M/s. Vishal Constructions, Aurangabad V. Income-tax Officer, Aurangabad

ITA 831/PUN/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6579 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MALVIYA
• Keywords: Rule of consistency
• Section: 143(3); 201; 13; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / ITA NO . 831 /PUN/2017 / ASSESSMENT YEAR : 20 1 3 - 14 M/S. VISHAL CONSTRUCTIONS, 35, SANJAY HOUSING SOCIETY, PRATAP NAGAR, AURANGABAD PAN : AAGFV5566Q ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 2(3), AURANGABAD / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI ALOK MALVIYA / DATE OF HEARING : 2 7 - 08 - 2020 / DATE OF PRONOUNCEMENT : 16 - 0 9 - 2020 / ORDER PER S.S. VISWANETHRA RAVI, JM : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 20 - 01 - 2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 2, AURANGABAD [CIT(A)] FOR ASSESSMENT YEAR 201 3 - 14. 2 ITA NO . 831/PUN/2017, A.Y. 2013 - 14 2. APART FROM THE MAIN GROUNDS OF APPEAL , THE ASSESSEE RAISED ADDITIONAL GROUND CHALLENGING THE ACTION OF CIT(A) IN DISALLOWING THE DEDUCTION U/S. 80IB(10) OF THE ACT AGAINST THE CONSISTENCY FOLLOWED BY THE REVENUE IN EARLIER YEARS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LD. AR, SHRI NIKHIL PATHAK SUBMITS THAT THE ABOVE SAID ADDITIONAL GROUND IS A LEGAL ISSUE WHICH REQUIRES NO EXAMINATION OF NEW FACTS AND THIS TRIBUNAL CAN TAKE UP THE SAME AS A PRELIMINARY ISSUE. THE LD. DR, SHRI ALOK MALVIYA REPORTED NO OBJECTION IN TAKING UP THE ADD ITIONAL GROUND AS A PRELIMINARY ISSUE. THEREFORE, WE PROCEED TO HEAR BOTH THE PARTIES ON THE ADDITIONAL GROUND. 4. THE BRIEF FACTS RELATING TO THE ISSUE ON HAND ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER AND CONDUC TS ITS BUSINESS UNDER THE NAME AND STYLE OF M/S. VISHAL CONSTRUCTIONS. THE ASSESSEE CARRIED ON THE SAID HOUSING PROJECT AT TALEGAON, TAL. - SHIRUR IN PUNE DISTRICT. THE SAID HOUSING PROJECT IS ON THE PLOT AREA OF 1.55 HECTOR I.E. 15500 SQUARE METER. THE SANCTIONED BUILT UP AREA IS 9455.19 SQUARE METER AND AMENITY IS 2225.58 SQUARE METER AND SUBMITTED THE DETAILS OF CONSTRUCTION AS ON 31 - 03 - 2013. ACCORDING TO AO THE ASSESSEE FULFILLED ALL THE CONDITIONS EXCEPT CONDITION OF PROVISIONS OF SECTION 80IB(10)( D) OF THE ACT AND HELD THE BUILT UP AREA OF SHOPS AND COMMERCIAL ESTABLISHMENT IS EXCEEDED BY 5000 SQUARE FEET. THE AO CONFRONTED THE SAME WITH THE ASSESSEE. THE ASSESSEE CONTENDED THAT THE AMENITY BUILDING IS SEPARATE AND DIFFERENT FROM RESIDENTIAL HOUS ING BUILDING. ACCORDING TO AO THOUGH THE BUILDING IS DIFFERENT AND SEPARATE BUT IT IS PART AND PARCEL OF HOUSING PROJECT AS PER SANCTIONED PLAN AND THEREBY , DENIED DEDUCTION U/S. 80IB(10) 3 ITA NO . 831/PUN/2017, A.Y. 2013 - 14 OF THE ACT TO AN EXTENT OF RS.70,59,208/ - VIDE THIS ORDER DATED 30 - 03 - 2016 PASSED U/S. 143(3) OF THE ACT. 5. IN THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE CONTENDED THAT THE HOUSING PROJECT CONSIST OF RESIDENTIAL AREA AND AMENITY BUILDING AND THE SAID AMENITY BUILDING IS A SEPARATE PROJECT AND THE ASSESSEE IS ENTITL ED TO GET THE DEDUCTION U/S. 80IB(10) OF THE ACT IF THE RESIDENTIAL PROJECT FULFILLS THE CONDITIONS LAID DOWN UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. FURTHER, IT WAS CONTENDED THAT THE DEDUCTION U/S. 80IB(10) OF THE ACT SHOULD BE AUTOMATICALL Y GRANTED ON PRO - RAT A BASIS IN RESPECT OF HOUSING PROJECT COMPLETED BY THE ASSESSEE. ACCORDING TO THE CIT(A) THE SANCTIONED GIVEN BY THE AUTHORITIES IN RESPECT OF LAYOUT PLAN OF THE HOUSING PROJECT INCLUDED THE RESIDENTIAL PREMISES AND THE SHOPS AND COMME RCIAL ESTABLISHMENTS AND THERE WERE NO SEPARATE SANCTIONED FOR CONSTRUCTION OF THE RESIDENTIAL PREMISES AND SHOPS AND COMMERCIAL ESTABLISHMENTS WERE GIVEN. THE CIT(A) HELD THAT THE PROJECT IS A COMPOSITE PROJECT AND CANNOT BE CONSTRUED THAT THE HOUSING PR OJECT AND COMMERCIAL ESTABLISHMENTS ARE SEPARATE PROJECTS AND CONFIRMED THE ORDER OF AO IN DENYING THE DEDUCTION U/S. 80IB(10) OF THE ACT. FOR READY REFERENCE THE RELEVANT PORTION AT PARAS 12 AND 13 OF THE CIT(A) ARE REPRODUCED HERE - IN - BELOW: 12. CLAUSE - ID) OF THE EXPLANATION IS UNAMBIGUOUS IN INTENT. IT STATES THAT THE HOUSING PROJECT MAY HAVE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS BUT THE SAME SHOULD NOT EXCEED 3% OF AGGREGATE BUILT - UP AREA OF THE HOUSING PROJECT OR 5000 FT. WHICHEVER IS HIGHER. IF THE CEILING PROVIDED IN THIS CLAUSE IS VIOLATED, THE HOUSING PROJECT NO LONGER REMAINS AN ELIGIBLE PROJECT FOR THE PURPOSES OF SECTION 80 - IB(10) OF THE ACT. ADMITTEDLY, IN THE INSTANT CASE THE ASSESSEE HAD CONSTRUCTED SHOPS AND COM MERCIAL ESTABLISHMENTS OVER AN AREA OF 25,942 FT. WHICH IS MORE THAN THE STIPULATED 5000 FT. MENTIONED IN CLAUSE - (D) OF EXPLANATION TO SECTION 80 - IB(L0). THEREFORE , THE ASSESSEE HAS VIOLATED THE EXPRESS PROVISIONS AND THEREBY DISENTITLED ITSELF FROM THE BENEFITS OF THIS SECTION. 13. AS FAR AS THE CONTENTION OF THE ASSESSEE THAT DEDUCTION SHOULD BE 'ALLOWED TO IT ON PRO RATA BASIS BASIS IS CONCERNED, I HOLD THAT THE SAME IS NOT TENABLE. THIS IS FOR THE REASON THAT IF THE CONTENTION OF THE ASSESSEE IS ACC EPTED THEN IT WOULD TANTAMOUNT TO HOLDING THAT THE ASSESSEE IS 4 ITA NO . 831/PUN/2017, A.Y. 2013 - 14 ENTITLED TO DEDUCTION U/S.80IB( 10 ). I HAVE ALREADY, IN THE PRECEDING PARAS, HELD THAT THE HOUSING PROJECT UNDERTAKEN BY THE ASSESSEE IS NOT AN ELIGIBLE HOUSING PROJECT BECAUSE OF VIOLATION OF T HE PROVISION OF CLAUSE - (D) OF EXPLANATION TO SECTION 80 - IB( 1 0). ONCE IT IS HELD THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION UNDER THIS SECTION, THE QUESTION OF ALLOWING ANY DEDUCTION ON PRO RATA BASIS WOULD NOT ARISE. HENCE, THIS CONTENTION OF T HE ASSESSEE IS ALSO REJECTED AND I HOLD THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM ANY DEDUCTION ON PRO RATA BASIS IN RESPECT OF THE SHOPS AND COMMERCIAL ESTABLISHMENTS CONSTRUCTED AND SOLD BY THE ASSESSEE. GROUND NO.2 OF THE REVISED GROUNDS OF APPEAL IS ACCORDINGLY DISMISSED. 6. BEFORE US, THE LD. AR SHRI NIKHIL PATHAK SUBMITTED THAT THE RESPONDENT ALLOWED DEDUCTION U/S. 80IB(10) OF THE ACT FROM A.Y. 2010 - 11 ONWARDS AND REFERRED TO FORM NO. 10CCB UP TO A.Y. 2012 - 13 AT PAGES 93, 65, 44 AND ARGUED THAT THE RESPONDENT WITHOUT FOLLOWING THE CONSISTENCY IN GRANTING THE DEDUCTION DENIED SUCH BENEFIT TO THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. FURTHER, HE SUBMITTED THAT THERE WAS NO CHANGE OF FACTS IN THE YEAR UNDER CONSIDERATION AS C OMPARED TO EARLIER YEARS. HE PLACED RELIANCE IN THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF COMMISSIONER OF INCOME TAX VS. PAUL BROTHERS REPORTED IN 216 ITR 548 AND SUBMITTED THAT IT WAS NOT OPEN TO THE RESPONDENT TO DENY BENEFIT AS SOUGHT U/S. 80IB(10) OF THE ACT FOR SUBSEQUENT YEARS W HERE A BENEFIT OF SAID DEDUCTION WAS GIVEN IN THE EARLIER YEARS ON SATISFACTION OF CERTAIN CONDITIONS. HE ALSO REFERRED TO THE ORDER OF THIS TRIBUNAL IN THE CASE OF M/S. MESSUNG SYSTEMS VS. ASSTT. COMMISSIONER OF INCOME TAX IN ITA NOS. 1206 TO 1210/PN/2013 FOR A.YS. 1992 - 93 TO 1994 - 95, 1996 - 97 AND 1997 - 98, ORDER DATED 30 - 09 - 2016 AND SUBMITTED T HAT THIS TRIBUNAL BY FOLLOWING THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF PAUL BROTHERS (SUPRA) HELD THAT THE RESPONDENT COULD NOT DISTURB THE CONSISTENCY IN GRANTING THE BENEFIT U/S. 80IB(10) OF THE ACT UNLESS THE SAID BENEFIT WITHDRAWN F OR EARLIER YEARS. HE SUBMITTED THAT THE DEDUCTION U/S. 80IB(10) HAS BEEN GRANTED ON PRO - RATA BASIS FOR ALL THE EARLIER ASSESSMENT 5 ITA NO . 831/PUN/2017, A.Y. 2013 - 14 YEARS AND BY FOLLOWING THE SAID CONSISTENCY THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S. 80IB(10) OF THE ACT IN THE YEAR UNDER CONSIDERATION. 7. THE LD. DR, SHRI ALOK MALVIYA VEHEMENTLY OPPOSED THE SUBMISSIONS OF LD. AR. HE SUBMITTED THAT THE PROVISIONS OF SECTION 80IB(10)(D) CAN BE GRANTED ONLY ON SPECIFIC CONDITIONS THAT THE AGGREGATE BUILT UP AREA OF SHOPS AND OTHER C OMMERCIAL ESTABLISHMENTS DOES NOT EXCEED 3% OF AGGREGATE BUILT UP AREA OF THE SAID HOUSING PROJECT OR 5000 SQ. FT., WHICHEVER IS HIGHER. HE ARGUED THAT THE AO DENIED THE SAID BENEFIT ON THE REASON THAT THE ASSESSEE EXCEEDED THE BUILT UP AREA FOR SHOPS AND COMMERCIAL ESTABLISHMENTS OF 5000 SQ. FT. AND IF THE ARGUMENTS OF LD. AR IS ACCEPTED THAT IN GRANTING PRO - RATA DEDUCTION THE ENTIRE PROVISIONS CONTEMPLATED U/S. 80IB(10) WILL BE FRUSTRATED. HE STRONGLY SUPPORTED THE ORDER OF CIT(A). 8. WE NOTE THAT TH E ASSESSEE CLAIMED PRO - RATA DEDUCTION U/S. 80IB(10) FOR THE YEAR UNDER CONSIDERATION TO AN EXTENT OF RS.70 , 59 , 208/ - PAGE NO. 21 CONSISTING OF FORM NO. 10CCB FOR A.Y. 2013 - 14 AND THE COMPUTATION OF TOTAL INCOME AT PAGE NO. 3 SUPPORTS THE SAME. THE FORM NO. 10CCB CLEARLY SHOWS THAT THE DATE OF COMMENCEMENT ON 28 - 03 - 2007 AND INITIAL YEAR FOR CLAIMING DEDUCTION IS A.Y. 2008 - 09. IN COLUMN NO. 23 OF THE SAID FORM NO. 10CCB ALSO SHOWS THE CLAIM OF PRO - RATA BUILT UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMEN TS AT 2225.58 SQ. FT. OUT OF 5000 SQ. FT. THUS, IT IS CLEAR THE ASSESSEE CLAIMED PRO - RATA DEDUCTION IN RESPECT OF BUILT UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS FOR THE YEAR UNDER CONSIDERATION. 6 ITA NO . 831/PUN/2017, A.Y. 2013 - 14 9. COMING TO THE PREVIOUS A.Y. 2012 - 13 THE FO RM NO. 10CCB IS AT PAGE NO. 44 OF THE PAPER BOOK, WHEREIN IN COLUMN NO. 23 THE ASSESSEE SOUGHT PRO - RATA DEDUCTION FOR BUILT UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS AT 2225.58 SQ. MTR. AND THERE IS NO DENIAL BY THE RESPONDENT REVENUE REGARDING THE ALLOWANCE OF PRO - RATA DEDUCTION IN RESPECT OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS IN THE A.Y. 2012 - 13. 10. FURTHER, THE FORM NO. 10CCB FOR A.Y. 2011 - 12 IS PLACED AT PAGE 65 WHEREIN IN COLUMN NO. 23, THE CLAIM OF PRO - RATA DEDUCTION FOR SHOPS AN D OTHER COMMERCIAL ESTABLISHMENTS WAS CLAIMED AND IT WAS ALLOWED BY THE RESPONDENT REVENUE VIDE ITS ORDER DATED 17 - 02 - 2014 U/S. 143(3) OF THE ACT. WE NOTE THAT THE AO DISCUSSED THE SAME IN PARA 3.2 THE PRO - RATA DEDUCTION ON THE BASIS OF DOCUMENTARY EVIDEN CES WAS ALLOWED IN TERMS OF FORM NO. 10CCB. THE LD. DR DID NOT BRING ON RECORD ANY FINDING CONTRARY TO THE ABOVE. 11. LIKEWISE THE FORM NO. 10CCB FOR A.Y. 2010 - 11 AND ASSESSMENT ORDER FOR A.Y. 2009 - 10 ARE PLACED AT PAGE NOS. 93 AND 123, RESPECTIVELY WH EREIN IT CLEARLY SHOWS THAT THE CLAIM OF ASSESSEE ON PRO - RATA BASIS AND THE AO ALLOWED THE SAME RESPECTIVELY. THEREFORE, IN OUR OPINION AS RIGHTLY POINTED OUT BY THE LD. AR THAT THE RESPONDENT REVENUE CONSISTENTLY ALLOWING THE DEDUCTION U/S. 80IB(10) OF T HE ACT FROM THE DATE OF INITIAL ASSESSMENT YEAR AND THERE WAS NO REASON SHOWN BY THE RESPONDENT REVENUE FOR DENIAL OF SUCH DEDUCTION IN THE YEAR UNDER CONSIDERATION. 12. COMING TO THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF PAUL BROTHERS (SUPRA) WHEREIN THE HONBLE HIGH COURT OF BOMBAY WAS PLEASED TO HOLD WHEN THERE WAS NO CHANGE IN THE FACTS WHICH WERE IN 7 ITA NO . 831/PUN/2017, A.Y. 2013 - 14 EXISTENCE DURING THE INITIAL ASSESSMENT YEAR, THE CLAIM OF EXEMPTION CANNOT BE WITHDRAWN. IN THE PRESENT CASE AS DISCUSSED ABOVE, THE FACT REMAINS UNDISPUTED THERE WAS NO CHANGE IN THE FACTS OF THE CASE AS COMPARED TO EARLIER YEARS. THEREFORE, IN OUR OPINION THE DECISION ON THE PRINCIPLE OF CONSISTENCY LAID DOWN BY THE HONBLE HIGH COURT OF BOMBAY IS CLEARLY APPLICABLE TO THE PRESENT C ASE. 13. REGARDING THE ORDER OF THIS TRIBUNAL AS RELIED BY THE LD. AR IN THE CASE OF M/S. MESSUNG SYSTEMS (SUPRA) WE FIND THE SIMILAR FACTS IN THE SAID CASE , THIS TRIBUNAL WHILE PLACING RELIANCE ON THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CAS E OF PAUL BROTHERS (SUPRA) HELD THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S. 80IB(10) OF THE ACT WHEN THE DEDUCTION OF EARLIER YEARS HAS NOT BEEN DISTURBED ANY OF THE AUTHORITIES. THE RELEVANT PORTION OF PARA 17 IS REPRODUCED HERE - IN - BELOW FOR BETTER UNDERSTANDING : 17. ACCORDINGLY, WE HOLD THAT WHERE THE BENEFIT OF DEDUCTION WAS AVAILABLE FOR PARTICULAR NUMBER OF YEARS, UNLESS THE SAME IS WITHDRAWN IN THE FIRST YEAR, IT CANNOT BE WITHDRAWN FOR THE SUBSEQUENT YEARS, PARTICULARLY WHEN THERE IS NO CHANG E IN THE FACTS. APPLYING THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. PAUL BROTHERS (SUPRA), M/S. DIRECT INFORMATION PVT. LTD. VS. ITO (SUPRA) AND SUBSEQUENTLY IN CIT VS. WESTERN OUTDOOR INTERACTIVE PVT. LTD. (SUPRA), WE HOLD THAT THE AS SESSEE IS ENTITLED TO THE DEDUCTION CLAIMED UNDER SECTION 80I OF THE ACT IN ASSESSMENT YEAR 1992 - 93, WHEREIN THE FIRST YEAR OF CLAIM OF DEDUCTION WAS ASSESSMENT YEAR 1991 - 92 AND SAME HAS NOT BEEN DISTURBED BY ANY OF THE AUTHORITIES TILL DATE. THE ASSESSING OFFICER IS THUS, DIRECTED TO ALLOW THE SAID CLAIM OF ASSESSEE. 14. IN THE LIGHT OF THE ABOVE OBSERVATIONS WITH THE HONBLE HIGH COURT OF BOMBAY AND BY THIS TRIBUNAL, WE HOLD THAT THE RESPONDENT REVENUE COULD NOT BRING ON RECORD THERE WAS CHANGE IN THE FACTS OF THE CASE IN THE YEAR UNDER CONSIDERATION COMPARED TO THE FACTS OF EARLIER YEARS IN ASSESSEES OWN CASE , THEREBY WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S. 80IB(10) OF THE ACT ON PRO - RATA BASIS BY FOLLOWIN G THE RULE OF 8 ITA NO . 831/PUN/2017, A.Y. 2013 - 14 CONSISTENCY . THEREFORE, THE ORDER OF CIT(A) IS NOT JUSTIFIED. ACCORDINGLY, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. 15. IN VIEW OF THE OUR DECISION IN ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE AS PRELIMINARY ISSU E IS ALLOWED , THE MAIN GROUNDS OF APPEAL BECOMES ACADEMIC, HENCE, REQUIRE NO ADJUDICATION. 16. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH SEPTEMBER, 2020 . SD/ - SD/ - ( P.M. JAGTAP ) ( S.S. VISWANETHRA RAVI ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 16 TH SEPTEMBER, 2020. RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A) - 2, AURANGABAD 4. THE PR. CIT - 2, AURANGABAD 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE