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2016 (10) TMI 923

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..... ed in favour of assessee - ITA.No.2496/Ahd/2013 - - - Dated:- 7-10-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Assessee : Shri G.C. Pipara, AR For The Revenue : Shri James Kurian, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER Present appeal is directed at the instance of the assessee against the order of the ld.CIT(A)-XV, Ahmedabad dated 16.12.2010 passed for the Asstt.Year 2007-08. 2. Solitary grievance of the assessee is that the ld.CIT(A) has erred in confirming the disallowance of deduction of ₹ 1,03,17,545/- claimed by the assessee under section 80IB(10) of the Income Tax Act, 1961. 3. Registry has pointed out that appeal of the assessee is time barred by 971 days. In order to explain the delay, the assessee has filed application under sub-section 5 of section 253 and annexed affidavit of Shri Pareshbhai Laljibhai Ranpariya, a partner of the assessee-firm. In the affidavit it has been deposed that the assessee firm was engaged in the business of organizer and developer for development and construction of residential housing project. It has filed its return of income on 31.10.2007 declaring .....

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..... IT(A). He was authorized representative, and therefore, according to the Revenue, service of the order was affected upon an authorized representative of the assessee. When the appeal was listed for hearing on earlier occasion, we wish to see other evidences about the factual claim made in the affidavit. Therefore, we passed the following order: 07.09.2016 Present: Assessee by Shri G.C. Pipara, AR Revenue by Shri James Kurian, Sr.DR Registry has pointed out that appeal of the assessee is time barred by 971 days. In order to explain the delay, the assessee has filed an application supported with affidavit of Shri Pareshbhai Laljibhai Ranpariya, who is partner in the assessee-firm. 2. In the affidavit, it has been deposed that ld.CIT(A) has decided the appeal of the assessee on 16.12.2010. This order of the ld.CIT(A) was served upon Chartered Accountant who represented the assessee before the ld.CIT(A). On the direction of the Tribunal, department has produced copy of the acknowledgement slip which exhibits service of this order on 28.10.2010 upon the CA. It has been further pleaded that the tax consultant had handed over the copy of the CIT(A) s order in th .....

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..... Bhavsar was working with the assessee as a regular employee, thereafter, he was working as a parttime employee on annual remuneration basis. He has been writing the accounts of the firm as well as some of the partners in their individual capacities. The ld.counsel for the assessee further contended that there is no mala fide in the act and conduct of the assessee. The delay has occurred on account of communication gap, which is a bona fide mistake and humanly possible. In support of his contentions, he relied upon a large number of decisions: i) N. Balakrishnan Vs. M. Krishnamurth, (1998) 7 Supreme Court cases 123; ii) Collector Land Acquisition Vs. Mst. Katiji Ohters, 167 ITR 471 (SC); iii) Rafiq Another Vs. Munshilal and Another, AIR 1981 (SC) 1400 iv) Auto Centre Vs. State of Uttar Pradesh and Ohters, 278 ITR 291 (All.) v) M/s.Lahoti Overseas Ltd. Vs. DCIT, ITA No3786/Mum/2012. 6. The ld.DR, on the other hand, opposed the prayer of the assessee. He contended that it is humanly improbable that accountant would not inform the assessee about the decision of the ld.CIT(A). According to the ld.DR, it was a severe negligence at the end of the a .....

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..... ery hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 8. Similarly, we would like to make reference to authoritative pronouncement of Hon ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under: Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a .....

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..... necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the condonation of delay, then such reasons are to be construed with a justice oriented approach. If we look the explanation of the assessee, in the light of proposition propounded by the Hon ble Courts, then, it would reveal that the assessee could not afford to make its appeal time-barred knowingly. The delay in filing the appeal happened on account of communication gap between the partners as well as part-time accountant, who has collected copy of the order from the tax consultant office. In the case of N.Balakrishnan Vs. M.Krishnamurthy (supra), the Hon ble Court has observed that every case of delay, there must be some negligence, but that negligence is to be viewed whether to make an appeal time barred was adopted by way of conscious decision as a dilatory strategy. In the present case, by making the appeal time barred, the assessee would not achieve anything. It is also to be seen that a possible human negligence will put the assessee with .....

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..... cieties. The assessee was also allowed to retain consideration received for construction and transfer the land cost to the society. During the course of assessment proceedings, the assessee has further submitted as under: a) Your good self have considered segmental clauses of the agreement and not the entire development agreement in totality. b) The required land location is found out bus. c) The negotiations with the landlord for purchase of the land its consideration is negotiate and determined by us. d) The society is promoted through us. e) We are assigned the entire development work on land area of more than 1 acre. f) The name of the society was also suggested by us including the main person to Handel the Society. g) Required all documents for promoting the society and for opening the bank account were prepared by the firm The construction of the plan and appointment architect, engineer and structure engineer were suggested and decided by us. h) All legal formalities with appropriate authority, govt., another authorities were managed by us. i) The entire land purchase consideration, finance is arranged by us making the paym .....

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..... oves that the assessee has merely a contractor/ agent of the societies 4 As per the Amendment to section 80IB by the Finance Act 2009, a contractor who executes the work awarded by any person is not eligible for deduction u/s 80IB. Any person includes the Nandi Villa Co. Op. Society Ltd. and Nandi Vihar Co. Op. Housing Society Ltd. which are a legal entity. 11. On appeal, the ld.CIT(A) has concurred with the AO. The finding recorded by the ld.CIT(A) reads as under: 6 The Id. AR stated that the shops were not constructed in the sectors for which deduction u/s. 80IB(10) was being claimed, ties contention was not found true because BU permission of 14 shops was dated 23.3.2007 and was given along with BU permission of 158 residential units on which deduction had been claimed in this year by the appellant. Further Annexure 2 of this order which is the Annexure enclosed by the appellant with submission dated 2.12.2010 does not in any way prove that the receipts/ income from construction and sale of shops had been accounted for in an earlier AY and had not been claimed in the profit of ₹ 1,03,17,545 claimed as deduction under section 80IB(10). As per appellan .....

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..... impugned order would indicate that neither the AO nor the ld.CIT(A) has raised any objection with regard to these conditions. Let us deal with this objection of the ld.CIT(A) first. The ld.CIT(A) has observed that flat size was higher and the assessee has constructed shops also. We find that the ld.CIT(A) has recorded factually incorrect finding. Deduction has been claimed with regard to the projects viz. Nandi Vihar Co-op. Housing Society Ltd. and Nandi Villa Co-op. Housing Society Ltd. Society has submitted complete details of five housing society and pointed out that shops were constructed only in Nandi Park Co-op. Housing Society Ltd. This project was completed long back and no deduction was claimed under section 80IB(10). The only deduction claimed by the assessee in this year relates to these two projects where no shops were constructed. Thus, the ld.CIT(A) has erred in appreciating the facts. As far as objection of the AO is concerned, we find that this issue is now covered by the decision of the Hon ble jurisdictional High Court in the case of CIT Vs. Radhe Developers, reported in 341 ITR 403. The Hon ble High Court has disposed a group of appeals. The question famed by .....

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