M/s. Sai Drishti Constructions, Pune V. Assistant Commissioner of Income-tax,

ITA 1015/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2721 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 15-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Assessee Lawyers: V L JAIN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 991/PN/2014 $& ' !(' / ASSESSMENT YEAR : 2010-11 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), PUNE ....... / APPELLANT )& / V/S. M/S. SAI DRISHTI CONSTRUCTIONS, OFFICE NO. 9, UMED BHAVAN, CANARA BANK BUILDING, PIMPRI, PUNE 411018 PAN : AACAS7705B / RESPONDENT / ITA NO. 1015/PN/2014 $& ' !(' / ASSESSMENT YEAR : 2010-11 M/S. SAI DRISHTI CONSTRUCTIONS, OFFICE NO. 9, UMED BHAVAN, CANARA BANK BUILDING, PIMPRI, PUNE 411018 PAN : AACAS7705B ....... / APPELLANT )& / V/S. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), PUNE / RESPONDENT ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI S.K. RASTOGI / DATE OF HEARING : 17-12-2015 / DATE OF PRONOUNCEMENT : 15-02-2016 2 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 * / ORDER PER VIKAS AWASTHY, JM : THESE TWO CROSS APPEALS BY THE REVENUE AND THE ASSES SEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- CENTRAL, PUNE DATED 27-02-2014 FOR THE ASSESSMENT YEAR 2010-1 1. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE REC ORDS ARE: THE ASSESSEE IS A PROMOTER AND BUILDER AND HAS EXECUTED A HOUSING PROJECT SAI SAHEB. THE ASSESSEE FILED ITS RETURN OF INCOME FOR TH E ASSESSMENT YEAR 2010-11 ON 27-09-2010 DECLARING NIL TAXABLE INCOM E. THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT HAS SHOWN SALES O F ` 38,24,75,997/- AND NET PROFIT OF ` 9,16,23,159/-. THE ASSESSEE CLAIMED DEDUCTION OF ENTIRE NET PROFIT ` 9,16,23,159/- U/S. 80IB(10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) ON ITS RESIDENTIAL PROJECT. THE CASE OF THE ASSESSEE WAS SELECT ED FOR SCRUTINY AND ACCORDINGLY NOTICE U/S. 143(2) WAS ISSUED TO THE ASSE SSEE ON 29- 08-2011. DURING THE COURSE OF SCRUTINY ASSESSMENT PRO CEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD ALLOTTED FLAT NOS. 15 AND 16 IN BUILDING-B, WING-A TO SHRI AJAY KATE. THE SAID FLAT S WERE HORIZONTALLY MERGED. FURTHER, FLAT NOS. 1 AND 2 ON 1 ST FLOOR IN BUILDING- A AND FLAT NOS. 5 AND 6 ON 3 RD FLOOR OF THE SAME BUILDING WERE ALLOTTED TO SHRI KISHORE PAHUJA. THE AFOREMENTIONED FLATS WERE ALS O HORIZONTALLY JOINED. FURTHER, THE ASSESSEE HAD ALLOTTED FLAT NOS. 3 AN D 4 ON THE 2 ND FLOOR, AND 7 AND 8 ON THE 4 TH FLOOR TO MS. MEENA PAHUJA. THE AFORESAID FLATS WERE ALSO HORIZONTALLY JOINED. THE ASSESSING OFFICER OB SERVED THAT SINCE THE ASSESSEE HAS VIOLATED THE CONDITION LAID DOWN U/ S. 80IB(10)(E), THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION U/ S. 80IB(10) 3 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 OF THE ACT. THUS, THE ASSESSING OFFICER MADE ADDITION OF ` 9,16,23,159/- IN THE INCOME RETURNED BY THE ASSESSEE VIDE ORDER DATED 28-03-2 013. AGGRIEVED BY THE ASSESSMENT ORDER DATED 28-03-2013, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE ASSESSEE ASSAILED THE FINDINGS OF ASSESSING OFFIC ER PRIMARILY ON THE GROUND THAT CLAUSE (E) TO SECTION 80IB(10 ) WAS INSERTED BY THE FINANCE ACT, 2009 W.E.F. 01-04-2010 WHICH IS APPLICA BLE FROM ASSESSMENT YEAR 2010-11. THE ASSESSEE HAD ENTERED IN TO AN AGREEMENT WITH THE VENDEES OF THE FLATS PRIOR TO 01-04-2010, THEREFO RE, THE AMENDED PROVISIONS WILL NOT BE APPLICABLE TO THE ASSESSEE. THE ASSESSEE MADE AN ALTERNATE PRAYER, WITHOUT PREJUDICE TO ITS PRIMARY SUBMISSIONS, PROPORTIONATE DEDUCTION U/S. 80IB(10) MAY BE G RANTED ON THE ELIGIBLE UNITS IN THE PROJECT. THE COMMISSIONER OF INCO ME TAX (APPEALS) AFTER ANALYZING THE FACTS OF THE CASE REJECTED T HE FIRST PRAYER OF THE ASSESSEE IN THE LIGHT OF THE AMENDMENT TO SECTION 80 IB(10) VIDE WHICH CLAUSE (E) AND (F) WERE INSERTED BY THE FINANCE ACT, 20 09. HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THA T THE ASSESSEE IS ELIGIBLE TO CLAIM PRORATA DEDUCTION U/S. 80IB(10) ON THE REMAINING UNITS. AGAINST THESE FINDINGS OF THE COMMISSIONER O F INCOME TAX (APPEALS), BOTH THE REVENUE AND THE ASSESSEE ARE IN APPEAL BEFORE THE TRIBUNAL. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUND IN ITS APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE CIT(A) HAS ERRED IN ALLOWING PRO-RATA DEDUCTION ON ELIGIBLE UNITS U/S 8 0IB(10) OF IT ACT 1961 FOR THE PROJECT THOUGH THE ASSESSEE HAS VIOLATED TH E CONDITIONS OF CLAUSE- E OF SECTION 80IB(10) OF I.T. ACT 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE CIT(A) HAS ERRED IN ALLOWING PRO-RATA DEDUCTION U/S 80IB(10) OF IT ACT 1961 TO THE PROJECT CONSISTING OF MERGED FLATS HAVING BUILD-UP AREA OF LESS THAN 1500 SQ. FT 4 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 AS WELL AS BUILT-UP AREA OF MORE THAN 1500 SQ. FT. ALTHOUGH THE SAME IS IN CONTRAVENTION OF PROVISIONS OF SECTION 80IB (10). 3. THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND MODIFY ANY OF THE ABOVE GROUNDS OF APPEAL. 4. SHRI S.K. RASTOGI REPRESENTING THE DEPARTMENT SUBMITTE D THAT THE ASSESSEE HAS VIOLATED THE MANDATORY CONDITION LAID DO WN U/S. 80IB(10) FOR CLAIMING DEDUCTION. THIS FACT HAS BEEN AFFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE IMPUGNED ORDER. DESPITE THE FACT THAT THE ASSESSEE HAS VIOLATED THE CONDITIONS FO R CLAIMING DEDUCTION, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRA NTED PRORATA RELIEF TO THE ASSESSEE. THERE IS NO CONCEPT OF P RORATA DEDUCTION UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. THE LD. DR VEHEMENTLY SUPPORTED THE FINDINGS OF THE ASSESSING OFFICER AND PRAYED FOR REVERSING THE FINDINGS OF THE COMMISSIONER OF INCOME TA X (APPEALS) IN SO FAR AS GRANT OF RELIEF ON PRORATA BASIS TO THE ASSESSEE. 5. ON THE OTHER HAND SHRI V.L. JAIN APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN RESTRICTING THE DEDUCTION U/S. 80IB(10) ON PRORAT A BASIS TO THE ASSESSEE. ADMITTEDLY, THE ASSESSEE HAD ALLOTTED MULTIPLE F LATS IN THE NAME OF SAME PERSONS/FAMILY MEMBERS OF THE SAME PERSON. HOWEVER, THESE FLATS WERE ALLOTTED PRIOR TO THE INSERTION OF CLAUSE (E ) AND (F) TO SECTION 80IB(10). THE LD. AR SUBMITTED THAT AS REGARDS A LLOTMENT OF FLATS TO SHRI AJAY KATE IS CONCERNED, THE SAME WERE ALLOTT ED IN ACCORDANCE WITH THE DEVELOPMENT AGREEMENT EXECUTED ON 30-11-2006. THE LAND ON WHICH THE PROJECT WAS DEVELOPED WAS OWNED BY SHRI AJAY KATE. THE FLATS WERE ALLOTTED TO HIM AS PART OF THE CONSID ERATION. WITH 5 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 REGARD TO THE SALE OF FLATS TO SHRI KISHORE PAHUJA AND M S. MEENA PAHUJA, A SEPARATE SALE AGREEMENTS WERE EXECUTED WITH THEM ON 06-04-2009. THE LD. AR DRAWS OUR ATTENTION TO THE AGR EEMENT TO SALE WITH SHRI KISHORE PAHUJA AT PAGES 27 TO 57 OF THE PAPER BOOK AND MS. MEENA PAHUJA AT PAGES 58 TO 88 OF THE PAPER BOOK. TH E LD. AR SUBMITTED THAT IT IS AN UNDISPUTED FACT THAT EACH RESIDEN TIAL UNIT IS HAVING A BUILT UP AREA HAVING 1500 SQ.FT. EVEN THOUGH THE RESIDENTIAL UNITS HAVE BEEN MERGED, BY THE VENDEES STILL THEY ARE IND EPENDENT FLATS AND HAVE BEEN APPROVED BY THE AUTHORITIES AS INDEPENDE NT UNITS. ALL THE UNITS HAVE INDEPENDENT ELECTRICITY CONNECTION AND ARE ASSESSED TO HOUSE TAX SEPARATELY. THE FLATS HAVE BEEN MERGED POST SALES. THE LD. AR CONTENDED THAT REGISTERED AGREEMENT TO SALE WERE EXECUTED WITH THE VENDEES OF THE FLAT PRIOR TO THE AMENDMENT BROUGHT IN BY THE FINANCE (NO. 2) ACT, 2009. THE FINANCE BILL WAS PASSED ON 1 9-08-2009 AND THE REGISTERED AGREEMENT TO SALE WERE EXECUTED ON 06-04-2009. THUS, THE PROVISIONS OF AMENDED SECTION 80IB(10) CANNOT BE APPLIED ON THE ASSESSEE. THE LD. AR IN SUPPORT OF HIS SUBMISSIONS PLA CED RELIANCE ON THE FOLLOWING DECISIONS: I. CIT VS. SARKAR BUILDERS, 119 DTR 241 (SC); II. M/S. B.U. BHANDARI NANDGUDE PATIL ASSOCIATES VS, ITO IN ITA NOS. 1438 & 1439/PN/2009 FOR ASSESSMENT YEARS 2005-06 AND 2006-07 DECIDED ON 31-10-2012; III. ACIT VS. M/S. SHRI OSTWAL BUILDERS LTD. IN ITA NOS. 7292 & 7293/PN/2008 FOR ASSESSMENT YEARS 2003-04 AND 2004-0 5 DECIDED ON 17-02-2010. THEREFORE, IN VIEW OF THE FACTS OF THE CASE THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) ON THE ENTIRE PROJECT. 6 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 5.1 THE LD. AR SUBMITTED THAT WITHOUT PREJUDICE TO HIS FIRST ARGUMENT THE ASSESSEE SUPPORTS THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN GRANTING PRORATA DEDUCTION ON THE ELIGIBLE RESIDE NTIAL UNITS. THE LD. AR FURTHER SUBMITTED THAT THE APPEAL OF THE REVE NUE IS WITHOUT MERITS. IT HAS BEEN REPEATEDLY HELD BY VARIOUS HON'BLE H IGH COURTS AND THE TRIBUNAL THAT THE ASSESSEE CAN BE GRANTED PRORATA DEDUCTION ON ELIGIBLE UNITS U/S. 80IB(10) OF THE ACT. IN SUPPORT OF HIS FINDIN GS THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. DCIT VS. EKTA HOUSING PVT. LTD., ITA NO. 3649/MUM/2009; II. DCIT VS. BRIGADE ENTERPRISES PVT. LTD. (BANG), 119 TTJ 269; III. BRAMHA ASSOCIATES VS. JCIT, ITA NO. 141/PN/2006; IV. SANGHVI & DOSHI ENTERPRISES VS. ITO (CHENNAI), 141 TTJ 1; V. CIT VS. ARUN EXCELLO FOUNDATION (P) LTD. (MAD), 86 DTR 99. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO CONSIDERED THE DOCUMENTS ON WHICH THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE. IT IS AN UNDISPUTED FACT T HAT THE ASSESSEE IN ITS HOUSING PROJECT SAI SAHEB HAS ALLOTTED MULTIPLE FLATS IN THE NAM E OF INDIVIDUAL PERSONS. THE FINANCE (NO.2) ACT, 2009 HAS INSER TED CLAUSE (E) AND (F) IN SECTION 80IB(10) OF THE ACT WHICH READS AS UNDER: 80IB(10) XXXXXXXXXXX (A) XXXXXXXX XXXXXXXXXXXXX (E) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSI NG PROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND (F) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSI NG PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UN IT IN SUCH HOUSING PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS , NAMELY: (I) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILD REN OF SUCH INDIVIDUAL, 7 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 (II) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIV IDUAL IS THE KARTA, (III) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDI VIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA. ACCORDING TO THE NEWLY INSERTED CLAUSES, THE ASSESSEE S HALL NOT BE ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) ON A PROJECT IF MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO ANY INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL, THE HUF WHEREIN SUCH INDIVIDUAL IS A KARTA. THE ABOVE CLAUSES WERE INSERT ED W.E.F. 01-04-2010. 7. IN THE PRESENT CASE UNDISPUTEDLY THE ASSESSEE HAS ALLOTTED FLAT NOS. 15 AND 16 IN BUILDING-B, TO SHRI AJAY KATE. FLAT NOS. 1 AND 2 ON 1 ST FLOOR AND FLAT NOS. 5 AND 6 ON 3 RD FLOOR IN BUILDING-A TO SHRI KISHORE PAHUJA. FLAT NOS. 3 AND 4 ON THE 2 ND FLOOR, AND 7 AND 8 ON THE 4 TH FLOOR TO MS. MEENA PAHUJA. THE ALLOTTEE SHRI KISHORE PAHUJA A ND MS. MEENA PAHUJA HAVE HORIZONTALLY JOINED THE FLATS ON THE RESPECT IVE FLOORS. THE ASSESSING OFFICER DENIED DEDUCTION U/S. 80IB(10) TO THE ASS ESSEE AS NEWLY INSERTED PROVISIONS OF SECTION 80IB(10) WERE VIOLATED. A PERUSAL OF THE DOCUMENTS ON RECORD WOULD SHOW THAT T HE ASSESSEE HAS ALLOTTED FLAT NOS. 15 AND 16 IN BUILDING-B TO SHRI AJAY KATE IN TERMS OF DEVELOPMENT AGREEMENT DATED 30-11-200 6. SHRI AJAY KATE WAS ONE OF THE CO-OWNERS OF THE LAND ON WHICH THE RESIDENTIAL PROJECT WAS DEVELOPED BY THE ASSESSEE. THE FLATS TO SH RI KISHORE PAHUJA WERE ALLOTTED VIDE REGISTERED AGREEMENT TO SELL EXECUTED ON 06-04-2009. SIMILARLY, FLATS TO MS. MEENA PAHUJA WERE ALLOTTED VIDE REGIST ERED AGREEMENT EXECUTED ON 06-04-2009. THE FINANCE BILL VIDE WHICH CLAUSES (E) AND (F) WERE INSERTED IN SECTION 80IB(10) WAS INTR ODUCED ON 8 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 07-06-2009 AND THE BILL WAS PASSED BY THE PARLIAMENT ON 19-08-2009 I.E. AFTER THE DATE OF EXECUTION OF AGREEMENT TO SELL BE TWEEN THE PARTIES. THUS, THE TRANSACTIONS WITH RESPECT TO THE SA LE OF FLATS WERE COMPLETE PRIOR TO THE INSERTION OF CLAUSE (E) AND (F) TO SECTI ON 80IB(10) BY THE FINANCE (NO. 2) ACT, 2009. HENCE, THE NEWLY INSERTE D PROVISIONS CANNOT BE APPLIED ON THE TRANSACTIONS WHICH WERE COMPLET E PRIOR TO THE INSERTION OF THE CLAUSES. THE AMENDMENTS PROPOSED BY T HE FINANCE BILL IN THE INCOME TAX ACT ARE ENFORCEABLE ONLY WHEN THE BILL IS PASSED BY THE PARLIAMENT AND GETS THE ACCENT OF THE PRESIDENT OF IN DIA. EVEN IF IT IS PRESUMED THAT AMENDMENTS PROPOSED BY THE FINANCE BILL A RE EFFECTIVE FROM DATE WHEN IT WAS PASSED BY THE PARLIAMENT, EVEN IN T HAT CASE THE TRANSACTIONS IN THE PRESENT CASE RELATING TO SALE OF FLATS WAS COMPLETE BEFORE THE PASSING OF THE FINANCE (NO. 2) ACT, 2009 ON 19-08-2009. 8. FURTHER, A PERUSAL OF EXPLANATORY NOTE TO THE PROVIS IONS OF THE FINANCE (NO. 2) ACT, 2009 WOULD SHOW, THAT THE RESTRICTIONS ON ALLOTMENT OF MULTIPLE RESIDENTIAL UNITS TO AN INDIVIDUAL WOULD N OT APPLY IN RESPECT OF ALLOTMENT MADE BEFORE 19-08-2009. THE RELEVANT EXTR ACT OF THE CBDT CIRCULAR NO. 5 OF 10 DATED 03-06-2010 READS AS UNDER: 33.8 APPLICABILITY - THESE AMENDMENTS HAVE BEEN MADE APPLICABLE WITH EFFECT FROM 1 ST APRIL, 2010 AND WILL ACCORDINGLY APPLY IN RELATION TO ASSESSMENT YEAR 2010-11 AND SUBSEQUENT YEARS. THE A MENDMENTS RELATE TO RESTRICTIONS ON SPECIFIC TRANSACTIONS (I. E., ALLOTMENT OF RESIDENTIAL UNITS). THEREFORE, THEY WOULD APPLY TO TRANSACTIONS AFTER A SPECIFIED DATE DURING THE YEAR. SINCE THE FINANCE (NO.2) ACT, 2009 BECAME LAW ON 19 TH AUGUST, 2009, THE RESTRICTIONS REGARDING ALLOTMENT OF RESIDENTIAL UNITS SHALL NOT APPLY IN RESPECT OF ALLOTMENTS MADE BEFOR E 19.08.2009. 9. THUS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE CBDT CIRCULAR CLARIFYING THE APPLICABILITY OF THE AMENDED PROVISIONS, WE ARE OF THE CONSIDERED OPINION THAT THE PROVISIONS OF CLAUSES (E) AN D (F) TO 9 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 SECTION 80IB(10) OF THE ACT CANNOT BE APPLIED TO THE TRANSACTIONS CAR RIED OUT BEFORE 19-08-2009 AND ACCORDINGLY DEDUCTION U/S. 80 IB(10) CANNOT BE DENIED TO THE ASSESSEE ONLY FOR THE REASON THAT MU LTIPLE RESIDENTIAL UNITS WERE ALLOTTED TO AN INDIVIDUAL PRIOR TO THE AFORESAID DATE. ACCORDINGLY, WE FIND MERIT IN THE APPEAL OF THE ASSESSEE AN D THE SAME IS ALLOWED. ITA NO. 991/PN/2014 (REVENUES APPEAL ) 10. THE REVENUE IN ITS APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING PROPORTIONATE DEDUCTION TO THE ASSESSEE IN RESPECT OF ELIGIBLE UNITS OF HOUSING PROJECT. THE CONTENTION OF REVENUE IS THAT THERE IS NO CONCEPT OF ALLOWING PROPORTIONATE DEDUCTION U/S. 80IB(10) TO A HOUSING PROJEC T. WE DO NOT FIND ANY MERIT IN THIS PLEA OF THE REVENUE. THE TRIBUNAL IN NUMEROUS CASES HAS ALLOWED PROPORTIONATE DEDUCTION U/S. 80IB(10) ON ELIGIBLE UNITS OF A HOUSING PROJECTS AND THE SAME HAVE BEEN UPH ELD BY THE HON'BLE HIGH COURTS. THUS, THE QUESTION WHETHER PROPORT IONATE DEDUCTION CAN BE ALLOWED U/S. 80IB(10) TO THE ELIGIBLE UNITS OF A HOUSING PROJECT IS NO MORE RES-INTEGRA. 11. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS . ARUN EXCELLO FOUNDATION (P) LTD. (SUPRA) HAS GRANTED PROPORTIONATE DEDUCT ION TO THE HOUSING PROJECT U/S. 80IB(10). THE HON'BLE MADRA S HIGH COURT IN THE CASE OF VISWAS PROMOTERS PRIVATE LIMITED VS. ACIT REPORTED AS 81 DTR (MAD) 68 HAS HELD THAT THE ASSESSEE IS ENTITLED TO CLA IM PROPORTIONATE RELIEF ON THE UNITS SATISFYING THE EXTENT O F BUILT UP AREA. THE RELEVANT EXTRACT OF THE JUDGMENT READS AS UNDER: 14. ON THE FACTS ADMITTED BY THE REVENUE, IN THE P ROJECTS 'AGRINI' AND 'VAJRA', THERE ARE NUMBER OF FLATS WHICH ARE BELOW 1500 SQ.FT., AND THE RELEVANT BUILT-UP AREA REQUIREMENT IS SPECIFIED UND ER SECTION 80IB(10) (C) 10 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 OF THE INCOME TAX ACT. THUS, THE BUILT-UP AREA IN S OME OF THE FLATS IN BOTH THESE PROJECTS ARE IN EXCESS OF 1500 SQ.FT., I.E., 32 FLATS IN AGRINI AND ONLY ONE FLAT IN VAJRA AND THAT THE ASSESSEE HAD NOT CLA IMED ANY DEDUCTION ON THIS. WE HOLD THAT THE TRIBUNAL IS NOT CORRECT IN I TS VIEW, THAT BY REASON OF THESE UNITS BEING IN EXCESS OF 1500 SQ.FT., THE ENT IRE CLAIM OF THE ASSESSEE IN RESPECT OF THESE TWO PROJECTS WOULD STA ND REJECTED UNDER SECTION 80IB(10) OF THE INCOME TAX ACT. THUS, GOING BY THE DEFINITION OF 'HOUSING PROJECT' UNDER EXPLANATION TO SECTION 80HH BA OF THE ACT AS REFERRED TO ABOVE AS THE CONSTRUCTION OF 'ANY BUILD ING' AND THE WORDINGS IN SECTION 80IB(10) OF THE ACT, THE QUESTION OF REJ ECTION IN ENTIRETY OF THE PROJECT ON ACCOUNT OF ANY ONE OF THE BLOCKS NOT COM PLYING WITH THE CONDITIONS, DOES NOT ARISE. EVEN IN THE CASE OF EAC H ONE OF THE BLOCKS, WHEREVER THERE ARE FLATS WHICH SATISFIED THE CONDIT IONS PARTICULARLY OF THE NATURE STATED UNDER SECTION 80IB(10) (C) OF THE ACT , WE HAVE ALREADY UPHELD THE CASE OF THE ASSESSEE IN T.C. NOS.1348 AN D 1349 OF 2007 DATED 10.10.2012 FOR GRANT OF RELIEF UNDER SECTION 80IB(10) OF THE ACT ON A PROPORTIONATE BASIS, BY FOLLOWING THE DECISION OF THE BOMBAY HIGH COURT IN CIT V. BRAHMA ASSOCIATES [2011] 333 ITR 28 9/197 TAXMAN 459/9 TAXMANN.COM 289. THUS APPLYING THE DECISION O F THIS COURT IN T.C. NOS. 1348 AND 1349 OF 2007 DATED 10.10.2012, WE HOL D THAT THE ASSESSEE IS ENTITLED TO SUCCEED BOTH ON THE PRINCIP LE OF PROPORTIONALITY AS WELL AS BY REASON OF THE CONSTRUCTION ON THE MEANIN G OF THE EXPRESSION 'HOUSING PROJECT' AS REFERRING TO CONSTRUCTION OF A NY BUILDING AND THE WORDINGS IN SECTION 80IB(10) OF THE ACT. IN THE CIR CUMSTANCES, WE HOLD THAT THE MERE FACT THAT ONE OF THE BLOCKS HAVE UNIT S EXCEEDING BUILT-UP AREA OF 1500 SQ.FT, PER SE, WOULD NOT RESULT IN NUL LIFYING THE CLAIM OF THE ASSESSEE FOR THE ENTIRE PROJECTS. CONSEQUENTLY, IN RESPECT OF EACH OF THE BLOCKS, THE ASSESSEE IS ENTITLED TO HAVE THE BENEFI T OF DEDUCTION IN RESPECT OF RESIDENTIAL UNITS SATISFYING THE REQUIREMENT UND ER SECTION 80IB(10) (C) OF THE ACT. IN SO HOLDING, WE ALSO AGREE WITH THE D ECISION OF THE BOMBAY HIGH COURT IN CIT V. VANDANA PROPERTIES [2012] 206 TAXMAN 584/19 TAXMANN.COM 316, WHICH WAS DECIDED BY THE BOMBAY HI GH COURT ON SIMILAR LINES AS IN THE ASSESSEE'S CASE BEFORE US. SIMILAR VIEW WAS TAKEN BY THE TRIBUNAL IN THE CASE OF SANG HVI AND DOSHI VS. ITO REPORTED AS 18 ITR (TRIB.) 608. THE HO N'BLE MADRAS HIGH COURT IN APPEAL CIT VS. SANGHVI AND DOSHI ENTERPRISES REPORTED AS 29 TAXMANN.COM, 386 (MAD.) HAS AFFIRMED THE VIEW TAKEN BY THE TRIBUNAL. 11 ITA NOS. 991 & 1015/PN/2014, A.Y. 2010-11 12. BE THAT AS IT MAY, WE HAVE ALLOWED THE APPEAL OF ASSES SEE AND HAVE HELD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION IN RESPECT OF THE RESIDENTIAL UNITS ON WHICH THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DENIED PROPORTIONATE DEDUCTION. THUS, IN VIEW OF OUR ABOVE FINDINGS, THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S . 80IB(10) ON THE ENTIRE PROJECT. ACCORDINGLY, THE APPEAL OF THE RE VENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED A ND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 15 TH DAY OF FEBRUARY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 15 TH FEBRUARY, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-CENTRAL, PUNE 4. ' / THE CIT, CENTRAL, PUNE 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE