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TMI Blog2012 (7) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... h the residential project constructed at Kalyan. For the year under consideration the assessee company claimed deduction under section 80IB(1) of the Act wherein the whole amount of profit has been claimed as exempt income. However, the AO proceeded on the footing that the assessee has not fulfilled the conditions stipulated in the aforementioned section and hence it is not eligible for deduction under section 80IB of the Act. A survey action was carried out on 03.10.2006 at the project site at Kalyan. It has come to light that the assessee company not only built flats but also constructed row houses, each admeasuring more than 1500 sq.ft. In addition, the assessee company had constructed flats in such a way that two flats are joined togeth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B Wings, which are part of the same project and the fact that the project area is more than one acre, if all the three wings are considered together, has not been denied by the AO. Therefore, in the light of various decisions of the ITAT, referred to by the learned CIT(A), the AO was directed to allow proportionate deduction under section 80IB of the Act on residential units which fulfils the conditions prescribed in section 80IB of the Act. 4. In principle the Revenue is of the opinion that any deviation in the stipulation prescribed under section 80IB prohibits the assessee to claim deduction under section 80IB for the entire project. Therefore, it was contended that the CIT(A) was not justified in directing the AO to allow proportionat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Municipal Corporation Act, 1938 the terms of "City of Mumbai", "Suburbs", "Extended Suburbs of Mumbai" and "Corporation of Greater Mumbai (Brihan Mumbai)" have different meanings. Section 80IB(10) uses the expression "City of Mumbai", which expression is different from "Municipal Corporation of Greater Mumbai" and the limit of city of Mumbai ends on the central side at Mulund, i.e. Chunnabhatti, between Sion and Kurla. The expression City of Mumbai has come up for consideration before the Hon'ble Bombay High Court in the case of Shri Mavji Mulji Merchant vs. State of Maharashtra [1993](3) Bom.C.R. 220. The Hon'ble High Court discussed this issue elaborately and by analysing the definition "City of Mumbai", the project site can be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO nor the CIT(A) made detailed enquiry or obtained certificates from the Municipal Corporation of Greater Mumbai or the office of the PWD or from the Collectorate to understand the meaning of the expression "City of Mumbai" used in section 80IB(10) of the Act. In our considered opinion, the meaning of the expression "City of Mumbai" had to be correctly analysed as otherwise it is not possible to measure the distance from the municipal limit of the "City of Mumbai". In the interests of substantial justice we, therefore, set aside the matter to the file of the Assessing Officer. He is directed to reconsider the matter in accordance with law. Needless to observe that all the issues are left open before the AO and the assessee should be given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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