Mudra Builders, Ahmedabad v. The Income tax Officer,Ward-9(2),, Ahmedabad

ITA 2714/AHD/2009 | 2005-2006
Pronouncement Date: 15-07-2011 | Result: Allowed

Appeal Details

RSA Number 271420514 RSA 2009
Assessee PAN BELOW1500S
Bench Ahmedabad
Appeal Number ITA 2714/AHD/2009
Duration Of Justice 1 year(s) 9 month(s) 15 day(s)
Appellant Mudra Builders, Ahmedabad
Respondent The Income tax Officer,Ward-9(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 15-07-2011
Date Of Final Hearing 13-07-2011
Next Hearing Date 13-07-2011
Assessment Year 2005-2006
Appeal Filed On 30-09-2009
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI D. K. TYAGI JM AND A. M. ALANKAMONY AM MUDRA BUILDERS 10 KEVALKUNJ SOCIETY NR. K. K. NAGAR GHATLODIA AHMEDABAD. VS. THE INCOME-TAX OFFICER WARD 9(2) AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI M. G. PATEL AR RESPONDENT BY:- SHRI JASBIR S. CHOUHAN SR.DR O R D E R PER A.M. ALANKAMONY ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED A GAINST THE ORDER OF LD.CIT(A)-XV DATED 24/07/2009 RAISING THE FOLLOWING GROUNDS :- (1) THE LD. CIT(A)-XV AHMEDABAD HAS ERRED IN LAW AND O N FACTS OF THE CASE BY HOLDING THAT THE APPELLANT HAS VIOLA TED THE CONDITION LAID DOWN U/S 80IB INASMUCH AS BUILT UP A REA OF 10 UNITS EXCEEDS 1500 SQ.FT. AND ACCORDINGLY CONFIRMED THE FINDINGS OF THE AO THAT DEDUCTION U/S 80IB CANNOT B E ALLOWED. (2) THE LD. CIT(A)-XV AHMEDABAD HAS ERRED IN NOT ALLOW ING DEDUCTION U/S 80IB(10) ON REMAINING UNITS THE BUIL T UP AREA OF WHICH IS LESS THAN 1500 SQ.FT. AND THE SAME IS NOT DISPUTED BY THE AO. ITA NO.2714/AHD/2009 ASST. YEAR AY 2005-06 ITA NO.2714/AHD/2009 ASST. YEAR 2005-06 2 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPMENT OF HOUSING P ROJECT. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS COMPLETED CONSTRUCTION WORK OF A HOUSING PROJECT WITH ACHAL CO-OP. HOUSING SOCIETY LTD. AT CHANDKHEDA AHMEDABAD AND HAD SHOWN GROSS TURNOVER OF RS.4 69 80 897/- FOR THE WHOLE PROJECT ON WHICH NET PROFIT OF RS.88 02 634/- HAS BEEN CLAIMED AS DEDUCTION U/S 80 IB(10) OF THE ACT. THE ASSESSEE FILED RETURN OF INCOME ON 13.03.2006 D ECLARING TOTAL INCOME AT RS.NIL AFTER CLAIMING DEDUCTION U/S 80IB(10) OF THE INCOME-TAX ACT 1961. THE ASSESSEE ALONG WITH RETURN OF INCOME ALSO FILED AUDIT REPORT U/S 44AB OF THE ACT AND REPORT U/S 80IB(10) OF THE ACT. THE AO ISSUED NOTICE U/S 143(2) AND 142(1) ALONG WITH THE ANNEXUR E CALLING FOR THE INFORMATION AND DETAILS ON 05.03.2007 IN RESPONSE T O WHICH THE ASSESSEE SUBMITTED THE DETAILS CALLED FOR VIDE LETTER DATED 17.07.2007 16.08.2007 28.11.2007 AND 08.12.2007 TO THE AO. 2.1 DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE VIDE ITS LETTER DATED 8.12.2007 EXPLAINED TO THE AO THAT TOTAL BUILT UP A REA OF A-TYPE TENEMENTS IS LESS THAN 1500 SFT. AND AS SUCH NO CON DITION OF SECTION 80IB HAS BEEN VIOLATED. THE ASSESSEE SUBMITTED THAT MEAS UREMENT GIVEN IN THE DEVELOPMENT PERMISSION GRANTED BY AUDA AS WELL AS I N THE B.U.PERMISSION ARE COMPRISED OF VARANDA AND COMMON PARKING AREA AND ITA NO.2714/AHD/2009 ASST. YEAR 2005-06 3 IF THE SAID AREA IS EXCLUDED FROM THE AREA MENTIONE D IN B.U.PERMISSION THEN BUILT UP AREA COMES TO LESS THAN 1500 SFT. AN D IT IS SUPPORTED BY ARCHITECTS CERTIFICATE FILED ALONG WITH THE RETURN OF INCOME. THE ASSESSEE RELYING ON THE DECISION OF THE TRIBUNAL CALCUTTA I N THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT CORPORATION LTD SUBMITTE D THAT IF THE ENTIRE DEDUCTION CANNOT BE ALLOWED THEN PROPORTIONA TE DEDUCTION MAY BE GRANTED FOR THE FLATS CONSTRUCTED HAVING BUILT UP A REA OF LESS THAN 1500SQ.FT. THE AO CONSIDERED ALL THE SUBMISSIONS MA DE BY THE ASSESSEE AND HELD THAT THE ASSESSEE HAD CONSTRUCTED TYPE-A BUNGALOW IN RESPECT OF SCHEME ACHAL -1 IN VIOLATION OF THE CONDITIONS OF SECTION 80IB(10) OF THE ACT AND ACCORDINGLY ISSUED A SHOW CAUSE NOTI CE ON 29.11.2007 TO THE ASSESSEE AS TO WHY THE DEDUCTION CLAIMED U/S 80 IB(10) BE NOT DISALLOWED. IN THE SAID NOTICE THE AO HAS REFERRED TO THE DEVELOPMENT PERMISSION GIVEN BY AUDA ON 18.04.2002 9.12.2003 B.U. PERMISSION GIVEN BY AUDA ON 21.08.2004 AND HELD THAT TOTAL BUI LT UP AREA IS MORE THAN 1500 SFT. 3. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) WH EREIN SIMILAR SUBMISSIONS WERE MADE. THE CIT(A) CONSIDERING THE S UBMISSIONS OF THE ASSESSEE AND THE CONTENTIONS OF THE AO IN THE ASSES SMENT ORDER AND NOT BEING SATISFIED WITH THE SAME REFERRED THE MATTER T O THE D.V.O. FOR PHYSICAL VERIFICATION. THE DVO CONFIRMED THE CONTEN TION OF ITA NO.2714/AHD/2009 ASST. YEAR 2005-06 4 THE AO. THE CIT(A) OBSERVED THAT THE ASSESSEE HAS A PPROVAL OF LOCAL AUTHORITY FOR CONSTRUCTING A HOUSING PROJECT BUT TH AT APPROVAL IS MERELY ONE OF THE CONDITIONS FOR OBTAINING DEDUCTION U/S 8 0IB. THE MOST IMPORTANT CONDITION IS THAT ALL RESIDENTIAL UNITS I N SUCH A PROJECT SHOULD CONSIST OF BUILT-UP AREA NOT EXCEEDING 1500 SFT. WH ICH CONDITION HAS BEEN VIOLATED. OUT OF 65 RESIDENTIAL UNITS CONSTRUCTED B Y THE ASSESSEE IT EXCEEDED 1500 SFT. LIMIT WITH RESPECT TO 10 RESIDEN TIAL UNITS 6 A-1 TYPE BUNGALOWS AND 4 A TYPE BUNGALOWS. THE ASSESSEE HAS CONSTRUCTED TENEMENTS AND DUPLEX HOUSES (TYPE A1 AND TYPE A BUN GALOWS IN THE PROJECT) FOR UPPER STRATA OF SOCIETY WITH BARSATI STAIR CABIN VERANDAH SEPARATE PARKING SPACE ETC. CLEARLY EXCEEDING 1500 SFT LIMIT PRESCRIBED U/S 80IB(10). FINALLY SHE CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER :- 14. IN THE PRESENT CONTEXT IT WOULD BE APT TO QUOT E THE RELEVANT CLAUSES OF THE DEVELOPMENT AGREEMENT ENTERED BY THE APPELLA NT WITH THE SOCIETY IN WHICH IT HAS BEEN CLEARLY MENTIONED THAT THE APP ELLANT BUILDER WOULD BE CONSTRUCTING DUPLEX TENEMENTS AND DUPLEX ROW HOU SES. CLAUSE 1 OF THE DEVELOPMENT AGREEMENT STATES THE SOCIETY HEREBY DECLARES HAVING APPOINTED AND A UTHORIZED THE DEVELOPER/BUILDER TO DEVELOP/BUILT THE SAID HOUSING PROJECT UNDER THE NAME ACHAL-1 DUPLEX TENEMENTS/DUPLEX ROW HOUSES BY CONSTRUCTING THEREO N BUILDING/S CONSISTING OF RESIDENTIAL DUPLEX TENEMENT/DUPLEX ROW HOUSE ALONG WITH THE WORK OF DEVELOPMENT OF BASIC COMMON INFRASTRUCTURE AMENITIES LIKE CONSTRUC TION OF ROADS COMMON PLOTS ETC. INSTALLING OF ELECTRIC LIGHT-POLES AND AT EACH PLACE IN THE AGREEMENT THE WORD USED FO R THE UNIT CONSTRUCTED IS DUPLEX TENEMENT/DUPLEX ROW HOUSE. MUDRA BUILDERS CONSTRUCTED TYPE- A AND A1 BUNGALOWS IN THE PROJECT WHOSE BUILT UP AR EA EXCEEDED 1500 SQ.FT. THIS HAS BEEN CONFIRMED BY THE DISTRICT VALU ATION OFFICER WHOSE REPORT WAS MADE AVAILABLE TO THE APPELLANT AND IN C OUNTER-COMMENTS THE ITA NO.2714/AHD/2009 ASST. YEAR 2005-06 5 APPELLANT DID NOT STATE ANYTHING SUBSTANTIAL. I WOU LD THEREFORE CONFIRM THE ORDER OF THE AO DENYING 80-IB DEDUCTION TO THE ASSESSEE IN TOTO. THE ASSESSEE BEING AGGRIEVED WITH THE ABOVE ORDER O F CIT(A) IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. AR RELIED UPON VARIOUS DECIDED CASES AND S UBMITTED THAT THE ASSESSEE WOULD BE ENTITLED TO CLAIM DEDUCTION PROPO RTIONATELY FOR THE FLATS CONSTRUCTED BELOW 1500 SFT. THE LD. AR FURTHER PRAY ED THAT THE MATTER MAY BE REMITTED BACK TO THE AO SO THAT HE MAY EXAMI NE THE AREA CONSTRUCTED AND GRANT RELIEF PROPORTIONATELY. FOLLO WING DECISIONS WERE RELIED UPON BY THE LD. AR - (1) SHREEVASTA REAL ESTATES (P) LTD. VS. ITO 41 DTR 497 (CHENNAI)(TRIB) IT WAS HELD IN THIS CASE THAT THE ASSESSEE HAVING OBTAINED APPROVAL FROM DY. DIRECTOR TOWN PLANNING FOR CONSTRUCTION O N THE PLOTS AND CARRIED OUT CONSTRUCTIONS PURSUANT TO SANCTION OBTAINED BY THE INDIVIDUAL OWNERS TO WHOM PLOTS WERE GIVEN THE PRO JECT HAD THE APPROVAL OF THE LOCAL AUTHORITY BUILT-UP AREA OF S OME OF THE HOUSING UNITS BEING MORE THAN 1 500 SQ.FT. ASSESSEE IS ENTI TLED FOR DEDUCTION UNDER S.80IB(10) PRO RATA FOR THE HOUSING UNITS HAV ING BUILT-UP AREA LESS THAN 1 500 SQ.FT. (2) SJR BUILDERS VS. ACIT (2010) 3 ITR (TRIB) 569 ( BANGALORE) IN THIS CASE IT WAS HELD THAT MERELY BECAUSE SOME FLATS WERE LARGER THAN 1500 SQ.FT. THE ASSESSEE WOULD NOT LOSE THE BE NEFIT IN ITS ENTIRETY. ONLY WITH REFERENCE TO THE FLATS WHICH HA D MORE THAN THE PRESCRIBED AREA THE ASSESSEE WOULD LOSE THE BENEFI T. ITA NO.2714/AHD/2009 ASST. YEAR 2005-06 6 (3) ITO VS. AIR DEVELOPERS (123 TTJ 959 (NAG) IN THIS CASE IT IS HELD THAT AO HAS WORKED OUT THE BUILT UP AREA AFTER INCLUDING THE AREA OF THE BALCONY RELEVANT FACTS N OT EXAMINED IN THE LIGHT OF THE SAID REGULATION THEREFORE THE AO IS DIRECTED TO DETERMINE THE BUILT UP AREA OF THE RESIDENTIAL UNIT S BY APPLYING THE DEVELOPMENT CONTROL REGULATION 2000 AND TO ALLOW PROPORTIONATE DEDUCTION UNDER S.80IB(10) IF HE FINDS THAT THE BUI LT UP AREA OF SOME OF THE RESIDENTIAL UNITS EXCEEDS 1 500 SQ.FT. (4) G.V. CORPORATION VS. ITO 38 SOT 174 (MUM) IN THIS CASE IT WAS HELD THAT WHETHER IN VIEW OF D ECISION OF SPECIAL BENCH (PUNE) IN CASE OF BRAHMA ASSOCIATES VS. JT. C IT (2009) 119 ITD 255 EVEN IF ASSESSEE COULD NOT BE GIVEN ENTIRE DEDUCTION UNDER SECTION 80IB IT WOULD STILL BE ELIGIBLE FOR PROPORTIONATE DEDUCTION. (5) ACIT VS. SHETH DEVELOPERS (P) LTD. 33 SOT 277 IN THIS CASE IT WAS HELD THAT WHETHER EVEN WHERE S OME OF UNITS IN A HOUSING COMPLEX EXCEED AREA LIMIT RELIEF HAS TO BE GIVEN ON A PRO RATA BASIS. FINALLY HE SUBMITTED THAT THE JURISDICTIONAL TRIBUN AL IN THE CASE OF M/S AAKAR ASSOCIATES VS. ITO IN ITA NO.2903/AHD/2008 AY 2005-06 PRONOUNCED ON 14.5.2011 HAS DECIDED THE ISSUE BY O BSERVING AS UNDER :- 5.5 IN THE LIGHT OF THE VIEW TAKEN IN THE AFORESAI D DECISIONS ESPECIALLY WHEN THE REVENUE HAVE NOT PLACED BEFORE US ANY CONT RARY DECISION WE HAVE NO HESITATION IN ALLOWING THE CLAIM OF THE ASS ESSEE FOR DEDUCTION U/S 80IB(10) OF THE ACT ON PROPORTIONATE BASIS I.E. ON THE PROFIT DERIVED FROM CONSTRUCTION OF THE RESIDENTIAL UNITS WHICH HAVE A BUILT UP AREA OF LESS THAN 1500 SQ.FT. ACCORDINGLY THE AO IS DIRECTED TO ALLOW THE CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT ON THE PROFIT DER IVED FROM CONSTRUCTION OF THE RESIDENTIAL UNITS WHICH HAVE A BUILT UP AREA OF LESS THAN 1500 SQ.FT. THE UNITS WITH BUILT AREA EXCEEDING 1500 SQ.FT. WOU LD NOT BE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. SUBJECT TO THESE DIRECTIONS GROUND NOS. 1 TO 3 IN THE APPEAL ARE ALLOWED TO THE EXTENT INDICATED HEREINBEFORE. ITA NO.2714/AHD/2009 ASST. YEAR 2005-06 7 5. THE LD. DR DID NOT HAVE OBJECTION FOR REMITTING BACK THE CASE TO THE FILE OF LD. AO FOR PASSING NECESSARY ORDERS IN ACCO RDANCE WITH THE RATIO LAID DOWN AS PER THE ABOVE JUDICIAL PRONOUNCEMENTS . 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORDS. IT IS EVIDENT FROM THE ABOVE THAT THE ASSESSEE IS ENTITLE D FOR CLAIMING DEDUCTION U/S 80IB OF THE ACT PROPORTIONATELY FOR THE FLATS C ONSTRUCTED WITHIN THE PRESCRIBED LIMITS OF 1500 SQ.FT. BY FOLLOWING THE A BOVE JUDICIAL PRONOUNCEMENTS WE REMIT THE MATTER BACK TO THE FILE OF THE LD. AO WITH THE DIRECTION TO PASS APPROPRIATE ORDER ON MERITS A ND LAW KEEPING IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENTS. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER WAS PRONOUNCED IN OPEN COURT ON 15/7/11. SD/- SD/- (D.K.TYAGI) (A. M. ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD DATED : 15/7/11. MAHATA/- ITA NO.2714/AHD/2009 ASST. YEAR 2005-06 8 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 14/7/11. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 14/7/11. /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..