The Commissioner Of Income Tax – Ii, Pune v. M/S.brahma Builders

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.1658 OF 2012 The Commissioner of Income Tax – II, Pune..Appellant. Versus M/s.Brahma Builders..Respondent. Mr.Vimal Gupta, Senior Advocate i/by Ms.Padma Divakar for the appellant.None for the respondent. CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. DATE : 30[th] January 2013 P.C. : 1.In this appeal by the Revenue for assessment year 2004-2005, following re-framed question of law has been proposed for our consideration. “Whether on the facts and circumstances of the case, the Tribunal was justified in setting aside the order passed by the CIT under Section 263 of the Income Tax Act, 1961 ?” 2.The Commissioner of Income Tax has given four reasons for invoking jurisdiction under Section 263 of the Income Tax Act, 1961 ('Act' for short) and holding that the assessee is not entitled to the benefit under Section 80IB. The reasons for invoking jurisdiction under Section 263 of the Act as recorded in the impugned order are as follows : “(a)The CIT has held that the project “Brahma Aangan” consists 7562 sq.ft. Commercial area and therefore, it is not a residential project. The deduction u/s.80IB (10)is allowable only if the project is completely residential project.sq.ft. Commercial area and therefore, it is not a residential project. The deduction u/s.80IB (10)is allowable only if the project is completely residential project. (b)Even, the amendment u/s.80IB (10) introduced in the form of sub-clause (d) w.e.f. 1-4-2005 has limited the area for commercial use to the extent of 5% of the total built up area of 2000 sq.ft. whichever is less. The last commencement certificate of the project was obtained on 20-4-2005 and therefore, there is a violation of clause (d).clause (d) w.e.f. 1-4-2005 has limited the area for commercial use to the extent of 5% of the total built up area of 2000 sq.ft. whichever is less. The last commencement certificate of the project was obtained on 20-4-2005 and therefore, there is a violation of clause (d). (c)In building B4 and B5 the duplex flats are having the built up area of 1595 sq.ft. each. Thus, the built up area condition mentioned in sub-clause (c) of 80IB (10) that the flat should be below 1500 sq. ft. built up area, is violated. This area is calculated after including the terrace (built up area 1330 sq. ft and terrace 265 sq.ft.)of 1595 sq.ft. each. Thus, the built up area condition mentioned in sub-clause (c) of 80IB (10) that the flat should be below 1500 sq. ft. built up area, is violated. This area is calculated after including the terrace (built up area 1330 sq. ft and terrace 265 sq.ft.) (d)Along with the return, the assessee has not submitted separate P & L account and balance sheet for the project. Secondly, the form No.10CCB (audit report) is not attached with the P & L account and balance sheet of the project and it is blank in various columns which are pertaining to the deduction under Section 80IB (10) of the Act.”account and balance sheet for the project. Secondly, the form No.10CCB (audit report) is not attached with the P & L account and balance sheet of the project and it is blank in various columns which are pertaining to the deduction under Section 80IB (10) of the Act.” 3.So far as reasons (a) and (b) are concerned, counsel for the Revenue fairly states that the same are covered by the decision of this Court in the case of Brahma Associates reported in (2011) 333 ITR 289 (Bom) against the Revenue. Hence, reasons (a) and (b) do not survive. 4.So far as reason (c) is concerned, the Tribunal has given a finding of fact that the total area of the flats was less than 1500 square feet. Thus, this being a finding of fact reason (c) does not survive. 3.So far as reasons (a) and (b) are concerned, counsel for the Revenue fairly states that the same are covered by the decision of this Court in the case of Brahma Associates reported in (2011) 333 ITR 289 (Bom) against the Revenue. Hence, reasons (a) and (b) do not survive. 4.So far as reason (c) is concerned, the Tribunal has given a finding of fact that the total area of the flats was less than 1500 square feet. Thus, this being a finding of fact reason (c) does not survive. 5.So far as reason (d) is concerned, the Tribunal has recorded as a matter of fact that the Commissioner of Income Tax had in his notice nowhere mentioned about non-furnishing of audit report and thus was not justified in revising the assessment order. Further, the Tribunal held that as filing of an audit report is directory and not mandatory, the revision under Section 263 of the Act was not justified. This position has not been disputed by the Revenue. Accordingly, reason (d) does not survive. 6.For all the aforesaid reasons, no fault can be found with the order of the Tribunal in setting aside the order of the Commissioner of Income Tax passed under Section 263 of the Act. Accordingly, the appeal is dismissed with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)