Smt Saroj Kapoor, Bhopal V. The ACIT 1 (1), Bhopal

CO 61/IND/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7984 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 31-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Reopening of assessment; Search and seizure; Retrospective amendment; Competent authority
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ABWPK4857E I.T.A.NO. 176 & 177 /IND/201 2 . A.Y. : 2003 - 04 & 2005 - 06 ACIT, SMT. SAROJ KAPOOR, 1(1), BHOPAL VS PROP. KRISHNA HOMES, E-8, ARERA COLONY, BHOPAL APPELLANT RESPONDENT C.O.NOS. 61 & 62/IND/2012 (ARISING OUT OF I.T.A.NO. 176 & 177/IND/2012.) A.Y. : 2003 - 04 & 2005 - 06 SMT. SAROJ KAPOOR, ACIT, PROP. KRISHNA HOMES, E-8, ARERA COLONY, BHOPAL VS 1(1) , BHOPAL CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI R.A.VERMA, SR. DR ASSESSEE BY : SHRI ASHISH GOYAL, ADV. DATE OF HEARING : 28 .0 8 .2012 DATE OF PRONOUNCEMENT : 29 . 10 .201 2 -: 2: - 2 O R D E R PER BENCH THESE ARE THE APPEALS FILED BY THE REVENUE AND CROS S OBJECTIONS BY THE ASSESSEE AGAINST THE ORDER OF CIT (A) FOR THE ASSESSMENT YEARS 2003-04 AND 2005-06. 2. COMMON ISSUE IN BOTH THE REVENUES APPEALS PERTAIN TO DELETION OF DISALLOWANCE OF DEDUCTION CLAIMED U/ S 80IB(10). 3. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE CONSTRUCTION OF RESIDENTIAL HOUSE. PROFIT DERIVED T HEREFROM WAS CLAIMED AS DEDUCTION U/S 80IB. THE RELEVANT HOUSING PROJECT UNDERTAKEN DURING THE YEAR WAS IN THE NAME OF GREEN CITY, ARERA COLONY, BHOPAL. THE PROJECT WAS APPROVED ON 8 .10.1998. AS PER THE ASSESSEE, THE PROJECT WAS COMPLETED ON 3 1.3.2005 AND THE COMPLETION CERTIFICATE OF THE PROJECT WAS O BTAINED ON 30 TH APRIL, 2005. THE ASSESSING OFFICER DECLINED CLAIM FOR DEDUCTION U/S 80IB(10) ON THE PLEA OF BUILT UP AREA MORE THAN 1500 SQ.FT. AND THAT COMPLETION CERTIFICATE FURNISH ED BY THE ASSESSEE WAS NOT GENUINE. THE ASSESSING OFFICER FUR THER NOTED THAT COMMERCIAL AREA OF THE PROJECT WAS MORE THAN 2 000 SQ. FT. -: 3: - 3 AND THAT THE ASSESSEE WAS NOT ACTING AS A BUILDER B UT ONLY AS A CONTRACTOR. 4. BY THE IMPUGNED ORDER, THE CIT(A) ALLOWED ASSESSEE S CLAIM FOR DEDUCTION U/S 80IB AFTER OBSERVING THAT T HE ISSUE IS COVERED BY THE ORDER OF I.T.A.T. DATED 30.12.2010 I N ASSESSEES OWN CASE. CIT(A) FURTHER OBSERVED THAT H ON'BLE I.T.A.T. VIDE THEIR ORDER DATED 30.12.2010 ALLOWED APPEAL OF THE ASSESSEE. THE RELEVANT PORTION OF THE JUDGMENT OF HON'BLE ITAT IS ENUMERATED IN PARA 14 OF THE ORDER WHICH RE ADS AS UNDER :- 1. 'HAVING STATED SO, NOW WE SHALL DEAL WITH OTHER ASPECTS. ON THE ASPECT OF NATURE OF PROVISIONS OF SECTION 80IB(14)(A), WE FIND THAT IT IS A SETTLED PROPOSITION OF LAW THAT WHEN RESULTS INTO INCREASE/LEVY OF CIVIL LIABILITY, THE SAME HAS TO B E CONSIDERED AS THE SUBSTANTIVE ONE, HENCE PROSPECTIVE. THE JUDICIAL DECISIONS CITED BY THE ASSESSEE ALSO SUPPORT THIS VIEW. ACCORDINGLY, WE REJECT THE CONTENTION OF THE REVENUE THAT THE PROVISIONS OF SECTION 80IB(14)(A) ARE OF -: 4: - 4 RETROSPECTIVE NATURE. THIS VIEW LEADS US TO ANOTHER QUESTION I.E. IN THE ABSENCE OF ANY SPECIFIC TERM I N THE ACT HOW THAT TERM SHOULD BE INTERPRETED IN THIS REGARD, IT IS ALSO A SETTLED PRINCIPLE THAT SOME COMMON SENSE APPROACH OR DICTIONARY MEANING IF THE TERM IS OF TECHNICAL NATURE, THEN THE DEFINITIO N OF SUCH TERM USED IN OTHER LAWS SHOULD BE TAKEN INTO CONSIDERATION. ACCORDINGLY, WE HOLD THAT THE MEANING OF TERM 'BUILD UP AREA' PRIOR TO INSERTION OF DEFINITION CLAUSE IN THE ACT HAS TO BE FOUND OUT AS PER THE LOCAL LAW I.E. RULES AND REGULATIONS OF BHOPAL MUNICIPAL CORPORATION AS WELL AS FROM M P. BHOOMI VIKAS RULES AND AS A CONSEQUENCE THEREOF THE BUILT UP AREA OF SUCH FLATS IS UNDISPUTEDLY LES S THAN THE SPECIFIED LIMIT. HENCE, THE ASSESSEE, IN THIS VIEW OF THE MATTER, THERE REMAINS NO QUESTION FOR ANY PRO-RATA DEDUCTION. IN THIS REGARD, WE ARE FURTHER OF THE VIEW THAT IF THE LEGISLATURE DID NOT WANT TO GIVE-ANY PRO-RATA DEDUCTION, IT HAVING BUIL T UP AREA ON THE GROUND OF SPECIFIED LIMIT, THEN THE -: 5: - 5 ASSESSEE WOULD NOT BE ENTITLED FOR ANY DEDUCTION U/S 80/B(10). IN THIS VIEW OF THE MATTER, WE DISMISS ALL THE GROUNDS RAISED BY THE REVENUE. ' FURTHER THE SAME ISSUE WHETHER AMENDMENT BROUGHT OU T IN SECTION 80IB(L0) W.E.F. 01.04.2005 ARE OF PROSPE CTIVE NATURE OR OF RETROSPECTIVE NATURE CAME FOR CONSIDER ATION BEFORE THE HON'BLE I.T.A.T, INDORE IN THE APPELLANT OWN CASE IN IT NO.194/IND/2008, A.Y. 2004-05. IN THE AB OVE MENTIONED ASSESSMENT YEAR I.E. 2004-05 THE CLAIM OF APPELLANT U/S 80IB(L0) WAS DISALLOWED MAINLY ON THE BASIS OF THAT BUILT UP AREA OF CERTAIN UNITS EXCEED ED 1500 SQ.FT. THE WORTHY CIT (A) ALLOWED THE CLAIM ON PRO RATA BASIS AND THE CLAIM WAS REJECTED ONLY IN RESPECT OF THOSE UNITS WHICH WERE FOUND TO BE IN EXCESS OF THE LAID DOWN LIMITS. THE DEPARTMENT HAS FILED APPEAL AGAINST THE ORDER OF WORTHY CIT(A) HOWEVER, THE HON'BLE ITA T ALLOWED THE FULL DEDUCTION U/S 80IB(L0) AS CLAIMED BY THE ASSES SEE AND THE REVENUES APPEAL WAS DISMISSED. THE HON'BLE IT A T, INDORE VIDE ORDER DATED 16.04.2010 OBSERVED AS -: 6: - 6 UNDER:- 'IT IS A SETTLED PROPOSITION OF LAW THAT WHEN A PARTICULAR TERM IS DEFINED BY AN AMENDMENT, WHICH RESULTS INTO INCREASE/LEVY OF CIVIL LIABILITY , THE SAME HAS TO BE CONSIDERED AS THE SUBSTANTIVE ONE, HENCE PROSPECTIVE. ACCORDINGLY, THE CONTENTION OF THE REVENUE THAT THE PROVISIONS OF S.80IB(14)(A) ARE OF RETROSPECTIVE NATURE IS REJECTED. IT IS ALSO A SETTLED PRINCIPLE THAT SOME COMMONSENSE APPROACH OR DICTIONARY MEANING IF THE TERM IS OF GENERAL NATURE SHOULD BE FOUND OUT OR IF THE TERM IS OF TECHNICAL NATURE, THEN THE DEFINITION OF SUCH TERM USED IN OTHER LAWS SHOULD BE TAKEN INTO CONSIDERATION. ACCORDINGLY, THE MEANING OF TERM 'BUILT-UP AREA' PRIOR TO INSERTION OF DEFINITION CLAUSE IN THE ACT HAS TO BE FOUND OUT AS PER THE LOCAL LAW I.E., RULES AND REGULATIONS OF BHOPAL MUNICIPAL CORPORATION AS WELL AS FROM M.P.BHOOMI VIKAS RULES AND AS A CONSEQUENCE -: 7: - 7 THEREOF, THE BUILT-UP AREA OF SUCH FLATS IS UNDISPUTEDLY LESS THAN THE SPECIFIED LIMIT. HENCE, THE ASSESSEE, IS ELIGIBLE FOR DEDUCTION UNDER S. 80 - IB(L0). IN THIS VIEW OF THE MATTER, THERE REMAINS N O QUESTION FOR ANY PRORATE DEDUCTION. IT IS BENEFICIA L PROVISION AND, THEREFORE, IT SHOULD BE INTERPRETED IN A LIBERAL MANNER AND IN CASE IT IS NECESSARY THEN THE ASSESSEE CAN BE GRANTED PRORATE DEDUCTION. IF THE LEGISLATURE DID NOT WANT TO GIVE ANY PRO RATA DEDUCTION, IT COULD HAVE BEEN PROVIDED BY THE LEGISLATURE SPECIFICALLY THAN IF ON E HOUSE WAS FOUND TO BE HAVING BUILT-UP AREA ON THE GROUND OF SPECIFIED LIMIT, THEN THE ASSESSEE WOULD NOT BE ENTITLED FOR ANY DEDUCTION UNDER SECTION 80IB(10). HOWEVER, SINCE THE LEGAL CONTENTIONS RAISED BY THE ASSESSEE IN THIS REGARD, ARE ACCEPTED, THERE IS NO REASON NOT TO GRANT A DEDUCTION THEREON UNDER S.80-IB(L0). THE ASSESSING OFFICER IS DIRECTED TO GRANT DEDUCTION UNDER S. 80-IB AS CLAIMED BY THE ASSESSEE'. -: 8: - 8 2. THE OTHER OBJECTION OF THE ASSESSING OFFICER THAT COMMERCIAL AREA OF THE PROJECT WAS MORE THAN 2000 SQ.FT. IT MAY BE NOTED THAT LIMIT ON CONSTRUCTION O N COMMERCIAL AREA WAS ALSO BROUGHT OUT IN THE ACT W.E .F. OL.04.2005 AND BEFORE 01.04.2005 THERE WAS NO SUCH LIMIT ON CONSTRUCTION OF COMMERCIAL AREA. AS THE JURISDICTIONAL HON'BLE IT AT, INDORE HAS ALREADY LA ID DOWN THAT AMENDMENT BROUGHT OUT W.E.F. 01.04.2005 ARE OF PROSPECTIVE NATURE AND NOT OF RETROSPECTIVE NATURE THEREFORE THIS OBJECTION OF THE ASSESSING OF FICER IS NOT SUSTAINABLE. RESPECTFULLY FOLLOWING THE DECI SION OF THE HON'BLE ITAT IN APPELLANT OWN CASE AS ALSO I N OTHER CASES REFERRED TO BY THE APPELLANT, IT IS FOU ND THAT THE APPELLANT HAS NOT VIOLATED ANY CONDITIONS OF 80IB(10) IN AS MUCH AS THE ACCESS BUILT UP AREA WAS ATTRIBUTED ON ACCOUNT OF DEFINITION OF BUILT UP ARE A INTRODUCED W.E.F. OL.04.2005 WHEREAS, AS PER THE REPORT OF THE DEPARTMENTAL APPROVED VALUER IF THE MEASUREMENT AS PER MP BHOOMI VIKAS RULES WAS DONE THE AREA WAS LESS THAN 1500 SQ.FT. IN VIEW OF THE A BOVE -: 9: - 9 DISCUSSION THE ACTION OF THE ASSESSING OFFICER FOR DISALLOWING CLAIM OF 80IB(10) AMOUNTING TO RS.41,84,078/- CANNOT BE SUSTAINED. THE ADDITION MADE BY THE ASSESSING OFFICER IS ACCORDINGLY DELETE D. THE GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 5. IN THE ASSESSMENT YEAR 2005-06, THE CIT(A) HAS DEAL T WITH ALL THE OBJECTIONS OF THE ASSESSING OFFICER AN D ALLOWED ASSESSEES APPEAL AFTER RECORDING FOLLOWING FINDING S :- 6.4(I) I HAVE CAREFULLY CONSIDERED THE SUBMISSION O F THE APPELLANT AND OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. I HAVE ALSO GONE THROUGH THE CASE RECORDS AS ALSO VARIOUS CASE LAWS REFERRED AND RELI ED UPON BY THE APPELLANT. IT IS NOTICE THAT THE ASSESS ING OFFICER HAS REJECTED THE CLAIM OF THE APPELLANT U/S 80IB(10) ON ACCOUNT OF FOLLOWING REASONS : (I) BUILT UP AREA OF CERTAIN UNITS EXCEEDED 1500 SQ .FT. (II)DISPUTE ON THE COMPLETION CERTIFICATE. (III)CONSTRUCTION OR COMMERCIAL AREA EXCEEDED PRESCRIBED LIMIT. -: 10: - 10 (IV) THE APPELLANT HAS NOT ACTED AS A BUILDER AND DEVELOPER TO THIS PROJECT. THE ISSUE OF COMPLETION OF PROJECT AND THAT THE APPELLANT WAS NOT ACTING AS DEVELOPER AND BUILDER T O THIS PROJECT WILL BE DISCUSSED FIRST. IT MAY BE NOT ED THAT THE PROJECT WAS APPROVED BY THE COMPETENT AUTHORITY PRIOR TO 01.04.2004 AND CONSTRUCTION WAS STARTED ON THE PROJECT ON 08.10.1998. THE PROJECT W AS TO BE COMPLETED BY 31.03.2008. THE PROJECT WAS COMPLETED BY 31.03.2005 AND COMPLETION CERTIFICATE BEARING NO. 542 DATED (30.04.2005) WAS FILED BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFIC ER WROTE A LETTER TO THE BHOPAL MUNICIPAL CORPORATION REGARDING GENUINENESS OF THE COMPLETION CERTIFICATE . AS PER THE APPELLANT, IN THIS LETTER ADDRESSED TO B MC THE ADDRESS OF THE PROJECT WAS WRONGLY STATED AS E- 8, ARERA COLONY WHEREAS THE ACTUAL LOCATION OF THE PROJECT WAS ON THE LAND BEARING KHASRA NO.58/1/13/1/1 VILLAGE BAWADIA KALAN. THE ASSESSING OFFICER RECEIVED A LETTER FROM BMC, DENYI NG -: 11: - 11 HAVING GRANTED COMPLETION CERTIFICATE. HOWEVER, SUBSEQUENTLY VIDE LETTER DATED 11.11.2008 THE BMC CONFIRMED HAVING ISSUED THE COMPLETION CERTIFICATE. THE ASSESSING OFFICER ISSUED SUMMONS TO THE CITY PLANNER OF BMC WHO ISSUED THE COMPLETION CERTIFICAT E AND HIS STATEMENT WAS RECORDED. THE CITY PLANNER IN HIS STATEMENT ADMITTED TO HAVE ISSUED THE PROJECT COMPLETION CERTIFICATE. HOWEVER, EVEN AFTER SUCH ADMISSION OF THE CITY PLANNER THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION AS REGARDS THE COMPLETION CERTIFICATE AND OBSERVED THAT AS NO EXPLANATION WAS GIVEN AS TO WHY THE APPLICATION FOR COMPLETION CERTIFICATE WAS NOT ENTERED INTO INWARD REGISTER, THEREFORE THE ASSESSING OFFICER BELIEVED THAT NO SUCH COMPLETION CERTIFICATE WAS ISSUED. THE FACT S AND CIRCUMSTANCES DISCUSSED ABOVE WILL INDICATE THA T THE ISSUE OF COMPLETION CERTIFICATE CANNOT BE DISPU TED PARTICULARLY WHEN THE COMPETENT AUTHORITY WHO ISSUED THE CERTIFICATE IS ADMITTING IN HIS STATEMEN T THE GENUINENESS OF SUCH COMPLETION CERTIFICATE. THE FAC T -: 12: - 12 THAT APPLICATION FOR COMPLETION CERTIFICATE WAS NOT ENTERED INTO THE INWARD REGISTER MAY INDICATE ONLY AN OFFICIAL IRREGULARITY AND IT MAY NOT PROVE THE CONTENTION OF THE ASSESSING OFFICER THAT NO SUCH COMPLETION CERTIFICATE WAS ISSUED. IT MAY ALSO BE NOTED THAT THE SAME OBJECTION WAS RAISED BY THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT FOR 2006-07 AND THE WORTHY CIT(A)-I WHILE ADJUDICATION THE APPEAL FOR A.Y.2006-07 IN IT NO.217/89 DID NOT APPROVE THE FINDING OF THE ASSESSING OFFICER. THE OBJECTION OF THE ASSESSING OFFICER THEREFORE CANNOT BE SUSTAINED. 6.4(II) AS REGARDING THE OTHER OBJECTION OF THE ASSESSING OFFICER THAT THE ASSESSEE ACTED ONLY AS A CONTRACTOR AND NOT AS A BUILDER OR A DEVELOPER, IT MAY BE MENTIONED THAT THOUGH THE ASSESSING OFFICER HAS RAISED SUCH OBJECTION BUT THE SAME IS NOT SUBSTANTIATED ON THE BASIS OF AVAILABLE FACTS. THIS OBJECTION WAS ALSO RAISED BY ASSESSING OFFICER EARLIER WHILE COMPLETING ASSESSMENT FOR ASSESSMENT -: 13: - 13 YEAR 2006-07. HOWEVER, THE SAME WAS NOT FOUND ACCEPTABLE BY THE FIRST APPELLATE AUTHORITY. KEEPIN G IN VIEW THE SUBMISSION OF THE APPELLANT, IT CAN BE SAI D WITH CERTAINTY THAT THE PROJECT WAS DEVELOPED AND EXECUTED BY THE APPELLANT AND THE OBJECTION OF THE ASSESSING OFFICER IS NOT SUSTAINABLE. 6.4(III) WE MAY NOW EXAMINE THE REMAINING OBJECT IONS OF THE ASSESSING OFFICER REGARDING EXCEEDING THE BU ILT UP AREA OF CERTAIN UNITS AS ALSO CONSTRUCTION OF COMMERCIAL AREA IN EXCESS OF PRESCRIBED LIMIT. IT M AY BE NOTED THAT THE PROVISIONS OF SECTION 80IB(10) WE RE SUBSTITUTED BY FINANCE NO.(2) ACT, 2004, W.E.F. 01.04.2005. IT WOULD BE RELEVANT TO REPRODUCE THE PROVISIONS OF SUB SECTION (10) AND SUB SECTION OF SECTION 80-IB WHICH READ AS UNDER :- '(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH, 2007, BY A LOCAL AUTHORITY -: 14: - 14 SHALL BE HUNDRED PER CENT, OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT OF CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, - (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1'' DAY OF APRIL. 2004, ON OR BEFORE THE 31ST DAY OF MARCH. 2008. (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE J'' DAY OF' APRIL, 2004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL -: 15: - 15 AUTHORITY. EXPLANATION :- FOR THE PURPOSES OF THIS CLAUSE :- (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DALE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY: (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY: (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE (A) OR -: 16: - 16 CLAUSE (B) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT Q/ EXISTING BUILDINGS IN AREAS DECLARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIM E BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF: (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF D ELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND A ND FIVE HUNDREDS SQUARE FEET (IT ANY OTHER PLACE AND (D) THE BUILT-UP AREA OF TIRE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED FIVE PER CENT OF THE AGGREG ATE BUILT-UP AREA OF THE HOUSING PROJECT OR TWO THOUSAN D SQUARE FEET, WHICHEVER IS LESS.' -: 17: - 17 FURTHER THE DEFINITION OF 'BUILT UP AREA' WAS ALSO PROVIDED IN SECTION 80IB( 14)(A) WHICH READ AS UNDER :- ' THE INNER MEASUREMENTS OF THE RESIDENTIAL UNIT AT THE FLOOR LEVEL, INCLUDING HR PROJECTIONS AND BALCONIES, AS INCREASED BY THE THICKNESS OF THE WALLS BUT DOES NOT INCLUDE THE COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNITS. ' IT MAY BE MENTIONED THAT A CARDINAL PRINCIPLE OF TA X LAW IS THAT THE LAW IS TO BE APPLIED IS THAT WHICH IS IN FORCE IN THE RELEVANT A.Y. THE LAW THAT GOVERNS THE ASSESSMENT IS THE LAW THAT IS PREVAILING ON APRIL 1ST OF THE RELEVANT A.Y. IT IS ALSO A SETTLED POSITION OF LAW THAT THERE CANNOT BE ESTOPPELS AGAINST A STATUTE. NOW THE PROVISIONS OF ABOVE SECTION 10 OF 80IB ARE INTRODUCED W.E.F. 01.04.2005 AND THUS THIS WAS PREVAILING LAW FROM 01.04.2005 AND SUBSEQUENT A.Y. FOR A.Y. 2005-06 I.E. A.Y. FOR CONSIDERATION ALSO THE PREVAILING LAW AS EFFECTIVE FROM 01.04.2005 WAS APPLICABLE. THEREFORE, IF AN -: 18: - 18 ASSESSEE CLAIMS DEDUCTION U/S 80IB(10) FOR A. Y. 2005-06 THE ASSESSEE HAS TO FULFILL ALL THE CONDITIONS LAID DOWN IN AFORE MENTIONED SUB- SECTION 10 OF 80IB AND AS THE BUILT UP AREA OF CERTAIN UNITS EXCEEDED THE PRESCRIBED LIMIT AS ALSO THAT CONSTRUCTION OF COMMERCIAL AREA ALSO EXCEEDED THE PRESCRIBED LIMIT THEREFORE THE APPELLANT PRIMA- FACIE DID NOT COMPLY WITH ALL REQUIREMENT OF SECTIO N 80IB(10), HOWEVER, IT MAY BE NOTED THAT THE HON'BLE JURISDICTIONAL ITAT IN THE CASE OF M/S. GLOBAL REALITY BHOPAL, A.Y.2004-05 TO 06-07 (ITA NO.145/IND/2011, 434/IND/2010, 86/IND/2011 AND M/S GLOBAL ESTATES BHOPAL, A.Y. 2002-03 TO 06-07 ITA NO.81 TO 85 OF 2011, VIDE ORDER DATED 29.09.2011 HAS LAID DOWN THAT DEFINITION OF BUILT UP AREA U/S 80IB(L0) INTRODUCED W.E.F. 01.04.2005 SHALL NOT BE APPLICABLE IN RESPECT OF CASES WHERE PROJECTS WERE APPROVED BEFORE 01.04.2005. IN BOTH THESE CASES DECIDED BY THE HON'BLE ITAT THE PROJECTS WERE APPROVED BEFORE 01.04.2005 AND -: 19: - 19 CLAIM OF DEDUCTION U/S 80IB(10) WAS DISALLOWED BECAUSE OF THE REASONS THAT AS PER DEFINITION OF BUILT UP AREA, THE CONSTRUCTED AREA OF CERTAIN UNIT S EXCEEDED THE PRESCRIBED UNITS. THE RELEVANT PART OF THE JUDGMENT OF THE HON'BLE ITAT IS NARRATED BELOW:- '8. THE PROVISION OF SEC. 80IB(1O) WAS INTRODUCED BY THE FINANCE ACT. 1999 AND WAS MADE EFFECTIVE FROM 1.4.2005 TO MITIGATE THE HOUSING PROBLEMS FACED BY THE NATION. SINCE I. T. ACT DID NOT PROVIDE DEFINITION OF THE BUILT-UP AREA TILL THEN, THEREFORE. THE ASSESSEE CONVENIENTLY RELIED UPON THE BUILT-UP AREA MAP APPROVED BY THE LOCAL AUTHORITY, WHICH WAS LESS THAN 1500 SQ.FT. AS IS EVIDENT FROM THE MAP APPROVED BY THE LOCAL AUTHORITY. THE PROJECT WAS APPROVED ON 22.3.2001 BEFORE THE INTRODUCTION OF SEC. (I.E. 1.4.2005), THEREFORE. THE DEFINITION SHALL NOT BE APPLICATION TO THE ASSESSEE. THE MEASUREMENT OF -: 20: - 20 THE UNIT IS SUMMARIZED AS UNDER : PER DVO PER ASSESSEE PER REGISTERED SALE DEED PER SECTION 80IB(14)(A) INTRODUCED W.E.F. 1.4.2005 PER BHUMI V IKAS ADHINIYAM, 1973. P.B.14-15 REGAL 6 1994.16 A.O. PAGE 2 1315.02 P.B.11 1330.53 PAGE 11 (SYNOPSIS) ROYAL 22 1919.98 A.O. PAGE 3 1315.02 P. B. 11 (SAME SIZE AS REGAL 6) 1050.00 PAGE 19 ( SALE OF INCOMPLETE STRUCTURE MAP APPROVED FOR 1461 SQ.FT. PAGE 28 9. ANOTHER OBJECTION RAISED BY THE LD. SR. DR IS THAT THE COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTH ORITY ON 4.5.201 0 FOR WHICH OUR ATTENTION WAS INVITED TO PAPER BOOK P AGE 30 & 31, IT WAS CLARIFIED BY THE LD. COUNSEL FOR THE ASSESSEE T HAT CLARIFICATION WAS ISSUED: VIDE LETTER DATED 23.3.2011 (PAPER BOOK PAGE 32) WHEREIN THE DATE OF COMPLETION WAS MENTIONED AS 27. 2.2008. THIS ASSERTION OF THE ASSESSEE WAS NOT CONTROVERTED BY T HE REVENUE, THEREFORE, THE CASE OF THE ASSESSEE FINDS SUPPORT F ROM THE DECISION IN THE CASE 01' D.K. CONSTRUCTION, 17 ITJ 1 (INDORE ITAT) WHEREIN IT WAS HELD THAT DATE OF ISSUE OF COMPLETION CERTIFICATION IS NOT CRUCIAL BUT DATE OF COMPLETION OF PROJECT IS RELEVANT, THEREFORE, DELAY IN OBTAINING -: 21: - 21 THE CERTIFICATE WILL NOT A FEET ADVERSELY THE ASSES SEE BECAUSE THE ASSESSEE CAN ONLY APPLY WITHIN THE PRESCRIBED LIMIT AND THE POWERS 0./ THE ISSUANCE OF THE CERTIFICATE LIES WITH THE AUTHORITIES. IF THERE IS ANY DELAY ON THE PART OF THE MUNICIPAL AUTHORITIES, THE ASSESSEE SHOULD NOT BE PENALISED ESPECIALLY WHEN IT WAS CLARIFIED BY THE MUNICIPAL AUTHORITIES VIDE CLARIFICATION DATED 23.3 .2011 MENTIONING THE DATE OF COMPLETION AS 27.3.2008. THE DATES ARE SUMMARISED AS UNDER: PERMISSION PERMISSION PERMISSION NO. 834/0103 NO. 2428/0301 NO. 2190/1200 DATE OF APPROVAL 2.1.2003 22.3.2001 16.12.2000 PB PAGE 18 PB PAGE 22 PB PAGE 26 APPLICATION FOR 16.1.2008 16.1.2008 16.1.2008 OBTAINING COMPLETION COMPLETION CERTIFICATE 4.3.2010 4.3.2010 28.8.20 09 PB PAGE 20 PB PAGE 20 PB PAGE 28 CLARIFICATION BY 23.3.2011 23.3.2011 23.3.2011 MUNICIPAL CORPORATION PB PAGE 21 PB PAGE 25 PB P AGE 29 DT. DATE OF 23. 3. 2008 8.3.2008 14.3.2008 COMPLETION MENTIONED P.B. PAGE 21 P.B. PAGE 25 PB PAGE 29 IF THE AFORESAID DATES ARE ANALYSED, IT CAN BE SAID THAT THE PROJECT WAS COMPLETED ON 23.3.2008, 8.3.2008 & 14.3 .2008, RESPECTIVELY, WHICH ARE WITHIN TIME AND AS PER THE PROVISIONS OF THE ACT. THE DEFINITION OF BUILT-UP AREA U/S 80IB , THEREFORE, APPLIED TO PROJECT APPROVED ON OR AFTER 1.4.2005, C ONSEQUENTLY, -: 22: - 22 THE DEFINITION DOES NOT APPLY TO THE PRESENT APPELL ANTS AS THEIR PROJECTS WERE APPROVED ON 8.10.1998. EVEN OTHERWISE , AT THE INCEPTION, SECTION 80IB IS A BENEFICIAL LEGISLATION , THEREFORE, A LIBERAL CONSTRUCTION, UNDER THE FACTS STATED ABOVE, IN FAVOUR OF THE ASSESSEE SHOULD BE ADOPTED. SIMILARLY, WHERE TW O INTERPRETATIONS ARE POSSIBLE, THE VIEW FAVOURING T HE ASSESSEE SHOULD BE PREFERRED. THIS PROPOSITION IS SUPPORTED BY THE DECISIONS IN GOVIND DAS (103 ITR 123) ( S.C.), GEM GRANITES (271 ITR 322) ( S.C.) BAJAJ TEMPO LTD. (196 ITR 188) (SC), CIT VS. MADHAV PAL JATIA (105 ITR 1 79) (SC) AND VEGETABLE PRODUCTS (88 ITR 192) (SC). 10. SECTION 80IB PROVIDES DEDUCTION FOR CERTAIN UND ERTAKINGS WHICH COMMENCE THEIR BUSINESS WITHIN THE SPECIFIED PERIOD. SECTION 80IB(3)(I) PROVIDES, WHEREBY DEDUCTION IS P ROVIDED FOR INDUSTRIAL UNDERTAKING COMMENCING BUSINESS BETWEEN 1.4.1991 AND UP TO 31 . 3. 1995. SIMILARLY, U/S 80IB(3)(II) PROVIDES DEDUCTION FOR COLD STORAGES COMMENCED BUSI NESS BETWEEN 1.4.1995 UP TO 31.3.2002. IF THE BUSINESS C OMMENCES WITHIN THIS PERIOD, THE DEDUCTION IS ALLOWABLE FOR TEN CONSECUTIVE ASSESSMENT YEARS WHEREAS SECTION 80IB(1 0) -: 23: - 23 PROVIDES DEDUCTION FOR HOUSING PROJECTS WHICH ARE A PPROVED ON OR AFTER 1.10.1998 AND UP TO 31.3.2008. THEREFORE, SECTION 80IB(10)(A) CLEARLY DIFFERENTIATES THE PROJECTS (AP PROVED BETWEEN (A) 1.10.1998 TO 31.3.2004, (B) 1.4.2004 TO 31.3.2005 AND (C) 1.4.2005 TO 31.3.2008). IN CASE THE PROJECT IS APPROVED BETWEEN THESE SPECIFIED DATES, THE ENTIRE PROJECT M AY BE ALLOWABLE TO THE ASSESSEE. IF THE IMPUGNED SECTION IS ANALYSED, IT IS BASED UPON THE APPROVAL OF THE PROJ ECT. THE AMENDMENT BY FINANCE (NO.2) ACT, 2004, THEREFORE, R EQUIRES TO BE INTERPRETED HARMONIOUSLY CONSIDERING THE SCHEME OF THE ACT. IN THE PRESENT APPEALS, THE PROJECTS WERE APPROVED PRIOR TO AMENDMENTS, THEREFORE, IF THE DEFINITION IS SAID TO BE APPLIED TO THE PROJECTS ALREADY APPROVED PRIOR TO 1.4.2005, IT WOULD MEAN THAT THE ASSESSEE WOULD BE REQUIRED TO DEMOLISH ITS PROJECTS AND AGAIN RECONSTRUCT THE SAME SO THAT THE ASSESSEE FITS INTO EXEMPTION. THIS IS NOT THE INTENTION OF THE LEGISLA TURE BECAUSE IT MAY AFFECT THE VESTED RIGHTS OF THE ASSESSEE, CONSE QUENTLY, CANNOT HE SAID TO BE OF RETROSPECTIVE EFFECT, THE S ECTION REQUIRES THE ASSESSEE TO BUILD THE PROJECT WITHIN T HIS SPECIFIED LIMIT ALREADY APPROVED WHEN THE AMENDMENT WAS NOT O N THE -: 24: - 24 STATUTE BOOKS, CONSEQUENTLY, IF THE SECTION IS INTE RPRETED TO BE APPLICABLE EVEN TO THE EXISTING PROJECTS, THE SAME WILL LEAD TO THE ABSURDITY AND THAT IS NOT THE INTENTION OF THE LEGISLATURE BECAUSE ULTIMATELY IT WILL LEAD TO A NATIONAL LOSS. THE INTENTION OF THIS LEGISLATURE AND THE RATIO LAID DOWN IN ACIT VS SETH DEVELOPERS P. LTD. (33 SOT 277) (MUM) SUPPORTS THE CASE OF THE ASSESSEE WHEREIN IT WAS HELD AS UNDER: 'NOW THE QUESTION WHETHER THE DEFINITION CLAUSE MENTIONED ABOVE CAN BE DEEMED AS RETROSPECTIVE, WE ARE AFRAID WE HAVE TO ANSWER AGAINST THE REVENUE. NUMBER ONE, THE ENACTMENT ITSELF CLEARLY SPECIFIES THAT CLAUSE WILL HAVE EFFECT FROM 1.4.2005. NUMBER TWO, IT IS NOT A PROCEDURAL SECTION BUT A DEFINITION SECTION, WHERE AN ENLARGED MEANING IS GIVEN TO THE TERM 'BUILT UP AREA' AND SUCH ENLARGED MEANING WOULD NOT HAVE BEEN IN THE REALM OF UNDERSTANDING OF ANY PERSON, PRIOR TO ITS INTRODUCTION, AND ASSESSEES WOULD HAVE GONE AHEAD WITH THEIR RESPECTIVE PROJECTS -: 25: - 25 BASED ON A COMMON UNDERSTANDING OF THE TERM BUILT-UP AREA. THUS, THE ENLARGED MEANING, IF GIVEN A RETROSPECTIVE EFFECT, WILL DEFINITELY AFFEC T THE VESTED RIGHTS OF AN ASSESSEE. THEREFORE, WE HAVE NO HESITATION TO CONCLUDE THAT THE DEFINITION HAD ONLY PROSPECTIVE EFFECT FROM 1 . 4. 2005 . VARIOUS HON'BLE COURTS HAVE DECIDED THAT THE DEFINITION OF 'BUILT-UP AREA' U/S 80IB(14) IS NOT RETROSPECTIVE BUT ONLY PROSPECTIVE. THE FOLLOWING JUDICIAL PRONOUNCEMENTS SUPPORT THE CASE OF THE ASSESSEE :- 1. ACIT VS. SAROJ KAPOOR (14 ITJ 585) ( ITAT., INDORE); 2. BRAHMA ASSOCIATES VS. JCIT (122 TTJ (PUNE) (SB) 433): 3. GV CORPORATION (133 TTJ 178) (MUM); 4. DCIT VS. BRIGADE ENTERPRISES (11 9 TTJ 269) (BANG): -: 26: - 26 5. ACIT VS. SETH DEVELOPERS (33 SOT 277) (MUM); 6. BRAHMA ASSOCIATES (315 ITR (AT) 268) (PUNE) (SB); 7. AIR DEVELOPERS (14 ITJ 206) (I. T.A.T .. NAGPUR). IF THE AFORESAID JUDICIAL PRONOUNCEMENTS ARE KEPT I N JUXTAPOSITION WITH THE FACTS OF THE PRESENT APPEALS , IT CAN BE SAID THAT THE ASSESSEES ARE GOVERNED BY THE M. P. V IKAS ADHINIYAM READ WITH BHOPAL MASTER PLAN, 2005, THE A SSESSEES HAVE TAKEN THE BUILT-UP AREA AS PER DEFINITION GIVE N UNDER MASTER PLAN, 2005 (PAPER BOOK PAGE 24) WHICH DEFINES 'BUILDABLE AREA' WHICH EXCLUDES THE COMMON AREAS, M UM TEE, BALCONY ETC., CONSEQUENTLY, THE AREAS OF THESE EXEM PTED STRUCTURES IS NOT TO BE INCLUDED IN THE BUILT UP AR EA. THE STATE OF MADHYA PRADESH HAS FRAMED MADHYA PRADESH STATE B HUMI VIKAS RULES, 1984, IN THIS REGARD TO CONTROL AND REGULATE THE DEVELOPMENT AND CONSTRUCTION FOR THE ENTIRE STATE. THE MUMTEE AREA AND PORCH/COVERED PARKING IS NOT INCLUDED IN THE BUILT UP AREA. THE SAME RULE IS ENFORCED IN THE JURISDICTION OF BHOPAL MUNICIPAL CORPORATION. THE APPROVAL GRANTED BY THE BHOPAL -: 27: - 27 MUNICIPAL CORPORATION AFTER PROCESSING AND COMPUTIN G THE COVERED AREA AND FLOOR AREA IS BASED ON THESE BHUMI VIKAS RULES, 1984 ONLY. 11. THE ASSESSEE HAS CONSTRUCTED THE HOUSES AS PER SANCTIONED PLAN APPROVED BY THE MUNICIPAL AUTHORITI ES AND NO DEVIATION WAS POINTED OUT. EVEN OTHERWISE, FINAL LY COMPLETION CERTIFICATE WAS ALSO ISSUED TO THE ASSES SEE. IF THERE WOULD HAVE BEEN ANY DEVIATION IN THE CONSTRUC TION CONTRARY TO THE SANCTIONED PLAN, THERE WAS NO QUEST ION OF ISSUANCE OF COMPLETION CERTIFICATE. WE FURTHER FIND THAT AS PER THE SANCTIONED PLAN (PAGE 15 OF THE PAPER BOOK), TH E TOTAL/BUILT UP AREA IS 123.54 SQ. MTR. AS PER REGISTERED SALE DEED (PAGES 8 TO 12 OF THE PAPER BOOK), THE AREA SOLD IS ALSO 125.4 SQ. MTR. AS MENTIONED IN SCHEDULE (PAGE 11 OF THE PAPER BOOK) IN THE CASE OF REGAL-6 RESIDENTIAL UNIT , WHICH IS A DUPLEX HOUSE AND THE BUILT UP AREA ON GROUND FLOOR IS 70.54 SQ. MTR. AND 62.00 SQ, MTR. ON THE FIRST FLOOR, MEA NING THEREBY THAT THERE IS NO DEVIATION FROM THE SANCTI ONED PLAN. IF THE EXEMPTED AREAS AS PER THE DEFINITION OF RULE 2(29) READ WITH RULE 58 OF THE M.P. BHUMI VIKAS RULES (REPRODUCED -: 28: - 28 HEREINABOVE) ARE KEPT IN JUXTAPOSITION WITH THE FAC TS OF THE PRESENT APPEAL THEN THE CLEAR POSITION IS EMERGING THAT THE TOTAL BUILT UP AREA REMAINS WITHIN THE SPECIFIED LI MIT OF 1500 SQ.FT . AS PROVIDED UNDER SECTION 80IB(14)(A) OF TH E ACT. SUB- SECTION (10) OF SECTION 80IB OF THE ACT WAS INSERTE D BY THE FINANCE (NO.2) ACT. 2004 WITH EFFECT FROM 1.4.2005. PRIOR TO ITS SUBSTITUTION, SUB-SECTION (10 ) AS AMENDED BY THE FINANCE ACT,2000, WITH EFFECT FROM 1.4.2001 AND FINANCE ACT, 2003 WITH EFFECT FROM 1.4.2002 READS AS UNDER :- (10) THE AMOUNT OF PROFIT IN CASE OF AN UNDERTAK ING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE 31 ST DAY OF MARCH, 2005, BY A LOCAL AUTHORITY, SHALL BE 100% OF THE PROFIT DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998. (B) THE PROJECT IS ON THE SIZE OF THE PLOT OF LAND WHICH HAS A MINIMUM AREA OF 1 ACRE AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM -: 29: - 29 BUILT UP AREA OF 1000 SQ.FT, WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN 25 KMS FROM THE MUNICIPAL LIMITS OF THESE CITIES AND 1500 SQ.FT. AT ANY OTHER PLACE. ' THE ASSESSEE ACTED UPON THE PROVISION OF SECTION 80IB AS PREVAILING IN THE YEAR 2003 (AS SECTION 80IB(L4)(A) WAS NOT ON THE STATUTE BOOK AS THE SAME WAS INSERTED BY THE FINANCE (NO.2), 2004 WITH EFFECT FROM 1.4.2005, THEREFORE, THE ASSESSEE IS ENTITLED TO THE BENEFIT OF SECTION 80IB(10) OF T HE ACT AND SUCH BENEFIT CANNOT BE WITHDRAWN FROM THE ASSESSEE ESPECIALLY WHEN THE ASSESSEE HAS ACTED UPON LEGALLY ASSURED POSITION EMERGING FROM THE ENACTMENTS. IT IS PERTINENT TO MENTION HERE THAT THE INCOME TAX ACT PREVAILING AT THE TIME OF LAUNCH OF THE PROJECT, DID NOT DEFINE THE 'BUILT UP AREA' AND BY THE DEFINITION PROVIDED IN M. P. NAGAR GRAH NIRMAN ADHINIYAM AND M. P BHUMI VIKAS NIYAM, 1984, THE BUILT UP AREA OF -: 30: - 30 THE UNIT IS LESS THAN THE PRESCRIBED LIMIT OF 1500 SQ. FT., CONSEQUENTLY, THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB(10) OF THE ACT. THE RATIO LAID DOWN BY THE NAGPUR BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. AIR DEVELOPERS (2009) 123 TTJ (NAG) 959 FURTHER SUPPORTS THE CASE OF THE ASSESSEE. IN VIEW OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS, THE APPEALS OF THE ASSESSEE ARE ALLOWED.' 6 .4(IV) FURTHER IT MAY ALSO NOTED THAT THE HON'BLE I TAT IN APPELLANTS OWN CASE IN ITA NO.238/IND/2010 A.Y. 20 06- 07 RELYING ON ITS OWN JUDGMENT IN THE CASE OF GLOBA L REALITY BHOPAL HAS AGAIN LAID DOWN THAT THE DEFINITION OF B UILT LIP AREA AND AMENDMENT BROUGHT OUT IN SECTION 80IB(10) SHALL NOT APPLY TO THE PROJECTS WHICH WERE APPROVED ON OR BEFORE 01.04.2005. IN THE APPELLANT CASE FOR A.Y. 2006-07 THE SAME PROJECT WAS INVOLVED AND THE ASSESSING OFFICER HAS REJECTED THE CLAIM OF DEDUCTION U/S 80IB(10) ON ACCOUNT OF REASONS THAT BUILT UP AREA OF CERTAIN UNITS EXCEEDE D PRESCRIBED LIMIT OF 1500 SQ.FT. AND CONSTRUCTED ARE A OF -: 31: - 31 COMMERCIAL UNITS EXCEEDED 2000 SQ.FT. CERTAIN UNITS EXCEEDED PRESCRIBED LIMIT OF 1500 SQ.FT. AND CONSTRUCTED AREA OF COMMERCIAL UNIT EXCEEDED 2000 SQ. FT. THOUG H THE ASSESSING OFFICER HAS DISPUTED ISSUE OF COMPLETION CERTIFICATE AS ALSO THAT THE ASSESSEE HAS NOT ACTED AS BUILDER AND DEVELOPER TO THE PROJECT. HOWEVER, THES E OBJECTIONS WERE NOT SUPPORTED BY FIRST APPELLATE AU THORITY. THE CLAIM OF THE APPELLANT U/S 80IB(10) WHICH WAS REJECTED BY THE ASSESSING OFFICER WAS CONFIRMED BY THE FIRST APPELLATE AUTHORITY BECAUSE OF THE REASONS THAT THE CONSTRUCTED AREA OF CERTAIN UNITS EXCEEDED 1500 SQ. FT AND ALSO THAT COMMERCIAL AREA EXCEEDED THE PRESCRIBED L IMIT AND THAT THE AMENDED PROVISIONS W.E.F. 01.04.2005 W ERE APPLICABLE IN THE CASE OF THE APPELLANT IN RESPECT OF A.Y. 2006-07. HOWEVER, THE HON'BLE ITAT ALLOWED THE APPE AL OF THE APPELLANT AND ADDITION CONFIRMED BY THE FIRST A PPELLATE AUTHORITY WAS DELETED. THE RELEVANT PORTION OF JUDG EMENT OF HON'BLE I.T.A.T. IS SUMMARIZED AS UNDER :- IF THE AFORESAID PROVISIONS OF THE ACT IS KEPT IN JUXTAPOSITION WITH THE FACTS OF THE PRESENT APPEAL, WE FIND -: 32: - 32 THAT THE PLAN WAS APPROVED ON 8.10.1998 (PAGE 10) O F THE PAPER BOOK. THE PROJECT WAS COMPLETED ON 30.4.2005 (COMPLETION CERTIFICATE AT PAGE 33 OF THE PAPER BOO K). IN VIEW OF THESE FACTS IT CAN BE SAID THAT THE AMENDED PROV ISION IS NOT APPLICABLE TO THE FACTS OF THE PRESENT APPEAL. THE ASSESSEE IS FORTIFIED BY THE DECISION OF INDORE BEN CH OF THE TRIBUNAL IN THE CASE OF ACIT VS. SMT. SAROJ KAPOOR (2010) 14 ITJ 585, WHEREIN THE DEFINITION OF BUILT UP AREA U/S 80IB(10) OF THE ACT HAS BEEN DISCUSSED AND WAS DECIDED IN FAVOUR OF THE ASSESSEE. EVEN OTHERWISE THE PROVISION IS BENEFICIA L, THEREFORE IT SHOULD BE INTERPRETED IN A LIBERAL MAN NER. SECTION 80IB(14) OF THE ACT WHICH DESCRIBES BUILT U P AREA WAS INTRODUCED PROSPECTIVELY AND APPLIES WITH EFFECT FROM ASSESSMENT YEAR 2005-06 AND PRIOR TO THAT DEFINITION THE LOCAL LAWS SHALL BE ADOPTED. AN ELABORATE DISCUSSION HAS BEEN MADE BY THIS BENCH IN THE CASE OF GLOBAL REALITY AND GLOBAL STATES (ITA NO. 1 45/IND/2011, 434/IND/1O, 86/IND/2011 ND 81 TO 85/IND/2(11) WHICH ARE NOT BEING REPEATED BEING A M ATTER -: 33: - 33 OF RECORD. VARIOUS JUDICIAL PRONOUNCEMENTS HAVE ALSO BEEN DISCUSSED IN THE AFORESAID CASES. THEREFORE RESPECTFULLY FOLLOWING THE SAME THE APPEAL OF THE ASSESSEE IS ALLOWED. ' 6.4(V) ON CAREFUL CONSIDERATION OF ALL FACTS AND CIRCUMSTANCES DISCUSSED ABOVE IT IS NOTICED THAT IN THE APPELLANT CASE THE ASSESSMENT INVOLVED IS 2005-06 AND FOR CLAIM OF DEDUCTION U/S 80IB(1 0) THE PREVAILING AS ON 01.04.2005 WOULD BE THE APPLICABLE LAW. I AM OF THE CONSIDERED OPINION THAT IN SUCH CIRCUMSTANCES AS PE R AMENDED PROVISIONS IN RESPECT OF BUILT UP AND LIMIT ON CONSTRUCTION OF COMMERCIAL AREA THE APPELLANT PRIMA FACIE DID NOT COMPLY WITH THE REQUIREMENT OF 80IB(10). HOWEVER, THE HON'BLE ITAT, INDORE HAS CONSISTENTLY LAID DOWN THA T THE AMENDED PROVISIONS OF 801B(10) W.E.F. 01.04.2005 SHALL NOT BE APPLICABLE IN RESPECT OF PROJECT APPROVED BEFORE 01.04.2005. THE HON'BLE IT AT, INDORE IN APPELLANTS OWN CASE IN A. Y. 2004-05 AND 06-07 ON THE SAME HOUSING PROJECT WHERE THE CLAIM OF 8018( 10) WAS REJECTED BY THE ASSESSING -: 34: - 34 OFFICER, ALLOWED THE APPEAL OF THE APPELLANT AND DE DUCTIONS SO CLAIMED WAS ACCORDINGLY ALLOWED. THEREFORE, RESP ECTFULLY FOLLOWING THE DECISION OF HON'BLE ITAT, INDORE WHIC H IS ALSO BINDING ON THE LOWER REVENUE AUTHORITY AS LAID DOWN BY THE HON'BLE JURISDICTION, HIGH COURT MADHYA PRADESH IN THE CASE OF M/S. AGRAWAL WAREHOUSING & LEASING LIMITED VS. CIT, REPORTED IN (2002) 257 ITR 0235, IT IS HELD THAT PROVISIONS OF SECTION 80IB( 10) IN RESPECT OF DEFINITION OF BUILT UP AREA AND LIMIT ON CONSTRUCTION OF COMMERCIAL AREA WILL NOT A PPLY IN APPELLANT CASE AS THE PROJECT WERE APPROVED ON 08.10.1998, BEFORE 01.04.2005, THEREFORE, ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS. 1,75,56,841/- ON ACCOUNT OF REJECTION OF CLAIM U/S 80IB(10) IS DELETED. THE GROUNDS OF APPEAL ARE ALLOWED. 12. AGAINST THE ABOVE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US, WHEREIN THEY ARE AGGRIEVED FOR DE LETION OF DISALLOWANCE MADE U/S 80IB(10) IN BOTH THE YEARS UN DER CONSIDERATION. THE ASSESSEE HAS ALSO FILED CROSS OB JECTION WHEREIN THEY HAVE ALLEGED ACTION OF CIT(A) FOR CONF IRMING REOPENING U/S 147. -: 35: - 35 13. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PE RUSED. WE HAD ALSO DELIBERATED ON THE CASE LAWS CITED BY L OWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS C ASE LAWS REFERRED BY THE LD. AUTHORIZED REPRESENTATIVE AND LD. SENIOR DR DURING THE COURSE OF HEARING BEFORE US. FROM THE RECORD, WE FOUND THAT THE ASSESSEES CLAIM FOR DEDUCTION U/ S 80IB(10) WAS DECLINED BY THE ASSESSING OFFICER ON THE PLEA T HAT THE ASSESSEE IS NOT A DEVELOPER BUT MERELY A CONTRACTOR AND THAT COMPLETION CERTIFICATE WAS NOT OBTAINED WITHIN THE STIPULATED TIME AND THE AREA OF CONSTRUCTION WAS MORE THAN THE SPECIFIED LIMIT OF 1500 SQ.FT. THE LD. CIT(A) HAS ELABORATELY DEALT WITH EACH AND EVERY OBJECTION OF THE ASSESSING OFFICER A ND RECORDED A DETAILED FINDING TO THE EFFECT THAT THE ASSESSEE WAS NOT MERELY A CONTRACTOR BUT HAVE DEVELOPED THE ENTIRE S CHEME. THE LD. CIT(A) HAS OBSERVED THAT THE PROJECT WAS APPROV ED BY THE COMPETENT AUTHORITY PRIOR TO 1.4.2004, AND CONSTRUC TION WAS STARTED ON THE PROJECT ON 8.10.1998. THE PROJECT WA S TO BE COMPLETED BY 31 ST MARCH, 2008, WHEREAS PROJECT WAS COMPLETED BY 31 ST MARCH, 2005, AND COMPLETION CERTIFICATE BEARING NO. 542 DATED 30.4.2005 WAS FILED BEFORE TH E -: 36: - 36 ASSESSING OFFICER. THE LD. CIT(A) FURTHER OBSERVED THAT EVEN ASSESSING OFFICER HAS RECORDED A FINDING TO THE EFF ECT THAT THE STATEMENT OF CITY PLANNER WAS RECORDED, WHEREIN HE HAS CONFIRMED THE ISSUE OF COMPLETION CERTIFICATE VIDE LETTER DATED 11.11.2008. IN VIEW OF THESE FINDINGS, THE LD. CIT( A) HAS REJECTED THE ASSESSING OFFICERS SUSPICION REGARDIN G COMPLETION CERTIFICATE DATED 30 TH APRIL, 2005. ON THE BASIS OF EVIDENCES AVAILABLE ON RECORD, THE LD. CIT(A) HAS ALSO RECORD ED A FINDING THAT THE ASSESSEE HAS ACTED AS A BUILDER AND DEVELO PER TO THE PROJECT AS A WHOLE AND NOT MERELY AS A CONTRACTOR. WITH REGARD TO THE AREA OF CONSTRUCTION, THE LD. CIT(A) HAS REC ORDED A DETAILED FINDING TO THIS EFFECT. WE ALSO FOUND THAT DEPARTMENTAL VALUATION OFFICER, SHRI AMOGH KUMAR GUPTA HAS ALSO CARRIED OUT MEASUREMENT OF BUILT UP AREA AND STATED THAT BU ILT UP AREA AS PER BHUMI VIKAS RULES, 1984, WAS 1453.17 SQ .FT. THE RELEVANT FINDING HAS ALSO BEEN RECORDED BY THE LD.C IT(A) IN HIS ORDER WITH REGARD TO MEASUREMENT OF BUILT UP AREA B Y THE DVO SHRI AMOGH KUMAR GUPTA. THIS FINDING HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT. IN VIEW OF THESE PE CULIAR FACTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR -: 37: - 37 ALLOWING ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10 ) OF THE INCOME-TAX ACT, 1961. 14. IN THE RESULT, APPEALS OF THE REVENUE IN BOTH T HE YEARS ARE DISMISSED. 15. WITH REGARD TO ASSESSEES CROSS OBJECTIONS FOR VALIDITY OF REOPENING, WE FOUND THAT AFTER RECORDING DETAILED R EASONS FOR REOPENING, THE ASSESSING OFFICER HAS ISSUED NOTICE U/S 148. ORIGINAL RETURNS WERE PROCESSED U/S 143(1) IN BOTH THE YEARS UNDER CONSIDERATION. ACCORDINGLY, WE DO NOT FIND AN Y INFIRMITY IN THE ORDER OF CIT(A) FOR FORMING THE REOPENING OF ASSESSMENT IN BOTH THE YEARS UNDER CONSIDERATION. 16. OTHER OBJECTIONS RAISED BY THE ASSESSEE IN CROS S OBJECTIONS WITH REGARD TO COMMUNICATION OF ORDER AN D DIRECTIONS ISSUED BY HON'BLE M.P. HIGH COURT, HAVE BEEN ELABORATELY DEALT WITH BY CIT(A) IN HIS APPELLATE O RDER, WHICH HAS NOT BEEN CONTROVERTED BY THE ASSESSEE BY BRINGI NG ANY POSITIVE MATERIAL ON RECORD. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE CONCLUSION DRAWN BY CIT(A). -: 38: - 38 17. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AS WELL AS CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSE D. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :29 TH OCTOBER, 2012. CPU* 7910