The ITO, Ward-3(2), Baroda V. M/s. Shivhari Developers, Baroda

ITA 1734/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1548 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 23-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 11A; 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ITA NO. 1734 /AHD/20 1 3 / ASSESS MENT YEAR: 2009 - 10 INCOME TAX OFFICER, WARD 3 (2), BARODA VS M/S. SHIV H ARI DEVELOPERS, 26, PARUL PARK SOCIETY, NEW SAMA ROAD, BARODA PAN : ABJFS 3542 D / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI ALOK KUMAR, SR. D R. ASSESSEE(S) BY : NONE (WRITTEN SUBMISSIONS) / DATE OF HEARING : 23 / 0 5 /201 6 / DATE OF PRONOUNCEMENT: 23 / 05 /201 6 / O R D E R PER KUL BHARAT, JUDICIAL MEMBER : THI S APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - II, BARODA DATED 28 . 03 .20 1 3, PERTAINING TO ASSESSMENT YEAR 2009 - 10 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1 . ON THE FACTS AND IN THE CI RCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A P P EALS ) ERRED IN ALLOWING DEDUCTION OF RS.1,07,62,655/ - U/S 80IB(10) OF THE INCOME - TAX ACT WITHOUT APPRECIATING THAT THE NATURE OF AGREEMENT BETWEEN THE ASSESSEE AND THE UNIT PURCHASERS SHOWS THAT IT WAS ONL Y A WORKS CONTRACT IN SO FAR AS THE AGREEMENT ENTERED INTO BEFORE THE CONSTRUCTIONS WAS COMPLETE AND NOT AFTER THE FLAT OR UNIT WAS CONSTRUCTED. 2 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) ERRED IN ALLOWING DEDUCT ION U/S 80IB(10) R.W.S. 80IB(1) TO THE ASSESSEE ON THE PROFIT DERIVED FROM SALE OF UN U TILIZED FSI OF RS.16,93,117/ - NOT BEING THE ELEMENT OF PROFITS DERIVED FROM THE BUSINESS ACTIVITY OF DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT RELATING TO THE S ALE OF TENEMENTS. 3 . THE APPELLANT CRAVES LEAVE TO ADD , AMEND OR ALTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. ITA NO. 1734/AHD/ 2013 ITO VS. SHIVHARI DEVELOPERS FOR AY 2009 - 10 2 3. AT THE TIME OF HEARING, NO ONE APPEARED ON BEHALF OF THE ASSESSEE; HOWEVER, A WRITTEN SUBMISSION DATED 07.05.2016 WAS FILED REQUESTING T HAT THE APPEAL BE DECIDED ON THE BASIS OF THE WRITTEN SUBMISSION. 4. THE FIRST GROUND IS AGAINST THE DELETION OF ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION OF RS.1,07,62,655/ - MADE U/S 80IB(10) OF THE ACT. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE DEDUCTION. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO SUBMITTED THAT THE ASSESSING OFFICER HAS ENUMERATED THE REASONS FOR REJECTING THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. ON THE CONTRARY, THE SUBMISSIONS OF THE ASSESSEE ARE THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RADHE DEVELOPERS, REPORTE D IN [2012] 17 TAXMANN.COM 156 (GUJARAT). 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS SUBMITTED IN ITS WRITTEN SUBMISSION AS UNDER: - AT THE OUTSET IT IS TO SUBMIT THAT THE JUDGMENT DELIVERED BY THE HON'BLE GUJARAT HIGH COURT IN CASE OF COMMISSIONER OF INCOME - TAX VS. RADHE DEVELOPERS* [2012] 17 TAXMANN.COM 156 (GUJARAT) IS SQUARELY APPLICABLE TO APPELLANT'S CASE. FURTHER, IT IS TO STATE & SUBMIT AS UNDER : - THE PARTNERSHIP HAS COMMENCED BUSINESS O F DEVELOPING OF LAND AND BUILDING HOUSING PROJECT AT R.S. NO. 209/1 AT SAWAD, DIST : VADODARA VIZ. PUNCHAM DUPLEX & TENAMENTS. THE PROJECT IS STARTED ON PLOT OF LAND HAVING SIZE OF MORE THAN 1 ACRE (43560 SQ.FEET) FOR CONSTRUCTION OF RESIDENTIAL UNITS HAVI NG BUILD UP AREA OF LESS THAN 1500 SQ.FEET. THE HOUSING PROJECT IS APPROVED BY VADODARA MUNICIPAL CORPORATION VIDE THEIR PERMISSION NO. WARD /9/L - 171/2005 - 2006 DATED 09/01/2006. FURTHER, BEFORE GOING TO THE OBJECTIONS AND CONTENTIONS RAISED BY THE 'A.O', IT IS NECESSARY TO UNDERSTAND THE SCHEME OF THE ACT IN SO FAR AS DEDUCTION ITA NO. 1734/AHD/ 2013 ITO VS. SHIVHARI DEVELOPERS FOR AY 2009 - 10 3 UNDER SEC.80IB(10) OF THE ACT IS CONCERNED. IN ORDER TO DEAL WITH THE ISSUE, IT WILL BE NECESSARY TO EXAMINE THE PROVISIONS OF SEC.80IB OF THE ACT WHICH READS AS UNDER: - S. 80IB : '(1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUDES ANY PROFITS AND GAINS DERIVED FROM ANY BUSINESS REFERRED TO IN SUB - SECTIONS (3) TO (11) AND 11A (SUCH BUSINESS BEING HEREINAFTER REFERRED TO AS THE ELIGIBLE BUSINESS), THERE SHALL, IN ACCORDANCE WIT H AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION FROM SUCH PROFITS AND GAINS OF AN AMOUNT EQUAL TO SUCH PERCENTAGE AND FOR SUCH NUMBER OF ASSESSMENT YEARS AS SPECIFIED IN THIS SECTION. XXXXXXXXXX S.80IB : (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH, 2005 ( EXTENDED TO MARCH 2008) BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998. (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE; AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT - UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY - FIVE KILOMETR ES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. (11) THUS , IN ORDER TO CLAIM DEDUCTION UNDER THE SAID SECTION, THE FOLLOWING CONDITIONS SHALL HAVE TO DC COMPLIED WITH: (A) THE HOUSING PR OJECT SHOULD BE APPROVED BY A LOCAL AUTHORITY. (B) THE SAID APPROVAL SHOULD HAVE BEEN GRANTED BEFORE 31/3/2005.( EXTENDED TO MARCH - 2008) ( C) THE SIZE OF THE PLOT OF LAND SHOULD BE AT THE MINIMUM OF 1 ACRE AND THE RESIDENTIAL UNIT SHOULD HAVE A BU ILT UP AREA NOT EXCEEDING 1500 SQ.FT. FOR THE CITY OF BARODA. (D) THE UNDERTAKING SHOULD HAVE COMMENCED DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT AFTER 30.9.1998. ITA NO. 1734/AHD/ 2013 ITO VS. SHIVHARI DEVELOPERS FOR AY 2009 - 10 4 AUDIT REPORT IN FORM NO 10CCB IN THIS RESPECT IS ALSO ATTACHED ALONGWITH RETURN O F INCOME. THE HONORABLE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD - 'A' BENCH IN CASE OF M/S. RADHE DEVELOPERS AND OTHERS STATED AS UNDER: BY VIRTUE OF AGREEMENT TO SALE' AND 'DEVELOPMENT AGREEMENT', WE HAVE ACQUIRED DOMINION OVER THE LAND TO EXCLUSION O F OTHERS AND WE HAVE COMPLETED THE PROJECT IN TERMS AND CONDITIONS LAID DOWN U/S. 80 - IB(10) OF THE ACT, TO CLAIM DEDUCTION ON THE PROFIT DERIVED FROM CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL HOUSING PROJECT. THERE IS NO EXPLICIT CONDITION ENUMERATED IN SECTION 80 - IB(10) OF THE ACT AS REGARDS TO REQUIREMENT OF OWNERSHIP FOR THE CLAIM OF DEDUCTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LEGAL PROPOSITION LAID DOWN BY THE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD.(SUPRA), WE ARE ENTITLED FOR CLAIM OF DEDUCTION ON THE PROFIT DERIVED FROM CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL HOUSING PROJECT. THEREFORE, LOOKING FROM ANY ANGLE, WE ARE IN A CONSIDERED OPINION, THAT TO CLAIM DEDUCTION FOR DEVELOPING AND BUILDING HOUSING PROJ ECT, IT IS NOT NECESSARY THAT ASSESSEE MUST BE AN OWNER OF THE LAND AND IT WOULD BE SUFFICIENT IF HE HAS AN UNDERTAKING, DEVELOPS AND BUILDS HOUSING PROJECT. THE ASSESSEE IS ALSO THE OWNER OF THE PROJECT, THOUGH THE TITLE DOES NOT VEST IN IT. ON PERUSAL O F DEVELOPMENT AGREEMENT ( COPY ENCLOSED ) YOUR HON OUR MAY REVEAL THAT THE RESPONDENT HAS PURCHASED LAND FOR A FIXED CONSIDERATION FROM THE LAND OWNERS AND HAS DEVELOPED THE HOUSING PROJECT AT I TS OUR OWN COST AND RISKS OF THE I NVOLVED I N THE PROJECT. FROM THE AFORESAID OVERALL SUBMISSION, CLAUSES OF THE DEVELOPMENT AGREEMENT AND LOOKING TO THE MODES OPER A NDI THE FOLLOWING FACTS ARE EMERGING. THE RESPONDENT HAS : - - TAKEN OVER THE COMPLETE POSSESSION OF LAND - DESIGN THE PLAN AS PER OUR VISION - CONTRIBUTE D THE EFFORTS TO OBTAIN PERMISSION AS WELL AS LA APPROVE PLAN FROM LOCAL AUTHORITY. - DEVELOPED THE LAND AND COMMON AMENITIES. - EXERCISED THE EFFORTS TO FIND OUT MEMBERS. - CONSTRUCTED THE UNITS AS PER APPROVED PLAN. - ENTERED INTO NECESSAR Y AGREEMENTS WITH MEMBERS. - HANDED OVER POSSESSION OF CONSTRUCTED UNITS TO RESPECTIVE MEMBERS. ACCORDINGLY, THE RESPONDENT IS FIT TO BE CALLED AS BUILDER/ DEVELOPER AND ENTITLED TO C LAIM DEDUCTION U/S 80IB(10) OF THE INCOME TAX ACT. ITA NO. 1734/AHD/ 2013 ITO VS. SHIVHARI DEVELOPERS FOR AY 2009 - 10 5 SINCE THE RESPONDENT FULFILL ALL THE CONDITIONS AS LAID DOWN U/S. 80IB (10) AS WELL AS DIRECTION OF THE RECENT ORDER OF HON'BLE INCOME TA X APPELLATE TRIBUNAL - AHMEDABAD, IN CASE OF SHAKT I DEVELOPER S AND OTHERS, THE RESPONDENT I S ELIGIBLE FOR CLAIMING DEDUCTION OF RS. 44,42,268/ - U/S .80IB(10) OF THE INCOME TAX ACT. THE FOLLOWING DOCUMENTS SUPPORTING OUR CLAIMS HAVE BEEN ENCLOSED DURING ASSESSMENT PROCEEDING. (I) COPY OF RAJA CHOTTHI (PERMISSION LETTER) (II) DEVELOPMENT AGREEMENT ( III) MAP ( IV) SAMPLE COPY OF SALE DEED (V) COMPLETION CERTIFICATE. I N VIEW OF THE ABOVE I T CAN BE REVEALED THAT RESPONDENT FULFILLS ALL CONDITIONS RELATING TO OWNERSHIP MENTIONED I N SEC. 80IB (10) OF THE INCOME TAX ACT AND THEREFORE IT I S PRAYED TO ALLOW DEDUCTION AS CLAIM ED I N RETURN OF INCOME. 5.1 WE FIND THAT THE ASSESSING OFFICER HAD REJECTED THE CLAIM OF DEDUCTION ON THE GROUND THAT THE PERMISSION BY THE LOCAL AUTHORITY IS NOT IN THE NAME OF THE ASSESSEE. ON THE CONTRARY, THE APPROVAL IS GIVEN BY VADODARA MUNICIPAL CORPORATION TO THE LAN D OWNERS. THE ISSUE WITH REGARD TO THE OWNERSHIP OF THE LAND HAS BEEN DECIDED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF RADHE DEVELOPERS (SUPRA) IN FAVOUR OF THE ASSESSEE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE FINDING S OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. THUS, FIRST GROUND OF THE REVENUES APPEAL IS DISMISSED. 6. GROUND NO.2 IS AGAINST ALLOWING THE DEDUCTION ON THE PROFIT DERIVED FROM THE SALE OF UNUTILIZED FSI OF RS.16,93,1 17/ - . THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF THE ASSESSING OFFICER IN THIS REGARD AND SUBMITTED THAT, IN VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MOON STAR DEVELOPERS, REPORTED IN (2014) 367 ITR 621 (GUJ), THE PROFIT DERIVED FROM SALE OF UNUTILIZED FSI IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10). HE FURTHER SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE DEDUCTION ON ITA NO. 1734/AHD/ 2013 ITO VS. SHIVHARI DEVELOPERS FOR AY 2009 - 10 6 THIS AMOUNT. ON THE CONTRARY, THE CONTENTION OF THE ASS ESSEE ON THIS ISSUE IS AS UNDER: THE APPELLAN T (DEPARTMENT) HAS WRONGLY TAKEN THE FIGURE OF UNUTILIZED FSI OF RS. 16,93,117/ - INSTEAD OF RS. 8,79,3487 - . IT IS TO STATE THAT THE ISSUE OF UNUSED FSI HAS BEEN SETTLED IN FAVOUR OF THE RESPONDENT BY THE HON 'BLE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD IN CASE OF RADHE DEVELOPERS & ORS VS. ITO & ORS ( REF.: 113 TTJ 300) THEREFORE NOW NOT IN RELEVANCE . THE HON'BLE TRIBUNAL HAS DELIVERED THE JUDGMENT STATING AS UNDER : THAT THE ASSESSEE HAVE CLAIMED DEDUCTIO N UNDER SECTION 80 - IB OF THE ACT FOR PROFIT DERIVED DURING THE YEAR UNDER CONSIDERATION FROM THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF A HOUSING PROJECT WHICH THOUGH INCLUDES PROFIT EARNED FROM SALES OF UNUTILIZED FSI OF THE HOUSING PROJECT ALSO AND THAT THE OTHER PART OF UNUTILIZED FSI RELATING TO THE APPROVED UNITS HAVE NOT BEEN CONSTRUCTED OR DEVELOPED BUT BEING SOLD DIRECTLY, ALTHOUGH AS AN UNRESTRICTIVE BUNDLE OF RIGHTS ATTACHED WITH THE SALE OF LAND PLOT. AS AFORESAID, THERE IS NO REQUIREMENT AS TO THE FSI UNDER THE SCHEME OF PROVISIONS OF SECTION 80 - 18(10). IN ANY CASE THE ASSESSEE HAS NOT SOLD FSI OF PLOT, EVEN IF THE UNUTILIZED FSI RIGHTS ARE AVAILABLE WITH THE ASSESSEE, IT IS THE ONLY WAY LEFT OUT OF UTILIZING SUCH UNUTILIZED FSI IS TO MAKE C ONSTRUCTION ON TOP OF THE GROUND FLOOR. THUS, THE CONCEPT OF ELEMENT OF UNUTILIZED FSI SOLD IS IMAGINARY AND BASED ON SURMISES AND CONJUNCTURES.' 7. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE, PERUSED THE WRITTEN SUBMISSION AS FILED BY THE ASSESSEE AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AS PER SECTION 80IB(10), THE PROFIT DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM THE HOUSING PROJECT WOULD BE ELIGIBLE FOR DEDUCTION. IN THE CASE IN HAND, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS CLAIMED DEDUCTION ON THE PROFIT RELATED TO SALE OF UNUTILIZED FSI, AMOUNTING TO RS.8,79,348/ - . THE ASSESSEE HAS ADMITTED THE FACTUM OF RS.8,79,348/ - AS THE PROFIT DERIVED FROM UNUTILIZED FSI; HOWEVER, THE REVENUE HAS T AKEN THE FIGURE AS 16,93,117/ - . THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MOON STAR DEVELOPERS (SUPRA), HAS HELD AS UNDER: - ITA NO. 1734/AHD/ 2013 ITO VS. SHIVHARI DEVELOPERS FOR AY 2009 - 10 7 32 IT IS TRU E THAT SECTION 80IB(10) OF THE ACT DOES NOT PROVIDE THAT FOR DEDUCTION, THE UNDERTAKING MUST UTILIZE 100% OF THE FSI AVAILABLE THE QUESTION HOWEVER IS, CAN AN UNDERTAKING UTILIZE ONLY A SMALL PORTION OF THE AVAILABLE AREA FOR CONSTRUCTION, SELL THE PROPERTY LEAVING AMPLE SCOPE FOR THE PURCHASER TO CARRY ON FURTHER CONSTRUCTION ON HIS OWN AND CLAIM FULL DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON THE PROFIT EARNED ON SALE OF THE PROPERTY 7 IF THIS CONCEPT IS ACCEPTED, IN A GIVEN CASE, AN ASSESSEE MAY PUT UP CONSTRUCTION OF ONLY 100 SQ FT. ON THE ENTIRE AREA OF ONE ACRE OF PLOT AND SELL THE SAME TO A SINGLE PURCHASER AND CLAIM FULL DEDUCTION ON THE PROFIT ARISING OUT OF SUCH SALE UNDER SECTION 80IB(10) OF THE ACT. SURELY , THIS CANNOT BE STATED TO BE DEVELOPMENT O F A HOUSING PROJECT QUALIFYING FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THIS IS NOT TO SUGGEST THAT FOR CLAIMING DEDUCTION UNDER SECTION 80IB_(10) OF THE ACT, INVARIABLY IN ALL CASES, THE ASSESSEE MUST UTILIZE THE FULL FSI AND ANY SHORTAGE IN SUCH U TILIZATION WOULD INVITE WRATH OF THE CLAIM UNDER SECTION 80IB(10), BEING REJECTED. THE QUESTION IS WHERE DOES ONE DRAW THE LINE IN OUR OPINION, THE ISSUE HAS TO BE SEEN FROM CASE TO CASE BASIS MARGINAL UNDER - UTILIZATION OF FSI CERTAINLY CANNOT BE A GROUND FOR REJECTING THE CLAIM UNDER SECTION 80IB(10) OF THE ACT. EVEN IF THERE HAS BEEN CONSIDERABLE UNDER - UTILIZATION, IF THE ASSESSEE CAN POINT OUT ANY SPECIAL GROUNDS WHY THE FSI COULD NOT BE FULLY UTILIZED, SUCH AS ,HEIGHT RESTRICTION BECAUSE OF SPECIAL ZONE, P ASSING OF HIGH TENSION ELECTRIC WIRES OVERHEAD, OR ANY SUCH SIMILAR GROUNDS TO JUSTIFY UNDER UTILIZATION, THE CASE MAY STAND ON A DIFFERENT FOOTING. HOWEVER, IN CASES WHERE THE UTILIZATION OF FSI IS WAY SHORT OF THE PERMISSIBLE AREA OF CONSTRUCTION, LOOKING T O THE SCHEME OF SECTION 80IB(10) OF THE ACT AND THE PURPOSE OF GRANTING DEDUCTION ON THE INCOME FROM DEVELOPMENT OF HOUSING PROJECTS ENVISAGED THERE UNDER, BIFURCATION OF SUCH PROFITS ARISING OUT OF SUCH ACTIVITY AND THAT ARISING OUT OF THE NET SELL OF FSI M UST BE RESORTED TO IN THE PRESENT CASE, NONE OF THE ASSESSEES HAVE MADE ANY SPECIAL GROUND FOR NON - UTILIZATION OF THE FSI 32 THE CONTENTION OF THE COUNSEL FOR THE ASSESSEE THAT AS LONG AS THERE HAS BEEN 100% UTILIZATION OF THE MAXIMUM PERMISSIBLE AREA ON TH E GROUND FLOOR, DEDUCTION UNDER SECTION 80IB(10) OF THE ACT CANNOT BE DECLINED, CANNOT BE ACCEPTED AS NOTED EARLIER, IN CASE OF M/S. MOON STAR DEVELOPERS AND MANY OTHER ASSESSES, SUCH FULL UTILIZATION OF THE GROUND FLOOR AREA AVAILABLE FOR CONSTRUCTION RESUL TED INTO BARELY 20% TO 25% OF THE FSI BEING USED, REMAINING MORE THAN 75% BEING LEFT UNUSED. 33 WHAT IS AVAILABLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IS THE PROFIT OF AN UNDERTAKING DERIVED FROM DEVELOPING AND BUILDING A HOUSING PROJECT. MERE S ALE OF OPEN LAND OR UNUSED FSI AS PART OF THE HOUSING PROJECT WHERE UTILIZATION OF THE FSI IS WAY SHORT OF PERMISSIBLE LIMITS CANNOT BE SAID TO HAVE BEEN DER IVED FROM SUCH HOUSING PROJECT . ITA NO. 1734/AHD/ 2013 ITO VS. SHIVHARI DEVELOPERS FOR AY 2009 - 10 8 T H E R E F O R E , R E S P E C T F U L L Y F O L L O W I N G T H E J U D G M E N T O F H O N B L E G U J A R A T H I G H C O U R T I N T H E C A S E O F M O O N S T A R D E V E L O P E R S ( S U P R A ) , W E H E R E B Y S E T A S I D E T H E O R D E R O F T H E L D . C I T ( A ) A L L O W I N G T H E DEDUCTION O N T H E P R O F I T D E R I V E D F R O M U N U T I L I Z E D F S I A N D D I R E C T T H E A S S E S S I N G O F F I C E R T O V E R I F Y T H E Q U A N T U M O F P R O F I T R E L A T E D T O F S I A S T H E R E I S A D I F F E R E N C E I N T H E F I G U R E A D O P T E D B Y T H E A S S E S S I N G O F F I C E R A N D C L A I M E D B Y T H E R E V E N U E I N T H E G R O U N D S O F A P P E A L . A F T E R V E R I F Y I N G T H E S A M E , T H E A S S E S S I N G O F F I C E R W O U L D R E S T R I C T T H E D I S A L L O W A N C E T O T H E E X T E N T O F T H E P R O F I T R E L A T A B L E T O U N U T I L I Z E D F S I S O L D B Y T H E A S S E S S E E . A C C O R D I N G L Y , T H I S G R O U N D O F T H E R E V E N U E S A P P E A L I S A L L O W E D A S D I S C U S S E D H E R E I N A B O V E . 8 . IN THE RESULT, T H E A P P E A L O F T H E R E V E N U E I S P A R T L Y A L L O W E D . ORDER PRONOUNCED IN THE COURT ON 2 3 R D M A Y , 2016 AT AHMEDABAD. SD/ - SD/ - ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER AHMEDABAD; DATED 2 3 / 0 5 /201 6 BIJU T., PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A ) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD