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TMI Blog2012 (10) TMI 1140X X X X Extracts X X X X X X X X Extracts X X X X ..... fourth case also, even though there are multiple entries, interiors have been merged into single unit. Thus these residential units have more than the maximum built up area specified u/s.80IB(10). According to the Assessing Officer, legislative intendment for giving tax exemption u/s. 80IB(10) was to increase of stock of house for low and middle income group. This legislative intendment cannot be allowed to be defeated by resorting to separate agreements in respect of more than one unit of housing which is being used as one housing unit and therefore it is held that one of the conditions relating to maximum built up area per residential unit has been violated in the case of the assessee. Section 80IB(10) contains conditions pre- requisite which are to be fulfilled for allowing deduction u/s.80IB(10). These conditions are cumulative. According to the Assessing Officer even if one of the conditions is violated, the assessee would not be entitled to deduction u/s.80IB. In view of this, two units of dwelling units were clubbed into one unit where the built up area in the combined units exceeded 1500 sq.ft. It was clear that the condition for deduction u/s.80IB have been violated. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the eligible units.. Particularly, the Tribunal also considered the decision of the Hon'ble Bombay High Court in the case of Brahma Associates (Supra) and held that the same does not envisage denial of proportionate deduction in such circumstances. The relevant discussion, as contained in paragraphs 8 9 of the order of the Tribunal in the case of M/s Ekta Housing Pvt. Ltd. reads as under : viii) We now examine the applicability of the decision of the Hon'ble Bombay High Court in Brahma Associates (supra) to the facts of this case. On a careful reading of this judgment, we find that nowhere it is stated that proportionate deduction should not be allowed, in case certain residential units had built up area in excess of prescribed limit of 1,000 sq.ft. In fact, this issue was not before the Hon'ble Jurisdictional High Court. The questions before the Hon'ble Jurisdictional High Court were different and, hence the judgment cannot be said to be on this issue. The only issue before the High Court is when there is a commercial element in a residential project, will be assessee be denied the entire exemption. In this case, the Hon'ble High Court has observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , while holding that in law, the assessee was entitled to section 80IB(10) deduction on the profits of the entire project, in the facts of the present case, since the assessee has not challenged the decision of the Tribunal, we are not inclined to disturb to disturb the decision of the Tribunal in restricting the section 80IB(10) deduction only in respect of the profits derived from 15 residential buildings. ix) Thus, it could be seen that the Hon'ble High Court do not approve the findings of the Tribunal that a residential building with commercial user up to 10% of the plot area would alone be entitled to deduction under section 80IB(10). The issue that, in case where certain residential units are of a built up area in excess of the prescribed limit of 1,000 sq.ft. in residential project, this would result in the entire exemption being lost, or whether the assessee would be entitled to a proportionate deduction was not before the High Court. Thus, in our opinion, the decision of Hon'ble Jurisdictional High Court in Brahma Associates (supra) does not come to the rescue of the Revenue. 22. Following the aforesaid precedent, we, therefore, hold that merely because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Kruti Constructions in ITA.No.1031, 1032 and 1033/PN/2011, the Tribunal has decided similar issue by observing as under: 9. We have carefully considered the rival submissions. Quite clearly, for availing the benefit envisaged u/s.80IB(10) of the Act, certain conditions have been prescribed thereof. In the present case, the only controversy is in respect of clause (c) of section 80IB(10) of the Act which prescribes that the built up area of the residential unit should not exceed 1500 sq.ft. where such residential unit is situated in the city of Pune. In the present case, the project of the assessee has 83 different flats out of which it was noticed that Flat Nos.602, 702 in B-Wing and Flat Nos.202, 203 in C-Wing, were combined into two bigger units and in this manner the 'built- up' area of the bigger units exceeded 1500 sq.ft. The assertions of the assessee were to the effect that the merger of these units took place after the sale and handing over of possession of the flats to the buyers by the assessee. The CIT(A) has accepted the plea of the assessee for the reasons we have noted earlier in this order. 10. Factually speaking, it is emerging from the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticularly when these changes in the flats were made after handing over possession of flats to the flat holders. In these circumstances, merely because four out of 83 purchasers of flats in four blocks internally joined the flats purchased by them into one single unit, which exceeded 1500 sq.ft. of built up area, it cannot be said that the appellant is not entitled to the deduction at all in respect of the profits derived from the project. In this context, reference can be made to the recent decision of ITAT, Mumbai, in the case of G.V. Corporation reported in 133 TTJ 178, wherein it is held as under: It was not also the case of the Commissioner that each flat in the housing projects undertaken by the assessee could not have been used as an independent or self-contained residential unit not exceeding 1,000 square feet of built-up area and that there would be a complete, habitable residential unit only if two or more flats were jointed with each other, which would ultimately exceed 1,000 square feet of built-up area. In such a situation, merely because 9 out of 140 purchases desired to join the flats purchased by them into one single unit, which exceeded 1,000 square feet of b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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