M/s. Aditya Corporation, Baroda V. The Income tax Officer, Ward-2(3), Baroda

MA 70/AHD/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6278 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 29-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Section: 80IB

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MUKUL KR. SHRAWAT, JM AND D.C.AGRAWAL , AM M/S ADITYA CORPORATION,2 ND FLOOR, DEVDEEP COMPLEX, NIZAMPURA, BARODA. VS. INCOME-TAX OFFICER, WARD 2(3), BARODA. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SUNIL TALATI, AR RESPONDENT BY:- SHRI R. K. DHANESTA, DR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THESE ARE TWO MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE FOR ASST. YEAR 2004-05 & 2005-06 ARISING OUT OF ITA NOS .766/AHD/2008 AND ITA NO.3224/AHD/2008 RESPECTIVELY. SINCE THEY INVOL VE COMMON ISSUES THEY ARE TAKEN UP TOGETHER FOR THE SAKE OF CONVENIE NCE. M.A. NO.70/AHD/2010 2. IN THIS MISC. APPLICATION THE ASSESSEE HAS POINT ED OUT THAT IT IS CARRYING ON THE BUSINESS OF CONSTRUCTION AND DEVELO PMENT OF RESIDENTIAL PROJECTS. IT CLAIMED DEDUCTION UNDER SECTION 80IB(1 0). THE SAID DEDUCTION WAS DENIED BY THE AO SAYING THAT THE ASSESSEE HAS C ONSTRUCTED SOME RESIDENTIAL UNITS WHICH WERE IN EXCESS OF 1500 SFT. AND THEREFORE, PROVISIONS CONTAINED IN SUB-SECTION (10) OF SECTION 80IB ARE NOT MA MO.70/AHD/2010 ARISING OUT OF ITA NO.766/AHD/2008 & MA NO.71/AHD/2010 ARISING OUT OF ITA NO.3224/AHD/2008 ASST. YEARS 2004-05 &2005-06 MA NO.70/AHD/2010 IN ITA NO.766/AHD/2008 & MA NO.71/AHD/2010 IN ITA NO.3224/AHD/2008 ASST. YEARS 2004-05 & 2005-06 2 APPLICABLE. HIS VIEW WAS AFFIRMED BY LD. CIT(A). WH EN THE MATTER CAM UP BEFORE THE TRIBUNAL THEN VIDE ITS ORDER DATED 28 TH NOEMBER, 2008, IT DISMISSED THE RELATED GROUND OF THE ASSESSEE BY OBS ERVING AS UNDER :- 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS, PERUSED THE MATERIAL PLACED BEFORE US AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO HAS DENIED D EDUCTION TO THE ASSESSEE U/S 80IB(10) ON THE BASIS OF VARIOUS ISSUE S BUT THE ISSUE UNDER APPEAL BEFORE US RELATED TO THE NON-COMPLIANCE WITH THE PRE-CONDITIONS LAID DOWN U/S 80IB(10) FOR GETTING SUCH DEDUCTION. THAT EACH OF THE RESIDENTIAL UNIT UNDER THE PROJECT DOES NOT HAVE A MAXIMUM BUILT UP AREA OF 1500 SFT. THE BUILT UP AREA OF 6 RESIDENTIAL UNI TS IS MORE THAN 1500 SFT. THE APPROVED AREAS OF THESE SIX RESIDENTIAL UNITS A RE MORE THAN 1500 SFT. ALTHOUGH THE ASSESSEE CLAIMED THAT IN RESPECT OF TH ESE UNITS THE ACTUAL BUILT UP AREA DOES NOT EXCEED 1500 SFT. EACH UNIT B UT THE ASSESSEE DID NOT PRODUCE ANY COGENT MATERIAL OR EVIDENCE IN SUPPORT OF THIS PLEA. IN OUR OPINION THE ONUS IS ON THE ASSESSEE TO PROVE THAT E ACH RESIDENTIAL UNIT UNDER THE PROJECT BUILT UP AREA MADE BY HIM DOES NO T HAVE MAXIMUM BUILT UP AREA MORE THAN 1500 SFT. SINCE THE ASSESSEE COUL D NOT PRODUCE ANY EVIDENCE TO SUPPORT HIS CASE, WE REJECT THE PLEA OF THE ASSESSEE THAT EACH RESIDENTIAL UNIT IS HAVING BUILT UP AREA LESS THAN 1500 SFT. THEREFORE, IN OUR OPINION THE ASSESSEE COULD NOT BE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. IT WAS SUBMITTED IN THE MISCELLANEOUS APPLICATION T HAT THE ALTERNATIVE ARGUMENTS OF THE ASSESSEE THAT PROPORTIONATE DEDUCT ION BE ALLOWED IN RESPECT OF THOSE UNITS WHICH ARE BELOW 1500 SFT. WA S NOT CONSIDERED. IN THIS REGARD THE TRIBUNAL HAD OBSERVED AS UNDER :- IN VIEW OF THE AFORESAID DISCUSSION, WE ARE OF THE VIEW THAT THE DEDUCTION U/S 80IB(10) ARE AVAILABLE TO AN UNDERTAKING ONLY I F IT COMPLIES WITH ALL THE CONDITIONS MENTIONED THEREIN. IN CASE THE UNDER TAKING FAILS TO COMPLY WITH ANY OF THE CONDITIONS, IT WILL NOT BE ENTITLED FOR THE DEDUCTION. THIS IS THE FACT ON RECORD THAT THE ASSESSEE IN THIS CASE H AS CONSTRUCTED SOME OF THE RESIDENTIAL UNITS, THE BUILT UP OF EACH AREA OF WHICH EXCEEDS 1500 SFT. THUS THERE IS A VIOLATION OF CONDITION (C) U/S 80IB (10) AND, THEREFORE, IN OUR OPINION, THE ASSESSEE WILL NOT BE ENTITLED FOR THE DEDUCTION. EVEN THE ASSESSEE WILL NOT BE ENTITLED FOR PROPORTIONATE DED UCTION. MA NO.70/AHD/2010 IN ITA NO.766/AHD/2008 & MA NO.71/AHD/2010 IN ITA NO.3224/AHD/2008 ASST. YEARS 2004-05 & 2005-06 3 3. IT WAS FURTHER SUBMITTED THAT IN THE ORDER PASSE D UNDER SECTION 264 BY THE COMMISSIONER FOR ASST. YEAR 2006-07 ON 18/12 /2009 DEDUCTION U/S 80IB HAS BEEN ALLOWED IN RESPECT OF RESIDENTIAL UNITS WHICH WERE BELOW 1500 SFT. IT WAS SUBMITTED THAT THERE WAS A F ACTUAL MISTAKE IN THE ORDER OF THE TRIBUNAL WHEREIN IT WAS MENTIONED THAT ASSESSEE HAS NOT CONSTRUCTED A SINGLE UNIT BELOW 1500 SFT. THE LD. A R BEFORE US IN PURSUANCE TO M.A. SUBMITTED THAT MATERIAL WAS ALREA DY PLACED ON RECORD OF CIT(A) IN RESPECT OF IMPUGNED FLATS WHICH SHOWE D THAT AREA OF THE FLAT WHEN CONSTRUCTED WAS LESS THAN 1500 SFT EVEN THOUGH IN THE SITE PLAN WHICH WAS APPROVED THE AREA HAS BEEN SHOWN MORE THA N 1500 SFT. THE LD. AR DREW OUR ATTENTION TO PAPER BOOK FILED WHICH WER E ALSO BEFORE CIT(A) WHICH INDICATED THAT AREA OF THE SIX FLATS I S LESS THAN 1500 SFT. 4. THE LD. DR ON THE OTHER HAND SUBMITTED THAT ONCE THE TRIBUNAL HAS GIVEN A CONCLUSION GIVING FINDING OF FACTS THAT ASS ESSEE HAS NOT FULFILLED THE CONDITIONS LAID DOWN U/S 80IB THEN IT IS NOT EN TITLED FOR DEDUCTION UNDER THAT SECTION. 5. WE HAVE HEARD THE PARTIES. IT IS A MATTER OF FAC T THAT ASSESSEE HAS SUBMITTED DEVELOPMENT AGREEMENT WHICH INDICATED THA T AREA OF SOME FLATS IS LESS THAN 1500 SFT. THESE DOCUMENTS WERE ANNEXED IN THE PAPER BOOK ON PAGES 26 TO 40. IT WAS CERTIFIED BY THE ASSESSEE THAT THESE PAGES WERE PRODUCED BEFORE THE LD. CIT(A) THOUGH THEY WERE NOT BEFORE THE AO. THE LD. CIT(A) IGNORED THESE DOCUMENTS AND ALSO ESCAPED THE ATTENTION OF THE TRIBUNAL. HOWEVER, WE ARE NOT PERSUADED BY THE ARGU MENT OF THE ASSESSEE THAT AFTER CONSIDERING THESE DOCUMENTS, CLAIM OF TH E ASSESSEE WILL BE ALLOWED FULLY OR PARTLY BUT THE FACTUAL POSITION OF THE MATTER AS TO WHETHER ASSESSEE HAS ACTUALLY BUILT BUNGALOWS HAVING AREA O F LESS THAN 1500 SFT. MA NO.70/AHD/2010 IN ITA NO.766/AHD/2008 & MA NO.71/AHD/2010 IN ITA NO.3224/AHD/2008 ASST. YEARS 2004-05 & 2005-06 4 REQUIRED TO BE EXAMINED. THIS ASPECT IS FURTHER REQ UIRED TO BE CONSIDERED WHILE DECIDING WHETHER ASSESSEE IS ENTITLED TO PART DEDUCTION UNDER SECTION 80IB OR NOT. IF HE IS, THEN TO WHAT EXTENT? . WE ACCORDINGLY FOR THE PURPOSE OF CONSIDERATION OF FACTUAL ASPECT ABOUT S IX BUNGALOWS HAVING AREA LESS THAN 1500 SFT., RECALL OUR ORDER BUT TO T HIS LIMITED EXTENT ONLY. IT WILL BE THE SUBJECT MATTER OF DISCUSSION DURING THE COURSE OF REGULAR HEARING AS TO WHETHER AND TO WHAT EXTENT DEDUCTION U/S 80IB CAN BE ALLOWED IN RESPECT OF SIX BUNGALOWS IF HAVING AREA LESS THAN 1500 SFT. AS A RESULT, THE MISC. APPLICATION IS ALLOWED SUBJECT TO THE ABOVE OBSERVATIONS. 6. IN MA NO.71/AHD/2010 SIMILAR ISSUE IS INVOLVED. AFTER CONSIDERING THE MISCELLANEOUS APPLICATION AND ARGUM ENTS OF THE PARTIES WE RECALL THE ORDER TO THE EXTENT MENTIONED IN ASST . YEAR 2004-05. 7. THE REGISTRY IS DIRECTED TO FIX THE APPEALS FOR HEARING IN DUE COURSE. 8. IN THE RESULT, BOTH THE MISCELLANEOUS APPLICATIO NS ARE ALLOWED AS INDICATED ABOVE. ORDER WAS PRONOUNCED IN OPEN COURT ON 21/4/11. SD/- SD/- (MUKUL KR. SHRAWAT) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED : 21/4/11. MAHATA/- MA NO.70/AHD/2010 IN ITA NO.766/AHD/2008 & MA NO.71/AHD/2010 IN ITA NO.3224/AHD/2008 ASST. YEARS 2004-05 & 2005-06 5 COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 8/4/2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 11/4/ 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..