ITO 19(1)(4), MUMBAI vs. SAGAR SHOPPING DEVELOPERS, MUMBAI

आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, “ई” खंडपीठ अिधकरण खंडपीठ खंडपीठ मुंबई खंडपीठ मुंबई मुंबई मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI-“E”,BENCH सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"", लेखा राजे"" लेखा लेखा सद"य एवं लेखा सद"य एवं सद"य एवं संसंसंसंजय गग" सद"य एवं जय गग" जय गग", "याियक जय गग" "याियक "याियक सद"य "याियक सद"य सद"य सद"य Before S/Sh. Rajendra,Accountant Member & Sanjay Garg,Judicial Member आयकर आयकर अपील अपील संसंसंसं/.ITA No. 5731/Mum/2011,िनधा"रण िनधा"रण वष" वष"/Assessment Year-2008-09 आयकर आयकर अपील अपील िनधा"रण िनधा"रण वष" वष" ITO-19(1)(4) M/s. Sagar Shopping Mumbai-400 012. Vakola,Santacruz (East) Mumbai-40 0055. PAN:AADFS 1422 M (अपीलाथ" /Assessee ) (""यथ" / Respondent) िनधा"रती िनधा"रती िनधा"रती ओर िनधा"रती ओर ओर सेसेसेसे/Assessee by ओर :Shri Ajay R. Singh (AR) राज"व क" ओर से/ Revenue by :Sh.B.S.N. Raju (DR) सुनवाई सुनवाई क" क" तारीख तारीख / Date of Hearing :12- 11 -2015 सुनवाई सुनवाई क" क" तारीख तारीख घोषणा क" तारीख / Date of Pronouncement :01.01.2016 आयकर आयकर आयकर अिधिनयम आयकर अिधिनयम अिधिनयम,1961 क" अिधिनयम क" क" धारा क" धारा धारा 254(1)केकेकेके अ"तग"त धारा अ"तग"त अ"तग"त आदेश अ"तग"त आदेश आदेश आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद"य लेखा लेखा सद"य सद"य राजे"" सद"य राजे"" राजे"" केकेकेके अनुसार राजे"" अनुसार अनुसार PER RAJENDRA, AM- अनुसार Challenging the order dated 23.6.2011 of CIT-30, Mumbai, the Assessing Officer (AO) has filed the present appeal.

Brief facts: Assessee-firm, engaged in business of building and construction, filed its return of income on 30.9.2008 declaring total income of Rs. 1,33 lakhs.It claimed deduction u/s. 80IB(10) of the Act,amounting to Rs. 4.86 crores.On 04.02.2010, a survey action u/s. 133A was conducted at the business premises of the assessee. During the survey proceedings it was found that the assessee has completed the project named ‘Sagar Avenue Phase-I’, that the total built up area of the shop constructed and sold exceeded 2000 square feet.The AO issued a notice u/s. 148 of the Act on 11.2.2010,as he was of the opinion that taxable income had escaped assessment. The assessee filed return on 3.4.2010 declaring total income of Rs. 1.33 lakhs and objected to the proceedings initiated u/s. 147 of the Act. After addressing the objections the AO held that assessee was not eligible to claim deduction u/s. 80IB(10) of the Act, that he had violated the provision, that the built up area of the commercial premises exceeded 2000 square feet/5% of the total area of the constructed and sold, that the total built up are of commercial premises constructed and sold was 5118 square feet and 4707 square feet respectively. As a result claim made by the assessee u/s. 80IB(10) of Rs. 4,86,32,418/- was withdrawn. 2.Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority(FAA).After considering submission of the assessee and the assessment order,he held that the AO had not disputed the fact that the project of the assessee was approved as a housing project,that the CBDT in its clarification had stated that once the project was approved by the local authority as housing project the same would be entitled to deduction u/s. 80IB(10) of the Act, that the amendment made by the Finance Act 2004 was effective from 1.4.2005,that the amendment was prospective and not retrospective, that under the pre-amended law if the shop and commercial establishment was less than 10% of the total built up area the deduction u/s. 80IB(10) of the Act was allowable. That the commencement certificate are issued by the local authorities on 31.7.2002, that the assessee has commenced

M/s. Sagar Shopping Developers-5731/11 the project in August 2003, that the provision of clause (d) to section 80IB(10) of the Act had no application. The FAA referred to the orders of Saroj Sales Organisation (3 DTR 494), Pathare and Associates (ITA/993/Mum/2009, Brahma Associates, 30 SOT 155 held that the assessee was entitled to claim the deduction u/s. 80IB(10) of the Act. 3.During the course of hearing before us, the Departmental Representative (DR) relied upon the order of the AO. The Authorised Representative (AR) relied upon the cases of Veena Developers (377 ITR 297), Brahma Associates (333 ITR 289), Happy Home Enterprises (372 ITR 1) and Sarkar Builders (370 ITR 392. 4.We have heard the rival submissions and perused the material on record. We find that the project was approved as housing project by the local authorities, that the clause (d) was inserted with effect from 1.4.2005, that the Courts have held that it was not retrospective in nature, that the limit on extent of commercial area of housing project did not apply to the projects approved before 1.4.2005, that the project was approved in 2002.Respectfully following the Judgments relied upon by the AR we are deciding the effective ground against the AO. As a result, appeal filed by the AO stands dismissed. फलतः िनधा"रती अिधकारी "ारा दािखल क" गई अपील नामंजूर क" जाती है. Order pronounced in the open court on 1st January, 2016. आदेश क" घोषणा खुले "यायालय म" "दनांक 01 जनवरी, 2016 को क" गई । (संसंसंसंजय गग" जय गग" जय गग" /Sanjay Garg) (राजे" / RAJENDRA) जय गग" "ाियक सद" / JUDICIAL MEMBER लेखा सद" / ACCOUNTANT MEMBER मुंबई/Mumbai,िदनांक/Date: 01.01.2016 व.िन.स.Jv.Sr.PS. आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1.Appellant /अपीलाथ"