The Pr. Commissioner Of Income Tax, Nagpur-1 v. M/S. Swapnashilp Developers) And

2410itl25.16 & 26.16 1/5 IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH : NAGPUR INCOME TAX APPEAL NO.25 OF 2016 (The Pr. Commissioner of Income Tax, Nagpur-1 vs. M/s. Swapnashilp Developers) AND INCOME TAX APPEAL NO.26 OF 2016 (The Pr. Commissioner of Income Tax, Nagpur-1 vs. M/s. Swapnashilp Developers) ______________________________________________________________________________ Office Notes, Office Memoranda ofCoram, appearances, Court's orders Court's or Judge's ordersor directions and Registrar's orders. Shri Anand Parchure, Advocate with Shri B. Mohata,Advocate for appellant. Shri K.P. Dewani, Advocate for respondent. ------- CORAM: SMT. VASANTI A NAIK AND KUM. INDIRA JAIN, JJ. DATED : OCTOBER 24, 2016 Since the questions involved in these IncomeTax Appeals are identical and since the appeals pertainto the eligibility of the assessee for deduction underSection 80IB(10) of the Income Tax Act, 1961 for twoconsecutive assessment years, they are heard togetherand are decided by this common order. By these appeals, the appellant – Revenuechallenges the concurrent orders of the Commissioner ofIncome Tax (Appeals) and the Income Tax AppellateTribunal holding that the respondent assessee waseligible for deduction under Section 80IB (10) of theIncome Tax Act, 1961. The respondent assessee is dealing in realestate and develops housing projects. For the assessmentyear 2009-10, the assessee had computed the net profit 2/5 at Rs.37,79,941/- and had claimed deduction underSection 80IB (10) of the Act. Similarly, for theassessment year 2010-11, the net profit computed bythe assessee was Rs.1,60,61,384/- and deduction underSection 80-IB(10) of the Act was claimed atRs.1,55,03,286/-. An enquiry was conducted in theclaim of the assessee for deduction. The assesseeproduced the relevant documents including the copies ofthe development agreement, the sanctioned plan and thepermission from the Local Authority before the AssessingOfficer. The Assessing Officer held that the assessee wasnot entitled to claim the deduction under Section80IB(10) of the Act. According to the Assessing Officer,the provisions of Section 80IB(10) of the Act were notcomplied with by the assessee as the assessee wasinitially the owner of few plots and subsequently hadpurchased some plots from their owners and thedevelopment sanction was not in respect of one acre ofplot. According to the Assessing Officer, the assesseehad not submitted the relevant documents for provingthat the approval was granted by the Gram Panchayat,Besa for the development of one acre of plot. Being aggrieved by the orders of theAssessing Officer, the assessee filed two separate appealsbefore the Commissioner of Income Tax (Appeals). TheCommissioner of Income Tax (Appeals) allowed theappeals filed by the assessee and held that the assesseewas entitled for deduction under Section 80IB(10) of theAct. 3/5 Being aggrieved by the orders of theCommissioner of Income Tax (Appeals), the appellant –Revenue filed two separate appeals before the IncomeTax Appellate Tribunal that were dismissed by the orderdated 3/9/2015. The orders of the Income TaxAppellate Tribunal, as also the orders of theCommissioner of Income Tax (Appeals) are challengedby the Revenue in these appeals. Being aggrieved by the orders of theAssessing Officer, the assessee filed two separate appealsbefore the Commissioner of Income Tax (Appeals). TheCommissioner of Income Tax (Appeals) allowed theappeals filed by the assessee and held that the assesseewas entitled for deduction under Section 80IB(10) of theAct. 3/5 Being aggrieved by the orders of theCommissioner of Income Tax (Appeals), the appellant –Revenue filed two separate appeals before the IncomeTax Appellate Tribunal that were dismissed by the orderdated 3/9/2015. The orders of the Income TaxAppellate Tribunal, as also the orders of theCommissioner of Income Tax (Appeals) are challengedby the Revenue in these appeals. On hearing the learned Counsel for theparties and on a perusal of the orders of the Income TaxAppellate Tribunal and the Commissioner of Income Tax(Appeals), it appears that a clear finding of fact isrecorded by both the Authorities that the GramPanchayat – Local Authority had granted the sanction forconstruction and development of more than one acre ofplot and separate permissions were not granted by theGram Panchayat for construction and development infavour of the Vendors - owners, from whom the assesseehad purchased the plots, before securing the permissionfrom the Local Authority, as required, for claimingdeduction under Section 80-IB (10) of the Act. Both theAuthorities have recorded a finding that the assessee hadsatisfied the Authorities that the permission for thehousing project was in respect of more than one acre ofplot and the housing project was completed within thetime specified by the provisions of Section 80IB(10) ofthe Act. While holding so, both the Authorities haveconsidered the documents tendered by the assesseebefore the Assessing Officer as also the record of Gram 4/5 Panchayat, Besa. The Authorities have further held thatGram Panchayat, Besa was the Local Authority forgranting the sanction or permission for the developmentof the housing project. According to both theAuthorities, the conditions that were required to besatisfied for seeking deduction under the provisions ofSection 80IB (10) of the Act were satisfied in the case ofthe assessee and, therefore, the Assessing Officer hadcommitted an error in holding that the assessee was notentitled to deduction under the said provision. We find that the findings recorded by theIncome Tax Appellate Tribunal and the Commissioner ofIncome Tax (Appeals) are based on a properappreciation of the material on record and they do notgive rise to any substantial question of law. Thesubmission made on behalf of the appellant – Revenuethat in similar matters in respect of other developmentprojects, this Court has admitted the appeals on twosubstantial questions of law and, therefore, these appealsshould be admitted is not well founded. We haveperused Income Tax Appeal Nos. 16/2016, 17/2016 and20/2010. In the said appeals, it was the case of theRevenue that there was no permission from the LocalAuthority for the development of one acre of plot andseparate permissions were secured for construction ofhouses of individual plot owners. Also, in those appealsit was the case of the Revenue that the housing projectwas not completed within the time prescribed underSection 80IB(10) of the Act. Such is not the case here.In the present matters, both the Authorities have concurrently recorded a finding of fact that thedevelopment of the housing project was completedwithin the time prescribed under Section 80IB(10) of theAct. In the admitted appeals, though it was sought to becanvassed on behalf of the Revenue that GramPanchayat, Besa was not the `local authority', asubstantial question of law was not framed in thatregard. We further find from a reading of the judgmentin the case of Commissioner of Income Tax vs.Cajetano Mario Pereira, reported in 2014 (88) CCH152, that this Court had considered the permission –approval granted by the Village Panchayat for thehousing project to be as one granted by the `localauthority' in accordance with the provisions of Section80IB(10) of the Act. Since no substantial question of law arises inthese appeals, the appeals are dismissed with no order asto costs. JUDGE JUDGE