Deputy Commissioner of Income-tax, V. Pride Purple Sheth, Pune

ITA 424/PUN/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6938 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 11-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRA
• Assessee Lawyers: NIKHIL PATHAK SUHAS BORA
• Keywords: Search and seizure; Retrospective amendment; Question of law; Valuation report; Competent authority
• Section: 234B; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 424 /P U N/20 1 6 / ASSESSMENT YEAR : 20 11 - 12 THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1(1) , PUNE . / APPELLANT VS. PRIDE PURPLE SHETH , 504, CORPORATE PLAZA, NEXT TO CHATURSHINGI TEMPLE, PUNE 400016 . / RESPONDENT PAN: AA IFP 9064D / APPELLANT BY : MS. NIRUPAMA KOTRA, CIT / RESPONDENT BY : S /S HRI NIKHIL PATHAK / SUHAS BORA / DATE OF HEARING : 07 . 12 .2017 / DATE OF PRONOUNCEMENT: 20 . 1 2 .2017 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) - 13 , PUNE , DATED 15 .12.2015 RELATING TO ASSESSMENT YEAR 20 11 - 12 AGAINST ORDER PASSED UNDER SECTION 1 43(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80IB(10) OF THE INCOME TAX ACT, 1961 DESPITE THERE BEING A FINDING OF FACT THAT SO ME OF THE UNITS WERE HAVING AREA MORE THAN THE STIPULATED AREA OF 1500 SQ.FT. AS PER CLAUSE (C) OF THE SAID SECTION. 2 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN NOT FOLLOWING JUDICIAL PRECEDENT LAID DOWN BY THE HON B LE ITAT, PUNE IN RESPECT OF AREA OF UNITS AND ALLOWABILITY U/S 80IB(10) LAID DOWN IN THE CASE OF KUMAR BUILDER CONSORTIUM. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE ASSESSEE S APPEAL DESPITE THERE BEING A CLEAR FINDING THAT UNITS WERE SOLD TO FAMILY MEMBERS, WHICH WAS IN VIOLATION OF CLAUSE (F) OF SECTION 80IB(10) READ WITH THE CBDTS CIRCULAR NO.5 DATED 03.06.2010 WHICH BECAME APPLICABLE FROM 19.08.2010. 4. THE ORDER OF THE LD. CIT(A) MAY BE VACATED AND THE ASSESSING OFFICER BE RESTORED. 3. THE REVENUE IS AGGRIEVED BY THE ORDER OF CIT(A) IN ALLOWING DEDUCTION UNDE R SECTION 80IB(10) OF THE ACT IN RESPECT OF PROJECT WHERE SOME OF THE UNITS WERE HAVING AREA MORE THAN THE STIPULATED AREA OF 1500 SQ.FT. THE REVENUE IS ALSO AGGRIEVED BY THE ORDER OF CIT(A) IN NOT FOLLOWING THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUN AL IN THE CASE OF KUMAR BUILDERS CONSORTIUM VS. ACIT IN ITA NO.1164/PN/2012, RELATING TO ASSESSMENT YEAR 2008 - 09 AND KUMAR BUILDERS CONSORTIUM VS. ITO IN ITA NO.2210/PN/2012, RELATING TO ASSESSMENT YEAR 2009 - 10, VIDE ORDER DATED 15.04.2013. ANOTHER ISSUE RAISED VIDE GROUND OF APPEAL NO.3 IS ALSO AGAINST ALLOWANCE OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF UNITS WHICH WERE SOLD TO FAMILY MEMBERS IN VIOLATION OF SECTION 80IB(10)(F) OF THE ACT R.W.S. CBDTS CIRCULAR NO.5, DATED 03.06.2010. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FURNISHED RETURN OF INCOME AT NIL AFTER CLAIMING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. SEARCH ACTION WAS CONDUCTED ON PRIDE GROUP AND THE ASSESSEES FIRM WAS PA RT OF PRIDE GROUP. THE ASSESSEE FIRM WAS ENGAGED IN CONSTRUCTION OF HOUSING PROJECTS AND DURING THE YEAR UNDER CONSIDERATION HAD CLAIMED DEDUCTION OF RS.178.72 CRORES ON PROJECT SAPPHIRE AND TOPAZ PARK . DURING POST SEARCH ENQUIRIES, GOVERNMENT REGISTERED VALUER WAS APPOINTED BY ISSUING COMMISSION UNDER SECTION 131(1)(D) OF THE ACT TO VERIFY 3 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH CORRECTIONS OF CLAIM OF DEDUCTION MADE BY THE ASSESSEE. IN THE REPORT, THE VALUER REPORTED THAT THE ASSESSEE HAD VIOLATED CERTAIN REGULATIONS OF SECTION 80IB(10) OF T HE ACT . IN SAPPHIRE PARK, THE VALUER REPORTED THAT IN 46 FLATS, INTERNAL STAIRCASE WAS AVAILABLE, WHICH WAS GOING TO OVERHEAD TERRACE AND THE SAID TERRACE WAS EXCLUSIVELY BEING USED BY THE RESPECTIVE FLAT OWNERS. THE VALUER STATED THAT THE BUILT UP AREA OF EVERY FLAT WAS BELOW 1500 SQ.FT. ; HOWEVER, TOP TERRACE OPEN TO SKY WAS FOR EXCLUSIVE USE FOR 46 FLATS OWNERS AND HENCE AREA AVAILABLE TO FLAT OWNERS WAS MORE AND IT HA D VIOLATED THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN AS TO WHY THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT SHOULD NOT BE DISALLOWED. IN RESPONSE, THE ASSESSEE CLAIMED TO HAVE CONSTRUCTED AND DEVELO PED THE PROJECT IN PRIDE PURPLE SHETH AFTER COMPLYING WITH ALL THE CONDITIONS OF SECTION 80IB(10) OF THE ACT. THE TOTAL NUMBER OF FLATS IN THE PROJECT WERE 904, OUT OF WHICH 46 FLATS WERE ATTACHED TO THE TERRACE WHICH WAS OPEN TO SKY. THE ASSESSEE EXPLAI NED THE SAID TERRACE WAS NOTHING BUT THE ABOVE PORTION OF ROOMS OF SUCH FLATS AND WAS NOT HABITABLE UNIT. THE PLEA OF ASSESSEE IN THIS REGARD WAS NOT ACCEPTED BY THE ASSESSING OFFICER, WHEREIN THE SAID FLATS WERE SOLD BY THE ASSESSEE AS PENT HOUSE . THU S, THE OWNERS OF IMPUGNED FLATS ENJOYING THE BENEFIT OF OWNERSHIP OF TERRACE, WHEREIN AN INTERNAL STAIRCASE CONNECTING THE FLATS TO THE TERRACE WAS PROVIDED AND HENCE, IT DOES NOT REMAIN FLAT SIMPLICITOR AND CHANGE D ITS CHARACTER TO PENT HOUSE. THE ASSESS EE RELIED ON THE DECISION OF THE HONBLE HIGH COURT OF MADRAS IN CIT VS. SANGHVI AND DOSHI ENTERPRISES IN TAX APPEALS NO.581 & 582 OF 2011 AND 314 & 315 OF 2012, JUDGMENT DATED 01.11.2012 , AS AGAINST WHICH THE ASSESSING OFFICER RELIED ON THE DECISION OF TH E PUNE BENCH OF TRIBUNAL IN KUMAR BUILDERS CONSORTIUM VS. ACIT (SUPRA), WHEREBY IT WAS HELD THAT THE GARDEN AREA ATTACHED TO FLAT ON THE PODIUM LEVEL WAS PART OF BUILT UP AREA. THE ASSESSING OFFICER THUS, 4 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH HELD THAT WHERE THE BUILT UP AREA OF 46 FLATS EXCE EDED 1500 SQ.FT., THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT . THE SECOND ISSUE WHICH WAS RAISED BY THE ASSESSING OFFICER WAS THAT THE ASSESSEE HAD SOLD SIX FLATS, OUT OF WHICH THREE FLATS WERE TO DIFFERENT IN DIVIDUALS AND THREE FLATS WERE TO THEIR SPOUSES. THE TABULATED DETAILS ARE PLACED AT PAGE 19 OF THE ASSESSMENT ORDER. THE ASSESSEE HAD CLAIMED DEDUCTION FOR ASSESSMENT YEAR 2011 - 12 AND THE ASSESSING OFFICER WAS OF THE VIEW THAT PROVISIONS OF SECTION 80IB (10)(F) OF THE ACT WERE APPLICABLE, ALTHOUGH THE FLATS WERE SOLD PRIOR TO INSERTION OF CLAUSE (F) IN SECTION 80IB(10) OF THE ACT W.E.F. 01.04.2009. THUS, THE ASSESSING OFFICER DENIED DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT AT RS.178.72 CRORES. 5. THE CIT(A) AFTER CONSIDERING SUBMISSIONS OF ASSESSEE IN RESPECT OF TERRACE AREA AND MORE THAN ONE FLAT BEING ALLOTTED TO THE INDIVIDUALS AND THEIR SPOUSES OBSERVED AS UNDER: - 3.8 AS FAR AS THE TERRACE AREA AS A PART OF THE BUILT - UP AREA IS CONCERNED, DEFINITION OF THE BUILT - UP AREA AS PROVIDED U/S 80IB(14)(A) WEF 01.04.2005 REFERS TO PROJECTIONS AND BALCONIES AS PART OF THE BUILT - UP AREA. HOWEVER, IN THIS CASE, LEARNED AO AS INCLUDED TERRACE AS PART OF BUILT - UP AREA. TERRACE IS NOT COVERED I N THE DEFINITION OF THE BUILT - UP AREA. HENCE, FOR THE ISSUE AS TO WHETHER OPEN - TO - SKY TERRACE IS PART OF THE BUILT - UP AREA FOR THE PURPOSE OF THE DEDUCTION U/S 80IB(10) OR NOT, DECISION OF THE JURISDICTIONAL ITAT IN CASE OF NARESH WADHWANI AND IN OTHER CA SES WOULD PREVAIL. THEREFORE, BY FOLLOWING THE DECISIONS OF THE JURISDICTIONAL ITAT I HOLD THAT THE TERRACE IS NOT PART OF THE BUILT - UP AREA AND THE DEDUCTION U/S 80IB(10) IS AVAILABLE TO THE APPELLANT. 3.9 WITH REGARD TO MORE THAN ONE FLAT ALLOTTED TO INDIVIDUALS AND SPOUSE, I FIND THAT THE PROVISION PROHIBITING SUCH ALLOTMENT WAS INTRODUCED WEF 01.04.2010 AND NOT WEF 01.04.2009 AS STATED BY THE LEARNED AO IN THE ASSESSMENT ORDER. THE APPELLANT HAD STATED THAT IT HAD ALLOTTED FLATS MUCH PRIOR TO 01.04 .2010. HENCE, THIS PROVISION IS NOT APPLICABLE TO THE APPELLANT. I AGREE WITH THE APPELLANT. THE APPELLANTS PROJECT WAS APPROVED ON 20.09.2006, SO THE PROVISION INSERTED WEF 01.04.2010, CANNOT RETROSPECTIVELY GOVERN AND UNDO THE ASSESSEES ACTION, WHEN THE ASSESSEE HAS ALREADY ACTED UPON. INCENTIVE PROVISIONS SUCH AS SECTION 80IB, CANNOT BE APPLIED IN A MANNER REQUIRING THE ASSESSEE RETRACT HIS ACTION. ACCORDINGLY, I AM OF THE VIEW THAT THE DEDUCTION U/S 80IB CANNOT BE DENIED TO THE APPELLANT ON THIS GROUND. 5 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH 6. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THERE WERE TWO ISSUES ONE WAS THE AREA OF UNITS EXCEEDING 1500 SQ.FT. ON WHICH NO DEDUCTION IS TO BE ALLOWED UNDER SECTION 80IB(10) OF THE ACT. HE FURTHER POINTED OUT THAT WHERE THE ASSESSEE HAD SOLD MORE THAN ONE FLAT TO THE RELATIVES, THEN THE PROVISIONS OF SECTION 80IB(10)(F) OF THE ACT WERE ATTRACTED. 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSE E ON THE OTHER HAND, POINTED OUT THAT THE ASSESSEE HAD CONSTRUCTED 904 FLATS IN 23 BUILDINGS. THE CASE OF ASSESSING OFFICER WAS THAT 46 FLATS WERE WITH OPEN TO SKY TO TERRACE AND THE SAID AREA WAS TO BE INCLUDED AS BUILT UP AREA OF THE SAID FLATS. AFTER SEARCH ON THE PREMISES OF ASSESSEE, REFERENCE WAS MADE TO THE VALUER, WHO SUBMITTED VALUATION REPORT IN THIS REGARD. OUR ATTENTION WAS DRAWN TO THE DEFINITION OF BUILT UP AREA UNDER SECTION 80IB(14)(A) OF THE ACT TO INCLUDE PROJECTIONS AND BALCONIES AND H E DID NOT INCLUDE OPEN TO SKY TERRACE. IN THIS REGARD, RELIANCE WAS PLACED ON THE DECISION IN THE CASE OF NARESH T. WADHWANI VS. DCIT (2015) 68 SOT 235 (PUNE) AND IN ITO VS. M/S. RANE ASSOCIATES IN ITA NO.126/PUN/2015 ALONG WITH CO NO.42/PUN/2016, RELATIN G TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 06.01.2017. IN RESPECT OF KUMAR BUILDERS CONSORTIUM VS. ACIT (SUPRA), IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT FLATS IN QUESTION WERE GROUND FLOOR FLATS ON PODIUM AND THE G ARDEN WAS ATTACHED ON THE SAME LEVEL AND ALSO IT WAS NOT OPEN TO SKY. SO, THERE WERE TWO DIFFERENTIAL FACTORS, BECAUSE OF WHICH DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS NOT ALLOWED ON THOSE FLATS. HOWEVER, THE FACTS AND ISSUES IN THE CASE OF KUMAR BUILDERS CONSORTIUM VS. ACIT (SUPRA) WERE NOT APPLICABLE TO THE FACTS AND ISSUES IN THE CASE OF ASSESSEE, SO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IS 6 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH TO BE ALLOWED. IN RESPECT OF SECOND ISSUE, IT WAS POINTED OUT THAT CLAUSE (F) TO SECTION 80IB(10) OF THE ACT WAS INTRODUCED BY THE FINANCE ACT, 2009 W.E.F. 01.04.2009, WHICH WAS APPROVED IN SEPTEMBER, 2009. FOR THIS, REFERENCE WAS MADE TO THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN DCIT VS. M/S. VARUN DEVELOPERS IN ITA NO.2030/PN/2013, RELATI NG TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 27.10.2014 . COMING TO THE FACTS OF THE PRESENT CASE, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HA D MADE REFERENCE TO SIX FLATS. OUR ATTENTION WAS DRAWN TO THE SALE DEEDS EXECUTED IN RESPECT OF EACH OF SIX FLATS WHICH WERE IN THE YEARS 2006 AND 2007 AND WAS BEFORE INTRODUCTION OF CLAUSE (F) TO SECTION 80IB(10) OF THE ACT. HE ALSO POINTED OUT THAT BY AN ERROR, SECOND SALE DEED EXECUTED BY ONE OWNER WAS REFERRED A ND DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IN REJOINDER, POINTED OUT THAT THE TERM OPEN TO SKY WAS CONSIDERED BY THE CHENNAI BENCH OF TRIBUNAL IN DCIT VS. M/S. ACESTAR PROPERTIES PVT. LT D. IN ITA NOS.858, 859 & 860/MDS/2016, RELATING TO ASSESSMENT YEARS 2010 - 11, 2011 - 12 & 2012 - 13, ORDER DATED 28.04.2017 AND FOR RE - EXAMINATION, THE MATTER WAS SET - ASIDE. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISE S IN THE PRESENT APPEAL IS THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE ASSESSEE HAD DEVELOPED THE PROJECT IN WHICH THERE WERE 904 FLATS IN 23 BUILDINGS. CONSEQUENT TO SEARCH AND SEIZURE ACTION AGAINST THE ASSESSEE, THE ASSESSING OFFICER HAD MADE REFERENCE TO THE GOVERNMENT VALUER TO VERIFY WHETHER THE ASSESSEE HA D FULFILLED CONDITIONS LAID DOWN IN SECTION 80IB(10) OF THE ACT. THE VALUER IN HIS REPORT STATED THAT IN RESPECT OF 46 FLATS, THERE WAS AN INTERNAL STAIRCASE PROVIDED TO TERRACE AND HENCE, THE SAID UNITS HAD 7 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH MORE THAN SPECIFIED COVERED AREA AND HENCE, VIOLATED PROVISIONS OF SECTION 80IB(10) OF THE ACT. THE ASSESSING OFFICER WAS OF THE VIEW THAT WHERE TERRACE EXCLUSIVELY WAS BEING USED BY THE FLAT OWNERS, HENCE THAT AREA WAS TO B E CONSIDERED AS PART OF COVERED AREA OF FLAT S AND SINCE IT EXCEEDED 1500 SQ.FT., THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IB(10) OF THE ACT FROM SUCH VIOLATION. THE SECOND VIOLATION WAS IN RESPECT OF MORE THAN ONE FLAT BEING ALLOTT ED TO FAMILY MEMBERS IN VIOLATION OF SECTION 80IB(10)(F) OF THE ACT. 11. THE FIRST PLEA OF ASSESSEE WA S WITH REGARD TO FLATS WITH INTERNAL STAIRCASE CONNECTING THE FLATS TO THE TERRACE. THE CASE OF ASSESSEE IS THAT SUCH OPEN TO SKY TO TERRACE IS NOT TO BE INCLUDED AS PART OF BUILT UP AREA OF FLATS. IN THIS REGARD, RELIANCE WAS PLACED ON THE PUNE BENCH OF TRIBUNALS DECISIONS IN NARESH T. WADHWANI VS. DCIT (SUPRA), WHEREIN THE TRIBUNAL HELD AS UNDER: - 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. SECTION 80 - IB(10) PROVIDES FOR DEDUCTION IN RELATION TO PROFITS DERIVED FROM UNDERTAKING DEVELOPMENT AND BUILDING OF A HOUSING PROJECT SUBJECT TO CERTAIN CONDITIONS PRESCRIBED THEREIN. ONE OF THE FORE MOST CONDITION IS CONTAINED IN CLAUSE (A) OF SECTION 80 - IB(10) OF THE ACT WHICH IS TO THE EFFECT THAT THE HOUSING PROJECT ELIGIBLE FOR THE CLAIM OF DEDUCTION SHALL BE APPROVED BY THE LOCAL AUTHORITY. THE ASSESSEE BEFORE US IS A BUILDER WHO HAS UNDERTAKEN D EVELOPMENT AND CONSTRUCTION OF A HOUSING PROJECT, NAMED, 'SAI NISARG PARK MAYURESHWAR' AND THE SAID PROJECT HAS BEEN APPROVED BY THE CONCERNED LOCAL AUTHORITY I.E. PCMC ON JULY 29, 2005 AND UNDISPUTEDLY IT COMPLIES WITH THE REQUIREMENT OF CLAUSE (A) TO SEC TION 80 - IB(10) OF THE ACT. THERE ARE OTHER CONDITIONS PRESCRIBED IN SECTION 80 - IB(10) BY WAY OF CLAUSES (B) TO (F) OF THE ACT, SO HOWEVER, THE ONLY CONTROVERSY BEFORE US REVOLVES AROUND THE CONDITION PRESCRIBED IN CLAUSE (C) OF SECTION 80 - IB(10) OF THE ACT . AS PER CLAUSE (C) OF SECTION 80 - IB(10) OF THE ACT, THE MAXIMUM BUILT - UP AREA OF THE RESIDENTIAL UNITS COMPRISED IN THE ELIGIBLE HOUSING PROJECT SHALL NOT EXCEED 1000 SQ.FT. WHERE SUCH UNITS ARE SITUATED WITHIN CITY OF DELHI AND MUMBAI OR WITHIN 25 KM. FR OM THE MUNICIPAL LIMIT OF SUCH CITIES AND IN OTHER PLACES THE PRESCRIBED LIMIT IS 1500 SQ.FT. THE HOUSING PROJECT OF THE ASSESSEE BEFORE US IS LOCATED WITHIN THE MUNICIPAL LIMITS OF PCMC AND THEREFORE IN TERMS OF CLAUSE (C) OF SECTION 80 - IB(10) OF THE ACT, THE MAXIMUM BUILT - UP AREA OF THE RESIDENTIAL UNIT IS CAPPED AT 1500 SQ.FT. THE DISPUTE BEFORE US IS WITH REGARD TO SIX RESIDENTIAL UNITS, WHICH HAVE BEEN DETAILED BY US EARLIER, WHEREIN AS PER THE ASSESSING OFFICER, THE INDIVIDUAL BUILT - UP AREA EXCEED 150 0 SQ.FT. THE WORKING OF BUILT - UP AREA DONE BY THE ASSESSING OFFICER IS SOUGHT TO BE RESISTED BY THE ASSESSEE AND THE BONE OF CONTENTION IS WHETHER OR NOT TO INCLUDE THE AREA OF PROJECTED TERRACE (OPEN TO SKY) FOR COMPUTING THE BUILT - UP AREA OF THE RESPECTI VE UNITS. 8 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH 15. THE FINANCE (NO. 2) ACT, 2004 INSERTED THE DEFINITION OF 'BUILT - UP AREA' WITH EFFECT FROM APRIL 1, 2005 IN TERMS OF SECTION 80 - IB(14)(A) OF THE ACT. IN TERMS OF THE SAID DEFINITION, BUILT - UP AREA MEANS THE INNER MEASUREMENT OF THE RESIDENTIAL UNIT AT THE FLOOR LEVEL, INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREASED BY THE THICKNESS OF THE WALLS BUT DOES NOT INCLUDE THE COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNITS. ON THE STRENGTH OF THE AFORESAID DEFINITION, THE CLAIM OF THE REVENUE I S THAT THE TERRACES IN QUESTION ARE PROJECTIONS ATTACHED TO THE RESPECTIVE RESIDENTIAL UNITS AND ALSO THAT THERE IS NO ROOM UNDER THE AREA OF THE TERRACE AND SUCH TERRACES ARE EXCLUSIVELY USED BY THE RESPECTIVE UNIT OWNERS. IN OTHER WORDS, AS PER THE REVEN UE THE PROJECTED TERRACE FALLS WITHIN THE MEANING OF WORDS 'PROJECTIONS' AND 'BALCONIES' CONTAINED IN SECTION 80 - IB(14)(A) OF THE ACT AND THE SAME IS NOT A COMMON AREA SHARED WITH OTHER RESIDENTIAL UNITS AND IN THIS MANNER, IN TERMS OF SECTION 80 - IB(14)(A) OF THE ACT, SUCH AN AREA IS LIABLE TO BE INCLUDED IN THE EXPRESSION 'BUILT - UP AREA'. 16. IN SO FAR AS THE APPLICABILITY OF THE DEFINITION OF BUILT - UP AREA INSERTED BY FINANCE (NO. 2) ACT, 2004 WITH EFFECT FROM APRIL 1, 2005 IS CONCERNED, IT IS QUITE CLEAR THAT THE SAME IS APPLICABLE FOR ASCERTAINING THE FULFILMENT OF CONDITION PRESCRIBED IN CLAUSE (C) OF THE ACT IN RELATION TO THE PRESENT PROJECT, SINCE THE PROJECT OF THE ASSESSEE HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON JULY 29, 2005, I.E., AFTER THE D EFINITION OF BUILT - UP AREA CONTAINED IN SECTION 80 - IB(14)(A) OF THE ACT CAME INTO FORCE WITH EFFECT FROM APRIL 1, 2005. THEREFORE, IN THE PRESENT CASE, IT IS IMPERATIVE THAT THE MEANING OF EXPRESSION 'BUILT - UP AREA' IS TO BE UNDERSTOOD HAVING REGARD TO ITS DEFINITION CONTAINED IN CLAUSE (A) OF SECTION 80 - IB(14) OF THE ACT. 17. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CEEBROS HOTELS P. LTD. WAS CONSIDERING THE FOLLOWING QUESTION OF LAW : 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TR IBUNAL WAS CORRECT IN INCLUDING THE OPEN SPACE OF THE TERRACE OF THE SEVENTH FLOOR, WITHIN THE MEANING OF THE 'BUILT - UP AREA', WHICH HAS BEEN DEFINED TO INCLUDE THE INNER MEASUREMENTS OF THE RESIDENTIAL UNIT AT THE FLOOR LEVEL INCLUDING THE PROJECTIONS AND BALCONIES AS INCREASED BY THE THICKNESS OF THE WALLS BUT DOES NOT INCLUDE THE COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNITS ?' 18. A BARE PERUSAL OF THE AFORESAID QUESTION OF LAW BEFORE THE HON'BLE MADRAS HIGH COURT WOULD REVEAL THAT THE ISSUE RELATED TO WHETHER OPEN SPACE OF THE TERRACE WOULD FALL WITHIN THE EXPRESSION 'BUILT - UP AREA'. THE FACTS BEFORE THE HON'BLE HIGH COURT WERE THAT THE ASSESSEE HAD CONSTRUCTED VARIOUS APARTMENT BLOCKS AND EACH BLOCK HAD 64 APARTMENTS. THE APARTMENTS LOCATED AT FIRST TO SIXTH FLOOR WERE OF AREAS LESS THAN 1500 SQ.FT. HOWEVER, THE FLATS LOCATED ON THE SEVENTH FLOOR HAD THE ADVANTAGE OF EXCLUSIVE OPEN TERRACE. WHILE CONSIDERING THE RELIEF UNDER SECTION 80 - IB(10) OF THE ACT, THE ASSESSING OFFICER TOOK INTO CONSIDERATION THE AREA OF SUCH EXCLUSIVE/PRIVATE OPEN TERRACE AS A PART OF THE BUILT - UP AREA OF THE UNITS LOCATED AT THE SEVENTH FLOOR. AFTER CONSIDERING THE ABOVE ASPECT, THE BUILT - UP - AREA OF THE FLATS LOCATED AT THE SEVENTH FLOOR EXCEEDED 1500 SQ.FT. AND HENCE THE AS SESSING OFFICER HELD THAT THE CONDITION PRESCRIBED IN CLAUSE (C) OF SECTION 80 - IB(10) OF THE ACT WAS NOT FULFILLED. THE SAID POSITION TAKEN BY THE ASSESSING OFFICER WAS UPHELD RIGHT UP TO THE TRIBUNAL. HOWEVER, THE HON'BLE HIGH COURT DISAGREED WITH THE STA ND OF THE REVENUE AND HELD THAT SUCH OPEN TERRACE WOULD NOT BE INCLUDIBLE IN THE CALCULATION OF 'BUILT - UP - AREA' FOR THE PURPOSE OF EXAMINING THE CONDITION PRESCRIBED IN CLAUSE (C) OF SECTION 80 - IB(10) OF THE ACT. IN THIS VIEW OF THE MATTER, THE AFORESAID JUDGMENT OF THE HON'BLE MADRAS HIGH COURT AND WHICH HAS BEEN FURTHER AFFIRMED IN A SUBSEQUENT DECISION 9 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH IN THE CASE OF CIT V. SANGHVI AND DOSHI ENTERPRISE [2013] 255 CTR (MAD) 156 , COVERS THE ISSUE BEFORE US. 19. HOWEVER, IN THE COURSE OF HEARING, THE LEARNED COMMISSIONER OF INCOME - TAX - DEPARTMENTAL REPRESENTATIVE ATTEMPTED TO DISTINGUISH THE JUDGMENT OF THE HON'BLE HIGH COURT BY POINTING OUT THAT THE SAME RELATED TO ASSESSMENT YEAR 2003 - 04, A PERIOD DURING WHICH TH E DEFINITION OF 'BUILT - UP AREA' CONTAINED IN SECTION 80 - IB(14)(A) OF THE ACT WAS NOT ON THE STATUTE AND ALSO THE FACT THAT THE HOUSING PROJECT UNDER CONSIDERATION OF THE HON'BLE HIGH COURT WAS APPROVED BY THE CONCERNED LOCAL AUTHORITY PRIOR TO APRIL 1, 200 5 I.E., PRIOR TO THE DATE WHEN THE DEFINITION OF 'BUILT - UP AREA' WAS BROUGHT ON THE STATUTE BY WAY OF SECTION 80 - IB(14)(A) OF THE ACT. 20. WE HAVE CAREFULLY PERUSED THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT AND FIND THAT THOUGH THE HON'BLE HIGH COURT W AS CONSIDERING A PROJECT APPROVED PRIOR TO APRIL 1, 2005 YET IT HAS TAKEN INTO CONSIDERATION THE DEFINITION OF 'BUILT - UP AREA' CONTAINED IN SECTION 80 - IB(14)(A) OF THE ACT, WHICH WAS INSERTED WITH EFFECT FROM APRIL 1, 2005. AS PER THE HON'BLE HIGH COURT EV EN AFTER ASSUMING THAT SUCH DEFINITION WAS TO BE RETROSPECTIVELY APPLIED YET THE AREA OF OPEN TERRACE WOULD NOT FALL WITHIN THE MEANING OF THE EXPRESSION 'BUILT - UP AREA'. THE HON'BLE HIGH COURT REFERRED TO THE INDIAN STANDARD METHOD OF MEASUREMENT OF PLINT H, CARPET AND RENTABLE AREAS OF BUILDINGS AS ISSUED OF BUREAU OF INDIAN STANDARDS AND ALSO THE MEANING OF THE AFORESAID EXPRESSION ASSIGNED AS PER THE RULES AND REGULATIONS OF THE LOCAL AUTHORITY AND CONCLUDED THAT AN OPEN TERRACE COULD NOT BE EQUATED TO A 'PROJECTION' OR 'BALCONY' REFERRED TO IN SECTION 80 - IB(14)(A) OF THE ACT. THE RELEVANT DISCUSSION IN THE ORDER OF THE HON'BLE HIGH COURT IS REPRODUCED HEREINAFTER : '31. AS FAR AS THE INTRODUCTION OF DEFINITION PORTION IN SECTION 80 - IB(14) WITH EFFECT FR OM APRIL 1, 2005 IS CONCERNED, EVEN ASSUMING THAT THE DEFINITION SECTION HAS RETROSPECTIVE EFFECT, WE DO NOT THINK THAT THE DEFINITION GIVEN UNDER SECTION 80 - IB(14) WOULD IN ANY MANNER PREJUDICE THE CLAIM OF THE ASSESSEE HEREIN, FOR THE DEFINITION GIVEN UN DER SECTION 80 - IB(14) DOES NOT APPEAR TO GO AGAINST WHAT HAS BEEN DEFINED TO INCLUDE THE MEASUREMENT OF THE PLINTH AREA OF BUILDING UNDER THE BUILDING REGULATIONS AND INDIAN STANDARD METHOD OF MEAS UREMENT OF PLINTH, CARPET AND RENTABLE AREAS OF BUILDINGS AS ISSUED BY BUREAU OF INDIAN STANDARD. SINCE, CLAUSE 4.1.2 CLEARLY EXCLUDES OPEN TERRACE FOR PLINTH AREA AND WHAT IS INCLUDED IN CLAUSE 4.1.1. IS AS STATED IN CLAUSE (D), WHICH READS AS UNDER : '(E) IN CASE OF OPEN VERANDAH WITH PARAPETS : (1) 100 PER CENT. AREAS FOR THE PORTION PROTECTED BY THE PROJEC TIONS ABOVE, AND (2) 50 PER CENT., AREA FOR THE PORTION UNPROTECTED FROM ABOVE.' THE REVENUE DOES NOT DISPUTE THE FACT THAT THE OPEN TERRACE IS NOT A PROJECTION LIKE A BALCONY TO FIT IN WITH THE DEFINITIO N UNDER SECTION 2.4 OF INDIAN STANDARD METHOD OF MEASUREMENT OF PLINTH, CARPET AND RENTABLE AREAS OF BUILDINGS AS ISSUED BY BUREAU OF INDIAN STANDARD. 32. THUS, GOING BY THE DEFINITION UNDER INDIAN STANDARD METHOD OF MEASUREMENT OF PLINTH, CARPET AND RENTA BLE AREAS OF BUILDINGS, EVEN BY MAKING A REFERENCE TO THE DEFINITION OF 'BUILT - UP AREA' UNDER SUB - SECTION 14(A) AS APPLICABLE TO THE YEAR UNDER CONSIDERATION, WE DO NOT FIND ANY JUSTIFIABLE GROUND FOR THE REVENUE TO INCLUDE THE OPEN TERRACE AS PART OF 10 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH THE BUILT - UP AREA. THIS WE SAY FOR THE REASON THAT AS ALREADY POINTED OUT, SUB - SECTION (10) OF SECTION 80 - IB OF INCOME - TAX ACT CONTEMPLATES GRANT OF DEDUCTION ONLY IN RESPECT OF PROJECTS, WHICH ARE APPROVED BY THE LOCAL AUTHORITY, IN WHICH EVENT, AN UNDERSTAN DING THAT ONE HAS TO GIVE TO THE DEFINITION OF 'BUILT - UP AREA' INCLUDING THE PROJECTIONS AND BALCONY MUST, NECESSARILY GO ALONG WITH THE UNDER STANDING PLACED ON SUCH EXPRESSIONS AS PER THE RELEVANT REGULATION OF THE STATUTORY AUTHORITY UNDER THE DEVELOPME NT CONTROL RULES. IN ANY EVENT, EVEN TAKING THE DEFINITION AS GIVING A DIFFERENT MEANING, THE SAME CANNOT CONTROL THE SUBSTANTIVE PROVISION WHICH CONTEMPLATES DEDUCTION TO PROJECTS APPROVED BY THE LOCAL AUTHORITY, THE APPROVAL BEING AS PER THE REGULATIONS AND RULES OF THE LOCAL AUTHORITY. IN SUCH CIRCUMSTANCES, WE REJECT THE CONTENTION OF THE REVENUE AND THEREBY, WE AGREE WITH THE VIEW EXPRESSED BY THE ASSESSEE. 33. LEARNED SENIOR COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE UNREPORTED DECISION OF THE BO MBAY HIGH COURT IN INCOME - TAX APPEAL NO. 3315 OF 2010 IN CIT V. TINNWALA INDUSTRIES DATED APRIL 13, 2012. A READING OF THE DECISION OF THE BOMBAY HIGH COURT SHOWS THAT THE ISSUE RAISED THEREIN RELATED TO THE ASSESSMENT YEAR 2004 - 05. SIMILAR CONTENTION RAIS ED BEFORE THE COURT WAS TAKEN BEFORE THE BOMBAY HIGH COURT TOO. HOLDING THE VIEW THAT THE EXPRESSION 'BUILT - UP AREA' IN A HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY DOES NOT INCLUDE THE BALCONY AREA FOR THE PERIOD PRIOR TO APRIL 1, 2005, THE BOMBAY HI GH COURT HELD THAT WHEN THE LEGISLATURE HAS INTRODUCED THE DEFINITION OF 'BUILT - UP AREA' BY INCLUDING THE BALCONY AREA FROM A PARTICULAR DATE, THEN, THE SAME COULD NOT BE APPLIED RETROSPECTIVELY. 34. IN THE DECISION REPORTED IN CIT V. ANRIYA PROJECT MANAGE MENT SERVICES P. LTD. [2013] 353 ITR 12 (KARN) RENDERED BY THE KARNATAKA HIGH COURT, A SIMILAR SUCH QUESTION WAS CONSIDERED. THE KARNATAKA HIGH COURT POINTED OUT THAT PRIOR TO APRIL 1, 2005 OPEN BALCONY AREA HAVE TO BE EXCLUDED IN CALCULATING THE BUILT - UP AREA. THE KARNATAKA HIGH COURT FURTHER POINTED OUT AS THE PROJECT WAS APPROVED BY JUNE 14, 2002 AND THE BALCONY WERE SHOWN, BUT, WERE EXCLUDED IN THE BUILT - UP AREA, THE INCOME - TAX AUTHORITY CANNOT ADD BALCONY AS BUILT - UP AREA AND DENY THE BENEFIT TO THE ASSESSEE. 35. THE KARNATAKA HIGH COURT FURTHER POINTED OUT THAT AS PER SEC TION 80 - IB (10), THE HOUSING PROJECT MUST BE ONE APPROVED BY A LOCAL AUTHORITY. IN RESPECT OF THE APPROVAL OBTAINED PRIOR TO APRIL 1, 2005 IF SUB - SECTION (14)(A) OF SECTION 80 - IB HAS TO BE HELD APPLICABLE, THEN, THE ASSESSES HAS TO NECESSARILY SEEK FOR A MODIFIED PLAN. ONCE, A VALID APPROVAL IS OBTAINED AND THE BUILDING IS CONSTRUCTED IN ALL RESPECTS PRIOR TO APRIL 1, 2005 THEN, THE ASSESSES WOULD BE ENTITLED TO THE BENEFIT OF SECTION 80 - IB. THIS IS IRRESPECTIVE OF THE DATE OF SALE, THAT IS, EVEN IF IT IS SUBSEQUENT TO APRIL 1, 2005 THE ASSESSES HAS TO HAVE THE BENEFIT OF SECTION 80 - IB. AS FAR AS THE INTRODUCTION OF DEFINITION OF 'BUILT - UP ARE A' IN SUB - SECTION (14)(A) OF SECTION 80 - IB, UNDER THE FINANCE (NO. 2) ACT, 2004 IS CONCERNED, THE KARNATAKA HIGH COURT HELD THAT HAVING REGARD TO THE FACT THAT THEY CAME INTO FORCE FROM APRIL 1, 2005 THE SAME WILL HAVE RELEVANCE TO THOSE HOUSING PROJECTS, WHICH WERE APPROVED SUBSEQUENT TO APRIL 1, 2005. 36. WE AGREE WITH THE VIEWS EXPRESSED IN THE UNREPORTED DECISION OF BOMBAY HIGH COURT IN INCOME TAX APPEAL NO. 3315 OF 2010 CIT V. TINNWALA INDUSTRIES, DATED APRIL 13, 2012 AND THE DECISION OF THE KARNATAKA HIGH COURT REPORTED IN CIT V. ANRIYA PROJECT MANAGEMENT SERVICES P. LTD. [2013] 353 ITR 12 (KARN), THAT SECTION 80 - IB(14) DEFINING 11 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH 'BUILT - UP AREA' WILL HAVE RELEVANCE ON AND FROM APRIL 1, 2005. APART FROM THIS, W E HAVE ALSO HELD IN THE PRECEDING PARAGRAPHS THAT GOING BY THE SUBSTANTIVE PART OF SECTION 80 - IB (10), WHAT IS REQUIRED FOR GRANT OF DEDUCTION IS A HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY. THAT BEING THE CASE, THE DEFINITION OF 'BUILT - UP AREA', HAS TO HAVE THE SAME MEANING AS HAS BEEN GIVEN IN THE DEVELOPMENT CONTROL RULES, OTHERWISE, THE SUBSTANTIVE PART IN SECTION 80 - IB REFER RING TO THE APPROVAL BY THE LOCAL AUTHORITY BECOMES MEANINGLESS FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80 - IB (10) AND T HE APPROVAL FOR THE PURPOSE OF SECTION 80 - IB HAS TO EMANATE FROM THE INCOME - TAX ACT. WE DO NOT THINK THE ACT CONTEMPLATES SUCH EXERCISE ALSO BY THE REVENUE. GIVEN THE FACT THAT CONTEMPLATION OF DEDUCTION IS TO HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORI TY, WE HOLD THAT ONCE THE LOCAL AUTHORITY HAVE EXCLUDED OPEN TERRACE FROM THE WORKING OF BUILT - UP AREA, IT IS NOT OPEN TO THE REVENUE TO REVIEW THE APPROVAL GIVEN BY THE COMPETENT AUTHORITY TO HOLD THAT TERRACE WOULD ALSO BE INCLUDED IN THE BUILT - UP AREA. AS ALREADY HELD THE DEFINITION ALSO DOES NOT SPEAK IN DIFFERENT LANGUAGE FROM WHAT IS GIVEN IN THE MEASUREMENT PROVI SION OF BUREAU OF INDIAN STANDARD IN THE CONTEXT OF THE DEFINITION OF BALCONY IN THE INDIAN STANDARD. 37. IN THE CIRCUMSTANCES, WE HAVE NO HESITATION IN ALLOWING THE ASSESSEE'S APPEAL, BY SETTING ASIDE THE ORDER OF THE TRIBUNAL. THUS, WE HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION IN RESPECT OF FLATS IN THE 7TH FLOOR, WHICH DO NOT EXCEED THE REQUIRED EXTENT AS PER SECTION 80 - IB(10)(C) T HAT OPEN TERRACE AREA, CANNOT FORM PART OF THE BUILT - UP AREA.' 21. NOTABLY, THE HON'BLE HIGH COURT ALSO CONSIDERED AN ARGUMENT FROM THE SIDE OF THE REVENUE TO THE EFFECT THAT THE SALE OF THE AREA OF OPEN TERRACE BY THE ASSESSEE TO THE RESPECTIVE PURCHASER WOULD JUSTIFY THE INCLUSION OF SUCH TERRACE AREA INTO THE CALCULATION OF 'BUILT - UP AREA'. BEFORE US ALSO, THE LEARNED COMMISSIONER OF INCOME - TAX - DEPARTMENTAL REPRESENTATIVE HAS RAISED THE SAID ISSUE THOUGH SHE HAS FAIRLY CONCEDED THAT SUCH A FINDING WAS NO T EMERGING FROM THE ORDERS OF THE LOWER AUTHORITIES. BE THAT AS IT MAY, THE HON'BLE HIGH COURT HAS NOTED AND DEALT WITH THE SAID ARGUMENT IN THE FOLLOWING WORDS : '29. THUS, IN THE FACE OF TERRACE BEING AN OPEN AREA, NOT BEING A PROJECTION AND HENCE, NOT I NCLUDED IN THE PLINTH AREA, THE QUESTION HEREIN IS AS TO WHETHER THE TRIBUNAL IS JUSTIFIED IN CONFIRMING THE ORDER OF ASSESSMENT TO INCLUDE THE TERRACE AREA INTO THE BUILT - UP AREA SOLELY BY REASON OF THE FACT THAT THE ASSESSEE HAD SOLD IT TO PURCHASERS OF THE 7TH FLOOR AS A PRIVATE TERRACE. 30. WE DO NOT THINK, THE TRIBUNAL IS JUSTIFIED IN TAKING THE VIEW THAT OPEN TERRACE WOULD FORM PART OF THE BUILT - UP AREA FOR THE PURPOSE OF SUB - CLAUSE (C) OF SECTION 80 - IB(10). AS ALREADY SEEN IN THE PRECEDING PARAGRAPHS, AN ASSESSEE HAVING AN APPROVED PLA N PROJECT ALONE HAS THE RIGHT TO CLAIM DEDUCTION UNDER SECTION 80 - IB. ANY PROJECT UNDER TAKEN NOT APPROVED BY THE LOCAL AUTHORITY IS OUTSIDE THE PURVIEW OF THE ACT. THUS, WHEN A LOCAL AUTHORITY, ENDOWED WITH THE JURISDICTION TO GRANT THE APPROVAL IS GUIDED IN ITS APPROVAL BY REGULATION AS TO WHAT CONSTITUTES THE PLINTH AREA, WHICH IS THE BUILT - UP AREA, IT IS DIFFICULT FOR US TO AGREE WITH THE CONTENTION OF THE REVENUE AS WELL AS THE REASONING OF THE TRIBUNAL THAT FOR THE PURPOSE OF CONSIDERING THE CLAIM UND ER SECTION 80 - IB, THE BUILT - UP AREA WOULD BE DIFFERENT FROM WHAT HAS BEEN GIVEN APPROVAL BY THE LOCAL AUTHORITY, ON A BUILDING PROJECT. GIVEN THE FACT THAT DURING 2003 - 04 THERE WAS NO DEFINITION AT ALL ON WHAT A BUILT - UP AREA IS, THE UNDERSTANDING OF THE R EVENUE, WHICH IS EVIDENTLY CONTRARY TO THE APPROVAL OF THE LOCAL AUTHORITY BASED ON THE RULES AND REGULATIONS COULD 12 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH NOT BE SUSTAINED. CONSEQUENTLY, WE HAVE NO HESITATION IN AGREEING WITH THE ASSESSEE'S CONTENTION THAT OPEN TERRACE AREA, EVEN IF BE PRIVATE TERRACE, CANNOT FORM PART OF THE BUILT - UP AREA.' 22. AS PER THE HON'BLE HIGH COURT, TERRACE AREA WOULD NOT FORM PART OF THE BUILT - UP AREA BY THE REASON OF THE FACT THAT THE ASSESSEE SOLD IT TO THE PURCHASER AS A PRIVATE TERRACE. AT THIS STAGE, WE MAY ALSO POINT OUT THAT THERE IS NOTHING IN SECTION 80 - IB(14)(A) OF THE ACT TO SUGGEST THAT THE FACTUM OF THE TERRACE BEING AVAILABLE FOR EXCLUSIVE USE OF THE RESPECTIVE UNIT OWNER IS A GROUND TO CONSIDER IT AS A PART OF 'BUILT - UP AREA' FOR THE PURPOSES OF CLAUSE ( C) OF SECTION 80 - IB(10) OF THE ACT. THUS, THE ARGUMENT OF THE LEARNED COMMISSIONER OF INCOME - TAX - DEPARTMENTAL REPRESENTATIVE IS HEREBY REJECTED. 23. IN VIEW OF THE AFORESAID JUDGMENT OF THE HON'BLE MADRAS HIGH COURT, WE ARE UNABLE TO UPHOLD THE STAND OF THE ASSESSING OFFICER TO INCLUDE AREA OF TERRACE AS A PART OF THE 'BUILT - UP AREA' IN A CASE WHERE SUCH TERRACE IS A PROJECTION ATTACHED TO THE RESIDENTIAL UNIT AND THERE BEING NO ROOM UNDER SUCH TERRACE, EVEN IF THE SAME IS AVAILABLE EXCLUSIVELY FOR USE OF THE RESPECTIVE UNIT - HOLDERS. 12. FURTHER, THE TRIBUNAL IN ITO VS. M/S. RANE ASSOCIATES (SUPRA) RELYING ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN COMMONWEALTH DEVELOPERS CD FOUNTAINHEAD VS. ACIT (2014) 267 CTR (BOM) 297, HELD AS UNDER: - 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LIMITED ISSUE WHICH ARISES BEFORE US IS AS TO WHETHER THE AMENDED DEFINITION OF BUILT UP AREA INCLUDES THE AREA OF OPEN TERRACE OR NOT. THE DISPUTE ARISING IN THE PRESENT APPEAL IS AGAI NST THE ORDER OF ASSESSING OFFICER, WHEREIN IN RESPECT OF FOUR FLATS I.E. 101 TO 104 IN BUILDING B, THE VALUER HAD POINTED OUT THAT THE BUILT UP AREA OF THE FLATS EXCEEDED 1500 SQ.FT. BY INCLUDING THE AREA OF OPEN TERRACE AND CONSEQUENTLY, DENIAL OF DEDUCT ION CLAIMED UNDER SECTION 80IB(10) OF THE ACT. THE PROJECT WAS APPROVED PRIOR TO 31.03.2005, WHEREAS THE DEFINITION OF BUILT UP AREA IN SECTION 80IB(10) OF THE ACT WAS INSERTED W.E.F. 01.04.2005. HOWEVER, THE ASSESSING OFFICER HAS POINTED OUT THAT THE PR OJECT IN RESPECT OF BUILDING B WAS SANCTIONED AFTER 01.04.2005. NOT ONLY SANCTION IT WAS PUT UP FOR CONSIDERATION AFTER 01.04.2005. IN CASE THE PROJECT IS SO APPROVED AFTER 01.04.2005 THOUGH BUILDINGS A1 AND A2 OF THE SAME PROJECT WERE APPROVED PRIOR TO 01.04.2005, IT CANNOT BE SAID THAT BUILDING B IS ALSO APPROVED PRIOR TO 01.04.2005. ONCE ANY PART OF THE PROJECT IS APPROVED THEREAFTER, THEN THE AMENDED PROVISIONS OF SECTION WOULD APPLY AND ACCORDINGLY, THE ASSESSEE HAS TO FULFILL THE CONDITIONS LAID DO WN IN THE STATUTE. 11. NOW, COMING TO THE ISSUE RAISED BEFORE US AS TO WHETHER OPEN TERRACE IS TO BE INCLUDED AS PART OF BUILT UP AREA OF THE FLATS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS STRESSED BEFORE US THAT THE OPEN TERRACE IS COMMON TO DIFFERENT FLAT OWNERS AND IS OPEN TO SKY AND HENCE, IS NOT INCLUDABLE IN THE BUILT UP AREA OF THE FLAT WHICH HAS BEEN SOLD BY THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS ALSO DRAWN DISTINCTION BETWEEN BALCONY AND COM MON TERRACE. WE FIND MERIT IN THE PLEA OF ASSESSEE AND HOLD THAT OPEN TERRACE IS NOT TO BE INCLUDED AS BUILT UP AREA OF THE FLAT IN ORDER TO WORK OUT WHETHER THE SAID FLAT HAS STIPULATED BUILT UP AREA OR HAS EXCEEDED THE LIMIT PROVIDED IN THE ACT. 13 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH 12. T HE HONBLE BOMBAY HIGH COURT IN COMMONWEALTH DEVELOPERS CD FOUNTAINHEAD VS. ACIT (2014) 267 CTR (BOM) 297 HAS HELD THAT OPEN TERRACE CANNOT FORM PART OF BUILT UP AREA. THE HONBLE BOMBAY HIGH COURT IN TURN, RELIED ON THE RATIO LAID DOWN BY THE HONBLE MAD RAS HIGH COURT IN CIT VS. MAHALAKSHMI HOUSING (2012) 83 CCH 258 CHENHC. THE PUNE BENCH OF TRIBUNAL ALSO IN NARESH T. WADHWANI VS. DCIT (SUPRA) HAD HELD THAT OPEN TERRACE WAS NOT PART OF BUILT UP AREA. 13. FOLLOWING THE SAME PARITY OF REASONING AND APPLYING THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF MADRAS IN CIT VS. SANGHVI AND DOSHI ENTERPRISES (SUPRA) AND THE HONBLE BOMBAY HIGH COURT IN COMMONWEALTH DEVELOPERS CD FOUNTAINHEAD VS. ACIT (SUPRA), WE UPHOLD THE ORDER OF CIT(A) IN ALLOWING THE B ENEFIT OF DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF RESIDENTIAL UNITS TO WHICH TERRACE WAS ATTACHED BY WAY OF INTERNAL STAIRCASE ; AS THE TERRACE WAS OPEN TO SKY AND HENCE, C OULD NOT BE PART OF BUILT UP AREA OF THE PROPERTY. IN THE FACTS OF THE CASE BEFORE THE TRIBUNAL IN KUMAR BUILDERS CONSORTIUM VS. ACIT (SUPRA), THE SAID RESIDENTIAL UNIT WAS ON PODIUM AND THE GARDEN WHICH WAS ATTACHED TO THE FLAT WAS ALSO ON PODIUM AND WAS NOT OPEN TO SKY, HENCE, IT WAS HELD TO BE PART OF COVERED AREA. THE FACTS IN THE CASE OF KUMAR BUILDERS CONSORTIUM VS. ACIT (SUPRA) ARE AT VARIANCE AND THE SAME ARE NOT APPLICABLE. FURTHER, THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE DECISION OF CHENNAI BENCH OF TRIBUNAL IN DC IT VS. M/S. ACESTAR PROPERTIES PVT. LTD. (SUPRA), WHEREIN THE RATIO LAID DOWN BY THE TRIBUNAL IS IN RESPECT OF PRIVATE OPEN TERRACE COVERED , TO WHICH STAIRS WERE ONLY FROM INSIDE THE RESIDENTIAL UNIT. THE MATTER WAS SET - ASIDE BY THE TRIBUNAL TO RE - EXAMINE THE ISSUE OF OPEN TERRACE WHETHER IT FORMS PART OF BUILT UP AREA. HOWEVER, IN VIEW OF THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN NARESH T. WADHWANI VS. DCIT (SUPRA) AND ITO VS. M/S. RANE ASSOCIATES (SUPRA) IN TURN, RELYING ON THE RATIO LAID DOW N BY THE HONBLE BOMBAY HIGH COURT IN COMMONWEALTH DEVELOPERS CD FOUNTAINHEAD VS. ACIT (SUPRA), WE FIND NO MERIT 14 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH IN THE RELIANCE PLACED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE AND THE SAME IS DISMISSED. ACCORDINGLY, WE DISMISS THE GROUNDS OF APPEAL NO.1 AND 2 RAISED BY THE REVENUE IN THIS REGARD. 14. NOW, COMING TO THE ISSUE RAISED VIDE GROUND OF APPEAL NO.3 I.E. FLATS BEING ALLOTTED TO MORE THAN ONE FAMILY MEMBERS WHICH IS IN VIOLATION OF SECTION 80IB(10)(F) OF THE ACT. THE ISSUE WHICH ARISES IS IN RESPECT OF AMENDED PROVISIONS OF CLAUSE (F) TO SECTION 80IB(10) OF THE ACT. THE TRIBUNAL HAD CONSIDERED THE SAID PROVISIONS IN THE CASE OF DCIT VS. M/S. VARUN DEVELOPERS (SUPRA) AND HAD OBSERVED AS UNDER: - 17. THE FINANCE BILL FOR AME NDING THE PROVISIONS OF SECTION 80IB(10) WAS INTRODUCED ON 06 - 07 - 2009 AND THE FINANCE (NO. 2) ACT, 2009 PASSED ON 19 - 08 - 2009 INSERTED CLAUSES (E) AND (F) TO SECTION 80IB(10) OF THE ACT. THE SAID PROVISIONS WERE INSERTED W.E.F. 01 - 04 - 2010. THE RELEVANT PR OVISIONS OF CLAUSE (F) TO SECTION 80IB(10) OF THE ACT READS AS UNDER: SECTION 80IB(10): THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH, 2009 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF - (A) (B) (C) (D) (E) (F) IN A CASE WHERE A RESIDENTIAL UN IT IN THE HOUSING PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UNIT IN SUCH HOUSING PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS, NAMELY: - (I) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL, (II) T HE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA, (III) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA. EXPLANATION FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SUB - SECTION SHALL APPLY TO ANY UNDERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT). 15 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH 18. UNDER THE SAID CLAUSE (F) TO SECTION 80IB(10) OF THE ACT, IT IS PROVIDED THAT WHERE A RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, THEN NO OTHER RESIDENTIAL UNIT IN SUCH HOUSING PROJECT SHALL BE ALLOTTED TO ANY INDIVIDUAL OR THE SP OUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL, THE HINDU UNDIVIDED FAMILY, IN SUCH INDIVIDUAL IS THE KARTA OR ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUSE OR THE MINOR CHILDREN OR THE HINDU UNDIVIDED FAMILY. IN OTHER WORDS IF AN INDIVIDUAL, HAD BEE N ALLOTTED A RESIDENTIAL UNIT IN ANY HOUSING PROJECT THEN SUCH INDIVIDUAL OR THE SPOUSE OF SUCH INDIVIDUAL OR THE MINOR CHILDREN OF SUCH INDIVIDUAL INCLUDING THE HINDU UNDIVIDED FAMILY IN WHICH HE IS THE KARTA OR ANY PERSON REPRESENTING ABOVE SAID PERSON ARE NOT ENTITLED TO BE ALLOTTED ANY OTHER RESIDENTIAL UNIT, IN SUCH HOUSING PROJECT. AND IN CASE OF VIOLATION OF THE SAID PROVISIONS OF THE ACT, THE ASSESSEE WHO HAD SO ALLOTTED THE FLATS TO SUCH PERSONS, SHALL NOT BE ENTITLED TO CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE SAID PROVISIONS WERE INSERTED BY THE FINANCE (NO. 2) ACT, 2009 W.E.F. 01 - 04 - 2010. 15. THE TRIBUNAL AFTER TAKING NOTE OF THE FACTUAL ASPECTS OF THE SAID CASE OBSERVED AS UNDER: - 19. NOW COMING TO THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD ALLOTTED ONE FLAT TO SHRI GURUDAS ANDAR IN THE FINANCIAL YEAR 2007 - 08 THEREAFTER THE WIFE OF SHRI GURUDAS ANDAR I.E. MRS. NALINI ANDAR HAD BOOKED ANOTHER FLAT IN JUNE, 2009 AGAINST WHICH AN ADVA NCE OF RS.5,00,000/ - WAS PAID WAS RECEIVED BY THE ASSESSEE ON 26 - 06 - 2009. FURTHER STAMP DUTY IN RESPECT OF THE SALE OF SAID FLAT WAS PAID ON 26 - 06 - 2009 AND THE AGREEMENT TO SALE BETWEEN THE PARTIES WAS EXECUTED ON 07 - 07 - 2009. THE FINANCE BILL WAS PASSED ON 19 - 08 - 2009 I.E. AFTER THE EXECUTION OF AGREEMENT TO SELL BETWEEN THE PARTIES ON 07 - 07 - 2009. THE FINANCE BILL WAS INTRODUCED ON 07 - 06 - 2009 BUT WAS PASSED ONLY ON 19 - 08 - 2009 I.E. AFTER THE DATE OF EXECUTION OF AGREEMENT TO SELL BETWEEN THE ASSESSEE AND M RS. NALINI ANDAR, WIFE OF SHRI GURUDAS ANDAR, WHERE THE TRANSACTION WAS COMPLETED PRIOR TO INSERTION OF CLAUSE (F) TO SECTION 80IB(10) OF THE ACT BY THE FINANCE (NO.2) ACT, 2009, THE SAME PROVISIONS CANNOT BE APPLIED IN ORDER TO DENY THE DEDUCTION U/S. 80I B(10) OF THE ACT. IN THE FIRST INSTANCE THE SAID FINANCE (NO.2) ACT, 2009 HAS BEEN MADE EFFECTIVE FROM 01 - 04 - 2010 AND EVEN OTHERWISE THE SAID PROVISIONS CAN AT BEST BE MADE EFFECTIVE FROM THE DATE OF ITS INTRODUCTION I.E. PASSING OF THE FINANCE (NO. 2) AC T, 2009 I.E. ON 19 - 08 - 2009. 20. THE AMENDED PROVISIONS HAVING BEEN INTRODUCED ON A LATER DATE CANNOT BE APPLIED TO THE TRANSACTIONS COMPLETED BEFORE THE SAID PROVISIONS WERE INTRODUCED WERE AMENDED AS THE ASSESSEE CANNOT BE EXPECTED TO DO DEEDS WHICH ARE IMPOSSIBLE. THE HON'BLE SUPREME COURT IN THE CASE OF KRISHNASWAMY S. PD. V. UNION OF INDIA (SUPRA) OBSERVED AS UNDER: 9. THE OTHER RELEVANT MAXIM IS, LEX NON COGIT AD IMPOSSIBILIA - THE LAW DOES NOT COMPEL A MAN TO DO WHAT HE CANNOT POSSIBLY PERFORM. THE LAW ITSELF AND ITS ADMINISTRATION I S UNDERSTOOD TO DISCLAIM AS IT DOES IN ITS GENERAL APHORISMS, ALL INTENTION OF COMPELLING IMPOSSIBILITIES, AND THE ADMINISTRATION OF LAW MUST ADOPT THAT GENERAL EXCEPTION IN THE CONSIDERATION OF PARTICULAR CASES. [SEE U. P. S. R. T. C. V. IMTIAZ HUSSAIN [2 006] 1 SCC 380, SHAIKH SALIM HAJI ABDUL KHAYUMSAB V. KUMAR [2006] 1 SCC 46, MOHAMMED GAZI V. STATE OF M. P. [2000] 4 SCC 342 AND GURSHARAN SINGH V. NEW DELHI MUNICIPAL COMMITTEE [1996] 2 SCC 459]. 21. FURTHER THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CI T VS. REVATHI EQUIPMENT LTD., 298 ITR 67 (MAD.) WHILE CONSIDERING THE ISSUE OF RETROSPECTIVE AMENDMENT INTRODUCED IN RELATION TO THE LEVY OF INTEREST UNDER SECTIONS 234A AND 234B OF THE ACT OBSERVED AS UNDER: 16 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH HELD, DISMISSING THE APPEAL, THAT THE ASSESSEE HAD PAID ADVANCE TAX AFTER DEDUCTING THE PAYMENT MADE UNDER THE VOLUNTARY RETIREMENT SCHEME. IN VIEW OF THE DECISIONS OF THE JURISDICTIONAL HIGH COURT THE ASSESSEE WAS ALLOWED TO DEDUCT EXPENDITURE INCURRED ON PAYMENT TO WORKERS TOWARDS VOLUNTARY RETIREM ENT SCHEME. SINCE SECTION 35DDA WAS INTRODUCED BY THE FINANCE ACT, 2001, WITH EFFECT FROM APRIL 1, 2001, AND RECEIVED ASSENT ON MAY 11, 2001, THE ASSESSEE COULD NOT HAVE ENVISAGED THAT IT WOULD BECOME LIABLE FOR PAYMENT OF TAX EVEN AGAINST VOLUNTARY RETIRE MENT PAYMENTS, WHICH WERE OTHERWISE ALLOWABLE. FURTHER THE ASSESSEE HAD PAID A SUM OF RS. 90,00,000 ON AUGUST 6, 2001, AS SELF - ASSESSMENT TAX, I. E., MUCH BEFORE THE FILING OF THE RETURN ON OCTOBER 30, 2001, WHICH ALSO PROVED THE BONA FIDES OF THE ASSESSEE . ON THE ABOVE TWO GROUNDS THE TRIBUNAL ACCEPTED THE CASE THAT THE ASSESSEE WAS NOT SUBJECT TO ADVANCE TAX. THE FINDINGS OF THE TRIBUNAL WERE BASED ON VALID MATERIALS AND EVIDENCE AND DID NOT WARRANT INTERFERENCE. 22. APPLYING THE RATIO LAID DOWN BY THE H ON'BLE SUPREME COURT IN THE CASE OF KRISHNASWAMY S. PD. V. UNION OF INDIA (SUPRA) AND HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. REVATHI EQUIPMENT LTD. (SUPRA), WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF THE FLAT ALLOTTED TO MRS. NALINI ANDAR I.E. SECOND RESIDENTIAL UNIT ALLOTTED IN THE SAME PROJECT TO TWO MEMBERS OF THE SAID FAMILY. 16. THE TRIBUNAL ALSO MADE REFERENCE TO THE CBDTS CIRCULAR NO.5 OF 2010, DATED 03.06.2010 AND POINTED O UT THAT CIRCULAR HAD ALSO CLARIFIED THE APPLICABILITY OF AMENDED PROVISIONS OF THE ACT VIDE PARAS 23 AND 23, WHICH READ AS UNDER: - 23. WE, FURTHER FIND THAT THE CBDT VIDE CIRCULAR NO. 5 OF 2010 DATED 03 - 06 - 2010 IN THE EXPLANATORY NOTE TO THE PROVISIONS OF FINANCE (NO. 2) ACT, 2009 HAD CLARIFIED THE APPLICABILITY OF THE AMENDED PROVISIONS OF THE ACT, OBSERVING AS UNDER: 33.8 APPLICABILITY THESE AMENDMENTS HAVE BEEN MADE APPLICABLE WITH EFFECT FROM 1ST APRIL, 2010 AND WILL ACCORDINGLY APPLY IN RELATION TO ASSESSMENT YEAR 2010 - 11 AND SUBSEQUENT YEARS. THE AMENDMENTS RELATE TO RESTRICTIONS ON SPECIFIC TRANSACTIONS (I.E., ALLOTMENT OF RESIDENTIAL UNITS). THEREFORE, THEY WOULD APPLY TO TRANSACTIONS AFTER A SPECIFIED DATE DURING THE YEAR. SINCE THE FINANCE (NO.2 ) ACT, 2009 BECAME LAW ON 19 TH AUGUST, 2009, THE RESTRICTIONS REGARDING ALLOTMENT OF RESIDENTIAL UNITS SHALL NOT APPLY IN RESPECT OF ALLOTMENTS MADE BEFORE 19.08.2009. 24. IN THE TOTALITY OF THE ABOVE FACTS AND CIRCUMSTANCES, WE HOLD THAT THE AMENDED CLAUSE (F) TO SECTION 80IB(10) OF THE ACT ARE TO BE APPLIED W.E.F. 19 - 08 - 2009 AND CANNOT BE USED TO DENY THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF THE RESIDENTIAL UNIT ALLOTTED PRIOR TO THE COMING INTO OPERATION OF AMENDED PROVISIONS I. E. CLAUSE (F) INSERTED TO SECTION 80IB(10) OF THE ACT. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE GROUNDS OF APPEAL NO. 3 AND 4 RAISED BY THE REVENUE. 17. APPLYING THE SAID PRINCIPLE TO THE FACTS OF THE PRESENT CASE, WE FIND FROM THE PERUSAL OF EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF INDEX NO.II IN RESPECT OF EACH OF THE FLATS, RESPECTIVE FLATS WERE ALLOTTED BEFORE INSERTION OF CLAUSE (F) TO 17 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH SECTION 80IB(10) OF THE ACT. THE ASSESSEE HAS PLACED ON RECORD NECESSARY EVIDENCE IN TH IS REGARD. FLAT NO.D - 503 TO NIKTA HATTANGDY WAS REGISTERED ON 30.12.2006, AS PER COPY OF INDEX NO.II PLACED AT PAGE 31 OF THE PAPER BOOK ; FLAT NO.D - 504 TO THE HUSBAND OF NIKTA HATTANGDY WAS ALSO REGISTERED ON 30.12.2006 AS PER COPY OF INDEX NO.II PLACED AT PAGE 32 OF THE PAPER BOOK. FURTHER, THE ASSESSEE HAS ALSO PLACED ON RECORD THE DETAILS OF PAYMENT RECEIVED FROM BOTH THESE PARTIES AT PAGES 37 AND 38 OF THE PAPER BOOK, WHICH WERE MAJORLY BEFORE MARCH, 2008. IN RESPECT OF NEXT FLAT NO.H - 403 ALLOTTED T O SONALI BHULLAR, THE SAME WAS ALSO REGISTERED ON 24.11.2006 AS PER COPY OF INDEX NO.II FILED DURING THE COURSE OF HEARING. THE PAYMENT FROM THE SAID PARTY WAS ALSO RECEIVED UPTO 31.03.2007. FLAT NO.H - 404 WAS ALLOTTED TO HER HUSBAND NAVJEET BHULLAR SIMIL ARLY ON 24.11.2006 AS PER COPY OF INDEX NO.II PLACED AT PAGE 34 OF THE PAPER BOOK. HE HAD ALSO MADE PAYMENT BY 31.03.2007. THE NEXT FLAT NO.L - 501 WAS ALLOTTED TO S. SRIKANTH ON 26.10.2007 AS PER COPY OF INDEX NO.II PLACED AT PAGE 35 OF THE PAPER BOOK AND TO HIS WIFE JAYSHREE SRIKANTH ON 06.11.2007 AS PER COPY OF INDEX NO.II PLACED AT PAGE 36 OF THE PAPER BOOK. THE PAYMENTS FROM THE SAID PARTIES HAVE ALSO BEEN MAJORLY RECEIVED BY 31.03.2007, RESPECTIVELY. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASS ESSEE POINTED OUT THAT BY MISTAKE THE ASSESSEE HAD FILED COPY OF INDEX NO.II IN RESPECT OF SALE OF FLAT BY SONALI BHULLAR AND NAVJEET BHULLAR TO SUJIT VENUGOPAL , WHICH WAS DATED 07.04.2010. THIS IS PLACED AT PAGE 33 OF THE PAPER BOOK. THE SAID DOCUMENT DOES NOT RELATE TO THE PURCHASE OF FLAT AND HAS NO RELEVANCE TO THE ISSUE AT HAND. ACCORDINGLY, WE HOLD THAT WHERE THE FLATS HAVE BEEN PURCHASED BY THE PERSONS , WHO ARE RELATED TO EACH OTHER I.E. IN RESPECT OF FLAT NOS.D - 503 & D - 504, FURTHER IN RESPECT OF FLAT NOS.H - 403 & H - 404 AND ALSO IN RESPECT OF L - 501 & L - 502, THE ASSESSING OFFICER WAS OF THE VIEW THAT IN VIEW OF RELATION BETWEEN THE PARTIES AND IN VIEW OF 18 ITA NO. 424 /PUN/20 16 PRIDE PURPLE SHETH CLAUSE (F) TO SECTION 80IB(10) OF THE ACT, THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION CLAIMED BY IT. WE FIND NO MERIT IN THE AFORESAID STAND OF THE ASSESSING OFFICER SINCE THE FLATS WERE PURCHASED BEFORE THE AMENDMENT TO THE ACT AND INSERTION OF CLAUSE (F) TO SECTION 80IB(10) OF THE ACT. U PHOLDING THE ORDER OF CIT(A), WE DISMISS THE GROUND OF APPEA L NO.3 RAISED BY THE REVENUE. 1 8 . IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 2 0 T H DAY OF DECEM BER , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 2 0 T H DECEM BER , 201 7 . G G C C V V S S R R / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 13 , PUNE ; 4. THE PR. C IT (CENTRAL), PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE