ACIT, Central Circle 1(2),, Pune v. Shri Naresh Thakurdas Wadhwani,, Pune

ITA 58/PUN/2013 | 2004-2005
Pronouncement Date: 30-04-2014 | Result: Dismissed

Appeal Details

RSA Number 5824514 RSA 2013
Assessee PAN AABPW7203Q
Bench Pune
Appeal Number ITA 58/PUN/2013
Duration Of Justice 1 year(s) 3 month(s) 25 day(s)
Appellant ACIT, Central Circle 1(2),, Pune
Respondent Shri Naresh Thakurdas Wadhwani,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-04-2014
Assessment Year 2004-2005
Appeal Filed On 04-01-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE: SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO S. 57 58 & 59 / P N/ 20 1 3 ASSESSMENT YEAR S : 200 3 - 04 2004 - 05 & 2005 - 06 DY. COM MISSIONER OF INCOME - TAX CENTRAL CIRCE - 1(2) PUNE VS. SHRI NARESH THAKURDAS WADHWANI OFFICE NO. 9 UMED BHAVAN CANARA BANK BUILDING PIMPRI PUNE (APPELLANT) (RESPONDENT) PAN NO. AABPW7203Q APPELLANT BY: MS. M.S. VERMA RESPONDENT BY: SHRI V.L. JAIN DATE OF HEARING : 29 - 04 - 2014 DATE OF PRONOUNCEMENT : 30 - 04 - 2014 ORDER PER R.S . PADVEKAR JM : - TH IS BATCH OF THREE APPEALS ARE FILED BY THE REVENUE CHALLENGING THE RESPECTIVE IMPUGNED ORDERS OF THE LD. CIT(A) - CENTRAL PUNE FOR THE A.YS. 2003 - 04 2004 - 05 AND 2005 - 06. THE FIRST COMMON ISSUE IN THIS APPEAL IS THE DISALLOWANCE OF DEDUCTION CLAIMED BY THE ASSESSE U/S. 80IB(10) OF THE INCOME - TAX ACT ON ONE OF THE REASON THAT THE COMMERCIAL AREA IN THE HOUSING PROJECT ON WHICH THE ASSESSE HAS C LAIMED THE DEDUCTION EXCEEDED MORE THAN 2000 SQ. FT. 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE HAS UNDERTAKEN TWO HOUSING PROJECTS NAMELY SAI PUJA BAUG AT AKURDI AND SAI SNEHA PARK AT SANGVI. THE ASSESSING OFFICER DECIDED TH E DEDUCTION TO THE ASSESSEE CLAIMED U/S. 80IB(10) ON THE REASON THAT THE COMMERCIAL AREA IN THE HOUSING PROJECT S OF THE ASSESSEE EXCEEDED 2000 SQ. FT. T HE ASSESSING OFFICER ALSO NOTED THAT THE DECISION IN THE CASE OF BRAHMA ASSOCIATES OF THE ITAT PUNE SP ECIAL BENCH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE SAME IS SUBJUDICE BEFORE THE 2 ITA NOS. 57 58 & 59/PN/2013 SHRI NARESH THAKURDAS WADHWANI PUNE HON'BLE HIGH COURT OF BOMBAY. THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. BR AHMA ASSOCIATES 333 ITR 289. 3. IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) THE HON'BLE HIGH COURT HAS HELD AS UNDER: 25. IT IS NOT IN DISPUTE THAT WHERE A PROJECT IS APPROVED AS A HOUSING PROJECT WITHOUT OR WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDE R THE RULES / REGULATIONS THEN DEDUCTION UNDER SECTION 80IB(10) WOULD BE ALLOWABLE. IN OTHER WORDS IF A PROJECT COULD BE APPROVED AS A HOUSING PROJECT HAVING RESIDENTIAL UNITS WITH PERMISSIBLE COMMERCIAL USER THEN IT IS NOT OPEN TO THE INCOME TAX AUTHO RITIES TO CONTEND THAT THE EXPRESSION HOUSING PROJECT IN SECTION 80IB(10) IS APPLICABLE TO PROJECTS HAVING ONLY RESIDENTIAL UNITS. 26. ONCE IT IS HELD THAT THE LOCAL AUTHORITIES COULD APPROVE A PROJECT TO BE HOUSING PROJECT WITHOUT OR WITH THE COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DC RULES THEN THE PROJECT APPROVED WITH THE PERMISSIBLE COMMERCIAL USER WOULD BE ELIGIBLE FOR SECTION 80IB(10) DEDUCTION IRRESPECTIVE OF THE FACT THAT THE PROJECT IS APPROVED AS 'HOUSING PROJECT' OR APPROVED AS 'RES IDENTIAL PLUS COMMERCIAL'. IN OTHER WORDS WHERE A PROJECT FULFILLS THE CRITERIA FOR BEING APPROVED AS A HOUSING PROJECT THEN DEDUCTION CANNOT BE DENIED UNDER SECTION 80IB(10) MERELY BECAUSE THE PROJECT IS APPROVED AS 'RESIDENTIAL PLUS COMMERCIAL'. 27. F ORM T HE FACT THAT THE DEDUCTION UNDER SECTION 80IB(10) PRIOR TO 1/4/2005 WAS ALLOWABLE ON THE PROFITS DERIVED FROM THE HOUSING PROJECTS CONSTRUCTED DURING THE SPECIFIED PERIOD ON A SPECIFIED SIZE OF THE PLOT WITH RESIDENTIAL UNITS OF THE SPECIFIED SIZE I T CANNOT BE INFERRED THAT THE DEDUCTION UNDER SECTION 80IB(10) WAS ALLOWABLE TO HOUSING PROJECTS HAVING RESIDENTIAL UNITS ONLY BECAUSE RESTRICTION ON THE SIZE OF THE RESIDENTIAL UNIT IS WITH A VIEW TO MAKE AVAILABLE LARGE NUMBER OF AFFORDABLE HOUSES TO T HE COMMON MAN AND NOT WITH A VIEW TO DENY COMMERCIAL USER IN RESIDENTIAL BUILDINGS. IN OTHER WORDS THE RESTRICTION UNDER SECTION 80IB(10) REGARDING THE SIZE OF THE RESIDENTIAL UNIT WOULD IN NO WAY CURTAIL THE POWERS OF THE LOCAL AUTHORITY TO APPROVE A PRO JECT WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DEVELOPMENT CONTROL RULES / REGULATIONS. 3 ITA NOS. 57 58 & 59/PN/2013 SHRI NARESH THAKURDAS WADHWANI PUNE THEREFORE THE ARGUMENT OF THE REVENUE THAT THE RESTRICTION ON THE SIZE OF THE RESIDENTIAL UNIT IN SECTION 80 - IB(10) AS IT STOOD PRIOR TO 1/4/2005 IS SUGGE STIVE OF THE FACT THAT THE DEDUCTION IS RESTRICTED TO HOUSING PROJECTS APPROVED FOR RESIDENTIAL UNITS ONLY CANNOT BE ACCEPTED. 28. THE ABOVE CONCLUSION IS FURTHER FORTIFIED BY CLAUSE (D) TO SECTION 80IB(10) INSERTED WITH EFFECT FROM 1/4/2005. CLAUSE (D) TO SECTION 80IB(10) INSERTED W.E.F. 1/4/2005 PROVIDES THAT EVEN THOUGH SHOPS AND COMMERCIAL ESTABLISHMENTS ARE INCLUDED IN THE HOUSING PROJECT DEDUCTION UNDER SECTION 80IB(10) WITH EFFECT FROM 1/4/2005 WOULD BE ALLOWABLE WHERE SUCH COMMERCIAL USER DOES NOT EXCEED FIVE PER CENT OF THE AGGREGATE BUILT - UP AREA OF THE HOUSING PROJECT OR TWO THOUSAND SQUARE FEET WHICHEVER IS LOWER. BY FINANCE ACT 2010 CLAUSE (D) IS AMENDED TO THE EFFECT THAT THE COMMERCIAL USER SHOULD NOT EXCEED THREE PER CENT OF THE AGGREGATE BUILT - UP AREA OF THE HOUSING PROJECT OR FIVE THOUSAND SQUARE FEET WHICHEVER IS HIGHER. THE EXPRESSION 'INCLUDED' IN CLAUSE (D) MAKES IT AMPLY CLEAR THAT COMMERCIAL USER IS AN INTEGRAL PART OF A HOUSING PROJECT. THUS BY INSERTING CLAUSE (D) TO SECTION 80IB (10) THE LEGISLATURE HAS MADE IT CLEAR THAT THOUGH THE HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITIES WITH COMMERCIAL USER TO THE EXTENT PERMISSIBLE UNDER THE DEVELOPMENT CONTROL RULES / REGULATION WERE ENTITLED TO SECTION 80IB(10) DEDUCTION WITH EFFE CT FROM 1/4/2005 SUCH DEDUCTION WOULD BE SUBJECT TO THE RESTRICTION SET OUT IN CLAUSE (D) OF SECTION 80IB(10). THEREFORE THE ARGUMENT OF THE REVENUE THAT WITH EFFECT FROM 1/4/2005 THE LEGISLATURE FOR THE FIRST TIME ALLOWED SECTION 80IB(10) DEDUCTION TO HO USING PROJECTS HAVING COMMERCIAL USER CANNOT BE ACCEPTED. 4. ADMITTEDLY THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSE E BY THE DECISION OF THE JURISDICTIONAL HIGH COURT. WE RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) DISMISS THE RESPECTIVE GROUNDS TAKEN BY THE REVENUE IN THE A.YS. 2003 - 04 2004 - 05 AND 2005 - 06. 5. THE NEXT ISSUE IS THE ASSESSING OFFICER ALSO DENIED THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB(10) ON THE REASON THAT THE AREA OF PLOT IS LESS THAN ON E ACRE. THE LD. COUNSEL SUBMITS THAT THE ASSESSING 4 ITA NOS. 57 58 & 59/PN/2013 SHRI NARESH THAKURDAS WADHWANI PUNE OFFICER HIMSELF HAS PASSED THE ORDER U/S. 154 FOR THE A.Y. 2003 - 04 DATED 18 - 04 - 2011 AND RECTIFIED THE OBSERVATION ON THE ISSUE OF THE AREA OF THE PLOT. THE LD. COUNSEL ALSO FILED THE COPY OF THE RECTIFIC ATION ORDER PASSED BY THE ASSESSING OFFICER U/S. 154 OF THE ACT AND THIS ISSUE IS PARTICULARLY IN RESPECT OF THE HOUSING PROJECT NAMELY SAI PUJA BAUG . THE LD. DR FAIRLY CONCEDED THAT THE ASSESSING OFFICER HIMSELF HAS RECTIFIED HIS OBSERVATION ON THE ARE A OF PLOT BY HOLDING THAT THERE ARE NO SEPARATE DISTINCT PLOT S BUT ONLY ONE PLOT AND HENCE THE GROUNDS TAKEN BY THE REVENUE DO NOT SURVIVE. WE ACCORDINGLY DISMISS THE RESPECTIVE GROUNDS TAKEN BY THE REVENUE ON THE ISSUE OF AREA OF PLOT FOR REFUSING TO GRANT DEDUCTION TO THE ASSESSEE U/S. 80IB(10) OF THE ACT. WE ACCORDINGLY DISMISS THE RELEVANT GROUNDS TAKEN BY THE REVENUE IN RESPECTIVE APPEALS. 6. IN THE RESULT ALL THE THREE APPEAL OF THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30 - 04 - 201 4 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE DATED : 30 TH APRIL 2014 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - CENTRAL PUNE 4 THE CIT - C ENTRAL PUNE 5 THE DR ITAT A BENCH PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE