Deputy Commissioner of Income-Tax, Central Circle 2(2), Pune V. M/s. Amit Enterprises Housing Limited, Pune

ITA 602/PUN/2020

AI Insights

The case involves three appeals by the Revenue against M/s. Amit Enterprises Housing Limited concerning the assessment years 2012-13, 2013-14, and 2014-15. The primary issue was whether the Commissioner of Income Tax (Appeals) was justified in allowing deductions under section 80IB(10) of the Income Tax Act on a proportionate basis despite non-compliance with the statutory conditions, specifically the non-completion of the entire housing project within the prescribed five-year period from the date of approval. The Tribunal examined the completion certificates and the timelines of the project and found that the assessee failed to complete the project within the stipulated time, thus not meeting the conditions of section 80IB(10).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132862 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-02-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 05-11-2020
• Other Referred Cases: Vijay Tukaram Raundal vs. ITA No. 178/PUN/2019, Hemraj Shankarlal Mundada vs. ITA No. 1762/PUN/2018, M/s. Dilip Kumar and Company & others vs. Civil appeal No. 3327/2007, Om Associates vs. ITA No. 438/PUN/2017, Shewale & Sons vs. 118 taxmann.com 426 (Pune-Trib.), Vertex Homes (P.) Ltd. vs. 62 taxmann.com 285 (Hyderabad-Trib.), M/s. P3 Properties vs. ITA No. 41/PUN/2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 80IB; 22

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.602 & 603/PUN/2020 धििाारण वर्ा / Assessment Years : 2012-13 & 2013-14 Dy. Commissioner of Income Tax, Central Circle – 2(2), Pune .......अपीलाथी / Appellant बिाम / V/s. M/s. Amit Enterprises Housing Limited, Amit House, 1902, Sadashiv Peth, Bajirao Road, Pune – 411030 PAN : AAGCA9192A ......प्रत्यथी / Respondent IT(SS)A No. 135/PUN/2019 धििाारण वर्ा / Assessment Year : 2014-15 Dy. Commissioner of Income Tax, Central Circle – 2(2), Pune .......अपीलाथी / Appellant बिाम / V/s. M/s. Amit Enterprises Housing Limited, Amit House, 1902, Sadashiv Peth, Bajirao Road, Pune – 411030 PAN : AAGCA9192A ......प्रत्यथी / Respondent Assessee by : Shri Neelesh Khandelwal Revenue by : Shri Sardar Singh Meena सुनवाई की तारीख / Date of Hearing : 28-02-2023 घोषणा की तारीख / Date of Pronouncement : 09-03-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : All these three appeals by the Revenue against the separate order dated 24-03-2020 and 25-09-2019 passed by the Commissioner of Income 2 ITA Nos. 602 & 603/PUN/2020 & IT(SS)A No. 135/PUN/2019 Tax (Appeals)-1, Pune [„CIT(A)‟] for assessment years 2012-13, 2013-14 and 2014-15. 2. We find that ITA Nos. 602 & 603/PUN/2020 were filed with a delay of 63 days. Upon hearing both the parties, we find that the delay of 63 days in both the appeals are saved by the decision of Hon‟ble Supreme Court passed during National Lockdown imposed on account of pandemic Covid-19. Therefore, the delay of 63 days in both the appeals are condoned. 3. Since, the issues raised in all these three appeals are similar basing on the same identical facts, we proceed to hear all these three appeals together and to pass a consolidated order for the sake of convenience. 4. First, we shall take up appeal in ITA No. 602/PUN/2020 for A.Y. 2012-13. 5. The appellant-revenue raised eight grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(A) justified in allowing the deduction u/s. 80IB(10) of the Act on proportionate basis ignoring the non-compliance of conditions contemplated u/s. 80IB(10) of the Act. 6. The ld. DR Shri Sardar Singh Meena, submits that the CIT(A) erred in allowing proportionate deduction u/s. 80IB(10) of the Act without appreciating the fulfillment of the conditions stipulated u/s. 80IB(10) of the Act. He argued that the assessee has got approval for construction on 30-03-2007 and required to complete the said project within five years in 3 ITA Nos. 602 & 603/PUN/2020 & IT(SS)A No. 135/PUN/2019 terms of clause (a)(iii) of sub-section (10) of section 80IB of the Act. He drew our attention to para 6.18 of the impugned order and argued that the CIT(A) committed fundamental error in granting pro-rata deduction on eligible units even if the entire project has not been completed. He vehemently argued that the CIT(A) clearly recorded that 22 bungalows were not completed by the stipulated date and only 9 buildings were completed which clearly shows that ineligibility of the assessee in getting deduction u/s. 80IB(10) of the Act. Further, he drew our attention to para 3.6 of the assessment order, where, the AO recorded that the said 22 bungalows which were part of Bloomfield project have not been completed on or before 31-01-2012 as mandated by the section 80IB(10) of the Act. He vehemently argued that there was no completion certificate before the due date and the partial completion certificate as furnished by the assessee is necessarily be ignored, the provisions under Law only contemplates the completion certificate and partial completion certificate has no place under the provisions of section 80IB(10) of the Act. 7. The ld. DR drew our attention to the order of this Tribunal in the case of Vijay Tukaram Raundal in ITA No. 178/PUN/2019 for A.Y. 2013-14 vide order dated 30-08-2022, particularly at para 16 of the said order and argued that this Tribunal by placing reliance on the decision of Hon‟ble Supreme Court in the case of Commissioner of Customs (Import), Mumbai Vs. M/s. Dilip Kumar and Company & others in Civil appeal No. 3327/2007 (2018) 9 SCC 1 dated 30-07-2018 wherein held that the claim of exemption is to be strictly examined in terms of provisions of the Act and in the present case there was no completion certificate furnished by the assessee regarding the entire project. When there is no completion 4 ITA Nos. 602 & 603/PUN/2020 & IT(SS)A No. 135/PUN/2019 certificate in respect of entire project, the assessee is not entitled to claim proportionate deduction under the Act. 8. Further, the ld. DR drew our attention to the order of this Tribunal in the case of Hemraj Shankarlal Mundada in ITA No. 1762/PUN/2018 for A.Y. 2012-13 vide order dated 13-01-2013 and argued that this Tribunal in similar circumstances on identical facts allowed Revenue‟s appeal by holding that the assessee is not entitled to avail benefit u/s. 80IB(10) of the Act for non-satisfaction of conditions contemplated under Law for availing the same. He argued that the CIT(A) failed to look all these aspects and committed error in allowing proportionate deduction to the assessee. 9. The ld. AR submits that there are plethora of orders from this Tribunal in allowing the proportionate deduction u/s. 80IB(10) of the Act. He drew our attention to the partial completion certificate as furnished in the paper book vide Annexure 2 and argued that the total 6 buildings along with parking plus 12 floors have been completed in accordance with the sanctioned plan and the CIT(A) rightly granted proportionate deduction in respect of the said eligible units. He argued that there is no dispute with regard to non-completion of 22 bungalows of Bloomfield project and the assessee has no grievance if this Tribunal denies deduction in respect of those 22 units. He drew our attention to the order of this Tribunal in the cases of Om Associates in ITA No. 438/PUN/2017, Shewale & Sons reported in 118 taxmann.com 426 (Pune-Trib.), and Hyderabad Tribunal in the case of Vertex Homes (P.) Ltd. reported in 62 taxmann.com 285 (Hyderabad-Trib.) and argued in all the said cases the Tribunal granted proportionate deduction on eligible units and denied on ineligible units. In the present case also, the assessee entitled to claim proportionate 5 ITA Nos. 602 & 603/PUN/2020 & IT(SS)A No. 135/PUN/2019 deduction as held by this Tribunal as well as Hyderabad Tribunal in the above said cases. By referring to order of this Tribunal in the case of M/s. P3 Properties in ITA No. 41/PUN/2020 for A.Y. 2010-11 vide order dated 08-02-2023 as relied on by the ld. DR, he vehemently argued that it has no application to the facts on hand as there is a dispute with regard to the date of approval of sanctioned plan. Referring to the order of this Tribunal in the case of Hemraj Shankarlal Mundada (supra) as relied on by the ld. DR, he submits that the said order is distinguishable as the project involved therein is non-habitable. Further, he drew our attention to para 7 of this Tribunal order in the case of Vijay Tukaram Raundal (supra) and argued that the facts in the said case are entirely different from the facts on hand. He submits that the Competent Authority issued Completion Certificate belatedly though the project was completed within the due date. He vehemently argued that the finding of the Tribunal in the said case is not at all applicable to the facts on hand. In reply, the ld. D.R submits that the Tribunal in the case of Vijay Tukaram Raundal (supra) held that the assessee is not entitled to claim deduction u/s 80IB(10) of the Act if the project is not completed within the stipulated time provided under the Statute. In order to come to such conclusion, the Tribunal placed reliance in the case of Dilipkumar & Co. of Hon‟ble Supreme Court and drew our attention to para 16 of the said order. 10. Heard both the parties and perused the material available on record. We note that the assessee is builder, promoter and developer of the real estate, is engaged in the business of construction. The assessee developed a residential housing project by name Bloomfield at Ambegaon (Bk), Tal.- Haveli, Pune vide commencement certificate dated 30-03-2017 and the said whole project is required to be completed before 31-01-2012 which is 6 ITA Nos. 602 & 603/PUN/2020 & IT(SS)A No. 135/PUN/2019 evident from para 3.6 of the assessment order. There is no dispute with regard to the said two dates i.e. issuance of commencement certificate as well as date of non-completion. Admittedly, partial completion certificate as furnished by the assessee at Annexure 2 of the paper book clearly shows that the assessee asked completion certificate, comprising of Buildings A, B Wings, C, D, E, F, G, H and I up to P + 12 floors. Further, it explains that total 6 buildings are completed along with parking + 12 floors out of sanctioned plan consisting of 8 units of bungalow A type, B type – 14 and buildings numbers A, B, Wing-C+Wing-D, E, Wing-F+Wing-G, Wing-H+Wing-I totaling to 28 buildings which clearly shows out of total 28 buildings, the assessee completed only 6 buildings along parking + 12 floors as on the date of issuance of the said partial completed certificate dated 10-11-2011 issued by the District Collector, Pune. On perusal of assessment order at para 3.6, the AO noted that the partial completion certificate dated 11-11-2011 makes it clear the 22 bungalows part of Bloomfield project have not been completed before 30-01-2012 as mandated by section 80IB(10) of the Act. A reading of finding of AO in the said para at 3.6, partial completion certificate issued by the District Collector, Pune clearly shows that the assessee could not complete the entire project within stipulated time as contemplated under the provisions of section 80IB(10) of the Act. When, there is no satisfaction with regard to fulfillment of conditions as required u/s. 80IB(10) of the Act, the assessee is not entitled to claim deduction even on proportionate basis as held by this Tribunal in the case of Vijay Tukaram Raundal (supra) by following the decision of Hon‟ble Supreme Court in the case of M/s. Dilip Kumar and Company & others (supra). Further, on an examination of para 6.18 of the impugned order which clearly shows that the CIT(A) granted pro-rata deduction on eligible units even when the entire project have not been 7 ITA Nos. 602 & 603/PUN/2020 & IT(SS)A No. 135/PUN/2019 completed. Further, there is a clear recording of finding by the CIT(A) about 22 bungalows forming part of Bloomfield project which is a subject matter of this appeal were not completed by the stipulated date. Thus, the CIT(A) committed error in granting proportionate deduction even though the project has not been completed within stipulated time. Thus, the order of CIT(A) is not justified and it is set aside. Thus, the grounds raised by the Revenue are allowed. 11. In the result, the appeal of Revenue is allowed. ITA No. 603/PUN/2020 and IT(SS)A No. 135/PUN/2019. 12. We find that the issues raised in the appeals and the facts in ITA No. 603/PUN/2020 and IT(SS)A No. 135/PUN/2019 are identical to ITA No. 602/PUN/2020 except the variance in amount. Since, the facts in ITA No. 603/PUN/2020 and IT(SS)A No. 135/PUN/2019 are similar to ITA No. 602/PUN/2020, the findings given by us while deciding the appeal of Revenue in ITA No. 602/PUN/2020 would mutatis mutandis apply to ITA No. 603/PUN/2020 and IT(SS)A No. 135/PUN/2019, as well. Accordingly, both the appeals of Revenue are allowed. 13. In the result, all the three appeals of Revenue are allowed. Order pronounced in the open court on 09 th March, 2023. Sd/- sd/- - (Inturi Rama Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ददनाांक / Dated : 09 th March, 2023. रदव/Ankam 8 ITA Nos. 602 & 603/PUN/2020 & IT(SS)A No. 135/PUN/2019 आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A)-1, Pune 4. The Pr. CIT-1, Pune 5. दवभागीय प्रदतदनदध, आयकर अपीलीय अदधकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आदेशानुसार / BY ORDER, /// TRUE COPY /// वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदधकरण ,पुणे / ITAT, Pune