TaxTMI 
TaxTMI 
2016 (2) TMI 698
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....from CMC. c) Details regarding the name and address of the Flat Purchaser, with area of flat, and consideration received from them. d) Details of changes made in promoter and Developer since inception of Project Construction." 3. On 29.09.2009 the Assessee filed details of flat sold with name of the purchaser. Flat No., Built-up area of the flats, consideration received from the flat purchaser. According to the AO, the Assessee expressed its inability to produce the following details:- "a) Copy of floorwise sanctioned plan by CMC. b) Details of changes made in promoter and developers since inception of the project. c) Any details of reconstruction of existing business." 4. According to the AO, the Assessee did not produce the necessary details as was called for by him. The AO therefore issued another show cause letter dated 30.11.2009, in which the AO pointed out as follows:- "1. During the course of hearing you had been requested. vide note sheet dated f01.09.2009, 29.09.2009 and 27.10.2009 to produce the following details:- a) Copy of floor wise & flat wise plan sanctioned by Calcutta Municipal Corporation (CMC)....
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....0) claimed by you should not' be disallowed. 4. a) On verification of the assessment records, it appears that during the accounting year under consideration, you were engaged in developing & construction of building on a land of 146 Cottahs 9 Chittaks situated at I/I - Raja Rajendra Lal Mitra Road, Kolkata-700085 ( under the jurisdiction of Calcutta Municipal Corporation) on the basis of a sanctioned plan of CMC dated 09.12.1999. From the records of earlier years, it further appears that the plot of land was originally owned by one "Shree Shree Iswar Brojeswar Mahadev Thakur Jew Trust as "Debottar Estate" and in May, 1995 by virtue of an order of the Hon'ble High Court, Kolkata the said property was leased out to 5 (five) persons who on their part nominated 10 (ten) persons as their nominees. On 30.10.1995, ten registered deed of lease were executed between the Trust and the ten nominees with the right to develop and construct multi storied building on the same plot of land. Thus an A.O.P. was formed by the above lease deeds for developing and construction of the building on the above premises. b) Being unable to develop the said lease hold property, 4 (four) ....
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....st paid on members capital in the form of land' should not be disallowed for non satisfying the conditions laid down in the Act for allowing such deduction." 5. The AO did not allow the claim of the assessee for deduction u/s 80IB(10) of the Act for the reason that housing project was completed on 30.03.2005 and that the built up area of some of the flats was more than 1500 sq.ft. The AO also held that the time limit for completion of the housing project for the purpose of deduction u/s 80IB(10) of the Act was four years from the first plan sanction order. Since the completion certificate issued by the Kolkata Municipal Corporation was dated 30.03.2005 AO held that the project was completed beyond four financial years from the end of the financial year in which original plan was sanctioned on 09.12.1999 relevant to financial year 1999-2000. For all the above reasons the AO denied the benefit of deduction u/s 80IB(10) of the Act to the assessee. 6. It is not in dispute before us that the assessee filed an appeal against the order of assessment by the AO and the CIT(A) vide his order dated 10.05.2010 held that the assessee fulfilled all the conditions for grant of deduction....
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....ioned earlier, the assessee can have the prejudice caused to him corrected by filing appeal as also by filing a revision application under section 264. But the State Exchequer has no right of appeal against the orders of the Assessing Officer. Section 263 has therefore been enacted to empower the Commissioner to correct an erroneous order passed by the Assessing Officer which he considers to be prejudicial to the interest of the revenue. The provisions of section 263 would loose significance if they were to be interpreted in a manner that prevented the Commissioner from revising the erroneous order passed by the Assessing Officer, which was prejudicial to the interest of the revenue. In fact, such a course would be counter productive as it would have the effect of promoting arbitrariness in the decisions of the Assessing Officers and thus destroy the very fabric of sound tax discipline. If erroneous orders, which are prejudicial to the interest of the revenue, are allowed to stand, the consequences would be disastrous in that the honest tax payers would be required to pay more than others to compensate for the loss caused by such erroneous orders. For this reason also, I am of the ....
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....e considered by the AO while framing the assessment. It is not in dispute that the CIT(A) has given a decision on the aforesaid three issues in favour of the assessee in the appeal filed against the order of assessment. The order of the CIT(A) is dated 10.5.2010. Thus in so far as points 1 to 3 in the show cause notice of the CIT u/s 263 of the Act dated 30.1.2012 are concerned, the order of the AO had merged with the order of CIT(A) and therefore the C.I.T. had no jurisdiction to go into those issues in view of clause (c) to Explanation-1 to section 263(1) of the Act. 12. As far as point no.4 raised by C.I.T. in the show cause notice dated 30.1.2012 u/s 263 of the Act is concerned, the same relates to the existence of build up area of more than 2000 sq.ft in the project completed by the assessee. On this issue we find that the assessee in reply to the show cause notice u/s 263 of the Act had specifically pointed out before CIT as follows :- "d)Built-up area of Shops more than 2000 sq ft. In this regard we would like to put forward as under : 1. That your assessee has built and constructed the project as per the approved sanction plan by the local auth....
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....mercial user in residential buildings. Aforesaid conclusion is further fortified by cl. (d) of s. 80-IB(10) inserted w.e.f. 1st April, 2005 which provides that deduction under s. 80-IB(10) would be allowable where the commercial user does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less. In the absence of any restriction under the Act, it was not open to the Tribunal to hold that the projects approved by the local authorities having residential buildings with commercial user upto 10 per cent of the plot area are alone entitled to deduction under s. 80-IB(10). Restriction regarding commercial user has been imposed for the first time by inserting cl. (d) in s. 80-IB(10) w.e.f. 1st April, 2005. The Hon'ble Court held that the argument of the Revenue that s. 80-IB(10) as amended by inserting cl. (d) should be applied retrospectively has no merit as cl. (d) has been specifically inserted w.e.f. 1st April, 2005 and, therefore, it cannot be applied for the period prior to 1st April, 2005. In the present case, the plan for construction of the Housing Project at 1/1, R.R.L.Mitra Road, Kolkata 700085 was sanctioned ....