ITO WD 20(1)(2), MUMBAI V. GIRISH & ASSOCIATES, MUMBAI

ITA 6330/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56231 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 25-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 6330/MUM/2010 ASSESSMENT YEAR : 2007-08. THE INCOME TAX OFFICER, M/S GIRISH AND ASSOCIATES, 20(1)(2), MUMBAI. VS. 101, OANCHRATNA, OFF YARI ROAD, ANDHERI (WEST), MUMBAI 51. PAN AAAFG 5053D APPELLANT. RESPONDENT APPELLANT BY : SHRI A.K. NAYAK. RESPONDENT BY: SHRI DEEPAK TRALSHAWALA. DATE OF HEARING : 01-12-2011. DATE OF PRONOUNCEMENT : 16-12-2011. O R D E R. PER P.M. JAGTAP, A.M. : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LEARNED CIT(APPEALS)-31, MUMBAI DATED 14-06-2010 AND THE SO LITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE ASSESSEES CLAIM FOR DEDUCT ION U/S 80IB(10). 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM WHICH IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. IT FOLLOWS PROJE CT COMPLETION METHOD FOR RECOGNIZING ITS PROFITS FROM THE SAID BUSINESS. IN THE YEAR UNDER CONSIDERATION, IT HAD COMPLETED TWO PROJECTS, NAMELY, PANCHVATI A A T CHANDIVALI AND DHAWALGIRI AT GOREGAON (EAST). A DEDUCTION U/S 8 0IB(10) OF THE ACT WAS CLAIMED BY IT IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION IN 2 ITA NO.6330/MUM/2010 ASSESSMENT YEAR:2007-08 RESPECT OF PROFITS OF THE PROJECT PANCHVATI A AT CHANDIVALI. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE SAID CLAIM OF THE ASSES SEE FOR DEDUCTION U/S 80IB(10) WAS EXAMINED BY THE AO AND ON SUCH EXAMINATION, HE FOUND THE SAME TO BE NOT ALLOWABLE FOR THE FOLLOWING REASONS GIVEN IN THE AS SESSMENT ORDER : A) EVEN THOUGH THE APPELLANT WAS A SUB-DEVELOPER O F THE PROJECT, THE CONSTRUCTION OF THE PROJECT WAS DONE AND COMPLETED BY M/S. PANCHSHEET ENTERPRISES. THE RELEVANT COPIES OF AGREEMENT FOR S UB-DEVELOPMENT WITH M/S JAYCEE DEVELOPERS AND JOINT VENTURE WITH M/S PANCHS HEEL ENTERPRISES WERE IMPOUNDED DURING THE COURSE OF SURVEY PROCEEDINGS. B) THE LAW IS VERY CLEAR THAT THE COMMERCIAL AREA S HOULD NOT EXCEED 000 SQ.FT. OR 5% AGGREGATE BUIDUP AREA OF THE HOUSING P ROJECT WHICHEVER IS LESS. THE COMMERCIAL AREA IN THE GIVEN PROJECT DOES NOT S ATISFY THIS CONDITION ALSO. HENCE, THE ASSESSEE FAILS TO MEET THIS CONDITION AL SO. C) AS PER SEC. 80IB(10) THE BUILT UP AREA OF RESIDE NTIAL UNIT SHOULD NOT EXCEED 1000 SQ.FT. AND THE ASSESSEE HAS COMBINED TW O FLATS EXCEEDING 1000 SQ.FT., HENCE CLAIM MADE BY THE ASSESSEE HAS NOT FU LFILLED THE PRESCRIBED CONDITIONS. 3. THE ACTION OF THE AO IN DISALLOWING ITS CLAIM FO R DEDUCTION U/S 80IB(10) WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FILED BEFOR E THE LEARNED CIT(APPEALS) WHO DISPOSED OF THE SAID APPEAL ALLOWING THE CLAIM OF T HE ASSESSEE FOR DEDUCTION U/S 80IB(10) FOLLOWING THE ORDER OF THE TRIBUNAL IN ASS ESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06 PASSED ON 29-09-2008. THE LEARNED CIT( APPEALS) FOUND THAT SIMILAR OBJECTIONS WERE RAISED BY THE AO IN ASSESSMENT YEAR 2005-06 WHILE DISALLOWING THE ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) AND THE SAME WERE FOUND TO BE NOT SUSTAINABLE BY THE TRIBUNAL AFTER DISCUSSING ALL TH E RELEVANT ASPECTS IN DETAIL. THE LEARNED CIT(APPEALS) ALSO NOTED THAT A SIMILAR CLAI M OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) WAS ALLOWED BY HIS PREDECESSOR IN ASSE SSMENT YEAR 2006-07 INVOLVING IDENTICAL FACTS AND CIRCUMSTANCES. FOLLOWING THESE JUDICIAL PRONOUNCEMENTS IN 3 ITA NO.6330/MUM/2010 ASSESSMENT YEAR:2007-08 ASSESSEES CASE FOR EARLIER YEARS ON THE SIMILAR IS SUE, THE LEARNED CIT(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) FOR THE YEAR UNDER CONSIDERATION IN RESPECT OF PROFITS OF THE PROJECT PANCHVATI A AT CHANDIVALI. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE CLAIM O F THE ASSESSEE FOR DEDUCTION U/S 80IB(10) IN THE YEAR UNDER CONSIDERATION HAS BEEN A LLOWED BY THE LEARNED CIT(APPEALS) FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE ON A SIMILAR ISSUE FOR ASSESSMENT YEAR 2005-06. HE HAS A LSO RELIED ON THE ORDER OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR ASSESSMENT Y EAR 2006-07 WHEREIN A SIMILAR CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) WA S ALLOWED ON IDENTICAL FACTS AND CIRCUMSTANCES. AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US, THE SAID ORDER OF THE LEARNED CIT(APPEALS) FOR ASSESSME NT YEAR 2006-07 ALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) HA S SINCE BEEN UPHELD BY THE TRIBUNAL VIDE ITS ORDER DATED 29 TH APRIL, 2011 PASSED IN ITA NO. 1282/MUM/2010. A COPY OF THE SAID ORDER IS PLACED ON RECORD BEFORE US AND A PERUSAL OF THE SAME SHOWS THAT THE DEDUCTION CLAIMED BY THE ASSESSEE U/ S 80IB(10) IN SIMILAR FACTS AND CIRCUMSTANCES HAS BEEN HELD TO BE ALLOWABLE BY THE TRIBUNAL RELYING ON THE DECISION OF PUNE SPECIAL BENCH OF THE ITAT IN THE C ASE OF BAHMA ASSOCIATES VS. JCIT 111 ITD 113 WHICH, AS NOTED BY THE TRIBUNAL, H AS BEEN UPHELD BY THE HONBLE BOMBAY HIGH COURT VIDE THEIR JUDGMENT REPOR TED IN 51 DTR 292 (BOM.) WHEREIN IT WAS HELD THAT DEDUCTION U/S 80IB(10) IS TO BE ALLOWED IN ENTIRETY TO THE HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY HAV ING RESIDENTIAL UNITS WITH COMMERCIAL USER. RESPECTFULLY FOLLOWING THESE DECIS IONS OF THE TRIBUNAL AS WELL AS THAT OF THE HONBLE JURISDICTIONAL HIGH COURT, WE U PHOLD THE IMPUGNED ORDER OF THE 4 ITA NO.6330/MUM/2010 ASSESSMENT YEAR:2007-08 LEARNED CIT(APPEALS) ALLOWING THE CLAIM OF THE ASSE SSEE U/S 80IB(10) AND DISMISS THIS APPEAL FILED BY THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF DEC.,2011. SD/- SD /- (V. DURGA RAO) (P.M. J AGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED : 16 TH DEC., 2011. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, G-BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI. WAKODE