ITO 3(2)(4), MUMBAI V. OMEGA INVESTM,ENT & PROPERTIES LTD, MUMBAI

ITA 997/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83473 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 05-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A PANT
• Section: 80IB; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO.997/M/2013 ( AY: 2009 - 2010 ) ITO 3(2)(4), R.NO.673, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. / VS. OMEGA INVESTMENTS & PROPERTIES LTD, 34 - B, JOLLY MAKER CHAMBERS, NO.2, NARIMAN POINT, MUMBAI 21. ./ PAN : AAACO 0978 L ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI R.A. PANT, DR / RESPONDENT BY : SHRI RAKESH JOSHI / DATE OF HEARING :5.8.2014 / DATE OF PRONOUNCEMENT :5.8.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 5.2.2013 IS AGAINST THE ORDER OF THE CIT (A) - 4, MUMBAI DATED 30.11.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) JUSTIFIED IN ALLOWING DEDUCTION UNDER SECTION 80IB (10) OF THE INCOME TAX ACT OF RS. 1,03,79,815/ - IN RESPECT OF PROFIT DERIVED FROM DEVELOPMENT OF RESIDENTIAL BUILDING BY HOLDING THAT ASSESSEE IS COVERED BY PROVISO TO CLAUS E (A ) AND (B) OF SECTION 80IB (10) WITHOUT APPRECIATING THE FACT THAT THE PROJECT WAS APPROVED BY THE SLUM REHABILITATION AUTHORITY ON 7.10.2002 WHICH DID NOT FALL WITHIN THE PERIOD OF APPROVAL AS PER BO ARDS NOTIFICATION NO.2 OF 2011 . 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT (A) WAS JUSTIFIED IN HOLDING THAT REVISED PROJECT AND PLAN OF THE ASSESSEE WAS APPROVED CLAUSE (A) AND CLAUSE (B) OF SECTION 80IB (10) OF T HE ACT AND AS SUCH RIGORS OF CLAUSE (A) AND CLAUSE (B) WOULD NOT BE APPLICABLE TO THE PROJECT OF THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT AS PER EXPLANATION 1 TO CLAUSE (A) OF SECTION 80IB(10) OF THE ACT WHERE APPROVAL IN RESPECT OF THE HOUSING PROJ ECT HAD BEEN OBTAINED MORE THAN ONCE, SUCH PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING WAS APPROVED BY THE LOCAL AUTHORITY FOR THE FIRST TIME . 2 3. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, SHRI RAKESH JOSHI, LD CO UNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ABOVE MENTIONED GROUNDS AND MENTIONED THAT THE ONLY ISSUE RAISED BEFORE THE TRIBUNAL RELATES TO THE ALLOWABILITY OF DEDUCTION U/S 80IB (10) WHEN THE PROJECT IN QUESTION IS CLEARED AFTER APPROVAL OF THE SL UM REHABILITATION AUTHORITY. IT IS THE CLAIM OF THE ASSESSEE THAT THE DUE DATES FOR COMPLETION OF PROJECT PROVIDED UNDER SUBSECTION - 10 OF SECTION 80IB ARE NOT APPLICABLE TO THE PROJECT LIKE THIS IN VIEW OF THE IMMUNITY PROVIDED UNDER PROVISO TO CLAUSE (A) & (B) OF THE SAID SUB - SECTION 10. IT WAS DEMONSTRATED BEFORE US THAT THE CIT (A) EXAMINED THE SAID PROVISIONS READ WITH THE NOTIFICATION ISSUED BY THE CBDT IN THIS REGARD AND ALLOWED THE CLAIM OF THE ASSESSEE. 4. ON THE OTHER HAND, LD DR RELIED ON THE OR DERS OF THE REVENUE AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE CIT (A)S ORDER, WE FIND THE CIT ( A) HAS GIVEN THE FINDING CATEGORICALLY BY HOLDING THAT THE PROJECT IN QUESTION IS A SLUMP REHABILITATION PROJECT AND THE TIME LIMIT PROVIDED IN THE STATUTE WILL NOT BE APPLICABLE TO THE ASSESSEE IN VIEW OF THE PROVISO TO SECTION 80IB(10) . THE CONTENTS OF PARA 6.1 OF THE IMPUGNED ORDER ARE RELEVANT AND THE SAME READS AS UNDER: 6.1. THEREFORE, FROM THE PROVISO BELOW CLAUSE (B) OF SUB - SECTION 80IB(10), IT IS CLEAR THAT IF ANY PROJECT IS DECLARED WITHIN THE SCHEME FRAMED BY CENTRAL GOVERNMENT OR STATEMENT FRO M SLUM REHABILITATION / REDEVELOPMENT, THEN REGORS OF CLAUSE (A) AND CLAUSE (B) WILL NOT APPLY TO SUCH PROJECTS. THERE IS NO DENIAL OF THE FACT THAT THE PROJECT OF THE ASSESSEE HAS BEEN APPROVED AS SLUM REHABILITATION PROJECT BY SLUM REHABILITATION AUTHOR ITY OF MAHARAHTRA STATE AND THE APPROVAL HAS BEEN GIVEN ON 4.6.2004, THEREFORE, IT IS CLEARLY COVERED BY THE PROVISO BELOW CLAUSE (B) OF SUB - SECTION 80IB(10), WHEREAS, ANY OTHER RESTRICTION FOR DATE OF START AND COMPLETION PUT BY ANY NOTIFICATION OR INSTRU CTION ETC CANNOT OVERRIDE THE ACT OF PARLIAMENT. HENCE, CONSIDERING ANY SUCH NOTIFICATION AND HOLDING SUCH PROJECT OUT OF THE APPLICABILITY OF THE PROVISO BELOW CLAUSE (B) OF SUB - SECTION 80IB(10) BY THE AO IS NOT CORRECT. THE ASSESSEE HAS CORRECTLY RELIE D ON THE DECISION OF THE HONBLE ITAT IN THE CASE OF ASHA KASHIPRASAD RINGSHIA (SUPRA), WHICH IS DIRECTLY ON THE SAME ISSUE AND RELEVANT PORTION AS REPRODUCED BY THE ASSESSEE IN ITS SUBMISSIONS IS AGAIN REPRODUCED BELOW. THUS, RIGORS OF THE CONDITIONS ENU MERATED IN CLAUSES (A) AND (B) OF SECTION 80IB, HAS BEEN RELAXED BY THE RELAXED BY THE LEGISLATURE TO ACHIEVE CERTAIN SOCIO - ECONOMIC OBJECT AND, THEREFORE, PROVISO TO SECTION 80IB SHOULD BE GIVEN A LIBERAL INTERPRETATION SO AS TO NOT TO DEFEAT A GENUINE CL AIM FOR DEDUCTION BY A DEVELOPER WHO UNDERTAKES TO DEVELOP A HOUSING PROJECT IN A SLUM AREA UNDER THE SCHEME APPROVED BY THE CENTRAL OR STATE GOVT. THE CBDT WHICH HAD ISSUED THE NOTIFICATION AFTER MORE THAN FIVE YEARS OF THE AMENDMENT, HAS PUT A TIME LIMI T OF THOSE HOUSING PROJECTS WHICH HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON / OR AFTER 1 ST APRIL, 2004. SUCH A TIME LIMIT CAN DEFEAT THE BASIC PURPOSE OF THE PROVISO FOR WHICH IT WAS ENACTED AS IN THE SAID PROVISO, THE LIMIT PROVIDED IN CLAUSE (A) OF SE CTION 80IB(10) HAS 3 NOT BEEN SPECIFICALLY MADE APPLICABLE, THEREFORE, SUCH A TIME LIMIT CANNOT BE IMPOSED BY WAY OF SUBORDINATE LEGISLATION. SUCH NOTIFICATION CAN ONLY CLARIFY THE STATUTORY PROVISIONS AND NOT OVERRIDE THEM OR RESTRICT THE OPERATION OF THE MAIN ENACTMENT. THEREFORE, IN OUR CONSIDERED OPINION, THE TIME LIMIT OF APPROVAL ON / OR AFTER 1 ST APRIL, 2004 WILL NOT BE APPLICABLE IN THE CASE OF THE PROVISO TO SECTION 80IB(10). 6. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE CIT (A) HAS RIGH TLY ADJUDICATED THE ISSUE UNDER CONSIDERATION AND WE FIND NO INFIRMITY IN THE ORDER OF THE CIT (A). THEREFORE, THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMI SSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2014. S D / - S D / - (AMIT SHUKLA) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 5/08/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI