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Pushkar Construction Co. Versus The I.T.O., Ward-9 (1) , Ahmedabad

2015 (9) TMI 842 - ITAT AHMEDABAD

Disallowance for deduction u/s. 80IB(10) - claim denied by the A.O for the reason that the plot size of the land on which the project was undertaken was less than 1 acre. - Held that:- Hon’ble Bombay High Court in the case of CIT vs. Vandana Properties reported in (2012 (4) TMI 54 - BOMBAY HIGH COURT) had an occasion to decide on the issue of deduction u/s. 80IB(10) wherein it has held that the expression “housing project” is neither defined under section 2 of the Act nor under Section 80IB(10) .....

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see.

As far as denial of deduction on the ground of flat size being in excess of 1500 sq. ft. is concerned, we find that the Assessee had sold 4 flats namely C-401, 402, 403 and 404 to 4 different purchasers vide separate sale deeds which have also been confirmed by the respective purchasers and at the time of its sale each flat was less than 1500 sq. ft. It is also a fact that the inspection was carried out by the DVO subsequent and much after the date when Assessee had handed over t .....

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e aforesaid facts, we are of the view that the Assessee is eligible for deduction u/s. 80IB(10) and therefore set aside the order of A.O on this ground. - Decided in favour of assessee.

Disallowance u/s. 40(a)(ia) - late deduction tax at source from payments - Held that:- With respect to the payment made to Anar Builders Pvt. Ltd., we find that though Assessee had submitted that the payee has already included the payment received from the Assessee as its income and paid tax on it but .....

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issue needs re-verification. We therefore restore the issue to the file of A.O for verification and thereafter decide the issue in accordance with law. - Decided in favour of assessee for statistical purposes. - I.T.A. No. 1544/AHD/2010 - Dated:- 28-8-2015 - SHRI ANIL CHATURVEDI AND SHRI S.S. GODARA, JJ. For The Appellant : Shri P.M. Mehta For The Respondent : Shri D.C. Mishra, Sr. D.R. ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. This appeal filed by the Assessee is against the order of CIT( .....

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de order dated 26.12.2008 and the total income was determined at ₹ 1,07,31,760/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 24.02.2010 dismissed the appeal of the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us and the grounds raised by the Assessee which have been subsequently concised, reads as under:- 1. In law and on the facts and in the circumstances of the case, the order passed by .....

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to have allowed the claim of the appellant. 2.2. In law and in the facts and circumstances of the appellant s case, the learned CIT(A) has grossly erred in holding that the appellant has not fulfilled conditions u/s. 80IB (10) (b) & (c) of the Act, without considering the submission by the appellant and certain important observations in the DVO s report, as highlighted by the appellant. 2.3 In law and in the facts and circumstances of the appellant s case, the CIT(A) should have realized tha .....

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llant s case, the CIT(A) has grossly erred in upholding the disallowance of ₹ 5,48,483/-, on account of alleged non deduction tax at source from some payments, by wrongly invoking the provisions of section 40(a)(ia) of the Act. The same needs to be deleted. 5. In law and in the facts and circumstances of the appellant s case, the CIT(A) has grossly erred in upholding the charging of interest u/s. 234B of the Act, amounting to ₹ 11,92,063/-, when no such interest is chargeable in the .....

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ssessee had entered into 3 Development Agreements on various dates for the construction of housing project though the land owners were same in the 3 Development Agreements. He also noticed that Assessee s entering into 3 Development Agreements cannot be considered to be for one housing project and the approval and B.U permission granted by the local authorities for various Blocks were different. He was therefore of the view that the housing project carried out by the Assessee were on 3 different .....

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ld. CIT(A) who upheld the order of A.O by holding as under:- 12. After going through rival submissions it is seen that the appellant entered into 3 Development Agreements on three different dates for three plots of land each below 1 acre: Sr. No. Date of agreement Plot Area 1 08.10.2004 1463 sq. mtr. 2 14.12.2005 1608.21 sq. mtr. 3 20.03.2006 1544 sq. mtr. AMC gave permissions on different dates for construction of different blocks. Building Use permission was also given on different dates as ob .....

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in section 80 IB (10 )( b) is not found fulfilled. 13. The condition with respect to 1500 sq. ft. limit for each residential flat was not found fulfilled on the date of inspection of the DVO i.e. 24.8.2009. It is common knowledge that changes in flats are always in connivance with the builder. On one hand the appellant is stating that no changes can be undertaken even by the buyers without approval of the local authority and without obtaining proper permissions while on the other hand it has no .....

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AR in the presence of the AO pleaded that even if two flats were made into one on the top floor of Block C then too 1500 sq.ft. limit did not exceed. This argument is not factually correct because the BU permission for Block C dated 9.7.2007 (enclosed as Annexure-2 of this order) shows 599.44 sq.mts built-up area for 8 residential units on fourth floor i.e. the top floor plus stair cabin 62.83 sq.mtrs. Even if the area of stair cabin is excluded built-up area of one unit comes to 74.93 sq.mtrs. .....

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lated the denial of 80IB(10) by the AO is upheld. 6. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us. 7. Before us, ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted that Assessee s project named Pushkar Residency was approved by Ahmedabad Municipal Corporation (AMC) with plot area of 4717 sq. mtrs, which is equivalent to 1.166 acres in its first approval dated 19.10.2005. He pointed to lay out plan of the project placed .....

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for getting permission for construction and in order to avoid financial squeeze, Assessee had carried out the construction of the project in a phased manner. He therefore submitted that the project remained as a one whole project only. With respect to ld. CIT s observation that in Block-C on the 5th Floor, Assessee had constructed only 2 flats, the area of which exceeded 1500 sq. ft, he submitted that ld. CIT(A) had relied upon DVO s report which is dated 17.11.2009. He submitted that the date .....

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to one unit each after the purchase of flats from the Assessee. He therefore submitted that once the Assessee has handed over the possession of the flats to the buyers and if later on the buyers clubbed or combines the unit, the Assessee s claim of deduction u/s. 80IB(10) cannot be denied. Ld. A.R. also pointed to the confirmations of the sale deed of the 4 flats which are placed at page 196 to 259 of the paper book and also pointed to the confirmation of the purchasers of flat which is placed a .....

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ground is with respect to deduction u/s. 80IB(10) of the Act which was denied by the A.O for the reason that the plot size of the land on which the project was undertaken was less than 1 acre. From the copy of the lay out plan dated 19.10.2005 which has been certified by the AMC, it is seen that the total project by AMC has been approved for 3 Blocks namely Block-A, B & C for the total plot area of 4615.21 sq. mtrs. The total area of the land on which the Assessee has carried out the constr .....

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ave to be construed as commonly understood Housing Project in common parlance and it would mean constructing a building or group of buildings consisting of several residential units. It further, at para 26 has noted as under:- 26.…………………… However, in the absence of defining the expression housing project and in the absence of specifying the size or the number of housing projects required to be constructed on a plot of land having minimum ar .....

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eral other housing projects are undertaken on the very same plot of land, the deduction would not be available to those housing projects as the plot ceases to be a vacant plot after the construction of the first housing project. Such a construction if accepted would defeat the object with which Section 80IB (10) was enacted. 27. Moreover, plain reading of Section 80IB (10) does not evenremotely suggest that the plot of land having minimum area of one acre must be vacant. The said Section allows .....

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hellip;………………………… Therefore, it is clear that on a plot of land having minimum area of one acre, there can be any number of housing projects and so long as those housing projects are approved by the local authority and fulfill the conditions set out under Section 80IB (10), the deduction thereunder cannot be denied to all those housing projects. Section 80IB (10) while specifying the size of the plot of land, does not specify .....

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in rejecting the contention of the Revenue regarding the size of the plot cannot be faulted. 9. Subsequently, we have also come across the decision of Hon ble Madras High Court in the case of CIT vs. Voora Property Developers P. Ltd. reported in (2015) 373 ITR 317 (Mad), where the Hon ble High Court after referring to the decision of Hon ble Bombay High Court in the case of Vandana Properties (supra) decided the issue and the head notes reads as under:- HOUSING PROJECT-SPECIAL DEDUCTION-CONDITI .....

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of project is less than 1 acre and more so when Revenue has not disputed about the fulfillment of other conditions stipulated u/s. 80IB(10) by the Assessee. 11. As far as denial of deduction on the ground of flat size being in excess of 1500 sq. ft. is concerned, we find that the Assessee had sold 4 flats namely C-401, 402, 403 and 404 to 4 different purchasers vide separate sale deeds which have also been confirmed by the respective purchasers and at the time of its sale each flat was less tha .....

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be said to be done by Assessee and therefore it cannot be said that Assessee has sold flat whose area was in excess of 1500 sq. ft. 12. Before us, Revenue has not brought any contrary binding decision in its support. In view of the aforesaid facts, we are of the view that the Assessee is eligible for deduction u/s. 80IB(10) and therefore set aside the order of A.O on this ground. Thus this ground of Assessee is allowed. Ground no. 3 & 4 are considered together as they are with respect to di .....

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TDS was deducted only at the end of the year. A.O was of the view that Assessee was required to deduct TDS at the time of payment or credit whichever is earlier and TDS should have been paid to the Government account within the prescribed time. Since the Assessee had deducted the tax on 31st March, 2006 on the various amounts paid on various dates before 31st March, 2006, provisions of Section 40(a)(ia) were applicable and accordingly he disallowed the payment of ₹ 39 lacs made to Shreena .....

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A.O., Assessee carried the matter before ld. CIT(A) who confirmed the order of A.O and decided the issue against the Assessee by holding as under:- 15. Ground No.3: The Id. AO has erred in making a disallowance of ₹ 39,00,000 on accounted of alleged late deduction tax at source from payments by wrongly invoking the provisions of section 40(a)(ia). During the course of appellate proceedings it was conceded that there was late deduction of TDS. Vide reply dated 10.8.2009 Annexure 5 was enclo .....

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No.4 the AO erred in making disallowance of ₹ 5,48,483 on account of alleged non-deduction of tax at source u/s.40(a)(ia), The format enclosed by the appellant through its reply dated 10.8.2009 which is enclosed as Annexure 3 of this order shows no TDS was made on certain payments made to the sub-contractors, therefore the addition made by the AO is upheld. 14. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us. 15. Before us, ld. A.R. with respect to the .....

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spectively and for the aforesaid submission he placed reliance on the decision of Gujarat High Court in the case of Omprakash Chaudhary (T. A No. 412 of 2013). With respect to the payment of ₹ 2 lac to Anar Builders Pvt. Ltd. which was disallowed by A.O is concerned, he submitted that the payee namely Anar Builders has already filed its return of income wherein the amount paid by the Assessee has been included and has also paid tax on the same and since there is no leakage of Revenue on ac .....

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lowance u/s. 40(a)(ia). With respect to the disallowance of ₹ 39 lacs being the payment made to Shreenath Builders, and on perusing Annexure-3 of CIT s order, it is seen that the TDS was deducted on 31st March, 2006 and the same was deposited on 31st May, 2006 and the return of income was filed by the Assessee on 20.10.2006. Thus it is seen that the entire TDS that was deducted by the Assessee has been paid to the account of Government before filing of return of Income and in such a situat .....

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l 2005 therefore needs to be answered in affirmation. It can be seen that the amendment made by the Finance Act 2010 allows additional time upto the due date of filing of the return in respect of even those instances where TDS has been deducted during the first eleven months of the previous year. The additional time till the due date of filing of the return, in case of TDS made during the last month of the previous year was already available by the amendment made by Finance Act 2008. Thus, it is .....

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imb of time limit for payment of TDS has to be held retrospective not from 1st April 2010 only. If we recall at this stage the speech of Finance Minister while introducing this provision by way of Finance Act, 2010, this amendment essentially has been brought for relaxing the current provision on disallowance of expenditure. The tax, if is deducted at any time during the financial year and paid before the date of filing of the return, the Legislature intended to allow deduction on such expenditu .....

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ct, considered the apparent difference where an unintended benefit was given to the assessee who deducted the entire year s TDS in the month of March of the previous year which were eligible to pay TDS so deducted to the Government by due date of filing of the return under Section 139 (1) of the Act. However, the assesses who may have deducted the tax in earlier months beginning from April to the end of February of the previous year, did not get such benefit of extended time and thus the same wo .....

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e answer the substantial / question of law raised in these Appeals in favour of the assessee and against the Revenue by holding the amendment made in Section 40 (a)(ia) of the Income Tax Act, 1961 by the Finance Act 2010, as retrospective in operation, having effect from 1st April 2005 ie., from the date of insertion of Section 40 (a) (ia) of the Act. 17. With respect to the payment made to Anar Builders Pvt. Ltd., we find that though Assessee had submitted that the payee has already included th .....

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