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TMI Blog2018 (2) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of assessee. - ITA Nos. 1396 And 1397/Mum/2016 - - - Dated:- 31-1-2018 - SHRI RAJENDRA, AM AND SHRI RAVISH SOOD, JM For The Revenue : Ms. Pooja Swaroop, D.R For The Assessee : Shri Sameer Dalal, A.R ORDER PER RAVISH SOOD, JUDICIAL MEMBER: The present set of appeals for A.Ys. 2011-12 2012-13 filed by the revenue are directed against the respective orders passed by the CIT(A)-44, Mumbai, each dated 29.01.2016, which in itself arises from respective orders passed by the A.O under Sec.143(3) of the Income tax Act, 1961 (for short Act ), dated 27.03.2014. We shall first take up the appeal of the revenue for A.Y 2011-12. The revenue assailing the order passed by the CIT(A) had raised before us the following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the claim of deduction u/s. 801B(10) of the l.T.Act,1961 of ₹ 2,11,98,951/- despite the fact that the assessee do not fulfil the conditions prescribed in this section. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not considering the fact that the Commencement Cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee had claimed deduction under Sec. 80IB(10) for the A.Ys 2004-05, 2005-06 and other subsequent assessment years. The assessee had raised the claim of deduction under Sec. 80IB(10) on the basis of percentage of work completed. The construction of building E was completed as per the completion certificate dated 12.03.2008 issued by the local authority. The full occupation certificate in respect of Building E was issued by the local authority as per its letter dated 31.01.2008. The assessee during the year under consideration had sold flats in Building E and had claimed deduction in respect of the income derived there from under Sec. 80IB(10). 4. The A.O during the course of the assessment proceedings, holding a conviction that the conditions contemplated under the said statutory provision were not found to be satisfied by the assessee, therefore, called upon the assessee to explain as to why the deduction claimed by it under Sec. 80IB(10) of ₹ 2,11,98,951/- may not be disallowed. The A.O was of the view that the assessee had failed to satisfy the conditions contemplated under Sec. 80IB(10), on three grounds, viz. (i) that as the Building E was only a part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the flats. The CIT(A) observed that the Hon ble High Court of Bombay in its order dated 28.05.2012 had dismissed the appeal of the department and decided the issue in favour of the assessee. It was further observed by the CIT(A) that the Special Leave Petition (for short SLP ) filed by the department before the Hon ble Supreme Court was also dismissed and the order of the Hon ble High Court of Bombay was upheld. The CIT(A) being of the view that as the matter as regards the entitlement of the assessee towards claim of deduction under Sec. 80IB(10) had finally been decided in the favour of the assessee, therefore, there was no justification for disallowing the same during the year under consideration. The CIT(A) allowed the claim of deduction of ₹ 2,11,98,951/- raised by the assessee under Sec. 80IB(10), by observing, as under: 3 . 3 I have careful ly gone through the assessment order as wel l as the written submission of the AR. I have also perused the details filed by the AR From the facts of the case it is clear that the issue of deduction under section 80( IB) (10) was raised for the f irst time for the assessment year 2004 - 05. In that assessment the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Bombay High Cour t has been conf irmed there is n justif ication for disal lowing claim of deduction under section 80( IB) (10) in the case of the appel lant. The grounds of appeal are accordingly al lowed and the addi tion of ₹ 2,11,98,951/- is deleted. 7. The Le arne d Author ize d Re pre sent at i ve (for shor t A.R ) for the assessee at the very outset submitted that the issue pertaining to the entitlement of the assessee towards claim of deduction under Sec. 80IB(10) had been decided by the Hon ble High Court of Bombay in the assesse s own case for A.Ys 2004-05 and 2005-06, reported as Commissioner of Income Tax Vs. Vandana Properties (2013) 353 ITR 36 (Bom) . It was submitted by the Ld. A.R that the Hon ble High Court had held that as the construction of E Building constituted an independent housing project, therefore, the date on which the earlier housing project had commenced construction could not be applied to the housing project consisting of the E Building merely, because the conditions set out while granting approval to the earlier housing project had also been made applicable to the housing project under consideration. It was further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing on behalf of the intervenors, the expression 'housing project' in common parlance would mean constructing a building or group of buildings consisting of several residential units. In fact, the Explanation in Section 80IB (10) supports the contention of the assessee that the approval granted to a building plan constitutes approval granted to a housing project. Therefore, it is clear that construction of even one building with several residential units of the size not exceeding 1000 square feet ('E' building in the present case) would constitute a 'housing project' under Section 80IB (10) of the Act. 20. The question, then, to be considered is, whether construction of'E' building is an independent housing project or extension of the housing project already existing on the plot in question. It is the contention of the Revenue that since the approval for construction of 'E' building was granted by the local authority subject to the conditions set out in the first approval granted on 12th May 1993 for construction of A and B building, construction of 'E' building must be considered to be the extension of the earlier housing pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes extension of the housing project which was approved in the year 1993. 22. Reliance placed by the Revenue on the Explanation to Section80IB (10)(a) which was introduced with effect from 1st April 2005 is also misplaced. What the said Explanation contemplates is that where the approval in respect of a housing project is granted more than once, then, that housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority. For example, in respect of a housing project, the assessee may seek amendment of the building plan at several stages of the construction and the same may be approved. In such a case, the explanation provides that for the purposes of Section 80IB (10) the housing project shall be deemed to have been approved on the date on which the first approval was granted by the local authority. Thus, the Explanation to Section 80IB (10)(a) refers to the approval granted to the same housing project more than once and the said Explanation would not apply where the approval is granted to different housing projects. In the present case, as noted earlier, construction of 'E' bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 1000 square feet constructed on a plot of land having minimum area of one acre would be eligible for Section 80IB (10) deduction. If the construction of Section 80IB (10) put forth by the Revenue is accepted, it would mean that if on a vacant plot of land, one housing project fulfilling all conditions is undertaken, then deduction would be available to that housing project and if thereafter several other housing projects are undertaken on the very same plot of land, the deduction would not be available to those housing projects as the plot ceases to be a vacant plot after the construction of the first housing project. Such a construction if accepted would defeat the object with which Section 80IB (10) was enacted. 27. Moreover, plain reading of Section 80IB (10) does not evenremotely suggest that the plot of land having minimum area of one acre must be vacant. The said Section allows deduction to a housing project (subject to fulfilling all other conditions) constructed on a plot of land having minimum area of one acre and it is immaterial as to whether any other housing projects are existing on the said plot of land or not. In these circumstances, construing the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enied to all those housing projects. Section 80IB (10) while specifying the size of the plot of land, does not specify the size or the number of housing projects that are required to be undertaken on a plot having minimum area of one acre. As a result, significance of the size of the plot of land is lost and, therefore, the assessee subject to fulfilling other conditions becomes entitled to Section 80IB (10) deduction on construction of a housing project on a plot having area of one acre, irrespective of the fact that there exist other housing projects or not. In these circumstances, the decision of the Tribunal in rejecting the contention of the Revenue regarding the size of the plot cannot be faulted. 30. The last argument of the Revenue in declining to grantdeduction under Section 80IB (10) is that two flats on the ground floor of building 'E' were merged in to one flat, as a result whereof the maximum size of the residential unit exceeded 1000 square feet which is in violation of the condition set out in Section 80IB (10) and, therefore, the assessee is not entitled to the deduction. The Tribunal on appreciation of the facts and the evidence on record arrived at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated, the facts of the case are that the assessee had efiled its return of income for A.Y. 2012-13 on 29.09.2012, declaring total income of Rs. Nil. The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. The case of the assessee was thereafter taken up for scrutiny assessment under Sec. 143(2). 12. The A.O while framing the assessment observed that the assessee had claimed deduction under Sec. 80IB(10) of ₹ 3,97,31,315/-. The A.O being of the view that the assessee was not entitled towards claim of deduction u/s 80IB(10) in respect of Wing E , therefore, declined the claim of deduction of ₹ 3,97,31,315/- raised by the assessee and added back the said amount to the returned income of the assessee. Aggrieved, the assessee carried the matter in appeal before the CIT(A), who following the order passed in the assesse s own case involving similar facts for A.Y 2011-12, concluded that as the issue had been decided in favour of the assessee by the Hon ble High Court of Bombay and thereafter upheld by the Hon ble Supreme Court, therefore, there was no justification for disallowance of the claim of deduction raised by the assessee unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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