Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The Revenue filed this appeal against the order of the
Commissioner of Income Tax (Appeals) -13, Chennai in ITA No 177/CIT(A)-
13/14-15 dated 28.08.2017 for assessment year 2014-15.
:-2-: ITA No. 2517/Chny/2017
The assessee firm, Fomra Developer, is engaged in the business of
buying and selling of land and development of land by constructing the flats.
It has developed a project named Fomra Tribhuvan at Nolambur Village,
Shakthi Nagar, Chennai – 600 097 having 94 flats. The project got its approval on 29th March, 2007 from local authority. The assessee has followed
project completion method of accounting for taxation purpose. In the
assessment year 2014-15, the assessee claimed deduction u/s. 80IB(10) on
the project “Fomra Tribhuvan”. While making the assessment for assessment
year 2014-15, the Assessing Officer disallowed the deduction claimed u/s.
80IB(10) for two flats invoking sub-clause “e" & “f” to section 80IB(10).
Aggrieved, the assessee filed appeal before the CIT(A). The CIT(A) allowed
this appeal.
Aggrieved, the Revenue filed this appeal with the following grounds of
appeal:
“1. The order of the learned CIT(A) is contrary to facts and circumstances of the case. 2.The learned CIT(A) has erred in directing the A.O. to allow the claim of deduction u/s.801B(10) by holding that the assessee has not violated the condition u/s.801B(10)(f) of the Act. 3.The Ld CIT(A) has erred in not considering the decision of the Bangalore bench of the ITAT in Sri.Syed Aleemullah Vs DCIT, Bangalore, in ITA No.389/Bang/2016 (Asst.Year 2011-12) which is identical on facts and endorses the reasoning of the assessing officer. 4. The Ld CIT(A) has failed to appreciate that payment of substantial consideration, registration of documents and possession took place much after the cut of date i.e. 19M8.2009 and hence date of allotment was subsequent to this date.
:-3-: ITA No. 2517/Chny/2017
For these and other grounds that may be adduced at the time of hearing, is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored.”
The Ld. DR canvassed the case on the lines of the order of the
Assessing Officer and on lines of the grounds of appeal. Per contra, the Ld.
AR supported the order of the CIT(A) and filed a copy of the relevant portion
of Explanatory Circular for Finance (no.2) Act, 2009 and the gist of the
transaction of the impugned flats to show that the impugned financial
transaction were completed before March, 2010. Further, the Ld. AR
submitted that the Assessing Officer allowed deduction u/s. 80IB(10) with
respect to 91 flats in the same project during the assessment year 2012-13,
he has allowed such deduction with respect to one flat during the assessment
year 2013-14. However, disallowed the deduction claimed for this assessment
year in the remaining two flats which were allotted to the parties during April,
2007 by receipt of substantial amounts as on 31.03.2009 etc.
We heard the rival contentions and gone through the relevant material.
The relevant portion of the order of the CIT(A) is extracted as under:
“There is no dispute that residential unit in the project FOMRA TRIBUVAN” was allotted to individuals and therefore clause (e) to section 80-IB(10) not attracted. It is undisputed that two residential unit in the project “ FOMRA TRIBUVAN” namely Flat No.A4a was allotted to Mrs. Shobana Jam and Flat No.A4b to Ashiana Foundation of which the husband of Mrs. Shobana Jam namely Mr. Sudhir Mehta is the proprietor. It is undisputed that two residential unit in the project “ FOMRA TRIBUVAN” namely A2b & C2b were allotted to Mr.Bhavesh and his sister-in-law Mrs.Deepika. It is undisputed that three residential unit in the project “ FOMRA TRIBUVAN” were
:-4-: ITA No. 2517/Chny/2017
sold to Mr.Vishwanathan (F4a), Mr.Vivekananadhan (F3a) and Mr.HemaKumar (C1d). Mr.Vishwanathan and Mr.Vivekananadhan are own brothers and Mr.HemaKumar is the brother in law. A perusal of Ledger extract of Mrs.Shobana Jam and Mr.Sudhir Mehta (Husband & wife) in the appellant books and a further perusal of the builders agreement dated 26.01.2008 & 27.07.2008 entered between the appellant and the said parties would reveal that the said flats were allotted to them much prior to 19.08.2009 as early as 26.01.2008 & 27.07.2008 and therefore sub-clause (f) to section 80-IB(10) is undisputedly not applicable and therefore disallowance of 80- IB(10) in the above count is totally unjustified and invalid. A perusal of Ledger extract of Mr.Bhavesh and his sister-in-law Mrs.Deepika in the appellant books and a further perusal of the builders agreement dated 25.06.2008 & 11.02.2008 entered between the appellant and the said parties would reveal that the said flats were allotted to them much prior to 19.08.2009 as early as 25.06.2008 & 11.02.2008 and therefore sub-clause (1) to sectlofi 80-IB(10) is unclisputedly not applicable and therefore disallowance of 80-IB(10) in the above count is totally unjustified and invalid Further the said parties would not fall even under relationship defined in sub-clause (f) of section 80-IB(10) and it is erroneous finding that Mr.Bhavesh represents Mrs.Deepika only because the source of funds are from a common source of income. A perusal of Ledger extract of Mr.Vishwanathan (F4a), Mr.Vivekananadhan (F3a) and Mr.HemaKumar (Cid). in the appellant books and a further perusal of the builders agreement dated 14.01.2008, 25.01.2008 & 30.01.2008 entered between the appellant and the said parties would reveal that the said flats were allotted to them much prior to 19.08.2009 as early as 14.01.2008, 25.01.2008 & 30.01.2008 and therefore sub-clause (f) to section 80-IB(10) is undisputedly not applicable and therefore disallowance of 80-IB(10) in the above count is totally unjustified and invalid Further the said parties would not fall even under relationship defined in sub-clause (I) of section 80-18(10) Considering the above factual aspects and Uncontroverted section sub clause (e) & (f) Of section 801B(10) is unambiguous and reads as follows The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, [2008] by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,— (e) not more than one residential unit in the housing project is allotted to any person not being an individual; and (f) in a case where a residential unit in the housing project is allotted to a person an individual, no other residential unit in such housing project is allotted to any of the following persons, namely:— (i) the individual or the spouse or the minor children of such individual, (ii) the Hindu undivided family in which such individual is the karta, (iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family m which such individual is the karta.]. The amendment to sec 801B(10) introducing clause (e) & (1) to section 80- IB( 10) only w.e.f 1.4.2010 and further it is equally undisputed that as per circular 5 of 2010 dated 3.06.2010 Explanatory notes to the provisions of the Finance
:-5-: ITA No. 2517/Chny/2017 (No.2) Act, 2009 , a copy of which is enclosed the restrictions regarding allotment of residential units shall not apply in respect of allotments made before 19.08.2009 and will apply only in relation to A.Y.2010-i1 onwards. Thus the amendment which is specifically prospective i.e. é1 1OiO and not retrospective hence assessee has not violated sec 801B(10)(e) and sec 801B(10)(f) therefore the assessee is eligible for claim of deduction u/s sec 801B(10) for Rs.1,18,97,973/-.The AO is directed to allow claim of deduction u / s sec 801B( 10) for Rs. 1,18,97,973/-. The appellant therefore succeeds in appeal hence the ground of appeal on this issue is accordingly allowed. In result, the appeal of the assessee is allowed.”
From the above, it is clear that the CIT(A) has verified the impugned
transactions and found that the impugned transactions happened prior to
19.08.2009 and deduction claimed is in accordance with the Board Circular 5
of 2010 dated 03.06.2010. The Revenue is not able to assail the findings
recorded by the CIT(A) and hence its appeal is dismissed.
In the result, the Revenue’s appeal is dismissed.
Order pronounced in the Open Court on 14th June, 2018 at Chennai.
Sd/- Sd/- (जॉज�माथन) (एसजयरामन) (GEORGE MATHAN) (S. JAYARAMAN) !या�यकसद"य/Judicial Member लेखासद"य/Accountant Member
चे�नई/Chennai, *दनांक/Dated: 14th June, 2018 JPV आदेशक%-�त.ल/पअ0े/षत/Copy to: 1. अपीलाथ1/Appellant 2. -3यथ1/Respondent 3. आयकरआयु4त ) अपील(/CIT(A) 6. गाड�फाईल/GF 4. आयकरआयु4त/CIT 5. /वभागीय-�त�न�ध/DR