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TMI Blog2016 (1) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... e separate common facilities. Ld. AR has relied upon various Judicial pronouncements on similar lines as in Omaxe Green Land, Sector 93B, Noida. As considered entire facts & circumstances of the case. Present eligible projects is similar to Omaxe Green Land project. Therefore, treat the eligible projects as a separate housing project on similar lines of Noida project. Commercial area of entire housing scheme is more than permissible limit as per clause (d) of Section 80IB(10) - CIT(Appeals) did not agree with the assessee that the commercial area are within the limit of amended permissible area as per clause D of section 80IB(10) introduced by Finance Act, 2010 as clarificatory in nature as it would apply to the project started before 31.3.2008. We concur with this finding of the Learned CIT(Appeals) that amendment in the said clause (d) is not clarificatory and, therefore, it would not apply retrospectively. The Learned CIT(Appeals) has, however, held that the eligible towers are separate housing projects and, therefore, deduction under sec. 80IB (10) is available. The further contention of the assessee that the commercial area is not developed and right to develop the same is tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on unbuilt housing sites i.e. developed plots consisted in the housing projects. Both the parties are in appeal before us against the order of learned CIT(A) for their respective grievances as per Grounds of Appeal. 6. The Revenue has questioned First Appellate Order on the following grounds: Grounds ITA No. 4034: 1. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in allowing deduction u/s. 10IB(10) of the Income-tax Act, 1961 in respect of profits from housing projects which are Group housing schemes of multistoried flats in the projects namely Omaxe Heights, Faridabad, Omaxe Heights, Badadurgarh, Omaxe Heights, Sonepat, Omaxe Parkwood, Baddi and Omaxe Reviera, Pant Nagar. 2. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the Group housing projects of housing projects namely Omaxe Heights, Faridabad, Omaxe Heights, Bahadurgarh, Omaxe Heights, Sonepat, Omaxe Parkwood, Baddi and Omaxe Reviera, Pant Nagar are separately satisfying the conditions of sec. 80IB(10) of the Income-tax Act, 1961 despite observing that the consolidated approval of the local authority is for the entire proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as erred in holding that the project Omaxe Heights, Sonepat and plots and villas included in Omaxe City, Sonepat as district housing projects, when the assessee himself has considered the projects Omaxe City, Sonepat which contains plots and villas and Omaxe Heights, Sonepat as one project and in allowing deduction under sec. 80IB(10) of the Income-tax Act, 1961 to the assessee in excess of the deduction claimed by the assessee in the return of income. 11. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 7. The assessee on the other hand has impugned the First Appellate Order on the following grounds: 1. On the facts and circumstances of the case and in law, the Learned CIT(Appeals) (i) Erred in confirming the action of the Learned Assessing Officer in disallowing the deduction under sec. 80IB(10) of the Income-tax Act, 1961 (the Act) claimed by the appellant in respect of following eligible housing projects. Name of the project Deduction claimed and disallowed under sec. 80IB(10) in Rs. Omaxe City, Rohtak 1,91,34,660 Omaxe Parkswood II, Chakkan Baddi 2,26,45,075 Omaxe City Mayakheri, Indore 6,86,87,350 Omaxe City-II, Mangaliya, Indore 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction thereon. 9. Out of these large group housing projects/ townships, the assessee claimed deduction of ₹ 189,70,14,901 only on eligible housing projects i.e. built up residential units having built up area within the prescribed limit and unbuilt residential units. Detailed project wise chart has been submitted during course of hearing. No deduction was claimed on commercial area of any project and residential units having built up area more than the prescribed limit. This fact is undisputed. 10. Departmental Appeal: The primary issue raised in the present case relates to the aforesaid projects undertaken by the assessee satisfying some of the conditions prescribed in section 80IB(10) of the Act. The major legal issues on which deduction has been denied to the assessee may be summarized as follows. (i) As per sub-clause (c) of section 80IB(10) of the Act, the maximum built up area of residential unit has to be 1000/1500 sq ft as per location of the project, however the consolidated projects consist of residential units having area more than prescribed limit. (ii) As per sub clause (d) to the section 80IB(10) built up commercial area in the housing project should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of Hon'ble Supreme Court in the case of Padmasundara Reassessment order & Ors. Vs. State of Tamilnadu - 255 ITR 147 (S.C) holding that the court cannot read anything into a statutory provisions which is plain and unambiguous. He submitted that a project cannot be approved in piecemeal. Approval is accorded to the entire project. Blocks of residential units are part s of a project and not project by itself. As such a block of residential unit cannot be construed to be a separate project. 12. The Learned AR on the other hand reiterated the submissions made before the authorities below and the decisions cited there. He submitted that in the case of the assessee, various township projects were undertaken on large plots with size varying from 10 acres to 329 acres. Having regard to the fact that the size of the plots were very large, merely as a matter of administrative convenience, the assessee filed consolidated application with the local authority for approval of the township project. Accordingly, the consolidated application was considered and approved by the local authority while granting consolidated license. It is, however, of utmost importance to note that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligible housing project, which independently and separately satisfies the various conditions for claiming deduction under section 80IB(10) of the Act or not. If any part of the consolidated project consists of eligible independent/ separate housing project, which satisfies all the conditions of that section, there is, no reason to deny deduction in respect of the profits derived from such eligible housing project. Further, the commercial area, also, did not form part of the eligible housing project. It is, important to note that deduction was not at all claimed by the assessee in respect of profits from the commercial area. Despite the aforesaid, in order to put the matter beyond any doubt and to strengthen the claim, the assessee decided to transfer the commercial area at book value to other group companies. The Learned AR contended that the findings/ allegations of the assessing officer regarding transfer of commercial area are totally misconceived and factually incorrect. The assessee actually transferred the commercial area to other companies is supported by the following documents: (i) MOU entered into between the assessee and transferee company(ies) for transfer of commerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same was transferred to other company(ies). Such contention of the assessing officer, as elaborately discussed supra, is not legally sustainable. As discussed supra, the mere fact that a consolidated license had been approved for the large housing project does not, it was submitted, bar transfer of any part thereof, to be independently developed by a third party, and cannot be the ground for denying deduction in respect of profits of the eligible housing project. 12.4 In view of the aforesaid, it was submitted by the Learned AR that the assessing officer totally misconstrued the provisions of section 80IB(10) of the Act to hold that if the consolidated project does not satisfy all the conditions prescribed in the said section, then no deduction is admissible even in respect of profits derived from eligible housing projects forming part of the consolidated project. 12.5 The Learned AR placed reliance on the following decisions to support his contentions that various Courts and various benches of the Tribunal have consistently held that pro-rata deduction can be granted with reference to profits of area/ residential unit(s) which qualifies for deduction under section 80IB(10) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 1349 of 2007 dated 10.10.2012 for grant of relief under Section 80IB(10) of the Act on a proportionate basis, by following the decision of the Bombay High Court reported in [2011] 333 ITR 289 (CIT Vs. Brahma Associates). Thus applying the decision of this Court in T.C.Nos.1348 and 1349 of 2007 dated 10.10.2012, we hold that the assessee is entitled to succeed both on the principle of proportionality as well as by reason of the construction on the meaning of the expression "housing project" as referring to construction of any building and the wordings in Section 80IB(10) of the Act. In the circumstances, we hold that the mere fact that one of the blocks have units exceeding built-up area of 1500 sq.ft, per se, would not result in nullifying the claim of the assessee for the entire projects. Consequently, in respect of each of the blocks, the assessee is entitled to have the benefit of deduction in respect of residential units satisfying the requirement under Section 80IB(10)(c) of the Act. In so holding, we also agree with the decision of the Bombay High Court reported in [2012] 206 TAXMAN 584 (CIT v. Vandana Properties), which was decided by the Bombay High Court on similar line ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profits and gains of undertaking developing and constructing approved housing projects, in the absence of restrictive covenant under sub- Section (10) of Section 80-IB, we do not find any justifiable ground to hold that on the mere fact of some of the units having the built-up area exceeding the condition specified under clause (c), the claim for deduction would stand rejected on the entire project. As pointed out in the decision of the Bombay High Court reported in [2011] 333 ITR 289 CIT v. BRAHMA ASSOCIATES, with zones classification permitting commercial establishment in residential flats too, once the local authorities approved the project with or without the commercial use as permitted under the Rules, the project approved is eligible for deduction under Section 80IB(10). The fact that the housing project has residential flats and commercial user, by itself, cannot, in any way, stand in the way of granting deduction. The restriction under Section 80IB(10)(c) cannot be construed as a negative condition to deny the benefit to an assessee, when the approved project has residential units of more than 1500 sq. ft. The idea of prescribing such restriction is to encourage constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. The assessing officer, however, denied deduction on the ground that the size of the plot in relation to Building E did not exceed the prescribed area of 1 acre and therefore, the assessee was not eligible for deduction. The Bombay High Court, approving the order of the Tribunal held that the plot of land may have other housing projects, which may not be eligible for deduction under section 80IB(10) of the Act; nevertheless, the deduction will be admissible on that part of the housing project which is eligible for deduction under that section. It will, thus, kindly be appreciated that the aforesaid decision, in fact, goes a step further and held that claim of deduction cannot be denied on portion of the housing project, even though the eligible portion was construction on plot of land less than the prescribed area. 12.8 In case of Bengal Ambuja Housing Development Ltd., Kolkata Bench of the Tribunal similarly held as under: "It is apparent from the perusal of s. 80-IB(10) that this section has been enacted with a view to provide incentive for businessmen to undertake construction of residential accommodation for smaller residential units and the deduction is intended to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project. In case residential area was 90% or more of the built up area, then, the entire project was eligible for deduction; (iii) However, in case commercial area is 10% or more of the built up area, but residential segment on a standalone basis satisfies the conditions of section 80-IB(10) of the Act, then, deduction would be admissible in respect of residential segment of the project. 12.10 In further appeal preferred by the Revenue against the aforesaid decision of the Special Bench of the Tribunal, the Bombay High Court has partly affirmed the decision in CIT v. Brahma Associates: 333 ITR 289 (Bom.). The Hon'ble Court held that restriction inserted with effect from 1.4.2005 as to permissible limit of commercial use in project is not retrospective and hence once housing project is approved by local authority having residential and commercial units, then prior to 1.4.2005 entire profits would be entitled to deduction under section 80-IB(10) of the Act. However, in the absence of claim made by the assessee in that behalf, no further relief could be allowed by the Court.The order of the Tribunals, in the aforesaid circumstances was approved. It will, thus, kindly be appreciated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 174 (Mum.) - ACIT v. Sheth Developers (P.) Ltd.: [2009] 33-SOT-277 (Mum) - Prakruti Constructions (P) Ltd V. ITO: ITA No. 2264 & 2265/ Mum/ 2011 - Delhi Iron and Steel Pvt. Ltd in ITA No. 2497/ Del/ 2007 12.14 The Learned AR thus pointed out that the Hon'ble High Courts and various benches of the Tribunal have consistently held that proportionate deduction can be allowed in respect of profits of residential units forming part of the housing project, which satisfies conditions prescribed in section 80IB(10) of the Act. 12.15 The Learned AR submitted further that once pro-rata deduction has been held to be admissible in respect of eligible area of the project, the location of the eligible residential units, within the larger housing project, is irrelevant. Being so, irrespective of the fact that some of the eligible units are located in the same tower or building or vicinity or are located at distant location, but is part of the larger approved housing project, pro-rata deduction is admissible in respect of profits of the eligible residential unit(s). 12.16 When we considered the above submission in view of the above cited decisions of the Hon'ble High Courts an the differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that since some of residential towers have residential units more than constructed area of 1000 sq. ft. or 1500 sq. ft. as the case may be, therefore conditions contained in clause (c) is violated as there is consolidated approval from local Authority. Therefore, the assessing officer has treated entire project as one housing project & has held that the condition contained in clause (c) is not fulfilled. Second ground for denial of deduction u/s 80IB (10) for all these project IS commercial area exceeded the limit prescribed under clause (d) of Section 80IB (10). Ld. AR has argued that the appellant has claimed deduction only from the profit of 'eligible housing projects' within the consolidated project. Ld. AR argued that the towers having residential unit with constructed area less than or equal to 1000 sq. ft. or 1500 sq. ft. as the case may be itself constitutes a housing project within the consolidated approval of Local Authority. He argued that these towers which are separate housing projects are in demarcated area, and having all amenities such as separate green area, separate road etc. and stand on there own. These towers have different section plan for its residential u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual aspect Ld. AR has argued that total commercial area in entire project is not conforming to the condition prior to 01-04-2010, but conforms to the condition in clause (d) after 01-04-2010. Further, he argued, that amendment w.e.f. 01-04-2010 is curative & clarificatory. I do not agree with the view of Ld. AR that the amendment in clause (d) is clarificatory & apply retrospectively. The amendment has been made prospectively w.e.f 01-04-2010 & not retrospectively. If the purpose of amendment was clarificatory then it should have been made retrospectively as it is substantive provision. Accordingly I do not agree with arguments of Ld. AR on this issue. Second arguments of Ld. AR is that the development right of commercial area has been transferred to other companies. The transfer is not a mere book entry but through memorandum of understanding & is duly intimated to local Authority which has not only been recognized but issued completion certificate in the name of the transferee Ld. AR argued that as commercial area was transferred, there it proves that the said commercial area was a separate unit & hence clause (d) of Section 80m (10) will not come as obstacle in providing dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of some of the stocks not satisfying the condition under Section 80lE (la) of the Act. 14. On the facts admitted by the Revenue in the projects "Agrini" and "Vajra" there are number of flats which are below 1500 sq. f]. and the relevant built-up area requirement is specified under Section 80lE (lO)(c) of the Income Tax Act Thus, the built-up area in some of the flats ill boin these projects are in excess of 1500 sq. ft., i.e., 32 flats in Agrini and only one flat in Vajra and that the assessee had not claimed any deduction on this. We hold that the Tribunal is not correct in its vie"w, that by reason of these U!1its being in excess of 1500 ·sq. ft., the entire claim of the assessee in respect of these two projects would stand rejected under Section 80lE (la) of the Income Tax Act. Thus, going by the definition of "housing project" under Explanation to Section 80HHBA of the ACT as referred to above as the construction of "any building" and the wordings in Section 80lB (la) of the Act. the question of rejection in entirety of the project on account of anyone of the blocks not complying with the condition:" does not arise. Even in the case .J.l each one of the blocks, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the Judgment of Kolkata Tribunal on this issue in the case of Bengal Ambuja Housing Development Ltd. in ITA No. 453 of 2006. Ld. AR further has relied on numerous decisions of honable IT AT in assessees favour holding that prorata deduction is available with respect to residential unit which satisfies the requirement of maximum constructed area where the other residential units violates the maximum built up area that the appellant's case is on much better footings where these eligible residential houses are identifiable cluster of Towers, having separate identified Land & Various facilities. These residential towers do not contain even a single residential unit which violates the maximum constructed area norm. Further, Ld. AR has argued the findings of surveys narrated by the assessing officer in the assessment order in no way negates the claim of deduction U/S 80IB (10). These correspondences are tax planning to strengthen the deduction u/s 80IB, which each assessee is entitled to do. There is no manipulation of facts to fulfil the condition Section 80IB (10). As I have held that these housing project is separate entities, the commercial area is not part of such eligible hou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Omaxe City, Sonepat 2. Omaxe City, Lucknow 3. Omax City, Jaipur 4. Omaxe City, Palwal 5.2.4 Firstly I would consider 5 projects mentioned in para 5.2.3, where the appellant has sold only residential plots. The Ld. AR has relied upon the decision of Sreevasta Real Estate Ltd. 9 ITR Trib 808 (IT A T, Chennai) & argued that housing project is not defined under the section 0IB, therefore even residential plot will be included in housing project. I have perused the decision of Sreevastsa Real Estate Ltd. Cited Supra. In that case the issue was whether there was approval of local authority. Facts of the case is as under :- "Now if we see sub-section (lO) of section 80-IB, it specifies approval by a local authority and who or what is such local authority is not defined anywhere. We cannot say that a Village Administrative Officer or a Deputy Director of Town Planning is not a local authority. Hence the question now boils down to whether the approval obtained by the assessee }vas for a housing project. The Assessing officer himself has admitted that the assessee had produced a certificate dated February 2, 2005 from the Village Administrative Officer, but he rejected it on a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (10). The Ld. AR has argued that the appellant has taken approval for each residential units for its sectioned construction plan and completion certificate for each villas are separately issued in favour of the appellant. Therefore, Ld. AR argued that assessing officer's claim that the approval is for plotted colony & there is no approval of construction of residential units is not proper. The total constructed area, No. of villas & Land area of different project is as under :- S.No. Projects Name and total area of the project. Components No. Of Towers/Plots/Villas/Area of Commercial Area of land in acres relatable to the component 1 2 3 4 5 1. Omaxe City Sonepat, (Total area 329.78 acres, including GH of 22.75 acres separately discussed at point no.3) Plots 1811 275.98 Vilas 445 19.48 2. Omaxe City Lucknow Uttarpradesh- (Total area 149.57 acres) Plots 1111 127.54 Villas Commercial 5.57 3. Omaxe City Palwal (Total area 102.46 acres) Plots Villas and G+2 Commercial 836 133 92.03 6.41 4.02 4. Omaxe City Jaipur (Total area 342.66 acres) Plots Villas GH Commercial 1952 487 Ld. AR argued that though there is a consoli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment was clarificatory then it should have been retrospectively as it is substantive provision. Accordingly I do not agree with arguments of Ld. AR on this issue. Second arguments of Ld. AR is that the development right of cornmercial area has been transferred to other companies. The transfer is not u were book entry but through memorandum of Association & is duly intimated to local Authority which has recognized the same. Ld. AR argued that as commercial area was transferred, there it proves that the said commercial area was a separate unit & hence clause (d) of Section 80IB (10) will not come as obstacle in providing deduction. 5:2.7 After considering the entire facts & circumstances of the case, I direct the assessing officer to allow profit on the villas whose constructed area is less than the prescribed limit as per condition (c) of Section 80IB UO) for all the four projects. The Ld. AR has- already submitted profit of housing project considering villas only before the assessing officer & during appellate authority in written submission which was forwarded to the assessing officer. Accordingly, this ground of appeal is partly allowed. 5.3 As a result, all the grounds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 of the appeal preferred by the Revenue revolving on the issue of allowability of the claimed deduction by the assessee under sec. 80IB (10) of the Act on the profit arising out of the sale of the housing project approved by the local authorities are accordingly rejected. 12.20 In result, the appeal is dismissed. 13. Assessee's Appeal: The learned CIT(A) upheld the order of the Assessing Officer to the extent of deduction claimed by the appellant on unbuilt housing sites i.e. the plots consisted in the housing projects mainly on the ground that if there is no construction on residential plots sold as such, the conditions specified in clause (a) and (c) w.r.t. commencement of construction and ceiling of built up area cannot be satisfied. The assessee filed the appeal against the order of CIT(A) to the extent, as per Grounds of Appeal. 13.1 The submissions of the Learned AR in support of the above grounds (reproduced in Para No. 7) of the appeal preferred by the assessee are as under: (i) Deduction under section 80IB(10) of the Act is allowed to an assessee in respect of profit derived from a "housing project" approved by the local authority. In the present case, all the proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion being defined in a related deduction provision under the same Chapter VIA, we feel, it would be more appropriate to go by the definition of the expression 'housing project', as available under Section 80HHBA for the purpose of understanding the said expression of 'housing project' under Section 80-IB of the Act. 31. As seen already, 'housing project' defined under Section 80HHBA refers not only building, but also road, bridge or other structure in any part of India………………………………………………….. ………………………………………… as defined in the Explanation, we hold that the housing project contemplated under Section 80-IB(10) refers construction of "any building" and widest possible meaning has to be given to the word "building" and cannot be restricted to and as referable to a housing project covering residential units only." (ii) It is worthwhile to mention here that a representation had been made by the Maharashtra Chamber of Housing Industry to the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g project, which is the heart and soul of allowance of deduction under section 80IB(10) of the Act. Further, in the absence of any specific bar in section 80IB(10) of the Act from claiming deduction in respect of profit derived from development and sale of housing sites/plots, there was no justifiable reason for the lower authorities to reject the claim of the Appellant, despite the fact that the project had, undisputedly been approved as residential/ housing project. (iv) The expression "housing project" in section 80IB(10) of the Act does not simply mean constructing built up residential/ dwelling units. On the other hand, developing and constructing a housing project involves various activities for providing housing facility, which primarily involves creation of infrastructure for housing, as has, undisputedly, been done by the assessee. (v) Ld. CIT(A) has totally misconstrued the expression "development and construction of housing project" in section 80IB(10) of the Act in an extremely narrow sense to "development and construction of residential unit" which, is neither legally unsustainable nor does the same accord with the legislative intent. He failed to appreciate that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Colonizer applies for licenses and approval of layout plan; - DTCP grants license, subject to certain conditions and approves layout plan as per norms prescribed in Development rules and regulations; - Once the project is approved, development and construction work is undertaken by the colonizer as under. - Land cleaning and leveling; - Demarcation of different constituents of the project such as roads, parks, residential, commercial, community, EWS, STP, etc.; - Provision of space for educational, medical, recreational and community sites; - Laying of water supply lines, drainage pipelines, electrical wiring, etc. - Construction and metalling of roads, paving of footpaths; - Construction of water tank, STP, electric sub-stations; - Development of parks and green area, turfing and plantation of trees; - Installation of street lights; - Demarcation, identification and numbering of individual housing sites; Once the aforesaid activities are carried out, the raw land gets converted into a developed housing project with the necessary infrastructural facilities, contended the Learned AR. It is thereafter, up to the developer to either undertake to construct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in that case was also disallowed by the Assessing Officer. Appeal was preferred by the assessee against the order. The learned CIT(A), vide order dated 01.08.2012, dismissed the appeal filed by the Appellant and held that deduction was not admissible qua profits derived from sale of developed plots. The learned CIT(A), despite observing that the Director of Town and Country Planning (in short "DTCP") had accorded approval for development of "residential colony", held that deduction under section 80IB(10) of the Act was admissible only for profit derived from development of those residential colonies where houses are also built by the developer. 13.3 On further appeal, the Tribunal vide order dated 30.07.2013 affirmed the order passed by the learned CIT(A). It is of utmost importance to note that the Tribunal, in para 8 agreed that the approval had been granted for development of housing project. Still, however, the Tribunal held that deduction was not admissible in respect of profit on sale of developed plots as construction of residential units thereon is must for claim of deduction. 13.4 Against the aforesaid order of the Tribunal, the assessee had filed appeal under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from such housing project if, - (a) Such undertaking has commenced or commences development and construction of the housing project on or after the Ist day of October, 1998 and completes such construction, - x x x x x x x x x x x x x x x x (b) The residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place." 15.1 In this regard, we also find support from the above cited decision of the Hon'ble Madhya Pradesh High Court in the case of Navrattan Techbuild (P) Ltd. (supra). In result, ground No.1 of the appeal preferred by the assessee is rejected and ground No.2 questioning the charging of interest under sec. 234B on the revised income of the assessee is consequential in nature, hence, does not need independent adjudication. 16. The appeal of the assessee is accordingly dismissed. 17. The Revenue in the case of Omaxe Buildhome (P) Ltd. in its appeal bearing ITA No. 4031/Del/2013 for the assessment year 2008-09 has questioned First Appellate Order on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B, Noida, holding that the condition has specified in clause (c) of the section 80IB(10) is not satisfied. He did not agree with the assessee that plot No. GH-03 Forms and Independent, distinct and separate project which satisfied all the conditions laid down in section 80IB(10) of the Act on standalone basis. The Assessing Officer was of the view that proportionate deduction cannot be allowed under sec. 80IB(10) of the Act. The Learned CIT(Appeals) has allowed the claimed deduction on proportionate basis on the residential units not exceeding the prescribed area. The Revenue has questioned this action of the Learned CIT(Appeals) in ground Nos. 1 and 2 before the ITAT. 18.2 The Assessing Officer also denied the deduction claimed by the assessee under sec. 80IB(10) of the Act in respect of group housing project "Omaxe Palm Greens", Sector-MU, Greater Noida holding that the conditions specified in clauses (c) and (d) of section 80IB(10) are not satisfied. The contention of the assessee was that while denying the claimed deduction, the Assessing Officer erred in not considering the amended law for the purpose of applying the limit as specified in conditions (d) of sec. 80IB(10); the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction under sec. 80IB in respect of profits derived from GH-03. These are undisputed facts by the Assessing Officer. 20.2 The objection of the Assessing Officer against the claimed deduction of the assessee relating to profit derived from group housing scheme GH-03 remained that entire project, namely, Omexe Greenwood" consisting of 33 towers is a single housing project and in Towers-13 to T-33, built up area of each residential unit is more than 100- sq. fts., therefore, condition (c) of Section 80IB(10) is not fulfilled. This objection of the Assessing Officer was based on his logic that single approval by the competent authority has been given. The submission of the assessee in this regard remained that the approval recognizes separate group housing schemes, namely, GH-01, GH-01 and GH-03 and in support, master plan, allotment of Noida dated 03.10.2006 were furnished. The Learned CIT(Appeals) meeting out the objections raised by the Assessing Officer and those explained by the assessee has come to the following findings: "4.8 Findings: I have considered the assessment order, written submission and arguments of Ld. AR. The assessing officer's main basis of disallowing deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan itself that OH-O 1, GH-02 & GH-03 are on separate pieces of Land. On the basis of above facts, whether GH-03 can be said as separate housing project as envisaged in Section 80IB (l0), and conditions contained in section 80IB have to satisfied separately for this project. It may be mentioned here that the local authority at the time of allotment of Land has already envisaged three types of housing schemes, GH-01, GH-02 & GH-03 on vast area of Land admeasuring 119020.12 square meters (29.41 acres) out of which Land measuring 8.4 acres is relatable to GH-03. Therefore, local authority has given a consolidated allotment order 3 Separate housing schemes namely GH-Ol, GH-02 & GH- 03 having different features. Ld. AR argued that accordingly all three Group housing scheme is separate entities having been approved in common approval. Common approval in no way dilutes the independent housing schemes as demarcated in approved plan & independent facilities. Now I will consider various Judicial pronouncement relied upon the Ld. AR & the assessing officer. The assessing officer has relied upon the decision of hen' able ITA T Chennai, in the case of Vishwas promoters Pvt. Ltd. & Chitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, we have already upheld the case of the assessee in TiC, Nos. 1348 and 1349 of2007 dated 10-10-2012 for grant of relief under Section 80lB (10) of the Act on a proportionate basis, by following the decision of the Bombay High Court in CIT v. Brahma Associates [20ll} 333 1TR 2891197 Taxman 459/9 taxmann.com 289. Thus applying the decision of this Court in 'LC. Nos. 1348 and 1349 of2007 dated 10-10-2012, we hold that the assessee is entitled to succeed both on the principle of proportionality as well as by reason of the construction on the meaning of the expression "housing project" as referring to construction of any building and the wordings in Section 80lB (10) of the Act. In the circumstances, we hold that the mere fact that one of the blocks have units exceeding built-up area of 1500 sq. ft. per se, would not result in nullifying the claim of the assessee for the entire projects. Consequently, in respect of each of the blocks, the assessee is entitled to have the benefit of deduction in respect of residential units satisfying the requirement under Section 80lB (lO)(c) of the Act. In so holding, we also agree with the decision of the Bombay High Court in CIT v. Vandan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfying the condition of Section 80IB (l0). Accordingly I direct the assessing officer to delete the addition. This ground of appeal is hereby allowed". 20.3 On perusal of orders of the authorities below, we find that before the first appellate authority, the assessee has been able to meet out the objections raised by the Assessing Officer against the claimed deduction under sec. 80IB(10) of the Act on the profits derived from group housing scheme GH-03 and in coming to the conclusion that group housing scheme GH-03 in housing project, Omexe Grandwood, Sector 93B, Noida constitutes a separate housing project despite a single approval by the competent authority in respect of group housing scheme GH-01, GH-02 and GH-03. The assessee has been able to establish that as per master plan and approval of the local authority that though the entire projects "Omexe Greenwood" consisting of 33 towers was a single housing projects but approval was recognizing separate group housing schemes, namely, GH-01, GH-02 and GH-03 and as per master plan, there was separate identifiable plots for group housing GH-01, GH-02 and GH-03 separated by roads. Each group housing scheme was having its own gree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p companies is not material for examining the allowability of deduction under sec. 80IB(10) of the Act. 23. The Learned AR on the other hand has reiterated submissions made on behalf of the assessee before the authorities below. He has adopted similar argument to support his contention advanced hereinabove against ground Nos. 1 and 2 that proportionate deduction under sec. 80IB(10) should be given in respect of the residential units having built up area of less than 1500 sq. fts. 23.1 Considering the above submission, we find that the Assessing Officer had denied the claimed deduction under sec. 80IB(10) of the Act to the extent of ₹ 16,82,15,090 in the project "Omaxe Palm Green", Sector MU, Greater Noida on the basis that claim of the assessee that it had carried out two projects on the plot of land and cannot be accepted as the lease deed dated 26.3.2007 between the assessee and Greater Noida Industrial Development Authority and the approved lay out plan shows that the authority has approved only one project. The Assessing Officer alleged that the assessee has artificially divided the entire project into two projects - (i) one consisting of flats eligible for deduction un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d & Satisfying all the conditions of section 80IB (l0) separately. Though there is a common approval of entire 50 acres of Land consisting of eligible housing project along with commercial area on 24.174 acres of Land. Both eligible & non eligible projects are separate by road & have separate common facilities. Ld. AR has relied upon various Judicial pronouncements on similar lines as in Omaxe Green Land, Sector 93B, Noida. I have considered entire facts & circumstances of the case. Present eligible projects is similar to Omaxe Green Land project. Therefore, I treat the eligible projects as a separate housing project on similar lines of Noida project. Second objection of the assessing officer that the commercial area of entire housing scheme is more than permissible limit as per clause( d) of Section 80IB (l0). Ld. AR has firstly argued that the eligible projects is a separate housing projects, therefore, eligible for deduction u/s 80IB (l0). Alternatively, Ld. AR has tried to argue that the commercial area are within the limit of amended permissible area as per clause (d) of Section 80IB (l0) introduced by finance Act, 2010. Ld. AR has made argued that amendment in clause (d) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred to other company and the said transfer is duly intimated to the local authority and that a transfer is not a mere book entry as claimed by the Assessing Officer was kept open by him in view of his above findings and treating the same as not relevant. We are agreeable to this finding of the Learned CIT(Appeals) especially when the assessee was found eligible to claim deduction under sec. 80IB(10) of the Act on the projects having residential units constructed within the prescribed limit of 1500 sq. fts. The same is upheld. The ground Nos. 3 to 5 are accordingly rejected. 24. In result, the appeal preferred by the Revenue is dismissed. 25. In the appeals for the remaining assessment years 2007-08 and 2009- 10 preferred by the Revenue, similar issues as raised in the grounds in the appeal for the assessment year 2008-09 have been raised. In the assessment year 2007-08, it is regarding allowability of deduction under sec. 80IB(10) claimed on the profit arising from the project GH-03 holding the same as separate housing project (Ground Nos. 1 and 2) and secondly holding that 24- towers in project Omaxe Palm Greens - Plot No. GH-02 - Sector MU, Greater Noida having each res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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