ACIT, Bangalore V. M/s M.D. Realtors Pvt. Ltd., Bangalore

ITA 870/BANG/2011

• Counselvise Citation: 87021114 RSA 2011
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 07-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ETWA MUNDA CITIII
• Assessee Lawyers: NONEWRITTEN SUBMISSIONS
• Keywords: Opportunity of being heard
• Section: 133A; 260A; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE C BENCH, BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI N.V.VASUDEVAN, JUDICIAL MEMBER I.T.A.NOS.870 & 871 (B)/2011 (ASSESSMENT YEARS : 2006-07 & 2007-08) THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-12(1), 14/3, 4 TH FLOOR, RASHTROTHANA BAHAVAN, (OPP: RBI) BANGALORE-560 001 PAN NO.AABCM4213B APPELLANT VS M.D.REALTORS PVT.LTD., NO.150, EMBASSY POINT,1 ST FLOOR, INFANTRY ROAD, BANGALORE-560 001 RESPONDENT AND C.O.NOS.1 & 2/B/2010 (ARISING OUT OF ITA NOS.870 & 871/B/11) (ASSESSMENT YEARS : 2006-07 & 2007-08) M.D.REALTORS PVT.LTD., NO.150, EMBASSY POINT,1 ST FLOOR, INFANTRY ROAD, BANGALORE-560 001 CROSS OBJECTOR VS THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-12(1), 14/3, 4 TH FLOOR, RASHTROTHANA BAHAVAN, (OPP: RBI) BANGALORE-560 001 ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 2 RESPONDENT REVENUE BY : SHRI ETWA MUNDA, CIT-III ASSESSEE BY : NONE(WRITTEN SUBMISSIONS) DATE OF HEARING : 20 -09-2012 DATE OF PRONOUNCEMENT : 28- 09-2012 O R D E R PER BENCH: ITA NO.870(B)/2011 IS AN APPEAL BY THE REVENUE AGAI NST THE ORDER DATED 30-06-2011 OF CIT(A)-III, BANGALORE REL ATING TO ASSESSMENT YEAR 2006-07. ITA NO.871(B)/2011 IS ALS O AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 30-06-201 OF CI T(A)-IIII BANGALORE RELATING TO ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS FILED CROSS OBJECTIONS IN BOTH THE ASSESSMENT YEARS AGAINST THE ORDERS OF CIT(A) AGAINST WHICH THE REVENUE HAS FILE D APPEALS. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN BOTH THE APPEALS ARE IDENTICAL AND THEY READ AS FOLLOWS; 1. THE ORDER OF THE LD. CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE CIT(A) ERRED IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR PROPORTIONATE DEDUCTION U/S 80IB(10) IN RESPECT OF THE UNITS WHICH ARE HAVING BUILT UP AREA OF LESS THAN 1 50SQ.FT AS PROVISIONS OF SEC.80IB(10) DO NOT ALLOW SUCH PROPORTIONATE DEDUCTION. 3. THE CIT(A) ERRED IN RELYING ON THE DECISIONS OF THE ITAT, BANGALORE IN THE CASES OF M/S SJR BUILDERS LTD., AN D M/S ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 3 RAGHAVENDRA CONSTRUCTIONS FOR GRANTING PROPORTIONAT E DEDUCTION U/S 80IB(10) TO THE PORTION ATTRIBUTABLE TO THE UNITS HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT . WITHOUT APPRECIATING THE FACT THAT THE SAID DECISIONS OF IT AT HAVE NOT BEEN ACCEPTED AND THE DEPARTMENTS APPEAL U/S 2 60A ARE PENDING IN THOSE CASES. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE RE VERSED AND THAT OF THE AO MAY BE RESTORED. 3. THE GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTIONS ARE ALSO IDENTICAL IN BOTH THE C.O.S AND THEY READ AS FOLLOWS; 1.THE CIT(A) ERRED IN BOTH IN LAW AND ON THE FACTS OF THE CASE IN HOLDING THAT THE APPELLANT IS NOT ELIGIBLE TO DEDUCTION U/S 80IB OF THE ACT IN RESPECT OF THE WH OLE PROJECT. 2. HE ERRED IN STATING THAT THE STRUCTURAL MODIFIC ATIONS EXCEEDING 1500SQ.FT WERE MADE BEFORE THE SALE OF TH E FLATS AND BEFORE TRANSFERRING THE RIGHTS TO THE BUYERS. 3. HE ALSO ERRED IN REJECTING THE APPELLANTS SUBM ISSIONS THAT THE STRUCTURAL CHANGES WERE MADE BY THE BUYERS OF THE FLATS, AFTER THE PURCHASE FROM THE APPELLANT. 4. THE FACTS AND CIRCUMSTANCES GIVING RISE TO THE APPEALS AND THE CROSS OBJECTIONS ARE AS FOLLOWS; THE ASSESSEE IS A PRIVATE LIMITED COMPANY. IT IS ENCAGED IN THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF FLA TS. THE ASSESSEE DEVELOPED A PROJECT BY NAME EMBASSY HERITAGE AT M ALLESHWARAM, BANGALORE CONSISTING OF 132 FLATS. FOR THE ASSESSM ENT YEAR 2006- 07, THE ASSESSEE HAS FILED RETURN OF INCOME CLAIMIN G DEDUCTION OF RS.15,19,18,325/- IN RESPECT OF PROJECT EMBASSY HE RITAGE. THE RETURN WAS FILED BY THE ASSESSEE ON 04-12-2006. IN ASSESSMENT YEAR ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 4 2007-08, THE ASSESSEE FILED RETURN OF INCOME DECLAR ING A TOTAL INCOME OF RS.38,29,528/- THE SAME WAS CLAIMED EXEMP T U/S 80IB OF THE ACT. THIS PROFIT IS ALSO RELATING TO THE PROJE CT EMBASSY HERITAGE CONSTRUCTED AT MALLESHWARAM. 5. ON 12-06-2007, THERE WAS SURVEY U/S 133A OF THE INCOME TAX ACT, 1961 (THE ACT) CARRIED OUT BY THE REVENUE IN T HE CASE OF THE ASSESSEE. IN THE COURSE OF SURVEY, IT WAS NOTICED T HAT THE ASSESSEE HAD CONSTRUCTED UNITS (FLATS) WHICH WERE OF AN AREA OF MORE THAN 1500SQ.FT. ONE OF THE CONDITIONS FOR ALLOWING DEDUC TION U/S 80IB(10) OF THE ACT IS THAT THE AREA EACH CONSTRUCTED UNIT I N THE PROJECT SHOULD NOT EXCEED MORE THAN 1500SQ.FT. THE FINDING S IN THIS REGARD, WERE THAT THERE WAS SEVERAL DUPLEX HOUSES HAVING TW O FLOORS CONNECTED BY AN INTERNALLY BUILT STAIRCASE. SO ALS O TWO ADJACENT FLATS WERE COMBINED AS ONE FLAT AND THE AREA OF THE COMBINED FLATS EXCEEDED 1500 SQ.FT. THE ASSESSEE TOOK A PLEA THAT THE SAID ALTERATIONS OCCURRED AFTER THE SALE BY THE ASSESSEE FOR WHICH HE IS NOT RESPONSIBLE. ACCORDING TO THE AO, THE ASSESSEE COULD NOT ESTABLISH THAT THESE ALTERATIONS WERE DONE WITHOUT HIS PERMISSION. THE AO HELD THAT THE CHANGES WERE EFFECTED ON THE R EQUEST BY THE CUSTOMERS BEFORE COMPLETION OF THE TRANSACTION OF S ALE. FOR ALL THE ABOVE REASONS, THE AO HELD THAT THE ASSESEEE WAS NO T ENTITLED TO DEDUCTION U/S80IB OF THE ACT FOR BOTH THE ASSESSMEN T YEARS. 6. ON APPEAL BY THE ASSESSEE, THE CIT(A) FOUND THA T THE AREA OF THE FOLLOWING FLATS EXCEEDED MORE THAN 1500 SQ.FT. ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 5 SL.NO APT NO. TYPE AREA NAME OF THE PARTIES 1 172 3 B/R 1332 MR. R.K.KEDIA 2 182 2 B/R 925 MR.R.K.KEDIA 3 281 2 B/R 1446 MR.KRISHNAKANT BASRUR & MR.SANDEEP BASRUR 4 282 3 B/R 1419 MR.KRISHNA K BASRUR & MRS.PADMA KRISHNAKANT BASRUR 5 291 2 B/R 894 MR.KRISHNAKANT BASRUR & MR./SANDEEP KRISHNA BASRUR 6 292 2 B/R 918 MR.KRISHNAKANT BASRUR & PADMAKRISHNAKANT BASRUR 7 493 2 B/R 1236 MR.RAVIKUMAR RAMANAN 8 494 2 B/R 1183 MRS. SASHI RAVIKUMAR 9 363 2 B/R 1221 MRS.SUDARI INDU KUMARI 10 461 2 B/R 1141 MR.JITENDRA VIRWANI 11 483 2 B/R 1170 MR.KUNAL BABU 7. THE CIT(A) ALSO TOOK NOTE OF THE STATEMENTS RE CORDED AT THE TIME OF SURVEY WHEREIN THE DIRECTORS ADMITTED THAT SUCH ALTERATIONS WERE DONE AT THE REQUEST OF THE CUSTOMERS OF THE ASSESSE E BEFORE TRANSFER THE RIGHTS TO BUYERS. THE CIT(A) THEREFORE, HELD T HAT THE PLEA OF THE ASSESSEE THAT THE CUSTOMERS AFTER PURCHASE ALTERED THE STRUCTURE CANNOT BE ACCEPTED. THE CIT(A) HOWEVER, ALLOWED T HE DEDUCTION U/S 80IB IN RESPECT OF PROPORTIONATE INCOME GENERATED B Y SALE OF FLATS WHERE THE AREA DID NOT EXCEED 1500 SQ.FT. THE RELEV ANT FINDINGS OF THE CIT(A) IN THIS REGARD ARE AS FOLLOWS; ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 6 15.3 DURING THE APPELLATE PROCEEDINGS, THE APPEL LANT HAS TAKEN THE ALTERNATIVE PLEA THAT THE EXEMPTION S HOULD BE RESTRICTED IN RESPECT OF THOSE UNITS WHICH HAVE FULFILLED THE CONDITIONS LAID DOWN IN SEC.80IB OF THE ACT. RE LIANCE IS PLACED ON THE JURISDICTIONAL TRIBUNAL DECISION IN T HE CASE OF SJR BUILDERS IN ITA NO.1192/B/2008 DATED 21-08- 2009 OF BANGALORE A BENCH, IN WHICH IT WAS HELD; THE APPEAL BY THE ASSESSEE IS TO BE ALLOWED TO THE EXTENT THAT THE BUILT UP AREA OF THE FLAT IS NOT MO RE HAN 1500 SQ.FT. WHILE CONSIDERING THE BUILT UP ARE A OF 1500 SQ.FT FOR THE PURPOSE OF EXEMPTION U/S 80IB(10), THE MEZZANINE FLOOR AND COMMON AREAS ARE TO BE EXCLUDED. THE AO IS DIRECTED ACCORDINGL Y, IN RESPECT OF THE PENT HOUSES THE BUILT UP AREA OF WHICH IS MORE THAN 1500 SQ.FT, THEY MAY BE EXCLUDED FOR EXEMPTION. FURTHER, RELIANCE IS ALSO PLACED ON THE RECENT JURI SDICTIONAL TRIBUNAL DECISION IN THE CASE OF RAGHAVENDRA CONSTR UCTIONS ITA NO.140/W-7(3)CIT(A)-III/BNG/08-09; THE RESTRICTION FOR DEDUCTION U/S 80IB OF THE IT A CT, 1961 IS TO BE MADE ONLY WITH REFERENCE TO AREA OF T HE FLATS WHOSE BUILT UP AREA IS MORE THAN THE PRESCRIB ED LIMIT OF 1500SQ.FT. IN RESPECT OF THE PENT HOUSES THE BUILT UP AREA OF WHICH IS MORE THAN 1500 SQ.FT., THEY MAY BE EXCLUDED FOR EXEMPTION . 15.4 AFTER DUE PERUSAL OF THE FINDINGS OF THE JURIS DICTIONAL HONBLE ITAT BANGALORE BENCH DECISIONS, I HOLD THAT THE APPELLANT IS ELIGIBLE FOR THE PROPORTIONATE EXEMPTI ON UNDER SECTION 80IB(10) TO THE PORTION ATTRIBUTABLE TO THE UNITS WHICH ARE HAVING BUILT UP AREA LESS THAN 1500 SQ.FT. ACC ORDINGLY, I DIRECT THE AO TO PROPORTIONATELY CALCULATE THE DISA LLOWANCE TO BE MADE U/S 80IB FOR IN PROPORTION TO THE AREA OF T HE FLATS EXCEEDING THE PRESCRIBED LIMITS AND RESTRICT THE DI SALLOWANCE U/S 80IB OF IT ACT, 1961 TO THE SAME. ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 7 8. SIMILAR ORDERS WERE PASSED IN ASSESSMENT YEAR 2 007-08 ALSO. AGGRIEVED BY THE ORDER OF THE CIT(A) IN ALLOWING TH E DEDUCTION U/S 80IB(10) IN RESPECT OF PROPORTIONATE INCOME GENERAT ED BY SALE OF FLATS WHERE THE AREA DID NOT EXCEED 1500 SQ.FT., TH E REVENUE HAS PREFERRED THE APPEALS BEFORE THE TRIBUNAL. AGGRI EVED BY THE ORDER OF THE CIT(A), HOLDING THAT SOME OF THE FLATS IN T HE PROJECT EXCEEDED 1500 SQ.FT OF BUILT UP AREA AND SUCH UNITS ARE NOT ENTITLED TO DEDUCTION U/S 80IB OF THE IT ACT, THE ASSESSEE HAS FILED CROSS OBJECTION. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS. IN OUR VI EW, THE ORDER OF CITA) ALLOWING PROPORTIONATE DEDUCTION TO THE ASSES SEE I.E. TO THE EXTENT OF PROFITS ATTRIBUTABLE TO THE UNITS WHERE T HE BUILT UP AREA IS BELOW 1500 SQ.FT HAS TO BE UPHELD. IN THIS REGARD, WE FIND THAT THE HON'BLE KOLKATTA BENCH OF ITAT IN THE CASE OF BENGA L AMBUJA HOUSING DEVELOPMENT VS. DCIT, ITA NO. 1595/KOL/2005 & 1735/KOL/2005 HAS HELD AS FOLLOWS:- IT IS APPARENT FROM THE PERUSAL OF SECTION 80IB(1 0) THAT THIS SECTION HAS BEEN ENACTED WITH A VIEW TO PROVIDE INC ENTIVE FOR BUSINESSMEN TO UNDERTAKE CONSTRUCTION OF RESIDENTIA L ACCOMMODATION FOR SMALL RESIDENTIAL UNITS AND THE D EDUCTION IS INTENDED TO BE RESTRICTED TO PROFIT DERIVED FROM THE CONSTRUCTION OF SMALLER UNITS AND NOT FROM LARGER R ESIDENTIAL UNITS. THOUGH, THE ASSESSING OFFICER HAS DENIED THE CLAIM OF THE ASSESSEE OBSERVING THAT LARGER UNITS WERE ALSO CONSTRUCTED BY THE ASSESSEE, AT THE SAME TIME, IT IS ALSO A FAC T ON RECORD THAT THE ASSESSEE HAD CLAIMED DEDUCTION ONLY ON ACC OUNT OF SMALLER RESIDENTIAL UNITS WHICH WERE FULFILLING ALL THE CONDITIONS AS CONTAINED IN SECTION 80IB(10) AND THE SAME HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER ALSO. WE HAVE ALSO ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 8 NOTED DOWN THE FACT THAT EVEN THE PROVISION AS LAID DOWN IN SECTION 80IB(10) DOES NOT SPEAK REGARDING SUCH DENI AL OF DEDUCTION IN CASE OF PROFIT FROM A HOUSING COMPLEX CONTAINING BOTH THE SMALLER AND LARGER RESIDENTIAL UNITS AND S INCE THE ASSESSEE HAS ONLY CLAIMED DEDUCTION ON ACCOUNT OF S MALLER QUALIFYING UNITS BY FULFILLING ALL THE CONDITIONS A S LAID DOWN UNDER SECTION 80IB(10), THE DENIAL OF CLAIM BY THE ASSESSEE IS ON ACCOUNT OF RATHER RESTRICTED AND NARROW INTERPRE TATION OF PROVISIONS OF CLAUSE (C) OF SECTION 80IB(10) WHILE COMING TO SUCH CONCLUSION, WE ALSO FIND SUPPORT FROM THE ORDE R OF THE HON'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LT D. (SUPRA) WHEREIN IT WAS HELD THAT PROVISIONS SHOULD BE INTER PRETED LIBERALLY AND SINCE IN THE PRESENT CASE ALSO, THE A SSESSEE BY CLAIMING PRO RATA INCOME ON QUALIFYING UNITS HAS CO MPLIED WITH ALL THE PROVISIONS AS CONTAINED IN THE SAID SE CTION, IN OUR CONSIDERED OPINION, SUCH CLAIM OF THE ASSESSEE WAS RIGHTLY ALLOWED BY LEARNED CIT(A) BY REVERSING THE ORDER OF THE ASSESSING OFFICER. 10. THE ABOVE VIEW OF THE ITAT, KOLKATA HAS BEEN UP HELD BY THE KOLKATA HIGH COURT IN ITS ORDER IN ITA NO. 458 OF 2 006 BY DISMISSING THE APPEAL OF THE DEPARTMENT U/S. 260A OF THE I.T. ACT, 1961. EVEN THE ITAT E BENCH, MUMBAI IN A DECISION IN THE CAS E OF M/S. SAROJ SALES ORGANIZATION VS. ITO IN ITA NO. 4008/MUM/2007 REPORTED IN (2008) 3 DTR (MUM)(TRIB) 494 HAS FOLLOWED THE ORDER OF LEARNED ITAT KOLKATA BENCH IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. THE LD. ITAT, MUMBAI BENCH HAS HELD THAT, IF A HOUSING PROJECT CONSISTS OF CERTAIN RESIDENTIAL UNITS HAVING MAXIMU M BUILT UP AREA EXCEEDING THE PRESCRIBED LIMIT THEN THE SAID RESIDE NTIAL UNITS WILL NOT QUALIFY FOR DEDUCTION U/S. 80IB(10) BUT THE OTHER R ESIDENTIAL UNITS OF THE HOUSING PROJECT FULLY COMPLYING WITH THE CONDIT IONS LAID DOWN IN SECTION 80IB(10) WILL QUALIFY FOR DEDUCTION U/S. 80 IB(10) OF THE I.T. ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 9 ACT, 1961. THE DECISION OF THE LD. ITAT, KOLKATA & THE LD. ITAT, MUMBAI AND THE JUDGEMENT OF THE KOLKATA HIGH COURT CLEARLY LAY DOWN THE PRINCIPLE THAT THE RESIDENTIAL UNITS OF A HOUSING PROJECT COMPLYING ALL THE CONDITIONS LAID DOWN IN SECTION 8 0-IB (10) WILL BE ELIGIBLE FOR DEDUCTION U/S.80-IB(10) IRRESPECTIVE O F THE FACT THAT CERTAIN RESIDENTIAL UNITS OF THE HOUSING PROJECT HA VE BUILT UP AREA IN EXCESS OF THE MAXIMUM PERMISSIBLE BUILT UP AREA. A PART FROM THE DECISION OF HON'BLE KOLKATA BENCH OF ITAT IN THE CA SE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), THERE ARE SEVERAL DECISIONS OF THE TRIBUNAL TAKING IDENTICAL VIEW. T HOSE DECISIONS ARE AS FOLLOWS :- DCIT VS. BRIGADE ENTERPRISES (PVT.) LTD., 119 TTJ (BANGALORE), 269 (2008) ITO VS. AIR DEVELOPERS, 123 TTJ (NAG) 959/25 DTR 287 ACIT VS. SHETH DEVELOPERS (P) LTD., 33 SOT 277 (M UM) ACIT VS. VAMAN ESTATE, ITA NO. 3016/MUM/2008 11. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT T HERE IS NO MERIT IN THE APPEALS OF THE REVENUE. WE THEREFORE, CONF IRM THE ORDER OF CIT(A) IN THIS REGARD AND DISMISS THE APPEALS BY TH E REVENUE. 12. AS FAR AS THE CROSS OBJECTIONS FILED BY THE AS SESSEE IS CONCERNED, THE PRAYER OF THE ASSESSEE IS THAT THE F OLLOWING EVIDENCES WERE PROVIDED BY IT IN SUPPORT OF ITS SUBMISSION TH AT THE BUILT UP ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 10 AREA OF EACH UNIT WAS LESS THAN 1500 SQ.FT AND THE SAME WERE IGNORED BY THE AO & CIT(A). I) PLAN APPROVED BY THE BBMP II) COPIES OF THE SALE DEEDS III) KATHA CERTIFICATES ISSUED BY BBMP IV) ELECTRICITY CONNECTIONS FOR EACH UNIT AND INSTALLAT ION OF SEPARATE METERS FOR EACH UNIT. V) CERTIFICATES FROM ENGINEERS TO THE EFFECT THAT ALTE RATION APPEARED TO HAVE BEEN EFFECTED RECENTLY. THE ASSESSEE PRAYS THAT THE CROSS OBJECTION HAS TO BE ALLOWED AND THAT AO SHOULD BE DIRECTED TO GRANT THE EXEMPTION A FTER VERIFICATION. THE LEARNED DR RELIED ON THE FINDINGS OF THE SURVEY U/S.133A OF THE ACT AND THE FINDINGS OF THE AO ON THE AREA OF SOME OF THE FLATS IN THE PROJECT EXCEEDINGS THE LIMIT OF 1500 SQ.FT. 13. WE HAVE CONSIDERED THE SUBMISSIONS MADE ON BEH ALF OF THE ASSESSEE. IT IS NO DOUBT TRUE THAT EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF PLAN APPROVAL AND SALE DEEDS AS WELL AS THE ELECTRICITY CONNECTIONS SHOW THE AREA OF INDIVIDUAL UNITS IN TH E PROJECT AS LESS THAN 1500 SQ.FT. HOWEVER, IN THE COURSE OF SURVEY, THE DIRECTORS IN THEIR STATEMENTS HAVE ACCEPTED THAT THE ALTERATIONS HAVE BEEN CARRIED OUT ON REQUEST MADE BY THE CUSTOMERS, PRIOR TO SALE TO THE CUSTOMERS AND THAT THE AREA OF SOME OF THE UNITS AF TER SUCH ALTERATION EXCEEDED 1500 SQ.FT.. THE QUESTION THA T WOULD ARISE FOR CONSIDERATION IS AS TO WHETHER ONE HAS TO GO BY THE DOCUMENTS RELIED UPON BY THE ASSESSEE OR THE REAL STATE OF AF FAIRS AS BROUGHT OUT BY THE AO AND THE CIT(A) IN THEIR ORDERS. IT I S NOT IN DISPUTE ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 11 BEFORE US THAT THE DOCUMENTS REFERRED TO BY THE ASS ESSEEE BEFORE THE AO/CIT(A) WERE NOT CONSIDERED BY THEM. BESIDES THE ABOVE, THERE ARE STATUTORY AMENDMENTS TO THE PROVISIONS OF SEC.8 0-IB(10) OF THE ACT TOUCHING ON THE ISSUE. WE FEEL THAT IT WOULD B E JUST AND PROPER TO DIRECT THE AO TO LOOK INTO THE CLAIM OF THE ASSE SSEE AS RAISED IN THE CROSS OBJECTION AFRESH IN THE LIGHT OF THE OBSE RVATIONS MADE ABOVE. WE THEREFORE, SET ASIDE THE ORDER OF THE CI T(A) IN SO FAR AS IT RELATES TO DISALLOWANCE OF DEDUCTION U/S 80IB OF TH E ACT, IN RESPECT OF UNITS WHERE THE SIZE OF THE UNITS WAS MORE THAN 1500 SQ.FT. THE AO WILL CONSIDER THE AFORESAID DOCUMENT, THE FINDIN GS IN THE SURVEY AFRESH, THE RELEVANT STATUTORY AMENDMENTS AND DECID E THE ISSUE IN ACCORDANCE WITH LAW, AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. FOR STATISTICAL PURPOSES, THE CROS S OBJECTIONS ARE TREATED AS ALLOWED. 14. IN THE RESULT, THE APPEALS FILED BY THE REVENU E ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH DAY OF SEPT., 2012. SD/- SD/- (N. BARATHVAJA SANKAR) (N.V.VASUDEVAN) VICE PRESIDENT JUDICIAL MEMBER PLACE: BANGALORE DATED: 28-09-2012 COPY TO ITA NOS.870 & 871B)/2011 & CO NOS.1 & 2(B)/2012 12 1 THE ASSESSEE 2. THE REVENUE 3. CIT(A)-III, BANGALORE 4. CIT 5. DR 6. GF(BLORE) BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE