Deputy Commissioner of Income-tax, V. Amit Enterprises Housing Ltd., Pune

ITA 1174/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1893 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SUBHASH K R
• Keywords: Additional evidence
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , AM . / ITA NO. 1 174 /PN/201 4 / ASSESSMENT YEAR : 20 0 9 - 1 0 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), PUNE . / APPELLANT VS. AMIT ENTERPRISES HOUSING LTD., 1902, AMIT HOUSE, BAJIRAO ROAD, SADASHIV PET, PUNE 411 030 . / RESPONDENT / APPELLANT BY : DR. SUBHASH K.R., JCIT / RESPONDENT BY : S /S HRI NIKHIL PATHAK AND SUHAS BORA / / / DATE OF HEARING : 11 . 0 4 .201 6 / DATE OF PRONOUNCEMENT: 27 . 0 4 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - I , PUNE , DATED 29 . 1 1 .20 1 3 RELATING TO ASSESSMENT YEAR 20 0 9 - 1 0 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX AC T , 1961 (IN SHORT THE ACT) . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF I NCOME - TAX(APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE PROJECT HAD BEEN APPROVED AS A 'RESIDENTIAL + COMMERCIAL PROJECT' WHICH HAD ALSO BEEN CONFIRMED BY THE PMC AND NOT AS A 'HOUSING PROJECT'. ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 2 3. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERR ED IN HOLDING THAT THE AMENDED PROVISIONS U / S.80IB(10)(D) AND 80IB(10)(C) WOULD NOT BE APPLICABLE TO PROJECTS COMMENCED PRIOR TO 01.04.2005. 4. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN COMING TO THE ABOVE CONCLUSION ON THE INCORRECT PREMI SE THAT ESTOPPEL CAN BE INVOKED AGAINST THE GOVERNMENT IN EXERCISE OF ITS LEGISLATIVE POWERS. 5. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN HOLDING THAT THOUGH THE AMENDED PROVISION OF SECTION 80IB(10)(D) AND 80IB(14)(A) CAME INTO OPERATION W.E.F. 0 1.04.2005, THOSE WERE NOT APPLICABLE IN THE CASE OF ASSESSEE RELATING TO A.Y.2005 - 06 WITHOUT APPRECIATING AND APPLYING THE PRINCIPLE LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ISTHMIAN STEAMSHIP LINE, 20 ITR 52 AND KARIMTHARUVI TEA ESTATE LTD., 60 ITR 262. 6. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN NOT APPRECIATING THAT EVEN IF THE AMENDED LAW WAS PROSPECTIVE, THE LIMITATION OF RESTRICTIONS U / S.80IB(1)(D) AND 80IB(14)(A) ARE STILL APPLICABLE TO A.Y.2005 - 06 RELYING UPON RELIANCE JUTE INDUSTRIES VS. CIT REPORTED IN 120 ITR 921(SC). 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 3. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2008 - 09. HE FURTHER POINTED OUT THAT IN THE PRECEDING YEAR, THE ASSESSEE WAS A PARTNERSHIP CONCERN AND DURING THE YEAR UNDER CONSIDERATION, THE SAID FIRM HAD BEEN CONVERTED INTO A LIMITED COMPANY. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER REFERRED TO THE ORDERS OF CIT(A) AT PAGE 40, WHEREIN HE HAD REFERRED TO THE ISSUE BEING IDENTICAL AS IN ASSESSMENT YEAR 2008 - 09 , WHERE IN ADDITIONAL GROUNDS OF APPEAL WERE ADMITTED. HE FURTHER EXPLAINED THAT THE PROJECT WAS APPROVED PRIOR TO 01.04.2005 , UNDER WHICH TWO COMMERCIAL BUILDINGS WERE CONSTRUCTED AND NO DEDUCTION WAS CLAIMED UNDER SECTION 80IB(10) OF THE ACT. FURTHER, IN BUILD ING F, AREA OF FLATS INCLUDING BALCONY EXCEEDED 1500 SQ.FT. AND NO DEDUCTION WAS FURTHER CLAIMED UNDER SECTION 80IB(10) OF THE ACT . IN RESPECT OF BUILDING D, THERE WERE FOUR ADJACENT FLATS, ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 3 WHERE THE AREA EXCEEDED 1500 SQ.FT. AND AGAIN DEDUCTION WAS NOT C LAIMED BY THE ASSESSEE UNDER SECTION 80IB(10) OF THE ACT. HOWEVER, THE ASSESSING OFFICER DENIED ENTIRE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN VIEW OF THE AMENDMENTS TO THE SAID SECTION . THE CIT(A) ON THE OTHER HAND, ALLOWED DEDUCTION ON ALL ACCOUNTS EXCEPT ON WHICH ITEMS WHICH WERE NOT CLAIMED IN THE RETURN OF INCOME. OUR ATTENTION WAS DRAWN TO THE ORDER OF TRIBUNAL IN THIS REGARD RELATING TO ASSESSMENT YEAR 2008 - 09, WHEREIN ADDITIONAL GROUNDS OF APPEAL IN THIS REGARD WERE ADMITTED AND R ELIEF WAS GIVEN TO THE ASSESSEE. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, POINTED OUT THAT THE PROJECT APPROVED OF THE ASSESSEE WAS RESIDENTIAL CUM COMMERCIAL PROJECT AND THE SAME WAS VIOLATIVE AS PER PROVISIONS OF S ECTION 80IB(10) OF THE ACT, WHICH REFERRED TO HOUSING PR OJECT BEING APPROVED BY THE STATE AUTHORITIES. IT WAS FURTHER POINTED OUT THAT IN THE SAID PROJECT, THERE WAS STATE AUTHORITIES. IT WAS FURTHER POINTED OUT THAT IN THE SAID PROJECT, THERE WAS VIOLATION OF MAXIMUM COMMERCIAL AREA AND HENCE, THE ASSESSEE WAS NOT ENTITLED TO THE CLAI M OF DED UCTION UNDER SECTION 80IB(10) OF THE ACT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF DEVELOPING AND CONSTRUCTION OF RESIDENTIAL PROJECTS. FOR THE YEAR UNDER CONSIDERATION, THE ASSES SEE HAD DECLARED TOTAL INCOME AT RS. 2,42,19,620/ - . THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AT RS. 4,83,83,848/ - IN RESPECT OF THE PROJECT NAMELY TREASURE PARK AND SUM OF RS.34,35,747/ - IN RESPECT OF OTHER PROJECT NAMELY VED VIHAR. THE CLAIM OF DEDUCTION FOR PROJECT VED VIHAR WAS ALLOWED BY THE ASSESSING OFFICER. HOWEVER, IN RESPECT OF PROJECT TREASURE PARK , THE ASSESSING OFFICER NOTED THAT IT WAS SITUATED AT SURVEY NO.61 AND CONSISTED OF 352 RESIDENTIAL UNITS, 23 SHOPS AND 3 SHOWROOMS. ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 4 THERE WERE 10 BUILDINGS I.E. A TO H AND J & K , WHICH HAD TOTAL BUILT UP AREA OF 4,47,620 SQ.FT. THE BUILDINGS A TO H WERE RESIDENTIAL AND BUILDINGS J & K WERE COMMERCIAL BUILDINGS / SHOPS. THE ASSESSING OFFICER ALSO NOTED THAT IN BUILD INGS A TO H, PART OF BUILDING D AND ENTIRE BUILDING F HAD NON - 80IB(10) RESIDENTIAL UNITS WITH BUILT UP AREA OF EACH UNIT TO BE MORE THAN 1500 SQ.FT. THE TOTAL RESIDENTIAL BUILT UP AREA WAS 4,35,295/ - , OUT OF WHICH THE TOTAL BUILT UP AREA IN RESPECT OF BUI LDING F AND PART OF BUILDING D, WHICH HAD FLATS EXCEEDING 1500 SQ.FT., WAS 51,302 SQ.FT. THE REST OF AREA WHERE BUILT UP AREA OF EACH FLAT WAS LESS THAN 1500 WAS 3,33,993 SQ.FT. FURTHER, THE BUILDINGS J & K NAMED AS SANT NAGAR SHOPS WERE EXCLUSIVELY COMM ERCIAL BUILDINGS, WHICH HA D TOTAL BUILT UP AREA OF 12,325 SQ.FT. THE ASSESSING OFFICER NOTED THAT THE AUDITOR IN FORM NO.10CCB HAD MENTIONED THAT THE HOUSING PROJECT FOR WHICH THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS CLAIMED COMPRISED OF RESIDE NTIAL UNITS HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT. AND BUILT UP AREA OF MORE THAN 1500 SQ.FT. AND THE ASSESSEE CLAIMED PROPORTIONATE DEDUCTION ON PROFITS ATTRIBUTABLE TO RESIDENTIAL FLATS HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT. FURTHER, THE A SSESSEE HAD NOT CLAIMED ANY DEDUCTION ON THE PROFITS ATTRIBUTABLE TO COMMERCIAL PART OF PROJECT. IN VIEW OF ALL THIS, THE ASSESSING OFFICER OBSERVED THAT THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80IB(10) OF THE ACT WAS IN RESPECT OF THE PROJECT WHICH WAS RESIDENTIAL AND COMMERCIAL PROJECT AND HAD FLATS , WHERE BUILT UP AREA WAS IN EXCESS OF 1500 SQ.FT. IN VIEW THEREOF, AS PER THE ASSESSING OFFICER, THE ASSESSEE HAD NOT FULFILLED THE CONDITIONS LAID DOWN UNDER SECTION 80IB(10)(C) OF THE ACT AND 8 0IB(10)(D) OF THE ACT AND THE ASSESSEE WAS ASKED AS TO WHY THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT FOR THIS PROJECT SHOULD NOT BE DENIED. THE ASSESSEE PUT UP ITS CASE BEFORE THE ASSESSING OFFICER AND POINTED OUT THAT EVEN IF ALL THE BUILDINGS IN P ROJECT TREASURE PARK WERE CONSIDERED AS PART OF ONE HOUSING PROJECT, ALL THE ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 5 CONDITIONS HAVE BEEN SATISFIED EXCEPT FOR THE CONDITION RELATING TO MAXIMUM BUILT UP AREA AS PER CLAUSE (C) OF SECTION 80IB(10) OF THE ACT IN RESPECT OF PART OF BUILDING D AND B UILDING F. THE ASSESSEE FURTHER CONTENDED THAT ON THIS GROUND ALONE, THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF ELIGIBLE UNITS COULD NOT BE DENIED. WITHOUT PREJUDICE BASIS, THE ASSESSEE CLAIMED THAT THE PROPORTIONATE DEDUCTION UNDER SE CTION 80IB(10) OF THE ACT IN RESPECT OF ELIGIBLE RESIDENTIAL UNITS AND DEDUCTION OF RS. 1,71,831/ - ON THE COMMERCIAL SHOPS, WHICH WAS NOT CLAIMED IN THE RETURN OF INCOME MAY BE ALLOWED. THE ASSESSING OFFICER HOWEVER, REJECTED THE CLAIM OF ASSESSEE AS THE P ROJECT DEVELOPED BY THE ASSESSEE WAS ONE SINGLE PROJECT AND WAS A RESIDENTIAL PLUS COMMERCIAL, WHICH IS MENTIONED IN THE COMMENCEMENT CERTIFICATE GIVEN BY PUNE MUNICIPAL CORPORATION AND IT ALSO MENTIONS THE SHOPS AND SHOWROOMS I.E. COMMERCIAL PREMISES. IN VIEW THEREOF, THE ASSESSING OFFICER HELD THAT THE PROJECT TREASURE PARK COULD NOT BE CALLED AS HOUSING PROJECT IN THE FIRST PLACE AND FURTHER SINCE THE CONDITIONS LAID DOWN IN THE SAID SECTION WERE NOT SATISFIED, THE DEDUCTION CLAIMED UNDER SECTION 80IB (10) OF THE ACT WAS HELD TO BE NOT AVAILABLE FOR THE PROJECT. THE CLAIM OF ASSESSEE FOR PROPORTIONATE DEDUCTION IN RESPECT OF ELIGIBLE UNITS WAS ALSO DENIED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAID DEDUCTION WAS ADMISSIBLE TO THE HOUSING PROJE CT AS A WHOLE AND NOT FOR PORTION THEREOF. THE ASSESSING OFFICER IN THIS REGARD, PLACED RELIANCE ON VARIOUS DECISIONS OF TRIBUNAL AND DENIED THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT. 6. BEFORE THE CIT(A), THE ASSESSEE EXPLAINED THAT CERT AIN AREAS OF PROJECT WERE NOT CONSIDERED B Y IT AS PART OF ELIGIBLE HOUSING PROJECT FOR THE PURPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. IT WAS FURTHER CONTENDED THAT WHERE THE OTHER BUILDINGS IN THE PROJECT WERE SATISFYING THE CO NDITIONS LAID DOWN IN SECTION 80IB(10) OF THE ACT, THE ASSESSING OFFICER WAS ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 6 NOT JUSTIFIED IN DISALLOWING THE CLAIM MADE BY THE ASSESSEE. IT WAS CLAIMED BY THE ASSESSEE THAT THE BUILDINGS F, J, K AND 4 FLATS OF BUILDING D WERE NOT PART OF ELIGIBLE HOUSING PROJECTS AND EVEN IF THEY WERE PART OF ELIGIBLE HOUSING PROJECTS, THE DEDUCTION WAS STILL ALLOWABLE ON THE PROFITS INCLUDING THE SAID BUILDINGS AND 4 FLATS OF BUILDING D. VARIOUS PROPOSITIONS IN THIS REGARD WERE RAISED BY THE ASSESSEE BEFORE THE CIT(A), WHICH ARE INCORPORATED AT PAGES 14 TO 19 OF THE PAPER BOOK. THE CIT(A) REFERRED TO THE EARLIER DECISION OF CIT(A) FOR ASSESSMENT YEAR 2008 - 09 AND THE PROPOSITIONS RAISED BY THE ASSESSEE THAT IT WAS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF BUILT UP AREA OF BUILDING F, WHERE THE TOTAL AREA EXCEEDED 1500 SQ.FT. ON ACCOUNT OF BALCONY AND ALSO IN RESPECT OF 4 FLATS IN BUILDING D, WHICH WERE SOLD INDEPENDENTLY, BUT WERE MERGED BY THE FLAT OWNERS. FURTHER, IN RESPECT OF BUILT UP AREA OF SHOPS AND COMMERCIAL ESTABLISHMENTS IN THE HOUSING PROJECT, THE ASSESSEE CLAIMED THAT SINCE THE PROJECT WAS SANCTIONED PRIOR TO AMENDMENT BROUGHT IN BY SECTION 80IB(10) (D) OF THE ACT, THE ASSESSEE WAS ENTITLED TO THE CLAIM OF DEDUCTION UND ER SECTION 80IB(10) OF THE ACT. THE CIT(A) REFERRED TO THE DECISION OF HIS PREDECESSOR RELATING TO ASSESSMENT YEAR 2008 - 09 , WHEREIN THE ISSUE WAS EXAMINED IN DETAIL AND IT WAS HELD THAT THERE WAS NO VIOLATION OF CONDITIONS BY THE ASSESSEE AS THE PROJECT O F THE ASSESSEE WAS APPROVED BY LOCAL AUTHORITY PRIOR TO 01.04.2005 . IN VIEW THEREOF, THE CIT(A) ALLOWED THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE FOR ALLOWING DEDUCTION IN RESPECT OF 4 UNITS IN BUILDING D, ALL UNITS IN BUILDING F AND COMMERC IAL UNITS IN BUILDINGS J & K. THE CIT(A) IN ASSESSMENT YEAR 2008 - 09 HAD ADMITTED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND IN VIEW OF THE POWERS OF CIT(A) BEING CO - TERMINUS WITH THE POWERS OF ASSESSING OFFICER AND IN VIEW OF THE PROVISIONS OF RULE 46 OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) , FRESH EVIDENCE FILED, WAS ADMITTED FOR ADJU D I C ATION AND THE CIT(A) WHILE DECIDING THE ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 7 PRESENT APPEAL RELATING TO ASSESSMENT YEAR 2009 - 10 , SIMILARLY ADMITTED ADDITIONAL EVIDENCE FOR ADJUDICATION FOR THE YEAR UNDER CONSIDERATION ALSO AND NOTED THAT THERE WAS NO CHANGE EITHER IN THE FACTUAL ASPECTS OF THE MATTER, EXCEPT THE QUANTUM OF DEDUCTION CLAIMED AND THE STATUS OF ASSESSEE OR THE RELEVANT LEGAL POSITION FOR THE ASSESSMENT YEAR FOR THE YEAR UNDER C ONSIDERATION. HE THUS, HELD THAT THE FINDINGS AND CONCLUSIONS DRAWN BY THE CIT(A) VIDE ORDER DATED 27.08.2013 FOR ASSESSMENT YEAR 2008 - 09 SHALL HOLD GOOD FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE PROJECT TREASURE PARK WAS HELD TO BE ELIGIBLE F OR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ALSO. THE ALTERNATE PLEA OF THE ASSESSEE ON WITHOUT PREJUDICE BASIS THAT PROPORTIONATE DEDUCTION IN RESPECT OF UNITS WHICH SATISFIED THE REQUIREMENTS OF SECTION 80IB(10) OF THE ACT MAY BE ALLOWED, WAS HELD TO BE NOT SURVIVE, IN VIEW OF THE ASSESSEE SUCCEEDING ON THE MAIN ASPECTS OF THE ISSUE. 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN THIS REGARD AND 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN THIS REGARD AND HAS RAISED OBJECTIONS THAT WHERE THE PROJECT WAS APPROVED AS A RESIDENTIAL AND COMMERCIAL PR OJECT AND NOT AS HOUSING PROJECT, THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. FURTHER, GROUNDS OF APPEAL HAVE BEEN RAISED AGAINST NON - FULFILLMENT OF AMENDED PROVISIONS OF SECTION 80IB(10)(C) OF THE ACT AND 80 IB(10)(D) OF THE ACT . 8. WE FIND THAT IDENTICAL ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF PROJECT NAMED TREASURE PARK AROSE BEFORE THE TRIBUNAL IN ITA NO.2210/PN/2013 , RELATING TO ASSESSMENT YEAR 2008 - 09 AND VIDE ORDE R DATED 23.09.2015 , THE TRIBUNAL CONSIDERED THE ORDER OF ASSESSING OFFICER IN DENYING THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AND THE PROPOSITIONS RAISED BEFORE THE CIT(A) AND THE ADDITIONAL EVIDENCES FILED UNDER RULE 46A OF THE RULES BEFORE THE CI T(A) AND THE ORDER OF CIT(A) IN HOLDING THAT ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 8 THE ASSESSEE WAS ENTITLED TO CLAIM THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF BUILDING F, 4 FLATS IN BUILDING D AND COMMERCIAL SHOPS IN BUILDINGS J & K . THE TRIBUNAL HELD AS UNDER: - 23. WE H AVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE IN THE INSTANT CASE HAS CONSTRUCTED A HOUSING PROJECT AT SURVEY NO.61, SAHAKAR NAGAR, PUNE WHICH COMPRISE OF 10 BUILDINGS A,B,C,D,E,F,G, H, J &K. THE BUILDINGS A TO H ARE RESIDENTIAL BUILDINGS AND THE BUILDINGS J &K ARE EXCLUSIVELY COMMERCIAL BUILDINGS/SHOPS. THE TOTAL RES IDENTIAL BUILT UP AREA OF THE PROJECT IS 97.25% AND THAT OF THE COMMERCIAL/SHOP IS 2.75% WHOSE AREA TOTALS TO 12,325 SQ.FT. WE FIND THE ASSESSEE IN ITS RETURN OF INCOME HAD CLAIMED DEDUCTION ONLY IN RESPECT OF THE RESIDENTIAL UNITS HAVING BUILT UP AREA L ESS THAN 1500 SQ.FT WHICH IS EVIDENT FROM THE FORM 10CCB FILED ALONG WITH THE RETURN OF INCOME WHEREIN IT HAS BEEN MENTIONED THAT THE HOUSING PROJECT COMPRISES OF RESIDENTIAL UNITS HAVING BUILT UP AREA OF BOTH MORE OR LESS THAN 1500 SQ.FT. IN OTHER WORDS, THE ASSESSEE HAS CLAIMED PROPORTIONATE DEDUCTION U/S.80IB(10). 24. WE FIND THE COMMENCEMENT CERTIFICATE ISSUED BY PMC CLEARLY SHOWS THAT APPROVAL IS RESIDENTIAL + COMMERCIAL AND THE OCCUPANCY/COMPLETION CERTIFICATE MENTIONS THE COMPLETION OF BOTH THE SHO PS AND SHOWROOMS. WE FIND THE AO DENIED THE CLAIM OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT (A) THE PROJECT APPROVED BY PMC IS BOTH RESIDENTIAL AND COMMERCIAL (B) THE PROJECTED CONSISTED OF COMMERCIAL AREA OF 12,325 SQ.FT. (C) THE BUILT UP AREA OF ALL THE UNITS IN BUILDING F EXCEEDED 1500 SQ.FT. AND (D) THE BUILT UP AREA OF 4 FLATS AFTER BEING COMBINED EXCEEDED 1500 SQ.FT. IN RESPECT OF BUILDING D. BEING COMBINED EXCEEDED 1500 SQ.FT. IN RESPECT OF BUILDING D. 25. WE FIND BEFORE THE CIT(A) THE ASSESSEE TOOK ADDITIONAL GROUND THAT IT IS ENTITLED TO CLAIM DEDUCTIO N U/S.80IB(10) IN RESPECT OF BUILDING F AS WELL AS J AND K AND THE 4 FLATS OF BUILDING D. WE FIND AFTER CONSIDERING THE VARIOUS SUBMISSIONS MADE BY THE ASSESSEE THE LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE ENTIRE HOUSING PRO JECT. WHILE DOING SO, HE HELD THAT SINCE THE PROJECT HAS BEEN APPROVED ON 17 - 12 - 2004 WHICH IS PRIOR TO 01 - 04 - 2005 , THEREFORE, THE AREAS COVERED BY TERRACES AND BALCONIES ARE TO BE EXCLUDED FROM THE BUILT UP AREA AND THEREFORE THE UNITS OF BUILDING F, WHE RE NONE OF THE UNITS EXCEED 1500 SQ.FT. AFTER REDUCING THE TERRACES AND BALCONIES AND THEREFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10). SO FAR AS BUILDINGS J AND K ARE CONCERNED HE HELD THAT SINCE THE PROJECT IS APPROVED PRIOR TO 01 - 04 - 2005, T HEREFORE, THE LIMIT OF 5% OR 2000 SQ.FT. WHICHEVER IS LESS IS NOT APPLICABLE TO THE PROJECT OF THE ASSESSEE. FOR THE ABOVE PROPOSITION HE RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES REPORTED IN 333 ITR 289 WHER E IT HAS BEEN HELD THAT PRIOR TO THE AMENDMENT THERE WAS NO RESTRICTION IN THE AREA OF COMMERCIAL BUILDINGS AND THE SAID RESTRICTION IS NOT APPLICABLE TO THE EARLIER YEARS. EVEN THOUGH THE ASSESSMENT YEAR INVOLVED IN 2008 - 09 STILL THE LIMIT IS NOT APPLIC ABLE BECAUSE THE PROJECT WAS SANCTIONED PRIOR TO THE SAID AMENDMENT. 26. AS REGARDS THE THIRD OBJECTION OF THE AO THAT BUILT UP AREA OF 4 FLATS AFTER BEING COMBINED EXCEEDED 1500 SQ.FT. IN RESPECT OF BUILDING D, HE HELD THAT THE ASSESSEE HAS SOLD SEPARATE UNITS TO THE RESPECTIVE CUSTOMERS WHERE THE BUILT UP AREA OF EACH OF THE FLAT IS LESS THAN 1500 SQ.FT. AND THE CUSTOMERS AFTER PURCHASING THE FLATS HAVE COMBINED THEM AND THEREFORE THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10). ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 9 27. IT IS THE GRIEVANCE OF THE REVENUE THAT WHEN THE CLAIM OF DEDUCTION U/S.80IB(10) WAS NOT MADE FOR THE ENTIRE PROJECT IN THE RETURN OF INCOME FILED AND WHEN THE PROJECT HAS BEEN APPROVED AS A RESIDENTIAL CUM COMMERCIAL PROJECT, THEREFORE, THE ASSESSEE IS N OT ENTITLED TO DEDUCTION U/S.80IB(10) AND THE CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE CLAIM. 28. WE DO NOT FIND ANY MERIT IN THE ABOVE ARGUMENT OF THE REVENUE. IT HAS BEEN HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS REPORTED IN 349 ITR 336 THAT AN ASSESSEE IS ENTITLED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE AUTHORITIES BUT IS ALSO ENTITLED TO RAISE ADDITIONAL CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION TO PERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO DEAL NOT MERELY WITH ADDITIONAL GROUNDS WHICH BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW BUT WITH ADDITIONAL GROUNDS WHICH WERE AVAILABLE WHE N THE RETURN WAS FILED. THE WORDS COULD NOT HAVE BEEN RAISED MUST BE CONSTRUED LIBERALLY AND NOT STRICTLY. THERE MAY BE SEVERAL FACTORS JUSTIFYING THE REASON OF A NEW PLEA IN AN APPEAL AND EACH CASE MUST BE CONSIDERED ON ITS OWN FACTS. THEREFORE, THE F IRST GROUND OF THE REVENUE THAT WHEN THE CLAIM OF DEDUCTION U/S.80IB(10) WAS NOT MADE FOR THE ENTIRE PROJECT IN THE RETURN OF INCOME FILED OR IN THE COURSE OF ASSESSMENT PROCEEDINGS OR IN FORM 10CCB FILED BEFORE THE AO, THE CIT(A) ERRED IN ALLOWING THE CLA IM OF DEDUCTION U/S.80IB(10) OF THE ACT TO THE PROJECT IS DEVOID OF ANY MERIT AND ACCORDINGLY THE SAME IS DISMISSED. 29. NOW COMING TO THE OTHER ISSUES ARE CONCERNED, WE FIND THE AO DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT THE PROJE CT CONSISTED OF COMMERCIAL AREA OF 12,325 SQ.FT. AS MENTIONED EARLIER, THE PROJECT HAS BEEN APPROVED BY THE PMC ON 17 - 12 - 2004, I.E. PRIOR TO 01 - 04 - 2005. THE HONBLE SUPREME COURT IN THE CASE OF SARKAR BUILDERS (SUPRA) HAS HELD THAT WHERE HOUSING PROJECTS WERE SANCTIONED BEFORE THE AMENDMENT BUT HAVE BEEN HOUSING PROJECTS WERE SANCTIONED BEFORE THE AMENDMENT BUT HAVE BEEN COMPLETED AFTER 01 - 04 - 2005 WHEN THE AMENDED PROVISIONS CAME INTO OPERATION THE ASSESSEE WOULD BE ENTITLED TO THE DEDUCTION U/S.80IB(10)AND THE CONDITIONS MENTIONED IN CLAUSE (D) WOULD NOT APPLY. THUS, TH E BENEFIT RESTRICTED TO CASES WHERE THE AREA UTILIZED FOR SHOPS AND COMMERCIAL ESTABLISHMENTS DOES NOT EXCEED 5% OF AGGREGATE BUILT UP AREA OF HOUSING PROJECT OR 2000 SQ.FT WHICH WAS LESS DOES NOT TO APPLY TO PROJECTS WHERE APPROVAL OF LOCAL AUTHORITY WAS GRANTED PRIOR TO 01 - 04 - 2005 EVEN IF PROJECT IS COMPLETED THEREAFTER. 30. SINCE IN THE INSTANT CASE ADMITTEDLY, THE PROJECT HAS BEEN SANCTIONED PRIOR TO 01 - 04 - 2005 AND THE PROJECT HAS BEEN COMPLETED AFTER 01 - 04 - 2005, THEREFORE, THE RESTRICTION ON THE AR EA OF COMMERCIAL BUILDING IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THEREFORE, THIS OBJECTION OF THE REVENUE BEING DEVOID OF MERIT IS DISMISSED. 31. SO FAR AS THE OBJECTION OF THE AO THAT THE BUILT UP AREA OF ALL THE FLATS IN BUILDING F EXCEEDE D 1500 SQ.FT., WE FIND THE LD.CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT AFTER EXCLUSION OF THE BALCONIES AND TERRACES NONE OF THE FLATS OF BUILDING F EXCEEDED 1500 SQ.FT. COULD NOT BE CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. IT IS AN ADMITTE D FACT THAT THE COMMENCEMENT CERTIFICATE IS DATED 17 - 12 - 2004 WHICH IS PRIOR TO 01 - 04 - 2005. THE HONBLE BOMBAY HIGH COURT HAD AN OCCASION TO DECIDE THE ISSUE OF BUILT UP AREA INTRODUCED BY WAY OF SECTION 80IB(14)(A) W.E.F. 01 - 04 - 2005 IN THE CASE OF PRIME PROPERTIES (SUPRA) AND HELD THAT THE SAME IS NOT APPLICABLE TO HOUSING PROJECTS APPROVED PRIOR TO 01 - 04 - 205. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT READ AS UNDER : 2. THIS APPEAL WAS ADMITTED ON 14 TH JANUARY, 2013 ON THE FOLLOWING SUBSTANTIA L QUESTIONS OF LAW : ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 10 (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL DID NOT ERR IN HOLDING THAT THE CLARIFICATION OF THE BUILT UP AREA INTRODUCED BY WAY OF SECTION 80IB(14)(A) WITH EFFECT FROM 01 - 04 - 2005 CAN ONLY B E APPLIED TO PROJECTS WHICH HAVE BEEN SANCTIONED AFTER 01 - 04 - 2005? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF THE TRIBUNAL PASSED WITHOUT APPRECIATING AND EVALUATING ALL THE RELEVANT FACTS AND EVIDENCES INCLUDIN G CIRCUMSTANTIAL EVIDENCES, NOT PERVERSE? 3. THE RESPONDENT ASSESSEE IS A BUILDER WHO CLAIMED DEDUCTION U/S.80IB(10) OF THE ACT IN RESPECT OF ITS HOUSING PROJECT AT PUNE. THE ADMITTED POSITION IS THAT THE SUBJECT PROJECT WAS SANCTIONED/APPROVED PRIOR TO 1 ST APRIL, 2005. THE PARLIAMENT BY FINANCE (NO.2) ACT, 2004 INTRODUCED SUB - SECTION 14(A) TO SECTION 80IB(10) OF THE ACT W.E.F. 1 ST APRIL 2005. THUS, THE ISSUE ARISING IN THIS APPEAL IS WHERE HOUSING PROJECTS HAS RECEIVED SANCTION/APPROVAL PRIOR TO 1 ST A PRIL, 2005 WOULD THE PROVISION OF SECTION 80IB(14)(A) OF THE ACT, HAVE ANY APPLICATION. 4. MR. SURESH KUMAR, LD. COUNSEL FOR THE REVENUE FAIRLY STATES THAT THE PRESENT CONTROVERSY STANDS CONCLUDED IN FAVOUR OF THE RESPONDENT ASSESSEE BY THE DECISION OF TH IS COURT IN INCOME TAX APPEAL NO.1628 OF 2013 (CIT VS. RAVIRAJ KOTHARI PUNJABI ASSOCIATES) RENDERED ON 24 TH APRIL, 2015 IN RESPECT OF SECTION 80IB(14)(A) OF THE ACT. FURTHER, IT IS SUBMITTED THAT THE RATIO OF DECISION OF THE APEX COURT IN CIT VS. M/S. SAR KAR BUILDERS WOULD ALSO APPLY TO THE PRESENT CASE. 5. IN VIEW OF THE ABOVE, BOTH SUBSTANTIAL QUESTIONS OF LAWS ARE ANSWERED IN THE AFFIRMATIVE, I.E. IN FAVOUR OF THE RESPONDENT ASSESSEE ANSWERED IN THE AFFIRMATIVE, I.E. IN FAVOUR OF THE RESPONDENT ASSESSEE AND AGAINST THE REVENUE. 32. SINCE IN THE INSTANT CASE THE BUILT UP AREA OF ALL THE UNITS OF BUILDING F ARE LESS THAN 1500 SQ.FT. AFTER EXCLUDING THE BALCONIES AND TERRACES, THEREFORE, THE CIT(A) WAS FULLY JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF BUILDING F. 33. SO FAR AS DENIAL OF DEDUCTIO N U/S.80IB(10) IN RESPECT OF THE 2 UNITS OF BUILDING D ARE CONCERNED, WE FIND THE ASSESSEE HAS NOT CLAIMED DEDUCTION IN RESPECT OF THE ABOVE 2 UNITS IN THE RETURN OF INCOME ON THE GROUND THAT THE COMBINED AREA OF THE ADJOINING FLATS EXCEED 1500 SQ.FT. HOW EVER, BEFORE CIT(A) THE ASSESSEE TOOK AN ADDITIONAL GROUND AND CLAIMED THE DEDUCTION IN RESPECT OF THE ABOVE 2 UNITS ON THE GROUND THAT ASSESSEE HAS SOLD INDEPENDENT UNITS TO THE RESPECTIVE CUSTOMERS WHICH WERE LESS THAN 1500 SQ.FT. IT IS THE CUSTOMERS WH O HAVE COMBINED THE FLATS AND THEREFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10). WE FIND THE LD.CIT(A) ADMITTED THE ADDITIONAL EVIDENCE AND ON THE BASIS OF THE DECLARATION OF THE CUSTOMERS HELD THAT IT IS THE CUSTOMERS WHO HAVE COMBINED THE UNI TS AND THE ASSESSEE HAS SOLD SEPARATE UNITS TO THE CUSTOMERS WHERE THE BUILT UP AREA OF EACH UNIT IS LESS THAN 1500 SQ.FT. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ANKIT ENTERPRISES (SUPRA) HAS HELD THAT WHEN THE TWO ADJACENT FLATS WERE APPROV ED BY THE LOCAL AUTHORITY AS SEPARATE UNITS AND THE COMPLETION CERTIFICATE ISSUED ON THAT BASIS THE 2 FLATS CANNOT BE TREATED AS ONE UNIT TO COMPUTE THE BUILT UP AREA FOR THE PURPOSE OF SECTION 80IB(10). THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT AT PARA 3 OF THE ORDER READS AS UNDER : 3. SO FAR AS QUESTION (II) IS CONCERNED, IN THE IMPUGNED ORDER THE TRIBUNAL HAS RECORDED A FINDING OF FACT THAT TWO ADJOINING FLATS WERE ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 11 APPROVED BY THE LOCAL AUTHORITY AS SEPARATE UNITS AND COMPLETION CERTIFICATE ISSUED ON THAT BASIS. THEREFORE, ON THE ABOVE FINDING OF FACT, THE TRIBUNAL HELD THAT THE TWO FLATS CANNOT BE TREATED AS ONE UNIT TO COMPUTE THE BUILT UP AREA FOR THE PURPOSES OF SECTION 80IB(10) OF THE INCOME TAX ACT, 1961. THE DECISION OF THE TRIBUNAL BEING BASED ON FINDING OF FACT, WE SEE NO REASON TO ENTERTAIN QUESTION (II). 34. SINCE IN THE INSTANT CASE THE LD.CIT(A) HAS CATEGORICALLY GIVEN A FINDING THAT THE ASSESSEE HAS SOLD THE RESIDENTIAL UNITS TO DIFFERENT INDIVIDUALS, THE INDIVIDUAL OWNERSHIP IS LEGALLY ENFORCEABLE, THE INDIVIDUALITY OF THE OWNERSHIP EXISTS BEFORE THE DIFFERENT AUTHORITIES/ORGANISATIONS LIKE PMC FOR CORPORATION TAX, MSEB FOR ELECTRICITY METERS AND HOUSING SOCIETY FOR MEMBERSHIP ETC. AND SINCE HE HAS ALSO GIVEN A FINDING THAT I T IS THE CUSTOMERS WHO HAVE COMBINED THE ADJACENT UNITS FOR THEIR OWN REQUIREMENTS, THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE CITED SUPRA AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, THE ASSESSEE CANN OT BE DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE 2 UNITS OF BUILDING D. IN VIEW OF OUR ABOVE DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF THE LD.CIT(A) IS IN CONSONANCE WITH LAW. WE ACCORDINGLY UPHOLD THE SAME AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. THE ISSUE ARISING BEFORE US IS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2008 - 09, WHERE THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT WAS DENIED TO THE ASSESSEE ON ACCOUNT OF AREA OF FLATS IN BUILDING F INCLUDING BALCONY EXCEEDING 1500 SQ.FT. AND FURTHER IN RESPECT OF 4 FLATS ADJACENT WERE MERGED AND THE AREA EXCEEDED 1500 SQ.FT. AND ALSO BECAUSE OF COMMERCIAL SHOPS / ESTABLISHMENTS IN BUILDINGS J & K . T HE ASSESSEE I NITIALLY HAD NOT CLAIMED THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF ABOVE SAID FLATS AND COMMERCIAL SHOPS. HOWEVER, ADDITIONAL GROUNDS OF APPEAL WERE RAISED BEFORE THE CIT(A) IN ASSESSMENT YEAR 2008 - 09 THAT IT WAS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE SAID ADDITIONAL PLEA RAISED BY THE ASSESSEE WAS CONSIDERED AT LENGTH AND AFTER CONSIDERING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND ADMITTING THE SAME UNDER RULE 46A OF THE RULES, T HE CIT(A) HELD THE ASSESSEE TO BE ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. SIMILAR CLAIM HAS BEEN MADE BY THE ASSESSEE IN THE INSTANT ASSESSMENT YEAR RELATING TO ASSESSMENT YEAR 2009 - 10 AND WHERE THE FACTUAL ASPECTS AND ISSUE RAI SED ARE IDENTICAL TO THE ISSUE IN ASSESSMENT YEAR 2008 - 09 , ITA NO. 1 174 /PN/20 1 4 AMIT ENTERPRISES HOUSING LTD. 12 FOLLOWING THE SAME PARITY OF REASONING AND ALSO BECAUSE OF REASON THAT THE CIT(A) IN ALLOWING THE CLAIM OF DEDUCTION, HAD IN TURN REL IED ON THE ORDER OF CIT(A) RELATING TO ASSESSMENT YEAR 2008 - 09 , WHICH HAS BEEN UPHELD BY THE TRIBUNAL IN ASSESSMENT YEAR 2008 - 09, WE ALLOW THE CLAIM OF ASSESSEE. UPHOLDING THE ORDER OF CIT(A) IN THIS REGARD, WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 10 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 27 TH DAY OF APRIL , 201 6 . SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 27 TH APRIL , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I, P UNE ; 4. / THE CIT - I, PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE