Commissioner Of Income Tax Non-Corporate Ward-10(1)Chennai v. M/S.anjali Foundations,25 Barnaby Road, Kilpauk, Chennai 600 010

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.3.2019 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE C.V.KARTHIKEYAN Tax Case Appeal No.231 of 2019 Commissioner of Income Tax Non-Corporate Ward-10(1)Chennai. .. Appellant Vs. M/s.Anjali Foundations,25 Barnaby Road, Kilpauk, Chennai 600 010. PAN: AANFA 8459 L.. Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax AppellateTribunal, Madras 'A' Bench, Chennai, dated 8.10.2018 made in ITANo.1211/Chny/2018.Against the order of the Income Tax Officer, Non CorporateWard 10(1), Chennai 34 dated 14.09.2017 and made in PANNo.AANFA8459L for the Assessment Year 2009-10. Against the order of the Principal Commissioner of IncomeTax, Chennai 3, chennai dated 29.03.2017 and made inC.No.3033/263/PAI7-3/2016-17 for the Assessment Year 2009-10. Against the order of the Inocme Tax Officer, NEW10(1),Chennai 34, dated 30.03.2015 and made in PAN No. forthe Assessment Year 2009-10. Against the order of the Income Tax(III) (i/c), Chennaidated 28.03.2014 and made in C.No.3033(26)/CIT-III/263/2013-14for the Assessment Year 2009-10. Against the order of the Income Tax Officer, Business Ward-XIII(1), Chennai 34 dated 29.12.2011 and made in PANNo.AANFA8459L for the Assessment Year 2009-10. For Appellant : Mr.M.Swaminathan Senior Standing Counsel assisted by N/s.V.Pushpa https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T (Delivered by DR.VINEET KOTHARI,J) The Revenue has filed this Tax Case (Appeal) underSection 260-A of the Income Tax Act by raising the followingpurported substantial questions of law arising from the orderpassed by the Income Tax Appellate Tribunal on 8.10.2018 for theAssessment Year 2009-2010:- "i) Whether the Tribunal was right in quashingthe order under Section 263 by holding that itis purely on change of opinion?ii) Whether the Tribunal was justified inholding that the order under Section 263 ofthe Act passed by the CIT is purely based onchange of opinion when the CIT has clearlybrought out the facts not considered by theAssessingOfficerwhileallowingthededuction?" 2. Learned Senior Standing Counsel for the Revenue,Mr.M.Swaminathan contended that the Assessee in the present caseM/s.Anjali Foundations was only the land owner which gave theland to its Joint Venture Partner M/s.Narendra Properties Ltd.,which constructed the building on the said land and therefore,the benefit of deduction under Section 80IB(10) of the Act wasavailable only to the said Joint Venture Partner M/s.NarendraProperties Ltd. and not to the land owner M/s.AnjaliFoundations and since the Assessing Authority has granted thesaid benefit to the present land owner and therefore,Commissioner of Income Tax was justified in revising that orderunder Section 263 of the Act and denying the said benefit to thepresent Assessee, the landowner M/s.Anjali Foundations. 3. Section 80IB(10) of the Act is quoted below for readyreference:- "(10) The amount of deduction in the case of anundertaking developing and building housingprojects approved before the 31st day of March,2008 by a local authority shall be hundred percent of the profits derived in the previous yearrelevant to any assessment year from such housingproject if,— (a) such undertaking has commenced or commencesdevelopment and construction of the housingproject on or after the 1st day of October, 1998and completes such construction,— (i) in a case where a housing project has beenapproved by the local authority before the 1st day of April, 2004, on or before the 31st day ofMarch, 2008; (ii) in a case where a housing project has been,or, is approved by the local authority on orafter the 1st day of April, 2004 but not laterthan the 31st day of March, 2005, within fouryears from the end of the financial year in whichthe housing project is approved by the localauthority; (i) in a case where a housing project has beenapproved by the local authority before the 1st day of April, 2004, on or before the 31st day ofMarch, 2008; (ii) in a case where a housing project has been,or, is approved by the local authority on orafter the 1st day of April, 2004 but not laterthan the 31st day of March, 2005, within fouryears from the end of the financial year in whichthe housing project is approved by the localauthority; (iii) in a case where a housing project has beenapproved by the local authority on or after the1st day of April, 2005, within five years fromthe end of the financial year in which thehousing project is approved by the localauthority. Explanation.—For the purposes of this clause,— (i) in a case where the approval in respect ofthe housing project is obtained more than once,such housing project shall be deemed to have beenapproved on the date on which the building planof such housing project is first approved by thelocal authority; (ii) the date of completion of construction ofthe housing project shall be taken to be the dateon which the completion certificate in respect ofsuch housing project is issued by the localauthority; (b) the project is on the size of a plot of landwhich has a minimum area of one acre: Provided that nothing contained in clause (a) orclause (b) shall apply to a housing projectcarried out in accordance with a scheme framed bythe Central Government or a State Government forreconstruction or redevelopment of existingbuildings in areas declared to be slum areasunder any law for the time being in force andsuch scheme is notified by the Board in thisbehalf;"4. Having hearing the learned counsel for the Revenue, weare satisfied that there is nothing in Section 80IB(10) of theAct to deny the benefit of Deduction to the land owner also, whois equally a partner in the "development" of IndustrialUndertaking other than the Infrastructure DevelopmentUndertaking. Without the land, obviously, the construction ofbuilding cannot be undertaken and therefore, the land owner isan integral part of the development of the Buildings. It isconsidered to be an Industrial Undertaking other thanInfrastructure Development in view of the said provision.Merely because the land owner does not undertake theconstruction work himself, the land owner cannot be excluded from the ambit and scope of Section 80IB(10) of the Act. 5. The Tribunal has, therefore, has by citing its earlierdecision in the case of Sri Lakshmi Brick Industries, dated22.11.2012 wherein such benefit was allowed to the extent of1/2 to both the land owner and the developer who constructed thebuilding in question, has rightly given the said benefit to theland owner, the present Assessee before us and has rightly setaside the order passed by the Commissioner of Income Tax underSection 263 of the Act. The relevant portion of finding of theTribunal is quoted below for ready reference:- from the ambit and scope of Section 80IB(10) of the Act. 5. The Tribunal has, therefore, has by citing its earlierdecision in the case of Sri Lakshmi Brick Industries, dated22.11.2012 wherein such benefit was allowed to the extent of1/2 to both the land owner and the developer who constructed thebuilding in question, has rightly given the said benefit to theland owner, the present Assessee before us and has rightly setaside the order passed by the Commissioner of Income Tax underSection 263 of the Act. The relevant portion of finding of theTribunal is quoted below for ready reference:- "We have considered the rival submissions. At theoutset, it is to be appreciated that the order ofassessment can be revised when both the conditionsare met, first being the order is erroneous, andthe second being the order is prejudicial to theinterests of the Revenue. The view of the Revenueseems to be any order granting deduction to anassessee is prejudicial to the interest of theRevenue. We are not in agreement with this view,in so far as, if the Act provides for granting aparticular benefit or deduction to an assessee,the granting of such deduction or benefit to theassessee cannot be deemed as prejudicial to theinterest of the Revenue. One has to take out ofone's mind that the granting of statutorydeduction is an erroneous order prejudicial to theinterests of the Revenue. The issue of the orderbeing erroneous however needs to be shown. Just aclaim that the order is an erroneous would notmake an order erroneous. What is the error wouldhave to be specifically pointed out. In thepresent case, the Principal Commissioner of IncomeTax has raised the issues that the claim ofdeduction under Section 80-IB(10) has been made byboth the land owner, being the assessee herein andthe Joint Venture Partner, being M/s.NarendraProperties Ltd. The assessee has categoricallybrought to the attention of the PrincipalCommissioner of Income Tax, in response to show-cause notice that the decision of the Tribunalvide order dated 22.11.2012 in the case of SriLakshmi Brick Industries has dealt with this issueproposed in the revision order and the Bench hascategorically concluded in paras 9 and 10 that theland owner under similar circumstances would beentitled for the benefit of deduction underSection 80-IB(10) of the Act in the computationof the taxable total income. This view has been clearly expressed by the Appellate Authority andthe learned Assessing Officer has in the course ofassessment followed such view expressed by theAppellate Authority, when granting the assesseebenefit of deduction under Section 80-IB of theAct. Thus clearly the revision as done by theCommissioner of Income Tax under Section 263 ofthe Act is based exclusively on change of opinion,which is not permissible, when passing a revisionunder Section 263 of the Act. The Order underSection 263 of the Act is based purely on changeof opinion and the same being impermissible underthe provisions of the Section 263, the order dated29.3.2017 passed by the Principal Commissioner ofIncome Tax under Section 263 of the Act in thecase of the assessee herein stands quashed." 6. We, therefore, do not find any substantial question oflaw to be arising in this Appeal filed by the Revenue and it isdevoid of merit and accordingly, it is dismissed. No costs.Copy of this judgment be sent to the Respondent/Assesseeforthwith. Sd/- Assistant Registrar(Insp.Cell) //True Copy// Sub Assistant Registrar ssk To 1.The Commissioner of Income Tax Non-Corporate Ward-10(1) Chennai. 2. The Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai 3. The Income Tax Officer, Non-Corporate Ward-10(1) Chennai. 4. The Principal Commissioner of Income Tax, Chennai -3, Chennai. 5. The Income Tax-III(i/c),Chennai. 6. The Income Tax Officer,Business Ward-XIII(i),Chennai 34.Business Ward-XIII(i),Chennai 34. +1 cc to Mr.M.Swaminathan, Advocate, Sr.No. 24391 6. We, therefore, do not find any substantial question oflaw to be arising in this Appeal filed by the Revenue and it isdevoid of merit and accordingly, it is dismissed. No costs.Copy of this judgment be sent to the Respondent/Assesseeforthwith. Sd/- Assistant Registrar(Insp.Cell) //True Copy// Sub Assistant Registrar ssk To 1.The Commissioner of Income Tax Non-Corporate Ward-10(1) Chennai. 2. The Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai 3. The Income Tax Officer, Non-Corporate Ward-10(1) Chennai. 4. The Principal Commissioner of Income Tax, Chennai -3, Chennai. 5. The Income Tax-III(i/c),Chennai. 6. The Income Tax Officer,Business Ward-XIII(i),Chennai 34.Business Ward-XIII(i),Chennai 34. +1 cc to Mr.M.Swaminathan, Advocate, Sr.No. 24391 T.C.(A) No.231 of 2019 SV(CO)CSL/01.06.2019