9911796707
TMI Blog2016 (6) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... been accepted by the Department and appeal has been filed u/s. 260A. 2. The Appellant craves to leave to add, to amend and/or to alter any of the grounds of appeal, if need be. 3. The appellant, therefore, prays that on the grounds stated above, the order of the CIT(A)-39, Mumbai may be set aside and that of the Assessing Officer restored." 2.2 From a perusal of the grounds raised (supra) it is seen that the single issue raised therein is with regard to the learned CIT(A) allowing the assessee's claim for deduction under section 80IB(10) of the Act by following the decision of the Coordinate Bench of this Tribunal in the assessee's own case for assessment years 2000-01 to 2006-07 in ITA Nos. 3514 to 3520/Mum/2009 dated 24.08.2011. The contention of the Revenue is that the learned CIT(A) ought not to have followed the aforesaid decision of the Coordinate Bench of this Tribunal since the same has not been accepted by the Department and has preferred appeals against the said order before the Hon'ble High Court. The learned D.R. was heard in support of the ground raised. 2.3 Per contra, the learned A.R. for the assessee submitted that the learned CIT(A) has considered the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Build Nos. 1 to 13 is before 1.10.1998 deduction u/s. 80IB(10) is not allowable to the appellant. (b) As per Rule 18BBB it is mandatory to file separate audit report for each undertaking or enterprise for which deduction is claimed and it should be accompanied by Profit and Loss Account and Balance Sheet of the said undertaking or enterprise as if the undertaking or enterprise were a distinct entity. 8.2 It has to be mentioned here that the original assessment, as completed was the subject matter of proceedings under s. 263 of the Act. The CIT, Central-11, Mumbai had invoked the provisions of s. 263 for the A.Y. 2000-01 to 2006-07 on the ground that on examination of these orders, it was observed that the same were erroneous and prejudicial to the interest of Revenue mainly because deduction under s. 801B(10) has been allowed, whereas assessee had not fulfilled all the conditions. 8.3 The appellant had filed appeal against the order passed under s. 263 and the Hon'ble ITAT vide orders in ITA No. 3515 to 3520/Mum/2009 dated 24.8.2011 had quashed the orders under s. 263. 8.4 As regards the objection that the building no. 3 was commenced before 1.10.1998, the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 8.6 Thus the said objection is also not tenable. The amendment introduced by the Finance Act, 2002 is applicable w.e.f. 1.4.2003 i.e. A.Y. 2003-04 and onwards. Hence it is held that the claim for deduction under s. 80IB(10) is allowable and hence to be allowed, it is directed accordingly." 2.4.3 On an appreciation of the facts of the case for the year under consideration, i.e. A.Y. 2002-03 in respect of the assessee's claim for deduction under section 80IB(10) of the Act we find that no material has been brought on record to controvert the factual findings of the learned CIT(A) (supra) and therefore we find no requirement to interfere with or deviate therefrom. In the factual matrix of the case and decision of the Coordinate Bench of this Tribunal in its order in ITA Nos. 5315 to 5320/Mum/2009 dated 24.08.2011 (supra), we uphold the order of the learned CIT(A) in allowing the assessee's claim for deduction under section 80IB(10) of the Act. Consequently, the grounds at S.Nos. 1 to 3 raised by the Revenue are dismissed. 3. In the result, Revenue's appeal for A.Y. 2002-03 is dismissed. 4. Revenue's appeal in ITA Nos. 2879 & 2880/Mum/2013 for assessment years 2004-05 & 2005-06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed the same considering the facts of the case for the relevant years under consideration and by following the decision of the Coordinate Bench of this Tribunal in ITA Nos. 3514 to 3520/Mum/2009 dated 24.08.2011 for assessment years 2000-01 to 2006-07. It is prayed that in view of the above, Revenue's appeals for assessment years 2004-05 and 2005-06 are liable to be dismissed. 4.4.1 We have heard the rival contentions of both the parties and perused and carefully considered the material on record; including the judicial pronouncement cited. The facts of the matter are that the AO completed the orders of assessment for assessment years 2004-05 and 2005-06 under section 143(3) r.w.s. 153A of the Act vide orders dated 30.03.2007 allowing the assessee's claim for deduction under section 80IB(10) of the Act. Subsequently, the CIT, Central-II, Mumbai invoking the provisions of section 263 of the Act held that the aforesaid orders of assessment passed by the AO to be erroneous and prejudicial to the interests of Revenue and set aside the orders of assessment for assessment years 2004-05 & 2005-06. The AO then passed orders of assessment for these two assessment years under section 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) Phase-II Project "Vijay Nagari Annex- II" (Building No. 14 to 18, Survey No. 138) commenced on 30.03.2001 as per Commencement Certificate No. 99/018/ TMC/TDD/2295 dt. 30.03.2007 of the Thane Municipal Corporation. For Building No. 14, 15, 77 & 18 Occupancy Certificate No. 99/018/TMG/TDD/5102 dt. 9.02.2005 was issued by TME, the local authority. No Occupancy Certificate for Building No. 16 is received till date. (b) As per Rule 18BBB it is mandatory to file separate audit report for each undertaking or enterprise for which deduction is claimed and it should he accompanied by Profit and Loss Account and Balance Sheet of the said undertaking or enterprise as if the undertaking or enterprise were a distinct entity. (c) Project 'Vijay Garden' (Building No. 1-13 and Row House No. 1-12) commenced on 11.07.2002 vide commencement certificate No.2002/07TMC/TDD/837. Total super built up are for .fiats ranges from 380Sq.Ft. to 1015 Sq. Ft. and area for Row Houses is 2000 Sq.Ft. each. Since this project Contains row houses of 2000 Sq.Ft. area each., the deduction under s. 80IB of the assessee Act cannot be allowed. 5.4 The appellant has made further submission, as under, in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax, Central-II, Mumbai invoked the provisions of section 263 on the ground that the assessment order passed by the ld. A.O. u/s 143(3) r.w.s. 153A is erroneous and prejudicial to the interest of revenue and set-aside the assessment order. After considering the submission made by the authorized representative the ld. A.O. passed order u/s 143(3) r.w.s. 153A & 263 and disallowed the deduction u/s 80IB(1) claimed by the appellant, which are allowed by the ld. A.O. in the order passed u/s 143(3) r.w.s. 153A. IN The appellant filed appeals before the Hon'ble ITAT against the ld. CIT's order passed u/s 263. The Hon'ble ITAT vide order dated 24.08.2011 quashed the orders passed by the id. CIT u/s 263. 5.5. On a consideration of the matter, it has to be held that the matter of claim of deduction under s. 80IB(10) had been examined by the Hon'ble ITAT, the highest fact finding body, in the course of adjudicating upon the validity of the revision order of the CIT-II, Central, under s. 263. The Hon'ble ITAT vide order dated 24.08.2011, after taking cognizance of the Inspectors Report dated 2.3.2007, has given a finding of fact that the objection as raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n holding that the assessee has fulfilled the conditions laid down u/s 80IB(10) without appreciating the fact that the assessee failed to obtain Completion Certificate issued by the Local Authority in respect of all the projects on which it has claimed deduction u/s. 801B(10) of the IT Act, 1961. 2. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the claim of the assessee u/s. 80IB(10) without appreciating that one of the projects viz. "Vijay Garden" contained row houses exceeding 2000 sq.ft. in area which violated the condition precedent for allowing deduction u/s. 801B(10). 3. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the claim of the assessee u/s. 80IB(10) despite noting that the assessee had filed only consolidated audit report and not separate audit report in respect of each project as mandatory under Rule 18BBB. 4. The Appellant craves to leave to add, to amend and / or to alter any of the grounds of appeal, if need be. 5. The appellant, therefore, prays that on the grounds stated above, the order of the CIT(A)-39, Mumbai may be set aside and that of the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned CIT(A), considering the facts of the case for the year under consideration and following the aforesaid decision of the Coordinate Bench dated 24.08.2011 in the assessee's own case for assessment year 2000- 01 to 2006-07, partly allowed the assessee's claim for deduction under section 80IB(10) of the Act, subject to verification of Audit Report/Certificates, by holding as under at paras 6.1 to 6.4: - "6.1 The Assessing Officer disallowed the claim on account of various reasons, which are summarized as hereunder: (a) Phase-II Project "Vijay Nagari Annex- II" (Building No. 14 to 18, Survey No. 138) commenced on 30.03.2001 as per Commencement Certificate No. 99/018/ TMC/TDD/2295 dt. 30.03.2007 of the Thane Municipal Corporation. For Building No. 14, 15, 77 & 18 Occupancy Certificate No. 99/018/TMG/TDD/5102 dt. 9.02.2005 was issued by TME, the local authority. No Occupancy Certificate for Building No. 16 is received till date. (b) Project 'Vijay Garden' (Building No. 1-13 and Row House No. 1- 12) commenced on 11.07.2002 vide commencement certificate No.2002/07TMC/TDD/837. Total super built up are for .fiats ranges from 380Sq.Ft. to 1015 Sq. Ft. and area for Row Houses i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f completion of this project was 07.11.2002 and January 2006 respectively. The documentary proof of municipal approved plan, architect certificate, commencement certificate and completion certificate, etc. are obtained and placed on record." It has been stated by the AO that appellant is not entitled to deduction under s. 80IB(10) on the ground that appellant ,failed to file separate report in Form 10CCB for each undertaking or enterprise for which the deduction had been claimed. In this regard it is submitted that the consolidated Audit Report was already furnished alongwith the return of income and therefore the claim of the appellant cannot he denied. The non-furnishing of separate Audit Report alongwith the return will render the return defective and therefore the defect is clearable. iii) It is further submitted that during the course of search no incriminating documents relating to the claim of deduction, under S. 80IB(10) was found. In the absence of any- incriminating material the Assessing Officer is not empowered to disallow the claim of' deduction under s. 80IB(10) in the impugned order passed under s. 143(3) r.w.s. 153C. It is further pointed out that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion found by him and if nothing was found wrong, then he should have dropped the proceedings. We further find this proposition has been confirmed by Delhi Bench of the Tribunal in the case of Institute of Chartered Accountants of India vs. DIT(Exemption) [supra] wherein at page 561 it was observed as under : "With respect to the reliance placed by learned CIT-Departmental Representative on the proposition of Delhi High Court in this case of Gee Vee Enterprises (supra) wherein non-making of inquiry by the A.O. was stated to justify the action of CIT u/s 263, it is very pertinent to mention the latest decision of Hon'ble' jurisdiction High Court in the ease of CIT vs. Vikas Polymers in IT Ref. No.3 of 1991, dt. 16th August, 2010, wherein it was observed that merely by stating that assessee has not filed certain documents on record at the time of assessment, it does not justify the conclusion arrived at by the CIT that A.O. has shirked his responsibility of investigating the case. It was further observed that in view of the .fact that assessee has explained the capital investment made by the partners, which had been called into question by the CIT, during the course of proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The provision cannot be invoked to correct each and every type of mistake or error committed by the assessing officer, it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category full orders passed without applying the principles of natural justice or without application of mind. The phrase "prejudicial to the interest of the Revenue" is not an expression of the art and is not defined in the Act. Understood in its ordinary meaning it is of vide import and is not confined to loss of tax. The scheme of the Act is to levy and collect tax in accordance with the provision of the Act and this task is entrusted to the Revenue. The phrase "prejudicial to an erroneous order of the Income Tax Officer, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interest of the Revenue" has to be read in conjunction with an erroneous order passed by the assessing officer. Every loss of Revenue, for example, when an Income tax officer adopted one of the course permissible in law and it has resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quisite Audit Report is curable. Accordingly, the appellant has to necessarily furnish separate Audit Reports for each undertaking or enterprise for which deduction under s. 80IB has been claimed. Since the said separate reports were not placed before the Assessing Officer, the appellant is directed to produce the requisite Certificates/Report before the Assessing Officer who after perusing the said Certificate will decide the eligibility of the appellant for relief under s. 80IB(10), as deemed fit. 6.4 The Assessing Officer will allow reasonable opportunity to the appellant with regard to examination of the project wise Audit Reports, 6.5 This ground is treated as allowed in part." 6.4.3 On an appreciation of the facts of the case, on the assessee's claim for deduction under section 80IB(10) of the Act for A.Y. 2006-07, we find that Revenue has failed to bring on record any material to controvert the findings of the learned CIT(A) (supra) and therefore find no requirement to interfere with or deviate therefrom. In this factual matrix of the case as discussed above and following the decision of the Coordinate Bench of this Tribunal in its order in ITA No. 3514 to 3520/Mum/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same considering the facts of the case for the relevant year under consideration and by following the decision of the Coordinate Bench of this Tribunal in ITA Nos. 3514 to 3520/Mum/2009 dated 24.08.2011 for assessment years 2000-01 to 2006-07. It is prayed that in view of the above, Revenue's appeals for A.Y. 2006-07 is liable to be dismissed. 8.4.1 We have heard the rival contentions and perused and carefully considered the material on record. The facts of the matter are that the AO disallowed the assessee's claim for deduction under section 80IB(10) of the Act in the order of assessment for A.Y. 2007-08 vide order dated 24.12.2010 passed under section 143(3) r.w.s. 153C and 143B(1) of the Act. We find from a perusal that the learned CIT(A) allowed the assessee's claim for deduction under section 80IB(10) of the Act after considering the facts of the case pertaining to the year under consideration, i.e. A.Y. 2007-08 and following the ratio of the Coordinate Bench of this Tribunal vide its orders in ITA Nos. 3514 to 3520/Mum/2009 dated 24.08.2011 wherein the Coordinate Bench had quashed the order under section 263 of the Act for assessment year 2000-01 to 2006-07 denying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is mandatory to file separate audit report for each undertaking or enterprise for which deduction is claimed as if the undertaking or enterprise were a distinct entity. 7.4 With respect to the above objections, submissions of the appellant are as summarised below: (a) As regards point no(a) wherein the ld. A.O. has alleged that the completion/ occupancy certificate of building n.No.16 has not yet been received it is submitted that the allegation is entirely frivolous on the ground that this allegation has not found place in the assessment order passed u/s 143(3) r.w.s. 153A, show cause notice issued by CIT u/s 263, order passed by CIT u/s 263, consequential order passed by the A.O. u/s 143(3) R.W.S. 263/153a. It is submitted that the building has been completed which is evident from audit report u/s 80IB(10) as well as from the completion certificate issued by the architect which is placed at pages nos. 11-13 of the paperbook. It may be noted that the A.O. during the course of assessment proceedings had deputed two Inspectors at the sites of the housing projects constructed and developed by the appellant in order to verify the claim of the appellant u/s 80IB(10). The inspectors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is not entitled to deduction u/s 80IB(10) on the ground that the appellant failed to file separate report along with the return of income in Form No. 10CCA for each undertaking or enterprise for which deduction has been claimed. In this respect it is submitted as under: The objective of the A.O. is frivolous as the appellant has filed the return electronically and therefore no audit report could have been filed along with the return of income. Further, it is submitted that the CBDT vide circular No. 6/2008 dated 18.07.2008 has categorically stated that no documents (including TDS / TCS Certificate, reports of Audit) should be attached alongwith returns filed in the electronic mode. 7.5 The objection as raised by the A.O and the submissions of the appellant have been considered. It is observed that during the course of assessment proceedings, the A.O. had deputed two Inspectors for on-site verification, who had clearly stated that project Vijay Nagari Phase II commenced on 31.3.2011 and was completed in March 2003; that with regard to Vijay Garden, the deduction had been claimed in respect of Building Nos. 10 to 13, and not in respect of Row houses being Building nos. 1-9, Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee is entitled to the claim for deduction under section 80IB(10) of the Act. Consequently, Revenue's grounds raised at S.Nos. 1 to 5 of this appeal are dismissed. 9. In the result, Revenue's appeal for A.Y. 2007-08 is dismissed. 10. Revenue's appeal in ITA No. 3497/Mum/2013 for A.Y. 2008-09 10.1 In this appeal, Revenue has raised the following grounds: - "1. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in holding that the assessee has fulfilled the conditions laid down u/s 80IB(10) without appreciating the fact that the assessee failed to obtain Completion Certificate issued by the Local Authority in respect of all the projects on which it has claimed deduction u/s. 801B(10) of the IT Act, 1961. 2. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the claim of the assessee u/s. 80IB(10) without appreciating that one of the projects viz. "Vijay Garden" contained row houses exceeding 2000 sq.ft. in area which violated the condition precedent for allowing deduction u/s. 801B(10). 3. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a copy of, lie Inspector's report dated 02.03.2007(Pages 82 to 83 of Paper Book). From the said report, it is seen it has been reported therein that with respect to the claim of deduction in respect of the four buildings in Vijay Garden, all the requisite documents including the commencement and completed certificates have been obtained and placed on record. Further, it has been submitted that the occupancy certificate is issued by the competent authority only after the completion certificate is issued by the Architect. In this regard, I have examined the copies of the occupancy certificate placed on record by the appellant. From pages 47 to 40 contain the copies of the completion certificates given by the Architect to enable the Municipal authorities to issue the Occupancy Certificate. Thus it is found that there is merit in the contention that without completion certificate from the Architect, the Occupancy Certificate cannot he obtained. Also, it is clear from the order of the AO himself that no claim was made for deduction in respect of row houses being building numbers 1-9 of Vijay Garden. It is clear from the chart as prepared by the A.O., in paragraph 3.2 of the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) that when the assessee's return for the year under consideration has been e-filed, the original documents/ annexures, Audit Report, etc. are to be produced before the AO in the coruse of assessment proceedings; which has been done in this case. Before us, except for raising the grounds (supra), the learned D.R. for Revenue has not been able to bring on record any material evidence to contradict the findings of facts rendered by the learned CIT(A) that the assessee has fulfilled the conditions laid down for being allowed deduction under section 80IB(10) of the Act. In this factual matrix of the case, as discussed above, we uphold the order of the learned CIT(A) in holding that the assessee is entitled to be allowed deduction under section 80IB(10) of the Act in this year. Consequently, Revenue's grounds at S.Nos. 1 to 5 of this appeal being bereft of merit are dismissed. 11. In the result, Revenue's appeal for A.Y. 2008-09 is dismissed. 12. Revenue's appeal in ITA No. 3498/Mum/2013 for A.Y. 20090-10 12.1 In this appeal Revenue has raised the following grounds: - "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im has been denied mainly on the ground that the completion certificates were not received. This is countered by the appellant stating that the occupancy certificate is issued by the local authority only after receipt of the completion certificate from the Architect. In order to evidence its contention the appellant has produced the copies of the certificate from the Architect, placed at page nos. 37 to 55 of the paper book furnished in the course of the appellate proceedings. From a perusal of the said documents it is observed that the occupancy certificate for the various projects have been issued by the Municipal Corporation and the same are addressed to M/s Archetype Consultants (I) Pvt. Ltd., who in turn have submitted the completion certificates, which is referred to in the said certificate of occupancy. Hence the claim cannot be denied for the reason that completion certificates haves not been obtained for the reason that it is after receipt of the completion certificate of the Architect that the occupancy certificate is issued by the Municipal Authorities. Hence held that for the said reason the claim cannot be denied and that the appellant is entitled to the claim. In thes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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