M/s. Raviraj Kothari Panjabi Associates, Pune V. Dy. Comm. of Income-tax, Pune

ITA 1642/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2035 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 21-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANN KAPTHUAMA

Judgement Text

INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NOS. 1642/PN/2011 RAVIRAJ KOTHARI PANJABI ASSOCIATES, SHAH KHANDELWAL JAIN & ASSOCIATES, CA LEVEL 3,BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO,PUNE. PAN NO. AAFFR 1541N .. APPELLANT VS. DY.COMMISSIONER OF INCOME TAX, CIRCLE-4, PUNE. . .. RESPONDENT ASSESSEE BY : NONE DEPARTMENT BY : MRS. ANN KAPTHUAMA DATE OF HEARING : 12-02-2013 DATE OF PRONOUNCEMENT : 25-02-2013 ORDER PER R.S. PADVEKAR, JM : IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LEARNED CIT(A)-II, PUNE FOR THE ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE G ROUND : ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF THE ACT IT BE HELD THAT, THE DISALLOW ANCE OF THE CLAIM IN TERMS OF PROVISIONS OF SEC.80IB(10) OF RS.3,70,454/- PERT AINING TO CITADEL PROJECT IS UNJUSTIFIED, IMPROPER CONTRARY TO THE PRO. AND S CHEME OF THE ACT AND FACTS PREVAILING IN THE CASE. IT FURTHER BE HELD T HAT THE CLAIM IS ADMISSIBLE AND DEDUCTIBLE IN THE HANDS OF THE APPELLANT AS PER PROVISIONS OF LAW, SCHEME OF THE ACT AND FACTS PREVAILING IN THE CASE. THE DISALLOWANCE/ADDITION MADE BY THE ASSESSING OFFICER AND THAT CONFIRMED BY THE IST APPELLATE AUTHORITY PERTAINING TO CITADEL PROJECT BE DELETED. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF AS PER PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. 3. FACTS WHICH ARE REVEALED FROM THE RECORD ARE AS UNDER : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROMOTE RS, BUILDERS AND LAND DEVELOPERS. ASSESSEE HAS UNDERTAKEN PROJECTS NAMELY-CITADEL, CITADEL ENCLAVE, AND CITADEL EMPRESS AT B.T. K AWADE ROAD, BEHIND SOPAN BAUG, GHORPADI, PUNE. ASSESSEE CLAIMED DEDUCT ION U/S.80IB(10) TO THE EXTENT OF ` 1,80,21,415. THE ASSESSING OFFICER DENIED DEDUCTIO N TO THE ASSESSEE IN RESPECT OF CITADEL PROJECT. THE ASSE SSING OFFICER HAS NOTED THAT TOTAL BUILT UP AREA OF THE SHOPS FROM THE GROU ND FLOOR ALONE WAS 2 13246.96 SQ.FT. AND THE SAID PROJECT WAS SANCTIONE D AS RESIDENTIAL-CUM- COMMERCIAL PROJECT AND IT WAS NOT A PURELY RESIDEN TIAL PROJECT. 3.1 HE ALSO FURTHER OBSERVED THAT IN SOME OF THE FL ATS IN THE SAID BUILDING THE BUILT UP AREA WAS MORE THAN 1000 SQ.FT. INCLUDI NG THE EXCLUSIVE TERRACE TO SUCH FLAT OWNERS WHICH WERE SOLD AS PER THE AGRE EMENTS. IN RESPECT OF THE CITADEL ENCLAVE, FOR THE REASON THAT THE COMM ERCIAL AREA WAS MORE THAN 2000 SQ.FT. SAID PROJECT WAS SHOWN AS SEPARATE PROJECT. THE ASSESSING OFFICER NOTED THAT IT IS EVIDENT THAT THE COMMERCIAL AREA IS A PART AND PARCEL OF THE CITADEL ENCLAVE PROJECT ONLY. HE ACCORDINGLY DENIED THE DEDUCTION IN RESPECT OF THE CITADEL ENCLAVE. THE RE IS NO DISCUSSION IN RESPECT OF THE CITADEL EMPRESS IN THE ASSESSMENT ORDER. 3.2 THE ASSESSEE CHALLENGED THE ACTION OF THE ASSES SING OFFICER BEFORE THE LD. CIT(A). SO FAR AS THE DEDUCTION IN RESPECT OF CITADEL PROJECT IS CONCERNED, THE SAME WAS DENIED BY THE LD. CIT(A) WH ICH WAS TO THE EXTENT OF ` 3,70,451. IN RESPECT OF CITADEL ENCLAVE PROJECT THE DEDUCTION WAS TO THE EXTENT OF ` 1,76,50,961. THE LD. CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE AND ALLOWED THE DEDUCTION. IT APPEARS THAT ONLY THE 2 PROJECTS WERE INVOLVED SO FAR AS DEDUCTION U/S.80IB (10) IS CONCERNED. 4. NOW AGGRIEVED BY THE ACTION OF THE LD. CIT(A) DE NYING THE DEDUCTION U/S.80IB(10) IN RESPECT OF CITADEL PROJECT THE AS SESSEE IS IN APPEAL BEFORE US. 5. NONE WAS PRESENT FOR THE ASSESSEE. THE ASSESSEE HAS FILED AN APPLICATION STATING THAT THE ISSUE ARISING IN THIS APPEAL IS COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING YEARS. THE ASSESSEE HAS ALSO ENCLOSED THE ORDER OF THE TRI BUNAL FOR THE A.Y. 2003-04, TO 2006-07 VIDE ITA NOS.174 & 1438/PN/2007 , ITA NOS.751 & 280/PN/2010 ORDER DATED 23-11-2012. 6. WE HAVE ALSO HEARD THE LD. DEPARTMENTAL REPRESEN TATIVE WHO FAIRLY CONCEDED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL AS STATED IN THE APPLICATI ON IN RESPECT OF CITADEL PROJECT. THE OPERATIVE PART OF THE TRIBUNALS ORD ER IN ASSESSEES OWN CASE IS AS UNDER : 7. ON THIS ASPECT, WE HAVE CAREFULLY CONSIDERED TH E RIVAL SUBMISSIONS. ADMITTEDLY, THE ASSESSEE HAS COMMENCED DEVELOPMENT AND CONSTRUCTION OF ITS HOUSING PROJECT CITADEL IN TERMS OF APPROVAL GRANTED BY THE PMC WHICH IS THE PRESCRIBED LOCAL AUTHORITY WITHIN THE MEAN ING OF SEC. 80(IB)(10) OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSE E COMMENCED 3 DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT AS PER THE COMMENCEMENT CERTIFICATE ISSUED BY THE PMC DATED 16 -7-2002. PERTINENTLY, IN PARA 2.3 OF THE ORDER OF THE CIT(A) , A REFERENCE HAS BEEN MADE TO A COMMUNICATION OBTAINED FROM THE ENGINEER, PMC DATED 6-12- 2005 WHEREIN IT HAS BEEN STATED THAT THE PROJECT IN QUESTION WAS APPROVED BY PMC AS A RESIDENTIAL-CUM-COMMERCIAL PROJECT. FA CTUALLY, IT IS ALSO CLEAR THAT OUT OF THE TOTAL CONSTRUCTED AREA, AN AREA OF 13,248.96 SQ. FT. IS CONSISTING OF COMMERCIAL AREA WHICH IS APPROXIMATEL Y 6.7% OF THE TOTAL CONSTRUCTED AREA OF THE PROJECT. 8. AT THIS POINT, WE MAY REFER TO CLAUSE (D) TO SEC . 80-IB(10) OF THE ACT WHICH HAS BEEN INSERTED BY THE FINANCE (NO. 2) ACT, 2004 W.E.F. 1-4-2005 WHICH READS AS UNDER: THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCIA L ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED FIV E PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR T WO THOUSAND SQUARE FEET, WHICHEVER ISLES. 9. IN TERMS OF THE AFORESAID PROVISION, THE CASE OF THE REVENUE IS THAT THE SAME REFLECTS THE MEANING OF EXPRESSION HOUSIN G PROJECT WHICH IS TO BE UNDERSTOOD AS A PURELY RESIDENTIAL PROJECT NOT I NVOLVING ANY COMMERCIAL AREA. SECONDLY, IT IS POINTED OUT THAT THE COMMERC IAL AREA IN THE INSTANT CASE IS 13,248.96 SQ.FT. WHICH IS MORE THAN THE PER MISSIBLE AREA OF 2000 SQ.FT. OR 5% OF THE TOTAL BUILT-UP AREA WHICHEVER I S LESS AS PROVIDED IN CLAUSE (D) OF SEC. 80-IB(10) OF THE ACT. 10. IN OUR CONSIDERED OPINION, RELIANCE PLACED BY T HE REVENUE ON CLAUSE (D) TO SEC. 80-IB(10) OF THE ACT TO DEFEAT THE ASSE SSEES CLAIM FOR DEDUCTION IN THE PRESENT CASE IS QUITE MISPLACED. FIRSTLY, THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) HAS LAID DOWN THAT THE SAID PROVISION IS PROSPECTIVE AND NOT RETROSPECTIVE IN NATURE AND THEREFORE, IT CANNOT BE APPLIED RETROSPECTIVELY . FURTHER, THE PLEA OF THE REVENUE THAT ONLY A PURE HOUSING PROJECT IS ELI GIBLE FOR DEDUCTION IS ALSO COMPLETELY MISPLACED HAVING REGARD TO THE JUDG MENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA). IN THE CASE BEFORE THE HONBLE BOMBAY HIGH COURT, THE PROJECT C ONSISTED OF 15 RESIDENTIAL BUILDINGS AND TWO COMMERCIAL BUILDINGS AND IT WAS NOTICED THAT LOCAL AUTHORITY HAD APPROVED THE PROJECT AS RESIDEN TIAL-CUM-COMMERCIAL. THE HONBLE BOMBAY HIGH COURT EXPLAINED THAT SINCE EXPRESSION HOUSING PROJECT WAS NOT DEFINED UNDER THE ACT, ITS MEANING WOULD HAVE TO BE GATHERED FROM THE RULES AND REGULATIONS FRAMED BY T HE APPROVING LOCAL AUTHORITY. THE HONBLE HIGH COURT EXPLAINED THAT S INCE A LOCAL AUTHORITY COULD APPROVE THE PROJECT TO BE A HOUSING A PROJECT WITH OR WITHOUT COMMERCIAL USER, IT WAS THEREFORE, THE INTENT OF TH E LEGISLATURE THAT DEDUCTION ENVISAGED U/S 80-IB(10) OF THE ACT WAS AL LOWABLE TO SUCH HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY WI THOUT OR WITH COMMERCIAL USER TO THE EXTENT PERMITTED BY THE RULE S OF LOCAL AUTHORITY. THOUGH, THE ASSESSMENT YEAR BEFORE THE HONBLE BOMB AY HIGH COURT WAS PRIOR TO 1-4-2005, IT CONSIDERED CLAUSE (D) OF SEC. 80-IB(10) OF THE ACT AS INSERTED BY THE FINANCE (NO. 2) ACT, 2004 AND HELD THE ASSESSEE ELIGIBLE FOR DEDUCTION U/S 80-IB(10) OF THE ACT. IN THE INSTAN T CASE BEFORE US, THE PARITY OF REASONING LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) IS WHOLLY APPLICA BLE. THE PROJECT BEFORE US HAS BEEN APPROVED BY THE LOCAL AUTHORITY I.E. PM C AS A RESIDENTIAL-CUM- COMMERCIAL PROJECT AND THEREFORE, IT QUALIFIES TO BE SEEN IN THE SAME MANNER AS EXPLAINED BY THE HONBLE BOMBAY HIGH COUR T IN THE CASE OF BRAHMA ASSOCIATES (SUPRA). THEREFORE, THE AFORESAI D OBJECTION RAISED BY 4 THE REVENUE TO DIS-ENTITLE THE ASSESSEE FROM CLAIMI NG OF DEDUCTION U/S 80- IB(10) OF THE ACT IS UNTENABLE. 11. NOW, WE MAY TAKE UP THE SECOND OBJECTION RAISED BY THE REVENUE WHEREBY, IT IS STATED THAT THE BUILT-UP AREA OF SOM E OF THE UNITS EXCEEDED 1500 SQ.FT., WHICH WAS THE LIMIT PRESCRIBED IN CLAU SE (C) OF SEC. 80-IB(10) OF THE ACT. AS PER THE REVENUE, SINCE SOME OF THE UNITS VIOLATED THE CONDITION PRESCRIBED IN CLAUSE (C) OF SEC. 80-IB(10 ), PROFITS FROM SUCH PROJECT ARE INELIGIBLE FOR CLAIMING DEDUCTION U/S 8 0-IB(10) OF THE ACT. 12. ON THIS ASPECT, THE FACTS ARE THAT AFTER INCLUD ING THE AREA COVERED BY TERRACE AND BALCONIES, THE BUILT-UP AREA EXCEEDED 1 500 SQ.FT. ON THIS ASPECT, THE CIT(A) HAS HELD THAT EXPRESSION BUILT- UP AREA HAS BEEN EXPLAINED IN SECTION 80-IB(14)(A) OF THE ACT TO INC LUDE PROJECTIONS AND BALCONIES AND THEREFORE, THE STAND OF THE ASSESSING OFFICER TO THE EFFECT THAT SOME OF THE RESIDENTIAL UNITS VIOLATED THE CON DITIONS PRESCRIBED IN CLAUSE (C) OF SEC. 80-IB(10) OF THE ACT WAS IN ORDE R. 13. IN THIS BACKGROUND, THE CLAIM OF THE ASSESSEE I S THAT THE PROJECT IN QUESTION COMMENCED PRIOR TO 1-4-2005 AND THEREFORE, THE DEFINITION OF BUILT-UP AREA PRESCRIBED IN SEC. 80-IB(14)(A) WOU LD NOT APPLY AS THE SAID SECTION WAS INSERTED BY THE FINANCE (NO 2) ACT, 200 4 W.E.F. 1-4-2005. THE LEARNED COUNSEL RELIED ON THE FOLLOWING DECISIO NS IN SUPPORT OF HIS SUBMISSION:- I) ITO VS. PRIME PROPERTIES (ITA NO. 887, 888 & 889 /PN/2010 FOR A.Y. 2003-04 TO 2005-06) VIDE ORDER DATED 26-4- 2012 II) HAWARE CONSTRUCTIONS (P) LTD. VS. ITO (2011) 64 DTR (MUM) 251. 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SU BMISSIONS. THE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB(10) OF THE ACT HAS BEEN OBJECTED TO ON ACCOUNT OF SUB-CLAUSE (C) OF SECTION 80-IB(10) OF THE ACT. SUB-CLAUSE (C) OF SECTION 80-IB(10) OF THE AC T REQUIRED THAT IN ORDER TO BE ELIGIBLE FOR DEDUCTION, BUILT UP AREA OF RES IDENTIAL UNITS IN CITIES OTHER THAN DELHI OR BOMBAY SHALL NOT EXCEED 1500 SQ.FT. A S PER THE REVENUE FEW RESIDENTIAL UNITS CONTAINED IN THE HOUSING PROJECT UNDERTAKEN BY THE ASSESSEE HAD A BUILT UP AREA EXCEEDING 1500 SQ.FT. SINCE FEW UNITS VIOLATED THE CONDITION PRESCRIBED IN SUB-CLAUSE (C) OF SECTION 80-IB(10) OF THE ACT DEDUCTION FOR THE ENTIRE PROJECT WAS DENIED IN COMING TO SUCH COMPUTATION OF BUILT UP AREA, THE REVENUE HAS RELIE D UPON SUB-CLAUSE (A) OF SECTION 80-IB(14)(A) WHICH EXPLAINS THE EXPRESSI ON BUILT UP AREA TO MEAN THE INNER MEASUREMENT OF THE RESIDENTIAL UNITS AT THE FLOOR LEVEL INCLUDING THE PROJECTIONS AND BALCONIES AS INCREASE D BY THE THICKNESS OF WALLS BUT EXCLUDING THE COMMON AREAS SHARED WITH OT HER RESIDENTIAL UNITS. NO DOUBT, ON AN APPLICATION OF SUCH A DEFINITION OF BUILT UP AREA, THE CASE SET UP BY THE REVENUE IS POTENT. SO HOWEVER, IN TH E PRESENT CASE, THE ISSUE IS AS TO WHETHER SUCH DEFINITION OF THE BUILT -UP AREA INSERTED BY THE FINANCE (NO. 2) ACT, 2004 W.E.F. 1-4-2005 IS APPLIC ABLE OR NOT. OSTENSIBLY, PRIOR TO 1-4-2005, THERE WAS NO SUCH DEFINITION OF THE EXPRESSION BUILT UP AREA IN THE STATUTE AND LOGICALLY, ONE HAD TO CONS IDER THE BUILT UP AREA AS PER LOCAL MUNICIPAL DEVELOPMENT CONTROL RULES FOLLO WED BY THE APPROVING AUTHORITIES WHICH IN THE PRESENT CASE IS PUNE MUNIC IPAL CORPORATION (PMC).IN THE CASE BEFORE US, THE PROJECT OF THE ASS ESSEE HAS OSTENSIBLY COMMENCED PRIOR TO INTRODUCTION OF SEC. 80-IB(14)(A ) OF THE ACT AND THEREFORE, THE AMENDMENT WHICH HAS COME INTO EFFECT BY WAY OF SEC. 80- IB(14)(A) OF THE ACT W.E.F. 1-4-2005 WOULD NOT AFFE CT SUCH A PROJECT. THE 5 AFORESAID PROPOSITION IS IN LINE WITH PRECEDENT BY WAY OF DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF G.K. BUILDERS IN ITA NO. 1077 & 1078/PN/2010 FOR A.Y. 2005-06 & 2006-07 VIDE ORDER DATED 30-7-2012. IN THE CASE OF G.K. BUILDERS (SUPRA) THE AFORESAID PRO POSITION WAS AFFIRMED FOLLOWING THE EARLIER DECISIONS OF THE TRIBUNAL IN THE CASE OF TUSHAR DEVELOPERS IN ITA NO. 165/PN/2007 AND 94/PN/2007 FO R A.Y. 2003-04 AND 2004-05 VIDE ORDER DATED 31-5-2011 AND HAWARE CONST RUCTIONS (P) LTD. VS. ITO (2011) 64 DTR (MUM) 251. THE FOLLOWING DIS CUSSION IN THE ORDER OF THE TRIBUNAL IN THE CASE OF G.K. BUILDERS (SUPRA ) IS RELEVANT:- AFTER GOING THROUGH THE ABOVE SUBMISSIONS AND MATE RIAL ON RECORD, WE ARE NOT INCLINED TO CONCUR WITH THE FIND ING OF THE CIT(A). THE DEDUCTION UNDER QUESTION HAS BEEN REJE CTED BY THE AO AND CONFIRMED BY THE CIT(A) ON THE GROUND TH AT IT EXCEEDED THE PRESCRIBED LIMIT WITH RESPECT TO ROW H OUSE NO. 36. ACCORDINGLY, THE WHOLE PROJECT WAS REJECTED. THE AO HAS REACHED TO THE CONCLUSION AFTER INCLUDING THE TERRA CE AREA OF 108 SQ.FT. IN BRAHMA BUILDERS (SUPRA) WHETHER THE TERRACE IN BUILT UP AREA COMES ONLY W.E.F 1-4-2005 BECAUSE THE DECISION IS INTRODUCTION IN THE SECTION W.E.F. THE SAID DATE . FOR THE PERIOD PRIOR TO 1-4-2005, NO SUCH DEFINITION WAS ON THE STATUTE AND HENCE, THE BUILT UP AREA HAS TO BE CONS IDERED AS PER THE DC RULE OF THE SANCTIONING AUTHORITY. THE DC RULES DO NOT INCLUDE TERRACE IN THE BUILT UP AREA. SO THE AM ENDMENT WHICH HAS COME IN THIS REGARD W.E.F. 1-4-2005 WILL NOT AFFECT THE PROJECTS WHICH HAVE COMMENCEMENT PRIOR TO 1-4-2 005. THIS ISSUE HAS BEEN DECIDED FOLLOWING TUSHAR DEVELO PERS IN ITA NO. 165/PN/2007 AND 94/PN/2007 IN FAVOUR OF ASS ESSEE AND IN HAWARE CONSTRUCTIONS (P) LTD. SIMILAR VIEW HAS BEEN TAKEN WHEREBY IT WAS HELD THAT TUSHAR DEVELOPERS IS NOT INCLUDIBLE IN BUILT UP AREA OF THE FLAT PRIOR TO 1- 4-2005 AND HENCE FOR THE PROJECT COMMENCED BEFORE 1-4-2005, TE RRACE IS NOT INCLUDIBLE IN THE BUILT UP AREA. IN VIEW OF TH IS, ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80-IB(10) AS CLAIMED. 15. FOLLOWING THE AFORESAID OBSERVATIONS, WE THEREF ORE, HOLD THAT SINCE THE PROJECT OF THE ASSESSEE COMMENCED PRIOR TO 1-4- 2005 THE DEFINITION OF BUILT UP AREA AS PROVIDED IN SEC. 80-IB(14)(A) CA NNOT BE APPLIED IN THIS CASE SO AS TO EVALUATE THE CONDITION PRESCRIBED IN SUB-CLAUSE (C) OF SECTION 80IB(10) OF THE ACT. UNDER THESE CIRCUMSTANCES, TH E LIMIT OF BUILT UP AREA PRESCRIBED IN SUB-CLAUSE (C) OF SECTION 80-IB(10) O F THE ACT HAS TO BE UNDERSTOOD ON THE BASIS OF LOCAL DEVELOPMENT RULES WHICH DOES NOT INCLUDE TERRACE/CANOPY. IF THE AREAS COVERED BY THE TERRACE /CANOPY ARE EXCLUDED, THE BUILT UP AREA OF THE THREE ROW HOUSES IN QUESTI ON DOES NOT EXCEED THE LIMIT OF 1500 SQ.FT. PRESCRIBED IN SEC. 80-IB(10)(C ) OF THE ACT. IN THIS VIEW OF THE MATTER, THE AFORESAID OBJECTION RAISED BY TH E REVENUE TO DIS-ENTITLE THE ASSESSEE FROM CLAIMING OF DEDUCTION U/S 80-IB(1 0) OF THE ACT IS UNTENABLE. IN VIEW OF THE AFORESAID DISCUSSIONS, TH EREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICE R TO ALLOW THE DEDUCTION U/S 80-IB(10) OF THE ACT AS CLAIMED BY THE ASSESSEE AND THE ASSESSEE SUCCEEDS IN ITS APPEAL FOR A.Y. 2003-04. . 16. NOW, WE MAY COME TO THE APPEALS OF THE ASSESSEE FOR THE REMAINING ASSESSMENT YEARS OF 2004-05, 2005-06 AND 2006-07. IN THESE APPEALS ALSO, THE ISSUE PERTAINS TO DENIAL OF DEDUCTION U/S 80-IB(10) OF THE ACT IN RELATION TO PROFITS AND GAINS FROM THE PROJECT CIT ADEL. THE OBJECTION OF THE REVENUE TO ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB (10) IN THE AFORESAID YEARS IS SIMILAR TO THAT OF THE ASSESSMENT YEAR 200 3-04. SUCH OBJECTIONS HAVE BEEN DEALT WITH BY US IN THE PRECEDING PARAGRA PHS WHILE DEALING WITH THE APPEAL FOR A.Y. 2003-04. OUR CONCLUSION IN ASS ESSEES APPEAL FOR A.Y. 6 2003-04 WOULD SQUARELY APPLY TO THE SAID ASSESSMENT YEARS ALSO. HOWEVER, ONE OF THE ASPECTS WHICH REQUIRES A LITTLE DISCUSSION IS AS FOLLOWS: FOR THE EARLIER ASSESSMENT YEAR, THE OBJECTION OF T HE REVENUE BASED ON CLAUSE (D) OF SEC. 80-IB(10) OF THE ACT HAS BEEN NE GATED BY US ON THE GROUND THAT SUCH AMENDMENT WAS MADE BY THE FINANCE (NO. 2) ACT, 2004 W.E.F. 1-4-2005 AND WOULD NOT OPERATE RETROSPECTIVE LY. SINCE IN THE ASSESSMENT YEAR UNDER CONSIDERATION VIZ. 2005-06 AN D 2006-07, THE AFORESAID AMENDMENT IS ON THE STATUTE, THE CASE SET UP BY THE REVENUE IS THAT THE CLAIM FOR DEDUCTION BE GOVERNED ON THE BAS IS OF SUCH AMENDMENT. ON THIS ASPECT, THE POINT TO BE CONSIDERED IS AS TO WHETHER THE RESTRICTION OF COMMERCIAL AREA PRESCRIBED IN SEC. 80-IB(10)(D ) OF THE ACT AS INSERTED BY THE FINANCE (NO. 2) ACT, 2004 W.E.F 1-4-2005 CAN BE MADE APPLICABLE TO A PROJECT WHICH HAS BEEN APPROVED AND COMMENCED PRI OR TO 1-4-2005. SIMILAR CONTROVERSY HAS BEEN THE SUBJECT MATTER OF CONSIDERATION BY PUNE BENCH OF THE TRIBUNAL IN THE CASE OF OPEL SHELTERS (SUPRA) AS ALSO IN THE CASE OF HIRANANDANI AKRUTI JV (SUPRA). IN THE AFOR ESAID PRECEDENTS, IT HAS BEEN HELD THAT THE PROVISIONS OF SEC. 80-IB(10)(D) OF THE ACT, AS INSERTED BY THE FINANCE (NO. 2) ACT, 2004 W.E.F. 1-4-2005, S HALL APPLY TO THE PROJECTS COMMENCING ON OR AFTER 1-4-2005. THE PRIM ARY REASON MADE OUT IS TO THE EFFECT THAT THE ASSESSEE HAVING COMMENCED ITS PROJECT PRIOR TO 1- 4-2005 IN TERMS OF THE APPROVAL GRANTED BY A LOCAL AUTHORITY COULD NOT HAVE ENVISAGED THE LEGISLATIVE ACTION OF PUTTING TH E RESTRICTION CONTAINED IN CLAUSE (D) OF SEC. 80-IB(10) OF THE ACT W.E.F. 1-4- 2005. IN THIS BACKGROUND OF THE MATTER, WE FIND THAT EVEN FOR A.Y . 2005-06 AND 2006-07 THE OBJECTION OF THE REVENUE IS UNSUSTAINABLE. PER TINENTLY, THE PROJECT OF THE ASSESSEE IN QUESTION I.E. CITADEL COMMENCED D EVELOPMENT AND CONSTRUCTION PRIOR TO 1-4-2005 AND IN FACT STANDS C OMPLETED ON 23-2-2004 AS NOTED BY THE CIT(A) IN PARA 2.1 OF THE IMPUGNED ORDER. THEREFORE, CLAUSE (D) TO SEC. 80IB(10) OF THE ACT INSERTED BY THE FINANCE (NO. 2) ACT, 2004 W.E.F. 1-4-2005 CANNOT BE INVOKED TO DIS-ENTIT LE THE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB(10) OF THE ACT FOR A.Y. 200 5-06 AND 2006-07 AS WELL. 17. ON THE SIMILAR PARITY OF REASONING, FURTHER OBJ ECTION OF THE REVENUE BASED ON BUILT-UP AREA INSERTED BY THE FINANCE (NO. 2) ACT, 2005 W.E.F. 1- 4-2005 IN SECTION 80-IB(14)(A) WOULD ALSO NOT HINDE R THE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB(10) FOR THE REASON THAT ITS PROJECT HAD COMMENCED PRIOR TO 1-4-2005. THEREFORE, APPEALS FOR A.Y. 2005 -06 AND 2006-07 ARE ALSO ALLOWED. 7. WE, THEREFORE, FOLLOWING THE DECISION OF THE TRI BUNAL IN ASSESSEES OWN CASE ALLOW THE GROUND TAKEN BY THE ASSESSEE. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 25 TH OF FEBRUARY, 2013. SD/- SD/- (G.S. PANNU) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUD ICIAL MEMBER PUNE DATED: THE 25 TH FEBRUARY 2013 SATISH 7 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-II, PUNE 4. CIT-II, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE