ITA No. 560/D/2013 & 769/D/2013
Asstt.Year: 2009-10, 2008-09
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES `B' NEW DELHI
BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER
AND
SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER
ITA NO. 560/DEL/2013
ASSTT.YEAR: 2009-10
ITA NO. 769/DEL/2013
ASSTT.YEAR: 2008-09
DCIT, vs CHD Developers Ltd.,
Circle-3(1), 11, Bhikaji Cama Place,
New Delhi. New Delhi-110015
C.O. No. 76/Del/2013
(IN ITA NO. 560/DEL/2013)
ASSTT.YEAR: 2009-10
C.O. No. 77/Del/2013
(IN ITA NO. 769/DEL/2013)
ASSTT.YEAR: 2008-09
CHD Developers Ltd., vs DCIT, Circle 3(1),
New Delhi. New Delhi.
(Appellant) (Respondent)
Appellant by: Shri Kapil Goel Adv.
Respondent by: Smt. Parwinder Kaur, Sr. DR
O R D E R
PER CHANDRAMOHAN GARG, J.M.
The above captioned appeals as wells respective Cross Objections have
been preferred against the order of the CIT(A)-VI, New Delhi dated 02.11.2012
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Asstt.Year: 2009-10, 2008-09
in Appeal No. 199/10-11 and 137/11-12 for AY 2008-09 and 2009-10
respectively .
2. We note that it is apparent from the record that the grounds raised by the
revenue in both the appeals are similar except quantum of addition. The
grounds raised by the revenue in ITA No. 769/Del/2013 (for AY 2008-09) read
as under:-
"1. Whether the Ld. CIT(A) has erred on facts and in law in
deleting the addition made by the AO on account of deduction
u/s 80lB amounting to Rs. 2,94,36,539/-
(a) The assessee has violated the area restriction of 1500 sq. ft.
If even one residential unit violates this condition the entire
project will not be eligible for deduction u/s 801 B.
(b) Assessee has not furnished audit report u/s 10CCB despite
specific requirements as per section 801A(7) of the LT. Act,
1961 which is also applicable to section 801B.
(c) The assessee has not furnished any completion certificate
from the competent authority. In place of filing the completion
certificate from the local authority.
02. Whether the Ld. CIT (A) has erred in law and on facts in
deleting the addition made on account w2rong claim of
depreciation on computer accessories and peripherals
amounting to Rs. 19,990/- ignoring the facts that only the
computers and computer software are eligible for depreciation
of 60% and the same cannot be extended to computer
accessories and peripherals."
3. Briefly stated the facts giving rise to these appeals and Cos are that the
assessee company is engaged in the business of hospitality and real estate. The
assessee company filed its return of income and subsequently, the case was
selected for scrutiny. During the course of assessment, the AO noted that the
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Asstt.Year: 2009-10, 2008-09
appellant company has claimed deduction u/s 80IB of the Income Tax Act,
1961 (for short the Act) amounting to Rs.2,94,36,539/- in AY 2008-09 and
Rs.31,54,753 in AY 2009-10 in respect of its housing project at Sri Krishna
Lok, Vrindavan, Mathura, UP. During the course of assessment, AO further
noted that the project of the assessee viz. Sri Krishna Lok was having area of
less than 1500 sq. Ft. The AO took a view that even if one residential unit
violates prescribed condition, the entire project will not be eligible for deduction
u/s 80IB. The AO also observed that the assessee had not furnished the audit
report u/s 10CCB of the Act despite specific requirement as per section 80IA(7)
of the Act which also applied to section 80IB of the Act. The AO also noticed
that the assessee company failed to furnish any completion certificate issued by
the competent authority and the AO disallowed the entire aforesaid claim of
deduction u/s 80IB of the Act and added the same to the income of the assessee.
The AO also made addition of Rs.19,990 and Rs.12915 respectively in both the
assessment years on account of excess claim of computer depreciation.
4. Being aggrieved by the above assessment order, the assessee preferred an
appeal before the CIT(A) which was allowed on both the above issues. Now,
the aggrieved revenue is before this Tribunal in this second appeal with the
grounds as reproduced hereinabove.
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Asstt.Year: 2009-10, 2008-09
Ground no.1
5. Apropos ground no. 1, ld. DR submitted that the CIT(A) has erred in fact
and on law in deleting the addition on account of deduction u/s 80IB if the Act
because the assessee has violated the area restriction of 18 sq ft and it is well-
settled proposition that if even one residential unit violates the condition of the
Act, then the entire project will not be eligible for claimed deduction u/s 80IG
of the Act. Ld. DR further contended that despite several opportunities, the
assessee had failed to furnish audit report u/s 10CCB of the Act as per
requirement of section 80IA (7) of the Act. Ld. DR strenuously pointed out that
the assessee has not furnished any completion certificate issued by the
competent authority, therefore, the AO rightly denied deduction and exemption
u/s 80IB of the Act. The DR finally prayed that the impugned orders may be set
aside by restoring that of the AO.
6. Replying to the above, ld. Counsel of the assessee supported the
impugned order and placed copy of the decision of Hon'ble High Court of Delhi
dated 22.1.2014 in ITA No. 298/2013 CHD Developers Ltd. for AY 2007-08
reported as 362 ITR 117 (Del) and submitted that the CIT(A) granted relief for
the assessee by following the decision of ITAT Delhi `B' Bench dated
26.9.2012 in ITA No. 2902 and 4694/Del/2010 for AY 2006-07 and 2007-08
and submitted that the CIT(A) has simply followed the decision of the Tribunal
dated 26.9.2012 (supra) and there is no error or ambiguity in the impugned
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Asstt.Year: 2009-10, 2008-09
orders. Ld. Counsel further contended that the order of the Tribunal dated
26.9.2012 for AY 2007-08 has been upheld and approved by Jurisdictional High
Court of Delhi through order dated 22.1.2014 (supra). Ld. Counsel supported
the impugned orders and submitted that the AO adopted a hyper technical
approach for rejecting the claim of the assessee for deduction u/s 80IB of the
Act which was deleted by the CIT(A) on cogent and reasonable grounds. Ld.
counsel vehemently contended that if CIT(A) is following orders of the
Tribunal in assessee's own cases pertaining to the immediately previous years
on the similar issue and facts, then the revenue cannot take a different or
deviated stand without any substantial and strong reason.
7. On careful consideration of above rival submissions and vigilant perusal
of the relevant material placed on record before us, at the outset, we note that
the ITAT `B' Bench, Delhi deleted the additions made by the AO denying the
claim of the assessee u/s 80IB of the Act for AY 2006-07 and 2007-08. We
further note that the CIT(A) has granted relief on similar issue for AY 2008-09
and 2009-10 following the decision of the Tribunal dated 26.9.2012 (supra).
From the copy of the order of the Hon'ble High Court of Delhi dated 22.1.2014
(supra), we respectfully note that the order of the Tribunal for AY 2007-08 on
the similar issue has been approved by the High Court with following
observations and conclusion:-
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Asstt.Year: 2009-10, 2008-09
"10. In the present case concededly the approval for the
project was given by the Mathura Vrindavan Development
Authority on 16.03.2005. Clearly the approval related to the
period prior to 2005, i.e. before the amendment, which insisted
on issuance of the completion certificate by the end of the 4
year period was brought into force. We are in full agreement
with the Gujarat High Court that the application of such
stringent conditions, which are left to an independent body
such as the local authority who is to issue the completion
certificate, would have led to not only hardship but absurdity.
As a consequence, we are of the opinion that the reasoning
and conclusions of the Karnataka High Court and the Gujarat
High Court are fully applicable to the facts of this case. The
Tribunal was not, therefore, in error of law while holding in
favour of the assessee."
8. From a careful reading of the order of the Tribunal dated 26.9.2012 for
both the assessment years, we observe that the Tribunal has granted relief to the
assessee by holding that as per sub-section 10 of section 80IB of the Act, the
housing projects which were approved before 31st day of March, 2008, the
benefit will be hundred per cent subject to fulfilment of certain conditions.
However, this condition was substituted by Finance (No.2) Act of 2009 with
effect from 1.4.2009 which has been further explained by sub-clause (ii) to
Explanation regarding completion certificate. The Tribunal further held that
since the approval was granted to the assessee on 1.4.2005, therefore, the
assessee is not expected to fulfill the conditions which were not on the statute
when such approval was granted to the assessee.
9. From the impugned orders of the CIT(A), we observe that the CIT(A)
granted relief for the assesseee dismissing the action of the AO, which denied
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Asstt.Year: 2009-10, 2008-09
deduction u/s 80IB of the Act to the assessee, with following observations,
findings and conclusion:-
"5. I have carefully considered the submissions made by
the Id. AR and have gone through the assessment order. It is
seen that the AO has disallowed the claim of deduction u/s
80IB of the I.T.Act in respect of Shri Krishna Lok Project at
Virandvan of the appellant company mainly on two reasons:
Firstly, that the aforesaid project of the appellant
company is having areas of more than 1500 sq.ft. and even if
one residential unit of a project violates this condition the
entire project would not be eligible for deduction u/s 80IB.
Secondly, the appellant company failed to furnish
completion certificates from the Competent Authority in
respect of its aforesaid project. It is observed that the AO was
guided in making the aforesaid disallowance from the previous
assessment orders in the case of the appellant company for the
AY. 06-07 and 07-08.
5.1 It is further observed that the disallowances made in
respect of the aforesaid project of the appellant company u/s
80lB has been deleted by the Hon'ble ITAT "B" Bench Delhi in
its consolidated order on 26.9.2012 in respect of AY. 06-07 the
departmental appeal was rejected by the Hon'ble ITAT in ITA
No. 2902/De1/10. The relevant extracts of the aforesaid order
of the Hon'ble ITAT is reproduced below for reference:
"3.2. We have considered the rival submissions and
perused the material available on record. We have also
perused the sanction plan and area of each unit like bed
rooms, toilet, kitchen, drawing room, balcony, power room
and store etc. We find that if the total area as per approved
plan is examined, it comes to 1386.03 sq. ft. (as per sanction
plan), and the total saleable area/super area is 1492.43 sq. ft.,
which in all fairness is below the prescribed limit of 1500 sq. ft.
So far as the common area or stair case is concerned, it
cannot be included in the built up area of an individual unit as
the same is to be used by all the residents/ inhabitants. If the
definition of "built up area" as mentioned in sub-clause (a) of
sub-section (14) of Section 80-IB, is analyzed, it speaks about
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Asstt.Year: 2009-10, 2008-09
the inner measurement of the residential unit at the floor
level, including the projections and balconies, as increased by
the thickness of the walls but does not include the common
area shared with other residential units. The stair case
definitely comes under the common pool used by all the
inhabitants, therefore, it cannot be included in the built up
area. Even otherwise the Assessing Officer noted from the
details submitted by the assessee that three types of flats
were sold by the assessee and in the type "A" category the
area is 1386.03 sq. ft., whereas in type "B" the total area is
1122.48 sq. ft., and in type "C" flat, the total area is 811.84 sq.
ft. per flat. These details were submitted by the assessee vide
letter dated 12-12-2008 before the ld. CIT(A) and earlier
before the Assessing Officer.
Such details have been reproduced at page 4 of the
impugned order. There is a factual recording that stair case is
common area between the two adjacent flats measuring
8.172 sq. mts. and if this area is reduced from the total area of
the unit then certainly it comes below the prescribed limit of
1500 sq. ft.
This being the first year of claiming deduction u/s 80-IB(10) of
the Act, wherein the Assessing Officer himself noted that
assessee's 48 units of Type-A flats; 90 units of Type-B & Type-
C units were under construction, the Assessing Officer himself
computed the built up area by including the stair case area,
therefore, it exceeded the prescribed limit. Such factual
finding recorded in the impugned order was not controverted
by the Revenue by bringing any positive material on record. In
view of these facts we are of the considered opinion that the
assessee is clearly entitled for such deduction. Therefore, we
find no justification to interfere with the conclusion drawn in
the impugned order, which is affirmed."
5.2 Similar issue was also adjudicated upon by the Hon'ble
ITAT in respect of AY 2007-08 in the appellant's case in ITA
No. 4694/Del/10 dated 26.9.2012. For ready reference the
relevant extracts of the order of the Hon'ble ITAT is
reproduced below:-
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ITA No. 560/D/2013 & 769/D/2013
Asstt.Year: 2009-10, 2008-09
"8.4. We have considered the rival submissions and
perused the material available on record. The facts in brief are
that the assessee declared taxable income of Rs. 5,97,15,620/-
in its return filed on 31-10-2007. The case of the assessee was
selected for scrutiny. The assessee claimed deduction of
Rs.5,19,92,472/- u/s 80-IB(10). The Assessing Officer asked the
assessee to give justification for claiming such deduction. Ld.
Assessing Officer denied the claim on two counts- firstly, the
built up area of the unit is above prescribed limit of 1500 sq. ft.
and secondly for earlier assessment order identical deduction
was claimed by the assessee and the assessee violated the
conditions stipulated u/s 80-IB(10) in Type A flats. Ultimately,
the ld.Assessing Officer denied such deduction to the assessee.
The assessee filed various documents before the Assessing
Officer and the same were examined by her. Finally the ld.
Assessing Officer concluded that the conditions laid down u/s
80-IB(10) were not satisfied, therefore, the claim of deduction
could not be allowed to the assessee.
8.5. On appeal before the ld. CIT(A) the claim of the assessee
was examined and ultimately the assessment order was
upheld. The aggrieved assessee is in appeal before this
Tribunal.
8.6. If the totality of facts available on record and the assertion
made by the ld. respective counsels are kept in juxtaposition,
broadly the ld. CIT(A) is influenced by the sale transactions with
Rajasthan Global Securities Ltd., wherein pursuant to summons
u/s 131 issued to Rajasthan Global Securities Ltd., it was
confirmed that the amount of Rs. 5,36,89,920/- was paid to the
assessee as advance for purchase of 37 flats in Krishnalok
project. However, what it may the moot issue to be adjudicated
by us pertains to sec. 80-IB(10). We further find that as
contained in para 1.2 (page 5) of the impugned order, the ld.
CIT(A) has examined the submissions of the assessee and the
reason of denial of deduction to the assessee by the
ld.Assessing Officer. The relevant portion from the impugned
order is reproduced hereunder:
"It was further submitted that Addl. CIT wrongly tries to prove
that sale with M/s. Rajasthan Global Securities Ltd. (RGSL) are
not accounted for properly and undue profit has arisen on
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Asstt.Year: 2009-10, 2008-09
account of 80-IB whereas these are normal business
transactions undertaken by assessee company with M/s
Rajasthan Global Securities Ltd. having no mutual relation
whatsoever. The Assessing Officer has objected to the issue of
preferential shares and its valuation. The assessee company has
issued preferential shares to various persons as per SEBI
guidelines and approval of Bombay Stock Exchange. The
assessee company is a listed company and does not ah any
discretion about the issue price and require to issue shares
through preferential allotment only at the rate as per SEBI
guidelines and approved by stock exchange. During the year the
assessee company has calculated average market price as per
general meeting, certification by statutory auditor etc., has
submitted to Bombay Stock Exchange and has issued the
preferential share after getting approval from Bombay Stock
Exchange. These are normal business transactions because
these are issued as per SEBI and Stock Exchange guidelines.
These shares are issued to a number of companies and
individuals and not only to RGSL. Valuation of these shares are
done as per SEBI and Stock Exchange guidelines which were as
per average market rats and approved by Board of Directors
and General Meeting of CHD, statutory auditor and Bombay
Stock exchange approval. There is no close or remote nexus
between CHD and RGSL. There is no common relation among
the directors or major share holders. Since CHD is listed
company it has no control over market rate or guidelines of
SEBI and Stock Exchange. It is immaterial for CHD what its
shareholder does with their investments. As regard Assessing
Officer 's observation that the assessee has booked substantial
sales with respect to non 80-IB project and has booked
substantial sales with respect to 80-IB project, it was submitted
that these are normal business transactions which CHD has
undertaken during this year for earning profits in 80-IB project
as well as non 80-IB projects."
8.7. If the aforesaid is analyzed, we find that the grievance of
the revenue is that the sales made to M/s Rajasthan Global
Securities Ltd. are not properly accounted for and undue profit
has arisen on account of sec. 80-IB, whereas the claim of the
assessee is that it is a normal business transaction and the
assessee has no mutual relation what-so-ever with M/s
Rajasthan Global Securities Ltd. So far as the built up area is
concerned, as has been alleged by the revenue that it is beyond
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Asstt.Year: 2009-10, 2008-09
the prescribed limit of 1500 sq. ft., we have perused the
sanction plan, submissions before the Assessing Officer as well
as before the ld. CIT(A) and the break up dimensions adduced
by the assessee. Such break up even has been reproduced at
pages 7 & 8 of the impugned order, as per which the total area
has been claimed by the assessee at 1492.43 sq. ft.
8.8. Another point mentioned in the assessment order for
denying deduction by the Assessing Officer is that the assessee
did not file the bifurcation. However, we find that such
bifurcation was duly filed by the assessee that too room-wise of
all the units. Still the deduction was denied on the presumption
that the basis of arriving at such figure was not adduced by the
assessee. We are not in agreement with the finding of the
Assessing Officer on two counts- firstly, the approval was
granted by the Competent Authority; and secondly such
bifurcation is as per sanctioned plan which was filed before the
Assessing Officer. Uncontrovertedly such bifurcation was filed
during assessment stage, first appellate stage and even before
us.
It is also not in dispute that the approval was granted by the
Competent Authority to the assessee on 16-3-2005 meaning
thereby the project was approved before the amendment
inserted/ substituted by Finance (No.2) Act of 2004, w.e.f. 1-4-
2005. Prior to its substitution, sub-section (10), as amended by
the Finance Act, 2000, w.e.f. 1-4-2001 and Finance Act 2003
with retrospective effect from 1-4-2002, read as under:
"(10) the amount of profits in case of an undertaking
developing and building housing projects approved before the
31st day of March, 2005 by a local authority, shall be hundred
per cent of the profits derived in any previous year relevant to
any assessment year from such housing project if, -
(a) such undertaking has commenced or commences
development and construction of the housing project on or
after the 1st day of October, 1998;
(b) the project is on the size of a plot of land which has a
minimum area of one acre; and
(c) the residential unit has a maximum built-up area of one
thousand square feet where such residential unit is situated
within the cities of Delhi or Mumbai or within twenty-five
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Asstt.Year: 2009-10, 2008-09
kilometers from the municipal limits of these cities and one
thousand and five hundred square feet atany other place."
8.9. If the aforesaid position of law existing at the time when
the plan was sanctioned/ approval was granted to the assessee
is analyzed , there was no condition like production of
complete certificate. This is a settled legal proposition of law
that the law existing at the particular point of time will be
applicable unless and until it is specifically made retrospective
by the legislature. The substitution so made, is therefore,
applicable prospectively and not retrospectively. There is an
uncontroverted fact that approval was granted to the assessee
on 16-3-2005, consequently the assessee was expected to
complete the project on or before 31-3-2009. Now the question
arises whether the project was completed by the assessee
within time. As is evident from the letter of the assessee dated
5-11-2008 addressed to the Vice Chairman Mathura
Vrindavan Development Authority, on which the seal and
signature of the concerned authority is affixed (page 28 of the
paper book), it has been specifically requested that the
construction has been completed and further request has been
made for grant of completion certificate of Phase-I, meaning
thereby, if not earlier, the project was presumed to be
complete as on 5-11-2008 because the concerned development
authority has neither said that the project was not complete
nor completion certificate was issued to the assessee. In the
absence of any variation or allegation if such certificate is not
issued to the assessee, whether the assessee can be penalized
for the act of an authority on which it has no control, the
obvious reply is that for the fault of others anybody should not
be penalized, more specifically when the project was approved
on 16-3-2005. Therefore, the law applicable as on date will be
applicable to the assessee. It is not expected that the assessee
will demolish the construction work which is already in
progress and again comply with the direction of the law which
was inserted on a later date which is prospective in nature. If
the intention of the legislature would have been to make it
effective from retrospective effect, nothing prevents the
legislature to do so.
8.10. If the issue is analyzed in the light of case laws cited
before us, we find that the Hon'ble Karnataka High Court vide
judgment dated 29th February 2012 in the case of CIT &
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Asstt.Year: 2009-10, 2008-09
another Vs. M/s Anriya Project Management Services Pvt. Ltd.
(ITA no. 138 of 2010), considered the decision like CIT & ors.
Vs. G.R. Developers (ITA no. 355/2009) and held that
definition of built up area was inserted by Finance (No.2) Act
of 2004, which came into effect from 1-4-2005, is prospective
in nature and has no application to the housing projects which
were approved by local authority prior to that date, strongly
supports the case of the assessee. It was held by the Hon'ble
High Court that the assessee was entitled to hundred per cent
benefit of sec. 80-IB(10).
8.11. Another case cited was from Visakhapatnam Bench of
the ITAT in the case of M/s Vishnu Builders Vs. ACIT (ITA
nos. 178, 179 & 180/Vizag/2011), order dated 27th July 2011.
In that case also, completion certificate was not filed before
the Assessing Officer and the proof of municipal tax
assessment of various flat owners establishing that the housing
project was completed before September 2008 was filed. Since
there was no practice of issuing the project completion
certificate, therefore, it was held that it was not a condition
precedent of filing the completion certificate for allowing
deduction u/s 80-IB(10) of the Act.
8.12. In the case of CIT Vs. Tarnetar Corporation (Tax appeal
no. 1241 of 2011), the Hon'ble Gujarat High Court vide
judgment dated 12-9-2012, observed that the confirmation
issued by municipal authorities was filed on 15-2-2006 and
was rejected on 1-7-2006. The assessee also paid penalty for
regularization of the units. Since construction was completed
well before 31st March 2008, the outer limit for such
construction and the permission was not granted by they
municipal authority, it was held that fulfilling of every
condition is not mandatory and if there is a substantial
compliance, the minor deviation thereof would not vitiate the
very purpose of deduction.
8.13. The ITAT Delhi Bench `G' in the case of ACIT Vs.
Surendra Developers etc. (ITA nos. 2743 to 2745 & ITA nos.
3056 to 3058/Del/2010) vide order dated 1-8-2012, held that
wherein the assessee applied for completion certificate before
the lower authorities in time and such certificate was not
issued by the local authority, such non-issuance was beyond
the control of the assessee. While coming to this conclusion the
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Bench also considered another case of M/s Girija Colonizers
(ITA nos. 2417 to 2422/Del/11 order dated 9-12-2011).
8.14. The ld. Sr. D.R. also placed reliance upon the decision of
the Tribunal of Chennai Bench in ACIT Vs. Viswas Promoters
P. Ltd. (2010) 005 ITR (Trib) 0449 on the issue of built up
area not exceeding 1500 sq. ft. It was held that if this condition
is not fulfilled, the assessee is not eligible for deduction.
However, we find that in the present appeal, the built up area
is below the prescribed limit of 1500 sq. ft. Therefore, this
decision may not help the revenue being distinguishable on
facts.
8.15. If this issue is analyzed with the view point of rule of
consistency, we are of the considered opinion that though the
principle of res-judicata is not applicable to the income-tax
proceedings, yet for the sake of consistency and for the
purposes of finality in all litigations, including litigation
arising out of fiscal statutes, earlier decisions on the same
question should not be reopened unless some fresh facts are
brought on record in subsequent assessment year. For A.Y.
2006-07, even the ld. CIT(A) decided the issue in favour of the
assessee, which was confirmed by the Tribunal (supra),
therefore, unless and until any new material facts are brought
on record, the revenue is not permitted to take a "U turn",
while denying the claimed deduction to the assessee, that too
on same facts and circumstances. Our view is fortified by the
decision of Hon'ble Jurisdictional High Court in the case of
CIT v. A.R.J. Security Printers 264 ITR 276 (Del.); and the
ratio laid down in CIT Vs. Neo Poly Pack (P) Ltd. 245 ITR 492
(Del.); Berger Paints India Ltd. Vs. CIT 266 ITR 99 (SC); CIT
Vs. Lagan Kala Upvan 259 ITR 489 (Del.); and Union of India
& others Vs. Kaumudini Narayan Dalal & another 249 ITR
219 (SC). From this angle also, the assessee is having a strong
case in its favour.
8.16. Leave apart, we are of the considered opinion that the
assessee is expected to complete the project as per the
approved plan at a particular point of time and the assessee is
not expected to do or to fulfill the conditions which are not in
existence at the relevant point of time or made compulsory
after making some amendment in the Act from the future date.
Since the assessee was to complete the project on or before 31-
3-2009 and request was duly made with the Competent
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Asstt.Year: 2009-10, 2008-09
Authority on 5-11-2008 mentioning that the project has been
completed and completion certificate may be issued and if the
same is not issued by the Competent Authority the assessee
should not be penalized for the same unless and until some
contrary facts are brought on record evidencing that the
assessee contravened the conditions contained in the approval
granted by such Competent Authority. As per sub-section (10)
of Sec. 80-IB, the housing project which were approved before
31st day of March, 2008, the benefit will be hundred per cent
subject to fulfillment of certain conditions. However, this
condition was substituted by the Finance (No.2) Act of 2009
with effect from 1-4-2009, which has been further explained by
sub-clause (ii) to the Explanation regarding completion
certificate. However, since the approval was granted to the
assessee on 1-4-2005, therefore, the assessee is not expected to
fulfill the conditions which were not on the statute when such
approval was granted to the assessee. Therefore, the appeal of
the assessee deserves to be allowed.
9. Finally, the appeal of the revenue is allowed in part and
that of the assessee is allowed.
Order pronounced in open court on 26-09-2012."
Respectfully following the aforesaid decision of the Hon'ble
ITAT the AO is directed to allow deduction u/s 80IB as
claimed by the appellant company. However, the AO is
directed to verify whether the appellant company has claimed
any double deduction in respect of certain flats which were
earlier sold out to M/s Rajasthan Global Securities Ltd. In AY
2007-08. If any deduction has been claimed in respect of such
flats which if bought back claimed to be sold during the
relevant assessment year, the same shall not be eligible for
deduction u/s 80IB."
10. On the basis of foregoing discussion and in the peculiar factual matrix of
the extant case, as we have already observed that the Hon'ble Jurisdictional
High Court of Delhi in its order dated 22.1.2014 (supra) has upheld the order of
the Tribunal for AY 2007-08 which allowed appeal of the assessee on the issue
and granted relief for the assessee by directing the AO to allow deduction u/s
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ITA No. 560/D/2013 & 769/D/2013
Asstt.Year: 2009-10, 2008-09
80IB of the Act. From the order of the Tribunal dated 26.9.2012 (supra), we
also observe that in revenue appeal in ITA No. 2902/Del/2010 for AY 2006-07,
`B' Bench of Delhi Tribunal dismissed the appeal of the revenue by upholding
the order of the CIT(A) which deleted the addition made by the AO dismissing
the claim of the assessee u/s 80IB of the Act for AY 2006-07.
11. On the basis of foregoing discussion and in the light of order of Hon'ble
Jurisdictional High Court of Delhi dated 22.1.2014 (supra) in assessee's own
case for AY 2007-08, we reach to a conclusion that the CIT(A) was quite
justified and reasonable in following the order of the ITAT `B' Bench for AY
2006-07 and 2007-08 (supra) and we are unable to see any valid reason to
interfere with the same. Accordingly, ground no.1 of revenue in both the
appeals being devoid of merits is dismissed.
Ground no. 2 of the revneue
12. Ld. DR contended that the CIT(A) has erred in deleting the addition made
on account of wrong claim of depreciation on computer accessories and
peripherals ignoring the fact that only the computer and computer software are
eligible for depreciation of 60% and the same cannot be extended to computer
accessories and peripherals. Ld. DR prayed that the impugned order may be set
aside by restoring that of the AO on this issue.
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Asstt.Year: 2009-10, 2008-09
13. Ld. Counsel for the assessee supporting the impugned orders submitted
that the issue is squarely covered in favour of the assessee by the order of the
Hon'ble Delhi High Court in the case of CIT vs BSES Rajdhani Power Ltd.
dated 31.8.2010 in ITA No. 1266/2010 and he has drawn our attention towards
operative para 6.3 and 6.4 of the impugned orders of the CIT(A).
14. On careful consideration of above rival submissions and perusal of the
impugned order, we observe that the CIT(A) granted relief for the assessee with
following conclusion:-
"6.3 I have carefully considered the submissions of Id.
AR and have gone through the assessment order. I find that the
similar issue was involved in the case of CIT vs. BSES
Rajdhani Powers Ltd. in ITA NO.1266/2010 wherein vide
order dt.31.8.201 0, Hon'ble Delhi High Court has held as
under:-
"We are in agreement with the view of the Tribunal that
computer accessories and peripherals such as, printers,
scanners and server etc. form an integral part of the computer
system. In fact, the computer accessories and peripherals
cannot be used without the computer. Consequently, as they
are the part of the computer system, they are entitled to
depreciation at the higher rate of 60%".
6.4 Respectfully following the decision of Hon'ble
Delhi High Court, Assessing Officer is directed to delete the
addition on this account."
15. In view of above, we are inclined to hold that the issue is squarely
covered in favour of the assessee by the order of Hon'ble Jurisdictional High
Court of Delhi in the case of BSES Rajdhani Powers Ltd. (supra) and hence
CIT(A) was justified in deleting the impugned additions and we are unable to
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ITA No. 560/D/2013 & 769/D/2013
Asstt.Year: 2009-10, 2008-09
see any ambiguity or perversity in the impugned orders in this regard and thus
we uphold the same. Accordingly, ground no. 2 of the revenue in both the
appeals is also dismissed.
C.O. of the assessee
16. Ld. Counsel of the assessee fairly accepted that that the assessee has filed
cross objections just to support the impugned order and to allege assessment
order and if revenue is not getting any relief in its appeals, then the assessee is
not interested in pressing the cross objections. Ld. DR contended that COs of
the assessee are baseless and have been filed without any substance and basis
just to support wrong and erroneous order of the CIT(A), therefore, the same
may be rejected in toto.
17. In view of above submissions, we are of the considered opinion that since
we have dismissed appeal of the revenue for both the years by the earlier part of
this order, therefore, in view of submissions of the ld. Counsel of the assessee,
Cos of the assessee do not require any detailed adjudication and we dismiss the
same as infructous.
18. In the result, both the appeals of the revenue and both the Cos of the assesse
are dismissed in the manner as indicated above.
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ITA No. 560/D/2013 & 769/D/2013
Asstt.Year: 2009-10, 2008-09
Order pronounced in the open court on 22.12.2014.
Sd/- Sd/-
(J.S. REDDY) (CHANDRAMOHAN GARG)
ACCOUNTANT MEMBER JUDICIAL MEMBER
DT. 22nd DECEMBER, 2014
`GS'
Copy forwarded to:-
1. Appellant
2. Respondent
3. C.I.T.(A)
4. C.I.T. 5. DR
By Order
Asstt. Registrar
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