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TMI Blog2011 (6) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act amounting to ₹ 5,54,20,691/- and deduction u/s 80IA(4)(iii) amounting to ₹ 10,59,56,901/-. A search and seizure operation was carried out u/s 132 of the Act in the case of the assessee and its sister concerns on 10.8.2006. In response to notice u/s 153A, the assessee filed return of income on 8.5.2007 declaring nil income. The A.O. at para No. 3.1 of his order has mentioned the various projects undertaken by the assessee during the year from A.Y. 2001-02 to 2007-08. In the relevant A.Y., the A.O. noted from the findings of the search and seizure conducted at the assessee s premises, as well as post search enquiries that the commercial space at Gawanpada Project is more than 3000 sq. ft. He, therefore, asked the assessee to explain as to how the conditions laid down in the provisions of section 80IB(10) are fulfilled. 2.1 It was submitted that the assessee was awarded slum rehabilitation project at Gawanpada by Slum Rehabilitation Authority (hereinafter referred to as SRA). As per the letter of approval issued by SRA, the total area of plot is 6993.75 sq.mt. which is equivalent to 1.728 acres. The total plot area is divided as follows:- a) The plot area f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which had a minimum area of one acre, one has to take into consideration the entire area of the plot on which all the building projects had been planned though some of the buildings do not qualify for deduction u/s 80IB(10) of the Act. It was submitted that since the project for which the deduction was claimed u/s 80IB(10) was situated on an area which was more than one acre including the built up area not eligible for deduction u/s 80IB(10), the assessee ought to be allowed deduction. It was submitted that in determining whether or not the project was on an area of land which was more than one acre, the entire area of the plot should be considered. The plot included the area of both i.e. the buildings which qualified for deduction u/s 80IB(10) and those which did not so qualify. It was submitted that in the instant case the total plot area of Gawanpada project was 6993.75 sq. mt. (equivalent to 1.728 acres) divided between slum rehab building portion of 3110.10 sq. mt. (equivalent to 0.769 acres) which qualified for deduction u/s 80IB(10) and sale building portion 2386.30 sq. mt. (equivalent to 0.590 acres) which did not qualify for deduction u/s 80IB(10). Thus, taking into consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is a slum rehabilitation project approved by the CBDT. 4. The ld. Counsel for the assessee submitted that the assessee has challenged the disallowance of claim u/s 80IB(10) in respect of its development project at Gawanpada, Mulund (E). The assessee has also come to know of the Notification No. 67/2010 dated 03.08.2010 issued by the CBDT where under it has notified the scheme contained in Regulation 33(10) of the Development Control Regulation for Greater Mumbai, 1991 as a Scheme for the purpose of Section 80IB(10) of the Act. Hence, the said project is eligible for deduction u/s 80IB(10) of the Act. All the material facts required for the purpose of adjudication of the above ground are already on record and, the additional ground raised being purely a question of law and no new facts are brought on record, therefore, the same should be admitted and adjudicated. For this proposition, he relied on the following decisions:- 1. National Thermal Power Corporation v. CIT [229 ITR 383) (SC) 2. Jute Corporation of India Ltd. V. CIT [187 ITR 688 (SC) 3. Ahmedabad Electricity Co. Ltd. V. CIT [199 ITR 351 (Bom) (FB)] 5. The ld. D.R., on the other hand, strongly opposed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the order of the ld. CIT(A) submitted that the notification is not applicable since the scheme was approved earlier. 7. We have considered the rival submissions made by both the sides, perused the orders of the A.O. and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the A.O. denied the benefit of deduction u/s 80IB(10) for the Gawanpada project on the ground that the commercial area for the said project being 3960.51 sq. ft. is more than 2000 sq. ft. We find the ld. CIT(A) while upholding the order of the A.O. in denying the deduction u/s 80IB(10) held that since the area of the plot is less than one acre, therefore, the assessee is not entitled to deduction u/s 80IB(10). He, therefore, did not adjudicate the issue relating to the commercial area exceeding 2000 sq. ft. Since the approval to the Gawanpada rehab housing project was approved on 16.10.98, a fact brought on record by the A.O. at page -11 of his order and not disputed by the ld. D.R., therefore in view of the decision of the co-ordinate Bench of the Tribunal in the case of Saroj Sales Organisation (supra) and Hiranandani Akruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same cannot be allowed to be considered for the purpose of deemed dividend. 8.3 However, the ld. CIT(A) was not satisfied with the arguments advanced before him. He also distinguished the decision of the Tribunal in the case of Bombay Oil Industries Ltd. on the ground that the due procedure laid down u/s 292/293 and 372A of the Companies Act has not been followed by the assessee. Therefore, the advances received by the assessee company from City Gold Management Services Pvt. Ltd. on which the assessee company owns 24% shares could not be termed as inter corporate deposits. Further, in the case of Bombay Oil Industries (supra) there was interest payment on the intercorporate deposit whereas in the instant case no such payment of interest has been received or paid. Further, there was no formal inter-corporate deposit invited or accepted. He also rejected the plea that the transactions between the assessee and the City Gold Management Services Pvt. Ltd. were in the nature of current account. According to the ld. CIT(A) making entries of advances through an account termed as current account would not alter the nature of advances . He noted that there are periodical amounts rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to the sister concerns. There is no evidence to show that money was loaned or kept deposited for a fixed period or repayable on demand. Further, the sister concerns and the assessee are owned by the same family group of people with a common managing partner with centralised accounts under the same roof. Transfer of funds has taken place in a whimsical manner. Therefore, it is rather difficult to say that the transactions are in the nature of deposits or loans with certain conditions attached to them, either as regards the period of such deposits or loans or with regard to their repayments. From the copies of the accounts furnished before us all that can be gathered is that funds have been transferred from and to the sister concerns as and when required and since the managing partner is common to all the sister concerns, the decision to transfer the funds from one concern to another concern or to repay the funds could be said to have been largely influenced by the same individual. In other words, the decision to give and the decision to take rested with either the same group of people or with the same individual. In such circumstances of the case, we hold that the transaction int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry view, the ground raised by the assessee is allowed. ITA No. 4851/Mum/2009 (By Revenue for A.Y. 2005-06) 11. The grounds raised by the Revenue are as under:- 1. On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax(Appeals) erred in directing the Assessing Officer to delete the disallowance of deduction under Section 80IA(4)(iii) amounting to Rs.10,59,56,901/- by ignoring the fact that disallowance was made by the Assessing Officer in accordance with Rule 18C of the Income-tax Rules, 1962 as the assessee had not been notified by the CBDT in the Assessment Year 2005-06. 2. On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax(Appeals) erred in admitting the additional evidence in the form of CBDT s letter dated 07/11/2005 without giving any reasonable opportunity to the Assessing Officer in contravention of provisions of Rule 46A of the Income-tax Rules, 1962. 3. The appellant prays that the order of Commission of Income tax (Appeal) on the above ground be set aside and that the ITO/AC/DC be restored. The appellant craves leave to amend or alter any grounds or add a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the notification. The chronological events in respect of the approval was also furnished before the ld. CIT(A). Rule 18-C of the Income Tax Rules and CBDT Notification for deduction u/s 80IA(4)(iii) in the Official Gazettee on 5.6.2006 were brought to the notice of the ld. CIT(A). Various arguments were also advanced before the ld. CIT(A) justifying the claim of deduction u/s 80IA(4)(iii). 11.4 Based on the arguments advanced by the assessee, the ld. CIT(A) held that the assessee is entitled to benefit of deduction u/s 80IA(4) for the impugned A.Y. The relevant observation of the ld. CIT(A) at para No. 5.4 to 5.4.3 reads as under:- 5.4 I have considered the facts of the case and the written submissions made by the AR and find merit in them. If the entire scheme of industrial park together with the procedures laid down by the Legislature and the language used by the implementing agencies while raising the queries and giving approvals are considered in tandem, the contention of the appellant seem to have merit. Firstly, the provisions of sec. 80IA(2) nowhere provide that the deduction was allowable from the date of approval by the CBDT only. In the absence of these words, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once the number of units indicated were located in the industrial park. Hence, the CBDT notification nowhere suggested that the date of notification only would be the cut off date for eligibility. 5.4.2 In view of the discussion in Para 5.4 above, it is held that the benefit of the CBDT notification would be available once the number of units indicated in the notification were located in the industrial park . In the case under consideration, the latest date by which all the phases of industrial park were completed and the completion certificates were obtained being 24.12.2003, the benefit of section 80IA(4) is available to the appellant during the assessment year under consideration as claimed. 5.4.3 This ground of appeal is therefore, allowed. 13.4 Aggrieved with such order of the ld. CIT(A), the Revenue is in appeal before us. 12. We have considered the rival submissions made by both the sides, perused the orders of the A.O. and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find Rule 18-C of the income Tax Rules, 1962 reads as under:- 18C. (1) The undertaking shall begin to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (ITA-I), Office of Central Board of Direct Taxes, Department of Revenue, North Block, New Delhi and a copy of which is placed at paper book page 15 to 17. We find the assessee company has fulfilled all the requisite conditions for claiming deduction u/s 80IA(4)(iii) of the Act. The requisite number of units located in Industrial Park were completed and the completion certificates were also obtained by 24th December 2003, a finding given by the ld. CIT(A) and not controverted by the ld. D.R. Under these circumstances and in view of the detailed order passed by the ld. CIT(A), we do not find any infirmity in the order of the CIT(A) allowing the claim of deduction u/s 80IA(4)(iii). The ground No. 1 raised by the Revenue is accordingly dismissed. 12.2 So far as ground No. 2 relating to admission of additional evidence is concerned, we find the letter from CBDT is dtd. 7.11.2005 and the assessment order was passed on 30.12.2008 (a copy of which is placed at paper book page 20 to 22). We find from the certificate of the paper book that the above document was very much available with the A.O. The ld. D.R. could not controvert or brought any material to show that such letter addressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chawl in Vile Parle (E), Mumbai through a letter of approval issued by Slum Rehabilitation Authorities (hereinafter referred as SRA ) on 10th February 1998 bearing ref. no. SRA/Dy. CE/83/KE/ML/LOL. This was the first letter of approval received from the SRA Authority. Subsequently the assessee received second letter of approval from SRA on 13th July, 2001. The assessee has been granted building-wise commencement certificates and obtained occupation certificates for all the buildings developed on Rehab portion as Ashram Chawl project at Vile Parle (E), Mumbai. The building wise details of commencement certificate and occupation certificate are as under:- Rehab Building Date of commencement certificate Date of occupation certificate Building No. 1 21.08.1999 11.10.2001 Building No. 1B 21.08.2009 25.06.2005 Building No. 2 20.10.1999 17.12.2003 Building No. 3A 10.09.1999 04.11.2003 Building No. 3B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Para 55: As far as the issues on merits are concerned, for the assessment year 2002-03, both the parties submitted that the facts and arguments are similar to the facts and arguments for the assessment year 2001-02 though the project in question is at Ashram Chawl. As the plot area recorded by the CIT(Appeals) is 1.298 acres for the same reasons given while disposing of ITA No. 4869/Mum/2009 for the assessment year 2001-02, we allow this ground of the assessee. Para 57: Coming to assessment year 2004-05 both the parties submitted that ground No. 1 is in respect of project Ashram Chawl and the issue is identical to ground No. 1 for the assessment year 2002-03 and for the same reasons that are given while dealing with the issue for the assessment year 2001-02, we allow this ground. 17.1 Since the facts of the impugned A.Y. are identical to the facts in the A.Y. 2002-03 and 2004-05, therefore, respectfully following the order of the Tribunal in assessee s own case and in absence of any distinguishing feature brought to our notice by the ld. D.R., this ground by the assessee is allowed. 18. Grounds of appeal No. 2(a) 2(b) read as under:- 2(a) On the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bill, bill says ₹ 2.86 crores and actual total sale of 5th, 6th and 7th floor of Akruti Orion of ₹ 2.68 crores. 18.2 However, the A.O. was not convinced with the explanation given by the assessee. According to the A.O., the typographical error cannot be accepted since this error has been committed by both the brokers which is not possible. Rejecting the explanation given by the assessee the A.O. made addition of ₹ 18,11,484/- being the difference between ₹ 2,86,00,000 and ₹ 2,6788,516/-. 18.3 In appeal, the ld. CIT(A) upheld the action of the A.O. by holding as under: 6.3 The AR also took the without prejudice plea that the above transactions were in the nature of current account and not in the nature of loan or advance. Hence the same were not liable to be considered for the purpose of deemed dividend. In view of these submissions, it was claimed that the addition of Rs.13,34,412/- as deemed dividend ought to be deleted. 6.4 I have considered the facts of the issue as well as the written submissions made by the AR but do not find merit in them. The reliance placed by the AR on the decision in the case of Bombay Oil Industries i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rror is accepted, then also TDS figure @ 5.61% does not come to ₹ 17,680/-. Further, despite being given opportunity, the assessee never filed any document giving plausible explanation before the A.O. or the ld. CIT(A) to justify the difference. Even before us also, only a general statement was made which was made before the A.O. and ld. CIT(A). We, therefore, do not find any force in the argument of the ld. Counsel for the assessee that the matter should be sent to the file of the ld. CIT(A). Since the order of the ld. CIT(A) is a speaking one, therefore, under the facts and circumstances of the case, we do not find any infirmity in his order. Accordingly, the same is upheld. The grounds raised by the assessee are accordingly dismissed. 21. The assessee has also raised additional grounds which are as under:- 1. The learned CIT(A) has erred in not directing A.O. to grant deduction u/s 80IB(10) of the Act in respect of Maya Nagar Project which is a slum rehabilitation project approved by the CBDT. 2. The learned CIT(A) has erred in law and in fact in confirming the disallowance of deduction u/s 80-IB(10) of the Act in respect of Ashram Chawl Project which is a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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