M/s. Tirupati Pooja Construction, Kolhapur V. Assistant Commissioner of Income-tax,

ITA 561/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7709 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 27-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , ! $!%,& ! ' BEFORE SHRI D.KARUNAKARA RAO, AM & SHRI VIKAS AWAST HY, JM . / ITA NO.561/PUN/2015 &( ) *) / ASSESSMENT YEAR : 2011-12 M/S. TIRUPATI POOJA CONSTRUCTION, R.S.NO.177, E WARD, OPP.RAJHANS PRINTING PRESS, KOLHAPUR 416 001. PAN: AADFT5750D .. APPELLANT VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-2, KOLHAPUR. .. RESPONDENT ASSESSEE BY : SHRI M.K.KULKARNI DEPARTMENT BY : DR. VIVEK AGGARWAL DATE OF HEARING : 21-08-2017 DATE OF PRONOUNCEMENT : 23-08-2017 / ORDER PER D.KARAUNAKARA RAO, AM : THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR FOR THE ASSESSMENT YEAR 2011-12 . 2. BEFORE US, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THE G ROUND NO.1, 5 AND 6 ARE GENERAL OR CONSEQUENTIAL IN NATURE AND THEY CAN BE DISMISSED AS SUCH. REFERRING TO GROUND NO.4, LD.COUNSEL MENTIONED THAT SAID GROUND WAS RAISED BEFORE THE TRIBUNAL PASSED AN ORDER FOR THE Y EAR 2010-11. THEREFORE, CONSIDERING THE FAVOURABLE DECISION OF THE TRIBU NAL ON THIS 2 ITA NO.561/PUN/2015, M/S.TIRUPATI POOJA CONSRUCTION. ISSUE, THIS GROUND NO.4 CAN BE DISMISSED AS INFRUCTUOUS. A CCORDINGLY, WE DISMISS THE GROUND NOS. 1, 4, 5 AND 6. THAT LEAVES GROUND NO. 2 AN D 3 AND THE SAME READ AS UNDER: 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT (A) COMMITTED SERIOUS ERROR IN REJECTING THE CLAIM OF D EDUCTION MADE U/S 80IB(10) OF THE ACT PERTAINING TO RECEIPTS OF RS.30,86,982/- BEING ELECTRIC LINE CONTRIBUTION RECEIPT WHICH HAS DIRECT NEXUS WITH TH E SALE OF RESIDENTIAL UNITS. THAT ALL OTHER CONDITIONS FOR ALLOWANCE OF DEDUCTIO N U/S 80IB(10) ARE COMPILED AND SATISFIED. THE DEDUCTION CLAIMED BE A LLOWED. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD.CIT (A) WAS NOT JUSTIFIED CONFIRMING THE REJECTION OF CLAIM OF DEDUCTION UNDER S. 80IB(10) MADE BY THE A. O. ON SALE PARKING AREA ALL OTTED TO RESIDENTIAL UNITS SOLD IN HOUSING PROJECT CONSTRUCTED BY THE ASSESSEE . THE ASSESSEE IS ENTITLED TO SUCH CLAIM OF DEDUCTION U/S 80IB OF THE ACT AS P ER LAW. IT BE ALLOWED. 3. REFERRING TO THE GROUND NO.3, THE LD.COUNSEL FILED A COPY OF THE ORDER OF THE TRIBUNAL FOR THE A.Y.2010-11 VIDE ITA NO.888/PUN/2 014, DT.30/06/2017 WHEREIN THE ISSUE RELATING TO ALLOWABILITY OF DE DUCTION U/S 80IB(10) OF THE ACT RELATING TO THE RECEIPTS EARNED ON S ALE OF PARKING AREA OF THE HOUSING PROJECT. IN THIS REGARD, LD.COUNSEL BROUGH T OUR ATTENTION TO THE CONTENTS OF PARA 8 AND 9 AND SUBMITTED THAT THIS IS SUE NEEDS TO BE REMANDED TO THE FILE OF THE ASSESSING OFFICER TO RE-DECIDE THE ISSUE. THE LD.AUTHORISED REPRESENTATIVE PLEADED FOR REMANDING THIS I SSUE RAISED IN GROUND NO.3 OF THE ASSESSEES APPEAL TO THE FILE OF THE AS SESSING OFFICER WITH IDENTICAL DIRECTIONS. 4. ON HEARING BOTH THE PARTIES WHERE DEPARTMENTAL REPR ESENTATIVE RELIED HEAVILY ON THE ORDER OF THE AO AND CIT(A), WE FIND NECESSITY T O EXTRACT THE SAID CONTENTS OF PARA 8 AND 9 (SUPRA) AND THE SAME READ AS UNDER : 8. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MA DE BEFORE LOWER AUTHORITIES AND FURTHER SUBMITTED THAT THE AREA OF FLAT SOLD ALONG WITH THE PARKING SPACE IS WITHIN THE PRESCRIBED LIMIT OF AREA AS PER SEC.80IB(10) AND THEREFORE ELIGIBLE FOR DEDUCTION. HE THEREFORE SUB MITTED THAT THE MATTER MAY 3 ITA NO.561/PUN/2015, M/S.TIRUPATI POOJA CONSRUCTION. BE REMITTED BACK TO AO FOR VERIFICATION AND THEREAF TER ALLOW THE CLAIM OF THE ASSESSEE. LD.D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESP ECT TO DEDUCTION U/S 80IB(10) OF THE ACT, THE CLAIM OF WHICH WAS DENIED BY LOWER AUTHORITIES. BEFORE US, IT IS ASSESSEES SUBMISSION THAT THE AREA OF PARKING SPACE IS WITHIN THE AREA PRESCRIBED FOR ELIGIBLE FOR DEDUCTI ON. WE FIND THAT THERE IS NO FINDING ON THIS ISSUE BY THE LOWER AUTH ORITIES. IN SUCH A SITUATION WE ARE OF THE VIEW THAT THE ISSUE NEEDS TO BE RE-EX AMINED IN THE LIGHT OF THE SUBMISSIONS MADE BY ASSESSEE. WE THEREFORE RESTORE THE ISSUE TO THE FILE OF AO TO RE-DECIDE THE ISSUE AFTER EXAMINING THE CONTE NTIONS OF ASSESSEE AND IN ACCORDANCE WITH LAW. NEEDLESS TO STATE THAT AO SHA LL GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. ASSESSEE I S ALSO DIRECTED TO COOPERATE BY PROMPTLY FILING THE DETAILS CALLED FOR BY THE AUTHORITIES. THUS THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 5. FROM THE ABOVE, IT IS EVIDENT THE ALLOWABILITY OF DEDUCTIO N U/S 80IB(10) IN RESPECT OF THE RECEIPTS RELATABLE TO THE AREA OF PARKING SPACE WAS THE SUBJECT MATTER WHICH WAS ALREADY ADJUDICATED B Y THE TRIBUNAL IN THE PRECEDING A.Y. 2010-11. FOR WANT OF FACTS, THE SAID IS SUE WAS REMANDED TO THE ASSESSING OFFICERS FILE. FOR THE SAKE OF C ONSISTENCY, WE FIND NECESSITY TO REMAND THIS ISSUE TO THE FILE OF THE AO WIT H IDENTICAL DIRECTIONS. AO SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, GROUND NO.3 IS ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO.2 RELATES TO THE ALLOWABILITY OF DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF THE RECEIPTS OF RS.30,86,982/-, BEING THE ELECTRIC LINE CONTRIBUTION RECEIPTS COLLECTED FROM THE FLAT OWNERS FOR THE PURPOSE OF REMITTING THE SAME TO THE ELECTRICITY DEPARTMENT. SUCH D EPOSIT IS NEEDED FOR LAYING OF ELECTRICAL LINE TO THE PLACE OF THE HOUSING PRO JECT. IN THIS REGARD, THE SUBMISSION OF THE LD.AUTHORISED REPRESENTATIVE IS THAT THE SAID COLLECTIONS ARE ELIGIBLE FOR DEDUCTION UNDER THE SAID SECTION. 4 ITA NO.561/PUN/2015, M/S.TIRUPATI POOJA CONSRUCTION. 7. ON THE OTHER HAND, LD.DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE DEMONSTRATED SUCCESSFULLY THAT THE SAID RECEIPTS DO NOT CONSTITUTE ELIGIBLE PROFITS FOR THE ASSESSEE AS THE SAME ARE IN NATURE OF RE IMBURSEMENT BY THE FLAT BUYERS THROUGH THE OFFICES OF THE DEVELOPER OF THE HO USING PROJECT. THE DEVELOPER COLLECTS THIS AMOUNT FROM THE FLAT BUYERS AND DE POSITS THE SAME TO THE ELECTRICITY BOARD FOR LAYING OR OBTAINING ELECTRICAL LINE FOR THE BENEFIT OF THE HOUSING PROJECT. THERE IS NO PROFIT ELEMENT IN THE SE TRANSACTIONS TO THE DEVELOPER. THEREFORE, CLAIMING DEDUCTION ON SUCH REIMBU RSEMENT IS NOT ALLOWABLE. 8. AFTER HEARING BOTH THE SIDES, WE FIND MERIT IN THE SAME. FURTHER, WE PERUSED THE ORDER OF THE CIT(A) ON THIS ISSUE WHERE PAR A NO.6 DEALS WITH THE SAME. FOR THE SAKE OF COMPLETENESS OF THIS ORDER CO NTENTS OF SAID PARAGRAPH ARE REPRODUCED AS UNDER: 6. ON THE ABOVE FACTS IT IS SEEN THAT ELECTRIC SER VICE LINE CONTRIBUTION IS THE AMOUNT RECEIVED FROM CUSTOMERS TO INCUR EXPENSES IN SETTING UP ELECTRIC LINE BY THE ELECTRICITY BOARD. IT IS NOT REVENUE RECEIP T OF APPELLANT BUT THE AMOUNT TO BE RECEIVED FROM OWNERS AND PASSED ON TO THE ELE CTRICITY COMPANY. APPELLANT HAS CLAIMED THAT CONTRARY TO WHAT ASSESSI NG OFFICER SAYS, THE WORK IS CARRIED OUT BY BUILDER/DEVELOPER. THIS STATEMEN T IS NOT CORRECT. APPELLANT HAS NOT FURNISHED ANY DOCUMENT IN SUPPORT OF THIS C LAIM . THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THESE RECEIPTS FROM DEDUCTION UNDER SECTION 80IB(10). GROUNDS NO.1 AND 3 RAISED BY THE APPELLANT ARE REJECTED. 9. CONSIDERING THE ABOVE FACTS ON THE OBVIOUS INFERENCES, WE ARE OF THE VIEW THAT NO PROFIT IS EARNED BY THE ASSESSEE IN THE WHO LE PROCESS OF COLLECTING THE CONTRIBUTIONS FROM THE FLAT BUYERS AND REMIT TING THE SAME TO THE GOVERNMENT ACCOUNT FOR ELECTRICAL LINE. THEREFORE, REASONS GIVEN BY THE CIT(A) AND THE CONCLUSIONS THEREOF ARE HEREBY APPROVED WITHOUT ANY 5 ITA NO.561/PUN/2015, M/S.TIRUPATI POOJA CONSRUCTION. AMENDMENTS. ACCORDINGLY, THE GROUND NO.2 RAISED BY THE ASSESSEE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 23 RD DAY OF AUGUST, 2017. SD/- SD/- ($!% /VIKAS AWASTHY) (. /D.KARUNAKARA RAO) & !/ JUDICIAL MEMBER !/ ACCOUNTANT MEMBER / PUNE; / DATED : 23 RD AUGUST, 2017 S S . . G G . . R R +./&01$2$*0 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)-I & II, KOLHAPUR. 4. / THE CIT-I/2, KOLHAPUR. 5. , ! , #$ , / DR, ITAT, B BENCH, PUNE. 6. %& / GUARD FILE. / BY ORDER, / / TRUE COPY / / ., $ / SR. PRIVATE SECRETARY, ! , / ITAT, PUNE