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30-10-2019, Shivam Enterprises, Section 263, 80IB(10), Tribunal Mumbai

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1 week 4 days ago #11272 by amit
Section - 263, 80IB(10), 254
Order Date - 30-10.2019
Favouring - Revenue
Court - Tribunal Mumbai
Appellant - Shivam Enterprises
Respondent - PCIT
Justice - SAKTIJIT DEY JM & N.K.PRADHAN AM
Citation - 1119Taxpundit13
Appeal No. - ITA no.2789/Mum./2018
Asstt. Year - 2007–08

Order

PER : SAKTIJIT DEY, J.M.

The captioned appeal by the assessee is directed against the order dated 16th March 2018 of learned Principal Commissioner of Income Tax (PCIT)–32, Mumbai, passed under section 263 of Income Tax Act (in short “Act”) for the assessment year 2007–08.

2. Briefly the facts are, the assessee hitherto is a partnership firm and is carrying on business of building housing projects. For the assessment under dispute assessee filed its return of income on 28.10.2007 declaring nil income after claiming deduction under section 80IB(10) of the Act for an amount of `. 63,80,690/–. In course of assessment proceedings, the Assessing Officer (AO) while verifying assessee’s claim of deduction under section 80IB of the Act noticed that the housing project was approved by the local authority on 06.09.1991. Subsequently, the date of approval was amended to 03.10.2005. Noticing the above, the Assessing Officer called upon the assessee to justify its claim of deduction, since according to him, only if the housing project is approved and is commenced after 1.10.1998, it will be eligible for deduction under section 80IB(10). In response, it was submitted by the assessee, though, the approval by the CIDCO was vide commencement certificate dated 06.09.1991 however, subsequently, it was revalidated on 03.10.2005. Thus, it was submitted, since, the approval for housing project was granted on or after 01.10.1998, it would be eligible to claim deduction under section 80IB(10). The Assessing Officer, however was not convinced with the submissions of the assessee. Referring to explanation(i) to section 80IB(10) he observed, the date of first approval of the housing project has to be reckoned as the date of approval in respect of housing project where there is more than one approval. Based on the aforesaid reasoning the Assessing Officer ultimately held that since, the housing project was approved by the local authority prior to 01.10.1998, the assessee would not be eligible for claiming deduction under section80IB(10). Accordingly, he completed the assessment disallowing assessee’s claim of deduction under the aforesaid provision. Being aggrieved, assessee preferred appeal before the first appellate authority. After considering the submission of the assessee learned Commissioner (Appeals) allowed assessee’s claim of deduction. Challenging the aforesaid order of learned Commissioner (Appeals), the revenue came in appeal before the Tribunal. While disposing of the appeal filed by the revenue, the Tribunal in ITA.No.4765/Mum/2010, dated 25/03/2015, restored the issue to the Assessing Officer for re–adjudication with certain directions. In pursuance to the directions of the Tribunal, the Assessing Officer took up the assessment proceedings again and ultimately passed the assessment order on 29/12/2016 under section 143(3) r.w.s. 254 of the Act, allowing assessee’s claim of deduction under section 80IB(10) of the Act. After completion of the assessment as aforesaid, ld. PCIT called for and examined the assessment records of the assessee and upon such examination he was of the view that the Assessing Officer has not implemented /carried out the specific directions given by the Tribunal. He observed, the Assessing Officer did not call for the necessary details and documentary evidences from the assessee to prove that the housing project, in respect of which deduction under section 80IB(10) was claimed commenced after 01/10/1998 and completed before 31/03/2005. Thus, he formed a prima facie opinion that the assessment order passed is erroneous and prejudicial to the interest of revenue. Accordingly, he issued a show–cause notice under
section 263 of the Act, calling upon the assessee to explain why the assessment order should not be revised. In response to the show– cause notice the assessee appeared and made submissions objecting to the initiation of proceeding under section 263 of the Act and contended that assessment order passed cannot be held to be erroneous and prejudice to the interest of the revenue as the deduction claimed under section 80IB(10) was allowed after dueverification by the Assessing Officer. However, learned PCIT did not find merit in the submissions of the assessee. He was of the view that the Assessing Officer without carrying out the directions of the Tribunal and without making proper enquiry on the issue has passed the assessment order allowing assessee’s claim of deduction under section 80IB(10) of the Act. Thus, he held that the assessment order is erroneous and prejudicial to the interest of the revenue. As regards the merits of assessee’s claim of deduction under section 80IB(10) of the Act, he observed that the commencement certificate from the local authority for the housing project was obtained on 06/09/1991 and later on the land owner received further commencement certificate

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