M/s Prajay Engineers Syndicate Limited, Hyderabad V. DCIT,Circle - 16(3), Hyderabad

ITA 941/HYD/2014

• Counselvise Citation: 94122514 RSA 2014
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 16-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Section: 143(3); 80IB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.941/HYD/2014 ASSESSMENT YEAR 2007-2008 M/S. PRAJAY ENGINEERS SYNDICATE LIMITED HYDERABAD-500 033 PAN AACCP2287M VS. DCIT, RANGE 16(3) HYDERABAD 500 004. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. MOHD. AFZAL FOR REVENUE : MR. RAJAT MITRA DATE OF HEARING : 11.02.2015 DATE OF PRONOUNCEMENT : 13.02.2015 ORDER PER P.M. JAGTAP, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. CIT(A)-V, HYDERABAD DATED 20.08.20 11 WHEREBY HE CONFIRMED THE DISALLOWANCE MADE BY THE A .O. ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION UNDER SEC TION 80IB IN RESPECT OF PROJECT NAMELY PRAJAY SAI GARDENS. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WHICH IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AN D HOSPITALITY. THE RETURN OF INCOME FOR THE YEAR UNDE R CONSIDERATION WAS FILED BY IT ON 31.10.2007 DECLARI NG TOTAL INCOME OF RS.37,83,65,390. IN THE ASSESSMENT ORIGIN ALLY COMPLETED BY THE A.O. UNDER SECTION 143(3) VIDE AN ORDER DATED 03.11.2009, THE TOTAL INCOME OF THE ASSESSEE WAS DE TERMINED AT RS.40,98,69,780. THE SAID ORDER WAS SUBSEQUENTLY REVISED 2 ITA.NO.941/HYD/2014 M/S. PRAJAY ENGINEERS SYNDICATE LTD., HYDERABAD. BY THE LD. CIT VIDE HIS ORDER DATED 26.03.2012 UNDE R SECTION 263 WITH A DIRECTION TO THE A.O. TO RE-EXAMINE THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IB IN RESPEC T OF DIFFERENT PROJECTS INCLUDING THE PROJECT OF PRAJAY SAI GARDEN. AS PER THE DIRECTION OF THE LD. CIT, A FRESH ASSESSMEN T ORDER WAS PASSED BY THE A.O. UNDER SECTION 143(3) READ WITH S ECTION 263 ON 10.01.2013 DISALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IB AMOUNTING TO RS.28,68, 190 IN RESPECT OF PRAJAY SAI GARDEN PROJECT. FOR THIS CONCLUSION, HE RELIED ON THE DECISION OF THE TRIBUNAL IN ASSESS EES OWN CASE FOR A.Y. 2004-05 VIDE ITS ORDER DATED 23.07.2012 PA SSED IN ITA.NO.568/HYD/2009 WHEREIN A SIMILAR CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IB IN RESPECT OF PRAJ AY SAI GARDEN PROJECT WAS HELD TO BE NOT ALLOWABLE. 3. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECT ION 143(3) READ WITH SECTION 263, AN APPEAL WAS PREFERR ED BY THE ASSESSEE BEFORE THE LD. CIT(A) WHO DISMISSED THE SA ID APPEAL AND CONFIRMED THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80I B IN RESPECT OF PRAJAY SAI GARDEN PROJECT FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2004-05 RE NDERED VIDE ITS ORDER DATED 23.07.2012 (SUPRA). AGGRIEVED THE O RDER OF THE LD. CIT(A), ASSESSEE HAS PREFERRED THIS APPEAL BEFO RE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. T HE LEARNED COUNSEL FOR THE ASSESSEE HAS FAIRLY AND FRANKLY CON CEDED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL OF THE ASS ESSEE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE AND AGAIN ST THE 3 ITA.NO.941/HYD/2014 M/S. PRAJAY ENGINEERS SYNDICATE LTD., HYDERABAD. ASSESSEE BY THE ORDER OF THE TRIBUNAL DATED 23.07.2 012 PASSED IN A.Y. 2004-05 WHEREIN THE SIMILAR DISALLOWANCE MA DE ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION UNDER SEC TION 80IB IN RESPECT OF PRAJAY SAI GARDEN PROJECT WAS CONFIRM ED BY THE TRIBUNAL FOR THE FOLLOWING REASONS GIVEN IN PARAGRA PHS NO. 24 AND 25 OF ITS ORDER WHICH READ AS UNDER : 25. WE FIND THAT FROM THE PHOTOCOPIES OF THE SALE DEEDS FILED BEFORE US, IT IS SEEN THAT THE ASSESSEE COMPA NY HAS PLOTTED THE ENTIRE LAND AREA AND SOLD THE PLOTS TO DIFFERENT CUSTOMERS. AFTER PURCHASING THE PLOT, EACH PERSON H AS INDEPENDENTLY OBTAINED PERMISSION FROM THE CONCERN LOCAL AUTHORITY FOR CONSTRUCTION OF HOUSE ON HIS PLOT. LA TER, EACH PERSON HAS ENTERED INTO INDIVIDUAL CONSTRUCTION AGREEMENTS WITH THE ASSESSEE COMPANY. 26. NOWHERE IN THE FIRST APPROVAL DATED 01.09.1999 AND FINAL APPROVAL DATED 22.03.2002 THERE IS ANY REFERENCE TO ANY HOUSING PROJECT DEVELOPED BY THE ASSESSEE COMPANY. NO APPROVAL HAS BEEN ISSUED BY HUDA IN THE NAME OF THE ASSESSEE COMPANY AND HENCE WE ARE OF THE OPINION THAT THE ASSESSEE IS NOT ELIG IBLE FOR ANY DEDUCTION U/S.80IB(10) OF THE I.T. ACT. FOLLOWI NG THE RATIO OF THE DECISION IN THE CASE OF DR. MRS. RENUK A DATLA VS. CIT 240 ITR 463 (AP), WE REJECT THE ASSESSEES CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. WE ARE OF THE OP INION THAT THE CIT(A) HAS RIGHTLY HELD THAT THE FACTS OF THE CASE WOULD NOT SHOW THAT THE ASSESSEE WAS INDEPENDENTLY ENGAGED IN DEVELOPING AND CONSTRUCTING HOUSING PROJ ECT WITHIN THE MEANING OF SUB-SECTION (10) OF 80IB OF T HE ACT, HENCE, WE CONFIRM THE ORDER OF THE CIT(A) ON THIS I SSUE. 4 ITA.NO.941/HYD/2014 M/S. PRAJAY ENGINEERS SYNDICATE LTD., HYDERABAD. 5. AS THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDERATION AS WELL AS ALL THE MATERIAL FACTS REL EVANT THERETO ARE SIMILAR TO A.Y. 2004-05, WE RESPECTFULLY FOLLOW THE ORDER OF THE TRIBUNAL DATED 23.07.2012 FOR THE A.Y. 2004-05 (SUPRA) AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) CON FIRMING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF ASS ESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IB OF THE ACT I N RESPECT OF PRJAY SAI GARDEN PROJECT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.02.2015. (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 13 TH FEBRUARY, 2015 VBP/- COPY TO 1. M/S. PRAJAY ENGINEERS SYNDICATE LTD., 8-2-293/82/A, PLOT NO.1091, ROAD NO.41, NEAR PEDDAMMA TEMPLE, JUBILEE HILLS, HYDERABAD 500 033. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, RANGE 16(3), AAYAKAR BHAVAN, BASHEER BAGH, HYDERABAD 4. 3. CIT(A)-V, HYDERABAD 4. CIT-IV, HYDERABAD. 5. D.R. I.T.A.T. B BENCH, HYDERABAD.