M/s. Jindal Mittal Griha Nirman Pvt. Ltd., Pune V. Income-tax Officer,

ITA 981/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7288 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 29-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NIRUPAMA KOTRU
• Section: 143(3); 80IB; 32; 132; 15

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.981/PUN/2015 [ [ / ASSESSMENT YEAR : 2010-11 JINDAL MITTAL GRIHA NIRMAN PVT. LTD., MITTAL HOUSE, 2095, VIJAYNAGAR COLONY, NILAYAM THEATRE, CHOWK, SADASHIV PETH, PUNE 411030. PAN : AABCJ3501F. . / APPELLANT V/S INCOME TAX OFFICER, WARD 11(2), PUNE. . / RESPONDENT . / ITA NO.1015/PUN/2015 [ [ / ASSESSMENT YEAR : 2010-11 DY. COMMISSIONER OF INCOME TAX, CIRCLE 14, PUNE. . / APPELLANT V/S JINDAL MITTAL GRIHA NIRMAN PVT. LTD., MITTAL HOUSE, 2095, VIJAYNAGAR COLONY, NILAYAM THEATRE, CHOWK, SADASHIV PETH, PUNE 411030. PAN : AABCJ3501F. . / RESPONDENT ASSESSEE BY : SHRI VINOD GUPTA REVENUE BY : MRS. NIRUPAMA KOTRU / ORDER PER ANIL CHATURVEDI, AM : 1. THESE CROSS-APPEALS FILED BY ASSESSEE AND REVENUE EMANATE OUT OF ORDER OF COMMISSIONER OF INCOME-TAX (A) 7 DT.21.04.2015 FOR A.Y. 2010-11. / DATE OF HEARING : 01.08.2017 / DATE OF PRONOUNCEMENT: 27.10.2017 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- ASSESSEE IS A COMPANY STATED TO BE IN THE BUSINESS OF BUILDERS AND DEVELOPERS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y 2010-11 ON 18.08.2010 DECLARING TOTAL INCOME OF RS.25,45,330/- THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 30.03.2013 AND THE TOTAL INCOME WAS DETERMINED AT RS.28,09,87,533/- BY INTER-ALIA DENYING THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A), WHO VIDE ORDER DATED 21.04.2015 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE AND REVENUE ARE NOW IN APPEAL BEFORE US. THE GROUNDS RAISED BY THE ASSESSEE IN APPEAL NO.981/PUN/2015 READS AS UNDER: 1. THE LEARNED CIT(A) ERRED IN DISALLOWING DEDUCTION U/S 80IB(10) IN RESPECT OF 10 FIATS IN BUILDING B IN THE HOUSING PROJECT 'SUN ORBIT ON THE GROUND THAT THE BUILT UP AREA OF EACH OF THESE FLATS EXCEEDED 1500 SQ.FT. 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT- A. THE BUILT UP AREA OF THESE FLATS DID NOT EXCEED 1500 SQ.FT. EACH AS PER THE REPORTS GIVEN BY THE APPELLANT. B. THE AREA OF COLUMNS, WINDOW CHHAJJAS, ETC. IN A FLAT COULD NOT BE INCLUDED IN THE BUILT UP AREA OF THE FIATS AND THUS, THE BUILT UP AREA OF EVERY FLAT WAS LESS THAN 1500 SQ.FT. THE LEARNED CIT(A) ERRED IN FOLLOWING THE REPORT OF SHRI NITIN LELE, ENGINEER WHO WAS ENGAGED BY THE DEPT. AND WHO HAD WRONGLY CALCULATED THE BUILT UP AREA OF THE FIATS. 3. THE LEARNED CIT(A) OUGHT TO HAVE ACCEPTED THE APPELLANT'S CONTENTIONS AND SHOULD HAVE ALLOWED DEDUCTION U/S 80IB(10) IN RESPECT OF THE ENTIRE PROJECT 'SUN ORBIT. 3. ON THE OTHER HAND, THE GROUNDS RAISED BY THE REVENUE IN APPEAL NO.1015/PUN/2015 READS AS UNDER: 3 1. W H ET H E R O N TH E F A C T S A ND IN T H E CIRC UM S T A N CES O F T H E CA S E AND IN L AW, TH E L EA RN E D COMMISSION E R OF IN C OM E T AX (APP EA LS) E RR E D IN P A RTL Y A LLOWING TH E APPEAL OF TH E A SS E S SEE IGNORING T H E FINDIN G S GI V EN IN TH E ASSESSMENT ORDER WHICH W AS B A SED ON FACTS AND WHI C H WAS ALSO B ASE D ON THE REPORT OF THE GOVT. APPROV E D V A LUER . 2. WH E TH E R O N TH E FACTS AND IN TH E C IRCUMSTANC E S OF TH E CA S E AND IN L AW , TH E L EA RN E D COMMISSION E R OF IN C OM E TAX (APP EA L S ) E RR E D IN HOLDIN G T H AT TH E AS S E SS EE IS E LIGIBLE FOR D E DU C TI O N U/S.801B(10) W I T HOU T A PPR E CI A TIN G TH A T A S P E R PROVISIONS OF S EC TION 80IB(14)( A ) BUIL T UP A REA I S T O BE C AL C UL A T E D T A KING INTO A CCO UN T A LL TH E PROJECT I ONS A ND B A LCONIES AND A S SUCH TH E 10 FLATS IN BUILDIN G B EXCEE DED TH E BUILT UP A R EA OF 1 5 00 SQ . FT ., TH ERE B Y V IOL A TING T H E PR OVI SI O NS OF SECTI O N 8 0IB(10)( C ) OF T H E A CT . 3. WH E TH E R O N TH E FA CT S A ND IN T H E CI R C UMST A N CE S O F T H E CASE A ND IN L AW, T H E L D. CIT(A) E RR E D IN N OT A PPR EC I A TIN G T H A T D E P A R T M E NT H AS N OT AC CE PT E D DEC I S ION OF HON ' BL E M A DR A S HI G H COUR T IN T H E CA S E OF V I SWAS PROMOT E RS PV T. LTD . V S . ACIT ( 2 01 3 ) 2 9 T AX M A NN .C OM 1 9 (M A DR AS ) ALLOWIN G PROPORTIONATE D E DU C TI O N (PRO RAT A B A SIS) U/S. 8 01B(10) A ND SLP HAS B EE N PR E F E RRED. 4. SINCE THE GROUNDS RAISED BY THE ASSESSEE AND REVENUE ARE INTER-CONNECTED, BOTH THE APPEALS ARE CONSIDERED TOGETHER. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON PERUSING THE RETURN OF INCOME AO NOTICED THAT ASSESSEE HAD SHOWN SALES OF RS.57,22,43,845/-, SHOWN NET PROFIT OF RS.23,25,89,760/- AND HAD CLAIMED DEDUCTION OF RS.27,90,33,915/- U/S 80IB(10) OF THE ACT. AO ON FURTHER EXAMINATION OF THE DETAILS NOTICED THAT ASSESSEE HAD CONSTRUCTED PROJECT CALLED SUN ORBIT AT PUNE COMPRISING OF BUILDINGS CALLED AS A, B, C AND D HAVING 149 RESIDENTIAL FLATS AND TWO COMMERCIAL SHOPS. HE NOTICED THAT THE COMMENCEMENT CERTIFICATE DATED 20.03.2007 HAD CLASSIFIED THE PROJECT AS RESIDENTIAL + COMMERCIAL. HE ALSO NOTICED THAT 10 FLATS IN BUILDING B WERE HAVING AREA EXCEEDING 1500 SQ.FT AND THEREBY THE ASSESSEE HAS NOT COMPLIED WITH PROVISIONS OF CLAUSE (D) OF SEC.80IB(10) OF THE ACT (WHICH SPECIFIES THAT THE AREA OF FLAT SHOULD NOT EXCEED 1500 SQ.FT). HE WAS OF THE VIEW THAT RESTRICTION OF AREA OF FLATS APPLIES TO ENTIRE PROJECT IRRESPECTIVE OF THE NUMBER OF QUALIFYING RESIDENTIAL UNITS IN A BUILDING OR NUMBER OF BUILDINGS 4 WITH QUALIFIED RESIDENTIAL UNITS IN A GIVEN PROJECT. HE WAS FURTHER OF THE VIEW THAT UNLESS ALL THE REQUIRED CONDITIONS STIPULATED IN SEC.80IB(10) ARE FULFILLED BY THE ASSESSEE, ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION. HE ACCORDINGLY DENIED THE CLAIM OF DEDUCTION OF RS.27,90,33,915/- U/S 80IB(10) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD CIT(A), WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER: 3.7 I HAVE CONS I DERED THE S UBMI SS I O N M ADE BY TH E A P PE LL A NT AND P ERUSED MATE RI AL O N RECORD . TH E ONLY I SS U E CON T ES T ED RELATES TO THE D I SA L LO W A N CE OF THE CLAIM OF DEDUC TI ON U /S 80 I B(10) A M O U NT I NG TO RS . 27 , 90 . 33 , 9 1 5 /- . TH E FA CT OF THE CASE INDICATE THAT THE APPELLANT COM P ANY WHO A R E BU IL DERS AND DEVE L OPE R S U NDE R TOOK T HE RESIDE N TIAL PRO J EC T AT S . NO. 12/5/ 1 B , 12 / 6/2 , 1A , 1B & 1C AT W ADGAO N B U DRU K , P U NE IN T H E NA M E OF ' S U N O R B I T . T H E S I ZE O F TH E P LO T O N WH I CH T H E SAID PRO J ECT WAS BUI LT WAS 1 3400 SQ . MT RS . O R 1, 64 , 689 SQ . F T . AND CO M P R I S ED O F 4 BUILDINGS N AME L Y A , B , C , D AND CO NTAIN ED 1 49 R ES I DEN TI AL F L ATS AND 2 SH OP S . THE ASSESSING OF F ICE R DURING TH E ASSESSMENT P R OCEED I NGS I SSUED COMMISS I O N T O TH E GO V T . APPROVED VA L UE R , S HRI NITI N L ELE SEEK IN G R EPO R T O N T H E P ROJ EC T S P EC I A L L Y C ONS I DE RI NG THE P R OV I SIO N S OF SEC T ION 80 IB(1 0 ) O F T H E AC T . THE VA L U E R S UB M ITTED I T S R EPORT DATED 18.01.20 1 3 WHE R EIN IT H AS BEEN MEN TI ONED TH AT TH E P ROJ E CT C OMPLIED WITH AL L THE CONDITIONS SPECIFIE D U/S 80IB(10) SUCH AS THE AP P ROVA L OF TH E L AYOUT ON 20 . 03 . 2007 A N D BU IL D I NG PE R MISS I ON COMMENCEMENT I SSUE D BY THE P MC O N 30 . 03 . 2007 V I DE COM M E N CEME NT CER T IFICA T E NO. 4272 HE N CE T H E DA T E O F C OMME N CEMEN T BEI N G 3 0. 03 . 2 00 7 . THUS , AS PE R THE P ROVI S I O N S O F S ECTION 8 0 I B(10)(A)( I I I) T HE P R OJEC T A P P R OVED ON O R A FT E R 0 1. 04 . 2 0 05 T HE DAT E OF C OMP L ET I O N IS WIT HIN 5 YEA R S FRO M T HE EN D OF T H E FI NA N C I A L YEA R IN WHICH THE H O U S I NG PRO J EC T I S APPROVED BY TH E L OCA L AUTH O RITI ES AND IN TH E PRESE NT C AS E THE R EQ U I R ED DA T E OF F IN AL CO M P L E T ION I S ON O R B E F ORE 3 1 .03 . 20 1 2 AS T HE DA TE OF FIRST A PPROVAL / CO M ME N CEMEN T BE I NG 30 .03 . 2007 F A L L I NG IN F . Y . 2 006 -07 . THE A PPE LL AN T COMPAN Y HAS T HUS OBTA I NED THE F IN A L OCC U PANCY / COMPLET I ON CE R T IFIC AT E I SS U ED BY T HE LOCA L AU TH O RITI ES I . E . THE P MC ON 28.02 . 2012 F O R T H E P R O J E CT . THAT TH E APPEL L AN T HAS FULFILLED THE AFORESA I D CO N D I T ION WITHIN THE STIPU L ATED TIM E FR AM E A S PER THE PROVISIONS OF THE ACT . T H E P L OT SIZE OF T HE PRO J EC T AS PE R SECT ION 8 0IB(10)(B ) SHOULD BE MORE THAN 1 ACRES AN D THE P L O T AREA BE ING 13 . 40 0 SQ . MTRS I . E . 3 .31 AC R ES W HI CH I S M O R E TH A N 1 AC R E . FURTH E R, TH E APPEL L AN T COMPA NY HAS A LSO COMPLIED W I TH THE COND I T I O N S AS PE R SEC TI O N 80IB (1 0 ) (D ) I . E . TH E BU I L T -U P AREA O F SHOPS NOT T O EXCEED 3% OF THE AGGREGATE BU I LT- U P AREA OF T HE H OUSI N G P R O J EC T OR 5000 SQ . FT . W HI CHEVER I S H I GHE R AND T HE A R EA O F T HE SHOPS I S 198 . 07 S Q . MTRS OR 2 1 32 . 03 SQ . FT . WH I C H IS LESS T HA N 50 0 0 SQ . F T . MO R EOVE R , T HE C O NDITI O NS OF S ECT I ON 80IB (1 0 )( E ) A N D ( F ) W E R E A L SO F O UN D BY TH E VA LU ER TO H AVE B EE N COMPLIED BY THE APPELLANT. THUS, THE VALUER SHRI LELE FOUND THE APPELLANT TO HAVE FULFILLED THE CONDITIONS AS PER SECTION 80IB(10). THE VALUER, HOWEVER, HAD RESERVATIONS ONLY WITH RESPECT TO THE PROVISIONS CONTAINED IN CLAUSE (C) OF SECTION 80IB(10) WITH RESPECT TO AREA OF THE RESIDENTIAL UNITS WHEREIN THE VALUER FOUND T H E BUILT - UP AREA OF 10 FLATS OF BUILDING 'B' TO HAVE EXCEEDED 1500 SQ . FT . THAT I S T HE SAME BEING 1508 , 50 SQ. FT. THE VALUER IN ITS REPORT HAS REFERRED TO THE THICKNESS OF THE WALL WHICH AS PER THE SANCTIONED PLAN WAS OF 6' THICKNESS AND CONSIDE R ED BY THE APPELLANT TO BE OF 6', HOWEVER , IN THE CALCULATION OF 5 THE VALUER THE SAME WA S FOUND TO BE 18' AND THE VALUER AS PER THE DEFINITION GIVEN OF THE BU IL T UP AREA IN SECTION 80IB(14)(A) CONSIDERED THE SAME IN COMPUTATION OF BUILT U P AREA , AND FOUND THE BUILT TO AREA TO HAVE EXCEEDED 1500 SQ. FT . IN RESPECT OF 1 0 FLATS O F BU I LDING 'B'. THE APPELLANT, H OWEVER , NOT SATISFIED WITH THE AFORESAID FINDINGS OF SHRI LELE APPOINTED HIS OWN ARCHITECT SHRI PRAKASH KULKARNI WHO I N ITS REPOR T DATED 01 . 03.2013 STATED THE AREA TO BE 1493 . 61 SQ. FT . THE APPE LL ANT ALS O APPOINTED ANOTHER ARCHITECT AND GOVT. APPROVED VALUER SHRI HARSHAD RU PARE L FO R A REPORT ON THE BUILT-UP AREA OF THE SAID FLATS AND SHRI RUPAREL IN HIS REPORT DATE D 26.02.2013 ALSO CALCULATED T H E AREA OF EACH OF THE 10 FLATS TO BE 149 3 . 53 SQ . FT . THE A . O., HOWEVER , DID NOT CONSIDER THE AFORESAID REPORT OF T H E ARCHITECT APPOINTED BY THE APPELLANT AND RELYING ON THE REPORT OF SHRI L . E L E T HE GOVT . APPROVED VALUER, HELD THAT THE HOUSING PROJECT DID NOT FULFILL THE COND I TION PROVIDED IN CLAUSE (D) OF SECTION 80IB(10) AND HENCE, THE PROFITS NOT E LIGIBLE FO R DEDUCTION AS CLAIMED BY THE APPELLANT . THE ASSESSING OFFICER , HOWEVE R , ALLOWED THE APPELLANT FOR THE CROSS EXAMINATION OF SHRI LELE THOUGH DID NOT C ONSIDER THE CLAIM OF ALLOWING PROPORTIONATE DEDUCTION ON THE PLEA THAT WHERE T HE BASI C CONDITION IS NOT FULFILLED IT RENDERED THE ENTIRE PROJECT NOT ELIGIBLE FOR T HE CLA I M O F DEDUCTION. 3.8 THUS, T H E ASSESSING OFFICER FOUND THE APPELLANT TO H AV E VIO L ATE D THE PROVISIONS AND CONDITIO N S WITH RESPECT TO THE BUILT-UP AREA OF 1 0 FLATS I N BUILDING 'B ' OF THE PROJECT WHE R E THE SAME WAS FOUND TO BE EXCEED I N G 1500 SQ . FT . AS PER SECTION 80IB(10)(C). THE ASSESSING OFFICER HAS DRAWN THE AFORESAI D CONCLUSION ENTIRELY ON THE BA S IS OF THE REPORT OF THE GOVT . APPROVED V ALUE R SHR I NITIN LELE, DATED 18.01.2013 . ON PERUSAL OF THE REPORT SUBMITTED BY S HRI LELE I T I S NOTICED THAT THE VALUER HAS TA K EN THE THICKNESS OF THE WALL AT 18' AS A T S IX P LA C E S THE WALL THICKNESS WAS 1 8 ', WHEREAS THE APPELLANT HAS CONSIDERED T H E WALL T HICKNESS OF 6' AND THE SANCT I ONED PLAN ALSO SHOWED WALL THICKNESS AT 6 ' ( 15 0 M M); BASED UPON WHICH THE BUILT- UP AREA OF THE 10 UNITS WORKED OUT TO BE EAC H OF 1508.50 SQ.FT. THE APPELLANTS ARCHITECT SHRI PRAKASH KULKARNI IN ITS REPORT HAS NOTICED THAT SHR I L ELE CONS I DERED THE E XTERN A L W A LL W HI C H AT FEW P L ACES H A S 18 ' T H I C K , WH I CH I S IN ACTUA L A DOUB L E WALL T AKEN AS AN ARCH IT ECTURA L PRO J ECTIO N FO R AESTHETIC PURPOSE . THE ARCH I TECT SHR I KULKA R NI AF T ER I NSPECT I NG THE SAID 10 F L A T S O F BUILDING ' B ' WORKED OUT THE BUILT-UP A R EA OF 1493.61 SQ. FT. I T HAS A L SO BEE N POINTED OUT THAT THE EXTE R NAL WALLS FOR A LL THE FLATS I N THE ENTIRE BUILD IN G ARE 6 ' THICK THOUGH THE PROJECTIONS NEAR THE W I N D OWS A R E ARCHITECTU R AL PRO J ECTIO N S WH I CH MEANT THAT THERE WAS A 6 ' WALL BETWEEN THE EXTERNAL WA L L OF THE FLAT AND 6 ' T H I C K EL E VA T ION WALL AND THE AREA OF THE ELEVA TION WAL L AND THE A R EA IN BETWE EN WE R E NOT C O NSIDERED IN THE BUILT-UP AREA OF THE F L AT BY THE CORPORATION AS WE LL AS TH E SAID AR EA WAS NON - HABITAB L E AND ALSO N OT ACCESS I BLE IN ANY WA Y H E N CE , N O T C ONSIDERED I N IT S CA L CU L A TI O N O F THE B UILT-U P A R EA WHICH S H R I LE L E TH E GOVT . APPROVED VALUER H AD CONS I DERED IN I TS CALCULATION . IT I S A L SO NOTICED F OR M THE RE P ORT OF SHRI HARSHAL RUPAREL , THE GOV T . APPROVED VA L UER , APPOINTED B Y T HE APPELLANT TO CHECK THE BU I LT-UP AREA O F TH E SAID 10 FLATS I N BU I LDING B . S HRI RUPAREL AFTE R TAK I NG I N T O CO N S I DE R A T IO N TH E REPORT O F SH RI LEL E A L S O DID NOT CONSI D ER THE ARCHITECTURA L PRO J ECT I ONS IN TH E CALCULAT I ON OF THE BUI L T-UP AREA AN D ARRIVED AT THE AREA O F EACH FLAT AT 1493.53 SQ . FT . IT HAS BEEN OBSERVED B Y TH E V ALUER S HR I RUPAREL T HA T THE ONLY POINT L EAD IN G TO T HE D I FFE R ENCE IN A R EA S O F THE F LA T S W AS O N ACCOU N T OF I NC L US I ON OF THE AR C HI TEC T URA L PRO J ECTIO N S IN TH E B U ILT - UP A RE A BY SHR I L ELE AND NO T CONSI D ERED BY HI M I N M AK I NG CA L CU L ATION OF TH E BUILT-UP AR E A . IT HAS BEEN FURTHER OBSERVED BY 6 HIM TH AT AS A GENERAL TREND P R EVA LE N T IN T H E C ON S T R UCT I ON I NDUSTRY ARCHITECTS P R OV I DE A R CH I TECTURA L PROJEC T IONS IN THE F O RM O F FE AT U R ES , CHHAJJAS , H O LL OW BOXES , SO LI D BO X ES FO R EN H A N C I NG T H E AESTHET I CS OF THE BUILDINGS WHICH ARE ALSO ALLOWED BY THE L O C AL AUT H ORITY I . E . PMC , PCMC ETC . AN D A RE R OT COUNTED BY ANY CORPORATION I N T HE BU I L T - UP AREA CA L CULA TI ON S . S H R I RUPAREL HAS ALSO NOTED I N I TS R EPO R T T H AT T HE P AR TI CU L A R P R O J EC TI O N IS A LSO NOT UT ILI Z A BLE FROM INSIDE AND NE IT HE R IT IS ADDED TO THE CARPET AREA N OR I T WAS O F HABITABLE NATURE AND , THEREFO R E, SUCH P R O J ECTIONS AT A F EW PLACES CANNO T B E C ONSTRUED AS THICKNESS OF THE WA L L . THUS , T HE MATERIA L B R OUGHT ON R ECO R D P RIMA F AC I E DO NOT I ND I CATE THE A R C H ITEC T URAL P R O J ECT I ON T O BE IN CLUDABLE I N T HE BU ILT - UP A RE A OF THE A F ORESA ID FLATS AS T HE SAME I S SEE N TO BE OUTSIDE THE WA LL T HI C KN ES S. HOWEVER, SHR I LELE IN I TS SECO N D R EPO R T DA T ED 18 . 03 . 20 1 3 AND A L SO IN THE STATEMENT RECORDED DURING THE CROSS EXAMINATION DONE BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS IS SEEN TO BE NOT AGREEABLE TO THE VIEWS TAKEN BY THE ARCHITECT AND VALUER APPOINTED BY THE APPELLANT AND FOR HIS OWN REASONS REJECTED THE CONTENTION RAISED BY THEM AND HAS ALSO GONE TO THE EXTENT OF CATEGORIZING THE PROJECT AS UNAUTHORIZED . HOWEVER , IT IS NOTICED THAT THE L OCAL AUTHORITY HAS GRANTED THE OCCUPANCY / COMPLETION CERTIFICATES T O THE APPE L LANT FROM TIME TO TIME' AND ALSO THE FINAL OCCUPANCY CERTIFICATE TO THE APPELLANT IN RESPECT OF THE SAID PROJECT AND NOT POINTED TO ANY SUCH VIOLATION AS : CONTENDED BY SHRI LELE . THE OBSERVATIONS MADE BY SHRI LELE DO APPEAR TO BE F ARFETCHED AND CERTAINLY GIVE A DISTORTED PICTURE WITH RESPECT TO THE ASSUMPTION AND CONCLUSION DRAWN BY HIM. THE APPELLANT, HOWEVER, HAS POINTED OUT TO THE DEFINITION OF THE BUILT-UP AREA GIVEN IN SECTION 80IB(14)(A) WHEREBY BUILT-UP AREA M EANS THE INNER MEASUREMENT OF THE RESIDENTIAL UNITS AT THE FLOOR LEVEL INCLUDING T HE PROJECTIONS AND BALCONIES AS INCREASED BY THE THICKNESS OF WALLS , BUT DOES NOT I NC L UDE T H E COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNITS . THE APPEL L ANT ' S CONTENTION THAT THE GOVT . APPROVED VALUER HAS TAKEN THE AESTHETIC AND ARCHITECTURAL COLUMNS IN THE INNER MEASUREMENT OF THE THICKNESS OF WALLS RATHER IT WOULD INCREASE THE OUTER MEASUREMENT CERTAINLY NOT THE INNER MEASUREMENT AND I S C ONTRARY TO THE DEFINITION CONTAINED IN SECTION 8018(14)(A) PRIMA FACIE APPEARS T O BE CORRECT I N VIEW OF THE FACT THAT THE PMC HAS NEVER RAISED ANY SUCH OBJECTION AND ALSO NO T COUNTED IN THE BUILT-UP AREA CALCULATION . SHRI LELE IN HIS REPORT H A S NOT GIVEN ANY DETAILED WORKINGS OF THE CALCULATION MADE BY HIM IN ARRIVING AT T HE CONCLUSION OF THE SIZE OF 10 FLATS BEING MORE THAN THE STIPULATED AREA OF 1500 SQ FT . 3.9 THERE ARE SEVERAL JUDGEMENTS AND DECISIONS O F D IFFERENT COURTS AND TRIBUNALS RELATING TO THE I SSUE OF BUILT-UP AREA, HOWEVER , IN T HE G I VEN FACTS O F THE CASE NO SPECIFIC DECISION CAN BE DIRECTLY CORRELATED TO THE FAC T S OF THE P R ESEN T CASE . IN SUCH A SITUATION AND FACTS OF THE CASE IT IS NOTICED THAT I F ME TH I CKNESS OF WALLS IS TAKEN AT 18' BY INCLUDING THE ARCHITECTURAL COLUMNS AS TA K EN BY SHR I LE L E , THE SIZE OF THE 10 FLATS IN BUILD I NG ' B' MAY INCREASE AS CONTENDE : : BY HIM T HOUGH THE EXACT WORKING IN THIS REGARD IS NOT AVAILABLE , HOWEVER , IF THE SAME I S EXCLUDED THE BUILT-UP AREA OF THE SAID FL ATS WILL BE LESS THAN THE STIPULATED A R EA OF 1500 SQ . FT . AS PER SECTION 801B(10)(C) , THE GOVT . APPROVED VALUER BE ING AN AUTHOR I ZED TECHNICALLY QUALIFIED PERSON SPECIFICALLY FOR SUCH ISSUES & MA TT ERS I TS FINDINGS CERTAINLY CARRIES MORE WEIGHT HENCE, THE CONTENTION RAISED CANNOT BE DISREGARDED. HOWEVER, IN THE PRESENT CASE AS REPORTS OF THREE GOVT. APPROVED VALUERS ARE AVAILABLE THE ISSUE HAS BECOME DEBATABLE ONE. 7 3.10. SO FAR AS THE ADDITIONAL G R O U ND OF APPEAL RA I SED BY THE APPE L LAN T ON WITHOUT PREJUDICE THAT THE CLAIM OF DED U CT I ON U/S 80IB ( 10) SHALL BE TENAB L E O N PRO - RAT A BASIS IN RESPECT OF THOSE BALANCE UNITS OF THE PROJECT & BUILDINGS WHICH SAT I SFIE S T H E CONDITIONS ST I PULATED U/S 80 I B(10) DO F I NDS SUPPORT OF T HE DEC I S I ONS OF V ARI O US COURTS AND TRIBUNALS INCLUDING PUNE ITAT AND RELIANCE HAS BEE N PLACED ON A NUMBER OF DECISIONS WHICH INCLUDES THE FOLLOWING: 1. DC I T VS. BRIGADE ENTERPRISES PVT . LTD . , (20Q8) 1 19 TT J (BANG) 269 2. AIR DEVELOPERS . (SUPRA) , (201 0) 122 I TD 1 25 (NAG) 3. S HEH DEVELOPERS PVT . LTD . 33 SOT 277 (BOM) 4. RUNWAL MULTIHOUSING PVT . LTD . VS ACIT , ITA NOS . 1015 , 1016 & 1 017/PN/2011 5. BRA H MA ASSOCIATES VS JCIT , 119 ITD 2 55 (BOM) 6. KUMAR BUILDERS CONSORTIUM VS ACIT , 7 TAXCORP (AT) 32844 (PUNE ) 7. T US H AR DEVELOPERS VS ITO, 6 TAXCORP (AT) 30190 (PUNE) 8. K UM R A R BEHAREY RATH I & RAVIRA J KOTHARI PUNJABI ASSOCIATES VS DCIT , 22 D TR 1 (PUNE ) 9. V AR U N DEVELOPERS VS DCIT , 7 TAXCO R P (AT) 1978 (PUNE). 6. LD CIT(A) THEREAFTER AND AFTER CONSIDERING THE VARIOUS DECISIONS CITED IN HIS ORDER GRANTED DEDUCTION ON PRO RATA BASIS WITH RESPECT TO THE UNITS SATISFYING THE CONDITIONS U/S 80IB(10) OF THE ACT BY OBSERVING AS UNDER: 3.10.10.. THUS IN VIEW OF ' TH E ABOVE FACTS, THE RAT I O OF THE JUDICIAL DECISIONS AND TH E APPE L LA N T HAVING SATISFIED T H E O THER CON DIT ION AS STIP UL ATED U/S 80IB ( 10 ) S U C H A S REGARDING T H E AREA OF T HE PL O T , H AV I NG COMMERCIAL AREA WITH I N L I M IT S ETC . THE AP P ELLAN T GETS ENTI TL ED TO TH E DEDUCT ION U/ S 8 0I B (1 0 ) O N PRO R A T A BA S IS WI T H R ESPEC T T O THE B L OCKS AND UN IT S SATIS F YIN G THE CONDIT I ONS U/S 80IB ( 10 ) OF T HE AC T . 7. BEFORE US LD DR TOOK US THROUGH THE OBSERVATIONS OF AO AND SUBMITTED THAT CONSIDERING THE FACTUAL ASPECT, AO HAD RIGHTLY DENIED THE CLAIM OF DEDUCTION AND THE LD CIT(A) SHOULD HAVE UPHELD THE ORDER OF AO. HE THUS SUPPORTED THE ORDER OF AO. LD AR ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES. HE FURTHER SUBMITTED AS FAR AS THE AREA OF 10 FLATS WHICH WAS ALLEGED TO BE HAVING AREA EXCEEDING 1500 SQ.FT, HE SUBMITTED THAT THE GOVERNMENT APPROVED VALUER APPOINTED BY REVENUE HAD CALCULATED THE AREA ON THE BASIS OF THE THICKNESS OF 8 THE WALL AT 18 THOUGH THE THICKNESS AS PER THE SANCTIONED PLAN WAS OF 6. HE SUBMITTED THAT IF THE AREA IS CONSIDERED ON THE BASIS OF 6 THICKNESS, THE AREA OF ALL THE TEN FLATS WERE WITHIN THE PRESCRIBED LIMIT OF 1500 SQ FT. HE FURTHER SUBMITTED THAT THE ASSESSEES ARCHITECT SHRI PRAKASH KULKARNI AND ANOTHER ARCHITECT AND GOVERNMENT APPROVED VALUER SHRI HARSHAD RUPAREL IN THEIR RESPECTIVE REPORTS HAVE CALCULATED THE AREA OF THE 10 FLATS AND HELD IT TO BE WITHIN 1500 SQ FT. HE FURTHER SUBMITTED THAT SHRI LELE (THE VALUER APPOINTED BY REVENUE) HAD NOT GIVEN THE DETAILED WORKING OF THE CALCULATION MADE BY HIM IN ARRIVING AT THE CONCLUSION OF THE SIZE OF THE 10 FLATS BEING MORE THAN THE STIPULATED AREA OF 1500 SQ. FT. HE THEREFORE SUBMITTED THAT SINCE NONE OF THE AREA OF THE FLATS EXCEEDED 1500 SQ. FT. AND SINCE THE PROJECT HAS BEEN APPROVED BY THE PMC AUTHORITIES AS RESIDENTIAL PROJECT, THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT HAS TO ALLOWED IN FULL. WITHOUT PREJUDICE TO THE CLAIM OF DEDUCTION FOR THE FULL PROJECT HE SUBMITTED THAT IN CASE IF THE AREA OF 10 FLATS EXCEEDED THE LIMIT OF 1500 SQ. FT., THE DEDUCTION CANNOT BE DENIED FOR THE ENTIRE PROJECT AND THAT IT WAS ELIGIBLE FOR PROPORTIONATE DEDUCTION. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DENIAL OF DEDUCTION U/S 80IB(10) OF THE ACT. WE FIND THAT THE CLAIM OF ASSESSEE OF DEDUCTION U/S 80IB(10) FOR THE ENTIRE PROJECT WAS DISALLOWED BY AO FOR THE REASON THAT OUT OF THE TOTAL 149 FLATS BUILT BY ASSESSEE, 10 FLATS WERE HAVING AREA OF MORE THAN 1500 SQ FT. WE FIND THAT WHILE DECIDING THE ISSUE, LD CIT(A) HAS GIVEN A FINDING THAT THE PROJECT WAS ON A PLOT AREA OF 13400 SQ MTRS (I.E.3.31 ACRES) WHICH WAS MORE THAN 1 ACRE, APPROVAL FROM THE COMPETENT 9 AUTHORITY FOR COMMENCEMENT OF PRESENT PROJECT WAS GRANTED ON 30.03.2007 AND THE COMPLETION OF THE PROJECT WAS RECEIVED ON 28.02.2012 I.E. WITHIN THE DUE DATE OF 31.03.2012. HE HAS FURTHER GIVEN A FINDING THAT THE OTHER REQUIRED CONDITIONS WERE ALSO FULFILLED BY THE ASSESSEE. AS FAR AS THE ISSUE OF AREA OF 10 FLATS IS CONCERNED, AO HAD NOTED THAT THE VALUER APPOINTED BY THE REVENUE AUTHORITIES HAD CERTIFIED THAT 10 FLATS WERE HAVING AN AREA EXCEEDING 1500 SQ. FT. ON THE OTHER HAND, THE 2 VALUERS / ARCHITECTS APPOINTED BY THE ASSESSEE HAD CERTIFIED THAT THE AREA IN RESPECT OF THE 10 FLATS WERE LESS THAN 1500 SQ.FT. THE REASON FOR THE DIFFERENCE IN THE AREA AS CALCULATED BY THE VALUERS WAS ON ACCOUNT OF THE MEASUREMENT OF THE THICKNESS OF THE WALL. THE VALUER APPOINTED BY THE REVENUE HAD CONSIDERED THE THICKNESS OF THE EXTERNAL WALLS AT 18 AT SIX PLACES WHICH WAS IN ACTUAL A DOUBLE WALL TAKEN AS AN ARCHITECTURAL PROJECTION FOR AESTHETIC PURPOSE WHEREAS THE ARCHITECTS HAD CONSIDERED THE THICKNESS OF THE WALL AT 6 WHICH WAS AS PER THE SANCTIONED PLAN. WE FIND THAT CIT(A) IN HIS ORDER HAS ALSO NOTED THAT THE VALUER APPROVED BY REVENUE HAD NOT GIVEN THE BREAKUP OF THE CALCULATION FOR ARRIVING AT THE AREA EXCEEDING 1500 SQ.FT. FOR 10 FLATS. HE HAS ALSO NOTED THAT THAT SHRI RUPAREL HAS OBSERVED THAT AS A GENERAL TREND PREVALENT IN THE INDUSTRY, THE ARCHITECTURAL PROJECTIONS IN THE FORM OF FEATURES, CHAJJAS, HOLLOW BOXES, SOLID BOXES FOR ENHANCING THE AESTHETICS OF THE BUILDING WHICH IS ALSO ALLOWED BY THE LOCAL AUTHORITIES ARE NOT COUNTED BY ANY CORPORATION IN THE BUILT-UP AREA CALCULATIONS AND THE PROJECTIONS WAS NOT UTILIZABLE FROM INSIDE AND NEITHER IT WAS ADDED TO THE CARPET AREA NOR IT WAS IN HABITABLE NATURE. THE FINDINGS NAMELY THAT THE PROJECTIONS ARE EXTERNAL PROJECTIONS, IT IS FOR THE PURPOSE OF AESTHETIC BEAUTY OF THE BUILDING, ARE NOT HABITABLE AND NOT UTILIZABLE 10 FROM INSIDE AND ALL ALLOWED BY THE CORPORATION AND NOT CONSIDERED BY THEM FOR THE PURPOSE OF CALCULATING THE AREA OF THE FLAT, HAS NOT BEEN CONTROVERTED BY THE REVENUE. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT THE DEDUCTION U/S 80IB(10) OF THE ACT CANNOT BE DENIED TO THE ASSESSEE. WE THEREFORE DIRECT THE AO TO ALLOW THE DEDUCTION ON THE ENTIRE PROJECT. THUS THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 9. AS FAR AS REVENUES GRIEVANCE WITH RESPECT TO GRANTING OF PRO- RATA DATA IS CONCERNED, WE FIND THAT LD.CIT(A) AFTER CONSIDERING THE DECISIONS CITED IN HIS ORDER HAS NOTED THAT THE VARIOUS AUTHORITIES HAVE HELD THAT ASSESSEE IS ENTITLED TO DEDUCTION WITH RESPECT TO THE UNITS WHICH HAVE COMPLIED WITH THE CONDITION LAID DOWN U/S 80IB(10) OF THE ACT. BEFORE US, REVENUE HAS NOT BROUGHT ON RECORD ANY CONTRARY BINDING DECISION IN ITS SUPPORT NOR HAS CONTROVERTED THE FINDINGS OF LD.CIT(A). WE THEREFORE FIND NO REASON TO INTERFERE WITH THAT PORTION OF ORDER OF LD.CIT(A) AND THUS THE GROUNDS OF REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 27 TH DAY OF OCTOBER, 2017. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 27 TH OCTOBER, 2017. YAMINI 11 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. CIT(A)-7, PUNE. PRINCIPAL CIT-6, PUNE. , , / DR, ITAT, B PUNE; [ / GUARD FILE. / BY ORDER , / // TRUE COPY // / TRUE COPY / / / SR. PRIVATE SECRETARY , / ITAT, PUNE