Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (10) TMI 474 - ITAT BANGALORE

2015 (10) TMI 474 - ITAT BANGALORE - TMI - Revision u/s 263 - since for A. Y. 2010-11 the claim of deduction u/s.80IB(10) was denied, as per the CIT for the impugned assessment year also such claim could not be allowed, project being the very same - According to CIT(A) DVO who carried out the inspection in the presence of the accountant of the assessee had given a clear finding that a number of residential units were having built-up area in excess of 1500 sft. Therefore according to him, assesse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

buyers, that the vendor was Chamundeswari Buildtek P. Ltd and the buyers were actually buying the plots from them. Agreements entered by such buyers with the assessee for construction of residential units were separate. These aspects have not been looked into by the AO. These were very relevant in deciding whether the assessee was a developer or only a contractor. When the AO does not make the enquiries that is lawfully expected of him and which any prudent man would have done, if placed in simi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

order erroneous or prejudicial to the interests of Revenue. But an enquiry which by itself is only a farce and does not do justice to the duty cast on a statutory authority would be equivalent to non-enquiry. No error in the order of CIT in considering the order of AO erroneous and prejudicial to the interests of Revenue. CIT had while setting aside the assessment only directed a fresh assessment after giving opportunity to the assessee. Thus assessee would have an opportunity to place the judi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der dt.25.03.2014 of CIT, Bangalore- II, passed u/s.263 of the Income-tax Act, 1961 ( the Act in short). 02. Facts apropos are that assessee had filed return of income declaring income of ₹ 65,77,573/-. Assessee had claimed deduction of ₹ 5,09,35,824/-, u/s.80IB(10) of the Act, for one of its housing projects called County- 1, in such return of income. During the course of assessment proceedings, AO had vide letter dt.16.06.2011, required the assessee to file the GPA executed in its .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er cost incurred by it on non-80IB projects. Thereafter assessment was completed on 23.09.2011 u/s.143(3) of the Act and in such assessment an addition of ₹ 9,96,500/- was made for excess expenditure on non-80IB projects. 03. On 25.09.2013, CIT issued a notice u/s.263 of the Act, to the assessee. As per this notice, during the course of assessment proceedings for succeeding assessment year 2010-11, AO concerned had referred the assessee s claim with regard to deduction u/s.80IB(10) of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

deduction u/s.80IB(10) of the Act was denied, as per the CIT for the impugned assessment year also such claim could not be allowed, project being the very same. Assessee in reply to the above mentioned notice stated that it had two residential projects namely County-1 and County-II. According to it claim for which deduction u/s.80IB(10) of the Act was restricted to County-I. As per the assessee in respect of five units which were found by the DVO as having builtup area in excess of 1,500 sq.ft, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rought out that assessee was a developer and the owner was a confirming party. As per the assessee it had shown the cost of purchase of land and full sale proceeds when the developed units were sold, in its books of account. Land ownership, as per the assessee was not a pre-requisite for preferring a claim u/s.80IB(10) of the Act. Assessee also contended that even if some units were having area in excess of 1500sft, claim of deduction u/s.80IB(1) of the Act could not be denied. For this, it plac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing to him, assessee was not eligible for the deduction u/s.80IB(10) of the Act. CIT (A) also noted that Hon ble Apex Court had on a similar issue admitted the appeal of the Revenue, wherein it assailed the directions of the Tribunal to give pro-rata deduction u/s.80IB(10) of the Act. Vis-a-vis the ownership of the property on which development was being done, CIT was of the opinion that the land belonged to Chamundeswari Builtdtek P. Ltd., and they had sold the sites directly to different purch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ea in excess of 1,500 sft, deduction claimed u/s.80IB(10) could not be denied. Reliance was placed on a coordinate bench decision in the case of DCIT v. Brigade Enterprises (P) Ltd [(2008) 14 DTR 037]. Vis-a-vis requirement of legal ownership over the land, Ld. AR relying on the judgments of Hon ble Gujarat High Court in the cases of CIT v. Radhe Developers [341 ITR 403] and CIT v. Shree Ram Construction [TA.430 of 2013, dt.10.12.2012], submitted that such ownership over the land was not an esse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of Brigade Enterprises (P) Ltd (supra) though an SLP filed on the very same issue by the Revenue before the Apex Court stood dismissed. Further according to him during the course of assessment proceedings, AO had enquired about the aspect of ownership and was satisfied with the replies given by the assessee. Thus according to him, order of the AO was neither erroneous nor prejudicial to the interests of the Revenue. 06. Per contra, Ld. DR strongly supporting the order of CIT and submitted that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

per the Ld. DR, both the parties were interested persons and there was no inter-se arrangement. Placing reliance on GPA placed at paper book page 53, Ld. DR submitted that Managing Director of Chamundeswari Buildtek P. Ltd, who was the owner of the property, was M. Ashok Kumar. Beneficiary of the GPA was the assessee, who was a partnership firm and the managing partner of the said firm was also the very same Ashok Kumar. According to him, the GPA executed by the very same person in his own favou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r without considering the relevant aspects of the case and had never applied his mind. 07. We have perused the orders and heard the rival contentions. Query placed by the AO during the course of assessment proceedings with regard to the claim u/s.80IB(10) of the Act is reproduced here under Your authorised representative has filed a copy of GPA from M/s. Chamundeshwari Builders Pvt. Ltd. On which your firm has been given only power to construct and sell on behalf of them, which means that your f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rought to tax as your firm s income. 08. Assessee s reply to this, if any, is not available on the records. However, in the original assessment order dt.23.09.2011 there is a mention regarding the claim made by the assessee u/s.80IB(10) of the Act, and this read as under 2. The assessee firm having two projects one is covered by 80IB and another one is non 80IB. On comparison of cost of project per sq.ft., the cost of project in respect of 80IB case (county I) comes to ₹ 2.981/- per sq.ft. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of construction in respect of non 90IB project is less that is why the cost per sq.ft. is more and requested to accept the same. Considering the assessee's A.R's explanation, the cost of excess expenditure on the non 80IB project is estimated at ₹ 250/- per sq.ft. on the constructed area of 3986 sq.ft. which comes to ₹ 9,96,500/- and disallowed on excess expenditure debited. Accordingly, the same is brought to tax for which the assessee's AR has agreed. 09. Above narrati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t-up area in excess of 1,500 sft. May be the argument of the assessee that even if some of the units had built-up area in excess of 1,500 sft, pro-rata deduction u/s.80IB(10) of the Act, should be given to it, might be acceptable in view of the judgment of Hon ble Gujarat High Court in the case of Radhe Developers (supra). But nevertheless as noted by the CIT it is clear from the sale deed entered by Chamundeswari Buildtek P. Ltd, with various buyers, one copy of which is available at paper book .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version