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TMI Blog2011 (7) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) The appellant submits that its housing project complied with all the conditions mentioned in section 80-IB(10) and, accordingly, the claim for deduction amounting to Rs. 6,54,82,573 for assessment year 2003-04 and Rs. 1,91,72,008 for assessment year 2004-05 was correctly allowed while completing the original assessment and the ld. CIT(A) erred in allowing only the proportionate claim. (d) The appellant submits that the ld. CIT(A) failed to appreciate that all the flats in the appellant's housing project were of an area of less than the specified limit and each such flat was sold separately by a separate registered sale deed on which stamp duty was paid. 2. The appellant submits that the ld. CIT(A) ought to have deleted the interest levied under section 234B or in the alternative without prejudice, ought to have held that interest under section 234B(3) will be levied for the period comprised between the original assessment and reassessment and on the amount by which the tax on the total income determined on the basis of the reassessment exceeds the tax on the total income determined under section 143(3). 3. The appellant submits that the Assessing Officer be directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for deduction under section 80-IB(10), the total area of residential unit should not exceed 1,000 sq.ft. but as these pairs of flats could be viewed only as one unit and the area of such units exceeds 1,000 sq.ft. the assessee was not eligible for deduction under section 80-IB(10). Accordingly, the assessee was declined the deduction under section 80-IB(10). Aggrieved, assessee carried the matter in appeal but without complete success. While the CIT(A) upheld disallowance of deduction under section 80-IB(10) in respect of such units as exceed 1,000 sq.ft. the CIT(A) further held that the disallowance, however, must remain restricted on pro rata basis only to deduction relatable to such units. While doing so, the CIT(A), inter alia, observed as follows : "3.5 I have carefully considered the above facts of the case, the appellant's submission, Assessing Officer's contention as well as various case laws as cited above. The Assessing Officer, while disallowing the claim for deduction under section 80-IB(10) of the assessee, observed that all the units in the project were not having individual area of 1000 sq.ft. and some of the residential units had individual area of more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench 'C' order dated 21-10-2008), wherein, the theory of pro rata deduction is approved and held the deduction under section 80-IB on pro rata basis meets the objectives of the provisions of section 80-IB.The Hon'ble ITAT Bangalore Bench in the case of DCIT v. Brigade Enterprises (P.) Ltd. (24 DTR 371) Bangalore [2008] has held that the disallowance, if any, will have to be restricted to the extent of non-compliance of the provisions. This rule of proportionately is well founded in the Income-tax law and is recognized under various provisions of the Act. The Hon'ble ITAT Chennai in the case of Argun Excello Foundations (P.) Ltd. v. Asstt. CIT [2007] 108 TTJ 71 has also upheld the pro rata deduction on eligible residential units. Thus, respectfully following the above judgments of the various ITAT and Courts and particularly the Jurisdictional ITAT in the case of Saroj Sales Organisations (supra), I hold that the assessee is entitled for deduction under section 80-IB on pro rata basis. The Assessing Officer is therefore directed to allow the deduction under section 80-IB(10) subject to verification of the area-wise calculation done during the course of survey operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved plans and is capable of being used for residential purposes on standalone basis, deduction under section 80-IB(10) cannot be declined in respect of the same merely because the end user, by buying more than one such unit in the name of family members, has merged these residential units into a larger residential unit of a size which is in excess of specified size. That precisely is the case before us. While on the subject, it is useful to take note of legislative amendment by the virtue of which legislature put certain restrictions on sale of residential units to certain family members of a person who has been sold a residential unit in the housing project. Section 80-IB(10) now provides an additional eligibility condition that in a case where a residential unit in the housing project is allotted to any person being an individual, no other residential unit in such housing project is allotted to any of the following person, namely: (i) the individual or the spouse, or the minor children of such individual, (ii) the HUF in which such individual is a karta' (iii) any person representing such individual, the spouse or minor children of such individual, or the HUF in whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent legal position. 9. As regards the Assessing Officer's stand that the assessee himself has offered the deduction under section 80-IB(10) in respect of these units during the course of survey proceedings, it is only elementary that neither statement recorded under section 133A has an evidentiary value, nor a legal claim can be declined only because assessee, at some stage, decided to give up the same. In view of these discussions, and bearing in mind entirety of the case, are of the considered view that the deduction under section 80-IB(10) ought to have been allowed to the assessee entirely. To this extent, we modify the order of the CIT(A) and allow further relief to the assessee. 10. As we have held the admissibility of deduction under section 80-IB(10) in respect of entire project, revenue's grievance against partial relief granted to the assessee is infructuous and academic, we, accordingly, dismiss the same. Grievances against reopening of assessment, in the absence of specific arguments in support of the same, are treated as abandoned and, as such, dismissed. 11. In the result, appeals of the assessee are allowed in the terms indicated above and appeals of reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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