9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2009 (8) TMI 760 - AT - Income TaxDeduction u/s 80IB(10)- deduction under s. 80-IB(10) in respect of profit earned on account of sale of shops (commercial project) to the tune of Rs. 11,58,704 - Held that where commercial built-up area in a project is more than 10 per cent. deduction under s. 80-IB(10) can only be granted in respect of profits relatable to residential units as long as all the conditions of s. 80-IB(10) of the Act are fulfilled on a stand alone basis in respect of such residential units of the project. It is thus clear that irrespective of whether or not the conditions of s. 80-IB(10) of the Act are fulfilled on a stand alone basis relating to residential project, in a situation where commercial built-up area is more than 10 per cent the profits arising on sale of commercial units cannot be entitled for deduction under s. 80-IB(10) of the Act. Undoubtedly, there can be occasions when AO fails to bring an income to tax or grant excessive deduction and the remedy for these lapses are prescribed by the provisions of ss. 147, 154 and 263, etc. but all these sections have certain time-limits within which these sections can be invoked. Whether it is a rectification of a mistake, or initiation of proceedings for income escaping assessment, or even a revision proceeding everything must be completed within the prescribed time-limit. To suggest that even a proceeding before the Tribunal is a continuation of assessment proceedings and, therefore, the AO can be allowed to make up for his deficiencies will amount to rendering all these time-limits as nugatory and redundant.
Issues Involved:
1. Deduction under Section 80-IB(10) for profit on the sale of commercial units. 2. Proportionate deduction under Section 80-IB(10) for residential units. 3. Tribunal's power to remand the case to the Assessing Officer (AO). 4. Procedural fairness in the hearing process. Detailed Analysis: Issue 1: Deduction under Section 80-IB(10) for Profit on Sale of Commercial Units The primary issue raised by the Revenue was the CIT(A)'s decision to grant a deduction under Section 80-IB(10) for profits earned from the sale of commercial units. The Tribunal noted that the Special Bench decision in the case of Brahma Associates vs. Jt. CIT had established that if the commercial built-up area exceeds 10% of the total area, the project cannot be considered a housing project, and thus, deduction under Section 80-IB(10) is not available for profits from commercial units. The Tribunal upheld the AO's grievance, reversing the relief granted by the CIT(A) for the commercial units. Issue 2: Proportionate Deduction under Section 80-IB(10) for Residential Units The Revenue also sought the Tribunal's intervention to reverse the proportionate deduction granted by the AO for residential units. The Tribunal emphasized that the AO's decision to grant proportionate deduction was a conscious and well-considered decision. The Tribunal referenced the Supreme Court's judgment in Mcorp Global (P) Ltd. vs. CIT, which stated that the Tribunal cannot take away a benefit granted by the AO. The Tribunal held that it was not within its purview to reverse the AO's decision on this matter, as the issue was not raised in the grounds of appeal. The Tribunal also noted that the Special Bench decision in Brahma Associates had not yet reached finality, implying that the legal position could still evolve. Issue 3: Tribunal's Power to Remand the Case to the AO The Departmental Representative argued for remanding the case to the AO to ensure the assessment aligned with the Special Bench decision in Brahma Associates. The Tribunal, however, clarified that its powers are limited to the points or grounds raised before it, as per the Gauhati High Court's observations in Jeypore Timber & Veneer Mills (P) Ltd. vs. CIT. The Tribunal cannot enhance assessments or remand cases for such purposes. The Tribunal concluded that remanding the case would be inappropriate, as it would effectively allow the AO to correct deficiencies outside the prescribed time limits for rectification, reassessment, or revision. Issue 4: Procedural Fairness in the Hearing Process The Departmental Representative raised procedural concerns, including not being allowed to file an additional ground of appeal and the assessee's counsel being allowed to speak first. The Tribunal dismissed these concerns, noting that the case had been adjourned multiple times, and no effort was made by the Revenue to file an additional ground. The Tribunal also explained that allowing mentions before the regular cause list is a convention to minimize inconvenience, and the Departmental Representative was not denied the opportunity of hearing. Conclusion The Tribunal upheld the AO's grievance regarding the deduction for commercial units but declined to reverse the proportionate deduction for residential units. The Tribunal emphasized its limited powers and procedural constraints, ultimately dismissing the appeal.
|
