Deputy Commissioner of Income-tax, V. M/s. Sai Samarth Constructions, Pune

ITA 990/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2720 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 13-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Assessee Lawyers: V L JAIN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 990/PN/2014 $& ' !(' / ASSESSMENT YEAR : 2010-11 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), PUNE ....... / APPELLANT )& / V/S. M/S. SAI SAMARTH CONSTRUCTIONS, OFFICE NO. 9, UMED BHAVAN, CANARA BANK BUILDING, PIMPRI, PUNE 411018 PAN : ABGFS8798G / RESPONDENT / ITA NO. 1014/PN/2014 $& ' !(' / ASSESSMENT YEAR : 2010-11 M/S. SAI SAMARTH CONSTRUCTIONS, OFFICE NO. 9, UMED BHAVAN, CANARA BANK BUILDING, PIMPRI, PUNE 411018 PAN : ABGFS8798G ....... / APPELLANT )& / V/S. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), PUNE / RESPONDENT ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI S.K. RASTOGI / DATE OF HEARING : 17-12-2015 / DATE OF PRONOUNCEMENT : 15-02-2016 2 ITA NOS. 990 & 1014/PN/2014, A.Y. 2010-11 * / ORDER PER VIKAS AWASTHY, JM : THESE TWO CROSS APPEALS BY THE REVENUE AND THE ASSES SEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- CENTRAL, PUNE DATED 27-02-2014 FOR THE ASSESSMENT YEAR 2010-1 1. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE RE CORDS ARE: THE ASSESSEE IS A PROMOTER AND BUILDER AND HAS EXECUTED A HOUSING PROJECT SAI SHUBHAM. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 27-09-2010 DECLARING ` 12,000/- AS TAXABLE INCOME. THE ASSESSEE IN ITS PROFIT AND LOSS ACCOUN T HAD SHOWN SALES OF ` 22,10,30,148/- AND NET PROFIT OF ` 68,042,622.31. THE ASSESSEE CLAIMED DEDUCTION OF ` 6,80,30,622/- U/S. 80IB(10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE A CT) ON ITS HOUSING PROJECT. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 29-08- 2011. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD ALLOTTED THREE FLATS TO SHRI INDER KRIPALANI AND TWO FLATS TO SHRI DEVRAM Y. KATE. THE ASSESSING OFFICER OBSERVED THAT BY ALLOTTING MORE THAN ONE FLAT IN THE NAME OF AN INDIVIDUAL, THE ASSESSEE HAS VIOLATED THE CONDITIO N LAID DOWN U/S. 80IB(10)(E). THEREFORE, THE ASSESSEE IS NOT ELIGIB LE TO CLAIM DEDUCTION U/S. 80IB(10) OF THE ACT. THE ASSESSING OFFICER D ISALLOWED THE DEDUCTION U/S. 80IB(10) CLAIMED BY THE ASSESSEE VIDE O RDER DATED 28-03-2013. AGGRIEVED BY THE ASSESSMENT ORDER DATED 28-03-2013, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE ASSESSEE ASSAILED THE FINDINGS OF ASSESSING OFFIC ER 3 ITA NOS. 990 & 1014/PN/2014, A.Y. 2010-11 PRIMARILY ON THE GROUND THAT CLAUSE (E) TO SECTION 80IB(10 ) WAS INSERTED BY THE FINANCE ACT, 2009 W.E.F. 01-04-2010 WHICH IS APPLICA BLE FROM ASSESSMENT YEAR 2010-11. THE ASSESSEE HAD ALLOTTED MO RE THAN ONE FLAT TO SHRI INDER KRIPALANI AND SHRI DEVRAM Y. KATE IN THE YEAR 2006 IN ACCORDANCE WITH THE DEVELOPMENT AGREEMENT EXECUTED WITH T HEM. BOTH THE ABOVE PERSONS ARE CO-OWNERS OF LAND ON WHICH HOUSIN G PROJECT WAS DEVELOPED BY THE ASSESSEE. THE ASSESSEE MADE AN ALTER NATE PRAYER, WITHOUT PREJUDICE TO ITS PRIMARY SUBMISSIONS, PROPORTIONATE DEDUCTION U/S. 80IB(10) MAY BE GRANTED ON THE ELIGIBLE UNITS OF THE PROJECT. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER ANALYZING THE FA CTS OF THE CASE REJECTED THE FIRST PRAYER OF THE ASSESSEE IN THE LIGHT OF THE AMENDMENT TO SECTION 80IB(10) VIDE WHICH CLAUSE (E) AND (F) WE RE INSERTED BY THE FINANCE ACT, 2009. HOWEVER, THE COMMISSIO NER OF INCOME TAX (APPEALS) HELD THAT THE ASSESSEE IS ELIGIBLE TO C LAIM PRORATA DEDUCTION U/S. 80IB(10) ON THE REMAINING UNITS. AGAINST THE SE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS), BOTH THE REVENUE AND THE ASSESSEE ARE IN APPEAL BEFORE THE TRIBUNAL. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUND IN ITS APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE CIT(A) HAS ERRED IN ALLOWING PRO-RATA DEDUCTION ON ELIGIBLE UNITS U/S 8 0IB(10) OF IT ACT 1961 FOR THE PROJECT THOUGH THE ASSESSEE HAS VIOLATED TH E CONDITIONS OF CLAUSE- E OF SECTION 80IB(10) OF I.T. ACT 1961. 2. THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND MODIFY ANY OF THE ABOVE GROUNDS OF APPEAL. 4. SHRI S.K. RASTOGI REPRESENTING THE DEPARTMENT SUBMITTE D THAT THE ASSESSEE HAS VIOLATED THE MANDATORY CONDITION LAID DO WN U/S. 80IB(10) FOR CLAIMING DEDUCTION. THIS FACT HAS BEEN AFFIRMED B Y THE 4 ITA NOS. 990 & 1014/PN/2014, A.Y. 2010-11 COMMISSIONER OF INCOME TAX (APPEALS) IN THE IMPUGNED ORDER. DESPITE THE FACT THAT THE ASSESSEE HAS VIOLATED THE CONDITIONS FO R CLAIMING DEDUCTION, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRA NTED PRORATA RELIEF TO THE ASSESSEE. THERE IS NO CONCEPT OF P RORATA DEDUCTION UNDER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT. THE LD. DR VEHEMENTLY SUPPORTED THE FINDINGS OF THE ASSESSING OFFICER AND PRAYED FOR REVERSING THE FINDINGS OF THE COMMISSIONER OF INCOME TA X (APPEALS) IN SO FAR AS GRANT OF RELIEF ON PRORATA BASIS TO THE ASSESSEE. 5. ON THE OTHER HAND SHRI V.L. JAIN APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN RESTRICTING THE DEDUCTION U/S. 80IB(10) ON PRORAT A BASIS TO THE ASSESSEE. ADMITTEDLY, THE ASSESSEE HAD ALLOTTED MULTIPLE F LATS IN THE NAME OF SAME PERSONS. HOWEVER, THESE FLATS WERE ALLOTTED PRIOR TO THE INSERTION OF CLAUSE (E) AND (F) TO SECTION 80IB(10). THE LD. AR SUBMITTED THAT FLATS TO SHRI INDER KRIPALANI AND SHRI DEVRAM Y. KATE WERE ALLOTTED IN ACCORDANCE WITH THE DEVELOPMENT AGREEMENT EXECUTED ON 13-10-2006 AND 28-09-2006, RESPECTIVELY. THE ABOVE SA ID PERSONS ARE THE CO-OWNERS OF THE LAND ON WHICH THE HOUSING PROJECT WAS DEVELOPED BY THE ASSESSEE. THE FLATS WERE ALLOTTED TO THEM AS PAR T OF THE CONSIDERATION. THE LD. AR CONTENDED THAT DEVELOPMENT A GREEMENT WERE EXECUTED WITH THE CO-OWNERS OF THE LAND MUCH PRIO R TO THE AMENDMENT BROUGHT IN BY THE FINANCE (NO. 2) ACT, 2009. T HE FINANCE BILL WAS PASSED ON 19-08-2009 AND THE DEVELOPMENT AGRE EMENTS WERE EXECUTED IN THE YEAR 2006. THUS, THE PROVISIONS OF AMEND ED SECTION 80IB(10) CANNOT BE APPLIED SO AS TO DENY THE BENEFIT OF DE DUCTION U/S. 80IB(10) TO THE ASSESSEE. THE LD. AR IN SUPPORT OF HIS SUB MISSIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. CIT VS. SARKAR BUILDERS, 119 DTR 241 (SC); 5 ITA NOS. 990 & 1014/PN/2014, A.Y. 2010-11 II. M/S. B.U. BHANDARI NANDGUDE PATIL ASSOCIATES VS, ITO IN ITA NOS. 1438 & 1439/PN/2009 FOR ASSESSMENT YEARS 2005-06 AND 2006-07 DECIDED ON 31-10-2012; III. ACIT VS. M/S. SHRI OSTWAL BUILDERS LTD. IN ITA NOS. 7292 & 7293/PN/2008 FOR ASSESSMENT YEARS 2003-04 AND 2004-0 5 DECIDED ON 17-02-2010. 5.1 THE LD. AR SUBMITTED THAT WITHOUT PREJUDICE TO HIS FIRST ARGUMENT THE ASSESSEE SUPPORTS THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN GRANTING PRORATA DEDUCTION ON THE ELIGIBLE RESIDE NTIAL UNITS. THE LD. AR FURTHER SUBMITTED THAT THE APPEAL OF THE REVE NUE IS WITHOUT MERITS. IT HAS BEEN REPEATEDLY HELD BY VARIOUS HON'BLE H IGH COURTS AND THE TRIBUNAL THAT THE ASSESSEE CAN BE GRANTED PRORATA DEDUCTION ON ELIGIBLE UNITS U/S. 80IB(10) OF THE ACT. IN SUPPORT OF HIS FINDIN GS THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. DCIT VS. EKTA HOUSING PVT. LTD., ITA NO. 3649/MUM/2009; II. DCIT VS. BRIGADE ENTERPRISES PVT. LTD. (BANG), 119 TTJ 269; III. BRAMHA ASSOCIATES VS. JCIT, ITA NO. 141/PN/2006; IV. SANGHVI & DOSHI ENTERPRISES VS. ITO (CHENNAI), 141 TTJ 1; V. CIT VS. ARUN EXCELLO FOUNDATION (P) LTD. (MAD), 86 DTR 99. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO CONSIDERED THE DOCUMENTS ON WHICH THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE. IT IS AN UNDISPUTED FACT TH AT THE ASSESSEE IN ITS HOUSING PROJECT SAI SHUBHAM HAS ALLOTTED MULTIPLE FLA TS IN THE NAME OF INDIVIDUAL PERSONS. THE FINANCE (NO.2) ACT, 2009 HAS INSERTED CLAUSE (E) AND (F) IN SECTION 80IB(10) OF THE ACT WHICH READS AS UNDER: 80IB(10) XXXXXXXXXXX (A) XXXXXXXX 6 ITA NOS. 990 & 1014/PN/2014, A.Y. 2010-11 XXXXXXXXXXXXX (E) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSI NG PROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND (F) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSI NG PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UN IT IN SUCH HOUSING PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS , NAMELY: (I) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILD REN OF SUCH INDIVIDUAL, (II) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIV IDUAL IS THE KARTA, (III) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDI VIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA. ACCORDING TO THE NEWLY INSERTED CLAUSES, THE ASSESSEE S HALL NOT BE ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) ON A PROJECT IF MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO ANY INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR TH E HUF WHEREIN SUCH INDIVIDUAL IS A KARTA. THE ABOVE CLAUSES WERE INSERTE D W.E.F. 01-04-2010. 7. IN THE PRESENT CASE UNDISPUTEDLY THE ASSESSEE HAS ALLOTTED THREE FLATS TO SHRI INDER KRIPALANI AND TWO FLATS TO SHRI DEVRAM Y . KATE. THE ASSESSING OFFICER DENIED DEDUCTION U/S. 80IB(10) TO THE ASSE SSEE AS NEWLY INSERTED PROVISIONS OF SECTION 80IB(10) RESTRICT ALLO TMENT OF MULTIPLE FLATS TO AN INDIVIDUALS IN A HOUSING PROJECT TO BE ELIG IBLE TO CLAIM DEDUCTION. A PERUSAL OF THE DOCUMENTS ON RECORD WOULD SHOW THAT T HE ASSESSEE HAS ALLOTTED FLAT NOS. 302, 802 AND 902 IN WING -I TO SHRI INDER KRIPALANI IN TERMS OF DEVELOPMENT AGREEMENT DATED 13-10-2006 AND FLAT NOS. 101 AND 103 IN WING-I TO SHRI DEVRAM Y. KAT E IN ACCORDANCE WITH TERMS AND CONDITIONS OF DEVELOPMENT AGR EEMENT DATED 28-09-2006. BOTH THE SAID PERSONS WERE CO-OWNE RS OF THE LAND ON WHICH THE RESIDENTIAL PROJECT WAS DEVELOPED BY THE AS SESSEE. AT THE 7 ITA NOS. 990 & 1014/PN/2014, A.Y. 2010-11 TIME OF ALLOTMENT OF FLATS THE ASSESSEE COULD NOT HAVE ANTIC IPATED THAT DEDUCTION U/S. 80IB(10) WOULD BE DISALLOWED IF MULTIPLE FLATS A RE ALLOTTED TO AN INDIVIDUAL. THE FINANCE BILL VIDE WHICH CLAUSES (E) AND (F) WERE INSERTED IN SECTION 80IB(10) WAS INTRODUCED ON 07-06 -2009 AND THE BILL WAS PASSED BY THE PARLIAMENT ON 19-08-2009 I.E. MU CH AFTER THE DATE OF EXECUTION OF THE DEVELOPMENT AGREEMENT B ETWEEN THE PARTIES. HENCE, THE NEWLY INSERTED PROVISIONS CANNOT BE APPLIED ON THE TRANSACTIONS WHICH WERE COMPLETE MUCH PRIOR TO THE INSER TION OF THE CLAUSES. THE AMENDMENTS PROPOSED BY THE FINANCE BILL IN T HE INCOME TAX ACT ARE ENFORCEABLE ONLY WHEN THE BILL IS PASSED BY T HE PARLIAMENT AND GETS THE ACCENT OF THE PRESIDENT OF INDIA. EVEN IF IT IS PRESUMED THAT AMENDMENTS PROPOSED BY THE FINANCE BILL ARE EFFECTIVE FROM DATE WHEN IT WAS PASSED BY THE PARLIAMENT, EVEN IN THAT CASE THE TRANSACTIONS IN THE PRESENT CASE RELATING TO SALE OF FLATS WAS COMPLETE B EFORE THE PASSING OF THE FINANCE (NO. 2) ACT, 2009 ON 19-08-2009. 8. FURTHER, A PERUSAL OF EXPLANATORY NOTE TO THE PROVISIO NS OF THE FINANCE (NO. 2) ACT, 2009 WOULD SHOW, THAT THE RESTRICTIONS ON ALLOTMENT OF MULTIPLE RESIDENTIAL UNITS TO AN INDIVIDUAL WOULD N OT APPLY IN RESPECT OF ALLOTMENT MADE BEFORE 19-08-2009. THE RELEVANT EXTRA CT OF THE CBDT CIRCULAR NO. 5 OF 10 DATED 03-06-2010 READS AS UNDER: 33.8 APPLICABILITY - THESE AMENDMENTS HAVE BEEN MADE APPLICABLE WITH EFFECT FROM 1 ST APRIL, 2010 AND WILL ACCORDINGLY APPLY IN RELATION TO ASSESSMENT YEAR 2010-11 AND SUBSEQUENT YEARS. THE A MENDMENTS RELATE TO RESTRICTIONS ON SPECIFIC TRANSACTIONS (I. E., ALLOTMENT OF RESIDENTIAL UNITS). THEREFORE, THEY WOULD APPLY TO TRANSACTIONS AFTER A SPECIFIED DATE DURING THE YEAR. SINCE THE FINANCE (NO.2) ACT, 2009 BECAME LAW ON 19 TH AUGUST, 2009, THE RESTRICTIONS REGARDING ALLOTMENT OF RESIDENTIAL UNITS SHALL NOT APPLY IN RESPECT OF ALLOTMENTS MADE BEFOR E 19.08.2009. 9. THUS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE CBDT CIRCULAR CLARIFYING THE APPLICABILITY OF THE AMENDED PROVISIONS, WE ARE OF 8 ITA NOS. 990 & 1014/PN/2014, A.Y. 2010-11 THE CONSIDERED OPINION THAT THE PROVISIONS OF CLAUSES (E) AN D (F) TO SECTION 80IB(10) OF THE ACT CANNOT BE APPLIED TO THE TRANSACTIONS CAR RIED OUT BEFORE 19-08-2009 AND ACCORDINGLY DEDUCTION U/S. 80 IB(10) CANNOT BE DENIED TO THE ASSESSEE ONLY FOR THE REASON THAT MU LTIPLE RESIDENTIAL UNITS WERE ALLOTTED TO AN INDIVIDUAL PRIOR TO THE AFORESAID DATE. ACCORDINGLY, WE FIND MERIT IN THE APPEAL OF THE ASSESSEE AN D THE SAME IS ALLOWED. ITA NO. 990/PN/2014 (REVENUES APPEAL ) 10. THE REVENUE IN ITS APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING PROPORTIONATE DEDUCTION TO THE ASSESSEE IN RESPECT OF ELIGIBLE UNITS OF HOUSING PROJECT. THE CONTENTION OF REVENUE IS THAT THERE IS NO CONCEPT OF ALLOWING PROPORTIONATE DEDUCTION U/S. 80IB(10) TO A HOUSING PROJEC T. WE DO NOT FIND ANY MERIT IN THIS PLEA OF THE REVENUE. THE TRIBUNAL IN NUMEROUS CASES HAS ALLOWED PROPORTIONATE DEDUCTION U/S. 80IB(10) ON ELIGIBLE UNITS OF A HOUSING PROJECTS AND THE SAME HAVE BEEN UPH ELD BY THE HON'BLE HIGH COURTS. THUS, THE QUESTION WHETHER PROPORT IONATE DEDUCTION CAN BE ALLOWED U/S. 80IB(10) TO THE ELIGIBLE UNITS OF A HOUSING PROJECT IS NO MORE RES-INTEGRA. 11. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS . ARUN EXCELLO FOUNDATION (P) LTD. (SUPRA) HAS GRANTED PROPORTIONATE DEDUCT ION TO THE HOUSING PROJECT U/S. 80IB(10). IN THE CASE OF VISWAS PROMOTERS PRIVATE LIMITED VS. ACIT REPORTED AS 81 DTR (MAD) 68 THE HON'BLE MADRAS HIGH COURT HAS H ELD THAT THE ASSESSEE IS ENTITLED TO CLAIM PROPORTIONATE RELIEF ON THE UN ITS SATISFYING THE EXTENT OF BUILT UP AREA. THE RELEVANT EXTRACT OF THE JUDGMENT READS AS UNDER: 9 ITA NOS. 990 & 1014/PN/2014, A.Y. 2010-11 14. ON THE FACTS ADMITTED BY THE REVENUE, IN THE P ROJECTS 'AGRINI' AND 'VAJRA', THERE ARE NUMBER OF FLATS WHICH ARE BELOW 1500 SQ.FT., AND THE RELEVANT BUILT-UP AREA REQUIREMENT IS SPECIFIED UND ER SECTION 80IB(10) (C) OF THE INCOME TAX ACT. THUS, THE BUILT-UP AREA IN S OME OF THE FLATS IN BOTH THESE PROJECTS ARE IN EXCESS OF 1500 SQ.FT., I.E., 32 FLATS IN AGRINI AND ONLY ONE FLAT IN VAJRA AND THAT THE ASSESSEE HAD NOT CLA IMED ANY DEDUCTION ON THIS. WE HOLD THAT THE TRIBUNAL IS NOT CORRECT IN I TS VIEW, THAT BY REASON OF THESE UNITS BEING IN EXCESS OF 1500 SQ.FT., THE ENT IRE CLAIM OF THE ASSESSEE IN RESPECT OF THESE TWO PROJECTS WOULD STA ND REJECTED UNDER SECTION 80IB(10) OF THE INCOME TAX ACT. THUS, GOING BY THE DEFINITION OF 'HOUSING PROJECT' UNDER EXPLANATION TO SECTION 80HH BA OF THE ACT AS REFERRED TO ABOVE AS THE CONSTRUCTION OF 'ANY BUILD ING' AND THE WORDINGS IN SECTION 80IB(10) OF THE ACT, THE QUESTION OF REJ ECTION IN ENTIRETY OF THE PROJECT ON ACCOUNT OF ANY ONE OF THE BLOCKS NOT COM PLYING WITH THE CONDITIONS, DOES NOT ARISE. EVEN IN THE CASE OF EAC H ONE OF THE BLOCKS, WHEREVER THERE ARE FLATS WHICH SATISFIED THE CONDIT IONS PARTICULARLY OF THE NATURE STATED UNDER SECTION 80IB(10) (C) OF THE ACT , WE HAVE ALREADY UPHELD THE CASE OF THE ASSESSEE IN T.C. NOS.1348 AN D 1349 OF 2007 DATED 10.10.2012 FOR GRANT OF RELIEF UNDER SECTION 80IB(10) OF THE ACT ON A PROPORTIONATE BASIS, BY FOLLOWING THE DECISION OF THE BOMBAY HIGH COURT IN CIT V. BRAHMA ASSOCIATES [2011] 333 ITR 28 9/197 TAXMAN 459/9 TAXMANN.COM 289. THUS APPLYING THE DECISION O F THIS COURT IN T.C. NOS. 1348 AND 1349 OF 2007 DATED 10.10.2012, WE HOL D THAT THE ASSESSEE IS ENTITLED TO SUCCEED BOTH ON THE PRINCIP LE OF PROPORTIONALITY AS WELL AS BY REASON OF THE CONSTRUCTION ON THE MEANIN G OF THE EXPRESSION 'HOUSING PROJECT' AS REFERRING TO CONSTRUCTION OF A NY BUILDING AND THE WORDINGS IN SECTION 80IB(10) OF THE ACT. IN THE CIR CUMSTANCES, WE HOLD THAT THE MERE FACT THAT ONE OF THE BLOCKS HAVE UNIT S EXCEEDING BUILT-UP AREA OF 1500 SQ.FT, PER SE, WOULD NOT RESULT IN NUL LIFYING THE CLAIM OF THE ASSESSEE FOR THE ENTIRE PROJECTS. CONSEQUENTLY, IN RESPECT OF EACH OF THE BLOCKS, THE ASSESSEE IS ENTITLED TO HAVE THE BENEFI T OF DEDUCTION IN RESPECT OF RESIDENTIAL UNITS SATISFYING THE REQUIREMENT UND ER SECTION 80IB(10) (C) OF THE ACT. IN SO HOLDING, WE ALSO AGREE WITH THE D ECISION OF THE BOMBAY HIGH COURT IN CIT V. VANDANA PROPERTIES [2012] 206 TAXMAN 584/19 TAXMANN.COM 316, WHICH WAS DECIDED BY THE BOMBAY HI GH COURT ON SIMILAR LINES AS IN THE ASSESSEE'S CASE BEFORE US. SIMILAR VIEW WAS TAKEN BY THE TRIBUNAL IN THE CASE OF SANGH VI AND DOSHI VS. ITO REPORTED AS 18 ITR (TRIB.) 608. THE HO N'BLE MADRAS HIGH COURT IN APPEAL CIT VS. SANGHVI AND DOSHI ENTERPRISES REPORTED 10 ITA NOS. 990 & 1014/PN/2014, A.Y. 2010-11 AS 29 TAXMANN.COM, 386 (MAD.) HAS AFFIRMED THE VIEW TAKEN B Y THE TRIBUNAL. 12. BE THAT AS IT MAY, WE HAVE ALLOWED THE APPEAL OF ASSE SSEE AND HAVE HELD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION IN RESPECT OF RESIDENTIAL UNITS ON WHICH THE COMMISSIONER OF INCOME TAX (A PPEALS) HAS DENIED PROPORTIONATE DEDUCTION. THUS, IN VIEW OF OUR ABOVE FINDINGS, THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB (10) ON THE ENTIRE PROJECT. ACCORDINGLY, THE APPEAL OF THE REVEN UE IS DISMISSED BEING DEVOID OF ANY MERIT. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 15 TH DAY OF FEBRUARY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 15 TH FEBRUARY, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-CENTRAL, PUNE 4. ' / THE CIT, CENTRAL, PUNE 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE