Case Analysis 2

29/05/2020 Delivery | Westlaw India
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Title : Vikram Developers and Promoters, Pune v
Deputy Commissioner of Income Tax, Pune
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29/05/2020 Delivery | Westlaw India Page 2
Income Tax Appellate Tribunal
PUNE BENCH
14 November 2019
Vikram Developers and Promoters, Pune

v
Deputy Commissioner of Income Tax, Pune
Case No : ITA Nos. 2795 & 2796/PUN/2016
Bench : D. Karunakara Rao (Accountant Member), Partha Sarathi Chaudhury (Judicial Member)
Citation : 2019 Indlaw ITAT 8694
The Judgment was delivered by : D. Karunakara Rao (Accountant Member)
1. There are two appeals under consideration filed by the assessee against the common orders
of the CIT(A)-12, Pune dated 08.09.2016 for the assessment years 2012-13 and 2013-14
respectively.
Preliminary Issue - Condonation of Delay - Both Appeals
2. Before us, at the outset, ld. Counsel for the assessee submitted that the both the appeals
could not be filed in time and the said appeals were filed with the delay of 01 day. In this
regard, ld. Counsel for the assessee submitted that the delay is unintentional and prayed for
condoning the same.
3. After hearing both the sides and considering the smallness of delay in filing of both the
appeals, we condone the delay and proceed to adjudicate the appeals of the assessee in the
following paragraphs.
4. The facts and grounds are common in both the appeals, therefore, both the appeals were
heard together and are being disposed of by this composite order. Accordingly, the appeal-
wise adjudication is taken up in the following paragraphs.
ITA No.2795/PUN/2016 - A.Y. 2012-13
5. Facts: The assessee is a builder and undertook a Residential Project named "Midori Phase-I"
i.e. the construction of flats. The assessee filed the return of income declaring Nil income after
claiming deduction u/s 80IB(10) of the Act. The case was selected for scrutiny under CASS and
the assessment was made determining the total assessed income of Rs. 63,00,000/- for the
assessment year 2012-13. Rs. 31,49,800/- was the assessed income for the assessment year
2013-14. During the assessment proceedings for the assessment year 2012-13, the Assessing
Officer noted that the assessee claimed deduction of Rs. 13,22,98,018/- u/s 80IB(10) of the
Act in respect of its project namely "Midori Phase-I". An amount of Rs. 10,67,79,215/- was
claimed as deduction (supra) for the next assessment year 2013-14. In principle, the assessee
recognised income of the project on "Project Completion Method-cum-the event of Sale" of
flats method. All flats were sold by assessment year 2013-14 and the project is completed in
this assessment year.
6. During the assessment year 2012-13, the Assessing Officer found an issue relating to the
claims of 'club charges' collected by the assessee for construction of a club house for the
residents. Assessee collected club house charges of Rs. 99 lakhs in three assessment years
and held they constitute an eligible income for claim of deduction u/s 80IB(10) of the Act. The
Assessing Officer rejected claim of deduction on these club charges in both assessment year
2012-13 and assessment year 2013-14 and treated said collections as taxable income in both
assessment years. Similarly, the Assessing Officer noted that there was additions in the earlier
three assessment years i.e. A.Y. 2009-10, 2010-11 & 2011-12 u/s 68 of the Act. The total of
the same works out to Rs. 1,40,98,445/-. All these additions were considered for restricting
the claim of deduction u/s 80IB(10) of the Act in the assessment year 2012-13. The CIT(A)
restored the assessee's claim on the said Rs. 1,40,98,445/- and confirmed the charges made
by the Assessing Officer to the sums of Rs. 63 lakhs for the assessment year 2012-13 as well
as Rs. 31,49,800/- in assessment year 2013-14. Assessee aggrieved with the above. We shall
now detail the facts on the said club charges.
7. Facts relating to 'club charges': There was a search and seizure action u/s 132 of the Act on
08.09.2010 on Mr. Vikram Gaikwad, the partner of the assessee-firm. Mr. Gaikwar gave a
declaration of additional income of Rs. 21.08 crores during the said proceedings. The assessee
filed an application before the Income Tax Settlement Commission (ITSC) for the assessment
years 2005-06 to 2012-13 and declared the undisclosed income of Rs. 27.34 crores. The
addition of Rs. 1,40,98,445/- qua the additions made by the Assessing Officer in assessment
years 2009-10 to 2011-12 are not part of it. Further, the Assessing Officer noted that Midori
Phase-I project was originally approved by the local body with a 'club building' as part of the
project in the year 2007 itself and it was subsequently revised on 05.09.2008, 16.05.2011 (for
removal of club house due to some issues) so on. On 29.03.2012, the project was cleared
completed without any club house mentioned in the project. The completion certificate was
obtained too. Based on the "event of sale of flats cum Project Completion, the income was
recognised by the assessee in assessment years 2012-13 and 2013-14 and claimed the
deduction u/s 80IB(10) of the Act on the said income. However, the construction of club house
remains an obligation by the assessee to the flat owners.
8. Club House Collections (CH Collections): In the context of the said need for club house
construction, the assessee started collecting the subscription separately from the flat buyers at
the rate of Rs. 75,000/- per flat owner. Thus, assessee collected total amount of Rs.
99,00,000/- in 3 years i.e. Rs. 63,00,000/- in the A.Y. 2012-13, Rs. 31,49,800/- in the A.Y.
2013-14 - and finally, Rs. 4,50,200/- in the A.Y. 2014-15. There is no dispute on these facts
(i.e. year of completion of project, project income recognition, collection of club charges
separately). The assessee considered all these collections of Rs. 99 lakhs, on receipt basis, as
income of the assessee in the respective assessment years and claimed deduction u/s
80IB(10) of the Act. Thus, the issues of taxation of "Club House Collections" and the said claim
of deduction on these gross collection of Rs. 99,00,000/- are the deviation made by the
assessee from the said 'rules of income recognition' adopted by the assessee - firm. Therefore,
the Assessing Officer taxed entire Rs. 99 lakhs and did not consider the expenses incurred on
the club house construction as an allowable deduction in any assessment year. Assessee is
aggrieved on the Assessing Officer's decisions.
9. Assessing Officer's Reasoning: During the assessment proceedings, on this issue of club
house subscription as eligible income, the assessee undertook a different line and argued that
the said collections were required to be treated as "advances", 'a balance sheet item', and
should be excluded from the scope of income. However, rejecting the said argument of the
assessee, and considering the assessee's original claim in the return of income, the Assessing
Officer treated the CH Collections as taxable income, restricted the deduction and denied the
deduction in respect of the club house receipts in all the three assessment years. In the
process, the Assessing Officer conveniently adopted the assessee's own admission in the
return of income that the said "advances" constitutes a taxable income but for the deduction
provision of section 80IB(10) of the Act.
10. Matching Expenses: Alternatively, referring to the unfairness in denying the credit of
expenses of Rs. 73,48,445/- against the said CH Collections of Rs. 99 lakhs, the assessee
made a request for pre-poning of the expenses incurred on the club house construction in
assessment year 2014-15 and tax only to the 'net income' if the deduction on the said net
income u/s 80IB(10) of the Act is not allowable for any reason. The Assessing Officer rejected
this argument also merely relying on the assessee's claim of deduction on entire Rs. 99 lakhs
as made in the return of income. Assessee did not reduce the said expenses out of Rs. 99
lakhs. Thus, the Assessing Officer rejected the claim of deduction u/s 80IB(10) of the Act and
allowed the deduction of Rs. 11,18,99,573/- only out of the original claim of Rs.
13,22,98,018/- in the A.Y. 2012-13 (page 3 of the assessment order) i.e. :
Claim u/s 80IB(10) Rs. 13,22,98,018/-
Less: (i) club charges Rs. 63,00,000/-
(ii) cash credit Rs. 1,40,98,445/-
Deduction u/s 80IB(10) Rs. 11,18,99,573/-
11. Sum up of the issues for adjudication by the CIT(A): Thus, the double-effect of assessment
include (i) Restriction of claim of deduction u/s 80IB(10) of the Act on (a) CH Collections
received in the year and (b) denial of deductions on the additions on account of cash credit u/s
68 of the Act; and (ii) taxation of said CH Collections of Rs. 99 lakhs in all three assessment
years without giving credit expenses in any form including preponing to the expenditure
actually incurred on the Club House in assessment year 2014-15.
12. CIT(A) : Aggrieved with the above decisions of the Assessing Officer, the assessee filed
appeals before the CIT(A). As discussed earlier, the issue for adjudication before him includes
(i) taxation of club house subscription of Rs. 63 lakhs and denial of deduction u/s 80IB(10) of
the Act in respect of club house subscription; and (ii) denial of claim of deduction on the cash
credit addition of Rs. 1,40,98,445/- relating to the earlier assessment years. CIT(A) passed a
composite order for assessment years 2009-10 to 2013-14.
13. CH Collections - Issue: On the issue relating to CH Collections, twin issue of taxation-cum-
denial of deduction u/s 80IB(10) of the Act, the CIT(A) held that the club house project was
not the part of the original housing project. Therefore, as declared in the return of income, the
CH Collections received by the assessee from the flat buyers constitute a taxable income and,
is not an eligible income for claim of deduction. Considering the fact that the assessee himself
offered the same as taxable income in the return of income (but however, claimed deduction
u/s 80IB(10) of the Act), the CIT(A) confirmed the addition made by the Assessing Officer in
toto. On the arguments of the assessee relating to (a) the capital nature of the advances and
(b) need for netting of the expenses against the said advances etc by preponing, the CIT(A)
held that the return of income made therein are sacrosanct. The CIT(A) refused the alternate
claim of the assessee i.e. in favour of taxing only the net income either in the assessment
years 2012-13, 2013-14 & 2014-15 proportionately or only in assessment year 2014-15 on
completion basis.
14. With regard to the denial of deduction on the additions of Rs. 1,40,98,445/-, the CIT(A)
granted relief and restored the claim of deduction u/s 80IB(10) of the Act. In this regard, the
CIT(A) relied on the Jurisdictional High Court's judgement in the case of CIT vs. Sheth
Developers (P) Ltd., 25 taxmann.com 173 (Bom.-HC). Thus, the CIT(A) partly allowed the
assessee's appeals. Revenue is not in appeals before us.
15. Thus, the Revenue accepted the relief granted by the CIT(A) on the issue relating to cash
credit addition and grant of deduction on Rs. 1,40,98,445/-. There are no appeals by the
Revenue in the assessment years 2009-10 till assessment year 2012-13. However, aggrieved
with the above decisions of the CIT(A) qua the assessment year 2012-13, the assessee is in
appeal before the Tribunal with the following grounds :-
"1. The learned CIT(A)-12, Pune erred in law and on facts in confirming the disallowance of
deduction amounting to Rs. 63,00,000/- u/s 80-IB(10) of the ITA, 1961 made by the learned
DCIT, Central Circle-2(1), Pune (hereinafter referred to as the learned AO).
2. The learned CIT(A)-12 and the learned AO erred in law and on facts in disallowing
deduction u/s 80-IB(10) of the ITA, 1961 for receipts / revenue related to club-house facility
amounting to Rs. 63,00,000/- on the reason that the said club-house facility was not
mentioned in the last approved plan of the MIDORI housing project. The learned IT-Authorities
ought to have appreciated that club-house was initially approved by the PMC and the club
house was a contractual a contractual obligation of the appellant anyway.
3. The learned CIT(A)-12 and the learned AO erred in law and on facts in not appreciating that
non-mention of a facility / amenity in the approved building plan does not lead to a proposition
that the related revenue / profit from such amenity is not a part of profits derived from the
said housing project. The learned IT-Authorities ought to have appreciated that the said profit
from club-house facility was a part and parcel of a housing project and incidental thereto.
4. Alternatively and without prejudice to Ground No. 2, & 3, the learned CIT(A)-12 and the
learned AO erred in law and on facts in not granting the deduction of corresponding
expenditure required to be incurred for the construction & development of the club-house.
5. Alternatively and without prejudice to the Ground No. 1, 2 & 3, the learned CIT(A)-12 and
the learned AO erred in law and on facts in not shifting the income of Rs. 63,00,000/- being
club house membership charges, to AY 2014-15 since the related risks and rewards were
transferred only in AY 2014-15, when the said club-house was constructed & developed.
6. Appellant craves, leave to add / modify / delete all or any of the grounds of appeal."
16. From the above extracted grounds, it is evident that the grounds/alternative ground 1, 4 &
5 relates to the core issue i.e. merits of disallowance of deduction u/s 80IB(10) of the Act in
respect of sum of Rs. 63,00,000/- and taxation of the net income is proper assessment year
after granting set-off of matching expenses. Ground 2 and 3 are argumentative.
Before the Tribunal
17. Ld. AR's Submissions : The ld. Counsel for the assessee narrated the above facts of the
case and filed a summary chart of the subscription from flat buyers for Club House and the
expenditure details in the assessment year 2014-15, the year of construction/completion of
Club House. The same is extracted as under :-
Summary of Club House Receipt and Expenses
Particulars A.Y. 2012-13 A.Y. 2013-14 A.Y. 2014-15
As per "Appellant" 63,00,000 31,49,800 4,50,200

A. Club House
Receipts (Rs. 99
lakhs)
B. Club House - - 78,10,182

Expenses claimed
by Appellant
C. Profit from Club 63,00,000 31,49,800 -73,59,982

House Receipts (A-
B)
D. Deduction 63,00,000 31,49,800 -

claimed u/s 80-
IB(10) w.r.t. Club
House
E. Income offered - - -
to tax w.r.t. Club
House
As per "Assessing 63,00,000 31,49,800 4,50,200

Officer" A. Club
House Receipts
B. Club House - - -
Expenses granted
by Assessing Officer
C. Profit from Club 63,00,000 31,49,800 4,50,200

House Receipts (A-
B)
D. Deduction - - -
granted u/s 80-
IB(10) w.r.t. Club
House
E. Income brought 63,00,000 31,49,800 4,50,200

to tax w.r.t. Club
House
18. Thus, refer to assessment year 2012-13, the limited issue for adjudication before us is that
(i) whether the said addition of Rs. 63,00,000/- is sustainable or not?; (ii) whether the claim of
deduction u/s 80IB(10) of the Act in return of income by the assessee is correctly made or
not?; and, (iii) whether the CH subscription of Rs. 63,00,000/- for the assessment year 2012-
13, Rs. 31,49,800/- in assessment year 2013-14; and Rs. 4,50,000/- constitutes part of the
Housing Project or not to enjoy the benefit of deduction.
19. Further, ld. Counsel for the assessee filed an affidavit before us on 11.10.2019 making the
following assertions :-
"..........
1. Our firm has developed a housing project, profits of which were eligible for deduction u/s
80-IB(10) of the ITA, 1961. Deduction u/s 80-IB(10) of the ITA, 1961; was claimed on the
profits, which was allowed by the learned I-T Authorities.
2. Though the deduction u/s 80-IB(10) of the ITA, 1961; was allowed by the I-T Authorities,
objection was taken vis-a-vis profits arising from construction of club-house (a part of
common amenities assured to the customers). The said objection related to the non-approval
of the "club-house" by PCMC.
3. Our firm has filed appeals before the Honorable ITAT, Pune Bench for A.Y. 2012-13 and A.Y.
2013-14 having ITA No.2795-2796/PUN/2016.
4. Vide Ground No.1 to 3, in both the appeals for A.Y. 2012-13 and A.Y. 2013-14, we
challenged non-grant of deduction u/s 80-IB(10) of the ITA, 1961 on club-house receipts.
Details of the same are as under:
(a) A.Y. 2012-13 Rs. 63,00,000/-
(b) A.Y. 2013-14 Rs. 31,49,800/-
5. The said deduction u/s 80-IB(10) of the ITA, 1961 was claimed on the basis that club-house
was sanctioned in initial layout plan and commitment was made to customers through Sales
Brochure and Registered Agreements. However, in the year 2010, a new storm-water map
was prepared by Science Technology Park (STP), which was approved by JNNURM and was
implemented by PCMC.
6. As per the said new storm-water plan, the housing project land, where the club-house was
proposed, was falling in the said map of "storm water drain". As such, the club-house was
shifted to other land and there was delay in construction of club-house.
7. Now, our firm has decided not to press Ground No.1 to 3, in both the appeals of A.Y. 2012-
13 and A.Y. 2013-14, having ITA No.2795-2796/PUN/2016.
8. Further our firm confirms that the said Ground No.1 to 3 will not be contested at any higher
forum also.
I solemnly state on oath that the contents of this Affidavit are true to the best of my
knowledge and belief and that it conceals nothing and that no part of it is false."
20. Thus, the assessee does not want to press the grounds relating to taxation of
subscriptions, denial of deduction u/s 80IB(10) of the Act etc. In other words, by not pressing
ground 1 to 3, the CH Collection becomes taxable after netting of expenses incurred on CH.
However, referring to ground 4 & 5, ld. AR now pleads for taxing the same after netting with
the expenses of Rs. 78,10,182/- in an appropriate assessment years. The assessee argues
that the profit on CH should be ideally taxed in the assessment year 2014-15 only after
granting credit to the expenses of Rs. 78,10,182/- against the receipts of Rs. 99,00,000/-. The
ld. Counsel for the assessee argued vehemently stating that the entire gross receipts cannot
be taxed and relied heavily on the Hon'ble Supreme Court's judgement in the case of (i)
Bharat Earth Movers vs. CIT, 245 ITR 428 (SC) and (ii) Calcutta Co. Ltd. vs. CIT, 37 ITR 1
(SC). The assessee made the written submissions in this regard and the same are extracted as
under :-
"2. Submission w.r.t. Club-house receipts - AY 2012-13 & AY 2013-14:
2.1 Ground No. 1 to 3 - 80-IB(10) on club-house receipts:
Vide Ground No. 1 to 3, in AY 2012-13 and AY 2013-14, appellant has challenged non-grant of
deduction u/s 80-IB(10) of the ITA, 1961 on club-house receipts amounting to Rs. Rs.
63,00,000/- and Rs. 31,49,800/- in AY 2012-13 and AY 2013-14 respectively. Appellant no
longer wishes to press the said Grounds. Appellant is filing specific Affidavit in this regard,
which is submitted herewith as Annexure-1.
2.2 Ground No. 5 - Shifting of Income of club-house receipts to AY 2014-15:
Vide Ground No. 5, appellant is contending that the club-house receipts received during AY
2012-13 & AY 2013-14 should be treated as advance for these years and should be taxed in
AY 2014-15. This is because, due to various reasons, club-house could not be completed till
31/03/2012 and was constructed only in AY 2014-15 and was hand-over to the flat owners
only in AY 2014-15. As such, all the risk and reward were transferred by appellant in AY 2014-
15. Therefore it is submitted that the income from club-house should be taxed in AY 2014-15,
though appellant has erroneously disclosed the same in AY 2012-13 & AY 2013-14. Appellant
is also submitting herewith summary of club house receipts and expenses for AY 2012-13 to
AY 2013-14, which is submitted herewith as Annexure-2.
2.3 Ground No. 4 - Grant of expenses against club-house receipts:
If appellant succeeds at Ground No. 5, than Ground No. 4 becomes academic. If however,
Ground No. 5 is decided against appellant requests the Honourable Bench to kindly decide
Ground No. 4. Vide Ground No. 4, appellant is contending that if at all club-house receipts are
taxed in AY 2012-13 and AY 2013-14, relevant expenses should also be granted. Appellant is
contending the same on following analogy:
(a) Matching principle:
It is a basic principle that revenue and expenditure goes hand in hand and in any case the
entire gross receipts cannot be taxed. As such it is submitted that deduction or relevant
expenses should also be granted if receipt is ought to be taxed.
(b) Income (or profit) to be taxed and not gross receipt:
It is submitted that it is a settled principle that no income can be earned without incurring any
expenses. If no deduction for related expenses is granted, then, entire sales consideration will
get taxed. Such gross taxation is against first principles of tax-law. Appellant relies on the
following decisions in this regard:
i. Calcutta Co. Ltd. Vs. CIT - 37 ITR 1 (SC)
ii. Bharat Earth Movers Vs. CIT - 245 ITR 428 (SC)."
21. From the above submission by the AR, it is the submission of the assessee that 'due to
project completion method' adopted by the assessee, the net profit becomes taxable in
assessment year 2014-15. Alternatively, the claim of expenditure needs to be preponed
among the 3 assessment years. Assessee relied on set matching principle.
22. Ld. DR's Submissions: Per contra, the core argument of the ld. DR for the Revenue relates
to the details and claims made by the assessee in the return of income. So far as the
assessee's assertions in the affidavit relating to the non-pressing of the ground no.1 to 3 is
concerned, ld. DR relied heavily on the orders of the Assessing Officer/CIT(A) and the contents
given by the assessee in the return of income.
23. Regarding the taxation of the profits in the assessment year 2014-15, the year of
completion of the club house project, ld. DR submitted that allowing the claim of the assessee
will result in reduction of the returned income to the extent of Rs. 63,00,000/- for the
assessment year 2012-13 and Rs. 31,49,800/- for the assessment year 2013-14. However, ld.
DR has nothing to mention on the Nil return of income is reduced further. Eventually, it is a
case of restricting the deduction u/s 80IB(10) of the Act, which is different from a case
reducing the returned income.
24. Regarding the assessee's new demand for taxing the CH profits only in the assessment
year 2014-15 after granting set-off of the expenses on the club house project, the ld. DR for
the Revenue submitted that this issue has clearly come for the first time before the Tribunal
and, therefore, the matter can be remanded to the file of the lower authorities.
Decision of the Tribunal on the Grounds
25. Ground 1 to 3 not pressed - Affidavit : We have heard both the sides on this limited issue
relating to the taxation of club house subscription of Rs. 99,00,000/- in all the three
assessment years i.e. A.Y. 2012-13 to 2014-15. Before us, assessee filed an affidavit
informing their decision to give up the issue raised in ground 1 to 3 of the appeal. Therefore,
considering the concession, ground 1 to 3 of the assessee are dismissed as not pressed.
26. Issue of Netting of Expenses - Year of Taxation of Net Profits - the Club House : Regarding
the year of completion of the CH, it is born out of the records that the club house (CH) is
completed in the assessment year 2014-15. By this time, the assessee incurred the
expenditure on the club house construction amounting to Rs. 78,10,182/-. In principle, the
'project completion method' of accounting is followed by the assessee in respect of Midori
Project and the same is accepted by the Revenue. Following the same, the relevant income of
the Club House is taxable in the year of completion i.e. 2014-15 only. In this regard, both the
assessee and the Revenue have erred in dealing with the issue of year of taxation of profits of
this club house project in accordance with general law in force. While the assessee erred in
including the subscription as a part of the eligible income for the purpose of section 80IB(10)
of the Act in the return of income and thereby inflating the claim of deduction to that extent;
the Revenue failed to adhere to the principles of accounting (supra) and taxed the entire
amount as a taxable income. In the process, the claim in the return of income was partly
accepted to the extent of taxing the entire amount of Rs. 63,00,000/- without netting with
expenditure and partly, not accepted i.e. the allowability of deduction u/s 80-IB(10) of the Act.
Netting of expenses has to be allowed in favour of the assessee in the assessment years
proper. In our view, the decision of both the Revenue as well as the assessee requires
substantially modification considering the project completion method of accounting followed by
the assessee and the said method stands undisturbed by the Revenue. As such, the
expenditure is incurred in assessment year 2014-15 and we do not have the details of net
profit on this CH project. Correctness of expenditure is not examined. Therefore, we are of the
opinion, the matter should revisit to the file of the Assessing Officer with the following
directions :-
Directions :
(a) The club house construction project has to be recognised as a continuation of the "Midori
Phase-1" the project as it has the genesis in the Midori Phase-I project originally. Per se, it is
only a part of the housing project as the finances for the Club House is raised from the flat
buyers only. The profits of the CH is a taxable ones as per the Affidavit.
(b) The accounting methods followed by the assessee in respect of Midori Phase-I should be
equal applicable to the 'club house' construction as well and the year of taxation of the
relevant profits is ideally the assessment year 2014-15 only. Assessing Officer needs to
consider it in the remand proceedings.
(c) The completion certificate of the Club House issued by the local authority becomes
relevant. Assessee claims the CH is completed in the year 2014-15 but no completion
certificate is filed before us.
(d) The Assessing Officer is also required to examine the genuineness of the expenditure claim
of Rs. 78,10,182/- in the relevant assessment year. The profits of the Club House has to be
examined and quantified with the due process of law. The details relating to the assessment
for assessment year 2014-15 are not filed before us.
(e) For any other reason, the Assessing Officer decides to not follow the "principle of matching
expenses" qua project completion method for this Club House project, the profits of this
project may be divided among three assessment years i.e. A.Y. 2012-13, 2013-14 and 2014-
15 on 'proportionate' basis by applying the 'principle of matching' qua the subscription
received from the flat buyers.
(f) The Assessing Officer shall grant reasonable opportunity of being heard to the assessee in
deciding the issue. The Assessing Officer is required to pass a speaking order on this issue
considering the relevant law in course. Thus, the relevant alternative grounds 4 & 5 raised by
the assessee on this issue are allowed as above.
27. In the result, the appeal of the assessee in ITA No.2795/PUN/2016 for the assessment
year 2012-13 is partly allowed for statistical purposes.
ITA No.2796/PUN/2016 - A.Y. 2013-14
28. The grounds raised by the assessee are as under:-
"1. The learned CIT(A)-12, Pune erred in law and on facts in confirming the disallowance of
deduction amounting to Rs. 31,49,800/- u/s 80-IB(10) of the ITA, 1961 made by the learned
DCIT, Central Circle-2(1), Pune (hereinafter referred to as the learned AO).
2. The learned CIT(A)-12 and the learned AO erred in law and on facts in disallowing
deduction u/s 80-IB(10) of the ITA, 1961 for receipts / revenue related to club-house facility
amounting to Rs. 31,49,800/- on the reason that the said club-house facility was not
mentioned in the last approved plan of the MIDORI housing project. The learned IT-Authorities
ought to have appreciated that club-house was initially approved by the PMC and the club
house was a contractual obligation of the appellant anyway.
3. The learned CIT(A)-12 and the learned AO erred in law and on facts in not appreciating that
non-mention of a facility / amenity in the approved building plan does not lead to a proposition
that the related revenue / profit from such amenity is not a part of profits derived from the
said housing project. The learned IT-Authorities ought to have appreciated that the said profit
from club-house facility was a part and parcel of a housing project and incidental thereto.
4. Alternatively and without prejudice to Ground No. 2, & 3, the learned CIT(A)-12 and the
learned AO erred in law and on facts in not granting the deduction of corresponding
expenditure required to be incurred for the construction & development of the club-house.
5. Alternatively and without prejudice to the Ground No. 1, 2 & 3, the learned CIT(A)-12 and
the learned AO erred in law and on facts in not shifting the income of Rs. 31,49,800/- being
club house membership charges, to AY 2014-15 since the related risks and rewards were
transferred only in AY 2014-15, when the said club-house was constructed & developed.
6. The learned CIT(A)-12 and the learned AO erred in law and on facts in holding that the
provisions of section 115-JC of the ITA, 1961 is applicable in appellant's case. The learned IT-
Authorities ought to have appreciated the fact that other than MIDORI project (eligible for
deduction u/s 80-IB(10) of the ITA, 1961) there was no housing project developed by the
appellant.
7. The learned CIT(A)-12 and the learned AO erred in law and on facts in not appreciating the
fact that since appellant's only source of income is from housing project eligible u/s 80-IB(10)
of the ITA, 1961; appellant will not be in a position to ever utilize the AMT tax credit, as such
defeating the intention of section 115-JC of the ITA, 1961.
8. Appellant craves, leave to add / modify / delete all or any of the grounds of appeal."
29. The assessee also raised the additional ground of appeal, which reads as under :-
"9. Appellant contends that the provision of section 115-JC of the ITA, 1961 is not applicable
to appellant as the MIDORI housing project (eligible for deduction u/s 80-IB(10) of the ITA,
1961) has been sanctioned by the local authority i.e. PCMC on 30/03/2007 and was granted
completion certificates by PCMC on 29/03/2012, which is prior to introduction of AMT
provisions u/s 115-JC of the ITA, 1961 for Partnership Firms by Finance Act, 2012."
30. The basic facts were already narrated above while dealing with the appeal for the
assessment year 2012-13. From the grounds extracted above, it is evident that the issues
relating to the addition of deduction u/s 80IB(10) of the Act amounting to Rs. 31,49,800/-.
31. Addition of Rs. 31,49,800/-: Grounds no.1 to 3 are dismissed as they are not pressed as
conceded by the assessee vide the common affidavit (supra) filed by the assessee for both the
years.
32. Expenses set off: Grounds no.4 and 5 relating to taxation of Club House profits and raised
alternatively are common to the grounds no.4 and 5 for the assessment year 2012-13 in the
appeal vide ITA No.2795/PUN/2016. They were already adjudicated by us and decided in
favour of the assessee in principle. These grounds are remanded with certain directions. Thus,
our decision in grounds no.4 and 5 of appeal in ITA No.2795/PUN/2016 shall apply mutatis-
mutandis to these grounds no.4 and 5 also. Thus, the grounds no.4 and 5 are allowed for
statistical purposes.
33. Applicability of section 115JC of the Act - Project Approval in 2007: Grounds no.6 and 7
relate to the applicability of the provisions of section 115JC of the Act relating to the "Special
provisions for payment of tax by certain persons other than a company". Further, the
additional ground raised by the assessee also connected to the grounds no.6 and 7.
Considering the not pressing of certain grounds no.1, 2 & 3 and commonality of the issues
raised in grounds no.4 and 5 which are already adjudicated in the assessment year 2012-13,
the only issue left for adjudication relating to the applicability of the provisions of section
115JC of the Act (ground no.6 & 7 and additional ground). The relevant facts of this issue are
narrated as follows.
34. Facts - Assessing Officer's case: The assessee is non-corporate assessee. So far as the
MAT provisions are concerned relevant to the non-corporate assessee, the provisions of section
115JC of the Act were brought into the Statute by the Finance Act, 2012 w.e.f. 1.4.2013 qua
the persons other than a company like the present assessee. According to the said provisions
of the Act, the assessee is under statutory obligation to pay income tax called "Alternate
Minimum Tax (AMT)" at the rate of eighteen and one-half percent where its regular income tax
is less than the AMT. AMT at the rate of 18.5% is paid and the adjusted total income as
specified in sub-section (2) of section 115JC of the Act. Sub-section (3) of section 115JC of the
Act mandates the assessee to file a return from the Accountant certifying the (i) adjusted total
income and (ii) AMT along with return of income. The tax credit is available to the assessee in
respect of the AMT so paid by the assessee. As per the provisions of section 115JD, the tax
credit is available to the assessee upto the 15 assessment years. The section does not provide
for refund of the AMT paid by the assessee, if the credit facility is not used for the said 15
years. Further, Midori Phase-I is the only project executed by the assessee and no other
project is undertaken by it. As on date, the assessee has no project on hand and on this fact
the assessee did not comply with the said provisions of section 115JC of the Act. Considering
the fact, the assessee will not have any taxable income. Thus, it is a case of single project
venture and there is no change of partners, profits of the housing project Midori Phase-I is
never taxable etc. Further, it is the case of the assessee that there is no change of AMT on the
assessee as the AMT as an alternate mechanism to normal tax. Further, referring to the
project on hand, ld. Counsel for the assessee argued that the provision of section 115JC of the
Act to this non-corporate assessee was not an existence and the project was anyway approved
by the local authorities. Even during the time of provisions of the plans, the provisions were
not existence. The provisions introduced by the Finance Act, 2012 w.e.f. 1.4.2013 and the
same are not applicable retrospectively to the project which took place in the year 2007. The
assessee also put forward many arguments stating that the alternate mechanism is next stand
of the MAT and the same is only on alternate mechanism of collection of taxes and the same is
not separate charge on the total income of the assessee. The assessee relied on various
decisions in support of the same. Further, mentioning that the assessee has developed only a
single housing project called Midori Phase-I whose income is exempt u/s 80IB(10) of the Act if
the AMT is applied. There is no discussion about the assessee claimed for credit of the same or
claimed of refund of the same alternatively. All these arguments of the ld. Counsel for the
assessee was rejected by the Assessing Officer and the CIT(A) merely relying on the literal
interpretation of the provisions of section 115JC of the Act. In this assessment year of the
assessee, the Assessing Officer noted that the assessee neither filed the reports of the
Accountant as required u/s 115JC(2) of the Act nor paid AMT despite the facts there exist the
book profits of the assessee is taxable under the AMT. The Assessing Officer observed that this
new provision of section 115JC of the Act is applicable for the assessment year 2013-14 and
subsequent assessment year. Accordingly, the Assessing Officer computed the AMT on the
book profits of Rs. 10,67,79,215/- and assessed regular tax under the normal provisions of the
Act.
35. Before the CIT(A): The CIT(A) rejected the above mentioned arguments of the assessee.
The CIT(A) rejected the equity based arguments of the assessee and relied heavily on the
literal interpretation of the said provisions. In the process, the CIT(A) ignored the fact that the
assessee does not have any other project and there is no way the credit facility if available. He
also ignored the fact that there is no benefit of refund in the tax collected under the AMT
provisions. However, he ignored the fact when there is no scope for availing the tax credit or
refund facility under the said provisions, the Government never intended to tax the profits of
the eligible projects indirectly withdrawing the deduction under the Statute. The CIT(A)
ignored this before confirming the order of the Assessing Officer. The CIT(A) also never
deliberate on the argument of the assessee how the newly inserted provisions of section 115JC
of the Act applied to the projects approved prior to the amended provisions.
36. Aggrieved with the above orders of the lower authorities, the assessee is in appeal before
the Tribunal with the above extracted grounds no.5 and 6 and the additional ground.
37. Before the Tribunal: Before us, ld. Counsel for the assessee reiterated the above
submissions of the assessee on one hand and filed the following written submissions :-
"3. Submission w.r.t. Applicability of section 115-JC of the 1TA. 1961 - AY 2013-14:
3.1 Ground No. 6 & 7 and Additional Ground No. 9:
Vide Ground No. 6 & 7 and Additional Ground No. 9, appellant is objecting the applicability of
provisions of section 115JC of the ITA, 1961 in the present case due to peculiar and piquant
situation. Appellant is contending the same on following analogy:
(a) Single Project Venture:
Appellant was firm was formed to develop only a single housing project called as MIDORI by
Mr. Vikram Gaikwad and Mr. Vinayak Nimhan. It is submitted that there is no other project
other than MIDORI project, and no any other project envisaged by appellant. Appellant has
claimed deduction u/s 80-IB(10) of the ITA, 1961 on the profits / income from the said
project. This is also evident from the Partnership Deed submitted at submitted at Page No. 57
to 64 of Paper Book -
I. Appellant is also submitting herewith English Translation of the key clauses of the
Partnership Deed which is attached herewith as Annexure-4.
(b) No change in partners:
It is submitted that there is no change in the partners of the appellant firm. There is only
change in profit sharing ratio between the partners. The detail of the change in profit sharing
ratio between the partners is as follows:
Date Profit Sharing

Ratio
From To Mr. Vikram Mr. Vinayak Total

Gaikwad Nimhan
01/08/2006 09/02/2012 50% 50% 100%
10/02/2012 03/02/2013 64% 36% 100%
04/02/2013 02/03/2014 69% 31% 100%
03/03/2014 31/03/2019 67% 33% 100%
(c) Profits of Housing Project MIDORI not taxable:
It is submitted that the MIDORI housing project was approved by the local authority i.e. PCMC
on 30/03/2007 and was granted completion certificate by PCMC on 29/03/2012. As such, the
profits of housing project MIDORI is eligible for deduction u/s 80-IB(10) of the ITA, 1961 and
the same has also been granted by the learned AO.
(d) No separate charge of AMT:
It is submitted that AMT is an alternate mechanism to normal tax and it is not a charge on
income or Adjusted Total Income (ATI) per se. There is no charge of AMT on the income / ATI
emerging from the combined reading f section 2(24), section 4, and section 5 of the ITA,
1961. In absence of an independent charge for AMT u/s 4 of the ITA, 1961; its scope and levy
will have to be understood as an alternate mechanism of taxation.
(e) Section 115JC extended arm of section 115JB (earlier 115J / 115JA):
It is submitted that section 115JC of the ITA, 1961 is only an extended arm of section 115JB
(earlier 115J / 115JA) of the ITA, 1961. The change in the tax regime under the said sections
is as follows:
Period count Year Book profit MAT/AMT Remark

taxation credit section
section
1 Prior to 1987 - - No any book

profit taxation
existed in ITA
2 1987-1990 MAT u/s 115J Deductions

(only restricted due
companies to 115J, were
covered) permitted to
be carried
forward
3 1990-1997 -- -- --
4 1997-2000 MAT u/s 115JA (same as 2)

(only
companies
covered)
5 2001-2012 MAT u/s 115JB 115JAA MAT credit

(only entitlement
companies period
covered) extended from
time to time-
i.e. 5 years -
to 10 years -
to 15 years....
6 2012-2013 MAT u/s 115JB 115JAA

(for (companies +
companies) LLP)
AMT u/s 115JC
(for LLPs)
7 2013-onwards MAT u/s 115JB 115JAA (for all

(for types of
companies) assesses
AMT u/s 115JC paying either
(for all other MAT or AMT)
non-company
assesses)
(f) Clarification of various High Courts about alternate mechanism of MAT:
As submitted earlier, AMT is extended arm of MAT. In the MAT regime, various High Courts
have held that MAT is only an alternate mechanism for collection of tax:
Ester India Ltd Vs. Union of India - 260 CTR 225 (Delhi)
"29. The non obstante clause indicates that the provisions of 115JA of the Act would override
the other provisions of the Act for computation of taxable income in certain cases falling within
the sweep of section 115JA. Section 115JA of the Act is a special provision to calculate taxable
income in certain cases. The levy of income tax is under Section 4 of the Act, which is the
charging section. Section 115J of the Act only creates a legal fiction to supplant the measure
of total income which is chargeable to tax. Thus, indisputably, tax as computed on the basis of
Section 115J of the Act is a tax on income."
Suryalatha Spinning Mills Ltd. Vs. Union of India - 223ITR 713 (AP)
"14. The next contention is that sub-section (1) of section 115J results in double taxation. We
are unable to appreciate this contention. Firstly because what is being taxed is income
determined on the basis prescribed under the said impugned provision and there is no
provision to re-tax the same income, as such as of fact there is no double taxation. And
secondly because double taxation per se would not render an otherwise valid provision, invalid
- Jain Bros's case (supra)."
Karimtharuvi Tea Estate Ltd. Vs. DCIT-247 ITR 22 (Kerala)
"What is taxed is not fictional or hypothetical income-By this section certain tax concessions
are restricted or curtailed to certain extent so that the company pays some tax-This is not
unreasonable so as to make it violative of Art. 14 or 19 of the Constitution-Sec. 115J is not
therefore illegal or unconstitutional"
Further, this view is also emerging from various CBDT Circulars:
- Circular No. 495 - Finance Act 1987
Copies of the above referred judgments and CBDT Circulars are attached herewith and are
marked as Annexure-5 and Annexure-6 respectively.
(g) No occasion to claim Tax Credit:
As submitted earlier, appellant firm was formed only to develop a single housing project called
as MIDORI, which is eligible for deduction u/s 80-IB(10) of the ITA, 1961. If appellant is made
liable to pay AMT, there will be no occasion to appellant to claim the credit of the same as
there is no any other project envisaged.
(h) Reliance on the decision of S. K. Venture:
It is submitted that the MIDORI project was approved by the local authority i.e. PCMC on
30/03/2007 and was granted completion certificate on 29/03/2012. Whereas, the provisions of
section 115-JC of the ITA, 1961 was made applicable to appellant firm from 01/04/2012. As
such, when appellant envisaged the MIDORI project which was eligible for deduction u/s 80-
IB(10) if the ITA, 1961; there was no any tax which appellant was liable to pay. Considering
the doctrine of promissory estoppel, it is submitted that provisions of section 115-JC of the
ITA, 1961 is not applicable to appellant. Appellant in this regard is placing reliance on the
decision of Honourable Mumbai ITAT in the case of S. K. Venture Vs. ITO - ITA No.
1248/MUM/2018. Copy of the same has already been submitted before the Honourable Bench.
In the said decision the Honourable ITAT has considered various judgements of the
Honourable Apex Court. Further, appellant has also culled out the similarity between the facts
of appellant case with that of S. K. Venture. Comparison of the same is attached herewith as
Annexure-7.
(i) Prayer:
Considering the above facts and legal pronouncements, it is submitted that provisions of
section 115-JC of the ITA, 1961 is not applicable to appellant."
38. DR's Arguments: Ld. DR relied heavily on the order of the Assessing Officer and the
CIT(A). However, no specific arguments are made on the prospective nature of the
amendments in Finance Act, 2013.
Decision of the Tribunal
39. We heard both the parties and perused the orders of the lower authorities. The arguments
of the ld. Counsel for the assessee are already summarized in the preceding paragraphs of this
order. The most important aspect of the submission relates to the applicability of the recent
decision of Mumbai Bench of the Tribunal in the case of M/s. S.K. Ventures vs. ITO vide ITA
No.1248/Mum/2018 for the assessment year 2013-14 dated 05.03.2019. As can be seen in
the extract above, i.e. (h) relating to the reliance on the decision of M/s. S.K. Ventures
(supra), ld. Counsel submitted that this decision is squarely applicable to the fact of the
present case. Brining our attention to the Annexure-7 to the written submissions, ld. Counsel
submitted that the fact of both the cases are identical while the project was started in 2007
and the project was completed in 2012. In both the cases, the provision of section 115JC of
the Act is applicable considering the year of completion of the project. However, the date of
approval by the local authorities is relevant and in both the cases the projects were approved
year back in 2007 and the provisions of section 115JC of the Act which were brought into
Statute by 1.4.2013 cannot be applied retrospectively as they are applied prospectively to the
projects approved after the said date.
40. Considering the importance of the same, we proceed to extract the relevant contents of
the said decision of the Tribunal (supra) and the same are extracted hereunder :-
"5. The only issue in this appeal is against the order of the CIT(A) in sustaining the
applicability of provisions of section 115 JC of the Act disregarding the fact that the housing
project undertaken by the assessee has been approved prior to the date of introduction of the
provisions of section 115 JC of the Act and also completion of the project. For this, the
assessee has raised the following ground:
"In the facts and circumstances of the case and in law, the ld CIT(A) erred in sustaining the
applicability of the provisions of section 115JC in case of the assessee disregarding the fact
that the housing project undertaken by the assessee has been approved prior to the date of
introduction of the provision of section 115JC of the Act."
6. Briefly stated facts are that in this case the assessee AOP filed the original return of income
by way of e-filing vide dated 30.9.2013 and subsequently the return was revised by e-filing on
31.3.2015. This return has been processed under section 143(1) of the Act and subsequently,
the assessment was completed under section.143(3) of the Act vide order dated 30.3.2016 by
accepting the returned income except making of disallowance of non payment of MVAT and
service tax under section.43B of the Act. The deduction claimed under Chapter VIA under
section 80IB(10) in respect of housing project namely; KIrishna Regency at Kalyan was
accepted amounting to Rs. 6,54,91,914/- but the Assessing Officer invoked the provisions of
section 115 JC of the Act and adjusted total income and charged alternate minimum tax in
accordance with this provisions, which was confirmed in first appeal.
7. Ld Counsel for the assessee now before us stated that the assessee is challenging only
limited issue i.e applicability of provisions of section 115 JC of the Act to the assessee for the
relevant assessment year 2013-14. Ld Counsel for the assessee explained that the provisions
of section 115 JC of the Act was made applicable to certain persons other than a company by
the Finance Act (No.2) with effect from 1.4.2013. Ld Counsel explained that in the project i.e.
Krishna Regency, the assessee has claimed deduction 80IB(10), as the same was started in
April, 2007 and was completed in March, 2012. Ld Counsel for the assessee referred to pages
19 to 21 of assessee's paper book, wherein, completion certificate of the project is enclosed at
pages 19 to 21 of PB and English translation at pages 20-21. Ld Counsel for the assessee drew
our attention to pages 20 & 21 of PB, wherein, building completion certificate issued by Kalyan
Dombivli Muncipal Corporation Town Planning Department is enclosed. This completion
certificate is dated 31.3.2012. Ld Counsel stated that the provisions of section 115 JC was
made applicable to certain persons other than a company by substituting limited liability
partnership by the Finance Act (No.2) with effect from 1.4.2013 and the assessee's project
commenced construction in April, 2007 and project was completed as on the date of
completion certificate issued by Kalyan Dombivli Muncipal Corporation Town Planning
Department dated 31.3.2012. According to him, once the assessee has completed the project
before coming into force of a particular provision, that provision cannot be applied to the facts
of the assessee's case or in the year when the income has been booked by the assessee in
that year. Ld Counsel for the assessee relied on the decision of Hon'ble Supreme Court in the
case of M/s. Motilal Padampat Sugar Mills Co. Ltd vs State of Uttar Pradesh and others, AIR
1979 SC 621 1978 Indlaw SC 56, wherein, the Hon'ble Court has explained the doctrine of
promissory estoppel and meaning thereby. The Hon'ble Supreme Court has considered
whether the State is bound and if so to what extent it is bound by the principle of promissory
estoppel. Ld Counsel relied on the following paragraphs of the judgement of Hon'ble Supreme
Court in the case of Motilal Padampat Sugar Mills Co. Ltd (supra) as under:
"On 10th October, 1968 a news item appeared in the National Herald in which it was stated
that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of
three years under Section 4A of the U. P. Sales Tax Act to all new industrial units in the State
with a view to enabling them to come on firm footing in developing stage. This news item was
based upon a statement made by Shri M. P. Chatterjee the then Secretary in the Industries
Department of the Government. The appellant, on the basis of this announcement, addressed
a letter dated 11th October, 1968 to the Director of Industries stating that in view of the Sales
Tax Holiday announced by the Government, the appellant intended to set up a Hydro-
generation Plant for manufacture of Vanaspati and sought for confirmation that this industrial
unit, which they proposed to set up, would be entitled to Sales Tax Holiday for a period of
three years from the date it commences production. The Director of Industries replied by his
letter dated 14th Oct., 1968 confirming that "there will be no sales tax for three years on the
finished product of your proposed Vanaspati factory from the date it gets power connection for
commencing production." The appellant later addressed a letter dated 22nd January, 1969 to
the respondent who was the Chief Secretary to the Government. The respondent stated
categorically in his letter in reply dated 23rd January, 1969 that the proposed Vanaspati
factory of the appellant "will be entitled to exemption from U. P. Sales Tax for a period of
three years from the date of going into production and that this will apply to all Vanaspati sold
during that period hi Uttar Pradesh it self and expressed his surprise that a letter from the
Chief Secretary to tis(R) State Government stating this fact i& clear and unambiguous words
should not carry conviction with the financial institutions;
Held it was clear from the letter of the respondent dated 23rd January, 1969 that a categorical
representation was made by the respondent on behalf of the Government that the proposed!
vanaspati factory of the appellant would be entitled to exemption from sales tax in respect of
sales of vanaspati effected in Uttar Pradesh for a period of three years from the date of
commencement of production. The letter dated 23rd January, 1969 clearly showed that the
respondent made this representation in his capacity as the Chief Secretary of the Government,
and it was, therefore, a representation on behalf of the Government The appellant relying on
this representation of the Government, borrowed moneys from various financial institutions,
purchased plant and machinery from M/s. De Smith (India) Pvt. Ltd., Bombay and set up a
vanaspati factory at Kanpur. The facts necessary for invoking the doctrine of promissory
estoppel were, therefore, clearly present and the Government was bound to carry out the
representation and exempt the appellant from sales tax in respect of sales of vanaspati
effected by it in Uttar Pradesh for a period of three years from the date of commencement of
the production. The Government was bound on the principle of promissory estoppel to make
good the representation made by it."
8. Ld Counsel for the assessee also relied on the decision of Hon'ble Supreme Court in the
case of CIT vs Sarkar Builders, (2015) 57 taxmann.com 313(SC), wherein, the Hon'ble
Supreme Court has considered this issue of prospectivity and applicability of the provisions
vide para 20 to 22 as under:
"(20) Having regard to the above, let us take note of the special features which appear in
these cases:
(a) In the present case, the approval of the housing project, its scope, definition and
conditions, all are decided and dependent by the provisions of the relevant DC Rules. In
contrast, the judgment in M/s. Reliance Jute and Industries Ltd. was concerned with income
tax only.
(b) The position of law and the rights accrued prior to enactment of Finance Act, 2004 have to
be taken into account, particularly when the position becomes irreversible.
(c) The provisions of Section 80IB(10) mention not only a particular date before which such a
housing project is to be approved by the local authority, even a date by which the housing
project is to completed, is fixed. These dates have a specific purpose which gives time to the
developers to arrange their affairs in such a manner that the housing project is started and
finished within those stipulated dates. This planning, in the context of facts in these appeals,
had to be much before 01.04.2005.
(d) The basic objective behind Section 80IB(10) is to encourage developers to undertake
housing projects for weaker section of the society, inasmuch as to qualify for deduction under
this provision, it is an essential condition that the residential unit be constructed on a
maximum built up area of 1000 sq.ft. where such residential unit is situated within the cities of
Delhi and Mumbai or within 25 kms. from the municipal limits of these cities and 1500 sq.ft. at
any other place.
(e) It is the cardinal principle of interpretation that a construction resulting in unreasonably

harsh and absurd results must be avoided.
(f) Clause (d) makes it clear that a housing project includes shops and commercial
establishments also. But from the day the said provision was inserted, they wanted to limit the
built up area of shops and establishments to 5% of the aggregate built up area or 2000 sq.ft.,
whichever is less. However, the Legislature itself felt that this much commercial space would
not meet requirements of the residents. Therefore, in the year 2010, the Parliament has
further amended this provision by providing that it should not exceed 3% of the aggregate
built up area of the housing project or 5000 sq.ft., whichever is higher. This is a significant
modification making complete departure from the earlier yardstick. On the one hand, the
permissible built up area of the shops and other commercial shops is increased from 2000
sq.ft. to 5000 sq.ft. On the other hand, though the aggregate built up area for such shops and
establishment is reduced from 5% to 3%, what is significant is that it permits the builders to
have 5000 sq.ft. or 3% of the aggregate built up area, 'whichever is higher'. In contrast, the
provision earlier was 5% or 2000 sq.ft., 'whichever is less'.
(g) From this provision, therefor, it is clear that the housing project contemplated under sub-
section (10) of Section 80IB includes commercial establishments or shops also. Now, by way
of an amendment in the form of Clause (d), an attempt is made to restrict the size of the said
shops and/or commercial establishments. Therefore, by necessary implication, the said
provision has to be read prospectively and not retrospectively. As is clear from the
amendment, this provision came into effect only from the day the provision was substituted.
Therefore, it cannot be applied to those projects which were sanctioned and commenced prior
to 01.04.2005 and completed by the stipulated date, though such stipulated date is after
01.04.2005.
(21) These aspects are dealt with by various High Courts elaborately and convincingly in their
judgments. It is not necessary to go into the detailed reasoning given by these High Courts.
However, we would like to extract the following discussion from the judgment dated
25.07.2014 of the Bombay High Court in ITA Nos. 201 and 308 of 2012, where this very
aspect is answered in the following manner:
"36. There is yet another reason for coming to the aforesaid conclusion. Take a scenario where
an Assessee, following the project completion method of accounting, has completed the
housing project approved by the local authority complying with all the conditions as set out in
section 80-IB(10) as it stood prior to 1st April, 2005. If we were to accept the argument of the
Revenue, then in that event, despite having completed the entire construction prior to 1st
April, 2005 and complying with all the conditions of section 80-IB(10) as it stood then, the
Assessee would be disentitled to the entire deduction claimed in respect of such housing
project merely because he offered his profits to tax in the A.Y. 2005-06. In contrast, if the
same Assessee had followed the work-in-progress method of accounting, he would have been
entitled to the deduction under section 80-IB(10) upto the A.Y. 2004-05, and denied the same
from A.Y. 2005-06 and thereafter. It could never have been the intention of the Legislature
that the deduction under section 80-IB(10) available to a particular Assessee would be
determined on the basis of the accounting method followed. This, to our mind and as rightly
submitted by Mr. Mistry, would lead to startling results. We therefore have no hesitation in
holding that section 80-IB(10) is prospective in nature and can have no application to a
housing project that is approved before 31st March, 2005. As the deduction sought to be
claimed under section 80-IB(10) is inseparably linked with the date of approval of the housing
project, it would make no difference if the construction of the said project was completed on or
after 1st April, 2005 or that the profits were offered to tax after 1st April, 2005 i.e. in A.Y.
2005-06 or thereafter. We therefore find no substance in the argument of the Revenue that
notwithstanding the fact that the housing project was approved prior to 31st March 2005, if
the construction was completed on or after 1st April, 2005 or if the profits are brought to tax
in the A.Y. 2005-06 or thereafter, the said housing project would have to comply with the
provisions of clause (d of section 80-IB(10). To our mind, we do not think that the
condition/restriction laid down in clause (d) of section 80-IB(10) has to be revisited and/or
looked at and complied with in the assessment year in which the profits are offered to tax by
the Assessee. When the Assessee claims a deduction under section 80-IB(10), the Assessee is
required to comply with such a condition only if it is on the statute-book on the date of the
approval of the housing project and it has nothing to do with the year in which the profits are
brought to tax by the Assessee. We have come to this conclusion only because we find that
clause (d) of section 80-IB(10) is inextricably linked to the date of the approval of the housing
project and the subsequent development/construction of the same, and has nothing to do with
the profits derived therefrom. We may hasten to add that if a particular condition is not
inseparably linked to the date of approval of the housing project, different considerations
would arise. However, we are not called upon to decide any such condition and hence we are
not laying down any general proposition of law, save and except that clause (d) of section 80-
IB(10), being a condition linked to the date of the approval of the housing project, would not
apply to any housing project that was approved prior to 31st March, 2005 irrespective of the
fact that the profits of said housing project are brought to tax after the said provision was
brought into force."
(22) At this juncture, we would like to quote the following passage from Commissioner of
Income Tax, U.P. v. M/s. Shah Sadiq and Sons (supra) :
"14. Under the Income Tax Act of 1922, the assessee was entitled to carry forward the losses
of the speculation business and set off such losses against profits made from that business in
future years. The right of carrying forward and set off accrued to the assesee under the Act of
1922. A right which had accrued and had become vested continued to be capable of being
enforced notwithstanding the repeal of the statute under which that right accrued unless the
repealing statute took away such right expressly or by necessary implication. This is the effect
of Section 6 of the General Clauses Act, 1897.
15. In this case the 'savings' provision in the repealing statute is not exhaustive of the rights
which are saved or which survive the repeal of the statute under which such rights had
accrued. In other words, whatever rights are expressly saved by the 'savings' provision stand
saved. But, that does not mean that rights which are not saved by the 'savings' provision are
extinguished or stand ipso facto terminated by the mere fact that a new statute repealing the
old statute is enacted. Rights which have accrued are saved unless they are taken away
expressly. This is the principle behind Section 6(c) of the General Clauses Act, 1897. The right
to carry forward losses which had accrued under the repealed Income Tax Act of 1922 is not
saved expressly by Section 297 of the Income Tax Act, 1961. But, it is not necessary to save a
right expressly in order to keep it alive after the repeal of the old Act of 1922. Section 6(2)
saves accrued rights unless they are taken away by the repealing statute. We do not find any
such taking away of the rights by Section 297 either expressly or by implication."
9. Ld Counsel for the assessee also relied on the decision of Hon'ble Supreme Court in the
case of CIT vs Vatika Township (P) Ltd., (2014) 227 Taxman 121 2014 Indlaw SC 616 (SC).
10. On the other hand, ld Sr Departmental Representative relied on the amended provision of
section 115 JC of the Act and stated that the amended provisions w.e.f 1.4.2013 will apply for
and from assessment year 2013-14.
11. We have heard the rival contentions and gone through the facts and circumstances of the
case. The admitted facts are that the assessee has claimed deduction 80IB(10), as the
construction of the project was started in April, 2007 and was completed in March, 2012. We
noted this fact from the paper book pages 19 to 21 of assessee, wherein, completion
certificate of the project is enclosed at pages 19 to 21 of PB and English translation at pages
20-21. Ld Counsel for the assessee drew our attention to pages 20 & 21 of PB, wherein,
building completion certificate issued by Kalyan Dombivli Muncipal Corporation Town Planning
Department is enclosed. In view of these facts, we have considered the arguments made by
both the sides and also considered the applicability of the provisions of section 115JC of the
Act in the case of the assessee applied by the AO disregarding the fact that the housing
project undertaken by the assessee has been approved prior to the date of introduction of the
relevant provisions. The assessee is engaged in the construction and sale of immovable
property i.e. builders. The housing project undertaken by the assessee was approved by the
competent authority and accordingly, assessee claimed deduction under section 80IB of the
Act of 100% of the profit from the housing project. We noted that Chapter XII BA i.e. special
provisions relating to certain persons other than a company was introduced by the Finance Act
2011 w.e.f. 1.4.2012 and made applicable for and from A.Y. 2012-13 in respect of limited
liability partnerships. Further, this provision was made applicable to other categories of
persons other than a company with effect from 1.4.2013 by the Finance Act, 2012.
Accordingly, the provisions of section 115JC of the Act was made applicable to profit from
housing projects deductible under section.80IB(10) of the Act only in respect of housing
projects approved by the competent authority on or after 1.4.2013. Similar case was dealt
with by co-ordinate bench of this Tribunal in the case of Neha Home Builders Pvt Ltd.vs CIT,
(2018) 92 taxmann.com 102 (Mum), wherein, it is held that the assessee was entitled to claim
of deduction under section, 80IB(10) of the Act while computing book profit u/s.115JB of the
Act in respect to the profit of the housing project.
12. We have also gone through the case law of Hon'ble Supreme Court in the case of Sarkar
Builders (supra), wherein, Hon'ble Supreme court has considered the provisions of section 6 of
General clauses Act 1897 and also considered the saving provisions in the repealing statute
which is not exhaustive of the rights and which are saved or which survive the repeal of the
statute under which such right had accrued. Hon'ble Supreme Court has considered whatever
rights are expressly saved by the saving provisions stand saved but that does not mean rights
which are not saved by the saving provisions are extinguished or stand ipso facto terminated
by the mere fact that a new statue repealing the old statute is enacted. Even Hon'ble
Supreme Court in the case of Vatika Township P Ltd (supra) has considered the various rules
guiding how a legislation has to be interpreted, one established rule is that unless a contrary
intention appears, a legislation is presumed not to be intended to have a retrospective
operation. The idea behind the rule is that a current law should govern current activities. Law
passed today cannot apply to the events of the past. One principle of law is known as lex
prospicit non respicit law looks forward not backward. It was also observed that as was
observed in Philips vs Eyre (1870) LR 6 QB 1 a retrospective legislation is contrary to the
general principle that legislation by which the conduct of mankind is to be regulated when
introduced for the first time to deal with future acts ought not to change the character of past
transactions carried on upon the faith of the then existing law.
13. In view of the above, we are of the considered opinion that the provisions of section 115JC
of the Act as brought in the statute by the Finance Act (No.2) w.e.f. 1.4.13 will apply
prospectively and to the projects claiming deduction under section.180IB(10) of the Act, which
have come or approved on or after that date. Accordingly, this provision cannot be applied to
the projects completed or approved retrospectively upto 31.3.2012. Hence, we allow the
appeal of the assessee."
41. The ratio of the above decision of the Tribunal in the case of S.K. Ventures (supra) says
that the provisions of section 115JC of the Act is applicable to the projects which come into
existence or which are approved on or after that date i.e. 01.04.2013. The said new provisions
of the Act are not applicable retrospectively to the projects completed or approved up to the
said date 31.03.2012. For supporting the above point of view and in favour of prospective
application of amended provisions, ld. Counsel for the assessee relied on the binding
judgements in the case of (i) CIT vs. Sarkar Builders, 375 ITR 392 (SC); (ii) CIT vs. Vatika
Township (P.) Ltd., 367 ITR 466 (SC); (iii) CIT vs. Brahma Associates, 333 ITR 289 (Bom-HC);
and, (iv) Anil Kumar Gopikishan Agrawal vs. ACIT, 106 taxmann.com 137 (Guj-HC). These
decisions were pronounced in the context of section 80IB(10) of the Act and the amendment
to section 113 and section 153B etc of the Act.
42. Thus, the date & year of approval of the project become relevant to not only to the
projects of section 80IB(10) of the Act but also to such projects cum the AMT case covered u/s
115JC of the Act. The doctrine of impossibility becomes relevant here too. If the assessee is
aware of the obligations of the Statute for paying AMT in the assessment year 2013-14, the
assessee would not have taken of this project at all in the year 2007. Alternatively, the
assessee would have followed a project completion method thereby he would be have planned
to the taxation as per the then existing provisions of the Act. In our view, this is a case where
assessee was not aware of the new legislation by way of provisions of section 115JC of the Act.
43. Therefore from this point of view, the decision of the Tribunal in the case of S.K. Ventures
(supra) is relevant due to commonality of facts and the law. We also find relevant to extract
the comparison of facts in both the cases and the same is extracted hereunder :-
Comparison of Facts
Particulars S.K. Ventures V. ITO ITA Vikram Developers V. DCIT

No.1248/Mum/2018 ITA No.2796/Pun/2016
A.Y. 2013-14 2013-14
Status AOP Partnership Firm
Name of the house project Krishna Regency, Kalyan Midori, Pimple Nilakh, Pune
Project started April 2007 March 2007
Completion certificate date 31-03-2012 29-03-2012
Whether AMT paid in return No No
Total income taxed as AMT 6,54,91,914 10,67,79,216

u/s 115JC
44. The above facts of the assessee and the case of M/s. S.K. Ventures (supra) are very close.
Hence, the decision of the Tribunal in that case becomes extremely relevant.
45. In addition to the decision of the Tribunal in the case of M/s. S.K. Ventures (supra), the
below discussed case laws also support the assessee's contention that the provisions
introduced in the assessment year 2013-14 and the provisions of section 115JC of the Act
cannot be applied to the projects cleared by the local authorities in earlier year i.e. in 2007 as
in the case of the assessee. The relevant parts of the legal submission made by the ld. AR for
the Assessee are extracted as under :-
"1. CIT vs. Sarkar Builders - 375 ITR 392 (SC)
(17) Thereafter, significant amendment, with which we are directly concerned, was carried out
by Finance (No.2) Act, 2004 with effect from 1.4.2005. This amendment has already been
noted above. The Legislature made substantial changes in sub-section (10). Several new
conditions were incorporated for the first time, including the condition mentioned in clause (d).
This condition/restriction was not on the statute book earlier when all these projects were
sanctioned. Another important amendment was made by this Act to sub-section (14) of
Section 80IB with effect from 1.4.2005 and for the first time under clause (a) thereof the
words 'built-up area' were defined. Section 80IB(14)(a) reads as under:
"(14) For the purposes of this section -
(a) "built-up area" means the inner measurements 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 areas shared with other residential units;"
(18) Prior to insertion of Section 80IB(14)(a), in many of the rules and regulations of the local
authority approving the housing project "built-up area" did not include projections and
balconies. Probably, taking advantage of this fact, builders provided large balconies and
projections making the residential units far bigger than as stipulated in Section 80IB(10), and
yet claimed the deduction under the said provision. To plug this lacuna, clause (a) was
inserted in Section 80IB(14) defining the words "built-up area" to mean the inner
measurements of the residential unit at the floor level, including the projections and balconies,
as increased by the thickness of the walls, but did not include the common areas shared with
other residential units.
(19) Can it be said that in order to avail the benefit in the assessment years after 1.4.2005,
balconies should be removed though these were permitted earlier? Holding so would lead to
absurd results as one cannot expect an assessee to comply with a condition that was not a
part of the statute when the housing project was approved. We, thus, find that the only way to
resolve the issue would be to hold that clause (d) is to be treated as inextricably linked with
the approval and construction of the housing project and an assessee cannot be called upon to
comply with the said condition when it was not in contemplation either of the assessee or even
the Legislature, when the housing project was accorded approval by the local authorities.
2. CIT vs. Vatika Township (P.) Ltd. - 367 ITR 466 (SC)
38. When we examine the insertion of proviso in Section 113 of the Act, keeping in view the
aforesaid principles, our irresistible conclusion is that the intention of the legislature was to
make it prospective in nature. This proviso cannot be treated as declaratory/statutory or
curative in nature. There are various reasons for coming to this conclusion which we
enumerate hereinbelow:
39.
............
............
Addition of this proviso in the Finance Act, 2003 further makes it clear that such a provision
was necessary to provide for surcharge in the cases of block assessments and thereby making
it prospective in nature. The charge in respect of the surcharge, having been created for the
first time by the insertion of the proviso to Section 113, is clearly a substantive provision and
hence is to be construed prospective in operation. The amendment neither purports to be
merely clarificatory nor is there any material to suggest that it was intended by Parliament.
Furthermore, an amendment made to a taxing statute can be said to be intended to remove
'hardships' only of the assessee, not of the Department. On the contrary, imposing a
retrospective levy on the assessee would have caused undue hardship and for that reason
Parliament specifically chose to make the proviso effective from 1.6.2002.
40. The aforesaid discursive of ours also makes it obvious that the conclusion of the Division
Bench in Suresh N. Gupta treating the proviso as clarificatory and giving it retrospective
effect is not a correct conclusion. Said judgment is accordingly overruled.
41. As a result of the aforesaid discussion, the appeals filed by the Income Tax Department
are hereby dismissed. Appeals of the assessees are allowed deleting the surcharge levied by
the assessing officer for this block assessment pertaining to the period prior to 1st June, 2002.
3. Brahma Associates Vs. JCIT - 119 ITD 255 (SB) (Pune) 86
...........
...........
The amendment brought about by the insertion of cl. (d) in s.80-IB(10), in our understanding,
is a substantive amendment and it is applicable from the date the legislature has so
specifically provided i.e. 1st April, 2005.
4. CIT V. Brahma Associates - 333 ITR 289 (Bombay)
29. Lastly, the argument of the Revenue that s. 80-IB(10) as amended by inserting cl. (d)
w.e.f. 1st April, 2005 should be applied retrospectively is also without any merit, because,
firstly, cl. (d) is specifically inserted w.e.f. 1st April, 2005 and, therefore, that clause cannot be
applied for the period prior to 1st April, 2005. Secondly, cl. (d) seeks to deny s. 80-IB(10)
deduction to projects having commercial user beyond the limit prescribed under cl. (d), even
though such commercial user is approved by the local authority. Therefore, the restriction
imposed under the Act for the first time w.e.f. 1st April, 2005 cannot be applied
restrospectively. Thirdly, it is not open to the Revenue to contend on the one hand that s. 80-
IB(10) as it stood prior to 1st April, 2005 did not permit commercial user in housing projects
and on the other hand contend that the restriction on commercial user introduced w.e.f. 1st
April, 2005 should be applied restrospectively. The argument of the Revenue is mutually
contradictory and hence liable to be rejected. Thus, in our opinion, the Tribunal was justified in
holding that cl. (d) inserted to s. 80-IB(10) w.e.f. 1st April, 2005 is prospective and not
retrospective and hence cannot be applied to the period prior to 1st April, 2005.
5. Anil Kumar Gopikishan Agrawal Vs. ACIT - 106 taxmann.com 137 (Gujarat)
At this stage, reference may be made to the following extract of the notes on clauses to
Finance Bill 2005 (II-A) explaining clause 46 whereby section 153B of the Act relating to time-
limit for completion of assessment under section 153A was sought to be amended:
"This amendment will take effect retrospectively from 1st June, 2003 and will, accordingly,
apply in relation to a search initiated under section 132 or in relation to books of account,
other documents or any assets requisitioned under section 132A after 31st May, 2003".
Thus, when the legislature thought it fit to make the amendment in section 153B of the Act
relating to time limit of assessment under section 153A of the Act retrospective from a
particular date, it provided that such retrospectivity would relate to cases where the search is
initiated or books of account, documents or other assets are requisitioned, from such date.
Thus, even the legislature has considered the initiation of search or making of requisition as
the trigger point for applying the provisions of section 153B of the Act to assessment under
section 153A of the Act. Under section 153C of the Act also, ultimately, assessment or
reassessment is required to be made in accordance with section 153A of the Act. Thus, when
the amended provisions of section 153C (1) of the Act have been brought into force with effect
from 1st June, 2015, it has to be construed that such amended provisions would apply to a
search initiated under section 132 or in relation to books of account, other documents or any
assets requisitioned under section 132A of the Act after 31st May, 2015. Consequently, in
relation to searches carried out till 31st May 2015, it was not permissible for the Assessing
Officer to assume jurisdiction under section 153C of the Act as amended with effect from 1st
June, 2015."
46. We have also considered the submissions of the assessee relating to 'doctrine of
impossibility' qua the adopting the other options available to the assessee in the matter of
recognition of income of the project. The assessee now cannot alter the income recognition
methods. Assessee had the option to invoke the Percentage Completion Method permitted by
the Circular of the CBDT dated 30.06.2009 (Instruction No.4/2009). In this regard, the ld.
Counsel for the assessee furnished the following written submission in support the case of the
assessee :-
"Ground relating to objection to levy of Alternate Minimum Tax (AMT u/s 115JC) (In
continuation of arguments and Synopsis, Appellant is making further short submission).
Doctrine of impossibility - As per facts, assessee was formed as a single joint venture for
development of the MIDORI project. As per facts, project was approved in year 2007 and
completed in March-2012. Agreements to sales were already made in the past years and
terms and conditions decided in the past years. But, the sales did not take place in AY 2012-
13 or earlier years. Sales (i.e. handing over of possession) took place in various years, i.e.
partly in AY 2012-13, partly in AY 2013-14, and thereafter. As the Appellant has been
following Completed Contract Method (i.e. CCM), profits / income were offered to tax in such
respective years of extending possession. Now, despite complying all the norms of section 80-
IB(10), Appellant is not getting benefit promised by the law at the time of approval,
considering the newly inserted / amended provisions of AMT u/s 115JC. Appellant could have
done nothing in such a case, where, some fresh tax (i.e. AMT) gets levied by the Legislature
on the profits / income. Appellant was caught unaware in this regard. As such, Appellant
contends, law applicable at the time of approval should be applied in case of a housing
project / realty project.
Percentage Completion Method (PCM) - It is submitted, had the Appellant been following
Percentage Completion Method (PCM), the profits / income would have been taxed in the
earlier years itself and the AMT provisions would not have applied to the past years. In other
words, a PCM method would have saved appellant as against CCM method. It is submitted,
methods of accounting are merely rules for deducing correct profits in a given case, and
nothing more. Such methods of accounting ought not to change responsibilities of taxation in
substance. Even CBDT has accepted this principle and has issued an Instruction No. 4/2009
dated 30/6/2009 regarding eligibility of deduction u/s 80-IB(10) and PCM. In the present case,
Appellant would have never entered into the taxable ken of AMT provisions, had it been
following PCM, as the entire construction work was already over before 31/3/2012. Appellant
ought not to be subjected to AMT provisions simply because it is following CCM instead of
PCM."
47. From the above, we find the assessee is caught unaware legally by the new law brought
into statute for the assessment year 2013-14. Thus, we find it is unfair to apply the new
section 115JC of the Act to the assessee's project approved in 2007. Considering the above
decision of the Tribunal (supra), the commonality of the facts of both the cases and the legal
submissions of the AR above, we find it is settled legal issue on the matter at the level of the
Tribunal and the provision of section 115JC of the Act need to be applied prospectively only
and not to the projects approved in 2007 as in the present case. No other contrary case is
brought to our notice by the Revenue for taking any contrary view by us. Accordingly, the
additional ground and other related grounds are allowed.
48. Regarding the ground nos.6 and 7, we find the same are basically argumentative in
nature. Before us, referring to the said grounds, ld. AR submitted that these grounds revolved
around the solitary housing project ever undertaken by the assessee during its life time. With
this fact, if assessee what to pay the AMT tax, the same remains refundable to the assessee at
the end of the permitted period. With the absence enabling provisions for such refund of AMT
credit, the deduction provisions of section 80IB(10) of the Act becomes inapplicable to the
eligible project of the assessee. Without going to these arguments, we find it appropriate to
grant relief to the assessee on legal ground i.e. prospective application of the provisions of
section 115JC qua the date of approval for the first time of the project which is much earlier to
the introduction of the provisions of section 115JC of the Act. Considering the relief granted to
the assessee as the legal ground, we find the adjudication of these grounds 6 & 7 become
academic exercise only. Therefore, we are of the opinion, the grounds no.6 and 7 are
dismissed as academic.
49. In the result, the appeal of the assessee in ITA No.2796/PUN/2016 for the assessment
year 2013-14 is partly allowed.
50. Resultantly, both the appeals of the assessee are partly allowed.
Appeals partly allowed
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29/05/2020 Delivery | Westlaw India

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© 2020 Thomson Reuters South Asia Private Limited

Income Tax Appellate Tribunal

Vikram Developers and Promoters, Pune

Deputy Commissioner of Income Tax, Pune

Case No : ITA Nos. 2795 & 2796/PUN/2016

Citation : 2019 Indlaw ITAT 8694

The Judgment was delivered by : D. Karunakara Rao (Accountant Member)

Preliminary Issue - Condonation of Delay - Both Appeals

ITA No.2795/PUN/2016 - A.Y. 2012-13

Claim u/s 80IB(10) Rs. 13,22,98,018/-

Less: (i) club charges Rs. 63,00,000/-

(ii) cash credit Rs. 1,40,98,445/-

Deduction u/s 80IB(10) Rs. 11,18,99,573/-

Before the Tribunal

Summary of Club House Receipt and Expenses

Particulars A.Y. 2012-13 A.Y. 2013-14 A.Y. 2014-15

As per "Appellant" 63,00,000 31,49,800 4,50,200

B. Club House - - 78,10,182

C. Profit from Club 63,00,000 31,49,800 -73,59,982

D. Deduction 63,00,000 31,49,800 -

As per "Assessing 63,00,000 31,49,800 4,50,200

C. Profit from Club 63,00,000 31,49,800 4,50,200

E. Income brought 63,00,000 31,49,800 4,50,200

(a) A.Y. 2012-13 Rs. 63,00,000/-

(b) A.Y. 2013-14 Rs. 31,49,800/-

"2. Submission w.r.t. Club-house receipts - AY 2012-13 & AY 2013-14:

2.1 Ground No. 1 to 3 - 80-IB(10) on club-house receipts:

2.2 Ground No. 5 - Shifting of Income of club-house receipts to AY 2014-15:

2.3 Ground No. 4 - Grant of expenses against club-house receipts:

(a) Matching principle:

(b) Income (or profit) to be taxed and not gross receipt:

i. Calcutta Co. Ltd. Vs. CIT - 37 ITR 1 (SC)

Decision of the Tribunal on the Grounds

ITA No.2796/PUN/2016 - A.Y. 2013-14

28. The grounds raised by the assessee are as under:-

3.1 Ground No. 6 & 7 and Additional Ground No. 9:

(a) Single Project Venture:

(b) No change in partners:

Date Profit Sharing

From To Mr. Vikram Mr. Vinayak Total

01/08/2006 09/02/2012 50% 50% 100%

10/02/2012 03/02/2013 64% 36% 100%

04/02/2013 02/03/2014 69% 31% 100%

03/03/2014 31/03/2019 67% 33% 100%

(c) Profits of Housing Project MIDORI not taxable:

(d) No separate charge of AMT:

Period count Year Book profit MAT/AMT Remark

1 Prior to 1987 - - No any book

2 1987-1990 MAT u/s 115J Deductions

4 1997-2000 MAT u/s 115JA (same as 2)

5 2001-2012 MAT u/s 115JB 115JAA MAT credit

6 2012-2013 MAT u/s 115JB 115JAA

7 2013-onwards MAT u/s 115JB 115JAA (for all

(f) Clarification of various High Courts about alternate mechanism of MAT:

Karimtharuvi Tea Estate Ltd. Vs. DCIT-247 ITR 22 (Kerala)

Further, this view is also emerging from various CBDT Circulars:

- Circular No. 495 - Finance Act 1987

- Circular No. 572 - Finance Act 1990

- Circular No. 762 - Finance Act 1996

- Circular No. 794 - Finance Act 2000