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TMI Blog2010 (12) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... ringing the provisions of section stated above. 2. The order of the ld. CIT(A) deserves to be set aside and the order of the AO be restored." 3. Ld. DR of the revenue supported the assessment orders, whereas it was submitted by ld. AR of the assessee that this issue is covered in favour of the assessee by the Tribunal decision in assessee's own case for AY 2000-01 to 2002-03 in ITA No.4628/D/03, 3719/D/04 and 1329/D/05 dated 30.10.09. He submitted a copy of this Tribunal decision and our attention was drawn to para no. 26 of this Tribunal, wherein it was held by the Tribunal with regard to four projects of Shipra Riviera Complex that the expenses incurred on these four projects prior to 1.10.1998 do not indicate that development and construction of housing project had been commenced before 1.10.1998. 4. We have considered the rival submissions and perused the material on record and have gone through the orders of the authorities below and the Tribunal decision cited by ld. AR of the assessee. We find that the claim of the assessee regarding deduction u/s 80IB in respect of Shipra Riviera Complex has been rejected by the AO on this basis that the department h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g project had been commenced before 1.10.98. Expenses were incurred on cleaning of land so that correct measurement of the land could be done. The issue with regard to expenditure on leveling of land, approval of plan, marketing of booking the residential units, receipt of advance booking money etc. has arisen in the instant case and by taking shelter of some of these activities having taken place prior to 1.10.98, the AO has denied claim of deduction u/s 80IB. Respectfully following the decision of the Coordinate Bench, we do not find any merit in the action of the AO. 27. Allegation of CIT in his order u/s 263 for the AY 02-03 to the effect that construction project undertaken by the assessee was out of reconstruction and splitting the project which is already in existence, is without any material on record. Whatever construction was available at the site pertained to Bhagirathi and Alaknanda project of Shipra Riviera complex for which assessee did not claim any exemption u/s 80iA(4F)/80IB(10). A bare reading of provisions of s. 263 makes it clear that the prerequisite to exercise of jurisdiction by the CIT suo moto under it, is that the order of the ITO is erroneous in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner for that of the ITO, who passed the order, unless the decision is held to be erroneous causing prejudice to the interest of revenue. The power of suo moto revision under sub-s. (1) of s. 263 is in the nature of supervisory jurisdiction and the same can be exercised only if both the circumstances specified therein exist. Furthermore an order passed by the AO cannot be set aside for making roving inquiry without pointing out any error in his order. An order can be revised only when such order is demonstrated to be erroneous, the powers of revision is not meant to be exercised for purpose of directing officer to hold another investigation when the order of the AO is not found to be erroneous. Where assessment orders has been passed by the AO after taking into account assessee's submissions and documents furnished by him and no material whatsoever has been brought on record by the Commissioner which showed that there was any discrepancy or falsity in evidences furnished by the assessee, the order of AO cannot be set aside for making deep inquiry only on the presumption and assumption that something new may come out. For making a valid order u/s 263 it is essential that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd allow assesse's appeal for the same. Assessee's appeal for AY 1999-00 is allowed with respect to exemption of income u/s 80IA(4F). After going through the accounting version of the assessee duly supported by audit report, the CIT(A) held that construction and development activity as stipulated under the provisions of the Act had been undertaken after 30.9.98, accordingly Brahmaputra, Alaknanda, Caveri, Damodar A and B projects were started and commenced only after 1.10.98, the land area of each project was more than 1 acre, and that the construction area of each flat was less than 1,000 sq. ft. as prescribed in sec. 80IA(4F). The detailed finding so recorded by the CIT(A) is as per material available on record, no interference is required therein." 5. Since the facts in the present two years are similar and ld. DR of the revenue also could not point out any difference in facts in the present two years, we find no reason to take a contrary view and hence, by respectfully following the earlier Tribunal decision, we confirm the order of CIT(A) on this issue. The ground raised by the revenue is rejected in both years. 6. In the result, both the appeals of the revenue are di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Brahma Associates vs. JCIT and 30 SOT 155 (Pune) (SB). Our attention was drawn to para no. 113 and 114 of the decision of the Spl. Bench of the Tribunal. Ld. DR of the revenue supported the orders of the authorities below. 10. We have considered the rival submissions, perused the material on record and have gone through the orders of the authorities below and the decision of the Spl. Bench of the Tribunal cited by ld. AR of the assessee. We find that this fact is very clear that even this Shipra Sun City Project of the assessee company was also approved by the relevant authority i.e. GDA and because of this, the AO himself has allowed deduction to the assessee u/s 80IB with regard to this project also in respect of residential flats built by the assessee in this project. The disallowance has been made by the AO and confirmed by the ld. CIT(A) only with regard to shopping area of this project and regarding the ratio of shopping area to the total area, we find that specific contention was raised by the assessee before the AO as has been noted by him in para no. 12.3.5 of the assessment order that the shopping area of the assessee's project is in conformity with the limit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or eligibility to deduction u/s 80IB(10) and the eligibility of such deduction can only be for the profit which are in respect of residential units segment of the overall project but in the present case, we have noted that it was the contention of the assessee before the AO as well as before ld. CIT(A) and also before us that the total shopping area of the project was less than 5% of the total area. No adverse finding has been recorded by the AO in the assessment order in spite of this specific contention raised by the assessee before him. The project has been approved by GDA and as per the building construction and development rules, 2000 of GDA, copy of which is available before us in the paper book, there is ceiling on the shopping area up to 5% of total project area and since the project of the assessee was approved by GDA, it has to be accepted that the shopping area was in conformity of these rules in the absence of any adverse finding of the AO and in view of this fact that nothing adverse could be brought on record before us also by ld. DR of the revenue in this regard. Once it is accepted that the shopping area of the assessee's this project was below 10% of the total proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no reason has been given by the AO for making this observation. The details of this expanse is available on pages 10 and 11 of the paper book as per which payment of Rs.20,000/- was made by way of cheque to NAREDCO on account of annual subscription for the year 03-04. It is submitted by the assessee in the synopsis filed before us that full form of NAREDCO is "National Real Estate Development Council" which was established in the year 1998 under the Aegis of Union Ministry of Housing and Urban Poverty Alleviation, Govt. of India. for the development and promotion of Housing and Real Estate Sector in India. Since the assessee is in the business of housing development and real estate, we fail to understand as to how this subscription is not related to business purpose of the assessee as has been alleged by the AO in para no. 15 of the assessment order particularly when no reason has been specified by the AO. The balance amount of Rs.5784/- is regarding annual charges for three credit cards of American Express Bank Limited. Regarding these charges also, we are satisfied that it was for the business purpose of the assessee and hence, the entire disallowance of Rs.25,784/- is not justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat High Court rendered in the case of Saya Ji Iron and Engineering Company as 253 ITR 749. Ld. DR of the revenue supported the orders of the authorities below. 19. We have considered the rival submissions and perused the material available on record and have gone through the orders of the authorities below. We find that it has been noted by the AO in para no. 13 of the assessment order that the assessee company has claimed depreciation on cars of Rs.1474924/- as per the schedule attached with the balance sheet. It is further noted by the AO that the assessee company has not offered any disallowance out of depreciation of cars on account of possible personal use by the directors of the company. By making this observation, the AO held that 10% out of depreciation on cars is to be disallowed in view of this fact that the assessee has not maintained log books. Now this aspect is squarely covered in favour of the assessee by this judgment of Hon'ble Gujarat High Court rendered in the case of Sayaji Iron (supra), wherein it was held by Hon'ble Gujarat High Court that even if there is personal use of cars by the directors of the assessee company, addition can be made in the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O had disallowed the net loss of Rs.350276/- after set off of profit of Rs.185803/- in respect of sale of the second cottage i.e. C-7. It is submitted that such a disallowance by the AO is not justified in the absence of any adverse material having been brought on record by him to suggest that the sale price declared by the assessee in respect of cottage no. C-17 is not correct or that the cost of construction shown by the assessee with respect to these cottages are not correct. Ld. DR of the revenue supported the orders of the authorities below. 26. We have considered the rival submissions and perused the material available on record and have gone through the orders of the authorities below. We find that the AO had noted on page no. 2 of the assessment order the complete details regarding the cottage numbers, buyers, name and addresses, sale proceeds and cost of construction etc. were furnished. There is no defect pointed out by the AO in amount of sale proceeds or cost of construction reported by the assessee. The basis of making disallowance by the AO is that there was no plausible explanation available or given regarding selling of two cottages below the construction co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of Rs.19017/- on account of interest paid by the assessee on car loan taken from bank in respect of one Tavera Car. It is noted by the AO in para no. 3 of the assessment order that this one car was purchased for Rs.694254/- in the name of the Managing Director Sh. Mohit Singh. It is held by the AO that since the car is not in the name of the assessee company and it is in the name of the Director, the interest on such a car loan is not allowable and on this basis he disallowed the interest amount of Rs.19017/-. For the same reason, he also disallowed the depreciation on this car claimed at Rs.143152/- and total disallowance was made on this account of Rs.162169/-. Ld. CIT(A) has confirmed the disallowance and now the assessee is in further appeal before us. It has been submitted by the assessee before us that the car was used for company's work and, therefore, the expenses on account of interest on car loan and depreciation on car should be allowed. Reliance is placed on the tribunal decision rendered in the case of Chhabaria Textiles Mills (P) Ltd. vs. ACIT, 38 BCAJ 579. He also placed reliance on the judgment of Hon'ble Madras High Court rendered in the case of Cromp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his order that the assessee had spent a sum of Rs.1 lakh for the stall taken in a seminar organized by National real estate development council at Habitat Centre, New Delhi. It is submitted by ld. DR of the revenue that this payment is in the nature of payment of rent and hence, TDS was deductible u/s 194I. He supported the orders of the authorities below. 30. We have considered the rival submissions and perused the material on record and have gone through the orders of the authorities below. We find that no specific section has been noted by the AO under which TDS was deductible by the assessee. We also do not find any such section under which TDS was deductible by the assessee from this payment. Regarding the submission of ld. DR of the revenue that this payment is in the nature of rent payment, we find that as per the proviso to sec. 194I, no TDS is deductible if payment in a financial year is below Rs.1.20 lakhs. Since in the present case, total payment is of Rs.1 lakh only, even under the provisions of sec. 194I, no TDS was deductible and hence, the disallowance made by the AO on this account is not as per law and, therefore, we delete the same. 31. Regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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