ACIT Cir -4, Pune V. M/S Raviraj Kothari Punjabi Associates, Pune

ITA 80/PUN/2012

• Counselvise Citation: 8024514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 13-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA; ANN KAPTHUAMA
• Assessee Lawyers: R G NAHAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.80/PN/2012 (ASSESSMENT YEAR: 2008-09) ASST. COMMISSIONER OF INCOME TAX CIRCLE 4, PUNE . APPELLANT VS. M/S RAVIRAJ KOTHARI PUNJABI ASSOCIATES 1, BT KAWADE ROAD, GHORPADI PUNE 411 001 PAN : AAFFR1541N . RESPONDENT APPELLANT BY : MR. MUKESH VERMA & MS. ANN KAPTHUAMA RESPONDENT BY : MR. R. G. NAHAR DATE OF HEARING : 29-04-2013 DATE OF PRONOUNCEMENT : 30-04-2013 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, PUNE DATED 24.10.2011 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 31.12.2010 PAS SED BY THE ASSESSING OFFICER, UNDER SECTION 143(3) OF THE INCOME-TAX ACT , 1961(IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT ESSENTIALLY THE DISPUTE IS WITH REGARD TO THE A CTION OF THE CIT(A) IN HOLDING THAT THE ASSESSEE IS ENTITLED TO DEDUCTI ON UNDER SECTION 80IB(10) IN RESPECT OF PROVIDES DERIVE FROM ITS PRO JECT CITADEL ENCLAVE. 3. THE ASSESSEE BEFORE US IS AN ASSOCIATION OF PERS ON, WHICH IS ENGAGED IN THE BUSINESS OF PROMOTERS, BUILDERS AND LAND DEVELOPERS. THE ISSUE BEFORE US IS WITH REGARD TO THE CITADEL ENCLAVE PROJECT OF THE ASSESSEE FOR WHICH A DEDUCTION OF RS. 1,76,50,9 61/- UNDER ITA NO.80/PN/2012 M/S RAVIRAJ KOTHARI PUNJABI ASSOCIATES A.Y. 2008-09 SECTION 80IB(10) OF THE ACT WAS CLAIMED IN THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS THAT THE COMMERCIAL AREA IN T HE PROJECT WAS MORE THAN 2000 SQ.FT.. THE ASSESSEE HAD EXPLAINED B EFORE THE ASSESSING OFFICER THAT THE COMMERCIAL BUILDING IN T HE LAYOUT WAS ACTUALLY A PROJECT OF ANOTHER FIRM NAMED WIDE ANGL E ASSOCIATES. HOWEVER, THE ASSESSING OFFICER HELD THAT AS PER THE ORIGINAL LAYOUT PLAN APPROVED BY PUNE MUNICIPAL CORPORATION (I.E. P MC) AT THE TIME OF FIRST COMMENCEMENT CERTIFICATE OF THE PROJECT, T HE COMMERCIAL AREA WAS ALSO SHOWN FOR THIS PROJECT AND AS THE SAME EXC EEDED THE PRESCRIBED LIME OF 2000 SQ.FT., CLAIM OF DEDUCTION WAS DENIED. 4. THE CIT(A) HAS SINCE ALLOWED THE CLAIM OF THE AS SESSEE. THE CIT(A) REFERRED TO THE ORDER OF HIS PREDECESSOR IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06 DATED 26.04.20 10 IN WHICH IT WAS HELD THAT THE LAND ON WHICH THE COMMERCIAL BUIL DING WAS LOCATED WAS TRANSFERRED BY THE ASSESSEE TO A FIRM CALLED W IDE ANGLE ASSOCIATES BY WAY OF A REGISTERED DEVELOPMENT AGRE EMENT DATED 24.12.2003. THEREFORE, THE COMMERCIAL BUILDING REFE RRED TO BY THE ASSESSING OFFICER WAS NOT HELD TO BE OWNED BY THE P ROJECT CITADEL ENCLAVE. FOR THE AFORESAID REASON, THE CIT(A) HELD THAT THERE IS NO CASE FOR DENIAL OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN THE CASE OF CITADEL ENCLAVE PROJECT AND ACCORDINGLY H E ALLOWED THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IB(1 0) OF THE ACT RS. 1,76,50,961/- WITH RESPECT TO THE CITADEL ENCLAVE PROJECT. AGAINST THE AFORESAID, THE REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US, IT WAS A COMMON POINT BETWEEN THE PAR TIES THAT THE ORDER OF THE CIT(A) FOR ASSESSMENT YEAR 2005-06 DAT ED 26.04.2010, WHICH HAS BEEN RELIED UPON BY THE CIT(A) IN THE INS TANT YEAR, WAS A SUBJECT MATTER OF CONSIDERATION BY THE TRIBUNAL IN AN APPEAL FILED BY ITA NO.80/PN/2012 M/S RAVIRAJ KOTHARI PUNJABI ASSOCIATES A.Y. 2008-09 THE REVENUE VIDE ITA NO. 1008/PN/2010 DATED 23.11.2 012 WHEREIN THE STAND OF THE CIT(A) IN ALLOWING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WITH RESPECT TO THE CITADEL ENCLAVE PR OJECT HAS BEEN AFFIRMED. A COPY OF THE SAID DECISION HAS BEEN PLAC ED ON RECORD. 6. WE FIND THAT THE REASONS ADVANCED BY THE ASSESSI NG OFFICER IN THE INSTANT ASSESSMENT YEAR TO DENY THE CLAIM OF DE DUCTION UNDER SECTION 80IB(10) OF THE ACT WITH RESPECT TO THE CI TADEL ENCLAVE PROJECT ARE PARI-MATERIA TO THOSE IN ASSESSMENT YEAR 2005-06, WHICH WAS THE SUBJECT MATTER OF THE CONSIDERATION OF THE TRIBUNAL IN ITS ORDER DATED 23.11.2012 (SUPRA). THE RELEVANT PORTIO N OF THE ORDER OF THE TRIBUNAL DATED 23.11.2012 (SUPRA) IS REPRODUCED HEREINAFTER :- 19. THE ONLY APPEAL NOW REMAINING IS ITA NO. 1008/PN/2010 WHICH HAS BEEN PREFERRED BY THE REVENU E WITH RESPECT TO A.Y. 2005-06. IN THIS APPEAL, THE SOLITA RY GRIEVANCE OF THE REVENUE IS WITH REGARD TO THE DECISION OF CIT(A) TH AT THE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB(10) OF THE ACT IN RELATION TO THE PROJECT CITADEL ENCLAVE WAS JUSTIFIED. 20. IN BRIEF, THE FACTS ARE THAT IN THE IMPUGNED AS SESSMENT MADE BY THE ASSESSING OFFICER DATED 31-12-2009 IN T ERMS OF SECTION 143(3) R.W.S. 264(1) OF THE ACT, DEDUCTION U/S 80-I B(10) FOR RS. 2,02,18,240/- WAS DENIED. THE DEDUCTION CLAIMED WAS RELATING TO TWO PROJECTS VIZ. CITADEL AND CITADEL ENCLAVE , PUNE. IN SO FAR AS THE CLAIM FOR DEDUCTION RELATING TO THE PROJECT CITADEL IS CONCERNED IT WAS THE SUBJECT MATTER OF CONSIDERATIO N IN ASSESSEES APPEAL IN ITA NO. 164/PN/2010 WHICH HAS BEEN DEALT WITH BY US IN THE EARLIER PARAGRAPHS. IN THIS APPEAL OF THE REVEN UE, THE CLAIM RELATES TO THE DEDUCTION CLAIMED FOR CITADEL ENCLA VE WHICH HAS BEEN ALLOWED BY THE CIT(A) IN THE IMPUGNED ORDER. 21. THE BRIEF BACKGROUND WITH REGARD TO THE ASSESSE ES CLAIM FOR DEDUCTION RELATING TO PROJECT CITADEL EN CLAVE IS AS FOLLOWS: IN THE A.Y. 2005-06, ORIGINALLY THE ASSESS MENT WAS MADE U/S 143(3) ON 26-12-2007 WHEREIN CLAIM OF DEDUCTION U/S 80IB(10) ITA NO.80/PN/2012 M/S RAVIRAJ KOTHARI PUNJABI ASSOCIATES A.Y. 2008-09 OF THE ACT AMOUNT TO RS. 2,02,18,046/- WAS DENIED. THE ASSESSING OFFICER CLAIMED THE TWO PROJECTS AS ONE PROJECT IN SUCH ASSESSMENT PROCEEDINGS. FURTHER, IN RELATION TO CITADEL ENCLA VE PROJECT THE ASSESSING OFFICER RELIED UPON THE REPORT OF THE APP ROVED VALUER TO HOLD THAT SIX FLATS HAD A BUILT-UP AREA OF MORE THA N 1500 SQ.FT..AGAINST THE AFORESAID ASSESSMENT, THE ASSESS EE MOVED AN APPLICATION FOR REVISION U/S 264 OF THE ACT, BEFORE THE COMMISSIONER OF INCOME-TAX-II, PUNE (FOR SHORT CIT II). THE CI T II VIDE HIS ORDER DATED 4-5-2008 U/S 264 OF THE ACT, SET ASIDE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR PURPOSES O F EXAMINING DEDUCTION U/S 80-IB(10) OF THE ACT WITH CERTAIN DIR ECTIONS. HENCE, THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 264 OF THE ACT. IN HIS ORDER, THE CIT-II HEL D THAT THE ASSESSING OFFICER HAD NOT CONFRONTED THE REPORT OF THE VALUER TO THE ASSESSEE AND HE THEREFORE, DIRECTED THE ASSESSING OFFICER TO GET THE FLATS MEASURED AGAIN BY A REGISTERED VALUER AND GIVE PROP ER OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. SO FAR AS THE POINT REGARDING THE PROJECT CITADEL ENCLAVE BEING A CONTINUOUS PROJEC T WITH OTHER PROJECT I.E. CITADEL WAS CONCERNED, THE CIT-II HE LD THAT THE STAND OF THE ASSESSING OFFICER WAS NOT CORRECT. IN THIS REGA RD, THE CIT-II NOTICED THE ORDER PASSED BY THE ASSESSING OFFICER I N A.Y. 2006-07 U/S143(3) OF THE ACT DATED 31-12-2009 WHEREIN THE P ROJECTS CITADEL AND CITADEL ENCLAVE WERE TREATED AS SINGLE PROJEC T. THE AFORESAID DISPUTE HAS NOT BEEN RAISED BY THE ASSESSING OFFICE R IN THE IMPUGNED ASSESSMENT ORDER DATED 31-12-2009. THE ONL Y POINT ON THE BASIS OF WHICH THE ASSESSEES CLAIM FOR DEDUCTI ON U/S 80-IB(10) OF THE ACT FOR THE CITADEL ENCLAVE PROJECT HAS BE EN DENIED, IS TO THE EFFECT THAT THE COMMERCIAL AREA OF THIS PROJECT EXCEEDED 2000 SQ.FT. WHICH WAS VIOLATIVE OF CLAUSE (D) OF SECTION 80-IB(10) OF THE ACT. 22. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE CONTE NDED THAT THE COMMERCIAL BUILDING NOTICED BY THE ASSESSI NG OFFICER IN THE PROJECT CITADEL ENCLAVE WAS NOT OWNED BY THE ASSE SSEE BUT IT WAS THE PROJECT CARRIED OUT BY ANOTHER FIRM VIZ. WIDE A NGLE ASSOCIATES. ITA NO.80/PN/2012 M/S RAVIRAJ KOTHARI PUNJABI ASSOCIATES A.Y. 2008-09 SECONDLY, IT WAS FURTHER POINTED OUT BY THE ASSESSE E THAT THE AFORESAID POINT RAISED BY THE ASSESSING OFFICER NEI THER EMERGED FROM THE ORIGINAL ASSESSMENT ORDER DATED 26-12-2007 AND NOR OUT OF THE ORDER OF THE CIT-II, PUNE DATED 14-5-2008 PASSE D U/S 264 OF THE ACT. THUS, AS PER THE ASSESSEE, THE ASSESSING OFFIC ER HAD TRAVELLED BEYOND THE SCOPE OF DIRECTIONS CONTAINED IN THE ORD ER OF THE CIT-II PASSED U/S 264 OF THE ACT IN THE IMPUGNED PROCEEDIN GS. THE CIT(A) UPHELD BOTH THE AFORESAID PLEAS OF THE ASSESSEE AND ACCORDINGLY HELD THE ASSESSEE ENTITLED FOR DEDUCTION U/S 80-IB( 10) OF THE ACT IN RESPECT OF CITADEL ENCLAVE PROJECT. 23. BEFORE US, THE LEARNED DR APPEARING FOR THE REV ENUE HAS SUBMITTED THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON A WRONG ASSUMPTION THAT THE COMMERCIAL ESTABLISHMENTS IN THE PROJECT CITADEL ENCLAVE BEL ONGED TO A DIFFERENT FIRM. THE LEARNED DR HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER IN SUPPORT OF THE CASE OF THE REV ENUE. 24. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE F OR THE ASSESSEE HAS VEHEMENTLY POINTED OUT THAT THE ACTION OF THE ASSESSING OFFICER WAS MISCONCEIVED, INASMUCH AS, FA CTUALLY THE COMMERCIAL BUILDING IN QUESTION WAS NOT DEVELOPED B Y THE ASSESSEE AOP BUT BELONGED TO ANOTHER FIRM M/S. WIDE ANGLE ASSOCIATES, WHICH WAS SUPPORTED BY A REGISTERED DEVELOPMENT AGR EEMENT DATED 24-12-2003, A COPY OF WHICH WAS VERY MUCH BEFORE TH E ASSESSING OFFICER AND THE SAME HAS BEEN RIGHTLY APPRECIATED B Y THE CIT(A). IN THIS MANNER, THE CLAIM OF THE ASSESSEE FOR DEDUCTIO N U/S 80-IB(10) OF THE ACT IN RELATION TO THE PROJECT CITADEL ENCL AVE HAS BEEN DEFENDED. 25. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. ON THE AFORESAID ASPECT, IN OUR CONSIDERED OPINION, THE CIT(A) HAS RECORDED TWO BUILDINGS WHICH HAVE NOT BEEN ASSAILED BY THE REVENUE IN A COGENT MANNER BEFORE US. FIRSTLY, AS P ER THE CIT(A) THE COMMERCIAL BUILDING REFERRED TO BY THE ASSESSIN G OFFICER WAS NOT DEVELOPED BY THE ASSESSEE-AOP, BUT BY ANOTHER F IRM M/S. WIDE ANGLE ASSOCIATES AND THEREFORE, SUCH A BUILDING CAN NOT BE ITA NO.80/PN/2012 M/S RAVIRAJ KOTHARI PUNJABI ASSOCIATES A.Y. 2008-09 CONSIDERED AS COMMERCIAL BUILDING DEVELOPED BY THE ASSESSEE IN ITS PROJECT CITADEL ENCLAVE. SECONDLY, IT HAS ALSO BE EN RECORDED BY THE CIT(A) THAT SUCH AN ISSUE WAS NEITHER RAISED IN THE ORIGINAL ASSESSMENT ORDER AND NOR MANDATED BY THE CIT-II IN HIS ORDER PASSED U/S 264 OF THE ACT DATED 14-5-2008 AND THERE FORE, IN THE ENSUING IMPUGNED ASSESSMENT ORDER, THE ASSESSING OF FICER COULD NOT HAVE GONE INTO THE AREAS WHICH WERE NOT COVERED IN THE DIRECTIONS CONTAINED IN THE ORDER OF THE CIT-II PUN E PASSED U/S 264 OF THE ACT. BOTH THE ABOVE ASSERTIONS OF THE CIT(A) FIND AN ECHO IN PARA 3.8 OF THE IMPUGNED ORDER WHICH READS AS UNDER : THE ASSESSING OFFICER HAS STATED THAT SINCE IN THE ORIGINAL LAY OUT PLAN THIS COMMERCIAL BUILDING WAS SHOWN AND THE PROJECT WAS ALSO MENTIONED AS RESIDENTIAL PLUS COMMERCIAL IN THE ORIGINAL COMMENCEMENT CERTIFICATE DATED 6-6- 2003, THE COMMERCIAL AREA AS TREATED TO BE PART AND PARCEL OF THE CITADEL ENCLAVE PROJECT ONLY. BEFORE THE ASSESSING OFFICER AS WELL AS DURING THE APPELLATE PROCEEDINGS, IT HAS BEEN EXPLA INED BY THE APPELLANT THAT THE COMMERCIAL BUILDING COMPRISING O F 22 SHOPS WAS NOT A PART OF THE PROJECT CITADEL ENCLAVE BUT W AS A PROJECT OF THE FIRM WIDE ANGLE ASSOCIATES. FOR THIS, THE APPELLANT POINTED OUT TO THE REPORT OF THE REGISTERED VALUER APPOINTED BY THE ASSESSING OFFICER, AND EXPLAINED THAT THE PARTI CULAR LAND ON WHICH THE COMMERCIAL BUILDING WAS LOCATED WAS TRANS FERRED BY THE AOP TO THE FIRM M/S. WIDE ANGLE ASSOCIATES BY A REGISTERED DEVELOPMENT AGREEMENT DATED 24-12-2003, OF WHICH A COPY WAS FILED BEFORE THE ASSESSING OFFICER AS WELL AS D URING APPELLATE PROCEEDINGS. CONSIDERING THIS EXPLANATION OF THE APPELLANT, SINCE A PART OF THE LAND WAS ALREADY TRA NSFERRED TO A DIFFERENT FIRM, M/S WIDE ANGLE ASSOCIATES, WHICH HA S IN FACT CONSTRUCTED THIS COMMERCIAL BUILDING OF 554 SQ.MTRS . AREA HAVING 22 SHOPS, IT CANNOT BE INCLUDED IN THE CITA DEL ENCLAVE PROJECT OF THE APPELLANT. THIS IS ON MERITS OF THE ISSUE. IN ANY CASE, THIS ISSUE WAS NOT RAISED IN THE ORIGINAL ASS ESSMENT ORDER AND NOT MANDATED BY THE ORDER U/S 264 DT. 14-5-2008 OF THE CIT-II, PUNE. THEREFORE, THE ASSESSING OFFICER CANN OT GO ITA NO.80/PN/2012 M/S RAVIRAJ KOTHARI PUNJABI ASSOCIATES A.Y. 2008-09 BEYOND THE DIRECTION CONTAINED IN THE ORDER U/S 264 AND GET INTO NEW AREAS. IT IS THEREFORE, HELD THAT THE APPELLANT WAS ENTITLED FOR DEDUCTION U/S 80-IB(10) IN RESPECT OF CITADEL E NCLAVE PROJECT, AND THERE WAS NO VIOLATION OF CONDITION U/ S 80-IB(10)(D) FOR THIS PROJECT. 26. ON THE BASIS OF THE AFORESAID OBSERVATION OF TH E CIT(A) FOR WHICH THERE IS NO MATERIAL TO NEGATE THE SAME, WE FIND NO REASON TO INTERFERE WITH THE ULTIMATE CONCLUSION OF THE CIT(A) THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80-I B(10) OF THE ACT. THUS, THE APPEAL OF THE REVENUE FAILS. 7. FOLLOWING THE AFORESAID PRECEDENT, WHICH HAS BEE N RENDERED IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005-06 IN IDENTICAL CIRCUMSTANCES, WE HEREBY AFFIRM THE IMPUGNED ACTION OF THE CIT(A) IN UPHOLDING THE ASSESSEES CLAIM FOR DEDUCTION UND ER SECTION 80IB(10) OF THE ACT WITH RESPECT TO PROFIT DERIVED FROM CITADEL ENCLAVE PROJECT. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED: 30.04.2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT, PUNE; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY I.T.A.T., PUNE