ASST CIT CIR 4, THANE V. AMEYA BUILDERS, MUMBAI

ITA 5801/MUM/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0630 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Assessee Lawyers: SUBODH RATNAPARKHI
• Section: 80IB

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI A BENCH , , BEFORE S/SH. I P BANSAL,JUDICIAL MEMBER & RAJENDRA,ACCOUNTAN T MEMBER /. ITA NO. 5801 /MUM/201 2 , / ASSESSMENT YEAR - 200 9 - 10 ACIT CENTRAL CIRCLE 4 2NS FLOOR, QURESHI MANSION GOKHALE ROAD, NAUPADA THANE (W) 400 602. VS M/S. AMEYA BUILDERS AND DEVELOPERS , & 2, A WING, GARDEN VIEW APTS ., VIRAT NAGAR, VIRAR (W). PAN: AAFFA 9223 L ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE BY : SHRI SUBODH RATNAPARKHI / REVENUE BY :SHRI ASGHAR ZAIN / DATE OF HEARING : 27 05 2015 / DATE OF PRONOUNCEMENT : 27 05 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 30/5/2012 OF THE CIT(A) II,THANE,THE ASSESSING OFFICER(AO) HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) - II, THANE, HAS ERRED IN HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80IB(10) WITHOUT APPRECIATING THE FACT THAT THE ASSESEE FAILED TO OBTAIN COMPLET ION CERTIFICATE IN RESPECT OF ALL THE BUILDINGS OF THE HOUSING PROJECT APPROVAL TO WHICH WAS GIVEN VIDE COMMENCEMENT CERTIFICATE ISSUED ON 27.07.2005. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) - II, THANE, HAS ERRED IN HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80IB(10) RELYING ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS M/S. VANDANA PROPERTIES IN ITA NO. 3633 OF 2009 WITH ITA NO. 4361 OF 2010 DATED 28.03.2012 WHICH HAS BEEN CONTESTED IN FURTHER APPEAL BEFORE SUPREME COURT BY THE DEPARTMENT AND IS PENDING FOR DISPOSAL. 3. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) - II, THANE, HAS ERRED IN HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80 IB(10) RELYING ON THE DECISION OF HON'BLE ITAT, MUMBAI'S ORDER IN THE CASE OF SAROJ SALES ORGANISATION VS ITO IN 115 TTJ 485 (MUM), BASED ON THE HON'BLE BOMBAY HIGH COURT DECISION IN THE CASE OF CIT VS. BRAHMA ASSOCIATES (2011) 333 ITR 289 (BOM) AGAI NST WHICH SLP IS PENDING BEFORE HON'BLE SUPREME COURT. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE LEARNED CIT (A) - II, THANE, BE CANCELLED AND THAT OF THE A.O. BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OR ALL THE ABOVE GROUNDS OF APPEAL. ASSESSEE FIRM,ENGAGED IN THE BUSINESS AS BUILDERS AND REAL ESTATE DEVELOPERS AND FILED ITS RETURN OF INCOME ON 24/09/2009 DECLARING TOTAL INCOME AT RS.11,78,600/ AFTER CLAIMING DEDUCTION U/S. 801B(10) AMOUNTING TO RS.1,52, 63,967/ IN RESPECT OF ITS HOUSING PROJECT.THE ASSESSING ITA/ 5801 /MUM/201 2 ,AY. 0 9 1 0 ABAD 2 OFFICER(AO)COMPLETED THE ASSESSMENT ON 19.12.2011 U/S.143(3)OF THE ACT DETERMINING THE INCOME OF THE ASSESSEE AT RS. 1,64,42,567/ . 2. EFFECTIVE GROUNDS OF APPEAL IS ABOUT DEDUCTION CLAIMED BY THE A SSESSEE U/S. 801B(10) OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD DEVELOPED A HOUSING PROJECT(HP)AT VILLAGE BOLINJ,TALUKA VASAI, DIST. THANE,THAT THE PROJECT COMMENCED VIDE COMMENCEMENT CERTIFICATE,DATED 27/07/2005 COM PRISING OF 18 BUILDINGS AND FOUR ROW HOUSES, THAT OUT OF THE ABOVE SANCTIONED BUILDING PLAN, THE ASSESSEE CONSTRUCTED SIX BUILDINGS BEARING NO. 4, 6, 7, 8, 9 AND 10 APPROVED ON A LARGE PLOT OF LAND.ACCORDING TO THE AO, THE ASSESSEE HAD FAILED TO PRODUCE TH E PART OCCUPANCY CERTIFICATE (OC)/ COMPLETION CERTIFICATE (CC) IN RESPECT OF EACH BUILDING AND FULL OC / CC IN RESPECT OF THE ENTIRE PROJECT.HE WAS OF THE OPINION THAT ASSESSEE HAD VIOLATED THE ESSENTIAL CONDITION AS LAID DOWN IN THE SECTION 801B(10)(A)(II) R.W . EXPLANATION (II) OF THE ACT AND HP CONSTRUCTED BY IT WAS NOT ELIGIBLE FOR DEDUCTION U/S.801B(10). IN VIEW OF THE ABOVE, THE AO ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE DEDUCTION U/S. 80 I B (10)OF THE ACT SHOULD NOT BE DISALLOWED AS IT HAD SUBMITTE D PART CC IN RESPECT OF SIX BUILDINGS ONLY AND HAD FAILED TO SUBMIT THE SAME IN RESPECT OF OTHER BUILDINGS OF THE HP.IN RESPONSE TO THE ABOVE SHOW CAUSE NOTICE, THE ASSESSEE,VIDE LETTER DATED 15/12/2011,STATED THAT THE HP CONSISTED OF 6 BUILDINGS OUT OF TH E TOTAL 18 BUILDINGS OF THE PROJECT AND DURING THE PERIOD UNDER CONSIDERATION OUT OF THE SIX BUILDINGS COMPLETED IT HAD CLAIMED THE DEDUCTION U/S. 80 I B(10) IN RESPECT OF TWO BUILDINGS ONLY,THAT THE LOCAL AUTHORITY CIDCO SANCTIONED A LAYOUT PLAN ON SINGLE P LOT AND THAT SHOULD NOT BE CONFUSED WITH ONE PROJECT,THAT OC WERE GRANTED BUILDINGWISE AND IF ALL THE BUILDINGS FORMING PART OF THE LAYOUT WERE NOT COMPLETED THEN PART OC WERE GRANTED,THAT TERM 'PROJECT' HAD NEITHER BEEN DEFINED UNDER THE ACT NOR UNDER THE DEVELOPMENT CONTROL REGULATIONS OF THE VASAI VIRAR MUNICIPAL CORPORATION,THAT WORD PROJECT AS CONTAINED IN SECTION 80 I B(10) WAS NOT SYNONYMOUS WITH THE TERM PLOT OF LAND,THAT NONCOMPLETION OF THE OTHER BUILDINGS SHOULD NOT ADVERSELY AFFECT THE CLAIM OF THE ASSESSEE,THAT HP HAD BEEN DEVELOPED AND CONSTRUCTED ON A PHYSICALLY DISTINCT PORTION OF LAND, HAVING BUILDINGS NUMBER 4,6, 7, 8, 9 & 10 ONLY,THAT CERTIFICATES IN RESPECT OF THOSE BUILDINGS HAD BEEN RECEIVED FROM THE LOCAL AUTHORITY, THAT THE CIDCO SAN CTIONED A SINGLE LAYOUT PLAN WITH DIFFERENT DEVELOPERS INDEPENDENTLY DEVELOP ING PROJECTS ON THE BASIS OF IDENTIFIED DEVELOPMENT RIGHTS,THAT ALL THE BUILDINGS OF THE HAD GOT THE OC FROM THE LOCAL AUTHORITY WITHIN THE PRESCRIBED TIME UNDER THE SECTION,TH E BUILDING PLAN OF THE PROJECT OF THE ASSESSEE WAS FIRST APPROVED ON 27/07/ 2005 AND AS PER THE PROVISIONS OF THE SECTION 80 I B(10)(A)(III) THE CONSTRUCTION WAS REQUIRED TO BE COMPLETED WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE PROJE CT WAS FIRST APPROVED,THAT IT WAS ENTITLED FOR COMPLETION OF THE PROJECT BY 31/03/2011,THAT IT HAD COMPLETED THE PROJECTS WELL BEFORE THE PRESCRIBED TIME.THE ASSESSEE REFERRED TO THE CBDT NOTIFICATION NO.205/3/2001/ ITA II DATED 04/ 05/2001. BUT,THE AO DID NOT ACCEPT THE ABOVE ARGUMENTS ADVANCED BY THE ASSESSEE.HE HELD THAT ONE COMMENCEMENT CERTIFICATE,DATED: 27/07/2005,WAS ISSUED IN RESPECT OF 18 BUILDINGS AND 4 ROW HOUSES AND THE CC SUBMITTED BY THE ASSESSEE ARE IN RESPECT OF BUILDINGS NO. 4, 6, 7, 8, 9 , AND 10 ONLY AND ARE PART OC AND NOT THE FULL OC ,THAT THE DEDUCTION WAS ALLOWED IN RESPECT OF A PROJECT AND IN RESPECT OF A LAND OWNER OR DEVELOPER,THAT EVEN IF AN ENTIRE PROJECT WAS DIVIDED INTO 100 SECTIONS AND FOR EACH SECTION A DIFFERENT CC WAS OBTAI NED THEN TO CLAIM THE DEDUCTION U/S. 80 I B(10), THE ENTIRE PROJECT HAD TO BE COMPLETED IN ACCORDANCE TO THE CONDITIONS PRESCRIBED BY THE SAID SECTION. HE REFERRED TO THE DEVELOPMENT CONTROL REGULATIONS, 2001, VASAI. HE FURTHER HELD THAT THE PROVISIONS OF SE CTION ITA/ 5801 /MUM/201 2 ,AY. 0 9 1 0 ABAD 3 80IB(10)MENTIONED ABOUT THE CC I.E FULL OC IN TERMS OF DCR 2001 AND HELD THAT THE ASSESSEE HAD FAILED TO OBTAIN THE CC AS REQUIRED BY SECTION 80IB(10)(A)(II) R.W.EXPLANATION (II),THAT IT WAS NOT ENTITLED TO CLAIM THE BENEFIT AS ENVISAGED BY THE SECTI ON. FINALLY,HE DISALLOWED THE CLAIM OF THE ASSESSEE,AMOUNTING TO RS. 1.52 CRORES AND ADDED BACK IT TO ITS TOTAL INCOME . 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA). BEFORE HIM,IT WAS ARGUED THAT DIFFERENT BUILDERS CONSTRUCTING DIFFERENT HOUSING PROJECTS ON THE IDENTIFIED AREA OF THE PLOT WOULD BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) PROVIDED ALL THOSE PROJECTS FULFILLED THE CONDITIONS AS LAID DOWN IN THE ABOVE SECTION ON STANDALONE BASIS,THAT THE AO HAD DISALLOWED THE DEDUCTION U/S.80IB(10) ON THE MISIMPRESSION THAT THE ENTIRE HOUSING PROJECT WAS TO BE CONSIDERED AS SINGLE PROJECT AND THE CC IN RESPECT OF THE ENTIRE PROJECT HAD TO BE OBTAINED FOR CLAIMING THE BENEFIT OF DEDUCTION,T HAT THE BUILDINGS WHICH HAD ALREADY BEEN COMPLETED FULLY WERE HP ON STANDALONE BASIS AND FULFILLED THE REQUIRED CONDITIONS AS PER SECTION 80IB(10),THAT THE LOCAL AUTHORITY HAD GRANTED THEM THE PART OC. AFTER CONSIDERING THE ASSESSMENT ORDER AND SUBMISSIONS OF THE ASSESSEE THE FAA HELD THAT THE HP OF THE ASSESSEE COMPRISING OF 6 BUILDINGS WAS A PART OF THE LARGER HP,THAT PART OF WHICH HAD BEEN CONSTRUCTED BY THE IT ON DISTINCTLY IDENTIFIED PIECE OF LAND,THAT THE CONSTRUCTION WORK OF THE OTHER BUILDINGS ON THE SAME PLOT OF LAND WAS WITH THE OTHER BUILDERS THAT WAS UNDER CONSTRUCTION AND THE CC IN RESPECT OF SUCH BUILDINGS HAD NOT BEEN GRANTED BY THE LOCAL AUTHORITY,THAT THE 6 BUILDINGS UNDERTAKEN FOR CONSTRUCTION BY THE ASSESSEE WERE COMPLETE IN ALL RESPECTS AND OCS HAD BEEN GRANTED TO THOSE BUILDINGS BY THE LOCAL AUTHORITY,THAT THE LOCAL AUTHORITY HAD ALSO INFORMED VIDE ITS LETTER, DATED 24/10/2011 THAT THE ASSESSEE BUILDINGS BY THE ASSESSEE WERE COMPLETED WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE PROJECT OF THE ASSESSEE WAS FIRST APPROVED,THAT IT HAS BEEN FURTHER CLARIFIED THAT THE BUILDINGS NO. 4, 6, 7, 8, 9, AND 10 HAD BEEN FULLY COMPLETED ON THE DATES MENTIONED IN THE LETTER I.E.BEFORE THE 31/03/2011.HE FURTHER MENTIONED THAT THE A O HAD NOT RAISED ANY DOUBT REGARDING THE OTHER CONDITIONS NOT BEING FULFILLED BY THE ASSESSEE EXCEPT THAT THE HP DEVELOPED BY IT WAS NOT COMPLETE AS THE CC IN RESPECT OF THE ENTIRE HO ON THE APPROVED LAND HAD NOT BEEN SUBMITTED BY IT.THE FAA HELD THAT SUC H A VIEW OF THE AO WAS THE NARROW VIEW OF THE PROVISIONS OF SECTION 801B(10),THAT THE ASSESSEE HAD COMPLETED ITS PART OF THE HP FULFILLING ALL THE CONDITIONS AND THE PROJECT COMPRISING OF SIX BUILDINGS WAS FULLY COMPLETE AS PER THE APPROVED PLAN AS INFORME D BY THE LOCAL AUTHORITY IN THE ABOVE MENTIONED LETTER,DATED 24.10.2011,THAT THE ASSESSEE HAD ALSO OBTAINED OC IN RESPECT OF THESE BUILDINGS BEFORE 31/03/2011 WHICH IS A SPECIFIED DATE FOR COMPLETION OF THE PROJECT IN THE INSTANT CASE,THAT IT COULD NOT BE DENIED THE DEDUCTION U/S.80IB (10)ONLY ON THE GROUND THAT THE OTHER BUILDINGS ON THE SAME PLOT OF LAND WHICH WERE BEING CONSTRUCTED BY OTHER BUILDERS WERE NOT COMPLETE ON THE SPECIFIED DATE,THAT THE ASSESSEE COULD NOT BE PENALIZED IN THE SHAPE OF THE DENIAL OF THE DEDUCTION FOR A FAULT WHICH IT HAD NOT COMMITTED,THAT IF AT ALL THE DEDUCTION HAD TO BE DENIED IT COULD BE TO THOSE BUILDERS WHO HAD NOT COMPLETED THEIR PROJECTS ON THE SPECIFIED DATES WHICH WERE BUILT ON DISTINCTLY IDENTIFIABLE LAND AREA, THOUGH IN THE SAME LAYOUT PLAN.THE FAA REFERRED TO THE JUDICIAL PRONOUNCEMENTS WHEREIN IT HAS BEEN HELD THAT THE BUILDERS CANNOT BE DENIED THE DEDUCTION U/S. 80IB (10) IN RESPECT OF ANY PROJECT, IF SUCH PROJECT FULFILS THE CONDITIONS LAID DOWN IN THE ABOVE S ECTION ON STANDALONE BASIS.HE RELIED UPON THE CASE S OF SAROJ SALES ORGANISATION(115 TTJ485) AND M/S.VANDANA PROPERTIES(ITA NO. 3336 AND 4361 OF 2010 DATED: 28/03/2012). FINALLY,HE ALLOWED THE APPEAL FILED BY THE ASSESSEE .