M/s Punjab State Cooperative Fed. of, Chandigarh V. ACIT, Chandigarh

ITA 749/CHANDI/2009

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6404 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 10-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N D GUPTA
• Section: 43B; 80IB

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 430/CHD/2009 / ASSESSMENT YEAR : 2004-05 M/S PUNJAB STATE COOPERATIVE FEDERATION OF HOUSE BUILDING SOCIETIES LTD., SCO 150-152, SECTOR 34- A,CHANDIGARH THE DCIT, CIRCLE 4(1), CHANDIGARH ./PAN NO: AAAAT0759L APPEAL AGAINST THE ORDER OF CIT(A) , CHANDIGARH DATED 26.2.2009 ./ ITA NO. 749/CHD/2009 / ASSESSMENT YEAR : 2005-06 M/S PUNJAB STATE COOPERATIVE FEDERATION OF HOUSE BUILDING SOCIETIES LTD., SCO 150-152, SECTOR 34- A,CHANDIGARH THE DCIT, CIRCLE 4(1), CHANDIGARH ./PAN NO: AAAAT0759L APPEAL AGAINST THE ORDER OF CIT(A), PATIALA DATED 09.04.2009 / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. ATUL GOYAL, CA ' ! / REVENUE BY : SH. N.D. GUPTA, SR DR # $ % /DATE OF HEARING : 19.12.2018 &'() % / DATE OF PRONOUNCEMENT : 09.01.2019 (*/ ORDER PER BENCH: THESE TWO APPEALS HAVE BEEN PREFERRED BY THE ASSES SEE AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), [HEREINAFTER REFERRED TO AS CIT(A)]. ITA NOS. 430 & 749/CHD/2009- M/S PUNJAB STATE COOPERATIVE FEDERATION OF HOUSIN G BUILDING SOCIETIES LTD, CHANDIGARH 2 2. FIRST, WE SHALL TAKE UP THE APPEAL OF THE ASSESS EE IN ITA NO. 430/CHD/2009 FOR ASSESSMENT YEAR 2004-05. ITA NO. 430/CHD/2009 3. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD B Y THE CIT(A) CHANDIGARH IS BAD IN LAW AND IS BEYOND ALL CANNONS OF LAW AND JUSTICE. 2. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD B Y THE CIT(A) CHANDIGARH HOLDING RS. 1380517/- AS INCOME FOR THE YEAR UNDER CONSIDERATION IS BAD IN LAW AND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND NEEDS T O BE SET ASIDE. 3. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD B Y THE CIT(A) CHANDIGARH NOT ALLOWING STATUTORY DEDUCTION U/S 80IB (10) AMOUNTING TO RS. 146601/- IN RESPECT OF LUDHIANA PROJECT AND RS. 231992/- IN RESPECT OF AM RITSAR PROJECT OUT OF RS. 13,80,517/- WHICH QUALIFY FOR DE DUCTION IS BAD IN LAW AND NEEDS TO BE SET ASIDE. 4. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD B Y THE CIT(A) CHANDIGARH NOT ALLOWING THE SET-OFF OF INCOM E AGAINST THE EXPENSES INCURRED BY THE APPELLANT BEIN G INCIDENTAL TO THE EARNING OF THE INCOME BEING IDENT ICAL TO THE EARNING OF THE INCOME BEING IN THE NATURE OF IS BAD IN LAW AND NEEDS TO BE SET ASIDE. 5. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD B Y THE CIT(A) CHANDIGARH IN NOT CONSIDERING THE INCOME OF RS. 1380517/- ON ACCOUNT OF INCOME FROM PROJECTS AS INC OME FROM BUSINESS OF THE APPELLANT MORE SO WHEN THE MA IN SOURCE OF INCOME OF THE APPELLANT IS FROM EARNING O F INTEREST ONLY IS BAD IN LAW AND NEEDS TO BE SET ASI DE. 6. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD B Y THE CIT(A) CHANDIGARH NOT CONSIDERING AND RS. 1210329/- BEING THE AMOUNT OF INTEREST EARNED FROM THE BANKS AS INCOME FROM THE BUSINESS OF THE APPELLANT MORE SO W HEN ITA NOS. 430 & 749/CHD/2009- M/S PUNJAB STATE COOPERATIVE FEDERATION OF HOUSIN G BUILDING SOCIETIES LTD, CHANDIGARH 3 THE MAIN SOURCE OF THE INCOME OF THE APPELLANT IS FROM EARNING OF INTEREST ONLY IS BAD IN LAW AN NEEDS TO BE SET ASIDE 7. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHELD B Y THE CIT(A) CHANDIGARH HOLDING THE GROSS INTEREST INCOME OF RS. 12,10,329/- AS INCOME FROM OTHER SOURCES WITHO UT SETTING OFF THE EXPENSES U/S 57 OF THE INCOME TAX A CT IS BAD IN LAW AND NEEDS TO BE SET ASIDE 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D ANY OF THE GROUNDS BEFORE THE FINAL HEARING OF THE APPE AL. 4. GROUND NOS.1 & 8 : G ROUND NOS.1 & 8 ARE GENERAL IN NATURE AND NEEDS NO SPECIFIC ADJUDICATION. 5. GROUND NOS. 2, 3 & 5: THE ISSUE RAISED IN THESE GROUNDS IS REGARDING THE ELIGIBILITY OF THE ASSESSEE TO CLAIM DEDUCTION U/S 80 IB(10) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') IN RESPECT OF HOUSING PROJECTS CONSTRUCTED BY THE ASSESSEE. THE LOWER AU THORITIES DENIED THE DEDUCTION TO THE ASSESSEE IN RESPECT OF DIFFERENT P ROJECTS HOLDING THAT THE SOME OF THE FLATS WERE HAVING RESIDENTIAL AREA EXCE EDING THE PRESCRIBED LIMIT OF 1500 SQUARE FEET. 6. THE LD. COUNSEL FOR THE ASSESSEE, BEFORE US, HAS SUBMITTED THAT THE LOWER AUTHORITIES HAVE FAILED TO PROPERTY CONSTRUE THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. HE HAS INVITED OUR ATTENTION T O SUB SECTION 14 OF SECTION 80IB(10) OF THE ACT AND HAS SUBMITTED THAT THE BUILT UP AREA OF A UNIT IS TO BE TAKEN BY EXCLUDING THE COMMON AREA SH ARED WITH OTHER RESIDENTIAL UNITS. THE CONTENTION OF THE LD. COUNSE L FOR THE ASSESSEE IS THAT IF THE COMMON AREA IS EXCLUDED THEN THE BUILT UP AR EAS OF THE FLAT REMAINS WITHIN THE PRESCRIBED LIMIT AND THE ASSESSEE, THUS, IS ELIGIBLE FOR DEDUCTION ITA NOS. 430 & 749/CHD/2009- M/S PUNJAB STATE COOPERATIVE FEDERATION OF HOUSIN G BUILDING SOCIETIES LTD, CHANDIGARH 4 U/S 80IB (10) OF THE ACT. THE ALTERNATIVE SUBMISSI ON OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THIS OBJECTION HAS BEEN RA ISED ONLY ABOUT ONE FLAT IN ONE PROPERTY AT LUDHIANA, WHEREAS, NO SUCH OBJEC TIONS REGARDING EXCESS BUILT UP AREA HAS BEEN RAISED BY THE ASSESSING OFF ICER IN RESPECT OF OTHER PROPERTIES. THAT THE ASSESSEE OTHERWISE IS ELIGI BLE TO CLAIM DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF THOSE PROPERTIES WHERE NO SUCH OBJECTION IS RAISED BY THE ASSESSING OFFICER. THE LD. COUNSE L, THEREFORE, HAS SUBMITTED THAT THE MATTER NEEDS TO BE RESTORED TO T HE FILE OF THE ASSESSING OFFICER FOR PROPER APPRECIATION OF THE FACTS ON THE FILE AND ALSO INSPECTION OF THE BUILT UP AREA, IF SO REQUIRED. 7. THE ANOTHER REASON FOR DENIAL OF CLAIM OF DEDUCT ION U/S 80IB (10) IS THAT THE ASSESSEE HAD NOT CLAIMED THE AFORESAID DE DUCTION IN THE RETURN FILED U/S 139(1) OF THE ACT . THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IN THIS RESPECT IS THAT IN FACT IN THE C OMPUTATION SHEET THE ASSESSEE HAD REDUCED /CALMED DEDUCTION ELIGIBLE U/S 80IB(10) OF THE ACT, BUT ADMITTEDLY THERE WAS NO SPECIFIC MENTION OF DE DUCTION SO CLAIMED. HOWEVER, THE CLAIM WAS VERY WELL PRESSED BEFORE TH E LD. ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). 8. THE LD. DR, ON THE OTHER HAND, HAS RELIED ON T HE FINDINGS OF THE LOWER AUTHORITIES. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. SO FA R AS THE OBJECTIONS REGARDING NON-CLAIM OF DEDUCTION IN THE RETURN OF I NCOME IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE HAS DEMONSTRATED THAT IN FACT IT HAS CLAIMED ITA NOS. 430 & 749/CHD/2009- M/S PUNJAB STATE COOPERATIVE FEDERATION OF HOUSIN G BUILDING SOCIETIES LTD, CHANDIGARH 5 DEDUCTION AND REDUCED THE ELIGIBLE AMOUNT FROM THE TAXABLE INCOME. HOWEVER, INADVERTENTLY IT WAS NOT MENTIONED AS SPEC IFIC DEDUCTION U/S 80IB (10) OF THE ACT. UNDER THE CIRCUMSTANCES, IT I S NOT A CASE WHERE THE ASSESSEE HAD GIVEN UP ITS CLAIM REGARDING DEDUCTION . MOREOVER, THE CLAIM OF DEDUCTION IS STATUTORILY AND LEGALLY ALLOWABLE TO THE ASSESSEE AND IT CAN ALSO BE CLAIMED AT APPELLATE STAGE IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER COMPANY LTD. VS. CIT 229 ITR 383 AND HON'BLE BOMBAY HIGH COURT IN CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD. (2012) 349 ITR 336 (BOM.). SO FAR AS THE CONTENTION OF THE ASSESSEE THAT LOWER AUTHORITIES HAVE FAILED TO PROPERLY APPRECIATE THE PROVISIONS OF SECTION 80 IB(10) OF THE ACT AND ALSO ABOUT THE ACTUAL BUILT AREA OF THE INDIVIDUAL FLAT ON THE SPOT, WE ARE OF THE VIEW, THAT THE MATTER IS REQUIRED TO BE RESTORE D TO THE ASSESSING OFFICER FOR PROPER VERIFICATION AND THEN TO PASS THE ORDER ON THIS ISSUE AS PER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT AND ACCOR DANCE WITH LAW. THESE GROUNDS OF APPEAL OF THE ASSESSEE ARE THERE TREATED AS ALLOWED IN THE ABOVE TERMS 10. GROUND NOS. 4, 6 & 7 : THE ISSUE RAISED VIDE THESE GROUNDS IS REGARDING TAXABILITY OF THE INTEREST INCOME FROM BA NKS EARNED BY THE ASSESSEE. THE PLEA OF THE ASSESSEE IS THAT THE EXPE NDITURE WHICH IS DIRECTLY RELATABLE TO THE EARNING OF THE AFORESAID INCOME IS REQUIRED TO BE DEDUCTED FOR THE PURPOSE OF COMPUTATION OF TAXABLE INCOME O F THE ASSESSEE UNDER THE THIS HEAD. THE ABOVE PLEA OF THE ASSESSEE IS QUITE REASONABLE AND WE HAVE NO HESITATION TO DIRECT THE ASSESSING OFFICER TO AL LOW THE CLAIM OF THE EXPENDITURE WHICH HAS DIRECT NEXUS WITH THE EARNING OF THE INTEREST INCOME ITA NOS. 430 & 749/CHD/2009- M/S PUNJAB STATE COOPERATIVE FEDERATION OF HOUSIN G BUILDING SOCIETIES LTD, CHANDIGARH 6 OF THE ASSESSEE. THESE GROUNDS OF THE APPEAL ARE AC CORDINGLY TREATED AS ALLOWED IN THE ABOVE TERMS. IN THE RESULT, THE APPEALS OF THE ASSESSEE IS TREAT ED AS ALLOWED. ITA NO. 749/CHD/2009 (A.Y. 2005-06) 11. THE LD . COUNSEL HAS STATED AT BAR THAT ALL THE ISSUES RAISE D IN THIS APPEAL ARE IDENTICAL TO THAT HAVE BEEN RAISED IN IT A NO.430/CHD/2009 AND THAT THE FINDINGS ARRIVED AT BY THIS TRIBUNAL WHILE ADJUDICATING THE AFORESAID APPEAL IN ITA NO.430/CHD/2009 IN RESPECT OF ALL THE ISSUES WILL MUTATIS-MUTANDIS APPLY TO THE ISSUES RAISED IN THE PRESENT APPEAL. 12. AS OBSERVED ABOVE, WE HAVE RESTORED ALL THE GRO UNDS TO THE FILE OF THE ASSESSING OFFICER WITH SPECIFIC DIRECTIONS AS N OTED ABOVE, FOLLOWING THE SIMILAR LINES, THE ISSUE RAISED IN GROUND NOS. 2 AND 4 IN THIS APPEAL ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER IN TE RMS OF DIRECTIONS GIVEN WHILE ADJUDICATING GROUND NOS. 2, 3 & 5 OF ITA NO. 430/CHD/2009, WHEREAS, THE GROUNDS NOS. 3 & 5 OF THIS APPEAL AR E RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH IDENTICAL DIRECTIONS AS GIVEN WHILE ADJUDICATING THE GROUND NOS. 4, 6 & 7 IN ITA NO.430/CHD/2009. 13. THE LD. COUNSEL HAS SUBMITTED THAT THERE IS ANO THER ISSUE IN THIS APPEAL RAISED VIDE GROUND NOS. 6 & 7 REGARDING DI SALLOWANCE MADE BY THE ASSESSING OFFICER U/S 43B OF THE INCOME TAX AC T. THE LD. COUNSEL HAS SUBMITTED THAT THE EMPLOYEES CONTRIBUTION TO THE P .F. WAS MADE BEFORE THE DUE DATE OF FILING OF THE RETURN. IN THE LIGHT OF THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT OF PUNJAB & HARYANA HIG H COURT IN CIT, ITA NOS. 430 & 749/CHD/2009- M/S PUNJAB STATE COOPERATIVE FEDERATION OF HOUSIN G BUILDING SOCIETIES LTD, CHANDIGARH 7 FARIDABAD VS M/S HEMLA EMBROIDERY MILLS (2014) 36 6 ITR 167, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE . GROUND NOS. 6 & 7 OF THE APPEAL ARE, THEREFORE, ALLOWED. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AND ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. SD/- SD/- ( $ % & '# / ANNAPURNA GUPTA) () / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 09.01.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR