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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI C.N.PRASAD & SHRI RAMIT KOCHAR
O R D E R Per Ramit Kochar, Accountant Member
This is an appeal filed by the assessee directed against the Appellate Orders passed by the learned Commissioner of Income Tax (Appeals)-29, Mumbai (‘CIT(A)’ for short) dated 15.03.2011 , the assessee’s appeal contesting its assessment u/s 143(3) of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year (A.Y.) 2006-07 vide assessment order dated 15.12.2008.
At the outset learned counsel for the assessee submitted that there is delay in filing appeal by 3 days and the said delay is supported by application for condonation of delay and affidavit of the assessee’s partner praying for condonation of delay of three days. The learned DR submitted that the appeal is filed late by three days. We , keeping in view the larger interest of justice are of considered view that this delay of three days need to be condoned and the appeal be admitted in larger interest of justice as where technicalities are pitted against the justice, the course which advances justice is to be preferred. The reliance is also placed on decision of of Hon’ble Supreme Court in the case of Collector of Land Acquisition v. Mst. Katiz and Others, 167 ITR 471 and N. Balkrishna v. Krishnamurthy (1998) 7 SCC 123.
The Grounds of appeal raised by the assessee in memo of appeal filed with the Tribunal are as under:
1.“On the facts and in the circumstances of the case and in law, the learned C.I.T.(A) erred in dismissing the appeal.
2. On the facts and in the circumstances of the case in law, the learned C.I.T.(A) erred in dismissing the appeal and that too without giving full and proper opportunity of being heard in the matter.
3. On the facts and in the circumstances of the case in law, the learned C.I.T.(A) erred in dismissing the appeal and that too without appreciating the facts and circumstances of the case fully and properly.
4. On the facts and in the circumstances of the case and in law, the learned C.I.T.(A) erred in upholding the action of the A.O. in denying the benefits of the provision of section 80IB (10) of the I.T. Act.
On the facts and in the circumstances of the case and in law, the interest charged u/s. 234B of the I.T.Act is invalid and bad in law.”
The brief facts of the case are that the assessee is doing the business as builders and developers . The assessee is observing project completion method. The assessee’s project of reconstruction of existing building is in a slum area as declared by BMC and government of Maharashtra. However. It was observed by the AO that the scheme is not notified by the Board.
5. During the assessment year, assessee work in progress is Rs.2,14,17,560/- . The assessee has received Rs. 40,30,808/- as booking advance and earned net profit of Rs.9,21,942/- which is transferred to partner’s capital account. The assessee has disallowed Rs.40,87,556/- u/s. 40(a)(ia) of the Act and has claimed deduction u/s 80IB of the Act for Rs.50,09,498/-. The assessee project of reconstruction of existing building is in a slum area as declared by the BMC and Government of Maharashtra however, the scheme is not notified by the Central Board of Direct Taxes (CBDT) and as per the Assessing Officer (Hereinafter called “the AO”) no deduction can be allowed to the assessee under Section 80-IB(10) of the Act unless such a scheme of reconstruction is notified by the CBDT and it was observed by the AO that deduction u/s 80IB of the Act was also denied to the assessee in the assessment year 2005-06. Therefore it was observed by the AO that the assessee is not eligible for deduction u/s. 80-IB(10) of the Act as claimed by the assessee. Thus , the AO disallowed the claim of deduction by the assessee u/s. 80-IB(10) of the Act vide assessment order dated 15.12.2008 passed u/s 143(3) of the Act.
Aggrieved by the assessment orders passed dated 15.12.2008 passed by the AO u/s 143(3) of the Act, the assessee filed first appeal before the CIT(A), the assessee submitted before the CIT(A) that the assessee is in the business of reconstruction of housing projects approved by Central or State Government and for a reconstruction scheme, approval by the Central or State Government is sufficient and for which CBDT approval / notification is not required . The assessee submitted that the CBDT approval is required for redevelopment of existing buildings in the slum area as per Section 80IB(10) of the Act and not for reconstruction business. The CIT(A) rejected the contentions of the assessee by observing that there is no notification issued by CBDT for the project undertaken by the assessee u/s 80-IB(10) of the Act and the entire provision has to be read together and reconstruction and redevelopment cannot be split as independent phrases and disallowance by the AO was held justified and confirmed., vide CIT(A) appellate order dated 15-03-2011 .
Aggrieved by the appellate orders dated 15-03-2011 of the learned CIT(A) , the assessee filed second appeal with the Tribunal .
The Ld. Counsel of the assessee submitted before us that the assessee is doing the project of reconstruction of existing building in a slum area as declared by BMC and Government of Maharashtra and the first year when the deduction u/s 80IB(10) of the Act was claimed by the assessee was the assessment year 2005-06. The Ld. Counsel of the assessee made statement before us that the CBDT notification with respect to this project ‘Shree Datta Enclave’ at Parel Village as required under the provisions of Section 80IB(10) of the Act has been issued by the CBDT. The assessee submitted that the second appeal before the Mumbai Tribunal for the said assessment year 2005-06 which was the first assessment year of claim of deduction u/s 80IB(10) of the Act, was decided by the Mumbai Tribunal in whereby the Mumbai Tribunal has set aside the matter to the file of AO for de-novo determination and adjudication of the claim of the assessee u/s 80IB(10) of the Act , as the notification by the CBDT has been issued only after the orders were passed by the CIT(A) for the assessment year 2005-06. The relevant extracts from the orders of the Tribunal in ITA No. 1863/Mum/2010 for assessment year 2005-06 are reproduced below:-
“ 4. We have heard the arguments of both the sides and also perused the relevant material on record. The learned counsel for the assessee has submitted that the notification has been issued by the CBDT only after the impugned order was passed by the learned CIT(Appeals) and the assessee, therefore, could not produce the same either before the AO during the course of assessment proceedings or even before the learned CIT(Appeals) during the course of appellate proceedings. He has urged that this matter may, therefore, be restored to the file of the Assessing Officer for giving the assessee an opportunity to produce the required approval of the CBDT to the project undertaken by the assessee. We find merit in this argument of the learned counsel for the assessee and keeping in view the interest of justice, we set aside the impugned order of the learned CIT(Appeals) on the issue under consideration and restore the matter to the file of the AO for deciding the same afresh after affording the assessee one more opportunity to support and substantiate its claim for deduction u/s. 80-IB(10)”.
It was submitted that similarly for assessment year 2007-08 also the Tribunal vide its orders in vide orders dated 16.12.2015 has set aside and restored the matter to the file of the AO for de-novo determination of the issue as the facts were identical in the assessment year 2007-08 vis-à-vis assessment year 2005-06. Since the assessment year under appeal is 2006-07 , while the first assessment year in which the assessee claimed deduction u/s 80IB(10) of the Act was assessment year 2005-06 for which the matter has already been set aside by the Tribunal in ITA No. 1863/Mum/2010 to the file of Assessing Officer for de-novo determination and adjudication of claim of the asssessee for deduction u/s 80IB(10) of the Act as discussed above as also for the assessment year 2007-08 similar view has been taken by the Tribunal vide orders dated 3314/Mum/2012 dated 16.12.2015, we respectfully following the orders of the co-ordinate Benches of the Mumbai Tribunal in also restore this issue in the present appeal for assessment year 2006-07 to the file of Assessing Officer for de-novo adjudication and determination of the claim of the assessee u/s 80IB(10) in accordance with law. Needless to say that proper and adequate opportunity will be given by the AO to the assessee in accordance with the principles of natural justice and in accordance with law and the asssessee will be allowed to produce necessary evidence in support of its contentions and claim u/s 80IB(10) of the Act in his defense.
In the result, the assessee’s appeal is allowed for statistical purposes.
Order pronounced in the open court on 18th October , 2016