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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
आदेश / ORDER PER ANIL CHATURVEDI, AM :
These two appeals filed by the Revenue are emanating out of 1. separate orders of Commissioner of Income Tax (Appeals) – 7, Pune dated 15.12.2016 for A.Ys. 2011-12 and 2012-13, respectively.
Before us, at the outset, both the parties submitted that though the appeals filed by the Revenue are for two different assessment years but the facts and issues involved in both the appeals are identical except for the assessment year and the amounts involved and therefore the submissions made by them while arguing one appeal would be equally applicable to the other appeal also and thus both the appeals can be
ITA Nos.1439 & 1440/PUN/2017
heard together. In view of the aforesaid submissions of both the parties,
we, for the sake of convenience, proceed to dispose of both the appeals by
a consolidated order but however, proceed with narrating the facts in ITA
No.1439/PUN/2017 for assessment year 2011-12.
The relevant facts as culled out from the material on record are as
under :-
Assessee is a company stated to be engaged as Builders and
Developers. Assessee electronically filed its return of income for A.Y.
2011-12 on 13.09.2012 declaring total income of Rs.39,89,550/- after
claiming deduction of Rs.3,62,38,796/- u/s 80IB(10) of the Act. It was
noted that assessee had claimed deduction u/s 80IB(10) of the Act in A.Y.
2010-11 which was disallowed by the AO. Since the assessee had
claimed deduction u/s 80IB(10) of the Act for the same project in A.Y.
2011-12, AO after recording the reasons, issued notice u/s 148 of the
Act on 01.07.2013 which was served on the assessee. Thereafter, the
case was taken up for scrutiny. Subsequently, assessment was framed
u/s 143(3) r.w.s. 147 of the Act vide order dated 03.03.2015 and the total
income was determined at Rs.4,02,28,750/- by denying the claim of
deduction u/s 80IB(10) of the Act. Aggrieved by the order of AO, assessee
carried the matter before Ld.CIT(A), who vide order dt.15.12.2016 (in
appeal No.PN/CIT(A)-7/Cir-14/86/2015-16) allowed the appeal of
assessee. Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us, and has raised the following grounds :
“1. Whether on the facts and circumstances of the Ld. CIT(A)-7 was not justified in allowing proportionate deduction u/s 80IB(10) when no such
ITA Nos.1439 & 1440/PUN/2017
provision for proportionate and percentage deduction exists in the Act with respect to this section under consideration as mentioned above. 2. For the facts and such other reasons as may be urged at the time of hearing, the order of Commissioner of Income Tax (Appeals) – 7 Pune may be vacated and that of the Assessing Officer be restored.”
Similar grounds have been raised in I.T.A. No.1440/PUN/2017 for
A.Y. 2012-13.
AO noticed that assessee had constructed a project called as “Sun
Orbit” at Sun City Road, Anand Nagar, Pune. AO noted that while
completing the assessment for A.Y. 2010-11, it was noticed that in
respect of “B” Building, the area of 10 flats exceeded 1500 sq. ft. AO was
of the view that as per the provisions of Clause (d) of Sec.80IB(10) of the
Act, the built up area of a flat in the housing project should not exceed
1500 sq.ft. In case of assessee since the conditions specified in clause (d)
of Sec.80IB(10) of the Act were not fulfilled, AO was of the view that the
profits of the entire project are not eligible for deduction and he
accordingly denied the claim of deduction u/s 80IB(10) of the Act
amounting to Rs.3,62,38,796/- for the entire project. Aggrieved by the
order of AO, assessee carried the matter before Ld.CIT(A), who following
the decision of his Predecessor for A.Y. 2010-11 noted that assessee had
fulfilled the other conditions stipulated u/s 80IB(10) of the Act regarding
the area of the plot, having commercial area within the limits etc. and
therefore assessee was entitled for deduction u/s 80IB(10) of the Act on
pro-rata basis with respect to the blocks and units satisfying the
conditions stipulated u/s 80IB(10) of the Act. He accordingly granted
proportionate deduction to the units/flats which were having area less
than 1500 sq. ft. and denied the claim with respect to units/flats whose
area exceeded the specified limits.
ITA Nos.1439 & 1440/PUN/2017
Aggrieved by the order of Ld.CIT(A), Revenue is now before us.
Before us, Ld. D.R. supported the order of AO. Ld.A.R. on the other
hand, reiterated the submissions made before AO and Ld.CIT(A) and
further submitted that while deciding the issue in case of assessee for
A.Y. 2010-11, the Co-ordinate Bench of the Tribunal has allowed the
claim of the assessee and upheld the order of Ld.CIT(A) with respect to
the granting of proportionate deduction. He placed on record the copy of
the aforesaid order. He submitted that since the project in the year under
consideration is the same Project as in A.Y. 2010-11 and without there
being any change in facts, the order of Ld.CIT(A) needs to be upheld.
We have heard the rival submissions and perused the material on
record. The issue in the present case is with respect to the claim of
deduction u/s 80IB(10) of the Act. We find that in A.Y. 2010-11, the
claim of deduction u/s 80IB(10) of the Act was denied for the entire
project by the AO. Thereafter, the matter was carried before the first
appellate authority and Ld.CIT(A) allowed the claim of deduction with
respect to the units which were having area less than 1500 sq.ft. Against
the order of Ld.CIT(A), Revenue and assessee had carried the matter
before the Tribunal. The Co-ordinate Bench of the Tribunal (in ITA
Nos.981 & 1015/PUN/2015 order dated 27.10.2017) upheld the order of
Ld.CIT(A) by observing as under :
“8. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to denial of deduction u/s 80IB(10) of the Act. We find that the claim of assessee of deduction u/s 80IB(10) for the entire project was disallowed by AO for the reason that out of the total 149 flats built by assessee, 10 flats were having area of more than 1500 sq ft. We find that while deciding the issue, Ld CIT(A) has given a finding that the project was on a plot area of 13400 sq mtrs (i.e.3.31
ITA Nos.1439 & 1440/PUN/2017
acres) which was more than 1 acre, approval from the competent authority for commencement of present project was granted on 30.03.2007 and the completion of the project was received on 28.02.2012 i.e. within the due date of 31.03.2012. He has further given a finding that the other required conditions were also fulfilled by the assessee. As far as the issue of area of 10 flats is concerned, AO had noted that the Valuer appointed by the Revenue authorities had certified that 10 flats were having an area exceeding 1500 sq. ft. On the other hand, the 2 Valuers / Architects appointed by the assessee had certified that the area in respect of the 10 flats were less than 1500 sq.ft. The reason for the difference in the area as calculated by the Valuers was on account of the measurement of the thickness of the wall. The Valuer appointed by the Revenue had considered the thickness of the external walls at 18” at six places which was in actual a double wall taken as an architectural projection for aesthetic purpose whereas the Architects had considered the thickness of the wall at 6” which was as per the sanctioned plan. We find that CIT(A) in his order has also noted that the Valuer approved by Revenue had not given the breakup of the calculation for arriving at the area exceeding 1500 sq.ft. for 10 flats. He has also noted that that Shri Ruparel has observed that as a general trend prevalent in the industry, the architectural projections in the form of features, chajjas, hollow boxes, solid boxes for enhancing the aesthetics of the building which is also allowed by the local authorities are not counted by any Corporation in the built-up area calculations and the projections was not utilizable from inside and neither it was added to the carpet area nor it was in habitable nature. The findings namely that the projections are external projections, it is for the purpose of aesthetic beauty of the building, are not habitable and not utilizable from inside and all allowed by the Corporation and not considered by them for the purpose of calculating the area of the flat, has not been controverted by the Revenue. In such a situation, we are of the view that the deduction u/s 80IB(10) of the Act cannot be denied to the assessee. We therefore direct the AO to allow the deduction on the entire project. Thus the grounds of the assessee are allowed.
As far as Revenue’s grievance with respect to granting of pro-rata data is concerned, we find that Ld.CIT(A) after considering the decisions cited in his order has noted that the various authorities have held that assessee is entitled to deduction with respect to the units which have complied with the condition laid down u/s 80IB(10) of the Act. Before us, Revenue has not brought on record any contrary binding decision in its support nor has controverted the findings of Ld.CIT(A). We therefore find no reason to interfere with that portion of order of Ld.CIT(A) and thus the grounds of Revenue are dismissed.
In the result, the appeal of the assessee is allowed and that of the Revenue is dismissed.”
Before us, Revenue has not pointed out any distinguishing feature
in the facts of the present case and to that of assessee’s own case in A.Y.
2010-11 nor has placed any material on record to demonstrate that the
decision of Pune Tribunal in assessee’s own case in A.Y. 2010-11 which
has been relied upon by Ld.CIT(A) has been set aside / overturned or
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stayed by Higher Judicial Forum. In view of the aforesaid facts, we find no
reason to interfere with the order of Ld.CIT(A) and thus the grounds of
Revenue are dismissed.
In the result, the appeal of Revenue in ITA No.1439/PUN/2017
for A.Y. 2011-12 is dismissed.
Now we take up Revenue’s appeal in ITA No.1440/PUN/2017 for
A.Y 2012-13.
As far as the grounds raised in appeal in ITA No.1440/PUN/2017
for A.Y. 2012-13 are concerned, in view of the submission of both the
parties that the facts of the case in the year being identical to the facts
and issue of the case in ITA No.1439/PUN/2017 for A.Y. 2011-12, we
therefore for the reasons stated herein while disposing of the appeal in
ITA No.1439/PUN/2017 for A.Y. 2011-12, and for similar reasons,
dismiss the grounds of Revenue. Thus, the appeal of Revenue in ITA
No.1440/PUN/2017 for A.Y. 2012-13 are dismissed.
To sum up, both the appeals of Revenue are dismissed.
Order pronounced on 11th day of June, 2019.
Sd/- Sd/- (SUSHMA CHOWLA) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER
पुणे Pune; �दनांक Dated : 11th June, 2019. Yamini
ITA Nos.1439 & 1440/PUN/2017
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-7, Pune. 4. Pr. CIT-6, Pune. 5 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” / DR, ITAT, “B” Pune; 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER // True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.