Omkar Constructions, Pune V. Income-tax Officer,

ITA 1031/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9092 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-12-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 16-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA VIVEK AGGARWAL
• Assessee Lawyers: DR SUNIL PATHAK
• Keywords: Value adopted by valuation officer; Depreciation; Revised return
• Section: 143(3); 133(6); 139(5); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO S . 1031 TO 1033 /P U N/20 1 5 / ASSESSMENT YEAR S : 20 0 8 - 09 TO 2010 - 11 OMKAR CONSTRUCTIONS, LAXMI COMPLEX, OFFICE NO.210, 2 ND FLOOR, OPP. D. MART, CHINCHWAD, PUNE 411019 . / APPELLANT PAN: AAAFO8738R VS. THE INCOME TAX OFFICER, WARD 8(3), PUNE . / RESPONDENT / APPELLANT BY : DR. SUNIL PATHAK / RESPONDENT BY : S /S HRI MUKESH JHA / VIVEK AGGARWAL / DATE OF HEARING : 13 . 12 .2017 / DATE OF PRONOUNCEMENT: 12 . 0 3 .201 8 / ORDER PER SUSHMA CHOWLA, JM: THIS BUNCH OF THREE APPEAL S FILED BY THE ASSESSEE ARE AGAINST SEPARATE ORDER S OF CIT(A) , PUNE - 6 , ALL DATED 15 . 04 .2015 RELATING TO ASSESSMENT YEAR S 2008 - 09 TO 2010 - 11 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS 2 . TH IS BUNCH OF APPEALS FILED BY THE SAME ASSESSEE ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, IN ORDER TO ADJUDICATE THE ISSUES, REFERENCE IS BEING MADE TO THE FACTS IN ITA NO. 1031 /PUN/201 5 , RELATING TO ASSE SSMENT YEAR 2008 - 09 . 3. THE ASSESSEE IN ITA NO. 1031 /PUN/201 5 , RELATING TO ASSESSMENT YEAR 200 8 - 0 9 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S 80IB(10) OF RS.57,34,420/ - CLAIMED IN RESPECT OF THE PROFITS OF THE PROJECT 'ABHIJEET PARK' LOCATED AT THERGAON, PUNE. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE REVISED RETURN FILED BY THE ASSESSEE WAS NOT VALID AND ACCORDINGLY, THE CLAIM OF DEDUCTION MADE U/S 80IB(10) IN THE REVISED RETURN COULD NOT BE ALLOWED TO THE ASSESSEE FIRM. 3] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE REVISED RETURN FILED BY THE ASSESSEE WAS VALID AND IN ACCORDANCE WITH THE PROVISIONS LAID DOWN IN SECTION 139(5) AND THEREFORE, T HE DEDUCTION CLAIMED U/S 80IB(10) IN THE REVISED RETURN SHOULD HAVE BEEN ALLOWED TO THE ASSESSEE FIRM. 4] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE TOTAL COMMERCIAL AREA IN THE HOUSING PROJECT WAS MORE THAN 2,000 SQ.FT. AND ACCORDINGLY, THE ASSESSEE HAD VIOLATED THE PROVISIONS OF CLAUSE (D) OF SECTION 80IB(10) AND HENCE, THE DEDUCTION U/S 80IB(10) WAS RIGHTLY DENIED BY THE LEARNED A.O. 5] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE ASSESSEE FIRM HAS SATISFIED ALL THE CONDITIONS LAID DOWN IN SECTION 80IB(10) AND HENCE, THE DEDUCTION OUGHT TO HAVE BEEN GRANTED TO THE ASSESSEE. 6] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT AS PER FINANCE ACT, 2010, THE PERMITTED AREA OF COMMERCIAL UNITS IN THE HOUSING PROJECT WAS 3 OF THE TOTAL BUILT UP AREA OR 5,000 SQ.FT. WHICHEVER IS HIGHER AND HENCE, AS THE ASSESSEE HAD CONSTRUCTED COMMERCIAL AREA OF ONLY 2772.05 SQ.FT., THERE WAS NO REASON TO DENY THE CLAIM MADE BY THE ASSESSEE. 7] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE AMENDMENT PER MITTING HIGHER COMMERCIAL AREA WAS APPLICABLE TO THE PROJECT CONSTRUCTED BY THE ASSESSEE AND HENCE, THE DEDUCTION U/S 80IB(10) SHOULD HAVE BEEN ALLOWED. 4. THE ASSESSEE DURING THE COURSE OF HEARING HAS ALSO RAISED ADDITIONAL GROUND OF APPEAL FOR ALLOWING PRORATA DEDUCTION UNDER SECTION 80IB(10) OF THE ACT 3 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS IN RESPECT OF RESIDENTIAL UNITS AND THE COMMERCIAL PORTIONS ADMEASURING 2000 SQ.FT. IN HOUSING PROJECT. THE ADDITIONAL GROUND OF APPEAL READ S AS UNDER: - 1] THE LEARNED CIT(A) ERRED IN NOT GRANTING THE DE DUCTION U/S 80IB(10) ON A PRO RATA BASIS IN RESPECT OF THE RESIDENTIAL UNITS AND THE COMMERCIAL PORTION ADMEASURING 2000 SQ.FT. IN THE HOUSING PROJECT ABHIJIT PARK. 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF 57,34,420/ - ON 18.09.2008. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, ON 29.03.2010, THE ASSESSEE FILED REVI SED RETURN OF INCOME CLAIMING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AT 57,34,418/ - AND THE INCOME WAS DECLARED AT NIL. THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD SHOWN RECEIPTS ON ACCOUNT OF SALE OF FLATS IN RESPECT OF PROJECT ABHIJEET PARK LOCATED AT S.NO.22/5/3, THERGAON, PUNE. THE TOTAL RECEIPTS SHOWN DURING THE YEAR WERE 3,47,54,073/ - , ON WHICH NET PROFIT WAS SHOWN AT 57,34,418/ - AFTER CLAIMING DEPRECIATION AND REMUNERATION TO TH E PARTNERS. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AT 57,34,418/ - . THE ASSESSING OFFICER NOTED THE FOLLOWING FACTS OF THE CASE: - (A) AS PER FORM NO.10CCB ENCLOSED WITH THE AUDIT REPORT THE SAID HOUSING PROJECT WAS COMMENCE D ON 15/06/2005. (B) THE DATE OF COMPLETION OF HOUSING PROJECT: APPLICATION MADE (C) THE SIZE OF PLOT OF LAND OF THE PROJECT: 5527.50 SQ.MTRS. [I.E. AREA OF LAND EXCEEDS 1 ACRE] (D) TOTAL BUILTUP AREA OF THE SHOP OR OTHER COMMERCIAL ESTABLISHMENTS : 258.25 SQ.MTRS. 6. THE ASSESSING OFFICER OBSERVED THAT THE YEAR UNDER CONSIDERATION WAS THE THIRD ASSESSMENT YEAR OF ASSESSEES FIRM AND DURING THE LAST TWO YEARS I.E. ASSESSMENT YEARS 2006 - 07 AND 2007 - 08, THE ASSESSEE HAD NOT CLAIMED ANY DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. HOWEVER, DURING THE YEAR UNDER CONSIDERATION, THE SAID DEDUCTION WAS CLAIMED FOR THE FIRST TIME, WHICH ALSO WAS 4 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS NOT CLAIMED IN ORIGINAL RETURN OF INCOME FILED ON 18.09.2008. THE ASSESSEE WAS ASKED TO SUBSTANTIATE ITS CLAIM OF AFORESAID DEDUCTION WITH DOCUMENTARY EVIDENCE AND ALSO TO EXPLAIN HOW IT WAS ELIGIBLE FOR CLAIMING THE AFORESAID DEDUCTION. THE ASSESSEE EXPLAINED THAT DUE TO OVERALL RESTRICTION OF COMMERCIAL CONSTRUCTION COMPONENT IN THE PROJECT, THE ASSESSEE HAD NOT CLAIMED ANY BENEFIT U NDER SECTION 80IB(10) OF THE ACT. HOWEVER, THE RESTRICTION WAS REMOVED BY THE AMENDMENT CARRIED OUT BY THE FINANCE ACT, 2010 AND THE PROJECT BECAME ELIGIBLE TO CLAIM THE DEDUCTION. HENCE, THE RETURNS OF INCOME FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 WER E REVISED. THE ASSESSEE ALSO EXPLAINED THAT ITS PROJECT ABHIJIT PARK COMPRISED OF SIX BUILDINGS, WHEREIN THE CONSTRUCTION WAS MADE IN PHASED MANNER. DURING THE YEAR UNDER APPEAL, THE ASSESSEE HAD COMPLETED AND SOLD PHASE - II OF CONSTRUCTION COMPRISING O F FLATS IN BUILDING NOS.2 AND 3 AND STARTED UPON CONSTRUCTION AND SELLING OF PHASE - III OF PROJECT COMPRISING OF FLATS IN BUILDING NOS.4 AND 5. PRIOR TO THIS, THE ASSESSEE HAD COMPLETED AND SOLD FLATS IN PROJECT KNOWN AS OMKAR PARK IN THE EARLIER YEARS. THE ASSESSEE ALSO POINTED OUT THAT COMMERCIAL AREA CONSTRUCTED WAS MORE THAN THE UPPER CEILING OF 2000 SQ.FT. AND SINCE BY FINANCE ACT, 2010, THE MINIMUM AREA OF COMMERCIAL CONSTRUCTION WAS ENHANCED TO 5000 SQ.FT., HENCE THE FIRM BECAME ELIGIBLE TO CLAIM THE AFORESAID DEDUCTION. FURTHER, ELABORATE SUBMISSIONS WERE MADE BY THE ASSESSEE TO JUSTIFY ITS CLAIM OF DEDUCTION. 7. THE ASSESSING OFFICER VIDE PARA 5.4 NOTES THAT COPIES OF SANCTIONED PLAN AND FIRST COMMENCEMENT CERTIFICATE AND COMPLETION CERTIFICAT E WERE CALLED FOR FROM THE LOCAL AUTHORITY I.E. PIMPRI CHINCHWAD MUNICIPAL CORPORATION, UNDER SECTION 133(6) OF THE ACT VIDE OFFICE LETTER DATED 30.11.2010. FURTHER, REFERENCE WAS ALSO MADE TO THE GOVT. APPROVED VALUER VIDE OFFICE LETTER DATED 03.12.2010 FOR TAKING MEASUREMENTS. THE GOVT. VALUER SUBMITTED HIS REPORT WHICH IS 5 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS ENCLOSED AS ANNEXURE TO THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS TABULATED THE POINTS OF REPORT OF THE GOVT. VALUER UNDER PARA 5.4, WHEREIN THE ASSESSEE HAS BUILT 2732.11 SQ.F T. OF COMMERCIAL AREA IN THE PROJECT AS AGAINST MAXIMUM LIMIT OF 2000 SQ.FT. THE ASSESSING OFFICER NOTES THAT THIS FACT WAS ALSO ADMITTED BY THE ASSESSEE IN ITS SUBMISSIONS FILED ON DIFFERENT DATES. IN VIEW OF THE PROVISIONS OF THE ACT, THE ASSESSING OFF ICER HELD THAT THERE WAS NO MERIT IN THE SUBMISSIONS MADE BY THE ASSESSEE. THE THRUST OF ASSESSEE WAS THAT AS PER THE AMENDMENT DONE BY THE FINANCE ACT, 2010 IN THE RELEVANT CLAUSE OF SECTION 80IB(10)(D) OF THE ACT, THERE WAS ENHANCEMENT IN THE BUILT UP A REA OF SHOPS AND COMMERCIAL CONTENT, IN THE HOUSING PROJECT. PRIOR TO THIS AMENDMENT, THERE WAS UPPER LIMIT OF 5 % OF TOTAL BUILT UP AREA O R 2000 SQ.FT., WHICHEVER WAS LESS FOR SHOPS OR COMMERCIAL CONTENT IN A HOUSING PROJECT AND AFTER AMENDMENT, THIS LIMI T WAS INCREASED TO 3% OF TOTAL BUILT UP AREA OR 5000 SQ.FT., WHICHEVER IS HIGHER. THIS AMENDMENT WAS MADE APPLICABLE TO ALL THE PROJECTS APPROVED AFTER 01.04.2005 TILL 31.03.2008 BUT THE MEMORANDUM FORMING PART OF FINANCE BILL 2010 EXPLAINS THAT THE BENEF IT OF ENHANCED COMMERCIAL BUILT UP LIMITS WOULD BE AVAILABLE TO THE PROJECTS WHICH ARE APPROVED AFTER 01.04.2005 BUT WHICH WERE PENDING FOR COMPLETION , IN RESPECT OF INCOME RELATING TO ASSESSMENT YEAR 2010 - 11 AND SUBSEQUENT YEARS. THE CASE OF ASSESSEE IN THIS REGARD WAS THAT THOUGH THE MEMORANDUM TALKS OF SUCH A RESTRICTION BUT THIS INHIBITION WAS TOTALLY ABSENT IN THE ENACTMENT AND THERE IS NO EXPLANATION OR PROVISO INSERTED IN THIS REGARD. THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE CONTENTION OF ASS ESSEE AND HELD THE ASSESSEE NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. ON WITHOUT PREJUDICE BASIS, THE ASSESSEE HAD ALSO CONTENDED THAT IT WAS ELIGIBLE FOR CLAIMING PRORATA DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE SAID WAS ALSO DENIED TO THE ASSESSEE AND INCOME FROM BUSINESS WAS ASSESSED 6 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS IN THE HANDS OF ASSESSEE. ANOTHER POINT NOTED WAS THE AREA OF PLOT, WHEN THE PROJECT WAS STARTED, BEING LESS THAN ONE ACRE. 8. THE CIT(A) FIRST CONSIDERED THE ASPECT OF ASSESSEE MAKING CLAIM FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN THE REVISED RETURN OF INCOME FILED. REFERENCE WAS MADE TO PROVISIONS OF SECTION 139(5) OF THE ACT AND OBSERVED THAT THE R EVISED RETURN OF INCOME COULD BE FILED IN CASE ANY PERSON DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT IN THE ORIGINAL RETURN OF INCOME. HE HELD THAT THERE WAS NO SUCH OMISSION OR WRONG STATEMENT IN THE ORIGINAL RETURN OF INCOME. HE FURTHER OBSERVED THA T THE TRIGGER FOR FILING REVISED RETURN OF INCOME WAS THE AMENDMENT DONE BY THE FINANCE ACT, 2010 , AS PER WHICH THE ENHANCEMENT IN THE BUILT UP AREA OF SHOPS AND COMMERCIAL CONTENT, IN THE HOUSING PROJECT WAS MADE. EARLIER, UPPER LIMIT WAS 5% OF TOTAL BUI LT UP AREA OR 2000 SQ.FT., WHICHEVER WAS LESS. HOWEVER, THIS WAS INCREASED TO 3% OR TOTAL BUILT UP AREA O R 5000 SQ.FT., WHICHEVER IS HIGHER. THE CIT(A) NOTED THAT LAST COMPLETION CERTIFICATE TO THE ASSESSEE WAS ISSUED ON 31.03.2010 AND AMENDMENT BEING AP PLICABLE FROM ASSESSMENT YEAR 2010 - 11 FOR THE PROJECTS PENDING AS ON 01.04.2010 WAS NOT AVAILABLE TO THE ASSESSEE. THE PLEA OF ASSESSEE THAT THE AMENDMENT WAS RETROSPECTIVE WAS ALSO REJECTED. THE CIT(A) ALSO DENIED PRORATA DEDUCTION CLAIMED BY THE ASSESS EE ON WITHOUT PREJUDICE BASIS ON THE GROUND THAT THE ASSESSEE HAS BREACHED CLAUSE (D) OF SECTION 80IB(10) OF THE ACT. 9. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 10. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT FO R ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 IN THE ORIGINAL RETURNS OF INCOME, NO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS CLAIMED BUT THE SAID CLAIM WAS 7 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS MADE IN THE REVISED RETURNS OF INCOME FILED BY THE ASSESSEE. HE FURTHER POINTED OUT THAT THE CIT(A) HAS DENIED THE CLAIM AS ORIGINALLY THE SAID DEDUCTION WAS NOT CLAIMED BY THE ASSESSEE AND HENCE NOT ENTITLED BY WAY OF REVISED CLAIM. THE SECOND ASPECT OF DENIAL OF 80IB(10) DEDUCTION WAS THE COMMERCIAL AREA IN ABHIJIT PARK PROJECT WHICH WAS EXCEEDING 2000 SQ.FT., AS PER THE CIT(A) HENCE NOT ENTITLED TO THE DEDUCTION. THE THIRD WAS THE LAND WHICH WAS LESS THAN ONE ACRE WHEN THE FIRST DEVELOPMENT OF PROJECT WAS STARTED. HOWEVER, THE ASSESSEE CLAIMS TO HAVE TAKEN FURTHER AREA FOR DEVELOPMENT AND WHEN CO MPLETED, THE ASSESSEE HAD FULFILLED THE CONDITION OF ONE ACRE OF TOTAL AREA. OUR ATTENTION WAS DRAWN TO PAGE 9 OF PAPER BOOK, WHERE PLANS / BUILDING PLANS I.E. FIRST PLAN WHICH WAS PASSED WHEREIN AS AGAINST TOTAL AREA OF 5373.23 SQ.MTRS., THE AREA FOR DEV ELOPMENT WAS 2322.56 SQ.MTRS. THEN, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO PAGE 10 OF PAPER BOOK, WHEREIN THE SECOND DEVELOPMENT PLAN WAS SANCTIONED ON 07.06.2006 WHERE THE AREA FOR DEVELOPMENT WAS 5133.580 SQ.MTRS. I.E. MORE T HAN ONE ACRE. HE FURTHER ADMITTED THAT WHEN THE PROJECT WAS STARTED, THE AREA WAS LESS THAN ONE ACRE BUT THE ASSESSEE DEVELOPED MORE THAN ONE ACRE OF PLOT AND COMPLETED THE PROJECT ON PLOT MORE THAN ONE ACRE. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF KARNATAKA IN CIT & ANR. VS. MYSTIC INVESTMENTS REPORTED IN 78 DTR (KAR) 202, WHEREIN ALSO LAND WAS ACQUIRED ON A LATER DATE TO MAKE IT COMPLETE ONE ACRE AND DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS ALLOWED TO THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO PAGE 22 ONWARDS OF PAPER BOOK WITH ENGLISH TRANSLATION OF DOCUMENT, WHEREIN IN THE FIRST PART, THE ASSESSEE ACQUIRED 2332.42 SQ.MTRS. ON 25. 0 1 .2005 . THEREAFTER, THERE WAS SECOND AGREEMEN T WHEREIN SECOND PART WAS ACQUIRED ON 24.01.2006 MEASURING 2323.42 SQ.MTRS., COPY OF WHICH IS PLACED AT PAGES 76 8 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS ONWARDS OF PAPER BOOK. THE ASSESSEE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE MUMBAI BENCH OF TRIBUNAL IN HAWARE ENGINEERS & BUILDERS PVT. LTD. IN ITA NO.6431/MUM/2007, RELATING TO ASSESSMENT YEAR 2004 - 05, ORDER DATED 30.03.2011, WHEREIN IT WAS HELD THAT IF AT THE TIME OF CLAIM OF DEDUCTION, THE CONDITIONS WERE FULFILLED THEN THE ASSESSEE WAS ENTITLED TO THE SAID CLAIM OF DEDUCTION. FURTHER , RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN BABA PROMOTERS & DEVELOPERS VS. ITO (2012) 54 SOT 89 (URO), WHEREIN ON A LATER DATE AREA WAS ACQUIRED TO MAKE THE PLOT AREA TO BE ONE ACRE AND 80IB(10) DEDUCTION WAS ALLOWED. IN RES PECT OF ISSUE OF MAKING THE CLAIM IN REVISED RETURN OF INCOME, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THE CLAIM IN REVISED RETURN OF INCOME DOES NOT PROHIBIT FOR CLAIMING THE AFORESAID DEDUCTION. MAY BE THE ASSESSEE WAS NOT A DVISED PROPERLY AT THE TIME OF FILING ORIGINAL RETURN OF INCOME AND HENCE, THE REVISED CLAIM. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY MUMBAI BENCH OF TRIBUNAL IN DCIT VS. KAMDHENU BUILDERS AND DEVELOPERS IN ITA NO.7010/MUM/2010, RELATING TO ASSESSMENT YEAR 2007 - 08, ORDER DATED 27.01.2016. 11. COMING TO THE THIRD ASPECT OF THE ISSUE I.E. COMMERCIAL AREA BEING 273 2.11 SQ.FT. , IT WAS STRESSED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT 80IB(10) DEDUCTION TALKS OF PROJECTS APPROVED BEFORE 31.03.2008. CLAUSE (D) OF SECTION 80IB(10) OF THE ACT TALKS OF BUILT UP AREA AS PER AMENDMENT W.E.F. 01.04.201 0. THE SAID CLAUSE (D) WAS INTRODUCED W.E.F. 01.04.2005 WITH A CAP OF COMMERCIAL AREA AT 2000 SQ.FT. THE COURTS IN THIS REGARD HELD THAT AMENDMENT WAS APPLICABLE FROM 01.04.2005 A S EARLIER THERE WAS NO SUCH RESTRICTION. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. HAPPY HOME ENTERPRISES (2015) 372 ITR 1 (BOM). HE THUS, STRESSED THAT SUBSTANTIVE AMENDMENTS HAD TO TAKE EFFECT FROM ASSESSMENT YEARS BUT 9 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS INCENTIVE PROVISIONS ARE TO BE MADE EFFECTIVE FROM THE DATE OF AMENDMENT I.E. 01.04.2005. SINCE SECTION 80IB(10) OF THE ACT WAS AN INCENTIVE PROVISION, THEN IT HAS TO BE INTERPRETED LIBERALLY. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN BAJAJ TEMPO LTD. VS. CIT (1992) 196 ITR 189 (SC) IN THIS REGARD. HE FURTHER STRESSED THAT THE AMENDMENT HAD TO BE MADE WORKABLE. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN CIT VS. NATIONAL TAJ TRADERS (1980) 121 ITR 535 (SC) FOR THE PROPOSITION THAT WHERE LITERAL CONSTRU CTION LEADS TO ABSURDITY, THEN THE SAME HAS TO BE DISREGARDED. HE FURTHER RELIED ON THE PRINCIPLES OF STATUTORY INTERPRETATIONS BY SHRI G.P. SINGH, 11 TH EDITION ON THE PRINCIPLE OF INTERPRETATION OF STATUTE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THUS, PROPOSED THAT TO MAKE AMENDMENTS WORKABLE AND TO BE APPLIED TO PROJECTS APPROVED BEFORE 2008, THEN DEDUCTION HAS TO BE ALLOWED TO THE ASSESSEE. IN RESPECT OF ADDITIONAL GROUND OF APPEAL, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSE E POINTED OUT THAT WHERE THE ASSESSEE HAS CLAIMED PRORATA DEDUCTION ON COMMERCIAL AREA AND IN CASE THE TERM PROJECT WAS NOT DEFINED, THEN WHATEVER SPECIFIED CONDITION , WOULD ENTITLE THE PERSON TO CLAIM DEDUCTION. RELIANCE WAS PLACED ON FOLLOWING DECISIO NS: - I) M/S. SAI HOMES VS. ACIT IN ITA NO.5836/M/2012, RELATING TO ASSESSMENT YEAR 2006 - 07 & ORS., ORDER DATED 31.03.2017 II) VISWAS PROMOTERS PVT. LTD. VS. ACIT (2013) 81 DTR 68 (MAD) 1 2 . HE FURTHER STRESSED THAT CLAUSES (C) AND (D) TO SECTION 80IB(10) OF THE ACT WERE THE BASIC CONDITIONS OF SAID SECTION AND IF CLAUSE (C) IS VIOLATED, THEN PRORATA DEDUCTION IS ALLOWED TO THE ASSESSEE, SO WHY NOT FOR CLAUSE (D)? IN THIS REGARD, HE REFERRED TO THE RATIO LAID DOWN BY HONBLE HIGH COURT OF MADRAS IN CIT VS. ARUN EXCELLO FOUNDATION (P.) LTD. (2013) 86 DTR 99 (MAD) , WHEREIN THE ASSESSEE CLAIMED PRORATA DEDUCTION IN RESPECT OF RESIDENTIAL AREA FOR VIOLATION OF SECTION 80IB(10)( C ) OF THE ACT. HE STRESSED THAT IN THE PRESENT CASE THE ASSESSEE 10 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS HAD CLAIMED DEDUCTION BOTH FOR RESIDENTIAL AND COMMERCIAL AREA AND THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION UP TO COMMERCIAL AREA OF 2000 SQ.FT. FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. AS FAR AS ASSESSMENT YEAR 2010 - 11 IS CONCERNED, BECAUSE OF AMEND MENT IN THE ACT, THE SAME COULD BE ALLOWED TO THE ASSESSEE. 1 3 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE REFERRED TO THE CIRCULAR NO.1/2011 , DATED 06.04.2011 AND POINTED OUT THAT AMENDMENT WAS MADE FOR PROJECTS WHICH WE RE PENDING AS ON 01.04.2010. HOWEVER, THE PROJECT OF ASSESSEE WAS COMPLETED ON 31.03.2010. SINCE THE AMENDMENT WAS ONLY FOR PENDING PROJECTS AND WHERE THE ASSESSEES PROJECT WAS NOT PENDING, IT WAS NOT ENTITLED TO CLAIM THE DEDUCTION. REFERENCE WAS ALSO MADE TO MEMORANDUM WHICH ALSO TALKS OF PENDING PROJECTS. THE COMMERCIAL PART OF PROJECT WAS COMPLETED IN 2007. COMING TO THE NEXT ASPECT OF REVISED RETURN OF INCOME, THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE RELIED ON THE RATIO LAID DOWN B Y THE HONBLE HIGH COURT OF DELHI IN NATH BROTHERS EXIM INTERNATIONAL LTD. VS. UNION OF INDIA (2017) 394 ITR 577 (DEL), WHEREIN THE DEDUCTION CLAIMED UNDER SECTION 10B R.W.S. 80A(5) OF THE ACT , IT WAS HELD THAT WHEN NOT CLAIMED IN ORIGINAL RETURN OF INCOME , NO DEDUCTION IS TO BE ALLOWED. THE THIRD ASPECT WHICH WAS ADDRESSED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE WAS THE PLOT BEING LESS THAN ONE ACRE ; WHERE THE DVO REPORT ALSO TALKS ABOUT PLOT BEING LESS THAN ONE ACRE. REFERENCE WAS MAD E TO THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN CIT VS. M/S. SARKAR BUILDERS IN CIVIL APPEAL NO.4476 OF 2015 ALONG WITH OTHER APPEALS, JUDGMENT DATED 15.05.2015, WHEREIN AT PAGE 31 IT IS HELD THAT FOR CLAIMING 80IB(10) DEDUCTION, CONDITION OF CLAU SE (D) WAS TO BE FULFILLED ON THE DATE OF APPROVAL AND NOT ON THE DATE OF ALLOWING DEDUCTION. HE FURTHER PLACED RELIANCE ON THE RATIO LAID DOWN BY MUMBAI BENCH OF TRIBUNAL IN ITO 11 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS VS. M/S. EVEREST HOME CONSTRUCTION (INDIA) PVT. LTD. IN ITA NO.7021/MUM/2008 , RELATING TO ASSESSMENT YEAR 2006 - 07, ORDER DATED 12.09.2012, WHEREIN IT IS HELD THAT COMMERCIAL AREA UNDER SECTION 80IB(10)(D) OF THE ACT COULD NOT EXCEED 2000 SQ.FT. HE FURTHER PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF KARNATA KA IN CIT AND ANR. VS. G.R. DEVELOPERS IN ITA NO.335 OF 2009 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRESSED THAT LIBERAL INTERPRETATION OF SECTION IS TO BE APPLIED WHERE SECTION 80IB(10) OF THE ACT WAS FOR LOWER AND MIDDLE INCOME GROUP AND NOT FOR RICH GROUP. HE FURTHER POINTED OUT THAT WHILE IN TERPRETING BENEFICIAL PROVISIONS AND WHERE DATE WAS CLEAR, THE SAME HAS TO BE STRICTLY APPLIED AS HELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF HUMAIN SULEMAN, JUDGMENT DATED 18.08.2016. TILL THE DATE OF PASSING OF ORDER, THE LEARNED DEPARTMENTAL REPRE SENTATIVE FOR THE REVENUE HAS FAILED TO FURNISH ON RECORD THE COPIES OF UNREPORTED JUDGMENTS / DECISIONS. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRESSED THAT IN THE FACTS OF PRESENT CASE, WHERE THE COMMERCIAL AREA WAS CLEARLY BEYOND THE STIPULATED AREA AND IN THE ABSENCE OF ANY AMBIGUITY IN LAW, THE PROVISIONS SHOULD BE STRICTLY APPLIED. HE PLACED RELIANCE ON THE RATIO LAID DOWN IN M/S. TAPADIA CONSTRUCTIONS LTD. VS. ACIT IN ITA NO.1128/PUN/2014, RELATING TO ASSESSMENT YEAR 2004 - 05, ORDE R DATED 08.09.2017 . HE STRESSED THAT LIBERAL INTERPRETATION COULD NOT GO BEYOND FOUR CORNERS OF LAW. HE CONCLUDED BY SAYING THAT SECTION IS TO BE INTERPRETED TO MAKE IT WORKABLE AND OPERATIVE, HERE WAS THE CASE WHERE LEGISLATIVE INTENT WAS CLEAR AND STIL L HE GOES ON AND COMPLETES THE PROJECT BEFORE THE AMENDMENT, FILE S THE RETURN OF INCOME NOT CLAIMING THE DEDUCTION, THEN CLAIMS THE SAME IN REVISED RETURN OF INCOME, WHICH IS CLEARLY AGAINST PROVISIONS OF LAW. IN RESPECT OF RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF MADRAS IN CIT VS. ARUN EXCELLO FOUNDATION (P.) LTD. (SUPRA), THE LEARNED DEPARTMENTAL 12 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE SAME WAS MISPLACED AS THE DEDUCTION WAS CLAIMED UNDER THE OLD PROVISIONS, WHERE THERE WA S NO CONCEPT OF COMMERCIAL AREA. 1 4 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN REJOINDER POINTED OUT THAT THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE RELIED ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF DELHI IN NATH B ROTHERS EXIM INTERNATIONAL LTD. VS. UNION OF INDIA (SUPRA) , WHICH WAS NOT APPLICABLE SINCE IN THE FACTS OF THE CASE BEFORE THE HONBLE HIGH COURT OF DELHI, NO RETURN OF INCOME WAS FILED UNDER SECTION 139(1) OF THE ACT AND BELATED RETURN OF INCOME WAS FILED AND IT WAS HELD THAT THE REVISED RETURN OF INCOME WAS NOT VALID. IN RESPECT OF RELIANCE IN DCIT VS. KAMDHENU BUILDERS AND DEVELOPERS (SUPRA), THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN THE FACTS OF SAID CASE, THE RETURN OF INCOME WAS FILED UNDER SECTION 139(1) OF THE ACT AND IT DOES NOT SAY THAT THE ASSESSEE HAD TO CLAIM THE DEDUCTION IN THE ORIGINAL RETURN OF INCOME. HE FURTHER POINTED OUT THAT THE DECISIONS RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE R EVENUE ARE REFERRED BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. HAPPY HOME ENTERPRISES (2015) 372 ITR 1 (BOM) . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT NO DATE WAS MENTION ED VIS - - VIS OPERATION OF SECTION 80IB(10)(D) OF THE ACT, SO, IT APPLIES TO PENDING PROJECTS; EVEN IN INCENTIVE PROVISIONS, CERTAIN CONDITIONS ARE TO BE APPLIED STRICTLY. CLAUSE (D) WAS CORRECT AND THERE WAS NO AMBIGUITY AND IT WAS ONLY AN EXPLANATION GIVEN , WHICH HAD TO BE INTERPRETED. 1 5 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS A PARTNERSHIP FIRM ENGAGED IN REAL ESTATE BUSINESS. IN THE ORIGINAL RETURN OF INCOME FILED FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10, THE ASSE SSEE 13 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS HAD DECLARED TOTAL INCOME AND NOT CLAIMED ANY DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THEREAFTER, REVISED RETURNS WERE FILED CLAIMING THE AFORESAID DEDUCTION BOTH FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. FOR ASSESSMENT YEAR 2010 - 11, DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS CLAIMED IN THE ORIGINAL RETURN OF INCOME FILED ITSELF. THE ASSESSEE HAD UNDERTAKEN THE DEVELOPMENT OF HOUSING PROJECT NAMED ABHIJIT PARK AT TERGAON, PUNE. THE SAID PROJECT WAS COMMENCED ON 15.06.2005. THE TOTAL CO MMERCIAL AREA INCLUDED IN THE SAID PROJECT WAS 2732.11 SQ.FT. THE ASSESSING OFFICER REFERRING TO CLAUSE (D) AS INSERTED W.E.F. 01.04.2005 POINTED OUT THAT TOTAL PERMISSIBLE COMMERCIAL AREA WAS 2000 SQ.FT. AND SINCE THE COMMERCIAL AREA CONSTRUCTED BY THE A SSESSEE EXCEEDED THE SAID LIMIT OF 2000 SQ.FT. HENCE, THE ASSESSEE WAS NOT ENTITLED TO CLAIM THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE CASE OF ASSESSEE ON THE OTHER HAND, WA S THAT THE AMENDMENT BROUGHT IN CLAUSE (D) OF SECTION 80IB(10) OF THE A CT, UNDER WHICH THE COMMERCIAL AREA HAS BEEN ENHANCED TO 3% OF BUILT UP AREA OR 5000 SQ.FT., WHICHEVER WAS HIGHER, WAS THE PROVISION APPLICABLE TO THE PROJECTS WHICH WE RE PENDING FOR COMPLETION AS ON 31.03.2010. THE ASSESSING OFFICER HOWEVER, DENIED THE S AID DEDUCTION SINCE THE ASSESSEE HAD STARTED HOUSING PROJECT ON 15.06.2005 I.E. THE DATE ON WHICH THE ASSESSEE DID NOT EVEN POSSESS AREA OF ONE ACRE OR MORE. THE ASSESSEE HAD PURCHASED ADDITIONAL AREA ON A LATER DATE AND CLAIMED THE SAID DEDUCTION. THE S ECOND ASPECT OF DENIAL OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WA S NON - FULFILLMENT OF CLAUSE (D), WHEREIN THE ASSESSEE HA D CONSTRUCTED COMMERCIAL AREA EXCEEDING 2000 SQ.FT. UNDER THE PRE - AMENDED PROVISIONS, THE LIMIT WAS THAT COMMERCIAL AREA SHOULD BE LESS THAN 5% OF TOTAL BUILT UP AREA OR 2000 SQ.FT., WHICHEVER WAS LESS. BUT ASSESSEE CLAIMS SHELTER UNDER AMENDED CLAUSE (D) , WHICH PROVIDE S FOR 14 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS COMMERCIAL AREA LESS THAN 3% OF TOTAL BUILT UP AREA OR 5000 SQ.FT., WHICHEVER WAS HIGHER. 1 6 . THE ISSUE WHICH ARISES BEFORE US IS TWO - FOLD I.E. WHETHER AMENDED PROVISIONS OF CLAUSE (D) ARE APPLICABLE TO PENDING PROJECTS AND THE ASSESSEE IS ENTITLED TO CLAIM THE AFORESAID DEDUCTION IN RESPECT OF HOUSING PROJECTS , WHICH HAD EXCEEDED COMMERCIAL AREA AS PER PRE - AMENDED PROVISIONS OF CLAUSE (D). THE SECOND ASPECT IS THAT WHERE INITIALLY THE ASSESSEE HAD AREA LESS THAN ONE ACRE BUT SUBSEQUENTLY, IT WAS MADE GOOD ; CAN THE ASSESSEE CLAIM DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE ABOVE PROVISIONS OF SECTION 80IB(10) OF THE ACT HAVE BEEN CONSIDERED BY VARIOUS HIGH COURTS AND THE TRIBUNAL S WHICH HAVE BEEN REFERRED BY BOTH THE LEARNED AUTHORIZED REPRESENTATIVES BEFORE US. WE REFER TO THE SAME IN ORDER TO ADJUDICATE THE ISSUE RAISED BEFORE US. 1 7 . THE ASSESSEE HAD UNDERTAKEN CONSTRUCTION OF HOUSING PROJECT AT THERGAON, PUNE. FOR ADJUDICATING THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, CERTAIN FACTUAL ASPECTS NEED TO BE TAKEN INTO CONSIDERATION. IN THE FIRST INSTANCE, THE ASSESSEE ENT ERED INTO A DEVELOPMENT AGREEMENT DATED 25.01.2005, COPY OF WHICH IS PLACED AT PAGES 22 TO 44 OF THE PAPER BOOK WITH ENGLISH TRANSLATION OF SAID DOCUMENTS AT PAGES 45 TO 75 OF PAPER BOOK. VIDE AGREEMENT DATED 25.01.2005, THE ASSESSEE HAD UNDERTAKEN TO DEV ELOP PLOT OF LAND MEASURING 2332.42 SQ.MTRS. THE ASSESSEE IN THIS REGARD ALSO SUBMITTED A PLAN DATED 15.06.2005, COPY OF WHICH IS PLACED AT PAGE 9 OF PAPER BOOK. THE PERUSAL OF SAID SANCTIONED PLAN REFLECTS THE AREA OF PLOT TO BE 23 22.56 SQ.MTRS. OUT OF DEMARCATED AREA OF 5527.60 SQ.MTRS. THEREAFTER, THE ASSESSEE ENTERED INTO ANOTHER DEVELOPMENT AGREEMENT DATED 24.01.2006 WITH THE SAME PARTIES, 15 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS COPY OF WHICH IS PLACED AT PAGES 76 TO 95 ALONG WITH ENGLISH TRANSLATION OF DOCUMENT AT PAGES 96 TO 125 OF PAPE R BOOK. THE ASSESSEE FILED REVISED PLANS FOR THE DEVELOPMENT OF SAID PROPERTY ON 07.06.2006, COPY OF WHICH IS PLACED AT PAGE 10 OF PAPER BOOK. THE AREA OF PLOT IN THE SAID AREA STATEMENT IS MENTIONED AS 5133.58 SQ.MTRS. FOR THE SAKE OF COMPLETENESS, IT MAY BE POINTED OUT THAT THE FIRST PART COMPLETION CERTIFICATE WAS RECEIVED BY THE ASSESSEE ON 28.09.2007, COPY OF WHICH IS PLACED AT PAGE 13 ALONG WITH ITS ENGLISH TRANSLATION AT PAGES 14 AND 15 OF PAPER BOOK. THE PERUSAL OF SAID DOCUMENT AT PAGE 14 REFLE CTS THE ASSESSEE TO HAVE CONSTRUCTED BUILDING NO.1 WITH SHOPS AT GROUND FLOOR , MEASURING 258.248 SQ.MTRS. HAVING 11 COMMERCIAL STALLS AND 28 COMMERCIAL STALLS WITH STAIRCA S E. IT IS MENTIONED THAT O N STILT FLOOR ALSO, RESIDENTIAL STALLS WERE CONSTRUCTED AN D THE TOTAL CONSTRUCTED AREA OF SAID BUILDING COMPRISED OF 11 COMMERCIAL STALLS AND 28 COMMERCIAL STALLS WITH STAIRCASE. IN OTHER WORDS, THE FIRST BUILDING CONSTRUCTED BY ASSESSEE THOUGH , WAS SANCTIONED FOR COMMERCIAL AND RESIDENTIAL USE, IN ACTUAL FACT, IS TOTALLY COMMERCIAL BUILDING AS IS EVIDENT FROM THE COMPLETION CERTIFICATE DATED 28.09.2007. THEREAFTER, THE ASSESSEE RECEIVED PART COMPLETION CERTIFICATE DATED 25.08.2008, COPY OF WHICH IS PLACED AT PAGE 16 WITH ENGLISH TRANSLATION AT PAGES 17 AND 18 O F THE PAPER BOOK, UNDER WHICH BUILDING NOS.2 AND 3 WERE CONSTRUCTED. THE ASSESSEE ALSO FILED REVISED SANCTION OF THE PLAN DATED 28.09.2007, COPY OF WHICH IS PLACED AT PAGE 11 AND DATED 31.03.2010, COPY OF WHICH IS PLACED AT PAGE 12 OF PAPER BOOK. THE ASS ESSEE THEREAFTER, RECEIVED FINAL COMPLETION CERTIFICATE DATED 31.03.2010, COPY OF WHICH IS PLACED AT PAGE 19 ALONG WITH ENGLISH TRANSLATION AT PAGES 20 AND 21 OF PAPER BOOK. IN OTHER WORDS, THE PROJECT OF ASSESSEE WAS COMPLETED BY 31.03.2010, WHEREIN THE FIRST BUILDING WAS COMMERCIAL BUILDING AND THEREAFTER, RESIDENTIAL BUILDINGS WERE DEVELOPED BY THE ASSESSEE. IT IS AN ADMITTED POSITION BETWEEN 16 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS THE PARTIES THAT WHEN THE ASSESSEE STARTED DEVELOPMENT OF SAID PROJECT, THE AREA WHICH WAS AVAILABLE WAS 2322.5 6 SQ.MTRS. THEREAFTER, VIDE SEPARATE DEVELOPMENT AGREEMENT DATED 24.01.2006, THE ASSESSEE CAME IN POSSESSION OF LAND AREA MEASURING 2323.42 SQ.MTRS. THE SAID LAND WAS PURCHASED FROM THE SAID PARTIES AND WAS PART OF THE SAME PIECE OF LAND. 1 8 . THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS THE FULFILLMENT OF CONDITIONS OF SECTION 80IB(10) OF THE ACT ENTITLING THE ASSESSEE TO CLAIM THE AFORESAID DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE PERUSAL OF SAID SECTION REFLECTS CERTAIN CONDITIONS TO BE FULFILLED MAKING THE PERSON ELIGIBLE TO CLAIM THE AFORESAID DEDUCTION OUT OF PROFITS DERIVED FROM HOUSING PROJECT. CLAUSE (A) TO SECTION 80IB(10) OF THE ACT PROVIDES THE TIME LIMIT WITHIN WHICH THE SAID PROJECT HAS TO BE COMPLETED. IN THE CASE OF ASSESSEE, WHERE THE FIRST SANCTIONING OF PLANS IS DATED 15.06.2005, THEN THE TIME PERIOD IS A PERIOD OF FOUR YEARS I.E. ENDING 31.03.2010. CLAUSE (B) TO SECTION 80IB(10) OF THE ACT PROVIDES THAT THE PROJECT SHOULD BE ON THE SIZE OF PLOT HAVING MINIMUM ARE A OF ONE ACRE. CLAUSE (C) TALKS ABOUT MEASUR EMENT OF RESIDENTIAL UNITS TO BE CONSTRUCTED I.E. IF SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN 25 KILOMETERS FROM THE MUNICIPAL LIMITS OF THE SAID CITIES, THEN MAXIMUM BUILT UP AREA ALLOWED IS 1000 SQ.FT. AND 1500 SQ.FT. AT ANY OTHER PLACE. CLAUSE (D) FURTHER PROVIDES THAT THE BUILT UP AREA OF SHOPS AND COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT AT THE RELEVANT TIME SHOULD NOT EXCEED 5% OF AGGREGATE BUILT UP AREA OF HOUSING PROJECT O R 2000 SQ.FT. WHICHEVER WAS LESS . CLAUSE ( E ) TO SECTION 80IB(10) OF THE ACT PROVIDES THAT NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSING PROJECT WAS TO BE ALLOWED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND CLAUSE (F) PROVIDES THAT IN CASE WHERE THE RES IDENTIAL UNIT IS ALLOWED TO ANY PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL 17 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS UNIT IS TO BE ALLOWED TO ANY OF THE SPECIFIED PERSONS IN ORDER TO ELIGIBLE FOR CLAIMING THE DEDUCTION ON ACCOUNT OF HOUSING PROJECT. THE AFORESAID CONDITIONS NEED TO BE FULFI LLED BY THE PERSON CLAIMING 80IB(10) DEDUCTION. ADMITTEDLY, HOUSING PROJECT IS NOT DEFINED IN THE ACT BUT CONDITIONS ARE LAID DOWN IN THIS REGARD THAT THE HOUSING PROJECT SHOULD BE APPROVED BY LOCAL AUTHORITY. SO, ONCE THE PROJECT HAS BEEN APPROVED BY LO CAL AUTHORITY AS HOUSING PROJECT AND THE ASSESSEE FULFILS THE OTHER CONDITIONS LAID DOWN IN THE SAID SECTION, THEN THE ASSESSEE IS ELIGIBLE TO CLAIM THE BENEFIT OF AFORESAID DEDUCTION. 1 9 . THE FIRST BASIC CONDITION TO BE FULFILLED IS THAT THE AREA OF PL OT OF LAND SHOULD BE MINIMUM AREA OF ONE ACRE. THE CASE OF REVENUE IN THE PRESENT APPEAL BEFORE US IS THAT THE ASSESSEE DOES NOT FULFILL THE SAID ONUS CAST UPON IT SINCE ON THE DATE OF START OF DEVELOPMENT OF THE PROJECT , THE ASSESSEE WAS NOT IN POSSESSIO N OF PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE. AS POINTED OUT IN THE PARAS HEREINABOVE, INITIALLY THE ASSESSEE CAME IN POSSESSION OF 2322.56 SQ.MTRS. OF LAND AND THEREAFTER VIDE SECOND DEVELOPMENT AGREEMENT DATED 24.01.2006, THE ASSESSEE PURCHASED 232 3.42 SQ.MTRS. OF LAND. THE SAID LAND WAS AGREED TO BE DEVELOPED VIDE TWO SEPARATE AGREEMENTS BUT FROM THE SA ME PIECE OF LAND AND FROM THE SAME SET OF OWNERS. ONCE THE ASSESSEE HA D CONSOLIDATED TO MORE THAN ONE ACRE, THE QUESTION WHICH ARISES IS WHETHER I N SUCH CIRCUMSTANCES, THE ASSESSEE CAN BE SAID TO HAVE FULFILLED THE CONDITION OF CLAUSE (B) OF SECTION 80IB(10) OF THE ACT. 20 . WE FIND THAT THE SAID ISSUE HAS BEEN CONSIDERED BY THE HONBLE HIGH COURT OF KARNATAKA IN CIT & ANR. VS. MYSTIC INVESTMENTS (SUPRA), WHEREIN IT HAS BEEN HELD THAT WHERE THE ASSESSEE OWNED ONLY 38 GUNTAS OF LAND WHEN HE 18 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS STARTED CONSTRUCTION AND HE ACQUIRED THE BALANCE LAND ADJACENT TO THE SAID LAND, THUS MAKING THE TOTAL LAND OF PROJECT TO BE ONE ACR E, WHICH IS PRESCRIBED UNDER SECTION 80IB(10) OF THE ACT AND WHERE THE MODIFIED HOUSING PROJECT WAS APPROVED, THEN THE ASSESSEE WAS ENTITLED TO CLAIM THE AFORESAID DEDUCTION AS THE PROJECT WAS COMPLETED WITHIN PERIOD OF FOUR YEARS. 2 1 . SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE MUMBAI BENCH OF TRIBUNAL IN THE CASE OF HAWARE ENGINEERS & DEVELOPERS (SUPRA). IN THE FACTS OF CASE BEFORE THE TRIBUNAL, PLOT NO.8A AND 8B WERE ADJACENT TO EACH OTHER AND WERE COLLECTIVELY SHOWN AS BELONGING TO THE PROJECT. THE TRIBUNAL HELD THAT IT WAS NOT EVEN NECESSARY THAT AREA OF EACH PLOT ON STANDALONE BASIS MUST BE ATLEAST ONE ACRE ; ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 2 2 . THE PUNE BENCH OF TRIBUNAL IN BABA PROMOTERS & DEVELOPERS VS. ITO (SUPRA) NOTED THAT INITIAL AREA OF THE PLOT WAS 3995.34 SQ.MTRS. WHICH WAS MARGINALLY LESS THAN PRESCRIBED AREA OF ONE ACRE IN SECTION 80IB(10) OF THE ACT. IN ADDITION, AN ADDITIONAL LAND MEASURING 5 ACRES WAS ACQUIRED BY THE ASSESSEE FOR THE APPROACH ROAD TO THE SAID PROJECT VIDE SEPARATE AGREEMENT MADE WITH THE SAME LANDLORDS. THE CONTENTION OF ASSESSEE OF HAVING FULFILLED THE REQUIREMENT OF ONE ACRE OF LAND BEING FULFILLED, WAS ACCEPTED BY THE TRIBUNAL ON THE GROUND THAT THE APPROACH ROAD WAS PART OF AREA OF PROJEC T AND UPHELD THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 2 3 . IN VIEW OF THE ABOVE PRECEDENTS LAID DOWN IN DIFFERENT CASES AND IN THE FACTS OF THE PRESENT CASE, WHERE THE ASSESSEE HAS THOUGH ENTERED INTO DEVELOPMENT AGREEMENTS VIDE SEPARATE AGREEMENTS BUT THE PROJECT WHICH WA S TO 19 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS BE DEVELOPED WA S ONE UNDER THE NAME AND STYLE OF ABHIJIT PARK AND BOTH THE PLOTS OF LAND WE RE ADJACENT TO EACH OTHER, WHICH HAVE BEEN PURCHASED FROM THE SAME LANDLORDS AND HENCE, THE ASSESSEE FULFILLS THE CONDITIO N OF HAVING ACQUIRED ONE ACRE OF LAND FOR DEVELOPMENT AND THUS, CONDITION CLAUSE (B) OF SECTION STANDS FULFILLED. 2 4 . NOW, COMING TO THE SECOND ASPECT OF THE ISSUE IN RELATION TO CLAIM OF 80IB(10) DEDUCTION. THE ASSESSEE HAS DEVELOPED THE HOUSING PROJECT NAMED ABHIJIT PARK, UNDER WHICH FIRST BUILDING PLANS WERE SANCTIONED ON 15.06.2005 . AS REFERRED IN THE PARAS HEREINABOVE, THE SAID SANCTIONED PLAN WAS ON AN AREA OF PLOT OF 2322.56 SQ.MTRS. THE ASSESSEE CONSTRUCTED BUILDING NO.1 AND IT HAS RECEIVED FI RST PART COMPLETION CERTIFICATE ON 28.09.2007. THE ASSESSEE HAD CONSTRUCTED 11 COMMERCIAL STALLS AND 28 COMMERCIAL STALLS WITH STAIRCASE. THE ASSESSEE BEFORE US HAS POINTED OUT THAT TOTAL COMMERCIAL AREA IN THE PROJECT WAS 2732.11 SQ.FT. THE ASSESSEE TH EREAFTER, HAD PURCHASED SECOND PIECE OF LAND AND IN ALL, CONSTRUCTED THREE MORE BUILDINGS. THE ASSESSEE RECEIVED PART COMPLETION CERTIFICATE ON 28.09.2007, 25.08.2008 AND FINAL COMPLETION CERTIFICATE ON 31.03.2010. THE ASSESSEE CLAIMS THAT IT HAD COMMENC ED CONSTRUCTION OF PROJECT ON 15.06.2005 AND COMPLETED THE SAME ON 31.03.2010. IN THE CASE OF ASSESSEE, THE FINAL COMPLETION CERTIFICATE HAS ALSO BEEN RECEIVED BY THE ASSESSEE DATED 31.03.2010. SO, IN ALL RESPECTS, HOUSING PROJECT AS ENVISAGED WITH FOUR BUILDINGS WERE COMPLETED, IN WHICH THE ASSESSEE HAS BUILT UP COMMERCIAL AREA OF 2732.11 SQ.FT. 2 5 . AS PER CLAUSE (D) TO SECTION 80IB(10) OF THE ACT ( PRE - AMENDED PROVISIONS ) WHICH WERE APPLICABLE ON THE DATE WHEN THE PROJECT WAS STARTED BY THE ASSESSEE, 20 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS THE REQUIREMENT OF LAW WAS THAT IN ORDER TO BE ELIGIBLE TO CLAIM 80IB(10) DEDUCTION, BESIDE OTHER CONDITIONS, BUILT UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN HOUSING PROJECT SHOULD NOT EXCEED 5% OF AGGREGATE BUILT UP AREA OF HOUSING PROJECT OR 2000 SQ.FT., WHICHEVER WAS LESSER. THE ASSESSEE HAS VIOLATED THE ABOVE SAID CONDITION LAID DOWN. THE QUESTION WHICH ARISES IS THAT WHETHER IN VIEW OF SUCH VIOLATION, THE ASSESSEE IS ENTITLED TO GET THE BENEFIT OF 80IB(10) DEDUCTION. THE ANSWE R TO THE SAID PROPOSITION IS NO. THE SCHEME OF PROVIDING AFFORDABLE HOUSING TO MIDDLE AND LOWER INCOME STRATA OF GROUP OF PEOPLE WAS ENVISAGED AND WAS THE REASON FOR INTRODUCTION OF 80IB(10) DEDUCTION. THE CONDITIONS VERY CATEGORICALLY PROVIDED THAT RE SIDENTIAL UNITS SHOULD BE WITH A BUILT UP AREA OF 1500 SQ.FT. IN THE VICINITY OF PUNE AND FURTHER CONDITI ON WAS TO PROVIDE COMMERCIAL SHOPS / ESTABLISHMENTS WITHIN HOUSING PROJECT TO TAKE CARE OF DAILY NEEDS OF RESIDENTS OF SAID HOUSING PROJECT. SO, THE L IMIT WAS PROVIDED I.E. ON ACCOUNT OF BUILT UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS WHICH WERE INCLUDED IN THE HOUSING PROJECT. THE LIMIT AS PROVIDED IN THE ACT WAS 2000 SQ.FT. AND WAS ONE OF THE CONDITIONS FOR AVAILING THE BENEFIT OF DEDUCTIO N UNDER THE SAID SECTION. WHERE THE ASSESSEE HAS VIOLATED THE SAID CONDITION I.E. IT HA D AGGREGATE AREA UNDER THE SHOPS AND COMMERCIAL ESTABLISHMENTS EXCEEDING 2000 SQ.FT., THEN ONE OF THE CONDITIONS HAVING NOT FULFILLED, DOES NOT ENTITLE THE ASSESSEE TO THE AFORESAID DEDUCTION. BOTH THE LEARNED AUTHORIZED REPRESENTATIVES PLACED RELIANCE ON VARIOUS DECISIONS TO POINT OUT TH E EFFECT OF AMENDMENT TO CLAUSE (D) TO SECTION 80IB(10) OF THE ACT. IT MAY BE POINTED OUT THAT IN EARLIER YEARS, SECTION DID NOT PROV IDE ANY LIMIT AS TO THE BUILT UP AREA TO BE COVERED BY THE SHOPS AND COMMERCIAL ESTABLISHMENTS BUT IN THE YEAR 2005 , THE LIMIT OF 2000 SQ.FT. WAS PROVIDED IN THE AFORESAID CLAUSE. THE REVENUE AUTHORITIES DENIED 80IB(10) DEDUCTION ON THE GROUND THAT AGGREG ATE 21 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS COMMERCIAL AREA EXCEEDED 2000 SQ.FT. THE COURTS HELD THAT THE AMENDMENT TO CLAUSE (D) WAS PROSPECTIVE AND CONSEQUENTLY, CEILING OF 2000 SQ.FT. OF COMMERCIAL AREA WOULD APPLY TO THE PROJECTS WHICH WERE APPROVED AFTER THE DATE OF AMENDMENT I.E. 2005 . I N RESPECT OF OLDER PROJECTS, WHERE THE STATUTE DID NOT PROVIDE ANY LIMIT ON THE COMMERCIAL AREA AND THE ONLY CONDITION WAS THAT THE PROJECT SHOULD BE APPROVED AS HOUSING PROJECT, IT WAS HELD THAT THERE WAS NO MERIT IN DENYING THE BENEFIT OF 80IB(10) DEDUCT ION. 26. THE ASSESSEE BEFORE US HAS RAISED TWO PLEAS IN THIS REGARD. THE ASSESSEE HAS STRONGLY STRESSED THAT THE SAID CLAUSE (D) HAS BEEN AMENDED BY THE FINANCE ACT, 2010, UNDER WHICH AGGREGATE BUILT UP AREA OF COMMERCIAL SHOPS AND ESTABLISHMENTS HAS BEEN INCREASED TO 5000 SQ.FT. AND SINCE THE BUILT UP AREA UNDER COMMERCIAL ESTABLISHMENTS IN THE HOUSING PROJECT OF ASSESSEE WAS BELOW 5000 SQ.FT., IT WAS ENTITLED TO CLAIM THE AFORESAID DEDUCTION; SINCE THE SAID AMENDMENT WAS FOR PROJECTS WHICH WERE SANCT IONED BETWEEN APRIL, 2005 TO MARCH, 2008. THE SECOND POINT RAISED BY THE ASSESSEE ON WITHOUT PREJUDICE WAS THAT , AT BEST , PROPORTIONATE DEDUCTION MAY BE ALLOWED TO THE ASSESSEE SINCE CLAUSES (C) AND (D) TO SECTION 80IB(10) OF THE ACT WERE SIMILAR AND IN C ASE THERE IS ANY VIOLATION OF BUILT UP AREA OF RESIDENTIAL UNITS, THEN THE COURTS HAVE ALLOWED PROPORTIONATE DEDUCTION TO THE BALANCE FLATS. IN THIS REGARD, OUR ATTENTION WAS DRAWN TO VARIOUS JUDICIAL PRONOUNCEMENTS ON THE ISSUE. 2 7 . FIRST, DEALING WITH THE AMENDMENT TO CLAUSE (D) TO SECTION 80IB(10) OF THE ACT BY FINANCE ACT, 2010, AS IS CLEAR THAT THE AMENDMENT OF INCREASING AGGREGATE BUILT UP AREA OF COMMERCIAL ESTABLISHMENTS TO 5000 SQ.FT. WAS INSERTED BY THE FINANCE ACT, 2010 W.E.F. 01.04.2010. THE PROJECT OF ASSESSEE STANDS 22 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS COMPLETED ON 31.03.2010, FOR WHICH THE ASSESSEE HAS ALSO RECEIVED FINAL COMPLETION CERTIFICATE DATED 31.03.2010 AND ON SUCH FACTS WHERE THE PROJECT HAS ALREADY BEEN COMPLETED ON 31.03.2010, THE AMENDMENT BROUGHT IN TO CLAUSE (D) TO SECTION 80IB(10) OF THE ACT WA S NOT APPLICABLE AS THE SAME WA S MADE EFFECTIVE FROM 01.04.2010. ACCORDINGLY, WE REJECT THE PLEA OF ASSESSEE IN THIS REGARD. 2 8 . NOW, COMING TO THE SECOND PLEA OF ASSESSEE FOR GRANTING PROPORTIONATE DEDUCTION I.E. EQUIVALENT TO COMMERCIAL AREA WHIC H IS AVAILABLE TO THE ASSESSEE AS PER THE ACT AND DENYING THE BENEFIT OF 80IB(10) DEDUCTION ON THE EXCESS COMMERCIAL AREA. THE ASSESSEE IN THIS REGARD HAS SOUGHT SUPPORT FROM THE PROPOSITIONS LAID DOWN IN RESPECT OF CLAUSE (C) TO SECTION 80IB(10) OF THE A CT. UNDER THE SAID CLAUSE (C), IT IS PROVIDED THAT RESIDENTIAL UNIT WHICH HAS TO BE BUILT IN THE HOUSING PROJECT SHOULD HAVE MAXIMUM BUILT UP AREA OF 1500 SQ.FT. IF IT IS BUIL T IN AND AROUND PUNE. SECTION RECOGNIZES BUILT UP AREA OF EACH OF RESIDENTIAL F LAT TO BE 1500 SQ.FT. OR 1000 SQ.FT. IN THE CITIES OF MUMBAI AND DELHI I.E. WHILE GIVING BENEFIT OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, THE COVERED AREA OF EACH OF THE RESIDENTIAL UNITS HAS TO BE CONSIDERED AND WHILE CONSIDERING THE SAME, IN CASE ANY OF THE UNITS EXCEED SPECIFIED BUILT UP AREA, THEN THE COURTS HAVE HELD THAT PRORATA DEDUCTION UNDER SECTION 80IB(10) OF THE ACT MAY BE PROVIDED TO SUCH RESIDENTIAL UNITS WHICH COMPLY WITH THE CONDITIONS. IN OTHER WORDS, CLAUSE (C) TO SECTION 80IB(10) OF THE ACT ITSELF PROVIDES THE EXAMINATION OF BUILT UP AREA OF EACH OF RESIDENTIAL FLATS AND HENCE, THE CLAIM OF PRORATA DEDUCTION BEING ALLOWED IN RESPECT OF SUCH HOUSING PROJECTS. 2 9 . NOW, COMING TO CLAUSE (D) TO SECTION 80IB(10) OF THE ACT, THE EXPRES SION USED IS THE BUILT UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT; IN OTHER WORDS, WHAT HAS TO BE SEEN IN ORDER TO DETERMINE 23 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS THE ELIGIBILITY AS PER CLAUSE (D) IS THE TOTAL BUILT UP AREA OF SHOPS AND OTHER COMMERC IAL ESTABLISHMENTS INCLUD ED IN THE HOUSING PROJECT AND LIMIT WHICH HAS BEEN PROVIDED FOR SUCH AGGREGATE BUILT UP AREA IS 2000 SQ.FT. IN THE RELEVANT YEAR. THE ASSESSEE HAS CONSTRUCTED COMMERCIAL AREA EXCEEDING THE SPECIFIED LIMIT OF 2000 SQ.FT. AND ONCE T HE CUMULATIVE BUILT UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS EXCEEDS THE LIMIT PROVIDED IN THE ACT AND FOR SUCH VIOLATION, THE ASSESSEE IS NOT ENTITLED TO GET THE BENEFIT OF 80IB(10) DEDUCTION. FURTHER, THERE IS NO MERIT IN THE PLEA OF ASSESSE E FOR ALLOWING PRORATA DEDUCTION ON ACCOUNT OF BUILT UP AREA OF COMMERCIAL SHOPS WHICH FALLS WITHIN SPECIFIED AREA. THE LANGUAGE OF SECTION IS CLEAR THAT WHILE CONSIDERING THE BUILT UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS, THE TOTAL AREA HAS TO BE CONSIDERED. IN SUCH CIRCUMSTANCES, NO PRORATA DEDUCTION IS ALLOWABLE TO THE ASSESSEE. ACCORDINGLY, WE HOLD SO. THE PLEA OF ASSESSEE THUS, IS REJECTED. IN OTHER WORDS, THE ASSESSEE IS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) O F THE ACT IN RESPECT OF HOUSING PROJECT NAMED ABHIJIT PARK AS IT HA D VIOLATED THE PROVISIONS OF CLAUSE (D) TO SECTION 80IB(10) OF THE ACT OF HAVING BUILT UP AREA OF SHOPS AND COMMERCIAL ESTABLISHMENTS MORE THAN 2000 SQ.FT. WE THUS, UPHOLD THE ORDERS OF AUTHORITIES BELOW IN DENYING THE AFORESAID 80IB(10) DEDUCTION TO THE ASSESSEE IN RESPECT OF PROFITS ARISING ON SALE OF UNITS IN THE HOUSING PROJECT NAMED ABHIJIT PARK. 30 . THE ASSESSEE HAS POINTED OUT THAT FOR ASSESSMENT YEAR 2010 - 11, DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS CLAIMED IN THE ORIGINAL RETURN OF INCOME ITSELF AND BECAUSE OF THE AMENDMENT TO CLAUSE (D), THE SAME IS ALLOWABLE TO THE ASSESSEE. WE HAVE ALREADY NOTED THE FACT THAT THE PROJECT IN THE CASE WAS APPROVED ON 15.06.2005 AND THE SAID PROJECT HAS BEEN COMPLETED ON 31.03.2010 AND THE ASSESSEE HAS ALSO RECEIVED FINAL COMPLETION CERTIFICATE AS ON 31.03.2010. 24 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS THE PROJECT WHICH COMMENCED ON 1 5.06.2005, THEN THE PROVISIONS AT THE DATE OF COMMENCEMENT HAVE TO BE CONSIDERED FOR DECIDING THE FULFILLMENT OF CONDITIONS WHICH MAKE THE ASSESSEE ELIGIBLE FOR CLAIMING THE DEDUCTION. AS PER PRE - AMENDED PROVISIONS OF CLAUSE (D) OF SECTION 80IB(10) OF THE ACT, THE COMMERCIAL AREA SHOULD NOT EXCEED LIMIT OF 2000 SQ.FT. HOWEVER, AS N O T E D BY US IN THE PARAS HEREINABOVE, THE COMMERCIAL AREA CONSTRUCTED BY THE ASSESSEE IN THE AFORESAID PROJECT EXCEEDED 2000 SQ.FT. AND HENCE, THE ASSESSEE HAS BEEN HELD TO BE NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. IN THIS REGARD, WE MAKE REFERENCE TO THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN CIT VS. M/S. SARKAR BUILDERS (SUPRA), WHICH HAD REFERRED TO THE OBSERVATIONS OF THE HONBLE BOMBAY HIGH COURT IN ITA NOS.201 AND 308 OF 2012, JUDGMENT DATED 25.07.2014, WHEREIN IT WAS HELD AS UNDER: - 21) 36..TO OUR MIND, WE DO NOT THINK THAT THE CONDITION/RESTRICTION LAID DOWN IN CLAUSE (D) OF SECTION 80IB(10) HAS TO BE REVISITED AND/OR LOOKED AT AND COMPLIED WITH IN THE ASSESSMENT YEAR IN WHICH THE PROFITS ARE OFFERED TO TAX BY THE ASSESSEE. WHEN THE ASSESSEE CLAIMS A DEDUCTION UNDER SECTION 80IB(10), THE ASSESSEE IS REQUIRED TO COMPLY WITH SUCH A CONDITION ON LY IF IT IS ON THE STATUTE - BOOK ON THE DATE OF THE APPROVAL OF THE HOUSING PROJECT AND IT HAS NOTHING TO DO WITH THE YEAR IN WHICH THE PROFITS ARE BROUGHT TO TAX BY THE ASSESSEE. WE HAVE COME TO THIS CONCLUSION ONLY BECAUSE WE FIND THAT CLAUSE (D) OF SECT ION 80IB(10) IS INEXTRICABLY LINKED TO THE DATE OF THE APPROVAL OF THE HOUSING PROJECT AND THE SUBSEQUENT DEVELOPMENT/CONSTRUCTION OF THE SAME, AND HAS NOTHING TO DO WITH THE PROFITS DERIVED THEREFROM. 31 . IN OTHER WORDS, WHERE THE CONDITION AT THE TI ME OF COMMENCEMENT OF PROJECT HAVE TO BE LOOKED INTO AND ESPECIALLY IN THE CASE OF ASSESSEE, WHERE THE PROJECT HAS BEEN COMPLETED AS ON 31.03.2010, THE AMENDED PROVISIONS WHICH WERE INTRODUCED BY FINANCE ACT, 2010 W.E.F. 01.04.2010 WOULD NOT APPLY. ACCORDINGLY, WE HOLD THAT THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON THE GROUND THAT AMENDED PROVISIONS OF CLAUSE (D) OF PROVIDING COMMERCIAL AREA UPTO 5000 SQ.FT. IS NOT AVAILABLE TO THE 25 ITA NO S . 1031 TO 1033 /PUN/20 15 OMKAR CONSTRUCTIONS ASSESSEE, WHERE T HE PROJECT OF ASSESSEE STANDS COMPLETED BEFORE DATE OF INTRODUCTION OF THE SAID AMENDMENT. ACCORDINGLY, WE UPHOLD THE ORDERS OF AUTHORITIES BELOW IN DENYING THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT. BOTH THE LEARNED AUTHORIZED REPRESENTATI VES HAD MADE OTHER SUBMISSIONS IN THIS REGARD AND THE SAME BECOME ACADEMIC AND W E DO NOT ADDRESS THE SAME. ACCORDINGLY, THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE DISMISSED. 3 2 . IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 1 2 T H DAY OF MARCH , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 1 2 T H MARCH , 201 8 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) , PUNE - 6 ; 4. THE PR. C IT - 5, PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE