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TMI Blog2017 (11) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that that Shri Ruparel has observed that as a general trend prevalent in the industry, the architectural projections in the form of features, chajjas, hollow boxes, solid boxes for enhancing the aesthetics of the building which is also allowed by the local authorities are not counted by any Corporation in the built-up area calculations and the projections was not utilizable from inside and neither it was added to the carpet area nor it was in habitable nature. The findings namely that the projections are external projections, it is for the purpose of aesthetic beauty of the building, are not habitable and not utilizable from inside and all allowed by the Corporation and not considered by them for the purpose of calculating the area of the flat, has not been controverted by the Revenue. In such a situation, we are of the view that the deduction u/s 80IB(10) of the Act cannot be denied to the assessee. We therefore direct the AO to allow the deduction on the entire project. Thus the grounds of the assessee are allowed. As far as Revenue’s grievance with respect to granting of prorata data we find that Ld.CIT(A) after considering the decisions cited in his order has noted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e built up area of the fiats. 3. The learned CIT(A) ought to have accepted the appellant's contentions and should have allowed deduction u/s 80IB(10) in respect of the entire project 'Sun Orbit. 3. On the other hand, the grounds raised by the Revenue in appeal No.1015/PUN/2015 reads as under: 1. W h et h e r o n th e f a c t s a nd in t h e circ um s t a n ces o f t h e ca s e and in l aw, th e l ea rn e d Commission e r of In c om e t ax ( App ea ls) e rr e d in p a rtl y a llowing th e appeal of th e a ss e s see ignoring t h e findin g s gi v en in th e assessment order which w as b a sed on facts and whi c h was also b ase d on the report of the Govt. Approv e d V a luer . 2. Wh e th e r o n th e facts and in th e c ircumstanc e s of th e ca s e and in l aw , th e l ea rn e d Commission e r of In c om e tax (App ea l s ) e rr e d in holdin g t h at th e as s e ss ee is e ligible for d e du c ti o n u/s.801B(10) w i t hou t a ppr e ci a tin g th a t a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80IB(10) are fulfilled by the assessee, assessee is not eligible for deduction. He accordingly denied the claim of deduction of ₹ 27,90,33,915/- u/s 80IB(10) of the Act. Aggrieved by the order of AO, assessee carried the matter before Ld CIT(A), who granted partial relief to the assessee by observing as under: 3.7 I have cons i dered the s ubmi ss i o n m ade by th e a p pe ll a nt and p erused mate ri al o n record . Th e only i ss u e con t es t ed relates to the d i sa l lo w a n ce of the claim of deduc ti on u / s 80 I B(10) a m o u nt i ng to Rs . 27 , 90 . 33 , 9 1 5 /- . Th e fa ct of the case indicate that the appellant com p any who a r e bu il ders and deve l ope r s u nde r took t he reside n tial pro j ec t at S . No. 12/5/ 1 B , 12 / 6/2 , 1A , 1B 1C at W adgao n B u dru k , P u ne in t h e na m e of ' S u n O r b i t . T h e s i ze o f th e p lo t o n wh i ch t h e said pro j ect was bui lt was 1 3400 sq . mt rs . o r 1, 64 , 689 sq . f t . and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l o t area be ing 13 . 40 0 sq . mtrs i . e . 3 . 31 ac r es w hi ch i s m o r e th a n 1 ac r e . Furth e r, th e appel l an t compa ny has a lso complied w i th the cond i t i o n s as pe r sec ti o n 80IB ( 1 0 ) ( d ) i . e . th e bu i l t - u p area o f shops not t o exceed 3% of the aggregate bu i lt- u p area of t he h ousi n g p r o j ec t or 5000 sq . ft . w hi chever i s h i ghe r and t he a r ea o f t he shops i s 198 . 07 s q . mtrs or 2 1 32 . 03 sq . ft . wh i c h is less t ha n 50 0 0 sq . f t . Mo r eove r , t he c o nditi o ns of s ect i on 80IB ( 1 0 )( e ) a n d ( f ) w e r e a l so f o un d by th e va lu er to h ave b ee n complied by the appellant. Thus, the valuer Shri Lele found the appellant to have fulfilled the conditions as per section 80IB(10). The valuer, however, had reservations only with respect to the provisions contained in clause (c) of section 80IB(10) with respect to area of the residential units wherein the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V alue r Shr i Nitin Lele, dated 18.01.2013 . On perusal of the report submitted by S hri Lele i t i s noticed that the Valuer has ta k en the thickness of the wall at 18 as a t s ix p la c e s the wall thickness was 1 8 , whereas the appellant has considered t h e wall t hickness of 6 and the sanct i oned plan also showed wall thickness at 6 ( 15 0 m m); based upon which the builtup area of the 10 units worked out to be eac h of 1508.50 sq.ft. The appellant s architect Shri Prakash Kulkarni in its report has noticed that Shr i L ele cons i dered the e xtern a l w a ll w hi c h at few p l aces h a s 18 t h i c k , wh i ch i s in actua l a doub l e wall t aken as an arch it ectura l pro j ectio n fo r aesthetic purpose . The arch i tect Shr i Kulka r ni af t er i nspect i ng the said 10 f l a t s o f Building ' B ' worked out the built-up a r ea of 1493.61 sq. ft. I t has a l so bee n pointed out that the exte r nal walls for a ll the flats i n the entire build in g are 6 thick though the projections near th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h at t he p ar ti cu l a r p r o j ec ti o n is a lso not ut ili z a ble from inside and ne it he r it is added to the carpet area n or i t was o f habitable nature and , therefo r e, such p r o j ections at a f ew places canno t b e c onstrued as thickness of the wa l l . Thus , t he materia l b r ought on r eco r d p rima f ac i e do not i nd i cate the a r c h itec t ural p r o j ect i on t o be in cludable i n t he bu ilt - up a re a of the a f oresa id flats as t he same i s see n to be outside the wa ll t hi c kn es s. However, Shr i Lele in i ts seco n d r epo r t da t ed 18 . 03 . 20 1 3 and a l so in the statement recorded during the cross examination done by the appellant during the assessment proceedings is seen to be not agreeable to the views taken by the architect and valuer appointed by the appellant and for his own reasons rejected the contention raised by them and has also gone to the extent of categorizing the project as unauthorized . However , it is noticed that the l ocal authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i zed technically qualified person specifically for such issues ma tt ers i ts findings certainly carries more weight hence, the contention raised cannot be disregarded. However, in the present case as reports of three Govt. Approved Valuers are available the issue has become debatable one. 3.10. So far as the additional g r o u nd of appeal ra i sed by the appe l lan t on without prejudice that the claim of ded u ct i on u/s 80IB ( 10) shall be tenab l e o n pro - rat a basis in respect of those balance units of the project buildings which sat i sfie s t h e conditions st i pulated u/s 80 I B(10) do f i nds support of t he dec i s i ons of v ari o us Courts and Tribunals including Pune ITAT and reliance has bee n placed on a number of decisions which Includes the following: 1. DC I T vs. Brigade Enterprises Pvt . Ltd . , ( 20Q8) 1 19 TT J (Bang) 269 2. AIR Developers . ( supra) , ( 201 0) 122 I TD 1 25 (Nag) 3. S heh Developers Pvt . Ltd . 33 SOT 277 (Bom) 4. Runwal Multihousing Pvt . Ltd . Vs ACIT , ITA Nos . 1015 , 1016 1 017/PN/2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the detailed working of the calculation made by him in arriving at the conclusion of the size of the 10 flats being more than the stipulated area of 1500 sq. ft. He therefore submitted that since none of the area of the flats exceeded 1500 sq. ft. and since the project has been approved by the PMC authorities as Residential Project, the claim of deduction u/s 80IB(10) of the Act has to allowed in full. Without prejudice to the claim of deduction for the full project he submitted that in case if the area of 10 flats exceeded the limit of 1500 sq. ft., the deduction cannot be denied for the entire project and that it was eligible for proportionate deduction. 8. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to denial of deduction u/s 80IB(10) of the Act. We find that the claim of assessee of deduction u/s 80IB(10) for the entire project was disallowed by AO for the reason that out of the total 149 flats built by assessee, 10 flats were having area of more than 1500 sq ft. We find that while deciding the issue, Ld CIT(A) has given a finding that the project was on a plot area of 13400 sq mtrs (i.e.3.31 acres) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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