The ITO, Ward-2(5), Baroda V. M/s. Shree Jala Construction, Baroda

ITA 3220/AHD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60588 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-07-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOPCHAD
• Section: 80IB

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.3220/AHD/2011 ( & ' & ' & ' & ' / / / / ASSESSMENT YEAR : 2007-08) THE ITO WARD-2(5) BARODA & & & & / VS. M/S.SHREE JALA CONSTRUCTION POOJAN TENAMENTS B/H.PANSHEEL HOSTEL NR.DARBAR CHOKDI, BARODA ( '# ./)* ./ PAN/GIR NO. : ABBFS 4877 K ( (+ / // / APPELLANT ) .. ( ,-(+/ RESPONDENT ) (+ . '/ APPELLANT BY : SHRI ROOPCHAD, SR.D.R. ,-(+ / . ' / RESPONDENT BY : SHRI MANISH J.SHAH &0 / #/ // / DATE OF HEARING : 10/07/2012 12' / # / DATE OF PRONOUNCEMENT : 13/07/2012 '3/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FR OM THE ORDER OF LEARNED CIT(APPEALS)-II, BARODA DATED 14.10.2011 AN D THE EFFECTIVE GROUND IS GROUND NO.1; REPRODUCED BELOW:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(APPEALS) ERRED IN DIRECTING THE ASSESSIN G OFFICER TO ALLOW THE DEDUCTION U/S.80IB(10) R.W.S.80IB(1) OF T HE INCOME-TAX ACT ON PROFIT DERIVED FROM SALE OF UNUTILIZED FSI, WITHOUT APPRECIATING THAT THIS PROFIT IS NOT AN ELEMENT OF PROFITS DERIVED FROM THE BUSINESS ACTIVITY OF DEVELOPMENT AND CONST RUCTION OF THE HOUSING PROJECT RELATING TO THE SALE OF TENEMENTS. ITA NO. 3220/AHD/2011 ITO VS. M/S.SHREE JALA CONSTRUCTION ASST.YEAR - 2007-08 - 2 - 2. AN ASSESSMENT WAS MADE U/S.143(3) OF THE ACT DA TED 30/11/2009 ACCORDING TO WHICH THE ASSESSEE-FIRM WAS STATED TO BE IN THE BUSINESS OF CONSTRUCTION OF A HOUSING PROJECT. AO HAS MADE AN ELABORATE DISCUSSION AND THEREAFTER HE HAS CONCLUDED THAT THE LAND DID N OT BELONG TO THE ASSESSEE-DEVELOPER AND THAT THE APPROVAL BY THE LOC AL AUTHORITY FOR THE CONSTRUCTION OF THE SAID HOUSING PROJECT WAS NOT IN THE NAME OF THE ASSESSEE AND THAT THE BENEFICIAL OWNERSHIP WAS ALSO NOT IN THE NAME OF THE ASSESSEE, HENCE THE ASSESSEE DID NOT HAVE THE EXCLU SIVE DOMAIN OVER THE PROJECT. AFTER ASSIGNING THESE REASONS, AO HAS HELD THAT THERE WAS INFRINGEMENT OF THE PROVISIONS AS PRESCRIBED U/S.80 IB(10) OF IT ACT. AN ANOTHER REASON FOR THE DISALLOWANCE AS STATED BY TH E AO WAS THAT ALTHOUGH THE CONSTRUCTION ACTIVITY WAS CARRIED OUT BY THE ASSESSEE BUT WITHOUT FULLY UTILIZING THE PERMISSIBLE FLOOR SPACE INDEX (FSI). RESULTANTLY, THE CLAIM OF DEDUCTION U/S.80IB(10) WA S REJECTED. 3. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY AND LD.CIT(A) HAS CONSIDERED THE REQUISITE CONDITION AS PRESCRIBED U/S.80IB(10) AND ALLOWED THE CLAIM IN THE FOLLOWIN G MANNER:- 3.3. I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTH ORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFIC ER. THE DECISION OF THE HONBLE ITAT IN M/S.SHAKTI CORPORAT ION AND OTHERS AND THE GUIDELINES LAID DOWN HAS ALSO BEEN C ONSIDERED. FOR THE YEAR UNDER CONSIDERATION, FOLLOWING THE ABO VE MENTIONED JUDGEMENTS OF HON'BLE AHMEDABAD ITAT, THE CLAIM OF THE APPELLANT FOR DEDUCTION U/S 80IB(10) IS ALLOWED, SU BJECT TO THE ASSESSING OFFICER FINDING THAT THE SITUATION HAS NO T CHANGED AND THE ASSESSEE PASSES THE TEST LAID DOWN IN THE CASE OF M/S.SHAKTI CORPORATION AND OTHERS, THIS YEAR TOO. THE ASSESSI NG OFFICER SHALL LOOK INTO THE AGREEMENT ENTERED INTO BY THE ASSESSE E WITH THE LANDOWNER(S) AND DECIDE WHETHER THE ASSESSEE HAS IN FACT PURCHASED THE LAND FOR A FIXED CONSIDERATION FROM T HE ITA NO. 3220/AHD/2011 ITO VS. M/S.SHREE JALA CONSTRUCTION ASST.YEAR - 2007-08 - 3 - LANDOWNER(S) AND HAS DEVELOPED THE HOUSING PROJECT AT ITS OWN COST AND RISKS INVOLVED IN THE PROJECT. IN CASE TH E ASSESSING OFFICER FINDS THAT PRACTICALLY THE LAND HAS BEEN BO UGHT BY THE DEVELOPER AND DEVELOPER HAS ALL DOMINANT CONTROL OV ER THE PROJECT AND HAS DEVELOPED THE LAND AT HIS OWN COST AND RISKS, THE ASSESSING OFFICER SHALL ALLOW THE DEDUCTION TO THE ASSESSEE U/S.80IB(10). IN CASE THE ASSESSING OFFICER FINDS THAT THE DEVELOPER HAS ACTED ON BEHALF OF THE LANDOWNER AND HAS GOT A FIXED CONSIDERATION FROM THE LANDOWNER FOR THE DEVE LOPMENT OF THE HOUSING PROJECTS, THE ASSESSEE SHALL NOT BE ALLOWED DEDUCTION U/S.80IB(10). 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT THE CONDITIONS AS PRESCRIBED U/S.80IB(10) AS A LSO DISCUSSED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF RADHE DE VELOPERS 341 ITR 403 (GUJ.) THE ASSESSEE HAS FULFILLED THE PRESCRIBE D CONDITIONS. MOREOVER, IN ASSESSEES OWN CASE IN AY 2004-05 ITAT B BENCH AHMEDABAD IN AN ORDER BEARING ITA NO.371/AHD/2008 ORDER DATED 25 /04/2008 (TITLED AS ITO VS. M/S.SHREE JALA CONSTRUCTION CO.) HAS DE CIDED THE ISSUE IN ASSESSEES FAVOUR AS PER THE FOLLOWING PARAGRAPHS:- 5. LEARNED DR IN THE WRITTEN SUBMISSION CONTENDS T HAT RATIO LAID DOWN IN THE CASE OF RADHE DEVELOPERS AND OTHERS IS NOT APPL ICABLE TO THE FACTS OF PRESENT CASE AND SALIENT FEATURES OF THE FACTS AS E XISTED IN RADHE DEVELOPERS DECISION ARE AS UNDER: I) THERE IS NO AGREEMENT TO SALE IN FAVOUR OF THE ASSESSEE AS EXISTED IN THE CASE OF RADHE DEVELOPERS AND OTHERS. II) THERE IS NO EVIDENCE THAT SALE CONSIDERATION IS PAI D TO LAND OWNER BY THE ASSESSEE AS EXISTED IN THE CASE OF RAD HE DEVELOPERS & OTHERS. III) THE LAND OWNERS HAVE SOLD THE PIECES OF LAND TO UNI T HOLDERS DIRECTLY AND THE ASSESSEE HAD ACTED MERELY AS A CON FORMITY PARTLY. IV) THE ASSESSEE FIRM HAS ENTERED INTO CONSTRUCTION AGR EEMENT WITH THE UNIT HOLDERS AND THUS IT ACTED AS A CONTRACTOR. ITA NO. 3220/AHD/2011 ITO VS. M/S.SHREE JALA CONSTRUCTION ASST.YEAR - 2007-08 - 4 - V) THE ASSESSEE FIRM HAS NEVER SOLD THE HOUSE TO THE U NIT HOLDERS. VI) THERE IS NO EVIDENCE TO INDICATE THAT ALL APPROVALS PERMISSION WERE OBTAINED BY THE ASSESSEE FIRM AS AN AGENT OR A POWER OF ATTORNEY OF LAND OWNERS. 6. FURTHER ATTENTION WAS DRAWN TO PARA 18 OF ITAT O RDER AND CONTENDED THAT THE SAME IS FOUNDATION OF THE DECISION WHICH R EADS AS UNDER: 18. FROM THE CLAUSES OF THE DEVELOPMENT AND CONSTR UCTION AGREEMENTS AS WELL AS AGREEMENT FOR SALE, BOTH DATE D 18/05/2000, EXTRACTED ABOVE WE OBSERVE THAT, THESE TWO AGREEMEN TS EFFECTIVELY TRANSFER TO THE ASSESSEE-FIRM ALL THE RIGHTS OF DEVELOPMENT AND CONSTRUCTION AND TO DEAL WITH THE LAND FOR A CONSIDERATION PAYABLE WITH IN A STIPULATED TIME; THAT THE ASSESSEE HAD BEEN PUT IN POSSESSION OF THE LAND ON THE TERMS AND CONDITIONS AS MENTIONED IN THESE TWO AGREEMENTS; TH AT THE ASSESSEE-FIRM HAS ALSO PAID CONSIDERATION OF RS.56 LACS DURING TH E TWO FINANCIAL YEARS; I.E. 2000-01 & 2001-02; THAT THE ASSESSEE-FIRM HAS TO OBTAIN NECESSARY APPROVALS FROM THE LOCAL AUTHORITIES; I.E. BMC ON B EHALF OF THE LAND-OWNERS AND ALL THE EXPENSES FOR SUCH PURPOSES ARE TO BE IN CURRED BY THE ASSESSEE; THAT THE ASSESSEE-FIRM HAS ENGAGED THE FIRM OF ARCH ITECT AND ALSO INCURRED EXPENSES TOWARDS THE CHARGES PAYABLE TO CORPORATION , ETC. FOR OBTAINING THE APPROVALS; THAT EVEN FROM THE BOOKS OF ACCOUNT, IT IS NOTICED THAT FOR OBTAINING THE APPROVAL, THE ASSESSEE-FIRM HAS PAID THE DEVELOPMENTAL CHARGES TO VARIOUS REGULATING AGENCIES, I.E. VUDA, BMC AND GEB (GUJARAT ELECTRICITY BOARD), ETC.; AND THAT THESE E XPENSES ARE INCURRED BY THE ASSESSEE-FIRM AND THE ASSESSING OFFICER HAS BRO UGHT OUT THE COMPLETE DETAILS YEAR-WISE IN HIS ASSESSMENT ORDERS AT PAGE NO.5 READING AS UNDER:- SR.NO. PARTICULARS FINANCIAL YEAR AMOUNT (RS.) 1. VMC CHARGES PAID TO VADODARA MUNICIPAL CORPORATION 2000-01 65,532/- 2. VMC CHARGES PAID TO VADODARA MUNICIPAL CORPORATION 2001-02 31,116/- 3. VUDA CHARGES PAID TO VADODARA DEVELOPMENT AUTHORITY 2000-01 46,508/- 4. ELECTRICITY CHARGES PAID TO GEB FOR GETTING ELECTRICITY CONNECTION TO ITS PROJECT 2000-01 1,99,944/- AND FURTHER TO PARA 20 AS UNDER: ITA NO. 3220/AHD/2011 ITO VS. M/S.SHREE JALA CONSTRUCTION ASST.YEAR - 2007-08 - 5 - ON THESE UNDISPUTED FACTS WE HAVE TO EXAMINE THE PROVISIONS OF THE SECTION 80IB(10) OF THE ACT. 7. IT IS CONTENDED THAT THE FACTS OF IMPUGNED APPEA L ARE NOT SIMILAR WITH THE FACTS OF RADHE DEVELOPERS, AND IN FACT LEADS TO AN ADVERSE INFERENCE AGAINST THE ASSESSEE AND DESERVES REJECTION OF THE ASSESSEE S CLAIM UNDER SECTION 80IB. 8. WE FIND THAT AHMEDABAD TRIBUNAL IN THE CASE OF R ADHE DEVELOPERS (SUPRA) DECIDED THE ISSUE ABOUT ALLOWABILITY OF DED UCTION UNDER SECTION 80IB(10) IN FAVOUR OF THE ASSESSEE. THE RELEVANT O BSERVATIONS AND FINDINGS OF ITAT, AHMEDABAD IN THE ABOVE CASE AS CONTAINED IN P ARAS-28, 29, 45 AND 63 TO 65 OF THE ORDER ARE AS UNDER: 28. THE CONTENTION OF THE REVENUE AUTHORITIES THAT TO CLAIM DEDUCTION U/S.80IB(10), THERE IS A CONDITION PRECED ENT THAT THE ASSESSEE MUST BE OWNER OF THE LAND ON WHICH HOUSING PROJECT IS CONSTRUCTED HAS NO FORCE. WE DO NOT FIND ANY SUCH C ONDITION AS APPEARING IN THE PROVISIONS OF THE SECTION EXTRACTE D ABOVE. A PLAIN READING OF SUB-SECTION (10) OF SEC.80IB REVEA LS AND MAKES IT EVIDENT THAT THERE MUST BE AN UNDERTAKING DEVELO PING AND BUILDING A HOUSING PROJECT AS APPROVED BY A LOCAL A UTHORITY. IT DOES NOT HAVE ANY FURTHER CONDITION THAT SUCH DEVEL OPMENT AND BUILDING OF THE HOUSING PROJECT SHOULD ALSO BE ON A LAND OWNED BY AN ASSESSEE UNDERTAKING. IT MIGHT BE TRUE THAT T HE LAND BELONGS TO THE PERSONS WHO HAS ENTERED INTO AN AGRE EMENT WITH THE ASSESSEE TO DEVELOP AND BUILD HOUSING PROJECT B UT ON A PERUSAL OF THE AGREEMENT AS NARRATED ABOVE, IT IS E VIDENT THAT THE DEVELOPMENT AND BUILDING WORK HAS BEEN CARRIED OUT BY THE ASSESSEE IN PURSUANCE OF A TRIPARTITE AGREEMENT AND IT IS NOT BY THE LAND OWNERS. THEREFORE, THE MERE FACT THAT THE LAND-OWNER AND THE UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT, ARE TWO DIFFERENT ENTITIES WOULD NOT MAKE ANY DIFFE RENCE. THE DEDUCTION WOULD BE ELIGIBLE TO THE PERSON WHO IS DE VELOPING AND BUILDING HOUSING PROJECT AND NOT TO THE MERE OWNER THEREOF. 29. IT IS ALSO THE CASE OF THE REVENUE THAT THE AS SESSEE WAS A MERE CONTRACTOR DEVELOPING AND BUILDING HOUSING PRO JECT AND THEREFORE, IT COULD NOT BE A DEVELOPER. WE FAIL TO UNDERSTAND AS TO HOW SUCH A SITUATION COULD EMERGE. A PERSON WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON IS NO DOUBT A CONTRA CTOR. HAVING ENTERED INTO AGREEMENTS WITH LANDOWNERS FOR DEVELOP MENT AND BUILDING THE HOUSING PROJECT, WAS OBVIOUSLY A CONTR ACTOR BUT IT ITA NO. 3220/AHD/2011 ITO VS. M/S.SHREE JALA CONSTRUCTION ASST.YEAR - 2007-08 - 6 - DOES NOT DEROGATE THE ASSESSEE FOR BEING A DEVELOPE R, AS WELL. THE TERM CONTRACTOR IS NOT ESSENTIALLY CONTRADICTOR Y TO THE TERM DEVELOPER. AS STATED ABOVE IT IS THE UNDERTAKING TH AT DEVELOPS OR BUILDS THE HOUSING PROJECT THAT IS ENTITLED TO DEDU CTION IRRESPECTIVE OF THE FACT WHETHER THAT IT IS THE OWN ER OR NOT OR WHETHER IT IS THE CONTRACTOR THEREOF. THE REQUIREME NT FOR CLAIMING DEDUCTION IS THAT SUCH AN UNDERTAKING MUST DEVELOP AND BUILD HOUSING PROJECT, BE IT ON THEIR OWN LAND OR ON THE LAND OF OTHERS AND FOR WHICH A TRIPARTITE AGREEMENT HAS BEEN ENTERED INTO FOR DEVELOPMENT AND BUILDING HOUSING PROJECT; OR BE THE ASSESSEE A CONTRACTOR FOR DEVELOPING AND BUILDING H OUSING PROJECT OR AN OWNER OF THE LAND. 45. THEREFORE, LOOK AT FROM ANY ANGLE, WE ARE OF TH E CONSIDERED OPINION, THAT TO CLAIM DEDUCTION FOR DEV ELOPING AND BUILDING HOUSING PROJECT, IT IS NOT NECESSARY THAT ASSESSEE MUST BE AN OWNER OF THE LAND AND IT WOULD BE SUFFICIENT IF HE HAS AN UNDERTAKING DEVELOPS AND BUILD HOUSING PROJECT. THE ASSESSEE IS ALSO THE OWNER OF THE PROJECT, THOUGH THE TITLE DOE S NOT VEST IN IT. 9. AS REGARDS ALLOWING DEDUCTION UNDER SECTION 80IB (10) IN RESPECT OF PROFITS ATTRIBUTABLE TO SALE OF UNUTILIZED FSI, THE MATTER ALSO STANDS COVERED BY THE DECISION OF THE TRIBUNAL AND THE TRIBUNAL VIDE PARAGRAPH-63, 64 AND 65 HELD THAT THERE IS NO REQUIREMENT AS TO THE FSI UND ER THE SCHEME OF THE PROVISIONS OF SECTION 80IB(10) AND IN ANY CASE, ASS ESSEE HAD NOT SOLD FSI PLOT, EVEN IF THE UNUTILIZED FSI RIGHTS ARE AVAILABLE WIT H THE ASSESSEE, IT IS THE ONLY WAY LEFT OUT OF UTILIZING SUCH UNUTILIZED FSI IS TO MAKE CONSTRUCTION ON TOP OF THE GROUND FLOOR, WHICH IS ALREADY BEING SOLD TO PR OSPECTIVE BUYERS, AND THIS CONCEPT OF ELEMENT OF UNUTILIZED FSI SOLD IS IMAGIN ARY AND BASED ON SURMISES AND CONJECTURES. PARAGRAPH-63 TO 65 OF THE ABOVE TR IBUNAL ORDER IS REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 63. IN THE CASES OF M/S.DEEP DEVELOPERS (ITA NOS.2 444/ AHD/2006), M/S.DHARA DEVELOPERS (ITA NO. 2445/AHD/ 2006), M/S.PRAMUKH ASSOCIATES (ITA 2824/AHD/2006), M/S. AA SHIYANA DEVELOPERS (ITA 2816/AHD/2006), M/S.BHAKTI CONSTRUC TION (ITA NO 2818/AHD/2006), M/S.SUPER CONSTRUCTION (ITA NO 2820/AHD/2006), M/S.SUBHAM ASSOCIATES (ITA NO 2821/AHD/20060, M/S.AVANI TRADERS (ITA NO 2822/ AHD /2006), M/S. KISMAT CONSTRUCTION (ITA NO 2823/AHD/ 20060, M /S. RUTU DEVELOPERS (ITA NO 2856/AHD/2006) AND M/S.SAHJANAND DEVELOPERS (ITA NO 672/AHD/2007), A QUESTION HAS AL SO BEEN ITA NO. 3220/AHD/2011 ITO VS. M/S.SHREE JALA CONSTRUCTION ASST.YEAR - 2007-08 - 7 - RAISED BY THE REVENUE THAT THE PROFIT EARNED BY THE ASSESSEE ARE NOT FOR DEVELOPING AND BUILDING HOUSING PROJECT ALO NE BUT FOR THE SALE OF EXTRA FSI, WHICH HAS NOT BEEN UTILIZED FOR DEVELOPING AND BUILDING HOUSING PROJECT. ON A PERUSAL OF THE P ROVISIONS OF SEC.80IB(10), WE FIND THAT IT IS NOT MANDATORY REQU IREMENT TO FULLY UTILIZE PERMISSIBLE FSI; THERE IS NO CONDITIO N AS TO FSI UNDER THE SCHEME OF THE PROVISIONS OF SEC.80IB(10) OF THE ACT; THERE IS NO QUESTION OF SELLING UNUSED FSI TO THE I NDIVIDUAL BUYER FOR EACH PROJECT AND ALSO THERE IS NO QUESTION OF C ALCULATING THE PROFITABILITY ON FSI AS THE SAME HAS NOT BEEN CONTE MPLATED U/S.80IB(10) OF THE ACT. ON VERIFICATION OF THE SAL E DEED EXECUTED IN FAVOUR OF BUYERS OF THE RESIDENTIAL HOUSES, IT I S CLEAR THAT THE ASSESSEE HAD MADE THIS SALE DEED FOR SALE OF PLOT O F LAND. FURTHER, ON VERIFICATION OF DEVELOPMENT AGREEMENT W ITH THE LANDOWNER, WE FIND THAT HERE ALSO THE REFERENCE IS WITH RESPECT TO LAND AREA ONLY. IN BOTH THE DOCUMENTS ASSESSEE H AD NOT ACQUIRED RIGHTS AND HAS NOT RELINQUISHED RIGHTS WIT H REFERENCE TO FSI. FURTHER, ON VERIFICATION OF APPROVED MAP FOR E ACH UNIT IS WITH REFERENCE TO BUILT UP AREA ONLY. UNDER THE CIR CUMSTANCES, THE ASSESSEE HAS NEVER DEALT WITH FSI, BOTH IN TERM S OF ACQUIRING RIGHTS IN THE LAND AND FOR RELINQUISHMENT OF SUCH R IGHTS IN THE LAND. THE CALCULATION GIVEN IN APPROVED PLAN IS OF MAXIMUM PERMISSIBLE FSI AND BY GIVING SUCH CALCULATION IT I S NOT MADE MANDATORY BY ANY PROVISIONS OF ANY ACT TO MAKE CONS TRUCTION TO THE FULLEST EXTENT OF MAXIMUM PERMISSIBLE FSI. THE UTILIZATION OF FSI BY THE BUILDER DEVELOPER DEPENDS ON MANY FACTOR S LIKE SITUATION OF PLOT, THE TYPE OF LOCALITY, AND THE TY PE OF BUYERS AFFORDABILITY. IT IS THE MARKET FORCE, WHICH DETERM INES THE AVERAGE SIZE OF THE RESIDENTIAL UNIT A COMMERCIAL DECISION, WHICH PREVAILS FOR THE PURPOSE OF CARRYING OUT THE BUSINESS AND FOR MAKING RESIDENTIAL UNITS AND NOT THE PERMISSIBL E MAXIMUM FSI. IT WOULD ALSO BE IMPOSSIBLE TO CONSTRUCT ANY H OUSING UNIT AS PER THE PROVISIONS OF SEC.80IB(10) BY UTILIZING THE MAXIMUM FSI. 64. THE AO STATES FURTHER THAT IN THE APPROVED LAY OUT PLAN, THE LOCAL AUTHORITY HAD PERMITTED TO BUILD RESIDENT IAL UNIT OF LESSER AREA THAN THE MAXIMUM PERMISSIBLE BUILT UP A REA ON THE LAND AND THEREFORE THE ASSESSEE HAD CARRIED OUT ONL Y PARTIAL CONSTRUCTION OF THE AVAILABLE FSI VIS--VIS THE ENT IRE PLOT OF LAND AVAILABLE FOR DEVELOPMENT WITH THE ASSESSEE. WE FIN D THAT THE APPROVED FSI IN REGARD TO THE UNITS CONSTRUCTED HAS BEEN FULLY UTILIZED AS PER THE APPROVED PLAN OF THE LOCAL AUTH ORITY, NAMELY ITA NO. 3220/AHD/2011 ITO VS. M/S.SHREE JALA CONSTRUCTION ASST.YEAR - 2007-08 - 8 - THE FSI IS FULLY UTILIZED , THE FSI ACTUALLY PASSE D AND PERMITTED BY THE AUTHORITIES FOR EACH PROJECT. 65. THE AO OBSERVES ASSESSEE HAS SOLD UNUTILIZED FS I WITHOUT INVOLVING ANY PROCESS OF DEVELOPMENT AND CONSTRUCTI ON, WHICH IS THE PRIMARY CRITERION REQUIRED TO BE SATISFIED FOR THE PURPOSE OF THE CLAIM OF DEDUCTION UNDER SECTION 80IB OF THE AC T HAVE NO FORCE; THAT THE ASSESSEES HAVE CLAIMED DEDUCTION UN DER SECTION 80IB OF THE ACT FOR THE PROFIT DERIVED DURING THE Y EAR UNDER CONSIDERATION FROM THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF A HOUSING PROJECT WHICH THOUGH INCL UDES PROFIT EARNED FROM SALES OF UNUTILIZED FSI OF THE HOUSING PROJECT ALSO AND THAT THE OTHER PART OF UNUTILIZED FSI RELATING TO THE APPROVED UNITS HAVE NOT BEEN CONSTRUCTED OR DEVELOPED BUT BE ING SOLD DIRECTLY, ALTHOUGH AS A UNRESTRICTIVE BUNDLE OF RIG HTS ATTACHED WITH THE SALE OF LAND PLOT. AS AFORESAID, THERE IS NO REQUIREMENT AS TO THE FSI UNDER THE SCHEME OF PROVISIONS OF SEC . 80IB(10). IN ANY CASE THE ASSESSEE HAS NOT SOLD FSI OF PLOT, EVE N IF THE UNUTILIZED FSI RIGHTS ARE AVAILABLE WITH THE ASSESS EE, IT IS THE ONLY WAY LEFT OUT OF UTILIZING SUCH UNUTILIZED FSI IS TO MAKE CONSTRUCTION ON TOP OF THE GROUND FLOOR, WHICH IS A LREADY BEING SOLD TO PROSPECTIVE BUYERS. WITH THIS SO CALLED UNU TILIZED FSI RIGHTS, IF THE ASSESSEE WISHES TO MAKE FURTHER CONS TRUCTION THEN IT WILL PRACTICALLY IMPOSSIBLE AS THE ASSESSEE IS LEFT WITH NO EASEMENT RIGHTS FOR MAKING CONSTRUCTION OR ACCESS T O GO ON TOP OF THE GROUND FLOOR AS THE GROUND LEVEL RIGHTS ARE ALREADY SOLD TO PROSPECTIVE CUSTOMER. IN THIS SITUATION IT WOULD BE PRACTICALLY IMPOSSIBLE TO MAKE EITHER CONSTRUCTION OR TO GIVE A CCESS FOR CONSTRUCTION MADE. THUS, THE CONCEPT OF ELEMENT OF UNUTILIZED FSI SOLD IS IMAGINARY AND BASED ON SURMISES AND CON JUNCTURES. 10. THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE BEING SIMILAR, RESPECTFULLY FOLLOWING AFORESAID ORDER OF TRIBUNAL, WE UPHOLD ORDER OF CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE ON BOTH COUNT S. 5. RESPECTFULLY FOLLOWING THE ABOVE ORDERS AND SINC E THE LD.CIT(A) HAS APPRECIATED THE CONDITIONS LAID DOWN IN RADHE D EVELOPERS(SUPRA), THEREFORE, WE FIND NO FORCE IN THE GROUND RAISED BY THE REVENUE, HENCE DISMISSED. ITA NO. 3220/AHD/2011 ITO VS. M/S.SHREE JALA CONSTRUCTION ASST.YEAR - 2007-08 - 9 - 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. SD/- SD/- ( .. ) ( ) '# ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 13/ 07 /2012 ..&, .&../ T.C. NAIR, SR. PS '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4'/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. 6 / CONCERNED CIT 4. 6() / THE CIT(A)-II, BARODA 5. 49: ,& , , / DR, ITAT, AHMEDABAD 6. :; <0 / GUARD FILE. '3& '3& '3& '3& / BY ORDER, -4 , //TRUE COPY// = == =/ // / ) ) ) ) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DIRECT-DICTATION ON COMPUTER .. 10.7.12 (C OPIED MATTER OF IT 48/A/10) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11.7.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S13.7.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13.7.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER