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TMI Blog2013 (3) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... S.K. Ambastha ORDER Per I.C. Sudhir, Judicial Member In these appeals, the revenue has questioned first appellate order on the following common grounds : 1. The Ld. CIT(A) has erred in allowing relief (of Rs. 6,90,51,536/- in A.Y. 2003-04 and Rs. 2,31,65,627/- in A.Y. 2004- 05) on account of deduction u/s. 80IB(10) of the I.T. Act 1961. 2. The Ld CIT(A) erred in holding that the assessee is entitled to deduction u/s 80IB(10) of the I.T. Act, even when the project has commercial space measuring 30,000 sq.ft. 3. The learned CIT(A) erred in not appreciating the stand of the Assessing Officer that the extra profit earned on account of waiver of applicability of Urban Land Ceiling Act is not a profit derived out of the Housing Project. 4. The order of the Ld CIT(A) be vacated and that of the A.O be restored. Thus we find that the issue involved in the grounds is as to whether the Ld CIT(A) was justified in holding that the assessee is entitled to the claimed deduction u/s. 80 IB(10) of the Act during the A.Ys. under consideration ? 2. The relevant facts are that during the A.Ys. under consideration, the assessee in the business of builder and dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TD 263 (Chennai). 4. The Ld. A.R. on the other hand tried to justify the first appellate order on the issue.He submitted that the proposed buildings lay out was initially approved by the Pune Municipal Corporation (PMC) on 25.5.1990, copy made available at page 94 of the paper book. This lay out plan was again revised on 31.3.2001 (Page 5 of the paper book) by Pune Municipal Corporation on 31st March 2001. He submitted that the KKT having land area of 8966 Sq. Mtrs. has been marked in red in the building lay out. He submitted that the laid down plan was approved by the Pune Municipal Corporation in the year 1990. He referred page No. 83 84 of the paper book i.e. lay out of buildings in Krishna Keval Niketan (KKN) having land area of 23089 sq. mtrs., KKT having land area of 12366 sq.mtrs. He thereafter referred page No. 93 of the paper book i.e. details about KKT Housing Project. He pointed out that KKN project constituted buildings A to J whereas the project under consideration i.e. KKT consisted Wings I,M,N,O,P and K1 and K2. The Ld A.R. referred to page No. 103 (Wings I, M,N,O, P) 104 (Wings K1 and K2) i.e. the copies of approved building plans dated 29.3.2001 and 09.3.2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in response to the letter dated 3.10.2006 by the Ld. DCIT. The Ld. A.R. placed reliance on the following decisions : 1. DCIT Vs. Brigade Enterprises (P) Ltd. 14 DTR 371 (Bang.) 2. Saroj Sales Organisation Vs. ITO, 3 DTR 494 (Bom.) 3. Vandana Properties Vs. ACIT, 27 DTR 282 (Mum.) 4. Mudhit Madhanlal Gupta Vs. ACIT, 51 DTR 217 (Bom.) 5. Apoorva Properties and Estates Pvt.Ltd. Vs. DCIT, ITA No. 113/PN/2007 (A.Y. 2003-04) order dated 21.8.09. 5. The Ld. D.R. submitted in rejoinder that if the argument of the Ld. A.R. is accepted then the whole purpose of the provisions of 80IB(10) of the Act would be defeated to ensure completion of the project in time, the date of completion of the project has been given importance under the provisions of Sec. 80IB (10). He pointed out that in the present case, there are same assessee, same addition in the same project. Ignoring these material facts, the Ld CIT(A) erred in allowing the claimed deduction. 6. We have considered the above submissions and have gone through the orders of the authorities below, material available on the record and the decisions relied upon by the parties. The facts in details submitted by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and lapsed on vacant land of 8966 sq.mtr. at S.No.1(Part)Kondhwa. 4. We have constructed the buildings K,M,N,I,O P on vacant land at Survey No. 1(A) (Part) Kondhwa Khurd, Pune which is carved out separately on site. TDR used is less than 40% of area of land of 8966 sq.mtr. We got sanctioned new building plans as per norms of 80IB(10) provisions in March 2001 constructed all flats following all these norms. Since our new housing project is as per the plans sanctioned in March 2001, it is no way concerned with earlier lapsed sanctions. We have never started any development or construction prior to March 2001 on the rear area of land of 8966 sq.mtr on which buildings K,M,N,I,O,P have been constructed. In support of this we are enclosing herewith photocopy of letter of PMC dt. 5-10-2006. English translation of the same is as under : PUNE MUNICIPAL CORPORATION Construction Control Dept. Outward No. BCO/5102 Date: 5-10-2006 To, M/s Aditya Develooers, Residing at Sadashiv Peth No. 619,Pune 30 Sub : Regarding construction on S.No. 1(Part),Kondhwa, Pune Ref: Your letter dt. 3-10-2006 On the above mentioned subject and under the letter referred above, it is be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan to verify the eligibility of the claimed deduction u/s. 80IB (10) of the Act. Pune Bench of the Tribunal has occasion to discuss the distinction between the lay out plan and building plan in the case of Nirmiti Construction (Supra). In that case before the Tribunal, the lay outs were furnished to the Municipal Corporation for sanction on 6th June 1998 and construction work was commenced after building permission was sanctioned by the Municipal Corporation on 23rd July 1999. Department took the stand that the development commenced with the development agreement and acquiring irrecoverable power of attorney and more so that lay outs were furnished to the municipal corporation for preliminary sanction on 6th June 1998, the assessees submitted that the preliminary sanction was required to be given which constituted no objection from municipal corporation for allowing assessee to have the construction on the said property. It was contended that on the basis of preliminary sanction, the assessee made an application for converting the said land into Non- agricultural land. This application was made on 25th November 1998 and the revenue authorities converted the said agricultural l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the local authority for consideration of the eligibility of U/s. 80 IB (10) deduction in the case of DCIT Vs. Brigade Enterprises (P) Ltd. (Supra). In that case before the Bangalore Bench, the assessee undertook a development project in an area of 22 Acres 19 guntas consisting of 5 residential block raw houses, Oak Tree Place, a Club, and Community Centre, a School, a Park and claimed deduction u/s. 80 IB (10) in respect of 2 residential units which if deducted separately were eligible for the relief. The A.O treated the entire project as a single unit and denied relief u/s. 80 IB (10) in entirety. The Tribunal justified the action of the Ld CIT(A) in allowing relief u/s. 80 IB(10) treating the said 2 units as independent units. The Tribunal observed that the group housing approval was approval of a master plan as a concept and if a particular unit satisfies the condition of Section 80 IB (10), the assessee is entitled for deduction. The Tribunal held that Plan for development was only a work order and not final plans sanctioned by local authority. For any project, there could not have been a plan without submission of the detailed building plans by the architect and on the requis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d building plan of such housing project are two different concept. For a ready reference Explanation (i) to the Section is being reproduced hereunder : Explanation- For the purposes of this clause, - (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; From the very reading of the Explanation (i) makes it clear that the date on which building plan of such housing project is approved shall be deemed the date of approval of the housing project. We thus find that the assessee is very much eligible for the claimed deduction u/s. 80 IB (10) on the project KKT in view of the above cited decisions including decision of Pune Bench of the Tribunal in the case of Nirmiti Construction Vs. DCIT (Supra), following which, in our view, the Ld CIT(A) has rightly allowed the claimed deduction. The same is upheld. The issue raised are thus decided in favour of the assessee. 8. So far as decision of Chennai Bench of the Tribunal in the case of ACIT Vs. Viswas Promotrs (P) Ltd. (Supra) r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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