The ACIT, Central Circle-3, Surat V. M/s. Rushivan Enterprises, Surat

ITA 2087/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6291 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 11-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASANJIT SINGH
• Assessee Lawyers: RASESH SHAH
• Keywords: Revised return
• Section: 153A; 80IB; 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ IT(SS)A NO.295, 296 AND 297/AHD/2014 / ASSTT. YEAR: 2008-2009 TO 2010-2011 ACIT, CENT.CIR.3 SURAT. VS. M/S.RUSHIVAN ENTERPRISES 101, NIRMAN BHAVAN MAJURA GATE, SURAT PIN 395 001. PAN : AAIFR 6035 L ITA.NO.2087/AHD/2014 ASSTT.YEAR : 2011-12 ACIT, CENT.CIR.3 SURAT. VS. M/S.RUSHIVAN ENTERPRISES 101, NIRMAN BHAVAN MAJURA GATE, SURAT PIN 395 001. PAN : AAIFR 6035 L / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI RASESH SHAH REVENUE BY : SHRI PRASANJIT SINGH CIT-DR ! / DATE OF HEARING : 07/03/2017 '#$ ! / DATE OF PRONOUNCEMENT: 03 /04/2017 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 2 PRESENT FOUR APPEALS ARE DIRECTED AT THE INSTANCE O F THE REVENUE AGAINST SEPARATE ORDERS OF THE LD.CIT(A)-II, SURAT DATED 4.4.2014 PASSED FOR THE ASSTT.YEAR 2008-09 TO 2011-12. COMM ON ISSUES ARE INVOLVED IN THESE APPEALS, AND THEREFORE, WE HEARD THEM TOGETHER AND DEEM IT APPROPRIATE TO DISPOSE OF THEM BY THIS COMM ON ORDER. 2. WE FIND THAT GROUNDS OF APPEAL TAKEN BY THE REVE NUE ARE VERBATIM SAME IN ALL FOUR YEARS, THEREFORE, FOR THE FACILITY OF REFERENCE, WE TAKE NOTE OF THE GROUNDS FROM THE ASSTT.YEAR 200 8-09. IT READS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRE CTING TO ALLOW PROPORTIONATE DEDUCTION U/S 80IB(10) OF THE A CT THOUGH THE HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY AS A SINGLE PROJECT. 2. THE ID.CIT(A) FAILED TO APPRECIATE THAT SECTION 80I B(10) PROVIDES FOR DEDUCTION TO THE ENTIRE HOUSING PROJEC T AND NOT TO A PART OF THE PROJECT ON PROPORTIONATE BASIS. 3. ON FACT AND CIRCUMSTANCES OF THE CASE, THE LD. CIT( A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT( A) BE SET ASIDE AND THAT OF THE A.Q. BE RESTORED TO THE ABOVE EXTEN T. 3. IN THE ASSTT.YEAR 2008-09, THE ASSESSEE HAS FILE D ITS RETURN OF INCOME ON 30.9.2008. SIMILARLY, RETURNS IN OTHER Y EARS WERE FILED WITHIN THE TIME LIMIT AVAILABLE UNDER SECTION 139(1) OF TH E INCOME TAX ACT. THIS ASPECT IS NOT DISPUTED BY THE PARTIES. 4. A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE PARTNERS AND BUS INESS PREMISES OF THE ASSESSEE. ACCORDINGLY, NOTICES UNDER SECTION 153A WERE ISSUED UPON THE ASSESSEE IN ALL THESE FOUR YEARS. THE ASSESSEE HAS FILED RETURNS IN RESPONSE TO THESE NOTICES ON 18.10.2011. IT IS PER TINENT TO MENTION THAT IN THE ASSTT.YEAR 2008-09, THE ASSESSEE HAS OR IGINAL DECLARED INCOME AT RS.76,98,600/-. THIS RETURN WAS REVISED ON 30.11.2010 IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 3 SHOWING A TOTAL INCOME AT RS.3,08,66,120/-. IN RES PONSE TO THE NOTICE UNDER SECTION 153A, THE ASSESSEE HAS REITERATED THE SE AMOUNTS IN THE RETURNS FILED ON 18.10.2011. UNDER SIMILAR CIRCUMS TANCES, ORIGINAL RETURNS WERE REVISED IN ALL OTHER YEARS AND THOSE V ERY AMOUNTS WERE AGAIN REITERATED IN THE RETURNS FILED IN RESPONSE T O NOTICE UNDER SECTION 153A. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80IB OF THE ACT. I N SUPPORT OF ITS CLAIM, IT HAS SUBMITTED A NOTE WHICH HAS DULY BEEN REPRODUCED BY THE AO. THIS NOTE HAS BEEN FILED BEFORE THE LD.CIT(A) ALSO, AND IT HAS BEEN REPRODUCED FROM PAGE NO.8 TO 19 OF THE IMPUGNED ORD ER. EXCEPT VARIATION IN THE QUANTUM, THERE IS NO DISPUTE ON FA CTS IN THIS NOTE RATHER IT IS VERBATIM. THIS NOTE CONTAINED BRIEFLY ALL FACTS NECESSARY FOR UNDERSTANDING THE ISSUE. THEREFORE, WE DEEM IT PER TINENT TO TAKE COGNIZANCE OF THIS NOTE IN ORDER TO APPRECIATE THE ISSUE MORE SCIENTIFICALLY. THE RELEVANT PART OF IT READS AS U NDER: 'THE APPELLANT FIRM IS ENGAGED IN THE ACTIVITY OF D EVELOPING AND BUILDING OF A HOUSING PROJECT NAMED RATNA JYOTI APA RTMENTS, CONSISTING OF 8 TOWERS AT VILLAGE VESU, DISTRICT SU RAT. THE APPELLANT FIRM FILED ITS ORIGINAL RETURN OF INC OME ON 30-09- 2008, DECLARING TOTAL INCOME OF RS. 76,98,600/-, WH ICH WAS VOLUNTARILY REVISED ON 30-11-2010 DECLARING TOTAL I NCOME OF RS. 3,08,66,120/-. THE APPELLANT FIRM HAD NOT CLAIMED D EDUCTION U/S. 80IB(10) OF THE ACT IN THESE RETURNS OF INCOME. A SEARCH ACTION U/S. 132 OF THE ACT WAS CONDUCTED O N 08-06-2010 IN THE CASE OF THE APPELLANT FIRM AND IN RESPONSE T O THE NOTICE U/S. 153A OF THE ACT, THE APPELLANT FIRM FILED ITS RETUR N OF INCOME ON 18-10-2011, DECLARING THE SAME TOTAL INCOME OF RS. 3,08,66,120/- AS SHOWN IN ITS REVISED RETURN OF INCOME. HOWEVER, IN THE NOTES ATTACHED WITH THE RETURN OF I NCOME FILED U/S. 153A OF THE ACT, THE APPELLANT CLAIMED DEDUCTI ON U/S. 80IB(10) OF THE ACT AMOUNTING TO RS. 1,38,55,205/- IN RESPECT OF ONE PART OF ITS PROJECT WHICH INDIVIDUALLY FULFILLE D ALL THE CONDITIONS AS LAID DOWN IN SECTION 80IB(10) OF THE ACT. IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 4 THE WORKING OF THE CLAIM OF THE DEDUCTION U/S. 80IB (10) OF THE ACT AS FURNISHED WITH RETURN OF INCOME U/S. 153A IS ENC LOSED HEREWITH IN EXHIBIT-1 FOR THE KIND CONSIDERATION OF YOUR HON OUR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AP PELLANT FIRM FURNISHED COMPLETE DETAILS AND DOCUMENTARY EVIDENCE S EXPLAINING THE LEARNED AO THAT ONE PART OF ITS PROJECT INDIVID UALLY FULFILLED ALL THE CONDITIONS AS LAID DOWN IN SECTION 80IB(10) OF THE ACT AND ACCORDINGLY, DEDUCTION AMOUNTING TO RS. 1,38,55,205 /- IN RESPECT OF PROFIT FROM THE SAID HOUSING PROJECT SHOULD BE G RANTED TO IT. THE DETAILS AND EXPLANATIONS AS SUBMITTED TO THE LE ARNED AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ARE FUR NISHED HEREIN BELOW, FOR THE IMMEDIATE REFERENCE OF YOUR HONOUR. THE APPELLANT FIRM 'M/S. RUSHIVAN ENTERPRISE' IS EN GAGED IN ACTIVITY OF DEVELOPING AND BUILDING HOUSING PROJECT IN THE NAME OF 'RATNA JYOTI APARTMENT' COMPRISING OF 8 HIGH-RISE B UILDINGS, ON A TOTAL AREA OF LAND ADMEASURING 22529 SQ. MTRS. I.E. 5.567 ACRES, CONSISTING OF 2 DIFFERENT PLOTS OF LAND SITUATED AT VILL. VESU, DIST. SURAT. THE DETAIL OF THESE 2 PLOTS OF LAND IS AS FOLLOWS. (I) F. P. NO. 107, 108 & 109, T. P. S. NO. 2, ADMEASURI NG 15034 SQ.MTRS. I.E. 3.715 ACRE AND (II) F. P. NO. 05, T. P. S. NO. 7, ADMEASURING 7495 SQ. MTRS. I.E.1.852 ACRE. ON THE FIRST PLOT OF LAND BEARING T. P. S. NO. 2, F .P. NO. 107, 108 & 109, SIX TOWERS I.E. A, B, E, F, G & H ARE CONSTR UCTED WHEREIN - THE LAND AREA IS 15034 SQ. MTRS. I.E. 3.715 AC RE WHICH IS MORE THAN 1 ACRE. - THERE ARE NO COMMERCIAL SHOPS - EACH OF THE FLATS IN ALI THESE 6 TOWERS ARE HAVI NG BUILT UP AREA OF LESS THEN 1500SQ. FTS. - THE CONSTRUCTION HAS ALSO COMMENCED AND HAS EV EN BEEN COMPLETED WITHIN THE SPECIFIED TIME. THUS, THE SAID PROJECT CONSISTING OF 6 TOWERS IS CO NSIDERED AS AN 80IB(10) PROJECT FULFILLING ALL THE STATUTORY CONDI TIONS AS LAID DOWN UNDER THE ACT. WHEREAS, ON THE SECOND PLOT OF LAND BEARING T. P. S . NO. 7, P.P. NO. 5, THE OTHER TWO TOWERS I.E. C & D ARE CONSTRUC TED WHEREIN IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 5 THE LAND AREA IS 7495 SQ. MTR. OF LAND I.E. 1.852 A CRES WHICH IS ALSO MORE THAN 1 ACRE. THERE ARE NO COMMERCIAL SHOPS EVEN ON THIS PLOT HOW EVER, EACH OF THE FLATS IN THESE 2 TOWERS ARE HAVING BUILT UP ARE A OF MORE THEN 1500 SQ. FTS. THUS, THE SAID PROJECT CONSISTING OF 2 TOWERS IS CO NSIDERED AS A NORMAL HOUSING PROJECT NOT ELIGIBLE FOR DEDUCTION U /S. 80IB(10). MOREOVER, IT IS ALSO SIGNIFICANT TO NOTE THAT THE P LAN FOR BOTH THE PROJECTS HAS BEEN APPROVED ON 09-02-2007 I.E. BEFOR E THE SPECIFIED DUE DATE OF 31-03-2008. THE DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PRO JECT HAS ALSO COMMENCED IMMEDIATELY ON GETTING THE APPROVAL AND T HE SAME STANDS COMPLETED IN THE F.Y. 2009-10 AND F.Y. 2010- 11 I.E. WITHIN 5 YEARS FROM THE END OF THE FINANCIAL YEAR 2006-07 I.E. THE YEAR IN WHICH THE PROJECT WAS FIRST APPROVED. ACCORDINGLY, THE PROFIT DERIVED FROM THE HOUSING PR OJECT ON THE FIRST PLOT BEARING P.P. NO. 107,108 & 109, T.P. S. NO. 2, CONSISTING OF 6 TOWERS A, B, E, F, G & H, WAS FULLY ELIGIBLE F OR DEDUCTION U/S. 80IB(10) OF THE ACT, SINCE IT INDIVIDUALLY FULFILLE D ALL THE REQUIREMENTS AS LAID DOWN IN THE SAID SECTION. IN T HE FOLLOWING TABLE, WE SUMMARIZE ALL THE CONDITIONS AS SPECIFIED IN SECTION 80IB(10) OF THE ACT AND THE FURNISH THE DETAILS AS TO HOW THE SAID CONDITIONS STANDS SATISFIED BY OUR 80IB PROJECT OF OUR FIRM. SR.NO. CONDITIONS LAID DOWN U/S.80IB(10) PROJECT RATNA JYOTI APARTMENT 1. PROJECT SHOULD BE APPROVED BY THE LOCAL AUTHORITY BEFORE 31-03-2008 THE PROJECT 'RATNA JYOTI APARTMENT' IS APPROVED BY THE LOCAL AUTHORITY I.E. SURAT MUNICIPAL CORPORATION (SMC) ON 09-02-2007 I.E. BEFORE THE SPECIFIED DUE DATE I.E. 31-03-2008, FOR WHICH THE COPY OF PLAN APPROVAL AND BUILDING PLAN IS ENCLOSED HEREWITH IN EXHIBIT-3. 2. THE SIZE OF THE PLOT OF THE LAND IS A MINIMUM OF 1 ACRE. THE SIZE OF THE PLOT OF LAND FOR 80IB OF THE PROJECT 'RATNA JYOTI APARTMENT' IS 15034 SQ. MTS. I.E. 3.715 ACRES. IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 6 3. THE UNDERTAKING COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT AFTER 30-09-1998 AND SHOULD COMPLETE CONSTRUCTION WITHIN 5 YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE PROJECT WAS FIRST APPROVED BY THE LOCAL AUTHORITY. THE FIRM HAS BEEN INCORPORATED ON 02-08-2005 I.E. THE DEVELOPMENT AND CONSTRUCTION OF THE PROJECT 'RATNA JYOTI APARTMENT' HAS COMMENCED AFTER THE SPECIFIED DATE OF 30-09-1998 AND BUG HAS BEEN OBTAINED ON 15-05-2009 FOR 4 TOWERS E, F, G & H AND ON 15-05- 2010 FOR OTHER 2 TOWERS A & B, THUS THE ENTIRE 801B PROJECT STANDS COMPLETED WITHIN 5 YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT WAS FIRST APPROVED EXPIRING ON 31-03- 2012. A COPY OF BUILDING USANCE CERTIFICATE (BUG) DTD. 15-05- 2009 AND 15-05-2010 AS ISSUED BY LOCAL AUTHORITY IS ENCLOSED HEREWITH IN EXHIBIT- 4. 4. THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE PROJECT SHALL NOT EXCEED 5% OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR 2,000 SQ. FT. WHICHEVER IS LESS. THERE IS NO SHOP OR COMMERCIAL ESTABLISHMENT IN THE SAID PROJECT AS CAN BE SEEN FROM THE APPROVED PLAN AND HENCE, THE SUBJECT CONDITION IS NOT AT ALL APPLICABLE TO THE PROJECT. 5. THE BUILT-UP AREA OF EACH RESIDENTIAL UNIT SHOULD NOT EXCEED 1500 SQ.FT. THE DETAIL OF BUILT-UP AREA OF EACH FLAT AS PER THE BUILDING PLAN APPROVED BY THE LOCAL AUTHORITY IS ENCLOSED HEREWITH IN EXHIBIT-5. ON GOING THROUGH THE SAID IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 7 DETAILS AS ALSO THE APPROVED PLAN AND THE SALE DOCUMENT SUBMITTED PRODUCED HEREWITH YOUR HONOUR WOULD BE SATISFIED THAT EACH OF THE RESIDENTIAL UNIT OF THE 80IB PROJECT IS BELOW 1,500 SQ. FT. AND THUS, THE SUBJECT CONDITION ALSO STANDS SATISFIED IF THE ALLOTTEE IS OTHER THAN AN INDIVIDUAL, THEN NOT MORE THAN 1 UNIT SHOULD BE ALLOTTED TO THE SAME ALLOTTEE. IF THE ALLOTTEE IS AN INDIVIDUAL, NO OTHER UNIT IN THE PROJECT SHOULD BE ALLOTTED TO THE SAME INDIVIDUAL, HIS/HER SPOUSE, MINOR CHILDREN, HUF OR ANY PERSON REPRESENTING SUCH INDIVIDUAL, SPOUSE, MINOR CHILDREN OR HUF. THE FIRM HAS NOT SOLD MORE THAN 1 UNIT TO ONE ALLOTTEE OTHER THAN INDIVIDUAL. THE FIRM HAS ALSO NOT SOLD MORE THAN 1 UNIT TO AN INDIVIDUAL AS ALSO HIS/HER SPOUSE, MINOR CHILDREN, HUF OR ANY PERSON REPRESENTING SUCH INDIVIDUAL, SPOUSE, MINOR CHILDREN OR HUF AND THUS, THE SUBJECT CONDITION ALSO STANDS SATISFIED. DEDUCTION SHOULD BE CLAIMED IN THE RETURN OF INCOME AND THE SAME SHOULD BE FILED ON OR BEFORE THE DUE DATE AS PROVIDED IN SECTION 139(1). THE ORIGINAL RETURN HAS BEEN FILED ON 30-09-2008 I.E. BEFORE THE DUE DATE AS PROVIDED U/S. 139(1). THE FOLLOWING DOCUMENTARY EVIDENCES WERE ALSO SUBMI TTED TO THE LEARNED AO DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, IN RESPECT OF THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. (1) COPY OF THE APPROVED PLAN DATED 09-02-2007; (2) COPY OF THE BUILDING USANCE CERTIFICATE (BUG) D ATED 15-05- 2009 AND 15-05-2010 AS ISSUED BY THE LOCAL AUTHORIT Y; IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 8 (3) COPY OF THE ARCHITECT'S CERTIFICATE CERTIFYING THE BUILT-UP AREA OF EACH FLAT IN TOWER A, B, E, F, G & H BEING LESS THAN 1500 SQ. FT.; (4) COPY OF LAND PURCHASE DOCUMENTS SPECIFYING THE AREA OF LAND BEING MORE THAN 1 ACRE; AND (5) AUDIT REPORT OF THE CHARTERED ACCOUNTANT AS REQ UIRED U/S. 80IB. FROM THE ABOVE FACTS AND DOCUMENTARY EVIDENCES, YOU R HONOUR WOULD APPRECIATE THAT THE FIRST PROJECT OF THE APPE LLANT FIRM CONSISTING OF TOWERS A, B, E, F, G & H FULFILS ALL THE CONDITIONS U/S. 80IB(10) OF THE ACT AND ACCORDINGLY IS ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF THE ACT. HOWEVER, THE SAID CLAIM WAS IN ADVERTENTLY NOT MADE IN THE RETURN OF INCOME FILED U/S. 139(1) OF THE ACT BUT THE SAME WAS CLAIMED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A. IT MAY BE NOTED THAT FOR THE YEAR UNDER CONSIDERATI ON, THE APPELLANT FIRM HAS CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT AT RS.1,38,55,205/- IN RESPECT OF THE PROFIT DERIVED F ROM THE SALE OF FLATS IN TOWER A, B, E, F, G & H, OUT OF THE TOTAL INCOME OF RS. 3,08,66,120/- OF THE ENTIRE FIRM. THE LEARNED AO HAS FAILED TO APPRECIATE THE AFORESA ID FACTS AND REJECTED THE APPELLANT FIRM'S CLAIM OF DEDUCTION U/ S. 80IB(10) OF THE ACT, ON VARIOUS ALLEGATIONS, WHICH ARE REBUTTED HEREIN AFTER. IN PARA 8(I) ON PAGE NO. 20 OF THE IMPUGNED ORDER, THE LEARNED AO HAS ALLEGED THAT THE APPELLANT FIRM HAS CONSTRUC TED ONE COMMON PROJECT BY THE NAME RATNA JYOTI APARTMENTS W HERE IN FLATS IN TOWERS A, B, E, F, G AND H ARE HAVING BUIL T-UP AREA OF LESS THAN 1500 SQ. FTS. WHEREAS, FLATS IN TOWER C AND D ARE HAVING BUILT-UP AREA OF MORE THAN 1500 SQ. FTS. THUS, THE APPELLANT FIRM HAS BUILT ONE PROJECT AND THERE ARE NO 2 SEPARATE P ROJECTS AND THEREFORE, THE CLAIM THAT ITS SINGLE PROJECT BE TRE ATED AS 2 DIFFERENT PROJECTS IS NOT ACCEPTABLE. THE AFORESAID OBSERVATION OF THE LEARNED AO IS INCO RRECT FOR THE FOLLOWING REASONS: FIRSTLY, THE APPELLANT FIRM HAS PURCHASED 2 SEPARAT E PLOTS OF LAND, WHEREIN ON ONE PLOT 6 TOWERS ARE CONSTRUCTED WHICH IS AN 80IB PROJECT AND ON THE OTHER PLOT, 2 TOWERS ARE CONSTRU CTED WHICH IS A NORMAL PROJECT. SECONDLY, THERE ARE 2 SEPARATE ENTRIES BY DIFFERENT GATES TO BOTH THESE PROJECTS. IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 9 IN THIS REGARD, WE ENCLOSE HEREWITH EXHIBIT-7 PHOTO GRAPHS OF THE PROJECT SHOWING 2 SEPARATE ENTRIES BY 2 DIFFERENT G ATES. LASTLY, BUT MOST IMPORTANTLY IT IS MOST HUMBLY SUBM ITTED THAT SECTION 80IB(10) ALLOWS DEDUCTION TO A HOUSING PROJ ECT WHICH FULFILS ALL THE CONDITIONS AS LAID THEREIN AND THER E IS NO RESTRICTION THAT THE SAID DEDUCTION IS NOT ALLOWABLE IF THERE A RE OTHER HOUSING PROJECTS EXISTING ON THE SAID LAND OR THAT SOME FLA TS IN OTHER BUILDING NOT FORMING PART OF 80IB(10) PROJECT ARE E XCEEDING THE SPECIFIED LIMIT, FOR WHICH THE FOLLOWING DIRECT DEC ISIONS ARE RELIED UPON. THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT V. VANDANA PROPERTIES (2012) 76 DTR (BOM) 363 HAS HELD THAT SE CTION 80IB(10) ALLOWS DEDUCTION TO A HOUSING PROJECT CONS TRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE AND IT IS IMMATERIAL AS TO WHETHER ANY OTHER HOUSING PROJECTS ARE EXISTI NG ON THE SAID PLOT OF LAND OR NOT. THE HON'BLE MUMBAI BENCH OF ITAT IN THE CASE OF SAR OJ SALES ORGANISATION V. ITO (2008) 3 DTR 494 HAS HELD THAT ASSESSEE HAVING COMPLETED THE CONSTRUCTION OF VARIOUS WINGS OF THE BUILDING UNDER THE APPROVED PLAN IN 2 DIFFERENT BLOCKS UNDER DIFFERENT CERTIFICATES OF COMMENCEMENT, WAS ELIGIBLE FOR DEDU CTION U/S. 80IB(10) IN RESPECT OF 1 BLOCK FOR WHICH CLAIM FOR DEDUCTION WAS MADE AND WHICH SATISFIED THE REQUIREMENTS OF SECTIO N 80IB(10) AND THE CLAIM COULD NOT BE DENIED BY CLUBBING THE 2 BLOCKS ESPECIALLY WHEN THE 2ND BLOCK HAD BEEN KEPT SEPARAT E BY THE ASSESSEE AND FOR WHICH DEDUCTION U/S. 80IB(10) WAS NOT CLAIMED. THE HON'BLE HIGH COURT OF MADRAS IN THE CASE OF CIT V. M/S. ARUN EXELLO FOUNDATIONS PVT. LTD. 2012-TIOL-1005-HC-MAD- IT HAS HELD THAT GIVEN THE OBJECT OF THE PROVISIONS U/S. 80IB(1 0), WHEN THE DEDUCTION TO BE GRANTED IS ON THE PROFITS AND GAINS OF UNDERTAKING DEVELOPING AND CONSTRUCTING APPROVED HOUSING PROJEC TS, IN THE ABSENCE OF RESTRICTIVE COVENANT UNDER SUB-SECTION ( 10) OF SECTION 80IB, IT IS NOT JUSTIFIABLE TO HOLD THAT ON THE MER E FACT OF SOME OF THE UNITS HAVING THE BUILT-UP AREA EXCEEDING THE CO NDITIONS SPECIFIED UNDER CLAUSE (C), THE CLAIM FOR DEDUCTION WOULD STAND REJECTED ON THE ENTIRE PROJECT. THE COURT FURTHER HELD THAT IT IS NO DOUBT TRUE THA T THE SECTION DOES NOT PROVIDE ANY SUCH WORKING OF ALLOWING DEDUC TION ON PRO- RATA BASIS YET, THIS BEING A DEDUCTION PROVISION AN D THERE BEING NO SUCH INDICATION THAT THE CONDITIONS HAVE TO BE CUMU LATIVELY SATISFIED IN THE CONTEXT OF THE MEANING OF A 'HOUSI NG PROJECT' TO INCLUDE RESIDENTIAL CUM COMMERCIAL COMPLEX, IT IS F AIR THAT THE IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 10 PROPORTIONATE RELIEF HAS TO BE READ INTO THE PROVIS IONS, SO THAT DEDUCTION PROVISIONS ARE SUSTAINED. IN VIEW OF THE ABOVE FACTS AND DIRECT DECISIONS APP LICABLE THERETO, IT IS MOST HUMBLY SUBMITTED THAT THE LEARNED AO HAS GROSSLY ERRED IN NOT GRANTING THE BENEFIT OF DEDUCTION U/S. 80IB( 10) OF THE ACT TO THE PROJECT CONSISTING OF 6 TOWERS VIZ. A, B, E, F, G & H EVEN THOUGH THE SAID PROJECT INDIVIDUALLY SATISFIES ALL THE REQUIREMENTS AS LAID DOWN IN SECTION 80IB(10). THE LEARNED AO HA S DENIED THE DEDUCTION U/S. 80IB(10) TO THE SAID 6 TOWERS ON THE GROUND THAT THE FLATS IN THE OTHER 2 TOWERS VIZ. C & D ARE EXCE EDING THE BUILT- UP AREA OF 1500 SQ. FT. WITHOUT APPRECIATING THAT T HE APPELLANT FIRM HAS NOT CLAIMED THE DEDUCTION IN RESPECT OF TH E PROFIT FROM THE 2 TOWERS C & D BY ERRONEOUSLY HOLDING THAT THER E IS ONE COMMON PROJECT OF THE APPELLANT FIRM WHICH IS ABSOL UTELY ERRONEOUS AND BAD IN LAW SINCE SECTION 80IB(10) NOW HERE LAYS DOWN A CONDITION THAT IF ONE PARTICULAR PROJECT SAT ISFIES ALL THE CONDITIONS AS LAID DOWN THEREIN AND THERE IS SOME O THER PROJECT IN THE SAME FIRM WHICH DOES NOT FULFILL THE REQUIREMEN TS, THEN DEDUCTION WOULD NOT BE AVAILABLE EVEN TO THE PROJEC T FULFILLING ALL THE REQUIREMENT OF THE SAID SECTION. 5. ALL THESE DETAILS WERE SUBMITTED BEFORE THE AO A ND THE LD.AO HAS REPRODUCED THESE DETAILS, BUT HE REJECTED THE CLAIM S OF THE ASSESSEE. FOUR REASONS ASSIGNED BY THE AO READS AS UNDER: THE ASSESSEE HAS CONSTRUCTED ONE COMMON PROJECT BY THE NAME RATNA JYOTI APARTMENTS WHERE IN FLATS IN TOWERS A, B, E, F, G AND H ARE HAVING BUILT-UP AREA OF LESS THAN 1500 SQ. FT S. WHEREAS, FLATS IN TOWER C AND D ARE HAVING BUILT-UP AREA OF MORE T HAN 1500 SQ. FTS. THUS, THE ASSESSEE HAS BUILT ONE PROJECT AND T HERE ARE NO 2 SEPARATE PROJECTS AS CLAIMED BY THE ASSESSEE. THERE FORE, THE ASSESSEE'S CLAIM THAT ITS SINGLE PROJECT BE TREATED AS 2 DIFFERENT PROJECTS IS NOT ACCEPTABLE. I) AS THE ASSESSEE'S PROJECT IS TREATED AS A S INGLE PROJECT, THE BUILT UP AREA OF ALL THE FLATS IN TOWER C AND D IS MORE THAN 1500 SQ.FT. AND THEREFORE, IT VIOLATES THE CONDITION PRE SCRIBED IN SEC. 80IB(10)(C) OF THE ACT AND ACCORDINGLY, THE ASSESSE E IS NOT ENTITLED TO GET DEDUCTION U/S.80-16(10) OF THE ACT. (III) THE CLAIM OF THE ASSESSEE IS ALSO NOT ALL OWABLE ON ANOTHER COUNT. THE ASSESSEE HAS FAILED TO FULFILL THE REQUI REMENT OF SECTION 153A[(1)](A) AS PER WHICH THE ASSESSEE WAS SUPPOSED TO FILE HIS RETURN OF INCOME WITHIN 1 MONTH OF THE NOTICE U/S 1 53A, IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 11 HOWEVER, THE ASSESSEE HAS FILED RETURN AFTER THE DU E DATE AS PER THE NOTICE U/S 153A THEREBY VIOLATING THE TIME LIMI T SECTION 153A. (IV) MOREOVER, THE AUDIT REPORT AS REQUIRED U/S . 80(LB) OF THE ACT HAS ALSO NOT BEEN SUBMITTED BY THE ASSESSEE ALO NG WITH ITS RETURN OF INCOME BUT HAS BEEN SUBMITTED AT THE TIME OF ASSESSMENT. HENCE THE ASSESSEE'S CLAIM OF DEDUCTION U/S. 80IB IS NOT ENTERTAINED BEING NOT ADMISSIBLE AS PER LAW. 6. ON APPEAL, THE LD.CIT(A) HAS APPRECIATED THE FAC TS AND ALLOWED THE CLAIM OF THE ASSESSEE. 7. BEFORE US, THE LD.DR RELIED UPON THE ORDER OF TH E AO AND CONTENDED THAT WHOLE PROJECT IS TO BE CONSIDERED ON E PROJECT, WHICH CANNOT BE SEGREGATED IN TWO PARTS I.E. ONE ELIGIBLE FOR GRANT OF DEDUCTION UNDER SECTION 80IB AND OTHER NOT ELIGIBLE. SINCE T HE ASSESSEE VIOLATED CONDITIONS ENUMERATED IN SECTION 80IB IN RESPECT OF TWO TOWERS I.E. C AND D, THEREFORE, IT IS NOT ENTITLED FOR DEDUCTIO N UNDER SECTION 80IB. HE FURTHER CONTENDED THAT THE ASSESSEE ORIGINALLY D ID NOT CLAIM THIS DEDUCTION IN THE RETURN FIELD UNDER SECTION 139(1). THE ASSESSEE IS PRECLUDED TO CLAIM SUCH DEDUCTION IN THE RETURN FIL ED UNDER SECTION 153A OF THE ACT. SIMILARLY, THE ASSESSEE HAS NOT FILED RETURN WITHIN TIME LIMIT GIVEN TO IT IN THE NOTICE UNDER SECTION 153A OF THE ACT. 8. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESS EE RELIED UPON THE ORDERS OF THE LD.CIT(A). HE FURTHER RELIED UPON TH E FOLLOWING JUDGMENTS AND PLACED COPIES OF THESE JUDGMENTS/ORDERS IN THE PAPER BOOK I) CIT V/S B M AND BROTHERS - (GUJARAT HIGH COURT) (T AX APPEAL NO. 796 OF 2013) II) M/S. AAKAR ASSOCIATES V/S ITO [ITA NO. 2903/AHD/200 8] IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 12 III) CIT V/S ARUN EXCELIO FOUNDATIONS - (MAD) - (2013) 2 59 CTR 0362 IV) VISWAS PROMOTERS PRIVATE LIMITED V/S ACIT - (MAD) - (2013) 255 CTR 0149 V) CIT V/S VANDANA PROPERTIES - (2012) 80 CCH 074 MUMH C VI) SAROJ SALES ORGANISATION VS INCOME TAX OFFICER ITAT MUMBAI 'E' BENCH (2008) 111 TTJ 485 VII) CIT V/S ELEGANT ESTATES (2016) 0383 ITR 0049 (MAD) 9. ON THE STRENGTH OF THESE JUDGMENTS HE CONTENDED THAT ALLOWANCE OF PROPORTIONATE DEDUCTION UNDER SECTION 80IB(10) O F THE ACT ON PROFIT ON SALE OF ELIGIBLE UNITS HAS BEEN RECOGNIZED IN TH ESE JUDGMENTS, AND THE LD.CIT(A) HAS APPRECIATED THE FACTS IN RIGHT PE RSPECTIVE. 10. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. A BARE READING OF SECTION 80IB(1 0) WOULD INDICATE THAT THIS SECTION PROVIDES FOR DEDUCTION OF ENTIRE AMOUN T OF PROFIT OF AN UNDERTAKING DERIVED FROM BUSINESS OF DEVELOPING AND BUILDING HOUSING PROJECTS WHICH WERE APPROVED BY THE LOCAL AUTHORITI ES BEFORE SPECIFIED DATE. THIS SECTION WAS BROUGHT IN THE ACT WITH AN OBJECTIVE OF GIVING ENCOURAGEMENT TO PROVIDE HOUSING UNITS IN THE URBAN AND SEMI-URBAN AREAS, WHERE THERE IS ACUTE SHORTAGE OF HOUSING, PA RTICULARLY, FOR MIDDLE INCOME GROUP CITIZENS. THUS, DEDUCTION WAS GIVEN S UBJECT TO CERTAIN CONDITIONS. IN THE NOTE ASSESSEE HAS TABULATED THE NECESSARY CONDITIONS PROVIDED IN THE ACT AND HOW ASSESSEE HAS FULFILLED THOSE CONDITIONS. WE HAVE GONE THROUGH THESE CONDITIONS AND EXPLANATION OF THE ASSESSEE, SHOWING HOW CONDITIONS ARE BEING FULFILLED. LET US DEAL WITH THE FACTS CONSIDERED BY THE LD.REVENUE AUTHORITIES. THE ASSES SEE HAS CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE INCOME TAX ACT AMOUNTING TO RS.1,38,55,205/-, RS.63,29,535/-, RS.2,63,91,674/- AND RS.55,53,870/- IN ASSTT.YEARS 2008-09 TO 2011-12 RE SPECTIVELY. EXCEPT VARIATIONS OF THESE AMOUNTS AND VARIATION IN THE RE TURNED INCOME, ALL IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 13 FACTS ARE SIMILAR IN ALL THESE YEARS. THE LD.AO DI D NOT DISPUTE WITH REGARD TO FULFILLMENT OF OTHER CONDITIONS CONTEMPLA TED UNDER SECTION 80IB OF THE INCOME TAX ACT, 1961. HIS OBJECTIONS A RE VERY LIMITED. A PERUSAL OF THE ASSESSEES NOTE WOULD INDICATE THAT IT HAS DEVELOPED AND BUILT A HOUSING PROJECT IN THE NAME OF RATNA JYOTI APARTMENTS. TOTAL AREA OF LAND USED FOR DEVELOPMENT OF THIS HOUSING P ROJECT WAS 22529 SQ.METERS I.E. 5.567 ACRES. IT CONSISTS OF TWO DIF FERENT PLOTS VIZ. FP NO.107, 108 & 109 OF TPS NO.2 ADMEASURING 15034 SQ. METERS I.E. 3.715 ACRE, AND (II) F.P.NO.05 T.P. SCHEME NO.7, AD MEASURING 7495 SQ.METERS I.E. 1.852 ACRE. THE ASSESSEE HAS CONSTR UCTED EIGHT HIGH RISE TOWERS ON THIS AREA. ON THE FIRST PLOT IT HAS CONS TRUCTED TOWER BEARING NO.A, B, E, F, G & H, WHEREAS ON THE PLOT BEARING F .P.NO.5 IT HAS CONSTRUCTED TOWERS C AND D. THE FLATS CONSTRUCTED IN TOWER C & D WERE HAVING MORE THAN 1500 SQ.FEET AREA. THEREFORE, THE SE TOWERS DO NOT QUALIFY THE CONDITIONS FOR GRANT OF DEDUCTION UNDER SECTION 80IB OF THE ACT. AS FAR AS OTHER TOWERS ARE CONCERNED, THE ASSESSEE HAS FULFILLED ALL CONDITIONS. THE AO HAS REJECTED THE CLAIM OF THE A SSESSEE ON THE GROUND THAT BOTH THE PLOTS ARE TO BE TAKEN AS A SIN GLE PROJECT, AND IF THE ASSESSEE HAS VIOLATED CONDITIONS OF 80IB(10) QUA SOME OF THE PART OF PROJECT THEN IT IS NOT ENTITLED FOR DEDUCTION FOR I TS REMAINING PART ALSO. APART FROM THIS, ONE OTHER REASON ARE THAT (A) THE ASSESSEE DID NOT FILE RETURN WITHIN THE TIME LIMIT UNDER SECTION 153A IN RESPONSE TO THE NOTICE, (B) THE ASSESSEE DID NOT CLAIM DEDUCTION UN DER SECTION 80IB(10) OF THE ACT IN RETURN FILED U/S.139(1) OF THE ACT. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES AND OBJECTION OF THE AO , WE FIND THAT THE ASSESSEE HAS FILED ITS REGULAR RETURN WITHIN TIME L IMIT AVAILABLE UNDER SECTION 139(1). IT HAS REVISED ITS RETURN WITHIN T IME LIMIT AND DECLARED HIGHER AMOUNT. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, IT HAS CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AND IT HAS SUBMITTED REPORT IN FORM NO.10CCB. HONBLE GUJARAT HIGH COURT IN THE IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 14 CASE OF CIT VS. GUJARAT OIL AND ALLIED INDUSTRIES, 201 ITR 325 (GUJ) HAS CONSIDERED AN ISSUE IN RELATION OF FILING OF AUDIT REPORT ALONG WITH RETURN. HONBLE COURT HAS OBSERVED THAT THIS IS DIRECTORY R EQUIREMENT, AND IF AN ASSESSEE HAS FILED SUCH REPORT DURING THE ASSESSMEN T PROCEEDINGS, I.E. BEFORE COMPLETION OF THE ASSESSMENT ORDER, THEN IT COULD BE CONSIDERED THAT THE ASSESSEE HAS COMPLIED WITH THE REQUIREMENT . THE LD.CIT(A) HAS RELIED UPON THIS DECISIONS, AMONG OTHERS, AND C ONCLUDED THAT THE ASSESSEE HAS COMPLIED WITH THIS CONDITION BY SUBMIT TING REPORT IN FORM NO.10CCB BEFORE COMPLETION OF THE ASSESSMENT ORDER. AS FAR AS NON- FILING OF THE RETURN WITHIN TIME LIMIT PROVIDED IN ITS NOTICE UNDER SECTION 153A IS CONCERNED, THE ASSESSEE HAS ALREADY FILED R EGULAR RETURN WHICH WAS REVISED WITHIN TIME GRANTED, AND CLAIM WAS MADE IN CONNECTION WITH THAT RETURN, AND THEREFORE THIS IS NOT A VALID REASON ASSIGNED BY THE AO AND THIS ASPECT HAS RIGHTLY BEEN CONSIDERED BY T HE LD.CIT(A). THUS, OUT OF FOUR REASONS ASSIGNED BY THE AO THREE ARE PE RIPHERAL PROCEDURAL REASONS WHEREIN THE ASSESSEE HAS NOT COMMITTED ANY DEFAULT WHICH WOULD STATUTORILY PROHIBIT THE ASSESSEE FOR CLAIMIN G SUCH DEDUCTION. THE LAST REASONS REMAINED TO BE DEALT WITH IS WHETHER, IF AN ASSESSEE HAS VIOLATED CONDITIONS REQUIRE TO BE FULFILLED UNDER S ECTION 80IB QUA TWO TOWERS THEN IT WOULD ATTRACT A DISQUALIFICATION FOR THE REMAINING TOWER ALSO. WE FIND THAT AS FAR CONSTRUCTION RAISED BY T HE ASSESSEE ON TPS NO.2, WHERE IT HAS RAISED SIX TOWERS IS CONCERNED, IT HAS NOT COMMITTED ANY IRREGULARITY OR DEFAULT. IN THE JUDGMENT REPLI ED BY THE LD.COUNSEL FOR THE ASSESSEE IT HAS BEEN RECOGNIZED THAT IF THE ASSESSEE HAS COMPLETED THE CONSTRUCTION AND FULFILLED ALL THE RE QUIREMENTS FOR SOME OF THE UNITS OR TOWERS IN A HOUSING PROJECT PROPORTION ATE DEDUCTION WOULD BE GRANTED TO THE ASSESSEE. NO CONTRARY DECISION W AS BROUGHT TO OUR NOTICE. APART FROM THE ABOVE, A PERUSAL OF SITE PL AN, PHOTOS OF COMPLETED TOWERS, THEIR ENTRANCE WOULD SHOW THAT BO TH PLOT WERE HAVING MORE THAN 1 ACRE AREA WHICH IS THE MINIMUM R EQUIREMENT FOR DEVELOPMENT OF HOUSING PROJECT FOR CLAIMING DEDUCTI ON UNDER SECTION 80IB(10). THEY CAN BE TREATED AS TWO INDEPENDENT P ROJECT BECAUSE IT(SS)A NO.295 TO 298 AND 2087 /AHD/2014 15 INDEPENDENTLY THEY FULFILL ALL REQUIREMENT OF SECTI ON 80IB(10), THEREFORE, WE ARE OF THE VIEW THAT THE LD.CIT(A) HAS APPRECIAT ED THE FACTS IN RIGHT PERSPECTIVE, AND WE DO NOT FIND ANY ERROR IN THE OR DER OF THE LD.CIT(A). THUS, THE APPEALS OF THE REVENUE ARE DISMISSED. 11. IN THE RESULT, THE APPEALS OF THE REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN THE COURT ON 3 RD APRIL, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 03 /04/2017