ITO 12(1)(1), MUMBAI V. SIDDHIVIYANAK HOMES, MUMBAI

ITA 8726/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8791 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 14-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V KRISHNAMOORTHY
• Assessee Lawyers: REPAL G TRALSHWALA
• Section: 133A; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E BENCH BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND SHRI B.RAMAKOTAIAH (ACCOUNTANT MEMBER) ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITO 12(1)(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. SIDDHIVINAYAK HOMES, GR. FLOOR, 220, TARA MANSION, 11 TH KHETWADI MAIN ROAD, MUMBAI PA NO.AAVFS 8880K (APPELLANT) VS. (RESPONDENT) ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 SIDDHIVINAYAK HOMES, GR. FLOOR, 220, TARA MANSION, 11 TH KHETWADI MAIN ROAD, MUMBAI PA NO.AAVFS 8880K ITO 12(1)(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI (APPELLANT) VS. (RESPONDENT) REVENUE BY : SHRI V.KRISHNAMOORTHY RESPONDENT BY: SHRI REPAL G.TRALSHWALA DATE OF HEARING: 9.8.2012 DATE OF PRONOUNCEMENT: 26.9.2012 ORDER PER B.R.MITTAL, JM: THE DEPARTMENT AS WELL AS ASSESSEE HAVE FILED CROS S APPEALS FOR ASSESSMENT YEARS 2007-08 AND 2008-09 AGAINST ORDERS DATED 20.9 .2010 AND 14.6.2011 OF LD CIT(A), RESPECTIVELY. 2. IN BOTH SET OF APPEALS, GROUNDS TAKEN BY REVENUE AS WELL AS ASSESSEE ARE INTERCONNECTED AND ARE COMMON. HENCE, WE HEARD THE SE APPEALS TOGETHER AND DISPOSED OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 2 3. WE CONSIDER IT PRUDENT TO STATE THE GROUNDS OF A PPEAL TAKEN BY DEPARTMENT AS WELL AS ASSESSEE FOR ASSESSMENT YEAR 2007-08 WHICH ARE AS UNDER: 4. GROUNDS OF APPEAL TAKEN BY DEPARTMENT ARE AS UND ER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT(A) ERRED IN GIVING RELIEF ON PRO-RATA BASIS IN RESPECT OF THE FLATS WHICH DID NOT HAVE BUILT UP AREA EXCEEDING 1000 SQ. FT. AGAINST T HE DISALLOWANCE OF RS.4,95,00,837/- U/S 80 IB(10) OF THE IT ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, AFTER RELYING ON METTUR CHEMICAL & INDUSTRIAL CORPORATION LTD. VS CIT (1996) 217 ITR 768/86 TAXMAN 157(SC) WHEREIN IT HAS BEEN H ELD THAT THERE IS NO SCOPE FOR ALLOWING PARTIAL RELIEF OR SPLITTING U P OF RELIEF, THE LD. CIT(A) ERRED IN ALLOWING THE PARTIAL CLAIM OF THE APPELLAN T. 3. SINCE THERE IS NO PROVISION FOR THE PROPORTIONAT E DEDUCTION U/S 80 IB(10), SO IT WILL BE AGAINST THE INTENTION OF LEGI SLATURE OR ENACTING THIS PROVISION WHICH IS MEANT FOR CONSTRUCTING THE SMALL ER UNITS FOR LOWER MIDDLE CLASS AND WEAKER SECTION OF SOCIETY. 5. GROUNDS OF APPEAL TAKEN BY ASSESSEE ARE AS UNDER : 1. THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE FU LL CLAIM OF DEDUCTION U/S. 80IB( 10) OF THE ACT WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND HENCE, THE DEDUCTION U/S. 801B(10) OF THE ACT ALLOWED PROPORTIONATELY IS WITHOUT ANY JUSTIFIC ATION AND THE ENTIRE CLAIM OF DEDUCTION U/S.8O IB(10) MADE AS PER THE RE TURN OF INCOME AMOUNTING TO RS.4,95,00,837/- MAY BE ALLOWED. 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT HAD CONSTRUCTED AND SOLD SEPARATE AND INDEPENDENT UNITS AND NOT COMBINED UNITS AND THAT SOME OF THE UNITS WERE COMBINED BY T HE PURCHASERS AFTER HANDING OVER THE POSSESSION TO THEM AND HENCE, THE DISALLOWANCE OF DEDUCTION U/S.801B(10) OF THE ACT ON THIS GROUND IS WITHOUT ANY JUSTIFICATION AND LIABLE TO BE DELETED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT( A) FAILED TO APPRECIATE THAT EVEN IF THE BUILT-UP AREA OF COMBINED UNITS WE RE TO BE ADOPTED, THE PROJECTIONS AND BALCONIES COULD NOT BE PART OF THE BUILT-UP AREA AS DEFINED UNDER THE DC RULES SINCE THE DEFINITION OF BUILT-UP AREA WAS INSERTED IN SECTION 801B(10) OF THE ACT ONLY W.E.F. 1/4/2005 AND SINCE THE PROJECT OF THE APPELLANT WAS APPROVED MUCH PRIOR TO 1/4/2005 AND CONSTRUCTION ACTIVITY COMMENCED, THE DEFINITION OF BUILT-UP AREA INSERTED ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 3 W.E.F 1/4/2005 IS NOT APPLICABLE TO THE CASE OF THE APPELLANT AND HENCE, THE DISALLOWANCE MADE U/S.80 IB(10) OF THE ACT IS W ITHOUT ANY JUSTIFICATION AND LIABLE TO BE DELETED. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT( A) FAILED TO APPRECIATE THAT EVEN IF THE DEFINITION OF BUILT-UP AREA INSERT ED IN SECTION 80 IB( 10) OF THE ACT WERE TO BE ADOPTED, IN THAT CASE, AS PER TH E DEFINITION, THE BUILT- UP AREA INCLUDED ONLY THE INNER MEASUREMENT OF THE FLAT AT THE FLOOR LEVEL INCLUDING PROJECTIONS AND BALCONIES AND SINCE THE P ROJECTIONS AND BALCONY IN THE CASE OF THE APPELLANT WAS AT HIGHER LEVELS A ND NOT AT THE FLOOR LEVEL, THE SAID AREA WAS TO BE EXCLUDED WHILE COMPUTING TH E BUILT-UP AREA AND SINCE AFTER EXCLUDING THE SAME, THE BUILT-UP AREA O F THE COMBINED FLATS WERE ALSO WITHIN THE PRESCRIBED LIMIT OF 1000 SQ. F T. AND HENCE, THE ENTIRE CLAIM OF DEDUCTION U/S.80 IB(10) OF THE ACT MAY BE ALLOWED. 6. THE RELEVANT FACTS AS NOTED BY THE AO HAVE BEEN SUMMARIZED BY LD CIT(A) IN PARA 2.1 OF THE IMPUGNED ORDER WHICH READ AS UNDER: 2.1 THE FACTS OF THE CASE AS NOTED B THE AO ARE TH AT THE ASSESSEE IS A BUILDER AND ENGAGED IN CONSTRUCTION ACTIVITY AND DURING THE YEAR HAS COMPLETED ONE PROJECT AT MIRA ROAD, IN THE NAME AND OF STYLE OF S HREEPATI ROYAL COMPLEX HAVING FOUR BUILDINGS NAMELY BUILDING SHREEPATI -1, SHREEPATI -2, SHREEPATI -3 AND SHREEPATI - 4. THE ASSESSEE HAS SHOWN BUSINESS PROFIT FROM THESE PROJECTS AT RS.4,95,00,837/- AND HAS CLAIMED THE ENTIRE AMOUNT AS DEDUCTION U/S 80IB(10). FOR THIS PROJECT, COMMENCEMENT CERTIFICATE AND OCCU PATION CERTIFICATE WERE GIVEN BY MIRA BHAYANDER MUNICIPAL CORPORATION. A SURVEY ACTION U/S 133A OF THE I. T. ACT WAS CONDU CTED ON 29/08/2007 AT THE OFFICE PREMISES OF THE ASSESSEE AT 302, 3RD FLOOR, VARDHAMAN CHAMBERS, CAWASJI PATEL STREET, FORT, MUMBAI-400001 (REGISTERED OFFIC E) AND ALSO AT THE SITE OFFICE AT SHREEPATI, ROYAL COMPLEX SHANTI NAGAR, MIRA ROAD (E), DIST-THANE WHICH IS THE SITE ADDRESS OF THE ASSESSEE FOR HOUSING PROJEC T IN WHICH DEDUCTION U/S 80IB IS CLAIMED. DURING THE SURVEY ACTION, IT WAS FOUND THAT THE ASSESSEE HAD COMBINED 30 NOS. 1-BHK FLATS INTO ONE UNIT. FLATS W ERE EITHER ALLOTTED TO ONE INDIVIDUAL OR TO TWO PERSONS OF THE SAME FAMILY. TH E SURVEY TEAM MEASURED THE AREA OF THE COMBINED FLATS, THE SITE MEASUREMENT TA KEN BY THE SURVEY TEAM ALONG WITH SHRI MAHENDRA KANUNGO, ONE OF THE PARTNE R OF THE FIRM AND THE ARCHITECT SHREE KURMAR PAL KOTHARI REVEALED THAT TH E AREA OF THE FLAT NO. D-201 & 202 IN THE BUILDING SHREEPATI - 4 WHICH HAD BEEN CO MBINED INTO ONE FLAT EXCEEDED 1000 SQ. FT. SIMILARLY, AREA OF THE FLAT N O. 403 AND 404 IN SHREEPTI - 4 WHICH WERE COMBINED INTO ONE UNIT WAS MEASURED AT 1 046 SQ. FT. DURING THE COURSE OF SURVEY ACTION U/S 133A OF THE IT ACT, STA TEMENT OF ONE OF THE PARTNERS SHRI MAHENDRA KANUNGO WAS RECORDED ON 29/08/2007. R ELEVANT PORTIONS OF THE STATEMENT WERE REPRODUCED IN THE ASSESSMENT ORDER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEES REPRESENTATIVE WAS AGAIN CONFRONTED REGARDING THE DISCREPANCIES FOUND DURING THE COURSE OF SURVEY ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 4 PROCEEDINGS IN RESPECT OF ASSESSEES CLAIM OF DEDUC TION U/S 80IB(10). IN RESPONSE TO THE SAME, THE ASSESSEES REPRESENTATIVE VIDE LETTER DATED 08/12/2009 FURNISHED SUBMISSION. THE ASSESSEE SUBMI TTED THAT EVEN IF ONE WERE TO CONSIDER THE CHAJJAS/PROJECTION, ONLY PROJECTION S AT FLOOR LEVEL ARE TO BE CONSIDERED. FURTHER THAT THE PROJECT CAN BE CONSIDE RED AS PART OF BUILT UP AREA ONLY IF THEY ARE HABITABLE AND USABLE AS RESIDENTIA L AREAS. THE AO HELD THAT THE ASSESSEE ITSELF HAS ACCEPTED T OTAL BUILT UP AREA OF THE FLAT NO. D-201&202 COMBINED INTO ONE FLAT INCLUDING THE PROJECTIONS/ELEVATION ADMEASURING AT 1031 SQ. FT. THE PROJECTIONS OF 140. 17 SQ. FT. WHETHER IT IS ATTACHED TO KITCHENS, LIVING ROOMS OR BEDROOMS ARE ALL PART AND PARCEL OF RESIDENTIAL UNIT WHICH THE PURCHASERS ARE SOLELY AR ID EXCLUSIVELY ENJOYING AND THESE ARE NOT A COMMON AREA. THE EXPRESSION OF THE BUILT UP AREA HAS BEEN DEFINE D TO MEAN THE INNER MEASUREMENTS OF THE RESIDENTIAL UNIT AT HE FLOOR LE VEL, INCLUDING THE PROJECTIONS AND BALCONIES AS INCREASED BY THE THICKNESS OF WALL BUT NOT INCLUDING THE COMMON AREAS SHARED WITH THE OTHER RESIDENTIAL UNIT S. IN THE INSTANCE CASE, ABOVE INTERPRETATION CLEARLY SHOWS THAT ALL THE PRO JECTIONS/ELEVATIONS OR CHAJJAS ARE NOTHING BUT ARE EXTENDED CONSTRUCTION THAT ARE ATTACHED TO THE WALLS AND ARE USED EXCLUSIVELY BY THE BUYER AND NOT MEANT FOR GEN ERAL PUBLIC USE WHICH IS COMMONLY TERMED AS COMMON AREA. FURTHER, THE ASSESSEES REPRESENTATIVE REPLIED VIDE LETTER DATED 8/12/2009 THAT EXCEPT FOR BOX PORTION IN BEDROOMS 1 & 2 HAVING CAR PET AREA OF 13.12 SQ. FT. IS SOLD AND THE SAME SHOULD BE CONSIDERED SO THAT THE ASSESSEE CAN AVAIL OF DEDUCTION U/S 80 IB. THIS CONTENTION OF THE ASSESSE E CANNOT BE ACCEPTED AS THE AREA OF 127.05 SQ.FT(140.17 13.12) IS NOT SOLD TO THE BUYERS. THE BOOKING CONFIRMATION/PARTICULARS SHEETS THAT ARE MADE AT TH E TIME OF BOOKING THE FLATS GIVE THE EXACT AREA THAT IS SOLD TO THE BUYERS. T HE BOOKS IMPOUNDED AND INVENTORIED AS PER SR. NO.A-4, A-5, A-6, A-7 CLEARL Y GIVE US THE PICTURE TO THE ACTUAL AREA SOLD, AND THIS INCLUDES ALL PROJECTIONS AND OTHER COMMON AREAS. THE 3REEMENT MADE WILL SHOW ONLY THE CARPET AREA BECAUS E THAT S THE REQUIREMENT OF REGISTRATION AUTHORITIES. THE ASSESSING OFFICER STATED THAT BESIDES RELYING O N THE ISSUE THAT THE CHAJJAS AND PROJECTION HAVE NOT BEEN SOLD, THE ASSESSEE TRI ED TO RELY ON THE DEFINITION OF BUILT UP AREA GIVEN UNDER SECTION 8OIB(14)(A), STAT ING THAT IF THE PROJECTIONS AND CHAJJAS WERE MADE ABOVE THE FLOOR LEVELS THEN THE S AME COULD NOT BE INCLUDED IN BUILT UP AREA, THE ASSESSEE FAILED TO REALIZE THAT THE FLOOR LEVEL MENTIONED IN SECTION 80 IB(14)(A) INDICATED THAT ANY LOFTS, OR C OOKING PLATFORMS MADE IN THE FLATS SHOULD NOT BE CONSIDERED WHILE CALCULATING TH E BUILT UP AREA IN PARA 4.16 OF THE ASSESSEES LETTER DATED 08/12/2009, THE ASSESSE E STOPS RELYING ON DEFINITION OF BUILT UP AREA AS PER SECTION 80 IB(14)(A) AND ST ATES THAT THE DEFINITION PROVIDES BY THE LOCAL AUTHORITY SHOULD BE APPLIED. RELEVANT PARA IS REPRODUCED BELOW: ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 5 WITHOUT PREJUDICE TO ABOVE THE ASSESSEE SUBMITS TH AT SECTION 80IB (14)(A) HAS BEEN INSERTED BY FINANCE (NO.2) ACT, 20 04 W.E.F. 01/04/2005 AND THE SAME DOES NOT APPLY TO THE PROJECT OF THE A SSESSEE. THE PROJECT WAS APPROVED ON 19/07/2003 MUCH BEFORE THE AMENDMEN T WAS CARRIED OUT ARID THEREFORE ONE HAS TO CONSIDER DEFINITION O F BUILT UP AREA AS PER LOCAL AUTHORITY. THE ASSESSEE SUBMITS THAT DEFINITI ON OF BUILT UP AREA AS PER LOCAL AUTHORITY DOES NOT INCLUDE PROJECTION AND THEREFORE THE SIZE OF HE FLAT IS LESS THAN 1000 SQ. FT. HENCE, FOR THIS P ROJECT THE DEFINITION OF BUILT UP AREA WOULD BE AS COMMONLY USED AND UNDERST OOD BY THEBUSINESS AND AS CERTIFIED BY THE ARCHITECTS. THE CERTIFICATE OF THE ARCHITECT M/S AVINASH MHATRE & ASSOCIATES SHOW THAT ALL THE FLATS COMMONLY (TWO SEPARATE ADJOINING FLATS) ARE TREATED AS ONE UNIT, THE BUILT UP LIMIT OF 1000 SQ. FT. IS NOT EXCEEDED ON TOTALING TWO SUCH UNITS AS PER CERTIFICATE OF THE ARCHITECTS. THUS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WANTS TO RELY ON ALL POSSIBLE DEFINITION, EXPLANATIONS, AMENDMENTS JUST TO DEPICT THAT THE PROJECT IT HAS COMPLETED CONFIRMS WITH THE CONDITIONS OF SECTION 8 0IB (10). THESE EXPLANATIONS OF THE ASSESSEE ARE NOT TENABLE AND IT IS CLEAR THA T PROJECTIONS AND CHAJJAS ARE TO BE INCLUDED WHILE CALCULATING THE BUILT UP AREA AND THIS MAKES THE AREA OF ADJOINED FLATS MORE THAN 1000 SQ. FT. HENCE, VIO1AT NG THE PROVISIONS OF SECTION 80 IB(10). THE ASSESSING OFFICER NOTED FROM RECORDS THAT THERE ARE INSTANCES WHERE FOUR FLATS HAVE BEEN ALLOTTED TO ONE PERSON I.E (I) FLAT S E-701, E-702, E-703, E-704 IN SHREEPATI-4 ALLOTTED TO SHRI N. P. SHAH (II) FLAT A-201, A-202, A-203, A204 IN SHREEPATI-4 ALLOTTED TO SHRI JAYWANT VAITY (III) FL AT A-601, A-602, A-603, A-604 IN SHREEPATI -2 ALLOTTED TO MR. RAJENDRA KUMAR JAIN. T HIS ACT CIRCUMVENTS THE PROVISIONS OF SECTION 80 IB. THE ASSESSING OFFICER ALSO NOTED THAT THE C.C (COMP LETION CERTIFICATE) IS ISSUED BY THE MUNCIPAL CORPORATION ONLY WHEN THE PLAN IS A PPROVED PRIOR TO THE COMMENCEMENT OF PROJECT. THOUGH THERE IS A VIOLATI ON/CHANGE IN THE APPROVED PLANS, THE ASSESSEE FIRM HAS NOT INFORMED THE MUNIC IPAL CORPORATION NOR THERE IS ANY EVIDENCE THAT SHOWS THAT ANY INTIMATION OR APPL ICATION HAS BEEN MADE TO THE MUNICIPAL CORPORATION REGARDING CHANGES IN THE ORIG INAL PLAN. THE PARTNER OF ASSESSEE FIRM HAS HIMSELF ADMITTED DURING THE SURVE Y ACTION THAT THEY HAD NOT INFORMED THE MUNICIPAL CORPORATION REGARDING CHANGE S IN ORIGINAL PLAN IN REPLY TO QUESTION NO-31 OF STATEMENT DATED 29/08/2007. THE ASSESSING OFFICER HELD THAT ALL EXPLANATIONS SU BMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING CLEARLY SHOWS T HAT HE ASSESSEE WHILE DEVELOPING THE PROJECTS HAD ONLY ONE ASPECT IN MIND I.E. TO SELL/ALLOT FLATS AS PER THE PREVALENT MARKET NEEDS. AT NO POINT OF TIME THE ASSESEE TRIED TO ADHERE TO THE SPIRIT OF SECTION 80IB I.E. FLATS WERE TO BE MA DE OF CERTAIN AREAS AND ALLOTTED TO DIFFERENT INDIVIDUALS/PERSONS TO SERVE THE SOCIA L OBJECTIVE OF THE SOCIETY WHICH IN TURN WOULD GRANT THE ASSESSEE DEDUCTION UNDER CH APTER VI A. THE MAIN ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 6 INTENTION OF LEGISLATURE FOR ENACTING THIS PROVISIO N IS MEANT TO CONSTRUCT SMALLER UNITS FOR LOWER MIDDLE CLASS AND WEAKER SECTION. THAT TWO AGREEMENTS HAVE BEEN MADE TO AVOID THE PRO VISIONS OF SECTION 80IB(10)(C). THIS IS A HUGE VIOLATION OF THE PROVIS ION AND IT CAN NOT BE SAID THAT IT IS A MISTAKE, BUT IS A DELIBERATE ATTEMPT TO HAVE T HE BENEFITS OF SECTION 80IB (10) BY THE BUILDER/DEVELOPER FOR WHICH HE IS NOT ENTITL ED. THE ASSESSEE HIMSELF IS TRYING TO PICK AND CHOOSE THE PROVISIONS OF THE ACT ONLY TO HAVE THE BENEFITS OF THE PROVISIONS IN THE CASE OF KALIKUMAR SEN (AIR 19 69 A & N 66), IT HAS BEEN HELD THAT WHEN ME BENEFIT IS CONFERRED UNDER AN ACT SUBJECT TO THE PERFORMANCE OF CERTAIN CONDITIONS, AND THE BENEFIT TO BE ENJOYE D AFFECTS THE RIGHTS OF OTHER ADVERSELY, THE CONDITIONS IMPOSED BY LAW MUST BE ST RICTLY ENFORCED. THERE SHOULD NOT BE ONE WAY TRAFFIC I.E. BENEFIT WILL BE ENJOYED WITHOUT THE FULFILLMENT OF THE CONDITIONS ENVISAGED. THE ASSESSEE MADE FURTHER CLAIM THAT IF THE CLAIM O F 100% DEDUCTION U/S 80IB(10) IS NOT PERMISSIBLE THEN PROPORTIONATE DEDU CTION WITH RESPECT TO THE PROFIT RELATING TO THE FLAT WHICH ARE NOT ADJOINED FOR COMMON USE AND SHOPS MAY ALLOWED. THE ASSESSING OFFICER HELD THERE IS NO PRO VISION FOR THE PROPORTIONATE DEDUCTION U/S 80IB (10). IN FACT, IF THE CLAIM OF T HE PROPORTIONATE DEDUCTION IS BEING ACCEPTED THEN IT WILL BE AGAINST THE INTENTIO N OF THE LEGISLATURE OR ENACTING THIS PROVISION WHICH IS MEANT FOR CONSTRUCTING THE SMALLER UNITS FOR LOWER MIDDLE CLASS AND WEAKER SECTION OF SOCIETY. HENCE, THIS AL TERNATELY FOR PROPORTIONATE DEDUCTION U/S 80 IB (10) OF THE ASSESSEE CAN NOT BE ACCEPTED. RELIANCE IS ALSO PLACED IN THE CASE OF METTUR CHEMICAL & INDUSTRIAL CORPORATION LTD. VS. CIT (1966) 217 ITR 768/86 TAXMAN 157(SC) WHEREIN IT HA S BEEN HELD THAT THERE IS NO SCOPE FOR ALLOWING PARTIAL RELIEF OR SPLITTING U P OF RELIEF. THUS DEDUCTION U/S 80IB(10) WAS DENIED TO THE ASSESSEE. 7. BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE LD CIT(A). 8. ON BEHALF OF ASSESSEE, IT WAS CONTENDED BEFORE L D CIT(A) THAT ASSESSEE CONSTRUCTED ALL THE RESIDENTIAL UNITS SEPARATELY AS PER THE APPROVED PLAN AND IN SOME CASES, TWO SEPARATE UNITS WERE EITHER SOLD TO THE SAME PERSON OR TO THE FAMILY MEMBER. IT WAS CONTENDED THAT DURING THE PREVALENT PERIOD, THERE WAS NO RESTRICTION IN SELLING TWO INDIVIDUAL RESIDENTIAL UNITS TO THE SAME PERSON OR TO OTHER FAMILY MEMBER. ASSESSEE SOLD THE RESIDENTIAL UNITS SEPARATELY AND INDEPENDENTLY BY ENTERING INTO TWO SEPARATE AGREEMENTS, WHICH ARE REGISTERED SEPARATELY AND BOT H THE RESIDENTIAL UNITS HAVE BEEN GIVEN SEPARATE ELECTRIC METERS, SEPARATE KITCHENS, SEPARATE MUNICIPAL BILLS, ETC. IT WAS ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 7 CONTENDED THAT THE LOCAL AUTHORITY HAS DULY INSPECT ED AND VERIFIED THE CONSTRUCTED HOUSING UNITS AND THE LOCAL AUTHORITY HAS ISSUED OC CUPATION CERTIFICATE ON COMPLETION OF THE HOUSING PROJECT IN ACCORDANCE WITH THE APPROVED PLAN. IT WAS CONTENDED THAT AS ON DATE OF GRANTING OF THE OCCUPATION CERTIFICATE, THE RESIDENTIAL UNITS WERE SEPARATE AND INDEPENDENT OF EACH OTHER AS PER APPROVED PLAN AND THE POSSESSION OF THE CONSTRUCTED FLAT IS ALSO GIVEN SEPARATELY AND INDEPENDENTLY. I T WAS CONTENDED THAT AFTER THE OCCUPATION CERTIFICATE IS ISSUED AND POSSESSION GIV EN TO THE PURCHASERS OF THE FLATS, THERE IS NO CONTROL OF THE BUILDER UPON SUCH CONSTRUCTED FLATS AND IF THE PURCHASERS MAKE ANY MODIFICATIONS, IT IS BEYOND THE CONTROL OF THE BUIL DER TO RESTRICT SUCH MODIFICATIONS. SINCE THE PURCHASERS MODIFIED THE TWO SEPARATE FLAT S SOLD AFTER THE POSSESSION WAS HANDED OVER, IT IS IRRELEVANT AS TO WHETHER THE MOD IFICATIONS WERE CARRIED OUT BY THE ASSESSEE UPON THEIR REQUEST OR ANY THIRD PARTY BECA USE EVEN IF THE ASSESSEE WOULD HAVE DENIED TO REMOVE THE WALL IN BETWEEN THE TWO FLATS PURCHASED, THE PURCHASERS COULD HAVE DONE THE SAME ON THEIR OWN WITHOUT THE KNOWLED GE OF THE ASSESSEE. IT WAS CONTENDED THAT SURVEY ACTION WAS CARRIED OUT BY THE INCOME TAX DEPARTMENT ON 29-8- 2007, I.E. AFTER 5 MONTHS FROM THE RECEIPT OF THE O CCUPATION CERTIFICATE AND HANDING OVER THE POSSESSION OF THE RESIDENTIAL UNITS TO THE PURC HASERS THEREOF. IT WAS CONTENDED THAT ASSESSEE HAS NOT VIOLATED ANY OF THE CONDITIONS STI PULATED IN SEC. 80IB(10) OF THE ACT MORE PARTICULARLY THE BUILT-UP AREA OF THE RESIDENT IAL UNITS SINCE ASSESSEE HAS CONSTRUCTED SEPARATE AND INDEPENDENT RESIDENTIAL UN ITS OF 1 BHK AND 2 BHK AND SOLD AS IT IS AND THAT NONE OF THE 1 BHK UNITS WERE CONSTRU CTED JOINTLY BY THE ASSESSEE. ASSESSEE FURTHER CONTENDED THAT DEFINITION OF BUILT -UP AREA UNDER SECTION 80IB(14)(A) OF THE BUILT UP AREA WAS INSERTED BY THE FINANCE (NO.2 ) ACT, 2004 W.E.F. 1-4-2005. IT WAS CONTENDED THAT EVEN THE BUILT-UP AREA OF THE COMBIN ED RESIDENTIAL FLATS DID NOT EXCEED ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 8 THE PRESCRIBED LIMIT OF 1,000 SQ.FT. THAT THE PROJE CTIONS AND BALCONIES NEEDS TO BE AT THE FLOOR LEVEL ONLY. THE DEFINITION DOES NOT SAY THAT INNER MEASURE OF RESIDENTIAL UNIT AT FLOOR LEVEL IS TO BE INCREASED BY PROJECTIONS AND B ALCONIES. IT WAS CONTENDED THAT THE PROJECTIONS AND BALCONIES ARE NOT AT THE FLOOR LEVE L OF THE RESIDENTIAL UNIT AND HENCE, THE SAME HAVE TO BE EXCLUDED WHILE COMPUTING THE BUILT UP AREA OF THE RESIDENTIAL UNIT. IT WAS CONTENDED THAT THE BUILT UP AREA OF 127.05 SQ.F T. OUT OF ELEVATION BUILT UP AREA OF 140.17 SQ.FT OUGHT TO HAVE BEEN EXCLUDED FROM COMPU TING THE BUILT-UP AREA OF THE RESIDENTIAL UNIT. THE AREA OF 140.17 SQ.FT. IS NOT SOLD TO THE BUYERS AS PER THE AGREEMENT OF SALE AND IS NOT FORMING PART OF IT. IT WAS CONT ENDED THAT AS PER DEVELOPMENT CONTROL RULES FOR MUMBAI, MINIMUM HEIGHT OF A HABITABLE ARE A HAS TO BE 2.4 METERS, I.E. ABOUT 8 FEET FOR HIGH DENSITY AREA AND 2.5 METERS FOR OTHER AREAS. IT WAS CONTENDED THAT THE AREA I.E. BHAYANDER MUNCIPAL AREA, THE PLACE WHERE THE PROJECT OF THE ASSESSEE IS LOCATED, THE MINIMUM HEIGHT IS 2.75 METERS. IT WAS CONTENDED THAT THE DEFINITION OF BUILT-UP AREA AS PROVIDED IN SECTION 80IB(14)(A) I NSERTED BY FINANCE (NO 2) ACT 2004 W.E.F. 01-04-2005 FOR THE PURPOSE OF SECTION 80IB( 10) OF THE ACT DOES NOT APPLY TO THE PROJECT OF THE ASSESSEE BECAUSE THE HOUSING PROJECT OF HE ASSESSEE WAS APPROVED ON 19-07-2003, I.E. MUCH BEFORE THE AMENDMENT WAS CARR IED OUT AND, THEREFORE, AT THE TIME OF APPROVAL OF THE HOUSING PROJECT AS ALSO THE CONSTRUCTION COMMENCED, THERE WAS NO DEFINITION OF THE BUILT-UP AREA OF THE RESIDENTI AL UNITS. THAT ONE HAS TO CONSIDER THE DEFINITION OF BUILT-UP AREA AS PER LOCAL AUTHORITY. IT WAS CONTENDED THAT AS PER CERTIFICATE OF THE ARCHITECT EVEN IF THE ADJOINING FLATS ARE CO NSIDERED AS ONE UNIT, THE BUILT UP LIMIT OF 1000 SQ.FT. IS NOT EXCEEDED. ASSESSEE PLACED REL IANCE ON THE DECISION OF SPECIAL BENCH OF THE PUNE TRIBUNAL IN BRAHMA ASSOCIATES V/S JCIT (2009) 119 TD 255 (PUNE) (SB). ASSESSEE ALSO STATED THAT THE DEFINITION OF BUILT UP AREA INTRODUCED W.E.F. 1.4.2005 ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 9 AND PRIOR TO THIS INTRODUCTION, THE BUILT UP AREA W OULD NOT INCLUDE PROJECTIONS AND BALCONIES AND PLACED RELIANCE ON THE DECISION OF M UMBAI ITAT IN ACIT V/S SHETH DEVELOPERS (P) LTD (2009) 33 SOT 277 (MUM). IN RES PECT OF THE CONTENTION OF THE ASSESSEE THAT THE SAID AMENDMENT OF INSERTING OF DE FINITION OF BUILT UP AREA WOULD APPLY TO THE PROJECTS AFTER 1.4.2005 AND NOT TO THE PROJE CT APPROVED PRIOR TO THE INSERTION OF SECTION, ASSESSEE PLACED RELIANCE OF ITAT NAGPUR IN THE CASE OF ITO VS. AIR DEVELOPERS, 123 TTJ 959(NAG), THE DECISION OF ITAT MUMBAI IN T HE CASE OF ITO VS. M/S. PATHARE & ASSOCIATES (I.T.A. NO.993/M/2009) FOR ASSESSMENT YE AR 2005-06 DT.17.12.2009 AND DECISION OF ITAT MUMBAI IN THE CASE OF HIRANANDANI AKRUTI JV VS ACIT (I.T.A. NO.5416/M/09) DATED 30.3.2010. 9. WITHOUT PREJUDICE TO ABOVE CONTENTION, IT WAS AL SO SUBMITTED BEFORE LD CIT(A) THAT THE DEDUCTION U/S. 80IB (10) SHOULD BE ALLOWED ON RESIDENTIAL PORTION HAVING BUILT UP AREA OF LESS THAN 1000 SQ. FT PROPORTIONATELY AN D ENTIRE CLAIM CANNOT BE DENIED AND PLACED RELIANCE OF ITAT KOLKATA IN THE CASE OF BENG AL AMBUJA HOUSING DEVELOPMENT VS DCIT (I.T.A. NO.1595/K/2005) DATED 24.3.2006 AND AL SO THE DECISION OF ITAT MUMBAI IN THE CASE OF ACIT VS. SHETH DEVELOPERS (P) LTD(SUPR A) AS WELL AS DECISION IN THE CASE OF AIR DEVELOPERS (SUPRA). 10. LD CIT(A) CONSIDERED ABOVE SUBMISSIONS OF ASSES SEE AS WELL AS THE DECISIONS CITED BEFORE HIM. 11. IN RESPECT OF THE CONTENTION OF ASSESSEE THAT R ESIDENTIAL UNITS TO BE TAKEN INDEPENDENTLY AND NOT COMBINED, LD CIT(A) HELD THAT SURVEY PARTY FOUND ON PHYSICAL INSPECTION OF THE PREMISES THAT ASSESSEE HAD COMBIN ED 30 NOS 1 BHK FLATS INTO ONE UNIT ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 10 EITHER ALLOTTED TO ONE INDIVIDUAL OR TO TWO PERSONS OF THE SAME FAMILY. HE HAS STATED THAT ON MEASUREMENT OF THE COMBINED FLATS ALONGWIT H ONE OF THE PARTNER OF THE FIRM SHRI MAHENDRA KANUNGO AND THE ARCHITECT SHRI KUMAR PAL KOTHARI, IT WAS FOUND THAT THE AREA OF THE FLAT D-201 & 202 IN THE BUILDING SHREE PATI-4 HAD BEEN COMBINED INTO ONE FLAT EXCEEDED 1000 SQ. FT. SIMILARLY, AREA OF THE FLAT NO.403 AND 404 IN SHREEPATI-4 COMBINED INTO ONE UNIT MEASURING AT 1046 SQ.FT. LD CIT(A) HAS STATED THAT TWO SEPARATE UNITS WERE SOLD TO THE SAME PERSON OR TO THE MEMBE RS OF THE SAME FAMILY AND IT HAS BEEN CLAIMED THAT THE WALLS DIVIDING THE TWO FLATS WERE REMOVED BY THE ASSESSEE AT THE INSTANCE OF THE PURCHASERS. LD CIT(A) HAS STATED T HAT THERE IS VIOLATION OF SECTION 80IB(10) OF THE ACT AND IT CANNOT BE SAID THAT IT I S A MISTAKE. LD CIT(A) HAS REFERRED THE BROCHURE(S) OF THE ASSESSEE ISSUED WHICH ITSELF HAS GIVEN THE OPTION TO BUYERS, OF THREE BEDROOMS AFTER COMBINING TWO FLATS INTO ONE AND STA TED THAT IT CLEARLY SHOWS THE INTENTION OF THE ASSESSEE. LD CIT(A) STATED THAT T HE SURVEY TEAM FOUND THE ACTUAL COMBINATION OF FLATS ON ITS VISIT TO THE SITE OF PH YSICAL INSPECTION AND MEASUREMENT. LD CIT(A) HAS ALSO STATED THAT THE COMPLETION CERTIFIC ATE IS ISSUED BY THE MUNICIPAL CORPORATION ONLY WHEN THE PLAN IS APPROVED PRIOR TO THE COMMENCEMENT OF PROJECT. THOUGH THERE IS A VIOLATION/CHANGE IN THE APPROVED PLANS, THE ASSESSEE FIRM HAS NOT INFORMED THE MUNICIPAL CORPORATION NOR THERE IS ANY EVIDENCE THAT SHOWS THAT ANY INTIMATION OR APPLICATION HAS BEEN MADE TO THE MUNI CIPAL CORPORATION REGARDING CHANGES IN THE ORIGINAL PLAN. LD CIT(A) HAS STATED THAT T HE PARTNER OF ASSESSEE FIRM HAS HIMSELF ADMITTED DURING THE SURVEY ACTION THAT THEY HAD NOT INFORMED THE MUNICIPAL CORPORATION REGARDING CHANGES IN ORIGINAL PLAN IN REPLY TO QUES TION NO-31 OF STATEMENT DATED 29/08/2007. CONSIDERING ABOVE FACTS, LD CIT(A) HAS STATED THAT THE CASE OF THE ASSESSEE LACKED CREDIBILITY AND A TRANSACTION LACKING IN CRE DIBILITY BY ITSELF WOULD DESERVE AN ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 11 ADVERSE INFERENCE WITH REFERENCE TO THE PROBABILITI ES OF THE CASE. HE HAS STATED THAT IT IS NOT ENOUGH IF THERE ARE DOCUMENTS EVIDENCING AN APP ARENT SITUATION, IF SUCH DOCUMENTS ARE MADE TO COVER UP WHAT COULD BE INFERRED REASONA BLY AS UNREAL. HE HAS STATED THAT IN THE CASE OF THE ASSESSEE, THE SUBSTANCE OF THE R EAL TRANSACTION IS TO BE SEEN AND THE POSITION WILL HAVE TO BE VIEWED AS PER DIRECT OBSER VATION OF THE SURVEY TEAM THAT THERE WAS ONE COMBINED FLAT BEING SHOWS AS TWO SEPARATE U NITS. 12. LD CIT(A) HAS FURTHER CONSIDERED THE CONTENTION OF THE ASSESSEE IN REGARD TO THE DEFINITION OF BUILT UP AREA THAT INNER MEASUREMENT AT FLOOR LEVEL HAS TO BE TAKEN AND THUS BALCONIES AND PROJECTIONS WHICH ARE NOT AT THE FLOOR LEVEL CANNOT BE TAKEN INTO ACCOUNT. LD CIT(A) HAS STATED THAT THE ASSESSING O FFICER NOTED THAT ASSESSEE ITSELF ACCEPTED TOTAL BUILT UP AREA OF THE FLAT NO.D-201 & 202 COMBINED INTO ONE FLAT INCLUDING THE PROJECTIONS/ELEVATION ADMEASURING AT 1031 SQ. F T. THE PROJECTIONS OF 140.17 SQ. FT WHETHER IT IS ATTACHED TO KITCHENS, LIVING ROOMS OR BEDROOMS ARE ALL PART AND PARCEL OF RESIDENTIAL UNIT WHICH THE PURCHASERS ARE SOLELY AN D EXCLUSIVELY ENJOYING AND THESE ARE NOT A COMMON AREA. LD CIT(A) HAS STATED THAT THE BO OKING CONFIRMATION/PARTICULARS SHEETS THAT ARE MADE AT THE TIME OF BOOKING THE FLA TS GIVE THE EXACT AREA THAT IS SOLD TO THE BUYERS. HE HAS STATED THAT THE BOOKS IMPOUNDE D AND INVENTORIED AS PER SR. NO. A- 4, A-5, A-6, A-7 CLEARLY GIVE THE PICTURE TO THE AC TUAL AREA SOLD, AND THIS INCLUDES ALL PROJECTIONS AND OTHER COMMON AREAS. THE AGREEMENT M ADE WILL SHOW ONLY THE CARPET AREA BECAUSE THAT IS THE REQUIREMENT OF REGISTRATIO N AUTHORITIES. LD CIT(A) HAS STATED THAT EXPRESSION OF THE BUILT UP AREA HAS BEEN DEFIN ED TO MEAN THE INNER MEASUREMENTS OF THE RESIDENTIAL UNIT AT THE FLOOR LEVEL, INCLUDI NG THE PROJECTIONS AND BALCONIES AS INCREASED BY THE THICKNESS OF WALL BUT NOT INCLUDIN G THE COMMON AREAS SHARED WITH THE ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 12 OTHER RESIDENTIAL UNITS. HE HAS STATED THAT ABOVE INTERPRETATION CLEARLY SHOWS THAT ALL THE PROJECTIONS/ELEVATIONS OR CHAJJAS ARE NOTHING B UT ARE EXTENDED CONSTRUCTION THAT ARE ATTACHED TO THE WALLS AND ARE USED EXCLUSIVELY BY T HE BUYER AND NOT MEANT FOR GENERAL PUBLIC USE WHICH IS COMMONLY TERMED AS COMMON AREA. LD CIT(A) HAS STATED THAT THE PROJECTIONS/ELEVATIONS AS PER STATEMENT GIVEN BY TH E ASSESSEE HIMSELF ARE AT LENGTH OF 4 INCHES, 3 INCHES, 5 INCHES AND 7 INCHES ABOVE THE F LOOR LEVEL WHICH IMPLY THAT THE EXTENDED AREA CAN BE UTILIZED AS CARPET AREA. THEY ARE NOT ON SUCH HEIGHTS TO BE UNUSABLE. MERELY BY RAISING THE PROJECTION TO A LEV EL OF A FEW INCHES ABOVE THE FLOOR LEVEL CANNOT BE USED AS A MEANS TO CIRCUMVENT THE PROVISI ONS OF LAW. THUS, LD CIT(A) DID NOT AGREE WITH THE CONTENTION OF ASSESSEE THAT THE PROJ ECTIONS/ELEVATIONS ARE NOT TO BE INCLUDED IN THE EXPRESSION OF BUILT UP AREA AS MENT IONED IN SECTION 80IB(14)(A) OF THE ACT. IT IS RELEVANT TO STATE THAT LD CIT(A) ALSO D ID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE DEFINITION OF BUILT UP AREA, AS I NSERTED BY FINANCE (NO.2) ACT, 2004 W.E.F. 1.4.2005 WILL NOT APPLY AND AS SUCH, THE BUI LT UP AREA NEEDS TO BE CALCULATED AS UNDERSTOOD UNDER THE COMMON PARLANCE I.E. EITHER AS PER THE DEVELOPMENT CONTROL REGULATIONS ACCORDING TO WHICH PROJECTIONS AND BALC ONIES ARE EXCLUDED OR AS PER STAMP DUTY AUTHORITY WHEREBY THE BUILT-UP AREA IS CALCULA TED BY MULTIPLYING CARPET AREA BY 1 .2 TIMES. LD CIT(A) HAS STATED THAT SUB-SECTION (14)( A) OF SECTION 80IB WHICH LAYS DOWN THE MEANING OF BUILT UP AREA WAS INTRODUCED BY TH E FINANCE (NO.2) ACT, 2004 W.E.F. 01-04-2005 IS MERELY AN EXPLANATORY PROVISION TO DE SCRIBE THE MEANING OF BUILT UP AREA. LD CIT(A) HAS STATED THE SAID PROVISION IS EXPLANAT ORY IN NATURE AND IS NOT RELEVANT BECAUSE IT RELATES TO ASSESSMENT YEAR 2005-06 I.E. RELATING TO THE PERIOD BEFORE THE AMENDMENT CAME INTO EFFECT. HE HAS FURTHER STATED THAT OTHER DECISIONS CITED BY THE ASSESSEE ALSO DO NOT RELATES TO THE ISSUES OF BUILT UP AREA BUT RELATES TO THE BUILT UP AREA ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 13 OF SHOPS AND COMMERCIAL ESTABLISHMENTS AS TO WHETH ER IT EXCEEDED 5% OF THE AGGREGATE BUILT UP AREA OF HOUSING PROJECT OR 2000 SQ. FT. HENCE, THE ARGUMENTS MADE BY THE ASSESSEE AND THE RELIANCE PLACED ARE NOT REL EVANT. 13. NOW COMING TO THE FURTHER CONTENTION OF THE ASS ESSEE AS TO WHETHER ASSESSEE CAN CLAIM PRO-RATA DEDUCTION, LD CIT(A) CONSIDERED THE DECISION OF ITAT MUMBAI IN THE CASE OF SHETH DEVELOPERS (SUPRA) AND HELD THAT BENE FIT OF SECTION 80IB(10) COULD BE GIVEN TO A PROJECT EVEN WHERE SOME OF THE UNITS EX CEEDED 1000 SQ. FT OF BUILT UP AREA. HE ALSO CONSIDERED THE DECISION OF ITAT PUNE BENCH IN THE CASE OF BRAHMA ASSOCIATES (SUPRA), DECISION OF NAGPUR BENCH IN THE CASE OF AI R DEVELOPERS (SUPRA) AND ALSO THE DECISION OF ITAT BANGALORE IN THE CASE OF BRIGADE E NTERPRISES, 14 DTR 371(BANG) AND HELD THAT THE RELIEF COULD BE GIVEN TO THE ASSESSEE ON PRO-RATA BASIS WHERE SOME OF THE UNITS EXCEEDED THE AREA LIMIT. ACCORDINGLY, LD CIT (A) HELD THAT ASSESSEE IS ELIGIBLE FOR PRO-RATA BASIS IN RESPECT THE FLATS EXCEEDING 1000 SQ.FT AND DIRECTED THE AO TO RECOMPUTE THE ALLOWANCE OF RELIEF ACCORDINGLY. HEN CE, ASSESSEE AS WELL AS DEPARTMENT ARE IN APPEAL BEFORE THE TRIBUNAL. 14. DURING THE COURSE OF HEARING, LD A.R. FILED A S YNOPSIS AND MADE HIS SUBMISSIONS REITERATING THE SUBMISSIONS MADE BEFORE THE AUTHORI TIES BELOW. LD A.R. SUBMITTED THAT A SURVEY ACTION WAS CONDUCTED ON 29.8.2007 I.E. MUCH AFTER THE OCCUPATION CERTIFICATE WAS RECEIVED. HE SUBMITTED THAT THE PLAN WAS SANCTIONE D ON 19.6.2000 AND COMMENCEMENT CERTIFICATE WAS RECEIVED ON 19.7.2003. LD A.R. CON TENDED THAT ASSESSEE RECEIVED OCCUPATION CERTIFICATE FOR SHREEPATI -1 ON 26.8.200 5 AND SHREEPATI -2 & 3 ON 28.3.2007. HE REITERATED THE FACTS THAT ASSESSEE SOLD INDIVIDU AL UNIT BY SEPARATE AGREEMENT FOR WHICH THERE ARE SEPARATE ELECTRIC METER, SEPARATE M UNICIPAL BILLS ARE RECEIVED. HE ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 14 SUBMITTED THAT PURCHASERS OF THE FLATS AFTER TAKIN G THE POSSESSION OF THE FLAT(S) COMBINED THE FLATS INTO ONE FOR WHICH ASSESSEE HAS NO CONTROL. HE FURTHER SUBMITTED THAT ASSESSEE CONSTRUCTED THE FLATS AS PER PLAN AP PROVED AND THERE IS NO CHANGE IN THE CONSTRUCTION. HE REFERRED PAGES 28 TO 32 OF PB AND PAGES 38-46 OF PB TO SUBSTANTIATE HIS ABOVE SUBMISSIONS. AS REGARDS THE BROACHERS, H E SUBMITTED THAT ASSESSEE STATED ITS PROJECT WAS HAVING FLATS OF 1 BHK & 2 BHK. SINCE SO ME FLAT PURCHASERS WANTED BIGGER FLATS DUE TO VARIOUS REASONS, IT WAS STATED THAT TH EY COULD PURCHASE 2 FLATS OF 1 BHK ADJACENT FLATS AND IF COMBINED, THEY CAN GET BIGGER SPACE. HE FURTHER SUBMITTED THAT ONCE SEPARATE FLATS ARE CONSTRUCTED AS PER APPROVED PLAN AND EVEN IF SAME ARE COMBINED AND USED AS ONE UNIT FOR PURPOSE OF SECTIO N 80IB(10), BOTH THE FLATS ARE SEPARATE AND INDEPENDENT PRIOR TO AMENDMENT MADE BY FINANCE (NO.2) ACT, 2008 W.E.F. 1.4.2010. HE FURTHER SUBMITTED THAT THE BUILT UP A REA OF EACH FLAT IS MUCH BELOW THE PRESCRIBED LIMIT OF 1000 SQ. FT & HENCE DEDUCTION I S TO BE ALLOWED IN ENTIRETY. LD A.R. FURTHER SUBMITTED THAT DEFINITION OF BUILT UP AREA IS INSERTED BY FINANCE (NO.2) ACT, 2004 W.E.F. 1.4.2005 AND THE SAID AMENDMENT CAN BE CONSI DERED AS RETROSPECTIVE AND, ACCORDINGLY WILL NOT APPLY TO THE PROJECTS OF THE A SSESSEE AS THE SAME ARE APPROVED PRIOR TO 1.4.2005. HE SUBMITTED THAT EVEN IF COMBINED FL ATS ARE CONSIDERED, ONCE ELEVATIONS/PROJECTIONS/BALCONIES ARE EXCLUDED, THE BUILT UP AREA OF COMBINED FLATS IS BELOW 1000 SQ. FT. HE SUBMITTED THAT THE ELEVATION S/PROJECTIONS ARE ABOVE FLOOR LEVEL AND, THEREFORE, THEY CANNOT BE INCLUDED IN THE DEFI NITION OF BUILT UP AREA. HE REFERRED PAGES 54 TO 56 AND 65 TO 68 OF PB TO DEMONSTRATE T HAT THE PHOTOGRAPHS TAKEN SHOWS THE LEVEL OF FLATS AND NOT USABLE FOR RESIDENTIAL P URPOSES. HE SUBMITTED THAT DETAILED SUBMISSIONS WERE MADE BEFORE THE AO AS WELL AS BEFO RE LD CIT(A) ON THIS ISSUE AND SAME WAS NOT ACCEPTED BY THEM. LD A.R SUBMITTED TH AT WITHOUT PREJUDICE TO ABOVE AND ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 15 FOR ANY REASONS, THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTED, ORDER OF LD CIT(A) BE SUSTAINED TO ALLOW PRO-RATA RELIEF TO THE ASSESSEE AND REFERRED TO THE DECISION OF ITAT KOLKATA IN THE CASE OF BENGAL AMBUJA HOUSING DEVELO PMENT(SUPRA). HE FURTHER SUBMITTED THAT SAID DECISION OF ITAT KOLKATA HAS BE EN CONFIRMED BY HONBLE HIGH AND REFERRED PAGE 122 TO 124 OF PB-2, WHICH IS A COPY O F THE ORDER OF HONBLE HIGH COURT IN I.T.A. NO.458 OF 2006 DATED 5.1.2007 VIDE WHICH AP PEAL OF THE DEPARTMENT WAS DISMISSED. 15. ON THE OTHER HAND, LD D.R. BESIDES SUPPORTING T HE ORDERS OF LD CIT(A) THAT THE BUILT UP AREA OF SOME OF THE FLATS EXCEEDED 1000 SQ . FT AS PER SUB-SECTION (14)(A) OF SECTION 80IB OF THE ACT, CONTENDED THAT PRO-RATA DE DUCTION AS ALLOWED BY LD CIT(A) IS NOT JUSTIFIED. HE SUBMITTED THAT HYDERABAD ITAT IN THE CASE OF MODI BUILDERS & REALTORS (P) LTD VS. ACIT, 12 TAXMANN.COM 129(HYD) ALSO HELD THAT AFTER THE DEFINITION OF BUILT- UP AREA IN SECTION 80IB(14)(A), THE BUILT UP AREA I NCLUDES BOTH PROJECTIONS AND BALCONIES AS INCREASED BY THE THICKNESS OF WALLS AND DOES NOT INCLUDE COMMON AREA SHARED WITH OTHERS. HE SUBMITTED THAT THERE IS NO AMBIGUITY I N SECTION 80IB(14)(A) OF THE ACT. HE FURTHER SUBMITTED THAT MERELY BY SHOWING THE FLATS SEPARATELY AS PER MUNCIPAL PLAN BUT ON PHYSICAL EXAMINATION AND ON CONSIDERING SURROUND ING CIRCUMSTANCES, THESE ARE ONE UNIT HAVING MORE THAN THE PRESCRIBED AREA OF 1000 S Q. FT, AND THE AO WAS JUSTIFIED TO DISALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE U/S. 80IB OF THE ACT. 16. DURING THE COURSE OF HEARING, A QUERY WAS RAISE D AS TO HOW THE CASE OF HONBLE APEX COURT IN THE CASE OF METTUR CHEMICAL & INDUSTR IAL CORPORATION LTD VS CIT, 217 ITR 768 (SC) AS REFERRED TO IN THE GROUNDS OF APPEAL IS RELEVANT, LD D.R. COULD NOT REPLY ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 16 ANYTHING SAVE AND EXCEPT SUBMITTING THAT LD CIT(A) WAS NOT JUSTIFIED TO ALLOW PRO-RATA DEDUCTION U/S. 80IB OF THE ACT. 17. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTA TIVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE C ASES FILED BY LD A.R. IN PAPER BOOK NO.2 AND HAVE ALSO CONSIDERED THE RELEVANT PAGES OF PB NO.1. 18. THERE IS NO DISPUTE TO THE FACT THAT THE PROJEC T OF THE ASSESSEE WAS APPROVED PRIOR TO 1.4.2005. HOWEVER, THE OCCUPATION CERTIFI CATE WAS RECEIVED AFTER 1.4.2005 BY THE ASSESSEE. ON CONSIDERATION OF THE FACTS AS STA TED BY AUTHORITIES BELOW AND ALSO FOUND DURING THE COURSE OF SURVEY, IT IS NOT IN DIS PUTE THAT ASSESSEE HAS ALLOTTED TWO ADJOINING FLATS EITHER TO SAME PERSON OR TO THE SAM E FAMILY MEMBERS TO ENABLE THEM TO JOIN TOGETHER AND HAVE A BIGGER UNIT. MERELY BECAU SE THE SAID FLATS HAD BEEN SHOWN IN MUNICIPAL PLAN TO BE SEPARATE BUT ON PHYSICAL EXAMI NATION AND CONSIDERING THE SURROUNDING CIRCUMSTANCES, WHEN IT WAS FOUND THAT A DJOINING FLATS WERE MEANT TO BE A SINGLE UNIT, WHICH WAS MORE THAN THE PRESCRIBED LIM IT I.E. 1000 SQ. FT, WE ARE OF THE CONSIDERED VIEW THAT LD CIT(A) HAS RIGHTLY HELD THE M TO A SINGLE UNIT IRRESPECTIVE OF THE FACT THAT THERE ARE SEPARATE SALE AGREEMENTS ENTERE D INTO BY THE ASSESSEE. IT IS NOT IN DISPUTE THAT THE BROACHERS OF THE ASSESSEE ITSELF GAVE THE OPTION TO THE BUYERS TO HAVE 3 BED ROOMS AFTER COMBINING THE FLATS INTO ONE CLEA RLY SHOWS THE INTENTION OF THE ASSESSEE THAT ASSESSEE INTENDED TO CONSTRUCT THE FL AT OF MORE THAN 1000 SQ,. FT I.E. EXCEEDING THE PRESCRIBED LIMIT. AO AS WELL AS LD C IT(A) HAVE CATEGORICALLY STATED THAT THE COMPLETION CERTIFICATE IS ISSUED BY MUNICIPAL C ORPORATION ONLY WHEN THE PLAN IS APPROVED PRIOR TO COMMENCEMENT OF PROJECT. THOUGH, THERE IS VIOLATION/CHANGE IN THE APPROVED PLAN; ASSESSEE FIRM DID NOT INFORM THE MUN ICIPAL CORPORATION NOR THERE IS ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 17 EVIDENCE TO SHOW OR INTIMATION/APPLICATION WAS MADE TO MUNICIPAL CORPORATION REGARDING CHARGES IN THE ORIGINAL PLAN. LD CIT(A) HAS CATEGO RICALLY STATED THAT THE PARTNER OF THE ASSESSEE FIRM HIMSELF ADMITTED DURING THE SURVEY AC TION THAT THEY HAD NOT INFORMED THE MUNICIPAL CORPORATION REGARDING CHANGES IN ORIGINAL PLAN WHILE REPLY TO Q. NO.31 OF STATEMENT MADE DT.29.8.2007. WE CONSIDER IT PRUDEN T TO REPRODUCE QUESTION NOS. 30 AND 31, WHICH HAVE BEEN STATED BY THE AO AT PAGE 2 OF THE ASSESSMENT ORDER, WHICH READ AS UNDER: Q. NO.30- LIKE THAT HOW MAY 1 BHK FLATS HAVE BEEN JOINED TOGETHER, WHERE BUILT UP AREA OF EACH SUCH JOINED NEW FLAT EXCEEDS 1000 S Q. FT. ANS: 30(APPROX) Q. NO.31- WITH REGARD TO VARIATIONS IN THE STRUCTUR ES OF FLATS AS COMPARED TO MUNICIPAL APPROVAL PLANS, HAVE YOU GOT THE APPROVAL OF MUNICIPAL AUTHORITIES? ANS: NO 19. IT IS RELEVANT TO STATE THAT ITAT MUMBAI IN THE CASE OF THISTLE PROPERTIES (P) LTD VS. ACIT, 134 ITD 6(MUM) WHILE CONSIDERING THE ISSU E OF CLAIM OF DEDUCTION U/S.80IB OF THE ACT STATED THAT IF THE ASSESSEE TRIED TO EXPLAI N THROUGH THE MAPS THAT TWO UNITS WERE COMBINED AND BOTH FLATS WERE ONLY ONE UNIT AND PLAN NING WAS RIGHT FROM THE BEGINNING TO HAVE ONE UNIT, IT COULD BE CORROBORATED BY THE F ACT THAT ALL THE 104 UNITS HAD BEEN SOLD IN ADJOINING PAIRS TO 52 FAMILIES AND THE BUYE RS HAVE BEEN SHOWN EITHER SAME PERSON OR HUSBAND AND WIFE. THE TRIBUNAL HELD THAT ASSESSEES CLAIM WAS RIGHTLY DISALLOWED IRRESPECTIVE OF THE FACTS THAT FLATS HAD BEEN SHOWN IN THE MUNICIPAL PLAN SEPARATELY AND THERE WERE SEPARATE AGREEMENTS FOR S ALE OF FLATS. IT IS RELEVANT TO STATE IN THAT CASE IT WAS FOUND THAT ON JOINING TWO FLATS INTO ONE UNIT THE AREA EXCEEDED MORE THAN 1500 SQ. FT. SIMILARLY IN THE CASE BEFORE US, THE AREA OF SOME OF THE FLATS EXCEEDED 1000 SQ. FT AS MENTIONED BY LD CIT(A) IN THE IMPUGN ED ORDER THAT FLAT NO.D-201 & D- ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 18 202 IN THE BUILDING OF SHREEPATI-4 AS ALSO FLAT NOS .403 & 404 IN BUILDING SHREEPATI-4 WHEN COMBINED INTO ONE UNIT, IT HAS EXCEEDED 1000 S Q. FT. CONSIDERING ABOVE FACTS, WE AGREE WITH LD CIT(A) THAT IT IS NOT ENOUGH IF THERE ARE DOCUMENTS EVIDENCING AN APPARENT SITUATION, IF SUCH DOCUMENTS ARE MADE TO COVER UP W HAT COULD BE INFERRED REASONABLY AS UNREAL. THE POSITION WILL HAVE TO BE VIEWED AS PER DIRECT OBSERVATION OF THE SURVEY TEAM AND IT WAS FOUND THAT ONE COMBINED FLAT BEING SHOWS AS TWO SEPARATE UNITS. SO, WE UPHOLD THE FINDINGS OF LD CIT(A) ON THIS ASPECT. 20. NOW COMING TO THE ISSUE AS TO WHETHER BALCONIES AND PROJECTIONS ARE TO BE INCLUDED IN THE BUILT UP AREA, WE OBSERVE THAT LD C IT(A) HAS RIGHTLY STATED THAT WHEN THE PROJECTIONS/ELEVATIONS ARE JUST HAVE 4, 3, 5 AND 7 OF THE FLOOR LEVEL, THEY IMPLIES THAT THERE ARE EXTENDED AREA AND CAN BE UTILIZED AS CARP ET AREA. NOT ONLY THIS, LD CIT(A) HAS ALSO STATED THAT THE BOOKING CONFIRMATION/PARTICULA RS SHEETS THAT ARE MADE AT THE TIME OF BOOKING THE FLATS GIVE THE EXACT AREA THAT IS SOLD TO THE BUYERS AND THE BOOKS IMPOUNDED AND INVENTORIED ALSO GIVE THE PICTURE TO THE ACTUAL AREA SOLD, AND THIS INCLUDES ALL PROJECTIONS AND OTHER COMMON AREAS. T HEREFORE, WE AGREE WITH LD CIT(A) THAT THE SAID EXTENDED AREA OF PROJECTIONS/ELEVATIO NS/BALCONIES ARE TO BE INCLUDED WHILE ADMEASURING ALL THE FLATS AND, ACCORDINGLY, LD CIT( A) HAS RIGHTLY HELD THAT AREA OF SOME OF THE FLATS EXCEEDED THE PRESCRIBED LIMIT OF 1000 SQ. FT. WE ALSO AGREE THAT SUB-SECTION (14)(A) AS INSERTED BY FINANCE (NO.2) ACT, 2004 W.E .F. 1.4.2005 IS ONLY CLARIFICATORY IN NATURE PARTICULARLY THE SAID DEFINITION WILL BE APP LICABLE TO THE ASSESSMENT YEAR UNDER CONSIDERATION AS THE PROJECTS ARE ADMITTEDLY COMPLE TED IN F.Y. 2006-07, AND, THEREFORE, THE CASES CITED BY LD A.R(SUPRA) ARE NOT RELEVANT T O THE FACTS OF THE CASE BEFORE US. ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 19 HENCE, WE HOLD THAT AUTHORITIES BELOW HAVE RIGHTLY HELD THAT ASSESSEE IS NOT ENTITLED FOR DEDUCTION IN RESPECT OF THE FLATS U/S.80IB OF THE A CT. 21. NOW THE QUESTION ARISES AS TO WHETHER DEDUCTION U/S.80IB CAN BE GIVEN ON PRO- RATA BASIS OR NOT. 22. THE ABOVE QUESTION HAS BEEN CONSIDERED BY ITAT KOLKATA BENCH IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT(SUPRA), WHEREIN, IT WAS HELD THAT PROVISIONS OF SECTION 80IB(10) DO NOT PROVIDE FOR DENIAL OF DEDUC TION IF HOUSING COMPLEX CONTAINS BOTH SMALLER AND LARGER RESIDENTIAL UNITS. IT WAS CONCL UDED THAT THE PROFITS ATTRIBUTABLE TO ELIGIBLE RESIDENTIAL UNITS ARE ENTITLED FOR DEDUCTI ON IN SPITE OF THE FACT THAT OTHER RESIDENTIAL UNITS ARE BIGGER IN SIZE THAN THE PRESC RIBED LIMIT. FURTHER, THE SAID DECISION OF ITAT WAS CONSIDERED BY HONBLE KOLKATA HIGH COURT I N APPEAL FILED BY DEPARTMENT BEING I.T.A. NO.458 OF 2006 BY ITS ORDER DATED 5.1.2007. SIMILAR ISSUE IS ALSO COVERED BY THE DECISION OF ITAT BANGALORE IN THE CASE OF BRIGADE ENTERPRISES (SUPRA), WHEREIN, IT HAS BEEN HELD THAT THE RELIEF COULD BE GIVEN TO THE ASS ESSEE ON PRORATA BASIS WHERE SOME OF THE UNITS EXCEEDED THE PRESCRIBED AREA LIMIT. SIMIL AR VIEW HAS BEEN TAKEN BY NAGPUR BENCH OF THE TRIBUNAL IN THE CASE OF AIR DEVELOPERS AND ALSO THE DECISION OF ITAT MUMBAI IN THE CASE OF SHETH PROPERTIES (SUPRA). IN VIEW OF THIS, WE UPHOLD THE ORDER OF LD CIT(A) THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION O N PRO-RATA BASIS IN RESPECT OF THE FLATS NOT EXCEEDING 1000 SQ. FT. 23. HENCE, GROUNDS OF APPEAL TAKEN BY ASSESSEE AS W ELL AS DEPARTMENT FOR ASSESSMENT YEAR 2007-08 ARE REJECTED BY UPHOLDING T HE ORDER OF LD CIT(A). ITA NO. 8726/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5986/MUM/2011: ASSESSMENT YEAR: 2008-09 ITA NO. 7306/MUM/2010: ASSESSMENT YEAR: 2007-08 ITA NO. 5378/MUM/2011: ASSESSMENT YEAR: 2008-09 20 24. AT THE TIME OF HEARING, LD REPRESENTATIVES OF P ARTIES SUBMITTED THAT GROUNDS TAKEN FOR ASSESSMENT YEAR 2008-09 BY ASSESSEE AND D EPARTMENT ARE IDENTICAL TO ASSESSMENT YEAR 2007-08. SINCE WE HAVE CONSIDERED THIS ISSUE IN ASSESSMENT YEAR 2007-08 IN PARAS 6 TO 23 AND FOR THE REASONS MENTI ONED THEREIN, WE UPHOLD THE ORDER OF LD CIT(A) FOR ASSESSMENT YEAR 2008-09 AS WELL BY REJECTING THE GROUNDS OF APPEALS TAKEN BY ASSESSEE AND DEPARTMENT. 25. IN THE RESULT, APPEALS FILED BY DEPARTMENT AND ASSESSEE FOR ASSESSMENT YEARS 2007-08 AND 2008-09 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 26 TH SEPTEMBER, 2012 SD/- (B.RAMAKOTAIAH) ACCOUNTANT MEMBER SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 26 TH SEPTEMBER, 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),23, MUMBAI 4. COMMISSIONER OF INCOME TAX, 12 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH E MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI