Deputy Commissioner of Income-tax, V. M/s. Amit Enterprises, Pune

ITA 2210/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1059 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARSHAVARDHINI BUTY
• Assessee Lawyers: NIKHIL PATHAK SHRI SUHAS BORA
• Keywords: Additional evidence
• Section: 80IB

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.2210/PN/2013 '% % / ASSESSMENT YEAR : 2008-09 DCIT, CIRCLE-3, PUNE . / APPELLANT V/S M/S. AMIT ENTERPRISES, 1902, AMIT HOUSE, BAJIRAO ROAD, SADASHIV PETH, PUNE 411030 PAN NO.AACFA0857D . / RESPONDENT / ASSESSEE BY : SHRI NIKHIL PATHAK/ SHRI SUHAS BORA / DEPARTMENT BY : SMT. HARSHAVARDHINI BUTY / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 27-08-2013 OF THE CIT(A)-II, PUNE RELATING TO THE ASSESSMENT YEAR 2008-09. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROMOTERS AND BUILDERS, SALE OF FLATS/COMMERCIAL UNITS, APARTMENTS, HOUSES ETC. IT FILE D ITS / DATE OF HEARING :21.09.2015 / DATE OF PRONOUNCEMENT:23.09.2015 2 ITA NO.2210/PN/2013 RETURN OF INCOME ON 16-09-2008 DECLARING TOTAL INCOME OF RS.4,12,06,910/- AFTER CLAIMING DEDUCTION OF RS.9,51,90,486/- AS DEDUCTION U/S.80IB(10) IN RESPECT OF ITS HOUSING PROJECT N AMELY TREASURE PARK. DURING THE COURSE OF ASSESSMENT PR OCEEDINGS THE AO NOTED THE FACTS OF THE HOUSING PROJECT TREASURE PA RK AT PARA 5.1.1 OF THE ORDER WHICH READS AS UNDER : 1. THERE ARE 10 BUILDINGS A,B,C,D,E,F,G,H,J & K WHI CH HAS TOTAL BUILT-UP AREA OF 4,47,620 SQ. FT. THE BUILDINGS A TO H ARE RESIDENTIAL BUILDINGS AND J&K ARE COMMERCIAL BUILDINGS/ SHOPS. 2. IN THE RESIDENTIAL BUILDINGS FROM A TO H, PART OF BUILDING D AND FULL OF BUILDING F ARE NON-80-IB RESIDENTIAL FLAT WH ERE THE BUILD-UP AREA OF THE FLATS ARE MORE THAN 1500 SQ. FT. A CERTIFICAT E IN THIS REGARD OF AN ARCHITECT SHRI JAGDISH P DESHPANDE HAS BEEN FILED BY T HE ASSESSEE WHICH IS ANNEXED AS ANNEXURE-I OF THIS ORDER. 3. THE TOTAL RESIDENTIAL BUILT-UP AREA IS 4,35,295 SQ . FT. OUT OF WHICH THE TOTAL BUILT-UP AREA IN RESPECT OF BUILDING F AND PART OF BUILDING D WHICH IS NON-80IB(10) IS 51,302 SQ. FT. 4. THE OTHER BUILDINGS A, B, C, E, G & H AND PART OF BUILDING D HAVE PUT TOGETHER A BUILT-UP AREA OF 383993 SQ. FT. WHERE THE BUILT-UP-AREA OF EACH FLAT IS LESS THAN 1500 SQ. FT. 5. THE BUILDINGS J & K NAMED AS SANT NAGAR SHOPS ARE E XCLUSIVE COMMERCIAL BUILDINGS WHICH HAS TOTAL BUILT-UP AREA OF 12,325 SQ. FT. 6. THE TOTAL RESIDENTIAL BUILT-UP AREA OF THE PROJEC T 'TREASURE PARK' IS 97.25% AND THE BUILT-UP AREA OF COMMERCIAL/SHOP AR EA IS 2.75%. HOWEVER, THE COMMERCIAL BUILT-UP AREA TOTALS TO 1232 5 SQFT. THE AFORESAID DETAILS IN THE SHAPE OF STATEMENT OF SUMMARY SH EET OF TOTAL PROJECT HAS BEEN GIVEN BY THE ASSESSEE ALONG WITH ITS SUBM ISSION DATED 18/11/2010 WHICH IS ANNEXED AS ANNEXURE-II OF THIS ORDER FORMING PART OF THIS ORDER. 7. FURTHER, ASSESSEE HAS SUBMITTED STATEMENT OF YEAR-WISE RESIDENTIAL AND COMMERCIAL SPACE SOLD AS STATEMENT OF YE AR-WISE SALE OF UNITS OF ENTIRE PROJECT VIDE ITS SUBMISSION DATED 18/11/ 2010 WHICH IS ANNEXED AS ANNEXURE-III OF THIS ORDER FORMING PART OF THIS ORDER. 8. THE PROJECT TREASURE PARK IS SITUATED ON S. NO. 61 AND CONSISTS OF TOTAL 352 RESIDENTIAL UNITS, 23 SHOPS AND 3 SHOWROOMS. T HE RELEVANT DETAILS HAVE BEEN GIVEN BY THE ASSESSEE ALONG WITH ITS SUB MISSION DATED 03.11.2010, WHICH IS ANNEXED AS ANNEXURE - IV OF THIS ORDER FORMING PART OF THIS ORDER. 3 ITA NO.2210/PN/2013 3. FROM THE ABOVE, THE AO NOTED THAT IN THE PROJECT IT SELF THERE IS A BUILDING NAMELY F AND PART OF BUILDING D WITH BUILT UP AREA OF 51,302 SQ.FT. WHERE THE AREA OF EACH FLAT IS MORE THAN 150 0 SQ.FT. FURTHER IN THE PROJECT ITSELF, THERE ARE COMMERCIAL/SHOP SPACES WITH TOTAL BUILT UP AREA OF 12,325 SQ.FT. THEREFORE, THESE 2 FACTS OF THE PROJECT ARE NOT IN CONFORMITY WITH THE PROJECT ELIGIBLE FOR DEDUCTION U/S.80IB(10) OF THE ACT. HE OBSERVED THAT THE ASSESSEE IN ITS RETURN OF INCOME HAS CLAIMED DEDUCTION U/S.80IB(10) IN RESPECT OF THE RESIDENTIAL UNITS HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT . FURTHER IN FORM NO.10CCB UNDER THE DECLARATION HE OBSER VED THAT THE FOLLOWING POINTS HAVE BEEN MENTIONED : 1. THE HOUSING PROJECT/UNDERTAKING FOR WHICH DEDUCT ION U/S.80IB(10) HAS BEEN CLAIMED COMPRISES OF RESIDENTIAL U NITS HAVING BUILT-UP AREA OF LESS THAN 1500 SQ.FT. AND BUILT-UP AR EA OF MORE THAN 1500 SQ.FT. RELYING ON THE ITAT JUDGMENT IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VS. DCIT ITA NO.1595/KOL/200 5 FOR THE A.Y. 2002-03, THE ASSESSEE HAS CLAIMED PROPORTIONATE DEDUCTIO N OF PROFIT ATTRIBUTABLE TO RESIDENTIAL FLATS HAVING BUILT-UP ARE A OF LESS THAN 1500 SQ.FT. 2. COPY OF APPROVAL LETTER, I.E. COMMENCEMENT CERTI FICATE GIVEN BY PUNE MUNICIPAL CORPORATION SHOWS THE APPROVAL AS RESIDE NTIAL PLUS COMMERCIAL. COMMENCEMENT CERTIFICATE ALSO MENTIONS T HE COMPLETION OF SHOPS AND SHOWROOMS, I.E. THE COMMERCIAL PREMISES WHIC H EXCEEDS THE LIMITS LAID DOWN IN SECTION 80IB(10)(D). IT IS EX PLAINED TO US BY THE ASSESSEE THAT NO DEDUCTION U/S.80IB(10) IS CLAIMED OF THE PROFITS ATTRIBUTABLE TO COMMERCIAL PART OF THE PROJECT. 4. FROM THE ABOVE FACTS, THE AO NOTED THAT THE ASSESS EE HAS CLAIMED DEDUCTION U/S.80IB(10) IN RESPECT OF THE PROJECT W HICH IS RESIDENTIAL AND COMMERCIAL PROJECT AND WHERE THE RESIDENT IAL UNITS IN ONE FULL BUILDING AND ALSO IN PART OF ONE BUILDING HAVE BUILT U P AREA OF MORE THAN 1500 SQ.FT. FURTHER, THERE ARE 2 EXCLU SIVE COMMERCIAL/SHOP BUILDING WITH TOTAL BUILT UP AREA OF 12,325 SQ .FT. SINCE THE PROJECT TREASURE PARK IS ONE SINGLE PROJECT WHICH 4 ITA NO.2210/PN/2013 COMPRISES OF BUILDINGS HAVING RESIDENTIAL UNITS HAVING BUILT UP AREA IN EXCESS OF 1500 SQ.FT AND ALSO HAS COMMERCIAL SHOPS AND SHOWROOMS NAMED AS SANT NAGAR SHOPS HAVING BUILT UP AREA OF 12,325 SQ.FT., THEREFORE, THERE IS NON-CONFORMITY IN RESPECT OF THE PROVISIONS OF SECTION 80IB(10)(C) AND 80IB(10)(D) OF THE ACT. HE , THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE DEDUCTION CLAIMED U/S.80IB(10) SHOULD NOT BE DISALLOWED. 5. IT WAS SUBMITTED BY THE ASSESSEE THAT IT HAS CLAIMED DEDUCTION IN RESPECT OF BUILDINGS A, B,C, D (PART) AND E WHIC H COMPLIED WITH THE CONDITIONS LAID DOWN IN SECTION 80IB(10) OF THE ACT. IT WAS SUBMITTED THAT EVEN IF ALL THE BUILDINGS ARE CONSIDERED AS PART OF THE ENTIRE HOUSING PROJECT, THEN ALSO, ALL THE COND ITIONS OF THE SECTION ARE COMPLIED WITH EXCEPT FOR THE CONDITIONS RELATING TO MAXIMUM BUILT UP AREA OF RESIDENTIAL FLATS AS PER CLAUSE (C) O F SECTION 80IB(10) AND MAXIMUM BUILT UP AREA OF SHOPS AND OT HER COMMERCIAL ESTABLISHMENT IN THE PROJECT. IT WAS SUBMITTED THAT EVEN THOUGH THESE CONDITIONS ARE NOT SATISFIED THE ENTIRE DEDUCTION U/S.80IB(10) CANNOT BE DENIED. FOR THE ABOVE PROPOSITION, THE ASSESSEE RELIED ON VARIOUS DECISIONS INCLUDING THE DECISION O F THE CALCUTTA BENCH OF THE TRIBUNAL IN THE CASE OF BENGAL AMBUJ A HOUSING DEVELOPMENT LTD. VS. DCIT VIDE ITA NO.1595/KOL/200 5 ORDER DATED 24-03-2006 AND THE DECISION OF THE SPECIAL B ENCH OF THE TRIBUNAL IN THE CASE OF BRAMHA ASSOCIATES VS. JCIT (119 ITD 255) (PUNE). 6. HOWEVER, THE AO WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE. HE NOTED THAT THE ENTIRE P ROJECT TREASURE PARK IS ONE SINGLE PROJECT AND THAT IT IS RES IDENTIAL AND 5 ITA NO.2210/PN/2013 COMMERCIAL PROJECT WHICH HAS BEEN MENTIONED IN FORM 10CC B. THE APPROVAL LETTER, I.E. THE COMMENCEMENT CERTIFICATE GIVEN BY T HE PMC SHOWS THE APPROVAL AS RESIDENTIAL + COMMERCIAL. THE COMMENCEMENT CERTIFICATE ALSO MENTIONS THE COMPLETION OF S HOPS AND ESTABLISHMENTS, I.E. COMMERCIAL PREMISES. THEREFORE, THE TREASURE PARK CANNOT BE CALLED AS A HOUSING PROJECT AT THE FIRST PLACE BECAUSE THE PROJECT IS RESIDENTIAL + COMMERCIAL. F URTHER, THE ASSESSEE ALSO DOES NOT SATISFY CLAUSE (C) AND CLAUSE (D) OF SECTION 80IB(10) OF THE ACT. THEREFORE, THE DEDUCTION U/S.80IB(10) OF THE ACT IS NOT AVAILABLE TO THE ASSESSEE. HE ALSO REJECTED THE A LTERNATE CLAIM OF PROPORTIONATE DEDUCTION BY THE ASSESSEE ON THE GROU ND THAT DEDUCTION U/S.80IB(10) IS ALLOWABLE ON THE HOUSING PROJECT AS A WHOLE AND NOT FOR A PORTION THEREOF. 7. THE AO FURTHER NOTED THAT THE VARIOUS DECISIONS RELIED ON BY THE ASSESSEE ARE FOR THE PERIOD PRIOR TO THE AMENDMENT TO SECTION 80IB(10). IN THE POST AMENDMENT SCENARIO, THERE IS A SPE CIFIC CONDITION ADDED THAT THE BUILT UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT D OES NOT EXCEED 5% OF THE AGGREGATE BUILT UP AREA OF THE HOUSING PROJECT OR 2000 SQ.FT. WHICHEVER IS HIGHER. THIS STIPULATION HAS BEEN BR OUGHT INTO ACT IN CLAUSE (D) OF SECTION (10) OF SECTION 80IB W.E.F. 0 1-04- 2005. 8. HE NOTED THAT IN THE INSTANT CASE THE BUILT UP ARE A OF SHOPS OR COMMERCIAL SPACE IS 2.75% BUT ITS TOTAL BUILT UP AREA IS 12,32 5 SQ.FT. WHICH IS HIGHER THAN THE LIMIT OF 2000 SQ.FT.. THEREFORE, THE P ROJECT CLEARLY VIOLATES THE CONDITION BROUGHT OUT IN SECTION 80IB (10). REJECTING THE VARIOUS SUBMISSIONS GIVEN BY THE ASSESSEE AND 6 ITA NO.2210/PN/2013 DISTINGUISHING THE VARIOUS DECISIONS CITED BEFORE HIM, THE AO HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S.80IB(10) AMOUNTING TO RS.9,51,90,486/-. HE ACCORDINGLY DISALLOWED THE SAME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 9. BEFORE CIT(A) IT WAS SUBMITTED THAT THE FIRM CONSTRUCTE D A PROJECT TREASURE PARK WHERE THERE ARE TOTAL 10 BUILD INGS A TO H AND J AND K. THE BUILDINGS A TO H WERE RESIDENTIAL BUILDINGS AND J AND K WERE COMMERCIAL BUILDINGS AND THE CLAIM OF DEDUCTION U/S.80IB(10) WAS IN RESPECT OF THE PROFITS OUT OF THE SAID P ROJECT. THE ASSESSEE SUBMITTED THAT DURING ASSESSMENT PROCEE DINGS IT WAS SUBMITTED THAT BUILDINGS J AND K, THE TWO COMMERCIAL BUILDINGS WERE NOT PART OF THE PROJECT AND THAT THE BUILT UP ARE A OF ALL THE UNITS OF BUILDING F EXCEEDED 1500 SQ.FT. AND FEW UNITS IN BUI LDING D WERE COMBINED BY THE CUSTOMERS AND HENCE IN ORDER TO AVOID LITIGATION THE ASSESSEE ACCEPTED SUCH UNITS/BUILDINGS FROM T HE PROJECT FOR CLAIMING THE DEDUCTION U/S.80IB(10). THUS, THE B UILDINGS J AND K WHICH INCLUDE COMMERCIAL AREA, BUILDING F WHERE THE AREA OF THE UNITS EXCEEDS 1500 SQ.FT AND THE 4 FLATS OF BUILDING D WERE NOT CONSIDERED AS PART OF THE ELIGIBLE HOUSING PROJECT FOR THE PURPOSE OF COMPUTING DEDUCTION U/S.80IB(10). HOWEVER, THE OTHER BU ILDINGS HAVE SATISFIED THE CONDITIONS LAID DOWN U/S.80IB(10) AND THER EFORE THE AO WAS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSES SEE FOR SUCH BUILDING. HOWEVER, THE ASSESSEE IS ENTITLED FOR CLAIMING OF DEDUCTION EVEN IN RESPECT OF THE 3 BUILDINGS J, K AND F AN D 4 FLATS OF BUILDING D. 10. AS REGARDS THE COMMERCIAL AREA IS CONCERNED, IT WAS STATED THAT THE AO HAS CONSIDERED COMMERCIAL AREA AT 12,325 S Q.FT. WHICH 7 ITA NO.2210/PN/2013 WAS MUCH HIGHER THAN THE LIMIT PRESCRIBED IN SECTION 80IB(1 0)(D) AND THEREFORE ACCORDING TO HIM CLAUSE (D) INTRODUCED W.E.F. 0 1-04- 2005 IS APPLICABLE TO THE CASE OF THE ASSESSEE AND SINCE THE COMMERCIAL AREA EXCEEDED 2000 SQ.FT. THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION. THE ASSESSEE TOOK AN ADDITIONAL GROUND B EFORE THE CIT(A) FOR THE PROPOSITION THAT IT IS ENTITLED TO CLAIM DEDUCT ION U/S.80IB(10) FOR THE ENTIRE HOUSING PROJECT INCLUDING 3 BUILDIN GS VIZ.,J, K AND F AND 4 FLATS OF BUILDING D. IT WAS ARGUED THAT THE COMMENCEMENT CERTIFICATE IN RESPECT OF THE HOUSING PROJE CT WAS RECEIVED ON 17-12-2004 AND THEREFORE THE LIMIT OF 5% OR 2 000 SQ.FT. WHICHEVER IS LESS CRITERIA INTRODUCED W.E.F. 01-04-2005 IS NO T APPLICABLE TO THE ASSESSEE. RELYING ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES REPO RTED IN 333 ITR 289 IT WAS SUBMITTED THAT THE HONBLE HIGH COUR T IN THE SAID DECISION HAS HELD THAT PRIOR TO THE AMENDMENT THERE WAS NO RESTRICTION IN THE AREA OF COMMERCIAL BUILDINGS AND HENCE TH IS RESTRICTION IS NOT APPLICABLE TO THE EARLIER YEARS. IT WAS SUBMITTED THAT IN THE PRESENT CASE THE COMMENCEMENT CERTIFICATE W AS RECEIVED ON 17-12-2004 WHICH IS PRIOR TO 01-04-2005 AND THEREFOR E THE LIMIT OF 2000 SQ.FT OF 5% WHICHEVER IS LESS IS NOT APPLICABLE TO T HE SAID HOUSING PROJECT. IT WAS CONTENDED THAT DESPITE THE AS SESSMENT YEAR INVOLVED IN APPEAL IS. 2008-09, STILL THE LIMIT IS NOT APPLICABLE BECAUSE THE PROJECT WAS SANCTIONED PRIOR TO THE AMEND MENT. RELYING ON VARIOUS DECISIONS IT WAS ARGUED THAT THERE IS NO ESTOPPELS AGAINST LAW AND IF THE INCOME IS NOT TAXABLE THE SAME CANN OT BE TAXED SIMPLY BECAUSE THE ASSESSEE OFFERED IT IN THE RETURN OF INCOME. 8 ITA NO.2210/PN/2013 11. THE ASSESSEE FURTHER ARGUED THAT IN RESPECT OF THE BUILDING F THE DEDUCTION HAD NOT BEEN CLAIMED ON THE GROUND THAT THE BUILT UP AREA OF ALL THE UNITS EXCEEDED 1500 SQ.FT. WHICH WAS BASED ON THE CERTIFICATE OF THE ARCHITECT SHRI JAGSISH P. DESHPANDE WHO H AD CALCULATED THE BUILT UP AREA AS PER THE DEFINITION GIVEN IN S ECTION 80IB(14)(A) WHEREBY THE PROJECTION/TERRACE AND BALCONIES ARE TO BE INCLUDED IN THE BUILT UP AREA. IT WAS EMPHASIZED THAT THE DEFINITION OF BUILT UP AREA WAS INTRODUCED W.E.F. 01-04-2005 AND FOR TH E EARLIER PERIOD THERE IS NO DEFINITION OF BUILT UP AREA AND HENCE FOR THE PROJECTS STARTED PRIOR TO 01-04-2005 THE DENTITION OF B UILT UP AREA AS PER PROVISIONS OF SECTION 80IB(14)(A) IS NOT APPLICABLE. 12. IT WAS ARGUED THAT FOR THE PROJECT STARTED PRIOR TO 01-04-2005, THE BUILT UP AREA HAS TO BE CALCULATED AS PER THE DEFINITIO N PROVIDED IN THE DEVELOPMENT CONTROL RULES OF PMC OR THE DC RULES W HEREBY THE AREA COVERED BY TERRACES AND BALCONIES ARE NOT T O BE INCLUDED IN BUILT UP AREA. THE ASSESSEE FILED A REVISED CERTIFICATE SHOW ING CALCULATION OF THE AREA OF THE RESIDENTIAL UNITS FROM THE ARC HITECT SHRI JAGDISH DESHPANDE AS PER THE DEFINITION GIVEN IN DC RULE S. IT WAS ACCORDINGLY CONTENDED THAT AS PER THE SAID DEFINITION THE BUILT UP AREA OF EACH UNIT IS LESS THAN 1500 SQ.FT. IT WAS ALSO STATED THAT THE AFORESAID REVISED CERTIFICATE IS AN ADDITIONAL EVIDENCE. T HE ASSESSEE ACCORDINGLY REQUESTED FOR ADMISSION OF THE SAME. 13. AS REGARDS THE BUILT UP AREA OF 4 FLATS OF THE BUILDING D HAVING EXCEEDED 1500 SQ.FT., IT WAS SUBMITTED THAT THERE ARE TO TAL 48 FLATS IN BUILDING D OUT OF WHICH DEDUCTION WAS CLAIMED RELATING TO 44 FLATS AND THE REMAINING 4 FLATS WERE COMBINED INTO 2 FLATS BY THE CUSTOMERS WHERE THE AREA EXCEEDED THE PRESCRIBED LIMIT OF 1500 9 ITA NO.2210/PN/2013 SQ.FT. TO AVOID LITIGATION THE ASSESSEE HAS NOT CLAIMED DEDU CTION U/S.80IB(10) IN RESPECT OF THE ABOVE 4 FLATS OF BUILDING D. 14. IT WAS ARGUED THAT THE AO DENIED DEDUCTION FOR ALL T HE FLATS IN THE PROJECT. IT WAS EXPLAINED THAT THE FLATS WHICH ARE C OMBINED WERE SANCTIONED AS SEPARATE FLATS BY THE PMC AND THE COMPLET ION CERTIFICATE ISSUED ALSO NOTED THE SAID UNITS TO BE INDEPEN DENT. HOWEVER, THE CUSTOMERS HAVE SUBSEQUENTLY AFTER PURCHASE COMB INED THE SAID 2 FLATS. THE ASSESSEE FILED THE DECLARATION OF MR S. NISHA BHALERAO AND MR. SARNAIK PRABHANJAN, THE CUSTOMERS OF FL AT NOS. 1101 AND 1201 AND MR. KESKAR LAXMIKANT AND MRS. KESKAR , OWNERS OF FLAT NO. 1104 AND 1204 STATING THAT THEY HAVE COMBINED THE FLATS. THE ASSESSEE ALSO SUBMITTED THAT IF THE UNITS ARE COMBINE D BY THE CUSTOMERS THE BUILT UP AREA HAS TO BE COMPUTED INDEPEN DENTLY AND THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF DEDUCTION U /S.80IB(10). FOR THE ABOVE PROPOSITION, THE ASSESSEE RELIED ON VARIOUS DECISIONS. THE ASSESSEE ON A WITHOUT PREJUDICE BASIS SUBMITTED THA T IF THE CONTENTIONS RAISED ABOVE ARE NOT ACCEPTED, STILL THE DEDU CTION U/S.80IB(10) BE ALLOWED FOR THE UNITS WHOSE BUILT UP AREA IS LESS THAN 1500 SQ.FT. FOR THE ABOVE PROPOSITION, THE ASSESSEE RELIED ON VARIOUS DECISIONS. 15. BASED ON THE VARIOUS SUBMISSIONS MADE BY THE ASSE SSEE INCLUDING THE ADDITIONAL EVIDENCES FILED BEFORE HIM UNDER RULE 46A AND THE ADDITIONAL GROUNDS OF APPEAL RAISED BEFORE HIM THE LD.CIT(A) FORWARDED THE SAME TO THE AO FOR HIS EXAMINATION AND RE PORT. HOWEVER, THE AO OPPOSED THE ADMISSION OF THE ADDITIONAL E VIDENCES UNDER RULE 46A. 10 ITA NO.2210/PN/2013 16. AS REGARDS THE MEANING OF BUILT UP AREA AS PER SECT ION 80IB(10) IS CONCERNED THE AO REPORTED THAT THE SAME IS CLARIFICATORY IN NATURE. HE FURTHER STATED THAT THE DECISION OF THE HO NBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIAT ES RELIED UPON BY THE ASSESSEE IS NOT ACCEPTABLE TO THE DEPARTM ENT SINCE AN APPEAL HAS BEEN FILED BEFORE THE HONBLE SUPREME COURT. 17. AFTER CONSIDERING THE REMAND REPORT OF THE AO AND T HE COUNTER COMMENTS OF THE ASSESSEE TO SUCH REMAND REPORT, THE L D.CIT(A) ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) MADE BY THE AS SESSEE ON THE ENTIRE HOUSING PROJECT. WHILE DOING SO, HE HELD THA T THE HOUSING PROJECT IN THE PRESENT CASE STARTED PRIOR TO 0 1-04-2005, I.E. VIDE COMMENCEMENT CERTIFICATE DATED 17-12-2004. THEREFO RE, THE CONTENTION RAISED BY THE ASSESSEE AS PER THE DEFINITION P ROVIDED IN THE DC RULES OF THE PMC THE AREAS COVERED BY TERRACES AND BALCONIES ARE NOT TO BE INCLUDED IN BUILT UP AREA WHICH IS S UPPORTED BY VARIOUS DECISIONS OF THE TRIBUNAL HAS TO BE ACCEPTED. HE OBSERVED THAT THE TRIBUNAL IN THE CASE OF ITO VS. PRIME P ROPERTIES AND BRAHMA BUILDERS HAS HELD THAT FOR THE PROJECTS STAR TED PRIOR TO 01-04-2005 THE AREAS COVERED BY TERRACES AND BALCONIE S ARE TO BE EXCLUDED WHILE COMPUTING THE BUILT UP AREA OF THE RESIDENTI AL UNITS. ONCE THE TERRACES AND BALCONIES ARE EXCLUDED THE BUILT U P AREA OF NONE OF THE UNITS OF BUILDING F EXCEED 1500 SQ.FT. THEREFORE , THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S.80IB(10) IN RESPE CT OF BUILDING F. 18. SO FAR AS THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF COMMERCIAL SHOPS/ESTABLISHMENTS OF BUILDINGS J AND K WHICH COMPRISE OF COMMERCIAL AREA OF 12,325 SQ.FT. IS CONCERNED HE HELD 11 ITA NO.2210/PN/2013 THAT THE CONTENTION OF THE ASSESSEE THAT THE LIMIT OF 5% OR 2000 SQ.FT. WHICHEVER IS LESS WAS INTRODUCED W.E.F. 01-04-2005 AND THEREFORE THE SAME IS NOT APPLICABLE TO THE FACTS OF THE CASE SINCE THE COMMENCEMENT CERTIFICATE WAS RECEIVED ON 17-12-2004 WHIC H IS PRIOR TO 01-04-2005 IS ACCEPTABLE IN VIEW OF THE DECISION O F THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIA TES REPORTED IN 333 ITR 289. IT HAS BEEN HELD IN THE SAID D ECISION THAT PRIOR TO THE AMENDMENT THERE WAS NO RESTRICTION IN THE AREA OF COMMERCIAL BUILDINGS AND THE SAID RESTRICTION IS NOT APPLICABLE TO THE EARLIER YEARS. EVEN THOUGH THE ASSESSMENT YEAR INV OLVED IN 2008-09, STILL THE LIMIT IS NOT APPLICABLE BECAUSE THE PROJE CT WAS SANCTIONED PRIOR TO THE SAID AMENDMENT. FOR THE ABOVE P ROPOSITION, HE RELIED ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNA L IN THE CASE OF OPEL SHELTERS PVT. LTD. VIDE ITA NO.219/PN/2009 AN D THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AKRUTI J.V VS. DCIT REPORTED IN 39 SOT 498 WH ERE IT HAS BEEN HELD THAT CLAUSE (D) OF SECTION 80IB(10) AMENDED W .E.F. 01- 04-2005 IS NOT APPLICABLE TO HOUSING PROJECTS COMMENCED PRIOR TO THE AMENDMENT. IT HAS ALSO BEEN HELD THAT THE ALLOWABILITY OF DEDUCTION U/S.80IB(10) HAS TO BE CONSIDERED AS PER THE LA W PREVALENT IN THE YEAR IN WHICH THE HOUSING PROJECT WAS COMMENCE D. 19. AS REGARDS THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESP ECT OF 4 FLATS IN BUILDING D IS CONCERNED, THE LD.CIT(A) HELD THAT BOT H THOSE UNITS HAVE BEEN COMBINED BY THE RESPECTIVE CUSTOMERS. FROM THE VARIOUS DETAILS FILED BEFORE HIM, HE NOTED THAT FLAT NOS. 1104 AND 1204 OF BUILDING D HAVE BEEN PURCHASED BY MR. KESKAR LAX MIKANT AND MRS. KESKAR ON 09-03-2006 AND AFTER TAKING POSSESS ION OF THE 2 12 ITA NO.2210/PN/2013 FLATS SEPARATELY ON 07-12-2007 THEY HAVE CATEGORICALLY STATED THAT AS PER THEIR REQUIREMENT NECESSARY INTERNAL CHANGES WERE M ADE FROM A LABOUR CONTRACTOR. SIMILARLY, FLAT NO.1101 AND 1202 WERE PURCHASED BY MRS NISHA BHALERAO AND MR. SARNAIK PRABHAN JAN AND IN THEIR DECLARATION IT HAS BEEN STATED THAT THE POSSESS ION OF THE 2 FLATS WERE TAKEN SEPARATELY ON 20-12-2007 AND AS PER THEIR REQUIREMENT NECESSARY INTERNAL CHANGES WERE MADE THROU GH A LABOUR CONTRACTOR. HE OBSERVED THAT THE 4 FLATS WHICH H AVE BEEN COMBINED BY THE CUSTOMERS OF THE ASSESSEE HAVE BEEN S ANCTIONED AS SEPARATE FLATS BY THE PMC AND THE COMPLETION/OCCUPANCY CERTIFICATE ISSUED SHOWS THE FLATS TO BE INDEPENDENT. THE ASSESSEE HAD ENTERED INTO 2 SEPARATE AGREEMENTS WITH THE CUSTOMERS AND THE ENTRY IS SEPARATE SO AS THE KITCHEN, ELECTRICITY METERS, CORPORAT ION TAX RECEIPTS ETC. THE MATERIALS BROUGHT ON RECORD CLEARLY IN DICATE THAT THE ASSESSEE HAD CONSTRUCTED SEPARATE FLATS AND IT WAS THE CUSTOMERS WHO HAD COMBINED THEM WHICH IS EVIDENT FROM TH E DECLARATION OF BOTH THE CUSTOMERS WHO HAD PURCHASED TH E 2 UNITS AND MADE NECESSARY INTERNAL CHANGES AS PER THEIR REQUIR EMENT FROM A LABOUR CONTRACTOR. RELYING ON VARIOUS DECISIONS HE HE LD THAT THE BENEFIT CANNOT BE DENIED SINCE THE RESIDENTIAL UNITS WERE SOLD TO 4 DIFFERENT INDIVIDUALS. THE INDIVIDUAL OWNERSHIP IS LEGALLY ENFORCEABLE, INDIVIDUALITY OF OWNERSHIP EXISTS BEFORE DIFFERENT AUTHORITIES/ORGANIZATIONS LIKE PMC FOR CORPORATION TAX, MSEB FOR ELECTRICITY METERS AND HOUSING SOCIETY FOR MEMBERSHIP ETC. RELYING ON VARIOUS DECISION HE HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S.80IB(10) FOR THE ENTIRE HOUSING PROJECT. 13 ITA NO.2210/PN/2013 20. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) E RRED IN ALLOWING THE DEDUCTION U/S.80IB(10) OF THE ACT TO TH E PROJECT 'TREASURE PARK' EVEN WHEN THE CLAIM OF DEDUCTION U/S.80IB(10) WAS NOT MADE FOR THE ENTIRE PROJECT IN THE RETURN OF INCOME FILED, I N THE COURSE OF ASSESSMENT PROCEEDINGS AND IN FORM NO.35 FILED BEFORE TH E CIT(APPEALS)? 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN NOT APPRECIATING THE FACT THAT THE PROJECT HAD BEEN APP ROVED AS A 'RESIDENTIAL + COMMERCIAL PROJECT' WHICH HAD ALSO BEE N CONFIRMED BY THE PMC AND NOT AS A 'HOUSING PROJECT' ? 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) E RRED IN HOLDING THAT THE AMENDED PROVISIONS U/S.80IB(10)(D) AN D 80IB(10)(C) WOULD NOT BE APPLICABLE TO PROJECTS COMMENCED PRIOR TO 01.04.2005? 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN COMING TO THE ABOVE CONCLUSION ON THE INCORRECT PREM ISE THAT ESTOPPEL CAN BE INVOKED AGAINST THE GOVERNMENT IN EXERCISE OF ITS LEGISLATIVE POWERS? 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN HOLDING THAT THOUGH THE AMENDED PROVISION OF SECTION 80IB(10)(D) AND 80IB(14)(A) CAME INTO OPERATION W.E.F 01.04.2005, T HOSE WERE NOT APPLICABLE IN THE CASE OF ASSESSEE RELATING TO A. Y.2005 -06 WITHOUT APPRECIATING AND APPLYING THE PRINCIPLE LAID DOWN B Y HON'BLE SUPREME COURT IN THE CASE OF CIT VS ISTHMIAN STEAMSHIP LINE, 20 ITR 52 AND KARIMTHARUVI TEA ESTATE LTD., 60 ITR 262 ? 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN NOT APPRECIATING THAT EVEN IF THE AMENDED LAW WAS PROSPEC TIVE, THE LIMITATION OF RESTRICTIONS U/S80IB(10)(D) AND 80IB(14) (A) ARE STILL APPLICABLE TO A.Y. 2005-06 RELYING UPON RELIANCE JU TE INDUSTRIES VS. CIT REPORTED IN 120 ITR 921 (SC)? 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 21. THE LD. DEPARTMENTAL REPRESENTATIVE HEAVILY RELIED ON THE ORDER OF THE AO. 22. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAN D WHILE SUPPORTING THE ORDER OF THE CIT(A) RELIED ON THE LATEST DE CISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SARKAR BUILD ERS REPORTED IN 375 ITR 392, THE DECISION OF HONBLE BOMBAY HIGH 14 ITA NO.2210/PN/2013 COURT IN THE CASE OF CIT VS. PRIME PROPERTIES VIDE ITA N O.237/2013 ORDER DATED 27-07-2015 AND THE DECISION OF HONBLE BOMB AY HIGH COURT IN THE CASE OF CIT VS. ANKIT ENTERPRISES VIDE ITA (L OD) 1795/2012 ORDER DATED 18-02-2013 SUBMITTED THAT IN TH E AFOREMENTIONED CASES ALL THE ISSUES RAISED BY THE REVENUE HAVE BEEN ANSWERED. THEREFORE, THIS BEING A COVERED MATTER IN FAVOU R OF THE ASSESSEE THE ORDER OF THE CIT(A) BE UPHELD AND THE GROU NDS RAISED BY THE REVENUE BE DISMISSED. 23. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED T HE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE IN THE INS TANT CASE HAS CONSTRUCTED A HOUSING PROJECT AT SURVEY NO.61, SAH AKAR NAGAR, PUNE WHICH COMPRISE OF 10 BUILDINGS A,B,C,D,E,F,G, H, J &K. THE BUILDINGS A TO H ARE RESIDENTIAL BUILDINGS AND THE BUILDINGS J &K ARE EXCLUSIVELY COMMERCIAL BUILDINGS/SHOPS. THE TOTAL RESIDENT IAL BUILT UP AREA OF THE PROJECT IS 97.25% AND THAT OF THE COMMER CIAL/SHOP IS 2.75% WHOSE AREA TOTALS TO 12,325 SQ.FT. WE FIND THE ASSE SSEE IN ITS RETURN OF INCOME HAD CLAIMED DEDUCTION ONLY IN RESPECT OF THE RESIDENTIAL UNITS HAVING BUILT UP AREA LESS THAN 1500 SQ.FT W HICH IS EVIDENT FROM THE FORM 10CCB FILED ALONG WITH THE RETURN OF INCOME WHEREIN IT HAS BEEN MENTIONED THAT THE HOUSING PROJECT COMPRISE S OF RESIDENTIAL UNITS HAVING BUILT UP AREA OF BOTH MORE OR LESS THAN 1500 SQ.FT. IN OTHER WORDS, THE ASSESSEE HAS CLAIMED PROPORT IONATE DEDUCTION U/S.80IB(10). 24. WE FIND THE COMMENCEMENT CERTIFICATE ISSUED BY PMC CLE ARLY SHOWS THAT APPROVAL IS RESIDENTIAL + COMMERCIAL AND THE 15 ITA NO.2210/PN/2013 OCCUPANCY/COMPLETION CERTIFICATE MENTIONS THE COMPLETION OF BOTH THE SHOPS AND SHOWROOMS. WE FIND THE AO DENIED THE CLAIM OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT (A) THE PROJEC T APPROVED BY PMC IS BOTH RESIDENTIAL AND COMMERCIAL (B) THE PROJECTED CONSISTED OF COMMERCIAL AREA OF 12,325 SQ.FT. (C) THE BUILT UP A REA OF ALL THE UNITS IN BUILDING F EXCEEDED 1500 SQ.FT. AND (D) THE B UILT UP AREA OF 4 FLATS AFTER BEING COMBINED EXCEEDED 1500 SQ.FT. IN RESPECT OF BUILDING D. 25. WE FIND BEFORE THE CIT(A) THE ASSESSEE TOOK ADDITIONAL GROUND THAT IT IS ENTITLED TO CLAIM DEDUCTION U/S.80IB(10) IN RESPECT OF BUILDING F AS WELL AS J AND K AND THE 4 FLATS OF BUILDING D. WE FIND AFTER CONSIDERING THE VARIOUS SUBMISSIONS MADE BY THE ASS ESSEE THE LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPEC T OF THE ENTIRE HOUSING PROJECT. WHILE DOING SO, HE HELD THAT S INCE THE PROJECT HAS BEEN APPROVED ON 17-12-2004 WHICH IS PRIOR TO 01-04-2005 , THEREFORE, THE AREAS COVERED BY TERRACES AND BALCONIES ARE TO BE EXCLUDED FROM THE BUILT UP AREA AND THEREFORE THE UNITS OF BUILDING F, WHERE NONE OF THE UNITS EXCEED 1500 SQ.FT. AFTER REDUCING THE TERRACES AND BALCONIES AND THEREFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10). SO FAR AS BUILDINGS J AND K ARE CON CERNED HE HELD THAT SINCE THE PROJECT IS APPROVED PRIOR TO 01- 04-2005, THEREFORE, THE LIMIT OF 5% OR 2000 SQ.FT. WHICHEVER IS LESS IS NOT APPLICABLE TO THE PROJECT OF THE ASSESSEE. FOR THE ABOV E PROPOSITION HE RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES REPORTED IN 333 ITR 289 WHER E IT HAS BEEN HELD THAT PRIOR TO THE AMENDMENT THERE WAS NO R ESTRICTION IN THE AREA OF COMMERCIAL BUILDINGS AND THE SAID RESTRICTION IS NOT 16 ITA NO.2210/PN/2013 APPLICABLE TO THE EARLIER YEARS. EVEN THOUGH THE ASSESSM ENT YEAR INVOLVED IN 2008-09 STILL THE LIMIT IS NOT APPLICABLE BECAUSE TH E PROJECT WAS SANCTIONED PRIOR TO THE SAID AMENDMENT. 26. AS REGARDS THE THIRD OBJECTION OF THE AO THAT BUILT U P AREA OF 4 FLATS AFTER BEING COMBINED EXCEEDED 1500 SQ.FT. IN RESPECT O F BUILDING D, HE HELD THAT THE ASSESSEE HAS SOLD SEPARATE UNITS TO THE RESPECTIVE CUSTOMERS WHERE THE BUILT UP AREA OF EACH OF THE FLAT IS LESS THAN 1500 SQ.FT. AND THE CUSTOMERS AFTER PURCHASING THE FLATS HAVE COMBINED THEM AND THEREFORE THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10). 27. IT IS THE GRIEVANCE OF THE REVENUE THAT WHEN THE CLA IM OF DEDUCTION U/S.80IB(10) WAS NOT MADE FOR THE ENTIRE PROJE CT IN THE RETURN OF INCOME FILED AND WHEN THE PROJECT HAS BEEN APP ROVED AS A RESIDENTIAL CUM COMMERCIAL PROJECT, THEREFORE, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10) AND THE CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE CLAIM. 28. WE DO NOT FIND ANY MERIT IN THE ABOVE ARGUMENT OF THE REVENUE. IT HAS BEEN HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS REPORT ED IN 349 ITR 336 THAT AN ASSESSEE IS ENTITLED TO RAISE NOT MEREL Y ADDITIONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE AUTHORITIES BUT IS ALS O ENTITLED TO RAISE ADDITIONAL CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION TO PERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO D EAL NOT MERELY WITH ADDITIONAL GROUNDS WHICH BECAME AVAILABLE ON AC COUNT OF CHANGE OF CIRCUMSTANCES OR LAW BUT WITH ADDITIONAL GROUN DS 17 ITA NO.2210/PN/2013 WHICH WERE AVAILABLE WHEN THE RETURN WAS FILED. THE WORDS COULD NOT HAVE BEEN RAISED MUST BE CONSTRUED LIBERALLY AND N OT STRICTLY. THERE MAY BE SEVERAL FACTORS JUSTIFYING THE REASON OF A NEW PLEA IN AN APPEAL AND EACH CASE MUST BE CONSIDERED ON ITS OWN FACTS. THEREFORE, THE FIRST GROUND OF THE REVENUE THAT WHEN THE CLAIM OF DEDUCTION U/S.80IB(10) WAS NOT MADE FOR THE ENTIRE PROJ ECT IN THE RETURN OF INCOME FILED OR IN THE COURSE OF ASSESSMENT PRO CEEDINGS OR IN FORM 10CCB FILED BEFORE THE AO, THE CIT(A) ERRED IN ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT TO THE PROJECT IS DEVOID OF ANY MERIT AND ACCORDINGLY THE SAME IS DISMISSED. 29. NOW COMING TO THE OTHER ISSUES ARE CONCERNED, WE FIND THE AO DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT THE PROJECT CONSISTED OF COMMERCIAL AREA OF 12,325 SQ.FT. AS ME NTIONED EARLIER, THE PROJECT HAS BEEN APPROVED BY THE PMC ON 1 7-12-2004, I.E. PRIOR TO 01-04-2005. THE HONBLE SUPREME COURT IN TH E CASE OF SARKAR BUILDERS (SUPRA) HAS HELD THAT WHERE HOUSING PROJE CTS WERE SANCTIONED BEFORE THE AMENDMENT BUT HAVE BEEN COMPLETE D AFTER 01-04-2005 WHEN THE AMENDED PROVISIONS CAME INTO OPER ATION THE ASSESSEE WOULD BE ENTITLED TO THE DEDUCTION U/S.80IB(10) AND THE CONDITIONS MENTIONED IN CLAUSE (D) WOULD NOT APPLY. THUS, T HE BENEFIT RESTRICTED TO CASES WHERE THE AREA UTILIZED FOR SH OPS AND COMMERCIAL ESTABLISHMENTS DOES NOT EXCEED 5% OF AGGREGAT E BUILT UP AREA OF HOUSING PROJECT OR 2000 SQ.FT WHICH WAS LESS DOES NOT TO APPLY TO PROJECTS WHERE APPROVAL OF LOCAL AUTHORITY WAS GRANTED PRIOR TO 01-04-2005 EVEN IF PROJECT IS COMPLETED THEREAFTER. 30. SINCE IN THE INSTANT CASE ADMITTEDLY, THE PROJECT HAS BEEN SANCTIONED PRIOR TO 01-04-2005 AND THE PROJECT HAS BE EN COMPLETED 18 ITA NO.2210/PN/2013 AFTER 01-04-2005, THEREFORE, THE RESTRICTION ON THE AREA OF COMMERCIAL BUILDING IS NOT APPLICABLE TO THE FACTS OF THE PRES ENT CASE. THEREFORE, THIS OBJECTION OF THE REVENUE BEING DE VOID OF MERIT IS DISMISSED. 31. SO FAR AS THE OBJECTION OF THE AO THAT THE BUILT UP AREA OF ALL THE FLATS IN BUILDING F EXCEEDED 1500 SQ.FT., WE FIND THE LD.CI T(A) HAS GIVEN A CATEGORICAL FINDING THAT AFTER EXCLUSION OF THE BALCONIES AND TERRACES NONE OF THE FLATS OF BUILDING F EXCEEDED 150 0 SQ.FT. COULD NOT BE CONTROVERTED BY THE LD. DEPARTMENTAL REP RESENTATIVE. IT IS AN ADMITTED FACT THAT THE COMMENCEMENT CERTIFICATE IS DATED 17- 12-2004 WHICH IS PRIOR TO 01-04-2005. THE HONBLE BOMBA Y HIGH COURT HAD AN OCCASION TO DECIDE THE ISSUE OF BUILT UP ARE A INTRODUCED BY WAY OF SECTION 80IB(14)(A) W.E.F. 01-04-2005 IN THE CASE OF PRIME PROPERTIES (SUPRA) AND HELD THAT THE SAME IS NOT APPLICABLE TO HOUSING PROJECTS APPROVED PRIOR TO 01-04-2 05. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT READ AS UNDER : 2. THIS APPEAL WAS ADMITTED ON 14 TH JANUARY, 2013 ON THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW : (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL DID NOT ERR IN HOLDING THAT THE C LARIFICATION OF THE BUILT UP AREA INTRODUCED BY WAY OF SECTION 80IB(14)(A) WIT H EFFECT FROM 01- 04-2005 CAN ONLY BE APPLIED TO PROJECTS WHICH HAVE B EEN SANCTIONED AFTER 01-04-2005? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE ORDER OF THE TRIBUNAL PASSED WITHOUT APPRECI ATING AND EVALUATING ALL THE RELEVANT FACTS AND EVIDENCES INCLU DING CIRCUMSTANTIAL EVIDENCES, NOT PERVERSE? 3. THE RESPONDENT ASSESSEE IS A BUILDER WHO CLAIMED DEDUC TION U/S.80IB(10) OF THE ACT IN RESPECT OF ITS HOUSING PROJE CT AT PUNE. THE ADMITTED POSITION IS THAT THE SUBJECT PROJECT WAS SANCT IONED/APPROVED PRIOR TO 1 ST APRIL, 2005. THE PARLIAMENT BY FINANCE (NO.2) ACT , 2004 INTRODUCED SUB-SECTION 14(A) TO SECTION 80IB(10) OF T HE ACT W.E.F. 1 ST APRIL 2005. THUS, THE ISSUE ARISING IN THIS APPEAL IS WH ERE HOUSING 19 ITA NO.2210/PN/2013 PROJECTS HAS RECEIVED SANCTION/APPROVAL PRIOR TO 1 ST APRIL, 2005 WOULD THE PROVISION OF SECTION 80IB(14)(A) OF THE ACT, HAVE ANY APPLICATION. 4. MR. SURESH KUMAR, LD. COUNSEL FOR THE REVENUE FAIR LY STATES THAT THE PRESENT CONTROVERSY STANDS CONCLUDED IN FAVOUR OF T HE RESPONDENT ASSESSEE BY THE DECISION OF THIS COURT IN INCOME TAX APPE AL NO.1628 OF 2013 (CIT VS. RAVIRAJ KOTHARI PUNJABI ASSOCIATES) RENDE RED ON 24 TH APRIL, 2015 IN RESPECT OF SECTION 80IB(14)(A) OF THE ACT. FURTHER, IT IS SUBMITTED THAT THE RATIO OF DECISION OF THE APEX COUR T IN CIT VS. M/S. SARKAR BUILDERS WOULD ALSO APPLY TO THE PRESENT CASE. 5. IN VIEW OF THE ABOVE, BOTH SUBSTANTIAL QUESTIONS OF LAWS ARE ANSWERED IN THE AFFIRMATIVE, I.E. IN FAVOUR OF THE R ESPONDENT ASSESSEE AND AGAINST THE REVENUE. 32. SINCE IN THE INSTANT CASE THE BUILT UP AREA OF ALL THE U NITS OF BUILDING F ARE LESS THAN 1500 SQ.FT. AFTER EXCLUDING THE BALCO NIES AND TERRACES, THEREFORE, THE CIT(A) WAS FULLY JUSTIFIED IN A LLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF BUILDING F. 33. SO FAR AS DENIAL OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE 2 UNITS OF BUILDING D ARE CONCERNED, WE FIND THE ASSESSEE HAS NOT CLAIMED DEDUCTION IN RESPECT OF THE ABOVE 2 UNITS IN THE R ETURN OF INCOME ON THE GROUND THAT THE COMBINED AREA OF THE ADJ OINING FLATS EXCEED 1500 SQ.FT. HOWEVER, BEFORE CIT(A) THE ASSESSEE TO OK AN ADDITIONAL GROUND AND CLAIMED THE DEDUCTION IN RESPECT OF T HE ABOVE 2 UNITS ON THE GROUND THAT ASSESSEE HAS SOLD INDEPENDE NT UNITS TO THE RESPECTIVE CUSTOMERS WHICH WERE LESS THAN 1500 SQ.FT . IT IS THE CUSTOMERS WHO HAVE COMBINED THE FLATS AND THEREFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10). WE FIND THE LD.CIT(A) ADMITTED THE ADDITIONAL EVIDENCE AND ON THE BASIS OF THE D ECLARATION OF THE CUSTOMERS HELD THAT IT IS THE CUSTOMERS WHO HAVE COMBINED THE UNITS AND THE ASSESSEE HAS SOLD SEPARATE UNITS TO THE CUSTOMERS WHERE THE BUILT UP AREA OF EACH UNIT IS LESS THAN 1500 SQ .FT. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ANKIT ENTER PRISES 20 ITA NO.2210/PN/2013 (SUPRA) HAS HELD THAT WHEN THE TWO ADJACENT FLATS WERE A PPROVED BY THE LOCAL AUTHORITY AS SEPARATE UNITS AND THE COMPLETION CERTIFICATE ISSUED ON THAT BASIS THE 2 FLATS CANNOT BE TREATED AS O NE UNIT TO COMPUTE THE BUILT UP AREA FOR THE PURPOSE OF SECTION 80I B(10). THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT AT PARA 3 OF THE ORDER READS AS UNDER : 3. SO FAR AS QUESTION (II) IS CONCERNED, IN THE IMPUG NED ORDER THE TRIBUNAL HAS RECORDED A FINDING OF FACT THAT TWO ADJ OINING FLATS WERE APPROVED BY THE LOCAL AUTHORITY AS SEPARATE UNITS AND COMPLETION CERTIFICATE ISSUED ON THAT BASIS. THEREFORE, ON THE A BOVE FINDING OF FACT, THE TRIBUNAL HELD THAT THE TWO FLATS CANNOT BE TREAT ED AS ONE UNIT TO COMPUTE THE BUILT UP AREA FOR THE PURPOSES OF SECTION 80IB(10) OF THE INCOME TAX ACT, 1961. THE DECISION OF THE TRIBUNAL BEING BASED ON FINDING OF FACT, WE SEE NO REASON TO ENTERTAIN QUESTIO N (II). 34. SINCE IN THE INSTANT CASE THE LD.CIT(A) HAS CATEGORICA LLY GIVEN A FINDING THAT THE ASSESSEE HAS SOLD THE RESIDENTIAL UNITS TO DIFFERENT INDIVIDUALS, THE INDIVIDUAL OWNERSHIP IS LEGALLY ENFORCEABLE, THE INDIVIDUALITY OF THE OWNERSHIP EXISTS BEFORE THE DIFFERENT AUTHORITIES/ORGANISATIONS LIKE PMC FOR CORPORATION TAX, MSEB FOR ELECTRICITY METERS AND HOUSING SOCIETY FOR MEMBERSHIP ETC. AND SINCE HE HAS ALSO GIVEN A FINDING THAT IT IS THE CUSTOMERS WHO H AVE COMBINED THE ADJACENT UNITS FOR THEIR OWN REQUIREMENTS, T HEREFORE, IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE CITED SUPRA AND IN ABSENCE OF ANY CONTRARY MATERIAL BROU GHT TO OUR NOTICE, THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF DEDU CTION U/S.80IB(10) IN RESPECT OF THE 2 UNITS OF BUILDING D. IN VIEW OF OUR ABOVE DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT TH E ORDER OF THE LD.CIT(A) IS IN CONSONANCE WITH LAW. WE ACCORDINGLY UPHO LD THE SAME AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 21 ITA NO.2210/PN/2013 35. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23-09-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 23 RD SEPTEMBER, 2015. LRH'K ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ( ) S / THE CIT(A)-II, PUNE 4. ( S / THE CIT- II , PUNE 5. 6. + ., ., IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , + + //TRUE COPY// //TRUE COPY// 2 . / SR. PRIVATE SECRETARY ., IQ.KS / ITAT, PUNE