Deputy Commissioner of Income-tax, V. Namrata Developers - Flora City, Pune

ITA 1866/PUN/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6758 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 15-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Assessee Lawyers: NITIN KHARE
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1795/PN/2012 (ASSESSMENT YEAR : 2009-10) INCOME TAX OFFICER, WARD 8 (3), PUNE. . APPELLANT VS. M/S NAMRATA DEVELOPERS FLORA CITY, 592, RAVIWAR PETH, TELEGAON-DABHADE, TALUKA MAVAL, PUNE 410 506. PAN : AAAAN4708K . RESPONDENT ITA NO.1866/PN/2013 (ASSESSMENT YEAR : 2010-11) DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 2(1), PUNE. . APPELLANT VS. M/S NAMRATA DEVELOPERS FLORA CITY, 592, RAVIWAR PETH, TELEGAON-DABHADE, TALUKA MAVAL, PUNE 410 506. PAN : AAAAN4708K . RESPONDENT DEPARTMENT BY : MR. A. K. MODI ASSESSEE BY : MR. NITIN KHARE DATE OF HEARING : 25-06-2014 DATE OF PRONOUNCEMENT : 25-07-2014 ORDER PER G. S. PANNU, AM THE TWO CAPTIONED APPEALS RELATE TO DIFFERENT ASSES SMENT YEARS INVOLVING SAME ASSESSEE AND SINCE THE ISSUE RAISED IS COMMON, THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND ARE BEING DISPO SED-OFF BY WAY OF A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. BOTH THE APPEALS ARE DIRECTED AGAINST THE RESPEC TIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, PUNE DATED 14.06.2012 AND 02.07.2013 WHICH, IN TURN, HAVE ARISEN FROM THE RES PECTIVE ASSESSMENT ORDERS ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 DATED 30.12.2011 AND 14.03.2013, PASSED BY THE ASSE SSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) PE RTAINING TO THE ASSESSMENT YEARS 2009-10 AND 2010-11 RESPECTIVELY. 3. IN BOTH THE APPEALS, THE ONLY GRIEVANCE OF THE R EVENUE IS THAT THE CIT(A) ERRED IN HOLDING THAT THE ASSESSEE SATISFIES ALL THE CONDITIONS STIPULATED IN SECTION 80IB(10) OF THE ACT. 4. IN BRIEF, THE RELEVANT FACTS, WHICH ARE COMMON T O BOTH THE ASSESSMENT YEARS, CAN BE SUMMARIZED AS FOLLOWS. WE MAY REFER TO THE FACTS IN THE ASSESSMENT YEAR 2009-10 IN ORDER TO APPRECIATE THE CONTROVERSY. THE RESPONDENT-ASSESSEE IS AN ASSOCIATION OF PERSON (I. E. AOP), WHICH IS ENGAGED IN THE BUSINESS OF PROMOTERS AND DEVELOPERS . THE RESPONDENT- ASSESSEE IS AN AOP COMPRISING OF SHRI DATTATRAYA LA XMAN KHANDGE, SHRI VASANT LAXMAN KHANDGE AND M/S NAMRATA DEVELOPERS (A REGISTERED PARTNERSHIP FIRM). THE AOP WAS FORMED WITH THE OBJ ECT OF UNDERTAKING DEVELOPMENT AND CONSTRUCTION OF A HOUSING PROJECT S TYLED AS FLORA CITY IN TALEGAON DABHADE, TALUKA MAVAL, PUNE. THE ASSESSEE -AOP FURNISHED A RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 DECLAR ING A TOTAL INCOME OF RS. NIL, WHICH, INTER-ALIA, INCLUDED A CLAIM OF DEDUC TION U/S 80IB(10) OF THE ACT TO THE TUNE OF RS.13,26,29,776/- IN RELATION TO THE PR OFITS DERIVED FROM THE AFORESAID HOUSING PROJECT. THE CLAIM OF DEDUCTION HAS BEEN DENIED BY THE ASSESSING OFFICER FOR THE REASON THAT THE ASSESSEE S PROJECT DID NOT COMPLY WITH CERTAIN CONDITIONS PRESCRIBED IN SECTION 80IB( 10) OF THE ACT. THE CIT(A) HAS SINCE ALLOWED THE CLAIM OF THE ASSESSEE AND HEN CE THE PRESENT APPEAL OF THE REVENUE BEFORE US. 5. THE RESPONDENT-ASSESSEE-AOP UNDERTOOK DEVELOPMEN T AND CONSTRUCTION OF THE PROJECT, FLORA CITY ON THE STRE NGTH OF AN AGREEMENT BETWEEN ITS MEMBERS, NAMELY, SHRI DATTATRAYA LAXMAN KHANDGE, SHRI VASANT ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 LAXMAN KHANDGE AND M/S NAMRATA DEVELOPERS. THE TWO INDIVIDUALS WERE OWNERS OF THE PLOT OF LAND ON WHICH THE CONSTRUCTIO N AND DEVELOPMENT OF THE HOUSING PROJECT HAS BEEN UNDERTAKEN BY THE AOP. TH E ASSESSING OFFICER HAS NOTICED THAT AN INSTRUMENT OF AOP WITH THE STATED O BJECTIVE OF DEVELOPING THE LAND IN JOINT VENTURE EXECUTED ON 16.02.2006 IS DUL Y REGISTERED WITH SUB- REGISTRAR, MAVAL, PUNE. THE AGREEMENT OF JOINT VEN TURE DATED 16.02.2006 COVERS A LAND AREA ADMEASURING 75080.79 SQ.MTRS. (I .E. 18.55 ACRES APPROX). INITIALLY, ON 26.05.2006 SANCTION FROM LOCAL AUTHO RITY I.E. TALEGAON DABHADE MUNICIPAL COUNCIL WAS OBTAINED FOR A LAYOUT PLAN CO MPRISING OF 485 PLOTS. THE PROJECT OF THE ASSESSEE IN QUESTION COMPRISED OF CO NSTRUCTION AND DEVELOPMENT OF TWIN BUNGALOWS, ROW HOUSES, VERTICAL BUNGALOWS, ETC.. IN TERMS OF LAYOUT APPROVAL, SANCTION WAS OBTAINED FOR 485 OPEN PLOTS. THE FIRST BUILDING PERMISSION WAS OBTAINED FROM THE LOCAL AUT HORITY ON 31.05.2006 WHICH COMPRISED OF COMMENCEMENT OF CONSTRUCTION ON 40 IND IVIDUAL PLOTS/RESIDENTIAL UNITS. SIMILARLY, A NUMBER OF INDIVIDUAL BUILDING SANCTIONS SEEKING COMMENCEMENT CERTIFICATE FOR CONSTRUCTION ON INDIVI DUAL PLOTS WERE OBTAINED SUBSEQUENTLY. THE ASSESSING OFFICER ALSO NOTES IN THE ASSESSMENT ORDER, BASED ON A REPORT OBTAINED BY HIM FROM THE DISTRICT VALUATION OFFICER (DVO), THAT AREA OF EACH INDIVIDUAL PLOT IN THE LAYOUT VAR IED FROM 75 SQ.MTRS. TO 600 SQ.MTRS.. THE CERTIFICATES FOR COMPLETION OF CONST RUCTION WERE ALSO OBTAINED BY THE ASSESSEE INDIVIDUALLY FOR CONSTRUCTION UNDERTAK EN ON THE INDIVIDUAL PLOTS/RESIDENTIAL UNITS ON VARIOUS OCCASIONS. BASE D ON THE REPORT OF THE DVO, THE ASSESSING OFFICER OBSERVED THAT LAST OF SUCH CO MPLETION CERTIFICATE IS DATED 02.09.2011, ISSUED BY THE LOCAL AUTHORITY I.E. TALE GAON DABHADE MUNICIPAL COUNCIL. THE ASSESSING OFFICER HAS ALSO NOTED THAT OUT OF THE 485 OPEN PLOTS WHICH WERE FORMING A PART OF THE LAYOUT APPROVAL DA TED 26.05.2006, ASSESSEE HAD SOLD SOME OF THE PLOTS AS OPEN PLOTS OF LAND. 6. IN THE AFORESAID BACKGROUND, THE ASSESSING OFFIC ER OBJECTED TO THE ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT. FIRSTLY, AS PER THE ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 ASSESSING OFFICER, THE PROJECT UNDERTAKEN BY THE AS SESSEE WAS A MIXED PROJECT OF PIECE-MEAL SANCTIONS. IN THIS CONTEXT, THE ASSESSING OFFICER NOTED THAT THE PROJECT COMPRISED OF DEVELOPMENT AND CONST RUCTION OF TWIN BUNGALOWS, ROW HOUSES, VERTICAL BUNGALOWS/BUILDINGS AND ALSO S ALE OF PLOTS. AS PER THE ASSESSING OFFICER, THE PROJECT ALSO ENVISAGED SELLI NG OF OPEN PLOTS OF LAND WITHOUT DEVELOPMENT; IN SUPPORT HE REFERRED TO CLAU SE NO.5(H) OF THE JOINT VENTURE AGREEMENT WHICH PERMITTED THE DEVELOPER I.E . ASSESSEE-AOP TO SELL PLOTS ALSO APART FROM DEVELOPMENT AND SALE OF BUILT -UP BUILDINGS. THIS FACTOR, ACCORDING TO THE ASSESSING OFFICER, DISENTITLED THE ASSESSEE TO THE CLAIM OF THE DEDUCTION U/S 80IB(10) OF THE ACT. SECONDLY, AS PE R THE ASSESSING OFFICER, THE PROJECT OF THE ASSESSEE WAS TO HAVE BEEN COMPLETED ON OR BEFORE 31.03.2011 IN TERMS OF SECTION 80IB(10)(A)(II) OF THE ACT WHER EAS IN THE PRESENT CASE THE LAST OF THE COMPLETION CERTIFICATE WAS ISSUED BY TH E LOCAL AUTHORITY ON 02.09.2011. THIRDLY, ACCORDING TO THE ASSESSING OF FICER, SINCE ASSESSEE HAD OBTAINED MULTIPLE COMMENCEMENT CERTIFICATES FOR UND ERTAKING CONSTRUCTION/BUILDING, EACH OF THE UNIT CONSTRUCTED WAS TO BE UNDERSTOOD AS SEPARATE PROJECT, AND THEREFORE EACH PROJECT FAIL ED THE TEST PRESCRIBED IN SECTION 80IB(10)(B) OF THE ACT REGARDING THE MINIMU M PLOT SIZE OF ONE ACRE. FOURTHLY, ACCORDING TO THE ASSESSING OFFICER, WITH RESPECT TO THE PLOT NO. T.B.50 +T.B.51 STATED TO BE SOLD BY THE ASSESSEE SH RI SWANAND KHANDGE, THE BUILT-UP AREA OF THE BUNGALOW CONSTRUCTED THEREON W AS 2890.99 SQ.FT., WHICH WAS VIOLATIVE OF SECTION 80IB(10)(C) OF THE ACT. F OR ALL THE ABOVE REASONS, THE CLAIM OF THE ASSESSEE WAS REJECTED. 7. IN APPEAL BEFORE THE CIT(A), ASSESSEE POINTED OU T THAT SO FAR AS THE ACTIVITY OF SALE OF PLOTS IS CONCERNED, ASSESSEE HA S NOT CONSIDERED THE SAME AS A PART OF THE PROJECT ELIGIBLE FOR SECTION 80IB( 10) BENEFITS. IT WAS POINTED OUT THAT THE PROFITS EARNED ON THE SALE OF INDIVIDUAL P LOTS HAVE BEEN EXCLUSIVELY OFFERED FOR TAX AND DO NOT ENTER THE COMPUTATION OF DEDUCTION ALLOWABLE U/S 80IB(10) OF THE ACT. IT WAS, FURTHER, POINTED OUT THAT THE AREA OF THE ENTIRE PLOT, ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 WITHOUT REDUCING THE AREA OF PLOTS SOLD, WAS APPROX IMATELY 18.55 ACRES AND AFTER REDUCING THE AREA OF PLOTS SOLD, THE REDUCED AREA OF LAND FOR THE PURPOSES OF THE HOUSING PROJECT IN QUESTION CAME TO 6925.08 SQ.MTRS. (I.E. 17.12 ACRES) APPROX). FURTHER, IT WAS POINTED OUT THAT ASSESSEE HAD OBTAINED MULTIPLE BUILDING PLAN SANCTIONS BECAUSE THE PROJECT WAS TO CONSTRUCT, DEVELOP AND SELL INDIVIDUAL ROW HOUSES, TWIN BUNGALOWS, ETC. YET THE PROJECT HAS TO BE CONSIDERED IN ITS ENTIRETY SO FAR AS IT RELATED TO DEVELOPMENT AND CONSTRUCTION OF THE ROW HOUSES, TWIN BUNGALOWS, VERTICAL BUNGALO WS, ETC.. THE FIRST BUILDING PLAN SANCTIONED BY THE LOCAL AUTHORITY IS DATED 31. 05.2006 WHICH CLEARLY SHOWED THE AREA OF PLOT AS MORE THAN ONE ACRE. IT WAS ALSO POINTED OUT THAT THE DUE DATE OF COMPLETION OF CONSTRUCTION OF THE P ROJECT WAS 31.03.2012 IN TERMS OF SECTION 80IB(10)(A) READ WITH EXPLANATION (II) OF THE ACT THEREOF. IT WAS POINTED OUT THAT THE PROJECT OF THE ASSESSEE WA S COMPLETED WITHIN THE STIPULATED PERIOD. WITH REGARD TO THE OBJECTION OF THE ASSESSING OFFICER REGARDING THE COMPLETION CERTIFICATE DATED 02.09.20 11 ISSUED TO SHRI SWANAND KHANDGE IS CONCERNED, IT WAS POINTED OUT THAT CONST RUCTION ON THE SAID PLOT WAS UNDERTAKEN BY SHRI SWANAND KHANDGE HIMSELF AS T HE OPEN PLOT WAS SOLD TO HIM. THE BUILDING PLAN FOR THE SAME WAS APPROVE D IN THE NAME OF THE SAID OWNER AND SO WAS THE COMPLETION CERTIFICATE. IN OT HER WORDS, ACCORDING TO THE ASSESSEE, THE CONSTRUCTION OF THE SAID BUNGALOW WAS NOT A PART OF THE IMPUGNED PROJECT AND THEREFORE THE COMPLETION CERTI FICATE DATED 02.09.2011 IN RESPECT OF THE SAME WOULD NOT DETERMINE THE COMPLET ION OF PROJECT UNDERTAKEN BY THE ASSESSEE. BEFORE THE CIT(A), ASSESSEE ALSO FURNISHED A CERTIFICATE DATED 23.02.2012 ISSUED BY THE TALEGAON DABHADE MUN ICIPAL COUNCIL CERTIFYING THAT, IN RELATION TO BUILDING PLAN SANCT IONS OBTAINED BY THE ASSESSEE IS CONCERNED, THE CONSTRUCTION THEREON WAS COMPLETE D AND THE RELEVANT COMPLETION CERTIFICATES WERE ISSUED BY 31.03.2011. A COPY OF THE SAID CERTIFICATE ALONG WITH THE RELEVANT ANNEXURE HAS AL SO BEEN FURNISHED BY THE ASSESSEE BEFORE US, WHICH IS PLACED AT PAGES 7 TO 9 OF THE PAPER BOOK. ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 8. CONSIDERING THE AFORESAID MATERIAL, THE CIT(A) H AS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE HOLDING THAT ASSESSEE HAS DU LY COMPLIED WITH THE CONDITIONS PRESCRIBED IN SECTION 80IB(10) OF THE AC T. THE RELEVANT DISCUSSION IN THE ORDER OF THE CIT(A), WHICH BRINGS OUT THE MA NNER IN WHICH THE ISSUE HAS BEEN APPRECIATED BY HIM, READS AS UNDER :- 8. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CAS E AS WELL AS DETAILED REPLY FILED BY THE LEARNED COUNSEL OF THE APPELLANT. FROM THE REPLY FILED BY THE APPELLANT AS WELL AS FACTS BROUGHT OUT ON RECORDS BY THE A.O. IT IS SEEN THAT THE APPELLANT AOP CAME INTO EXISTENCE IN PURSUANCE OF JOINT VENTURE AGREEMENT DATED 16.02.2006 TO DEVELOP LAND AREA ADMEASURING 75,080.79 SQ. MTRS. (APPROX. 18.55 ACRES). THE LAND WAS OWNED BY SHRI. V. L. KHANDGE AND SHRI. D. L. KHANDGE WHO BECAME PART OF THE AOP AIONGWITH M/S. NAMRATA DEVELOPERS AND THE AOP WAS N AMED AS 'NAMRATA DEVELOPERS-FLORA CITY'. THE APPELLANT AOP OBTAINED PERMISSION FOR LAY OUT PLAN FOR 485 OPEN PLOTS FROM THE MUNICIPAL AUTHORIT IES OF TALEGAON ON 26.05.2006 AND THEREAFTER COMMENCEMENT CERTIFICATE WAS OBTAINED ON 31.05.2006 IN RESPECT OF 40 INDIVIDUAL PLOTS, RESID ENTIAL UNITS. THE APPELLANT RECEIVED FURTHER APPROVAL FROM TIME TO TIME AND COM PLETED THE PROJECT NAMED AS 'FLORA CITY' WITHIN THE STIPULATED PERIOD OF FIVE YEARS FROM THE END OF FINANCIAL YEAR 2006-07, IN WHICH FIRST APPRO VAL FOR THE BUILDING PLAN WAS OBTAINED I.E. 31.05.2006. THE APPELLANT, HOWEVE R SOLD SOME PLOTS ADMEASURING 5829.71 SQ. MTRS. TO FOLLOWING PERSONS AS UNDER : PLOT NO. NAME SALE DEED DATE AREA B13 GANESH VASANT KHANDGE 01.06.2009 500.00 B14A ANUPAMA GANESH KHANDGE 01.06.2009 500.00 B15 RAVI DEEPAK SHAH 01.06.2009 500 B16 NAMRATA SHAILESH SHAH 01.06.2009 500 TB 50-51 SWANAND DATTATRAYA KHANDGE 01.06.2009 272.22 TB 54 PRATIMA NANDAKUMAR DERE 17.11.2009 136.11 TB 55 SMITA RAGHUNATH CHIKHALE 17.11.2009 136.11 TB 56 AMITA SUNIL BANDAL 17.11.2009 136.11 TB 57 YOGITA CHETAN AAWTI 17.11.2009 136.11 C1 SANTOSH DATTATRAYA KHANDGE 31.03.2011 464.51 C2 RAJANIGANDHA SANTOSH KHANDGE 31.03.2011 464.51 C3 SANTOSH DATTATRAYA KHANDGE 31.03.2011 186 C4 MADHURI SWANAND KHANDGE 31.03.2011 500 R226 SWANAND DATTATRAYA KHANDGE 31.03.2011 203.4 C5 RAVI DEEPAK SHAH 31.03.2011 495.74 C6 JAY SHAILESH SHAH 31.03.2011 495.74 R227 JAY SHAILESH SHAH 31.03.2011 203.15 TOTAL AREA SOLD 5829.71 THUS, ON ACCOUNT OF SALE OF PLOTS AS ABOVE, ADMEASU RING 5829.71 SQ. MTRS. (ABOUT 1.43 ACRES) TOTAL LAND AREA OF THE LAND FOR THE PROJECT DEVELOPED BY THE APPELLANT NAMED AS 'FLORA CITY' WA S REDUCED TO 69,251.08 SQ. MTRS (APPROX. 17.12 ACRES). 9. THE A.O. HAS HELD THAT THE PROJECT IS MIXED ONE ON ACCOUNT OF OPEN SALE OF PLOTS TO SOME PARTIES AS STATED ABO VE AND IS ALSO BASED ON PEACE-MEAL SANCTIONS. FOR THIS PROPOSITION THE A.O. HAS HEAVILY RELIED UPON ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 THE REPORT OF THE D.V.O REPRODUCED IN THE ASSESSMEN T ORDER WHEREIN IT HAS BEEN STATED THAT THE AREA OF THE PLOT VARIES FROM 7 5 SQ. MTRS TO 600 SQ. MTRS. SINCE, MULTIPLE SANCTIONS HAVE BEEN OBTAINED BY THE APPELLANT IN RESPECT OF CONSTRUCTION OF THE BUNGALOWS/ROW HOUSES AND RESIDENTIAL FLATS, THE A.O. HAS BASED HIS CONCLUSION THAT IT IS A CASE OF PEACE-MEAL SANCTION AND NOT A REVISED SANCTION OF THE SAME BUILDING PLA N. THE OBSERVATION OF THE A.O. APPARENTLY APPEARS TO BE BASED ON THE REPO RT OF THE D.V.O. 10. THE FINDING OF THE A.O. THAT THE PROJECT IS MIX ED ONE CANNOT BE ACCEPTED IN VIEW OF THE FACT THAT THE APPELLANT IS ENTITLED TO REVISE ITS PROJECT AS PER LAW. DUE TO SALE OF CERTAIN PLOTS, T HE PLAN OF THE HOUSING PROJECT STANDS REVISED TO THAT EXTENT WHICH HAS BEE N APPROVED BY THE MUNICIPAL AUTHORITIES TOO. THE ONLY CONDITION TO BE SEEN IS THAT AFTER REDUCTION OF THE AREA ON ACCOUNT OF SALE OF CERTAIN PLOTS, THE SIZE OF THE PROJECT SHOULD NOT BE LESS THAN ONE ACRE AS STIPULA TED IN THE ACT. IN THIS CASE IT CAN BE SEEN THAT AFTER EXCLUSION OF SALE OF THE ABOVE PLOTS, ADMEASURING 5829.71 SQ.MTRS., THE REMAINING LAND FO R THE PROJECT REMAINED AT 69,251.08 SQ.MTRS. WHICH IS MUCH MORE THAN THE R EQUIRED AREA OF ONE ACRE AS PER THE ACT. THEREFORE, ELIGIBILITY OF THE PROJECT IS NOT AT ALL AFFECTED BY THE SALE OF OPEN PLOTS, 11. AS REGARDS, A.O'S OBSERVATION THAT THE APPELLAN T IS NOT ENTITLED FOR DEDUCTION U/S 80IB(10) OF I.T. ACT AS PEACE-MEAL SANCTIONS HAVE BEEN ACCORDED IN RESPECT OF VARIOUS PLOTS BY T HE MUNICIPAL AUTHORITIES IT IS SEEN THAT THE ACT ITSELF ALLOWS MULTIPLE SANC TIONS. THIS SANCTION CAN BE IN RESPECT OF SAME PLOT OR SOME OTHER PLOT WHICH IS PART OF THE HOUSING PROJECT. SINCE, HOUSING PROJECT HAS NOT BEEN DEFINE D IN THE I.T. ACT, THE SAME HAS TO BE LOOKED INTO MUNICIPAL AUTHORITIES' P OINT OF VIEW. SINCE MUNICIPAL AUTHORITIES HAVE ACCORDED PERMISSION TO T HE HOUSING PROJECT THE SAME HAS TO BE ACCEPTED AS HOUSING PROJECT IRRESPEC TIVE OF THE FACT THAT THE APPROVAL HAS BEEN GIVEN IN CONTINUATION OF EARLIER PERMISSION OR BY WAY OF A SEPARATE PERMISSION. IN THIS CASE THE LOCAL AUTHO RITIES HAVE APPROVED THE PROJECT AS HOUSING PROJECT AND CONDITIONS STIPULATE D IN SEC. 80IB(10) ARE SATISFIED DEDUCTION CANNOT BE DENIED ON THE GROUND THAT CERTAIN OPEN PLOTS (FOR WHICH NO DEDUCTION WAS CLAIMED) WERE SOLD BY T HE APPELLANT AND PEACE-MEAL SANCTION FOR THE PROJECT WAS OBTAINED. T HEREFORE, THE A.O. WAS NOT JUSTIFIED IN HOLDING THAT THE PROJECT WAS NOT E NTITLED FOR DEDUCTION AS CERTAIN OPEN PLOTS WERE SOLD AND MULTIPLE PERMISSIO NS FOR THE PROJECT WERE OBTAINED. 12. THE NEXT GROUND FOR DISALLOWANCE OF THE DED UCTION U/S 80IB(10) IS ON ACCOUNT OF COMPLETION LIMIT. THE A .O. WAS OF THE VIEW THAT SINCE THE PROJECT COMMENCED ON 31.05.2006, THE SAME SHOULD HAVE BEEN COMPLETED BY 31.03.2011 I.E. WITHIN 4 YEARS. THE A.O. NOTICED (ON THE BASIS OF D.V.O. REPORT) THAT THE LAST COMPLETION CE RTIFICATE WAS ISSUED ON 02.09.2011 BY TALEGAON DABHADE MUNICIPAL COUNCIL AN D THEREFORE THE PROJECT WAS NOT COMPLETED AS PER THE ACT. BEFORE TH E A.O., THE APPELLANT CLAIMED THAT THE CERTIFICATE WAS RELATED TO ONE OF THE PLOTS SOLD BY THE APPELLANT AND SINCE MUTATION WAS PENDING CERTIFICAT E WAS ISSUED IN THE NAME OF ORIGINAL LAND OWNER BY THE LOCAL AUTHORITY. THE APPELLANT SUBMITTED THAT THIS IS A NORMAL PRACTICE AND SINCE THE PLOT W AS EXCLUDED FROM THE PROJECT NO ADVERSE VIEW COULD HAVE BEEN TAKEN. IN T HE REPLY, THE APPELLANT ALSO SUBMITTED THAT THE A.O. MISTAKENLY TOOK THE LA ST DATE OF THE COMPLETION OF THE PROJECT AS 31.03.2011 OBLIVIOUS OF THE AMEND MENT BROUGHT IN THE STATUTE WHICH STATES THAT IN RESPECT OF A HOUSING P ROJECT APPROVED BY LOCAL AUTHORITY AFTER 01.04.2005, THE PROJECT WAS REQUIRE D TO BE COMPLETED WITHIN 5 YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. THE SUBMISSIONS OF THE APPELLANT IS FOUND ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 TO BE CORRECT. SEC. 80IB(10)(A)(III) INSERTED BY FI NANCE ACT 2010, W.E.F. 01.04.2010 READS AS UNDER : 'IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVE D BY THE LOCAL AUTHORITY ON OR AFTER THE 1 ST DAY OF APRIL, 2005, WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. ' 13. THUS, IT IS CLEAR THAT THE A.O. WAS NOT JUSTIFI ED IN HOLDING THAT THE APPELLANT WAS REQUIRED TO COMPLETE THE PROJECT BY 31.03.2011 AS THE ACT ITSELF WAS AMENDED TO INCORPORATE THE COMPLETIO N DATE TO BE 31.03.2012. IT IS ALSO A FACT THAT THE COMPLETION C ERTIFICATE DATED 02.09.2011 WAS IN RESPECT OF OPEN PLOT SOLD BY THE APPELLANT WHICH WAS NOT PART OF THE PROJECT AND NAME OF LAND OWNER WAS MENT IONED ON THE CERTIFICATE AS PER NORMAL PRACTICE AS NO MUTATION W AS DONE. THEREFORE, A.O. WAS NOT JUSTIFIED IN DENYING DEDUCTION U/S 80IB(10) ON THIS COUNT TOO. 14. THE THIRD AND FOURTH GROUND ON WHICH THE A.O. H AS DENIED THE CLAIM IS THAT FURTHER SANCTIONS OF LOCAL AUTHORITY WERE NOT BY WAY OF REVISION OF THE ORIGINAL BUILDING PLAN BUT MULTIPLE CERTIFIC ATES WERE OBTAINED AND IN ONE CASE COMPLETION CERTIFICATE WAS OBTAINED ON 02. 09.2011 AND THE CERTIFICATE WAS IN THE NAME OF LANDOWNER PERTAINING TO PLOT NO. T.B 50 + TB 51. THE ABOVE OBJECTIONS OF THE A.O. HAVE BEEN ALRE ADY DEALT WITH IN PREVIOUS PARAS. 15. TO SUM UP IT IS SEEN THAT THE HOUSING PROJECT K NOWN AS 'FLORA CITY' WAS FIRST APPROVED ON 31.05.2006. THEREAFTER PROJECT WAS REVISED ON ACCOUNT OF MULTIPLE APPROVALS AND WAS COMPLETED BEF ORE 31.03.2012 THE PROJECT IS ON MORE THAN ONE ACRE OF LAND AND ALL OT HER CONDITIONS STIPULATED IN THE ACT GOVERNING THE ADMISSIBILITY OF DEDUCTION U/S 80IB(10) ARE SATISFIED IN THE CASE. THE FACT THAT SOME OF THE PL OTS IN THE LAND INITIALLY EARMARKED FOR THE PROJECT WERE SOLD WILL NOT AFFECT THE ADMISSIBILITY OF DEDUCTION U/S 80IB(10) OF THE I.T. ACT AS LONG AS C ONDITIONS STIPULATED IN THE ACT ARE SATISFIED. THE APPELLANT'S CLAIM IS ALSO SU PPORTED BY THE DECISION OF HON'BLE CHANDIGARH I.T.A.T. 'B' BENCH IN THE CASE O F SMT. BALJIT KAUR SEKHON VS. JOINT CIT, RANGE 5, CHANDIGARH REPORTED IN (2011) 12 TAXMANN.COM 126 (CHANDIGARH) IN WHICH THE APPELLANT SUBMITTED PLAN FOR DEVELOPMENT OF LAND OF 8.7 ACRES BUT SUBSEQUENTLY S OLD 3 ACRES OF LAND AND PROCEEDED WITH CONSTRUCTIONS ON 5.7 ACRES OF LAND. CLAIM U/S 80IB(10) WAS DISALLOWED BY THE A.O. THE HON'BLE TRIBUNAL HELD TH AT THERE WAS NO MERIT IN AO'S ORDER DENYING DEDUCTION U/S 80IB(10) TO THE 'A ' ON THE ABOVE GROUND. THEREFORE, IN VIEW OF THE ABOVE POSITION IT IS HELD THAT THE A.O. WAS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF DEDUCTION U/S 80IB(10) AMOUNTING TO RS.13,26,29,776/- AS THERE WAS NO VIOLATION OF ANY OF THE CONDITIONS STIPULATED IN SEC. 80IB(10) OF THE I.T. ACT. ACCORD INGLY, THE A.O. IS DIRECTED TO ALLOW THE CLAIM AND DELETE THE ADDITION OF RS.13 ,26,29,776/-. ACCORDINGLY, THE GROUND IS ALLOWED. 9. AGAINST THE AFORESAID, REVENUE IS IN APPEAL BEFO RE US. THE LEARNED DEPARTMENTAL REPRESENTATIVE APPEARING FOR THE REVEN UE HAS PRIMARILY RELIED UPON THE REASONING TAKEN BY THE ASSESSING OFFICER T O DENY THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT, WHICH WE HAVE AL READY ADVERTED TO IN DETAIL ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 IN PARA 6 OF THIS ORDER AND THE SAME IS NOT BEING R EPEATED FOR THE SAKE OF BREVITY. 10. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE F OR THE RESPONDENT- ASSESSEE POINTED OUT THAT OBTAINING OF MULTIPLE BUI LDING SANCTIONS, DOES NOT RESULT IN THE PROJECT BEING INELIGIBLE FOR SECTION 80IB(10) BENEFITS. IT WAS POINTED OUT THAT THE PROJECT OF THE ASSESSEE COMPRI SED OF DEVELOPMENT AND CONSTRUCTION OF INDIVIDUAL PLOT UNITS BY WAY OF CON STRUCTION OF TWIN BUNGALOWS, ROW HOUSES AND VERTICAL BUNGALOWS, ETC.. THEREFORE , MERELY BECAUSE MULTIPLE BUILDING PLANS SANCTION WERE OBTAINED CANNOT BE HEL D AGAINST THE ASSESSEE AND THAT THE CIT(A) HAS JUSTIFIABLY SET-ASIDE THE S AID OBJECTION. WITH REGARD TO THE MIXED NATURE OF THE PROJECT, IT WAS POINTED OUT THAT SO FAR AS THE SALE OF OPEN PLOTS TO SOME PARTIES IS CONCERNED, NO DEDUCTI ON IN RESPECT OF THE SAME HAS BEEN CLAIMED BY THE ASSESSEE. IN ANY CASE, BY EXCLUDING THE AREA OF SUCH PLOTS, THE SIZE OF THE PROJECT DID NOT REDUCE BELOW ONE ACRE STIPULATED IN SECTION 80IB(10)(B) OF THE ACT AND THEREFORE THE EL IGIBILITY OF THE PROJECT FOR SECTION 80IB(10) BENEFITS WAS NOT EFFECTED. THE LE ARNED COUNSEL ALSO POINTED OUT THAT THE CIT(A) HAS APPROPRIATELY APPRECIATED T HAT THE PROJECT OF THE ASSESSEE WAS COMPLETED BEFORE 31.03.2011; AND, WHIC H WAS ON THE BASIS OF A CERTIFICATE ISSUED BY TALEGAON DABHADE MUNICIPAL CO UNCIL AND THEREFORE DOES NOT REQUIRE TO ANY INTERFERENCE. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. FACTUALLY SPEAKING, IN THE PRESENT CASE, ASSESSEE-AOP CLAIMED THAT IT HAS UNDERTAKEN DEVELOPMENT AND CONSTRUCTION OF A HOUSING PROJECT W HICH IS COMPRISED OF CONSTRUCTION OF TWIN BUNGALOWS, ROW HOUSES, VERTICA L BUNGALOWS AND BUILDINGS. THE LAYOUT PLANT OF THE PROJECT WAS APPROVED BY THE LOCAL AUTHORITY ON 26.05.2006 AND IT COMPRISED OF CONSTRUCTION ON 485 PLOTS OF LAND. THERE IS NO DISPUTE THAT THE AREA OF PROJECT COVERED IN THE LAY OUT PLAN IS MORE THAN ONE ACRE. SOME OF THE PLOTS IN THE SAID LAYOUT, WERE S UBSEQUENTLY SOLD BY THE ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 ASSESSEE AS SUCH AND THEREFORE THE ASSESSING OFFICE R TOOK THE STAND THAT THE SAME WAS VIOLATIVE OF SECTION 80IB(10) OF THE ACT. THE CLAIM OF THE ASSESSING OFFICER IS THAT SALE OF SOME OF THE OPEN PLOTS OF L AND WITHOUT UNDERTAKING ANY CONSTRUCTION WOULD RENDER THE PROJECT INELIGIBLE FO R SECTION 80IB(10). NO DOUBT DEDUCTION U/S 80IB(10) OF THE ACT IS INTENDED FOR U NDERTAKING DEVELOPMENT AND BUILDING OF A HOUSING PROJECT. SO HOWEVER, THE FAC T THAT SOME OF THE PLOTS INITIALLY COMPRISED IN THE LAYOUT WERE SOLD AS SUCH WOULD NOT DEFEAT ASSESSEES ENTITLEMENT FOR DEDUCTION U/S 80IB(10) OF THE ACT S O LONG AS THE CONDITIONS STIPULATED IN SECTION 80IB(10) OF THE ACT ARE SATIS FIED QUA THE RESIDUAL PROJECT UNDERTAKEN BY THE ASSESSEE. FACTUALLY SPEAKING, IT IS NOT IN DISPUTE THAT THE PROFIT/LOSS RESULTING ON ACCOUNT OF SALE OF CERTAIN PLOTS AS SUCH HAS NOT ENTERED ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) OF THE A CT. THEREFORE, IN OUR VIEW, THE CIT(A) MADE NO MISTAKE IN REJECTING THE AFORESA ID STAND OF THE ASSESSING OFFICER AND PROCEEDING TO EXAMINE WHETHER THE RESID UAL PROJECT OF DEVELOPMENT AND CONSTRUCTION UNDERTAKEN BY ASSESSEE COMPLIED WITH THE REQUIREMENTS OF SECTION 80IB(10) OF THE ACT. IN CO MING TO SUCH CONCLUSION, THE CIT(A) HAS FOLLOWED THE DECISION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF SMT. BALJIT KAUR SEKHON VS. JCIT, (2011 ) 12 TAXMAN.COM 126 (CHD.). WE FIND NO REASONS TO INTERFERE WITH THE A FORESAID CONCLUSION OF THE CIT(A) AS NEITHER ON FACTS AND NOR ON THE POINT OF LAW, ANY INFIRMITY IN THE SAME HAS BEEN POINTED OUT BY THE REVENUE BEFORE US. 12. FURTHER WITH REGARD TO OBTAINING OF MULTIPLE BU ILDING SANCTIONS, IN OUR VIEW, THE SAME CANNOT BE HELD AGAINST THE ASSESSEE. AT THIS POINT, WE MAY MAKE A BRIEF REFERENCE TO EXPLANATION (I) BELOW CLA USE (A) OF SECTION 80IB(10) OF THE ACT WHICH PROVIDES THE DATE OF APPROVAL OF T HE FIRST BUILDING PLAN OF HOUSING PROJECT SHALL BE CONSIDERED AS THE DATE OF APPROVAL BY THE LOCAL AUTHORITY. NOTABLY, EXPLANATION (I) READ WITH CLAU SE (A) OF SECTION 80IB(10) OF THE ACT ITSELF RECOGNIZES A SITUATION WHERE AN ASSE SSEE MAY OBTAIN BUILDING PLAN APPROVALS IN RESPECT OF A HOUSING PROJECT MORE THAN ONCE. IN SUCH A ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 SITUATION, IT IS SOUGHT TO BE CLARIFIED THAT THE HO USING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE OF WHICH THE BUILDIN G PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY. THEREFORE, TO SAY THAT BECAUSE ASSESSEE HAD OBTAINED MULTIPLE APPROVALS AND THUS I S DISENTITLED FOR SECTION 80IB(10) BENEFITS, IS AGAINST THE LEGISLATIVE MANDA TE. HENCE, EXISTENCE OF MULTIPLE BUILDING PLAN APPROVALS CANNOT BE HELD AGA INST THE ASSESSEE. FURTHERMORE, THE REQUIREMENT THAT THE PROJECT IS TO BE ON A SIZE OF A PLOT OF LAND OF A MINIMUM AREA OF ONE ACRE IS CONCERNED, TH E SAME HAS ALSO TO BE EXAMINED NOT WITH RESPECT TO EACH AND EVERY INDIVID UAL BUILDING PLAN APPROVAL BUT WITH RESPECT TO THE HOUSING PROJECT AS A WHOLE. THUS, IN THE PRESENT CASE, THE ASSESSING OFFICER ERRED IN CONSIDERING THE SIZE OF INDIVIDUAL PLOTS OF LAND TO EXAMINE AS TO WHETHER IT HAS AREA OF ONE ACRE OR MO RE. ON THIS ASPECT ALSO, WE FIND THAT THE CIT(A) MADE NO MISTAKE IN DISREGAR DING THE OBJECTION OF THE ASSESSING OFFICER. 13. WITH REGARD TO THE PERIOD SPECIFIED FOR COMPLYI NG THE CONSTRUCTION OF THE PROJECT, WE FIND THAT THE CIT(A) HAS APTLY DEALT WI TH THE OBJECTION OF THE ASSESSING OFFICER. IN THIS CASE, THE APPROVAL OF FI RST BUILDING PLAN IS DATED 31.05.2006 AND THEREFORE IN TERMS OF SECTION 80IB(1 0)(A)(III) OF THE ACT, THE PROJECT IS REQUIRED TO BE COMPLETED WITHIN FIVE YEA RS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPR OVED BY THE LOCAL AUTHORITY. EXPLANATION (I) BELOW CLAUSE (A) OF SECTION 80IB(10 ) OF THE ACT, AS SEEN EARLIER, PROVIDES THAT THE DATE OF APPROVAL OF THE FIRST BUI LDING PLAN OF THE HOUSING PROJECT SHALL BE CONSIDERED AS THE DATE OF APPROVAL BY THE LOCAL AUTHORITY. AS A CONSEQUENCE IN TERMS OF CLAUSE (A) OF SECTION 80IB( 10) OF THE ACT, CONSTRUCTION OF THE IMPUGNED HOUSING PROJECT WAS LIABLE TO BE CO MPLETED WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE BUI LDING PLAN OF THE HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY I. E. CALCULATED FROM 31.05.2006 (I.E. DATE OF APPROVAL OF FIRST BUILDING PLAN), THE HOUSING PROJECT WAS LIABLE TO BE COMPLETED BY 31.03.2012. FACTUALLY SPEAKING, THERE IS NO DISPUTE THAT THE ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 CONSTRUCTION OF THE PROJECT BY THE ASSESSEE HAS BEE N COMPLETED BY 31.03.2011, A POSITION WHICH ALSO STANDS CERTIFIED BY THE TALEGAON DABHADE MUNICIPAL COUNCIL, WHICH HAS BEEN ALSO RELIED UPON BY THE CIT(A). IN TERMS OF THE SAID MATERIAL, IT IS EVIDENT THAT WITH REGARD T O THE DEVELOPMENT OF THE HOUSING PROJECT UNDERTAKEN BY THE ASSESSEE, LAST OF THE COMPLETION CERTIFICATE IS DATED 31.03.2011. THE CLAIM OF THE ASSESSING OF FICER IS THAT A COMPLETION CERTIFICATE HAS ALSO BEEN ISSUED BY THE LOCAL AUTHO RITY ON 02.09.2011, WHICH IS THE LAST CERTIFICATE. EVEN IF THE SAID CERTIFICATE IS TAKEN INTO CONSIDERATION, YET IT DOES NOT BREACH THE OUTER LIMIT OF 31.03.2012 WHICH IS STIPULATED DATE IN THE PRESENT CASE FOR COMPLETION OF PROJECT, AS SEEN EAR LIER. HOWEVER, THE CLAIM OF THE ASSESSEE AND WHICH HAS BEEN UPHELD BY THE CIT(A ) IS THAT THE SAID COMPLETION CERTIFICATE PERTAINS TO CONSTRUCTION ON A PLOT, WHICH WAS UNDERTAKEN BY THE PURCHASER HIMSELF. ASSESSEE EXPLAINED THAT THE SAID PLOT WAS SOLD AS SUCH AND THE PURCHASER OBTAINED THE BUILDING SANCTI ON AND THE ASSESSEE HAD NO ROLE TO PLAY IN THE DEVELOPMENT AND CONSTRUCTION OF THE SAID PLOT. THE AFORESAID FACTUAL FINDING IS NOT CONTROVERTED BY TH E REVENUE BEFORE US. ACCORDINGLY, THE STAND OF THE CIT(A) ON THIS ASPECT IS ALSO HEREBY AFFIRMED. 14. AS A RESULT OF THE AFORESAID DISCUSSION, WE FIN D THAT ON ALL THE ASPECTS RAISED BY THE ASSESSING OFFICER, THE CIT(A) MADE NO MISTAKE IN UPHOLDING ASSESSEES PLEA FOR THE CLAIM OF DEDUCTION U/S 80IB (10) OF THE ACT WITH RESPECT TO ITS HOUSING PROJECT, FLORA CITY UNDERTAKEN AT TALEGAON DABHADE, PUNE. THUS, THE ORDER OF THE CIT(A) IS HEREBY AFFIRMED. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.1795/PN/2012 FOR ASSESSMENT YEAR 2009-10 IS DISMISSED. 16. IN SO FAR AS, ANOTHER APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2010- 11 VIDE ITA NO. 1866/PN/2013 IS CONCERNED, THE ISSU E INVOLVED AS WELL AS FACTS AND CIRCUMSTANCES OF THE CASE ARE PARI-MATERI A TO THOSE CONSIDERED BY ITA NO.1795/PN/2012 ITA NO.1866/PN/2013 US IN ASSESSMENT YEAR 2009-10. HENCE, OUR DECISION IN THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2009-10 WOULD APPLY MUTATIS-MUTANDIS IN THIS APPEAL ALSO. 17. IN THE RESULT, THE APPEAL OF THE REVENUE FOR AS SESSMENT YEAR 2010-11 IS DISMISSED. 18. RESULTANTLY, BOTH THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JULY, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 25 TH JULY, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-V, PUNE; 4) THE CIT-V, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE