Https://Hcservices.ecourts.gov.in/Hcservices v. M/S.astoria Leathers

THE HONOURABLE MRS. JUSTICE V.BHAVANI SUBBAROYAN TAX CASE APPEAL Nos.533 & 534 of 2018 & CMP.No.11130 of 2018(heard through video conferencing) The Commissioner of IncomeTax, Business Ward III(1),Chennai. ...Appellant in bothVs M/s.Astoria Leathers, Chennai-32. ...Respondent in both APPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 27.12.2017 made in ITA.Nos.2673and 2674/Mds/2014 on the file of the Income Tax AppellateTribunal, Chennai ‘C’ Bench respectively for the assessmentyears 2008-09 and 2010-11 aginst the common order dated30/07/2014 made in ITA No.73,74,75,77,79/13-14 (A)-V on the fileof the Commissioner of Income Tax (Appeals-V), Chennai for theAssessment year 2006-07, 2007-08, 2008-09, 2009-10, 2010-11. Against the order dated 20/03/2013 and 25/03/2013 made inGIR/PAN NO. on the file of the Income Tax Officer,Business Ward - III(1), Chennai for the Assessment year 2008-09,2010-11. Mrs.V.Pushpa, SC & Ms.S.Premalatha, SC These appeals, by the Revenue under Section 260A of theIncome Tax Act, 1961 (for short, the Act), are directed againstthe common order dated 27.12.2017 made in ITA.Nos.2673 and 2674/Mds/2014 on the file of the Income Tax Appellate Tribunal,Chennai ‘C’ Bench (for brevity, the Act) respectively for theassessment years 2008-09 and 2010-11. https://hcservices.ecourts.gov.in/hcservices/ 2. We have heard Mr.M.Swaminathan, learned SeniorStanding Counsel and Mrs.V.Pushpa and Ms.S.Premalatha, learnedStanding Counsel appearing for the appellant – Revenue andMr.A.S.Sriraman, learned counsel appearing for the respondent. 3. The appeals have been admitted on 23.8.2018 on thefollowing substantial question of law : “Whether the Income Tax AppellateTribunal was correct and justified indirecting the Assessing Officer to allowdeduction under Section 80IB(10) of theIncome Tax Act, 1961 to assessee land ownerwhen it had not incurred any expensestowards development or construction of thehousing project ?” 4. We find from the impugned order that the Tribunalremanded the matter to the Assessing Officer for a freshconsideration with a specific direction. We quote the relevantportion of the impugned order as hereunder : “It is not clear from the materialsavailable on record as to whether thedeveloper M/s.KGEYES Residency Pvt. Ltd. wasallowed to claim deduction of profits fromits share of 66% alone and if it is so,then, the assessee should be allowed toclaim deduction of similar profits and gainsof its share of 34%. Accordingly, theAssessing Officer is directed to verify theabove facts from the assessment order of thedeveloper M/s.KGEYES Residency Pvt. Ltd.,and decide the issue afresh in accordancewith law after allowing an opportunity ofbeing heard to the assessee. In case theassessee has incurred any expendituretowards land development as noticed by thelearned CIT(A) and the developer M/s.KGEYESResidency Pvt. Ltd., has claimed deductionunder Section 80IB(10) of the Act of onlyits share of 66%, then the assessee shouldbe allowed to claim deduction under Section80IB(10) of the Act of its share of 34%.Thus, the ground raised by the Revenue inboth the assessment years is allowed forstatistical purposes.” 5. From the observations/directions issued by the Tribunal,we are of the view that the Revenue should not be aggrieved bysuch a direction of the Tribunal. Nevertheless, the substantialquestion of law framed for consideration has to be answered. Toanswer the substantial question of law, we need not labour much,as an identical question was considered and decided by aDivision Bench of this Court, to which one of us (TSSJ) was aparty, in TCA.No.177 of 2018 vide judgment dated 30.1.2019[M/s.Bashyam Constructions Pvt. Ltd. Vs. DCIT]. In fact, thenature of transaction is also the same. After taking intoconsideration the decisions of this Court in the cases of (i)CIT Vs. Sanghvi & Doshi Enterprise [reported in (2013) 29Taxman.com 386], (ii) ITO Vs. Doshi Enterprise [reported in(2013) 55 Taxmann.com 500], (iii) CIT Vs. Ceebros PropertyDevelopment (P.) Ltd. [reported in (2014) 41 Taxmann.com 263],the decisions of the High Court of Gujarat in the cases of (i)CIT vs. Radhe Developers [reported in (2012) 17 Taxmann.com156], (ii) CIT vs. Moon Star Developers [reported in (2014) 88CCH 0211] and (iii) CIT vs. Prathama Developers [reported in(2013) 32 Taxmann.com 336], the decision of the Bombay HighCourt in the case of CIT vs. Cajetano Mario Pereira [reported in(2014) 88 CCH 0152] and the decision of the Hon'ble SupremeCourt in the case of CIT vs. Veena Developers [reported in(2015) 93 CCH 0184 ISCC], the substantial questions of lawframed therein were answered to the following effect : “14. It is interesting to note that inall these decisions, the Revenue placedreliance on the aspect of ownership as acriteria for grant of deduction underSection 80IB of the Act and submitted thatSection 80IB(10) contemplates grant ofdeduction and it being a deductionprovision, the same has to be complied inabsolute terms by the assessee. The Courtshave held that in a case of development, thedeveloper is also entitled to claimdeduction and ownership is not the criteria.Unfortunately, in the instant case, theRevenue took a reverse stand contrary to theconsistent stand taken by them before thisCourt and other High Courts, which wasrejected by the High courts and affirmed bythe Hon'ble Supreme Court...... 21. The correctness of the abovefinding was not considered by the Tribunaland the Tribunal merely stated that noexpenses were recorded in the P & L account.Therefore, the contention advanced by theRevenue in this regard is not tenable. Thatapart, a plain reading of Section 80IB(10)of the Act evidently makes it clear thatdeduction is available in a case where anundertaking develops and builds a housingproject. The Section clearly draws thedistinctionbetween'developing'and'building'. In the preceding paragraphs, wehave noted the factual position as could beculled out from the joint venture agreement,which clearly shows that the assessee is thedeveloper and M/s.ETA is the builder andmutualrightsandobligationsareinextricably linked with each other andundoubtedly, the project is a housingproject thereby, the assessee would beentitled to claim deduction under Section80IB (10) of the Act.” 6. Thus, following the above decision, the substantialquestion of law framed in these appeals is answered against theRevenue. Accordingly, the above tax case appeals are dismissed.We make it clear that the orders of remand by the Tribunal standconfirmed and the Assessing Officer shall scrupulously followthe directions issued by the Tribunal, which directed theAssessing Officer to verify the assessment order of thedeveloper and decide the issue afresh in accordance with lawafter affording an opportunity of being heard to the assessee.No costs. Consequently, the connected CMP is also dismissed. Sd/- Assistant Registrar //True Copy// RS To 1.The Income Tax Appellate Tribunal, Chennai 'C' Bench. 6. Thus, following the above decision, the substantialquestion of law framed in these appeals is answered against theRevenue. Accordingly, the above tax case appeals are dismissed.We make it clear that the orders of remand by the Tribunal standconfirmed and the Assessing Officer shall scrupulously followthe directions issued by the Tribunal, which directed theAssessing Officer to verify the assessment order of thedeveloper and decide the issue afresh in accordance with lawafter affording an opportunity of being heard to the assessee.No costs. Consequently, the connected CMP is also dismissed. Sd/- Assistant Registrar //True Copy// RS To 1.The Income Tax Appellate Tribunal, Chennai 'C' Bench. 2.The Commissioner of Income Tax(Appeals-V), Chennai. https://hcservices.ecourts.gov.in/hcservices/ 3.The Income Tax Officer, Business Ward-III(1), Chennai. RSV(CO)KKV/04/09/2020 TCA.Nos.533 & 534 of 2018and CMP.No.11130 of 2018