Appeal details
Counselvise Citation
96724514 RSA 2012
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 8 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-01-2014
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
18-11-2013
Assessment Year
2005-2006
Appeal Filed On
16-05-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 967 /PN/20 1 2 ASSESSMENT YEAR : 200 5 - 06 INCOME TAX OFFICER , WARD - 1(2), NAS HIK VS. M/S. CHAITANYA BUILDERS & LAND DEVELOPERS, PLOT NO. 9, MARUTI SANKUL, BEHIND SUMEET COMPANY, NASHIK (APPELLANT) (RESPONDENT) PAN NO. AACFC3306R APPELLANT BY: SMT. S. PRAVEENA RESPONDENT BY: WRITTEN SUBMISSION FILED DATE OF HEARING : 30 - 01 - 2014 DATE OF PRONOUNCEMENT : 31 - 01 - 2014 ORDER P ER R.S. PADVEKAR , JM : - IN THIS APPEAL , THE REVENUE HAS CHALLENGED T HE IMPUGNED ORDER OF THE LD. CIT(A) - I, NASHIK DATED 07 - 03 - 2012 FOR THE A.Y. 200 5 - 06. THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIV E GROUNDS IN THE APPEAL: 1. THE ID.CIT(A) HAS ERRED IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN LAW, QUASHING THE ASSESSMENT MADE BY THE A.O U/S 143(3) R.W.S 147 AND ALSO CONSIDERING THE ISSUE OF NOTICE U/S 148 ISSUED BY THE A O AS BAD IN LAW. 2. THE ID. CIT(A) HAS ERRED IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN LAW, IN ACCEPTING THAT THE ASSESSEE HAD DISCLOSED TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. 3. THE ID.CIT(A) HAS ERRED IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN LAW, DELETING THE ADDITION MADE BY THE AO DISALLOWING THE ASSESSEE'S CLAIM U/S. 80IB(10)OF THE ACT. 2 ITA NO. 967 /PN/2012, M/S. CHAITANYA BUILDERS & LAND DEVELOPERS, NASHIK 4. THE ID.CIT(A) HAS ERRED IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN LAW, IN ALLOWING THE ASSESSEE'S CLAIM THAT THE PROJECT WAS COMPLETED BEFORE 31/3/2008 AN D THEREBY DELETING THE ADDITION MADE BY THE AO DISALLOWING THE ASSESSEE'S CLAIM U/S. 80IB(10) OF THE ACT. 5. THE ID.CIT(A) HAS ERRED IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN LAW, IN ALLOWING THE ASSESSEE'S CLAIM THAT IT IS NOT MANDATORY TO MAKE CONSTR UCTION TO THE FULLEST EXTENT OF MAXIMUM PERMISSIBLE FSI. 6. THE ID. CIT(A) HAS ERRED IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN LAW ACCEPTING THE ASSESSEES CLAIM THAT IT HAD FULFILLED ALL THE CONDITIONS U/S. 80IB(10) OF THE ACT IN RESPECT OF THE CONSTRU CTION OF HOUSES AT GAT NO.66B AT CHUNCHALE SHIVAR. 7. THE ID.CIT(A) HAS ERRED IN THE FACTS & CIRCUMSTANCES OF THE CASE & IN LAW, IN CONSIDERING THE ADDITION MADE BY THE A.O ON ACCOUNT OF DISALLOWANCE U/S 40(A)(IA) AS IN - FRUCTUOUS. 2. THE FIRST ISSUE IS IN RESPECT OF THE CLAIM OF DEDUCTION U/S. 80IB(10) WHICH HAS BEEN DISALLOWED BY THE ASSESSING OFFICER BY RESORTING TO SEC. 147 OF THE INCOME - TAX ACT. THE ASSESSEE IS A BUILDER AND DEVELOPER. THE ASSESSEE HAS PURCHASED LAND IN GAT NO. 66/B AT CHUNCHALE SHIV AR, ADMEASURING 1H. 79.5R, UNDER DEVELOPMENT AGREEMENT DATED 28 - 01 - 2003. THE SAID LAND WAS SUBDIVIDED AND THE BUILDING PLANS WERE SUBMITTED FOR APPROVAL FROM TIME TO TIME. THE ASSESSING OFFICER HAS GIVEN THE DETAILS IN PARA NO. 2 OF THE ASSESSMENT ORDER. IN THIS CASE, THE PROJECT IN GAT NO. 66/B/3 WAS COMPLETED BEFORE 31 - 03 - 2008 AND IN RESPECT OF GAT NO. 66/B/2 PROJECT WAS COMPLETED BEFORE 29 - 11 - 2006. THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED U/S. 143(3) OF THE INCOME - TAX ACT IN WHICH THE DEDUCTION U /S. 80IB(10) WAS ALLOWED AS CLAIMED BY THE ASSESSEE. SUBSEQUENTLY WHILE COMPLETING THE ASSESSMENT FOR THE A.Y. 2008 - 09 , THE ASSESSING OFFICER EXPRESSED THE RESERVATION FOR ALLOWING THE DEDUCTION TO THE ASSESSEE U/S. 80IB(10) OF THE ACT. IN THIS 3 ITA NO. 967 /PN/2012, M/S. CHAITANYA BUILDERS & LAND DEVELOPERS, NASHIK YEAR THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S. 80IB(10) TO THE EXTENT OF RS.65,47,655/ - ON THE BASIS OF ASSESSMENT FOR THE A.Y. 2008 - 09. ON THE SAME IDENTICAL REASONS THE ASSESSEES CASE WAS RE - OPENED U/S. 147 OF THE ACT AND THE ASSESSEE WAS ISSUED NOTICE U/S. 1 48 OF THE ACT. 3. SO FAR AS A.Y. 2008 - 09 IS CONCERNED, THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT(A) AND LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE AGAINST THAT THE REVENUE HA D COME INTO APPEAL BEFORE THE ITAT, PUNE BY FILING THE APPEAL BEING ITA NO. 962/PN/2011 AND VIDE ORDER DATED 28 - 02 - 2012 , T HE REVENUES APPEAL WAS DISMISSED. SO FAR AS A.Y. 2005 - 06 WHICH IS BEFORE US IS CONCERNED, THE REASONS FOR REJECTING THE CLAIM OF DEDUCTION OF THE ASSESSEE U/S. 80IB(10) ARE BASED ON A.Y. 2008 - 09. SO FAR AS A.Y. 2008 - 09 IS CONCERNED, AT LEAST AT THE TRIBUNAL LEVEL THE MATTER HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. WE ARE REPRODUC ING THE OPERATIVE PART OF THE TRIBUNAL ORDER WHICH IS AS UNDER: 6. AFTER GOING THROUGH THE ABOVE SUBMISSIO NS AND MATERIAL ON RECORD WE FIND IT UNDISPUTED THAT THE SIZE OF THE PLOT OF LAND AS PER COMPLETED BUILDING PLAN ON THIS GAT NO.66/B/3 WAS 7368 SQ.MT. ON WHICH THE PERMISSIBLE BUILT UP AREA WAS 4569 SQ.MT. THEREFORE THE AREA IS MORE THAN 1 ACRE. DATE OF APPROVAL TO CONSTRUCT AS TAKEN FROM THE LOCAL AUTHORITY IS 26.06.2003. THE TOTAL BUILT UP AREA IS 2259 SQ.MT. ON WHICH UNITS ADMEASURING 300 SQ.FT. PER UNIT WERE CONSTRUCTED. UNDISPUTEDLY THE DATE OF COMPLETION IS 04.11.2006 WHICH IS EVIDENT FROM THE COM PLETION CERTIFICATE. CASE OF THE ASSESSING OFFICER IS THAT THE ASSESSEE CONSTRUCTED THE BUILDING ON THE PART OF THE LAND AND DID NOT CONSUME THE ENTIRE BUILT UP AREA. THEREFORE, IT CANNOT BE SAID THAT THE PROJECT HAS BEEN COMPLETED ON OR BEFORE 31.03.2008 . AS A MATTER OF CONVENIENCE THE PROVISIONS OF SUB - SECTION 10 OF SECTION 80IB AS APPLICABLE TO THE ASSESSMENT YEAR UNDER CONSIDERATION IS AS UNDER: THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31ST DAY OF MARCH, 2008 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, 4 ITA NO. 967 /PN/2012, M/S. CHAITANYA BUILDERS & LAND DEVELOPERS, NASHIK ( A ) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CON STRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, ( I ) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MAR CH, 2008; ( II ) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004, [BUT NOT LATER THAN THE 31 ST DAY OF MARCH, 2005], WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH TH E HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. (III) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2005, WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY EXPLANATION. FOR THE PURPOSES OF THIS CLAUSE, ( I ) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON T HE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; ( II ) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH H OUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY; ( B ) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE ( A ) OR CLAUSE ( B ) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANC E WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DECLARED TO 5 ITA NO. 967 /PN/2012, M/S. CHAITANYA BUILDERS & LAND DEVELOPERS, NASHIK BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS B EHALF; ( C ) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT - UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITY OF DELHI OR MUMBAI OR WITHIN TWENTY - FIVE KILOM ETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAN D AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; ( D ) THE BUILT - UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED THREE FIVE PER CENT OF THE AGGREGATE BUILT - UP AREA OF THE HOUSING PROJECT OR FIVE T HOUSAND SQUARE FEET, WHICHEVER IS HIGHER. 7. THERE IS NOTHING IN THE PROVISION TO SUGGEST THAT THERE IS A NECESSITY THAT ENTIRE PERMISSIBLE FSI ON THE PLOT OF LAND HAS TO BE CONSUMED. IT IS PREROGATIVE OF BUILDER TO CONSUME THE FSI ON THE PLOT AND THERE ARE VARIOUS FACTORS WHICH ARE IN THE DOMAIN OF BUILDER ITSELF. THERE IS NOWHERE ENVISAGED IN THE LAW THAT THE ENTIRE FSI SHOULD BE UTILISED FOR THE PURPOSE OF CLAIMING DEDUCTION U/S.80IB(10). THE ASSESSEE HAS FULFILLED ALL MAIN CONDITIONS OF SECTION 80I B(10) NAMELY SIZE OF THE PLOT AS PER COMPLETED BUILDING PLAN IS 7638 SQ.MT. AND PERMISSIBLE BUILT UP AREA WAS 4569 SQ.MT. WHICH IS MORE THAN 1 ACRE (4047 SQ.MT.). SECONDLY, THE APPROVAL TO CONSTRUCT FROM THE LOCAL AUTHORITY IS 21.06.2003 WHICH IS AFTER 01 .10.1998. THIRDLY, THE RESIDENTIAL UNIT DEVELOPED AND BUILT UP AREA OF 300 SQ.FT. PER UNIT WHICH IS LESS THAN 1500 SQ.FT. AS APPLICABLE TO NASHIK, AND LASTLY THE CONSTRUCTION HAS BEEN COMPLETED AS PER THE COMPLETION CERTIFICATE ON 04.11.2006 WHICH IS BEFO RE 31.03.2008. THUS ALL THE CONDITIONS HAVE BEEN COMPLIED BY THE ASSESSEE FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE ACT ON THE HOUSING PROJECT. THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE CLAIM ON THE GROUND THAT ASSESSEE HAS NOT UTILISED T HE FULLY PERMISSIBLE FSI. THERE IS NO SUCH PREREQUISITE CONDITION IN LAW FOR UTILISING THE ENTIRE FSI. IN VIEW OF THE ABOVE, CIT(A) WAS JUSTIFIED IN HOLDING THAT ASSESSEE HAS FULFILLED ALL REQUIREMENTS FOR CLAIMING DEDUCTION U/S.80IB(10). THEREFORE, AS SESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE CLAIM AND HE WAS RIGHTLY DIRECTED TO ALLOW 6 ITA NO. 967 /PN/2012, M/S. CHAITANYA BUILDERS & LAND DEVELOPERS, NASHIK THE CLAIM OF RS.33,49,895/ - MADE BY THE ASSESSEE U/S.80IB(10) OF THE ACT WHICH DOES NOT REQUIRE ANY INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME . 4 . WE, THER EFORE, FIND THAT ON MERIT ITSELF , THE REVENUES APPEAL IS NOT SUSTAINABLE. WE, ACCORDINGLY, DISMISS THE GROUND NOS. 1 TO 6. SO FAR AS THE GROUND NO. 7 IS CONCERNED, WE FIND THAT NO ADDITION IS MADE IN THE ASSESSMENT ORDER BY INVOKING THE PROVISIONS OF SE C. 40(A)(IA) O F THE ACT NOR THERE IS A NY DISCUSSION IN THE ASSESSMENT ORDER HENCE, THE SAID GROUND IS INFRUCTUOUS. ACCORDINGLY, SAME IS DISMISS. 5 . IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 31 - 01 - 201 4 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 31 ST JANUARY, 2014 COPY TO 1 2 ASSESSEE DEPARTMENT 3 THE CIT(A) - I, NASHIK 4 THE CIT - I, NASHIK 5 THE DR, ITAT, B BENCH, PUNE. 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE
Mehul