ITO, Wd.-3(3), Latur V. M/s. Sai Developers, Latur

ITA 593/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56538 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 19-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 593/PN/2010 (ASSTT. YEAR: 2006-07) INCOME TAX OFFICER, . .. APPELLANT WARD -3(3), LATUR V. M/S SAI DEVELOPERS RESPONDENT KARWA COMPLEX, M.G. ROAD, LATUR PAN: AAUFS6302B APPELLANT BY : MS. NEERA MALHOTRA RESPONDENT BY : SHRI KISHORE PHADKE DATE OF HEARING : 05.10.11 DATE OF PRONOUNCEMENT: .10.11 ORDER PER I.C. SUDHIR, JM THE REVENUE HAS QUESTIONED THE FIRST APPELLATE ORD ER MERELY ON THE GROUND THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT NON- CONSTRUCTION OF BUNGALOW ON PLOT NO. 47 AS PER SANCTIONED PLAN DOES NOT LEAD TO ANY VIOLATION OF CONDITIONS PRESCRIBED IGNORING THE INTENTION OF SECTION 80IB(10). 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BEL OW. IT APPEARS FROM THE ORDERS OF THE AUTHORITIES BELOW THAT ASSESSEE, A REGISTER ED FIRM ENGAGED MAINLY IN THE BUSINESS OF BUILDING AND DEVELOPING HOUSING PROJEC T HAD CLAIMED DEDUCTION U/S. 80 IB OF THE ACT. THE SAME WAS DENIED BY THE A.O ON T HE BASIS THAT PLOT NO. 47 IN HOUSING PROJECT DEVELOPED BY THE ASSESSEE AT KHADGA ON, LATUR, ON WHICH A BUNGALOW WAS PROPOSED TO BE CONSTRUCTED AS PER THE DEVELOPMENT PLAN, REMAINED VACANT. THE A.O WAS OF THE OPINION THAT SINCE THE PROJECT WAS NOT COMPLETE AND THE SAME IS NOT AS PER THE PLAN APPROVED BY THE MUNICIP AL COUNCIL, LATUR, THE ASSESSEE ITA. NO 593/PN/2010 M/S SAI DEVELOPERS A.Y. 2006-07 PAGE OF 4 2 WAS NOT ENTITLED FOR THE DEDUCTION U/S. 80IB(10) O F THE ACT. THE A.O., ACCORDINGLY, COMPLETED THE ASSESSMENT ON TOTAL INCOME OF RS.33,7 5,201/- AFTER DENYING THE ASSESSEES CLAIM OF DEDUCTION U/S. 80 IB(10) OF THE ACT. BEFORE THE LD CIT(A), THE ASSESSEE CONTENDED THAT MINOR VARIATION OF THE ORIG INAL PLAN ARE DELIBERATED BY THE LOCAL AUTHORITIES AND THE MUNICIPAL AUTHORITIES ARE COMPETENT TO ACCEPT PERMISSIBLE DELIBERATION. IT WAS CONTENDED THAT THE MUNICIPAL AUTHORITIES HAVE PERMITTED THE ASSESSEE TO RETAIN THE PLOT NO. 47 AS VACANT PLOT. IT WAS CONTENDED THAT NON- CONSTRUCTION OF A BUNGALOW ON ONE OF THE 109 PLOTS DEVELOPED BY THE ASSESSEE DOES NOT LEAD TO ANY VIOLATION OF CONDITIONS PRESCRIBED FOR CLAIMING DEDUCTION U/S. 80 IB OF THE I.T. ACT 1961. IT WAS FURTHER CONTENDED THAT O NCE THE MUNICIPAL AUTHORITY PERMITTED SUCH ALTERATION IN ORIGINAL PLAN, ENTIRE PROJECT SHOULD BE CONSIDERED AS AMENDED TO THAT EXTENT. IT WAS ALSO POINTED OUT B Y THE ASSESSEE THAT AS PER THE LATUR CORPORATION RECORDS, BOTH THE PLOTS NOS. 46 AND 47 ARE NOW AMALGAMATED AND EVEN THE TAX BILL OF THE CORPORATION IS COMBI NED FOR BOTH THE PLOTS WHICH CLEARLY INDICATES THAT THE PLOT WAS KEPT VACANT WIT H THE PERMISSION OF MUNICIPAL AUTHORITY. CONSIDERING THESE FACTS, THE LD CIT(A) HAS GIVEN FOLLOWING DECISION : I HAVE CONSIDERED FACTS OF THE CASE, SUBMISSION O F THE AR AND POSITION OF LAW, IN MY OPINION, THE APPELLANT DESERVES TO S UCCEED. TAX INCENTIVE ALLOWED BY THE LEGISLATIVE BY WAY OF DEDUCTION U/S 80IB(10) OF THE I.T. ACT, 1961 IS PREDOMINANTLY FOR THE PURPOSE OF AUGMENTING AFFORDABLE DWELLING UNITS AND IT MUST BE INTERPRETED IN THE LIGHT OF ITS INTENTION. ALL THE PRE-CONDITIONS LAID DOWN F OR ALLOWABILITY OF AFORESAID DEDUCTION WAS STRICTLY ADHERED BY THE APPELLANT IN THIS CASE. IN VIEW OF ABOVE THE AO WAS NOT JUSTIFIED IN REJECTING THE APP ELLANTS CLAIM OF DEDUCTION MERELY ON THE GROUND THAT BY KEEPING THE PLOT NO.47 VACANT, THE APPELLANT DEVIATED FROM THE PLAN APPROVED BY THE MUNICIPAL A UTHORITIES. WHILE DEDUCING SO, THE AO COMPLETELY IGNORED THE FACT THA T THE PLOT WAS KEPT VACANT AFTER TAKING NOC FROM THE LOCAL AUTHORITY AN D EVEN OTHERWISE SUCH MINOR VARIATION FROM APPROVED BUILDING PLAN CANNOT BE TREATED AS VIOLATION OF ANY OTHER CONDITIONS FULFILLING THE REQUIREMENT OF SECTION 80IVB OF THE I.T. ACT, 1961. FOR COMPLETION OF PROJECT, CONSTRUCTION OF I NDIVIDUAL BUILDING IS NOT RELEVANT. VIDE ITS LETTER DATED 05.11.2003, THE MU NICIPAL CORPORATION OF LATUR CATEGORICALLY STATED THAT IT HAS NO OBJECTION IN KE EPING THE PLOT NO. 47 VACANT ITA. NO 593/PN/2010 M/S SAI DEVELOPERS A.Y. 2006-07 PAGE OF 4 3 AND UNCONSTRUCTED. SUBSEQUENT TO THE NOC, MUNICIPA L CORPORATION, LATUR ISSUED OCCUPANCY CERTIFICATES IN RESPECT OF VARIOUS BUNGALOWS CONSTRUCTED BY THE APPELLANT. THE AFORESAID FACT CLEARLY SHOWS THA T THE PROJECT WAS CONSTRUCTED AFTER TAKING DUE APPROVAL FROM THE MUN ICIPAL AUTHORITY AND THE SAME WAS COMPLETED WITHIN THE STIPULATED PERIOD. NO COMPLETION CERTIFICATE IN RESPECT OF PLOT NO. 47 IS PENDING WITH THE MUNIC IPAL CORPORATION AND THE AFORESAID PLOT WAS HANDED OVER TO THE OWNER AND THE APPELLANT HAS NO CONTROL OVER IT. SO FAR THE APPELLANT IS CONCERNED, THE PR OJECT IS COMPLETE, SOLD OUT AND HANDED OVER TO THE OWNERS. THEREFORE, THE AO WAS NOT JUSTIFIED IN DENYING THE BENEFIT OF DEDUCTION U/S 80IB(10) ON TH E GROUND THAT THE PLOT NO. 47 WAS KEPT VACANT. IN VIEW OF THE ABOVE IN MY OPI NION THE DEDUCTION U/S 80IB(10) OF THE I.T. ACT, 1961 IS AVAILABLE TO THE APPELLANT AND THE AO IS, THEREFORE, DIRECTED TO ALLOW THE APPELLANTS CLAIM OF DEDUCTION AMOUNTING TO RS.33,75,201/-. 3. THERE IS NO DISPUTE ON THE MATERIAL FACT THAT PL OT NO. 47 WAS KEPT VACANT AFTER TAKING NOC FROM THE LOCAL AUTHORITY VIDE THE IR LETTER DATED 5.11.2003 AND SUBSEQUENT TO THE NOC, MUNICIPAL CORPORATION, LATU R HAD ISSUED OCCUPANCY CERTIFICATES IN RESPECT OF VARIOUS BUNGALOWS CONSTR UCTED BY THE ASSESSEE. THUS, IN OUR VIEW, THE LD CIT(A) HAS RIGHTLY COME TO THE CON CLUSION THAT THE PROJECT WAS CONSTRUCTED AFTER TAKING DUE APPROVAL FROM THE MUNI CIPAL AUTHORITY AND THE SAME WAS COMPLETED WITHIN THE STIPULATED PERIOD. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FIRST APPELL ATE ORDER ON THE ISSUE THAT THE A.O WAS NOT JUSTIFIED IN DENYING THE BENEFIT OF DEDUCT ION U/S. 80 IB (10) ON THE GROUND THAT PLOT NO. 47 WAS KEPT VACANT. THE FIRST APPELL ATE ORDER IN THIS REGARD IS THUS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 4. IN RESULT, APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21ST OCTOBER, 2011 SD/- SD/- ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 21ST OCTOBER, 2011 ITA. NO 593/PN/2010 M/S SAI DEVELOPERS A.Y. 2006-07 PAGE OF 4 4 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT , AURANGABAD 4. THE CIT(A)- AURANGABAD 4. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE