ACIT 15(3), MUMBAI V. ARKADE BHOOMI ENTERPRISES, MUMBAI

ITA 5336/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3635 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 01-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESHWAR YADAV
• Assessee Lawyers: ANUJ KISMADWALA
• Keywords: Tax effect
• Section: 133A; 80IB

Judgement Text

1 , , , , INCOME-TAX APPELLATE TRIBUNAL -ABENCH MUMB AI , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND AMIT S HUKLA,JUDICIAL MEMBER ./ I.T.A. NO.366/MUM/2010 / ASSESSMENT YEAR: 2006-07 ./ I.T.A. NO.2222/MUM/2011 / ASSESSMENT YEAR: 2007-08 ./ I.T.A. NO.7439/MUM/2012 / ASSESSMENT YEAR: 2009-10 ./ I.T.A. NO.5336/MUM/2013 / ASSESSMENT YEAR: 2010-11 DY. CIT CIR.,15(3) MATRU MANDIR, 1 ST FLOOR, TARDEO ROAD MUMBAI-400 007. VS. M/S. ARKADE BHOOMI ENTERPRISES OPP. CHILDREN ACADEMY SCHOOL ATMARAM SAWANT ROAD ASHOK NAGAR, KANDIVALI EAST MUMBAI-400 101. PAN:AAAJA 0533 A ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI RAJESHWAR YADAV A SSESSEE BY: ANUJ KISMADWALA / DATE OF HEARING:01.03.2016 / DATE OF PRONOUNCEMENT: 09.03.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) #!$ %& PER RAJENDRA, AM - ASSESSEE-AOP IS A BUILDER AND DEVELOPER AND WAS TRA DING IN TDR.IN THIS CASE THE ISSUE OF DEDUCTION U/S. 80IB(10) OF THE ACT REMAINED UNADJUD ICATED.VIDE ITS ORDER DATED 14.10.2011 (MA NO.446/MUM/2011-ARISING OUT OF ITA 366/MUM/2010 -AY 06-07) THE TRIBUNAL DIRECTED THE REGISTRY TO FIX THE APPEAL FOR THE LIMITED PURP OSE OF ADJUDICATION OF GR.NO.1 OF THE REVENUES APPEAL.AUTHORISED REPRESENTATIVES OF BOTH THE SIDES AGREED THAT THE TAX EFFECT FOR THE AY.2007-08 WAS LESS THAN RS.10.00 LAKHS,THAT TH E ASSESSEE HAD CLAIMED DEDUCTION OF RS.22 LAKHS ONLY FOR THAT YEAR, THAT THE ASSESSEE HAD NOT CLAIMED ANY DEDUCTION FOR THE YEAR 2008-09.CONSIDERING THESE FACTS WE HOLD THAT THE AP PEAL FILED FOR ASSESSMENT YEAR 2007-08 IS NOT MAINTAINABLE AS THE TAX EFFECT INVOLVED IS LESS THAN THE MONETARY LIMIT PRESCRIBED BY THE CBDT. I.T.A. NO.366/MUM/2010-AY-2006-07: 2. VIDE DEVELOPMENT AGREEMENT DT. 29.11.2003, THE ASSE SSEE HAD PURCHASED THE DEVELOPMENT RIGHTS FOR THE PLOT BEARING CTS NO.58, THAT THE PLO T MEASURED 508.3 SQ.MTRS., THAT VIDE ANOTHER DEVELOPMENT AGREEMENT DATED 8.4.04 IT FURTHER PURCH ASED THE DEVELOPMENT RIGHTS FOR ANOTHER PLOT ADMEASURING 2402.7 SQ.MTRS., BOTH THE PLOTS WE RE AMALGAMATED VIDE APPROVAL DATED 27.9.2005, THAT THE ASSESSEE DEVELOPED TWO PROJECTS ON THESE PROPERTIES, THAT IT DEVELOPED A HOUSING PROJECT HAVING 4 WINGS, HAVING STILT PLUS 7 -8 STORIES, THAT THE PROJECT WAS KNOWN AS BHOOMI ARCADE, THAT APPROVAL TO THE BUILDING PLAN W AS OBTAINED IN OCTOBER 2004, THAT THE ASSESSEE HAD STARTED ANOTHER PROJECT AS SLUM REHABI LITATION (SR) PROJECT, THAT SR PROJECT HAD NOT STARTED TILL THE COMPLETION OF FIRST PROJECT, T HAT THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.6.06 CRORES U/S. 80IB (10 ) OF THE ACT, THAT AN ACTION U/S. 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE.WHILE COMP LETING THE ASSESSMENT, THE AO HELD THAT THE AREA OF BOTH THE PROJECTS WAS INSEPARABLE, THAT IN THE ABSENCE OF DEMARCATION MINIMUM AREA FOR TWO PROJECTS SHOULD BE TWO ACRES, THAT ACT UAL AREA WAS ONLY 7411 SQ.MTRS., THAT THE ARKADE BHOOMI ENTERPRISES(366/10+3-06-07,07-08,09-1 0&10-11) 2 CONDITION(B) OF THE SECTION 80IB(10) WAS NOT SATISF IED, THAT THE ENTIRE PROJECT WAS NOT COMPLETED BY 31.3.2008, THAT THE ASSESSEE HAD NOT TAKEN APPROVAL OF THE CBDT FOR THE SECOND PROJECT WHICH WAS A PROJECT UNDER SLUM REHA BILITATION SCHEME (SRS). 3. IN THE APPELLATE PROCEEDINGS BEFORE THE FIRST APPEL LATE AUTHORITY (FAA),THE ASSESSEE MADE ELABORATE SUBMISSIONS.AFTER REFERRING TO THE PROVIS IONS OF SECTION 80IB HE HELD THAT THE DEDUCTION WAS ALLOWABLE TO AN UNDERTAKING THAT DEVE LOPED AND BUILT HOUSING PROJECTS, THAT THE ASSESSEE HAD NOT CONSTRUCTED ANY COMMERCIAL AREA, THAT IT HAD PURCHASED DEVELOPMENT RIGHTS, THAT THE POWER OF ATTORNEY WAS GRANTED TO THE ASSES SEE WHEN DEVELOPMENT AGREEMENTS WERE ENTERED INTO, THAT AMALGAMATION TOOK PLACE ON 27.09 .2005, THAT PLAN WAS DULY APPROVED BY LOCAL AUTHORITY, THAT THE AO HAD NOT BROUGHT ON REC ORD ANY CONTRARY EVIDENCE TO PROVE THAT THE PLOTS WERE NOT AMALGAMATED OR THAT THEY WERE SEPARA TE PLOTS,THAT THE PLOT IN QUESTION WAS MORE THAN ONE ACRE.REFERRING TO THE JUDGMENT OF VAN DANA PROPERTIES (31 SOT 392) HE HELD THAT PROVISIONS OF SECTION 80IB (10) SPECIFIED THE SIZE OF THE PLOT OF LAND AND NOT THE SIZE OF THE HOUSING PROJECT,THAT THE SECTION ALLOWED DEDUCT ION TO A HOUSING PROJECT CONSTRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE AND IT WAS IMMATERIAL AS TO WHETHER ANY OTHER HOUSING PROJECTS EXISTED ON THE SAID PLOT OF LAND O R NOT. 4. BEFORE US,THE DEPARTMENTAL REPRESENTATIVE (DR)ARGUE D THAT THERE WERE TWO SEPARATE PROJECTS ON THE PLOT OF LAND, THAT ONE OF THE PROJE CTS WAS UNDER SR SCHEME, THAT EACH HOUSING PROJECT HAD TO BE LOCATED IN PLOT OF ONE ACRE, THAT FACTS OF THE CASE OF VANDANA PROPERTY RELIED UPON BY THE FAA WERE DIFFERENT FROM THE FACTS OF TH E CASE UNDER CONSIDERATION, THAT THE PROJECT WAS NOT COMPLETED BY 31.3.2008.THE AUTHORIS ED REPRESENTATIVE (AR) RELIED UPON THE ORDER OF THE FAA AND STATED THAT THE LAW LAID DOWN BY THE JUDGMENT OF VANDANA PROPERTIES (SUPRA),WAS AGAINST THE AO . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL BEFORE US. WE FIND THAT THE BASIC DISPUTE BETWEEN THE AO AND THE ASSESSEE IS AS TO WHETHER THE SIZE OF THE PLOT OF LAND SHOULD BE ONE ACRE FOR ALL THE PROJECTS OR IT SHOUL D BE ONE ACRE FOR EACH OF THE PROJECTS.WE FIND THAT IN THE CASE OF VANDANA PROPERTIES THE HON'BLE JURISDICTIONAL HIGH COURT HAS AFFIRMED THE ORDER OF THE TRIBUNAL (353ITR36)RELIED UPON BY THE FAA AND HAS HELD AS UNDER :- FOR THE PURPOSES OF SECTION 80IB (10) IT IS NOT T HE MANDATE OF THE SECTION THAT THE HOUSING PROJECT MUST BE ON A VACANT PLOT OF LAND HAVING MIN IMUM AREA OF ONE ACRE AND THAT WHERE A NEW HOUSING PROJECT IS CONSTRUCTED ON A PLOT OF LAN D HAVING MINIMUM AREA OF ONE ACRE BUT WITH EXISTING HOUSING PROJECTS WOULD QUALIFY FOR SE CTION 80IB (10) DEDUCTION. EVEN OTHERWISE, THE ARGUMENT OF THE REVENUE DOES NOT STAND TO REASO N BECAUSE, IN THE CITY OF MUMBAI WHERE THERE IS ACUTE SPACE CRUNCH, IT IS DIFFICULT TO FIN D A VACANT PLOT HAVING MINIMUM AREA OF ONE ACRE AND EVEN IF FEW SUCH PLOTS ARE EXISTING IT CAN NOT BE SAID THAT SECTION 80IB (10) DEDUCTION WAS INTENDED TO GIVE BENEFIT ONLY TO THE UNDERTAKIN GS WHO CONSTRUCT HOUSING PROJECTS ON THOSE FEW PLOTS. THEREFORE, IT IS CLEAR THAT ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE, THERE CAN BE ANY NUMBER OF HOUSING PROJECTS AND SO LONG A S THOSE HOUSING PROJECTS ARE APPROVED BY THE LOCAL AUTHORITY AND FULFILL THE CONDITIONS SET OUT UNDER SECTION 80IB (10), THE DEDUCTION THEREUNDER CANNOT BE DENIED TO ALL THOSE HOUSING PR OJECTS. SECTION 80IB (10) WHILE SPECIFYING THE SIZE OF THE PLOT OF LAND, DOES NOT SPECIFY THE SIZE OR THE NUMBER OF HOUSING PROJECTS THAT ARE REQUIRED TO BE UNDERTAKEN ON A PLOT HAVING MINIMUM AREA OF ONE ACRE. AS A RESULT, SIGNIFICANCE OF THE SIZE OF THE PLOT OF LAND IS LOS T AND, THEREFORE, THE ASSESSEE SUBJECT TO FULFILLING OTHER CONDITIONS BECOMES ENTITLED TO SEC TION 80IB (10) DEDUCTION ON CONSTRUCTION OF A HOUSING PROJECT ON A PLOT HAVING AREA OF ONE ACRE , IRRESPECTIVE OF THE FACT THAT THERE EXIST OTHER HOUSING PROJECTS OR NOT. IN THESE CIRCUMSTANC ES, THE DECISION OF THE TRIBUNAL IN REJECTING THE CONTENTION OF THE REVENUE REGARDING THE SIZE OF THE PLOT CANNOT BE FAULTED. ARKADE BHOOMI ENTERPRISES(366/10+3-06-07,07-08,09-1 0&10-11) 3 RESPECTFULLY FOLLOWING THE ABOVE ORDER,EFFECTIVE GR OUND OF APPEAL IS DECIDED AGAINST THE AO. I.T.A. NO.7439/MUM/2012 ASSESSMENT YEAR: 2009-10 I.T.A. NO.5336/MUM/2013 ASSESSMENT YEAR: 2010-11 5. WE FIND THAT ISSUE INVOLVED IN BOTH THE ABOVE MENTI ONED ASSESSMENT YEARS ARE IDENTICAL TO THE GROUND RAISED FOR THE AY 2006-07.FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT WE HOLD THAT SECTION 80IB (10)ALLOWS DEDUCTIO N TO A HOUSING PROJECT CONSTRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE AND IT IS IMMATERIAL AS TO WHETHER ANY OTHER HOUSING PROJECTS ARE EXISTING ON THE SAID PLOT OF L AND OR NOT.EFFECTIVE GROUND FOR BOTH THE AY.S.IS DECIDED AGAINST THE AO IN THE RESULT, APPEALS FILED BY THE AO ARE DISMISS ED FOR ALL THE ABOVE MENTIONED FOUR AY.S. ( ) !*+ * , - !. . / 0' 1 !2 34. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH MARCH, 2016. 09 , 2016 SD/- SD/- ( / AMIT SHUKLA ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI, DATE: 09.03.2016 . . . .. . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR D BENCH, ITAT, MUMBAI / , A , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.