Income Tax Appellate Tribunal - Mumbai
Umiya Enterprises, Mumbai vs Department Of Income Tax on 10 September, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH 'F' BENCH
BEFORE SHRI I.P.BANSAL(JUDICIAL MEMBER) AND
SHRI B.RAMAKOTAIAH (ACCOUNTANT MEMBER)
ITA No.9040/Mum/2010
Assessment Year: 2007-08
ITO Ward 3(3), Umiya Enterprises,
2nd floor, Rani Mansion, 112, Vasudev Laxmi Building,
Murbad Road, Kalyan, Behind Tilak Talkier, above Satkar
Mumbai. Vs. Hotel, Dombivali,
Mumbai
PA No.AABFU 0185 B
(Appellant) (Respondent)
Appellant by : Mr Rajarshi Dwivedi
Respondent by : None
Date of hearing : 10 .9.2012
Date of pronouncement: 14.9.2012
ORDER
Per I.P.Bansal, JM:
This is an appeal filed by department. It is directed against order dated 15.9.2010 of ld CIT(A)-1, Thane for assessment year 2007-08. Ground raised by revenue reads as under:
"On the facts of the case and in law, whether ld CIT(A) was right in allowing the assessee's claim of deduction u/s. 80IB(10) of the I.T.Act, 1961 without appreciating the fact that the project containing 1825 sq.ft of commercial area was approved by the competent authority prior to 1.4.2005, thereby violating one of the conditions prescribed by the clause (d) of section 80IB(10) of the I.T.Act."
2. Notice of hearing sent to respondent -assessee was duly served, as per acknowledgement on record. However, none was present when the matter was called on for hearing. Therefore, we proceed to decide the 2 ITA No.9040/Mum/2010 Assessment Year: 2007-08 appeal of revenue exparte qua-respondent assessee after considering the submissions of ld D.R and on the basis of material on record.
3. The assessee is a builder and developer. On the project " Umiya Complex Phase I & II" deduction under section 80IB(10) of the Income Act, 1961 (the Act) was claimed by the assessee to the extent of Rs.30,55,250/- which has been disallowed by the AO on the following reasons:
Phase:I:
(1) This project claimed to be a residential complex. The AO found that a commercial area of 1825 Sq.ft. was approved. Therefore, the AO held that deduction under section 80IB(10) cannot be allowed as the said deduction is meant for residential complexes. (2) The second reason to disallow the deduction was that the exclusion of the portion of land bearing 656.75 sq. ft. from the project rendered the area developed by the assessee less than one acre, therefore, deduction under section 80IB(10) cannot be allowed for which AO has relied upon the decision of Ld. CIT(A) in the case of assessee for A.Y 2004-05.
(3) The third reason given by the AO for disallowing the deduction is that Phase II of the assessee's project was required to be completed upto 31st March, 2008 and according to the evidence available on record the project having not been completed upto 31/03/2008 deduction was not admissible.
3.1 Apart from the above the AO has considered the alternative possibility according to which also he has held that deduction to the assessee cannot be allowed. The AO considered the possibility of considering Phase I & II as single project, then also he has held that the assessee is not eligible for deduction under section 80 IB (10) of the Act on all the aforementioned three counts. It is in this manner Ld. A.O had 3 ITA No.9040/Mum/2010 Assessment Year: 2007-08 rejected the claim of assessee regarding deduction under section 80 IB(10) of the Act.
3.2 The action of the AO was challenged in appeal before Ld. CIT(A). So far as it relates to reason mentioned at S.No.1 i.e. regarding commercial area of 1825 sq.ft., Ld. CIT(A) found that the decision of Ld. CIT(A) for A.Y 2004-05 was considered by ITAT in ITA No.2750/Mum/2009, wherein ITAT relying upon the decision of Special Bench in the case of Brahma Associates vs. JCIT (2009) 119 ITD 255 (SB) had held that margin of 10% can be given for commercial area and so long as the commercial space in the built up area is less than 10% of the total built up area, the claim for deduction under section 80 IB(10) cannot be denied. Finding that commercial area of 1825 sq.ft. being 1.36% of total built up area, deduction could not be refused. Hence, the assessee was considered to be entitled for deduction under section 80 IB (10). This order of the Tribunal is dated 8/2/2010 and the observations of the Tribunal are contained in para - 3, which is being reproduced below:
"The assessee is in further appeal before the Tribunal. As regards the point raised by the AO namely that the housing project was not entirely residential but was partially commercial, the same is governed by the order of the Special Bench (Pune) of the Tribunal in the case of Brahma Associates vs. JCIT (2009) 119 ITD 255 (SB). In this case, it has been held that the margin of 10% can be given for commercial area and so long as the commercial space in the built up area is less than 10% of the total built up area, the claim for deduction u/s. 80 IB(10) cannot be denied. This order supports the assessee's claim that the commercial area of 'Umiya' being only 1.36% of the total built up area, the deduction cannot be refused. Accordingly, we hold that, the assessee's claim cannot be refused on this ground namely that the ground that the assessee did not satisfy the condition prescribed by clause (c) of section 80IB(10)."
3.3 It is against this relief given by Ld. CIT(A) the department has filed aforementioned grounds. Thus the issue raised by the revenue in the present appeal is squarely covered against the department by the order 4 ITA No.9040/Mum/2010 Assessment Year: 2007-08 of the Tribunal in assessee's own case for A.Y 2004-05, therefore, we decline to interfere in the order passed by Ld. CIT(A) on the issue which has been raised in the present appeal. Therefore, departmental appeal is liable to be dismissed and is accordingly dismissed.
4. Before parting with this order we may mention here that Ld. CIT(A) has dismissed the appeal filed by the assessee on the ground that the IInd Phase was not completed upto 31/03/2008, therefore, deduction under section 80 IB(10) was not allowable. The present appeal was filed in 2010 and it is not brought to our notice that whether assessee has also filed any appeal against the impugned order passed by Ld. CIT(A) and what is the fate of that appeal. In absence of this aspect our finding in the present order will be limited only to the issue raised by the revenue in the present appeal and cannot be extended to any other ground on which the allowability of deduction to the assessee has been refused. With these observations we dismiss the departmental appeal.
5. In the result, the appeal filed by the revenue is dismissed.
Pronounced in the open court on September, 2012
Sd/- Sd/-
(B.RAMAKOTAIAH) (I.P.BANSAL)
Accountant Member Judicial Member
Mumbai, Dated 14th September, 2012
v.m.
Copy to:
1. The appellant
2. The respondent
3. Commissioner of Income Tax (Appeals),1, Thane
4. Commissioner of Income Tax-1, Thane
5. Departmental Representative, Bench 'F' Mumbai //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI