Commissioner of Income Tax vs. M/s.Sasi Educational Institutes

Court No. - 35 Case :- INCOME TAX APPEAL No. - 125 of 2010 Appellant :- The Commissioner Of Income Tax And Another Respondent :- M/S Eldeco Construction Pvt. Ltd. Counsel for Appellant :- CSC Counsel for Respondent :- Ashish Bansal,P.C.Jain Hon'ble Bharati Sapru,J. Hon'ble Neeraj Tiwari,J. Heard Sri Praveen Kumar, learned Counsel for the department and Sri Ashish Bansal, learned Counsel for the assessee. This is an appeal filed by the department under Section 260A of the Income Tax Act, 1961 against an order of the Tribunal dated 10.09.2009 for the assessment year 2003-2004. The questions of law sought to be answered are hereunder :- "1. Whether the Hon'ble ITAT was legally correct in accepting the claim of the assessee on account of deducting u/s 80 IB (10) of IT Act ignoring the legal aspect that the assessee does not satisfy the conditions prescribed in the said section for qualifying this deduction especially after the retrospective amendment made in the said section in Union Budget 2009-10 ? 2. Whether execution of a civil contract in a housing project being developed by any other legal entity can be equated with the development and building of housing and whether such civil contractor can be termed as developer and builder of housing project ? 3. Whether Hon'ble ITAT was legally correct in deleting the addition of Rs.48,93,072/- made by the A.O. on account of License fee ignoring the legal aspect that the assessee as well as its sister concerns are maintaining the account on mercantile basis and also considering the ratio of decisions Laxmipat Singhania Vs. CIT (1969) 72 ITR 291 (SC), CIT Vs. K.R.M.T. Thiangaraia Chetty & Co. (1953) 24 ITR 525 (SC), Morvl Industries Ltd. Vs. CIT (1971) 82 ITR 833 (SC), CIT Vs. Ashok Bhai Chiman Bhai (1965) 56 ITR 42 (SC) this income should have been assessed on accrual basis ?" Insofar as the question no.1 is concerned, it has been answered in favour of the assessee and against the department in Income Tax Appeal No.99 of 2010 in the matter of sister concern by a judgement and order dated 08.01.2018. The Court held that this question has already been decided while relying on a decision of the Apex Court in the case of CIT vs. M/s. Veena Developers reported in (2015) 277 CTR (SC) 297 wherein

the Apex Court while dealing with the question, has allowed the benefit of deduction under Section 80IB (10) of the Act to the assessee as it stood prior to 01.04.2005 holding that the amendment which came in the said provision, was prospective and the provision as stood on the relevant date did not contain any stipulation about the shape and size of any commercial activities, which were being carried out on the residential plot on which the deduction was being sought. Insofar as the question no.2 is concerned, the finding recorded by the Tribunal is that there was no doubt about the fact that the development activities were being carried out on the plot concerned, so the question no.2 is also answered in favour of the assessee and against the revenue as it is concluded on facts. Insofar as the question no.3 is concerned, with regard to license fee the Tribunal has discussed the matter at length including the two different systems of accounting, which have been used by the assessee and has come to the conclusion that no difference is made because ultimately there has been no escapement of tax and no loss to the revenue. In view of the findings recorded by the Tribunal, the question no.3 is too answered in favour of the assessee and against the department. This appeal is dismissed as above. No costs. Order Date :- 5.3.2018 S.P.