KAMDHENU BUILDERS & DEVELOPERS, NAVI MUMBAI V. ADDL CIT 15(3), MUMBAI

ITA 6622/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70771 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-07-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 31-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURINDER JIT SINGH
• Assessee Lawyers: SUBODH RATNAPARKHI; SUNIL U PATH AK
• Keywords: Question of law
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 M/S. KAMDHENU BUILDERS & DEVELOPERS 20, 2 ND FLOOR, SHANTI CENTRE, SECTOR -17, VASHI, NAVI MUMBAI 400705 PAN: AAHFK 0461 E VS. ADDL CIT 15(3) MATRU MANDIR, 1 ST FLOOR, GRANT ROAD MUMBAI 400 007 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SUNIL U. PATH AK & SHRI SUBODH RATNAPARKHI REVENUE BY : SHRI SURINDER JIT SINGH DATE OF HEARING : 03 /07/ 2013 DATE OF PRONOUNCEMENT : 14 / 08 /2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS IS AN APPEAL AGAINST THE ORDER OF CIT(A)-26, MUMBAI DATED 03.08.2012 FOR ASSESSMENT YEAR 2009-10. THE ISSUE IN THIS APPEAL IS WHETHER ASSESSEE IS ENTITLED FOR THE DEDUCTION U/S 80IB(10) ON THE HOUSING PROJECT 2. BRIEFLY STATED, THE ASSESSEE FIRM HAD ACQUIRED DEVELOPMENT RIGHTS FROM CENTURION BANK LTD. FOR DEVELOPMENT OF PLOT NO . 37, SECTOR 5, KHARGHAR, NAVI MUMBAI UNDER TRIPARTITE AGREEMENT DT . 31.03.2005 BETWEEN CIDCO, CENTURION BANK LTD. & THE ASSESSEE. THE TOTAL PLOT OF ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 2 LAND ADMEASURES 4949.74 SQ. MTRS. THE SAID PLOT OF LAND WAS ACQUIRED BY CENTURION BANK LTD. FROM CIDCO UNDER AGREEMENT FOR LEASE DT. 31.01.96. AS PER THE SAID AGREEMENT TO LEASE DT. 31 .01.96, THE PLOT WAS GRANTED FOR ONLY RESIDENTIAL USE. THE COMMENCEMENT CERTIFICATE IN RESPECT OF THE RESIDENTIAL BUILDING WAS GRANTED ON 20.02.20 06 BY CIDCO LTD. THE SAID COMMENCEMENT CERTIFICATE DOES NOT CONTAIN ANY APPROVAL FOR THE CONSTRUCTION OF COMMERCIAL ESTABLISHMENTS. SUBSEQUE NTLY, DUE TO THE PECULIAR LOCATION OF PLOT NO. 37, SECTOR 5, KHARGHA R, NAVI MUMBAI, THE ASSESSEE BECAME ENTITLED FOR ADDITIONAL FSI ON PAYM ENT OF CERTAIN PREMIUM. ACCORDINGLY, APART FORM THE RESIDENTIAL BU ILDING ALREADY SANCTIONED, A SEPARATE COMMERCIAL BUILDING HAVING B UILT UP AREA OF 745.214 SQ.MTRS WAS APPROVED FOR CONSTRUCTION BY CI DCO ON 18.10.2006 AS THE ASSESSEE DID NOT INTEND TO DEVELOP THE BUILD ING HAVING COMMERCIAL ESTABLISHMENT, THE DEVELOPMENT RIGHT IN RESPECT OF THE SAID COMMERCIAL BUILDING WAS SOLD BY THE ASSESSEE TO M/S PYRAMID DE VELOPERS UNDER REGISTERED DEVELOPMENT AGREEMENT DT. 20.03.2009 FOR THE CONSIDERATION OF RS. 2,51,00,000/-. THE PROFIT FROM SALE OF DEVELOPM ENT RIGHTS FELL IN ASST. YR. 2009-10 I.E. THE PREVIOUS YEAR RELEVANT TO THE YEAR UNDER APPEAL AND ACCORDINGLY THE PROFIT ON SALE OF SUCH DEVELOPMENT RIGHTS AMOUNTING TO RS. 1,74,30,346/- WAS OFFERED TO TAX IN A.Y. 2009-1 0. THE SAME HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. 2.1 THE POSITION OF SANCTION/COMPLETION OF THE TWO SEPA RATE BUILDINGS ARE AS PER DETAILS AS UNDER. BUILDING PARTICULARS DATE OF COMMENCE MENT CERTIFICATE DATE OF OCCUPATION CERTIFICATE PLOT AREA BUILT UP AREA RESIDENTIAL BUILDING- STILT + 17 FLOORS- EDEN GARDEN 20.02.2006 16.1 0 .2008 4452.93 SQ. MTRS 6675.538 SQ MTRS ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 3 DEVELOPED BY APPELLANT. COMMERCIAL BUILDING DEVELOPED BY M/S. PYRAMID DEVELOPERS 18.10.2006 04.08.2010 496.8 1 SQ MTRS 745.219 SQ MTRS 2.2 IT WAS SUBMITTED THAT THE CLAIM FOR DEDUCTION U /S 80IB (10) HAS BEEN ALLOWED IN THE EARLIER ASST. YEARS AS PER DETA ILS AS UNDER: (I) ASSESSMENT FOR A.Y. 2008-09 FRAMED U/S 143(3) O N 28.12.2010 WHERE UNDER THE CLAIM FOR DEDUCTION U/S 80IB(10) HA S BEEN UPHELD BY THE LD AO AFTER EXAMINATION OF THE FACTS OF THE CAS E INCLUDING THE SALE OF COMMERCIAL BUILDING AREA TO M/S. PYRAMID DEVELOPERS . (II) APPEAL ORDER FOR A.Y. 2007-08 BEING ORDER NO. CIT (A)-26/IT- 95/DCIT 15(3)/09-10 DT. 23.07.2010 WHEREIN THE HON. CIT(A) 26 HAS UPHELD THE CLAIM OF YOUR APPELLANT FOR DEDUCTION U/ S 80IB (10) IN RESPECT OF THE HOUSING PROJECT EDEN GARDEN. (HOWEVER, THE I SSUE OF COMMERCIAL DEVELOPMENT IS NOT DISCUSSED IN THE SAID APPEAL ORD ER.) 2.3 THE AO DISALLOWED THE CLAIM U/S. 80IB IN TH IS YEAR ON THE REASON THAT THE HOUSING PROJECT IS SAME IN WHICH THE COMM ERCIAL AREA EXCEEDED 2000 SQ FT OR 5% OF BUILT UP AREA WHICHEVER IS LESS , WHEREAS THE ASSESSEE CONTENDS THAT THE COMMERCIAL PORTION IS NOT PART OF THE PROJECT AND ALSO IT WAS NOT DEVELOPED BY IT. IT RELIED ON VARIOUS CA SE LAW AS UNDER:- (I) CIT VS. VANDANA PROPERTIES (19 TAXMANN.COM 316(BOM. )(2012); (II) VISWAS PROMOTERS (P) LTD. VS. ACIT (29 TAXMANN.COM1 9 (MAD.) (2013); (III)DCIT, VS. M/S. NEEL SIDHI ENTERPRISES (ITA NO. 1761, 1762 & 1763/MUM/2010 DATED 30.03.2012); ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 4 (IV) EKTA SANKALP DEVELOPERS VS. ADDL.CIT(ITA NO.33276/M UM/2010 DATED 28.09.2012); (V) SAROJ SALES ORGANISATION VS. INCOME TAX OFFICER (11 5 TTJ (MUM) 485 (2008) AND (VI) MUDHIT M. GUPTA VS. ACIT (ITA NOS.3220, 3445 & 3444/MUM/2010 DATED 23.12.2010. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS DID NO T AGREE AND AFFIRMED AOS ORDER. HENCE THE PRESENT APPEAL. 3. THE ASSESSEE RAISED FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS. 21,47,31,259/- MADE BY THE LD. AO BY DISALLOWING TH E DEDUCTION U/S 80IB(10) BY HOLDING THAT COMMERCIAL ESTABLISHME NTS EXCEEDING THE AREA PRESCRIBED UNDER CLAUSE (D) OF SECTION 80I B (10) WERE PART OF THE HOUSING PROJECT DEVELOPED BY THE APPELLANT AT K HARGHAR, NAVI MUMBAI. 2. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THA T THE HOUSING PROJECT DEVELOPED BY THE APPELLANT IN THE NAME OF E DEN GARDEN AT KHARGHAR, NAVI MUMBAI COMPRISED OF ONLY RESIDENTIAL UNITS AND THEREFORE DEDUCTION U/S 80IB (10) AMOUNTING TO RS. 21,47,31,259/- WAS ALLOWABLE. 3. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE APP ELLANT HAD INTENTIONALLY CIRCUMVENTED THE PROVISIONS OF CLAUSE (D) OF SECTION 80IB(10) WHEN IN REALITY THIS WAS NOT THE CASE. 4. THE LEARNED CIT(A) ERRED IN UPHOLDING THE DISALL OWANCE OF DEDUCTION U/S 80IB(10) AMOUNTING TO RS. 21,47,31,25 9/- IN RESPECT OF THE RESIDENTIAL HOUSING PROJECT EDEN GARDEN AT KHARGHAR, NAVI MUMBAI. 4. WE HAVE HEARD LD. COUNSEL FOR ASSESSEE AND LD. DR AND PERUSED THE PAPER BOOK PLACED ON RECORD. THERE IS NO DISPUT E WITH THE REFERENCE TO THE FACTS AS STATED ABOVE AND ALSO TO THE FACT T HAT ASSESSING OFFICER ALLOWED DEDUCTION U/S 80IB IN EARLIER TWO YEARS TO THE ASSESSEE ON THE SAME PROJECT. THE DISPUTE THEREFORE CONFINES TO THE ISSUE WHETHER THE ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 5 PROJECT DEVELOPED BY THE ASSESSEE INCLUDES THE CO MMERCIAL PROJECT, LATER APPROVED BY CIDCO ON THE SAID PLOT OF LAND. 5. HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VANDANA PROPERTIES 19. TAXMAN.COM 316 (BOM)/ 206 TAXMANN 58 4( BOM) CONSIDERED THE ISSUE OF HOUSING PROJECT AND HELD AS: FACTS THE ASSESSEE-FIRM HAD CONSTRUCTED BUILDINGS A, B , C AND D ON A PLOT ADMEASURING 2.36 ACRES. PURSUANT TO AN ORDER P ASSED BY THE STATE GOVERNMENT PERMITTING CONVERSION OF THE STATUS OF T HE LAND, THE ASSESSEE- FIRM SUBMITTED BUILDING PLAN FOR CONSTRUCTION OF BU ILDING E WITH SEVERAL RESIDENTIAL UNITS. BY INTIMATION DATED 11.10.2002, THE BUILDING PLAN FOR BUILDING E WAS APPROVED BY THE MUNICIPAL CORPORAT ION. IN ITS RETURN OF INCOME, THE ASSESSEE ESTIMATED ITS PROFITS FROM BUI LDING E BY FOLLOWING THE WORK-IN-PROGRESS METHOD OF ACCOUNTING AND CLAIM ED DEDUCTION UNDER SECTION 80IB FOR BUILDING E. HOWEVER, THE ASSESSI NG OFFICER A, B, C AND D CONSTRUCTION OF WHICH COMMENCED FROM 09.06.1993. HE DENIED DEDUCTION ON GROUND THAT THE PROJECT COMMENCED PRIOR TO 1.10. 1998; IF THE PLOT WAS PROPORTIONATELY DIVIDED BETWEEN FIVE BUILDINGS, THE LAND PERTAINING TO BUILDING E WOULD BE LESS THAN ONE ACRE AND THAT TWO FLATS ON THE GROUND FLOOR OF BUILDING E WERE FOUND TO BE MERGED INTO ONE FLAT AND THE AREA OF THE MERGED FLAT EXCEEDED 1000 SQUARE FEET. ON APPEA L, THE COMMISSIONER (APPEALS) UPHELD THE DISALLOWANCE. HOWEVER, THE TRI BUNAL HELD THAT ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 80 IB(10) ON FURTHER APPEAL BY THE REVENUE: HELD WHETHER CONSTRUCTION OF BUILDING E CONSTITUTES A HOUSING PROJECT UNDER SECTION 80IB (10). THE EXPRESSION HOUSING PROJECT IS NEITHER DEFINED UNDER SECTION 2 OF THE ACT NOR UNDER SECTION 80-IB(10). EVEN UNDER THE MUM BAI MUNICIPAL CORPORATION ACT, 1988 AS ALSO UNDER THE DEVELOPMENT CONTROL REGULATIONS FOR GREATER MUMBAI, 1991, THE EXPRESSION HOUSING P ROJECT IS NOT DEFINED. THEREFORE, THE EXPRESSION HOUSING PROJECT IN SECT ION 80-IB(10) WOULD HAVE TO BE CONSTRUED AS COMMONLY UNDERSTOOD. THE EXPRESSION HOUSING PROJECT IN COMMON PARLANCE WOULD MEAN CONSTRUCTING A BUILDING OR GROUP OF BUILDINGS CONSI STING OF SEVERAL RESIDENTIAL UNITS. IN FACT, THE EXPLANATION IN SEC TION 80-IB(10) SUPPORTS THE CONTENTION OF THE ASSESSEE THAT THE APPROVAL GRANTE D TO A BUILDING PLAN CONSTITUTES APPROVAL GRANTED TO A HOUSING PROJECT. THEREFORE, IT IS CLEAR THAT CONSTRUCTION OF EVEN ONE BUILDING WITH SEVERAL RESI DENTIAL UNITS OF THE SIZE NOT EXCEEDING 1000 SQUARE FEET WOULD CONSTITUTE A HOUSING PROJECT U UNDER SECTION 80-IB(10). ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 6 WHETHER CONSTRUCTION OF BUILDING E IS AN INDEPEND ENT HOUSING PROJECT OR EXTENSION OF HOUSING PROJECT ALREADY EXI STING ON PLOT IN QUESTION. WHEN THE PLANS FOR A, B, C AND D BUILDINGS WERE APP ROVED DURING THE PERIOD FROM 1993 TO 1996, CONSTRUCTION OF BUILDING E WAS NOT EVEN CONTEMPLATED ON THE PLOT IN QUESTION. IT IS ONLY IN THE YEAR 2001 WHEN THE STATUS OF THE LAND WAS CONVERTED FROM SURPLUS VAC ANT LAND INTO WITHIN THE CEILING LIMIT LAND BY THE STATE GOVERNMENT THA T AN ADDITIONAL BUILDING COULD BE CONSTRUCTED ON THE PLOT IN QUESTION AND, A CCORDINGLY, BUILDING PLAN FOR CONSTRUCTION OF BUILDING E WAS SUBMITTED AND THE SAME WAS APPROVED BY THE LOCAL AUTHORITY ON 11.10.2002. THE FACT THAT THE LOCAL AUTHORITY, NAMELY, THE MUNI CIPAL CORPORATION APPROVED THE BUILDING PLAN FOR BUILDING E ON THE CONDITION THAT ALL THE OBJECTIONS RAISED IN THE INTIMATION DATED 12.05.199 3 RELATING TO THE EARLIER HOUSING PROJECT ON THE SAME PLOT OF LAND WOULD BE A PPLICABLE AND SHOULD BE COMPLIED WITH, CANNOT BE A GROUND TO HOLD THAT B UILDING E IS EXTENSION OF THE EARLIER HOUSING PROJECT BECAUSE THE EARLIER HOUSING PROJECT WAS COMPLETED PRIOR TO 1.10.1998 AND THE HOUSING PROJEC T FOR CONSTRUCTION OF BUILDING E WAS APPROVED FOR THE FIRST TIME ON 11. 10.2002. NOWHERE IN THE INTIMATION DATED 11.10.2002 IT IS STATED THAT BUILD ING E CONSTITUTES EXTENSION OF THE EARLIER HOUSING PROJECT WHICH IS A LREADY COMPLETED. FROM THE FACT THAT THE OBJECTIONS RAISED WHILE APPROVING THE EARLIER HOUSING PROJECT ON THE SAME PLOT OF LAND WERE MADE APPLICAB LE TO THE HOUSING PROJECT IN QUESTION, IT CANNOT BE INFERRED THAT THE HOUSING PROJECT IN QUESTION CONSTITUTES EXTENSION OF THE EARLIER HOUSI NG PROJECT. THEREFORE,, IN THE FACTS OF THE PRESET CASE, WHERE, NEITHER THE AS SESSEE HAD SOUGHT APPROVAL OF THE BUILDING PLAN FOR CONSTRUCTION OF B UILDING E AS EXTENSION OF THE EARLIER HOUSING PROJECT, NOR THE MUNICIPAL CORP ORATION HAD GRANTED APPROVAL FOR THE SAID PROJECT AS EXTENSION OF EARLI ER HOUSING PROJECT, IT IS NOT OPEN TO THE INCOME TAX AUTHORITIES TO CONTEND THAT APPROVAL GRANTED ON 11.10.2002 CONSTITUTED EXTENSION OF THE HOUSING PRO JECT WHICH WAS APPROVED IN THE YEAR 1993. RELIANCE PLACED BY THE REVENUE ON THE EXPLANATION T O SECTION 80IB(10)(A) WHICH WAS INTRODUCED WITH EFFECT FROM 1.4.2005 IS ALSO MISPLACED. WHAT THE SAID EXPLANATION CONTEMPLATES IS THAT WHERE THE APPROVAL IN RESPECT OF A HOUSING PROJECT IS GRANTED MORE THAN ONCE, THEN T HAT HOUSING PROJECT SHALL BE DEEMED TOHAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY T HE LOCAL AUTHORITY. FOR EXAMPLE, IN RESPECT OF A HOUSING PROJECT, THE ASSES SEE MAY SEEK AMENDMENT OF THE BUILDING PLAT AT SEVERAL STAGES OF THE CONSTRUCTION AND THE SAME MAY BE APPROVED. IN SUCH A CASE, THE EXPLA NATION PROVIDES THAT FOR THE PURPOSES OF SECTION 80IB(10) OF THE HOUSI NG PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH T HE FIRST APPROVAL WAS GRANTED BY THE LOCAL AUTHORITY. THUS, THE EXPLA NATION TO SECTION 80IB(10) (A) REFERS TO THE APPROVAL GRANTED TO THE SAME HOUSING PROJECT MORE THAN ONCE AND THE SAID EXPLANATION WOULD NOT A PPLY WHERE THE APPROVAL IS GRANTED TO DIFFERENT HOUSING PROJECTS. IN THE PRESENT CASE, CONSTRUCTION OF BUILDING E CONSTITUTES AN INDEPEN DENT HOUSING PROJECT AND, THEREFORE, THE DATE ON WHICH THE EARLIER HOUSI NG PROJECT HAD COMMENCED CONSTRUCTION COULD NOT BE APPLIED TO THE HOUSING PROJECT ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 7 CONSISTING OF BUILDING E MERELY BECAUSE THE CONDI TIONS SET OUT WHILE GRANTING APPROVAL TO THE EARLIER HOUSING PROJECT HA VE ALSO BEEN MADE APPLICABLE TO THE HOUSING PROJECT IN QUESTION. EXPRESSION PLOT OF LAND IN SECTION 80IB(10)(B) DO ES NOT MEAN VACANT PLOT OF LAND. THE REVENUE CONTENDED THAT THERE ARE FIVE BUILDINGS (A, B, C, D AND E) ON A PLOT ADMEASURING 2.36 ACRES; HENCE, THE PROPORTIONA TE AREA FOR EACH BUILDING WOULD BE LESS THAN ONE ACRE AND, THEREFORE , THE BENEFIT OF SECTION 80IB(10) COULD NOT BE GRANTED IN RESPECT OF THE HOU SING PROJECT CONSISTING OF BUILDING E. (PARA 23) SECTION 80IB(10) (B) SPECIFIES THE SIZE OF THE PLOT OF LAND BUT NOT THE SIZE OF THE HOUSING PROJECT. THE SIZE OF THE PLOT OF LAND, AS PER SECTION 80IB(10) MUST HAVE MINIMUM AREA OF ONE ACRE. THE SECTION DOE S NOT LAY DOWN THAT THE PLOT HAVING MINIMUM AREA OF ONE ACRE MUST BE A VACANT PLOT. (PARA 24) THE OBJECT OF SECTION 80IB(10) IN GRANTING DEDUCTIO N EQUAL TO ONE HUNDRED PER CENT OF THE PROFITS OF AN UNDERTAKING ARISING F ROM DEVELOPING AND CONSTRUCTING A HOUSING PROJECT IS WITH A VIEW TO BO OST THE STOCK OF HOUSES FOR LOWER AND MIDDLE INCOME GROUPS SUBJECT TO FULFI LLING THE SPECIFIED CONDITIONS. THE FACT THAT THE MAXIMUM SIZE OF THE R ESIDENTIAL UNIT IN A HOUSING PROJECT SITUATED WITHIN CITY OF MUMBAI AND DELHI IS RESTRICTED TO 1000 SQUARE FEET CLEARLY SHOWS THAT THE INTENTION O F THE LEGISLATURE IS TO MAKE AVAILABLE LARGE NUMBER OF MEDIUM SIZE RESIDENT IAL UNITS FOR THE BENEFIT OF THE COMMON MAN. HOWEVER, IN ABSENCE OF D EFINING THE EXPRESSION HOUSING PROJECT AND IN THE ABSENCE OF SPECIFYING THE SIZE OR THE NUMBER OF HOUSING PROJECT REQUIRED TO BE CONSTR UCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE, EVEN ONE HOUSING P ROJECT CONTAINING MULTIPLE RESIDENTIAL UNITS OF A SIZE NOT EXCEEDING 1000 SQUARE FEET CONSTRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA O F ONE ACRE WOULD BE ELIGIBLE FOR SECTION 80IB(10) DEDUCTION. IF THE CON STRUCTION OF SECTION 80IB(10) PUT FORTH BY THE REVENUE IS ACCEPTED, IT W OULD MEAN THAT IF ON A VACANT PLOT OF LAND, ONE HOUSING PROJECT FULFILLING ALL CONDITION IT UNDERTAKEN, THEN DEDUCTION WOULD BE AVAILABLE TO TH AT HOUSING PROJECT AND IF THEREAFTER SEVERAL OTHER HOUSING PROJECTS ARE UN DERTAKEN ON THE VERY SAME PLOT OF LAND, THE DEDUCTION WOULD NOT BE AVAIL ABLE TO THOSE HOUSING PROJECTS AS THE PLOT CEASES TO BE A VACANT PLOT AFT ER THE CONSTRUCTION OF THE FIRST HOUSING PROJECT. SUCH A CONSTRUCTION, IF ACCE PTED WOULD DEFEAT THE OBJECT WITH WHICH SECTION 80IB(10) WAS ENACTED.(P ARA 26) MOREOVER, PLAIN READING OF SECTION 80IB(10) DOES N OT EVEN REMOTELY SUGGEST THAT THE PLOT OF LAND HAVING MINIMUM AREA O F ONE ACRE MUST BE VACANT. THE SAID SECTION ALLOWS DEDUCTION TO A HOUS ING PROJECT (SUBJECT TO FULFILLING ALL OTHER CONDITIONS) CONSTRUCTED ON A P LOT OF LAND HAVING MINIMUM ARE OF ONE ACRE AND IT IS IMMATERIAL AS TO WHETHER ANY OTHER HOUSING PROJECTS ARE EXISTING ON THE SAID PLOT OF LAND OR N OT. IN THESE CIRCUMSTANCES, CONSTRUING THE PREVIOUS OF SECTION 80IB(10) BY ADD ING WORDS TO THE STATUTE IS WHOLLY UNWARRANTED AND SUCH A CONSTRUCTION WHICH DEFEATS THE OBJECT WITH WHICH THE SECTION WAS ENACTED MUST BE REJECTED . (PARA 7) APART FROM THE ABOVE, THE CBDT BY ITS LETTER TO MAH ARASHTRA CHAMBER OF HOUSING INDUSTRY STATED THAT FOR THE PURPOSES OF SE CTION 80IB(10) IT IS NOT ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 8 THE MANDATE OF THE SECTION THAT THE HOUSING PROJECT MUST BE ON A VACANT PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE AND TH AT WHERE A NEW HOUSING PROJECT IS CONSTRUCTED ON A PLOT OF LAND HA VING MINIMUM AREA OF ONE ACRE BUT WITH EXISTING HOUSING PROJECTS, IT WOU LD QUALIFY FOR SECTION 80IB(10) DEDUCTION. EVEN OTHERWISE, THE ARGUMENT OF THE REVENUE DOES NOT STAND TO REASON BECAUSE, IN THE CITY OF MUMBAI WHER E THERE IS ACUTE SPACE CRUNCH, IT IS DIFFICULT TO FIND A VACANT PLOT HAVIN G MINIMUM AREA OF ONE ACRE AND EVEN IF FEW SUCH PLOTS ARE EXISTING IT CANNOT B E SAID THAT SECTION 80IB(10) DEDUCTION WAS INTENDED TO GIVE BENEFIT ONL Y TO THE UNDERTAKINGS WHO CONSTRUCT HOUSING PROJECTS ON THOSE FEW PLOTS. THEREFORE, IT IS CLEAR THAT ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE A CRE, THERE CAN BE ANY NUMBER OF HOUSING PROJECTS AND SO LONG AS THOSE HOU SING PROJECTS ARE APPROVED BY THE LOCAL AUTHORITY AND FULFIL CONDITIO NS SET OUT UNDER SECTION 80IB(10), DEDUCTION THEREUNDER CANNOT BE DENIED TO ALL THOSE HOUSING PROJECTS. SECTION 80IB(10) WHILE SPECIFYING THE SIZ E OF PLOT OF THE LAND, DOES NOT SPECIFY THE SIZE OR THE NUMBER OF HOUSING PROJE CTS THAT ARE REQUIRED TO BE UNDERTAKEN ON A PLOT HAVING MINIMUM AREA OF ONE ACRE. AS A RESULT, UNDER SECTION 80IB(10) THERE IS SIGNIFICANCE OF TH E SIZE OF THE PLOT OF LAND AND, THEREFORE, THE ASSESSEE SUBJECT TO FULFILLING SOME CONDITIONS BECOMES ENTITLED TO SECTION 80IB(10) DEDUCTION ON CONSTRUC TION OF A HOUSING PROJECT ON A PLOT HAVING AREA OF ONE ACRE, IRRESPECTIVE OF THE FACT THAT THERE EXIST OTHER HOUSING PROJECTS OR NOT. IN THESE CIRCUMSTANC ES, THE DECISION OF THE TRIBUNAL IN REJECTING THE CONTENTION OF THE REVENUE REGARDING THE SIZE OF THE PLOT CANNOT BE FAULTED. (PARA 29) FURTHER THE TRIBUNAL ON APPRECIATION OF THE FACTS A RRIVED AT THE CONCLUSION THAT THERE WAS NO MERGER OF FLATS AND IN FACT BOTH THE FLATS IN QUESTION WERE NEITHER SOLD NOR ANY APPLICATION WAS MADE BEFORE TH E LOCAL AUTHORITY SEEKING MERGER OF SAME AND, THUS, NO FAULT CAN BE F OUND WITH THE DECISION OF THE TRIBUNAL IN REJECTING THE ARGUMENT OF THE RE VENUE RELATING TO THE MERGER OF THE FLATS. (PARA 30) 6. CO-ORDINATE BENCH IN THE CASE OF DCIT VS. NEEL SIDHI ENTERPRISES IN 1761-1763/M/2010 DATED 30.3.2012 CONSIDERED SIMILA R ISSUE AND HELD: 3.1 THE APPELLANT WAS ALLOTTED A PLOT OF LAND ADME ASURING 7770 SQ. MTRS FROM CIDCO LTD. AT VASHI, MUMBAI FOR THE PURPO SE OF DEVELOPING RESIDENTIAL AND COMMERCIAL UNITS. OUT OF THIS PORT ION, A PLOT ADMEASURING 777 SQ. MTRS (I.E. 10%) WHICH WAS MEANT EXCLUSIVELY FOR COMMERCIAL UNIT WAS SOLD TO AN ANOTHER FIRM M/S. THAKKAR ENTERPRIS ES. THE ORIGINAL PROJECT WAS APPROVED AS RESIDENTIAL-CUM-COMMERCIAL PROJECT, HOWEVER THE DEVELOPMENT RIGHTS IN RESPECT OF COMMERCIAL UNIT I. E. 777 SQ. MTRS. WAS SOLD OFF TO THE AFORESAID CONCERN. THE ASSESSING O FFICER CAME TO THE CONCLUSION THAT THE ASSESSEE HAS DELIBERATELY SOLD OFF THIS PIECE OF PLOT TO ENTITLED ITSELF TO THE BENEFITS OF DEDUCTION U/S.80 IB(10). IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT AS P ER THE REQUIREMENT OF LOCAL AUTHORITY I.E. NAVI MUMBAI MUNICIPAL CORPORAT ION (NMMC), 10% OF THE TOTAL AREA OF 777 SQ. MTR WAS COMPULSORY REQUIR ED TO BE DEVELOPED AS ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 9 COMMERCIAL AREA. ACCORDINGLY, THE DEVELOPMENT RIGH TS IN RESPECT OF THE 777 SQ. MTR I.E. EXACTLY 10% WAS SOLD OFF TO M/S. THAK KAR ENTERPRISES THROUGH AN AGREEMENT FOR A CONSIDERATION OF `. 1,90,36,500/-. THE SAID SALE CONSIDERATION WAS A REALIZED AT THE MARKET RAT E AND THE SALE PROCEEDS HAVE BEEN DULY SHOWN AS INCOME IN THE INCOME TAX RETURN FILED FOR THE ASSESSMENT YEAR 2004-05. THE SAME HAS BEEN ACCEPTE D ALSO IN THE SCRUTINY ASSESSMENT COMPLETED U/S.143(3). 3.2 THE ASSESSING OFFICER REJECTED THE EXPLANATION OF THE APPELLANT ON THE GROUND THAT THE PROJECT HAD BEEN APPROVED AS CO MMERCIAL-CUM- RESIDENTIAL PROJECT HAVING TOTAL CONSTRUCTED AREA O F 1162.8 SQ. MTR INCLUDING 1165 SQ. MTR OF COMMERCIAL AREA. HE HELD THAT BOTH CONSTITUTED ONE SINGLE AND INTEGRATED PROJECT. THE COMMERCIAL AREA ALSO SLIGHTLY EXCEEDED BY 10% AND, THEREFORE, THE ASSESSEE FAILED TO FULFIL THE CONDITIONS LAID DOWN U/S.80IB(10). FOR COMING TO THIS CONCLUS ION, HE RELIED UPON THE DECISION PASSED IN THE CASE OF M/S. LAUKIK DEVELOPERS VS. DCIT PASSED BY ITAT, MUMBAI. 7.1 FROM THE RECORDS AND THE FINDINGS GIVEN BY THE CIT(APPEALS), IT IS AMPLY CLEAR THAT THE PLOT ADMEASURING 777 SQ. MTRS. WAS SOLD TO AN ANOTHER CONCERN M/S. THAKKER ENTERPRISES, WHEREI N THE DEVELOPMENT RIGHTS WERE GIVEN TO BUILT COMMERCIAL UNITS AS WAS REQUIRED TO BE DONE BY THE ASSESSEE IN TERMS OF ALLOTMENT GIVEN BY CIDCO L TD. ONCE THE ASSESSEE HAS TRANSFERRED THE DEVELOPMENT RIGHT TO A DIFFERENT CONCERN ON A SALE CONSIDERATION OF `. `.`. `. 1,90,36,500/- AND SAME HAS BEEN OFFERED FOR TAX IN THE ASSESSMENT YEAR 2004-05 , WE HAVE NO HESITATION IN HOLDING THAT THE SAID AREA OF 777 SQ. MTRS. HAS TO BE SEGREGATED FROM THE ENTIRE PLOT AREA OF 7770 SQ. MT RS FOR THE PURPOSE OF DEDUCTION U/S.80IB(10). FIRSTLY, NO CLAIM FOR DEDUCTION HAS BEEN MADE BY THE ASSESSEE ON THE INCOME FROM THIS C OMMERCIAL UNIT AND SECONDLY, IT HAS ALREADY BEEN TAXED. ONCE THE SAID COMMERCIAL UNIT WHICH WAS TO BE DEVELOPED BY M/S. THAKKER ENTERPRISES IS SEGREGATED, THEN THE BALANCE AREA LEFT FOR THE DEVELOPMENT IS PURELY A RESIDENTIAL UNIT, THEREFORE, THE ASSESSEE WOULD BE FULLY ENTITLED FOR CLAIMING DEDUCTION U/S.80IB(10) ON THE PROFITS DERIVED FROM SALE OF SU CH RESIDENTIAL UNITS. ONCE AGAIN IF THIS FACT HAS BEEN ACCEPTED, THEN THE RE WOULD BE NO DISPUTE THAT, THE PER UNIT AREA IN THE PROJECT WILL BE LES S THAN 1500 SQ. FT AND, THEREFORE, THE CONDITIONS OF SECTION 80IB(10)(C) GE TS FULFILLED. ON THIS ISSUE, THE DECISION OF ITAT MUMBAI BENCH IN THE CASE OF SAROJ SALES ORGANISATION VS. ITO (SUPRA) WOULD BE FULLY APPLICABLE IN THE CASE OF THE APPELLANT, WHEREIN IT HAS BEEN HELD THAT IF BOTH EL IGIBLE AND INELIGIBLE UNITS ARE CONSTRUCTED UNDER SINGLE SANCTION PLAN, THEN TH E INDEPENDENT UNITS OR BLOCKS WHICH ARE LESS THAN ELIGIBLE CRITERIA OF 100 0 SQ. FT. (HERE IN THIS CASE 1500 SQ. FT.), THEN THE OTHER INELIGIBLE UNITS/BLOC KS CANNOT BE INCLUDED FOR THE PURPOSE OF DENYING THE STATUTORY RELIEF TO WHIC H THE ASSESSEE IS ENTITLED FOR. THIS IS ALSO SUPPORTED BY ANOTHER DECISION OF ITAT MUMBAI BENCH IN THE CASE OF VANDANA PROPERTIES VS. ACIT REPORTED IN (2010) 128 TTJ (MUM) 89 , WHEREIN IT WAS HELD THAT THE CONCEPT OF HOUSING P ROJECT DOES NOT MEAN THAT THERE SHOULD BE A GROUP OF BUILDING AND O NLY THEN THE SAME WOULD BE CALLED AS HOUSING PROJECT AND IF THE PRO JECT CONTAINS ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 10 INDEPENDENT BUILDING, THEN EACH UNIT IN THE SAID BU ILDING HAS TO BE TAKEN INDEPENDENTLY. THUS FOLLOWING THE RATIO OF ABOVE D ECISIONS, WE HOLD THAT THE RESIDENTIAL UNIT AS HAS BEEN DEVELOPED BY THE A SSESSEE IS LESS THAN 1500 SQ.MTR, AS IT WILL NOT INCLUDE THE AREA EMBEDD ED FOR COMMERCIAL UNIT IN THE WHOLE OF THE PROJECT. 7.2 AS REGARDS, WHETHER THE HOUSING PROJECT WHICH H AS BEEN APPROVED BY THE LOCAL AUTHORITY AS RESIDENTIAL CUM COMMERCI AL PROJECT WOULD BE ENTITLED FOR DEDUCTION U/S.80IB(10). THIS ISSUE HA S NOW BEEN SETTLED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. BRAHMA ASSOCIATES & OTHERS VS. JCIT (SUPRA), WHEREIN THE DECISION OF SPECIAL BENCH HAS BEEN APPROVED PARTLY AFTER OBSERVING AND HOLDING AS UNDER :- 30. IN THE RESULT, THE QUESTIONS RAISED IN THE APP EAL ARE ANSWERED THUS : (A) UP TO MARCH 31, 2005 (SUBJECT TO FULFILLING OTH ER CONDITIONS), DEDUCTION UNDER SECTION 80-IB(10) IS ALLOWABLE TO H OUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RESIDENTIAL UNITS WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DEVELOPMENT CONTROL RULES/ REGULATIONS FRAMED BY THE RESPECTIVE LOCAL AUTHORITY. (B) IN SUCH A CASE, WHERE THE COMMERCIAL USER PERMI TTED BY THE LOCAL AUTHORITY IS WITHIN THE LIMITS PRESCRIBED UNDER THE DEVELOPMENT CONTROL RULES/REGULATION, THE DEDUCTION UNDER SECT ION 80-IB(10) UP TO MARCH 31, 2005 WOULD BE ALLOWABLE IRRESPECTIVE OF THE FACT THAT THE PROJECT IS APPROVED AS 'HOUSING PROJECT' OR 'R ESIDENTIAL PLUS COMMERCIAL'. (C) IN THE ABSENCE OF ANY PROVISIONS UNDER THE INCO ME-TAX ACT, THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT UP TO MA RCH 31, 2005 DEDUCTION UNDER SECTION 80-IB(10) WOULD BE ALLOWAB LE TO PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RESIDENTIAL BUILDING WITH COMMERCIAL USER UP TO 10 PER CENT. OF THE TOTAL BU ILT-UP AREA OF THE PLOT. (D) SINCE THE DEDUCTION UNDER SECTION 80-IB(10) IS ON THE PROFITS DERIVED FROM THE HOUSING PROJECTS APPROVED BY THE L OCAL AUTHORITY AS A WHOLE, THE TRIBUNAL WAS NOT JUSTIFIED IN RESTRIC TING THE SECTION 80- IB(10) DEDUCTION ONLY TO A PART OF THE PROJECT. HO WEVER, IN THE PRESENT CASE, SINCE THE ASSESSEE HAS ACCEPTED THE DECISION OF THE TRIBUNAL IN ALLOWING SECTION 80-IB(10) DEDUCTION T O A PART OF THE PROJECT, WE DO NOT DISTURB THE FINDINGS OF THE TRI BUNAL IN THAT BEHALF. (E) CLAUSE (D) INSERTED TO SECTION 80-IB(10) WITH E FFECT FROM APRIL 1, 2005 IS PROSPECTIVE AND NOT RETROSPECTIVE AND HENCE CANNOT BE APPLIED FOR THE PERIOD PRIOR TO APRIL 1, 2005. ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 11 THE FACTS IN THE ABOVE CASE ARE SIMILAR TO THE FACT S OF ASSESSEE CASE, IN THE SENSE, HERE ALSO ASSESEEE SOLD THE DEVELOPMENT RIGHTS TO ANOTHER CONCERN AND DEVELOPED ONLY RESIDENTIAL PROJECT AND OFFERED PROFITS FOR DEDUCTION. 7. IN THE CASE OF SAROJ SALES ORGANIZATION VS. ITO 115 TTJ485, THE FIRM M/S A.W.PEREIRA & ORS. WERE THE OWNERS OF CERT AIN PLOTS OF LAND AND M/S KENWOOD AGENCY PVT. LTD. ACQUIRED THE DEVELOPME NT RIGHTS OF THESE PLOTS OF LAND FROM THE SAID OWNERS. A BUILDING PLAN FOR CONSTRUCTION OF ELEVEN WINGS WAS MADE AND GOT SANCTIONED FROM THE M UNICIPAL AUTHORITIES. THE PRINCIPAL DEVELOPERS I.E. M/S KENW OOD AGENCY PVT. LTD., CONSTRUCTED TWO WINGS VIZ., A AND B OF THIS BUILDI NG AND GRANTED THE SUB-DEVELOPMENT RIGHTS FOR THE REMAINING NINE WINGS OF THE BUILDING TO THE ASSESSEE FIRM I.E. M/S SAROJ SALES ORGANISATION . AS PER THIS AGREEMENT, ASSESSEE FIRM WAS TO CONSTRUCT SIX WINGS OF THE AFORESAID BUILDING WHICH WERE NAMED AS NISARG. LATER ON ANO THER AGREEMENT WAS ENTERED INTO BY WHICH ASSESSEE WAS ENTITLED TO CONS TRUCT THREE MORE WINGS OF THE BUILDING WHICH WAS TO BE NAMED AS BRE EZY CORNER. THE ASSESSEE CLAIMED DEDUCTION U/S.80IB(10) IN RESPECT OF NISARG COMPLEX. THE CLAIM WAS REJECTED BY THE REVENUE AUTHORITIES O N THE BASIS THAT ONLY ONE BUILDING HAVING ELEVEN WINGS WAS APPROVED BY TH E MUNICIPAL AUTHORITIES AND, THEREFORE, CONSTRUCTION OF SIX WIN GS OF THE SAME BUILDING OF THE ASSESSEE COULD NOT BE TREATED AS A SEPARATE INDEPENDENT HOUSING PROJECT. MOREOVER, IF THREE WINGS CONSISTING OF BR EEZY CORNER WERE INCLUDED, SOME OF THE FLATS IN BREEZY CORNER WERE MORE THAN 1000 SQ.FT. AND, THEREFORE, ASSESSEE VIOLATED THE CONDITIONS PR ESCRIBED U/S.80IB(10). THE TRIBUNAL CONSIDERED THE ISSUE IN DETAIL AND OBS ERVED VIDE PARA 12 AS UNDER : 12. THERE IS NO DISPUTE THAT THE HOUSING PROJECT IN THE CASE OF NISARG IS APPROVED BEFORE 31ST MARCH, 2005. THE S UBSTITUTED SECTION EXTENDED THE BENEFIT OF 100 PER CENT DEDUCT ION OF INCOME ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 12 DERIVED FROM HOUSING PROJECTS APPROVED UPTO 31ST MA RCH, 2007 BUT SIMULTANEOUSLY IMPOSED A RESTRICTION ON THE AREA OF SHOPPING COMPLEX THAT IS PERMISSIBLE TO BE INCLUDED IN THE H OUSING PROJECT BY INSERTING THE SUB-S. 80-IB(10)(D) W.E.F. 1ST APRIL, 2005. THE LEGISLATURE NOWHERE PROVIDED THE DEFINITION OF A HO USING PROJECT EITHER IN THE SECTION OR ANYWHERE IN THE IT ACT. IS IT OPEN FOR THE REVENUE TO CONSIDER ALL THE HOUSING ACTIVITIES UNDE RTAKEN BY THE ASSESSEE AS ONE PROJECT OR DIFFERENT PROJECTS ? THE CONCISE OXFORD DICTIONARY (9TH EDITION) DEFINES A PROJECT AS ' A PLAN, A SCHEME, A PLANNED UNDERTAKING, A USUALLY LONG-TERM TASK UNDER TAKEN BY A STUDENT TO BE SUBMITTED FOR ASSESSMENT. THE COMMENC EMENT CERTIFICATES IN RESPECT OF BUILDING NO. 1 WERE RECE IVED BY THE PRINCIPAL DEVELOPER ON 7TH MARCH, 2001 AND 30TH MAR CH, 2001 RESPECTIVELY. BUT THE COMMENCEMENT CERTIFICATES FOR VARIOUS WINGS WERE APPROVED BY THE MUNICIPALITY AS PER THE DETAIL S GIVEN BELOW : WING-C ON 10.9.2001 WING-E ON 11.9.2001 WINGS-C, D, E, F & G ON 27.3.2002 WINGS-F & G ON 7.5.2002 WING-F1 ON 23.9.2003 ALL THE ABOVE WINGS ARE PART OF NISARG BLOCK AN D INDEPENDENTLY SATISFIES THE NECESSARY APPROVAL OF A HOUSING PROJE CT. IT REALLY MAKES NO DIFFERENCE WHETHER M/S CONWOOD AGENCIES HA D APPLIED FOR OR THE ASSESSEE HAD APPLIED TO THE MUNICIPAL CO RPORATION TO MAKE ANY DIFFERENCE IN DECIDING THE ASSESSEE S CL AIM FOR DEDUCTION UNDER S. 80-IB(10) OF THE ACT. IT MUST BE APPRECIAT ED THAT THE MAIN DEVELOPER WAS M/S CONWOOD AGENCIES (P) LTD. THE SAN CTION PLAN HAVE ONLY APPROVED THE CONSTRUCTION OF THE DWELLING UNITS OF LESS THAN 1,000 SQ. FT. IN ALL THE WINGS OF THE SAID PRO JECT. THERE IS NO DISPUTE THAT ALL THE FLATS IN THESE WINGS CONTAIN T HE ELIGIBLE UNITS. IT IS NOT OPEN TO THE REVENUE TO CONCLUDE THE NEXT PRO JECT AS PART OF THE EARLIER HOUSING PROJECT JUST TO DENY THE STATUTORY RELIEF WHICH THE ASSESSEE IS ENTITLED IN RESPECT OF THE ELIGIBLE HOU SING PROJECT. IN THAT WAY THE LEGISLATIVE INTENTION TO GIVE A RELIEF TO T HE ASSESSEE WHO ARE UNDERTAKING THE LOW HOUSING PROJECTS WILL GET DEFEA TED. BREEZY CORNER PROJECT WHICH WAS MEANT FOR HIGHER STRATA OF THE SOCIETY. THE ASSESSEE HAS SEGREGATED THE SAME AND IN NO WAY MIXED IN THESE PROJECTS EITHER IN THE DESIGN OR IN THE STRUC TURAL MANIPULATION OR IN THE PROVISION OF AMENITIES AND THE ASSESSEE H AS NOT CLAIMED ANY RELIEF IN RESPECT OF PROJECT WHICH ADMITTEDLY D OES NOT ADMIT THE TEST LAID DOWN UNDER S. 80-IB (10) OF THE ACT. IN O UR VIEW, COMBINING THESE TWO PROJECTS INTO ONE WILL LEAD TO A RESULT W HICH MANIFESTLY WILL BE UNJUST AND ABSURD AND DEFEAT THE VERY PROVI SIONS OF DEDUCTION SECTIONS. UNLESS THERE IS A CLEAR INTENTI ON OF THE LEGISLATURE THE REVENUE CANNOT BE PERMITTED TO DO S O. AFTER ALL THE ASSESSEE HAVE OBTAINED DIFFERENT COMMENCEMENT CERTI FICATES AND STARTED ON DIFFERENT PERIODS OF TIME. THEY ARE SEPA RATE BY TIME, SPACE AND STATUTORY APPROVALS AND EVEN IN DESIGNS, MAINTENANCE OF ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 13 SEPARATE BOOKS OF ACCOUNT. THE REVENUE, IN OUR VIEW , IS NOT RIGHT IN TREATING BOTH THE PROJECTS AS ONE AND INTEGRATED WI THOUT THE FACTS WARRANTING FOR SUCH CONCLUSION. IN IDENTICAL SITUAT ION IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), THE ASSESSEE WAS HAVING A HOUSING PROJECT WHICH CONSISTED OF 261 RESIDENTIAL UNITS AND THE INDIVIDUAL FLAT SIZE VARIED BETWEEN 8 00 SQ. FT. TO 3,000 SQ. FT. AND THE TOTAL BUILT-UP AREA OF THAT HOUSING PROJECT WAS 3,46,599 SQ. FT. THE SAID PROJECT CONTAINED 150 RES IDENTIAL UNITS WITH A BUILT-UP AREA OF INDIVIDUAL UNIT OF LESS THA N 1,500 SQ. FT. AGGREGATING TO 1,59,005 SQ. FT. THE REMAINING BUILT -UP AREA OF 1,87,593 SQ. FT. WAS CONSUMED BY OTHER RESIDENTIAL UNITS WHEREIN THE SIZE OF INDIVIDUAL UNIT EXCEEDED 1,500 SQ. FT. OF BUILT-UP AREA. THE AO ON THE BASIS OF THESE FACTS WAS OF THE VIEW THAT SINCE THE UNITS COMPRISED IN THE HOUSING PROJECT OF THE ASSES SEE WAS MORE THAN 1,500 SQ. FT., THE ASSESSEE S CLAIM FOR DEDU CTION UNDER S. 80- IB(10) WAS NOT ENTERTAINED. THE TRIBUNAL AFTER APPR ECIATING THE CLEAR PROVISIONS OF S. 80-IB(10), WHICH DOES NOT SPEAK RE GARDING SUCH DENIAL OF DEDUCTION IN CASE OF PROFIT FROM A HOUSIN G COMPLEX CONTAINING BOTH THE SMALL AND LARGE RESIDENTIAL UNI TS AND SINCE THE ASSESSEE HAS ONLY CLAIMED DEDUCTION ON ACCOUNT OF S MALLER QUALIFYING UNITS BY FULFILLING ALL THE CONDITIONS A S LAID DOWN UNDER S. 80-IB(10), THE DENIAL OF CLAIM BY THE ASSESSEE WAS HELD TO BE BASED ON NARROW AND RESTRICTED INTERPRETATION OF THE PROV ISIONS OF CL. (C) OF S. 80-1B(10) OF THE ACT. THEY DREW SUPPORT FROM THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD. VS. CIT (1992) 104 CTR (SC) 116 : (1992) 196 ITR 188 (SC), WHEREIN IT WAS HELD THAT PROVISIONS SHOULD BE INTERPRETED LIBERALL Y AND SINCE THE PRESENT CASE ALSO, THE ASSESSEE BY CLAIMING PRO RAT A INCOME ON QUALIFYING UNITS WHICH SATISFIED THE CONDITION LAID DOWN BY S. 80- IB(10), THE ASSESSEE S CLAIM SHOULD ACCEPTED. THI S ORDER OF THE TRIBUNAL WAS TAKEN UP IN APPEAL BEFORE THE KOLKATA HIGH COURT, THE KOLKATA HIGH COURT DISMISSED THE APPEAL ARISING FRO M THIS ORDER. THE RATIO LAID DOWN BY THIS TRIBUNAL ORDER, IN OUR VIEW, BASED ON THE SAME SET OF FACTS AS EXIST IN OUR PRESENT CASE ARE EQUALLY APPLICABLE AND THE ASSESSEE S CLAIM FOR DEDUCTION OF S. 80-IB(10) IN RESPECT OF THE ELIGIBLE UNITS OF THIS HOUSING PROJE CT IS THEREFORE, DESERVES TO BE ACCEPTED. 13. AS REGARDS THE OBJECTI ON OF THE AO THAT THE PERMISSIBLE SHOPPING AREA OF HOUSING PROJECT EX CEEDS 5 PER CENT, THE ASSESSEE IS NOT ENTITLED FOR RELIEF UNDER S. 80 -IB(10). WE ARE OF THE VIEW THAT THE HOUSING PROJECT WERE APPROVED BEF ORE 31ST MARCH, 2005 AND FOR SUCH PROJECT WHICH WERE SO APPROVED, T HERE WAS NO STIPULATION AS TO THE SHOPPING COMPLEX AREA IS PERM ISSIBLE IN THE PROJECT. AS ALREADY STATED EARLIER THAT THE AMENDME NTS WERE SUBSEQUENTLY MADE WHILE EXTENDING THE DEDUCTION OF INCOME FROM HOUSING PROJECT APPROVED UPTO 31ST MARCH, 2007, THE DENIAL OF DEDUCTION, IN OUR VIEW, IS CLEARLY NOT IN ACCORDANC E WITH LAW. 14. ONE OF THE OBJECTIONS OF THE AO IN HIS ASSESSMENT O RDER IS FAILURE OF THE ASSESSEE TO OBTAIN A COMPLETION CERTIFICATE IN RESPECT OF 6 WINGS IN THE BLOCK NISARG FROM WHICH IT HAS RETURNED THE INCOME IN THE ASST. YR. 2005-06. THE ASSESSEE HAS FILED COMPLETIO N CERTIFICATE ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 14 ISSUED BY THE LOCAL AUTHORITY IN RESPECT OF 3 WINGS VIZ. C, D AND E BEFORE SUBMISSION OF ITS RETURN AND FOR THE REST OF THE WINGS VIZ. F, F1 AND G, IT HAD APPLIED FOR SUCH CERTIFICATE ON 17 TH AUG., 2004, BUT THE SAME WAS NOT RECEIVED TILL DATE OF FILING OF TH E RETURN. IT WAS REPORTED IN THE COURSE OF HEARING BY THE LEARNED CO UNSEL FOR THE ASSESSEE THAT THE OCCUPATION CERTIFICATE IN RESPECT OF THE REMAINING WINGS I.E. F, F1 AND G HAS ALSO BEEN ISSUED BY THE MUNICIPAL AUTHORITIES ON 20TH DEC., 2006. COPIES OF SUCH CERT IFICATES ISSUED BY THE LOCAL AUTHORITIES HAVE BEEN PACED IN THE PAPER BOOK FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE. IT WAS EXPLAINED THAT SINCE THE HOUSING PROJECT IN THIS CASE HAS BEEN APPROVED BY T HE LOCAL AUTHORITIES BEFORE 1ST APRIL, 2004 AND THE CONSTRUC TION IS REQUIRED TO BE COMPLETED BEFORE 31ST MARCH, 2008. AS THE OCCUPA TION CERTIFICATE IN RESPECT OF THE WINGS F, F1 AND G HAVE BEEN ISSUE D ON 20TH DEC., 2006, I.E. PRIOR TO 31ST MARCH, 2008, THE CONDITION RELATING TO COMPLETION OF THE CONSTRUCTION AS PRESCRIBED IN S. 80-IB(10)(A) SHOULD ALSO BE TAKEN TO BE SATISFIED. 15. IN THE RESULT, T HE ASSESSEE S CLAIMS FOR DEDUCTION UNDER S. 80-IB(10) ARE ACCEPTE D AND THE APPEAL IS TO BE TREATED AS ALLOWED. THE AO IS DIRECTED TO ALLOW THE DEDUCTION AS CLAIMED BY THE ASSESSEE IN THE LIGHT O F THE ABOVE DISCUSSIONS. THUS, FROM THE ABOVE IT IS CLEAR THAT LEGISLATURE H AS NOT PROVIDED ANY DEFINITION OF THE HOUSING PROJECT AND, THEREFORE, T HE DEFINITION HAS TO BE CONSTRUED BY MAKING REFERENCE TO THE DICTIONARY AND AS LONG AS THE SEGREGATED BLOCKS ARE BEING ELIGIBLE FOR DEDUCTION U/S.80IB(10), THEN SAME SHALL BE CONSTRUED AS ELIGIBLE HOUSING PROJECT AND DEDUCTION HAS TO BE ALLOWED ACCORDINGLY. IN FACT, IN THIS DECISION T HE TRIBUNAL HAS REFERRED TO THE DECISION OF THE CALCUTTA BENCH OF THE TRIBUN AL IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VS. DCIT. IN THAT CASE THE ASSESSEE HAD UNDERTAKEN CONSTRUCTION OF A HOUSING P ROJECT EASTERN METROPOLITAN BYE-PASS, WHICH WAS ALSO KNOWN AS UDAYAN. THIS PROJECT, INTER ALIA, INCLUDED UDITA-III HOUSING PROJECT WHIC H WAS UNDER CONSTRUCTION DURING THE RELEVANT YEAR AND SUCH CONS TRUCTION WAS BEING MADE ON LAND MEASURING 4.2 ACRES. THE SAID HOUSING PROJECT CONSISTED OF 251 RESIDENTIAL UNITS AND THE INDIVIDUAL FLAT SIZE VARIED BETWEEN 800 SQ.FT. TO 3000 SQ.FT. THE ASSESSEE CLAIMED DEDUCTIO N U/S.80IB(10) ON THE PART OF THE PROJECT IN WHICH 150 RESIDENTIAL UNITS WERE CONSTRUCTED WHERE AREA WAS LESS THAN 1500 SQ.FT. THE DEDUCTION WAS DE NIED BY THE REVENUE ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 15 AUTHORITIES. IN APPEAL THE TRIBUNAL ALLOWED THE DED UCTION VIDE PARA 22 WHICH READS AS UNDER: 22. IT IS APPARENT FROM THE PERUSAL OF SECTION 80I B(10) THAT THE SECTION HAS BEEN ENACTED WITH A VIEW TO PROVIDE INC ENTIVE FOR BUSINESSMEN TO UNDERTAKEN CONSTRUCTION OF RESIDENTI AL ACCOMMODATION FOR SMALLER RESIDENTIAL UNITS AND THE DEDUCTION IS INTENDED TO BE RESTRICTED TO THE PROFIT DERIVED FRO M THE CONSTRUCTION OF SMALLER UNITS AND NOT FROM LARGER RESIDENTIAL UN ITS. THOUGH THE AO HAS DENIED THE CLAIM OF THE ASSESSEE OBSERVING T HAT LARGER UNITS WERE ALSO CONSTRUCTED BY THE ASSESSEE, AT THE SAME TIME, IT IS ALSO A FACT ON RECORD THAT THE ASSESSEE HAD CLAIMED DEDUCT ION ONLY ON ACCOUNT OF SMALLER RESIDENTIAL UNITS WHICH WERE FUL FILLING ALL THE CONDITIONS AS CONTAINED IN SECTION 80IB(10) AND THE SAME HAS NOT BEEN DISPUTED BY THE AO ALSO. WE HAVE ALSO NOTED DO WN THE FACT THAT EVEN THE PROVISION AS LAID DOWN IN SECTION.80I B(10) DOES NOT SPEAK REGARDING SUCH DENIAL OF DEDUCTION IN CASE OF PROFIT FROM A HOUSING COMPLEX CONTAINING BOTH THE SMALLER AND LAR GE RESIDENTIAL UNITS AND SINCE THE ASSESSEE HAS ONLY CLAIMED DEDUC TION ON ACCOUNT OF SMALLER QUALIFYING UNITS BY FULFILLING A LL THE CONDITIONS AS LAID DOWN UNDER SECTION 80IB(10), THE DENIAL OF CLA IM BY THE ASSESSEE IS ON ACCOUNT OF RATHER RESTRICTED AND NAR ROW INTERPRETATION OF PROVISIONS OF CLAUSE OF SECTION 80IB(1) WHILE COMING TO SUCH CONCLUSION, WE ALSO FIND SUPPORT FRO M THE ORDER OF THE HON'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMP O LTD. (SUPRA), WHEREIN IT WAS HELD THAT PROVISIONS SHOULD BE INTER PRETED LIBERALLY AND SINCE IN THE PRESENT CASE ALSO, THE ASSESSEE BY CLAIMING PRO- RATA INCOME ON QUALIFYING UNITS HAS COMPLIED WITH A LL THE PROVISIONS AS CONTAINED IN THE SAID SECTION, IN OUR CONSIDERED OPINION, SUCH CLAIM OF THE ASSESSEE WAS RIGHTLY ALLOWED BY THE LD . CIT[A] BY REVERSING THE ORDER OF AO. THIS MATTER WAS CARRIED BY THE REVENUE BEFORE THE H ONBLE CALCUTTA HIGH COURT WHICH WAS DISMISSED IN I.T.A.NO.458 OF 2 006 BY HOLDING THAT NO SUBSTANTIAL QUESTION OF LAW WAS INVOLVED. 8. CONSIDERING THE PRINCIPLES LAID DOWN ABOVE, AND IN HOST OF OTHER CASES, THE ISSUE BECOMES CLEAR THAT THERE IS NO DEF INITION OF HOUSING PROJECT IN THE PROVISIONS AND THERE CAN BE MORE THA N ONE APPROVAL FOR THE PROJECT AND EVEN IF THERE IS COMMON APPROVAL, ASSES SEE IS ENTITLED FOR DEDUCTION ON THE PROJECT UNDERTAKEN BY IT, PROVIDED THE PROJECT SATISFIES THE OTHER CONDITIONS. AS STATED EARLIER, ASSESSEE C ONSTRUCTED ONLY RESIDENTIAL BLOCK EDEN GARDEN WHICH WAS COMMENCED ON 30.2.2006 AND ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 16 COMPLETED ON 16.10.2008 AS PER THE DATE OF COMMENCE MENT CERTIFICATE AND OCCUPATION CERTIFICATE GRANTED BY THE AUTHORITY . THE COMMERCIAL PROJECT DEVELOPED BY M/S. PYRAMID DEVELOPERS, SANCT IONED BY CIDCO HAS COMMENCED ON 18.10.2006 BUT COMPLETED AFTER COMPLET ION OF THIS PROJECT, MUCH LATER ON 04.08.2010. EVEN AS SEEN FRO M THE PLANS THE PROJECT IS SEPARATE AND NOT CONTIGUOUS TO THE PART OF THE BUILDING DEVELOPED BY ASSESSEE. THE SAME IS ENTIRELY SEPARA TE BLOCK AND IN NO WAY CONNECTED TO THE ASSESSEE PROJECT, EXCEPT APPRO VED ON THE SAME PLOT OF LAND. MOREOVER, THE DEVELOPMENT RIGHTS WERE SOLD IN MARCH, 2009 AND OTHER PARTY DEVELOPED MUCH LATER. NOTHING WAS BROUG HT ON RECORD TO INDICATE THAT ASSESSEE DEVELOPED COMMERCIAL PROJECT AS WELL. THEREFORE, AS ASSESSEE HAS COMPLETED THE RESIDENTIAL PROJECT W HICH SATISFIES THE CONDITIONS, IT IS ELIGIBLE FOR DEDUCTION U/S 80IB( 10). IN FACT, THE AO AFTER SATISFYING THE CONDITIONS HAS IN FACT ALLOWED DEDUC TION IN A.Y. 2007-08 AND AY 2008-09 ON THE SAME PROJECT. THUS, WE ARE OF THE OPINION THAT THE AO AND LD.CIT(A) ERRED IN DISALLOWING THE CLAIM THIS YEAR ON THE REASON THAT COMMERCIAL PROJECT IS PART OF THE SAME HOUSING PROJECT AND THAT PORTION EXCEEDED THE 5% OR 2000 SQ FT WHICHEVE R IS LESS. WE HOLD THAT THE COMMERCIAL BUILDING IS A SEPARATE PROJECT AND ASSESSEE PROJECT SATISFIES THE CONDITIONS PRESCRIBED. WE DIRECT THE AO TO ALLOW THE DEDUCTION. THE GROUNDS ARE ALLOWED. 9. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST, 2013. SD/- SD/- (VIVEK VARMA ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 14/08/2013. JV. ITA NO. 6622/MUM/2012 ASSESSMENT YEAR: 2009-10 17 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR A BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.