B.U.Bhandari Nandgude Patil Associates, Pune V. DCIT, Circle -3, Pune, Pune

ITA 99/PUN/2012

• Counselvise Citation: 9924514 RSA 2012
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 19-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: V L JAIN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 99/PN/2012 (ASSESSMENT YEAR 2008-09) M/S.B.U. BHANDARI NANDGUDE PATIL ASSOCIATES, 1182/1/3, FC. ROAD, SHIVAJINAGAR, PUNE-411005. .. APPELLANT PAN NO.AAGFB 8429C VS. DCIT, CIRCLE-3, PUNE .. RESPONDENT APPELLANT BY : SHRI V.L. JAIN RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 21-06-2013 DATE OF PRONOUNCEMENT : 24-06-2013 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 30-11-2011 OF THE CIT(A)-II, PUNE RELATING TO ASSES SMENT YEAR 2008-09. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROMOTERS, BUILDERS AND LAND DEVELOPERS. IT FILED ITS RETURN OF INCOME ON 28-08-2008 DECLARI NG TOTAL INCOME OF RS.97,27,020/- AFTER CLAIMING DEDUCTION U/S.80IB(10 ) AMOUNTING TO RS.1,43,75,009/- ON ACCOUNT OF ITS RESIDENTIAL PROJ ECT NAMED EDENN AT PUNE. THE ABOVE PROJECT IS EXECUTED ON A PLOT OF L AND ADMEASURING 41,600 SQ.MTRS WHICH IS MORE THAN ONE ACRE. THE PR OJECT HAS BEEN APPROVED BY PCMC VIDE COMMENCEMENT CERTIFICATE NO.0 3/2004 DATED 26-05-2004 AND ON THE BASIS OF PLAN SUBMITTED IN MA RCH 2004. THE PROJECT WAS COMPLETED ON 31-03-2009 VIDE COMPLETION CERTIFICATE NO. 2 69/2009 DATED 31-03-2009. SINCE THE BUILT UP AREA INCLUDING PROJECTIONS AND BALCONIES OF FLAT NO. 102 AND 103 IN C BUILDI NG EXCEEDED 1500 SQ.FT. THE ASSESSING OFFICER FOLLOWING HIS ORDER FO R A.Y. 2006-07 IN ASSESSEES OWN CASE HELD THAT THE ASSESSEE IS NOT E NTITLED TO DEDUCTION U/S.80IB(10) AMOUNTING TO RS.1,43,75,009/-. IN APP EAL THE LD. CIT(A) FOLLOWING HIS ORDER FOR A.Y. 2005-06, 2006-07 & 200 7-08 IN ASSESSEES OWN CASE UPHELD THE ACTION OF THE ASSESSING OFFICER . HE ALSO REJECTED THE CLAIM OF PROPORTIONATE DEDUCTION MADE BY THE AS SESSEE. 3. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING A DISALLOWANCE OF THE CLAIM U/S.80IB(10) OF RS.1,43 ,75,000/- FOR THE REASON THAT TWO RESIDENTIAL UNITS HAVE AN AREA EXCEEDING 1500 SQ.FT. WHEN THE TERRACE OPEN TO SKY WAS INCLUDED IN BUILT UP AREA. 2. WITHOUT PREJUDICE TO THE ABOVE THE LD. CIT(A) HA S ERRED ON FACTS AND IN LAW IN NOT ALLOWING A PRO-RATE CLAIM U /S.80IB(10) WITH REFERENCE TO THE ELIGIBLE PORTION OF THE HOUSING PR OJECT. 4. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET F ILED A COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A. Y. 2005-06, 2006-07 AND 2007-08 AND SUBMITTED THAT THE ISSUE STANDS DEC IDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL WHEREIN IT HAS BEEN HELD THAT REVENUE AUTHORITIES ARE NOT JUSTIFIED IN INCLUDING THE BALCONIES/OPEN TERRACES IN THE CALCULATION OF BUILT UP AREA AND TH E DEFINITION OF BUILT-UP AREA IN TERMS OF SECTION 80IB(10)(A) OF THE ACT CAN NOT BE APPLIED TO PROJECTS COMMENCED PRIOR TO 01-04-2005. THEREFORE, THIS BEING A COVERED MATTER IN FAVOUR OF THE ASSESSEE THE APPEAL FILED BY THE ASSESSEE SHOULD BE ALLOWED. 3 5. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND FAIRLY CONCEDED THAT THE ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ITS OWN CASE FOR THE 3 PRECEDING ASSESS MENT YEARS. 6. AFTER HEARING BOTH THE SIDES WE FIND THE ISSUE S TANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ITS OWN C ASE FOR THE PRECEDING 3 YEARS. WE FIND THE TRIBUNAL AT PARA 11 OF THE ORDE R IN ITA NO.1438 AND 1439/PN/2009 AND ITA NO.432/PN/2011 FOR A.YS. 2005- 06, 2006-07 AND 2007-08 RESPECTIVELY ORDER DATED 31-10-2012 HAS OBSERVED AS UNDER: 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. IN THIS CONNECTION, THE FIRST AND FOREMOST I SSUE IS WITH REGARD TO THE MEANING OF THE EXPRESSION 'BUILT-UP A REA' FOR THE PURPOSE OF CLAUSE (C) TO SEC. 80 IB(10) OF THE ACT. SEC. 80IB (14) (A) WAS INSERTED BY THE FINANCE (NO.2) AC T, 2004 W.E.F. 1-4-2005 PRESCRIBING THE DEFINITION OF THE E XPRESSION 'BUILT-UP AREA'. IN TERMS OF THE SAID DEFINITION, T HE 'BUILT-UP AREA' INTER-ALIA, INCLUDES THE AREA OF PROJECTIONS AND BALCONIES. THE MOOT POINT IS AS TO WHETHER THE SAID DEFINITION IS APPLICABLE IN RESPECT OF THE PROJECT IN QUESTION BEFORE US. ADMITTEDLY, IT IS EMERGING FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THE PROJECT OF THE ASSESSEE WAS APPROVED BY THE LOCAL AUTHORITY IN MA Y 2004 AND IT ALSO COMMENCED PRIOR TO THE 1-4-2005. THEREFORE, REVENUE AUTHORITIES ARE NOT JUSTIFIED IN INCLUDING THE BALCONIES/OPEN TERRACES IN THE CALCULATION OF 'BUIL T UP AREA' AND THE DEFINITION OF 'BUILT UP AREA' IN TERM S OF SEC. 80 IB (14) (A) OF THE ACT CANNOT BE APPLIED TO PROJECTS C OMMENCED PRIOR TO 1-4-2005. THE AFORESAID PROPOSITION IS IN LINE WITH THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HAWARE CONSTRUCTIONS (SUPRA) AS ALSO THE DE CISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PR IME PROPERTIES (SUPRA). SINCE THE DEFINITION OF 'BUILT- UP AREA CONTAINED IN SEC. 80IB(14)(A) OF THE ACT IS NOT APP LICABLE IN PRESENT CASE, BEING A PROJECT HAVING COMMENCED PRIO R TO 1- 4-2005, IN OUR CONSIDERED OPINION FOR SUCH LIKE SIT UATION, IT WOULD BE IN FITNESS OF THE THINGS THAT THE EXPRESSI ON 'BUILT-UP AREA' IS UNDERSTOOD AS PER THE DEVELOPMENT CONTROL RULES OF THE LOCAL AUTHORITY, WHICH HAS APPROVED SUCH A P ROJECT. 12. THUS, ON THE BASIS OF THE AFORESAID DISCUSSION, WE UPHOLD ASSESSEES ELIGIBILITY FOR THE CLAIM OF DEDU CTION U/S.80IB(10) OF THE ACT. 4 6.1 THUS, THE TRIBUNAL HAS UPHELD THE ASSESSEES EL IGIBILITY FOR THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. SINCE IN THE INSTANT CASE THE ASSESSEE HAS CONTINUED THE SAME PROJECT, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF T HE TRIBUNAL WE SET- ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESS ING OFFICER TO ALLOW THE CLAIM OF DEDUCTION MADE U/S.80IB(10) OF THE I.T . ACT, 1961. THE APPEAL FILED BY THE ASSESSEE IS ACCORDINGLY ALLOWED . 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF JUNE 2013 SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA ) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE DATED: 24 TH JUNE 2013 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-II, PUNE 4 CIT-II, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE