DCIT CC 2, MUMBAI V. PURAVANKARA PROJECS LTD, MUMBAI

ITA 6135/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1903 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-01-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 05-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Assessee Lawyers: RA JEEV WAGLAY
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Additional evidence; Revised return
• Section: 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C BENCH BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND SHRI SANJAY ARORA (ACCOUNTANT MEMBER) ITA NO.6135/MUM/2011 ASSESSMENT YEAR: 2009-2010 ACIT-CC-2, OLD CGO BUILDING, ANNEXE, M.K.ROAD, MUMBAI-20 M/S. PURAVANKARA PROJECTS LTD., 227,S.V.ROAD, BANDRA (W), MUMBAI. PA NO.AAACP 2550 R (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI A.C.TEJPAL RESPONDENT BY: SHRI RAJEEV WAGLAY DATE OF HEARING: 28.1.2013 DATE OF PRONOUNCEMENT: 1 . 2 .2013 ORDER PER B.R.MITTAL, JM: THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMEN T YEAR 2009-2010 AGAINST ORDER DATED 31.5.2011 OF LD CIT(A) -36, MUMBAI ON THE FOLLOWING GROUNDS; (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING THE ENTIRE CLAIM OF DEDUCTION U/S .8OLB(10) FOR THE PROJECT PURVA RIVIERA, WHEN SEVERAL FLATS HAD A BUILT UP AREA EXC EEDING 1500 SQ.FT, WHICH WAS ACCEPTED BY ASSESSEE IN ITS RETURN OF INCOME U/S. 1 53A WITHDRAWING PROPORTIONATE CLAIM OF DEDUCTION U/S. 80(IB)(10). (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) ERRED IN OVERLOOKING MATERIAL FACTS MENTIONED IN TH E ASSESSMENT ORDER WHICH CLEARLY SHOW THAT THE BUILT UP AREA OF CERTAIN FLAT S BUILT BY ASSESSEE EXCEEDED 1500 SQ. FT. (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS GROSSLY ERRED IN COMPLETELY OVERLOOKING THE FAC T THAT BY GIVING FULL RELIEF FOR CLAIM OF DEDUCTION U/S.8OLB, THE CIT(A) IN FACT HAS GONE BELOW THE RETURNED ITA NO.6135/MUM/2011 ASSESSMENT YEAR: 2009-2010 2 INCOME OF THE ASSESSEE WHICH IS AGAINST THE LAW BEC AUSE UNDER THE PROVISIONS OF SECTION 153A, ALL PROVISIONS OF SECTION 139 APPLY. (IV) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS AGAIN ERRED IN OVERLOOKING THE FACT THAT ONCE THE A SSESSEE HAS ITSELF OFFERED AN INCOME IN THE RETURN OF INCOME, HOW CAN THE CIT(A) NOW GIVE RELIEF TO THE ASSESSEE BY NOT ACCEPTING THE RETURNED INCOME BUT G OING BELOW IT WITHOUT THE ASSESSEE RESORTING TO THE MECHANISM PROVIDED IN THE ACT OF FILING REVISED RETURN WITHIN THE PRESCRIBED TIME OR PROVISIONS OF SECTION 264. (V) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS AGAIN ERRED IN OVERLOOKING THE FACT THAT THIS A PPEAL ORDER IS NOT AGAINST THE ACTION OF THE ASSESSING OFFICER BUT WITHDRAWS THE I NCOME OFFERED BY THE ASSESSEE WHICH IS AGAINST THE TENETS OF LAW AS LAID DOWN BY THE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. 284 ITR 323. (VI) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S.8OLB IN RESPECT OF PROFIT FROM SALE OF CAR PARKING AREA AS THE SAME DOES NOT FORM PART OF RESIDENTIAL UNIT ELIGIBLE FOR DEDUCTION U/S.80IB(10 ). 2. BRIEFLY STATED THE FACTS GIVING RISE TO THIS AP PEAL IS THAT THE ASSESSEE COMPANY IS A BUILDER AND DEVELOPER. IT HAS DEVELOPED PROJECTS IN BANGALORE. A SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT WAS CONDUCTED IN THE CAS E OF THE ASSESSEE COMPANY, ITS GROUP CONCERNS, DIRECTORS AND RELATED PERSONS ON 15.11.20 07. THE ASSESSEE FOLLOWS PERCENTAGE COMPLETION METHOD OF ACCOUNTING. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA S CLAIMED DEDUCTION U/S. 80(IB)(10) OF THE ACT FOR ITS PROJECT PURVA RIVIERA. DURING T HE COURSE OF INVESTIGATION, PHYSICAL INSPECTION BY THE GOVERNMENT APPROVED VALUER, STATE MENT OF THE SITE ENGINEER AND STATEMENT OF THE RESIDENT OF THE PROJECT PURVA RIVI ERA , IT CAME TO THE NOTICE OF THE DEPARTMENT THAT THE ASSESSEE HAS CONSTRUCTED HOUSES WHICH EXCEEDED THE PRESCRIBED LIMIT OF 1500 SQ.FT OF BUILT UP AREA. IT WAS IN THI S BACKDROP THAT THE AO HELD THAT ASSESSEE IS NOT ENTITLED FOR THE CLAIM OF DEDUCTION U/S. 80(IB)(10) AS IT HAS FAILED TO COMPLY WITH THE CONDITION PRECEDENT I.E. THE BUILT UP AREA OF EACH UNIT SHOULD NOT EXCEED 1500 SQ.FT AND, ACCORDINGLY, DISALLOWED THE CLAIM O F THE ASSESSEE. ON APPEAL, LD CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING HIS DECISION FOR ASSESSMENT YEAR 2008-09 AND ALSO THE DECISION OF HONBLE JURISDICTIONAL HIG H COURT IN THE CASE OF BRAHMA ASSOCIATES, ORDER DATED 22.2.2011. BEING AGGRIEVED, DEPARTMENT IS IN APPEAL BEFORE US. ITA NO.6135/MUM/2011 ASSESSMENT YEAR: 2009-2010 3 3. AT THE TIME OF HEARING, LD A.R. PRODUCED A DECIS ION DATED 7.11.2012 OF A COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 04-05 TO 2008-09 IN I.T.A. NOS.4347 TO 4351/M/2010 AND CONTE NDED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBU NAL. LD D.R. DID NOT DISPUTE ABOVE CONTENTION OF LD A.R. 4. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTAT IVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW AND ALSO THE DECISION DATED 7.11. 2012 I ASSESSEES OWN CASE(SUPRA). WE OBSERVE THAT THE TRIBUNAL, ON THE SAME SET OF FA CTS IN ASSESSEES OWN CASE, HAS RESTORED THE APPEALS TO THE FILE OF AO TO DECIDE TH E SAME DENOVO , INTER ALIA, OBSERVING AS UNDER: 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE FIND THAT THE AO HAS REJECTED THE CLAIM BASED ON 1) PHYSICAL VERIFICATION AND REPORT OF GOVT. APPROV ED VALUER 2) STATEMENT OF THE DIRECTOR U/S 132[4] OF THE ACT. 3) STATEMENT OF SITE ENGINEER 4) STATEMENT OF ONE OF THE OCCUPANTS SMT. SMT. SHRA VANI PANDIT WE ALSO FIND THAT LD. CIT(A) HAS BASED HIS FINDING ON THE LETTER ISSUED BY MUNICIPAL CORPORATION, BANGALORE , FIXING THE MUNIC IPAL TAXES AS PER CERTIFICATE OF OCCUPANCY , WHICH APPEARS TO BE FILED AT THE BEHE ST OF THE CIT[A] , WHICH HAS ALSO BEEN CHALLENGED BY THE REVENUE AS ADMISSION OF ADDITIONAL EVIDENCE , IN ITS ADDITIONAL GROUND OF APPEAL. THE AO BASED HIS FI NDING ON THE STATEMENTS OF THE SITE ENGINEER AND ONE OF THE RESIDENT OF J BLOCK WITHOUT AFFORDING ANY OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE W ITNESSES THEREBY THE AO HAS VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. AT THE SAME TIME, THE LD. CIT(A) HAS CALLED FOR DETAILS OF MUNICIPAL TAXES WHICH MAY NOT BE TERMED AS ADDITIONAL EVIDENCE IN STRICT SENSE YET THE CIT [A] HAS BASED HIS FINDING WITHOUT AFFORDING ANY OPPORTUNITY TO THE AO TO EXAMINE THE SAME. AT T HE SAME TIME THE CIT [A] HAS NOT DISCUSSED THE EVIDENCES / STATEMENTS BROUGH T ON RECORDS BY THE AO, TO DISCARD THE FINDINGS OF THE AO. INCIDENTALLY, THE A O AND THE CIT(A) BOTH HAVE VIOLATED THE PRINCIPLES OF NATURAL JUSTICE THEREFOR E IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ENTIRE ISSUE BACK TO THE FILE OF THE AO. THE AO IS DIRECTED TO TAKE UP THE ASSESSMENT PROCEEDINGS DENO VO SO FAR THE CLAIM OF DEDUCTION U/S 80IB[10] IS CONCERNED . IT IS SUGGEST ED THAT THE AO SHOULD GET THE PHYSICAL VERIFICATION OF THE FLATS AT J AND K BLOCK OF THE PROJECT THROUGH THE DVO .IT IS ALSO SUGGESTED THAT THE EACH AND EVERY OCCUP ANT OF THE FLATS SHOULD BE CONTACTED TO VERIFY WHETHER ANY ADDITION/ALTERATION WAS DONE BY THEM OR THE BUILT UP AREA IS SAME AS IT WAS PURCHASED ORIGINALL Y, THIS CAN ALSO BE VERIFIED ITA NO.6135/MUM/2011 ASSESSMENT YEAR: 2009-2010 4 FROM THE MUNICIPAL AUTHORITIES WHO HAVE FIXED MUNIC IPAL TAXES FOR EACH UNIT SEPARATELY. IF THE BUILT UP AREA OF SOME OF THE FL ATS ARE FOUND TO BE IN VIOLATION OF THE PRESCRIBED MANDATORY LIMITS, THEN TO CONSIDE R THE CLAIM OF PRO-RATA DEDUCTION OF THE ASSESSEE IN THE LIGHT OF THE JUDIC IAL PRONOUNCEMENT RELIED UPON BY BOTH THE PARTIES. IT IS ALSO SUGGESTED THAT IF CERTAIN UNITS ARE FOUND IN EXCESS OF THE PRESCRIBED LIMIT, THEN THE LAND AREA CONSUME D BY SUCH UNITS SHOULD ALSO BE EXCLUDED FROM THE ELIGIBLE PROJECT AND THEREAFTER T HE AO HAS TO SEE WHETHER THE ELIGIBLE PROJECT STANDS ON A LAND AREA OF ONE ACRE OR MORE. 11. BEFORE PROCEEDING FOR DENOVO ASSESSMENT, THE AO MUST GIVE A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AS SESSEE IS FREE TO ADDUCE ANY OTHER EVIDENCE WHICH IT WANTS TO SUBSTANTIATE THE C LAIM OF DEDUCTION. THE AO IS ALSO FREE TO BRING ANY COGENT MATERIAL EVIDENCE ON RECORD TO DISCARD THE CLAIM OF THE ASSESSEE, AFTER GIVING A REASONABLE OPPORTUNITY OF REBUTTAL TO THE ASSESSEE. 5. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE COORDINATE BENCH, AND WE ARE IN CON SIDERED AGREEMENT WITH THE SAME. ACCORDINGLY, WE RESTORE THE APPEAL TO TH E FILE OF AO WITH A DIRECTION TO MAKE DENOVO ASSESSMENT AS PER THE DECI SION OF THE TRIBUNAL (SUPRA). 6. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 1 ST FEBRUARY, 2013 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 1 ST FEBRUARY, 2013 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),36, MUMBAI 4. COMMISSIONER OF INCOME TAX, C-1 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH C MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI