M/s. G.K.D. Developers, Pune V. Income-tax Officer,

MA 25/PUN/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1728 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER M.A. NOS.24 & 25/PN/2014 ARISING OUT OF ITA NOS.907 & 1462/PN/2008 (A.YS: 2004-05 & 2005-06) M/S. G.K.D. DEVELOPERS S.NO.12/3, VADGAON BUDRUK TAL. HAVELI, DIST. PUNE - 411051 PAN: AADFG4081E APPLICANT VS. ITO, WARD 1(3), PUNE RESPONDENT ITA NOS.907 & 1462/PN/2008 (A.YS: 2004-05 & 2005-06) M/S. G.K.D. DEVELOPERS S.NO.12/3, VADGAON BUDRUK TAL. HAVELI, DIST. PUNE - 411051 PAN: AADFG4081E APPELLANT VS. ITO, WARD 1(3), PUNE RESPONDENT APPLICANT BY : SHRI KISHORE PHADKE RESPONDENT BY : SHRI S.P. WALIMBE DATE OF HEARING : 28-02-2014 DATE OF PRONOUNCEMENT : 28-02-2014 ORDER PER BENCH: THESE TWO MISCELLANEOUS APPLICATIONS HAVE BEEN MOV ED BY THE ASSESSEE AGAINST THE EXPARTE ORDER OF THE TR IBUNAL IN ITA NO.907 & 1462/PN/2008 DATED 09-02-2011. ALL THE MISCELLANEOUS APPLICATIONS AND MAIN APPEALS ARE BEI NG DECIDED BY THIS COMMON ORDER FOR THE SAKE OF CONVEN IENCE. 2. THE ASSESSEE IN ITS MISCELLANEOUS APPLICATION HA S SUBMITTED THAT THE ASSESSEE WAS PREVENTED BY A REAS ONABLE CAUSE IN NOT ATTENDING THE HEARING ON THE DATE FIXE D BECAUSE OF CONFUSION ON THE PART OF AUTHORIZED REPRESENTATI VE OF ASSESSEE. IT IS A SETTLED LEGAL POSITION THAT THE ASSESSEE SHOULD NOT SUFFER FOR THE LAPSE ON THE PART OF AUTH ORIZED REPRESENTATIVE. SO, IN THE INTEREST OF JUSTICE, WE RECALL THE EXPARTE ORDER DATED 09.02.2011. 3. HAVING RECALLED THE ITA NOS.907 & 1462/PN/2008 T O ITS ORIGINAL NUMBER, WE DECIDE THE ISSUE AT HAND ON MER IT. IN ITA NO.907/PN/2008 FOR A.Y. 2005-06, THE ASSESSEE H AS FILED THE APPEAL ON THE FOLLOWING GROUNDS: L. THE LEARNED CIT (A)-I PUNE ERRED IN LAW AND ON F ACTS IN CONFIRMING DISALLOWANCE OF DEDUCTION U/S 80IB(10) AMOUNTING TO RS.93,43,296/- MADE BY THE INCOME-TAX OFFICER, WARD 1(3), PUNE. 2. ALTERNATIVELY AND WITHOUT PREJUDICE, THE LEARNED CIT (A)-I PUNE ERRED IN LAW AND ON FACTS IN NOT GRANTIN G PROPORTIONATE DEDUCTION U/S 80-IB(10) IN THE RATIO OF RESIDENTIAL AREA AS TO TOTAL AREA DEVELOPED. T HE OUGHT TO HAVE GRANTED THE PROPORTIONATE DEDUCTION CONSIDERIN G THE FACT THAT SECTION 80-IB(10) IS A DEDUCTION SECT ION DESERVING A LIBERAL INTERPRETATION. 3. THE APPELLANT CRAVES LEAVE TO ADD / MODIFY / ALT ER / DELETE ALL / ANY OF THE GROUNDS OF APPEAL. 4. THE ASSESSEE IS A DEVELOPER AND BUILDER. IN RES PECT OF PROFIT EARNED OUT OF ITS PROJECT NAMELY NIRMAL TOW NSHIP AT S.NO.12/3 AT WADAGAON (BK.), SINHGAD ROAD, PUNE, TH E ASSESSEE HAD CLAIMED DEDUCTION U/S.80IB(10) AMOUNTI NG TO 93,43,296/-. THE ASSESSING OFFICER NOTICED THAT TH E TOTAL AREA CONSTRUCTED OF THE PROJECT IS AT 1,53,105 SQ. FT. WHICH CONSISTS OF RESIDENTIAL AREA OF 1,48,143 SQ. FT. AN D SHOPS / COMMERCIAL AREA OF 4,962 SQ. FT. IT WAS FURTHER NO TED BY HIM THAT THE PROJECT WAS SANCTIONED BY THE PUNE MUNICIP AL CORPORATION AS RESIDENTIAL CUM COMMERCIAL RESIDENTI AL VIDE ITS ORDER NO.598/DP/BPO/3 ON 04.04.2001. SINCE THE PROJECT WAS SANCTIONED AS RESIDENTIAL CUM COMMERCIA L PORJECT AND THE BUILT UP AREA ON ACCOUNT OF SHOPS IN THE PR OJECT EXCEEDED 20,000 SQ. FT., THE ASSESSING OFFICER REJE CTED THE CONTENTION OF ASSESSEE WITH REGARD TO THE CLAIM U/S .80IB(10) BECAUSE OF COMMERCIAL AREA. THE SAME WAS UPHELD BY THE CIT(A), WHICH HAS BEEN OPPOSED BEFORE US, INTER SUB MITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIATES (2011) 333 ITR 289 (BOM), WHEREIN, IT WAS HELD AS UNDER: 30. IN THE RESULT, THE QUESTIONS RAISED IN THE AP PEAL ARE ANSWERED THUS : (A) UP TO MARCH 31, 2005 (SUBJECT TO FULFILLING OTH ER CONDITIONS), DEDUCTION UNDER SECTION 80-IB(10) IS ALLOWABLE TO HOUSING PROJECTS APPROVED BY THE LOCA L AUTHORITY HAVING RESIDENTIAL UNITS WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DEVELOPMENT CONTROL RULES/ REGULATIONS FRAMED BY THE RESPECTIVE LOCAL AUTHORITY. (B) IN SUCH A CASE, WHERE THE COMMERCIAL USER PERMITTED BY THE LOCAL AUTHORITY IS WITHIN THE LIM ITS PRESCRIBED UNDER THE DEVELOPMENT CONTROL RULES/REGULATION, THE DEDUCTION UNDER SECTION 80- IB(10) UP TO MARCH 31, 2005 WOULD BE ALLOWABLE IRRESPECTIVE OF THE FACT THAT THE PROJECT IS APPROV ED AS 'HOUSING PROJECT' OR 'RESIDENTIAL PLUS COMMERCIAL'. (C) IN THE ABSENCE OF ANY PROVISIONS UNDER THE INCOME-TAX ACT, THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT UP TO MARCH 31, 2005 DEDUCTION UNDER SECTION 80-IB(10) WOULD BE ALLOWABLE TO PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RESIDENTIAL BUILDING WITH COMMERCIAL USER UP TO 10 PER CENT. OF THE TOTAL BUILT-UP AREA OF THE PLOT. (D) SINCE THE DEDUCTION UNDER SECTION 80-IB(10) IS ON THE PROFITS DERIVED FROM THE HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY AS A WHOLE, THE TRIBUNAL WAS NOT JUSTIFIED IN RESTRICTING THE SECTI ON 80-IB(10) DEDUCTION ONLY TO A PART OF THE PROJECT. HOWEVER, IN THE PRESENT CASE, SINCE THE ASSESSEE HAS ACCEPTED THE DECISION OF THE TRIBUNAL IN ALLOWING SECTION 80-IB(10) DEDUCTION TO A PART OF THE PROJECT, WE DO NOT DISTURB THE FINDINGS OF THE TRIBUNAL IN THAT BEHALF. (E) CLAUSE (D) INSERTED TO SECTION 80-IB(10) WITH EFFECT FROM APRIL 1, 2005 IS PROSPECTIVE AND NOT RETROSPECTIVE AND HENCE CANNOT BE APPLIED FOR THE PERIOD PRIOR TO APRIL 1, 2005. THE APPEAL IS DISPOSED OF ACCORDINGLY WITH NO ORDER AS TO COSTS. 4.1 NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE O N BEHALF OF REVENUE. FACTS BEING SIMILAR, SO FOLLOWI NG THE SAME REASONING, WE SET ASIDE THE ORDER OF CIT(A) AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE ASSESSEES CLAIM O F DEDUCTION U/S. 80IB(10) AMOUNTING TO RS.93,43,296/- BECAUSE C LAUSE (D) INSERTED TO SEC.80IB(10) OF ACT WITH EFFECT FRO M 1 ST APRIL, 2005 IS PROSPECTIVE AND ASSESSEES PROJECT WAS PRIO R TO THIS CUT OFF DATE. SO, DEDUCTION U/S.80IB(10) OF ACT IS ALLOWABLE TO HOUSING PROJECT APPROVED BY LOCAL AUTHORITY HAVI NG RESIDENTIAL UNITS WITH COMMERCIAL USER TO THE EXTEN T PERMITTED UNDER DEVELOPMENT CONTROL RULES / REGULAT IONS FRAMED BY THE RESPECTIVE LOCAL AUTHORITY. 4.2 A SIMILAR ISSUE AROSE IN ITA NO.1462/PN/2008. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, WE SET ASIDE THE ORDER OF CIT(A), ACCORDINGLY, THE ASSESSING OFF ICER IS DIRECTED TO ALLOW THE ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) AMOUNTING TO RS.92,94,333/-. 5. IN THE RESULT, THE TWO MISCELLANEOUS APPLICATION S AS WELL AS TWO APPEALS FILED BY THE ASSESSEE ARE ALLOWED AS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF FEBRUARY, 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YA DAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED 28 TH FEBRUARY, 2014 GCVSR COPY TO:- 1) ASSESSEE 2) DEPARTMENT 3) THE CIT(A)-I, PUNE 4) THE CIT-I, PUNE 5) THE DR, B BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, ITAT, PUNE.