Income-tax Officer, Ward - 14(3), Pune V. M/s. Nagpal Landmarks (Formerly एम्/एस Nagpal Properties), Pune

ITA 562/PUN/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8748 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2021
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 26-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘B’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI C.M. GARG, JUDICIAL MEMBER आयकर अपील सं. / ITA No.562/PUN/2018 िनधा रण वष / Assessment Year : 2011-12 ITO, Ward-14(3), Pune Vs. M/s. Nagpal Landmarks (Formerly M/s. Nagpal Properties), 614, Sacred World South Tower, Wanaworie, Pune 411 040 PAN : AAFFN1476N Appellant Respondent आदेश / ORDER PER R.S.SYAL, VP : This appeal by the Revenue arises out of the order passed by the CIT(A)-10, Pune on 22-01-2018 in relation to the assessment year 2011-12. 2. The Revenue is aggrieved by the grant of proportionate deduction u/s 80IB(10) of the Income-tax Act, 1961 (hereinafter also called `the Act’) by the ld. first appellate authority. Briefly stated, the facts of the case are that the assessee has been engaged in the business of developing housing projects, including, `Dev Exotica’ at Survey No. 38/1, Chandan Nagar, Mundwa Bypass Kharadi, Pune. The assessee claimed deduction u/s.80IB(10) amounting to Assessee by : Shri Nikhil S. Pathak Revenue by : Shri Piyush Kumar Singh Yadav Date of hearing : 10-11-2021 Date of pronouncement : 11-11-2021 ITA No.562/PUN/2018 M/s. Nagpal Landmarks 2 Rs.5,03,15,530/- in respect of this project. The Assessing Officer (AO) observed two types of deficiencies in the assessee’s claim making it ineligible for the deduction. First, that the area of some flats was more than 1500 sq.ft. and second that the construction ought to have been completed up to 31-03-2011 as against the date of commencement at 06-03-2006, which was not the case. The assessee furnished completion certificate issued by PMC dated 05-03-2010. The AO found certain deficiencies in the same. Consequently, the claim for deduction was denied in total. The ld. CIT(A) agreed with the AO to the extent of area of certain flats exceeding 1500 sq.ft. He, therefore, directed that the proportionate deduction be allowed. As regards the date of completion, the ld. CIT(A) concurred with the assessee and allowed the deduction pro tanto. The Revenue has come up in appeal before the Tribunal. 3. We have heard the rival submissions and gone through the relevant material on record. The ld. AR fairly stated that the view taken by the ld. CIT(A) in granting proportionate deduction u/s.80IB(10) be upheld in the cases where the area per flat did not exceed the benchmark of 1500 sq.ft. An appeal filed by the assessee against the impugned order against this finding was separately ITA No.562/PUN/2018 M/s. Nagpal Landmarks 3 withdrawn. However, the Revenue’s contention for the full disallowance of deduction despite their being non-compliance with the condition of 1500 sq. ft. per flat only in few cases, is not acceptable. The Hon’ble Bombay High Court in Devashri Nirman LLP Vs. ACIT and another (2020) 429 ITR 597 (Bom.) has held that if some flats are more than 1500 sq.ft., then denial of deduction should be proportionate to that extent only and the entire deduction cannot be disallowed. In view of this decision rendered by the Hon’ble jurisdictional High Court, we do not find any reason to take exception to the view taken by the ld. CIT(A) on this score. The ground taken by the Revenue against this finding of the ld. CIT(A) is hereby dismissed. 4. As regards the second point, namely, the date of completion, the ld. AR fairly submitted that the cutoff date of 31-03-2011 taken by the AO be accepted as correct for the purpose of granting deduction u/s.80IB(10) of the Act. We, therefore, direct that proportionate deduction u/s.80IB(10) be allowed on this score as well. To put it simply, all the flats sold up to 31-03-2011 are eligible for deduction but where the area of flats sold is more than 1500 sq. ft., then the deduction should be restricted to that extent. The impugned order is, ITA No.562/PUN/2018 M/s. Nagpal Landmarks 4 therefore, modified to this extent and the other ground taken by the Revenue is allowed. 5. In the result, the appeal is partly allowed. Order pronounced in the Open Court on 11 th November, 2021. Sd/- Sd/- (C.M. GARG) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 11 th November, 2021 Satish आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent; 3. The CIT(A)-10, Pune 4. 5. 6. The Pr.CIT-4, Pune DR, ITAT, ‘B’ Bench, Pune गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA No.562/PUN/2018 M/s. Nagpal Landmarks 5 Date 1. Draft dictated on 10-11-2021 Sr.PS 2. Draft placed before author 10-11-2021 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *