DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-6, Jaipur V. M/S ASHIANA MANGALAM DEVELOPERS, Jaipur

ITA 784/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1881 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 26-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Keywords: Question of law
• Section: 80IB; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 784/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE- 6, JAIPUR. CUKE VS. M/S ASHIANA MANGLAM DEVELOPERS, 401, 3 RD FLOOR, APEX MALL, LAL KOTHI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AANFA4297N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJ MEHRA (J.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 30/11/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 30/11/2017 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 14.08.2017 OF CIT (A)-, JAIPUR FOR THE A.Y. 2013-14 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (APPEALS) WAS JUSTIFIED IN DELE TING THE ADDITION OF RS. 1,44,21,730/- MADE BY THE A.O. ON A CCOUNT OF DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80IB(10) WIT HOUT APPRECIATING THE FACT THAT THE BUILT UP AREA OF T HE VILLAS CONSTRUCTED BY THE ASSESSEE IS 1620.81 SQ. FT. THAT EXCEEDS THE ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 2 LIMIT OF 1500 SQ. FT. THEREBY IGNORING THE DEFINITI ON AS GIVEN IN SECTION 80IB(14)(A) OF THE INCOME TAX ACT, 1961. (II) WHETHER IN A VILLA, IF A BALCONY IS TERMED AS TERRACE BY THE BUILDERS, THE AREA OCCUPIED BY THE ALLEGED TERRAC E WILL NOT BE CONSIDERED AS PART OF THE BUILT UP AREA U/S 80IB( 14). 2. THE ASSESSEE IS A PARTNERSHIP FIRM AND DERIVES I NCOME FROM REAL ESTATE BUSINESS. THE ASSESSEE CLAIMED DEDUCTION U/S 80IB(10) IN RESPECT OF THE VARIOUS PROJECTS. THE AO REJECTED TH E CLAIM OF THE ASSESSEE ON THE GROUND THAT THE BUILT UP AREA OF THE RESIDENTIAL UNITS INCLUSIVE OF TERRACE IS MORE 1500 SQ. FT. THE AO HA S ALSO RELIED UPON THE ORDERS FOR THE EARLIER ASSESSMENT YEARS. ON APPEAL THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING ORDE R OF THIS TRIBUNAL IN ASSESSEES OWN CASE. 3. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE TH AT THIS ISSUE OF DENIAL DEDUCTION U/S 80IB (10) ON THE GROUND OF EXCEEDING THE BUILT UP AREA OF UNITS IS COMMON IN THIS YEAR AS WELL AS IN THE EARL IER YEARS. THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWI NG THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.YS. 2010-11 TO 2012-13. WE FURTHER NOTED THAT THE REVENUE CHALLENGED THE OR DERS OF THIS TRIBUNAL FOR THE A.YS. 2010-11 TO 2012-13 BEFORE TH E HONBLE JURISDICTION HIGH COURT AND HONBLE HIGH COURT VIDE DATED 14.11.2017 IN ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 3 ITA NO. 67,73 AND 166 OF 2017 HAS UPHELD THE ORDER OF THIS TRIBUNAL IN PARA 8 TO 10 ARE AS UNDER:- 8. WE HAVE HEARD COUNSEL FOR THE PARTIES. 9. BEFORE PROCEEDING WITH THE MATTER, IT WILL NOT B E OUT OF PLACE TO MENTION THAT THE TRIBUNAL BEING THE LAST FACT FINDI NG AUTHORITY HAS OBSERVED AS UNDER:- 34 FROM THE DECISIONS OF THE MADRAS HIGH COURT, B OMBAY HIGH COURT AND THE ITAT AHMEDABAD, DISCUSSED ABOVE IN PARA 3.3 ABOVE, IT IS SEEN THAT THE AREA UNDER CONS IDERING CANNOT BE INCLUDED IN THE BUILT UP AREA IF IT IS UNCOVERED, OPEN TO SKY, AND WITHOUT ANY CONSTRUCTION ON ITS, NOTWITHSTANDING THE FACT THAT IT IS A PRIVATE, EXCL USIVE AREA OF THE OWNER, ACCESSIBLE ONLY THROUGH THE DWELLING UNIT (BED ROOM) AND ADJOINING TO IT. IN THIS CASE, THE A REA UNDER CONSIDERATION IS THE ROOF OF THE GROUND FLOOR, IS U NCOVERED, OPEN TO SKY, AND WITHOUT ANY CONSTRUCTION ON IT ALT HOUGH IT IS ACCESSIBLE EXCLUSIVELY TO THE OWNER THROUGH THE BEDROOM (AND NOT A PART OF THE COMMON AREA). THEREFORE, FOL LOWING THE ABOVE CASE LAWS (DISCUSSED IN PAFRA 3.3, ABOVE) , THIS PRIVATE, OPEN TERRACE, CANNOT BE INCLUDED IN THE 'B UILT UP AREA' OF THE RESIDENTIAL UNIT, AS DEFINED IN SEC 80 IB(14)(A). THEREFORE, THE BUILT UP AREA OF THE RESIDENTIAL UNI TS IS LESS THAN 1500 SQ. FT. AND CONSEQUENTLY, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10). THESE GROUNDS ARE ALLOW ED.' THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE AO REJECTED THE CLAIM OF DEDUCTION UNDER SECTION 80IB (10) ONLY ON THE GROUND THAT A TERRACE IS AN ENTIRELY O PEN AND LARGE SPACE ON THE TOP MOST LEVEL OF A BUILDING, WH EREAS BALCONIES ARE RELATIVELY SMALLER AREAS AFFIXED TO A ROOM OF THE HOUSE. HE FURTHER OBSERVED THAT BALCONIES ARE ASSESSABLE ONLY THROUGH THE ROOM THAT THEY ARE ATTA CHED WITH AND TERRACES WILL USUALLY HAVE INDEPENDENT ENT RANCES. ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 4 THE ASSESSEE HAS DEMONSTRATED FROM THE PICTURES OF THE BUILDING THAT THE AREA IS A TERRACE AS IT IS COMPLE TELY OPEN AND IS A ROOF OF A ROOM UNDERNEATH. MERELY BECAUSE THE FIRST FLOOR ROOMS OF VILLA HAS AN OPENING ON THE TE RRACE, IN OUR CONSIDERED VIEW WOULD NOT MAKE THE TERRACE AS A BALCONY AS THE BALCONY NORMALLY IS ATTACHED WITH TH E ROOMS AND COVERED BY ENCLOSURE BUT IT IS NOT SUPPORTED BY THE WALLS OF THE ROOM UNDERNEATH. WE FIND THAT THE COOR DINATE BENCH UNDER THE IDENTICAL FACTS IN ITA NO. 12/KOL/2 014 IN THE CASE OF M/S ASHINA AMAR DEVELOPERS VS. ITO AFT ER CONSIDERING THE CASE LAW AND PROVISIONS OF SECTION 80IB HAS DECIDED THE ISSUE BY OBSERVING AS UNDER:- '4.2.1. WE FIND THAT THE LEARNED AO DURING THE COUR SE OF ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE INTER ALI A TO SUBMIT BEFORE HIM THE COPIES OF BROCHURE ISSUED BY THE ASSESSEE TO THE PROSPECTIVE BUYERS FOR EFFECTING TH E SALE OF RESIDENTIAL UNITS DURING THE ASST YEAR UNDER APPEAL . THE ASSESSEE DULY MADE AVAILABLE THE COPIES OF THE BROC HURE ISSUED IN ORDER TO ATTRACT PROSPECTIVE BUYERS AND A LSO COPIES OF ORIGINAL SALE DEEDS BEFORE THE LEARNED AO WHICH WERE DULY RETURNED BY THE LEARNED AO AFTER VERIFICA TION. WE FIND THAT THE LEARNED AO CALCULATED THE SUPER BU ILT UP AREA OF EACH BUILDING BASED ON THE BROCHURES BY INC LUDING THE AREA OF OPEN TERRACE AND THEREFROM ESTIMATED TH E BUILT UP AREA BY TAKING 90% OF THE SUPER BUILT UP AREA OF EACH BUILDING AS BUILT UP AREA. WE FIND THAT THE LEARNED AO BRUSHED ASIDE THE ARGUMENT OF THE ASSESSEE THAT THE BROCHURES ARE ONLY INDICATIVE IN NATURE AND THE ACT UALS MAY VARY FROM WHAT IS STATED IN THE BROCHURES. THE ASSE SSEE ALSO TRIED TO EXPLAIN THAT AS PER THE SALE DEED WHI CH WAS REGISTERED WITH REGISTRAR FOR STAMP DUTY PURPOSES, THE TOTAL BUILT UP AREA OF EACH BUILDING WAS BELOW THE MAXIMU M AREA SPECIFIED IN SECTION 80IB(10) OF THE ACT. THE LEARNED AO SIMPLY IGNORED THE SALE DEEDS THAT WERE PRODUCED ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 5 BEFORE HIM AND PLACED RELIANCE ON THE BROCHURES ISS UED BY THE ASSESSEE TO ATTRACT PROSPECTIVE BUYERS AND ESTI MATED THE BUILT UP AREA BY INCLUDING THE TERRACE AREA. WE FIND THAT THE ACTUAL BUILT UP AREA OF RESIDENTIAL BUILDI NG SHOULD NOT EXCEED THE MAXIMUM AREA SPECIFIED IN THE ACT AN D THERE IS NO SCOPE FOR MAKING THE ASSUMPTIONS AND ESTIMATES. 4.2.2. RELIANCE IS PLACED ON THE CO-ORDINATE BENCH DECISIO N OF MUMBAI TRIBUNAL IN THE CASE OF ACIT VS SHETH DEVELOPERS REPORTED IN 33 SOT 277 (MUM)WHEREIN IT W AS HELD THAT THE BUILT UP AREA HAS TO BE CALCULATED ON AN ACTUAL BASIS AND NOT ON THE BASIS OF ESTIMATES. IN THAT CA SE, THE AO RELIED ON A RATIO WORKED OUT FROM THE MAP ATTACH ED WITH THE OCCUPANCY CERTIFICATE, FOR ARRIVING AT THE BUILT UP AREA FROM THE CARPET AREA WHICH WAS TURNED DOWN BY THE TRIBUNAL. 4.2.3. WE ALSO FIND LOT OF FORCE IN THE ALTERNATIVE ARGUMENTS OF THE LEARNED AR THAT THE TERM 'TERRACE' IS NOT DEFINED IN THE ACT. HOWEVER THE WORD 'TERRACE' ORIG INATES FROM A FRENCH TERM AND IS KNOWN AS TERRACE, TERRAZZ O IN ITALIAN AND SPELLED AS TERRACE IN SPANISH. THIS IS AN OUTDOOR EXTENSION THAT CAN BE OCCUPIED BY LOTS OF PEOPLE AN D IS BEYOND GROUND LEVEL. A TERRACE HAS MORE SPACE AND W ITH AN OPEN-TOP. WE FIND THAT THE DEFINITION OF BUILT UP A REA MEANS INNER MEASUREMENT OF THE RESIDENTIAL UNIT AT THE FL OOR LEVEL INCLUDING THE PROJECTIONS AND BALCONIES AS INCREASE D BY THE THICKNESS OF THE WALLS BUT DOES NOT INCLUDE THE COM MON AREAS SHARED WITH OTHER RESIDENTIAL UNITS. HENCE IT COULD BE CONCLUDED THAT THE OPEN TERRACE IS NOT COVERED WITH IN THE MEANING OF BUILT UP AREA AS IT IS OPEN TO SKY AND W OULD NOT BE PART OF THE INNER MEASUREMENT OF THE RESIDENTIAL FLOOR AT ANY FLOOR LEVEL. RELIANCE IN THIS REGARD IS MADE ON THE DECISION OF THE COORDINATE BENCH OF AHMEDABAD TRIBU NAL IN THE CASE OF AMALTAS ASSOCIATES VS ITO REPORTED IN 1 31 ITD ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 6 142 (AHD.) WHEREIN IT WAS HELD THAT THE DEFINITION OF BUILT UP AREA IS INCLUSIVE OF BALCONY BUT NOT OPEN TERRAC E. IT FURTHER HELD THAT DVO HAS CONSIDERED THE OPEN TERRA CE AS ANALOGOUS TO BALCONY/ VERANDAH WITHOUT ANY BASIS. THEREFORE, IT TOOK THE VIEW THAT THE AUTHORITIES BE LOW WERE NOT JUSTIFIED IN TAKING THE OPEN TERRACE AS BALCONY / VERANDAH REJECTING THE CLAIM OF THE ASSESSEE. 4.2.4. RELIANCE IN THIS REGARD IS PLACED ON THE DEC ISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS M/S MAHALAKSHMI HOUSING IN TAX CASE (APPEAL) NOS. 583 & 584 OF 2011 AND 316 & 317 OF 2012 DATED 2.11.2012, WHER EIN THE QUESTIONS RAISED BEFORE THEIR LORDSHIPS AND THE DECISION RENDERED THEREON ARE AS UNDER:- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLATE TRIBUNAL IS RIGHT IN LAW IN HOLDING THAT THE PRIVATE TERRACE AREA SHOULD BE INCLUDED IN THE BUILT UP ARE A OF THE FLATS FOR THE PURPOSE OF MAKING OUT STATUTORY EXTEN T OF BUILT UP AREA AS PER CLAUSE (A) OF SECTION 80IB(14) OF TH E INCOME TAX ACT ? HELD: 5. IT IS SEEN FROM THE FACTS NARRATED HEREIN THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION . THE ASSESSEE ENTERED INTO AN AGREEMENT OF SALE WITH ONE ASHOK KUMAR FOR JOINT DEVELOPMENT OF THE PROPERTY. THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80IB(1 0) OF THE INCOME TAX ACT IS REJECTED ON THE GROUND THAT T HE ASSESSEE WAS NOT THE OWNER OF THE LAND. AGGRIEVED B Y THE SAME, THE ASSESSEE WENT ON APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), WHO DISMISSED THE APPEAL. AGGRIEVED BY THE SAME, THE ASSESSEE WENT ON FURTHER APPEAL BEFORE THE INCOME TAX APPELLATE TRIB UNAL. 6. THE TRIBUNAL CONSIDERED THE ASSESSEE'S APPEAL AL ONG WITH TWO OTHER ASSESSEES' APPEALS INVOLVING SIMILAR ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 7 QUESTIONS OF LAW AND PASSED A COMMON ORDER. ONE SUC H ASSESSEE'S CASE CAME UP FOR CONSIDERATION IN T.C.NO S.581, 1186 OF 2008 AND 136 OF 2009 IN THE CASE OF CEEBROS HOTELS P\IT. LTD. VS. DEPUTY COMMISSIONER OF INCOME 'TAX. 8Y JUDGMENT DATED 19.10.2012, THIS COURT ALLOWED TH E ASSESSEE'S APPEAL, HOLDING THAT THE OPEN TERRACE AR EA CANNOT FORM PART OF THE BUILT UP AREA; IN THE RESUL T, THE ASSESSEE WOULD BE ENTITLED TO DEDUCTION UNDER SECTI ON 80- IB(10) OF THE ACT AND THAT THE ASSESSEE WOULD BE EN TITLED TO PROPORTIONATE RELIEF AS REGARDS THE UNITS HAVING BUILT UP AREA NOT MORE THAN 1500 SQ.FT. 7. EVEN THOUGH LEARNED STANDING COUNSEL FOR THE REVENUE RAISED ADDITIONAL GROUNDS REGARDING THE PRI NCIPLE OF PROPORTIONALITY FOR GRANT OF RELIEF, YET, WE FIN D BY REASON OF EXCLUSION OF OPEN TERRACE ARE FROM THE BUILT UP AREA, APPLICATION OF PROPORTIONALITY THEORY DOES NOT ARIS E. IN THE CIRCUMSTANCES, WE FIND NO JUSTIFIABLE GROUND TO ACC EPT THE PLEA OF THE REVENUE ON THIS ASPECT. 8. AS FAR AS THE REVENUE'S CONTENTION THAT FOR THE PURPOSE OF SECTION 80-IB(10) DEDUCTION, THE ASSESSE E SHOULD HAVE OWNED THE PROPERTY IS CONCERNED, THE SA ME IS LIABLE TO BE REJECTED BY REASON OF OUR DECISION REN DERED IN T.C.NOS. 581, 1186 OF 2008 AND 136 OF 2009 - CEEBRO S HOTELS PVT LTD V. DEPUTY COMMISSIONER OF INCOME TAX DATED 19.10.2012. HENCE, THE APPEALS FILED BY T HE REVENUE VIZ., T.C. (A). NOS. 583 AND 584 OF 2011 ST ANDS DISMISSED AND THIS PORTION OF THE TRIBUNAL'S ORDER STANDS CONFIRMED. THE ASSESSEE'S APPEALS IN T.C.NOS.316 AN D 317 OF 2012 STAND ALLOWED, HOLDING THAT THE TERRACE ARE A. NO COSTS.' 4.2.5. RELIANCE IS ALSO PLACED ON THE DECISION OF T HE CO- ORDINATE BENCH DECISION OF PUNE TRIBUNAL IN THE CAS E OF SHRI NARESH T. WADHWANI VS DCIT IN ITA NO.S 18, 19 & 20 ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 8 /PN/2013 FOR ASST YEARS 2007-08,2008-09 & 2009-10 D ATED 28.10.2014, WHEREIN IT WAS HELD THAT :- 18. A BARE PERUSAL OF THE AFORESAID QUESTION OF LAW BEFORE THE HON'BLE MADRAS HIGH COURT WOULD REVEAL T HAT THE ISSUE RELATED TO WHETHER OPEN SPACE OF THE TERR ACE WOULD FALL WITHIN THE EXPRESSION 'BUILT-UP AREA'. T HE FACTS BEFORE THE HON'BLE HIGH COURT WERE THAT ASSESSEE HA D CONSTRUCTED VARIOUS APARTMENT BLOCKS AND EACH BLOCK HAD 64 APARTMENTS. THE APARTMENTS LOCATED AT FIRST TO S IXTH FLOOR WERE OF AREAS LESS THAN 1500 SQ.FT.. HOWEVER, THE FLATS LOCATED ON THE 7TH FLOOR HAD THE ADVANTAGE OF EXCLU SIVE OPEN TERRACE. WHILE CONSIDERING THE RELIEF U/S 801B (10) OF THE ACT, THE ASSESSING OFFICER TOOK INTO CONSIDERAT ION THE AREA OF SUCH EXCLUSIVE/PRIVATE OPEN TERRACE AS A PA RT OF THE BUILT-UP AREA OF THE UNITS LOCATED AT THE 7TH FLOOR . AFTER CONSIDERING THE ABOVE ASPECT, THE BUILT-UP AREA OF THE FLATS LOCATED AT THE 7TH FLOOR EXCEEDED 1500 SQ.FT. AND H ENCE THE ASSESSING OFFICER HELD THAT THE CONDITION PRESCRIBE D IN CLAUSE (C) OF SECTION 8018(10) OF THE ACT WAS NOT F ULFILLED. THE SAID POSITION TAKEN BY THE ASSESSING OFFICER WA S UPHELD RIGHT UP TO THE TRIBUNAL. HOWEVER, THE HON'B LE HIGH COURT DISAGREED WITH THE STAND OF THE REVENUE AND H ELD THAT SUCH OPEN TERRACE WOULD NOT BE INCLUDIBLE IN T HE CALCULATION OF 'BUILT-UP AREA' FOR THE PURPOSE OF E XAMINING THE CONDITION PRESCRIBED IN CLAUSE (C) OF SECTION 8 01B(10) OF THE ACT. IN THIS VIEW OF THE MATTER, THE AFORESA ID JUDGEMENT OF THE HON'BLE MADRAS HIGH COURT AND WHIC H HAS BEEN FURTHER AFFIRMED IN A SUBSEQUENT DECISION IN THE CASE OF SANGHVI AND DOSHI ENTERPRISE (SUPRA), COVER S THE ISSUE BEFORE US. 19. HOWEVER, IN THE COURSE OF HEARING, THE LEARNED CIT - OR ATTEMPTED TO DISTINGUISH THE JUDGEMENT OF THE HO N'BLE HIGH COURT BY POINTING OUT THAT THE SAME RELATED TO ASSESSMENT YEAR 2003-04, A PERIOD DURING WHICH THE ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 9 DEFINITION OF 'BUILTUP AREA' CONTAINED IN SECTION 8 01B(14)(A) OF THE ACT WAS NOT ON THE STATUTE AND ALSO THE FACT THAT THE HOUSING PROJECT UNDER CONSIDERATION OF THE HON'BLE HIGH COURT WAS APPROVED BY THE CONCERNED LOCAL AUTHORITY PRIOR TO 01.04.2005 I.E. PRIOR TO THE DATE WHEN THE DEFIN ITION OF 'BUILT-UP AREA' WAS BROUGHT ON THE STATUTE BY WAY O F SECTION 80IB(14)(A) OF THE ACT. 20 WE HAVE CAREFULLY PERUSED THE JUDGEMENT OF THE HON'BLE MADRAS HIGH COURT AND FIND THAT THOUGH THE HON'BLE HIGH COURT WAS CONSIDERING A PROJECT APPROV ED PRIOR TO 01.04.2005 YET IT HAS TAKEN INTO CONSIDERA TION THE DEFINITION OF 'BUILT-UP AREA' CONTAINED IN SECTION 801B(14)(A) OF THE ACT, WHICH WAS INSERTED W.E.F. 01.04.2005. A S PER THE HON'BLE HIGH COURT EVEN AFTER ASSUMING THAT SUC H DEFINITION WAS TO BE RETROSPECTIVELY APPLIED YET TH E AREA OF OPEN TERRACE WOULD NOT FALL WITHIN THE MEANING OF T HE EXPRESSION 'BUILT-UP AREA'. THE HON'BLE HIGH COURT REFERRED TO THE INDIAN STANDARD METHOD OF MEASUREMENT OF PLI NTH, CARPET AND RENTABLE AREAS OF BUILDINGS AS ISSUED OF BUREAU OF INDIAN STANDARDS AND ALSO THE MEANING OF THE AFO RESAID EXPRESSION ASSIGNED AS PER THE RULES AND REGULATION S OF THE LOCAL AUTHORITY AND CONCLUDED THAT AN OPEN TERRACE COULD NOT BE EQUATED TO A 'PROJECTION' OR 'BALCONY' REFER RED TO IN SECTION 80IB(14)(A) OF THE ACT. 21. NOTABLY, THE HON'BLE HIGH COURT ALSO CONSIDERED AN ARGUMENT FROM THE SIDE OF THE REVENUE TO THE EFFECT THAT THE SALE OF THE AREA OF OPEN TERRACE BY THE ASSESSE E TO THE RESPECTIVE PURCHASER WOULD JUSTIFY THE INCLUSION OF SUCH TERRACE AREA INTO THE CALCULATION OF 'BUILT-UP AREA '. BEFORE US ALSO, THE LEARNED CIT-DR HAS RAISED THE SAID ISSUE THOUGH SHE HAS FAIRLY CONCEDED THAT SUCH A FINDING WAS NOT EMERGING FROM THE ORDERS OF THE LOWER AUTHORITIES. BE THAT AS IT MAY, THE HON'BLE HIGH COURT HAS NOTED AND DEA LT WITH THE SAID ARGUMENT IN THE FOLLOWING WORDS ;- ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 10 29. THUS, IN THE FACE OF TERRACE BEING AN OPEN AR EA, NOT BEING A PROJECTION AND HENCE NOT INCLUDED IN THE PL INTH AREA, THE QUESTION HEREIN IS AS TO WHETHER THE TRIB UNAL IS JUSTIFIED IN CONFIRMING THE ORDER OF ASSESSMENT TO INCLUDE THE TERRACE AREA INTO THE BUILT-UP AREA SOLELY BY R EASON OF THE FACT THAT THE ASSESSEE HAS SOLD IT TO PURCHASE RS OF THE 7 TH FLOOR AS A PRIVATE TERRACE. 30. WE DO NOT THINK, THE TRIBUNAL IS JUSTIFIED IN T AKING THE VIEW THAT OPEN TERRACE WOULD FORM PART OF THE BUILT -UP AREA FOR THE PURPOSE OF SUB-CLAUSE (C) OF SECTION 80-IB( 10). AS ALREADY SEEN IN THE PRECEDING PARAGRAPHS, AN ASSESS EE HAVING AN APPROVED PLAN PROJECT ALONE HAS THE RIGHT TO CLAIM DEDUCTION UNDER SECTION 80-IB. ANY PROJECT UNDERTAKEN NOT APPROVED BY THE LOCAL AUTHORITY IS O UTSIDE THE PURVIEW OF THE ACT. THUS, WHEN A LOCAL AUTHORIT Y, ENDOWED WITH THE JURISDICTION TO GRANT THE APPROVAL IS GUIDED IN ITS APPROVAL BY REGULATION AS TO WHAT CON STITUTES THE PLINTH AREA, WHICH IS THE BUILT-UP AREA, IT IS DIFFICULT FOR US TO AGREE WITH THE CONTENTION OF THE REVENUE AS W ELL AS THE REASONING OF THE TRIBUNAL THAT FOR THE PURPOSE OF CONSIDERING THE CLAIM UNDER SECTION 80-IB, THE BUIL T-UP AREA WOULD BE DIFFERENT FROM WHAT HAS BEEN GIVEN APPROVA L BY THE LOCAL AUTHORITY, ON A BUILDING PROJECT. GIVEN T HE FACT THAT DURING 2003-04 THERE WAS NO DEFINITION AT ALL ON WHAT A BUILT-UP AREA IS, THE UNDERSTANDING OF THE REVENUE, WHICH IS EVIDENTLY CONTRARY TO THE APPROVAL OF THE LOCAL AUT HORITY BASED ON THE RULES AND REGULATIONS COULD NOT BE SUS TAINED. CONSEQUENTLY, WE HAVE NO HESITATION IN AGREEING WIT H THE ASSESSEE'S CONTENTION THAT OPEN TERRACE AREA, EVEN IF BE PRIVATE TERRACE CANNOT FORM PART OF THE BUILT- UP A REA' 22. AS PER THE HON'BLE HIGH COURT, TERRACE AREA WOU LD NOT FORM PART OF THE BUILT-UP AREA BY THE REASON OF THE FACT THAT ASSESSEE SOLD IT TO THE PURCHASER AS A PRIVATE TERR ACE. AT THIS STAGE, WE MAY ALSO POINT OUT THAT THERE IS NOT HING IN ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 11 SECTION 80IB(14)(A) OF THE ACT TO SUGGEST THAT THE FACTUM OF THE TERRACE BEING AVAILABLE FOR EXCLUSIVE USE OF TH E RESPECTIVE UNIT OWNER IS A GROUND TO CONSIDER IT AS A PART OF 'BUILT-UP AREA' FOR THE PURPOSES OF CLAUSE (C) OF S ECTION 80IB(10) OF THE ACT. THUS, THE ARGUMENT OF THE LEAR NED CIT- OR IS HEREBY REJECTED. 23. IN VIEW OF THE AFORESAID JUDGMENT OF THE HONBL E MADRAS HIGH COURT, WE ARE UNABLE TO UPHOLD THE STAND OF TH E ASSESSING OFFICER TO INCLUDE AREA OF TERRACE AS A P ART OF THE BUILT-UP AREA IN A CASE WHERE SUCH TERRACE IS A P ROJECTION ATTACHED TO THE RESIDENTIAL UNIT AND THERE BEING N O ROOM UNDER SUCH TERRACE, EVEN IF THE SAME IS AVAILABLE E XCLUSIVELY FOR THE RESPECTIVE UNIT- HOLDERS. 10. EVEN THE JUDGMENT OF GUJARAT HIGH COURT IN AMAL TAS ASSOCIATES (SUPRA) IS VERY CLEAR AND IN OUR CONSIDE RED OPINION EVEN AFTER AMENDMENT THE LEGISLATURE HAS INCLUDED T HE BALCONY AND PROJECTION BUT NOT THE TERRACE. SINCE THIS ISSUE IS NOW COVERED BY THE DECISION OF THIS TRIBUNAL AS WELL AS THE HONBLE HIGH COURT IN ASSESSEES OWN CASE (SUPR A). ACCORDINGLY, BY FOLLOWING THE DECISION OF HONBLE JURISDICTION HIGH COURT WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF LD . CIT(A). IN THE RESULT, THE REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/11/2017 SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER ITA NO. 784/JP/2017 DCIT VS. M/S ASHIANA MANGLAM DEVELOPERS 12 TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/11/2017. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- DCIT, CIRCLE-6, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S ASHIANA MANGLAM DEVELOPERS, 401 , 3 RD FLOOR, APEX MALL, LAL KOTHI, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 784/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR