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TMI Blog2016 (4) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to one acre. In the first instance, PCNTDA has communicated that it had leased out 4000 sq. mtrs. of land to the Lessee of plot which was developed by the assessee. The layout plan which is annexed to the Lease Deed, perusal of the same reflects the plots were demarcated into bulk lands of various measurements and one portion of the land in the middle of the layout plan is allocated to the Lessee Mr. Patil. On one side of the said plot was written as 2500 + 1500 P.C. i.e. 4000 sq. mtrs. + a road has been demarcated next to it, which is 172 roads 40s, etc. The assessee before us has pointed out that only portion of the land measuring 4000 sq. mtrs. was allotted and the roads were developed by PCNTDA itself. Even the garden was developed by PCNTDA itself. Accordingly, we hold that where the land allocated to Mr. Patel was only 4000 sq. mtrs. and the balance land had been marked for the development of side road out of original demarcation for one acre, but after allocation of 4000 sq. mtrs. and demarcation of land for roads, total plot was not one acre. Where the unit measurement for land is to be recognized as square meter and the assessee has developed its housing project on a pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed ground of appeal No.2, in alternate, prorata claim of deduction under section 80IB(10) of the Act should be allowed with reference to eligible units. 4. Briefly, in the facts of the present case, the assessee for the year under consideration had filed return of income declaring total income of ₹ 9,43,080/-. The case of the assessee was picked up for scrutiny. The assessee for the year under consideration had shown income from two projects i.e. the first project namely Ishani Garden , under which, it has shown income at ₹ 9,43,080/-. Another project developed by the assessee was Eden Garden , situated at Bank Land No.2(part), Sector No.26, PCNT, Nigdi, Pune. The assessee from this project had declared income at ₹ 1,10,33,637/- and had claimed deduction under section 80IB(10) of the Act in respect of the said project. The Assessing Officer made a reference to the Valuation Officer, Solapur to verify the genuineness of deduction claimed under section 80IB(10) of the Act. The Valuation Officer had submitted his report on 19.12.2008, in which he reported that the size of plot of Eden Garden was 4000 sq. mtrs., which was below one acre. Further, the built up are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond contention of the assessee that earlier area was measured as Hectares and Are and the precision of measurement in area up to 2 digits, was also not accepted by the Assessing Officer as under section 80IB(10)(b) of the Act, the project is on size of plot which has a minimum area of one acre. The Assessing Officer thus, held as under:- 7. This contention of the assessee also cannot be accepted for the reasons that, section 80IB(10) of the I.T. Act , 1961 specifically mentioned the word Acre . The section 80IB(10)(b) reads as under: The project is one the size of land which has a minimum area of one Acre. The valuation officer, who is a authority in this matter, specifically mentioned that The gross area of the plot as per the layout sanctioned by the PCMC is 4000 sq. mtr. The plot area is less than one Acre . Therefore area of plot of 4000 Sq. mtr. is cannot be equal to 1 Acre, it is below the 1 Acre only. The area of 1 Acre is equivalent to 4048 sq. mtr. and the size of the assessee s plot of land is 4000 sq. mtr. only which is clearly below 1 Acre. 5. In respect of twin bungalow No.1 also, the Assessing Officer observed that the maximum built up are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re under section 80IB(10) of the Act and in such circumstances, the Assessing Officer had no option but to give full effect to the express provisions of the law. The CIT(A) further observed that it was not in dispute that one acre of land equals 4046.9 sq. mtrs. and not 4000 sq. mtrs., which was the size of plot of land in assessee s case. Further, the CIT(A) on perusal of the Act, 1976 observed that there was no support for the assessee s contention that the area of plot must be rounded off to nearest second decimal place, yielding, in the assessee s case, 4000 sq. mtrs., as the metric conversion of one acre. Further, reference was made to the decision of Pune Bench of Tribunal in MD Associates, which was referred to by the assessee and it was found that the Tribunal too had mentioned in para 4 of that judgment that one acre of land equals to 4046.9 sq. mtrs. The CIT(A) further adjudicated the issue of size of row houses and the requirement of section 80IB(10) of the Act in this regard and denied the claim of assessee under section 80IB(10) of the Act on both counts. 8. The assessee is in appeal against the order of CIT(A). 9. The learned Authorized Representative for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plot of land referred to Guntas. He further stressed that where two views are possible, then the view which is favourable to the assessee should be applied. Reference was made to the ratio laid down in CIT Vs. Vandana Properties (2013) in 353 ITR 36 (Bom), wherein the Hon ble Bombay High Court held that on one acre of plot, two projects were possible. Further, reliance was placed on the ratio laid down by Pune Bench of Tribunal in consolidated order with lead order in M/s. Baba Promoters Developers Vs. ITO in ITA No.629/PN/2009, relating to assessment year 2004 -05, order dated 29.02.2012. Further, the learned Authorized Representative for the assessee made submissions with regard to built up area of row house and the claim of the assessee and also an alternate plea of prorata deduction under section 80IB(10) of the Act. 10. The learned Departmental Representative for the Revenue has placed on record written submissions and pointed out that the report referred to by the assessee was made with the purpose to make data base of land records, which nowhere defines acre, hence, reliance on the said report was not warranted. Further, reference was made to the said report in para 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or ignorance of law and he further submitted that the popular connotation was to be applied, only if information was not available in public domain. Further, he submitted that the case laws were dealt by the CIT(A) and it was also pointed out that the assessee has not provided any amenities and in case the plot area was one acre or more, then he was bound to provide area for amenities. Further submissions were made with respect to built up area of row house No.1. 11. We have heard the rival contentions and perused the record. The issue arising in the present appeal before us is with regard to the claim of deduction under section 80IB(10) of the Act. The said section lays down certain conditions, which have to be fulfilled by the assessee, while claiming deduction under section 80IB(10) of the Act. One such condition is clause (b) in the said section, under which it is stipulated that the project on the size of plot of land which has a minimum area of one acre. The requirement of section 80IB(10)(b) of the Act is to develop and construct the housing project on a plot area which has minimum area of one acre in order to be eligible for claiming deduction under section 80IB(10) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the said ratio, we hold that in order to avail the deduction equivalent to 100% on profits of an undertaking, which is engaged in development and construction of a housing project, the conditions laid down in section 80IB(10) of the Act have to be fulfilled. The aim of introduction of section 80IB(10) of the Act was to boost stock of houses for lower and middle income group and where any enactment specifies certain conditions, then the conditions laid therein, have to be fulfilled. 13. The issue before us is the connotation of meaning of one acre i.e. the size of plot of land on which the housing project has to be developed in order to avail the deduction under section 80IB(10) of the Act. As per clause (b) to section 80IB(10) of the Act, the requirement that the plot of land should have a minimum area of one acre, which in other terms, mean that where a person does not fulfill the conditions of the plot of land having minimum area of one acre, then the profits of said undertaking arising from developing and constructing such a housing project, is not entitled to claim the deduction under section 80IB(10) of the Act. 14. In the facts of the present case before us, PCNTDA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed by one acre. The assessee in this regard contends that impliedly the lessor of the plot refers to 4000 sq. mtrs. as one acre. The lessor of the plot in this case was PCNTDA. The assessee has filed before us a summary of contentions made during the course of hearing, which reads as under:- Summary of Contentions A. On the Plot Area 1. It is undisputed that the area of the plot is said to be 4000sq. mts. in the lease agreement, the development agreement and is the start point for area calculation in the sanctioned plan. 2. What is disputed is the connotation of one acre as found in section 80IB(0). In this regard, we have to contend as under: a) The plan accompanying the lease and development agreement refers to the plot as 4000 sq meter suffixed by (one acre). Impliedly, the Lessor of the plot also refers to 4000 sq meter as one acre. b) The report from the AO only brings home that the plot leased out is defined as 4000 sq meter in the agreement. It remains silent on the notings on the plan. c) The concept of acre is understood differently in different states in the country as has been pointed out in the Technical Report prepared at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z roads plus O.S. etc). The area under amenity spaces has been considered as a part of plot area in numerous decisions of the Hon. Tribunal led by the decision in Bunty Builders V ITO(56 DTR). B. On the B uilt up area 1. The plan has been sanctioned on 27.11.2003. The definition of built up area has been brought by Finance Act, 2004 w.e.f. 01.04.2005. 2. For the plans sanctioned prior to 01.04.2005, built up area has to seen as understood as by the sanctioning authority as held in DS Kulkarni Developers Ltd (Page 38 of Case Law Compilation) and GK Builders (Page 79 of Case Law Compilation). As per the plans in the present case, the built .up area of Row House No. 1 is 138.61 Sq. Mts. 3. The amended definition does not apply to plans approved to 1.4.2005 as held by Supreme Court in Sarkar Builders 119 DTR 241. 16. The contentions of the assessee has been countered by the learned Departmental Representative for the Revenue, who in turn, has filed the submissions and has objected to the submissions made by the learned Authorized Representative for the assessee, which reads as under:- Written Submissions by the Revenue In the case of Virag D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as applicable in the state of Jharkhand and as mentioned at line no.4 of page no. 52 of this report. Such partial and out of context reliance on the report cannot be and should not be accepted by the Hon'ble Court. c) Though the report mention about various area units in practice and land record of various states but does not find mention of the units/conversion factors prevalent in the state of Maharashtra. Hence this report is of no relevance for the case under consideration. In view of the above the reliance placed by the AR on this report is totally misplaced and therefore need not be considered. 2. The Standards of Weights and Measures Act. 1976 :The AR has further taken support of this Act to justify his claim. It was stated by him that the Income-Tax Act has wrongly mentioned the word acre instead of Sq.mtrs in section 80IB. This argument is devoid of any merits for the following reasons: a) In this regard it is relevant to mention here that the object of this The Standards of Weights and Measures Act, 1976 is very clear i.e. 'to establish standards of weights and measures, to regulate trade or commerce in weights, measures and other goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l expert on the subject also made it very clear that the plot under consideration is less than 1 acre. c) The Government of Maharashtra nowhere defines an acre is equal to 4000 Sq.mtrs. d) As per the official website of the BOMBAY HIGH COURT, 1 acre has been taken as 4067.23 Sq.metres. The document down loaded from the website of the BOMBAY HIGH COURT is enclosed as annexure I (page 1-3). e) As per landsofmaharashtra.com, the international acre as defined in 1958 is exactly 4,046.8564224Sq.mtrs. The copy of printout taken from the website is enclosed as an annexure-II (page4-5). f) Even as per Wikipedia 1 acre = 4046.856 Sq.mtrs. The print out of the definition taken from the Wikipedia is enclosed as an annexure- III (page 6-9) g) Even as per oxford dictionary an acre is defined as a unit for measuring an area of land which is equal to 4840 square yards or about 4050 square metres (http://www.oxforddictionaries.com/definition/learner/acre). h) Also, as per the letter dated 03/09/2014 received from PCNTDA (page 12-14 of paper book submitted by the department on 05/11/2014) it is clarified that the land is measured by the PCNTDA in Sq.mtrs and acre is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative for the Revenue. In reply, the Assessing Officer obtained a measuremen t report from PCNTDA along with the layout plan of the land in which it was intimated that the land available with the assessee was only 4000 sq. mtrs. The copy of the said report is available on record. Thereafter, Paper Book was filed by the Revenue authorities, in which the certified true copy of original Lease Deed dated 02.03.1991 along with annexure was also filed. Further, it was intimated that the said document was registered with the Sub-Registrar, Haveli No.II, Pune. The perusal of copy of Lease Deed, reflects that the area allotted to the assessee to be 2500 + 1500 P.C. area for development is equal to 4000 .0 sq. mtrs. Vide the said letter, it was also intimated that the units of measurement used by PCNTDA were in sq. mtrs., but in the demarcated area in the plan, bulk land was written as one acre, two acres and three acres. Further, reference was made to the letter of PCNTDA dated 03.09.2014, under which, they have replied that they have used the land measurements in sq. mtrs. Another communication was sent to PCNTDA to enquire what is the area acre equivalent of sq. mtrs. valued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the said table of conversion reflects that in different States, different area units are prevalent. Further, the said table points out that one acre is equal to 40 Guntas and one Gunta is equal to 100 sq. mtrs. and in some areas, one acre is equal to 121 sq. yds. In the said list itself, one acre is shown to be equal to 4046.94 sq. mtrs. in the State of Jharkhand. The list also provides that 100 sq. mtrs. is equal to 1 Are and one Hectare is equal to 100M x 100M = 10000 sq. mtrs. The perusal of the report reflects that though various area units which are prevalent in different States are mentioned in the table therein, but there is no mention of units / conversion factors prevalent in the State of Maharashtra. 20. The learned Departmental Representative for the Revenue has placed reliance on the Land Measurement Units prevalent in the State of Maharashtra, which is placed on record. The said details were downloaded from the website of Hon ble Bombay High Court by the learned Departmental Representative for the Revenue. In order to understand the connotation of one acre and the equivalent sq. mtrs. prevalent in the State of Maharashtra, the land measurement units are provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee talks of area of plot as 4000 sq. mtrs. The information was received from PCNTDA, which confirmed that as a unit of measurement, the land was measured in square meters and not in acres. The PCNTDA also confirmed that the area of 4000 sq. mtrs. i.e. 2500 + 1500 P.C. was allotted to the Lessee with whom the assessee had entered into Development Agreement. Further, the Assessing Officer during the course of assessment proceedings had received a report from the Valuation Officer, in which he confirmed that the area of the plot on which the development had taken place was only 4000 sq. mtrs. As referred to by us in the paras hereinabove, even the sanctioned plan talks of area of 4000 sq. mtrs. One of the contentions raised by the assessee before us was that in case the area of plot was exceeding one acre, certain portion of the land was left for amenities. Admittedly, in the facts of the assessee as confirmed by the learned Authorized Representative for the assessee also, no land was left for amenities, meaning thereby the same did not conform to measurement of one acre. 25. Another aspect to be taken note in the present case is that 7/12 extract also talks of unit of measuremen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land allocated to Mr. Patel was only 4000 sq. mtrs. and the balance land had been marked for the development of side road out of original demarcation for one acre, but after allocation of 4000 sq. mtrs. and demarcation of land for roads, total plot was not one acre. Where the unit measurement for land is to be recognized as square meter and the assessee has developed its housing project on a plot of land measuring 4000 sq. mtrs., we find no merit in the claim of the assessee that it had fulfilled the conditions laid down in section 80IB(10) of the Act. Since the requirement of the Act is minimum area of one acre, which is equivalent to 4046.8726 sq. mtrs., the conditions laid down in section 80IB(10) of the Act are not fulfilled in the case of assessee and hence, it is not entitled to the said claim. Accordingly, we hold so. 28. Further, submissions have been made by both the Authorized Representatives vis- -vis the claim of the assessee with regard to the area of row house No.1. In view of the assessee having not been fulfilled the first condition of minimum area of land and being not entitled to the claim of deduction under section 80IB(10) of the Act, we do not address the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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