Dy.Commissioner of Income Tax Central Circle-1, Vapi V. M/s. Nagjua Developers, SILVASSA

ITA 673/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1827 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 17-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Question of law
• Section: 80IB

Judgement Text

DCIT, CEN. CIRCLE 1, VAPI VS. NAGJUA DEVELOPERS /ITA NO.673/AHD/2016/A.Y. 2010-11 PAGE 1 OF 8 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A. NO.673/AHD/2016 / ASSESSMENT YEAR : 2010-11 THE D EPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, VAPI VS. M/S.NAGJUA DEVELOPERS, HAMLET, E-7, PARK CITY, OPP.YOGI HOSPITAL, AMLI, SILVASSA 396 230. [PAN: AAFFN 1449 R] APPELLANT /RESPONDENT /ASSESSEE BY SHRI HARDIK VORA A DVOCATE /REVENUE BY SHRI SREENIVAS T.BIDARI CIT - DR / DATE OF HEARING: 2 7 . 0 2 .201 9 /PRONOUNCEMENT ON: 28 .0 2 .2019 /O R D E R PER O.P.MEENA, AM: 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, SURAT(IN SHORT THE CIT (A)) DATED 07.01.2016 PERTAINING TO ASSESSMENT YEAR 2010-11. 2. THE SOLE GROUND RAISED BY THE REVENUE READ AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO IN RESPECT TO DISALLOWANCE OF DEDUCTION U/S.80IB(10) OF THE I.T.ACT, BY AMOUNTING TO RS.6,84,07,234/-, BY IGNORING THE FACTS THAT THE APPELLANTS HOUSING PROJECT HAS NOT FULFILLED THE CONDITIONS LAID DOWN IN SE.80IB(10)(C) I.E. AREA OF RESIDENTIAL UNITS OF ROW HOUSE WERE EXCEEDS 1500SQ. FEET AS ADMITTED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS ALTHOUGH ROW HOUSES ARE PART OF THE PROJECT. DCIT, CEN. CIRCLE 1, VAPI VS. NAGJUA DEVELOPERS /ITA NO.673/AHD/2016/A.Y. 2010-11 PAGE 2 OF 8 3. AT THE OUTSET, ON THE SOLE ISSUE HAS BEEN CHALLENGED BY THE REVENUE I.E. THE RELIEF GRANTED BY THE LD.CIT(A) HOLDING THAT THE AO HAS IN THE CURRENT ASSESSMENT YEAR NOT BROUGHT ANYTHING NEW AGAINST THE ASSESSEE AND THE CLAIM OF DEDUCTION U/S.80IB OF THE ACT. THEREFORE, THE AO IS DIRECTED TO ALLOW THE CLAIM OF DEDUCTION U/S.80IB OF THE ACT. 4. BEING AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL. THE LD.CIT-DR RELIED ON THE ORDER OF THE AO 5. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS IN COVERED BY THE DECISION OF ITAT SURAT IN ITA NOS.2666/AHD/2011 & 227/AHD/2013 DATED 03.08.2018. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE IS COVERED BY THE ORDER OF TRIBUNAL IN ITA NOS.2666/AHD/2011 & 227/AHD/2013 DATED 03.08.2018 FOR A.Y. 2007-08 & 2008-09 HELD AS UNDER :- 12. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS, WE FIND IT APPROPRIATE, NECESSARY AND PROFITABLE TO REPRODUCE THE RELEVANT PARAS OF FIRST APPELLATE ORDER WHEREIN THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE, WHICH READS AS FOLLOWS: 5.4 DECISION: I HAVE PERUSED THE FACTS OF THE CASE. THE AR OF THE APPELLANT EXPLAINED THAT THOUGH THE APPELLANT HAD PURCHASED THE LAND AT SURVEY NO. 882/1/2/2, AMLI, SILVASSA, VIDE AGREEMENT DATED 18/1/2005 DUE TO COURT MATTER FINAL SALE DEED WAS EXECUTED ON 31/3/2008. HENCE IN RESPECT OF FLATS SOLD, WHILE EXECUTING SALE DEEDS, TILL THE SAID LAND WAS TRANSFERRED IN THE APPELLANT'S NAME, THE SELLERS OF THE LAND WERE MADE AS A CONFIRMING PARTY. AR STRONGLY ARGUED DCIT, CEN. CIRCLE 1, VAPI VS. NAGJUA DEVELOPERS /ITA NO.673/AHD/2016/A.Y. 2010-11 PAGE 3 OF 8 THAT APPELLANT HAS SOLD THE FLATS AS A BUILDERS & DEVELOPERS AND NOT AS A CONTRACTORS. FURTHER AR ARGUED THAT THE HOUSING PROJECT OF THE APPELLANT, CONSISTING OF FLATS & ROW HOUSES, WAS DULY APPROVED BY APPROPRIATE AUTHORITIES AND APPELLANT HAS COMPLIED WITH ALL THE REQUISITE CONDITIONS OF SECTION 80IB(10) OF THE ACT. FURTHER AR OF THE APPELLANT BROUGHT TO MY NOTICE THAT AS THE BUILT UP AREAS OF THE ROW HOUSES ARE MORE THAN 1500SQ. FT. IT HAS NOT CLAIMED DEDUCTION U/S. 8OIB(10) IN RESPECT OF PROFIT FROM THE SALE OF ROW HOUSE. FURTHER AR OF THE APPELLANT EXPLAINED THAT IN RESPECT OF SALE OF FLATS AND IN RESPECT OF SALE OF ROW HOUSES APPELLANT HAS PREPARED TWO SEPARATE PROFIT & LOSS A/C. IN SUPPORT OF IT'S CLAIM FOR DEDUCTION U/S. 80IB(10) IN RESPECT OF PROFIT FROM THE SALE OF THE FLATS AR OF THE APPELLANT STRONGLY RELIED UPON THE DECISIONS OF AHMEDABAD TRIBUNAL IN THE CASE OF RADHE DEVELOPERS AND OF CALCUTTA TRIBUNAL IN THE CASE OF BENGAL AMBUJA AND POINTED OUT THAT HON. CALCUTTA HIGH COURT HAS DISMISSED DEPARTMENT'S APPEAL. AR OF THE STRONGLY CONTENDED THAT, IN THE GIVEN FACTS ASSESSING OFFICER IS NOT JUSTIFIED IN PLACING RELIANCE ON THE OBSERVATIONS OF THE SURVEY PARTY ESPECIALLY WHEN HE HAS DEPUTED INSPECTOR FOR THE VERIFICATION OF AREAS OF THE FLATS AND THE ARCHITECT HAS GIVEN CERTIFICATE ABOUT THE AREAS OF THE FLATS. I HAVE ALSO PERUSED THE ASSESSMENT ORDER. THE MAIN ISSUES ON THE BASIS OF WHICH THE AO DENIED THE BENEFIT U/S. 8O- IB(10) ARE I) THE AO TREATED ENTIRE HOUSING PROJECT TO BE A SINGLE UNIT, II) OUT OF THE HOUSING PROJECTS THE ROW HOUSES EXCEEDS 1500 SQ. FT BUILT-UP AREA AND III) NO OWNERSHIP OF LAND AND THEREFORE, DOES NOT FULFILL THE CONDITIONS ENVISAGED IN SEC.80-IB(10). LET US EXAMINE THE REQUIREMENT OF THE PROVISIONS U/S. 80-IB(10) OF THE ACT. SECTION 8OIB(IO) AS SUBSTITUTED BY FINANCE (NO.2) ACT, 2004, W.E.F. 1-4-2005 READS AS UNDER: (10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH, 2007 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT, OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008 ; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, DCIT, CEN. CIRCLE 1, VAPI VS. NAGJUA DEVELOPERS /ITA NO.673/AHD/2016/A.Y. 2010-11 PAGE 4 OF 8 (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY ; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE : PROVIDED THAT NOTHING CONTAINED IN CLAUSE (A) OR CLAUSE (B) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH ASCHEME FRAMED, BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DECLARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE ; AND (D) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED FIVE PER CENT, OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR TWO THOUSAND SQUARE FEET, WHICHEVER IS LESS. FURTHER, THE RETROSPECTIVE AMENDMENT VIDE FINANCE ACT (NO.2),2009 IT WAS STATED THAT THE OBJECTIVES OF THIS TAX CONCESSION WAS TO PROVIDE TAX BENEFIT TO THE PERSON UNDERTAKING THE INVESTMENT RISK I.E. ACTUAL DEVELOPER. LET US EXAMINE WHETHER THE APPELLANT HAD FULFILLED THE CONDITIONS IN THIS CASE; THE APPELLANT SUBMITTED THAT WITHIN THE MEANING OF THE PROVISIONS OF SECTION 80IB(10), THE APPELLANT IS ENTITLED FOR DEDUCTION OF THE ENTIRE PROFIT DERIVED FROM THE SALE OF THE FLATS IN THE SAID PARK CITY HOUSING PROJECT AS: I) THE HOUSING PROJECT IS APPROVED IN THE YEAR 2005-06 I.E. BEFORE 31 ST MARCH, 2007. II) CONSTRUCTION WORK OF THE SAID HOUSING PROJECT WAS STARTED AFTER THE 1 ST DAY OF OCTOBER, 1998. III) THE SIZE OF THE LAND IS NOT LESS THAN 1 ACRE. IV) THE BUILT UP AREA OF ANY OF THE RESIDENTIAL FLATS IS LESS THAN 1500 SQ. FTS. V) THERE IS NO CONSTRUCTION OF SHOPS/COMMERCIAL ESTABLISHMENT. DCIT, CEN. CIRCLE 1, VAPI VS. NAGJUA DEVELOPERS /ITA NO.673/AHD/2016/A.Y. 2010-11 PAGE 5 OF 8 IN MY VIEW, THE APPELLANT HAS FULFILLED ALL THE CONDITIONS AS STIPULATED IN THE SAID PROVISIONS. FURTHER, THE APPELLANT HAS CONTESTED THAT IT HAD NOT CLAIMED THE TAX BENEFITS FOR THE PROFITS DERIVED FROM THE ROW HOUSES FOR WHICH THE APPELLANT HAD MAINTAINED SEPARATE ACCOUNT. THE APPELLANT'S CASE IS ALSO SUPPORTED BY VARIOUS JUDICIAL PRONOUNCEMENTS. THE JURISDICTIONAL HON'BLE ITAT, AHMEDABAD IN THE CASE OF RADHE DEVELOPERS V/S. I.T.O. AHMEDABAD 'A' BENCH OF AHMEDABAD TRIBUNAL (ITA NO. 2482/AHD./2006) & INCOME-TAX OFFICER, WARD-2(5), AHMEDABAD VS. SHAKTI CORPORATION. AHMEDABAD ITAT APPEAL NO. 1503 OF 2008 APTLY SUPPORT THE CASE OF THE APPELLANT. THUS IN MY OPINION, FOR CLAIMING DEDUCT U/S. 80IB(10) THE OWNERSHIP OF THE LAND IS NOT A CONDITION AND SUBJECT TO FULFILLMENT OF CONDITIONS OF SECTION 80IB(10) OF THE ACT, DEDUCTION IS AVAILABLE, TO ANY UNDERTAKING, WHICH DERIVES PROFIT FROM DEVELOPING AND BUILDING OF HOUSING PROJECTS. FURTHER, FROM THE PERUSAL OF ASSESSMENT ORDER I FIND THAT ASSESSING OFFICER HAS NOWHERE OBSERVED THAT THE AREA OF THE FLATS SOLD BY THE APPELLANT IS MORE THAN THE AREA PRESCRIBED EXCEPT ON THE ROW HOUSES FOR WHICH THE APPELLANT HAD PAID TAX. IN SUPPORT OF IT'S CLAIM, THE APPELLANT HAS SUBMITTED CERTIFICATE OF AN ARCHITECT CERTIFYING THAT THE BUILT UP AREA OF NONE OF THE FLATS IS MORE THAN 1500 SQ. FTS. ON THE OTHER HAND, THOUGH ASSESSING OFFICER HAS DEPUTED INSPECTOR FOR THE VERIFICATION OF THE AREAS OF FLATS IN THE SAID HOUSING PROJECT, HE HAS JUST RELIED ON THE OBSERVATIONS OF THE SURVEY PARTY. IGNORING THE FACT THAT THE APPELLANT HAS NOT CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF PROFIT FROM THE SALE OF ROW HOUSES ASSESSING OFFICER IS NOT JUSTIFIED IN DENYING THE CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF PROFIT FROM THE SALE OF THE FLATS. HAVING REGARDS TO THE LEGAL PROVISIONS I AM OF THE OPINION THAT IN RESPECT OF THE PROFIT FROM THE SALE OF THE FLATS THE APPELLANT HAS NOT VIOLATED ANY OF THE CONDITIONS OF SECTION 80IB(10) AND AS THE APPELLANT HAS NOT CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF THE PROFIT FROM THE SALE OF THE ROW HOUSES, APPELLANT IS ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF PROFIT FROM THE SALE OF FLATS. THE APPELLANT ALSO FURTHER BUTTRESS ITS CASE BY CITING TWO MORE JUDGEMENTS OF HON'BLE ITAT - ESSEM CAPITAL MARKET LTD VS. ITO (2011) TIOL 196 (MUM.) AND ITO VS. M.S.VISHNU DEVELOPERS, (AHM. ITAT). IN VIEW OF THE FACTUAL AND LEGAL POSITION NARRATED ABOVE, THE AO IS DIRECTED TO ALLOW BENEFITS U/S.80IB(10) OF THE ACT CLAIMED BY THE APPELLANT. THE APPELLANT SUCCEEDS ON THIS GROUND OF APPEAL. 13. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS AND FINDINGS OF THE AO IN THE ASSESSMENT ORDER AS WELL AS CONCLUSION ARRIVED BY THE LD. CIT(A) IN THE IMPUGNED FIRST APPELLATE ORDER FIRST OF ALL, WE MAY POINT OUT THAT THE MAIN POINTS ON WHICH THE AO DENIED DEDUCTION U/S. 80IB(10) OF THE ACT HAS BEEN SUMMARIZED BY THE LD. CIT(A) AS FOLLOWS: 5-2 AO'S OBSERVATIONS : I HAVE PERUSED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER. THE LEARNED ASSESSING OFFICER HAS DENIED CLAIMED DEDUCTION U/S. 80IB(10) IN RESPECT OF THE PROFIT DERIVED FROM THE SALE OF FLATS BY OBSERVING THAT DCIT, CEN. CIRCLE 1, VAPI VS. NAGJUA DEVELOPERS /ITA NO.673/AHD/2016/A.Y. 2010-11 PAGE 6 OF 8 THE AREA OF ROW HOUSES IS MUCH BIGGER THAN THE DESCRIBED AREA ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF THE I.T. ACT. FURTHER HE OBSERVED THAT THE BUILT UP AREA OF ROW HOUSES EXCEEDS 1,500 'SQ. FT. THE LEARNED ASSESSING OFFICER HAS AT THE PAGE NO. 7 OF THE IMPUGNED ORDER CITED OBSERVATIONS OF THE SURVEY PARTY THAT DURING THE COURSE OF SURVEY PROCEEDINGS IT WAS NOTICED THAT FOR PRESENT PROJECT BEING DEVELOPED BY THE ASSESSEE IN THE NAME AND STYLE OF 'PARK CITY', THE FLATS CONSTRUCTED IN THIS PROJECT ARE HAVING MORE THAN THE PRESCRIBED LIMIT AREA AS PER SECTION 80IB(10). AT PAGE NO. 5 & 6 OF THE ORDER, HE OBSERVED THAT IN THE AGREEMENTS MADE FOR THE SALE FLATS TERMINOLOGY USED, LIKE SUPER BUILT UP AREA, CARPET AREA, BUILT UP AREA, IN RELATION TO THE AREA OF THE FLATS SOLD IS VERY VAGUE AND CONFUSING AND CONCLUDED THAT APPELLANT USED VAGUE TERMINOLOGY IS USED TO AVOID VERIFICATION IN RELATION TO A VITAL PARAMETER, I.E. AREA OF THE FLAT IN RELATION TO THE CLAIM OF DEDUCTION U/S. 80IB(10). IN VIEW OF THE ABOVE, THE AO CONCLUDED THAT THE APPELLANT IS NOT ENTITLED FOR THE BENEFIT U/S. 80IB(10) OF THE ACT. 14. IN VIEW OF CONTENTIONS OF THE AO AND FINDINGS AND OBSERVATIONS RECORDED BY THE LD. CIT(A) IN THE IMPUGNED FIRST APPELLATE ORDER, WE OBSERVE THAT UNDISPUTEDLY THE APPELLANT THOUGH HAD PURCHASED THE LAND SURVEY NO.882/1/2/2, AMLI, SILVASAA VIDE AGREEMENT DATED 18.01.2005 AND DUE TO CIVIL DISPUTE PENDING BEFORE THE COURT FINAL SALE DEED IN FAVOUR OF APPELLANT WAS EXECUTED ON 31.03.2008. THEREFORE, ALL THE NECESSARY PERMISSIONS FOR DEVELOPMENT OF HOUSING PROJECT, BUILDING AND DEVELOPING OF HOUSING PROJECT ON THE SAID LAND WAS OBTAINED IN THE NAME OF LAND OWNER UNDER AGREEMENT DATED 18.01.2005. THE CRUX OF THESE FACTS IS THAT THE ASSESSEE BUILD AND DEVELOP HOUSING PROJECT UNDER AGREEMENT DATED 18.01.2005 AND BECAME OWNER OF THE SAID LAND ON 31.03.2008 WHEN THE SALE DEED EXECUTED IN FAVOUR OF THE ASSESSEE. AT THIS JUNCTURE, THE RATIO OF THE ORDER OF THE A BENCH OF ITAT, AHMEDABAD IN THE CASE OF RADHE DEVELOPERS VS. ITO (ITA NO.2482/AHD/2006) IT WAS HELD THAT TO CLAIM DEDUCTION U/S. 80IB(10) OF THE ACT THERE IS NO CONDITION PRECEDENT THAT THE ASSESSEE MUST BE THE OWNER OF THE LAND ON WHICH HOUSING PROJECT IS TO BE CONSTRUCTED AND HENCE, CONTENTION OF THE AO IN THIS REGARD IS NOT SUSTAINABLE AND LD. CIT(A) WAS RIGHT IN DISMISS THE SAME. 15. SO FAR AS SECOND ALLEGATION AND BASIS TAKEN BY THE AO FOR DISALLOWING DEDUCTION U/S. 80IB(10) OF THE ACT I.E., ENTIRE HOUSING PROJECT IS TO BE TREATED AS SINGLE UNIT IS CONCERNED, WE ARE OF THE VIEW THAT NEITHER THE AO NOR LD. DR DURING THE ARGUMENTS BEFORE US, COULD NOT CONTROVERT THE FACT THAT THE ASSESSEE MAINTAINED SEPARATE BOOKS OF ACCOUNTS FOR FLATS AND ROW HOUSES AND HE HAS NOT CLAIMED ANY DEDUCTION ON THE ROW HOUSES WHICH ARE MEASURING FROM 2000 SQ. FT. TO 2200 SQ. FT. AND CLAIM OF S. 80IB(10) OF THE ACT HAS BEEN MADE ONLY ON THE INCOME FROM SALE OF FLATS WHICH ARE MEASURING LESS THAN 1500 SQ. FT. ON THIS ISSUE THE RATIO OF THE DECISION OF HON'BLE HIGH COURT OF MADRAS IN THE CASE OF VISHWAS PROMOTERS PVT. LTD. (SUPRA), AS HAS BEEN VEHEMENTLY RELIED BY THE LD. AR, PROVIDES SUPPORT TO THE CLAIM OF THE ASSESSEE WHEREIN IT HAS BEEN HELD THAT THE MERE FACT ONE OF THE BLOCKS HAVE UNITS EXCEEDING BUILT-UP AREA OF 1500 SQ. FT. PER SE, WOULD NOT RESULT IN NULLIFYING THE EACH OF THE BLOCKS, THE ASSESSEE IS ENTITLED TO HAVE THE BENEFIT OF DEDUCTION IN RESPECT OF RESIDENTIAL UNITS SATISFYING THE REQUIREMENT U/S. 80IB(10) OF THE ACT. THEIR LORDSHIP IN PARA 15, ANSWERING THE SUBSTANTIAL QUESTION OF LAW AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE FURTHER HELD THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION IN RESPECT OF ALL THE BLOCKS FORMING PART OF THE PROJECTS, BUT TO THE EXTENT OF EACH OF THE DCIT, CEN. CIRCLE 1, VAPI VS. NAGJUA DEVELOPERS /ITA NO.673/AHD/2016/A.Y. 2010-11 PAGE 7 OF 8 BLOCKS SATISFYING CONDITIONS U/S. 80IB(10) OF THE ACT AND THE ASSESSEE WOULD BE ENTITLED TO THE RELIEF ON THE PROPORTIONATE BASIS. 16. IN THE PRESENT CASE, UNDISPUTEDLY THE ASSESSEE HAS MAINTAINED SEPARATE ACCOUNTS FOR FLATS AND ROW HOUSES AND NO CLAIM HAS BEEN MADE ON THE ROW HOUSES MEASURING AREA OF MORE THAN 1500 SQ.FT. AND THE CLAIM U/S. 80IB(10) OF THE ACT HAS BEEN MADE ONLY ON THE FLATS WHICH ARE MEASURING LESS THAN 1500 SQ.FT. THIS FACT IS CLEARLY DISCERNABLE WITH THE COMPUTATION OF INCOME FILING ALONG WITH RETURN OF INCOME (ASSESSEE PAPER BOOK PG.1 & 2) WHEREIN NET PROFIT AS PER P&L A/C. ON FLAT SALE AMOUNTING TO RS. 2,68,88,714/- HAS BEEN SHOWN AND AMOUNT OF RS. 2,65,52,967/- HAS BEEN CLAIMED AS DEDUCTION U/S. 80IB(10) OF THE ACT. THUS, IN VIEW OF RATIO OF DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF VISHWAS PROMOTERS (SUPRA) CLAIM OF THE ASSESSEE, ON THE FLATS WHICH FULFILL THE CONDITIONS LAID DOWN PROVISION OF U/S. 80IB(10) OF THE ACT IS ALLOWABLE AND THE LD. CIT(A) WAS RIGHT IN ALLOWING THE SAME. 17. SO FAR AS LAST CONTENTION OF THE AO THAT THE ENTIRE HOUSING PROJECT HAS TO BE TREATED AS SINGLE UNIT IS CONCERNED, IN THE CASE OF VISHWAS PROMOTERS (SUPRA) HON'BLE HIGH COURT OF MADRAS ALSO MADE IT CLEAR THAT EACH RESIDENTIAL BLOCK IN A HOUSING PROJECT IS A HOUSING PROJECT IN ITSELF FOR PURPOSE OF CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT. THEREFORE, THIS CONTENTION OF THE AO IS ALSO NOT CORRECT AND SUSTAINABLE AND THE FIRST APPELLATE AUTHORITY WAS RIGHT IN DISMISSING THE SAME. THE CONCLUSION ARRIVED BY THE LD. CIT(A) ALSO GETS STRONG SUPPORT FROM THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF PUSHKAR CONSTRUCTION CO. (SUPRA), WHEREIN THEIR LORDSHIP IN PARA 7 HELD THAT WHEN THE PROJECT FULFILLED THE CRITERIA FOR BEING APPROVED AS A HOUSING PROJECT, THE DEDUCTION U/S. 80IB(10) OF THE ACT COULD NOT BE DENIED. AS PER DECISION OF HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF VANDANA PROPERTIES (SUPRA), WHICH WAS ALSO REFERRED BY HON'BLE HIGH COURT OF MADRAS IN THE CASE OF VISHWAS PROMOTERS LTD. (SUPRA), IT WAS HELD THAT THE S. 80IB DEDUCTION ON CONSTRUCTION OF A HOUSING PROJECT ON A PLOT HAVING AREA OF ONE ACRE IS AVAILABLE, IRRESPECTIVE OF FACT THAT OTHER HOUSING PROJECTS EXIST ON SAID LAND. IN THE PRESENT CASE, IT IS NOT AN ALLEGATION OF THE AO THAT THE HOUSING PROJECT HAS BEEN BUILD OR DEVELOP ON A LAND HAVING AREA OF LESS THAN ONE ACRE, BUT HE DENIED THE DEDUCTION ON THE ALLEGATION THAT ENTIRE HOUSING PROJECT TO BE TREATED AS SINGLE UNIT WHICH IS NOT CORRECT AND JUSTIFIED IN VIEW OF THE CONCLUSION ARRIVED BY US IN THE EARLIER PART OF THIS ORDER. 18. ON THE BASIS OF FOREGOING DISCUSSION, WE REACH TO A LOGICAL CONCLUSION THAT THE AO DISALLOWED THE CLAIM BY TAKING A HYPER TECHNICAL APPROACH AND ON HIS OWN WHIMS AND SURMISES WHICH IS CLEARLY BY THE SCHEME AND MANDATE OF PROVISION OF U/S. 80IB(10) OF THE ACT AND RATIO OF THE DECISION OF HON'BLE HIGH COURT OF BOMBAY, HIGH COURT OF MADRAS AND HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT AS RESPECTFULLY NOTED ABOVE. WE, THEREFORE, ARE UNABLE TO SEE ANY AMBIGUITY, PERVERSITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE FINDINGS ARRIVED BY THE LD. CIT(A) IN DISMISSING THE ALLEGATIONS AND CONTENTIONS OF THE AO AND IN ALLOWING DEDUCTION U/S. 80IB(10) OF THE ACT TO THE ASSESSEE ON THE AMOUNT ACCRUED TO HIM ON SALE OF FLATS MEASURING LESS THAN 1500 SQ.FT. PER UNIT. CONSEQUENTLY, WE HOLD THAT THE AO DISALLOWED THE CLAIM WITHOUT ANY JUSTIFIED AND CORRECT REASONS WHICH WAS RIGHTLY ALLOWED BY THE LD. CIT(A) AND THUS, WE UPHOLD THE FINDINGS RECORDED BY HIM IN THE FIRST APPELLATE ORDER. ACCORDINGLY, SOLE GROUND OF REVENUE BEING DEVOID OF MERITS IS DISMISSED. DCIT, CEN. CIRCLE 1, VAPI VS. NAGJUA DEVELOPERS /ITA NO.673/AHD/2016/A.Y. 2010-11 PAGE 8 OF 8 7. CONSIDERING THE TOTALLY OF FACTS AND IN THE LIGHT OF THE ABOVE DECISION OF TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF, WE FIND THAT THE ISSUE IS COVERED BY THE DECISION OF ITAT IN FAVOUR OF THE ASSESSEE AND NO REASON TO DEVIATE WITH THE FINDING OF LD.CIT(A), ACCORDINGLY SAME IS UPHELD. THUS, THE SOLE EFFECTIVE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 9. THE ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2019. SD/- SD/- (KUL BHARAT) (O.P.MEENA) ( /JUDICIAL MEMBER) ( /ACCOUNTANT MEMBER) / SURAT, DATED : 28 TH FEBRUARY , 2019/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT