ITO, Ward-11(2), Hyderabad, Hyderabad V. M/s Nagarjuna Homes, R.R.Dist

ITA 54/HYD/2015

• Counselvise Citation: 5422514 RSA 2015
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 12-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Keywords: Competent authority
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 54/HYD/2015 ASSESSMENT YEAR: 2010-11 INCOME TAX OFFICER, WARD 11(2), HYDRERABAD VS. NAGARJUNA HOMES, R.R. DISTRICT. PAN AACFN 5803C (APPELLANT) (RESPONDENT) REVENUE BY : SHRI RAMAKRISHNA BANDI ASSESSEE BY : SHRI K.C. DEVDAS DATE OF HEARING : 26-08-2015 DATE OF PRONOUNCEMENT : 04 -09 -2015 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 15/09/2014 OF LD. CIT(A) VI, HYDERABAD FOR THE AY 2010-11. 2. THE ONLY ISSUE ARISING FOR CONSIDERATION FROM TH E GROUNDS RAISED BY THE DEPARTMENT IS IN RELATION TO THE DECISION OF LD. CIT(A) IN ACCEPTING ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10 ). 3. BRIEFLY THE FACTS ARE, ASSESSEE A PARTNERSHIP FI RM IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF HOUSING PROJECTS. FO R THE AY UNDER CONSIDERATION, ASSESSEE FILED ITS RETURN OF INCOME ON 15/10/2010 DECLARING TOTAL INCOME OF RS. 95,57,950 AFTER CLAIM ING DEDUCTION U/S 80IB(10) FOR AN AMOUNT OF RS. 9,16,96,622. IN COUR SE OF ASSESSMENT PROCEEDING, AO WHEN CALLED UPON ASSESSEE TO JUSTIFY THE CLAIM OF DEDUCTION U/S 80IB(10), ASSESSEE FURNISHED THE DETA ILS OF THE HOUSING PROJECT DEVELOPED BY HIM. FROM THE DETAILS SUBMITTE D, AO NOTICED THAT 2 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. ASSESSEE WAS DEVELOPING A HOUSING PROJECT ON A PIEC E OF LAND ADMEASURING 7.39 ACRES AT KOMPALLI, QUTUBULLAPUR MA NDAL, R.R. DIST. OUT OF THE TOTAL LAND, 5.8 ACES IS OWNED BY ASSESSE E AND BALANCE 2.31 ACRES ARE OWNED BY PARTNERS. HE FURTHER NOTICE D THAT HUDA HAS GIVEN A TECHNICAL PERMISSION ON 07/05/01 FOR CONSTR UCTION OF SIX BLOCKS IN THE HOUSING PROJECT. HE FURTHER NOTICED T HAT LOCAL AUTHORITY I.E. GRAM PANCHAYAT, KOMPALLI HAS ACCORDED PERMISSI ON FOR CONSTRUCTION ON 10/05/01 FOR TWO BLOCKS NAMED AS D AFFODILS AND LOTUS ON AN AREA OF 1.2 ACRES. AS FAR AS THE BALA NCE FOUR BLOCKS NAMED AS PRIME ROSE, LILLY, MORNING GLORY AND JASMINE AND CLUB HOUSE ARE CONCERNED, PERMISSION WAS GRANTED BY HUDA ON 20/01/2006 AND THESE FOUR BLOCKS WERE CONSTRUCTED O N LAND ADMEASURING 3.28 ACRES. AO REFERRING TO THE PROVISI ONS OF SECTION 80IB(10) OBSERVED, A HOUSING PROJECT APPROVED BEFOR E 01/04/04, HAS TO BE COMPLETED ON OR BEFORE 31/03/08, FOR CLAIMING DEDUCTION U/S 80IB(10). WHEREAS, FOUR BLOCKS FOR WHICH ASSESSEE H AS CLAIMED DEDUCTION U/S 80IB(10) WERE NOT COMPLETED WITHIN TH E STIPULATED PERIOD. WHEN THIS WAS BROUGHT TO THE NOTICE OF ASSE SSEE, HE SUBMITTED THAT PERMISSION FOR CONSTRUCTION OF THE F OUR BLOCKS WAS GRANTED BY HUDA ON 20/01/06 AND CONSTRUCTION OF THE SE FOUR BLOCKS WERE COMPLETED IN THE FY 2009-10 RELATING TO AY 201 0-11, THEREFORE, ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION U/S 80I B(10). AO, HOWEVER, OBSERVED THAT AS PER THE DETAILS SUBMITTED BY ASSES SEE, THE ENTIRE HOUSING PROJECT ON 7.39 ACRES OF LAND WAS APPROVED BY HUDA ON 07/05/01 FOR CONSTRUCTION OF SIX BLOCKS. THUS, APPR OVAL OBTAINED FOR CONSTRUCTION OF FOUR BLOCKS UNDER CONSIDERATION SUB SEQUENTLY, MERGES WITH THE APPROVAL OBTAINED FROM HUDA ON 07/05/01 AN D ALSO THE LOCAL AUTHORITY I.E. GRAMPANCHAYAT, KOMPALLI ON 10/05/01, SINCE, THE ORIGINAL PERMISSION GRANTED WAS FOR THE ENTIRE PROJ ECT OF SIX BLOCKS ON THE TOTAL LAND. HE OBSERVED, THOUGH, APARTMENTS ARE CONSTRUCTED IN DIFFERENT BLOCKS BUT THE AMENITIES DEVELOPED ARE CO MMON TO ALL THE BLOCKS. ALL THE BLOCKS HAVE COMMON ENTRANCE AND DO NOT HAVE ANY OTHER WAY TO ANY OF THE BLOCKS. LAND IS NOT DEMARCA TED AMONG THE 3 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. BLOCKS AND THE CLUB FOR WHICH PERMISSION WAS OBTAIN ED IS COMMON EVEN TO THE BLOCKS WHICH WERE COMPLETED MUCH EARLIE R. THEREFORE, NONE OF THE BLOCKS HAVE SEPARATE ENTRANCE AND THE E NTIRE PROJECT HAS TO BE SEEN AS A SINGLE UNIT. AO OBSERVED THAT CONST RUCTION OF FOUR BLOCKS FOR WHICH ASSESSEE IS CLAIMING DEDUCTION U/S 80IB(10) WAS STARTED IN THE YEAR 2005-06 AND COMPLETED BEYOND TH E PRESCRIBED PERIOD. AO OPINED THAT APPROVAL GRANTED BY HUDA ON 07/05/01 AND ON 20/01/06 ARE FOR THE SAME PROJECT. REFERRING TO THE PROVISIONS OF SECTION 80IB(10), AO OBSERVED THAT IN A CASE WHERE THE APPROVAL IS OBTAINED MORE THAN ONCE SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH BUILDING PL AN OF SUCH PROJECT IS APPROVED BY THE LOCAL AUTHORITY FOR THE FIRST TIME. SINCE, ACCORDING TO AO, FIRST APPROVAL BY LOCAL AUTHORITY WAS ON 07/05/01 THAT SHOULD BE TAKEN AS THE DATE OF APPROVAL FOR THE HOU SING PROJECT. ON THE AFORESAID PREMISES, AO OBSERVED THAT SINCE FOUR BLOCKS ON WHICH ASSESSEE IS CLAIMING DEDUCTION U/S 80IB(10) WERE NO T COMPLETED PRIOR TO 31/03/08, ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10). 3.1 FURTHER, AO OBSERVED THAT, THOUGH, AS PER THE P ROVISIONS OF SECTION 80IB(10), ONE OF THE CONDITIONS FOR AVAILIN G EXEMPTION IS, NONE OF THE RESIDENTIAL UNITS (FLATS) SHOULD EXCEED THE AREA OF 1500 SQ.FT., BUT, ASSESSEE HAS DEVIATED FROM THE APPROVED PLAN B Y CONVERTING SOME OF THE FLATS TO LARGER RESIDENTIAL UNITS THER EBY EXCEEDING THE PRESCRIBED LIMIT OF 1500 SQ.FT. HE, THEREFORE, HELD THAT ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 80IB(10). THOUGH, ASSESS EE SUBMITTED 91% OF THE RESIDENTIAL UNITS ARE HAVING PLINTH AREA LES S THAN 1500 SQ.FT. AND ONLY 9% OF THE RESIDENTIAL UNITS ARE HAVING BUI LT UP AREA OF MORE THAN 1500 SQ.FT., WHICH ASSESSEE HIMSELF HAS DISALL OWED WHILE CLAIMING DEDUCTION U/S 80IB(10), BUT, AO REJECTED ASSESSEES EXPLANATION BY HOLDING THAT EVEN IF ONE RESIDENTIAL UNIT EXCEEDS THE PRESCRIBED LIMIT OF 1500 SQ.FT., ASSESSEE WILL NOT BE ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80IB(10). ACCORDINGLY, AO COMPLETE D THE ASSESSMENT BY REJECTING ASSESSEES CLAIM OF DEDUCTION U/S 80IB (10). BEING 4 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED, ASSESS EE PREFERRED APPEAL BEFORE LD. CIT(A). 4. REITERATING THE STAND TAKEN BEFORE AO, IT WAS SU BMITTED BY ASSESSEE BEFORE LD. CIT(A) THAT THE APPROVAL FOR TH E FOUR BLOCKS IN RESPECT OF WHICH ASSESSEE HAS CLAIMED DEDUCTION U/S 80IB(10) WAS GRANTED BY HUDA ON 20/01/06 AND BUILDING PLAN WAS A PPROVED BY GRAMPANCHAYAT, KOMPALLI ON 06/02/06. SINCE ASSESSEE HAS COMPLETED THE PROJECT WITHIN THE STIPULATED PERIOD OF FIVE YEARS FROM THE DATE OF APPROVAL ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S 80IB(10). AS FAR AS ALLEGATION OF AO THAT ASSESSEE HAS VIOLATED THE CONDITION OF BUILT UP AREA OF LESS THAN 1500 SQ.FT. FOR EACH RESIDENTIAL UNIT, IT WAS SUBMITTED BY ASSESSEE THAT DEDUCTION U /S 80IB(10) CAN BE PROPORTIONATELY RESTRICTED TO RESIDENTIAL UNITS WHI CH ARE HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT. 5. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD FOUND THAT FIRST APPROVAL GRANTED BY LOCAL AUTHORITY I.E. GRAMPANCHAYAT, KOMP ALLI ON 10/05/01 IS IN RESPECT OF TWO BLOCKS, NAMELY, LOTUS AND DAF FODILS- WHOSE PROFITS WERE ALLOWED AS DEDUCTION U/S 80IB(10) IN T HE PRECEDING AY. AS FAR AS OTHER FOUR BLOCKS ARE CONCERNED, THE APPR OVAL WAS GRANTED BY HUDA AGAIN ON 20/01/06 AND WAS ENDORSED BY GRAMP ANCHAYAT ON 06/02/06. HE FURTHER FOUND THAT DEVELOPMENT FEES IN RESPECT OF FOUR BLOCKS WAS PAID SEPARATELY BY ASSESSEE ON 06/02/06. LD. CIT(A) OPINED THAT APPROVAL CANNOT BE TREATED AS PERMISSIO N FOR CONSTRUCTION UNLESS DEVELOPMENT FEES IS PAID, WHICH CONSTITUTES, ONE OF THE MAIN INGREDIENT FOR THE FINAL APPROVAL BY THE COMPETENT AUTHORITY, WHICH IN THE PRESENT CASE, IS GRAMPANCHAYAT OF KOMPALLI. THE REFORE, WHEN GRAMPANCHAYAT HAS GRANTED APPROVAL ON 06/02/06 ON P AYMENT OF DEVELOPMENT FEES, THAT SHOULD BE TAKEN AS DATE OF A PPROVAL FOR THE FOUR BLOCKS, HENCE, AOS CONCLUSION THAT PROJECT WA S NOT COMPLETED WITHIN THE STIPULATED PERIOD OF 80IB(10)(A) IS NOT ACCEPTABLE. ACCORDINGLY, HE HELD THAT AOS FINDING CANNOT BE AC CEPTED. AS FAR AS 5 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. ALLEGATION OF AO THAT ASSESSEE IS NOT ELIGIBLE TO C LAIM DEDUCTION U/S 80IB(10) AS INDIVIDUAL RESIDENTIAL UNITS HAVE EXCEE DED BUILT UP AREA OF 1500 SQ.FT., LD. CIT(A) OBSERVED, ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF RESIDENTIAL UNITS WHICH COMPLY TO THE CO NDITIONS IMPOSED U/S 80IB(10) CANNOT BE DENIED. ACCORDINGLY, HE OBSE RVED THAT DISALLOWANCE OF DEDUCTION U/S 80IB(10) HAS TO BE RE STRICTED TO ONLY 9% OF THE TOTAL CONSTRUCTED AREA WHICH DID NOT COMPLY TO THE CONDITIONS IMPOSED U/S 80IB(10). ACCORDINGLY, LD. CIT(A) IN PR INCIPLE ACCEPTED ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10). BEING A GGRIEVED, DEPARTMENT IS BEFORE US. 6. LD. DR STRONGLY RELYING UPON THE REASONING OF A O SUBMITTED BEFORE US, ASSESSEES HOUSING PROJECT APPROVED BY H UDA IS AN INTEGRATED HOUSING PROJECT CONSISTING OF SIX BLOCKS . HE SUBMITTED, AS THE APPROVAL BY HUDA FOR THE ENTIRE HOUSING PROJECT WAS GRANTED ON 07/05/2001 AND THE APPROVAL OF THE LOCAL AUTHORITY I.E. KOMPALLI GRAMPANCHAYAT WAS ON 10/05/2001, THEREFORE, FOR CLA IMING DEDUCTION U/S 80IB(10)(A), ASSESSEE SHOULD HAVE COMPLETED THE PROJECT ON OR BEFORE 31/03/08. SINCE ASSESSEE DID NOT COMPLETE FO UR BLOCKS ON WHICH DEDUCTION U/S 80IB(10) WAS CLAIMED BY ASSESSE E FOR THE IMPUGNED AY, IT IS NOT ELIGIBLE FOR DEDUCTION. LD. DR REFERRING TO EXPLANATION (I) TO SECTION 80IB(10) SUBMITTED, IN A CASE WHERE ASSESSEE OBTAINS APPROVAL FOR THE SAME HOUSING PROJ ECT ON MORE THAN ONE OCCASION, THE FIRST OF SUCH APPROVAL SHALL BE T AKEN AS THE DATE OF APPROVAL FOR COMPUTING THE PERIOD OF COMPLETION. LD . DR SUBMITTED, IN THE LIGHT OF EXPLANATION TO SECTION 80IB(10) SINCE THE APPROVAL FROM HUDA FOR THE ENTIRE INTEGRATED HOUSING PROJECT WAS GRANTED ON 07/05/01, ASSESSEE SHOULD HAVE COMPLETED THE ENTIRE HOUSING PROJECT ON OR BEFORE 31/03/08. SINCE ASSESSEE DID NOT COMPL ETE THE ENTIRE HOUSING PROJECT WITHIN THE STIPULATED PERIOD, IT IS NOT ELIGIBLE FOR DEDUCTION. LD. DR SUBMITTED, EVEN OTHERWISE ALSO, A SSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 80IB(10) SINCE ONE MORE CONDITION HAS BEEN VIOLATED BY ASSESSEE. HE SUBMITTED THAT AS ALL THE RESIDENTIAL 6 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. UNITS IN THE HOUSING PROJECT ARE NOT HAVING BUILT U P AREA OF LESS THAN 1500 SQ.FT., ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDU CTION. AS FAR AS CLAIM OF ASSESSEE THAT REVISED APPROVAL FROM HUDA A ND LOCAL AUTHORITY IN RESPECT OF THE FOUR BLOCKS WERE GIVEN IN FEBRUARY, 2006, LD. DR SUBMITTED, SUCH REVISED APPROVAL CANNOT BE T AKEN INTO CONSIDERATION IN VIEW OF THE EXPLANATION TO SECTION 80IB(10). FURTHER, HE SUBMITTED, REVISED APPROVAL GRANTED BY HUDA AND LOCAL AUTHORITY WERE NEVER BROUGHT TO THE NOTICE OF AO. HE, THEREFO RE, SUBMITTED, SINCE ASSESSEE HAS NOT FULFILLED THE CONDITIONS OF SECTION 80IB(10), AO WAS JUSTIFIED IN REJECTING ASSESSEES CLAIM OF D EDUCTION U/S 80IB(10). 7. LD. AR, ON THE OTHER HAND, RELYING UPON THE ORDE R OF LD. CIT(A), SUBMITTED, AO WAS NOT JUSTIFIED IN DENYING ASSESSEE S CLAIM OF DEDUCTION IN RESPECT OF FOUR BLOCKS IN RESPECT OF W HICH APPROVAL WAS GRANTED BY LOCAL AUTHORITY IN FEBRUARY, 2006. IT WA S SUBMITTED, AS FAR AS FIRST TWO BLOCKS, NAMELY, DAFFODILS AND LOTUS A RE CONCERNED, LOCAL AUTHORITY GRANTED ITS APPROVAL IN 2001 AND ASSESSEE HAS AVAILED DEDUCTION U/S 80IB(10) OF THE ACT BY VIRTUE OF THE ORDER PASSED BY ITAT IN ITA NO. 722/HYD/2009 AND ITA NO. 822/HYD/20 09 DATED 30/09/2010. LD. AR REFERRING TO THE SAID ORDER SUBM ITTED BEFORE US, SINCE THE INITIAL APPROVAL GRANTED BY LOCAL AUTHORI TY IS ONLY FOR TWO BLOCKS, IT CANNOT BE SAID BY THE DEPARTMENT THAT TH E SAME WILL ALSO COVER THE OTHER FOUR BLOCKS, BUILDING PLAN OF WHICH WAS APPROVED BY LOCAL AUTHORITY ONLY IN FEBRUARY06. HE SUBMITTED, IN TERMS WITH THE PROVISIONS OF SECTION 80IB(10)(A), SINCE THE APPROV AL FOR OTHER FOUR BLOCKS WAS GRANTED BY LOCAL AUTHORITY I.E. KOMPALLY GRAMPANCHAYAT IN FEBRUARY06 AND ASSESSEE HAS COMPLETED THE HOUSING PROJECT WITHIN FIVE YEARS AS STIPULATED UNDER 80IB(10)(III), IT IS ELIGIBLE TO CLAIM DEDUCTION U/S 80IB(10). LD. AR SUBMITTED, ARGUMENT OF THE DEPARTMENT THAT FIRST APPROVAL GRANTED BY HUDA ON 0 7/05/01 SHOULD BE TAKEN AS DATE OF APPROVAL IS TOTALLY UNACCEPTABL E AS IT IS NOT THE 7 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. APPROVAL OF THE LOCAL AUTHORITY AS ENVISAGED U/S 80 IB(10). IN SUPPORT OF HIS CONTENTION, LD. AR RELIED UPON THE FOLLOWING DECISIONS: 1. CIT VS. ARUN EXCELLO FOUNDATIONS (P) LTD., 259 CTR 362 (MAD.) 2. CIT VS. VANDANA PROPERITES, [2012] 353 ITR 36 ( BOM.) 3. CIT VS. M/S VOORA PROPERTY DEVELOPERS PVT. LTD. , 373 ITR 317 (MAD.) AS FAR AS THE SECOND ALLEGATION OF AO THAT SOME OF THE RESIDENTIAL UNITS EXCEEDED PRESCRIBED BUILT UP AREA OF 1500 SQ. FT., LD. AR SUBMITTED, ASSESSEE CANNOT BE DENIED DEDUCTION U/S 80IB(10) FOR THE ENTIRE HOUSING PROJECT ONLY BECAUSE SOME OF THE UNI TS HAVE EXCEEDED THE PRESCRIBED BUILT UP AREA. HE SUBMITTED, ASSESSE E HIMSELF HAS DISALLOWED THE DEDUCTION PROPORTIONATELY IN RESPECT OF RESIDENTIAL UNITS, WHICH EXCEEDED BUILT UP AREA OF 1500 SQ.FT., WHICH CONSTITUTE APPROXIMATELY 9% OF THE TOTAL HOUSING PROJECT. HE, THEREFORE, SUBMITTED, THERE IS NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE ORDE RS OF REVENUE AUTHORITIES. WE HAVE ALSO APPLIED OUR MIND TO THE D ECISIONS RELIED UPON BY LD. AR. AS IS EVIDENT FROM RECORD, AO HAS R EJECTED ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) FOR THE FOLLOWING REASONS: 1. THE HOUSING PROJECT HAS NOT BEEN COMPLETED ON O R BEFORE 31/03/08. 2. SOME OF THE RESIDENTIAL UNITS HAVE EXCEEDED THE PRESCRIBED BUILT UP AREA OF 1500 SQ.FT. 8.1 BEFORE DECIDING THE ISSUE WHETHER THE AFORESAID CONCLUSION DRAWN BY AO ARE VALID OR NOT, IT IS VERY MUCH NECES SARY TO BEAR IN MIND CERTAIN IMPORTANT FACTUAL ASPECTS. IT IS NOT I N DISPUTE THAT THE HOUSING PROJECT CONCEIVED BY ASSESSEE STANDS ON AN AREA OF 7.9 ACRES CONSISTING OF SIX BLOCKS AND CLUB HOUSE. THE APPROVAL FOR THE 8 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. HOUSING PROJECT WAS GRANTED BY HUDA ON 07/05/01. AS IT APPEARS FROM RECORD, THE LOCAL AUTHORITY I.E. KOMPALLY GRAM PANCHAYAT GRANTED APPROVAL FOR CONSTRUCTION INITIALLY FOR TWO BLOCKS, NAMED, AS DAFFODILS AND LOTUS ON 10/05/01. IT IS FURTHER EVIDENT FROM R ECORD THAT AS FAR AS THE AFORESAID TWO BLOCKS ARE CONCERNED, ASSESSEE HA S BEEN ALLOWED DEDUCTION U/S 80IB(10) OF THE ACT. AS FAR AS REMAIN ING FOUR BLOCKS, NAMED AS, PRIME ROSE, LILLY, JASMINE AND MORNING GL ORY ARE CONCERNED, ASSESSEE OBTAINED REVISED APPROVAL FROM HUDA ON 20/01/06 AND THE LOCAL AUTHORITY I.E. KOMPALLI GRAM PANCHAYAT GRANTED NECESSARY APPROVAL FOR CONSTRUCTION OF THE AFORESAI D FOUR BLOCKS ON 06/02/06. IT IS THE CASE OF ASSESSEE THAT SINCE APP ROVAL FROM LOCAL AUTHORITY FOR FOUR BLOCKS WAS GRANTED ON 06/02/06, ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10), AS THE PROJECT WAS COMP LETED WITHIN THE STIPULATED PERIOD OF 5 YEARS FROM THE END OF FY IN WHICH HOUSING PROJECT WAS APPROVED BY LOCAL AUTHORITY. WHEREAS, I T IS THE CONTENTION OF THE DEPARTMENT THAT SINCE THE ENTIRE HOUSING PRO JECT IS AN INTEGRATED PROJECT AND INITIAL APPROVAL BY HUDA WAS GRANTED ON 07/05/01 I.E. PRIOR TO 01/04/2004, ASSESSEE SHOULD HAVE COMPLETED THE PROJECT BY 31/03/08 FOR AVAILING DEDUCTION U/S 80IB(10). 8.2 IN VIEW OF THE AFORESAID SUBMISSIONS OF THE PAR TIES, IT IS NECESSARY TO LOOK INTO THE PROVISIONS CONTAINED U/S 80IB(10) AT THIS STAGE. ON PLAIN READING OF THE SAID PROVISION, IT B ECOMES CLEAR THAT ASSESSEE SHALL BE ELIGIBLE TO CLAIM DEDUCTION OF 10 0% OF THE PROFIT DERIVED FROM A HOUSING PROJECT SUBJECT TO THE CONDI TIONS LAID DOWN THEREIN. AS PER THE FIRST CONDITION AS PROVIDED IN CLAUSE (A)(I) IN A CASE WHERE HOUSING PROJECT HAS BEEN APPROVED BY LOC AL AUTHORITY BEFORE FIRST APRIL, 2004, THE PROJECT HAS TO BE COM PLETED ON OR BEFORE 31/03/08. IN THE PRESENT CASE, THERE IS NO DISPUTE THAT APPROVAL OF THE LOCAL AUTHORITY I.E KOMPALLI GRAMPANCHAYAT GRANTED ON 10/05/01 WAS ONLY FOR TWO BLOCKS NAMELY, DAFFODILS AND LOTUS . AS FAR AS THE OTHER FOUR BLOCKS ARE CONCERNED, APPROVAL WAS GRANTED BY LOCAL AUTHORITY ONLY ON 06/02/06. THEREFORE, AS PER THE PROVISIONS CONTAINED U/S 9 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. 80IB(10)(A)(III) FOR A HOUSING PROJECT APPROVED BY LOCAL AUTHORITY AFTER 01/04/05, THE PROJECT HAS TO BE COMPLETED WITHIN 5 YEARS FOR CLAIMING DEDUCTION U/S 80IB(10). SINCE, IN THE PRESENT CASE, APPROVAL BY THE LOCAL AUTHORITY FOR THE FOUR BLOCKS I.E. PRIME ROSE , LILLY, JASMINE AND MORNING GLORY WAS GRANTED ON 06/02/06, THE DEPARTME NTS ARGUMENT THAT ASSESSEE SHOULD HAVE COMPLETED THE PROJECT ON OR BEFORE 31/03/08 CANNOT BE ACCEPTED. EVEN THE EXPLANATION T O SECTION 80IB(10), ON WHICH LD. DR HAS PUT MUCH STRESS, WOUL D INDICATE THAT THE DATE ON WHICH LOCAL AUTHORITY HAS GRANTED ITS A PPROVAL FOR BUILDING PLAN IS TO BE TAKEN AS DATE ON WHICH HOUSING PROJEC T IS APPROVED. THAT BEING THE CASE, SINCE APPROVAL BY LOCAL AUTHORITY F OR THE FOUR BLOCKS WAS GRANTED ONLY ON 06/02/06 THAT SHOULD BE TAKEN A S THE DATE OF APPROVAL FOR THE PURPOSE OF GRANTING DEDUCTION U/S 80IB(10). AS FAR AS THE ARGUMENT OF LD. DR THAT ENTIRE HOUSING PROJECT IS AN INTEGRATED ONE CONSISTING OF SIX BLOCKS, IT IS TO BE OBSERVED THAT THE TERM HOUSING PROJECT HAS NOT BEEN DEFINED U/S 80IB(10) OF THE ACT. AS HELD BY THE HONBLE BOMBAY HIGH COURT IN CASE OF CI T VS. VANDANA PROPERTIES, 353 ITR 36, SINCE THE TERM HOUSING PRO JECT HAS NOT BEEN DEFINED UNDER SECTION 80IB(10), MEANING AS PER COM MON PARLANCE HAS TO BE TAKEN. THE HONBLE HIGH COURT OBSERVED TH AT THE EXPRESSION HOUSING PROJECT IN COMMON PARLANCE WOULD MEAN CON STRUCTING A BUILDING OR GROUP OF BUILDINGS CONSISTING OF SEVERA L UNITS. REFERRING TO EXPLANATION U/S 80IB(10), THE HONBLE COURT OBSERVE D, THE LANGUAGE USED IN THE EXPLANATION TO THE EFFECT THAT APPROVAL GRANTED TO A BUILDING PLAN WOULD SUGGEST THAT HOUSING PROJECT W OULD MEAN A BUILDING CONSISTING OF SEVERAL UNITS. THUS, THE HON BLE COURT ULTIMATELY HELD THAT CONSTRUCTION OF A BUILDING WITH SEVERAL RESIDENTIAL UNITS HAVING PRESCRIBED BUILT UP AREA WOULD CONSTITUTE A HOUSING PROJECT U/S 80IB(10). IN VIEW OF THE AFORESAID, AS APPROVAL BY LOCAL AUTHORITY FOR THE FOUR BLOCKS, NAMELY, PRIME ROSE, LILLY, JA SMINE AND MORNING GLORY WAS GRANTED BY LOCAL AUTHORITY ON 06/02/06, A SSESSEE, IN OUR OPINION, WOULD BE ELIGIBLE TO AVAIL DEDUCTION U/S 8 0IB(10) SINCE THESE FOUR BLOCKS WERE COMPLETED WITHIN THE STIPULATED PE RIOD OF FIVE YEARS. 10 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. AS FAR AS THE SECOND ALLEGATION OF AO THAT FEW OF T HE RESIDENTIAL UNIT IN THE HOUSING PROJECT EXCEEDED THE PRESCRIBED LIMI T OF 1550 SQ.FT., IT IS TO BE NOTED THAT ASSESSEE BEFORE AO ITSELF HAS S TATED THAT THE TOTAL NUMBER OF UNITS WHICH EXCEEDED PRESCRIBED BUILT UP AREA LIMIT OF 1500 SQ.FT. CONSTITUTE 9% OF THE TOTAL HOUSING PROJECT. IT WAS FURTHER BROUGHT TO THE NOTICE OF AO, ASSESSEE ITSELF HAS NOT CLAIM ED DEDUCTION U/S 80IB(10) IN RESPECT OF THOSE UNITS. IN OUR VIEW, LD . CIT(A) WAS JUSTIFIED IN ALLOWING ASSESSEES CLAIM OF DEDUCTION U/S 80IB( 10) IN RESPECT OF THE RESIDENTIAL UNITS COMPRISING HOUSING PROJECT, W HICH ADHERED TO CONDITIONS OF SECTION 80IB(10). SINCE THE PROVISION CONTAINED U/S 80IB(10) IS A BENEFICIAL PROVISION, A LIBERAL APPRO ACH HAS TO BE TAKEN AS A LITERAL INTERPRETATION WOULD LEAD TO A SITUATI ON WHERE THE VERY INTENTION OF BRINGING SUCH PROVISION WOULD BE DEFEA TED. IN FACT, THE COORDINATE BENCH WHILE CONSIDERING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR AY 2005-06 IN ITA NOS. 722 & 822/HYD/09 DA TED 30-09-10 HELD AS UNDER: 6. REVENUE HAS TAKEN ONE MORE GROUND WITH REGARD TO AREA OF EACH HOUSING UNIT CONSTRUCTED BY THE ASSESSEE. WE HAVE HEARD THE LD. DR AND THE LD. AR. ADMITTEDLY, ALL T HE RESIDENTIAL UNITS CONSTRUCTED BY THE ASSESSEE ARE BELOW 1500 S Q.FT. EACH. IT IS NOT BROUGHT ON RECORD THAT ASSESSEE HAS CONSTRU CTED ANY OF THE UNITS WHICH EXCEEDED 1500 SQ.FT. EVEN IF THE A SSESSEE CONSTRUCTED ANY OF THE UNITS WHICH EXCEEDED 1500 S Q.FT., IN OUR CONSIDERED OPINION, THE ASSESSEE IS ELIGIBLE FOR D EDUCTION IN RESPECT OF ALL THE UNITS OF THE RESIDENTIAL BLOCK, WHICH ARE LESS THAN 1500 SQ.FT. EACH EXCLUDING THE UNIT WHICH EXC EEDED 1500 SQ.FT. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ASPECT. ACCORDINGLY, THE SAME IS CO NFIRMED AND THIS GROUND OF THE REVENUE IS REJECTED. 8.3 THE HONBLE MADRAS HIGH COURT IN CASE OF CIT VS . ARUN EXCELLO FOUNDATION (P) LTD. (SUPRA) EXPRESSING SIMILAR VIEW HELD, IN A CASE WHERE SOME OF THE UNITS EXCEED THE PRESCRIBED BUILT UP AREA OF 1500 SFT., ASSESSEE WOULD NOT BE ENTITLED TO HAVE BENEFI T 100% DEDUCTION U/S 80IB(10) OF THE ACT FOR ENTIRE PROJECT, BUT WOU LD BE ENTITLED TO PRORATE DEDUCTION ON THE UNITS SATISFYING THE CONDI TIONS UNDER CLAUSE (C). 11 ITA NO. 54 /HYD/2015 NAGARJUNA HOMES, RR DT. 8.4 IN THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT LD. CIT(A) WAS JUSTIFIED IN ALLOWING ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10). ACCORDINGLY, WE UPHOLD THE ORDER OF LD. CIT(A) BY DISMISSING GROUNDS RAISED BY DEPARTMENT. 9. IN THE RESULT, DEPARTMENTS APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2015. SD/- SD/- (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 4 TH SEPTEMBER, 2015 KV COPY TO:- 1) ITO, WARD 11(2), D BLOCK, 5 TH FLOOR, IT TOWERS, AC GUARDS, HYDERABAD. 2) M/S NAGARJUNA HOMES, FLAT NO. 503 & 504, DAFFODI L BLOCK, NAGARJUNA DREAMS, KOMPALLY, RR DIST. 3) CIT(A) VI, HYDERABAD 4) CIT-V, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.