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TMI Blog2008 (5) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... ent that the assessee has developed a housing project scheme. In respect of such housing scheme, the assessee got the approval from NIT on six different dates ranging between 11th Jan., 2002 to 15th May, 2002. The area of land covered under each approval was below 4,000 sq. mtrs. but the total area covered together in all the six approvals was 8,370 sq. mtrs. which is more than two acres. Whether by six different approvals, the assessee has developed six different housing projects or it was in pursuance to development of one housing project - From the letter of NIT, it is evident that there was only one housing project for which multiple sanctions were granted, as per the zoning of the plot and access road. This contention of the assessee is further fortified by the brochure circulated by the assessee for the sale of the plot. The copy of the brochure is placed at the assessee's paper book. From the brochure, it is evident that during the year under consideration the assessee developed only one housing project. Merely because for such one project, the approval was taken from NIT more than once, it cannot be said that the assessee developed six different housing projects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the assessee is deemed to be partly allowed for statistical purposes. - Member(s) : G. D. AGARWAL., HEMANT SAUSARKAR. ORDER-G.D. AGRAWAL, VICE PRESIDENT: This appeal by the Revenue and the cross-objection by the assessee are directed against the order of CIT(A)-II, Nagpur, dt. 26th Sept., 2007. 2. In this appeal by the Revenue, the following grounds are raised: "1. On the facts and circumstances of the case the CIT(A) erred in holding that the assessee firm was engaged in developing housing project, and therefore profit from such business activity would be eligible for deduction under s. 80-IB(10) of the Act. 2. On the facts and circumstances of the case the CIT(A) erred in holding that all the plots of sanctioned layout plan formed part of constituted one land on which housing project was developed though the assessee firm has clubbed various plots of different sizes to make believe to show that land area was more than 1 acre. 3. On the facts and circumstances of the case the CIT(A) erred in holding that there is violation of any of the conditions to become eligible for claiming deduction under s. 80-IB(10) of the Act though the assessee firm has sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative that when the assessee has violated the condition of s. 80-IB(10), the entire deduction claimed should have been denied. There is no provision in s. 80-IB(10) for allowing proportionate deduction. In support of this contention, he relied upon the decision of Tribunal, Mumbai Bench in the case of Laukik Developers vs. Dy. CIT (2007) 108 TTJ (Mumbai) 364. In view of above, it is submitted by the learned Departmental Representative that the above order of the CIT(A) should be reversed and that of the AO should be restored. 4. Learned counsel for the assessee, on the other hand, relied upon the order of the CIT(A). He stated that the area of the project developed by the assessee was 2.06 acres and not less than one acre. In support of this contention, he referred to the letter of the Nagpur Improvement Trust (hereinafter referred to as NIT) which is placed at p. 8 of the paper book wherein NIT has confirmed the development of 8,370 sq. mtrs. of the total plot area which is equivalent to 2.06 acres. It is submitted by the learned counsel that the total land acquired by the assessee was 64 acres, out of which, the assessee developed a housing project in the total land of 2.06 ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 458 of 2006 in the case of Bengal Ambuja Housing Development Ltd. vide judgment dt. 5th Jan., 2007; (iii) Arun Excello Foundations (P) Ltd. vs. Asstt. CIT (2007) 108 TTJ (Chennai) 71. In view of the above, it is submitted by the learned counsel that the Revenue's appeal should be dismissed and the assessee's cross-objection should be allowed wherein the assessee has claimed that the built-up area of the residential unit should be considered excluding the area of the balcony. 5. We have carefully considered the arguments of both the sides and perused the materials before us. The only dispute, in this appeal, is whether the assessee is entitled to deduction under s. 80-IB(10). At the relevant time, s. 80-IB(1) read as under: "(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998; (b) the project i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 160 to 164, 167 to 171 --------------------------------------------------------------------- 2. 261 to 270 1,350 1,350 67.33 1,346.6 PH/17664/11042 dt. 26-3-2002 --------------------------------------------------------------------- 3. 288 to 290, 1,092 1,092 90.933 1,091.196 PH/17568/11015 293 to 295, dt. 11-1-2002 298 to 300, PH/17833/11015 303 to 305 dt. 15-5-2002 --------------------------------------------------------------------- 4. 291, 292, 494 494 90.933 363.732 PH/17766/11276 301, 302 dt. 20-4-2002 --------------------------------------------------------------------- 5. 308 to 310, 1,170 1,170 96.9 1,162.8 PH/17834/11252 313 to 315, dt. 14-5-2002 318 to 320, 323 to 325 --------------------------------------------------------------------- 6. 311, 312, 520 520 96.9 387.6 PH/17765/11275 321, 322 dt. 20-4-2002 --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee has acquired total 64 acres of the land for development of housing project at Dixit Nagar. During the year under consideration, only 2.06 acres of the land was developed for the housing projects. From the above brochure, it is evident that during the year under consideration the assessee developed only one housing project at Dixit Nagar. Merely because for such one project, the approval was taken from NIT more than once, it cannot be said that the assessee developed six different housing projects at Dixit Nagar. In view of totality of above facts, we agree with the finding of the CIT(A) that during the accounting year, relevant to assessment year under consideration, assessee developed one housing project at Dixit Nagar, Nagpur, which was on the area exceeding one acre. 5.5 The AO has also mentioned that the assessee sold the plot and not the residential unit. From the assessee's brochure circulated for sale of the residential units, it is evident that the assessee sold bungalows. However, while selling bungalows, the plot area was duly mentioned but merely because plot area was mentioned, it cannot be said that the assessee sold the plot, not the residential uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry. Even if the statute does contain a statement to the effect that the amendment is declaratory or clarificatory, that is not the end of the matter. The Court will not regard itself as being bound by the said statement made in the statute but will proceed to analyse the nature of the amendment and then conclude whether it is in reality a clarificatory or declaratory provision or whether it is an amendment which is intended to change the law and which applies to future periods. It is only in the Notes on Clauses relating to the 2002 amendment that it has been stated that the said amendment is clarificatory. There is no such mention of the said amendment being clarificatory, anywhere in the statute itself. Such a statement in the Notes on Clauses cannot possibly bind the Court when even a statement in the statute itself is not regarded as binding or conclusive. The statute expressly states that the amendment would take effect only from 1st April, 2003." 5.9 Applying the ratio of the above decision of the Hon'ble apex Court, we find that sub-cl. (a) of s. 80-IB(14) has been made effective by the legislature from 1st April, 2005. There is no mention in the Act that the insertion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, when there is no definition of the built-up area under the IT Act, the definition of the same in the Development Control Regulation, 2000, for Nagpur City would be applicable. However, we find that the relevant facts have not been examined in the light of the above Regulation. We, therefore, direct the AO to examine whether in view of Development Control Regulation, 2000 area of the balcony is to be included in built-up area or not. Thereafter, if the built-up area of any residential unit does not exceed 1,500 sq. ft., then the entire deduction claimed under s. 80-IB(10) would be allowed. However, if the area of the some of the residential units exceeds 1,500 sq. ft., the question would be whether the entire deduction under s. 80-IB is to be denied or proportionate deduction is to be allowed. The learned Departmental Representative has relied upon the decision of the Tribunal, Mumbai Bench in the case of Laukik Developers in support of its claim that the entire deduction claimed under s. 80-IB(10) should be denied. While the learned counsel for the assessee has relied upon several other decisions wherein such deduction is allowed on proportionate basis. 6.3 We have considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute is with regard to the size of built-up area of the residential units. As per the assessee, the size of the residential units is less than 1,500 sq. ft., while as per the Revenue, the size of some of the residential units is exceeding 1,500 sq. ft. However, there is no development of shops/commercial establishments by the assessee before us. Therefore, in our opinion, the above decision of the Hon'ble Tribunal would not be applicable. 6.5 In the case of Bengal Ambuja Housing Development Ltd., the Tribunal, Kolkata Bench held as under: "It is apparent from the perusal of s. 80-IB(10) that this section has been enacted with a view to provide incentive for businessmen to undertake construction of residential accommodation for smaller residential units and the deduction is intended to be restricted to the profit derived from the construction of smaller units and not from larger residential units. Though the AO has denied the claim of the assessee observing that larger units were also constructed by the assessee, at the same time, it is also a fact on record that the assessee had claimed deduction only on account of smaller residential units which were fulfilling all the cond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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