The DCITBharuch Circle,, Bharuch v. M/s. Nishit Construction, Bharuch

ITA 1478/AHD/2010 | 2005-2006
Pronouncement Date: 06-08-2010 | Result: Dismissed

Appeal Details

RSA Number 147820514 RSA 2010
Assessee PAN AAAPO0442N
Bench Ahmedabad
Appeal Number ITA 1478/AHD/2010
Duration Of Justice 3 month(s)
Appellant The DCITBharuch Circle,, Bharuch
Respondent M/s. Nishit Construction, Bharuch
Appeal Type Income Tax Appeal
Pronouncement Date 06-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 06-08-2010
Date Of Final Hearing 30-07-2010
Next Hearing Date 30-07-2010
Assessment Year 2005-2006
Appeal Filed On 06-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. N. PAHUJA AM) ITA NO.1478/AHD/2010 A. Y.: 2005-06 THE D. C. I. T. BHARUCH CIRCLE ABOVE BANK OF BARODA STATION ROAD BHARUCH VS M/S. NISHIT CONSTRUCTINO G/28 RAVI KIRAN COMPLEX ANKLESHWAR DIST. BHARUCH PA NO. AAAAPO 0442N (APPELLANT) (RESPONDENT) APPELLANT BY SHRI K. M. MAHESH DR RESPONDENT BY NONE O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI BARODA DATED 25 -01-2010 FOR ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUND: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) ERRED IN ALLOWING THE DEDUCTION U/S. 80 IB (10) OF RS.12 81 650/- AS CLAIMED BY THE ASSESSEE. 2. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE APPROVAL OF DEVELOPING AND BUILDING HOUSING PROJECT S WAS GRANTED TO THE ORIGINAL OWNER OF THE LAND AND NOT T O THE ASSESSEE WHO ACTED ONLY AS AN AGENT FOR EXECUTION OF THE PROJECT WHICH RIGHTS WERE OBTAINED BY THE ASSESSE E FIRM FROM THE ORIGINAL OWNERS. 3. THE LEARNED CIT(A) ALSO FAILED TO APPRECIATE THA T THE LAND BEING AN ESSENTIAL AND INTRINSIC PART OF DEVEL OPING AND BUILDING OF A HOUSING PROJECT APPROVAL IS GRANTED BY THE LOCAL AUTHORITY TO THE OWNER OF THE LAND FOR DEVELOPING A ND BUILDING HOUSING PROJECTS THEREON AND ANY OTHER PERSON TO WHOM HE ENTRUSTS THE WORKS CONNECTED WITH THE EXECUTION OF THE PROJECT INSTEAD OF TAKING IT UP HIMSELF CANNOT BE SAID TO BE AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJE CTS APPROVED BY THE LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 80 IB(1) OF THE ACT. ITA NO.1478/AHD/2010 DCIT BHARUCH VS M/S. NITISH CONSTRUCTION 2 2. WE HAVE HEARD THE LEARNED DR AND PERUSED THE FIN DINGS OF THE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON RECORD. HOWEVER NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE THROUGH REGISTERED POST. THE ASSESSEE IS THEREFORE PROCEE DED EX-PARTE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED RETURN OF INCOME SHOWING GROSS TOTAL INCOME OF RS.11 17 270/- . DEDUCTION U/S 80 IB OF THE IT ACT (FOR PROFIT FROM HOUSING PROJECT) WAS CLAIMED FOR AN AMOUNT OF RS.10 80 000/- AFTER EXCLUDING SMALL AMOU NT OF OTHER INCOME. THEREAFTER ASSESSMENT WAS MADE ON HIGHER INCOME OF RS.13 18 920/- AFTER MAKING DISALLOWANCE OF STAMP DUTY EXPENSES TO THE PROFIT & LOSS ACCOUNT. IN THE ORIGINAL ASSESSMENT ORDER DATED 22- 11-2007 DEDUCTION U/S 80 IB OF THE IT ACT WAS TOTALLY DENIED ON THE G ROUND THAT THE ASSESSEE WAS NOT OWNER OF THE LAND ON WHICH HOUSING PROJECT WAS DEVELOPED. IN APPEAL IT WAS HELD THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80 IB OF THE IT ACT. IN THE ORDER DAT ED 16-04-2008 GIVING EFFECT TO THE ORDER OF THE LEARNED CIT(A) GROSS TO TAL INCOME IS TAKEN AT RS.13 18 920/- AS PER THE ORIGINAL ASSESSMENT ORDER DATED 22-11-2007. HOWEVER DEDUCTION U/S 80 IB OF THE ACT IS NOT GIVE N WITH REFERENCE TO ASSESSED INCOME OF RS.13 18 920/- BUT WITH REFERENC E TO THE AMOUNT CLAIMED IN THE RETURN I.E. RS.10 80 000/-. THE ORDE R GIVING EFFECT TO THE APPELLATE ORDER DOES NOT STATE ANY REASON FOR ALLOW ING LOWER DEDUCTION. THE ASSESSEE THEREFORE SUBMITTED THAT LOWER DEDUC TION MIGHT HAVE BEEN GRANTED INADVERTENTLY. THE ONLY EFFECTIVE GROUND OF APPEAL BEFORE THE LEARNED CIT(A) RELATED TO THE ACTION OF THE AO IN A LLOWING DEDUCTION U/S 80 IB OF THE IT ACT TO THE EXTENT OF RS.10 80 000/ - BEING THE AMOUNT SHOWN IN THE RETURN OF INCOME ALTHOUGH THE DEDUCTIO N SHOULD HAVE BEEN ALLOWED IN RESPECT OF THE WHOLE OF THE ASSESSED INC OME OF RS.13 18 920/-. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT PR OFIT & LOSS ACCOUNT SHOWS PROFIT OF RS.10 75 846/-. THE INCOME COMPUTED AS PER INCOME TAX ACT AFTER PRESCRIBED ADJUSTMENT WAS RS.11 17 270/- ./ DEDUCTION U/S 80 ITA NO.1478/AHD/2010 DCIT BHARUCH VS M/S. NITISH CONSTRUCTION 3 IB OF THE ACT IN RESPECT OF THE PROFIT FROM HOUSING PROJECT WAS CLAIMED IN RESPECT OF THE ENTIRE INCOME EXCEPTING A SMALL AMOU NT OF RS.37 270/- BEING INCOME FROM OTHER SOURCES. DEDUCTION U/S 80 I B OF THE IT ACT WAS ACCORDINGLY RS.10 80 000/-. THIS FIGURE WAS NOT CHA LLENGED IN THE ASSESSMENT ORDER. IN THE ASSESSMENT ORDER STAMP DUT Y EXPENSES OF RS.2 01 650/- WAS DISALLOWED WHICH RESULTANTLY INCR EASED THE PROFIT FROM HOUSING PROJECT AND WAS NOT OTHER INCOME. HENCE TH E DEDUCTION U/S 80 IB OF THE IT ACT BASED ON THE ASSESSED FIGURE SHOUL D BE RS.10 80 000/- AS PER THE RETURN OF INCOME PLUS RS.2 01 650/- BEIN G ADDITION MADE IN THE ORIGINAL ASSESSMENT ORDER. THE LEARNED CIT(A) C ONSIDERING THE SUBMISSIONS OF THE ASSESSEE ALLOWED DEDUCTION U/S 8 0 IB OF THE IT ACT ON ASSESSED INCOME OF RS.12 81 650/- AFTER EXCLUDING I NCOME FROM OTHER SOURCE AS PER RETURN OF INCOME. HIS FINDINGS IN PA RA 3.3 ARE REPRODUCED AS UNDER: 3.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. A. R. AND FACTS OF THE CASE. OBVIOUSLY DEDUCTIONS UNDER C HAPTER VIA HAVE TO BE ALLOWED WITH REFERENCE TO ASSESSED I NCOME. ASSESSING OFFICER HAVING ASSESSED INCOME AT RS.13 18 920/- CANNOT PROCEED ASSUMING INCOME AT RS.10 80 000/- ( WHICH INCOME IS NOT ACCEPTED BY HIM) ONLY FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 80 IB. ACCORDINGL Y THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTION UN DER SECTION 80 IB WITH REFERENCE TO ASSESSED INCOME. HOWEVER T HE DEDUCTION WILL NOT BE RS.13 18 920/- AS PER GROUNDS OF APPEAL BUT WILL BE RS.12 81 650/- AFTER EXCLUDING INCOME FROM OTHER SOURCES AS PER RETURN OF INCOME. 4. THE LEARNED DR BESIDES RELYING UPON GROUNDS OF APPE AL SUBMITTED THAT THE ASSESSEE HAS BEEN WRONGLY ALLOWED DEDUCTIO N U/S 80 IB OF THE IT ACT ON THE AMOUNT OF RS.12 81 650/-. 5. ON CONSIDERATION OF THE SUBMISSIONS OF THE LEARN ED DR AND PERUSAL OF THE FINDINGS OF THE AUTHORITIES BELOW WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A). IN THE ORIGINAL ORDER DATED 22-11-2007 THE ASSESSEE WAS DENIED DEDUCTION U/S 8 0 IB (10) OF THE IT ITA NO.1478/AHD/2010 DCIT BHARUCH VS M/S. NITISH CONSTRUCTION 4 ACT IN A SUM OF RS.10 80 000/-. SIMILARLY STAMP DU TY EXPENSES OF RS.2 01 650/- WAS DISALLOWED BECAUSE THERE WAS NO A GREEMENT IN WRITING BETWEEN THE ASSESSEE AND MAHIMA CORPORATION. THE AS SESSEE HAS FILED RETURN OF INCOME SHOWING SUBSTANTIAL INCOME FROM TH E BUSINESS OF CONTRACTOR WHO HAS DONE THE CONSTRUCTION WORK. THE LEARNED CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE AND DIRECTED THE AO TO ALLOW DEDUCTION U/S 80 IB OF THE IT ACT. IN THE ORDER DAT ED 16-4-2008 PASSED BY THE AO GIVING EFFECT TO THE APPELLATE ORDER OF T HE LEARNED CIT(A) DATED 14-03-2008 DEDUCTION U/S 80 IB OF THE IT ACT WAS A LLOWED IN A SUM OF RS.10 80 000/-. THE ABOVE FACTS THEREFORE WOULD S HOW THAT THE RELIEF U/S 80 IB (10) OF THE IT ACT HAS ALREADY BEEN ALLOW ED TO THE ASSESSEE VIDE APPELLATE ORDER DATED 14-03-2008 AND APPEAL EFFECT IS GIVEN BY THE AO VIDE ORDER DATED 16-04-2008. THEREFORE GROUNDS NO. 2 AND 3 OF THE APPEAL NOW RAISED IN THE GROUNDS OF APPEAL ON MERIT WOULD NOT ARISE FROM THE ORDER OF THE AO BECAUSE IT WAS CONSEQUENTIAL OR DER PASSED AS PER DIRECTION OF THE LEARNED CIT(A) DATED 14-03-2008. G ROUNDS NO.2 AND 3 OF THE APPEAL ARE ACCORDINGLY DISMISSED. AS REGARDS AC TUAL DEDUCTION GRANTED U/S 80 IB (10) OF THE IT ACT THE LEARNED CI T(A) WAS JUSTIFIED IN HOLDING THAT SUCH DEDUCTION IS ALLOWABLE WITH REFER ENCE TO ASSESSED INCOME I.E. ON THE CONSTRUCTION ACTIVITIES OF THE A SSESSEE IN A SUM OF RS.12 81 650/- WHICH COMPRISE THE FIGURE ALLOWED BY THE AO IN A SUM OF RS.10 80 000/- PLUS RS.2 01 650/- WHICH ADDITION WA S MADE TO THE INCOME FROM HOUSING PROJECT BY THE AO IN THE ORIGIN AL ASSESSMENT ORDER. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LEARNED CIT(A). THE DEPARTMENTAL APPEAL HAS NOT MERIT AND THE SAME IS ACCORDINGLY DISMISSED. ITA NO.1478/AHD/2010 DCIT BHARUCH VS M/S. NITISH CONSTRUCTION 5 6. AS A RESULT THE DEPARTMENTAL APPEAL IS DISMISSE D. ORDER PRONOUNCED ON 06-08-2010. SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 06-0 8-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR ITAT AHMEDABAD