Income tax Officer, Pune V. M/s. G K Associates, Pune

ITA 548/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5511 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V L JAIN
• Keywords: Reassessment proceedings
• Section: 143(1); 147; 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 548/PUN/2017 / ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, WARD-3(1), PUNE. ....... / APPELLANT / V/S. M/S. G K ASSOCIATES, 1204/26, SHIVAJINAGAR, PUNE-411 004. PAN : AAFFG 4726Q / RESPONDENT ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI PANKAJ GARG / DATE OF HEARING : 28.01.2019 / DATE OF PRONOUNCEMENT : 29.01.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM THE ORDER OF LD. CIT(APPEALS)-3, PUNE DATED 28.01.2016 FOR THE ASSESSMENT YEARS 2008-09 & 2009-10 AS PER FOLLOWING GROUNDS OF APPEAL ON RECORDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEDUCTION OF RS.3,17,18,15 8/- U/S 80IB(10) IN RESPECT OF PROJECT 'BHANSALI CAMPUS' WITHOUT APPREC IATING THE FACT THAT THE SPECIFIC CONDITION OF SECTION 80IB(10)(A)(I) OF THE I.T. ACT WAS NOT SATISFIED. 2 ITA NO. 548/PUN/2017 A.Y.2008-09 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT BUILDING 'E' WAS A SEPARATE PROJECT, W ITHOUT APPRECIATING THAT COMMENCEMENT CERTIFICATE AND THE COMPLETION CE RTIFICATE HAD BEEN ISSUED FOR THE PROJECT 'BHANSALI CAMPUS' AS A WHOLE AND NOT INDIVIDUALLY TO ANY BUILDING. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE IMPORT OF SECTION 80IB(10), WH ICH SPEAKS ABOUT SANCTION TO THE 'HOUSING PROJECT' AND NOT TO THE IN DIVIDUAL BUILDINGS IN THE PROJECT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE BUILDINGS 'A', ' B', 'C', '0' & 'E' ARE INTERLINKED IN SPACE AND STATUTORY SANCTIONS AND, T HEREFORE, IT FORMED PART OF THE HOUSING PROJECT ONLY. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR OMIT ANY OF THE ABOVE GROUNDS OF APPEAL DURING THE COURSE OF THE AP PELLATE PROCEEDINGS. 2. THE ONLY ISSUE TO BE DECIDED IS THE DEDUCTION CLAIMED U/S .80IB(10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. THE BRIEF FACTS IN THIS CASE ARE THAT DURING REASSESS MENT PROCEEDINGS THE ASSESSING OFFICER ON VERIFICATION OF THE PLAN SANCTION/CO MPLETION CERTIFICATES/DOCUMENTS PERTAINING TO THE ASSESSEES PROJ ECT BHANSALI CAMPUS NOTICED THAT BUILDING E FORMING PART OF THE SAID PROJECT WAS NOT COMPLETE AS ON 31.08.2008 AND THEREBY THE CONDITION LAID U /S.80IB(10) FOR AVAILING THE SAID DEDUCTION WAS VIOLATED. IN VIEW OF THE ABOV E, ENTIRE DEDUCTION CLAIMED FOR ASSESSMENT YEARS 2008-09 AND 200 9-10 WAS DENIED BY THE ASSESSING OFFICER AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESS EE. 4. THE LD. AR OF THE ASSESSEE MADE DETAILED WRITTEN SU BMISSIONS BEFORE THE LD. CIT(APPEALS) AND THE RELEVANT PART IS AS UNDER: 5.2 SUBMISSION OF THE AR : THE LD AR OF THE APPELLANT HAS GIVEN FOLLOWING COMMON WRITTEN SUBMISSIONS FOR BOTH THE Y EARS UNDER CONSIDERATION. 'THE APPELLANT IS A PARTNERSHIP FIRM IN THE BUSINES S OF PROMOTERS AND BUILDERS AND WGS ENGAGED IN THE EXECUTION OF A HOUS ING PROJECT IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2008-09. 3 ITA NO. 548/PUN/2017 A.Y.2008-09 THE APPELLANT HAD FILED THE RETURN OF INCOME ON 30.09.2008 DECLARING 'THE TOTAL INCOME AS NIL AFTER A CLAIM OF DEDUCTION UNDE R SECTION 80IB(10) OF A SUM OF RS.3,17,18,158/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S. 143(1) ON 11.03.2010 AND THE TAX PAYABLE WAS DETERMINED AT NIL. A NOTICE U/S. 148 WAS ISSUED BY THE AO FOR THE REASONS THAT INCOME CHARGEABLE TO TAX FOR THE A.Y.2008-09 HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 IN VIEW OF THE ALLOWANCE OF CLAIM U/S 80IB(10). OBJECTIONS TO THE REASSESSMENT PROCEEDINGS WERE FIL ED BY THE APPELLANT AND DISPOSED OFF BY THE AO. DURING THE COURSE OF PROCEE DINGS, FURTHER SUBMISSIONS REGARDING THE ALLOWANCE OF CLAIM U/S.80 IB(10) WERE MADE. THE CLAIM FOR A.Y. 2007-08 WAS A SUBJECT MATTER OF T HE APPEAL BEFORE HON. ITAT AND THE HON. TRIBUNAL HAD ALLOWED THE CLAIM OF THE ASSESSEE. ASSESSING OFFICER FOR THE REASONS THAT ONE BUILDING , BEING BUILDING 'E' WAS NOT COMPLETED BEFORE 31.03.2008 AS ALSO FOR THE FAC T THAT THE DEPARTMENT HAD FILED BEFORE HON. BOMBAY HIGH COURT FOR A.Y.200 7-08 AND TO KEEP THE ISSUE ALIVE, DISALLOWED THE CLAIM OF RS.3,17,18,158 /- U/S 80IB(10) OF THE INCOME TAX ACT,1961. THIS DISALLOWANCE HAS RESULTED IN A TOTAL INCOME OF 3,17,18,160/; * ARID A TOTAL DEMAND OF RS. 2,10,22,950/-. IT IS THE ADDITION WHICH IS THE SUBJECT MATTER OF T HE PRESENT APPEAL. CONTENTIONS BEFORE YOUR HONOUR. A) THE PRESENT APPEAL RELATES TO DISALLOWANCE OF THE C LAIM U/S 80IB(10). B) AN IDENTICAL ISSUE INVOLVING THE SAME PROJECT AND S AME GROUNDS, AS IS IN THE CURRENT APPEAL, WAS A MATTER OF APPEAL BEFORE T HE HON, ITAT PUNE FOR THE EARLIER YEAR. THE HON. ITAT HAS DECIDED THE APP EAL IN THE FAVOUR OF THE APPELLANT. COPY OF THE SAID ORDER DATED 04.03.2 013'IS ENCLOSED HEREWITH AS ANNEXURE 1 . A SIMILAR APPEAL FOR A.Y. 2009-10 WAS ALSO FILED ON 15.03.2016 WITH THE OFFICE OF HON. CIT(A) WHICH INVOLVES THE SAME PROJE CT ARID SAME GROUNDS OF APPEAL. IT IS THEREFORE REQUESTED THAT THE CASE OF THE APPE LLANT FOR BOTH THE ASSESSMENT YEAR I.E. A.Y. 2008-09 AND A.Y. 2009-10 MAY KINDLY BE DECIDED ON THE BASIS OF THE SAID ORDER OF THE HON.TRIBUNAL. 5. THE LD. CIT(APPEALS) AFTER CONSIDERING THE ASSESSMENT O RDER, SUBMISSIONS OF THE ASSESSEE AND FACTS AND CIRCUMSTANCES IN THIS CASE HAS HELD AS FOLLOWS: 5.3 DECISION :- I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE REASSESSMENT ORDERS AS WEL L AS THE CONTENTIONS RAISED BY THE AR OF THE APPELLANT IN THE GROUNDS AN D WRITTEN 4 ITA NO. 548/PUN/2017 A.Y.2008-09 SUBMISSIONS. SIMILAR DISALLOWANCE MADE IN APPELLANT S CASE FOR A.Y.2007-08 IN RESPECT OF THE SAME PROJECT WAS CONF IRMED BY THE LD. CIT(A)-II, PUNE VIDE ORDER DATED 09.07.2010. THIS O RDER WAS FURTHER CHALLENGED BEFORE THE ITAT, PUNE AND THE HON'BLE IT AT VIDE ORDER IN ITA NO.1137/PN/2010 DATED 04.03.2013 DECIDED THE APPEAL IN FAVOUR OF THE APPELLANT. THE OPERATIVE PORTION OF THE ORDER IS RE PRODUCED BELOW: 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PART IES AND PERUSED THE RECORD. THE LEARNED COUNSEL ARGUES THAT THERE IS NO DISPUTE IN THIS CASE THAT THE ASSESSEE WAS BOUND TO COMPLETE THE HOUSING PROJECT ON OR BEFORE 31-03-2010 BUT THAT WA S ONLY IN RESPECT OF 4 BUILDINGS A, B, C, AND D. HE SUBMITS T HAT AS PER THE REVISED PLAN SANCTIONED ON 30-03- 2007, ONE MORE BU ILDING E WAS ADDED BUT IN THE ORIGINAL SANCTIONED LAYOUT THERE W ERE ONLY 4 BUILDINGS. HE SUBMITS THAT THE COMMENCEMENT CERTIFI CATE (CC), DATED 30-03-2007 (PAGE NO. 48 OF THE COMPILATION) I S RELEVANT ACCORDINGLY TO CONSIDER BUILDING E WHICH WAS ADDE D IN THE LAYOUT. HE SUBMITS THAT BUILDING PLAN OF BUILDING E HAS BEEN SANCTIONED ON 30-03-2007 AND HENCE, IT IS A SEPARAT E HOUSING PROJECT. HE PLACED HEAVY RELIANCE ON THE DECISION O F THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VA NDANA PROPERTIES 206 TAXMAN 584 (BOM H.C.) AND SUBMITS TH AT MERELY BECAUSE BUILDING E IS INCLUDED IN THE COMMON LAYOUT IT DOES NOT MEAN THAT BUILDING E IS A PART OF ONE HOUSING PRO JECT. HE SUBMITS THAT THE ASSESSEE GOT SOME ADDITIONAL FSI AND THAT WAS UTILIZED IN ALL THE BUILDINGS INCLUDING BUILDING E. HE SUBMIT S THAT NO WHERE IT A CONDITION IN U/S.80IB(10) THAT A SEPARATE BUIL DING AS A SEPARATE HOUSING PROJECT CANNOT BE SANCTIONED IN ON E PLAN. HE FURTHER PLEADED THAT THE PROFIT IN RESPECT OF BUILD ING E IS NOT AT ALL CONSIDERED FOR CLAIMING THE DEDUCTION U/S.80IB(10). 6. PER CONTRA THE LD.DR VEHEMENTLY ARGUED THAT BUIL DING E IS A PART OF ONE HOUSING PROJECT ONLY. HE SUBMITS THAT T HERE IS A COMMON AMENITY PLACE RESERVED FOR ALL THE 5 BUILDIN GS. THE LD. DR FILED A CHART TO SHOW THAT THE ASSESSEE GOT ADDITIO NAL FSI WHICH WAS UTILIZED IN THE BUILDINGS B,C, D AND E. HE SUBM ITS THAT THE ASSESSEE KEPT REVISING THE PLANS AND NO SEPARATE PL AN HAS BEEN APPROVE IN RESPECT OF BUILDING E. HE ALSO REFERS TO EXPLANATION BELOW U/S.80IB(10) AND SUBMITS THAT AND SAIDEXPLANA TION REFERS TO LAYOUT PLAN AND NOT BUILDING PLAN TO EXPLAIN HOU SING PROJECT. HE PLEADED FOR CONFIRMING THE LD.CIT(A). 7. THE CORE ISSUE FOR ADJUDICATION BEFORE US IS WHE THER BUILDING E IS A SEPARATE HOUSING PROJECT OR IT IS A PART OF TH E HOUSING PROJECT ORIGINALLY SANCTIONED VIDE ORDER DATED 15-09-2003. THE ORIGINAL PLAN FILED BUT THE ASSESSEE COMPRISES OF 4 BUILDING S A, B, C, AND D AS PER THE DOCUMENTS ON RECORD. WE FIND THAT BUIL DING E IS ADDED IN THE PLAN WHICH GOT APPROVED VIDE COMMENCEM ENT CERTIFICATE DATED 30-03-2007. IT IS ALSO SEEN THAT FROM THE FIRST SANCTION/APPROVAL OF THE PROJECT PLAN, THE ASSESSEE KEPT APPLYING FOR THE REVISION. ADMITTEDLY UP TO 30-03-2007 BUILD ING E WAS NOT IN THE LAY OUT BUT IT IS SEPARATELY ADDED. WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL THAT NOWHERE IT IS PROVIDED IN SECTION 80IB(10) THAT TO BE A SEPARATE PROJECT, THE PLAN ALSO SHOULD BE SEPARATE. ULTIMATELY THE PROCEDURE OF THE PLANS FOR GETTING THE SANCTION OF THE LOCAL AUTHORITY IS REGULATED UNDER THE DIFFERENT RULES AND REGULATIONS. IN THE CASE OF VANDANA PROPE RTIES (SUPRA), IT IS HELD THAT HOUSING PROJECT NEED NOT BE A PROJE CT OF THE GROUP OF BUILDINGS BUT ONE SINGLE BUILDING CAN CONSTITUTE A SEPARATE HOUSING PROJECT. LET US DEAL WITH THE ARGUMENT OF L D.DR THAT THE 5 ITA NO. 548/PUN/2017 A.Y.2008-09 ADDITIONAL FSI ACQUIRED WAS USE BY THE ASSESSEE IN ALL 4 BUILDINGS I.E. B,C,D, AND E. IN OUR OPINION, THERE ARE NO RES TRICTIONS IN THE INCOME-TAX ACT ON THE ASSESSEE HOW TO DESIGN HIS HO USING PROJECT. MOREOVER, MERELY BECAUSE PART OF THE FSI HAS BEEN U TILIZED IN BUILDING E WHICH IS CLAIMED AS SEPARATE HOUSING P ROJECT, THE ASSESSEE SHOULD NOT BE DEPRIVED OF THE BENEFIT OF S ECTION 80IB(10). WE, THEREFORE, HOLD THAT ON THE FACTS AND CIRCUMSTA NCES OF THIS CASE, BUILDING E IS A SEPARATE HOUSING PROJECT. A NOTHER ASPECT TO BE CONSIDERED HERE, AS SUBMITTED BY THE LEARNED COU NSEL, THE UTILITIES SPACE IS SHIFTED TO SEPARATE PLOT AND BUI LDING E WAS CONCEPTUATED SEPARATELY. WE, THEREFORE, ALLOW THE A PPEAL FILED BY THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO AL LOW THE CLAIM U/S.80IB (10) TO THE ASSESSEE. 5.3.1 IN VIEW OF THE ABOVE DISCUSSION, THE ISSUE UNDER CONSIDERATION IS PARI-MATERIA IDENTICAL AS FOR A.Y.2007-08 BEING IN RESPECT OF THE SAME PROJECT OF THE APPELLANT, THEREFORE, THE DECISION T AKEN IN A.Y.2007-08 BY THE JURISDICTIONAL ITAT VIDE ORDER DATED 04.03.201 3 IS FOLLOWED. ACCORDINGLY, GROUND NO. 2 IS ALLOWED FOR ASST. YEAR S 2008-09 & 2009- 10. 6. WE HAVE PERUSED THE CASE RECORDS AND CONSIDERED T HE JUDICIAL PRONOUNCEMENT PLACED BEFORE US. WE FIND THAT THE LD. CIT(A PPEALS) HAS DECIDED THE ISSUE BASED ON THE DECISION OF CO-ORDINATE BE NCH OF THE TRIBUNAL, PUNE IN ASSESSEES OWN CASE FOR A.Y.2007-08 IN FAVOUR OF T HE ASSESSEE. WE HAVE PERUSED THE COPIES OF THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL, PUNE IN ITA NO.1137/PN/2010 DATED 04.03.2013 FOR THE ASS ESSMENT YEAR 2007-08. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE FINDIN GS OF THE LD. CIT(APPEALS) AND RELIEF PROVIDED TO THE ASSESSEE IS THEREBY SUSTAINED . 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 29 TH DAY OF JANUARY, 2019. SD/- SD/- R.S.SYAL PAR THA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 29 TH JANUARY, 2019. SB 6 ITA NO. 548/PUN/2017 A.Y.2008-09 !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-3, PUNE. 4. THE PR. CIT-2, PUNE. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 7 ITA NO. 548/PUN/2017 A.Y.2008-09 DATE 1 DRAFT DICTATED ON 28 .01.2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 29 .01 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER