DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, Jaipur V. SHRI PREM KUMAR SANGHI, Jaipur

ITA 791/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1988 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 01-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Assessee Lawyers: S R SHARMA C A DHK
• Keywords: Rule of consistency; Commercial expediency
• Section: 45(2); 80IB; 6

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 791/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. THE DCIT, CIRCLE-2, JAIPUR. CUKE VS. SHRI PREM SA NGH I , 137, M.I. ROAD, PANCH BATTI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGWPS 9875 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.R. SHARMA (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.03.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 22/03.2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 8 TH AUGUST, 2017 OF LD. CIT (A)-I, JAIPUR FOR THE ASSESSMENT YEAR 2013-14. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) HAD ERRED IN DELETING THE EN TIRE ADDITION OF RS. 1,24,76,026/- ON ACCOUNT OF DISALLOWANCE OF DED UCTION U/S 80IB(10) OF THE ACT ? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) HAD ERRED IN ALLOWING DEDUCT ION U/S 80IB(10) EVEN AFTER THE BASIC CONDITION FOR AVAILIN G THE DEDUCTION WERE NOT FULFILLED BY THE ASSESSEE ? THE APPELLANT CRAVES THE RIGHT TO AMEND ALTER OR AD D TO ANY OF THE GROUNDS OF APPEAL GIVEN ABOVE. 2 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS APP EAL IS THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) DISALLOWED BY THE AO WAS ALL OWED BY THE LD. CIT (A). 3. WE HAVE HEARD THE LD. D/R AS WELL AS THE LD. A/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE GOT INDUSTRIAL LA ND MEASURING 1,37,973.25 SQ. FT. VIDE PARTITION DEED DATED 12 TH AUGUST, 2004. THEREAFTER, THE ASSESSEE APPLIED TO JDA FOR CONVERSION OF LAND FROM INDUSTRIAL TO RESID ENTIAL USE AND CONSEQUENTLY THE JDA VIDE LEASE DEED DATED 2 ND JUNE, 2005 CONVERTED THE LAND FOR RESIDENTIAL USE. THE ASSESSEE THEN ENTERED INTO A DEVELOPMENT AGREEM ENT DATED 30 TH JUNE, 2005 WITH M/S. UNIQUE BUILDERS & DEVELOPERS (REALTY) FOR CONSTRUCTION OF HOUSING PROJECT ON THE SAID PLOT OF LAND. AS PER THE DEVELOPMENT A GREEMENT, THE ASSESSEE WAS TO RECEIVE 46% OF THE BUILT UP AREA AND THE BALANCE 54 % SHARE WOULD GO TO THE BUILDER ALONG WITH THE LAND UNDERNEATH. THE HOUSING PROJEC T WAS APPROVED BY THE JDA ON 30.08.2005. ON SALE OF THE FLATS, THE ASSESSEE CLA IMED DEDUCTION UNDER SECTION 80IB(10) WHICH WAS DENIED BY THE AO ON TWO GROUNDS WHICH ARE (I) THE ASSESSEE IS NOT A DEVELOPER BUT ONLY A LAND OWNER ; AND (II) TH E PROJECT WAS NOT COMPLETED WITHIN THE STIPULATED TIME PERIOD. ON APPEAL, THE LD. CIT (A) ALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10) BY FOLLOWING THE ORDER OF TH IS TRIBUNAL FOR THE EARLIER ASSESSMENT YEAR IN ASSESSEES OWN CASE. 3.1. AT THE OUTSET, WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2009-10 TO 2011-12 VIDE ORDER DATED 4 TH DECEMBER, 2015 AND FURTHER FOR THE ASSESSMENT YEAR 2012-13 VIDE ORDER DATED 21 ST OCTOBER, 2016. ON FURTHER APPEAL BY THE DEPARTMEN T AGAINST THE ORDER OF THE TRIBUNAL DATED 4 TH DECEMBER, 2015 FOR THE ASSESSMENT YEARS 2009-10 TO 2011-12, THE HONBLE JURISDICTIONAL HIGH COURT HAS UPHELD THE DECISION OF THE 3 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR. TRIBUNAL VIDE JUDGMENT DATED 19 TH JULY, 2017 IN DBIT APPEAL NO. 146/2017 AND 114/2016 WHEREIN THE HONBLE HIGH COURT HAS HELD IN PARA 4-7 AS UNDER :- 4. HOWEVER, IN VIEW OF THE OBSERVATIONS MADE BY CI T(A) IN PARA 3.1.2 OBSERVING AS UNDER: 3.1.2 DETERMINATION (I) I HAVE CAREFULLY PERUSED THE SUBMISSIONS OF TH E APPELLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECOR D. THE AO HAS DISALLOWED THE DEDUCTION CLAIMED BY THE APPELLA NT U/S 80IB(10) OF THE ACT ON ACCOUNT OF THE FOLLOWING REASONS: THE APPELLANT WAS JUST THE OWNER OF THE LAND AND HE WAS NOT A DEVELOPER. THE HOUSING PROJECT WAS NOT COMPLETED B Y 31.03.2011. THE APPELLANT VIOLATED THE PROVISIONS OF CLAUSE (E) AND (F) OF SECTION 80IB(10) OF THE ACT. (II) IT WOULD BE APPROPRIATE TO MENTION HERE THAT T HE AO DID NOT ALLOW THE DEDUCTION CLAIMED BY THE APPELL ANT U/S 80IB(10) OF THE ACT FOR THE AY 2010-11 AND 2011-12 ON THE SIMIL AR GROUND AND THE LD. CIT(A) VIDE HIS ORDER DATED 19.09.2014 IN ITA N O.427/13-14 AND 443/13-14 FOR THE AY 2010-11 AND 2011-12 DID NO T AGREE WITH THE AO AND ALLOWED DEDUCTION U/S 80IB(10) OF THE ACT, AND THE LD. CIT(A) FOLLOWED THE ORDER O F HIS PREDECESSOR IN RESPECT FO FIRST TWO GROUNDS I.E. THE APPELLANT WAS JUST THE OWNER AND NOT THE DEVELOPER AND THE PROJECT W AS NOT COMPLETED WITHIN THE STIPULATED TIME WHICH WERE DECID ED BY LD. CIT(A) VIDE ORDER DATED 01.02.2013 FOR THE AY 2 009-10 IN ITA NO.349/11-12, WHEREIN THE DEDUCTION WAS ALLO WED TO THE APPELLANT. REGARDING THE THIRD GROUND I.E. THE APPE LLANT HAS NOT COMPLIED WITH THE PROVISIONS OF CLAUSE (E) AND (F) OF SECTION 80IB(10), IT WAS HELD BY THE LD. CIT(A) FOR THE AY 2010-11 AND 2011- 12 THAT THESE CLAUSES WERE BROUGHT ON T HE STATUTE W.E.F. 01.04.2010 AND A PERUSAL OF THE DETAILS HAS SHOWN THAT THE FLATS UNDER CONSIDERATION WERE ALLOTTED BEFORE TH IS PROVISION CAME INTO FORCE. THEREFORE, HE ALLOWED THE DEDUCTION U /S 80IB(10) OF THE ACT. (III) IT IS NOTED FROM THE ASSESSMENT ORDER THAT IT HAS BEEN OBSERVED BY THE AO THAT DURING THE YEAR UNDER CONSI DERATION, THE 4 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR. APPELLANT SOLD TWO FLATS I.E. 824 AND 924 ON 01.04.2011 TO SMT. NEENA RATHI AND THUS VIOLATED THE PROVISIONS OF C LAUSE (E) AND (F) OF SECTION 80IB(10) OF THE IT ACT WHICH ARE APPLICABLE FROM 19.08.2009 IN VIEW OF EXPLANATORY NOTES TO THE PROV ISIONS OF THE FINANCE (NO. 2) ACT 2009 DATED 03.06.2010 CIRCULATE D BY CBDT CIRCULAR NO. 5/2010. (IV) DURING APPELLATE PROCEEDINGS, IT WAS SUBMITTED BY THE APPELLANT THAT THE SALE DEEDS REGISTERED IN FAVOUR OF SMT. N EETA RATHI ON 01.04.2011 WERE IN PURSUANCE TO AGREEMENT TO SELL DATED 14.07.2009 IN THE NAME OF NARENDRA KUMAR RATHI WHO ASSIGNED HI S RIGHTS IN FAVOUR OF NEETA RATHI, HIS RELATIVE. THUS THE ALLOTMENT OF THESE FLATS WERE ALSO BEFORE 1-4-2010. THE APPELLANT ALSO PRODUCE D COPIES OF THE AGREEMENT TO SELL DATED 14.07.2009 WHICH REVEALED T HAT THE FLATS NO. 824 AND 924 WERE ALLOTTED TO SHRI NARENDRA KUMAR RA THI ON 14.07.2009 WHO ASSIGNED THESE FLATS TO SMT. NEENA R ATHI ON 28.03.2011. IN VIEW OF THE ABOVE, IT IS HELD THAT THERE WAS NO VIOLATION OF PROVISIONS OF CLAUSE (E) AND CLAUSE (F) OF SECTIO 80IB(10) OF THE ACT IN RESPECT OF FLATS NO. 824 AND 924 WHICH WERE ALLOTTED BY THE APPELLANT ON 14.07.2009 I.E. WELL BEFORE THE DATE 01.04.2010, THE SAID CLAUSES WERE BROUGHT ON THE ST ATUTE. (V) DURING THE APPELLATE PROCEEDINGS, THE AR SUBMITTED A COPY OF THE ORDER DATED 04.12.2015 OF HONBLE ITAT, JAIP UR IN THE CASE OF THE APPELLANT FOR THE AY 2009-10, 2010-11 AND 2011- 12 WHEREIN THE HONBLE ITAT ALLOWED DEDUCTION U/S 80IB TO THE APPELLANT FOR ALL THE THREE YEARS. (VI) THEREFORE, IN VIEW OF THE ABOVE AND RESPECTFUL LY FOLLOWING THE DECISION OF HONBLE ITAT, JAIPUR IN CASE OF THE APP ELLANT, AS REFERRED ABOVE AND IN VIEW OF THE PRINCIPLE OF CONSISTENCY, IT IS HELD THAT THE AO WAS NOT JUSTIFIED IN DISALLOWING DEDUCTION CLAIMED BY THE APPELLANT U/S 80IB(10) OF THE ACT AND HENCE THE AO IS DIRECTED TO ALLOW THE DEDUCTION CLAIMED BY THE APPELLANT U/S 80IB(10) OF THE ACT. 5. THE OBSERVATIONS OF TRIBUNAL IN PARA 4.1 & 4.2 HOLDING AS UNDER: 4.1 ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSION AND AT THE OUTSET SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE C OORDINATE BENCH IN ASSESSEES OWN CASE PERTAINING TO A.YS 2009-10, 2010-11 AND 2011-12 IN ITA NOS. 448/JP/2013, 782/ JP/2014 AND 783/JP/2014. THE LD. COUNSEL SUBMITTED THAT I DENTICAL GROUNDS WERE RAISED BY THE REVENUE IN THESE ASSESSMENT YEAR S WHICH HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE. 5 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR. 4.2 WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE REVENUE IN ASSESSMENT YEAR 2009-10 HAS RAISED THE IDENTICAL GROUNDS AS REPRODUCED BY THE COORDINATE BENCH IN ITA NO. 448/JP/2013 AS UNDER:- I. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN AL LOWING DEDUCTION/S 80IB TO THE ASSESSEE WHO ENTERED INTO A DEV ELOPMENT AGREEMENT AS THE LAND OWNER AND HAS NOT UNDERTOOK D EVELOPMENT & CONSTRUCTION OF THE HOUSING PROJECT. II. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE DEDUCTION U/S 80IB IS ALLOWA BLE ONLY TO AN UNDERTAKING INVOLVED IN THE BUSINESS OF D EVELOPING AND BUILDING HOUSING PROJECTS AND NOT TO AN INDIVIDUA L WHO ENTERED INTO A DEVELOPMENT AGREEMENT AS THE OWNER OF THE LAND. III. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN AL LOWING DEDUCTION U/S 80IB TO THE ASSESSEE WHEN THE COMPLETION CERTIFICATE OF THE PROJECT WAS NOT FURNISHED BY ASSESSEE AS REQUIRED IN CLAU SE (II) OF EXPLANATION BELOW SECTION 80IB(10)(A) OF THE ACT. WE FIND THAT THE COORDINATE BENCH AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS DECIDED THE ISSUE AS UNDER:- 4.9 WE HAVE HEARD THE RIVAL CONTENTION S AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS THE FACT S EMERGE, THE ASSESSEE UNDERTOOK VARIOUS ACTIVITIES FROM INCE PTION OVER A LONG PERIOD OF TIME WHICH INCLUDED:- I. UNDERTAKING THE OMPREHENSIVE AND FUNDA MENTAL TEDIOUS PROCESS OF GETTING THE LAND CONVERTED F OR RESIDENTIAL USE FROM COMPETENT AUTHORITIES AND OBTAINING PATT A FROM JDA FOR ITS RESIDENTIAL USE; II. COORDINATION, COMPLIANCE AND MEETING THE LENGTHY QUERIES ABOUT SANCTION OF PLAN FOR DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT ON THE IMPUGNED LAND FROM L OCAL AUTHORITY WHICH IS UNDISPUTEDLY CARRIED OVER BY ASSESSEE OV ER A PERIOD OF TIME. THESE ACTIVITIES ARE FUNDAMENTAL AND CRUCIAL FOR DEVELOPMENT OF HOUSING PROJECT. THERE IS NO DISPUTE ON THE SE GLARING FACTS. III. MAKING THE IMPUGNED LAND USABLE FO R THE PURPOSE THE PERMISSION OF DEVELOPMENT OF HOUSING CONSTRUCTION BY PROVIDING PROPER ROAD AND EASY APPROACH TO THE SI TE WHICH IS 6 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR. PRECONDITION FOR SANCTION OF PLAN. THIS WORK HAS BEEN DONE BY THE ASSESSEE. IV. ASSESSEE HAD NOT TRANSFERRED THE LA ND TO M/S UDB (REALITY) AND AS PER AGREEMENT RETAINED THE RIGHTS OF JOINTLY SUPERVISING THE DEVELOPMENT AND CONSTRUCTION OF THE IMPUGNED HOUSING PROJECT. V. THE ASSESSEE APART FROM THE SAID R IGHTS OF SUPERVISION RETAINING THE RIGHTS OF TRANSFERRING THE FLAT S FALLING IN HIS SHARE IN THE NAME OF PROSPECTIVE PURCHASERS. SINCE THE PROJECT WAS BIG, IT FALLS W ELL WITHIN THE COMMERCIAL EXPEDIENCY THAT THE PROJECT IS JOINTLY DEVELOPED. THEREFORE, ASSESSEES ENDEAVOR OF MAKING A JOINT VENTURE WITH M/S UDB (REALITY) CANNOT BE LOOKED AT WI TH SUSPICION. IT IS SETTLED LAW THAT THE REVENUE AUTHORITIES SHOULD NOT STEP INTO THE SHOES OF A BUSINESSMAN AND DECIDE ON THEIR OWN PERCEPTION WHAT, WHEN AND HOW A BUSINESSMAN SHOULD CONDUCT H IS BUSINESS. BE THAT AS IT MAY, THE JOINT DEVELOPMENT AGREEMENT HAS NOT BEEN DOUBTED BY LD. AO. THE IMPRESSION CARRIED BY LD. AO IS TO T HE EFFECT THAT ASSESSEE HAS MERELY TRANSFERRED HIS LAND AND THE INCOME DERIVED FROM SALE OF FLATS IS NOT ELIGIBLE FOR DE DUCTION U/S 80IB. BESIDES THE CASE OF RADHEY DEVELOPERS (SUPRA) IS RELIED TO DISENTITLE THE ASSESSEE. THE FACTS OF THAT CASE HAVE BEEN SUCCINCTLY DELINEATED ABOVE WHICH IN OUR CONSIDERED OPINION AR E DISTINCT FROM ASSESSES FACTS INASMUCH AS THERE IS NO DOUBT THAT A SSESSEE WAS OWNER OF THE LAND IN QUESTION, UNDERTOOK VARIOUS ACTIVITIES FOR CONVERSION OF LAND USER, TEDIOUS ACTIVITI ES FOR APPROVAL FOR DEVELOPMENT OF HOUSING PROJECT AND CONSTRUC TING THE APPROACH ROAD WHICH WAS MANDATORY FOR DEVELOPMENT PERMISSIONS. ALL THE APPROVALS, PERMISSIONS AND COMPLETION C ERTIFICATES ARE IN THE NAME OF ASSESSEE. ALL THIS COPIOUS EVIDENCE AVAILABLE ON RECORD AND FILED IN PAPER BOOK ALONG WITH DETAI LED WRITTEN SUBMISSIONS SUPPORTS THE CONTENTIONS AND CLAIM O F THE ASSESSEE. IN OUR CONSIDERED VIEW THE FOLLOWING JUDICIAL PRECEDENTS WHICH ARE ON SIMILAR FACTS AS THAT OF ASSES SEE SUPPORT THE ELIGIBILITY OF HIS CLAIM U/S 80IB(10) IN ALL THESE YEARS:- JAIPUR ITAT IN THE CASE OF M/S INDO CONTINENTAL HOTELS & RESORTS LTD.(SUPRA) HELD THAT THE APPROVAL OF PRO JECT WAS GRANTED GAZIABAD DEVELOPMENT AUTHORITY IN THE NAME OF ASSESSEE M/S INDO CONTINENTAL HOTELS & RESORTS LTD. I.E. A SSESSEE AND NOT IN THE NAME OF M/S PARSWANATH DEVELOPER, THE REFORE IT CANNOT BE SAID THAT ASSESSEE WAS ONLY A NAME LENDER IN THE DEVELOPMENT OF HOUSING DEVELOPMENT PROJECT. THE AGREEME NT ENTERED BY ASSESSEE WITH M/S PARSWANATH DEVELOPERS PROVIDED TH AT ASSESSEE WILL 7 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR. PARTICIPATE IN THE HOUSING PROJECT AND WILL DO THE NECESSARY WORK ASSIGNED TO IT. AFTER COMPLETION OF THE PROJE CT, THE PROFIT RATIO WAS SHARED IN THE RATIO OF 1/3RD IN THIS CASE IT IS 46% AND 56%. NO DOUBT, ASSESSEE DID NOT DO ANY MARKETING ACTIVITY AS IT WAS ASSIGNED TO M/S PDL, AND THEREAFTER FLATS WERE SOLD IN THE MARKET AND PROFITS WERE SHARED IN TERMS OF AGREED RATIO. ITAT HALD THAT ALL THESE FACTS AND CIRCUMSTANCES AMPLY PROVED THAT ASSESSEE INDULGED IN DEVELOPING OF THE HOUSING PR OJECT AND WAS ELIGIBLE FOR CLAIM U/S 80(IB). IN OUR CONSIDERED VIEW THE FACTS AND CIRCUMSTANCES OF M/S INDO CONTINENTAL HOTELS ARE SIMILAR TO ASSESSEE S CASE AND BEING A JUDGMENT OF THIS BENCH ONLY DESERVES TO BE FOLLOWED. HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS. SHRAVANEE CONSTRUCTION HAD OCCASION TO DECIDE THE ELIGIBILITY OF CLAIM U/S 80(IB) ON SIMILAR FACTS. HONBLE COURT HELD THAT- CONTEN TION OF THE REVENUE THAT THERE IS NO ELIGIBILITY TO DEDUCTION U/S 80(IB) AS ASSESSEE DID NOT UNDERTAKE ANY DEVELOP MENTAL OR BUILDING ACTIVITY HAS NO SUBSTANCE. THAT IS NOT THE REQUIREMENT OF LAW AND KEEPING IN MIND, THE OBJECT WITH WHICH THIS PROVISION IS INTRODUCED WHEN ALL PERSONS WHO HAVE MADE INVES TMENTS IN THIS HOUSING PROJECT AND HAVE COMPLIED WITH AL L THE CONDITIONS PRESCRIBED UNDER THE AFORESAID PROVISION, BOTH OF THEM ARE ENTITLED TO HUNDRED PERCENT BENEFIT OF TAX DEDUCTIO N AS PROVIDED UNDER THE SAID PROVISION. SIMILAR VIEW H AS BEEN TAKEN BY OTHER JUDICIAL AUTHORITIES AS UNDER: I. ABDUL KHADER VS. ACIT (2012) 137 I TD 188 (BANG) II. KURA HOMES P. LTD. VS. I.T.O. (2012) 139 ITD 46 0 (HYD) III. D.K. CONSTRUCTION VS. ACIT (2010) 17 TTJ 1 (INDORE) IV. RNS INFRASTRUCTURE LTD. VS. DCIT (BANG. BENCH) (2012) 24 TAXMAN.COM HONBLE KARNATAKA HIGH COURTS CLEAR JUDGM ENT IN SHRAVANEE CONSTRUCTION (SUPRA) BESIDES CORRECTLYINTERPR ETING PROVISIONS OF SEC 80 (IB) HAS THROWN GUIDING LIGHT ON LEG ISLATIVE PURPOSE IN INCORPORATING THE ELIGIBILITY OF THIS DEDUCTION, DI SPELS DOUBTS WHICH ARE RAISED BY LD. AO FOLLOWING RADHEY DEVEL OPERS JUDGMENT, WHICH IS ON DIFFERENT FACTS. JAIPUR ITAT IN M/S INDO CONT INENTAL HOTELS JUDGMENT (SUPRA) ALSO HAS ADOPTED SAME VIEW, AS TAKEN BY HONBLE KARNATAKA HIGH COURTS IN SHRAVANEE CONSTRUCTION 8 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR. (SUPRA). IT HAS BEEN HELD THAT IF THE DEVE LOPMENT PLANS AND OTHER APPROVALS ARE IN THE NAME OF ASSE SSEE, ITS CLAIM FOR DEDUCTION U/S 80(IB) CANNOT BE DENIED ON THE BASIS THAT SOME OTHER AGENCY WAS INVOLVED IN CONSTRUCTION. TH IS IS QUITE UNDERSTANDABLE AS FOR ALL PRACTICAL PURPO SES, THE ASSESSEE RETAINS THE STATUS OF A DEVELOPER OF HO USING PROJECT IN THE RECORD OF JDA, OTHER CONCERNED REGULATORY LAWS AND AGENCIES OF GOVT. DEPARTMENTS. THIS LEADS TO AN ANOMALOUS SITUATION OF CONTRADICTION AMONGST THE GOVT. DEPARTMENTS , WHICH HAS BEEN DULY ADDRESSED BY HONBLE KARNATAKA HIGH COUR T. RESPECTFULLY FOLLOWING THESE JUDGMENTS WHICH ARE ON SIMI LAR FACTS, WE ARE INCLINED TO HOLD THAT ASSESSEE IS ELIGI BLE FOR CLAIM U/S 80 (IB)(10). IN THE FACTS AND CIRCUMSTANCES MENTIONED IN DETAILS ABOVE AND RESPECTFULLY FOLLOWING THESE JUDI CIAL PRECEDENTS, WE FIND NOT INFIRMITY IN THE ORDERS OF LD. CIT(A) FOR THE IMPUGNED ASSESSMENT YEARS. CONSEQUENTLY THE IMPUGNED ORDERS OF LD. CIT(A) ARE UPHELD. THE LD. D/R HAS NOT POINTED OUT ANY CONTRARY BINDING PRECEDENT, THEREFORE, TAKING A CONSISTENT V IEW OF THE MATTER, WE DO NOT SEE. ANY INFIRMITY IN THE ORDER OF LD. CIT(A ), THE SAME IS HEREBY UPHELD. THE GROUND RAISED BY THE REVENUE IN THIS AP PEAL IS DISMISSED. 6. OTHERWISE ALSO, THE CONTROVERSY IS COVERED BY TH E DECISION OF THIS COURT IN APPEAL NO.120/2016 IN THE CASE OF SAME ASSESSEE DECIDED ON 4.1.2017 WHEREIN IT HAS BEEN HELD AS UND ER:- 4. THE TRIBUNAL HAS SOUGHT TO RELY U PON THE JUDGMENT IN THE CASE OF CIT, JAIPUR VS. M/S INDO CONTINENTAL HO TELS AND RESORTS WHICH JUDGMENT WAS CONFIRMED BY THIS COURT IN D.B. INCOME TAX APPEAL NO.630/2011 (CIT JAIPUR VS. M/S INDO CONTINENTAL HOTELS AND RESORTS) & OTHER CONNECTED MAT TER DECIDED ON 30.5.2017 WHICH READS AS UNDER:- 4.1 THE ISSUE AGITATED BEFORE TRIBUNAL AS REGARD TO PREVIOUS YEAR, THE ISSUES IS DISCUSSED IN INCOME TAX APPEA L NO.470/2009, WHICH WE HAVE DECIDED TODAY BUT THERE IS NO REFERENCE OF PRICE IN THE SAME. IN OUR VIEW IN CIT(A) AND THE T RIBUNAL HAVE COMMITTED AN ERROR IN NOT REFERRING TO THE PRICE IN THE PREVI OUS YEAR. 4.2 THEREFORE, THE MATTER IS REQUIRED T O BE REMITTED BACK TO THE TRIBUNAL ONLY ON THIS ISSUE. 4.3 THE MATTER IS REMITTED BACK TO TR IBUNAL TO DECIDE, THE SAME KEEPING IN VIEW THE STATUTORY PROVISION. WE MAKE IT CLEAR THAT WE HAVE NOT EXPRESSED ANY OPINION OF MER ITS. 9 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR. 5.1 THE SECOND ISSUE IS COVERED BY THE DECISION OF THIS COURT IN COMMISSIONER OF INCOME TAX VS. VEENA DEVELOPERS(2 015) 277 CTR 0297(SC) WHEREIN IT HAS BEEN OBSERVED AS UNDE R: HIGH COURT INTERPRETED THE EXPRESSION HOUSING PR OJECT BY GIVING GRAMMATICAL MEANING THERETO AS HOUSING PROJECT IS NOT DEFINED UNDER THE INCOME TAX ACT IN SO FAR AS THE AFORESAID PROVISION IS CONCERNED. SINCE SUB-SECTION (10) OF S ECTION 80IB VERY CATEGORICALLY MENTIONED THAT SUCH A PROJECT WHICH IS UNDERTAKEN AS HOUSING PROJECT IS APPROVED BY A LOCAL AUTHORITY, O NCE THE PROJECT IS APPROVED BY THE LOCAL AUTHORITY IT IS TO BE TREATED AS THE HOUSING PROJECT. WE MAY ALSO POINT OUT THAT THE HIG H COURT HAD MADE OBSERVATIONS IN THE CONTEXT OF DEVELOPMEN T CONTROL REGULATIONS (HEREINAFTER REFERRED TO AS DC RS IN SHORT) UNDER WHICH THE LOCAL AUTHORITY SANCTIONS THE HOUSING PRO JECTS AND NOTED THAT IN THESE DCRS ITSELF, AN ELEMENT OF COM MERCIAL ACTIVITY IS PROVIDED BUT THE TOTAL PROJECT IS TILL TREATED AS HOUSING PROJECT. A. UPTO 31/3/2005 (SUBJECT TO FULFILLING OTHER CONDITIONS), DEDUCTION UNDER SECTION 80IB (10) IS ALLOWABLE TO HOUSING PROJECTS APPROVED BY THE LOGAL AUTHORITY HAVING RESIDE NTIAL UNITS WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER DC R ULES/REGULATIONS FRAMED BY THE RESPECTIVE LOCAL AUTHORITY. B. WHERE THE COMMERCIAL USER PERMITTED BY THE LOCAL AUTHORITY IS WITHIN THE LIMITS PRESCRIBED UNDER THE DC RULES/REGULATION, THE DEDUCTION UNDER SECTION 80IB(10) UPTO 31.3.2005 WOULD BE ALLOWABLE IRRESPECTIVE OF THE FACT T HAT THE PROJECT IS APPROVED AS HOUSING PROJECT OR RESIDENTI AL PLUS COMMERCIAL. 5.2 THEREFORE THIS ISSUE IS REQUIRED TO BE HELD IN FAVOUR OF ASSESSEE. 5.3 FOR THE FIRST ISSUE THE JUDGMENT OF THE TRIBUNAL IS QUASHED AND SET ASIDE. THE MATTER IS REMITTED BACK TO THE TRIBUNAL TO DECIDE THIS ISSUE AFRESH. HOWEVER, THE SECOND ISSUE IS DECIDED IN FAVOUR OF ASSESSEE. 7. IN THAT VIEW OF THE MATTER, THE ISSUES ARE ANSW ERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 10 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR. IN VIEW OF THE DECISION OF THIS TRIBUNAL IN ASSESSE ES OWN CASE AS WELL AS THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF LD. CIT (A) IN ALLOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 80IB (10). BEFORE PARTING WITH, WE MAY CLARIFY THA T A CLARIFICATION WAS ALSO SOUGHT FROM THE PARTIES REGARDING THE CAPITAL GAIN UNDER S ECTION 45(2) ON ACCOUNT OF CONVERSION OF THE LAND IN QUESTION TO STOCK-IN-TRAD E AND THE ASSESSEE HAS FILED THE DETAILS SHOWING THE CAPITAL GAIN OFFERED TO TAX. A CCORDINGLY IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPEAL OF THE REVENUE HAS NO MERIT. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 22/03/2 018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 22/03/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT CIRCLE-2, JAIPUR. 2. THE RESPONDENT SHRI PREM KUMAR SANGHI, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 791/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 11 ITA NO. 791/JP/2017 SHRI PREM KUMAR SANGHI, JAIPUR.