ITO, Ward 8(2), Pune v. M/s. J.K. Builders,, Pune

ITA 861/PUN/2013 | 2007-2008
Pronouncement Date: 28-04-2014 | Result: Dismissed

Appeal Details

RSA Number 86124514 RSA 2013
Assessee PAN AAEFJ8403A
Bench Pune
Appeal Number ITA 861/PUN/2013
Duration Of Justice 1 year(s) 13 day(s)
Appellant ITO, Ward 8(2), Pune
Respondent M/s. J.K. Builders,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-04-2014
Assessment Year 2007-2008
Appeal Filed On 15-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO.861/PN/2013 (A.Y: 2007-08) ITO WARD-8(2) PUNE APPELLANT VS. M/S. J.K. BUILDERS PLOT NO.24 SAI KRIPA PARK KAMGAR NAGAR PUNE 411018 PAN: AAEFJ8403A RESPONDENT APPELLANT BY : SHRI S.P. W ALIMBE RESPONDENT BY : NONE DATE OF HEARING: 10.04.2014 DATE OF ORDER : 28.04.2014 ORDER PER SHAILENDRA KUMAR YADAV J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-V [IN SHORT CIT(A)] PUNE DATED 14.01.2013 FOR A.Y. 2007-08 ON THE FOLLOWING GROUNDS. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) WAS JUSTIFIED IN ALLOWING THE AS SESSEE'S CLAIM OF DEDUCTION OF 16 04 864/- U/S. 80IB(10) WHE N THE BUILT UP AREA OF ROW HOUSE NO. 1 8 & 17 OF THE PRO JECT EXCEEDED THE RESTRICTION RESULTING INTO CLEAR VIOLA TION OF CLAUSE (C) OF SUB-SECTION (10) OF SEC. 80IB R.W.CLA USE (A) OF SUB-SECTION (14) OF SEC. 80IB OF THE I.T.ACT 1961? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) WAS JUSTIFIED IN HOLDING THAT TH OUGH THE AMENDED PROVISIONS OF CLAUSE(A) OF SUBSECTION (14) OF SEC. 80IB OF THE I.T.ACT CAME INTO OPERATION W.E.F. 01.0 4.2005 THOSE WERE NOT APPLICABLE IN THE CASE OF ASSESSEE R ELATING TO A.Y. 2005-06 AND SO ON WITHOUT APPRECIATING AND APPLYING THE PRINCIPLE LAID DOWN BY HON. SUPREME CO URT 2 IN THE CASE OF RELIANCE JUTE INDUSTRIES VS. COMMISS IONER OF INCOME-TAX REPORTED IN 120 ITR 921 CIT VS. ISTH MIAN STEAMSHIP LINE 20 ITR 52 AND KARIMTHARUVI TEA ESTA TE LTD 60 ITR 262? 3. THE APPELLANT CRAVES LEAVE TO ADD AMEND OR ALTER A NY OF THE ABOVE GROUNDS OF APPEAL 2. THE ASSESSING OFFICER HAD MADE ADDITION OF 16 04 864/- ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S.80IB(10 ). THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHORITY WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESS EE AND HAVING CONSIDERED THE SAME THE CIT(A) FOLLOWING THE DECIS ION OF ITAT PUNE BENCH IN THE ASSESSEES OWN CASE IN EARLIER YE ARS ON THE SIMILAR ISSUE HAS GRANTED RELIEF TO THE ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE INTER ALIA THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED T HE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE ASSESSEES CLAIM OF 16 04 864/- U/S.80IB(10). NONE HAVE APPEARED ON BEHALF OF ASSESSEE. 3. AFTER GOING THROUGH THE ARGUMENTS OF LEARNED DEP ARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD WE FIND THAT THE ISSUE PERTAINS TO THE DISALLOWANCE OF CLAIM U/S.80IB(10) AMOUNTING TO 16 04 864/-. THE ASSESSING OFFICER NOTICED THAT T HE ASSESSEE HAS CLAIMED DEDUCTION U/S.80IB(10) TO THAT AMOUNT I N RESPECT OF PROJECT KNOWN AS DWARKADHEESH GARDEN. HE NOTICED THAT IN A.Y. 2005-06 THE PROJECT WAS HELD TO BE INADMISSIB LE FOR DEDUCTION U/S.80IB(10) ON ACCOUNT OF FACT THAT AFTE R CONSIDERING THE TERRACE AREA AS WELL AS CANOPY AREA BUILT UP A REA ROW HOUSE NO.1 ROW HOUSE NO.8 AND ROW HOUSE NO.17 EXCEEDED T HE STIPULATED LIMIT OF 1500 SQ. FT. SINCE THE DEDUCTI ON U/S.80IB(10) RELATED TO THE SAME PROJECT OF THIS YEAR THE ASSES SING OFFICER HELD THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTI ON U/S.80IB(10) IN THIS YEAR AS WELL. ACCORDINGLY DI SALLOWED THE CLAIM U/S.80IB(10). WHILE DOING SO THE ASSESSING OFFICER ALSO 3 HELD THAT IN SUBSEQUENT YEAR I.E. 2006-07 ON SIMILA R ISSUE DISALLOWANCE WAS MADE. IN APPEAL THE STAND OF THE ASSESSEE HAS BEEN THAT IN A.YS. 2005-06 AND 2006-07 THE DISALLO WANCE U/S.80IB(10) WAS DELETED BY ITAT PUNE IN ITA NOS. 396/PN/2009 AND 112/PN/2011 DATED 23.11.2011 AND THEREFORE IT WAS REQUESTED THAT IN THIS YEAR THER E IS NO CASE OF DISALLOWANCE OF DEDUCTION U/S.80IB(10) OF 16 04 864/- AS THE PROJECT IS SAME. THE CIT(A) HAVING CONSIDERED THE FACTS OBSERVED THAT THE SIMILAR DISALLOWANCE U/S.80IB(10) IN A.YS. 2005-06 AND 2006-07 STOOD DELETED BY ABOVE MENTIONED ITAT ORDE RS. FOR THE SAKE OF CONVENIENCE THE SAME IS REPRODUCED AS UNDE R: '6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE ASSESSEE'S CLAIM FOR DEDUCTION U/S. 80-IB(10) OF TH E ACT HAS BEEN DENIED ON A SINGULAR POINT VIZ. ON ACCOUNT OF SUB- CLAUSE (C) OF SECTION 80-IB(10) OF THE ACT. SUB-CLAUSE (C) OF SEC TION 80-IB(10) OF ACT REQUIRED THAT IN ORDER TO BE ELIGIBLE FOR DE DUCTION BUILT UP AREA OF RESIDENTIAL UNITS IN CITIES OTHER THAN DELH I OR BOMBAY SHALL NOT EXCEED 1500 SQ.FT. AS PER THE REVENUE THR EE RESIDENTIAL UNITS CONTAINED IN THE HOUSING PROJECT UNDERTAKEN B Y THE ASSESSEE-VIZ. DWARKADHEESH GARDEN HAD A BUILT UP A REA EXCEEDING 1500 SQ.FT. AS PER THE ASSESSING OFFICER BUILT UP AREA OF ROW HOUSE NOS-. 1 SAND 17 WAS 1524 SQ.FT. 1669 SQ.FT. AND 1608 SQ.FT. RESPECTIVELY AFTER INCLUDING AREAS OF T ERRACE/CANOPY OF 318 SQ.FT. 279 SQ.FT. AND 207 SQ.FT. RESPECTIVELY. SINCE THE THREE UNITS VIOLATED THE CONDITION PRESCRIBED IN SUB-CLAU SE (C) OF SECTION 80- IB(10) OF THE ACT DEDUCTION FOR THE ENT IRE PROJECT WAS DENIED. IN COMING TO SUCH COMPUTATION OF BUILT UP A REA THE REVENUE HAS RELIED UPON SUB-CLAUSE (A) OF SECTION 8 0-IB(14)(A) WHICH EXPLAINS THE EXPRESSION 'BUILT UP AREA' TO ME AN THE INNER MEASUREMENT OF THE RESIDENTIAL UNITS AT THE FLOOR L EVEL INCLUDING THE PROJECTIONS AND BALCONIES AS INCREASED BY THE T HICKNESS OF WALLS BUT EXCLUDING THE COMMON AREAS SHARED WITH OT HER RESIDENTIAL UNITS. NO DOUBT ON AN APPLICATION OF S UCH A DEFINITION OF BUILT UP AREA THE CASE SET UP BY THE REVENUE IS POTENT. SO HOWEVER IN THE PRESENT CASE THE ISSUE IS AS TO WHETHER SUCH DEFINITION OF THE BUILT-UP AREA INSERT ED BY THE FINANCE (NO. 2) ACT 2004 W.E.F. 1-4-2005 IS APPLIC ABLE OR NOT. OSTENSIBLY PRIOR TO 1-4-2005 THERE WAS NO SUCH DE FINITION OF THE EXPRESSION 'BUILT UP AREA' IN THE STATUTE AND LOGIC ALLY ONE HAD TO CONSIDER THE BUILT UP AREA AS PER LOCAL MUNICIPAL D EVELOPMENT CONTROL RULES FOLLOWED BY THE APPROVING AUTHORITIES WHICH IN THE PRESENT CASE IS PIMPRI CHINCHWAD MUNICIPAL CORPORAT ION (PCMS). IN THE CASE BEFORE US THE PROJECT OF THE A SSESSEE HAS OSTENSIBLY COMMENCED PRIOR TO INTRODUCTION OF SEC. 80-IB(14)(A) OF THE ACT AND THEREFORE THE AMENDMENT WHICH HAS C OME INTO 4 EFFECT BY WAY OF SEC. 80-IB(10)(A) OF THE ACT W.E.F . 1-4-2005 WOULD NOT AFFECT SUCH A PROJECT. THE AFORESAID PROPOSITIO N IS IN LINE WITH PRECEDENT BY WAY OF DECISION OF PUNE BENCH OF THE T RIBUNAL IN THE CASE OF G.K. BUILDERS (SUPRA). IN THE CASE OF G .K. BUILDERS (SUPRA) THE AFORESAID PROPOSITION WAS AFFIRMED FOLL OWING THE EARLIER DECISIONS OF THE TRIBUNAL IN THE CASE OF TU SHAR DEVELOPERS IN INCOME-TAX ACT NO. 165/PN/2007 AND 94/PN/2007 FO R A. Y. 2003-04 AND 2004-05 VIDE ORDER DATED 31-5-2011 AND HA WARE CONSTRUCTIONS (P) LTD. VS. /TO (2011) 64 DTR (MUM) 251. THE FOLLOWING DISCUSSION IN THE ORDER OF THE TRIBUNAL I N THE CASE OF G.K. BUILDERS (SUPRA) IS RELEVANT- 'AFTER GOING THROUGH THE ABOVE SUBMISSIONS AND MATE RIAL ON RECORD WE ARE NOT INCLINED TO CONCUR WITH THE F INDING OF THE CIT(A). THE DEDUCTION UNDER QUESTION HAS BEEN R EJECTED BY THE AO AND CONFIRMED BY THE CIT(A) ON THE GROUND THAT IT EXCEEDED THE PRESCRIBED LIMIT WITH RESPECT TO RO W HOUSE NO. 36. ACCORDINGLY THE WHOLE PROJECT WAS REJECTED . THE AO HAS REACHED TO THE CONCLUSION AFTER INCLUDING THE T ERRACE AREA OF 108 SQ.FT. IN BRAHMA BUILDERS (SUPRA) WHETH ER THE TERRACE IN BUILT UP AREA COMES ONLY W.E.F 1-4-2005 BECAUSE THE DECISION IS INTRODUCTION IN THE SECTION W.E.F. THE SAID DATE. FOR THE PERIOD PRIOR TO 1-4-2005 NO SUCH DEF INITION WAS ON THE STATUTE AND HENCE THE BUILT UP AREA HAS TO BE CONSIDERED AS PER THE DC RULE OF THE SANCTIONING AU THORITY. THE DC RULES DO NOT INCLUDE TERRACE IN THE BUILT UP AREA. SO THE AMENDMENT WHICH HAS COME IN THIS REGARD W.E. F. 1- 4-2005 WILL NOT AFFECT THE PROJECTS WHICH HAVE COMMENCEMENT PRIOR TO 1-4-2005. THIS ISSUE HAS BEEN DECIDED FOLLOWING TUSHAR DEVELOPERS IN ITA NO. 165/PN/2007 AND 94/PN/2007 IN FAVOUR OF ASSESSEE AN D IN HA WARE CONSTRUCTIONS (P) LTD. SIMILAR VIEW HAS BEEN TAKEN WHEREBY IT WAS HELD THAT TUSHAR DEVELOPERS IS NOT INCLUDIBLE IN BUILT UP AREA OF THE FLAT PRIOR TO 1- 4-2005 AND HENCE FOR THE PROJECT COMMENCED BEFORE 1-4-2005 TE RRACE IS NOT INCLUDIBLE IN THE BUILT UP AREA. IN VIEW OF THIS ASSESSES IS ENTITLED FOR DEDUCTION U/S 80-IB(10) AS CLAIMED.' 7. FOLLOWING THE AFORESAID OBSERVATIONS WE THEREFO RE HOLD THAT SINCE THE PROJECT OF THE ASSESSEE COMMENCED PR IOR TO 1-4- 2005 THE DEFINITION OF 'BUILT UP AREA' AS PROVIDED IN SEC. 80- IB(14)(A) CANNOT BE APPLIED IN THIS CASE SO AS TO E VALUATE THE CONDITION PRESCRIBED IN SUB-CLAUSE (C) OF SECTION 8 0IB(10) OF THE ACT. UNDER THESE CIRCUMSTANCES THE LIMIT OF 'BUIL T UP' AREA PRESCRIBED IN SUB-CLAUSE (C) OF SECTION 80-IB(10) O F THE ACT HAS TO BE UNDERSTOOD ON THE BASIS OF LOCAL DEVELOPMENT RUL ES WHICH DOES NOT INCLUDE TERRACE/CANOPY. IF THE AREAS COVER ED BY THE TERRACE/CANOPY ARE EXCLUDED THE BUILT UP AREA OF T HE THREE ROW HOUSES IN QUESTION DOES NOT EXCEED THE LIMIT OF 150 0 SQ.FT. PRESCRIBED IN SEC. 80-IB(10)(C) OF THE ACT. IN THIS VIEW OF THE MATTER WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/S 80-IB( 10) OF THE 5 ACT AS CLAIMED BY THE ASSESSEE AND THE ASSESSEE SUC CEEDS IN ITS APPEAL FOR A. Y. 2005-06. 8. AS FAR AS APPEAL FOR A. Y. 2006-07 IS CONCERNED THE FACTS AND CIRCUMSTANCES OF THIS CASE ARE IN PARI MATERIAL WITH THOSE FOR A. Y. 2005-06 AND THEREFORE OUR FINDINGS GIVEN IN ITA NO. 396/PN/09 FOR A. Y. 2005-06 SHALL APPLY MUTATIS MUT ANDIS TO THE APPEAL VIDE ITA NO. 112/PN/11 FOR A. Y. 2006-07 .' 4. NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLED GE ON BEHALF OF REVENUE. SINCE THE DEDUCTION U/S.80IB(10 ) OF 16 04 864/- HAS BEEN CLAIMED IN RESPECT OF THE SAME PROJECT BASED ON THE ABOVE DECISION OF ITAT PUNE BENCH IN ASSESSEES OWN CASE THE ASSESSING OFFICER WAS DIRECTED BY CIT (A) TO DELETE THE ADDITION IN QUESTION. THIS REASONED FINDING OF CIT(A) BASED ON THE DECISION OF PUNE TRIBUNAL NEEDS NO INTERFER ENCE FROM OUR SIDE. WE UPHOLD THE SAME. 5. IN THE RESULT APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 28 TH OF APRIL 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 28 TH APRIL 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-V PUNE 4) THE CIT-V PUNE 5) THE DR B BENCH I.T.A.T. PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY I.T.A.T. PUNE