INCOME -TAX OFFICER, PUNE vs. M/S. EISHA SUPERSHWA DEVELOPMENTS, PUNE

आदेश / ORDER PER ANIL CHATURVEDI, AM :

This appeal filed by the Revenue is emanating out of the order of 1. Commissioner of Income Tax (A)-5, Pune dated 12.12.2016 for the assessment year 2013-14.

Assessee is a Partnership firm stated to be engaged in the business of Real Estate Development. Assessee filed its return of income for A.Y. 2013-14 on 29.09.2013 declaring total income at Rs.Nil after claiming deduction of Rs.2,01,05,481/- u/s 80IB(10) of the Act. The

case was selected for scrutiny and thereafter assessment was framed

u/s 143(3) of the Act vide order dt.08.02.2016 and the total income was

determined at Rs.2,53,31,910/-. Aggrieved by the order of AO, assessee

carried the matter before Ld.CIT(A), who vide order dt.12.12.2016 (in

appeal No.PN/CIT(A)-5/ITO Ward-7(1), Pune/406/2015-16) granted

substantial relief to the assessee. Aggrieved by the order of Ld.CIT(A),

Revenue is now in appeal before us and has raised the following effective

ground :

“On the facts and in the circumstances of the case and in law, whether the Ld.CIT(A) was justified in allowing the deduction u/s 80IB(10) of the Income Tax Act, 1961 on proportionate basis in respect of the housing project “Eisha Loreal”.

assessee had claimed deduction of Rs.2,01,05,481/- u/s 80IB(10) of the

Act in respect to the housing project named “Eisha Loreals” constructed

on a plot of land situated at Sr.No.13, H.No.2, 3, 4/2, Kondwa Khund,

Pune. AO on perusing the report of Government Registered Valuer Shri

Nitin Lele, noticed that two flats bearing No.B-201 and B-504 were

sold to same person. AO on the basis of aforesaid report of Registered

Valuer, concluded that assessee had failed to comply with the condition

namely, of allotting more than one residential unit in a housing project

to one person and thereby violated the provisions of Sec.80IB(10) of the

Act. He was of the view that for claiming deduction u/s 80IB(10) of the

Act, all the conditions stipulated therein are required to be fulfilled in

totality. He noted that since assessee has failed to comply with one of

the conditions stipulated u/s 80IB(10) of the Act therefore assessee was

not eligible for deduction u/s 80IB(10) of the Act. He accordingly denied

the entire claim of deduction of the assessee. Aggrieved by the order of

AO, assessee carried the matter before Ld.CIT(A), who following the

decisions of Hon’ble High Court and Tribunal cited in her order held

that assessee is entitled to proportionate deduction on the profits of the

eligible units which complied with the provisions of Sec.80IB(10) of the

Act and where there has been non compliance of provisions of

Sec.80IB(10) (e) and (f), the deduction claimed on those residential units

has to be disallowed. She accordingly directed the AO to work out the

proportionate deduction. Aggrieved by the order of Ld.CIT(A), Revenue

is now before us.

other hand, reiterated the submissions made before AO and Ld.CIT(A)

and further relied on the decision of Pune Tribunal in the case of

Sukhwani Chawla Combine Vs. ACIT in ITA No.697 & 900/PUN/2015

order dt.25.09.2017 for the proposition that the principle of

proportionate deduction is to be allowed to the extent assessee has

complied with the provisions of Sec.80IB(10) of the Act. He pointed to

the relevant para 8 of the order. He thus supported the order of

Ld.CIT(A).

record. The issue in the present ground is with respect to denial of

claim of deduction u/s 80IB(10) of the Act. AO had denied the entire

claim of deduction for the reason that assessee had sold two flats to the

single buyer, thereby violating the provisions of Sec.80IB(10)(e) of the

Act. Ld.CIT(A) by following the orders of Tribunal and Hon’ble High

Court cited in her order has held that the assessee cannot be denied the

benefit of deduction on the entirety and the deduction can be denied

only on units where there has been violation of provisions of

Sec.80IB(10). We also find that the Hon’ble Madras High Court in the case of CIT Vs. Arun Excello Foundations (P) Ltd., reported in 29 Taxman.com 149 (Mad) has approved the principal of proportionate deduction to the extent assessee has complied with the provisions of Sec.80IB(10) of the Act. Before us, Revenue has not placed any material on record to controvert the findings of ld. CIT(A) nor has placed any contrary binding decision in its support. In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A). Thus, the ground of the Revenue is dismissed.

Order pronounced on 1st day of August, 2019.

Sd/- Sd/- (SUSHMA CHOWLA) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 1st August, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A) – 5, Pune. 4. Pr. CIT, Pune-4, Pune. 5 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” / DR, ITAT, “B” Pune; गाड� फाईल / Guard file. 6.

आदेशानुसार/ BY ORDER

// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.