Assistant Commissioner of Income-tax, Pune V. M/s. Eisha Concord Realtoers, Pune

ITA 923/PUN/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6144 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 13-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: GOPAL ASWANI
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 923 /PUN/201 7 / ASSESSMENT YEAR : 20 1 2 - 13 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 7, PUNE ....... / APPELLANT / V/S. M/S. EISHA SUPERSHWA DEVELOPERS, 6 TH FLOOR, SAN MAHU COMPLEX, 5, BUND GARDEN ROAD, PUNE 411001 PAN : AACFE3247R / RESPONDENT ASSESSEE BY : SHRI GOPAL ASWANI REVENUE BY : SHRI S.B. PRASAD / DATE OF HEARING : 0 5 - 08 - 2019 / DATE OF PRONOUNCEMENT : 20 - 0 9 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 5, PUNE DATED 21 - 11 - 2016 FOR THE ASSESSMENT YEAR 201 2 - 13 . 2 ITA NO .923/PUN/2017, A.Y. 2012 - 13 2. THE SOLITARY ISSUE RAISED BY THE REVENUE IN APPEAL IS AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWI NG PRO - RATA DEDUCTION U/S. 80IB(10) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON A HOUSING PROJECT DEVELOPED BY THE ASSESSEE . 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS A BUILDER AND DEVELOPE R. THE ASSESSEE PROMOTED A HOUSING PROJECT UNDER THE NAME EISHA LOREALS AT KONDHWA KHURD, PUNE. THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF AFORESAID RESIDENTIAL PROJECT. IN ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED THAT THE ASSESSEE HAS VIOLATED CONDITIONS OF C LAUSE (E) AND (F) OF SECTION 80IB(10) OF THE ACT IN RESPECT OF TWO FLATS I.E. FLAT NO. B - 201 AND FLAT NO. B - 504 . CONSEQUENTLY, THE ASSESSING OFFICER DENIED THE BENEFIT OF DEDUCTION U/S. 80IB(10) ON THE ENT IRE PROJECT. AGGRIEVED BY THE ASSESSMENT ORDER DATED 27 - 03 - 2015, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER EXAMINING THE FACTS CAME TO THE CONCLUSION THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF C LAUSE (E) AND (F) OF SECTION 80IB(10) OF THE ACT , IN RESPECT OF TWO RESIDENTIAL FLATS. THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF VISHWAS PROMOTERS ( P.) LTD. VS. ASST. COMMISSIONER OF INCOME TAX REPORTED AS 214 TAXMAN 524 ALLOWED PROPORTIONATE DEDUCTION U/S. 80IB(10) ON ELIGIBLE UNITS OF THE HOUSING PROJECT. AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEAL. 3 ITA NO .923/PUN/2017, A.Y. 2012 - 13 4. SH RI GOPAL ASWANI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT IT IS A WELL SETTLED LAW , PRO - RATA DEDUCTION U/S. 80IB(10) IS ALLOWABLE ON ELIGIBLE UNITS OF A HOUSING PROJECT. THE LD. AR IN SUPPORT OF HIS CONTENTIONS PLACED RELIANCE ON THE FOLLOWING DE CISIONS : I . CIT VS. M/S. VANDANA PROPERTIES, 206 TAXMAN 584 (BOM); II . VISWAS PROMOTERS PRIVATE LIMITED VS. ASSISTANT COMMISSIONER OF INCOME TAX, 81 DTR 68 (CHENNAI); III . ASSISTANT COMMISSIONER OF INCOME TAX VS. M/S. EISHA CONCORD REALTORS IN ITA NO. 917/PUN/2017 FO R ASSESSMENT YEAR 2012 - 13 DECIDED ON 09 - 07 - 2019; IV . SUKHWANI CHAWLA COMBINE VS. ADDL. COMMISSIONER OF INCOME TAX IN ITA NO. 697/PUN/2015 FOR ASSESSMENT YEAR 2010 - 11 DECIDED ON 25 - 09 - 2017; V . ASST. COMMISSIONER OF INCOME TAX VS. M/S. NAMRATA DEVELOPERS IN ITA NOS. 1974 TO 1976/PUN/ 2016 FOR ASSESSMENT YEARS 2011 - 12 TO 2013 - 14 DECIDED ON 25 - 09 - 2018; AND VI . DY. COMMISSIONER OF INCOME TAX VS. M/S. SAI DRISHTI CONSTRUCTIONS IN ITA NO. 991/PN/2014 FOR ASSESSMENT YEAR 2010 - 11 DECIDED ON 15 - 02 - 2016. 5. ON THE OTHER HAND SHRI S.B. PRASAD REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR REVERSING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 6. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSE D THE ORDERS OF AUTHORITIES BELOW. THE ONLY ISSUE IN APPEAL IS AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN 4 ITA NO .923/PUN/2017, A.Y. 2012 - 13 ALLOWING PROPORTIONATE DEDUCTION U/S. 80IB(10) ON ELIGIBLE RESIDENTIAL UNITS OF THE HOUSING PROJECT. UNDISPUTEDLY, THE ASSESSEE HAS VIOLATED CONDITIONS SET OUT IN CLAUSE (E) AND (F) OF SECTION 80IB(10) IN RESPECT OF ONLY TWO FLATS. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRANTED PROPORTIONATE DEDUCTION U/S. 80IB(10) IN RESPECT OF REMAINING HOUSING PROJECT. THE HONBLE BOMBA Y HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. M/S. VANDANA PROPERTIES (SUPRA) HAS APPROVED THE CONCEPT OF PROPORTIONATE DEDUCTION U/S. 80IB(10) OF THE ACT. THE HONBLE MADRAS HIGH COURT IN THE CASE OF VISWAS PROMOTERS PRIVATE LIMITED VS. ASSI STANT COMMISSIONER OF INCOME TAX (SUPRA) HAS HELD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM PROPORTIONATE RELIEF ON THE UNITS OF A HOUSING PROJECT SATISFYING THE CONDITIONS LAID DOWN U/S. 80IB(10) OF THE ACT. THUS, THE HONBLE HIGH COURT UPHELD ALLOWABILITY OF PROPORTIONATE DEDUCTION U/S. 80IB(10) OF THE ACT. 7. THE TRIBUNAL IN VARIOUS DECISIONS HAS BEEN CONSISTENTLY ALLOWING PROPORTIONATE DEDUCTION TO THE EXTENT HOUSING PROJECT COMPLIES WITH ALL THE CONDITIONS UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. THE ASSESSEE HAS INTER ALIA PLACED RELIANCE ON THE DECISION OF CO - ORDINATE BENCH OF TRIBUNAL IN THE CASE OF ASSESSEES SISTER CONCERN VIZ. ASST. COMMISSIONER OF INCOME TAX VS. M/S. EISHA CONCORD REALTORS (SUPRA). IN THE SAID CASE, THERE WAS VIOL ATION OF PROVISIONS OF CLAUSE (E) AND (F) OF SECTION 80IB(10) OF THE ACT IN RESPECT OF CERTAIN RESIDENTIAL UNITS. THE CO - ORDINATE BENCH ALLOWED PROPORTIONATE DEDUCTION U/S. 80IB(10) ON THE FLATS WHERE THERE WERE NO VIOLATION S . THE FINDINGS OF CO - ORDINATE ON THIS ISSUE ARE AS UNDER : 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LIMITED ISSUE WHICH ARISES BEFORE US IS THAT WHERE THERE IS VIOLATION OF PROVISIONS OF 5 ITA NO .923/PUN/2017, A.Y. 2012 - 13 CLAUSES (E) AND (F) OF SECTION 80IB(10) OF THE ACT, WHEREIN MORE THAN O NE FLAT WAS ALLOTTED TO AN INDIVIDUAL, THEN THE ASSESSEE IS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON SUCH FLATS. HOWEVER, THE ASSESSEE IS ENTITLED TO CLAIM THE PROPORTIONATE DEDUCTION ON THE BALANCE FLATS WHICH ARE PART O F HOUSING PROJECT, EXCLUDING THE ONES WHICH HAD VIOLATED THE PROVISIONS OF CLAUSES (E) AND (F) OF SECTION 80IB(10) OF THE ACT. 10. THE TRIBUNAL IN THE CASE OF ACIT VS. M/S. NAMRATA DEVELOPERS (SUPRA) VIDE PARA 20 HAD OBSERVED AS UNDER: - 20. WE HAVE HE ARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF PROJECT LEELAWATI GREENS . UNDER THE PROVISIONS OF SECTION 80IB(10)(F) OF THE ACT, WHICH CAME INTO FORCE W.E.F. 19.08.2009 , WHERE MORE THAN ONE RESIDENTIAL UNIT WAS ALLOTTED TO PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UNIT IN SUCH HOUSING PROJECT IS TO BE ALLOTTED TO THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR HINDU UNDIVIDED FAMILY IN WHI CH SUCH INDIVIDUAL WAS THE KARTA OR ANY PERSON REPRESENTING SUCH INDIVIDUAL, THEN WHERE THE ASSESSEE HAS VIOLATED THE PROVISIONS OF THE ACT, WOULD NOT BE ELIGIBLE FOR THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. IT MAY BE POINTED OUT THAT THE ASSESSEE HAD VIOLATED THE AFORESAID PROVISIONS OF CLAUSE (F) OF SECTION 80IB(10) OF THE ACT, WHEREIN FLAT NOS.A8 - 302 AND 303 WERE ALLOTTED TO MRS.KHUSHBOO KULARIA AND MR. ASHOK KULARIA (WIFE & HUSBAND) AND A2 - 103 AND 104 WERE ALLOTTED TO MRS. SNEHLATA JOSH I AND MR. VASANT HOSHI (WIFE & HUSBAND). THE ASSESSING OFFICER THUS, DENIED ENTIRE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE CIT(A) WAS OF THE VIEW THAT TWO UNITS ALLOTTED TO SPOUSES OF INDIVIDUAL BEING A8 - 302 AND A2 - 103 HAD VIOLATED THE CO NDITIONS OF SECTION 80IB(10)(F) OF THE ACT. HE RELIED ON THE RATIO LAID DOWN BY THE HON BLE HIGH COURT OF MADRAS IN CIT VS. ARUN EXCELLO FOUNDATION PVT. LTD. REPORTED IN 86 DTR 99 (MAD) AND VISHWAS PROMOTERS PVT. LTD. VS. ACIT REPORTED IN 81 DTR 58 (MAD) A ND WAS OF THE VIEW THAT THE ASSESSEE WAS ENTITLED TO CLAIM PRORATA DEDUCTION ON THE PROFITS OF BALANCE PROJECT EXCLUDING TWO FLATS WHICH WERE ALLOTTED TO SPOUSES OF INDIVIDUALS. WE ARE IN CONFORMITY WITH THE FINDINGS OF CIT(A), WHERE THE VIOLATION OF CLAUS E (F) OF SECTION 80IB(10) OF THE ACT HAS BEEN MADE BY THE ASSESSEE, THEN IN RESPECT OF PROFITS ON FLATS ALLOTTED TO SPOUSES OF INDIVIDUALS IS TO BE EXCLUDED AND IS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE CIT(A) HAS ALR EADY DIRECTED THE ASSESSING OFFICER TO VERIFY THE CORRECTNESS OF PROFITS WORKED OUT BY THE ASSESSEE ON SALE OF ABOVE SAID FLATS AND CONSEQUENTLY, UPHOLDING THE SAID DIRECTIONS, WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 11. THE ISSUE ARISING BEFORE US IS SIMILAR TO THE ISSUE BEFORE THE TRIBUNAL AND FOLLOWING THE SAME PARITY OF REASONING AND IN VIEW OF CLEAR MANDATE OF THE LEGISLATURE, THE ASSESSEE IS NOT ENTITLED TO CLAIM ANY DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF FOUR FLAT S AGAINST WHICH THERE IS VIOLATION OF CLAUSES (E) AND (F) OF SECTION 80IB(10) OF THE ACT. HOWEVER, THE ASSESSEE IS ENTITLED TO CLAIM PROPORTIONATE DEDUCTION IN RESPECT OF BALANCE FLATS SOLD BY ASSESSEE IN THE AFORESAID HOUSING PROJECT. UPHOLDING THE ORDER OF CIT(A), WE DISMISS THE GROUND OF APPEAL RAISED BY REVENUE. 8 . THUS, IN VIEW OF THE FACTS OF THE CASE AND THE DECISIONS DISCUSSED ABOVE, WE FIND NO INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME TAX 6 ITA NO .923/PUN/2017, A.Y. 2012 - 13 (APPEALS) IN ALLOWING PROPORTIONATE DEDUCTION U/S. 80IB(10) OF THE ACT ON ELIGIBLE UNITS OF HOUSING PROJECT . THE IMPUGNED ORDER IS UPHELD AND THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 9. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 20 TH DAY OF SEPTEMBER, 2019. SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 20 TH SEPTEMBER, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 5, PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 4, PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE