Dy. CIT, Central Circle 2(1), Pune V. Ashray Premises Pvt. Ltd., Pune

ITA 400/PUN/2013

• Counselvise Citation: 40024514 RSA 2013
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 08-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K M ODI SHRI WALIMBE
• Assessee Lawyers: VIPIN GUJARATHI
• Keywords: Value adopted by valuation officer
• Section: 143(3); 133A; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.398 TO 400/PN/2013 A.Y. 2004-05, 2005-06, 2006-07 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(1), PUNE APPELLANT VS. ASHRAY PREMISES PVT. LTD. BLUE HILL SOCIETY, OPP. NAGAR ROAD, PUNE-411006 PAN:AAACA8294P RESPONDENT APPELLANT BY : SHRI A.K. M ODI, SHRI WALIMBE RESPONDENT BY : SHRI VIP IN GUJARATHI DATE OF HEARING: 23.10.2013 DATE OF ORDER : 28.10.2013 ORDER PER SHAILENDRA KUMAR YADAV, JM ALL THESE APPEALS HAVE BEEN FILED BY THE REVENUE A GAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL, PUNE [(IN SHORT CIT(A)(C)], PUNE DATED 20/ 11/2012 FOR A.Y. 2004-05, 2005-06 AND 2006-07 RESPECTIVELY. SO THEY ARE DISPOSED OF BY COMMON ORDER FOR THE SAKE OF CONVENI ENCE. 1. IN 398/PN/2013, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS: 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD CIT(A) HAS ERRED IN ALLOWING CLAIM OF DEDUCTION U/S 80IB(10) OF THE I.T. ACT, 1961 FOR A PROJECT AP PROVED PRIOR TO 1.10.1998, IGNORING EXPLANATION (I) TO SEC TION 80IB(10) OF I. T. ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD CIT(A) IS NOT JUSTIFIED IN ALLOWING D EDUCTION U/S 80IB(10) OF I. T. ACT FOR A PROJECT APPROVED ON 28/8/1997, WHEN PROVISIONS OF SECTION 80IB(10) WER E NOT EXISTING IN THE STATUTE. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD CIT(A) BE VACATED AND THAT OF THE ASSESSING OFFICER'S ORDER M AY BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MO DIFY ANY OF THE ABOVE GROUNDS RAISED, ANY OTHER GROUNDS AT THE TIME OF PROCEEDINGS BEFORE THE HON'BLE TRIBUNAL WHI CH MAY PLEASE BE GRANTED. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS ENGAGED IN THE BUSINESS OF DEVELOPING AND CONSTRUCTING RESIDEN TIAL AS WELL AS COMMERCIAL PROJECTS IN AND AROUND PUNE. AS THE REG ISTERED OFFICE OF THE COMPANY EARLIER IN MUMBAI, THE ASSESSEE WAS ASSESSED TAX WITH ITO, WD.8(1)(1), MUMBAI. DURING THE PERIOD RE LEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE C OMPANY WAS ENGAGED IN CONSTRUCTING A HOUSING PROJECT NAMED GO LD COAST AT LOHEGAON, PUNE. TO EXAMINE THE ELIGIBILITY FOR DED UCTION CLAIMED U/S.80-IB(10), THE ASSESSING OFFICER CARRIED OUT AC TION U/S. 133A AT THE SITE ON 10.01.2005. BASED ON THE FINDINGS M ADE DURING SURVEY, THE ASSESSING OFFICER DENIED THE ASSESSEE T HE BENEFIT OF DEDUCTION U/S. 80-IB(10) AND COMPLETED THE ASSESSME NT U/S. 143(3) OF THE I.T. ACT DETERMINING THE TOTAL INCOME AT RS.8,37,80,440/-. THE ASSESSEE PREFERRED AN APPEAL BEFORE CIT, MUMBAI. THE CONCERNED CIT ALLOWED THE ASSESSEES E LIGIBILITY FOR DEDUCTION U/S.80-IB(10). THE DEPARTMENT PREFERRED AN APPEAL AGAINST THE SAID ORDER OF CIT. WHILE THE SAME WAS PENDING BEFORE ITAT, MUMBAI, AN ACTION U/S. 132 OF THE ACT WAD CON DUCTED 3 AGAINST ASSESSEE ON 10/08/2009. IN CONSEQUENCE OF THE SEARCH, THE CONCERNED DCIT, CENTRAL CIRCLE COMPLETED THE IM PUGNED ASSESSMENT ORDER U/S. 153A R.W.S. 143(3) OF THE I.T ACT ONCE AGAIN DISALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FI LED AN APPEAL BEFORE CONCERNED CIT(A) ON THE FOLLOWING GROUNDS: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE DCIT, CENTRAL CIRCLE 2(1), PUNE (THE LEARNE D ASSESSING OFFICER) HAS ERRED AND IS NOT JUSTIFIED I N DISALLOWING THE DEDUCTION OF RS.8,24,36,363/- CLAIM ED U/S. 80IB(10) OF THE I.T. ACT IN RESPECT OF THE HOU SING PROJECT GOLD COAST WITHOUT APPRECIATING THE FACTS OF THE CASE IN CORRECT PERSPECTIVE. THE APPELLANT HEREBY PRAYS THAT THE DEDUCTION MAY PLEASE BE ALLOWED. 2) THE APPELLANT HEREBY RESERVES THE RIGHT TO ADD, AME ND, ALTER, DELETE, OR RAISE ANY ADDITIONAL GROUND/S ON OR BEFORE THE DATE OF HEARING. 3. HAVING CONSIDERED THE ASSESSMENT ORDER, STATEMEN T OF FACTS, DETAILED WRITTEN SUBMISSIONS MADE ON BEHALF OF ASSE SSEE AS WELL AS VERBAL EXPRESSIONS PROVIDED BY LEARNED AUTHORIZE D REPRESENTATIVE, CIT(A) DISPOSED OF APPEAL AS UNDER: 4. GROUND NO.1 : UNDER THIS GROUND OF APPEAL, IT I S CONTENDED THAT THE ASSESSING OFFICER ERRED IN DISAL LOWING DEDUCTION TO THE EXTENT OF RS.8,24,36,363/-UNDER SE CTION 80-16(10) IN RESPECT OF THE APPELLANT'S HOUSING PRO JECT 'GOLD COAST'. 4.1 AS ALREADY MENTIONED, AN ASSESSMENT UNDER SECTION 143(3) WAS ORIGINALLY COMPLETED IN THE APPELLANT'S CAS ON 28/12/2006. PRIOR TO COMPLETION OF ASSESSMEN T, A SURVEY HAD BEEN CONDUCTED IN THE APPELLAN T'S CASE ON 10/01/2006 DURING THE COURSE OF WHICH DETA ILED MEASUREMENTS OF HOUSING UNITS COMPRISING THE PROJEC T WERE TAKEN BY THE SURVEY TEAM AND DETAILED STATEMENTS OF CUSTOMERS WHO HAD PURCHASED THE UNITS AS WELL AS EMPLOYEES / MANAGERS OF THE APPELLANT COMPANY WERE RECORDED. IN CONSEQUENCE OF THE ABOVE, THE AO CO NCLUDED THAT THE ASSESSEE HAD DELIBERATELY AND SYSTEMATICAL LY SHOWN 4 SINGLE RESIDENTIAL UNITS AS TWO SEPARATE UNITS. WHE N TAKEN TOGETHER, THE BUILT UP AREA OF THE UNITS, ACCORDING TO THE AO, EXCEEDED THE PRESCRIBED LIMIT OF 1500 SQ.FT. ADDITI ONALLY, THE AO ALSO MADE A FINDING THAT THE PROJECT WAS ORIGINA LLY APPROVED IN 1997 (I.E., PRIOR TO 01.10.1998) ARID F OR THIS REASON ALSO, DID NOT QUALIFY FOR DEDUCTION. BASED ON THESE FINDINGS WHICH ARE DISCUSSED AT LENGTH IN HIS VOLUM INOUS ASSESSMENT ORDER, THE AO DENIED THE BENEFIT OF SECT ION 80- 18(10) TO THE APPELLANT. 4.2 WHEN THE MATTER WENT IN APPEAL BEFORE THE LD. CIT(A ), AFTER CAREFUL CONSIDERATION OF THE FACTUAL AND LEGA L POSITIONS, THE LD.CIT(A) HELD AS FOLLOWS :- I) THAT THE PROJECT COMMENCED DURING FY 2002-03 AND NOT BEFORE 1/10/1998 AS HELD BY THE AO. II) THAT THE APPELLANT ITSELF HAS NOT DISPUTED THE FACT THAT THE ADJOINING FLATS MENTIONED BY THE AO COMPRISED A SIN GLE RESIDENTIAL UNIT. HOWEVER, UNDER THE DEFINITION OF 'BUILT-UP AREA' AS IT APPLIED IN RELATION TO THE APPELLANT'S PROJECT EVEN WHEN THE AREA OF THE SAID ADJOINING UNITS ARE TAKEN TOGETHER, BUILT UP AREA DOES NOT EXCEED 1500 SQ.FT. BASED ON THE ABOVE FINDINGS, THE CIT(A) ALLOWED THE APPELLANT'S APPEAL AND HELD THE APPELLANT TO BE ELIGIBLE FOR DEDUCTION UNDER SE CTION 80IB(10). 4.3 THE SAID ORDER OF THE LD.CIT(A) WAS APPEALED AG AINST BY THE DEPARTMENT. DURING THE PENDENCY OF THE SAID A PPEAL, HOWEVER, A SEARCH WAS CONDUCTED IN THE APPELLANT'S CASE ON 11/09/2009 IN CONSEQUENCE WHEREOF, THE PRESENT ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 153A W AS PASSED BY THE AO ON 30/12/2011. IN THE SAID ORDER, THE LD. AO HAS RELIED SOLELY UPON THE ORIGINAL ASSESSMENT O RDER PASSED UNDER SECTION 143(3) ON 28/12/2006. IT IS AG AINST THIS ORDER OF THE AO THAT THE PRESENT APPEAL WAS FI LED BY THE ASSESSEE ON 30/01/2012. 4.4 DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS , THE LD. AR OF THE APPELLANT BROUGHT TO MY NOTICE THAT A N ORDER DT.17/04/2012 HAS SINCE BEEN PASSED BY THE HON'BLE ITAT, MUMBAI, 'H' BENCH. I HAVE CAREFULLY PERUSED THE SAI D ORDER OF THE HON'BLE MUMBAI BENCH OF ITAT IN THE APPELLAN T'S OWN CASE FOR THE SAME AY WHEREIN THE ITAT HAS UPHELD TH E ORDER OF CIT(A) ALLOWING THE ASSESSEE'S APPEAL AND HAS DI SMISSED THE DEPARTMENT'S APPEAL AGAINST THE SAID ORDER OF T HE LD.CIT(A). AS THE MATTERS UNDER APPEAL HEREIN ARE C OVERED COMPREHENSIVELY IN THE SAID ORDER OF THE HON. ITAT, THE 5 ENTIRE TEXT OF THE SAID JUDGMENT IS REPRODUCED , VE RBATIM BELOW :- 'THESE THREE APPEALS ARE REVENUE APPEALS AGAINST TH E ORDERS OF THE CIT (A)-8 MUMBAI OR A.Y 2004-05 TO 20 06-07 ON THE ISSUE OF DEDUCTION UNDER SECTION 801B (10).I T'S ASSESSING OFFICER'S CASE THAT ASSESSEE WAS NOT ELIG IBLE FOR DEDUCTION UNDER SECTION 801B (10) AS THE SAID HOUSI NG PROJECT SHOULD COMMENCE ON OR AFTER 1/10/1998, WHER EAS THE ASSESSEE'S PROJECT NAMED 'GOLD COAST' STARTED M UCH EARLIER. THE OTHER REASON FOR NOT CONSIDERING THE D EDUCTION WAS ON THE REASON THAT THE BUILT UP AREA OF SOME RE SIDENTIAL UNITS EXCEED 1500 SFT AND THEREFORE THE ASSESSEE WA S NOT ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IB(10). 2. THE CIT (A) AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE GAVE RELIEF ON BOTH ISSUES AND ACCORDINGLY REVENUE RAISED ONLY ONE GROUND IN ALL THE THREE YEARS COMMO NLY STATING THAT THE CIT (A) ERRED IN DELETING THE DISA LLOWANCE OF DEDUCTION OF RS,8,24,36,363 IN AY 2004-05, RS.2,66, 09,494 IN AY2005-06 AND RS.2,91,58,525 IN AY 2006-07 UNDER SECTION 80IB(1C) WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. BRIEFLY STATED, ASSESSEE UNDERTOOK A PROJECT NAMED 'GOLD COAST' AT LOHEGAON, PUNE. THE PROJECT WAS INI TIATED IN 1995-96 BY PURCHASE OF LAND AND SHOWING SOME WORK I N PROGRESS OF '.4,67,701/-. FIRST LAY OUT PLAN WAS SA NCTIONED ON 28.8.1997. SUBSEQUENTLY THE PLANS WERE REVISE D ONCE ON 30/05/2000 AND THEN ON 22/01/2002. THE ASSESSEE GOT NON-AGRICULTURAL USE PERMISSION (NA ORDER) BY 5/4/2 012. ASSESSEE STARTED THE PROJECT AFTER THE PLAN WAS APP ROVED ON 22.01.2002. THE FIRST PLINTH CHECKING CERTIFICATE W AS ISSUED BY THE PUNE MUNICIPAL CORPORATION ON 17.7.2002. IT IS ALSO ON RECORD THAT BHUMI PUJA OF THE PROJECT WAS STARTE D ON 26.01.2002 AND SUBSEQUENTLY THE ASSESSEE RECEIVED A DVANCE FOR SALE OF APARTMENT. 3.1 THERE WAS A SURVEY ON THE ASSESSEE'S BUSINESS O N 10/01/2006 AND IN THE COURSE OF THE SURVEY, SOME APARTMENTS WERE MEASURED BY THE ASSESSING OFFICER W HICH INDICATED THAT THE BUILT UP AREA EXCEED 1500 SFT. A STATEMENT WAS RECORDED FROM ONE OF THE DIRECTOR WHO ON THE BA SIS OF THE MEASUREMENTS TAKEN THEREON AND ON THE ADVICE OF THE COUNSEL WITHDREW THE CLAIM IN THE COURSE OF SURVEY. THIS WAS REITERATED ON THE NEXT DAY OF THE SURVEY IN THE OFFICE OF THE ASSESSING OFFICER. HOWEVER, SUBSEQUENTLY THE STATEMENT WAS WITHDRAWN BY FILING AFFIDAVIT AND 6 CONTENDING THAT THE FLATS WERE NEVER HAVING AN AREA OF MORE THAN 1500 SFT AND IN SUPPORT FILED ARCHITECT CERTIF ICATE, REVISED PLANS FROM THE PUNE MUNICIPAL CORPORATION. THE ASSESSING OFFICER ALSO REFERRED THE MATTER TO THE D VO WHO CERTIFIED THAT AREA OF THE FLATS WAS LESS THAN 1500 S#. IN THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HOWEVE R, CONSIDERED THAT THE HOUSING PROJECT STARTED BEFORE 1.I0.1998 AND RELIED ON THE EXPENDITURE INCURRED BY ASSESSEE TOWARDS THE PROJECT AS STATED IN BALANCE SHEET OF THOSE YEA RS. IT WAS ALSO THE CONTENTION THAT EVEN THOUGH THE PLANS WERE REVISED SUBSEQUENTLY, THE DATE OF APPROVAL WAS TO BE TAKEN AS AUGUST, 1997. THEREFORE, AO HELD THAT ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION ON THE SAID PROJECT UNDER SE CTION 80IB(10). THE CONTENTION OF THE ASSESSEE THAT THE N .A. PERMISSION, BHUMI PUJA, RECEIPT OF ADVANCE AND RELY ING ON THE PUNE ITAT DECISION IN NIRMITI CONSTRUCTIONS, 95 TTJ 117 PUNE WERE NOT ACCEPTABLE TO AO. IN ADDITION TO THE ABOVE, THE ASSESSING OFFICER ALSO, BASED ON THE SURVEY REP ORT AND REJECTING DEO'S FINDINGS, DENIED THE DEDUCTION UNDE R SECTION 80IB(10) ON THE REASON THAT THE ASSESSEE CONSTRUCTE D THE APARTMENT OF MORE THAN 1500 SFT PARTICULARLY OF ADJ OINING FLATS WHICH WERE ENQUIRED IN THE COURSE OF SURVEY. 3.2 BEFORE THE CIT (A), ASSESSEE HAS CONTESTED ALL THE ISSUES, PLACED NECESSARY EVIDENCES AND THE PLANS TO SUBMIT THAT EVEN THOUGH THE PLAN WAS ORIGINALLY APPROVED I N 1997, THE ASSESSEE COULD NOT GO AHEAD AS THERE WAS NO APP ROACH LAND AND THEREFORE, THE ASSESSEE ACQUIRED SOME MORE LAND AND GOT THE PLANS REVISED AND REAPPROVED AND CONSTR UCTION WAS ACCORDING TO THE REVISED PLAN APPROVED IN 2002. IT WAS ALSO SUBMISSION THAT PLINTH BEAMS WERE CERTIFIED IN 2002 AND CERTIFICATE FROM DISTRICT COLLECTOR, PUNE REGAR DING CONFIRMATION OF N.A. LAND WAS ALSO RECEIVED IN 2002 . WITH REFERENCE TO THE BUILT UP AREA OF THE FLAT, ASSESSE E SUBMITTED THE ARCHITECT CERTIFICATE, REVISED MEASUREMENTS AND FURTHER RELIED ON DVO REPORT THAT THE FLATS WERE LESS THAN 1500 SQ. FT. ON CONSIDERING THE ASSESSEE SUBMISSIONS, THE CI T (A) GAVE THE FOLLOWING FINDINGS ON THE TWO ISSUES AS UN DER: A) ON PROJECT COMMENCEMENT: I HAVE CAREFULLY CONSIDERED THE STAND OF THE A.O. AS WELL AS THE SUBMISSION OF THE APPELLANT. THE FACTS WHICH EMERGE ARE 7 A) THE NA ORDER WAS GRANTED BY THE COLLECTOR OF PUNE ON 5TH APRIL 2002 AND THIS IS A CRUCIAL DATE F OR RECKONING THE WHOLE ISSUE. B) THE CONSTRUCTION OF HOUSING PROJECT IS IN ACCORDANCE WITH THE BUILDING LAYOUT PLAN APPROVE D ON 22 ND JANUARY, 2002 AND IS NOT IN ACCORDANCE WITH EARLIER APPROVED PLAN DATED 20TH AUGUST 1997. THE A.O. IS NOT JUSTIFIED IN HOLDING THAT THE PLACEMEN T OF THE PLINTHS OF THE BUILDINGS IS NOT AN IMPORTANT IS SUE AS THE APPELLANT CHANGED THE BUILDING LAYOUT PLAN I N THE MIDDLE OF THE PROJECT. IF THE PROJECT WOULD HAV E STARTED - BEFORE 1 OCTOBER 1998 THE PLACEMENT OF TH E PLINTHS OF THE BUILDING WOULD HAVE ACCORDING TO THE BUILDING LAYOUT PLAN SANCTIONED ON 20TH AUGUST 1997 . IN THIS CONNECTION, I AM IN AGREEMENT WITH THE APPELLANT THAT IT IS NOT POSSIBLE TO REMOVE PLINTHS . C) THE BUILDING COMMENCEMENT CERTIFICATE IS DATED 22 ND JANUARY 2002 WHICH HAS NOT BEEN PROPERLY APPRECIATED BY THE A. O. D) THE FIRST PLINTH CHECKING CERTIFICATE IS DATED 17TH JULY 2002. THE A. O. CLEARLY FELL INTO ERROR IN HO LDING THAT SPEED OF THE WORK IS SLOW THEN THE PI/NT H CHECKING CERTIFICATE SHALL BE AUTOMATICALLY AT A LA TER STAGE OF THE PROJECT. THE SPEED CANNOT BE SO MUCH SLOW THAT CONSTRUCTION STARTED IN 1997 WOU LD GET FIRST PLINTH CHECKING CERTIFICATE IN THE YEAR 2 002. SECONDLY, NO EXPENDITURE IS INCURRED BY THE APPELLA NT BEFORE FINANCIAL YEAR 2001-02. E) THE ADVERTISEMENT IN THE NEWS PAPER REGARDING THE COMMENCEMENT OF THE PROJECT IS DATED 15 MAY 200 2 AND THIS FACT CANNOT BE BRUSHED ASIDE AS HAS BEEN DONE BY THE A.O. F) THE FIRST RECEIPT OF ADVANCE BOOKING MONEY WAS IN THE FINANCIAL YEAR 2002-03 IS CLEARLY INDICATIVE OF THE FACT THAT THE CONSTRUCTION WOULD HAVE STARTED AROUN D THE DATE OF RECEIPT OF ADVANCE. G) THE EXPENDITURE INCURRED BEFORE 31ST MARCH, 2002 WAS CLEARLY NOT ON THE DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT, BUT WAS FOR PAYME NT 8 TO LAND OWNERS, DEVELOPMENT CHARGES PAID TO LOCAL AUTHORITY, NA CHARGES, SITE SURVEY EXPENSES, ADVA NCES PAID TO ARCHITECT FOR PREPARATION OF THE PLAN ETC . THERE IS DIFFERENCE BETWEEN THE STEPS TAKEN FOR THE DEVELOPMENT OF LAND FOR MAKING IT SUITABLE FOR DEVELOPMENT AND CONSTRUCTION OF PROJECT AND COMMENCEMENT OF DEVELOPMENT AND CONSTRUCTION OF THE PROJECT. STEPS TAKEN FOR DEVELOPMENT OF LAND SUITAB LE FOR CONSTRUCTION CANNOT BE CONSIDERED AS COMMENCEMENT OF HOUSING PROJECT. H) THE A.O. IS NOT JUSTIFIED IN BRUSHING ASIDE THE DECISION OF PUNE IT AT DECISION IN THE CASE OF NIRM ITI CONSTRUCTION EVEN THOUGH IT IS NOT BINDING ON HIM WITHOUT APPRECIATING THE PROVISIONS OF MAHARASHTRA LAND REVENUE CODE. THE A.O. CLEARLY FAIL INTO ERROR IN HOLDING THAT THE APPELLANT IS ABLE TO EVADE THE PEN ALTY UNDER THE PROVISIONS OF MAHARASHTRA LAND REVENUE CODE WITHOUT MAKING ANY REFERENCE TO THE OFFICE OF COLLECTOR OF PUNE AS TO WHETHER ANY PENALTY PROCEED INGS WERE INITIATED AGAINST THE APPELLANT BY THE SAID OF FICE. I) STATEMENT OF MR. B L DAREKAR CANNOT BE TAKEN AT THE FACE VALUE AS THERE ARE GLARING INCONSISTENCIES AND CONTRADICTIONS IN THE SAME AND THEREFORE, IT CANNOT BE CONSIDERED OF ANY SIGNIFICANCE OR RELEVANCE. J) THE A. O. IS ALSO NOT JUSTIFIED IN HOLDING THAT BHOOMI POOJAN IS DONE CORDING TO THE CONVENIENCE OF THE APPELLANT. SUCH EVENTS ARE VERY IMPORTANT IN IN DIA. THEREFORE, IN VIEW OF THE ABOVE FACTS AND ISSUES INVOLVED, I AM OF THE VIEW THAT THE HOUSING PROJECT INDEED COMMENCED DURING THE FINANCIAL YEAR 2002-03 AND NOT BEFORE 1ST OCTOBER 1998'. B) WITH REFERENCE TO THE AREA OF EACH FLAT: THE ISS UES RAISED IN THIS GROUND HAS BEEN CAREFULLY PERUSED AND EXAMI NED. THE FACTS WHICH COME TO LIGHT ARE AS UNDER: - A) THE STATEMENT OF THE DIRECTOR OF THE APPELLANT COMPANY WAS TAKEN AFTER 27 HOURS OF SURVEY ACTION. B) THE RECONFIRMATION OF THE WITHDRAWAL OF CLAIM WAS RECORDED IN THE OFFICE OF THE A.O. WITH A GAP OF ON E DAY AFTER THE CONCLUSION OF THE SURVEY. THE APPELLANT D ID 9 NOT GET ANY OPPORTUNITY TO CARRY OUT THE MEASUREMEN T INDEPENDENTLY. C) MR.KANTILAL LUNKAD MADE ADMISSION OF WITHDRAWAL OF CLAIM ON THE BASIS OF BUILT UP MEASUREMENT OF FLAT NO D1/701+701A WAS SHOWN TO HIM. THE DECLARATION WAS UNDER THE MISTAKEN BELIEF OF FACT THAT THE BUILT UP AREA OF THE ADJOINING UNITS TAKEN TOGETHER EXCEEDS 1500 SQ. FT BUILT UP. D) MR. VIPIN GUJARATHI, CHARTERED ACCOUNTANT ADVISED MR. KANTILAL LUNKAD ON THE BASIS OF THE MEASUREMENT CARRIED OUT BY SURVEY PARTY AND THEREFORE, THE COUNSEL WAS ALSO UNDER MISTAKEN BELI EF OF FACT. E) THE STATEMENT RECORDED DURING THE COURSE HAS EVIDENTIARY VALUE. HOWEVER, THE ASSESSEE CAN REBUT THE STATEMENT IF IT IS GIVEN UNDER MISTAKEN BELIEF OF F ACT OR MISTAKEN BELIEF OF LAW OR THE ASSESSEE IS ABLE TO B RING OUT THE MISTAKE OR CONTRADICTION TO THE SURFACE. IN CASE OF THE APPELLANT THE WHOLE ISSUE RANGES ON THE BUIL T UP AREA OF THE RESIDENTIAL UNIT. THE SURVEY PARTY MEAS URED THE FLAT NO D-1/701+701A AT 2040 SQ. FT WHEREAS THE AVO, THE EXPERT DEPUTED BY THE ASSESSING OFFICER, MEASURED THE SAME FLAT AT 1478 SQ. FT. THE A.O. HAS AT NO PLACE EXPLAINED OR JUSTIFIED THE BUILT UP AREA O F 2040 SQ. FT. INSTEAD HE HAS PREFERRED TO FIND FAULTS WIT H HIS OWN DEPARTMENTAL VAH.ER. THEREFORE, THE ADMISSION O F THE APPELLANT REGARDING WITHDRAWAL OF CLAIM WHICH I S BASED SOLELY ON THE AREA STATEMENT OF THE FLAT NO DI/7V1 + 701A IS NOT CORROBORATED WITH ANY MATERIAL OR EVIDENCE. THE SURVEY PARTY RECORDED THE STATEMENTS OF THE FLA T HOLDERS/OCCUPANTS AT THE TIME OF SURVEY ACTION. THE ASSESSING OFFICER HAS RELIED ON THESE STATEMENTS FO R MAKING DISALLOWANCE AND THE APPELLANT HAS CHALLENGE D THE SAME. THE A.O. REPRODUCED THE STATEMENTS OF THE FLAT HOLDERS IN WHICH QUESTIONS REGARDING TWO DOORS , STRUCTURAL CHANGES, TWO KITCHENS ETC WERE ASKED. TH E ENTIRE ENDEAVOUR OF THE A.O. WAS TO BRING HOME THE POINT THAT THE APPELLANT HAD JOINED THE ADJOINING T HE FLATS AND WHICH WERE NOT SEPARATE UNITS. HOWEVER, T HE APPELLANT IS NOT DISPUTING THE SAME. THEREFORE, STATEMENTS OF THE FLAT HOLDERS AS FAR AS JOINING OF UNIT IS NOT IMPORTANT. AS FAR AS THE BUILT UP AREA OF THE F LAT IS CONCERNED, THE OCCUPANTS/FLAT HOLDERS HAVE STATED SUPER BUILT UP AREA. THE APPELLANT HAS SUBMITTED TH E COPIES OF THE AGREEMENT WITH THE SAID FLAT HOLDERS FROM 10 WHICH IT IS CLEAR THAT THE APPELLANT HAS SOLD FLATS ON CARPET AREA BASIS. THE CARPET AREA INCLUSIVE OF BAL CONY AREA AND AIR HANDLING UNIT AREA OF THE SAID FLATS A S PER AGREEMENTS ON RECORD ARE AS FOLLOWS NAME OF THE FLAT HOLDER FLAT NO CARPET AREA OF THE FLAT INCLUDING BALCONY AND AHU AREA BALCONY & AHU AREA NET CARPET AREA MR.SATYENDRA SAIN B3/301+301A 943.78 148.11 795.68 MR.RAJSHEKHAR SAJJAN Z-1/303+303A 1089.62 149.30 9430.33 MR.ADARSH KANODIA A-1/401+401A 1137.86 74.93 1062.93 MRS. PRITI BERRY D-1/701+701A 1347.22 233.90 1113.32 THEREFORE, IF THE NET CARPET AREA EXCLUDING THE BAL CONY AREA AND THE AIR HANDLING UNIT AREA IS CONSIDERED A ND THE THICKNESS OF THE WALL IS ADDED THE BUILT UP ARE A OF THE UNIT CANNOT EXCEED 1500 SQ. FT. MRS. PR/F/ BERRY STATED THE SUPER BUILT UP AREA OF THE FLAT NO D-1/701 + 701A AT 1800 SQ. FT. OF THE FIAT UNDER CONSIDERATION IS 1347 SQ. FT. IT IS SURPRISING TO N OTE THAT THE MEASURED THE SAME FLAT AT 1700 SQ. FT (CARPET A REA) AND 2040 BUILT UP. THE APPELLANT HAS SUBMITTED THE RECONCILIATION BETWEEN THE MEASUREMENT TAKEN BY SURVEY PARTY AND MEASUREMENT CERTIFIED BY VALUER. T HE A.O. HAS PREFERRED NOT TO ADDRESS THE RECONCILIATIO N ISSUE. THERE IS NO WHISPER ABOUT THE SAME IN THE ASSESSMENT ORDER. SIMILARLY, THE APPELLANT IS NOT ALLOWED THE OPPORTU NITY TO CROSS EXAMINE MRS. PRITI BERRY. THE CLAIM OF THE APPELLANT THAT MRS. PRITI BERRY IS NOT THE FLAT PUR CHASER AND THEREFORE, HER STATEMENT CANNOT BE RELIED UPON. I HAVE VERIFIED THE AGREEMENT OF FLAT PURCHASE. IT IS BETWEEN THE APPELLANT AND MR. SUNIL BERRY. DURING THE COURSE OF SURVEY ACTION STATEMENTS OF TH E EMPLOYEES OF THE APPELLANT MR. RATIESH MALHOTRA AND MR. RAMESH KADAM WERE RECORDED. NO SPECIFIC INSTANCES OF ANY FLAT MORE THAN 1500 SQ. FT BUILT U P IS SHOWN BY ANY OF THESE TWO EMPLOYEES. THEY HAVE MADE GENERAL STATEMENTS THAT THE BUILT UP AREA OF TWO FL ATS 11 TAKEN TOGETHER IS MORE THAN 1500 SQ. FT. IN FACT, M R. RATIESH MALHOTRA HAS STATED THAT THE BUILT UP AREA OF THE RESIDENTIAL UNIT IS ABOUT 1250 SQ. FT. THEREFOR E, THE STATEMENTS OF THE EMPLOYEES ARE NOT IMPORTANT OR RELEVANT FROM THE VIEW POINT OF DETERMINATION OF TH E ISSUE UNDER CONSIDERATION. THE APPELLANT HAS SUBMITTED A COPY OF 'RECORD PLAN' AS APPROVED BY PUNE MUNICIPAL CORPORATION AFTER THE COMPLETION OF THE BUILDINGS. PUNE MUNICIPAL CORPORATION HAS APPROVED THE RECORD PIAN ALONG WITH FSI OF EACH FLOOR AREA OF THE BUILDINGS. FROM THE F SI STATEMENTS APPROVED BY PMC, THE BUILT UP AREA OF EA CH RESIDENTIAL UNIT SEEMS TO BE MUCH LESS THAN 1500 SQ . FT. THE ASSESSING OFFICER HAS NOT CONSIDERED THE RECORDED PLAN AT ALL. THE ASSESSMENT ORDER IS SILEN T ON THIS ISSUE. THE A. O. HAS REJECTED THE ARCHITECT'S CERTIFICATE OF BUILT UP AREA OF RESIDENTIAL UNITS ON THE GROUND THAT THE CERTIFICATES HAS BEEN ISSUED WITHOUT VERIFYING THE AREA OF THE UNITS AND THE CERTIFICATE DOES NOT MENTIONED THAT THE RESIDENTIAL UNITS HAVE BEEN CONSTRUCTED IN ACCORDANCE WITH THE APPROVED PLAN. I HAVE VERIFIED THE CERTIFICATE. THE CLAIM OF THE APPELLANT THAT ARCHIT ECT HAS ISSUED CERTIFICATE ON THE BASIS OF RECORD PLAN CANN OT BE DISPUTED AND IS CORRECT. THEREFORE, THE A.O. IS NOT JUSTIFIED IN REJECTING THE CERTIFICATE AS VAGUE OR INCOMPLETE. THE APPELLANT GOT TWO FLATS MEASURED BY THE GOVERNMENT APPROVED VALUER AND SUBMITTED THE CERTIFICATE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE A.O. DID NOT REFER TO THE CERTIFIC ATE AT ALL IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER NEITHER ACCEPTED NOR REJECTED NOR EVEN ACKNOWLEDGED THE FACT THAT THE APPELLANT HAS SUBMITTED THE CERTI FICATE IN RESPECT OF BUILT UP AREA ISSUED BY APPROVED VALU ER. THE A.O. AT PARA NO. 24 (D) HAS REPRODUCED THE AREA STATEMENT AS PER THE BOOKING/SALES REGISTER FOUND DURING THE COURSE OF SURVEY ACTION AND HAS REACH TH E CONCLUSION THAT MANY FLATS ARE MORE THAN 1500 SQ. F T OR MORE. THE APPELLANT HAS CLAIMED THAT THE AREAS MENTIONED IN THE REGISTER ARE SUPER BUILT UP AREAS OF THE FLATS. THE APPELLANT HAS REPRODUCED THE SAME LI ST WITH THE ADDITIONAL COLUMNS SUCH AS TOTAL CARPET AR EA OF THE UNIT INCLUDING BALCONY AND AIR HANDLING UNIT AREA, BALCONY AREA, AIR HANDLING UNIT AREA AND NET CARPET AREA OF THE FLATS AGAINST WHICH THE BUILT UP AREA 12 CERTIFIED BY ARCHITECT IS MENTIONED. FROM THE LIST IT IS CLEAR THAT THE AREA MENTIONED IN THE SALES REGISTER IS SUPER BUILT UP AREA AND NOT THE BUILT UP AREA. THE ASSESSING OFFICER DID NOT ACCEPT THE BUILT UP A REA CERTIFIED BY ASSISTANT VALUATION OFFICER ENTIRELY O N THE GROUND THAT THE A VO HAS CONSIDERED AREA OF THE BALCONY AND DID NOT CONSIDERED THE TERRACE AREA. ACCORDINGLY TO THE ASSESSING OFFICER IF 50% OF THE BALCONY AREA AND TERRACE AREA IS ADDED THE BUILT UP AREA OF THE FLAT WILL EXCEEDS 1600 SFT. THE ASSESSI NG OFFICER IN ARRIVING AT THIS CONCLUSION HAS RELIED O N THE DEFINITION OF 'BUILT UP AREA' AS PER NEWLY INSERTED SECTION 801B(14) OF THE ACT SECTION 8018(14) IS BRO UGHT ON STATUE BY THE FINANCE (NO. 2) ACT 2004 WITH EFFE CT FROM P' APRIL 2005. THE SECTION AND THE NOTES ON THE CLAUSES MAKES IT C LEAR THAT THE NEWLY INSERTED SECTION IS APPLICABLE PROSPECTIVELY AND NOT RETROSPECTIVELY. THE AMENDMEN T IS NOT CLARIFICATORY. THE APPELLANT HAS RELIED ON T WO SUPREME COURT CASES NAMELY GOVINDAS AND OTHERS VS. INCOME TAX OFFICER 103 ITR 123 (1976) VIRTUAL SOFT SYSTEMTS LTD VS CIT 289 ITR 83 TO SUBSTANTIATE THE PROPOSITION THAT WHILE INTERPRETING THE AMENDING PROVISION IT IS NOT RETROSPECTIVELY APPLICABLE UNLESS EXPRESSLY STATED OR CLEARLY IMPLIED. I AM IN AGREEMENT WITH THE APPELLA NT THAT' THE EXPRESSION BUILT UP AREA SHOULD HAVE BEEN CONSTRUED IN ACCORDANCE WITH DEFINITION OF BUILT UP AREA AS PER DEVELOPMENT CONTROL RULE FOR DEVELOPMENT OF PUNE WHICH EXCLUDES THE BALCONY AREA. THE PERUSAL OF THE BUILT AREA CERTIFICATE ISSUED BY THE GOVERNMENT APPROVED VALUER AND AVO SHOWS THAT THE FLATS OF THE SIMILAR TYPE FLAT FOR E.G. FLAT NO 701 +7014 OF BUILDING NO D-1 IS MEASURED BY AVO AT 1471 SQ. F T. BUILT UP AND FLAT NO 101+IOIA BUILDING NO D-1 IS MEASURED BY GOVERNMENT APPROVED VALUER AT 1448 SQ. FT. BUILT UP. FROM THE TYPICAL FLOOR PLAN OF THE BUILDING D-1 IT IS ABSOLUTELY CLEAR THAT FLAT NO 101 IS EXACTLY BELOW THE FLAT NO 701. THESE FLATS CANNOT HAVE DIFFERENT AREA AS PER THE RCC DESIGN. THE BUILT UP AREAS CERTIFIED BY BOTH THE VALUERS IS MORE OR LESS SAME I. E 1478 SQ. FT AND 1448 SQ.FT. THE ASPECT WHICH HAS BEEN TOTALLY IGNORED BY THE A. O. 13 THEREFORE, I AM OF THE VIEW THAT THE BUILT UP AREA OF NONE OF THE RESIDENTIAL FLAT EXCEEDED THE THRESHOLD LIMIT OF 1500 SQ. FT BUILT UP AND THE ASSESSING OFFICER I S NOT JUSTIFIED IN DENYING THE DEDUCTIONS UNDER SECTION 801B(10) IN RESPECT OF THE PROFIT DERIVED FROM HOUS ING PROJECT. IN VIEW OF COMPLIANCE OF THE CONDITIONS PRESCRIBED BY SECTION 8010), I AM OF THE VIEW THAT THE APPELLANT IS ENTITLED TO DEDUCTION CLAIMED UNDER SECTION 8018(10 ) FOR THE ASSESSMENT YEAR 2004-05 RS.8,24,36,363/- AN D FOR THE ASSESSMENT YEAR 2005-06 RS. 2,66,09,494/-. TO CONCLUDE, THE APPELLANT SUCCEEDS IN RESPECT OF F IRST GROUND OF APPEAL AND THE GROUND OF APPEAL IS HEREBY ALLOWED. THE REVENUE IS AGGRIEVED. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE REITERAT ED THE ARGUMENTS OF THE ASSESSING OFFICER TO SUBMIT THAT T HE PLAN WAS ORIGINALLY APPROVED IN 1997 I.E. PRIOR TO 1/10/ 1998. HE RELIED ON EXPLANATION TO SEC 80 IB(10) TO SUBMIT TH AT ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION. THE LEARNE D COUNSEL, HOWEVER, REITERATED THE SUBMISSIONS MADE B EFORE THE CIT (A) AND ALSO DREW OUR ATTENTION TO THE PLAN APPROVED IN 1997 AND PLAN APPROVED IN 2002 TO SUBMIT THAT TH E PLANS WERE ENTIRELY REVISED, ALIGNMENTS WERE DIFFICULT AN D WITH REFERENCE TO THE EXPENDITURE INCURRED IN THE YEAR 1 995, HE DREW OUR ATTENTION TO THE NATURE OF THE EXPENDITURE TO SUBMIT THAT ASSESSEE HAS NEVER STARTED THE PROJECT BUT ONLY INCURRING EXPENDITURE TOWARDS PURCHASE OF LAND AND CONSTRUCTION OF COMPOUND WALL, MUNICIPAL TAXES ETC. AND RELIED ON THE FINDINGS OF THE CIT (A). 5. WE HAVE EXAMINED THE ISSUE, RIVAL CONTENTIONS AN D FACTS ON RECORD. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE EXPLANATION TO SECTION 80IB(10) THAT WHERE T HE APPROVAL WAS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE O N WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY. THIS EXPLANATION WAS BROUGHT O N STATUTE WHEN THE SAID PROVISION WAS AMENDED WITH EFFECT FRO M 01- 04-2005. SO CLAIM IN AY 2004-05, BEING FIRST YEAR O F CLAIM, CANNOT BE DISALLOWED ON THIS REASON. 5.1 MOREOVER THE EXPLANATION CANNOT BE INVOKED FOR THE PROJECTS APPROVED EARLIER. FOR THESE REASONS W E ARE NOT IMPRESSED BY THE ARGUMENT OF LD. DR. FURTHER WHAT W AS APPROVED IN 1997 WAS ONLY A LAY OUT PLAN AND NOT A BUILDING 14 PLAN. THE ENTIRE PLAN WAS REVISED AND THE CONSTRUCT ED PROJECT WAS BASED ON THE PROJECT APPROVED IN 2002. 5.2 BENEFIT OF DEDUCTION TO DEVELOPERS OF HOUSING P ROJECTS WAS FIRST INTRODUCED BY THE FINANCE ACT, 1998 WITH EFFECT FROM 1-4-1999 IN THE FORM OF SUB-SECTION (4F) TO SE CTION 80- 1A OF THE ACT. THOSE PROVISIONS READ AS FOLLOWS: 'THIS SECTION APPLIES TO AN UNDERTAKING ENGAGED IN DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B Y A LOCAL AUTHORITY SUBJECT TO THE CONDITION THAT THE SIZE OF A PLOT OF LAND HAS A MINIMUM AREA OF ONE ACRE AND THE RESIDEN TIAL UNIT HAS A MAXIMUM BUILT-UP AREA NOT EXCEEDING ONE THOUSAND SQUARE FEET: PROVIDED THAT THE UNDERTAKING SUCH UNDERTAKING COMM ENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES TH E SAME BEFORE 31ST DAY OF MARCH, 2001.' 5.3 BY THE FINANCE ACT, 1999 WITH EFFECT FROM 1-4-2 000, THE BENEFIT OF THE ABOVE DEDUCTION WAS AVAILABLE UN DER SECTION 80-18(10). THE SAID PROVISIONS READ AS FOL LOWS: '(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT S APPROVED BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT T O ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLE TES THE SAME BEFORE 31ST DAY OF MARCH, 2003; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE; (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITY OF DELHI OR MUMBAI OR WITHIN TWENTY- FIVE KILOMETRES FROM THE MUNICIPAL L IMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE;' 5.4 BY THE FINANCE ACT, 2000 WITH EFFECT FROM 1-4-2 001, THE WORDS 'BEFORE 31ST DAY OF MARCH, 2001' WERE INS ERTED AFTER THE WORDS 'HOUSING PROJECT APPROVED'. THUS, ALL CONDITIONS FOR GRANT OF DEDUCTION REMAINED THE SAME EXCEPT THAT THE APPROVAL OF LOCAL AUTHORITY FOR THE DEVELO PMENT HAS TO BE OBTAINED BEFORE 31ST DAY OF MARCH, 2001. 15 5.5 FOR ASSESSMENT YEAR 2002-03, THE LAW APPLICABLE WAS THAT THE CONDITION REGARDING COMPLETION OF THE PR OJECT BEFORE 31-3-2003 WAS DISPENSED WITH. 5.6 FOR ASSESSMENT YEARS 2003-04 AND 2004-05, THE LAW APPLICABLE WAS THAT ALL CONDITIONS REMAINED THE SAM E EXCEPT THE CONDITION REGARDING APPROVAL OF THE PROJECT BY THE LOCAL AUTHORITY WHICH COULD BE BEFORE 31-3- 2005. ANOTHER IMPORTANT CHANGE WAS THAT THE PERIOD OF COM PLETION OF THE CONSTRUCTION ON OR BEFORE 31-3-2003 WAS DISP ENSED WITH AND THERE WAS NO TIME-LIMIT GIVEN FOR COMPLETI ON OF THE CONSTRUCTION. 5.7 BY THE FINANCE ACT, 2004 WITH EFFECT FROM 1-4-2 005, CLAUSE (D) TO SECTION 80-18(10) WAS INTRODUCED WHIC H PROVIDED THAT BUILT-UP AREA OF SHOPS OR OTHER COMME RCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT SHOU LD NOT EXCEED 5 PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR 2,000 SQ.FT., WHICHEVER IS LESS. THE PROVISION AS THEY READ APPLICABLE FROM ASSESSMENT Y EAR 2005-06 IS AS FOLLOWS: '(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT S APPROVED BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT T O ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, (A) S UCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTIO N : (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPR OVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 20 04, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR , IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY TH E LOCAL AUTHORITY. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE,- (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PR OJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE O N WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE 16 COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING P ROJECT IS ISSUED BY THE LOCAL AUTHORITY : PROVIDED THAT NOTHING CONTAINED IN CLAUSE (A) OR CL AUSE (B) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACC ORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF E XISTING BUILDINGS IN AREAS DECLARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTI FIED BY THE BOARD IN THIS BEHALF; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE; (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITY OF DELHI OR MUMBAI OR WITHIN TWENTY -FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIE S AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; (D) THE BUILT-UP AREA OF THE SHOPS AND OTH ER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING P ROJECT DOES NOT EXCEED FIVE PER CENT OF THE AGGREGATE BUIL T-UP AREA OF THE HOUSING PROJECT OR TWO THOUSAND SQUARE FEET, WHICHEVER IS LESS.' AS PER THE AMENDED LAW IN VIEW OF INSERTION OF CLAU SE (D) THE BUILT-UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENT INCLUDED IN THE HOUSING PROJECT SHOUL D NOT EXCEED FIVE PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR 2,000 SQ.FT., WHICHEVER IS LESS' . 6. AS CAN BE SEEN FROM THE ABOVE EXPLANATION BROUGH T IN STATUTE, THE SAME WAS NOT APPLICABLE TO THE PROJECT S APPROVED PRIOR TO 01-04-05 AND AS CAN BE SEEN FROM THE PLANS AND THE FINDINGS OF THE CIT (A), THERE IS NO CO-RELATION WITH THE PROJECT APPROVED IN 1997 BY THE P.M.C. TO THE SUBSEQUENT PROJECT APPROVED. THE PLANS WHICH ARE AP PROVED ON WHICH THE BASIS FOR CONSTRUCTION OF THE PRESENT BUILDING WAS APPROVED IN 2002 AND ACCORDINGLY THEY ARE WITHI N THE PROVISIONS OF SECTION 80(18)10. 7. MOREOVER, THE STATUTE PRESCRIBES THAT 'SUCH UNDERTAKING COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER 1ST DAY OF OCTOBER, 1993. APPROVAL OF PLANS AND THE DATE THERE OF HAS NO RELEVANCE UNLESS THE PROJECT COMMENCES OR COMMEN CED AS PRESCRIBED. THE REVENUE COULD NOT COUNTER THE FI NDINGS OF THE CIT (A) THAT PROJECT COMMENCED ONLY IN 2002. TH ESE FINDINGS ARE BASED ON RECORD WITH WHICH WE AGREE. A O RELIES 17 ON CERTAIN AMOUNTS SPENT PRIOR TO 2002 FROM A.Y 199 5-96 ONWARDS TO STATE THAT THE PROJECT HAS STARTED MUCH EARLIER. AS SEEN FROM THE NATURE OF EXPENDITURE, THEY CANNOT BE CONSIDERED AS EVIDENCING THAT THE PROJECT HAS COMME NCED BEFORE 1ST OCTOBER 1998 AS ONLY COST OF LAND, CONST RUCTION OF COMPOUND WALL AND MUNICIPAL TAXES AND VARIOUS EXPENDITURES FOR PLAN APPROVALS WERE INCURRED. THERE IS NO EXPENDITURE ON CONSTRUCTION ACTIVITY ON THE PROJECT. PRINCIPLES LAID DOWN BY HON'BLE BOMBAY HIG H COURT IN THE CASE OF VANDANA PROPERTIES IN IT A NO 3633 O F 2009 /4361OF 2010 DT 28-03-12 ALSO SUPPORT OUR VIEW. FOR THESE REASONS, WE UPHOLD THE ORDERS OF THE CIT (A) AND AG REE WITH HIS FINDINGS THAT ASSESSEE IS ELIGIBLE FOR DEDUCTIO N UNDER SECTION 80(IB)(10). 8. WITH REFERENCE TO THE OTHER REASON ON DENYING TH E CLAIM THAT THE ASSESSEE HAS SOLD ADJOINING FLATS OF MORE THAN 1500 SFT, THE MEASUREMENTS WERE TAKEN AGAIN AND POST SUR VEY EVEN DEPARTMENTAL VALUATION OFFICER HAS CERTIFIED T HAT EVEN THE COMBINED FLAT WAS LESS THAN 1500 SFT. IN VIEW O F THESE, THERE IS NO NEED TO DIFFER FROM THE FINDINGS OF THE CIT (A) WHO NOT ONLY CONSIDERED THE FACTS BUT A/SO VALIDITY OF THE MEASUREMENTS TAKEN DURING THE SURVEY AND SUBSEQUENT STATEMENT RECORDED FROM THE DIRECTOR ON THE ISSUE. WE AGREE WITH HIS FINDINGS AND AFFIRM HIS ORDER. ACCORDINGLY THE GROUNDS RAISED PY THE REVENUE IN ALL THE THREE YEAR S ARE DISMISSED. 9. IN THE RESULT, REVENUE APPEALS ARE DISMI SSED.' 4.5 FROM THE ABOVE, IT IS SEEN THAT THE MATTERS UND ER APPEAL IN THE PRESENT CASE STAND FULLY COVERED IN FAVOUR O F THE APPELLANT BY THE ORDER OF HON. ITAT, MUMBAI IN THE APPELLANT'S OWN CASE FOR THE VERY SAME ASSESSMENT Y EAR WHICH RESULTED FROM THE ORIGINAL ASSESSMENT ORDER P ASSED U/S. 143(3) PRIOR TO SEARCH ACTION. THOUGH A SEARC H ACTION U/S. 132 HAS SINCE BEEN CONDUCTED IN THE APPELLANT S CASE WHICH HAS RESULTED IN THE ASSESSMENT ORDER U/S. 143 (3) R.W.S. 153A WHICH IS IN APPEAL BEFORE ME, UPON CARE FUL PERUSAL OF THE SAID ASSESSMENT ORDER, IT IS SEEN TH AT NO FRESH LIGHT IS THROWN ON THE ASSESSEES ELIGIBILITY FOR D EDUCTION U/S. 80IB(10), NOR IS THERE ANY MENTION OF ANY SEIZED MA TERIAL WHICH MAKES A MATERIAL DIFFERENCE IN THIS REGARD. AS SUCH, RESPECTFULLY FOLLOWING THE DECISION OF CIT(A) WHICH HAS BEEN UPHELD BY THE ITAT, MUMBAI, I HEREBY ALLOW THIS GRO UND OF APPEAL. 18 4. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF REVENUE. THUS, AGREEING WITH THE FINDING OF THE CI T(A) WE FIND THAT THE MATTER IN PRESENT APPEAL IS COVERED IN FAV OUR OF THE ASSESSEE BY THE ORDER OF ITAT IN ASSESSEES OWN CAS E FOR SAME ASSESSMENT YEAR, WHICH ORIGINATED FROM ORIGINAL ASS ESSMENT ORDER BY U/S.143(3) PRIOR TO SEARCH AND CONFIRMED BY HON BLE HIGH COURT. THE SEARCH ACTION U/S. 132 HAS SINCE BEEN CONDUCTED IN THE APPELLANTS CASE WHICH HAS RESULTED IN THE ASSE SSMENT ORDER U/S. 143(3) R.W.S. 153A WHICH IS IN APPEAL BEFORE U S. UPON CAREFUL PERUSAL OF THE SAID ASSESSMENT ORDER, IT WA S SEEN THAT NEITHER FRESH LIGHT WAS THROWN ON THE ASSESSEES EL IGIBILITY FOR DEDUCTION U/S. 80IB(10), NOR THERE WAS ANY MENTION OF ANY SEIZED MATERIAL WHICH MAKES A MATERIAL DIFFERENCE IN THIS REGARD. AS SUCH, PRESENT CIT(A) FOLLOWING THE DECISION OF CIT( A) WHICH IN TURN HAS BEEN UPHELD BY THE ITAT, MUMBAI, HAS ALLOWED TH IS GROUND OF APPEAL. THUS CIT(A) ON THE LINE OF ITAT DECISION O F ASSESSEE FOR SAME YEAR ON SAME ISSUE AS DISCUSSED ABOVE HAS ALLO WED THE APPEAL OF THE ASSESSEE WHICH NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. SIMILAR ISSUE AROSE IN ITA NOS .399 AND 400/PN/2013 FOR A.Y. 2005-06 AND 2006-07 RESPECTIVE LY. FACTS BEING SIMILAR TO THAT OF A.Y. 2004-05, SO FOLLOWING SAME REASONING, THE APPEALS FILED BY THE REVENUE FOR THE SE TWO YEARS ARE ALSO DISMISSED. 5. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED AS DISCUSSED ABOVE. PRONOUNCED IN THE OPEN COURT ON THE DAY OF 28 TH OCTOBER 2013. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 28 TH OCTOBER 2013 19 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A),CENTRAL, PUNE 4) THE CIT, CENTRAL, PUNE 5) THE DR, B BENCH, I.T.A.T., PUNE. 6) GUARD FILE //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE