ACIT 18(2), MUMBAI V. AGARWAL JAIN DEVELOPERS, MUMBAI

ITA 6213/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59711 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2012
• Appeal Filed By: Department
• Bench Allotted: H
• Next Hearing Date: 11-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 16-08-2010
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: KAPIL K JAIN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H BEFORE SHRI J. SUDHAKAR REDDY(AM) & SHRI V.DURGA RA O(JM) I.T.A.NO. 6213/MUM/2010 (ASSESSMENT YEAR : 2007-08) ACIT 18(2) ROOM NO. 115, 1 ST FLOOR PIRAMAL CHAMBERS PAREL, MUMBAI-400 012. VS. M/S. AGARWAL JAIN DEVELOPERS F-2/F-3, DADAR MANISH MARKET, S.B. MARG, MUMBAI-400 028. APPLICANT RESPONDENT PAN/GIR NO. : AAGFA9999N ASSESSEE BY : SHRI KAPIL K. JAIN DEPARTMENT BY : SHRI C.G.K. NAIR DATE OF HEARING : 11.1.2012 DATE OF PRONOUNCEMENT : 18.1.2012 ORDER PER J. SUDHAKAR REDDY(AM) :- THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A)-29, MUMBAI DATED 14.5.2010 FOR A.Y. 2007-08 ON THE FOLLOWING GROUNDS :- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LEARNED CIT(A) ERRED IN DELETING DISALLOWANCE OF ` 68,46,900/- MADE ON ACCOUNT OF DEDUCTION U/S. 80IB( 10) OF THE I.T. ACT, 1961 CLAIMED BY THE ASSESSEE ON THE P ROFIT EARNED ON COMMON FACILITIES PROVIDED BY HIM AS A BU ILDER. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LEARNED CIT(A) ERRED IN NOT ACCEPTING THE FACT THAT PROFIT DERIVED BY A BUILDER FROM PROVIDING COMMON FACILITI ES ARE NOT ELIGIBLE FOR DEDUCTION U/S. 80IB(10). 2. WE HAVE HEARD MR. C.G.K. NAIR, LEARNED AR ON BEH ALF OF THE REVENUE AND MR. KAPIL K. JAIN, LEARNED COUNSEL FOR THE ASSESSEE. THE UNDISPUTED FACT OF THE CASE IS THAT THE ASSESSEE HA S SATISFIED THE CONDITIONS LAID DOWN U/S. 80IB(10) OF THE I.T. ACT. THE ASSESSING OFFICER, WHILE ALLOWING ASSESSEES CLAIM U/S. 80IB(10), MADE A DISALLOWANCE OF A PROPORTIONATE PRICE OF THE COMMON AREA AND THE COMM ON FACILITIES OF THE M/S. AGARWAL JAIN DEVELOPERS 2 UNITS IN THE PROJECT. THE ASSESSEES CONTENTION THA T THE AMENITIES MENTIONED ARE INTEGRAL PART OF THE HOUSING PROJECT WAS REJECTED BY THE ASSESSING OFFICER. HE RECOMPUTED THE DEDUCTION U/S. 80IB(10). 3. ON AN APPEAL THE FIRST APPELLATE AUTHORITY GRANT ED RELIEF. FIRST APPELLATE AUTHORITY AT PARAGRAPH 5 PAGE 7 HELD AS F OLLOWS :- I HAVE CONSIDERED THE FACTS OF THE CASE THE REASON ING OF THE ASSESSING OFFICER AND THE SUBMISSION MADE BY THE AP PELLANT. THE SECTION 80IB(10) PROVIDES DEDUCTION OF THE ENTI RE PROFIT FROM A HOUSING PROJECT DULY APPROVED BY LOCAL AUTHO RITIES AND SUBJECT TO CERTAIN MINIMUM CONDITIONS SUCH AS PERIO D OF COMMENCEMENT, PERIOD OF COMPLETION, MINIMUM LAND AR EA ETC. THE ASSESSING OFFICER HAS FOUND THAT THE APPELLANT IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB FULFILLING ALL THE SE CONDITIONS. THE ISSUE TO BE EXAMINED IS WHETHER THE FACILITIES PROVIDED BY THE APPELLANT ARE PART OF THE RESIDENTIAL PROJECT O R NOT. I FIND THAT ALL THE SO CALLED FACILITIES ARE ROUTINE AMENI TIES AND THEY ARE PROVIDED BY ANY BUILDER FOR SECURE AND COMFORTA BLE LIVING. THERE ARE NO FRILLS OR ADD ON LUXURY PROVIDED OR SO LD TO THE UNIT HOLDERS. SWIMMING POOL, CLUBHOUSE, LANDSCAPE GARDEN AND WATER SUPPLY ARE THE BASIC AMENITIES TO BE PROVIDED ALONGWITH ANY PROJECT. IN FACT THIS HAS ALSO BEEN APPROVED BY THE LOCAL AUTHORITY AS PART OF THE PROJECT PLAN FOR THE RESID ENTIAL PROJECT. THEREFORE, IT CAN NEVER BE SAID THAT THE SO-CALLED PROFIT DOES NOT RELATE TO THE ELIGIBLE PROJECT. THERE IS NO ROO M FOR ALLOCATING ANY PROFIT TOWARDS THESE AMENITIES. THE DISALLOWANC E MADE BY THE ASSESSING OFFICER ON PROPORTIONATE ESTIMATE AMO UNTING TO ` 68,46,900/- IS DELETED. WE AGREE WITH THESE FINDINGS OF LEARNED CIT(A) AND UPHOLD THE SAME. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER HAS BEEN PRONOUNCED ON 18 TH DAY OF JANUARY, 2012. SD/- (V. DURGA RAO) JUDICIAL MEMBER SD/- (J. SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED : 18 TH JANUARY, 2012. COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI M/S. AGARWAL JAIN DEVELOPERS 3 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI PS