ADDL CIT RG 2, MUMBAI V. SONAM BUILDERS, THANE

ITA 5634/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78846 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 07-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./ I.T.A. NO. 5634/MUM/2012 ( / ASSESSMENT YEAR: 2009-10) ASST. CIT, CIRCLE-2, 1 ST FLOOR, QURESH MANSION, GOKHALE ROAD, NAUPADA, THANE (W) 400 602 / VS. SONAM BUILDERS A-304, AKASH GANGA BLDG., DEVCHAND NAGAR, JAIN MANDIR ROAD, BHAYANDER (W), DIST. THANE-421 101 ' ./# ./PAN/GIR NO. AACFS 3498 J ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) '$ ' ( / APPELLANT BY : SHRI MAURYA PRATAP %&'$ ' ( / RESPONDENT BY : SHRI VIMAL PUNMIYA )* + ' , / DATE OF HEARING : 19.05.2014 -./ ' , / DATE OF PRONOUNCEMENT : 19.05.2014 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-II, THANE (CIT(A) FOR SHO RT) DATED 20.06.2012, ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143 (3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 20 09-10 VIDE ORDER DATED 07.12.2011. 2 ITA NO.5634/MUM/2012 (A.Y. 2009-10) ASST. CIT VS. SONAM BUILDERS 2. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT THE ISSUE ARISING IN THE I NSTANT CASE STANDS COVERED BY THE DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF CIT VS . BRAHMA ASSOCIATES [2011] 333 ITR 289 (BOM.) AND, FOLLOWING IT, BY THE HONBL E COURT IN ITS OWN CASE FOR A.YS. 2003-04 & 2004-05 (IN ITA NO.1420 OF 2011 & 1598 OF 2011 DATED 06.08.2012/PB PG.1). IN FACT, THE TRIBUNAL HAS ALSO, FOLLOWING TH E SAME, DISMISSED THE REVENUES APPEAL FOR F.Y. 2006-07, CHALLENGING THE DISALLOWANCE OF D EDUCTION U/S.80-IB(10) TO THE ASSESSEE ON ITS CONSTRUCTION PROJECT GOLDEN NEST (IN ITA N O.4607/MUM(E)/2011 DATED 18.07.2012/PB PGS.2-9), TAKING US THROUGH THE RELEV ANT PART OF THE SAID ORDER. THE SAME STAND WAS ADOPTED BY THE TRIBUNAL FOR A.Y. 2008-09 (PB PGS. 11-15). THE LD. DEPARTMENTAL REPRESENTATIVE (DR) ON BEING ENQUIRED BY THE BENCH IN THE MATTER, COULD NOT CONTROVERT THE SAID STATEMENT BY THE LD. AR. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 THE CONTROVERSY IN THE PRESENT CASE IS ON ACCOU NT OF TWO ASPECTS OF DEDUCTION U/S.80-IB(10), PERTAINING TO DIFFERENT QUALIFYING C ONDITIONS AS SPECIFIED IN THE PROVISION. THE SAME STAND AGITATED SEPARATELY BY THE REVENUE P ER ITS GROUNDS, AS UNDER: 1. ON THE FACTS OF THE CASE AND IN LAW, THE LD. CI T(A) ERRED IN DELETING AN ADDITION OF RS.40,35,261/- MADE ON ACCOUNT OF DE NIAL OF ASSESSEES CLAIM OF DEDUCTION U/S.80IB(10) WITHOUT APPRECIATING THE FINDINGS OF THE A.O. REGARDING VIOLATION OF ELIGIBILITY CONDITIONS PRESC RIBED FOR CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. 2. THE LD. CIT(A) ERRED IN DIRECTING THE A.O. TO AL LOW DEDUCTION U/S.80IB(10) EVEN THOUGH THE COMMERCIAL AREA EXCEED S 5% OF THE TOTAL BUILT UP AREA RELYING ON THE DECISION OF BRAHMA ASSOCIATE S VS. JOINT COMMISSIONER OF INCOME TAX [2009] 122 TTJ (PUNE)(SB ) 433 WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. 3. ON THE FACTS OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN ALLOWING THE ASSESSEES CLAIM OF DEDUCTION DESPITE THE FACT THAT A SINGLE UNIT EXCEEDED 1000 SQ. FT. WHICH IS A VIOLATION OF THE PROVISION U/S.80IB(10) OF THE I. T. ACT. 3 ITA NO.5634/MUM/2012 (A.Y. 2009-10) ASST. CIT VS. SONAM BUILDERS WHILE GD. NO. 1 IS GENERAL IN NATURE, GROUNDS 2 & 3 RAISE THE SPECIFIC ISSUES ARISING IN THE INSTANT CASE. WE SHALL TAKE BOTH OF THEM SEPARATELY , IN SERIATIM. 3.2 THE DEDUCTION UNDER REFERENCE IS IN RESPECT OF PHASES VII, X, XI AND XIA OF A HOUSING CONSTRUCTION PROJECT BY THE NAME GOLDEN NE ST. THE SAME BEARING COMMERCIAL AREA IN EXCESS OF THE PRESCRIBED PERCENTAGE OF 5% O F THE AGGREGATE BUILT UP AREA, OR 2000 SQ. FT., WHICHEVER IS LESS, THE SAME WAS CONSIDERED AS BARRED FOR DEDUCTION U/S.80-IB(10). THE HONBLE JURISDICTIONAL HIGH COURT, PER ITS DECI SION IN THE CASE OF BRAHMA ASSOCIATES (SUPRA), HAS CLARIFIED THAT A HOUSING PROJECT APPRO VED UPTO 31.03.2005, COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DEVELOPMENT CONTR OL RULES/REGULATIONS FRAMED BY THE RESPECTIVE LOCAL AUTHORITY WOULD HOLD IN-AS-MUCH AS THE AMENDMENT IN LAW, PRESCRIBING THE SAID LIMITATION CAME W.E.F. 01.04.2005. IN THE PRESENT CASE, IT IS UNDISPUTED THAT PHASES VII AND X WERE APPROVED BY THE LOCAL AUTHORI TY ON 25.01.2001 AND PHASES XI AND XIA ON 14.01.2004, I.E., BOTH PRIOR TO 01.04.2005 W .E.F. FROM WHICH DATE CLAUSE (D) STANDS INSERTED TO SECTION 80-IB(10). ACCORDINGLY, THE SAI D AMENDMENT WOULD, IN TERMS OF THE CITED DECISION BY THE HONBLE JURISDICTIONAL HIGH C OURT, HAVE NO BEARING ON THE ALLOWABILITY OF THE DEDUCTION UNDER THE PROVISION F OR THE SAID PHASES OF THE HOUSING PROJECT UNDER REFERENCE, WHICH AS IT APPEARS ARE RE CKONED AS SEPARATE HOUSING PROJECTS FOR THE PURPOSE OF S. 80-IB(10). THIS IS ALSO THE BASIS ON WHICH RELIEF STANDS ALLOWED BY THE TRIBUNAL TO THE ASSESSEE FOR THE EARLIER YEAR, I.E. , A.Y. 2006-07. RESPECTFULLY FOLLOWING THE DECISION BY THE HONBLE HIGH COURT, WE ADMIT AND AC CEPT THE ASSESSEES CASE FOR THE CURRENT YEAR AS WELL, ALLOWING GROUND NO. 2. 3.3 THE SECOND ASPECT, RAISED BY THE REVENUE PER IT S GROUND NO. 3, IS IN RESPECT OF THE CONSTRUCTION OF RESIDENTIAL UNITS EXCEEDING 1000 SQ . FT., SO THAT THE QUALIFYING CONDITION OF SECTION 80-IB(10)(C) STANDS NOT MET. TOWARD THIS, N O SPECIFIC ARGUMENT WAS RAISED BEFORE US BY THE LD. AR. A PERUSAL OF THE IMPUGNED ORDER ( PARA 9) THOUGH WOULD SHOW THAT THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT THIS ISSUE IS NO LONGER RELEVANT FOR THE CURRENT YEAR IN-AS-MUCH AS NO DEDUCTION STANDS CLAI MED (IN RESPECT OF THE RELEVANT PROJECT) FOR THE CURRENT YEAR. WE FIND THAT ON MERI TS, WHILE THE TRIBUNAL HAS CONFIRMED THE 4 ITA NO.5634/MUM/2012 (A.Y. 2009-10) ASST. CIT VS. SONAM BUILDERS DISALLOWANCE AT RS.6.70 LACS FOR A.Y. 2004-05, AS A LSO FOR A.Y. 2006-07, PERHAPS ON A PROPORTIONATE BASIS, THE HONBLE JURISDICTIONAL HIG H COURT HAS IN BRAHMA ASSOCIATES (SUPRA) CLARIFIED THAT A HOUSING PROJECT BEING NO T DEFINED UNDER THE ACT, IT IS THAT AS APPROVED BY THE LOCAL AUTHORITY THAT WOULD OBTAIN. FURTHER, IT IS THE HOUSING PROJECT AS APPROVED WHICH IS EITHER ELIGIBLE U/S.80-IB(10) OR NOT SO AND, AS SUCH, DEDUCTION THERE- UNDER, WHERE SO, WOULD BE AVAILABLE FOR THE ENTIRE PROJECT AND NOT TO A PART THEREOF. BE THAT AS IT MAY, OUR CONCERN, IN VIEW OF THE FINDING OF THE LD. CIT(A), WHICH IS NOT ON MERITS, IN THE MATTER WOULD BE AS TO WHETHER THE SA ID ISSUE ARISES IN THE FACTS OF THE PRESENT CASE; THE LD. CIT(A) FINDING IT AS NOT SO; IN FACT, DISMISSING THE ASSESSEES GROUND FOR STATISTICAL PURPOSES. TOWARD THIS, WE OBSERVE T HAT THE ISSUE OF THE AREA OF A RESIDENTIAL HOUSE/S EXCEEDING 1000 SQ. FT. ARISES IN RESPECT OF THE ROW HOUSES, WHICH THE REVENUE CLAIMS TO BE IN FACT A DUPLEX HOUSE, FOR PHASE VII OF THE HOUSING PROJECT. A PERUSAL OF THE DETAILS OF THE DEDUCTION U/S.80-IB(10) FOR THE CURR ENT YEAR REVEALS A CLAIM IN THE NEGATIVE SUM OF RS.15,565/- FOR THE SAID PHASE, SO THAT NO P OSITIVE DEDUCTION STANDS CLAIMED FOR THE CURRENT YEAR. WE, ACCORDINGLY, CONFIRM THE SAID ISSUE, RAISED BY THE REVENUE PER ITS GROUND NO. 3, AS NOT ARISING IN THE FACTS OF THE PR ESENT CASE. WE REFRAIN TO, IN VIEW OF THE FOREGOING, DWELL ON THE MERITS OF THE CASE, WHICH A S AFORE-NOTED WAS NOT ARGUED. THE SAID GROUND, THEREFORE, STANDS ACCORDINGLY DISMISSED AS UNFRUCTOUS. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . 0/ 1 * ' 0 ' 23 ORDER PRONOUNCED IN THE OPEN COURT ON MAY 19, 2014 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 4+ MUMBAI; 5) DATED : 23.05.2014 *.)../ ROSHANI , SR. PS 5 ITA NO.5634/MUM/2012 (A.Y. 2009-10) ASST. CIT VS. SONAM BUILDERS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. 8*9 : %);< , , ; ? + / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , 4+ / ITAT, MUMBAI