The ACIT, Bhopal V. Smt Saroj Kapoor Prop.Krishna Homes, Bhopal

ITA 317/IND/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59503 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 01-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: SSH H P VERMA; GIRISH AGRAWAL
• Keywords: Assessment record
• Section: 80IB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 317/IND/2011 A.Y. 2004-05 ASSISTANT COMMISSIONER OF INCOME TAX 1(1), BHOPAL ... APPELLANT VS. SAROJ KAPOOR, PROP. KRISHNA HOMES, BHOPAL PAN ABWPK 4857 E ... RESPONDENT APPELLANT BY : SHRI ARUN DEWAN, SR. DR RESPONDENT BY : S/SH. H.P. VERMA & GIRISH AGRAWAL DATE OF HEARING : 22.2.2012 DATE OF PRONOUNCEMENT : 22.2.2012 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 14.9.2011 PASSED BY THE LD. FIRST APPELLATE AUTHORI TY, BHOPAL, 2 WITH REGARD TO DELETION OF PENALTY OF RS.3 LACS LEV IED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE I.T. ACT. 2. DURING HEARING, THE LEARNED COUNSEL FOR THE ASSE SSEE SHRI H.P. VERMA AND SHRI GIRISH AGRAWAL SUBMITTED THAT S INCE THE QUANTUM ADDITION HAS BEEN DELETED BY THE TRIBUNAL V IDE ORDER DATED 16.4.2010, THE PENALTY IMPOSED U/S 271(1)(C) DOES NOT SURVIVE. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO FURNISHED THE COPY OF THE ORDER PASSED BY THE TRIBUNAL IN ITA NO.194/IND/2008 AND CO NO.51/IND/2008 (ORDER DATED 16.4.2010). THIS ASSERTION OF THE LEARNED COUNSEL F OR THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. UNCONTROVERTEDLY, T HE QUANTUM ADDITION HAS ALREADY BEEN DELETED BY THE TRIBUNAL A FTER MAKING AN ELABORATE DISCUSSION IN ITS ORDER DATED 16.4.201 0, THEREFORE, THE VERY BASIS OF LEVYING THE PENALTY IS NO MORE IN EXISTENCE. WE ARE REPRODUCING HEREWITH THE RELEVANT PORTION OF THE AFORESAID ORDER DATED 16.4.2010 FOR READY REFERENCE : 3 THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTI ON FILED BY THE ASSESSEE ARISE OUT OF ORDER OF THE LD. CIT(A)-I, BH OPAL, DATED 18.01.2008, FOR THE ASSESSMENT YEAR 2004-05. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. FIRST, WE SHALL TAKE UP THE REVENUES APPEAL WHEREI N THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LD. CIT (A) IN ALLOWING DEDUCTION TO THE ASSESSEE U/S 80IB(10) ON PRO-RATA BASIS. THIS IS THE ONLY ISSUE INVOLVED, THOUGH THE REVENUE HAS TAKEN F IVE GROUNDS. 4. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAG ED IN THE BUSINESS OF DEVELOPING AND CONSTRUCTION OF HOUSING PROJECTS AND CLAIMED DEDUCTION U/S 80IB(10) AMOUNTING TO RS. 1,5 2,67,762/-. THE A.O. FOUND THAT IN THE YEAR UNDER CONSIDERATION, TH E ASSESSEE DEVELOPED AND SOLD HOUSING PROJECTS COMPRISING OF R OW HOUSES AND FLATS IN GREEN CITY AT E-8, ARERA COLONY, BHOPAL. T HE A.O. IN ORDER TO ASCERTAIN ACTUAL BUILT UP AREA OF EACH HOUSE OF THE PROJECT CONDUCTED A PHYSICAL VERIFICATION ON THE SITE ON 8. 12.2006 AND ON TAKING MEASUREMENT OF THREE FLATS, THE BUILT UP ARE A OF SUCH FLATS WAS FOUND TO BE MORE THAN 1500 SQ.FT. THE DETAILS O F SUCH FLATS ARE AS UNDER :- HOUSE NO. MEASURED & PROJECT NAME OF THE OWNER/OCCUPIER TOTAL BUILT UP AREA A-2-18 GREEN CITY SMT. KAVITA BHATT 1875.33 SQ.FT. A-4 GREEN CITY SHRI O.P. BEOHAR 1928.56 SQ.FT. A-6, GREEN CITY SMT. KRISHNA MURTHY W/O SHRI C. S. KRISHNA MURTHY 2639.14 SQ.FT. 5. THE A.O., ACCORDINGLY, GAVE THE COPIES OF THE MEASU REMENT SO TAKEN FOR THE COMMENTS OF THE ASSESSEE AND WAS A LSO REQUIRED TO EXPLAIN AS TO WHY THE DEDUCTION U/S 80IB(10) SHOULD HAVE BEEN DISALLOWED. THE ASSESSEE VIDE ITS LETTER DATED 26.1 2.2006 HAS SUBMITTED THAT MEASUREMENTS WERE NOT CORRECTLY TAKE N AND ALSO SUBMITTED THE AREAS AS PER THE REPORT OF A TECHNICA L EXPERT, WAS WITHIN THE PRESCRIBED LIMIT OF 1500 SQ.FT.THE A.O., HOWEVER, REJECTED SUCH CLAIM OF THE ASSESSEE AND SUCH REPORT FOR THE REASON THAT THE MEASUREMENTS WERE DONE BY THE DEPARTMENT IN THE PRE SENCE OF ASSESSEES REPRESENTATIVE. THEREAFTER, THE A.O. REF ERRED TO THE 4 PROVISIONS OF SECTION 80IB(10) AND CLAUSE (A) OF SE CTION 80IB(14) AND HELD THAT DEFINITION OF BUILT UP AREA HAD BEEN DEFI NED, WHICH WAS OF CLARIFICATORY NATURE AND, THEREFORE, AS PER THIS DE FINITION, THE MEASUREMENTS TAKEN BY THE ENGINEER HIRED BY THE ASS ESSEE WAS NOT OF MUCH USE AS THERE WAS NO CONCEPT OF NET BUILT UP AREA IN SECTION 80IB. THE LD. A.O. ALSO HELD THAT PROVISIONS OF SEC TION 80IB(14)(A) OF THE ACT WAS OF CLARIFICATORY NATURE, HENCE HAD RETR OSPECTIVE APPLICATION. THE A.O. FURTHER FOUND THAT IN CASE OF HOUSE NO. A/6 ON THE DATE OF PHYSICAL VERIFICATION NOBODY HAD POINTE D OUT ANY DISCREPANCIES IN THE MEASUREMENTS TAKEN BY THE DEP ARTMENT AND FACT OF SO CALLED ADDITIONAL CONSTRUCTION BY THE O WNERS SUBSEQUENTLY WAS BROUGHT TO THE NOTICE OF THE DEPAR TMENT, WHICH WAS AN AFTER THOUGHT ON THE PART OF THE ASSESSEE. IT WAS ALSO HELD THAT EVEN IF 400 SQ.FT. AREA WAS EXCLUDED THEN ALSO THE REMAINING PART WAS MORE THAN THE LIMIT PRESCRIBED U/S 80-IB. ACCORDINGLY, THE A.O. REJECTED THE CLAIM OF THE ASSESSEE FOR DEDUCTI ON U/S 80-IB(10) OF THE ACT. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A), WHEREIN IT WAS CONTEN DED THAT THE ASSESSEE HAD COMPLIED WITH ALL THE THREE CONDITIONS AS LAID DOWN U/S 80IB(10). THE ASSESSEE ALSO GAVE THE DETAILS OF THE TYPES OF FLATS CONSTRUCTED BY THE ASSESSEE. IN THIS REGARD, THE AS SESSEE SUBMITTED THAT IN FIRST PHASE, THE RESIDENTIAL FLATS WERE CON STRUCTED ADMEASURING 929.46 SQ.FT., 1082.35 SQ.FT. OF WHICH NO MEASUREMENTS WERE DONE BY THE DEPARTMENT. IN THE S ECOND PHASE, 9, A-1 TYPE AND 13 A-II TYPE DUPLEX HOUSES WERE CON STRUCTED AND THE MEASUREMENT OF DUPLEX HOUSES WAS FOUND LESS THA N 1500 SQ.FT. BY THE APPROVED VALUATION OFFICER. IT WAS ALSO SUBM ITTED THAT IN THE THIRD PHASE, DUPLEX HOUSES AND EWS FLATS WERE CONST RUCTED AND THE AREA OF SUCH DUPLEX RESIDENTIAL WAS 1254.22 SQ.FT. AND EWS FLATS WAS 217 SQ.FT. IT WAS ALSO SUBMITTED THAT PHYSICAL MEASUREMENT OF HOUSES CONSTRUCTED IN THIRD PHASE WAS ALSO NOT DONE BY THE DEPARTMENT. THE ASSESSEE ALSO SUBMITTED THAT IN CAS E OF A/6 DUPLEX HOUSES, THE DEPARTMENT PRIMARILY MEASURED THE AREA THEREOF AT 3812 SQ.FT., WHICH WAS SUBSEQUENTLY CORRECTED TO 26 39.14 SQ.FT., BY THE DEPARTMENT ON ITS OWN, WHICH FACT INDICATED TH AT THE ASSESSEES REPRESENTATIVE HAD NOT CHECKED THE MEASU REMENT AND ITS CALCULATION. IT WAS ALSO CONTENDED THAT THE OWNER O F SUCH HOUSE HAD ALSO ACCEPTED THAT 400 SQ.FT. OF ADDITIONAL PORTION WAS CONSTRUCTED SUBSEQUENTLY BY THE OWNER. THE ASSESSEE ALSO SUBMIT TED THAT THE PROVISIONS OF CLAUSE (A) OF SUB SECTION (14) OF SEC TION 80IB WERE OF PROSPECTIVE NATURE AND THE CORRECT METHOD TO CALCUL ATE THE BUILT UP AREA HAD TO BE IN ACCORDANCE WITH M.P. BHOOMI VIKAS RULES, 1984, WHICH WAS APPLICABLE IN THE STATE OF M.P. WHERE THE SUCH HOUSING PROJECT HAD BEEN CONSTRUCTED. THE ASSESSEE ALSO REF ERRED TO THE METHODOLOGY OF MEASUREMENT AS PER THESE RULES TO CO MPUTE THE BUILT UP AREA, WHICH WAS ALSO ADOPTED BY THE APPROV ED VALUATION OFFICER AND ON THAT BASIS, IT WAS FOUND THAT SUCH B UILT UP AREA WAS 5 LESS THAN 1500 SQ.FT. THE ASSESSEE ALSO SUBMITTED T HAT THE MEASUREMENT WAS DONE BY THE DEPARTMENT THROUGH UNQU ALIFIED PERSONS INSPITE OF THE FACT THAT SERVICES OF TECHNI CAL PERSONNEL TO CARRY OUT SUCH JOBS WERE ALSO AVAILABLE WITH THE DE PARTMENT AND THIS APPROACH OF THE DEPARTMENT INDICATED THAT IT W AS A PREDETERMINED ACTION TO DISALLOW THE ELIGIBLE CLAIM OF THE ASSESSEE. THE LD. CIT(A) AFTER CONSIDERING ALL THE DOCUMENTS AS WELL AS LEGAL POSITION NARRATED BY THE ASSESSEE HELD THAT THE ASS ESSEE WAS ENTITLED FOR PRO-RATA DEDUCTION IN RESPECT OF SUCH HOUSING PROJECT AS THE THREE FLATS WERE HAVING BUILT UP AREA OF MORE T HAN 1500 SQ.FT. THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE AS UNDE R :- I HAVE CAREFULLY EXAMINED THE DETAILED REASONS GIV EN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND VARIO US SUBMISSIONS OF THE APPELLANT ON THIS ISSUE AND ALSO THE LEGAL P OSITION BROUGHT OUT BY THE AR, I FIND THAT ONLY THREE DUPLEX RESIDENTI AL HOUSES HAVE BEEN MEASURED, WHICH ACCORDING TO THE APPELLANT IS BELOW 1,500 SQ.FT. I FIND THAT THE MEASUREMENT OF FLATS AND DUP LEXS TYPE A-III AND EWS FLATS ARE BELOW 1,500 SQ.FT. AS PER THE CERTIFI CATE OF MEASUREMENT OF ENGINEER AND DECLARATION MADE BY THE APPELLANT UNDER PRAKOSHTA SWAMITVA ADHINIUM 1976, DULY REGIST ERED, FILED BY THE APPELLANT. THE MEASUREMENT OF DUPLEX TYPE A-I AND A-II AFTER CONSIDERING THE DEDUCTION, PERMISSIBLE UNDER BHOOMI VIKAS RULES, 1984, AS PER THE CERTIFICATE OF THE ENGINEER SUBMIT TED BY THE APPELLANT IS LESS THAN 1,500 SQ.FT. I, THEREFORE, O F THE CONSIDERED VIEW THAT IT WILL BE FAIR ENOUGH TO TAX THE PROFIT OF 3 DUPLEXS OF TYPE AI & AII OF PHASE/PART 2 WHICH WERE MEASURED BY THE DEPARTMENT AND FOUND EXCEEDING 1,500 SQ.FT. AS PER THE PROFIT AND LOSS ACCOUNT SUBMITTED BY THE APPELLANT, IT IS SEEN THAT THE TO TAL SALE CONSIDERATION OF DUPLEXES AND FLATS IS RS. 6,73,38, 296/- AND SALE OF 3 DUPLEX TYPE A-I & A-II IS FOR RS. 39,18,920/-. THE PRO-RATA RATE OF PROFIT ON THESE THREE DUPLEXES @ 22.67 % COMES TO R S. 8,88,420/-. BUT, HOWEVER, IT IS SEEN THAT THE A.O. HAS DISALLOW ED THE ENTIRE CLAIM, INSTEAD OF DISALLOWANCE ON PRO RATA BASIS, W HICH IN MY OPINION IS NOT PROPER. THUS, THE DISALLOWANCE IS RE STRICTED TO RS. 8,88,420/- ONLY AND AS SUCH THE APPELLANT GETS A RE LIEF OF RS. 1,43,79,342/- I.E. ( RS. 1,52,67,762/- MINUS RS. 8, 88,420/-) AND THE APPEAL IS PARTLY ALLOWED. 6. THE LD. CIT DR CONTENDED THAT WHATEVER FLATS WERE MEASURED ON SAMPLE BASIS WERE FOUND HAVING BUILT UP AREA OF MORE THAN 1500 SQ.FT. HENCE, OTHER FLATS WERE ALSO TO BE CONSIDERED OF HAVING BUILT UP AREA OF MORE THAN THIS LIMIT. IT WA S FURTHER CONTENDED THAT PROVISIONS OF SECTION 80IB(14)(A) WE RE OF CLARIFICATORY NATURE AND, HENCE, APPLICABLE FOR THE YEAR UNDER CONSIDERATION ALSO AND IF THAT BE THE CASE, THEN T HE M.P. BHOOMI VIKAS RULES WERE NOT RELEVANT AND CONSEQUENTLY METH ODOLOGY OF 6 SUCH RULES COULD ALSO NOT BE APPLIED IN COMPUTING T HE BUILT UP AREA OF EACH FLAT. THE LD. CIT DR FURTHER CONTENDED THAT IT WAS A CASE OF ROW HOUSING AND NOT A CASE OF TOWER/MULTI-STOREYED FLATS, HENCE, NO QUESTION OF COMMON PARKING AREAS OR COMMON FACILITI ES, WHICH COULD BE EXCLUDED IN COMPUTING BUILT UP AREA. THE L D. CIT DR FURTHER CONTENDED THAT ASSESSEES ENGINEERS SUBSEQUENT REP ORT WAS NOT TO BE ACCEPTED WITHOUT CONFRONTING THE SAME TO THE A.O . OR VERIFICATION OF THE SAME BY THE TECHNICAL PERSONS, HENCE, IN VIEW OF THE FACT THAT NO SUCH EXERCISE WAS DONE BY THE CIT( A), THE SAME COULD NOT BE GIVEN ANY WEIGHTAGE. THE LD. CIT DR FU RTHER CONTENDED THAT THE LD. CIT(A) ALSO DID NOT VERIFY THE APPROVE D MAP/REGISTRATION DOCUMENTS TO FIND OUT THE CORRECT FACTS. HENCE, THE ORDER OF LD. CIT(A) WAS NOT CORRECT. THEREAFTER, THE LD. CIT(A) REFERRED TO PAGE 123 & 124 TO DRAW OUR ATTENTION TOWARDS THE AMOUNT OF CONSIDERATION, WHICH WAS NOT SAME, HENCE, THE UNITS COULD NOT BE OF SAME SIZE. THE LD. CIT DR FURTHER CONTENDED THAT TH E PROVISIONS OF SECTION 80IB(10) WERE UNAMBIGUOUS AND THERE WAS NO METHODOLOGY PRESCRIBED THEREIN TO GIVE PRO-RATA DEDUCTION AND, THEREFORE, WHEN SOME FLATS WERE FOUND TO HAVING BUILT UP AREA OF MO RE THAN 1500 SQ.FT, THEN, THE ASSESSEE WAS NOT ELIGIBLE FOR DEDU CTION U/S 80IB(10). THE LD. CIT DR THEREAFTER ALSO REFERRED TO THE ENGI NEERS REPORT SUBMITTED BY THE ASSESSEE AND SUBMITTED THAT IT WAS NOT AS PER THE CRITERIA LAID DOWN IN THE ACT, HENCE, NOT CORRECT P IECE OF EVIDENCE. THE LD. CIT DR FURTHER SUBMITTED THAT LETTER OF THE OWNER OF THE HOUSE OF A/6 WAS A CASE OF AFTER THOUGHT ONLY, HENC E, NOT CONSIDERABLE. ACCORDINGLY, HE PRAYED THAT THE ORDER OF THE A.O. WAS TO BE CONFIRMED. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT FOLLOWING FOUR QUESTIONS WERE TO BE DECIDED :- (I) WHETHER PROVISIONS OF SECTION 80IB(14)(A) OF THE AC T WERE RETROSPECTIVE OR PROSPECTIVE ? (II) IF PROSPECTIVE, THEN WHAT CRITERIA HAD TO BE ADOPTE D TO COMPUTE THE BUILT UP AREA ? (III) WHETHER ACTUAL AREA OF THREE FLATS WAS MORE THAN 15 00 SQ.FT. OR NOT. (IV) WHETHER THE LD. CIT(A) WAS CORRECT IN GIVING PRO RA TA DEDUCTION ? 8. AS REGARDS TO QUESTION NO. 1, HE SUBMITTED THAT T HIS ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN TH E CASE OF AIR DEVELOPERS AS REPORTED IN 14 ITJ 206 (NAGPUR), WHER EIN THE TRIBUNAL HELD THAT THE DEFINITION OF BUILT UP AREA AS PRESCR IBED IN SECTION 80IB(14)(A) COULD NOT BE SAID TO BE RETROSPECTIVE. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT IN THE CASE OF 7 BRAHMA ASSOCIATES, SPECIAL BENCH OF THE TRIBUNAL HA D ALSO HELD THAT THE PROVISIONS SPECIFYING MAXIMUM COMMERCIAL AREA L IMITS WERE ALSO OF PROSPECTIVE NATURE. IN THIS REGARD, THE LEA RNED COUNSEL FURTHER REFERRED TO NOTES TO CLAUSES AS WELL AS C.B .D.T. CIRCULAR WHEREIN IT HAD BEEN CLARIFIED THAT DEFINITION OF BU ILT UP AREA HAD TO BE APPLIED WITH EFFECT FROM ASSESSMENT YEAR 2005-06 . IT WAS ALSO CONTENDED THAT SUCH DEFINITION WAS IN THE NATURE OF SUBSTANTIVE PROVISIONS, HENCE, IT COULD NOT BE CONSIDERED CLARI FICATORY AND RETROSPECTIVE. FOR THIS PROPOSITION, THE LEARNED CO UNSEL RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF GOVIND DAS AS REPORTED IN 103 ITR 123. THEREAFTER, THE LEA RNED COUNSEL SUBMITTED THAT THE A.O. HAD WORKED OUT THE BUILT UP AREA AS PER SUCH DEFINITION BY INCLUDING MUMTY, STAIR CASE, BAL CONY, ARCH, PROJECTION AND TERRACE AND IF THAT WAS EXCLUDED THE N THE AREA WAS LESS THAN THE SPECIFIED LIMITS. THE LEARNED COUNSEL FURTHER SUBMITTED THAT IN THE YEAR UNDER CONSIDERATION I.E . IN ASSESSMENT YEAR 2004-05, THERE WAS NO DEFINITION OF BUILT UP A REA IN THE ACT. HENCE, EITHER COMMON SENSE MEANING OR OTHER LEGISLA TIONS DEALING WITH THE SAME SUBJECT WERE TO BE RESORTED TO FIND O UT THE MEANING OF BUILT UP AREA. THE LEARNED COUNSEL THEREAFTER SU BMITTED THAT THIS HOUSING PROJECT AS PER THE ACT HAD BEEN APPROVED AS A HOUSING PROJECT BY A LOCAL AUTHORITY. HENCE, DEFINITION OF BUILT UP AREA HAD ALSO TO BE TAKEN AS GIVEN BY THE LOCAL AUTHORITIES. IN THIS REGARD, HE AGAIN RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF AIR DEVELOPERS (SUPRA). THE LEARNED COUNSEL THEREAFTER REFERRED TO THE M.P. BHOOMI VIKAS ADHINIYAM READ WITH BHOPAL MASTER PLAN TO SHOW THAT THE ITEMS ADDED BY THE ASSESSING OFFICER WERE NOT TO BE ADDED AND, THUS, THE CALCULATION DONE BY THE TECHN ICAL EXPERT APPOINTED BY THE ASSESSEE WAS CORRECT AND CONSEQUE NTLY, THE AREA OF THREE FLATS WAS ALSO LESS THAN 1500 SQ.FT. AS RE GARD TO THE SPECIFIC ISSUE OF AREA OF FLAT NO. A/6, THE LEARNED COUNSEL SUBMITTED THAT AT THE TIME OF PHYSICAL VERIFICATION, ONLY THE TENANT WAS AVAILABLE AND THE OWNER OF THAT FLAT, SUBSEQUENTLY FILED A CONFIR MATION TO THE EFFECT THAT 400 SQ.FT. AREA HAD BEEN CONSTRUCTED BY HIM AFTER PURCHASE OF THE PROPERTY AND THE SAME WAS TO BE ACC EPTED. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE A.O. DID NOT CHANGE THE COST OF CONSTRUCTION OF THIS FLAT FOR THE ADDITIONA L CONSTRUCTION. HENCE, THE BUILT UP AREA AS CLAIMED BY THE ASSESSEE COULD NOT BE DISTURBED. IT WAS ALSO CONTENDED THAT THE A.O. HAD STATED THAT IT WAS STATED BY THE ASSESSEE AND HER REPRESENTATIVE IN TH E COURSE OF PHYSICAL VERIFICATION ON 8.12.06 THAT NO ADDITIONAL CONSTRUCTION WAS DONE BY THE OWNER, WHICH WAS NOT A CORRECT FACT AS NEITHER ANY STATEMENT WAS RECORDED, NOR ANY QUESTION WAS PUT TO THE ASSESSEE OR HER REPRESENTATIVE IN THIS REGARD. THE LEARNED C OUNSEL FURTHER CONTENDED THAT THE ASSESSEE WAS ENTITLED FOR PRO-RA TA DEDUCTION, WHICH WAS DULY SUPPORTED BY THE DECISION OF THE TR IBUNAL IN THE CASE OF AIR DEVELOPERS (SUPRA), THE DECISION OF THE SPECIAL BENCH IN 8 THE CASE OF BRAHMA ASSOCIATES AS REPORTED IN 22 DTR 1, AND ALSO BY THE DECISION OF THE CALCUTTA BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. BENGAL AMBUJA HOUSING DEVELOPMENT LIMITED, WHICH HAD ALSO BEEN CONFIRMED BY THE HON'BLE CALCUTTA HIGH C OURT. THE LEARNED COUNSEL ALSO DREW OUR ATTENTION TO THE RELE VANT PORTION OF THE JUDICIAL DECISIONS RELIED BY HIM. 9. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTEN TION TO THE FACT THAT THE A.O. HAD ALSO APPOINTED A TECH NICAL EXPERT , NAMELY, SHRI AMOGH KUMAR GUPTA, WHO VIDE ITS REPORT DATED 2.12.2008 HAD ALSO STATED THAT FLATS CONSTRUCTED BY THE ASSESSEE WERE HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT. HOWEVER, THE A.O. COMPLETELY IGNORED THIS REPORT. THE LEARNED COUNSEL ALSO SUBMITTED THAT EVEN AS PER THE A.O., ALL THE FLATS WERE NOT H AVING THE SAME BUILT UP AREA, BECAUSE EVEN AS PER THE VERSION OF A .O. IN THE ASSESSMENT ORDER AT PAGE 6 WERE THAT HOUSE NO. A/6, WAS QUITE BIGGER THAN THIS CATEGORY OF OTHER HOUSES IN THE PR OJECT. 10. THE LD. CIT DR, IN THE REJOINDER, MAINLY REITERATED THE SUBMISSIONS MADE EARLIER AND FURTHER SUBMITTED THAT THE OBJECT OF STATE GOVERNMENT RULES/ BY LAWS WERE DIFFERENT FROM THE OBJECT OF PROVISIONS OF SECTION 80IB(10), HENCE, SAID RULES C OULD NOT BE CONCLUSIVE. HE FURTHER CONTENDED THAT ONCE THE MEAS UREMENT TAKEN BY THE DEPARTMENT HAD BEEN SIGNED BY THE PROJECT MANAGER OF THE ASSESSEE, AS EVIDENT FROM THE ASSESSMENT RECORD, HE NCE, THERE WAS NO NECESSITY FOR THE A.O. TO CONSIDER THE REPORT OF THE TECHNICAL EXPERT SUBMITTED SUBSEQUENTLY, AS THE MATTER HAD TO BE GIVEN FINALITY. HE FURTHER CONTENDED THAT IN THE CASE OF AIR DEVELOPERS ONLY A FEW FLATS WERE FOUND TO BE OF MORE THAN 1500 SQ.FT. HENCE, WHEREAS IN THE PRESENT CASE, ALL THE FLATS MEASURED ON SAMPLE BASIS WERE FOUND TO HAVE A BUILT UP AREA OF MORE THAN 150 0 SQ.FT. HENCE, THIS DECISION WAS NOT OF ANY HELP TO THE ASSESSEE. 11. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUT HORITIES BELOW. 12. IT IS NOTED THAT THE ASSESSEE IS ENGAGED IN THE CON STRUCTION OF HOUSES. AT THE IMPUGNED HOUSES HAVE BEEN CONSTRU CTED IN THREE PHASES HAVING DIFFERENT DIMENSIONS AND DESIGNS. THE A.O. HAS, HOWEVER, TAKEN THE MEASUREMENT PHYSICALLY ONLY OF O NE CATEGORY OF HOUSES AND THAT TOO HAS BEEN CARRIED OUT BY NON-TEC HNICAL STAFF, ALTHOUGH THE DEPARTMENT CAN UTILIZE THE SERVICES OF TECHNICAL PERSONNEL FOR THIS PURPOSE. THUS, AT THE VERY OUT-S ET, WE ARE OF THE OPINION THAT SAMPLE ADOPTED BY THE ASSESSING OFFICE R IS NOT REPRESENTATIVE OF WHOLE OF THE HOUSING PROJECT AND, THEREFORE, THE 9 VERY BASIS AS SUCH ACTION OF A.O. IS FLAWED. IT IS FURTHER NOTED THAT EVEN THE MEASUREMENT OF THESE FLATS, NAMELY, A/6 HA S BEEN REVISED BY THE DEPARTMENT, ITSELF, WHICH SHOWS THAT THE ME ASUREMENT OF SAMPLE FLATS HAS ALSO NOT BEEN DONE IN A SCIENTIFIC MANNER. THE OTHER FACT, WHICH IS IMPORTANT IS THAT THE A.O. ALS O TOOK THE HELP OF TECHNICAL EXPERT AND EVEN AS PER HIS REPORT AFTER T AKING INTO CONSIDERATION, THE LOCAL BY- LAWS, THE AREA OF CERT AIN FLATS MEASURED BY THE DEPARTMENT IS LESS THAN 1500 SQ.FT. AND THE A.O. HAS NOT GIVEN ANY COGNIZANCE TO THIS FACT WHICH MAKES THE A PPROACH OF A.O. UNJUSTIFIED. WE FURTHER FIND THAT WHATEVER EXPLANATIONS/CLARIFICATIONS/OBJECTIONS HAVE BEEN RA ISED BY THE ASSESSEE SUBSEQUENT TO THE MEASUREMENT DONE BY THE DEPARTMENT, THE SAME HAVE BEEN REJECTED IN A SUMMAR ILY MANNER MERELY FOR THE REASON THAT DURING THE COURSE OF PHY SICAL MEASUREMENT REPRESENTATIVE OF THE ASSESSEE WERE PRE SENT AND IT ALSO SIGNED THE MEASUREMENTS TAKEN BY THE DEPARTME NT. IN OUR OPINION, THIS APPROACH OF THE A.O., WHO IS A JUDICI AL OFFICER IS NOT JUSTIFIED, BECAUSE BEFORE MAKING ADDITION OR REJECT ING A GENUINE CLAIM OF THE ASSESSEE, IT IS THE BOUNDEN DUTY OF TH E A.O. TO DEAL WITH THE OBJECTIONS OF THE ASSESSEE. WE ARE FURTHER UNAB LE TO UNDERSTAND WHY THE A.O. DID NOT DO THE RE-VERIFICATION EXERCIS E TO FIND OUT THE CORRECT MEASUREMENT. WE ALSO FIND THAT AS PER THE L D. CIT DR, THE SALE CONSIDERATION IS DIFFERENT WITH REFERENCE TO D IFFERENT FLATS AND, THEREFORE, THERE MUST BE DIFFERENT SIZES. IN OUR OP INION, THIS FACT RATHER SUPPORTS THE CLAIM OF THE ASSESSEE, BECAUSE THIS AGAIN GOES TO SHOW THAT SAMPLE TAKEN BY THE DEPARTMENT IS NOT THE REPRESENTATIVE ONE. THUS, ON THE BASIS OF ABOVE FAC TS ITSELF, THE ACTION OF THE A.O. IS NOT CORRECT IN LAW. 13. HAVING STATED SO, NOW WE SHALL DEAL WITH OTHER ASP ECTS. ON THE ASPECT OF NATURE OF PROVISIONS OF SECTION 80 IB(14)(A),WE FIND THAT IT IS A SETTLED PROPOSITION OF LAW THAT WHEN A PARTICULAR TERM IS DEFINED BY AN AMENDMENT, WHICH RESULTS INTO INCREAS E/LEVY OF CIVIL LIABILITY, THE SAME HAS TO BE CONSIDERED AS THE SUB STANTIVE ONE, HENCE PROSPECTIVE. THE JUDICIAL DECISIONS CITED BY THE ASSESSEE ALSO SUPPORT THIS VIEW. ACCORDINGLY, WE REJECT THE CONTE NTION OF THE REVENUE THAT THE PROVISIONS OF SECTION 80IB(14)(A) ARE OF RETROSPECTIVE NATURE. THIS VIEW LEADS US TO ANOTHER QUESTION I.E. IN THE ABSENCE OF ANY SPECIFIC TERM IN THE ACT HOW THA T TERM SHOULD BE INTERPRETED. IN THIS REGARD, IT IS ALSO A SETTLED P RINCIPLE THAT SOME COMMON SENSE APPROACH OR DICTIONARY MEANING IF THE TERM IS OF GENERAL NATURE SHOULD BE FOUND OUT OR IF THE TERM I S OF TECHNICAL NATURE, THEN THE DEFINITION OF SUCH TERM USED IN OT HER LAWS SHOULD BE TAKEN INTO CONSIDERATION. ACCORDINGLY, WE HOLD T HAT THE MEANING OF TERM BUILT UP AREA PRIOR TO INSERTION OF DEFIN ITION CLAUSE IN THE ACT HAS TO BE FOUND OUT AS PER THE LOCAL LAW I.E. R ULES AND REGULATIONS OF BHOPAL MUNICIPAL CORPORATION AS WELL AS FROM M.P. 10 BHOOMI VIKAS RULES AND AS A CONSEQUENCE THEREOF, TH E BUILT UP AREA OF SUCH FLATS IS UNDISPUTEDLY LESS THAN THE SPECIFI ED LIMIT. HENCE, THE ASSESSEE, IN OUR OPINION, IS ELIGIBLE FOR DEDUCTION U/S 80IB(10). IN THIS VIEW OF THE MATTER, THERE REMAINS NO QUESTION FOR ANY PRO-RATA DEDUCTION. HOWEVER, WE CONSIDER IT PERTINENT TO STA TE THAT IT IS BENEFICIAL PROVISION AND, THEREFORE, IT SHOULD BE I NTERPRETED IN A LIBERAL MANNER AND IN CASE IT IS NECESSARY THEN THE ASSESSEE CAN BE GRANTED PRO RATA DEDUCTION. IN THIS REGARD, WE ARE FURTHER OF THE VIEW THAT IF THE LEGISLATOR DID NOT WANT TO GIVE AN Y PRO-RATA DEDUCTION, IT COULD HAVE BEEN PROVIDED BY THE LEGI SLATOR SPECIFICALLY THAT IF ONE HOUSE WAS FOUND TO BE HAVING BUILT UP A REA ON THE GROUND OF SPECIFIED LIMIT, THEN THE ASSESSEE WOULD NOT BE ENTITLED FOR ANY DEDUCTION U/S 80IB(10). IN THIS VIEW OF THE MATTER, WE DISMISS ALL THE GROUNDS RAISED BY THE REVENUE. 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 15. NOW, WE SHALL TAKE UP ASSESSEES CROSS OBJECTION, W HEREIN THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. C IT(A) IN REJECTING ITS CLAIM FOR DEDUCTION U/S 80IB IN RESPECT OF THRE E SAMPLE HOUSES PHYSICALLY MEASURED BY THE DEPARTMENT. 16. THE FACTS HAS ALREADY BEEN NARRATED AS ABOVE AND HA VE NO NECESSITY TOBE REPEATED AGAIN. HOWEVER, HE DREW OUR ATTENTION TO THE FINDING OF THE LD. CIT(A) WHEREIN THE LD. CIT(A ) HAD ACCEPTED THAT THE AREA OF THESE FLATS WAS ALSO LESS THAN THE SPECIFIED LIMIT, HENCE, THE LD. CIT(A) SHOULD HAVE ACCEPTED THE CLAI M OF THE ASSESSEE IN TOTO. 17. THE LD. CIT DR, ON THE OTHER HAND, PREFERRED TO REL Y ON THE ORDER OF THE LD. CIT(A) ON THIS ASPECT. 18. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUT HORITIES BELOW. 19. IT IS NOTED THAT THE LD. CIT(A) HAS OBSERVED IN THE FINDINGS REPRODUCED HEREINBEFORE THAT THE MEASUREMENT OF DUP LEX FLAT TYPE A/1 AND TYPE A/2 AS PER THE BHOOMI VIKAS RULES, 198 4, WAS LESS THAN 1500 SQ.FT. AND THE ASSESSEE HAS COMPLIED WITH ALL OTHER CONDITIONS AND, INSPITE OF THAT THE LD. CIT(A) HAS GRANTED ONLY PRO- RATA DEDUCTION. WE FURTHER FIND THAT THE LD. CIT(A) HAS NOT GIVEN ANY SPECIFIC FINDINGS ON THE LEGAL CONTENTIONS RAISED B Y THE ASSESSEE, WHICH RESULTS INTO AN INFERENCE THAT THE LD. CIT(A) HAS NOT ACCEPTED 11 THE PLEA OF ASSESSEE REGARDING APPLICABILITY OF LOC AL RATES TO COMPUTE BUILT UP AREA. HOWEVER, SINCE WE HAVE ACCEP TED THE LEGAL CONTENTIONS RAISED BY THE ASSESSEE IN THIS REGARD, HENCE, WE FIND NO REASON NOT TO GRANT A DEDUCTION THEREON U/S 80IB(10 ). ACCORDINGLY, WE ACCEPT THIS GROUND OF THE CROSS OBJECTION FILED BY THE ASSESSEE AND DIRECT THE A.O. TO GRANT DEDUCTION U/S 80IB AS CLAIMED BY THE ASSESSEE. 20. IN THE RESULT, THE CROSS OBJECTION STANDS ALLOWED. 21. TO SUM UP, THE REVENUES APPEAL IS DISMISSED AND CR OSS OBJECTION IS ALLOWED. 3.1 IF THE FACTS OF THE PRESENT APPEAL ARE KEPT IN JUXTAPOSITION WITH THE ORDER MENTIONED HEREINABOVE, UNDISPUTEDLY, IN THE QUANTUM APPEAL OF THE CASE OF THE ASSESSEE, THE ADD ITION WAS DELETED BY THE TRIBUNAL AND NO CONTRARY DECISION WA S PRODUCED BEFORE US BY EITHER SIDE. WE ARE OF THE VIEW THAT W HERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER, ON THE BASI S OF WHICH, PENALTY FOR CONCEALMENT WAS LEVIED, ARE DELETED, TH ERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY FOR CONCEAL MENT, CONSEQUENTLY, NO PENALTY SURVIVES AND THE SAME IS L IABLE TO BE CANCELLED BECAUSE WHEN THE VERY BASIS FOR LEVYING T HE PENALTY IS NO MORE IN EXISTENCE, THERE IS NO QUESTION OF PE NALTY U/S 271(1) OF THE ACT. OUR VIEW IS FORTIFIED BY THE DE CISION FROM HONBLE APEX COURT IN THE CASE OF K.C. BUILDERS VS. ACIT (265 12 ITR 562) (SC). THE TRIBUNAL IN THE AFORESAID ORDER HAS ALREADY CONSIDERED THE ISSUE BY FOLLOWING VARIOUS JUDICIAL PRONOUNCEMENTS. IN VIEW OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS, WE FIND NO MERIT IN THE APPEAL OF T HE REVENUE, CONSEQUENTLY, THE STAND OF THE LD. FIRST A PPELLATE AUTHORITY IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRES ENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT T HE CONCLUSION OF THE HEARING ON 22.2.2012. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22.2.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYS!