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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: Shri Amarjit Singh & Shri G Manjunatha
Aggrieved by the assessment order, assessee preferred appeal before the CIT(A). Before the CIT(A), the assessee has challenged reopening of the assessment on the ground that the AO has reopened the assessment on mere change of opinion without there being any new tangible material which is evident from the reasons recorded by the AO wherein the AO refers to the assessment order passed for the 6 ITA 869 & 870/Mum/2016 assessment year 2009-10 denying deduction claimed u/s 80IB(10). The assessee has filed elaborate written submissions before the Ld.CIT(A) which has been reproduced at para 4.1.1 to 4.1.4 on pages 3-14 of CIT(A)’s order. The assessee also filed elaborate written submissions on the issue of deduction claimed u/s 80IB(10) which has been reproduced by the Ld.CIT(A) at paras 4.2 on pages 14 to 19 of appellate order. As regards deduction claimed u/s 80IB(10), assessee has reiterated its submissions made before the AO to argue that its claim is in accordance with provisions of section 80IB(10) for the reason that if any housing project is approved by the Central Government or the state government or any local authority, then clause (a) and (b) to section 80IB(10) has no application, that means, the date of commencement and date of completion of project has no relevance to claim deduction. Since its project has been finally approved by the SRA on 04-06-2004, the approval given is well within time limit prescribed by the CBDT vide notification No.67 dated 03-08-2010 and corrigendum to notification of 2011.
The Ld.CIT(A), after considering relevant submissions of the assessee and also relying upon plethora of judgements including the decision of Hon’ble Supreme Court in the case of CIT vs Kelvinator of India Ltd reported in 320 ITR 561 (SC) observed that the AO has 7 ITA 869 & 870/Mum/2016 reopened the assessment on change of opinion without there being any tangible material on record. Therefore, he quashed the re-assessment order passed by the AO. As regards deduction u/s 80IB(10), the CIT(A) deleted addition made by the AO by following his predecessor’s appellate order for AY 2009-10 by holding that provisions of clauses (a) and (b) of section 80IB(10) regarding date of commencement and completion of project are not applicable to the case of the assessee in view of the proviso to section 80IB(10) wherein it was clarified that nothing contained in clauses (a) or (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or State Government for reconstruction or re-development of existing buildings or in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf. Aggrieved by the CIT(A)’s order, the revenue is in appeal before us.
The first issue that came up for our consideration is deduction claimed u/s 80IB(10) of the Act. The Ld.DR submitted that the Ld.CIT(A) was erred in allowing deduction u/s 80IB(10) in respect of profit derived from housing project approved by SRA without appreciating the fact that the assessee’s project was approved prior to 01-04-2004 and as per notification of CBDT No.67 dated 03-08-2010, the assessee is not 8 ITA 869 & 870/Mum/2016 eligible for deduction u/s 80IB(10) of the Income-tax Act, 1961. The Ld.DR in this regard relied upon the decision of ITAT, Mumbai in the case of Bhavya Construction vs ACIT (2017) 162 ITD 362 and also ITAT, Mumbai “C” Bench in assessee’s own case for AY 2007-08 in ITA No.686/Mum/2016.
On the other hand, the Ld.AR for the assessee strongly supporting the order of the CIT(A) submitted that the Ld.CIT(A) rightly appreciated the facts in the light of provisions of section 80IB(10) clauses (a) and (b) and Proviso to come to the conclusion that the assessee is eligible for deduction u/s 80IB(10). The Ld.AR further submitted that if a housing project is approved and is carried out in accordance with the scheme framed by the Central Government or a state government for reconstruction or redevelopment of existing building in areas declared to be slum, then clause (a) or clause (b) to section 80IB(10) has no application. Even otherwise, the assessee’s project has been approved on 04-06-2004 and which fact has been captured by the ITAT for AY 2009-10 while deciding the issue of deduction claimed u/s 80IB(10) of the Act. The ITAT for AY 2009-10 has decided the issue in favour of the assessee by observing that the assessee’s project has been approved on 04-06-2004 and hence, the deduction claimed by the assessee is in accordance with provisions of section 80IB(10). The Ld.AR further
9 ITA 869 & 870/Mum/2016 submitted that the department has preferred further appeal before the Hon’ble Bombay High Court against the order of the ITAT challenging deletion of addition made towards disallowance of deduction claimed u/s 80IB(10) and the Hon’ble jurisdictional High Court in Income-tax Appeal No.159 of 2015 dated 25-07-2017 has dismissed the appeal filed by the revenue by observing that the project was approved by the SRA on 04- 06-2004. Since the issue has been considered by the Hon’ble jurisdictional High Court in the light of facts recorded by the ITAT, the CIT(A) has rightly deleted addition made by the AO and his order should be upheld.
We have heard both the parties, perused the material available on record and gone through the orders of authorities below. There is no dispute with regard to the fulfilment of conditions specified u/s 80IB(10) except date of approval. The project was part of slum redevelopment and the same was approved by the SRA. As per the provisions of section 80IB(10) Explanation 1, if a housing project is approved for more than once, then such housing project shall be deemed to have been approved on the date on which the building plan for such housing project has been first approved by the local authority. The Proviso to section 80IB(10) clarifies that nothing contained in clause (a) or clause (b) shall apply to a housing project carried on in accordance with scheme framed
10 ITA 869 & 870/Mum/2016 by the Central Government or State Government for reconstruction or redevelopment of existing building in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this belief. Clause (a) of section 80IB(10) speaks about date of commencement and date of completion of housing project. As
per Proviso provided to section 80IB(10), if a housing project is approved by SRA, then clause (a) and clause (b) shall not apply to such housing project. The CBDT had issued a notification No.67 dated 03-08-2010, as
per which the Board notifies the scheme contained in Regulations 33(10)
of Development Control Regulation for Greater Bombay 1991 read with the provisions of notification No.TPB-4391/4080(A)/UD-11 (RDP) dated 03-06-1992 as a claim for the purpose of section 80IB(10) of the Act.
The CBDT further issued a notification No.2 of 2011 dated 05-01-2011 explaining the date of application of the said notification as per which the said notification is applicable for a housing project approved on or after 01-04-2004 and before 31-03-2008. In this legal background, if we see the facts of the assessee’s case, the Tribunal for the assessment year 2009-10 has recorded categorical finding that the asseassee’s project has been approved by the SRA on 04-06-2004, therefore, the project is eligible for deduction u/s 80IB(10) of the Act. The Hon’ble Bombay High Court in Income-tax Appeal No.159 of 2015 dated 25-07-2017 for the 11 ITA 869 & 870/Mum/2016 assessment year 2009-10 has approved the findings of the ITAT by observing that the assessee has submitted the project and the plan dated 28-04-2004 and the same was approved by SRA on 04-06-2004.
Since the issue has already been decided by the jurisdictional High Court in the light of provisions of section 80IB(10) and notification issued by the CBDT, we are of the considered view that the assessee is eligible for deduction u/s 80IB(10) of the Act.
Coming to the decision of ITAT in assessee’s own case for AY 2007-08. The ITAT, C-Bench, Mumbai in assessee’s own case for AY 2007-08 has considered the issue of deduction claimed u/s 80IB(10) and after considering various case laws including the ITAT‘s decision for AY 2009-10 observed that the assessee is not entitled for deduction u/s 80IB(10) of the Act with reference to its residential project at Parel, Mumbai. The ITAT has come to the conclusion on the basis of date of approval of the project for the first time by the SRA on 7-10-2002. The ITAT further observed that since the project was first time approved on 7- 10-2002, as per the notification of CBDT, vide notification No.67 of 31- 08-2010 to get the benefit of deduction u/s 80IB(10), the housing project shall be approved on or after 01-04-2004 and before 31-03-2008. We have gone through the order of co-ordinate bench of ITAT for AY 2007- 08 in the light of provisions of section 80IB(10) clause (a) and (b) and 12 ITA 869 & 870/Mum/2016 also Proviso provided to section 80IB(10) and find that the ITAT has given an incorrect finding of facts as well as law which is contrary to the finding of fact recorded by the ITAT and also the Hon’ble jurisdictional High Court for AY 2009-10. The ITAT has taken a contrary view on the basis of letter of Intent issued by SRA dated 07-10-2002 ignoring the fact that the modified plan has been approved on or after 01-04-2004.
Further, as per the amended provisions of section 80IB(10) clause (a) and (b) has no application, if such housing project is carried out in accordance with the scheme framed by the Central Government or State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum area under any law for the time being in force and such scheme is notified by the Board in this belief. Further, if we go through the notification issued by the CBDT, the said notification nowhere states the first date of approval. The notification only states about the housing project which are approved on or after 01-04-2004 and before 31-03-2008. The issue of first approval and second approval has no relevance in view of categorical exclusion of clause (a) or clause (b) by way of proviso to section 80IB(10) for housing project which is approved by the SRA. Since the co-ordinate bench has taken a contrary view against the principle laid down by the Hon’ble jurisdictional High Court in assessee’s own case for earlier year, we are of the considered
13 ITA 869 & 870/Mum/2016 view that the judgement rendered by the co-ordinate bench for AY 2007- 08 is not correct and against settled position of law.
10. In this view of the matter and respectfully following the decision of jurisdictional High Court in assesse’s own case for AY 2009-10 in dated 25-07-2017, we are of the considered view that the assessee is eligible for deduction u/s 80IB(10) of the Act. The Ld.CIT(A), after considering relevant facts has rightly deleted addition made by the AO. Hence, we are inclined to uphold the findings of the CIT(A) and reject ground raised by the revenue.
The next issue that came up for our consideration is validity of reopening of assessment u/s 147 of the Act. The revenue has challenged the order of Ld.CIT(A) quashing re-assessment order passed by the AO. Since we have decided the issue involved in this appeal on merits, the legal issue challenged by the revenue on the issue of reopening of assessment becomes academic in nature, hence, the same is dismissed as infructuous.
In the result, appeal filed by the revenue in is dismissed.
14 ITA 869 & 870/Mum/2016
The facts and issue involved in this appeal is identical to the issue involved in . We have already decided the issue of deduction claimed u/s 80IB(10) in the light of provisions of section 80IB(10) and held that the assessee is eligible for deduction u/s 80IB(10) in respect of housing project developed at Parel, Mumbai. The finding given by us in shall mutatis mutandis apply to this appeal also. Therefore, for the reasons recorded in the preceding paragraphs, we are of the considered view that the Ld.CIT(A) was right in deleting addition made by the AO towards deduction claimed by the assessee u/s 80IB(10) of the Act. Hence, we uphold the order of the CIT(A).