Kasturi Housing Pvt.Ltd., V. Addl. CIT Range 11, Pune.,

ITA 1231/PUN/2008

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9865 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 14-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 16-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: V L JAIN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.1231/PN/2008 & 1382/PN/2010 (ASSTT. YEAR : 2005-06) KASTURI HOUSING PVT. LTD., 1, ADAMS COURT, 2 ND FLOOR, OPP: HOTEL MAHABLESHWAR, BANER ROAD, PUNE 411045. .. APPELLANT PAN: AABCK8478Q VS. ADDL.CIT, RANGE-11, PUNE. .. RESPONDENT ASSESSEE BY : SHRI V.L.JAIN DEPARTMENT BY : MS.ANN KAPTHUAMA DATE OF HEARING : 14.09.2012 DATE OF PRONOUNCEMENT : 31.10.2012 ORDER PER SHAILENDRA KUMAR YADAV, JM : BOTH THESE APPEALS PERTAIN TO SAME ASSESSEE. SO TH EY ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA.NO.1231/PN/2008, THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 1. THE LEARNED CIT(APPEALS)-I HAS ERRED ON FACTS AND I N LAW IN CONFIRMING THE DISALLOWANCE OF THE CLAIM U/S.80IB(1 0) OF RS.1,04,58,412/-. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(APP EALS)-I HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING A PRO-RAT A CLAIM U/S.80IB(10) WITH REFERENCE TO THE RESIDENTIAL UNIT S OF THE HOUSING PROJECT NOT EXCEEDING 1500 SQ.FT. 2 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSIN G OFFICER FOUND FROM THE REPORT OF THE INCOME TAX INSPECTOR REPRODU CED IN PARA 5.1 OF THE ASSESSMENT ORDER, THAT IN FIRST THREE CASES INDEPENDENT UNITS HAVE BEEN MERGED WITH SINGLE ENTRY. IN FOURTH CASE ALSO, EVEN THOUGH THERE ARE MULTIPLE ENTRIES, INTERIORS HAVE B EEN MERGED INTO SINGLE UNIT. THUS THESE RESIDENTIAL UNITS HAVE MOR E THAN THE MAXIMUM BUILT UP AREA SPECIFIED U/S.80IB(10). ACCO RDING TO THE ASSESSING OFFICER, LEGISLATIVE INTENDMENT FOR GIVIN G TAX EXEMPTION U/S. 80IB(10) WAS TO INCREASE OF STOCK OF HOUSE FOR LOW AND MIDDLE INCOME GROUP. THIS LEGISLATIVE INTENDMENT CANNOT B E ALLOWED TO BE DEFEATED BY RESORTING TO SEPARATE AGREEMENTS IN RES PECT OF MORE THAN ONE UNIT OF HOUSING WHICH IS BEING USED AS ONE HOUSING UNIT AND THEREFORE IT IS HELD THAT ONE OF THE CONDITIONS RELATING TO MAXIMUM BUILT UP AREA PER RESIDENTIAL UNIT HAS BEEN VIOLATED IN THE CASE OF THE ASSESSEE. SECTION 80IB(10) CONTAINS CO NDITIONS PRE- REQUISITE WHICH ARE TO BE FULFILLED FOR ALLOWING DE DUCTION U/S.80IB(10). THESE CONDITIONS ARE CUMULATIVE. ACCORDING TO THE ASSESSING OFFICER EVEN IF ONE OF THE CONDITIONS IS VIOLATED, THE ASSESSEE WOULD NOT BE ENTITLED TO DEDUCTION U/S.80I B. IN VIEW OF THIS, TWO UNITS OF DWELLING UNITS WERE CLUBBED INTO ONE UNIT WHERE THE BUILT UP AREA IN THE COMBINED UNITS EXCEEDED 15 00 SQ.FT. IT WAS CLEAR THAT THE CONDITION FOR DEDUCTION U/S.80IB HAV E BEEN VIOLATED. THE FACT THAT ASSESSEE HAS MADE TWO SEPARATE AGREEM ENTS WILL BE OF NO HELP TO THE ASSESSEE BECAUSE SUCH AN ACTION ON T HE PART OF THE ASSESSEE VIOLATES THE LETTER AS WELL AS SPIRIT OF T HE LAW. THE ACTION OF THE ASSESSEE IN CLUBBING TWO UNITS INTO ONE UNIT BY MEANS OF AGREEMENT WITH PURCHASER RESULTS IN INCREASE OF MAX IMUM BUILT UP AREA OF THE RESIDENTIAL UNIT BECAUSE TWO SUCH UNITS ARE CLUBBED INTO ONE. ACCORDINGLY IT WAS HELD THAT THE ASSESSEE HAS NOT FULFILLED ALL THE CONDITIONS PREREQUISITE FOR CLAIMING DEDUCTION U/S.80IB(10) SO THE ASSESSING OFFICER REJECTED THE CLAIM U/S.80IB(1 0) WHICH WAS UPHELD BY THE CIT(A). THE CLAIM OF PROPORTIONATE A LLOWANCE OF DEDUCTION BY THE ASSESSEE WAS ALSO DISALLOWED BY TH E ASSESSING OFFICER AND UPHELD BY THE CIT(A). 3 4. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE SUB MITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISA LLOWANCE U/S.80IB(10) OF RS.1,04,58,412/-. WITHOUT PREJUDIC E TO ABOVE, THE CIT(A) WAS NOT JUSTIFIED IN NOT ALLOWING PRO-RATA A LLOWANCE OF DEDUCTION FOR THE RESIDENTIAL UNITS OF THE HOUSING PROJECT NOT EXCEEDING 1500 SQ.FT. IN THIS REGARD LD. AUTHORISE D REPRESENTATIVE DREW OUR ATTENTION TO THE ORDER OF THE ITAT PUNE BE NCH IN THE CASE OF D.S.KULKARNI DEVELOPERS LTD. VS. ACIT IN ITA.NOS .1428 & 1429/PN/08, WHEREIN THE TRIBUNAL HAS DECIDED SIMILA R ISSUE OF COMBINING FLATS BY OBSERVING AS UNDER: 21. ON THIS ASPECT, WE FIND THAT THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. EKTA HOUSING PVT. LTD . (SUPRA) HAS UPHELD THE PLEA OF THE ASSESSEE FOR A PROPORTIO NATE DEDUCTION U/S. 80 IB (10) OF THE ACT WHERE SOME OF THE RESIDENTIAL UNITS IN THE PROJECT VIOLATED THE COND ITION CONTAINED IN SEC. 80 IB (10)(C ) OF THE ACT. THE M UMBAI BENCH AFTER NOTICING THE PRECEDENTS IN THE CASE OF I) ITO V/S AIR DEVELOPERS, 25 DTR 287 (NAG.); II) DCIT V/S BRIGADE ENTERPRISES PVT. LTD., 14 DTR 371 (BANG.); III) ACIT V/S SHETH DEVELOPERS P. LTD., 33 SOT 277 (MUM.); IV) BENGAL AMBUJA HOUSING DEVELOPMENT LTD. V/S DCIT; V) SJR BUILDERS V/S ACIT, 3 ITR 569 (MUM.) HELD THAT THE ASSESSEE WOULD NOT LOOSE THE EXEMPT ION U/S. 80 IB (10) IN ENTIRETY WHERE SOME OF THE RESIDENTIAL UNITS WINGS HAD A BUILT- UP AREA IN EXCESS OF THE LIMIT PRES CRIBED IN CLAUSE (C ) OF SEC. 80 IB (10) BUT, IT WOULD BE E NTITLED TO PROPORTIONATE DEDUCTION U/S. 80 IB (10) OF THE ACT WITH REGARD TO THE PROFITS EARNED ON THE ELIGIBLE UNITS.. PART ICULARLY, THE TRIBUNAL ALSO CONSIDERED THE DECISION OF THE HONBL E BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) AND HELD THAT THE SAME DOES NOT ENVISAGE DENIAL OF PROPORTIO NATE DEDUCTION IN SUCH CIRCUMSTANCES. THE RELEVANT DISC USSION, AS CONTAINED IN PARAGRAPHS 8 & 9 OF THE ORDER OF THE T RIBUNAL IN THE CASE OF M/S EKTA HOUSING PVT. LTD. READS AS UN DER : VIII) WE NOW EXAMINE THE APPLICABILITY OF THE DECI SION OF THE HONBLE BOMBAY HIGH COURT IN BRAHMA ASSOCIATES (SUPRA) TO THE FACTS OF THIS CASE. ON A CAREFUL RE ADING OF THIS JUDGMENT, WE FIND THAT NOWHERE IT IS STATED TH AT PROPORTIONATE DEDUCTION SHOULD NOT BE ALLOWED, IN CASE CERTAIN RESIDENTIAL UNITS HAD BUILT UP AREA IN EX CESS OF PRESCRIBED LIMIT OF 1,000 SQ.FT. IN FACT, THIS ISSU E WAS NOT BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. THE QUESTIONS BEFORE THE HONBLE JURISDICTIONAL HIGH C OURT 4 WERE DIFFERENT AND, HENCE THE JUDGMENT CANNOT BE SA ID TO BE ON THIS ISSUE. THE ONLY ISSUE BEFORE THE HIGH C OURT IS WHEN THERE IS A COMMERCIAL ELEMENT IN A RESIDENTIAL PROJECT, WILL BE ASSESSEE BE DENIED THE ENTIRE EXEM PTION. IN THIS CASE, THE HONBLE HIGH COURT HAS OBSERVED THAT WHEN THE LOCAL AUTHORITY APPROVED A PLAN AS A HOUSING PR OJECT OR A RESIDENTIAL CUM COMMERCIAL PROJECT, THE ASSESSEE WOULD BE ENTITLED TO CLAIM FOR DEDUCTION UNDER SECTION 80 IB(10) EVEN IF THE PROJECT HAD COMMERCIAL ELEMENT IN EXCES S OF 10%. AT PARAS-27 AND 28, THE COURT OBSERVED AS FOL LOWS :- 27. THE QUESTION THEN TO BE CONSIDERED IS, WHETHER THE SPECIAL BENCH OF THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE PROJECTS HAVING COMMERCIAL AREA UP TO 10% OF THE BUILT-UP AREA OF THE PLOT ARE ELIGIBLE F OR DEDUCTION UNDER SECTION 80IB(10) ON THE ENTIRE PROJ ECT UPTO 1.4.2005. ONCE THE BASIC ARGUMENT OF THE REVENUE THAT THE HOUSING PROJECTS WITH COMMERCIAL USER ARE NOT ENTITLED TO SECTION 80IB(10) DEDUCTION IS REJECTED, THEN IN THE ABSENCE OF ANY RESTRICTION IMPOSED UNDER THE ACT, IT WAS NOT OPEN TO THE TRIBUNAL TO HOLD THAT THE PROJECTS APPROVED BY THE LOCAL AUTHORITIES HAVING RESIDENTIAL BUILDINGS WI TH COMMERCIAL USER UPTO 10% OF THE PLOT AREA WOULD ALONE BE ENTITLED TO DEDUCTION UNDER SECTION 80IB(1 0). AS NOTED EARLIER, RESTRICTION REGARDING COMMERCIAL USER HAS BEEN IMPOSED FOR THE FIRST TIME BY INTRODUCING CLAUSE (D) TO SECTION 80IB (10) WITH E FFECT FROM 1.4.2005. THEREFORE, IT WAS NOT OPEN TO THE TRIBUNAL TO HOLD THAT PRIOR TO 1.4.2005, PROJECTS HAVING COMMERCIAL USER UPTO10% OF THE PLOT AREA ALONE WOULD BE ELIGIBLE FOR SECTION 80IB(10) DEDUCTION. 28. IN THE PRESENT CASE, THOUGH THE COMMERCIAL USER IS MORE THAN 10% OF THE PLOT AREA, THE TRIBUNAL HAS ALLOWED SECTION 80IB(10) DEDUCTION IN RESPECT OF 15 RESIDENTIAL BUILDINGS ON THE GROUND THAT THE PROFI TS FROM THESE EXCLUSIVELY RESIDENTIAL BUILDINGS COULD BE DETERMINED ON STAND ALONG BASIS. IN OUR OPINION, THAT WOULD NOT BE PROPER, BECAUSE SECTION 80IB(10) ALLOWS DEDUCTION TO THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND NOT TO A PART OF THE PROJECT. IF THE CONDITIONS SET OUT IN SECTION 80IB(10) ARE SATISFIE D, THEN DEDUCTION IS ALLOWABLE ON THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND THERE IS NO QUESTION OF ALLOWING DEDUCTION TO A PART OF THE PROJECT. IN THE PRESENT CASE, THE COMMERCIAL USER IS ALLOWED IN ACCORDANCE WITH THE DC RULES AND HENCE THE ASSESSEE WAS ENTITLED TO SECTION 80IB(10) DEDUCTION ON THE ENTIRE PROJECT APPROVED BY THE LOC AL AUTHORITY. HOWEVER, THE ASSESSEE HAS NOT CHALLENGE D 5 THE DECISION OF THE TRIBUNAL IN RESTRICTING THE DEDUCTION TO A PART OF THE PROJECT. THEREFORE, WHI LE HOLDING THAT IN LAW, THE ASSESSEE WAS ENTITLED TO SECTION 80IB(10) DEDUCTION ON THE PROFITS OF THE EN TIRE PROJECT, IN THE FACTS OF THE PRESENT CASE, SINCE TH E ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRIBUNAL, WE ARE NOT INCLINED TO DISTURB TO DISTURB THE DECISION OF THE TRIBUNAL IN RESTRICTING THE SECTIO N 80IB(10) DEDUCTION ONLY IN RESPECT OF THE PROFITS DERIVED FROM 15 RESIDENTIAL BUILDINGS. IX) THUS, IT COULD BE SEEN THAT THE HONBLE HIGH COURT DO NOT APPROVE THE FINDINGS OF THE TRIBUNAL THAT A RE SIDENTIAL BUILDING WITH COMMERCIAL USER UP TO 10% OF THE PLOT AREA WOULD ALONE BE ENTITLED TO DEDUCTION UNDER SECTION 80IB(10). THE ISSUE THAT, IN CASE WHERE CERTAIN RE SIDENTIAL UNITS ARE OF A BUILT UP AREA IN EXCESS OF THE PRESC RIBED LIMIT OF 1,000 SQ.FT. IN RESIDENTIAL PROJECT, THIS WOULD RESULT IN THE ENTIRE EXEMPTION BEING LOST, OR WHETHER THE ASS ESSEE WOULD BE ENTITLED TO A PROPORTIONATE DEDUCTION WAS NOT BEFORE THE HIGH COURT. THUS, IN OUR OPINION, THE D ECISION OF HONBLE JURISDICTIONAL HIGH COURT IN BRAHMA ASSOCI ATES (SUPRA) DOES NOT COME TO THE RESCUE OF THE REVENUE. 22. FOLLOWING THE AFORESAID PRECEDENT, WE, THEREFOR E, HOLD THAT MERELY BECAUSE THE ASSESSEE HAS VIOLATED TH E CONDITION U/S. 80 IB(10)(C ) IN RELATION TO THE FLATS ON THE 11 TH FLOOR, THE DEDUCTION U/S. 80 IB(10) CANNOT BE DENIED IN ITS E NTIRETY, BUT, THE DENIAL SHALL BE LIMITED TO THE PROFITS IN RESPE CT OF THE FLATS ON THE 11 TH FLOOR ALONE. FOR THE BALANCE OF THE RESIDENTIAL UNITS, THE PLEA OF THE ASSESSEE FOR DEDUCTION U/S. 80 IB(10) OF THE ACT IS JUSTIFIED, AND THE ASSESSEE SUCCEEDS ON THIS ASPECT. 23. WITH REGARD TO THE PROJECT DSK FRANGIPANI FOR T HE A.Y. 2005-06 ALSO, THE FACTS AND CIRCUMSTANCES ARE IDENT ICAL. IN THIS YEAR ALSO, IN OUR CONSIDERED OPINION, OUR DECI SION IN THE AFORESAID PARAGRAPH FULLY APPLIES. THOUGH IN A.Y. 2005-06, THE DEFINITION OF BUILT-UP AREA AS PER SECTION 80 IB (14)(A) WAS ON STATUTE, BUT, ADMITTEDLY, ASSESSEES PROJECT WAS APPROVED AND COMMENCED PRIOR TO 1.4.2005, THEREFORE, THE CAL CULATION OF BUILT- UP AREA SHALL NOT BE GOVERNED BY SUCH DE FINITION. THEREFORE, FOR THE A.Y. 2005-06 ALSO, THE PROJECT DSK FRANGIPANI IS ELIGIBLE FOR DEDUCTION U/S. 80 IB(10) , ALBEIT ON A PROPORTIONATE BASIS IN RESPECT OF THE FLATS WHOSE B UILT UP AREA DOES NOT SUCCEED 1500 SQ.FT. AS PRESCRIBED U/S. 80 IB (10)(C ) OF THE ACT. IN THIS VIEW OF THE MATTER, THE ORDER OF THE CIT(A) FOR BOTH THE YEARS IS SET ASIDE AND THE ASSESSING O FFICER IS DIRECTED TO RE-COMPUTE THE DEDUCTION ALLOWABLE TO T HE ASSESSEE U/S. 80 IB (10) OF THE ACT IN TERMS OF OUR ABOVE DI SCUSSIONS. RESULTANTLY, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. 24. IN THE RESULT, ASSESSEES APPEALS ARE PARTLY AL LOWED. 6 4.1. WE ALSO FIND THAT THE ITAT MUMBAI G BENCH IN THE CASE OF G.V.CORPORATION VS. ITO IN ITA.NO.4512/MUM/2007, HA S HELD AS UNDER: CONDITION UNDER SUB-S.(2) OF S.80-IB THAT THE ASSE SSEE SHOULD BE AN INDUSTRIAL UNDERTAKING IS NOT APPLICABLE FOR CLAIMING THE DEDUCTION UNDER SUB-S.(10); FURTHER, MERELY BECAUSE 9 OUT OF 140 PURCHASERS DESIRED TO JOIN THE FLATS PURCHASED BY THEM INTO ONE SINGLE UNIT, WHICH EXCEEDED 1,000 SQ.FT. O F BUILT-UP AREA, CANNOT DISENTITLE THE ASSESSEE TO THE DEDUCTI ON UNDER S.80-IB(10); AO HAVING MADE THE ENQUIRY AND WAS SAT ISFIED THAT THERE WAS NO VIOLATION OF THE CONDITIONS MENTI ONED IN SUB- S.(10) OF S.80-IB, CIT WAS NOT JUSTIFIED IN CONCLUD ING THAT THE ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIA L TO THE INTERESTS OF THE REVENUE. 4.2. WE FIND THAT IN THE CASE OF ACIT VS. KRUTI CON STRUCTIONS IN ITA.NO.1031, 1032 AND 1033/PN/2011, THE TRIBUNAL HA S DECIDED SIMILAR ISSUE BY OBSERVING AS UNDER: 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. QUITE CLEARLY, FOR AVAILING THE BENEFIT ENVISAGED U /S.80IB(10) OF THE ACT, CERTAIN CONDITIONS HAVE BEEN PRESCRIBED TH EREOF. IN THE PRESENT CASE, THE ONLY CONTROVERSY IS IN RESPEC T OF CLAUSE (C) OF SECTION 80IB(10) OF THE ACT WHICH PRESCRIBES THAT THE BUILT UP AREA OF THE RESIDENTIAL UNIT SHOULD NOT EX CEED 1500 SQ.FT. WHERE SUCH RESIDENTIAL UNIT IS SITUATED IN T HE CITY OF PUNE. IN THE PRESENT CASE, THE PROJECT OF THE ASSE SSEE HAS 83 DIFFERENT FLATS OUT OF WHICH IT WAS NOTICED THAT FL AT NOS.602, 702 IN B-WING AND FLAT NOS.202, 203 IN C-WING, WERE COMBINED INTO TWO BIGGER UNITS AND IN THIS MANNER T HE BUILT- UP AREA OF THE BIGGER UNITS EXCEEDED 1500 SQ.FT. THE ASSERTIONS OF THE ASSESSEE WERE TO THE EFFECT THAT THE MERGER OF THESE UNITS TOOK PLACE AFTER THE SALE AND HANDING O VER OF POSSESSION OF THE FLATS TO THE BUYERS BY THE ASSESS EE. THE CIT(A) HAS ACCEPTED THE PLEA OF THE ASSESSEE FOR TH E REASONS WE HAVE NOTED EARLIER IN THIS ORDER. 10. FACTUALLY SPEAKING, IT IS EMERGING FROM THE ORD ERS OF THE AUTHORITIES BELOW THAT THE FOUR FLATS ARE SEPARATE UNITS IN THE BUILDING SANCTIONED PLANS AS APPROVED BY THE LOCAL AUTHORITIES. FURTHER, IT IS ALSO NOTICEABLE FROM PARA 5.2 OF THE ORDER OF THE CIT(A) THAT THEY HAVE BEEN BOOKED BY THE CUSTOMERS AND SOLD INDIVIDUALLY UNDER SEPARATE AGREEMENTS. FURTHER, T HE FLATS HAVE DIFFERENT ENTRANCES, KITCHENS, LOBBIES ETC. T HE FLATS HAVE BEEN ISSUED COMPLETION CERTIFICATES BY THE MUNICIPA L AUTHORITIES INDIVIDUALLY SHOWING THEIR SEPARATE CHA RACTER. 7 EACH FLAT HAS A ELECTRICITY METER/CONNECTION AS NOT ED BY THE CIT(A) IN PARA 5.4 OF THE IMPUGNED ORDER. IN FACT THE ASSERTIONS OF THE ASSESSEE WERE THAT THE FLATS HAVE BEEN MERGED/COMBINED BY THE FLATS PURCHASERS AFTER THE S ALE BY THE ASSESSEE. THE AFORESAID ASSERTIONS ARE SUPPORTED B Y FACTUAL MATRIX AND IN ANY CASE THERE IS NO MATERIAL BROUGHT ON BY THE REVENUE TO NEGATE THE AFORESAID ASSERTIONS OF THE A SSESSEE. IN THIS CONNECTION, THE FOLLOWING DISCUSSION BY THE CI T(A) IS RELEVANT: 5.5. THE FACTS NARRATED ABOVE CAREFULLY INDICAT E THAT THE MERGER OF FLATS OCCURRED IN THE HANDS OF THE FL AT PURCHASERS AFTER THE SALE OF FLATS. THE APPELLANT HAS NO CONTROL ON WHAT THE PURCHASER DOES IN HIS FLAT AFTE R THE POSSESSION IS HANDED OVER. NO EVIDENCE IS BROUGHT ON RECORD BY THE A.O. TO SHOW THAT THE APPELLANT HAS ARTIFICIALLY GIVEN TWO FLAT NUMBERS TO ONE SINGLE F LAT. THE VALUERS REPORT STATES THAT FOUR FLATS WERE COMBINE D INTO TWO UNITS BUT IT DOES NOT INDICATE AT WHAT POINT OF TIME THE MERGER OF THE UNITS TOOK PLACE. FURTHERMORE, T HERE WAS A TIME LAG OF 4 YEARS BETWEEN THE APPELLANT DEVELOPERS HANDING OVER POSSESSION OF FLATS TO THE PURCHASERS IN THE YEAR 2004/2005 AND THE INSPECTION CARRIED OUT BY THE DEPARTMENTS VALUER IN DECEMBER, 2009. IN SUCH A SITUATION, IT IS NOT POSSIBLE TO D RAW THE INFERENCE THAT THE APPELLANT BUILDER BUILT THE RESI DENTIAL FLATS OF MORE THAN 1500 SQ.FT. OF BUILT-UP AREA AND THE IMPUGNED UNITS WERE COMBINED BY THE APPELLANT BEFOR E HANDING OVER POSSESSION OF FLATS TO THE PURCHASERS IN VIOLATION OF THE CONDITION IN CLAUSE (C) OF SEC. 80 IB(10). IF EACH RESIDENTIAL UNIT DOES NOT EXCEED THE BUILT-UP AREA OF 1500 SQ.FT. AS PER APPROVED PLAN, THE FACT THAT THE Y WERE JOINED TOGETHER BY THE FLAT HOLDERS FOR BETTER LIVI NG OR FOR MORE SPACE OR FOR ANY OTHER REASON DOES NOT DISENTI TLE THE APPELLANT TO THE CLAIM FOR DEDUCTION UNDER SECTION 80-IB, PARTICULARLY WHEN THESE CHANGES IN THE FLATS WERE M ADE AFTER HANDING OVER POSSESSION OF FLATS TO THE FLAT HOLDERS. IN THESE CIRCUMSTANCES, MERELY BECAUSE FOUR OUT OF 83 PURCHASERS OF FLATS IN FOUR BLOCKS INTERNALLY JOINE D THE FLATS PURCHASED BY THEM INTO ONE SINGLE UNIT, WHICH EXCEEDED 1500 SQ.FT. OF BUILT UP AREA, IT CANNOT BE SAID THAT THE APPELLANT IS NOT ENTITLED TO THE DEDUCTION AT ALL IN RESPECT OF THE PROFITS DERIVED FROM THE PROJECT. I N THIS CONTEXT, REFERENCE CAN BE MADE TO THE RECENT DECISI ON OF ITAT, MUMBAI, IN THE CASE OF G.V. CORPORATION REPOR TED IN 133 TTJ 178, WHEREIN IT IS HELD AS UNDER: IT WAS NOT ALSO THE CASE OF THE COMMISSIONER THAT EACH FLAT IN THE HOUSING PROJECTS UNDERTAKEN BY THE ASSESSEE COULD NOT HAVE BEEN USED AS AN INDEPENDENT OR SELF-CONTAINED RESIDENTIAL UNIT NOT EXCEEDING 1,000 SQUARE FEET OF BUILT-UP AREA AND 8 THAT THERE WOULD BE A COMPLETE, HABITABLE RESIDENTIAL UNIT ONLY IF TWO OR MORE FLATS WERE JOI NTED WITH EACH OTHER, WHICH WOULD ULTIMATELY EXCEED 1,000 SQUARE FEET OF BUILT-UP AREA. IN SUCH A SITUATION, MERELY BECAUSE 9 OUT OF 140 PURCHASES DESIRED TO JOIN THE FLATS PURCHASED BY THEM INTO ON E SINGLE UNIT, WHICH EXCEEDED 1,000 SQUARE FEET OF BUILT-UP AREA, COULD NOT DISENTITLE THE ASSESSEE TO THE DEDUCTION. IF EACH RESIDENTIAL UNIT DID NOT EXCEED THE BUILT-UP AREA OF 1,000 SQUARE FEET, THE FACT THAT THEY WERE JOINED TOGETHER BY THE PURCHASERS FOR BETTER LIVING OR FOR MORE SPACE OR F OR ANY OTHER REASON DID NOT DISENTITLE THE ASSESSEE TO THE CLAIM FOR DEDUCTION UNDER SECTION 80-IB. 11. OSTENSIBLY THE CONCLUSION REACHED BY THE CIT(A) IS BASED ON FACTUAL MATERIAL AND THERE IS NO MATERIAL BROUGH T ON RECORD BEFORE US WHICH WOULD ENABLE US TO INTERFERE WITH T HE ORDER OF THE CIT(A). HAVING REGARD TO THE AFORESAID DISCUSS ION IN THE ORDER OF THE CIT(A), WE THEREFORE HOLD THAT THERE I S NO SUBSTANCE IN THE ASSERTION OF THE REVENUE THAT THE ASSESSEE UNDERTOOK DEVELOPMENT AND BUILDING OF A HOUSING PRO JECT WHICH INVOLVED CONSTRUCTION OF A RESIDENTIAL UNITS WITH BUILT UP AREA EXCEEDING 1500 SQ.FT., IN VIOLATION OF SECTION 80IB(10)(C) OF THE ACT. MERELY BECAUSE FOUR FLATS OUT OF 83 FLA TS CONSTRUCTED WERE JOINED TOGETHER INTO TWO BIGGER UNITS, EXCEEDE D 1500 SQ.FT. EACH, COULD NOT DISENTITLE THE ASSESSEE TO THE DEDU CTION, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. AS A RESULT THEREOF, WE HEREBY CONFIRM THE CO NCLUSION DRAWN BY THE CIT(A) AND THE REVENUE HAS TO FAIL IN THEIR APPEALS. 12. RESULTANTLY, THE APPEALS OF THE REVENUE IN ITA. NO.1031, 1032 AND 1033/PN/2011 FOR A.YS. 2003-04, 2004-05 AN D 2007-08, ARE DISMISSED. 5. IN VIEW OF ABOVE DISCUSSION IT IS CLEAR THAT ASS ESSEE SHOULD NOT BE SUBJECTED TO SUFFER THE DISALLOWANCE OF CLAIM IN QUESTION IN CASE RESIDENTIAL UNITS IN QUESTION HAS BEEN CLUBBED SUBS EQUENT TO THE PURCHASE OF FLATS IN QUESTION. THE LOWER AUTHORITI ES WERE NOT HAVING BENEFIT OF DECISION IN THE CASE OF G.V.CORPORATION (SUPRA) ON THE ISSUE AS WELL AS THE DECISION IN THE CASE OF KRUTI CONSTRUCTIONS (SUPRA). SO IN THE INTEREST OF JUSTICE WE SET ASID E THE ORDER OF THE CIT(A) AND RESTORE THE ISSUE TO THE FILE OF THE ASS ESSING OFFICER WITH A DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AVAILABLE AT THE RELEVANT POINT OF TIME AFTER PROVIDING DUE OPPORTUN ITY OF HEARING TO THE ASSESSEE. SIMILAR ISSUE AROSE IN ITA.NO.1382/P N/2010. 9 FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, W E SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE ISSUE TO THE FI LE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AVAILABLE AT THE RELEVANT POINT OF TIME AFTER PROVI DING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. AS A RESULT, BOTH THE APPEALS ARE ALLOWED FOR ST ATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS THE 31 ST DAY OF OCTOBER, 2012. SD/- SD/- ( R.K.PANDA ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 31 ST OCTOBER, 2012 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ADDL.CIT, RANGE-11, PUNE. 3. THE CIT(A)-I, PUNE. 4. THE CIT-I, PUNE. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.