Appeal Details
Counselvise Citation
[2015] 134 COUNSELVISE.COM (IT) 1106 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 11 month(s) 5 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-09-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
11-12-2014
Assessment Year
2009-2010
Appeal Filed On
25-10-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , ! '# , $% BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM & / ITA NOS. 583 & 2086/PN/2012 ' ( )( / ASSESSMENT YEARS : 2008-09 & 2009-10 BHUJBAL BROTHERS CONSTRUCTION COMPANY, BHUJBAL HOUSE, S. NO. 28, KARVE NAGAR, PUNE 411052 PAN : AAGFB7974A ....... / APPELLANT *' / V/S. DY. COMMISSIONER OF INCOME TAX, CIRCLE 3, PUNE / RESPONDENT & / ITA NO. 1920/PN/2013 ' ( )( / ASSESSMENT YEAR : 2010-11 BHUJBAL BROTHERS CONSTRUCTION COMPANY, BHUJBAL HOUSE, S. NO. 28, KARVE NAGAR, PUNE 411052 PAN : AAGFB7974A ....... / APPELLANT *' / V/S. DY. COMMISSIONER OF INCOME TAX, CIRCLE 3, PUNE / RESPONDENT & / ITA NOS. 707 & 2115/PN/2012 ' ( )( / ASSESSMENT YEARS : 2008-09 & 2009-10 DY. COMMISSIONER OF INCOME TAX, CIRCLE 3, PUNE ....... / APPELLANT *' / V/S. M/S. BHUJBAL BROTHERS CONST. CO., OFFICE NO. 21-22, A WING, DAMODAR VILLA, S. NO. 32, 31, NEAR KOTHRUD, PUNE 29 PAN : AAGFB7974A / RESPONDENT 2 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 ASSESSEE BY : SHRI C.H. NANIWADEKAR REVENUE BY : SHRI S.K. RASTOGI / DATE OF HEARING : 29-09-2015 / DATE OF PRONOUNCEMENT : 30-09-2015 + / ORDER PER VIKAS AWASTHY, JM : THESE ARE FIVE APPEALS, THREE APPEALS ARE BY THE ASSESSE E AND TWO APPEALS ARE BY THE REVENUE. ITA NO. 583/PN/2012 HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 05-12-2011 FOR THE ASSESSMENT YEAR 2008-09. THE REVENUE HAS FILED CROSS APPEAL IN ITA NO. 707/PN/201 2 FOR THE ASSESSMENT YEAR 2008-09. THE APPEAL OF THE ASSESSEE IN ITA NO. 2086/PN/2012 IS AGAINST THE ORDER OF COMMISSIONER OF INC OME TAX (APPEALS)-II, PUNE DATED 15-06-2012 FOR THE ASSESSMENT YEAR 2009-10. THE REVENUE IN ITA NO. 2115/PN/2012 HAS FILED CROSS APPE AL AGAINST THE SAME ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). I TA NO. 1920/PN/2013 FILED BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 15-05 -2013 FOR THE ASSESSMENT YEAR 2010-11. SINCE, THE FACTS IN ALL THE IMPUGNED ASSESSMENT YEARS AND THE ISSUES RAISED IN THE APPEALS A RE SIMILAR, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. T HE ASSESSEE IN ALL THE THREE APPEALS HAVE IMPUGNED THE FINDINGS OF COMMISS IONER OF INCOME TAX (APPEALS) IN DISALLOWING DEDUCTION U/S. 80IB(10) OF THE INCOME TAX ACT, 1961, CLAIMED BY THE ASSESSEE IN RESPECT OF PROJECT DAMODAR RESIDENCY. ON THE OTHER HAND THE REVENUE IN ITS APPEALS HAVE CHALLENGED THE FINDINGS OF COMMISSIONER OF INCOME TAX (A PPEALS) IN ALLOWING DEDUCTION U/S. 80IB(10) TO THE ASSESSEE IN RES PECT OF HOUSING PROJECT AT BHUJBAL TOWNSHIP. 3 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE REC ORDS ARE : THE ASSESSEE IS A BUILDER AND A DEVELOPER. THE ASSESSEE HAD DEVELOPED TWO RESIDENTIAL PROJECTS, ONE AT BHUJBAL TOWNSHIP AND T HE OTHER AT DAMODAR RESIDENCY. THE PROJECT BHUJBAL TOWNSHIP IS SIT UATED IN S. NO. 67, KOTHRUD, PUNE ON LAND MEASURING 40,700 SQ. MTRS. THE ENTIRE PROPERTY ON WHICH THE PROJECT IS DEVELOPED IS AN ANCEST RAL PROPERTY OF BHUJBAL FAMILY. THE ASSESSEE IS A PARTNERSHIP FIRM, CONSIST ING OF TWO BHUJBAL BROTHERS AND THEIR FAMILY MEMBERS. IN THE MUTUA L UNDERSTANDING WITH LARGER FAMILY, AN AREA OF 4,902 SQ. MTRS. OUT OF THE TOTAL AREA OF 40,700 SQ. MTRS. WAS ALLOCATED TO THE ASSESS EE FIRM VIDE REGISTERED AGREEMENT DATED 13-04-2006 AND 21-08-2007 . IN BHUJBAL TOWNSHIP TOTAL 26 BUILDINGS WERE TO BE CONSTRUCTED OUT O F WHICH 3 BUILDINGS I.E. BUILDING NO. B5, B9 AND B2 CAME TO THE SHARE O F THE PARTNERS OF THE ASSESSEE FIRM. THE ASSESSEE WAS IN COMP LETE CONTROL, OWNERSHIP AND DOMAIN OF THE AFORESAID 3 BUILDINGS. THE ASS ESSEE CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF THE BUILDINGS IN BHUJBAL TOWNSHIP IN THE ASSESSMENT YEAR 2007-08. HOWEVER, THE SAME WAS DENIED BY THE ASSESSING OFFICER ON THE GROUND THAT THE P LOT OF LAND ON WHICH THE HOUSING PROJECT IS CONSTRUCTED IS LESS THAN 1 ACRE I.E. LESS THAN THE MINIMUM AREA SPECIFIED UNDER THE PROVISIONS OF SEC TION 80IB(10) OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPE ALS) VIDE ORDER DATED 22-02-2011 ACCEPTED THE CLAIM OF THE ASSES SEE AND HELD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10 ) ON THE HOUSING PROJECT COMPRISING IN BHUJBAL TOWNSHIP. AGAINST T HE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS), THE DEPARTMENT CAR RIED APPEAL TO THE TRIBUNAL IN ITA NO. 641/PN/2011 FOR THE ASSESSMENT YEAR 2007-08. THE TRIBUNAL UPHELD THE FINDINGS OF COMMISSIONER O F INCOME TAX (APPEALS) AND DISMISSED THE APPEAL OF THE REVENUE VIDE ORDER DATED 25-02-2013. 4 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 IN THE IMPUGNED ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2008-09 AND 2009-10, THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF HOUSING PROJECT SITUATED AT BHUJBAL TOWNSHIP. THE AS SESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT T HE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF THE TRIBUNAL AND HAS FIL ED APPEAL BEFORE THE HON'BLE BOMBAY HIGH COURT. 2.1 THE SECOND PROJECT ON WHICH THE ASSESSEE HAD CLAIME D DEDUCTION U/S. 80IB(10) IS AT DAMODAR RESIDENCY COMPRISING IN S. NO. 8, KOTHRUD, PUNE. IN THE SAID HOUSING PROJECT TOTAL SEVEN BUILDINGS WERE PROPOSED TO BE CONSTRUCTED I.E. FROM A1 TO A5, B1 AND B2 . BUILDINGS A1 TO A5 ARE RESIDENTIAL, WHEREAS BUILDINGS B1 AND B2 ARE COMMERCIAL. THE ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT WITH THE OWNERS OF THE LAND IN RESPECT OF BUILDINGS A2, A3 AND PART OF B1 OUT OF THE TOTAL PROPERTY COMPRISING IN S. NO. 8 AT KOTHRUD MEASURING 14,40 0 SQ. MTRS. THE TOTAL AREA OF LAND WHICH WAS ACQUIRED BY THE ASSES SEE FOR BUILDINGS A2, A3, OPEN SPACE, INTERNAL ROAD AND BUILDING B1 IS 4371 S Q. MTRS. THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF RESIDENTIAL BUILDINGS A2 AND A3 IN THE ASSESSMENT YEARS 2008-09, 200 9-10 AND 2010-11. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2007-08, THE PROPERTY WAS REFERRED TO THE DVO. THE DVO VIDE REPORT DATED 14-12-2009 OBSERVED THAT THE T OTAL AREA OF THE PLOT ON WHICH THE PROJECT DAMODAR RESIDENCY IS DEVELOPED IS 14,400 SQ. MTRS. AND THE GROSS AREA OF THE PLOT AFTER DEDUCTION IS 12,300 SQ. MTRS. THE ASSESSEE HAS CLAIMED THE AREA OF PLOT ON WHICH THE BUILDINGS A2, A3 AND B1 ARE CONSTRUCTED AS 4370.92 SQ. MTRS. BUT THERE IS NO SEPARATE SANCTION OR DEMARCATION OF THE LAND ON WHICH TH E BUILDINGS A2, A3 AND B1 ARE CONSTRUCTED. THERE IS NO SEPARATE DEMARCATION BY WAY OF SUB-DIVISION OF THE PLOT ON WHICH RESIDENTIAL BUILDINGS A RE CONSTRUCTED AND DEVELOPED BY THE ASSESSEE. THE DVO FU RTHER OBSERVED 5 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 THAT SINCE SHARE OF THE ASSESSEE IS UNDIVIDED THERE CANN OT BE SEPARATE OPEN SPACE PERTAINING TO BUILDINGS A2, A3 AND B1. BASE D ON THE REPORT OF DVO THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASS ESSEE FOR DEDUCTION U/S. 80IB(10). THE ASSESSING OFFICER HELD THAT TH E AREA OF PLOT IN THE CASE OF DAMODAR RESIDENCY IS 4010 SQ. MTRS. WHICH IS LESS THAN 1 ACRE AND HENCE, THE HOUSING PROJECT OF THE ASSE SSEE IS NOT ELIGIBLE FOR DEDUCTION U/S. 80IB(10). SIMILAR REASONS WERE GIVE N BY THE ASSESSING OFFICER FOR DENYING DEDUCTION U/S. 80IB(10) IN THE ASSESSMENT YEARS 2009-10 AND 2010-11. AGGRIEVED BY THE ASSESSMENT ORDER FOR THE RESPECTIVE A SSESSMENT YEARS, THE ASSESSEE FILED APPEALS BEFORE THE COMMISSIONER O F INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER ALLOWED THE CLAIM OF ASSESSEE WITH RESPECT TO THE HOUSING PROJECT AT BHUJBAL TOWNSHIP BY PLACING RELIANCE ON THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESS MENT YEAR 2007-08 DECIDED ON 25-02-2013. HOWEVER, IN RESPECT TO DAMODAR RESIDENCY THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF THE ASSESSING OFFICER. NOW, THE ASSESSEE IS IN APP EAL AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DISALLOWING THE CLAIM OF DEDUCTION U/S. 80IB(10) ON THE HOUSIN G PROJECT DAMODAR RESIDENCY AND THE REVENUE IS AGAINST ALLOWING D EDUCTION U/S. 80IB(10) ON THE HOUSING PROJECT AT BHUJBAL TOWNSHIP. 3. SHRI C.H. NANIWADEKAR APPEARING ON BEHALF OF THE ASSESS EE SUBMITTED, THAT THE AUTHORITIES BELOW HAVE ERRED IN COMING TO THE CONCLUSION THAT THE TOTAL AREA OF PLOT ON WHICH BUILDINGS A2 , A3 AND B1 HAVE BEEN CONSTRUCTED IS LESS THAN 1 ACRE. THE ASSESS EE HAS CLAIMED DEDUCTION ONLY IN RESPECT OF RESIDENTIAL BUILDINGS I.E. BUILDINGS A2 AND A3 WHICH ARE CONSTRUCTED ON THE PLOT MEASURING 4100 SQ . MTRS. THE 6 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 CONVERSION OF 1 ACRE IS 4047 SQ. MTRS. THUS, THE BUILDINGS ON WHICH THE ASSESSEE HAD CLAIMED DEDUCTION IS MORE THAN 1 ACRE. AS FAR AS BUILDING B1 IS CONCERNED, IT IS A COMMERCIAL COMPLEX. THE SAM E IS LOCATED SEPARATELY FROM THE BUILDINGS A2 AND A3. THE AS SESSEE IS HAVING ONLY 1/5 TH SHARE IN BUILDING B1. DURING THE IMPUGNED ASSESSMENT YEARS THE BUILDING B1 HAS NOT COME INTO EXIST ENCE AND THIS FACT HAS BEEN HIGHLIGHTED BY THE DVO IN HIS REPORT. THE AUTHORITIES BELOW HAVE TIME AND AGAIN REFERRED TO THE PLOT MEASURING 4010 SQ. MTRS. WHICH IS FACTUALLY INCORRECT. THESE MEASUREMENTS HA VE BEEN WRONGLY MENTIONED IN THE ORDERS OF THE AUTHORITIES BELO W. THE AREA OF THE PLOT ON WHICH THE RESIDENTIAL BUILDINGS A2 AND A3 ARE CONSTRUCTED IS 4100 SQ. MTRS. EVEN OTHERWISE THE TOTAL AREA ON WHIC H THE PROJECT DAMODAR RESIDENCY IS BEING DEVELOPED IS APPROXIMATELY 3 A CRES. THE RESIDENTIAL BUILDINGS CONSTRUCTED AND DEVELOPED BY THE ASS ESSEE ARE PART OF THE LARGER PROJECT. IT IS AN UNDISPUTED FACT THA T THE ASSESSEE HAS COMPLIED WITH ALL OTHER CONDITIONS AS ENVISAGED U/S. 80IB(10 ). ACCORDINGLY, THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10). IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VANDA NA PROPERTIES REPORTED AS 353 ITR 36 (BOM) AND ON THE DEC ISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SANGHVI AND DOS HI ENTERPRISE REPORTED AS 29 TAXMANN.COM 386 (MADRAS). AS REGARDS T HE APPEALS FILED BY THE REVENUE, THE LD. AR CONTENDED THAT THE ISSUE RAISED BY THE DEPARTMENT IN ITS APPEALS IS SQUARELY COVERED IN FAVOUR O F THE ASSESSEE BY THE ORDER OF TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 DECIDED ON 25-02-2013 IN ITA NO. 641/PN/2011. 4. SHRI S.K. RASTOGI REPRESENTING THE DEPARTMENT VEHEME NTLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DISALLOWING THE CLAIM OF DEDUCTION U/S. 80IB(10) IN RESPECT OF H OUSING 7 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 PROJECT DAMODAR RESIDENCY. THE LD. DR SUBMITTED THAT TH E AREA OF PROJECT DEVELOPED BY THE ASSESSEE HAS NOT BEEN SPECIFIC ALLY EARMARKED. MOREOVER, THE SHARE OF THE ASSESSEE IS STILL UNDIVIDED AND THE ASSESSEE IS NOT THE OWNER OF LAND ON WHICH THE PROJECT HAS BEE N DEVELOPED. THE DVO HAS SPECIFICALLY STATED IN HIS REPORT THAT BUILDINGS A2, A3 AND B1 ARE PART OF ONE PROJECT. THE ASSESSEE HAS NOT BEEN A BLE TO DEMONSTRATE THE EXISTENCE OF SEPARATE PROJECT AND THE SIZE OF PLOT. THE ASSESSEE HAS NOT BEEN ABLE TO SHOW THAT THE HOUSING PROJECT DEVELOP ED BY THE ASSESSEE COMPLY WITH THE CONDITION OF MINIMUM SIZE OF THE PLOT I.E. 1 ACRE, AS REQUIRED U/S. 80IB(10) OF THE ACT. THE LD. DR STRO NGLY RELIED ON THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AS REGAR DS THE FINDINGS ON THE PROJECT DAMODAR RESIDENCY AND PRAYED FOR DISMISSING THE APPEALS OF THE ASSESSEE. IN SO FAR AS THE APPEALS B Y THE REVENUE, THE LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER AND PRA YED FOR REVERSING THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (AP PEALS) IN RESPECT OF HOUSING PROJECT OF THE ASSESSEE AT BHUJBAL TOWNSHIP . 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. THE ASSESSEE HAS DEVELOPED TWO RESIDENTIAL PROJECTS, ONE AT BHUJBAL TOWNSHIP IN S. NO. 67 AT KOTHRUD WHEREIN THREE RESIDENTIAL BUILDINGS I.E. B2, B5 AND B9 WERE DEVELOPED BY THE ASSESSEE AND TH E SECOND RESIDENTIAL PROJECT AT DAMODAR RESIDENCY IN S. NO. 8, KOTHR UD, PUNE. BHUJBAL TOWNSHIP IS DEVELOPED ON LAND MEASURING APPROXIMAT ELY 10 ACRES AND DAMODAR RESIDENCY IS DEVELOPED ON LAND MEASUR ING 3 ACRES. THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB(10) ON THE H OUSING PROJECTS WHICH ARE INTEGRATED PART OF THE LARGER HOUSING PROJECT S. 6. IN SO FAR AS THE RESIDENTIAL PROJECT COMPRISING OF BUILDIN GS B5, B9 AND B2 IN BHUJBAL TOWNSHIP IS CONCERNED, THE ISSUE WHETH ER THE 8 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) ON THE SAID BUILDINGS WAS RAISED BEFORE THE CO-ORDINATE BENCH OF THE T RIBUNAL IN ITA NO. 641/PN/2011 BY THE DEPARTMENT. THE TRIBUNAL UP HELD THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND HELD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) ON THE S AID PROJECT. THE RELEVANT EXTRACT OF THE FINDINGS OF THE TRIBUNAL IS AS UNDER: 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PART IES AND PERUSED THE RECORD. THE ASSESSEE HAS FILED THE PAPER BOOK WHICH HAS BEEN ALSO PERUSED. IT IS SEEN THAT THE PROJECT IS SITUATED IN SURVEY NO.67 AND CONSIST OF THE BUILDING B- 5, B-9 & B-2. THE SURVEY NO.69 IS HAVING THE AREA OF 40,700 SQ.MTRS. AND THE ENTIRE PROPERTY BEL ONG TO BHUJBAL FAMILY AND IT IS THE ANCESTRAL PROPERTY. THE PRESENT ASSES SEE FIRM IS CONSISTING OF THE FAMILY MEMBERS AS PARTNERS. THERE WAS A MOU WITH THE BIGGER BHUJBAL FAMILY AND AN AREA OF 4902 SQ.MTRS. OUT OF THE TOTAL AREA OF 40700 SQ.MTRS. IN THE SURVEY NO.67 WAS ACQUIRED BY THE SAID PARTNERSHIP FIRM FOR THE DEVELOPMENT VIDE AGREEMENT DATED 13.4. 2006 AND 21.8.2007 WHICH IS ALSO DULY REGISTERED WITH THE SUB-REGISTRA R. THE ASSESSEE FIRM PROCEEDED TO CONSTRUCT THE BUILDING NO.B-5, B-9 & B -2 ON THE SAID AREA. ADMITTEDLY IN THE AGREEMENTS, THE OPEN SPACE IS SHO WN AT 1628 SQ.FT. IN ADDITION TO AREA COVERED BY THE INTERNAL ROADS I.E. 2017.87 SQ.MTRS. AS PER THE DOCUMENT ON RECORD, THE PROJECT IS SITUATED ON THE PIECE OF LAND ADMEASURING 4902 SQ.MTRS. WE FIND THAT THE A.O. IS I NFLUENCED WITH THE REPORT OF THE DEPARTMENT VALUATION OFFICER (DVO). T HE DVO HAS REFERRED TO 26 BUILDINGS IN THE PLOT ADMEASURING 40700 SQ.MTRS. BUT THE SAID AREA BELONG TO THE BHUJBAL FAMILY OR BHUJBAL (HUF). OUT OF THE SAID AREA, 4902 SQ.MTRS. HAS BEEN ACQUIRED BY AGREEMENT BY THE ASSE SSEE FIRM. IN OUR OPINION, WE HAVE TO ONLY CONSIDER THE PROJECT ON WH ICH THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S 80IB(10) OF THE ACT, MORE PARTICULARLY, IN THE CONTEXT OF THE AREA OF THE PLOT. WE FIND THAT THE F INDING OF THE A.O. IS ERRONEOUS ON THIS ISSUE. THE LD. CIT(A) HAS EXPLAIN ED THE AREA STATEMENT IN HIS ORDER WHICH DOES NOT REQUIRE ANY INTERFERENC E. WE ACCORDINGLY, CONFIRM THE ORDER OF THE LD. CIT(A). 7. THE ASSESSING OFFICER HAS DENIED THE BENEFIT OF SECTION 8 0IB(10) TO THE ASSESSEE ON THE RESIDENTIAL PROJECT AT BHUJBAL T OWNSHIP ONLY ON THE GROUND, THAT THE DEPARTMENT HAS FILED APPEAL AGAINST THE ORDER OF TRIBUNAL BEFORE THE HON'BLE HIGH COURT. THE LD. DR HAS NOT BROUGHT BEFORE US ANY ORDER STAYING THE ORDER OF THE TRIBUNAL OR REVERSING THE 9 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 FINDINGS OF THE TRIBUNAL BY THE HON'BLE JURISDICTIONAL HIGH COU RT. WE RESPECTFULLY FOLLOW THE ORDER OF CO-ORDINATE BENCH AND DISM ISS THE APPEALS OF THE REVENUE. THUS, WE HOLD THAT THE HOUSING P ROJECT OF THE ASSESSEE AT BHUJBAL TOWNSHIP IS ELIGIBLE FOR DEDUCTION U/S. 8 0IB(10) OF THE ACT. 8. IN RESPECT OF HOUSING PROJECT AT DAMODAR RESIDENCY IS CONCERNED THE DEDUCTION U/S. 80IB(10) HAS BEEN DENIED PRIMARILY ON T WO COUNTS (I) THE AREA OF THE HOUSING PROJECT IS LESS THAN 1 ACRE, AND (II) THE LAND ON WHICH THE HOUSING PROJECT HAS BEEN DEVELOPED DOES NOT BELONG T O THE ASSESSEE. SO FAR AS THE FIRST OBJECTION OF THE REVENUE IS CONCERNED IT IS AN UNDISPUTED FACT THAT THE PROJECT DAMODAR RESIDENCY IS BEING DEVELOPED ON A TOTAL AREA OF LAND ADMEASURING 14,400 SQ. M TRS. ON THE SAID LAND, TOTAL 7 BUILDINGS HAVE BEEN APPROVED I.E. A1 TO B5 WHICH ARE RESIDENTIAL AND BUILDINGS B1 AND B2 THAT ARE COMMERCIAL. T HE DEVELOPMENT AGREEMENT DATED 06-06-2007 VIDE WHICH THE ASSESSEE HAS ACQUIRED DEVELOPMENT RIGHTS IN RESPECT OF BUILDINGS A2 AND A3, OPEN SPACE, INTERNAL ROAD AND BUILDING B1 ON LAND MEASURING 437 1 SQ. MTRS. HAS NOT BEEN DISPUTED BY THE REVENUE. A SUPPLEMENTAR Y AGREEMENT DATED 12-05-2008 WAS EXECUTED BETWEEN THE OWNERS AN D THE ASSESSEE CONFIRMING THE LAY OUT PLAN OF THE TOTAL PLOT OF LAND ON WHICH BUILDINGS A2, A3 AND B1 AND OPEN AREA WAS TO BE DEVELOPED BY TH E ASSESSEE. AS PER THE LAY OUT PLAN THE AREA ON WHICH BUILDINGS A2 AND A 3 WERE DEVELOPED IS MEASURING 4100 SQ. MTRS. THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF RESIDENTIAL BUILDINGS A2 AND A3 ONLY. THUS, THE TOTAL AREA OF PLOT ON WHICH THE RESIDENTIA L PROJECT IS DEVELOPED BY THE ASSESSEE STANDS ON LAND MEASURING MOR E THAN 1 ACRE (CONVERSION 1 ACRE = 4047 SQ. MTRS.). EVEN IF THE PROJECT DEVELOPED BY THE ASSESSEE IS CONSIDERED AS THE PART OF THE LARGER PR OJECT EVEN THEN THE AREA OF PLOT IS MUCH MORE THAN THE MINIMUM AREA SPEC IFIED UNDER 10 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. THERE IS N O BAR TO CLAIM DEDUCTION U/S. 80IB(10) ON THE HOUSING PROJECT WHICH HAS BEEN DEVELOPED ON A PLOT OF LAND HAVING AREA MORE THAN 1 ACRE S, EVEN IF SOME OTHER RESIDENTIAL PROJECTS ARE ALREADY IN EXISTENCE THEREON. 9. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VANDANA PROPERTIES (SUPRA) HAS HELD THAT THE PROVISIONS OF SECTION 80IB(10) DOES NOT MANDATE THAT THE HOUSING PROJECT SHOULD BE ON A V ACANT PLOT HAVING MINIMUM AREA. THE HOUSING PROJECT IS ELIGIBLE FOR DEDUCTION U /S. 80IB(10) SUBJECT TO FULFILLING OTHER CONDITIONS, IF IT IS ON A PLO T WHERE OTHER HOUSING PROJECTS ARE ALREADY IN EXISTENCE. THE R ELEVANT EXTRACT OF THE JUDGMENT OF THE HON'BLE HIGH COURT IN THE CASE OF CI T VS. VANDANA PROPERTIES (SUPRA) READS AS UNDER: 27. MOREOVER, PLAIN READING OF SECTION 80IB (10) D OES NOT EVEN REMOTELY SUGGEST THAT THE PLOT OF LAND HAVING MINIM UM AREA OF ONE ACRE MUST BE VACANT. THE SAID SECTION ALLOWS DEDUCTION T O A HOUSING PROJECT (SUBJECT TO FULFILLING ALL OTHER CONDITIONS) CONSTR UCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE AND IT IS IMMATERIA L AS TO WHETHER ANY OTHER HOUSING PROJECTS ARE EXISTING ON THE SAID PLO T OF LAND OR NOT. IN THESE CIRCUMSTANCES, CONSTRUING THE PROVISIONS OF S ECTION 80IB (10) BY ADDING WORDS TO THE STATUTE IS WHOLLY UNWARRANTED A ND SUCH A CONSTRUCTION WHICH DEFEATS THE OBJECT WITH WHICH TH E SECTION WAS ENACTED MUST BE REJECTED. 28. APART FROM THE ABOVE, THE CENTRAL BOARD OF DIRE CT TAXES (CBDT) BY ITS LETTER DATED 4TH MAY 2001 ADDRESSED TO THE MAHA RASHTRA CHAMBER OF HOUSING INDUSTRY HAS STATED THUS: THE UNDERSIGNED IS DIRECTED TO REFER TO YOUR LETTE R NO.MCHI:RSA:M:388/19799/3 DATED 1 ST JANUARY 2001 AND TO STATE THAT THE ADDITIONAL HOUSING PROJECT ON EXISTING HOUSING PROJECT SITE CAN QUALIFY AS INFRASTRUCTURE FACILITY UNDER SECTION 10(23G) AN D 80IB (10) PROVIDED IT IS TAKEN UP BY A SEPARATE UNDERTAKING, HAVING SEPAR ATE BOOKS OF ACCOUNTS, SO AS TO ENSURE THAT CORRECT PROFITS CAN BE ASCERTAINED FOR THE PURPOSE OF SECTION 80IB AND ALSO TO IDENTIFY RECEIP TS AND REPAYMENTS OF LONG TERM FINANCES UNDER THE PROVISIONS OF SECTION 10(23G), SEPARATELY FINANCING ARRANGEMENTS AND ALSO, IF IT SEPARATELY F ULFILLS ALL OTHER STATUTORY CONDITIONS LISTED IN SECTIONS 10(23G) AND 80(B(10). WITH REGARD 11 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 TO YOUR QUERY REGARDING THE DEFINITION OF HOUSING P ROJECT, IT IS CLARIFIED THAT ANY PROJECT WHICH HAS BEEN APPROVED BY A LOCAL AUTHORITY AS A HOUSING PROJECT SHOULD BE CONSIDERED ADEQUATE FOR T HE PURPOSE OF SECTION 10(23G) AND 80IB(10)' 29. FROM THE AFORESAID LETTER OF CBDT, IT IS CLEAR THAT FOR THE PURPOSES OF SECTION 80IB(10) IT IS NOT THE MANDATE OF THE SECTI ON THAT THE HOUSING PROJECT MUST BE ON A VACANT PLOT OF LAND HAVING MIN IMUM AREA OF ONE ACRE AND THAT WHERE A NEW HOUSING PROJECT IS CONSTRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE BUT WITH EXISTING H OUSING PROJECTS WOULD QUALIFY FOR SECTION 80IB(10) DEDUCTION. EVEN OTHERWISE, THE ARGUMENT OF THE REVENUE DOES NOT STAND TO REASON BE CAUSE, IN THE CITY OF MUMBAI WHERE THERE IS ACUTE SPACE CRUNCH, IT IS DIF FICULT TO FIND A VACANT PLOT HAVING MINIMUM AREA OF ONE ACRE AND EVEN IF FE W SUCH PLOTS ARE EXISTING IT CANNOT BE SAID THAT SECTION 80IB (10) D EDUCTION WAS INTENDED TO GIVE BENEFIT ONLY TO THE UNDERTAKINGS WHO CONSTR UCT HOUSING PROJECTS ON THOSE FEW PLOTS. THEREFORE, IT IS CLEAR THAT ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE, THERE CAN BE ANY NUMBER O F HOUSING PROJECTS AND SO LONG AS THOSE HOUSING PROJECTS ARE APPROVED BY THE LOCAL AUTHORITY AND FULFILL THE CONDITIONS SET OUT UNDER SECTION 80 IB(10), THE DEDUCTION THERE UNDER CANNOT BE DENIED TO ALL THOSE HOUSING P ROJECTS. SECTION 80IB(10) WHILE SPECIFYING THE SIZE OF THE PLOT OF L AND, DOES NOT SPECIFY THE SIZE OR THE NUMBER OF HOUSING PROJECTS THAT ARE REQ UIRED TO BE UNDERTAKEN ON A PLOT HAVING MINIMUM AREA OF ONE ACRE. AS A RES ULT, SIGNIFICANCE OF THE SIZE OF THE PLOT OF LAND IS LOST AND, THEREFORE , THE ASSESSEE SUBJECT TO FULFILLING OTHER CONDITIONS BECOMES ENTITLED TO SEC TION 80IB(10) DEDUCTION ON CONSTRUCTION OF A HOUSING PROJECT ON A PLOT HAVI NG AREA OF ONE ACRE, IRRESPECTIVE OF THE FACT THAT THERE EXIST OTHER HOU SING PROJECTS OR NOT. IN THESE CIRCUMSTANCES, THE DECISION OF THE TRIBUNAL I N REJECTING THE CONTENTION OF THE REVENUE REGARDING THE SIZE OF THE PLOT CANNOT BE FAULTED. 10. SO FAR AS THE OBJECTION OF THE DEPARTMENT THAT TH E LAND ON WHICH THE HOUSING PROJECT IS DEVELOPED IS NOT OWNED BY THE AS SESSEE AND IS STILL UNDIVIDED, WE DO NOT FIND ANY MERIT. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SANGHVI AND DOSHI ENTERPR ISE (SUPRA) HAS HELD THAT OWNERSHIP OF LAND IS NOT A CRITERIA TO DECIDE ST ATUS OF DEVELOPER TO CLAIM DEDUCTION U/S. 80IB(10). THE PROVISIONS OF SECTION 80IB(10) DOES NOT REQUIRE THAT THE DEVELOPER WHO OWNS THE LAND IS ONLY ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10). 12 ITA NOS. 583, 2086, 707 & 2115/PN/2012 & 1920/PN/20 13, A.YS. 2008-09, 2009-10 & 2010-11 11. THUS, IN THE FACTS OF THE CASE AND THE CASE LAWS D ISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE AUTHORITIES BELOW HAVE ERRED IN COMING TO THE CONCLUSION THAT THE HOUSING PROJECT OF THE ASSESSEE AT DAMODAR RESIDENCY IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S. 80I B(10) OF THE ACT. THE APPEALS OF THE ASSESSEE ARE ALLOWED IN ALL T HE THREE IMPUGNED ASSESSMENT YEARS AND THE ASSESSING OFFICER IS DIR ECTED TO GRANT DEDUCTION U/S. 80IB(10) TO THE ASSESSEE ON THE HO USING PROJECT AT DAMODAR RESIDENCY. 12. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR ASSESS MENT YEARS 2008-09, 2009-10 AND 2010-11 ARE ALLOWED AND THE APPE ALS OF THE REVENUE FOR ASSESSMENT YEARS 2008-09 AND 2009-10 ARE DISMISS ED. ORDER PRONOUNCED ON WEDNESDAY, THE 30 TH DAY OF SEPTEMBER, 2015. SD/- SD/- (PRADIP KUMAR KEDIA) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 30 TH SEPTEMBER, 2015 RK +,!-./)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. # # $ () / THE CIT(A)-II, PUNE 4. # # $ / THE CIT-II, PUNE 5. '() *+ , # *+ , , -./ , / DR, ITAT, A BENCH, PUNE. 6. )01 23 / GUARD FILE. // ' // TRUE COPY// #4 / BY ORDER, 5 */ / PRIVATE SECRETARY, # *+ , / ITAT, PUNE
