$~S-1-4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% DECIDED ON: 19.07.2013
+ ITA NOS.210, 214, 215 & 250/2012
CIT ..... Appellant
Through: Mr. Sanjeev Rajpal, Sr. Standing
Counsel.
versus
ANSAL HOUSING AND CONSTRUCTION LTD. ..... Respondent
Through: Ms. Kavita Jha with Mr. Vaibhav
Kulkarni, Advocates.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.V. EASWAR
MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)
The following questions of law arise in these appeals for
consideration: -
In ITA 210, 214 & 215/2012
Did the ITAT fall into error in holding that the respondent was
entitled to the deduction under Section 80 (IB) of the Income Tax
Act, 1961; and
In ITA 250/2012
Was the assessee liable to pay income tax on the annual letting
value of the unsold flats owned by it under the head income from the
ITA-210, 214, 215 & 250/2012 Page 1
house property?
ITA NOS.210, 214 & 215/2012
1. The brief facts are that the appellant commenced development
and construction development and construction of housing projects,
somewhere in NOIDA, and claimed that it had started development
and constructions of housing projects in NOIDA after 13.09.1998.
The Assessing Officer was of the opinion that the materials on record
did not justify granting the appellant the benefit of Section 80IB in
view of the language of Section 80 ID (10). The Assessing Officer,
therefore, made a disallowance in respect of years 1999-2000,
2002-03 and 2003-04. The assessee carried the matter in appeal
successfully. In the meanwhile, in respect of the intervened
assessment years 2000-01, 2001-02, the Assessing Officer appears to
have accepted the assessee' contentions. These led to an action
under Section 203 by the Commissioner who invoked its revisional
powers. Eventually, that culminated in a common order dated
12.06.2009 of the ITAT itself. The relevant observations of the
ITAT upholding the assessee's contentions which have been noticed
in the impugned orders in these cases are extracted below: -
"17. Respectfully following the aforesaid three decisions, we
hold that the deduction to the assessee can be allowed with
respect to the units which did not exceed the statutory limit of
1000 sq. Ft. And the assessee would not be entitled to
reductions of the built up area in 5 houses in East End Loni and
6 houses in Avantika Aakriti, as referred to in paragraph 10 of
the order aforesaid. We order accordingly.
XXX XXX XXX
ITA-210, 214, 215 & 250/2012 Page 2
21. In view of the aforesaid two decisions, we are of the
opinion that deduction under section 80-IB (10) has been
rightly allowed on housing projects because the building plants
of the residential units were approved after 1.10.98 only and
the construction has to be deemed to have been commenced on
or after the date of approval itself.
22. It should not be lost sight that these are the revision
proceedings and in such proceedings the allowances of
deduction under section 80IB (10) to the assessee could not be
revised as the issue in any case, was debatable and one of the
possible views was taken by the assessing officer while granting
deduction to the assessee. It was also allowed by the CIT
(Appeals) in the succeeding assessment years viz. 2002-03 and
2003-04. The revision of impugned assessment orders as
sought to be made by the CIT, while exercising jurisdiction
under section 263, would in such a case be merely a difference
of opinion and hence not amenable to the revision jurisdiction
under section 263 of the Act, in view of Supreme Court decision
in the cases of Malabar Industrial Co. Ltd. v. CIT 243 ITR 83
(SC) as also later decision in CIT v. Max India Ltd. 295 ITR
282 (SC).
23. We hold therefore that CIT is not right in holding that
AO failed to make enquiries or to apply his mind and allowed
deduction under section 80IB (10) of the Act. We, therefore,
vacate his order and restore that of the AO. It is, however,
except for the construction found to be in excess built up area
over 1000 sq. ft. as aforesaid and in respect of which the
assessee would not entitled to deduction."
2. The Revenue carried the matter further in appeal to this Court
in respect of the said years 2000-01 and 2001-2002 by preferring ITA
480/2010, 485/2010 and 437/2011. By a judgment dated 24.09.2012,
the Revenue's contentions were rejected both as to the findings of the
Tribunal with regard to the tenability of invocation of Section 263 as
ITA-210, 214, 215 & 250/2012 Page 3
well as the merits. This is evident from the following extract of the
judgment of this Court for the said years dated 24.09.2012:
"12. The Tribunal was of opinion that merely because there was a
honest and bonafide difference of opinion between the assessee
and the Assessing Officer on the one hand and the CIT on the
other with regard to the interpretation to be placed on a provision
of law or there was a possibility of more than one reasonable view
of the statutory provision, it cannot be said that the assessment
was erroneous or prejudicial to the interest of the Revenue. In this
view of the matter, the Tribunal vacated the orders of the CIT
passed under Section 263 of the Act for both the years. It may be
added that the Tribunal placed reliance on the following
judgments of the Supreme Court:-
(1) Malabar Industries Co. Ltd. V/s. CIT (2000) 243ITR 83, G.M.
Mittal 263 ITR 255
(2) CIT Vs Max India Ltd. (SC) (2007) 295 ITR 282
13. The Tribunal however, observed that since no submissions
were made by the assessee as regard the disallowance under
Section 14A, the orders of the CIT on that issue had to be affirmed.
14. We are not persuaded to take a view different from the view
taken by the Tribunal. A clear finding was recorded by the
Tribunal that the assessee had filed the details and calculations
about the built-up area of the residential units.
It would be unreasonable to hold that the Assessing Officer
ignored those details. Moreover the statutory auditors had clearly
mentioned the dates of approval of the lay out plan of the
residential colonies. The Assessing Officer was thus made aware
of the dates on which the approvals were granted in respect of
each of the four housing projects. The more important aspect was
the applicability of clause (a) of Section 80IB(10). On this aspect
the Tribunal held that any construction carried out before the
receipt of necessary approvals would be unauthorized and could
not be recognized. It was found by the Tribunal that in any case
there was only site development by filling of pits, leveling of land,
ITA-210, 214, 215 & 250/2012 Page 4
construction of roads, wells, laying of sewerage and electricity
lines etc. Further there was no dispute regarding the date of
commencement of construction with respect to the projects,
namely, Golf Link-II and East End Loni. The Tribunal has found
that both these projects commenced after 1 st October, 1998. With
regard to the other two projects, namely, Golf Link-I and Avantika
Akruti, the Tribunal held that the date of commencement of
construction had to be reckoned from the date when the
construction of the building plan of each project was approved by
the concerned authority. On examination of the details of the
chronological events furnished by the assessee, it was held by the
Tribunal that the building plans of each house submitted by the
assessee were not sanctioned as such by the competent authority
before 1st October, 1998. They were rejected and time and again
modifications were proposed by the authority; finally the
approvals of the building plans were issued after 1st October,
1998, except for 26 houses in Avantika Akruti Project. The
Tribunal has also referred to certain orders of the Pune and
Bombay Benches of the Tribunal where the date of approval by the
competent authority was considered crucial to determine the date
of commencement of development or construction. This discussion
of the Tribunal shows that the determination of the question as to
when the undertaking commenced development and construction,
in the absence of any statutory prescription, has to be decided in a
pragmatic and reasonable way. It would have been an entirely
different issue had there been a statutory prescription of what
would be the date of commencement of construction or
development. It is certainly a debatable issue on which more than
one plausible view is reasonably possible and merely because the
Assessing Officer has taken one plausible view, it cannot be said
that the assessment is erroneous or prejudicial to the interest of
the Revenue.
This position stands well settled by the judgments of the Supreme
Court cited supra. The Tribunal applied the tests laid down in
these judgments to the case.
15. For the above reasons, we are of the view that no substantial
question of law arises for our consideration in ITA Nos.485/2010
ITA-210, 214, 215 & 250/2012 Page 5
& 480/2010. The orders of the Tribunal are accordingly upheld
and the appeals filed by the Revenue are dismissed."
3. In view of above observations which also indicates that this
Court was satisfied that approval of the building plans were issued
after 1.10.1998 except in respect of 26 houses in Avantika Aakruti
Project, this Court is not persuaded that any substantial question of
law arises and is not inclined to take a different view from the one
taken in ITA 480/2010, 485/2010 and 437/2011. The Revenue's
appeal so far as they urged this ground is insubstantial and, therefore,
rejected.
Point no.2
4. So far as the point no.2, i.e., whether the respondents could
have been assessed on the basis of ALV of the unsold flats, the Court
is of the view that in a previous decision dated 31.10.2012 passed in
ITA 18/1999 and connected matters - CIT v. Ansal Housing Leasing
Finance Ltd., the Court relying upon previous decision of the
Supreme Court answered an identical question of law in favour of the
Revenue holding that the assessee could have been assessed on the
basis of ALV of the unsold flats. This question - which arises in ITA
215/2012 for assessment year 2003-04 is accordingly answered in
favour of the Revenue and against the assessee.
5. In view of the above findings, ITA Nos.210 and 214/2012 are
dismissed. ITA 215/2012 is partly allowed but in the above terms.
ITA 250/2012
6. The sole question which arise in this case is identical to point
ITA-210, 214, 215 & 250/2012 Page 6
no.1 decided in ITA 210, 214 & 215/2012. The Tribunal had relied
upon its previous order dated 12.06.2009 as is evident from
paragraph-9 of the impugned order. For the reasons mentioned in the
order on aforesaid appeals, this Court affirms ITAT's order dated
9.9.2011. No substantial question of law arises. Consequently, ITA
250/2012 is dismissed.
7. ITA 210, 214, 215 & 250/2012 are disposed of in the above
terms.
S. RAVINDRA BHAT
(JUDGE)
R.V. EASWAR
(JUDGE)
JULY 19, 2013
/vks/
ITA-210, 214, 215 & 250/2012 Page 7
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