ALTER THE NATURE OF ADVANCES. HE NOTED THAT THERE ARE PERIODICAL AMO UNTS RECEIVED BY THE ASSESSEE WHICH ARE CLEARLY IN THE NATURE OF ADVANCE S RECEIVED BY THE ASSESSEE TO BE REPAID LATER. NONE OF THE TRANSACTIONS RELAT ES TO ANY TRADING ACTIVITY BETWEEN THE PARTIES. HE ACCORDINGLY UPHELD THE ACTI ON OF THE A.O. 9. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 10. AFTER HEARING BOTH THE SIDES, WE FIND SIMILAR I SSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE IMMEDIA TELY PRECEDING A.Y. WE FIND THE TRIBUNAL VIDE ITS ORDER IN ITA NO. 4872/M/2009 FOR A.Y. 2004-05 DATED 25.8.2010 HAS DISCUSSED THE ISSUE AT PARA 59 TO 61 AND ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING AS UNDER:- 13 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. 59. WE NOW EXAMINE WHETHER THE FINANCIAL TRANSACTIO NS BETWEEN SISTER CONCERNS, WHICH ARE ADMITTEDLY WORKING TOGETHER IN MANY CASES FOR THE SAME PROJECT, AFTER DIVIDING THEIR FUNCTIONS, THROUGH UN DER THE SAME MANAGEMENT, CAN BE CONSIDERED LOANS OR ADVANCES. EVERY FINANCIAL TR ANSACTION CANNOT BE A LOAN OR ADVANCE. COMMERCIAL EXPEDIENCY, BUSINESS NECESSITY AND EMERGENCY NEEDS RESULT IN FINANCIAL ACCOMMODATION BETWEEN SISTER CO NCERNS. THIS CANNOT BE TERMED EITHER A LOAN OR AN ADVANCE. THESE TRANSFER OF FUND S ARE WITH THE OBJECT OF ACHIEVING A COMMON OBJECTIVE. 60. IN THE CASE OF M/S CHANDRA CEMENT VS. DCIT 68 T TJ (JAIPUR) 35, THE JAIPUR BENCH HELD AS FOLLOWS : WHEN ONE SINGLE INDIVIDUAL IS MANAGING THE AFFAIR S OF TWO CONCERNS AND THE DECISION TO TRANSFER THE FUNDS FROM ONE CONCERN TO ANOTHER OR TO REPAY THE FUNDS COULD HAVE BEEN SAID TO HAVE BEEN LARGELY INFLUENCED BY THE SAME INDIVIDUAL, IT CANNOT BE SAID THAT TRANSACTION PARTAKE THE NATURE OF EITHER DEPOSIT OR LOAN. THE HONBLE MADHYA PRADESH HIGH COURT HAS IN THE CASE OF PATIRAM JAIN HELD THAT : ITA NOS. 4869 TO 4 872/MUM/2009 M/S. ACKRUTI CITY LTD. IT HAS ALSO BEEN ACCEPTED BY THE RESPONDENTS THAT T HE TRANSACTIONS MADE BETWEEN THE TWO SISTER CONCERNS WERE UNDER EXCEPTIO NAL CIRCUMSTANCES TO ACCOMMODATE THE EMERGENCY NEEDS OF THE SISTER CONCE RN FOR A VERY SHORT AND TEMPORARY PERIOD. AS SUCH, IT DID NOT AMOUNT TO A L OAN OR DEPOSIT AS DEFINED UNDER SECTION 269SS OF THE INCOME-TAX ACT. THE COCHIN BENCH OF THE TRIBUNAL IN MUTHOOT M. GEOR GE BANKERS VS. ACIT (1994) 47 TTJ (COCHIN) 435 HELD AS UNDER : AGAINST THE BACKGROUND, WE EXAMINE THE TRANSACTION S BETWEEN THE SISTER CONCERNS AND THE ASSESSEE THERE ARE TRANSFER OF FUN DS FROM AND TO THE SISTER CONCERNS. THERE IS NO EVIDENCE TO SHOW THAT MONEY WAS LOANED OR KEPT DEPOSITED FOR A FIXED PERIOD OR REPAYABLE ON D EMAND. FURTHER, THE SISTER CONCERNS AND THE ASSESSEE ARE OWNED BY THE S AME FAMILY GROUP OF PEOPLE WITH A COMMON MANAGING PARTNER WITH CENTRALI SED ACCOUNTS UNDER THE SAME ROOF. TRANSFER OF FUNDS HAS TAKEN PLACE IN A WHIMSICAL MANNER. THEREFORE, IT IS RATHER DIFFICULT TO SAY THAT THE T RANSACTIONS ARE IN THE NATURE OF DEPOSITS OR LOANS WITH CERTAIN CONDITIONS ATTACH ED TO THEM, EITHER AS REGARDS THE PERIOD OF SUCH DEPOSITS OR LOANS OR WIT H REGARD TO THEIR REPAYMENTS. FROM THE COPIES OF THE ACCOUNTS FURNISH ED BEFORE US ALL THAT CAN BE GATHERED IS THAT FUNDS HAVE BEEN TRANSFERRED FROM AND TO THE SISTER CONCERNS AS AND WHEN REQUIRED AND SINCE THE MANAGIN G PARTNER IS COMMON TO ALL THE SISTER CONCERNS, THE DECISION TO TRANSFER THE FUNDS FROM ONE CONCERN TO ANOTHER CONCERN OR TO REPAY THE FUND S COULD BE SAID TO HAVE BEEN LARGELY INFLUENCED BY THE SAME INDIVIDUAL. IN OTHER WORDS, THE DECISION TO GIVE AND THE DECISION TO TAKE RESTED WI TH EITHER THE SAME GROUP OF PEOPLE OR WITH THE SAME INDIVIDUAL. IN SUCH CIRC UMSTANCES OF THE CASE, WE HOLD THAT THE TRANSACTION INTER SE BETWEEN THE S ISTER CONCERNS AND THE ASSESSEE CANNOT PARTAKE OR THE NATURE OF EITHER DE POSIT OR LOAN THOUGH INTEREST MIGHT HAVE BEEN PAID ON THE SAME. EXCEPTIN G FOR THE TRANSFER OF FUNDS BEING WITNESSED IN THE BOOKS OF ACCOUNT OF TH E CONCERNED FIRMS, NO 14 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. MATERIAL IS ON RECORD TO SHOW ISSUE OF RECEIPT OR P RONOTE IN EVIDENCE OF ACCEPTING DEPOSITS OR LOANS AS UNDERSTOOD IN COMMON PARLANCE. IT ONLY REPRESENTS DIVERSION OF FUNDS FROM ONE CONCERN TO A NOTHER DEPENDING UPON THE EXIGENCIES OF THE BUSINESS. FROM THE ABOVE, IT IS CLEAR THAT TRANSACTION BETWEE N SISTER CONCERNS ARE JUST DIVERSION OF FUNDS FOR MEETING VISTITUDES OF BUSINE SS AND ARE NEITHER LOANS OR ADVANCES. THESE DECISIONS SUPPORT THE VIEW THAT CUR RENT ACCOUNT TRANSACTIONS BETWEEN THE SISTER CONCERNS CANNOT BE CALLED LOANS OR ADVANCES FOR THE PURPOSE OF INVOKING SECTION 2(22)(E). THE TERM ADVANCES IN T HIS SECTION IS USED ALONG WITH THE WORD LOAN AND THIS WORD DOES NOT INCLUDE TRAN SFER OF FUNDS FOR TRADE OR BUSINESS ADVANCES AS HELD BY THE HONBLE DELHI HIGH COURT IN CIT V. RAJ KUMAR (2009) 181 TAXMAN 155 (DEL.). 61. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. AMBASSADOR TRAVELS P. LTD. (2009) 318 ITR 376 (DEL) HELD THAT WHEN THE AS SESSEE ENTERED INTO NORMAL BUSINESS TRANSACTION AS A PART OF DAY TO DAY BUSINE SS ACTIVITY, THIS CANNOT BE TREATED AS LOANS OR AS ADVANCES. THE MUMBAI A BEN CH OF THE TRIBUNAL IN THE CASE OF N.H. SECURITIES LTD. VS. DCIT REPORTED IN 1 1 SOT 302 HELD THAT WHERE PAYMENTS ARE MADE BY A COMPANY IN THE COURSE OF CAR RYING ON ITS REGULAR BUSINESS THROUGH A MUTUAL, OPEN AND CURRENT ACCOUNT TO A RELATED PARTY DO NOT COME UNDER THE PURVIEW OF SECTION 2(22)(E). APPLYIN G THE PROPOSITIONS LAID DOWN IN THESE CASE LAWS FOR THE FACTS OF THE CASE, WE ACCEP T THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE TRANSACTIONS BETW EEN THESE SISTER CONCERNS ARE BUSINESS TRANSACTIONS AND ARE GUIDED BY COMMERCIAL EXPEDIENCY AND ARE MERE DIVERSION OF FUNDS AND ARE NEITHER A LOAN OR ADVANC E AS CONTEMPLATED U/S 2(22)(E). THUS THIS GROUND OF THE ASSESSEE IS ALLOW ED. 10.1 SINCE THE FACTS IN THE IMPUGNED A.YRS. ARE IDE NTICAL TO THAT OF THE FACTS IN A.Y. 04-05, THEREFORE, RESPECTFULLY FOLLOWING THE D ECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE AGAINST THE ORDER OF THE TRIBUNAL SO AS TO T AKE A CONTRARY VIEW, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. ITA NO. 4851/MUM/2009 (BY REVENUE FOR A.Y. 2005-06) 11. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN DIRECTING 15 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IA(4)(III) AMOUNTING TO RS.10,59,56,901/- BY IGNORING THE FACT THAT DISALLOWANCE WAS MADE BY THE ASSESSING OF FICER IN ACCORDANCE WITH RULE 18C OF THE INCOME-TAX RULES, 1 962 AS THE ASSESSEE HAD NOT BEEN NOTIFIED BY THE CBDT IN THE A SSESSMENT YEAR 2005-06. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN ADMITTING THE ADDITIONAL EVIDENCE IN THE FORM OF CBDTS LETTE R DATED 07/11/2005 WITHOUT GIVING ANY REASONABLE OPPORTUNIT Y TO THE ASSESSING OFFICER IN CONTRAVENTION OF PROVISIONS OF RULE 46A OF THE INCOME-TAX RULES, 1962. 3. THE APPELLANT PRAYS THAT THE ORDER OF COMMISSION OF INCOME- TAX (APPEAL) ON THE ABOVE GROUND BE SET ASIDE AND T HAT THE ITO/AC/DC BE RESTORED. THE APPELLANT CRAVES LEAVE T O AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESS ARY. 11.1 FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. D URING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF ` 10,59,56,901/- U/S 80A(4)(III) OF THE ACT. HE NOTE D THAT IN RESPECT OF THE SAME PROPERTIES, THE ASSESSEE HAD OFFERED THE RENTAL INC OME AS INCOME FROM HOUSE PROPERTY IN THE EARLIER ASSESSMENT YEARS FROM 2001 -02 TO 2004-05 IN THE ORIGINAL RETURN OF INCOME FILED U/S 139(1) OF THE A CT. THE ASSESSEE HAD ALSO CLAIMED STANDARD DEDUCTION U/S 24 OF THE ACT ON THE RENTAL INCOME IN THOSE YEARS. THE DETAILS OF SUCH INCOME FROM HOUSE PROPE RTY AND THE DEDUCTION U/S 24 FOR A.YRS. 2001-02 TO 2004-05 ARE GIVEN IN A.OS ORDER AT PAGE 23 PARA NO. 5.2. HOWEVER, THE ASSESSEE IN THE RETURN FILED U/S 153A, HAS TREATED THE LEASE RENTAL FROM THE INDUSTRIAL PARKS AS BUSINESS INCOM E AND HAS WITHDRAWN THE DEDUCTION CLAIMED U/S 24 IN RESPECT OF THE SAME. T HE ASSESSEE HAD ALSO GIVEN A NOTE IN THE RETURN FILED U/S 153A WHICH HAS BEEN REPRODUCED BY THE A.O.IN HIS ORDER AT PAGE NO. 24. THE A.O. ASKED THE ASSES SEE TO EXPLAIN WHY THE 16 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. RENTAL INCOME SHOULD NOT BE CONSIDERED AS INCOME F ROM HOUSE PROPERTY AND THE DEDUCTION U/S 80IA(4) SHOULD NOT BE DISALLOWED. IT WAS SUBMITTED THAT THE INDUSTRIAL PARK DEVELOPED BY THE ASSESSEE ARE APPRO VED VIDE NOTIFICATION NO. 129 OF 2006 DATED 5 TH JUNE, 2006, THEREFORE THE ENTIRE PROFIT OF THE IND USTRIAL PARK IS ELIGIBLE FOR DEDUCTION U/S 80IA(4)(III) OF THE I.T. ACT. 11.2 HOWEVER, THE A.O. WAS NOT CONVINCED WITH THE E XPLANATION GIVEN BY THE ASSESSEE. HE NOTED THAT THE NOTIFICATION BY CBDT W AS ISSUED ON 5.6.2006 AND 12.7.2006 WHICH FALLS IN A.Y. 2007-08. ACCORDING T O THE A.O., AS PER RULE 18C OF THE INCOME TAX RULES, 1962, THE ASSESSEE HAD NOT BEEN NOTIFIED BY THE CBDT IN THE A.YRS. 2005-06 AND 2006-07. THEREFORE, THE A SSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IA(4)(III) FOR THE A.Y. 2005-06 AND 2006-07. HE ACCORDINGLY DISALLOWED THE CLAIM OF DEDUCTION U/S 80IA(4)(III) AMOUNTING TO ` 10,59,66,901/-. 11.3 BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT T HE ASSESSEE HAS DEVELOPED AND OWNS NOTIFIED INDUSTRIAL PARK [PHASE I, II & II I AT MIDC- MAROL, ANDHERI (E)], THE INCOME ARISING FROM THIS INDUSTRIAL PARK IS CLAIMED U/S 80IA(4)(III) FROM A.Y. 2005-06. THE ASSESSEE FURNISHED THE COPY OF T HE APPLICATIONS UNDER THE INDUSTRIAL PARK SCHEME DULY MADE TO THE CBDT AND TH E NOTIFICATION. THE CHRONOLOGICAL EVENTS IN RESPECT OF THE APPROVAL WAS ALSO FURNISHED BEFORE THE LD. CIT(A). RULE 18-C OF THE INCOME TAX RULES AND CBDT NOTIFICATION FOR DEDUCTION U/S 80IA(4)(III) IN THE OFFICIAL GAZETTEE ON 5.6.2006 WERE BROUGHT TO 17 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. THE NOTICE OF THE LD. CIT(A). VARIOUS ARGUMENTS WER E ALSO ADVANCED BEFORE THE LD. CIT(A) JUSTIFYING THE CLAIM OF DEDUCTION U/S 80 IA(4)(III). 11.4 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSE E, THE LD. CIT(A) HELD THAT THE ASSESSEE IS ENTITLED TO BENEFIT OF DEDUCTI ON U/S 80IA(4) FOR THE IMPUGNED A.Y. THE RELEVANT OBSERVATION OF THE LD. CIT(A) AT PARA NO. 5.4 TO 5.4.3 READS AS UNDER:- 5.4 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE WRITTEN SUBMISSIONS MADE BY THE AR AND FIND MERIT IN THEM. IF THE ENTIRE SCHEME OF INDUSTRIAL PARK TOGETHER WITH THE PROCEDURES LAID DOWN BY THE LEGISLATURE AND THE LANGUAGE USED BY THE IMPLEMENTING AGENCIES WHILE RAISING THE QUERIES AND GIVING APPROVALS ARE CONSIDERED IN TANDEM, THE CONTENTION OF THE APPELLANT SEEM TO HAVE MERIT. FIRSTLY, THE PROVISIO NS OF SEC.80IA(2) NOWHERE PROVIDE THAT THE DEDUCTION WAS ALLOWABLE FROM THE DATE OF APPROVAL BY THE CBDT ONLY. IN THE ABSENCE OF THESE WORDS, SUCH CONDITIONS COULD NOT BE IMPUTED T O THE STATUTE. SECONDLY, THE APPROVAL OF THE COMMERCE MIN ISTRY THROUGH THE EMPOWERED COMMITTEE (OF WHICH THE CHA RIMAN, CBDT OR HIS REPRESENTATIVE IS A MEMBER), WAS OBTAIN ED ON 31.12.2004. THIRDLY, THE LANGUAGE OF RULE 18C(4) IN DIRECTLY IMPLIES THAT THE CBDT SHALL NOTIFY THE SCHEME SUO-MOTO ONCE THE MINISTRY OF COMMERCE GRANTS APPROVAL ESPECIALLY WHEN A COPY OF THE APPROVAL IS MARKED DIRECTLY TO THE CBDT . FOURTHLY, AS PER ONE OF THE CONDITIONS OF THE APPROVAL OF LET TER, THE BENEFIT U/S.80IA(4) WOULD BECOME AVAILABLE ONLY AFTER THE P ROPOSED NUMBER OF INDUSTRIAL UNITS WERE LOCATED IN THE INDU STRIAL PARK. FIFTHLY, THE WORDING USED BY THE CBDT WHILE RAISING QUERIES IN THE PROCESS OF CONSIDERING THE APPLICATION FOR ISSU E OF NOTIFICATION, AS BROUGHT OUT BY THE APPELLANT IN PA RA 5.3.5 ABOVE ALSO INDICATES THAT THE APPELLANT WAS ELIGIBL E FOR DEDUCTION U/S.80IA BEFORE ITS BEING NOTIFIED BY THE CBDT. LASTLY, THE CBDT NOTIFICATION ITSELF REITERATES THE CONDITION THAT THE TAX BENEFIT UNDER THE ACT COULD BE AVAILED ONLY AFTER THE NUMBER OF UNITS INDICATED IN THAT NOTIFICATION WE RE LOCATED IN THE INDUSTRIAL PARK. 5.4.1 THE AR OF THE APPELLANT HAS BROUGHT OUT VERY CLEARLY AS TO HOW EACH OF THE CONDITIONS LAID DOWN IN SEC.80IA (4) HAVE BEEN SATISFIED BY THE APPELLANT. THE AO ALSO DID NO T FIND ANY 18 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. INFIRMITY IN THE CLAIM MADE BY THE APPELLANT EXCEPT THAT THE NOTIFICATION WAS ISSUED BY THE CBDT DURING THE PERI OD BEYOND THE FINANCIAL YEAR ENDING ON 31.03.2005. THE FACT T HAT THE INDUSTRIAL PARK WAS DULY APPROVED BY THE EMPOWERED COMMITTEE AND ALSO BY THE MINISTRY OF COMMERCE AND INDUSTRY ON 31.12.2004 IS NOT IN DISPUTE. IT IS ALSO CLEARLY MENTIONED IN THE I.T. RULE 18C CLAUSE (4) THAT UPON APPROVAL BY THE MINISTRY OF COMMERCE, THE CBDT SHALL NOTIFY INDUSTRIAL PARKS FOR BENEFITS U/S.80IA. FURTHER, THE COPY OF THE APPROV AL OF MINISTRY OF COMMERCE HAVING BEEN MARKED DIRECTLY TO CBDT AND CBDT BEING REPRESENTED ON THE EMPOWERED COMMITTEE COMP ETENT TO GIVE APPROVAL ON BEHALF OF THE MINISTRY OF COMMERCE , THERE IS MERIT IN THE CLAIM OF THE APPELLANT THAT AN IMPRESS ION COULD BE FORMED THAT THE APPROVAL OF THE CBDT WOULD COME SUO-MOTO . AT ANY RATE, THE CBDT APPROVAL ALSO DOES NOT HAVE ANY MENTION OF THE DATE OF APPROVAL OR THE DATE FROM WHICH THE APP ROVAL WOULD BECOME EFFECTIVE. IN FACT, THE CBDT NOTIFICATION SP EAKS OF ELIGIBILITY ONLY ONCE THE NUMBER OF UNITS INDICAT ED WERE LOCATED IN THE INDUSTRIAL PARK. HENCE, THE CBDT N OTIFICATION NOWHERE SUGGESTED THAT THE DATE OF NOTIFICATION ONL Y WOULD BE THE CUT OFF DATE FOR ELIGIBILITY. 5.4.2 IN VIEW OF THE DISCUSSION IN PARA 5.4 ABOVE, IT IS HELD THAT THE BENEFIT OF THE CBDT NOTIFICATION WOULD BE AVAIL ABLE ONCE THE NUMBER OF UNITS INDICATED IN THE NOTIFICATION WERE LOCATED IN THE INDUSTRIAL PARK. IN THE CASE UNDER CONSIDERAT ION, THE LATEST DATE BY WHICH ALL THE PHASES OF INDUSTRIAL PARK WER E COMPLETED AND THE COMPLETION CERTIFICATES WERE OBTAINED BEING 24.12.2003, THE BENEFIT OF SECTION 80IA(4) IS AVAIL ABLE TO THE APPELLANT DURING THE ASSESSMENT YEAR UNDER CONSIDER ATION AS CLAIMED. 5.4.3 THIS GROUND OF APPEAL IS THEREFORE, ALLOWED. 13.4 AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), T HE REVENUE IS IN APPEAL BEFORE US. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE CIT(A) AND T HE PAPER BOOK FILED ON 19 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND RULE 18-C OF THE INCOME TAX RULE S, 1962 READS AS UNDER:- 18C. (1) THE UNDERTAKING SHALL BEGIN TO OPERATE AN INDUSTRIAL PARK DURING THE PERIOD BEGINNING ON THE IST DAY OF APRIL 1997, AND ENDING ON THE 31 ST DAY OF MARCH 2002. [(1A) THE UNDERTAKING SHALL BEGIN TO DEVELOP OR DEV ELOP AND OPERATE OR MAINTAIN AND OPERATE A SPECIAL ECONOMIC ZONE ANY TIME DURING THE PERIOD BEGINNING ON THE IST DAY OF APRIL, 2001 AND ENDING ON 31 ST DAY OF MARCH, 2006.] (2) THE UNDERTAKING SHALL BE DULY APPROVED BY THE M INISTRY OF [COMMERCE AND INDUSTRY IN THE CENTRAL GOVERNMENT UNDER THE SCHEME FOR INDUSTRIAL PARK OF SPECIAL ECONOMIC ZONES] NOTIFIED BY THAT MINISTRY. (3) THE UNDERTAKING SHALL CONTINUE TO FULFIL THE CO NDITIONS ENVISAGED IN THE SCHEME. (4) ON APPROVAL UNDER SUB-RULE (2), THE CENTRAL BOA RD OF DIRECT TAXES SHALL NOTIFY INDUSTRIAL PARKS FOR BENEFITS UNDER SECTION 80IA] 12.1 WE FIND THE A.O. DISALLOWED THE CLAIM OF DEDUC TION U/S 80IA(4)(III) ON THE GROUND THAT THE CBDT APPROVAL WAS GIVEN ON 5.6.06 A ND 12.7.06 AND THEREFORE, THE SAME RELATES TO A.Y. 2007-08 ONLY. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE, WE FIND THE ASSESSEE MAD E THE APPLICATION TO THE MEMBER CBDT, NEW DELHI FOR NOTIFICATION ON 16.6.05 I.E., BEFORE FILING ITS RETURN OF INCOME FOR A.Y. 2005-06, CLAIMING DEDUCTION U/S. 80IA(4)(III). THE ABOVE FACT BROUGHT ON RECORD BY THE LD. CIT(A) AT PARA NO. 5.3 OF HIS ORDER HAS NOT BEEN CONTROVERTED BY THE LD. D.R. WE FIND AS PER RULE 1 8-C(4), THE CBDT IS REQUIRED TO ISSUE THE REQUISITE NOTIFICATION ONCE THE APPROV AL IS GIVEN BY THE COMMERCE MINISTRY. IN THE INSTANT CASE, WE FIND THE MINISTR Y OF COMMERCE AND INDUSTRY VIDE THEIR LETTER DATED 29 TH AUG. 2002 HAD APPROVED THE PROPOSAL OF THE ASSESSEE COMPANY FOR SETTING UP OF THE INDUSTRIAL P ARK IN TERMS OF THE SCHEME 20 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. NOTIFIED BY THE DEPARTMENT IN EXERCISE OF THE POWER S U/S 80IA(4)(III) SUBJECT TO CERTAIN CONDITIONS. WE FIND THE COMMERCE MINISTRY VIDE THEIR LETTER DATED 12 TH NOV. 2003 HAS MODIFIED THE NOTIFICATION OF THE APPR OVAL LETTER DTD. 29 TH AUG. 2002. WE FIND THE MINISTRY OF COMMERCE AND INDUSTR Y AGAIN VIDE THEIR LETTER DTD. 31 ST DECEMBER, 2004 HAS APPROVED THE REVISED APPLICATIO N FOR MODIFICATION WHEREIN IT WAS MENTIONED THAT INCOME-TAX BENEFIT U/ S 80IA(4)(III) WILL BE AVAILABLE ONLY IF THE PROPOSED NUMBER OF INDUSTRIAL UNITS MENTIONED IN PARA 1 (VII) OF THIS APPROVAL LETTER ARE LOCATED IN THE IN DUSTRIAL PARK. WE FIND, A COPY OF SUCH NOTIFICATION WAS FORWARDED TO THE DIRECTOR (IT A-I), OFFICE OF CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, NORTH BLOCK , NEW DELHI AND A COPY OF WHICH IS PLACED AT PAPER BOOK PAGE 15 TO 17. WE FI ND THE ASSESSEE COMPANY HAS FULFILLED ALL THE REQUISITE CONDITIONS FOR CLAI MING DEDUCTION U/S 80IA(4)(III) OF THE ACT. THE REQUISITE NUMBER OF UNITS LOCATED IN INDUSTRIAL PARK WERE COMPLETED AND THE COMPLETION CERTIFICATES WERE ALSO OBTAINED BY 24 TH DECEMBER 2003, A FINDING GIVEN BY THE LD. CIT(A) AND NOT CON TROVERTED BY THE LD. D.R. UNDER THESE CIRCUMSTANCES AND IN VIEW OF THE DETAIL ED ORDER PASSED BY THE LD. CIT(A), WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE CIT(A) ALLOWING THE CLAIM OF DEDUCTION U/S 80IA(4)(III). THE GROUND NO. 1 RA ISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 12.2 SO FAR AS GROUND NO. 2 RELATING TO ADMISSION O F ADDITIONAL EVIDENCE IS CONCERNED, WE FIND THE LETTER FROM CBDT IS DTD. 7.1 1.2005 AND THE ASSESSMENT ORDER WAS PASSED ON 30.12.2008 ( A COPY OF WHICH IS PLACED AT PAPER BOOK PAGE 21 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. 20 TO 22). WE FIND FROM THE CERTIFICATE OF THE PAP ER BOOK THAT THE ABOVE DOCUMENT WAS VERY MUCH AVAILABLE WITH THE A.O. THE LD. D.R. COULD NOT CONTROVERT OR BROUGHT ANY MATERIAL TO SHOW THAT SUC H LETTER ADDRESSED BY CBDT TO THE ASSESSEE WAS NOT BEFORE THE A.O. THEREFORE, GROUND NO. 2 RAISED BY THE REVENUE BEING DEVOID OF ANY MERIT IS DISMISSED. 13. GROUND OF APPEAL NO.3 BEING GENERAL IN NATURE I S DISMISSED. ITA NO. 4852/MUM/2009 (BY REVENUE FOR A.Y. 2006-07) 14. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IA(4)(III) AMOUNTING TO ` 27,92,82,637/- BY IGNORING THE FACT THAT DISALLOWANCE WAS MADE BY THE ASSESSING OF FICER IN ACCORDANCE WITH RULE 18C OF THE INCOME-TAX RULES, 1 962 AS THE ASSESSEE HAD NOT BEEN NOTIFIED BY THE CBDT IN THE A SSESSMENT YEAR 2005-06. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN ADMITTING THE ADDITIONAL EVIDENCE IN THE FORM OF CBDTS LETTE R DATED 07/11/2005 WITHOUT GIVING ANY REASONABLE OPPORTUNIT Y TO THE ASSESSING OFFICER IN CONTRAVENTION OF PROVISIONS OF RULE 46A OF THE INCOME-TAX RULES, 1962. 3. THE APPELLANT PRAYS THAT THE ORDER OF COMMISSION OF INCOME- TAX (APPEAL) ON THE ABOVE GROUND BE SET ASIDE AND T HAT THE ITO/AC/DC BE RESTORED. THE APPELLANT CRAVES LEAVE T O AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESS ARY. 14.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E GROUNDS BY THE REVENUE ARE IDENTICAL TO GROUNDS OF APPEAL IN ITA NO. 4851/ MUM/2009 FOR A.Y. 2005- 05. WE HAVE ALREADY DECIDED THE ISSUES AND THE ABO VE GROUNDS RAISED BY THE 22 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. REVENUE HAVE BEEN DISMISSED. FOLLOWING THE SAME RAT IO, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. ITA NO. 4874/MUM/2009 (BY ASSESSEE FOR A.Y. 2006-07 ) 15. GROUND NO. 1 BY THE ASSESSEE READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEDU CTION OF ` 3,70,87,329/- THAT WAS CLAIMED UNDER SECTION 80IB(1 0) OF THE I. TAX ACT 1961 FOR THE PROJECT AT ASHRAM CHAWL HOLDING TH AT EVEN THOUGH THE TOTAL AREA OF THE PLOT IS MORE THAN ONE ACRE (5 6546.84 SQ.FT.), THE AREA COVERED BY THE ELIGIBLE COMPONENT OF THE PROJE CT ON A STANDALONE BASIS IS LESS THAN ONE ACRE. 15.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESS EE HAS BEEN AWARDED SLUM REHABILITATION PROJECTS AT ASHRAM CHAWL IN VILE PAR LE (E), MUMBAI THROUGH A LETTER OF APPROVAL ISSUED BY SLUM REHABILITATION AU THORITIES (HEREINAFTER REFERRED AS SRA) ON 10 TH FEBRUARY 1998 BEARING REF. NO. SRA/DY. CE/83/KE/ML/LOL. THIS WAS THE FIRST LETTER OF APPR OVAL RECEIVED FROM THE SRA AUTHORITY. SUBSEQUENTLY THE ASSESSEE RECEIVED SECOND LETTER OF APPROVAL FROM SRA ON 13 TH JULY, 2001. THE ASSESSEE HAS BEEN GRANTED BUILDING -WISE COMMENCEMENT CERTIFICATES AND OBTAINED OCCUPATION C ERTIFICATES FOR ALL THE BUILDINGS DEVELOPED ON REHAB PORTION AS ASHRAM CHAW L PROJECT AT VILE PARLE (E), MUMBAI. THE BUILDING WISE DETAILS OF COMMENCE MENT CERTIFICATE AND OCCUPATION CERTIFICATE ARE AS UNDER:- 23 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. REHAB BUILDING DATE OF COMMENCEMENT CERTIFICATE DATE OF OCCUPATION CERTIFICATE BUILDING NO. 1 21.08.1999 11.10.2001 BUILDING NO. 1B 21.08.2009 25.06.2005 BUILDING NO. 2 20.10.1999 17.12.2003 BUILDING NO. 3A 10.09.1999 04.11.2003 BUILDING NO. 3B 10.09.1999 04.11.2003 ACCORDING TO THE INCOME TAX ACT, 1961, ONE OF THE C ONDITIONS WHICH NEEDS TO BE FULFILLED IN ORDER TO CLAIM DEDUCTION U/S 80IB(10) IS THAT THE PROJECT SHOULD BE ON A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE A CRE. THE A.O. DISALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10) ON THE GROUND T HAT TOTAL PLOT SIZE OF THE ASHRAM CHAWL PROJECT IS LESS THAN ONE ACRE. 15.2 BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT TH E TOTAL PLOT AREA OF ASHRAM CHAWL WAS 5253.33 SQ. MT. (EQUIVALENT TO 1.298 ACRE S) WHICH WAS MORE THAN 1 ACRE. IT WAS DIVIDED BETWEEN SLUM REHAB BUILDING P ORTION 1633.98 SQ. MT. (EQUIVALENT TO 0.403 ACRE) AND SALE BUILDING PORTIO N 2120.30 SQ. FT. WHICH IS EQUIVALENT 0.524 ACRES. THE REMAINING PORTION OF 1 499.05 SQ. MT. WAS USED FOR ROAD. IT WAS ARGUED THAT SINCE THE PROJECT FOR WHI CH DEDUCTION CLAIMED U/S 80IB(10) WAS SITUATED ON AN AREA WHICH WAS MORE THA N ONE ACRE, THE ASSESSEE OUGHT TO BE ALLOWED DEDUCTION . IT WAS ARGUED THAT IN DETERMINING THE AREA OF LAND, THE A.O. HAD CONSIDERED ONLY THE AREA OF THOS E BUILDINGS FOR WHICH DEDUCTION WAS CLAIMED. HE HAS NOT TAKEN INTO CONSI DERATION THE AREA OF THE BUILDINGS FOR WHICH NO DEDUCTION U/S 80IB(10) WAS C LAIMED BUT WHICH FORMED PART OF ASHRAM CHAWL PROJECT. THE DECISION OF THE TRIBUNAL IN THE CASE OF 24 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. VANDANA PROPERTIES V. ACIT IN ITA NO. 1253/M/2007 W AS BROUGHT TO THE NOTICE OF THE LD. CIT(A). 15.3 HOWEVER, THE LD. CIT(A) WAS NOT CONVINCED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND UPHELD THE ACTION OF THE A.O. WHILE DOING SO, HE HELD THAT EVEN THOUGH THE TOTAL AREA OF THE PLOT IS MORE THAN 1 ACRE, THE AREA COVERED BY THE ELIGIBLE COMPONENT OF THE PROJECT ON A STANDALO NE BASIS IS LESS THAN ONE ACRE AND THEREFORE DOES NOT STAND THE TEST LAID DOW N BY THE SPECIAL BENCH OF TRIBUNAL IN THE CASE OF BRAHMA ASSOCIATES. HE, ACCO RDINGLY, UPHELD THE ACTION OF THE A.O. 16. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), TH E ASSESSEE IS IN APPEAL BEFORE US. 17. AFTER HEARING BOTH THE SIDE, WE FIND SIMILAR IS SUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN THE PRECEDING YE ARS I.E. 2002-03 & 2004-05 FOR ASHRAM CHAWL PROJECT. WE FIND THE TRIBUNAL VID E ITS CONSOLIDATED ORDER AT PARA NO. 55 & 57 IN ITA NO. 4869/M/2009 TO 4872/M/2 009 FOR A.YRS. 2001-02 TO 2004-05 DATED 25.8.10 HAS ALLOWED THE CLAIM OF T HE ASSESSEE BY HOLDING AS UNDER :- PARA 55: AS FAR AS THE ISSUES ON MERITS ARE CONCER NED, FOR THE ASSESSMENT YEAR 2002-03, BOTH THE PARTIES SUBMITTED THAT THE FACTS AND ARGUMENTS ARE SIMILAR TO THE FACTS AND ARGUMENT S FOR THE ASSESSMENT YEAR 2001-02 THOUGH THE PROJECT IN QUEST ION IS AT ASHRAM CHAWL. AS THE PLOT AREA RECORDED BY THE CIT (APPEALS) IS 1.298 ACRES FOR THE SAME REASONS GIVEN WHILE DISPOS ING OF ITA NO. 25 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. 4869/MUM/2009 FOR THE ASSESSMENT YEAR 2001-02, WE A LLOW THIS GROUND OF THE ASSESSEE. PARA 57: COMING TO ASSESSMENT YEAR 2004-05 BOTH THE PARTIES SUBMITTED THAT GROUND NO. 1 IS IN RESPECT OF PROJEC T ASHRAM CHAWL AND THE ISSUE IS IDENTICAL TO GROUND NO. 1 FOR THE ASSESSMENT YEAR 2002-03 AND FOR THE SAME REASONS THAT ARE GIVEN WHI LE DEALING WITH THE ISSUE FOR THE ASSESSMENT YEAR 2001-02, WE ALLOW THIS GROUND. 17.1 SINCE THE FACTS OF THE IMPUGNED A.Y. ARE IDENT ICAL TO THE FACTS IN THE A.Y. 2002-03 AND 2004-05, THEREFORE, RESPECTFULLY FOLLOW ING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE AND IN ABSENCE OF A NY DISTINGUISHING FEATURE BROUGHT TO OUR NOTICE BY THE LD. D.R., THIS GROUND BY THE ASSESSEE IS ALLOWED. 18. GROUNDS OF APPEAL NO. 2(A) & 2(B) READ AS UNDER :- 2(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A), ERRED IN CONFIRMING THE ADDITION OF ` 18,11,484/- BEING THE DIFFERENCE BETWEEN THE SALE CONSIDERATION OF ` 2,67,88,516/- AT WHICH FLATS ON 5 TH , 6 TH AND 7 TH FLOOR OF AKRUTI ORION WERE ACTUALLY SOLD AND PRICE OF ` 2,86,00,000/- STATED IN THE BROKERS BILLS THAT WERE SEIZED IN THE COURSE OF THE SEARCH AS ALLEGED UNDISCLOSED SALES. 2(B) WITHOUT PREJUDICE TO THE ABOVE AND WITHOUT ADM ITTING ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF ENTIRE ALLEGED UNDISCLOS ED SALES OF ` 18,11,484/- AS AGAINST ALTERNATE PLEA OF THE APPELL ANT. IF AT ALL, ONLY GROSS PROFIT CAN BE ADDED AND NOT THE ENTIRE ALLEGE D UNDISCLOSED SALES. 18.1 FACTS OF THE CASE IN BRIEF ARE THAT DURING THE COURSE OF SEARCH CONDUCTED AT THE RESIDENCE OF THE SALES MANAGER OF AKRUTI GRO UP, SHRI MAYUR D. SHAH, THE ANNEXURE MARKED A-1 WAS SEIZED. ON PERUSAL OF PAGES 39 TO 43 OF THIS ANNEXURE, IT WAS SEEN THAT THE SAME ARE BILLS FOR B ROKERAGE PAID BY THE 26 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. ASSESSEE TO M/S THAKKAR ESTATE CONSULTANTS (PAGES 3 9 TO 41) AND TO M/S PRIYA JAGTAP ARCHITECT & PROPERTY CONSULTANT. THE BROKERA GE IS CALCULATED @ 1% FOR EACH BROKER ON THE TOTAL SALE CONSIDERATION OF ` 2,86,00,000/- FOR THE FLAT NOS. 501, 502, 601 AND 701 ON THE 5 TH , 6 TH AND 7 TH FLOORS OF THE PROJECT AKRUTI ORION. THE BILLS PREPARED ALSO CONTAIN DETAILS OF SERVICE TAX @ 10.2% ON THE TOTAL BROKERAGE. THE A.O. NOTED THAT THE ASSESSEE HAS PAID THE BILLS AFTER DEDUCTING TDS @ 5.61% AMOUNTING TO ` 17,681/-. FURTHER, THE FLATS WERE SOLD IN THE ASSESSMENT YEAR UNDER CONSIDERATION AS THE B ROKERAGE ON THE SAME WAS PAID IN THE MONTH OF FEBRUARY 2006. HOWEVER, ON VE RIFICATION OF THE SALES FROM THE BOOKS OF THE ASSESSEE, THE A.O. NOTED THAT THE TOTAL SALE CONSIDERATION RECORDED AS PER ITS BOOKS FOR THE AFOREMENTIONED FL ATS COMES TO ` 2,67,88,516/- . THE ASSESSEE WAS ACCORDINGLY ASKED TO EXPLAIN TH E CONTENTS OF THE DOCUMENT AND EXPLAIN WHY THE DIFFERENCE IN THE SALE CONSIDER ATION AS PER THE BILLS AND AS RECORDED IN ITS BOOKS SHOULD NOT BE TREATED AS ITS UNDISCLOSED SALES. IN RESPONSE, THE ASSESSEE SUBMITTED THAT AS PER BILL AND PAID BROKERAGE (1% + SERVICE TAX) ON ` 2.86 CRORES TO PRIYA JAGTAP & K. THAKKAR ON SALE O F 5 TH , 6 TH AND 7 TH FLOOR OF AKRUTI ORION. IT IS A TYPOGRAPHICAL ERROR ON THE BILL, BILL SAYS ` 2.86 CRORES AND ACTUAL TOTAL SALE OF 5 TH , 6 TH AND 7 TH FLOOR OF AKRUTI ORION OF ` 2.68 CRORES. 18.2 HOWEVER, THE A.O. WAS NOT CONVINCED WITH THE E XPLANATION GIVEN BY THE ASSESSEE. ACCORDING TO THE A.O., THE TYPOGRAPHICAL ERROR CANNOT BE ACCEPTED SINCE THIS ERROR HAS BEEN COMMITTED BY BOTH THE BRO KERS WHICH IS NOT POSSIBLE. 27 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE THE A.O. MADE ADDITION OF ` 18,11,484/- BEING THE DIFFERENCE BETWEEN ` 2,86,00,000 AND ` 2,6788,516/-. 18.3 IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF THE A.O. BY HOLDING AS UNDER: 6.3 THE AR ALSO TOOK THE WITHOUT PREJUDICE PLEA TH AT THE ABOVE TRANSACTIONS WERE IN THE NATURE OF CURRENT ACCOUNT AND NOT IN THE NATURE OF LOAN OR ADVANCE. HENCE THE SAME WERE NOT LIABLE TO BE CONSIDERED FOR THE PURPOSE OF DEEMED DIVIDEND. IN V IEW OF THESE SUBMISSIONS, IT WAS CLAIMED THAT THE ADDITION OF RS .13,34,412/- AS DEEMED DIVIDEND OUGHT TO BE DELETED. 6.4 I HAVE CONSIDERED THE FACTS OF THE ISSUE AS WEL L AS THE WRITTEN SUBMISSIONS MADE BY THE AR BUT DO NOT FIND MERIT IN THEM. THE RELIANCE PLACED BY THE AR ON THE DECISION IN THE CA SE OF BOMBAY OIL INDUSTRIES IS CLEARLY MISPLACED SINCE THE FACTS IN THAT CASE WERE NOT IDENTICAL TO THE FACTS OF THIS CASE. IN THE PRESENT CASE, THE APPELLANT HAS NOT SHOWN THAT DUE PROCEDURE LAID DOWN UNDER SE CTION 292/293 AND 372A OF THE COMPANIES ACT HAS BEEN FOLLOWED. TH E REGULAR ADVANCES RECEIVED BY THE APPELLANT COMPANY FROM CIT Y GOLD MANAGEMENT IN WHICH THE APPELLANT COMPANY OWNS 24% SHARES COULD NOT BE TERMED AS INTER CORPORATE DEPOSITS. AL SO, IN THE CASE RELIED UPON BY THE APPELLANT INTEREST PAYMENTS WERE MADE ON THE INTER-CORPORATE DEPOSITS WHICH IS NOT THE CASE IN T HE MATTER UNDER CONSIDERATION. IN THE PRESENT CASE, APPARENTLY NO P AYMENT OF INTEREST HAS BEEN MADE OR RECEIVED NOR WAS ANY FORMAL INTER- CORPORATE DEPOSITS INVITED OR ACCEPTED. THERE IS ALSO NO MERI T IN THE ALTERNATE PLEA TAKEN BY THE AR THAT THE TRANSACTIONS BETWEEN THE APPELLANT AND M/S. CITY GOLD MANAGEMENT WERE IN THE NATURE OF CURRENT ACCOUNT. MAKING ENTRIES OF ADVANCES THROUGH AN AC COUNT TERMED AS CURRENT ACCOUNT WOULD NOT ALTER THE NATURE OF AD VANCES. A COPY OF ACCOUNT OF CITY GOLD MANAGEMENT IN THE BOOKS OF THE APPELLANT CLEARLY INDICATES PERIODICAL AMOUNTS RECEIVED BY TH E APPELLANT WHICH ARE CLEARLY IN THE NATURE OF ADVANCES RECEIVED BY T HE APPELLANT TO BE REPAID LATER. NONE OF THE TRANSACTIONS RELATES TO A NY TRADING ACTIVITY BETWEEN THE PARTIES. 28 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. 18.4 AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), T HE ASSESSEE IS IN APPEAL BEFORE US. 19. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE A.O. AND LD. CIT(A). IN HIS ALTERN ATIVE ARGUMENT, HE SUBMITTED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE A.O. FOR VERIFICATION. 19.1 THE LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDER OF THE A.O. AND LD. CIT(A). 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE B Y BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE CIT(A) AND T HE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. ADMITTEDLY, AS PER THE SEIZ ED DOCUMENT FOUND FROM THE RESIDENCE OF SHRI MAYUR D. SHAH, THE BROKERAGE HAS BEEN CALCULATED @ 1% FOR EACH BROKER ON THE TOTAL SALE CONSIDERATION OF ` 2,86,00,000/- FOR THE VARIOUS FLATS AS PER PAGE 33 OF THE ASSESSMENT ORDER. THE A BOVE BILL ALSO CONTAIN DETAILS OF SERVICE TAX ON THE TOTAL BROKERAGE AND THE ASSES SEE PAID THE BILLS AFTER DEDUCTING TDS @ 5.61% AMOUNTING TO ` 17,681/-. EVEN IF THE CONTENTION OF THE ASSESSEE THAT IT IS A TYPOGRAPHICAL ERROR IS AC CEPTED, THEN ALSO TDS FIGURE @ 5.61% DOES NOT COME TO ` 17,680/-. FURTHER, DESPITE BEING GIVEN OPPORTUNIT Y, THE ASSESSEE NEVER FILED ANY DOCUMENT GIVING PLAUSI BLE EXPLANATION BEFORE THE A.O. OR THE LD. CIT(A) TO JUSTIFY THE DIFFERENCE. EVEN BEFORE US ALSO, ONLY A GENERAL STATEMENT WAS MADE WHICH WAS MADE BEFORE TH E A.O. AND LD. CIT(A). 29 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. WE, THEREFORE, DO NOT FIND ANY FORCE IN THE ARGUMEN T OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE MATTER SHOULD BE SENT TO THE FILE OF THE LD. CIT(A). SINCE THE ORDER OF THE LD. CIT(A) IS A SPEAKING ONE, THEREFOR E, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY INFIR MITY IN HIS ORDER. ACCORDINGLY, THE SAME IS UPHELD. THE GROUNDS RAISE D BY THE ASSESSEE ARE ACCORDINGLY DISMISSED. 21. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUNDS WHICH ARE AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED IN NOT DIRECTING A. O. TO GRANT DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF MA YA NAGAR PROJECT WHICH IS A SLUM REHABILITATION PROJECT APPROVED BY THE CBDT. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACT IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S 80-IB(10) OF THE ACT IN RESPECT OF ASHRAM CHAWL PROJECT WHICH IS A SLUM REHABILITATI ON PROJECT APPROVED BY THE CBDT. 22.1 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE A.O. IN THE ORDER PASSED U/S 154 HAS ALREADY ACCEPTED THE CLAIM OF TH E ASSESSEE. THEREFORE, THE ADDITIONAL GROUND NO. 1 HAS BECOME INFRUCTUOUS. SO FAR AS ADDITIONAL GROUND NO. 2, IS CONCERNED, WE FIND THIS GROUND IS IDENTIC AL TO GROUND TAKEN BY THE ASSESSEE FOR A.Y. 2005-06. WE HAVE ALREADY DECIDED THE ADDITIONAL GROUND RAISED BY THE ASSESSEE AND THE MATTER HAS BEEN REST ORED TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATION. FOLLOWING THE SAME RATIO, THE ADDITIONAL GROUND NO.2 RAISED BY THE ASSESSEE IS RESTORED TO THE FILE OF T HE LD. CIT(A) WHO SHALL DECIDE THE SAME AFRESH AND IN ACCORDANCE WITH LAW AFTER GI VING DUE OPPORTUNITY OF 30 ITA 4851-52/M/09, ITA 4873-4874/M/09 M/S ACKRUTI CITY LT D. BEING HEARD TO THE ASSESSEE. ADDITIONAL GROUND OF A PPEAL NO.2 RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PU RPOSE. 22. IN THE RESULT, APPEALS FILED BY THE ASSESSEE AR E PARTLY ALLOWED FOR STATISTICAL PURPOSES AND APPEALS FILED BY THE REVEN UE ARE DISMISSED. ORDER PRONOUNCED ON 24.6.2011 SD/- SD/ - (D.K. AGARWAL) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 24.6. 2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED, MUMBAI 4. THE CIT CONCERNED, MUMBAI 5. THE DR BENCH, G 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI