M/s. Narayan Estate Developers, Ahmedabad v. The Income tax Officer,Ward-9(1),, Ahmedabad

ITA 209/AHD/2009 | 2005-2006
Pronouncement Date: 11-11-2011 | Result: Allowed

Appeal Details

RSA Number 20920514 RSA 2009
Assessee PAN AAFFN1582P
Bench Ahmedabad
Appeal Number ITA 209/AHD/2009
Duration Of Justice 2 year(s) 9 month(s) 20 day(s)
Appellant M/s. Narayan Estate Developers, Ahmedabad
Respondent The Income tax Officer,Ward-9(1),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 11-11-2011
Date Of Final Hearing 08-11-2011
Next Hearing Date 08-11-2011
Assessment Year 2005-2006
Appeal Filed On 22-01-2009
Judgment Text
. .. . . .. . !' !' !' !' # ## # . .. .$ #$ $ #$ $ #$ $ #$ %& ' %& ' %& ' %& ' % ' % ' % ' % ' IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : AHMEDABAD BEFORE HONBLE SHRI G.C.GUPTA V.P. & HONBLE SHRI A.MOHAN ALANKAMONY A.M.) # # # #. ITA NO. 209 / AHD./2009 : ()- 2005-2006 M/S. NARAYAN ESTATE DEVELOPERS AHMEDABAD VS- I.T.O. WARD-9(1) ABAD (PAN : AAFFN 1582P) ( - /APPELLANT) ( ./ - /RESPONDENT ) - 0 1 % / APPELLANT BY : SHRI N.C.AMIN A.R. ./ - 0 1 % / RESPONDENT BY : SHRI D.C.SHARMA SR.D.R. 2 0 34& / DATE OF HEARING : 08/11/2011 5$( 0 34& / DATE OF PRONOUNCEMENT : 11/11/2011 %6 %6 %6 %6 / ORDER PER SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XV AHMEDABAD I N APPEAL NO.CIT(A)- XV/WD/9(1)/62/2007-08 DATED 19.12.2008 FOR THE ASSE SSMENT YEAR 2005-2006 PASSED UNDER SECTION 250 R.W.S.143(3) OF THE I.T. ACT 196 1. 2. INITIALLY THE ASSESSEE HAD RAISED 32 GROUNDS IN ITS APPEAL WHICH WAS SUBSEQUENTLY CONCISED TO 15 GROUNDS. THE CRUX OF TH E FIRST FOUR GROUNDS RELATES TO DISALLOWANCE UNDER SECTION 80IB(10) OF THE ACT FOR RS.31 38 328/-. AT THE BEGINNING OF THE HEARING THE LD. A.R. SUBMITTED THAT THE CASE M AY BE SET ASIDE FOR DE NOVO CONSIDERATION BECAUSE A PROPER EXAMINATION OF THE ISSUES INVOLVED IN THE APPEAL WAS NOT CONDUCTED BY THE REVENUE DURING THE ASSESSMENT PROCEEDINGS AND THE APPELLATE PROCEEDINGS. ITA NO. 209-AHD-09 2 3. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BU SINESS AS DEVELOPER AND BUILDER FILED HIS RETURN OF INCOME ON 28.10.2005 ALONG WITH THE AUDIT REPORT IN FORM NO.10CCB CLAIMING DEDUCTION UNDER SECTION 80IB(10) OF THE AC T. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SEC TION 143(3) ON 11.10.2007. DURING THE COURSE OF ASSESSMENT THE LD. A.O. OBSER VED THAT THE ASSESSEE HAD CLAIMED DEDUCTIONS UNDER SECTION 80IB(10) OF THE ACT FOR TH E CONSTRUCTION OF A RESIDENTIAL PROJECT NAMELY NARAYAN BUNGALOWS AT NARODA AHMED ABAD AT PLOT BEARING SURVEY NOS. 829 AND 830. HOWEVER ON PERUSING THE RECORDS IT WAS FOUND BY THE LD. A.O. THAT THE PLAN SANCTIONED FOR BOTH THE SURVEY NUMBERS WER E PREPARED AND PASSED ON DIFFERENT DATES. THEREFORE THE LD. A.O. CAME TO THE CONCLUSI ON THAT THE ASSESSEE FIRM HAS VIOLATED THE CONDITIONS OF THE PROVISIONS OF SECTIO N 80IB(10) OF THE ACT AND MADE THE DISALLOWANCE OF RS.31 38 328/-. THE RELEVANT PORTIO N OF THE ORDER IS REPRODUCED HEREINBELOW: A PERUSAL OF THE PROVISIONS OF THE LAW REVEALS THAT APPROVAL OF PLAN IS ONE OF THE PRIME CONDITION VIS A VIS TOTAL AREA OF THE HOUSING PROJECT FOR GETTING THE BENEFIT OF SECTION 8016(10). THE LEGISLATURES HAVE PUT THE ABOVE CONDITION WITH AN INTENTION THAT THERE SHOULD NOT ANY DEVIATION IN AP PROVED PLAN OR UNAUTHORIZED CONSTRUCTION AND THE ASSESSEE HAS TO FOLLOW THE PLA N ONLY. SO FOR GETTING THE BENEFIT OF THE 100% DEDUCTION OF THE PROJECT U/S 80 IB(10) EACH AND EVERY CONDITIONS PROVIDED UNDER THE PROVISIONS OF THE LAW SHOULD BE STRICTLY FOLLOWED. THE ASSESSEE-FIRM HAVE NOT FOLLOWED THE PLAN AND SO LD THE LAND ADMEASURING 700 SQ. METERS WHICH RESULTED INTO VIOLATION OF ONE OF THE PRIME CONDITION OF DEVELOPING A PLOT OF THE LAND EXCEEDING 1 ACRE. THE OTHER VIOLATION IS THAT THE ASSESSEE-FIRM HAVE CONSTRUCTED 32 RESIDENTIAL UNITS AGAINST APPROVAL OF 33 UNITS. THERE IS NO PROVISION IN THE LAW THAT THE BE NEFIT OF SECTION CAN BE GIVEN IN PART I.E. BENEFIT OF DEDUCTION TO THE EXTENT OF 32 UNITS. IT IS STRICTLY GIVEN IN THE PROVISIONS OF THE LAW THAT THE BENEFIT OF DEDUCTION SHOULD BE GIVEN TO THE HOUSING PROJECTS WHICH HAS SATISFIED THE STIPULATED CONDITIONS. ANY VIOLATION TO THE CONDITIONS LEADS TO DISALLOWANCE OF DEDUCTION U /S 80IB(10) FOR WHOLE OF THE HOUSING PROJECT. EITHER THE DEDUCTION IN RESPECT O F THE WHOLE OF THE HOUSING PROJECT (SUBJECT TO SATISFACTION OF THE ALL THE STI PULATED CONDITIONS) TO BE GIVEN OR THE DEDUCTION IN RESPECT OF THE WHOLE OF THE PRO JECT IS TO BE REJECTED. AT THE COST OF REPETITION IT IS WORTH MENTIONING THAT THE RE IS NO PROVISION IN THE LAW TO ALLOW PART DEDUCTION IN RESPECT OF UNITS APPROVED A S PER THE PLAN. SINCE THE ASSESSEE HAS NOT CARRIED OUT THE CONSTRUCTION WORK ACCORDING 10 THE APPROVED PLAN AND VIOLATED ONE OF THE CONDITION OF HAVING PL OT AREA OF THE LAND ON WHICH THE HOUSING PROJECT IS BEING CONDUCTED SINCE IT IS LESS THAN 1 ACRE THE ASSESSEE- FIRM WAS GIVEN SHOW CAUSE NOTICE WHY THE PROFIT OF- THE HOUSING PROJECT ON PLOT NO.829 & 830 CARRIED OUT SIMULTANEOUSLY AND CREDITE D TO THE PROFIT & LOSS ITA NO. 209-AHD-09 3 ACCOUNT COLLECTIVELY SHOULD NOT BE SEGREGATED BETW EEN PROFITS ON PLOT NO. 829 AND PLOT NO. 830 ON PRO RATA BASIS AND THE PROFIT E ARNED ON PLOT NO.830 SHOULD NOT BE DISALLOWED. THE PROFIT EARNED ON PLOT NO. 83 0 ON PRORATE BASIS (NO. OF UNITS CONSTRUCTED BASIS) IS WORKED OUT AT RS.31 48 328/- (I.E.RS.78 70 821/- X 32/80)'. SINCE THE ASSESSEE COULD NOT FURNISH SATISFACTORY E XPLANATION THE DEDUCTION CLAIMED UNDER SECTION 80LB THE CLAIM OF THE ASSESSEE AMOUNTING TO RS.31 48 328/- IF DISALLOWED AND ADDED TO THE TOTAL INCOME ON THE ABOVE REASONING. PENALTY PROCEEDING U/S 274 R.W.S. 271(1 )(C) OF THE ACT HAS BEEN INITIATED FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). AFTER AN ELABORATE DELIBERATION THE LD. CIT(A) CONFIRMED THE ORDER OF THE LD. A.O. AND ARRIVED AT A CONCLUSION THAT TWO SEPARATE PERMISSIONS FOR DEVELO PMENT WERE GIVEN BY AUDA FOR TWO SEPARATE PLOTS OF LAND ON TWO DIFFERENT DATES. THE VARIATION IN DATES FALLS BEYOND A YEAR THUS TWO SEPARATE BUILDING USE PERMISSIONS WE RE GIVEN ETC. THE FINDINGS OF THE LD. CIT(A) IS REPRODUCED HEREINBELOW FOR REFERENCE. 4. DURING THE APPELLATE PROCEEDINGS THE APPELLANT SUBMITTED COPY OF LETTER DATED 28.9.07 GIVEN TO THE AO DURING ASSESSMENT PRO CEEDINGS. POINT 33 34 AND 35 OF THIS LETTER STATE THAT ALL THE AUTHORITIES HA VE CONSIDERED BOTH THE PLOTS AS ONE ALL THE PERMISSION INCLUDING REVENUE RECORDS A ND OTHER CONNECTED DEPARTMENTS HAVE APPROVED AND SANCTIONED PLANS SCH EMES AND CONVERSION OF LANDS FOR CONSIDERING THEM BOTH AS COMMON AND ON TH IS BASIS HAS OBJECTED TO TAKING OF AREA BY THE AO OF LAND BEARING SURVEY NUM BER AT 4424 SQ. MTRS. STATING THAT TOTAL AREA OF BOTH THE PLOTS IS ACTUAL LY ONE ACRE AND THEREFORE DISALLOWANCE OF 80-1B FOR 32 UNITS AMOUNTING TO RS. 31 36 230 IS WRONG. THIS CONTENTION WAS REPEATED DURING THE APPELLATE PROCEE DINGS BUT AS DISCUSSED ABOVE TWO SEPARATE PERMISSIONS FOR DEVELOPMENT WERE GIVEN BY AUDA FOR TWO SEPARATE PLOTS OF LAND ON TWO DIFFERENT DATES. THE VARIATION IN DATES WAS NOT OF A FEW DAYS OR MONTHS BUT OF YEARS. SIMILARLY TWO SEPA RATE BUILDING USE PERMISSIONS WERE GIVEN ON DIFFERENT DATES FOR UNITS CONSTRUCTED ON TWO SEPARATE PLOTS. AGAIN THE GAP IN DATES WAS OF YEARS AND NOT OF MONTHS. THE AFOREMENTIONED FACTS MAKE THE DISALLOWANCE WORTH UP HOLDING ON 80-IB(10) POINT. 5. THE LD. A.R. SUBMITTED BEFORE US THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND FIRST APPELLATE PROCEEDINGS ALL RE LEVANT MATERIALS WERE PRODUCED BEFORE THE AUTHORITIES. HOWEVER WITHOUT EXAMINING THE RELEVANT BUILDING PLAN SANCTION OF THE APPROPRIATE AUTHORITY THE REVENUE HAS DECID ED THE MATTER AGAINST THE ASSESSEE. THE LD. A.R. HUMBLY PRAYED THAT THE MATTER MAY BE S ENT BACK TO THE FILE OF LD. A.O. FOR ITA NO. 209-AHD-09 4 DE NOVO CONSIDERATION WITH A DIRECTION TO EXAMINE ALL THE MATERIALS FURNISHED BY THE ASSESSEE FAIRLY. 6. THE LD. D.R. OPPOSED TO THE SUBMISSIONS OF THE L D. A.R. AND STATED THAT THE AUTHORITIES BELOW HAD EXAMINED THE RECORDS AND HAD RIGHTLY CAME TO A CONCLUSION. THEREFORE THE MATTER NEED NOT BE SENT BACK FOR FRE SH CONSIDERATION AND THE ORDER OF THE LD. CIT(A) MAY BE CONFIRMED. THE LD. D.R. RELIED ON THE ORDERS OF THE AO AND THE LD. CIT(A). 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. THE ASSESSEE HAS SUBMITTED PAPER BOOKS RUNNING INTO NUM BER OF PAGES. HOWEVER THE RELEVANT PLAN APPROVAL WAS NOT PLACED BEFORE US FOR OUR CONSIDERATION. THE LD. D.R. WAS ALSO NOT IN A POSITION TO SUBSTANTIATE HIS STAN D IN THE ABSENCE OF THE RELEVANT SANCTION PLAN OF THE BUILDINGS APPROVED BY THE PRES CRIBED AUTHORITIES. FROM THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(A) I T IS NOT CLEAR AS TO WHAT PLAN WAS APPROVED BY AUDA EXCEPT FOR THE MENTION OF VARIANCE IN DATES. BRIEF DESCRIPTION OF THE PLAN APPROVED BY AUDA DID NOT EMERGE FROM THE O RDERS OF THE REVENUE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE OPINION THAT THE MATTER NEEDS TO BE REMITTED BACK TO THE FILE OF THE LD. A.O. FOR A CLEAR FINDING WITH RESPECT TO THE BUILDING PLAN APPROVAL FROM THE PRES CRIBED AUTHORITIES WHICH IS AN IMPORTANT FACTOR IN DECIDING THIS CASE. THEREFORE WE HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. A.O. FOR DE NOVO CONSIDERATION. SINCE THE APPEAL IS REMITTED BACK T O THE FILE OF THE LD. A.O. WE RESTRAIN OURSELVES FRO M ADJUDICATING THE OTHER GROUNDS RAISED BY THE ASSESSEE WHICH MAY ALSO BE KEPT OPEN BEFORE THE LD. A.O. FOR THE ASSESSEE TO MAKE FURTHER SUBMISSIONS IF REQUIRED. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7 %6 0 5$( 8#) 11 / 11 /2011 $ 9 0 2 : THIS ORDER PRONOUNCED IN COURT ON 11/11/2011. SD/- SD/- (G.C.GUPTA) (A.MOHAN ALANKAMONY) VICE PRESIDENT A CCOUNTANT MEMBER DATED : 11/11/2011 ITA NO. 209-AHD-09 5 %6 %6 %6 %6 0 00 0 .3; .3; .3; .3; <%;(3) <%;(3) <%;(3) <%;(3)- -- - 1. - 2. ./ - 3. ## 3 @ 4. @- - 5. ;C .3 : 6. E F7 %6 % / # : TALUKDAR/ SR. P.S.