DCIT 15(3), MUMBAI V. SHAH BUILDERS & DEVELOPERS, NAVI MUMBAI

ITA 3195/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48752 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2005-2006
• Appeal Filed On: 23-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS VANDANA SAGAR
• Assessee Lawyers: A K GHOSH
• Section: 80IB; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J MUMBAI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI T.R. SOOD T.R. SOOD T.R. SOOD T.R. SOOD (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) ITA NO. 3195 & 3196/MUM/2010 ASSESSMENT YEAR-2005-06 & 2006-07 THE DY. CIT, CIR. 15(3), MATRU MANDIR, 1 ST FLOOR, TARDEO ROAD, MUMBAI-400 007 VS. MS/. SHAH BUILDERS & DEVELOPERS , 323-329, ARENJA CORNER, PLOT NO. 71, SECTOR 17, VASHI, NAVI MUMBAI-400 705 PAN-AATFS 0744C (APPELLANT) (RESPONDENT) APPELLANT BY: MRS. VANDANA SAGAR RESPONDENT BY: SHRI A.K. GHOSH O R D E R O R D E R O R D E R O R D E R PER ASHA VIJAYARAGHAVAN (JM) PER ASHA VIJAYARAGHAVAN (JM) PER ASHA VIJAYARAGHAVAN (JM) PER ASHA VIJAYARAGHAVAN (JM) THESE TWO APPEALS PREFERRED BY THE REVENUE ARE DIRECT ED AGAINST THE ORDERS PASSED BY THE LD. CIT(A)-26 FOR TH E ASSESSMENT YEARS 2005-06 & 2006-07. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRU CTION AND DEVELOPING AND BUILDING HOUSING CUM- COMMERCIAL PROJECT AS A REGULAR COURSE OF ACTIVITIES AND DERIVES INCOME THERE FROM. DURING THE FINANCIAL YEAR 2003-04 APPELLANT HAD UNDERTAKEN FOR DEVELOPING AND BUILDING A PROJECT VIZ. SHAH ARCADE IN NAVI MUMBAI. THIS PROJECT WAS APPROVED BY THE CITY & INDUSTRIAL DEVELOPMENT CORPOR ATION (CIDCO) OF MAHARASHTRA VIDE CIDCO/BP/ATPO/322 DATED 26.3.2004. THIS PROJECT OF COMMERCIAL-CUM-RESIDENTIAL BUILDING WAS APPROVED ON P LOT NO. 4 & 5 IN SECTOR 6 AT KHARGHAR, NAVI MUMBAI. THERE WERE 2 AL LOTMENT OF COMMERCIAL-CUM-RESIDENTIAL PLOTS, ONE IS OF ALLOTMENT NO. CIDCO/MM-II/ ITA NO. 3195/M/2010 2 CLT/KHR/35 DATED 27.08.2003/28.08.2003 AND SECOND ON E IS CIDCO/MM-II/CLT/KHR/36 DATED 27.08.2003/28.08.2003. THE APPELLANT HAS COMPUTED PROFIT @ 8% ON THE COST OF CONSTRUCTION I.E. WIP OF RS. 11,84,75,650/- IN RESPECT OF THE PROJECT SHAH ARCADE ON ESTIMATION BASIS AND HAS SHOWN ESTIMATED PROFIT OF RS 94,78,052/- W HILE FILING THE RETURN OF INCOME APPELLANT HAD CLAIMED DEDUCTION U/ S 80IB (10 AT RS 86,63,749/- AFTER EXCLUDING THE PROFIT ATTRIBUTABLE TO COMMERCIAL AREA OF THE PROJECT. THE LD. AO IN ASSESSMENT ORDER APPEALED AGAINST HAS DISALLOWED APPELLANTS CLAIM OF DEDUCTION ON THE GROU ND THAT THE COMMERCIAL AREA OF THE PROJECT EXCEEDS 5% OF AGGREG ATE BUILT-UP AREA AND EVEN MORE THAN 2000 SQ.FT. AGAINST THE AMENDMENT PROVISION OF SECTION 80IB (10) BY THE FINANCE ACT (2) 2004 W. E. F. 01.04.2005. 3. ACCORDING TO THE AO THE DEDUCTION U/S 80IB(10) OF THE ACT IS ALLOWABLE TO AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY. WITH THE VERY SAME SO CIAL OBJECTIVE, THE LOCAL AUTHORITIES HAVE ALSO BEEN EMPOWERED TO APPROV E THE PROJECTS UNDER VARIOUS CATEGORIES WITH CONDITIONS PRESCRIBED O VER THE COMMERCIAL CONTENT IN SUCH PROJECTS. TO BE ELIGIBLE T O CLAIM THE DEDUCTION U/S 80IB (10), ALL THE CONDITIONS LAID DOWN IN THE SECTION ARE REQUIRED TO BE FULFILLED. IN CASE, ANY ONE OR MORE C ONDITIONS PRESCRIBED, ARE NOT FULFILLED THE PROJECT SHALL NOT BE ELIGIBLE FOR THE CLAIM OF SAID DEDUCTION. CLAIMING DEDUCTION U/S 80IB(10) WITHOUT F ULFILLING EACH AND EVERY CONDITION WOULD AMOUNT TO GET THE UNJUST ENRIC HMENT AT THE COST OF THE EXCHEQUER WITHOUT FULFILLING OBLIGATION TO A CHIEVE THE SOCIAL OBJECTIONS AS INTENDED BY THE LEGISLATURE. THEREFORE, SUCH PROJECTS WHICH DO NOT FULFILL THE PRESCRIBED CONDITIONS, CANNO T AND MUST NOT BE ALLOWED TO CLAIM DEDUCTION U/S 80IB(10). FURTHER, AO HAS POINTED OUT THE PROVISION OF SECTION 80IB(10) REQUIRES FULFILLMENT OF THE FOLLOWING CONDITIONS. ITA NO. 3195/M/2010 3 I. THE UNDERTAKING COMMENCES THE DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT ON OR AFTER 01.10.199 8 AND WHERE THE HOUSING PROJECT IS APPROVED BEFORE 01.04.20 04, COMPLETES SUCH CONSTRUCTION ON OR BEFORE 31.03.2008. II. THE PROJECT IS ON THE SIZE OF PLOT OF LAND HAS A MINIM UM AREA OF ONE ACRE. III. THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT UP AREA OF 1 000 SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WIT HIN THE CITY OF DELHI/MUMBAI OR WITHIN 25 KMS. FROM THE MUNI CIPAL LIMITS OF THE CITIES OR 1500 SQ.FT. AT ANY OTHER PLACE . IV. THE BUILT UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED FIVE PERCENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR 2000 SQ.FT. WHICHEVER IS LESS. 4. ACCORDING TO THE AO, OUT OF ABOVE, CONDITION NO. 4 IS NOT FULFILLED BY THE ASSESSEE AS THE TOTAL COMMERCIAL BUILT-UP AREA IS MORE THAN 5% OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJEC T AND ALSO MORE THAN 2000 SQ.FT AS PRESCRIBED U/S 80IB(10). HENCE, IN V IEW OF THIS CLEAR ELIGIBILITY CONDITIONS FOR CLAIMING DEDUCTION U/S 80 IB(10) OF THE ACT, THE PROJECT UNDER CONSIDERATION HAS FAILED THE MANDATORY PARAMETERS. SINCE THE BASIC CRITERIA FOR THE DEDUCTION IS NOT FUL FILLED. ALL THE OTHER ARGUMENTS OF THE ASSESSEE ARE FUTILE AND DO NOT SUPPORT I TS CAUSE. ACCORDING TO AO DEDUCTION U./S 80IB(10) IS ALLOWABLE ONLY TO AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS. A HOUSING PROJECT HAS TO BE A RESIDENTIAL PROJECT HAVING RESIDE NTIAL UNITS FOR THE PEOPLE TO STAY OR RESIDE. COMMERCIAL ESTABLISHMENTS OR SHOPS CANNOT BE TERMED AS HOUSING PROJECTS. THE CONDITIONS LAID DO WN BY THE LOCAL AUTHORITIES APPROVING THE HOUSING PROJECTS ALSO LIMIT T HE COMMERCIAL AREA CONTENT IN SUCH PROJECTS TO A MAXIMUM 5% OF THE TOTAL BUILT-UP AREA. THE PROJECTS HAVING COMMERCIAL AREA IN EXCESS OF 5% ARE CONSIDERED TO BE COMMERCIAL PROJECTS AND ARE NOT TER MED AS HOUSING PROJECTS AT ALL. IN THE ASSESSEES CASE, THE COMMERCIAL AR EA IS IN EXCESS OF 8% OF THE TOTAL BUILT-UP AREA THIS IS ASCERTAINABL E FROM THE APPROVED PLANS DETAILS SUBMITTED AND FROM THE FACT THAT THE ASSESSE E HAS EXCLUDED THE PROFITS TO THE EXTENT OF 8.59% OF THE T OTAL PROFITS, BEING ITA NO. 3195/M/2010 4 ATTRIBUTABLE TO COMMERCIAL CONTENT. THUS, THE ASSESSEE S UNDERTAKING IS NOT AN ELIGIBLE UNDERTAKING U/S 80IB(10) AS IT IS NO T DEVELOPING AND CONSTRUCTING ELIGIBLE HOUSING PROJECT AS PER THE CONDI TIONS LAID DOWN IN SECTION 80IB(10)AND EVEN AS PER THE CONDITIONS LAID DO WN BY THE LOCAL AUTHORITY APPROVING THE PROJECT IS NOT FULFILLED . H ENCE NO DEDUCTION U/S 80IB(10) OF THE ACT IS ALLOWABLE IN THE CASE OF THE A SSESSEE. FURTHER AO HAS MENTIONED THAT APPELLANT HAS EXCLUDED 8.59% OF TH E PROFITS ATTRIBUTABLE TO OR DERIVED FROM COMMERCIAL AREA WHI CH IS NOT ALLOWABLE AS THERE IS NO PROVISION U/S 80IB(10) TO ALLOW PARTIAL OR PROPORTION DEDUCTION. ACCORDING TO THE AO THE VITAL POINT IS EI THER AN UNDERTAKING ELIGIBLE FOR DEDUCTION OR IT IS NOT. IT IS NO THAT AN YONE OR TWO OF THE CONDITIONS ARE TO BE FULFILLED BUT ALL THE CONDITIO NS HAVE TO BE COMPLIED FOR CLAIMING SUCH DEDUCTIONS. 5. FURTHER DURING APPELLATE PROCEEDINGS, THE AO HAS R EPRESENTED THE CASE AND HAS SUBMITTED A LETTER NO. DY. CIT 15(3) /SHAH BUILDERS & DEVELOPERS /09-10 DATED 23.6.2009 POINTING OUT THE F ACT THAT ASSESSEE HAS GOT PERMISSION FOR RESIDENTIAL CUM-COMMERCIAL BUIL DING AND NOT FOR THE HOUSING PROJECT VIDE COPY OF LETTER DATED 26 .03.2004 AND 22.02.2002 OF ADDITIONAL TOWN PLANNING OFFICER ISSUED TO THE ASSESSEE AND LETTER DATED 28.8.2003 ISSUED BY MARKETING MANAGE R, CIDCO. ACCORDING TO THE SUBMISSION OF LD. AO THE ALLOTMENT OF PLOTS AS WELL AS APPROVAL GRANTED TO THE APPELLANT IS NOT FOR HOUSING PROJECT BUT FOR RESIDENTIAL CUM COMMERCIAL BUILDING. FURTHER, IT IS SU BMITTED BY THE AO, THAT PROJECT OF THE APPELLANT WAS NOT ILLEGIBLE HOUSI NG PROJECT U/S 80IB(10) AS IT PLAN WAS APPROVED IN THE YEAR 2002 AND THEREFORE PRIOR TO 1.4.2004 THERE WAS NO PROVISION FOR COMMERCIAL ARE A IN HOUSING PROJECT. THE CLAUSE OF COMMERCIAL AREA OF 2000 SQ.FT OR 5% OF THE AREA WAS BROUGHT ONLY FOR THE PROJECT, WHICH HAS BEEN APP ROVED ON OR AFTER 1.4.3004. AO HAS FURTHER REFERRED TO THE PART OF BUD GET SPEECH OF FINANCE MINISTER AND MEMORANDUM EXPLAINING THE PROVI SION OF FINANCE ITA NO. 3195/M/2010 5 BILL 99 AND ARGUED THAT INTENTION OR THE PRIMARY MO TIVE OF THE LEGISLATURE IS TO PROVIDE THE INCENTIVES TO THE HOUSING SECTOR AND ALSO PROVIDING HOUSING FACILITY TO THE MIDDLE CLASS INVESTOR S WISHING TO PURCHASE OR DWELLING IN IT. INCENTIVES ARE ALSO GIVEN TO THE FINANCE SECTOR TO PROVIDE SUFFICIENT FINANCE TO THE RESIDENTIA L PROJECTS. ACCORDING TO THE AO, THE SPEECH OF FINANCE MINISTER REFERRED TO DWELLING IN IT AND NOT THE COMMERCIAL SHOPS. HOWEVER, AFTER 1.4.2005 WITH A VIEW TO GIVE VALIDITY OF SUCH PROJECTS, PROVISI ON FOR COMMERCIAL AREA WAS ALSO INCLUDED TO THE EXTENT OF 5% OF THE TOT AL AREA OF RESIDENTIAL UNIT OR 2000 SQ.FT. WHICHEVER IS LESS. 6. AS REGARDS DENIAL OF CLAIM OF DEDUCTION U/S 80IB(10 ), IT IS CONTENDED THAT CLAIM HAS BEEN RIGHTLY MADE AS PROJECT IS THE HOUSING PROJECT DULY APPROVED BY THE LOCAL AUTHORITY I.E. C IDCO, IT IS FURTHER SUBMITTED THAT APPROVAL LETTER DATED 26.03.2004 REVE ALS THAT IN THE PROJECT, THERE ARE RESIDENTIAL FLATS AS WELL AS SOME SHO PS AND THIS PROJECT IS SITUATED IN RESIDENTIAL ZONE ONLY WHICH IS B EING GOVERNED BY DEVELOPMENT CONTROL ACT, 1991. IT IS AN ADMITTED P OSITION THAT IN RESIDENTIAL ZONE, COMMERCIAL OR INDUSTRIAL BUILDING C ANNOT BE APPROVED BY THE LOCAL AUTHORITY. THE PROJECT SHAH ARCADE IS SITUATED EXCLUSIVELY IN THE RESIDENTIAL ZONE AND HENCE IS TO BE TREATED AS RESIDENTIAL HOUSING PROJECT. BUT IN THE RESIDENTIAL HOUSING PROJE CTS CONVENIENCE SHOPPING / EASEMENT SHOPPING ARE ALLOWED BY THE LOCAL AUTHORITY TO TAKE CARE TO THE NEEDS OF THE OCCUPANTS THIS TERM IS MANDATORY, CONSIDERING THE REQUIREMENTS OF THE LOCAL RESIDENTS, TH E LOCAL AUTHORITY APPROVES THE PLANS OF HOUSING PROJECT WITH SOME CONVENI ENCE SHOPPING AREA IN THE SAID BUILDING., BUT THE PROJECT REMAINS A HOUSING PROJECT ONLY, WHICH INCLUDES SOME AREA OF CONVENIENCE SHOPPING . ACCORDING TO THE LD. AR A HOUSING PROJECT IN ORDER TO BE A SELF SU FFICIENT WOULD REQUIRE TO SUPPORT/ PROVIDE THE AMENITIES SUCH AS BANK ING, POST OFFICE, MARKET, SHOPS, SCHOOLS, ETC. KEEPING ALL THESE FACTORS I N VIEW ONLY THE ITA NO. 3195/M/2010 6 LOCAL AUTHORITY GRANTS THE APPROVAL. SINCE PROJECTS WERE APPROVED AS HOUSING PROJECTS, THOUGH INCLUDE SOME INCONVENIENT SHOP PING, SATISFY THE REQUIREMENT OF SECTION U/S 80IB(10). IT IS FURTHE R SUBMITTED THAT PROVISION OF LAW U/S 80IB(10) DOES NOT SAY THAT THERE C ANNOT BE ANY CONVENIENT SHOPPING IN A HOUSING PROJECT. THE ONLY RE QUIREMENT OF THE SECTION IS THAT RESIDENTIAL UNIT SHOULD HAVE THE MAXIMU M BUILT UP AREA OF ONE THOUSAND SQUARE FEET. THEREFORE, SOME SHOPPIN G AREA IN THE HOUSING PROJECT DOES NOT DISENTITLE THE ASSESSEE TO CLAIM THE D4EDUCTION U/S 80IB(10). ALL THE OTHER CONDITIONS OF THE SECTION ARE DULY SATISFIED AND THERE IS NO DISPUTE ABOUT THAT. IT IS FURTHER SUBMITTED THAT HOUSING PROJECT IS NOT DEFINED IN THE SECTION 8 0IB(10), BUT IT IS DEFINED BY SECTION 80HHBA. THEREFORE, LD AR HAS REPR ODUCED THE DEFINITION OF THIS SECTION AS UNDER: HOUSING PROJECT MEANS A PROJECT: I. CONSTRUCTION OF ANY BUILDING, ROAD, BRIDGE OR OTHER STRUCTURE IN ANY PART OF INDIA. II. THE EXECUTION OF SUCH OTHER WORK (OF WHATEVER NATUR E) AS MAY BE PRESCRIBED. THUS, ACCORDING TO THE LD. AR HOUSING PROJECT IS HA VING WIDE MEANING AND EVEN INCLUDES NOT ONLY CONSTRUCTION OF BUILDING BUT ALSO INCLUDES THE CONSTRUCTIONS OF ROADS, B RIDGES OR ANY OTHER STRUCTURE. IT IS ARGUED THAT APPELLANT IS EN GAGED IN CONSTRUCTION AND DEVELOPMENT OF HOUSING PROJECT. IT IS FURTHER ARGUED THAT THE ISSUE AS TO WHAT IS A HOUSING PROJECT WAS CONSIDERED BY THE CENTRAL BOARD OF DIRECT TAXES IN RE SPONSE TO A QUERY RAISED BY THE MAHARASHTRA CHAMBER OF HOUSING IND USTRY. THE QUERY RAISED BY THE CHAMBER WAS FOR THE CLARIFICA TION REGARDING THE HOUSING PROJECT WHERE THE RESIDENTIAL B UILDING INCLUDES SOME CONVENIENT SHOPPING. IN RESPONSE TO THIS C BDT VIDE ITS LETTER DATED 04.05.2001 BEARING NO. F.NO. 205/03/2001/ITA II REPLIED AS UNDER: ..WITH REGARD TO QUERY REGARDING DEFINITION OF HO USING PROJECT IT IS CLARIFIED THAT ANY PROJECT WHICH HAS BEEN APPRO VED BY A LOCAL AUTHORITY AS A HOUSING PROJECT SHOULD BE CONSIDERED ADE QUATE FOR THE PURPOSE OF SECTION 10(23G) AND 80IB(10) ITA NO. 3195/M/2010 7 7. THE BOARD CLEARLY STATES THAT A HOUSING PROJECT IS ONE, WHICH IS APPROVED BY THE LOCAL AUTHORITY AS A HOUSING PROJECT, WHICH INCLUDES RESIDENTIAL FLATS AS WELL AS CERTAIN SHOPS. THEREFORE OUR PROJECT IS HOUSING PROJECTS IN TERMS OF CBDT CIRCULAR AND THEREFO RE QUALIFY FOR DEDUCTION U/S 80IB(10) FOR WHOLE OF THE PROFITS INCLU DING THE PROFIT OF SHOPS WHICH ARE PART AND PARCEL OF THE HOUSING PROJECT . THEREFORE QUESTION OF ANY DISALLOWANCE OF THE DEDUCTION DOES NO T ARISE. LD AR HAS REFERRED TO THE DECISION OF HONBLE MUMBAI ITAT THE CASE OF HARSHAD P. DOSHI (APPEAL NO. ITA/2305/M/2006) DATED 28.02.2007 WHEREIN THE FULL AMOUNT OF DEDUCTION WAS GRANTED. T HE FACTS OF THAT CASE WERE THAT THE HOUSING PROJECTS HAD SOME SHOPS AND IN WHICH THE PROPORTIONATE DISALLOWANCE FOR PROFIT ATTRIBUTABLE T O SHOPS WAS MADE BY THE AO WHILE GRANTING DEDUCTION U/S 80IB(10). THE ITAT ALLOWED THE FULL CLAIM OF THAT ASSESSEE. FURTHER THE LD. AR HAS REF ERRED TO THE HONBLE SUPREME COURT IN THE CASE OF BAJAJ TEMPPO LT D., VS CIT 196 ITR 188 HAS HELD THAT SINCE ALL THE PROVISIONS INDICATE D FOR PROMOTING GROWTH HAS TO BE INTERPRETED LIBERALLY THE RESTRICTIO N ON IT HAS TO BE CONSTRUED SO AS TO ADVANCE THE OBJECTIVE OF THE PROMOT ION AND NOT FRUSTRATE THE SAME. SIMILAR WERE THE VIEWS IN THE CASES CIT VS MADHO JATIA 105 ITR 179 & CIT VS VEGETABLE PRODUCTS 188 I TR 192. IT IS ALSO SETTLED POSITION IN LAW THAT WHERE PROVISION IN STATUTE ADMITS TWO INTERPRETATIONS, A VIEW WHICH IS FAVOURABLE TO THE SUBJECT (ASSESSEE) MUST BE ADOPTED. THE RESTRICTION OF MAXIMUM COMMERCIA L AREA IN THE HOUSING PROJECT OF 2000 SQ.FT. OR 5% OF THE AGGREGATE BUILT-UP AREA, WHICHEVER IS LESS, HAS BEEN BROUGHT ON THE STATUTE BOOK W.E.F. 01.04.2005 WHICH IS APPLICABLE FOR THE PROJECTS APPRO VED ON OR AFTER 01.04.2005. IN APPELLANTS CASE THE PROJECT WAS APPRO VED PRIOR TO 01.04.2005 WHEN THERE WAS NO RESTRICTION OF COMMERCI AL AREA WAS IN FORCE. THE HONOURABLE ITAT IN THE CASE OF HARSHAD P. DOSHI HAS ACCEPTED THE ARGUMENT OF THE ASSESSEE, WHICH IS DISCUSSED IN PARA 8 ITA NO. 3195/M/2010 8 OF THE ORDER. FINALLY, IT IS ARGUED THAT SO LONG AS T HE HOUSING PROJECT WITH SOME SHOPS IS APPROVED BY THE LOCAL AUTHORITY AS A HOUSING PROJECT IT IS A SUFFICIENT COMPLIANCE OF THE SECTION 8 0IB(10) FOR THE HOUSING PROJECTS APPROVED PRIOR TO 01.04.2005. AS SUCH PROJECT IS WELL WITHIN THE PROVISIONS AND CLAIM OF DEDUCTION FOR THE WHOLE OF THE PROFITS OF THE PROJECTS IS IN ORDER AND NO DEPARTURE THERE-FR OM IS WARRANTED AT ALL. 8. FURTHER THE LD. AR HAS SUBMITTED A REJOINDER DATE D NIL THROUGH DAK ON 08. 07.2009 REITERATING THE ABOVE REPRESENTAT IONS AND ARGUMENTS WITH FURTHER REFERENCE OF DECISION OF HONB LE PUNE SPECIAL BENCH OF ITAT IN THE CASE OF BRAHMA ASSOCIATES VS JCIT ( 009) 122 TTJ (PUNE) (SB) 433 AND HAS STATED THAT CONTENTION OF TH E LD AO IS DEVOID OF ANY MERIT AND LATEST DECISION APPLIES TO THE APPELL ANTS CASE. IN THIS REJOINDER LD. AR HAS SUBMITTED AS UNDER: IN THE INSTANT CASE, THE APPELLANT GOT THE PERMISSION FROM CIDCO FOR CONSTRUCTION OF RESIDENTIAL CUM COMMERCIAL BUILDING ON PLOT NOS. 4 & 5, SECTOR -6, KHARGHAR, NAVI MUMBAI VI DE LETTER DATED 26.03.2004, WHICH WAS SUBSEQUENTLY AMENDED VIDE LETTER DATED 22.02.2005 FOR CONSTRUCTION OF RESIDENTIAL CUM COMMERCIAL BUILDING. IN THE INSTANT CASE, THE APPELLANT CONSTRUC TED RESIDENTIAL CUM COMMERCIAL, PROJECT COMPRISING OF SEV EN BUILDINGS ON PLOT NOS. 4 & 5, SECTOR-6, KHARGHAR, NAV I MUMBAI. THE TOTAL AREA OF THE PLOTS IS 7225.05 SQ.MTRS, WHICH IS APPROXIMATELY 1.78 ACRES THE COMMERCIAL PLOT AREA I S 724.30 SQ.MTRS, WHICH IS 10% OF THE TOTAL PLOT AREA. THE RE SIDENTIAL PLOT AREA IS 6500.75 SQ. MTRS, WHICH IS 90% OF THE TOTAL PL OT AREA. THE RESIDENTIAL PLOT AREA OF 6500.75 SQ.MTRS. IS APPROXIM ATELY 4.60 ACRES. SINCE THE PROJECT WAS APPROVED PRIOR TO 01.04.2004 I .E. PRIOR TO INSERTION OF CLAUSE (D) BY THE FINANCE ACT, 2004, THE COMMERCIAL AREA UP TO 10% OF THE TOTAL BUILT-UP ARE A IS PERMISSIBLE IN VIEW OF THE DECISION OF THE SPECIAL BEN CH. SINCE THE TOTAL COMMERCIAL AREA IS WITHIN THE PERMISSIBLE LI MIT OF 10%, THE APPELLANT IS ENTITLED TO GET DEDUCTION IN RESPECT OF THE ENTIRE PROFITS OF THE PROJECT. ITA NO. 3195/M/2010 9 WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THAT THE PLOT AREA OF THE RESIDENTIAL PORTION OF THE PROJECT ON A STANDALONE BASIS IS MORE THAT ONE ACRE AND THEREFORE, THE APPELLA NT IS ENTITLED TO GET DEDUCTION U/S 80IB(10) SINCE ALL OTHE R CONDITIONS LAID DOWN IN CLAUSES (A), (B) & (C) ARE FULFILLED. FOR YOUR HONOURS KIND PERUSAL AND CONSIDERATION WE AR E ENCLOSING A PAPER BOOK COMPRISING OF APPROVAL/ SANCTIO N, OCCUPANCY CERTIFICATE, APPROVED PLANS ETC., WHICH SHO WS THAT THE APPELLANT IS ENTITLED TO GET DEDUCTION U/S 80IB(1). 9. AFTER RECEIPT OF REPLY A SHOW CAUSE NOTICE NO. CIT(A) XV/SB & D/2009-10 DATED 15.07.2009 WAS ISSUED AND SERVED UPON A SSESSEE. IN RESPONSE TO THE SAME LD AR HAS SUBMITTED REPLY DATED 25. 8.2009 STATING THAT CIDCO HAS ALLOTTED COMMERCIAL-CUM-RESIDEN TIAL PLOT NO. 4 & 5 BY ALLOTMENT LETTER DATED 28.8.2003 AND SUBSEQUE NTLY APPELLANT HAS EXECUTED THESE AGREEMENT LEASE AGREEMENT WITH CI DCO IN RESPECT OF RESIDENTIAL-CUM-COMMERCIAL PLOT NOS. 4 & 5, SE CTOR-6 AT KHARGHAR, NAVI MUMBAI VIDE LEASE AGREEMENT DATED 16. 2.2004 IN RESPECT OF AGGREGATE LAND AREA OF 7,225.05 SQ. MTRS. THE SAID LEASE AGREEMENT IS DULY REGISTERED. THE COPY OF RECEIPT FOR REGISTRATION, PAYMENT OF STAMP DUTY PROOF, POSSESSION LETTER AND LEASE AGREEMENT ARE PLACED AT PAGE NOS. 17 TO 38 OF THE PAPER BOOK. THEREAFTER, CIDCO PASSED ASSESSMENT ORDER NO. 758/2003-04 REGISTER NO. 08 PA GE NO.758 VIDE LETTER NO. CIDCO/BP/ATPO/321 DATED 26.0 3.2004. AS PER ASSESSMENT ORDER, THE TOTAL PLOT AREA IS 7,225.05 SQ.MTR S. THE PLOT AREA FOR RESIDENTIAL USE IS 6,500.75 SQ.MTRS. WHICH IS EXACT LY 90% OF THE TOTAL PLOT AREA AND THE PLOT AREA FOR COMMERCIAL USE IS 724.30 SQ.MTRS, WHICH IS EXACTLY 10% OF THE TOTAL PLOT AREA. ON THE SAME DAY, CIDCO HAS GRANTED APPROVAL FOR DEVELOPMENT OF RESIDENTIAL -CUM- COMMERCIAL BUILDING ON PLOT NOS. 4 & 5, SECTOR-6 AT KHARGHAR, NAVI MUMBAI VIDE LETTER AND ASSESSMENT ORDER DATED 26.03. 2004 ISSUED BY CIDCO ARE PLACED AT PAGE NOS. 1 & 2 OF THE PAPER BOOK. AS PER THE ASSESSMENT ORDER DATED 26.03.2004, THE PERMISSIBLE FSI IS 1.5. AND ITA NO. 3195/M/2010 10 THEREFORE, PERMISSIBLE BUILT UP AREA IS 10,837.575 SQ. MTRS THE TOTAL COMMERCIAL BUILT-UP AREA IS 1,086.436 SQ.MTRS., WHICH IS EXACTLY 10% OF THE TOTAL PERMISSIBLE, BUILT UP AREA OF 10,837.575 S Q. MTRS. SIMILARLY, THE TOTAL RESIDENTIAL BUILT-UP AREA IS 9,751.139 SQ.