Ashish Builders, Baroda V. The Income tax Officer,Ward-1, Baroda

ITA 525/AHD/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0397 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-11-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 12-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Set aside
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING: 24.11.2009 DRAFTED ON:24.11.2 009 ITA NO.525/AHD/2008 ASSESSMENT YEAR : 2004-2005 M/S. ASHISH BUILDER, 2, ANJALI PARK, B/H. INDUCHACHA HOUSE, CHHANI JAKAT NAKA, BARODA. VS. I.T.O., WARD-2(3), AAYKAR BHAVAN. BARODA. PAN/GIR NO. : AAHFA 7899 J (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S.N.SOPARKAR A.R. RESPONDENT BY: SHRI C.K.MISHRA JR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD.CIT(APPEALS)-II, BARODA, DATED 17.12.2007 IN AP PEAL NO.CAB/II-738/06-07. 2. THE SOLE ISSUE INVOLVED IN THE GROUNDS OF APPEA L TAKEN BY THE ASSESSEE IS THAT WHETHER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS JUSTIFIED IN DISALLOWING THE CLAIM OF DEDUCTION UND ER SECTION 80IB IN RESPECT OF PROJECT OF CONSTRUCTION OF A PROPERTY ON THE GRO UND THAT APPROVAL OF LOCAL MUNICIPAL AUTHORITY SHOWS THAT PROJECT WAS A COMMER CIAL CUM HOUSING PROJECT WHEREAS DEDUCTION UNDER SECTION 80IB IS ALLOWABLE O NLY IN RESPECT OF A HOUSING PROJECT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IB IN RE SPECT OF PROJECT OF CONSTRUCTION OF A PROPERTY. THE ASSESSEES CLAIM WA S DISALLOWED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ON THE GROUND THAT THE ITA NO .525/AHD/2008 M/S.ASHISH BUILDERS ASST.YEAR -2004-05 - 2 - APPROVAL OF LOCAL MUNICIPAL AUTHORITY SHOWS THAT PR OJECT WAS A COMMERCIAL CUM HOUSING PROJECT WHEREAS DEDUCTION UNDER SECTION 80IB IS ALLOWABLE ONLY IN RESPECT OF A HOUSING PROJECT. THE LEARNED AUTHOR ISED REPRESENTATIVE OF THE ASSESSEE INVITED OUR ATTENTION TO THE RECENT DECISI ON OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BRAHMA ASSOCIATES VS. J OINT COMMISSIONER OF INCOME TAX (OSD) [2009] 119 ITD 255 (PUNE)(SB), WHE REIN THE ISSUE OF COMMERCIAL CUM RESIDENTIAL HOUSING PROJECT WAS CONS IDERED AND IT WAS HELD THAT IN CERTAIN CIRCUMSTANCES, EITHER THE ENTIRE PR OFIT OR PROPORTIONATE PROFIT OF THE PROJECT RELATING TO RESIDENTIAL HOUSES ARE ELIG IBLE FOR DEDUCTION UNDER SECTION 80IB (10) OF THE ACT IN RESPECT OF THE ASSE SSMENT YEAR PRIOR TO THE ASSESSMENT YEAR 2005-06. THE LEARNED AUTHORISED REP RESENTATIVE OF THE ASSESSEE SUBMITTED THAT IN VIEW OF THE ABOVE DECISI ON, THE ISSUE BE SET ASIDE TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR AD JUDICATION IN CONSONANCE WITH THE DECISION OF THE SPECIAL BENCH. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RAISED NO OBJECTION ON ISSUE BE ING SET ASIDE TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR ADJUDICATION AFRE SH IN THE LIGHT OF THE DECISION OF THE SPECIAL BENCH. WE FIND THAT THE ASS ESSMENT YEAR UNDER CONSIDERATION IS ASSESSMENT YEAR 2004-05. THE SPECI AL BENCH IN THE CASE OF BRAHMA ASSOCIATES VS. JOINT COMMISSIONER OF INCOME TAX (OSD) [2009] 119 ITD 255 (PUNE)(SB), HAS HELD AS UNDER: 130. TO SUM UP, THE CONCLUSIONS ARRIVED AT BY THIS SPECIAL BENCH ARE AS FOLLOWS : (A) THE DEDUCTION UNDER S. 80-IB(10), AS APPLICABLE PRIOR TO 1ST APRIL, 2005, SUBJECT TO AND IN THE LIGHT OF THE OBSERVATION S MADE IN THE PRECEDING PARAS, IS ADMISSIBLE IN CASE OF A HOUSI NG PROJECT COMPRISING RESIDENTIAL HOUSING UNITS AND COMMERCIAL ESTABLISHMENTS. IN CASE THESE PROJECTS ARE APPROVED AS HOUSING PROJE CTS BY THE LOCAL AUTHORITY, SUCH AN APPROVAL AS HOUSING PROJECT IS SU FFICIENT FOR THE PURPOSES OF ELIGIBILITY. IN ANY OTHER CASE, WHERE 9 0 PER CENT OR MORE OF THE TOTAL BUILT-UP AREA IS USED FOR DWELLING UNI TS, IN ACCORDANCE WITH THE SCHEME OF S. 80-IB(10), THE BENEFIT OF DEDUCTIO N UNDER S. 80-IB(10) WILL NOT BE DECLINED. IN CASE COMMERCIAL USE OF BUI LT-UP AREA IS MORE THAN 10 PER CENT BUT THE RESIDENTIAL SEGMENT OF THE PROJECT SATISFIES REQUIREMENTS OF S. 80-IB (10) ON STANDALONE BASIS, I.E. (I) THE SIZE OF ITA NO .525/AHD/2008 M/S.ASHISH BUILDERS ASST.YEAR -2004-05 - 3 - THE PLOT, EXCLUDING PORTION UNDER COMMERCIAL UNIT, IS MORE THAN MINIMUM AREA OF ONE ACRE, (II) RESIDENTIAL UNITS BU ILT ON SUCH AREA MUST SATISFY CONDITION OF CL. (C) OF THE PROVISION, AND (III) OTHER NECESSARY CONDITIONS ARE FULFILLED, AND WHERE INCOM E FROM CONSTRUCTION OF RESIDENTIAL DWELLING UNITS CAN BE W ORKED OUT ON STANDALONE BASIS, DEDUCTION UNDER S. 80-IB(10) WILL BE AVAILABLE IN RESPECT OF RESIDENTIAL SEGMENT OF THE PROJECT. (B) THE DEDUCTION UNDER S. 80-IB(10) IS AVAILABLE IN RESPECT OF PROFITS OF HOUSING PROJECT AS A WHOLE, AND, AS SUCH, IT IS NOT RELEVANT AS TO WHAT IS THE PORTION OF PROFITS WHICH CAN BE SAID TO BE ATTRIBUTABLE TO RESIDENTIAL UNITS. THIS IS SUBJECT TO THE RIDER THA T IN CASE COMMERCIAL USE OF BUILT-UP AREA IN A PROJECT IS MORE THAN 10 P ER CENT AND, FOR THIS REASON THE PROJECT CANNOT BE SAID TO BE A PREDOMINA NTLY HOUSING PROJECT, BUT, IN TERMS OF OBSERVATIONS MADE IN PARA 115 ABOVE, THE ASSESSEE IS ENTITLED TO DEDUCTION IN RESPECT OF RES IDENTIAL UNIT SEGMENT OF THE OVERALL PROJECT ON FULFILMENT OF NECE SSARY CONDITIONS, THE ENTITLEMENT OF INCENTIVE DEDUCTION WILL BE CONFI NED TO ONLY TO THE PROFITS TO THE RESIDENTIAL SEGMENT OF THE OVERALL P ROJECT. (C) THE LIMIT ON COMMERCIAL USE OF BUILT-UP AREA AS PRESCRIBED BY CL. (D) OF S. 80-IB(10) HAS NO RETROSPECTIVE APPLICATION , AND IT APPLIES ONLY W.E.F. THE ASST. YR. 2005-06. 4. IN VIEW OF THE ABOVE DECISION AS ALL THE FACTS R EQUIRED TO ADJUDICATE THE ISSUE UNDER APPEAL IS NOT AVAILABLE ON RECORD, IN O UR CONSIDERED VIEW, IT SHALL BE JUST AND FAIR TO RESTORE THE ISSUE BACK TO THE F ILE OF THE LEARNED ASSESSING OFFICER FOR ADJUDICATION OF THE SAME AFRESH IN ACCO RDANCE WITH THE LAW AND IN THE LIGHT OF THE DECISION OF THE SPECIAL BENCH OF T HE TRIBUNAL IN THE AFORESAID DISCUSSED CASE AFTER ALLOWING REASONABLE OPPORTUNIT Y OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY. THUS, THE GROUNDS OF APPEAL OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30/11/2009. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 30.11.2009 PREPARED AND COMPARED BY : PARAS ITA NO .525/AHD/2008 M/S.ASHISH BUILDERS ASST.YEAR -2004-05 - 4 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-II, BARODA. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD