ITO 25(2)(4), MUMBAI V. VANDANA PROPERTIES, MUMBAI

ITA 5166/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3338 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 12-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUM BAI BEFORE SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSA IN, JM ./ I.T.A. NO. 5166/MUM/2014 ( / ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER-25(2)(4), C-11, R.NO. 103, PRATYAKSH KAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA (EAST), MUMBAI-400 051. / VS. M/S. VANDANA PROPERTIES B-602, PREM NAGAR NO -6, MCF UDYAN MARG BORIVALI (W) MUMBAI-400 092. ./ ./PAN/GIR NO. AAAFV 3003E ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI LOVISH KUMAR / RESPONDENT BY : SHRI SAMEER DALAL / DATE OF HEARING : 29/02/2016 !'# / DATE OF PRONOUNCEMENT : 16/03/2016 $% / O R D E R PER SANDEEP GOSAIN, J. M.: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 35, DATED 01 .05.2014 FOR ASSESSMENT YEAR 2010-2011 ON THE GROUNDS MENTIONED HEREIN BEL OW. 2 ITA NO. 5166/MUM/2014 (A.Y. 2010-11) ITO VS. M/S. VANDANA PROPERTIES 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF DEDUCTION U/S 80IB(1 0)OF THE I.T. ACT,1961 OF RS.1,73,73,553/- DESPITE THE FACT THAT THE ASSESSEE DO NOT FULFILL THE CONDITIONS PRESCRIBED IN THIS SECTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT THE COMMENCE MENT CERTIFICATE FOR THE FOR CONSTRUCTION ACTIVITIES ON THE PLOT WAS GRANTED ON 09.06.1993 I.E. PRIOR TO 01.10.1998 WHICH WAS SUBSEQUENTLY EXTENDED OVER THE YEARS TILL 22.04.1998 AND CERTIFICATE ISSUE FOR WING E IS ONLY AN ENDORSEMENT TO THE EARLIER COMMENCEMENT CERTIFICATE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT(A) ERRED IN NOT CONSIDERING THAT THE SIZE OF LAND OF L AND ON WHICH WING E IS CONSTRUCTED IS LESS THAN 1 ACRE, THUS VIOLATING THE CONDITION REQUIRED FOR AVAILING DEDUCTION U/S 80IB(10) OF THE I.T. ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E ENGAGED IN THE BUSINESS AS BUILDERS AND DEVELOPERS. THE ASSESSEE HAD CLAIMED D EDUCTION U/S.80 IB(10) OF THE I.T. ACT AMOUNTING TO RS.1,73,73,553/- ON THE GROUN D THAT THE ASSESSEE HAD A PLOT OF 2.36 ACRES AT DEV NAGAR, NEAR BHATIA HIGH SCHOOL , OFF SAI BABA ROAD, KANDIVLI(W), MUMBAI ON WHICH 5 WINGS, VIZ., A,B,C,D &E WERE CONSTRUCTED OVER THE YEARS. COMMENCEMENT CERTIFICATE (CC) FOR THE CO NSTRUCTION ACTIVITIES ON THE PLOT WAS GRANTED ON 09.06.1993 FOR THE PLINTH LEVEL WHICH WAS SUBSEQUENTLY EXTENDED OVER THE YEARS FOR ENTIRE WORK OF A,B,C&D TILL 22.04.1998. THIS CC AS FURTHER EXTENDED FOR WING E (FOR WHICH DEDUCTION U/S.80IB HAS BEEN CLAIMED) FOR THE ENTIRE WORK OF E WING AS PER THE APPROVED PLA N DATED 11.10.2002, AMENDED ON 20.05.2003. ON ACCOUNT OF SALE OF FLATS OF WINGS A TO D, THE ASSESSEE DID NOT 3 ITA NO. 5166/MUM/2014 (A.Y. 2010-11) ITO VS. M/S. VANDANA PROPERTIES CLAIM ANY DEDUCTION U/S 80IB(10) OF THE I.T. ACT,19 61, BUT FOR WING E, THE ASSESEE HAS CLAIMED DEDUCTION U/S 80IB (10) FOR THE A.Y. 2004-05 OF RS.71,42,590/-, FOR A.Y. 2005-06 OF RS.71,73,660/- AND FOR A.Y. 2006-07 OF RS.18,45,226/-. THE DEDUCTION U/S 80IB(10) HAD BEEN CLAIMED ON THE BASIS OF PERCENTAGE OF WORK COMPLETED AND OCCUPANCY CERTIFIC ATE (OC) WAS NOT ISSUED. THE CONSTRUCTION OF BUILDING E WAS COMPLETED ON 12.03 .2008 AS PER COMPLETION CERTIFICATE DTD.12.03.2008 ISSUED BY LOCAL AUTHORIT Y. FULL OCCUPATION CERTIFICATE IN RESPECT OF BUILDING E IS ISSUED BY LOCAL AUTHO RITY AS PER LETTER DATED 31.01.2008. DURING THE YEAR UNDER CONSIDERATION, TH E ASSESSEE HAS SOLD FLATS IN THE SAID BUILDING E ON WHICH NET PROFIT IS SHOWN AT R S.1,83,15,300/-. THE ASSESSEE HAS CREDITED TO INCOME AND EXPENDITURE ACCOUNT ON A MOUNT OF RS.9,41,748/- ON ACCOUNT OF INTEREST ON I.T. REFUND AND INTEREST ON F.D. 3. THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE FIRM HAS BEEN ALLOWED DEDUCTION U/S 80IB(10) OF THE I.T. ACT,1961 BY HON BLE ITAT MUMBAI BENCH AND THE SAME WAS UPHELD BY BOMBAY HIGH COURT. THE REVEN UE HAS FILED SPECIAL PETITION BEFORE THE HONBLE SUPREME COURT OF INDIA. THE NECESSARY COPIES WERE ALSO FILED BEFORE THE AO AND THE AO AFTER CONSIDERI NG THE REPLY FILED BY THE ASSESSEE DISALLOWED THE DEDUCTION U/S 80IB(10) OF THE I.T. ACT ON THE GROUND THAT 4 ITA NO. 5166/MUM/2014 (A.Y. 2010-11) ITO VS. M/S. VANDANA PROPERTIES THE ORDERS PASSED BY THE HONBLE HIGH COURT MUMBAI IN ASSESSEES OWN CASE HAS NOT REACHED FINALITY. 4. AGGRIEVED BY THE ORDER OF THE AO, REVENUE FILED APPEAL BEFORE THE CIT(A) AND THE CIT(A) ALLOWED THE APPEAL FILED BY THE ASSE SSEE. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E FILED THE PRESENT APPEAL BEFORE US ON THE GROUNDS MENTIONED HEREIN ABOVE. 6. AT THE VERY OUTSET, LD. AR REPRESENTING THE ASSE SSEE, SUBMITTED THAT THE PRESENT CASE IS COVERED BY THE ASSESSEES OWN CASE AS HONBLE ITAT HAD ALREADY DECIDED THE SAID ISSUE IN FAVOUR OF THE ASSESSEE FO R ASSESSMENT YEAR 2004-05 AND IN THE OPERATIVE PARA OF HONBLE ITAT IN ITA NO.1252/M UM/2007 (A.Y. 2004-05) IT HAS BEEN HELD THAT: WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E ORDERS. THE ISSUE IS REGARDING ALLOWANCE OF DEDUCTION U/S 80IB( 10) FO THE ACT WITH RESPECT TO THE BUILDING E CONSTRUCTED IN 2.6 ACRE S OF LAND, WHERE PRIOR TO THAT, BUILDINGS A,B,C AND D WERE ALREADY C ONSTRUCTED. ASSESSEE HAD CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT FOR THE PROFITS ON USING OUT OF THIS PARTICULAR BUILDING E FOR TH E ASSESSMENT YEARS 5 ITA NO. 5166/MUM/2014 (A.Y. 2010-11) ITO VS. M/S. VANDANA PROPERTIES 2004-05 AND 2005-06. THIS WAS DISALLOWED IN THE ASS ESSMENT YEAR 2005-06 ALSO AND THE MATTER CARRIED IN APPEAL BY TH E ASSESSEE BEFORE THIS TRIBUNAL. VIDE ITS ORDER DATED 29.4.2009 (SUPR A), THE TRIBUNAL HELD THAT WING E WAS A SEPARATE HOUSING PROJECT W ITHIN THE MEANING OF SECTION 80IB(10) OF THE ACT AND THE SAID PROJECT HAD COMMENCED AFTER 01.10.1998 AND COMPLETED BEFORE 31.03.2005 MA KING IT ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. IT WAS ALSO HELD BY THE TRIBUNAL AT PARA 15 OF ITS ORDER THAT THERE WAS NO VIOLATIO N IN RESPECT OF THE SIZE OF THE PLOT ON WHICH BUILDING E WAS CONSTRUC TED. RESPECTFULLY FOLLOWING THIS FOR THE IMPUGNED ASSESSMENT YEAR ALS O, WE HOLD THAT THE ASSESSE WAS ELIGIBLE FOR CLAIMING DEDUCTION U/S 80I B OF THE ACT FOR ITS BLOCK E BUILDING. 6.1 IT WAS FURTHER SUBMITTED THAT EVEN FOR A.Y. 200 5-06, THE HONBLE ITAT IN ITA NO. 1253/MUM/2007 HAS ALSO DECIDED THE SAID ISS UE IN FAVOUR OF ASSESSEE AND THE RELEVANT PARA IS REPRODUCED BELOW: WE FURTHER HOLD THAT THERE IS NO VIOLATION IN RESP ECT OF SIZE OF THE PLOT ON WHICH BUILDING E IS CONSTRUCTED. AS WE HAVE TO TAKE INTO CONSIDERATION THE TOTAL SIZE OF THE PLOT UNDER DEVE LOPMENT, THOUGH PART OF THE PROJECTS DO NOT QUALIFY FOR DEDUCTION. WE FU RTHER HOLD THAT THE 6 ITA NO. 5166/MUM/2014 (A.Y. 2010-11) ITO VS. M/S. VANDANA PROPERTIES CONCLUSION OF THE A.O. IN RESPECT OF ALLEGED VIOLAT ION OF THE AREA OF THE FLATS I.E. FLAT NO.138 AND 153 IS ALSO BASELESS AND WITHOUT MERIT. WE, THEREFORE, HOLD THAT ASSESSEE IS ENTITLED FOR DEDUC TION U/S 80IB(10) OF THE ACT AS ALL FUNDAMENTAL CONDITIONS ARE FULFILLED BY THE ASSESSEE. WE REVERSE THE ORDER OF THE CIT(A) AND DIRECT THE A.O. TO GRANT THE DEDUCTION TO THE ASSESSEE U/S 80IB(10) OF THE ACT. 6.2 IT WAS ALSO SUBMITTED THAT THE SAID DECISION OF ITAT WAS ALSO CHALLENGE BY THE REVENUE BEFORE HONBLE HIGH COURT AND THE HONB LE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VANDANA PROPERTIES (2012) 353 ITR 3 6 (MUM) HAS DISMISSED THE APPEAL OF THE REVENUE AND UPHOLD THE ORDER OF ITAT. ON THE OTHER HAND LD. DR RELIED UPON THE ORDERS OF THE AO. 6.3 WE HAVE ANALYSE THE ORDER OF CIT(A). THE CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES HAS CATEGORICALLY HELD THAT THE ISSUE WITH REGARD TO GRANTING OF DEDUCTION TO THE ASSESSEE U/S 80IB(10) OF THE I.T. ACT HAS ALREADY BEEN DECIDED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF THE CI T VS. VANDANA PROPERTIES IN FAVOUR OF ASSESSEE. WE FOUND THAT THE DECISION OF C IT(A) IS BASED ON ORDERS PASSED BY THE HONBLE HIGH COURT AND APART FROM RELYING UP ON ORDERS OF AO, NO OTHER ARGUMENTS OR CIRCUMSTANCES HAVE BEEN BROUGHT BEFORE US BY THE REVENUE TO 7 ITA NO. 5166/MUM/2014 (A.Y. 2010-11) ITO VS. M/S. VANDANA PROPERTIES CONTROVERT OR REBUT THE FINDINGS RECORDED BY THE CI T(A). THEREFORE, WE SEE NO REASON TO INTERFERE OR DEVIATE FROM THE FINDINGS RE CORDED AND ORDERS PASSED BY THE CIT(A) AND THEREFORE, WE DISMISS THE APPEAL OF THE REVENUE. 7. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH, 2016 SD/- SD/- (JASON P. BOAZ) (SANDEEP GOSAIN) $ / ACCOUNTANT MEMBER &' $ / JUDICIAL MEMBER ( ) MUMBAI; *$ DATED : 16.03.2016 PS. ASHWINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT - CONCERNED 5. ./0 ''12 , 12# , ( ) / DR, ITAT, MUMBAI 6. 045 6 / GUARD FILE / BY ORDER, / !'# (DY./ASSTT. REGISTRAR) #$ %, ( ) / ITAT, MUMBAI