M/s. Kevin Properties, Pune V. Income-tax Officer,

CO 104/PUN/2014

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 1963 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: I P NAGO
• Keywords: Reasonable cause
• Section: 80IB

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.169/PN/2014 '% % / ASSESSMENT YEAR : 2009-10 ITO, WARD-4(5), PUNE . / APPELLANT V/S KEVIN PROPERTIES, 2413, KUMAR CAPITAL, EAST STREET, CAMP, PUNE 411001 PAN NO. AAGFK2148H . / RESPONDENT CO.NO.104/PN/2014 '% % / ASSESSMENT YEAR : 2009-10 KEVIN PROPERTIES, 2413, KUMAR CAPITAL, EAST STREET, CAMP, PUNE 411001 PAN NO. AAGFK2148H CROSS OBJECTOR V/S ITO, WARD-4(5), PUNE APPELLANT IN THE APPEAL / ASSESSEE BY : SHRI RAJENDRA AGIWAL / REVENUE BY : SHRI I.P. NAGO / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 30-09-2013 OF THE CIT(A)-II, PUNE RELATING TO ASS ESSMENT YEAR / DATE OF HEARING :29.12.2015 / DATE OF PRONOUNCEMENT:29.01.2016 2 ITA NO.169/2014 AND CO NO.104/PN/2014 2009-10. THE ASSESSEE HAS ALSO FILED A CROSS OBJECTION A GAINST THE APPEAL FILED BY THE REVENUE. FOR THE SAKE OF CONVENIENCE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT, CONSTRUCTION AND SALE OF RESIDENTIAL FLATS. IT FILE D ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 24 -10-2009 DECLARING TOTAL INCOME OF RS.86,729/- AFTER CLAIMING DEDUCTION OF RS.2,82,73,541/- U/S.80IB(10) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESS EE HAS CONTINUED THE CONSTRUCTION OF A HOUSING PROJECT KUMAR PARADISE AT HADAPSAR, PUNE. THE PROJECT WAS COMMENCED ON 21-10-2 003 VIDE COMMENCEMENT CERTIFICATE NO.CC/0362/03 ISSUED BY THE PMC ON 21-10-2003 AND CONTINUED EVEN AFTER 31-03-2008, I.E. THE DATE ON WHICH THE PROJECT SHOULD HAVE BEEN COMPLETED AS PER TH E PROVISIONS OF SECTION 80IB(10) OF THE ACT. THE AO NOTED THAT THE PR EVIOUSLY REVISED AND SANCTIONED PLAN ON 28-06-2006 WAS AGAIN REV ISED ON 22-06-2010 SANCTIONING 276 TENEMENTS IN TOTAL. THUS, IT IS C LEAR THAT AS ON 31-03-2008 THE HOUSING PROJECT WAS NOT COMPLETE . THE AO, THEREFORE, ISSUED A SHOW CAUSE NOTICE ASKING THE ASSESSE E TO EXPLAIN AS TO WHY THE DEDUCTION CLAIMED U/S.80IB(10) SHOULD NOT BE DISALLOWED SINCE THE HOUSING PROJECT WAS NOT COMPLETE WITH IN THE STIPULATED PERIOD. 2.1 THE ASSESSEE VIDE LETTER DATED 24-10-2011 INTER ALIA SUBMITTED AS UNDER WHICH HAS BEEN REPRODUCED BY THE AO AT PAGE 5 OF HIS ORDER: 'AS REGARDS B 2 BUILDING, SAID BUILDING IS NOT COMPLETE D. HOWEVER, WITHOUT CONSIDERING B 2 BUILDING THE PROJECT FULFILL S ALL THE CONDITIONS ON 3 ITA NO.169/2014 AND CO NO.104/PN/2014 STAND ALONE BASIS. RELYING ON THE DECISION IN THE CASE OF SAROJ SALES ORGANISATION V. ITO (115 TTJ 486 (MUM), DCIT V. BRIG ADE ENTERPRISES PVT. LTD., 119 TTJ 269 (BANG). SUPPORT CAN ALSO BE D RAWN WITH REFERENCE TO SPECIAL BENCH DECISION IN THE CASE OF BRAHMA ASSOCIA TES V JCIT (119 ITD 255)(PUNE), WHICH IS UPHELD BY BOMBAY HIGH COURT , FOR THE LEGAL PRINCIPLES THAT EVEN IF ON A STAND ALONE BASIS (I.E. ON EXCLUSION OF DISPUTED PORTION),IF OTHER PORTION JUSTIFIES THE CONDI TIONS PRESCRIBED UNDER THE ACT, IT WOULD STILL BE ELIGIBLE FOR 80IB(1 0) DEDUCTION. IN THE LIGHT OF ABOVE DECISION ASSESSEE IS ELIGIBLE FOR DEDUCTIO N U/S 80IB(10) .. ' 3. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. ACCORDING TO HIM THE REQUEST OF THE AS SESSEE FOR CONSIDERING DEDUCTION ON PROPORTIONATE BASIS CANNOT BE A CCEPTED. HE OBSERVED THAT THE PUNE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BRAHMA ASSOCIATES AND OTHERS REPORTED IN 122 TTJ 43 3 HAS CATEGORICALLY RULED OUT THE CONCEPT OF PROPORTIONATE DED UCTION. THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. VIS WAS PROMOTERS PVT. LTD. REPORTED IN (2010) 5 ITR 449 (TRIBUNA L) (CHENNAI) HAS ALSO HELD THAT PROPORTIONATE DEDUCTION CANNOT BE ALLO WED. THE AO ALSO REFERRED TO THE DECISION IN THE CASE OF CIT VS. BR AHMA ASSOCIATES AND OTHERS IN ITA NO.1194/2010 WHEREIN THE HONBLE HIG H COURT HAS OBSERVED AS UNDER : 'IN THE PRESENT CASE, THOUGH THE COMMERCIAL USER IS MO RE THAN 10% OF THE PLOT ARE, THE TRIBUNAL HAS ALLOWED SECTION 80IB(10) D EDUCT ION IN RESPECT OF 15 RESIDENTIAL BUILDING ON THE GROUND THAT THE PR OFITS FROM THESE EXCLUSIVELY RESIDENTIAL BUILDINGS COULD BE DETERMINED ON STAND ALONE BASIS. IN OUR OPINION THAT WOULD NOT BE PROPER, BECAU SE, SECTION 80IB(10) ALLOWS DEDUCTION TO THE ENTIRE PROJECT APPROVED BY T HE LOCAL AUTHORITY AND NOT TO A PART OF THE PROJECT. IF THE CONDITIONS SET OUT IN SECTION 80IB(1) ARE SATISFIED, THEN DEDUCTION IS ALLOWABLE ON THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY .AND THERE IS NO QU ESTION OF ALLOWING DEDUCTION TO A PART PROJECT.' 4. THE AO FURTHER OBSERVED THAT EXPLANATION (I) TO SECTIO N 80IB(10) PROVIDES THAT IN A CASE WHERE THE APPROVAL IN RE SPECT OF HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN FOR SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL 4 ITA NO.169/2014 AND CO NO.104/PN/2014 AUTHORITY. CLAUSE (II) OF THE EXPLANATION PROVIDES THAT THE D ATE OF COMPLETION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE T HE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. IN VIEW OF THE ABOVE, TH E AO HELD THAT ASSESSEE HAS NOT FULFILLED THE CONDITIONS LAID DOWN IN SUB-CL AUSE (A) OF SECTION 80IB(10) OF THE ACT. ACCORDING TO HIM, WHAT IS RE QUIRED TO BE COMPLETED BY THE ASSESSEE IS THE HOUSING PROJECT IN TOTALITY AND NOT THE INDIVIDUAL FLATS AS CLAIMED BY THE ASSESSEE. IN VIE W OF THE ABOVE, THE AO DISALLOWED THE CLAIM OF DEDUCTION MADE U/S. 80IB(10) OF THE ACT. 5. BEFORE CIT(A) IT WAS SUBMITTED THAT THE ASSESSEE HAS COMMENCED DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJE CT KUMAR PARADISE AT PLOT NO.2, AT SURVEY NO.134/1/1A/1, H ADAPSAR, PUNE ON 08-01-2004. THE DP LAYOUT PLAN WAS SANCTIONED ON 21-10- 2003. THE SAID PLAN IS DIVIDED INTO 2 PARTS, I.E. PART A AN D PART B WHICH IS EVIDENT FROM THE SANCTIONED PLAN. THE SANCTIONED PLAN FOR PART A CONSISTING OF BUILDINGS A1 AND A2 WAS OBTAINED ON 0 8-01-204 AND 18-05-2004. THE SANCTIONED PLAN FOR PART B CONSIST ING OF BUILDINGS B1 AND B2 WAS SEPARATELY OBTAINED ON 28-06-20 06. THUS, THE COMPLETE VENTURE OF THE ASSESSEE WAS DIVIDED INTO CO NSTRUCTION OF A1 AND A2 OF PART A AND CONSTRUCTION OF B1 AND B2 OF PART B. THE FOLLOWING STATISTICS WAS ALSO SUBMITTED BEFORE THE CIT(A) : SR.NO. KUMAR PARADISE PLOT NO.2 HADAPSAR PART A PART B 1 AREA OF LAND 8,553 SQ.MTR 2.11 ACRE 10,394.66 SQ.MTR 2.57 ACRE 2 BUILDINGS PROPOSED A1 AND A2 B1 AND B2** 3 DATE OF COMMENCEMENT CERTIFICATE A1 - 8 JANUARY 2004 A2-18 JUNE 2004 28 JUNE 2006 4 DATE OF COMPLETION/ OCCUPANCY CERTIFICATE A1(108 UNITS) 6 JULY 2006 VIDE CERTIFICATE NO.0000481 (COPY ENCLOSED AT PAGE 23 TO B1 (44 UNITS) 18MARCH 2008 VIDE CERTIFICATE NO.01924 (COPY 5 ITA NO.169/2014 AND CO NO.104/PN/2014 23) A2 (108 UNITS) 6 NOVEMBER 2007 VIDE CERTIFICATE NO.01391 (COPY ENCLOSED AT PAGE 24 OF 24) ENCLOSED AT PAGE 25 TO 25) 5 SIZE OF RESIDENTIAL UNITS LESS THAN 1,500 SQ.FT. LESS THAN 1,500 SQ.FT. 6 COMMERCIAL AREA NIL NIL ** OTHER BUILDINGS ON PART B ARE SANCTIONED AS PARKING AREA FOR WANT OF FLOOR SPACE INDEX) (FSI) FOR CONSTRUCTION PURPOSES. 6. IT WAS SUBMITTED THAT THE ASSESSEE HAD COMPLETED C ONSTRUCTION OF PART A WITH 216 RESIDENTIAL UNITS AND PART B WITH 44 RE SIDENTIAL UNITS ON OR BEFORE 31-03-2008. THE ASSESSEE FILED THE RE TURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR CLAIMING DEDUCTION OF RS.2,82,73,541/- U/S.80IB(10) OF THE ACT ON THE PROFITS DER IVED FOR SALE OF RESIDENTIAL UNITS IN BUILDING B1 AND SALE OF 1 UNIT OF B UILDING IN A2. IT WAS SUBMITTED THAT PART B IS A SEPARATE HOU SING PROJECT CONSISTS OF BUILDING B1 AND B2. IT WAS SUBMITTED THAT BUILD ING B1 ON A STAND ALONE BASIS SATISFIES ALL THE CONDITIONS U/S.80IB (10) OF THE I.T. ACT, I.E. THE DATE COMMENCED ON 28-06-2006 AND COMP LETED ON 18-03-2008 WITH BUILT UP PLOT AREA OF MORE THAN 1 ACRE. THE BUILT UP AREA OF ALL RESIDENTIAL UNITS IS LESS THAN 1,500 SQ.FT. AND THE RE IS NO CONSTRUCTION OF COMMERCIAL AREA. RELYING ON VARIOUS DECISIO NS IT WAS ARGUED THAT ASSESSEE IS ENTITLED FOR DEDUCTION U/S.80IB(10 ) AS CLAIMED. 7. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTION MADE BY THE ASSESSE E U/S.80IB(10) BY OBSERVING AS UNDER : 3.2 THE APPELLANT HAS RAISED FIVE GROUNDS OF APPEAL. IN THE FIRST THREE GROUNDS RAISED BY THE APPELLANT THE DISALLOWANCE OF DE DUCTION CLAIMED BY THE APPELLANT U/S.80IB(10) OF RS.2,82,73,541/- HA S BEEN CONTESTED. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FO UND THAT THE 6 ITA NO.169/2014 AND CO NO.104/PN/2014 APPELLANT HAD CONTINUED CONSTRUCTION OF A HOUSING PRO JECT BY THE NAME KUMAR PARADISE AT S.NO.134/1/1A/1, PLOT NO.2, PART A HADAPSAR, PUNE AND HAD ALSO CLAIMED DEDUCTION U/S.80IB(10) OF RS.2,82 ,73,541/- IN RESPECT OF THE PROJECT. THE ASSESSING OFFICER NOTICED T HAT THE PROJECT WAS COMMENCED ON 21-10-2003 AND SUBSEQUENTLY REVISED ON 8- 1-2004, 18- 5-2004, 28-6-2006 AND ON 22-6-2010. THE OCCUPANCY/C OMPLETION CERTIFICATES ISSUED BY THE PUNE MUNICIPAL CORPORATION (PMC FOR SHORT) WERE ON 6-1-2006 FOR 108 UNITS, 54 IN A-1 WING AND A & B HAVING 54 UNITS EACH; 6-11-2007 FOR ANOTHER 108 UNITS IN A-2, A &B WING; ON 18-3- 2007 FOR 44 UNITS IN B-1 WING. THE ASSESSING OFFICER ALSO NOTICED THAT THE PROJECT CONTINUED EVEN AFTER 31-3-2008 I.E. THE DAT E ON WHICH THE PROJECT SHOULD HAVE BEEN COMPLETED AS PER THE PROVISIONS OF SEE 80IB(10), AS THE PREVIOUSLY REVISED AND SANCTIONED PLAN DATED 28-06-200 6 WAS AGAIN REVISED ON 22-06-2010 SANCTIONING FURTHER 276 TENEMEN TS. THE ASSESSING OFFICER THUS HELD THE HOUSING PROJECT TO BE INC OMPLETE. THE APPELLANT, HOWEVER, ADMITTING THAT B-2 BUILDING WAS NOT COMPLETED REQUESTED FOR ALLOWANCE OF THE CLAIM OF DEDUCTION ON A PROPORTIONATE BASIS WHICH WAS REJECTED BY THE ASSESSING OFFICER, WHO ALSO RELIED UPON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS BRAMHA ASSOCIATES - DECLINED THE CLAIM OF THE APPELLANT BEING VIOLATION OF SECTION 80IB(10)(A). 3.3 DURING THE APPELLATE PROCEEDINGS, THE LD. COUNSEL OF THE APPELLANT SUBMITTED THAT THE APPELLANT COMMENCED DEVELOPMENT A ND CONSTRUCTION OF A HOUSING PROJECT 'KUMAR PARADISE' AT HADAPSAR PUNE ON 8-1-2004 THOUGH THE DP LAYOUT PLAN WAS SANCTIONED ON 21-10-200 3. THE APPELLANT FURTHER STATED THAT SAID PLOT IS DIVIDED INTO TWO PART S I.E PART A AND PART B WHICH BECOMES EVIDENT FROM THE SANCTIONED PLAN AND TH E SANCTIONED PLAN FOR PART A COMPRISED OF TWO BUILDINGS A 1 AND A2 AND THE SANCTIONED PLAN FOR PART B CONSISTING OF B1 AND B2 BUI LDINGS WAS OBTAINED ON 28-6-2006. THE DETAILED STATISTICS OF TH E PROJECT VIZ. PART A AND PART 8 OF KUMAR PARADISE ARE AS UNDER: SR.NO. KUMAR PARADISE PLOT NO.2 HADAPSAR PART A PART B 1 AREA OF LAND 8,553 SQ.MTR 2.11 ACRE 10,394.66 SQ.MTR 2.57 ACRE 2 BUILDINGS PROPOSED A1 AND A2 B1 AND B2** 3 DATE OF COMMENCEMENT CERTIFICATE A1 - 8 JANUARY 2004 A2-18 JUNE 2004 28 JUNE 2006 4 DATE OF COMPLETION/ OCCUPANCY CERTIFICATE A1(108 UNITS) 6 JULY 2006 VIDE CERTIFICATE NO.0000481 (COPY ENCLOSED AT PAGE 23 TO 23) A2 (108 UNITS) 6 NOVEMBER 2007 VIDE CERTIFICATE NO.01391 (COPY ENCLOSED AT PAGE 24 OF 24) B1 (44 UNITS) 18MARCH 2008 VIDE CERTIFICATE NO.01924 (COPY ENCLOSED AT PAGE 25 TO 25) 5 SIZE OF RESIDENTIAL UNITS LESS THAN 1,500 SQ.FT. LESS THAN 1,500 SQ.FT. 6 COMMERCIAL AREA NIL NIL 7 ITA NO.169/2014 AND CO NO.104/PN/2014 THE APPELLANT HAS CONTENDED THAT THE CONSTRUCTION OF PART A WITH 216 RESIDENTIAL UNITS AND 44 RESIDENTIAL UNITS OF PART B W AS COMPLETED BEFORE 31-3-2008. THE APPELLANT HAS FURTHER STATED THAT PART B IS A SEPARATE HOUSING PROJECT CONSISTING OF B1 AND B2 BUILDINGS AND D UE TO THE NON- COMPLETION OF BUILDING B-2 THE BENEFIT OF DEDUCTION U/S 80IB(10) FOR B1 BUILDING WAS DENIED BY THE ASSESSING OFFICER. THE APPELL ANT HAS STATED THAT BUILDING B-1 ON A STANDALONE BASIS SATISFIES ALL THE CONDITIONS U/S 80IB(10) AS IT HAD COMMENCED ON 28-6-2006 AND COMPLE TED ON 18-03- 2008; IS BUILT ON A PLOT AREA OF MORE THAN 1 ACRE; B UILT UP AREA OF ALL RESIDENTIAL UNITS BEING LESS THAN 1500 SQ.FT AND THERE I S NO CONSTRUCTION OF COMMERCIAL AREA. THE OBSERVATION OF THE ASSESSING OFF ICER THAT THE SANCTION PLAN DATED 28-06-2006 WAS REVISED ON 22-6-201 0 FOR 276 TENEMENTS AND THE PROJECT NOT COMPLETED BEFORE 31-3- 2008 IS NOT CORRECT AS THE 276 TENEMENTS WERE SANCTIONED VIDE SANCT ION PLAN DATED 28-6-2006 AND THERE WAS NO REVISION/ADDITIONAL SANCTIO N GRANTED. THE APPELLANT HAS FILED THE COPIES OF THE SANCTIONED PLANS OF 2006 AND 2010 DURING THE APPELLATE PROCEEDINGS TO SUPPORT ITS CLAIM. THE APPELLANT HAS THUS CONTENDED THAT BUILDING B1 ON A STANDALONE BASIS S ATISFIES ALL THE CONDITIONS U/S 80IB(10). THE APPELLANT HAS PLACED REL IANCE ON THE FOLLOWING AUTHORITIES FOR THE AFORESAID PROPOSITION: 1. CBDT NOTIFICATION 2. CIT VS VANDANA PROPERTIES (2012) 76 DTR 363/ (2013) 3 53 ITR 36(BOM) 3. CIT VS. APOORVA PROPERTIES AND ESTATES PVT. LTD, ITA NO.113/PN/2007 4. RAHUL CONSTRUCTION CO. VS ITO (2012) 51 SOT 192 (PUNE)(URO) 5. MUDHIT MADANLAL GUPTA VS ACIT (2011) 51 DTR 217 (MUMBAI)(TRIB) 6. DCIT VS BRIGADE ENTERPRISES (P) LTD. (2008) 119 TT J ( BANG) 269 7. SAROJ SALES ORGANIZATION VS ITO (2008) 115 TT J 485 (MUMBAI) 3.4 THE APPELLANT HAS ALSO DISTINGUISHED THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF BRAMHA ASSOCIATES (2011) 333 ITR 289 (BOM) RELIED UPON BY THE ASSESSING OFFICER. IT HAS BEEN SUBMITT ED THAT THE ASSESSEE IN THAT CASE HAD UNDERTAKEN PROJECT COMPRISING OF 15 RESIDENTIAL AND 2 COMMERCIAL BUILDINGS SANCTIONED BY T HE LOCAL AUTHORITY AS 'RESIDENTIAL-CUM-COMMERCIAL PROJECT'. THUS THE ISSUES INVOLVED BEFORE THE HON'BLE HIGH COURT WAS I) WHETHER A PROJECT WILL BE ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80IB(10) EVEN IF IT IS SANCTIONED AS 'RESIDENTIAL CUM COMMERCIAL' BY LOCAL AUTHORITY AND II) WHETHER CLAU SE (D) TO SEC 80IB(10) PROVIDES FOR RESTRICTION ON COMMERCIAL AREA IN A HOUSI NG PROJECT IS TO BE APPLIED RETROSPECTIVELY. THE BOMBAY HIGH COURT HELD THAT THE DEDUCTION U/S 80IB(10) IS ALLOWABLE TO HOUSING PROJECT APPROVED BY LOCAL AUTHORITY HAVING RESIDENTIAL/COMMERCIAL UNITS TO THE EXTENT PER MITTED UNDER THE DC RULES BY THE LOCAL AUTHORITY. ACCORDINGLY THE COU RT CONCLUDED THAT EVEN IF THE PROJECT CONSISTS OF COMMERCIAL AREA MORE T HAN 10% OF THE BUILT UP AREA, SUCH PROJECT WILL BE ELIGIBLE IN ENTI RETY FOR CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. THE APPELLANT HAS ALSO STATED THA T THE HON. HIGH COURT DID NOT UPHELD THE STANDALONE PRINCI PLE OF THE SPECIAL BENCH CONSIDERING THAT IT HAD CONCLUDED THAT THE PRO JECT AS SUCH IN ENTIRETY EVEN IF SANCTIONED AS RESIDENTIAL CUM COMMERC IAL WILL BE ELIGIBLE FOR DEDUCTION U/S 80IB(10) IN VIEW OF THE LAW AS IT STANDS AT THAT TIME. 8 ITA NO.169/2014 AND CO NO.104/PN/2014 THE LD. COUNSEL HAS THUS CONTENDED THAT IN THAT CONTE XT THE ASSESSING OFFICER'S CONTENTION THAT THE HON. HIGH COURT HAD DI SREGARDED THE CONCEPT OF PROPORTIONATE DEDUCTION ON STANDALONE BASI S IS MISPLACED IF THE DECISION IS READ IN TOTALITY. THE APPELLANT IN TH IS REGARD HAS PLACED RELIANCE ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS SUN ENGINEERING (P) LTD, 198 ITR 297 (SC) WHEREIN IT HA S BEEN HELD THAT THE JUDGMENT MUST BE READ AS A WHOLE AND THE OBSERVATION OF THE JUDGMENT HAVE TO BE CONSIDERED IN THE LIGHT OF THE QUESTIONS IN VOLVED IN THE CASE IN WHICH IT IS RENDERED. THE APPELLANT HAS CONTENDED THA T THE CONTENTION OF FALLOWING PROPORTIONATE DEDUCTION U/S 80IB(10) STILL STANDS MERIT AS THE JUDICIAL PRECEDENTS AND AUTHORITIES RELIED UPON SUPPOR TS THE CLAIM. THE APPELLANT HAS ALSO PLACED RELIANCE ON THE DECISION OF THE MUMBAI ITAT IN THE CASE OF EKTA HOUSING PVT. LTD, ITA NO 3649/MUM/20 09, WHICH AFTER CONSIDERING THE DECISION OF THE HIGH COURT IN THE CASE OF BRAMHA ASSOCIATES (SUPRA) ALLOWED DEDUCTION U/S 80IB(10) ON PRO PORTIONATE BASIS TO THOSE UNITS HAVING AREA LESS THAN 1000 SQ.FT. THE APPELLANT HAS ALSO DISTINGUISHED THE CASE OF ACIT VS VISHWAS PROMOTERS P. LTD. (2010) 5 ITR 449 (CHENNAI) (TRIB) RELIED UPON BY THE ASSESSING OFFICER. THE APPELLANT HAS ALSO SUBMITTED THAT THE LEGISLATIVE INTEN T FOR PROVIDING BENEFIT U/S 80IB(10) IS TO ENCOURAGE DEVELOPMENT OF R ESIDENTIAL TENEMENTS FOR THE PEOPLE AND SUCH TAX INCENTIVE PROV IDED U/S 80IB (10) SHOULD NOT BE DENIED AND THE SAID PROPOSITION IS SUPPORT ED BY JUDICIAL PRECEDENTS WHEREIN IT HAS BEEN HELD THAT INCENTIVE PR OVISIONS SHOULD BE INTERPRETED LIBERALLY SO AS TO ADVANCE THE OBJECT SOUG HT TO BE ACHIEVED AND NOT FRUSTRATE IT. THE APPELLANT HAS PLACED RELIAN CE ON THE FOLLOWING DECISIONS IN SUPPORT: 1. BAJAJ TEMPO LTD VS CIT 196 ITR 188 (SC) 2. CIT VS GWALIOR RAYON SILK MANUFACTURING CO LTD 196 I TR 129 (SC) THE APPELLANT HAS THUS CONTENDED THAT THE BUILDINGS CO VERED UNDER PART A AND PART B ON THE PLOT ARE DIFFERENT PROJECTS WHIC H GETS SUBSTANTIATED BASED ON THE FOLLOWING FACT: 1. SEPARATE COMMENCEMENT CERTIFICATES OBTAINED FOR PART A COMPRISING OF BUILDINGS A 1 & A2 AND FOR PART B COMPR ISING OF BUILDINGS B1 & B2 AND THERE IS A CONSIDERABLE GAP OF 30 MONTHS B ETWEEN THE COMMENCEMENT OF THE TWO PROJECTS I.E. PART A AND PAR T B. 2. SEPARATE COMPLETION/OCCUPANCY CERTIFICATE OBTAINED FOR BUILDING A 1 & A2 AND BUILDING B-1 3. PART A AND PART B IS ALSO PHYSICALLY DIVIDED BY THE DE VELOPMENT PLAN (DP) ROAD. THE APPELLANT HAS EMPHASIZED THAT DURING A.Y. 2007-08 IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT PART A AND PART B ARE SEPARATE HOUSING PROJECTS AND THE SAME WAS ACCEPTED BY THE ASSESSING OFFICE R WHO HAD ACCORDINGLY ALLOWED THE CLAIM OF DEDUCTION U/S.80IB( 10) ON THE PROFIT DERIVED FROM SALE OF UNITS IN BUILDINGS A 1 & A2. THE APPELLANT HAS CONTENDED THAT THE ASSESSING OFFICER HAS THUS ERRED ON FA CTS IN CONSIDERING ALL THE BUILDINGS AS PART OF ONE PROJECT A ND DISALLOWED THE CLAIM OF DEDUCTION ON PROFITS DERIVED FROM BUILDING A2. THE APPELLANT HAS THUS FURTHER CONTENDED THAT THE CLAIM OF DEDUCTIO N ON PROFITS DERIVED FROM SALE OF A RESIDENTIAL UNIT OF BUILDING A -2 BE ALLOWED AS IT FORMS PART OF A SEPARATE HOUSING PROJECT PART-A, WHICH SATISFIES ALL THE 9 ITA NO.169/2014 AND CO NO.104/PN/2014 CONDITIONS U/S 80IB(10) OF THE ACT INCLUDING THE DATE OF COMPLETION BEFORE 31 ST MARCH 2008. THE APPELLANT ON A WITHOUT PREJUDICE C ONTENTION HAS STATED THAT EVEN IF BUILDINGS A-1, A-2 AND B-1 ARE TREATED AS PART OF ONE HOUSING PROJECT IT QUALIFIES FOR DEDUCTION U/S 80I B(10) IN VIEW OF THE SUBSTANTIVE PRINCIPLE AS ALL THE BUILDINGS SATISFIES THE CONDITION OF COMPLETION OF THE PROJECT ON OR BEFORE 31-3-2008. T HE APPELLANT HAS PLACED RELIANCE ON THE FOLLOWING DECISIONS IN SUPPORT OF THE CLAIM: 1. RUNWAL MULTIHOUSING PVT. LTD VS ACIT, ITA NO 1015,101 6 & 1017/PN/2011 2. RAMSUKH PROPERTIES VS DCIT (2012) 138 ITD 278 (PUNE) 3. CIT VS TARNETAR CORPORATION (2012) 26 TAXMANN.COM 18 0 (GUJ.) 4. DCIT VS EKTA HOUSING PVT. LTD. ITA NO. 3649/MUM/2009 5. DCIT VS BRIGADE ENTERPRISES (P) LTD (2008) 119 TTJ 269 (BANG) 3.5 THE SUBMISSION MADE BY THE APPELLANT HAS BEEN CON SIDERED AND MATERIAL ON RECORD PERUSED. THE FACT OF THE CASE IS TH AT THE APPELLANT STARTED CONSTRUCTION OF A HOUSING PROJECT 'KUMAR PARAD ISE' AT HADAPSAR ON THE PLOT NO. 2, S.NO 134/1/1A/1A. THE SAID PLOT N O.2 IS DIVIDED INTO THREE PARTS I.E. PART A, PART B AND PART C. THE FIRST LAYOUT PLAN OF THE ENTIRE SCHEME WAS SANCTIONED BY THE LOCAL AUTHORITY I. E. PMC ON 21-10- 2003. THE APPELLANT PROPOSED TWO SEPARATE PROJECTS A A ND B ON THE AFORESAID PLOT NO.2. THE PROJECT A OF THE PLOT COMPR ISED OF BUILDINGS A 1 AND A2 AND PROJECT B ON PART B & C OF THE PLOT COMPRISED OF BUILDINGS B1, B2, B3 AND B4. THE TOTAL AREA OF THE PROJECT A IS 88 53 SQ.MTRS. THE APPELLANT STARTED THE CONSTRUCTION OF THE BUILDING A 1 VIDE COMMENCEMENT CERTIFICATE DATED 8-1-2004 AND THE SAID BUILDING A 1 COMPRISING OF 108 UNITS WAS COMPLETED ON 6-7-2006. THE OTHER BUILDING OF PART A I.E. BUILDING A2 COMMENCED CONSTRUCTION VI DE COMMENCEMENT CERTIFICATE DATED 18 TH MAY 2004 AND THE SAID BUILDING ALSO COMPRISED OF 108 UNITS WAS COMPLETED ON 06-11-2007. THUS THE APPELL ANT HAD COMPLETED THE CONSTRUCTION OF PART A WITH 216 RESIDEN TIAL UNITS MUCH BEFORE THE STIPULATED DATE I.E. 31-3-2008. THE OTHER PROJECT B COMPRISED OF 10,394.66 SQ.MTR OF PART BAND 1606.02 SQ.MTR OF PA RT C. THE BUILDING B1 COMMENCED CONSTRUCTION VIDE COMMENCEMENT CERTIFIC ATE DATED 28- 06-2006 AND THE SAME COMPRISED OF 44 RESIDENTIAL UNITS AND THE SAID BUILDING B2 WAS COMPLETED ON 18-3-2008. THE OTHER B UILDING B2 WAS COMMENCED VIDE COMMENCEMENT CERTIFICATE DATED 28-6- 2006, HOWEVER, THE SAME WAS NOT COMPLETED AS THERE WAS NOT ADEQUATE FS I TO COMPLETE THE ENTIRE BUILDING AS THE SAME WAS SANCTIONED WITH ONL Y 16 UNITS WITH AN FSI OF 677.64 SQ.MTR WITH TWO FLOORS TO BE FEASIBLE AS THE AREA OF ONE FLAT WOULD HAVE BEEN MERELY 62.35 SQ. MTRS., WHICH WA S TOO SMALL AND HENCE COMMERCIALLY NOT VIABLE. THE APPELLANT DID NO T FIND THE CONSTRUCTION OF 16 FLATS WITH 677.64 SQ.MTR OF FSI WOU LD HAVE MERELY BEEN 62.35 SQ.MTR, WHICH WAS TOO SMALL AND HENCE COMME RCIALLY NOT VIABLE. THE APPELLANT IN SUCH A SITUATION COMPLETED THE PARKING FLOORS, HOWEVER THE RESIDENTIAL FLOORS OF THE SAID BUILDING B2 REMAINED INCOMPLETE DUE TO WANT OF ADEQUATE FSI THOUGH SUBSEQU ENTLY THE SAME WAS RENEWED ON 22-06-2010 VIDE A SEPARATE COMMENCEMEN T CERTIFICATE. THE OTHER TWO BUILDINGS B3 AND B4 (ON PART C OF THE PLOT) NO COMMENCEMENT CERTIFICATE AND BUILDING PLAN WAS SANCTI ONED AS THERE WAS NO ADEQUATE FSI FOR THE BUILDING B2 ITSELF AND TH EREFORE, IN THE BUILDING SANCTION PLAN DATED 28-6-2006 THE TWO BUILD INGS HAVE BEEN SHOWN AS PARKING AREA. THE ASSESSING OFFICER ON THE OTHER HAND HAS 10 ITA NO.169/2014 AND CO NO.104/PN/2014 NOTED THAT THE HOUSING PROJECT WHICH COMMENCED ON 21 .10.2003 OUGHT TO HAVE BEEN COMPLETED ON OR BEFORE 31-3-2008 AND I N THE FACT OF THE CASE THE ASSESSING OFFICER FOUND THAT AS THE BUILDING B2 WAS NOT COMPLETED AND THE APPELLANT HAS NOT FULFILLED THE CO NDITIONS LAID DOWN U/S 80IB(10) AND ACCORDINGLY DISALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10) MADE BY THE APPELLANT. THE ASSESSING OFFICER A LSO DID NOT CONSIDER THE ALLOWABILITY OF THE CLAIM ON A PROPORTI ONATE BASIS IN VIEW OF THE DECISION OF ITAT CHENNAI IN THE CASE OF ACIT VS. V ISHWAS PROMOTERS P. LTD. (CITED SUPRA) AND THE BOMBAY HIGH COURT IN T HE CASE OF BRAMHA ASSOCIATES(SUPRA). THUS THE ASSESSING OFFICER IS SEEN TO HAV E CONCLUDED THAT THE PROJECT UNDERTAKEN BY THE APPELLANT COMME NCED ON 21-10- 2003 WHICH IS FACTUALLY NOT CORRECT AS THE LOCAL AUTH ORITY HAD SANCTIONED THE LAYOUT PLAN OF THE ENTIRE PROJECT ON THAT DATE AND NOT THE COMMENCEMENT OF THE ENTIRE PROJECT. THE CONSTRUCTION OF THE PROJECT COMMENCES WITH THE ISSUANCE OF COMMENCEMENT CERTIFICAT E AND SANCTION PLAN OF THE BUILDINGS BY THE LOCAL AUTHORITY AND HEN CE NOT BY THE SANCTION OF THE LAYOUT PLAN OF THE ENTIRE SCHEME. IN THE FACT OF THE CASE THE TWO PARTS OF THE PROJECT VIZ. PART A AND PART B HAS BEEN COMMENCED BY DIFFERENT COMMENCEMENT CERTIFICATES AND SANCTION PLAN S, AND THERE IS SUBSTANTIAL GAP OF NEARLY 30 MONTHS BETWEEN THE COMMEN CEMENT DATES OF THE SAID PROJECTS. THE ASSESSING OFFICER DURING THE ASS ESSMENT PROCEEDINGS FOR A.Y. 2007-08 HAD INFACT ACCEPTED THE CONTENTION OF THE APPELLANT THAT PART A AND PART B ARE SEPARATE PROJEC TS AND ACCORDINGLY ALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10). THUS THE ASSESSING OFFICER'S CONTENTION THAT PART A AND B ARE ONE AND T HE SAME PROJECT IS NOT CORRECT IN THE GIVEN SET OF FACTS OF THE CASE. 3.6 THE RELIANCE PLACED BY THE APPELLANT ON THE DEC ISION OF THE PUNE ITAT IN THE CASE OF RAHUL CONSTRUCTION CO. (CITED SUPRA) I S RELEVANT AND WHICH HAS HELD AS UNDER: '9. THERE IS NO DISPUTE ON FROM MATERIAL FACTS THAT OUT OF 16 BUILDINGS IN THE HOUSING PROJECT OF THE ASSESSEE ONLY 11 BUILDIN GS WERE COMPLETED WITHIN THE PRESCRIBED TIME-LIMIT UP TO 31-3-2008. T HE LAYOUT PLAN IN RESPECT OF ENTIRE COMPLEX WAS SANCTIONED BY PMC VID E ORDER DATED 3-4- 2003 AND THE BUILDING PLAN WAS SANCTIONED VIDE COMM ENCEMENT CERTIFICATE DATED 29-4-2003. ADMITTEDLY, THE TERM ' HOUSING PROJECT' HAS NOT BEEN DEFINED IN THE ACT BUT IN THE CONTEXT OF D EDUCTION UNDER SECTION 80-IB(10) AN EXPLANATION HAS BEEN PROVIDED BELOW CLAUSE (A) TO SUB-SECTION (10) TO SECTION 80-IB. THE VERY READING OF ABOVE EXPLANATION (I), MAKES IT CLEAR THAT FOR THE ELIGIB ILITY OF THE DEDUCTION PROVIDED UNDER SECTION 80-IB(10), THE DATE ON WHICH BUILDING PLAN OF A HOUSING PROJECT HAS BEEN FIRSTLY APPROVED BY THE LO CAL AUTHORITY WILL BE TREATED AS APPROVAL IN RESPECT OF THE HOUSING PROJE CT. WHEN EXPLANATION (II) IS READ WITH EXPLANATION (I), IT MAKES CLEAR T HAT THE DATE OF COMPLETION OF CONSTRUCTION OF SUCH HOUSING PROJECT WOULD BE TAKEN WHEN COMPLETION CERTIFICATE HAS BEEN ISSUED BY THE LOCAL AUTHORITY. IN OTHER WORDS, IN CLAUSE (I) OF THE EXPLANATION, IT H AS BEEN MADE CLEAR THAT DATE OF FIRST APPROVAL OF HOUSING PROJECT BY THE LO CAL AUTHORITY WOULD BE TAKEN AS STARTING POINT OF THE HOUSING PROJECT AND IN CLAUSE NO. (II), IF HAS BEEN MADE CLEAR THAT THE DATE OF COMPLETION CERTIFI CATE IN RESPECT OF SUCH HOUSING PROJECT ISSUED BY LOCAL AUTHORITY WILL BE CONSIDERED TO COMPUTE THE PRESCRIBED TIME-LIMIT FOR VERIFICATION OF ELIGIBILITY OF ASSESSEE FOR THE CLAIMED DEDUCTION. IN VIEW OF THE ABOVE EXPLANATION, APPROVAL OF THE HOUSING PROJECT AND APPROVAL OF BUI LDING PLAN ARE TWO DIFFERENT CONCEPTS. 11 ITA NO.169/2014 AND CO NO.104/PN/2014 THUS PART A OF THE PROJECT COMPRISING OF BUILDING A 1 AND A2 IS A SEPARATE PROJECT AND WHICH SATISFIES ALL THE CONDIT IONS STIPULATED U/S 80IB(10) AND HENCE THE APPELLANT IS VERY MUCH ENTITLED TO CLAIM THE DEDUCTION U/S 80IB(10) OF THE ACT ON PART A OF THE BUILDINGS A 1 AND A2. 3.7 SO FAR AS THE PART B OF THE PROJECT IS CONCERNED, THE SANCTION PLAN OF BUILDINGS B1 AND B2 WERE SEPARATELY OBTAINED ON 28 -06-2006. THE APPELLANT HAS COMPLETED THE CONSTRUCTION OF THE BUILD ING B1 COMPRISING OF 44 FLATS ON 18-3-2008, HOWEVER, FOR THE OTHER BUI LDING B2 IT HAS BEEN FAIRLY SUBMITTED THAT THE SAME WAS NOT COMPLETED FOR T HE REASONS CITED ABOVE I.E. NON-AVAILABILITY OF THE ADEQUATE FSI AND ALSO THE COMMERCIAL VIABILITY OF CONSTRUCTING 16 FLATS WITH AN FSI OF 677 .64 SQ. MTRS. THE SAID BUILDING WAS FOUND TO BE COMMERCIALLY AND OTHERWISE N OT VIABLE AND FEASIBLE TO CONSTRUCT. THUS THE APPELLANT COULD NOT CO MPLETE THE SAID BUILDING B2 AS THE SAME WAS NOT POSSIBLE TO CONSTRUCT. TH E ASSESSING OFFICER, HAS HOWEVER, HELD THAT DUE TO NON-COMPLETIO N OF BUILDING B2 THE ENTIRE BENEFIT OF THE PROJECT OF SEC.80IB(10) IN RE SPECT OF PROFITS DERIVED FROM BUILDING B1 HAS BEEN DENIED. THUS AS EVIDENT THE APPELLANT WAS PREVENTED BY A REASONABLE CAUSE WHICH WAS COMPLETELY IMPOSSIBLE ON THE PART OF THE ASSESSEE. IN THIS REGARD THE DECISION OF THE PUNE ITAT IN THE CASE OF RAMSUKH PROPERTIES VS DCIT (SUPRA) ALSO RELIED UPON BY THE APPELLANT BECOMES RELEVANT AND WHICH HELD AS UNDER: 5. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT THE ASSESSEE IS A FIRM ENGAGED IN BUSINES S OF BUILDER AND PROMOTER. THE ISSUE BEFORE US IS REGARDING ALLOWABI LITY OF DEDUCTION U/S.80IB(10) OF THE ACT ON PARTIALLY COMPLETE PROJE CT. THE ASSESSING OFFICER HAS DENIED THE DEDUCTION ON THE GROUND THAT PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED TIME. THERE IS NO DI SPUTE WITH REGARD TO OTHER CONDITIONS LAID U/S. 801B(10) OF THE ACT, I.E., COMMENCEMENT OF PROJECT, AREA OF LAND OF PROJECT, ETC. ASSESSEE' S HOUSING PROJECT WAS APPROVED VIDE COMMENCEMENT CERTIFICATE NO.3837/04 D ATED 13.01.2005 OUT OF WHICH COMPLETION CERTIFICATE WAS OBTAINED AND FURNISHED BEFORE THE ASSESSING OFFICER FOR 173 OUT OF 205 FLATS. SAME WAS REJECTED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE REQUEST FOR GRANTING WHOLE DEDUCTION IN RESPECT OF WHOLE PROJECT HAS RIGHTLY BEEN REJECTED BECAUSE DEDUCTION U/S.80I B(10) COULD NOT BE GRANTED TO ASSESSEE ON INCOMPLETE CONSTRUCTION A T RELEVANT POINT OF TIME. REGARDING PROPORTIONATE DEDUCTION IN RESPE CT OF 173 OF 205 FLATS OF PROJECT COMPLETED AS RECOGNIZED BY LOCAL A UTHORITY, I.E., PMC IN ITS COMPLETION CERTIFICATE NO.BC0/03/01333 DATED 31.03.2008, THE LD. AUTHORISED REPRESENTATIVE HEAVILY RELIED ON DEC ISION OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRIGADE EN TERPRISES P. LTD. (SUPRA), AIR DEVELOPER (SUPRA), SHETH DEVELOPE RS (SUPRA) AND ALSO G. V.CORPORATION (SUPRA), WHEREIN DEDUCTION U/ S.80IB(10) WAS DENIED AS SIZE OF SOME OF THE RESIDENTIAL UNITS EXC EEDED PRESCRIBED LIMIT AS LAID DOWN ULS.80IB(10) OF THE ACT. ABOVE M ENTIONED DECISIONS ARE APPLICABLE IN THEIR OWN SPHERE, I.E. ON POINT OF EXCESS AREA OF SOME OF THE FLATS WHICH HOLD GOOD IN ITS OW N SPHERE. HOWEVER, IN CASE BEFORE US, DEDUCTION ULS.80IB(10) OF THE AC T HAS BEEN REJECTED ON THE GROUND THAT CONDITION OF COMPLETION OF PROJE CT BEFORE THE DUE DATE I.E., 31.03.2008 AS LAID DOWN ULS.80IB(10)(C) OF THE ACT, HAS NOT BEEN COMPLIED BY ASSESSEE WHICH IS BASIC CONDITION FOR ALLOWABILITY OF DEDUCTION ULS.80IB(10) OF THE ACT. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (SUPRA), WHEREIN CONDITION OF COMPL ETION AS LAID DOWN IN SECTION 801B(10)(A) COULD NOT BE COMPLIED W ITH BECAUSE OF A STAY BEING GRANTED BY MRTP COURT. THUS FAULT OF I NCOMPLETION OF CONSTRUCTION WAS NOT ATTRIBUTABLE TO ASSESSEE. IN C ASE SUCH A CONTINGENCY EMERGES WHICH MAKES THE COMPLIANCE WITH PROVISION 12 ITA NO.169/2014 AND CO NO.104/PN/2014 IMPOSSIBLE, THEN BENEFIT BESTOWED ON AN ASSESSEE CA NNOT BE COMPLETELY DENIED. SUCH LIBERAL INTERPRETATION SHOU LD BE USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMP LETING PROJECT IN TIME FOR THE REASONS BEYOND HIS CONTROL. IN CASE BE FORE US, AS STATED ON BEHALF OF ASSESSEE, THAT ASSESSEE SUBMITTED CERT AIN MODIFICATIONS/ RECTIFICATIONS FOR TOP FLOORS OF BUILDING. THE SAID MODIFICATION/ RECTIFICATION COULD NOT BE COMPLETED AS LOCAL AUTHO RITY COULD NOT APPROVE THE MODIFICATION AS THEIR FILES HAVE BEEN T AKEN OVER BY CONCERN INTELLIGENCE DEPARTMENT FOR INVESTIGATION O F VIOLATION OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTI ON AT RELEVANT POINT OF TIME. THIS FACT HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. THUS, ASSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAU SE WHICH COMPELLED THE IMPOSSIBILITY ON PART OF THE ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME. IT IS SETTLED LEGAL POSITION THAT THE LAW ALWAYS GIVE REMEDY AND THE LAW DOES WRONG TO NO ONE . WE AGREE TO PROPOSITION PUT FORWARD BY LD. DEPARTMENTAL REPRESE NTATIVE THAT PLAIN READING OF SECTION 80IB(10) OF THE ACT SUGGES TS ABOUT ONLY COMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONG WITH THE WORD COMPLETION. THIS STRICT INTERPRETATIO N SHOULD BE GIVEN IN NORMAL CIRCUMSTANCES. HOWEVER, IN CASE BEFORE US , ASSESSEE WAS PREVENTED BY REASONABLE CAUSE TO COMPLETE CONSTRUCT ION IN TIME DUE TO INTERVENTION OF CID ACTION ON ACCOUNT OF VIOLATI ON OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTI ON. ASSESSEE WAS INCAPACITATED TO COM LETE THE SAME IN TIME DUE TO R EASONS BEYOND HIS CONTROL. ASSESSEE SHOULD NOT SUFFER FOR SAME . THE REVISION OF PLAN IS VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STRICT PROVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONST RUED LIBERALLY AND THAT PROVISION FOR PROMOTING ECONOMIC GROWTH HA S TO BE INTERPRETED LIBERALLY. AT THE SAME TIME, RESTRICTIO N THEREON TOO HAS TO BE CONSTRUED STRICTLY SO AS TO ADVANCE THE OBJECT O F PROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVISIONS OF TAXING STA TUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUTE T O EFFECTUATE THE LEGISLATIVE INTENTION. IN VIEW OF THE ABOVE FACTS A ND CIRCUMSTANCES, WE HOLD THAT ASSESSEE IS ENTITLED FOR BENEFIT U/S 80IB (10) OF THE ACT IN RESPECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LI MIT. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY . ' 3.8 THE BUILDING B1 HAS BEEN CONTENDED BY THE APPELL ANT TO HAVE SATISFIED ALL THE CONDITIONS U/S 80IB(10) I.E. COMMENCE D ON 28-6-2006 AND COMPLETED BEFORE 31-03-2008 I.E. ON 18-3-2008; IS BUILT ON A PLOT AREA MORE THAN 1 ACRE, BUILT UP AREA OF ALL RESIDENT IAL UNITS BEING LESS THAN 1500 SQ.FT AND THERE IS NO CONSTRUCTION OF COMMER CIAL AREA AND THUS THE SAID BUILDING INDEPENDENTLY ON A STANDALONE BASIS SA TISFIED ALL THE CONDITIONS U/S 80IB(10). IN THIS REGARD THE APPELLANT HAS DRAWN ATTENTION TOWARDS THE CBDT NOTIFICATION DATED 4TH MA Y 2001 WHEREIN IT HAS BEEN SPECIFICALLY CLARIFIED THAT THE PROJECT INDE PENDENTLY SATISFYING THE CONDITIONS UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT, EVEN IF CONSTRUCTED ON AN EXISTING PLOT WILL BE ENTITLED F OR CLAIM OF DEDUCTION. 3.8.1 WHILE DECIDING THE CASE OF APOORVA PROPERTIES & ESTATES PVT. LTD. ALONG WITH OTHER CASES THE JURISDICTIONAL HIGH COURT H ELD IT TO BE COVERED AGAINST THE REVENUE BY ITS OWN DECISION IN CIT VS BRAHM A ASSOCIATES - ITA NO. 1194 OF 2010 WHEREBY THE DECISION OF THE ITA T REGARDING CONSIDERING PHASE-LION A STANDALONE BASIS AS IT SATISFIES AL L THE CONDITIONS AND HENCE, 80-IB(10) DEDUCTION SHOULD BE ALLOWED, WA S UPHELD BY HON'BLE BOMBAY HIGH COURT. 13 ITA NO.169/2014 AND CO NO.104/PN/2014 3.8.2 IN THE CASE OF VANDANA PROPERTIES (CITED SUPRA) THE HON. BOMBAY HIGH COURT HAS HELD AS UNDER: 18 . THE EXPRESSION 'HOUSING PROJECT' IS NEITHER DEFINED UNDER SECTION2 OF THE ACT NOR UNDER SECTION 8018 (10) OF THE ACT. EVEN UNDER THE MUNICIPAL CORPORATION ACT, 1988 AS ALSO UNDER THE DEVELOPMENT CONTROL REGULATIONS ACT GREATER MUMBAI, 1991,THE EXPRESSION HOUSING PROJECT IS NOT DEFINED. THERE FORE, THE EXPRESSION HOUSING PROJECT IN SECTION 80IB(10) WOULD HAVE TO BE CONSTRUED AS COMMONLY UNDERSTOOD. 19. . . . . . . . . . . . . . . . . . . . . . THE EXPRESSION 'HOUSING PROJECT' IN COMMON PARLANCE WOULD MEAN CONSTRUCTING A BUILDING OR GROU P OF BUILDINGS CONSISTING OF SEVERAL RESIDENTIAL UNITS. IN FACT, T HE EXPLANATION IN SECTION 80IB(10) SUPPORTS THE CONTENTION OF THE ASS ESSEE THAT THE APPROVAL GRANTED TO A BUILDING PLAN CONSTITUTES APP ROVAL GRANTED TO A HOUSING PROJECT. THEREFORE, IT IS CLEAR THAT CONSTR UCTION OF EVEN ONE BUILDING WITH SEVERAL RESIDENTIAL UNITS OF THE SIZE NOT EXCEEDING 1000 SQUARE FEET (E' BUILDING IN THE PRESENT CASE) WOULD CONSTITUTE A 'HOUSING PROJECT' UNDER SECTION 80IB (10) OF THE AC T. 20. . . . . . . . . . . . . . . . . . . . . . . . . WHEN THE PLANS FOR A, B, C AND D BUILDINGS WERE APPROVED DURING THE PERIOD FROM 1993 TO 1996, CONSTRUCTION OF 'E' BUILDING WAS NOT EVEN CONTEMPLA TED ON THE PLOT IN QUESTION. IT IS ONLY IN THE YEAR 2001 WHEN THE STAT US OF THE LAND WAS CONVERTED FROM SURPLUS VACANT LAND INTO WITHIN THE CEILING LIMIT LAND BY THE STATE GOVERNMENT, AN ADDITIONAL BUILDING COU LD BE CONSTRUCTED ON THE PLOT IN QUESTION AND ACCORDINGLY BUILDING PL AN FOR CONSTRUCTION OF 'E' BUILDING WAS SUBMITTED AND THE SAME WAS APPR OVED BY THE LOCAL AUTHORITY ON 11TH OCTOBER 2002 . 21. THE FACT THAT THE LOCAL AUTHORITY, NAMELY THE M UNICIPAL CORPORATION APPROVED THE BUILDING PLAN FOR 'E' BUIL DING ON THE CONDITION THAT ALL THE OBJECTIONS RAISED IN THE INT IMATION OF DISAPPROVAL DATED 12TH MAY 1993 RELATING TO THE EAR LIER HOUSING PROJECT ON THE SAME PLOT OF LAND SHALL BE APPLICABL E AND SHOULD BE COMPLIED WITH, CANNOT BE A GROUND TO HOLD THAT 'E' BUILDING IS EXTENSION OF THE EARLIER HOUSING PROJECT BECAUSE TH E EARLIER HOUSING PROJECT WAS COMPLETED PRIOR TO 1ST OCTOBER 1998 AND THE HOUSING PROJECT FOR CONSTRUCTION OF 'E' BUILDING WAS APPROV ED FOR THE FIRST TIME ON 11TH OCTOBER 2002. NOWHERE IN THE INTIMATIO N FOR DISAPPROVAL GRANTED FOR CONSTRUCTION OF 'E' BUILDIN G ON 11TH OCTOBER 2002, IT IS STATED THAT BUILDING 'E' CONSTITUTES EX TENSION OF THE EARLIER HOUSING PROJECT WHICH IS ALREADY COMPLETED. THE FAC T THAT THE OBJECTIONS RAISED WHILE APPROVING THE EARLIER HOUSI NG PROJECT ON THE SAME PLOT OF LAND WERE MADE APPLICABLE TO THE HOUSI NG PROJECT IN QUESTION, IT CANNOT BE INFERRED THAT THE HOUSING PR OJECT IN QUESTION CONSTITUTES EXTENSION OF THE EARLIER HOUSING PROJEC T. THEREFORE, IN THE FACTS OF THE PRESENT CASE, WHERE, NEITHER THE ASSES SEE HAD SOUGHT APPROVAL OF THE BUILDING PLAN FOR CONSTRUCTION OF E BUILDING AS EXTENSION OF THE EARLIER HOUSING PROJECT, NOR THE M UNICIPAL CORPORATION HAS GRANTED APPROVAL FOR THE HOUSING PR OJECT CONSISTING OF E BUILDING AS EXTENSION OF THE EARLIER HOUSING PROJECT, IT IS NOT OPEN TO THE INCOME-TAX AUTHORITIES TO CONTEND THAT APPROVAL TO THE HOUSING PROJECT GRANTED BY THE MUNICIPAL CORPORATIO N ON 11 TH OCTOBER 2002 CONSTITUTES EXTENSION OF THE HOUSING P ROJECT WHICH WAS APPROVED IN THE YEAR 1993. 22. RELIANCE PLACED BY THE REVENUE ON THE EXPLANATI ON TO SECTION 80IB (10)(A) WHICH WAS INTRODUCED WITH EFFECT FROM 1ST APRIL 2005 IS ALSO MISPLACED. WHAT THE SAID EXPLANATION CONTEMPLA TES IS THAT 14 ITA NO.169/2014 AND CO NO.104/PN/2014 WHERE THE APPROVAL IN RESPECT OF A HOUSING PROJECT IS GRANTED MORE THAN ONCE, THEN, THAT HOUSING PROJECT SHALL BE DEEM ED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY. F OR EXAMPLE, IN RESPECT OF A HOUSING PROJECT, THE ASSESSEE MAY SEEK AMENDMENT OF THE BUILDING PLAN AT SEVERAL STAGES OF THE CONSTRUC TION AND THE SAME MAY BE APPROVED. IN SUCH A CASE, THE EXPLANATION PR OVIDES THAT FOR THE PURPOSES OF SECTION 80IB (10) THE HOUSING PROJE CT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH T HE FIRST APPROVAL WAS GRANTED BY THE LOCAL AUTHORITY. THUS, THE EXPLANATION TO SECTION 80IB (10)(A) REFERS TO THE APPROVAL GRANTED TO THE SAME HOUSING PROJECT MORE THAN ONCE AND THE SAID EXPLANA TION WOULD NOT APPLY WHERE THE APPROVAL IS GRANTED TO DIFFERENT HO USING PROJECTS. IN THE PRESENT CASE, AS NOTED EARLIER, CONSTRUCTION OF 'E' BUILDING CONSTITUTES AN INDEPENDENT HOUSING PROJECT AND, THE REFORE, THE DATE ON WHICH THE EARLIER HOUSING PROJECT HAD COMMENCED CONSTRUCTION COULD NOT BE APPLIED TO THE HOUSING PROJECT CONSIST ING OF 'E' BUILDING MERELY BECAUSE THE CONDITIONS SET OUT WHILE GRANTIN G APPROVAL TO THE EARLIER HOUSING PROJECT HAVE ALSO BEEN MADE APPLICA BLE TO THE HOUSING PROJECT IN QUESTION.' THUS THE SET OF REASONING OF THE HON'BLE BOMBAY HIG H COURT WHICH HAS HELD THAT THE EXPRESSION 'HOUSING PROJECT' IN C OMMON PARLANCE WOULD MEAN CONSTRUCTING A BUILDING OR GROUP OF BUIL DINGS CONSISTING OF SEVERAL RESIDENTIAL UNITS. IN FACT, THE EXPLANAT ION IN SECTION 80IB(10) SUPPORTS THE CONTENTION OF THE ASSESSEE TH AT THE APPROVAL GRANTED TO A BUILDING PLAN CONSTITUTES APPROVAL GR ANTED TO A HOUSING PROJECT THAT CONSTRUCTION OF EVEN ONE BUILDING WIT H SEVERAL RESIDENTIAL UNITS OF SIZE NOT EXCLUDING 1000 'SQ. F T. WOULD CONSTITUTE A HOUSING PROJECT U/S 80IB.' THE HONBLE BOMBAY HIGH COURT WHILE ARRIVING AT THE CONCLUSION HAS ALSO RELIED ON THE CBDT NOTIFICATION REFERRED TO AB OVE. THUS THE BUILDING 'B1' OF PART B OF THE PROJECT ON A STANDAL ONE BASIS SATISFIES ALL THE CONDITIONS STIPULATED U/S.80IB(10) AND HENCE EL IGIBLE FOR THE CLAIM OF DEDUCTION UNDER THE SAID SECTION. 3.9 THE OTHER CONTENTION RAISED BY THE APPELLANT ON WITHOUT PREJUDICE BASIS OF ALLOWING PROPORTIONATE DEDUCTION O N COMPLETED PORTION WHICH WAS NOT CONSIDERED BY THE A.O. DURING T HE ASSESSMENT PROCEEDINGS. IN THIS REGARD, IT HAS BEEN CONTENDED BY THE APPELLANT THAT EVEN IF BOTH THE PROJECTS I.E. PART A COMPRISING OR B UILDINGS A 1 & A2 AND PART B COMPRISING OF BUILDING B1 ARE TREATED AS ONE H OUSING PROJECT THE SAME GET ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT ON A PROPORTIONATE BASIS. THE APPELLANT HAS PLACED RELIANCE ON A NUMBER OF JUDICIAL DECISIONS IN THIS REGARD. ON THIS ASPECT, I FI ND THAT THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. EKTA HOUSING PVT. LTD. (SUPRA) HAS UPHELD THE PLEA OF THE ASSESSEE FOR A PROPORTIONATE DEDUCTION U/S. 80IB(10) OF THE ACT WHERE SOME OF THE RESIDENTIAL UNI TS IN THE PROJECT VIOLATED THE CONDITION CONTAINED IN SEC. 80IB(10)(C ) OF THE ACT. THE MUMBAI BENCH AFTER NOTICING THE PRECEDENTS IN THE C ASE OF - I) ITO VS AIR DEVELOPERS, 25 DTR 287 (NAG.); II) DCIT VS BRIGADE ENTERPRISES PVT. LTD., 14 DTR 3 71 (BANG.); III) ACIT VS SHETH DEVELOPERS P. LTD., 33 SOT 277 (MUM.); IV) BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VS DCIT ; V) SJR BUILDERS VIS ACIT, 3 ITR 569 (MUM.) 15 ITA NO.169/2014 AND CO NO.104/PN/2014 HELD THAT THE ASSESSEE WOULD NOT LOOSE THE EXEMPTION U/S. 80IB(10) IN ENTIRETY WHERE SOME OF THE RESIDENTIAL UNITS WINGS HAD A 'BUILT- UP AREA' IN EXCESS OF THE LIMIT PRESCRIBED IN CLAUSE (C) OF SEC. 80 IB (10) BUT, IT WOULD BE ENTITLED TO PROPORTIONATE DEDUCTION U/S. 80IB(10) OF THE ACT WITH REGARD TO THE PROFITS EARNED ON THE ELIGIBLE UN ITS .. PARTICULARLY, THE TRIBUNAL ALSO CONSIDERED THE DECISION OF THE HON'BLE B OMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) AND HELD THAT THE SAME DOES NOT ENVISAGE DENIAL OF PROPORTIONATE DEDUCTION IN SUC H CIRCUMSTANCES. THE RELEVANT DISCUSSION, AS CONTAINED IN PARAGRAPHS 8 & 9 OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S EKTA HOUSING PVT. LTD. READS AS UNDER: 'VIII) WE NOW EXAMINE THE APPLICABILITY OF THE DECI SION OF THE HON'BLE BOMBAY HIGH COURT IN BRAHMA ASSOCIATES (SUPRA) TO T HE FACTS OF THIS CASE. ON A CAREFUL READING OF THIS JUDGMENT, WE FIN D THAT NOWHERE IT IS STATED THAT PROPORTIONATE DEDUCTION SHOULD NOT BE A LLOWED, IN CASE CERTAIN RESIDENTIAL UNITS HAD BUILT UP AREA IN EXCE SS OF PRESCRIBED LIMIT OF 1,000 SQ.FT. IN FACT, THIS ISSUE WAS NOT BEFORE THE HONBLE JURISDICTIONAL HIGH. COURT. THE QUESTIONS BEFORE THE HON'BLE JURIS DICTIONAL HIGH COURT WERE DIFFERENT AND, HENCE THE JUDGMENT CANNOT BE SA ID TO BE ON THIS ISSUE. THE ONLY ISSUE BEFORE THE HIGH COURT IS WHEN THERE IS A COMMERCIAL ELEMENT IN A RESIDENTIAL PROJECT, WILL B E ASSESSEE BE DENIED THE ENTIRE EXEMPTION. IN THIS CASE, THE HON'BLE HIG H COURT HAS OBSERVED THAT WHEN THE LOCAL AUTHORITY APPROVED A PLAN AS A HOUSING PROJECT OR A RESIDENTIAL CUM COMMERCIAL PROJECT, THE ASSESSEE WO ULD BE ENTITLED TO CLAIM FOR DEDUCTION UNDER SECTION 80IB(10) EVEN IF THE PROJECT HAD COMMERCIAL ELEMENT IN EXCESS OF 10%. AT PARAS 27 AN D 28, THE COURT OBSERVED AS FOLLOWS :- '27. THE QUESTION THEN TO BE CONSIDERED IS, WHETHER THE SPECIAL BENCH OF THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE P ROJECTS HAVING COMMERCIAL AREA UPTO 10% OF THE BUILT-UP AREA OF TH E PLOT ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) ON THE ENTIRE PROJECT UPTO 1.4.2005. ONCE THE BASIC ARGUMENT OF THE REVENUE TH AT THE HOUSING PROJECTS WITH COMMERCIAL USER ARE NOT ENTITLED TO S ECTION 80IB(10) DEDUCTION IS REJECTED, THEN IN THE ABSENCE OF ANY R ESTRICTION IMPOSED UNDER THE ACT, IT WAS NOT OPEN TO THE TRIBUNAL TO H OLD THAT THE PROJECTS APPROVED BY THE LOCAL AUTHORITIES HAVING RESIDENTIA L BUILDINGS WITH COMMERCIAL USER UPTO 10% OF THE PLOT AREA WOULD ALO NE BE ENTITLED TO DEDUCTION UNDER SECTION 80IB(10). AS NOTED EARLIER, RESTRICTION REGARDING COMMERCIAL USER HAS BEEN IMPOSED FOR THE FIRST TIME BY INTRODUCING CLAUSE (D) TO SECTION 80IB(10) WITH EFF ECT FROM 1.4.2005. THEREFORE, IT WAS NOT OPEN TO THE TRIBUNAL TO HOLD THAT PRIOR TO 1.4.2005, PROJECTS HAVING COMMERCIAL USER UPTO 10% OF THE PLOT AREA ALONE WOULD BE ELIGIBLE FOR SECTION 80IB(10) DEDUCT ION. 28. IN THE PRESENT CASE, THOUGH THE COMMERCIAL USER IS MORE THAN 10% OF THE PLOT AREA, THE TRIBUNAL HAS ALLOWED SECTION 80IB(10) DEDUCTION IN RESPECT OF 15 RESIDENTIAL BUILDINGS ON THE GROUN D THAT THE PROFITS FROM THESE EXCLUSIVELY RESIDENTIAL BUILDINGS COULD BE DETERMINED ON STAND ALONG BASIS. IN OUR OPINION, THAT WOULD NOT B E PROPER, BECAUSE SECTION 80IB(10) ALLOWS DEDUCTION TO THE ENTIRE PRO JECT APPROVED BY THE LOCAL AUTHORITY AND NOT TO A PART OF THE PROJEC T. IF THE CONDITIONS SET OUT IN SECTION 80IB(10) ARE SATISFIED, THEN DEDUCTI ON IS ALLOWABLE ON THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND THERE IS NO QUESTION OF ALLOWING DEDUCTION TO A PART OF THE PRO JECT. IN THE PRESENT CASE, THE COMMERCIAL USER IS ALLOWED IN ACCORDANCE WITH THE DC RULES AND HENCE THE ASSESSEE WAS ENTITLED TO SECTION 80IB (10) DEDUCTION ON THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY. HOWEVER, THE ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRI BUNAL IN RESTRICTING 16 ITA NO.169/2014 AND CO NO.104/PN/2014 THE DEDUCTION TO A PART OF THE PROJECT. THEREFORE, WHILE HOLDING THAT IN LAW, THE ASSESSEE WAS ENTITLED TO SECTION 80IB(10) DEDUCTION ON THE PROFITS OF THE ENTIRE PROJECT, IN THE FACTS OF THE PRESENT CASE, SINCE THE ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRI BUNAL, WE ARE NOT INCLINED TO DISTURB TO DISTURB THE DECISION OF THE TRIBUNAL IN RESTRICTING THE SECTION 80IB(10) DEDUCTION ONLY IN RESPECT OF T HE PROFITS DERIVED FROM 15 RESIDENTIAL BUILDINGS.' 3.9.1 SIMILARLY, IN THE CASE OF DCIT VS. BRIGADE ENTE RPRISES (P) LTD. (CITED SUPRA) THE TRIBUNAL HELD WHERE SOME OF THE R ESIDENTIAL UNITS IN A BIGGER HOUSING PROJECT, TREATED INDEPENDENTLY, ARE E LIGIBLE FOR RELIEF UNDER S. 80IB (10), RELIEF SHOULD BE GIVEN PRO-RATA A ND SHOULD NOT BE DENIED BY TREATING THE BIGGER PROJECT AS A SINGLE UNI T, MORE SO, WHEN ASSESSEE OBTAINED ALL SANCTIONS, PERMISSIONS AND CERTIFICAT ES FOR SUCH ELIGIBLE UNITS SEPARATELY. LIKEWISE, IN THE CASE OF RA HUL CONSTRUCTION CO. (CITED SUPRA) THE PUNE ITAT HAS HELD AS UNDER : 10. IN VIEW OF THE ABOVE DISCUSSION, FOR VERIFICAT ION OF ELIGIBILITY OF BENEFIT CLAIMED UNDER SECTION 80-IB(10) BY THE ASSE SSEE ON BUILDINGS A1 TO A5 IN 'AN' AND BUILDINGS B 1 TO B6 IN 'RN, TH E ASSESSING AUTHORITY HAS TO VERIFY AS TO WHEN THE BUILDING PLANS FOR THE SE BUILDINGS WERE FIRSTLY APPROVED BY THE LOCAL AUTHORITY AND TAKING THE SAID DATE OF APPROVAL AS A STARTING POINT, HE HAS TO VERIFY AS T O WHETHER THESE BUILDINGS WERE COMPLETED WITHIN THE PRESCRIBED TIME -LIMIT, I.E., 31-3- 2008 ON THE BASIS OF THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT ISSUED BY THE PMC. THE AUTHORITIES BELOW HAVE NOT DISPUTED THE FACT FURNISHED IN THIS REGARD BY THE A SSESSEE THAT UNDER THE PROJECT AN' CONSISTING OF BUILDINGS AI TO A5, THE F IRST BUILDING PLAN FOR A TYPE WAS APPROVED BY THE PMC ON 29-42003. HOWEVER, ACTUAL CONSTRUCTION OF A TYPE BUILDING WAS EXECUTED AS PER THE REVISED PLAN DATED 27-6-2003. THE PROJECT A TYPE BUILDING, I.E., A1 TO A5 CONSISTS OF 360 RESIDENTIAL UNITS AND THE CONSTRUCTION HAS BEEN COMPLETED BETWEEN 10-1-2005 TO 31-8-2005. THE AUTHORITIES BELOW HAVE ALSO NOT DISPUTED THIS MATERIAL FACT THAT RESIDENTIAL UNITS HAVE A MA XIMUM BUILT-UP AREA OF 1500 SQ. FT. LIKEWISE, THE MATERIAL FACTS THAT 'B' GROUP BUILDINGS IN 'RN' HAVE BEEN CONSTRUCTED ON LAND AREA OF 138203 SQ. FT ., HAS NOT BEEN DENIED BY THE AUTHORITIES BELOW. THEY HAVE ALSO NOT DENIED THESE MATERIAL FACTS THAT THE FIRST BUILDING PLAN WAS SAN CTIONED ON 29-4-2003 VIDE COMMENCEMENT CERTIFICATE ISSUED BY THE PMC. TH E OTHER MATERIAL FACTS, LIKE ACTUAL CONSTRUCTION WAS EXECUTED AS PER THE REVISED PLAN SANCTIONED ON 20-3-2004, THE PROJECT CONSISTS OF 39 6 FLATS AND CONSTRUCTION OF THESE FLATS HAVE BEEN COMPLETED ON 14-7-2006 AS PER THE COMPLETION CERTIFICATE ISSUED BY THE PMC ARE NO T IN DISPUTE. THE AUTHORITIES BELOW HAVE ALSO NOT DENIED THAT BUILT-U P AREA OF EACH OF THESE FLATS DOES NOT EXCEED 1500 SQ. FT. IT IS ALSO NOT IN DISPUTE THAT BOTH THE PROJECTS ARE ENTIRELY RESIDENTIAL PROJECTS AND THERE IS NO COMMERCIAL AREA THEREIN. UNDER THE ABOVE CIRCUMSTANCES, THE AS SESSEE IS VERY MUCH ENTITLED TO THE CLAIMED DEDUCTION UNDER SECTION 80- IB(10) ON THE BUILDINGS A1 TO A5 IN 'AN' AND BUILDINGS B1 TO B6 I N 'RN'.' 3.9.2 IT WOULD BE RELEVANT TO MENTION THE RECENT DE CISION OF THE PUNE ITAT IN THE CASE OF MAGARPATTA TOWNSHIP DEVELOPM ENT CONSTRUCTION CO. (2013) 32 TAXMANN.COM 63, THE HONB LE JURISDICTIONAL TRIBUNAL HELD AS UNDER : 17 ITA NO.169/2014 AND CO NO.104/PN/2014 22. IT HAS BEEN HELD IN VARIOUS CASES THAT WHATEVE R PORTION OF THE PROJECT SATISFIES THE CONDITIONS OF THE SECTION SHOULD BE CONSIDERED AS A HOUSING PROJECT FOR THE PURPOSES OF SECTION 80IB(10). 23 . . . . . 24 THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN HOLD ING THAT SINCE THE FLATS IN 'PRIME BUILDING' HAD BUILT-UP AREA EXCEEDI NG 1500 SQ. FT. , THE ENTIRE COSMOS PROJECT DID NOT QUALIFY FOR DEDUCTION UNDER SECTION 80- IB(10) IN RESPECT OF ITS PROFITS. THERE IS NOTHING ON RECORD TO SUGGEST THAT ASSESSEE HAS CLAIMED DEDUCTION IN RESPECT OF ' PRIME BUILDING', WHEREIN BUILT-UP AREA OF ITS UNITS IS EXCEEDING 150 0 SQ.FT. IN FACT THERE WERE 25 BUILDINGS IN COSMOS PROJECT OUT OF WHICH EX CEPT 'PRIME BUILDING', ALL OTHER BUILDINGS SATISFY THE CONDITIO NS OF BUILT-UP AREA LIMIT OF 1500 SQ.FT. THEREFORE, DEDUCTION UNDER SECTION 8 0IB(10) SHOULD BE ALLOWED IN RESPECT OF PROFIT FROM SUCH BUILDINGS. A S REGARDS TWO FLATS COMBINED TOGETHER, THE ASSESSEE'S STAND HAS BEEN TH AT IT CONCEIVED THE FLATS AS INDEPENDENT UNITS AND THESE WERE CONSTRUCT ED AS INDEPENDENT UNITS. THERE IS NOTHING ON RECORD TO SUGGEST THAT T HE ASSESSEE ITSELF HAS JOINED THE ADJACENT FLATS. IN THIS SITUATION, THE A SSESSEE SHOULD NOT SUFFER FOR ITS NO FAULT IF PURCHASER JOIN THE ADJOINING FL ATS. THEREFORE, THE ASSESSEE WAS ENTITLED FOR DEDUCTION UNDER SECTION 8 0-IB(10) IN RESPECT OF ENTIRE PROFITS COMPUTED AFTER MAKING ADDITIONS/D ISALLOWANCES IN RESPECT OF COSMOS PROJECT CONSISTING OF 24 BUILDING S EXCLUDING 'PRIME BUILDING'. ' 3.9.3 THE MADRAS HIGH COURT IN THE CASE OF VISWAS PROMOTERS (P ) LTD VS ACIT (SUPRA) ALSO RELIED UPON BY THE APPELLANT HAS HE LD AS UNDER: '13. GOING BY THE DEFINITION OF 'HOUSING PROJECT' U NDER SECTION 80HHBA, TO MEAN THE CONSTRUCTION OF 'ANY BUILDING' AND GOIN G BY THE DEDUCTION AVAILABLE UNDER SECTION 80-IB TO BE HUNDRED PER CEN T OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO THE ASSESS MENT YEAR FROM SUCH HOUSING PROJECT COMPLYING WITH THE CONDITION, EACH BLOCK IN THE LARGER PROJECT BY NAME AGRINI' AND 'VAJRA', HAS TO BE TAKE N AS AN INDEPENDENT BUILDING AND HENCE A HOUSING PROJECT, FOR THE PURPO SE OF CONSIDERING A CLAIM OF DEDUCTION. THE UNDERTAKING QUALIFYING FOR DEDUCTION UNDER SECTION 80-IB IS AN 'UNDERTAKING DEVELOPING AND BUI LDING HOUSING PROJECTS' AND THE EDUCATION IS IN RESPECT OF 'PROFI TS AND GAINS DERIVED FROM' SUCH HOUSING PROJECT, SATISFYING THE CONDITIO NS STIPULATED IN THE CLAUSE THEREIN. THUS, WITHIN A COMPOSITE HOUSING PROJECT, WHERE THERE ARE ELIGIBLE AND INELIGIBLE UNITS, THE ASSESSEE CAN CLAIM DEDUCTION IN RESPECT OF ELIGIBLE UNITS IN THE IN THE PROJECT AND EVEN WITHIN THE BLO CK, THE ASSESSEE IS ENTITLED TO CLAIM PROPORTIONATE RELIEF IN THE UNITS SATISFYING THE EXTENT OF THE BUILT UP AREA. 3.10 IN VIEW OF THE ABOVE FACTS AND ON THE REASONING AS BROUGHT OUT BY THE RATIO OF THE AFORESAID DECISIONS, THE CONTENTION O F ALLOWING PROPORTIONATE DEDUCTION STANDS MERIT AND THE JUDICIAL PRECEDENTS AND AUTHORITIES QUOTED DIRECTLY SUPPORT THE CLAIM MADE BY THE APPELLANT IN THIS REGARD. 3.11 IN VIEW OF THE ABOVE, GROUNDS OF APPEAL NO.1 TO 3 RAISED BY THE APPELLANT ARE LIABLE TO BE ALLOWED. 18 ITA NO.169/2014 AND CO NO.104/PN/2014 8. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) E RRED IN ALLOWING THE DEDUCTION U/S.80IB(10) OF THE ACT ON BU ILDING B-1 OF THE HOUSING PROJECT 'KUMAR PARADISE' ON STANDALONE BASIS WH EN BUILDING B-2 OF PART B OF THE HOUSING PROJECT WAS INCOMPLETE IN VI OLATION OF SECTION 80IB(10)(A)(III) OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN NOT APPRECIATING THE FACT THAT SECTION 80IB(10) OF THE A CT UNAMBIGUOUSLY REFERS TO 'HOUSING PROJECT' AND NOT TO SEPARATE BUILDI NGS CONSTRUCTED AS PART OF SUCH PROJECTS AND, THEREFORE, IN ORDER TO BE ELIGIBLE FOR DEDUCTION U/S.80IB(10), IT IS THE 'HOUSING PROJECT' IN ITS ENTIRE TY AND NOT SPECIFIC BUILDINGS CONSTRUCTED THEREUNDER, WHICH WILL HAVE TO FULFILL THE CONDITIONS SPECIFIED U/S.80IB(10) OF THE ACT. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN NOT CONSIDERING THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIATES, 333 ITR 289 WHEREIN IT WAS HELD THAT IF THE CONDITIONS SET OUT IN SECTION 80IB(10) ARE SATISFIED, T HEN DEDUCTION IS ALLOWABLE ON THE ENTIRE PROJECT APPROVED BY THE LOC AL AUTHORITY AND THERE IS NO QUESTION OF ALLOWING DEDUCTION TO A PART OF THE PROJECT. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 9. THE LD. DEPARTMENTAL REPRESENTATIVE HEAVILY RELIED ON THE ORDER OF THE AO. HE SUBMITTED THAT SINCE THE PROJECT W AS NOT COMPLETED BEFORE THE SPECIFIED DATE, THEREFORE, THE CIT(A) WA S NOT JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) OF BUILDING B1 OF THE HOUSING PROJECT ON STANDALONE BASIS WHEN BUILDIN G B2 OF PART B OF THE HOUSING PROJECT WAS INCOMPLETE. 10. REFERRING TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIATES REPORTED IN 333 ITR 2 89 HE SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT IF THE CONDITION SET OUT IN 80IB(10) ARE SATISFIED THEN DEDUCTION IS ALLOWABLE ON THE ENTIRE PROJECT APPROVED BY THE LOCAL A UTHORITY AND THERE IS NO QUESTION OF ALLOWING DEDUCTION TO A PART OF THE PROJECT. 19 ITA NO.169/2014 AND CO NO.104/PN/2014 11. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAN D HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE HOUSING PROJECT CONSISTS OF PART A AND PART B. PART A CONSISTS OF BUILDINGS A1 AND A2 WHICH WAS COMPLETED BEFORE 31-03-2008 WITH 108 FLA TS OF EACH. SIMILARLY, PART B CONSISTS OF BUILDINGS B1 AND B2. B1 CONSISTS OF 44 FLATS AND B2 CONSISTS OF 16 FLATS. BECAUSE OF NO FSI THE ASSESSEE CONVERTED B2 TO PARKING PLACE AND DID NOT CON STRUCT B2 PORTION. HOWEVER, A1 AND A2 AND B1 WERE COMPLETED BEFOR E 31-03- 2008. EVEN THE AO IN THE IN A.Y. 2008-09 HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) AFTER THE CASE WAS REOPENED U/S.148. 12. REFERRING TO PAGE 43 AND 44 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DEDUCTION CLAIMED U/ S.80IB(10) AMOUNTING TO RS.3,38,94,920/- WAS ALLOWED BY THE AO IN ASSE SSMENT COMPLETED U/S.143(3) ON 29-12-2009 FOR A.Y. 2007-08. REFER RING TO THE COPY OF THE ASSESSMENT ORDER FOR A.Y. 2008-09, A COP Y OF WHICH IS PLACED AT PAGES 58 TO 60 OF THE PAPER BOOK HE SUBMITTE D THAT THE AO IN THE ORDER PASSED U/S.143(3) R.W.S. 147 ORDER DATED 26- 03-2013 HAS ALLOWED THE CLAIM OF DEDUCTION OF RS.9,38,90,955/- U/S.80IB (10) IN RESPECT OF THE SAME HOUSING PROJECT KUMAR PARADISE. 13. REFERRING TO CBDT NOTIFICATION NO.205/3/2001/ITA-II AN D THE FOLLOWING DECISIONS HE SUBMITTED THAT DEDUCTION U/S.80IB(10) O F THE I.T. ACT HAS TO BE ALLOWED ON STANDALONE BASIS ON SATIS FACTION OF THE CONDITIONS PRESCRIBED IN THE SAID SUB-SECTION : 1. CIT VS. VANDANA PROPERTIES (2013) 353 ITR 36 (BOM.) 2. APOORVA PROPERTIES AND ESTATES PVT. LTD. ITA NO.113/ PN/2007) 3. VISWAS PROMOTERS PVT. LTD. VS. ACIT REPORTED IN 83 CCH 069 20 ITA NO.169/2014 AND CO NO.104/PN/2014 14. HE SUBMITTED THAT WHATEVER PORTION OF THE HOUSING P ROJECT WHICH SATISFIES THE CONDITIONS STIPULATED U/S.80IB(10) OF THE ACT HAS TO BE CONSIDERED AS A HOUSING PROJECT FOR THE PURPOSE OF ALLOWING DEDUCTION UNDER THE SAID SECTION. FOR THE ABOVE PROPOSIT ION HE RELIED ON THE FOLLOWING DECISIONS : 1. RAHUL CONSTRUCTIONS CO. VS. ITO REPORTED IN (2012) 51 SOT 192 (PUNE ITAT) 2. MUDHIT MADANLAL GUPTA VS. ACIT REPORTED IN (2011) 51 DTR 217 (MUMBAI ITAT) 3. SAROJ SALES ORGANISATION VS. ITO REPORTED IN (2008) 11 5 TTJ 485 (MUMBAI ITAT) 4. DCIT VS. MAGARPATTA TOWNSHIP DEVELOPMENT CONSTRUCTION CO. REPORTED IN (2012) 150 TTJ 590 (PUNE) 15. HE SUBMITTED THAT WHERE DUE TO ARISE OF CERTAIN CON TINGENCIES, MAKING COMPLIANCE IMPOSSIBLE, BENEFIT BESTOWED ON THE ASSESS EE CANNOT BE COMPLETELY DENIED. THEREFORE, WHATEVER PORTION IS COMPLETED SHALL BE TREATED AS A HOUSING PROJECT AND DED UCTION SHALL BE ALLOWED U/S.80IB(10) OF THE ACT. FOR THE ABOVE PROPOSIT ION, HE RELIED ON THE FOLLOWING DECISIONS : 1. RAMSUKH PROPERTIES VS. DCIT REPORTED IN (2013) 153 TTJ 211 (PUNE) 2. CIT VS. TARNETAR CORPORATION REPORTED IN (2014) 362 ITR 174 (GUJ.) 16. REFERRING TO THE FOLLOWING DECISIONS HE SUBMITTED THAT O NLY THOSE STATUTORY CONDITIONS WHICH ARE PRESENT ON THE ST ATUTE BOOK ON THE DATE OF APPROVAL OF THE HOUSING PROJECT NEEDS TO BE FULFILLED FOR CLAIMING DEDUCTION UNDER THE ACT : 1. SYSTEM ENTERPRISES VS. ITO ITA NO.1123/PN/2013 2. CIT VS. HAPPY HOMES ENTERPRISES ITA NO. 201 OF 2012 A ND 308 OF 2012 (BOM.) 3. CIT VS. VIRAJ PROPERTIES BOMBAY ITA NO.451 OF 2013 21 ITA NO.169/2014 AND CO NO.104/PN/2014 17. REFERRING TO THE RECENT DECISION OF THE TRIBUNAL IN THE CASE OF PADMAVATI DEVELOPERS VS. DCIT HE SUBMITTED THAT UNDER ID ENTICAL CIRCUMSTANCES THE TRIBUNAL HAS ALLOWED THE CLAIM OF PROPORT IONATE DEDUCTION. HE ACCORDINGLY SUBMITTED THAT IN VIEW OF THE S ERIES OF DECISIONS RELIED ON BY THE CIT(A) AS WELL AS THE DECISIONS NO W SUBMITTED THE MATTER STANDS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. THEREFORE, THE ORDER OF THE CIT(A) SHOULD BE UP HELD AND THE GROUNDS RAISED BY THE REVENUE SHOULD BE DISMISSED. 18. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE IN THE INST ANT CASE HAS CONSTRUCTED THE HOUSING PROJECT NAMELY KUMAR PA RADISE AT HADAPSAR, PUNE ON PLOT NO.2 SURVEY NO.134/1/1A/1. THE SAID PLOT IS DIVIDED INTO 3 PARTS, PART A, PART B AND PART C. THE FIR ST LAYOUT OF THE PLAN OF THE ENTIRE SCHEME WAS SANCTIONED BY THE LOCA L AUTHORITY, I.E. PMC ON 21-10-2003. THE ASSESSEE PROPOSED 2 SEPARA TE PROJECTS PART A AND B ON THE AFORESAID PLOT. THE PROJECT A OF TH E PLOT COMPRISED OF THE BUILDINGS A1 AND A2 AND PROJECT B COMPR ISED OF BUILDINGS B1, B2, B3 AND B4. THE TOTAL AREA OF THE PROJECT A WAS 8,853 SQ.MTRS. THE CONSTRUCTION OF THE BUILDING A1 WAS STA RTED VIDE COMMENCEMENT CERTIFICATE DATED 08-01-2004 AND THE SAID BUILDING A1 COMPRISING OF 108 UNITS WAS COMPLETED ON 06-07-2006. SIMILARLY, BUILDING A2 WHICH WAS COMMENCED VIDE COMMENCEMENT CERTIFICATE DATED 18-05-2004 CONSISTING OF 108 UNITS WAS C OMPLETED ON 06-11-2007. THE PROJECT B COMPRISING OF 10, 394.66 SQ .MTRS OF PART B AND 1606.02 SQ.MTRS OF PART C. THE BUILDING B1 COMM ENCED CONSTRUCTION VIDE COMMENCEMENT CERTIFICATE DATED 28-06-2 006 AND 22 ITA NO.169/2014 AND CO NO.104/PN/2014 THE SAME COMPRISED OF 44 RESIDENTIAL UNITS AND THE SAID BU ILDING B1 WAS COMPLETED ON 18-03-2008. THE OTHER BUILDING B2 WAS COMMENCED VIDE COMMENCEMENT CERTIFICATE DATED 28-06-200 6. HOWEVER, THE SAME WAS NOT COMPLETED AS ACCORDING TO TH E ASSESSEE THERE WAS INADEQUATE FSI TO COMPLETE THE ENTIRE BUILDING SINCE THE SAME WAS SANCTIONED WITH ONLY 16 UNITS WITH AN FSI OF 67 7.64 SQ.MTRS. SINCE ACCORDING TO THE ASSESSEE THE SAME WAS NOT ECONOMICALLY VIABLE THE ASSESSEE DID NOT COMPLETE THE RES IDENTIAL FLOORS BUT ONLY COMPLETED THE PARKING FLOORS FOR WANT OF A DEQUATE FSI. HOWEVER, SUBSEQUENTLY, THE ASSESSEE RENEWED THE SAME ON 22-06-2010 VIDE A SEPARATE COMMENCEMENT CERTIFICATE. FO R THE OTHER 2 BUILDINGS, I.E. B3 AND B4 ON PART C OF THE PLOT AN OTHER COMMENCEMENT CERTIFICATE WAS OBTAINED AND BUILDING PLAN WAS SANCTIONED AS THERE WAS NO ADEQUATE FSI FOR BUILDING B2 ITSELF. 19. IT IS THE CASE OF THE REVENUE THAT SINCE THE ASSES SEE HAS NOT COMPLETED THE B2 PROJECT, THEREFORE, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10). IT IS THE CASE OF THE ASSESSEE T HAT IT HAS COMPLETED A1, A2 AND B1 OF THE PROJECT AND BECAUSE OF IN ADEQUATE FSI THE ASSESSEE DID NOT COMPLETE B2 BUILDING AS IT WAS N OT ECONOMICALLY VIABLE. THEREFORE, ON STAND ALONE BASIS ITSELF, IT IS ENTITLED TO DEDUCTION U/S.80IB(10) IN RESPECT OF WHATEVER PORTION IS COMPLETED. IT IS ALSO THE CASE OF THE ASSESSEE THAT IN A.Y . 2007-08 THE DEDUCTION CLAIMED U/S.80IB(10) WAS ALLOWED IN ORDER PA SSED U/S.143(3). IN A.Y. 2008-09 THE DEDUCTION CLAIMED WAS ALLO WED IN THE ORDER PASSED U/S.143(3)/147. THEREFORE, THERE IS NO J USTIFICATION FOR DENYING THE CLAIM OF BENEFIT OF DEDUCTION U/S.80IB(10). 23 ITA NO.169/2014 AND CO NO.104/PN/2014 20. WE FIND MERIT IN THE ABOVE SUBMISSIONS OF THE LD. COUNS EL FOR THE ASSESSEE. THE AO IN THE ASSESSMENT PROCEEDINGS FOR A.Y. 2007- 08 HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT P ART A AND PART B ARE SEPARATE PROJECTS AND ACCORDINGLY ALLOWED THE CLA IM OF DEDUCTION U/S.80IB(10) FOR PART A OF THE PROJECT. SIMILARL Y, IN THE ASSESSMENT ORDER FOR A.Y. 2008-09 THE AO IN THE ORDER P ASSED U/S.143(3) R.W.S. 147 HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF A1 AND A2 UNITS. THERE IS NO DIS PUTE TO THE FACT THAT THE ASSESSEE IN THE INSTANT CASE HAS COM PLETED THE B1 BUILDING CONSISTING OF 44 FLATS. AS MENTIONED EARLIER THE BUILDIN G B1 IS HAVING BUILT UP AREA OF MORE THAN 1 ACRE. THE BUILT UP AREA OF ALL THE RESIDENTIAL UNITS ARE LESS THAN 1,500 SQ.FT. AND THERE IS NO COMMERCIAL CONSTRUCTION AND THE BUILDING INDEPENDENTLY ON STANDALONE BASIS SATISFIES ALL THE CONDITIONS U/S.80IB(10). I T HAS BEEN HELD BY VARIOUS DECISIONS THAT DEDUCTION U/S.80IB(10) OF THE INCOME TAX ACT, 1961 IS TO BE ALLOWED ON STANDALONE BASIS ON SATISFACTION OF THE CONDITIONS PRESCRIBED UNDER THE SAID SECTION. 21. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PADMA VATI DEVELOPERS (SUPRA) HAS HELD THAT ASSESSEE IS ENTITLED TO P RO-RATA DEDUCTION IN RESPECT OF THE RESIDENTIAL UNITS IN THE HOUSING PROJECT WHICH HAVE COMPLIED WITH THE CONDITIONS AS WELL AS ELIGIBLE FOR DEDUCTION U/S.80IB(10). THE RELEVANT OBSERVATION OF THE T RIBUNAL FROM PARA 36 TO 38 READS AS UNDER : 36. NOW, COMING TO THE SECOND HOUSING PROJECT IN SEC TOR NO.7. ADMITTEDLY, THE ASSESSEE IN ASSESSMENT YEAR 2006-07 HAS COM PLETED ONLY 2 BUILDINGS I.E. Q-1, Q-2 AND SOME FLATS IN ASSESSMEN T YEAR 2007-08. THE BUILDING COMPRISED IN P-1 TO P-6 AND THE ROW HOU SES HAVE NOT BEEN CONSTRUCTED BY THE ASSESSEE TILL THE DATE OF SURVEY AND U PTO 31.03.2008. 37. THE HONBLE MADRAS HIGH COURT IN VISWAS PROMOTERS P VT. LTD. VS. ACIT, (2013) 255 CTR 149 (MAD.) HAVE LAID DOWN THAT WITHIN A COMPOSITE HOUSING PROJECT, WHERE THERE ARE ELIGIBLE A ND INTELLIGIBLE UNITS, 24 ITA NO.169/2014 AND CO NO.104/PN/2014 THE ASSESSEE CAN CLAIM DEDUCTION IN RESPECT OF ELIGIBLE UNITS IN THE PROJECT AND EVEN WITHIN THE BLOCK, THE ASSESSEE IS ENTIT LED TO CLAIM PROPORTIONATE RELIEF AGAINST THE UNITS SATISFYING THE E XTENT OF BUILT-UP AREA. 38. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE BA NGALORE BENCH OF THE TRIBUNAL IN DCIT VS. BRIGADE ENTERPRISES (P.) LTD. , (2008) 119 TTJ 269 (BANG) AND THE PUNE BENCH OF THE TRIBUNAL IN RU NWAL MULTIHOUSING PVT. LTD. VS. ACIT IN ITA NOS.1015, 1016 AND 1017/PN/ 2011 RELATING TO ASSESSMENT YEARS 2003-04 TO 2005-06, ORDER DATED 21.11.2 012. FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT THE ASSESSEE IS ENTITLED TO PRO-RATA DEDUCTION IN RESPECT OF RESIDENT IAL UNITS IN THE HOUSING PROJECT NO.7, WHICH HAVE COMPLIED WITH THE C ONDITIONS AND WERE ELIGIBLE FOR THE DEDUCTION UNDER SECTION 80-IB(10) O F THE ACT. HOWEVER, THE SAID DEDUCTION IS ALLOWABLE TO THE ASSESSEE ONLY IN R ESPECT OF UNITS CONSTRUCTION OF WHICH HAS BEEN COMPLETED UPTO 31ST MAR CH, 2008. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE IN THIS REGARD IN ASSESSMENT YEARS 2006-07 AND 2007- 08 AND IF THE ASSESSEE HAS FULFILLED THE AFORESAID CONDITIONS UNDER SECTION 80- IB(10) OF THE ACT, PRO-RATA DEDUCTION UNDER THE SAID SECTION COULD BE ALLOWED TO THE ASSESSEE IN RELATION TO THE BUILDINGS / F LATS COMPLETED IN SECTOR NO.7. CONSEQUENTLY, THE GROUND OF APPEAL RAI SED BY THE ASSESSEE IS PARTLY ALLOWED. 22. SINCE THE ASSESSEE IN THE INSTANT CASE HAS COMPLET ED THE 44 UNITS OF PROJECT B1 BEFORE 31-03-2008, A FACT BROUGHT O N RECORD BY THE AO AT PAGE 2 OF THE ORDER, THEREFORE, THE ASSESSE E IS ENTITLED TO PRO-RATA DEDUCTION IN RESPECT OF SAID UNITS. THE VARIOUS DECISIONS RELIED ON BY LD. DEPARTMENTAL REPRESENTATIVE ARE DISTINGUIS HABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE DISCUSSION AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE CIT(A) WE FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. CO NO.104/PN/2014 : 23. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT THE GROUNDS IN THE CROSS OBJECTION RAISED BY THE ASSES SEE ARE MERELY IN SUPPORT OF THE ORDER OF THE CIT(A). 25 ITA NO.169/2014 AND CO NO.104/PN/2014 24. AFTER HEARING BOTH THE SIDES, WE FIND THE GROUNDS RAIS ED BY THE ASSESSEE IN THE C.O. ARE MERELY IN SUPPORT OF THE ORDER OF THE CIT(A). WE HAVE ALREADY UPHELD THE ORDER OF THE CIT(A) AND THE G ROUNDS RAISED BY THE REVENUE HAVE BEEN DISMISSED. THEREFORE, THE C.O. FILED BY THE ASSESSEE BECOMES INFRUCTUOUS. ACCORDINGLY, THE C O FILED BY THE ASSESSEE IN DISMISSED. 25. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL A S THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29-01-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 29 TH JANUARY, 2016. LRH'K ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT (A) - I I , PUNE 4. 5. 6. CIT-II, PUNE ' *, *, IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , ' //TRUE COPY// / * / SR. PRIVATE SECRETARY *, IQ.KS / ITAT, PUNE