DCIT, CHENNAI V. Arihant Foundations Housing Limited, CHENNAI

MA 57/CHNY/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5390 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: DEVENDRA KUM AR BHANDARI

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI ... , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER '' / M.P. NOS.55, 56 & 57/MDS/2016 (IN I.T.A. NOS.1689, 1775 & 1623/MDS/2012) ( )( / ASSESSMENT YEARS : 2007-08 & 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(1), CHENNAI. V. M/S ARIHANT FOUNDATIONS HOUSING LTD., NO.271, POONAMALLEE HIGH ROAD, CHENNAI - 600 010. PAN : AAACA 7402 P (+,( /PETITIONER) (+-,./ RESPONDENT) +,( 0 1 /PETITIONER BY : SHRI SHIVA SRINIVAS, JCIT +-,. 0 1 / RESPONDENT BY : SH.DEVENDRA KUMAR BHANDARI, FCA 2 0 3% / DATE OF HEARING : 03.02.2017 4') 0 3% / DATE OF PRONOUNCEMENT : 10.02.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE REVENUE HAS FILED THE PRESENT MISCELLANEOUS P ETITIONS ON THE GROUND THAT THERE IS AN ERROR IN THE ORDER O F THIS TRIBUNAL DATED 29.05.2015. 2 M.P. NOS.55 TO 57/MDS/16 2. SHRI SHIVA SRINIVAS, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80-IB OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE SET O FF OF LOSS OF ONE OF 80-IB UNIT AGAINST THE INCOME OF OTHER UNIT CANN OT BE MADE. THE ASSESSEE ALSO CLAIMED PROPORTIONATE ALLOCATION OF C OMMON EXPENSES BETWEEN 80-IB AND NON 80-IB PROJECTS. REF ERRING TO THE ORDER OF THIS TRIBUNAL, MORE PARTICULARLY PAGE 7 PA RA 5, THE LD. D.R. SUBMITTED THAT THIS TRIBUNAL FOUND THAT WHEN ONE PR OJECT IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB OF THE ACT AND OT HER PROJECT IS NOT ELIGIBLE, THE PROFIT OF ELIGIBLE UNIT ALONE HAS TO BE TAKEN. IN THE CASE BEFORE US, ACCORDING TO THE LD. D.R., BOTH THE UNIT S ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB OF THE ACT. SINCE ON E OF THE PROJECTS SUFFERED HEAVY LOSS, ACCORDING TO THE LD. D.R., SUC H A LOSS HAS TO BE SET OFF. THEREFORE, ONLY THE RESULTANT INCOME IS E LIGIBLE FOR DEDUCTION UNDER SECTION 80-IB OF THE ACT. TO THAT EXTENT THE RE IS AN ERROR IN THE ORDER OF THIS TRIBUNAL. 3. WE HAVE HEARD SHRI DEVENDRA KUMAR BHANDARI, THE LD. REPRESENTATIVE OF THE ASSESSEE ALSO. ACCORDING TO THE LD. REPRESENTATIVE, BOTH THE PROJECTS, NAMELY, ARIHANT VAIKUNT AND ARIHANT ESCAPADE ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB OF 3 M.P. NOS.55 TO 57/MDS/16 THE ACT. ARIHANT VAIKUNT SUFFERED A LOSS TO THE EXTENT OF ` 3.51 CRORES. THEREFORE, THE ASSESSEE CLAIMS THAT THE LO SS SUFFERED BY ONE OF THE UNITS CANNOT BE SET OFF AGAINST THE PROF IT MAKING UNIT. THIS TRIBUNAL, AFTER REFERRING TO THE WORD SUCH HO USING PROJECT FOUND THAT WHEN THE ASSESSEE IS CLAIMING DEDUCTION ONLY IN RESPECT OF ARIHANT ESCAPADE PROJECT, THE LOSS SUFFERED IN OTHER UNIT CANNOT BE SET OFF, THEREFORE, THERE IS NO ERROR IN THE ORD ER OF THIS TRIBUNAL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE QUESTION ARISES FOR CONSIDERATION IS WHEN TWO UNITS ARE ELIG IBLE FOR DEDUCTION UNDER SECTION 80-IB OF THE ACT, AND ONE OF THE UNIT S WAS MAKING LOSS, WHETHER SUCH A LOSS CAN BE SET OFF AGAINST TH E PROFIT MAKING UNIT. THIS ISSUE WAS CONSIDERED BY THIS TRIBUNAL A T PARA 5 OF THE ORDER AND AFTER CONSIDERING THE WORD SUCH HOUSING PROJECT, FOUND THAT WHEN THE ASSESSEE WAS DEVELOPING TWO PROJECTS, THE PROFIT OF THE ELIGIBLE UNIT ALONE HAS TO BE TAKEN. THERE IS NO NEED FOR SETTING OFF OF LOSS OF OTHER UNIT AGAINST THE PROJECT OF EL IGIBLE UNIT. IN VIEW OF THIS FINDING, THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT IT CANNOT BE SAID THAT THERE IS A PRIMA FACIE ERROR ON THE FA CE OF THE RECORD. THIS IS THE CONCLUSION REACHED BY THE TRIBUNAL AFTE R INTERPRETING THE WORD SUCH HOUSING PROJECT IN THE PROVISIONS OF TH E INCOME-TAX ACT. 4 M.P. NOS.55 TO 57/MDS/16 THEREFORE, THIS TRIBUNAL DO NOT FIND ANY ERROR IN T HE ORDER OF THIS TRIBUNAL, THEREFORE, THERE IS NO MERIT IN THE MISCE LLANEOUS PETITIONS OF THE REVENUE. 5. THE NEXT GROUND ARISES FOR CONSIDERATION IS WITH REGARD TO ALLOCATION OF EXPENSES. 6. WE HAVE HEARD SHRI SHIVA SRINIVAS, THE LD. DEPAR TMENTAL REPRESENTATIVE AND SHRI DEVENDRA KUMAR BHANDARI, TH E LD. REPRESENTATIVE FOR THE ASSESSEE. 7. WITH REGARD TO ALLOCATION OF ADMINISTRATIVE EXPE NSES AND COMMON EXPENSES AT PARA 8 OF THE TRIBUNALS ORDER, THIS TRIBUNAL FOUND THAT THE CIT(APPEALS) HAS RIGHTLY ALLOCATED T HE ADMINISTRATIVE AND COMMON EXPENSES ON THE RATIO BETWEEN 80-IB(10) PROJECTS AND NON-80-IB PROJECTS. ON THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IN M.P. NO.179/MDS/2015, THIS TRIBUNAL BY ORDER DATED 18.03.2016, RECTIFIED THE ORDER. IN VIEW OF THE OR DER OF THIS TRIBUNAL IN M.P. NO.179/MDS/2015, THIS TRIBUNAL FINDS THERE IS NO ERROR MUCH LESS PRIMA FACIE ERROR IN RESPECT OF THIS GROUND OF THE REVENUE. THEREFORE, THERE IS NO MERIT IN THE MISCELLANEOUS P ETITIONS FILED BY THE REVENUE. 5 M.P. NOS.55 TO 57/MDS/16 8. IN THE RESULT, ALL THE THREE MISCELLANEOUS PETIT IONS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 10 TH FEBRUARY, 2017 AT CHENNAI. SD/- SD/- (. !'# ! ) ( ... ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 10 TH FEBRUARY, 2017. KRI. 0 +37' 8')3 /COPY TO: 1. +,( / PETITIONER 2. +-,. /RESPONDENT 3. 2 93 () /CIT(A) 4. 2 93 /CIT 5. ': +3 /DR 6. ;( < /GF.