M/s ANKIT ENTERPRISES, Pune V. DCIT, Pune

ITA 1453/PUN/2013

• Counselvise Citation: 145324514 RSA 2013
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Bogus purchase; Business income; Opportunity of cross examination; Retrospective amendment; Corroborative evidences; Valuation report; Competent authority; Documents seized
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.1509/PN/2013 (ASSESSMENT YEAR : 2008-09) DCIT, CENTRAL CIRCLE-1(1), PUNE .. APPELLANT VS. M/S. ANKIT ENTERPRISES, 2 ND FLOOR, CITY POINT, DHOLE PATIL ROAD, PUNE-411001 PAN NO. AAFFA1172N .. RESPONDENT ITA.NO.1453/PN/2013 (ASSESSMENT YEAR : 2008-09) M/S. ANKIT ENTERPRISES, 2 ND FLOOR, CITY POINT, DHOLE PATIL ROAD, PUNE-411001 PAN NO. AAFFA1172N .. APPELLANT VS. DCIT, CENTRAL CIRCLE-1(1), PUNE .. RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI SANKET JOSHI REVENUE BY : SHRI A.K. MODI, CIT DATE OF HEARING : 12-03-2015 DATE OF PRONOUNCEMENT : 31-03-2015 ORDER PER R.K. PANDA, AM : THESE ARE CROSS APPEALS. THE FIRST ONE IS FILED BY THE REVENUE AND SECOND ONE BY THE ASSESSEE AND ARE DIRECTED AGAINST THE ORDER DATED 28- 03-2013 OF THE CIT(A)-II, PUNE RELATING TO ASSESSME NT YEAR 2008-09. FOR THE SAKE OF CONVENIENCE BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2 ITA NO.1509/PN/2013 (BY REVENUE) (A.Y. 2008-09) : 2. GROUNDS OF APPEAL NO.1 BY THE REVENUE READS AS U NDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD .CIT(A) ERRED IN TREATING THE BOGUS PURCHASES OF STEEL FROM FIVE PARTIES NAMELY (A) VORA MERCANTILE PVT. LTD., (B) M/S. MAYOORA METAL TRADE C ORPORATION (C) M/S. YASH TRADING CO. (D) M/S. SHREE SURYA STEEL AND (E) M /S. SATYAM STEEL AS GENUINE IGNORING THE MATERIALS AVAILABLE ON RECORDS B ROUGHT BY A.O. 2.1 AFTER HEARING BOTH THE SIDES, WE FIND THE AO MA DE ADDITION OF RS.7,06,314/- ON ACCOUNT OF BOGUS PURCHASES OF STEE L FROM 6 PARTIES. SIMILARLY, HE ALSO DISALLOWED AN AMOUNT OF RS.19,64 ,424/- IN RESPECT OF PURCHASES FROM 5 PARTIES TOWARDS VARIOUS PURCHASES IN ABSENCE ANY BASIC SUPPORTING EVIDENCES LIKE GRN, TRANSPORT BILL, WEIG HMENT SLIP, OCTROI CHALLAN, DELIVERY CHALLAN ETC. THUS HE MADE TOTAL DISALLOWANCE OF RS.26,70,738/-. 3. IN APPEAL THE LD.CIT(A) DELETED THE PURCHASES MA DE FROM THE 5 PARTIES TOTALING TO RS.19,64,424/- AND SUSTAINED TH E ADDITION IN RESPECT OF INFLATED PURCHASES OF STEEL FROM THE 6 PARTIES TOTA LING TO RS.7,06,314/-, THE DETAILS OF WHICH ARE AS UNDER : SR. NO. NAME OF PARTY A.Y. 2008-09 (RS.) PURCHASES FROM PARTIES DISALLOWED BY CIT (A) 1 UNIQUE FERRO & METAL PVT. LTD. . 2 FRESHO METAL PVT. LTD. - 3 PRAKY MERCANTILE PVT. LTD. - 4 MEGHA ENTERPRISES - 5 NARENDRA KUMAR & CO. - 6 R.D. JAIN & CO. - A SUB - TOTAL 7,06,314 PURCHASES FROM PARTIES ALLOWED BY CIT(A) 7 VORA MERCANTILE PVT. LTD. - 8 YASH TRADING CO. - 9 SHREE SURYA STEEL - 10 MAYOORA METAL TRADE CORPORATION - 3 11 SATYAM STEEL - B SUB - TOTAL 19,64,424 C TOTAL DISALLOWANCE (A + B) 26,70,738 4. AGGRIEVED WITH SUCH PART RELIEF GIVEN BY THE CIT (A) THE REVENUE IS IN APPEAL BEFORE US. 5. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUND IS IDENTICAL TO GROUND OF APPEAL NO.1 BY THE REVENUE IN ITA NO.1 504/PN/2013. VIDE OUR ORDER OF EVEN DATE WE HAVE DISCUSSED THE ISSUE AT PARA NO.13 AND 13.1 OF THE ORDER AND THE GROUND RAISED BY THE REVENUE H AS BEEN DISMISSED. FOLLOWING THE SAME REASONINGS, THIS GROUND BY THE R EVENUE IS DISMISSED. 6. GROUNDS OF APPEAL NO.2 BY THE REVENUE READS AS U NDER : 2. THE LD.CIT(A) HAS ERRED IN ALLOWING PROPORTIONAT E DEDUCTION U/S.80IB(10) OF THE ACT TO THE PROJECT HAVING FLATS C ONSISTING OF BUILT UP AREA OF LESS THAN 1500 SQ.FT. ALTHOUGH THE SAME IS IN C ONTRAVENTION OF PROVISIONS OF SECTION 80IB(10). 6.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DI SALLOWED CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE TWO PROJEC TS LAPIS LAZULI AND PINK CITY ON THE GROUND THAT SOME OF THE FLATS OF T HE ABOVE 2 PROJECTS ARE EXCEEDING 1500 SQ.FT. HE CAME TO THIS CONCLUSION O N THE BASIS OF SEARCH CONDUCTED AT THE PREMISES OF THE ASSESSEE WHEREIN T HE DOCUMENTS SEIZED SHOWED THAT THE AREA MENTIONED ON THE SEIZED DOCUME NTS SHOW THAT IN CASE OF ALL FLATS OF PINK CITY, THE AREA IS MORE THAN 15 00 SQ.FT. FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE PROJECT WA S REFERRED TO A GOVERNMENT APPROVED VALUER FOR MEASUREMENT. THE GO VERNMENT APPROVED VALUER HAD MEASURED ALL THE FLATS AND CONC LUDED THAT THE AREA OF 52 ROW HOUSES OF PINK CITY ARE MORE THAN 1500 SQ.F T. SIMILARLY, SOME OF 4 THE FLATS IN PROJECT LAPIS LAZULI ARE ALSO HAVING M ORE THAN 1500 SQ.FT. WHICH IS MORE THAN THE THRESHOLD LIMIT PRESCRIBED U /S.80IB(10)(C) OF THE I.T. ACT. HE THEREFORE DISALLOWED THE CLAIM OF DED UCTION U/S.80IB(10) IN RESPECT OF THE ABOVE 2 PROJECTS. IN APPEAL THE LD. CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE I TA NOS. 156/PN/2011 AND ITA NO.172/PN/2011 FOR A.Y. 2004-05 DIRECTED TH E AO TO ALLOW PROPORTIONATE DEDUCTION. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US. 8. AFTER HEARING BOTH THE SIDES, WE FIND THE ISSUE OF PROPORTIONATE DEDUCTION HAD COME UP BEFORE THE TRIBUNAL IN ASSESS EES OWN CASE IN APPEAL FILED BY THE REVENUE FOR A.Y. 2004-05. VIDE ORDER OF EVEN DATE WE HAVE ALREADY DECIDED THE ISSUE AT PARA NOS.18 TO 20 OF THE ORDER AND THE GROUND RAISED BY THE REVENUE HAS BEEN DISMISSED BY OBSERVING AS UNDER : 18.1 AFTER HEARING BOTH THE SIDES, WE FIND DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED ON THE BASIS OF STATEME NTS RECORDED FROM SOME OF THE FLAT PURCHASERS AND ON THE BASIS OF PHY SICAL VERIFICATION AND MEASUREMENT OF FLATS OF EACH PROJECT THAT SOME OF THE FLATS IN THE PROJECT LAPIS LAZULI ARE HAVING MORE THAN 1500 SQ.FT. WHICH IS MORE THAN THE THRESHOLD LIMIT AS PRESCRIBED IN SECTION 80IB(10) ( C) OF THE I.T. ACT. FURTHER, THE PROJECT IS NOT COMPLETE AS ON 31-03-200 8 AS REQUIRED BY THE SECTION 80IB(10)(A)(IA) OF THE I.T. ACT. HE THEREFO RE DISALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT L APIS LAZULI. 19. IN APPEAL THE LD.CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NOS. 156/PN/2011 AND ITA NO. 172/PN/2011 FOR A.Y. 2004-05 DIRECTED THE AO TO ALL OW PROPORTIONATE DEDUCTION. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 20. WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2004-05 HAS ALLOWED THE CLAIM OF PROPORTIONATE DEDUCTION BY FOL LOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF D.S. KULKARNI DEVELOPERS AND THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BE NGAL AMBUJA HOUSING DEVELOPMENT LTD. VIDE ITA NO.458/2006 ORDER DATED 0 5-01-2007. 5 FURTHER, THE TRIBUNAL AGAIN IN ASSESSEES OWN CASE FOR A. Y. 2005-06 HAS ALLOWED THE CLAIM OF PROPORTIONATE DEDUCTION IN RESP ECT OF THE SAID PROJECT. FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.YRS. 2004-05 AND 2005-06 WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) GRANTING PROPORTIONATE DEDUCTION TO THE ASSESSEE IN RESPECT OF THE UNITS WITH BUILT UP AREA OF LESS THAN 1500 SQ.FT. IN TH E PROJECT LAPIS LAZULI. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSE D. 8.1 FOLLOWING THE SAME REASONING THIS GROUND BY THE REVENUE IS DISMISSED. 9. GROUNDS OF APPEAL NO.3, 4 AND 7 BY THE REVENUE R EAD AS UNDER : 3. THE LD.CIT(A) HAS ERRED IN HOLDING THAT CONSTRUCT ION OF BUILDINGS, G, H & I ON VACANT LAND OF MAESTRO PROJECT BY ANKIT ENT ERPRISES IS NEW ONE, HENCE, MAESTRO PROJECT WHICH HAS ALREADY DEVELOPED B Y KOLTE PATIL DEVELOPERS LTD. (KPDL) AND APPROVED ON 29-09-1992 DO ESNT DEBAR THE ASSESSEE FROM CLAIMING DEDUCTION U/S.80IB(10). 4. THE LD.CIT(A) HAS ERRED IN HOLDING THAT ALTHOUGH COMMENCEMENT CERTIFICATE WAS GRANTED BY LOCAL AUTHORITY TO KOLTE PATIL DEVELOPERS LTD. (KPDL) ON 20-08-1998 BUT AS THE SAME IS TRANSFERRED TO M/S. ANKIT ENTERPRISES AND THE ASSESSEE REAPPLIED FOR COMMENCEMENT CERTIFICATE AND COMMENCEMENT CERTIFICATE WAS ISSUED BY LOCAL AUTHORITY ON 06-05-1999, HENCE ELIGIBLE FOR DEDUCTION U/S.80IB(10) OF THE ACT . 7. THE LD.CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEDUCTION IN RESPECT OF PROJECT MISTY MOOR, ALTHOUGH THE PROJECT W AS COMMENCED ON 20-08-1998, I.E. PRIOR TO 01-10-1998 AND THEREFORE, DOES NOT SATISFY THE FIRST CONDITION AS PROVIDED IN SECTION 80IB(10). 9.1 AFTER HEARING BOTH THE SIDES, WE FIND THIS GROU ND IS IDENTICAL TO GROUND OF APPEAL NO.2 IN ITA NO.1449/PN/2013 FOR A. Y. 2003-04 FILED BY THE REVENUE. VIDE OUR ORDER OF EVEN DATE WE HAV E DECIDED THE ISSUE AT PARA NOS.17 TO 17.3 OF THE ORDER AND THE GROUND RAI SED BY THE REVENUE HAS BEEN DISMISSED BY OBSERVING AS UNDER : 17. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A ) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. SO FAR AS THE DISA LLOWANCE OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT MAEST RO IS CONCERNED, WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2001-02 TO 2003-04 VIDE ORDER DATED 25-06-2012 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT OBSERVATION OF THE TRIBUNAL FROM PARA 7 TO 14 OF THE ORDER READS AS UNDER: 6 7. WE FIND THAT THE FACTS OF THE PRESENT CASE BEFOR E US ARE ON BETTER FOOTING THAN THE CASE OF VANDANA PROPERTIES VS. DCIT ( SUPRA) AS IN THE PRESENT CASE, ADMITTEDLY, THE LAND ON WHICH THE ASSESSEE HAS CONSTRUCTED THE BUILDINGS G, H AND I WAS SHOWN LYING VACANT IN THE ORIGINAL PLAN GOT APPROVAL BY THE KPDL AND ASSESSEE HAD OBTAINED COMMENCE MENT CERTIFICATE FOR CONSTRUCTION OF THOSE BUILDING FROM T HE LOCAL AUTHORITY ON 16.12.1998. THE ASSESSEE HAD SUBMITTED THE BUILDING PLAN TO THE MUNICIPAL AUTHORITY ON 13.11.98 ON WHICH THEY GOT THE COMMENC EMENT CERTIFICATE ISSUED ON 16.12.1998 AND THEREAFTER THE CONSTRUCTION O F THE BUILDING STARTED GOT COMPLETED ON 26.3.2003 AS PER THE COMPLET ION CERTIFICATE. THUS, IN VIEW OF THE AFORECITED DECISION OF HON'BLE B OMBAY HIGH COURT IN THE CASE OF VANDANA PROPERTIES VS. DCIT (SUPRA) THE AP PROVAL OF THE PLAN SUBMITTED BY KPDL FOR THE CONSTRUCTION OF BUILDINGS B, C, F), E AND F ON 29 TH SEP, 1995 IS NOT GOING TO EFFECT THE BUILDING PLAN CONSISTING BUILDINGS G, H AND I APPROVED AND COMMENCED BY THE ASSESSEE AS PER THE COMMENCEMENT CERTIFICATE ISSUE ON 16.12.98. IN OTHER WORDS THE DATE 29.9.95 ON WHICH THE KPDL HAD TAKEN APPROVAL FOR TH E CONSTRUCTION OF THE BUILDINGS B, C, D, E AND F CANNOT BE TAKEN AS FIRST DA TE OF APPROVAL IN THE CASE OF ASSESSEE FOR CONSTRUCTION OF THE BUILDINGS G, H AN D I ON THE VACANT LAND OF THE PROJECT COMMENCED ON 16.12.98 AS PER THE COMMENCEMENT CERTIFICATE ISSUED BY THE MUNICIPAL AUTHORITY ON THE BUILDING PLAN SUBMITTED BY THE ASSESSEE ON 13.11.98, TO DENY THE CLAIM ED DEDUCTION IN VIEW OF EXPLANATION TO SECTION 80IB(10)(A) OF THE A CT. IN THESE CIRCUMSTANCES, WE DO NOT FIND SUBSTANCE IN THE CONTENTI ON OF THE LD. DR THAT THE PROJECT WAS NOT DEVELOPED BY THE ASSESSEE BUT B Y KPDL. HIS CONTENTIONS REMAINED THAT AS PER RULE 2.23 OF DEVELO PMENT CONTROLLED RULES (IN SHORT DC RULES), THE MOMENT LAY OUT IS APPROV ED, DEVELOPMENT STARTS. THUS IN THE PRESENT, CASE AS PER THE LD. DR DEVEL OPMENT OF THE PROJECT STARTED ON 29.9.95 WHEN THE LAY OUT WAS FIRSTL Y-APPROVED. HE CONTENDED THAT UNDER U/S.80IB(10) OF THE ACT BOTH DE VELOPMENT AND CONSTRUCTION ARE REQUIRED TO BE SEEN TO COMPUTE THE D ATE OF COMMENCEMENT AND COMPLETION OF THE PROJECT. HE SUBMI TTED THAT TRANSFER ONLY SHIFTS THE OWNERSHIP OF THE LAND BUT THE DATE OF COMMENCEMENT OF THE PROJECT ON THE LAND WILL REMAIN THE SAME. LD. DR REF ERRED PAGE NO. 2 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE AND SUBMITTED THAT IT IS REVISED LAYOUT OF THE BUILDING. HE SUBMITTED THAT TO VERIFY THE DATE OF COMMENCEMENT OF THE PROJECT THE SURVEY WAS CARRIED OU T AT THE PREMISES OF THE ASSESSEE. IN THAT SURVEY STATEMENT OF PARTNER OF T HE ASSESSEE FIRM WAS RECORDED AS PER WHICH THE PROJECT WAS STARTED ON 2 9.9.95. IN THIS REGARD HE REFERRED PAGE NO, 3 TO 5 OF THE ASSESSMENT OR DER WHEREIN RELEVANT STATEMENT OF THE PARTNER IN QUESTION ANSWER F ORM HAS BEEN REPRODUCED. 8. WE DO NOT FIND SUBSTANCE IN THE ABOVE CONTENTION OF THE LD. DR SINCE ADMITTEDLY IN THE PRESENT CASE THE LAND ON WHICH ASSESSE E HAS CONSTRUCTED BUILDINGS G, H AND I HAS BEEN SHOWN VACANT IN THE LAY OUT PLAN, A COPY WHEREOF HAS BEEN MADE AVAILABLE AT PAGE NO. 2 OF THE PAPER BOOK. THE SAID VACANT LAND WAS TRANSFERRED BY KPDL TO THE ASSESSEE AND ASSESSEE GOT THE BUILDING PLAN TO CONSTRUCT BUILDING NOS. G, H AND I A PPROVED BY THE LOCAL AUTHORITY ON 16.12.98 AS IT IS EVIDENT FROM THE COMME NCEMENT CERTIFICATE DATED 16.12.1998 ISSUED BY THE PUNE MUNICIPAL CORPORA TION (PMC) COPY MADE AVAILABLE AT PAGE NO. 1 OF THE PAPER BOOK. VID E EXPLANATION (I) TO SECTION 80IB(10)(A) IT HAS BEEN MADE CLEAR THAT FOR COMPUTATION OF THE PRESCRIBED TIME LIMIT THE STARTING DATE WILL BE THE F IRST APPROVAL OF THE BUILDING PLAN OF THE HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY. FOR A READY REFERENCE THE SAID EXPLANATION (I) IS BEING REP RODUCED HERE UNDER : 7 'EXPLANATION.-FOR THE PURPOSE OF THIS CLAUSE, (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HO USING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLA N OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY.' 9. THUS IT IS CLEAR FROM THE ABOVE REPRODUCED EXPLA NATION THAT HOUSING PROJECT' AND 'BUILDING PLAN' OF SUCH HOUSING PROJECT ARE TWO DIFFERENT TERMINOLOGIES. FOR THE PURPOSE OF COMPUTATION OF THE PRESCRIBED TIME LIMIT FOR COMPLETION OF THE CONSTRUCTION OF THE HOUSING PRO JECT, THE FIRST DATE WOULD BE THE FIRST APPROVAL OF THE BUILDING PLAN WHI CH IN THE PRESENT CASE IS 16.12.1998. IN THE CASE OF DCIT VS. ADITYA DEVELOPE RS (SUPRA) THE PUNE BENCH HAS OCCASION TO DELIBERATE ON THE ISSUE. IT HAS BE EN HELD THEREIN THAT THE LAY OUT PLAN IS ONLY CONCEPTUAL AND CONSTRUCTION COMMENCES SUBSEQUENTLY WHEN THE ASSESSEE SUBMITS THE CONSTRUC TION PLAN WHICH ARE APPROVED BY THE AUTHORITY THUS IT IS CLEAR THAT APPROVAL OF BUILDING PLANS BY THE LOCAL AUTHORITY ALONG WITH CO MMENCEMENT CERTIFICATE IS THE RELEVANT DATE TO COMPUTE THE DAT E OF COMMENCEMENT OF THE CONSTRUCTION ON THE BUILDING PLAN. UNDISPUTE DLY, THE FIRST APPROVAL OF THE BUILDING PLAN FOR BUILDINGS G, H AN D I BY THE LOCAL AUTHORITY IN THE CASE OF THE ASSESSEE IS 16.12.98 A S PER THE ABOVE CITED DECISIONS. WE THEREFORE, HOLD AS SUCH. THE FIRST AP PELLATE ORDER IN THIS REGARD IS THUS UPHELD. 10. THE SECOND OBJECTION FOR DISALLOWANCE OF THE CL AIMED DEDUCTION IN RESPECT OF MAESTRO PROJECT BY THE A.O. WAS THAT SOM E FLATS DESIGNATED AS A & B FOR EXAMPLE 603A AND 603B WERE COMBINED BY TW O FLATS CONTIGUOUSLY LOCATED BY WAY OF HAVING SINGLE ELECTR ICITY METER, SINGLE MAIN DOOR ENTRANCE A SINGLE FAMILY RESIDING, ETC. R EPRESENTING A SINGLE UNIT IN REALITY. THE A.O. INFERRED THAT ALLEGED TWO FLATS REGISTERED SEPARATELY WITH TWO DIFFERENT INDIVIDUALS OR GROUP OF INDIVIDUALS REPRESENT A SINGLE RESIDENTIAL UNIT TO BE TAKEN TOG ETHER FOR CALCULATING BUILD UP AREA FOR THE PURPOSE OF APPLYING THE THRES HOLD LIMIT OF MAXIMUM AREA OF 1500 SQ. FT. AS CONTEMPLATED IN SEC TION 80IB(10) OF THE ACT IN G, H AND I BUILDINGS OF MAESTRO PROJECT AS A NEW UNDERTAKING. THE A.O. WHILE CALCULATING THE BUILD UP AREA OF THO SE UNIT/FLATS INCLUDED THE AREA COVERED BY THE BALCONY OR ANY OTHER BASED ON THE INTERPRETATION OF PUNE DC RULES. THE A.O. ALSO DERI VED STRENGTH TO CALCULATE THE BUILD UP AREA AS PER NEW DEFINITION O F 'BUILD UP AREA' IN SECTION 80IB(14) INSERTED W.E.F. 1.4.2005 TAKING THE AMENDMENT APPLICABLE RETROSPECTIVELY. THUS THE A.O. FOUND THA T BASED ON THE ABOVE, THE BUILD UP AREA OF SOME UNIT /FLATS OF MAE STRO HAS EXCEEDED THE THRESHOLD LIMIT OF 1500 SQ. FT. WHICH DISQUALIF IED THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 11. THE ASSESSEE CONTENDED THE ABOVE FINDING OF THE A.O. ON THE BASIS THAT ABOVE STATED FLATS HAD BEEN SHOWN SEPARATELY IN THE APPRO VED PLAN AND THEY HAVE BEEN REGISTERED SEPARATELY, THUS, THEY CANNOT BE COMBINED TOGETHER TO CONSTITUTE A SINGLE RESIDENTIAL U NIT FOR THE PURPOSE OF CALCULATING THRESHOLD LIMIT OF BUILD UP AREA FOR THE PU RPOSE OF SECTION 80IB(10) AND FURTHER THAT DESPITE COMBINING THE TWO ADJAC ENT FLATS ALSO THE BUILD UP AREA OF THE UNIT/FLATS HAS NOT CROSSED THE LIMIT OF 1500 SQ.FT. AS PER BUILD UP AREA COMPUTED IN ACCORDANCE WITH PUNE D C RULES. IT WAS CONTENDED THAT THE A.O. HAS WRONGLY CALCULATED THE BUILD U P AREA TAKING THE BALCONY/TERRACE AREA AS A PART OF BUILD UP AREA WHICH IS NOT PERMITTED BY THE PUNE DC RULES. THE LD, CIT (A) DID NO T AGREE WITH THESE CONTENTIONS OF THE ASSESSEE AND HAS UPHELD THE ACTION OF THE A.O. 8 TO THIS EXTENT WITH THIS OBSERVATION THAT IN A RESI DENTIAL UNIT IS TO BE NECESSARILY TAKEN THE AREA WHICH HAS BEEN MADE FOR ONE FAMILY. THE ASSESSEE IN ITS CROSS OBJECTION HAS OBJECTED THIS F INDING OF THE LD. CIT(A). THE LD.CIT(A) HAS HOWEVER, AGREED WITH THE ALTERNATIVE SUBMISSION OF THE ASSESSEE THAT EVEN AFTER INCLUSIO N OF TWO ADJACENT FLATS, NOWHERE IN ANY RESIDENTIAL UNIT, THE BUILD U P AREA HAS CROSSED 1500 SQ.FT. IF THE AREA OF BALCONY/TERRACE IS EXCLU DED AS PER PUNE DC RULES. 12. THE SUBMISSION OF THE LD. DR REMAINED THAT THE DC RULES NEED TO BE READ IN ITS TOTALITY. AS PER HIM 'BUILT UP AREA' AS DEFINED IN RULE 2.14 OF THE DC RULES IS COVERED AREA IMMEDIATELY AB OVE THE PLINTH LEVEL BY THE BUILDING OR EXTERNAL AREA OF ANY UPPER FLOOR WHICHEVER IS MORE EXCEPT THE AREA COVERED BY RULE 15.4.2. HE SUB MITTED FURTHER THAT BUILDUP AREA HAS BEEN DEFINED IN THE DC RULES FOR THE PURPOSE OF COMPUTING FSI OF THE PROJECT. THUS BALCONY WILL BE PART OF THE BUILD UP AREA BUT WILL BE EXCLUDED FOR FSI PURPOSE. HE SUBMITTED THAT 'BUILT' UP AREA' SHOULD BE CALCULATED AS PER CIVIL ENGINEERING AND ARCHITECT. LD. DR PLACED RELIANCE ON THE DECISION OF THIRD MEMBER BE NCH OF THE TRIBUNAL IN THE CASE OF SANGHVI AND DOSHI ENTERPRISE VS. ITO (2011) 60 DTR (CHENNAI) (TM) 306 AS PER WHICH TERRACE ADJOINING A FL AT WHICH IS ACCESSIBLE ONLY FROM THE FLAT AND IS MEANT FOR THE EXCLUS IVE USE OF THE OCCUPANT OF THE FLAT IS TO BE CONSIDERED AS PART OF BU ILT UP AREA OF 1500 SQ.FT. OF THE FLAT FOR THE PURPOSE OF ASCERTAINING ITS ELIGIBILITY FOR DEDUCTION UNDER SECTION 80 IB (10) OF THE ACT. 13. THE LD. AR ON THE OTHER HAND HAS REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE SUBMITTED THAT THE D EFINITION 'BUILD UP AREA' HAS BEEN INTRODUCED VIDE SUB-SECTION (14) TO SEC TION 80IB W.E.F. 1.4.2005, HENCE IT HAS NO RETROSPECTIVE EFFECT TO APP LY THE SAME IN THE CASE OF ASSESSEE FOR THE A. Y. .2003-04. HE SUBMITTED FURTHER THAT IN ABSENCE OF SUCH DEFINITION IN THE PROVISIONS OF THE IT ACT THE DC RULES AVAILABLE WITH THE PMC WILL BE APPLICABLE. THE LD. AR ALSO REFERRED PAGE NOS. 28 AND 29 OF THE PAPER BOOK I.E. VALUATION REPORT FROM THE AVO I N RESPONSE TO THE REFERENCE MADE IN THIS REGARD BY THE A.O. WHEREIN TH E AVO HAS MENTIONED THAT BALCONIES, STAIRCASE, COMMON LOBBY LIFT ROOM, AS P ER DC RULES ARE NOT TO BE INCLUDED BUT HAS BEEN ACTUALLY INCLUDED WHILE COMPUTING THE BUILT UP ARE OF THE FLAT. HE SUBMITTED THAT IF AREA OF 162 SQ. FT. OF BALCONY IS EXCLUDED THE AREA OF TWO ADJOINING FLATS WOULD BE BELOW 1500 SQ.FT.. THE LD. AR SUBMITTED FURTHER THAT THE A.O. HAS WRONGLY CALCULATE D THE BUILD UP AREA AT 1516 SQ.FT. IN RESPECT OF FLAT NO. 401-A / B WHEREAS T HE AVO HAD ALREADY INCLUDED THE AREA OF TERRACE OF 142 SQ.FT. AND BALCO NY OF 56 SQ.FT. AND ARRIVED AT A TOTAL BUILT UP AREA OF THE SAID FLAT NO . 401-A / 13 ONLY AT 1354 SQ.FT.. HE SUBMITTED THAT THE DIFFERENCE IN INCLUSIONS BETWEEN ASSESSEE'S ARCHITECT AND THE AVO IS ONLY THAT THE DEPARTMENTAL VALUER HAS INCLUDED THE BALCONY AND TERRACE IN THE BUILT UP AREA WHILE THE ASSESSEE'S ARCHITECT EXCLUDED THEM. HE REFERRED PAGE NO. 24 AND 25 OF THE PAPER BOOK I.E. RELEVANT CERTIFICATE OF THE ASSESSEE'S ARCHITECT. THE L D. AR SUBMITTED THAT FOR THE PROJECTS STARTED PRIOR TO 1.4.2005, THE BALC ONY AND THE TERRACE ARE NOT TO BE INCLUDED IN THE BUILT UP AREA. IN SUPPORT HE REFERRED DC RULES AND CITED THE DECISION OF MUMBAI BENCH OF THE TRIBUN AL IN THE CASE OF HAWARE CONSTRUCTIONS PVT. LTD. VS. ITO (2011) 64 DTR ( MUMBAI) (TRIBUNAL) 251. WITHOUT PREJUDICE THE ABOVE SUBMISSION THE LD, AR SUBMITTED FURTHER THAT EVEN THE BUILT UP AREA OF THE COMBINED FLATS IS BELOW 1500 SQ.FT. EACH AND NOWHERE THE AREA HAS EXCEE DED 1500 SQ.FT.. IN THIS REGARD HE REFERRED PAGE NOS. 3,4 AND 29 OF THE P APER BOOK. 9 14. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW AND THE DECISIONS RELIED UPON BY THE PARTIES, WE DO NOT FIND SU BSTANCE IN THE ABOVE CONTENTION OF THE LD DR THAT BUILT UP AREA DEFINED IN THE DC RULES IS NOT APPLICABLE IN THE PRESENT CASE TO VERIFY THE ELIGIBI LITY OF THE CLAIMED DEDUCTION U/S.80IB(10) SINCE IT IS AVAILABLE WITH THE PMC TO COMPUTE FSI ONLY. THE REASON BEING IN OUR VIEW IS THAT IN ABSENCE OF AVAILABILITY OF SUCH DEFINITION IN THE IT ACT DURING THE YEAR UNDER CONSIDERAT ION THE ONLY DEFINITION AVAILABLE WITH THE PMC IS APPLICABLE AS IT IS THE PMC WHICH APPROVES AND EXEMPTION/OCCUPATION THE BUILDING PLAN A ND ISSUE COMMENCEMENT CERTIFICATES. WE DO NOT 'ALSO AGREE WITH THE VIEW OF THE AUTHORITIES BELOW THAT IF TWO UNITS / FLATS APPROVED BY THE LOCAL AUTHORITY AS SEPARATE UNITS ARE UNITED BY A PERSON AS PER HIS OWN SUITABILITY AS INSTRUCTED THE ASSESSEE TO MODIFY THE CONSTRUCTION AS PER HIS SUITABILITY, THE SAME MAYBE IN VIOLATION OF THE L OCAL LAWS AND PUNISHABLE / COMPOUNDABLE THEREUNDER BUT THE SAME IS NOT RELEVANT FOR THE PURPOSE OF COMPUTING THE ELIGIBILITY OF DEDUCTION U/S. 80IB(10) OF THE ACT ESPECIALLY WHEN THE LOCAL AUTHORITY HAS ALRE ADY ISSUED COMPLETION/ OCCUPATION CERTIFICATE THAT THOSE UNITS HA VE BEEN CONSTRUCTED AS PER THE BUILDING PLAN APPROVED. STILL WE FIND THAT T HE ASSESSEE HAS BEEN SUCCESSFULLY DEMONSTRATED THAT EVEN IF TWO FLATS ARE COMBINED, THE BUILT UP AREA AS PER DC RULES DOES NOT EXCEED 1500 SQ.FT. IN THE CASE OF HAWARE CONSTRUCTIONS (P) LTD. VS. ITO (SUPRA) THE MUMBAI BEN CH OF THE TRIBUNAL HAS HELD THAT DEFINITION OF 'BUILT UP AREA' GIVEN IN SUB SECTION (14) (A) OF SECTION 80 IB IS INSERTED BY THE FINANCE (2)ACT 2004 W .E.F. 1.4.2005 AND THEREFORE, THE SAME IS APPLICABLE ONLY IN RESPECT OF T HE PROJECTS APPROVED AFTER 1.4.2005. IN THAT CASE THE ASSESSEE'S PROJECT WAS APPROVED ON 10 TH OCT, 2003 HENCE IT WAS HELD BY THE TRIBUNAL THAT REVE NUE AUTHORITIES WERE NOT JUSTIFIED FN INCLUDING BALCONY / TERRACE IN THE BUIL T UP AREA SO AS TO DENY THE CLAIMED DEDUCTION U/S.80IB(10). THE PUNE DC RULES VIDE RULE 15.4.2 HAS PROVIDED AS TO WHICH AREA IS NOT TO BE INCL UDED WHILE CALCULATING BUILT UP AREA. THE AVO IN ITS REPORT DATED 5.5.2004 (COPY MADE AVAILABLE AT PAGE NO. 28 OF THE PAPER BOOK) HAS ALSO MENTIONED THA T THE BUILT UP AREAS WORKED OUT ARE EXCLUSIVE OF BALCONIES, STAIRCASE, COMMO N LOBBY, LIFT ROOM AS PER DC RULES. UNDER THESE CIRCUMSTANCES WE DO NOT FIN D INFIRMITY IN THE FIRST APPELLATE ORDER ALLOWING THE CLAIMED DEDUCTION ON THE BASIS THAT EVEN IF TWO FLATS EXCLUDING BALCONY ARE COMPUTED THE BUIL T UP AREA WILL NOT EXCEED 1500 SQ.FT. AS PER THE DC RULES APPLICABLE IN PMC. THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS UPHELD. WE ALSO HOLD THAT THE TWO ADJOINING FLATS APPROVED BY THE LOCAL AUTHORITY AS SEP ARATE UNITS AND COMPLETION CERTIFICATE ISSUED, CANNOT BE TREATED AS ON E UNIT TO COMPUTE THE BUILT UP AREA FOR THE PURPOSE OF SECTION 80IB(10) DE DUCTION ONLY BECAUSE THESE TWO FLATS HAVE BEEN MODIFIED AS ONE AS PER CONVENIENCE AND INSTRUCTION OF THE BUYER. WE ORDER ACCORDINGLY. 17.1 FOLLOWING THE ABOVE DECISION, THE TRIBUNAL IN A SSESSEES OWN CASES FOR A.YRS. 2004-05 AND 2005-06 RESPECTIVELY VIDE SEPA RATE ORDERS DATED 23-11-2012 HAS DISMISSED THE APPEALS FILED BY THE REVEN UE. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTI CE THE ORDER OF THE CIT(A) ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT MAESTRO IS UPHELD. 17.2 SO FAR AS THE DEDUCTION U/S.80IB(10) IN RESPECT O F THE PROJECT MISTY MOOR IS CONCERNED, WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2001-02 TO 2003-04 VIDE ITA NO.1146/PN/2010 AND OTH ER CONNECTED APPEALS ORDER DATED 25-06-2012 HAS DECIDED THE ISSUE I N FAVOUR OF THE 10 ASSESSEE. THE RELEVANT OBSERVATION OF THE TRIBUNAL AT P ARA 18 OF THE ORDER READS AS UNDER : 18. WE FIND THAT THE ISSUE INVOLVED REGARDING THE CL AIMED DEDUCTION ON THE 'MISTY MOOR' PROJECT IS AS TO WHETHER KPDL HAD U NDERTAKEN ANY CONSTRUCTION ACTIVITY THEREON IN FURTHERANCE TO COMM ENCEMENT CERTIFICATE ISSUED TO THEM ON 20.8.3998. THERE IS NO DISPUTE ON THE ABOVE FACTS THAT KPDL HAD OBTAINED THE COMMENCEMENT CERTIFICATE FROM THE LOCAL AUTHORITY FOR THE PROJECT ON 20.8.1998 NOR IS THERE ANY DISPUTE ON THIS MATERIAL FACT THAT THE KPDL HAD NOT STARTED DEVELOPMENT AND CONSTRU CTION ON THE PROJECT IN COMMENCEMENT CERTIFICATE ISSUED ON 20.8.1998. THE REQUIREMENT OF THE PROVISIONS LAID DOWN U/S. 80IB(10)( A)(II) THAT THE UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCT. 1998. THUS MERELY BECAUSE THE KPDL HAD OBTAINED INI TIAL COMMENCEMENT CERTIFICATE ON 20.08.1998 IS NOT SUFFI CIENT TO DENY THE CLAIMED DEDUCTION TO THE ASSESSEE WHO ACTUALLY DEVE LOPED AND COMMENCED THE CONSTRUCTION ON THE PROJECT IN FURTHE RANCE TO COMMENCEMENT CERTIFICATE OF THE PROJECT OBTAINED BY IT ON 6.5.1999 FROM LOCAL AUTHORITY. IT IS ALSO AN UNDISPUTED FACT THAT THE KPDL WHO INITIALLY OWNED THE DEVELOPMENT RIGHT ON THE LAND H AD TRANSFERRED THE DEVELOPMENT RIGHT TO THE ASSESSEE FIRM BY WAY O F CAPITAL CONTRIBUTION IN THE CAPITAL ACCOUNT OF KPDL ON 1.10 .98 IN THE ASSESSEE FIRM AND THEREAFTER THE ASSESSEE APPLIED FOR COMMEN CEMENT CERTIFICATE AND THE SAME WAS ISSUED TO IT BY THE LO CAL AUTHORITY ON 6.5.1999. UNDER THESE CIRCUMSTANCES WE DO NOT FIND INFIRMITY IN THE FINDING OF THE LD. CIT(A) THAT THE ASSESSEE IS VERY MUCH ELIGIBLE FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE ACT ON THE P ROJECT AND THE A.O. WAS NOT JUSTIFIED IN DENYING THE CLAIMED DEDUCTION TO THE ASSESSEE ON THE SAID PROJECT. 17.3 FURTHER, THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y . 2004-05 FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR A.Y. 2003-04 UPHELD THE ORDER OF THE CIT(A) ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) AND THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED. SINCE THE TRIBUNAL HAD ALREADY CONSIDERED THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF BOTH THE PROJECTS AND NOTH ING CONTRARY HAS EMERGED DURING THE SEARCH, THEREFORE, RESPECTFULLY FO LLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2003-04 AND 2004-05 WE UPHOLD THE ORDER OF THE CIT(A) ALLOWING THE CLAIM O F DEDUCTION U/S.80IB(10) IN RESPECT OF THE ABOVE 2 PROJECTS. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 9.2 FOLLOWING THE SAME REASONING THESE GROUNDS BY T HE REVENUE ARE DISMISSED. 10. GROUNDS OF APPEAL NO.5 BY THE REVENUE READS AS UNDER : 5. THE LD.CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEDUCTION IN RESPECT OF PROJECT LAPIS LAZULI AND PINK CITY, ALTHO UGH ASSESSEE COULD NOT FURNISH THE COMPLETION CERTIFICATE TILL DATE. 11 10.1 AFTER HEARING BOTH THE SIDES, WE FIND THE AO D ISALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT LAPIS LAZULI AND PINK CITY ON THE GROUND THAT THE ASSESSEE COULD NOT FUR NISH THE COMPLETION CERTIFICATE BEFORE THE STIPULATED TIME. IN APPEAL THE LD.CIT(A) FOLLOWING VARIOUS DECISIONS ALLOWED THE CLAIM OF THE ASSESSEE . 10.2 SO FAR AS THE PROJECT LAPIS LAZULI IS CONCERNE D THE LD.CIT(A) HELD THAT THE ASSESSEE HAD COMPLETED THE ENTIRE PROJECT WITHIN THE STIPULATED TIME LIMIT AND HAD ALSO APPLIED FOR THE COMPLETION CERTIFICATE TO THE PMC. SO FAR AS THE PROJECT PINK CITY IS CONCERNED HE HEL D THAT THE ASSESSEE HAD COMPLETED THE ENTIRE PROJECT WITHIN THE STIPULATED TIME LIMIT AND HAD ALSO APPLIED FOR THE COMPLETION CERTIFICATE TO THE PMC. SO FAR AS THE ISSUE OF NON RECEIPT OF COMPLETION CERTIFICATE WITHIN THE ST IPULATED TIME IN RESPECT OF PROJECT LAPIS LAZULI IS CONCERNED, VIDE ORDER OF EVEN DATE WE HAVE DECIDED THE ISSUE AT PARA NO.27 TO 27.4 OF THE ORDE R IN ITA NO.1505/PN/2013 FOR A.Y. 2004-05 FILED BY THE REVEN UE AND THE GROUND RAISED BY THE REVENUE HAS BEEN DISMISSED BY OBSERVI NG AS UNDER : 27. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH 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 CONSI DERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE GROUND RAISED B Y THE REVENUE RELATES TO THE ALLOWABILITY OF CLAIM OF DEDUCTION U/ S.80IB(10) BY THE CIT(A) IN RESPECT OF THE PROJECTS LAPIS LAZULI AND ROSE PARADE AS ACCORDING TO THE REVENUE THE ASSESSEE COULD NOT FURNISH THE COMPLETION CE RTIFICATE TILL DATE. ON PERUSAL OF THE ORDERS OF THE AO, WE FIND THAT THE AO HAS NOT RAISED THE ISSUE OF NON-COMPLETION OF THE PROJECT ROSE PARADE IN THE ASSESSMENT ORDER PASSED U/S.153A R.W.S.143(3). THEREFORE, THE GRO UND RAISED BY THE REVENUE ON THIS ISSUE BECOMES INFRUCTUOUS. 27.1 SO FAR AS THE PROJECT LAPIS LAZULI IS CONCERNED, WE FIND THE AO RAISED THE ISSUE OF NON COMPLETION OF THE PROJECT FOR THE FIRST TIME IN THE ORDER PASSED U/S.153A R.W.S.143(3). ACCORDING TO THE A O SINCE THE COMMENCEMENT CERTIFICATE FOR THE PROJECT LAPIS LAZUL I WAS OBTAINED ON 24-12-2001, THEREFORE, AS PER THE PROVISIONS OF SECTION 80IB(10) THE PROJECT HAS TO BE COMPLETED ON OR BEFORE 31-03-2008. SINCE THE ASSESSEE HAS ONLY MADE AN APPLICATION TO THE APPROPRIATE AUTH ORITY ON 01-02-2008 12 AND NOT OBTAINED THE COMPLETION CERTIFICATE, THEREF ORE, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10) OF THE I.T. ACT. WE FIND THE LD.CIT(A) ON THE BASIS OF VARIOUS SUBMISSIONS FILED BEFORE HIM HELD TH AT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10) OF THE I.T. ACT SI NCE IT HAD COMPLETED THE ENTIRE PROJECT WITHIN THE SPECIFIED TIME LIMIT A ND HAD ALSO APPLIED FOR THE COMPLETION CERTIFICATE/OCCUPANCY CERTIFICATE TO THE PMC. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE, WE FIND THE PRO JECT LAPIS LAZULI CONSISTS OF 5 BUILDINGS A, B1, B2, C1 AND C2. AS PER TH E SANCTIONED PLAN, C1 AND C2 WERE RESERVED UNDER THE EWS SCHEME AND WERE TO BE HANDED OVER TO THE PMC FREE OF COST. THE FINDING GIVEN BY THE L D.CIT(A) THAT THE CONSTRUCTION OF BUILDINGS RESERVED UNDER EWS SCHEME ALO NG WITH THE CONSTRUCTION OF BUILDINGS A WAS COMPLETED AND THE COMP LETION CERTIFICATE IN RESPECT OF THE SAID BUILDING WERE OBTAINED ON 25- 05-2006 AND THIS FACT OF THE RESERVED BUILDINGS UNDER EWS SCHEME WAS ALSO EARL IER INTIMATED TO THE PMC VIDE LETTER DATED 11-02-2006 SO AS TO TAKE TH E POSSESSION THEREOF REMAINS UNCONTROVERTED. FROM THE VARIOUS DETAILS FURN ISHED IN THE PAPER BOOK AS WELL AS THE DETAILS FILED BEFORE THE LD.CIT(A) WE FIND THE ASSESSEE HAD MADE AN APPLICATION TO THE APPROPRIATE AUTHORIT Y ON 01-02-2008 FOR THE BUILDING B1 AND B2 A COPY OF WHICH IS PLACED AT PAPER BOOK PAGES 122 AND 123. 27.2 THE SUBMISSION OF THE ASSESSEE THAT THE POSSESSION OF TH E FLATS WERE HANDED OVER TO THE BUYERS BEFORE 31-03-2008 AND SEPAR ATE ELECTRICITY BILLS FILED DURING THE COURSE OF APPELLATE PROCEEDINGS SHOW THAT COMMENCEMENT OF ELECTRICITY SUPPLY TO THE FLATS HAD STARTED WELL BE FORE 31-03-2008. THE BUILDINGS IN THE PROJECT A, C1 AND C2 WERE COMPLETED AND THE COMPLETION CERTIFICATE IN RESPECT OF THE SAID BUILDINGS WERE OBTA INED ON 25-05-2006. SIMILARLY, THE ASSESSEE HAS MADE APPLICATION FOR OCCUPA NCY CERTIFICATE FOR BUILDINGS B1 AND B2 ON 01-02-2008, A COPY OF WHICH I S FILED IN THE PAPER BOOK AT PAGE 122 AND THE SAME HAS NOT BEEN DISPUTED BY THE REVENUE. SINCE THE ASSESSEE BY FURNISHING ALL THESE DETAILS HAS SUBST ANTIATED THAT IT HAS COMPLETED THE PROJECT BEFORE 31-03-2008 AND NON RECEIPT OF THE OCCUPANCY CERTIFICATE FROM THE PMC FOR THE BUILDING S B1 AND B2 WAS BEYOND ITS CONTROL, THEREFORE, WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT DEDUCTION U/S.80IB(10) CANN OT BE DENIED MERELY BECAUSE THE PMC HAS NOT ISSUED THE COMPLETION C ERTIFICATE BY 31- 03-2008 FOR NO FAULT ON THE PART OF THE ASSESSEE. THE VARIOUS DECISIONS RELIED ON BY THE LD.CIT(A) ALSO SUPPORTS THE CASE OF TH E ASSESSEE. THE PUNE BENCHES OF THE TRIBUNAL ARE CONSISTENTLY TAKING T HE VIEW THAT IF THE ASSESSEE HAS APPLIED TO THE PMC FOR ISSUANCE OF COMPLETION CERTIFICATE/OCCUPANCY CERTIFICATE AFTER COMPLETING THE PROJECT AND HAS DONE WHATEVER IS POSSIBLE ON ITS PART, THEN IN THAT CASE THE MERE NON-RECEIPT OF THE OCCUPANCY CERTIFICATE/COMPLETION CERTIFICATE BY THE PMC FOR NO FAULT ON THE PART OF THE ASSESSEE CANNOT BE A GROUND TO DENY THE BENEFIT OF DEDUCTION U/S.80IB(10). 27.3 FURTHER, THE HONBLE DELHI HIGH COURT IN THE C ASE OF CIT VS. CHD DEVELOPERS LTD. REPORTED IN 362 ITR 177 HAS HELD THA T HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY PRIOR TO 01-04-2005 ARE ENTITLED TO 100% BENEFIT OF DEDUCTION U/S.80IB(10) EVEN IN ABSENCE OF COMPLETION CERTIFICATE SINCE THE AMENDMENT INSERTED BY THE FINAN CE (NO.2) ACT, 2004 W.E.F., 01-04-2005 WAS PROSPECTIVELY APPLICABLE. IN THIS VIEW OF THE MATTER AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE L D.CIT(A) ON THIS ISSUE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ALL OWING DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECTS LAPIS LAZULI. GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 13 27.4 IDENTICAL GROUND HAS BEEN TAKEN BY THE REVENUE (GROUND OF APPEAL NO.5) IN APPEALS FILED FOR A.YRS 2005-06 TO 2007-08 A ND A.Y. 2009-10. FOLLOWING THE REASONINGS GIVEN ABOVE GROUND OF APPEAL NO.5 IN THE APPEALS FILED BY THE REVENUE FOR THE ABOVE YEARS IS DISMISSED. 10.3 SO FAR AS THE PROJECT PINK CITY IS CONCERNED, WE FIND THE LD.CIT(A) WHILE ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE I.T. ACT HAS OBSERVED AS UNDER : 6.14.6 THE MATERIAL ON RECORD AND SUBMISSIONS OF THE A PPELLANT INDICATE THAT THE AFORESAID PROJECT PINK CITY WHICH COMPRISED OF FIVE BUILDINGS A, B AND B2 BUILDINGS AND C1 AND C2 BUILDIN GS WERE RESERVED UNDER THE EWS SCHEME. THE APPELLANT HAD OBTAINED THE COMPLETION CERTIFICATE WITH RESPECT TO BUILDING A AND THE TWO B UILDINGS C1 AND C2 RESERVED UNDER THE EWS SCHEME ON 25-05-2006. SUBSEQUEN TLY THE APPELLANT COMPLETED THE CONSTRUCTION OF THE OTHER TW O BUILDINGS OF THE PROJECT B1 AND B2 AND MADE AN APPLICATION FOR OBTAI NING THE COMPLETION CERTIFICATE ON 01-02-2008. HOWEVER, THE COMPLETION/ OCCUPANCY CERTIFICATE FOR THE AFORESAID BUILDING B1 AND B2 WAS NOT ISSUED BY THE PMC I.E. THE LOCAL AUTHORITY. IT HAS ALSO BEEN MENTIONED THAT THE PMC HAS NOT REJECTED THE APPLICATION OF THE APPELLANT FOR THE O CCUPANCY CERTIFICATE TILL DATE. MEANWHILE THE APPELLANT HAVING COMPLETED THE PROJECT TRANSFERRED THE POSSESSION OF FLATS TO ITS BUYERS BEFORE 31-03-2008. THE SAMPLE ELECTRICITY BILLS FILED DURING THE COURSE OF APPELLAT E PROCEEDINGS CLEARLY INDICATE THAT THE SUPPLY OF ELECTRICITY HAD ALSO COMM ENCED PRIOR TO 31-03- 2008 WHICH LEADS TO THE INFERENCE THAT THE FLATS WERE TRANSFERRED BY THE APPELLANT TO THE OWNERS OF FLAT BEFORE 31-03-2008. T HE FACTS ON RECORD INDICATE THAT THE APPELLANT COULD NOT HAVE OBTAINED THE OCCUPANCY CERTIFICATE BECAUSE OF THE REASONS BEYOND THEIR CONTRO L. 6.14.7 SO FAR AS THE ISSUE REGARDING THE OCCUPANCY CER TIFICATE BEING DIFFERENT FROM THE COMPLETION CERTIFICATE AND THAT AS PER THE PROVISIONS OF THE ACT, THE DEDUCTION U/S 80IB(10) IS ALLOWABLE ONLY WHEN THE COMPLETION CERTIFICATE IS OBTAINED WITHIN THE STIPULATED TIME RA ISED BY THE A.O. DURING THE REMAND PROCEEDINGS IS CONCERNED, IT WOULD BE APPR OPRIATE AND SIGNIFICANT TO DISCUSS THE MANNER IN WHICH THE CERTIFIC ATE OF OCCUPANCY OF THE COMPLETION CERTIFICATE IS ISSUED BY A LOCAL AUTHO RITY. IT IS A MATTER OF GENERAL KNOWLEDGE THAT THE BUILDINGS (OR ALL TYPES OF CONSTRUCTION) IN ANY AREA ARE GOVERNED BY LOCAL DEVELOPMENT RULES. INFACT LOCAL AUTHORITY IS THE SUPREME AUTHORITY FOR THE PURPOSE OF SANCTION OF DEVEL OPMENT PLAN, MONITOR CONSTRUCTION AND ISSUE COMPLETION CERTIFICATES/ OCCUPANCY CERTIFICATE. ALL THE BUILDINGS WITHIN PUNE MUNICIPAL LIMITS ARE GOVERNED BY DEVELOPMENT CONTROL RULES (DC RULES) SANCTIONED UNDER GOVERNMENT NOTIFICATION URBAN DEVELOPMENT DEPARTMENT NO. TPS-1 884/1377/CR- 220/84/III UD-7 DATED 05-01-1987. THE RELEVANT RULE S ARE DISCUSSED BELOW: - RULE 5 OF D.C. RULES PROVIDE THAT NO PERSON SHALL CARRY OUT ANY DEVELOPMENT, ERECT, RE-ERECT OR MAKE ALTERATION OR DEMOLISH ANY BUILDING WITHOUT FIRST OBTAINING A SEPARATE BUILDING PERMISSION/ COMMENCEMENT CERTIFICATE FOR EACH SUCH DEVELOPMENT WORK. 14 RULE6 PROVIDES FOR OBTAINING BUILDING PERMISSION/COMMENCEMEN T CERTIFICATE. RULE 7 PROVIDES FOR PROCEDURE DURING CONSTRUCTION AS PER RULE 7.2 DEVELOPMENT OF BUILDING MUST COMMENCE WITHIN ONE YE AR FROM THE DATE OF ISSUE. THE OWNERS HAVE TO GIVE NOTICE IN 'APPENDIX - F TO AUTHORITY (PMC) REGARDING INTENTION TO START WORK ON THE BUILDING SITE. RULE 7.4 PROVIDES FOR INSPECTION OF WORK UPTO PLINTH LEVEL. F OR THIS PURPOSE, DEVELOPER/OWNERS HAVE TO GIVE NOTICE IN 'APP ENDIX G' TO THE AUTHORITY. THE APPROVAL OF COMPLETION OF WORK UPTO PLINTH LEVEL IS GRANTED BY PMC IN 'APPENDIX-H'. RULE 7.6 PROVIDES FOR SUBMISSION OF COMPLETION CERTIFIC ATE THROUGH THE LICENSED ARCHITECT IN APPENDIX - J. RULE 7.7 PROVIDES FOR ISSUE/REFUSAL TO ISSUE OCCUPANCY CERTIFICAT E. THE PROCEDURE PRESCRIBED THEREIN IS THAT THE AUTHORITY ON RECEIPT OF COMPLETION CERTIFICATE (APPENDIX J AS PER RULE 7.6) SHALL INSPECT THE WORK AND SHALL EITHER ISSUE OR REFUSE AN OCCUPANCY CERT IFICATE. THE OCCUPANCY CERTIFICATE IS ISSUED IN APPENDIX -K. RULE 7.7.1 ALSO PROVIDES FOR ISSUE OF PART OCCUPANCY CERTIFICATE OF A BUILDING OR PART THEREOF FOR READY REFERENCE THE RULE 7.6 AND 7.7 OF DC RULE S OF PMC ARE BEING REPRODUCED BELOW: '7.6 COMPLETION CERTIFICATE - THE OWNER THROUGH THE LICENSED ARCHITECT, ENGINEER, STRUCTURAL ENGINEER, AS THE CASE MAY BE WHO HAS SUPERVISED THE CONSTRUCTION, SHALL GIVE NOTICE TO THE AUTHORITY REGARDING COMPLETION OF WORK DESCRIBED IN THE BUILDING PERMISSION. THE COMPLETION CERTIFICATE SHALL BE SUBMITTED IN THE PRESCRIBED FORM BY FOUR SETS OF COMPLETION PLAN. ONE OF THE SETS, DULY CER TIFIED AS COMPLETION PLAN SHALL BE RETURNED TO THE OWNER ALONG WITH THE ISSUE OF FULL OCCUPANCY CERTIFICATE (SEE RULE NO. 7.7)' '7.7 OCCUPANCY CERTIFICATE - THE AUTHORITY, ON RECEIPT OF THE COMPLETION CERTIFICATE, SHALL INSPECT THE WORK AND SAN CTION OR REFUSE AN OCCUPANCY CERTIFICATE, IN THE PROFORMA GIVEN IN APP ENDIX K WITHIN 21 DAYS FROM THE DATE OF RECEIPT OF COMPLETION CERTIFIC ATE, AFTER WHICH PERIOD IT SHALL BE DEEMED TO HAVE BEEN APPROVED BY T HE AUTHORITY FOR OCCUPATION PROVIDED THE BUILDING HAS BEEN CONSTRUCTED AS PER THE SANCTIONED PLANS. WHERE THE OCCUPANCY CERTIFICATE IS REFUSED, THE VARIOUS REASONS SHALL BE QUOTED FOR REJECTION, AT THE F IRST INSTANCE ITSELF.' RULE 8 PROVIDES FOR CARRYING OUT THE INSPECTION OF WORK AT VARIOUS STAGES TO ASCERTAIN WHETHER THE WORK IS PROCEEDING AS PE R THE PROVISIONS OF RULES AND SANCTIONED PLAN. AS IT IS EVIDENT FROM VERY READING OF THE ABOVE RULES, THE OWNER THROUGH THE LICENSED ARCHITECT, ENGINEER, AND STRUCTURAL ENGI NEER AS THE CASE MAY BE, WHO HAS SUPERVISED THE CONSTRUCTION GIVES NOTICE TO THE AUTHORITY REGARDING COMPLETION OF WORK DESCRIBED IN THE BUILDI NG PERMISSION. THE COMPLETION CERTIFICATE IS SUBMITTED N THE PRESCRIBED F ORM BY CONCERNED 15 ARCHITECT WITH 4 SETS OF COMPLETION PLAN. ONE OF THE SETS, DULY CERTIFIED AS COMPLETION PLAN IS RETURNED TO THE OWNER ALONG WIT H THE ISSUE OF FULL OCCUPANCY CERTIFICATE. 6.14.8 THEREFORE, THE COMPLETION / OCCUPANCY CERTIF ICATE IN RESPECT OF A HOUSING PROJECT HAS TO BE ISSUED BY THE LOCAL AUTHORIT Y ONLY AS ENVISAGED BY THE PROVISION OF SEC. 80IB(10) OF THE IT. ACT, 1961. THERE IS NO AMBIGUITY IN THE LANGUAGE OF THE EXPLANATION WHICH WOULD LEAD TO ANY OTHER INTERPRETATION. EVEN, THERE WAS NO PROVISION UNDER TH E PMC RULES FOR ISSUING OF THE COMPLETION CERTIFICATE DIRECTLY BY THE PMC ON THE BASIS OF AN APPLICATION ALONG WITH THE CERTIFICATE OF AN ARCHIT ECT REGARDING COMPLETION OF THE PROJECT, THE PMC OR THE LOCAL AUTHORITY ISSUES AN 'OCCUPANCY CERTIFICATE'. THEREFORE, FOR THE PURPOSES OF SECTION 80IB(10)(A) R.W.EXPLANATION THE OCCUPANCY CERTIFICATE WOULD BE RELEVANT TO DETERMINE THE FULFILLMENT OF THE CONDITION GIVEN IN THE SECTI ON. IN VIEW OF THE ABOVE FACTS, THE CONTENTION RAISED BY THE A.O. THAT APPLICA TION FOR COMPLETION CERTIFICATE WAS NOT MADE AND HENCE THE CLAIM OF DEDU CTION U/S 80IB(10) WAS NOT ALLOWABLE TO THE ASSESSEE IS NOT TENABLE AND JUSTI FIED. 6.14.9 THE CONTENTION OF THE APPELLANT THAT THE WIT HHOLDING OF THE CERTIFICATE OF OCCUPANCY WAS BEYOND THEIR CONTROL IS PRIMA FACIE CORRECT AND HENCE IT CANNOT BE ATTRIBUTABLE TO THE FAULT OF THE APPELLANT. IN THE CASE OF M/S RUNWAL MULTIHOUSING PVT. LTD VS ACIT (SUPRA) ON IDENTICAL FACT THE PUNE ITAT ALLOWED THE CLAIM OF DEDUCTION. THE PUNE ITAT OBSERVED THAT THE CONTENTION OF THE ASSESSEE THAT THE APPLICATION FOR COMPLETION WAS NOT REJECTED BY THE LOCAL AUTHORITY TILL DATE COULD NOT BE CONTROVERTED BY THE REVENUE AND SEEK THE CONTENTION THAT THE APPELLANT H AD TRANSFERRED THE POSSESSION OF THE FLATS TO THE RESPECTIVE OWNERS AND THE E LECTRICITY METERS WERE ALSO IN THE NAME OF FLAT OWNERS PRIOR TO 31-03-2 009 WAS NOT DISPUTED BY THE REVENUE. THE PUNE ITAT WHILE DECIDING THE CA SE HAS RELIED UPON THE DECISIONS OF THE GUJARAT HIGH COURT IN THE CASE OF CIT VS TARNETAR CORPORATION, HINDUSTAN SAMUHA AWAS LTD. VS ITO, M/S SAT ISH BORA & ASSOCIATES, WHICH HAS HELD AS UNDER: 'CIT VS TARNETAR CORPORATION : WE HAVE PERUSED THE DETAILED DISCUSSION OF THE CIT(APPE ALS) AS WELL AS THE TRIBUNAL ON THE ISSUE. IN PARTICULAR, THE TRIBUNA L NOTED THAT THE CONSTRUCTION WAS COMPLETED IN 2006. APPLICATION FOR B U PERMISSION TO THE MUNICIPAL AUTHORITIES WAS FILED ON 15-02-2006 WHI CH WAS REJECTED ON 1-07-06. SEVERAL RESIDENTIAL UNITS WERE OCCUPIED SI NCE THE SAME WAS DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HAD DONE WI THOUT NECESSARY PERMISSION. THE ASSESSEE HAD ALSO PAID PENALTY AND GOT SUCH OCCUPATION REGULARISED. SEVERAL TENEMENTS WERE SOLD LO NG BEFORE THE LAST DATE. IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE ASSESSE E HAD COMPLETED THE CONSTRUCTION WELL BEFORE 31ST MARCH 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRUE THAT FORMALLY BU PERMISSION WAS NOT GRANTE D BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHO RITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MAND ATORY. IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIEW THAT MINOR DEVIATION TH EREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WAS BEIN G MADE AVAILABLE. 16 IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE ASSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE THE FINAL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT RE JECTED ON THE GROUND WHAT CONSTRUCTION WAS NOT COMPLETED, BUT THE SO ME OTHER TECHNICAL GROUND. IN THAT VIEW OF THE MATTER, GRANT ING BENEFIT OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL.' 'HINDUSTAN SAMUHA AWAS LTD, VS ITO: 7. WE HAVE CONSIDERED THE ABOVE VIEW POINTS OF THE PA RTIES IN DISPUTED. WE FIND THAT IT IS A FACT THAT THE ASSESSEE THROUGH ITS ARCHITECT HAD FIFED APPLICATION WITH THE AMC FOR ISSUANCE OF OCCUPANCY CE RTIFICATE ON 25.3.2008. REQUISITE FEE WAS ALSO PAID BY THE ASSESSEE IN THIS REGARD. AMC DID NOT RAISE ANY OBJECTION TO THE SAID COMPLETIO N CERTIFICATE OF THE ARCHITECT. THE OCCUPANCY CERTIFICATE DT. 10.10.2008 HAS BEEN ISSUED BY THE AMC ONLY ON THE BASIS OF THE SAID APPLICATION DT. 25.3.2008. IT IS ALSO AN UNDISPUTED FACT THAT ISSUANCE OF OCCUPANCY CERTIFIC ATE IS THE PREROGATIVE OF THE LOCAL AUTHORITY I.E. AMC AND IN THIS REGARD, THE ASSESSEE HAS NO CONTROL AND IT IS BEYOND THE POWER OF THE ASSESSEE TO MAKE THE AMC ISSUE THE SAID COMPLETION/OCCUPANCY CERTI FICATE BEFORE 31.3.2008. WHAT WAS UNDER THE POWER AND CONTROL OF THE ASSESSEE WAS ONLY TO MOVE THE AMC FOR COMPLETION CERTIFICATE FUL FILLING ALL THE REQUIREMENTS WITH THE AMC FOR ISSUANCE OF OCCUPANCY CE RTIFICATE, WHICH THE ASSESSEE HAS DONE IN THE PRESENT CASE. THUS, THE DELAY IN ISSUING THE OCCUPANCY CERTIFICATE CANNOT BE ATTRIBUTE D ON THE PART OF THE ASSESSEE TO DENY THE CLAIMED DEDUCTION U/S 80IB(10) OF T HE ACT ON THE BASIS THAT THE PROJECT WAS NOT COMPLETED BY 31-3-2008, ESPECIALLY WHEN THERE IS NO OBJECTION RAISED BY THE AMC REGARDIN G DEVIATION IN THE CONSTRUCTION OF THE PROJECT APPROVED BY THE AMC. ' 'M/S SATISH BORA & ASSOCIATES: IN THE CASE OF PMC, THE COMPLETION CERTIFICATE IN PR ESCRIBED FORM ISSUED BY THE LICENSED ARCHITECT ETC. WHO HAS SUPERVISED THE CONSTRUCTION IS FURNISHED WITH FOUR SETS OF COMPLETION PLAN UNDER RULE 7.6 OF THE DC RULES OF THE PMC. THEREAFTER PMC IS REQUIRED TO RETUR N ONE OF THE SETS DULY CERTIFIED AS COMPLETION PLAN TO THE OWNER ALON G WITH THE ISSUE OF FULL OCCUPANCY CERTIFICATE AFTER INSPECTION OF THE W ORK UNDER RULE 7.7 OF THE DC RULES. SINCE EXPLANATION (II) TO SECTION 80IB (10)(A) OF THE I. T. ACT REQUIRES COMPLETION CERTIFICATE ISSUED BY THE LOCA L AUTHORITY TO BE TAKEN AS THE DATE OF COMPLETION OF THE CONSTRUCTION, A GENERAL UNDERSTANDING IN OUR VIEW IS THAT A COMPLETION CERTIF ICATE WHICH IS ISSUED BY THE LOCAL AUTHORITY AFTER CONDUCTING INSPECT IONS OF CONSTRUCTION BY IT. IN CASE OF PMC, IT IS ONLY OCCUPAN CY CERTIFICATE WHICH IS ISSUED ALONGWITH CERTIFIED COMPLETION PLAN AFTER IN SPECTION OF THE CONSTRUCTION BY IT, WE HAVE TREATED THE DATE OF ISSUAN CE OF SUCH OCCUPANCY CERTIFICATE ALONGWITH CERTIFIED COMPLETIO N PLAN AS THE DATE OF COMPLETION CERTIFICATE OF THE CONSTRUCTION FOR TH E REQUIREMENT OF EXPLANATION (II) TO SECTION 80IB(10)(A) OF THE I.T. ACT. SINCE INFACT PMC DO NOT ISSUE OCCUPANCY CERTIFICATE G ENERALLY IN TIME AND WITH THIS UNDERSTANDING THE LEGISLATURE HAVE ALSO I NTRODUCED A DEEMING PROVISION OF - 21 DAYS TO PUT CONSTRAINT UPON PMC, WE AFTER DETAILED DELIBERATION IN PRECEDING PARAGRAPHS HAVE C OME TO A CONCLUSION THAT IN CASE OF SMALL OBJECTIONS OF PMC RAISE D AFTER EXPIRY OF DEEMING PERIOD OF 21 DAYS UNDER RULE 7.7 OF DC RULES UNDER PMC, THE DATE WHEN THE APPLICANT ACQUIRED DEEMING SANCTION WI LL BE TREATED AS THE DATE OF COMPLETION (OCCUPANCY) CERTIFICATE TO M EET OUT THE REQUIREMENT OF EXPLANATION (II) TO SECTION 80IB(10) (A) OF THE ACT. WE HAVE ALREADY DISCUSSED HEREINABOVE WHAT WOULD BE THE SMALL 17 OBJECTIONS. IN BRIEF THOSE OBJECTIONS WHICH DO NOT AF FECT THE MAIN PROJECT AND ARE GENERALLY TEMPORARY CONSTRUCTIONS. WE THUS WHILE SETTING ASIDE ORDERS OF THE AUTHORITIES BE LOW DIRECT THE A.O. TO ALLOW THE CLAIMED DEDUCTION U/S. 80IB(10) OF THE I.T. ACT 1961 IN THE ASSESSMENT YEARS UNDER CONSIDERATION TREATING THE REQ UIRED DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT AS T HE DATE WHEN ABOVE DISCUSSED DEEMING PROVISION PERIOD OF 21 DAYS EXPI RED I.E. 20.11.20.' AFTER REPRODUCING THE EXTRACT OF THE RATIO IN THE A BOVE CASES THE ITAT, PUNE IN THE CASE OF RUNWAL MULTIHOUSING PVT. LTD. HEL D AS UNDER: 'IN VIEW OF THE ABOVE DECISIONS WE ARE OF THE CONSIDER ED OPINION THAT SINCE THE ASSESSEE HAS DONE WHATEVER POSSIBLE ON HIS PART, I.E. DULY APPLIED TO PMC FOR ISSUE OF COMPLETION CERTIFICATE, H ANDED OVER POSSESSION OF THE FLATS/ROW HOUSES TO THE RESPECTIVE BUYERS, PMC HAS STARTED LEVYING MUNICIPAL TAXES AND ELECTRICITY BILLS PAID BY RESPECTIVE OWNERS, THEREFORE, DEDUCTION U/S.80IB(10) UNDER THE F ACTS AND CIRCUMSTANCES OF THE CASE CANNOT BE DENIED TO THE ASSESSE E FOR NON- RECEIPT OF COMPLETION CERTIFICATE FROM PMC BEFORE 3 1-03-2008 WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE.' THUS, IN VIEW OF THE RATIO OF THE DECISION OF PUNE IT AT AND THE FACT AS BROUGHT ON RECORD THE ISSUES AND FACTS IN THE PRESENT CA SE ARE ALSO IDENTICAL TO THE CASES RELIED UPON BY THE APPELLANT. THE DISALLOWANCE OF DEDUCTION U/S 80IB(10) DO NOT APPEAR T BE JUSTIFIED ON ACCOUNT OF ISSUE OF COMPLETION AND HENCE THE SAME CANNOT BE UPHELD. IN VIEW OF THE ABOVE, THE ADDITIONAL GROUND RAISED BY THE APPELLANT IN RESPECT OF PINK CITY IS LIABLE TO BE ALLOWED. 10.4 IN THE PRECEDING PARAGRAPHS WE HAVE ALLOWED TH E CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT LA PIS LAZULI. FACTS BEING SIMILAR IN THE CASE OF PROJECT PINK CITY, THEREFORE , FOLLOWING THE SAME REASONINGS AND IN ABSENCE OF ANY DISTINGUISHABLE FE ATURES BROUGHT ON RECORD BY THE LD. DEPARTMENTAL REPRESENTATIVE AGAIN ST THE ORDER OF CIT(A) WE FIND NO INFIRMITY IN HIS ORDER. ACCORDIN GLY, THE SAME IS UPHELD AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. 11. GROUNDS OF APPEAL NO.6 BY THE REVENUE READS AS UNDER : 6. THE LD.CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEDUCTION IN RESPECT OF PROJECT LAPIS LAZULI, ROSE PARADE, PINK CIT Y AND MAESTRO, ALTHOUGH THE BUILT UP AREA OF SOME RESIDENTIAL UNITS E XCEEDS 1500 SQ.FT. AND THE SAME IS CONTRAVENTION OF SECTION 80IB(10)(C) R.W.S. 80IB(14)(A) OF THE ACT, WHICH IS APPLICABLE FROM A.Y. 2005-06. 18 11.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ABOV E GROUND IS IDENTICAL TO GROUND OF APPEAL NO.6 IN ITA NO.1505/PN/2013 FOR A.Y. 2004-05 FILED BY THE REVENUE. VIDE OUR ORDER OF EVEN DATE WE HA VE ALREADY DECIDED THE ISSUE AT PARA NO.28.1 TO 31 OF THE ORDER AND THE GR OUND RAISED BY THE REVENUE HAS BEEN DISMISSED BY OBSERVING AS UNDER : 28.1 AFTER HEARING BOTH THE SIDES, WE FIND THE AO HE LD THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10) SINCE THE BU ILT UP AREA OF SOME OF THE UNITS IN THE PROJECT ROSE PARADE, LAPIS LAZULI AND MAESTRO ARE MORE THAN 1500 SW.FT. IN APPEAL THE LD.CIT(A) FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NOS. 156/PN/2011 AND 172/PN/2011 ORDER DATED 23-11-2012 ALLOWED PROPORTI ONATE DEDUCTION IN RESPECT OF THE ELIGIBLE UNITS WHERE THE AREA OF EA CH FLAT IS 1500 SQ.FT. 29. SO FAR AS THE PROJECT ROSE PARADE IS CONCERNED, WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NO.156/PN/2011 FILED BY T HE ASSESSEE AND ITA NO.172/PN/2011 FILED BY THE REVENUE FOR A.Y. 20 04-05 ORDER DATED 23-11-2012 AT PARA 15.1 HAS OBSERVED AS UNDER : 15.1 SO FAR AS THE ALLOWABILITY OF CLAIM OF DEDUCTI ON U/S.80IB(10) IN RESPECT OF THE PROJECT ROSE PARADE IS CONCERNED, WE FIND THE DVO IN RESPONSE TO THE REFERENCE MADE BY THE AO HAS SUBMITTED HIS REPORT GIVING THE BUILT UP AREA OF EACH FLAT IN THE PROJECT ROSE PARADE. WE FIND THE LEARNED CIT(A) AFTER CONSIDERING THE REPORT OF THE D VO HAS GIVEN A FACTUAL FINDING THAT THE BUILT UP AREA OF NONE OF THE FLATS IN THE PROJECT ROSE PARADE EXCEEDS 1500 SQ.FT. THE SUBMISSION OF THE LEA RNED COUNSEL FOR THE ASSESSEE THAT EVEN AFTER COMBINING THE 2 ADJACENT FLATS THE BUILT UP AREA OF NONE OF THE FLATS AS DETERMINED BY THE DVO EXCEEDS 150 0 SQ.FT. COULD NOT BE CONTROVERTED BY THE LEARNED DR. UNDER THESE CIR CUMSTANCES, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ALLOWING THE C LAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT ROSE PARADE. SIMILARLY, THE TRIBUNAL FOLLOWING THE ABOVE DECISION IN THE CROSS APPEALS VIDE ITA NOS. 1536/PN/2011 AND ITA NO.1556/PN/2011 O RDER DATED 23- 11-2012 FOR A.Y. 2005-06 DISMISSED THE APPEAL FILED BY THE REVENUE WHERE THE CIT(A) HAD ALLOWED THE CLAIM OF DEDUCTION U/S.80 IB(10) IN RESPECT OF THE TWO PROJECTS MAESTRO AND ROSE PARADE. 30. SO FAR AS THE PROJECT LAPIS LAZULI IS CONCERNED, W E FIND THE TRIBUNAL IN ASSESSEES OWN CASE IN THE APPEAL FILED BY THE ASSESSEE AND THE REVENUE VIDE ITA NOS. 156 AND 172/PN/2011 ORDER DATED 23-11- 2012 FOR A.Y.2004-05 HAS ALLOWED PROPORTIONATE DEDUCTION TO THE ASSESSEE IN RESPECT OF THE UNITS BELOW 1500 SQ.FT. IN THE PROJECT LAPIS LAZULI. THE RELEVANT OBSERVATION OF THE TRIBUNAL FROM PARA 15.3 AND ONWARDS READ AS UNDER : 15.3 SO FAR AS THE APPEAL OF THE ASSESSEE IS CONCERNED R EQUESTING PRO- RATA DEDUCTION IN CASE OF THE 76 FLATS OUT OF 214 FLA TS WHICH HAVE BUILT UP AREA OF LESS THAN 1500 ST.FT. WE FIND THE TRIBUNAL IN THE CASE OF D.S. KULKARNI DEVELOPERS LTD. (SUPRA) FOLLOWING VARIOUS DECISIONS HA S HELD THAT ASSESSEE IS ENTITLED TO PROPORTIONATE DEDUCTION OF THE PROFIT S IN RESPECT OF FLATS 19 WHICH HAVE BUILT UP AREA OF LESS THAN 1500 SQ.FT. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL READ AS UNDER : 20. IN THIS BACKGROUND, THE ALTERNATIVE PLEA OF THE ASSESSEE SPRINGS UP. THE PLEA IS THAT THE DEDUCTION U/S. 80IB(10) BE DENI ED ONLY WITH RESPECT TO THE UNITS WHICH DO NOT CONFORM TO THE CONDITION CONT AINED IN SEC. 80IB (10)(C ) AND FOR THE BALANCE ELIGIBLE RESIDENTIAL UN ITS, THE DEDUCTION SHOULD BE ALLOWED. THE REVENUE HAS OPPOSED THE SAID PLEA ON THE GROUND THAT THE ASSESSEE IS NOT ENTITLED TO A PROPORTIONATE DEDUCTI ON U/S. 80IB(10) OF THE ACT. 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 UP HELD THE PLEA OF THE ASSESSEE FOR A PROPORTIONATE DEDUCTION U/S. 80IB(10) OF THE ACT WHERE SOME OF THE RESIDENTIAL UNITS IN THE PROJECT VIOLATED THE CONDITION CONTAINED IN SEC. 80IB(10)(C ) OF THE ACT. THE MUM BAI 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 37 1 (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 LOSE THE EXEMPTION U/S. 80IB(10) IN ENTIRETY WHERE SOME OF THE RESIDENTIAL UNITS WINGS HA D A BUILT- UP AREA IN EXCESS OF THE LIMIT PRESCRIBED IN CLAUSE (C ) OF SE C. 80IB(10) BUT, IT WOULD BE ENTITLED TO PROPORTIONATE DEDUCTION U/S. 80 IB(10) OF THE ACT WITH REGARD TO THE PROFITS EARNED ON THE ELIGIBLE UN ITS. PARTICULARLY, THE TRIBUNAL ALSO CONSIDERED THE DECISION OF THE HONBLE B OMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) AND HELD THAT THE SAME DOES NOT ENVISAGE DENIAL OF PROPORTIONATE DEDUCTION IN SUCH CI RCUMSTANCES. THE RELEVANT DISCUSSION, AS CONTAINED IN PARAGRAPHS 8 & 9 OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S EKTA HOUSING PVT. LTD. RE ADS AS UNDER : VIII) WE NOW EXAMINE THE APPLICABILITY OF THE DECI SION OF THE HONBLE BOMBAY HIGH COURT IN BRAHMA ASSOCIATES (SUPRA) TO THE F ACTS OF THIS CASE. ON A CAREFUL READING OF THIS JUDGMENT, WE FIND THAT NOWHERE IT IS STATED THAT PROPORTIONATE DEDUCTION SHOULD NOT BE ALLOWED, IN CASE CERTAIN RESIDENTIAL UNITS HAD BUILT UP AREA IN EXCESS OF PRESC RIBED LIMIT OF 1,000 SQ.FT. IN FACT, THIS ISSUE WAS NOT BEFORE THE HONBLE J URISDICTIONAL HIGH COURT. THE QUESTIONS BEFORE THE HONBLE JURISDICTION AL HIGH COURT WERE DIFFERENT AND, HENCE THE JUDGMENT CANNOT BE SAID TO BE ON THIS ISSUE. THE ONLY ISSUE BEFORE THE HIGH COURT IS WHEN THERE IS A COM MERCIAL ELEMENT IN A RESIDENTIAL PROJECT, WILL BE ASSESSEE BE DENIED THE E NTIRE EXEMPTION. IN THIS CASE, THE HONBLE HIGH COURT HAS OBSERVED THAT WH EN THE LOCAL AUTHORITY APPROVED A PLAN AS A HOUSING PROJECT OR A R ESIDENTIAL CUM COMMERCIAL PROJECT, THE ASSESSEE WOULD BE ENTITLED TO C LAIM FOR DEDUCTION UNDER SECTION 80IB(10) EVEN IF THE PROJECT HAD COMME RCIAL ELEMENT IN EXCESS OF 10%. AT PARAS-27 AND 28, THE COURT OBSERVED AS FOLLOWS :- 27. THE QUESTION THEN TO BE CONSIDERED IS, WHETHER TH E SPECIAL BENCH OF THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE PROJEC TS HAVING COMMERCIAL AREA UPTO 10% OF THE BUILT-UP AREA OF THE PLOT ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) ON THE ENTIRE PROJECT UPTO 1. 4.2005. ONCE THE BASIC ARGUMENT OF THE REVENUE THAT THE HOUSING PROJE CTS WITH COMMERCIAL USER ARE NOT ENTITLED TO SECTION 80IB(10) DEDUCTION I S REJECTED, THEN IN THE ABSENCE OF ANY RESTRICTION IMPOSED UNDER THE ACT, IT WAS NOT OPEN TO THE 20 TRIBUNAL TO HOLD THAT THE PROJECTS APPROVED BY THE L OCAL AUTHORITIES HAVING RESIDENTIAL BUILDINGS WITH COMMERCIAL USER UPTO 10% O F THE PLOT AREA WOULD ALONE BE ENTITLED TO DEDUCTION UNDER SECTION 8 0IB(10). AS NOTED EARLIER, RESTRICTION REGARDING COMMERCIAL USER HAS BEE N IMPOSED FOR THE FIRST TIME BY INTRODUCING CLAUSE (D) TO SECTION 80IB( 10) WITH EFFECT FROM 1.4.2005. THEREFORE, IT WAS NOT OPEN TO THE TRIBUNA L 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 80 IB(10) DEDUCTION IN RESPECT OF 15 RESIDENTIAL BUILDINGS ON THE GROUND THA T THE PROFITS FROM THESE EXCLUSIVELY RESIDENTIAL BUILDINGS COULD BE DETERM INED ON STAND ALONG BASIS. IN OUR OPINION, THAT WOULD NOT BE PROPER, BEC AUSE SECTION 80IB(10) ALLOWS DEDUCTION TO THE ENTIRE PROJECT APPROVED BY T HE LOCAL AUTHORITY AND NOT TO A PART OF THE PROJECT. IF THE CONDITIONS SET OUT IN SECTION 80IB(10) ARE SATISFIED, THEN DEDUCTION IS ALLOWABLE ON THE ENTI RE PROJECT APPROVED BY THE LOCAL AUTHORITY AND THERE IS NO QUESTION OF ALLOW ING 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 E NTITLED TO SECTION 80IB(10) DEDUCTION ON THE ENTIRE PROJECT APP ROVED BY THE LOCAL AUTHORITY. HOWEVER, THE ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRIBUNAL IN RESTRICTING THE DEDUCTION TO A PART OF THE PROJECT. THEREFORE, WHILE HOLDING THAT IN LAW, THE ASSESSEE WAS ENTITLED TO SECTION 80IB(10) DEDUCTION ON THE PROFITS OF THE ENTIRE PROJECT, IN T HE FACTS OF THE PRESENT CASE, SINCE THE ASSESSEE HAS NOT CHALLENGED THE DECISION O F THE TRIBUNAL, WE ARE NOT INCLINED TO DISTURB TO DISTURB THE DECISION OF THE TRIBUNAL IN RESTRICTING THE SECTION 80IB(10) DEDUCTION ONLY IN R ESPECT OF THE PROFITS DERIVED FROM 15 RESIDENTIAL BUILDINGS. IX) THUS, IT COULD BE SEEN THAT THE HONBLE HIGH CO URT DO NOT APPROVE THE FINDINGS OF THE TRIBUNAL THAT A RESIDENTIAL BUILD ING WITH COMMERCIAL USER UP TO 10% OF THE PLOT AREA WOULD ALONE BE ENTIT LED TO DEDUCTION UNDER SECTION 80IB(10). THE ISSUE THAT, IN CASE WHERE CERTAI N RESIDENTIAL UNITS ARE OF A BUILT UP AREA IN EXCESS OF THE PRESCRIBED LIM IT OF 1,000 SQ.FT. IN RESIDENTIAL PROJECT, THIS WOULD RESULT IN THE ENTIRE E XEMPTION BEING LOST, OR WHETHER THE ASSESSEE WOULD BE ENTITLED TO A PROPORTIONA TE DEDUCTION WAS NOT BEFORE THE HIGH COURT. THUS, IN OUR OPINION, TH E DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN BRAHMA ASSOCIATES (SUPRA) DOES NOT COME TO THE RESCUE OF THE REVENUE. 22. FOLLOWING THE AFORESAID PRECEDENT, WE, THEREFORE , HOLD THAT MERELY BECAUSE THE ASSESSEE HAS VIOLATED THE CONDITION U/S. 80IB (10)(C ) IN RELATION TO THE FLATS ON THE 11 TH FLOOR, THE DEDUCTION U/S. 80IB(10) CANNOT BE DENIED IN ITS ENTIRETY, BUT, THE DENIAL SHALL BE LIMITED TO THE PROFITS IN RESPECT OF THE FLATS ON THE 11 TH FLOOR ALONE. FOR THE BALANCE OF THE RESIDENTIAL UNITS, THE PLEA OF THE ASSESSEE FOR DEDUCTIO N U/S. 80IB(10) OF THE ACT IS JUSTIFIED, AND THE ASSESSEE SUCCEEDS ON THIS ASPEC T. 16. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUN AL IN THE CASE OF D.S. KULKARNI DEVELOPERS LTD. (SUPRA) WE HOLD THAT T HE ASSESSEE IS ENTITLED TO PROPORTIONATE DEDUCTION IN RESPECT OF THE FLATS WH ICH HAVE BUILT UP AREA OF LESS THAN 1500 SQ.FT. WE ACCORDINGLY REMIT BACK TH E MATTER TO THE FILE OF THE AO WITH THE DIRECTION TO CALCULATE THE PROPORTI ONATE DEDUCTION AND ALLOW THE DEDUCTION U/S.80IB(10) ON SUCH PROPORTIONAT E PROFIT. NEEDLESS TO SAY, THE AO SHALL GIVE DUE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE WHILE DETERMINING SUCH PROPORTIONATE DEDUCTION. 21 17. SO FAR AS THE DECISIONS RELIED ON BY THE LEARNED D R WE FIND THOSE ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. AS REGARDS THE DECISION OF THE CHENNAI BENCH OF THE TRIB UNAL IN THE CASE OF VISWAS PROMOTERS (SUPRA) WE FIND THE CHENNAI BENCH OF THE ITAT (TM) IN THE CASE OF SANGHVI & DOSHI ENTERPRISE (SUPRA) HAS REVE RSED THE SAME AND FOLLOWING THE DECISION OF HONBLE CALCUTTA HIGH COUR T IN THE CASE OF CIT VS. BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VIDE ITA NO.4 58 OF 2006 ORDER DATED 5-1-2007 HAS HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10) IN RESPECT OF FLATS HAVING BUILT UP AREA NOT EXCEEDING 1500 SQ.FT. AND NOT ENTITLED TO DEDUCTION IN RESPECT OF TH OSE FLATS HAVING THEIR BUILT UP AREA EXCEEDING 1500 SQ.FT. THEREFORE, THE DECISION OF THE CHENNAI BENCH OF THE TRIBUNAL RELIED ON BY THE LEARNED DR I S NOT APPLICABLE. 18. SO FAR AS THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF VANDANA PROPERTIES (SUPRA) IS CONCERNED WE FIND THE SA ID DECISION IS ALSO NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE SINCE THE ISSUE THERE WAS NOT OF PRO-RATA DEDUCTION. THE HONBLE HIGH COURT IN T HE SAID DECISION HAS HELD THAT CONSTRUCTION OF EVEN 1 BUILDING WITH SEVERA L RESIDENTIAL UNITS OF THE SIZE NOT EXCEEDING 1000 SQ.FT. WOULD CONSTITUTE A HOUSING PROJECT U/S.80IB(10). WE ACCORDINGLY HOLD THAT THE DECISIONS RELIED ON BY THE DR ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THUS, THE ASSESSEES GROUND RELATING TO PRO-RATA DEDUCTIO N IS ALLOWED. 30.1 FOLLOWING THE ABOVE DECISION THE TRIBUNAL IN ASSE SSEES OWN CASE FOR A.Y. 2005-06 VIDE ITA NOS. 1536/PN/2011 FILED BY THE REVENUE AND 1556/PN/2011 FILED BY THE ASSESSEE HAS DISMISSED THE APPE AL FILED BY THE REVENUE AND ALLOWED THE CLAIM OF PROPORTIONATE DEDU CTION IN RESPECT OF THE UNITS WHICH ARE LESS THAN 1500 SQ.FT. 31. SIMILARLY, SO FAR AS THE PROJECT MAESTRO IS CONCERN ED, WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2004-05 VIDE ITA NOS.156 AND 172/PN/2011 ORDER DATED 23-11-2012 AT PARA 15 OF TH E ORDER HAS DISCUSSED THE ISSUE AND DISMISSED THE APPEAL FILED BY THE R EVENUE. THE RELEVANT OBSERVATION OF THE TRIBUNAL READS AS UNDER : 15. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARI OUS DECISIONS CITED BEFORE US. THE ISSUE INVOLVED IN THE IMPUGNED APPEAL IS REGARDING ALLOWABILITY OF DEDUCTION U/S.80IB(10) IN RESPECT OF 4 PROJECTS UNDERTAKEN BY THE ASSESSEE DURING THE IMPUGNED A.Y., I.E. PROJECT S MAESTROS, MISTRY MOOR, ROSE PARADE AND LAPIZ LAZULI. SO FAR AS THE DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECTS MAESTROS AND MISTRY MOOR IS CONCERNED THE ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSE E BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2001-02 TO 2003- 04. SINCE THE LEARNED CIT(A) WHILE ALLOWING THE CL AIM OF THE ASSESSEE IN RESPECT OF THE ABOVE 2 PROJECTS HAS FOLLOWED THE ORDER OF HIS PREDECESSOR FOR A.Y. 2003-04 AND SINCE THE TRIBUNAL HAS DISMISSED TH E APPEAL FILED BY THE REVENUE, THEREFORE, IN ABSENCE OF ANY CONTRARY M ATERIAL BROUGHT TO OUR NOTICE AGAINST THE ORDER OF THE TRIBUNAL, WE, RESPECT FULLY FOLLOWING THE DECISION OF THE TRIBUNAL DISMISS THE GROUNDS RAISED BY TH E REVENUE CHALLENGING THE ORDER OF THE CIT(A) IN ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECTS MAESTROS AND MISTRY MOOR. THE ABOVE DECISION HAS BEEN FOLLOWED BY THE TRIBUNAL AGAIN IN A.Y. 2005- 06 VIDE ITA NO. 1536/PN/2011 FILED BY THE REVENUE A ND 1556/PN/2011 FILED BY THE ASSESSEE AND THE CLAIM OF DEDUCTION U/S.80 IB(10) IN RESPECT OF THE PROJECTS LAPIS LAZULI, MAESTRO AND ROSE PARADE ARE ALLOWED. SINCE THE 22 LD.CIT(A) WHILE DECIDING THE ISSUE HAS FOLLOWED THE DE CISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE FIND NO INFIRMIT Y IN THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS UPHELD AND THE GROU ND RAISED BY THE REVENUE IS DISMISSED. 11.2 FOLLOWING THE SAME REASONING THIS GROUND BY THE REVENUE IS DISMISSED. 12. GROUNDS OF APPEAL NO.8 AND 9 BEING GENERAL IN N ATURE ARE DISMISSED. ITA NO.1453/PN/2013 (BY ASSESSEE) (A.Y. 2008-09) : 13. GROUNDS OF APPEAL NO. 1, 3, 6, 6.1 AND 6.2 WERE NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING FOR WHICH THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION. ACCOR DINGLY, THE ABOVE GROUNDS ARE DISMISSED AS NOT PRESSED. GROUNDS OF APPEAL NO.7 BEING GENERAL IN NATURE ARE DISMISSED. 14. GROUNDS OF APPEAL NO.2 TO 2.3 BY THE ASSESSEE R EAD AS UNDER ; WITHOUT PREJUDICE TO THE ABOVE GROUND, THE ASSESSEE SUB MITS THAT - 2] THE LEARNED CIT(A) ERRED IN CONFIRMING THE D ISALLOWANCE OF DEDUCTION U/S. 80IB(10) IN RESPECT OF THE PROFITS DERIVED FROM SALE OF CERTAIN UNITS IN THE PROJECT 'LAPIS LAZULI' ON THE GROUND THAT THE BU ILT UP AREA OF THESE FLATS IN THE SAID PROJECT EXCEEDED 1500 SQ. FT. AND HENCE, NO DEDUCTION COULD BE ALLOWED IN RESPECT OF THE PROFITS DERIVED FROM SALE OF SUCH FLATS. 2.1) THE LEARNED CIT(A) ERRED IN HOLDING THAT CE RTAIN UNITS WHICH WERE COMBINED INTO ONE FLAT WERE TO BE CONSIDERED AS A SING LE UNIT FOR THE PURPOSES OF SECTION 80IB(10) AND SINCE THE BUILT UP A REA OF THESE FLATS EXCEEDED 1500 SQ. FT., THE DEDUCTION U/S. 80IB(10) WAS NOT ALLOWABLE TO THE ASSESSED IN RESPECT OF THE SAID UNITS. 2.2) THE LEARNED CIT(A) FAILED TO APPRECIATE THA T THE DISALLOWANCE U/S 80IB(10) WAS NOT WARRANTED AS THE BUILT UP AREA OF NO NE OF THE UNITS EXCEEDED 1500 SQ. FT. 2.3) THE LEARNED CIT(A) FAILED TO APPRECIATE THA T THE DISALLOWANCE U/S 80IB(10) WAS NOT JUSTIFIED FOR THE FOLLOWING REASON S - 23 A. THE CONCEPT OF RESIDENTIAL UNIT FOR THE PURPOSES OF SECTION 80IB(10) IS THAT OF THE FLAT AS PER THE SANCTIONED PLAN BY THE COMPETENT AUTHORITY AND AS PER WHICH, THE BUILT UP AREA OF EACH INDIVIDUAL FLA T WAS MUCH LESS THAN 1500 SQ. FT. AND THEREFORE, THERE WAS NO REASON TO DENY THE DEDUCTION U/S 80IB(10) IN RESPECT OF SUCH FLATS. B. THE STATEMENTS OF A FEW CUSTOMERS REPRODUCED B Y THE A.O. IN THE ASST. ORDER COULD NOT BE USED AS EVIDENCES AGAINST THE A SSESSEE SINCE NO OPPORTUNITY OF CROSS EXAMINATION OF THOSE PERSONS WAS PRO VIDED TO THE ASSESSEE. C. IN THE CORPORATION RECORDS, THESE ADJOINING UNI TS WERE CONSIDERED AS SEPARATE FLATS AND HENCE, FOR THE PURPOSES OF SECTION 80IB(10), THEY HAD TO BE CONSIDERED AS SEPARATE UNITS AND NOT ONE UNIT . 14.1 THE LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCED ED THAT THE ABOVE GROUNDS HAVE TO BE DECIDED AGAINST THE ASSESSEE SIN CE THE LD.CIT(A) HAS ALREADY GRANTED PRO-RATA DEDUCTION U/S.80IB(10) IN RESPECT OF THE UNITS WHICH ARE LESS THAN 1500 SQ.FT. AND HAS DENIED THE DEDUCTION IN RESPECT OF THE UNITS WHICH ARE EXCEEDING 1500 SQ.FT. IN VIEW OF THE ABOVE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE, THE ABOVE GROU NDS BY THE ASSESSEE ARE DISMISSED. 15. GROUNDS OF APPEAL NO.4 TO 4.3 BY THE ASSESSEE R EAD AS UNDER : 4) THE LEARNED CIT(A) ERRED IN CONFIRMING THE D ISALLOWANCE OF DEDUCTION U/S 80IB(10) IN RESPECT OF THE PROFITS DERIVED FROM SAL E OF CERTAIN UNITS IN THE PROJECT 'PINK CITY' ON THE GROUND THAT THE BUIL T UP AREA OF THESE HOUSES IN THE SAID PROJECT EXCEEDED 1500 SQ. FT. AND HENCE, NO DEDUCTION COULD BE ALLOWED IN RESPECT OF THE PROFITS DERIVED FROM SALE OF SUCH FLATS. 4.1) THE LEARNED CIT(A) ERRED IN HOLDING THAT CE RTAIN UNITS WHICH WERE COMBINED INTO ONE HOUSE WERE TO BE CONSIDERED AS A SING LE UNIT FOR THE PURPOSES OF SECTION 80IB(10) AND SINCE THE BUILT UP A REA OF THESE HOUSES EXCEEDED 1500 SQ. FT., THE DEDUCTION U/S 80IB(10) WAS NOT ALLOWABLE TO THE ASSESSED IN RESPECT OF THE SAID UNITS. 4.2) THE LEARNED CIT(A) FAILED TO APPRECIATE THA T THE DISALLOWANCE U/S 80IB(10) WAS NOT WARRANTED AS THE BUILT UP AREA OF NONE OF THE UNITS EXCEEDED 1500 SQ. FT. 4.3) THE LEARNED CIT(A) FAILED TO APPRECIATE THA T THE DISALLOWANCE U/S 80IB(10) WAS NOT JUSTIFIED FOR THE FOLLOWING REASON S A. THE CONCEPT OF RESIDENTIAL UNIT FOR THE PURPO SES OF SECTION 80IB(10) IS THAT OF THE FLAT AS PER THE SANCTIONED PLAN BY THE COMPETENT AUTHORITY AND AS PER WHICH, THE BUILT UP AREA OF EACH INDIVIDUAL UNI T WAS MUCH LESS THAN 24 1500 SQ. FT. AND THEREFORE, THERE WAS NO REASON TO DE NY THE DEDUCTION U/S 80IB(10) IN RESPECT OF SUCH FLATS. B. IN THE CORPORATION RECORDS, THESE UNITS WERE CONSIDERED AS SEPARATE UNITS AND HENCE, FOR THE PURPOSES OF SECTION 80IB(10), THEY HAD TO BE CONSIDERED AS SEPARATE UNITS AND NOT ONE UNIT. 15.1 AFTER HEARING BOTH THE SIDES, WE FIND THE AO I N THE ORDER PASSED U/S.153A OF THE I.T. ACT DISALLOWED THE CLAIM OF DE DUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT PINK CITY ON THE GROUND THAT THE BUILT UP AREA OF SOME OF THE FLATS IN THE SAID PROJECT EXCEEDED 1500 SQ.FT. IN APPEAL THE LD.CIT(A) HELD THAT CERTAIN UNITS WHICH ARE COMBINE D INTO ONE UNIT WERE TO BE CONSIDERED AS A SINGLE UNIT FOR THE PURPOSE O F SECTION 80IB(10). SINCE SOME OF THE COMBINED UNITS EXCEEDED 1500 SQ.F T. THE LD.CIT(A) DIRECTED THE AO TO ALLOW PROPORTIONATE DEDUCTION IN RESPECT OF THE UNITS WHICH ARE LESS THAN 1500 SQ.FT. 16. THE LD. COUNSEL FOR THE ASSESSEE COULD NOT POIN T OUT AS TO HOW HE COULD GET THE BENEFIT OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE COMBINED UNITS WHERE THE BUILT UP AREA IS MORE THAN 1500 SQ. FT. SINCE THE LD.CIT(A) HAS ALREADY GRANTED PROPORTIONATE DEDUCTION U/S.80I B(10) IN RESPECT OF THE UNITS THE BUILT UP AREA OF WHICH IS LESS THAN 1500 SQ.FT., THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOT ICE WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, SAME IS UPHELD AND THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 17. GROUNDS OF APPEAL NO. 5 TO 5.3 BY THE ASSESSEE READS AS UNDER : 5) THE LEARNED CIT(A) ERRED IN HOLDING THAT THE P URCHASES OF RS.7,06,314/- MADE BY THE ASSESSEE FROM M/S. FRESHO METALS PVT. LTD. WERE BOGUS ON THE GROUND THAT THE SAME WERE ADMITTED TO BE NON-GENUINE BY THE SUPPLIER AND HENCE, THE SAME WERE TO BE DISALLOW ED WHILE COMPUTING THE BUSINESS INCOME FOR THIS YEAR. 25 5.1) THE LEARNED CIT(A) ERRED IN HOLDING THAT B. THE ASSESSEE WAS NOT ABLE TO DEMONSTRATE WITH DOCUMENT ARY EVIDENCE THAT THE PURCHASES MADE FROM THE ABOVE PARTY WERE GEN UINE AND HENCE, THE DISALLOWANCE MADE WAS JUSTIFIED. C. THE ADMISSION OF THE SAID PARTY IN THE STATEMENT RECORDED IN THE COURSE OF SEARCH WAS A STRONG EVIDENCE AND SINCE THE ASSESSEE WAS NOT ABLE TO REBUT THE SAME WITH THE HELP OF ANY COGENT EVIDENCE THE C ORRECTNESS OF THE SAID ADMISSION COULD NOT BE DOUBTED AND THUS, THE PURCHASES M ADE FROM THE SAID PARTY WERE TO BE TREATED AS BOGUS PURCHASES. D. THE LEARNED A.O. HAD PROVIDED REASONABLE OPPORTU NITY OF CROSS EXAMINATION OF THE SAID PARTY BEFORE COMPLETION OF T HE ASST. AND HENCE, THE ADDITION MADE WAS JUSTIFIED IN LAW. 5.2) THE LEARNED CIT(A) FAILED TO APPRECIATE THA T A. THE ADDITION WAS MADE WITHOUT GIVING AN OPPORTUNI TY TO THE ASSESSEE TO CROSS EXAMINE THE SUPPLIER WHO HAD STATED THAT THE SALES MADE TO THE ASSESSEE WERE BOGUS. B. THE SAID SUPPLIER HAD NOT ATTENDED THE OFFICE OF T HE A.O. IN RESPONSE TO THE SUMMONS ISSUED BY THE A.O. AND FURTHER, NO OPPORTU NITY OF CROSS EXAMINATION WAS GRANTED EITHER BY THE A.O. OR THE LE ARNED CIT(A) AND THEREFORE, IN VIEW OF THE SUPREME COURT DECISION IN THE CASE OF KISHANCHAND CHELLARAM [125 ITR 713], THE ADDITION C OULD NOT BE MADE IN THE HANDS OF THE ASSESSEE. C. THE ASSESSEE HAD PROVED THE GENUINENESS OF THE SAID P URCHASES BY PRODUCING THE BILLS OF THE SUPPLIER AND FROM THE FACT THAT THE PAYMENTS WERE MADE BY CROSSED CHEQUES AND THUS, THE ASSESSEE HAD DISCHARGED THE ONUS LYING UPON TO IT TO ESTABLISH THE GENUINENESS OF THE SAID PURCHASES. D. THE ASSESSEE HAD ALSO SHOWN THAT IF THE SAID ALLE GED BOGUS PURCHASES ARE EXCLUDED, THE STEEL UTILIZED BY THE ASSESSEE IN VAR IOUS PROJECTS WAS FAIRLY SHORT OF THE REQUIRED AMOUNT OF STEEL WHICH WAS NEC ESSARY FOR CONSTRUCTING THE VARIOUS PROJECTS AND HENCE, WITHOUT SUCH STEEL PURCHASES, THE ASSESSEE COULD NOT HAVE CONSTRUCTED THESE PROJECTS AND ACCOR DINGLY, IN VIEW OF [68 ITD 65 TM], THE DEDUCTION WAS RIGHTLY ALLOWABLE TO THE A SSESSEE. E. THE SUPPLIER HAVING NOT ATTENDED BEFORE THE A.O . FOR CROSS EXAMINATION BY THE ASSESSEE MUST HAVE GIVEN THE STATEMENT SO AS TO COVER U P THE LACUNAE IN ITS BOOKS REGARDING THE SUPPLIES AND HENCE, SUCH STATE MENT COULD NOT BE USED AGAINST THE ASSESSEE IN VIEW OF THE EVIDENCES SUBMITT ED BY THE ASSESSEE. 17.1 AFTER HEARING BOTH THE SIDES, WE FIND THE AO D ISALLOWED THE PURCHASES FROM 11 PARTIES AMOUNTING TO RS.26,70,728 /-, THE DETAILS OF WHICH ARE ALREADY REPRODUCED WHILE DECIDING THE APP EAL FILE BY THE REVENUE IN THE IMPUGNED ORDER AT PARA NO.2.2. IN A PPEAL THE LD.CIT(A) 26 DELETED THE PURCHASES AMOUNTING TO RS.19,64,424/- F ROM 5 PARTIES AND SUSTAINED AN AMOUNT OF RS.7,06,314/- BEING THE PURC HASE FROM 6 PARTIES. SINCE THE TRIBUNAL HAS ALREADY DECIDED IDENTICAL IS SUE IN THE CASE OF THE SISTER CONCERN KPDL AND HAS HELD THAT THE PURCHASES FROM THE 5 PARTIES ARE TO BE HELD AS BOGUS, THEREFORE, THE ORDER OF THE LD .CIT(A) BEING IN CONFORMITY WITH THE ORDER OF THE TRIBUNAL HAS TO BE UPHELD. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY DISMISSED. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE AS WELL AS THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 31-03-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED 31 ST MARCH, 2015 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 B BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR, INCOME TAX APPEL LATE TRIBUNAL, PUNE