SHREE DATTA DEVELOPERS, MUMBAI v. ACIT 17(3), MUMBAI

ITA 5061/MUM/2011 | 2006-2007
Pronouncement Date: 18-10-2016 | Result: Allowed

Appeal Details

RSA Number 506119914 RSA 2011
Assessee PAN AAMFS8023P
Bench Mumbai
Appeal Number ITA 5061/MUM/2011
Duration Of Justice 5 year(s) 3 month(s) 20 day(s)
Appellant SHREE DATTA DEVELOPERS, MUMBAI
Respondent ACIT 17(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 18-10-2016
Date Of Final Hearing 04-08-2015
Next Hearing Date 04-08-2015
Assessment Year 2006-2007
Appeal Filed On 28-06-2011
Judgment Text
E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUM BAI BEFORE SHRI C.N.PRASAD JUDICIAL MEMBER AND SHRI RAMIT KOCHAR ACCOUNTANT MEMBER ./ I.T.A. NO. 5061 /MUM/2011 I.T.A. NO. 5061/MUM/2011 (ASSESSMENT YEAR: 2006-07) M/S. SHREE DATTA DEVELOPERS 62/A PRADHAN LODGE PARLE VILLAGE MUMBAI 400 012. V. A.C.I.T. 17(3) MUMBAI IT OFFICES (6 TH FLOOR) PIRAMAL CHAMBERS LALBAUG PAREL MUMBAI 400 012. PAN/GIR NO. AAMFS8023P ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI M. SUBRAMANIAN RESPONDENT BY : MS. POOJA SWAROOP DR DATE OF HEARING : 25.08 .201 6 DATE OF PRONOUNCEMENT : 18-10-2016 O R D E R PER RAMIT KOCHAR ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE APPELLATE ORDERS PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-29 MUMBAI (CIT(A) FOR SHORT) DATED 15.03.2011 THE ASSESSEES APPEA L CONTESTING ITS ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT 1961 (THE ACT HEREI NAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2006-07 VIDE ASSESSMENT ORDER DATED 15.12.20 08. 2 I.T.A. NO. 5061/MUM/2011 (ASSESSMENT YEAR: 2006-07) 2. AT THE OUTSET LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT THERE IS DELAY IN FILING APPEAL BY 3 DAYS AND THE SAID DELAY IS SUPPO RTED BY APPLICATION FOR CONDONATION OF DELAY AND AFFIDAVIT OF THE ASSESSEES PARTNER PR AYING FOR CONDONATION OF DELAY OF THREE DAYS. THE LEARNED DR SUBMITTED THAT THE APPEA L IS FILED LATE BY THREE DAYS. WE KEEPING IN VIEW THE LARGER INTEREST OF JUSTICE ARE OF CONSIDERED VIEW THAT THIS DELAY OF THREE DAYS NEED TO BE CONDONED AND THE APPEAL BE AD MITTED IN LARGER INTEREST OF JUSTICE AS WHERE TECHNICALITIES ARE PITTED AGAINST THE JUST ICE THE COURSE WHICH ADVANCES JUSTICE IS TO BE PREFERRED. THE RELIANCE IS ALSO PLACED ON DECISION OF OF HONBLE SUPREME COURT IN THE CASE OF COLLECTOR OF LAND ACQUISITION V. MST. KATIZ AND OTHERS 167 ITR 471 AND N. BALKRISHNA V. KRISHNAMURTHY (1998) 7 SCC 123. 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN MEMO OF APPEAL FILED WITH THE TRIBUNAL ARE AS UNDER: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED C.I.T.(A) ERRED IN DISMISSING THE APPEAL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW THE LEARNED C.I.T.(A) ERRED IN DISMISSING THE APPEAL AND THAT TOO WITHOUT GIVING FULL AND PROPER OPPORTUNITY OF BEING HEARD IN THE MATTER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E IN LAW THE LEARNED C.I.T.(A) ERRED IN DISMISSING THE APPEAL AND THAT T OO WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE FULLY AND PROPE RLY. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED C.I.T.(A) ERRED IN UPHOLDING THE ACTION OF THE A.O . IN DENYING THE BENEFITS OF THE PROVISION OF SECTION 80IB (10) OF THE I.T. ACT . 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE INTEREST CHARGED U/S. 234B OF THE I.T.ACT IS INVALID AND BAD IN LAW. 3 I.T.A. NO. 5061/MUM/2011 (ASSESSMENT YEAR: 2006-07) 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS DOING THE BUSINESS AS BUILDERS AND DEVELOPERS . THE ASSESSEE IS OBSERVING PROJECT COMPLETION METHOD. THE ASSESSEES PROJECT OF RECONSTRUCTION OF EXISTING BUILDING IS I N A SLUM AREA AS DECLARED BY BMC AND GOVERNMENT OF MAHARASHTRA. HOWEVER. IT WAS OBSE RVED BY THE AO THAT THE SCHEME IS NOT NOTIFIED BY THE BOARD. 5. DURING THE ASSESSMENT YEAR ASSESSEE WORK IN PRO GRESS IS RS.2 14 17 560/- . THE ASSESSEE HAS RECEIVED RS. 40 30 808/- AS BOOKING AD VANCE AND EARNED NET PROFIT OF RS.9 21 942/- WHICH IS TRANSFERRED TO PARTNERS CAP ITAL ACCOUNT. THE ASSESSEE HAS DISALLOWED RS.40 87 556/- U/S. 40(A)(IA) OF THE ACT AND HAS CLAIMED DEDUCTION U/S 80IB OF THE ACT FOR RS.50 09 498/-. THE ASSESSEE PR OJECT OF RECONSTRUCTION OF EXISTING BUILDING IS IN A SLUM AREA AS DECLARED BY THE BMC A ND GOVERNMENT OF MAHARASHTRA HOWEVER THE SCHEME IS NOT NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) AND AS PER THE ASSESSING OFFICER (HEREINAFTER CALLED T HE AO) NO DEDUCTION CAN BE ALLOWED TO THE ASSESSEE UNDER SECTION 80-IB(10) O F THE ACT UNLESS SUCH A SCHEME OF RECONSTRUCTION IS NOTIFIED BY THE CBDT AND IT WAS OBSERVED BY THE AO THAT DEDUCTION U/S 80IB OF THE ACT WAS ALSO DENIED TO THE ASSESSEE IN THE ASSESSMENT YEAR 2005-06. THEREFORE IT WAS OBSERVED BY THE AO THAT THE ASSES SEE IS NOT ELIGIBLE FOR DEDUCTION U/S. 80-IB(10) OF THE ACT AS CLAIMED BY THE ASSESSE E. THUS THE AO DISALLOWED THE CLAIM OF DEDUCTION BY THE ASSESSEE U/S. 80-IB(10) O F THE ACT VIDE ASSESSMENT ORDER DATED 15.12.2008 PASSED U/S 143(3) OF THE ACT. 6. AGGRIEVED BY THE ASSESSMENT ORDERS PASSED DATED 15.12.2008 PASSED BY THE AO U/S 143(3) OF THE ACT THE ASSESSEE FILED FIRST APPEAL BEFORE THE CIT(A) THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE ASSES SEE IS IN THE BUSINESS OF RECONSTRUCTION OF HOUSING PROJECTS APPROVED BY CENT RAL OR STATE GOVERNMENT AND FOR A 4 I.T.A. NO. 5061/MUM/2011 (ASSESSMENT YEAR: 2006-07) RECONSTRUCTION SCHEME APPROVAL BY THE CENTRAL OR S TATE GOVERNMENT IS SUFFICIENT AND FOR WHICH CBDT APPROVAL / NOTIFICATION IS NOT REQU IRED . THE ASSESSEE SUBMITTED THAT THE CBDT APPROVAL IS REQUIRED FOR REDEVELOPMENT OF EXISTING BUILDINGS IN THE SLUM AREA AS PER SECTION 80IB(10) OF THE ACT AND NOT FOR RECONSTRUCTION BUSINESS. THE CIT(A) REJECTED THE CONTENTIONS OF THE ASSESSEE BY OBSERVING THAT THERE IS NO NOTIFICATION ISSUED BY CBDT FOR THE PROJECT UNDERTA KEN BY THE ASSESSEE U/S 80-IB(10) OF THE ACT AND THE ENTIRE PROVISION HAS TO BE READ TOGETHER AND RECONSTRUCTION AND REDEVELOPMENT CANNOT BE SPLIT AS INDEPENDENT PHRASE S AND DISALLOWANCE BY THE AO WAS HELD JUSTIFIED AND CONFIRMED. VIDE CIT(A) APPE LLATE ORDER DATED 15-03-2011 . 7. AGGRIEVED BY THE APPELLATE ORDERS DATED 15-03- 2011 OF THE LEARNED CIT(A) THE ASSESSEE FILED SECOND APPEAL WITH THE TRIBUNAL . 8. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED BEFOR E US THAT THE ASSESSEE IS DOING THE PROJECT OF RECONSTRUCTION OF EXISTING BUILDING IN A SLUM AREA AS DECLARED BY BMC AND GOVERNMENT OF MAHARASHTRA AND THE FIRST YEAR W HEN THE DEDUCTION U/S 80IB(10) OF THE ACT WAS CLAIMED BY THE ASSESSEE WAS THE ASS ESSMENT YEAR 2005-06. THE LD. COUNSEL OF THE ASSESSEE MADE STATEMENT BEFORE US TH AT THE CBDT NOTIFICATION WITH RESPECT TO THIS PROJECT SHREE DATTA ENCLAVE AT PA REL VILLAGE AS REQUIRED UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT HAS BEEN ISSUED BY THE CBDT. THE ASSESSEE SUBMITTED THAT THE SECOND APPEAL BEFORE THE MUMBAI TRIBUNAL FOR THE SAID ASSESSMENT YEAR 2005-06 WHICH WAS THE FIRST ASSESSMENT YEAR OF CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT WAS DECIDED BY THE MUMBAI TRIBUNAL IN ITA NO. 1863/MUM/2010 WHEREBY THE MUMBAI TRIBUNAL HAS SET ASIDE THE MATTE R TO THE FILE OF AO FOR DE-NOVO DETERMINATION AND ADJUDICATION OF THE CLAIM OF THE ASSESSEE U/S 80IB(10) OF THE ACT AS THE NOTIFICATION BY THE CBDT HAS BEEN ISSUED O NLY AFTER THE ORDERS WERE PASSED BY THE CIT(A) FOR THE ASSESSMENT YEAR 2005-06. THE RE LEVANT EXTRACTS FROM THE ORDERS OF 5 I.T.A. NO. 5061/MUM/2011 (ASSESSMENT YEAR: 2006-07) THE TRIBUNAL IN ITA NO. 1863/MUM/2010 FOR ASSESSMEN T YEAR 2005-06 ARE REPRODUCED BELOW:- 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED COUNSEL F OR THE ASSESSEE HAS SUBMITTED THAT THE NOTIFICATION HAS BEEN ISSUED BY THE CBDT ONLY AFTER THE IMPUGNED ORDER WAS PASSED BY THE LEARNED CIT(APPEA LS) AND THE ASSESSEE THEREFORE COULD NOT PRODUCE THE SAME EI THER BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR EVEN BEFOR E THE LEARNED CIT(APPEALS) DURING THE COURSE OF APPELLATE PROCEE DINGS. HE HAS URGED THAT THIS MATTER MAY THEREFORE BE RESTORED TO THE FIL E OF THE ASSESSING OFFICER FOR GIVING THE ASSESSEE AN OPPORTUNITY TO PRODUCE THE REQUIRED APPROVAL OF THE CBDT TO THE PROJECT UNDERTAKEN BY THE ASSESSEE. WE FIND MERIT IN THIS ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE A ND KEEPING IN VIEW THE INTEREST OF JUSTICE WE SET ASIDE THE IMPUGNED ORD ER OF THE LEARNED CIT(APPEALS) ON THE ISSUE UNDER CONSIDERATION AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH AFTER AFFORDING THE ASSESSEE ONE MORE OPPORTUNITY TO SUPPORT AND SUBSTANTIATE ITS C LAIM FOR DEDUCTION U/S. 80-IB(10). IT WAS SUBMITTED THAT SIMILARLY FOR ASSESSMENT YEA R 2007-08 ALSO THE TRIBUNAL VIDE ITS ORDERS IN ITA NO. 3314/MUM/2012 VIDE ORDER S DATED 16.12.2015 HAS SET ASIDE AND RESTORED THE MATTER TO THE FILE OF THE AO FOR D E-NOVO DETERMINATION OF THE ISSUE AS THE FACTS WERE IDENTICAL IN THE ASSESSMENT YEAR 200 7-08 VIS--VIS ASSESSMENT YEAR 2005-06. SINCE THE ASSESSMENT YEAR UNDER APPEAL IS 2006-07 WHILE THE FIRST ASSESSMENT YEAR IN WHICH THE ASSESSEE CLAIMED DEDUC TION U/S 80IB(10) OF THE ACT WAS ASSESSMENT YEAR 2005-06 FOR WHICH THE MATTER HAS A LREADY BEEN SET ASIDE BY THE TRIBUNAL IN ITA NO. 1863/MUM/2010 TO THE FILE OF AS SESSING OFFICER FOR DE-NOVO DETERMINATION AND ADJUDICATION OF CLAIM OF THE ASSS ESSEE FOR DEDUCTION U/S 80IB(10) OF THE ACT AS DISCUSSED ABOVE AS ALSO FOR THE ASSES SMENT YEAR 2007-08 SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL VIDE ORDERS DATED 33 14/MUM/2012 DATED 16.12.2015 WE RESPECTFULLY FOLLOWING THE ORDERS OF THE CO-ORD INATE BENCHES OF THE MUMBAI 6 I.T.A. NO. 5061/MUM/2011 (ASSESSMENT YEAR: 2006-07) TRIBUNAL IN ITA NO. 1863/MUM/2010 ALSO RESTORE TH IS ISSUE IN THE PRESENT APPEAL FOR ASSESSMENT YEAR 2006-07 TO THE FILE OF ASSESSING OF FICER FOR DE-NOVO ADJUDICATION AND DETERMINATION OF THE CLAIM OF THE ASSESSEE U/S 80IB (10) IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT PROPER AND ADEQUATE OPPORTUNIT Y WILL BE GIVEN BY THE AO TO THE ASSESSEE IN ACCORDANCE WITH THE PRINCIPLES OF NATUR AL JUSTICE AND IN ACCORDANCE WITH LAW AND THE ASSSESSEE WILL BE ALLOWED TO PRODUCE NE CESSARY EVIDENCE IN SUPPORT OF ITS CONTENTIONS AND CLAIM U/S 80IB(10) OF THE ACT IN HI S DEFENSE. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH OCTOBER 2016 SD/- SD/- (C N PRASAD) (RAMIT KOCHAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 18.10.2016 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT CONCERNED 5. DR ITAT MUMBAI 6. GUARD FILE BY ORDER (DY./ASSTT. REGISTRAR) ITAT MUMBAI