Itxa/400/2012 Of The Commissioner Of Income Tax -15 v. M/S. Arcade Bhoomi Enterprises

kps IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.400 OF 2012 The Commissioner of Income Tax-15.-Versus-M/s Arcade Bhoomi Enterprises. ..Appellant ..Respondent ........... Mr.A.R.Malhotra, for the Appellant.Mr.A.K.Jasani, for the Respondent. ........... CORAM: S.C. DHARMADHIKARIAND B.P. COLABAWALLA, JJ. DATE :- 27[th] June, 2014 P.C.: 1We have heard Mr.Malhotra, learned counsel appearing for the Appellant/ Revenue.2Mr.Malhotra submits that the Income Tax Appellate Tribunal's findings would raise two substantial questions of law which have been formulated by the Revenue at page 7 of the paper book. They pertain to the allowability or permissibility of deductions under Section 80IB(10) of the Income Tax Act, 1961. In the submission of Mr.Malhotra, the Tribunal did not take into consideration at all the fact that some of flats amalgamated by the Assessee into one unit were exceeding 1000 sq.ft.. This is in violation of the provisions and particularly clause (c) of Section 80IB(10) of the Income Tax Act, 1961 as it stood then. Further, the Tribunal's order is perverse because it was incumbent upon it to take into consideration the statements given by the Allottee of flats that before possession was handed over to them it is the Assessee who has amalgamated the flats into one unit and this exceeded the area to more than the permissible limit, namely, 1000 sq.ft.. 3We have with the assistance of Mr.Malhotra and and Mr.Jasani perused the orders passed by the Income Tax Appellate Tribunal and the Commissioner of Income Tax (Appeals). In these two concurrent orders and particularly in that of the Commissioner of Income Tax (Appeals) a detailed reference is made to the facts. It is common ground that a Development Agreement enabled the Assessee to purchase the development rights for two plots of land. They were purchased and thereafter, the rights under the distinct development agreement were combined. The plots were thus amalgamated. There were two projects undertaken and both for construction of residential units. That is not disputed. The project was entitled “Bhoomi Arkade”. The approval to the building plan in respect of Building No.2 was obtained on 09.01.2004. The commencement certificate was issued to the Assessee on 30.01.2004. While it is true that the second project was also contemplated, but at the relevant time it was not started. The return of income declaring the income at Rs.11,90,145/- was filed on 30.10.2006 and the deductions under Section 80IB(10) to the tune of Rs.6,06,34,943/- were claimed in the return of income. The Income Tax Officer conducted the survey at the business premises and recorded the statements of those connected with the project, as also, some flat purchasers. In the statements recorded, there is clear reference to purchase of more than one flat in the name of family members. These flats were purchased from the Assessee. The Assessee sold only one flat, but it was stated that the Assessee agreed to combine two flats into one. Some of purchasers stated that the area of land admeasures 1300 sq.ft. and more. However, the statements of persons connected with the project were recorded on 20.02.2008 and 07.03.2008 and which indicated that the flats were constructed separately and the area of each flat did not exceed 1000 sq.ft.. The letter was given by the person connected with the project to the Assessing Officer which indicated that the flats were amalgamated after the possession is taken and at the request of the flat purchasers. The certificate from the Architect certifying the built-up area was also forwarded. Initially the Assessee agreed to pay the tax on the combined flats, but later on this admission was withdrawn and he reiterated that the built-up area of each flat and even combined flat does not exceed 1000 sq.ft.. persons connected with the project were recorded on 20.02.2008 and 07.03.2008 and which indicated that the flats were constructed separately and the area of each flat did not exceed 1000 sq.ft.. The letter was given by the person connected with the project to the Assessing Officer which indicated that the flats were amalgamated after the possession is taken and at the request of the flat purchasers. The certificate from the Architect certifying the built-up area was also forwarded. Initially the Assessee agreed to pay the tax on the combined flats, but later on this admission was withdrawn and he reiterated that the built-up area of each flat and even combined flat does not exceed 1000 sq.ft.. 4Mr.Malhotra submits that when the Assessee himself voluntarily comes forward and states that he would make the payment on the footing that the size or area of flat exceeds the permissible limit, then, that is indication that he has doubt as to whether he is entitled to deduction. 5We are unable to agree because the Commissioner of Income Tax (Appeals) and the Tribunal both scrutinized all relevant materials including the project documents. They also found that the project was completed and the occupation certificate was received. Thus, the Assessee fulfills the terms and conditions. It is very clear that the amalgamation of flats is not an act attributable to the Assessee. The flat purchasers have entered into separate agreements, but combined the flats after some of them were put in possession. Such flats and even others do not exceed the area, is the finding of fact. The Commissioner of Income Tax (Appeals) has adverted to all this material and in his detailed order. He has also made reference to the act of those purchasing and combining the flats/ units. In such circumstances the Tribunal committed no error in confirming the order of the Commissioner of Income Tax (Appeals) and particularly his findings which are recorded in paragraphs 7.3 and 7.4 of the order. 6We need not go into any larger question and as urged before us inasmuch as even if the Tribunal had not followed the ratio in the order dated 29.07.2011 passed by the Tribunal itself in the case of Emgeen Holdings Private Limited (now Windsor Realty Private Limited) v/s Deputy Commissioner of Income Tax in ITA Nos.3594 & 3595/Mum/2009 and ITA Nos.3647 & 3648/Mum/2009, still the Tribunal could have reached the same conclusion bearing in mind the facts peculiar to the present Assessee. Therefore, without making any observations on the larger question or controversy that we are of the opinion that the concurrent findings do not suffer from any perversity nor can they be termed as vitiated by any error of law apparent on the face of record. In these circumstances that we are of the opinion that the Appeal cannot be entertained. It does not raise any substantial question of law. It is, accordingly, dismissed. There will be no order as to costs. (B.P. COLABAWALLA, J.) (S.C. DHARMADHIKARI, J.)