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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI G. MANJUNATHA
Date of Hearing – 27.06.2019 Date of Order – 05.07.2019
O R D E R PER SAKTIJIT DEY. J.M.
Aforesaid appeal has been filed by the Revenue challenging the order dated 14th March 2018, passed by the learned Commissioner of Income Tax (Appeals)–51, Mumbai, pertaining to the assessment year 2013–14.
The Revenue has filed the present appeal challenging the decision of the learned Commissioner (Appeals) in allowing assessee’s
2 AHCL – PEL claim of deduction under section 80IB(10) of the Income Tax Act, 1961 (for short "the Act").
Brief facts are, the assessee, a partnership firm, is engaged in the business of construction of residential projects. For the assessment year under dispute, the assessee filed its return of income on 30th September 2013, declaring total income at ` 21,51,500, after claiming deduction under section 80IB(10) of the Act for an amount of ` 4,49,31,186. In course of assessment proceedings, the Assessing Officer noticed that deduction under section 80IB of the Act has been claimed by the assessee in respect of a residential project in the name and style of “Quantum Park”. The Assessing Officer, therefore, called upon the assessee to furnish necessary details and also to justify the deduction claimed. In response, it was submitted by the assessee that similar deduction claimed by it has been allowed earlier. After considering the submissions of the assessee and other materials on record, the Assessing Officer observed that in the course of a search and seizure operation conducted in case of another assessee, certain plans were seized which revealed that as per one plan each floor in the Quantum Park project has two flats with built–up area of 2,000 sq.ft. per flat, whereas, in the other plan each floor had four flats having built–up area of less than 1,000 sq.ft. per flat. Further, the Assessing Officer noted that similar deduction claimed by the assessee in respect
3 AHCL – PEL of Quantum Park project in assessment years 2005–06 to 2011–12 were disallowed in assessments completed under section 153C of the Act. Thus, relying upon the said assessment orders and the assessment order passed for the assessment year 2012–13, the Assessing Officer disallowed assessee’s claim of deduction under section 80IB(10) of the Act. Being aggrieved with such disallowance, assessee preferred appeal before the first appellate authority.
After considering the submissions of the assessee, learned Commissioner (Appeals) found that while deciding appeals involving identical disallowance made by the Assessing Officer in the assessment years 2005–06 to 2011–12, learned Commissioner (Appeals) has allowed assessee’s claim. Further, he found that in respect of Jivesh Developers and Properties Pvt. Ltd., who along with the assessee had developed the Quantum Park project, the first appellate authority has allowed deduction claimed under section 80IB(10) of the Act. Therefore, following the aforesaid decisions, learned Commissioner (Appeals) allowed assessee’s claim of deduction under section 80IB(10) of the Act.
The learned Departmental Representative relying upon the observations of the Assessing Officer submitted, since the housing project in respect of which the assessee has claimed the deduction has 4 AHCL – PEL not fulfilled the conditions of section 80IB(10) of the Act, the Assessing Officer was justified in disallowing the deduction.
The learned Authorised Representative submitted, in assessee’s own case for the assessment years 2005–06 to 2011–12, under identical facts and circumstances, the Tribunal has allowed assessee’s claim of deduction under section 80IB(10) of the Act. Further, he submitted, in case of assessee’s joint venture partner with whom the assessee developed Quantum Park project, the Tribunal has allowed deduction claimed under section 80IB(10) of the Act. In this context, he drew our attention to the relevant observations of the Tribunal on the issue. Thus, he submitted, the issue raised by the Department in the present appeal is covered in favour of the assessee by the decisions of the Tribunal.
We have considered rival submissions and perused the material on record. As could be seen from the facts on record, assessee entered into a joint development agreement with Jivesh Developers and Properties Pvt. Ltd. for development of a slum rehabilitation project (SRA) at Bandra in the name and style of “Quantum Park”. In respect of the aforesaid housing project, both, the assessee and Jivesh Developers and Properties Pvt. Ltd. claimed deduction under section 80IB(10) of the Act. It is evident, on the basis of material found during the search and seizure operation conducted in case of another
5 AHCL – PEL assessee, it was observed by the Assessing Officer that Quantum Park project, in respect of which the assessee had claimed deduction under section 80IB(10) of the Act, does not satisfy the conditions of the said provision. Further, he found that on the aforesaid premise, the Assessing Officer while completing the assessments under section 153C of the Act for the assessment years 2005–06 to 2011–12 has disallowed assessee’s claim of deduction under section 80IB(10) of the Act. Though, the Assessing Officer has acknowledged the fact that while deciding the appeals for the said assessment years, the first appellate authority has allowed assessee’s claim of deduction, however, to keep the issue alive, the Assessing Officer proceeded to disallow assessee’s claim of deduction under section 80IB(10) of the Act by following the assessment orders passed for the preceding assessment years. Notably, against the orders passed by the first appellate authority allowing assessee’s claim of deduction under section 80IB(10) of the Act in the assessment years 2005–06 to 2011– 12, the Department preferred appeal before the Tribunal. However, while deciding the aforesaid appeals filed by the Department, the Tribunal in to 2851/Mum./2016, dated 26th October 2018, has allowed assessee’s claim of deduction under section 80IB(10) of the Act. After considering all aspects of the issue the Tribunal has categorically come to a finding that the Quantum Park project fulfills all the conditions of section 80IB(10) of the Act. While doing so, the 6 AHCL – PEL Tribunal has relied upon its own decision rendered in the case of Jivesh Developers and Properties Pvt. Ltd., in ITA no.5346/Mum./2015 and Others, dated 28th March 2018. On a perusal of the aforesaid decision by the Tribunal, it is noticed that after going through all the details, the Tribunal has recorded a factual finding that the Quantum Park project satisfies all the conditions of section 80IB(10) of the Act. Undisputedly, the reasons on the basis of which assessee’s claim of deduction under section 80IB(10) of the Act was disallowed in the preceding assessment years have been adopted by the Assessing Officer while disallowing assessee’s claim of deduction under section 80IB(10) of the Act in the impugned assessment year. That being the case, respectfully following the decisions of the Tribunal as referred to above, we uphold the decision of learned Commissioner (Appeals) on the issue. Grounds raised are dismissed.
In the result, Revenue’s appeal is dismissed. Order pronounced in the open Court on 05.07.2019