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TMI Blog2012 (11) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... of ITO vs. Air Developers (2009), 123 TTJ (Nagpur) 359. Thus, undisputedly, the decision of the Hon'ble Jurisdictional Bombay High Court in the case of CIT Vs. M.S.Brahma Associates & Ors. (supra) to which this Bench of the Tribunal is bound with has remained to be discussed for its applicability on the issue which, in our view, has resulted into a mistake apparent from record in the order dated 31st May 2011 of the Tribunal. We thus are of the opinion that para Nos.17 & 18 of the order of the Tribunal dealing with Ground No.2 needs rectification under the provisions of section 254(2) of the Act. We thus recall the order of the Tribunal on ground No.2 i.e., para 17 & 18 of the order with direction to the Registry to fix the appeal for hearing on ground No.2 on an earlier possible date with advance notices to the parties." 3. So the limited issue before us is with regard to allowability of prorata claim u/s.80IB(10) with reference to the residential portion of the housing project. In this regard, Ld. Authorised Representative submitted that this issue of allowability of prorata claim u/s.80IB(10) with reference to area of residential unit of housing project has been decided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilt-up area of the residential units by applying the Development Control Regulation, 2000, and to allow proportionate deduction under section 80IB(10) if he finds that the built up area of some of the residential units exceeds 1,500 sq.ft." iv) Bangalore Bench of this Tribunal in DCIT vs. Brigade Enterprises Pvt. Ltd., has held as under:- "..... Therefore, if a particular unit satisfied the condition of section 80IB, the assessee is entitled for deduction and it should be denied in respect of those units only which do not satisfy the conditions - Again, the accounting principles would also mandate recognition of profits from each unit separately." v) Mumbai 'G' Bench of this Tribunal in Sheth Developers Pvt. Ltd. (supra), has held as follows: ".... As regards the A project assessee is eligible for relief on prorata basis in respect of the flats which did not have a built-up area exceeding 1,000 sq.ft. - quantum of deduction in respect of the flats which have built-up area less than 1,000 sq.ft., has to be worked out on pro-rata basis - A.O. accordingly directed to verify the claim of the assessee and allow the deduction on pro-rata basis in respect of flats in A Project." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 80IB(10). viii) We now examine the applicability of the decision of the Hon'ble Bombay High Court in Brahma Associates (supra) to the facts of this case. On a careful reading of this judgment, we find that nowhere it is stated that proportionate deduction should not be allowed, in case certain residential units had built up area in excess of prescribed limit of 1,000 sq.ft. In fact, this issue was not before the Hon'ble jurisdictional High Court. The questions before the Hon'ble jurisdictional High Court were different and, hence the judgment cannot be said to be on this issue. The only issue before the High Court is when there is a commercial element in a residential project, will the assessee be denied the entire exemption. In this case, the Hon'ble High Court has observed that when the local authority approved a plan as a housing project or a residential cum commercial project, the assessee would be entitled to claim for deduction under section 80IB(10) even if the project had commercial element in excess of 10%. At paras-27 and 28, the Court observed as follows: "27. The question then to be considered is, whether the Special Bench of the Tribunal was just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs." ix) Thus, it could be seen that the Hon'ble High Court do not approve the findings of the Tribunal that a residential building with commercial user up to 10% of the plot area would alone be entitled to deduction under section 80IB(10). The issue that, in case where certain residential units are of a built up area in excess of the prescribed limit of l,0OO sq.ft. in residential project, this would result in the entire exemption being lost, or whether the assessee would be entitled to a proportionate deduction was not before the High Court. Thus, in our opinion, the decision of Hon'ble Jurisdictional High Court in Brahma Associates (supra), does not come to the rescue of the Revenue. x) On the other hand, all the decisions of the co-ordinate Benches of the Tribunal cited before us are in favour of the assessee. Respectfully following the same, we uphold the following finding of the Commissioner (Appeals), vide Para-2.8 of his order:- "2.8 The appellant's claim is supported by the decision of Hon'ble Mumbai ITAT in case of M/s. Saroj Sales Organisation ITA no.4008/Mum./2007 order 24.1.2008, wherein on identical facts the Hon'ble ITAT following the Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held as under: "As a matter of fact it is to be seen from the order of the Chennai Bench of the Tribunal in the case of Viswas Promotors (P) Ltd., that the Tribunal has not effectively considered the order of the Calcutta Tribunal and the judgment of the Calcutta High Court. Therefore the argument that all the earlier decisions on the subject were considered by the Chennai Bench of the Tribunal in the case of Viswas Promotrs (P) Ltd., is not a correct statement of fact. It is also not correct to argue that the said order of the Tribunal Chennai Bench in the case of Viswas Promotors (P) Ltd., has been confirmed by the Madras High Court. The Madras High Court in its writ order has dealt with only the writ application filed by the assessee against the order of the tribunal dismissing the miscellaneous petition filed by the assessee. The Court has specifically mentioned that the writ petition was misconceived and therefore liable to be dismissed. The ratio laid down by the High Court in the said case was that writ petition against order under s. 254(2) cannot be rejected on the ground of availability of alternate remedy. The Madras High Court has not considered anything conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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