ITO 19(1)(4), MUMBAI V. SAGAR SHOPPING DEVELOPERS, MUMBAI

ITA 5731/MUM/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4275 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 22-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 10-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S N RAJU
• Assessee Lawyers: AJAY R SINGH
• Section: 133A; 147; 148

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI- E,BENCH , ,, , , ,, , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SANJAY GARG,JUDICIAL MEMBER /.ITA NO. 5731/MUM/2011, /ASSESSMENT YEAR-2008-09 ITO-19(1)(4) ROOM NO. 308, 3 RD FLOOR PIRAMAL CHAMBERS PAREL, LALBAUG MUMBAI-400 012. VS. M/S. SAGAR SHOPPING DEVELOPERS , SAGAR REGENCY OFF JAWAHARLAL HEBRU ROAD VAKOLA BRIDGENEAR DHOBI GHAT VAKOLA,SANTACRUZ (EAST) MUMBAI-40 0055. PAN:AADFS 1422 M ( / ASSESSEE ) ( / RESPONDENT) /ASSESSEE BY :SHRI AJAY R. SINGH (AR) / REVENUE BY :SH.B.S.N. RAJU (DR) / DATE OF HEARING :12 - 11 -2015 / DATE OF PRONOUNCEMENT :01.01.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 23.6.2011 OF CIT-30, MU MBAI, THE ASSESSING OFFICER (AO) HAS FILED THE PRESENT APPEAL. BRIEF FACTS: ASSESSEE-FIRM, ENGAGED IN BUSINESS OF BUILDING AND CONSTRUCTION, FILED ITS RETURN OF INCOME ON 30.9.2008 DECLARING TOTAL INCOME OF RS. 1,33 LAKHS. IT CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT,AMOUNTING TO RS. 4.86 CRORES.ON 04.02.2010, A S URVEY ACTION U/S. 133A WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE. DURING THE S URVEY PROCEEDINGS IT WAS FOUND THAT THE ASSESSEE HAS COMPLETED THE PROJECT NAMED SAGAR AVE NUE PHASE-I, THAT THE TOTAL BUILT UP AREA OF THE SHOP CONSTRUCTED AND SOLD EXCEEDED 2000 SQUA RE FEET.THE AO ISSUED A NOTICE U/S. 148 OF THE ACT ON 11.2.2010,AS HE WAS OF THE OPINION TH AT TAXABLE INCOME HAD ESCAPED ASSESSMENT. THE ASSESSEE FILED RETURN ON 3.4.2010 DECLARING TOT AL INCOME OF RS. 1.33 LAKHS AND OBJECTED TO THE PROCEEDINGS INITIATED U/S. 147 OF THE ACT. AFTE R ADDRESSING THE OBJECTIONS THE AO HELD THAT ASSESSEE WAS NOT ELIGIBLE TO CLAIM DEDUCTION U/S. 8 0IB(10) OF THE ACT, THAT HE HAD VIOLATED THE PROVISION, THAT THE BUILT UP AREA OF THE COMMERCIAL PREMISES EXCEEDED 2000 SQUARE FEET/5% OF THE TOTAL AREA OF THE CONSTRUCTED AND SOLD, THAT TH E TOTAL BUILT UP ARE OF COMMERCIAL PREMISES CONSTRUCTED AND SOLD WAS 5118 SQUARE FEET AND 4707 SQUARE FEET RESPECTIVELY. AS A RESULT CLAIM MADE BY THE ASSESSEE U/S. 80IB(10) OF RS. 4,8 6,32,418/- WAS WITHDRAWN. 2. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).AFTER CONSIDERING SUBMISSI ON OF THE ASSESSEE AND THE ASSESSMENT ORDER,HE HELD THAT THE AO HAD NOT DISPUTED THE FACT THAT THE PROJECT OF THE ASSESSEE WAS APPROVED AS A HOUSING PROJECT,THAT THE CBDT IN ITS CLARIFICATION HAD STATED THAT ONCE THE PROJECT WAS APPROVED BY THE LOCAL AUTHORITY AS HOUS ING PROJECT THE SAME WOULD BE ENTITLED TO DEDUCTION U/S. 80IB(10) OF THE ACT, THAT THE AMENDM ENT MADE BY THE FINANCE ACT 2004 WAS EFFECTIVE FROM 1.4.2005,THAT THE AMENDMENT WAS PROS PECTIVE AND NOT RETROSPECTIVE, THAT UNDER THE PRE-AMENDED LAW IF THE SHOP AND COMMERCIAL ESTA BLISHMENT WAS LESS THAN 10% OF THE TOTAL BUILT UP AREA THE DEDUCTION U/S. 80IB(10) OF THE AC T WAS ALLOWABLE. THAT THE COMMENCEMENT CERTIFICATE ARE ISSUED BY THE LOCAL AUTHORITIES ON 31.7.2002, THAT THE ASSESSEE HAS COMMENCED M/S. SAGAR SHOPPING DEVELOPERS-5731/11 2 THE PROJECT IN AUGUST 2003, THAT THE PROVISION OF C LAUSE (D) TO SECTION 80IB(10) OF THE ACT HAD NO APPLICATION. THE FAA REFERRED TO THE ORDERS OF S AROJ SALES ORGANISATION (3 DTR 494), PATHARE AND ASSOCIATES (ITA/993/MUM/2009, BRAHMA AS SOCIATES, 30 SOT 155 HELD THAT THE ASSESSEE WAS ENTITLED TO CLAIM THE DEDUCTION U/S. 8 0IB(10) OF THE ACT. 3. DURING THE COURSE OF HEARING BEFORE US, THE DEPARTM ENTAL REPRESENTATIVE (DR) RELIED UPON THE ORDER OF THE AO. THE AUTHORISED REPRESENTATIVE (AR) RELIED UPON THE CASES OF VEENA DEVELOPERS (377 ITR 297), BRAHMA ASSOCIATES (333 IT R 289), HAPPY HOME ENTERPRISES (372 ITR 1) AND SARKAR BUILDERS (370 ITR 392. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE PROJECT WAS APPROVED AS HOUSING PROJECT BY THE LOCA L AUTHORITIES, THAT THE CLAUSE (D) WAS INSERTED WITH EFFECT FROM 1.4.2005, THAT THE COURTS HAVE HELD THAT IT WAS NOT RETROSPECTIVE IN NATURE, THAT THE LIMIT ON EXTENT OF COMMERCIAL AREA OF HOUSING PROJECT DID NOT APPLY TO THE PROJECTS APPROVED BEFORE 1.4.2005, THAT THE PROJECT WAS APPROVED IN 2002.RESPECTFULLY FOLLOWING THE JUDGMENTS RELIED UPON BY THE AR WE AR E DECIDING THE EFFECTIVE GROUND AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE AO STANDS DISMISSE D. . ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST JANUARY, 2016. 01 , 2016 SD/- SD/- ( /SANJAY GARG) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE: 01.01.2016 . . . .. . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / !' , , . . . 6. GUARD FILE/ & ! ! //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.