ITO 25(2)(2), MUMBAI V. UNITY REALTORS, MUMBAI

ITA 3794/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88592 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 11-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 10-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIPUL B JOSHI
• Section: 80IB; 6

Judgement Text

, , ,, ,Q QQ Q INCOME TAX APPELLATE TRIBUNAL,MUMBAI - F BENCH , , BEFORE S/SH. I P BANSAL,JUDICIAL ME MBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.3794/MUM/2011, ! ! ! ! ' ' ' ' / ASSESSMENT YEAR-2008-09 ITO 25(2)(2), C-11, R.NO.106, PRATYAKSHA KAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA(EAST), MUMBAI-400051 VS. M/S UNITY REALTORS, D-3, VRINDAVAN CHS., PREM VALLABH, UMED ASHRAM, BORIVALI (W), MUMBAI-400092 PAN: AAAAU1284D ( #$ / ASSESSEE) ( %&#$ / RESPONDENT) ' ( / REVENUE BY :SHRI S.D. SRIVASTAVA ! )* ! )* ! )* ! )* ( ( ( ( /ASSESSEE BY :SHRI VIPUL B. JOSHI ! ! ! ! ' '' ' *+ *+ *+ *+ / DATE OF HEARING :19 - 03 -2015 ,-' ' *+ / DATE OF PRONOUNCEMENT :19 -03-2015 ! ! ! !, ,, ,1961 1961 1961 1961 ' ' ' ' 254 254 254 254( (( (1 11 1) ) ) ) *7* 8 *7* 8 *7* 8 *7* 8 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. ! : CHALLENGING THE ORDER DATED 28.02.2011 OF CIT(A)-35 ,MUMBAI,ASSESSING OFFICER (AO) HAD RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 12,84,31,175/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE U/S 80IB(10) OF THE INCOME-TAX ACT INSPITE OF THE FACT THAT THE ASSESSE E FAILED TO FULFILL THE CONDITIONS LAID DOWN THEREI N. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A ) ON THE ABOVE GROUNDS TO BE SET ASIDE AND THAT OF THE AO BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND. ASSESSEE,AN ASSOCIATION OF PERSONS (AOP),ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS, FILED ITS RETURN OF INCOME ON 28.09.2008,DECLARING THE TOTAL INCOME AT RS. NIL, AFTER CLAIMING DEDUCTION OF RS. 12.284 CRORES U/S 80IB (10) OF THE ACT.INITIALLY THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT.LATER ON THE AO SELECTED CASE FOR SCRUTINY.HE COMPLETED THE ASSESSMENT ON 31. 03.2012,U/S.143(3),DETERMINING THE INCOME OF THE AS SESSEE AT RS. 12,84,31,180/-. 2. EFFECTIVE GROUND OF APPEAL FILED BY THE AO IS ABOUT ADDITION MADE U/S 80IB(10) OF THE ACT OF RS.12.84 CRORES.DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD CLAIMED THAT PROJECT NAMELY SERENITY GARDENS HAD COMMENCED ON 21.09.2005. AS PER THE AO, THE DATE OF FIRST APPROVAL BY THE LOCAL AUTHORITY FOR THE PROJE CT WAS 31.07.1992, THAT THE APPROVAL WAS ISSUED IN THE NAME OF HARMANA J. VINCENT. HE WAS OF THE OPINI ON THAT THE PROJECT HAD COMMENCED IN JULY 1992. BEFORE HIM THE ASSESSEE CONTENTED, VIDE ITS L ETTER DT. 24.12.201, THAT EVEN THOUGH THE PLAN WAS APPROVED BY CIDCO IN THE NAME OF HARMANA J. VIN CENT BUT HE DID NOT START THE CONSTRUCTION, THAT HARMANA J. VINCENT GRANTED ALL THE DEVELOPMENT RIGHTS IN RESPECT OF THE SAID PLOT OF LAND IN QUESTION IN 2004 AND CONVEYED THE SAID PLOT TO M/S SANWAD DEVELOPERS (SD) IN 2005, THAT SD FORMED AN AOP AND STARTED CONSTRUCTION OF HOUSING P ROJECTS ONLY AFTER ITS FORMATION, THAT THE AOP HAD COME INTO EXISTENCE AFTER 01.10.1998, THAT IT C OULD NOT BE SAID THAT PROJECT COMMENCED BEFORE THAT DATE. HOWEVER, THE AO DID NOT AGREE WITH THE A SSESSEE AND TREATED THE COMMENCEMENT DATE AS ITA//3794//MUM/2011 /M/S UNITY REALTORS 2 31.07.1992. HE HELD THAT THE ASSESSEE DID NOT FULFI LL THE CONDITIONS OF COMMENCING THE PROJECT ON OR AFTER 01.10.1998 AND THEREFORE IT WAS NOT ENTITL ED TO DEDUCTION U/S 80IB(10).THE AO FURTHER NOTICED THAT THE ASSESSEE HAD OBTAINED APPROVALS OF FIVE BUILDINGS. HE HELD THAT THE ASSESSEE HAD CONSTRUCTED ONLY TWO BUILDING AND OBTAINED OCCUPANC Y CERTIFICATE FOR THE SAME BEFORE 31.03.2008, THAT AS PER SECTION 80IB(10)THE PROJECT GETTING APP ROVAL BEFORE 01.04.2004 HAD BE COMPLETED ON OR BEFORE 31.03.2008.HE WAS OF THE OPINION THAT THE AP PROVAL WAS FOR FIVE BUILDINGS,THAT THE ASSESSEE HAD TO COMPLETE ALL THE BUILDINGS. AS THE ASSESSEE HAD COMPLETED ONLY TWO BUILDING,THEREFORE,HE HELD THAT IT DID NOT FULFILL THE CONDITIONS,AS ENVI SAGED BY THE PROVISIONS OF SECTION 80IB OF THE ACT. THE AO ALSO OBSERVED THAT ASSESSEE HAD CONSTRUCTED TWO BUILDINGS OUT OF 5 BUILDINGS SANCTIONED BY THE CIDCO,THAT THE PROJECT WAS NOT COMPLETED.FUR THER THE AO HELD THAT THE ASSESSEE FURNISHED OCCUPANCY CERTIFICATE DATED 31.03.2008 ONLY IN RESP ECT OF WINGS B & C, THAT OCCUPANCY CERTIFICATE FOR WINGS G & A WAS NOT FILED. THE AO ALSO NOTICED THAT AS PER THE APPROVED PLAN THE ASSESSEE WAS TO CONSTRUCT FIVE BUILDING OF THE TOTAL LAND OF 9380 SQ MTRS., THAT IT CONSTRUCTED ONLY TWO BUILDINGS AND HAD CLAIMED CONSTRUCTION OF ENTIRE PR OJECT, THAT THE TWO BUILDINGS WERE CONSTRUCTED OF THE PLOTS ARE OF 3752 SQ. MTRS., THAT THE AREA W AS LESS THAN 1 ACRE. HE APPORTIONED THE TOTAL AREA OF LAND ON THE BASIS OF NUMBER OF BUILDINGS AND HEL D THAT THE PROJECT WAS CONSTRUCTED IN LESS THAN 1 ACRE OF LAND,THAT THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION U/S 80IB(1). 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). BEFORE HIM,IT WAS ARGUED THAT THE REQUIREMENT OF 80IB(10) WAS COMMENCEMENT OF THE PROJECT AFTER 01.10.1998 AND NOT THE APPROVA L OF PROJECT AFTER 01.10.1998, THAT THE AO WAS CONFUSED WITH THE APPROVAL OF THE PROJECT AND THE C OMMENCEMENT OF THE PROJECT, THAT THE AOP ITSELF WAS FORMED AFTER 2004,THAT EXPLANATION 1(I) BELOW SECTION 80IB(10) WAS FOR DECIDING THE DATE OF COMPLETION OF CONSTRUCTION,THAT CONDITION L AID IN THE SECTION WAS THAT THE UNDERTAKING SHOULD COMMENCE THE DEVELOPMENT OR CONSTRUCTION ON OR AFTER 1.10.1998, THAT THE DATE OF APPROVAL WAS NOT RELEVANT, THAT SAME WOULD BE RELEV ANT ONLY FOR DECIDING THE COMPLETION OF THE PROJECT ON OR BEFORE 31.03.2008.IT WAS SUBMITTED TH AT BUILDING NO.1 WAS HAVING WINGS A,B &C, THAT BUILDING THE NO.2 WAS HAVING WING G CONSISTING THE ENTIRE APPROVAL FOR GROUND+7 FLOORS, THAT D, E & F WINGS WERE TO BE SANCTIONED FOR TOTAL GROU ND+7 FLOORS ONLY AFTER RECEIPT OF TDR, THAT FOR THAT REASON FULL APPROVAL FOR WINGS G, E & F CO ULD NOT BE OBTAINED. WITH REGARD TO INCOMPLETION OF PROJECT THE ASSESSEE CONTENDED BEFORE THE FAA THAT IT HAD CLAIMED DEDUCTION ONLY IN RESPECT OF WINGS A, B, C & G, THA T ALL THE FOUR WINGS WERE COMPLETED BEFORE 31.03.2008,THAT PART OF PROJECT WAS NOT COMPLETED O N THE LAST DATE OF THE FY 2008, THAT THE ASSESSEE HAD TO START OTHER WINGS ONLY AFTER RECEIP T OF TRANSFER OF DEVELOPMENT RIGHTS, THAT DEDUCTION COULD NOT BE DENIED TO IT ON THE GROUND T HAT REMAINING PORTION OF THE PROJECT APPROVED WAS NOT COMPLETED, THAT IT HAD SUBMITTED OCCUPANCY CERTIFICATE IN RESPECT OF WINGS B, C & A, THAT THE AO WRONGLY HELD THAT THE ASSESSEE DID NOT FILE OCCUPANCY CERTIFICATE IN RESPECT OF WINGS G & A, THAT FOR WINGS B & C OCCUPANCY CERTIFICATE WAS I SSUED ON 31.03.2008, THAT FOR THE WINGS A & G NECESSARY CERTIFICATE WAS ISSUED BY THE LOCAL AUT HORITIES ON 10.01.2007, THAT BOTH THE CERTIFICATES WERE PRODUCED BEFORE THE AO, THAT THE AO HIMSELF IN HIS NOTICE DATED 21.12.2010 HAD ACCEPTED THE FACT THAT THE ASSESSEE HAD COMPLETED FOUR WINGS I.E. A, B, C & D.REGARDING THE AREA OF PLOT OF LAND IT WAS ARGUED THAT THE AO HAD APPORTIONED LAND AREA BASED ON THE NUMBERS OF BUILDING, THAT ITA//3794//MUM/2011 /M/S UNITY REALTORS 3 THE APPROACH OF THE AO WAS NOT AS PER LAW, THAT THE TOTAL PROPOSED BUILD UP AREA WAS 9116.65 MTRS.,THAT THE ASSESSEE HAD COMPLETED BUILT UP AREA OF 6097.78 SQ. MTRS.,THAT THE PROPORTIONATE WORKING BASED ON BUILT AREA WOULD BE 6273 SQ.MTRS., THAT THE PROPORTIONATE LAND AREA WAS MORE THAN 1ACRE,THAT REQUIREMENT OF SECTION 80IB(10) WAS THAT AREA OF THE PROJECT APPROVED BY THE LOCAL AUTHORITY SHOULD BE MORE THAN 1 ACRE IRRESPECTIVE O F THE FACT THAT SOME BUILDINGS MIGHT NOT BE ELIGIBLE FOR DEDUCTION U/S. 80IB(10).THE ASSESSEE RELIED UPON THE CASE OF VANDNA PROPERTY (ITA/ 1253/MUM/07, DATED 29.04.2009) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AN D ASSESSMENT ORDER THE FAA HELD THAT THE AOP WAS FORMED AFTER 01.10.1998,THAT THEREFORE QUESTION OF COMMENCEMENT OF A PROJECT BEFORE THAT DATE WOULD NOT ARISE, THAT THE AO DID NOT CORRECTLY AND PROPERLY APPRECIATE THE DIFFERENCE BETWEEN APPROVAL OF THE PROJECT AND COMMENCEMENT OF THE PRO JECT. HE REFERRED TO THE DECISION OF JYESH K. MARU(ITA 4350/MUM/2007,ITA/464/MUM/2007- DATED 04.0 8.2009 FOR THE AYS. 2003-04 AND 2004-05) AND HELD THAT REQUIREMENT OF SECTION 80IB( 10) WAS COMMENCEMENT OF PROJECT AND NOT FROM THE DATE OF ISSUE OF CERTIFICATE FROM THE LOCA L AUTHORITY APPROVING THE PROJECT.ACCEPTING THE PLEA TAKEN BY THE ASSESSEE THAT IT HAD COMMENCED TH E PROJECT AFTER 01.010.1998,HE HELD THAT THE AO WAS NOT JUSTIFIED IN DENYING DEDUCTION TO THE AS SESSEE U/S. 80IB(10) OF THE ACT. WITH REGARD TO COMPLETION OF PROJECT THE FAA HELD T HAT THERE WAS NO PROVISION IN SECTION 80IB(10) TO COMPLETE THE WHOLE PROJECT FOR CLAIMING DEDUCTION,THAT THE ASSESSEE WOULD BE ENTITLED TO DEDUCTION IN RESPECT OF THE PROFITS DERIVED DURI NG THE YEAR AS LONG AS THE PROJECT WAS APPROVED BY THE LOCAL AUTHORITIES AND FULFILLED OTHER CONDIT IONS, THAT IF SOME PORTION OF THE PROJECT WAS NOT COMPLETE BEFORE 31.03.2008 THE ASSESSEE WOULD NOT B E ENTITLED TO DEDUCTION IN RESPECT OF SUCH INCOMPLETE PORTION, THAT IT DID NOT MEAN THAT IT WO ULD NOT BE ENTITLED TO THE DEDUCTION IN RESPECT OF THE PROFIT DERIVED FROM THE BUILDING FOR WHICH THE OCCUPANCY CERTIFICATE WAS RECEIVED, THAT THE AO NOWHERE HAD MENTIONED THAT THE ASSESSEE DID NOT FIL E OCCUPANCY CERTIFICATE FOR WING A & G, THAT WHILE PASSING THE ASSESSMENT ORDER HE HAD NOTICED T HAT OCCUPANCY CERTIFICATE DATED 31.03.2008 WAS IN RESPECT OF WINGS B & C, THAT THE AO OMITTED TO SEE THE OCCUPANCY CERTIFICATE 01.10.2007 FOR WINGS A & G. THE FAA HELD THAT THE ASSESSEE COM PLETED FOUR WINGS I.E. A, B, C & G, THAT THE AO HIMSELF HAD ACCEPTED THE COMPLETION OF FOUR WINGS IN THE SHOW CAUSE NOTICE ISSUED ON 21.10.2010,THAT IT WOULD BE ENTITLED TO DEDUCTION U /S. 80IB(10) IN RESPECT OF PROFIT DERIVED FROM CONSTRUCTION OF ABOVE FOUR WINGS. FINALLY, HE HELD THAT AO WAS NOT JUSTIFIED IN DENYING THE DEDUCTION IN RESPECT OF WINGS A, B, C & G, THAT THE CONSTRUCTION WAS COMPLETED AND OCCUPANCY CERTIFICATE WERE RECEIVED BEFORE MARCH 2008.THE FAA FURTHER HELD THAT THE PROJECT AREA HAS APPROVED BY THE LOCAL AUTHORITY HAD TO BE SEEN IRRE SPECTIVE OF THE FACT THAT SOME BUILDINGS IN THE PROJECT WOULD NOT BE QUALIFIED FOR DEDUCTION, THAT THE AO WRONGLY APPORTIONED THE LAND AREA BETWEEN THE BUILDING AND SAME WAS NOT PERMISSIBLE, THAT TOTAL AREA OF THE APPROVED PROJECT HAD TO BE CONSIDERED FOR ALLOWANCE DEDUCTION U/S. 80IB(10) . FINALLY, HE HELD THAT OBJECTION TAKEN BY THE AO WERE NOT CORRECT, THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S 80IB(10) OF THE ACT. 4. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR) SUPPORTED THE ORDER OF THE AO.AUTHORISED REPRESE -NTATIVE(AR)RELIED UPON THE CASE OF VANDANA PROPERT IES (353ITR 36),DELIVERED BY THE HONBLE JURISDICTION HIGH COURT. ITA//3794//MUM/2011 /M/S UNITY REALTORS 4 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE AO HAD DENIED THE DEDUCTION BECAUSE HE WAS OF THE OPIN ION THAT THE PROJECT HAD COMMENCED IN THE YEAR 1992 AND THAT THE AREA OF THE PROJECT WAS LESS THAN 1 ACRE.IT IS FACT THAT THE AOP CAME INTO EXISTENCE AFTER 2004 AND BECAME THE OWNER OF THE PL OT OF LAND IN 2005, THAT IT HAD RECEIVED THE OCCUPANCY CERTIFICATE FOR FOUR WINGS NAMELY A, B, C & G ON OR BEFORE 31.03.2008.IT IS ALSO A FACT THAT THE PLOT OF LAND FOR WHICH THE LOCAL AUTHORITY HAD GIVEN APPROVAL WAS MORE THAN 1 ACRE. HERE,WE WOULD LIKE TO REFER TO THE CASE OF VANDANA PROPERTY (SUPRA). FACT OF THE CASE ARE THAT ON A PLOT OF LAND MEASURING 2.36 ACRES SITUATED AT KANDI VALI (WEST), MUMBAI, THE ASSESSEE CONSTRUCTED BUILDINGS A, B, C AND D OVER A PERIOD OF YEARS. INT IMATION OF APPROVAL IN RESPECT OF THOSE BUILDINGS WAS GRANTED DURING THE YEARS 1993 TO 1996 . BY FOLLOWING THE WORK-IN-PROGRESS METHOD OF ACCOUNTING, THE ASSESSEE OFFERED TO TAX THE INCO ME EARNED BY CONSTRUCTING BUILDINGS A, B, C AND D FROM TIME TO TIME. DEDUCTION UNDER SECTION 80-IB( 10) OF THE ACT ON THE INCOME EARNED FROM BUILDINGS A, B, C AND D WAS NOT CLAIMED AS THE APPR OVAL FOR CONSTRUCTION OF THOSE BUILDINGS WERE GRANTED PRIOR TO 01.10.1998. PURSUANT TO AN ORDER P ASSED BY THE STATE GOVERNMENT IN THE YEAR 2001 PERMITTING CONVERSION OF THE STATUS OF THE LAND, TH E ASSESSEE BECAME ENTITLED TO CONSTRUCT AN ADDITIONAL BUILDING E ON THE PLOT OF LAND. ACCORDIN GLY, THE BUILDING PLAN FOR CONSTRUCTION OF THE BUILDING E WITH SEVERAL RESIDENTIAL UNITS ON THE PL OT OF LAND WAS SUBMITTED BY THE ASSESSEE. BY AN INTIMATION DATED 11.10.2002, THE BUILDING PLAN OF E CONSISTING OF VARIOUS RESIDENTIAL UNITS WAS APPROVED BY THE MUNICIPAL CORPORATION SUBJECT TO VA RIOUS CONDITIONS SET OUT THEREIN. THEREAFTER, COMMENCEMENT CERTIFICATE FOR CONSTRUCTION OF THE E BUILDING WAS ISSUED ON 10.03.2003. IN THE RETURN OF INCOME FILED FOR ASSESSMENT YEARS 2004-05 AND 2005-06 , THE ASSESSEE ESTIMATED ITS PROFITS FROM THE E BUILDING BY FOLLOWING THE WORK-I N-PROGRESS METHOD OF ACCOUNTING AND CLAIMED DEDUCTION UNDER SECTION 80-IB(10) AT RS. 71,42,590 AND RS. 71,73,660 RESPECTIVELY. THE AO DISALLOWED THE CLAIM FOR THE FOLLOWING REASONS : (A ) THE APPROVAL FOR E BUILDING WAS GRANTED ON 11.10.2002, AS AN EXTENSION OF THE APPROVALS GRANTE D FOR A, B, C AND D BUILDINGS COMMENCING FROM JUNE 09.06.1993, AND, THEREFORE, E BUILDING BE ING CONTINUATION OF A, B, C AND D BUILDINGS, THE PROJECT MUST BE HELD TO HAVE COMMENCED PRIOR TO 01.10.1998, AND, HENCE, NOT ELIGIBLE FOR SECTION 80-IB(10) DEDUCTION ; (B) A, B, C, D AND E BUILDINGS WERE CONSTRUCTED ON A PLOT ADMEASURING 2.36 ACRES AND THE LAND WAS PROPORTIONA TELY DIVIDED BETWEEN THE FIVE BUILDINGS, THE LAND PERTAINING TO E BUILDING WOULD BE LESS THAN ON E ACRE AND, HENCE, DEDUCTION UNDER SECTION 80- IB(10) COULD NOT BE ALLOWED ; (C) DURING THE SURVEY , IT WAS NOTICED THAT TWO FLATS ON THE GROUND FLOOR OF E BUILDING WERE FOUND TO BE MERGED INTO ON E FLAT AND SINCE THE AREA OF THE MERGED FLATS EXCEEDED 1000 SQ. FT, THE DEDUCTION UNDER SECTION 8 0-IB(10) COULD NOT BE GRANTED.IN THE APPELLATE PROCEEDINGS,THE FAA UPHELD THE ORDER OF THE AO, BUT THE TRIBUNAL HELD THAT THE ASSESSEE WAS ENTITLED TO THE SPECIAL DEDUCTION.ON APPEAL THE HON BLE COURT HELD AS UNDER: THE OBJECT OF SECTION 80-IB(10) OF THE INCOME-TAX ACT, 1961, IN GRANTING DEDUCTION EQUAL TO ONE HUNDRED PER CENT. OF THE PROFITS OF AN UNDERTAKING ARISING FROM DEVELOPING AND CONSTRUCTING A HOUSING PROJECT IS WITH A VIEW TO BOOST THE STOCK O F HOUSES FOR LOWER AND MIDDLE INCOME GROUPS, SUBJECT TO FULFILLING OF THE SPECIFIED CONDITIONS. THE EXPRESSION HOUSING PROJECT IS NEITHER DEFINED UNDER SECTION 2 OF THE ACT NOR UNDER SECTION 80-IB( 10) OF THE ACT. EVEN UNDER THE MUMBAI MUNICIPAL CORPORATION ACT, 1998, AS ALSO UNDER THE DEVELOPMENT CONTROL REGULATIONS FOR GREATER MUMBAI,1991,THE EXPRESSION HOUSING PROJECT IS NOT DEFINED. THEREFORE, THE EXPRESSION HOUSING PROJECT IN SECTION 80-IB(10) WOULD HAVE TO BE CONS TRUED AS COMMONLY UNDERSTOOD. THE EXPRESSION HOUSING PROJECT IN COMMON PARLANCE WOULD MEAN CON STRUCTING A BUILDING OR GROUP OF BUILDINGS ITA//3794//MUM/2011 /M/S UNITY REALTORS 5 CONSISTING OF SEVERAL RESIDENTIAL UNITS. THEREFORE, IT IS CLEAR THAT CONSTRUCTION OF EVEN ONE BUILDING WITH SEVERAL RESIDENTIAL UNITS OF THE SIZE NOT EXCE EDING 1000 SQ. FT WOULD CONSTITUTE A HOUSING PROJECT UNDER SECTION 80-IB(10) . MOREOVER, A PLAI N READING OF SECTION 80-IB(10) DOES NOT EVEN REMOTELY SUGGEST THAT THE PLOT OF LAND HAVING MINIM UM AREA OF ONE ACRE MUST BE VACANT. THE SECTION ALLOWS DEDUCTION TO A HOUSING PROJECT (SUBJ ECT TO FULFILLING ALL OTHER CONDITIONS) CONSTRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE A ND IT IS IMMATERIAL AS TO WHETHER OR NOT ANY OTHER HOUSING PROJECTS ARE EXISTING ON THE PLOT OF LAND.THE EXPLANATION TO SECTION 80-IB(10)(A) REFERS TO THE APPROVAL GRANTED TO THE SAME HOUSING PROJECT MORE THAN ONCE AND WOULD NOT APPLY WHERE THE APPROVAL IS GRANTED TO DIFFERENT HOUSING PROJECTS.. THAT WHEN THE PLANS FOR A, B, C AND D BUILDINGS WERE APPROVED DURING THE PERIOD FRO M 1993 TO 1996, CONSTRUCTION OF THE E BUILDING WAS NOT EVEN CONTEMPLATED ON THE PLOT. IT WAS ONLY IN THE YEAR 2001 WHEN THE STATUS OF THE LAND WAS CONVERTED FROM SURPLUS VACANT LAND INTO WI THIN THE CEILING LIMIT LAND BY THE STATE GOVERNMENT, THAT AN ADDITIONAL BUILDING COULD BE CO NSTRUCTED ON THE PLOT AND ACCORDINGLY THE BUILDING PLAN FOR CONSTRUCTION OF THE E BUILDING WA S SUBMITTED AND THE PLAN WAS APPROVED BY THE LOCAL AUTHORITY ON OCTOBER 11, 2002. WHERE NEITHER THE ASSESSEE HAD SOUGHT APPROVAL OF THE BUILDING PLAN FOR CONSTRUCTION OF THE E BUILDING AS AN EXTENSION OF THE EARLIER HOUSING PROJECT, NOR THE MUNICIPAL CORPORATION HAD GRANTED APPROVAL FOR THE HOUSING PROJECT CONSISTING OF THE E BUILDING AS AN EXTENSION OF THE EARLIER HOUSING PRO JECT, IT WAS NOT OPEN TO THE INCOME-TAX AUTHORITIES TO CONTEND THAT THE APPROVAL TO THE HOU SING PROJECT GRANTED BY THE MUNICIPAL CORPORATION ON OCTOBER 11, 2002, CONSTITUTED EXTENS ION OF THE HOUSING PROJECT WHICH WAS APPROVED IN THE YEAR 1993. THE CONSTRUCTION OF E BU ILDING CONSTITUTED AN INDEPENDENT HOUSING PROJECT AND, THEREFORE, THE DATE ON WHICH THE EARLI ER HOUSING PROJECT HAD COMMENCED CONSTRUCTION COULD NOT BE APPLIED TO THE HOUSING PROJECT CONSIST ING OF THE E BUILDING MERELY BECAUSE THE CONDITIONS SET OUT WHILE GRANTING APPROVAL TO THE E ARLIER HOUSING PROJECT HAD ALSO BEEN MADE APPLICABLE TO THE HOUSING PROJECT IN QUESTION. (II) THAT SECTION80-IB(10)WHILE SPECIFYING THE SIZE OF THE PLOT OF LAND, DOES NOT SPECIFY THE SIZE OR THE NUMBER OF HOUSING PROJECTS THAT ARE REQUIRED TO BE UNDERTAKEN ON A PLOT HAVING A MINIMUM AREA OF ONE ACRE. (III) THAT THE TRIBUNAL ON APPRECIATION OF THE FACT S AND THE EVIDENCE ON RECORD ARRIVED AT THE CONCLUSION THAT THERE WAS NO MERGER OF FLATS AND IN FACT BOTH THE FLATS IN QUESTION WERE NEITHER SOLD NOR WAS ANY APPLICATION MADE BEFORE THE LOCAL AUTHO RITY SEEKING MERGER OF TWO FLATS ON THE GROUND FLOOR OF THE E BUILDING. THE ASSESSEE WAS ENTITLED TO THE SPECIAL DEDUCTION UNDER SECTION80- IB(10)IN RESPECT OF THE E BUILDING. WE FIND THAT THE FAA HAS,AFTER CONSIDERING THE SIZE OF THE PLOT OF LAND HAS GIVEN A CATEGORICAL FINDING OF FACT THAT IT MEASURED MORE THAN 1 ACRE.T HE AO HAD NOT CONSIDERED THE OCCUPANCY CERTIFICATE OF TWO BUILDING THOUGH SAME WERE PRODUC ED BEFORE HIM.IT IS ALSO A FACT THAT THE ASSESSEE HAD STARTED AND COMPLETED THE HOUSING PROJECT WITHI N THE STIPULATED TIME FRAME I.E.BEFORE 31.03.2008.CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE,WE ARE OF THE OPINION THAT THE ORDER PASSED BY THE FAA DOES NOT SUFFER FROM ANY LE GAL OR FACTUAL INFIRMITY.THEREFORE,CONFIRMING THE SAME,WE DECIDE EFFECTIVE GROUND OF APPEAL AGAIN ST THE AO. AS A RESULT,APPEAL FIELD BY THE AO STANDS DISMI SSED 9*: ! )* + ; < ' 7 != ' * >? . ORDER PRONOUNCED IN THE OPEN COURT ON 19TH, MARCH, 2015. 8 ' ,-' @ A! 19 , EKPZ , ,, , 201 5 - ' 7 C SD/- SD/- ( /I P BANSAL) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, A! /DATE: 19.03.2015 ITA//3794//MUM/2011 /M/S UNITY REALTORS 6 SK 8 8 8 8 ' '' ' %*D %*D %*D %*D ED'* ED'* ED'* ED'* / COPY OF THE ORDER FORWARDED TO : 1. / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT(A)/ F G , 4. THE CONCERNED CIT / F G 5. DR F BENCH, ITAT, MUMBAI / DH7 %*! , ,, ,Q QQ Q , . . . 6. GUARD FILE/ 7 9 &D* %* //TRUE COPY// 8! / BY ORDER, I / > DY./ASST. REGISTRAR , /ITAT, MUMBAI.