Shambhu Properties , Pune V. Income-tax Officer, Ward - 12(2), Pune

ITA 671/PUN/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9227 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-08-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 12-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VITTHAL BHOSALE
• Assessee Lawyers: B D BHIDE
• Section: 142(1); 143(2); 48; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / ITA NO . 671 /PUN/201 8 / ASSESSMENT YEAR : 20 14 - 15 SHAMBHU PROPERTIES, 218, SHANIWAR PETH, NEAR OMKARESHWAR TEMPLE, ABOVE RAJ VEG. RESTAURANT, PUNE 411030 PAN : ABBFS8039F ...... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 1 2 ( 2 ), PUNE / RESPONDENT ASSESSEE BY : SHRI B.D. BHIDE REVENUE BY : SHRI VITTHAL BHOSALE / DATE OF HEARING : 02 - 08 - 2021 / DATE OF PRONOUNCEMENT : 03 - 0 8 - 2021 / ORDER PER S.S. VISWANETHRA RAVI, JM : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 22 - 01 - 2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 13, PUNE [CIT(A)] FOR ASSESSMENT YEAR 20 14 - 15. 2 ITA NO .671/PUN/2018, A.Y. 2014 - 15 2. THE ONLY ISSUE IS TO BE DECIDED IS AS TO WHETHER THE CIT(A) JUSTIFIED IN DENYING DEDUCTION U/S. 80IB(1 0 ) OF THE ACT IN RESPECT OF SALE OF ONE FLAT IN B WING IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS AS EMANATING FROM THE RECORD ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROMOTERS, BUILDERS AND CONTRACTOR. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOT AL INCOME AT NIL. IN THE SCRUTINY ASSESSMENT PROCEEDINGS, THE AO ISSUED NOTICES U/S. 143(2) AND 142(1) OF THE ACT AND DETERMINED THE INCOME OF THE ASSESSEE AT RS.75,87,219/ - BY DENYING CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. THE CIT(A) BY PLACING RE LIANCE ON THE DECISION OF THIS TRIBUNAL HELD THE ASSESSEE IS ENTITLED TO PROPORTIONATE DEDUCTION U/S. 80IB(10) OF THE ACT TO A WING AND DENIED DEDUCTION TO B WING. HAVING AGGRIEVED FOR DENIAL OF DEDUCTION TO SALE OF ONE FLAT IN B WING, THE ASSESSEE IS BEFORE US. 4. HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE PUNE MUNICIPAL CORPORATION SANCTIONED BUILDING CONSTRUCTION FOR 48 FLATS IN A WING AND 20 FLATS IN B WING. THE ASSESSEE NAMED SAID PROJECT AS T WIN NEST CONSISTING OF ABOVE SAID A AND B WINGS WHICH ARE SEPARATE PROJECT S VIDE APPROVAL DATED 27 - 03 - 2006 BY THE PUNE MUNICIPAL CORPORATION. ACCORDING TO THE AO, THE SAID PROJECT REQUIRES TO BE COMPLETED WITHIN 5 YEARS FROM THE DATE OF APPROVAL I.E. ON OR BEFORE 31 - 03 - 2011 IN ORDER TO BE ELIGIBLE FOR CLAIMED U/S. 80IB(10) OF THE ACT. WE NOTE THAT THE PUNE MUNICIPAL CORPORATION ISSUED COMPLETION C ERTIFICATE PART - 1 IN RESPECT OF 47 FLATS IN A WING AND 16 FLATS IN B WING VIDE ORDER DATED 23 - 03 - 2011 WHICH IS ON RECORD AT PAGE NO. 132 OF THE PAPER BOOK. IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD FLAT NO. 904 IN 9 TH FLOOR 3 ITA NO .671/PUN/2018, A.Y. 2014 - 15 AND FLAT NO. 1001 IN 10 TH FLOOR IN A WING. FURTHER, THE ASSESSEE ALSO SOLD FLAT NO. 002 IN B WING. THE ASSESSEE CLAIMED PROPORTIONATE DEDUCTION AGAINST THESE THREE FLATS U/S. 80IB(10) OF THE ACT. ON PERUSAL OF THE COMPLETION CERTIFICATE PART - 1 AT PAGE NO. 132 OF THE PAPER BOOK, WE FIND THAT REGARDING THESE THREE FLATS , THE PUNE MUNICIPAL CORPORATION ISSUED COMPLETION CERTIFICATE IN 2011. THE LD. AR, SHRI B.D. BHIDE SUBMITS THAT THE ASSESSEE EARNED PROFIT ON THE SALE OF ABOVE SAID THREE FLATS AND ARE COVERED BY THE COMPLETION CERTIFICATE PART - 1 ISSUED BY THE PUNE MUNICIPAL CORPORATION, WI THOUT CONSIDERING THE SAME, THE AO DENIED DEDUCTION U/S. 80IB(10) OF THE ACT BY HOLDING THE ASSESSEE HAS NOT SATISFIED THE CONDITION LAID DOWN U/S. 80IB(10)(A) OF THE ACT AND DENIED DEDUCTION CONCERNING THE ABOVE SAID THREE FLATS. HE FURTHER SUBMITS THAT THE CIT(A) IN PRINCIPLE AGREED THAT THE ASSESSEE IS ENTITLED TO PROPORTIONATE DEDUCTION CONCERNING THE SALE OF FLATS IN THE YEAR UNDER CONSIDERATION AND ALLOWED DEDUCTION TO A WING , BUT DENIED SUCH ALLOWANCE TO B WING. THE LD. DR, SHRI VITTHAL BHOSALE RELIED ON THE ORDER OF AO AND ARGUED THE PROVISIONS U/S. 80IB(10) OF THE ACT EXPLAINS , THE DEDUCTION IS AVAILABLE, IF THE HOUSING PROJECT IS COMPLETED WITHIN 5 YEARS FROM THE DATE OF SANCTION OF APPROVAL FOR PROJECT CONSTRUCTION. THE ASSESSEE DID NOT SAT ISF Y THE CONDITION AS CONTEMPLATED UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. WE NOTE THAT THE CIT(A) HELD THE PROJECT IN B WING IS INCOMPLETE AND DENIED DEDUCTION IN RESPECT OF PROFITS EARNED ON FLAT NO. 002 IN B WING. ON PERUSAL OF THE CO MPLET ION CERTIFICATE PART - 1 WHICH CLEARLY SHOWS THE COMPLETION CERTIFICATE ISSUED FOR FLAT NO. 002 IN B WING AND THERE IS NO DISPUTE REGARDING THIS BY BRINGING CONTRARY EVIDENCE TO THAT EFFECT. THEREFORE, IN OUR OPINION, THE ASSESSEE IS ENTITLED TO CLAI M DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF SALE PROCEEDS OF FLAT NO. 002 IN B WING. 4 ITA NO .671/PUN/2018, A.Y. 2014 - 15 5. FURTHER, THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2012 - 13 ON SIMILAR IDENTICAL FACTS HELD THE ASSESSEE IS ENTITLED TO PROPORTIONATE DEDUCTION CONCERNING SALE OF ANOTHER FLAT IN B WING VIDE ORDER DATED 17 - 03 - 2019 WHICH IS AT PAGE NO. 210 OF THE PAPER BOOK. ON PERUSAL OF THE PARA NO. 4 OF THE SAID ORDER, WE NOTE THAT THE TRIBUNAL ALLOWED PRO - RATA DEDUCTION IN RESPECT OF SALE OF FLAT THEREIN BY PLACING RELIANCE IN THE CASE OF PADMAV ATI DEVELOPERS IN ITA NOS. 1691 & 1692/PN/2012. WE FIND THIS TRIBUNAL IN TURN PLACED RELIANCE ON THE DECISION OF HONBLE HIGH COURT OF MADRAS IN THE CASE OF VISWAS PROMOTERS PRIVATE LIMITED REPORTED IN 255 CTR 149 (MAD.) WHICH HELD PRO - RATA DEDUCTION IN R ESPECT OF ELIGIBLE UNITS WITHIN A COMPOSITE HOUSING PROJECT IS ALLOWABLE . WE NOTE THAT, AS DISCUSSED ABOVE THE HOUSING PROJECT UNDERTAKEN BY THE ASSESSEE , CONSISTS OF A AND B WINGS TOTAL ING TO 48 AND 20 FLATS, RESPECTIVELY. IN THE YEAR UNDER CONSIDER ATION, THE ASSESSEE CLAIMED DEDUCTION IN RESPECT OF TWO FLATS IN A WING AND ONE FLAT IN B WING. THEREFORE, WE FIND FORCE IN THE ARGUMENTS OF LD. AR THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION IN RESPECT OF FLAT NOS. 904 AND 1 001 IN A WING AND 002 IN B WING WHICH ARE COVERED BY THE COMPLETION CERTIFICATE PART - 1 ISSUED BY THE COMPETE AUTHORITY MUNICIPAL CORPORATION OF PUNE. THE LD. DR DID NOT BRING ON RECORD ANY EVIDENCE SHOWING THESE FLATS ARE NOT COVERED BY THE PART - 1 COMPLETION CERTIFICATE ISSUED BY THE PUNE MUNICIPAL CORPORATION VIDE ORDER DATED 23 - 03 - 2011. THUS, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S. 80IB(10) OF THE ACT AGAINST THE FLAT NOS. 904, 1 0 01 AND 002 IN A AND B WINGS, RESPECTIVELY AS ELIGIBLE UNITS IN TERMS O F ORDER OF PROPORTIONATE DEDUCTION AS LAID DOWN BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2012 - 13. THUS, THE ORDER OF CIT(A) IS NOT JUSTIFIED AND SOLE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 5 ITA NO .671/PUN/2018, A.Y. 2014 - 15 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD AUGUST, 202 1 . SD/ - SD/ - ( R.S. SYAL ) ( S.S. VISWANETHRA RAVI ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 03 RD AUGUST, 202 1 . RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A) - 1 3 , PUNE 4. THE PR. CIT - 4 , PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE