ACIT 17(2), MUMBAI V. MUDIT MADANLAL GUPTE, MUMBAI

ITA 5121/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8720 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 07-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIAL
• Assessee Lawyers: NEERAJ AGARWAL
• Section: 143(3); 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM ./ I .T.A. NO. 5121 /MUM/201 4 ( / ASSESSMENT YEAR : 2 0 10 - 11 ) DY.C OMMISSIONER OF INCOME TAX - 17(2), ROOM NO.217, 2 ND FLOOR, PIRAMAL CHAMBERS, MUMBAI - 400012 / VS. SHRI MUDHIT MADANLAL GUPTA, 1 ST FLOOR, BAHUBALI BUILDING, CAWASJI PATEL, FORT, MUMBAI - 400019 ./ PAN : AACPG3554F / APPELLANT BY SHRI A K DHONDIAL / RESPONDENT BY SHRI NEERAJ AGARWAL / DATE OF HEARING : 1 8 . 1. 201 7 / DATE OF PRONOUNCEMENT : 24 .1. 2017 / O R D E R PER RAJESH KUMAR , A M THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 30.5.2014 , PASSED BY THE COMMISSIONER OF INCOME TAX (A) , MUMBAI U/S 143(3) OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2 009 - 10 . 2. THE ONLY EFFECTIVE GROUND RAI SED BY THE REVENUE IS AGAINST T HE DELETION OF DISALLOWANCE UNDER SECTION 80IB(10) OF T HE INCOME TAX ACT, 1961 AMOUNTING TO RS.46,12,951/ - BY THE LD.CIT(A) AS MADE BY T HE AO WITHOUT APPRECIATING THAT THE NECESSARY CONDITION PRECEDENT FOR ALLOWING 2 I .T.A. NO. 5121 /MUM/2014 DEDUCTION UNDER SECTION 80IB(1 0 ) OF THE ACT WE R E NOT DULY AND FULLY SATISFIED AND FULFILLED. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 14.10.2010 DECLARING TOTAL INCOME OF RS.2,39,319/ - . THE CASE OF THE ASSESSEE WAS SELECTE D UNDER CASS AND STATUTORY NOTICES UNDER SECTION 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON T HE ASSESSEE . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAS SHOWN INCOME FROM HOUSING PROJECT OF RS.45,62,951/ - WHI CH WAS CLAIMED AS EXEMPT UNDER SECTION 80IB(10) OF THE ACT AND CONSEQUENTLY , CALLED UPON THE ASSESSEE TO FILE ALL THE SUPPORTING DOCUMENTS/EVIDENCES IN CONNECTION THEREWITH. THE AO , AFTER CONSIDERING ALL THE SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE , RE JECTED THE SAME BY OBSERVING THAT THE ASSESSEE HAS ENTERED INTO DEVELOPMENT AGREEMENT WITH THE LAND OWNER IN WHICH THE ASSESSEE WAS ENTITLED TO 51% OF THE TOTAL BUILDING AND REMAINING 49% WAS TO BE VESTED IN THE LAND OWNER AND ACCORDINGLY THE ASSESSEE UNDERTOOK THE CONSTRUCTION OF THE PROJECT CONSISTING OF FOUR WINGS A,B, C AND D AS PER COMMENCEMENT CERTIFICATE DATED 1 4 .2.2007 WAS ISSUED BY THE MMC. UP TO MARCH 31 ST 2008 THE ASSESSEE COMPLETED CONSTRUCTION OF A,B,C WINGS AND ACCORDINGLY COMMENCEMENT CE RTIFICATE W AS ALSO OBTAINED. WHEREAS WING - D WAS NOT COMPLETE D . THE ASSESSEE ACCORDINGLY, CLAIMED DEDUCTION U/S 80IB(10) OF THE 3 I .T.A. NO. 5121 /MUM/2014 ACT ON THE PROFIT RESULTED FROM WINGS - A,B, AND C. AS PER THE AO THE ASSESSEE HAS COMPLETED ONLY THREE WINGS WHEREAS THE WING - D WAS NOT COMPLETED AND NO CERTIFICATE OF COMPLETION WAS OBTAINED FROM MMC WHICH PROVE D THAT THE PROJECT WAS NOT COMPLETED WITHIN A STIPULATED TIME. THE AO FURTHER OBSERVED THAT IF ALL THE FOUR WINGS WERE PART OF THE SAME PROJECT AN D THEN THE COMPLETION OF THREE OUT OF FOUR WINGS COULD NOT BE CONSIDERED AS FULFILLMENT OF THE CONDITION S AS ENVISAGED UNDER SECTION 80IB(10) OF THE ACT . THE SECOND OBJECTION FOR NON GRANTING BENEFIT OF SECTION 80IB(10) WAS THAT THE TOTAL AREA WAS 1.88 ACRE, WHEREAS AS PER THE AGREEMENT THE ASSESSEES SHARE WAS 51% AND AS A RESULT THE AREA WHICH CAME TO THE ASSESSEES SHARES WAS ONLY 0.96 ACRE WHICH WAS LESS THAN THE REQUIRED AREA OF 1.00 ACRE AND THE LAST CONDITION FOR NOT GRANTING DEDUCTING U/S 80IB(10) WAS THAT THE A REA OF THE FLAT WAS MORE THAN 1000 SQ.FT. THE AO MADE THE DISALLOWANCE DESPITE THE FACT THAT THE APPEAL OF THE ASSESSEE ON SIMILAR ISSUES IN THE ASSESSMENT YEARS 2005 - 06 TO 2009 - 10 STOOD ALLOWED BY THE ITAT ON IDENTICAL FACTS . HOWEVER, THE DEPARTMENT HAS FILED APPEAL UNDER SECTION 260 OF THE ACT BEFORE THE HIGH COURT. ULTIMATELY, THE ASSESSMENT WAS COMPLETED BY THE AO VIDE ORDER DATED 28.3.2013 PASSED UNDER SECTION 143(3) BY ASSESSING THE INCOME OF THE ASSESSEE AT RS.48,52,270/ - BY REJECTING THE CLAI M OF THE ASSESSEE U/S 80IB(10) OF THE ACT AMOUNTING TO RS.46,12,951/ - . AGGRIEVED BY THE ORDER OF THE AO, THE 4 I .T.A. NO. 5121 /MUM/2014 ASSESSEE FILED AN APPEAL BEFORE THE FAA WHO ALLOWED THE APPEAL OF THE ASSESSEE AFTER CONSIDERING THE CO NTENTIONS AND SUBMISSIONS OF THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER: 12. IT IS CLEAR FROM THE ABOVE DECISION OF THE ITAT, MUMBAI THAT ALL THE ISSUES ON THE BASIS OF WHI CH THE AO HAS DENIED THE DEDUCTION U/S 801B(10) TO THE APPELLANT DURIN G THE YEAR UNDER CONSIDERATION STANDS ALREADY DEC IDED IN FAVOUR OF THE APPELLANT. THIS FACT HAS ALSO BEEN ACCEPTED BY THE AO IN THE ASSESSMENT ORDER BUT AS THE DEPARTMENT H AS CHALLENGED THE ABOVE DECISION OF THE I TAT BEFORE THE HIGH COURT OF BOMBAY, THE ADDITIONS HAVE BEEN MADE DURING THE YEAR UNDER CONS IDERATION TO KEEP THE ISSUE ALIVE, HOWEVER, THERE IS NO DENYING THE FACT THE ISSUES UNDER QUESTION ALREADY STANDS DECIDED IN FAVOUR OF THE APPELLANT BY THE ABOVE MENTIONED ORDER OF THE ITAT, MUMBAI. 13. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HO N'BLE ITAT, THE DEDUCT ION CLAIMED DURING THE YEAR UNDER CONSIDERATION BY THE APPELLANT U/S 80IB(10) HAVE BE EN ALLOWED TO HIM IN APPELLATE ORDER IN HIS CASE FOR AY 2008 - 09 VIDE ORDER NO. CIT(A)/34 / TR.29/31/17/128/10 - 11 DATED 29.2.2012, & ALSO FOR AY 2009 - 10 VIDE ORDER NO. CIT(A) - 29/RG - 17/171/11 - 12 DATED 27.11.2012. SINCE THE FACTS OF THE CASE IN THE Y EAR UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS TO THAT IN A.Y. 2008 - 09 & A Y 2009 - 10 A ND THE PROJECT ALSO BEING THE SAME AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ITAT, MUMBAI, THE DI SALLOWANCE MADE BY THE AO U/S 80IB(10 ) NEEDS TO BE ALLOWED FOR THE YEAR UNDER CO NSIDERATION I.E. A.Y. 2010 - 11. HENCE THE ADDITIONS MADE AMOUNTING TO RS.46,12,591/ - 4 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION S, PERUSED THE MATERIAL PLACED BEFORE US DURING THE COURSE OF HEARING INCLUDING THE DECISION OF AUTHORITIES BELOW. WE FIND THAT THE FAA HAS ADJUDICATED THE MATTER ON THE GROUND THAT THE ITAT HAS ALREADY DECIDED THE ISSUE OF DEDUCTION U/S 80IB(10) IN FA VOUR OF THE ASSESSEE AND ALSO RECORDED THE 5 I .T.A. NO. 5121 /MUM/2014 FINDINGS THAT THE DEPARTMENT HAS CHALLENGED THE DECISION OF THE TRIBUNAL IN THE JURISDICTIONAL HIGH COURT IN ORDER TO KEEP THE ISSUE ALIVE. IN PARA 13 OF THE APPELLATE ORDER, THE FAA ALSO NOTED THAT FOLLOWING THE DECISION OF THE TRIBUNAL, THE LD. CIT(A) HAS ALREADY ALLOWED THE APPEAL FOR THE ASSESSMENT YEAR 2008 - 09 VIDE ORDER NO.CIT(A)/34/TR.29/31/17/128/10 - 11 DATED 29.2.2012. IN VIEW OF THE ABOVE FACTS, WE FIND THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF TH E ASSESSEE BY THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE EARLIER YEARS AND, WE THEREFORE, ARE INCLINED TO UPHOLD THE ORDER OF LD.CIT(A) BY DISMISSING T HE APPEAL OF THE REVENUE. 5 . GROUNDS OF APPEAL NO.2 AND 3 RAISED IN THIS APPEAL ARE OF ACADEMIC IN NATU RE AND THEREFORE DISMISSED . 6 . IN THE RESULT, THE APPEAL OF T HE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON 24TH JANUARY, 2017. S D SD ( MAHAVIR SINGH ) ( RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 24 . 1.2017. SR.PS:SRL: 6 I .T.A. NO. 5121 /MUM/2014 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / B Y ORDER, T RUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI