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TMI Blog2012 (10) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... -04 and therefore is not commercial operation includible in housing projects hence there is no justification for denying deduction u/s.80IB(10). The A.O. is directed accordingly. Issue decides in favour of assessee - ITA.No.1077 & 1078/PN/2010 - - - Dated:- 30-7-2012 - Shri Shailendra Kumar Yadav and Shri G.S.Pannu, JJ. Appellant by : Shri Nikhil Pathak Respondent by : Sri S.K.Singh ORDER PER SHAILENDRA KUMAR YADAV, JM: Both these appeals pertain to same assessee on the point of deduction u/s.80IB(10). So they are being disposed off by a common order for the sake of convenience. 2. In ITA.No.1077/PN/2010, there is an issue of deduction u/s.80IB(10) of Rs.2,49,21,620/- in respect of the profit of the project Dwarakadeesh Residency. The appellant is a registered firm engaged in the business of development of land, construction of building and sale thereof. From A.Y. 2005-06, assessee firm filed return of income on 27.10.2005 disclosing total income of Rs.7,29,400/-. The Assessing Officer, hereinafter called as A.O. , vide order dated 24.12.2007 assessed the assessee s total income at Rs.2,56,51,020/-. Matter was carried before the first appellate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a of 1479 sq.ft. and Terrace area of 108 sq.ft. The Ld.AR submitted that this issue has been decided in Brahma Builder wherein on the point of terrace at page 11 para 7.3 and 7.4, the Tribunal has observed as under: 7.3 With regards to area of the flat that we find that the CIT has initially taken a stand that the built up area of the duplex flats on 6th and 7th floors exceed 1500 sq.ft. each. He stated that the built up area including the terrace is 1595 sq.ft. in building No. B4 and B5. This is arrived at by considering the built up area at 1330 sq.ft. and terrace of 265 sq.ft. for each flat and therefore, he held that the deduction is not allowable to Brahma Aangan Project as the built up area of a few flats exceeded 1500 sq.ft. each. In this context, it was the stand of the assessee that the built up area was wrongly calculated and in a separate paper book containing 6 pages, the assessee has given detailed working of the built up area as per the definition in the Act. Accordingly the total area was worked out to 1212.93 sq. ft and terrace of 281.93 sq.ft. Thus the total is less than 1500 sq.ft. Hence the objection of the CIT is misplaced. 7.4 Alternative argument on beha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moreover, the ITAT Mumbai Bench in the case of Haware Constructions (P) Ltd. Vs. ITO (2011) 64 DTR (Mumbai) 251 has also taken a view that the terrace is not includible in the built up area of the flat prior to 1-4-2005 and hence for the projects commenced prior to 1-4-2005, terrace is not includible in the built up area. In view of the above, the decision of the CIT on this account does not justify the invoking of provisions u/s. 263 of the Act. 7.5 Without prejudice to above the CIT is not justified in holding that the entire project Brahma Aangan is not entitled to the deduction just because 4 duplex flats in B4 and B5 buildings are having the built up area exceeding 1500 sq.ft. The ITAT Third Member in the case of Sanghvi Doshi Enterprises Vs. ITO (2011) 60 DTR (Chennai) (TM)(Trib) 306 has held that only the flats exceeding the limit of built up area can be excluded and the deduction should be allowed on the balance flats which are within the limits of built up area mentioned in the section. Similar view is also taken by ITAT Kolkata Bench in the case of Bengal Ambuja Cement. In view of this alternate contention, CIT was not justify to invoke provisions of 263 of the Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this, assessee is entitled for deduction u/s.80IB(10) as claimed. 6. The issue raised by way of additional ground is not arising in the year under consideration but the same is arising in the subsequent year, so the same would be discussed in that year. ITA.No.1078/PN/2010 7. This appeal has been filed by the assessee on two issues, one is rejection of assessee s claim u/s.80IB(10) when built up area of Row House No.36 exceeded 1500 sq.ft. and second issue has been raised by way of additional ground wherein claim of assessee has been rejected on the ground of inclusion of commercial area, in view of the amendment to the provisions of section 80IB(10). The issue of disallowance of deduction u/s.80IB(10) on the ground that built up area of the Row House No.36 exceeded 1500 sq.ft. This issue has been discussed and decided in ITA.No.1077/PN/2010. The facts being similar including the project is same, so this is falling in the same analogy, assessee is entitled for deduction u/s.80IB(10) as claimed. 8. Coming to the second issue raised in A.Y. 2006-07 with regard to rejection of the assessee s claim on the point of commercial area. In this regard our attention was drawn to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice of the appellant that there is not even a whisper in the assessment order on this point for the assessment year 2005-06. As far as the disallowance of deduction on the ground of shops or commercial area, the learned assessing officer passed remark in the beginning of the assessment order. There is not a single reference in respect of the same. In this background it was submitted that inspite of this, CIT(A) has not adjudicated the issue. Since this issue was raised before the CIT(A) even if it is not mentioned in the order of the CIT(A), it is presumed that the said ground raised specifically mentioned in the statement of facts as discussed above, it amounts to dismissal as held in Sindhia 142 ITR 589. The Ld. Authorised Representative submitted that the same ratio of Sindhia has been followed in 98 TTJ 506 wherein it was submitted that in case CIT(A) failed to deal the issue raised amounts to dismissal and ITAT may adjudicate the same. In this regard the Ld.AR drew our attention to para 7, 7.1 and 7.2 wherein issue of deduction u/s.80IB(10) on the point of commercial area has been discussed and decided as above. So this issue should be decided in favour of the assessee. O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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