ITO WD 23(2)(1), MUMBAI vs. ABHILASHA COMBINES, MUMBAI

Order u/s.254(1)of the Income-tax Act,1961(Act) Per Rajendra,A.M.लेखा सद�य राजे�� के अनुसारः Challenging the orders dated 29.5.2012 and 6.12.2010 of the CIT(A)-11 and 33-Mumbai,respe -ctively Assessee and the Assessing Officer(AO)have filed appeals for the above mentioned assessment years(AY.s.).All the appeals deal with similar issue-as to whether the assessee had correctly claimed the deduction u/s.80IB of the Act.Therefore,we are adjudicating them by a common single order. Assessee-firm,engaged in the business of construction of buildings,filed its return of income on 1.11.2004,declaring nil income.The assessment was completed on 28.12.2006,u/s. 143 (3) of the Act,determining the income of the assessee at Rs.17.52 lacs. 2.Aggrieved by the order of the AO,the assessee preferred an appeal before the FAA,who allowed the appeal filed by the assessee.The order of the FAA was challenged by the AO before the Tribunal.Vide order,dated 19.01.2010(ITA/7321/Mum/2008),the Tribunal restor -ed back the matter to the file of the AO to decide the issue afresh in light of the decision of Brahma Associates(119ITD255). The AO after considering the submission of the assessee,dt.22.12.2012,held that the department had filed an appeal before the Hon’ble Bombay High Court with regard to commencement of development and construction of housing project as well as the commercial area,that the assessee had changed his plan deliberately to avail the benefit of 80IB,that the law had existed upto 2004-05 did not permit any construction of any commercial for claiming deduction u/s.80IB(10) of the Act, that the total built up area of the project in the assessee’s project was more than 2000 sq. ft. Finally,he denied the claim,made by the it u/s.80IB(10),amounting to Rs.17.53 lacs. The assessee preferred an appeal before the FAA.Before him,it was argued that the Tribunal had given a finding of fact that project under consideration had commenced after 01.10. &othrers/Abhilasa-AY.04-05to08-09 2 1998, that the project was completed within the stipulated time that filing of an appeal by the department against the decision of Tribunal was no ground to deny a claim/deduction made by an assessee.After considering the available material, the FAA held that the original built up commercial area was 3920 sq.ft.,that the plan was approved on 7.12.2003, that the completion certificate of the plan was issued on 24.8.05.He referred to the order of the Ahmedabad Tribunal delivered in the case of Naman Construction(ITA 2424/Ahd/2009 dt. 13.5.2011),that the argument advanced by the assessee that restriction of commercial area had to be applied to the project approved on or before 1.4.2005 was in contravention with legislative intent and with the judgment of Hon’ble Bombay High Court that clause (d) section 80IB(10)is applicable irrespective whether the project has been approved on or after 01.4.05 or before 01.4.05,that the restriction to commercial area are as per clause(d)of section 80IB(10)of the Act was applicable from AY.05-06.He allowed the appeal filed by the assessee for the year under consideration,whereas the appeals for the remaining two AY.s.i.e.2005-06 and 2008-09 were dismissed. 2.2.During the course of hearing before us,the Departmental Representative(DR) stated that the matter could be decided on merits.The Authorised Representative(AR) stated that AO had not followed the directions of the Tribunal,that the project was approved before 1.4.05 and hence the restrictions imposed by the legislature for subsequent years were not applicable to the year under consideration.He supported the order of the FAA. 2.3.We have heard the rival submissions and perused the material before us.We find that the issue of availability of deduction u/s.80IB of the Act,to the assessee,was discussed by the Hon’ble High Court of Bombay(Income Tax Appeal No.1482 of 2011-dated 15. 02.2013- AY. 2004-05),while deciding the appeal filed by CIT-23,Mumbai.We are reproducing the relevant questions framed for the consideration of the Hon’ble Court and same read as under: b)Whether in the facts and circumstances of the case and in law,the Tribunal was right in considering the commencement certificate dated 16-9-1998 as approved by Local Authority,as land was agricultural land.Whereas nowhere in the said certificate it is mentioned that the project was disapproved ? d)Whether in the facts and circumstances of the case and in law,the Tribunal was right in setting aside the order with regard to commercial area back to the file of the AO for deciding it afresh in accordance with Special Bench order of Pune Bench of the Tribunal in Brahama Associates V/s. JCIT(2009)119ITD255(Pune)(SB),when the Act clearly states that built up area of the shops and other commercial establishment included in the housing project should not exceed five percent of the aggregate built up area of the housing project or two thousand square feet,whichever is less, whereas,commercial area is 3920 square feet ?” While deciding the question b)against the Revenue,the Hon’ble Court held that the assessee was entitled to claim deduction u/s.80IB(10)of the Act,as it had not violated the provisions of section 80IB (10)(a)of the Act. The Hon’ble Court,further held as under: “In so far as question (d)is concerned,counsel for the parties state that the issue is covered in favour of the assessee by the decision of this Court in the matter of Commissioner of Income Tax V/s. Brahma Associates reported in (2011)333 ITR 289 (Bom.).In view of the above we see no reason to entertain question (d) as framed.” The department has also filed appeal for the AY.2005-06,before the Hon’ble Court raising the similar grounds.The Court dismissed the appeal. In our opinion,the issue has attained finality in view of the judgments of the Hon’ble Bombay High Court delivered in the above referred two AY.s.Respecfully,following the above,we decide effective ground of appeal against the AO for the AY.2004-05.