ITO 15(3)(2), MUMBAI V. SAI SHRADDHA CONSTRUCTION, MUMBAI

ITA 5520/MUM/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9372 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 04-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 08-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAIK
• Assessee Lawyers: S C TIWARI
• Keywords: Agreed addition
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) THE ITO 15(3)92), MATRU MANDIR, 1 ST FLOOR, TARDEO ROAD, MUMBAI 400 007. (APPELLANT) VS. M/S. SAI SHRADDHA CONSTRUCTION, VIJAY PUNJAB RESTURANT, SION- TROMBAY ROAD, DEONAR, MUMBAI 400 088. PAN:ABDFS 2835F (RESPONDENT) APPELLANT BY : SHRI K.C.P.PATNAIK RESPONDENT BY : SHRI S.C.TIWARI DATE OF HEARING : 12/11/2012 DATE OF PRONOUNCEMENT : 2 1/11/2012 ORDER PER I.P.BANSAL, J.M, ALL THESE APPEALS ARE FILED BY THE DEPARTMENT AND THEY ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY LD. CIT(A)XV, MUMBAI DATED 17/2/2009 FOR ASSESSMENT YEAR 2005-06 AND DATED 17/ 7/2009 FOR ASSESSMENT YEARS 2006-06 AND 2007-08. 2. GROUNDS OF APPEAL OF APPEAL FOR A.Y 2005-06 & 20 06-07 ARE IDENTICAL AND READ AS UNDER: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE HAS N OT VIOLATED THE PROVISIONS OF SECTION 801B(10)(C), IGNORING FACT BROUGHT ON RE CORD THAT ON PHYSICAL INSPECTION, THERE ARE MANY RESIDENTIAL UNITS IN THE BUILDING MEASURING MORE ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 2 THAN 1000 SQ. FT. OF BUILT UP AREA WHICH CONTRAVENE THE PROVISIONS OF SECTION 80` I10) RESULTING INTO DISQUALIFICATION OF DEDUCTI ON CLAIMED U/S. 801B(1 0). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS IN LAW, THE 2 LD. CIT(A) ERRED IN HOLDING THAT THE CHARGEABLE TER RACE OF 330 SQ.FI. SOLD WITH FLAT NO. 1403B WITH CARPET AREA OF 900 SQ.FT. IS A COMMON TERRACE, WHEREAS THE FACT IS THAT THE CHARGEABLE TERRACE OF 330 SQ.F T. SOLD SOLELY TO OWNER OF FLAT NO. 1403B WITH CARPET AREA OF 900 SQ.FT. IS NOT A C OMMON TERRACE BUT A PRIVATE TERRACE AS INALIENABLE PART OF FLAT NO. 140 3B. 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE ORDER OF LD. CIT(A) IS ERRONEOUS IN DELETING THE ES TIMATION OF PROFIT WITHOUT APPRECIATING THAT THE ASSESSEE HAS NOT SUBSTANTIATE D ANY PLAUSIBLE EXPLANATION FOR ADOPTING FULL PROJECT COMPLETION ME THOD INSTEAD OF PERCENTAGE PROJECT COMPLETION METHOD, WHICH IN ITSELF IS A SER IOUS DEFECT IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WHICH COMPELLED THE AO TO COMPLETE THE ASSESSMENT BASED ON MATERIAL AVAILABLE ON RECORDS. 4 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD. CIT(A) ERRED IN ACCEPTING THE PROFIT RETURNED B Y THE ASSESSEE ON FULL PROJECT COMPLETION METHOD DESPITE THE FACT THAT EAC H ASSESSMENT YEAR IS SEPARATE AND INDEPENDENT UNIT IN ITSELF AS HELD BY HONBLE SUPREME COURT IN THE CASE OF CIT V/S. BRITISH PAINT (INDIA) LTD., RE PORTED IN 188 ITR 44 AND THE ASSESSEE IS MAINTAINING MERCANTILE SYSTEM OF ACCOUN TING. 2.1 GROUNDS OF APPEAL FOR A.Y 2007-08 READ AS UNDER : 1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSESSEE H AS NOT VIOLATED THE PROVISIONS OF SECTION 801B(L0)(C), IGNORING FACT BR OUGHT ON RECORD THAT ON PHYSICAL INSPECTION, THERE ARE MANY RESIDENTIAL UNI TS IN THE BUILDING MEASURING MORE THAN 1000 SQ.FT. OF BUILT-UP AREA WH ICH CONTRAVENE THE PROVISIONS OF SECTION 801B(10)(C) RESULTING INTO DI SQUALIFICATION OF DEDUCTION CLAIMED U/S.801B(10). 2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE CHARGEABLE TERRACE OF 330 SQ.FT. SOLD WITH FLAT NO.1403B WITH CARPET AREA OF 900 SQ.FT. I S A COMMON TERRACE, WHEREAS THE FACT IS THAT THE CHARGEABLE TERRACE OF 330 SQ.FT. SOLD SOLELY TO OWNER OF FLAT NO.1403B WITH CARPET AREA OF 900 SQ.F T. IS NOT A COMMON TERRACE BUT A PRIVATE TERRACE AS INALIENABLE PART OF FLAT N O.1403B AND THE SAME IS IN POSSESSION OF OWNER OF FLAT NO.1403B TILL DATE. 3] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE ORDER OF CIT(A) IS ERRED IN DELETING ADDITION MADE OF RS.1,32,495/- ON ACCOUNT OF EXCESS ALLOTMENT OF AREA TO HINDUSTAN CA NDLE MFG., CO., (P) LTD., WHILE PURCHASING DEVELOPMENT RIGHTS FROM THE SAID C OMPANY. ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 3 3. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE AP PEALS AND THESE WERE ARGUED TOGETHER BY BOTH THE PARTIES AND THESE APPE ALS ARE DISPOSED OF BY THIS COMMON ORDER. 4. THE ASSESSEE IS A BUILDER AND DEVELOPER AND FIL ED ITS RETURN OF INCOME ON THE BASIS OF PROJECT COMPLETION METHOD AND ALSO CLAIMS DEDUCTION UNDER SECTION 80 IB(10). A SURVEY UNDER SECTION 133A WAS CONDUCTED BY THE DEPARTMENT ON 12/12/2006. TAKING INTO ACCOUNT THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY, THE AO IN THE ASSESSME NT ORDER FOR A.Y 2005-06 HAS NOTED THE FOLLOWING FACTS: (A) DEDUCTION UNDER SECTION 80 IB(10) IS ALLOWABLE IN RESPECT OF RESIDENTIAL UNITS WHICH ARE HAVING MAXIMUM BUILT UP AREA OF 100 0 SQ.FTS. THE ASSESSEE HAS TWO WINGS IN THE PROJECT, SAI SRADDHA WHICH C ONSISTS OF 55 FLATS IN A- WING AND 53 FLATS IN B-WING, CUMULATIVELY ADMEASURI NG 43,993 SQ.FTS. AND 42,614 SQ. FTS, DESIGNATED AS FLATS OF 3 BHK AND 2 BHK. (B) IN ONE OF THE 2 BHK FLATS, FLAT NO.203 IN A- WI NG HAS THE CARPET AREA OF 900 SQ.FTS AND CHARGEABLE TERRACE OF 60 SQ.FTS. EQU IVALENT TO 83.61 SQ.MTS. HOWEVER, THE ASSESSEE SOLD THE SAID FLAT TO THE OWN ER, ON LEDGER PAGE NO.213 AT 1000 SQ.FTS. FOR CALCULATION OF REGISTRATION AND STAMP DUTY THE BUILT UP AREA WAS CONSIDERED AT 1080 SQ.FTS. EQUAL TO 100. 33 SQ. MTS. (C) THE FLAT NO.202 IN A-WING IN SECOND FLOOR IS A LSO SIMILARLY HAVING 900 SQ. FTS. CARPET AREA AND CHARGEABLE TERRACE OF 60 SQ. FT. WAS TAKEN FOR THE PURPOSE OF REGISTRATION AND STAMP DUTY AT 1080 SQ.F TS. AND SUCH CALCULATION WAS MENTIONED IN THE TITLE DEED AS UNDER: AT THE REQUEST OF THE PURCHASER, SUBJECT TO THE PU RCHASER MAKING FULL COMPLETE PAYMENT OF THE COST OF FLAT, THE BUILDERS HAS AGREE D TO SELL TO THE PURCHASER ON WHAT IS POPULARLY KNOWN AS ON OWNERSHIP BASIS F/A T NO.202 A WING ON ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 4 SECOND FLOOR ADMEASURING ABOUT 900 SQ. FT. CARPET A REA EQUIVALENT TO 83.61 SQ. A4ETERS AND CHARGEABLE TERRACE 60 SQ. FT. OR TH EREABOUTS WHICH IS CONSTRUCTED ON THE SAID PLOT C WHICH IS EARMARKED A ND COLOURED IN RED CO/OUR IN THE TYPICAL FLOOR PLAN ANNEXED HERETO, AND MORE PARTICULARLY DESCRIBED IN THE FIRST SCHEDULE HEREUNDER WRITTEN (HEREINAFTER REFE RRED TO AS THE SAID PREMISES). FOR THE CALCULATION OF REGISTRATION AND STAMP DUTY OF THIS DOCUMENT THE BUILT-UP AREA IS 1080 5Q.FT., EQUIVALE NT TO 100.33 SQ.MTRS. (D) FLAT OWNER OF FLAT NO.202 AT A-WING WAS ALSO EXAMINED AND HIS STATEMENT ON OATH WAS RECORDED BY THE AO ON 4/1/200 7. HE WAS REQUIRED TO ANSWER ABOUT CARPET AREA AND BUILT UP AREA OF THE F LAT AS PER THE AGREEMENT. HE STATED CARPET AREA AS 900 SQ.FTS, BUILT UP ARE A AS 1080 SQ.FT. AND SUPER BUILT UP AREA, INCLUDING TERRACE OF 60 SQ.FTS. AS 1 345 SQ.FTS. SIMILAR STATEMENT WAS GIVEN BY OWNER OF FLAT NO.203 IN A-WI NG. (E) IN THE SURVEY A SALE AGREEMENT OF 3BHK FLAT NO. 1403 IN B-WING WAS ALSO FOUND, WHERE CARPET AREA WAS MENTIONED AT SQ.FTS. A LONGWITH CHARGEABLE TERRACE OF 330 SQ.FTS. WHICH ACCORDING TO AO WAS NO T USED FOR COMMON PURPOSES. 4.1 IT IS ALSO NOTICED BY THE AO THAT SURVEY PARTY FOUND THAT OWNERS OF FLAT NO.803,903,1003 AND 1403 IN THE B-WING HAVE JOINED THE FLATS WITH FLAT NO.804, 904, 1004 AND 1404 RESPECTIVELY AND THUS T HE BUILT UP AREA OF THOSE FLATS EXCEEDED 1000 SQ. FTS. 4.2 IT WAS CLAIMED BY THE ASSESSEE THAT UPON COMPL ETION OF THE PROJECT AND AFTER HANDING OVER THE FLATS TO THE OCCUPANTS A S PER SALE AGREEMENT, ASSESSEE DOES NOT HAVE ANY CONTROL TO OBSTRUCT THE OWNERS OF THE FLAT TO CARRY OUT INTERNAL MODIFICATIONS AS PER CONVENIENCE AND ASSESSEE HAS NOT WILLFULLY ALLOWED THEM VERBALLY OR IN WRITING TO C ARRY OUT SUCH ALTERATION BY JOINING THE TWO FLATS. THE BONAFIDE IS PROVED FROM THE FACT THAT FOR 108 FLATS ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 5 108 ELECTRIC METERS HAVE BEEN INSTALLED AND 108 GAS CONNECTIONS ARE INSTALLED THAT IS ONE INDEPENDENT FOR EACH FLAT. 4.3 BY TAKING INTO CONSIDERATION AFOREMENTIONED FAC TS THE AO HAS COME TO THE CONCLUSION THAT ASSESSEE IS NOT ENTITLED FOR CL AIMING DEDUCTION UNDER SECTION 80 IB(10) AS IT HAS NOT FULFILLED THE COND ITION OF CONSTRUCTING THE FLATS HAVING THE MAXIMUM BUILT UP AREA OF 1000 SQ.FTS. 4.4 IT WAS ALSO NOTICED BY THE AO THAT DURING THE C OURSE OF SURVEY THE ASSESSEE HAD AGREED ADDITIONAL INCOME OF RS. 18 CRO RES AND ALSO HAD PAID ADVANCE TAX OF RS. 6 CRORES AFTER WITHDRAWING THE D EDUCTION UNDER SECTION 80 IB(10) OF THE ACT. IT IS IN THESE CIRCUMSTANCES, T HE AO COMPUTED 8% PROFIT OF WORK-IN-PROGRESS OF RS.6,30,64,083.15 AND COMPUTED THE INCOME OF THE ASSESSEE AT RS.50,45,127 IN PLACE OF NIL SHOWN BY T HE ASSESSEE. 5. THE ASSESSEE AGITATED SUCH ACTION OF AO IN APPEA L BEFORE LD. CIT(A). IT WAS SUBMITTED THAT NONE OF THE FLATS CONSTRUCTED B Y THE ASSESSEE EXCEEDED SPECIFIED LIMIT OF 1000 SQ.FTS. IT WAS SUBMITTED T HAT ACCORDING TO THE DEFINITION OF BUILT-UP AREA TERRACE CANNOT BE INCLU DED AS THE SAME IS NOT FOR THE EXCLUSIVE USE OF INDIVIDUAL FLAT OWNERS AND THE SAME IS OWNED BY OTHER FLAT OWNERS ALSO. IT WAS SUBMITTED THAT THE AREA O F FLAT IS ONLY 900 SQ.FTS. AND EVEN IF FOR THE SAKE OF ARGUMENTS 60 SQ.FTS TERRA CE IS TAKEN INTO ACCOUNT THEN ALSO THE AREA OF FLAT WILL BE ONLY 960 SQ.FTS. WHICH DOES NOT EXCEED 1000 SQ.FTS. SO FAR AS IT RELATES TO CARPET AREA OF FLA T NO.1403 OF B-WING IT WAS SUBMITTED THAT CHARGEABLE TERRACE AREA OF 330 SQ.FT S. CANNOT BE PRESUMED TO BE PART OF THE FLAT AS IT IS INDEPENDENT TO THE RE SIDENTIAL UNIT. SO FAR AS IT RELATES TO COMBINING OF FLAT NOS. 803 WITH 804, 90 3 WITH 904, 1003 WITH 1004 AND 1403 WITH 1404, IT WAS SUBMITTED THAT TOTA L AREA OF ONE INDIVIDUAL FLAT DOES NOT EXCEED 1000 SQ.FTS AND ONCE THE FLATS ARE HANDED OVER TO THE ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 6 CLIENTS, THE ASSESSEE AS A DEVELOPER DOES NOT HAVE ANY RIGHT OR POWER TO RESTRICT THE CLIENTS IN UTILIZING THE FLATS AT THEI R WILL AND PLAYS. THUS IT WAS PLEADED THAT DEDUCTION UNDER SECTION 80 IB(10) CANN OT BE DISALLOWED. 5.1 IT WAS FURTHER SUBMITTED THAT DURING THE COURSE OF SURVEY ITSELF IT WAS SUBMITTED BY THE ASSESSEE THAT SINCE STRUCTURE IS A LREADY IN EXISTENCE, HENCE, INSTEAD OF EXCHANGING VERBAL ARGUMENTS AND COMPLICATING THE ISSUE, DEPARTMENTAL ENGINEER / ARCHITECT AND ASSESSEES AR CHITECT CAN MEASURE SOME OF THE FLATS OF 3 BHK JOINTLY AND MATTER CAN B E RESOLVED ON FACTUAL REPORT AND SUCH PROPOSAL OF THE ASSESSEE WAS NOT AC CEPTED, THEREFORE, AFTER SURVEY, THE ASSESSEE HAS OBTAINED A CERTIFICATE FRO M THE APPROVED ARCHITECT / VALUER VIZ. MR. A.B. PATWARDHAN OF M/S. PATWARDHAN ASSOCIATES, WHICH IS DATED 7/3/2007, COPY OF THE SAID REPORT WAS FILED A LONG WITH FORM NO.35. SET OF ENTIRE DOCUMENTS WERE ALSO SENT TO AO AS PER NOR MAL PROCEDURE OF THE DEPARTMENT. IT WAS SUBMITTED THAT ARCHITECT HAD C ERTIFIED THAT THE CARPET AREA AS WELL AS BUILT UP AREA OF EACH FLAT IS LESS THAN 1000 SQ.FTS. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAS RECTIFIED THE A GREEMENT OF SALE OF CANOPY IN RESPECT OF FLAT NO.202 & 203 IN A-WING THROUGH A RECTIFIED AGREEMENT OF SALE DEED DATED 20/12/2006 AND EXISTENCE OF SUCH FA CT CANNOT BE DENIED. SO FAR AS IT RELATES TO COMBINATION OF TWO FLATS IT WAS SUBMITTED THAT ASSESSEE HAD SOLD OUT INDIVIDUAL RESIDENTIAL UNITS DULY APPR OVED BY THE COMPETENT AUTHORITIES AND IF ANY OWNER OR SOME OF THE OWNERS RE-MODIFY OR ALTER THE INTERIOR CONSTRUCTIONS OF WALL AND ROOM, THE ASSESS EE CANNOT BE HELD LIABLE FOR ANY NEGATIVE EFFECT. 5.2 UPON THE AFOREMENTIONED SUBMISSIONS MADE BY THE ASSESSEE LD. CIT(A) HAS HELD THAT THE PROFIT RATE OF 8% HAS BE EN APPLIED BY THE AO WITHOUT ANY BASIS AND WITHOUT GIVING PROPER SHOW CA USE NOTICE TO THE ASSESSEE. THE AO HAS COMPUTED THE NOTIONAL PROFIT ON WORK-IN-PROGRESS AS AO HAS NOT POINTED OUT ANY SUBSTANTIAL DEFECTS IN THE BOOKS OF ACCOUNT OR ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 7 DEFECT IN THE ACCOUNTING METHOD REGULARLY EMPLOYED BY THE ASSESSEE. IN THE ASSESSMENT ORDER AO HAS THROUGH OUT DISCUSSED TERM S AND CONDITIONS OF SECTION 80 IB(10) AND THE FACTS FOUND DURING THE CO URSE OF SURVEY PROCEEDINGS AND AT THE END OF THE ASSESSMENT ORDER AO HAD JUMPED TO THE CONCLUSION FOR DETERMINING THE PROFIT @ 8% WHICH I S APPARENTLY IN-GENUINE AND WRONG APPROACH. THEREFORE, LD. CIT(A) HELD THA T THE STAND OF AO FOR DETERMINING PROFIT @8% IS NOT WORTH APPROVAL. 5.3 COMING TO THE QUESTION OF ALLOWABILITY OR OTHE RWISE OF DEDUCTION UNDER SECTION 80 IB(10), LD. CIT(A) FOUND THAT AO HAS NOT APPRECIATED THE FACTS PROPERLY AS 60 SQ.FTS. TERRACE WAS WRONGLY INCLUDED IN BUILT UP AREA. IN FACT RESIDENTIAL UNITS IS CONFINED TO THE BUILT UP AREA OF THE FLAT AND NOT BUILT UP AREA OF THE BUILDING IN WHICH FLAT IS ONE OF THE U NIT. FOR THE PURPOSE OF SALE VALUE AND STAMP DUTY TOTAL AREA OF BUILDING CAN BE APPORTIONED SO THAT PROPER INCOME OR DESIRABLE INCOME FROM THE SALE PR OCEEDS AND MAXIMUM BUT PROPER STAMP DUTY IS COLLECTED OR RECEIVED (SIC ), THIS DOES NOT MEAN THAT THE PRESCRIBED LIMIT OF RESIDENTIAL UNIT IS GET EXP ANDED TO THE BUILT UP AREA OF THE BUILDING. THE ARCHITECTURAL MAP AND THE LAY OU T PLAN OF THE PROJECT REVEAL THE FACT THAT ALL FLATS EITHER OF TWO OR TH REE BHK IS HAVING BUILT UP AREA WHICH DOES NOT EXCEED 1000 SQ.FT. LD. CIT(A) ALSO OBSERVED THAT EVEN BY ADDING 60 SQ.FTS. OF TERRACE HOW BUILT UP AREA OF F LAT OF 900 SQ.FTS CAN EXCEED 1000 SQ.FTS. AND IT HAS NOT BEEN ELABORATED BY AO AS TO HOW REGISTRATION FEES AND STAMP DUTY OF THE DOCUMENTS CAN INCREASE THE BU ILT UP AREA OF A FLAT OF 900 SQ.FTS OR 960 SQ.FTS OR 1080 SQ.FTS. THE ABST RACT OF SALE AGREEMENT REFERRED TO BY THE AO REVEAL THAT CALCULATION OF 10 80 SQ.FTS. IS NOT IN RESPECT OF RESIDENTIAL UNIT BUT IN RESPECT OF THE SAID PREMISES. THE SAID PREMISES INCLUDE THE LOADING OF COMMON TERRACE OF 60SQ.FTS. WHICH MEANS IN REALITY RESIDENTIAL UNIT IS ONLY OF 900 SQ.FTS AND OTHER LOADING OF TERRACE IS INCIDENTAL BEING PART OF THE BUILDING OR RESIDENTIA L PROJECT FOR WHICH, ASSESSEE CANNOT BE DEPRIVED OF LEGAL DUE ( LEGAL RIGHT OF DEDUCTION). IN THE SALE ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 8 AGREEMENT IT HAS BEEN SPECIFICALLY MENTIONED THAT F OR THE PURPOSE OF CALCULATION OF REGISTRATION AND STAMP DUTY, THE BU ILT UP AREA IS TAKEN AT 1080 SQ.FTS WHICH CANNOT BE PRESUMED TO BE ACTUAL B UILT UP AREA OF A RESIDENTIAL UNIT. LD. CIT(A) REFERRED TO THE PROVI SIONS OF SECTION 80 IB(14)(A) OF THE ACT, WHICH DEFINES BUILT UP AREA, MEANING THEREBY THE INTERNAL MEASUREMENT OF RESIDENTIAL UNIT AT FLOOR LEVEL INCL UDING THE PROJECTIONS AND BALCONIES AS INCREASED BY THE THICKNESS OF WALL A ND IT DOES NOT INCLUDE COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNIT. T HUS LD. CIT(A) HELD THAT BUILT UP AREA DOES NOT INCLUDE OUTER TERRACE, STAIR S, GALLERIES OR APPROACHES. IN THIS MANNER LD. CIT(A) HAS HELD THA T THERE IS NO VIOLATION OF THE PROVISIONS OF LAW UNDER SECTION 80 IB(10) OF TH E ACT. LD. CIT(A) ALSO REFERRED TO THE CERTIFICATE OF APPROVED VALUER, ACC ORDING TO WHICH CARPET AREA AND BUILT UP AREA OF ALL FLATS WERE CERTIFIED TO BE AT 851.370 SQ.FTS AND 991.033 SQ.FTS AND SUCH REPORT WAS ALSO FORWARDED T O AO AND REMAINS UNCONTROVERTED. LD. CIT(A) ALSO MENTIONED THAT SO FAR AS IT RELATES TO 60 SQ.FTS CANOPY IN RESPECT OF FLAT NO.202 OF A&B-WIN G AND 203 OF A-WING, THOUGH WAS SOLD OUT BUT IT WAS WITHDRAWN BY RECTIFI CATION SALE AGREEMENT AS ASSESSEE WAS NOT AUTHORIZED UNDER LAW TO SELL IT. FOR THE TERRACE ADJOINING THE FLAT 1403 OF B-WING, LD. CIT(A) OBSERVED THAT I T IS A COMMON TERRACE, THEREFORE, CANNOT BE PRESUMED TO BE PART AND PARCE L OF RESIDENTIAL UNIT. HE ALSO OBSERVED THAT THESE ARE FEW EXAMPLES AND THOS E ARE NOT APPLICABLE TO ENTIRE 108 FLATS BUILD BY THE ASSESSEE. HE OBSERVE D THAT IN RESPECT OF REMAINING FLATS NO EXTRA TERRACE ETC. HAS BEEN SOLD BY THE ASSESSEE AND DEDUCTION UNDER SECTION 80 IB(10) CANNOT BE DENIED FOR WHOLE OF THE PROJECT. THE AO HAS RELIED UPON THE INFORMATION GATHERED BY THE SURVEY PARTY AND HAS DONE NO EFFORT TO ASCERTAIN THE FACTS BROUGHT B Y THE ASSESSEE ON RECORD. HE OBSERVED THAT SUPER BUILT UP AREA FOR ASCERTAINI NG SELLING PRICE DIFFER FROM BUILDER TO BUILDER, WHICH IS NORMALLY 25 TO 35% GEN ERALLY MENTIONED IN THE AGREEMENT OF SALE AND TAKEN FOR THE PURPOSE OF LE VY OF STAMP DUTY BY THE REGISTRAR AT THE TIME OF REGISTRATION. ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 9 5.4 TAKING INTO ACCOUNT ALL THESE FACTS LD. CIT(A) HAS HELD THAT BUILT UP AREA OF EACH OF THE FLAT IS LESS THAN 1000 SQ.FTS. THEREFORE, AO WAS WRONG IN PRESUMING MORE BUILT UP AREA THAN THE ARCHITECTURAL MAP, LAY OUT PLAN AND PHYSICAL VERIFICATION OF THE AREA CERTIFIED BY THE APPROVED ARCHITECT. HE ALSO NOTED THAT IN THE COMPUTATION OF INCOME ASSESSEE HA S WORKED OUT GROSS TOTAL INCOME AT NIL AND ONLY A NOTE HAS GIVEN BELOW THE C OMPUTATION OF INCOME STATING AS PROJECT IS SUBJECT TO SECTION 80 IB(10) , INCOME OF THE PROJECT TO BE CONSIDERED ON COMPLETION OF THE PROJECT, HENCE, NO INCOME IS OFFERED FOR TAXATION. TOTAL WORK-IN-PROGRESS CAPITALIZED DURING THE A.Y 2005-06 WAS RS.6,30,64,083.15. 5.5 LD. CIT(A) FURTHER NOTICED FROM THE BUILDING ACCOUNT / P&L ACCOUNT THAT IN REALTY THERE IS PROFIT IN THE YEAR BECAUSE OF THE REASON THAT THERE WAS AN OPENING WORK-IN-PROGRESS OF RS.1,02,53,469/- AND PURCHASE OF BUILDING MATERIAL AND INCURRING CONSTRUCTION EXPENSES OF RS. 4,41,30,635/- WITH OTHER DIRECT AND INDIRECT EXPENSES TO THE TUNE OF RS.8,93 ,774/- AND S.77,86,204/- RESPECTIVELY ARE CAPITALIZED BEING EXPENDITURE ATTR IBUTABLE TO PROJECT. THUS HE OBSERVED THAT INDIRECT EXPENSES WOULD HAVE BEEN CONSIDERED NOT IN THE CASE OF CONSTRUCTION, IT WOULD HAVE BEEN CLAIMED AS EXPENDITURE IN P&L ACCOUNT, WHICH COULD HAVE BEEN CARRIED FORWARD IN S UBSEQUENT YEAR, WHICH WOULD BE HAVING CONSEQUENTIAL EFFECT IN CALCULATIO N OF PROFIT IN SUBSEQUENT YEARS. EVEN THIS ACCOUNTING WOULD NOT MAKE ANY DI FFERENCE IN FINAL ASCERTAINMENT OF PROFIT BECAUSE EITHER IT HAS BEEN MERGED IN THE COST OF PROJECT OR IN SUBSEQUENT YEAR THESE INDIRECT EXPENS ES WOULD HAVE BEEN REDUCED FROM GROSS PROFIT. HE AGAIN OBSERVED THAT AO HAS MADE THE ADDITION BY ESTIMATING 8% PROFIT ON THE WORK-IN-PROGRESS WIT HOUT POINTING OUT ANY DEFECTS IN THE BOOKS OF ACCOUNT OR ANY SORT OF DEFE CT IN THE ACCOUNTING METHOD. THE AO HAS ALSO NOT CLARIFIED AS TO WHY 8% PROFIT IS CONSIDERED, THEREFORE, HE HELD THAT ASSESSMENT HAS BEEN MADE ON LY ON SURMISES AND ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 10 CONJECTURES AND IN THIS MANNER AN ADDITION OF RS.50 ,45,127/- WAS DELETED. THE DEPARTMENT IS AGGRIEVED, HENCE IN APPEAL. 6. ABOVE FACTS ARE NARRATED FROM A.Y 2005-06. FOR OTHER YEARS THE FACTS REMAIN THE SAME EXCEPT DIFFERENCE IN FIGURES. 6.1 APART FROM THE FINDINGS RECORDED BY LD. CIT(A) IN RESPECT OF A.Y 2005- 06, LD. CIT(A) IN RESPECT OF A.Y 2006-07 & 2007-08 HAS ALSO CONSIDERED THE SUBMISSIONS OF THE AO FILED VIDE LETTER DATED 26/3/ 2009, WHEREIN THE AO HAD CONTENDED THAT ASSESSEE SHOULD HAVE DECLARED P ROFIT IN A.Y 2006-07 AS THE WORK-IN-PROGRESS FOR A.Y 2006-07 WAS RS.10,28,5 2,135/-, WHEREAS SALE DECLARED IN A.Y 2007-08 WERE AT RS.43,57,85,415/-, WHICH IS 23.60% OF THE TOTAL PROJECT. LD. CIT(A) DID NOT FIND ANY FORCE I N SUCH ARGUMENTS OF AO ON THE GROUND THAT THE METHOD ADOPTED BY THE ASSESSE E IS PROJECT COMPLETION METHOD AND ASSESSEE IS ENTITLED FOR DEDUCTION UNDE R SECTION 80 IB(10) HENCE, MERELY ON FLIMSY GROUND AND TRIVIAL REASONIN G WELL FOUNDED METHOD CANNOT BE DISCARDED AND NOTIONAL PROFIT OF 8% CANNO T BE ADOPTED ON NOTIONAL BASIS. IF AO WANT TO CHANGE THE METHOD OF ACCOUNTI NG, THERE SHOULD BE PROPER AND CONVINCING REASON AS TO HOW WITH REFER ENCE TO FACT AND CIRCUMSTANCES OF PARTICULAR CASE PROJECT COMPLETIO N METHOD IS NOT CORRECT AND NOT ALLOWABLE. THE ASSESSEE HAS COMPLETED THE HOUSING PROJECT FOR WHICH PROFIT HAS TO BE REALIZED IN THE YEAR OF SALE OF FLAT. THE AO HAS NOT DISPUTED THE SALE OF FLATS AND REALIZATION OF REVEN UE IN THE FINANCIAL YEAR 2006-07 RELEVANT TO A.Y 2007-08, THEREFORE, THERE I S NO PROPRIETY TO DEVIATE FROM SYSTEMATIC METHOD OF ACCOUNTING OF THE ASSESSE E. HE ALSO HELD, SINCE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80 IB(10), EVEN IF THE PROFITS ARE ESTIMATED @8%, THEN ALSO THE ASSESSEE WILL BE ENTITLED FOR DEDUCTION UNDER SECTION 80 IB(10) OF THE ACT ON THE ENTIRE P ROFIT. SO FAR AS IT RELATES TO ADDITION OF RS.1,32,495/- RELATES TO A.Y 2007-08 LD . CIT(A) OBSERVED THAT THIS AMOUNT IS ADDED ON ACCOUNT OF EXCESS SALE OF AREA TO THE LAND OWNER ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 11 WHO WAS TO BE GIVEN THREE FLATS AND WAS IN ADDITION TO AGREED SALE PROCEEDS OF THE LAND. SUCH ADDITION WAS ALSO NOT CALLED FOR THE REASON THAT ASSESSEE IS ENTITLED TO GET 100% DEDUCTION OF PROFIT GENERATED IN SUCH PROJECT. CONSIDERING ALL THESE FACTS AND HIS ORDER FOR A.Y 2 005-06 LD. CIT(A) HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE IN RESPECT OF A.Y 2006-07 AND 2007- 08, WHERE APPLYING THE REASONING IN RESPECT OF A.Y 2005-06, THE AO HAD ESTIMATED THE PROFITS OF THE ASSESSEE AT RS.31,83,0 44/- FOR A.Y 2006-07 AND RS. 23,70,01,427/- FOR A.Y 2007-08 BY REJECTING THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION UNDER SECTION 80 IB(10) OF THE ACT. THE REVENUE IS AGGRIEVED WITH SUCH FINDING OF LD. CIT(A) AND HENCE HAS RAISED AFOREMENTIONED GROUNDS OF APPEAL. 7. LD. D.R AFTER NARRATING THE FACTS WHICH HAVE BEE N DISCUSSED IN DETAIL SUBMITTED THAT ASSESSEE IS NOT ENTITLED TO GET DED UCTION UNDER SECTION 80 IB(10) AS THERE IS A GROSS VIOLATION OF CONDITIONS LAID DOWN IN SECTION 80 IB(10). HE SUBMITTED THAT SURVEY WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE FROM WHERE IT WAS FOUND THAT SEVERAL FLATS SOLD BY THE ASSESSEE WERE SHOWING BUILT UP AREA OF MORE THAN 1000 SQ.FTS. HE SUBMITTED THAT DEDUCTION UNDER SECTION 80 IB(10) CANNOT BE ALLOWED WHERE BUILT UP AREA OF A FLAT CONSTRUCTED IN HOUSING PROJECT EXCEEDS 100 0 SQ.FTS. LD. D.R SUBMITTED THAT THE FACT THAT BUILT UP AREA OF THE FLAT WAS IN EXCESS OF 1000 SQ.FT. IS ESTABLISHED BY REGISTERED DOCUMENTS AND T HUS THERE WAS A CLEAR VIOLATION OF CONDITIONS LAID DOWN IN SECTION 80 IB( 10) OF THE ACT. HE FURTHER SUBMITTED THAT ASSESSEE SOLD TERRACE OF 330 SQ.FTS. WHICH ALSO MADE BUILT UP AREA OF FLAT MORE THAN 1000 SQ.FTS. HE ALSO REFERR ED TO THE INSTANCE WHERE TWO FLATS HAVE BEEN PUT TOGETHER WHICH ALSO MADE T HE AREA OF FLATS MORE THAN 1000 SQ.FTS. LD. D.R FURTHER SUBMITTED THAT A O WAS RIGHT IN REJECTING THE METHOD OF THE ASSESSEE AND ADOPTING 8% RATE ON THE WORK-IN-PROGRESS AS THERE WAS A VIOLATION BY THE ASSESSEE OF THE CONDIT IONS LAID DOWN IN SECTION 80 IB(10) OF THE ACT. THUS SUPPORTING THE ASSESSM ENT ORDER IT WAS PLEADED ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 12 BY LD. D.R THAT LD. CIT(A) HAS WRONGLY ALLOWED THE RELIEF TO THE ASSESSEE IN DELETING THE ADDITION MADE BY AO BY APPLYING 8% PR OFIT RATE ON WORK-IN- PROGRESS AND BY GRANTING DEDUCTION TO THE ASSESSEE UNDER SECTION 80 IB(10) OF THE ACT. 8. ON THE OTHER HAND, IT WAS PLEADED BY LD. A.R THA T BUILT UP AREA HAS BEEN DEFINED IN SECTION 80 IB(10) WHICH INCLUDED CO MMON AREA. IF ANY AREA IS EXCLUDED, THEN BUILT UP AREA OF NONE OF THE FLAT S EXCEEDED 1000SQ.FTS. HE SUBMITTED THAT AS PER PLANS SUBMITTED BY THE ASSE SSEE AND APPROVED BY THE MUNICIPAL CORPORATION, BUILT UP AREA OF NONE OF TH E FLATS EXCEED 1000 SQ.FTS. HE SUBMITTED THAT SUCH FACT WAS SUPPORTED BY THE C ERTIFICATE OF APPROVED ARCHITECT, WHICH HAS NOT BEEN CONTROVERTED TILL DA TE. HE SUBMITTED THAT ASSESSEE HAS BEEN ADOPTING PROJECT COMPLETION METHO D WHICH HAS BEEN DISTURBED BY THE AO WITHOUT ANY REASON AND, THEREFO RE, LD. CIT(A) HAS RIGHTLY DISCARDED THE ACTION OF AO. HE SUBMITTED T HAT LD. CIT(A) IS RIGHT IN HOLDING THAT WHEN THE ASSESSEE IS ENTITLED FOR DEDU CTION UNDER SECTION 80 IB(10) THEN THERE WAS NO QUESTION OF MAKING ANY EXT RA ASSESSMENT AS THE INCOME FROM THE HOUSING PROJECT WILL BE ELIGIBLE FO R DEDUCTION IN ITS ENTIRETY. THEREFORE, HE PLEADED THAT LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION AND HIS ORDER SHOULD BE UPHELD. 8.1 SO AS IT RELATES TO THE ISSUE OF COMBINING TWO FLATS BY THE BUYER OF THE FLATS LD. A.R RELIED UPON THE DECISION OF ITAT MUM BAI BENCH IN THE CASE OF EMGEEN HOLDINGS P. LTD. VS. DCIT ORDER DATED 29/7/2 011 IN ITA NO.3594& 3595/MUM/09 ETC., COPY OF WHICH IS FILED IN THE PAP ER BOOK AT PAGE 1 TO 8 OF THE PAPER BOOK, WHEREIN ASSESSEE AS BUILDER AND DEV ELOPER HAD SOLD TWO FLATS BY TWO SEPARATE AGREEMENTS TO THE MEMBERS OF SAME F AMILY AND THE SALE OF TWO FLATS WAS VIEWED BY THE DEPARTMENT AS ONE UNIT, IT WAS HELD BY THE TRIBUNAL THAT WHERE THE TWO FLATS ARE SOLD BY A SEP ARATE AGREEMENT, THE SAME CANNOT BE TREATED AS ONE UNIT. IF THE SIZE OF THE FLAT AS EVIDENT FROM BUILDING ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 13 PLAN DULY APPROVED BY MUNICIPAL AUTHORITIES IS LES S THAN 1000 SQ. FTS. THEN THERE IS NO VIOLATION OF ANY CONDITION LAID DOWN I N SECTION 80 IB(10) OF THE ACT. 8.2 WITHOUT PREJUDICE TO THE ABOVE ARGUMENTS LD. A .R SUBMITTED THAT THE DENIAL OF DEDUCTION UNDER SECTION 80 IB(10) CAN ONL Y RESTRICTED TO THE VALUE OF FLATS, THE AREA OF WHICH EXCEED THE PRESCRIBED L IMIT. FOR THIS PURPOSE LD. A.R RELIED UPON THE THIRD MEMBER DECISION IN THE CASE OF M/S. SANGHVI & DOSHI ENTERPRISES VS. ITO ORDER DATED 19/5/2011, IN ITA NO.259& 269/M/2010, COPY OF WHICH IS PLACED AT PAGES 9 TO 50 OF THE PAPER BOOK, WHEREIN THIRD MEMBER HAS HELD THAT ASSESSEE WILL ENTITLED FOR DEDUCTION UNDER SECTION 80 IB(10) IN RESPECT OF FLATS HAVING BUILT UP AREA NOT EXCEEDING 1050 SQ.FTS. AND SHALL NOT BE ENTITLED FOR DEDUCTIO N UNDER SECTION 80 IB(10) IN RESPECT OF FLATS HAVING BUILT UP AREA EXCEEDIN G 1050 SQ.FTS. THUS, LD. A.R PLEADED THAT ORDER PASSED BY LD. CIT(A) SHOULD BE UPHELD AND THE APPEAL FILED BY THE REVENUE SHOULD BE DISMISSED. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. SO FAR IT RELATES TO APPLICATIO N OF 8% PROFIT RATE, IT IS OBSERVED THAT NO DEFECTS WHATSOEVER HAS BEEN POINTE D OUT BY AO TO REJECT THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE DEFECTS PO INTED OUT BY THE AO ARE REGARDING BUILT UP AREA OF THE FLATS WHICH ONLY CAN EFFECT THE ENTITLEMENT OF THE ASSESSEE REGARDING DEDUCTION UNDER SECTION 80 I B(10) OF THE ACT. LD. CIT(A) HAS DISCARDED SUCH ACTION OF AO ON THE GROUN D THAT NO DEFECTS WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE AO TO REJECT THE CONSISTENT AND RECOGNIZED METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE. THE PROJECT COMPLETION METHOD IS A RECOGNIZED METHOD OF ACCOUNT ING. THEREFORE, WE FIND NO INFIRMITY IN SUCH FINDINGS RECORDED BY LD. CIT(A ). THEREFORE, THE GRIEVANCE OF THE REVENUE TO THIS EXTENT IS REJECTED . ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 14 9.1 NOW COMING TO THE QUESTION OF ENTITLEMENT OF TH E ASSESSEE REGARDING DEDUCTION UNDER SECTION 80 IB(10) THE FACTS HAVE AL READY BEEN DISCUSSED IN DETAIL. ACCORDING TO THE APPROVED PLAN AREA OF NO NE OF THE FLATS EXCEED 1000 SQ.FTS. THERE ARE ONLY FOUR INSTANCES WHERE IN THE SALE DEED, THE AREA SOLD BY THE ASSESSEE EXCEEDS 1000 SQ. FTS. THE DETAILS HAS BEEN GIVEN BY LD. A.R WHICH ARE REPRODUCED BELOW: S.NO. FLAT NO. AGREEMENT AMOUNT OF CONSIDERATION AMOUNT REFUNDED ON CANCELLATION OF 60 SQ.FT. TERRACE BALANCE. 1. 202-A WING RS. 52,05,150/- RS. 2,32,200/- RS. 49,72,950/- 2. 203-A WING RS. 54,47,250/- RS. 2,43,000/- RS. 52,04,250/- 3. 202-B WING RS. 54,47,150/- RS. 2,43,000/- RS. 52,04,150/- 4. 1403-B WING RS. 45,54,000/- RS. 45,54,000/- 9.2 IN THE ABOVE FLATS ALSO THE APPROVED PLAN OF E ACH FLAT DOES NOT EXCEED 1000 SQ.FTS. WHILE SELLING THE FLATS THE ASSESSE E HAS MENTIONED TERRACE OF 60 SQ.FTS IN RESPECT OF FLATS LISTED AT SL.NO.1 TO 3 AND 330 SQ.FTS FOR FLATS MENTIONED AT SL. NO.4. IN RESPECT OF THREE FLATS MENTIONED AT SL.NO. 1 TO 3 THE ASSESSEE HAS EXECUTED RECTIFICATION DEED, WHERE SALE OF TERRACE OF 60 SQ.FTS. HAS BEEN WITHDRAWN AND REQUISITE AMOUNT HAS BEEN REFUNDED TO THE PURCHASER OF THE FLAT. IN RESPECT OF FLAT MENTION ED AT SL.NO.4, IT IS THE CASE OF LD. A.R THAT PURCHASER OF THE FLAT DID NOT CO-OPERA TE WITH THE ASSESSEE, THEREFORE, SALE DEED COULD NOT BE RECTIFIED. HE S UBMITTED THAT DESPITE THE FACT THAT SALE DEED COULD NOT BE RECTIFIED, THERE WILL BE NO VIOLATION AS TERRACE, WHICH IS COMMON AREA COULD NOT BE SOLD BY THE ASSESSEE. HE ALSO SUBMITTED THAT BUILT UP AREA HAS TO BE TAKEN AS PE R DEFINITION GIVEN IN THE SECTION ITSELF WHICH EXCLUDE COMMON AREA SHARED WIT H OTHER RESIDENTIAL UNITS. IT HAS BEEN THE CASE OF THE ASSESSEE THAT 3 30 SQ. FTS. TERRACE SOLD WITH THE FLAT NO.1403 IN B-WING WAS A COMMON AREA IN THE APPROVED PLAN AND THIS FACT HAS NOT BEEN CONTROVERTED. IN THIS VIEW OF THE SITUATION, TAKING INTO ACCOUNT THE DEFINITION OF BUILT UP AREA AS GIVEN I N SECTION 80 IB (14)(A) THE COMMON AREA ARE TO BE EXCLUDED AND GRANT OF DEDUCTI ON HAS TO BE VIEWED AS ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 15 PER PROVISIONS OF LAW. MOREOVER, IT HAS BEEN HELD BY LD. CIT(A) THAT IN ANY CASE, IF PROJECT UNDERTAKEN BY THE ASSESSEE HAS FU LFILLED THE CONDITIONS LAID DOWN IN SECTION 80 IB (10), THEN ENTIRE PROFITS FRO M THE HOUSING PROJECT WILL BE ENTITLED FOR DEDUCTION UNDER SECTION 80 IB(10) O F THE ACT AND IF ANY EXTRA PROFIT IS ASSESSED FROM THE HOUSING PROJECT THE SAM E WILL HAVE NO TAX IMPACT AS ENTIRE PROFIT IS ELIGIBLE FOR DEDUCTION UNDER SE CTION 80 IB(10). KEEPING IN VIEW ALL THESE FACTS AND THE LAW RELIED UPON BY LD. A.R, WE ARE OF THE OPINION THAT THERE IS NO INFIRMITY IN THE ORDER PASSED BY LD. CIT(A). WE DECLINE TO INTERFERE AND THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 10. IN THE RESULT, ALL THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TH E 21 ST DAY OF NOV. 2012 SD/- SD/- (RAJENDRA ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 21 ST NOV. 2012. COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R I BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO.2765/MUM/2009(A.Y. 2005-06) ITA NO.5520/MUM/2009(A.Y. 2006-07) ITA NO.5521/MUM/2009(A.Y. 2007-08) 16 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 15/11/2012 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 19/11/2012 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER