M/S Prajay Engineers Syndicate ... vs Assessee

This appeal by the assessee is directed against the order of the Ld. CIT(A)-V, Hyderabad dated 20.08.2011 whereby he confirmed the disallowance made by the A.O. on account of assessee's claim for deduction under section 80IB in respect of project namely Prajay Sai Gardens.

2. The assessee in the present case is a company which is engaged in the business of construction and hospitality. The return of income for the year under consideration was filed by it on 31.10.2007 declaring total income of Rs.37,83,65,390. In the assessment originally completed by the A.O. under section 143(3) vide an order dated 03.11.2009, the total income of the assessee was determined at Rs.40,98,69,780. The said order was subsequently revised 2 ITA.No.941/Hyd/2014 M/s. Prajay Engineers Syndicate Ltd., Hyderabad.

by the Ld. CIT vide his order dated 26.03.2012 under section 263 with a direction to the A.O. to re-examine the claim of the assessee for deduction under section 80IB in respect of different projects including the project of Prajay Sai Garden. As per the direction of the Ld. CIT, a fresh assessment order was passed by the A.O. under section 143(3) read with section 263 on 10.01.2013 disallowing the claim of the assessee for deduction under section 80IB amounting to Rs.28,68,190 in respect of "Prajay Sai Garden" project. For this conclusion, he relied on the decision of the Tribunal in assessee's own case for A.Y. 2004-05 vide its order dated 23.07.2012 passed in ITA.No.568/Hyd/2009 wherein a similar claim of the assessee for deduction under section 80IB in respect of Prajay Sai Garden Project was held to be not allowable.

3. Against the order passed by the A.O. under section 143(3) read with section 263, an appeal was preferred by the assessee before the Ld. CIT(A) who dismissed the said appeal and confirmed the disallowance made by the A.O. on account of assessee's claim for deduction under section 80IB in respect of Prajay Sai Garden Project following the decision of the Tribunal in assessee's own case for A.Y. 2004-05 rendered vide its order dated 23.07.2012 (supra). Aggrieved the order of the Ld. CIT(A), assessee has preferred this appeal before the Tribunal.

4. We have heard the arguments of both the sides and also perused the relevant material on record. The Learned Counsel for the Assessee has fairly and frankly conceded that the issue involved in the present appeal of the assessee is squarely covered in favour of the Revenue and against the 3 ITA.No.941/Hyd/2014 M/s. Prajay Engineers Syndicate Ltd., Hyderabad.

assessee by the order of the Tribunal dated 23.07.2012 passed in A.Y. 2004-05 wherein the similar disallowance made on account of assessee's claim for deduction under section 80IB in respect of Prajay Sai Garden project was confirmed by the Tribunal for the following reasons given in paragraphs No. 24 and 25 of its order which read as under :

"25. We find that from the photocopies of the sale deeds filed before us, it is seen that the assessee company has plotted the entire land area and sold the plots to different customers. After purchasing the plot, each person has independently obtained permission from the concern local authority for construction of house on his plot. Later, each person has entered into individual construction agreements with the assessee company.

26. Nowhere in the first approval dated 01.09.1999 and final approval dated 22.03.2002 there is any reference to any housing project developed by the assessee company. No approval has been issued by HUDA in the name of the assessee company and hence we are of the opinion that the assessee is not eligible for any deduction u/s.80IB(10) of the I.T. Act. Following the ratio of the decision in the case of Dr. Mrs. Renuka Datla vs. CIT 240 ITR 463 (AP), we reject the assessee's claim of deduction u/s.80IB(10) of the Act. We are of the opinion that the CIT(A) has rightly held that the facts of the case would not show that the assessee was independently engaged in developing and constructing housing project within the meaning of sub-section (10) of 80IB of the Act, hence, we confirm the order of the CIT(A) on this issue."

4 ITA.No.941/Hyd/2014 M/s. Prajay Engineers Syndicate Ltd., Hyderabad.

5. As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to A.Y. 2004-05, we respectfully follow the order of the Tribunal dated 23.07.2012 for the A.Y. 2004-05 (supra) and uphold the impugned order of the Ld. CIT(A) confirming the disallowance made by the A.O. on account of assessee's claim for deduction under section 80IB of the Act in respect of Prjay Sai Garden project.

6. In the result, appeal of the assessee is dismissed.

Order pronounced in the open Court on 13.02.2015.

(SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated 13th February, 2015

VBP/-

Copy to

1. M/s. Prajay Engineers Syndicate Ltd., 8-2-293/82/A, Plot No.1091, Road No.41, Near Peddamma Temple, Jubilee Hills, Hyderabad - 500 033.

2. The Deputy Commissioner of Income Tax, Range 16(3), Aayakar Bhavan, Basheer Bagh, Hyderabad - 4.

3. CIT(A)-V, Hyderabad

4. CIT-IV, Hyderabad.

5. D.R. I.T.A.T. "B" Bench, Hyderabad.