M/s Essarjee Construction (p) Ltd, V. The A C I T 1 (1),

ITA 116/IND/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 5799 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-12-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 03-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Keywords: Assessment record
• Section: 80IB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 116/IND/2009 A.Y. 2004-05 ESSAR CONSTRUCTION (P) LIMITED BHOPAL PAN AAACE-8852F APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 1(1) BHOPAL RESPONDENT ASSESSEE BY : SHRI PRAKASH JAIN RESPONDENT BY : SHRI P.K. MITRA O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER O F THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DATED 16.11.2008 WHEREIN THE FIRST GROUND IS GENERAL IN NATURE. THE ONLY GROUND ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE LD. FIRST APPELLATE AUTHORITY ERRED IN UPHOLDING THE ACTION O F THE ASSESSING OFFICER IN RESPECT OF DISALLOWANCE OF DEDUCTION CLA IMED U/S 80IB(10) OF THE ACT TO THE EXTENT OF RS.25,20,473/- WITHOUT 2 APPRECIATING THE FACTS OF THE CASE AND THE SUBMISSI ONS MADE BEFORE HIM. 2. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE CONSTRUCTED THREE HOUSING PROJECTS OUT OF WHICH THE CLAIMED DEDUCTION U/S 80IB(10) WAS DISALLOWED BY TH E LEARNED ASSESSING OFFICER BY CONTENDING THAT THE BUILT UP A REA OF THE UNIT IS MORE THAN 1500 SQ.FT. IT WAS SUBMITTED THAT THE CONSTRUCTED AREA WAS RATHER BELOW THE PRESCRIBED LIMIT AS THE L EARNED ASSESSING OFFICER WRONGLY INCLUDED THE AREA OF THE PORCH WHICH IS OTHERWISE NOT INCLUDIBLE. TO SUBSTANTIATE ITS CLAIM , THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO T HE BUILDING PLAN (PAGE 5), EXPERT COMMENTS OF THE CBDT APPROVED VALUER (PAGE 6), RELEVANT PORTION OF THE RULES OF MP BHUMI VIKAS NIYAM, 1984 (SPECIFICALLY CLAUSES 19 AND 29) AND METHOD OF MEASUREMENT OF PLINTH, CARPET AND RENTABLE AREA OF BUILDING (INDIAN STANDARD). THE DECISION OF THE TRIBUNAL IN THE CASE OF SMT. SAROJ KAPOOR (ITA NO. 194/IND/2008 ORDER DAT ED 16.4.2010) WAS ALSO RELIED UPON. THE SUM AND SUBST ANCE OF THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE IS TH AT THERE IS NO VIOLATION OF MUNICIPAL BYE LAWS. ON THE OTHER HAND , THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE STRONGLY DEFENDE D THE 3 IMPUGNED ORDER BY CONTENDING THAT THE MEASUREMENT W AS DONE WITH THE HELP OF TECHNICAL PEOPLE AND ULTIMATELY IT WAS CONCLUDED THAT THE TOTAL AREA EXCEEDED THE PRESCRIBED MAXIMUM LIMIT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSESSEE COMPA NY UNDERTOOK CONSTRUCTION OF HOUSING PROJECTS BY OBTAINING BUILD ING PERMISSION FROM THE LOCAL MUNICIPAL CORPORATION IN THE CASE OF HOUSING PROJECT, ADHAR SHEELA, AND NEW FORT EXTENSI ON. AS PER THE PLAN, FOR CLAIMING DEDUCTION, THE BUILT UP AREA OF THE HOUSES SHOULD NOT EXCEED 1500 SQ.FT. THE CASE OF THE REVEN UE IS THAT THE ASSESSEE EXCEEDED THE PRESCRIBED LIMIT, THEREFORE, NO DEDUCTION U/S 80IB(10) OF THE ACT CAN BE EXTENDED TO THE ASSE SSEE. HOWEVER, THE STAND OF THE ASSESSEE IS THAT IF THE AREA OF THE PORCH IS EXCLUDED THEN THE NET BUILT UP AREA COMES TO 1462.77 SQ.FT. WHICH IS LESS THAN THE PRESCRIBED LIMIT. TH E ASSESSEE HAS FILED A PAPER BOOK AS PER WHICH THE AREA OF THE GRO UND FLOOR IS 907.94 SQ.FT. WHEREAS OF THE FIRST FLOOR IT IS 692. 27 SQ.FT. (TOTAL CONSTRUCTED AREA 1600.21 SQ.FT.). AS PER THE ASSES SEE, THIS TOTAL AREA INCLUDES 243.85 SQ.FT. WHICH IS OTHERWISE EXCL UDIBLE FROM THE 4 MEASUREMENT. THE MEASUREMENT TAKEN BY THE INCOME TA X DEPARTMENT TEAM ON 9.12.2006 IS AS UNDER :- 1. GROUND FLOOR . 941.95 SQ.FT. 2. FIRST FLOOR 733.91 SQ.FT . TOTAL = 1675.86 SQ.FT. IF THE DEDUCTION SPECIFIED/DEFINED IN M.P. BHUMI VI KAS RULES, 1984 NOTIFIED BY THE GOVERNMENT (PAGE NO. 4 CLAUSE NOS. 19 AND PAGE NOS. 5 AND 6, CLAUSE 29) (ANNEXURE-E) AND/OR I NDIAN STANDARDS 3861; 202 PAGE 1 CLAUSE NO. 3.2 AND PAGE NO. 2, CLAUSE NO. 5.2 (ANNEXURE F) WHICH IS DESCRIBED IN C PWD MANUAL IS IN THE SIMILAR MANNER AND IF THE SAME IS ANALYSE D, THEN THE PORCH AT LINTEL LEVEL 16 6 X 8 4 COMES TO 137.4 4 SQ.FT. IF THE SAME IS DEDUCTED AS PER THE AFORESAID RULES, THEN T HE NET BUILT UP AREA COMES TO 1462.77 SQ.FT. WHICH IS LESS THAN THE PRESCRIBED LIMIT OF 1500 SQ.FT. CLAUSE 19 OF THE M.P. BHUMI VI KAS NIYAM, 1984 WHICH PRESCRIBED ABOUT COVERED AREA IS REPRODU CED HEREUNDER :- 19) COVERED AREA MEANS THE AREA OF THE LAND COVERED BY THE PLINTH OF THE BUILDING AT THE GROUND FLOOR LEVEL AND SHALL BE COUNTED AS THE GROUND COVERAGE. THIS SHALL EXCLUDE THE AREA COVERED BY PROJECTIONS AT SLAB LEVEL AND AREA OF THE PLINTH NOT COVERED BY ROOF AT TOP. CANTILEVERED PROJECTION UPTO AN EXTEND OF ONE THIRD OF THE MARGINAL OPEN SPACE SHALL BE PERMISSIBLE ON THE UPPER SLAB LEVEL WITH A CLEAR HEIGHT FOR VEHICULAR/PEDESTRIAN MOVEMENT. THESE PROJECTION CANNOT BE MADE AT HEIGHT BELOW 2.5 METER FROM THE GROUND LEVEL. THIS PROJECTION SHALL NOT CONSTRUE TO BE COVERED 5 AREA. AREAS COVERED ON THE SECOND AND THIRD FLOOR LEVELS AS CANTILEVEL PROJECTION WITH AT LEA ST 5.5 METERS CLEAR SPACE BELOW FOR MOVEMEBT BUT NOT WITHIN THE SETBACK/MARGINAL OPEN SPACE, SHALL NOT BE COUNTED IN COVERED AREA. ALL AREAS I N THE BUILDING SHALL BE COUNTED IN COVERED AREAS EXCEPT FOR SERVICE DUCTS, GARAGE ON GROUND FLOOR AND LIFT WELLS. IF THE METHOD OF MEASUREMENT OF PLINTH AS PROVIDED IN INDIAN STANDARD (PAGES 13 TO 15 OF THE PAPER BOOK) THE POR CH (SUB- CLAUSE 3.2) IS ANALYSED, IT BECOMES CLEAR THAT THE PORCH AREA HAS BEEN EXCLUSIVELY EXCLUDED FROM MEASUREMENT. THE CAR PET AREA HAS BEEN DEFINED IN CLAUSE 5.2 AS PER WHICH ENTRANC E HALL AND PORCH HAS BEEN SPECIFICALLY EXCLUDED. 4. THE CONTROVERSY IN THE PRESENT APPEAL IS THAT TH E BUILT UP AREA OF HOUSE NO.6 OF ADHAR SHEELA, BARKHEDA PATHA NI, IS 1675.86 SQ.FT. AND THAT OF HIG 26, NEW FORT EXTENSI ON, IS 1600.21 SQ.FT. (VIDE ASSESSMENT ORDER PAGE 3). THI S BUILT UP AREA INCLUDES THE AREA OF PORCH AREA IN HOUSE NO. 6 ADHA R SHEELA IS 211.73 SQ.FT. AND IN HIG 26 IT IS 137.44 SQ.FT. IF THE AREA OF THE PORCH IN THE RESPECTIVE HOUSE IS EXCLUDED, THESE CO ME TO 1464.13 AND 1462.77 SQ.FT. RESPECTIVELY WHICH IS BELOW THE PRESCRIBED LIMIT. NOW THE QUESTION ARISES WHETHER THE AREA OF THE RESPECTIVE PORCH IS TO BE EXCLUDED FOR CLAIMING THE DEDUCTION U/S 80IB(10) OF THE ACT. SECTION 80IB(10) OF THE ACT WAS EXPLAI NED BY THE 6 CIRCULAR OF CBDT NO. 794 DATED 9.8.2000 (245 ITR (S T) 24) AND WAS AMENDED BY THE FINANCE ACT, 2000 AND SECTION 80 IB(14) WAS AMENDED BY THE FINANCE ACT, 2001 AND WAS EXPLAINED BY CBDT VIDE CIRCULAR NO. 14/2001 DATED 12.12.2001 (252 ITR (ST) 65 AND WAS FURTHER AMENDED BY FINANCE ACT, 2002 WHICH WAS EXPLAINED BY CBDT BY CIRCULAR NO. 8/2002 DATED 27.8.2002 (258 ITR (ST) 13 AND SECTION 80IB(10) WAS AMENDED BY FINANCE ACT. 2003 AND EXPLAINED BY CBDT BY CIRCULAR NO. 7/2003 DATED 5.9. 2003 (263 ITR (ST) 62. BUT AT NO POINT OF TIME NO SEPARATE D EFINITION OF BUILT UP AREA WAS GIVEN. SECTION 80IB(10) IS REPRODUCED HEREUNDER :- (10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDE RTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31ST DAY OF MARCH, 6A [ 2008 ] BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RE LEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, ( A ) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVEL OPMENT AND 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 APPROV ED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; ( II ) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, I S APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRI L, 2004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WH ICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION. FOR THE PURPOSES OF THIS CLAUSE, ( I ) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HO USING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDIN G PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTH ORITY; ( II ) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOU SING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LO CAL AUTHORITY; 7 ( B ) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHIC H HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE ( A ) OR CLAUSE ( B ) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANC E WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNM ENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDIN GS 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 BE HALF; ( C ) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITY OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETRES FR OM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND A ND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; 6B [ AND ] ( D ) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCI AL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED FIV E PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR T WO THOUSAND SQUARE FEET, WHICHEVER IS LESS.] THE FOLLOWING CLAUSES (E) AND (F) SHALL BE INSERT ED AFTER CLAUSE (D) OF SUB-SECTION (10) OF SECTION 80-IB BY THE FINANCE (NO. 2) ACT, 2009, W.E.F. 1-4-2010 : ( E ) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND ( F ) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTI AL UNIT IN SUCH HOUSING PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS, NAMELY: ( I ) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDRE N OF SUCH INDIVIDUAL, ( II ) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDU AL IS THE KARTA, ( III )ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUS E OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDI VIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA. 6C [ EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL AP PLY TO ANY UNDERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTR AL OR STATE GOVERNMENT). ] IF THE AFORESAID PROVISION IS ANALYSED, IT PUTS STR ESS ON THE WORDS BUILDING HOUSING PROJECTS APPROVED BY A LOCAL AUTH ORITY 8 MEANING THEREBY THE PROJECT/BUILDING AREA MUST BE A PPROVED BY THE LOCAL AUTHORITY (STATUTORY AUTHORITY). IT IS T HE BOUNDEN DUTY OF THE AUTHORITY TO APPROVE THE PLAN AS PER THE INT ENTION AND PURPOSE OF LEGISLATURE. FOR THE FIRST TIME, SECTIO N 80IB(14) WAS AMENDED BY THE FINANCE (NO.2) ACT OF 2004 W.E.F. 1. 4.2005(269 ITR (ST) 114). THIS AMENDMENT IS NOT RETROSPECTIVE IN EFFECT, MEANING THEREBY IT IS EFFECTIVE FROM 1.4.2005, THER EFORE, IT IS APPLICABLE FROM THE ASSESSMENT YEAR 2005-06. IN THE PRESENT APPEAL, THE ASSESSMENT YEAR IS 2004-05, THEREFORE, THE DEFINITION OF BUILT UP AREA CLAUSE (A) TO SUB-SECTION (14) T O SECTION 80IB IS NOT APPLICABLE. EVEN OTHERWISE, IT IS WELL SETTLED LAW THAT EVERY STATUTE WHICH TAKES AWAY OR IMPAIRS VESTED RIGHTS A CQUIRED UNDER EXISTING LAWS OR CREATES A NEW OBLIGATION OR IMPOSE S A NEW DUTY OR ATTACHES A DISABILITY IN RESPECT OF TRANSACTIONS OF PAST, MUST BE PRESUMED TO BE INTENDED NOT TO HAVE RETROSPECTIVE E FFECT (GOVINDDAS V. ITO) 103 ITR 123 (SC). IN THE PRESEN T APPEAL HAS COMPLETED THE BUILDING BEFORE THE PROPOSED AMENDMEN T IN ACCORDANCE WITH THE EXISTING LAWS, THEREFORE, THE L ATER AMENDED PROVISION OF CLAUSE (A) OF SUB-SECTION (14) OF SECT ION 80IB SHALL NOT BE APPLICABLE TO THE FACTS OF THE PRESENT APPEAL. 9 5. IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS) HAS MENTIONED ANOTHER POINT OF CANTIL EVERED PROJECTION WHICH WAS NOT TAKEN IN THE ASSESSMENT OR DER. RULE 19 OF M.P. BHUMI VIKAS RULES WHILE DEALING WITH THE CO VERED AREA MENTIONS CANTILEVERED PROJECTION UPTO AN EXTEND OF 1/3 RD OF THE OPEN SPACE ON THE UPPER SLAB LEVEL WITH A CLEAR HEI GHT FOR VEHICULAR/PEDESTRIAN MOVEMENT PROHIBITING THE CONST RUCTION BELOW 2.5 METERS FROM THE GROUND LEVEL. HOWEVER, T HE ASSESSEE VIDE LETTER DATED 26.9.2007 CLARIFIED BEFORE THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS) THAT THE PORCH WAS AT THE HEIGHT OF 7. THE RULE RELATES TO A CANTILEVER PROJ ECTION ON THE PUBLIC PATH SO THAT THE MOVEMENTS OF VEHICLES AND P EDESTRIANS MAY NOT BE AFFECTED. HOWEVER, THE PORCH IN THE PRES ENT APPEAL IS WITHIN THE BOUNDARY OF THE LAND AND NOT ON THE PUBL IC PATH. THE CPWD ALSO DOES NOT INCLUDE PORCH AREA IN PLINTH ARE A (COVERED AREA). ABOVE ALL THE MUNICIPAL CORPORATION OF BHOPA L (LOCAL AUTHORITY) HAS PERMITTED BUILDING PERMISSION IN THE CASE OF THE PRESENT ASSESSEE WHICH IS NOT UNDER DISPUTE. THE CA SE OF THE ASSESSEE IS FURTHER FORTIFIED BY THE DECISION OF TH E TRIBUNAL IN THE CASE OF ACIT VS. SMT. SAROJ KAPOOR (ITA NO. 194/IND /2008 AND 10 CO NO. 51/IND/2008) ORDER DATED 16 TH APRIL, 2010. THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER :- THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARISE OUT OF ORDER OF THE LD. CIT(A)-I, BHOPAL, DATED 18.01.2008, FOR THE ASSESSM ENT YEAR 2004-05. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. FIRST, WE SHALL TAKE UP THE REVENUES APPEAL WHEREI N THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN ALLOWING DEDUCTION TO THE ASSESSEE U/S 80IB(10) ON PRO-RATA BASIS. THIS IS THE ONLY ISSUE INVOLVED, THOUGH THE REVENUE HAS TAKEN FIVE GROUNDS . 4. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAG ED IN THE BUSINESS OF DEVELOPING AND CONSTRUCTION OF HOUS ING PROJECTS AND CLAIMED DEDUCTION U/S 80IB(10) AMOUNTI NG TO RS. 1,52,67,762/-. THE A.O. FOUND THAT IN THE YE AR UNDER CONSIDERATION, THE ASSESSEE DEVELOPED AND SOL D HOUSING PROJECTS COMPRISING OF ROW HOUSES AND FLATS IN GREEN CITY AT E-8, ARERA COLONY, BHOPAL. THE A.O. I N ORDER TO ASCERTAIN ACTUAL BUILT UP AREA OF EACH HOU SE OF THE PROJECT CONDUCTED A PHYSICAL VERIFICATION ON TH E SITE ON 8.12.2006 AND ON TAKING MEASUREMENT OF THREE FLA TS, THE BUILT UP AREA OF SUCH FLATS WAS FOUND TO BE MOR E THAN 1500 SQ.FT. THE DETAILS OF SUCH FLATS ARE AS UNDER :- 5. HOUSE NO. MEASURED & PROJECT NAME OF THE OWNER/OCCUPIER TOTAL BUILT UP AREA A-2-18 GREEN CITY SMT. KAVITA BHATT 1875.33 SQ.FT. A-4 GREEN CITY SHRI O.P. BEOHAR 1928.56 SQ.FT. A-6, GREEN CITY SMT. KRISHNA MURTHY W/O SHRI C. S. KRISHNA MURTHY 2639.14 SQ.FT. 6. THE A.O., ACCORDINGLY, GAVE THE COPIES OF THE MEASUREMENT SO TAKEN FOR THE COMMENTS OF THE ASSESS EE AND WAS ALSO REQUIRED TO EXPLAIN AS TO WHY THE DEDUCTION U/S 80IB(10) SHOULD HAVE BEEN DISALLOWED. THE ASSESSEE VIDE ITS LETTER DATED 26.12.2006 HAS SUBMITTED THAT MEASUREMENTS WERE NOT CORRECTLY TAKE N 11 AND ALSO SUBMITTED THE AREAS AS PER THE REPORT OF A TECHNICAL EXPERT, WAS WITHIN THE PRESCRIBED LIMIT O F 1500 SQ.FT.THE A.O., HOWEVER, REJECTED SUCH CLAIM O F THE ASSESSEE AND SUCH REPORT FOR THE REASON THAT TH E MEASUREMENTS WERE DONE BY THE DEPARTMENT IN THE PRESENCE OF ASSESSEES REPRESENTATIVE. THEREAFTER, THE A.O. REFERRED TO THE PROVISIONS OF SECTION 80IB(10) AND CLAUSE (A) OF SECTION 80IB(14) AND HELD THAT DEFINI TION OF BUILT UP AREA HAD BEEN DEFINED, WHICH WAS OF CLARIFICATORY NATURE AND, THEREFORE, AS PER THIS DE FINITION, THE MEASUREMENTS TAKEN BY THE ENGINEER HIRED BY THE ASSESSEE WAS NOT OF MUCH USE AS THERE WAS NO CONCEP T OF NET BUILT UP AREA IN SECTION 80IB. THE LD. A.O. ALSO HELD THAT PROVISIONS OF SECTION 80IB(14)(A) OF THE ACT WAS OF CLARIFICATORY NATURE, HENCE HAD RETROSPECTIV E APPLICATION. THE A.O. FURTHER FOUND THAT IN CASE OF HOUSE NO. A/6 ON THE DATE OF PHYSICAL VERIFICATION NOBODY HAD POINTED OUT ANY DISCREPANCIES IN THE MEASUREMENTS TAKEN BY THE DEPARTMENT AND FACT OF S O CALLED ADDITIONAL CONSTRUCTION BY THE OWNERS SUBSEQUENTLY WAS BROUGHT TO THE NOTICE OF THE DEPARTMENT, WHICH WAS AN AFTER THOUGHT ON THE PART OF THE ASSESSEE. IT WAS ALSO HELD THAT EVEN IF 400 SQ .FT. AREA WAS EXCLUDED THEN ALSO THE REMAINING PART WAS MORE THAN THE LIMIT PRESCRIBED U/S 80-IB. ACCORDINGLY, T HE A.O. REJECTED THE CLAIM OF THE ASSESSEE FOR DEDUCTI ON U/S 80-IB(10) OF THE ACT. AGGRIEVED BY THIS, THE ASSESS EE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A ), WHEREIN IT WAS CONTENDED THAT THE ASSESSEE HAD COMPLIED WITH ALL THE THREE CONDITIONS AS LAID DOWN U/S 80IB(10). THE ASSESSEE ALSO GAVE THE DETAILS OF THE TYPES OF FLATS CONSTRUCTED BY THE ASSESSEE. IN THIS REGARD, THE ASSESSEE SUBMITTED THAT IN FIRST PHASE, THE RES IDENTIAL FLATS WERE CONSTRUCTED ADMEASURING 929.46 SQ.FT., 1082.35 SQ.FT. OF WHICH NO MEASUREMENTS WERE DONE B Y THE DEPARTMENT. IN THE SECOND PHASE, 9, A-1 TYPE A ND 13 A-II TYPE DUPLEX HOUSES WERE CONSTRUCTED AND THE MEASUREMENT OF DUPLEX HOUSES WAS FOUND LESS THAN 1500 SQ.FT. BY THE APPROVED VALUATION OFFICER. IT W AS ALSO SUBMITTED THAT IN THE THIRD PHASE, DUPLEX HOUS ES AND EWS FLATS WERE CONSTRUCTED AND THE AREA OF SUCH DUPLEX RESIDENTIAL WAS 1254.22 SQ.FT. AND EWS FLATS WAS 217 SQ.FT. IT WAS ALSO SUBMITTED THAT PHYSICAL 12 MEASUREMENT OF HOUSES CONSTRUCTED IN THIRD PHASE WA S ALSO NOT DONE BY THE DEPARTMENT. THE ASSESSEE ALSO SUBMITTED THAT IN CASE OF A/6 DUPLEX HOUSES, THE DEPARTMENT PRIMARILY MEASURED THE AREA THEREOF AT 3 812 SQ.FT., WHICH WAS SUBSEQUENTLY CORRECTED TO 2639.14 SQ.FT., BY THE DEPARTMENT ON ITS OWN, WHICH FACT INDICATED THAT THE ASSESSEES REPRESENTATIVE HAD NO T CHECKED THE MEASUREMENT AND ITS CALCULATION. IT WAS ALSO CONTENDED THAT THE OWNER OF SUCH HOUSE HAD ALS O ACCEPTED THAT 400 SQ.FT. OF ADDITIONAL PORTION WAS CONSTRUCTED SUBSEQUENTLY BY THE OWNER. THE ASSESSEE ALSO SUBMITTED THAT THE PROVISIONS OF CLAUSE (A) OF SUB SECTION (14) OF SECTION 80IB WERE OF PROSPECTIVE NA TURE AND THE CORRECT METHOD TO CALCULATE THE BUILT UP AR EA HAD TO BE IN ACCORDANCE WITH M.P. BHOOMI VIKAS RULES, 1984, WHICH WAS APPLICABLE IN THE STATE OF M.P. WHE RE THE SUCH HOUSING PROJECT HAD BEEN CONSTRUCTED. THE ASSESSEE ALSO REFERRED TO THE METHODOLOGY OF MEASUREMENT AS PER THESE RULES TO COMPUTE THE BUILT UP AREA, WHICH WAS ALSO ADOPTED BY THE APPROVED VALUATION OFFICER AND ON THAT BASIS, IT WAS FOUND T HAT SUCH BUILT UP AREA WAS LESS THAN 1500 SQ.FT. THE AS SESSEE ALSO SUBMITTED THAT THE MEASUREMENT WAS DONE BY THE DEPARTMENT THROUGH UNQUALIFIED PERSONS INSPITE OF T HE FACT THAT SERVICES OF TECHNICAL PERSONNEL TO CARRY OUT SUCH JOBS WERE ALSO AVAILABLE WITH THE DEPARTMENT A ND THIS APPROACH OF THE DEPARTMENT INDICATED THAT IT W AS A PREDETERMINED ACTION TO DISALLOW THE ELIGIBLE CLAIM OF THE ASSESSEE. THE LD. CIT(A) AFTER CONSIDERING ALL THE DOCUMENTS AS WELL AS LEGAL POSITION NARRATED BY THE ASSESSEE HELD THAT THE ASSESSEE WAS ENTITLED FOR PR O-RATA DEDUCTION IN RESPECT OF SUCH HOUSING PROJECT AS THE THREE FLATS WERE HAVING BUILT UP AREA OF MORE THAN 1500 S Q.FT. THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE AS UNDE R :- I HAVE CAREFULLY EXAMINED THE DETAILED REASONS GIV EN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AN D VARIOUS SUBMISSIONS OF THE APPELLANT ON THIS ISSUE AND ALSO THE LEGAL POSITION BROUGHT OUT BY THE AR, I F IND THAT ONLY THREE DUPLEX RESIDENTIAL HOUSES HAVE BEEN MEASURED, WHICH ACCORDING TO THE APPELLANT IS BELOW 1,500 SQ.FT. I FIND THAT THE MEASUREMENT OF FLATS A ND DUPLEXS TYPE A-III AND EWS FLATS ARE BELOW 1,500 SQ.FT. AS PER THE CERTIFICATE OF MEASUREMENT OF ENG INEER 13 AND DECLARATION MADE BY THE APPELLANT UNDER PRAKOS HTA SWAMITVA ADHINIUM 1976, DULY REGISTERED, FILED BY T HE APPELLANT. THE MEASUREMENT OF DUPLEX TYPE A-I AND A - II AFTER CONSIDERING THE DEDUCTION, PERMISSIBLE UND ER BHOOMI VIKAS RULES, 1984, AS PER THE CERTIFICATE OF THE ENGINEER SUBMITTED BY THE APPELLANT IS LESS THAN 1 ,500 SQ.FT. I, THEREFORE, OF THE CONSIDERED VIEW THAT IT WILL BE FAIR ENOUGH TO TAX THE PROFIT OF 3 DUPLEXS OF TYPE AI & AII OF PHASE/PART 2 WHICH WERE MEASURED BY THE DEPARTMENT AND FOUND EXCEEDING 1,500 SQ.FT. AS PER THE PROFIT AND LOSS ACCOUNT SUBMITTED BY THE APPELLANT , IT IS SEEN THAT THE TOTAL SALE CONSIDERATION OF DUPLEXES AND FLATS IS RS. 6,73,38,296/- AND SALE OF 3 DUPLEX TYP E A-I & A-II IS FOR RS. 39,18,920/-. THE PRO-RATA RATE OF PROFIT ON THESE THREE DUPLEXES @ 22.67 % COMES TO RS. 8,88,420/-. BUT, HOWEVER, IT IS SEEN THAT THE A.O. HAS DISALLOWED THE ENTIRE CLAIM, INSTEAD OF DISALLOWANC E ON PRO RATA BASIS, WHICH IN MY OPINION IS NOT PROPER. THUS, THE DISALLOWANCE IS RESTRICTED TO RS. 8,88,420/- ON LY AND AS SUCH THE APPELLANT GETS A RELIEF OF RS. 1,43,79, 342/- I.E. ( RS. 1,52,67,762/- MINUS RS. 8,88,420/-) AND THE APPEAL IS PARTLY ALLOWED. 7. THE LD. CIT DR CONTENDED THAT WHATEVER FLATS WERE MEASURED ON SAMPLE BASIS WERE FOUND HAVING BUILT UP AREA OF MORE THAN 1500 SQ.FT. HENCE, OTHER FLATS WE RE ALSO TO BE CONSIDERED OF HAVING BUILT UP AREA OF MO RE THAN THIS LIMIT. IT WAS FURTHER CONTENDED THAT PROV ISIONS OF SECTION 80IB(14)(A) WERE OF CLARIFICATORY NATURE AND, HENCE, APPLICABLE FOR THE YEAR UNDER CONSIDERATION ALSO AND IF THAT BE THE CASE, THEN THE M.P. BHOOMI VIKAS RULES WERE NOT RELEVANT AND CONSEQUENTLY METHODOLOG Y OF SUCH RULES COULD ALSO NOT BE APPLIED IN COMPUTIN G THE BUILT UP AREA OF EACH FLAT. THE LD. CIT DR FURTHER CONTENDED THAT IT WAS A CASE OF ROW HOUSING AND NOT A CASE OF TOWER/MULTI-STOREYED FLATS, HENCE, NO QUEST ION OF COMMON PARKING AREAS OR COMMON FACILITIES, WHICH COULD BE EXCLUDED IN COMPUTING BUILT UP AREA. THE L D. CIT DR FURTHER CONTENDED THAT ASSESSEES ENGINEERS SUBSEQUENT REPORT WAS NOT TO BE ACCEPTED WITHOUT CONFRONTING THE SAME TO THE A.O. OR VERIFICATION OF THE SAME BY THE TECHNICAL PERSONS, HENCE, IN VIEW OF TH E FACT THAT NO SUCH EXERCISE WAS DONE BY THE CIT(A), THE SAME COULD NOT BE GIVEN ANY WEIGHTAGE. THE LD. CIT 14 DR FURTHER CONTENDED THAT THE LD. CIT(A) ALSO DID N OT VERIFY THE APPROVED MAP/REGISTRATION DOCUMENTS TO F IND OUT THE CORRECT FACTS. HENCE, THE ORDER OF LD. CIT( A) WAS NOT CORRECT. THEREAFTER, THE LD. CIT(A) REFERRE D TO PAGE 123 & 124 TO DRAW OUR ATTENTION TOWARDS THE AMOUNT OF CONSIDERATION, WHICH WAS NOT SAME, HENCE, THE UNITS COULD NOT BE OF SAME SIZE. THE LD. CIT DR FURTHER CONTENDED THAT THE PROVISIONS OF SECTION 80IB(10) WERE UNAMBIGUOUS AND THERE WAS NO METHODOLOGY PRESCRIBED THEREIN TO GIVE PRO-RATA DEDUCTION AND, THEREFORE, WHEN SOME FLATS WERE FOUN D TO HAVING BUILT UP AREA OF MORE THAN 1500 SQ.FT, TH EN, THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10). THE LD. CIT DR THEREAFTER ALSO REFERRED TO THE ENGINEERS REPORT SUBMITTED BY THE ASSESSEE AND SUBMITTED THAT IT WAS NOT AS PER THE CRITERIA LAID DOWN IN THE ACT, HENCE, NOT CORRECT PIECE OF EVIDENCE. THE LD. CIT DR FURTHER SUBMITTED THAT LETTER OF THE OWNER O F THE HOUSE OF A/6 WAS A CASE OF AFTER THOUGHT ONLY, HENC E, NOT CONSIDERABLE. ACCORDINGLY, HE PRAYED THAT THE O RDER OF THE A.O. WAS TO BE CONFIRMED. 8. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT FOLLOWING FOUR QUESTIONS WERE TO BE DECIDED :- (I) WHETHER PROVISIONS OF SECTION 80IB(14)(A) OF THE AC T WERE RETROSPECTIVE OR PROSPECTIVE ? (II) IF PROSPECTIVE, THEN WHAT CRITERIA HAD TO BE ADOPTE D TO COMPUTE THE BUILT UP AREA ? (III) WHETHER ACTUAL AREA OF THREE FLATS WAS MORE THAN 15 00 SQ.FT. OR NOT. (IV) WHETHER THE LD. CIT(A) WAS CORRECT IN GIVING PRO RA TA DEDUCTION ? 9. AS REGARDS TO QUESTION NO. 1, HE SUBMITTED THAT T HIS ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN THE CASE OF AIR DEVELOPERS AS REPORTED IN 14 ITJ 20 6 (NAGPUR), WHEREIN THE TRIBUNAL HELD THAT THE DEFINI TION OF BUILT UP AREA AS PRESCRIBED IN SECTION 80IB(14)( A) COULD NOT BE SAID TO BE RETROSPECTIVE. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT IN THE CASE OF BRAHMA ASSOCIATES, SPECIAL BENCH OF THE TRIBUNAL HAD ALSO HELD THAT THE PROVISIONS SPECIFYI NG MAXIMUM COMMERCIAL AREA LIMITS WERE ALSO OF PROSPECTIVE NATURE. IN THIS REGARD, THE LEARNED COU NSEL FURTHER REFERRED TO NOTES TO CLAUSES AS WELL AS C.B .D.T. 15 CIRCULAR WHEREIN IT HAD BEEN CLARIFIED THAT DEFINIT ION OF BUILT UP AREA HAD TO BE APPLIED WITH EFFECT FROM ASSESSMENT YEAR 2005-06. IT WAS ALSO CONTENDED THAT SUCH DEFINITION WAS IN THE NATURE OF SUBSTANTIVE PROVISIONS, HENCE, IT COULD NOT BE CONSIDERED CLARIFICATORY AND RETROSPECTIVE. FOR THIS PROPOSITI ON, THE LEARNED COUNSEL RELIED ON THE DECISION OF THE HON'B LE SUPREME COURT IN THE CASE OF GOVIND DAS AS REPORTED IN 103 ITR 123. THEREAFTER, THE LEARNED COUNSEL SUBMITTED THAT THE A.O. HAD WORKED OUT THE BUILT UP AREA AS PER SUCH DEFINITION BY INCLUDING MUMTY, STA IR CASE, BALCONY, ARCH, PROJECTION AND TERRACE AND IF THAT WAS EXCLUDED THEN THE AREA WAS LESS THAN THE SPECIF IED LIMITS. THE LEARNED COUNSEL FURTHER SUBMITTED THAT IN THE YEAR UNDER CONSIDERATION I.E. IN ASSESSMENT YE AR 2004-05, THERE WAS NO DEFINITION OF BUILT UP AREA I N THE ACT. HENCE, EITHER COMMON SENSE MEANING OR OTHER LEGISLATIONS DEALING WITH THE SAME SUBJECT WERE TO BE RESORTED TO FIND OUT THE MEANING OF BUILT UP AREA. THE LEARNED COUNSEL THEREAFTER SUBMITTED THAT THIS HOUS ING PROJECT AS PER THE ACT HAD BEEN APPROVED AS A HOUSI NG PROJECT BY A LOCAL AUTHORITY. HENCE, DEFINITION OF BUILT UP AREA HAD ALSO TO BE TAKEN AS GIVEN BY THE LOCAL AUTHORITIES. IN THIS REGARD, HE AGAIN RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF AIR DEVELOP ERS (SUPRA). THE LEARNED COUNSEL THEREAFTER REFERRED TO THE M.P. BHOOMI VIKAS ADHINIYAM READ WITH BHOPAL MASTER PLAN TO SHOW THAT THE ITEMS ADDED BY THE ASSESSING OFFICER WERE NOT TO BE ADDED AND, THUS, T HE CALCULATION DONE BY THE TECHNICAL EXPERT APPOINTED BY THE ASSESSEE WAS CORRECT AND CONSEQUENTLY, THE AREA OF THREE FLATS WAS ALSO LESS THAN 1500 SQ.FT. AS REGAR D TO THE SPECIFIC ISSUE OF AREA OF FLAT NO. A/6, THE LEA RNED COUNSEL SUBMITTED THAT AT THE TIME OF PHYSICAL VERIFICATION, ONLY THE TENANT WAS AVAILABLE AND THE OWNER OF THAT FLAT, SUBSEQUENTLY FILED A CONFIRMATI ON TO THE EFFECT THAT 400 SQ.FT. AREA HAD BEEN CONSTRUCTE D BY HIM AFTER PURCHASE OF THE PROPERTY AND THE SAME WAS TO BE ACCEPTED. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE A.O. DID NOT CHANGE THE COST OF CONSTRUCTION OF THIS FLAT FOR THE ADDITIONAL CONSTRUCTION. HENCE, THE BU ILT UP AREA AS CLAIMED BY THE ASSESSEE COULD NOT BE DISTUR BED. IT WAS ALSO CONTENDED THAT THE A.O. HAD STATED THAT IT 16 WAS STATED BY THE ASSESSEE AND HER REPRESENTATIVE I N THE COURSE OF PHYSICAL VERIFICATION ON 8.12.06 THAT NO ADDITIONAL CONSTRUCTION WAS DONE BY THE OWNER, WHI CH WAS NOT A CORRECT FACT AS NEITHER ANY STATEMENT WAS RECORDED, NOR ANY QUESTION WAS PUT TO THE ASSESSEE OR HER REPRESENTATIVE IN THIS REGARD. THE LEARNED COUN SEL FURTHER CONTENDED THAT THE ASSESSEE WAS ENTITLED FO R PRO- RATA DEDUCTION, WHICH WAS DULY SUPPORTED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF AIR DEVELOP ERS (SUPRA), THE DECISION OF THE SPECIAL BENCH IN THE C ASE OF BRAHMA ASSOCIATES AS REPORTED IN 22 DTR 1, AND ALSO BY THE DECISION OF THE CALCUTTA BENCH OF THE TRIBU NAL IN THE CASE OF ACIT VS. BENGAL AMBUJA HOUSING DEVELOPMENT LIMITED, WHICH HAD ALSO BEEN CONFIRMED BY THE HON'BLE CALCUTTA HIGH COURT. THE LEARNED COUNSEL ALSO DREW OUR ATTENTION TO THE RELEVANT POR TION OF THE JUDICIAL DECISIONS RELIED BY HIM. 10. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE FACT THAT THE A.O. HAD ALSO APPOIN TED A TECHNICAL EXPERT , NAMELY, SHRI AMOGH KUMAR GUPTA, WHO VIDE ITS REPORT DATED 2.12.2008 HAD ALSO STATED THAT FLATS CONSTRUCTED BY THE ASSESSEE WERE HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT. HOWEVER, THE A.O. COMPLETELY IGNORED THIS REPORT. THE LEARNED COUNSEL ALSO SUBMITTED THAT EVEN AS PER THE A.O., ALL THE F LATS WERE NOT HAVING THE SAME BUILT UP AREA, BECAUSE EVE N AS PER THE VERSION OF A.O. IN THE ASSESSMENT ORDER AT PAGE 6 WERE THAT HOUSE NO. A/6, WAS QUITE BIGGER THAN TH IS CATEGORY OF OTHER HOUSES IN THE PROJECT. 11. THE LD. CIT DR, IN THE REJOINDER, MAINLY REITERATED THE SUBMISSIONS MADE EARLIER AND FURTHER SUBMITTED THAT THE OBJECT OF STATE GOVERNMENT RULES/ BY LAWS WERE DIFFERENT FROM THE OBJECT OF PROVISIONS OF SECTION 80IB(10), HENCE, SAID RULES COULD NOT BE CONCLUSIVE . HE FURTHER CONTENDED THAT ONCE THE MEASUREMENT TAKEN B Y THE DEPARTMENT HAD BEEN SIGNED BY THE PROJECT MANAGER OF THE ASSESSEE, AS EVIDENT FROM THE ASSESSMENT RECORD, HENCE, THERE WAS NO NECESSITY FO R THE A.O. TO CONSIDER THE REPORT OF THE TECHNICAL EXPERT SUBMITTED SUBSEQUENTLY, AS THE MATTER HAD TO BE GIV EN FINALITY. HE FURTHER CONTENDED THAT IN THE CASE OF AIR DEVELOPERS ONLY A FEW FLATS WERE FOUND TO BE OF MOR E THAN 1500 SQ.FT. HENCE, WHEREAS IN THE PRESENT CASE , ALL 17 THE FLATS MEASURED ON SAMPLE BASIS WERE FOUND TO HA VE A BUILT UP AREA OF MORE THAN 1500 SQ.FT. HENCE, THIS DECISION WAS NOT OF ANY HELP TO THE ASSESSEE. 12. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW. 13. IT IS NOTED THAT THE ASSESSEE IS ENGAGED IN THE CONSTRUCTION OF HOUSES. AT THE IMPUGNED HOUSES HAVE BEEN CONSTRUCTED IN THREE PHASES HAVING DIFFERENT DIMENSIONS AND DESIGNS. THE A.O. HAS, HOWEVER, TAKE N THE MEASUREMENT PHYSICALLY ONLY OF ONE CATEGORY OF HOUSES AND THAT TOO HAS BEEN CARRIED OUT BY NON- TECHNICAL STAFF, ALTHOUGH THE DEPARTMENT CAN UTILIZ E THE SERVICES OF TECHNICAL PERSONNEL FOR THIS PURPOSE. T HUS, AT THE VERY OUT-SET, WE ARE OF THE OPINION THAT SAM PLE ADOPTED BY THE ASSESSING OFFICER IS NOT REPRESENTAT IVE OF WHOLE OF THE HOUSING PROJECT AND, THEREFORE, THE VERY BASIS AS SUCH ACTION OF A.O. IS FLAWED. IT IS FURTH ER NOTED THAT EVEN THE MEASUREMENT OF THESE FLATS, NAMELY, A /6 HAS BEEN REVISED BY THE DEPARTMENT, ITSELF, WHICH SHOWS THAT THE MEASUREMENT OF SAMPLE FLATS HAS ALSO NOT BEEN DONE IN A SCIENTIFIC MANNER. THE OTHER FACT, W HICH IS IMPORTANT IS THAT THE A.O. ALSO TOOK THE HELP OF TECHNICAL EXPERT AND EVEN AS PER HIS REPORT AFTER T AKING INTO CONSIDERATION, THE LOCAL BY- LAWS, THE AREA OF CERTAIN FLATS MEASURED BY THE DEPARTMENT IS LESS THAN 1500 SQ.FT. AND THE A.O. HAS NOT GIVEN ANY COGNIZANCE TO THIS FACT WHICH MAKES THE APPROACH OF A.O. UNJUSTIFIED. WE FURTHER FIND THAT WHATEVER EXPLANATIONS/CLARIFICATIONS/OBJECTIONS HAVE BEEN RA ISED BY THE ASSESSEE SUBSEQUENT TO THE MEASUREMENT DONE BY THE DEPARTMENT, THE SAME HAVE BEEN REJECTED IN A SUMMARILY MANNER MERELY FOR THE REASON THAT DURING THE COURSE OF PHYSICAL MEASUREMENT REPRESENTATIVE OF TH E ASSESSEE WERE PRESENT AND IT ALSO SIGNED THE MEASUREMENTS TAKEN BY THE DEPARTMENT. IN OUR OPINION, THIS APPROACH OF THE A.O., WHO IS A JUDICI AL OFFICER IS NOT JUSTIFIED, BECAUSE BEFORE MAKING ADD ITION OR REJECTING A GENUINE CLAIM OF THE ASSESSEE, IT IS THE BOUNDEN DUTY OF THE A.O. TO DEAL WITH THE OBJECTION S OF THE ASSESSEE. WE ARE FURTHER UNABLE TO UNDERSTAND W HY THE A.O. DID NOT DO THE RE-VERIFICATION EXERCISE TO FIND OUT THE CORRECT MEASUREMENT. WE ALSO FIND THAT AS P ER 18 THE LD. CIT DR, THE SALE CONSIDERATION IS DIFFERENT WITH REFERENCE TO DIFFERENT FLATS AND, THEREFORE, THERE MUST BE DIFFERENT SIZES. IN OUR OPINION, THIS FACT RATHER S UPPORTS THE CLAIM OF THE ASSESSEE, BECAUSE THIS AGAIN GOES TO SHOW THAT SAMPLE TAKEN BY THE DEPARTMENT IS NOT TH E REPRESENTATIVE ONE. THUS, ON THE BASIS OF ABOVE FAC TS ITSELF, THE ACTION OF THE A.O. IS NOT CORRECT IN LA W. 14. HAVING STATED SO, NOW WE SHALL DEAL WITH OTHER ASPECTS. ON THE ASPECT OF NATURE OF PROVISIONS OF S ECTION 80IB(14)(A),WE FIND THAT IT IS A SETTLED PROPOSITIO N OF LAW THAT WHEN A PARTICULAR TERM IS DEFINED BY AN AMENDMENT, WHICH RESULTS INTO INCREASE/LEVY OF CIVI L LIABILITY, THE SAME HAS TO BE CONSIDERED AS THE SUBSTANTIVE ONE, HENCE PROSPECTIVE. THE JUDICIAL DECISIONS CITED BY THE ASSESSEE ALSO SUPPORT THIS V IEW. ACCORDINGLY, WE REJECT THE CONTENTION OF THE REVENU E THAT THE PROVISIONS OF SECTION 80IB(14)(A) ARE OF 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 RE GARD, IT IS ALSO A SETTLED PRINCIPLE THAT SOME COMMON SEN SE APPROACH OR DICTIONARY MEANING IF THE TERM IS OF GE NERAL NATURE SHOULD BE FOUND OUT OR IF THE TERM IS OF TEC HNICAL NATURE, THEN THE DEFINITION OF SUCH TERM USED IN OT HER LAWS SHOULD BE TAKEN INTO CONSIDERATION. ACCORDINGL Y, WE HOLD THAT THE MEANING OF TERM BUILT UP AREA PR IOR TO INSERTION OF DEFINITION CLAUSE IN THE ACT HAS TO BE FOUND OUT AS PER THE LOCAL LAW I.E. RULES AND REGUL ATIONS OF BHOPAL MUNICIPAL CORPORATION AS WELL AS FROM M.P . BHOOMI VIKAS RULES AND AS A CONSEQUENCE THEREOF, TH E BUILT UP AREA OF SUCH FLATS IS UNDISPUTEDLY LESS TH AN THE SPECIFIED LIMIT. HENCE, THE ASSESSEE, IN OUR OPINIO N, IS ELIGIBLE FOR DEDUCTION U/S 80IB(10). IN THIS VIEW O F THE MATTER, THERE REMAINS NO QUESTION FOR ANY PRO-RATA DEDUCTION. HOWEVER, WE CONSIDER IT PERTINENT TO STA TE THAT IT IS BENEFICIAL PROVISION AND, THEREFORE, IT SHOULD BE INTERPRETED IN A LIBERAL MANNER AND IN CASE IT IS NECESSARY THEN THE ASSESSEE CAN BE GRANTED PRO RATA DEDUCTION. IN THIS REGARD, WE ARE FURTHER OF THE VI EW THAT IF THE LEGISLATOR DID NOT WANT TO GIVE ANY PRO-RATA DEDUCTION, IT COULD HAVE BEEN PROVIDED BY THE LEGI SLATOR SPECIFICALLY THAT IF ONE HOUSE WAS FOUND TO BE HAVI NG BUILT UP AREA ON THE GROUND OF SPECIFIED LIMIT, THE N THE 19 ASSESSEE WOULD NOT BE ENTITLED FOR ANY DEDUCTION U/ S 80IB(10). IN THIS VIEW OF THE MATTER, WE DISMISS AL L THE GROUNDS RAISED BY THE REVENUE. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 16. NOW, WE SHALL TAKE UP ASSESSEES CROSS OBJECTION, WHEREIN THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN REJECTING ITS CLAIM FOR DEDUCTION U/S 80IB IN RESPECT OF THREE SAMPLE HOUSES PHYSICALLY MEASUR ED BY THE DEPARTMENT. 17. THE FACTS HAS ALREADY BEEN NARRATED AS ABOVE AND HAVE NO NECESSITY TOBE REPEATED AGAIN. HOWEVER, HE DREW OUR ATTENTION TO THE FINDING OF THE LD. CIT(A) WHEREIN THE LD. CIT(A) HAD ACCEPTED THAT THE AREA O F THESE FLATS WAS ALSO LESS THAN THE SPECIFIED LIMIT, HENCE, THE LD. CIT(A) SHOULD HAVE ACCEPTED THE CLAIM OF TH E ASSESSEE IN TOTO. 18. THE LD. CIT DR, ON THE OTHER HAND, PREFERRED TO REL Y ON THE ORDER OF THE LD. CIT(A) ON THIS ASPECT. 19. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW. 20. IT IS NOTED THAT THE LD. CIT(A) HAS OBSERVED IN THE FINDINGS REPRODUCED HEREINBEFORE THAT THE MEASUREME NT OF DUPLEX FLAT TYPE A/1 AND TYPE A/2 AS PER THE BHOOMI VIKAS RULES, 1984, WAS LESS THAN 1500 SQ.FT. AND THE ASSESSEE HAS COMPLIED WITH ALL OTHER CONDIT IONS AND, INSPITE OF THAT THE LD. CIT(A) HAS GRANTED ONL Y PRO-RATA DEDUCTION. WE FURTHER FIND THAT THE LD. CI T(A) HAS NOT GIVEN ANY SPECIFIC FINDINGS ON THE LEGAL CONTENTIONS RAISED BY THE ASSESSEE, WHICH RESULTS I NTO AN INFERENCE THAT THE LD. CIT(A) HAS NOT ACCEPTED THE PLEA OF ASSESSEE REGARDING APPLICABILITY OF LOCAL RATES TO COMPUTE BUILT UP AREA. HOWEVER, SINCE WE HAVE ACCEPTED THE LEGAL CONTENTIONS RAISED BY THE ASSESS EE IN THIS REGARD, HENCE, WE FIND NO REASON NOT TO GRANT A DEDUCTION THEREON U/S 80IB(10). ACCORDINGLY, WE ACC EPT THIS GROUND OF THE CROSS OBJECTION FILED BY THE ASS ESSEE AND DIRECT THE A.O. TO GRANT DEDUCTION U/S 80IB AS CLAIMED BY THE ASSESSEE. 21. IN THE RESULT, THE CROSS OBJECTION STANDS ALLOWED. 22. TO SUM UP, THE REVENUES APPEAL IS DISMISSED AND CROSS OBJECTION IS ALLOWED. 20 THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 16 TH APRIL, 2010. 6. AS PER THE REPORT OF THE ENGINEER, I.A. QURESHI (CBDT-GOVT.- APPROVED VALUER), THE NET BUILT UP AREA IN THE PRES ENT APPEAL IS 1462.77 SQ.FT. WHICH IS LESS THAN THE PRESCRIBED LI MIT OF 1500 SQ.FT. THIS ALSO PROVES THE CASE OF THE ASSESSEE. I N VIEW OF THE RATIO LAID DOWN IN THE AFORESAID DECISION OF THE TR IBUNAL AND THE FACTS NARRATED BEFORE US, WE ARE OF THE VIEW THAT I T IS A FIT CASE WHERE THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80I B(10) HAS TO BE ALLOWED. EVEN OTHERWISE, SECTION 80IB IS A BENEF ICIAL SECTION, THEREFORE, IT HAS TO BE CONSTRUED LIBERALLY AS THE SAME IS FOR GRANTING INCENTIVE FOR PROMOTING GROWTH AND DEVELOP MENT. THE RESTRICTION ON IT TOO HAS TO BE CONSTRUED SO AS TO ADVANCE THE OBJECTIVE OF THE PROVISION AND NOT TO FRUSTRATE IT AS WAS HELD BY THE HONBLE APEX COURT IN THE CASE OF BAJAJ TEMPO L IMITED V. CIT (1992) 62 TAXMAN 482 (SC). FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 30 TH DECEMBER, 2010. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH DECEMBER, 2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/