TaxTMI 
TaxTMI 
2022 (4) TMI 1588
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..... The ld. Authorised Representative (AR) submitted that the assessee is engaged in the business of development of real estate projects including redevelopment of Slum Rehabilitation Authority (SRA) Projects, etc. The assessee undertook the construction of Slum Rehabilitation Project under D.C. Regulation at Mayanagar, Worli, Mumbai. The assessee got approval in respect of aforesaid project from Local Authority on 26.11.1998. The assessee claimed deduction under section 80IB(10) of the Act in respect of aforesaid project for the first time in AY 2003-04, however, the claim of assessee was rejected by the AO as the project was incomplete. The assessee accepted the assessment order and filed no further appeal. Thereafter, the assessee made its claim of deduction under section 80IB(10) of the Act in the AY 2013-14. The AO again disallowed by the claim of assessee inter alia on the ground that the SRA project developed by the assessee received approval on 26/11/1998, whereas, per CBDT notifications dated 03/8/2010 and 05/1/2011 the benefit u/s. 80IA(10) can be extended to SRA housing projects approved between 01/4/2004 and 31/3/2008, hence, the project of assessee is not covered by afor....
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....onal jurisdiction under section 263 of the Act can only be invoked where the PCIT is of considered opinion that the assessment order is erroneous and in so far as prejudicial to the interest of Revenue. The power under section 263 cannot be invoked just to keep the issuer alive. The ld. AR asserted that from impugned order it would be evident that it is not the PCIT's own consideration on which revisional powers were invoked. The PCIT on receipt of proposal from Addl. CIT initiated proceedings u/s.263 of the Act. This is against the scheme of Act. To buttress his submissions, the ld. AR placed reliance on the decision of Alfa Laval Lund AB vs. CIT in ITA No. 1287/PUN/2017 decided on 02.11.2021. 3. The ld. AR contended that in the notice under section 263 of the Act, the PCIT only mentioned about the disallowance of deduction under section 80IB(10) of the Act. However, while passing the order under section 263 of the Act, the PCIT also rattled the issue of assessee's transaction with M/s Four Zone Realtors Pvt. Ltd. for sale of FSI. The ld. AR pointed that on this issue no show-cause notice was given to the assessee, no opportunity of hearing was afforded to the assessee by the P....
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....spect of Mayanagar project. In first appeal, the assessee succeeded. The Revenue carried the issue in appeal before the Tribunal in ITA No. 2764/Mum/2018 (supra). The Co-ordinate bench discussed the issue threadbare on facts and legal requirements and thereafter upheld the findings of CIT(A). For the sake of completeness the relevant extract of the order by Coordinate Bench is reproduced herein below: "10. We have heard both the parties, perused the material available on record and gone through orders of the authorities below along with case laws cited by both the parties. The main dispute between the assessee and the Assessing Officer is with regard to availability of the benefit of deduction u/s 80IB(10) of the Act, in light of proviso to section and also more particularly in light of clause (a) and (b) of said proviso. As per the said proviso, clause (a) and (b) regarding date of commencement and date completion of project has no application, if such project is approved by central or state Government under any laws. It is an admitted fact that the project on which the benefit of deduction was claimed u/s 80IB(10) of the Act, was approved by the state Govt. of Maharashtr....
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.... section 80IB(10) of the Act. For ready reference, it is necessary to reproduce section 80-IB(10) of the Act, as applicable to the year under consideration below: "(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 by a local authority snail be hundred per cent of the profits derived in the 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 and completes such construction.- (i) in a case where a housing project has been approved by the local authority before the r! day of April 2004, on or before the 31st day of March, 2008; (ii) in a case where 3 housing project has been, or, is approved by the focal authority on or after the 1st day of April, 2004 but not later than the 31st day of March, 2005, within four years from the end of the financial year in which the housing project is approved by the local authority; (iii) in a case where a housing project has been approved by the focal....
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....period in respect of projects approved after 01.04.2004, was considered and adjudicated by the co-ordinate Bench of this Tribunal in the case of Ramesh Gunshi Dedhia v. ITO [148 ITD 356 (Mum)], which was relied upon before the CIT (A). In the said case, it was held that as a consequence of the proviso, the conditions prescribed in clauses (a) and (b) are relaxed if the housing project was carried out in accordance with the scheme of the Central or State Government. Since, the CIT(A) has extracted in extenso the findings recorded by the Tribunal in paragraph 4.16 on pages 23-26 of his order, for the sake of brevity, we refrain from repetition thereof. 15. The other objection of the Assessing Officer is that since the consideration for construction of the rehabilitation building was received in kind and not in cash/cheque, the benefit of S. 80-IB(10) of the Act would not available to the assessee. It is noted that this inference drawn by the Assessing Officer is also untenable as held in various decisions, cited before and considered by the CIT (A) in paragraph 4.19 of his order holding to the contrary. In the premises, we are of the considered view that the CIT (A) was just....
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....as also taken note of the aforesaid order dated 28.12.2017 passed u/s. 143(3) of the Act for A.Y. 2015-16 in paragraph 4.21 of his order. For all the above reasons, we are of the view that the denial of deduction claimed u/s. 80-IB(10) of the Act was unwarranted and unjustified. The reasoned order of the CIT (A) deleting the disallowance is in order and it does not call for any interference. 18. In regard to the other objection raised by the Assessing Officer that the FSI granted was sold to a group entity at an inflated rate, we find that the statute does not prohibit such sale to group concern. Further, the ready reckoner rate is not sacrosanct, and there might be innumerable reasons for demanding higher price. In any case, the transaction under consideration is supported by a valuation report submitted to A.O. in which the rate of FSI was supported with the help of three comparable instances. Further, the inference drawn by the Assessing Officer is based upon his own theory, and neither supported by any independent verification nor after discrediting the valuation submitted by the assessee for valid reasons. We, therefore, are of the considered view that the CIT(A) was ....
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....letion of the project has no application to projects undertaken under the scheme of Central or State Govt. Thus, in view of the fact that the project on which the benefit of deduction was claimed u/s 80IB(10) of the Act, was approved under DC regulation 33(10) of Govt. of Maharashtra, and also notified by the CBDT u/s 80IB(10) of the Act, we are of the considered view that the assessee is entitled for deduction towards sale of FSI/TDR. The CIT(A) after considering relevant facts, has rightly allowed the benefit and deleted addition made by the AO. Hence, we are inclined to uphold the order of the ld. CIT(A) and dismissed appeal filed by the revenue." [Emphasised by us] 7. Thus, the issue of assessee's eligibility to claim deduction under section 80IB(10) of the Act at Mayanagar SRA Project was decided in favour of the assessee in the AY 2013-14. No doubt while adjudicating appeal for AY 2013- 14, the Tribunal has referred to the Assessment Order for AY 2015-16 which is now subject of revision, nevertheless, the Co-ordinate Bench decided the issue in favour of assessee on merits and not solely by placing reliance on the assessment order for AY 2015-16. The reference to A....
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.... the Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the Incometax Officer is unsustainable in law." 10. The twine conditions sine qua non for exercise of revisional jurisdiction, are: (i) the assessment order should be erroneous; and (ii) prejudicial to the interest of Revenue. If only one of the twin condition is satisfied, the order passed by the assessing officer cannot be revised u/s. 263 of the Act. In the instant case, we find that the view taken by the assessing officer in allowing assessee's claim of deduction under section 80IB(10) is one of the possible views backed by the order of Tribunal in assessee's own case in respect of the same very project in the AY 2013-14. Therefore, the assessment order cannot be said to be erroneous. The impugned order is unsustainable and is liable to be quashed. 11. Another issue that has been raised by the PCIT in exercise of ....
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....ng to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." A bare reading of provisions of section 263 of the Act would show, that for initiating revisional powers under section 263, the primary requirement of section is that the PCIT/CIT has to examine records and consider the order passed by the assessing officer. In other words, section 263 mandates two preconditions to be complied before coming to the conclusion that the assessment order is erroneous and prejudicial to the interest of revenue. These two primary conditions are, (i) examination of records by the PCIT/CIT, and (ii) consideration by the PCIT/CIT of the order passed by assessing officer. Thus, it is the action of PCIT/CIT to examine records and consideration of order that opens the gate for exercising revisional powers u/s. 263 of the Act. From reading of above provisions of the section it is explicitly clear that the section does not give leverage to PCIT/CIT to exercise revisional jurisdiction on proposal received from any other author....