Miraj Enterprises, Mumbai vs Department Of Income Tax

ACIT-25(2), M/s Miraj Enterprises C-11, 1st Floor, बनाम/ B-602, Prem Nagar, Pratyakshkar Bhavan, Bldg. No.6, MCF Udyan Marg, Bandra(E), Vs. Borivali (W) Mumbai-400051 Mumbai-400092 (राज व /Revenue) ( नधा$%रती /Assessee) P.A. No.AAGFM6792B

राज व क ओर से / Revenue by Shri Love Kumar-DR नधा$%रती क ओर से / Assessee by Shri Sameer G. Dalal

ु वाई क) तार*ख / Date of Hearing सन 07/04/2015

आदे श क) तार*ख /Date of Order: 07/04/2015

आदे श / O R D E R

Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 20/01/2012 of the ld. First Appellate Authority, Mumbai. The only ground raised in this appeal pertains to allowing 2 M/s Miraj Enterprises .

the claimed deduction u/s 80IB(10) of the Income Tax Act, 1961 (hereinafter the Act) on the plea that the assessee did not fulfill the conditions stipulated for eligibility of deduction holding that the completion certificate dated 06/01/2005 was issued by MCGM and constructed as approved plan.

2. During hearing of this appeal, Shri Love Kumar, ld. DR, advanced his arguments which are identical to the ground raised by further submitting that as per approved plan, no residential unit should have area more than 100 sq. ft., and such condition has been conveniently ignored by the ld. Commissioner of Income Tax (Appeals) while granting relief to the assessee. It was also pleaded that the required conditions mentioned in the section itself has not been fulfilled by the assessee, consequently, a well reasoned assessment order has been framed. Plea was also raised that there is no ambiguity in the section which itself provides that the project has to be a 'housing project', which is a condition precedent for availing the deduction.

2.1. On the other hand, Sameer Dalal, ld. counsel for the assessee, defended the conclusion arrived at in the impugned order by further submitting that for AY 2004-05, 2005-06, 2006-07 and 2009-10 that too in the case of assessee itself, the Tribunal has decided the issue in favour of the assessee, confirming the order of the ld. Commissioner of Income Tax (Appeals). This factual matrix was not controverted by the Revenue.

3 M/s Miraj Enterprises .

2.2. We have considered the rival submissions and perused the material available on record. Before coming to any conclusion, as canvassed by the ld. counsel for the assessee, we are reproducing hereunder the relevant portion one of the later order dated 30/07/2014 (AY 2009-10) in ITA No.4657/Mum/2012 for ready reference and perusal/analysis:-

"This appeal filed by the Revenue is directed against the order of the Ld.CIT(A)-35, Mumbai dated 27.04.2012 for the Assessment Year 2009-10.

2. In this appeal, the revenue has agitated the decision of the Ld.CIT(A) allowing the deduction claimed by the assessee u/s 80IB(10) of the Income-tax Act.

3. Briefly stated, the assessee, a partnership firm engaged in the business of builders and developers while declaring a total income at Rs. NIL had claimed the deduction u/s 80IB(10) at Rs.1,08,32,592/-. Further facts are that the assessee had developed a property on plot of land bearing CTS No. 353A of village Malvani, Taluka Borivali having plot area of 1.10 acres by constructing Building No. 1 comprising of A, B & C wing and Building No. 2 comprising of D & E wing known as 'Miraj Residency' situated in Malad (West), Mumbai-95. The assessee declared sales of Rs.20,00,000/- from A-wing of Building No. 1, Rs.2,47,30,000/- from D wing of Building No. 2 and Rs.93,75,000/- from E wing of Building No. 2 for the year under consideration and accordingly claimed a deduction of Rs Rs.1,08,32,592/- u/s 80IB(10) of the Act. The AO did not allow the said claim of deduction u/s 80IB(10) in respect of the entire project on the following grounds that (i) building No. 1 (Wing A, B, C) & 2 (Wing D & E) are separate projects and individual buildings which are not on Plot having area of 1 acre since the total area of the plot 4 M/s Miraj Enterprises .

itself is only 1.10 acre, (ii) Wing A of Building No. 1 has merged flats having area more than 1,000 sq. ft and there is commercial premises having area of 1,500 sq.ft. in B Wing of Bldg. No.1. The AO relied on the materials gathered at the time of survey to hold that the assessee had amalgamated two adjacent flats in 'A' wing of Building No. 1 and thereby the area of amalgamated flat exceeded 1,000 sq.ft. The AO further noticed that there was a commercial area of 1,500 sq.ft. which was used for kids school and as per section 80IB(10), there should not be any commercial area in respect of housing project approved before 31.03.2005. Thus, the AO rejected the claim of deduction u/s 80IB(10). On appeal, the Ld.CIT(A) allowed the claim of deduction by relying on his own order in the assessee's case for the A.Y. 2005-06. The Ld.CIT(A) has also considered the decision of the Tribunal in the case of assessee's sister concern, M/s. Vandana Properties. On the issue of the amalgamation of flats, the Ld.CIT(A) had observed that this issue was already decided by the Tribunal in favour of the assessee.

4. Having heard both the sides and perused the material on record, on the issue that the plot area of building no. 1 is less than one acre and there are few flats exceeding 1,000 sq.ft. and further there is commercial premises having area of 1,200 sq. ft. in 'B' wing of Building No. 1 used for kids school, it is pertinent to mention that the Ld.CIT(A) while dealing with the appeal for A.Y. 2005-06 has held that Bldg No. 1 &2 should be treated as a single project. It is also relevant to state that the Tribunal in the case of assessee's sister concern, M/s. Vandana Properties has held that there is no requirement that each building should have independent plot area of one acre and therefore the rejection of claim of deduction u/s80IB(10) is not correct. Actually in the said case, some of the projects were not entitled to deduction u/s80IB(10) and even then the Tribunal has held that the area of the entire project of Buildings A,B,C,D & E should be considered 5 M/s Miraj Enterprises .

together for the purpose of ascertaining the plot area of one acre. In the case of assessee, even though the project for Building No. 1 and Building No. 2 are separately approved on different dates and the projects have also been commenced on different dates and completed on different dates, the total area of Building No. 1 and Building No. 2 should be considered together for the purpose of ascertaining the area of project. Thus, the entire area of Building No. 1 and Building No. 2 is to be considered and the AO is not justified in splitting the area of Building No. 1 and Building No. 2. Regarding the amalgamation of flats, it is found that this issue has already been decided by the Tribunal in favour of the assessee and the AO has not brought on record any new facts for this A.Y. except repeating what has been stated in the assessment order for A.Y. 2005-06. Also, the said decision of the Tribunal have been upheld by the Hon'ble High Court of Bombay. Further, the provisions of section 80IB(10)(e) has been brought to the statute book with effect from 1.4.2010 and hence the same is not applicable to the case in hand being the assessment year under consideration is 2009-10. Considering the entirety of facts, we are inclined to concur with the findings of the Ld.CIT(A) that the assessee has not constructed joint flats and has not given possession of flats area more than 1,000 sq. Fts, building No. 1 & 2 comprising of Building A to E are in One Project and same are on land area of which is more than 1 acre and as regards the commercial area of 1,500 sq.ft. of kids' school, the issue is covered by the decisions of Hon'ble Bombay High Court in the case of Brahma Associates, wherein it has been held that there can be convenient commercial area even up to 10% of the total built-up area. In view of that matter, we do not find any justifiable reason to interfere with the decision of the Ld.CIT(A) and thus the same is upheld.

5. In the result, the appeal filed by the Revenue is dismissed."

6 M/s Miraj Enterprises .

2.3. If the observation made in the assessment order, denying claimed deduction u/s 80IB(10) of the Act, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, we note that the Tribunal on identical fact/issue that too in the case of assessee itself for earlier and later assessment years, deliberated upon the issue and decided in favour of the assessee. The arguments advanced by the ld. DR has already been dealt with in the orders of the Tribunal and by following the decision from Hon'ble Bombay High Court in the case of Brahma Associates (30 SOT 155). It is also noted the provisions of section 80IB (10)(e) of the Act were brought to the statute book with effect from 01/04/2010, consequently, the same is not applicable to the case in hand being the AY 2008-09. The Tribunal in the case of assessee (ITA No.4015, 4178 and 3740 /Mum/2010) considered the decision from Hon'ble Bombay High Court in the case of Seth Developers (P.) Ltd. 254 CTR 127 (Bom.) and the issue of joining/amalgamation of the flat by considering the decision of the Co-ordinate Bench of the Tribunal (Para-11 at page 5 of the order), wherein it was held as under:-

"For the purpose of allowing deduction u/s 80IB(10), the assessee should fulfill all the conditions mentioned therein, from the brochures found during the course of survey, it is clear that the assessee's intention was to build 3BHK flat on 6th to 9th floors of 'A' wing. The actual construction as found during the survey is as per the plan shown interest he brochures. This has thus created a doubt in minds of revenue authorities. As provided under the Explanation (iii) to clause (a) of sub-section (10) of sec.

7 M/s Miraj Enterprises .

80IB, the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority. Interest the case before us the completion certificated dated 06.01.2005 has been issued by the MCGM as constructed as per approved plan. The duty of the assessee company ends on the said date. As per the approved plan, there are no residential units having area of more than 1000 sq. ft. Therefore, we are of the opinion, that the assessee has fulfilled the conditions prescribed u/s 80IB(10) of the Act and we see no reason to interfere with the findings of the Commissioner of Income Tax (Appeals) on this issue."

Considering the decision of the Tribunal in the case of assessee and following the decision from the Hon'ble jurisdictional High Court, we find no infirmity in the order of the ld. Commissioner of Income Tax (Appeals). It is affirmed.

Finally, the appeal of the Revenue is dismissed.

This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 07/04/2015.

Sd/- Sd/- (D.Karunakara Rao) (Joginder Singh) लेखा सद#य / ACCOUNTANT MEMBER या$यक सद#य / JUDICIAL MEMBER मब ुं ई Mumbai; +दनांक Dated : 07/04/2015 f{x~{tÜ? P.S/. न.स.

आदे श क %$त'ल(प अ)े(षत/Copy of the Order forwarded to :

1. अपीलाथ/ / The Appellant 8 M/s Miraj Enterprises .

2. 01यथ/ / The Respondent.

3. आयकर आय3 ु त(अपील) / The CIT, Mumbai.

p4. आयकर आय3 ु त / CIT(A)- , Mumbai

5. 5वभागीय 0 त न ध, आयकर अपील*य अ धकरण, मब ुं ई / DR, ITAT, Mumbai

6. गाड$ फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, स1या5पत 0 त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मब ुं ई / ITAT, Mumbai