M/s. Yash Associates, Pune V. Income-tax Officer,

ITA 940/PUN/2014

• Counselvise Citation: 94024514 RSA 2014
• Duration Of Justice: 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-10-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Assessee Lawyers: NILESH KHANDELWAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.940/PN/2014 (ASSESSMENT YEAR 2010-11) M/S YASH ASSOCIATES, AHINSA APARTMENT, 768/18, DECCAN GYMKHANA, PUNE 411 004. PAN : AAAFY6149E . APPELLANT VS. INCOME TAX OFFICER, WARD 1(1), PUNE. . RESPONDENT ASSESSEE BY : MR. NILESH KHANDELWAL DEPARTMENT BY : MR. A. K. MODI DATE OF HEARING : 28-10-2014 DATE OF PRONOUNCEMENT : 22-01-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE DA TED 29.11.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 25.02.2013 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2010-11. 2. IN THIS APPEAL, ALTHOUGH ASSESSEE HAS RAISED MUL TIPLE GROUNDS OF APPEAL BUT THE SOLITARY DISPUTE RELATES TO THE ACTI ON OF THE INCOME-TAX AUTHORITIES IN DENYING ASSESSEES CLAIM FOR DEDUCTI ON U/S 80-IB(10) OF THE ACT AMOUNTING TO RS.7,98,48,798/-. 3. BRIEFLY PUT, THE RELEVANT FACTS IN ORDER TO APPR ECIATE THE CONTROVERSY CAN BE SUMMARIZED AS FOLLOWS. THE APPELLANT IS A PARTN ERSHIP FIRM, WHICH IS ENGAGED IN THE BUSINESS OF DEVELOPING AND BUILDING OF A HOUSING PROJECT UNDER THE NAME AND STYLE OF M/S RAVI PARK. FOR THE ASS ESSMENT YEAR UNDER ITA NO.940/PN/2014 CONSIDERATION, ASSESSEE FILED A RETURN OF INCOME, W HICH WAS, INTER-ALIA, ACCOMPANIED BY AUDITED BALANCE SHEET AND PROFIT & L OSS ACCOUNT. IN THE PROFIT & LOSS ACCOUNT, ASSESSEE HAD DECLARED PROFIT S DERIVED FROM HOUSING PROJECT AT RS.7,98,48,797/-, WHICH WAS CLAIMED AS E XEMPT IN TERMS OF SECTION 80-IB(10) OF THE ACT. THE CLAIM OF THE ASSESSEE HA S BEEN DENIED BY THE ASSESSING OFFICER PRIMARILY ON THE GROUND THAT THE HOUSING PROJECT OF THE ASSESSEE DOES NOT FULFILL THE CONDITION PRESCRIBED IN CLAUSE (A) OF SECTION 80- IB(10) OF THE ACT. CLAUSE (A) OF SECTION 80-IB(10) OF THE ACT PRESCRIBES THE PERIOD WITHIN WHICH THE CONSTRUCTION OF THE PROJECT HAS TO BE COMPLETED BY THE ASSESSEE. 4. THE PROJECT OF THE ASSESSEE IS AT SURVEY NO.43A/ 1+2+3+4 HADAPSAR, PUNE. IT WAS CLAIMED BY THE ASSESSEE THAT THE PROJ ECT COMMENCED ON 02.08.2006, WHEN IT WAS FIRST APPROVED BY THE LOCA L AUTHORITY I.E. PUNE MUNICIPAL CORPORATION (PMC). THE PROJECT OF THE AS SESSEE COMPRISED OF PHASE-I CONSISTING OF 4 BUILDINGS WITH 154 FLATS AN D PHASE-II CONTAINING 3 BUILDINGS WITH 180 FLATS. THE FINAL COMPLETION CER TIFICATES FOR PHASE-I AND PHASE-II WERE CLAIMED TO HAVE BEEN RECEIVED FROM TH E PMC ON 10.03.2010 AND 30.03.2012 RESPECTIVELY. IN THIS MANNER, ASSES SEE CANVASSED THAT CONSTRUCTION OF THE PROJECT WAS COMPLETE WITHIN THE STIPULATED DATE. NOTABLY, THE CLAIM OF THE ASSESSEE WAS THAT THE PRESCRIBED D ATE OF COMPLETION OF CONSTRUCTION WAS TO BE GOVERNED BY SUB-CLAUSE (III) OF CLAUSE (A) TO SECTION 80- IB(10) OF THE ACT, WHICH PRESCRIBES THAT WHERE A HO USING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE FIR ST DAY OF APRIL, 2005, THE CONSTRUCTION SHALL BE COMPLETED WITHIN FIVE YEARS F ROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY TH E LOCAL AUTHORITY. AS THE BUILDING PLAN OF THE HOUSING PROJECT WAS CLAIMED TO BE FIRST APPROVED BY THE LOCAL AUTHORITY ON 02.08.2006, IN TERMS OF SUB-CLAU SE (III) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT, ASSESSEE CLAIMED THAT THE STIPULATED DATED FOR ITA NO.940/PN/2014 COMPLETION OF CONSTRUCTION OF THE PROJECT WAS 31.03 .2012. SINCE ASSESSEE HAD OBTAINED THE FINAL COMPLETION CERTIFICATES FROM THE PMC FOR BOTH THE PHASES PRIOR TO 31.03.2012, IT WAS CANVASSED THAT THE COND ITION PRESCRIBED IN CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT WAS FULFILLED. 5. THE AFORESAID STAND OF THE ASSESSEE HAS NOT FOUN D FAVOUR EITHER WITH THE ASSESSING OFFICER OR THE CIT(A). THE ASSESSING OFFICER ISSUED COMMISSION U/S 131(1)(D) OF THE ACT TO A GOVERNMENT REGISTERED VALUER, WHO VERIFIED THE DETAILS OF THE PROJECT OF THE ASSESSEE AND SUBMITTED A REPORT TO HIM. ON THE BASIS OF THE REPORT OF THE REGISTERED VALUER, ASSESSING OFFICER HAS FORMULATED HIS OBJECTIONS TO THE STAND OF THE A SSESSEE WHICH ARE AS FOLLOWS. THE ASSESSEE HAD OBTAINED THE BUILDING SA NCTION ON 02.08.2006 WHICH AS PER THE ASSESSING OFFICER IS A REVISED CER TIFICATE AND CANNOT BE CONSIDERED AS THE INITIAL COMMENCEMENT CERTIFICATE. THE ASSESSING OFFICER HAS NOTED THAT IN-FACT M/S RAVI PROMOTERS, HAD GOT THE INITIAL LAYOUT SANCTION FROM THE PMC ON 17.03.2004. M/S RAVI PROMOTERS HAS COMMENCED THE PROJECT WITH CONSTRUCTION OF ROW HOUSES ON A PART O F THE PLOT AND LATER ON THEY DECIDED TO PART AWAY WITH THE BALANCE PROJECT IN TE RMS OF AGREEMENT DATED 03.02.2006 WITH THE ASSESSEE FIRM. THE CLAIM OF TH E ASSESSING OFFICER WAS THAT THE PROJECT BEING DEVELOPED BY THE ASSESSEE FI RM WAS PART OF A PROJECT WHICH WAS INITIALLY COMMENCED BY M/S RAVI PROMOTERS ON 17.03.2004. AFTER THE AGREEMENT DATED 03.02.2006, THE BUILDING SANCTI ON/COMMENCEMENT CERTIFICATE DATED 02.08.2006 OBTAINED BY THE ASSESS EE CANNOT BE SAID TO BE COMMENCEMENT OF AN INDEPENDENT PROJECT AS IT HAS TO BE UNDERSTOOD AS A PROJECT WHICH HAD INITIALLY COMMENCED ON 17.03.2004 , WHEN THE FIRST APPROVAL WAS OBTAINED BY M/S RAVI PROMOTERS. 6. THE SECOND POINT BROUGHT OUT BY THE ASSESSING OF FICER TO SAY THAT THE PROJECT UNDERTAKEN BY THE ASSESSEE FIRM WAS NOT IND EPENDENT OF THE PROJECT ITA NO.940/PN/2014 COMMENCED BY M/S RAVI PROMOTERS ON 17.03.2004, WAS BASED ON THE DEFINITION OF THE WORD PLOT AS PER THE MAHARASHTR A REGIONAL & TOWN PLANNING ACT, 1966 (IN SHORT MRTP ACT). AS PER THE ASSESS ING OFFICER, THE DEFINITION OF THE PLOT AS PER THE MRTP ACT MEANS PORTION OF LAND HELD IN ONE OWNERSHIP AND NUMBERED AND SHOWN AS ONE PLOT IN THE TOWN PLANNING SCHEME. THE ASSESSING OFFICER POINTED OUT THAT IN THE PRESENT C ASE, PLOT IS 30,400 SQ.MTRS. AND IS NOT SUB-DIVIDED INTO TWO FRAGMENTS, I.E. ONE TO M/S RAVI PROMOTERS AND ANOTHER TO M/S YASH ASSOCIATES (I.E. THE ASSESSEE). THEREFORE, ACCORDING TO THE ASSESSING OFFICER, THERE WAS NO LEGAL SUB-DIVIS ION OF PLOT WHEN ASSESSEE ACQUIRED LAND FROM M/S RAVI PROMOTERS VIDE AGREEMEN T DATED 03.02.2006. THE ASSESSING OFFICER NOTED THAT THE SAID SEPARATIO N OF THE PLOT WAS NOT FINAL, AS IT WAS NOT SUB-DIVIDED BY TAKING APPROVALS FROM THE APPROPRIATE AUTHORITY UNDER THE MRPT ACT. THEREFORE, THE ASSESSING OFFIC ER TREATED THE SANCTION OBTAINED BY M/S RAVI PROMOTERS FROM PMC ON 17.03.20 04 AS THE RELEVANT DATE FOR CALCULATING THE COMMENCEMENT OF ASSESSEES PROJ ECT. CONSIDERED IN THIS LIGHT, THE ASSESSING OFFICER HELD THAT THE STIPULAT ED DATE OF COMPLETION OF THE CONSTRUCTION OF THE PROJECT WAS TO BE GOVERNED BY S UB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT AND NOT SUB-CLAUSE (III) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT, AS CONTENDED BY THE ASSESSEE. IN TERMS OF SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT, THE CONSTRUCTION OF THE PROJECT WAS TO BE COMPLETED ON OR BEFORE 31.03.2008 AND SINCE T HE COMPLETION CERTIFICATES FOR PHASE-I AND PHASE-II OF THE PROJECT WERE OBTAIN ED BY THE ASSESSEE SUBSEQUENT TO THE AFORESAID DATE, THE ASSESSING OFF ICER HELD THAT ASSESSEE HAD FAILED TO COMPLY WITH THE CONDITION PRESCRIBED IN CLAUSE (A) TO SECTION 80- IB(10) OF THE ACT. ACCORDINGLY, THE CLAIM OF THE A SSESSEE HAS BEEN DENIED. 7. IN APPEAL BEFORE THE CIT(A), ASSESSEE RAISED VAR IOUS SUBMISSIONS ON POINT OF LAW AS WELL AS ON FACTS. FACTUALLY, ASSES SEE REITERATED ITS STAND THAT THE PROJECT UNDERTAKEN BY IT ON THE LAND ACQUIRED I N TERMS OF THE AGREEMENT ITA NO.940/PN/2014 DATED 03.02.2006 WITH M/S RAVI PROMOTERS, WAS AN IN DEPENDENT PROJECT AND IT COULD NOT BE SAID TO BE EXTENSION OF THE EARLIER PR OJECT, WHICH WAS EXECUTED BY M/S RAVI PROMOTERS AND NOT THE ASSESSEE FIRM. ASSE SSEE POINTED OUT THAT IT HAD OBTAINED A SEPARATE COMMENCEMENT CERTIFICATE FO R DEVELOPMENT OF PROJECT UNDERTAKEN BY IT. IT WAS ALSO POINTED OUT THAT ASS ESSEE CONSTRUCTED THE PROJECT ON A PIECE OF LAND ON WHICH THE ERSTWHILE OWNER M/S RAVI PROMOTERS HAD NOT DONE ANY DEVELOPMENT. THE SUM AND SUBSTANCE OF THE PLEA OF THE ASSESSEE WAS THAT THE DEVELOPMENT OF THE PROJECT IN QUESTION WAS UNDERTAKEN BY A TOTALLY DIFFERENT ENTITY AND IT WAS NOT IN ANY WAY RELATABLE TO THE CONSTRUCTION OF THE PROJECT UNDERTAKEN BY THE ERSTWHILE M/S RAVI PR OMOTERS. IT WAS ALSO ASSERTED BEFORE THE CIT(A), BASED ON A DECISION OF THE TRIBUNAL IN THE CASE OF ACIT VS. OM DEVELOPERS PROJECT HILL SIDE, 2012 (2) TMI-278 (ITAT PUNE) THAT THERE COULD BE TWO HOUSING PROJECTS ON ONE PLOT CON STRUCTED BY TWO DEVELOPERS AND THEREFORE IT WAS THE ASSESSEES PROJECT WHICH H AD TO BE EXAMINED AS TO WHETHER THE CONDITIONS PRESCRIBED IN SECTION 80-IB( 10) OF THE ACT HAVE BEEN FULFILLED OR NOT. ASSESSEE ALSO POINTED OUT THAT T HE DEFINITION OF PLOT IN TERMS OF MRPT ACT IS NOT RELEVANT AND THE FACT THAT THE PLOT OF LAND WAS NOT OFFICIALLY SUB-DIVIDED BETWEEN M/S RAVI PROMOTERS AND M/S YASH ASSOCIATES (I.E. ASSESSEE) WAS ALSO NOT A RELEVANT CONSIDERATION WHI LE EXAMINING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80-IB(10) OF THE ACT . THE PLEAS OF THE ASSESSEE HAVE NOT FOUND FAVOUR WITH THE CIT(A) WHO HAS AFFIRMED THE STAND OF THE ASSESSING OFFICER. AS A CONSEQUENCE, ASSESSEE IS IN APPEAL BEFORE US. 8. BEFORE US, THE LD. REPRESENTATIVE HAS PRIMARILY REITERATED THE POSITION CANVASSED BEFORE THE LOWER AUTHORITIES AND IT HAS B EEN SUBMITTED THAT THE PROJECT UNDERTAKEN BY THE ASSESSEE WAS A DIFFERENT PROJECT THAN THE PROJECT DONE BY M/S RAVI PROMOTERS AND THEREFORE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB(10) OF THE ACT HAS TO BE EXAMINED WITH RESPEC T TO THE PROJECT ENVISAGED BY THE ASSESSEE, GOT SANCTIONED FROM THE PMC AND IT S COMPLETION THEREOF. IT ITA NO.940/PN/2014 WAS ALSO CONTENDED THAT THE APPROVAL OBTAINED BY M/ S RAVI PROMOTERS ON 17.03.2004 WAS OF A LAYOUT PLAN WHICH IS QUITE DIFF ERENT AND DISTINCT FROM THE BUILDING SANCTION OBTAINED BY THE ASSESSEE FOR THE FIRST TIME ON 02.08.2006. APART THEREFROM, ASSESSEE HAS ALSO REFERRED TO THE PAPER BOOK AND THE FACTS EMERGING FROM THE ORDERS OF THE LOWER AUTHORITIES T O POINT OUT THAT THE PROJECT UNDERTAKEN BY THE ASSESSEE WAS QUALITATIVELY DIFFER ENT FROM THAT EXECUTED BY M/S RAVI PROMOTERS. IT WAS ALSO POINTED OUT THAT S O FAR AS THE ROW HOUSES DEVELOPED BY M/S RAVI PROMOTERS ARE CONCERNED, THE SAME WERE SOLD BY THE SAID CONCERN SEPARATELY AND A SEPARATE CO-OPERATIVE SOCIETY HAS ALSO BEEN FORMED. THE PROJECT OF THE ASSESSEE WHICH COMPRISE D OF BUILDINGS A TO G WAS DIVIDED BY A WALL VIS--VIS THE OTHER PROJECT AND T HAT THERE WAS A DIFFERENT CO- OPERATIVE HOUSING SOCIETY FOR THE PROJECT CONSTRUCT ED BY THE ASSESSEE. IT WAS ALSO POINTED OUT THAT THE PROJECT CARRIED OUT BY TH E ASSESSEE WAS HAVING A DIFFERENT LAYOUT AND A DIFFERENT COMPOSITION OF RES IDENTIAL UNITS AND IT COULD NOT BE SAID THAT IT WAS PART OF AN EARLIER PROJECT COMM ENCED BY M/S RAVI PROMOTERS. MOREOVER, THE LD. REPRESENTATIVE POINTE D OUT THAT IN TERMS OF AN AGREEMENT DATED 03.02.2006 ENTERED INTO BY ASSESSEE WITH M/S RAVI PROMOTERS, THE SAID AGREEMENT ENVISAGED SALE OF THE PLOT OF LAND AND NOT THE SALE OF THE PROJECT. IT WAS EXPLAINED THAT AFTER T HE AGREEMENT, ASSESSEE GOT SEPARATE SANCTIONS FOR THE PROJECT UNDER QUESTION V IDE INITIAL COMMENCEMENT CERTIFICATE DATED 02.08.2006 AND THEREFORE THE BUIL DINGS A TO G CONSTRUCTED BY THE ASSESSEE CONSTITUTED AN INDEPENDENT AND A SEPAR ATE PROJECT. THE LD. REPRESENTATIVE ALSO POINTED OUT THAT THE AFORESAID PLEA OF THE ASSESSEE IS JUSTIFIED ON FACTS AS WELL AS THE LEGAL POSITION SU PPORTED BY THE FOLLOWING DECISIONS :- (I) ACIT VS. OM DEVELOPERS PROJECT HILL SIDE, 2012 (2) TMI-278 (ITAT PUNE); (II) ITO VS. M/S KASTURI CONSTRUCTIONS, ITA NO.8512 /MUM/2010 DATED 19.08.2013; (III) M/S KUNDAN REAL ESTATES VS. ITO, 2012 (8) TMI 619 ITAT, PUNE; (IV) CIT VS. VANDANA PROPERTIES, (2013) 353 ITR 36 (BOM); AND, ITA NO.940/PN/2014 (V) ITO VS. A. V. BHAT DEVELOPERS, 145 ITD 305 (PUN E). 9. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE APPEARING FOR THE REVENUE HAS POINTED OUT THAT IN THE PRESENT CAS E, THE PROJECT UNDERTAKEN BY THE ASSESSEE OUGHT TO BE SEEN AS A PART AND PARC EL OF ONE PIECE OF LAND WHICH WAS INITIALLY SOUGHT TO BE DEVELOPED BY M/S R AVI PROMOTERS IN TERMS OF SANCTION OBTAINED FROM THE PMC ON 17.03.2004. IT W AS, THEREFORE, CONTENDED THAT A PORTION OF THE LAND WHICH FORMED PART OF AN EARLIER APPROVED PROJECT CANNOT BE SEGREGATED AND THEREAFTER EXAMINED IN THE LIGHT OF THE CONDITIONS LAID DOWN IN SECTION 80-IB(10) OF THE ACT. THE EMP HASIS OF THE LD. DEPARTMENTAL REPRESENTATIVE WAS THAT IN TERMS OF TH E AGREEMENT DATED 03.02.2006, ASSESSEE ACQUIRED THE DEVELOPMENT RIGHT S IN THE LAND AS THE DEVELOPMENT OF THE PROJECT WAS CONCEIVED BY THE ERS TWHILE M/S RAVI PROMOTERS ON THE ENTIRE LAND AS PER THE ORIGINAL SA NCTION DATED 17.03.2004 OBTAINED FROM THE PMC. AS PER THE LD. CIT-DR, OF-C OURSE, THE SUBSEQUENT DEVELOPMENT AND EXECUTION OF THE PROJECT HAS BEEN U NDERTAKEN BY THE ASSESSEE BUT HAVING REGARD TO THE PROVISIONS OF CLA USE (A) TO SECTION 80-IB(10) OF THE ACT, THE DATE OF COMPLETION OF CONSTRUCTION OF THE PROJECT HAS TO BE RECKONED FROM THE INITIAL DATE OF APPROVAL I.E. 17. 03.2004. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. SECTION 80-IB(10) OF THE ACT ALLOW AN ASSESSEE A DEDUCTION IN RESPECT OF THE PROFITS DERIVED FROM A HOUSING PROJECT WHICH HAS BEEN APPROVED BEFORE 31 .03.2007 SUBJECT TO THE CONDITION PRESCRIBED IN THE VARIOUS CLAUSES THEREOF . BEFORE US, THE DISPUTE ESSENTIALLY REVOLVES AROUND THE CONDITION CONTAINED IN CLAUSE (A) OF SECTION 80- IB(10) OF THE ACT. IN TERMS OF CLAUSE (A), DEDUCTI ON IS AVAILABLE IN RESPECT OF A HOUSING PROJECT, WHOSE DEVELOPMENT AND CONSTRUCTION IS COMMENCED ON OR AFTER 01.10.1998 AND COMPLETED WITHIN THE PERIOD PR ESCRIBED IN SUB-CLAUSES (I), (II) AND (III) THEREIN. IN THE CASE BEFORE US, THE CLAIM OF THE ASSESSEE IS THAT ITS ITA NO.940/PN/2014 HOUSING PROJECT HAS BEEN APPROVED BY PMC ON 02.08.2 006 AND THEREFORE, THE PERIOD ALLOWED FOR COMPLETION OF CONSTRUCTION SHALL BE GOVERNED BY SUB-CLAUSE (III) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT . THUS, AS PER THE ASSESSEE, IT IS ENTITLED TO COMPLETE THE CONSTRUCTION OF THE PRO JECT UPTO 30.03.2012. ON THE CONTRARY, THE CLAIM OF THE ASSESSING OFFICER IS TO THE EFFECT THAT HAVING REGARD TO THE PRESCRIPTION OF EXPLANATION (1) BELOW CLAUSE (A) OF SECTION 80-IB(10) OF THE ACT, THE DATE OF APPROVAL OF THE HOUSING PROJEC T FOR THE PURPOSES OF CLAUSE (A) HAS TO BE WITH REFERENCE TO THE DATE ON WHICH T HE PROJECT WAS FIRST APPROVED BY THE PMC. ACCORDING TO THE REVENUE, IN THE PRESE NT CASE, THE APPROVAL GRANTED BY PMC ON 02.08.2006 WAS A REVISED SANCTION WHEREAS THE ORIGINAL SANCTION IS DATED 17.03.2004 AND THEREFORE HAVING R EGARD TO CLAUSE (A) READ WITH EXPLANATION (1) THEREOF, THE PERIOD ALLOWED FO R COMPLETION OF CONSTRUCTION HAS TO BE GOVERNED BY SUB-CLAUSE (I), AS THE PROJEC T IS FIRST APPROVED BY THE PMC BEFORE 01.04.2004. IN TERMS OF SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80- IB(10) OF THE ACT, CONSTRUCTION OF THE PROJECT IS T O BE COMPLETED BEFORE 31.03.2008 AND IN THIS CASE, THE SAME HAS NOT BEEN SO DONE. IN VIEW OF THE AFORESAID DISCUSSION, THE PERTINENT DISPUTE BEFORE US IS TO ASCERTAIN THE DATE ON WHICH THE HOUSING PROJECT OF THE ASSESSEE IS APPROVED BY THE LOCAL AUTHORITY SO AS TO DETERMINE THE PRESCRIBED DATE OF COMPLETI ON OF CONSTRUCTION I.E. WHETHER THE CONSTRUCTION OF THE PROJECT IS TO BE COMPLETED ON OR BEFORE 31.03.2008 IN TERMS OF SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT, AS CANVASSED BY THE REVENUE OR BY 31.03.2012 O N AN APPLICATION OF SUB- CLAUSE (III) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT, AS CANVASSED BY THE ASSESSEE. IN THIS BACKGROUND, NOW WE MAY PROCEED T O EXAMINE THE FACTUAL MATRIX IN THE PRESENT CASE AND THE APPLICABLE LEGAL POSITION. 11. THE ASSESSEE BEFORE US IS A PARTNERSHIP FIRM WH ICH HAS BEEN FORMED BY WAY OF A PARTNERSHIP DEED DATED 31.01.2006. ON 03. 02.2006, APPELLANT FIRM ENTERED INTO AN AGREEMENT WITH PERSONS OF TUPE FAMI LY AND M/S RAVI ITA NO.940/PN/2014 PROMOTERS FOR ACQUIRING LAND CONTAINED IN SURVEY NO . 43A/1+2+3+4 HADAPSAR, PUNE, ADMEASURING 18500 SQ.MTRS.. THE PROJECT OF T HE ASSESSEE IN QUESTION HAS BEEN EXECUTED ON SUCH PIECE OF LAND. IT TRANSP IRES THAT M/S RAVI PROMOTERS IS PARTNERSHIP FIRM WHICH HAD INITIALLY E NTERED INTO AN AGREEMENT WITH THE TUPE FAMILY FOR DEVELOPMENT OF THE LAND AT SURVEY NO. 43A/1+2+3+4 HADAPSAR, PUNE AND SUCH LAND ADMEASURED 22639 SQ.MT RS. M/S RAVI PROMOTERS OBTAINED A COMMENCEMENT CERTIFICATE FROM PMC ON 17.03.2004 WHICH COMPRISED OF CONSTRUCTION OF FOUR BUILDINGS A, B, C AND D CONSISTING OF 121 ROW HOUSES AND 48 FLATS TOTALLING TO 169 TENEME NTS. M/S RAVI PROMOTERS CONSTRUCTED ONLY 40 ROW HOUSES USING 4112 SQ.MTRS. OF PLOT AREA. SUBSEQUENTLY, THE SAID FIRM, M/S RAVI PROMOTERS DID NOT PROCEED FURTHER AND IN TERMS OF AN AGREEMENT DATED 03.02.2006 ENTERED BETW EEN TUPE FAMILY, M/S RAVI PROMOTERS AND ASSESSEE THE BALANCE OF THE LAND ADMEASURING 18527 SQ.MTRS. WAS ACQUIRED BY THE ASSESSEE. CLAUSES M A ND N OF THE SAID AGREEMENT, WHICH HAVE ALSO BEEN REPRODUCED BY THE C IT(A) IN PARA 4.4.1 OF HIS ORDER ARE RELEVANT, WHICH READ AS UNDER :- M. THE SECOND PARTY HEREIN HAS CONSTRUCTED 40 ROW HOUSES ON THE PART OF THE SAID ENTIRE LAND BY USING THE FSI A DMEASURING ABOUT 2935 SQ. MTRS. AS PER SANCTIONED PLAN VIDE COMMENCEMENT CERT IFICATE NO.454 DATED 07/05/2004 BEARING ROW HOUSE NOS.31 TO 46, 68 TO 83 , 114 TO 121 AND WHICH PORTION OF THE LAND ALONG WITH THE USED FSI APPROX . 2935 SQ. MTRS. IS MORE PARTICULARLY DESCRIBED IN THE SCHEDULE-II WRITTEN H EREUNDER AND HEREINAFTER IS REFERRED AS 'THE SCHEDULE-II PROPERTY'. DUE TO OTHE R BUSINESS OF THE PARTNERS OF THE FIRM OF THE SECOND PARTY AND PRE-CO MMITMENTS IN OTHER DEVELOPMENTS, THE SECOND PARTY HEREIN HAS DECIDED T O DEVELOP THE SAID ENTIRE PROPERTY UP TO THE SCHEDULE-II PROPERTY ONLY AND DI SPOSE OF THE REMAINING PORTION OF THE SAID ENTIRE LAND, WHICH IS MORE PART ICULARLY DESCRIBED IN THE SCHEDULE-ILL WRITTEN HEREUNDER AND HEREINAFTER IS R EFERRED AS THE SAID LAND' AND THE SAID LAND ALONE WITH THE DEVELOPMENT RIGHT THERETO WITH PERMISSION TO USE THE PERMISSIBLE FSI AND BALANCE UNUSED FSI OF T HE SCHEDULE-II PROPERTY FURTHER ALONG WITH UNUSED PERMISSIBLE BALCONY IN CO NSTRUCTION OF SCHEDULE-IL PROPERTY, HEREINAFTER IS REFERRED AS THE SAID PROP ERTY'. THE PARTNERS OF THE SECOND PARTY BY MUTUAL UNDERSTANDING BETWEEN TH EMSELVES IN WRITING DATED 16/11/2005 HAVE DECIDED TO DISPOSE OF THE SAI D PROPERTY AND ACCORDINGLY HAS AUTHORISED THREE PARTNERS OF THE FI RM TO COMPLETE THE TRANSACTION IN ALL RESPECT. N. THE THIRD PARTY/ DEVELOPER HEREIN ARE IN SEARCH THE VACANT LAND FOR DEVELOPMENT BY CONSTRUCTING MULTI STORIED BUILDING THEREON AND RECEIVED INFORMATION THAT, THE ASSIGN OR HEREIN HAS DECIDED TO DISPOSE OF THE ITA NO.940/PN/2014 SAID PROPERTY AND HENCE OFFERED TO HAVE THE SAID PR OPERTY AT RUMP SUM CONSIDERATION OF RS.1,51,00,000/- (RUPEES ONE CRORE FIFTY ONE LACS ONLY) WHICH INCLUDES THE LAND COST AND ASSIGNMENT CONSIDE RATION OF RIGHT, TITLE, INTEREST INCLUDING DEVELOPMENT RIGHTS OF THE SECOND PARTY IN RESPECT OF THE SAID LAND/SAID PROPERTY. THE OFFER OF THE THIRD PARTY HEREIN IS BEING, HIGHEST OFFER AMONGST ALL OFFERS RECEIVED BY THE SE COND PARTY, THE SECOND PARTY AND ITS PARTNERS HAVE MUTUALLY ACCEPTED THE O FFER OF THE THIRD PARTY HEREIN AND ARRIVED AT CONCLUDED CONTRACT.' (EMPHASI S GIVEN) 12. BE THAT AS IT MAY, SUBSEQUENTLY ASSESSEE CLAIMS THAT IT CHANGED THE LAYOUT OF THE PROJECT FOR THE LAND ACQUIRED BY IT A ND IN-FACT IN THE NEW PROJECT UNDERTAKEN BY THE ASSESSEE IT DID NOT CONTAIN ANY R OW HOUSES. NOTABLY, ROW HOUSES WERE PLANNED BY THE ERSTWHILE OWNER OF LAND, M/S RAVI PROMOTERS. THE ASSESSEE CONSTRUCTED 7 BUILDINGS COMPRISING OF 334 FLATS ONLY AND THERE WAS NO ROW HOUSES. THE CHANGED LAYOUT AND THE NEW BUILDING PLAN WAS FIRST APPROVED BY PMC ON 02.08.2006. THE MOOT QUESTION I S AS TO WHETHER THE PROJECT CONSTRUCTED BY THE ASSESSEE CAN BE SAID TO BE A PART AND PARCEL OF THE PROJECT WHICH WAS EARLIER CONCEIVED AND COMMENCED B Y RAVI PROMOTERS VIDE COMMENCEMENT CERTIFICATE DATED 17.03.2004. 13. IN OUR CONSIDERED OPINION, THE STAND OF THE REV ENUE IS QUITE IN- APPROPRIATE. FIRSTLY, IT IS QUITE EVIDENT THAT THE ASSESSEE FIRM WAS INCORPORATED ONLY ON 31.01.2006 AND IT COULD NOT BE SAID THAT TH E ASSESSEE FIRM OBTAINED FIRST SANCTION OF ITS PROJECT ON 17.03.2004, A DATE ANTERIOR TO ITS INCORPORATION. SECONDLY, IT IS ALSO EMERGING FROM THE AGREEMENT DA TED 03.02.2006 ENTERED BY THE ASSESSEE WITH TUPE FAMILY AND RAVI PROMOTERS TH AT ASSESSEE NOT ONLY ACQUIRED THE LAND ALONG WITH THE DEVELOPMENT RIGHTS THERETO BUT ALSO THE USE OF THE PERMISSIBLE FSI AND THE BALANCE OF THE UNUSED F SI BY THE ERSTWHILE SELLER I.E. RAVI PROMOTERS. FACTUALLY SPEAKING, THERE IS NO DENIAL TO THE FACT THAT THE HOUSING PROJECT CONSTRUCTED BY THE ASSESSEE CONSIST ING OF BUILDINGS A TO G COMPRISES OF ONLY FLATS AND IS QUITE DIFFERENT FROM THE PROJECT WHICH WAS CONCEIVED BY THE ERSTWHILE OWNER I.E. M/S RAVI PROM OTERS. FURTHER, IT IS ALSO QUITE CLEAR THAT ASSESSEE HAS UNDERTAKEN DEVELOPMEN T AND CONSTRUCTION OF THE ITA NO.940/PN/2014 HOUSING PROJECT ON A PIECE OF LAND WHICH IS DISTINC T FROM THE LAND ON WHICH THE ERSTWHILE M/S RAVI PROMOTERS COMPLETED CONSTRUCTION OF 40 ROW HOUSES, THOUGH THE ENTIRE PIECE OF LAND ADMEASURING 22639 S Q.MTRS. WAS ONE PLOT. THE OBJECTION OF THE REVENUE THAT 18527 SQ.MTRS. OF PLOT OBTAINED BY THE ASSESSEE WAS NOT FORMALLY SUB-DIVIDED OUT OF THE TO TAL PLOT OF LAND 22639 SQ.MTRS., IS OF NO CONSEQUENCE. THE ASSESSING OFFI CER HAD RELIED UPON THE DEFINITION OF THE PLOT AS PER THE MRTP ACT, 1966 TO SAY THAT THE ENTIRE PIECE OF LAND HAS TO BE SEEN AS ONE PLOT AND THEREFORE ACCOR DING TO THE ASSESSING OFFICER, THE PROJECT UNDERTAKEN BY THE ASSESSEE ON 18527 SQ.MTRS. OF LAND CANNOT CONSTITUTE AN INDEPENDENT PROJECT. IN OUR C ONSIDERED OPINION, THE AFORESAID OBJECTION OF THE ASSESSING OFFICER IS NOT FOUNDED ON ANY OF THE CONDITIONS PRESCRIBED IN CLAUSES (A) TO (F) OF SECT ION 80-IB(10) OF THE ACT. IN- FACT, ONE OF THE POINTS MADE BY THE ASSESSING OFFIC ER IS TO THE EFFECT THAT IN THE ABSENCE OF A LEGAL SUB-DIVISION OF PLOT, THE PROJEC T OF THE ASSESSEE IS TO BE VIEWED AS A PROJECT WITHIN A PROJECT. THIS ARGUMEN T OF THE REVENUE IS QUITE FALLACIOUS IF ONE IS TO TAKE GUIDANCE FROM THE PARI TY OF REASONING LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF VANDAN A PROPERTIES (SUPRA). IN THE CASE BEFORE THE HONBLE HIGH COURT, ASSESSEE HA D CLAIMED DEDUCTION U/S 80-IB(10) OF THE ACT FOR A BUILDING E WHICH WAS C ONSTRUCTED AFTER THE ADVENT OF SECTION 80-IB(10) OF THE ACT. PRIOR TO THAT, BUILD INGS A TO D WERE CONSTRUCTED BEFORE THE ADVENT OF SECTION 80-IB(10) OF THE ACT. THE HONBLE HIGH COURT NOT ONLY APPROVED ASSESSEES STAND THAT BUILDING E CO ULD BE CONSTRUED AS A HOUSING PROJECT INDEPENDENTLY BUT WHILE EXAMINING T HE COMPLIANCE WITH CLAUSE (B) TO SECTION 80-IB(10) OF THE ACT RELATING TO A S IZE OF PLOT OF LAND ON WHICH THE PROJECT STOOD, IT TOOK INTO CONSIDERATION EVEN THE AREA OF LAND WHICH WAS OCCUPIED BY BUILDINGS A TO D. THEREFORE, WE DO NOT FIND WEIGHT IN THE PLEA OF THE REVENUE BASED ON THE DEFINITION OF PLOT OF MRTP ACT, 1966. EVEN IF IT IS TO BE ACCEPTED THAT IT IS A COMMON PLOT AS PER THE MRT P ACT, YET THE ASSESSEE IS NOT DISENTITLED FROM CLAIMING CONSTRUCTION UNDERTAK EN BY IT OF BUILDINGS A TO G ITA NO.940/PN/2014 AS AN INDEPENDENT PROJECT ELIGIBLE FOR SECTION 80-I B(10) OF THE ACT. THEREFORE, WE CONCLUDE BY HOLDING THAT THE APPROVAL OF THE PRO JECT OF THE ASSESSEE FOR THE PURPOSES OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT HAS TO BE RECKONED WITH AS 02.08.2006 I.E. DATE ON WHICH THE IMPUGNED PROJE CT OF THE ASSESSEE WAS FIRST APPROVED BY THE PMC. AS A CONSEQUENCE, THE S TIPULATED DATE FOR COMPLETION OF CONSTRUCTION HAS TO BE GOVERNED BY SU B-CLAUSE (III) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT. HAVING REGARD TO THE SAME, ASSESSEE HAS RIGHTLY CANVASSED THAT IT HAS COMPLIED WITH THE REQ UIREMENT OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT. WE HOLD SO. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D, AS ABOVE. ORDER PRONOUNCED ON 22 ND JANUARY, 2015. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 22 ND JANUARY, 2015. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, PUNE; 4) THE CIT-I, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE