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TMI Blog2015 (1) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... .1838/Ahd/2014, I.T.A.No.2426/Ahd/2014 - - - Dated:- 2-1-2015 - Shri Anil Chaturvedi And Shri Kul Bharat,JJ. For the Appellant : Shri N. C. Amin, AR For the Respondent : Shri Nimesh Yadav Sr. DR ORDER Per Shri Kul Bharat, Judicial Member : Both these appeals by the Assessee are directed against the separate orders of the Ld.Commissioner of Income Tax(Appeals)- Gandhinagar, ( CIT(A) in short) dated 10/04/2014 02/06/2014 pertaining to Assessment Years (AYs) 2010-11 2011-12 respectively. Since common issues are involved, these appeals were heard together and are being disposed of by this consolidated order for the sake of convenience. 2. First, we take up the Assessee s appeal in ITA No.1838/Ahd/2014 for AY 2010-11. The Assessee has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law, whether the learned CIT(A) was right in disallowing the claim of deduction U/s.80IB(10) as amended upto date and clarifications of Board s Circular dated 3.6.2010. 2. On the facts and in the circumstances of the case and in law, whether the learned CIT was right in disallowing assessee s claim of deduction U/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these grounds are decided together. The ld.counsel for the assessee reiterated the submissions as were made in synopsis, which are in the following terms:- SYNOPSIS OF BRIEF FACTS FOR ARGUMENTS: The facts of the case are as follows: 1. The appellant is engaged in the business of development and construction of housing project and during the year under consideration the appellant had developed housing project known as Anurag Bunglows Coop. Housing Service Society Ltd., at Bhat, Tal. Dist. Gandhinagar and claimed to be eligible for deduction U/s 80IB(10) and accordingly deduction of profit of ₹ 2,27,75,970/- for the assessment year under consideration is claimed. All the conditions laid down in Section 80IB(10) are fulfilled, however, the learned A.O. has not agreed with the appellant's contentions and he is of the view that all the conditions laid down in Sec.80IB(10(a)(b)(c)(d)(e) are fulfilled except condition No.80IB(10)(f)(iii) which came into effect from A.Y. 2010-11 and therefore the claim of the appellant is not accepted and discussion is in paras 7 to 11 and finding is in para (12) (13) of the assessment order. 2. The amendment in Sec.80IB(10)(e) (f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kantaben D. Patel as power of attorney holder. It is further alleged that house purchased in the name of mother was also financed by Dipak D. Patel as mother was not having substantial income. For availing benefit of Sec. 80IB(10), the appellant has to comply with the condition No.80IB 10(a)(b)(c)(d)(e) (f). The only dispute raised by learned A.O. for non-fulfillment of condition No. 80IB10)(f) which is reproduced as under: i) The individual or the spouse of the NOT DISPUTED minor children of such individual ii) The Hindu Undivided family in which NOT DISPUTED such individual is the karta. iii) Any person representing such individual, DIPAK D. PATEL IS NOT the spouse or the minor children of NOT REPRESENTING SUCH such individual or the INDIVIDUAL I.E.DIPAK D. Hindu Undivided Family in which PATEL BUT REPRESENTING such individual is the karta. KANTABEN D.PATEL MOTHER OF DIPAK D.PATEL 6. Smt. Kantaben is residing separately from her son Dipakkumar Dahyabhai Patel of which evidences are also on the record of the learned A.O. Secondly the Share Certificate of ownership of Bunglow No. 14 in Anurag Bunglows is also standing in the name of Kantaben D. Patel and further i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in regard to the booking of the property of said unit No. 14 we had executed an agreement to sale for the said property to you on 30.9.2009 which is notarized vide Sr. No. 8758/2009 you purchaser are and will have to obey all the details and conditions mentioned in this agreement to sale Hence amended provision of Sec. 80IB(10)(f)(iii) is not applicable as booking was prior to 19.8.2009 i.e. 8.8.2009. 10. The finding given by learned A.O. in para (9) that membership application from, produced by the appellant are not authenticated documents and the learned CIT(A) in para 4.3 has categorically stated that the applicant firm has allotted different units to two different persons of the same family just to overcome the provision of Sec. 80IB(10)(f) which means the learned CIT(A) has accepted the facts that two different persons are owner of Unit Nos. 12 14 and only finding given by learned CIT(A) is of the same family and according to the wording of this section ,the definition of family is as under: 1.Individual or the spouse or the minor children of such individual Kantaben is not a member of the family of Dipakkumar D. Patel 2. Hindu Undivided Family in which suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the claim for exemption from tax. The appellant further relies on the decision of ITAT Mumbai 'J' Bench decision in the case of Emgeen Holding (P) Ltd., Vs. Dy.CIT [copy available on P.201 of Paper Book] In the alternative the claim of the appellant: WITHOUT PREJUDICE 12. As alleged by learned A.O. that appellant has violated the condition No.(f) of Sec. 80IB(10), then the disallowance can be made to the extent of profit earned on the said unit No.14. In support of the same reliance is placed on the various decisions of High Courts and Tribunals copies of which was submitted to the learned CIT(A) Gandhinagar, have not been considered before deciding the appeal. The zerox copies of the said decisions is submitted during the course of appeal hearing and considering the same, pro-rata claim may please be allowed. The appellant further relies on the latest decision of Madras High Court in the case of CIT Vs. Working Womens Forum, 365 ITR P. 354 (Madras)under: Charitable purpose - denial of exemption - trust making investment in shares of company - denial of exemption only to the extent of provision of violation and total denial of exemption the A.O. denied exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord and gone through the orders of the authorities below. We find that the ld.CIT(A) confirmed the finding of the AO by observing as under:- 4 .. The AO at para-11 of his order has observed that while calculating built-up area, appellant has not included road and open space of the Scheme and if such area is included, built-up area of each unit would exceed 1500 sq.ft. While making this observation AO has completely ignored the definition of built-up area provided in Section 80IB(14) r.w.s. 80IB(10), which reads as under: Built-up area means the inner measurement of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units. Thus, definition of built-up area is restricted to inner measurement of each residential unit and does not include common areas i.e. road and open space of the Scheme. The Hon ble Karnataka High Court in the case of CIT v/s. Raghavendra Construction (2012) 22 taxmann.com 260 (Kar.) has held that if common area does not exclusively belong to owner of a residential unit and if he has to share that common area with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld.CIT(A) is that the sale consideration towards allotment of residential unit was paid by the individuals to the assessee after the enactment of the aforesaid provision. However, we find from the documents enclosed in the paper-book, namely, agreement to sell dated 07/09/2009 and Banakhat dated 30/09/2009 the payments have been made by way of cheques in September-2009 and October-2009 except the amount of ₹ 3 lacs which is paid on 31/03/2010. Therefore, as per the agreement to sell and sale-deed enclosed in the paper-book the payments were made even before the aforesaid provision came into force. Under these facts, we are of the considered view that the authorities below were not justified in rejecting the claim of deduction u/s.80IB(10) of the Act as claimed by the assessee on the basis of a condition created by a provision which came into force subsequent to the allotment of the residential unit. Therefore, we hereby direct the AO to allow the deduction claimed by the assessee and delete the addition made on account of disallowance of deduction claimed u/s.80IB(10) of the Act. Thus, assessee s appeal in ITA No.1838/Ahd/2014 for AY 2010-011 is allowed. 5. Now, we take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng our rights the profit of one unit proportionately be disallowed of the total project and the appellant has relied on various decisions and copies of the same are on the record of the learned A.O. and CIT(A) and considering the decisions various of High Courts and Tribunals the claim of the appellant be allowed on pro rata basis U/s.80IB(10). 8. That there is no provision in the Act for disallowance of total claim for alleged violation of conditions for 1 unit, and the total claim of deduction U/s.80IB(10) may not be disallowed but keeping in view of various decisions of High Courts, the pro rata claim of deduction be allowable and there is no any decision against the appellant and as such on incorrect facts and misinterpretation of section, mistaken notion, the claim of the appellant be allowed partially/fully. 9. That the learned A.O. has given specific finding in para 13 of the assessment order that the claim of the appellant is disallowed on non-fulfillment of conditions U/s.80IB(10)(f)(iii) of the I.T.Act 1961 which is against the facts and materials available on record and principle of Board s Circular, the claim of the appellant be allowed. 10. That the order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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