ITO., WARD-3(2), THANE V. SADHANA BUILDERS PVT.LTD., THANE

ITA 597/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4304 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 9 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: 18-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBEYDR
• Assessee Lawyers: L P SINGH
• Section: 143(3); 80IB

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI E BENCH BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SANDEEP GOSAIN,JUDICIAL MEMBER /.ITA NO.597/MUM/2013 , /ASSESSMENT YEAR-2009-10 INCOME TAX OFFICER, WARD-3(2) ROOM NO.4, B-WING, 6 TH FLOOR ASHAR IT PARK, WAGLE ESTATE THANE(W)-400 604. VS M/S. SADHANA BUILDERS PVT. LTD. DHAVAL CHHAYA, TALAOPALI RAM GANESH GADKHARI PATH THANE(W)-400 601. PAN:AABCS 4673 D ( / APPELLANT) ( / RESPONDENT) /ASSESSEE BY : SHRI L.P. SINGH -AR / REVENUE BY : SHRI SACHIDANAND DUBEY-DR / DATE OF HEARING : 19.11. 2015 / DATE OF PRONOUNCEMENT : 01.01.2016 , 1961 1961 1961 1961 254 254 254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDERS DT.27.09.2012 OF THE CIT(A)- I,THANE THE ASSESSING OFFICER(AO)HAS FILED THE PRESENT APPEALS. ASSESSEE- COMPANY,ENGAGED IN THE BUSINESS AS DEVELO PERS AND BUILDERS,FILED ITS RETURN OF INCOME ON 28.9.2009,DECLARING INCOME OF RS.9.56 LAKS.THE A O COMPLETED THE ASSESSMENT ON 26.12.2011,U/S. 143(3) OF THE ACT,DETERMINING THE I NCOME OF THE ASSESSEE AT RS.6.29 CRORES. 2. FIRST EFFECTIVE GROUND OF APPEAL DEALS WITH DEDUCT ION CLAIMED BY THE ASSESSEE U/S.80IB OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD CLAIMED DEDUCTION AMOUNTING TO RS.6.20 CRORES U/S.80IB(10)IN RESPECT OF ITS HOUSING PROJECT NAMELY DHAVAL HILLS,THAT THE PROJECT WAS FIRST APPROVED BY THE MU NICIPAL AUTHORITIES ON 09.07.2004,THAT THE COMMENCEMENT PROJECT WAS ISSUED ON 26.10.2004,THAT THE NET SIZE OF THE PLOT OF LAND WAS 9276.26 SQ.METERS,THAT THE REVISED CONSTRUCTION PLA N WAS APPROVED ON 05.10.2007,THAT THE PLAN WAS AGAIN AMENDED ON 31.03.2008,THAT LAST COMPLETIO N/OCCUPANCY CERTIFICATE WAS ISSUED ON 01.12.2008. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM,IT WAS CONTENDED THAT THE PROJECT WAS FIRST APPROVED FOR CONSTRUCTION OF BUILT UP AREA OF 9206.30 SQ.MTRS.,THAT THE PLAN WAS AMENDED TWICE SUBSEQUENTLY, AS PER THE LAST COMPLETION CERTIFICATE, DATED 1.12.2008, OUT OF THE TOTAL SANCTIONED BUILT UP AREA OF 11,960.15 SQ.MTRS THE ASSESSEE HAD COMPLETED PROJECT TO THE E XTENT OF BUILT UP AREA OF 11592.43 SQ.MTRS,THAT THE INCOMPLETE PORTION WAS NOT FOR SALE AND WAS TO BE HANDED OVER TO THE LANDLORD,THAT DUE TO LITIGATION THE SAME COULD NOT BE COMPLETED, THAT IN SIMILAR CIRCUMSTANCES DEDUCTION U/S.80IB(10) WAS ALLOWED IN EARLIER YEARS,THAT THE ASSESSEE HAD COMPLETED FOUR WINGS NAMELY A TO D,THAT THE ITA/597/M/13-SADHANA BUILDERS,AY.09 -10 2 DEDUCTION WAS CLAIMED FOR THE COMPLETED PORTION OF THE PROJECT. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE,THE FAA HELD THAT THERE WAS NO DISP UTE AS FAR AS THE OTHER CONDITIONS STIPULATED IN SECTION 80IB (10) WERE CONCERNED, THAT THE HOUSING PROJECT COMPRISED OF BUILDINGS A,B,C,D, THAT BUILDINGS C,D,E,F WERE TO BE HANDED OVER TO THE LAN D OWNERS, THAT IN THE YEAR 2006 BUILDING C AND D WERE HANDED OVER BY THE ASSESSEE,THAT BUILDIN G E AND F REMAINED TO BE HANDED OVER,THAT THE OTHER TWO BUILDING I.E. A AND B WERE THE HOUSIN G PROJECT OF THE ASSESSEE ON WHICH IT HAD CLAIMED DEDUCTION U/S. 80IB(10),THAT THE MUNICIPALI TY HAD ISSUED COMPLETION CERTIFICATE FOR BUILDING A AND B DATED 13.6.2007 AND 1.12.2008 RESP ECTIVELY, THAT BUILDINGS A AND B WERE COMPLETE BEFORE THE DUE DATE OF COMPLETION,THAT OCC UPATION CERTIFICATE WAS GRANTED BY THE LOCAL AUTHORITY FOR THESE BUILDINGS,THAT THE DUE DATE OF COMPLETION OF THE BUILDING WAS 31.3.2009,THAT THE AO HAD DENIED THE BENEFIT ONLY BECAUSE BUILDING E AND F WERE NOT COMPLETED,THAT BUILDING E AND F WERE NOT PART OF THE HOUSING PROJECT AND THAT THE ASSESSEE HAD NOT CLAIMED DEDUCTION U/S.80IB(10) OF THE ACT,THAT THE HOUSING PROJECT OF THE ASSESSEE COULD NOT BE DENIED DEDUCTION ON THE GROUND THAT OTHER BUILDINGS OF THE PROJECT WERE INCOMPLETE, THAT THE BUILDINGS E AND F COULD NOT BE COMPLETED BECAUSE OF THE PENDING LITIGATION BEFORE THE HONBLE HIGH COURT OF BOMBAY.HE REFERRED TO THE JUDGMENT OF SAROJ SALES C ORP. (115 TTJ 485) AND VANDANA PROPERTIES LTD. (I.T APPEAL 3336 AND 4361 OF 2010 DT.28.3.2012 ).FINALLY, HE ALLOWED THE APPEAL FILED BY THE ASSESSEE AND DIRECTED THE AO TO ALLOW DEDUCTION U/S . 80IB(10) TO THE ASSESSEE ON THE ELIGIBLE PROFITS. 4. DURING THE COURSE OF HEARING BEFORE US THE DEPARTME NTAL REPRESENTATIVE(DR),SUPPORTED THE ORDER OF THE AO AND CONTENDED THAT THE PROJECT OF T HE ASSESSEE WAS INCOMPLETE AS ON 31.3.2009, THAT AN AREA OF 367.72SQ.MTRS. REMAINED TO BE CONST RUCTED BY THE ASSESSEE OUT OF THE APPROVAL/GRANTED FOR CONSTRUCTION OF BUILT UP AREA OF 11960.15 SQ.MTRS, THAT THE ASSESSEE HAD VIOLATED ONE OF THE CONDITIONS OF SECTION 80IB(10) OF THE ACT.AUTHORISED REPRESENTATIVE(AR)SUPPORTED THE ORDER OF THE FAA. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE AO HAD DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) OF THE ACT AS HE WAS OF THE OPINION THAT THE ASSESSEE HAD NOT FULFILLED THE CONDITIONS STIPULATE D BY THE PROVISIONS OF THE ACT,THE NON- COMPLETION OF E & F BUILDINGS WAS SUFFICIENT REASON FOR DENYING THE BENEFIT.BASIC UNDISPUTED FACTS ARE THAT THE PROJECT WAS CONSTRUCTED ON A PLO T THAT WAS MORE THAN ONE ACRE,THAT THE ASSESSEE HAD CLAIMED DEDUCTION FOR A & B BUILDINGS ONLY U/S. 80IB OF THE ACT,THAT BECAUSE OF COURT PROCEEDINGS IT COULD NOT COMPLETE E & F BUILDINGS,T HAT THE COMPLETION CERTIFICATE ISSUED BY THE MUNICIPAL AUTHORITIES PROVED THAT THE PROJECT WAS C OMPLETED BEFORE DUE DATE I.E. 31. 03. 2009.THUS,ALL THE CONDITION STIPULATED BY THE SECTI ON 80IB(10)OF THE ACT WERE FULFILLED BY THE ASSESSEE FOR CLAIMING DEDUCTION. HERE,WE WOULD LIKE TO RELY UPON THE CASE OF VANDANA PROPERTIES(353 ITR36)WHICH READS AS UNDER: THE OBJECT OF SECTION 80-IB(10) OF THE INCOME-TAX A CT, 1961, IN GRANTING DEDUCTION EQUAL TO ONE HUNDRED PER CENT. OF THE PROFITS OF AN UNDERTAKING ARISING FROM DEVELOPING AND CONSTRUCTING A HOUSING PROJECT IS WITH A VIEW TO BOOST THE STOCK O F HOUSES FOR LOWER AND MIDDLE INCOME GROUPS, SUBJECT TO FULFILLING OF THE SPECIFIED CONDITIONS. THE EXPRESSION HOUSING PROJECT IS NEITHER DEFINED UNDER SECTION 2 OF THE ACT NOR UNDER SECTIO N 80-IB(10) OF THE ACT. EVEN UNDER THE MUMBAI MUNICIPAL CORPORATION ACT, 1998, AS ALSO UNDER THE DEVELOPMENT CONTROL REGULATIONS FOR GREATER MUMBAI, 1991, THE EXPRESSION HOUSING PROJE CT IS NOT DEFINED. THEREFORE, THE EXPRESSION HOUSING PROJECT IN SECTION 80-IB(10) W OULD HAVE TO BE CONSTRUED AS COMMONLY UNDERSTOOD. THE EXPRESSION HOUSING PROJECT IN COM MON PARLANCE WOULD MEAN CONSTRUCTING A ITA/597/M/13-SADHANA BUILDERS,AY.09 -10 3 BUILDING OR GROUP OF BUILDINGS CONSISTING OF SEVERA L RESIDENTIAL UNITS. THEREFORE, IT IS CLEAR THAT CONSTRUCTION OF EVEN ONE BUILDING WITH SEVERAL RESI DENTIAL UNITS OF THE SIZE NOT EXCEEDING 1000 SQ. FT WOULD CONSTITUTE A HOUSING PROJECT UNDER SECTI ON 80-IB(10)THE SECTION ALLOWS DEDUCTION TO A HOUSING PROJECT (SUBJECT TO FULFILLING ALL OTHER CO NDITIONS) CONSTRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE AND IT IS IMMATERIAL AS TO WHETHER OR NOT ANY OTHER HOUSING PROJECTS ARE EXISTING ON THE PLOT OF LAND.THE EXPLANATION T O SECTION 80-IB(10)(A) REFERS TO THE APPROVAL GRANTED TO THE SAME HOUSING PROJECT MORE THAN ONCE AND WOULD NOT APPLY WHERE THE APPROVAL IS GRANTED TO DIFFERENT HOUSING PROJECTS. CONSIDERING THE ABOVE WE ARE OF THE OPINION THAT TH E FAA HAD RIGHTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE.THEREFORE,CONFIRMING HIS ORDER,WE DECI DE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RES ULT,APPEAL FILED BY THE AO STANDS DISMISSED. . ORDER PRONOUNCED IN THE O PEN COURT ON 1 ST JANUARY, 2016. 01 , 2016 SD/- SD/- ( / SANDEEP GOSAIN) ( / 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 A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.