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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ ITA No. 597/JP/16
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh dqy Hkkjr] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ ITA No. 597/JP/16 fu/kZkj.k o"kZ@Assessment Year : 2011-12 cuke The Dy. Commissioner of M/s Guru Pragya Infra (P) Vs. Income Tax, Circle-2, Jaipur Ltd., B-17, Nirman Nagar, Ajmer Road, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AACCG 8882 H vihykFkhZ@Appellant izR;FkhZ@Respondent
vk;dj vihy la-@ ITA No.598/JP/16 fu/kZkj.k o"kZ@Assessment Year : 2012-13 cuke The Dy. Commissioner of M/s Guru Pragya Infra (P) Vs. Income Tax, Circle-2, Jaipur Ltd., B-17, Nirman Nagar, Ajmer Road, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AACCG 8882 H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Anil Kumar Nuhal (CA) jktLo dh vksj ls@ Revenue by : Smt. Pratima Kaushik (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 09.02.2017 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 10/02/2017. vkns'k@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. These are two appeals filed by the Revenue against two separate orders of ld. CIT (A)-I, Jaipur dated 30.03.2016 for A.Y. 2011-12 and A.Y. 2012-13 respectively.
ITA Nos. 597 & 598/JP/16 The DCIT, Circle-2, Jaipur vs. Guru Pragya Infra (P) Ltd. Jaipur
In these appeals, the Revenue has taken following grounds of appeal:
In ITA No. 597/JP/16 – A.Y. 2011-12: (1) Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition of Rs. 3,96,42,786/- made on a/c of disallowance of deduction claimed 80-IB(10) of the Act. In ITA No. 598/JP/16 – A.Y. 2012-13: (1) Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition of Rs. 2,96,80,114/- made on a/c of disallowance of deduction claimed 80-IB(10) of the Act.. (2) Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition of Rs.51,764/- made u/s 36(1)(va) of the I.T. Act.
At the start of the hearing, an adjournment application was moved by Shri Anil Kumar Nuhal representing Kalani & Co. Chartered Accountants stating that the ld. counsel for the assessee Shri P.C. Parwal who was to argue the matter could not attend the subject hearing due to certain personal exigencies. It was accordingly requested to adjourn the hearing in the matter. At the same time, it was submitted that the issue involved in both these appeals is covered by the decision of this Bench in assessee’s own case for A.Y. 2009-10 and 2010-11 dated 24.01.2017 and therefore, where the Bench so decides to hear these matters today, these two appeals may be decided taking into consideration the said decision passed by this Bench and other material available on record.
ITA Nos. 597 & 598/JP/16 The DCIT, Circle-2, Jaipur vs. Guru Pragya Infra (P) Ltd. Jaipur 2.1 We have taken note of the fact that due to personal exigencies, the matter could not be represented by ld Counsel for the assessee Shri P C Parwal, at the same time, given that the issue involved in these two appeals is stated to be covered in assessee’s case by our own decision dated 24.01.2017, we were not inclined to adjourn these matters and the adjournment application was accordingly rejected. Both the appeals are accordingly taken up and disposed off by this consolidated order taking into consideration our earlier decision dated 24.01.2017 and other material available on record.
2.2 On perusal of the assessment order passed by the Assessing Officer for A.Y. 2011-12 dated 28.02.2015, it is noted that the AO has disallowed the claim of the assessee u/s 80IB(10) in respect of ‘Guru Shikhar’ Housing Project. The reason for the disallowance stated by the Assessing Officer has been the non-fulfilment of the conditions specified in section 80IB(10)(a)(iii), (e) & (f) of the Act as discussed in detail in the earlier assessment order for A.Y. 2010-11. Similar is the situation in case of assessment year 2012-13. The ld. CIT(A) has also stated that as the facts of the case remains the same, in view of the principal of consistency, he do not find any reason to differ with the findings of the ld. CIT(A) in earlier years. He accordingly directed the AO to allow deduction to the appellant u/s 80IB(10) of the Act. Similar findings has been given by the ld. CIT(A) for A.Y. 20012-13.
2.3 This Bench vide its order dated 24.01.2017 has recently examined the matter at length in respect of eligibility of the assessee company to claim deduction u/s 80IB(10) of the Act in respect of the same housing project namely ‘Guru Shikhar’ for AY 2009-10 and AY 2010-11. The operative part of our findings is reproduced as under:
ITA Nos. 597 & 598/JP/16 The DCIT, Circle-2, Jaipur vs. Guru Pragya Infra (P) Ltd. Jaipur
“(8) There is no dispute as to the fact that assessee has complied with the conditions stated in sub clause (b), (c) & (d). The dispute remains only with reference to the conditions stated is sub clause (a), (e) & (f). In present case, to decide the fulfillment of condition referred in clause (a), (e) & (f), following issues needs to be considered:-
(i) Who is the Local Authority to approve the housing project and to issue the completion certificate of the housing project?
(ii) When the application for issue of the completion certificate is made within the prescribed time, any delay in issue of the completion certificate would relate back to the date of making of application or not?
(iii) Whether each block of housing complex in the project is to be considered separately or all block of the housing complex in the project is to be considered together for ascertaining the date of completion of the construction of the housing project?
(iv) Whether where some of the flats in a block are not fulfilling the condition of allotment of the flat, entire deduction is to be disallowed or the claim is to be restricted proportionately?”
“(9.7) In light of above, it is clear that the authority which has been authorized and mandated to approve the development and construction of housing projects in the Jaipur region is the Jaipur Development Authority. Further, in terms of Section 3(1) read with section 3(3) of the JDA Act, the Jaipur 4
ITA Nos. 597 & 598/JP/16 The DCIT, Circle-2, Jaipur vs. Guru Pragya Infra (P) Ltd. Jaipur Development Authority is deemed to be a local authority for the purposes of this Act which includes the development and construction of housing projects in the Jaipur region. The other local authorities such as Municipality or Gram Panchayat shall work in their respective jurisdictions and at the same time when it comes to the development and construction of housing projects, the applicant can seek the permission through the concerned local authority and such authorities shall forward the application with their recommendations, if any to Jaipur Development Authority. The authority to approve the development and construction of housing projects lies with Jaipur Development Authority and it is up to Jaipur Development Authority whether to approve the housing project or not. In absence of approval from the Jaipur Development Authority, the assessee’s building plans and construction thereof would be in violation of the JDA Act and cannot be said to be approved. Further, on perusal of the application filed by the assessee for approval of maps as well as for issuance of completion certificates to the Gram Panchayat as well as to the JDA, it is again clear that it is JDA which is the final approving authority, the reason for the same is that had the Gram Panchayat being the ultimate authority, there was no necessity for the assessee to approach JDA for approval of its proposed building, plan as well as for issuance of the completion certificate. Given that the assessee has itself reached out to the JDA which establishes beyond any doubt that the project area falls within the jurisdiction and the authority of JDA and it is JDA which is to approve the building plan and issuance of the completion certificate. In light of above, we are of the considered view that housing project falls with the Jaipur region and the JDA is the approving authority for development and construction of the housing projects and it shall be the local authority for the purposes of claim of deduction under Section 80IB(10) of the Act.”
ITA Nos. 597 & 598/JP/16 The DCIT, Circle-2, Jaipur vs. Guru Pragya Infra (P) Ltd. Jaipur
“(10.9) The next question that arises for consideration is when it can be said that the construction of these blocks A to G were complete. Whether the construction got completed on the date of application i.e, 23.03.2012 or on/before the meeting of JDA held on 28.08.2012 or when the completion certificate was issued by JDA on 21.03.2013 (in respect of Block A to E). In this regard, the assessee has submitted that at the time of moving the application for issuance of the complete certificate as evidence by the architect report as well as issuance of the no objection certificate by the Chief Fire Brigade Officer, Nagar Nigam, Jaipur all blocks were completed in March, 2012 itself. However, the JDA has issued a letter dated 08.05.2012 wherein it is stated that on physical inspection, work in respect of block A to D is almost complete except some fitting/finishing and in respect of block E, F and G, the civil construction work is in progress. The assessee has challenged this letter of JDA dated 08.05.2012 stating that it doesn’t specify the nature of civil work which is in progress and secondly, this letter was never received by the assessee. In our view, there are not enough material on record for us to take a view in the matter. In the interest of justice and fair play, the matter require to be set- aside to the file of AO for fresh examination so that all relevant facts and documents are brought on record to determine the actual date of completion of blocks A to G.”
“(10.10) In light of above, it is clear that in respect of bock H & I, the construction has been completed as on 31.03.2012 even though the approval has been granted on 11.07.2012 and completion certificate issued by JDA on 1.08.2012. The delay in issuance of completion certificate cannot be attributed to the assessee and the assessee cannot be penalized by way of denial of tax
ITA Nos. 597 & 598/JP/16 The DCIT, Circle-2, Jaipur vs. Guru Pragya Infra (P) Ltd. Jaipur deduction which it is otherwise eligible to and solely on the ground of delay in issuance of completion certificate. As held by Hon’ble Bombay High Court in case of Hindustan Samuh Awas ltd (supra), the explanation has introduced an element of unnecessary strictness in the provision which is in the nature of exemption and not in the nature of charging and the completion of the housing project is a physical act which can be demonstrated on the spot. We are accordingly of the view that in respect of Block H & I, the assessee satisfies the condition of completion of construction before 31.03.2012.”
“(11.2) We have heard the rival contentions and pursued the material available on record. The Madras High Court in case of Viswas Promoters Private Limited (supra) in the context of condition relating to built-up area not exceeding 1500 sq. ft has held that within a composite housing project where there are eligible and ineligible units, the assessee can claim deduction in respect of eligible units in the project and even within the block, the assessee is entitled to claim proportionate relief in the units satisfying the extent of the built up area. No contrary authority has been brought to the notice of the Bench. In our view, similar analogy can be drawn in respect of housing project consisting of number of blocks where the construction has been completed and completion certificate issued in respect of some of the blocks. As we have noted above, the construction has been completed and completion certificate has been issued by JDA in respect of block H & I. Accordingly, the assessee shall be eligible to claim proportionate deduction u/s 80IB(10) in respect of Block H & I.”
“(12.6) In light of above discussions, where the allotment of flats has been made prior to 1.4.2009, the assessee shall be eligible to claim the tax deduction in respect of such flats even if there is violation of clause (e) & (f) of section
ITA Nos. 597 & 598/JP/16 The DCIT, Circle-2, Jaipur vs. Guru Pragya Infra (P) Ltd. Jaipur 80IB(10) of the Act. However, where the allotments of flats have been made after 1.4.2009, the assessee will necessarily be required to demonstrate the satisfaction of clauses (e) and (f) of section 80IB(10) of the Act. On perusal of assessment order, it is noted that complete details of allotees were not furnished before the AO and the AO based on limited information provided by the assessee, has identified certain cases where violation of above said conditions have been noted. The assessee has responded to these limited cases and even ld CIT(A) has upheld the contention of the assessee that the allotment has either not being made or booking of flats has happened prior to insertion of clause (f) of section 80IB(10) of the Act in these limited cases. In our view, the legislature has used the expression “allotment” and not the expression “booking” of the residential unit which precede the allotment of residential unit as generally understood in the housing sector. Unless, in a given case, where the booking and allotment are same as demonstrated through the contractual understanding between the builder and the allottee of the residential unit, it would not be correct to use these terms inter-changeably. In light of above directions, we accordingly set-aside the matter to the file of the AO to examine the allotment of flats made by the assessee in entirety and examine the satisfaction of conditions under clause (e) and clause (f) of section 80IB(10) of the Act. “
“(12.7) In light of above discussions and taking into consideration the entirety of facts and circumstances of the cases including the arguments and legal authorities quoted before us, the Revenue’s appeal for both the years is partly allowed with above directions for statistical purposes.”
2.4 In light of the above, given that there are no changes in the facts and circumstances of the case, the matter relating to claim of deduction u/s
ITA Nos. 597 & 598/JP/16 The DCIT, Circle-2, Jaipur vs. Guru Pragya Infra (P) Ltd. Jaipur 80IB(10) is covered by the decision of this Bench in assessee’s own case for A.Ys. 2009-10 and 2010-11 and our findings and direction contained in the said order shall apply mutatis mutandis in these two appeals as well. In the result, the ground taken by the Revenue in respect of claim of deduction u/s 80IB(10) for both the years under consideration is partly allowed for statistical purposes.
In respect of assessment year 2012-13, the Revenue has taken another ground challenging the order of Ld. CIT(A) in deleting the addition of Rs. 51,764/- made u/s 36(1)(va) of the Act. In this regard, we refer to the relevant findings of the ld. CIT(A) which is reproduced as under: “I have duly considered the submissions of the appellant, the assessment order and the material placed on record. The AO made the disallowance of Rs.51,764/- as the employee contribution towards ESI/PF was not paid within the stipulated time. During the appellate proceedings the AR agitated the addition and submitted that these were paid before the due date of filing of the return of income and hence the disallowance was not justified. The AR relied upon a number of decisions including those of jurisdictional High Court in support of its contention. It may be mentioned that Hon’ble Rajasthan High Court in case of CIT vs. SBBJ (2014) 265 CTR (Raj.) 471 and CIT vs. Udaipur Dugdh Utpadak Sangh Ltd. (2014) 265 CTR (Raj.) 59 has held that where PF/ESI paid after due date under respective acts but before filing of return of income u/s 139(1), these cannot be disallowed under section 43B or u/s 36(1)(va) of the Act, 1961. Respectfully following the decision of Hon’ble Rajasthan High Court , the addition of Rs. 51,764/- stands deleted.”
ITA Nos. 597 & 598/JP/16 The DCIT, Circle-2, Jaipur vs. Guru Pragya Infra (P) Ltd. Jaipur 3.1 We have gone through the order of the Ld. CIT(A) and we do not see any infirmity in the said order. In the result the ground taken by the Revenue is dismissed.
In the result both the appeals filed by the Revenue are partly allowed for statistical purposes.
Order pronounced in the open court on 10/02/2017.
Sd/- Sd/- (KUL BHARAT) (VIKRAM SINGH YADAV) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Jaipur Dated:- 10/02/2017
Pillai आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू
vihykFkhZ@The Appellant- The DCIT, Circle-2, Jaipur 2. izR;FkhZ@ The Respondent- M/s Guru Pragya Infra (P) Ltd., Jaipur 3. vk;dj vk;qDr@ CIT -1, Jaipur 4. vk;dj vk;qDr¼vihy½@The CIT(A) -1, Jaipur विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 597 & 598/JP/2016)
vkns'kkuqlkj@ By order, gk;d iathdkj@ Assistant. Registrar.