ACIT 10(3), MUMBAI v. BOMBAY SLUM REDEVELOPMENT CORPORATION LTD, MUMBAI

ITA 5333/MUM/2009 | 2005-2006
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 533319914 RSA 2009
Assessee PAN AABCB0248H
Bench Mumbai
Appeal Number ITA 5333/MUM/2009
Duration Of Justice 1 year(s) 10 month(s) 4 day(s)
Appellant ACIT 10(3), MUMBAI
Respondent BOMBAY SLUM REDEVELOPMENT CORPORATION LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 22-07-2011
Date Of Final Hearing 11-07-2011
Next Hearing Date 11-07-2011
Assessment Year 2005-2006
Appeal Filed On 17-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI R.S. SYAL A.M. AND SHRI V. DURGA RAO J.M. ITA NO. 5333/MUM/2009 ASSESSMENT YEAR: 2005-06 ASSTT. COMMISSIONER OF INCOME-TAX-10(3) . APPELL ANT ROOM NO. 451 4 TH FLOOR AAYAKAR BHAVAN M.K. MARG MUMBAI 400 020. VS. BOMBAY SLUM REDEVELOPMENT CORPORATION LTD. RESPON DENT 5/6 GEETA BUILDING SHIVAM SOCIETY DEVIDAYAL ROAD MULUND (W) MUMBAI 400 080. (PAN AABCB0248H) APPELLANT BY : MR. P.C. MAURYA RESPONDENT BY : MR. ASHOK L. SHARMA ORDER PER V. DURGA RAO J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)- X MUMBAI PASSED ON 06/07/2009 FOR THE ASS ESSMENT YEAR 2005-06 WHEREIN THE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING DEDUCTION U/S 80IB OF RS. 12 38 917/- IGNORING THE FACTS THAT THE ASSESSEE WA S NOT ELIGIBLE FOR DEDUCTION U/S 80IB. 2. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2. BRIEFLY THE FACTS RELATING TO RAISE THIS GROUND ARE THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80IB OF RS. 12 38 917/- WHICH IS ON ACCOUNT OF SALE OF FLATS AT SHIVSHAKTI NAGAR. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING ASSESSMENT ORDE R IN AY 2003-04 IN ASSESSEES OWN CASE. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE ITA NO. 5333/M/2009 BOMBAY SLUM REDEVELOPMENT CORPN LTD. 2 CIT(A). BEFORE THE CIT(A) THE ASSESSEE SUBMITTED T HAT THE WIP OF RS. 10 CRORES REFLECTS THE VALUE AT WHICH THE PROJECT W AS TAKEN OVER BY THE ASSESSEE COMPANY AND BASICALLY REPRESENTS THE VALU E AT WHICH THE PROJECT WAS TAKEN OVER AFTER REVALUATION. NO CONS TRUCTION WORK WAS CARRIED OUT AT THE PROJECT PRIOR TO 31/03/2003 AND HENCE THE CONDITION OF SECTION 80IB(10)(A) HAS BEEN FULFILLED IN AS MUCH AS THE PROJECT HAS COMMENCED CONSTRUCTION AFTER 01/10/98. THE ASSESSEE HAS FILED DETAILS OF THE WIP OF RS. 10 00 78 600/- AS WELL AS THE BALANCE SHEET OF THE AMALGAMATING COMPANY FOR THE YEAR ENDING 1996 IN SUPPORT OF ITS ARGUMENT. THE ASSESSEE HAD FURTHER SUBMITTED THAT THE AO HAD ALLOWED DEDUCTION U/S 80IB(10) WIT H REGARD TO THE PROJECTS OF SHIV SHAKTI NAGAR PROJECT FOR THE AY 2 004-05 THEREFORE THE SAME PRINCIPLE NEEDS TO BE FOLLOWED FOR THE AY 2005-06 KEEPING IN VIEW THE DECISION IN THE CASE OF ACIT VS. GENDALAL HAZAILAL AND CO. 263 ITR 679. WITH REGARD TO DISALLOWANCE MADE IN TH E AY 2003-04 IN RESPECT OF ROHIDAS NAGAR PROJECT IT WAS SUBMITTED THAT THE CIT(A) HAD GIVEN RELIEF TO THE ASSESSEE AND ALLOWED THE CLAIM U/S 80IB(10) OF THE ACT. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSES SEE THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 3. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE HAS CANVASSED THAT THE ISSUE UNDER CONSIDERATION IS COVERED BY TH E DECISION OF ITAT IN AY 2003-04 IN ASSESSEES OWN CASE FOR AY 2003-04 IN ITA NO. 5891/M/06 VIDE ORDER DATED 27 TH OCTOBER 2009. A COPY OF THE SAID ORDER IS AVAILABLE ON RECORD. THE LEARNED DR DID NO T CONTROVERT THE SAID FACT. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE ISSUE IS COVER ED BY THE DECISION OF THE ITAT IN ASSESEES OWN CASE FOR AY 2003-04 W HEREIN THE ITAT HELD AS UNDER:- ITA NO. 5333/M/2009 BOMBAY SLUM REDEVELOPMENT CORPN LTD. 3 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. THE RELEVANT SECTION 80IB (10) OF THE ACT APPLICABLE TO THE RELEVANT YEAR READS AS UNDER:- 80IB(10) THE AMOUNT OF PROFITS IN CASE OF AN UNDER TAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED [BEFORE THE 31ST DAY OF MARCH 2 001 ] BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RE LEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEV ELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER 1998 AN D COMPLETES THE SAME BEFORE THE 31ST DAY OF MARCH [2001 ] ; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE; AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP ARE A OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF D ELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE T HOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. 6.1 ON PLAIN READING OF THE ABOVE SECTION WE FIND THAT ONE OF THE CONDITION FOR ALLOWING DEDUCTION U/S 80IB(10) OF T HE ACT IS THAT SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST OCTOBER 1998. HERE CRUX OF THE MATTER TO EXAMINE WHETHER UNDER THE CIRCUMSTANCES THE ASSESSEE HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT ON OR AFTER 1ST OCT OBER 1998. THE EXPENDITURE AS NOTED BY THE AO IS GENERAL AND COMMO N EXPENDITURE NOT RELATED TO DEVELOPMENT AND CONSTRUCTION OF THE HOUS ING PROJECT. THE FULL CC IN THIS CASE HAS BEEN SANCTIONED BY THE EXE CUTIVE ENGINEER AS WELL AS REHABILITATION AUTHORITIES ON 10TH JANUARY 2000. THUS IT IS APPARENT AND CLEAR THAT THE DEVELOPMENT AND CONSTRU CTION OF THE HOUSING PROJECT IN THE CASE UNDER CONSIDERATION WAS TO COMMENCE ONLY AFTER 10TH JANUARY00 WHICH IS ON OR AFTER 1ST OCT OBER 1998. THE ASSESSEE FILED A PHOTO COPY OF FULL CC ISSUED BY SL UM REHABILITATION AUTHORITIES WHICH HAS BEEN PLACED AT PAGE 74 OF TH E ASSESSEES PAPER BOOK. 6.2 AS REGARDS THE EXPENDITURE INCURRED PRIOR TO TH AT THE CIT (A) HAD MADE ELABORATE DISCUSSION AT PAGES 5 TO 12 OF HIS O RDER. THE WIP OF RS. 7 66 11 455/- SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNT IS NOTHING BUT NET MARKET VALUE OF FSI ARRIVED AT FOR THE PURPOSE OF AMALGAMATION. 4 50 000/- WAS ADVANCE PAYMENT OF WH ICH RELEVANT BILL DATED 31.3.1999. RS. 1 87 720/- INCURRED ON ACCOUNT OF CEMENT AND STEEL. THIS EXPENDITURE WAS INCURRED FOR THE BUILDI NG FOR REHABILITATION OF OLD TENANTS. THUS ON THE BASIS OF THAT IT CANN OT BE HELD THAT THE ASSESSEE HAS COMMENCED THE HOUSING PROJECT ON OR BE FORE 1ST OCTOBER98 BECAUSE COMMENCEMENT OF BUSINESS AND COM MENCEMENT OF PROJECT BOTH ARE DIFFERENT THINGS. THE COMMENCEMENT AND DEVELOPMENT WORK OF PROJECT CANNOT BE STARTED UNLESS THE PROPER SANCTION IS OBTAINED FROM COMPETENT AUTHORITY. IN THE CASE UNDE R CONSIDERATION THE FULL CC HAS BEEN RECEIVED BY THE ASSESSEE ONLY ON 1 0.1.2000 IT MEANS THAT THE ASSESSEE HAS COMMENCED OR COMMENCES DEVELO PMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER ITA NO. 5333/M/2009 BOMBAY SLUM REDEVELOPMENT CORPN LTD. 4 1998.IN THE LIGHT OF ABOVE DISCUSSION WE INCLINED T O UPHOLD THE ORDER OF CIT (A) ACCORDINGLY THE ORDER OF THE CIT(A) IS CON FIRMED ON THE ISSUE. 5. SINCE THE ISSUE UNDER CONSIDERATION IS IDENTICAL TO THAT OF AY 2003-04 WE RESPECTFULLY FOLLOW THE DECISION OF THE ITAT IN THAT YEAR AND IN THE LIGHT OF THAT WE UPHOLD THE ORDER OF CIT (A) IN ALLOWING THE CLAIM OF THE ASSESSEE OF RS. 12 38 917/- U/S 80IB A ND DISMISS THE GROUND RAISED BY THE REVENUE. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JULY 2011. SD/- SD/- (R.S. SYAL) (V. D URGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI DATED: 22 ND JULY 2011 KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE B BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI.