DCIT 15(3), V. SHAH BUILDERS AND DEVELOPERS,

MA 513/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9147 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: misc
• Appeal Filed On: 20-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K GHOSH
• Section: 10

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI . , , !' !' !' !' #$ %& #$ %& #$ %& #$ %& , ,, , ' ' ' ' ( ( ( ( BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER )')' '* . / M.A. NO.513/MUM./2011 . / ITA NO. 3195 & 3196/MUM./2010 ,-$ . ( '* / '0/ / ASSESSMENT YEARS : 200506 & 200607 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE15(3), MUMBAI .. 12 / APPELLANT * V/S M/S. SHAH BUILDERS & DEVELOPERS 323329, ARENJA CORNER PLOT NO.71, SECTOR17, VASHI NAVI MUMBAI 400 705 .... 3412 / RESPONDENT 1 . / PERMANENT ACCOUNT NUMBER AATFS0744C ' 6 7 / REVENUE BY : MR. V. KRISHNAMOORTHY '* /8$ 6 7 / ASSESSEE BY : MR. A.K. GHOSH *' 6 $ / DATE OF HEARING 31.08.2012 % 90 6 $ / DATE OF ORDER 28.09.2012 % % % % / ORDER #$ %& #$ %& #$ %& #$ %& , ,, , ' ' ' ' : : : : / PER AMIT SHUKLA, J.M. THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E REVENUE AGAINST THE ORDER DATED 14 TH AUGUST 2011, PASSED IN THE APPEALS IN ITA NO.3195 & 3196/MUM./ 2010. IN THE SAID APPLICATION, FOLLOWING CONTENTION S HAVE BEEN RAISED. I) THE HONBLE ITAT HAS, VIDE ORDER ITA NO.3195 & 3196/MUM./2010 DATED 6TH MAY, 2011, DISMISSED THE DEPARTMENTAL APP EAL FOR THE A. YRS. 2005-2006 & 2006-2007 BY PLACING RELIANCE ON T HE JUDGMENT OF THE HONBLE HIGH COURT IN THE CASE OF M/S. BRAHMA A SSOCIATES (239 M/S. SHAH BUILDERS & DEVELOPERS 2 CTR 30), WHEREIN IT HAS BEEN HELD AS FOLLOWS UPTO 31 ST MARCH, 2005, DEDUCTION U/S.801B(10) IS ALLOWABLE TO HOUSING PROJ ECTS APPROVED BY THE LOCAL AUTHORITY HAVING RESIDENTIAL UNITS WITH C OMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DC RULES / REGULATIONS F RAMED BY THE RESPECTIVE LOCAL AUTHORITY IRRESPECTIVE OF THE FACT THAT THE PROJECT IS APPROVED AS HOUSING PROJECT OR RESIDENTIAL PLUS COMMERCIAL. TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT UPTO 3JS T MARCH, 2005, DEDUCTION U/S.801B(10) WOULD BE ALLOWABLE TO THE PR OJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RESIDENTIAL BUILDING WITH COMMERCIAL USER UPTO 10% OF THE TOTAL BUILT-UP AREA OF THE PLOT; CL AUSE (D) INSERTED IN SECTION 801B(10) W.E.F 1 ST APRIL, 2005 IS PROSPECTIVE AND NOT RETROSPECTIVE.. II) THE ASSESSEE IS A BUILDER AND DEVELOPER, WHICH IS ENGAGED IN DEVELOPING A HOUSING PROJECT, NAMELY SHAH ARCADE IN NAVI MUMBAI. THE SAID PROJECT WAS APPROVED BY THE LOCAL AUTHORIT Y, CIDCO, VIDE ITS APPROVAL LETTER DATED 26TH MARCH, 2004. THE CONSTRU CTION ACTIVITY OF THE SAID PROJECT, WHICH COMPRISED OF RESIDENTIAL AN D COMMERCIAL UNITS, COMMENCED DURING THE F. Y. 2004-2005 RELEVANT TO TH E A. Y. 2005- 2006. THE ASSESSES CLAIMED DEDUCTION U/S.801B OF TH E I. T. ACT AMOUNTING TO RS.86,63,749/- FOR A. Y. 2005-06 AND R S.58,65,675/- FOR A. Y. 2006-2007 AFTER EXCLUDING THE PROFIT ATTRIBUT ABLE TO THE COMMERCIAL AREA OF THE PROJECT, WHICH WAS IN EXCESS OF THE PERMISSIBLE LIMIT LAID DOWN IN CLAUSE (D) OF SECTION 801B(10) O F THE 1. T. ACT, 1961 AS AMENDED BY PINANCE ACT, 2004 W.E.F. 01.4.2005. S INCE THE ASSESSEE WAS REQUIRED TO FULFILL ALL THE CONDITIONS LAID DOWN IN SECTION 801B(10), THE A.O, DISALLOWED THE ENTIRE DEDUCTION CLAIMED U/S.801B(10) OF THE I. T. ACT, 1961. III) THE LD. CIT(A) DELETED THE SAID DISALLOWANCE R ELYING ON THE DECISION OF BRAHMA ASSOCIATES VS. JCIT RENDERED BY THE ITAT, PUNE, SPECIAL BENCH. IT WAS HELD THAT THE ISSUE REGARDING APPLICA BILITY OF PROVISION OF LAW UNDER CLAUSE (D) OF SUB-SECTION 10 OF SECTION 8 01B OF THE I. T. ACT, 1961 IS RELEVANT FOR THE HOUSING PROJECT APPROVED A FTER 01.4.2005 AND IT CANNOT BE PRESUMED TO BE DECISIVE AS APPLICABLE FOR OLD HOUSING PROJECTS APPROVED MUCH EARLIER THAN THE AMENDED PRO VISION OF LAW PROSPECTIVELY AND UPTO 10% OF THE BUILT UP AREA OF RESIDENTIAL PROJECT IS ALLOWABLE FOR COMMERCIAL COMPLEX OR CONVENIENT S HOPPING CENTRES AS HELD IN CASE OF BRAHMA ASSOCIATES. IV) THE HONBLE ITAT FAILED TO APPRECIATE THAT FOR A PROJECT TO BE ELIGIBLE FOR DEDUCTION U/S.8OLB(10), ALL CLAUSES WH ICH WERE INCORPORATED IN THE SAID PROVISIONS OF THE ACT, INCLUDING CLAUSE (D), WERE REQUIRED TO BE FULFILLED FOR ALL THE ASSESSMENT YEARS COMMENCIN G FROM A. YR. 2005- 2006. THE ASSESSMENT YEAR INVOLVED IN THE INSTANT C ASE IS A.Y. 2005- 06 AND HENCE THE AMENDED PROVISIONS OF SECTION 8OLB (10) OF THE I. T. ACT, 1961 ARE APPLICABLE. THE CONDITION SET OUT IN CLAUSE (D) OF SECTION 8OLB(10) WHICH PUTS A LIMITATION ON THE COMMERCIAL CONTENT VIS--VIS THE AGGREGATE BUILT-UP AREA IN CASE OF HOUSING PROJ ECTS DECLARING PROFITS & GAINS OF BUSINESS FOR AND FROM A. Y. 2005 -06 ONWARDS FOR ENABLING THE ENTERTAINMENT, OF CLAIM U/S.801B(10), HAS NOT BEEN SATISFIED BY THE ASSESSEE. THE AMENDMENT BROUGHT AB OUT BY INSERTION OF CLAUSE (D) IN SECTION 801B(L0) IS A SUBSTANTIVE AMENDMENT AND IS APPLICABLE PROSPECTIVELY FROM THE DATE THE LEGISLAT URE HAS SO SPECIFICALLY PROVIDED. M/S. SHAH BUILDERS & DEVELOPERS 3 V) CONSIDERING THE ABOVE MENTIONED FACTS, IT IS PRA YED THAT THE MISTAKE OF HOLDING THAT THE ASSESSEES CASE IS COVE RED BY THE JUDGMENT OF THE HIGH COURT IN THE CASE OF M/S. BRAHMA ASSOCI ATES MAY KINDLY BE RECTIFIED, TAKING INTO ACCOUNT THE VITAL FACT THAT THE ASSESSMENT YEAR INVOLVED HERE IS A.Y. 2005-06 AND HENCE THE ASSESSE ES CASE IS COVERED BY THE AMENDED PROVISIONS OF SECTION 8OLB(1 0) WHEREAS IN THE CASE OF M/S BRAHMA ASSOCIATES, THE ASSESSMENT YEAR INVOLVED WAS A.Y. 2003-04. 2. BOTH THE PARTIES BEFORE US, AT THE OUT SET, CONTEND ED THAT SIMILAR APPLICATION WAS FILED BY THE DEPARTMENT IN APPEAL FOR THE ASSES SMENT YEAR 200708, IN ASSESSEES OWN CASE IN M.A. NO.132/MUM./2012, ARISI NG OUT OF APPEAL IN ITA NO.6250/MUM./ 2010, WHEREIN, THE DEPARTMENTS MISC. APPLICATION WAS DISMISSED BY THE TRIBUNAL. 3. AFTER CAREFULLY GOING THROUGH THE MISC. APPLICATION AND THE ORDER PASSED BY THE TRIBUNAL, WE FIND THAT IDENTICAL ISSU E HAS BEEN DECIDED BY THE TRIBUNAL IN M.A. NO.132/MUM./2012, WHEREIN IT HAS B EEN OBSERVED AND HELD AS UNDER: 6. WE OBSERVE THAT THE TRIBUNAL WHILE CONFIRMING TH E ORDER OF ID CIT(A) BY DISMISSING THE APPEAL OF DEPARTMENT HAS P LACED RELIANCE ON ITS EARLIER ORDER IN THE ASSESSEES OWN CASE FOR AS SESSMENT YEARS 2005-06 AND 2006-07 AND HELD THAT THE TRIBUNAL HAS ALREADY DECIDED REGARDING DEDUCTION U/S.801B(10) OF THE ACT IN FAVO UR OF THE ASSESSEE. THE TRIBUNAL HAS STATED THAT MUMBAI BENCHES HAVE BE EN TAKING CONSISTENT VIEW THAT IF A PROJECT HAS BEEN APPROVED BEFORE THE EFFECTIVE DATE OF AMENDMENT BY WAY OF CLAUSE (D) I.E. 31.3.20 05, ASSESSEE IS ENTITLED TO DEDUCTION U/S.8OIB(10) OF THE ACT IF TH E OTHER CONDITIONS AS LAID DOWN IN THE SAID SECTION ARE FULFILLED. FURTHE R, THERE IS NO DISPUTE TE THE FACT THAT THE ADDITIONAL CLAIM OF THE ASSESS EE RS.61,42,053 IS INCLUDED IN THE CLAIM OF THE ASSESSEE OF RS.9,03,02 ,289 WHICH HAS BEEN CONSIDERED AND ADJUDICATED UPON BY ID C1T(A) A ND THE TRIBUNAL ALSO DEALT WITH GROUNDS NO.1 & 2 OF DEPARTMENT TOGE THER VIDE PARA 6 OF THE IMPUGNED ORDER AND DISMISSED BOTH GROUNDS BY CO NFIRMING THE ORDER OF ID C1T(A). THEREFORE, THERE IS NO MERIT IN THE CONTENTION OF ID D.R. THAT THE TRIBUNAL HAS NOT ADJUDICATED GROUND N O.2 OF APPEAL TAKEN BY THE DEPARTMENT . 4. KEEPING IN VIEW THE AFORESAID DECISION OF THE TRIBU NAL, WE FIND NO MERIT IN THE APPLICATION FILED BY THE DEPARTMENT AND, CON SEQUENTLY, THE SAME IS TREATED AS DISMISSED. M/S. SHAH BUILDERS & DEVELOPERS 4 5. 8 $; ' 6 )')' '* 8 * $ <= > 5. IN THE RESULT, REVENUES M.A. IS TREATED AS DISM ISSED. % 6 0 ? @*; 28 TH SEPTEMBER 2012 6 A > ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER 2012 SD/- . B. RAMAKOTAIAH ACCOUNTANT MEMBER SD/- #$ #$ #$ #$ %& %& %& %& ' ' ' ' AMIT SHUKLA JUDICIAL MEMBER MUMBAI, @* @* @* @* DATED: 28 TH SEPTEMBER 2012 % 6 3'$#) B)0$ / COPY OF THE ORDER FORWARDED TO : (1) '* /8$ / THE ASSESSEE; (2) ' / THE REVENUE; (3) C () / THE CIT(A); (4) C / THE CIT, MUMBAI CITY CONCERNED; (5) )'FA 3'$'* , , / THE DR, ITAT, MUMBAI; (6) AG/ H / GUARD FILE. 4)$ 3'$ / TRUE COPY %* / BY ORDER 3 . IJ / PRADEEP J. CHOWDHURY '8K '* I' / SR. PRIVATE SECRETARY , / < / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI