GUNDECHA BUILDERS, MUMBAI v. DCIT 24(3), MUMBAI

ITA 6171/MUM/2011 | 2005-2006
Pronouncement Date: 09-10-2013 | Result: Dismissed

Appeal Details

RSA Number 617119914 RSA 2011
Assessee PAN AAAFG0848E
Bench Mumbai
Appeal Number ITA 6171/MUM/2011
Duration Of Justice 2 year(s) 1 month(s) 3 day(s)
Appellant GUNDECHA BUILDERS, MUMBAI
Respondent DCIT 24(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 09-10-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 09-10-2013
Date Of Final Hearing 05-12-2013
Next Hearing Date 05-12-2013
Assessment Year 2005-2006
Appeal Filed On 06-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN JUDICIAL MEMBER ITA NO. 6171/MUM/2011 ASSESSMENT YEAR : 2005-06 M/S. GUNDECHA BUILDERS 141 GUNDECHA HOUSE JAWAHAR NAGAR GOREGAON (W) MUMBAI 400 062 PAN :AAAFG 0848 E VS. DCIT-24(3) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIMAL PUNMIYA RESPONDENT BY : SHRI C. P. PATHAK DATE OF HEARING : 18.09.2013 DATE OF PRONOUNCEMENT : 09.10.2013 O R D E R PER DR. S.T.M. PAVALAN JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A) -34 MUMBAI DATED 29.07.2011 FOR THE ASSE SSMENT YEAR 2005-06. 2. IN THIS APPEAL THE ASSESSEE HAS AGITATED THE AC TION OF THE LD.CIT(A) CONFIRMING THE ORDER PASSED BY THE AO U/S 154 OF TH E INCOME TAX ACT AND RESTRICTING THE DEDUCTION U/S 80IB(10) TO RS.21 30 13 955/- AS AGAINST THE CLAIM OF THE ASSESSEE AMOUNTING TO RS.21 36 83 706/-. 3. BRIEFLY STATED THE ASSESSEE A FIRM ENGAGED IN THE BUSINESS OF DEVELOPMENT OF REAL ESTATE PROJECTS WHILE DECLARING A TOTAL INCOM E OF RS.6 51 500/- HAD CLAIMED A DEDUCTION OF RS.21 36 83 706/- RESPECT OF ITS POISE R PROJECT BEING ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S 80IB (10) OF THE ACT. THE SA ID CLAIM INCLUDED A RENT OF ITA NO. 6171/MUM/2011 M/S. GUNDECHA BUILDERS ASSESSMENT YEAR : 2005-06 2 RS.60 000/- INTEREST OF RS.33 287/- AND A DIVIDEND OF RS.15 000/- HOWEVER IN THE ASSESSMENT FRAMED U/S 143(3) THE AO DISALLOWED THE SAID INCLUSIONS AS THESE AMOUNTS WERE NOT DERIVED FROM THE CONSTRUCTION OF R ESIDENTIAL HOUSES. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE AO ALSO F OUND THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS.26 09 375/- AND RS.33 86 2 80/- ON ACCOUNT OF SALE OF STILT PARKING AND DEVELOPMENT CHARGES COLLECTED FROM THE CUSTOMERS. WHILE ALLOWING THE DEDUCTION OF RS.33 86 280/- CLAIMED BY THE ASSESSEE ON ACCOUNT OF DEVELOPMENT CHARGES THE AO ALSO DISALLOWED AN AMOUNT OF RS.26 09 375/- ON THE REASON THAT THE AMOUNT RECEIVED AGAINST SALE OF STILT PARKING AREA COULD NOT BE TREATED AS RECEIVED AGAINST SALE OF RESIDENTIAL PREMISES AS PER THE PRO VISIONS OF SECTION 80IB(10). ON APPEAL AGAINST THE SAID ASSESSMENT ORDER THE LD.CI T(A) CONFIRMED THE DISALLOWANCES/ADDITIONS ON ACCOUNT OF RENT INTERES T AND DIVIDEND BUT HOWEVER DIRECTED THE AO TO RESTRICT ONLY THE PROFIT AND NOT THE WHOLE CONSIDERATION ON SALE OF CAR PARKING AS THE ADDITION ON THIS COUNT. 3.1 SUBSEQUENTLY THE AO PASSED AN ORDER U/S 154 OF THE ACT AS HE FOUND AMONG OTHER THINGS THAT THE ASSESSEE HAD RECEIVED INTERES T ON FDR FROM PUNJAB NATIONAL BANK TO THE TUNE OF RS.6 69 751/- AND THE SAME WAS SET OFF AGAINST THE EXHIBITION EXPENSES IN RESPECT OF THE POISER PROJECT U/S 80IB( 10). AS THE MISTAKE IS APPARENT FROM THE RECORD IN ALLOWING THE ERRONEOUS CLAIM OF DEDUCTION IN THE ORIGINAL ASSESMENT THE AO RECTIFIED THE ASSESSMENT ORDER U/ S 154 OF THE ACT AND THEREBY DISALLOWED THE CLAIM. ON APPEAL THE LD.CIT(A) HAD CONFIRMED THE ORDER PASSED BY THE AO U/S 154 AS THE SAID ORDER WAS A RESULT OF RE CTIFICATION OF A MISTAKE APPARENT FROM THE RECORDS. AGGRIEVED BY THE IMPUGNED ORDER THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US THE LD.AR HAS CONTENDED THAT THE AO H AS NO JURISDICTION U/S 154 TO GO INTO THE MATTER AND RAISE AN ISSUE WHICH REQUIRE S LONG DRAWN PROCESS AS HE HAS RECTIFIED HIS OMISSION OF MAKING AN ASSESSMENT ON S OME POINT WHICH IS ANALOGICAL TO OTHER POINT. THE DEBATABLE ISSUE WHICH REQUIRES DET AILED INVESTIGATION CANNOT BE DETERMINED IN THE PROCEEDINGS U/S 154 OF THE ACT. F URTHER THE LD.AR HAS ALSO DRAWN OUR ATTENTION TO THE WRITTEN SUBMISSION DATED 18.04 .2013 FILED DURING THE COURSE OF THE PROCEEDINGS AND PLACED RELIANCE ON VARIOUS CASE S STATED THEREIN INCLUDING HONDA ITA NO. 6171/MUM/2011 M/S. GUNDECHA BUILDERS ASSESSMENT YEAR : 2005-06 3 SIEL POWER PRODUCTS LIMITED VS. THE DCIT & ANOTHER TATA IRON & STEEL COMPANY LTD. VS. N.C. UPADHYAYA & ANOTHER (1974) 96 ITR 1 (BOM) DCIT VS WAMAN HARI PETHE SONS (2011) 138 TTJ (MUM) 451 ETC. TO SUBSTAN TIATE THE CLAIM THAT THE LD.CIT(A) OUGHT NOT TO HAVE CONFIRMED THE ORDER OF THE AO U/S 154. ON MERITS THE LD.AR HAS AGITATED THE ACTION OF THE LD.CIT(A) CONF IRMING THE DISALLOWANCE OF DEDUCTION OF INTEREST RECEIVED FROM PUNJAB NATIONAL BANK TO THE TUNE OF RS.6 69 751/- WHICH THE ASSESSEE HAS ADJUSTED AGAI NST EXHIBITION EXPENSES. ON THE OTHER HAND THE LD.DR HAS STATED THAT THE SAID ORDE R OF THE AO U/S 154 IS NOT ULTRA VIRES AND THE LD.CIT(A) HAS CORRECTLY CONFIRMED THE ORDER PASSED BY THE AO U/S 154. THE LD.DR HAS ALSO RELIED ON THE DECISION OF THE AP EX COURT IN THE CASE OF LIBERTY INDIA VS. CIT (2009) 317 ITR 218 TO SUPPORT THE PRO POSITION THAT THE CLAIM OF DEDUCTION IN RESPECT OF INTEREST EARNED ON FDR IS N OT AN ALLOWABLE DEDUCTION U/S 80IB(10) OF THE ACT. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE AS TO THE DECISION OF THE LD.CIT(A) CONFIRMIN G THE RECTIFICATION ORDER PASSED BY THE AO IT IS PERTINENT TO NOTE THAT THE AO IS EMPO WERED TO PASS AN ORDER WITH A VIEW TO RECTIFY THE MISTAKE APPARENT FROM THE RECOR D UNDER SECTION 154 OF THE ACT. FOR THE PURPOSE OF SECTION 154 A PATENT MANIFEST AND SELF EVIDENT ERROR WHICH DOES NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARG UMENT TO ESTABLISH IT CAN BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD A ND THE SAME CAN BE CORRECTED. ADVERTING TO THE FACT OF THE CASE THE RECTIFICATIO N ORDER PASSED U/S 154 BY THE AO IS FOR THE PURPOSE OF RECTIFYING THE ERRONEOUS CLAIM O F DEDUCTION U/S 80IB(10) AS REGARDS THE INTEREST ON FDR WHICH HAS BEEN ALLOWED IN THE ORIGINAL ASSESSMENT U/S 143(3). NOW THE ISSUE ARISES IS WHETHER ALLOWING A N ERRONEOUS CLAIM OF DEDUCTION U/S 80IB(10) IN THE ORIGINAL ASSESSMENT CAN BE SAID TO BE A MISTAKE APPARENT FROM THE FACT OF RECORD OR THE SAME IS A DEBATABLE POINT OF LAW. THE ADJUDICATION ON THIS ISSUE DEPENDS ON THE NATURE OF THE ERRONEOUS CLAIM OF DEDUCTION ALLOWED IN THE ORIGINAL ASSESSMENT ORDER. IT IS A CLEAR PROPOSITIO N THAT SECTION 80IB(10) ALLOWS THE DEDUCTION OF ONLY THE PROFITS DERIVED FROM THE HOUS ING PROJECT. THE TERM DERIVED IS NARROWER IN CONNECTION AS COMPARED TO THE WORDS AT TRIBUTABLE TO AS DECIDED BY THE APEX COURT IN THE CASE OF LIBERTY INDIA VS. CIT 200 9 317 ITR 218. HENCE IT CANNOT ITA NO. 6171/MUM/2011 M/S. GUNDECHA BUILDERS ASSESSMENT YEAR : 2005-06 4 BE SAID THAT THE DISALLOWANCE OF INTEREST ON FDR IS A DEBATABLE ISSUE AND THEREFORE THE ACTION OF THE AO IN ALLOWING THE IMPUGNED ERRON EOUS CLAIM OF DEDUCTION IN THE ORIGINAL ASSESSMENT ORDER IS AN ERROR APPARENT FRO M THE RECORD. THE CASES RELIED ON BY THE LD.AR HAVE NO RELEVANCE AS REGARDS THE FACTS OF THE PRESENT CASE IN AS MUCH AS THE RATIOS ARE PERTAINING TO GENERAL PROPOSITION OF LAW AND NOT SPECIFIC TO THE FACTS OF THE ASSESSEES CASE. AS REGARDS THE ISSUE ON MER ITS IN RESPECT OF THE DISALLOWANCE ON THE INTEREST EARNED ON FDRS FROM THE PUNJAB NATI ONAL BANK IT IS NEEDLESS TO FURTHER EMPHASIS THAT THE SAID INCOME IS NOT ELIGIB LE FOR DEDUCTION U/S 80IB(10) OF THE ACT. IN VIEW OF THE AFOREMENTIONED DISCUSSION WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) CONFIRMING THE ORDER PASSED BY THE AO U/S 154 AND THE RESPECTIVE DISALLOWANCE MADE THEREON. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF OCTOBER 2013. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 09.10.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR G BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.