M/s. Shreenathji Construction, Baroda V. The Income tax Officer,Ward-2(5), Baroda

ITA 3224/AHD/2009

• Counselvise Citation: 322420514 RSA 2009
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 27-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 01-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A TIRKEY
• Keywords: Opportunity of being heard; Retrospective amendment; Competent authority
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 3224/AHD/2009 ASSESSMENT YEARS :2006-07 M/S. SHREENATHJI CONSTRUCTION BAL GOPAL, NEAR DARBAR CHAWKDI, OPP. PUSHPAK DUPLEX, MANJALPUR, VADODARA. V/S . I.T.O. WARD-2(5), BARODA PAN NO. AA JFM6852H (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI S.N. SOPARKAR, SR. ADV. WITH SHRI JAIMIN GANDHI, A.R. /BY RESPONDENT SHRI A. TIRKEY, SR. D.R. /DATE OF HEARING 2 7 .0 9 .2012 /DATE OF PRONOUNCEMENT 09.11.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEUE WH ICH HAS EMANATED FROM THE ORDER OF CIT(A)-II, BARODA, ORDER DATED 29 .09.2009 FOR A.Y. 2006-07. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER: 1. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LAW AND ON THE FACTS OF THE APPELLANT'S CASE IN ASSESSING TOTA L INCOME OF THE APPELLANT AT RS. 43,99,220/- INSTEAD OF RS.N IL RETURNED BY IT. ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 2 THE APPELLANT MOST HUMBLY SUBMITS THAT THE DISALLOW ANCES/ ADDITION MADE BY THE LEARNED INCOME TAX OFFICER IS ERRONEOUS BOTH ON FACTS OF THE CASE AS WELL IN LAW. THE APPELLANT FURTHER SUBMITS THAT THE INCOME RETURNED BY IT, IS THE CORRECT INCOME AND PRAYS THAT YOUR HONOUR BE PL EASED TO HOLD SO NOW AND DELETE THE ADDITION/DISALLOWANCE S MADE. 2. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LAW AND ON FACTS OF THE APPELLANT'S CASE IN DISALLOWING DEDUCT ION U/S 80-IB (10) OF THE I.T. ACT 1961 AMOUNTING TO RS.48, 99,220/- ON THE ERRONEOUS PLEA THAT THE APPELLANT IS NOT 'OW NER' OF SUBJECT LAND. THE APPELLANT MOST HUMBLY SUBMIT THAT BOTH ON FACTS OF THE CASE AS WELL AS IN LAW THE DEDUCTION U/S 80-IB (10) OF THE ACT IS ALLOWABLE SINCE ALL THE CONDITIONS LAID DOWN IN THAT SECTION ARE FULFILLED FOR GRANTING THE SAID DEDUCTI ON. IN VIEW THEREOF, THE APPELLANT PRAYS THAT YOUR HONO UR BE PLEASED TO HOLD SO NOW AND DELETE THE ADDITIONS MAD E. 3. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LAW AND ON FACTS OF THE APPELLANT'S CASE IN DISALLOWING DEDUCT ION U/S 80-IB (10) OF THE I.T. ACT 1961 AMOUNTING TO RS.48,99,220/- ON THE ERRONEOUS PLEA THAT THE AREA OF THE COMMERCIAL CONSTRUCTION IN THE HOUSING PROJECTS EX CEEDS THE LIMIT PRESCRIBED IN THE SAID SECTION. THE APPELLANT MOST HUMBLY SUBMIT THAT BOTH ON FACT S OF THE CASE AS WELL AS IN LAW THE DEDUCTION U/S 80-IB (10) OF THE ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 3 ACT IS ALLOWABLE SINCE ALL THE CONDITIONS LAID DOWN IN THAT SECTION ARE FULFILLED FOR GRANTING THE SAID DEDUCTI ON. IN VIEW THEREOF, THE APPELLANT PRAYS THAT YOUR HONO UR BE PLEASED TO HOLD SO NOW AND DELETE THE ADDITIONS MAD E. 4. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LAW AND ON FACTS OF THE APPELLANT CASE IN HOLDING THAT THE APP ELLANT HAS SOLD F.S.I. AND HAS EARNED PROFIT FROM IT. THE APPELLANT MOST HUMBLY SUBMIT THAT THE CONTENTIO N MADE BY THE LEARNED INCOME TAX OFFICER IS ERRONEOUS BOTH ON FACTS OF THE CASE AS WELL AS IN LAW SINCE THE AP PELLANT HAS NEITHER SOLD ANY F.S.I. NOR EARNED ANY INCOME F ROM THE SAME. IN VIEW OF THEREOF, THE APPELLANT PRAYS THAT YOUR H ONOUR BE PLEASED TO HOLD SO AND DIRECT THE LEARNED INCOME TA X OFFICER TO ALLOW THE DEDUCTION AS CLAIMED. 5. THE LEARNED INCOME TAX OFFICER HAS ERRED IN LAW AND ON FACTS OF THE APPELLANT CASE IN TAKING ALTERNATE PLE A THAT OUT OF TOTAL DEDUCTION CLAIMED U/S 80IB-(10), RS.39.27,168 /- IS DISALLOWABLE SINCE IT PERTAINS TO SALE OF F.S.I. THE APPELLANT MOST HUMBLY SUBMIT THAT BOTH ON FACTS OF THE CASE AS WELL AS IN LAW NO PART OF THE DEDUCTION CLA IMED U/S 80-B (10) OF THE ACT IS DISALLOWABLE SINCE THE APPE LLANT HAS NEITHER SOLD F.S.I. NOR EARNED ANY INCOME FROM THE SAME. IN VIEW OF THEREOF, THE APPELLANT PRAYS THAT YOUR H ONOUR BE PLEASED TO HOLD SO NOW AND DELETE THE ADDITIONS MAD E. ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 4 2. GROUND NO.1 IS GENERAL. THEREFORE, NO FINDING H AS BEEN GIVEN ON THIS GROUND. 3. GROUND NOS. 2 & 3 ARE AGAINST DISALLOWING THE DE DUCTION U/S.80IB(10) OF THE IT ACT AMOUNTING TO RS.48,99,220/- ON THE GRO UND THAT ASSESSEE IS NOT THE OWNER OF THE LAND AND COMMERCIAL CONSTRUCTION O F THE PROJECT VIOLATES THE CONDITIONS PRESCRIBED IN CLAUSE (D) OF SUBSECTION ( 10) OF SECTION 80IB OF THE IT ACT. THE FACTUAL MATRIX OF THE CASE IS THAT THE AS SESSEE CLAIMED DEDUCTION U/S.80IB(10) AT RS.48,99,220/- IN THE RETURN OF A.Y . 06-07 ON DEVELOPMENT AND BUILDING OF HOUSING PROJECT. THE LD. A.O. VERIFIED THE FACTS OF THE CASE. IT WAS FOUND THAT OWNERSHIP OF THE LAND WAS IN THE NAME OF SMT. KOKILABEN NARENDRABHAI DALWADI AND OTHERS WHO WERE THE OWNERS OF THE LAND. FURTHER PROFIT FROM THE HOUSING PROJECT ALSO INCLUDES THE P ROFIT FROM THE SALE OF F.S.I. WHICH HAD NOT BEEN UTILIZED BY THE ASSESSEE BUT SOL D BY HIM AS A COMPOSITE FACTOR CONSIDERED IN THE SALE OF THE TENEMENTS TO P ROSPECTIVE BUYERS. THE APPELLANT ALSO CLAIMED THE DEDUCTION U/S.80IB(10), EVEN COMMERCIAL CONSTRUCTION WAS MUCH MORE THAN THE LIMIT PRESCRIBE D IN CLAUSE (D) OF SUBSECTION (10) OF SECTION 80IB IS ALLOWABLE. THE LD. A.O. HAD GIVEN REASONABLE OPPORTUNITY OF BEING HEARD, ACCORDINGLY, THE ASSESSEES REPLY VIDE LETTER DATED 02.12.2008, WHICH HAS BEEN CONSIDERED BY THE A.O. BUT THE SAME HAD NOT BEEN FOUND CONVINCING TO HIM. AFTER GIVING DETAILED REASONING ON PAGE NOS.6 TO 20, THE LD. A.O. DID NOT ALLOW THE DE DUCTION U/S. 80IB(10) OF THE IT ACT. ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 5 4. THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A ), WHO HAS CONFIRMED THE ADDITION. SHE HAS ACCEPTED THE PRINCIPLE LAID DOWN IN CASE OF M/S. RADHE DEVELOPERS & OTHER VIDE ORDER IN ITA NO. 2482/AHD/2006 DATED 29.06.2007 AND M/S. SHAKTI CORPORATION ON OWNERSHIP AND PROFIT DERIVED ON SALE OF UNUTILIZED F.S.I. LD. CIT(A) HAS CONFIRMED THE ADD ITION ON THE GROUND THAT THE ASSESSEE HAD TO SATISFIED ALL THE CONDITIONS LAID D OWN IN SECTION 80IB(10) CUMULATIVELY. THE SECTION 80IB(10) WAS AMENDED W.E .F. 01.04.2005 FOR A.Y. 05-06. THERE WAS A RIDER IN CLAUSE (D) SUB-SECTION (10) OF SECTION 80IB THAT THE BUILT UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED [THREE] PER CENT OF THE AGGREGATE BUILT- UP AREA OF THE HOUSING PROJECT OR [TWO THOUSAND SQU ARE FEET, WHICHEVER IS HIGHER]. APPELLANTS CASE DID NOT FULFILL THE MAND ATORY CONDITION OF COMMERCIAL AREA. THE ASSESSEE WAS NOT ENTITLED FOR DEDUCTION U/S.80IB (10). THUS, THE CIT(A) CONFIRMED THE ACTION OF THE A.O. 5. NOW THE MATTER IS BEFORE US. LD. COUNSEL FOR TH E APPELLANT CONTENDED THAT THE A.O. IN ASSESSEES OWN CASE HAS ALLOWED TH E DEDUCTION U/S. 80IB(10) FOR A.Y. 05-06. HE PLACED THE COPY OF THE ASSESSME NT ORDER WHICH SHOWS THAT THE ASSESSEE HAD CLAIMED THE DEDUCTION 80IB(10) FOR A.Y. 05-06 AT RS.1,39,46,440/-, HAS BEEN ALLOWED FULL, BY RELYING OF THE CASE OF M/S. SHAKTI CORPORATION, FAQIR CHAND GULATI & BRAHMA ASSOCIATES VS. JCIT REPORTED IN [2011] 333 ITR 289 (BOM.). DURING THE YEAR, THE APPELLANT FURTHER ARGUED THAT THE COMMERCIAL AREA IN A.Y. 05-06 WAS ALSO HIGHER THAN LIMIT PRESCRIBED IN ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 6 CLAUSE (D) OF SUB-SECTION (10) OF SECTION 80IB. HE FURTHER RELIED UPON IN CASE OF MANAN CORPORATION VS. ACIT, CIR.-5 IN TAX APPEAL NO. 1053 OF 2011(GUJ.), WHEREIN THE AMENDED PROVISION U/S.80IB(10) HAS BEEN CONSIDERED BY THE HONBLE GUJARAT HIGH COURT AND AS HELD THAT THE AME NDED PROVISION IS NOT APPLICABLE ON PROJECT SANCTIONED BEFORE 01.04.2005 BY THE COMPETENT AUTHORITY AS ASSESSEES PROJECT WAS APPROVED IN 200 3 WHICH CAN BE VERIFIED FROM THE ORDER OF CIT(A) AT PAGE NO.30. FROM THE S IDE OF THE REVENUE, LD. D.R. FAIRLY CONCEDED THE FACT OF THE CASE. 6. WE HAVE PERUSED THE FACTS OF THE CASE, RIVAL SUB MISSION OF THE APPELLANT AND GONE THROUGH THE CASE LAWS CITED BY THE ASSESSE E. THE OBSERVATION MADE BY THE HONBLE GUJARAT HIGH COURT IN CASE OF MANAN CORPORATION VS. ACIT (SUPRA), WHICH IS AS UNDER: 34. ABOVE DISCUSSION CUMULATIVELY WHEN EXAMINED WI TH THE OBJECTIVES AND INTENT IT SOUGHT TO ACHIEVE IN BRING ING ABOUT THE SAID PROVISION OF SECTION 80IB(10), THIS AMENDED TA XING STATUTE REQUIRES TO BE INTERPRETED IN FAVOUR OF THE ASSESSE E RATHER THAN INSISTING UPON STRICT COMPLIANCE LEADING TO ABSURDI TY. 35. IT CAN BE ALSO HELD THAT THIS BEING A SUBSTANTI VE AMENDMENT AND NOT A CLARIFICATORY AMENDMENT, THE AM ENDMENT OF THIS NATURE CANNOT HAVE RETROSPECTIVE EFFECT. 36. RESULTANTLY, WE ANSWER THE QUESTIONS RAISED BEF ORE US IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. AFTER CONSIDERING THE FACTS OF THE CASE, WE HAVE CO NSIDERED VIEW THAT THE HONBLE GUJARAT HIGH COURT DECISION IN CASE OF MANAN CORPORATION VS. ACIT ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 7 (SUPRA), IS SQUARELY APPLICABLE. THEREFORE, WE ALLOW THE AP PEAL IN FAVOUR OF THE ASSESSEE. 7. GROUND NOS.4 & 5 ARE AGAINST HOLDING BY THE A.O. THAT PARTICULARLY PROFIT SHOWN BY THE ASSESSEE IS RELATED TO SHARE OF F.S.I. IS NOT INCOME FROM BUILDING ACTIVITY. THEREFORE, HE CALCULATED PROPORT IONATE PROFIT OF F.S.I. AT RS.39,27,168/-. THE A.O. OBSERVED ON PAGE NOS. 22 TO 24 THAT THE PERMISSION FOR CONSTRUCTION OF TENEMENT AND OTHER UNITS WERE G IVEN BY THE LOCAL AUTHORITY TO CONSTRUCT THE UNITS UTILIZING ONLY THE PART OF F ULL PERMISSIBLE F.S.I. THE PERMISSION WAS GIVEN TO THE ORIGINAL LAND OWNERS TO DEVELOP THE HOUSING PROJECTS AS PER APPROVED LAY OUT PLAN. IN THE APPR OVED LAY OUT PLAN, THE LOCAL AUTHORITY HAD PERMITTED TO BUILT RESIDENTIAL UNIT O F LESSER AREA THAN THE MAXIMUM PERMISSIBLE BUILT UP AREA ON THE LAND. THU S, THE ASSESSEE FIRM HAD CARRIED OUT ONLY PARTIAL CONSTRUCTION OF THE AVAILA BLE F.S.I. VIS--VIS THE ENTIRE PLOT OF LAND AVAILABLE FOR DEVELOPMENT WITH THE ASS ESSEE FIRM. ALTHOUGH THE APPROVED F.S.I. IN REGARD TO THE UNITS CONSTRUCTED HAD BEEN FULLY UTILIZED AS PER THE APPROVED PLAN OF THE LOCAL AUTHORITY. BUT THER E WAS A BALANCE F.S.I. AVAILABLE ON THESE PLOTS OF LAND FOR DEVELOPMENT AN D CONSTRUCTION HAD NOT BEEN UTILIZED FOR THE PURPOSE OF DEVELOPMENT AND CO NSTRUCTION OF THE PROJECTS. IT MEANS THE APPELLANT FIRM HAD TWO ASPECTS BUILT I NTO IT. ONE OF THEM IS THE CONSTRUCTION OF THE APPROVED UNITS AS BUILT BY ASSE SSEE FIRM AND WHICH ARE BEING SOLD TO THE PROSPECTIVE BUYERS. THE OTHER IS THE BUILT IN FAVOUR OF UNUTILIZED F.S.I. WHICH IS ALSO BEING SOLD BY ASSES SEE FIRM WITHOUT INVOLVING ANY PROCESS OF DEVELOPMENT AND CONSTRUCTION. THE APPELLANT HAD CLAIMED ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 8 DEDUCTION U/S. 80IB(10) WHICH INCLUDES PROFIT FROM THE BUILDING ACTIVITY AS WELL AS PROFIT FROM THE SALE OF UNUTILIZED F.S.I. THE A .O. HAD GIVEN REASONABLE OPPORTUNITY OF BEING HEARD ON PROFIT EARNED ON SALE OF UNUTILIZED F.S.I. THE APPELLANT HAD SUBMITTED VIDE LETTER DATED 02.12.200 8 DETAILS AND PROFITS ON SALE OF UNUTILIZED F.S.I. THE APPELLANT HAD CALCUL ATED PROFIT RELATABLE TO SALE OF F.S.I. UNUTILIZED AT RS.39,27,168/-. ACCORDINGLY, THE A.O. MADE A RIDER ON 80IB(10) DEDUCTION. 8. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ) WHO HAS ALLOWED THE APPEAL BY OBSERVING AS UNDER: 2.3.1 CONSIDERING THE DISCUSSION ABOVE, THE OTHER GROUND OF APPEAL REGARDING DEDUCTION ON UNUTILIZED FSI HAS AL SO BEEN COVERED BY THE AFORESAID DECISION OF ITAT, AHMADABA D, HENCE ADDITION MADE BY THE ASSESSING OFFICER ON THAT ISSU E ALSO DOES NOT SURVIVE. THE FINDINGS OF HONBLE ITAT, AHMADABAD, IN CASE OF M/S. RADHE DEVELOPERS ARE AS UNDER: '63.A QUESTION HAS ALSO BEEN RAISED BY THE REVENUE THAT THE PROFIT EARNED BY THE ASSESSEE ARE NOT FOR DEVELOPIN G AND BUILDING HOUSING PROJECT ALONE BUT FOR THE SALE OF EXTRA FSI , WHICH HAS NOT BEEN UTILIZED FOR DEVELOPING AND BUILDING HOUSING P ROJECT. ON A PERUSAL OF THE PROVISIONS OF SEC. 80IB(10). WE FIN D THAT IT IS NOT MANDATORY REQUIREMENT TO FULLY UTILIZE PERMISSIBLE FSI; THERE IS NO CONDITION AS TO FSI UNDER THE SCHEME OF THE PROVISI ONS OF SEC. 80IB(10) OF THE ACT; THERE IS NO QUESTION OF SELLI NG UNUSED FSI TO ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 9 THE INDIVIDUAL BUYER FOR EACH PROJECT AND ALSO THER E IS NO QUESTION OF CALCULATING THE PROFITABILITY ON FSI AS THE SAME HAS NOT BEEN CONTEMPLATED U/S 80IB(10) OF THE ACT. ON VERIFICAT ION OF THE SALE DEED EXECUTED IN FAVOUR OF BUYERS OF THE RESIDENTIA L HOUSES, IT IS CLEAR THAT THE ASSESSEE HAD MADE THIS SALE DEED FOR SALE OF PLOT OF LAND. FURTHER, ON VERIFICATION OF DEVELOPMENT AG REEMENT WITH THE LAND OWNER, WE FIND THAT HERE ALSO THE REFERENC E IS WITH RESPECT TO LAND AREA ONLY. IN BOTH THE DOCUMENTS A SSESSEE HAD NOT ACQUIRED RIGHTS AND HAS NOT RELINQUISHED RIGHTS WITH REFERENCE TO FSI. FURTHER, ON VERIFICATION OF APPROVED MAP FO R EACH UNIT IS WITH REFERENCE TO BUILT UP AREA ONLY. UNDER THE CIR CUMSTANCES, THE ASSESSEE HAS NEVER DEALT WITH FSI , BOTH IN TERMS OF ACQUIRING RIGHTS IN THE LAND AND FOR RELINQUISHMENT OF SUCH R IGHTS IN THE LAND. THE CALCULATION GIVEN IN APPROVED PLAN IS OF MAXIMU M 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 DETER MINES THE AVERAGE SIZE OF THE RESIDENTIAL UNIT - A COMMERCIAL DECISIO N, WHICH PREVAILS FOR THE PURPOSE OF CARRYING OUT THE BUSINESS AND FO R MAKING RESIDENTIAL UNITS AND NOT THE PERMISSIBLE MAXIMUM F SI. IT WOULD ALSO BE IMPOSSIBLE TO CONSTRUCT ANY HOUSING UNIT AS PER THE PROVISIONS OF SEC. 80IB(10) BY UTILIZING THE MAXIMU M FSI. 64. THE AO STATES FURTHER THAT IN THE APPROVED LA Y OUT PLAN, THE LOCAL AUTHORITY HAD PERMITTED TO BUILD RESIDENTIAL UNIT OF LESSER AREA THAN THE MAXIMUM PERMISSIBLE BUILT UP AREA ON THE LAND AND THEREFORE THE ASSESSEE HAD CARRIED OUT ONLY PARTIAL CONSTRUCTION OF THE AVAILABLE FSI VIS-A-VIS THE ENTIRE PLOT OF LAND AVAILABLE FOR DEVELOPMENT WITH THE ASSESSEE. WE FIND THAT THE AP PROVED FSI ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 10 IN REGARD TO THE UNITS CONSTRUCTED HAS BEEN FULLY U TILIZED FULLY UTILIZED AS PER THE APPROVED PLAN OF THE LOCAL AUTH ORITY, NAMELY THE FSI IS FULLY UTILIZED , THE FSI ACTUALLY PASSED AND PERMITTED BY THE AUTHORITIES FOR EACH PROJECT. 65. THE AO OBSERVES ASSESSEE HAS SOLD UNUTILIZED FSI 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 ACT HA VE NO FORCE; THAT THE ASSESSEES HAVE CLAIMED DEDUCTION UNDER SEC TION 80IB OF THE ACT FOR THE PROFIT DERIVED DURING THE YEAR UNDE R CONSIDERATION FROM THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION O F A HOUSING PROJECT WHICH THOUGH INCLUDES PROFIT EARNED FROM SA LES OF UNUTILIZED FSI OF THE HOUSING PROJECT ALSO AND THAT THE OTHER PART OF UNUTILIZED FSI RELATING TO THE APPROVED UNITS HA VE NOT BEEN CONSTRUCTED OR DEVELOPED BUT BEING SOLD DIRECTLY, A LTHOUGH AS A UNRESTRICTIVE BUNDLE OF RIGHTS 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(1). IN ANY CASE THE ASSESSEE HAS NOT SOLD FSI OF PLOT, EVEN IF THE UNUTILIZED FS I RIGHTS ARE AVAILABLE WITH THE ASSESSEE, IT IS THE ONLY WAY LEF T OUT OF UTILIZING SUCH UNUTILIZED FSI IS TO MAKE CONSTRUCTION ON TOP OF THE GROUND FLOOR, WHICH IS ALREADY BEING SOLD TO PROSPECTIVE B UYERS. WITH THIS SO CALLED UNUTILIZED SI RIGHTS, IF THE ASSESSEE WISHES TO MAKE FURTHER CONSTRUCTION THAN IT WILL PRACTICALLY IMPOS SIBLE AS THE ASSESSEE IS LEFT WITH NO EASEMENT RIGHTS FOR MAKING CONSTRUC TION OR ACCESS TO GO ON TOP OF THE GROUND FLOOR AS THE G ROUND LEVEL RIGHTS ARE ALREADY SOLD TO PROSPECTIVE CUSTOMER. I N THIS SITUATION IT WOULD BE PRACTICALLY IMPOSSIBLE TO MAKE EITHER CONS TRUCTION OR TO GIVE ACCESS FOR CONSTRUCTION MADE. THUS, THE CONCEP T OF ELEMENT OF UNUTILIZED FSI SOLD IS IMAGINARY AND BASED ON SU RMISES AND CONJUNCTURES. ITA NO. 3224/AHD/09 A.Y. 06-07 PAGE 11 LD. CIT(A) HAS ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE AND THE ASSESSEE HAS NOT AGGRIEVED BY THE ORDER OF THE CIT(A). THER EFORE, THE GROUND NOS.4 & 5 ARE DISMISSED. 9. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. THESE ORDERS PRONOUNCED IN OPEN COURT ON 09.11.2012 SD/- SD/- ( MUKUL KR. SHRAWAT ) (T.R. MEENA) JUDICIAL MEMBER AC COUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ; STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 02.11.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 05.11.2012 4) DATE OF CORRECTION ,, ,, 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 09.11.2012 7) ORDER UPLOADED ON ,, ,, 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 09.11.2012