Surana Mutha Developers, Pune V. ITO, Ward 11(1), Pune

ITA 360/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93668 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 24-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: V L JAIN
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.360/PN/2013 ASSESSMENT YEAR: 2009-10 M/S. SURANA MUTHA DEVELOPERS 236, PATIL PLAZA, PARVATI, PUNE . APPELLANT PAN: ABAFS9964J VS. THE INCOME TAX OFFICER, WARD 11(4), PUNE. . RESPONDENT APPELLANT BY : SHRI V.L. JAIN RESPONDENT BY : SHRI B.C. MALAKAR DATE OF HEARING : 01-04-2015 DATE OF PRONOUNCEMENT : 10-04-2015 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-I, PUNE DATED 06.11.2012 RELATING TO ASSESSMENT YEAR 2009-1 0 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LA W IN CONFIRMING THE DISALLOWANCE OF THE CLAIM U/S 80IB(10) OF RS. 7 ,06,90,849/-FOR OUR PROJECT 'DAFFODILS AVENUE'. 2. WITHOUT PREJUDICE TO GROUND NO.1 ABOVE, THE LEA RNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT GRANTING THE CLAIM U/S 80IB(10) IN RELATION TO THE PROJECT COMPRISING OF BUILDINGS A, B AND C. 3. WITHOUT PREJUDICE TO GROUND NOS.1 AND 2 ABOVE, THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT GRANTIN G A PRO-RATA CLAIM IN RELATION TO THE ELIGIBLE PORTION OF THE PR OJECT. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL OR ADD TO THE SAME IF DEEMED NECESSARY. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS WITH R EGARD TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 2 4. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE WAS A PARTNERSHIP FIRM ENGAGED IN THE ACTIVITY OF PROPERTY DEVELOPMENT AND BUILDERS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD OFFERED A SUM OF RS.7,06,90,849/- AS INCOME FROM BUSINESS AND HAD CLAIMED THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT DECLARING NET INCOME AT RS.NIL. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD UNDERTAKEN ONE RESIDENTIAL PROJECT VIZ. DAFFODIL AVENUE AT SURVEY NO.17/271(1)(C) OF THE ACT/A/1+17/2/A, 18/1 BAVDHAN KHURD, PUNE. THE COMMENCEMENT OF PROJECT CONSISTED OF RESIDENTIA L BUILDINGS A, B AND C WAS APPROVED ON 31.10.2005. THE ASSESSEE HOWEVER, MADE CERTAIN CHANGES IN THE LAYOUT PLAN. AS PER THE COMMENCEMENT CERTIF ICATE DATED 29.03.2007 AND 11.12.2009 UNDER WHICH, THE BUILDING PLANS WERE REVISED AND ALSO THE LAYOUT. AS PER THE REVISED LAYOUT, ONE MORE BUILDI NG NO.D WAS INCLUDED IN THE PROJECT. THE ASSESSING OFFICER DURING THE COURSE O F ASSESSMENT PROCEEDINGS, NOTED THE CONDITIONS WHICH HAD TO BE FULFILLED WHIL E CLAIMING THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AND THE SAME WERE ENUMERATED UNDER PARA 6 AT PAGE 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER MADE CERTAIN ENQUIRIES FROM THE PUNE MUNICIPAL CORPORATION UNDER THE PROVISIONS OF SECTION 133(6) OF THE ACT. THE ASSESSING OFFICER ALSO VISI TED THE SITE OF HOUSING SCHEME ON 18.11.2011 AND NOTED THAT THERE WERE ALTE RATIONS AND DEVIATIONS IN THE ORIGINAL STRUCTURE OF THE PLAN. THE ASSESSING OFFICER FURTHER TOOK NOTE THAT THE PLOT AREA OF THE LAND AS PER THE ORIGINAL SANCT IONED PLAN STOOD ALTERED AND REDUCED IN VIEW OF CERTAIN CHANGES MADE AND AS AGAI NST THE PLOT AREA OF 4638.65 SQ. MTRS. THE REVISED SANCTIONED AREA OF TH E PLOT WAS 3443 SQ. MTRS. AND AFTER ADDING OPEN SPACE OF 463.86 SQ. MTRS., WH ICH WAS LESS THAN ONE ACRE. THUS, THE ASSESSEE WAS FOUND TO HAVE FAILED TO SATISFY THE PRE-CONDITION OF MINIMUM AREA OF ONE ACRE AS ENVISAGED UNDER CLAU SE (B) OF SECTION 80IB(10) OF THE ACT. 5. THE SECOND DISQUALIFICATION OF THE ASSESSEE, NOT ED BY THE ASSESSING OFFICER WAS THAT AS THE FIRST COMMENCEMENT CERTIFIC ATE WAS ISSUED BY THE LOCAL ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 3 AUTHORITY ON 31.10.2005, THE HOUSING PROJECT WAS SU PPOSED TO BE COMPLETED WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEA R, IN WHICH THE FIRST COMMENCEMENT CERTIFICATE WAS OBTAINED I.E. ON OR BE FORE 31.03.2011. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE DID NOT P OSSESS COMPLETION CERTIFICATE IN RESPECT OF BUILDING NO.D OF THE SAID PROJECT AND HENCE, THE FINAL COMPLETION WAS NOT COMPLETED AS ON 31.03.2011. REL IANCE WAS PLACED IN THIS REGARD ON THE DOCUMENTS RECEIVED FROM THE PMC UNDER SECTION 133(6) OF THE ACT WHICH INDICATED THAT THE CONSTRUCTION WORK OF B UILDING NO. D HAD COMMENCED AND ONLY PLINTH LEVEL WAS COMPLETED AROUN D THE DATE OF CERTIFICATE I.E. 18.03.2011, 21.03.2011 AND 15.03.2011. FURTHE R CONFIRMATION WAS RECEIVED FROM THE PMC DATED 26.12.2011 IN WHICH IT WAS POINTED OUT THAT AS PER THE SANCTIONED LAY OUT DATED 26.03.2007, PART C OMPLETION CERTIFICATE FOR BUILDINGS A, B AND C OF THE HOUSING SCHEME WAS GIVE N. HOWEVER, THE CONSTRUCTION WORK OF BUILDING D OF THE SAID PROJE CT AS ON 31.03.2011 WAS NOT COMPLETED AND THE COMPLETION CERTIFICATE FOR THE SA ID BUILDING D IN THE FINAL COMPLETION CERTIFICATE HAD NOT BEEN GIVEN. THE ASS ESSEE WAS SHOW CAUSED AND ASKED TO EXPLAIN AS TO WHY THE DEDUCTION CLAIME D UNDER SECTION 80IB(10) OF THE ACT IN VIEW OF THE SECOND DISQUALIFICATION, SHOULD NOT BE DISALLOWED. THE REPLY OF THE ASSESSEE IS REPRODUCED UNDER PARA 10, PAGES 8 AND 9 OF THE ASSESSMENT ORDER AND IN VIEW OF THE ASSESSEE NOT PO SSESSING THE FINAL COMPLETION CERTIFICATE AND ALSO THE COMPLETION CERT IFICATE FOR BUILDING D, THE ASSESSING OFFICER HELD THE ASSESSEE AS NOT ELIGIBLE FOR CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 6. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER OBSERVING AS UNDER:- 5.7 FROM THE ABOVE STATED DISCUSSION IT IS SEEN TH AT THE HOUSING PROJECT OF THE APPELLANT WHICH WAS APPROVED INITIAL LY ON 31.10.2005 WAS TO BE COMPLETED WITHIN 5 YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT WAS FIRST APPROVED BY THE LOCAL AUTHORITY VIZ. BY 31.3.2011. A PERUSAL OF SEC.80IB(10)(A) WHICH W AS INTRODUCED BY THE FINANCE ACT 2004 W.E.F. 1.4.2005 SHOWS THAT THE RE ARE SPECIFIED TIME LIMITS FOR COMPLETION OF THE DEVELOPMENT AND C ONSTRUCTION OF HOUSING PROJECTS APPROVED ON OR AFTER 1.10.1998. I N FACT, BUILDERS AND DEVELOPERS WHOSE PROJECTS WERE APPROVED AFTER 1.4.2 005 WERE GIVEN AN ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 4 EXTENDED PERIOD OF ONE YEAR FROM THE END OF FINANCI AL YEAR IN WHICH HOUSING PROJECTS STOOD APPROVED BY LOCAL AUTHORITY, BEYOND THE USUAL PERIOD OF 4 YEARS. THIS AMENDMENT CAME BY FINANCE ACT 2010 W.E.F. 1.4.2010. SINCE THE APPELLANT HAS ADMITTEDLY NOT C OMPLETED THE BUILDING D BY 31.3.2011 THE ASSESSING OFFICERS ACT ION IN NOT ALLOWING DEDUCTION U/S 80IB(10) OF THE ACT IS UPHELD. GROUN DS OF APPEAL NO.1 AND 2 ARE DISMISSED. 7. THE ASSESSEE IS IN APPEAL AGAINST THE SAID DENIA L OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE LEARNED AUTHORIZE D REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE PROJECT WAS ORIGINALL Y SANCTIONED ON 31.10.2005 COMPRISING OF BUILDING NOS. A, B AND C. THEREAFTER , THE PLANS OF THE BUILDINGS WERE REVISED ON 26.03.2007 AND BUILDING D WAS ADD ED FOR THE FIRST TIME. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE COMPLETION CERTIFICATE OF BUILDINGS A, B AND C WERE RECEIVED BY THE ASSESSEE BEFORE 31.03.2011. HOWEVER, THE PLAN FOR BUILDING D WHICH WAS SANCTIONED AS PER COMMENCEMENT CERTIFICATE DATED 29.03.2007 HA D BEEN PHYSICALLY COMPLETED BEFORE 31.03.2011 WHICH IN TURN IS EVIDEN CED BY THE ARCHITECTURE CERTIFICATE IN THIS REGARD. FURTHER, EVEN THE REVE NUE OF SALE OF THE UNIT OF D HAD BEEN RECOGNIZED IN ASSESSMENT YEAR 2011-12 WHIC H IN TURN CONFIRMS THE HANDING OVER OF POSSESSION OF THE COMPLETED UNITS P RIOR TO 31.03.2011. EVEN THE ELECTRICITY BILLS IN RESPECT OF THE FLATS IN BU ILDING D HAD BEEN RAISED IN THE NAMES OF FLAT OWNERS PRIOR TO 31.03.2011. HOWEVER, THE FINAL COMPLETION CERTIFICATE FOR THE BUILDING D WAS ISSUED ON 15.0 3.2012 BY THE LOCAL AUTHORITY. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE POINTED OUT THAT SINCE THE PLAN FOR BUILDING D HAD BEEN SANCTIONED ON 29 .03.2007, THE EXPECTED DATE OF COMPLETION OF THE SAID BUILDING UNDER THE P ROVISIONS OF SECTION 80IB(10) OF THE ACT WAS 31.03.2012. HOWEVER, THE BUILDINGS A TO C WERE COMPLETED WITHIN STIPULATED TIME AND THERE WAS NO MERIT IN TH E DISALLOWANCE OF THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. TH E LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON SERIES OF DECISIONS FOR THE PROPOSITION THAT THERE IS NO REQUIREMENT OF COMPLET ION OF CERTIFICATE FOR ALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF TH E ACT. ANOTHER PROPOSITION ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 5 RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE MEANING OF THE WORD HOUSING PROJECT. AS PER THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, THE BUILDINGS A TO D WERE NOT ONE PROJECT AS THE BUILDING D WAS NOT PART OF THE COMMENCEMENT C ERTIFICATE SANCTIONING CONSTRUCTION OF BUILDINGS A, B AND C. OUR ATTENTIO N WAS DRAWN TO SERIES OF CASE LAWS ON THIS ISSUE. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ASSESSEES CLAIM THAT BUILDING D COMPLET ED BY 31.03.2011 WAS INCORRECT AS THE LETTER PLACED AT PAGE 65 OF THE PA PER BOOK DATED 15.03.2011 REFLECTS THAT ONLY PLINTH WAS COMPLETED BY THAT DAT E. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FURTHER POINTED OUT THAT IT IS DIFFICULT TO UNDERSTAND HOW THE ARCHITECT CERTIFIES THAT THE BUILDING WAS COMPLETED BY 31.03.2011. OUR ATTENTION WAS DRAWN T O THE LETTER OF PMC DATED 26.12.2011 WHICH WAS ISSUED IN RESPONSE TO THE SUMM ONS ISSUED UNDER SECTION 133(6) OF THE ACT PLACED AT PAGE 66 OF THE PAPER BOOK AND ALSO THE ENGLISH TRANSACTION OF THE SAID LETTER UNDER PARA 8 .4 OF ASSESSMENT ORDER IN WHICH, THE PMC CLEARLY CERTIFIED THAT THE BUILDING D WAS NOT COMPLETED. 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE AS SESSEE POINTED OUT THAT THERE WAS AN ALTERNATE PLEA THAT PRORATA CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF BUILDINGS A, B AN D C SHOULD BE ALLOWED TO THE ASSESSEE. IT WAS FURTHER POINTED OUT BY THE LEARNE D AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT WHERE THE BUILDING NOS.A, B A ND C WERE CONSTRUCTED VIDE THE BUILDING PLAN DATED 31.10.2005 AND BUILDIN G NO.D WAS BROUGHT IN THE YEAR 2007 VIDE REVISED PLAN, THEN THE SAME IS SEPAR ATE PROJECT AND DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IS ALLOWABLE. RE LIANCE IN THIS REGARD, WAS PLACED UPON SERIES OF DECISIONS AND AN ALTERNATE PL EA WAS RAISED BY THE ASSESSEE FOR THE ALLOWANCE OF PROPORTIONATE DEDUCTI ON ON THE BUILDING NOS.A, B AND C COMPLETED. ANOTHER PLEA RAISED BY THE LEAR NED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THE FACT THAT T HE ASSESSEE HAD NOT ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 6 ENVISAGED THE CONSTRUCTION OF BUILDING IN FIRST PHA SE, THE CONSTRUCTION OF BUILDING NO.D WAS SEPARATE. AS PER THE LEARNED AUT HORIZED REPRESENTATIVE FOR THE ASSESSEE, WHERE THERE WAS NO PLAN FOR BUILDING NO.D INITIALLY, THE SAME SHOULD BE CONSIDERED SEPARATELY AND ALLOWED DEDUCTI ON UNDER SECTION 80IB(10) OF THE ACT, IN VIEW OF THE RATIO LAID DOWN IN DCIT VS. ADITYA DEVELOPERS IN ITA NOS.791 & 792/PN/2008, RELATING T O ASSESSMENT YEARS 2003-04 & 2004-05, VIDE ORDER DATED 30.01.2012. HO WEVER, THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE RATIO LAID DOWN IN CIT VS. VANDANA PROPERTIES REPORTED IN 206 TAXMAN 584 (BOM) WHICH HAS BEEN CONSIDERED BY THE CIT(A). 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE BEFORE US IS IN APPEAL AGAINST THE DENIAL OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. DURING THE YEAR UNDER CONSIDE RATION, THE ASSESSEE HAD CLAIMED THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AGAINST THE SALE PROCEEDS OF RESIDENTIAL PROJECT DAFFODIL AVENUE. THE ASSESSEE CLAIMS THAT THERE WERE CERTAIN CHANGES IN THE LAY OUT PLAN AND THE BUILDING PLANS WERE REVISED ALONG WITH THE REVISION OF LAYOUT PLANS AND ONE MORE BUILDING NO.D WAS ENVISAGED FOR CONSTRUCTION ON THE SAID PIECE OF LAND. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE CERTAIN ENQUIRIES FROM THE PUNE MUNICIPAL CORPORATION UNDER THE PROVISIONS OF SECTION 133(6) OF THE ACT. THE ASSESSING OFFICER ALSO VISITED THE SITE O F THE ASSESSEE ON 18.11.2011 AND NOTED THAT THERE WERE CERTAIN ALTERATIONS AND D EVIATIONS IN THE ORIGINAL STRUCTURE OF THE PLAN. ANOTHER ISSUE NOTED BY THE ASSESSING OFFICER WAS THAT THE PLOT AREA OF THE LAND AS PER ORIGINAL SANCTIONE D PLAN WAS 4638.65 SQ. MTRS. HOWEVER, THE REVISED AREA OF THE PLOT WAS 3443 SQ. MTRS., AND AFTER ADDING OPEN SPACE OF 463.86 SQ. MTRS., THE TOTAL PLOT AREA WAS 3906.86 SQ. MTRS. I.E. 0.9654 ACRES, WHICH WAS LESS THAN ONE ACRE. THE PL EA OF THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE U S IN THIS REGARD WAS THAT INITIALLY THE ASSESSING OFFICER HAD TAKEN NOTE OF T HE FACTUM OF AREA OF LAND, BUT ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 7 WHILE COMPLETING THE ASSESSMENT, THE ONLY ADDITION MADE IN THE HANDS OF THE ASSESSEE WAS FOR NON-COMPLETION OF PROJECT VIS--VI S BUILDING NO.D. OUR ATTENTION WAS DRAWN TO THE CONCLUDING PARAS OF THE ASSESSMENT ORDER AND IT WAS POINTED OUT THAT THE EXPLANATION WITH REGARD TO THE SAID ASPECT WAS ACCEPTED BY THE ASSESSING OFFICER I.E. THE NET AREA OF PLOT OF 3443 SQ. MTRS. WAS AFTER EXCLUDING 463.86 SQ. MTRS. ON ACCOUNT OF RECREATION GROUND AND 695.79 SQ. MTRS. ON ACCOUNT OF AMENITIES SPACE. TH E TOTAL AREA OF THE PLOT WAS 5600 SQ. MTRS. AND AFTER DEDUCTING THE ROAD ACQUIS ITION AREA OF 961.35, THE NET AREA OF THE PLOT WAS 4638.65 SQ. MTRS., WHICH WAS M ORE THAN ONE ACRE AND HENCE, THE CONDITION PRESCRIBED IN SECTION 80IB(10) (B) OF THE ACT WAS FULFILLED. WE HAVE PERUSED THE BUILDING PLANS AND WE FIND MERI T IN THE PLEA OF THE ASSESSEE IN THIS REGARD. 11. THE ISSUE ON WHICH THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS DENIED TO THE ASSESSEE, THE DISQUALIFICATION AS ENV ISAGED UNDER CLAUSE (A) TO SECTION 80IB(10) OF THE ACT. THE SAID CLAUSE PROVI DES THE TIME LIMIT WITHIN WHICH, THE HOUSING PROJECTS HAVE TO BE COMPLETED IN VIEW OF THE DATE OF SANCTIONING OF PROJECTS BY THE LOCAL AUTHORITY. TH E ASSESSEE HAD RECEIVED THE FIRST COMMENCEMENT CERTIFICATE ISSUED BY THE LOCAL AUTHORITY ON 31.10.2005, UNDER WHICH THE ASSESSEE HAD PROPOSED TO BUILD BUIL DING NOS.A, B AND C. THE SAID HOUSING PROJECT WAS TO BE COMPLETED WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE COMMENCEMENT CERTIF ICATE WAS OBTAINED I.E. ON OR BEFORE 31.03.2011. THE ASSESSEE, HOWEVER, SUBMI TTED ANOTHER PLAN FOR THE CONSTRUCTION OF BUILDING NO.D, WHICH WAS SANCTIONED FOR THE FIRST TIME AS PER THE COMMENCEMENT CERTIFICATE DATED 29.03.2007. THE ASSESSEE CLAIMS THAT IT HAD RECEIVED THE COMPLETION CERTIFICATE OF BUILDING NOS.A, B AND C BEFORE PRESCRIBED DATE UNDER THE ACT I.E. 31.03.2011. IN RESPECT OF BUILDING NO.D, THE FIRST PLEA OF THE ASSESSEE WAS THAT THE BUILDING NO .D HAD BEEN PHYSICALLY COMPLETED BEFORE 31.03.2011 AS IS EVIDENT FROM THE ARCHITECTURE CERTIFICATE. FURTHER, THE SALE OF ALL UNITS OF BUILDING NO.D HAV E BEEN RECOGNIZED IN FINANCIAL ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 8 YEAR 2010-11, WHICH IN TURN CONFIRMS THE HANDING OV ER THE POSSESSION OF THE SAID UNITS PRIOR TO 31.03.2011. EVEN THE ELECTRICI TY BILLS HAVE BEEN RAISED IN RESPECT OF SAID FLATS IN BUILDING NO.D IN THE NAME OF OTHER PURCHASERS PRIOR TO 31.03.2011. THE ASSESSING OFFICER ON THE OTHER HA ND, HAD RECEIVED THE INFORMATION FROM PMC THAT THE CONSTRUCTION WORK OF BUILDING NO.D OF THE SAID PROJECT WAS NOT COMPLETED AS ON 31.03.2011 AND THE COMPLETION CERTIFICATE FOR THE SAID BUILDING WAS ISSUED ON 15.03.2012. THE DE DUCTION UNDER SECTION 80IB(10) OF THE ACT WAS DENIED TO THE ASSESSEE, IN VIEW OF NON-COMPLETION OF THE BUILDING NO.D BY 31.03.2011. 12. THE FIRST PLEA RAISED BY THE ASSESSEE IN THIS R EGARD WAS THAT BUILDING NOS. A, B AND C CONSTITUTE ONE PROJECT AND BUILDING NO.D COMPRISED ANOTHER PROJECT AND THE COMPLETION DATE OF BOTH THE PROJECT S WERE DIFFERENT AS THE DATE OF COMMENCEMENT OF BOTH THE PROJECTS WERE DIFFERENT . AS PER THE ASSESSEE, BUILDING PLANS FOR BUILDING NOS.A, B AND C WERE ISS UED BY THE LOCAL AUTHORITY ON 31.10.2005 AND THE ASSESSEE WAS TO COMPLETE THE SAID BUILDING BY 31.03.2011, WHICH HAD BEEN COMPLETED AND HENCE, THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. F URTHER, THE BUILDING NO.D WAS FIRST SANCTIONED VIDE COMMENCEMENT CERTIFICATE ISSUED ON 29.03.2007 AS AGAINST WHICH THE EXPECTED DATE OF COMPLETION, AS P ER THE PROVISIONS OF THE ACT, WAS 31.03.2012. SINCE THE BUILDING NO.D WAS C OMPLETED ON 15.03.2012, THEN THE ASSESSEE WAS ENTITLED TO THE CLAIM OF DEDU CTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF THE SAME. RELIAN CE IN THIS REGARD WAS PLACED ON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN M/S. SIDDHIVINAYAK KOHINOOR VENTURE VS. ACIT IN ITA NOS.1112 & 1527/PN /2011, RELATING TO ASSESSMENT YEARS 2006-07 AND 2007-08, VIDE ORDER DA TED 31.10.2013 FOR THE PROPOSITION THAT EVEN A BUILDING OR A GROUP OF BUIL DINGS COMPRISED IN LARGER PROJECTS APPROVED BY LOCAL AUTHORITY CAN BE CONSTRU ED AS A HOUSING PROJECT FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. ANOTHER RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY HONBLE BOMBAY HIGH COURT IN CIT VS. ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 9 VANDANA PROPERTIES (SUPRA), WHEREIN, IT WAS HELD TH AT THE HOUSING PROJECT NEED NOT BE A PROJECT AND THE GROUP OF BUILDINGS, BUT ON E SINGLE BUILDING CAN CONSTITUTE A SEPARATE HOUSING PROJECT. ANOTHER REL IANCE WAS PLACED ON THE RATIO LAID DOWN BY HONBLE MADRAS HIGH COURT IN VIS WAS PROMOTERS (P) LTD. VS. ACIT REPORTED IN 81 DTR 68 (MADRAS), WHEREIN IT WAS HELD THAT THE ASSESSEE WAS ENTITLED TO THE CLAIM OF DEDUCTION TO THE EXTEN T OF EACH OF THE BLOCKS SATISFYING THE CONDITIONS UNDER SECTION 80IB(10) OF THE ACT AND THE ASSESSEE WOULD BE ENTITLED TO THE RELIEF ON PROPORTIONATE BA SIS. 13. IN THE ALTERNATE, THE PLEA RAISED BY THE LEARNE D AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT IT WAS ENT ITLED TO THE PRO-RATA DEDUCTION IN RESPECT OF BUILDING NOS.A, B AND C, WH ICH WERE COMPLETED BEFORE THE DUE DATE. AFTER GOING THROUGH THE FACTS OF THE CASE, WE FIND THAT THE BUILDING PLANS FOR THE PROJECT COMPRISING OF BUILDI NG NOS.A, B AND C WERE SANCTIONED ON 31.10.2007. THE ASSESSEE THEREAFTER, HAD CARRIED OUT CERTAIN CHANGES IN THE LAYOUT PLAN AS PER COMMENCEMENT CERT IFICATE DATED 29.03.2007. THE ASSESSING OFFICER VIDE PARA 4 NOTE S THAT ANOTHER COMMENCEMENT CERTIFICATE DATED 11.12.2009 WAS ALSO ISSUED TO THE ASSESSEE, AND AS PER THE REVISED PLAN, ANOTHER BUILDING NO.10 WAS INCLUDED IN THE PROJECT. THUS, THE ASSESSEE IN ORDER TO DEVELOP IT S PLOT OF LAND WAS ISSUED THREE COMMENCEMENT CERTIFICATES I.E. FIRST ONE DATE D 31.10.2005 IN RESPECT OF BUILDING NOS.A, B AND C. THEREAFTER, CERTAIN CHANG ES WERE CARRIED OUT AND COMMENCEMENT CERTIFICATE DATED 29.03.2007 AND 11.12 .2009 WERE ISSUED TO THE ASSESSEE, AS PER WHICH ONE MORE BUILDING NO.D W AS INCLUDED IN THE PROJECT. UNDER THE PROVISIONS OF SECTION 80IB(10)( A) OF THE ACT, WHERE AN UNDERTAKING HAD COMMENCED OR DEVELOPED AND CONSTRUC TION OF THE HOUSING PROJECT ON OR AFTER 1 ST DAY OF OCTOBER, 1998, THEN THE SAID PROJECT IS TO BE COMPLETED IN A CASE WHERE HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON OR AFTER 1 ST DAY OF APRIL, 2004, WITHIN FOUR YEARS FROM THE END OF FINANCIAL YEAR, IN WHICH THE HOUSING PROJECT IS APP ROVED BY THE LOCAL AUTHORITY. ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 10 THE EXPLANATION UNDER SECTION 80IB(10)(A) OF THE AC T FURTHER PROVIDES THAT IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING P ROJECT IS MORE THAN ONCE, THEN SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE B EEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PRO JECT WAS FIRST APPROVED BY THE LOCAL AUTHORITY. IN THE CASE OF ASSESSEE, THE PROJECT WAS APPROVED BY THE LOCAL AUTHORITY ON 31.10.2005 AND IN CASE, THE EXPL ANATION UNDER SECTION 80IB(10)(A) OF THE ACT IS TO BE APPLIED, THEN THE A SSESSEE IS SUPPOSED TO COMPLETE THE SAID HOUSING PROJECT WITHIN FIVE YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE FIRST COMMENCEMENT CERTIFICATE WA S OBTAINED I.E. ON OR BEFORE 31.03.2011. THE ASSESSEE RECEIVED PART COMPLETION CERTIFICATE FOR THE BUILDING NOS.A, B AND C BEFORE THE DUE DATE I.E. 31.03.2011. HOWEVER, AS PER THE INFORMATION COLLECTED BY THE ASSESSING OFFICER IN R ESPECT OF THE NEWLY COMMENCED BUILDING NO.D OF DAFFODIL AVENUE, THE C ERTIFICATE OF ASSESSEES ARCHITECT SHRI A.N. WATVE, DATED 21.03.2011 AND ADD RESSED TO CITY ENGINEER, PUNE MUNICIPAL CORPORATION CERTIFIED THAT HE HAD VE RIFIED THE FOUNDATION STARTA AVAILABLE ON SITE AND FOUND IT TO BE CONCURRENT TO THE DESIGN ASSUMPTIONS . IT WAS FURTHER CERTIFIED THE WORK OF RCC CONSTRUCTION UP TO PLINTH HAS BEEN DONE AS PER MY DRAWING AND DESIGN. ANOTHER CERTIFICATE WAS FROM MR. ZUBER RASHID SHAIKH OF SPACE DESIGNERS SYNDICATE DATED 15 .03.2011, WHO IN RESPECT OF BUILDING NO.D OF DAFFODIL AVENUE STATE D THAT THE CONSTRUCTION UPTO PLINTH LEVEL HAD BEEN COMPLETED AT THE ABOVE MENTIO NED SITE AS PER THE PERMIT COMMENCEMENT CERTIFICATE DATED 11.12.2009. IT FURT HER STATED THAT THE PLINTH MAY BE CHECKED AND PERMISSION BE GIVEN TO PROCEED W ITH FURTHER WORK. BOTH THESE COMMUNICATIONS WHICH ARE ISSUED IN THE MONTH OF MARCH, 2011 CONFIRM THAT THE BUILDING NO.D WAS STILL IN CONSTRUCTION AN D IT WAS NOT COMPLETED TILL 31.03.2011. THE ASSESSING OFFICER RECEIVED INFORMA TION FROM PMC VIDE LETTER DATED 26.12.2011, WHICH IS ANNEXED AS ANNEXURE E TO THE ASSESSMENT ORDER, IN WHICH IT WAS STATED THAT AS ON 31.03.2011 , THE CONSTRUCTION OF THE BUILDING NO.D WAS NOT COMPLETED. THE ENGLISH TRANS LATION OF THE RELEVANT PORTION IS REPRODUCED BY THE ASSESSING OFFICER AT P AGE 7 OF THE ASSESSMENT ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 11 ORDER. IN VIEW OF THE ABOVE SAID EVIDENCES AVAILAB LE WITH THE ASSESSING OFFICER, COPIES OF WHICH ARE ANNEXED AS ANNEXURE B TO E TO THE ASSESSMENT ORDER, WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE THAT THE BUILDING NO.D HAD BEEN COMPLETED MUCH BEFORE 31.03.2011, IN VIEW OF T HE ARCHITECTS CERTIFICATE CONFIRMING THE COMPLETION BY 31.03.2011. THE ASSES SEE HAS FURTHER STATED THAT NO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT HAS BEEN CLAIMED IN THE CURRENT YEAR AS INCOME FROM SALE OF UNITS IN BUILDI NG D HAS BEEN ACCOUNTED FOR IN SUBSEQUENT PERIODS. 14. NOW, COMING TO THE ALTERNATE CLAIM OF THE ASSES SEE VIS--VIS BUILDING NOS.A, B AND C CONSTRUCTED AND COMPLETED BY THE ASS ESSEE AGAINST WHICH, COMPLETION CERTIFICATE HAS BEEN RECEIVED PRIOR TO 3 1.03.2011 I.E. THE STIPULATED DATE WITHIN WHICH THE SAID PROJECT HAD TO BE COMPLE TED. WE FIND MERIT IN THE ALTERNATE PLEA RAISED BY THE ASSESSEE THAT WHERE BU ILDING NOS.A, B AND C HAVE BEEN COMPLETED BEFORE THE STIPULATED DATE, THE ASSESSEE IS ENTITLED TO THE PRO-RATA DEDUCTION IN RESPECT OF PROFITS EARNED FROM BUILDING NOS.A, B AND C. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF PHARANDE DEVELOPERS VS. THE INCOME T AX OFFICER IN ITA NO. 715/PN/2009 AND ITA NO. 175/PN/2011 RELATING TO ASS ESSMENT YEAR 2005-06 ORDER DATED 25.06.2013 AND IN TURN RELIANCE WAS PLA CED ON THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF D. S. KULKARNI DEVELOPERS LTD. VS. ACIT IN ITA NOS. 1428 & 1429/PN/2008, ORDER DAT ED 08.08.2012 AND ALSO THE SUBSEQUENT JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF VISWAS PROMOTERS (P) LTD. (2013) 29 TAXMAN.COM 19 ( MADRAS) AND IT WAS HELD AS UNDER:- 10. ON THIS ASPECT, WE HAVE CONSIDERED THE PLEA OF THE ASSESSEE IN THE LIGHT OF THE PRECEDENTS. A SIMILAR SITUATION HA S BEEN CONSIDERED BY THIS BENCH IN THE CASE OF D.S. KULKARNI DEVELOPERS LTD. (SUPRA) WHEREIN THE FOLLOWING DISCUSSION IS RELEVANT :- 20. IN THIS BACKGROUND, THE ALTERNATIVE PLEA OF TH E ASSESSEE SPRINGS UP. THE PLEA IS THAT THE DEDUCTION UNDER SE CTION 80- IB(10) BE DENIED ONLY WITH RESPECT TO THE UNITS WHI CH DO NOT CONFORM TO THE CONDITION CONTAINED IN SECTION 80-IB (10)(C) AND FOR THE BALANCE ELIGIBLE RESIDENTIAL UNITS, THE DED UCTION SHOULD BE ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 12 ALLOWED. THE REVENUE HAS OPPOSED THE SAID PLEA ON T HE GROUND THAT THE ASSESSEE IS NOT ENTITLED TO A PROPORTIONAT E DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT. 21. ON THIS ASPECT, WE FIND THAT THE MUMBAI BENCH O F THE TRIBUNAL IN THE CASE OF M/S EKTA HOUSING PVT. LTD., ITA NO.3649/MUM/2009 DATED 20.05.2011 HAS UPHELD THE PL EA OF THE ASSESSEE FOR A PROPORTIONATE DEDUCTION UNDER SECTIO N 80-IB(10) OF THE ACT WHERE SOME OF THE RESIDENTIAL UNITS IN T HE PROJECT VIOLATED THE CONDITION CONTAINED IN SECTION 80-IB(1 0)(C) OF THE ACT. THE MUMBAI BENCH AFTER NOTICING THE PRECEDENTS IN THE CASE OF I) ITO VS. AIR DEVELOPERS, 25 DTR 287 (NAG.); II) DCIT VS. BRIGADE ENTERPRISES PVT. LTD., 14 DT R 371 (BANG.); III) ACIT VS. SHETH DEVELOPERS P. LTD., 33 SOT 277 (MUM.); IV) BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VS. DCIT ; V) SJR BUILDERS VS. ACIT, 3 ITR 569 (MUM.) HELD THAT THE ASSESSEE WOULD NOT LOOSE THE EXEMPTIO N UNDER SECTION 80-IB(10) IN ENTIRETY WHERE SOME OF THE RES IDENTIAL UNITS WINGS HAD A BUILT-UP AREA IN EXCESS OF THE LIMIT PRESCRIBED IN CLAUSE (C) OF SECTION 80-IB(10) BUT, IT WOULD BE EN TITLED TO PROPORTIONATE DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT WITH REGARD TO THE PROFITS EARNED ON THE ELIGIBLE UNITS. PARTICULARLY, THE TRIBUNAL ALSO CONSIDERED THE DECISION OF THE HONBL E BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) AND HELD THAT THE SAME DOES NOT ENVISAGE DENIAL OF PROPORTIO NATE DEDUCTION IN SUCH CIRCUMSTANCES. THE RELEVANT DISCU SSION, AS CONTAINED IN PARAGRAPHS 8 AND 9 OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S EKTA HOUSING PVT. LTD. (SUPRA) READ S AS UNDER : - VIII) WE NOW EXAMINE THE APPLICABILITY OF THE DECI SION OF THE HONBLE BOMBAY HIGH COURT IN BRAHMA ASSOCIATES (SUPRA) TO THE FACTS OF THIS CASE. ON A CAREFUL REA DING OF THIS JUDGEMENT, WE FIND THAT NOWHERE IT IS STATED T HAT PROPORTIONATE DEDUCTION SHOULD BE ALLOWED, IN CASE CERTAIN RESIDENTIAL UNITS HAD BUILT-UP AREA IN EXCESS OF PR ESCRIBED LIMIT OF 1,000 SQ.FT.. IN FACT, THIS ISSUE WAS NOT BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. THE QUESTIONS BE FORE THE HONBLE JURISDICTIONAL HIGH COURT WERE DIFFEREN T AND, HENCE THE JUDGEMENT CANNOT BE SAID TO BE ON THIS IS SUE. THE ONLY ISSUE BEFORE THE HIGH COURT IS WHEN THERE IS A COMMERCIAL ELEMENT IN A RESIDENTIAL PROJECT, WILL B E ASSESSEE BE DENIED THE ENTIRE EXEMPTION. IN THIS CA SE, THE HONBLE HIGH COURT HAS OBSERVED THAT WHEN THE LOCAL AUTHORITY APPROVED A PLAN AS A HOUSING PROJECT OR A RESIDENTIAL CUM COMMERCIAL PROJECT, THE ASSESSEE WO ULD BE ENTITLED TO CLAIM FOR DEDUCTION UNDER SECTION 80 -IB(10) EVEN IF THE PROJECT HAD COMMERCIAL ELEMENT IN EXCES S OF 10%. AT PARAS 27 AND 28, THE COURT OBSERVED AS FOLL OWS :- 27. THE QUESTION THEN TO BE CONSIDERED IS, WHETHER THE SPECIAL BENCH OF THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE PROJECTS HAVING COMMERCIAL AREA UPTO 10% OF THE BUILT-UP AREA OF THE PLOT ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 8 0- ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 13 IB(10) ON THE ENTIRE PROJECT UPTO 01.04.2005. ONCE THE BASIC ARGUMENT OF THE REVENUE THAT THE HOUSING PROJECTS WITH COMMERCIAL USER ARE NOT ENTITLED TO SECTION 80-IB(10) DEDUCTION IS REJECTED, THEN IN TH E ABSENCE OF ANY RESTRICTION IMPOSED UNDER THE ACT, I T WAS NOT OPEN TO THE TRIBUNAL TO HOLD THAT THE PROJECTS APPROVED BY THE LOCAL AUTHORITIES HAVING RESIDENTIAL BUILDINGS WITH COMMERCIAL USER UPTO 10% OF THE PLOT AREA WOULD ALONE BE ENTITLED TO DEDUCTION UNDER SECTION 80-IB(10). AS NOTED EARLIER, RESTRICTION REGARDING COMMERCIAL USER HAS BEEN IMPOSED FOR THE FIRST TIME BY INTRODUCING CLAUSE (D) TO SECTION 80-IB(10) WITH EFFECT FROM 01.04.2005. THEREFORE, IT WAS NOT OPEN TO THE TRIBUNAL TO HOLD THAT PRIOR TO 01.04.2005, PROJECTS HAVING COMMERCIAL USER UPTO 10% OF THE PLOT AREA ALONE WOULD BE ELIGIBLE FOR SECTION 80-IB(10) DEDUCTION. 28. IN THE PRESENT CASE, THOUGH THE COMMERCIAL USER IS MORE THAN 10% OF THE PLOT AREA, THE TRIBUNA L HAS ALLOWED SECTION 80-IB(10) DEDUCTION IN RESPECT OF 15 RESIDENTIAL BUILDINGS ON THE GROUND THAT THE PROFITS FROM THESE EXCLUSIVELY RESIDENTIAL BUILDING S COULD BE DETERMINED ON STAND ALONG BASIS. IN OUR OPINION, THAT WOULD NOT BE PROPER, BECAUSE SECTION 80-IB(10) ALLOWS DEDUCTION TO THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND NOT TO A PART O F THE PROJECT. IF THE CONDITIONS SET OUT IN SECTION 8 0- IB(10) ARE SATISFIED, THEN DEDUCTION IS ALLOWABLE O N THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND THERE IS NO QUESTION OF ALLOWING DEDUCTION TO PART OF THE PROJECT. IN THE PRESENT CASE, THE COMMERCIAL USER IS ALLOWED IN ACCORDANCE WITH THE DC RULES AND HENCE THE ASSESSEE WAS ENTITLED TO SECTION 80-IB(10) DEDUCTION ON THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY. HOWEVER, THE ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRIBUNAL IN RESTRICTING THE DEDUCTION TO A PART OF THE PROJECT. THEREFORE, WHILE HOLDING THAT IN LAW, THE ASSESSEE WAS ENTITLED TO SECTION 80-IB(10) DEDUCTION ON THE PROFITS OF THE ENTIRE PROJECT, IN THE FACTS OF THE PRESENT CASE, SINCE THE ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRIBUNAL, WE ARE NOT INCLINED TO DISTURB THE DECISION OF THE TRIBUNA L IN RESTRICTING THE SECTION 80-IB(10) DEDUCTION ONLY IN RESPECT OF THE PROFITS DERIVED FROM 15 RESIDENTIAL BUILDINGS. IX) THUS, IT COULD BE SEEN THAT THE HONBLE HIGH CO URT DO NOT APPROVE THE FINDINGS OF THE TRIBUNAL THAT A RESIDENTIAL BUILDING WITH COMMERCIAL USER UP TO 10% OF THE PLOT AREA WOULD BE ENTITLED TO DEDUCTION UNDER SECT ION 80- IB(10). THE ISSUE THAT, IN CASE WHERE CERTAIN RESID ENTIAL UNITS ARE OF A BUILT-UP AREA IN EXCESS OF THE PRESC RIBED LIMIT OF 1,000 SQ.FT. IN RESIDENTIAL PROJECT, THIS WOULD RESULT IN THE ENTIRE EXEMPTION BEING LOST, OR WHETHER THE ASSESSEE WOULD BE ENTITLED TO A PROPORTIONATE DEDUC TION WAS NOT BEFORE THE HIGH COURT. THUS, IN OUR OPINION , THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 14 BRAHMA ASSOCIATES (SUPRA) DOES NOT COME TO THE RESC UE OF THE REVENUE. 22. FOLLOWING THE AFORESAID PRECEDENT, WE, THEREFOR E, HOLD THAT MERELY BECAUSE THE ASSESSEE HAS VIOLATED THE CONDITION UNDER SECTION 80-IB(10)(C) IN RELATION TO THE FLATS ON THE 11 TH FLOOR, THE DEDUCTION UNDER SECTION 80-IB(10) CANNOT BE DENIED IN ITS ENTIRETY, BUT, THE DENIAL S HALL BE LIMITED TO THE PROFITS IN RESPECT OF THE FLATS ON T HE 11 TH FLOOR ALONE. FOR THE BALANCE OF THE RESIDENTIAL UNITS, TH E PLEA OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT IS JUSTIFIED, AND THE ASSESSEE SUCCEEDS ON THIS ASPECT. 11. FOLLOWING THE AFORESAID PRECEDENT, WE HOLD THAT MERELY BECAUSE ASSESSEE VIOLATED THE CONDITION PRESCRIBED UNDER SECTION 80-IB(10)(C) OF THE ACT IN RELATION TO THE AMALGAMATED BUNGLOW G1 & G2, THE DEDUCTION UNDER SECTION 80-IB( 10) OF THE ACT CANNOT BE DENIED IN ITS ENTIRETY. IN OTHER WORD S, THE DENIAL OF DEDUCTION SHALL BE LIMITED TO THE PROFITS IN RESPEC T OF THE AMALGAMATED BUNGLOW G1 & G2 ALONE. FOR BALANCE OF T HE RESIDENTIAL UNITS, WHICH COMPLIED WITH THE REQUIREM ENTS OF CLAUSE (C) OF SECTION 80-IB(10) OF THE ACT, ASSESSEE SHALL BE ELIGIBLE FOR DEDUCTION. THE HONBLE MADRAS HIGH COURT IN THE CAS E OF ARUN EXCELLO FOUNDATIONS (P) LTD. VS. CIT (2013) 29 TAXM ANN.COM 149 (MADRAS) CONSIDERED AN ARGUMENT ON BEHALF OF THE RE VENUE, SIMILAR TO WHAT HAS BEEN ARGUED BEFORE US, TO THE E FFECT THAT IN THE ABSENCE OF ANY CONTEMPLATION UNDER SECTION 80-I B(10) OF THE ACT FOR PROPORTIONATE RELIEF ON PARTIAL COMPLIANCE, SECTION CANNOT BE INTERPRETED TO GRANTED PRO RATA RELIEF. THE AFOR ESAID ARGUMENT OF THE REVENUE HAS BEEN NEGATED BY THE HONBLE MADR AS HIGH COURT AND THEREFORE THE CLAIM OF THE ASSESSEE FOR P ROPORTIONATE DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT CANNOT BE DENIED. 12. THUS, ON THE AFORESAID ASPECT, ASSESSEE SUCCEED S AND WE DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE D EDUCTION UNDER SECTION 80-IB(10) OF THE ACT IN RELATION TO T HE LAKSHDWEEP PROJECT BY LIMITING THE DENIAL ONLY TO THE PROFITS IN RESPECT OF BUNGLOW G1 & G2. FOR BALANCE OF THE RESI DENTIAL UNITS, ASSESSEE SHALL BE ALLOWED DEDUCTION UNDER SECTION 8 0-IB(10) OF THE ACT. 11. FOLLOWING THE AFORESAID RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL (SUPRA) WE HOLD THAT MERELY BECAUSE THE AS SESSEE HAD VIOLATED THE PROVISIONS OF SECTION 80IB(10)(C) OF T HE ACT IN RESPECT OF TWO UNITS I.E. ROW HOUSES D-3 AND D-4, THE DEDUCTION UN DER SECTION 80IB(10) COULD NOT BE DENIED IN ENTIRETY. THE ASSESSEE IS E NTITLED TO THE SAID DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESP ECT OF BALANCE UNITS WHICH HAVE BEEN CONSTRUCTED AS PER THE CONDITIONS L AID DOWN IN SECTION 80IB(10)(C) OF THE ACT. ONLY IN RESPECT OF TWO UNI TS I.E. D-3 AND D-4, DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WOULD B E DENIED TO THE ASSESSEE. ACCORDINGLY, WE UPHOLD THE ORDER OF CIT( A) IN DIRECTING THE ASSESSING OFFICER TO RE-COMPUTE THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RELATION TO THE SAID PROJECT BY LIMI TING THE DENIAL ONLY IN RESPECT OF ROW HOUSES D-3 AND D-4 AND FOR THE BALAN CE UNITS THE ASSESSEE WOULD BE ENTITLED TO THE SAID DEDUCTION UN DER SECTION 80IB(10) OF THE ACT. THUS, THE GROUNDS OF APPEAL R AISED BY THE REVENUE ARE DISMISSED. ITA NO.360/PN/2013 M/S. SURANA MUTHA DEVELOPERS 15 15. FOLLOWING THE AFORESAID RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL (SUPRA) WE HOLD THAT MERELY BECAUSE THE AS SESSEE HAD NOT COMPLETED THE BUILDING NO.D WITHIN PRESCRIBED TIME UNDER THE PROVISIONS OF ACT, THE DEDUCTION UNDER SECTION 80IB(10) COULD NOT BE DENIE D IN ENTIRETY. THE ASSESSEE IS ENTITLED TO THE PRORATA DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF BUILDING NOS.A, B AND C WHICH HAVE BE EN CONSTRUCTED AS PER THE CONDITIONS LAID DOWN IN SECTION 80IB(10) OF THE ACT . REVERSING THE ORDER OF CIT(A), THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE PRORATA CLAIM OF ASSESSEE UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF BUI LDING NOS.A, B AND C. THUS, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AL LOWED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON THIS 10 TH DAY OF APRIL, 2015. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 10 TH APRIL, 2015. GCVSR COPY OF THE ORDER IS FORWARDED TO: - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, PUNE; 4) THE CIT-I, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE