THE DCIT, CIRCLE - 3(1), Visakhapatnam V. Bharat Tanmai Sesham Estates Pvt Ltds., Visakhapatnam

ITA 225/VIZ/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8825 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 12-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R S NARAYAN
• Assessee Lawyers: C SUBRAMANYAM
• Section: 143(3); 80IB; 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D .S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 225 /VIZAG/ 201 4 ( / ASSESSMENT YEAR: 20 04 - 05 ) THE DEPUTY COMMISSIONER OF INCOME - TAX CIRCLE - 3 (1), AAYAKAR BHAVAN DABAGARDENS VI SAKHAPATNAM 530020 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. HIG - 34, SECTOR - I, MVP COLONY VISAKHAPATNAM 520001 [PAN NO. AA BCB9504G ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI SRS NARAYAN , SR. DR / RESPONDENT BY : SHRI C SUBRAMANYAM , AR / DATE OF HEARING : 0 1.06.2017 / DATE OF PRONOUNCEMENT : 31 .07 .2017 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. C OMMISSIONER OF INCOME TAX (A PPEALS ) [CIT(A)], VI SAKHAPATNAM IN ITA NO. 382 / 11 - 12 /J CIT(OSD),C - 1/VSP/2013 - 14 DATED 0 3 .0 3 .201 4 FOR THE A.Y. 2 0 04 - 05 . 2 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. 2. ALL THE G ROUNDS OF APPEAL ARE RELATED TO WITHDRAWAL OF DEDUCTION CLAIMED U/S 80IB(10) OF THE INCOME TAX ACT. 3. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 1,14,330/ - FOR THE ASSESSMENT YEAR 2004 - 05 ON 01.11.2004. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED THE DEDUCTION OF RS.78,18,102/ - U/S 80IB(10) OF THE INCOME TAX ACT. THE ASSESSMENT WAS COMPLETED ACCEPTING THE INCOME RETURNED BY THE ASSESSEE U/S 143(3) . SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED U/S 147 BY ISSUE OF NOTICE U/S148 ON 21.12.2010 AND T HE REASSESSMENT WAS COMPLETED ON 16.12.2011 ON TOTAL INCOME OF RS.79,32,430/ - U/S 143(3) R.W.S 147 OF I.T. ACT . IN THE REASSESSMENT, THE A SSESSING O FFICER HAS WITHDRAWN THE DEDUCTION U/S 80IB ALLOWED IN THE ORIGI NAL ASSESSMENT FOR NON SATISFACTION OF CONDITIONS STIPULATED U/S 80IB. THE A SSESSING O FFICER WAS OF THE VIEW THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 80IB FOR THE FOLLOWING REASONS : (A) THE ASSESSEE IS NOT THE OWNER OF THE LAND, BUT IT IS ONLY AN AGENT OF THE LAND OWNER OR IN OTHER WORDS IT IS ONLY GPA HOLDER. 3 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. (B) THE ASSESSEE COMPANY CONSTRUCTED THE FLATS IN THE CAPACITY OF A CONTRACTOR . (C) DURING THE ASST. YEAR UNDER CONSIDERATION THE ASSESSEE COMPANY HAS COMPLETED ONLY 90% OF THE WORK. (D) THERE WAS NO COMPLETION CERTIFICATE FROM THE MUNICIPAL AUTHORITIES. (E) THE ASSESSEE GOT APPROVAL FOR THREE BLOCKS I.E. A, B &C THIS WAY THE CONSTRUCTION OF EACH BLOCK IS FALLING IN LESS THAN ONE ACRE. THE ASSESSEE WA S IN APPEAL BEFORE THE LD.CIT(APPEALS) AND THE LD. COMMISSIONER (A) ALLOWED THE ASSESSEE S APPEAL, HENCE, THE REVENUE IS IN APPEAL BEFORE US. THE LD.CIT(A) ALLOWED THE ISSUES (A) (B) (C) AND (D) MENTIONED ABOVE AND THE REVENUE HAS NOT CHALLENGED THE FINDINGS OF THE LD.CIT(A). THE ISSUES REMAINE D FOR ADJUDICATION IS (E) ONLY . 3.1 . DURING THE APPEAL HEARING THE LD.DR SUBMITTED THAT T HE ASSESSEE ACQUIRED THE PROPERTY COMPRISING 1.34 ACRES UNDER A REGISTERED AGREEMENT TO SELL WITH POWER OF ATTORNEY ON 27.06.2001. UNDER THE SAID AGREEMENT, THE VACAN T POSITION OF THE PROPERTY WAS DELIVERED TO THE ASSESSEE. SUBSEQUENTLY, THE ASSESSEE HAS APPLIED TO MUNICIPAL 4 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. AUTHORITIES FOR PLAN APPROVAL FOR CONSTRUCTI ON OF BLOCKS A, B & C I N THE SAID LAND. HOWEVER, THE PLAN WAS APPROVED BY VUDA FOR CONSTRUCTION IN A BLOCK VIDE PROCEEDINGS NO. 742/04 DATED 28.01.2002. SUBSEQUENTLY APPROVAL WAS GIVEN FOR CONSTRUCTION OF BLO C K B & C ON 08.04.2004. THEREFORE, ACCORDING TO THE AO, THE BLOCKS A, B & C SHOULD BE TAGGED TO THE ONE HOUSING PROJECT AND REQUIRED TO COMPLET E ALL THE BLOCKS BEFORE THE DUE DATE IN THE ENTIRE LAND FOR THE PURPOSE OF CLAIMING THE DEDUCTION U/S 80IB OF IT ACT. THE LD. CIT(APPEALS) CONSIDERED THE ISSUE AND HELD THAT THE APPROVAL IN RESPECT OF BLOCK B & C HAS SEPARATE APPROVALS, BUT IT WA S ONLY THE EXT ENSION OF THE EARLIER APPROVAL SOUGHT FOR THE HOUSING PROJECT. THERE WAS A DISPUTE WITH REGARD TO BLOCK A AND THE LD.CIT (APPEALS) SHOULD NOT HAVE CONSIDERED THAT THE CONSTRUCTION OF BLOCK A WAS COMPLETED WITHOUT RESOLVING THE DISPUTES. FURTHER, THE LD.D R ARGUED THAT THE ENTIRE PROJECT CONSISTS OF THREE BLOCKS, EACH BLOCK CANNOT BE CONSIDERED INDEPENDENTLY DISTINCT FROM OTHER BLOCKS. UNLESS THE THREE BLOCKS ARE COMPLETED, THE HOUSING PROJECT CANNOT BE HELD TO BE COMPLETED. THEREFORE, THE LD. CIT (APPEAL S) HAS COMMITTED AN ERROR IN ALLOWING THE DEDUCTION U/S 80IB FOR THE BLOCK A PROJECT. THEREFORE ACCORDING TO THE LD. DR, THE ASSESSING OFFICER RIGHTLY WITHDRAWN THE DEDUCTION CLAIMED U/S 80IB WHICH REQUIRED TO BE UPHELD. 5 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. 3 . 2. ON THE OTHER HAND, THE LD. A R ARGUED THAT THE ASSESSEE HAS INITIALLY PLANNED FOR CONSTRUCTION OF THREE BLOCKS ON THE SUBJECT LAND AND DUE TO DISPUTES THE ASSESSEE COULD COMPLETE ONLY ONE BLOCK AND THE REMAINING BLOCKS COULD NOT BE COMPLETED. THE PERMISSION FOR BLOCK A WAS GIVEN BY THE VUDA SEPARATELY ON 28.01.2002 AND FOR THE REMAI NING BLOCKS, PERMISSION WAS GIVEN ON 8.4.2004. THEREFORE, THE APPROVAL GIVEN BY VUDA FOR B LOCK A AND FOR B LOCKS B & C SHOULD BE CONSIDERED INDEPENDENTLY. THE ASSESSEE HAS CONSTRUCTED THE ENTIRE BLOCKS I N MORE THAN ONE ACRE OF THE LAND AND NO SEPARATE DEMARCATION IS MADE FOR EACH BLOCK. EACH FLAT CONSTRUCTED WAS LE SS THA N 1500 SQ . FT . AND THE CONSTRUCTION OF BLOCK WAS COMPLETED WITHIN THE TIME ALLOWED U/S 80IB HENCE , THE ASSESSEE CONTENDED THAT IT HAS SAT ISFIED ALL THE CONDITIONS FOR GRA N TING THE DEDUCTION U/S 80IB. THUS, THE LD.CIT(APPEALS) RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND THERE IS NO MISTAKE OR ERROR COMMITTED BY THE LD.CIT(APPEALS). HENCE, THE LD. A R CONTENDED THAT THE APPEAL OF THE REVEN UE REQUIRED TO BE DISMISSED . 3.3 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS THE 6 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. LD.CIT(APPEALS) ORDER. THE OBJECTION RAISED BY THE REVENUE WAS THAT ALL THE BLOCK S SHOULD NOT BE CONSIDERED INDEPENDENTLY SINCE THE BLOCK A,B & C CONSISTS OF THE HOUSING PROJECT INSEPARABLE AND DEDUCTION CANNOT BE GRANTED PROPORTIONATELY ON BLOCK A SINCE THE ENTIRE PROJECT WAS NOT COMPLETED BEFORE THE TIME STIPULATED U/S 80IB . THE APPROVAL G RANTED BY THE VUDA SUBSEQUENTLY FOR B LOCK S B & C IS REQUIRED TO BE TAGGED WITH B LOCK A. THUS, THE ASSESSEE HAS NOT COMPLETED THE PROJECT IN TIME AND HENCE THE DEDUCTION U/S 80IB IS NOT ALLOW ABLE . THE LD. CIT(APPEALS) DISCUSSED THE ISSUE IN DETAIL WHICH IS MADE AVAIL ABLE IN PAGE NO.7 AND PARA NO.6.3 ONWARDS. FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT THE RELEVANT PARAGRAPHS WHICH READS AS UNDER: 6.3 I HAVE CONSIDERED THE SUBMISSIONS. IT IS SEEN THAT THE ASSESSEE ACQUIRED THE SUBJECT PROPERTY COM PRISING ACRE 1.34 CENTS UNDER A REGISTERED AGREEMENT TO SELL WITH POWER OF ATTORNEY DTD.27.06.2001. UNDER THE SAID AGREEMENT THE VACANT POSSESSION OF THE PROPERTY WAS DELIVERED TO THE ASSESSEE. IT IS SEEN THAT SUBSEQUENTLY THE ASSESSEE HAS APPLIED TO MUNIC IPAL AUTHORITIES FOR PLAN APPROVAL FOR CONSTRUCTING BLOCKS A, B & C, IN THE SAID LAND. HOWEVER, THE PLAN WAS APPROVED BY VUDA FOR CONSTRUCTION IN A BLOCK VIDE PROCEEDINGS 742/04 DTD.28.01.2002. IT IS SEEN THAT SUBSEQUENTLY APPROVAL WAS OBTAINED FOR CONSTRU CTION OF BLOCK B & C VIDE VUDA PROCEEDINGS 742/04 DTD.08.04.2004. IN REGARD TO CONSTRUCTION OF BLOCK A, IT WAS STATED THAT 90% OF SALES WAS ADMITTED IN F.Y.2003 - 04 AND THE BALANCE 10% IN F.Y.2004 - 05. 6.4 IT IS SEEN THAT THE ASSESSEE HAS ACQUIRED RIGHTS OVE R THE LAND UNDER THE AGREEMENT TO SELL WITH GPA, AND SUBSEQUENTLY ALL THE ACTIVITIES SUCH AS OBTAINING OF P LA N, CONSTRUCTION AND SALE OF FLATS HAVE BEEN CARRIED OUT BY THE ASSESSEE, AND THEREFO R E THE 7 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. ASSESSEE CANNOT BE TERMED AS A WORKS CONTRACTOR. FURTHER THERE IS NO CO NDI TION STIPULATED IN THE PROVISIONS OF SECTION 801B(10) THAT THE ASSESSEE SHOULD BE A FULL FLEDGED OWNER. THEREFORE I AM OF THE VIEW THAT THE AO IS NOT J USTIFIED IN DENYING THE CLAIM OF DEDUCTION ON THIS GROUND . 6.5. THE ASSESSEE HAS SUBMIT TED BLOCK A WAS CONSTRUCTED PARTLY I.E., 90% IN THE SUBJECT YEAR AND THE BALANCE 10% IN THE SUBSEQUENT YEAR. AS REGARDS BLOCK B &C IT WAS SUBMITTED VIDE LETTER DTD.05.12.2011 TO THE ASSESSING OFFICER THAT THEY WERE NOT COMPLETED DUE TO LEGAL HURDLES FACED BY THE ASSESSEE. IT WAS ALSO SUBMITTED THAT THERE WERE LEGAL DISPUTES REGARDING BLOCK A ALSO WHICH WAS NOT RESOLVED. IT WAS SUBMITTED THAT THE ASSESSEE COULD NOT FURNISH COMPLETION CERTIFICATE FOR THIS REASON. HOWEVER, IT WAS ARGUED THAT CONSTRUCTION OF BL OCK A WAS EXECUTED ON THE PLOT AREA OF 1.34 ACRES, AND THE LAND WAS NOT DEMARCATED, AND AS SUCH ASSESSEE WOULD BE ENTITLED TO PROPORTIONATE DEDUCTION. THE AUTHORIZED REPRESENTATIVE FURTHER ARGUED THAT AS PER CBDT INSTRUCTION 4/2009, THE PROPORTIONATE COMPL ETION METHOD IS ALLOWED AND THAT AS THE ASSESSEE HAS COMPLETED BLOCK A IN THE SUBJECT YEAR AND SUBSEQUENT YEAR, WITHIN THE STIPULATED TIME, THE ASSESSEE HAS SATISFIED THE CONDITIONS PRESCRIBED IN SECTION 801B (10) AND SHOULD BE ALLOWED PROPORTIONATE DEDUCT ION FOR THE CONSTRUCTION OF A BLOCK. FOR THIS PURPOSE, THE ASSESSEE RELIED ON THE DECISION OF MUMBAI TRIBUNAL IN THE CASES OF VANDANA PROPERTIES AND MR.JOHAR HANAN ZOJWALA WHEREIN THE HONOURABLE TRIBUNAL HAS HELD PROPORTIONATE DEDUCTION IS ALLOWABLE FOR CO MPLETED BLOCK AS LAND WAS NOT DEMARCATED, AND THAT PROPORTIONATE DEDUCTION IS ALLOWABLE IF PROJECT WAS COMPLETED IN THE STIPULATED TIME RESPECTIVELY. 6.6. IT IS RELEVANT TO EXTRACT THE PROVISION OF SECTION 801B (10) AS IT EXISTED AT THE RELEVANT YEAR WHICH READS AS FOLLOWS : (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED [BEFORE THE 31ST DAY OF MARCH, [20031] BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RE LEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998[** *] ; ( B ) THE PROJECT IS ON THE SIZE OF A PLOT OF L AND WHICH HAS A MINIMUM AREA OF ONE ACRE; AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT - UP AREA OF ONE THOUSAND SQU ARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED 8 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY - FIVE KILOMETRES FROM THE MUNICIP AL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. 7. THUS AS PER SECTION 801B (10), THE REQUISITE CONDITIONS PRESCRIBED FOR ALLOWANCE OF DEDUCTION IS AS UNDER : I. THE CONSTRUCTION OF THE HOUSING PROJECT SHOULD HAVE COMMENCED ON OR AFTER 1S T DAY OCTOBER, 1998. II. THE PROJECT SHOULD BE ON THE SIZE OF A LAND WHICH HAS A MINIMUM AREA OF ONE ACRE. III. THE RESIDENTIAL UNIT SHOULD HAVE A SPECIFIED BUILT UP AREA. 8. THE CBDT INSTRUCTION NO.4 OF 2009, DT.30 TH JUNE, 2009 READS AS UNDER: UNDER SUB - SECTION (10) OF SECTION 80 - LB AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS IS ALLOWED A DEDUCTION OF 100% OF ITS PROFITS DERIVED FR O M SUCH PROJECTS IF IT COMMENCED THE PROJECT ON OR AFTER 1.10.1998 AND COMPLETES THE CONSTRUCTION WITHIN FOUR YEARS FROM THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. 2. CLARIFICATIONS HAVE BEEN SOUGHT BY VARIOUS CCSIT ON THE ISSUE WHETHER THE DEDUCTION UNDER S.80 - IB(10) WOULD BE AVAILABLE ON A YEAR TO YEAR B ASIS WHERE AN ASSESSEE IS SHOWING PROFIT ON PARTIAL COMPLETION OR IF IT WOULD BE AVAILABLE ONLY IN THE YEAR OF COMPLETION OF THE PROJECT UNDER S.80 - IB (10). 3. THE ABOVE ISSUE HAS BEEN CONSIDERED BY THE BOARD AND IT IS CLARIFIED AS UNDER : (A) THE DEDU CTION CAN BE CLAIMED ON A YEAR TO YEAR BASIS WHERE THE ASSESSEE IS SHOWING PROFIT FROM PARTIAL COMPLETION OF THE PROJECT IN EVERY YEAR. (B) IN CASE IT IS LATE, FOUND THAT THE CONDITION OF COMPLETING THE PROJECT WITHIN THE SPECIFIED TIME LIMIT OF 4 YEARS AS STA RTED IN SECTION8O - IB (10) HAS NOT BEEN SATISFIED, THE DEDUCTION GRANTED TO THE ASSESSEE IN THE EARLIER YEARS IS SHOULD BE WITHDRAWN. 9 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. 4. THE ABOVE INSTRUCTION WILL OVERRIDE EARLIER CLARIFICATION ON THIS ISSUE CONTAINED IN MEMBER(R)'S D.O LETTER NO.58/MISC.2 008/CIT(IT & CT) DATED 29.04.2008 AND MEMBER (IT)S D.O. LETTER NO.279/MISC.46/08 - IT] DATED 2.5.2008. 9. THUS IT COULD BE SEEN THAT FOR THE APPROVAL GIVEN BEFORE 31S T MARCH, 2004, THERE IS NO STATUTORY REQUIREMENT OF FILING COMPLETION CERTIFICATE. THE ASSESS EE HAS ADMITTED THAT 90% OF CONSTRUCTION OF A BLOCK WAS COMPLETED IN THIS YEAR AND T H E BALANCE CONSTRUCTION WAS OFFERED IN THE NEXT YEAR. SUCH A METHOD OF A CC OUNTING IS PERMISSIBLE IN VIEW OF CBDT INSTRUCTION NO.4 WHICH STATES THAT THE DE DU C TION CAN BE CLA IMED ON A YEAR TO YEAR BASIS ON PARTIAL COMPLETION OF PROJECT IN E V ERY YEAR. IN VIEW OF THIS LEGAL POSITION, I AM OF THE VIEW THAT THE ASSESSING O FFICER IS NOT JU S TIFIED IN DENYING THE DEDUCTION FOR WANT OF COMPLETION CERTIFICATE OR FOR NOT OFFERING THE EN TIRE INCOME IN A SINGLE YEAR. 10. IT COULD BE SEEN THAT THE ASSESSEE HAS SATISFIED THE LEGISLATIVE CONDITIONS STIPULATED IN THE PROVISIONS CONTAINED IN SECTION 80 LB (10) AS IT EXISTED IN THE RELEVANT ASSESSMENT YEAR AS REGARDS ITS CLAIM OF DEDUCTION MADE IN RESPECT OF CONSTRUCTION OF BLOCK - A. THE ENTITLEMENT TO DEDUCTION OF BLOCK B & BLOCK C IS GOVERNED BY THE STATUTORY PROVISIONS AS AMENDED WITH EFFECT FROM 01.04.2004, AS THE APPROVAL FOR CONSTRUCTION OF BLOCK B & C WAS GIVEN IN APRIL, 2004. ANY FAILURE T O COMPLY WITH THE CONDITIONS PRESCRIBED UNDER THE AMENDED PROVISION WIL L HAVE A BEARING ON THE CLAIM OF DEDUCTION IN RESPECT OF BLOCK B & C. IN THIS REGARD, IT IS RELEVANT TO NOTE THAT THE HONOURABLE IT AT, HYDERABAD BENCH IN THE CASE OF PRASHANTH SAL B UI IL DERS VS. CIT (INDIAN KANOON.ORG.DOC/157606779) HAS TAKEN SUCH A VIEW RELYING ON THE DECISION OF MADRAS HIGH COURT IN THE CASE OF CIT VS. JAIN HOUSING CONSTRUCTION LTD (214 TAXMAN 178), WHEREIN IT WAS OBSERVED,' TILL 2005, T HERE WAS NO CLAUSE DEALING WITH COMPLETION, IN WHICH EVENT ONE CANNOT READ INTO THE PROVISION AS A CONDITION, WHICH IS NOT SPECIFICALLY PROVIDED FOR TO THEREIN.' IN VIEW OF THE ABOVE LEGAL POSITION I FIND THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN DENY ING THE CLAIM OF DEDUCTION U/S.801B (10) AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM. ACCORDINGLY, THIS GROUND OF APPEAL CAN BE TAKEN AS ALLOWED. 3 . 4. THE A SSESSEE HAS ACQUIRED THE LAND OF 1.34 ACRES AND APPLIED FOR THE APPROVAL OF 3 BLOCKS A, B & C . T HE VUDA HAS APPROVED ONLY ONE 10 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. BLOCK I.E., B LOCK A ON 28 .0 1 .2002. THE CONSTRUCTION IN THE SAID BLOCK WAS COMPLETED WITHIN 4 YEARS . THE VUDA HAS APPROVED PLAN FOR BLOCKS B & C SUBSEQUENTLY ON 08.04.2004. T HOUGH THE HOUSING PROJECT CONSISTS OF B LOCKS A, B & C EACH BLOCK IS DIFFERENT WITH DISTINCT APPROVALS. THE FACT IS THAT THE ASSESSEE HAS COMPLETED CONSTRUCTION I N MORE THAN ONE ACRE OF THE PLOT AND THE SIZE OF THE FLA T WA S WITHIN THE LIMITATION OF 1500 S Q. FT / 1000 S Q. FT IS NOT DI SPUTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER RELIED ON THE DECISION OF ITAT HYDERABAD BENCH IN THE CASE OF PRASHANTH SAI BUILDERS VS. CIT AND ALSO MADRAS HIGH COURT DECISION IN THE CASE OF CIT VS. JAIN HOUSING CONSTRUCTION LTD. THE ASSESSEE RELI ED ON THE DECISION OF ITAT MUMBAI IN THE CASE OF VANDANA PROPERTIES AND MR.JOHAR HANAN ZOJWALA WHEREIN HONBLE ITAT HELD THAT PROPORTIONATE DEDUCTION IS ALLOWABLE FOR COMPLETED BLOCK IF THE LAND WAS NOT DEMARCATED AND PROPORTIONATE DEDUCTION IS ALLOWABLE IF PROJECT WAS COMPLETED IN A STIPULATED TIME. THE DECISION OF HONBLE ITAT MUMBAI WAS APPROVED BY HONBLE HIGH COURT OF BOMBAY IN [ 19 TAXMAN.COM 316 ] ( BOM ). FURTHER, THE LD. AR RELIED ON THE DECISION OF VISWA S PROMOTERS PRIVATE LTD VS. ACIT, WH E REIN, HON BLE MADRAS HIGH COURT HELD THAT THE ASSESSEE IS ELIGIBLE FOR PROPORTIONATE RELIEF FOR THE UNITS SATISFYING THE 11 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. EXTENT OF THE BUILT UP AREA. WE EXTRACT THE RELEVANT PARAGRAPHS OF HONBLE MADRAS HIGH COURT ORDER AS UNDER : 14. ON THE FACTS ADMITTED BY TH E REVENUE, IN THE PROJECTS AGRINI AND VAJRA , THERE ARE NUMBER OF FLATS WHICH ARE BELOW 1500 SQ.FT., AND THE RELEVANT BUILT - UP AREA REQUIREMENT IS SPECIFIED UNDER SECTION 80IB(10)(C) OF THE INCOME TAX ACT. THUS, THE BUILT - UP AREA IN SOME OF THE FLATS IN BOTH THESE PROJECTS ARE IN EXCESS OF 1500 SQ.FT., I.E., 32 FLATS IN AGRIRI AND ONLY ONE FLAT IN VAJRA AND THAT THE ASSESSES HAD NOT CLAIMED ANY DEDUCTION ON THIS. WE HOLD THAT THE TRIBUNAL IS NOT CORRECT IN ITS VIEW, THAT BY REASON OF THESE UNITS BEING IN EXCESS OF 1500 SQ.FT., THE ENTIRE CLAIM OF THE ASSESSEE IN RESPECT OF THESE TWO PROJECTS WOULD STAND REJECTED UNDER SECT ION 8 0 IB(10 ) OF THE INCOME TAX ACT THUS, GOING BY THE DEFINITION OF 'HOUSING PROJECT' UNDER EXPLANATION TO SECTION 80 HHBA OF THE ACT AS REFERRED TO ABOVE AS THE CONSTRUCTION OF 'ANY BUILDING' AND THE WORDINGS IN SECTION 80IB (10) OF THE ACT,, THE QUESTION OF REJECTION IN ENTIRETY OF THE PROJECT ON ACCOUNT OF ANY ONE OF THE BLOCKS NOT COMPLYING WITH THE CONDITIONS, DOES NOT ARISE. EVEN I N THE CASE OF EACH ONE OF THE BLOCKS, WHEREVER THERE ARE FLATS WHICH SATISFIED THE CONDITIONS PARTICULARLY OF THE NATURE STATED UNDER SECTION 8OIBUQ1 M OF THE ACT, WE HAVE ALREADY UPHELD THE CASE OF THE ASSESSEE IN I.C.NOS1348 AND 1349 OF 2007 DATED 10.10. 2012 FOR GRANT OF RELIEF UNDER SECTI ON 80IB(10) OF THE ACT ON A PROPORTIONATE BASIS, BY FOLLOWING THE DECISION OF THE BOMBAY HIGH COURT REPORTED IN (20113 333 ITR 289 (CIT VS BRAHMA ASSOCIATES) THUS APPLYING THE DECISION OF THIS COURT INT.C N OS.1348 AND 1 349 OF 2007 DATED 10 .10 .2012, WE HOLD THAT THE ASSESSEE IS ENTITLED TO SUCCEED BOTH ON THE PRINCIPLE OF PROPORTIONALITY AS WELL AS BY REASON OF THE CONSTRUCTION ON THE MEANING OF THE EXPRESSION* 'HOUSING PROJECT AS REFERRING TO CONSTRUCTION OF ANY BUILDING AND THE WORDINGS IN SECTION 8018(1 0) LOF THE ACT IN THE CIRCUMSTANCES, WE HOLD THAT THE MERE FACT THAT ONE OF THE BLOCKS HAVE UNITS EXCEEDING BUILT - UP AREA OF 1500 SQ.FT, PER SE, WOULD NOT RESULT IN NULLIFYING THE CLAIM OF THE ASSESSEE FOR THE ENTIRE PROJE CTS CONSEQUENTLY, IN RESPECT OF EACH OF THE BLOCKS, THE ASSESSEE IS ENTITLED TO HAV E THE BENEFIT OF DEDUCTION I N RESPECT OF RESIDENTIAL UNITS SATISFYING THE REQUIREMENT UNDER SECTION 80IB(10)(C) OF THE ACT. IN SO HOLDING, WE ALSO AGREE WITH THE DECISION OF THE BOMBAY HIGH COURT REPORTED IN [2012] 206 TAXMAN 584 (C IT V VANDAN A PROPERTIES), WHICH WAS DECIDED BY THE BOMBAY HIGH COURT ON SIMILAR LINES AS IN THE ASSESSEE'S CASE BEFORE US. 12 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. 3.5 . THE INSTANT CASE IS SQUARELY CO VERED BY THE DECISION OF HONBLE MA DRAS HIGH COURT. THEREFORE, WE HOLD THAT THE LD.CIT(APPEALS) HAS RIGHTLY ALLOWED THE PROPORTIONATE DEDUCTION U/S 80IB FOR BLOCK A AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER AND WE HAVE NO HESITATION TO UPHOLD THE ORDER OF THE LD.CIT(AP PEALS). THE APPEAL OF THE REVENUE IS DISMISSED. 4 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. T HE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31 ST JU L 20 17 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 31 .07.2017 L. RAMA, SPS 13 ITA NO. 225 /VIZAG/201 4 , AY 20 04 - 05 M/S BHARAT TANMAI SESHAM ESTATES PVT. LTD. / COPY OF THE ORDER FORWARDED TO : - 1. / THE APPELLANT DCIT, CIRCLE - 3 (1), VISAKHAPATNAM 2 . / THE RESPONDENT M/S BHARAT TAN MAI SESHAM ESTATES PVT. LTD., VISAKHAPATNAM 3 . / THE CIT - I , VI SAKHAPATNAM 4 . ( ) / THE CIT (A) , VI SAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM