VIDHI BUILDERS, MUMBAI V. ITO WD 3(2), MUMBAI

ITA 1449/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49471 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 08-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T T JACOB
• Assessee Lawyers: SATINDRA PANDEY
• Keywords: Non compliance
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI P.M. JAGTAP (AM) AND SMT. ASHA VIJAYARA GHAVAN (JM) ITA NO.1449/MUM/2010 ASSESSMENT YEAR- 2006-07 M/S. VIDHI BUILDERS, 3/11 NARMADA, LOKGRAM, NETIVALLI, KALYAN (E), PAN-AAEFV 6426P VS. THE ITO, WARD-3(2), KALYAN (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SATINDRA PANDEY RESPONDENT BY: SHRI T.T. JACOB O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 30.11.2009 PASSED BY THE LD. CIT(A)-1 FOR THE ASSESSMENT YEAR 2006-07. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION I.E. PROMOTION OF RE SIDENTIAL APARTMENTS. THE RETURN OF INCOME FOR A.Y. 2006-07 WAS FILED ON 20.10.2006 ADMITTING A TOTAL INCOME OF RS. 1,10,830/- AFTER CLAIMING DE DUCTION U/S. 80IB(10) OF RS. 40,15,735/-. AFTER SCRUTINIZING THE ACCOUNT S, THE AO DETERMINED THE INCOME AT RS. 41,26,560/- AFTER REJECTING THE C LAIM OF DEDUCTION U/S. 80IB(10). 3. THE ASSESSEE HAS UNDERTAKEN DEVELOPMENT OF TWO P ROJECTS VIZ. AMRUT DHAM AND VIDHI COMPLEX AT KALYAN. THE WEIP A T RS. 69.25 LACS AND RS. 1,94,60,000/- ARE SHOWIN RESPECT OF THESE P ROJECTS. THE ITA NO. 1449/M/2010 2 ASSESSEE PURCHASED DEVELOPMENT RIGHTS IN RESPECT OF TWO PROJECTS VIZ AMRIT DHAM AND VIDHI COMPLEX AND THE PROJECTS STAND AS PER PLANT ON 4918.68 SQ. MTR AND 3461.68 SQ. MTR RESPECTIVELY. THE ORIGINAL LARGER PLAN HAD BEEN APPROVED BY THE MUNICIPAL AUTHORITIES FOR CONSTRUCTION ON 18761.36 SQ. MTR OF RESIDENTIAL SPACE AND 778.94 SQ . MTR FOR COMMERCIAL AREA. THE ASSESSEE HAD ACQUIRED DEVELOPMENT RIGHTS IN RESPECT OF AMRIT DHAM COMPRISING OF TWO BUILDINGS NAMELY BLDG. NO. 9 & 10 AND VIDHI COMPLEX CONSISTING OF BLDG. NOS. 11 TO 14. 4. THE AO DURING THE ASSESSMENT PROCEEDINGS FOUND T HAT THE PROJECT AMRIT DHAM WAS HAVING A PLOT AREA OF 1456.92 SQ. MT R AND VIDHI COMPLEX 3461.98 SQ. MTRS. THE STATEMENT OF ONE OF THE PARTNERS AND THE ARCHITECT WERE RECORDED DURING THE ASSESSMENT PROCE EDINGS. IN RESPECT OF A.Y.2005-06 SHRI DILIP PATEL, ONE OF THE PARTNER S, ADMITTED TO THE FACTS OF THE PLAN HAVING BEEN APPROVED AS COMMERCIAL CUM RESIDENTIAL PROJECT. SHRI R.G. MODAK, THE ARCHITECT ADMITTED THE PROJECT VIDHI COMPLEX TO HAVE BEEN BUILT UP ON A NET PLOT AREA OF 3461.68 SQ . MTR, AFTER THE SPACE FOR DP ROAD IS REDUCED. 5. THE AO DISALLOWED THE CLAIM OF DEDUCTION U/S. 80 IB(10) FOR THE FOLLOWING REASON: 1) THE ASSESSEE HAS NOT FULFILLED ONE OF THE CONDITION S LAID DOWN IN SEC. 80IB(10), CLAUSE (B) I.E. THE PLOT AREA STAND AT 3461.68 SQ. MTRS. WHICH IS LESS THAN 1 ACRE. 2) THE LOCAL AUTHORITY, IN THE COMPLETION CERTIFICATE, CERTIFIED THE PROJECT TO HAVE COMPLETED PARTLY AS ON 31.3.2008. 3) THE ORIGINAL PLAN APPROVED TO M/S. JAYASHREE BUILDE RS WAS APPROVED TO BE A COMMERCIAL-CUM-RESIDENTIAL PROJECT . ITA NO. 1449/M/2010 3 6. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD. CIT(A). THE LD. CIT(A) DISMISSED THE ASSESSEES APPEAL BY OBSER VING AS UNDER: I HOLD THAT THE PROJECT, AMRIT DHGAM HAS BEEN BUIL T ON A TOTAL PLOT AREA OF 1458.90 SQ. MTR WHICH IS FOR LESS THAN 1 AC RE. THIS PROJECT, HAVING FAILED TO SATISFY THE CONDITION, IS NOT ELIG IBLE FOR DEDUCTION U/S. 80IB(10). AS REGARDS, THE PROJECT, VIDHI COMP LEX, THIS PROJECT IS BUILT ON A TOTAL PLOT AREA OF 3461.68 SQ. MTR WHICH IS LESS THAN 1 ACRE, THUS THE PROJECT HAS FAILED TO FULFILL THE CO NDITIONS. THE TWO PROJECTS CONSTITUTE TWO SEPARATE UNDERTAKINGS AND H ENCE THEY ARE NOT TO BE CLUBBED TO CLAIM DEDUCTION U/S. 80IB(10). ACCORDINGLY, I HOLD THAT BOTH THE PROJECTS ARE NOT ELIGIBLE FOR DE DUCTION U/S. 80IB (10). 7. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE U S AND RAISED THE FOLLOWING GROUND: LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE A O IN REJECTING THE CLAIM OF DEDUCTION U/S. 80IB OF THE ACT, AMOUNT ING TO RS. 40,15,735/- AS PREFERRED BY THE APPELLANT WITH RESP ECT TO ITS PROJECT VIDHI COMPLEX. 8. WE HEARD BOTH THE PARTIES. WE FIND THAT THIS IS SUE IS COVERED BY THE DECISION IN ITAT MUMBAI BENCH F IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2005-06 IN ITA NO. 1212/M/2009 VIDE ORDER DT. 8 TH APRIL, 2011 IN WHICH IT HAS BEEN HELD AS FOLLOWS: ONE OF THE CONDITION TO BE FULFILLED BY THE ASSESSE E FOR CLAIMING DEDUCTION U/S.80-IB(10) OF THE ACT IS THAT UNDER CLAUSE (D) OF SEC.80-IB(10) OF THE ACT, THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING P ROJECT DOES NOT EXCEED FIVE PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR TWO THOUSAND SQUARE FEET, WHICHEVER IS LESS. THE OBJECTION OF THE AO WAS THAT IN THE PROJECT VIDHI COMPLEX THERE WAS COMMERC IAL AREA AND SINCE IT WAS NOT A BUILDING PROJECT IN THE SENSE CO NSISTING OF ONLY BUILDINGS FOR RESIDENTIAL PURPOSES, THE DEDUCTION UNDER SECTION 80IB(10) WAS NOT TO BE ALLOWED. ON THIS OBJECTION IT IS SEEN FROM THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT(A) THAT AS FAR AS THE PROJECT VIDHI COMPLEX IS CONCERNED, THERE WAS N O COMMERCIAL ITA NO. 1449/M/2010 4 AREA WHATSOEVER. EIGHTEEN SHOPS ADMEASURING IN ALL 2700 SQ. FT. WAS PART OF AMURT DHAM PROJECT FOR WHICH THE ASSESS EE DID NOT CLAIM ANY DEDUCTION U/S.80-IB(10) OF THE ACT. IT W AS THE FURTHER SUBMISSION OF THE ASSESSEE THAT EXISTENCE OF SHOPS IN CERTAIN BUILDINGS OF THE SAME SANCTIONED LAYOUT BUT NOT FOR MING PART OF THE HOUSING PROJECT FOR WHICH DEDUCTION U/S.80-IB(10) O F THE ACT IS CLAIMED WILL NOT IN ANY MANNER VITIATE THE CLAIM FO R DEDUCTION U/S.80-IB(10) OF THE ACT. IN THIS REGARD THE ASSES SEE RELIED ON THE DECISION OF THE HONBLE MUMBAI BENCH OF THE TRIBUNA L IN THE CASE OF ITAT MUMBAI IN THE CASE OF SAROJ SALES ORGANIZATION VS. ITO 115 TTJ 485 (MUM). THE CASE OF SAROJ SALES ORGANIZATION (SUPRA ) WAS A CASE OF A BUILDER WHERE THERE WERE TWO PROJECTS BEING CONSTRU CTED BY NAME NISARG AND BREEZY CORNER. FOR AY 05-06, THE ASSESSEE CLAI MED DEDUCTION U/S.80-IB(10) OF THE ACT ON THE PROFITS OF NISARG P ROJECT. THE AO TREATED BOTH THE PROJECTS AS ONE PROJECT AND FOUND THAT IN THE PROJECT BREEZY CORNER THE BUILT UP AREA OF SOME OF FLATS WERE MORE THAN 1000 SQ.FT. AND HE THEREFORE HELD THAT THE ASSESSEE WAS NOT ENTITLED T O DEDUCTION U/S.80- IB(10) OF THE ACT. THE TRIBUNAL HELD THAT THE TWO P ROJECTS WERE TO BE TREATED AS DIFFERENT PROJECTS FOR APPLYING THE TESTS LAID D OWN IN SEC.80-IB(10)(D) OF THE ACT. . ON THIS ASPECT THERE IS NO SPECIFIC FINDING REND ERED BY THE CIT(A). IN THIS REGARD A COPY OF SANCTIONED PLAN WAS FILED BEFORE US. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT AS FAR AS THE PROJECT VIDHI COMPLEX IS CONCERNED, THERE WAS NO COMMERCIAL AREA WHATSOEVER, COULD NOT BE VERIFIED FROM THE COPY OF THE PLAN AS PRODUCED BEFORE US. SINCE THE CIT(A) HAS ALSO NOT GIVEN ANY FINDING IN THIS REGARD IT WOULD BE APPROPRIATE TO SET ASIDE THIS ISSUE TO THE AO FOR F RESH CONSIDERATION. THE AO WILL VERIFY THE SANCTIONED PLAN TO FIND OUT IF T HE PROJECT VIDHI COMPLEX HAS ANY COMMERCIAL AREA. THE FACT THAT COMMERCIAL AREA IN THE FORM OF SHOPS EXIST IN THE BUILDINGS AMRUT DHAM WHICH IS PA RT OF THE SAME SANCTIONED LAYOUT, BUT NOT FORMING PART OF THE HOUS ING PROJECT VIDHI COMPLEX, FOR WHICH DEDUCTION U/S.80-IB(10) OF THE A CT IS CLAIMED WILL NOT IN ANY MANNER VITIATE THE CLAIM FOR DEDUCTION U/S.80-I B(10) OF THE ACT. IN THIS REGARD THE DECISION OF THE HONBLE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ITAT MUMBAI IN THE CASE OF SAROJ SALES ORGA NIZATION VS. ITO 115 TTJ 485 (MUM) SUPPORTS THE VIEW THAT THE EXISTENCE OF COMMERCIAL AREA FOR THE PROJECT FOR WHICH DEDUCTION U/S.80-IB(10) OF TH E ACT IS CLAIMED ALONE SHOULD BE SEEN THOUGH COMMERCIAL AREA IS BUILT IN T HE SAME SANCTIONED LAYOUT BUT IN A DIFFERENT PROJECT. ON VERIFICATION , IF COMMERCIAL AREA IS FOUND TO EXIST IN THE PROJECT VIDHI COMPLEXT, THE A O WILL ALSO VERIFY IF SUCH AREA IS WITHIN THE PERMITTED LIMITS AS LAID DOWN IN SEC. 80-IB(10) OF THE ACT. THE AO IS ACCORDINGLY TO DIRECTED TO VERI FY THE FACTS IN THIS REGARD AND WHILE CONSIDERING THE CLAIM FOR DEDUCTIO N U/S.80-IB(10) OF THE ACT. THE NEXT ISSUE IS WITH REGARD TO THE TOTAL AREA O F THE PLOT ON WHICH THE PROJECT WAS CONSTRUCTED. ONE OF THE CON DITION FOR ITA NO. 1449/M/2010 5 ALLOWING DEDUCTION U/S.80-IB(10) OF THE ACT IS THAT THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE. ACCORDING TO THE AO THE PLOT AREA AFTER REDUCING THE AREA CONSUM ED FOR D.P.ROAD WAS ONLY 3461.68 SQ. METERS WHICH WAS LESS THAN ONE ACRE. ACCORDING TO THE ASSESSEE THE PLOT AREA IS 4746.26 SQ.MTRS INCLUDING THE AREA GIVEN FOR D.P.ROAD. ON THIS ISSUE THE CI T(A) HELD AS FOLLOWS:- 5.2 GROUND OF APPEAL NO.2: THIS GROUND OF APPEAL IS RELATED TO THE DISALLOWANCE OF THE CLAIM OF DEDUCTI ON U/S. 80 IB(10) AT RS. 34,57,156/- IN RESPECT OF THE PROJECT CALLED VIDHI COMPLEX. AS STATED IN THE ASSESSMENT ORDER, THE A PPELLANT WAS ENGAGED IN THE CONSTRUCTION OF TWO BUILDINGS KN OWN AS AMURT DHAM AND VIDHI COMPLEX. AS PER THE APPEL LANT, VIDHI COMPLEX WAS A PROJECT, WHICH WAS 80 IB(10) COMPLIANT. THE PROJECT AMURT DHAM, WAS CONSIDERED TO BE 80 I B(10) NON COMPLIANT. THE APPELLANT HAD, THEREFORE CLAIMED DE DUCTION U/S. 80 IB (10) ONLY IN RESPECT OF VIDHI COMPLEX. THE PROJECT VIDHI COMPLEX WAS UNDOUBTEDLY A HOUSING PROJECT OF THE APPELLANT, WHICH WAS BEING CONSTRUCTED ON A PART OF LAND ADMEASURING 4746.26 SQ. MTRS INCLUSIVE OF DP ROAD. AFTER EXCLUDING THE AREA OCCUPIED BY THE DP ROAD, THE NET AREA OF THE PLOT WAS 3461.68 SQ. MTRS ONLY. THIS FACT WAS CONFIRMED BY THE PARTNER OF THE FIRM AS WELL AS THE ARCHITECT , MR. R.L. MODAK. THIS CLEARLY MEANS THAT THE PROJECT WAS BEI NG CONSTRUCTED ON A PLOT OF LAND WHICH WAS LESS THAN O NE ACRE IN AREA. THE MANDATORY CONDITION FOR A PROJECT TO BEC OME ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) IS THAT THE PR OJECT SHOULD BE CONSTRUCTED ON A PLOT WHICH IS NOT LESS THAN ONE ACRE IN AREA. SECTION 80 IB(10) CLEARLY STIPULATES THAT TH E HOUSING PROJECT SHOULD BE ON THE SIZE OF A PLOT WHICH HAS A MINIMUM AREA OF ONE ACRE. THE APPELLANT HAS CLEARLY VIOLAT ED THE CONDITION LAID DOWN IN CLAUSE 9B) OF SUB SECTION (1 0) OF SECTION 80 IB. FURTHER, THE BUILDING PROJECT WAS NOT SANCT IONED BY THE KALYAN DOMBIVILI MUNICIPAL CORPORATION (KDMC). IN VIEW OF THESE VIOLATIONS OF THE MANDATORY CONDITIONS LAID D OWN IN SECTION 80 IB(10), THE PROJECT VIDHI COMPLEX IS N OT ELIGIBLE TO GET DEDUCTION U/S. 80 IB(10). THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S. 80 IB(10) IS, THEREFORE, CONFIRMED A ND THE ORDER OF THE AO IS UPHELD ON THIS ISSUE. THE GROUND OF A PPEAL NO.2 IS, THEREFORE, DISMISSED. THUS FACTUALLY IT IS NOT IN DISPUTE THAT THE PROJ ECT VIDHI COMPLEX WAS CONSTRUCTED ON A PART OF LAND ADMEASURING 4746. 26 SQ. MTRS INCLUSIVE OF DP ROAD. AFTER EXCLUDING THE AREA OCC UPIED BY THE DP ROAD, THE NET AREA OF THE PLOT WAS 3461.68 SQ. MTRS ONLY. THE ITA NO. 1449/M/2010 6 QUESTION IS WHETHER THE AREA GIVEN FOR THE PURPOSE OF FORMING DP ROAD HAS TO BE EXCLUDED OR INCLUDED FOR THE PURPOSE OF CALCULATING THE SIZE OF THE PLOT ON WHICH THE HOUSING PROJECT H AS BEEN CONSTRUCTED. ON THIS ISSUE WE FIND THAT THE HONBL E MUMBAI ITAT IN THE CASE OF UMIYA ENTERPRISES VS. ITO IN ITA NO.2 750/M/09 FOR A.Y 2004-05 HAS CONSIDERED THIS ISSUE. IN THAT CASE TH E DISPUTE WAS WHETHER THE AREA FOR ROAD SET BACK, RECREATION OPEN SPACE AND INTERNAL ROAD SET BACK IS TO BE EXCLUDED FOR THE PU RPOSE OF CALCULATING THE SIZE OF PLOT AREA ON WHICH THE HOUS ING PROJECT IS CONSTRUCTED. THE TRIBUNAL HELD AS FOLLOWS: SO FAR AS THE PRECISE POINT RAISED BY THE CIT(A) I S CONCERNED, IT IS SEEN FROM PAGE 66, WHICH IS A COPY OF THE COMMUNICA TION DATED 20.09.2003 SENT BY KALYAN-DOMBIVLI MAHANAGAR PALIKA THAT IT MENTIONS THE SIZE OF THE PLOT AS 4600 SQ.METRES ONLY. THE CO MMUNICATION DATED 29.6.2000 (PAGE 63 OF THE PAPER BOOK) ALSO REFERS T O THE AREA OF THE PLOT AS 4600 SQ.METRES. THE ASSESSEE HAS ALSO FILED AT PAGE 68 OF THE PAPER BOOK AN ANNEXURE TO THE COMMUNICATION ISSUED BY THE KALY AN-DOMBIVLI MAHANAGAR PALIKA DATED 20.09.2003, REFERRED TO EARL IER. THIS ANNEXURE IS A MAP SHOWING THE DETAILS OF THE SITE PLANS, PLAN O F THE RESIDENTIAL UNITS TO BE BUILT BY THE ASSESSEE ETC. IT ALSO CONTAINS AN A REA STATEMENT WHICH SHOWS THAT THE AREA OF THE PLOT IS 4600 SQ. METRES. IT FURTHER SHOWS THAT THERE IS A DEDUCTION 656.75 SQ. METRES FOR ROAD SET BACK. THIS DEDUCTION IS THEREAFTER SET OFF BY AN ADDITION OF EQUIVALENT ARE A ALLOWED BY MNP. THE NET AREA OF THE PLOT AFTER THE DEDUCTION OF THE ARE A FOR ROAD SET BACK HAS BEEN SHOWN AT 3943.25 SQ. METRES. THEREAFTER THERE IS A DEDUCTION OF 591.49 SQ. METRES FOR RECREATION OPEN SPACE AND 411 SQ. METRES FOR INTERNAL ROAD . THE NET PLOT AREA IS THEN SHOWN AT 2940.76 SQ. METRES. THE AREA OF 656.75 SQ. METRES, WHICH WAS EARLIER DEDUCT ED FOR ROAD SET BACK, IS ADDED AND THE TOTAL AREA PLOT IS SHOWN AT 3597.5 1 SQ. METRES. IT WILL BE SEEN THAT THE TOTAL PLOT AREA HAS BEEN WORKED OUT B Y THE MNP AT 3597.51 SQ.METRES ONLY AFTER DEDUCTING 591.49 SQ. METRES FO R RECREATION OPEN SPACE. THE RECREATION OPEN SPACE IS HOWEVER PART OF THE PLOT AND THOUGH FOR THE PURPOSE OF MUNICIPAL REGULATIONS, A PORTION OF THE PLOT HAS TO BE RESERVED AS A RECREATION AREA BUT FOR THE PURPOSE O F CLAUSE (B) OF SECTION 80IB(10), THE RECREATION AREA HAS ALSO TO BE CONSID ERED AS PART OF THE PLOT ONLY. THERE IS NO CONDITION IN THE CLAUSE THAT RECR EATION AREA HAS TO BE EXCLUDED WHILE EXAMINING WHETHER THE PLOT IS OF THE SIZE OF ONE ACRE OR LESS. IF THE RECREATION AREA OF 591.49 SQ. METRES I S ADDED TO THE TOTAL PLOT AREA OF 3597.91 SQ. METRES, IT GIVES AN AREA OF 41 89 SQ. METRES WHICH IS THE SIZE OF THE PLOT. THE TOTAL PLOT AREA HAS BEEN ARRIVED AT BY MNP 3597.51 ONLY FOR THE PURPOSE OF CALCULATING THE PER MISSIBLE FSI. THE PERMISSIBLE FSI AS PER COLUMN 9 OF THE AREA STATEME NT IS ONE, WHICH MEANS THAT THE ASSESSEE CAN BUILD 3597.91 SQ.METRES IN THE SAID PLOT. HOWEVER, FOR THE PURPOSE OF CLAUSE (B) OF SECTION 8 0IB(10), THE PLOT AREA HAS BEEN TAKEN AT 4189 SQ. METRES, IF NOT AT 4600 S Q. METRES, EVEN ON THIS ITA NO. 1449/M/2010 7 BASIS, THE SIZE OF THE PLOT IS MORE THAN ONE ACRE. IN OUR OPINION, THE CIT(A) COMMITTED AN ERROR IN SIMPLY EXCLUDING 656. 75 SQ.METRES FROM THE AREA OF 4600 SQ.METRES WITHOUT APPRECIATING THA T THE EXCLUSION IS ONLY FOR THE PURPOSE OF D.P. ROAD WHICH DOES NOT RE DUCE THE SIZE OF THE PLOT AS A WHOLE. WE ARE THEREFORE SATISFIED THAT TH ERE IS NO VIOLATION OF THE CONDITIONS PRESCRIBED BY CLAUSE(B). IN VIEW OF THE DECISION OF THE TRIBUNAL REFERRED AB OVE WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) ON THIS ISSUE HAS TO BE REVERSED. WE DIRECT ACCORDINGLY. THE CIT(A) HAS ALSO MADE PA SSIVE REMARK THAT THE PROJECT HAS NOT BEEN SANCTIONED BY THE KDM C. THIS IS NOT CORRECT AND THE REQUIRED APPROVAL HAD BEEN FILED BE FORE US AND HAD ALSO BEEN FILED BEFORE THE AO AND THE AO HAS ALSO M ADE REFERENCE TO THE SAME IN HIS ORDER. WE THEREFORE, HOLD THAT THE ASSESSEE WOULD BE ENTITLED TO DEDUCTION UNDER SECTION 10 IB(10) OF THE ACT SUBJECT TO THE VERIFICATION OF THE EXISTENCE OF COMMERCIAL ARE A IN THE PROJECT VIDHI COMPLEX. THE FACT THAT THE COMMERCIAL COMPLE X EXISTS IN THE AMURT DHAM PROJECT WOULD NOT BE RELEVANT FOR DENYI NG THE CLAIMING OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80 IB(1 0) OF THE ACT FOR THE PROJECT VIDHI COMPLEX. WITH THE AFORESAID OBSE RVATION WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ALLOW THE CLAIM FOR DEDUCTION UNDER SECTION 80 IB(10) OF THE ACT AFTER VERIFYING THE COMMERCIAL AREA IN THE PROJECT VIDHI COMPLEX. FOR STATISTICAL PURPOSES APPEAL OF THE ASSESSEE IS TREATED AS ALLOW ED. RESPECTFULLY FOLLOWING THE ABOVE DECISION WE SET A SIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO ALLOW THE CLAIM FOR DEDUCTION U/S. 80IB(10) OF THE ACT AFTER VERIFYING THE COMMERCIAL AREA IN THE PROJECT VIDHI COMPLEX. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 15 TH DAY OF JULY, 2011 SD/- SD/- (P.M. JAGTAP) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI, DATED 15 TH JULY, 2011 RJ ITA NO. 1449/M/2010 8 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR F BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO. 1449/M/2010 9 DATE INITIALS 1 DRAFT DICTATED ON: 4 . 0 7 . 201 1 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 5 .0 7 .2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: DATE ON WHICH FILE GOES TO AR _________ ______ 10 . DATE OF DISPATCH OF ORDER: _________ ______