Asst. Comm. of Income-tax , Pune V. M/s. Ankit Enterprises, Pune

ITA 1536/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9803 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 30-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Additional evidence
• Section: 80IB; 6

Judgement Text

1 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. 1536/PN/2011 (ASSESSMENT YEAR 2005-06) ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(1), S.S.ROAD, SWARGATE, PUNE .. APPELLANT VS. ANKIT ENTERPRISES, 2 ND FLOOR, CITY POINT, 17 BOAT CLUB ROAD, PUNE 411 001. PAN NO. AAFFA 1172N .. RESPONDENT ITA NO. 1556/PN/2011 (ASSESSMENT YEAR 2005-06) ANKIT ENTERPRISES, 2 ND FLOOR, CITY POINT, 17 BOAT CLUB ROAD, PUNE 411 001 PAN NO. AAFFA 1172N .. APPELLANT VS. ADDL. COMMISSIONER OF INCOME TAX, RANGE-2, PUNE .. RESPONDENT ASSESSEE BY : SRI NIKHIL PATHAK DEPARTMENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 22-11-2012 DATE OF PRONOUNCEMENT : 23-11-2012 ORDER PER R.K. PANDA, AM : THESE ARE CROSS APPEALS. THE FIRST ONE IS FILED BY THE REVENUE AND THE SECOND ONE FILED BY THE ASSESSEE AND ARE DIRECTED AGAINST THE ORDER DATED 12-09-2011 OF THE CIT(A)-II, PUNE RELATING TO ASSESSMENT YEAR 2005-06 . FOR THE SAKE OF CONVENIENCE, THESE WERE HEARD TOGETHER AND ARE BEIN G DISPOSED OF BY THIS COMMON ORDER. 2. THE GROUNDS RAISED BY THE REVENUE AS WELL AS THE ASSESSEE ARE AS UNDER : GROUNDS BY REVENUE : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE,, THE LD. CIT(A) WAS RIGHT IN DELETING THE DISALLOWANCE OF DEDUCTION CLA IMED BY THE ASSESSEE U/S.80IB(10) IN RESPECT OF TWO PROJECTS VIZ., MAESTROS AND ROSE PARADE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) WAS RIGHT IN NOT APPRECIATING THE FACT THAT THE PROJECT MAESTRO S WAS INITIALLY APPROVED BY THE LOCAL AUTHORITY ON 29-09-2005 AND COMMENCED BEFORE 01-10- 1998, WHEREAS, FOR BEING ELIGIBLE FOR THE CLAIM OF DEDUCTION NU/S.80IB(10), THE PROJE CT WAS REQUIRED TO BE FIRST APPROVED AND COMMENCED AFTER 01-10-1998 IN ACCORDANCE WITH E XPLANATION (I) TO THE SAID SECTION. 2 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) WAS RIGHT IN NOT APPRECIATING THE FACT THAT THE PROJECT MAESTRO S WAS CONSISTING OF UNITS EXCEEDING THE PRESCRIBED THRESHOLD BUILD-UP AREA OF 1500 SQ.FT. A S WITNESSED IN BUILDINGS G AND H OF THE SAID PROJECT, WHERE ADJOINING FLATS IN MOST OF THE CASES WERE SOLD TO ONE INDIVIDUAL OR HIS RELATIVE WHICH HAVE BEEN COMBINED, THEREBY EXCE EDING THE PRESCRIBED AREA. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) WAS RIGHT IN NOT APPRECIATING THE FACT THAT THE PROJECT ROSE PA RADE WAS CONSISTING OF UNITS EXCEEDING THE PRESCRIBED THRESHOLD BUILT UP AREA OF 1500 SQ.F T. AS EVIDENCED BY THE SPECIFIC STATEMENTS OF FLAT PURCHASERS AS WELL AS THE DEPART MENTAL VALUERS REPORT DATED 05-05- 2004, AND WHICH WAS FURTHER CORROBORATED BY THE COM PLETION CERTIFICATE ISSUED BY THE PMC, WHEREIN THE 14 UNITS CLAIMED BY THE ASSESSEE A RE COUNTED AS 7 ROW HOUSES. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) WAS RIGHT IN NOT APPLYING PROVISIONS OF SECTION 80IB(10)(14)(A) TO ARRIVE AT BUILT UP AREA OF JOINED RESIDENTIAL UNITS IN RESPECT OF PROJECT MAESTROS AND PROJECT ROSE PARADE. 6. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) BE VACATED AND THAT OF THE ASSESSING OFFICERS ORDER BE RESTORED. GROUNDS BY ASSESSEE : 1. THE LEARNED CIT(A) ERRED IN DISALLOWING THE DED UCTION U/S.80IB(10) IN RESPECT OF THE PROFITS OF THE ASSESSEE FROM LAPIZ LAZULI PROJE CT. 2. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT AS A FEW ADJOINING TWO FLATS WERE COMBINED INTO ONE FLAT, FOR THE PURPOSES OF SE CTION 80IB(10), THEY CONSTITUTED ONE UNIT AND THE BUILT UP AREA OF SUCH UNIT HAD EXCEEDE D 1500 SQ.FT. AND ACCORDINGLY, THE DEDUCTION U/S.80IB(10) WAS NOT AVAILABLE. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT EVE N THOUGH A FEW ADJOINING FLATS WERE COMBINED INTO ONE FLAT, AS PER THE SANCTIONED BUILDING PLAN AND FOR THE PURPOSES OF SECTION 80IB(10), THEY CONSTITUTED SEPARATE UNIT. 4. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE ASSE SSEE SUBMITS THAT THE LEARNED CIT(A) OUGHT TO HAVE GRANTED PROPORTIONATE DEDUCTIO N IN RESPECT OF THE FLATS WHOSE BUILT UP AREA WAS LESS THAN 1500 SQ.FT. 3. BOTH THE SIDES AT THE TIME OF HEARING SUBMITTED THAT THE FACTS IN THE ABOVE CROSS APPEALS ARE IDENTICAL TO THE FACTS IN ASSESSE ES OWN CASE FOR A.Y. 2004-05 WHICH WAS HEARD ON 21-11-2012. THE ARGUMENTS ALSO ARE SIMILAR TO THE ARGUMENTS MADE IN A.Y. 2004-05 VIDE ITA NOS. 156/PN/2012 AND ITA NO.172/PN/2011 WHICH WAS HEARD ON 21-11-2012. ACCORDINGLY BOTH OF THEM SUBMITTED THAT VIEW TAKEN IN APPEALS FOR A.Y. 2004-05 MAY BE TAKEN FOR A.Y. 2005-06. 4. WE HAVE CONSIDERED THE ARGUMENTS MADE BY BOTH TH E SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE AO FOLLOWING THE ASSESSMENTS ORDERS IN CASE OF THE ASSESSEE 3 FOR A.YS. 2001-02 TO 2004-05 DISALLOWED THE CLAIM O F BENEFIT OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE 4 PROJECTS UNDERTAKE N BY THE ASSESSEE, NAMELY MAESTROS, MISTRY MOOR, ROSE PARADE AND LAPIZ LAZULI ON THE GROUND THAT THE PROJECTS DID NOT COMPLY TO THE CONDITIONS PRESCRIBE D IN SECTION 80IB(10). WE FIND THE LEARNED CIT(A) ALLOWED THE CLAIM OF DEDUCTION U /S.80IB(10) IN RESPECT OF THE 3 PROJECTS, NAMELY MAESTROS, MISTRY MOOR AND ROSE PAR ADE. HOWEVER, HE REJECTED THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF T HE PROJECT LAPIZ LAZULI. VIDE OUR ORDER OF EVEN DATE WE HAVE DECIDED THE CROSS AP PEALS FILED BY THE REVENUE AS WELL AS THE ASSESSEE FOR A.Y. 2004-05 BEARING ITA N OS. 156/PN/2011 AND 172/PN/2011 WHEREIN THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED AND THE APPEAL FILED BY THE ASSESSEE HAS BEEN PARTLY ALLOWE D WITH CERTAIN DIRECTIONS. RELEVANT OPERATIVE PORTION OF THE ORDER OF THE TRIB UNAL READS AS UNDER : 15. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BE FORE US. THE ISSUE INVOLVED IN THE IMPUGNED APPEAL IS REGARDING ALLOWABILITY OF DEDUCT ION U/S.80IB(10) IN RESPECT OF 4 PROJECTS UNDERTAKEN BY THE ASSESSEE DURING THE IMPU GNED A.Y., I.E. PROJECTS MAESTROS, MISTRY MOOR, ROSE PARADE AND LAPIZ LAZULI. S O 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 ASSESSEE BY T HE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2001-02 TO 2003-04. S INCE THE LEARNED CIT(A) WHILE ALLOWING THE CLAIM OF THE ASSESSEE IN RESPECT OF TH E ABOVE 2 PROJECTS HAS FOLLOWED THE ORDER OF HIS PREDECESSOR FOR A.Y. 2003-04 AND SINCE THE TRIBUNAL HAS DISMISSED THE APPEAL FILED BY THE REVENUE, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE AGAINST THE ORDER OF THE TRIBUNAL, WE, RESPE CTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL DISMISS THE GROUNDS RAISED BY THE 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. 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 CO NSIDERING THE REPORT OF THE DVO HAS GIVEN A FACTUAL FINDING THAT THE BUILT UP AREA OF N ONE OF THE FLATS IN THE PROJECT ROSE PARADE EXCEEDS 1500 SQ.FT. THE SUBMISSION OF THE LEARNED 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 1500 SQ.FT. COULD NOT BE CONTROVERTED BY THE LEARNED DR. UNDER THESE CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT ROSE PARADE. 15.2 SO FAR AS THE ARGUMENT OF THE LEARNED DR THAT NO OPPORTUNITY WAS GIVEN TO THE AO AND THE LEARNED CIT(A) HAS UNILATERALLY ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE SUBMISSIONS MADE BEFORE HIM WE FIND THERE IS NO SUCH GROUND BY THE REVENUE THAT THE LEARNED CIT(A) HAS ACCEPTED ANY ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A. FURTHER, THE LEARNED CIT(A) HAS CONSIDERED THE REPORT OF THE DVO WHICH HAS BEEN REFERRED TO BY THE AO FOR VERIFICATION OF THE BUILT UP AREA IN SQ. FT. THEREFORE, WE DO NOT FIND ANY MERIT IN 4 THE ARGUMENTS OF THE LEARNED DR THAT THE MATTER SHO ULD BE RESTORED TO THE FILE OF THE AO FOR VERIFICATION. THE GROUNDS BY THE REVENUE ARE A CCORDINGLY DISMISSED. 15.3 SO FAR AS THE APPEAL OF THE ASSESSEE IS CONCER NED REQUESTING PRO-RATA DEDUCTION IN CASE OF THE 76 FLATS OUT OF 214 FLATS WHICH HAVE BU ILT UP AREA OF LESS THAN 1500 ST.FT. WE FIND THE TRIBUNAL IN THE CASE OF D.S. KULKARNI DEVE LOPERS LTD. (SUPRA) FOLLOWING VARIOUS DECISIONS HAS HELD THAT ASSESSEE IS ENTITLED TO PRO PORTIONATE DEDUCTION OF THE PROFITS IN RESPECT OF FLATS WHICH HAVE BUILT UP AREA OF LESS T HAN 1500 SQ.FT. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL READ AS UNDER : 20. IN THIS BACKGROUND, THE ALTERNATIVE PLEA OF TH E ASSESSEE SPRINGS UP. THE PLEA IS THAT THE DEDUCTION U/S. 80 IB (10) BE DENIED ONLY W ITH RESPECT TO THE UNITS WHICH DO NOT CONFORM TO THE CONDITION CONTAINED IN SEC. 80 IB (1 0)(C ) AND FOR THE BALANCE ELIGIBLE RESIDENTIAL UNITS, THE DEDUCTION SHOULD BE ALLOWED. THE REVENUE HAS OPPOSED THE SAID PLEA ON THE GROUND THAT THE ASSESSEE IS NOT ENTITLE D TO A PROPORTIONATE DEDUCTION U/S. 80 IB (10) OF THE ACT. 21. ON THIS ASPECT, WE FIND THAT THE MUMBAI BENCH O F THE TRIBUNAL IN THE CASE OF M/S. EKTA HOUSING PVT. LTD. (SUPRA) HAS UPHELD THE PLEA OF THE ASSESSEE FOR A PROPORTIONATE DEDUCTION U/S. 80 IB (10) OF THE ACT WHERE SOME OF THE RESIDENTIAL UNITS IN THE PROJECT VIOLATED THE CONDITION CONTAINED IN SEC . 80 IB (10)(C ) OF THE ACT. THE MUMBAI 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 D TR 371 (BANG.); III) ACIT V/S SHETH DEVELOPERS P. LTD., 33 SOT 2 77 (MUM.); IV) BENGAL AMBUJA HOUSING DEVELOPMENT LTD. V/S D CIT; V) SJR BUILDERS V/S ACIT, 3 ITR 569 (MUM.) HELD THAT THE ASSESSEE WOULD NOT LOOSE THE EXEMPTI ON U/S. 80 IB (10) IN ENTIRETY WHERE SOME OF THE RESIDENTIAL UNITS WINGS HAD A BUILT- UP AREA IN EXCESS OF THE LIMIT PRESCRIBED IN CLAUSE (C ) OF SEC. 80 IB (10) BUT, IT WOULD BE ENTITLED TO PROPORTIONATE DEDUCTION U/S. 80 IB (10) OF THE ACT WITH REGARD T O THE PROFITS EARNED ON THE ELIGIBLE UNITS.. PARTICULARLY, THE TRIBUNAL ALSO CONSIDERED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) AND HELD THAT THE SAME DOES NOT ENVISAGE DENIAL OF PROPORTIONATE DEDUCTION IN SUCH CIRCUMSTANCES. 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. READS AS UNDER : VIII) WE NOW EXAMINE THE APPLICABILITY OF THE DECI SION OF THE HONBLE BOMBAY HIGH COURT IN BRAHMA ASSOCIATES (SUPRA) TO THE FACTS OF THIS CASE. ON A CAREFUL READING OF THIS JUDGMENT, WE FIND THAT NOWHERE IT IS STATED THAT PR OPORTIONATE DEDUCTION SHOULD NOT BE ALLOWED, IN CASE CERTAIN RESIDENTIAL UNITS HAD BU ILT UP AREA IN EXCESS OF PRESCRIBED LIMIT OF 1,000 SQ.FT. IN FACT, THIS ISSUE WAS NOT BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. THE QUESTIONS BEFORE THE HONBLE JURISDICTIONAL HI GH COURT WERE DIFFERENT AND, HENCE THE JUDGMENT CANNOT BE SAID TO BE ON THIS ISSUE. THE O NLY ISSUE BEFORE THE HIGH COURT IS WHEN THERE IS A COMMERCIAL ELEMENT IN A RESIDENTIAL PROJECT, WILL BE ASSESSEE BE DENIED THE ENTIRE EXEMPTION. IN THIS CASE, THE HONBLE HIG H COURT HAS OBSERVED THAT WHEN THE LOCAL AUTHORITY APPROVED A PLAN AS A HOUSING PROJEC T OR A RESIDENTIAL CUM COMMERCIAL PROJECT, THE ASSESSEE WOULD BE ENTITLED TO CLAIM FO R DEDUCTION UNDER SECTION 80IB(10) EVEN IF THE PROJECT HAD COMMERCIAL ELEMENT IN EXCES S OF 10%. AT PARAS-27 AND 28, THE COURT OBSERVED AS FOLLOWS :- 27. THE QUESTION THEN TO BE CONSIDERED IS, WHETHER THE SPECIAL BENCH OF THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE PROJECTS HAVING C OMMERCIAL AREA UPTO 10% OF THE BUILT- UP AREA OF THE PLOT ARE ELIGIBLE FOR DEDUCTION UNDE R SECTION 80IB(10) ON THE ENTIRE PROJECT UPTO 1.4.2005. ONCE THE BASIC ARGUMENT OF THE REVE NUE THAT THE HOUSING PROJECTS WITH COMMERCIAL USER ARE NOT ENTITLED TO SECTION 80IB(10 ) DEDUCTION IS REJECTED, THEN IN THE ABSENCE OF ANY RESTRICTION IMPOSED UNDER THE ACT, IT WAS NOT OPEN TO THE TRIBUNAL TO HOLD THAT THE PROJECTS APPROVED BY THE LOCAL AUTHOR ITIES HAVING RESIDENTIAL BUILDINGS WITH COMMERCIAL USER UPTO 10% OF THE PLOT AREA WOUL D ALONE BE ENTITLED TO DEDUCTION UNDER SECTION 80IB(10). AS NOTED EARLIER, RESTRICTI ON REGARDING COMMERCIAL USER HAS BEEN 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 TRIBUN AL TO HOLD THAT PRIOR TO 1.4.2005, 5 PROJECTS HAVING COMMERCIAL USER UPTO10% OF THE PLOT AREA ALONE WOULD BE ELIGIBLE FOR SECTION 80IB(10) DEDUCTION. 28. IN THE PRESENT CASE, THOUGH THE COMMERCIAL USER IS MORE THAN 10% OF THE PLOT AREA, THE TRIBUNAL HAS ALLOWED SECTION 80IB(10) DED UCTION IN RESPECT OF 15 RESIDENTIAL BUILDINGS ON THE GROUND THAT THE PROFITS FROM THESE EXCLUSIVELY RESIDENTIAL BUILDINGS COULD BE DETERMINED ON STAND ALONG BASIS. IN OUR OPINION , THAT WOULD NOT BE PROPER, BECAUSE SECTION 80IB(10) ALLOWS DEDUCTION TO THE ENTIRE PRO JECT APPROVED BY THE LOCAL AUTHORITY AND NOT TO A PART OF THE PROJECT. IF THE CONDITION S SET OUT IN SECTION 80IB(10) ARE SATISFIED, THEN DEDUCTION IS ALLOWABLE ON THE ENTIRE PROJECT A PPROVED BY THE LOCAL AUTHORITY AND THERE IS NO QUESTION OF ALLOWING DEDUCTION TO A PA RT OF THE PROJECT. IN THE PRESENT CASE, THE COMMERCIAL USER IS ALLOWED IN ACCORDANCE WITH T HE DC RULES AND HENCE THE ASSESSEE WAS ENTITLED TO SECTION 80IB(10) DEDUCTION ON THE E NTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY. HOWEVER, THE ASSESSEE HAS NOT CHALLENGE D 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) DEDUC TION ON THE PROFITS OF THE ENTIRE PROJECT, IN THE FACTS OF THE PRESENT CASE, SINCE TH E ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRIBUNAL, WE ARE NOT INCLINED TO DI STURB TO DISTURB THE DECISION OF THE TRIBUNAL IN RESTRICTING THE SECTION 80IB(10) DEDUC TION ONLY IN RESPECT OF THE PROFITS DERIVED FROM 15 RESIDENTIAL BUILDINGS. IX) THUS, IT COULD BE SEEN THAT THE HONBLE HIGH COURT DO NOT APPROVE THE FINDINGS OF THE TRIBUNAL THAT A RESIDENTIAL BUILDING WITH CO MMERCIAL USER UP TO 10% OF THE PLOT AREA WOULD ALONE BE ENTITLED TO DEDUCTION UNDER SEC TION 80IB(10). THE ISSUE THAT, IN CASE WHERE CERTAIN RESIDENTIAL UNITS ARE OF A BUILT UP A REA IN EXCESS OF THE PRESCRIBED LIMIT OF 1,000 SQ.FT. IN RESIDENTIAL PROJECT, THIS WOULD RES ULT IN THE ENTIRE EXEMPTION BEING LOST, OR WHETHER THE ASSESSEE WOULD BE ENTITLED TO A PROPORT IONATE DEDUCTION WAS NOT BEFORE THE HIGH COURT. THUS, IN OUR OPINION, THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN BRAHMA ASSOCIATES (SUPRA) DOES NOT COME TO THE RESC UE OF THE REVENUE. 22. FOLLOWING THE AFORESAID PRECEDENT, WE, THEREFOR E, HOLD THAT MERELY BECAUSE THE ASSESSEE HAS VIOLATED THE CONDITION U/S. 80 IB(10)( C ) IN RELATION TO THE FLATS ON THE 11 TH FLOOR, THE DEDUCTION U/S. 80 IB(10) CANNOT BE DENIE D IN ITS ENTIRETY, BUT, THE DENIAL SHALL BE LIMITED TO THE PROFITS IN RESPECT OF THE FLATS O N THE 11 TH FLOOR ALONE. FOR THE BALANCE OF THE RESIDENTIAL UNITS, THE PLEA OF THE ASSESSEE FOR DEDUCTION U/S. 80 IB(10) OF THE ACT IS JUSTIFIED, AND THE ASSESSEE SUCCEEDS ON THIS ASPECT . 16. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIB UNAL IN THE CASE OF D.S. KULKARNI DEVELOPERS LTD. (SUPRA) WE HOLD THAT THE ASSESSEE I S ENTITLED TO PROPORTIONATE DEDUCTION IN RESPECT OF THE FLATS WHICH HAVE BUILT UP AREA OF LESS THAN 1500 SQ.FT. WE ACCORDINGLY REMIT BACK THE MATTER TO THE FILE OF THE AO WITH TH E DIRECTION TO CALCULATE THE PROPORTIONATE DEDUCTION AND ALLOW THE DEDUCTION U/S .80IB(10) ON SUCH PROPORTIONATE PROFIT. NEEDLESS TO SAY, THE AO SHALL GIVE DUE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE WHILE DETERMINING SUCH PROPORTIONATE DEDUCTION. 17. SO FAR AS THE DECISIONS RELIED ON BY THE LEARNE D DR 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 TRIBUNAL IN TH E CASE OF VISWAS PROMOTERS (SUPRA) WE FIND THE CHENNAI BENCH OF THE ITAT (TM) IN THE C ASE OF SANGHVI & DOSHI ENTERPRISE (SUPRA) HAS REVERSED THE SAME AND FOLLOWING THE DEC ISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VIDE ITA NO.458 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 AR EA NOT EXCEEDING 1500 SQ.FT. AND NOT ENTITLED TO DEDUCTION IN RESPECT OF THOSE FLATS HAV ING THEIR BUILT UP AREA EXCEEDING 1500 SQ.FT. THEREFORE, THE DECISION OF THE CHENNAI BENC H OF THE TRIBUNAL RELIED ON BY THE LEARNED DR IS NOT APPLICABLE. 18. SO FAR AS THE DECISION OF THE JURISDICTIONAL HI GH COURT IN THE CASE OF VANDANA PROPERTIES (SUPRA) IS CONCERNED WE FIND THE SAID DE CISION 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 THE SAID DECISION HAS HELD THAT CONST RUCTION OF EVEN 1 BUILDING WITH SEVERAL RESIDENTIAL UNITS OF THE SIZE NOT EXCEEDING 1000 SQ .FT. WOULD CONSTITUTE A HOUSING PROJECT 6 U/S.80IB(10). WE ACCORDINGLY HOLD THAT THE DECISIO NS 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 DEDUCTION IS ALLOWED. 5. FOLLOWING THE SAME REASONING THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS PARTLY-ALLO WED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS PARTLY-ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF NOVEMBER, 2012. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: THE 23 RD NOVEMBER 2012 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-II, PUNE 4. THE D.R, A PUNE BENCH 5. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE