ITO WD 1(3), MUMBAI V. CHANDRASHEKHAR GUPTA (HUF), THANE

ITA 7061/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9081 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: LALIT M JAIN

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . . !'# , $ %& BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI N.K. BILLAIYA, AM ./I.T.A. NO.7061/MUM/2010 ( ' ' ' ' / ASSESSMENT YEAR : 2007-08 THE ITO, WARD 1(3), VARDAAN BLDG., MIDC, WIE, THANE (W)-400 601 / VS. CHANDRASHEKHAR GUPTA (HUF) MATRU PITRU NIEWAS, SHREE RENUKA HARIDA, OPP. GOLDEN DYES, LBS MARG, THANE(W) &( $ ./ )* ./PAN/GIR NO. AAAHG 5669P ( (+ /APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY: SHRI RAJARSHI DWIVEDY ,-(+ / . / RESPONDENT BY SHRI LALIT M. JAIN / 01$ / DATE OF HEARING : 19..12.2012 23' / 01$ /DATE OF PRONOUNCEMENT :21.12.2012 %4 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-II, THANE DT.30.7.2010 PERTAINING TO A.Y. 20 07-08. 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE L D. CIT(A) ERRED IN NOT ALLOWING PROPORTIONATE DEDUCTION U/S. 80IB(10) OF THE ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT DU RING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS. 19,82,287/- U/S. 80IB(10) OF THE I.T. ACT. ON ITA NO. 7061/MUM/2010 2 FURTHER SCRUTINY, THE AO OBSERVED THAT DURING THE Y EAR UNDER CONSIDERATION, THE ASSESSEE HAS CONSTRUCTED HOUSING PROJECT HAVING TWO BUILDINGS AT VILLAGE KAMATGHAR IN BHIWANDI TALUKA A ND DECLARED A TOTAL TURNOVER OF RS. 44,99,100/- ON WHICH NET PROFIT WA S DECLARED AT RS. 19,82,284/- ON WHICH 100% DEDUCTION HAS BEEN CLAIM ED U/S. 80IB(10) OF THE ACT. ON FURTHER SCRUTINY, THE AO FOUND THAT OU T OF THE TWO BUILDING CONSTRUCTED, IN ONE OF THE BUILDINGS, 23 FLATS ARE HAVING BUILT UP AREA OF MORE THAN 1000 SQ.FT I.E. THE FLATS WERE OF THE SIZ E OF 1168 SQ.FT. THE AO WAS OF THE OPINION THAT THE ASSESSEE HAS VIOLATED T HE PROVISIONS OF CLAUSE (C) OF SECTION 80IB(10) AND THEREFORE NOT ELIGIBLE FOR DEDUCTION UNDER THE SAID SECTION. 3.1. THE ASSESSEE CLAIMED THAT THE PROJECT IS SITU ATED AT A DISTANCE OF 26 K.MS. FROM MULUND OCTROI NAKA AND THEREFORE THE ASS ESSEE IS ALLOWED BUILT UP AREA OF 1500 SQ.FT AS PER THE PROVISIONS O F SECTION 80IB(10) AND THEREFORE THE CLAIM OF THE ASSESSEE IS CORRECT. HOW EVER, THE AO REJECTED THE SUBMISSIONS OF THE ASSESSEE STATING THAT IF THE ROAD DISTANCE IS MEASURED FROM MULUND TOLL NAKA TO THE ASSESSEES P ROJECT VIA PURNA, ANJUR PHATA ROAD, THE TOTAL DISTANCE COMES TO 18 K. MS. AND THEREFORE BUILT UP AREA OF 1000 SQ. FT WILL APPLY. WITHOUT PREJUD ICE, THE ASSESSEE SUBMITTED THAT PROPORTIONATE DEDUCTION ON THE RESI DENTIAL UNITS WHERE THE BUILT UP AREA IS BELOW THE SIZE OF 1000 SQ.FT SHOUL D BE ALLOWED. THE ASSESSEE RELIED UPON THE DECISION OF THE TRIBUNAL I N THE CASE OF SAROJ SALES CORPN. (115 TTH. 485) AND ALSO ON THE DECISIO N OF THE KOLKATTA HIGH COURT IN THE CASE OF BENGAL HOUSING DEVELOPMEN T LTD IN ITA NO. 453 OF 2006. HOWEVER, THE SUBMISSIONS OF THE ASSES SEE WAS REJECTED BY THE AO WHO WENT ON TO DISALLOW THE ENTIRE CLAIM OF THE ASSESSEE U/S. 80IB(10) AT RS. 19,82,284/-. ITA NO. 7061/MUM/2010 3 4. THE ASSESSEE AGITATED THE MATTER BEFORE THE LD. CIT(A) THOUGH COULD NOT CONVINCE THE CIT(A) SO FAR AS APPLICABILI TY OF THE BUILT UP AREA OF 1500 SQ.FT ON ITS PROJECTS. HOWEVER, THE ASSESS EE CONVINCED THE LD. CIT(A) THAT IT IS ELIGIBLE FOR PROPORTIONATE DEDUCT ION IN THE LIGHT OF THE DECISION OF THE TRIBUNAL IN THE CASE OF SAROJ SALE S CORPN. (SUPRA) AND ALSO IN THE CASE OF ACIT VS SHETH DEVELOPERS (P) LT D. 33 SOT 277. THE LD. CIT(A) ALLOWED THE PROPORTIONATE DEDUCTION IN T HE LIGHT OF THE DECISION OF THE TRIBUNAL. 5. AGGRIEVED BY THIS FINDING OF LD. CIT(A), REVENUE IS BEFORE US. THE FACTS OF THE PRESENT CASE ARE SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF ACIT VS SHETH DEVELOPERS (P ) LTD. (SUPRA) WHEREIN THE TRIBUNAL HAS HELD AS UNDER: THUS, WITHOUT DOUBT, BY THE ASSESSEES OWN ADMISSI ON, AT LEST IN A FEW CASES THE BUILT-UP AREA EXCEEDED 1000 SQ. FT. NOW THE QUESTION WAS WHETHER THE BENEFIT OF SECTION 80-IB(1 0) COULD BE GIVEN TO A PROJECT EVEN WHERE SOME OF THE UNITS EXC EEDED 1000 SQ.FT. OF BUILT-UP AREA. AS AFORESAID, THE ASSESSEE WAS DENIED DEDUCTION U/S. 80-1B(10) ONLY FOR A REASON THAT IT FAILED THE TEST OF LIMIT OF 1000 SQ.FT. HOWEVER, THE KOLKATA, BANGLORE AND NAGPUR BENCHES OF THE TRIBUNAL HAD CLEARLY HELD THAT EVEN WHERE SOME OF THE UNITS EXCEEDED THE AREA LIMIT, RELIEF HAD TO BE GIVE OR PRORATE BASIS. FOLLOWING THESE, THE ASSESSEE WAS ELIGIBLE F OR RE1IEF ON A PRORATE BASIS IN RESPECT OF THE FLATS WHICH DID NOT BUILT-UP AREA EXCEEDING 1000 SQ. FT. IN RESPECT OF AISHWARYA PROJ ECT. THUS, THE QUANTUM OF DEDUCTION U/S. 80-LB(10) IN RESPECT OF T HE AISHWARYA PROJECT FOR THE FLATS WHICH HAD BUILT UP AREA LESS THAN 1000 SQ. FT. HAD TO BE WORKOUT ON A PRORATE BASIS IN LINE WITH D ISCUSSION IN THE PRECEDING PARAS. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNA L, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE AO. THE AO IS DIRECT ED TO CALCULATE THE DEDUCTION U/S. 80IB(10) ON PRO-RATA BASIS IN RESPEC T OF THE FLATS WHICH DO NOT HAVE THE BUILT UP AREA EXCEEDING 1000 SQ. FT IN THE HOUSING PROJECT OF THE ASSESSEE AND DEDUCTION SHOULD BE ALLOWED ON SUC H RESIDENTIAL UNIT. IN ITA NO. 7061/MUM/2010 4 OTHER WORDS, ALL THE RESIDENTIAL UNITS WHICH HAVE A BUILT UP AREA OF LESS THAN 1000 SQ .FT, THE ASSESSEE IS ENTITLED FOR THE BENEFIT OF DEDUCTION U/S. 80IB(10) OF THE ACT AS THE SAME VIEW HAVE BEEN TAKE N BY THE LD. CIT(A). WE CONFIRM THE FINDING OF THE LD. CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.12.2012 %4 / 3' $ 5 6%7 21.12.2012 3 / 8 SD/- SD/- (H.L. KARWA) (N.K. BILLAIYA) /PRESIDENT $ %& / ACCOUNTANT MEMBER MUMBAI; 6% DATED 2112.2012 . . ./ RJ , SR. PS %4 / ,0 9 '0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. : ( ) / THE CIT(A)- 4. : / CIT 5. ;8 ,0 , , / DR, ITAT, MUMBAI 6. 8< = / GUARD FILE. %4 / BY ORDER, - 0 ,0 //TRUE COPY// > / ? ) DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI