Income Tax Appellate Tribunal - Mumbai
Vastusankalpa Developers, Kalyan vs Department Of Income Tax on 13 March, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
"F" BENCH: MUMBAI
BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER
AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
ITA No.6758/Mum/2010
(Assessment year: 2007-08)
ACIT, Circle-3,
2nd Floor, Rani Mansion,
Murbad Road, Kalyan (W)-421 301 ......... Appellant
Vs
M/s. Vastusankalpa Developers,
108, Madhav Baug, Gaushala Road,
Kalyan (W) ....... Respondent
Cross Objection 186/Mum/2011
Arising out of ITA No.6758/Mum/2010, A.Y. 2007-08
M/s. Vastusankalpa Developers,
108, Madhav Baug, Gaushala Road,
Kalyan (W) ......... Cross Objector
Vs
ACIT, Circle-3,
2nd Floor, Rani Mansion,
Murbad Road, Kalyan (W)-421 301 ....... Respondent
PAN: AADFV 5372 R
Appellant revenue by: Shri D.S. Sundar Singh
Respondent-Cross objector by: Dr. K. Shivram
Date of Hearing: 13.03.2012
Date of Pronouncement: 31.05.2012
ORDER
PER R.S. PADVEKAR, JM:
The revenue has filed this appeal challenging the impugned order of the Ld. CIT (A) -1, Thane, dated 30.06.2010 for the A.Y. 2007-
08. The assessee has also filed the Cross Objection partly raising the grievance against the order of the Ld. CIT (A) as well as supporting the relief given.
2. We first take the revenue's appeal being ITA No.6758/Mum/2010. The revenue has taken the following grounds:
2 ITA No.6758/Mum/2010CO 186/Mum/2011 M/s. Vastusankalpa Developers "1. Whether on the facts and in the circumstances of the case and in law, the Hon'ble CIT (A) was justified in allowing the deduction u/s.80IB(10) of ` 1,48,88,072/-.
"2. Whether on the facts and in the circumstances of the case and in law, the Hon'ble CIT (A) was justified on merit in applying the ratio in the case of M/s. Saroj Sales Organization vs. ITO (2008) 115 TTJ 485 (Mum), without appreciating the distinguishable facts brought out by the A.O. in his order u/s.143(3) dated 16.12.2009."
3. The facts pertaining to the controversy which revealed from the orders of the authorities below are as under. The assessee firm is a builders and developers. For the A.Y. 2007-08 the assessee claimed deduction u/s.80IB(10) of ` 1,49,05,079. The return filed by the assessee was selected for scrutiny. The A.O. asked the assessee to justify the claim of deduction u/s.80IB(10). The A.O. asked the assessee to file commencement certificate (C.C.) as well as completion certificate issued by the local authority. The assessee accordingly filed the required documents i.e. Commencement certificate, which was dated 14.12.2004. The assessee also filed the Completion certificates as per the details given below:
Date of Certificate Building No. Description 11.06.2007 A-1 18 Gala and 76 Rooms A-2 18 Gala and 76 Rooms A-3 18 Gala and 76 Rooms 01.10.2007 B-1, B-2, B-3 60 Gala and 195 Rooms 25.03.2009 A-4 60 Gala and 195 Rooms A-5 60 Gala and 195 Rooms A-6 60 Gala and 195 Rooms 26.03.2009 C-4 13 Gala and 50 Rooms
4. The A.O. observed that on the perusal of the documents, the assessee's project was commenced on 14.12.2004 and though the assessee has obtained a revised commencement certificate on 30.03.2007 for the purpose of deduction u/s.80IB(10), the date of commencement could be reckoned from 14.12.2004 i.e. from the date of original sanction. The A.O. referred to the relevant provisions 3 ITA No.6758/Mum/2010 CO 186/Mum/2011 M/s. Vastusankalpa Developers u/s.80IB(10) and has observed that as per the provisions of the Act, the project on which the assessee has claimed the deduction u/s.80IB(10) was to be completed within four years from end of the financial year in which the project was commencement. It is further observed that it was, therefore, imperative on the part of the assessee to furnish a completion certificate in respect of entire project on which the deduction u/s.80IB(10) has been claimed showing project has been completed within said time limit. He has further observed that as per the Completion certificate produced by the assessee was in respect of Part Completion of the project the assessee is not entitled for deduction. The assessee contended that total area of the project was 22,267 sq.mtrs. and the assessee purchased TDR of 14,166 sq.mtrs., which was loaded on the revised approval dated 30.03.2007. The assessee justified the claim of deduction u/s.80IB(10). The A.O. was not impressed with the explanation of the assessee and he denied the entire deduction claimed by the assessee on the reason that the assessee has not completed the entire project within four years from the end of the financial year i.e. on or before 31st March, 2009.
5. The assessee challenged the denial of the deduction before the Ld. CIT (A) and Ld. CIT (A) allowed the claim of the assessee. The Ld. CIT (A) has observed that the assessee originally obtained the Commencement Certificate on 14.12.2004 to construct 19,328.40 sq. mtrs. of FSI. The said approval / commencement certificate was for the construction of buildings i.e. A-1 to A-6, B-1 to B-3 and C-4. The assessee purchased TDR and got the plan modified vide new commencement certificate dated 30.03.2007 for additional construction of 12,166.09 sq. mtrs. and the said approval was given for construction of four buildings i.e. C-1 to C-3 and D. In the opinion of the Ld. CIT (A) those were two independent projects though the land was the same i.e. project utilising the original FSI and project by purchasing by obtaining TDR. The Ld. CIT (A) has observed that the assessee has maintained two books of account and two separate profit and loss account and the assessee has not claimed deduction u/s.80IB(10) on the second project. The Ld. CIT (A) also placed 4 ITA No.6758/Mum/2010 CO 186/Mum/2011 M/s. Vastusankalpa Developers reliance on the decision in the case of Saroj Sales Organisation vs. ITO 3 DTR (Mum) 494. He, finally, held that the project which is consisting of ten buildings is an independent project eligible separately for the claim of deduction u/s.80IB(10) of the Act. Now, being aggrieved the revenue is in appeal before us.
6. We have heard the rival submissions of the parties and perused the records. We find that first plan of the assessee's project was approved on 14.12.2004 vide C.C. of the same date (page No.37 of the compilation and copy of the plan is placed at page no.57 of the compilation). On examining the approved plan, the total area of the plot was shown at 22,267 sq.mtrs. and after making required adjustment in the form of deductions like road, set-back area, proposed roads, recreation ground are etc., the total eligible area for the construction has been shown at 19,328.47 sq.mtrs. as the permissible built up area but as per the total proposed area, it was shown at 18,659.52 sq.mtrs. and consumption of the FSI is shown at 97%. Subsequently, the assessee obtained the TDR and filed the plan for the approval. Approving the TDR the assessee was allowed to commence the construction in the second phase given by the assessee which, is approved on 30.03.2007. It is true that in the second plan the buildings shown in the first plant are appearing but in original plan said buildings are not appearing. The argument of the Ld. Counsel is that the as the plot is common, hence, the assessee has shown the buildings appearing in the first plant also. Admittedly, when the first plan was approved by the local authority, at that time, the assessee has consumed 97% of the FSI and there was no balance FSI, which the assessee could commercially exploit. Subsequently, the assessee obtained the TDR and utilised portion of the land on which otherwise as per the existing regulations it was not permissible to have any construction and it was in the form of the open space only. Only due to obtaining the TDR the assessee could go with the second phase of the project. The term 'Project' has not been defined for the purpose of sec.80I(10). In the different judicial pronouncement the term 'Project' has been interpreted keeping 'the liberal' approach.
5 ITA No.6758/Mum/2010CO 186/Mum/2011 M/s. Vastusankalpa Developers In our opinion, the first phase itself is a separate "project" and admittedly, the assessee completed the building shown in the first phase within four years from the financial year in which the commencement certificate was issued i.e. in F.Y. 2004-05. The Ld. D.R. referred to the trading in the Completion certificate where it is stated that the project is partly completed. In our opinion, as the plot of land is common for both the phases, hence, as per their regulations the Municipal authorities have issued part completion certificate. After giving our anxious consideration to the entirety of the facts and considering the provisions of the law, we are of the opinion that the Ld. CIT (A) rightly held that two phases are of two different projects and so far as Phase-1 is concerned, the assessee has completed the project within time prescribed. It is pertinent to note here in the entire controversy that the A.O. has no reservation or objection in respect of other criteria provided in the Act. Moreover, so far as second Phase is concerned, which has been commenced, which is totally based on the TDR, the assessee has not claimed any deduction u/s.80IB(10) as per the statement made by the Ld. Counsel. We are, therefore, of the opinion that there is no merit in the appeal filed by the revenue. We, accordingly, confirm the order of the Ld. CIT (A).
7. So far as the Cross Objection is concerned, the Ld. Counsel submitted that the assessee is not pressing the Cross Objection. As the Cross Objection is not pressed we dismiss the same as 'not pressed'.
8. In the result, revenue's appeal as well as assessee's cross objection are dismissed.
Order pronounced in the open court on this day of 31st May, 2012.
Sd/- Sd/-
(B. RAMAKOTAIAH) (R.S. PADVEKAR)
ACCOUTANT MEMBER JUDICIAL MEMBER
Mumbai, Date: 31st May, 2012
6 ITA No.6758/Mum/2010
CO 186/Mum/2011
M/s. Vastusankalpa Developers
Copy to:
1) The Appellant.
2) The Respondent.
3) The CIT (A)-I, Thane.
4) The CIT -1, Thane.
5) The D.R. "F" Bench, Mumbai.
By Order
/ / True Copy / /
Asstt. Registrar
I.T.A.T., Mumbai
*Chavan