Hemraj s. Mundada, Pune V. Addl. CIT, Pune

ITA 1328/PUN/2009

• Counselvise Citation: 132824514 RSA 2009
• Duration Of Justice: 4 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-12-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 24-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Competent authority
• Section: 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.NO.1328/PN/2009 (ASSESSMENT YEAR 2006-07) HEMRAJ S. MUNDADA, 16/1, PARVATI CHAMBERS, KARVE ROAD, PUNE 411038 PAN NO.AAXPM1636D .. APPELLANT VS. ADDL.CIT, RANGE-3, PUNE .. RESPONDENT ASSESSEE BY : SHRI SUNIL PATHAK REVENUE BY : SHRI P.L. PATHADE DATE OF HEARING : 05-12-2013 DATE OF PRONOUNCEMENT : 03-02-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 22-09-2009 OF THE CIT(A)-II, PUNE RELATING TO ASSES SMENT YEAR 2006-07. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS/PROMOTERS AND D EVELOPERS. IT FILED ITS RETURN OF INCOME ON 30-10-2007 DECLARING TOTAL INCOME OF RS.1,23,11,186/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE DURING THE YEAR HAS SHOWN S ALES FROM 2 PROJECTS LEELA GARDEN AND HILL VIEW RESIDENCY THE INCOME FROM WHICH HAS BEEN CLAIMED AS DEDUCTION U/S.80IB(10). HE HAS ALSO SHOWN SALES FROM 3 PROJECTS NAMELY, ANANDVAN, GULMOHAR AND VRINDAVAN C OMMERCIAL COMPLEX, THE PROFIT FROM WHICH HAS BEEN OFFERED TO TAX. THE AO EXAMINED THE VARIOUS DETAILS FURNISHED BY THE ASSES SEE FROM TIME TO TIME DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE OB SERVED THAT THE 2 2 PROJECTS LEELA GARDEN AND HILL VIEW RESIDENCY A RE NOT QUALIFIED FOR DEDUCTION U/S.80IB(10) FOR THE REASONS THAT THE COM PLETION CERTIFICATES ARE NOT AVAILABLE AND THAT SOME RESIDENTIAL UNITS IN L EELA GARDEN ARE OVER 1500 SQ.FT. HE REFERRED BOTH THE PROJECTS TO THE R EGISTERED VALUER WHO REPORTED THAT OUT OF THE TOTAL 81 FLATS IN LEELA G ARDEN 25 FLATS ARE HAVING AREA OF MORE THAN 1500 SQ.FT. AND FINAL COMP LETION CERTIFICATE HAS NOT BEEN ISSUED. IN RESPECT OF HILL VIEW RESIDENC Y HE REPORTED THAT ALTHOUGH THE FLATS ARE LESS THAN 1500 SQ.FT. , HOWE VER, ONLY PART COMPLETION CERTIFICATE HAS BEEN OBTAINED AND COMPLE TION CERTIFICATES OF BUILDINGS D AND E ARE NOT OBTAINED. 2.1 IN VIEW OF THE ABOVE THE AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE DEDUCTION U/S.80IB(10) CLAIMED BY THE ASSES SEE ON THE PROFIT OF THE ABOVE 2 PROJECTS SHOULD NOT BE DISALLOWED. THE ASSESSEE SUBMITTED THAT THE PROJECT LEELA GARDEN FULFILS BOTH THE CR ITERIA REGARDING THE COMMENCEMENT AND COMPLETION BECAUSE THE PART COMPLE TION CERTIFICATE ISSUED BY THE PMC IS PRACTICALLY NOT PART COMPLETIO N BUT FULL COMPLETION. AS REGARDS THE OBJECTION ON THE GROUND THAT SOME OF THE FLATS IN THE PROJECTS ARE HAVING AREA OF MORE THAN 1500 SQ.FT., THE ASSESSEE REFERRED TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF BAJAJ TEMPO VS. CIT REPORTED IN 196 ITR 188 (SC) ACCORDING TO W HICH THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTING THE GROWT H AND DEVELOPMENT SHOULD BE CONSIDERED LIBERALLY SO AS TO HELP THE GR OWTH AND DEVELOPMENT AND THEREFORE THE PROPOSED DISALLOWANCE OF THE CLAI M U/S.80IB(10) AMOUNTING TO RS.4,90,97,649/- SHOULD BE DROPPED. A S REGARDS THE PROJECT HILL VIEW RESIDENCY IS CONCERNED IT WAS ARGUED TH AT THE FINAL COMPLETION CERTIFICATE IN RESPECT OF BUILDINGS D AN D E IS NOT ISSUED. 3 RELYING ON VARIOUS DECISIONS IT WAS SUBMITTED THAT PROPORTIONATE ALLOWANCE OF DEDUCTION SHOULD BE ALLOWED TO THE ASS ESSEE ON THE PROJECTS WHICH ARE COMPLETED AND FOR WHICH COMPLETION CERTIF ICATE HAS BEEN ISSUED BY COMPETENT AUTHORITY. 3. HOWEVER, THE AO WAS NOT FULLY SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE NOTED THAT THE CLAIM OF THE ASSESSEE REGARDING COMPLETION IN RESPECT OF PROJECT LEELA GARDEN IS ACCEPTED BECAUSE THE PMC VIDE ITS LETTER DATED 19-12-2008 HAS CLARIFIED THAT THE PROJECT IS COMPLETE AND THE PART COMPLETION CERTIFICATE ISSUED ON 12-05-2006 SHOULD BE TREATED AS FINAL COMPLETION CERTIFICATE. HOWEVE R, AS REGARDS THE CLAIM OF THE ASSESSEE FOR GIVING PROPORTIONATE ALLOWANCE OF THE DEDUCTION, THE AO NOTED THAT THERE IS NO SUCH PROVISION IN THE INC OME TAX ACT, 1961 WHICH ALLOWS PROPORTIONATE DEDUCTION. ACCORDING TO HER, FOR CLAIMING DEDUCTION U/S. 80IB(10), THE PROJECT SHOULD SATISFY ALL THE CONDITIONS CUMULATIVELY. 3.1 AS REGARDS THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO (SUPRA) RELIED ON BY THE ASSESSEE SH E NOTED THAT IT IS TRUE THAT A LIBERAL VIEW HAS TO BE TAKEN IN CONSTRUING T HE PROVISIONS OF THE ACT WHICH ARE BENEFICIAL TO THE ASSESSEE BUT LIBERAL VI EW DOES NOT MEAN GOING AGAINST THE SPIRIT OR INTENT OF THE LAW. SINCE THE ASSESSEE HAS NOT FULFILLED ALL THE CONDITIONS PRESCRIBED U/S.80IB(10) IN RESPE CT OF LEELA GARDEN THE AO DISALLOWED THE CLAIM OF DEDUCTION OF RS.4,90 ,97,647/- CLAIMED U/S.80IB(10). 4 3.2 AS REGARDS THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT HILL VIEW RESIDENCY IS CONCERNED, THE AO NOTED THAT THE ASSESSEE HIMSELF HAS ADMITTED THAT THE FINAL COMPLE TION CERTIFICATE IN RESPECT OF BUILDINGS D AND E HAS NOT BEEN ISSUED. REJECTING THE CLAIM OF PROPORTIONATE DEDUCTION FOR THE PART OF THE PROJECT FOR WHICH PART COMPLETION CERTIFICATE HAS BEEN ISSUED AND HOLDING THAT THERE IS NO PROVISION OF PROPORTIONATE ALLOWANCE IN THE ACT, TH E AO DISALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) AMOUNTING TO RS.81, 71,409/- IN RESPECT OF THE PROJECT HILL VIEW RESIDENCY. IN APPEAL TH E LD.CIT(A) UPHELD THE ACTION OF THE AO. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, TH E LD.CIT(A)-II, PUNE, HAS ERRED IN CONFIRMING THE ADDITION OF RS.4,90 ,97,647/- MADE BY THE LD. ADDL.CIT, RANGE-3, PUNE, DISALLOWING THE CLA IM OF DEDUCTION MADE BY THE ASSESSEE U/S.80IB(10) OF INCOME TAX ACT, 1961 ON THE GROUND THAT THE ENTIRE PROJECT OF LEELA GARDEN IS NOT ELIGIBLE F OR DEDUCTION U/S.80IB(10) AS SOME OF THE FLOATS HAVING BUILT UP AREA MORE THAN 1500 SFT. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A)-II, PUNE, HAS ERRED IN CONFIRMING THE ADDITION OF RS.71,7 1,409/- MADE BY THE LD. ADDL.CIT, RANGE-3, PUNE, DISALLOWING THE CLAIM O F DEDUCTION MADE BY THE ASSESSEE U/S.80IB(10) OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT THE ENTIRE PROJECT OF HILL VIEW RESIDENCY IS NOT COMP LETED IN THE YEAR UNDER APPEAL. IT IS, THEREFORE, CONSIDERING THE INTENT OF INCENTIVE PROVISIONS OF LAW, HUMBLY PRAYED THAT THE ADDITION OF RS.81,71,409/- BE DELETED AND CLAIM OF DEDUCTION U/S.80IB(10) BE ALLOWED IN FULL AS THE P ROFIT HAS BEEN MADE OUT ON COMPLETION CONTRACT METHOD WHICH IS FOLLOWE D CONSISTENTLY BY THE ASSESSEE 5. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OPPOSE D THE ORDER OF THE CIT(A). REFERRING TO PAGE 6 OF THE PAPER BOOK HE S UBMITTED THAT OUT OF THE TOTAL 83 FLATS IN THE PROJECT LEELA GARDEN 61 FLATS ARE HAVING AREA LESS THAN 1500 SQ.FT. AND ONLY 22 FLATS ARE HAVING AREA OF MORE THAN 1500 5 SQ.FT. REFERRING TO PAGE 21 & 22 OF THE PAPER BOOK HE SUBMITTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION ONLY IN RESPECT OF T HOSE FLATS WHOSE BUILT UP AREA WAS LESS THAN 1500 SQ.FT. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. RAHUL CON STRUCTION CO. VS. ITO VIDE ITA NO.1250/PN/2009 AND ITA NO.707/PN/2010 ORDER DATED 30-03-2012 FOR A.Y. 2006-07 AND 2007-08 AND THE DEC ISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MUDHIT MADANLAL GUPTA VS. ACIT REPORTED IN 51 DTR 217 HE SUBMITTED THAT ASSES SEE IS ENTITLED TO PROPORTIONATE DEDUCTION. HE SUBMITTED THAT FOLLOWI NG THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF BENGAL A MBUJA HOUSING DEVELOPMENT AND VARIOUS OTHER DECISIONS THE COORDIN ATE BENCHES OF THE TRIBUNAL ARE ALLOWING PROPORTIONATE DEDUCTION TO TH E ASSESSEES. HE ACCORDINGLY SUBMITTED THAT FOR THE PROJECT LEELA G ARDEN PROPORTIONATE DEDUCTION SHOULD BE ALLOWED TO THE ASSESSEE IN RESP ECT OF 61 FLATS. 5.1 SO FAR AS THE CLAIM OF DEDUCTION IN RESPECT OF PROJECT HILL VIEW RESIDENCY IS CONCERNED HE REFERRED TO PAGE 2 OF TH E PAPER BOOK AND SUBMITTED THAT THE SAID PROJECT WAS COMMENCED ON 24 -04-2002. REFERRING TO PAGE 1 OF THE PAPER BOOK HE SUBMITTED THAT THE TOTAL AREA OF THE PROJECT HILL VIEW RESIDENCY AT VARJE IS 6858. 96 SQ.MTRS. HE SUBMITTED THAT OUT OF THE TOTAL 5 BUILDINGS, I.E. A TO E, HE SUBMITTED THAT BUILDINGS A, B, C, AND E ARE COMPLETED BEFORE 31-03 -2008 AND BUILDING D IS NOT COMPLETE BEFORE 31-03-2008. HE SUBMITTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S.80IB(10) IN RESPECT OF PROFIT S FROM BUILDINGS A, B, C AND E. REFERRING TO PAGE 4 OF THE PAPER BOOK HE SUBMITTED THAT COMPLETION CERTIFICATE FOR BUILDINGS A, B AND C HAS BEEN OBTAINED ON 13- 01-2005. REFERRING TO PAGE 5 OF THE PAPER BOOK HE SUBMITTED THAT 6 COMPLETION CERTIFICATE IN RESPECT OF BUILDING E HAS BEEN OBTAINED ON 07- 11-2007. HE SUBMITTED THAT THE ASSESSEE HAS OBTAIN ED COMPLETION CERTIFICATE FOR BUILDING D ON 23-07-2008. HE SUBMI TTED THAT DURING THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE HAD COMPLETED BUILDINGS A, B, C AND E AND HAD PROFITS RECEIVED ONLY FROM BUILDINGS A, B AND C. FURTHER, THE TOTAL BUILT UP AREA OF BUILDINGS A, B, C AND E ARE 5102.83 SQ. MTRS. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF RUNWAL MULTIHOUSING VIDE ITA NOS. 1015 TO 1017/PN/2 011 ORDER DATED 27-11-2012 FOR A.YRS. 2003-04 TO 2005-06, DECISION IN THE CASE OF M/S. RAHUL CONSTRUCTION CO. VS. ITO VIDE ITA NO.1250/PN/ 2009 AND ITA NO.707/PN/2010 ORDER DATED 30-03-2012 FOR A.Y. 2006 -07 AND 2007-08 AND THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNA L IN THE CASE OF MUDHIT MADANLAL GUPTA REPORTED IN 51 DTR 217 HE SUB MITTED THAT DEDUCTION U/S.80IB(10) SHOULD BE ALLOWED IN RESPECT OF 4 BUILDINGS. REFERRING TO THE DECISION OF HONBLE BOMBAY HIGH CO URT IN THE CASE OF VANDANA PROPERTIES VIDE ITA NO.3633/PN/2009 AND ITA NO.4361/PN/2010 ORDER DATED 28-03-2012, (A COPY OF WHICH IS PLACED AT PAPER BOOK AT PAGES 64 TO 79) HE SUBMITTED THAT IN VIEW OF THE RATIO OF DECISION OF THE JURISDICTIONAL HIGH COURT, THE ASSE SSEE IS ENTITLED TO DEDUCTION U/S.80IB(10) IN RESPECT OF THE BUILDINGS, A, B, C AND E FOR WHICH THE COMPLETION CERTIFICATE HAS BEEN OBTAINED BY THE ASSESSEE BEFORE 31-03-2008. 5.2 THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE FOLLOWING DECISIONS : 1. DCIT VS. BRIGADE ENTERPRISES (P) LTD. REPORTED IN 119 TTJ 269 (BANG). 2. DCIT VS. ADITYA DEVELOPERS ITA NO.791& 792/P N/2008 ORDER DATED 30-01-2012. 7 3. CIT VS. VANDANA PROPERTIES IN ITA NO.3633/2009 AND ITA NO.4361/2010 ORDER DATED 28-03-2012. 4. BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VS. DCIT ITA NO.1595/KOL/05 ORDER DATED 24-03-2006. 5. MAGARPATTA TOWNSHIP DEVELOPMENT & CONSTRUCTION CO. VS. DCIT- ITA NO.822/PN/2011 AND ITA NO.04/PN/2012 ORDER DATE D 18-09-2012. 6. CIT VS. ARUN EXCELLO FOUNDATIONS PVT. LTD. REPO RTED IN 212 TAXMAN 342 (MADRAS). 7. SURESH L. WADHWA (HUF)- ITA NO.4743/MUM/2009 OR DER DATED 31- 12- 2012. 8. SIDDHIVINAYAK KOHINOOR VENTURE VS. ADDL. CIT-IT A NOS.1112 & 1527/PN/2011 ORDER DATED 31-10-2013. 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT IN THE CASE OF LEELA GARDEN PROJECT OUT OF 83 FLATS ONLY 61 FLATS CONFO RMED TO THE AREA PRESCRIBED U/S.80IB(10), I.E. LESS THAN 1500 SQ.FT. WHEREAS IN CASE OF 22 FLATS THE AREA IS MORE THAN 1500 SQ.FT. SIMILARLY, IN THE CASE OF THE PROJECT HILL VIEW RESIDENCY THE ASSESSEE HAS NOT RECEIVED THE COMPLETION CERTIFICATE IN RESPECT OF BUILDINGS D AND E BEFORE THE STATUTORY DATE OF 31- 03-2008. HE SUBMITTED THAT THE ACT DOES NOT ALLOW F OR PROPORTIONATE DISALLOWANCE AND FOR OBTAINING THE BENEFIT OF DEDUC TION U/S.80IB(10) THE ASSESSEE HAS TO FULFIL ALL THE CONDITIONS CUMULATIV ELY. HE SUBMITTED THAT THE VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. SINCE THE ASSESSEE HAS NOT FULFILLED ALL THE CONDITIONS P RESCRIBED U/S.80IB(10) FOR BOTH THE PROJECTS, THEREFORE, HE SUBMITTED THAT THE ORDER OF THE LD.CIT(A) BEING IN CONSONANCE WITH THE STATUTORY PR OVISIONS OF SECTION 80IB(10), THE SAME SHOULD BE UPHELD. 7. WE HAVE CONSIDERED RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE 8 ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) IN THE PROJECTS LEELA GARDEN AND HILL VIEW RESIDENCY O N THE GROUND THAT THE ASSESSEE HAS NOT FULFILLED ALL THE CONDITIONS P RESCRIBED U/S.80IB(10). 7.1 SO FAR AS THE DENIAL OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE HOUSING PROJECT LEELA GARDEN IS CONCERNED, WE FIN D THE ASSESSEE HAS OBTAINED THE COMPLETION CERTIFICATE BEFORE THE STAT UTORY DUE DATE AND THE GRIEVANCE OF THE REVENUE IS THAT OUT OF 83 FLATS ON LY 61 FLATS CONFORM TO THE AREA OF LESS THAN 1500 SQ.FT. AND IN CASE OF 2 2 FLATS THE AREA EXCEEDS 1500 SQ.FT. IT IS THE CASE OF THE ASSESSEE THAT HE HAS CLAIMED PROPORTIONATE DEDUCTION IN RESPECT OF 61 FLATS ONLY AND HAS NOT C LAIMED DEDUCTION U/S.80IB(10) IN RESPECT OF THE 22 FLATS WHERE THE A REA OF EACH FLAT EXCEEDS 1500 SQ.FT. IT IS THE CASE OF THE REVENUE THAT THE RE IS NO SUCH CASE FOR PROPORTIONATE DEDUCTION U/S.80IB(10) AND EACH FLAT IN THE PROJECT SHOULD BE LESS THAN 1500 SQ.FT. THE AREA OF PROPORTIONATE DEDUCTION U/S.80IB(10) WHERE SOME OF THE FLATS EXCEED THE PRESCRIBED LIMIT OF 1500 SQ.FT. HAS BEEN FAVOURABLY DECIDED BY THE TRIBUNAL IN VARIOUS CASES FOLLOWING THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. WE FIND THE KOLKATA BENCH OF THE TRIBUNAL IN THE AFORESAID CASE VIDE ITA NO.1295/KOL /05 ORDER DATED 24- 03-2006 FOR THE A.Y. 2002-03 HAS ALLOWED THE CLAIM OF PRO-RATA DEDUCTION U/S.80IB(10) IN RESPECT OF UNITS HAVING I NDIVIDUAL AREA OF LESS THAN 1500 SQ.FT. WHEN THE REVENUE CHALLENGED THE O RDER OF THE TRIBUNAL THE HONBLE HIGH COURT CONFIRMED THE ORDER OF THE T RIBUNAL VIDE ITS ORDER DATED 05-01-2007 AND THE APPEAL FILED BY THE REVENU E HAS BEEN DISMISSED. 9 7.2 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF D.S. KULKARNI DEVELOPERS LTD. AND VARIOUS OTHER CASES HA S UPHELD SIMILAR PROPOSITION FOLLOWING THE AFORESAID PRECEDENTS. TH E COORDINATE BENCHES OF THE TRIBUNAL ARE CONSISTENTLY TAKING THE VIEW TH AT DEDUCTION U/S.80IB(10) HAS TO BE ALLOWED ON PROPORTIONATE BAS IS WITH REFERENCE TO THE QUALIFIED RESIDENTIAL UNITS AND THAT THE ASSESS EE WOULD NOT BE DENIED CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT, IN ENTI RETY, IF SOME OF ITS RESIDENTIAL UNITS WERE OF BUILT UP AREA EXCEEDING T HE LIMIT PRESCRIBED IN CLAUSE (C) TO SECTION 80IB(10) OF THE ACT. 7.3 SINCE IN THE INSTANT CASE THE ASSESSEE HAS OBTA INED THE COMPLETION CERTIFICATE BEFORE 31-03-2008 AND OUT OF THE 83 FLA TS THE ASSESSEE HAS CLAIMED DEDUCTION U/S.80IB(10) IN RESPECT OF 61 FLA TS WHERE THE BUILT UP AREA IS LESS THAN 1500 SQ.FT. AND HAS NOT CLAIMED T HE DEDUCTION U/S.80IB(10) IN RESPECT OF 22 FLATS WHERE THE BUILT UP AREA EXCEEDS 1500 SQ.FT., THEREFORE, FOLLOWING THE CONSISTENT VIEW OF THE COORDINATE BENCHES OF THE TRIBUNAL WE HOLD THAT THE ASSESSEE IS ENTITL ED TO DEDUCTION U/S.80IB(10) IN RESPECT OF THE 61 FLATS OF THE HOUS ING PROJECT LEELA GARDEN. 7.4 SO FAR AS THE DENIAL OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE HILL VIEW RESIDENCY IS CONCERNED WE FIND OUT OF T HE 5 BUILDINGS, I.E. A,B,C,D AND E, THE ASSESSEE HAS OBTAINED COMPLETION CERTIFICATE IN RESPECT OF BUILDINGS A, B, C AND E BEFORE 31-03-200 8. THUS, OUT OF THE 5 BUILDINGS, THE ASSESSEE WAS ABLE TO OBTAIN COMPLETI ON CERTIFICATES FOR 4 BUILDINGS AND THEREFORE IT IS THE CASE OF THE ASSES SEE THAT THE DEDUCTION U/S.80IB(10) SHOULD BE ALLOWED IN RESPECT OF THE 4 BUILDINGS. IT IS THE 10 CASE OF THE REVENUE THAT SINCE THE COMPLETION CERTI FICATE FOR BUILDING D HAS NOT BEEN OBTAINED BEFORE 31-03-2008, THEREFORE, DEDUCTION U/S.80IB(10) SHOULD NOT BE ALLOWED. 7.5 WE FIND THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF RUNWAL MULTIHOUSING PVT. LTD., (SUPRA) HAS OBSERVED AS UNDER : 21. SO FAR AS THE SECOND GRIEVANCE OF THE REVENUE TH AT BUILDING NOS. B AND F ARE NOT CONSTRUCTED AND THEREFORE THE PROJECT HAS NOT BEEN COMPLETED AS PER THE APPROVED PLAN, WE FIND THE BUIL DINGS A, C, D, E AND THE 17 ROW HOUSES ARE CONSTRUCTED ON A PLOT AREA OF M ORE THAN 1 ACRE, NONE OF THE FLATS/ROW HOUSES IS BEYOND 1500 SQ.FT. AND T HE COMPLETION THEREOF HAS BEEN OVER BEFORE 31-03-2008 IN VIEW OF O UR FINDINGS ABOVE. 21.1 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. RAHUL CONSTRUCTION CO. VS. ITO - ITA NO.1250/PN/2009 AND IT A NO.707/PN/2010 ORDER DATED 30-03-2012 HAS HELD AS UND ER : 8. CONSIDERING THE ABOVE SUBMISSION, AND HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON, WE FIND THAT TH E ISSUE INVOLVED IS AS TO WHETHER THE ASSESSEE HAD COMPLETED THE HOUSING PROJECT WITHIN THE PRESCRIBED TIME LIMIT SINCE THE DA TE OF FIRST APPROVAL OF THE PROJECT BY THE PMC. 9. TO DECIDE THE ABOVE ISSUE, IT IS NECESSARY TO DECID E FIRSTLY AS TO WHAT WOULD BE FIRST DATE OF APPROVAL OF THE HOU SING PROJECT BY THE PMC TO COMPUTE THE TIME LIMIT PRESCRIBED FOR COMPLETION OF THE PROJECT TO TAKE BENEFIT OF DEDUCTION U/S. 80 IB (10) OF THE ACT. THERE IS NO DISPUTE ON SOME MATERIAL FACTS THAT OUT OF 16 BUILDINGS IN THE HOUSING PROJECT OF THE ASSESSEE ONLY 11 BUILDINGS WERE COMPLETED WITHIN THE PRESCRIBED TIME LIMIT UPTO 31 ST MARCH 2008. THE LAY OUT PLAN IN RESPECT OF ENTIRE COMPLEX WAS SAN CTIONED BY PMC VIDE ORDER NO. DPO/45/D/646 DATED 3.4.2003 AND THE BUILDING PLAN WAS SANCTIONED VIDE COMMENCEMENT CERT IFICATE NO. 4269 DT. 29.4.2003. ADMITTEDLY, THE TERM HOUSING PROJECT HAS NOT BEEN DEFINED IN THE INCOME TAX ACT BUT IN THE C ONTEXT OF DEDUCTION U/S. 80IB(10) AN EXPLANATION HAS BEEN PROVI DED BELOW CLAUSE (A) TO SUB-SECTION (10) TO SECTION 80 IB. FOR A READY REFERENCE, THE SAID EXPLANATION IS BEING REPRODUCED H EREUNDER : (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PR OJECT 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. (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION 11 CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS I SSUED BY THE LOCAL AUTHORITY. THE VERY READING OF ABOVE EXPLANATION (I), IT MAKES CLEAR THAT FOR THE ELIGIBILITY OF THE DEDUCTION PROVIDED U/S. 80 I B (10) OF THE ACT, THE DATE ON WHICH BUILDING PLAN OF SUCH HOUSING PROJE CT HAS BEEN FIRSTLY APPROVED BY THE LOCAL AUTHORITY WILL BE TREA TED AS APPROVAL IN RESPECT OF THE HOUSING PROJECT. WHEN WE READ EXPL ANATION (II) WITH EXPLANATION (I) IT MAKES CLEAR THAT COMPLETION OF CONSTRUCTION OF SUCH BUILDING PLAN FIRST APPROVED BY THE LOCAL AUT HORITY WILL BE TAKEN THE DATE OF COMPLETION OF CONSTRUCTION OF SUCH BUILDING PLAN WHEN COMPLETION CERTIFICATE HAS BEEN ISSUED BY THE LO CAL AUTHORITY. IN OTHER WORDS, IN CLAUSE (I) OF THE EXPL ANATION, IT HAS BEEN MADE CLEAR THAT WOULD BE THE HOUSING PROJECT, FIRST APPROVAL OF WHICH, BY THE LOCAL AUTHORITY WOULD BE TAKEN AS ST ARTING POINT OF THE HOUSING PROJECT AND IN CLAUSE NO. (II), IT HAS BE EN MADE CLEAR THAT WHAT WOULD BE THE COMPLETION CERTIFICATE IN RE SPECT OF SUCH HOUSING PROJECT ISSUED BY LOCAL AUTHORITY TO COMPUTE T HE PRESCRIBED TIME LIMIT FOR VERIFICATION OF ELIGIBILIT Y OF ASSESSEE FOR THE CLAIMED DEDUCTION. IN VIEW OF THE ABOVE EXPLA NATION, WE FIND SUBSTANCE IN THE CONTENTION OF THE LD. A.R. THAT AP PROVAL OF THE HOUSING PROJECT AND APPROVAL OF BUILDING PLAN ARE T WO DIFFERENT CONCEPTS. THE BANGALORE BENCH OF THE TRIBUNAL IN T HE CASE OF DCIT VS. BRIGADE ENTERPRISES (P) LTD. (SUPRA) HAS HELD THAT PLAN FOR DEVELOPMENT IS ONLY A WORK ORDER AND NOT FINAL PLAN SANCTIONED BY THE LOCAL AUTHORITY. FOR ANY PROJECT, THERE COU LD NOT HAVE BEEN A PLAN WITHOUT SUBMISSION OF THE DETAILED BUILDING PLAN S, BY THE ARCHITECT AND WHAT REQUISITE DETAILS REQUIRED TO BE SUBMITTED FOR APPROVAL OF THE BUILDING PLANS BY THE LOCAL AUTHORIT Y. IN THE CASE OF SAROJ SALES ORGANIZATION VS. ITO (SUPRA), BEFORE MUMB AI BENCH, ALMOST SIMILAR FACTS AS BEFORE US WERE THERE. THE COMME NCEMENT CERTIFICATE IN RESPECT OF SIX WINGS IN BLOCK N WAS SEPARATELY RECEIVED BY THE ASSESSEE AND ALL THE FLATS IN BLOCK WE RE LESS THAN 1000 SQ.FT. IT WAS HELD BY THE TRIBUNAL THAT IT IS NOT UPON TO THE REVENUE TO INCLUDE BLOCK BC AS PART OF BLOCK N JUST TO DENY RELIEF TO THE ASSESSEE U/S. 80 IB(10). THE TRIBUNAL OBSERVED T HAT BLOCK BC WAS MEANT FOR HIGHER STRATA OF THE SOCIETY HAD B EEN KEPT SEPARATELY BY ASSESSEE IN ALL THE RESPECT, ASSESSEE HAD NO T CLAIMED RELIEF U/S. 80IB IN RESPECT OF BLOCK BC . IN THE CASE OF MUDHIT MADANLAL GUPTA VS. ACIT (SUPRA ) BEFORE THE MUMBAI B ENCH, IT HAS BEEN HELD THAT THE HOUSING PROJECT DOES NOT NECESSARIL Y HAVE TO BE VARIOUS GROUP OF BUILDINGS CONSTRUCTED ON THAT PA RTICULAR LAND, BUT IT CAN ALSO BE A PARTICULAR BUILDING OR ANY BUIL DING WHICH IS PART OF A LARGE PROJECT. IT HAS BEEN FURTHER HELD THAT WHATEVER PORTION OF THE HOUSING PROJECT IS OTHERWISE FOUND TO B E ELIGIBLE HAS TO BE CONSIDERED AS A HOUSING PROJECT FOR THE PURPO SE OF DEDUCTION U/S. 80 IB (10) OF THE ACT. SIMILAR VIEW HAS BEEN EXPRESSED BY MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF VANDANA PROPERTIES VS. ACIT (SUPRA). 12 10. IN VIEW OF ABOVE DISCUSSION, WE COME TO THE CONCLU SION THAT FOR VERIFICATION OF ELIGIBILITY OF BENEFIT CLA IMED U/S. 80 IB (10) OF THE ACT BY THE ASSESSEE ON BUILDINGS A1 TO A5 IN AT UL NAGAR AND BUILDINGS B1 TO B6 IN RAHUL NISARG CO-OPERATIVE HOUSING SOCIETY LTD., THE ASSESSING AUTHORITY HAS TO VERIFY AS TO WHEN THE BUILDING PLANS FOR THESE BUILDINGS WERE FIRSTLY APPROV ED BY THE LOCAL AUTHORITY AND TAKING THE SAID DATE OF APPROVA L A STARTING POINT, HE HAS TO VERIFY AS TO WHETHER THESE BUILDINGS WERE COMPLETED WITHIN THE PRESCRIBED TIME LIMIT I.E. 31 ST MARCH 2008 ON THE BASIS OF THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT ISSUED BY THE PMC. WHEN WE EXAMINE THE FACT S OF THE PRESENT CASE UNDER THE ABOVE BACKGROUND, WE FIND THA T THE AUTHORITIES BELOW HAVE NOT DISPUTED THE FACT FURNISHED IN THIS REGARD BY THE ASSESSEE THAT UNDER THE PROJECT ATUL NA GAR CONSISTING OF BUILDINGS A1 TO A5, THE FIRST BUILDING PL AN FOR A TYPE WAS APPROVED BY THE PMC ON 29.4.2003 VIDE COMMENCEME NT CERTIFICATE NO. 4269 (PAGE NO. 4 OF THE PAPER BOOK) . HOWEVER, ACTUAL CONSTRUCTION OF A TYPE BUILDING WAS EXECUTED A S 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 TY PE BUILDING I.E. A1 TO A6 HAVE BEEN CONSTRUCTED IS 1,39,466 SQ.FT. TH E PROJECT A TYPE BUILDING I.E. A1 TO A5 CONSISTS OF 360 RESIDENTIAL UNITS AND THE CONSTRUCTION HAS BEEN COMPLETED BETWEEN 10.1.2005 TO 31.8.2005 (PAGE NOS. 6 TO 9 OF PAPER BOOK). THE AUTHORITIES BE LOW HAVE ALSO NOT DISPUTED THIS MATERIAL FACT THAT RESIDENTIAL UNITS HAS A MAXIMUM BUILT UP AREA OF 1500 SQ.FT. LIKEWISE, THESE MATERIAL FACTS THAT B GROUP BUILDINGS IN RAHUL NISARG CO-OPERA TIVE HOUSING 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 FIR ST BUILDING PLAN WAS SANCTIONED ON 29.4.2003 VIDE COMMENCEMENT CERTIFICATE NO. 4269 ISSUED BY THE PMC (PAGE NO. 16 O F THE PAPER BOOK). THE OTHER MATERIAL FACTS LIKE ACTUAL CONSTRU CTION WAS EXECUTED AS PER THE REVISED PLAN SANCTION ON 20 TH MARCH 2004 VIDE CC NO. 2225 (PAGE NO. 17), THE PROJECT CONSISTS OF 3 96 FLATS AND CONSTRUCTION OF THESE FLATS HAVE BEEN COMPLETED ON 14. 7.2006 AS PER THE COMPLETION CERTIFICATE ISSUED BY THE PMC (PA GE NOS. 13 TO 18 OF PAPER BOOK) ARE NOT IN DISPUTE. THE AUTHORITI ES BELOW HAVE ALSO NOT DENIED THAT BUILT UP AREA OF EACH OF THESE F LATS DOES NOT EXCEED 1500 SQ.FT. IT IS ALSO NOT IN DISPUTE THAT BOTH THE PROJECTS ARE ENTIRELY A RESIDENTIAL PROJECT AND THERE IS NO C OMMERCIAL AREA THEREIN. UNDER THE ABOVE CIRCUMSTANCES, WE ARE OF TH E VIEW THAT THE ASSESSEE IS VERY MUCH ENTITLED TO THE CLAIMED DEDUCT ION U/S. 80 IB (10) OF THE ACT ON THE BUILDINGS A1 TO A5 IN ATUL NAGAR AND BUILDINGS B1 TO B6 IN RAHUL NISARG CO-OPERATIVE HOU SING SOCIETY LTD. THE ISSUE IS THEREFORE DECIDED IN FAVOUR OF THE ASSESSEE. WE THUS WHILE SETTING ASIDE THE ORDERS OF THE AUTHORITIES B ELOW ON THE ISSUE, DIRECT THE A.O TO ALLOW THE CLAIMED DEDUCTION U/S. 80 IB(10) IN QUESTION. THE RELATED GROUNDS ARE ACCORDINGLY ALL OWED. 21.2 WE FIND THAT BANGALORE BENCH OF THE ITAT IN TH E CASE OF DY.CIT VS. BRIGADE ENTERPRISES (P) LTD. [119 TTJ 269 (BANG.)] HA S OBSERVED AS UNDER: 13 DEDUCTION UNDER S.80IB INCOME FROM DEVELOPING AND BUILDING HOUSING PROJECT DIFFERENT UNITS OF A GROUP PROJEC T WHERE SOME OF THE RESIDENTIAL UNITS IN A BIGGER HOUSING PROJECT, TREATED INDEPENDENTLY, ARE ELIGIBLE FOR RELIEF UNDER S.80IB (10), RELIEF SHOULD BE GIVEN PRO RATA AND SHOULD NOT BE DENIED BY TREAT ING THE BIGGER PROJECT AS A SINGLE UNIT, MORE SO, WHEN ASSESSEE OB TAINED ALL SANCTIONS, PERMISSIONS AND CERTIFICATES FOR SUCH EL IGIBLE UNITS SEPARATELY ASSESSEE UNDERTOOK A DEVELOPMENT PROJE CT IN AN AREA OF 22 ACRES 19 GUNTAS CONSISTING OF 5 RESIDENTIAL BLOC KS, ROW HOUSES, OAK TREE PLACE, A CLUB, A COMMUNITY CENTRE, A SCHOO L AND A PARK AND CLAIMED DEDUCTION UNDER S. 80IB(10) IN RESPECT OF T WO RESIDENTIAL UNITS ONLY WHICH IF TAKEN SEPARATELY, WERE ELIGIBLE FOR THE RELIEF AO TREATED THE ENTIRE PROJECT AS A SINGLE UNIT AND DEN IED RELIEF UNDER S.80IB(10) IN ENTIRETY CIT(A) ALLOWED RELIEF UNDE R S. 80IB(10) TREATING THE SAID TWO UNITS AS INDEPENDENT UNITS JUSTIFIED MATERIAL ON RECORD SHOWED THAT THE VARIOUS LOCAL AU THORITIES DULY INSPECTED THE PLOT AND SANCTIONED PLAN FOR EACH OF THE BLOCKS SEPARATELY GROUP HOUSING APPROVAL WAS APPROVAL OF A MASTER PLAN AS A CONCEPT FURTHER, THE USE OF THE WORDS RESID ENTIAL UNITS IN CL.(C) OF S.80IB(10) MEANS THAT DEDUCTION SHOULD BE COMPUTED UNIT- WISE THEREFORE, IF A PARTICULAR UNIT SATISFIES TH E CONDITION OF S.80IB, THE ASSESSEE IS ENTITLED FOR DEDUCTION AND IT SHOUL D BE DENIED IN RESPECT OF THOSE UNITS ONLY WHICH DO NOT SATISFY TH E CONDITIONS AGAIN, THE ACCOUNTING PRINCIPLES WOULD ALSO MANDATE RECOGNITION OF PROFITS FROM EACH UNIT SEPARATELY. 21.3 IN VIEW OF THE ABOVE DECISIONS, WE ARE OF THE CO NSIDERED OPINION THAT WHATEVER PORTION COMPLETED BY THE ASSESSEE WHICH SATISFIES THE CONDITIONS PRESCRIBED U/S.80IB(10) IS ELIGIBLE FOR DEDU CTION. THE VARIOUS DECISIONS RELIED ON BY THE REVENUE ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. WE ACCORDINGLY HOLD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80IB(10) IN RESPECT OF BUI LDING NO. A,C,D, E AND THE 17 ROW HOUSES. THE GROUNDS RAISED BY THE ASSESSEE ON T HIS ISSUE ARE ACCORDINGLY ALLOWED. 22. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY -ALLOWED. 7.6 SIMILAR VIEW HAS BEEN TAKEN BY THE COORDINATE B ENCHES OF THE TRIBUNAL IN VARIOUS OTHER DECISIONS RELIED ON BY LD . COUNSEL FOR THE ASSESSEE. SINCE IN THE INSTANT CASE THE ASSESSEE H AS CLAIMED DEDUCTION U/S.80IB(10) IN RESPECT OF BUILDINGS A, B, C ON WHI CH PROFIT HAS BEEN EARNED ON SALE OF UNITS AND THE COMPLETION CERTIFIC ATE HAS BEEN OBTAINED BEFORE THE STATUTORY DATE AND NONE OF THE UNITS IN THE ABOVE BUILDING IS IN EXCESS 1500 SQ.FT., THEREFORE, FOLLOWING THE DECISI ON OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF RUNWAL MULTIHO USING PVT. LTD., (SUPRA) AND VARIOUS OTHER DECISIONS WE HOLD THAT TH E ASSESSEE IS ENTITLED 14 TO DEDUCTION U/S. 80IB(10) IN RESPECT OF BUILDINGS A, B AND C OF THE PROJECT HILL VIEW RESIDENCY. 7.7 IN VIEW OF THE ABOVE DISCUSSION, WE SET-ASIDE T HE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW TH E CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE HOUSING PROJECTS LE ELA GARDEN AND HILL VIEW RESIDENCY. THE GROUNDS RAISED BY THE ASSESSE E ARE ACCORDINGLY ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 03-02-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED 3 RD FEBRUARY 2014 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE 5. THE DR A BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE