Income Tax Appellate Tribunal - Pune
Deputy Commisisoner Of Income-Tax,, vs M/S. G.K. Developers,, Pune on 9 August, 2017
आयकर अपीलीय अिधकरण पुणे यायपीठ "ए
ए" पुणे म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
सु ी सुषमा चावला,
चावला याियक सद य एवं ी डी.
डी क णाकरा राव,
राव लेखा सद य के सम
BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO, AM
आयकर अपील सं. / ITA Nos.1188 to 1190/PUN/2015
िनधा रण वष / Assessment Years : 2006-07 to 2008-09
Dy. Commissioner of Income-tax,
Circle-8, Pune .... अपीलाथ /Appellant
Vs.
M/s G.K. Developers,
B-Block, 21/1, Pimpri,
Pune 411 017
PAN : AAFFG5688P .... यथ / Respondent
अपीलाथ क ओर से / Appellant by
: Shri Rajeev Kumar, CIT
थ की ओर से / Respondent by : None
सुनवाई क तारीख / घोषणा क तारीख /
Date of Hearing : 03.08.2017 Date of Pronouncement: 09.08.2017
आदेश / ORDER
PER D. KARUNAKARA RAO, AM :
There are 3 appeals under considerations. All the appeals are filed by the Revenue against the separate orders of CIT(A)-6, Pune dated 05-05-2015 relating to the Assessment Years 2006-07 to 2008-09 respectively. Since the issue raised is common in these appeals, therefore, these were being adjudicated by this composite order for the sake of convenience.
2. The common issue raised by the Revenue in these 3 appeals relates to allowability of deduction u/s.80IB(10) of the Act when couple of dwelling units exceeded the area restrictions provided in the statute. We find this issue now stands covered by various decisions of the Pune Bench, ITAT and the judgments 2 ITA Nos.1188 to 1190/PUN/2015 M/s. G.K. Developers of Hon'ble High Court. Considering the same, we proceed to adjudicate these 3 appeals of the Revenue with the help of the Departmental Representative for the Revenue.
3. Briefly stated relevant facts of the case are the assessee is a Promoter, Developer and Builder. Assessee filed the return of income for A.Y. 2006-07 declaring total income Nil after claiming deduction u/s.80IB(10) of the Act amounting to Rs.3,79,18,545/- in respect of Housing Project "Roseland Residence". Similar deductions are claimed for other A.Yrs. 2007-08 and 2008- 09 under consideration. AO noticed that the assessee provided incorrect working of built up area of Row House Nos. 1 & 4 wherein the DVO worked out the built up area of said row houses at 1602.62 sq.ft. Assessee argued that terrace area open to sky area is not covered within the meaning of section 80IB(14)(a) of the Act. Rejecting the explanation given by the assessee, the AO in the assessment order denied the claim of deduction u/s.80IB(10) of the Act determining the total taxable income of the assessee at Rs.3,79,18,550/-. The discussion given in Para A on page 3 of the assessment order is relevant. Similar denials are recorded in the other assessment years too. AO relied on the amended provisions of section 80IB(14)(a) of the Act.
4. CIT(A) discussed on the said amended provisions and relied on the finding of the Tribunal in assessee's own case in the context of an order u./s.263 of the Act and finally, granted relief to the assessee. CIT(A) held that the said amended provisions applies prospectively only. Further, he held that the said amended provisions are inapplicable to the assessee's project which started before the amended provisions which are operative w.e.f. 01-04-2005 came into existence. Further, Ld. CIT(A) relied heavily on the decision of Pune Bench of 3 ITA Nos.1188 to 1190/PUN/2015 M/s. G.K. Developers the Tribunal in the case of Shri Naresh T. Wadhwani and Vice versa in ITA Nos. 18 to 20/PUN/2013 and 60 & 61/PUN/2013 order dated 28-10-2014 as well as the judgment of Hon'ble Madras High Court in the case of M/s. Ceebros Hotels Pvt. Ltd. Vs. DCIT in ITA No.581/2008 order dated 19-10-2012 for granting relief. Relevant discussion and the details of which are discussed in Para 10 of the order of the CIT(A). Eventually, the CIT(A) deleted the addition made by the AO and allowed the ground of the assessee on this issue. Contents of Para No.10 of the order are relevant and the same reads as under :
"10. Again Pune Tribunal in appellant's own case while adjudicating order u/s.263 of Income-tax Act for A.Y. 2005-06 in order dated 30-01-2013, held that amended provisions w.e.f. 01-04-2005 are not applicable in respect of the appellant's project. In the present case, it is seen that the project is approved before 01-04-2005, i.e. 09-08-2004 and terrace in both the Row Houses is open to sky. Therefore, ratio of the above two decisions of the Pune Tribunal is clearly applicable in the facts of the case. Accordingly, it is held that the Assessing Officer was not justified in including the area of terrace being open to sky in the built-up area and denying deduction u/s.80IB(10) of Income-tax Act. Accordingly, he is directed to allow deduction u/s.80IB(10) of Income-tax Act amounting to Rs.3,79,18,545/-. Thus, ground No. 4 to 7 are allowed."
5. Aggrieved with the said relief granted by the CIT(A) the Revenue is in appeal before us for all the 3 years under consideration with identical issue relating to allowability of deduction u/s.80IB(10) of the Act and inapplicability of the amended provisions for the project under consideration.
6. Before us, there is none to represent the assessee's case. However, we noticed the fact that the order of the CIT(A) on this issue of granting deduction u/s.80IB(10) constitutes a reasoned order and the CIT(A) has given the detailed reasons while granting relief to the assessee. Contents of Para No. 7 to 10 are earmarked for discussing the facts of the relevant and the legal propositions and reasons given for granting relief to the assessee in this regard. A perusal of the said paragraphs suggest that the CIT(A) considered the assessee's written 4 ITA Nos.1188 to 1190/PUN/2015 M/s. G.K. Developers submissions which are extracted in Para No.8 of his order. In the written submissions, assessee relied heavily on the judgment of jurisdictional High Court in the case of CIT Vs. M/s. Tinnwala Industries Ltd. in ITA No.3315/2010 dated 13-04-2012 and the binding decision of Pune Bench of the Tribunal in the case of Shri Naresh T. Wadhwani (Supra). In Para No.9, the CIT(A) mentioned the fact that the project in question was sanctioned by the PCMC way back on 09-08-2004 whereas the amended provisions of section 80IB(14)(a) were introduced w.e.f. 01-04-2005 only by the Finance (No.2) Act, 2004, which is subsequent in time. Thus, the amended provisions are considered inapplicable to the projects sanctioned prior to the amendment as amendments are prospective in nature. For this proposition, we find that the CIT(A) relied on the decision of Pune Bench of the Tribunal in the case of M/s. Open Shelters in ITA No.219/PN/2009 dated 31-05-2011 for the A.Y. 2005-06. CIT(A) extracted the relevant paragraph from the said order of the Tribunal. It is also evident from Para No.10 which is already extracted above that the AO erroneously applied the amended provisions retrospectively and the same was not approved by the Hon'ble High Court/ITAT/CIT(A). We find no difficulty in approving the decision of the CIT(A) on the said issue. We find that the inclusion of area of Terrace within the meaning of built-up area, which is introduced by the said amended provisions is also not sustainable in view of the decision of the Pune Bench of the Tribunal in the case of Shri Naresh T. Wadhwani (supra) and others, i.e. the judgment of Hon'ble Madras High Court in the case of M/s. Ceebros Hotels Pvt. Ltd. (supra).
7. After hearing the Ld. Departmental Representative for the Revenue, submissions of the Assessee before the AO/CIT(A), we find that there is no dispute on the facts relating to the referral of the flats to DVO and the calculation 5 ITA Nos.1188 to 1190/PUN/2015 M/s. G.K. Developers on the area of those flats. The questions to be adjudicated include if the amended provisions of sub-section 14 (a) of section 80IB apply retrospectively to the projects cleared before the amendments w.e.f. 01-04-2005. Without prejudice, the definition of "built-up area" as given in section 80IB(14)(a) of the Act does not include the area of "Open terrace" expressly. Therefore, considering the orders placed before us and the supporting judicial findings cited above, we are of the opinion that the conclusions drawn by the CIT(A) on the contentions, issue under consideration for all the 3 years under consideration are fair and reasonable and they do not call for any interference. Accordingly, the grounds raised by the Revenue in all the 3 years under consideration are dismissed.
8. In the result, all the 3 appeals filed by the Revenue are dismissed.
Order pronounced on this 09th day of August, 2017.
Sd/- Sd/-
(SUSHMA CHOWLA) (D.KARUNAKARA RAO)
ाियक सद / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
पुणे / Pune; दनांक Dated : 09th August, 2017.
Satish
आदेश क ितिलिप अ िे षत/Copy of the Order is forwarded to :
1. अपीलाथ / The Appellant;
2. थ / The Respondent;
3. आयकर आयु (अपील) / The CIT(A)-6, Pune
4. आयकर आयु / The CIT-6, Pune
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, पुणे "ए" / DR 'A', ITAT, Pune;
6. गाड फाईल / Guard file.
/ आदेशानुसार BY ORDER, स यािपत ित //True Copy// Senior Private Secretary, ITAT, Pune Benches, Pune