9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (3) TMI 1433 - AT - Income TaxRevision u/s 263 - Deduction u/s 80IB(10) in respect of a project developed by it as per the approval given by the Slum Redevelopment Authority(SRA) for the project - As per CIT Assessee should be taken as a new project and not Slum Redevelopment scheme - HELD THAT - It is an admitted fact that the assessee has not undertaken Slum Redevelopment Scheme, i.e., development of any existing slum. It has constructed flats as per the scheme framed by the SRA in accordance with their design in a open land. Hence we are of the view that the Ld CIT(A) was justified in holding that, for all practical purposes, it should be taken as a new project and not Slum Redevelopment scheme. In the instant case, it is not shown that the assessee has not claimed relaxation of the conditions specified in clause (a) or (b) of section 80IB(10) of the Act by virtue of first proviso. Hence from this angle also, there is no requirement that the project of the assessee should be notified by CBDT. Whether the assessee was a developer or builder? - We agree with the view taken by ld CIT(A) that the agreement entered between the assessee and SRA should be considered as a whole in order to ascertain the status. CIT(A), on examination of the agreement in whole, has taken the view that the assessee cannot be considered as a mere contractor simply for the reason that the land was conveyed to the SRA, since the assessee has taken up the entire responsibility to construct the tenements along with infrastructural facilities. The building so constructed was later handed over to the SRA. In consideration of the same, the assessee has got TDR. Hence, we are in agreement with the said observations of the Ld CIT(A) - the assessee could have been taken as a contractor, only if the SRA has taken up the responsibility to construct the building and the assessee was awarded the contract to construct the building. This is not the case here. The assessee has taken up entire responsibility of the project to develop and complete the project. Hence, the Ld CIT(A) was right in holding that the assessee was a developer in this project. With regard to the observation of the AO that the assessee appears to have not completed the project before 31.3.2008, we notice that the very use of the word appears by the AO shows that he was also not sure about his allegation. In any case, the Ld CIT(A) has taken note of the possession certificate given by the SRA, as per which all the buildings were handed over to it before 31.3.2008, meaning thereby, the assessee has completed the construction before that date. In view of the above, we do not find any infirmity in the order of Ld CIT(A) passed for AY 2007-08 and accordingly uphold the same. AY 2006-07 challenging the revision order passed by Ld CIT u/s 263 - The order passed by Ld CIT(A) for assessment year 2007-08 would show that the issues considered by Ld CIT are debatable in nature, i.e., the view taken by the assessing officer for allowing deduction u/s 80IB(10) of the Act was a possible view. Accordingly as per the decision rendered in the case of Malabar Industrial Company 2000 (2) TMI 10 - SUPREME COURT the impugned revision order is liable to be set aside, since the one of possible views taken by the AO would not render the assessment order prejudicial to the interest of the revenue. It is well settled proposition of law that the twin conditions specified in sec. 263 of the Act, viz., (a) assessment order is erroneous and (b) it is prejudicial to the interest of revenue, should be shown as existing before passing revision order u/s 263 of the Act. Further, on merits also, we have noticed that the various reasons cited by the AO/Ld CIT does not merit acceptance. Hence, the impugned revision order is liable to set aside.
Issues:
1. Eligibility of the assessee for deduction u/s 80IB(10) for assessment year 2007-08. 2. Validity of revision order passed by Ld CIT u/s 263 of the Act for assessment year 2006-07. 3. Appeal challenging the order of Ld CIT(A) passed for assessment year 2006-07. Issue 1: Eligibility of the assessee for deduction u/s 80IB(10) for assessment year 2007-08: The appeal filed by the revenue for assessment year 2007-08 contested the eligibility of the assessee for deduction u/s 80IB(10) of the Act. The assessing officer disallowed the claim based on certain reasons, including the non-notification of the Slum Redevelopment scheme by the CBDT and the completion status of the project. However, the Ld CIT(A) held that the conditions specified in sec. 80IB(10) did not apply to the project as it was developed on open land as per the SRA scheme. The Ld CIT(A) also concluded that the assessee was a developer based on the agreement with SRA and allowed the deduction. The ITAT upheld the Ld CIT(A)'s decision, emphasizing that the project was a new one and not a Slum Redevelopment scheme, and the assessee was indeed a developer, not a mere contractor. The possession certificate confirmed the project completion before the specified date, supporting the eligibility for the deduction. Issue 2: Validity of revision order passed by Ld CIT u/s 263 of the Act for assessment year 2006-07: The Ld CIT initiated revision proceedings for the assessment year 2006-07 based on the order passed for the subsequent year, 2007-08. The Ld CIT considered the assessing officer's allowance of the deduction u/s 80IB(10) without proper examination as a reason for revision. However, the ITAT found that the revision order was debatable and not prejudicial to the revenue's interest. Citing the Malabar Industrial Company case, the ITAT set aside the revision order as one of the possible views taken by the AO was not detrimental to the revenue's interest. The ITAT also noted that the reasons provided by the AO/Ld CIT did not hold merit, leading to the decision to set aside the revision order. Issue 3: Appeal challenging the order of Ld CIT(A) passed for assessment year 2006-07: The appeal filed by the revenue for assessment year 2006-07 was dismissed as the assessing officer's order was based on the now-set-aside revision order by Ld CIT. With the revision order being invalidated, the assessment order under sec. 143(3) r.w.s 263 did not stand. Consequently, the appeal filed by the revenue was dismissed, and the appeal filed by the assessee was allowed. The ITAT upheld the order of Ld CIT(A) for the assessment year 2006-07, confirming the eligibility of the assessee for the deduction u/s 80IB(10) of the Act. This detailed analysis of the judgment highlights the issues involved, the arguments presented, and the final decisions made by the ITAT regarding the eligibility of the assessee for deduction u/s 80IB(10) and the validity of the revision order passed by Ld CIT for the respective assessment years.
|
