Income Tax Appellate Tribunal - Ahmedabad
Jayvantsinh N.Vaghela, Ahmedabad vs Assessee on 29 February, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "D" BENCH
(BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT
MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER)
ITA No: 563 & 564/AHD/2012
(Assessment Year: 2007-08 & 2008-09)
Jayvantsinh N Vaghela, V/S Income Tax Officer, Ward-
Prop of Yuvraj Developers 9 (2), Ahmedabad
& M/s. Kailash Developers
73, Somnath Society, Near
Ghadia Bus Stop, At &
Post Sanand,
Ahmedabad-382110
(Appellant) (Respondent)
PAN: AAKPV 3984C
Appellant by : Shri S.N. Soparkar, AR
Respondent by : Shri Albinus Tirkey, Sr. D.R.
(आदे श)/ORDER
Date of hearing : 08-12-2015
Date of Pronouncement : 29-02-2016
PER ANIL CHATURVEDI, ACCOUNTANT MEMBER
These two appeals filed by the Assessee are against the order of CIT(A)-XV, Ahmedabad dated 24.01.2011 for A.Ys. 2007-08 & 2008-09.
2. The relevant facts as culled out from the material on record are as under.
3. Assessee is an individual and proprietor of Yograj Developers and Kailash Developers, which are stated to be engaged in the business as developers for 2 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 construction of housing projects. Assessee electronically filed his return of income for A.Y. 2007-08 on 28.11.2007 declaring total income at Rs. 8,74,310/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 23.12.2009 and the total income was determined at Rs. 49,78,670/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 24.01.2011 dismissed the appeal of the Assessee. Aggrieved by the order of ld. CIT(A), Assessee filed appeal before Tribunal.
4. As far as assessee's appeal for A.Y. 2008-09, is concerned, assessee electronically filed the return of income for A.Y. 2008-09 on 29/08/2008 declaring total income of Rs.5,76,870/-. The case was selected for scrutiny and thereafter assessment was framed u/s.143(3) of the Act vide order dated 27.12.2010 and the total income was determined at Rs.20,64,430/-. Aggrieved by the order of A.O., assessee carried the matter before the ld. CIT(A) who vide order dated 22.07.2011 granted partial relief to assessee. Aggrieved by the order of ld. CIT(A), assessee filed appeal before Tribunal.
5. In filing the appeal before ITAT, as far as A.Y.2007-08 is concerned, there was delay of 320 days and as far as appeal for A.Y. 2008-09 is concerned, there was delay of 158 days. The condonation application of the delayed filing of appeal by Assessee was dismissed by Tribunal by order dated 22.03.2013 in ITA No. 563 & 564/A/2012 and thus both the appeals were dismissed on the ground of limitation. Against the order of Co-ordinate Bench of Tribunal, Assessee preferred appeal before Hon'ble Gujarat High Court. Hon'ble Gujarat High Court in Tax Appeal No. 853 & 854/A/2013 order dated 22.10.2013 condoned the delayed filing of appeal and also quashed the order of Tribunal dated 22.03.2013 in ITA No. 563 & 564/A/2012 (supra) and remitted the matter back to the Tribunal to decide the appeal afresh on merits. The order of Hon'ble High Court reads as under:
3 ITA Nos. 563 & 564/Ahd/2012. A.Ys. 2007-08 & 2008-09 "2.0. Both these appeals have been preferred by the common appellant -assessee challenging the impugned common order passed by the learned Income Tax Appellate Tribunal, Ahmedabad (hereinafter referred to as "the ITAT") dated 22.3.2013 passed in ITA Nos. 563 and 564/AHD/2012 with respect to the assessment year 2007-08 and 2008- 09, by which, the learned Tribunal has dismissed the said appeals on the ground of limitation.
2.1. Being aggrieved and dissatisfied with two separate orders of CIT(A) dated 24.1.2011 for me assessment year 2007-08 and 22.7.2011 for me assessment year 2008-09, the common appellant herein -assessee preferred appeals before the learned ITAT being ITA Nos. 563 of 2012 and 564 of 2012. There was a delay of 328 days in preferring the appeal against the order passed by the learned CIT(A) with respect to assessment year 2007-08 and there was a delay of 158 days in preferring the appeal against the order passed by the learned CIT (A) with respect to assessment year 2008-09. The assessee requested the learned Tribunal to condone the delay by submitting that earlier tax matter were being looked after by a Chartered Accountant M/s. J M. Patel & Brothers and even after losing the appeal before the learned CIT(A), he did not advise the assessee to file further appeal before the Tribunal. It was further stated in the affidavit that subsequently the assessee came to know about losing in the appeal and thereafter they contacted another Income Tax Practitioner Shri Sharad C. Patel and advised him to prefer appeal and thereafter they preferred appeals. Therefore, it was requested to condone the delay. By impugned common order, the learned Tribunal has refused to condone the delay and has dismissed the appeal on the ground of limitation observing that there is inordinate delay in preferring the appeals and affidavit of the Income Tax Practitioner is not filed.
2.2. Being aggrieved and dissatisfied with the impugned common order passed by the learned Tribunal in dismissing aforesaid appeals on the ground of limitation and not conedoning the delay of 328 days and 158 days respectively, common appellant has preferred the present appeals.
3.0. We have heard Shri Soparkar, learned advocate for the appellant and Shri Varun Patel, learned advocate for the respondent and perused the impugned common order passed by the learned Tribunal. Considering the affidavits filed by the assessee before the Tribunal which are even reproduced by the learned Tribunal, we are of the view that the learned Tribunal has committed error in not condoning the delay and not considering the appeals on merits. It is required to be noted that there is no observation by the learned Tribunal that there was any deliberate delay on the part of the assessee and /or mere was any mala fide intention on the part of the assessee in not preferring the appeals within a period of limitation, The reasoning given by the learned Tribunal that the assessee has not filed the affidavit of Income Tax Practitioner in support of the affidavits filed by the assessee is concerned, it is required to be noted that once the Income Tax Practitioner is changed it may not be possible for the assessee to get affidavit of Income Tax Practitioner. On the aforesaid ground, the condonation of delay was not required to be refused. It is a cardinal principle of law that normally by and large, the appeals are required to be decided on merits rather than dismissing the same on technical ground like delay etc. unless it is found that there was gross negligence on the part of the assessee and / or there was any mala fide intention on the part of the assessee in not preferring the appeal within the period of limitation and / or in filing the appeals 4 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 belatedly. As observed by the Hon'ble Supreme Court in the case of Collector, Land Acquisition, Anantnag and Another vs. Mst. Katiji and Others reported in (1987) 2 SCC 107 ordinarily a litigant does not stand to benefit by lodging an appeal late. It is further observed by the Hon'ble Supreme Court that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
4.O. Considering the aforesaid principles laid down by the Hon'ble Supreme Court and the facts of the case on hand, we are of the view that learned Tribunal ought to have condoned the delay and ought to have decided and disposed of the appeals on merit rather than dismissing the same on the ground of limitation 5.0. In view of the above and for the reasons stated above, both these appeals succeed and the impugned common order passed by the ITAT dated 22.3.2013 in ITA Nos. 563 and 564/AHD/2012 with respect to the assessment year 2007-08 and 2008-09 is hereby quashed and set aside and the delay caused in preferring the respective appeals is hereby condoned and the matter is remitted to the learned ITAT to decide and dispose of the said appeals in accordance with law and on merits. With this, both these appeals are allowed to the aforesaid extent."
6. Pursuant to the directions of Hon'ble High Court, both the appeals are now before us.
ITA No.563/Ahd/20127. We first take up Assessee's appeal in ITA No.563/Ahd/2012 for A.Y. 2007-
08. The grounds raised by assessee read as under:-
1. The Ld. CIT (A) erred on facts and in law in confirming addition of Rs. 16,83,194/- @ 12% of receipts against addition of Rs. 32,36,911/- @ 25% of receipts made by the Assessing Officer.
2. The Ld. CIT (A) erred on facts and in law in confirming disallowance of Rs.
8,67,447/- u/s 80IB(10) without appreciating the deduction u/s 80IB (10) for the very same project was allowed by the Assessing Officer himself in A.Y. 2005-06 in order u/s 143(3) and that non receipt of BU permission was not due to fault of the appellant.
7. 1st ground is with respect to making additions at 12% of the receipt 5 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09
8. During the course of assessment proceedings, A.O noticed that Assessee had carried out two projects namely Kailash Developers and Yuvraj Park. He also noticed that with respect to the housing project known as "Yuvraj Park", Assessee had claimed deduction 80IB(10) of the Act and from the project, the net profit declared by the assessee was 48.32% whereas the profits that was undertaken by the name of Kailash Developers on which no exemption u/s. 80IB(10) of the Act was claimed, the net profit was shown at 5.5%. The Assessee was therefore asked to as to why the net profit in respect of Kailash Developers not be estimated at 48.32% as being the net profit declared by the Assessee in case of the project of "Yuvraj Developer". The explanation of the Assessee for different net profits in both the projects inter alia being that the projects of different types, in different locations and the expenditure towards land leveling expenses was incurred in case of Kailash Developer but no such expenditure was required for Yuvraj Park, was not found acceptable to the A.O. A.O noted that when Assessee was asked to furnish details vouchers etc. for the expenses incurred on both the project, Assessee did not produce a single bill/voucher pertaining to Yuvraj Developers to prove the incurring of expenditure. He also noticed that Assessee had debited Rs.24,24,000/- in the Profit and Loss account of Kailash Developers towards "land leveling expenses" up to 07.10.2006. A.O also noticed that Assessee had procured construction material, wooden items doors etc. prior to 07.10.2006. He was therefore of the view that when the land was not ready for construction till 07.10.2006, the incurring of expenditure towards construction material, purchase of wooden items, doors etc. for the purpose of project cannot be accepted and the expenditure shown by the Assessee was not at all reliable and that the major part of purchases made for Kailash Developer was incurred prior to the land being ready for construction and the expenditure was diverted to Yuvraj Project to reduce the profits of the taxable project. He accordingly rejected the books of accounts of 6 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 Kailash Developer and thereafter made the estimation of net profit at 25% of the total receipts of Rs. 1,66,50,000/- and worked out the net profit at Rs. 41,62,500/- and after giving credit of the net profit of Rs. 9,25,589/- that was declared by the Assessee, made addition of balance amount of Rs. 32,36,911/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who granted partial relief to the Assessee by holding as under:-
"9. From the facts on record it is seen that the appellant even during the appellate proceedings could not. produce single bill of Yuvraj Developers. Neither did he produce his books of accounts and vouchers of the two concerns during appellate proceedings though he was specifically required to through this office notice dated 1 1.1.2011. The appellant has also not been able to given any convincing explanation of producing land levelling bills of October 2006 on one hand and purchase of shutters bills of April / May 2010. He has not been able to answer how land levelling expenses of more than Rs.24 lacs were incurred by Kailash developers when both the projects of the appellant that of the housing complex and industrial godowns taken up by the two different proprietary concerns were almost completed in the year under consideration and therefore in my view the AO is right in concluding that the expenses of Yuvraj Developers where the appellant is claiming 100% tax free profit u/s.80IB(10) were diverted in the concern - Kailash Developers which was doing the project of industrial godowns. The appellant did not produce any books of accounts or any bills during the appellate proceedings of any concern so the conclusions drawn by the AO stand and therefore I have no alternative but to reject the books of accounts of the appellant before which an opportunity has also been given to the appellant.
From the table given in the reply reproduced above of the appellant in para 8 above I am of the view that it would be fair to estimate the Net profit of Kailash Developers at 12% of total receipts of Rs. 1,66,50,000 (as 11.8% is the average N.P. rate stated by the appellant himself in the submission reproduced above) instead of 25% taken by the A.O. The A.O is directed to compute accordingly and delete the balance addition."
9. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us.
10. Before us, ld. A.R. reiterated the submissions made before A.O. and CIT(A) and further submitted that estimating the profits @ 12% of the total receipts as the net profits of Kailash Developers will be inappropriate and that the addition on account of estimation @ 12% of profits as against the average profits of 11.3% is 7 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 on a higher side and is without any basis and therefore the same needs to be deleted. Ld. D.R. on the other hand supported the order of A.O. and CIT(A) and further pointed to the findings of ld. CIT(A) wherein it is noted that despite opportunities granted to assessee, assessee neither produced the books of accounts or vouchers of expenses of the two concerns nor furnished any convincing explanation for land leveling expenses bills of October 2006. He thus supported the order of lower authorities.
11. We have heard the rival submissions and perused the material on record. The issue in the present case is estimation of income of assessee from a project, the profits of which are taxable. We find that ld. CIT(A) while deciding the issue has noted and given a finding that assessee did not produce the books of accounts nor vouchers of the two concerns either during assessment proceedings and did not produce it even during appellate proceedings though the assessee was specifically asked to produce the same. It is also noted by ld. CIT(A) that assessee has not given any convincing explanation of land leveling expenses bills of October 2006 on one hand and purchase of Shutter bills of April/May 2010 nor could justify the incurring of land leveling expenses in case of Kailash Developers whose profits are fully taxable. Before us also, ld. A.R. has not produced any material on record to controvert the findings of ld. CIT(A). In such a situation, we do not find any reason to differ with the conclusion of ld. CIT(A) whereby she had justified the rejection of books of accounts. Once the books of accounts have been rejected, the next step is to estimate the income. From the statement of profits of 5 years that has been submitted by the assessee and reproduced by ld. CIT(A) at page no.5 of the order, it is seen that based on the net profit for the immediate preceding year, the impugned year and subsequent three assessment years, the assessee has worked out the average net profit at 11.3%, which is after including the net profit of 5.5% for the year under consideration being the year under dispute. We are of the view, 8 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 that when once the books of accounts for the year under consideration are rejected for not showing the true income of the assessee, it means that they have to be ruled out for consideration and cannot be pressed into service either by the Revenue or the assessee and therefore the entries in the books cannot be held valid for certain purpose and invalid for certain purposes by either of the parties. In such a situation, in the present case, we are therefore of the view that the net profit of 5.55% for the year under consideration also cannot be considered for working out the average profits because, it is after considering the land leveling expenses of Rs.24.24 lacs which is also disputed by the Revenue. In such a situation, when the books of accounts are rejected, then for estimating the profits, for the reasons stated hereinabove, we are of the view that the average profits should be determined but after excluding the net profit for the impugned year and if that is considered, the average profit (after excluding the year under consideration is worked out), the average net profits works out to 12.79% and against which ld. CIT(A) has estimated the net profits from Kailash Developers at 12%, which in own view in the present facts, is at not much variance with the average profits of 12.79%. In such a situation, we are of the view that no interference to the order of ld. CIT(A) in estimating the net profits @ 12% of the Revenue from Kailash Developers is called for and thus, this ground of assessee is dismissed.
12. Ground No.2 is with respect to denial of deduction u/s.80IB(10) of the Act.
12.1 A.O. noted that assessee has claimed deduction of Rs.8,67,417/- u/s.80IB(10) of the Act. A.O. on perusing the details and documents furnished by assessee noticed that assessee had entered into agreement with land owners for construction of housing project, the land being owned by landowners, application for housing plan was made by land owners and the permission for development was also received by them and not the assessee. He was therefore of the view that 9 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 since the assessee has only executed the work as per the terms and conditions of agreement entered by it with landowners and that since the assessee was merely a contractor for the purpose of construction, the assessee was not eligible for deduction u/s.80IB(10) of the Act. He accordingly denied the claim of deduction u/s.80IB(10) of the Act. Aggrieved by the order of A.O., the matter was carried before the ld. CIT(A) who upheld the order of A.O. by holding as under:
"12. The point of ownership of land not entitling the appellant for the deduction has to be seen in the light of the decision of Hon'ble ITAT Bench A Ahmedabad dated 7.11.2008 in the case of M/s. Shakti Corporation,-Baroda in ITA No.1503/Ahd/2008 in AY 2005-06. According to this decision Development Agreement has to be referred to and if it is found that the assessee has practically purchased the land and acquired dominant control and has developed the project at its own risk it is entitled for deduction.
In this case as per clause 9 of the Development Agreement dated 21.12.2003 signed by the appellant with the land owners the land cost of Rs.59,94,375 has to be paid by the appellant.
Para 5 of submission dated 13.1.2011 reproduced above informs how the land cost has been paid to the society by the appellant from the funds collected from the members or by the members directly to the society through sale deeds of land in which the appellant appeared as attorney holder of the land owner - the society .
However perusal of one of the sale deeds of land submitted during appellate proceedings dated 22.8.2005 shows that it was the son (Vanrajsinh Dilipsinh Vaghela) of the appellant who acted as the power of attorney holder of the land owners and not the appellant. This sale deed has been entered into by one of the members named Vyas Mukesh Kalidas with the land owners (1) Meenaben R Patel (2) K.R.Patel (3) B. R.Patel - power of attorney holder being son of the appellant. Son of the appellant is a separate entity and is filing separate income tax returns. He is also engaged in the business of civil construction. Therefore it is wrong on the part of the appellant to say that the land sale documents were executed between the buyers and the land owners where he is the power of attorney holder of the land owners.
Therefore in my view despite the clause in the development agreement the appellant has not been able to prove that the land was practically purchased by him and therefore the contention of the AO that he executed the contract awarded by the land owners stands proved and as per Explanation inserted in section 80IB(10) vide Finance (No.2) Act 2009 with r.e.f. 1.4.2001 a person executing a works contract is not entitled for the deduction. The disallowance of 80IB(10) is therefore upheld.
13. Further for being entitled to deduction u/s. 80IB(10) the conditions stipulated from clause (a) to clause (d) of the section have to be fulfilled. As per Explanation (ii) given below clause (a) of section 80IB(10) the date of completion of construction of the housing 10 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 project shall be taken to be the date on which the completion certification in respect of such housing project is issued by the local authority. In this case the appellant received original development permission from AUDA dated 28.3.2004 for which the lay-out plan approved by the local authority dated 28.3.2003 was submitted. After this the appellant obtained Revised development permission dated 1.4.2004 which was submitted and also the revised plan approved by the local authority dated 1.4.2004 in which 117 residential units comprising tenements from Block A to L were approved for construction on plot of land with area of 15985 sq.mtrs., whereas in the original 114 residential units comprising tenements and row houses were approved on the same plot of land. The proofs given like one electricity bill of May 2005 of flat owner (one Shri K.R. Patel ) of residential unit - B-22 - of Yuvraj Park scheme and property tax valuation by New Naroda Village Panchayat of the same person (K.R. Pate!) - residential unit owner of building number A-1 - of Yuvraj Park dated 12.8.2004 levied by Gram panchayat are not the BU permission which is issued by the local authority along with the approved completion plan of the building constructed which is required from the local authority by an assessee for availing itself of the deduction u/s.80IB(10). As despite opportunities given the appellant could not furnish the BU permission given by the local authority along with the approved completion plan of the construction completed in my view he has not complied with the condition pertaining to approvals of local authority as per clause
(a) of section 80IB(10) and is therefore not entitled for the deduction."
13. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us.
14. Before us, ld. A.R. reiterated the submissions made before A.O. and CIT(A) and further submitted that on the same project, assessee was granted deduction u/s.80IB(10) of the Act for A.Y. 2005-06 & 2006-07, though for A.Y. 2006-07, the assessment was not u/s.143(3) of the Act but u/s.143(1) of the Act. He further submitted that A.O. had denied the claim of deduction mainly for the reason that assessee was not the owner of the land and that the permissions for development were received by the land owners and not the assessee. He submitted that the aforesaid issue is now settled in favour of assessee by the decision of Hon'ble Gujarat High Court in the case of CIT v. Radhe Developers reported in (2012) 341 ITR 403 (Guj) & thereafter by series of decisions of Tribunal and therefore on this ground the claim of assessee for deduction u/s.80IB(10) of the Act cannot be denied. He further submitted that ld. CIT(A) had upheld the denial of deduction u/s.80IB(10) of the Act for the reason that BU permission of the local authority 11 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 was not furnished by the assessee. On this issue of BU permission, he submitted that original permissions for development was received on 28.03.2003 and the revised permission was received on 01.04.2004 (he pointed to the relevant copies of permission placed at page 38 to 49 of the paper book). He submitted that the earlier Section 80IB(10)(a) of the Act did not stipulate any time frame for completion of project and that the time frame for completion was introduced w.e.f. 01.04.2005 by Finance (No. 2) Act, 2004 and therefore the condition imposed for completion of project would not be applicable to the project under taken by the eassessee as it was approved in 2003 which is also in line with the Explanation (i) to Section 80IB(10) of the Act and for this proposition, he also relied on the decision of Hon'ble Gujarat High Court in the case of ITO vs. Saket Corp. (T. A. No. 107 of 2015). He also placed on record a copy of the same. He therefore submitted that assessee has rightly claimed deduction u/s.80IB(10) of the Act and the same be allowed. Ld. D.R. on the other hand supported the order of A.O. and ld. CIT(A).
15. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to denial of deduction u/s.80IB(10) of the Act. The A.O. had denied the deduction mainly for the reason that assessee is not the owner of land, approvals for development of project was obtained by landowners and not the assessee and that the assessee had merely acted as a contractor. On the issue of denial of deduction u/s.80IB(10) of the Act for the aforesaid reasons, we find that by now the issue is well settled ,more so, by the decision of Hon'ble Gujarat High Court in the case of CIT vs. Radhe Developers (supra) and other cases. The Hon'ble High Court in the case of CIT vs. Radhe Developers (supra) has observed that there is no requirement that the land must be owned by the assessee seeking the deduction and when assessee had total and complete control over the land and when assessee could put the land to the agreed 12 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 use, the risk element was of assessee, then assessee was a "developer" in common as well as legal parlance and he could not be regarded as only a "work contractor." In the present case, there is no finding of lower Revenue authorities that assessee was not having complete control over the project and the risk element of the project was not of assessee. In such a situation, following the decision of Hon'ble Gujarat High Court in case of CIT vs. Radhe Developers (supra), we are of the view that assessee is eligible for deduction u/s.80IB(10) of the Act. As far as the denial on deduction by ld. CIT(A) on the ground that BU permission from local authorities were not obtained, it is an undisputed fact that the original permission for the development of the housing project was received on 28.03.2003 and subsequently the revised permission was received on 01.04.2004. Explanation (i) below Section 80IB(10) of the Act states that in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority. On considering the facts of the present case and in light of the aforesaid Explanation to Section 80IB(10) of the Act, in the present case, we are of the view that the housing project would be deemed to have been approved on 28.03.2003, being the date of original approval date and at that time the statute did not mandate the requirement of obtaining BU permission from local authorities. We also find that in the case of ITO vs. Saket Corporation (supra), Revenue had preferred appeal before Hon'ble High Court for the reason that the Hon'ble ITAT had allowed the appeal of assessee by holding that when the housing project was approved on 10.03.2004 by the competent authority, condition for obtaining completion certificate within a period of 4 years from the date of approval being eligible for deduction u/s.80IB(10) of the Act was not applicable and therefore assessee was eligible for deduction u/s.80IB(10) of the Act and for which Hon'ble ITAT had relied on the 13 ITA Nos. 563 & 564/Ahd/2012 . A.Ys. 2007-08 & 2008-09 decision of Hon'ble Delhi High Court in the case of CIT vs. CHD Developers (2014) 362 ITR 177 (Del). Hon'ble Gujarat High Court has upheld the order of Tribunal by holding that no error was committed by Tribunal in holding that assessee was entitled to claim deduction u/s.80IB(10) of the Act. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the case of Saket Corpn. (supra) nor has pointed out as to how the ratio of the aforesaid decision rendered by Hon'ble Gujarat High Court would not be applicable to the facts of present case nor has placed on record any contrary binding decision. In view of the aforesaid facts, we are of the view that assessee is eligible for deduction u/s.80IB(10) of the Act and thus allow this ground of assessee.
16. In the result, the appeal of assessee is partly allowed.
ITA No.564/Ahd/201217. We now proceed with ITA No.564/Ahd/2012 for A.Y. 2008-09. The ground raised by assessee reads as under:
"1. The Ld. CIT(A) erred on facts and in law in confirming disallowance of Rs.1,60,060/- u/s.80IB(10) without appreciating the deduction u/s 80IB(10) for the very same project was allowed by the Assessing Officer himself in A.Y. 2005- 06 in order u/s. 143(3) and that non receipt of BU permission was not due to fault of the appellant."
18. Before us, both the parties submitted that the ground raised in the present appeal is identical to ground no.2 raised in A.Y. 2007-08 and the submissions made by them while arguing the appeal for A.Y. 2007-08 would also be applicable to the present ground and therefore the ground is to be decided in similar manner as in A.Y. 2007-08.
14 ITA Nos. 563 & 564/Ahd/2012. A.Ys. 2007-08 & 2008-09
19. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to denial of deduction u/s.80IB(10) of the Act on account of non receipt of BU permission. Before us, both the parties have admitted that the facts of the present ground are similar to ground no.2 of A.Y. 2007-08. We, while deciding ground no.2 in assessee's appeal for A.Y 2007- 08, hereinabove, for the reason stated therein have allowed the ground of assessee. Since the facts of the present ground are similar to that of A.Y. 2007-08, we for similar reasons, allow the present ground of assessee. Thus, this ground of assessee is allowed.
20. In the result, the appeal of assessee is allowed.
21. In the result, appeal of assessee for A.Y. 2007-08 in ITA No.563/Ahd/12 is partly allowed and for A.Y. 2008-09 in ITA No.564/Ahd/12 is allowed.
Order pronounced in Open Court on 29 - 02 - 2016.
Sd/- Sd/-
(S.S. GODARA) (ANIL CHATURVEDI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad: 29.02.2016
True Copy
Rajesh
Copy of the Order forwarded to:-
1. The Appellant.
2. The Respondent.
3. The CIT (Appeals) -
4. The CIT concerned.
5. The DR., ITAT, Ahmedabad.
6. Guard File.
By ORDER
Deputy/Asstt.Registrar
ITAT,Ahmedabad