Case Law Details
Vishal Constructions Vs. ITO (ITAT Pune)
We note that in the present appeal the assessee claimed deduction Rs.18,80,000/- u/s. 80IB(10) of the Act. The AO held that the assessee has violated the provisions of section 80IB(10) of the Act as built up area of shops and commercial establishments exceeded 5000 sq. ft. For such violation the AO denied the deduction of Rs.18,80,000/- vide its order dated 27-12-2016. The CIT(A) confirmed the order of AO.
As noted above, the assessee sought pro-rata deduction in respect of shops and commercial establishments in ground No. 6. This Tribunal in assessee’s own case for A.Y. 2013-14 observed that the respondent revenue granting the deduction consistently on pro-rata basis from A.Y. 2009-10 onwards up to 2012-13 but, however, without there being any change in the facts relating to deduction u/s. 80IB(10), the respondent revenue denied the said deduction for A.Y. 2013-14. This Tribunal on the rule of consistency by placing reliance in the decision of Hon’ble High Court of Bombay in the case of Commissioner of Income Tax Vs. Paul Brothers reported in 216 ITR 548 held that the assessee is entitled to claim pro-rata deduction in respect of shops and commercial establishments having no change in the facts of the case. Therefore, the view taken by the Tribunal in A.Y. 2013-14 in ITA No. 831/PUN/2017 is applicable to the issue on hand and we hold that the assessee is entitled to claim pro-rata deduction on shops and commercial establishments for A.Y. 2014-15.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee against the order dated 20-07-2017 passed by the Commissioner of Income Tax (Appeals)-2, Aurangabad [„CIT(A)‟] for assessment year 2014-15.
2. The assessee raised ground Nos. 1 to 5 questioning the action of CIT(A) in confirming the order of AO in denying the deduction u/s. 80IB(10) of the Act. Further, ground No. 6 raised without prejudice to the ground Nos. 1 to 5 a deduction on pro-rata basis should have been allowed in the facts and circumstances of the case.
3. Heard both parties and perused the material available on record. We find that the assessee raised same set of grounds in assessee‟s own case in ITA No. 831/PUN/2017 for A.Y. 2013-14. Apart from the main grounds, the assessee also raised additional ground regarding the allowability of deduction on pro-rata basis wherein the ld. AR therein prayed to take up the additional ground as preliminary issue. Accordingly, the Tribunal taken up the additional ground as preliminary issue and allowed deduction u/s. 80IB(10) on pro-rata basis in respect of shops and commercial buildings. The relevant portion from paras 8 in ITA No. 831/PUN/2017 for A.Y. 2013-14 is reproduced here-in-below for ready reference :
“8. We note that the assessee claimed pro-rata deduction u/s. 80IB(10) for the year under consideration to an extent of Rs.70,59,208/- page No. 21 consisting of Form No. 10CCB for A.Y. 2013-14 and the computation of total income at page No. 3 supports the same. The Form No. 10CCB clearly shows that the date of commencement on 28-03-2007 and initial year for claiming deduction is A.Y. 2008-09. In Column No. 23 of the said Form No. 10CCB also shows the claim of pro-rata built up area of shops and other commercial establishments at 2225.58 sq. ft. out of 5000 sq. ft. Thus, it is clear the assessee claimed pro-rata deduction in respect of built up area of shops and other commercial establishments for the year under consideration.
9. Coming to the previous A.Y. 2012-13 the Form No. 10CCB is at page No. 44 of the Paper Book, wherein in Column No. 23 the assessee sought pro-rata deduction for built up area of shops and other commercial establishments at 2225.58 sq. Mtr. and there is no denial by the respondent revenue regarding the allowance of pro-rata deduction in respect of shops and other commercial establishments in the A.Y. 2012-13.
10. Further, the Form No. 10CCB for A.Y. 2011-12 is placed at page 65 wherein in Column NO. 23, the claim of pro-rata deduction for shops and other commercial establishments was claimed and it was allowed by the respondent revenue vide its order dated 17-02-2014 u/s. 143(3) of the Act. We note that the AO discussed the same in para 3.2 the pro-rata deduction on the basis of documentary evidences was allowed in terms of Form No. 10CCB. The ld. DR did not bring on record any finding contrary to the above.
11. Likewise the Form No. 10CCB for A.Y. 2010-11 and assessment order for A.Y. 2009-10 are placed at page Nos. 93 and 123, respectively wherein it clearly shows that the claim of assessee on pro-rata basis and the AO allowed the same respectively. Therefore, in our opinion as rightly pointed out by the ld. AR that the respondent revenue consistently allowing the deduction u/s. 80IB(10) of the Act from the date of initial assessment year and there was no reason shown by the respondent revenue for denial of such deduction in the year under consideration.
12. Coming to the decision of Hon’ble High Court of Bombay in the case of Paul Brothers (supra) wherein the Hon’ble High Court of Bombay was pleased to hold when there was no change in the facts which were in existence during the initial assessment year, the claim of exemption cannot be withdrawn. In the present case as discussed above, the fact remains undisputed there was no change in the facts of the case as compared to earlier years. Therefore, in our opinion the decision on the principle of consistency laid down by the Hon’ble High Court of Bombay is clearly applicable to the present case.
13. Regarding the order of this Tribunal as relied by the ld. AR in the case of M/s. Messung Systems (supra) we find the similar facts in the said case, this Tribunal while placing reliance on the decision of Hon’ble High Court of Bombay in the case of Paul Brothers (supra) held the assessee is entitled to claim deduction u/s. 80IB(10) of the Act when the deduction of earlier years has not been disturbed any of the authorities. The relevant portion of para 17 is reproduced here-in-below for better understanding :
“17. Accordingly, we hold that where the benefit of deduction was available for particular number of years, unless the same is withdrawn in the first year, it cannot be withdrawn for the subsequent years, particularly when there is no change in the facts. Applying the ratio laid down by the Hon’ble Bombay High Court in CIT Vs. Paul Brothers (supra), M/s. Direct Information Pvt. Ltd. Vs. ITO (supra) and subsequently in CIT Vs. Western Outdoor Interactive Pvt. Ltd. (supra), we hold that the assessee is entitled to the deduction claimed under section 80I of the Act in assessment year 1992-93, wherein the first year of claim of deduction was assessment year 1991-92 and same has not been disturbed by any of the authorities till date. The Assessing Officer is thus, directed to allow the said claim of assessee.”
14. In the light of the above observations with the Hon’ble High Court of Bombay and by this Tribunal, we hold that the respondent revenue could not bring on record there was change in the facts of the case in the year under consideration compared to the facts of earlier years in assessee’s own case, thereby we hold that the assessee is entitled to claim deduction u/s. 80IB(10) of the Act on pro-rata basis by following the rule of consistency. Therefore, the order of CIT(A) is not justified. Accordingly, the additional ground raised by the assessee is allowed.
15. In view of the our decision in additional ground of appeal raised by the assessee as preliminary issue is allowed, the main grounds of appeal becomes academic, hence, require no adjudication.”
4. We note that in the present appeal the assessee claimed deduction Rs.18,80,000/- u/s. 80IB(10) of the Act. The AO held that the assessee has violated the provisions of section 80IB(10) of the Act as built up area of shops and commercial establishments exceeded 5000 sq. ft. For such violation the AO denied the deduction of Rs.18,80,000/- vide its order dated 27-12-2016. The CIT(A) confirmed the order of AO.
5. As noted above, the assessee sought pro-rata deduction in respect of shops and commercial establishments in ground No. 6. This Tribunal in assessee’s own case for A.Y. 2013-14 observed that the respondent revenue granting the deduction consistently on pro-rata basis from A.Y. 2009-10 onwards up to 2012-13 but, however, without there being any change in the facts relating to deduction u/s. 80IB(10), the respondent revenue denied the said deduction for A.Y. 2013-14. This Tribunal on the rule of consistency by placing reliance in the decision of Hon’ble High Court of Bombay in the case of Commissioner of Income Tax Vs. Paul Brothers reported in 216 ITR 548 held that the assessee is entitled to claim pro-rata deduction in respect of shops and commercial establishments having no change in the facts of the case. Therefore, the view taken by the Tribunal in A.Y. 2013-14 in ITA No. 831/PUN/2017 is applicable to the issue on hand and we hold that the assessee is entitled to claim pro-rata deduction on shops and commercial establishments for A.Y. 2014-15. Accordingly, the order of CIT(A) is set aside and ground No. 6 raised by the assessee is allowed.
6. In view of our decision in ground No. 6 in the above mentioned para, the ground Nos. 1 to 5 becomes academic, hence, no adjudication is required.
7. In the result, the appeal of assessee is allowed.
Order pronounced in the open court on 16th September, 2020.
