M/s. Aaiji Surobhi Group, Pune V. Deputy Commissioner of Income-tax,

ITA 687/PUN/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6985 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 09-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Assessee Lawyers: C V CHITALE
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , ! , # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURV EDI, AM . / ITA NO. 687/PUN/2014 & & / ASSESSMENT YEAR : 2010-11 M/S. AAIJI SUROBHI GROUP, 201, RUNWAL REGENCY, SADHU VASWANI CHOWK, PUNE 411001 PAN : AAAAA4551B . / APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 2, PUNE . RESPONDENT / APPELLANT BY : SHRI C.V. CHITALE / RESPONDENT BY : SHRI ANIL CHAWARE DATE OF HEARING : 31.01.2017 / DATE OF PRONOUNCEMENT: 03.03.2017 ' / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-II, PUNE, DATED 29.11.2013 RELATING TO ASSESSMENT YEAR 2010-1 1 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKIN G ADDITION OF RS.88,02,525/- AND THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS)-II, PUNE ERRED IN SUSTAINING ADDITIONS OF RS.88,02,525/- TO THE RETURNED INCOME. ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 2 2. THE LEARNED ASSESSING OFFICER AND THE LEARNED CO MMISSIONER OF INCOME TAX (APPEAL)-II, PUNE, HAVE ERRED IN MAKING DISALLOWANCE UNDER SECTION 80IB(10) OF INCOME TAX ACT 1961. 3. THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961, DATED MARCH 21, 2013 PASSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE IS BAD IN LAW. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST THE ADDITION OF RS.88,02,525/-. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS AN AOP CONSISTING OF TWO MEMBERS I.E. AAIJEE GROUP AND SUKANTO ROY CONST RUCTION. THE ASSESSEE HAD DEVELOPED A PROJECT AT DHANORI AND HAD CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT ON THE PROFITS OF THE ELIGIBLE PROJECT. FO R THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DECLARED TOTAL INCOME OF RS.1,24,9 6,520/- AFTER CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT AT RS.88,02,525/ -. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED T HAT THE LAYOUT PLAN WAS FIRST SANCTIONED BY THE PUNE MUNICIPAL CORPORATION (PMC) ON 02.08.2003. THE FIRST YEAR OF CLAIM U/S. 80IB(10) OF THE ACT WAS AS SESSMENT YEAR 2007-08. ORIGINALLY, THE PROJECT WAS SANCTIONED FOR 7 BUILDI NGS A TO G FOR TOTAL UNITS OF 160. SUBSEQUENTLY, THE PLAN WAS REVISED ON 10.07.2 006 AND AS PER THE REVISED PLAN THERE WERE 6 BUILDINGS A TO F. THE F BUILDING WAS SANCTIONED WITH 8 RESIDENTIAL UNITS. SUBSEQUENTLY, THERE WAS ANOTHER REVISION ON 09.05.2008 AND 20 ADDITIONAL RESIDENTIAL UNITS WERE SANCTIONED IN THE F BUILDING AND BUILDING G WITH 40 RESIDENTIAL UNITS WAS ALSO SANCTIONED. THE PLEA OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW WAS THAT IT HAD CONSTRUCTED T HE PROJECT IN TWO PHASES I.E. PHASE 1 AND PHASE 2, WHEREIN PHASE 1 CONSISTED OF 1 48 UNITS AND PHASE 2 CONSISTED OF 20 ADDITIONAL RESIDENTIAL UNITS OF F B UILDING AND 40 RESIDENTIAL UNITS IN BUILDING G. THE PHASE 1 WAS CONSIDERED TO BE AN ELIGIBLE PROJECT AND PHASE ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 3 2 WAS CONSIDERED TO BE A TAXABLE PROJECT. IN OTHER WORDS, THE REVISION AS ON 10.07.2006 WAS CONSIDERED AS REVISION OF THE ORIGIN AL PLAN AND A PART OF THE ELIGIBLE PROJECT. HOWEVER, SUBSEQUENT SANCTION OF PLANS ON 09.05.2008 WAS FOR A SEPARATE PROJECT. THE ASSESSING OFFICER WAS OF T HE VIEW THAT BASED ON THE REVISION ON 09.05.2008, IT WAS CLEAR THAT THE PROJE CT WAS NOT COMPLETE AS ON 31.03.2008. SINCE, THE PROJECT HAD NOT COMPLIED WI TH THE PROVISIONS OF SECTION 80IB(10) OF THE ACT, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE BY THE ASSESSING OFFICE TO GIVE REASONS AS TO WHY THE DEDU CTION CLAIMED U/S. 80IB(10) OF THE ACT SHOULD BE ALLOWED TO IT. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE EXPLAINED ITS POSITION THAT THE FIRST REVI SED PLAN I.E. ON 10.07.2006 ENVISAGED CONSTRUCTION OF 148 RESIDENTIAL UNITS IN 6 BUILDINGS I.E. A TO F AND THIS PROJECT WAS EXECUTED DURING THE FINANCIAL YEARS 200 3-04 TO 2006-07. THE CONSTRUCTION OF 6 BUILDINGS AND 148 FLATS WAS COMPL ETED BEFORE 31.03.2008 I.E. THE DATE STIPULATED U/S. 80IB(10) OF THE ACT, WHICH WAS DULY CERTIFIED BY THE PMC AND EVEN THE COMPLETION CERTIFICATE WAS ON RECORD. HE STRESSED THAT THE CONSTRUCTION OF BUILDINGS A TO F COMPRISING OF 148 FLATS AS PER SANCTIONED PLAN DATED 11.11.2003, COMPLIED WITH THE CONDITIONS AND THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT WAS IN ORDER. HE FURTHER POINT ED OUT THAT A NEW DEVELOPMENT WAS INITIATED AFTER COMPLETION OF SURAB HI TOWNSHIP PROJECT PHASE 1. THE ASSESSEE HAD UTILIZED ADDITIONAL FSI OF 385 1.69 SQ. MTRS. FOR THE PURPOSE, WHICH DID NOT FORM PART OF THE PHASE 1 PRO JECT. HE STRESSED THAT PHASE 2 PROJECT WAS NEITHER CONTEMPLATED NOR EXISTE D WHEN SANCTIONED PHASE 1 PROJECT WAS COMPLETED. THE ASSESSEE OBJECTED TO THE STAND OF THE ASSESSING OFFICER AND POINTED OUT THAT PHASE 1 PROJECT WAS CO MPLETED ON 31.03.2008 AND IT COULD NOT BE HELD OTHERWISE MERELY BECAUSE THE A SSESSEE HAD INITIATED AND TAKEN UP A NEW PROJECT SUBSEQUENTLY ON 09.05.2008. HENCE, THE ASSESSEE CLAIMED THAT IT WAS ELIGIBLE FOR CLAIMING THE DEDUC TION U/S. 80IB(10) OF THE ACT IN RESPECT OF PHASE 1 PROJECT. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 4 SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT THE D UE DATE FOR COMPLETION OF PROJECT WAS 31.03.2008. BUT THE PROJECT HAD UNDERG ONE REVISION ON 09.05.2008 UNDER WHICH THE ADDITIONAL UNITS WERE SANCTIONED, A SSESSING OFFICER, THUS, HELD THAT IN VIEW OF REVISION, THE PROJECT WAS NOT COMPL ETED. HE ALSO NOTED THAT THE CONSTRUCTION OF THE BUILDING G HAD NOT STARTED TILL DATE. THEREFORE, THE PROJECT WHICH THE ASSESSEE CLAIMED AS AN ELIGIBLE PROJECT, FAILS TO COMPLY WITH THE MANDATORY PROVISIONS OF SECTION 80IB(10) OF THE ACT . THE ASSESSING OFFICER, THUS, DENIED THE DEDUCTION CLAIMED U/S. 80IB(10) OF THE ACT AT RS.88,02,525/-. 5. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE REFERRED TO SANCTIONED PLAN AND COMPLETION CERTIFIC ATE ISSUED BY PMC ON DIFFERENT DATES I.E. 05.05.2006 FOR THE COMPLETION OF WING A AND B COMPRISING OF 56 UNITS, COMPLETION CERTIFICATE DATED 18.10.2006 F OR WING C AND D COMPRISING OF 56 UNITS AND CERTIFICATE DATED 31.03.2008 FOR WI NG E AND F COMPRISING OF 36 UNITS, THUS, IN TOTAL 148 FLATS. THE ASSESSEE CLAI MED THAT IN ORDER TO BE ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF THE ACT, IT HAD FULF ILLED ALL THE CONDITIONS AND HAD EVEN RECEIVED THE COMPLETION CERTIFICATE OF 148 FLA TS WHICH WERE PART OF PROJECT PHASE 1, BEFORE 31.03.2008. IN RESPECT OF FURTHER CONSTRUCTIONS THE PLEA OF THE ASSESSEE WAS THAT IT HAD UTILIZED 2977.60 SQ. MTRS. OF FSI TO CONSTRUCT 20 FLATS IN THE EXISTING F BUILDING AND 40 FLATS IN THE NEW G BUILDING. THIS FSI WAS RECEIVED BY THE ASSESSEE AFTER 31.03.2008 ON ACCOUN T OF INCREASE IN THE PERMISSIBLE FSI BY THE PMC ON ACCOUNT OF VARIATION IN FSI OF DP ROAD AND AMENITY SPACE. THE PLEA OF THE ASSESSEE WAS THAT T HE SAID ADDITIONAL FSI NEVER EXISTED WHEN THE PLANS FOR PHASE 1 OF THE PRO JECT WERE SANCTIONED. THE NEXT PLEA OF THE ASSESSEE BEFORE THE COMMISSIONER O F INCOME TAX (APPEALS) WAS THAT IT HAD CLAIMED THE DEDUCTION U/S. 80IB(10) OF THE ACT IN ASSESSMENT YEARS 2007-08 AND 2009-10, WHICH WAS ALLOWED ON THE SAME SET OF FACTS AND COMPLETION CERTIFICATES ISSUED BY THE PMC. THE COM MISSIONER OF INCOME TAX ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 5 (APPEALS) NOTES THAT THE ASSESSEE HAD CONSTRUCTED A LL THE 148 FLATS IN 6 BUILDINGS A TO F BEFORE 31.03.2008 WHICH WAS ALSO E VIDENT FROM THE COMPLETION CERTIFICATE ISSUED BY PMC ON THREE DIFFERENT DATES. THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ASSESSING OF FICER HAS NOT DISPUTED THE SAID FACTS. THEREAFTER, IN MAY, 2008 THERE WAS REV ISION OF THE ORIGINAL SANCTIONED PLAN WHICH WAS SANCTIONED BY THE PMC ON 09.05.2008 WHERE THE ASSESSEE HAD UTILIZED ADDITIONAL FSI OF 2977.60 SQ. MTRS. THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ISSUE TO BE DECIDED IS WHETHER THE CONSTRUCTION OF ADDITIONAL 60 FLATS SANCTIONED BY T HE PMC ON 09.05.2008 FORM PART OF EARLIER PROJECT OR WAS A SEPARATE PROJECT. THE COMMISSIONER OF INCOME TAX (APPEALS) TOOK NOTE OF THE RELIANCE PLACED BY T HE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN SIDDHIVINAYAK KOHINOOR VENTURE VS. ADDL. COMMISS IONER OF INCOME TAX IN ITA NOS. 1112 AND 1527/PN/2007, ORDER DATED 31.10.2 013 WHEREIN ON IDENTICAL ISSUE THE CLAIM OF THE ASSESSEE WAS ALLOWED. THE C OMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT IN THE PRESENT CASE, BU ILDING G PLANNED BY THE ASSESSEE WITH 40 FLATS COULD TO A CERTAIN EXTENT BE CONSIDERED TO BE A SEPARATE HOUSING PROJECT. HOWEVER, THE CONSTRUCTION OF ADDI TIONAL 20 FLATS IN THE ALREADY EXISTING BUILDING F WHEREIN 8 FLATS WERE CONSTRUCTE D EARLIER AND WERE COMPLETED BEFORE 31.03.2008 CANNOT BY ANY STRETCH OF IMAGINAT ION BE HELD TO BE A SEPARATE PROJECT. HE FURTHER NOTED THAT THE ASSESS EE DID NOT INCREASE THE LAND BY WAY OF ADDITIONAL PURCHASES RATHER IT WILL THE C HANGE IN THE FSI OF THE ALREADY EXISTING PROJECT WHICH GOT INCREASED FROM 8839.69 S Q. MTRS. TO 11811.19 SQ. MTRS., WHICH PRIMA FACIE INDICATES THE PROJECT TO B E ONE HOUSING PROJECT AND NOT TWO SEPARATE PROJECTS AS CONTENDED BY THE ASSESSEE. EVEN THE LAST COMPLETION CERTIFICATE WAS NOT TITLED AS FINAL COMPLETION CERT IFICATE AND THUS, THE COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE VIE W THAT THE HOUSING PROJECT COMPRISES OF TWO INDEPENDENT PROJECTS OF PH ASE 1 AND PHASE 2 IS NOT ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 6 TENABLE ON THE BASIS OF MATERIAL ON RECORD. SINCE, THE CONSTRUCTION OF THE ADDITIONAL 60 FLATS WAS NOT COMPLETED WITHIN THE ST IPULATED TIME PERIOD OF 31.03.2008 AND EVEN THE CONSTRUCTION OF BUILDING G HAD NOT STARTED TILL THE PASSING OF THE ORDER BY THE ASSESSING OFFICER, THOU GH, THE ASSESSEE HAD NOT CLAIMED ANY DEDUCTION U/S. 80IB(10) OF THE ACT FOR THE 60 FLATS BUT, THE ADDITIONAL FLATS WERE VERY MUCH PART OF THE ONLY HOUSING PROJE CT CONTEMPLATED BY THE ASSESSEE, THE COMPLETION OF WHICH WAS NOT DONE WITH IN THE DUE DATE, HENCE, THE ASSESSEE WAS HELD TO BE NOT ELIGIBLE FOR CLAIMI NG THE DEDUCTION U/S. 80IB(10) OF THE ACT. 6. THE ASSESSEE IS IN APPEAL BEFORE US IN RESPECT O F THEREOF. 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE AS SESSEE AFTER TAKING US THROUGH THE FACTUAL ASPECTS OF THE CASE STRESSED TH AT PHASE 2 FOR WHICH PERMISSION TO CONSTRUCT WAS TAKEN AFTER MAY, 2008, WAS NOT PART OF PHASE 1. HE REFERRED TO THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) WHEREIN IT HAS BEEN ACCEPTED THAT INITIALLY THE FSI AVAILABLE FOR CONSTRUCTION WAS ONLY 8839.685 SQ. MTRS., OUT OF WHICH THE ASSESSEE CONSU MED 8827.27.46 SQ. MTRS. FOR THE CONSTRUCTION OF 148 FLATS UP TO 31.03.2008. HE FURTHER POINTED OUT THAT THE NEW PLANS IN MAY, 2008 WERE SANCTIONED ON ACCOU NT OF THE ADDITIONAL FSI AVAILABLE OF 2977.60 SQ. MTRS. UNDER WHICH 20 FLATS WERE CONSTRUCTED ON EXISTING BUILDING F AND 40 FLATS WERE IN NEW BUILDING G. TH E SAID BUILDING PLAN WAS SANCTIONED ON 09.05.2008. HE FURTHER POINTED OUT T HAT THE ASSESSEE HAD CLAIMED THE DEDUCTION U/S. 80IB(10) OF THE ACT ON P HASE 1 AGAINST WHICH THE COMPLETION CERTIFICATE WAS ALSO RECEIVED UP TO 31.0 3.2008 I.E. FOR 148 FLATS . HOWEVER, NO CLAIM OF DEDUCTION WAS MADE IN RESPECT OF PHASE 2 AND HENCE, THERE WAS NO MERIT IN THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 7 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND PLACED RELIANCE ON THE ORDER OF COMMISSIONER O F INCOME TAX (APPEALS). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE, AN AOP WAS FORMED TO DEVELOP THE LAND SIT UATED AT S. NO. 38, HISSA NO. 1, DHANORE, PUNE VIDE DEVELOPMENT AGREEMENT DAT ED 1 ST AUGUST, 2003. THE LAND AVAILABLE MEASURED 13,875 SQ. MTRS. FOR T HE DEVELOPMENT OF THE SAID LAND THE FIRST PLAN OF CONSTRUCTION WAS SANCTIONED ON 11.11.2003 UNDER WHICH 160 FLATS WERE TO BE DEVELOPED IN BUILDINGS A TO G. THE COPY OF THE SANCTIONED PLAN IS PLACED AT PAGES 81 AND 87 OF THE PAPER BOOK . THE SAID PLAN WAS REVISED AND THE SECOND PLAN WAS SANCTIONED ON 10.07 .2006 UNDER WHICH THE PLAN OF THE ASSESSEE WAS TO CONSTRUCT 148 FLATS IN BUILDING A TO F. THE COPY OF THE SANCTIONED PLAN IS PLACED AT PAGES 83 AND 85 OF THE PAPER BOOK. AS PER THE ASSESSEE AND EVEN AS MENTIONED IN THE PLAN SANCTION ED ON 10.07.2006 THE TOTAL PLOT AREA AVAILABLE WITH THE ASSESSEE IS 1387 0 SQ. MTRS., ON WHICH BUILDABLE AREA IS 8839.69 SQ. MTRS. AS PER THE SAN CTIONED PLANS THE TOTAL COVERED AREA OF 148 FLATS IS 8827.46 SQ. MTRS. IN OTHER WORDS, FOR THE CONSTRUCTION OF 148 FLATS THE TOTAL AVAILABLE AREA WAS CONSUMED AS PER SANCTIONED PLANS. THE ASSESSEE FURTHER POINTED OUT THAT IT CONSTRUCTED THE 148 FLATS IN BUILDINGS A TO G AND CONSUMED THE AVAILABL E BUILDABLE AREA. THE ASSESSEE RECEIVED THE COMPLETION CERTIFICATE DATED 05.05.2006 FOR THE CONSTRUCTION OF 56 FLATS IN BUILDINGS A AND B, DATE D 18.10.2006 FOR 56 FLATS IN BUILDINGS C AND D AND FINALLY ON 31.03.2008 FOR 36 FLATS IN BUILDINGS E AND F. THE COPIES OF THE COMPLETION CERTIFICATES ARE PLACE D AT PAGES 91 TO 95 OF THE PAPER BOOK. THE ASSESSEE FOR A BUILDING WHICH WAS SANCTIONED ON 11.11.2003, IN ORDER TO AVAIL THE DEDUCTION U/S. 80IB(10) OF TH E ACT HAS TO COMPLETE THE PROJECT BY 31.03.2008. THE PROJECT WAS FOR CONSTRU CTION OF 148 FLATS AND THE ASSESSEE HAS COMPLETED THE CONSTRUCTION OF 148 FLAT S WITHIN THE STIPULATED TIME ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 8 PROVIDED UNDER THE ACT I.E. BY 31.03.2008 AND HAS E VEN RECEIVED THE COMPLETION CERTIFICATE FOR THE SAID FLATS BY 31.03. 2008. IN OTHER WORDS, THE PLAN TO CONSTRUCT 148 FLATS WHICH WAS ENVISAGED BY THE A SSESSEE WAS COMPLETED WITHIN THE STIPULATED PERIOD AND HENCE, THE ASSESSE E WAS ELIGIBLE TO THE AFORESAID DEDUCTION. HOWEVER, THE ASSESSEE HAS CON STRUCTED FURTHER FLATS FOR WHICH SANCTION WAS TAKEN FROM THE PMC ON 09.05.2008 . UNDER THE SAID SANCTION THE ASSESSEE WAS TO CONSTRUCT 20 MORE FLAT S IN BUILDING F AND 40 FLATS IN BUILDING G. TILL THE DATE OF PASSING OF THE ASS ESSMENT ORDER, THE ASSESSEE HAD NOT EVEN STARTED THE CONSTRUCTION ON BUILDING G . HENCE, THE DISPUTE IS CENTERED AROUND THE 20 FLATS CONSTRUCTED IN BUILDIN G F FOR WHICH THE SANCTION WAS RECEIVED ON 09.05.2008. 10. THE CASE OF THE AUTHORITIES BELOW WAS THAT THE SAID CONSTRUCTION OF ADDITIONAL FLATS IN BUILDING F WAS PART AND PARCEL OF THE EARLIER BUILDING PLAN SANCTIONED AND SINCE, THE SANCTION FOR THE ADDITION AL FLATS WAS BEYOND THE DATE AVAILABLE TO THE ASSESSEE TO COMPLETE ITS ELIGIBLE PROJECT HENCE, THE ASSESSEE IS NOT ENTITLED TO CLAIM THE DEDUCTION U/S. 80IB(10) O F THE ACT. HERE IT MAY BE CLARIFIED THAT THE ASSESSEE HAD CLAIMED DEDUCTION U /S. 80IB(10) OF THE ACT IN ASSESSMENT YEARS 2007-08 AND 2009-10 WHICH HAS BEEN ALLOWED TO THE ASSESSEE. HOWEVER, IN ASSESSMENT YEAR 2010-11 FURT HER DEDUCTION CLAIMED BY THE ASSESSEE HAS BEEN DENIED. FURTHER, THE ASSESSE E HAS SUBMITTED THAT IT HAS NOT CLAIMED ANY DEDUCTION U/S. 80IB(10) OF THE ACT ON THE ADDITIONAL FLATS CONSTRUCTED IN BUILDING F. THE PLEA OF THE ASSESSE E BEFORE US WAS THAT THE SECOND PHASE COULD NOT BE PART OF THE FIRST PHASE S INCE, THE SECOND PHASE WAS CONSTRUCTED AFTER RECEIVING ADDITIONAL FSI OF 2977. 60 SQ. MTRS. WHEN THE FIRST PHASE OF BUILDING WAS SANCTIONED THE PERMISSIBLE AR EA TO BUILD WAS 8839.69 SQ. MTRS. AND THE ASSESSEE HAD UTILIZED THE AREA OF 882 7.46 SQ. MTRS. FOR THE CONSTRUCTION OF 148 FLATS. IN OTHER WORDS, NO FSI WAS AVAILABLE TO CONSTRUCT THE ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 9 ADDITIONAL 20 FLATS IN F BUILDING AND 40 FLATS IN G BUILDING. THE ADDITIONAL FSI BECAME AVAILABLE AFTER 31.03.2008 TO THE ASSESSEE B ECAUSE OF CHANGE IN THE PERMISSIBLE FSI, ON ACCOUNT OF VARIATION IN FSI OF DP ROAD AND AMENITY SPACE. THE PERMISSIBLE FSI INCREASED FROM 8839.69 SQ. MTRS . TO 11811.19 SQ. MTRS. I.E. INCREASED BY 2971.50 SQ. MTRS., WHICH ENABLED THE A SSESSEE TO TAKE UP THE SECOND PART OF THE PROJECT. UNDER SUCH CIRCUMSTANC ES THE ISSUE WHICH ARISES IS WHETHER THE SO CALLED SECOND PROJECT IS A DIFFERENT PROJECT FROM PHASE 1 PROJECT AND THE SAME IS NOT TO BE CONSIDERED WHILE DETERMIN ING THE ELIGIBILITY OF CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF TH E FIRST PROJECT. 11. ON CONSIDERATION OF THE TOTALITY OF THE FACTS A ND CIRCUMSTANCES WHEREIN WHEN THE ASSESSEE INITIALLY STARTED THE PROJECT ON THE SAME PLOT AREA OF 13800 SQ. MTRS., IT HAD UTILIZED THE COMPLETE FSI AVAILAB LE AND HAD SOUGHT SANCTION OF CONSTRUCTION OF 148 FLATS WHICH WAS ALLOWED TO THE ASSESSEE BY WAY OF THE FIRST PLAN SANCTIONED ON 11.11.2003 AND THE SECOND PLAN W AS SANCTIONED ON 10.07.2006. AS PER THE SECOND PLAN THE TOTAL FLATS TO BE CONSTRUCTED BY THE ASSESSEE WERE 148 FLATS IN BUILDINGS A TO F ON TOTA L AREA OF 8827.46 SQ. MTRS. AS AGAINST THE BUILT UP AREA OF 8839.69 SQ. MTRS. T HE ASSESSEE UTILIZED THE TOTAL AVAILABLE AREA AND ONCE THE AREA WAS CONSUMED, THE PROJECT WHICH WAS INITIALLY ENVISAGED BY THE ASSESSEE WAS CONSTRUCTED AND COMPL ETED BY 31.03.2008. THE ASSESSEE EVEN RECEIVED THE COMPLETION CERTIFICA TE FOR ALL THE BUILDINGS BY 31.03.2008. ACCORDINGLY, WE HOLD THAT THE PROJECT FOR CONSTRUCTION OF 148 FLATS IS AN INDEPENDENT PROJECT WHICH WAS SANCTIONED AS PER REVISED PLAN DATED 10.07.2006 AND AS PER THE PROVISIONS OF SECTION THE PROJECT HAD TO BE COMPLETED BY 31.03.2008. SINCE, THE ASSESSEE HAD C OMPLIED WITH ALL THOSE CONDITIONS IN RESPECT OF 148 FLATS, THEN THOSE 148 FLATS ARE PART OF ELIGIBLE PROJECT ON WHICH THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTIO N U/S. 80IB(10) OF THE ACT. ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 10 12. THE SECOND PHASE OF PLAN WHICH WAS SANCTIONED O N 09.05.2008 MATERIALIZED ONLY BECAUSE OF ADDITIONAL FSI AVAILAB LE WITH THE ASSESSEE AFTER 31.03.2008. ONCE, ADDITIONAL FSI WAS AVAILABLE TO THE ASSESSEE, IT SOUGHT PERMISSION OF PMC TO BUILD ADDITIONAL FLATS IN ONE OF THE EXISTING BUILDINGS AND TO CONSTRUCT BUILDING G. THE ASSESSEE HAS NOT CONS IDERED THE SAID ADDITIONAL FLATS TO BE PART OF THE ELIGIBLE PROJECT BUT SINCE, THE FLATS WERE IN BUILDING WHICH WAS PART OF THE EARLIER PROJECT, THE ASSESSING OFFI CER AND THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE PROJECT WAS NOT COMPLETED BY 31.03.2008. WHILE INTERPRETING BENEFICIAL PROVISIONS OF THE ACT I.E. U/S. 80IB(10) OF THE ACT, THE AUTHORITIES BELOW ARE REQUIRED TO TAKE A PRAGMA TIC VIEW OF THE MATTER. IN THE PRESENT CASE, WHEN THE ASSESSEE ENVISAGED THE CONST RUCTION OF PROJECT PHASE 1 THEN HE HAD PERMISSIBLE AREA TO A CERTAIN EXTENT, U NDER WHICH HE COULD ONLY CONSTRUCT 148 FLATS, WHICH HE CONSTRUCTED AND COMPL ETED BY THE STIPULATED DATE. THE ASSESSEE HAD CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF THOSE 148 FLATS ONLY IN THE RESPECTIVE YEARS. HOWE VER, SINCE, THE ASSESSEE IS A BUSINESS MAN AND ON LATER DATE, BECAUSE OF THE ADDI TIONAL FSI AVAILABLE, THE ASSESSEE CONSTRUCTED ADDITIONAL SPACE, DOES NOT MEA N THAT THE ADDITIONAL FLATS CONSTRUCTED BY THE ASSESSEE WERE PART OF THE ELIGIB LE PROJECT, WHICH WAS SANCTIONED TO THE ASSESSEE IN 2003; BECAUSE IN 2003 THE ADDITIONAL FSI WAS NOT AVAILABLE TO THE ASSESSEE. HENCE, THE SITUATIO N WHICH ARISES IN FUTURE CANNOT BE DATED BACK TO DENY THE CLAIM OF DEDUCTION TO THE ASSESSEE. ACCORDINGLY, WE HOLD SO. IN OTHER WORDS, THE PROJE CT PHASE 2 IS AN INDEPENDENT PROJECT WHICH WAS SANCTIONED ON 09.05.2008 AND WAS CONSTRUCTED THEREAFTER AND ITS NON-COMPLETION CANNOT DENY THE CLAIM OF DED UCTION MADE BY THE ASSESSEE IN RESPECT OF PROJECT PHASE 1. THE ASSESS EE ADMITTEDLY HAS NOT CLAIMED ANY DEDUCTION U/S. 80IB(10) OF THE ACT ON T HE ADDITIONAL FLATS. IN ANY CASE AND WITHOUT PREJUDICE TO OUR ORDER, THE ASSESS EE IS ENTITLED TO PRORATA DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF CO MPLETED FLATS. ACCORDINGLY, ITA NO.687/PN/2014 M/S. AAIJI SUROBHI GROUP 11 WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT ON THE PROFITS OF THE PART OF ELIGIBLE PROJ ECT COMPRISING OF 148 FLATS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON THIS 3 RD DAY OF MARCH, 2017. SD/- SD/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) # / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 3 RD MARCH, 2017 . RK ' ( ) *+ ,+ / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; # # $ () THE CIT(A)-II, PUNE; # # $ / THE CIT-II, PUNE; '() **+,, # +, , . / DR A, ITAT, PUNE; )/0 1 / GUARD FILE. ' / BY ORDER, ' * // TRUE COPY // 2 3 / ASSISTANT REGISTRAR, # +, , / ITAT, PUNE