DCIT CEN CIR 3(3) CEN RG 3, MUMBAI V. MANJU GUPTA, MUMBAI

ITA 5726/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2896 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 21-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R M MADHAVI
• Keywords: Question of law
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J , MUMBAI BEFORE SHRI C. N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5726 /MUM/201 5 ASSESSMENT YEAR: 20 12 - 13 DCIT, C. C. 3 (3) VS. MS. MANJU GUPTA, AAYAKAR BHAVAN, 4 TH FLOOR, RAJA BAHADUR BUILDING, MUMBAI - 400020 1 ST FLOOR, K - 28, B. S. MARG, FORT, MUMBAI - 400023 PAN NO. AA SPG0264C (APPELLANT) (RESPONDENT) REVENUE BY: MS. R. M. MADHAVI ASSESSEE BY : SHRI. J. P. BAIRAGRA DATE OF HEARING : 2 6 /0 9 /2016 DATE OF PRONOUNCEMENT : 30/ 0 9 /2016 ORDER PER N.K. PRADHAN, A.M . THIS IS AN APPEAL FILED BY THE REVENUE . THE RELEVANT ASSESSMENT YEAR IS 2012 - 13. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER (APPEALS) - 51 MUMBAI AND ARISES OUT OF THE ASSESSMENT MADE U/S 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2. THE FIRST GROUND RAISED BY THE REVENUE IN THIS APPEAL IS THAT THE LD. CIT(A) ERRED IN DELETING THE DISALL OWANCE OF DEDUCTION U/S 80IB(10) IN RESPECT OF PROFIT DERIVED FROM N . G . ESTATE OF RS.1,27,28,360/ - RELYING ON THE DECISION OF THE ITAT IN EARLIER YEARS, WHICH HAVE NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE MATTER IS PENDING BEFORE THE HONBLE BOMBAY HIGH COURT. 2.1 THE ASSESSEE HA D CLAIMED DEDUCTION U/S 80IB OF RS.1,27,28,360/ - IN RESPECT OF PROFIT DERIVED FROM N G ESTATE . THOUGH THE ITAT, MUMBAI ON A SIMILAR ISSUE IN THE CASE OF N G ESTATE ON SIMILAR FACTS HAVE PASSED ORDER IN FAVOUR OF THE ASSESSEE FO R THE A.Y. 2003 - 04 TO 2008 - 09, THE ASSESSING OFFICER ( AO ) TOOK INTO ACCOUNT THE FACT THAT THE DEPARTMENT HAS FILED APPEAL BEFORE THE HONBLE BOMBAY HIGH COURT AGAINST THE ABOVE ORDERS AND THEREFORE, HE DISALLOWED THE SUM OF RS.1,27,28,360/ - BEING CLAIM MAD E U/S 80IB(10) OF THE ACT. ITA NO. 5726/MUM/2015 2 2.2 THE LD. CIT(A) FOUND THAT THE APPEAL FILED BY THE DEPARTMENT BEFORE THE HONBLE BOMBAY HIGH COURT FOR THE A.Y. 2003 - 04, THE YEAR IN WHICH THE SAID PROJECT IS COMPLETED, HAS ALREADY BEEN DECIDED BY THE ORDER DATED 24/12/2004 IN ITA NO.172 OF 2013. HE FOLLOWED THE ABOVE JUDGMENT AND HELD THAT THE ASSESSEE I S ENTITLED TO DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF N G ESTATE. 2.3 THE LD. DR SUBMITTED THAT THE APPEAL FILED BY THE REVENUE FOR A.YS. 2004 - 05 TO 2008 - 09 ARE PEN DING BEFORE THE HON BLE BOMBAY HIGH COURT. 2.4 THE LD. COUNSEL OF THE ASSESSEE RELIED ON (I) THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2003 - 04 DATED 24/12/2014 IN ITA NO.172 OF 2013 AND (II) THE ITAT ORDER DATED 26/03/2015 IN THE CASE OF THE ASSESSEE FOR A.Y. 2010 - 11 (ITA NO. 4432/MUM/2013) . 2.5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. W E FIND THAT THE SAME ISSUE AROSE FOR CONSIDERATION IN A.Y. 2003 - 04. THE HON BLE BOMBAY HIGH COURT BY THEIR ORDER DATED 24/12/2014 HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE WHICH READS AS UNDER: 6 ) ON THE OTHER HAND, MR. MISTRY, LEARNED SENIOR COUNSEL, SUBMITS THAT THERE IS A PURE FINDING OF FACT AND WHICH WOULD DEMONSTRATE THAT THOUGH A COMMENCEMENT CERTIFICATE WAS ISSUED ON 2 ND MARCH, 2001, YET, WHAT THE ASSESSING OFFICER PROCEEDED WAS ON A FOUNDATION THAT THIS IS ISSUED MUCH AFTER THE DEADLINE OF 1 ST OCTOBER, 1998 AS PER SECTION 80IB(10) OF THE ACT. THE COMMENCEMENT CERTI FICATE ISSUED ON 15 TH MAY, 1991 COULD NOT BE SAID TO BE VALID AND EITHER STOOD LAPSED OR INVALIDATED BY EFFLUX OF TIME. THERE WAS A COMMENCEMENT CERTIFICATE ISSUED ON 12 TH FEBRUARY, 1993 BUT THAT WAS ALSO VALID FOR ONE YEAR. THE CONSTRUCTION COULD NOT START WITHIN THE TERM STIPULATED IN THESE CERTIFICATES AND BY LAW. THEREAFTER, THERE WAS A COMMENCEMENT CERTIFICATE ISSUED ON 2 ND MARCH, 2001. THIS REFERS TO THE EARLIER COMMENCEMENT CERTIFICATE OF 12 TH FEBRUARY, 1993 AND ITS CANCELLATION. CLAUSE 22 OF THA T CERTIFICATE DATED 2 ND MARCH, 2001 WAS RELIED UPON TO SUPPORT THIS ARGUMENT. FURTHER, THERE WAS A CLEARANCE AND WHICH WAS AWAITED IN TERMS OF SECTION 20 OF THE URBAN LAND (CEILING AND REGULATION) ACT, 1976. IF THE LAND IS IN EXCESS OF THE CEILING LIMIT TH EN THERE HAS TO BE AN EXEMPTION IN TERMS OF SECTION 20(1) CLAUSE (A) OR (B) AND ONLY UPON SUCH EXEMPTION BEING GRANTED CAN THE MUNICIPAL AUTHORITY PROCEED TO GRANT A COMMENCEMENT CERTIFICATE. THIS DATE IS REFERRED IN PARA 13.2 OF THE ORDER OF THE TRIBUNAL WITH THE ATTENDANT FACTS. 7) THE TRIBUNAL ALSO NOTED THE FURTHER FACTUAL POSITION AS BROUGHT ON RECORD BY THE ASSESSEE. 8) AFTER HEARING BOTH SIDES AT LENGTH, WE ARE OF THE OPINION THAT THERE IS MUCH SUBSTANCE IN THE CONTENTION OF MR. MISTRY. THIS WAS A P URE FACTUAL FINDING RENDERED BY THE TRIBUNAL AND RELYING ON ADMITTED MATERIAL. THE ADMITTED MATERIAL WAS THAT THE EARLIER COMMENCEMENT CERTIFICATES COULD NOT BE HELD TO BE VALID AFTER ONE YEARS FROM THE DATE OF ISSUANCE. IF THEY LAPSED OR WERE TREATED AS C ANCELLED, THEN, THE TRIBUNAL WAS RIGHT IN ITS CONCLUSION THAT BENEFIT OF SECTION ITA NO. 5726/MUM/2015 3 80IB(10) CAN BE DERIVED OR TAKEN BY THE ASSESSEE. ALL THE THREE CONDITIONS FOR AVAILING OF THE DEDUCTION OR BENEFIT ARE, THUS, COMPILED WITH. 9) TO OUR MIND, THE FACTUAL FIND ING RENDERED BY THE TRIBUNAL IN PARA 14 OF THE ORDER UNDER CHALLENGE RELYING ON THE DATES AND EVENTS AS BROUGHT ON RECORD CANNOT BE TERMED AS PERVERSE. IT IS NOT VITIATED BY ANY ERROR OF LAW APPARENT ON THE FACE OF THE RECORD EITHER. THE APPEAL DOES NOT RA ISE ANY SUBSTANTIAL QUESTION OF LAW AND IT IS, ACCORDINGLY, DISMISSED, NO COSTS. 2.6 ALSO THE SAME ISSUE AROSE FOR CONSIDERATION BEFORE THE ITAT I BENCH , MUMBAI IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2010 - 11(ITA NO.4432/MUM/2013). THE T RIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2003 - 04 AND THAT OF THE COORDINATE BENCH FOR THE A.Y. 2010 - 11, WE UPHOLD THE ORDER OF TH E LD. CIT(A) ALLOWING THE CLAIM OF DEDUCTION OF RS.1,27,28,360/ - U/S 80IB (10) OF THE ACT. 3. THE SECOND GROUND RAISED BY THE REVENUE IN THIS APPEAL IS THAT THE LD. CIT(A) HAS ERRED IN HOLDING THE LEASE RENT RECEIVED FROM AMENITIES AS INCOME UNDER THE HEA D HOUSE PROPERTY AND NOT AS INCOME FROM OTHER SOURCES FOLLOWING THE DECISION OF THE ITAT IN EARLIER YEAR WHERE IN DEPARTMENT HAS NOT ACCEPTED THE ORDER AND MATTER IS PENDING IN FURTHER APPEAL. 3.1 THE AO HAS TREATED LEASE RENT RECEIPT FOR AMENITIES OF RS.3 ,97,110/ - UNDER THE HEAD INCOME FROM OTHER SOURCES AND THEREBY DENIED DEDUCTION OF 30% AS PER PROVISIONS OF SECTION 24 OF THE ACT. 3.2 THE LD. CIT(A) FOLLOWED THE ORDER OF THE ITAT I BENCH MUMBAI IN THE CASE OF THE ASSESSEE FOR A.Y. 2010 - 11 (ITA NO. 4432/MUM/2013) AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. 3.3 THE LD. DR SUBMIT S THAT THE DEPARTMENT HAS NOT ACCEPTED THE ORDER OF THE ITAT IN EARLIER YEAR AND MATTER IS PENDING IN FURTHER APPEAL. 3.4 THE LD. COUNSEL OF THE ASSESSEE RELIE S ON THE ORDER OF THE ITAT I BENCH IN THE CASE OF THE ASSESSEE FOR THE A.Y. 2010 - 11 (ITA NO.4432/MUM/2013). 3.5 AFTER CONSIDERING THE RIVAL SUBMISSION AND PERUSING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE ABOVE ISSUE IS COVERED BY THE ORDER OF THE I TAT I BENCH MUMBAI IN THE CASE OF THE ASSESSEE FOR A.Y. 2010 - 11 (ITA NO.4432/MUM/2013 ). THE TRIBUNAL HAS HELD AS UNDER: ADMITTEDLY, THE BUILDING IS LET OUT ALONGWITH AMENITIES, THEREFORE, IT IS ASSESSABLE UNDER THE HEAD HOUSE PROPERTY, CONSEQUENTLY, TH E STAND OF THE LD. COMMISSIONER OF INCOME TAX ( APPEALS ) IS AFFIRMED BECAUSE WITHOUT AMENITIES ITA NO. 5726/MUM/2015 4 THE BARE BUILDING IS OF NO USE AND AMENITIES ARE THE BASIC FEATURES OF A PROPERTY. EVEN OTHERWISE, OUR VIEW IS FIND SUPPORTS FROM THE DECISION FROM HYDERABAD BENC H OF THE TRIBUNAL IN DCIT VS. G. RAGHURAM (2010) 39 SOT 406; 2010, 46 DTR 136. FINALLY, THE APPEAL OF THE REVENUE IS HAVING NO MERIT, CONSEQUENTLY, DISMISSED. 3.6 WE FOLLOW THE ORDER OF THE COORDINATE BENCH ON THE ABOVE ISSUE AND UPHOLD THE ORDER PASSED BY THE LD. CIT(A). 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 /0 9 /2016 SD/ - SD/ - ( C. N. PRASAD ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 30 /0 9 /2016 A KV (ON TOUR) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI