The ITO, Ward-1(1), RAJKOT-GUJARAT V. M/s Geet Gunjan Builders, RAJKOT-GUJARAT

ITA 537/RJT/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2308 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 22-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K CHAKRAVARTY
• Assessee Lawyers: MJ RANPURA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BEN CH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHAR AT, J.M.) I.T. A. NO. 537/RJT/2014 (ASSESSMENT YEAR: 2007-08) INCOME TAX OFFICER, WARD 1(1), RAJKOT VS. M/S. GEET GUNJAN BUILDERS C/O. MANSUKHBHAI M. PATEL HARE KRUSHNA, 4-NARMADA PARK, RAJKOT (APPELLANT) (RESPONDENT) PAN: AAFFG6280R APPELLANT BY : SHRI V. K. CHAKRAVARTY, D. R. RESPONDENT BY : SHRI M. J. RANPURA, C.A. DATE OF HEARING : 30-12-2015 DATE OF PRONOUNCEMENT : 16-02-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-I, RAJKOT, DATED 14.07.2014 FOR A.Y. 2007-08. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF BUILDING OF HOUSING PROJECTS. ASSESSEE ELECTRONIC ALLY FILED ITS RETURN OF INCOME FOR A.Y. 2007-08 ON 31.10.2007 DECLARING TOT AL INCOME OF RS.11,300/-. SUBSEQUENTLY, ASSESSEE REVISED ITS RE TURN OF INCOME ON ITA NO 537/RJT/2014 . A.Y. 2007-08 2 27.03.2008 BY REVISING THE CLAIM DEDUCTION U/S.80IB (10) OF THE ACT. SUBSEQUENTLY, NOTICE U/S.148 DATED 14.03.2012 WAS I SSUED AND SERVED ON ASSESSEE AND THEREAFTER ASSESSMENT WAS FRAMED U/S.1 43(3) R.W.S. 147 OF THE ACT VIDE ORDER DATED28.03.2013 AND THE TOTAL INCOME WAS DETERMINED AT RS.84,23,680/- BY DISALLOWING THE CLAIM OF DEDUCTIO N U/S.80IB(10) OF THE ACT TO THE EXTENT OF RS.84,12,380/-. AGGRIEVED BY T HE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO V IDE ORDER DATED 14.07.2014 DELETED THE ADDITION. AGGRIEVED BY THE O RDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED T HE FOLLOWING GROUNDS:- 1. THE LD.CIT(A)-I, RAJKOT HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.48,96,000/- MADE BY THE AO U/S.8 0IB(10) OF THE ACT. 2. ON LEGAL AND FACTUAL STATUS OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. BEFORE US, AT THE OUTSET, LD. A.R. SUBMITTED THAT T HE APPEAL OF THE REVENUE NEEDS TO BE DISMISSED IN VIEW OF THE FACT THAT LD. CIT(A) HAD DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY FOLLOWING THE HONBL E ITAT ORDER IN ASSESSEES OWN CASE FOR A.Y. 2006-07. HE FURTHER S UBMITTED THAT ON IDENTICAL FACTS IN ASSESSEES OWN CASE FOR A.Y. 200 6-07, THE HONBLE TRIBUNAL HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80I B(10) OF THE ACT AND THE ORDER OF HONBLE TRIBUNAL, AS PER HIS KNOWLEDGE, HA S NOT BEEN CHALLENGED AND THEREFORE, ATTAINED FINALITY. HE POINTED TO TH E RELEVANT ORDER PASSED BY TRIBUNAL IN ITA NO.1176/RJT/2009 ORDER DATED 14 TH SEPTEMBER, 2010. HE, THEREFORE, SUBMITTED THAT SINCE THE FACTS OF THE CA SE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARLIER YEARS, THE APPEAL OF THE REVENUE NEEDS TO BE DISMISSED. LD. D.R. ON THE OTHER HAND SUPPORTED TH E ORDER OF ASSESSING OFFICER. ITA NO 537/RJT/2014 . A.Y. 2007-08 3 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DE DUCTION U/S.80IB(10) OF THE ACT. WE FIND THAT CIT(A) WHILE DECIDING THE IS SUE IN FAVOUR OF THE ASSESSEE HAD RELIED ON THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2006-07 BY OBSERVING AS UNDER: 7.3 IT IS HELD BY THE LD. CIT(A) AND SUBSEQUENTLY CONFIRMED BY THE HONBLE ITAT THAT THE DEVELOPER HAS DEVELOPED ONLY ONE PROJECT AND IT WOULD BE WRONG TO DENY THE BENEFIT FOR THE REASON THAT ONE PARTICULAR PART IS BEING OW NED BY A SEPARATE SOCIETY AND ON A SEPARATE PLOT. AS THE PROJECT REMAINS THE SAME, TH ERE IS NO REASON TO DENY THE CLAIM U/S.80IB(10). RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ITAT, RAJKOT BENCH IN THE APPELLANTS CASE FOR A.Y. 06-07, THE DISALLOWAN CE OF DEDUCTION U/S.80IB(10) IS DIRECTED TO BE DELETED. THIS GROUND OF APPEAL IS A LLOWED. 6. WE FURTHER FIND THAT THE ISSUE IN A.Y. 2006-07 WAS DECIDED BY THE CO- ORDINATE BENCH OF TRIBUNAL IN ASSESSEES FAVOUR BY HOLDING AS UNDER: 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL PLACED ON RECORD. THE CONTENTIONS OF THE ASSESSEE THAT THE ASSESSEE PURCHASED AGRICULTURAL LAND ADMEASURING TWO ACRES AND 31 GUNT HAS AT FINAL PLOTS NO 212 AND 217, SURVEY NO.92, NANAMAUVA, DIST RAJKOT VIDE AGREEMENT DATED 14-05- 2003 AND THEREAFTER, VIDE ORDER FROM COLLECTOR, THE AGRICULTURAL PLOTS HAVE BEEN- CONVERTED INTO NON-AGRICULTURAL LAND ADMEASURING 11 ,192 SQ.MTRS FOR THE PURPOSE OF CONSTRUCTION OF RESIDENTIAL UNITS. AND THAT SUCH PERMISSION WAS SUBJECT TO THE FULFILLMENT OF TERMS AND CONDITIONS SET FORTH IN TH E ANNEXURE 1 AND 2 APPENDED WITH THE SAID ORDER, AS PER TERM AND CONDITIONS SET FORTH, CLAUSE 25 STIPULATES THAT DIVISION OF THE PLOT WAS NOT PERMITTED AS EACH PLOT IS A PART OF SURVEY NUMBER. FURTHER, IT IS VERY CLEAR FROM THE ORDER OF COLLECT OR, DIST. RAJKOT, RAJKOT THAT PLOTS NO.212 AND 217 WAS CONVERTED INTO SINGLE NON-AGRICU LTURAL PLOT ADMEASURING 11,192 MTRS. THESE FACTUAL CONTENTIONS ARE DULY SU PPORTED BY THE CERTIFICATES ISSUED BY THE RESPECTIVE AUTHORITIES WHICH ARE PART OF THE RECORD. THE HON'BLE SPECIAL BENCH IN THE CASE OF BRAHMA ASSOCIATES VS J CIT (SUPRA) HAS HELD THAT ONCE THE APPROVAL HAS BEEN ACCORDED BY LOCAL AUTHOR ITY AS TO THE HOUSING PROJECT, THERE IS NO REQUIREMENT IN THE ACT TO FURTHER MAKE ANY INQUIRY AS TO THE ELIGIBILITY OF THE PROJECT FOR BENEFIT U/S 80IB(1) OF THE ACT. WE ALSO FIND MERIT IN THE CONTENTION OF THE ID. COUNSEL FOR THE ASSESSEE THAT THE WORDS 'THE PROJECT' IN CLAUSE (B) OF SECTION 80IB(10) HAS TO BE READ IN A PLURAL SENSE AS TO MEAN THAT IF THERE ARE MORE THAN A SINGLE PROJECT, ALL PUT TOGET HER SHOULD BE CONSIDERED AS 'THE PROJECT'. THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD VS CIT (SUPRA) PUTS A BAR ON THE DEPARTMENT FRO M FALLING IN ANY NARROW ITA NO 537/RJT/2014 . A.Y. 2007-08 4 INTERPRETATION OF INCENTIVE PROVISIONS TO FRUSTRATE THE VERY PURPOSE OF THE INCENTIVE SOUGHT FOR. WITH THESE OBSERVATIONS, WE PROCEED TO EXAMINE THE DECISION OF THE LD. CIT(A). 9. THE LD. CIT(A), IN CONSIDERATION OF THE VARIOUS SUBMISSIONS OF THE ASSESSEE BEFORE HIM, HAS APPENDED THE FOLLOWING FINDINGS: 5. I HAVE CAREFULLY CONSIDERED THE ISSUE. THE MAI N REASON FOR DISALLOWANCE OF CLAIM BY THE AO IS THAT ACCORDING T O HIM APPELLANT WAS DEVELOPING TWO PROJECTS NAMELY 'GEET GUNJAN RESIDEN CY' AND GEET GUNJAN VATLKA', WHICH WERE SEPARATE ENTITLES, AS THERE WER E TWO SEPARATE HOUSING SOCIETIES FOR THE SAME. HOWEVER, I FIND THAT THE AP PELLANT HAD PURCHASED 2 ACRES AND 31 GUNTHAS OF LAND BEARING PLOT NO 212 AN D 217 AND HAD APPLIED FOR CONVERSION OF THIS LAND FOR THE PURPOSE OF CONSTRUCTION OF RESIDENTIAL UNITS. AS PER THE TERMS AND CONDITIONS OF THE AGREEMENT I PERMISSION, DIVISION OF THESE TWO PLOTS WAS NOT PER MITTED AND BY THE ORDER OF COLLECTOR, RAJKOT THESE WERE CONVERTED INTO A SI NGLE NON-AGRICULTURAL PLOT ADMEASURING 11192 SQ.MT. PERMISSION FOR ONE CONSTRUCTION WAS ACCORDED STATING THAT ENTIRE PROJECT WAS TO CONSIST OF 94 RESIDENTIAL UNITS OUT OF WHICH UNITS NO,1 TO 64 WOULD BE ON PLOT NO.2 12 AND OTHERS ON PLOT NO.217. IT GOES TO SHOW THAT PERMISSION FOR CONSTRU CTION WAS FOR THE ENTIRE PROJECT, WHICH WAS LATER ON NAMED AS' 'GEET GUNJAN RESIDENCY FOR ONE PORTION AND 'GEET GUNJAN VATIKA' FOR THE OTHER. SI MILARLY, COMPLETION AND OCCUPANCY PERMISSION WAS ALSO ACCORDED VIDE ORDER D TD 1-4-06 WHICH WAS FINAL COMPLETION CERTIFICATE AND (HE SAME WAS A COM MON CERTIFICATE FOR BOTH THE PLOTS, NAMELY 'GEET GUNJAN RESIDENCY' AND 'GEET GUNJAN VATIKA'. APPARENTLY THE PERMISSION AND COMPLETION WAS TAKEN FOR THESE TWO NAMED SOCIETIES BY A SIMILAR ORDER. THE VIEW OF THE AO T HAT SINCE 'GEET GUNJAN VATIKA' WAS DEVELOPED ON A SMALLER PLOT AND THEREFO RE NOT ELIGIBLE TO DEDUCTION U/S 80IB(10) IS WRONG WHEN ENTIRE PROJECT WAS STARTED BY THE APPELLANT AS A SINGLE PROJECT AND WAS ALSO COMPLETE D ACCORDINGLY. IT IS IMPORTANT TO NOTE THAT APPELLANT WAS NOT EVEN ALLO WED TO DIVIDE THESE PLOTS. MERELY BECAUSE THERE ARE TWO HOUSING SOCIETI ES IT WOULD NOT MEAN THAT THE PROJECTS ARE DIFFERENT. FORMING A SEPARATE HOUSING SOCIETY SEPARATELY IS A PREROGATIVE OF THE OWNERS OF RESIDE NTIAL UNITS AND IT IS NOT THE DEVELOPER'S WISH, WHICH WOULD PREVAIL. FOR EXA MPLE, THERE MAY BE FIVE TOWERS IN A BIG PROJECT AND OWNERS OF TOWER MAY FOR M A SEPARATE HOUSING SOCIETY AND THEY MAY HAVE A SEPARATE ENCLOSURE FOR THEMSELVES. BUT THIS WOULD NOT MEAN THAT FOR THE DEVELOPER EACH TOWER WO ULD BECOME SEPARATE PROJECTS. THE LAND PLAN ALSO SHOWS THAT PLOT NO.212 AND 217 ON WHICH THESE TWO SOCIETIES ARE DEVELOPED ARE ADJACENT AND AS SOCIETIES ARE TWO, THEY MAY HAVE CHOSEN TO SEPARATE OPENERS FOR THEIR SOCIETIES, BUT SO FAR AS THE DEVELOPER IS CONCERNED, THE PROJECT REMAINS ONE . IT IS NOTICED THAT THE LAND WAS PURCHASED AS A SINGLE UNIT, PERMISSION FOR CONVERSION WAS GIVEN AS A SINGLE UNIT WITH A RIDER THAT THESE TWO PLOTS CANNOT BE DIVIDED BY THE DEVELOPER. PERMISSION FOR STARTING OF CONSTRUCTION WAS TAKEN TOGETHER FOR 94 UNITS AND EVEN FINAL COMPLETION CERTIFIC ATE IS COMMON. ITA NO 537/RJT/2014 . A.Y. 2007-08 5 THEREFORE, SO FAR AS THE DEVELOPER IS CONCERNED , HE HAS DEVELOPED ONE PROJECT ONLY AND IT WOULD BE WRONG TO DENY THE BENEFIT FOR THE REASON THAT ONE PARTICULAR PART IS BEING OWNED BY A SEPAR ATE SOCIETY AND SAME IS ON A SMALLER PLOT. AS THE PROJECT REMAINS THE SAME, I FIND NO REASON TO DENY CLAIM U/S 80IB(10) AND THE AO IS DIRECTED TO A LLOW THE CLAIM MADE BY THE APPELLANT.' 10. WE DO NOT SEE ANY INFIRMITY IN THE ABOVE FINDIN GS RECORDED BY THE LD.CIT(A). THEREFORE, IN OUR CONSIDERED OPINION, NO INTERFERENCE FROM OUR SIDE IS CALLED FOR IN THE ORDER OF THE LD.CIT(A). BEFORE US, REVENUE HAS NOT POINTED ANY DISTINGUISHI NG FEATURE OF THE CASE OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION AS COM PARED TO THAT OF A.Y. 2006-07. IN VIEW OF THE AFORESAID FACTS, WE FIND N O REASON TO INTERFERE WITH THE ORDER OF CIT(A). THUS, THIS GROUND OF REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 16/02/2016 SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 16/02/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT