ITO WD 2(2), THANE V. SWASTIK BUILDERS, MUMBAI

ITA 7372/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2781 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 10-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SATYA MOORTHY
• Assessee Lawyers: ADITYA AJGAOKAR
• Keywords: Wrong claim; Competent authority
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E B ENCH, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER / I .TA NO.7372/MUM/2014 ( / ASSESSMENT YEAR: 2010-11 THE ITO, WD 2(2), THANE, ROOM NO. 26, 6 TH FLOOR, ASHAR I.T. PARK, WAGLE INDUSTRIAL ESTATE, ROAD NO. 16Z, THANE (W)-400 604 / VS. M/S. SWASTIK BUILDERS, G-6, A-WING, HAMERMAL TOWER, STATION ROAD, BHAYANDER (W)-401 101 ./ ./ PAN/GIR NO.AALFM 0926G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI N. SATYA MOORTHY / RESPONDENT BY: SHRI ADITYA AJGAOKAR / DATE OF HEARING :12.07.2016 ! / DATE OF PRONOUNCEMENT :23.09.2016 / O R D E R PER C.N. PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE LD. CIT(A)-II, MUMBAI DATED 04.09.2014 PERTAINING TO AS SESSMENT YEAR 2010-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT{A) HAS ERRED IN DELETI NG AN AMOUNT ITA NO. 7372/M/2014 2 OF RS.1,07, 66,186/- BEING DISALLOWANCE MADE ON ACC OUNT OF WRONG CLAIM OF DEDUCTION U/S 80IB(10) OF THE I.T AC T, 1961'. 2. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT{A) HAS ERRED IN ALLOWING DEDUCT ION U/S 80IB(10) EVEN WHEN THE AREA OF THE PLOT ON WHICH TH E HOUSING PROJECT WAS DEVELOPED IS ONLY 3932 SQ. MTRS WHICH I S LESS THAN 1 ACRE. AS PER THE PROVISIONS OF THE ACT, THE AREA OF PLOT SHOULD BE AT LEAST 1 ACRE IN AREA. 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT{A) THANE ERRED IN ALLOWING THE CLAIM U/S 80IB(10) EVEN THOUGH THE COMMERCIAL AREAS OF 2406.7 0 SQ. FT. IN THE HOUSING PROJECT EXCEEDED 5% OR 2000 SQ. FT. OF THE BUILT-UP AREA WHICHEVER IS LESS. THIS IS A VIOLATION OF THE CRITERIA SPECIFIED UNDER THE PROVISIONS OF THE ACT'. 4. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT{A) ERRED IN ALLOWING DEDUCTION U/S. 80IB(10) EVEN WHEN THE PROJECT WAS NOT COMPLETED BEFORE 31/0 3/2008 AS PER THE PROVISIONS OF THE SECTION'. 5. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT{A) ERRED IN ALLOWING DEDUCTION U /S 80IB(10) DESPITE THE FACT THAT THE ASSESSEE HIMSELF HAS ADMI TTED IN HIS STATEMENT RECORDED UNDER OATH DURING THE COURSE OF SURVEY THAT HE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF TH E ACT'. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ISSUE IN APPEAL OF THE REVENUE HAS BEEN DECIDED IN ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR S 2009-10 AND 2008-09 IN ITA NOS. 4838 & 4837/M/2012 DATED 21.12. 2015 WHEREIN THE CO-ORDINATE BENCH DISMISSED THE APPEAL OF THE REVENUE BY AFFIRMING THE ORDER OF THE LD. CIT(A) IN ALLOWI NG ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10). COPY OF THE ORDER IS P LACED ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS TH AT GROUND NO. 2 OF THE GROUNDS OF APPEAL OF THE REVENUE REGARDING AREA OF THE PLOT HAS ITA NO. 7372/M/2014 3 BEEN DEALT WITH BY THE CO-ORDINATE BENCH IN PARA-12 OF THE ORDER. GROUND NO. 3 RAISED BY THE REVENUE REGARDING VIOLAT ION OF THE CRITERIA SPECIFIED UNDER THE PROVISIONS OF THE ACT HAS BEEN DEALT WITH IN PARA-13 OF THE TRIBUNALS ORDER. WITH RESPECT T O GROUND NO. 4 AND GROUND NO. 5 RAISED BY THE REVENUE IN ITS APPEAL, T HE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT BOTH THESE GROUNDS HAVE B EEN DEALT WITH BY THE TRIBUNAL IN PARA-14 & 15 OF THE TRIBUNALS ORDE R RESPECTIVELY. THEREFORE, HE PLEADS THAT THE ORDER OF THE CO-ORDIN ATE BENCH MAY BE FOLLOWED FOR THIS ASSESSMENT YEAR ALSO. 4. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED RELIA NCE ON THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND ALSO GONE THROUGH THE DECISIO N OF THE CO- ORDINATE BENCH IN ASSESSEES OWN CASE FOR THE EARLI ER ASSESSMENT YEARS AND WE FIND THAT THE ISSUE IS SQUARELY COVERE D BY THE SAID DECISION WHEREIN THE CO-ORDINATE BENCH EXHAUSTIVELY DEALT WITH THE ISSUE AND UPHOLD THE ORDER OF THE LD. CIT(A) IN ALL OWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 80IB(10) OF THE ACT BY OBSERVING AS UNDER: 11.WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS EVI DENT FROM THE FACTS ON RECORD THE ASSESSING OFFICER HAS DISAL LOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB(10) FOR FOLLOWING THREE REASONS: (I) AREA OF PLOT IS LESS THAN ONE ACRE; (II) COMMERCIAL AREA IS MORE THAN 5% OF BUILTUP AREA; AND ITA NO. 7372/M/2014 4 (III) ASSESSEE HAS NOT OBTAINED COMPLETION CERTIFICATE PRIOR TO 31 ST MARCH 2008. 12. AS FAR AS THE FIRST OBJECTION OF THE ASSESSING OFFI CER THAT LAND AREA OF THE PROJECT IS LESS THAN ONE ACRE , IT IS APPARENT AND OBVIOUS THAT THE ASSESSING OFFICER HAS CALCULATED THE AREA OF LAND AT 3,932 SQ.MTRS., AFTE R EXCLUDING ROAD SETBACK OF 342 SQ.MTRS. IN OUR VIEW , THE AFORESAID APPROACH OF THE ASSESSING OFFICER IS TOTA LLY UNACCEPTABLE. AS PER RECORDS, THE TOTAL AREA OF THE PROJECT, AS PER REVISED APPROVED PLAN IS 4460 SQ.MT RS INCLUDING THE AREA FOR ROAD SETBACK. THEREFORE, TH E ASSESSING OFFICER IS FACTUALLY INCORRECT IN CONCLUD ING THAT PLOT IS LESS THAN ONE ACRE. MOREOVER, ASSESSEES CONTENTION THAT ADDITIONAL FSI OF 342 SQ.MTRS. IF T AKEN INTO CONSIDERATION WOULD MAKE THE PLOT AREA 4,274 SQ.MTRS., WHICH IS MORE THAN ONE ACRE APPEARS TO BE CORRECT. AS THE DEPARTMENT HAS FAILED TO CONTROVERT THE AFORESAID FACTUAL POSITION WITH ANY DOCUMENTARY EVIDENCE, WE ARE UNABLE TO ACCEPT THE VIEW OF THE ASSESSING OFFICER, THEREFORE, THE FIRST OBJECTION O F THE ASSESSING OFFICER THAT THE AREA OF PLOT IS LESS THA N ONE ACRE IS NOT ACCEPTABLE. 13. AS FAR AS THE SECOND ALLEGATION OF THE DEPARTMENT THAT COMMERCIAL AREA IS LESS THAN 5% OF THE TOTAL B UILT UP AREA, THE SAME IS ALSO FOUND TO BE FACTUALLY INC ORRECT IN VIEW OF THE DOCUMENTARY EVIDENCE SUBMITTED BY TH E ASSESSEE NOT ONLY BEFORE THE DEPARTMENTAL AUTHORITI ES BUT AT THIS STAGE ALSO. IT IS NOT DISPUTED THAT IN COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSING OFFICER HAS SPECIFIC ALLY EXAMINED THIS ISSUE AND AFTER VERIFYING THE APPROVE D PLAN AND REVISED APPROVED PLAN, HAS FOUND THAT THE COMMERCIAL AREA IS LESS THAN 5% OF THE TOTAL BUILT UP AREA. THE SAME VIEW WAS AGAIN EXPRESSED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER PASSED UN DER SECTION 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2 006 07. THE DEPARTMENT HAS NOT CONTROVERTED THE AFORESA ID FACTUAL POSITION BY BRINGING ANY MATERIAL ON RECORD . IN VIEW OF THE AFORESAID, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) IN ACCEPTING ASSESSEES CLAIM OF DEDUCTION UNDER SECTI ON ITA NO. 7372/M/2014 5 80IB(10) AS THE ASSESSEE HAS FACTUALLY PROVED THAT COMMERCIAL AREA IS LESS THAN 5% OF THE TOTAL AREA O F PLOT. 14. AS FAR AS THE ALLEGATION OF THE DEPARTMENT THAT A PARTNER OF THE ASSESSEE FIRM HAS ACCEPTED THAT IT I S NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) ON GOI NG THROUGH THE STATEMENT OF THE PARTNER, RECORDED ON 3 1 ST JULY 2008, A COPY OF WHICH WAS SUBMITTED BEFORE US, WE DO NOT FIND THE ALLEGATION OF THE DEPARTMENTAL AUTH ORITIES TO BE CORRECT. ON THE CONTRARY, THE OBSERVATION OF THE LEARNED COMMISSIONER (APPEALS) IN PARA11.8 OF THE ORDER PASSED FOR ASSESSMENT YEAR 200809, IS CORREC T AS THE PARTNER HAS ONLY STATED THAT THE CLAIM OF DEDUC TION UNDER SECTION 80IB(10) IS NOT AVAILABLE ON THE ADDIT ION INCOME OFFERED BY THE FIRM. 15. AS FAR AS THE LAST ALLEGATION OF THE DEPARTMENT THAT COMPLETION CERTIFICATE OBTAINED BY THE ASSESSEE IS BEYOND 31 ST MARCH 2008, WE ARE OF THE VIEW THAT DEDUCTION UNDE R SECTION 80IB(10) CANNOT BE DENIED TO THE ASSESSEE ON SUCH PURELY TECHNICAL OBJECTION. MOREOVER, ON A PER USAL OF THE COMPLETION CERTIFICATE ISSUED BY MEERA BHYAN DER MUNICIPAL CORPORATION, WHICH IS SUBMITTED IN THE PA PER BOOK WITH ENGLISH TRANSLATED VERSION, IT IS VERY MU CH CLEAR THAT THE SAID CERTIFICATE CLEARLY MENTIONS TH AT THE ASSESSEE HAS APPLIED FOR COMPLETION CERTIFICATE NOT ONLY BEFORE 31 ST MARCH 2007 BUT THE PROJECT WAS COMPLETE IN ALL RESPECT BY 29 TH MARCH 2008. IN THIS FACTUAL BACKGROUND, MERELY BECAUSE THE CERTIFICATES WERE IS SUED BY MUNICIPAL AUTHORITIES IN MAY 2008, WOULD NOT DEP RIVE THE ASSESSEE FORM ENJOYING THE DEDUCTION UNDER SECT ION 80IB(10). MOREOVER, AS RIGHTLY SUBMITTED BY THE LEAR NED COUNSEL, THE PRINCIPLE LAID DOWN IN THE JUDICIAL PR ECEDENT IF TAKEN NOTE OF MAKE IT CLEAR THAT THE DATE OF GRA NT OF COMPLETION CERTIFICATE BY THE MUNICIPAL AUTHORITIES WOULD REVERT BACK TO THE DATE OF APPLICATION BY THE ASSES SEE. IF THE ASSESSEE HAD APPLIED BEFORE THE DUE DATE AND COMPLETION CERTIFICATE IS ISSUED BY THE COMPETENT AUTHORITY WITHOUT ANY CLARIFICATION THEN THE PROJEC T SHOULD BE DEEMED TO HAVE BEEN COMPLETED BEFORE THE DUE DAT E. IN THE FACTS OF THE PRESENT CASE, THERE IS NO DISPU TE OR DOUBT THAT THE MUNICIPAL AUTHORITIES HAVE ACCEPTED THAT PROJECT WAS COMPLETED BEFORE 31 ST MARCH 20008. HENCE, IN OUR VIEW, ASSESSEES CLAIM OF DEDUCTION UNDER SE CTION ITA NO. 7372/M/2014 6 80IB(10), CANNOT BE DENIED ON THE GROUND THAT IT HAS FAILED TO OBTAINED CERTIFICATE FROM THE COMPETENT AUTHORITY BEFORE THE DUE DATE I.E., 31 ST MARCH 2008. THEREFORE, ON OVER ALL CONSIDERATION OF FACTS AND M ATERIAL ON RECORD, WE ARE OF THE FIRM VIEW THAT LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN ALLOWING ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IB(10) . IN VIEW OF THE AFORESAID, WE UPHOLD THE ORDER OF THE L EARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAI SED BY THE DEPARTMENT FOR THE ASSESSMENT YEAR 200506. 16. THE FACTS AND ISSUE BEING SIMILAR IN ITA NO.4837/MUM./2012, FOR THE ASSESSMENT YEAR 200809 AND ITA NO.4838/MUM./2012 FOR ASSESSMENT YEAR 2009 10, FOLLOWING OUR ORDER OF THE ASSESSMENT YEAR 2005 06, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUNDS RAISED BY THE DEPARTMENT. RESPECTFULLY FOLLOWING THE SAID DECISION, WE UPHOL D THE ORDER OF THE LD. CIT(A) IN ALLOWING THE CLAIM OF DEDUCTION U /S. 80IB(10) FOR THE ASSESSMENT YEAR 2010-11 ALSO. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER, 2016. SD/- SD/- (RAJENDRA) (C.N. PRASAD ) ' / ACCOUNTANT MEMBER $ %' /JUDICIAL MEMBER MUMBAI; (' DATED 23 RD SEPTEMBER, 2016 . % . ./ RJ , SR. PS ITA NO. 7372/M/2014 7 !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ ,%%-. , -.! , / DR, ITAT, MUMBAI 6. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI