DCIT, CHENNAI V. Acestar Properties Pvt Ltd., CHENNAI

ITA 8/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5712 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-06-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 02-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S MOHD MUSTAFA
• Assessee Lawyers: B RAMAKRISHNANC A
• Keywords: Competent authority

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . , , BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./I.T.A. NO.8/MDS/2017 / ASSESSMENT YEAR : 2013-2014. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(1) CHENNAI 600 034. VS. M/S. ACESTAR PROPERTIES PVT. LTD, 12, SOUTH MADA STREET, SRINAGAR COLONY, SAIDAPET, CHENNAI 600 015. [PAN AAFCA 7237B ] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. S. MOHD. MUSTAFA, JCIT. $%! ' # /RESPONDENT BY : SHRI. B. RAMAKRISHNAN, C.A. & ' ' () /DATE OF HEARING : 29-11-2017 *+ ' () /DATE OF PRONOUNCEMENT : 29-11-2017 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: IN THIS APPEAL FILED BY THE REVENUE, WHICH IS DI RECTED AGAINST AN ORDER DATED 17.10.2016 OF THE LD. COMMISSIONER O F INCOME TAX (APPEALS)-1, CHENNAI, IT IS AGGRIEVED THAT LD. COM MISSIONER OF INCOME ITA NO. 8/MDS/2017 :- 2 -: TAX (APPEALS) ALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE INCOME TAX ACT (IN SHORT THE ACT), MADE BY THE ASSESSEE. 2. LD. COUNSEL FOR THE REVENUE SUBMITTED THAT ASSESS EE WAS PROMOTING A PROJECT CALLED LA CELESTE FOR WHICH IT CLAIMED DEDUCTION U/S.80IB(10) OF THE ACT. AS PER LD. AUTHORISED REPR ESENTATIVE PROJECT WHICH WAS CONCEIVED IN THE AREA OF 9.87 ACRES WAS A PPROVED BY THE CMDA ON 25.03.2008. AS PER LD. DEPARTMENTAL REPRES ENTATIVE THOUGH ASSESSEE COMPLIED WITH THE CONDITIONS STIPULATED U /S.80IB(10) OF THE ACT WITH REGARD TO BUILDING APPROVAL, COMPLETION CERTIFICATE AND DATE OF APPROVAL OF THE PLAN, IT HAD NOT COMPLIED WITH T HE ESSENTIAL REQUIREMENT THAT SIZE OF THE RESIDENTIAL UNITS SHOU LD NOT EXCEED 1500 SQ.FT. AS PER LD. DEPARTMENTAL REPRESENTATIVE EACH OF THE RESIDENTIAL UNITS IN THE PROJECT HAD PRIVATE OPEN TERRACE OF 10 0 TO 700 SQ.FT. IF SUCH PRIVATE OPEN TERRACE WAS INCLUDED IN THE BUILT UP AREA, IT EXCEEDED 1500 SQ.FT AND THUS ACCORDING TO LD. DEPARTMENTAL R EPRESENTATIVE, ASSESSEE WAS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/ S.80IB(10) OF THE ACT. AS PER LD. DEPARTMENTAL REPRESENTATIVE, LD. COMMISS IONER OF INCOME TAX (APPEALS) HAD ALLOWED THE CLAIM OF THE ASSESSE E TAKING A VIEW THAT BUILT UP DID NOT INCLUDE SUCH TERRACE AREA, RELYING ON A JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. CEEBROS HOTELS PVT. LTD. VS. ITA NO. 8/MDS/2017 :- 3 -: DCIT (TCA NO.581 OF 2008, 1186 OF 2008 AND 136 OF 2 009, DATED 19.10.2012) AS PER LD. DEPARTMENTAL REPRESENTATIVE PRIVATE T ERRACE AREA HAD TO BE CONSIDERED AS INTEGRAL PART OF BUILT UP AREA. LD. COMMISSIONER OF INCOME TAX (APPEALS), ACCORDING TO THE LD. DEPARTMENTAL REPRESENTATIVE FELL IN ERROR IN GIVIN G RELIEF TO THE ASSESSEE. 3. PER CONTRA, LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 2010-11, 2011-12 AND 2012-2013 IN ITA NOS.858, 859 & 860/MDS/2016, D ATED 28.04.2017 HAD CONSIDERED THE VERY SAME ISSUE AND DECIDED IT I N FAVOUR OF THE ASSESSEE. 4. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONT ENTIONS. QUESTION BEFORE US IS WHETHER PRIVATE OPEN TERRACE SHOULD BE INCLUDED IN THE BUILT UP AREA FOR CONSTRUING THE LIMITS SPE CIFIED IN SEC. 80IB(10) OF THE ACT. WE FIND THAT THE VERY SAME ISSUE HAD C OME UP BEFORE THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENTS YEA RS 2010-11, 2011- 12 AND 2012-2013. THIS TRIBUNAL IN ITS DECISION DA TED 28.04.2017 HELD AS UNDER PARAS 8 TO 10 OF ITS ORDER:- 8. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF MADRAS HIGH COURT IN CEEBROS HOTELS PVT. LTD. (SUPRA), A C OPY OF WHICH IS AVAILABLE AT PAGE 8 OF THE PAPER-BOOK. THE MADRA S HIGH COURT FOUND THAT WHILE CONTEMPLATING DEDUCTION UNDER SECT ION 80- ITA NO. 8/MDS/2017 :- 4 -: IB(10) OF THE ACT TO A HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY, THE AREA EXCLUDED FROM THE WORKING OF BU ILT-UP AREA BY THE LOCAL AUTHORITY, CANNOT BE TAKEN AS BUILT-UP AR EA. IN FACT, THE MADRAS HIGH COURT HAS OBSERVED AS FOLLOWS AT PARA 3 6 OF ITS JUDGMENT:- GIVEN THE FACT THAT CONTEMPLATION OF DEDUCTION IS T O HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY, W E HOLD THAT ONCE THE LOCAL AUTHORITY HAVE EXCLUDED OP EN TERRACE FROM THE WORKING OF BUILT-UP AREA, IT IS NO T OPEN TO THE REVENUE TO REVIEW THE APPROVAL GIVEN BY THE COMPETENT AUTHORITY TO HOLD THAT TERRACE WOULD ALSO BE INCLUDED IN THE BUILT-UP AREA. AS ALREADY HELD THE DEFINITION ALSO DOES NOT SPEAK IN DIFFERENT LANGUAG E FROM WHAT IS GIVEN IN THE MEASUREMENT PROVISION OF BUREAU OF INDIAN STANDARDS IN THE CONTEXT OF THE DEFINITION OF BALCONY IN THE INDIAN STANDARD. 9. IN VIEW OF THE ABOVE JUDGMENT OF MADRAS HIGH COU RT, IT IS NECESSARY TO EXAMINE THE HOUSING PROJECT APPROVED B Y THE LOCAL BODY. IN OTHER WORDS, WHETHER THE SO-CALLED PRIVATE OPEN TERRACE SAID TO BE ATTACHED WITH PRIVATE RESIDENTIAL UNIT W OULD FORM PART OF BUILT-UP AREA AS PER HOUSING PROJECT OR IT WAS EXCL UDED FROM THE APPROVAL GRANTED BY LOCAL AUTHORITY. SINCE THE COPY OF BUILDING APPROVAL WAS NOT AVAILABLE ON RECORD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECO NSIDERED. 10. MOREOVER, FROM THE ORDER OF THE ASSESSING OFFICER I T APPEARS THAT IN EACH FLOOR THERE IS A PROJECTION, WHICH WAS TERMED AS PRIVATE OPEN TERRACE. THE ENTRY TO SUCH OPEN TERRACE IS ONLY FR OM INSIDE THE RESIDENTIAL UNIT. IT IS NOT OPEN TO OTHER RESIDENTS TO ENTER THAT PLACE. THEREFORE, IT IS NOT A COMMON AREA LIKE OPEN TERRAC E. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THE MATTER NEEDS TO BE RE-EXAMINED AND BRING ON RECORD WHETHER THE SO-CALLED PRIVATE OPEN TERRACE FORMS PART OF BUILT-UP AREA IN THE APPROVAL GIVEN BY LOCAL AUTHORITY OR NOT. SINCE THE APPROVAL OF LOCAL AUTHORITY IS NOT AVAILABLE ON RECORD, THE MATTER NE EDS TO BE RECONSIDERED. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE. THE ASSESSING OFFICER SHALL RE-EXAMINE T HE MATTER AFRESH IN THE LIGHT OF THE APPROVAL GRANTED BY THE LOCAL A UTHORITY TO THE HOUSING PROJECT, WHICH SHALL BE BROUGHT ON RECORD T O ASCERTAIN WHETHER THE SO-CALLED PRIVATE OPEN TERRACE IS PART OF BUILT-UP AREA OR NOT. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER AFRESH, IN ITA NO. 8/MDS/2017 :- 5 -: ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPO RTUNITY TO THE ASSESSEE. WE FIND THAT THIS TRIBUNAL HAD REMITTED THE ISSUE B ACK TO THE LD. ASSESSING OFFICER FOR EXAMINING THE MATTER AFRESH CONSIDERING THE APPROVAL GIVEN BY THE LOCAL AUTHORITIES FOR THE HOU SING PROJECT, FOR ASCERTAINING WHETHER PRIVATE OPEN TERRACE WAS PART OF BUILT UP AREA OR NOT. SIMILAR DIRECTIONS ARE GIVEN FOR THE IMPUGNED ASSESSMENT YEAR ALSO. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 29TH DAY OF NOV EMBER, 2017, AT CHENNAI. SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER SD/- ( . ! ' ) (ABRAHAM P. GEORGE) $ %& / ACCOUNTANT MEMBER - ' / CHENNAI . / DATED:29TH NOVEMBER, 2017. KV / ' $(0 1 2 1 ( / COPY TO: 1 . ! / APPELLANT 3. & 3( ( ) / CIT(A) 5. 167 $(8 / DR 2. $%! / RESPONDENT 4. & 3( / CIT 6. 79 :' / GF