ITO 9(2)(1), MUMBAI V. SHABBIR K. KANCHWALA, MUMBAI

ITA 5626/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2939 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 28-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 5626/MUM/2012 (ASSESSMENT YEAR:2007-08) INCOME TAX OFFICER 9(2)(1), R.NO.225, 2 ND FLOOR, M. K. ROAD, MUMBAI 400 020 APPELLANT VS. SHRI SHABBIR K KANCHWALA 601, SHANKLA RESIDENCY, DADOJI, KONDEV MARG, BYCULLA (E), MUMBAI 400 027 RESPONDENT PAN: AEMPK4671K /BY APPELLANT : SHRI LOVE KUMAR, D.R. /BY RESPONDENT : SHRI VIMAL PUNANIYA, A.R. /DATE OF HEARING : 20.06.2016 /DATE OF PRONOUNCEMENT : 24.06.2016 ITA NO.5626/MUM/12 A.Y. 07-08 [ITO VS. SHABBIR K. KANCHWALA] PAGE 2 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-20, MUMBAI, DATED 16.07.2012 FOR A.Y. 2007-08 ON FOLLOWING GROUNDS: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS CORRECT IN L AW IN HOLDING THAT THE INITIATION OF REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND SUBSEQUENT ISSUANCE OF NOTICE U/S.148 OF THE ACT FOR A.Y. 2007 - 08 IN ASSESSEES CASE IS DUE TO CHANGE IN OPINION AND IS BAD IN LAW? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS CORRECT IN LAW IN DIRECT ING THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S.80- IB(10) OF THE ACT AMOUNTING TO RS.55,67,567/- TO ASSESSEE DESPITE NON-COMPLIANCE TO THE PROVISIONS OF THIS SECTION? 2. ASSESSING OFFICER MADE DISALLOWANCE OF CLAIM U/S.80IB(10) OF THE ACT ON THE GROUND THAT COMMENCE MENT CERTIFICATE WAS OBTAINED BEFORE 01.10.1998 AND THE HOUSING PROJECT WAS INCLUSIVE OF SHOPS HAVING AREA OF MORE THAN 2000 SQ.FT. ASSESSING OFFICER OBSERVED THAT ASSESSEE AC QUIRED DEVELOPMENT RIGHTS VIDE AGREEMENT DATED 20.11.1995. THE COMMENCEMENT CERTIFICATE WAS GRANTED BY CIDCO VIDE LETTER DATED 16.06.1995. SINCE, THIS DATE WAS 16.06.1995, ASSESSEE DID NOT QUALIFY FOR DEDUCTION U/S.80IB(10) OF THE ACT. ASSESSING OFFICER WAS ALSO OF THE VIEW THAT U NAUTHORIZED ITA NO.5626/MUM/12 A.Y. 07-08 [ITO VS. SHABBIR K. KANCHWALA] PAGE 3 CONSTRUCTION WAS ALSO BEGUN I.E. BEFORE SEEKING THE PLINTH CERTIFICATE. THIS PROVOKED CIDCO TO REJECT THE APP LICATION DATED 20.01.1997 MADE BY ASSESSEE. HENCE, ASSESSEE S CONTENTION THAT THE APPROVAL GRANTED BY CIDCO DATED 04.09.2003 WAS A FRESH APPROVAL, SO, CLAIM OF ASSES SEE WAS DISMISSED. 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRA NTED RELIEF TO ASSESSEE. 2.2 SAME HAS BEEN OPPOSED ON BEHALF OF REVENUE BEFO RE US INTER ALIA SUBMITTING THAT CIT(A) WAS NOT JUSTIFIED IN GRANTING RELIEF TO ASSESSE. SAME SHOULD BE SET ASIDE AND TH E ORDER OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, L D. AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CI T(A). 2.3 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT CIT(A) OBSERVED FROM THE RECOR D THAT DEVELOPMENT CONSTRUCTION ACTIVITY IN RESPECT OF PRE SENT HOUSING PROJECT WAS STARTED ONLY AFTER RECEIVING TH E COMMENCEMENT CERTIFICATE DATED 04.09.2003. IT CLEA RLY SHOWS THAT PROJECT COMMENCED AFTER 01.10.1998. ASS ESSING OFFICER HAD COME TO AN ERRONEOUS CONCLUSION THAT DEVELOPMENT/CONSTRUCTION ACTIVITY IN RESPECT OF IMP UGNED HOUSING PROJECT HAD COMMENCED BEFORE 01.10.1998 AND , ITA NO.5626/MUM/12 A.Y. 07-08 [ITO VS. SHABBIR K. KANCHWALA] PAGE 4 THEREFORE, ASSESSING OFFICER WAS NOT JUSTIFIED ON T HIS POINT. IT IS UNDISPUTED FACT THAT ASSESSEE STARTED ONLY AFTER REQUISITE DATE OF COMMENCEMENT. 2.4 REGARDING ASSESSING OFFICERS OBSERVATION THAT HOUSING PROJECT INCLUDED SHOPS HAVING MORE THAN AREA OF 200 0 SQ. FT., IT WAS OBSERVED FROM THE LAY OUT PLAN THAT ASSESSEE S PROJECT WAS FULLY RESIDENTIAL. THE LAND ACQUIRED BY ASSESS EE WAS ONLY 4341.62 SQ.MTRS. OR 1.07 ACRES WHICH WAS REFLE CTED IN THE COPY OF BUILDING LAY OUT PLAN ALSO FILED BEFORE THE ASSESSING OFFICER. IN ABOVE, LAY OUT PLAN, NON RES IDENTIAL OF 7330.11 SQ.MTR. SHOWN WITH RED INK WAS CONSTRUCTED BY OTHER DEVELOPERS. FROM THE ARCHITECT CERTIFICATE, CIT(A) OBSERVED THAT THERE WERE NO SHOPS OR OTHER COMMERCI AL ESTABLISHMENT IN THE PROJECT INVOLVED IN THE CONSTR UCTION AS ASSESSEE HAD CONSTRUCTED 100% RESIDENTIAL PROPERTY. IN THIS SITUATION, ASSESSING OFFICER WAS NOT JUSTIFIED IN G ATHERING THE IMPRESSION THAT THE AREA OF SHOP IS 7331 SQ.MTR. I. E. 73310 SQ.FT. IN FACTS AND CIRCUMSTANCES, CIT(A) RIGHTLY CONCLUDED THE DEVELOPMENT CONSTRUCTION OF THE IMPUGNED HOUSIN G PROJECT CANNOT BE SAID TO HAVE COMMENCED BEFORE 01. 10.1998 AND THE AREA OF RESIDENTIAL UNIT WAS LESS THAN 1000 SQ.FT. THERE WAS NO CONSTRUCTION OF SHOPS AND COMMERCIAL ESTABLISHMENTS AS PER ARCHITECT CERTIFICATE AND BUI LDING PLAN. ACCORDINGLY, CIT(A) WAS JUSTIFIED IN ALLOWING THE D EDUCTION U/S.80IB(10) OF THE ACT AS CLAIMED BY ASSESSEE. TH US, THIS ITA NO.5626/MUM/12 A.Y. 07-08 [ITO VS. SHABBIR K. KANCHWALA] PAGE 5 REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FR OM OUR SIDE. WE UPHOLD THE SAME. 3. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 24/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&