Sri Mahalakshmi Housing, CHENNAI V. ITO, CHENNAI

CO 24/CHNY/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8322 (ITAT-CHENNAI)
• Duration Of Justice: 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 04-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: T BANUSEKAR
• Section: 143(3); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NOS. 2176 & 2177/MDS/2012 ASSESSMENT YEARS : 2007-08 & 2008-09 THE INCOME TAX OFFICER, V. M/S. SANGHVI & DOSHI BUSINESS WARD-XV(3), ENTERPRISES, NO. 560, CHENNAI. 3H, C ENTURY PLAZA, ANNA SALAI, TEYNAMPET, CHENNAI-600 018. (PAN : AAYFS0257P) (APPELLANT) (RESPONDENT) C. O. NOS. 21 & 22/MDS/2013 (IN ITA NOS. 2176 & 2177/MDS/2012) ASSESSMENT YEARS : 2007-08 & 2008-09 M/S. SANGHVI & DOSHI V. THE INCOME TAX OFFICER, ENTERPRISES, NO. 560, 3H, BUSINESS WARD-XV(3), CENTURY PLAZA, ANNA SALAI, CHENNAI. TEYNAMPET, CHENNAI-600 018. (CROSS OBJECTOR) (RESPONDENT) ITA NO.2178 & 2179/MDS/2012 ASSESSMENT YEARS : 2007-08 & 2008-09 THE INCOME TAX OFFICER, BUSINESS WARD-XV(3), CHENNAI. V. M/S. MAHALAKSHMI HOUSING, NO.560, 3H, CENTURY PLAZA, ANNA SALAI, TEYNAMPET, CHENNAI-600 018. (PAN : AAZFS0513M) ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 2 : C.O. NOS. 23 & 24/MDS/2013 (IN ITA NOS. 2178 & 2179/MDS/2012) ASSESSMENT YEARS : 2007-08 & 2008-09 M/S. MAHALAKSHMI HOUSING, V. THE INCOME TAX OFFICER, NO.560, 3H, BUS INESS WARD-XV(3), CENTURY PLAZA, ANNA SALAI, CHENNAI . TEYNAMPET, CHENNAI-600 018. (CROSS OBJECTOR) (RESPONDENT) ITA NOS. 2180 & 2181/MDS/2012 ASSESSMENT YEARS : 2007-08 & 2008-09 THE INCOME TAX OFFICER, V. M/S. MAHALAKS HMI BUILDERS, BUSINESS WARD-XV(3), NO. 560, 3H, CHENNAI. CENTU RY PLAZA, ANNA SALAI, T EYNAMPET, CHENNAI-18. (PAN : AAYFS6887P) (APPELLANT) (R ESPONDENT) C.O. NOS. 25 & 26/MDS/2013 (IN ITA NOS. 2180 & 2181/MDS/2012) ASSESSMENT YEAR 2007-08 & 2008-09 M/S. MAHALAKSHMI BUILDERS, V. THE INCOME TAX OFFICER, NO. 660, 3H, CENTURY PLAZA, BUSINESS W ARD-XV(3), ANNA SALAI, TEYNAMPET, CHENNAI. CHENNAI. (CROSS OBJECTOR) ( RESPONDENT) DEPARTMENT BY : DR. S. MOHARANA, CIT ASSESSEES BY : SHRI T. BANUSEKAR, CA DATE OF HEARING : 05.0 2.2013 DATE OF PRONOUNCEMENT : 26.02.201 3 ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 3 : O R D E R PER BENCH : THESE APPEALS BY THE REVENUE AND THE CROSS OBJECTIONS BY THE ASSESSEES ARE DIRECTED AGAI NST THE ORDERS OF THE CIT(APPEALS)-XII, CHENNAI DATED 01-08 -2012 AND RELATE TO THE ASSESSMENT YEARS 2007-08 AND 2008-09 . AS COMMON ISSUES ARE INVOLVED IN THESE APPEALS AND THE CROSS OBJECTIONS, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE . 2. ITA NOS. 2176 & 2177/MDS/2012: GROUND NO. 1 IS GENERAL IN NATURE AND REQUIRES NO ADJUDICATION. GROUNDS 2.1 TO 2.4 RELATE TO DEDUCTI ON UNDER SECTION 80-IB(10) OF THE INCOME TAX ACT, 1961 ('THE ACT' FOR SHORT). 3. FACTS IN BRIEF ARE THAT THE ASSESSEE IN THESE AP PEALS IS A FIRM AND FILED RETURNS OF INCOME FOR THE ASSESSMEN T YEARS 2007-08 AND 2008-09 ON 31-10-2007 AND 30-09-2008 ADMITTING TOTAL INCOME OF ` 73,370/- AND ` 1,19,665/- RESPECTIVELY AFTER CLAIMING DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT. THE ASSESSING OFFICER COMPLETED THE AS SESSMENT U/S 143(3) OF THE ACT DISALLOWING THE CLAIM OF THE ASSESSEE ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 4 : UNDER SECTION 80-IB(10) OF THE ACT AND BROUGHT THE E NTIRE PROFITS TO TAX. THE ASSESSEE FIRM IS ENGAGED IN TH E CONSTRUCTION OF HOUSING PROJECT. THE ASSESSEE WAS CARRYING ON A HOUSING PROJECT NAMED VIMALACHAL AT NO. 1088, P .H. ROAD, VEPERY, CHENNAI-7. THE HOUSING PROJECT IS BEING DE VELOPED ON THE LAND OWNED BY M/S. HOTEL MULLAI PVT. LTD. BY EN TERING INTO A JOINT AGREEMENT IN THE FINANCIAL YEAR 2003-04, ON 24-04- 2003. ACCORDING TO THE AGREEMENT THE LAND OWNERS W ERE TO BE COMPENSATED AT THE RATE OF ` 600/- PER SQ.FT OF SUPER BUILT UP AREA. THE ASSESSEE UNDERTOOK THE DEVELOPMENT OF TH E HOUSING PROJECT AND CLAIMED DEDUCTION UNDER SECTION 80-IB(10 ) OF THE ACT IN THE ASSESSMENT YEARS 2005-06, 2006-07, 2007- 08, 2008- 09 AND SO ON, ON PERCENTAGE COMPLETION METHOD. TH E ASSESSING OFFICER REJECTED THE CLAIM OF DEDUCTION U NDER SECTION 80-IB(10) OF THE ACT ON THE GROUND THAT (I) THE ASSE SSEE IS NOT THE OWNER OF THE LAND, (II) THE ASSESSEE IS ONLY A WORKS CONTRACTOR COVERED BY THE EXPLANATION TO SECTION 80 -IB(10) AND (III) SOME OF THE FLATS HAVE EXCEEDED THE BASIC THR ESHOLD LIMIT OF 1500 S.FT. 4. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER BEFORE THE CIT(APPEALS). IT WAS SUBMITTED BEFORE T HE ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 5 : CIT(APPEALS) THAT EVEN THE LAND IN THE NAME OF M/S. HOTEL MULLAI PVT. LTD. THE ASSESSEE FIRM CONCEIVED THE PR OJECT, OBTAINED ALL NECESSARY APPROVALS, INVESTED ITS OWN MONEY AND CONSTRUCTED THE BUILDINGS AND THEREFORE SUBMITTED T HAT IT IS ELIGIBLE FOR THE DEDUCTION UNDER SECTION 80-IB(10) O F THE ACT. IT WAS FURTHER SUBMITTED BEFORE THE CIT(APPEALS) TH AT THE ASSESSEE IS NOT A MERE WORKS CONTRACTOR. THE ASSES SEE CONCEIVED THE HOUSING PROJECT, OBTAINED ALL THE PER MITS, INVESTED THE NECESSARY FUNDS FOR THE CONSTRUCTION A CTIVITY BEARING ALL RISKS AND ENJOYED THE SALE CONSIDERATIO N OF THE FLATS. THEREFORE IT WAS SUBMITTED THAT THE ASSESSE E IS THE REAL DEVELOPER AND BUILDER OF THE HOUSING PROJECT AND EL IGIBLE FOR THE DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT. IT WAS SUBMITTED BEFORE THE CIT(APPEALS) THAT IN RESPECT OF THE SAME PROJECT FOR THE ASSESSMENT YEARS 2005-06, 2006-07 T HE ASSESSING OFFICER HAD DISALLOWED THE CLAIM BUT THE TRIBUNAL ULTIMATELY ALLOWED THE DEDUCTION TO THE ASSESSEE U/ S. 80- IB(10) OF THE ACT. THEREFORE THE SAME MAY BE FOLLOW ED AND THE CLAIM MAY BE ALLOWED FOR THIS YEAR ALSO. THE C IT(APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A LLOWED THE ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 6 : DEDUCTION U/S 80-IB(10) TO THE ASSESSEE BY OBSERVING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. THE MAIN CONTENTIONS OF THE ASSESSING OFFICER BEFORE DISALLO WING THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) WERE THAT THE ASSES SEE IS NOT THE OWNER OF THE LAND, THE ASSESSEE ACTED AS A MERE WORKS CON TRACTOR AND ALSO SOME OF THE FLATS EXCEEDED THE THRESHOLD LIMIT OF 1 500 SQ.FT. AS CLAIMED BY THE ASSESSEE, THE ASSESSEES HOUSING PROJECT, ON WHICH IT HAS CLAIMED DEDUCTION U/S 80-IB(10) OF THE ACT, COM MENCED IN THE FINANCIAL YEAR 2003-04, RELEVANT TO THE A.Y.2005-06 . SINCE A.Y. 2005-06, THE ASSESSEE HAS BEEN CLAIMING THE DEDUCTION U/S 80 -IB(10) OF THE ACT ON THIS PROJECT ON PERCENTAGE COMPLETION BASIS. IN THE ASSESSMENTS OF A.YS. 2005-06 AND 2006-07, THE ASSESSING OFFICER DI SALLOWED THE ASSESSEES CLAIM OF DEDUCTION U/S 80-IB(10) OF THE ACT, ON THE GROUND THAT (A) THE ASSESSEE IS NOT THE OWNER OF THE LAND. (B) THE ASSESSEE IS ONLY A WORKS CONTRACTOR COVERED BY THE EXPLANATION TO SECTION 80-IB(10). (C) SOME OF THE FLATS HAVE EXCEEDED THE BASIC THRES HOLD LIMIT OF 1500 SQ.FT. ON APPEAL THE HONBLE ITAT (THIRD MEMBER BENCH), C HENNAI, VIDE ITS COMBINED ORDER IN THE CASE OF ASSESSEE AND ITS TWO SISTER CONCERNS HAVING IDENTICAL FACTS) IN ITA NOS. 259 TO 263/MDS/ 2010 DATED 17.06.2011, HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80-IB(10) OF THE ACT. THE GISTU OF THE ORDER IS: (I) ASSESSEES WERE BUILDERS/DEVELOPERS AND THEREFOR E ELIGIBLE FOR DEDUCTION U/S 80-IB(10). (II) EVEN WHERE THE PURCHASERS OF THE FLATS COMBINE D TWO FLATS TOGETHER THEREBY EXCEEDING THE LIMIT OF BUILT-UP AR EA OF 1500 SQ.FT., IT COULD STILL BE CONSIDERED AS PROPER COMPLIANCE OF THE STIPULATION PROVIDED IN SECTION 8 0-IB(10) THAT THE BUILT-UP AREA SHOULD NOT EXCEED 1500 SQ.FT . AND HENCE, ASSESSEES ARE ELIGIBLE FOR DEDUCTION UNDER S ECTION 80-IB(10). (III) EVEN THOUGH THE ASSESSEE HAD FURNISHED PROJEC T COMPLETION CERTIFICATES WHICH ARE DATED BEFORE 31 ST MARCH 2008, THESE CERTIFICATES RELATED BACK TO THE DATE O N WHICH ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 7 : THE APPLICATIONS FOR SUCH CERTIFICATES WERE MADE BY THE ASSESSEES AND THEREFORE, ASSESSEES ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB(10). (IV) IN SO FAR AS THE ISSUE WHETHER BUILT-UP AREA O F CERTAIN FLATS MEASURING MORE THAN 1500 SQ.FT. IS CONCERNED, IT IS RESTORED TO THE FILES OF THE ASSESSING OFFICER WITH A DIRECTION TO MEASURE A FLAT IN THE PRESENCE OF DVO AS WELL AS REGISTERED VALUATION OFFICER APPOINTED BY THE AS SESSEE. (V) PRIVATE TERRACE AREA SHOULD BE INCLUDED IN THE BUILT UP AREA OF THE FLATS FOR THE PURPOSE OF WORKING OUT STATUTO RY EXTENT OF THE BUILT-UP AREA; AND (VI) BASED ON MAJORITY VIEW, DEDUCTION SHOULD BE AL LOWED TO THE ASSESSEES UNDER SECTION 80IB(10) IN RESPECT OF FLAT HAVING BUILT-UP AREA NOT EXCEEDING 1500 SQ.FT. ARE NOT ENTITLED FOR DEDUCTION IN RESPECT OF THESE FLATS HA VING BUILT- UP AREA EXCEEDING 1500 SQ.FT. THE FACTS OF THE CURRENT ASSESSMENT YEARS (I.E. A. YS 2007-08 AND 2008- 09) UNDER CONSIDERATION ARE EXACTLY THE SAME AND ID ENTICAL TO THOSE OF A.YS. 2005-06 AND 2006-07, WHERE THE ITAT HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 890-IB(10) OF THE ACT. IN FACT, IT IS THE SAME HOUSING PROJECT, WHICH IS CONTINUING FROM THE A.Y. 2005-06 TO TILL THE CURRENT ASSESSMENT YEARS. HENCE THE ABOVE DECISION OF ITAT FOR A.YS. 2005-06 AND 2006-07 IS SQUARELY APPLICABLE FOR THE CURRENT ASSESSMENT YEARS (I.E. A.YS. 2007-08 AND 2008-09) UNDER CONSID ERATION ALSO. LIKE THE EARLIER A.YS. 2005-06 AND 2006-07, THE ASSESSEE , DURING THE FINANCIAL YEARS RELEVANT TO THE CURRENT ASSESSMENT YEARS ALSO , RECEIVED AND ACCOUNTED THE SALE CONSIDERATION OF THE FLATS OF TH E HOUSING PROJECT, IN ITS P&L ACCOUNT, OFFERED THE INCOME IN ITS HANDS AND CL AIMED DEDUCTION U/S 80-IB(10) OF THE ACT. IN VIEW OF THE DECISION OF THE ITAT IN ASSESSEES OWN CASE, THE ASSESSING OFFICERS ACTION IN TREATING THE ASSESSEE AS A MERE WORKS CONTRACTOR AND REJECTING THE CLAIM OF DEDUCTION U/S 80-IB(10) OF T HE ACT IS NOT JUSTIFIED. THE ASSESSING OFFICER IS, THEREFORE, DIRECTED TO GR ANT THE BENEFIT OF DEDUCTION U/S 80-IB(10) OF THE ACT TO THE ASSESSEE. THE ASSESSEE SUCCEEDS IN ITS APPEALS IN THIS REGARD. ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 8 : 5. THE REVENUE HAS CARRIED THE MATTER IN APPEAL BEF ORE THE TRIBUNAL. AT THE TIME OF HEARING THE LEARNED COUNS EL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAV OUR OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2005-06 AND 2006- 07 AND EVEN THE MATTER TRAVELED TO THE JURISDICTIONAL HON BLE HIGH COURT AND THE HONBLE JURISDICTIONAL HIGH COURT HAS UPHELD THE ORDER OF THE TRIBUNAL AND DECIDED THE ISSUE IN FAVO UR OF THE ASSESSEE IN TAX CASE (APPEAL) NOS. 581 & 582 OF 201 1 AND 314 & 315 OF 2012 AND M.P. NO. 1 OF 2011 BY ORDER D ATED 01- 11-2012 IN THE CASE OF CIT V. M/S. SANGHVI AND DOSHI ENTERPRISES. 6. ON THE OTHER HAND, THE LEARNED DR FAIRLY CONCEDE D THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. 7. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE TRIBUNAL ON SIMILAR FACTS HAS CONFIRMED TH E ORDER OF THE CIT(APPEALS). THE MATTER WAS TAKEN BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE HONBLE JURISDICT IONAL HIGH COURT CONFIRMED THE VIEW TAKEN BY THE TRIBUNAL. TH EREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH OF THIS TRIBUNAL AS WELL AS THE DECISION OF THE HONBL E JURISDICTIONAL HIGH COURT, WE FIND NO INFIRMITY IN THE ORDER ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 9 : PASSED BY THE CIT(APPEALS). THESE GROUNDS OF APPEA L RAISED BY THE REVENUE ARE DISMISSED. 8. GROUNDS 2.5. 2.6 AND 3 RELATING TO EXCEEDING THE BUILT UP AREA OF 1500 SQ.FT. ARE CONCERNED, THE ASSESSING OF FICER HAS DENIED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE BUILT UP AREA IS MORE THAN 1500 S.FT. ON APPEAL, THE CIT (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS U NDER : REGARDING THE FLATS EXCEEDING THE BUILT-UP AREA OF 1500 SQ.FT. EACH, THE HONBLE ITAT, IN ASSESSEES OWN CASE FOR THE EARLIER YEARS, HELD THAT INCOME RELATING THE SAID FLATS (WHOSE BUILT-UP AREA IS MORE THAN 1500 SQ.FT.) IS TO BE EXCLUDED FROM THE ELIGIBLE PROFITS OF THE BUSINESS FOR THE PURPOSE OF DEDUCTION U/S 80- IB(10) OF THE ACT. IN OTHER WORDS, THE DEDUCTION U/S 80-IB(10) OF THE ACT IS AVAILABLE PROPORTIONATE TO THE FLATS WHOSE BUILT-UP AREA IS NOT MORE THAT 1500 SQ.FT. EACH. HENCE THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE DEDUCTION U/S.80-IB(10) OF THE ACT PROPORTIONATE TO THE TOTAL BUILT-UP AREA OF ALL THE FLATS WHOSE BUILT-UP AREA IS NOT MORE THAT 1500 SQ.FT. EACH, BY USING THE FOLLOWING FORMULA: ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 10 : TOTAL INCOME OF THE TOTAL BUILT-UP AREA OF AL L THE FLATS PROJECT DURING THE X WHOSE BUILT UP AREA IS NOT MORE FINANCIAL YEAR THAT 1500 SQ.FT. EACH _________________________ TOTAL BUILT-UP A REA OF ALL THE FLATS OF THE PROJECT (INCLUDING THE FLATS WITH BUILT-UP AREA > 1500 SQ.FT. FURTHER, WHILE DETERMINING THE BUILT-UP AREA OF THE FLATS, WHEREVER EXCLUSIVE RIGHTS IN THE TERRACE ARE ASSIGNED/GIVEN TO ANY A FLAT OWNER, THE SUCH AREA O F THE TERRACE IS TO BE TREATED AS PROJECTION AND INCLUDED IN THE BUILT-UP AREA OF THE FLATS. IT IS ALSO IMPORTANT TO MENTION HERE THAT THE HONBLE ITAT IN THE ASSESSEES OWN CASE (IN A.YS. 2005-06 AND 2006-07), DIRECTED THE ASSESSING OFFICER TO GET THE FLATS MEASURED BY THE DEPARTMENTAL VALUER IN THE PRESENCE OF THE ASSESSEES APPROVED VALUER AND DETERMINE THE BUILT UP AREA OF THE FLATS, WHEREVER THE REVENUE FEELS THAT THE FLATS EXCEEDED THE THRESHOLD LIMITS 1500 SQ.FT. SINCE IT IS THE SAME PROJECT (WITH THE SAME FLATS) WHICH IS CONTINUING I N THE CURRENT ASSESSMENT YEARS 2007-08 AND 2008-09 ALSO, THE ASSESSING OFFICER IS REQUIRED TO ADOPT TH E SAME MEASUREMENTS OF THE FLATS (I.E. TO BE MEASURED AS PER THE DIRECTIONS OF THE ITAT) FOR THE PURPOSE OF DECIDING FLATS EXCEEDING 1500 SQ.FT. AND THE TOTAL BUILT-UP AREA OF THE FLATS EXCEEDING THE 1500 SQ.FT. FOR THE PURPOSE OF ALLOWING THE PROPORTIONATE ALLOWANCE/DISALLOWANCE OF DEDUCTION ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 11 : U/S 80-IB(10) OF THE ACT, FOR THE A.YS. 2007-08 AND 2008-09 ALSO. 9. ON BEING AGGRIEVED, THE REVENUE HAS CARRIED THE MATTER BEFORE THE TRIBUNAL. AT THE TIME OF HEARING, THE L EARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. SANGHVI AND DOSHI ENTERPRISES (SUPRA). 10. ON THE OTHER HAND, THE LEARNED DR FAIRLY CONCED ED THAT THE ISSUE IS COVERED. 11. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE CIT(APPEALS) BY FOLLOWING THE DECISION IN THE ASSES SEES OWN CASE FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07 D IRECTED THE ASSESSING OFFICER TO GET THE FLATS MEASURED BY THE DEPARTMENTAL VALUER AND THEREAFTER DIRECTED TO PROP ORTIONATELY ALLOW DEDUCTION U/S 80IB(10) OF THE ACT FOR ASSESSM ENT YEARS 2007-08 AND 2008-09 ALSO. IN VIEW OF THE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES O WN CASE AND ALSO THE DECISION OF THE HONBLE JURISDICTIONAL HIG H COURT IN THE ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 12 : ASSESSEES OWN CASE, THESE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DISMISSED. 12. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE IN ITA NOS.2176 & 2177/MDS/2012 ARE DISMISSED. 13. C.O. NOS. 21 & 22/MDS/2013: THERE IS A DELAY OF 23 DAYS IN FILING THE CROSS OBJECTIONS BY THE AS SESSEE. ONE OF THE PARTNERS OF THE ASSESSEE, SHRI PRAVIN KUMAR JAIN HAS FILED AN AFFIDAVIT WHEREIN HE HAS EXPLAINED THAT TH E DELAY HAD OCCURRED AS THE PAPERS WERE MISPLACED IN THE OFFICE OF THE CHARTERED ACCOUNTANT OF THE ASSESSEE AND THAT THE D ELAY WAS NEITHER WANTON NOR INTENTIONAL. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, WE FIND THAT THIS IS A FIT CASE TO CONDONE THE DELAY IN FILING THE CROSS OBJECTIONS. ACCORDINGLY WE CONDONE THE DELAY AND ADMIT THE CROSS OBJECTIONS OF THE ASSESSEE. 14. IN THE CROSS OBJECTION, GROUND 1 IS NOT PRESSED . THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 15. INSOFAR AS GROUNDS 2, 3 AND 4 ARE CONCERNED, TH E LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRIVATE TERRACE WOULD NOT FORM PART OF THE BUILT-UP AREA OF THE FLA TS AND SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF THE ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 13 : JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. M/S . MAHALAKSHMI HOUSING DATED 02-11-2012 IN TAX CASE (A PPEALS) NOS. 583 & 584 OF 2011 AND 316 & 317 OF 2012, WHERE IN THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT OPE N TERRACE CANNOT BE PART OF THE BUILT-UP AREA. THEREFORE, TH E ASSESSEE WAS HELD TO BE ENTITLED TO THE DEDUCTION U/S 80-IB( 10) OF THE ACT. 16. THE LEARNED DR ON THE OTHER HAND HAS FAIRLY CON CEDED THAT THE ISSUE IS COVERED BY THE AFOREMENTIONED DEC ISION OF THE HONBLE JURISDICTIONAL HIGH COURT. 17. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT V. MAHALAKSHMI HOUSING (SUPRA), WE DIRECT THE ASSES SING OFFICER TO FOLLOW THE SAID DECISION AND DECIDE THE ISSUE ACCORDINGLY. 18. IN THE RESULT, THE CROSS OBJECTIONS FILED BY TH E ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 19. ITA NOS. 2178 & 2179/MDSS/2012: GROUND NO.1 RAISED BY THE REVENUE IS GENERAL IN NATURE AND REQUIRES NO ADJUDICATION. ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 14 : 20. GROUND NOS. 2.1 TO 2.4 RELATE TO THE CLAIM OF D EDUCTION UNDER SECTION 80-IB(1) OF THE ACT. FOR THE REASONS GIVEN BY US WHILE DEALING WITH ITA NOS. 2176 & 2177/MDS/2012 (S UPRA), THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED AND THE APPEALS OF THE REVENUE STAND DISMISSED. 21. GROUND NO. 2.5 IS REGARDING PROPORTIONATE DEDUC TION FOR FLATS HAVING MAXIMUM AREA OF 1500 SQ.FT. WE HAVE D EALT WITH THIS ISSUE IN THE PRECEDING PARAGRAPHS WHILE DEALIN G WITH THE APPEALS IN ITA NOS. 2176 & 2177/MDS/2012. FOR THE REASONS STATED THEREIN, THIS GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 22. SO FAR AS GROUND NO. 2.6 IS CONCERNED, IT RELAT ES TO THE COMMERCIAL AREA OF THE PROJECT. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS OBSERVED THAT THE COMMERCIAL AREA EXCEEDING 2000 SQ.FT. IN THE PROJECT IS NOT ELIGIBL E FOR CLAIMING DEDUCTION U/S 80-IB(10) OF THE ACT. THE CIT(APPEALS ) IN HIS ORDER HAS OBSERVED THAT SIMILAR ISSUE CAME UP BEFOR E THE ASSESSING OFFICER IN THE ASSESSEES OWN CASE FOR TH E ASSESSMENT YEAR 2005-06, WHERE THE ASSESSING OFFICE R HAS OBSERVED THAT COMMERCIAL AREA IN THE PROJECT EXCEED ED THE THRESHOLD LIMIT OF 2000 SQ.FT. AND HENCE NOT ELIGIB LE FOR ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 15 : DEDUCTION U/S 80-IB(10) OF THE ACT. THE TRIBUNAL V IDE ITS ORDER IN ITA NOS. 259 TO 263/MDS/2010 DATED 17-06-2 011 SET ASIDE THE ISSUE OF MEASURING THE AREA OF THE COMMER CIAL AREA AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW (AS HEL D AT PARA 33 OF THE SAID ORDER), WHICH IS AS UNDER : 33. IN THE ASSESSMENT YEAR 2006-07, THERE IS ONE MORE ISSUE WHICH PERTAINS TO THE AREA OF COMMERCIAL PART CONSTRUCTED BY THE ASSESSEE. ON PERUSAL OF THE ORD ER OF THE CIT(A), IT APPEARS THAT THE ASSESSEE IS NOT AGREEIN G WITH THE MANNER IN WHICH THE DEPARTMENT HAS COMPUTED THE ARE A. THEREFORE, THE MATTER IS RESTORED TO THE FILE OF TH E ASSESSING OFFICER FOR THE LIMITED PURPOSE OF MEASURING THE CO MMERCIAL AREA AND DECIDE ABOUT THE DEDUCTION IN ACCORDANCE WITH LAW. THE CIT(APPEALS) HELD THAT SINCE IT IS THE SAME PRO JECT (WITH THE SAME COMMERCIAL AREA)WHICH IS CONTINUING IN THE CURRENT ASSESSMENT YEARS 2007-08 AND 2008-09 ALSO, THE ASSE SSING OFFICER WAS REQUIRED TO ADOPT THE SAME MEASUREMENTS OF THE COMMERCIAL AREA (I.E. MEASURED AS PER THE DIRECTION S OF THE TRIBUNAL) FOR THE PURPOSE OF DECIDING THE COMMERCI AL AREA FOR THE PURPOSE OF ALLOWING OR DISALLOWING THE DEDUCTIO N U/S 80- IB(10) OF THE ACT, IN THE PRESENT ASSESSMENT YEARS 2 007-08 AND 2008-09 AS WELL AS CONTAINED IN THE DIRECTIONS OF THE TRIBUNAL IN THE ABOVE ORDER. 23. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS DIRECTED BY THE CIT(APPE ALS) THE ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 16 : ASSESSING OFFICER MAY VERIFY THE SAME AND DECIDE AC CORDINGLY AS DIRECTED BY THE CIT(APPEALS). HOWEVER, HE SUBMI TTED THAT COMMERCIAL AREA IS NOT EXCEEDING 2000 S.FT. ON THE OTHER HAND, THE LEARNED DR HAD NO OBJECTION IF THE MATTER IS BEING SENT BACK FOR VERIFICATION AS DIRECTED BY THE CIT(A PPEALS). 24. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WHEN THE SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL FOR THE A SSESSMENT YEAR 2006-07 THE TRIBUNAL DIRECTED THE ASSESSING OF FICER TO MEASURE THE COMMERCIAL AREA AND DECIDE THE MATTER I N ACCORDANCE WITH LAW. THE LEARNED COUNSEL FOR THE A SSESSEE HIMSELF HAS SUBMITTED THAT THE COMMERCIAL AREA IS N OT EXCEEDING 2000 SQ.FT. HOWEVER, HE SUBMITTED THAT T HE SAME MAY BE EXAMINED BY THE ASSESSING OFFICER. THE LEAR NED DR HAS ALSO NO OBJECTION IN THIS REGARD. WE, THEREFOR E, DIRECT THE ASSESSING OFFICER TO MEASURE THE COMMERCIAL AREA AN D CALCULATE THE DEDUCTION AS PER LAW. ACCORDINGLY, T HIS GROUND OF APPEAL RAISED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 25. IN RESPECT OF THE GROUNDS RELATING TO THE COMPL ETION CERTIFICATE, THE ISSUE HAS BEEN DECIDED BY THE HON BLE ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 17 : JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. M/ S. SANGHVI AND DOSHI ENTERPRISES VIDE ORDER DATED 01-11-2012 ( SUPRA) AND THE ORDER OF THE TRIBUNAL ALLOWING THE CLAIM IN THIS REGARD WAS CONFIRMED. ACCORDINGLY, WE CONFIRM THE ORDER P ASSED BY THE CIT(APPEALS) IN THIS REGARD. 26. IN THE RESULT, BOTH THE APPEALS IN ITA NOS. 217 8 & 2179/MDS/2012 ARE PARTLY ALLOWED FOR STATISTICAL PU RPOSES. 27. C.O. NOS. 23 & 24/MDS/2013: THERE IS A DELAY OF 23 DAYS IN FILING THE CROSS OB JECTIONS BY THE ASSESSEE. ONE OF THE PARTNERS OF THE ASSESS EE, SHRI PRAVIN KUMAR JAIN, HAS FILED AN AFFIDAVIT WHEREIN H E HAS EXPLAINED THAT THE DELAY HAD OCCURRED AS THE PAPERS WERE MISPLACED IN THE OFFICE OF THE CHARTERED ACCOUNTANT OF THE ASSESSEE AND THAT THE DELAY WAS NEITHER WANTON NOR INTENTIONAL. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, WE FIND THAT THIS IS A FIT CASE TO CONDONE THE DELA Y IN FILING THE CROSS OBJECTIONS. ACCORDINGLY WE CONDONE THE DELAY AND ADMIT THE CROSS OBJECTIONS OF THE ASSESSEE. 28. IN THE CROSS OBJECTION, GROUND 1 IS NOT PRESSED . THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 18 : 29. WE HAVE ALREADY DEALT WITH SIMILAR GROUNDS 2, 3 & 4 IN THE CROSS OBJECTIONS FILED BY THE ASSESSEE IN C.O. NOS. 21 & 22/MDS/2013 (SUPRA) AND FOR THE REASONS GIVEN IN TH OSE CROSS OBJECTIONS VIDE PARAGRAPHS 15 TO 17 ABOVE, THE CROS S OBJECTIONS FILED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 30. IN THE RESULT, THE CROSS OBJECTIONS FILED BY TH E ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 31. ITA NOS. 2180 & 2181/MDS/2012: GROUND NO.1 RAISED BY THE REVENUE IS GENERAL IN NAT URE AND REQUIRES NO ADJUDICATION. 32. GROUND NOS. 2.1 TO 2.4 RELATE TO THE CLAIM OF D EDUCTION UNDER SECTION 80-IB(1) OF THE ACT. FOR THE REASONS GIVEN BY US WHILE DEALING WITH ITA NOS. 2176 & 2177/MDS/2012 (S UPRA), THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED AND THE APPEALS OF THE REVENUE STAND DISMISSED. 33. GROUND NO. 2.5 IS REGARDING PROPORTIONATE DEDUC TION FOR FLATS HAVING MAXIMUM AREA OF 1500 SQ.FT. WE HAVE D EALT WITH THIS ISSUE IN THE PRECEDING PARAGRAPHS WHILE DEALIN G WITH THE APPEALS IN ITA NOS. 2176 & 2177/MDS/2012. FOR THE REASONS ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 19 : STATED THEREIN, THIS GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 34. IN RESPECT OF THE GROUNDS RELATING TO COMPLETIO N CERTIFICATE, WE HAVE ALREADY DEALT WITH THIS ISSUE ABOVE AND FOR THE REASONS GIVEN IN PARAGRAPH 23 (SUPRA) WHILE DEA LING WITH ITA NOS. 2178 & 2179/MDS/2012, WE HAVE CONFIRMED TH E ORDER PASSED BY THE CIT(APPEALS). THEREFORE, THESE GROUN DS RAISED BY THE ASSESSEE ARE DISMISSED. 35. IN THE RESULT, THE REVENUES APPEALS IN ITA NOS . 2180 & 2181/MDS/2012 ARE DISMISSED. 36. C.O. NOS. 25 & 26/MDS/2013: THERE IS A DELAY OF 23 DAYS IN FILING THE CROSS OBJ ECTIONS BY THE ASSESSEE. ONE OF THE PARTNERS OF THE ASSESS EE, SHRI PRAVIN KUMAR JAIN, HAS FILED AN AFFIDAVIT WHEREIN H E HAS EXPLAINED THAT THE DELAY HAD OCCURRED AS THE PAPERS WERE MISPLACED IN THE OFFICE OF THE CHARTERED ACCOUNTANT OF THE ASSESSEE AND THAT THE DELAY WAS NEITHER WANTON NOR INTENTIONAL. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, WE FIND THAT THIS IS A FIT CASE TO CONDONE THE DELA Y IN FILING THE CROSS OBJECTIONS. ACCORDINGLY WE CONDONE THE DELAY AND ADMIT THE CROSS OBJECTIONS OF THE ASSESSEE. ITA NOS. 2176- 2181/MDS /2012 & C.O. NOS. 21-26/MDS/2013 : 20 : 37. IN THE CROSS OBJECTION, GROUND 1 IS NOT PRESSED . THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 38. WE HAVE ALREADY DEALT WITH SIMILAR GROUNDS 2, 3 & 4 IN THE CROSS OBJECTIONS FILED BY THE ASSESSEE IN C.O. NOS. 21 & 22/MDS/2013 (SUPRA) AND FOR THE REASONS GIVEN IN TH OSE CROSS OBJECTIONS VIDE PARAGRAPHS 15 TO 17 ABOVE, THE CROS S OBJECTIONS FILED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 39. IN THE RESULT, THE REVENUES APPEALS IN ITA NOS . 2176 & 2177/MDS/2012 ARE DISMISSED, IN ITA NOS. 2178 & 2179/MDS/2012 ARE PARTLY ALLOWED FOR STATISTICAL PU RPOSES AND IN ITA NOS. 2180 & 2181/MDS/2012 ARE DISMISSED. THE CROSS OBJECTIONS FILED BY THE ASSESSEES IN C.O. NOS. 21 TO 26/MDS/2013 ARE PARTLY ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED ON TUESDAY, THE 26 TH OF FEBRUARY, 2013, AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) (V.DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 26 TH FEBRUARY, 2013. H. COPY TO: ASSESSEES/AO/CIT(A)/CIT/D.R./GUARD FILE