DCIT, Calicut v. M/s.PVS Apartments, Calicut

ITA 348/COCH/2014 | 2009-2010
Pronouncement Date: 21-11-2014 | Result: Dismissed

Appeal Details

RSA Number 34821914 RSA 2014
Assessee PAN AADFP0790P
Bench Cochin
Appeal Number ITA 348/COCH/2014
Duration Of Justice 4 month(s) 4 day(s)
Appellant DCIT, Calicut
Respondent M/s.PVS Apartments, Calicut
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 21-11-2014
Date Of Final Hearing 14-10-2014
Next Hearing Date 14-10-2014
Assessment Year 2009-2010
Appeal Filed On 17-07-2014
Judgment Text
1 ITA NO.345-349/COCH/2014 CO NOS 37-41/COCH/2014 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO.345 TO 349/COCH/2014 (ASSESSMENT YEARS 2006-07 TO 2010-11) THE DY.CIT CIR.1(1) VS M/S PVS APARTMENTS KOZHIKODE YMCA ROAD CALICUT PAN : AADFP0790P (APPELLANT) (RESPONDENT) C.O. NOS 37 TO 41/COCH/2014 (ARISING OUT OF I.T.A NO.345 TO 349/COCH/2014) (ASSESSMENT YEARS 2006-07 TO 2010-11) M/S PVS APARTMENTS VS THE DY.CIT CIR.1(1) KOZHIKODE KOZHIKODE (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SHRI K.K. JOHN RESPONDENT BY : SHRI TM SREEDHARAN SR COUNSEL DATE OF HEARING : 14-10-2014 DATE OF PRONOUNCEMENT : 21-11-2014 O R D E R PER N.R.S. GANESAN (JM) ALL THE APPEALS OF THE DEPARTMENT ARE DIRECTED AGA INST THE COMMON ORDER PASSED BY THE CIT(A) KOZHIKODE FOR ASSESSMEN T YEARS 2006-07 2007-08 2008-09 2009-10 AND 2010-11. SINCE COMMO N ISSUE ARISES FOR 2 ITA NO.345-349/COCH/2014 CO NOS 37-41/COCH/2014 CONSIDERATION IN ALL THE APPEALS WE HEARD THE SAME TOGETHER AND DISPOSE OF ALL THE APPEALS BY THIS COMMON ORDER. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DEDUC TION U/S 80IB OF THE ACT. 3. SHRI K.K. JOHN THE LD.DR SUBMITTED THAT THE ASS ESSEE CLAIMED DEDUCTION U/S 80IB IN RESPECT OF HOUSING PROJECT UN DERTAKEN BY THE ASSESSEE. ACCORDING TO THE LD.DR THE TOTAL AREA O F THE LAND IS 167 CENTS. THE ASSESSEE OBTAINED FOUR BUILDING PERMITS FROM TH E LOCAL AUTHORITY FOR CONSTRUCTION OF FOUR PROJECTS. THEREFORE THE AREA AVAILABLE FOR EACH PROJECT IS ONLY 41.17 CENTS WHICH IS LESS THAN 1 ACRE. THE LD.DR FURTHER SUBMITTED THAT BUILDING PERMIT WAS OBTAINED IN RESPECT OF ONE BLOCK OF BUILDING AND THE REMAINING AREA OF THE LAND WAS LEFT VACANT FOR FUTURE DEVELOPMENT. SIMILARLY WHILE OBTAINING PERMISSION FOR SECOND BLO CK OF BUILDING THE OTHER VACANT AREA IN THE LAND WAS LEFT FOR FUTURE DEVELOP MENT. THEREFORE ACCORDING TO THE LD.DR EACH BLOCK OF THE BUILDING H AS TO BE CONSTRUED AS A SEPARATE PROJECT; HENCE THE ASSESSEE HAS NOT FULFIL LED THE CRITERIA OF DEVELOPING HOUSING PROJECT IN AN AREA OF MORE THAN 1 ACRE. ACCORDING TO THE LD.DR BECAUSE THE LAND WAS RESERVED FOR FUTURE DEVELOPMENT WOULD NOT MEAN THAT THE ASSESEE HAS DEVELOPED THE HOUSING PROJECT IN THE ENTIRE 3 ITA NO.345-349/COCH/2014 CO NOS 37-41/COCH/2014 AREA OF 167 CENTS OF LAND. THEREFORE THE CIT(A) I S NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 4. THE LD.DR FURTHER SUBMITTED THAT IN RESPECT OF D ISALLOWANCE MADE U/S 40A(3) FOR CASH PAYMENT EXCEEDING RS.20 000 FOR THE ASSESSMENT YEAR 2008-09 THIS IS AN ACTUAL PAYMENT MADE BY THE ASSE SSEE WHICH GOES OUT OF THE HANDS OF THE ASSESSEE. ONLY BECAUSE OF THE DEEMING PROVISION CONTAINED IN SECTION 40A(3) A DISALLOWANCE WAS MADE . THEREFORE ACCORDING TO THE LD.DR IN RESPECT OF DISALLOWANCE M ADE U/S 40A(3) FOR MAKING CASH PAYMENT EXCEEDING RS.20 000 THE ASSESSE E IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB. 5. ON THE CONTRARY SHRI T.M. SREEDHARAN THE LD.SE NIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADMITTEDLY THE ASSESSEE OB TAINED BUILDING PERMIT SEPARATELY FOR FOUR BLOCKS OF BUILDING BY FOUR DIFF ERENT PLANNING PERMISSIONS. HOWEVER THE ENTIRE AREA OF LAND IS 1 ACRE AND 67 C ENTS. THE LD.SENIOR COUNSEL FURTHER SUBMITTED THAT THE ENTIRE PROJECT W AS CALLED AS ORCHID GARDEN PROJECT WHICH COMPRISES OF FOUR BLOCKS. ACC ORDING TO THE LD.SENIOR COUNSEL THERE IS A COMMON ENTRANCE FOR ALL THE FOU R BLOCKS OF THE BUILDINGS. THE COMMON AREA VIZ. GARDEN AND CHILDRENS PLAY ARE A ARE COMMON TO ALL FOUR BLOCKS. THE SEWAGE TREATMENT PLAN IS ALSO COM MON FOR ALL THE FOUR 4 ITA NO.345-349/COCH/2014 CO NOS 37-41/COCH/2014 BLOCKS OF THE BUILDING. THE SUMP FOR STORING DRINK ING WATER IS COMMON FOR ALL THE FOUR BLOCKS OF THE BUILDING. THE CAR PARK AND OTHER INFRASTRUCTURE FACILITIES ARE ESTABLISHED COMMONLY FOR ALL THE FOU R BLOCKS OF BUILDINGS. MERELY BECAUSE THE APPROVAL WAS OBTAINED BY WAY OF FOUR DIFFERENT PLANNING PERMITS IT DOES NOT MEAN THAT THE ASSESSEE HAS NOT DEVELOPED THE HOUSING PROJECT IN THE ENTIRE LAND. THE FACT R EMAINS AS PER THE LD.SENIOR COUNSEL IS THAT THE ASSESSEE OBTAINED FO UR PLANNING PERMITS BY WAY OF CONSTRUCTING FOUR BLOCKS OF RESIDENTIAL HOUS ES IN THE ENTIRE 167 CENTS OF LAND. FOR THE PURPOSE OF OBTAINING THE FI RST PLANNING PERMIT FOR ONE BLOCK OF THE BUILDING THE REMAINING AREA OF THE LAN D WAS SHOWN AS FOR FUTURE DEVELOPMENT. SIMILARLY IN RESPECT OF OTHER BLOCKS THE REMAINING AREA WAS SHOWN AS FOR FUTURE DEVELOPMENT. IT IS NO T IN DISPUTE ACCORDING TO THE LD.SENIOR COUNSEL THAT THE ENTIRE AREA OF L AND I.E 167 CENTS WAS USED FOR CONSTRUCTION OF FOUR BLOCKS OF BUILDING BY CREA TING INFRASTRUCTURAL FACILITIES COMMONLY FOR ALL THE FOUR BLOCKS. THERE FORE THE ASSESSING OFFICER IS NOT JUSTIFIED IN SAYING THAT THE HOUSING PROJECT WAS DEVELOPED IN AN AREA OF LESS THAN ONE ACRE OF LAND. THE LD.SENIOR COUNS EL PLACED HIS RELIANCE ON THE JUDGMENT OF THE MADRAS HIGH COURT IN VISWAS PRO MOTERS PRIVATE LIMITED VS ACIT (2013) 255 CTR (MAD) 149 AND JUDGME NT OF THE BOMBAY HIGH COURT IN CIT VS VANDANA PROPERTIES (2013) 353 ITR 36 (BOM). 5 ITA NO.345-349/COCH/2014 CO NOS 37-41/COCH/2014 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE TOTAL AREA OF THE LAND IS 167 CENTS. THE ASSESSEE ADMITT EDLY OBTAINED FOUR BUILDING PERMITS FOR CONSTRUCTION OF FOUR BLOCKS OF BUILDINGS SEPARATELY. WHILE OBTAINING PERMISSION FOR CONSTRUCTION OF FIRS T BLOCK OF THE BUILDINGS THE REMAINING AREA WAS SHOWN AS FOR FUTURE DEVELOP MENT. LIKE THAT THE OTHER PLANNING PERMIT WAS OBTAINED BY SHOWING THE R EMAINING AREA OF THE LAND AS FOR FUTURE DEVELOPMENT AND SO ON. THE FA CT REMAINS IS THAT THE ENTIRE PLANNING PERMITS WERE OBTAINED IN FOUR DIFFE RENT PLANNING PERMITS FOR DEVELOPMENT OF 1.67 ACRES OF LAND BY ESTABLISHING C OMMON FACILITIES LIKE WATER TREATMENT PLAN PARKING AREA GARDEN CHILDRE NS PLAY GROUND SUMP FOR STORAGE OF DRINKING WATER ETC. THEREFORE IT IS OBVIOUS THAT THE ASSESEE HAS DEVELOPED THE HOUSING PROJECT IN THE ENTIRE 1.6 7 ACRES OF LAND EVEN THOUGH THE PLANNING PERMIT WAS OBTAINED BY MEANS OF FOUR DIFFERENT APPROVALS. INCOME-TAX ACT DOES NOT REQUIRE THAT TH E PLANNING PERMIT SHOULD BE OBTAINED BY MEANS OF A SINGLE PERMIT. TH E REQUIREMENT OF INCOME-TAX ACT IS THAT THE HOUSING PROJECT SHOULD B E DEVELOPED IN A LAND OF LESS THAN 1 ACRE. SINCE IT IS NOT DISPUTED THAT A HOUSING PROJECT CONSISTING OF FOUR DIFFERENT BLOCKS OF BUILDINGS WAS DEVELOPED IN AN AREA OF 1.67 ACRES OF LAND THOUGH THE PLANNING PERMISSIONS WERE OBTAIN ED AT FOUR DIFFERENT STAGES THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY 6 ITA NO.345-349/COCH/2014 CO NOS 37-41/COCH/2014 ALLOWED THE CLAIM OF THE ASSESSEE. ACCORDINGLY TH E ORDER OF THE CIT(A) ON THIS ISSUE FOR ALL THE ASSESSMENT YEARS UNDER CONSI DERATION IS UPHELD. 7. FOR THE ASSESSMENT YEAR 2008-09 THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE U/S 80IB IN RESPECT OF DISALLOWANCE MADE U/S 40A(3) FOR MAKING PAYMENT IN CASH EXCEEDING RS.20 000. THE CI T(A) HAS PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH O F THIS TRIBUNAL IN ITA NO.570(ASR)2011 ORDER DATED 08-05-2012. SINCE NO C ONTRARY DECISION IS BROUGHT TO OUR NOTICE BY THE REVENUE THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 8. THE ASSESSEE HAS FILED CROSS OBJECTIONS ONLY TO SUPPORT THE ORDER OF THE CIT(A). IT IS WELL SETTLED PRINCIPLES OF LAW T HAT CROSS OBJECTIONS FILED ONLY TO SUPPORT THE ORDER OF CIT(A) WITHOUT RAISING AN INDEPENDENT ISSUE ARE NOT MAINTAINABLE BEFORE THIS TRIBUNAL. ACCORDI NGLY THE CROSS OBJECTIONS FILED BY THE ASSESSEE BECOME INFRUCTUOUS . 9. IN THE RESULT BOTH THE APPEALS FILED BY THE REV ENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE STAND DISMISSED. 7 ITA NO.345-349/COCH/2014 CO NOS 37-41/COCH/2014 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST NOVEMBER 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN DT : 21 ST NOVEMBER 2014 PK/- COPY TO: 1. THE DY.CIT CIR.1(1) KOZHIKODE 2. M/S PVS APARTMENTS YMCA ROAD CALICUT 3. THE COMMISSIONER OF INCOME-TAX KOZHIKODE 4. THE COMMISSIONER OF INCOME-TAX(A) KOZHIKODE 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR INCOME-TAX APPELLATE TRIBUNAL COCHIN BENCH