Deputy Commissioner of Income-tax, V. Amit Enterprises Housing Ltd., Pune

ITA 450/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9450 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 13-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUHAS S KULKARNI
• Keywords: Additional evidence
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 450 /P U N/201 5 / ASSESSMENT YEAR : 20 1 0 - 11 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 1 (1), PUNE . / APPELLANT VS. AMIT ENTERPRISES HOUSING LIMITED, 1902, AMIT HOUSE, SADASHIV PETH, PUNE 411030 . / RESPONDENT PAN: A AGCA9192A / APPELLANT BY : S HRI SUHAS S. KULKARNI / RESPONDENT BY : SHRI NIKHIL S. PATHAK / DATE OF HEARING : 17 .0 4 . 2017 / DATE OF PRONOUNCEMENT : 17 . 0 5 .201 7 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - I, PUNE , DATED 31 . 07. 201 4 RELATING TO ASSESSMENT YEAR 20 1 0 - 11 AGAINST ORDER PASSED UNDER SECTION 14 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX(AP PEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE PROJECT HAD BEEN APPROVED AS A ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 2 'RESIDENTIAL + COMMERCIAL PROJECT' WHICH HAS ALSO BEEN CONFIRMED BY THE PMC AND NOT AS A ' HOUSING PROJECT'. 3. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN HOLD ING THAT THE AMENDED PROVISIONS U/S 80IB(10)(D) AND 80IB(10)(C) WOULD NOT BE APPLICABLE TO PROJECTS COMMENCED PRIOR TO 01.04.2005. 4. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN COMING TO THE ABOVE CONCLUSION ON THE INCORRECT PREMISE THAT EST OPPELS CAN BE INVOKED AGAINST THE GOVERNMENT IN EXERCISE OF ITS LEGISLATIVE POWERS. 5. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN HOLDING THAT THOUGH THE AMENDED PROVISION OF SECTION 80IB(10)(D) AND 80IB(14)(A) CAME INTO OPERATION W.E.F. 01. 04.2005, THOSE WERE NOT APPLICABLE IN THE CASE OF ASSESSEE RELATING TO A.Y. 2005 - 06 WITHOUT APPRECIATING AND APPLYING THE PRINCIPLE LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ISTHMAIN STEAMSHIP LINE 20 ITR 52 KARIMTHARUVI TEA ESTATE LTD. 60 I TR 262. 6. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) ERRED IN NOT APPRECIATING THAT EVEN IF THE AMENDED LAW WAS PROSPECTIVE, THE LIMITATION OF RESTRICTIONS U/S 80IB(1)(D) AND 80LB(14)(A) ARE STILL APPLICABLE TO. A.Y. 2005 - 06 RELYING UPON RELIANCE J UTE INDUSTRIES VS. CIT REPORTED IN 120 ITR 921 (SC). 3. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE ARISING IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE RELAT ING TO ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD DEVELOPED THE PROJECT NAMED TREASUR E PARK. THE SAID PROJECT WAS APPROVED PRIOR TO 01.04.2005, UNDER WHICH THE ASSESSEE HAD CONSTRUCTED TWO COMMERCIAL BU ILDINGS, AGAINST WHICH NO DEDUCTION WAS CLAIMED UNDER SECTION 80IB(10) OF THE ACT. FURTHER, IN BUILDING F, AREAS OF FLATS INCLUDING BALCONY EXCEEDED 1500 SQ.FT. AND NO DEDUCTION WAS ALSO CLAIMED IN RESPECT THEREOF. IN BUILDING D, THERE WERE FOUR ADJA CENT FLATS, WHERE THE AREA EXCEEDED 1500 SQ.FT. AND AGAIN THE ASSESSEE DID NOT CLAIM ANY DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE ASSESSING OFFICER IN LINE WITH THE EARLIER ORDERS IN ASSESSEES OWN CASE, DENIED THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 3 5. THE CIT(A) ON THE OTHER HAND, ALLOWED THE CLAIM OF DEDUCTION ON SUCH ACCOUNTS CLAIMED BY THE ASSESSEE, EXCEPT ON THE FLATS ON WHICH, NO DEDUCTION WAS CLAIMED IN THE RETURN OF INCOME. 6. THE REVENUE IS IN APPEAL AGAINST THE ORDER O F CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. SIMILAR ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF PROJECT TREASUR E PARK HAS ARISEN IN ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. THE TRIBUNAL IN ITA NO.2210/PN/2013, RELATING TO ASSESSMENT YEAR 2008 - 09, VIDE ORDER DATED 23.09.2015 AND IN ITA NO.1174/PN/2014, RELATING TO ASSESSMENT YEAR 2009 - 10, VIDE ORDER DATED 27.04.2016 HAD HELD AS UNDER: - 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECOR D. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF DEVELOPING AND CONSTRUCTION OF RESIDENTIAL PROJECTS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DECLARED TOTAL INCOME AT RS.2,42,19,620/ - . THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) O F THE ACT AT RS.4,83,83,848/ - IN RESPECT OF THE PROJECT NAMELY TREASURE PARK AND SUM OF RS.34,35,747/ - IN RESPECT OF OTHER PROJECT NAMELY VED VIHAR. THE CLAIM OF DEDUCTION FOR PROJECT VED VIHAR WAS ALLOWED BY THE ASSESSING OFFICER. HOWEVER, IN RESP ECT OF PROJECT TREASURE PARK, THE ASSESSING OFFICER NOTED THAT IT WAS SITUATED AT SURVEY NO.61 AND CONSISTED OF 352 RESIDENTIAL UNITS, 23 SHOPS AND 3 SHOWROOMS. THERE WERE 10 BUILDINGS I.E. A TO H AND J & K, WHICH HAD TOTAL BUILT UP AREA OF 4,47,620 SQ. FT. THE BUILDINGS A TO H WERE RESIDENTIAL AND BUILDINGS J & K WERE COMMERCIAL BUILDINGS / SHOPS. THE ASSESSING OFFICER ALSO NOTED THAT IN BUILDINGS A TO H, PART OF BUILDING D AND ENTIRE BUILDING F HAD NON - 80IB(10) RESIDENTIAL UNITS WITH BUILT UP AREA OF EACH UNIT TO BE MORE THAN 1500 SQ.FT. THE TOTAL RESIDENTIAL BUILT UP AREA WAS 4,35,295/ - , OUT OF WHICH THE TOTAL BUILT UP AREA IN RESPECT OF BUILDING F AND PART OF BUILDING D, WHICH HAD FLATS EXCEEDING 1500 SQ.FT., WAS 51,302 SQ.FT. THE REST OF AREA WHER E BUILT UP AREA OF EACH FLAT WAS LESS THAN 1500 WAS 3,33,993 SQ.FT. FURTHER, THE BUILDINGS J & K NAMED AS SANT NAGAR SHOPS WERE EXCLUSIVELY COMMERCIAL BUILDINGS, WHICH HAD TOTAL BUILT UP AREA OF 12,325 SQ.FT. THE ASSESSING OFFICER NOTED THAT THE AUDITOR IN FORM NO.10CCB HAD MENTIONED THAT THE HOUSING PROJECT FOR WHICH THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS CLAIMED COMPRISED OF RESIDENTIAL UNITS HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT. AND BUILT UP AREA OF MORE THAN 1500 SQ.FT. AND THE AS SESSEE CLAIMED PROPORTIONATE DEDUCTION ON PROFITS ATTRIBUTABLE TO RESIDENTIAL FLATS HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT. FURTHER, THE ASSESSEE HAD NOT CLAIMED ANY DEDUCTION ON THE PROFITS ATTRIBUTABLE TO COMMERCIAL PART OF PROJECT. IN VIEW OF AL L THIS, THE ASSESSING OFFICER OBSERVED THAT THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80IB(10) OF THE ACT WAS IN RESPECT OF THE PROJECT WHICH WAS RESIDENTIAL AND COMMERCIAL PROJECT AND HAD FLATS, WHERE BUILT UP AREA WAS IN EXCESS OF 1500 SQ.FT. IN VIEW THEREOF, AS PER THE ASSESSING OFFICER, THE ASSESSEE HAD NOT FULFILLED THE CONDITIONS LAID ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 4 DOWN UNDER SECTION 80IB(10)(C) OF THE ACT AND 80IB(10)(D) OF THE ACT AND THE ASSESSEE WAS ASKED AS TO WHY THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT FOR THIS PROJECT SHOULD NOT BE DENIED. THE ASSESSEE PUT UP ITS CASE BEFORE THE ASSESSING OFFICER AND POINTED OUT THAT EVEN IF ALL THE BUILDINGS IN PROJECT TREASURE PARK WERE CONSIDERED AS PART OF ONE HOUSING PROJECT, ALL THE CONDITIONS HAVE BEEN SATISFIED E XCEPT FOR THE CONDITION RELATING TO MAXIMUM BUILT UP AREA AS PER CLAUSE (C) OF SECTION 80IB(10) OF THE ACT IN RESPECT OF PART OF BUILDING D AND BUILDING F. THE ASSESSEE FURTHER CONTENDED THAT ON THIS GROUND ALONE, THE DEDUCTION UNDER SECTION 80IB(10) OF T HE ACT IN RESPECT OF ELIGIBLE UNITS COULD NOT BE DENIED. WITHOUT PREJUDICE BASIS, THE ASSESSEE CLAIMED THAT THE PROPORTIONATE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF ELIGIBLE RESIDENTIAL UNITS AND DEDUCTION OF RS.1,71,831/ - ON THE COMMER CIAL SHOPS, WHICH WAS NOT CLAIMED IN THE RETURN OF INCOME MAY BE ALLOWED. THE ASSESSING OFFICER HOWEVER, REJECTED THE CLAIM OF ASSESSEE AS THE PROJECT DEVELOPED BY THE ASSESSEE WAS ONE SINGLE PROJECT AND WAS A RESIDENTIAL PLUS COMMERCIAL, WHICH IS MENTION ED IN THE COMMENCEMENT CERTIFICATE GIVEN BY PUNE MUNICIPAL CORPORATION AND IT ALSO MENTIONS THE SHOPS AND SHOWROOMS I.E. COMMERCIAL PREMISES. IN VIEW THEREOF, THE ASSESSING OFFICER HELD THAT THE PROJECT TREASURE PARK COULD NOT BE CALLED AS HOUSING PROJE CT IN THE FIRST PLACE AND FURTHER SINCE THE CONDITIONS LAID DOWN IN THE SAID SECTION WERE NOT SATISFIED, THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT WAS HELD TO BE NOT AVAILABLE FOR THE PROJECT. THE CLAIM OF ASSESSEE FOR PROPORTIONATE DEDUCTIO N IN RESPECT OF ELIGIBLE UNITS WAS ALSO DENIED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAID DEDUCTION WAS ADMISSIBLE TO THE HOUSING PROJECT AS A WHOLE AND NOT FOR PORTION THEREOF. THE ASSESSING OFFICER IN THIS REGARD, PLACED RELIANCE ON VARIOUS DE CISIONS OF TRIBUNAL AND DENIED THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT. 6. BEFORE THE CIT(A), THE ASSESSEE EXPLAINED THAT CERTAIN AREAS OF PROJECT WERE NOT CONSIDERED BY IT AS PART OF ELIGIBLE HOUSING PROJECT FOR THE PURPOSE OF COMPUTATI ON OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. IT WAS FURTHER CONTENDED THAT WHERE THE OTHER BUILDINGS IN THE PROJECT WERE SATISFYING THE CONDITIONS LAID DOWN IN SECTION 80IB(10) OF THE ACT, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE C LAIM MADE BY THE ASSESSEE. IT WAS CLAIMED BY THE ASSESSEE THAT THE BUILDINGS F, J, K AND 4 FLATS OF BUILDING D WERE NOT PART OF ELIGIBLE HOUSING PROJECTS AND EVEN IF THEY WERE PART OF ELIGIBLE HOUSING PROJECTS, THE DEDUCTION WAS STILL ALLOWABLE ON THE PRO FITS INCLUDING THE SAID BUILDINGS AND 4 FLATS OF BUILDING D. VARIOUS PROPOSITIONS IN THIS REGARD WERE RAISED BY THE ASSESSEE BEFORE THE CIT(A), WHICH ARE INCORPORATED AT PAGES 14 TO 19 OF THE PAPER BOOK. THE CIT(A) REFERRED TO THE EARLIER DECISION OF CIT (A) FOR ASSESSMENT YEAR 2008 - 09 AND THE PROPOSITIONS RAISED BY THE ASSESSEE THAT IT WAS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF BUILT UP AREA OF BUILDING F, WHERE THE TOTAL AREA EXCEEDED 1500 SQ.FT. ON ACCOUNT OF BALCONY AND ALSO IN RESPECT OF 4 FLATS IN BUILDING D, WHICH WERE SOLD INDEPENDENTLY, BUT WERE MERGED BY THE FLAT OWNERS. FURTHER, IN RESPECT OF BUILT UP AREA OF SHOPS AND COMMERCIAL ESTABLISHMENTS IN THE HOUSING PROJECT, THE ASSESSEE CLAIMED THAT SINCE TH E PROJECT WAS SANCTIONED PRIOR TO AMENDMENT BROUGHT IN BY SECTION 80IB(10)(D) OF THE ACT, THE ASSESSEE WAS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE CIT(A) REFERRED TO THE DECISION OF HIS PREDECESSOR RELATING TO ASSESSMENT YEAR 2008 - 09, WHEREIN THE ISSUE WAS EXAMINED IN DETAIL AND IT WAS HELD THAT THERE WAS NO VIOLATION OF CONDITIONS BY THE ASSESSEE AS THE PROJECT OF THE ASSESSEE WAS APPROVED BY LOCAL AUTHORITY PRIOR TO 01.04.2005. IN VIEW THEREOF, THE CIT(A) ALLOWED THE AD DITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE FOR ALLOWING DEDUCTION IN RESPECT OF 4 UNITS IN BUILDING D, ALL UNITS IN BUILDING F AND COMMERCIAL UNITS IN BUILDINGS J & K. THE CIT(A) IN ASSESSMENT YEAR 2008 - 09 HAD ADMITTED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND IN VIEW OF THE POWERS OF CIT(A) BEING CO - TERMINUS WITH THE POWERS OF ASSESSING OFFICER AND IN ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 5 VIEW OF THE PROVISIONS OF RULE 46 OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES), FRESH EVIDENCE FILED, WAS ADMITTED FOR ADJUDICATION A ND THE CIT(A) WHILE DECIDING THE PRESENT APPEAL RELATING TO ASSESSMENT YEAR 2009 - 10, SIMILARLY ADMITTED ADDITIONAL EVIDENCE FOR ADJUDICATION FOR THE YEAR UNDER CONSIDERATION ALSO AND NOTED THAT THERE WAS NO CHANGE EITHER IN THE FACTUAL ASPECTS OF THE MATTE R, EXCEPT THE QUANTUM OF DEDUCTION CLAIMED AND THE STATUS OF ASSESSEE OR THE RELEVANT LEGAL POSITION FOR THE ASSESSMENT YEAR FOR THE YEAR UNDER CONSIDERATION. HE THUS, HELD THAT THE FINDINGS AND CONCLUSIONS DRAWN BY THE CIT(A) VIDE ORDER DATED 27.08.2013 FOR ASSESSMENT YEAR 2008 - 09 SHALL HOLD GOOD FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE PROJECT TREASURE PARK WAS HELD TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ALSO. THE ALTERNATE PLEA OF THE ASSESSEE ON WITHOUT PREJUDICE B ASIS THAT PROPORTIONATE DEDUCTION IN RESPECT OF UNITS WHICH SATISFIED THE REQUIREMENTS OF SECTION 80IB(10) OF THE ACT MAY BE ALLOWED, WAS HELD TO BE NOT SURVIVE, IN VIEW OF THE ASSESSEE SUCCEEDING ON THE MAIN ASPECTS OF THE ISSUE. 7. THE REVENUE IS IN A PPEAL AGAINST THE ORDER OF CIT(A) IN THIS REGARD AND HAS RAISED OBJECTIONS THAT WHERE THE PROJECT WAS APPROVED AS A RESIDENTIAL AND COMMERCIAL PROJECT AND NOT AS HOUSING PROJECT, THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10 ) OF THE ACT. FURTHER, GROUNDS OF APPEAL HAVE BEEN RAISED AGAINST NON - FULFILLMENT OF AMENDED PROVISIONS OF SECTION 80IB(10)(C) OF THE ACT AND 80IB(10)(D) OF THE ACT. 8. WE FIND THAT IDENTICAL ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE AC T IN RESPECT OF PROJECT NAMED TREASURE PARK AROSE BEFORE THE TRIBUNAL IN ITA NO.2210/PN/2013, RELATING TO ASSESSMENT YEAR 2008 - 09 AND VIDE ORDER DATED 23.09.2015, THE TRIBUNAL CONSIDERED THE ORDER OF ASSESSING OFFICER IN DENYING THE DEDUCTION UNDER SECTI ON 80IB(10) OF THE ACT AND THE PROPOSITIONS RAISED BEFORE THE CIT(A) AND THE ADDITIONAL EVIDENCES FILED UNDER RULE 46A OF THE RULES BEFORE THE CIT(A) AND THE ORDER OF CIT(A) IN HOLDING THAT THE ASSESSEE WAS ENTITLED TO CLAIM THE DEDUCTION UNDER SECTION 80I B(10) OF THE ACT IN RESPECT OF BUILDING F, 4 FLATS IN BUILDING D AND COMMERCIAL SHOPS IN BUILDINGS J & K. THE TRIBUNAL HELD AS UNDER: - 23. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAP ER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE IN THE INSTANT CASE HAS CONSTRUCTED A HOUSING PROJECT AT SURVEY NO.61, SAHAKAR NAGAR, PUNE WHICH COMPRISE OF 10 BUILDINGS A,B,C,D ,E,F,G, H, J &K. THE BUILDINGS A TO H ARE RESIDENTIAL BUILDINGS AND THE BUILDINGS J &K ARE EXCLUSIVELY COMMERCIAL BUILDINGS/SHOPS. THE TOTAL RESIDENTIAL BUILT UP AREA OF THE PROJECT IS 97.25% AND THAT OF THE COMMERCIAL/SHOP IS 2.75% WHOSE AREA TOTALS TO 12,325 SQ.FT. WE FIND THE ASSESSEE IN ITS RETURN OF INCOME HAD CLAIMED DEDUCTION ONLY IN RESPECT OF THE RESIDENTIAL UNITS HAVING BUILT UP AREA LESS THAN 1500 SQ.FT WHICH IS EVIDENT FROM THE FORM 10CCB FILED ALONG WITH THE RETURN OF INCOME WHEREIN IT HAS BEEN MENTIONED THAT THE HOUSING PROJECT COMPRISES OF RESIDENTIAL UNITS HAVING BUILT UP AREA OF BOTH MORE OR LESS THAN 1500 SQ.FT. IN OTHER WORDS, THE ASSESSEE HAS CLAIMED PROPORTIONATE DEDUCTION U/S.80IB(10). 24. WE FIND THE COMMENCEMENT CERTIFICATE ISSU ED BY PMC CLEARLY SHOWS THAT APPROVAL IS RESIDENTIAL + COMMERCIAL AND THE OCCUPANCY/COMPLETION CERTIFICATE MENTIONS THE COMPLETION OF BOTH THE SHOPS AND SHOWROOMS. WE FIND THE AO DENIED THE CLAIM OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT (A) THE PROJEC T APPROVED BY PMC IS BOTH RESIDENTIAL AND COMMERCIAL (B) THE PROJECTED CONSISTED OF COMMERCIAL AREA OF 12,325 SQ.FT. (C) THE BUILT UP AREA OF ALL THE UNITS IN BUILDING F ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 6 EXCEEDED 1500 SQ.FT. AND (D) THE BUILT UP AREA OF 4 FLATS AFTER BEING COMBINED EXCEEDE D 1500 SQ.FT. IN RESPECT OF BUILDING D. 25. WE FIND BEFORE THE CIT(A) THE ASSESSEE TOOK ADDITIONAL GROUND THAT IT IS ENTITLED TO CLAIM DEDUCTION U/S.80IB(10) IN RESPECT OF BUILDING F AS WELL AS J AND K AND THE 4 FLATS OF BUILDING D. WE FIND AFTER CONSI DERING THE VARIOUS SUBMISSIONS MADE BY THE ASSESSEE THE LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE ENTIRE HOUSING PROJECT. WHILE DOING SO, HE HELD THAT SINCE THE PROJECT HAS BEEN APPROVED ON 17 - 12 - 2004 WHICH IS PRIOR TO 01 - 04 - 2005 , THEREFORE, THE AREAS COVERED BY TERRACES AND BALCONIES ARE TO BE EXCLUDED FROM THE BUILT UP AREA AND THEREFORE THE UNITS OF BUILDING F, WHERE NONE OF THE UNITS EXCEED 1500 SQ.FT. AFTER REDUCING THE TERRACES AND BALCONIES AND THEREFORE THE ASSESSEE I S ENTITLED TO DEDUCTION U/S.80IB(10). SO FAR AS BUILDINGS J AND K ARE CONCERNED HE HELD THAT SINCE THE PROJECT IS APPROVED PRIOR TO 01 - 04 - 2005, THEREFORE, THE LIMIT OF 5% OR 2000 SQ.FT. WHICHEVER IS LESS IS NOT APPLICABLE TO THE PROJECT OF THE ASSESSEE. FOR THE ABOVE PROPOSITION HE RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES REPORTED IN 333 ITR 289 WHERE IT HAS BEEN HELD THAT PRIOR TO THE AMENDMENT THERE WAS NO RESTRICTION IN THE AREA OF COMMERCIAL BUILDINGS A ND THE SAID RESTRICTION IS NOT APPLICABLE TO THE EARLIER YEARS. EVEN THOUGH THE ASSESSMENT YEAR INVOLVED IN 2008 - 09 STILL THE LIMIT IS NOT APPLICABLE BECAUSE THE PROJECT WAS SANCTIONED PRIOR TO THE SAID AMENDMENT. 26. AS REGARDS THE THIRD OBJECTION OF TH E AO THAT BUILT UP AREA OF 4 FLATS AFTER BEING COMBINED EXCEEDED 1500 SQ.FT. IN RESPECT OF BUILDING D, HE HELD THAT THE ASSESSEE HAS SOLD SEPARATE UNITS TO THE RESPECTIVE CUSTOMERS WHERE THE BUILT UP AREA OF EACH OF THE FLAT IS LESS THAN 1500 SQ.FT. AND TH E CUSTOMERS AFTER PURCHASING THE FLATS HAVE COMBINED THEM AND THEREFORE THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10). 27. IT IS THE GRIEVANCE OF THE REVENUE THAT WHEN THE CLAIM OF DEDUCTION U/S.80IB(10) WAS NOT MADE FOR THE ENTIRE PROJECT IN THE RETURN OF INCOME FILED AND WHEN THE PROJECT HAS BEEN APPROVED AS A RESIDENTIAL CUM COMMERCIAL PROJECT, THEREFORE, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10) AND THE CIT(A) WAS NOT JUSTIFIED IN ALLOWING THE CLAIM. 28. WE DO NOT F IND ANY MERIT IN THE ABOVE ARGUMENT OF THE REVENUE. IT HAS BEEN HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS REPORTED IN 349 ITR 336 THAT AN ASSESSEE IS ENTITLED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISS IONS BEFORE THE APPELLATE AUTHORITIES BUT IS ALSO ENTITLED TO RAISE ADDITIONAL CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION TO PERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO DEAL NOT MEREL Y WITH ADDITIONAL GROUNDS WHICH BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW BUT WITH ADDITIONAL GROUNDS WHICH WERE AVAILABLE WHEN THE RETURN WAS FILED. THE WORDS COULD NOT HAVE BEEN RAISED MUST BE CONSTRUED LIBERALLY AND NOT STRICTLY. THERE MAY BE SEVERAL FACTORS JUSTIFYING THE REASON OF A NEW PLEA IN AN APPEAL AND EACH CASE MUST BE CONSIDERED ON ITS OWN FACTS. THEREFORE, THE FIRST GROUND OF THE REVENUE THAT WHEN THE CLAIM OF DEDUCTION U/S.80IB(10) WAS NOT MADE FOR THE ENTIRE PROJECT I N THE RETURN OF INCOME FILED OR IN THE COURSE OF ASSESSMENT PROCEEDINGS OR IN FORM 10CCB FILED BEFORE THE AO, THE CIT(A) ERRED IN ALLOWING THE CLAIM OF ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 7 DEDUCTION U/S.80IB(10) OF THE ACT TO THE PROJECT IS DEVOID OF ANY MERIT AND ACCORDINGLY THE SAME IS DISM ISSED. 29. NOW COMING TO THE OTHER ISSUES ARE CONCERNED, WE FIND THE AO DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT THE PROJECT CONSISTED OF COMMERCIAL AREA OF 12,325 SQ.FT. AS MENTIONED EARLIER, THE PROJECT HAS BEEN APPROVED BY THE P MC ON 17 - 12 - 2004, I.E. PRIOR TO 01 - 04 - 2005. THE HONBLE SUPREME COURT IN THE CASE OF SARKAR BUILDERS (SUPRA) HAS HELD THAT WHERE HOUSING PROJECTS WERE SANCTIONED BEFORE THE AMENDMENT BUT HAVE BEEN COMPLETED AFTER 01 - 04 - 2005 WHEN THE AMENDED PROVISIONS CAM E INTO OPERATION THE ASSESSEE WOULD BE ENTITLED TO THE DEDUCTION U/S.80IB(10)AND THE CONDITIONS MENTIONED IN CLAUSE (D) WOULD NOT APPLY. THUS, THE BENEFIT RESTRICTED TO CASES WHERE THE AREA UTILIZED FOR SHOPS AND COMMERCIAL ESTABLISHMENTS DOES NOT EXCEED 5% OF AGGREGATE BUILT UP AREA OF HOUSING PROJECT OR 2000 SQ.FT WHICH WAS LESS DOES NOT TO APPLY TO PROJECTS WHERE APPROVAL OF LOCAL AUTHORITY WAS GRANTED PRIOR TO 01 - 04 - 2005 EVEN IF PROJECT IS COMPLETED THEREAFTER. 30. SINCE IN THE INSTANT CASE ADMITTED LY, THE PROJECT HAS BEEN SANCTIONED PRIOR TO 01 - 04 - 2005 AND THE PROJECT HAS BEEN COMPLETED AFTER 01 - 04 - 2005, THEREFORE, THE RESTRICTION ON THE AREA OF COMMERCIAL BUILDING IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THEREFORE, THIS OBJECTION OF TH E REVENUE BEING DEVOID OF MERIT IS DISMISSED. 31. SO FAR AS THE OBJECTION OF THE AO THAT THE BUILT UP AREA OF ALL THE FLATS IN BUILDING F EXCEEDED 1500 SQ.FT., WE FIND THE LD.CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT AFTER EXCLUSION OF THE BALCONIES AND TERRACES NONE OF THE FLATS OF BUILDING F EXCEEDED 1500 SQ.FT. COULD NOT BE CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. IT IS AN ADMITTED FACT THAT THE COMMENCEMENT CERTIFICATE IS DATED 17 - 12 - 2004 WHICH IS PRIOR TO 01 - 04 - 2005. THE HONBLE BOMBAY HIGH COURT HAD AN OCCASION TO DECIDE THE ISSUE OF BUILT UP AREA INTRODUCED BY WAY OF SECTION 80IB(14)(A) W.E.F. 01 - 04 - 2005 IN THE CASE OF PRIME PROPERTIES (SUPRA) AND HELD THAT THE SAME IS NOT APPLICABLE TO HOUSING PROJECTS APPROVED PRIOR TO 01 - 04 - 205. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT READ AS UNDER : 2. THIS APPEAL WAS ADMITTED ON 14 TH JANUARY, 2013 ON THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW : (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL DID NOT ERR IN HOLDING THAT THE CLARIFICATION OF THE BUILT UP AREA INTRODUCED BY WAY OF SECTION 80IB(14)(A) WITH EFFECT FROM 01 - 04 - 2005 CAN ONLY BE APPLIED TO PROJECTS WHICH HAVE BEEN SANCTIONED AFTER 01 - 04 - 2005? (B) WHETHER ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE ORDER OF THE TRIBUNAL PASSED WITHOUT APPRECIATING AND EVALUATING ALL THE RELEVANT FACTS AND EVIDENCES INCLUDING CIRCUMSTANTIAL EVIDENCES, NOT PERVERSE? 3. THE RESPONDENT ASSESSEE IS A BUILDER WHO CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF ITS HOUSING PROJECT AT PUNE. THE ADMITTED POSITION IS THAT THE SUBJECT PROJECT WAS SANCTIONED/APPROVED PRIOR TO 1 ST APRIL, 2005. THE PARLIAMENT BY FINANCE (NO.2) ACT, 2004 INTRODUCED SUB - SECTION 14(A) TO SECTION 80IB(10) OF THE ACT W.E.F. 1 ST APRIL 2005. THUS, ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 8 THE ISSUE ARISING IN THIS APPEAL IS WHERE HOUSING PROJECTS HAS RECEIVED SANCTION/APPROVAL PRIOR TO 1 ST APRIL, 2005 WOULD THE PROVISION OF SECTION 80IB(14)(A) OF THE ACT, HAVE ANY APPLICATION. 4. MR. SURESH KUMAR, LD. COUNSEL FOR THE REVENUE FAIRLY STATES THAT THE PRESENT CONTROVERSY STANDS CONCLUDED IN FAVOUR OF THE RESPONDENT ASSESSEE BY THE DECISION OF THIS COURT IN INCOME TAX APPEAL NO.1628 OF 2013 (CIT VS. RAVIRAJ KOTHARI PUNJABI ASSOCIATES) RENDERED ON 24 TH AP RIL, 2015 IN RESPECT OF SECTION 80IB(14)(A) OF THE ACT. FURTHER, IT IS SUBMITTED THAT THE RATIO OF DECISION OF THE APEX COURT IN CIT VS. M/S. SARKAR BUILDERS WOULD ALSO APPLY TO THE PRESENT CASE. 5. IN VIEW OF THE ABOVE, BOTH SUBSTANTIAL QUESTIONS OF LAW S ARE ANSWERED IN THE AFFIRMATIVE, I.E. IN FAVOUR OF THE RESPONDENT ASSESSEE AND AGAINST THE REVENUE. 32. SINCE IN THE INSTANT CASE THE BUILT UP AREA OF ALL THE UNITS OF BUILDING F ARE LESS THAN 1500 SQ.FT. AFTER EXCLUDING THE BALCONIES AND TERRACES, THE REFORE, THE CIT(A) WAS FULLY JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF BUILDING F. 33. SO FAR AS DENIAL OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE 2 UNITS OF BUILDING D ARE CONCERNED, WE FIND THE ASSESSEE HAS NOT CLAIMED DED UCTION IN RESPECT OF THE ABOVE 2 UNITS IN THE RETURN OF INCOME ON THE GROUND THAT THE COMBINED AREA OF THE ADJOINING FLATS EXCEED 1500 SQ.FT. HOWEVER, BEFORE CIT(A) THE ASSESSEE TOOK AN ADDITIONAL GROUND AND CLAIMED THE DEDUCTION IN RESPECT OF THE ABOVE 2 UNITS ON THE GROUND THAT ASSESSEE HAS SOLD INDEPENDENT UNITS TO THE RESPECTIVE CUSTOMERS WHICH WERE LESS THAN 1500 SQ.FT. IT IS THE CUSTOMERS WHO HAVE COMBINED THE FLATS AND THEREFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10). WE FIND THE LD.CI T(A) ADMITTED THE ADDITIONAL EVIDENCE AND ON THE BASIS OF THE DECLARATION OF THE CUSTOMERS HELD THAT IT IS THE CUSTOMERS WHO HAVE COMBINED THE UNITS AND THE ASSESSEE HAS SOLD SEPARATE UNITS TO THE CUSTOMERS WHERE THE BUILT UP AREA OF EACH UNIT IS LESS THAN 1500 SQ.FT. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ANKIT ENTERPRISES (SUPRA) HAS HELD THAT WHEN THE TWO ADJACENT FLATS WERE APPROVED BY THE LOCAL AUTHORITY AS SEPARATE UNITS AND THE COMPLETION CERTIFICATE ISSUED ON THAT BASIS THE 2 FLATS CA NNOT BE TREATED AS ONE UNIT TO COMPUTE THE BUILT UP AREA FOR THE PURPOSE OF SECTION 80IB(10). THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT AT PARA 3 OF THE ORDER READS AS UNDER : 3. SO FAR AS QUESTION (II) IS CONCERNED, IN THE IMPUGNED ORDER THE T RIBUNAL HAS RECORDED A FINDING OF FACT THAT TWO ADJOINING FLATS WERE APPROVED BY THE LOCAL AUTHORITY AS SEPARATE UNITS AND COMPLETION CERTIFICATE ISSUED ON THAT BASIS. THEREFORE, ON THE ABOVE FINDING OF FACT, THE TRIBUNAL HELD THAT THE TWO FLATS CANNOT BE TREATED AS ONE UNIT TO COMPUTE THE BUILT UP AREA FOR THE PURPOSES OF SECTION 80IB(10) OF THE INCOME TAX ACT, 1961. THE DECISION OF THE TRIBUNAL BEING BASED ON FINDING OF FACT, WE SEE NO REASON TO ENTERTAIN QUESTION (II). 34. SINCE IN THE INSTANT CASE T HE LD.CIT(A) HAS CATEGORICALLY GIVEN A FINDING THAT THE ASSESSEE HAS SOLD THE RESIDENTIAL UNITS TO DIFFERENT INDIVIDUALS, THE INDIVIDUAL OWNERSHIP IS LEGALLY ENFORCEABLE, THE INDIVIDUALITY OF THE OWNERSHIP EXISTS BEFORE THE DIFFERENT AUTHORITIES/ORGANISATI ONS LIKE PMC FOR CORPORATION TAX, MSEB FOR ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 9 ELECTRICITY METERS AND HOUSING SOCIETY FOR MEMBERSHIP ETC. AND SINCE HE HAS ALSO GIVEN A FINDING THAT IT IS THE CUSTOMERS WHO HAVE COMBINED THE ADJACENT UNITS FOR THEIR OWN REQUIREMENTS, THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE CITED SUPRA AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) IN RESPECT OF THE 2 UNITS OF BUILDING D. IN VIEW OF OUR AB OVE DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF THE LD.CIT(A) IS IN CONSONANCE WITH LAW. WE ACCORDINGLY UPHOLD THE SAME AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. THE ISSUE ARISING BEFORE US IS IDENTICAL TO THE ISSUE BEFOR E THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2008 - 09, WHERE THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT WAS DENIED TO THE ASSESSEE ON ACCOUNT OF AREA OF FLATS IN BUILDING F INCLUDING BALCONY EXCEEDING 1500 SQ.FT. AND FURTHER IN RESP ECT OF 4 FLATS ADJACENT WERE MERGED AND THE AREA EXCEEDED 1500 SQ.FT. AND ALSO BECAUSE OF COMMERCIAL SHOPS / ESTABLISHMENTS IN BUILDINGS J & K. THE ASSESSEE INITIALLY HAD NOT CLAIMED THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF ABOVE SAID FLATS AND COMMERCIAL SHOPS. HOWEVER, ADDITIONAL GROUNDS OF APPEAL WERE RAISED BEFORE THE CIT(A) IN ASSESSMENT YEAR 2008 - 09 THAT IT WAS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE SAID ADDITIONAL PLEA RAISED BY THE ASSESSEE WAS CONSIDERED AT LENGTH AND AFTER CONSIDERING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND ADMITTING THE SAME UNDER RULE 46A OF THE RULES, THE CIT(A) HELD THE ASSESSEE TO BE ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. SIMILAR CLAIM HAS BEEN MADE BY THE ASSESSEE IN THE INSTANT ASSESSMENT YEAR RELATING TO ASSESSMENT YEAR 2009 - 10 AND WHERE THE FACTUAL ASPECTS AND ISSUE RAISED ARE IDENTICAL TO THE ISSUE IN ASSESSMENT YEAR 2008 - 09, FOLLOWING THE SAME PARITY OF REASONING AND ALSO BEC AUSE OF REASON THAT THE CIT(A) IN ALLOWING THE CLAIM OF DEDUCTION, HAD IN TURN RELIED ON THE ORDER OF CIT(A) RELATING TO ASSESSMENT YEAR 2008 - 09, WHICH HAS BEEN UPHELD BY THE TRIBUNAL IN ASSESSMENT YEAR 2008 - 09, WE ALLOW THE CLAIM OF ASSESSEE. UPHOLDING T HE ORDER OF CIT(A) IN THIS REGARD, WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 8 . THE HONBLE SUPREME COURT IN CIT VS. SARKAR BUILDERS (2015) 277 CTR 301 (SC) WAS ABREAST OF THE ISSUE OF RESTRICTION IMPOSED BY CLAUSE (D) TO SECTION 80IB(10) O F THE ACT IN RESPECT OF COMMERCIAL SPACE IN A HOUSING PROJECT. THE HONBLE SUPREME COURT OBSERVED THAT SECTION 80IB(10) OF THE ACT STIPULATES CERTAIN CONDITIONS WHICH ARE TO BE SATISFIED IN ORDER TO AVAIL THE BENEFIT OF SAID PROVISIONS. FURTHER, IT WAS H ELD THAT THE BENEFIT WAS AVAILABLE TO THOSE UNDERTAKINGS WHICH ARE DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY. THE SECTION WAS APPLICABLE IN RESPECT OF HOUSING PROJECTS BUT AT THE SAME TIME, CERTAIN COMMERCIAL ESTABLISHMENTS AN D SHOPS WERE HELD TO BE NEEDED EVEN IN THE HOUSING PROJECT. THE EXTENT OF COMMERCIAL ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 10 AREA WHICH COULD BE CONSTRUCTED EARLIER WAS AS PER LOCAL LAWS, UNDER WHICH THE LOCAL AUTHORITY GAVE THE SANCTIONS TO THE HOUSING PROJECTS. THE HONBLE SUPREME COURT THUS , FURTHER HELD THAT HOWEVER VIDE CLAUSE (D) WHICH WAS INSERTED AND MADE EFFECTIVE FROM 01.04.2005, IT WAS STIPULATED THAT THE BUILT UP AREA OF THE SHOPS AND COMMERCIAL ESTABLISHMENTS IN THE HOUSING PROJECTS WOULD NOT EXCEED 5% OF AGGREGATE BUILT UP AREA OF HOUSING PROJECT OR 2000 SQ.FT., WHICHEVER WAS LESS. THE HONBLE SUPREME COURT OBSERVED THAT ONE OF THE REQUIREMENT CONTAINED IN SUB - SECTION 10 THAT IN ORDER TO ENTITLED TO THE DEDUCTION UNDER SECTION, THE HOUSING PROJECT IS TO BE APPROVED BY LOCAL AUTHOR ITY, WHICH IN TURN, INCLUDE LOCAL AUTHORITIES GOVERNING THE CONSTRUCTION OF BUILDINGS, COMMERCIAL AS WELL AS RESIDENTIAL, IN EVERY STATE. THE HONBLE SUPREME COURT FURTHER OBSERVED THAT SUCH LOCAL AUTHORITIES WHILE SANCTIONING THE HOUSING PROJECTS ALSO PE RMITTED THE USE OF CERTAIN AREA IN THE HOUSING PROJECT IN SPECIFIED MANNER FOR SHOPPING AND COMMERCIAL PURPOSES AS WELL. IT WAS NOTED BY THE APEX COURT THAT THE HONBLE BOMBAY HIGH COURT IN CIT VS. BRAHMA ASSOCIATES (2011) 333 ITR 289 (BOM) HELD THAT SINC E THE EXPRESSION HOUSING PROJECT WAS NOT DEFINED UNDER THE ACT, THE INTENTION OF PARLIAMENT WAS THAT WHATEVER WAS APPROVED BY LOCAL AUTHORITY UNDER THE RULES AS A HOUSING PROJECT WOULD BE TREATED AS HOUSING PROJECT UNDER SECTION 80IB(10) OF THE ACT, SINC E THE SUB - SECTION (10) ITSELF MANDATES THAT HOUSING PROJECT IS TO BE APPROVED BY LOCAL AUTHORITY WHICH WAS A NECESSARY CONDITION FOR CLAIMING DEDUCTION UNDER THE SAID PROVISION. THE HONBLE SUPREME COURT FURTHER HELD WHEN THE LOCAL AUTHORITY HAS APPROVED A HOUSING PROJECT, WHETHER RESIDENTIAL OR RESIDENTIAL CUM COMMERCIAL, THE ASSESSEE IS ENTITLED TO THE DEDUCTION ON THE ENTIRE PROFITS INCLUDING THE COMMERCIAL ESTABLISHMENTS PORTION. THE ASSESSEE WOULD BE ENTITLED TO CLAIM 100% DEDUCTION EVEN ON THE AREA COVERED BY SHOPS AND COMMERCIAL ESTABLISHMENTS. THE NEXT PROPOSITION ADDRESSED BY THE ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 11 HONBLE SUPREME COURT WAS THAT AFTER INSERTION OF CLAUSE (D) TO SUB - SECTION (10) BY THE AMENDMENT WHICH WAS EFFECTIVE FROM 01.04.2005, WHERE EVEN IF THE LOCAL AUTHORIT Y HAD SANCTIONED A LARGER AREA FOR SHOPS AND COMMERCIAL ESTABLISHMENTS, THE BENEFIT OF SECTION 80IB(10) OF THE ACT WOULD NOT BE ADMISSIBLE TO THE ASSESSEES / DEVELOPERS, IN CASE THE AREA USED FOR SHOPS AND COMMERCIAL ESTABLISHMENTS EXCEEDED 5% OF AGGREGATE BUILT UP AREA OF HOUSING OR 2000 SQ.FT., WHICHEVER WAS LESS. THE HONBLE SUPREME COURT FURTHER HELD THAT THE AMENDMENT WAS PROSPECTIVE IN NATURE AND WOULD OPERATE FROM 01.04.2005. FOR THIS PROPOSITION, THE HONBLE SUPREME COURT FURTHER OBSERVED THAT PRI OR TO 01.04.2005, THE DEVELOPERS / ASSESSEES WHO GOT THEIR PROJECTS SANCTIONED FROM THE LOCAL AUTHORITIES AS HOUSING PROJECTS EVEN WITH COMMERCIAL USER, THOUGH LIMITED TO THE EXTENT PERMITTED UNDER THE DC RULES, WERE CONVINCED THAT THEY WOULD BE GETTING TH E BENEFIT OF 100% DEDUCTION OF THEIR INCOME FROM SUCH PROJECTS UNDER SECTION 80IB(10) OF THE ACT AND THEY STARTED THE PROJECTS ON SUCH BASIS. ONCE THEY ARRANGE THEIR AFFAIRS IN THIS MANNER, THE REVENUE CANNOT DENY THE BENEFIT OF THIS SECTION APPLYING THE PRINCIPLE OF RETROACTIVITY EVEN WHEN THE PROVISION HAS NO RETROSPECTIVITY. WITH THE AFORESAID PLANNING AS PER THE LAW PREVAILING PRIOR TO 01.04.2005, THESE ASSESSEES ACTED AND ACQUIRED VESTED RIGHT THEREBY WHICH COULD NOT BE TAKEN AWAY. IT IS LUDICROUS ON THE PART OF REVENUE AUTHORITIES TO EXPECT THE ASSESSEE TO DO SOMETHING WHICH IS ALMOST IMPOSSIBLE. 9 . THE HONBLE SUPREME COURT FURTHER REFERRED TO VARIOUS AMENDMENTS CARRIED OUT TO SUB - SECTION (10) TO SECTION 80IB OF THE ACT FROM TIME TO TIME AND NOTE D THE CHANGES BROUGHT IN TO SECTION 80IB(10) OF THE ACT AND ALSO NOTED THAT SIGNIFICANT AMENDMENT WAS CARRIED OUT BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 01.04.2005, SEVERAL NEW CONDITIONS WERE INCORPORATED FOR THE FIRST TIME ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 12 INCLUDING THE CONDITIONS MENTIO NED IN CLAUSE (D) WHICH WAS NOT ON THE STATUTE BOOK EARLIER WHEN THE PROJECTS WERE SANCTIONED. THE HONBLE SUPREME COURT FURTHER NOTED THAT ANOTHER IMPORTANT AMENDMENT BY THIS ACT TO SUB - SECTION (14) TO SECTION 80IB(10) OF THE ACT W.E.F. 01.04.2005 AND CL AUSE (A) WAS INSERTED IN SECTION 80IB(14) OF THE ACT DEFINING THE WORDS BUILT - UP AREA TO MEAN THE INNER MEASUREMENTS OF RESIDENTIAL UNITS AT THE FLOOR LEVEL. INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREASED BY THICKNESS OF WALLS, BUT DID NOT INCLUDE COMMON AREA SHARED WITH OTHER RESIDENTIAL UNITS. THE HONBLE SUPREME COURT FURTHER OBSERVED THAT IN ORDER TO AVAIL THE BENEFIT IN ASSESSMENT YEARS AFTER 01.04.2005 HOLDING THAT THE BALCONIES SHOULD BE REMOVED THOUGH THESE WERE PERMITTED EARLIER WOULD LEA D TO ABSURD RESULTS AS ONE CANNOT EXPECT AN ASSESSEE TO COMPLY WITH A CONDITION WHICH WAS NOT PART OF STATUTE WHEN HOUSING PROJECT WAS APPROVED. THE HONBLE SUPREME COURT THUS, HELD THAT THE ONLY WAY TO RESOLVE THE ISSUE WOULD BE TO HOLD THAT CLAUSE (D) I S TO BE TREATED AS INEXTRICABLY LINKED WITH THE APPROVAL AND CONSTRUCTION OF HOUSING PROJECT AND THE ASSESSEE CANNOT BE CALLED UPON TO COMPLY WITH THE SAID CONDITIONS WHEN IT WAS NOT IN CONTEMPLATION EITHER BY THE ASSESSEE OR EVEN THE LEGISLATURE, WHEN THE HOUSING PROJECT WAS APPROVED BY LOCAL AUTHORITY, HENCE THE SAID AMENDMENT COULD NOT BE APPLIED TO THOSE PROJECTS WHICH WERE SANCTIONED AND COMMENCED PRIOR TO 01.04.2005 AND COMPLETED BY THE STIPULATED DATE, THOUGH SUCH STIPULATED DATE IS AFTER 01.04.2005. 10. THE HONBLE SUPREME COURT IN CIT VS. M/S. VEENA DEVELOPERS IN SLP(C) NO.24329/2011 ALONG WITH BUNCH OF APPEALS INCLUDING THE APPEAL AGAINST ORDER OF HONBLE BOMBAY HIGH COURT IN CIT VS. BRAHMA ASSOCIATES (SUPRA), DELIBERATED UPON THE AFORESAID ISSUE OF GRANT OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT I.E. PROVISIONS WHICH STOOD PRIOR TO 01.04.2005. THE ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 13 ISSUE BEFORE THE HONBLE APEX COURT WAS WHETHER WITHIN HOUSING PROJECT, IF SOME COMMERCIAL ACTIVITY WAS ALSO UNDERTAKEN, WHETHER SUCH PROJECTS WER E ELIGIBLE FOR CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE HONBLE APEX COURT HELD THAT WHERE SECTION 80IB(10) OF THE ACT VERY CATEGORICALLY MENTIONED SUCH PROJECT WHICH IS UNDERTAKEN AS HOUSING PROJECT IS APPROVED BY LOCAL AUTHORITY AND ONC E THE PROJECT IS APPROVED BY LOCAL AUTHORITY, IT IS TO BE TREATED AS HOUSING PROJECT. THE HONBLE SUPREME COURT FURTHER CLARIFIED THAT HOUSING PROJECT SHOULD BE AS PER DEVELOPMENT CONTROL REGULATIONS. THE HONBLE SUPREME COURT ALSO NOTED ANOTHER ASPECT O F THE ISSUE THAT WHERE THE PROJECT WAS CLEARED AS RESIDENTIAL PLUS COMMERCIAL PROJECT, THE HONBLE APEX COURT HELD THAT THE COMMERCIAL USER WHICH IS PERMITTED ALONG WITH THE RESIDENTIAL UNITS AND THAT TOO AS PER DCR AND THE SAME IS SAID TO BE PROJECT AS PR EDOMINANTLY HOUSING / RESIDENTIAL PROJECT AND IS ENTITLED TO THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. FURTHER, UPHELD THE ORDER OF HONBLE HIGH COURT THAT FOR THE PROJECTS UP TO 31.03.2005, THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WOULD BE ALLOWABLE WHERE THE PROJECTS ARE APPROVED BY LOCAL AUTHORITY HAVING RESIDENTIAL BUILDINGS WITH COMMERCIAL USER AND NOT RESTRICTED TO 10% OF TOTAL BUILT UP AREA OF THE PLOT. IT ALSO APPROVED THE ORDER OF HONBLE HIGH COURT THAT DEDUCTION UNDER SECTION 80IB( 10) OF THE ACT WAS TO BE ALLOWED TO THE PROJECT AS A WHOLE AND THERE WAS NO JUSTIFICATION IN RESTRICTING THE SAID DEDUCTION ONLY TO PART OF PROJECT. FURTHER, IT WAS HELD THAT CLAUSE (D) INSERTED W.E.F. 01.04.2005 WAS PROSPECTIVE AND NOT RETROSPECTIVE AND HENCE, COULD NOT BE APPLIED FOR PROJECTS PRIOR TO 01.04.2005. 11 . IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT AND THE ISSUE BEING IDENTICAL TO THE ISSUE RAISED IN ASSESSEES OWN CASE IN EARLIER YEARS, WE UPHOLD THE ORDER OF CIT(A) IN ALLOW ING THE CLAIM OF DEDUCTION UNDER ITA NO. 450 /P U N/20 1 5 AMIT ENTERPRISES HOUSING LTD. 14 SECTION 80IB(10) OF THE ACT IN RESPECT OF PROJECT TREASUR E PARK. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS, DISMISSED. 1 2 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 17 TH DAY OF MAY , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 17 TH MAY , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I, PUNE ; 4. / THE CIT - I, PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE