THE PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL), AHMEDABAD vs. M/S. VENUS INFRASTRUCTURE AND DEVELOPERS PVT. LTD.

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TAXAP/204/2022HC GujaratGJHC24013600202204 April 2022Author: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MS. JUSTICE NISHA M. THAKORE5 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the assessee was entitled to the deduction under Section 80IB(10). Regarding the first issue, the Tribunal noted that the assessee had completed the entire project before March 31, 2012, and had applied for BU permission for all units. Although permission was not received for all units by the due date, subsequent permissions were granted after the jurisdictional dispute was resolved, and the AMC certified the project's completion before the due date. The Tribunal found that the CIT(A) had given flawless findings on this aspect, and the Revenue had not controverted this fact. For the second issue concerning the delay in filing the return, the Tribunal found that the assessee was required to obtain a Transfer Pricing report in Form 3CEB due to international transactions. Consequently, the assessee was eligible for the extended due date for filing its return of income under Section 92E. The High Court found no error in the Tribunal's affirmation of the CIT(A)'s order and dismissed the Revenue's appeal.

What were the facts?

The Revenue has filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 17.09.2021 passed by the Income Tax Appellate Tribunal (ITAT), 'A' Bench, Ahmedabad, for Assessment Year 2012-13. The assessee, M/s. Venus Infrastructure and Developers Pvt. Ltd., claimed a deduction of Rs. 32,13,73,570/- under Section 80IB(10) of the Act for the Venus Parkland Project. The Assessing Officer (AO) disallowed this deduction, citing non-completion of the project by March 31, 2012, and failure to obtain Building Use (BU) permission for all blocks, as well as the assessee filing its return after the due date. The CIT(A) allowed the deduction, relying on High Court decisions. The ITAT dismissed the Revenue's appeal, affirming the CIT(A)'s order.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether the Tribunal erred in upholding the deletion of the disallowance under Section 80IB(10) of Rs. 32,13,73,570/-, despite the project not being completed before 31/03/2012 as BU permission was not received for all blocks, and other conditions were not fulfilled by the assessee. 2. Whether the Tribunal erred in upholding the deletion of the disallowance under Section 80IB(10) of Rs. 32,13,73,570/-, without considering the Revenue's plea that the return was filed after the due date, making the assessee ineligible for the deduction. Assessee's Contentions: - The entire project was completed before March 31, 2012, and an application for BU permission for the entire project was made on January 25, 2012. Permission was received for 480 units by March 31, 2012. Other documentary evidence like conveyance deeds and electricity bills were furnished for units without BU permission. - There was a dispute regarding the jurisdiction for issuing BU permission between AMC and AUDA, which delayed the permission for remaining units. - The assessee was required to obtain a Transfer Pricing (TP) report in Form 3CEB due to international transactions, entitling it to an extended due date for filing the return of income. Revenue's Contentions: - The project was not completed by March 31, 2012, as BU permission was not received for all blocks. - The assessee filed its return after the due date, rendering it ineligible for deduction under Section 80IB(10).

Which sections of the Income-tax Act were involved?

Section 260A,Section 80IB(10),Section 139,Section 139(1),Section 92E

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/204/2022 ORDER DATED: 04/04/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 204 of 2022 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL), AHMEDABAD Versus M/S. VENUS INFRASTRUCTURE AND DEVELOPERS PVT. LTD. ========================================================== Appearance: MR M.R. BHATT, SENIOR ADVOCATE WITH MR KARAN SANGHANI, ADVOCATE FOR M R BHATT & CO.(5953) for the Appellant(s) No. 1 MR TUSHAR HIMANI, SENIOR ADVOCATE WITH MR PARIMALSINH PARMAR(7296) for the Opponent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 04/04/2022

ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

1.

This appeal under Section-260A of the Income Tax Act, 1961 [for short ‘The Act, 1961’] is at the instance of the revenue and is directed against the order passed by the Income Tax Appellate Tribunal. ‘A’ Bench, Ahmedabad dated 17.09.2021 in the ITA No.1568/Ahd/2019 for A.Y. 2012-13. 2. The Revenue has proposed the following two questions of law for the consideration of this Court. [A] Whether on the facts and circumstances of the case and in law, the Appellate Tribunal has erred in upholding the decision of Ld. CIT(A) deleting the dis-allowance u/s.80IB(10) of Rs.32,13,73,570/- without appreciating the fact that the project was not completed before 31/03/2012 as the BU permission was not received for all the blocks for which the deductions was claimed and also, other conditions were not fulfilled by the assessee? [B] Whether on the facts and circumstances of the case and in law, the Appellate Tribunal has erred in upholding the decision of CIT(A) deleting the dis-allowance u/s.80IB(10) of Rs.32,13,73,570/- without considering the plea of the revenue that the return was filed after the due date and therefore, the assessee is not eligible for deduction u/s.80IB(10) of the Act?

3.

It appears from the materials on record that the assessee had claimed deduction under Section-80IB of the Act, 1961 with respect to The Venus Parkland Project to the tune of Rs.32,13,73,570/-. The deduction was claimed under Section-80IB of the Act as the assessee completed the project before 31.03.2012. The deduction under Section-80IB of the Act of the aforesaid amount came to be disallowed by the Assessing Officer on the ground that the assessee had failed to file his return of income within the stipulated time under Section-139(1) and the project namely The Venus Parkland Project was not completed within the period of 05 years from the end of the year in which the approval was granted by the local authority under Section-80IB(10) of the Act.

4.

The assessee being dissatisfied with the dis-allowance at the instance of the Assessing Officer went in appeal before the CIT(A). The CIT(A) allowed the appeal and granted the deduction under Section-80IB by placing reliance on a decision of this High Court in Central Circle-3, Surat Vs. M/s. Rekha Construction Company, ITA No.3659/Ahd/2015/SRT.

9.

The ratio in the case of Saket Corporation appears to be that in a case where the assessee completes the construction of its entire housing project and thereafter applied for the BU Permission within the prescribed time-limit, then irrespective of the fact whether such BU permission has been granted or not before the prescribed date, the assessee would be entitled to deduct under Section-80IB(10) of the Act.

10.

The tribunal while dismissing the appeal filed by the revenue observed in Paragraphs-27.8 onward as under:- “27.8

Coming to the merit of case we note that the AO has disallowed the deduction claimed by the assessee for the reason that it has not got the BU permission for entire project up-to 31st March 2012. Accordingly, the AO concluded that the project was not completed within the period prescribed under the provision of section 80-IB(10) of the Act. However, we find that assessee before the AO has submitted that the entire project i.e. 860 units was completed before 31st March 2012 and it has applied for BU permission for entire project on 25th January 2012 alongwith the fees but till 31st March 2012 perission was received for only 480 units. The assessee also furnished other documentary evidences such conveyance deed, electricity bills, possession letter for the unit in respect of which BU permission was not received.

27.

9 It was also contended that there was dispute for the jurisdiction over issuance of BU permission between AMC and AUDA from April 2012. Therefore, the permission for remaining units was delayed. However, the AI ignored all these evidences and placed his reliance heavily on letter submitted by the AUDA in compliance with the notice issued under Section 133(6) of the Act and made disallowances of claim of the assessee.

27.

10 In this regard, we find that the learned CIT(A) has given flawless finding that after resolution of dispute of jurisdiction over issuance of BU permission, the AMC has issued such permission for remaining units to the assessee and certified that the project was completed before due date i.e. 31st March 2012. These permissions are placed at page 120 to 123 of paper book. This fact was not controverted by the revenue before us.”

11.

So far as the second question is concerned, the finding recorded by the tribunal in Paragraph-27.6 reads as under:- “27.6 From the above, it is inferred that there was relationship of AE created between assessee and ATTCO and further entered into international transaction by crediting brokerage commission in the name of ATTCO. Thus, as per the provision of section 92E, the assessee was required to get TP report in form 3CEB. Accordingly, it enjoy the extended period of due date for filing return of income.”

12.

Thus, as regards the delay in filing the returns under Section- 139 of the Act is concerned, the finding recorded by the tribunal as above is that in view of the provisions of Section-92E, the assessee was required to get the transfer pricing report in the Form 3CEB. In such circumstances, the assessee had the benefit of the extended period of the due date for filing of the return.

13.

Thus, in our opinion, no error not to speak of any error of law could be said to have been committed by the tribunal in affirming the order passed by the CIT(A) and thereby dismissing the appeal filed by the revenue.

14.

In view of the aforesaid, the appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) A. B. VAGHELA

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