ACIT, Central Circle - XXI, Kolkata, Kolkata v. M/s. Malayalya Construction Ltd, Kolkata

ITA 1127/KOL/2012 | 2008-2009
Pronouncement Date: 11-07-2013

Appeal Details

RSA Number 112723514 RSA 2012
Assessee PAN AABCM7955L
Bench Kolkata
Appeal Number ITA 1127/KOL/2012
Duration Of Justice 11 month(s) 7 day(s)
Appellant ACIT, Central Circle - XXI, Kolkata, Kolkata
Respondent M/s. Malayalya Construction Ltd, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 11-07-2013
Appeal Filed By Department
Bench Allotted B
Tribunal Order Date 11-07-2013
Assessment Year 2008-2009
Appeal Filed On 03-08-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.S.SAINI ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.1127/KOL/2012 ASSESSMENT YEAR:2008-09 ACIT CENTRAL CIRCLE-XXI 18 RABINDRA SARANI KOLKATA-1 PODDAR COURT 5 TH FLOOR KOLKATA / V/S . M/S. MALAYALYA CONSTRUCTION LTD. 2D MANI KUNJ QUEENS PARK KOLKATA 700 019 [ PAN NO.AABCM 7955 L ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI D.K. SANOWAL SR- DR /BY RESPONDENT SHRI MANISH TIWARI AR /DATE OF HEARING 12-06-2013 /DATE OF PRONOUNCEMENT 11-07-2013 /O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XXIV KOLKATA (CIT(A) FOR SHORT) IN APP EAL NO. 945/ CIT(A) -XXIV/ 10(1) /11-12 DATED 30-04-2012. THE ASSESSMENT U/S. 143(3) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED B Y THE ITO WARD-10(1) KOLKATA VIDE HIS ORDER DATED 30-12-2010 FOR THE ASSESSMENT YEAR (AY) 2008-09. ITA NO.1127/KOL/2012 A.Y. 2008-09 ACIT CC-XXI KOL V. M/S. MALAYALYA CONSTN. LTD. PAGE 2 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF DEDUCTION CLAIMED BY ASSESSEE U /S. 80IB(10) OF THE ACT. FOR THIS REVENUE HAS RAISED FOLLOWING EFFECTIVE GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES IN T HE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE DISALLOWANCE OF DEDUCTION OF RS.47 79 883/- CLAIMED U/S. 80IB(1) OF THE ACT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES IN TH E CASE THE LD. CIT(A) HAS ERRED IN RECORDING THE FINDING OF FACT THAT THE LAND IN QUES TION WAS PURCHASED BY THE APPELLANT COMPANY FROM THE LAND OWNERS ALONG WITH SANCTION PL AN GRANTED BY PANCHAYAT AND ALLOWING THE RELIEF FOR DEDUCTION U/S. 80IB(10) OF THE ACT WHEREAS THE REGISTERED DEED FOR PURCHASE OF THIS PROPERTY DOES NOT STIPULATE FOR PURCHASE OF AN Y SANCTION PLAN. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE-COMPA NY ALONG WITH 17 OTHER CO- OWNERS IS ENGAGED IN DEVELOPING AND BUILDING HOUSIN G PROJECT AT RAJARHAT. THE RETURN OF INCOME WAS FILED BY ASSESSEE ON 26-09-2008 ON TH E BASIS OF TAX AUDITED REPORT U/S. 44AB OF THE ACT DISCLOSING GROSS PROFIT (GP) TOTAL INCOME AT NIL AFTER CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT AT RS.47 97 883/ -. THE ASSESSING OFFICER (AO) COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT AND MADE DISALLOWANCE ON THE BASIS THAT THE APPROVAL OF THE LOCAL AUTHORITY FOR HOUSIN G PROJECT WITHIN THE MEANING OF SECTION 80IB(10) OF THE ACT MUST BE IN THE ASSESSEE S NAME. THE PLAN WAS APPROVED BY RAJARHAT-BISHNUPUR-I PANCHAYAT PRADHAN ON 10-08 -2005 IN THE NAME OF KADER ALI BISWAS AND EUSUF ALI BISWAS FROM WHOM THE ASSESSEE- COMPANY PURCHASED THE LAND. THE AO IS OF THE VIEW THAT THE FIRST AND PRIME REQU IREMENT IS NOT FULFILLED. HE ALSO REFERRED TO REVISED RULES BY GOVT. OF WEST BENGAL A ND HAS DRAWN ADVERSE INFERENCE BY STATING THAT THE PLAN WAS REQUIRED TO BE VETTED BY ZILA PARISAD. THE AO HAS FAILED TO CONSIDER THAT THE LAND FOR THE HOUSING PROJECT WAS PURCHASED ON 23-09-2005 AND AFTER GETTING SANCTIONED PLAN THE PROJECT WAS DEVELOPED A ND BUILT BY THE ASSESSEE-COMPANY AND ITS CO-OWNERS. MOREOVER THE PLAN WAS SANCTIONE D BY THE COMPETENT AUTHORITY OBVIOUSLY AFTER COMPLETION OF ALL THE REQUIRED FORM ALITIES AND PAYMENT OF REQUISITE SANCTION FEES. THE PROJECT HAS SINCE BEEN COMPLETED AND COMPLETION CERTIFICATE ALSO ISSUED BY THE AUTHORITY AND COPY OF WHICH WAS FILED IN COURSE OF ASSESSMENT ITA NO.1127/KOL/2012 A.Y. 2008-09 ACIT CC-XXI KOL V. M/S. MALAYALYA CONSTN. LTD. PAGE 3 PROCEEDINGS. THE OBSERVATION OF AO THAT PROPER SANC TION OF LOCAL AUTHORITY IS NOT AVAILABLE FOR CONSTRUCTION MAKES A STRANGE READING. HENCE THE DENIAL OF CLAIM U/S. 80IB(10) OF THE ACT IS WRONG. AGGRIEVED ASSESSEE P REFERRED APPEAL BEFORE CIT(A) WHO ALLOWED THE CLAIM OF ASSESSEE VIDE PARA-2.3 BY OBSERVING AS UNDER:- 2.3. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE LD. A/R AND ALSO GONE THROUGH THE ASSESSMENT ORDER. IN THE INSTANT CASE THE SANCTION PLAN APPROVED BY PRADHAN OF RAJARHAT- BISHNUPUR-I PANCHAYAT ON 10.08.2005 FOR PROPOSED 5 STORIED RESIDENTIAL BUILDING WAS IN THE NAME OF KADERE ALI BISWAS AND EUSUF ALI BISWAS AT J L O.28 TOUZI-2118 R.S.-50 MOUZA BHATINDA PS- DAG NO.667 (PART) 668 669 & 672 (PART ). HOWEVER THE LAND IN QUESTION WAS PURCHASED BY THE APPELLANT COMPANY FROM THESE LAND OWNERS ALONG WITH SANCTION PLAN GRANTED BY PANCHAYET. THE LD. A/R HAS EXPLAINED THA T ACCORDING TO PREVAILING LAW PLAN SANCTIONED BY LOCAL AUTHORITY OR PANCHAYET REMAINS VALID FOR FIVE YEARS AND MAY BE RENEWED SUBSEQUENTLY. IT IS EXPLAINED THAT WHERE AN Y PERSON PURCHASES ANY LAND ALONG WITH THE SANCTION PLAN HE IS FREE TO MAKE CONSTRUCTION A S PER THE SANCTION PLAN UNLESS THE VALIDITY PERIOD OF 5 YEARS HAS EXPIRED. SECTION 80IB(1) PRESCRIBES THAT THE P ROJECT HAS TO BE APPROVED BY THE LOCAL AUTHORITY AND THE IS NO NEED FOR SEPARATE APPROVAL IN THE NAME OF THE ASSESSEE WHO UNDERTAKES THE DEVELOPMENT OF THE BUIL DING. AS PER THE PROVISION OF SECTION 80IB(10) ANY ASSESSEE IS ELIGIBLE FOR DEDUCTION OF 100% OF PROFIT DERIVED FROM BUILDING HOUSING PROJECT APPROVED BY LOCAL AUTHORITY BEFORE 31.03.2008 WHERE SUCH HOUSING PROJECT SATISFIED THE CONDITIONS SPECIFIED UNDER CLAUSE (A) (B) (C) AND (D) OF SECTION 80IB(10) AS EXISTED PRIOR TO0 AMENDMENT BY FINANCE (NO.2) ACT 2 009 W.E.F. 01.04.2010. THE LD. A/R HAS EXPLAINED THAT THE HOUSING PROJECT AT MANI RATNAM AT RAJARHAT SATISFIED ALL THE CONDITIONS SPECIFIED UNDER CLAUSE (A) TO (D) OF SECTION 80IBB AS IT EXISTED AT THE RELEVANT TIME. IN THE INSTANT CASE THE APPELLANT COMPANY ACQUIRED 1/8 TH SHARE IN LAND AT RAJARHAT IN THE YEAR 2005 ALONG WITH THE SANCTION PLAN FROM KADER ALI BI SWAS AND EUSUF ALI BISWAS. IN THE INSTANT CASE THE HOUSING PROJECT FOR CONSTRUCTION OF FIVE STORIED BUILDING WAS DULY SANCTIONED BY THE PRADHAN RAJARHAT BISHNUPUR-I ON 10.08.2005. THE CONSTRUCTION OF THE SAID HOUSING PROJECT WAS COMPLETED DURING THE F.Y 2 007-08 AND PARTLY SOLD TO FLAT PURCHASERS. CONSIDERING THE FACTS OF THE CASE I AM OF THE VIEW THAT THE APPELLANT COMPANY FULFILLS ALL THE CONDITIONS OF SECTION 80IB(1). ACC ORDINGLY THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE DEDUCTION OF RS.47 79 833/- U/S. 80IB. TH US THE APPELLANT COMPANY GETS A RELIEF OF RS.47 79 833/-. THIS GROUND OF APPEAL IS ALLOWED. AGGRIEVED NOW REVENUE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT ONLY GRIEVANCE OF THE REVENU E IN THIS CASE IS THAT THE SANCTION PLAN APPROVED BY PRADHAN OF RAJARHAT-BISHNUPUR-I PA NCHAYAT IS IN THE NAME OF KADER ALI BISWAS AND EUSUF ALI BISWAS AT JL NO. 28 TOUZI-2118 RS-50 MOUZA BHATINDA PS- DAG NO.667(PART) 668 669 & 672 (PART ). BEFORE US IT WAS STATED THAT HOUSING PROJECT WAS APPROVED BY PRADHAN OF RAJARHAT -BISHNUPUR-I GRAM PANCHAYAT ITA NO.1127/KOL/2012 A.Y. 2008-09 ACIT CC-XXI KOL V. M/S. MALAYALYA CONSTN. LTD. PAGE 4 BUT THE AREA OF LAND ON WHICH BUILDING WAS CONSTRUC TED WAS AT 8 921.48 SQ. MT. THE ASSESSEE HAS FURNISHED AREA OF EACH FLAT THE COMME RCIAL PLACE CONTAINING FOUR SHOPS AND AS PER COPY OF PLAN AREA OF EACH FLAT IS AT 1 6 58 SQ. FT. THERE IS NO DISPUTE THAT SECTION 80IB(10) OF THE ACT THAT DEDUCTION OF 100% OF PROFIT DERIVED FROM BUILDING OF HOUSING PROJECT APPROVED BY LOCAL AUTHORITY BEFORE 31-03-2008 WHERE SUCH HOUSING PROJECT SATISFIED THE CONDITION SPECIFIED U /S 80IB(1) CLAUSE (A) TO (D) AND IT IS NOT DENIED THAT SANCTION PLAN APPROVED BY PRADHAN O F RAJARHAT-BISHNUPUR-I GRAM PANCHAYAT ON 10-08-2005 FOR CONSTRUCTION OF FIVE ST ORIED RESIDENTIAL BUILDING WAS IN THE NAME OF KADER ALI BISWAS AND EUSUF ALI BISWAS A ND THE LAND IN QUESTION WAS PURCHASED BY ASSESSEE-COMPANY FROM THE LAND OWNERS ALONG WITH SANCTION PLAN GRANTED BY GRAM PRADHAN. WE ARE OF THE VIEW THAT IN THE PROVISIONS OF SECTION 80IB(10) THERE IS NO BAR FOR DEVELOPMENT TO DEVELO PING HOUSING PROJECT ON APPROVED SITE. THE APPROVED SITE MAY BE IN THE NAME OF DIFFE RENT PERSONS WHO HAS SOLD THIS APPROVED PROJECT TO ANOTHER DEVELOPER AND WHO WITHI N THE TIME-LIMIT PRESCRIBED U/S. 80IB(10) OF THE ACT HAS COMPLETED THE PROJECT. IN S UCH CIRCUMSTANCES WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF ASSESSEE AND WE CONFIRM THE SAME AND THE APPEAL OF REVENUE IS DISMISSED. 4. IN THE RESULT APPEAL OF REVENUE STANDS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 11.07.201 3 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER KOLKATA *DKP PRONOUNCED BY SD/- (PRAMOD KUMAR) SD/- (MAHAVIR SINGH) !'# - 11/07/2013 A.M. J. M ITA NO.1127/KOL/2012 A.Y. 2008-09 ACIT CC-XXI KOL V. M/S. MALAYALYA CONSTN. LTD. PAGE 5 %%& %%& %%& %%& '& '& '& '& / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ''%( ) / CONCERNED CIT 4. ) - / CIT (A) 5. &*+ %%%( %( / DR ITAT KOLKATA 6. + - ./ / GUARD FILE. BY ORD ER/ 0/2 '3 %(