DCIT, Pune V. M/s Suyog Development Corporation., Pune

ITA 127/PUN/2013

• Counselvise Citation: 12724514 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 11-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Assessee Lawyers: MAHEN DRA MEHTA BHARAT A SHAH
• Keywords: Retrospective amendment
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.126 AND 127/PN/2013 (A.YS.2003-04 AND 2005-06) DCIT, CENTRAL CIRCLE 1(1), PUNE APPELLANT VS. M/S. SUYOG DEVELOPMENT CORPORATION UNIT-9, SUYOG CHAMBERS, SHUKRAWAR PETH, PUNE - 411002 PAN: AAOFS6122M RESPONDENT CO NO.7/PN/2014 (ARISING OUT OF ITA NO.126/PN/2013) (A.Y.2003-04) M/S. SUYOG DEVELOPMENT CORPORATION UNIT-9, SUYOG CHAMBERS, SHUKRAWAR PETH, PUNE - 411002 PAN: AAOFS6122M CROSS OBJECTOR VS. DCIT, CENTRAL CIRCLE 1(1), PUNE APPELLANT ASSESSEE BY : S/SHRI MAHEN DRA MEHTA BHARAT A SHAH DEPARTMENT BY : SHRI MUKES H VERMA, CIT DATE OF HEARING : 18.02.2014 DATE OF ORDER : 28.02.2014 ORDER PER BENCH: 2 THESE TWO APPEALS FILED BY REVENUE AND ONE CROSS O BJECTION FILED BY ASSESSEE ARE ARISING FROM RESPECTIVE TWO O RDERS OF CIT(A)-I, PUNE PERTAINING TO THE SAME ASSESSEE ON ALMOST SIMI LAR ISSUES. SO THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF F BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO.126/PN/2012 FOR A.Y. 2003-04, THE REVE NUE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: A) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), PUNE GROSSLY ERRED IN HOLDING THAT THE PROJECT OF THE ASSESS EE IS NOT AN INTEGRATED PROJECT IGNORING THE FACTS AND IN CIRCUMSTANCES OF THE CASE. B) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), PUNE GROSSLY ERRED IN HOLDING THAT THE PROJECT OF THE ASSESSEE W AS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT WITHOUT APPRECIAT ING THE FACT THAT IT HAS COMMERCIAL AREA AND IT EXCEEDED 2000 SQ . FT. C) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), PUNE GROSSLY ERRED IN ACCEPTING THE ASSESSEE'S PLEA THAT THE DEF INITION OF BUILT UP AREA BROUGHT ON STATUE W.E. FROM A.Y.2005-06 WIL L NOT BE APPLICABLE IN A.Y. 2003-04, ALTHOUGH THE SAME IS CL ARIFICATORY IN NATURE AND HAS RETROSPECTIVE EFFECT. D) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), PUNE GROSSLY ERRED IN HOLDING THAT PRO-RATA CLAIM U/S. 80IB (10) WITH REFERENCE TO RESIDENTIAL UNITS OF THE HOUSING PROJE CT, BUILT UP AREA OF WHICH DOES NOT EXCEED 1500 SQ FT. MAY BE AL LOWED, ALTHOUGH THE SAME IS IN CONTRAVENTION OF DECISION O F THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF BRAMHA ASSOCIATES [333 ITR 289]. E) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), PUNE GROSSLY ERRED IN HOLDING THAT PRO-RATA CLAIM U/S. 80IB (10) WITH REFERENCE TO RESIDENTIAL UNITS OF THE HOUSING PROJE CT, BUILT UP AREA OF WHICH DOES NOT EXCEED 1500 SQ FT. MAY BE AL LOWED, EVEN THOUGH THERE IS NO SUCH PROVISION IN SECTION 80IB(1 0) OF THE ACT. 3. THE PRIMARY ISSUE INVOLVED IN BOTH THE APPEALS I S DENIAL OF DEDUCTIONS CLAIMED U/S.80IB(10) FROM THE IMPUGNED H OUSING PROJECTS DEVELOPED BY THE ASSESSEE IN MUKUND NAGAR COMMONLY KNOWN AS SUJAY GARDEN. THE ASSESSEE IS A PARTNER SHIP FIRM ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT. RETURN OF 3 INCOME FOR THE ASSESSMENT YEAR WAS FILED ON 28.11.2 003 ON A TOTAL INCOME OF 14,68,130/- AFTER CLAIMING DEDUCTION U/S.80IB(10) O F 6,23,63,174/-, WHICH WAS ACCEPTED BY THE ASSESSING OFFICER IN AN ORDER PASSED U/S.143(3) BEFORE THE SEARCH OPERATION WAS CARRIED OUT IN THIS GROUP ON 08.08.2007. AS PER THE IMPUGNED A SSESSMENT ORDER SEVERAL DOCUMENTS WERE SEIZED AND ALSO THE CLAIM OF DEDUCTION MADE U/S.80IB(10) ON DIFFERENT TENAMENTS CONSTRUCTED BY THE ASSESSEE IN THE PROJECT 'SUJAY GARDEN' WAS VERIFIED. AFTER SEA RCH NOTICE U/S.153A WAS ISSUED AND THE MATTER WAS FURTHER EXAMINED BY T HE ASSESSING OFFICER AND AFTER EXAMINING THE MATERIALS AVAILABLE BEFORE THE ASSESSING OFFICER THE ASSESSMENT WAS COMPLETED, IN WHICH THE DEDUCTION ORIGINALLY ALLOWED U/S.80IB(10) WAS DISAL LOWED. IN THIS PROCEEDINGS, THE ASSESSING OFFICER HAS OBSERVED THA T THE PROJECT 'SUJAY GARDEN IS ONE INTEGRATED PROJECT HAVING BUN GALOW PLOT SCHEMES, COMMERCIAL COMPLEX AND RESIDENTIAL BUILDIN GS, SANCTIONED IN A COMMON LAYOUT APPROVED IN FINAL PLOT NO.410 AT S.NO.706 A & B, HAVING THE AREA OF 4H AND 63 R. AFTER ARRIVING AT THIS FINDING THE ASSESSING OFFICER VERIFIED THE CONDITIONS LAID DOWN IN SEC.80IB(10) AND HELD THAT THE CONDITION PRESCRIBED IN CLAUSE (C ) RELATING TO SIZE OF FLATS, AND (D) RELATING TO RESTRICTION ON BUILDING COMMERCIAL USERS ARE VIOLATED AND HENCE DEDUCTION COULD NOT BE ALLOWED. FOR CONCLUDING THIS THE ASSESSING OFFICER RELIED ON VARIOUS EVIDEN CES AND STATEMENT ON OATH OF ONE OF THE PARTNERS, SHRI BHARAT K. SHAH , RECORDED DURING SEARCH U/S.132(4) OF THE I.T. ACT, WHO WAS CONFRONT ED WITH VARIOUS FACTS DURING SEARCH. THE STATEMENT OF OATH OF CERT AIN FLAT OWNERS WHO HAD PURCHASED FLATS IN PROJECT OF ASSESSEE WERE ALSO QUOTED TO BRING ON RECORD THE FACT THAT THE ASSESSEE HAS SOLD THE FLATS OF MORE THAN 1500 SQ. FT. THESE HAVE BEEN QUOTED IN PARA 3 OF THE ASSESSMENT ORDER. 4. THE ASSESSING OFFICER AFTER GIVING EXTRACTS OF S TATEMENTS ON OATH RECORDED DURING SEARCH OF SHRI BHARAT K. SHAH, CONC LUDED IN THE ASSESSMENT ORDER THAT THE DEDUCTION U/S.80IB(10) IS NOT ALLOWABLE TO 4 THE ASSESSEE IN THIS ASSESSMENT YEAR FOR THE REASON S DISCUSSED ABOVE. THE ASSESSING OFFICER RELIED ON CERTAIN OTH ER INFORMATION GATHERED BY HIM. IT HAS MAINLY BEEN THE CONTENTION OF THE ASSESSING OFFICER THAT THE ENTIRE PLOTS AND BUILDINGS INCLUDI NG COMMERCIAL TENAMENTS CONSTRUCTED IN 4H & 63R OF LAND IS PART O F THE SAME PROJECT AND THE CONDITIONS PRESCRIBED IN SEC.80IB(1 0) HAS TO BE TESTED ON THAT PROPOSITION. THE ASSESSING OFFICER ALSO CO NCLUDED THAT MANY OF THE TENAMENTS THOUGH ON PAPER WERE OF THE SIZE O F LESS THAN 1500 SQ.FT. BUT WERE IN REALITY LARGER IN SIZE. FOR THI S, THE ASSESSING OFFICER PLACED RELIANCE ON THE STATEMENTS OF SHRI BHARAT K, SHAH, WHEN HE WAS CONFRONTED WITH THESE FACTS AS WELL AS THAT OF CERTAIN FLAT PURCHASERS RECORDED IN THE POST SEARCH INQUIRY. 5. HAVING OBSERVED AS ABOVE, THE ASSESSING OFFICER DISCUSSED VARIOUS FACTS REGARDING INADMISSIBILITY OF DEDUCTIO N U/S.80IB(10) INCLUDING THE INFLATION OF DEDUCTION BY A SUM OF 92,96,169/- ON THE GROUND THAT THE COMMERCIAL FSI WAS SOLD TO THE SIST ER CONCERN AT LESS THAN COST PRICE. THE ASSESSING OFFICER IN PARA 10 OF ASSESSMENT ORDER HAS THEREAFTER QUOTED THE DETAILED SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE DURING ASSESSMENT WHICH WAS BASED ON M ATERIAL AVAILABLE WITH HIM. THE REPLY OF SAME WAS GIVEN BY THE ASSESSEE VIDE LETTER DT. 04.12.2009 IN RESPONSE TO THE AFORESAID SHOW CAUSE NOTICE WAS MADE PART OF ANNEXURE A TO THE ASSESSMENT ORD ER AND AFTER CONSIDERING THE SAME, THE ASSESSING OFFICER STATED AS TO WHY THE CLAIM DEDUCTION MADE BY THE ASSESSEE WAS NOT ACCEPT ABLE. 6. IN APPEAL, REVISED THEIR GROUNDS RELATING TO GRO UND NO.1 AS DISCUSSED IN PARA BELOW. THE RELEVANT PORTION OF S UBMISSION MADE BY THE ASSESSEE AS PER REVISED GROUND VIDE THEIR LE TTER DT. 09.09.2011 IS REPRODUCED AS UNDER: 'IN CONTINUATION TO OUR SUBMISSIONS VIDE OUR LETTER DATED JANUARY 18, 2011 WE WOULD LIKE TO SUBMIT AS UNDER : 5 AS PER THE ASSESSMENT ORDER THE REASON FOR DISALLOW ANCE OF CLAIM U/S 80IB(10) IS THAT WE HAVE, ALLEGEDLY, GROS SLY VIOLATED THE PROVISIONS OF SECTION 80IB(10) AND SUCH VIOLATI ONS ARE MENTIONED IN PARA 13 A & B OF THE ASSESSMENT ORDER. THOUGH THE REASONS FOR DISALLOWANCE HAVE BEEN STATE D IN PARA 13 A & D OF THE ASSESSMENT ORDER, THERE ARE CERTAIN OBSERVATIONS MADE IN THE ASSESSMENT ORDER. THOUGH T HESE OBSERVATIONS ARE NOT NECESSARILY A REASON FOR DISAL LOWANCE OF DEDUCTION U/S 80IB(10) THE OBSERVATIONS ARE FACTUAL LY INCORRECT. THE ASSESSEE ALSO RAISED ITS GROUND AND MADE A DETA ILED FACTUAL AND LEGAL SUBMISSIONS BEFORE CIT(A). IN SUM AND SUBSTANCE, THE STAND OF ASSESSEE HAS BEE N THAT THE FIRM HAS COMPLETED A SEPARATELY IDENTIFIABLE HOUSIN G PROJECT ON PLOT NO. 64 AND HAS ALSO COMPLIED WITH ALL THE STIPULATE D CONDITIONS AS PRESCRIBED BY SECTION 80IB(10) VIZ. : I. THE SIZE OF THE PLOT OF LAND ON WHICH HOUSING PROJE CT IS CONSTRUCTED IS MORE THAN ONE ACRE. II. THE DEVELOPMENT AND. CONSTRUCTION OF HOUSING PROJECT COMMENCED AFTER I ST OCTOBER, 1998 AND COMPLETED BEFORE 31 ST MARCH, 2008 III. THE BUILT - UP AREA OF EACH RESIDENTIAL UNIT IS LES S THAN 1.500 SQ. FT. IV. THERE ARE NO SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS IN THE HOUSING PROJECT. IT IS THEREFORE REQUESTED THAT DEDUCTION CLAIMED U/ S 80 IB(10) MAY KINDLY BE ALLOWED. ' 7. THE CIT(A) AFTER HAVING CONSIDERED THE CASE AND LAW ON THE ISSUE, OBSERVED THAT THE ASSESSEE IS A PARTNERSHIP FIRM WHICH ACQUIRED DEVELOPMENT RIGHTS IN RESPECT OF A LAND AD MEASURING 4H 63R (45,137 SQ. MTRS.) SITUATED AT FINAL PLOT NO. 4 10 OF S.NO.706A AND B FROM KIRLOSKAR BROTHERS LTD. VIDE DEVELOPMENT AGREEMENT DATED 11.12.2000 FOR A CONSIDERATION OF 23,50,00,000/-. AS PER 6 ASSESSEE, THE AFORESAID LAND WAS HAVING AN INDUSTRI AL USER, WHICH WAS GRANTED PERMISSION OF RESIDENTIAL USER BY PUNE MUNICIPAL CORPORATION VIDE ORDER DATED 22.11.2000 WHICH IS NO T IN DISPUTE. THE ASSESSEE THEREAFTER CLAIMS TO HAVE GOT A LAYOUT APPROVED, AS PER WHICH THE AFORESAID LAND AREA WAS DIVIDED INTO PLOT S BEARING NUMBERS 1 TO 11, 14 TO 61, 63, 64 AND 65 ALONG WITH INTERNAL ROADS, SPACE FOR COMMON AMENITIES ETC. IT HAS BEEN STATED THAT NO PLOTS WERE EXISTING AT NOS.12, 13, AND 62. AS PER ASSESS EE, ALL THE AFORESAID PLOTS EXCEPT, PLOT NO.63, 64 AND 65 WERE SOLD AS BUNGALOW PLOTS TO DIFFERENT PERSONS AND THE RESPECTIVE OWNER S HAVE CONSTRUCTED THE BUNGALOWS THEMSELVES. AS PER ASSES SEE, THE VARIOUS PERMISSIONS FROM PMC ETC. FOR CONSTRUCTION OF BUNGA LOWS WERE TAKEN BY THE RESPECTIVE PLOT OWNERS. THE PROFIT FROM THE SALE OF BUNGALOW PLOTS HAVE BEEN CLAIMED TO HAVE BEEN OFFERED TO TAX IN A.Y. 2001-02 AND A.Y. 2002-03 WITHOUT CLAIMING ANY DEDUCTION U/S .80IB(10). IT WAS FURTHER STATED ON BEHALF OF ASSESSEE THAT THE A REA OF ALL THE THREE REMAINING PLOTS I.E. PLOT NOS.63, 64 AND 65 WERE IN EXCESS OF ONE ACRE SEPARATELY. THE MULTI STORIED RESIDENTIAL AND RES IDENTIAL CUM COMMERCIAL BUILDINGS HAVE BEEN CONSTRUCTED IN THESE PLOTS ON WHICH DEDUCTION U/S.80IB(10) HAS BEEN CLAIMED IN AY 2003- 04 AND AY 2005-06. IN A.Y. 2003-04 WHICH IS FIRST YEAR OF APP EAL WHERE, CLAIM U/S.80IB(10) HAS BEEN MADE FOR BUILDINGS A, B AND C CONSTRUCTED IN PLOT NO.64. AS PER THE MATERIALS AVAILABLE ON RECO RD THE AFORESAID CLAIM OF ASSESSEE WAS INITIALLY ACCEPTED BY THE ASS ESSING OFFICER U/S 143(3) BEFORE SEARCH, WHICH HAS BEEN DENIED IN THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S.153A ON 31.12.2009, WHICH W AS SUBJECT MATTER OF APPEAL BEFORE CIT(A). DEDUCTION U/S.80IB (10) HAS ALSO BEEN CLAIMED IN RESPECT OF BUILDINGS CONSTRUCTED IN PLOT NO.63 AND 65 IN A.Y. 2005-06. THIS CLAIM HAS ALSO NOT BEEN A LLOWED BY THE ASSESSING OFFICER FOR MORE OR LESS SIMILAR REASONS. BUT CIT(A) NOTED THAT THE COMMERCIAL USER HAS BEEN CONSTRUCTED IN CE RTAIN BUILDINGS AT GROUND AND STILT FLOOR OF THE BUILDINGS CONSTRUC TED IN PLOT NOS.63 AND 65 ONLY WHICH IS SUBJECT MATTER OF APPEAL IN AY 2006-06. THE 7 ASSESSING OFFICER HAS COMMONLY DISCUSSED THE ISSUE IN BOTH THESE ASSESSMENT YEARS. 7.1 THE CIT(A) OBSERVED THAT ALL THE BUILDINGS AND THE PLOTS OF LAND SOLD FOR BUNGALOW CONSTRUCTIONS ETC. ARE PART OF ON E PROJECT CALLED SUJAY GARDEN AND THEREFORE, AS PER THE ASSESSING OF FICER THE CONDITIONS PRESCRIBED IN SEC. 80IB(10) HAS TO BE TE STED ON THIS PROPOSITION. THE ASSESSEE OBJECTED THE SAME AND ASSERTED THAT THE PROJECT DEVELOPED IN DIFFERENT PLOTS ARE SEPARATE F ROM EACH OTHER AND THE BUILDINGS CONSTRUCTED IN ONE PLOT SHOULD BE TRE ATED AS ONE PROJECT AND THE CONDITIONS PRESCRIBED U/S.80IB(10) SHOULD BE TESTED ON THIS PROPOSITION, THEREFORE, ON ASSESSING OFFICE R'S PROPOSITION THAT EVEN THE COMMERCIAL USERS CONSTRUCTED IN PLOT NO.63 AND 65, WILL BE REQUIRED TO BE CONSIDERED TO BE CONSIDERED AS PART OF PROJECT, WHILE DECIDING THE CLAIM U/S.80IB(10) MADE IN A.Y. 2003-0 4 ON BUILDINGS A, B AND C CONSTRUCTED IN PLOT NO.64, HAVING ONLY T HE RESIDENTIAL USERS. ON THE ISSUE OF COMMERCIAL USER, IT WAS OBS ERVED THAT THE ASSESSEE TO HAVE NOT MADE ANY CLAIM U/S.80IB(10) IN RESPECT OF PROFITS EARNED FROM THE SALE OF COMMERCIAL PORTION OF THE BUILDINGS CONSTRUCTED IN PLOT NO.63 AND 65. IT HAS BEEN STAT ED THAT THE FSI RELATING TO THE COMMERCIAL USERS HAVE BEEN SOLD AT COST TO THE ASSOCIATE COMPANY CALLED 'SUJAY CONSTRUCTION PVT LT D.' AND THE PROFIT HAS BEEN SHOWN BY THE SAID COMPANY ON THE SA LE OF COMMERCIAL PORTION WITHOUT ANY CLAIM FOR DEDUCTION U/S.80IB(10). THE ASSESSING OFFICER HAS NOT DISPUTED ANY OF THE A BOVE FACTUAL METRICS AVAILABLE ON RECORD, ONLY THE INTERPRETATIO N PART IS IN DISPUTE, WHICH ARE AS (A) SUJAY GARDEN AS A WHOLE IS ONE PROJECT, (B) COMMERCIAL AREA EVEN IF SOLD WILL BE PART OF TH E SAME PROJECT, (C) DEDUCTION U/S 80IB(10) HAS BEEN INFLATED BY TRA NSFERRING THE COMMERCIAL FSI AT COST NOT COMPUTED PROPERLY, AND (D) CONDITIONS PRESCRIBED IN SEC. 80IB(10) STANDS V IOLATED ETC. 8 7.2 THE CIT(A) OBSERVED THAT THE GROUNDS RAISED BY THE ASSESSEE ORIGINALLY IN FORM NO. 35 THAT THE ASSESSEE HAS RAI SED ONLY FOUR GROUNDS OF APPEAL AND ONLY GROUND NO.1 WAS THE MAIN GROUND WHEREIN IT WAS CLAIMED THAT THE ASSESSING OFFICER H AS ERRED IN NOT ALLOWING THE DEDUCTION U/S.80IB(10) OF 6,21,63,174/-. THE ASSESSING OFFICER FINALLY CONCLUDED IN PARA 13 OF T HE ASSESSMENT ORDER THAT THE DEDUCTION IS DENIED FOR (A) INCLUSIO N OF COMMERCIAL SPACE OF 5730 SQ. MTRS. (61,677 SQ.FT), WHICH IS MO RE THAN 2000 SQ.FT OR 5% OF THE BUILT UP AREA OF THE PROJECT AND (B) C ERTAIN RESIDENTIAL UNITS ARE MORE THAN 1500 SQ.FT IN SIZE, FOR CERTAIN REASONS, THE ASSESSEE SOUGHT REVISION OF GROUNDS RAISED BEFORE C IT(A) AND THE SAME WAS ALLOWED. THE REVISED GROUNDS HAVE BEEN DE ALT BY CIT(A) AS UNDER: 7.3 FIRST ISSUE RELATES TO WHETHER 'SUJAY GARDEN' A S A WHOLE COMPRISING OF DIFFERENT PLOTS ON WHICH BUNGALOWS WE RE CONSTRUCTED BY THE BUYERS THEMSELVES AND OTHER PLOTS WHERE MULT I STORIED RESIDENTIAL CUM COMMERCIAL TENEMENTS DEVELOPED THER EON WOULD CONSTITUTE AS ONE PROJECT AS HELD BY THE ASSESSING OFFICER OR SEPARATE PROJECTS AS CLAIMED THE ASSESSEE. AS DISCUSSED ABO VE, THE ENTIRE LAND OF 4H 63R WAS ACQUIRED FROM KIRLOSKER BROTHERS TO CONSTRUCT RESIDENTIAL, COMMERCIAL, INDUSTRIAL TENEMENTS AND B UILDINGS IN ACCORDANCE WITH THE APPROVED SCHEME BY THE COMPETEN T AUTHORITY I.E. PMC. THE DEVELOPMENT AGREEMENT EMPOWERS THE A SSESSEE TO DIVIDE THE PROPERTIES INTO VARIOUS SUB-PLOTS, ROADS , ETC. AND SELL THEM WITH OR WITHOUT BUILDINGS. THE ENTIRE LAND WAS DIV IDED INTO SUB-PLOTS BEARING NOS. 1 -11, 14-61, 63, 64 & 65 AS DISCUSSED ABOVE. ALL PLOTS WERE CLAIMED TO HAVE BEEN SOLD AS BUNGALOW PLOTS EX CEPT PLOT NO.63, 64 & 65 AND ALL OF THOSE THREE PLOTS ARE IN EXCESS OF ONE ACRE IN SIZE INDEPENDENTLY. AS DISCUSSED ABOVE, THE BUNGALOWS W ERE CLAIMED TO HAVE BEEN CONSTRUCTED BY THE PLOT PURCHASERS THEMSE LVES AFTER GETTING THE PLANS APPROVED FROM THE PMC. IN VIEW O F THE ABOVE THE 9 CLAIM HAS BEEN MADE THAT THE LAYOUT PLAN WAS ONLY F OR THE PURPOSE OF OVERALL ORIENTATION OF THE BUILDINGS IN THE LAND AND IT IS NOT CORRECT TO TREAT IT AS A PROJECT IN TERMS OF THE MEANING AS IS ENVISAGED IN SEC.80IB(10) FOR AUGMENTATION OF SUPPLY OF THE RESI DENTIAL FLATS FOR THE MIDDLE CLASS AND LOWER MIDDLE CLASS. THE LAYOU T PLAN IS DIFFERENT FROM BUILDING PLAN. ONE LAYOUT PLAN CAN HAVE DIFFE RENT PROJECT SUBJECT TO FULFILLING OTHER CONDITIONS OF SEC. 80IB (10) OF ACT. THE BUILDING PLANS FOR DIFFERENT PLOTS WERE SEPARATELY APPROVED BY THE PMC. THE WORD 'HOUSING PROJECT' IS NOT DEFINED IN THIS SECTION. THEREFORE THE CLAIM OF THE ASSESSEE THAT THE HOUSIN G PROJECT IS NOT THE LAY OUT APPROVED ON A LARGE PIECE OF LAND BUT A RE PROJECTS INDEPENDENTLY DEVELOPED ON PLOTS DELINEATED AFTER T HE APPROVAL OF LAY OUT. THE MAIN STAND OF THE ASSESSING OFFICER HAS B EEN THAT THE COMMON LAYOUT, HAVING COMMON FACILITY FOR ALL THE P LOTS, LIKE ROAD, CLUB HOUSE, ETC. SHOULD BE TREATED AS ONE PROJECT. SUCH INTERPRETATIONS HAVE NOT BEEN APPROVED BY THE VARIO US JUDICIAL PRONOUNCEMENTS. THE PROVISION OF SEC. 80IB(10) BEI NG BENEFICIAL PROVISION SHOULD BE TREATED LIBERALLY. ITAT PUNE I N THE CASE OF SHRI SUBHASH F. BAFNA IN ITA NO.533/PN/2007 FOR A.Y. 200 3-04 HAS HELD AS UNDER: 'AS REGARDS QUESTION WHETHER THE ENTIRE HOUSING PRO JECT CONSISTS OF ONE MORE BUILT UP BLOCK IS TO BE CONSIDERED IN E NTIRETY OR WHETHER THOSE BUILDINGS OR BLOCKS CAN HE CONSIDERED SEPARATELY, THIS ISSUE IS ALSO SETTLED IN FAVOUR OF THE ASSESSE E BY SERIES OF ORDERS OF THIS TRIBUNAL INCLUDING IN THE CASE OF SA ROJ SALES ORGANIZATION VS. 1TO (2008) TTJ(MUM) 485 AND DY.CLT VS. BRIGADE ENTERPRISES PVT. LTD. (2008) 119 TTJ (BANG) 269. THE COORDINATE BENCHES HAVE HELD THAT AS LONG AS THOSE BLOCKS SATISFY THE CONDITIONS OF SEC.80IB(10) ON STAND ALO NE BASIS, THE DEDUCTION U/S 80111(10) OF THE ACT WILL BE ADMISSIB LE ON THE SAID BLOCKS. ' 7.4 SIMILAR VIEW HAS BEEN TAKEN BY THE 'A' BENCH OF PUNE ITAT IN APOORVA PROPERTIES & ESTATE PVT. LTD. VS. DY.CIT, C IR.1(1) IN ITA NO.113/PN/2007 A.Y. 2003-04 WHEREIN IT WAS HELD THA T A PROJECT 10 COULD BE A GROUP OF BUILDINGS OR EACH BUILDING FULF ILLING CONDITIONS SEPARATELY WHERE THE COMMENCEMENT CERTIFICATES ARE SEPARATE. IN THE CASE BEFORE US, THE LAY OUT PLAN HAS DIVIDED THE EN TIRE LAND OF 4H 63R INTO VARIOUS PLOTS WITH LOCATION AND 'NUMBER ALONG WITH ROAD, SPACE FOR COMMON FACILITIES, ETC. MOST OF THE PLOTS HAVE BEEN SOLD AS IT IS TO RESPECTIVE BUYERS, WHO HAVE OBTAINED THE APPROVALS INDEPENDENTLY FROM THE PMC. THE PLOTS DESIGNATED AS 63, 64 & 65 O F THE LAY OUT HAVE BEEN USED BY THE ASSESSEE FOR CONSTRUCTING DIF FERENT MULTISTORIED BUILDINGS AND BUILDINGS DEVELOPED IN E ACH PLOT HAS BEEN CLAIMED BY THE ASSESSEE TO BE A SEPARATE PROJECT. I T WAS DEMONSTRATED THAT THE BUILDING COMMENCEMENT CERTIFI CATE AND BUILDING PLAN APPROVAL FOR EACH PLOT HAS BEEN SEPAR ATELY TAKEN AND THE COMPLETION CERTIFICATES HAVE ALSO BEEN OBTAINED SEPARATELY. THIS HAS NOT BEEN DISPUTED BY REVENUE. THEREFORE IN THE INTERPRETATION GIVEN TO THE PROJECT BY THE VARIOUS JUDICIAL PRONOU NCEMENTS, THE CLAIM OF THE ASSESSEE HAS TO BE ADMITTED. 7.5 WE FIND THAT THE HON'BLE BOMBAY HIGH COURT IN T HE CASE OF CIT VS. VANDANA PROPERTIES (2012) 206 TAXMAN 584 (BOM) HAS AFFIRMED THIS VIEW TAKEN ON BEHALF OF ASSESSEE. THE RELEVAN T PORTION OF THE SAID ORDER IS REPRODUCED AS UNDER: 20. THE QUESTION, THEN, TO BE CONSIDERED IS, WHETH ER CONSTRUCTION OF E BUILDING IS AN INDEPENDENT HOUSIN G PROJECT OR EXTENSION OF THE HOUSING PROJECT ALREADY EXISTING O N THE PLOT IN QUESTION. IT IS THE CONTENTION OF THE REVENUE THAT SINCE THE APPROVAL FOR CONSTRUCTION OF 'E' BUILDING WAS GRANT ED BY THE LOCAL AUTHORITY SUBJECT TO THE CONDITIONS SET OUT I N THE FIRST APPROVAL GRANTED ON 12TH MAY 1993 FOR CONSTRUCTION OF A AND B BUILDING, CONSTRUCTION OF 'E' BUILDING MUST BE CONS IDERED TO BE THE EXTENSION OF THE EARLIER HOUSING PROJECT FOR WH ICH APPROVAL WAS GRANTED PRIOR TO 1ST OCTOBER 1998 AND, THEREFOR E, THE BENEFIT OF SECTION 80IB(10) CANNOT BE GRANTED. THER E IS NO MERIT IN THE ABOVE ARGUMENT, BECAUSE, WHEN THE PLANS FOR A, B, C AND D BUILDINGS WERE APPROVED DURING THE PERIOD FROM 19 93 TO 1996, CONSTRUCTION OF 'E' BUILDING WAS NOT EVEN CON TEMPLATED ON THE PLOT IN QUESTION. IT IS ONLY IN THE YEAR 200 1 WHEN THE STATUS OF THE LAND WAS CONVERTED FROM SURPLUS VACAN T LAND INTO WITHIN THE CEILING LIMIT LAND BY THE STATE GOVERNME NT, AN 11 ADDITIONAL BUILDING COULD BE CONSTRUCTED ON THE PLO T IN QUESTION AND ACCORDINGLY BUILDING PLAN FOR CONSTRUCTION OF ' E' BUILDING WAS SUBMITTED AND THE SAME WAS APPROVED BY THE LOCA L AUTHORITY ON 11TH OCTOBER 2002. 21. THE FACT THAT THE LOCAL AUTHORITY, NAMELY THE M UNICIPAL CORPORATION APPROVED THE BUILDING PLAN FOR 'E' BUIL DING ON THE CONDITION THAT ALL THE OBJECTIONS RAISED IN THE INT IMATION OF DISAPPROVAL DATED 12 TH MAY 1993 RELATING TO THE EARLIER HOUSING PROJECT ON THE SAME PLOT OF LAND SHALL BE APPLICABL E AND SHOULD BE COMPLIED WITH, CANNOT BE A GROUND TO HOLD THAT ' E' BUILDING IS EXTENSION OF THE EARLIER HOUSING PROJECT BECAUSE THE EARLIER HOUSING PROJECT WAS COMPLETED PRIOR TO 1ST OCTOBER 1998 AND THE HOUSING PROJECT FOR CONSTRUCTION OF 'E' BUILDIN G WAS APPROVED FOR THE FIRST TIME ON 11 TH OCTOBER 2002. NOWHERE IN THE INTIMATION FOR DISAPPROVAL GRANTED FOR CONSTRUC TION OF 'E' BUILDING ON 11TH OCTOBER 2002, IT IS STATED THAT BU ILDING E' CONSTITUTES EXTENSION OF THE EARLIER HOUSING PROJEC T WHICH IS ALREADY COMPLETED. THE FACT THAT THE OBJECTIONS RAI SED WHILE APPROVING THE EARLIER HOUSING PROJECT ON THE SAME P LOT OF LAND WERE MADE APPLICABLE TO THE HOUSING PROJECT IN QUES TION, IT CANNOT BE INFERRED THAT THE HOUSING PROJECT IN QUES TION CONSTITUTES EXTENSION OF THE EARLIER HOUSING PROJEC T. THEREFORE, IN THE FACTS OF THE PRESENT CASE, WHERE, NEITHER TH E ASSESSEE HAD SOUGHT APPROVAL OF THE BUILDING PLAN FOR CONSTRUCTI ON OF 'E' BUILDING AS EXTENSION OF THE EARLIER HOUSING PROJEC T, NOR THE MUNICIPAL CORPORATION HAS GRANTED APPROVAL FOR THE HOUSING PROJECT CONSISTING OF 'E' BUILDING AS EXTENSION OF THE EARLIER HOUSING PROJECT, IT IS NOT OPEN TO THE INCOME TAX A UTHORITIES TO CONTEND THAT APPROVAL TO THE HOUSING PROJECT GRANTE D BY THE MUNICIPAL CORPORATION ON 11TH OCTOBER 2002 CONSTITU TES EXTENSION OF THE HOUSING PROJECT WHICH WAS APPROVED IN THE YEAR 1993. 22. RELIANCE PLACED BY THE REVENUE ON THE EXPLANATI ON TO SECTION 80IB (10)(A) WHICH WAS INTRODUCED WITH EFFE CT FROM 1ST APRIL 2005 IS ALSO MISPLACED. WHAT THE SAID EXPLANA TION CONTEMPLATES IS THAT WHERE THE APPROVAL IN RESPECT OF A HOUSING PROJECT IS GRANTED MORE THAN ONCE, THEN, THAT HOUSI NG PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE O N WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY. FOR EXAMPLE, IN RESPECT OF A H OUSING PROJECT, THE ASSESSEE MAY SEEK AMENDMENT OF THE BUI LDING PLAN AT SEVERAL STAGES OF THE CONSTRUCTION AND THE SAME MAY BE APPROVED. IN SUCH A CASE, THE EXPLANATION PROVIDES THAT FOR THE PURPOSES OF SECTION 80IB (10) THE HOUSING PROJECT S HALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH T HE FIRST APPROVAL WAS GRANTED BY THE LOCAL AUTHORITY. THUS, THE EXPLANATION TO SECTION 80IB (10)(A) REFERS TO THE A PPROVAL GRANTED TO THE SAME HOUSING PROJECT MORE THAN ONCE AND THE 12 SAID EXPLANATION WOULD NOT APPLY WHERE THE APPROVAL IS GRANTED TO DIFFERENT HOUSING PROJECTS. IN THE PRESENT CASE, AS NOTED EARLIER, CONSTRUCTION OF 'E' BUILDING CONSTITUTES A N INDEPENDENT HOUSING PROJECT AND, THEREFORE, THE DATE ON WHICH T HE EARLIER HOUSING PROJECT HAD COMMENCED CONSTRUCTION COULD NO T BE APPLIED TO THE HOUSING PROJECT CONSISTING OF 'E' BU ILDING MERELY BECAUSE THE CONDITIONS SET OUT WHILE GRANTING APPRO VAL TO THE EARLIER HOUSING PROJECT HAVE ALSO BEEN MADE APPLICA BLE TO THE HOUSING PROJECT IN QUESTION. 23. THE NEXT ARGUMENT OF THE REVENUE IS THAT TO AVA IL THE DEDUCTION UNDER SECTION 80IB (10), THE HOUSING PROJ ECT MUST BE ON THE SIZE OF A VACANT PLOT OF LAND WHICH HAS MINI MUM AREA OF ONE ACRE. IN THE PRESENT CASE, THERE ARE FIVE BUILD INGS (A, B, C, D AND E) ON A PLOT ADMEASURING 2.36 ACRES, HENCE, T HE PROPORTIONATE AREA FOR EACH BUILDING WOULD BE LESS THAN ONE ACRE AND, THEREFORE, THE BENEFIT OF SECTION 80IB (1 0) COULD NOT BE GRANTED IN RESPECT OF THE HOUSING PROJECT CONSIS TING 'E' BUILDING. 24. AS RIGHTLY CONTENDED BY THE COUNSEL FOR THE ASS ESSEE AND THE INTERVENERS, SECTION 80IB (10)(B) SPECIFIES THE SIZE OF THE PLOT OF LAND BUT NOT THE SIZE OF THE HOUSING PROJECT. TH E SIZE OF THE PLOT OF LAND AS PER SECTION 80IB(10) MUST HAVE MINI MUM AREA OF ONE ACRE. THE SECTION DOES NOT LAID DOWN THAT TH E PLOT HAVING MINIMUM AREA OF ONE ACRE MUST BE A VACANT PLOT. 25. THE QUESTION, THEREFORE, TO BE CONSIDERED IS, W HETHER THE REVENUE IS JUSTIFIED IN READING THE EXPRESSION 'PLO T OF LAND' IN SECTION 80IB (10)(B) AS 'VACANT PLOT OF LAND' ? 26. THE OBJECT OF SECTION 80IB (10) IN GRANTING DED UCTION EQUAL TO ONE HUNDRED PER CENT OF THE PROFITS OF AN UNDERT AKING ARISING FROM DEVELOPING AND CONSTRUCTING A HOUSING PROJECT IS WITH A VIEW TO BOOST THE STOCK OF HOUSES FOR LOWER AND MID DLE INCOME GROUPS SUBJECT TO FULFILLING THE SPECIFIED CONDITIO NS. THE FACT THAT THE MAXIMUM SIZE OF THE RESIDENTIAL UNIT IN A HOUSING PROJECT SITUATED, WITHIN THE CITY OF MUMBAI AND DEL HI IS RESTRICTED TO 1000 SQUARE FEET CLEARLY SHOWS THAT T HE INTENTION OF THE LEGISLATURE IS TO MAKE AVAILABLE LARGE NUMBE R OF MEDIUM SIZE RESIDENTIAL UNITS FOR THE BENEFIT OF THE COMMO N MAN. HOWEVER, IN THE ABSENCE OF DEFINING THE EXPRESSION 'HOUSING PROJECT' AND IN THE ABSENCE OF SPECIFYING THE SIZE OR THE NUMBER OF HOUSING PROJECTS REQUIRED TO BE CONSTRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE, EVEN ONE HOUSING P ROJECT CONTAINING MULTIPLE RESIDENTIAL UNITS OF A SIZE NOT EXCEEDING 1000 SQUARE FEET CONSTRUCTED ON A PLOT OF LAND HAVI NG MINIMUM AREA OF ONE ACRE WOULD BE ELIGIBLE FOR SECTION 80IB (10) DEDUCTION. IF THE CONSTRUCTION OF SECTION 80IB (10) PUT FORTH BY 13 THE REVENUE IS ACCEPTED, IT WOULD, MEAN, THAT IF ON A VACANT PLOT OF LAND, ONE HOUSING PROJECT FULFILLING ALL CO NDITIONS IS UNDERTAKEN, THEN DEDUCTION WOULD BE AVAILABLE TO TH AT HOUSING PROJECT AND IF THEREAFTER SEVERAL OTHER HOUSING PRO JECTS ARE UNDERTAKEN ON THE VERY SAME PLOT OF LAND,, THE DEDU CTION WOULD NOT BE AVAILABLE TO THOSE HOUSING PROJECTS AS THE P LOT CEASES TO BE A VACANT PLOT AFTER THE CONSTRUCTION OF THE FIRS T HOUSING PROJECT. SUCH A CONSTRUCTION IF ACCEPTED WOULD DEF EAT THE OBJECT WITH WHICH SECTION 80IB (10) WAS ENACTED. 27. MOREOVER, PLAIN READING OF SECTION 80IB (10) DO ES NOT EVEN REMOTELY SUGGEST THAT THE PLOT OF LAND HAVING MINIM UM AREA OF ONE ACRE MUST BE VACANT. THE SAID SECTION ALLOWS DE DUCTION TO A HOUSING PROJECT (SUBJECT TO FULFILLING ALL OTHER CONDITIONS) CONSTRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA O F ONE ACRE AND IT IS IMMATERIAL AS TO WHETHER ANY OTHER HOUSIN G PROJECTS ARE EXISTING ON THE SAID PLOT OF LAND OR NOT. IN TH ESE CIRCUMSTANCES, CONSTRUING THE PROVISIONS OF SECTION 80IB (10) BY ADDING WORDS TO THE STATUTE IS WHOLLY UNWARRANTE D AND SUCH A CONSTRUCTION WHICH DEFEATS THE OBJECT WITH WHICH THE SECTION WAS ENACTED MUST BE REJECTED. 28. APART FROM THE ABOVE, THE CENTRAL BOARD OF DIRE CT TAXES (CBDT) BY ITS LETTER DATED 4TH MAY 2001 ADDRESSED T O THE MAHARASHTRA CHAMBER OF HOUSING INDUSTRY HAS STATED THUS: 'THE UNDERSIGNED IS DIRECTED TO REFER TO YOUR LETTE R NO.MCHI:RSA:M:388/19799/3 DATED 1 ST JANUARY 2001 AND TO STATE THAT THE ADDITIONAL HOUSING PROJECT ON EXISTI NG HOUSING PROJECT SITE CAN QUALIFY AS INFRASTRUCTURE FACILITY UNDER SECTION 10(23G) AND 80IB (10) PROVIDED IT IS TAKEN UP BY A SEPARATE UNDERTAKING, HAVING SEPARATE BOOKS OF ACCOUNTS, SO AS TO ENSURE THAT CORRECT PROFITS CAN BE ASCERTAINED FOR THE PUR POSE OF SECTION 80IB AND ALSO TO IDENTIFY RECEIPTS AND REPAYMENTS O F LONG TERM FINANCES UNDER THE PROVISIONS OF SECTION 10(23G), S EPARATELY FINANCING ARRANGEMENTS AND ALSO, IF IT SEPARATELY F ULFILLS ALL OTHER STATUTORY CONDITIONS LISTED IN SECTIONS 10(23G) AND 80IB(10). WITH REGARD TO YOUR QUERY REGARDING THE DEFINITION OF HOUSING PROJECT, IT IS CLARIFIED THAT ANY PROJECT WHICH HAS BEEN APPROVED BY A LOCAL AUTHORITY AS A HOUSING PROJECT SHOULD BE CONSIDERED ADEQUATE FOR THE PURPOSE OF SECTION 10(23G) AND 80I B (10).' 29. FROM THE AFORESAID LETTER OF CBDT, IT IS CLEAR THAT FOR THE PURPOSES OF SECTION 80IB (10) IT IS NOT THE MANDATE OF THE SECTION THAT THE HOUSING PROJECT MUST BE ON A VACAN T PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE AND THAT WHERE A NEW HOUSING PROJECT IS CONSTRUCTED ON A PLOT OF LAND HA VING MINIMUM AREA OF ONE ACRE BUT WITH EXISTING HOUSING PROJECTS 14 WOULD QUALIFY FOR SECTION 80IB (10) DEDUCTION. EVEN OTHERWISE, THE ARGUMENT OF THE REVENUE DOES NOT STAND TO REASO N BECAUSE, IN THE CITY OF MUMBAI WHERE THERE IS ACUTE SPACE CR UNCH, IT IS DIFFICULT TO FIND A VACANT PLOT HAVING MINIMUM AREA OF ONE ACRE AND EVEN IF FEW SUCH PLOTS ARE EXISTING IT CANNOT B E SAID THAT SECTION 80IB (10) DEDUCTION WAS INTENDED TO GIVE BE NEFIT ONLY TO THE UNDERTAKINGS WHO CONSTRUCT HOUSING PROJECTS ON THOSE FEW PLOTS. THEREFORE, IT IS CLEAR THAT ON A PLOT OF LAN D HAVING MINIMUM AREA OF ONE ACRE, THERE CAN BE ANY NUMBER O F HOUSING PROJECTS AND SO LONG AS THOSE HOUSING PROJECTS ARE APPROVED BY THE LOCAL AUTHORITY AND FULFILL THE CONDITIONS SET OUT UNDER SECTION 80IB (10), THE DEDUCTION THEREUNDER CANNOT BE DENIED TO ALL THOSE HOUSING PROJECTS. SECTION 80IB (10) WH ILE SPECIFYING THE SIZE OF THE PLOT OF LAND, DOES NOT SPECIFY THE SIZE OR THE NUMBER OF HOUSING PROJECTS THAT ARE REQUIRED TO BE UNDERTAKEN ON A PLOT HAVING MINIMUM AREA OF ONE ACRE. AS A RES ULT, SIGNIFICANCE OF THE SIZE OF THE PLOT OF LAND IS LOS T AND, THEREFORE, THE ASSESSEE SUBJECT TO FULFILLING OTHER CONDITIONS BECOMES ENTITLED TO SECTION 80IB (10) DEDUCTION ON CONSTRUC TION OF A HOUSING PROJECT ON A PLOT HAVING AREA OF ONE ACRE, IRRESPECTIVE OF THE FACT THAT THERE EXIST OTHER HOUSING PROJECTS OR NOT. IN THESE CIRCUMSTANCES, THE DECISION OF THE TRIBUNAL IN REJE CTING THE CONTENTION OF THE REVENUE REGARDING THE SIZE OF THE PLOT CANNOT BE FAULTED.' WE FIND THAT THE RATIO LAID DOWN BY THE JURISDICTI ONAL HIGH COURT IN VANDANA PROPERTIES (SUPRA) HELP THE FACT O F ASSESSEE TO CLAIM DEDUCTION U/S.80IB(10) OF ACT. 7.6 WE ALSO FIND THAT ITAT, PUNE BENCH IN THE CASE OF RAHUL CONSTRUCTION CO. VS. ITO IN ITA NO.1250/PN/09 & 707 /PN/2010 HAS OBSERVED AS UNDER: 10. IN VIEW OF ABOVE DISCUSSION, WE COME TO THE CO NCLUSION THAT FOR VERIFICATION OF ELIGIBILITY OF BENEFIT CLA IMED U/S. 80 IB (10) OF THE ACT BY THE ASSESSEE ON BUILDINGS AL TO A5 IN 'ATUL NAGAR' AND BUILDINGS BL TO B6 IN 'RAHUL NISARG CO-O PERATIVE HOUSING SOCIETY LTD.', THE ASSESSING AUTHORITY HAS TO VERIFY AS TO WHEN THE BUILDING PLANS FOR THESE BUILDINGS WERE FIRSTLY APPROVED BY THE LOCAL AUTHORITY AND TAKING THE SAID DATE OF APPROVAL A STARTING POINT, HE HAS TO VERIFY AS TO W HETHER THESE BUILDINGS WERE COMPLETED WITHIN THE PRESCRIBED TIME LIMIT I.E. 31ST MARCH 2008 ON THE BASIS OF THE COMPLETION CERT IFICATE IN RESPECT OF SUCH HOUSING PROJECT ISSUED BY THE PMC. WHEN WE EXAMINE THE FACTS OF THE PRESENT CASE UNDER THE ABO VE 15 BACKGROUND, WE FIND THAT THE AUTHORITIES BELOW HAVE NOT DISPUTED THE FACT FURNISHED IN THIS REGARD BY THE A SSESSEE THAT UNDER THE PROJECT 'ATUL NAGAR' CONSISTING OF BUILDI NGS AL TO A5, THE FIRST BUILDING PLAN FOR A TYPE WAS APPROVED BY THE PMC ON 29.4.2003 VIDE COMMENCEMENT CERTIFICATE NO. 4269 (P AGE NO. 4 OF THE PAPER BOOK). HOWEVER, ACTUAL CONSTRUCTION OF A TYPE BUILDING WAS EXECUTED AS PER THE REVISED PLAN VIDE NO. C.C. 4101/27/6/2003 (PAGE NO. 5 OF THE PAPER BOOK). THE SIZE OF THE PLOT ON WHICH THE A TYPE BUILDING I.E. AI TO A6 HAVE BEEN CONSTRUCTED IS 1,39,466 SQ.FT. THE PROJECT A TYPE B UILDING I.E. AL TO A5 CONSISTS OF 360 RESIDENTIAL UNITS AND THE CON STRUCTION HAS BEEN COMPLETED BETWEEN 10.1.2005 TO 31.8.2003 (PAGE NOS. 6 TO 9 OF PAPER BOOK). THE AUTHORITIES BELOW HAVE ALSO N OT DISPUTED THIS MATERIAL FACT THAT RESIDENTIAL UNITS HAS A MAX IMUM BUILT UP AREA OF 1500 SQ.FT. LIKEWISE, THESE MATERIAL FAC TS THAT B GROUP BUILDINGS IN 'RAHUL NISARG COOPERATIVE HOUSIN G SOCIETY LTD.,' HAVE BEEN CONSTRUCTED ON LAND AREA OF 138203 SQ.FT., HAS NOT BEEN DENIED BY THE AUTHORITIES BELOW. THEY HAVE ALSO NOT DENIED THESE MATERIAL FACTS THAT THE FIRST BUILDING PLAN WAS SANCTIONED ON 29.4.2003 VIDE COMMENCEMENT CERTIFICA TE NO. 4269 ISSUED BY THE PMC (PAGE-NO. 16 OF THE PAPER BO OK). THE OTHER MATERIAL FACTS LIKE ACTUAL CONSTRUCTION WAS E XECUTED AS PER THE REVISED PLAN SANCTION ON 20TH MARCH 2004 VI DE CC NO. 2225 (PAGE NO.17), THE PROJECT CONSISTS OF 396 FLAT S AND CONSTRUCTION OF THESE FLATS HAVE BEEN COMPLETED ON 14.7.2006 AS PER THE COMPLETION CERTIFICATE ISSUED BY THE PMC (PAGE NOS. 13 TO 18 OF PAPER BOOK) ARE NOT IN DISPUTE. THE AUT HORITIES BELOW HAVE ALSO NOT DENIED THAT BUILT UP AREA OF EA CH OF THESE FLATS DOES NOT EXCEED 1500 SQ.FT. IT IS ALSO NOT IN DISPUTE THAT BOTH THE PROJECTS ARE ENTIRELY A RESIDENTIAL PROJEC T AND THERE IS NO COMMERCIAL AREA THEREIN. UNDER THE ABOVE CIRCUMS TANCES, WE ARE OF THE VIEW THAT THE ASSESSEE IS VERY MUCH E NTITLED TO THE CLAIMED DEDUCTION U/S. 80 IB (10) OF THE ACT ON THE BUILDINGS AI TO A5 IN 'ATUL NAGAR ' AND BUILDINGS B1 TO B6 IN 'R AHUL NISARG COOPERATIVE HOUSING SOCIETY LID.' THE ISSUE IS THER EFORE DECIDED IN FAVOUR OF THE ASSESSEE. WE THUS WHILE SETTING AS IDE THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE, DIRECT THE A .O TO ALLOW THE CLAIMED DEDUCTION U/S. 80IB(10) IN QUESTION. THE RE LATED GROUNDS ARE ACCORDINGLY ALLOWED. 11. IN RESULT, APPEAL IS ALLOWED.' NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON B EHALF OF REVENUE. IN VIEW OF ABOVE, WE FIND THAT THE CLAIM OF THE ASSESSEE HAS BEEN THAT BUILDINGS CONSTRUCTED IN PLOT NO.63, 64 & 65, HAVING 16 SEPARATE APPROVAL OF BUILDING PLANS FROM THE COMPET ENT AUTHORITY AND SEPARATE COMPLETION CERTIFICATES, HAVE TO BE TR EATED AS SEPARATE AND INDEPENDENT HOUSING PROJECTS. ACCORDINGLY, THE CLAIM OF ASSESSEE WAS RIGHTLY ALLOWED UNDER THE PROVISIONS O F SECTION 80IB(10) OF ACT ON THIS ACCOUNT. 7.7 APART FROM THE ISSUE WITH REGARD TO THE BUILDIN G CONSTRUCTED IN PLOT NOS.63 & 65 WILL CONSTITUTE SEPARATE PROJECTS INDEPENDENT OF EACH OTHER, THERE IS ISSUE OF COMMERCIAL AREA. THI S ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE BY THE ORDER OF JURIS DICTIONAL BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (2011) 333 ITR 289 (BOM), WHEREIN IT HAS BEEN HELD AS UNDER: 30. IN THE RESULT, THE QUESTIONS RAISED IN THE AP PEAL ARE ANSWERED THUS : (A) UP TO MARCH 31, 2005 (SUBJECT TO FULFILLING OTH ER CONDITIONS), DEDUCTION UNDER SECTION 80-IB(10) IS ALLOWABLE TO H OUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RE SIDENTIAL UNITS WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DEVELOPMENT CONTROL RULES/ REGULATIONS FRAMED BY TH E RESPECTIVE LOCAL AUTHORITY. (B) IN SUCH A CASE, WHERE THE COMMERCIAL USER PERMI TTED BY THE LOCAL AUTHORITY IS WITHIN THE LIMITS PRESCRIBED UN DER THE DEVELOPMENT CONTROL RULES/REGULATION, THE DEDUCTIO N UNDER SECTION 80-IB(10) UP TO MARCH 31, 2005 WOULD BE AL LOWABLE IRRESPECTIVE OF THE FACT THAT THE PROJECT IS APPROV ED AS 'HOUSING PROJECT' OR 'RESIDENTIAL PLUS COMMERCIAL'. (C) IN THE ABSENCE OF ANY PROVISIONS UNDER THE INCO ME-TAX ACT, THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT UP TO MARCH 31, 2005 DEDUCTION UNDER SECTION 80-IB(10) WOULD BE AL LOWABLE TO PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RE SIDENTIAL BUILDING WITH COMMERCIAL USER UP TO 10 PER CENT. O F THE TOTAL BUILT-UP AREA OF THE PLOT. (D) SINCE THE DEDUCTION UNDER SECTION 80-IB(10) IS ON THE PROFITS DERIVED FROM THE HOUSING PROJECTS APPROVED BY THE L OCAL AUTHORITY AS A WHOLE, THE TRIBUNAL WAS NOT JUSTIFI ED IN RESTRICTING THE SECTION 80-IB(10) DEDUCTION ONLY T O A PART OF THE PROJECT. HOWEVER, IN THE PRESENT CASE, SINCE THE A SSESSEE HAS ACCEPTED THE DECISION OF THE TRIBUNAL IN ALLOWING S ECTION 17 80-IB(10) DEDUCTION TO A PART OF THE PROJECT, WE DO NOT DISTURB THE FINDINGS OF THE TRIBUNAL IN THAT BEHALF. (E) CLAUSE (D) INSERTED TO SECTION 80-IB(10) WITH E FFECT FROM APRIL 1, 2005 IS PROSPECTIVE AND NOT RETROSPECTIVE AND H ENCE CANNOT BE APPLIED FOR THE PERIOD PRIOR TO APRIL 1, 2005. THE APPEAL IS DISPOSED OF ACCORDINGLY WITH NO ORDER AS TO COSTS. ACCORDINGLY, WE HOLD THAT THE ASSESSEES CLAIM HAS RIGHTLY BEEN ALLOWED ON THE POINT OF COMMERCIAL AREA BY CIT(A). WE UPHOLD THE SAME. 7.8 THE ASSESSING OFFICER ALSO DISALLOWED THE CLAIM ON THE GROUND OF EXCESS AREA OF CERTAIN TENEMENTS. IN APPEAL VAR IOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE. HAVING CONSIDER ED THE SAME, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO VERIFY THI S FROM THE RELEVANT RULES OF THE PMC TO ARRIVE AT THE CORRECT DEFINITIO N OF BUILT UP AREA AND DIRECTED THAT THE COMBINED AREA HAS TO BE TESTE D ON THE BASIS OF THE DEFINITION AVAILABLE IN PMC RULES. IF THE CLAI M OF THE ASSESSEE IS CORRECT THAT THE BUILT UP AREA OF COMBINED FLATS AS PER THE DEFINITION AVAILABLE IN PMC RULES, IS LESS THAN 1500 SQ.FT. TH AN IT WILL NOT BE CORRECT TO HOLD THAT CLAUSE (C) IS VIOLATED. FROM THE REPORT OF THE VALUER QUOTED IN THE ASSESSMENT ORDER, WHEREIN THE CALCULATION OF BUILDING B HAS BEEN GIVEN, THE CLAIM OF THE ASSES SEE PRIMA FACIE LOOKS CORRECT. HOWEVER, SINCE THIS ASPECT WAS APP ARENTLY NOT EXAMINED BY THE ASSESSING OFFICER, THE ASSESSING OF FICER WAS DIRECTED TO VERIFY THIS CLAIM AND IF IT IS FOUND THAT THE AREA OF THE COMBINED FLATS IS LESS THAN 1500 SQ.FT. AS PER THE DEFINITION OF BUILT UP AREA AVAILABLE IN THE PMC RULES, CLAUSE (C) HAS TO BE TREATED AS COMPLIED. HOWEVER FROM THE MATERIALS AVAILABLE ON R ECORDS ONE RESIDENTIAL UNIT WHICH HAS BEEN REPORTED TO BE A DUPLEX MADE OUT OF THREE FLATS CAN STILL BE IN EXCESS OF 1500 SQ.FT. THE AO WAS ALSO DIRECTED TO VERIFY THIS ASPECT AND ARRIVE AT THE CONCLUSION WHETHER THE HOUSING | PROJECT DEVELOPED IN PLOT NO.64 IS COMPLYING TO 18 THE CLAUSE (C) OR NOT. THUS, THIS GROUND WAS STATIS TICALLY ALLOWED BY CIT(A). THIS REASONED DIRECTIONS OF CIT(A) NEED NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 7.9 WITHOUT PREJUDICE TO THE ASSESSEES CLAIM THA T EVEN IF CERTAIN FLATS WERE IN EXCESS OF CLAUSE (C) I.E. OF THE AREA OF 1500 SQ.FT., THE AO OUGHT TO HAVE GRANTED PRORATA DEDUCTION U/S, 80IB(1 0) IN RESPECT OF RESIDENTIAL UNITS WHICH ARE COMPLYING TO CLAUSE (C) . THE ASSESSING OFFICER HAS NOT ALLOWED THIS CLAIM. THE DEDUCTION HAS BEEN ALLOWED ON PRORATA BASIS BY CIT(A) BY FOLLOWING THE DECISIO N OF ITAT PUNE IN THE CASE OF M/S TUSHAR DEVELOPERS VS. ITO, WD.5(3). IN THE PRESENT CASE, IT IS TO BE NOTED THAT THE HOUSING PROJECT DE VELOPED BY THE ASSESSEE IN PLOT NO.64 COMPRISING OF 101 FIATS AS P ER PLANS IN BUILDINGS 'A', 'B' & 'C', NO DISPUTE EXISTS IN RESP ECT OF COMPLIANCE OF CLAUSE (C) IN BUILDINGS 'A' & 'C'. , IN RESPECT OF BUILDING B' ALSO APPARENTLY IF THE CLAIM OF THE ASSESSEE IS FOUND TO BE CORRECT BY THE ASSESSING OFFICER AS DISCUSSED ABOVE THAT EVEN THE COMBINED FLATS ARE OF THE AREA OF LESS THAN 1500 SQ.FT. AS PER THE DEFINITION OF BUILT UP AREA TO BE APPLIED IN THIS YEAR I.E. AS PER THE RULES OF THE PMC, THEN MOST OF THE UNITS WILL BE FOUND TO BE ELIGIBLE FOR DEDUCTION. WITHOUT PREJUDICE TO THE ABOVE, THE ASSESSEE WILL H AVE TO BE ALLOWED THE PROPORTIONATE DEDUCTION IN RESPECT OF UNITS WHI CH ARE COMPLYING TO CLAUSE (C). ACCORDINGLY, THE ASSESSING OFFICER WAS RIGHTLY DIRECTED. SO, ISSUES IN ITA NO.127/PN/2013 ARE SIMILAR OF ISS UES IN ITA NO.126/PN/2013 WHICH ARE ALSO DECIDED ACCORDINGLY. IN RESULT, BOTH THE REVENUES APPEALS ARE DISMISSED. 8. THE CROSS OBJECTION NO.07/PN/2014 FILED BY THE A SSESSEE WAS NOT PRESSED ON BEHALF OF ASSESSEE, SO SAME IS DISMI SSED AS NOT PRESSED. 9. IN RESULT, THE REVENUES APPEALS AS WELL AS CROS S OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. 19 PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF FEBRUARY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 28 TH FEBRUARY, 2014 GCVSR COPY TO:- 1. DEPARTMENT 2. ASSESSEE 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE DR, A BENCH, I.T.A.T., PUNE. 6. GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE