ITO, Ward 3(2), Pune v. M/s. Saibaba Builders & Developers,, Pune

ITA 364/PUN/2013 | 2004-2005
Pronouncement Date: 30-10-2013 | Result: Dismissed

Appeal Details

RSA Number 36424514 RSA 2013
Assessee PAN AAOFS6124P
Bench Pune
Appeal Number ITA 364/PUN/2013
Duration Of Justice 8 month(s) 24 day(s)
Appellant ITO, Ward 3(2), Pune
Respondent M/s. Saibaba Builders & Developers,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-10-2013
Assessment Year 2004-2005
Appeal Filed On 05-02-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 364 AND 365/PN/2013 (ASSESSMENT YEARS 2004-05 AND 2005-06) ITO WARD-3(2) PUNE .. APPELLANT VS. M/S. SAIBABA BUILDERS & DEVELOPERS 1196 TUKARAM PADUKA CHOWK F.C. ROAD PUNE-411005 .. RESPONDENT PAN NO.AAOFS6124P APPELLANT BY : SHRI WALIMBE RESPONDENT BY : SHRI KISHORE PHADKE : SHRI KETAN DHOOT DATE OF HEARING : 22-10-2013 DATE OF PRONOUNCEMENT : 30-10-2013 ORDER PER SHAILENDRA KUMAR YADAV JM : BOTH THE ABOVE APPEALS BY THE REVENUE PERTAIN TO SA ME ASSESSEE ON SAME ISSUE. SO THEY ARE BEING DISPOSE D OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. IN A.Y. 2004-05 THE REVENUE HAS FILED THE APPEAL ON FOLLOWING GROUN DS : 1) THE LD.CIT(A) ERRED IN DELETING THE DISALLOWA NCE MADE U/S.80IB(10) OF THE INCOME TAX ACT. 2) THE LD.CIT(A) ERRED IN NOT APPRECIATING THAT SE CTION 80IB(10) PRIOR TO ITS SUBSTITUTION BY FINANCE (NO.2 ) ACT 2004 W.E. 01-04-2005 DID NEITHER CONTEMPLATE NOR PROVIDE FOR ANY COMMERCIAL SPACE OR AREA WHATSOEVER AS CONSTITUTING A PART OF A HOUSING PROJECT. 3) THE LD.CIT(A)FAILED TO APPRECIATION THAT DEDUCT ION U/S.80IB(10) AS APPLICABLE TO A PROJECT APPROVED P RIOR TO 01-04-2005 IS ADMISSIBLE IN THE CASE OF A HOUSING P ROJECT COMPRISING RESIDENTIAL HOUSING UNITS ONLY. 2 4) THE APPELLANT CRAVES LEAVE TO ADD ALTER OR AMEN D ANY OR ALL THE GROUNDS OF APPEAL. 2. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS O F DEVELOPING HOUSING PROJECTS. DURING THE YEAR UNDER CONSIDERATION ASSESSEE CONSTRUCTED A HOUSING PROJEC T CALLED SAI HERITAGE WHICH CONSISTED OF RESIDENTIAL FLATS AND SHOPS. TOTAL AREA CONSTRUCTED WAS 1 15 359 SQ.FT. AND COMM ERCIAL AREA IN THE PROJECT WAS 9 802.75 SQ.FT. I.E. 8.5%. THE ASSESSEE FILED ORIGINAL RETURN OF INCOME FOR A.Y. 2004-05 DECLARIN G INCOME OF RS.6 26 850/- AFTER CLAIMING DEDUCTION U/S.80IB(10) AT RS.27 18 335/-. THE ASSESSMENT U/S.143(3) WAS COMP LETED RESTRICTING THE DEDUCTION U/S.80IB(10) TO RS.23 27 460/- I.E. FOR THE PROFITS ON SALE OF RESIDENTIAL UNITS AND TH AT ON COMMERCIAL AREA WAS TAXED. 3. IN APPEAL THE CIT(A) FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES REPORTED IN (2011) 333 ITR 289 HAS HELD AS UNDER : 27. THE QUESTION THEN TO BE CONSIDERED IS WHETHE R THE SPECIAL BENCH OF THE TRIBUNAL WAS JUSTIFIED IN HOLD ING THAT THE PROJECTS HAVING COMMERCIAL AREA UPTO 10 PE R CENT OF THE BUILT-UP AREA OF THE PLOT ARE ELIGIBLE FOR DEDUCTION UNDER S. 80-IB(10) ON THE ENTIRE PROJECT UPTO 1ST APRIL 2005. ONCE THE BASIC ARGUMENT OF THE REVENUE THAT THE HOUSING PROJECTS WITH COMMERCIAL USER ARE NOT ENTITLED TO S.80-IB(10) DEDUCTION IS REJECTED THEN IN THE ABSENCE OF ANY RESTRICTION IM POSED UNDER THE ACT IT WAS NOT OPEN TO THE TRIBUNAL TO H OLD THAT THE PROJECTS APPROVED BY THE LOCAL AUTHORITIES HAVING RESIDENTIAL BUILDINGS WITH COMMERCIAL USER U PTO 10 PER CENT OF THE PLOT AREA WOULD ALONE BE ENTITLE D TO DEDUCTION UNDER S.80-IB(10). AS NOTED EARLIER RESTRICTION REGARDING COMMERCIAL USER HAS BEEN IMPOSED FOR THE FIRST TIME BY INTRODUCING CL. (D) T O S. 80- 3 IB(10) W.E.F. 1ST APRIL 2005. THEREFORE IT WAS NO T OPEN TO THE TRIBUNAL TO HOLD THAT PRIOR TO 1ST APRIL 20 05 PROJECTS HAVING COMMERCIAL USER UPTO 10 PER CENT OF THE PLOT AREA ALONE WOULD BE ELIGIBLE FOR S. 80-IB(10) DEDUCTION. 28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29. LASTLY THE ARGUMENT OF THE REVENUE THAT S.80IB(10) AS AMENDED BY INSERTING CL. (D) W.E.F. 1ST APRIL 2 005 SHOULD BE APPLIED RETROSPECTIVELY IS ALSO WITHOUT A NY MERIT BECAUSE FIRSTLY CL. (D) IS SPECIFICALLY INSERTED W.E.F. 1ST APRIL 2005 AND THEREFORE THAT CLAUSE CANNOT BE APPLIED FOR THE PERIOD PRIOR TO 1ST APRIL 2005. SECONDLY CL. (D) SEEKS TO DENY S. 80-IB(10) DEDUCTION TO PROJECTS HAVING COMMERCIAL USER BEYOND THE LIMIT PRESCRIBED UNDER CL. (D) EVEN THOUGH SUCH COMMERCIAL USER IS APPROVED BY THE LOCA L AUTHORITY. THEREFORE THE RESTRICTION IMPOSED UNDER THE ACT FOR THE FIRST TIME W.E.F. 1ST APRIL 2005 CANNO T BE APPLIED RETROSPECTIVELY. THIRDLY IT IS NOT OPEN TO THE REVENUE TO CONTEND ON THE ONE HAND THAT S. 80-IB(10) AS IT STOOD PRIOR TO 1ST APRIL 2005 DID NOT PERMIT COMMERCIAL USER IN HOUSING PROJECTS AND ON THE OTHER HAND CONTEND THAT THE RESTRICTION ON COMMERCIAL USER INTRODUCED W.E.F. 1ST APRIL 2005 SHOULD BE APPLIED RETROSPECTIVELY. THE ARGUMENT OF THE REVENUE IS MUTUALLY CONTRADICTORY AND HENCE LIABLE TO BE REJECTED. THUS IN OUR OPINION THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT CL. (D) INSERTED TO S. 80-IB(10) W.E.F. 1ST APRIL 2005 IS PROSPECTIVE AND NOT RETROSPECTIV E AND HENCE CANNOT BE APPLIED TO THE PERIOD PRIOR TO 1ST APRIL 2005.' 3.1 WE ARE NOT INCLINED TO INTERFERE IN FINDING OF CIT(A) BECAUSE THE RESTRICTION REGARDING COMMERCIAL USER H AS BEEN IMPOSED FOR THE FIRST TIME BY THE INTRODUCTION OF C LAUSE (D) TO SECTION 80IB(10) W.E.F. 01-04-2005. THEREFORE IT WAS NOT OPEN TO THE REVENUE AUTHORITIES TO HOLD THAT PRIOR TO 01 -04-2005 PROJECTS HAVING COMMERCIAL USER UPTO 10% OF THE PLO T AREA ALONE WOULD BE ELIGIBLE FOR DEDUCTION U/S.80IB(10). THIS 4 AMENDMENT IS PROSPECTIVE. ACCORDINGLY CIT(A) WAS JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE U/S.80IB(10) IN RESPECT OF PROJECT HAVING COMMERCIAL AREA IN IT. SAME IS UPHE LD. AS A RESULT APPEAL OF REVENUE IS DISMISSED. 4. WE FIND SIMILAR ISSUE AROSE IN ITA NO.365/PN/201 3 FOR A.Y. 2005-06 AND CIT(A) HAS GRANTED RELIEF TO THE A SSESSEE. FACTS BEING SIMILAR SO FOLLOWING THE SAME REASONIN G THIS APPEAL OF REVENUE IS ALSO DISMISSED. 5. IN THE RESULT BOTH THE APPEALS OF REVENUE ARE D ISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF OCTOBER 2013. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMA R YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R PUNE DATED: 30 TH OCTOBER 2013 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-II PUNE 4 CIT-II PUNE 5. THE D.R B PUNE BENCH 6. GUARD FILE //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY ITAT PUNE BENCHES PUNE