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TMI Blog2016 (11) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... nces and in order to meet the ends of justice, we are of the view that the issue needs to be looked into at the level of Assessing Officer, who shall direct the DVO to measure each of 16 flats which, according to him exceeds area of 1500 sq.ft. The Assessing Officer shall also consider the valuation report submitted by the assessee in this regard and after providing reasonable opportunity of hearing to the assessee decide the issue in accordance with law. The grounds of appeal raised by the assessee are thus, allowed for statistical purposes. - ITA No.1839/PN/2014 - - - Dated:- 30-9-2016 - MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM For The Assessee: Shri Pramod Shingte For The Revenue: Shri Hitendra Ninawe ORDER PER SUSHMA CHOWLA, JM: The cross appeals filed by the assessee and Revenue are against order of CIT(A)-II, Pune, dated 13.08.2014 relating to assessment year 2010-11 against the order passed under section 143(3) of the Income Tax Act, 1961 (in short the Act ). 2. The cross appeals filed by the assessee and Revenue were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udit report in this regard and the claim of assessee was that it had complied with all the conditions necessary in order to avail the said deduction under section 80IB(10) of the Act. The Assessing Officer in order to verify the claim made by the assessee, made reference to the Government Approved Valuer vide letter dated 27.02.2013. On such reference, necessary verification was carried out by the DVO and he submitted his report vide letter dated 21.03.2013. He reported that the area of plot of land was 5.7410 acres and the date of commencement of project was 12.07.2005, which was completed on 31.03.2011. He further reported that out of approved residential buildings A to F, building D was not completed and only parking slab was completed and the work was stopped. The assessee had constructed 248 residential units and 5 commercial establishments. The DVO reported that in respect of 16 flats in different buildings, the built up area exceeded 1500 sq. ft. The Assessing Officer noted that in order to claim the deduction under section 80IB(10) of the Act, one of the conditions laid down is that the built up area of residential unit should not exceed 1500 sq. ft. The definition of built ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing 16 flats exceeding the area of 1500 sq.ft. as per section 80IB(14)(a) of the Act is liable to be upheld. However, the second claim of assessee of prorata deduction under section 80IB(10) of the Act in respect of those units which satisfy the conditions stipulated under section 80IB(10) of the Act was allowed by the CIT(A), in turn relying on different decisions of Tribunal and the ratio laid down by the Hon ble Madras High Court in Viswas Promoters Pvt. Ltd. Vs. ACIT (2013) 255 CTR 149 (Mad). 8. The Revenue is in appeal against the order of CIT(A) in allowing the prorata deduction, whereas the assessee is in appeal against the denial of deduction under section 80IB(10) of the Act on 16 flats on the premise that the area of said flats exceeded 1500 sq.ft. 9. Shri Pramod Shingte appeared on behalf of the assessee and Shri Hitendra Ninawe appeared on behalf of the Revenue and put forward their contentions. 10. We have heard the rival contentions and perused the record. First, we shall take up the appeal of Revenue, which is against the order of CIT(A) in allowing the prorata deduction under section 80IB(10) of the Act on such flats which complied with the conditions laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id plea on the ground that the assessee is not entitled to a proportionate deduction under Section 80-IB(10) of the Act. 21. On this aspect, we find that the Mumbai Bench of the Tribunal in the case of M/s Ekta Housing Pvt. Ltd., ITA No.3649/Mum/2009 dated 20.05.2011 has upheld the plea of the assessee for a proportionate deduction under Section 80-IB(10) of the Act where some of the residential units in the project violated the condition contained in Section 80-IB(10)(c) of the Act. The Mumbai Bench after noticing the precedents in the case of - i) ITO vs. Air Developers, 25 DTR 287 (Nag.); ii) DCIT vs. Brigade Enterprises Pvt. Ltd., 14 DTR 371 (Bang.); iii) ACIT vs. Sheth Developers P. Ltd., 33 SOT 277 (Mum.); iv) Bengal Ambuja Housing Development Ltd. vs. DCIT; v) SJR Builders vs. ACIT, 3 ITR 569 (Mum.) held that the assessee would not loose the exemption under Section 80-IB(10) in entirety where some of the residential units wings had a built-up area in excess of the limit prescribed in clause (c) of Section 80-IB(10) but, it would be entitled to proportionate deduction under Section 80-IB(10) of the Act with regard to the profits ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, it was not open to the Tribunal to hold that prior to 01.04.2005, projects having commercial user upto 10% of the plot area alone would be eligible for Section 80-IB(10) deduction. 28. In the present case, though the commercial user is more than 10% of the plot area, the Tribunal has allowed Section 80-IB(10) deduction in respect of 15 residential buildings on the ground that the profits from these exclusively residential buildings could be determined on stand along basis. In our opinion, that would not be proper,because Section 80-IB(10) allows deduction to the entire project approved by the local authority and not to a part of the project. If the conditions set out in Section 80- IB(10) are satisfied, then deduction is allowable on the entire project approved by the local authority and there is no question of allowing deduction to part of the project. In the present case, the commercial user is allowed in accordance with the DC Rules and hence the assessee was entitled to Section 80-IB(10) deduction on the entire project approved by the local authority. However, the assessee has not challenged the decision of the Tribunal in restricting the deduction to a part of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue, similar to what has been argued before us, to the effect that in the absence of any contemplation under Section 80-IB(10) of the Act for proportionate relief on partial compliance, section cannot be interpreted to granted pro rata relief. The aforesaid argument of the Revenue has been negated by the Hon ble Madras High Court and therefore the claim of the assessee for proportionate deduction under Section 80-IB(10) of the Act cannot be denied. 11. Further, the Calcutta Bench of the Tribunal in Bengal Ambuja Housing Development Ltd. vs. DCIT in ITA No.1595/Kol/2005 relating to assessment year 2002-03, order dated 24.03.2006 has laid down similar proposition. 12. The issue arising in the present appeal is thus, squarely covered by different decisions of Tribunal and even by the Hon ble Madras High Court in Viswas Promoters Pvt. Ltd. Vs. ACIT (supra) and hence, the assessee is entitled to prorata deduction of the completed flats, which fulfill the conditions laid down in section 80IB(10) of the Act. Upholding the order of CIT(A), we dismiss the grounds of appeal raised by the Revenue. 13. Now, coming to the appeal filed by the assessee, wherein the assessee is aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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