LAIQ AHMED R SAHIKH, MUMBAI V. ITO 20(1)-4, MUMBAI

CO 51/MUM/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6458 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 17-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MRS USHA NAIR
• Keywords: Revised return
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER & SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO. : 5041/MUM/2009 ASSESSMENT YEAR : 2005-06 INCOME TAX OFFICER 20(1) - 4, R.NO. 608, 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400 012 VS. SHRI LAIQ AHMED SHAIKH 103/BILQUIS APARTMENT (I), MAHAKALI ROAD, ANDHERI (E), MUMBAI 400 099 PAN NO: AALPS 7464 F (APPELLANT) (RESPONDENT) CO NO. : 51/MUM/2010 (ARISING OUT OF ITA NO: 5041/MUM/2009) ASSESSMENT YEAR : 2005-06 SHRI LAIQ AHMED SHAIKH 103/BILQUIS APARTMENT (I), MAHAKALI ROAD, ANDHERI (E), MUMBAI 400 099 PAN NO: AALPS 7464 F VS. INCOME TAX OFFICER 20(1) - 4, R.NO. 608, 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400 012 (APPELLANT) (RESPONDEN T) & ITA NO. : 5042/MUM/2009 ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER 20(1) - 4, R.NO. 608, 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400 012 VS. SHRI LAIQ AHMED SHAIKH 103/BILQUIS APARTMENT (I), MAHAKALI ROAD, ANDHERI (E), MUMBAI 400 099 PAN NO: AALPS 7464 F (APPELLANT) (RESPONDENT) ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 2 APPELLANT BY : MRS. USHA NAIR RESPONDENT BY : SHRI BHUPENDRA SHAH DATE OF HEARING : 02.09.2011 DATE OF PRONOUNCEMENT : 09 . 09.2011 ORDER PER N. V. VASUDEVAN (JM) : ITA NO. 5041/MUM/2009 IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 24.06.2009 OF CIT(A)-XX, MUMBAI RELATIN G TO THE ASSESSMENT YEAR 2005-06. THE GROUNDS OF APPEAL RAISED BY THE R EVENUE READS AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LA W IN THE CIRCUMSTANCES OF THE CASE IN DIRECTING TO ALLOW THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE I.T. ACT, TO THE EXTE NT OF `. 5,23,74,637/- FOR A.Y. 2005-06. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW AN D IN THE CIRCUMSTANCES OF THE CASE IN DIRECTING THE AO T O ALLOW DEDUCTION U/S.80IB(10) PROPORTIONATELY OF THE INCOM E ACCRUED IN THE RATIO OF HOUSING UNIT BELOW 1000 SQ. FT. TO THE TOTAL HOUSING UNIT. 2. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE PROVISION OF CLAUSE (C) OF SECTION 80IB(10) WHICH STIPULATES THAT IN ORDER TO BE ELIGIBLE FOR DEDUCTION. ONE OF THE CONDITIONS TO BE FULFILLED BY THE ASSESSEE IS THAT THE RESIDENTIAL UNIT HAS A MAX IMUM AREA OF 1000 SQ. FT. AND ANY VIOLATION WILL DISQUALIFY THE ASSESSEE FROM CLAIMING SUCH DEDUCTION. IT IS WELL ESTABLISHED IN LAW THAT WHEN THE PROVISION OF STATUTE IS CLEAR UNAMBIGUOUS AND D OES NOT CONVEY MORE THAN ONE MEANING, THEN THE SAME CANNOT BE INTERPRETED IN SUCH A WAY TO GIVE IT DIFFERENT COLO UR OR MEANING. ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 3 3. THE LEARNED CIT(A) ERRED IN LAW IN HOLDING TO AL LOW THE DEDUCTION OF SEC. 80IB COULD BE MADE IN RESPECT OF THE TWO FLATS WERE CLUBBED IN EACH FLOOR HAVING BUILT UP ARE OF 1 330 SQ. FT. WITH A SINGLE ENTRANCE AND ELECTRICITY METER. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A PPEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO B E RESTORED. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR TO SUBMIT ADDITIONAL NEW GROUND WHICH MAY BE NECESS ARY. 2. THE ASSESSEE HAS FILED CO NO. 51/MUM/2010 AGAINS T THE ORDER OF THE LD. CIT(A). THE GROUNDS RAISED BY THE ASSESSEE IN I TS CROSS OBJECTION READS AS UNDER :- 1. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISSIONER OF INCOME TAX (A) HAS ERRED IN DIS ALLOWING CLAIM OF SECTION U/S.80IB(10) TO THE EXTENT OF `. .58,37,426/- IN RESPECT OF 5 FLATS HAVING AREA OF EXCEEDING 1000 SQ . FT. ONLY AFTER CONSIDERING AREA OF BALCONY, WHICH AGAINST THE ORDE R OF THE MUMBAI ITAT IN THE SHETH DEVELOPERS PVT. LTD. 2. THE APPELLANT ALSO PRAYS THAT THE CROSS OBJECTIO N OF THE CROSS OBJECTOR MAY BE ALLOWED TO BE AMENDED / ALTER ED OR ADDED ON ANY OF THE CROSS OBJECTION RAISED, AS MAY BE NEC ESSARY. 3. THE RELIEF MAY BE GRANTED AS ABOVE. 3. THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE OWNE D PROPERTY ADMEASURING 4285.85 SQ. YDS IN VILLAGE KONDIVITA, T ALUKA ANDHERI, MUMBAI. THE ASSESSEE ENTERED INTO A JOINT VENTURE AGREEMENT DATED 16.04.2002 WITH M/S. VAMAN ESTATE TO JOINTLY DEVELOP THE PROPERTY O WNED BY THE ASSESSEE. AFTER OBTAINING THE REQUIRED PLANNING PERMISSION FR OM THE BMC, THE PROPERTY WAS DEVELOPED BY CONSTRUCTING 97 FLATS AS PER THE FOLLOWING DETAILS:- ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 4 WING TOTAL NO. OF FLATS AREA LESS THAN 1000 SQ. FT. INCLUDING BALCONY AREA MORE THAN 1000 SQ. FT. INCLUDING BALCONY AS PER AMENDED ACT W.E.F. 1-4-2005 A 33 33 NIL B 29 29 NIL C 15 10 5 D 20 20 NIL 4. AS IT CAN BE SEEN FROM THE ABOVE CHART FIVE FLAT S IN C WING WERE MORE THAN 1000 SQ. FT. AREA INCLUDING BALCONY. BUT EXCLU DING THE AREA OF BALCONY THESE FLATS MEASURED ONLY 965 SQ. FT. AND AFTER INC LUDING THE AREA OF BALCONY OF 128 SQ. FT THE FIVE FLATS WERE CONSIDERED AS HAV ING A BUILT UP AREA EXCEEDING 1000 SQ. FT. 5. FOR THE ASSESSMENT YEAR 2005-06, THE ASSESSEE FI LED A RETURN OF INCOME ON 31.10.2005, IN WHICH THE ASSESSEE CLAIMED DEDUCTION U/S.80IB(1)) OF THE ACT OF ` .5,23,74,637/- WHICH WAS THE ASSESSEES SHARE IN THE PROFITS OF THE JOINT DEVELOPMENT OF THE PROPERT Y OWNED BY THE ASSESSEE AND DEVELOPED IN JOINT VENTURE WITH M/S. VAMAN ESTA TE. 6. THERE WAS A SURVEY U/S.133 A OF THE ACT ON 23.02 .2006 IN THE CASE OF ASSESSEE. THE SURVEY TOOK PLACE AT THE CONSTRUCTION SITE OF THE TRANS APARTMENT WHICH WAS THE NAME OF THE PROJECT BUILT BY THE ASSESSEEE IN JOINT VENTURE WITH M/S. VAMAN ESTATE. IN THE COURSE OF SU RVEY, THE STATEMENT OF THE ASSESSEE WAS RECORDED. IN THE COURSE OF SURVEY, THE ASSESSEE WAS ASKED ABOUT THE FIVE FLATS BUILT UP IN C WING WHICH HAD T HE BUILT UP AREA OF MORE THAN 1000 SQ. FT. THE FIVE FLATS IN C WING WERE THE FOLLOWING :- FLAT NOS. 102, 202, 302, 402 & 502 6.1. WHEN THE ASSESSEE WAS ASKED IN THE STATEMENT A BOUT THE FLAT NO.102, THE ASSESSEE SUBMITTED THAT THE BUILT UP AREA OF TH E SAID FLAT IS LESS THAN ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 5 1000 SQ. FT. THE SAID FLAT HAD BEEN SOLD TO DR. RAM ANI JAIRAM AND IN HIS STATEMENT RECORDED BY THE AO U/S.131 OF THE ACT, DR .RAMANI JAIRAM HAD CONFIRMED THAT THE BUILT UP AREA OF THE FLAT WAS 13 30 SQ. FT. WHEN THE STATEMENT OF DR.RAMANI JAIRAM WAS CONFRONTED TO THE ASSESSEE, HE SUBMITTED THAT HE WOULD WITHDRAW THE CLAIM FOR DEDU CTION U/S.80IB (10) OF THE ACT, AS THE ASSESSEE DOES NOT SATISFY THE CONDI TIONS FOR GETTING THE DEDUCTION U/S.80IB OF THE ACT. 7. THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 28.02.2006 WITHDRAWING THE CLAIM FOR DEDUCTION MADE UNDER SEC. 80IB(10) OF THE ACT. 8. ON 12.04.2006, THE ASSESSEE FILED A RE-REVISED R ETURN OF INCOME. IN THE LETTER ANNEXED IN THE RE-REVISED RETURN OF INCOME, THE ASSESSEE SUBMITTED THAT DUE TO THIS MEDICAL CONDITION AND STATE OF MIN D, HE HAD MADE SURRENDER OF THE CLAIM OF DEDUCTION U/S.80IB(10) AN D THAT HE HAS BEEN NOW ADVISED THAT HIS CLAIM FOR DEDUCTION U/S.80IB(10) W AS LEGALLY CORRECT. THE ASSESSEE ACCORDINGLY REQUESTED THE AO TO CONSIDER T HE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80IB(10) OF THE ACT. ALONG WITH THE RETURN OF INCOME, THE ASSESSEE ALSO FILED THE CERTIFICATE OF ARCHITECT CE RTIFYING THAT FIVE FLATS IN THE C WING WHICH WERE ALLEGED BY THE AO TO BE IN EXCESS OF 1000 SQ. FT. OF BUILT UP AREA WAS INFACT HAVING A BUILT UP AREA OF ONLY 9 65 SQ. FT. 9. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO AFTER MAKING THE REFERENCE TO THE STATEMENT RECORDED AT THE TIME OF SURVEY AND THE FILING OF THE REVISED RETURN OF INCOME AND THE RE-REVISED RET URN OF THE INCOME OBSERVED THAT REFERENCE TO DISTRICT VALUATION OFFIC ER (DVO) WAS REQUIRED TO VERIFY THE CORRECTNESS OF THE AREA OF FLATS. THE DV O VIDE HIS REPORT SENT ALONG WITH THE LETTER DATED 04.10.2007 SUBMITTED THAT FLA T NOS. 101 AND 302 IN C WING OF THE BUILDING TRANS APARTMENT HAD A BUILT UP AREA OF 957 SQ. FT. ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 6 (APPROXIMATE) AND THE AREA OF BALCONY WAS 128 SQ. F T. (APPROXIMATE). ACCORDING TO THE AO SINCE THE BUILT UP AREA OF THE FLAT INCLUDING THE BALCONY WAS MORE THAN 1000 SQ. FT, THE ENTIRE CLAIM FOR DED UCTION U/S. 80IB OF THE ACT CANNOT BE ALLOWED. 10. THE ASSESSEE SUBMITTED BEFORE THE AO THAT THERE WAS NO SPECIFIC DEFINITION IN SEC.80IB (10) OF THE TERM BUILT UP A REA. BY AN AMENDMENT VIDE FINANCE ACT, 2004 CLAUSE (A) TO SUB-SECTION (1 4) OF 80 IB WAS INTRODUCED, WHICH DEFINED BUILT UP AREA. AS PER THE SAID DEFINITION, BUILT UP AREA MEANS THE INNER MEASUREMENT OF THE RESIDENT IAL UNIT AT THE FLOOR LEVEL, INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREASED BY THE THICKNESS OF THE WALLS BUT DOES NOT INCLUDE THE COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNITS. THE ASSESSEE POINTED OUT THAT TH IS DEFINITION OF BUILT UP AREA IS RELEVANT ONLY TO THE ASSESSMENT YEAR 2005-0 6 AND PROJECTS WHICH ARE APPROVED THEREAFTER. THE ASSESSEE POINTED OUT T HAT IT HAD COMPLETED THE PROJECT AND FULL OCCUPATION CERTIFICATE WAS ISSUED BY THE MUNICIPAL CORPORATION OF GREATER MUMBAI AS EARLY AS 27.12.200 4. THE ASSESSEE SUBMITTED THAT AS PER THE LAW WHEN THE DEVELOPMENT WAS COMMENCED BY THE ASSESSEE, ALL THE CONDITIONS WERE FULFILLED FOR ALL OWING THE DEDUCTION U/S.80IB(10) OF THE ACT AND, THEREFORE, THE DEDUCTI ON CLAIMED BY THE ASSESSEE SHOULD BE ALLOWED. 10.1 WITHOUT PREJUDICE THE ABOVE SUBMISSION, THE AS SESSEE ALSO SUBMITTED THAT IN ANY EVENT THE ASESSEE SHOULD BE ENTITLED TO PROPORTIONATE DEDUCTION U/S.80IB OF THE ACT TO THE EXTENT OF THE FLATS WHIC H WERE ADMITTEDLY LESS THAN 1000 SQ. FT. OF BUILT UP AREA. IN OTHER WORDS, THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE OF DEDUCTION U/S.80IB(10) SHOULD BE RE STRICTED TO THE FIVE FLATS IN C WING WHICH IS DISPUTED BY THE REVENUE TO BE OF AN AREA OF LESS THAN 1000 SQ. FT AND THE PROFITS FROM THOSE FIVE FLATS A LONE SHOULD BE DENIED ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 7 DEDUCTION U/S.80IB(10) OF THE ACT. IN THIS REGARD, THE ASSESSEE RELIED ON THE DECISION OF THE HON'BLE HIGH COURT OF CALCUTTA BENC H OF THE ITAT IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VS. DCIT CIR-10, KOLKATA IN ITA NO: 1595/KOL/2005 FOR THE ASSESSMENT YEAR 2002-03 A ND ITA NO: 1735/KOL/2005 FOR THE ASSESSMENT YEAR 2002-03. THE ASSESSING OFFICER HOWEVER WAS OF THE VIEW THAT OUT OF THE 97 FLATS CO NSTRUCTED BY THE ASSESSEE, FIVE FLATS IN C WING WERE MORE THAN 1000 SQ. FT. IN CLUDING THE AREA OF BALCONY. SINCE THERE WAS A VIOLATION OF ONE OF THE CONDITIONS FOR SEC. 80IB(10) OF THE ACT, THE AO HELD THAT THE WHOLE DED UCTION CLAIMED BY THE ASSESSEE CANNOT BE ALLOWED. 11. BEFORE THE LD. CIT(A), THE ASSESSEE POINTED OUT THAT THE BUILDING PLAN FOR ITS PROJECT TRANS APARTMENT WAS APPROVED BY T HE MCGM ON 12.03.2003 AND AS PER THE LAW AS IT PREVAILED AT THAT POINT OF TIME THE BMC ACT HAD LAID DOWN THAT AREA OF BALCONY ARE NOT TO BE COUNTED AS BUILT UP AREA. THE ASSESSEE POINTED OUT THAT THE DEFINITION OF BUILT U P AREA IN SECTION 80IB(10) WAS INTRODUCED W.E.F 01.04.2005 AND WOULD APPLY ONL Y PROSPECTIVELY. THE ASSESSEE POINTED OUT THAT SINCE IT HAD COMPLETED TH E PROJECT AS EARLY AS 27.12.2004, THE AMENDED DEFINITION OF BUILT UP AREA IN SEC. 80IB(10) WOULD NOT BE APPLICABLE EVEN IN RESPECT OF ASSESSMENT YEA RS 2005-06 AND 2006- 07. THE ASSESSEE AGAIN REITERATED ITS ALTERNATE CLA IM FOR ALLOWING THE PROPORTIONATE DEDUCTION BY RELYING ON THE DECISION OF THE ITAT CALCUTTA BENCH IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPM ENT LTD. (SUPRA), WHEREIN THE HON'BLE KOLKATA BENCH OF ITAT HAS OBSER VED AS FOLLOWS : IT IS APPARENT FROM THE PERUSAL OF SECTION 80IB(10 ) THAT HIS SECTION HAS BEEN ENACTED WITH A VIEW TO PROVE INCEN TIVE FOR BUSINESSMEN TO UNDERTAKE CONSTRUCTION OF RESIDENTIA L ACCOMMODATION FOR SMALLER RESIDENTIAL UNITS AND THE DEDUCTION IS INTENDED TO BE RESTRICTED TO THE PROFITS DERIVED FR OM THE CONSTRUCTION OF SMALLER UNITS AND NOT FROM LARGER R ESIDENTIAL UNITS. ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 8 THOUGH THE AO HAS DENIED THE CLAIM OF THE ASSESSEE OBSERVING THAT LARGER UNITS WERE ALSO CONSTRUCTED BY THE ASSE SSEE, AT THE SAME TIME IT IS ALSO A FACT ON RECORDS THAT THE ASS ESSEE HAD CLAIMED DEDUCTION ONLY ON ACCOUNT OF SMALLER RESIDE NTIAL UNITS WHICH WERE FULFILLING ALL THE CONDITIONS AS CONTAIN ED IN SECTION 80IB(10) AND THE SAME HAS NOT BEEN DISPUTED BY THE AO ALSO. WE HAVE ALSO NOTED DOWN THE FACT THAT EVEN THE PROVISI ON AS LAID DOWN IN SECTION 80IB(10) DOES NOT SPEAK REGARDING S UCH DENIAL OF DEDUCTION IN CASE OF PROFITS FROM A HOUSING COMPLEX CONTAINING BOTH THE SMALLER AND LARGE RESIDENTIAL UNITS AND SI NCE THE ASSESSEE HAS ONLY CLAIMED DEDUCTION ON ACCOUNT OF S MALLER QUALIFYING UNITS BY FULFILLING ALL THE CONDITIONS A S LAID DOWN UNDER SECTION 80IB(10) WHILE COMING TO SUCH CONCLUSION, W E ALSO FIND SUPPORT FROM THE ORDER OF THE HON'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD. (SUPRA) WHEREIN IT WAS HELD THA T THE PROVISIONS SHOULD BE INTERPRETED LIBERALLY AND SINC E IN THE PRESENT CASE ALSO THE ASSESSEE BY CLAIMING PRO RATA INCOME ON QUALIFYING UNITS HAS COMLIED WITH ALL THE PROVISIONS AS CONTAI NED IN THE SAID SECTION, IN OUR CONSIDERED OPINION SUCH CLAIM OF TH E ASSESSEE WAS RIGHTLY ALLOWED BY THE LD. CIT(A) BY REVERSING THE ORDER OF THE AO. 12. FURTHER REFERENCE WAS ALSO MADE TO THE DECISION OF THE ITAT, MUMBAI BENCH IN THE CASE OF SAROJ SALES CORPORATION VS. IT O 115 TTJ 485 (MUM) AND ITAT NAGPUR BENCH IN THE CASE OF ITO VS. AIR DE VELOPERS IN ITA NO.447/NAGPUR/2007 DATED 23.05.2008, WHEREIN THE RA TIO LAID DOWN BY THE KOLKATA BENCH IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD.(SUPRA) WAS FOLLOWED. IT WAS ALSO POINTED OUT T HAT THE HON'BLE CALCUTTA HIGH COURT VIDE ORDER DATED 05.01.2007 HAS DISMISSE D THE APPEAL OF THE REVENUE AGAINST THE DECISION OF THE TRIBUNAL IN BEN GAL AMBUJA HOUSING DEVELOPMENT LTD.(SUPRA) 13. THE LD. CIT(A) ON CONSIDERATION THE ABOVE SUBMI SSION HELD AS FOLLOWS:- I HAVE CAREFULLY CONSIDERED ALL THE SUBMISSIONS AN D ARGUMENTS OF THE AR AND THE FACTS DISCUSSED IN THE ASSESSMENT ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 9 ORDER FOR DECIDING THIS GROUND OF APPEAL. I HAVE AL SO GONE THROUGH THE CASE RECORDS, SURVEY FOLDERS AND THE OTHER MATE RIAL AVAILABLE WITH THE AO, GATHERED AS A RESULT OF THE SURVEY. AF TER CONSIDERING THE SAME, I FIND MYSELF UNABLE TO AGREE WITH THE CO NTENTION / OPINION OF THE AR THAT THE DEFINITION OF BUILT UP AREA INSERTED VIDE FINANCE ACT NO.2 OF 2004 W.E.F. 01.04.2005 IS NOT ATTRACTED IN THE CASE OF THE APPELLANT. IT IS TRUE THAT THERE WAS NO DEFINITION OF BUILT UP AREA IN THE I.T. ACT PRIOR TO ITS INS ERTION AS NOTED ABOVE. HOWEVER, THE MANNER IN WHICH IT IS AMENDED M AKES IT EVIDENT THAT THE AMENDMENT IS CLARRIFICATORY AND AC CORDINGLY RETROSPECTIVE IN NATURE. THE SUBSTANTIVE PROVISIONS OF CLAUSE (C) OF SUB-SECTION (10) TO SECTION 80IB IS NOT CHANGED OR AMENDED BUT ONLY, THE MEANING OF WORDS OR PHRASE BUILT UP AREA IS DEFINED OR CLARIFIED BY WAY OF ABOVE MENTIONED AMENDMENT. EVEN, OTHERWISE SINCE THE AMENDMENT IS EFFECTIVE FR OM 01.04.2005, I.E. FROM THE A.Y. 2005-06, IT IS SQUAR ELY APPLICABLE IN THE CASE OF THE APPELLANT. THEREFORE, THE ARGUME NTS OF THE AR THAT THE AMENDMENT IS NOT APPLICABLE IN THE CASE OF THE APPELLANT IS NOT CORRECT. HOWEVER, STILL THE ISSUE IS NOT FUL LY SETTLED. THE NEXT RELEVANT QUESTION, UNDER THE GIVEN FACTS AND CIRCUM STANCES OF THE CASE IN HAND WOULD BE; WHETHER THE EXISTENCE OF CER TAIN RESIDENTIAL UNITS HAVING BUILT UP AREA OF 1000 SQ . FT. EACH, SHALL MAKE THE APPELLANT ENTIRELY INELIGIBLE FROM HIS CLA IM OF DEDUCTION U/S.80IB(10) OUT RIGHTLY OR HE IS ELIGIBLE FOR PROP ORTIONATE DEDUCTION, AS SUBMITTED VIDE ALTERNATIVE SUBMISSION S MADE ON WITHOUT PREJUDICE BASIS, AS MENTIONED ABOVE. IN THI S REGARD, AFTER GOING THROUGH THE VARIOUS ORDERS RELIED ON BY THE A R. I FIND MYSELF FULLY INCLINED TO THE ALTERNATIVE SUBMISSION S OF THE AR AS DISCUSSED ABOVE. IT IS PERTINENT TO NOTE THAT ALL T HE MATERIAL FACTS ARE FOUND TO BE IDENTICAL IN THE INSTANCE CASE TO T HE FACTS AS REPORTED IN THE CASES RELIED UPON BY THE AR CITED A BOVE. THEREFORE, I FIND THAT THE APPELLANT IS ELIGIBLE FO R PROPORTIONATE DEDUCTION UNDER SUCH FACTS AND CIRCUMSTANCES. IT IS ALSO IMPORTANT TO NOTE THAT THE DECISION OF HON'BLE ITAT , CALCUTTA IS DULY AFFIRMED BY THE HON'BLE CALCUTTA HIGH COURT, A S DISCUSSED ABOVE. THEREFORE, IN VIEW OF THE AFORESAID DISCUSSION, I D IRECT THE AO TO ALLOW PROPORTIONATE DEDUCTION U/S.80IB(10) OF THE ACT, IN RESPECT OF THE INCOME ACCRUED ON RESIDENTIAL UNITS WHICH ARE OF THE BUILT UP AREA OF 1000 SQ. FT. OR LESS AND DIS ALLOW DEDUCTION U/S.80IB(10) OF THE ACT. ON INCOME ACCURED ON THE R ESIDENTIAL ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 10 UNITS HAVING BUILT UP AREA OF MORE THAN 1000 SQ. FT. EACH. SUBJECT TO THE ABOVE REMARKS, THIS GROUND OF APPEAL IS THEREFORE, PARTLY ALLOWED. 14. PURSUANT TO THE ORDER OF THE LD. CIT(A), THE AO HAS PASSED THE ORDER GIVING EFFECT TO THE ORDER OF THE LD. CIT(A), WHERE IN HE HAS ALLOWED PROPORTIONATE DEDUCTION IN SEC.80IB (10) OF THE ACT . IN OTHER WORDS, IN THE ORDER GIVING EFFECT, THE AO HAS ACCEPTED THAT ONLY FIVE FLATS IN C WING HAS A BUILT UP AREA OF MORE THAN 1000 SQ. FT. WE MAY ALSO CLARIFY THAT EVEN THE DVO IN HIS REPORT HAS ACCEPTED THAT IF THE BALCONY AREA IS EXCLUDED THEN THE FIVE FLATS IN C WING WILL ALSO HAVE BUILT UP AREA O F LESS THAN 1000 SQ. FT. 15. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) IN ALL OWING RELIEF TO THE ASSESSEE IN RESPECT OF PROPORTIONATE PROFITS OF THE FLATS WHOSE BUILT UP AREA IS LESS THAN 1000 SQ. FT., THE REVENUE HAS PREFERRE D THE AFORESAID APPEAL BEFORE THE TRIBUNAL. 16. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) IN NOT ALLOWING THE DEDUCTION ON THE FIVE FLATS WHICH HAS A BUILT UP AREA OF 1000 SQ. FT. INCLUDING THE BALCONY AREA, THE ASSESSEE HAS PREFERRED THE CROSS OBJECTION. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. DR RELIED ON THE ORDER OF THE AO AND FURTHER BROUGHT TO OUR NOTICE THAT IN THE CASE OF M/S. VAMAN ESTATE, WHO HAPPENS TO BE THE JOINT VENTURE PARTNER IN THE PROJECT TRANS APARTMENT ALONG WITH THE ASSESSEE, THE TRIBUNAL CO NSIDERED IDENTICAL ISSUE IN ITA NO.3017/MUM/2008, 4990/MUM/2008 AND 3445/MUM /2009 FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07 RESPECTIV ELY. THE TRIBUNAL IN THE AFORESAID THE DECISION CONSIDERED THE ISSUE AND WAS PLEASED TO UPHOLD THE ORDER OF THE LD. CIT(A) ALLOWING THE PROPORTION ATE DEDUCTION TO THE EXTENT THE PROFITS ON SALE OF FLATS HAVING AREA OF LESS THAN 1000 SQ.FT. AS FAR ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 11 AS THE PROFITS ON SALE OF FLATS IN WHICH THE BUILT UP AREA OF FLATS WAS MORE THAN 1000 SQ. FT. AFTER INCLUDING THE AREA OF BALCO NY, THE TRIBUNAL SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECTED THE LD. CI T(A) TO MEASURE THE AREA OF FLAT AFTER EXCLUDING THE BALCONY BUT INCLUDING THE THICKNESS OF WALL AND IF ON SUCH MEASUREMENT THE AREA OF FLAT IS LESS THAN 1000 SQ. FT., THE TRIBUNAL HELD THAT THE ASSESSEE WOULD BE ENTITLED FOR DEDUCT ION EVEN IN RESPECT OF THOSE FLATS. THE FLATS REFERRED TO IN THE ORDER OF THE TRIBUNAL ARE THE SAME FIVE FLATS IN C WING WHICH IS IN DISPUTE IN THE PRE SENT APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE. THE TRIBUN AL REMANDED THE MATTER TO THE AO FOR VERIFICATION OF BUILT UP AREA OF THE FIVE FLATS, IN THE LIGHT OF THE DIRECTIONS GIVEN BY IT AS ABOVE. 18. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFO RE US THAT EVEN THE DVO IN HIS REPORT FILED BEFORE THE AO HAS ACCEPTED THAT THE BUILT UP AREA OF FIVE FLATS IN C WINGS IS LESS THAN 1000 SQ. FT. AND , THEREFORE, THE ISSUE NEED NOT BE SENT BACK TO THE AO, BUT IT SHOULD BE HELD T HAT THE ASSESSEE WOULD BE ENTITLED TO DEDUCTION U/S.80IB(10) OF THE ACT, EVEN ON PROFITS OF THE FIVE FLATS OF C WINGS. THE LD. DR HOWEVER OPPOSED THE PRAYER A ND REITERATED THE STAND OF THE REVENUE AS REFLECTED IN THE ORDER OF THE AO. 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS FA R AS THE APPEAL OF THE REVENUE IS CONCERNED, THE TRIBUNAL IN PARA 12 OF IT S ORDER IN THE CASE OF M/S. VAMAN ESTATE HAS DISMISSED THE REVENUES APPEA L ON SIMILAR GROUND. THE ASSESSEES CO WAS ALLOWED FOR STATISTICAL PURPO SE AND REMANDED TO THE AO FOR EXAMINING THE AREA OF FIVE FLATS IN C WING. IN THE CASE OF THE ASSESSEE HOWEVER WE FIND THAT THERE IS NO DISPUTE THAT IF TH E AREA OF BALCONY IS EXCLUDED, THE FLATS WILL BE OF LESS THAN 1000 SQ. F T. AREA. THE TRIBUNAL IN THE CASE OF M/S. VAMAN ESTATE HAS ALREADY HELD THAT THE AREA OF BALCONY SHOULD NOT BE INCLUDED. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 12 ASSESSEE WOULD BE ENTITLED TO CLAIM DEDUCTION ON TH E PROFITS OF THE FIVE FLATS IN C WING ALSO. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL REFERRED TO ABOVE, WE DISMISS THE APPEAL BY THE REVENUE AND ALL OW THE CROSS OBJECTION OF THE ASSESSEE. ITA NO. : 5042/MUM/2009 ASSESSMENT YEAR : 2006-07 20. THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER DATED 24.06.2009 OF THE LD. CIT(A) XX, MUMBAI RELATING TO THE ASSESSM ENT YEAR 2006-07. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE IDENTIC AL TO THE GROUNDS RAISED IN THE ASSESSMENT YEAR 2005-06. THE FACTS IN THE AP PEAL FOR THIS ASSESSMENT YEAR ARE IDENTICAL TO THE FACTS AS IT PR EVAILED IN THE ASSESSMENT YEAR 2005-06. THE ONLY DIFFERENCE IS THAT IN THIS Y EAR THERE IS NO DISPUTE WITH REGARD TO THE AREA OF ANY FLAT SOLD DURING THE PREVIOUS YEAR EXCEEDING 1000 SQ. FT. IN OTHER WORDS, THE FIVE FLATS IN C W ING WHICH WERE DISPUTED BY THE REVENUE AS EXCEEDING 1000 SQ. FT. HAD ALREADY B EEN SOLD AND, THEREFORE, THIS DISPUTE DOES NOT SURVIVE IN THIS ASSESSMENT YE AR. THE ONLY DISPUTE IS THAT IF ONE FLAT IN THE PROJECT EXCEEDS 1000 SQ. FT , THE DEDUCTION U/S.80IB (10) SHOULD BE REJECTED FOR THE ENTIRE PROJECT AS S UCH. THIS ISSUE WE HAVE ALREADY SEEN HAS ALREADY BEEN DECIDED IN THE ASSESS MENT YEAR 2005 06 IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE ORDERS OF THE TRIBUNAL REFERRED TO IN THE ASSESSMENT YEAR 2005-06, WE UPHO LD THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. ITA NO. : 5041/MUM/2009 CO NO. : 51/MUM/2010 ITA NO. : 5042/MUM/2009 SHRI LAIQ AHMED SHAIKH 13 21. IN THE RESULT, THE APPEALS OF THE REVENUE ARE D ISMISSED WHILE THE CROSS OBJECTION BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 9 TH DAY OF SEPTEMBER, 2011. SD/ - SD/ - ( R. K. PANDA ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT: 09/09/2011 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, A - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI