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TMI Blog2012 (11) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. CIT(A) has rightly placed reliance on the decisions of Petron Engineering Construction Private Limited And Another Versus CBDT And Others [1988 (12) TMI 1 - SUPREME COURT] to arrive at the view that the tax incentive by way of deduction 80IB is predominantly for the purpose of augmenting affordable dwelling and ought to be interpreted in that light. The fact that the assessee has obtained approval for the housing project cannot be lost sight of. As for the excess area constructed it is for the BBMP to look into the violations if any in the construction of the housing project. That however does not authorize the AO to hold that the assessee has not got approval for the housing project OR that the conditions laid down in section 80IB (10) stated violated - in favour of assessee. - IT APPEAL NOs. 153 & 998 (BANG.) OF 2011 - - - Dated:- 31-8-2012 - N. V. Vasudevan And Jason P. Boaz, JJ. S. K. Ambustha for the Appellant V. Srinivasan for the Respondent ORDER Jason P. Boaz, Judicial Member These two appeals by Revenue are directed against the separate orders of the Commissioner of Income Tax (Appeals)-II, Bangalore dt.10.11.2011 for the Assessment Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee was not entitled to any deduction under section 80IB of the Act and completed the assessment accordingly by an order under section 143(3) of the Act on 29.12.2009 for Assessment Year 2007-08 and by order under section 144 of the Act on 30.12.2010 for Assessment Year 2008-09. 2.3 The assessee went in appeal before the learned CIT(A) against both the orders of assessment for Assessment Year 2007-08 dt. 29.12.2009 and 2008-09 dt.30.12.2010. Before the learned CIT(A), the assessee contended that the conditions of section 80IB(10) of the Act were fulfilled and that each apartment constructed was less than 1500 sq. ft. It was submitted by the assessee that no unauthorized units on floors were constructed by it but that there were certain excess area constructed by it which had not violated the condition relating to the built up area of 1500 sq. ft. In other words, it was contended by the assessee that the approval for a housing project was relevant for only two issues viz. - (i) to find out the date of approval and thus the time limit for completion of the housing project and (ii) to determine whether the project is approved by the local authority as a housing pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of M/s. Brahma Associates (2009) 315 ITR (AT) 268 (Pune) (SB)/122 'TOTAL TURNOVER') 433 (Pune) (SB). The relevant portion of the clarification extracted in order of the Hon'ble ITAT referred to above is as under : With regard to your query regarding the definition of housing project it is clarified that any project which has been approved by a local authority as a housing project should be considered adequate for the purpose of s. 10(23G) and 80-IB(10) 3.9 The appellant further stated that at the time of construction of the project the appellant had put up certain additional construction in such a manner that there were no unauthorized units or floors but only some additional area in each of the apartments that were constructed by the appellant. Even considering the excess area constructed by the appellant in each apartment. The appellant had not violated the condition relating to the built-up area, which is less than 1500 sq ft and this aspect of the matter has been verified by the Assessing Officer and there is no dispute on this issue. 4. I have carefully considered the appellant's submissions and also perused the records and duly con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the provision including incentive provision. If the wordings of the provision are clear, then the benefits, which are not available under the provision, cannot be conferred by ignoring or misinterpreting the words in the provision. 4.3 I am, therefore, of the considered view that the tax incentive byway of deduction under section 80-IB(10) is predominantly for the purpose of augmenting affordable dwelling units and it must be interpreted in that light. When a local authority approves a project as housing project, there is apparently no difficulty. As long as the local authority approves the project as a housing project, it is immaterial as to what is the quantum of use of built up area for building purposes. This is so inter alia for the reason that the CBDT vide letter dated 4.5.2001 (supra) clarified this issue. 4.4 The Hon'ble ITAT, Mumbai Bench 'A' in the case of Harshad P. Doshi v. ACIT [2010] 37 SOT 9 (Mum) (URO) held as under : Both the Assessing Officer as well as the Commissioner (Appeals) had founded their orders on the premise that the expression 'house' means a residential accommodation only. Under the head 'Chapter IV-C' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before us. In identical grounds raised for both years under consideration, Revenue has contended as under : 1. The order of the CIT(A) is opposed to the facts of the case. 2. The learned CIT(A) has erred in directing the Assessing Officer to allow deduction of ₹ 82,61,350 under section 80-IB(10) of the Income Tax Act, 1961. 3. The learned CIT(A) has failed to appreciate the fact that the assessee has not obtained the Occupancy Certificate from the local Municipal Authority which is one of the requisite for claiming deduction under section 80IB(10) of the Income Tax Act, 1961. 4. The learned CIT(A) has failed to notice that the assessee has deviated from the approved sanctioned plan which initially allowed him to construct built up area of 1,83,748 sq ft as against which the assessee has constructed an area of 2,26,851 sq ft which is in excess than approved sanctioned area. 5. The learned CIT(A) has failed to notice that the assessee has not fulfilled the conditions laid down by the CBDT for availing exemption/deduction under section 80IB (10) of the Income Tax Act, 1961. 6. For these and such other grounds that may be urged at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained a sanctioned plan on 31.10.2008 for construction of a basement of 92,565 sq ft and ground, first, second and third floors amounting to 1,83,748.40 sq. ft. It is also seen that the area constructed and sold as per the sale deeds, the Assessing Officer found that the built up area after construction was 1,91,436 sq. ft. and after increasing by the common area at 18.5% the built up area comes to 2,26,851.60 sq. ft. The basic crux of the dispute between the assessee and revenue revolves around this aspect of the matter. 5.4.2 It has been contended by the assessee before the authorities below that the approved plan mentions the built up area being plinth area of the flats and does not cover the balconies of each flat, corridors, lift area room, overhead tank, sump tank, security rooms, stair case and stair case head room, which area is in addition to the area arrived at from the sanctioned plan. What the assessee has conveyed in the sale deeds is the total area constructed including the aforesaid area, which is not reflected in the sanctioned plan. That apart, the contention of the assessee has been that the approval of the local authority for the housing project is secured an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s included in the housing project does not exceed 5% of the aggregate built up area of the housing project OR 2000 sq. ft. whichever is less. 5.4.4 From an application of the aforesaid conditions to the facts of the assessee's case, it becomes clear that the assessee has fulfilled the conditions mentioned in section 80IB of the Act. The judgment of the Hon'ble High Court of Gujarat in the case of Jolly Polymers (supra) relied upon by the learned Departmental Representative was rendered in a case where the assessee claimed deduction under section 80IB of the Act in respect of a factory without even obtaining a factory licence. In that context, the Hon'ble Court held that the commencement of the industrial activity must be lawful and any manufacturing activity which is fundamentally unlawful and is prohibited by law and against public policy would not be covered by the provisions. It has also been held by the Hon'ble High Court that mere breach of some technical provisions OR requirement would not ipso fact disqualify an assessee from claiming deduction under section 80IB of the Act. With due respect, we are of the view that the said judgment would therefore not b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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