ITO WD 3(4), KALYAN V. PARESH CONSTRUCTION CO, KALYAN

ITA 5988/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2293 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 25-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARTI SINGH
• Assessee Lawyers: NIKI TA AGARWALAR
• Keywords: Retrospective amendment
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH , MUMBAI BEFORE SRI MAHAVIR SINGH, J UDICIAL MEMBER AND SRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO .5988 /MUM/2014 (A Y : 2003 - 04 ) THE INCOME TAX OFFICER, WARD - 3(4), KALYAN RANGE - 3, 2 ND FLOOR, RANI MAN SION, MURBAD ROAD, KALYAN (W), 421 301 VS. PARESH CONSTRUCTION CO. , SHOP NO.6, GROUND FLOOR, DASS KRUPA BUILDING, R. P. ROAD, KALYAN (W) 421301 PAN:AABFP 5209 K APPELLANT .. RESPONDENT APPELLANT BY .. MS. BHARTI SINGH, DR RESPONDENT BY .. MS. NIKI TA AGARWAL,AR DATE OF HEARING .. 27 - 07 - 2016 DATE OF PRONOUNCEMENT .. 27 - 07 - 2016 O R D E R PER MAHAVIR SINGH , JM : THIS APPEAL BY THE REVENUE IS ARISI N G OUT OF THE ORDER OF CIT (A) - 1 , MUMBAI PASSED IN APPEAL NO. 323/11 - 12 DATED 12 - 0 6 - 2014 . ASSESSMENT W AS FRAMED BY THE IT O - WARD 3(4), MUMBAI FOR ASSESSMENT YEAR 2003 - 04 VIDE HIS ORDER DATED 0 4 - 11 - 20 11 PASSED U/S 143(3) READ WITH SECTION 254 OF THE INCOME TAX ACT, 1961 ( HEREINAFTER THE ACT). 2. THE ONLY ISSUE IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF THE CIT (A) ALLOWING DEDUCTION U/S 80 - IB OF THE ACT. FOR THIS, THE REVENUE HAS RAISED THE FOLLOWING 3 GROUNDS: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN ALLOWING THE DEDUCTION U/S 8 0IB (1 0 ) WITHOUT APPRECIATING THE FACT THAT THE AO HAS RIGHTLY DISALLOWED IT AS THE BASIC CONDITIONS FOR CLAIM OF DEDUCTION WAS NOT FULFILLED I. E. THE COMMERCIAL UNIT ADMEASURING 3150 SQ. FT. WAS CONSTRUCTED OUT OF TOTAL BUILT - UP AREA OF 59852 SQ. FT. AND ALSO THE APPROVED PLAN WAS FOR A RESIDENTIAL & COMMERCIAL PROJECT. ITA NO. 5988 /MUM/20 1 4 2 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN NOT CONSIDERING THE FACT THAT AMENDMENT WHICH WAS MADE FROM 01/04/2005 WAS NOT WITH RETROSPECTIVE EFFECT THEREFORE THE AMENDMENT IS NOT APPLICABLE TO THIS CASE AS THE PROJECT WAS APPROVED ON 03/04/1999 AND REVISED ON 09/04/199. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) THANE ALLOWED THE C LAIM U/S 80IB (10) BASED ON THE DECISION OF M/S. BRAHMA ASSOCIATES WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT WHICH IS PENDING BEFORE SUPREME COURT. 3 . BRIEFLY STATED FACTS ARE THAT THE AO DISALLOWED THE CLAIM OF DEDUCTION U/S 80IB (10) OF THE ACT IN RESPECT OF THE ASSESSEES CONSTRUCTION OF COMMERCIAL AREA I.E. BUILT - UP AREA OF COMMERCIAL UNITS AT 3190 SQ. FT. WHICH IS MORE THAN THE PRESCRIBED LIMIT OF 2000 SQ. FT. HE DISALLOWED THE CLAIM OF TH E ASSESSEE FOR DEDUCTION U/S 80 IB (10) OF THE ACT . THE AO ALSO NOTED THAT THIS CASE IS COVERED BY THE DECISION OF THE SPECIAL BENCH OF ITAT IN THE CASE OF BRAHMA ASSOCIATES AND OTHERS IN ITA NO.1417/PN/2006 DATED 06 - 04 - 2009 AND IT HAS NOT BECOME FINAL AND SLP IS PENDING BEFORE THE HONBLE SUPREME COURT AGAINST TH E ORDER OF THE HONBLE BOMBAY HIGH COURT WHEREIN THE HONBLE BOMBAY HIGH COURT HAS CONFIRMED THE ORDER OF THE SPECIAL BEN CH OF THE TRIBUNAL. THE CIT (A), FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS BRAHMA ASSOCIATES [2011] 333 ITR 289 (BOM ) ALLOWED THE CLAIM OF THE ASSESSEE VIDE PARA 12 BY OBSERVING AS UNDER: - 12. WITH REGARD TO THE EXTENT OF THE COMMERCIAL AREA IN THE HOUSING PROJECT, IT IS SEEN THAT THE ITAT, SPECIAL BENCH, PUNE HAD HELD THAT BEFORE 1.04.2005 IF THE COM MERCIAL AREA IN A HOUSING PROJECT WAS LESS THAN 10%OF THE TOTAL BUILT UP AREA OF THE PROJECT, THEN NO ADVERSE INFERENCE WAS REQUIRED TO BE DRAWN AND DEDUCTION U/S. 80IB (10) WAS TO BE ALLOWED. HOWEVER, HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCI ATES & OTHERS HAS FURTHER REMOVED THE RESTRICTION OF EVEN 10% IN RESPECT OF THE COMMERCIAL AREA FOR PROJECTS APPROVED BEFORE 01.04.2005 AS THERE WAS NO SUCH LIMIT PRESCRIBED BY THE ACT. THE AMENDMENT TO SECTION 80IB (10)(D) PRESCRIBING THE LIMIT 5% OF THE TOTAL BUILT UP AREA OR 2000 SQ. FT. WHICHEVER IS LESS, HAS BEEN HELD TO BE PROSPECTIVE BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES & OTHERS. ITA NO. 5988 /MUM/20 1 4 3 4 . NOW BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT EVEN THE SLP HAS BEEN D ISMISSED BY THE HONBLE SUPREME COURT IN THE CASE OF BRAHMA ASSOCIATES AND OTHERS REPORTED IN (2015) 277 CTR REPORT 297. 5 . IN TERMS OF THE ABOVE FACTS THAT THE ISSUE IS COVERED BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOC IATES AND OTHERS (SUPRA) IN WHICH EVENTUALLY EVEN THE SUPREME COURT CONFIRMED THE DECISION OF THE HONBLE BOMBA Y HIGH COURT DISMISSING THE SLP. RESPECTFULLY FOLLOWING THE SAME, WE CONFIRM THE ORDER OF THE CIT (A) AND DISMISS THE APPEAL OF THE REVENUE. 6 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 27 /07 / 201 6 . SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) ( MAHAVIR SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI , DATED 27 /07 / 201 6 LAKSHMIKANTA DEKA/SR.PS ITA NO. 5988 /MUM/20 1 4 4 C OPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI DATE INITIAL DICTATION PAD ATTACHED WITH THE DRAFT ORDER YES 1. DRAFT DICTATED ON 27 - 07 - 16 SR.PS 2. DRAFT PLACED BEFO RE AUTHOR 27 - 07 - 16 / 28 - 07 - 16 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT ( A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//