DCIT 3(2), MUMBAI V. OMEGA INVESTMENT & PROPERTIES LTD, MUMBAI

ITA 6645/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3328 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 03-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DARSI SUMAN RATHAMDR
• Assessee Lawyers: RAKESH JOSHIARS
• Section: 80IB

Judgement Text

INCOME-TAX APPELLATE TRIBUNAL C BENC H MUMBAI , , BEFORE S/SHJOGINDER SINGH,JUDICIA L MEMBER & RAJENDRA,ACCOUNTANT MEMBER ./I.T.A./6645/MUM/2014 , /ASSESSMENT YEAR: 2010-11 DY. CIT-3(2), ROOM NO.674 6 TH FLOOR, AAYAKAR BHAVAN M.K. ROAD, MUMBAI-400 020. VS. M/S. OMEGA INVESTMENT & PROPERTIES LTD. 34B, JOLLY MAKER CHAMBER-II 3 RD FLOOR, NARIMAN POINT MUMBAI-400 021. PAN:AAACO 0978 L ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: DR. DARSI SUMAN RATHAM-DR ASSESSEE BY: SHRI RAKESH JOSHI-ARS / DATE OF HEARING: 30.05.2016 / DATE OF PRONOUNCEMENT: 30.05.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.06.8.2014 OF CIT(A)-4,MUMB AI, THE ASSESSING OFFICER (AO) HAS FILED THE PRESENT APPEAL. ASSESSEECOMPANY , ENGAGED IN THE BUSINESS OF REDEVELOPMENT OF SLUM AND SUCH OTHER PROPERTIES, FILED ITS RETURN OF INCOME 29.9.2010, DECLARING TOTAL INCOME AT RS.69.86 LAKHS .THE ASSESSMENT ORDER U/S.143(3) OF THE ACT, WAS PASSED ON 13.3.2013, DET ERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.4.63 CRORES. 2. THE EFFECTIVE GROUND OF APPEAL IS ABOUT ALLOWING D EDUCTION U/S. 80IB(10) OF THE ACT RS.3.90 CRORES . 3. DURING THE COURSE OF HEARING BEFORE US THE AUTHORIZ ED REPRESENTATIVE (AR) STATED THAT SIMILAR GROUND OF APPEAL WERE RAISED BY THE DEPARTMENT BEFORE THE TRIBUNAL FOR THE AY 2009-10 (ITA NO.997/M/2013), TH AT VIDE ITS ORDER DATED 5.8.14 THE TRIBUNAL HAD DISMISSED THE APPEAL OF THE AO. THE DEPARTMENTAL 6645/M/14-OMEGA INVESTMENT 2 REPRESENTATIVE (DR) STATED THAT BECAUSE OF THE PROV ISO TO CLAUSE (A) AND (B) OF SECTION 80IB(10) THE ASSESSEE WAS NOT ENTITLED TO C LAIM THE DEDUCTION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE AO HAD RAISED THE FOLLOWING GROUNDS O F APPEAL FOR THE AY 2009-10 (SUPRA). 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD CIT (A) JUSTIFIED IN ALLOWING DEDUCTION UNDER SECTION 80IB (10) OF THE I NCOME TAX ACT OF RS. 1,03,79,815/- IN RESPECT OF PROFIT DERIVED FROM DEVELOPMENT OF RESIDENTIAL BUIL DING BY HOLDING THAT ASSESSEE IS COVERED BY PROVISO TO CLAUSE (A) AND (B) OF SECTION 80IB (10) WITHOUT APPRECIATING THE FACT THAT THE PROJECT WAS APPROVED BY THE SLUM REHABILITATION AUTHORITY ON 7.10.2002 W HICH DID NOT FALL WITHIN THE PERIOD OF APPROVAL AS PER BOARDS NOTIFICATION NO.2 OF 2011. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD CIT (A) WAS JUSTIFIED IN HOLDING THAT REVISED PROJECT AND PLAN OF THE ASSESS EE WAS APPROVED CLAUSE (A) AND CLAUSE (B) OF SECTION 80IB (10) OF THE ACT AND AS SUCH RIGORS OF CLAUSE (A) AND CLAUSE (B) WOULD NOT BE APPLICABLE T O THE PROJECT OF THE ASSESSEE WITHOUT APPRECIATING TH E FACT THAT AS PER EXPLANATION 1 TO CLAUSE (A) OF SECTION 80IB(10) OF THE ACT WHERE APPROVAL IN RESPE CT OF THE HOUSING PROJECT HAD BEEN OBTAINED MORE THAN ONCE, SUCH PROJECT SHALL BE DEEMED TO HAVE BEE N APPROVED ON THE DATE ON WHICH THE BUILDING WAS APPROVED BY THE LOCAL AUTHORITY FOR THE FIRST T IME. THE TRIBUNAL HAD ADJUDICATED THE ISSUE AS UNDER: 3. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET , SHRI RAKESH JOSHI, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ABOVE MENTION ED GROUNDS AND MENTIONED THAT THE ONLY ISSUE RAISED BEFORE THE TRIBUNAL RELATES TO THE ALL OWABILITY OF DEDUCTION U/S 80IB (10) WHEN THE PROJECT IN QUESTION IS CLEARED AFTER APPROVAL OF TH E SLUM REHABILITATION AUTHORITY. IT IS THE CLAIM OF THE ASSESSEE THAT THE DUE DATES FOR COMPLETION O F PROJECT PROVIDED UNDER SUBSECTION-10 OF SECTION 80IB ARE NOT APPLICABLE TO THE PROJECT LIKE THIS IN VIEW OF THE IMMUNITY PROVIDED UNDER PROVISO TO CLAUSE (A) & (B) OF THE SAID SUB-SECTION 10. IT WAS DEMONSTRATED BEFORE US THAT THE CIT (A) EXAMINED THE SAID PROVISIONS READ WITH THE NOTIFICATION ISSUED BY THE CBDT IN THIS REGARD AND ALLOWED THE CLAIM OF THE ASSESSEE. 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE HE ARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE CIT (A)S ORDER, WE FIND THE CIT (A) HAS GIVEN THE FINDING CATEGORICALLY BY HOLDING THAT THE PROJECT IN QUESTI ON IS A SLUMP REHABILITATION PROJECT AND THE TIME LIMIT PROVIDED IN THE STATUTE WILL NOT BE APPL ICABLE TO THE ASSESSEE IN VIEW OF THE PROVISO TO SECTION 80IB(10). THE CONTENTS OF PARA 6.1 OF THE I MPUGNED ORDER ARE RELEVANT AND THE SAME READS AS UNDER: 6.1. THEREFORE, FROM THE PROVISO BELOW CLAUSE (B) OF SUB-SECTION 80IB(10), IT IS CLEAR THAT IF ANY PROJECT IS DECLARED WITHIN THE SCHEME FRAMED BY CENTRAL GOVERNMENT OR STATEMENT FROM SLUM REHABILITATION / REDEVELOPMENT, THEN REGO RS OF CLAUSE (A) AND CLAUSE (B) WILL NOT 6645/M/14-OMEGA INVESTMENT 3 APPLY TO SUCH PROJECTS. THERE IS NO DENIAL OF THE F ACT THAT THE PROJECT OF THE ASSESSEE HAS BEEN APPROVED AS SLUM REHABILITATION PROJECT BY SLU M REHABILITATION AUTHORITY OF MAHARAHTRA STATE AND THE APPROVAL HAS BEEN GIVEN ON 4.6.2004, THEREFORE, IT IS CLEARLY COVERED BY THE PROVISO BELOW CLAUSE (B) OF SUBSECTI ON 80IB(10), WHEREAS, ANY OTHER RESTRICTION FOR DATE OF START AND COMPLETION PUT BY ANY NOTIFICATION OR INSTRUCTION ETC CANNOT OVERRIDE THE ACT OF PARLIAMENT. HENCE, CONSI DERING ANY SUCH NOTIFICATION AND HOLDING SUCH PROJECT OUT OF THE APPLICABILITY OF TH E PROVISO BELOW CLAUSE (B) OF SUB-SECTION 80IB(10) BY THE AO IS NOT CORRECT. THE ASSESSEE HAS CORRECTLY RELIED ON THE DECISION OF THE HONBLE ITAT IN THE CASE OF ASHA KASHIPRASAD RINGSH IA (SUPRA), WHICH IS DIRECTLY ON THE SAME ISSUE AND RELEVANT PORTION AS REPRODUCED BY TH E ASSESSEE IN ITS SUBMISSIONS IS AGAIN REPRODUCED BELOW. THUS, RIGORS OF THE CONDITIONS ENUMERATED IN CLAU SES (A) AND (B) OF SECTION 80IB, HAS BEEN RELAXED BY THE RELAXED BY THE LEGISLATURE TO ACHIEV E CERTAIN SOCIO-ECONOMIC OBJECT AND, THEREFORE, PROVISO TO SECTION 80IB SHOULD BE GIVEN A LIBERAL INTERPRETATION SO AS TO NOT TO DEFEAT A GENUINE CLAIM FOR DEDUCTION BY A DEVELOPER WHO UNDERTAKES TO DEVELOP A HOUSING PROJECT IN A SLUM AREA UNDER THE SCHEME APPROVED BY THE CENTRAL OR STATE GOVT. THE CBDT WHICH HAD ISSUED THE NOTIFICATION AFTER MORE THAN F IVE YEARS OF THE AMENDMENT, HAS PUT A TIME LIMIT OF THOSE HOUSING PROJECTS WHICH HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON / OR AFTER 1 ST APRIL, 2004. SUCH A TIME LIMIT CAN DEFEA T THE BASIC PURPOSE OF THE PROVISO FOR WHICH IT WAS ENACTED AS IN THE SAID PROVISO, THE LIMIT PR OVIDED IN CLAUSE (A) OF SECTION 80IB(10) HAS 3 NOT BEEN SPECIFICALLY MADE APPLICABLE, THEREFORE, S UCH A TIME LIMIT CANNOT BE IMPOSED BY WAY OF SUBORDINATE LEGISLATION. SUCH NOTIFICATION CAN O NLY CLARIFY THE STATUTORY PROVISIONS AND NOT OVERRIDE THEM OR RESTRICT THE OPERATION OF THE MAIN ENACTMENT. THEREFORE, IN OUR CONSIDERED OPINION, THE TIME LIMIT OF APPROVAL ON / OR AFTER 1 ST APRIL, 2004 WILL NOT BE APPLICABLE IN THE CASE OF THE PROVISO TO SECTION 80IB(10). 6. CONSIDERING THE ABOVE, WE ARE OF THE OPINION TH AT THE CIT (A) HAS RIGHTLY ADJUDICATED THE ISSUE UNDER CONSIDERATION AND WE FIND NO INFIRMITY IN THE ORDER OF THE CIT (A). THEREFORE, THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISM ISSED. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL THE EFFECTIVE GROUND OF APPEAL IS DECIDED AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE AO IS DISMISSED ORDER PRONOUNCED IN THE OPE N COURT ON 30 TH MAY,2016. 30 , 2016 SD/- SD/- /JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 30.05.2016. JV.SR.PS. 6645/M/14-OMEGA INVESTMENT 4 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.