ACIT,Cir.-4, Pune V. M/s. Kumar Builders Consortium, Pune

ITA 819/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2009 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 13-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Capital asset; Question of law
• Section: 80IB; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.819/PN/2011 (ASSTT. YEAR : 2007-08) ACIT, CIRCLE-4, PUNE. .. APPELLANT VS. KUMAR BUILDERS CONSORTIUM, 2413, KUMAR CAPITAL, EAST STREET, 2 ND FLOOR, CAMP, PUNE 411001. .. RESPONDENT PAN: AAHFK7992A ASSESSEE BY : SHRI NIKHIL PATHAK DEPARTMENT BY : SHRI S.K.SINGH DATE OF HEARING : 27.02.2013 DATE OF PRONOUNCEMENT : 20.03.2013 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) WHEREIN DELETION OF DISALLOWANCE OF DEDU CTION U/S.80IB(10) IN RESPECT OF ITS PROFIT FROM KUMAR SA NSAR PROJECT HAS BEEN OPPOSED BY THE REVENUE. 2. THE ASSESSEE IS A FIRM IN THE BUSINESS OF REAL E STATE, PROMOTERS AND BUILDERS. THE ASSESSING OFFICER DISALLOWED THE DEDUCTION U/S.80IB(10) AMOUNTING TO RS.6,85,84,507/- ON THE G ROUND THAT KUMAR SANSAR PROJECT WAS AN EXTENSION OF AN OLD EXI STING PROJECT KUMAR SURAKSHA. BASED ON THE COMMENCEMENT CERTIFIC ATE OF KUMAR SURAKSHA PROJECT WHICH WAS PRIOR TO 31.03.200 4 AND SINCE THE ASSESSEES PROJECT KUMAR SANSAR WAS NOT COMPLET ED BY 31.03.2008. THEREFORE, HE HELD THAT DEDUCTION U/S. 80IB(10) WAS NOT ALLOWABLE. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD INCOME FROM TWO PROJECTS KUMAR SHANTINIKETAN AND KUMAR SANSAR 2 DURING THE YEAR ON WHICH DEDUCTION U/S.80IB(10) AMO UNTING TO RS.19,17,01,920/- WAS CLAIMED. THE ASSESSING OFFIC ER ALLOWED THE DEDUCTION U/S.80IB(10) FROM KUMAR SHANTINIKETAN PRO JECT, WHICH AMOUNTED TO RS.13,98,39,769/-, WHICH IS NOT SUBJECT MATTER BEFORE US. HOWEVER, FOR THE CLAIM ON DEDUCTION ON KUMAR S ANSAR PROJECT AT S.NO.37 OF VILLAGE KONDHWA KHURD, HAVING GROSS P LOT AREA OF 50,308 SQ.MT., THE ASSESSING OFFICER STATED THAT FI RST LAYOUT PLAN WAS APPROVED VIDE COMMENCEMENT CERTIFICATE DATED 19 .11.2003 BY THE PUNE MUNICIPAL CORPORATION (PMC), WHICH CONSIDE RED THE PROJECT OF 20,052.62 SQ.MT. IN WHICH THE REVISED LA YOUT PLAN WAS ON TOTAL AREA OF 34,630.14 SQ.MT. AND THE PROPOSED TEN EMENTS WERE ALSO INCREASED VIDE COMMENCEMENT CERTIFICATE DATED 08.10.2004. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD STATED THE DATE OF COMMENCEMENT ON 09.06.2006 IN RESPECT OF KUMAR S ANSAR PROJECT ON WHICH THE WORD REVISED WAS MENTIONED A ND THE AREA PERTAINING TO THIS WAS 8692 SQ.MT. THE ASSESSING O FFICER ALSO STATED THAT IN THE REVISED COMMENCEMENT CERTIFICATE DATED 09.06.2006 A TOTAL OF 8 BUILDINGS A TO I WERE MENTI ONED, WHEREAS THE ASSESSEE HAS CLAIMED ONLY 3 BUILDINGS IN RESPEC T OF KUMAR SANSAR PROJECT. THE ASSESSING OFFICER INFERRED THA T THE ASSESSEE HAD BIFURCATED ENTIRE PROJECT INTO TWO PROJECTS FOR CLAIMING DEDUCTION U/S.80IB(10). HE FURTHER STATED THAT INS TEAD OF COMPLETING THE HOUSING PROJECT BEFORE 31.03.2008, S INCE THE PROJECT IN THE NAME OF KUMAR SURAKSHA HAD STARTED BEFORE 01 .04.2004, THE ASSESSEE HAS TRIED TO SECURE TIME BY REVISING THE P LAN AS APPROVED BY PMC AS ON 09.06.2006 FOR GAINING ADDITIONAL FOUR YEARS FOR COMPLETION. THE ASSESSING OFFICER ALSO POINTED OUT THAT FOR THE YEAR ENDING 31.03.2006, FOR THE KUMAR SURAKSHA PROJECT T HERE WAS AN ALLOCATION MADE OF LAND COST, DEVELOPMENT COST AND INITIAL OVERHEAD COST SEGREGATED AND TRANSFERRED TO THE KUMAR SANSAR PROJECT. IN VIEW OF ABOVE, THE ASSESSING OFFICER OBSERVED THAT THE HOUSING PROJECT WAS FOR 8 BUILDINGS PROPOSED IN THE LAYOUT DATED 08.10.2004, AND IT WAS NOT COMPLETED AS ON DATE. T HE REVISED PLAN DATED 09.06.2006 FOR THE KUMAR SANSAR PROJECT WAS S TATED TO BE REVISION OF THE ORIGINAL PLAN DATED 19.11.2003 WITH ADDITION OF MORE 3 LAND AND BUILDINGS. ACCORDING TO HIM, THERE WAS NO SEPARATE LAYOUT PLAN OR BUILDING PLAN APPROVED BY PMC FOR THE KUMAR SANSAR PROJECT. THEREFORE, IT WAS HELD THAT IT WAS MERELY AN EXTENSION OF KUMAR SURAKSHA PROJECT, WHICH WAS APPROVED ON 19.11 .2003. THEREFORE, IT WAS HELD THAT THE INCOME DERIVED FROM KUMAR SANSAR PROJECT WAS NOT ELIGIBLE FOR DEDUCTION U/S.80IB(10) , AS IT WAS CONTINUATION OF THE OLD PROJECT AND IT IS STILL INC OMPLETE AT THE RELEVANT POINT OF TIME. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY WHEREIN VARIOUS CONTENTIONS WERE RAISED W ITH REGARD TO THE CLAIM OF DEDUCTION U/S.80IB(10), AND THE CIT(A) HAVING CONSIDERED THE SAME HAS GRANTED RELIEF TO THE ASSES SEE BY OBSERVING AS UNDER: 3.6 I HAVE CAREFULLY CONSIDERED THE SUBMISSION O F THE APPELLANT AND THE MATERIAL AVAILABLE ON RECORD. IT IS NOTICED THAT THE A.O. HAS DISALLOWED THE CLAIM U/S 80IB(10) ON THE APPELLANT'S PROJECT 'KUMAR SANSAR', WHICH WAS CLAIM ED TO HAVE COMMENCED VIDE CC DATED 09.06.2006. IT WAS OBSERVED THAT THE WORD 'REVISED' WAS MENTIONED ON TOP OF THIS CC, THUS IT WAS A REVISED COMMENCEMENT CERTIFICATE FOR THE ENTIRE P LOT. IT WAS FURTHER OBSERVED THAT WHILE IT IS CONTENDED THAT TH E 'KUMAR SANSAR' PROJECT HAD ONLY THREE BUILDINGS, G, H AND I, THE CC DATED 09.06.2006 SHOWED EIGHT BUILDINGS A TO I, I.E ., BUILDINGS A TO E WERE ALSO SHOWN, WHICH ACTUALLY WERE OF THE OLD PROJECT 'KUMAR SURAKSHA' DEVELOPED BY KUMAR URBAN DEVELOPME NT LTD., EARLIER KNOWN AS KUMAR HOUSING AND LAND DEVEL OPMENT CO. LTD. (HEREINAFTER MENTIONED AS KHLDC). THE A.O' S INFERENCE WAS THEREFORE THAT ACTUALLY IT WAS THE SA ME PROJECT WHICH WAS EXTENDED, AND THE APPELLANT HAS BIFURCATE D THE SAME AS TWO PROJECTS. ON THE OTHER HAND, THE APPELL ANT HAS MADE DETAIL CLARIFICATIONS WHICH HAVE ALREADY BEEN REPRODUCED ABOVE. IN THE LETTER DATED 26.07.2010 IT HAS BEEN M ENTIONED THAT ACTUALLY THE APPELLANT FIRM CAME INTO EXISTENC E VIDE PARTNERSHIP DEED DATED 20.09.2005, I.E. MUCH AFTER THE COMMENCEMENT OF 'KUMAR SURAKSHA' PROJECT BY KUMAR HOUSING & LAND DEVELOPMENT CO. LTD. IT WAS CONTENDE D THAT WHEN THIS 'KUMAR SURAKSHA' PROJECT COMMENCED VIDE C C DATED 19.11.2003, THE APPELLANT FIRM KUMAR BUILDERS ' CONSORTIUM WAS NOT IN EXISTENCE AT ALL. ACTUALLY, T HE LAND FOR THIS 'KUMAR SANSAR' PROJECT OF THE APPELLANT WAS TR ANSFERRED BY KUMAR HOUSING & LAND DEVELOPMENT CO. LTD. TO THE AP PELLANT FIRM THROUGH A REGISTERED DEVELOPMENT AGREEMENT DAT ED 15.10.2005 AFTER WHICH THE APPELLANT FIRM, HAVING B EEN CONSTITUTED BY PARTNERSHIP DEED DATED 20.09.2005, O BTAINED THE CC DATED 09.06.2006 FOR THE BUILDINGS G, H AND I, WHICH WERE NAMED AS 'KUMAR SANSAR'. IT IS CONTENDED THAT THE SAME 4 WAS COMPLETED VIDE CC NO. 720 DATED 23.03.2010. THE APPELLANT HAS THUS EMPHASISED THAT 'KUMAR SURAKSHA' AND 'KUMAR SANSAR' WERE SEPARATE AND INDEPENDENT PROJEC TS, HAVING INDEPENDENT COMMENCEMENT AND COMPLETION CERTIFICATES, INDEPENDENT AMENITIES AND SUPPORT FUN CTIONS, INDEPENDENT APPROACH ROAD, AND BOUNDARIES, BOTH ARE SEPARATED BY A 20 MTR. WIDE D.P. ROAD, BOTH HAVING DIFFERENT HOUSING SOCIETIES AND ARE CARRIED OUT BY TWO DIFFER ENT ENTITIES. IT WAS FURTHER EMPHASISED THAT THE PROJECT 'KUMAR S ANSAR' WAS DEVELOPED BY THE APPELLANT FIRM, WHICH WAS ALTOGETH ER A DIFFERENT LEGAL ENTITY THAN THE COMPANY KUMAR HOUSI NG & LAND DEVELOPMENT CO. LTD., AND WHEN THE PROJECT 'KU MAR SURAKSHA' WAS STARTED BY THE KUMAR HOUSING & LAND DEVELOPMENT CO. LTD., THE APPELLANT FIRM WAS NOT EV EN IN EXISTENCE. THE APPELLANT HAS THUS EXPLAINED AND REI TERATED ABOVE WITH VARIOUS LAYOUT PLANS/BUILDING PLANS ATTA CHED WITH COMMENCEMENT CERTIFICATE FOR THE TWO PROJECTS, WHIC H WERE ALL SUBMITTED BEFORE THE A.O. ALSO. IT WAS STATED THAT ON STANDALONE BASIS, BOTH OF THESE PROJECTS HAD LAND A REA EXCEEDING 1 ACRE. 3.7 THE APPELLANT THEN GOES ON TO EXPLAIN THE DIFFE RENCE BETWEEN THE LAYOUT PLAN APPROVAL AND BUILDING PLAN APPROVAL, AND IT IS CONTENDED THAT IN THE LAYOUT PLAN INITIAL LY TAKEN BY THE COMPANY KUMAR HOUSING & LAND DEVELOPMENT CO. LT D. ALSO, THE PROPOSED BUILDINGS G, H AND I MIGHT HAVE BEEN SHOWN, BUT THE BUILDING PLAN APPROVAL FOR THE LATTE R BUILDINGS WAS NOT TAKEN. FOR THIS PURPOSE, THE APPELLANT WAS SPECIFICALLY ASKED TO EXPLAIN THE DEVELOPMENT CHARGES PAYABLE, W HICH WERE CLARIFIED BY LETTER DATED 24.03.2011 REPRODUCED ABO VE. THIS EXPLANATION MADE IT CLEAR THAT THE DEVELOPMENT CHAR GES FOR BUILDING PLAN APPROVAL FOR BUILDINGS G, H AND I, WH ICH WERE NAMED AS 'KUMAR SANSAR', WERE PAID ON 08.06.2006 AN D 14.06.2006, AND THE EARLIER COMPANY KUMAR HOUSING A ND LAND DEVELOPMENT LTD. HAD PAID THE DEVELOPMENT CHAR GES ONLY FOR BUILDINGS A TO E KNOWN AS 'KUMAR SURAKSHA' AND NOT FOR BUILDINGS G, H AND I. 3.8 THE APPELLANT HAS FURTHER EXPLAINED THAT AS A C ONSEQUENCE OF DEVELOPMENT AGREEMENT, TRANSFER OF LAND TOOK PLA CE FROM KHLDC TO THE APPELLANT FIRM AT A PRICE OF RS. 3.35 CRORES, AND AS PER THE ACCOUNTING PRACTICE, THE EXPENSES APPORT IONABLE TO THAT PORTION OF LAND FOR DEVELOPMENT COST ETC. WAS ALSO INCLUDED IN THIS CONSIDERATION. THIS EXPLANATION HA S BEEN GIVEN IN RESPONSE TO THE OBSERVATIONS OF THE A.O. I N PARAS 8 AND 9 OF THE ASSESSMENT ORDER, AND IT IS STATED THA T THE INTERPRETATION OF THE A.O. IS ACTUALLY BENEFICIAL T O THE ASSESSEE, AS THE PROJECTS ARE ENTIRELY DIFFERENT FROM EACH OT HER. THIS EXPLANATION OF THE APPELLANT IS PLAUSIBLE IN THE SE NSE THAT WHEN DEVELOPMENT RIGHTS OF A PORTION OF THE LAND HA S BEEN TRANSFERRED BY A DULY REGISTERED DEVELOPMENT AGREEM ENT DATED 15.10.2005 TO KUMAR BUILDER CONSORTIUM, WHICH IS TH E 5 APPELLANT FIRM, BY THE COMPANY KHLDC WHICH WAS HOLD ING THE ENTIRE DEVELOPMENT RIGHTS, THERE IS NO LEGAL INFIRM ITY AS SUCH. THE APPELLANT FIRM IS A DIFFERENT LEGAL ENTITY THAN THE COMPANY KHLDC, AND THE TRANSFER OF THE DEVELOPMENT RIGHT HA S BEEN MADE VALIDLY. THOUGH IN THE ORIGINAL LAYOUT PLAN IN THE CASE OF THE COMPANY, THE BUILDINGS G, H AND I, WHICH WERE L ATER DEVELOPED BY THE APPELLANT FIRM, MIGHT HAVE BEEN SH OWN, ACTUALLY NO BUILDING PLAN APPROVAL WAS TAKEN FOR BU ILDINGS G, H AND I, BY KHLDC, WHICH HAD NOT PAID ANY DEVELOPME NT CHARGES FOR G, H & I EITHER. IT HAS BEEN STRESSED T HAT WHEN APPROVAL WAS TAKEN FOR BUILDINGS A TO E NAMED AS 'K UMAR SURAKSHA' PROJECT OF THE COMPANY KHLDC, THE APPELLA NT FIRM WAS NOT EVEN IN EXISTENCE, SINCE IT CAME INTO EXIST ENCE BY PARTNERSHIP DEED DATED 20.09.2005 ONLY. MERELY BECA USE IN THE CC DATED 09.06.2006 THE WORD 'REVISED' HAS BEEN MENTIONED ON THE TOP BY THE LOCAL AUTHORITY, AND TH E BUILDINGS A TO E HAVE ALSO BEEN SHOWN, IT DOES NOT IMPLY THAT THE BUILDINGS G, H AND I OF 'KUMAR SANSAR' PROJECT WERE EXTENSION OF THE SAME PROJECT EARLIER DEVELOPED BY THE COMPANY KHLDC. THIS IS A PROCEDURE ADOPTED BY THE MUNICIPAL CORPORATION FOR THE SAME SURVEY NUMBER OR FOR AN AMALGAMATED PLAN THAT THEY SHOW THE ENTIRE LAYOUT P LAN INCLUDING THE EARLIER BUILDINGS. BY THE LETTER DATE D 28.01.2011, THE APPELLANT HAS MADE A COMPARISON OF THE FACTS OF ITS CASE WITH THE FACTS IN THE ORDER OF ITAT PUNE BENCH, IN THE CASE OF APOORVA PROPERTIES AND ESTATE PVT. LTD. IN ITA NO. 562/PN/2008, AS ALSO THE CASE OF SAROJ SALES ORGANI SATION OF ITAT MUMBAI BENCH (SUPRA). IT HAS BEEN VEHEMENTLY A RGUED AFTER COMPARISON WITH THE APPELLANT'S CASE THAT THE FACTS AND THE DECISION OF THESE CASES DO SUPPORT THE APPELLAN T'S CLAIM THAT THE PROJECT 'KUMAR SANSAR' DEVELOPED BY THE AP PELLANT FIRM COMPRISING OF BUILDINGS G, H AND I WAS DIFFERE NT AND DISTINCT FROM THE EARLIER PROJECT DEVELOPED BY A DI FFERENT LEGAL ENTITY I.E. KHLDC. THE APPELLANT HAS MADE SUBMISSI ON UNDER THE HEAD ADDITIONAL CLARIFICATIONS ON 28.01.2011, A ND THE SALIENT FEATURES OF THE APPELLANT'S CASE AND ADDITI ONAL CLARIFICATIONS HAVE ALREADY BEEN REPRODUCED ABOVE, AND THEREFORE, ARE NOT BEING REPEATED FOR THE SAKE OF B REVITY. HAVING CAREFULLY PERUSED THE POINTS MENTIONED OF TH IS CLARIFICATION ALONG WITH THE DECISIONS IN THE CASE OF APOORVA PROPERTIES AND ESTATE PVT. LTD., AND SAROJ SALES OR GANISATION CITED BY THE APPELLANT, THERE APPEARS TO BE CONSIDE RABLE FORCE IN THE APPELLANT'S ARGUMENT. IN MY CONSIDERED OPINI ON, SINCE THE APPELLANT FIRM CAME INTO EXISTENCE ONLY ON 20.0 9.2005, AND THE DEVELOPMENT RIGHTS IN LAND WAS TRANSFERRED TO IT BY KHLDC BY A VALID REGISTERED DEVELOPMENT AGREEMENT D ATED 15.10.2005, IT CANNOT BE HELD THAT THE PROJECT DEVE LOPED BY THE APPELLANT FIRM WAS EXTENSION OF THE EARLIER PROJECT DEVELOPED BY THE COMPANY KHLDC. THERE WAS NO LEGAL BAR ON SUCH T RANSFER OF DEVELOPMENT RIGHTS ON A PART OF LAND. SINCE THE PAYMENT OF DEVELOPMENT CHARGES FOR THE BUILDING PLAN APPROVAL WAS MADE AS PER CC DATED 09.06.2006 FOR THE BUILDINGS G, H A ND I, IT IS 6 HELD TO BE A SEPARATE PROJECT DEVELOPED BY THE APPE LLANT FIRM. ALL OTHER CONDITIONS U/S 80IB(10) OF THE IT. ACT, H AVE BEEN FOUND TO BE SATISFIED IN RESPECT OF THIS SEPARATE P ROJECT, AND ACCORDINGLY THE APPELLANT WAS ENTITLED TO THE DEDUC TION U/S 80IB(10). IN VIEW OF THIS EXTENSIVE DISCUSSION MAD E FROM PARAS 3.6 ONWARDS, THE APPELLANT'S CLAIM IS HELD TO BE ALLOWABLE. GROUND NO. 1 OF APPEAL IS ALLOWED. 3. SAME HAS BEEN OPPOSED BEFORE US AND THE LD. DEPA RTMENTAL REPRESENTATIVE WHO SUBMITTED THAT THE CIT(A) WAS NO T JUSTIFIED IN HOLDING THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB OF THE ACT IN RESPECT OF ITS PROFIT FROM THE KUMAR SANSAR PROJECT WITHOUT APPRECIATING THAT THE SAID PROJECT IS NOT AN INDEPE NDENT HOUSING PROJECT AND INSTEAD IS A MERE EXTENSION/REVISION OF THE KUMAR SURAKSHA PROJECT WHICH HAD BEEN APPROVED PRIOR TO 3 1.03.2004. THE CIT(A) ERRED IN ACCEPTING THE ASSESSEES CLAIM TO THE EFFECT THAT THE KUMAR SANSAR PROJECT IS A SEPARATE HOUSING PROJ ECT ON THE IRRELEVANT DIFFERENCE BETWEEN LAYOUT PLAN APPROVAL AND BUILDING PLAN APPROVAL IN FAILING TO APPRECIATE THAT THE COMMENCE MENT CERTIFICATE DATED 09.09.2006 WAS CATEGORICALLY A REVISED CERTIF ICATE, I.E., ON REVISION OF THE EARLIER CERTIFICATE DATED 19.11.200 3 WHICH WAS IN RESPECT OF KUMAR SURAKSHA. WITHOUT PREJUDICE TO THE ABOVE THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT(A) ERRED IN FAILING TO APPRECIATE THAT EVEN IF THE KUMAR SANSAR PROJECT IS ASSUMED, WITHOUT ACCEPTING, TO BE AN INDEPENDENT HO USING PROJECT IT SHOULD HAVE BEEN COMPLETED BY 31.03.2008 IN VIEW OF THE COMMENCEMENT CERTIFICATE DATED 19.11.2003 AND THE A SSESSEE HAD NOT BEEN ABLE TO COMPLETE THE KUMAR SANSAR PROJECT BY 31.03.2008, IT WAS NOT ENTITLED TO DEDUCTION U/S.80IB(10) OF TH E ACT IN RESPECT THEREOF. THE CIT(A) ALSO ERRED IN FAILING TO APPRE CIATE THAT EVEN THOUGH THE ORIGINAL BUILDING PLAN HAD 8 BUILDINGS, THE SAME HAD BEEN BIFURCATED INTO TWO SEPARATE PROJECTS ONLY WIT H A VIEW TO UNDULY SECURING EXTENSION OF TIME BEYOND 31.03.2008 SO AS TO AVAIL ADDED U/S.80IB(10) OF THE ACT, WHICH AMOUNTS TO DEF EATING THE VERY PURPOSE OF LAW. ACCORDINGLY THE ORDER OF THE CIT(A ) BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 7 4. ON THE OTHER HAND LD. AUTHORISED REPRESENTATIVE SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ASSE SSEE IS A BUILDER, PROMOTER AND DEVELOPER. DURING THE YEAR ASSESSEE HAS RECOGNIZED REVENUE FROM TWO PROJECTS VIZ., KUMAR SHANTINIKETAN AND KUMAR SANSAR. THE ASSESSEE CLAIMED DEDUCTION U/S.80IB(10 ) OF THE ACT IN RESPECT OF INCOME FROM THESE PROJECTS. HOWEVER, TH E CLAIM FOR DEDUCTION U/S.80IB(10) AMOUNTING TO RS.6,85,84,507/ - IN RESPECT OF KUMAR SANSAR PROJECT WAS REJECTED BY THE ASSESSI NG OFFICER. ACCORDING TO THE LD. AUTHORISED REPRESENTATIVE, (I) THE PROJECT KUMAR SANSAR IS ON A PLOT AREA OF 8692 SQ.MT I.E., 2.33 ACRES. (II) DATE OF COMMENCEMENT OF THE PROJECT IS 09.06.2006 V IDE COMMENCEMENT CERTIFICATE NO.922 WHEREAS THE SAME WA S COMPLETED VIDE COMPLETION CERTIFICATE NO.720 DATED 23.03.2010. (III) IT CONSISTS OF THREE BUILDINGS, VIZ. BUILDINGS NO.G , H AND I. (IV) THE ENTIRE PROJECT IS A RESIDENTIAL PROJECT WITHOUT ANY COMMERCIAL AREA. THUS, ON STANDALONE BASIS THE PRO JECT COMPLIED WITH ALL THE REQUIREMENTS OF SECTION 80IB( 10) OF THE ACT. ANOTHER HOUSING PROJECT VIZ. KUMAR SURAKSHA WAS UND ER CONSTRUCTION AT RELEVANT POINT OF TIME WHICH WAS BE ING EXECUTED BY KUMAR HOUSING LAND DEVELOPMENT LTD. IT CONSISTED O F 5 BUILDINGS VIZ. A, B, C, D & E. THE TOTAL AREA OF THE PLOT IS 50,308 SQ.MT. IN THE FIRST LAYOUT THE PROPOSED FLOOR SPACE WAS 2141. 45 SQ.MT. OUT OF AREA OF PLOT OF 20,052.2 SQ.MT. (NET OF AREA LEFT F OR 20 METER ROAD, DEFER DEVELOPMENT ROAD, DEFER DEVELOPMENT OPEN SPAC E, AMENITY SPACE AND INTERNAL ROAD). THE COMMENCEMENT CERTIFI CATE NO.700 DATED 19.11.2003 WAS ISSUED BY BUILDING CONTROL DEP ARTMENT OF PUNE MUNICIPAL CORPORATION. IN THE REVISED LAYOUT, TOTAL AREA OF PLOT WAS WORKED OUT AT 34,630.14 SQ.MT. AS AGAINST THE ORIGINAL PLAN AT 20,052 SQ.MT. THE COMMENCEMENT CERTIFICATE NO.2519/04 8 DATED 08.10.2004 WAS ISSUED. THE ASSESSEE OBTAINED A SEPARATE COMMENCEMENT CERTIFICATE NO.922 DATED 09.06.2006 FO R KUMAR SANSAR PROJECT. THE ASSESSEE HAS CLAIMED TO BE CON STRUCTING ONLY 3 BUILDINGS AS PER DETAILS FILED IN RESPECT OF THE KU MAR SANSAR PROJECT. IN VIEW OF ABOVE, THE ASSESSING OFFICER WAS NOT JUS TIFIED IN HOLDING THAT ASSESSEE HAD SINGLE PROJECT INSTEAD OF TWO DIF FERENT PROJECTS VIZ., KUMAR SURAKSHA AND KUMAR SANSAR. HE FAILED T O APPRECIATE DIFFERENCE BETWEEN LAY OUT PLAN AND BUILDING PLAN. THUS HE FAILED TO APPRECIATE THAT THESE ARE INDEPENDENT PROJECTS. TH E ASSESSEE FIRM HAS COME INTO EXISTENCE VIDE PARTNERSHIP DEED DATED 20.09.2005, I.E., MUCH AFTER COMMENCEMENT OF KUMAR SURAKSHA PRO JECT BY KUMAR HOUSING AND LAND DEVELOPMENT COMPANY, WHICH H AS BEEN PLACED BEFORE US IN PAPER BOOK. ACCORDING TO THE L D. AUTHORISED REPRESENTATIVE, LAND WAS PURCHASED BY KUMAR HOUSING AND LAND DEVELOPMENT COMPANY VIDE DEED OF SALE DATED 30.08.1 993 AND 03.08.1993, 05.08.1993, 12.08.1993, 19.06.1998, 30. 08.2002 FROM THE ORIGINAL LAND OWNERS. THE PROJECT KUMAR SURAKSH A WAS STARTED BY KUMAR HOUSING AND LAND DEVELOPMENT CO. LTD. VIDE COMMENCEMENT CERTIFICATE NO.700 DATED 19.11.2003 CO NSISTING OF 5 BUILDINGS VIZ. A, B, C, D & E. AT THE RELEVANT POI NT OF TIME, ASSESSEE FIRM KUMAR BUILDERS CONSORTIUM WAS NOT IN EXISTENCE . 5. THE LAND FOR THE SAID PROJECT KUMAR SANSAR (INCL USIVE OF LAND COST, LAND DEVELOPMENT COST AND INITIAL OVERHEAD CO ST) WAS TRANSFERRED BY KUMAR HOUSING & LAND DEVELOPMENT CO. LTD., TO THE ASSESSEE FIRM THROUGH REGISTERED AGREEMENT FOR DEVE LOPMENT DATED 15.10.2005, A COPY OF THE SAME IS PLACED AT PAGE 62 TO 76 OF THE PAPER BOOK FILED BY THE ASSESSEE, WHICH IS PART OF LETTER DATED 26.07.2010 SUBMITTED BEFORE THE CIT(A). UPON TRANS FER OF LAND AS MENTIONED ABOVE, THE ASSESSEE FIRM LAUNCHED THE PRO JECT NAMED KUMAR SANSAR VIDE COMMENCEMENT CERTIFICATE NO.922 D ATED 09.06.2006 HAVING BUILDINGS G, H AND I AND GOT THE SAME COMPLETED BY COMPLETION CERTIFICATE NO.720 DATED 23 .03.2010. THUS, ACCORDING TO THE LD. AUTHORISED REPRESENTATIV E, BOTH PROJECTS 9 KUMAR SURAKSHA AND KUMAR SANSAR ARE SEPARATE AND IN DEPENDENT PROJECTS AS BOTH HAVE INDEPENDENT (I) COMMENCEMENT AND COMPLETION CERTIFICATES (II) INDEPENDENT SET OF AMENITIES AND SUPPORT FUNCTIONS (III) INDEPENDENT APPROACH ROAD (IV) INDEPENDENT BOUNDARIES (V) BOTH ARE SEPARATED BY 20 MT. WIDE D.P. ROAD (VI) BOTH THE PROJECTS HAVE DIFFERENT HOUSING SOCIETIES AND (VII) BOTH ARE CARRIED OUT BY TWO DIFFERENT ENTITIES, AND ABOVE ALL PROJECT KUMAR SURAKSHA WAS STARTED BY KUMAR HOUSING & LAND DEVELOPMENT COMPANY LTD., MUCH BEFORE THE ASSESSEE FIRM CAME INTO EXISTENCE. ONLY AFTER COMING INTO EXISTENCE ASSESSEE FIRM STAR TED THE PROJECT KUMAR SANSAR. IT WAS ALSO SUBMITTED THAT B OTH PROJECTS KUMAR SURAKSHA AND KUMAR SANSAR ARE SEPARATE AND IN DEPENDENT PROJECTS ON SAND ALONE BASIS, THEY ARE CARRIED OUT ON A PLOT OF LAND OF MORE THAN 1 ACRE. THE ASSESSEE HAS DEPOSITED A SUM OF RS.22,76,880/- IN RESPECT OF DEVELOPMENT CHARGES PA ID TO PMC IN RESPECT OF KUMAR SANSAR PROJECT VIDE RECEIPT NO.CE/ BP/2818/06. THE DEVELOPMENT CHARGES ARE REQUIRED TO BE PAID BEF ORE COMMENCEMENT OF EACH PROJECT. THE DEVELOPMENT CHAR GES FOR KUMAR SANSAR AS PER THE RECEIPT ARE PAID ON 02.06.2 006 WHICH ESTABLISHES THAT ASSESSEE COMMENCED ITS PROJECT IN QUESTION IN 2006 AND NOT IN TIME BEFORE AS CONTEMPLATED BY THE ASSESSING OFFICER. THE LD. AUTHORISED REPRESENTATIVE RELIED ON THE DECISIONS IN THE CASES OF (1) DCIT VS. BRIGADE ENTERPRISES PV T. LTD. 14 DTR (BANG) (TRIB) 371, (2) SAROJ SALES ORGANISATION VS ITO (2008) 115 TTJ (MUMBAI) 485 (3) ASSESSEE ALSO RELIED ON DECISI ON OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF VANDANA PROPERTIES VIDE I.T.APPEALS NO.3633 OF 2009 WITH I.T.APPEALS NO.436 1 OF 2010, WHERE IT HAS BEEN HELD AS UNDER: 17. THE FIRST QUESTION TO BE CONSIDERED HEREIN IS, WHETHER, IN THE FACTS OF THE PRESENT CASE, CONSTRUCTION OF 'E' BUILDING CONSTITUTES BUILDING A 'HOUSING PROJECT' UNDER SECT ION 80IB (10) OF THE ACT. 10 18. THE EXPRESSION 'HOUSING PROJECT' IS NEITHER DEF INED UNDER SECTION 2 OF THE ACT NOR UNDER SECTION 80IB (10) OF THE ACT. EVEN UNDER THE MUMBAI MUNICIPAL CORPORATION ACT, 19 88 AS ALSO UNDER THE DEVELOPMENT CONTROL REGULATIONS FOR GREATER MUMBAI, 1991, THE EXPRESSION 'HOUSING PROJECT' IS N OT DEFINED. THEREFORE, THE EXPRESSION 'HOUSING PROJECT' IN SECT ION 80IB (10) WOULD HAVE TO BE CONSTRUED AS COMMONLY UNDERSTOOD. 19. AS RIGHTLY CONTENDED BY MR.INAMDAR, LEARNED SEN IOR ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE AND MR .MISTRI, LEARNED SENIOR ADVOCATE AND MR.JOSHI, LEARNED ADVOC ATE APPEARING ON BEHALF OF THE INTERVENORS, THE EXPRESS ION 'HOUSING PROJECT' IN COMMON PARLANCE WOULD MEAN CONSTRUCTING A BUILDING OR GROUP OF BUILDINGS CONSISTING OF SEVERA L RESIDENTIAL UNITS. IN FACT, THE EXPLANATION IN SECTION 80IB (10 ) SUPPORTS THE CONTENTION OF THE ASSESSEE THAT THE APPROVAL GR ANTED TO A BUILDING PLAN CONSTITUTES APPROVAL GRANTED TO A HOU SING PROJECT. THEREFORE, IT IS CLEAR THAT CONSTRUCTION O F EVEN ONE BUILDING WITH SEVERAL RESIDENTIAL UNITS OF THE SIZE NOT EXCEEDING 1000 SQUARE FEET ('E' BUILDING IN THE PRESENT CASE) WOULD CONSTITUTE A 'HOUSING PROJECT' UNDER SECTION 80IB ( 10) OF THE ACT. 20. THE QUESTION, THEN, TO BE CONSIDERED IS, WHETHE R CONSTRUCTION OF 'E' BUILDING IS AN INDEPENDENT HOUS ING PROJECT OR EXTENSION OF THE HOUSING PROJECT ALREADY EXISTIN G ON THE PLOT IN QUESTION. IT IS THE CONTENTION OF THE REVENUE TH AT SINCE THE APPROVAL FOR CONSTRUCTION OF 'E' BUILDING WAS GRANT ED BY THE LOCAL AUTHORITY SUBJECT TO THE CONDITIONS SET OUT I N THE FIRST APPROVAL GRANTED ON 12TH MAY 1993 FOR CONSTRUCTION OF A AND B BUILDING, CONSTRUCTION OF 'E' BUILDING MUST BE CO NSIDERED TO BE THE EXTENSION OF THE EARLIER HOUSING PROJECT FOR WHICH APPROVAL WAS GRANTED PRIOR TO 1 ST OCTOBER 1998 AND , THEREFORE, THE BENEFIT OF SECTION 80IB (10) CANNOT BE GRANTED. THERE IS NO MERIT IN THE ABOVE ARGUMENT, BECAUSE, W HEN THE PLANS FOR A, B, C AND D BUILDINGS WERE APPROVED DUR ING THE PERIOD FROM 1993 TO 1996, CONSTRUCTION OF 'E' BUILD ING WAS NOT EVEN CONTEMPLATED ON THE PLOT IN QUESTION. IT IS ON LY IN THE YEAR 2001 WHEN THE STATUS OF THE LAND WAS CONVERTED FROM SURPLUS VACANT LAND INTO WITHIN THE CEILING LIMIT L AND BY THE STATE GOVERNMENT, AN ADDITIONAL BUILDING COULD BE C ONSTRUCTED ON THE PLOT IN QUESTION AND ACCORDINGLY BUILDING PL AN FOR CONSTRUCTION OF 'E' BUILDING WAS SUBMITTED AND THE SAME WAS APPROVED BY THE LOCAL AUTHORITY ON 11TH OCTOBER 200 2. 21. THE FACT THAT THE LOCAL AUTHORITY, NAMELY THE M UNICIPAL CORPORATION APPROVED THE BUILDING PLAN FOR 'E' BUIL DING ON THE CONDITION THAT ALL THE OBJECTIONS RAISED IN THE INT IMATION OF DISAPPROVAL DATED 12 TH MAY 1993 RELATING TO THE EARLIER HOUSING PROJECT ON THE SAME PLOT OF LAND SHALL BE A PPLICABLE AND SHOULD BE COMPLIED WITH, CANNOT BE A GROUND TO HOLD THAT 'E' BUILDING IS EXTENSION OF THE EARLIER HOUSING PR OJECT BECAUSE THE EARLIER HOUSING PROJECT WAS COMPLETED PRIOR TO 1 ST OCTOBER 11 1998 AND THE HOUSING PROJECT FOR CONSTRUCTION OF 'E ' BUILDING WAS APPROVED FOR THE FIRST TIME ON 11 TH OCTOBER 2002. NOWHERE IN THE INTIMATION FOR DISAPPROVAL GRANTED FOR CONST RUCTION OF 'E' BUILDING ON 11 TH OCTOBER 2002, IT IS STATED THAT BUILDING 'E' CONSTITUTES EXTENSION OF THE EARLIER HOUSING PROJEC T WHICH IS ALREADY COMPLETED. THE FACT THAT THE OBJECTIONS RAI SED WHILE APPROVING THE EARLIER HOUSING PROJECT ON THE SAME P LOT OF LAND WERE MADE APPLICABLE TO THE HOUSING PROJECT IN QUES TION, IT CANNOT BE INFERRED THAT THE HOUSING PROJECT IN QUES TION CONSTITUTES EXTENSION OF THE EARLIER HOUSING PROJEC T. THEREFORE, IN THE FACTS OF THE PRESENT CASE, WHERE, NEITHER TH E ASSESSEE HAD SOUGHT APPROVAL OF THE BUILDING PLAN FOR CONSTR UCTION OF 'E' BUILDING AS EXTENSION OF THE EARLIER HOUSING PROJEC T, NOR THE MUNICIPAL CORPORATION HAS GRANTED APPROVAL FOR THE HOUSING PROJECT CONSISTING OF 'E' BUILDING AS EXTENSION OF THE EARLIER HOUSING PROJECT, IT IS NOT OPEN TO THE INCOME-TAX A UTHORITIES TO CONTEND THAT APPROVAL TO THE HOUSING PROJECT GRANTE D BY THE MUNICIPAL CORPORATION ON 11 TH OCTOBER 2002 CONSTITUTES EXTENSION OF THE HOUSING PROJECT WHICH WAS APPROVED IN THE YEAR 1993. 22. RELIANCE PLACED BY THE REVENUE ON THE EXPLANATI ON TO SECTION 80IB (10)(A) WHICH WAS INTRODUCED WITH EFFE CT FROM 1 ST APRIL 2005 IS ALSO MISPLACED. WHAT THE SAID EXPLANA TION CONTEMPLATES IS THAT WHERE THE APPROVAL IN RESPECT OF A HOUSING PROJECT IS GRANTED MORE THAN ONCE, THEN, TH AT HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON TH E DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY. FOR EXAMPLE, IN RE SPECT OF A HOUSING PROJECT, THE ASSESSEE MAY SEEK AMENDMENT OF THE BUILDING PLAN AT SEVERAL STAGES OF THE CONSTRUCTION AND THE SAME MAY BE APPROVED. IN SUCH A CASE, THE EXPLANATI ON PROVIDES THAT FOR THE PURPOSES OF SECTION 80IB (10) THE HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON TH E DATE ON WHICH THE FIRST APPROVAL WAS GRANTED BY THE LOCAL A UTHORITY. THUS, THE EXPLANATION TO SECTION 80IB (10)(A) REFER S TO THE APPROVAL GRANTED TO THE SAME HOUSING PROJECT MORE T HAN ONCE AND THE SAID EXPLANATION WOULD NOT APPLY WHERE THE APPROVAL IS GRANTED TO DIFFERENT HOUSING PROJECTS. IN THE PR ESENT CASE, AS NOTED EARLIER, CONSTRUCTION OF 'E' BUILDING CONSTIT UTES AN INDEPENDENT HOUSING PROJECT AND, THEREFORE, THE DAT E ON WHICH THE EARLIER HOUSING PROJECT HAD COMMENCED CONSTRUCT ION COULD NOT BE APPLIED TO THE HOUSING PROJECT CONSISTING OF 'E' BUILDING MERELY BECAUSE THE CONDITIONS SET OUT WHILE GRANTIN G APPROVAL TO THE EARLIER HOUSING PROJECT HAVE ALSO BEEN MADE APPLICABLE TO THE HOUSING PROJECT IN QUESTION. 23. THE NEXT ARGUMENT OF THE REVENUE IS THAT TO AVA IL THE DEDUCTION UNDER SECTION 80IB (10), THE HOUSING PROJ ECT MUST BE ON THE SIZE OF A VACANT PLOT OF LAND WHICH HAS M INIMUM AREA OF ONE ACRE. IN THE PRESENT CASE, THERE ARE FI VE BUILDINGS (A, B, C, D AND E) ON A PLOT AD-MEASURING 2.36 ACRE S, HENCE, THE PROPORTIONATE AREA FOR EACH BUILDING WOULD BE L ESS THAN 12 ONE ACRE AND, THEREFORE, THE BENEFIT OF SECTION 80I B (10) COULD NOT BE GRANTED IN RESPECT OF THE HOUSING PROJECT CO NSISTING 'E' BUILDING. 24. AS RIGHTLY CONTENDED BY THE COUNSEL FOR THE ASS ESSEE AND THE INTERVENORS, SECTION 80IB (10)(B) SPECIFIES THE SIZE OF THE PLOT OF LAND BUT NOT THE SIZE OF THE HOUSING PROJEC T. THE SIZE OF THE PLOT OF LAND, AS PER SECTION 80IB (10) MUST HAV E MINIMUM AREA OF ONE ACRE. THE SECTION DOES NOT LAY DOWN THA T THE PLOT HAVING MINIMUM AREA OF ONE ACRE MUST BE A VACANT PL OT. 25. THE QUESTION, THEREFORE, TO BE CONSIDERED IS, W HETHER THE REVENUE IS JUSTIFIED IN READING THE EXPRESSION 'PLO T OF LAND' IN SECTION 80IB (10)(B) AS 'VACANT PLOT OF LAND' ? 26. THE OBJECT OF SECTION 80IB (10) IN GRANTING DED UCTION EQUAL TO ONE HUNDRED PER CENT OF THE PROFITS OF AN UNDERT AKING ARISING FROM DEVELOPING AND CONSTRUCTING A HOUSING PROJECT IS WITH A VIEW TO BOOST THE STOCK OF HOUSES FOR LOWER AND MIDDLE INCOME GROUPS SUBJECT TO FULFILLING THE SPECIFIED C ONDITIONS. THE FACT THAT THE MAXIMUM SIZE OF THE RESIDENTIAL U NIT IN A HOUSING PROJECT SITUATED WITHIN THE CITY OF MUMBAI AND DELHI IS RESTRICTED TO 1000 SQUARE FEET CLEARLY SHOWS THA T THE INTENTION OF THE LEGISLATURE IS TO MAKE AVAILABLE L ARGE NUMBER OF MEDIUM SIZE RESIDENTIAL UNITS FOR THE BENEFIT OF THE COMMON MAN. HOWEVER, IN THE ABSENCE OF DEFINING THE EXPRES SION 'HOUSING PROJECT' AND IN THE ABSENCE OF SPECIFYING THE SIZE OR THE NUMBER OF HOUSING PROJECTS REQUIRED TO BE CONST RUCTED ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE, EVE N ONE HOUSING PROJECT CONTAINING MULTIPLE RESIDENTIAL UNI TS OF A SIZE NOT EXCEEDING 1000 SQUARE FEET CONSTRUCTED ON A PLO T OF LAND HAVING MINIMUM AREA OF ONE ACRE WOULD BE ELIGIBLE F OR SECTION 80IB (10) DEDUCTION. IF THE CONSTRUCTION OF SECTION 80IB (10) PUT FORTH BY THE REVENUE IS ACCEPTED, IT WOULD MEAN THAT IF ON A VACANT PLOT OF LAND, ONE HOUSING PROJECT FULFILLI NG ALL CONDITIONS IS UNDERTAKEN, THEN DEDUCTION WOULD BE A VAILABLE TO THAT HOUSING PROJECT AND IF THEREAFTER SEVERAL OTHE R HOUSING PROJECTS ARE UNDERTAKEN ON THE VERY SAME PLOT OF LA ND, THE DEDUCTION WOULD NOT BE AVAILABLE TO THOSE HOUSING P ROJECTS AS THE PLOT CEASES TO BE A VACANT PLOT AFTER THE CONST RUCTION OF THE FIRST HOUSING PROJECT. SUCH A CONSTRUCTION IF ACCEP TED WOULD DEFEAT THE OBJECT WITH WHICH SECTION 80IB (10) WAS ENACTED. 27. MOREOVER, PLAIN READING OF SECTION 80IB (10) DO ES NOT EVEN REMOTELY SUGGEST THAT THE PLOT OF LAND HAVING MINIM UM AREA OF ONE ACRE MUST BE VACANT. THE SAID SECTION ALLOWS DE DUCTION TO A HOUSING PROJECT (SUBJECT TO FULFILLING ALL OTHER CONDITIONS) CONSTRUCTED ON A PLOT OF LAND HAVING MINIMUM AREA O F ONE ACRE AND IT IS IMMATERIAL AS TO WHETHER ANY OTHER HOUSIN G PROJECTS ARE EXISTING ON THE SAID PLOT OF LAND OR NOT. IN TH ESE CIRCUMSTANCES, CONSTRUING THE PROVISIONS OF SECTION 80IB (10) BY ADDING WORDS TO THE STATUTE IS WHOLLY UNWARRANTE D AND 13 SUCH A CONSTRUCTION WHICH DEFEATS THE OBJECT WITH W HICH THE SECTION WAS ENACTED MUST BE REJECTED. 28. APART FROM THE ABOVE, THE CENTRAL BOARD OF DIRE CT TAXES (CBDT) BY ITS LETTER DATED 4TH MAY 2001 ADDRESSED T O THE MAHARASHTRA CHAMBER OF HOUSING INDUSTRY HAS STATED THUS : 'THE UNDERSIGNED IS DIRECTED TO REFER TO YOUR LETTE R NO.MCHI:RSA:M:388/19799/3 DATED 1ST JANUARY 2001 AN D TO STATE THAT THE ADDITIONAL HOUSING PROJECT ON EXISTI NG HOUSING PROJECT SITE CAN QUALIFY AS INFRASTRUCTURE FACILITY UNDER SECTION 10(23G) AND 80IB (10) PROVIDED IT IS TAKEN UP BY A SEPARATE UNDERTAKING, HAVING SEPARATE BOOKS OF ACCOUNTS, SO AS TO ENSURE THAT CORRECT PROFITS CAN BE ASCERTAINED FOR THE PURPOSE OF SECTION 80IB AND ALSO TO IDENTIFY RECEIPTS AND R EPAYMENTS OF LONG TERM FINANCES UNDER THE PROVISIONS OF SECTION 10(23G), SEPARATELY FINANCING ARRANGEMENTS AND ALSO, IF IT S EPARATELY FULFILLS ALL OTHER STATUTORY CONDITIONS LISTED IN S ECTIONS 10(23G) AND 80(B(10). WITH REGARD TO YOUR QUERY REGARDING T HE DEFINITION OF HOUSING PROJECT, IT IS CLARIFIED THAT ANY PROJECT WHICH HAS BEEN APPROVED BY A LOCAL AUTHORITY AS A H OUSING PROJECT SHOULD BE CONSIDERED ADEQUATE FOR THE PURPO SE OF SECTION 10(23G) AND 80IB (10).' 29. FROM THE AFORESAID LETTER OF CBDT, IT IS CLEAR THAT FOR THE PURPOSES OF SECTION 80IB (10) IT IS NOT THE MANDATE OF THE SECTION THAT THE HOUSING PROJECT MUST BE ON A VACAN T PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE AND THAT WHERE A NEW HOUSING PROJECT IS CONSTRUCTED ON A PLOT OF LAND HA VING MINIMUM AREA OF ONE ACRE BUT WITH EXISTING HOUSING PROJECTS WOULD QUALIFY FOR SECTION 80IB (10) DEDUCTION. EVEN OTHERWISE, THE ARGUMENT OF THE REVENUE DOES NOT STAND TO REASO N BECAUSE, IN THE CITY OF MUMBAI WHERE THERE IS ACUTE SPACE CRUNCH, IT IS DIFFICULT TO FIND A VACANT PLOT HAVIN G MINIMUM AREA OF ONE ACRE AND EVEN IF FEW SUCH PLOTS ARE EXI STING IT CANNOT BE SAID THAT SECTION 80IB (10) DEDUCTION WAS INTENDED TO GIVE BENEFIT ONLY TO THE UNDERTAKINGS WHO CONSTR UCT HOUSING PROJECTS ON THOSE FEW PLOTS. THEREFORE, IT IS CLEAR THAT ON A PLOT OF LAND HAVING MINIMUM AREA OF ONE ACRE, THERE CAN BE ANY NUMBER OF HOUSING PROJECTS AND SO LONG AS THOSE HOU SING PROJECTS ARE APPROVED BY THE LOCAL AUTHORITY AND FU LFILL THE CONDITIONS SET OUT UNDER SECTION 80IB (10), THE DED UCTION THEREUNDER CANNOT BE DENIED TO ALL THOSE HOUSING PR OJECTS. SECTION 80IB (10) WHILE SPECIFYING THE SIZE OF THE PLOT OF LAND, DOES NOT SPECIFY THE SIZE OR THE NUMBER OF HOUSING PROJECTS THAT ARE REQUIRED TO BE UNDERTAKEN ON A PLOT HAVING MINIMUM AREA OF ONE ACRE. AS A RESULT, SIGNIFICANCE OF THE SIZE OF THE PLOT OF LAND IS LOST AND, THEREFORE, THE ASSESSEE SUBJEC T TO FULFILLING OTHER CONDITIONS BECOMES ENTITLED TO SECTION 80IB ( 10) DEDUCTION ON CONSTRUCTION OF A HOUSING PROJECT ON A PLOT HAVING AREA OF ONE ACRE, IRRESPECTIVE OF THE FACT T HAT THERE EXIST OTHER HOUSING PROJECTS OR NOT. IN THESE CIRCUMSTANC ES, THE 14 DECISION OF THE TRIBUNAL IN REJECTING THE CONTENTIO N OF THE REVENUE REGARDING THE SIZE OF THE PLOT CANNOT BE FA ULTED. 30. THE LAST ARGUMENT OF THE REVENUE IN DECLINING T O GRANT DEDUCTION UNDER SECTION 80IB (10) IS THAT TWO FLATS ON THE GROUND FLOOR OF BUILDING 'E' WERE MERGED IN TO ONE FLAT, AS A RESULT WHEREOF THE MAXIMUM SIZE OF THE RESIDENTIAL UNIT EXCEEDED 1000 SQUARE FEET WHICH IS IN VIOLATION OF THE CONDITION SET OUT IN SECTION 80IB (10) AND, THEREFO RE, THE ASSESSEE IS NOT ENTITLED TO THE DEDUCTION. THE TRIB UNAL ON APPRECIATION OF THE FACTS AND THE EVIDENCE ON RECOR D ARRIVED AT THE CONCLUSION THAT THERE WAS NO MERGER OF FLATS AN D IN FACT BOTH THE FLATS IN QUESTION WERE NEITHER SOLD NOR AN Y APPLICATION WAS MADE BEFORE THE LOCAL AUTHORITY SEEKING MERGER OF TWO FLATS ON THE GROUND FLOOR OF 'E' BUILDING. THUS, NO FAULT CAN BE FOUND WITH THE DECISION OF THE TRIBUNAL IN REJECTING THE ARGUMENT OF THE REVENUE RELATING TO THE MERGER OF THE FLATS. 31. IN THE RESULT, THE COMMON QUESTION OF LAW FRAME D IN THESE TWO APPEALS ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ACCORDING TO LD. AUTHORISED REPRESENTATIVE RATIO O F THIS CASE IS APPLICABLE TO FACTS OF ASSESSEES CASE AS WELL. 6. REFERRING TO THE DECISION OF THE PUNE BENCH OF T HE TRIBUNAL IN THE CASE OF APPORVA PROPERTIES AND ESTATES PVT. LTD ., IN ITA NO.113/PN/2007, ITAT PUNE BENCH, HE DREW THE ATTENT ION OF THE BENCH WHEREIN IT HAS BEEN HELD AS UNDER: 7. WE FIND THAT THE OBJECTIONS BASED ON WHICH THE IMPUGNED CLAIM OF DEDUCTION U/S 80-18(10) IS REJECTED HAVE B EEN CONSIDERED BY THE COORDINATE BENCHES ON A FEW OCCAS IONS AS ALSO THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BRAHMA ASSOCIATES VS. JOINT CIT (OSD) CIR. A, PUNE (2009) 119 ITD 255. AS REGARDS THE QUESTION OF COMMERCIAL USE OF B UILT UP AREA THE SPECIAL BENCH HAS OPINED THAT AS LONG AS I T DOES NOT EXCEED 10% OF THE TOTAL BUILT UP AREA, THE PROJECT WILL CONTINUE TO HAVE THE CHARACTER OF HOUSING PROJECT AND ACCORD INGLY, THE DEDUCTION U/S 80-16(10) CANNOT BE DECLINED FOR THAT REASON ALONE. IN THE PRESENT CASE, THE COMMERCIAL BUILT UP AREA IS HARDLY LESS THAN 10%. AS REGARDS THE QUESTION ABOUT SIZE OF THE FLATS WE HAVE TAKEN NOTE OF THE FACTUAL POSITIO N THAT EVEN ACCORDING TO THE ASSESSING OFFICER NONE OF THE FLAT S IN PHASE 11 EXCEEDS THE SIZE OF 1500 SQ.FT. IN ANY EVENT IN THE COURSE OF REMAND PROCEEDINGS, THE MATTER WAS EXAMINED BY THE ASSESSING OFFICER AGAIN. THE ASSESSING OFFICER IS N OT ABLE TO POINT OUT ANY SPECIFIC VIOLATION OF THE SAID PROVIS ION. LEARNED DEPARTMENTAL REPRESENTATIVE VERY FAIRLY ACCEPTED TH AT HE IS NOT IN A POSITION TO POINT OUT ANY SUCH INSTANCE. THAT LEAVES US A QUESTION AS TO WHETHER KUMAR KARISHMA IS TO BE TREA TED AS AN 15 INTEGRAL AND INSEPARABLE PROJECT OR VARIOUS PROJECT S OF THIS PROJECT CAN BE CONSIDERED ON A STANDALONE BASIS. ON E OF THE MAJOR ARGUMENTS IN SUPPORT OF THE ENTIRE PROJECT BE ING TREATED AS ONE PROJECT IS COMMON FACILITIES USED BY THE FLA T OWNERS BUT THEN WE ARE UNABLE TO APPRECIATE AS TO HOW MERE FAC T OF FACILITIES BEING COMMON CAN BE USED AGAINST THE ASS ESSEE'S CLAIM OF SEPARATE PROJECT. IT IS VERY WELL POSSIBLE THAT THE AMENITIES OF ONE PROJECT CAN BE USED BY RESIDENTS O F THE OTHER PROJECT AND THAT ALONE CANNOT ALTER THE CHARACTER O F INDEPENDENT PROJECT. AS WE MENTIONED EARLIER, THERE ARE NUMBER OF DECISIONS OF CO-ORDINATE BENCHES INCLUDIN G SAROJ SALES ORGANIZATION VS. 1TO (2008) 115 TTJ (BOM) 485 AND CIT VS. BRIGADE ENTERPRISES (2008) 119 TTJ (BANG) 269 W HEREIN IT IS HELD THAT AS LONG AS DIFFERENT BLOCKS CAN SATISF Y THE REQUIREMENT OF SECTION 80-18(10) ON A STANDALONE BA SIS, THEIR CLAIM CANNOT BE REJECTED MERELY ON THE GROUND THAT THEY ARE PART OF LARGER LAY OUT. IN THE PRESENT CASE, THERE IS NO DISPUTE THAT THE ASSESSEE HAS CONSTRUCTED DIFFERENT BLOCKS OF RESIDENTIAL BUILDINGS AND HE HAS NOT CLAIMED DEDUCT ION U/S 80-16(10) IN RESPECT OF BUILDING WHICH WAS NOT ELIG IBLE FOR THE SAME. IT IS ALSO NOT DISPUTED THAT SEPARATE SANCTIO NS WERE GRANTED BY THE PUNE MUNICIPAL CORPORATION FOR THE P HASE II OF THE PROJECT AND THAT IT SATISFIES THE CONDITIONS OF SECTION 80- IB(10) ON A STANDALONE BASIS. AS HAS BEEN HELD BY T HE CO- ORDINATE BENCHES THE CONCEPT OF HOUSING PROJECT DOE S NOT MEAN THAT THERE SHOULD BE A GROUP OF BUILDINGS AND ONLY THEN THE SAME CAN BE COLLECTIVELY CALLED AS A HOUSING PR OJECT. IN THE CASE OF SAROJ SALES ORGANIZATION (SUPRA), WHILE DEA LING WITH THIS CONTENTION, THE COORDINATE BENCH HAS OBSERVED AS FOLLOWS: 'THE COMMENCEMENT CERTIFICATES IN RESPECT OF BUILDI NG NO.1 CONSISTING OF WINGS A AND B WERE RECEIVED BY C APL ON 7TH MARCH, 2001 AND 30TH MARCH, 2001 RESPECTIVEL Y. BUT THE COMMENCEMENT CERTIFICATES FOR VARIOUS WINGS IN BLOCK N WERE APPROVED BY THE MUNICIPALITY ON VARIOU S DATES BETWEEN 10 TH SEPT., 2001 TO 23 RD SEPT., 2003. ALL THE SIX WINGS ARE PART OF N BLOCK AND INDEPENDENTLY SATISFIES THE NECESSARY APPROVAL OF A HOUSING PROJE CT. IT REALLY MAKES NO DIFFERENCE WHETHER CAPL HAD APPLIED FOR OR THE ASSESSES HAD APPLIED TO THE MUNICIPAL CORPOR ATION TO MAKE ANY DIFFERENCE IN DECIDING THE ASSESSEE'S C LAIM FOR DEDUCTION UNDER S. 80-IB(10). IT MUST BE APPREC IATED THAT THE MAIN DEVELOPER WAS CAPL. THE SANCTION PLAN HAVE ONLY APPROVED THE CONSTRUCTION OF THE DWELLING UNITS OF LESS THAN 1000 SQ.FT. IN ALL THE WINGS OF THE SA ID PROJECT. THERE IS NO DISPUTE THAT ALL THE FLATS IN THE WINGS IN BLOCK 'N' CONTAIN THE ELIGIBLE UNITS. IT IS NOT OPEN TO THE REVENUE TO INCLUDE THE NEXT PROJECT 'BC' BLOCK, AS PART OF THE EARLIER HOUSING PROJECT JUST TO DENY THE STATUT ORY RELIEF, WHICH THE ASSESSES IS ENTITLED IN RESPECT O F THE ELIGIBLE HOUSING PROJECT. IN THAT WAY THE LEGISLATI VE INTENTION TO GIVE A RELIEF TO THE ASSESSEE WHO IS 16 UNDERTAKING THE LAW HOUSING PROJECTS WILL GET DEFEA TED. 'BC' PROJECT WAS MEANT FOR HIGHER STRATA OF THE SOC IETY. THE ASSESSEE HAS SEGREGATED THE SAME AND IN NO WAY MIXED IN THESE PROJECTS EITHER IN THE DESIGN OR IN THE STRUCTURAL MANIPULATION OR IN THE PROVISION OF AMEN ITIES, AND THE ASSESSEE HAS NOT CLAIMED ANY RELIEF IN RESP ECT OF PROJECT WHICH ADMITTEDLY DOES NOT ADMIT THE TEST LA ID DOWN UNDER S. 80-IB(10). COMBINING THESE TWO PROJEC TS INTO ONE WILL LEAD TO A RESULT, WHICH MANIFESTLY WI LL BE UNJUST AND ABSURD AND DEFEAT THE VERY PROVISIONS OF DEDUCTION SECTIONS. UNLESS THERE IS A CLEAR INTENTI ON OF THE LEGISLATOR THE REVENUE CANNOT TIE PERMITTED TO DO SO. AFTER ALL THE ASSESSEE HAS OBTAINED DIFFERENT COMMENCEMENT CERTIFICATES AND STARTED ON DIFFERENT PERIODS OF TIME. THEY ARE SEPARATE BY TIME, SPACE A ND STATUTORY APPROVALS AND EVEN IN DESIGNS, MAINTENANC E OF SEPARATE BOOKS OF ACCOUNT. THE REVENUE IS NOT RIGHT IN TREATING BOTH THE PROJECTS AS ONE AND INTEGRATED WI THOUT THE FACTS WARRANTING FOR SUCH CONCLUSION. OBJECTION OF THE AO THAT AS THE PERMISSIBLE SHOPPING AREA OF HOUSING PROJECT EXCEEDS 5 PER CENT, THE ASSESSEE IS NOT ENT ITLED FOR RELIEF UNDER S. 80-IB(10) IS NOT SUSTAINABLE. THE H OUSING PROJECTS WERE APPROVED BEFORE 31 ST MARCH, 2005 AND FOR SUCH PROJECT, WHICH WERE SO APPROVED, THERE WAS NO STIPULATION AS TO THE SHOPPING COMPLEX AREA IS PERMISSIBLE IN THE PROJECT. THE AMENDMENTS WERE SUBSEQUENTLY MADE WHILE EXTENDING THE DEDUCTION OF INCOME FROM HOUSING PROJECT APPROVED UPTO 31 ST MARCH, 2007, AND THE DENIAL OF DEDUCTION IS CLEARLY NOT IN ACCORDANCE WITH TAW. AS THE OCCUPATION CERTIFICATE IN RESPECT OF THE WINGS F, FL AND G HAVE BEEN ISSUED O N 20 TH DEC., 2006, I.E. PRIOR TO 31 ST MARCH, 2008, THE CONDITION RELATING TO COMPLETION OF THE CONSTRUCTIO N AS PRESCRIBED IN S.80-IB(10)(A) SHOULD ALSO BE TAKEN T O BE SATISFIED. -BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VS. DY. CIT (ITA NOS.1594 AND 1737/KOL/2005 DTD. 24 TH APRIL. 2006) RELIED ON. ASSESSEE HAVING COMPLETED THE CONSTRUCTION OF VARIO US WINGS OF THE BUILDING FINDER THE APPROVED PLAN IN T WO DIFFERENT BLOCKS UNDER DIFFERENT CERTIFICATES OF COMMENCEMENT, WAS ELIGIBLE FOR DEDUCTION U/S 80-IB( 10) IN RESPECT OF ONE BLOCK IN RESPECT OF WHICH CLAIM F OR DEDUCTION WAS MADE AND WHICH SATISFIED THE REQUIREM ENT OF SEC. 80-IB(10); CLAIM COULD NOT BE DENIED BY CLU BBING THE TWO BLOCKS ESPECIALLY WHEN THE SECOND BLOCK HAD BEEN KEPT SEPARATE BY THE ASSESSEE AND FOR WHICH DEDUCTION UNDER SEC. 80-IB(10) WAS NOT CLAIMED. ' 8. WE HAVE ALSO NOTED THAT AS EVIDENT FROM THE FOL LOWING CHART, THE CONDITIONS OF PLOT SIZE AS REQUIRED BY S ECTION 80- IB(10) OF THE ACT ARE INDEPENDENTLY SPECIFIED BY PH ASE II. 17 SR. NO. PARTICULARS PHASE - I PHASE - II TOTAL 1 TOTAL PLOT AREA 7723 (IN ACRES - 1 .99) 20577 (IN ACRES - 5.08) 28300 2 RESIDENTIAL (SALEABLE BUILT- UP AREA) 13511 21970 35481 3 AREA COVERED BY AMENITIES' 1060 1 596 2656 4 COMMERCIAL AREA 10 9 0 - 1090 TOTAL (2+3+4) 15661 23566 39228 ** PLEASE NOTE THAT THE AREA COVERED BY COMMON AMEN ITIES IS DIVIDED AMONGST PHASE-L & PHASE-11 CONSIDERING THE TOTAL RESIDENTIAL SALEABLE AREA OF THE RESPECTIVE PHASES. 8. IN THIS VIEW OF THE MATTER AND BEARING IN MIND T HE ENTIRETY OF THE CASE, WE ARE UNABLE TO APPROVE THE ORDER OF THE CIT(A) IN DECLINING DEDUCTION U/S 80-IB(10) OF THE ACT. IN OU R CONSIDERED VIEW AND IN THE LIGHT OF THE DECISIONS OF THE CO-OR DINATE BENCHES, THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80-IB(10) OF THE ACT. WE ACCORDINGLY DIRECT THE ASSESSING OFFICE R TO GRANT THE SAME. ACCORDING TO LD. AUTHORISED REPRESENTATIVE RATIO O F THIS CASE SUPPORT ASSESSEES CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. 7. HE SUBMITTED THAT THE ITAT, PUNE BENCH, IN THE C ASE OF DCIT VS. ADITYA DEVELOPERS IN ITA.NO.791 & 792/PN/2008, HAS HELD AS UNDER: 6. WE HAVE CONSIDERED THE ABOVE SUBMISSIONS AND H AVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, M ATERIAL AVAILABLE ON THE RECORD AND THE DECISIONS RELIED UP ON BY THE PARTIES. THE FACTS IN DETAILS SUBMITTED BY THE ASS ESSEE BEFORE THE A.O VIDE LETTER DATED 16.10.2006 HAVE ALSO BEEN GONE THROUGH. FOR A READY REFERENCE, PARA NOS. 1 TO 8 O F THE LETTER DATED 16.10.2006 SUBMITTED BY THE ASSESSEE BEFORE T HE A.O ARE BEING REPRODUCED HEREUNDER: 1. M/S ADITYA DEVELOPERS PURCHASED A PLOT OF LAND BEARING SURVEY NO. 1/A(PART) OF KONDHWA KHURD, PUNE FROM RANADE AND THEIR RELATIVES. THEREAFTER M/S. A DITYA DEVELOPERS GOT THE CLEARANCE FROM URBAN AND LAND CE ILING DEPARTMENT VIDE ORDER DATED 17-8-1988. THEN WE GOT LAYOUT PLANS SANCTIONED FROM THE PMC VIDE ORDER DA TED 25-5-1990. AS PER THE TERMS OF THE ULC WE HAVE TO SHOW 25 S1.MTR COREHOUSE PLOTS AND BUILDING IN LAYOUT PL AN AND GET IT SANCTIONED FROM PMC. IF WE DONT IMPLEMENT THEIR ORDER AD SHOW THE VACANT LAND IN THE PLAN, THE ULC 18 DEPARTMENT MIGHT HAVE INITIATED ACQUISITION PROCED URE. THE TOTAL LAND AREA WAS 28905 SQ.MTR. IT WAS NOT P OSSIBLE FOR US TO START CONSTRUCTION AND DEVELOPMENT OF EN TIRE LAND. SO WE STARTED DEVELOPMENT AND CONSTRUCTION O F FRONT AREA OF LAND. IN THE YEAR 1994, WE HAVE REQUESTED GOVT. OF MAHARASHTRA TO ACCEPT THE CONSIDERATION IN LIEU OF CERTAIN CONDITIONS STIPULATED IN THEIR ORDER FOR DELETING C ONSTRUCTION OF COREHOUSE PLOTS & SMALL AREA FLATS. AFTER A LON G HEARINGS THEY ACCEPTED OUR REQUEST AND ON PAYMENT M ADE, ISSUED US ORDER ON 14-12-1994 BECAUSE OF WHICH WE W ERE ENTITLED TO CANCEL THE CERTAIN BUILDING AND 112 COREHOUSESOF 25 SQ.M. PROPOSED FOR WEAKER SECTION. WE GOT OUR LAND REVERTED BACK FROM ULC DEPT. ON PAYMEN T OF CONSIDERATION TO GOVT. BY ORDER ON 14-12-1994. 2. WE HAVE COMPLETED THE DEVELOPMENT AND CONSTRUCTI ON OF THE BUILDINGS A,B,C,D,E,F,G,H & J ON PORTION OF LAND BEARING S.NO.1(PART), KONDHWA KHURD. 3. THEREAFTER THE PROVISION OF THE SECTION 80IB(10) CAME INTO FORCE. THE VACANT LAND AREA OF 8966 S1.MTR WAS AVAILABLE FOR THE NEW PROJECT WITH US. SO WE PLANN ED A NEW PROJECT AS PER THE NORMS OF PROVISIONS OF 80IB (10) ON VACANT LAND OF 8966 SQ.MTR AT S.NO.1(PART), KONDHWA , THE BUILDING PLANS WERE PREPARED IN SUCH A WAY THAT AR EA OF EACH UNIT WILL BE LESS THAN 1500 SQ.FT. WE GOT TH E BUILDING PLANS SANCTIONED ON 9-3-2001 AND 29-3-2001 AND WORK OF THE PROJECT STARTED ONLY AFTER THE BUILDING PLANS SANCTION IN MARCH 2001. IT IS VERY IMPORTANT TO NOTE THAT THE LAND OF 8966 SQ.MTR WAS VACANT AND ACCORDING TO RULES OF PMC (LOCAL AUTHORITY), ALL THE SANCTIONS PRIOR TO 9-3-2 001 & 29- 3-2001 GET CANCELLED AND LAPSED ON VACANT LAND OF 8 966 SQ.MTR. AT S.NO.1(PART) KONDHWA. 4. WE HAVE CONSTRUCTED THE BUILDINGS K,M,N,I,O & P ON VACANT LAND AT SURVEY NO. 1(A) (PART) KONDHWA KHURD , PUNE WHICH IS CARVED OUT SEPARATELY ON SITE. TDR U SED IS LESS THAN 40% OF AREA OF LAND OF 8966 SQ.MTR. WE G OT SANCTIONED NEW BUILDING PLANS AS PER NORMS OF 80IB( 10) PROVISIONS IN MARCH 2001 & CONSTRUCTED ALL FLATS F OLLOWING ALL THESE NORMS. SINCE OUR NEW HOUSING PROJECT IS AS PER THE PLANS SANCTIONED IN MARCH 2001, IT IS NO WAY CONCERNED WITH EARLIER LAPSED SANCTIONS. WE HAVE N EVER STARTED ANY DEVELOPMENT OR CONSTRUCTION PRIOR TO MARCH 2001 ON THE REAR AREA OF LAND OF 8966 SQ.MTR ON WHI CH BUILDINGS K,M,N,I,O,P HAVE BEEN CONSTRUCTED. IN SU PPORT OF THIS WE ARE ENCLOSING HEREWITH PHOTOCOPY OF LETTER OF PMC DT. 5-10-2006. ENGLISH TRANSLATION OF THE SAME IS A S UNDER: PUNE MUNICIPAL CORPORATION CONSTRUCTION CONTROL DEPT. OUTWARD NO. BCO/5102 19 DATE: 5-10-2006 TO, M/S ADITYA DEVELOOERS, RESIDING AT SADASHIV PETH NO. 619,PUNE 30 SUB: REGARDING CONSTRUCTION ON S.NO.1(PART), KONDHWA, PUNE REF: YOUR LETTER DT. 3-10-2006 ON THE ABOVE MENTIONED SUBJECT AND UNDER THE LETTER REFERRED ABOVE, IT IS BEING INFORMED THAT PERMISSIO N FOR CONSTRUCTION OF K BUILDING AT S.NO. 1(PART) KONDHWA KHURD, PUNE WAS GIVEN VIDE NO. 4975 DT. 9-3-01 AND CERTIFICATE OF PLINTH CHECKING WAS GIVEN UNDER NO. BCO/03/74 DT. 27-9-2001. ALSO PERMISSION FOR BUILDING MNIOP WAS GIVEN VIDE LETTE R NO. 4981 DT. 29-3-2001 AS PER THE AVAILABLE RECOR D THERE IS NO MENTION OF ANY BUILDING CONSTRUCTION O F WHATSOEVER NATURE WAS FOUND ON THE LAND OF ABOVE BUILDINGS BEFORE SANCTIONING PERMISSION FOR ABOVE CONSTRUCTION. SD/- SD ASST. ENGINEER BUILDING INSPECTOR PUNE MUNICIPAL CORPORAT ION _________________________________________________ 5. CERTIFICATES OF OUR ARCHITECT DATED 14-10-2006 CONFIRMING THIS FACT IS ALSO ENCLOSED FOR YOUR CONSIDERATION. 6. THE TDR WAS PURCHASED FROM THE OPEN MARKET AND UTILIZED AS WELL AS DEBITED TO PROFIT & LOSS ACCOUNT IN BOOKS OF ACCOUNT WAS NOT MORE THAN 40% OF 8966 SQ.MTR. WE HAVE UTILIZED TDR BY PURCHASING IT FROM OUTSIDE LAND OWNERS FROM THE OPEN MARKET AND THEN PREVAILING MARKET PRICE. 7. WE HAVE BROUGHT ALL THESE FACTS TO NOTICE OF ASSESSING OFFICER DURING THE SCRUTINY OF OUR ACCOUN TS FOR A.Y. 2001-2002. IT IS CLEARLY EVIDENT IN THE ASSESSMENT ORDER OF A.Y. 2001-2002 THAT THE TWO PROJECTS ARE SEPARATE AND P/L ACCOUNT AS WELL AS WORKS IN PROGRESS ARE SEPARATELY SHOWN IN ASSESSMENT ORDER ALSO. 8. WE HAVE CONSTRUCTED ALL THE RESIDENTIAL UNITS EACH HAVING AREA OF LESS THAN 1500 SQ.FT. IN THE BUILDINGS K, M,N,I,O,P IN OUR NEW HOUSING PROJECT. IT IS NO WAY CONCERNED WITH THE RESIDENTIAL & COMMERCIAL UNIT OF EARLIER CONSTRUCTED BUILDING ON SEPARATE PORTION OF LAND AND SAME HAS BEEN REFLECTE D IN SEPARATE BOOKS OF ACCOUNTS AND WE HAVE ALREADY PAID TAXES ON IT. 20 THE SUBMISSION OF THE LD. D.R. REMAINED THAT THE DE CISION OF PUNE BENCH IN THE CASE OF NIRMITI CONSTRUCTION VS. DCIT (SUPRA) FOLLOWED BY THE LD CIT(A), HAVING DIFFERENT FACTS IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE. HAVING GON E THROUGH THAT DECISION, WE DO NOT AGREE WITH THE ABOVE CONTE NTION OF THE LD. D.R. THE DECISION FULLY COVERS THE CASE OF THE ASSESSEE ON THE ISSUE. IT APPEARS THAT THE WHOLE CONFUSION ON T HE ISSUE IN THE MIND OF THE A.O WAS DUE TO HIS UNDERSTANDING OF LAY OUT PLAN AND BUILDING PLAN ONE AND THE SAME THING, HENC E HE HAS COMMITTED ERROR IN TREATING THE DATE OF APPROVAL OF THE] LAY OUT PLAN BY THE MUNICIPAL CORPORATION AS THE DATE OF AP PROVAL OF THE BUILDING PLAN TO COMPUTE THE PERIOD OF COMPLETI ON OF THE BUILDING PLAN TO VERIFY THE ELIGIBILITY OF THE CLAI MED DEDUCTION U/S. 80IB(10) OF THE ACT. PUNE BENCH OF THE TRIBUN AL HAS OCCASION TO DISCUSS THE DISTINCTION BETWEEN THE LAY OUT PLAN AND BUILDING PLAN IN THE CASE OF NIRMITI CONSTRUCTI ON (SUPRA). IN THAT CASE BEFORE THE TRIBUNAL, THE LAY OUTS WERE FURNISHED TO THE MUNICIPAL CORPORATION FOR SANCTION ON 6 TH JUNE 1998 AND CONSTRUCTION WORK WAS COMMENCED AFTER BUILDING PERM ISSION WAS SANCTIONED BY THE MUNICIPAL CORPORATION ON 23 RD JULY 1999. DEPARTMENT TOOK THE STAND THAT THE DEVELOPME NT COMMENCED WITH THE DEVELOPMENT AGREEMENT AND ACQUIR ING IRRECOVERABLE POWER OF ATTORNEY AND MORE SO THAT LA Y OUTS WERE FURNISHED TO THE MUNICIPAL CORPORATION FOR PRELIMIN ARY SANCTION ON 6 TH JUNE 1998, THE ASSESSEES SUBMITTED THAT THE PRELIMINARY SANCTION WAS REQUIRED TO BE GIVEN WHICH CONSTITUTED NO OBJECTION FROM MUNICIPAL CORPORATI ON FOR ALLOWING ASSESSEE TO HAVE THE CONSTRUCTION ON THE S AID PROPERTY. IT WAS CONTENDED THAT ON THE BASIS OF PRELIMINARY SANCTION, THE ASSESSEE MADE AN APPLICATION FOR CONV ERTING THE SAID LAND INTO NON- AGRICULTURAL LAND. THIS APPLI CATION WAS MADE ON 25 TH NOVEMBER 1998 AND THE REVENUE AUTHORITIES CONVERTED THE SAID AGRICULTURAL LAND INTO NON-AGRIC ULTURAL LAND ON 13 TH JUNE 1999. IT WAS ALSO CONTENDED BY THE ASSESSEE THAT THE BUILDING PLAN WAS SUBMITTED TO THE MUNICIPAL C ORPORATION AND THE SAID CORPORATION SANCTIONED THE BUILDING PL AN ON 23 RD JULY 1999. IN OTHER WORDS, THE MUNICIPAL CORPORATIO N GAVE THE PERMISSION OF CONSTRUCTION ON 23 RD JULY 1999. AFTER DISCUSSING THE CASES OF THE PARTIES, THE TRIBUNAL HAS ACCEPTED THE ABOVE CONTENTIONS OF THE ASSESSEE THAT THE HOUSING PROJEC T HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON 23 RD JULY 1999 I.E. AFTER 1 ST OCTOBER1998, HENCE THE ASSESSEE WAS ELIGIBLE FOR TH E CLAIMED DEDUCTION U/S. 80 IB (10) OF THE ACT SINCE IT WAS FULFILLING ALL OTHER REQUIREMENTS OF THE PROVISIONS. 6.1. LIKEWISE, IN THE CASE OF VANDANA PROPERTIES VS. ACIT (SUPRA), THE MUMBAI BENCH OF THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE . IN THAT CASE, THE ASSESSEE HAD PLAN FOR 4 INDEPENDENT BUILDINGS A,B, C & D BUT, SO FAR AS E IS CONCERNED ONLY PLANNED WHEN THE STATUS OF THE SURPLUS LAND WAS CONVERTED AS WITHIN CEILING LIMIT AND TH E ASSESSEE COULD GET ADDITIONAL FSI FOR LAUNCHING WING E . WING E WAS 21 PLANNED AND CONSTRUCTION WAS COMMENCED AFTER 1 ST OCTOBER 1998 AND BUILDING/WING E WAS AN INDEPENDENT HOUS ING PROJECT AS CONTEMPLATED U/S. 80 IB (10). THE TRIBU NAL HELD THAT THE CONCEPT OF HOUSING PROJECT DOES NOT MEAN T HAT SHOULD BE THE GROUP OF THE BUILDINGS AND ONLY THEN SAME IS CALLED A HOUSING PROJECT . IT WAS FURTHER HELD THAT BUILDING/WING E CANNOT BE PASSED WITH EARLIER BUILDINGS I.E. A, B,C & D WHICH WORK WAS COMMENCED IN THE YEAR 1993 WHEREAS PLAN F OR WING E WAS APPROVED FOR ONLY ONCE IN THE YEAR 2002. IT WAS HELD FURTHER THAT THE CONCLUSION DRAWN BY THE AUTHORITIE S BELOW THAT THE COMMENCEMENT OF WING E IS A CONTINUATIO N OF THE EXISTING PROJECT IS ERRONEOUS. 6.2. IN THE CASE OF SAROJ SALES ORGANISATION VS. ITO (SUPRA) , THE MUMBAI BENCH HAS AGAIN EXPRESSED THE SAME VIEW AND HELD THAT THE COMMENCEMENT CERTIFICATES IN RESPECT OF THESE WINGS IN BLOCK N WERE SEPARATELY RECEIVED BY THE ASSESSEE AND ALL THE FLATS IN BLOCK N WERE OF LESS THAN 1 000 SQ.FT., HENCE IT IS NOT OPEN TO THE REVENUE TO INCLUDE BLOC K B, C AS PART OF BLOCK N JUST TO DENY RELIEF U/S. 80IB(10 ) OF THE ACT. THE BANGALORE BENCH OF THE TRIBUNAL HAS ALSO GOT O CCASION TO DISCUSS DISTINCTION BETWEEN THE SANCTION OF LAY OU T PLAN AND APPROVAL OF BUILDING PLANS BY THE LOCAL AUTHORITY F OR CONSIDERATION OF THE ELIGIBILITY OF U/S. 80 IB (10) DEDUCTION IN THE CASE OF DCIT VS. BRIGADE ENTERPRISES (P) LTD. ( SUPRA). IN THAT CASE BEFORE THE BANGALORE BENCH, THE ASSESSEE UNDERTOOK A DEVELOPMENT PROJECT IN AN AREA OF 22 ACRES 19 GUN TAS CONSISTING OF 5 RESIDENTIAL BLOCK RAW HOUSES, OAK TREE PLACE, A CLUB, AND COMMUNITY CENTRE, A SCHOOL, A PARK AND CL AIMED DEDUCTION U/S. 80 IB (10) IN RESPECT OF 2 RESIDENT IAL UNITS WHICH IF DEDUCTED SEPARATELY WERE ELIGIBLE FOR THE RELIEF. THE A.O TREATED THE ENTIRE PROJECT AS A SINGLE UNIT AND DENIED RELIEF U/S. 80 IB (10) IN ENTIRETY. THE TRIBUNAL JUSTIFIED THE ACTION OF THE LD CIT(A) IN ALLOWING RELIEF U/S. 80 IB(10) TRE ATING THE SAID 2 UNITS AS INDEPENDENT UNITS. THE TRIBUNAL OBSERVE D THAT THE GROUP HOUSING APPROVAL WAS APPROVAL OF A MASTER PL AN AS A CONCEPT AND IF A PARTICULAR UNIT SATISFIES THE COND ITION OF SECTION 80 IB (10), THE ASSESSEE IS ENTITLED FOR DE DUCTION. THE TRIBUNAL HELD THAT PLAN FOR DEVELOPMENT WAS ONLY A WORK ORDER AND NOT FINAL PLANS SANCTIONED BY LOCAL AUTHORITY. FOR ANY PROJECT, THERE COULD NOT HAVE BEEN A PLAN WITHOUT SUBMISSION OF THE DETAILED BUILDING PLANS BY THE ARCHITECT A ND ON THE REQUISITE DETAILS REQUIRED TO BE SUBMITTED FOR APP ROVAL OF THE BUILDING PLANS BY THE LOCAL AUTHORITIES. IN OTHER WORDS, THE TRIBUNAL ACCEPTED THE CONTENTION OF THE ASSESSEE TH AT THE DEVELOPMENT PLAN IS ONLY CONCEPTUAL AND THE DETAILE D CONSTRUCTION PLANS ARE NOT SUBMITTED NOR APPROVED WITHOUT WHICH NO CONSTRUCTION CAN EVEN COMMENCE, AND THIS I S DONE ONLY SUBSEQUENTLY WHERE THE ASSESSEE SUBMITS THE CONSTRUCTION PLANS WHICH ARE APPROVED BY THE AUTHO RITY. THIS IS DONE FOR EACH PROJECT. THE PUNE BENCH IN THE CA SES OF APOORVA PROPERTIES AND ESTATE PVT. LTD. VS. DCIT, I TA NO. 22 113/PN/2007, A.Y. 2003-04, ORDER DATED 21ST AUGUST 2009 AND MUMBAI BENCH IN THE CASE OF MUDHIT MADANLAL GUP TA VS/ ACIT (SUPRA), 51 DTR (MUM ) TRIB 217 HAVE EXPRESSED THE SIMILAR VIEW. 7. THERE IS NO REASON TO DISPUTE ON FACTS IN THE PR ESENT CASE THAT INITIALLY THE PROPOSED BUILDINGS ( EXCEPT WING S I, M, N, O, P AND K IN THE PRESENT FORM) LAY OUT PLAN WAS APPRO VED BY THE PMC ON 25.5.1990 ( PAGE 94 OF THE PAPER BOOK). THE PROPOSED BUILDING LAY OUT PLAN WAS REVISED ON 31.3.2001 (PAG E NO. 5 OF THE PAPER BOOK). THE TOTAL AREA OF LAND WAS 28905 S Q. MTRS. THE ASSESSEE HAD FIRSTLY COMPLETED DEVELOPMENT AND CONSTRUCTION OF BUILDINGS A,B, C,D,E,F,G,H & J IN T HE AREA OF 17,392 SQ. MTRS OF PROJECT KKN, LEAVING THE LAND A REA OF 8966 SQ.MTRS VACANT. IN THAT VACANT LAND, THE ASSESSEE STARTED THE CONSTRUCTION OF BUILDINGS IN WINGS K, M, N, I, O, P, K1 AND K2 IN THE PROJECT KKT. IN THIS PROJECT, 188 RESIDEN TIAL UNITS WERE THERE EACH HAVING BUILT UP AREA UPTO 1500 SQ. FT. THE BUILDING PLANS OF THE PROJECT KKT WERE APPROVED ON 9.3.2001 (WINGS K1 AND K2) AND 29.3.2001(WINGS I, M,N,O, P) WHICH WERE COMPLETED ON 10.10.2002 AND 10.2.2003 RESPECTI VELY. COPY OF BUILDING PLAN APPROVED ON 9.3.2001 HAS BEE N MADE AVAILABLE AT PAGE NO. 104 OF THE PAPER BOOK, WHEREA S THE BUILDING PLAN APPROVED ON 29.3.2001 HAS BEEN MADE A VAILABLE AT PAGE NO. 103 OF THE PAPER BOOK. THERE IS NO DI SPUTE ON THE DATES OF COMPLETION OF THE BUILDINGS IN THE HOUSING PROJECT. THE CBDT IN ITS LETTER DATED 4TH MAY 2001 (PAGE NO . 110 OF THE PAPER BOOK) HAS ALSO MADE IT CLEAR THAT THE DEF INITION OF HOUSING PROJECT IS ANY PROJECT WHICH HAS BEEN APP ROVED BY THE LOCAL AUTHORITY AS A HOUSING PROJECT SHOULD B E CONSIDERED ADEQUATE FOR PURPOSE OF SEC. 10(23 G) AND 80 IB (10 ). WE ALSO FIND FROM THE EXPLANATION (I) TO S. 801B(10) THAT THE HOUSING PROJECT AND BUILDING PLAN OF SUCH HOUSING PROJECT ARE TWO DIFFERENT CONCEPT. FOR A READY REFERENCE EXPLANATI ON (I) TO THE SECTION IS BEING REPRODUCED HEREUNDER : EXPLANATION- FOR THE PURPOSES OF THIS CLAUSE, - (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; FROM THE VERY READING OF THE EXPLANATION (I) MAKES IT CLEAR THAT THE DATE ON WHICH BUILDING PLAN OF SUCH HOUSING PRO JECT IS APPROVED SHALL BE DEEMED THE DATE OF APPROVAL OF TH E HOUSING PROJECT. WE THUS FIND THAT THE ASSESSEE IS VERY MUC H ELIGIBLE FOR THE CLAIMED DEDUCTION U/S. 80 IB (10) ON THE PR OJECT KKT IN VIEW OF THE ABOVE CITED DECISIONS INCLUDING DECI SION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF NIRMITI CONSTR UCTION VS. DCIT (SUPRA), FOLLOWING WHICH, IN OUR VIEW, THE LD CIT(A) HAS RIGHTLY ALLOWED THE CLAIMED DEDUCTION. THE SAME I S UPHELD. THE ISSUE RAISED ARE THUS DECIDED IN FAVOUR OF THE ASSESSEE. 23 8. SO FAR AS DECISION OF CHENNAI BENCH OF THE TRIBU NAL IN THE CASE OF ACIT VS. VISWAS PROMOTRS (P) LTD. (SUPR A) RELIED UPON BY THE LD. D.R. IS CONCERNED, WE FIND THAT THE FACTS THEREIN ARE DISTINGUISHABLE AS IN THAT CASE, ASSES SEE HAD COMPLETED 4 HOUSING PROJECTS, OUT OF THOSE 4 PROJE CTS, IN 2 PROJECTS ASSESSEE HAD CONSTRUCTED FLATS EXCEEDING 1 500 SQ.FT. AND ALSO FLATS OF LESS THAN 1500 SQ.FT. IN AREA, T HE ASSESSEE CLAIMED DEDUCTION U/S. 80 IB (10) IN RESPECT OF FLA TS HAVING AREA LESS THAN 1500 SQ.FT., A.O. DENIED SAID DEDUCT ION ON THE GROUND THAT HOUSING PROJECT COMPRISED OF RESIDENTIA L UNITS EXCEEDING 1500 SQ. FT., THUS ALL CONDITIONS STIPULA TED IN STATUTE WERE NOT SATISFIED. THE TRIBUNAL HAS JUST IFIED THE ACTION OF THE A.O. THIS DECISION IS THUS NOT RELEV ANT IN THE FACTS OF THE PRESENT CASE WHEREIN THE PROJECT KKT IS FULFILLING ALL THE REQUIREMENTS OF SEC. 80 IB(10) OF THE ACT A ND APPROVAL TO THE BUILDING PLANS OF THE PROJECT WERE GIVEN SEP ARATELY BY THE MUNICIPAL CORPORATION FROM THE EARLIER PROJECT KKN. THE GROUNDS ARE THUS REJECTED. 9. IN RESULT, APPEALS ARE DISMISSED. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT R ATIO OF THIS CASE ALSO SUPPORTS ASSESSEE CLAIM. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ITAT, PUNE BENCH, IN THE CASE OF ANKIT ENTERPRISES VS. DC IT, IN ITA.NO.1146/PN/10, HAS HELD AS UNDER: 7. WE FIND THAT THE FACTS OF THE PRESENT CASE-BEFO RE US ARE ON BETTER FOOTING THAN THE CASE OF VANDANA PROPERTIES VS. DCIT (SUPRA) AS IN THE PRESENT CASE, ADMITTEDLY, THE LAN D ON WHICH THE ASSESSEE HAS CONSTRUCTED THE BUILDINGS G, H AND I WAS SHOWN LYING VACANT IN THE ORIGINAL PLAN GOT APPROVA L BY THE KPDL AND ASSESSEE HAD OBTAINED COMMENCEMENT CERTIFI CATE FOR CONSTRUCTION OF THOSE BUILDING FROM THE LOCAL A UTHORITY ON 16.12.1998. THE ASSESSEE HAD SUBMITTED THE BUILDING PLAN TO THE MUNICIPAL AUTHORITY ON 13.11.98 ON WHICH THEY G OT THE COMMENCEMENT CERTIFICATE ISSUED ON 16.12.1998 AND THEREAFTER THE CONSTRUCTION OF THE BUILDING STARTED GOT COMPLETED ON 26.3.2003 AS PER THE COMPLETION CERTIF ICATE. THUS, IN VIEW OF THE AFORECITED DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF VANDANA PROPERTIES VS. DC IT (SUPRA) THE APPROVAL OF THE PLAN SUBMITTED BY KPDL FOR THE CONSTRUCTION OF BUILDINGS B, C, D, E AND F ON 29 TH SEP, 1995 IS NOT GOING TO EFFECT THE BUILDING PLAN CONSISTING BU ILDINGS G, H AND I APPROVED AND COMMENCED BY THE ASSESSEE AS PER THE COMMENCEMENT CERTIFICATE ISSUE ON 16.12.98. IN OTHE R WORDS THE DATE 29.9.95 ON WHICH THE KPDL HAD TAKEN APPROV AL FOR THE CONSTRUCTION OF THE BUILDINGS B, C, D, E AND F CANNOT BE 24 TAKEN AS FIRST DATE OF APPROVAL IN THE CASE OF ASSE SSEE FOR CONSTRUCTION OF THE BUILDINGS G, H AND I ON THE VAC ANT LAND OF THE PROJECT COMMENCED ON 16.12.98 AS PER THE COMMEN CEMENT CERTIFICATE ISSUED BY THE MUNICIPAL AUTHORITY ON TH E BUILDING PLAN SUBMITTED BY THE ASSESSEE ON 13.11.98, TO DENY THE CLAIMED DEDUCTION IN VIEW OF EXPLANATION TO SECTION 80 IB (10)(A) OF THE ACT. IN THESE CIRCUMSTANCES, WE DO N OT FIND SUBSTANCE IN THE CONTENTION OF THE LD. DR THAT THE PROJECT WAS NOT DEVELOPED BY THE ASSESSEE BUT BY KPDL. HIS CONT ENTIONS REMAINED THAT AS PER RULE 2.23 OF DEVELOPMENT CONTR OLLED RULES (IN SHORT DC RULES), THE MOMENT LAY OUT IS AP PROVED, DEVELOPMENT STARTS. THUS IN THE PRESENT, CASE AS PE R THE LD. DR DEVELOPMENT OF THE PROJECT STARTED ON 29.9.95 WH EN THE LAY OUT WAS FIRSTLY APPROVED. HE CONTENDED THAT UNDER U /S 80 IB (10) OF THE ACT BOTH DEVELOPMENT AND CONSTRUCTION A RE REQUIRED TO BE SEEN TO COMPUTE THE DATE OF COMMENCEMENT AND COMPLETION OF THE PROJECT. HE SUBMITTED THAT TRANSF ER ONLY SHIFTS THE OWNERSHIP OF THE LAND BUT THE DATE OF COMMENCEMENT OF THE PROJECT ON THE LAND WILL REMAIN THE SAME. LD. DR REFERRED PAGE NO. 2 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE AND SUBMITTED THAT IT IS REV ISED LAY OUT OF THE BUILDING. HE SUBMITTED THAT TO VERIFY THE DA TE OF COMMENCEMENT OF THE PROJECT THE SURVEY WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE. IN THAT SURVEY STATEM ENT OF PARTNER OF THE ASSESSEE FIRM WAS RECORDED AS PER WH ICH THE PROJECT WAS STARTED ON 29.9.95. IN THIS REGARD HE R EFERRED PAGE NO. 3 TO 5 OF THE ASSESSMENT ORDER WHEREIN RELEVANT STATEMENT OF THE PARTNER IN QUESTION ANSWER FORM HAS BEEN REP RODUCED. 8. WE DO NOT FIND SUBSTANCE IN THE ABOVE CONTENTION OF THE LD. DR SINCE ADMITTEDLY IN THE PRESENT CASE THE LAND ON WHICH ASSESSEE HAS CONSTRUCTED BUILDINGS G, H AND I HAS B EEN SHOWN VACANT IN THE LAY OUT PLAN, A COPY WHEREOF HA S BEEN MADE AVAILABLE AT PAGE NO. 2 OF THE PAPER BOOK. THE SAID VACANT LAND WAS TRANSFERRED BY KPDL TO THE ASSESSEE AND ASSESSEE GOT THE BUILDING PLAN TO CONSTRUCT BUILDIN G NOS. G, H AND I APPROVED BY THE LOCAL AUTHORITY ON 16.12.98 A S IT IS EVIDENT FROM THE COMMENCEMENT CERTIFICATE DATED 16. 12.1998 ISSUED BY THE PUNE MUNICIPAL CORPORATION (PMC) COPY MADE AVAILABLE AT PAGE NO. 1 OF THE PAPER BOOK. VIDE EXP LANATION (I) TO SECTION 80 IB (10) (A) IT HAS BEEN MADE CLEAR TH AT FOR COMPUTATION OF THE PRESCRIBED TIME LIMIT THE STARTI NG DATE WILL BE THE FIRST APPROVAL OF THE BUILDING PLAN OF THE H OUSING PROJECT APPROVED BY THE LOCAL AUTHORITY. FOR A READY REFERE NCE THE SAID EXPLANATION (I) IS BEING REPRODUCED HERE UNDER : 'EXPLANATION.-FOR THE PURPOSE OF THIS CLAUSE, (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PR OJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE O N 25 WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY,' 9. THUS IT IS CLEAR FROM THE ABOVE REPRODUCED EXPLANATION THAT 'HOUSING PROJECT' AND 'BUILDING P LAN' OF SUCH HOUSING PROJECT ARE TWO DIFFERENT TERMINOLOGIE S. FOR THE PURPOSE OF COMPUTATION OF THE PRESCRIBED TIME LIMIT FOR COMPLETION OF THE CONSTRUCTION OF THE HOUSING PROJE CT, THE FIRST DATE WOULD BE THE FIRST APPROVAL OF THE BUILDING PL AN WHICH IN THE PRESENT CASE IS 16.12.1998. IN THE CASE OF DCIT VS. ADITYA DEVELOPERS (SUPRA) THE PUNE BENCH HAS OCCASION TO D ELIBERATE ON THE ISSUE. IT HAS BEEN HELD THEREIN THAT THE LAY OUT PLAN IS ONLY CONCEPTUAL AND CONSTRUCTION COMMENCES SUBSEQUE NTLY WHEN THE ASSESSEE SUBMITS THE CONSTRUCTION PLAN WHI CH ARE APPROVED BY THE AUTHORITY THUS IT IS CLEAR THAT APP ROVAL OF BUILDING PLANS BY THE LOCAL AUTHORITY ALONG WITH COMMENCEMENT CERTIFICATE IS THE RELEVANT DATE TO CO MPUTE THE DATE OF COMMENCEMENT OF THE CONSTRUCTION ON THE BUI LDING PLAN. UNDISPUTEDLY, THE FIRST APPROVAL OF THE BUILD ING PLAN FOR BUILDINGS G, H AND I BY THE LOCAL AUTHORITY IN THE CASE OF THE ASSESSEE IS 16.12.98 AS PER THE ABOVE CITED DECISIO NS. WE THEREFORE, HOLD AS SUCH. THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS UPHELD. 9. IN THIS BACKGROUND IT WAS SUBMITTED THAT THE CIT (A) WAS JUSTIFIED IN GRANTING RELIEF TO ASSESSEE WITH REGAR D TO PROFITS FROM KUMAR SANSAR FOR DEDUCTION CLAIMED U/S.80IB(10). T HIS SHOULD BE UPHELD. 10. AFTER GOING THROUGH THE ABOVE SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSING OFFICER HAS DISA LLOWED THE CLAIM OF THE ASSESSEE U/S.80IB(10) OF THE ACT WITH REGARD TO ITS PROJECT KUMAR SANSAR WHICH WAS COMMENCED VIDE COMPLETION CE RTIFICATE DATED 09.06.2006. HE OBSERVED THAT WORD REVISED WAS MENTIONED ON TOP OF THIS COMPLETION CERTIFICATE. THUS IT WAS A REVISED COMPLETION CERTIFICATE FOR ENTIRE PROJECT. HE FURT HER OBSERVED THAT KUMAR SANSAR PROJECT HAD ONLY THREE BUILDINGS G, H & I WHILE COMMENCEMENT CERTIFICATE DATED 09.06.2006 MENTIONED BUILDINGS A TO I, I.E., A, B, C, D & E WERE ALSO SHOWN. THE KUM AR SURAKSHA WAS DEVELOPED BY KUMAR URBAN DEVELOPMENT LTD., WHICH WA S EARLIER KNOWN AS KUMAR HOUSING & LAND DEVELOPMENT CO. ACCO RDING TO ASSESSING OFFICER, IT WAS SAME PROJECT WHICH WAS EX TENDED AND ASSESSEE HAS BIFURCATED THE SAME AS TWO PROJ ECTS. AS 26 DISCUSSED ABOVE, ASSESSEE HAS MADE DETAILED CLARIFI CATION WITH REGARD TO ITS CLAIM AS DISCUSSED ABOVE. THE ASSESS EE VIDE ITS LETTER DATED 26.07.2008 BEFORE THE CIT(A) CLEARLY MENTIONE D THAT ACTUALLY THE ASSESSEE FIRM CAME INTO EXISTENCE VIDE PARTNERS HIP DEED DATED 20.09.2005, I.E, MUCH AFTER THE COMMENCEMENT OF KUM AR SURAKSHA PROJECT BY KUMAR HOUSING & LAND DEVELOPMENT CO. IT WAS THE STAND OF THE ASSESSEE THAT KUMAR SURAKSHA PROJECT C OMMENCED VIDE COMMENCEMENT CERTIFICATE DATED 19.11.2003, THE ASSESSEE FIRM KUMAR BUILDERS CONSORTIUM WAS NOT IN EXISTENCE AT T HAT RELEVANT POINT OF TIME. ACTUALLY THE LAND OF THIS KUMAR SAN SAR PROJECT OF ASSESSEE WAS TRANSFERRED BY KUMAR HOUSING & LAND DE VELOPMENT CO., TO THE ASSESSEE FIRM THROUGH A REGISTERED DEVE LOPMENT AGREEMENT DATED 15.10.2005 AND ASSESSEES FIRM CAME INTO EXISTENCE VIDE PARTNERSHIP DEED DATED 20.09.2005 AN D ASSESSEE FIRM OBTAINED COMMENCEMENT CERTIFICATE DATED 09.06. 2006 FOR BUILDINGS G, H & I WHICH WERE NAMED AS KUMAR SANSAR . THE SAID PROJECT WAS COMPLETED VIDE COMPLETION CERTIFICATE C C NO.720 DATED 23.03.2010. THUS, KUMAR SURAKSHA AND KUMAR SANSAR PROJECTS ARE SEPARATE AND INDEPENDENT PROJECTS HAVING DIFFER ENT COMMENCEMENT AND COMPLETION CERTIFICATES, INDEPENDE NT AMENITIES AND SUPPORT FUNCTIONS, INDEPENDENT APPROACH ROAD AN D BOUNDARIES, BOTH ARE SEPARATED BY 20 MT. WIDE DP ROAD AND BOTH ARE HAVING DIFFERENT HOUSING SOCIETIES. THE KUMAR SANSAR PROJ ECT WAS DEVELOPED BY ASSESSEE FIRM WHICH WAS ALTOGETHER DIF FERENT LEGAL ENTITY THAN KUMAR HOUSING & LAND DEVELOPMENT CO., W HEN KUMAR SURAKSHA WAS STARTED BY KUMAR HOUSING & LAND DEVELO PMENT CO., THE ASSESSEE FIRM WAS NOT EVEN IN EXISTENCE. THE A SSESSEE HAS THUS EXPLAINED THE ABOVE DISTINCTION THROUGH DIFFERENT C OMMENCEMENT CERTIFICATES AND LAY OUTS PLACED IN THE PAPER BOOK WITH REGARD TO BOTH PROJECTS. BOTH THESE PROJECTS FULFILLED ALL THE CONDITIONS OF SECTION 80IB(10) IN ITS OWN SPHERES. LAY OUT PLAN APPROVAL AND BUILDING PLAN APPROVAL ARE TWO DIFFERENT SANCTIONS GIVEN BY CONCERNED COMPETENT AUTHORITIES. INITIALLY LAY OUT APPROVAL WAS TAKEN BY KUMAR HOUSING & LAND DEVELOPMENT CO., WHER EIN PROPOSED G, H & I BUILDINGS WERE ALSO CONCEIVED BUT BUILDING PLAN 27 APPROVED FOR LATER BUILDINGS WAS NOT TAKEN BY KUMAR HOUSING & LAND DEVELOPMENT CO., WHICH IS INDEPENDENT FROM THE FACT THAT DEVELOPMENT CHARGES PAID FOR BOTH PROJECTS ARE DIFF ERENT. THE DEVELOPMENT CHARGES FOR BUILDING PLAN APPROVAL FOR BUILDINGS G, H & I WERE IN THE NAME OF ASSESSEE IN ITS PROJECT KUM AR SANSAR WAS PAID ON 08.06.2006 AND 14.06.2006. THE EARLIER COM PANY, KUMAR HOUSING & LAND DEVELOPMENT CO., HAD PAID THE DEVELO PMENT CHARGES ONLY FOR BUILDINGS A TO E KNOWN AS KUMAR SU RAKSHA AND NOT FOR BUILDING, G, H & I. VIDE SEPARATE DEVELOPM ENT AGREEMENT DATED 15.10.2005, TRANSFER OF LAND TOOK PLACE FROM KHLD TO ASSESSEE FIRM AT A PRICE OF 3.34 CRORES AND AS PER ACCOUNTING PRACTICE, THE EXPENSES APPORTIONABLE TO THAT PORTIO N OF LAND FOR DEVELOPMENT COST ETC., WERE ALSO INCLUDED IN THIS C ONSIDERATION. THIS HAS BEEN APPRECIATED IN PARAS 8 AND9 OF THE AS SESSMENT ORDER. THUS, THE DEVELOPMENT RIGHTS OF THE PORTION OF THE LAND HAS BEEN TRANSFERRED BY DULY REGISTERED DEVELOPMENT AGREEMEN T DATED 15.10.2005 TO KUMAR BUILDERS CONSORTIUM, WHICH IS T HE ASSESSEE FIRM, BY EARLIER COMPANY KUMAR HOUSING & LAND DEVEL OPMENT COMPANY WHICH WAS HOLDING ENTIRE DEVELOPMENT RIGHTS . THUS ASSESSEE FIRM IS DIFFERENT LEGAL ENTITY THAN COMPAN Y KUMAR HOUSING & LAND DEVELOPMENT COMPANY AND TRANSFER OF DEVELOPM ENT RIGHTS HAVE BEEN MADE THROUGH VALID DOCUMENTATION. THOUGH IN ORIGINAL LAY OUT PLAN IN CASE OF KUMAR HOUSING & LAND DEVELO PMENT COMPANY, THE BUILDINGS G, H & I WERE MENTIONED BUT THEY WERE NOT DEVELOPED BY SAID FIRM BUT BY THE ASSESSEE FIRM AFT ER OBTAINING DUE BUILDING PLAN APPROVED FOR BUILDINGS G, H & I AND A SSESSEE HAS PAID DEVELOPMENT CHARGES FOR THE SAME. THERE IS NOTHING ON RECORD TO SUGGEST THAT EARLIER M/S. KUMAR HOUSING & LAND DEVE LOPMENT COMPANY HAS PAID DEVELOPMENT CHARGES WITH REGARD TO BUILDINGS G, H & I OF THIS KUMAR SANSAR PROJECT. KUMAR HOUSING & LAND DEVELOPMENT COMPANY HAS APPROVAL FOR BUILDINGS A, B , C, D & E UNDER THE NAME AS KUMAR SURAKSHA WHEN THE ASSESSEE WAS NOT IN EXISTENCE AT ALL BECAUSE ASSESSEE CAME INTO EXISTEN CE VIDE PARTNERSHIP DEED DATED 20.09.2005 ONLY. MERE MENTI ONING IN COMPLETION CERTIFICATE DATED 09.06.2006 AS REVISED ON TOP BY LOCAL 28 AUTHORITY AND BUILDINGS A TO E SHOWN THEREON DOES N OT IMPLY THAT BUILDINGS G, H & I OF KUMAR SANSAR PROJECT WERE EXT ENSION OF SAME PROJECT EARLIER DEVELOPED BY KUMAR HOUSING & LAND D EVELOPMENT COMPANY. THIS MAY BE THE PROCEDURE ADOPTED BY THE MUNICIPAL CORPORATION FOR SAME SURVEY NUMBERS OR FOR AN AMALG AMATION THAT THEY SHOW THE ENTIRE LAY OUT PLAN INCLUDING EARLIER BUILDINGS VIDE LETTER DATED 20.01.2001. THE ASSESSEE HAS MADE COM PARISON OF THE FACTS OF ITS CASE WITH THE FACTS OF SIMILAR ISSUES WHICH CAME BEFORE ITAT, IN THE CASE OF APOORVA PROPERTIES (SUPRA) AND ALSO IN THE CASE OF SAROJ SALES ORGANISATION (SUPRA), AS DISCUSSED A BOVE. SIMILAR VIEW HAS BEEN TAKEN BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF VANDANA PROPERTIES (SUPRA) AND BY ITAT PUNE BENCH I N THE CASE OF ANKIT ENTERPRISES (SUPRA). THE RATIO OF ABOVE DECI SIONS SUPPORTS THE CLAIM OF THE ASSESSEE THAT KUMAR SANSAR PROJECT DEV ELOPED BY THE ASSESSEE FIRM COMPRISES OF BUILDINGS G, H & I, WHIC H ARE DIFFERENT AND DISTINCT FROM EARLIER PROJECT DEVELOPED BY DIFF ERENT LEGAL ENTITY, I.E., KUMAR HOUSING & LAND DEVELOPMENT COMPANY. TH US, IT IS ABUNDANTLY CLEAR THAT ASSESSEE CAME INTO EXISTENCE ONLY ON 20.09.2005 AND DEVELOPMENT RIGHTS IN THE LAND WAS T RANSFERRED TO IT BY KUMAR HOUSING & LAND DEVELOPMENT COMPANY BY VALI D AGREEMENT. IT CANNOT BE SAID THAT PROJECT DEVELOPE D BY THE ASSESSEE FIRM WAS EXTENSION OF EARLIER PROJECT DEVELOPED BY KUMAR HOUSING & LAND DEVELOPMENT COMPANY. THERE IS A VALID TRANSFE R OF DEVELOPMENT RIGHTS ON A PART OF THE SAID LAND. THE PAYMENT OF DEVELOPMENT CHARGES FOR THE BUILDING FOR THE BUILDI NG APPROVAL WAS MADE AS CC DATED 09.06.2006 FOR BUILDINGS G, H & I WHICH IS INDEPENDENT PROJECT AND ENTITLED FOR DEDUCTION U/S. 80IB(10). THIS VIEW OF THE CIT(A) IS WELL FORTIFIED BY THE DECISIO NS OF THE TRIBUNAL IN THE CASES OF APOORVA PROPERTIES (SUPRA), SAROJ SALE S ORGANISATION (SUPRA), ANKIT ENTERPRISES (SUPRA) AND DECISION OF JURISDICTIONAL HIGH COURT IN VANDANA PROPERTIES (SUPRA), AS DISCUS SED ABOVE. MOREOVER, BOTH PROJECTS ARE INDEPENDENT HAVING INDE PENDENT COMMENCEMENT AND COMPLETION CERTIFICATES, INDEPENDE NT AMENITIES AND SEPARATE FUNCTIONS, INDEPENDENT APPROACH AND BO UNDARIES, BOTH ARE SEPARATED BY 20 MT. DP ROAD, BOTH ARE HAVI NG DIFFERENT 29 HOUSING SOCIETIES AND ARE CARRIED OUT BY DIFFERENT ENTITIES. IN VIEW OF ABOVE, THE CIT(A) WAS JUSTIFIED IN GRANTING THE DEDUCTION U/S.80IB(10) CLAIMED BY THE ASSESSEE. THIS REASONE D FINDING BASED ON FACTS AND LAW NEEDS NO INTERFERENCE FROM OUR SID E. WE UPHOLD THE SAME. 11. AS A RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 20 TH DAY OF MARCH, 2013. SD/- SD/- ( R.K.PANDA ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 20 TH MARCH, 2013 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ACIT, CIRCLE-4, PUNE. 3. THE CIT(A)-II, PUNE. 4. THE CIT-II, PUNE.. 5. THE DR B BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.