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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI MANOJ KUMAR AGGARWAL
PER SAKTIJIT DEY, J.M.
Aforesaid appeals have been filed by the Revenue challenging three separate orders, all dated 2nd December 2016, passed by the learned Commissioner (Appeals)–28, Mumbai, pertaining to assessment years 2010–11, 2011–12 and 2012–13.
The only common issue raised by the Revenue relates to allowance of assessee’s claim of deduction under section 80IB(10) of the Income Tax Act, 1961 (for short “the Act”).
Since, facts are common in all these appeals, except variation in figures, for the sake of convenience we propose to discuss the facts as 3 Vardhan Builders involved in ITA no.2204/Mum./2017, for the assessment year 2010– 11, as the substantive order of the learned Commissioner (Appeals) relates to this assessment year.
Brief facts are, for the assessment year 2010–11 the assessee filed its return of income on 24th September 2010 declaring nil income after claiming deduction under section 80IB(10) of the Act in respect of a residential housing project, namely, Poseidon, at Yari Road, Varsova, Andheri (West), Mumbai. The return of income filed by the assessee was selected for scrutiny and in the course of assessment proceedings, the Assessing Officer noticed that the assessee has claimed deduction under section 80IB(10) of the Act in respect of the profit derived from sale of flats in the aforesaid housing project. He also found that a survey under section 133A of the Act was conducted in the business premises of the assessee on 1st December 2011 and during the survey it was found that there is violation of various conditions of section 80IB(10) of the Act in relation to the concerned housing project. Therefore, he called upon the assessee to explain why the deduction claimed under section 80IB(10) of the Act should not be disallowed. In response, the assessee made elaborate submissions vide letter dated 31st January 2013, justifying the claim of deduction under section 80IB(10) of the Act. In the said letter, the assessee furnished the details of flats in the housing project including their
4 Vardhan Builders built–up area and also explained that all the conditions of section 80IB(10) of the Act was satisfied. It was submitted that the commencement of the project was approved on 15th April 2002, and was completed in March 2008. It was submitted that size of each flat in the housing project is less than 1,000 sq.ft. and the total area of land on which the housing project was constructed is more than one acre. Further, it was submitted that the commercial area developed is about 179.96 sq.mtr. which is less than 5% of the total constructed area or 2,000 sq.ft., whichever is lower, as per the provision of the Act. Thus, it was submitted that the deduction claimed under section 80IB(10) of the Act is to be allowed. In support of his contention the assessee also furnished various documentary evidences. The Assessing Officer after considering the submissions of the assessee while referring to the observations of the survey team observed that some of the flats in the housing project measured more than 1,000 sq.ft. Referring to copies of advertisement given in National Dailies, he observed that the housing project has flats 2/3/4 Bed Room, Hall, Kitchen and Pent Houses. Referring to certain material found during survey, the Assessing Officer ultimately concluded that assessee has not complied to the condition of section 80IB(10) of the Act as some of the flats constructed in “A” Wing of the building exceeds 1,000 sq.ft. Thus, he passed the assessment order disallowing assessee’s claim of 5 Vardhan Builders deduction under section 80IB(10) of the Act. Being aggrieved of the assessment order so passed, the assessee preferred appeal before the first appellate authority.
The learned Commissioner (Appeals) after considering the submissions of the assessee found that similar disallowance made by the Assessing Officer on identical reasoning in assessee’s own case for assessment year 2008–09 and 2009–10 was deleted by the learned Commissioner (Appeals) while deciding assessee’s appeals. He further noted that when the Department went in appeal before the Tribunal challenging the deletion, the Tribunal upheld the decision of the learned Commissioner (Appeals) on the issue. Therefore, following the decision of the Tribunal in assessee’s own case for assessment year 2008–09 and 2009–10, the learned Commissioner (Appeals) allowed assessee’s claim of deduction under section 80IB(10) of the Act.
The learned Departmental Representative, though, agreed that in the earlier assessment years the Tribunal has decided the issue in favour of the assessee, however, he relied upon the observations of the Assessing Officer.
The learned Authorised Representative strongly relied upon the decision of the Tribunal in earlier assessment years.
6 Vardhan Builders
We have considered rival submissions and perused materials on record. As could be seen from the facts on record, relying upon the observations of the survey team as well as certain other materials found during survey, the Assessing Officer has concluded that some of the flats in the “A” Wing exceeded the prescribed limit of 1,000 sq.ft. as provided under section 80IB(10) of the Act. Accordingly, he disallowed assessee’s claim of deduction under section 80IB(10) of the Act. Notably, disallowance of assessee’s claim of deduction under section 80IB(10) of the Act on identical reasoning was made by the Assessing Officer in assessment year 2008–09 and 2009–10. However, while deciding assessee’s appeals for the said assessment years, the learned Commissioner (Appeals) after examining the material on record found that all the conditions of section 80IB(10) of the Act were satisfied by the assessee. Therefore, he allowed assessee’s claim of deduction under section 80IB(10) of the Act. The aforesaid orders of the learned Commissioner (Appeals) for assessment years 2008–09 and 2009–10, were challenged by the Department before the Tribunal. The Tribunal while deciding Revenue’s appeal on the disputed issue in ITA no.4635/Mum./2013, dated 28th October 2013, for the assessment year 2009–10 upheld the decision of the learned Commissioner (Appeals) being satisfied with the fact that conditions of section 80IB(10) of the Act in respect of the housing project were satisfied.
7 Vardhan Builders The same view was again expressed by the Tribunal while deciding the Revenue’s appeal in assessee’s own case for assessment year 2008– 09 in ITA no.4081/Mum./2014, dated 25th October 2016. The learned Departmental Representative has not brought to our notice any difference in fact between assessment year 2008–09 and 2009–10 and the assessment years which are under appeal before us. Therefore, respectfully following the consistent view of the Tribunal in assessee’s own case, as aforesaid, we uphold the decision of the learned Commissioner (Appeals) on the issue of allowability of assessee’s claim of deduction under section 80IB(10) of the Act. Consequently, the grounds raised by the Revenue are dismissed.
The aforesaid decision of ours applies mutatis mutandis to the other two appeals under consideration.
In the result, all the appeals of the Revenue are dismissed. Order pronounced in the open Court on 31.08.2018