ITO 15(3)(2), MUMBAI V. U.K. CONSTRUCITON, MUMBAI

ITA 4471/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3332 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 27-06-2014
• Court: TRIBUNAL
• Section: 143(3); 80IB

Judgement Text

, , F, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.4471/MUM/2014 ASSESSMENT YEAR: 2010-11 & ITA NO.4472/MUM/2014 ASSESSMENT YEAR: 2011-12 ITO - 1 5 ( 3 ) (2) , R. NO.109, 1 ST FLOOR, MATRU MANDIR, TARDEO GRANT RD (W) MUMBAI 400007 / VS. U.K. CONSTRUCTION, A-2/12 P UNIT MAGAR PLOAT NO.1, S.V. RD, BORIVALAI(W) MUMBAI- 400092 (REVENUE) (RESPONDENT) P.A. NO. AAVBU89099F REVENUE BY SHRI SANJEEV KASHYAP (DR) RESPONDENT BY SHRI VIMAL PUNMIYA (AR) / DATE OF HEARING : 04/01/2016 / DATE OF ORDER: 20/01/2016 / O R D E R PER BENCH: THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINS T THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-2 6, U.K. CONSTRUCTION 2 MUMBAI {(IN SHORT CIT(A)}, DATED 25.04.2014 FOR THE ASSESSMENT YEARS 2010-12 AND 2011-12, PASSED AGAINS T THE ASSESSMENT ORDER OF THE ASSESSING OFFICER (IN SHORT AO) U/S 143(3) OF THE ACT. THE GROUNDS RAISED IN BOTH THE A PPEALS ARE IDENTICAL AND REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE: '1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 1,69,67,521/- MADE BY THE ASSESSING OFFICER U/S 801B(10) OF THE I.T. ACT AND NOT APPRECIATING THE F ACT THAT THE ASSESSEE HAD NOT FULFILLED ALL THE CONDITIONS REQUIRED FOR CLAIM OF DEDUCTION UNDER THE SAID SECTION.' 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT (A) ERRED IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 80IB(10) OF THE I.T. ACT ON T HE BASIS THAT THE ASSESSEE IS NOT THE ENTITY WHICH COMMENCED THE PROJECT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER U/S 80IB(10) OF THE IT ACT ON THE BASIS THAT THE COMPLETION CERTIFICATE ISSUED BY LOCAL GRA M PANCHAYAT AUTHORITY IS NOT A REQUISITE COMPLETION CERTIFICATE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER U/S 80IB(10) OF THE IT ACT BY NOT APPRECIATING THE FACT THAT LANGUAGE OF THIS SECTION INTEND THAT COMPLETION CERTIFICATE IN RESPECT OF HO USING PROJECT IS ISSUED BY THE LOCAL AUTHORITY GRANTING APPROVAL. 5.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER U/S 80IB(10) OF THE I.T. ACT ON T HE BASIS THE COMMERCIAL AREA IN THE PROJECT WHICH WAS APPROVED AS PER ORIGINAL PLAN WAS MORE THAN 2000 SQ . FT. THE ENTIRE PROJECT OF THE GROUP HAVING BEING AP PROVED U.K. CONSTRUCTION 3 IN ONE APPROVAL PLAN AND SUBSEQUENTLY DIVIDED INTO PARTS VIDE VARIOUS AGREEMENTS WITHIN THE GROUP CONCERNS T HE DETAILS OF WHICH HAD NOT BEEN SUBMITTED BY THE ASSESSEE.' 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI VIMAL PUNMIYA, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI SANJEEV KASHYAP, DEPART MENTAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. DURING THE COURSE OF HEARING, IT WAS BROUGHT TO OU R NOTICE, AT THE VERY OUTSET BY THE LD. COUNSEL OF THE ASSESS EE THAT IDENTICAL ISSUES AROSE IN THE EARLIER YEARS I.E. A. YS. 2008-09 & 2009-10 AND HONBLE TRIBUNAL HAS DECIDED THESE ISSU ES IN FAVOUR OF THE ASSESSEE IN ITS ORDER DATED 04.03.201 5 IN ITA NO.2370/M/2013 AND ITA NO.854/M/2013. ON THE OTHER HAND, LD. DR HAS PLACED RELIANCE UPON THE ORDER OF THE AO. 3.1. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHO RITIES AS WELL AS ORDER OF THE HONBLE TRIBUNAL IN ASSESSE ES OWN CASE FOR A.Y. 2008-09 & 2009-10. FOR THE SAKE OF READY R EFERENCE, RELEVANT PARAS OF THE ORDER OF THE TRIBUNAL ARE REP RODUCED BELOW: 2. BRIEF FACTS EMERGING FROM RECORDS ARE THAT THE ASSESSEE IS A BUILDER AND DEVELOPER, FILED ITS RETURN OF INC OME CLAIMING DEDUCTION U/S 80IB(10). THE ASSESSEE HAS PURCHASED LAND DEVELOPMENT RIGHTS FROM ITS SISTER C ONCERN M/S. U.K. BUILDERS VIDE AGREEMENT DATED 15.05.2006 WHICH WAS REGISTERED ON 07/06/2006. VIDE THIS AGREEMENT, THE ASSESSEE FIRM GOT DEVELOPMENT RIGHTS FOR A RESIDENTIAL CUM COMMERCIAL HOUSING PROJECT ON AN AR EA OF U.K. CONSTRUCTION 4 5.797 ACRES. THE PLAN FOR THE DEVELOPMENT OF THIS H OUSING PROJECT WAS ALREADY SANCTIONED ON 18/10/2003 BY THE LOCAL AUTHORITIES IN THE NAME OF SHRI KULDEEP U. OS TWAL AND SHRI GYANCHAND K. SANCHETI, THE TWO PARTNERS OF M/S. U.K. BUILDERS. THIS PLAN WAS LATER ON AMENDED AND A S PER REVISED PLAN THE TOTAL AREA OF THE PROJECT WAS INCR EASED TO 1,18,805 SQ. FT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT TH E PERMISSION TO COMMENCE THE DEVELOPMENT WORK IN THE HOUSING PROJECT IN QUESTION WAS ISSUED IN THE NAME OF SHRI KULDEEP U. OSTWAL AND SHRI GYANCHAND K. SANCHETI IN THE YEAR 2003 AND, THEREFORE, THE ASSESSEE FIRM HAS NOT COMMENCED THIS HOUSING PROJECT. ACCORDING, TO THE ASSESSING OFFICER, SECTION 80IB(10) OF THE ACT, STI PULATES AND PROVIDES THAT THE DEDUCTION IS AVAILABLE TO THE UNDERTAKING, IF SUCH UNDERTAKING HAS COMMENCED OR COMMENCES THE DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT AND COMPLETES SUCH CONSTRUCTION. TH US THE ASSESSING OFFICER WAS OF THE VIEW THAT THE COMMENCE MENT OF THE PROJECT WAS BY THE SEPARATE PERSONS AND NOT BY THE ASSESSEE FIRM WHEREAS THE COMPLETION IS CLAIMED BY THE ASSESSEE FIRM. ACCORDINGLY, THE ASSESSING OFFICER D ENIED THE DEDUCTION U/S 80IB(10) TO THE ASSESSEE. APART F ROM THIS THE ASSESSING OFFICER HAS ALSO HELD THAT THE COMPLETION CERTIFICATE ISSUED BY THE LOCAL GRAM PAN CHAYAT AUTHORITY IS NOT A REQUISITE COMPLETION CERTIFICATE AND FURTHER THE COMMERCIAL CONSTRUCTION IN THE PROJECT IS MORE THAN 2,000 SQ. FT. 3. THE ASSESSEE CHALLENGED THE ACTION OF ASSESSING OFFICER BEFORE THE CIT(A) AND CONTENDED THAT IT IS NOT NECE SSARY THAT THE PERMISSION/SANCTION GRANTED BY THE LOCAL AUTHORITY SHOULD BE IN THE NAME OF THE PERSON DEVEL OPING THE HOUSING PROJECT. THE ASSESSEE HAS RELIED UPON V ARIOUS DECISIONS OF THIS TRIBUNAL IN SUPPORT OF ITS CONTEN TION. 4. THE CIT(A) HAS DECIDED THIS ISSUE IN PARA 5.9 TO 5.11 AND THEN IN PARA 7.1 TO 7.7 AND FINALLY IN PARA 9.1 TO 9.8 AS UNDER:- 5.9. THERE IS A FORCE IN THE ABOVE ARGUMENT OF THE APPELLANT. IN MY OPINION, THE ONLY CONDITION IMPOSE D BY SECTION 80IB(10) FOR BEING ELIGIBLE FOR CLAIMING DE DUCTION U/S. 80IB(10) IS THAT THE UNDERTAKING CLAIMING THE U.K. CONSTRUCTION 5 DEDUCTION SHOULD HAVE 'DEVELOPED AND BUILT' THE HOU SING PROJECT, SUBJECT TO OTHER CONDITIONS CONTAINED IN S UB- CLAUSE'S (A) TO (D) BEING DULY COMPLIED WITH. THE P ROVISIONS PERTAINING TO THE DATE OF COMMENCEMENT AND DATE OF COMPLETION OF THE HOUSING PROJECT AS CONTAINED IN S UB- CLAUSE (A) (I) & (II) OF SECTION 80IB(10) ARE ONLY FOR THE PURPOSE FOR IDENTIFYING THE DATE AFTER WHICH THE PR OJECT SHOULD HAVE COMMENCED CONSTRUCTION AND THE DATE BY WHICH IT SHOULD BE COMPLETED. AS LONG AS THE PROJEC T IS COMMENCED AFTER 1.10.98 AND IS COMPLETED PRIOR TO 3 1.3.08 (AS APPLICABLE IN THE CASE OF THE ASSESSEE), THE CO NDITION IMPOSED BY SAID SUB-CLAUSE (A) OF SECTION 80IB(10) CAN BE HELD TO BE COMPILED WITH. 5.10. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE IT AT, MUMBAI IN THE CASE OF SAROJ SALES ORGANIZATION-VS- ITO, 3 DTR (MUM) 494' AND ITAT, MUMBAI IN THE CASE OF VANDANA PROPERTIES AND THE HON'BLE HIGH COURT OF BO MBAY HAS APPROVED THE ABOVE DECISION OF THE ITAT, MUMBAI . 5.11. IN THE PRESENT CASE ALSO IT IS THE APPELLANT FIRM WHO HAS DEVELOPED AND BUILT THE HOUSING PROJECT IN QUES TION AND EARNED PROFITS FROM DEVELOPMENT OF THE SAID HOU SING PROJECT ALTHOUGH THE PLANS WERE GOT SANCTIONED BY S HRI KULDEEP U. OSTWAL AND SHRI GYANCHAND K. SANCHETI, T HE PARTNERS OF MIS. U.K. BUILDERS AND SOME INITIAL CON STRUCTION MIGHT HAVE BEEN COMMENCED BY THE EARLIER DEVELOPER OR BUILDER OF THE LAND I.E. MIS. U.K. BUILDERS. SUBSEQ UENTLY, THE PROJECT WAS TAKEN OVER BY THE APPELLANT AND COM PLETED THE SAME. THE APPELLANT WOULD THEREFORE BE THE CORR ECT ENTITY TO CLAIM THE BENEFIT OF DEDUCTION U/S. 80IB( 10). THE ACTION OF THE AO THEREFORE TO DENY THE DEDUCTION TO THE APPELLANT ON THE CONTENTION THAT THE APPELLANT IS N OT THE ENTITY WHO COMMENCED THE PROJECT, IS NOT IN ORDER A ND HENCE NOT JUSTIFIED. THE JUDICIAL PRONOUNCEMENTS CI TED SUPRA HAVE CLEARLY LAID DOWN THE PRINCIPLE THAT THE RE' IS NO SUCH CONDITIONS IN SECTION 80IB(10) THAT THE APPROV AL OR SANCTION FOR THE HOUSING PROJECT SHOULD BE GRANTED BY THE LOCAL AUTHORITY IN THE NAME OF THE UNDERTAKING CLAI MING THE DEDUCTION. AS LONG AS THE ASSESSES IS THE OWNER OF THE UNDERTAKING WHICH HAS DEVELOPED AND BUILT THE HOUSI NG PROJECT, THE BENEFIT OF THE SAID DEDUCTION CANNOT B E DENIED U.K. CONSTRUCTION 6 TO THEM. IN VIEW OF THE SAME, ON THIS ISSUE, I UPHO LD THE CLAIM OF THE ASSESSEE FIRM FOR DEDUCTION U/S. 80IB (10) ON ITS HOUSING PROJECT AND THUS GROUND NOS. 3 & 4 STAN DS DECIDED IN FAVOUR OF THE APPELLANT. ******************* ******************* 7.1. I HAVE PERUSED THE ORDER OF THE AO ON THE ISSU E AND ALSO GONE THROUGH THE WRITTEN SUBMISSIONS MADE BY T HE APPELLANT CAREFULLY AND I DO NOT FIND ANY LOGIC IN THE ARGUMENTS OF THE AO THAT THE COMPLETION CERTIFICATE S ISSUED BY THE BOISAR AND KHAIRPEDA GRAMPANCHAYATS TO ALL T HE BUILDINGS OF THE HOUSING PROJECT OF THE APPELLANT B EFORE 31/03/2008 ARE NOT THE REQUISITE COMPLETION CERTIFI CATES AS ENVISAGED IN SECTION 8018(10). THE VALIDITY OF T HESE OCCUPATION CERTIFICATES ISSUED BY THE GRAMPANCHAYAT CAN ONLY BE CHALLENGED AFTER PROVING THAT THE GRAMPANCH AYATS ARE NOT THE LOCAL AUTHORITY. THE AO WITHOUT PROVING THE SAME, HAS SIMPLY PROCEEDED TO DENY THE DEDUCTION ON THIS GROUND THAT IT IS NOT THE REQUISITE COMPLETION CERT IFICATES AS ENVISAGED IN SECTION 8018(10) BUT WHY THIS REQUISIT E CERTIFICATE HAS NOT BEEN ELABORATED BY THE AO. ADMI TTEDLY, THE BUILDINGS HAVE BEEN COMPLETED BEFORE 31/03/2008 AS PER THE COMPLETION CERTIFICATE ISSUED BY THE GRAMPANCHAYATS. 7.2. THE EXPLANATION (II) TO SECTION 8018(10) ENVIS AGE A COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY. TH E LOCAL AUTHORITY IS NOT DEFINED IN SECTION 8018(10) BUT TH E SAME HAS BEEN DEFINED U/S. 10(20) OF THE I.T. ACT, 1961. THE EXPLANATION TO SECTION 10(20) OF THE ACT DEFINES TH E LOCAL AUTHORITY AS UNDER :- [ EXPLANATION - FOR THE PURPOSES OF THIS CLAUSE, TH E EXPRESSION 'LOCAL AUTHORITY' MEANS- (I) PANCHAYAT AS REFERRED TO IN CLAUSE (D) OF THE A RTICLE 243 OF THE CONSTITUTION OR (II) MUNICIPALITY AS REFERRED TO IN CLAUSE (E) OF T HE ARTICLE 243 OF THE CONSTITUTION OR (III) MUNICIPAL COMMITTEE AND DISTRICT BOARD, LEGAL LY ENTITLED TO, OR ENTRUSTED BY THE GOVERNMENT WITH, T HE CONTROL OR MANAGEMENT OF MUNICIPAL OR LOCAL FUND; O R (IV) CANTONMENT BOARD AS DEFINED IN SECTION OF THE CANTONMENT ACT 1924 (2 OF 1924). U.K. CONSTRUCTION 7 7.3. IT IS CLEAR FROM THE ABOVE DEFINITION OF THE ' LOCAL AUTHORITY' AS GIVEN IN THE I. T. ACT, 1961 THAT THE GRAM PANCHAYAT IS A LOCAL AUTHORITY. IN THE INSTANT CASE , THE GRAM PANCHAYAT OF BOISAR & KHERAPADA HAS BEEN ENTRUSTED WITH THE IMPOSITION, COLLECTION AND MANAG EMENT OF THE LOCAL FUND. ALL THE BASIS INFRASTRUCTURE FAC ILITIES AS REQUIRED BY THE LOCAL PEOPLE AS WELL AS TO THE APPE LLANT FOR THE HOUSING PROJECT HAVE BEEN PROVIDED BY THE GRAM PANCHAYAT. THE APPELLANT HAS SUBMITTED THE DETAILS AND RECEIPTS OF THE COLLECTION OF THE SANITATION AND OT HER CHARGES OF THE LOCAL AREA BY THE GRAM PANCHAYAT OF BOISAR, WHICH UNDOUBTEDLY PUTS THE GRAM PANCHAYAT I N THE CATEGORY OF LOCAL AUTHORITY AND THEREBY COMPETE NT TO ISSUE COMPLETION CERTIFICATE OF THE HOUSING PROJECT OF THE APPELLANT. THE COMPLETION CERTIFICATE ISSUED BY ANY LOCAL AUTHORITY IS A VALID PROOF OF THE COMPLETION OF THE HOUSING PROJECT AND SO IS TRUE IN THE CASE OF THE APPELLANT SUBMITTING THE COMPLETION CERTIFICATES FROM THE GRA M PANCHAYAT OF BOISAR & KHERAPADA IN RESPECT OF EACH BUILDING COMPLETED BY IT DURING THE PERIOD UNDER CONSIDERATION AND THESE COMPLETION CERTIFICATES FRO M 24/11/2005 TO 18/03/2008 ARE PLACED ON RECORD. 7.4. THE APPELLANT HAS ALSO FILED A LETTER DATED: 28/12/2009 OF ZILA PARISHAD, THANE, THOUGH IT IS NO T A COMPLETION CERTIFICATE, BUT CERTIFIES THAT ALL THE BUILDINGS WERE COMPLETED BEFORE 31/08/2008, WHICH IS ALSO AN EVIDENCE THAT THE BUILDINGS OF THE APPELLANT WERE COMPLETED BEFORE THE SPECIFIED DATE TO MAKE THE APP ELLANT ELIGIBLE FOR DEDUCTION U/S.80IB(10). 7.5. THE AR OF THE APPELLANT HAS ALSO MADE AN ALTER NATIVE ARGUMENT THAT SINCE THE HOUSING PROJECT OF THE APPE LLANT WAS APPROVED AND COMMENCED CONSTRUCTION IN THE YEAR 2003, THE AMENDED PROVISION WHICH CAME INTO EFFECT FROM 01104/2005 REQUIRING THE APPELLANT TO COMPLETE THE PROJECT BEFORE 31/03/2008, IS NOT APPLICABLE IN THEIR CASE AS THE AMENDMENT WAS PROSPECTIVE AND DOES NOT APPLY TO THE PROJECTS COMMENCED BEFORE THIS DATE. 7.6. THERE IS A MERIT IN THE ABOVE ARGUMENTS OF THE APPELLANT. THERE ARE NUMBER OF JUDICIAL PRONOUNCEME NTS ON U.K. CONSTRUCTION 8 THE ISSUE AS ON DATE. IN THE CASE OF HIRANANDANI AK RUTI J. V. VS. OCTT (A. Y. 2006-07), ITA NO. 54161MUML2009 DT. 30.03.2010 AND BHUMIRAJ HOMES LTD VS DELT, ITA NO. 5061MUML2009 DATED 2010512011, WHEREIN IT HAS BEEN HELD THAT THE LAW AS STOOD AT THE TIME OF SUBMISSIO N OF PROPOSAL AND ITS APPROVAL WILL APPLY AND HENCE THE AMENDED PROVISIONS W.E.F. 01.04.2005 SPECIFYING DAT E OF COMPLETION WILL NOT APPLY TO THE PROJECTS APPROVED BEFORE 01.04.2004. 7.7. IN VIEW OF THE ABOVE BINDING DECISION OF HON'B LE JURISDICTIONAL TRIBUNAL, I HOLD THAT IN THE CASE OF APPELLANT THE CONDITION THAT THE HOUSING PROJECT SHOULD BE CO MPLETED ON OR BEFORE 31.03.2008 WILL NOT OTHERWISE APPLY AN D THEREFORE THERE IS NO VIOLATION OF ANY CONDITIONS I N THIS REGARD AND ACCORDINGLY APPELLANT CANNOT BE DENIED C LAIM OF DEDUCTION U/S. 80IB(10) ON THE GROUND THAT THE COMPLETION CERTIFICATE WAS NOT OBTAINED FROM ZILLA PARISHAD, THANE, ON OR BEFORE 31.03.2008. THIS GROU ND OF APPEAL IS THEREFORE DECIDED IN FAVOUR OF THE APPELL ANT. ******************** ******************** 9.1. I HAVE PERUSED THE ORDER OF THE AO ON THE ISSU E AND ALSO GONE THROUGH THE WRITTEN SUBMISSIONS MADE BY T HE APPELLANT CAREFULLY AND THERE IS A SUBSTANCE IN THE ABOVE ARGUMENTS OF THE AR OF THE APPELLANT. 9.2. THE CONTENTION OF THE AR OF THE APPELLANT IS T HAT THE FIRM HAS CONSTRUCTED THE COMMERCIAL AREA IN THE HOU SING PROJECT TO THE EXTENT OF 1585 SQ. FEET WHICH IS WEL L BELOW THE PRESCRIBED LIMIT OF 2000 SQ. FEET, WHICH IS MEN TIONED IN THE ASSESSMENT ORDER ITSELF. THE HOUSING PROJECT OF THE APPELLANT IS DISTINCT FROM THE HOUSING PROJECT OF M /S. U.K. BUILDERS, EVEN THOUGH OF THE SAME APPROVED PLAN, AN D THIS HOUSING PROJECT QUALIFIES FOR DEDUCTION U/S. 8018(1 0) ON STANDALONE BASIS AND THEREFORE THIS IS ELIGIBLE PRO JECT FOR THE BENEFIT OF DEDUCTION U/S. 80IB(10). 9.3. THE ABOVE ARGUMENTS OF THE AR HAS MERIT. THE A O HAS NOWHERE GIVEN THE DETAILS AS TO HOW THE COMMERCIAL COMPONENT OF THE HOUSING PROJECT OF THE APPELLANT I S ABOVE U.K. CONSTRUCTION 9 THE SPECIFIED LIMIT OF 2000 SQ. FEET. THE CLAIM OF THE APPELLANT IS THAT ITS PROJECT HAS A COMMERCIAL AREA OF 1585 SQ. FEET WHICH IS WELL WITHIN THE PRESCRIBED LIMIT OF 2000 SQ. FEET. THE HOUSING PROJECT OF THE APPELLANT IS S EPARATE HOUSING PROJECT AND QUALIFIES FOR DEDUCTION ON STAN DALONE BASIS AND CANNOT BE EQUATED WITH THE HOUSING PROJEC T DEVELOPED BY MIS. U.K. BUILDERS. THE APPELLANT HAS MAINTAINED SEPARATE BOOKS OF ACCOUNTS FOR THE PROJE CT, SEPARATE AUDIT REPORT HAS BEEN OBTAINED, SEPARATE COMPLETION CERTIFICATE HAS BEEN OBTAINED AND IS ON SEPARATE IDENTIFIED PIECE OF LAND AND THEREFORE A D ISTINCT PROJECT. IT QUALIFIES FOR DEDUCTION U/S. 80IB(10) O N STANDALONE BASIS AS IT FULFILS THE OTHER CONDITIONS SPECIFIED IN THE ABOVE SECTION. 9.4. AS OF NOW, THERE ARE NUMBER OF JUDICIAL PRONOUNCEMENTS ON THE SAME ISSUE, WHEREIN THE COURT S HAVE DECIDED THAT THE DEVELOPERS AND BUILDERS CANNO T BE DENIED THE DEDUCTION U/S. 80IB(10) IN RESPECT OF AN Y PROJECT, IF SUCH PROJECT FULFILS THE CONDITIONS LAI D DOWN IN THE ABOVE SECTION ON STANDALONE BASIS. 9.5. IN THE CASE OF SAROJ SALES ORGANISATION VS ITO 115 TT J 485 (MUMBAI), IT WAS HELD BY THE HON'BLE ITAT THA T WHEN TWO PROJECTS WERE SEPARATE AND DISTINCT, THE FACT T HAT THE PROJECT WAS INELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) WOULD NOT BAR THE ASSESSEE FROM CLAIMING RELIEF UND ER THAT SECTION IN RESPECT OF THE OTHER DISTINCT PROJECT. S IMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE HIGH COURT OF BOMBAY RECENTLY IN THE CASE OF CIT VS MIS VANDANA PROPERTI ES, IN ITA NO. 3336 AND 4361 OF 2010 DATED: 28/03/2012. 9.6. MOREOVER, THE AO HAS NOT BROUGHT OUT ANY FACT ON RECORD THAT THE APPELLANT HAS VIOLATED THE CLAUSE ( D) OF SECTION 80IB(10) BY CONSTRUCTING COMMERCIAL AREA MO RE THAN 2000 SQ. FEET AND HAS MERELY PROCEEDED TO DISA LLOW THE DEDUCTION ON PRESUMPTION OF THIS HOUSING BEING PART OF THE HOUSING PROJECT OF MIS. U.K. BUILDERS, WHICH IS NOT CORRECT. THE PROJECT OF THE APPELLANT FIRM IS A SEP ARATE PROJECT FOR ALL PRACTICAL PURPOSES. IN THE ABSENCE OF BRINGING ANY FACT IN THIS REGARD ON RECORD THAT THE COMMERCI AL AREA IN THE HOUSING PROJECT CONSTRUCTED BY THE APPELLANT IS IN U.K. CONSTRUCTION 10 EXCESS OF 2000 SQ.FT., NO ADVERSE VIEW ON THE ISSUE CAN BE TAKEN. 9.7. FURTHER, IN VIEW OF THE JUDICIAL PRONOUNCEMENT OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS BRAHMA ASSOCIATES 333 ITR 289 (2011) (BORN), WHEREI N ON THE ISSUE OF THE COMMERCIAL AREA, IT HAS BEEN HELD THAT ' IF THE CONDITIONS SET OUT IN SECTION 8018(10) ARE S ATISFIED, THEN DEDUCTION IS ALLOWABLE ON THE ENTIRE PROJECT A PPROVED BY THE LOCAL AUTHORITY AND THERE IS NO QUESTION OF ALLOWING DEDUCTION TO A PART OF THE PROJECT. IN THE PRESENT CASE, THE COMMERCIAL USER IS ALLOWED IN ACCORDANCE WITH THE D C RULES AND HENCE THE ASSESSEE WAS ENTITLED TO SECTIO N 8018(10) DEDUCTION ON THE ENTIRE PROJECT APPROVED B Y THE LOCAL AUTHORITY. ' 9.8. IN VIEW OF THE FACTS AND CIRCUMSTANCES AND THE JUDICIAL PRONOUNCEMENT CITED ABOVE, IN MY CONSIDERED OPINION , THE HOUSING PROJECT OF THE APPELLANT IS DISTINCT AND SE PARATE PROJECT ON STANDALONE BASIS AND ALSO COVERED BY THE RATIO OF JUDGEMENT IN THE CASE OF CIT VS BRAHMA ASSOCIATE S 333 ITR 289 (2011) (BORN) AND THEREFORE ELIGIBLE FOR DE DUCTION U/S. 80IB(10). IN VIEW OF THE SAME, THE AO IS DIREC TED TO ALLOW THE DEDUCTION TO THE HOUSING PROJECT OF THE A PPELLANT FOR THE YEAR UNDER CONSIDERATION AS IT FULFILS THE CONDITIONS SPECIFIED IN THE ABOVE SECTION. 5. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS POINT ED OUT THAT IN THE CASE OF THE ASSESSEES SISTER CONCERN M /S. U.K. BUILDERS, THE TRIBUNAL VIDE ITS ORDER DATED 20TH FE BRUARY 2015 IN ITA NO. 3920/MUM/2012 TO 3922 HAS DECIDED A N IDENTICAL ISSUE IN PARA 12 TO 15 AS UNDER:- 12. IN VIEW OF THE ABOVE, SINCE THE PROJECT OF THE ASSESSEE HAS BEEN APPROVED PRIOR TO 1-4-2005, THE OLD LAW SH ALL APPLY AND THE CONDITIONS WITH REGARD TO COMMERCIAL ESTABLISHMENT WHICH HAS BEEN INSERTED W.E.F. 1-4-20 05 WILL NOT BE APPLICABLE. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MANAN CORPORATION VS. ACIT (2012) 78 DTR 205 (GUJ.), MUMB AI U.K. CONSTRUCTION 11 ITAT IN THE CASES OF RAMPRASAD AGARWAL IN ITA NO. 2 435 & 2163/MUM/2010 DATED 5-9-2012 AND ITO VS. SAI KRUPA DEVELOPERS IN ITA NO.3661/MUM/2011 DATED 13-3 - 2012. IN VIEW OF THE ABOVE, WE MODIFY THE ORDER OF LD. CIT(A) AND DIRECT THE A.O. TO ALLOW THE FULL CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT WITH RESPECT TO T HE ENTIRE PROJECT WITHOUT RESTRICTING THE SAME TO RESIDENTIAL AREA. THUS, THE GROUNDS TAKEN BY THE ASSESSEE IN ALL HE Y EARS FOR ALLOWING FULL CLAIM OF DEDUCTION U/S.80IB(10) A RE ALLOWED. 13. WITH REGARD TO THE COMPLETION CERTIFICATE, THE LD. CIT(A) AFTER CAREFUL CONSIDERATION OF THE FACTS OF THE CAS E HELD THAT IN RESPECT OF PROJECT APPROVED PRIOR TO 1-4-2005, N O COMPLETION CERTIFICATE WAS REQUIRED. THE VIEW OF TH E LD. CIT(A) IS ALSO SUPPORTED BY THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. JAIN HOUSING & CONSTRUCTION LTD. (2013) 30 TAXMANN.COM 131. 14. IN RESPECT OF A.O.S OBJECTION IN RESPECT OF TH REE RAW HOUSES, THE LD. CIT(A) HELD THAT OPEN TERRACE AREA CANNOT BE INCLUDED IN BUILT UP AREA IN RESPECT OF PROJECT APPROVED PRIOR TO 1-4-2005. THE BUILT UP AREA HAS TO BE CONS IDERED AS PER DC RULES ACCORDING TO WHICH THE AREA WORKED OUT TO BE 1471 SQ. FT. IE. BELOW THE PRESCRIBED LIMIT. 15. WITH REGARD TO THE A.O.S ALLEGATION REGARDING UK COMMERCIAL AND UK RESIDENTIAL ARE PART OF ONE APPRO VAL, THEREFORE, ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION I N RESPECT OF UK RESIDENTIAL PROJECT ALSO, THE LD. CIT (A) HEL D THAT THESE ARE TWO DIFFERENT PROJECTS ON THE SAME PIECE OF LAND OF 17.67 ACRES. SINCE THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION IN RESPECT OF UK COMMERCIAL PROJECT, THE ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) CANNOT BE DECLINED IN RESPECT OF UK RESIDENTIAL PROJECT HAVIN G LAND OF MORE THAN ONE ACRE. IN VIEW OF THE ABOVE DISCUSSION , RESPECTFULLY FOLLOWING THE DECISION OF HONBLE JURI SDICTIONAL HIGH COURT IN THE CASES OF M/S HAPPY HOME ENTERPRIS ES AND M/S KANAKIA SPACES PVT. LTD. (SUPRA), WE DIRECT THE A.O. TO ALLOW FULL CLAIM OF THE DEDUCTION U/S 80IB( 10) OF THE ACT IN RESPECT OF ENTIRE RESIDENTIAL PROJECT IN ALL THE RELEVANT ASSESSMENT YEARS UNDER CONSIDERATION. U.K. CONSTRUCTION 12 6. APART FROM THIS, WE NOTE THAT THE OBJECTIONS RAI SED BY THE ASSESSING OFFICER IN RESPECT OF THE OWNERSHIP O F THE LAND, SANCTION GRANTED BY THE GRAMPANCHAYAT BEING A COMPETENT LOCAL AUTHORITY AND COMPLETION CERTIFICAT E ISSUED BY THE ZILHA PARISHAD AS WELL AS THE COMMERCIAL ARE A IS MORE THAN 2,000 SQ. FT. ARE COVERED BY THE VARIOUS DECISIONS AS RELIED UPON BY THE ASSESSEE. ON THE IS SUE OF OWNERSHIP OF THE LAND FOR CLAIMING DEDUCTION U/S 80 IB(10), THERE IS NO REQUIREMENT THAT THE LAND SHOULD BE OWN ED BY THE ASSESSEE ENTERPRISE AS HAS BEEN HELD IN THE VAR IOUS JUDGMENTS INCLUDING THE FOLLOWING:- A) CIT VS. RADH DEVELOPERS [2010 329 ITR 1 ] [GUJAR AT HC] B) CIT VS. VISHAL CONSTRUCTIONS [2013 35 TAXMANN.CO M182] [GUJ. HC.] C) ITO VS. SAI KRUPA DEVELOPERS ITA NO. 3661/MUM/20 11 7. IN SUPPORT OF ITS CONTENTION THAT THE GRAMPANCHA YAT IS A COMPETENT LOCAL AUTHORITY, THE ASSESSEE HAS RELIED UPON THE FOLLOWING DECISIONS:- A) KRISHNA NAHRUBHAU LOHOKARE V/S ITO [INCOME TAX ACT NO.937/PN/2010 [PUNE TRIB.] B) KRISH ENTERPRISES V/S DCIT INCOME TAX ACT NO. 6728/MUM/2013 8. IT IS CLEAR FROM THE ABOVE DECISIONS OF THE TRIB UNAL THAT THE GRAMPANCHAYAT IS A COMPETENT LOCAL AUTHORITY AN D, THEREFORE, THE SANCTION OF PLAN AND COMMENCEMENT CERTIFICATE ISSUED BY THE GRAMPANCHAYAT IS A VALID CERTIFICATE. THE CIT(A) HAS DECIDED ALL THESE ISSUE S BY FOLLOWING THE VARIOUS DECISION. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF CI T(A) QUA THIS ISSUE. 9. IN THE RESULT BOTH APPEALS OF THE REVENUE ARE DISMISSED. 3.2. IT IS NOTED BY US THAT LD. CIT(A) HAS ALSO RELIED U PON ITS OWN ORDERS OF EARLIER YEARS WHILE PASSING THE ORDE RS OF YEARS BEFORE US. ORDERS OF EARLIER PASSED BY THE CIT(A) H AVE BEEN U.K. CONSTRUCTION 13 UPHELD BY THE TRIBUNAL IN AFORESAID ORDER. IT IS FU RTHER NOTED BY US THAT ALL THE ISSUES AS WERE RAISED BY THE AO IN THE IMPUGNED ORDERS FOR DENYING THE BENEFIT OF DEDUCTIO N U/S 80 IB(10), HAVE ALREADY BEEN WELL ADDRESSED BY THE TRI BUNAL. IT IS FURTHER BROUGHT TO OUR NOTICE THAT SLP FILED BY THE DEPARTMENT AGAINST THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RADHE DEVELOPERS 329 ITR 1 HAS BEEN DISMISSED BY HONBLE SUPREME COURT. NO DISTINCTION HAS BEEN MADE BY THE LD. DR BEFORE US ON FACTS OR LAW. THUS IN VIEW OF THE JUDGMENTS OF COORDINATE BENCH IN ASSESSEES OWN CASE, WE FIND THAT NO INTERFERENCE IS CALLED FOR IN THE ORDE R OF LD CIT(A) AND SAME IS UPHELD AND THE AO IS DIRECTED TO ALLOW THE BENEFIT OF DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IB, FOLL OWING THE ORDER OF THE TRIBUNAL FOR A.YS. 2008-09 & 2009-10. 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVEN UE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; ' DATED : 20/01/2016 CTX? P.S/. .. U.K. CONSTRUCTION 14 #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. $ %& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( $ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -. ' /0 , ) $ /01 , / DR, ITAT, MUMBAI 6. 2 3 / GUARD FILE. / BY ORDER, ( -$ ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI