OM SAWMI SMARAN DEVELOPERS P. LTD, MUMBAI V. ITO 8(2)(4), MUMBAI

ITA 6915/MUM/2017

AI Insights

The case involves M/s. Om Swami Smaran Developers Pvt. Ltd., which appealed against the orders of the Learned Commissioner of Income Tax (Appeals)-17, Mumbai, for the Assessment Years 2012-13 and 2013-14. The primary issue was the disallowance of deduction under Section 80IB(10) of the Income Tax Act, 1961, due to the allotment of three flats to a single individual, which was against the conditions of the deduction. The Tribunal, referencing previous judgments and the legislative intent behind Section 80IB(10), decided to allow the deduction on a proportionate basis, thereby partially granting relief to the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123311 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-01-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 05-12-2017
• Other Referred Cases: M/s. Midas Polymer Compounds Pvt. Ltd. v. ACIT, Collector, Land Acquisition v. Mst Katiji and ors., Sreenivas Charitable Trust v. Dy. CIT, CIT v. Arun Excello Foundations (P) Ltd., CIT v. Brahma Associates, D.S. Kulkarni Developers Ltd. v. ACIT, ITO v. Air Developers, DCIT v. Brigade Enterprises Pvt. Ltd., ACIT v. Sheth Developers P. Ltd., Bengal Ambuja Housing Development Ltd. v. DCIT, Tushar Developers v. ITO, DCIT v. Ekta Housing Pvt. Ltd., CIT v/s Bramha Associates
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Period of limitation; Reasonable cause; Condonation of delay; Revised return
• Section: 143(3); 142(1); 115JB; 80IB; 143(1); 201; 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C”, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER AND MS KAVITHA RAJAGOPAL, HON'BLE JUDICIAL MEMBER ITA NOs. 6915 & 6916/MUM/2017 (A.Ys: 2012-13 & 2013-14) M/s. Om Swami Smaran Developers Pvt. Ltd., B/11, Uma Smruti 7 th Carter road, Borivali (E) Mumbai - 400066 PAN: AAACO8124A v. Income Tax Officer – 10(3)(2) Room No. 621, 6 th Floor Aayakar Bhavan, M.K. Road Mumbai - 400020 (Appellant) (Respondent) Assessee Represented by : Shri Fenil Bhatt Department Represented by : Ms. Anne Varghese Date of Hearing : 23.01.2023 Date of Pronouncement : 20.04.2023 O R D E R PER S. RIFAUR RAHMAN (AM) 1. These appeals are filed by the assessee against different orders of Learned Commissioner of Income Tax (Appeals)-17, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 26.05.2017 for the A.Ys. 2012-13 and 2013-14. ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 2 2. At the outset, we observe that the present appeals are filed by the assessee with a delay of 117 days and assessee also filed an affidavit in this regard and prayed for condonation of delay. Assessee filed an affidavit dated 21.02.2018 and submitted as under: - 2) “That I am working as a Junior Accountant in the Accounts Department of M/s. Om Swami Smaran Developers Private Limited. Whereas, Mr. Nilesh Mehta is my senior and he is designated as a Senior Accountant. 3) That in case of M/s. Om Swami Smaran Developers Private Limited, we have received an assessment order dated March 27, 2015 for Assessment Year 2012-13 issued under Section 143(3) of the Income Tax Act, 1961 ("the Act'). 4) That as per the said the assessment order, we have found that the Company's Returned Income have been enhanced by Rs.1,41,42,520 and a consequential demand of Rs.25,67,730 have been made against us. 5) That we were advised by our Legal Consultant that the said assessment order is factually and legally incorrect and we have to file an appeal before the Learned Commissioner of Income Tax (Appeals) ['CIT(A)']. The appeal filed against the assessment order was disposed by the Learned CIT(A) vide order dated May 26, 2017 rejecting our appeal. 6) That the order of the Learned CIT(A) was received on June 12, 2017 and therefore the appeal was required to filed before the Hon'ble Income Tax Appellate Tribunal, Mumbai (ITAT) on or before August 11, 2017. 7) That during the period when we have received the order of the Learned CIT(A) (i.e. June 5, 2017 till July 28, 2017), Mr.Nilesh Mehta was on leave and I have been instructed to look after all the daily accounting and taxation matters. However, I was not aware about the future course of action required to be taken on receipt of the order. Thus, I have decided to keep the order in my custody till Mr. Nilesh Mehta resumes the Office and ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 3 take necessary action after discussing the same with him. However, I had totally forgotten to inform the same to Mr. Nilesh Mehta and the order was remained unattended till the first week of December 2017. 8) That while discussing the status of hearing in respect of appeal filed before the Learned CIT(A) with our Legal Consultant (in the first week of December 2017),I have informed my Seniors and Director about the receipt of the order of the Learned CIT(A). During our meeting, we have been informed that an appeal against the order of the Learned CIT(A) before the Hon'ble Income-tax Appellate Tribunal ('ITAT') was required to be filed before 60 days from the date of receipt of the order of the Learned CIT(A). Accordingly, the appeal was required to filed before August 11, 2017. However, the same was filed was filed before the Hon'ble ITAT on December 6, 2017 with a delay of 117 days. 9) That we have no intention to jeopardize the interest of the revenue by delaying the filing of the appeal.” 3. Ld. DR objected for the condonation of delay and however, she has not filed any submissions against the affidavit as well as the facts described in the above affidavit. 4. Considered the submissions of both parties, we observe that in the case of M/s. Midas Polymer Compounds Pvt. Ltd., v. ACIT in ITA.No. 288/Coch/2017 the Coordinate Bench of the Tribunal has considered the issue of condonation of delay and by following various judicial precedents along with the decision of the Hon'ble Supreme Court in the case of Collector, Land Acquisiont v. Mst Katiji and ors. (167 ITR 471) condoned the delay of 2819 days observing as under: - ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 4 “6. We have heard the rival submissions and perused the record. There was a delay of 2819 days in filing the appeal before the Tribunal. The assessee has stated the reasons in the condonation petition accompanied by an affidavit which has been cited in the earlier para. The assessee filed an affidavit explaining the reasons and prayed for condonation of delay. The reason stated by the assessee is due to inadvertent omission on the part of Shri Unnikrishnan Nair N, CA in taking appropriate action to file the appeal. He had a mistaken belief that the appeal for this year was filed by the assessee as there was separate Counsel to take steps to file this appeal before the ITAT. Therefore, we have to consider whether the Counsel’s failure is sufficient cause for condoning the delay. The Madras High Court considered an identical issue in the case of Sreenivas Charitable Trust v. Dy. CIT (280 ITR 357) and held that mixing up of papers with other papers are sufficient cause for not filing the appeal in time. The Madras High Court further observed that the expression "sufficient cause" should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay. 6.1 On merit the issue is in favour of the assessee. But there is a technical defect in the appeal since the appeal was not filed within the period of limitation. The assessee filed an affidavit saying that the appeal was not filed because of the Counsel’s inability to file the appeal. The Revenue has not filed any counter affidavit to deny the allegation made by the assessee. While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder: (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 5 hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non deliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. In the case on our hand, the issue on merit regarding allowability of deduction u/s. 80IB of the Act was covered in favour of the assessee by the binding Judgment of the jurisdictional High Court. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the appeal was not filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalise injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalising an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 6 authority. Therefore, in our opinion, by preferring the substantial justice, the delay of 2819 days has to be condoned. 6.3 The next question may arise whether 2819 days was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT v. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the delay of condonation and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 2819 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM ) condoned more than six hundred days delay. It is pertinent to mention herein that the view taken by the present author in that case was overruled by the Third Member. 6.4. The Madras High Court in the case of Sreenivas Charitable Trust (supra) held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression "sufficient cause" the principle of advancing substantial justice is of prime importance and the expression "sufficient cause" should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal construction. In this case, the issue on merit regarding granting of deduction u/s. 80IB was covered in favour of the assessee by the Judgment of the jurisdictional High Court. Therefore, for the purpose of advancing substantial justice which is of prime importance in the administration of justice, the expression "sufficient cause" should receive a liberal construction. In our opinion, this Judgment of the jurisdictional High Court is also squarely applicable to the facts of this case. A similar view was taken by the Madras High Court in the case of Venkatadri ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 7 Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad). 6.5 The Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) (277 ITR 1) has condoned the delay of 180 days when the appeal was filed after the pronouncement of the Judgment of the Apex Court. Furthermore, the Revenue has not filed any counter-affidavit opposing the application of the assessee for condonation of delay. The Apex Court in the case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi (AIR 1978 SC 537) held that non-filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause for condonation of delay. In this case, the Revenue has not filed any counter-affidavit opposing the application of the assessee, therefore, as held by the Apex Court, there is sufficient cause for condonation of delay. The Supreme Court observed that when the delay was of short duration, a liberal view should be taken. "It does not mean that when the delay was for longer period, the delay should not be condoned even though there was sufficient cause. The Apex Court did not say that longer period of delay should not be condoned. Condonation of delay is the discretion of the Court/Tribunal. Therefore, it would depend upon the facts of each case. In our opinion, when there is sufficient cause for not filing the appeal within the period of limitation, the delay has to be condoned irrespective of the duration/period. In this case, the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for condoning the delay of 2819 days 6.6 In case the delay was not condoned, it would amount to legalise an illegal and unconstitutional order. The power given to the Tribunal is not to legalise an injustice on technical ground but to do substantial justice by removing the injustice. The Parliament conferred power on this Tribunal with the intention that this Tribunal would deliver justice rather than legalise injustice on technicalities. Therefore, when this Tribunal was empowered and capable of removing injustice, in our opinion, the delay of 2819 days has to be condoned and the appeal of the assessee has to be admitted and disposed of on merit. 6.7 In view of the above, we condone the delay of 2819 days in filing the appeal and admit the appeal for adjudication.” ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 8 5. Respectfully following the above said decision and for the sake of overall justice we condone the delay and admit the appeals for adjudication. 6. Since the issues raised in both these appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed off by this consolidated order. We are taking Appeal in ITA.No. 6915/MUM/2017 for Assessment Year 2012-13 as a lead appeal. 7. Brief facts of the case are, assessee filed its return of income on 28.09.2012 declaring total income of ₹.NIL under normal provisions and declared ₹.1,37,00,520/- u/s. 115JB of Income-tax Act, 1961 (in short “Act”). Subsequently revised return of income was filed by the assessee on 09.06.2014 declaring total income of ₹.NIL under normal provisions and u/s. 115JB of the Act at ₹.1,61,46,576/-. The return was processed u/s. 143(1) of the Act. The case was selected for scrutiny under CASS and notices u/s. 143(2) and 142(1) of Income-tax Act, 1961 (in short “Act”) were issued and served on the assessee. In response Authorised Representative of the assessee attended and submitted the relevant information as called for. ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 9 8. Assessee is engaged in the business of construction and development. The assessee has developed slum project at vile Parle known as Ajinkya Durga. The assessee is following mercantile system of accounting and recognizes the revenue on percentage completion method. The Assessing Officer observed that during the year assessee has declared sales at ₹.2,17,00,000/- and after debiting expenses net profit of ₹.1,37,00,520/-. Assessing Officer observed in revised computation of total income that assessee has claimed deduction u/s.80IB(10) of the Act amounting to ₹.1,65,88,576/- in respect of the profit earned from SRA project undertaken during the current year. He observed that as per Form no. 10CCB the project was commenced on 18.12.2006, this being the second assessment year where deduction u/s.80IB(10) of the Act being claimed by the assessee. during the assessment proceedings assessee was asked to justify the claim of deduction u/s. 80IB(10) of the Act. During the year Assessing Officer observed that assessee has allotted three flats bearing No. 201, 501 and 205 to Mr. Dwarkanath Tewari through the allotment letter dated 03.02.2010. However, assessee has not submitted any evidences of allotment. Further, he observed that in the statement of stock of flats as on 31.03.2010 the assessee has clearly mentioned that Mr. Dwarkanath Tewari has booked the flats 201, 501 and 502 with allotment letter dated ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 10 03.02.2010. However, the agreement is yet to be registered and accordingly, sales will be accounted as and when the agreement is executed. Further, he observed from statement of stock of flats as on 31.03.2012 the assessee has shown the amount received from Mr. Dwarkanath Tewari at ₹.56,00,000 for flat No. 201, ₹.56,00,000/- for Flat No. 501 and ₹.80,00,000/- for Flat No. 502. Accordingly, the assessee was asked to submit the justification for claim of deduction u/s. 80IB(10) of the Act and why it should not be disallowed. 9. In response, Ld. AR of the assessee submitted that even where certain conditions are not complied with, still the project would qualify for the deduction as a whole. Without prejudice to the above, it was stated that, even if more than one flat is sold to particular individual, it will be highly injustice to disallow the claim u/s. 80IB(10) in totality beside it should be disallowed on the proportionate basis to the extent of two flats sold to the individual and he relied on certain case laws to consider its case for pro-rata deduction. After considering the submissions of the assessee and verifying the claim of the assessee in detail, Assessing Officer rejected the submissions of the assessee. Further, he observed that during the course of the assessment proceedings for the A.Y. 2011-12 assessee has revised the return for A.Y. 2012-13 on 09.01.2014 wherein ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 11 the claim of deduction u/s. 80IB(10) of the Act has been reduced to ₹.66,29,682/- as against ₹. 1,41,47,520/-. Assessing Officer observed that from this it is clear assessee has in principle agreed that it has violated condition for claim of deduction u/s. 80IB(10) of the Act with the above observation Assessing Officer finally observed in his order that assessee has allotted three flats to Mr. Dwarkanath Tewari and therefore the same is against the provisions of clause (f) of section 80IB(10) of the Act. Since the conditions prescribed u/s. 80IB(10) of the Act have not been fulfilled by the assessee, its claim for deduction under the above said section is hereby rejected for this year also similar to the previous assessment year. Further, he observed that from the fact of filing revised return of income for the A.Y. 2012-13 also, it is clear that assessee in principle agreed that it has violated the conditions for claim of deduction u/s. 80IB(10) of the Act. Further, he observed on request to allow deduction u/s. 80IB(10) of the Act on pro-rata basis is also not acceptable as the Income-tax Act does not allow such deduction on pro-rata basis and hence the same is rejected. Accordingly, he disallowed he claim made by the assessee u/s. 80IB(10) of the Act. 10. Aggrieved assessee preferred an appeal before the Ld.CIT(A) and filed disallowance as under: - ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 12 “The Appellant respectfully submits that eventhough more than one flat have been sold to particular individual, it is highly injustice to disallow the entire claim made under Section 80IB(10) of the Act. Instead of this, disallowance should have been made on the proportionate basis to the extent of 2 flats sold to the same individual. Accordingly, the provisions of Section 8018(10) of the Act should be interpreted liberally. Further, it is submitted that even if the units constructed are both smaller and larger units with reference to the stipulated area, the profit derived from the construction of the smaller units i.e., within the stipulated area of 1,000 sq.ft. built-up area ought to be' allowed as deduction under Section 801B(10) of the Act. Accordingly, the theory of pro-rata deduction has to be approved. In support of the above contention, reliance has been placed on the following judicial pronouncements: i. Vishwas Promoters Private Limited vs. The Assistant Commissioner of Income Tax & Ors. 214 Taxman 524 (Madras High Court); ii. CIT vs. Arun Excello Foundations (P) Ltd. 212 Taxman 296 (Gujarat High Court); iii. CIT vs. Brahma Associates 333 ITR 289 (Bombay High Court); iv. D.S. Kulkarni Developers Ltd. vs. ACIT (Pune ITAT) ITA Nos. 1428 & 1429/PN/2008; v. ITO vs. Air Developers (Nagpur ITAT) 25 DTR 287; vi. DCIT vs. Brigade Enterprises Pvt. Ltd. (Banglore ITAT) 14 DTR 371; vii. ACIT vs. Sheth Developers P. Ltd. (Mumbai ITAT) 33 SOT 277; viii. Bengal Ambuja Housing Development Ltd. vs. DCIT (Kolkata ITAT) ITA No. 1595/Kol./2005; ix. Tushar Developers vs. ITO (Pune ITAT) ITA No. 165/PN/2007 and ITA No.94/PN/2008 and x. DCIT vs. Ekta Housing Pvt. Ltd. (Mumbai ITAT) ITA No. 3649/Mum./2009 ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 13 In view of the above facts and light of various judicial precedents, the Appellant request to grant the relief by allowing deduction under Section 80IB(10) of the Act in respect of residential units fulfilling the conditions prescribed under Section, 80IB(10) of the Act. Accordingly, the learned AO be directed to allow partial deduction of profit under Section 80 IB(10) of the Act and profit from sale of Flat Nos. 201 and 501 shall be tax. 11. After considering the submissions of the assessee, Ld.CIT(A) by relying on the findings of the Assessing Officer in preceding assessment year i.e., 2011-12 and decision of his predecessor in the same assessment year i.e., 2011-12 dismissed the appeal filed by the assessee. 12. Aggrieved assessee is in appeal before us raising following grounds in its appeal: - “Ground- 1: Deduction under Section 80IB(10) of the Act not allowed On the facts and in the circumstances of the case, the Learned CIT(A) has legally erred in confirming the order passed by the Learned AO not allowing the deduction under Section 80IB(10) of the Act. It is prayed that the Learned AO be directed to allow the deduction under Section 80IB(10) of the Act. The Appellant craves leave to add, alter, amend or withdraw all or any of the Grounds of Appeal herein and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing.” 13. At the time of hearing, Ld. AR of the assessee submitted that the issue under consideration is the claim of deduction u/s. 80IB(10) of the ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 14 Act and this being the second year of claim, he submitted that assessee has taken up the project of slum rehabilitation project and accordingly, assessee has claimed the deduction u/s. 80IB(10) of the Act. However, he agreed that three flats were allotted to one person and it is violation of the guidelines and as per section 80IB(f) of the Act. He submitted that to the extent of violation alone should be considered for disallowing the claim made by the assessee. However, assessee is eligible to claim proportionate deduction, for this proposition he submitted that in assessee’s own case for the A.Y. 2011-12 the Coordinate Bench has decided the issue in favour of the assessee. Copy of the order in ITA.No. 6355/Mum/2014 dated 31.01.2018 is placed on record. 14. On the other hand, Ld.DR relied on the findings of the lower authorities. 15. Considered the rival submissions and material placed on record, we observe from the record that assessee is carrying on slum rehabilitation project and accordingly, completed the projects under the above rehabilitation project during the assessment year, assessee has claimed deduction u/s. 80IB(10) of the Act which includes three flats which was allotted to one single person and the assessee has agreed that it has ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 15 violated the prescribed condition to claim the above deduction. We observe from the record that on similar facts on record the Coordinate Bench has considered the similar facts on record and adjudicated that assessee should be given proportionate basis of deduction on the other eligible business. The relevant decision of the Coordinate Bench for the A.Y. 2011-12 is extracted below: - “8. We have heard rival contentions and perused the material available on record. As could be seen from the facts available on record, the assessee has developed a housing project under the slum rehabilitation scheme of the Government. It is also a fact that in the impugned assessment year for the first time, the assessee had offered profit from the said housing project amounting to ` 1,48,66,701 and has claimed deduction thereof under section 80IB(10) of the Act. There is no dispute that the assessee has sold three flats to a single individual in the said housing project. The Assessing Officer has disallowed assessee’s claim of deduction alleging violation of conditions of clause–(f) of section 80IB(10) of the Act, which provides that more than one residential unit in a housing project cannot be sold to a person / individual. The factual matrix of the case reveals that except violation of conditions of clause–(f) of section 80IB(10) of the Act, in the sense that the assessee has sold three flats to a single individual, there is no allegation by the Departmental Authorities that any other conditions of section 80IB(10) of the Act in respect of any other flats of the housing project are violated. Thus, the issue before us is whether for violation of the conditions of clause–(f) of section 80IB(10) of the Act in respect of two flats, assessee’s claim of deduction in respect of entire housing project can be disallowed. In our view, reading the provisions of section 80IB(10) as a whole and the legislative intent / object behind introducing such provision into the statute would reveal that it is a beneficial provision introduced by the legislature to deal with the housing problem. Thus, such provision has to be construed liberally. Undisputedly, except violation of conditions of clause–(f) of section 80IB(10) of the Act in respect of two flats, all other conditions of section 80IB(10) of the Act are fulfilled in respect ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 16 of the housing project which is evident from the fact that there is no other allegation made by the Assessing Officer. Therefore, in our view, for violation of conditions of clause–(f) of section 80IB(10) of the Act in respect of two flats, the deduction for the entire housing project or in respect of other flats which otherwise are complying to the conditions of section 80IB(10) cannot be disallowed. The disallowance, if any, has to be restricted to the flats which violate the conditions of section 80IB(10). The Hon'ble Jurisdictional High Court in CIT v/s Bramha Associates, 333 ITR 289, has held that deduction under section 80IB(10) can be allowed on proportionate basis in respect of flats which fulfilled the conditions of section 80IB(10). The same view was expressed by the Hon'ble Madras High Court in the decisions cited by the learned Authorised Representative. In our view, the ratio laid down in the aforesaid decisions, though, are in the context of clause– (c) of section 80IB(10) of the Act, however, they will apply to the facts of the present case as there is not much difference in the object for which section 80IB(10) was introduced, even after introduction of clause– (e) and (f) to section 80IB(10) by Finance Act, 2009. Therefore, applying the ratio laid down in the decisions cited before us, we hold that the assessee will be entitled to deduction under section 80IB(10) of the Act proportionately in respect of flats which fulfilled all the conditions of section 80IB(10) of the Act. Accordingly, we direct the Assessing Officer to compute deduction under section 80IB(10) of the Act. Ground raised is partly allowed.” 16. Respectfully following the above said decision, we are inclined to grant relief to the assessee in this assessment year which is being the second year of claim of deduction by the assessee. Accordingly, we direct the Assessing Officer to allow proportionate claim of the assessee u/s.80IB(10) of the Act eliminating the three (3) flats allotted to Mr.Dwarkanath Tewari. 17. In the result, appeal filed by the assessee is allowed. ITA NOs. 6915 & 6916/MUM/2017 M/s. Om Swami Smaran Developers Pvt. Ltd., Page No. | 17 ITA.No. 6196/MUM/2017 (A.Y. 2013-14) 18. Coming to the appeal relating to A.Y. 2013-14, since facts in this case are mutatis mutandis, therefore the decision taken in A.Y. 2012-13 is applicable to this Assessment Year also. Accordingly, this appeal is allowed. 19. In the result, appeal filed by the assessee is allowed. 20. To sum-up, both the appeals filed by the assessee are allowed. Order pronounced in the open court on 20 th April, 2023 Sd/- Sd/- (KAVITHA RAJAGOPAL) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 20/04/2023 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum