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TMI Blog2019 (2) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 8OIB(IO) is without any legal basis because as held by the jurisdictional High Court in the case of Vandana Properties, even the additional building tied on the same plot of land where other buildings had already existed was eligible for the deduction provided other conditions were fulfilled. The project had been constructed on a plot of land of more than one acre as is apparent from the fact that the appellant firm had acquired the development rights of FSI to the tune of 9851 sq. mts. Therefore, deduction u/ 80IB(10) was available to the appellant as no violation of any other conditions has been pointed out by the AO. - Decided in favour of assessee. - I.T.A. No.5177/Mum/2017 - - - Dated:- 30-11-2018 - Shri B. R. Baskaran, AM And Shri Amarjit Singh, JM For the Assessee : Shri Subodh Ratnaparkhi (AR) For the Revenue : Shri Manoj Kumar Singh (DR) ORDER PER AMARJIT SINGH, JM: The revenue has filed the present appeal against the order dated 25.05.2011 passed by the Commissioner of Income Tax (Appeals) -1, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Y.2013-14. 2. The revenue has raised the following grounds: - .1. Whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing agreements which have bearing in the case of assessee are enumerated below:- 1. Second supplementary agreement dated 27/06/2001- between FGP Ltd. Chief Promoter of Kashish park CHS 2. First supplementary agreement 20/09/2000 - between FGP Ltd. Mr. Suryavanshi 3. First supplementary agreement dated 03/06/2005 - Between FGP Ltd. Assessee firm with Kashish park reality Pvt, Ltd, Ladam Homes Ltd. 4. Agreement for sale dated 05/07/2000 - Between FGP Ltd. Chief promoter of the Kashish Park CHS 5. Agreement for sale dated 03/12/2003 - between FGP Ltd. the assessee firm Kashish Park Realtors. M/s Kashish Park Realtors Pvt, Ltd, M/s Ladam Homes Ltd. carried out their own construction on the plot of Land sold to them. They created common facilities amenities and utilities. With the full utilization of the FSI as was sold to them and duly sanctioned by Thane Municipal Corporation, there was no chance of further construction barring of course the allotment of TDR if any by the TMC in lieu of reservation lands surrendered to TMC. All the details of the agreement have been stated since they are germane to the issue for the year under reference. The said FGP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (One of the partners of the assessee Firm having 64% share) were the original developers of the land belonging to FGP Ltd. When queried about the need for establishing assessee firm, It was explained that the M/s Kashish Park Realtors Pvt, Ltd. were facing cash crunch due to unsold flats and in fact they were trying to raise the money through bank or through private equity fund and they did not want to take additional risk and hence the assessee partnership firm. But this was not reality since the entire payments to the landlord s M/s FGP Ltd. were made by the M/s Kashish Park Realtors Pvt. Ltd. Prior to the existence of the firm and later on also. M/s Kashish Park Realtors Pvt, Ltd. being original developers had developed certain portion of the property and they had also enjoyed deduction u/s80IB (10) and there was no iota claiming the benefit for the new building since the date of approval could have gone back to first date of approval and they would not have enjoyed benefit of deduction U/s 80IB(10) for constructing the above TDR - FSI. As on date of execution of first development agreement dated 03.12.2003 between M/s FGP Ltd. and the assessee, the FGP Ltd, had not rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltors Pvt. Ltd. and a cooperative society has been formed in 2010 covering Bldgs, NO. MN-1 to MN-10 and L-2 L-3. The amenities are also shared by all the buildings. This shows that the 3 bldg, MN-6 to MN-8 are not the buildings constructed on separate plot of land with clearly demarcated area as required by section 80IB(l0). It is further noted that total FSI consumed by the 3 bldgs. MN-6 to MN-8 is 43782 sq. ft, which is also less than the FSI equivalent to 1 acre amounting to 44500 sq. ft. The assessee has failed to read and interpret the provision of section 8OIB(10) in so far as what section speaks is requirement of land of 1 acre and whereas the assessee through document and through submission has been harping on the FSI, The assessee has entered into agreement for the purchase of TDR/ FSI in the year 2003 (when there was neither commitment nor express communication from TMC regarding the allotment TDR) at ₹ 386 per sq. ft. which is based on agreement between FGP Ltd, and M/s Kashish Park Realty Pvt. Ltd in the year 2001. How the agreement, entered into with third party that too in 2001 could be applicable to the document between FGP Ltd. and assessee firm. The rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard, yet he has passed the assessment order in the capacity of firm without disturbing the entity of the assessee. This itself is enough to justify the claim of appellant that the firm has been created as per the provisions of law. Nonetheless, I find that the appellant firm has been constituted by a Partnership Deed dt. 01.12 2003. copy of which has been filed before the- A.O. The terms and conditions on which partnership firm has been constituted, have not been doubted by the A.O. He has also not pointed out any infirmity in the constitution of the firm. Moreover, the appellant firm has filed the Income Tax Reform regularly firm A.Y. 2005-06 onwards as is evident from the copy of acknowledgements for filing of the returns submitted by the Ld. A.R. along with his reply dt. 08/07/2014. Undisputedly, the partnership firm has entered into fin agreement dt. 03.12.2003 -with M/s, FGP Ltd. far acquisition of the development rights of FS1 to the tune of 9851.81 sq.mtrs. equivalent to 1,06,043.898 sq.ft. This fact has been very clearly mentioned in the relevant Clauses of the Agreement for Sale dt. 03.12.2003 entered into between the appellant firm and Ms. FGP Ltd. who was the owner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers ''A U utilizing area of 4885 sq. mtrs. As per the Agreement dt. 27.6.2001 have been M/s FGP Ltd and M/s, Kashish Park Realty Pvt. Ltd. which is one of the partners of the appellant firm, M/s. Kashtih Park Realty Pvt. Ltd was provided rights to acquire the TDR-FSI of the balance land at ₹ 386. IQ per sq.ft. However, M/s. Kashish Park Realty Pvt. Ltd. subsequently has decided not to acquire the development rights but requested the vendor to transfer the same to the appellant firm. Since M/$. Kashish Park Really Pvt. Ltd. find rights to acquire the balance TDR-FSI and also made the payments to the extent of ₹ 1,10,00,000/-before the constitution of the appellant firm, the A.O has treated the entire transaction of constitution and claim of deduction u/s. 801B(10) as collusive transaction. However, I find that the transactions have been entered into in a by respective Agreements and merely because M/s. Kashish Park Realty Pvt. Ltd. had rights tit acquire the TDR-FSI cannot render the transaction Collusive one. The payment of the sale consideration partly by M/s, Kashish Park Realty Pvt. Ltd. and subsequently getting credits for the same on becoming a partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding. After considering the facts of the case, it was held that when the buildings A.B.C D were approved, construction of E building was not even contemplated and the same was approved for construction only on 11th October, 2002 as a result of additional building permitted due to change in the ceiling limit of the land. Therefore, the construction of Building E could not be the part of earlier plan for the purpose of section 80lB(10). It is that from the falter of CBDT dt- 4th May.2001, it is clear that for the 80IB(10). It is not the mandate of section that the on a vacant land of plot having minimum area of one acre and that housing project has constructed on a plot of lend having minimum area of one acre bill with existing housing projects, would qualify for section 80IB(10) deduction. Therefore, it is deaf that on a plot of land having minimum area of one acre, there can be any number of housing projects and so long as those housing projects are approved by the local authority the conditions set out it/s. 80IB(10), the deduction there under cannot be denied to all those housing projects Merely because the decision of Hon 'bin Bombay High Court came in the year 2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. From the approved lay out plan dt. 29/3/2006, it is also clear that the FSI utilized is 0.93 only and hence, the plot area is certainly more than the built up area. However, the A.O. has erroneously considered the area of building constructed during the year under consideration only ignoring the area of the buildings constructed in subsequent assessment year. In view of this factual position duly supported from documentary evidences, it is clear that the land area utilized under the housing projects of the appellant firm is more than one acre 4,000 sq. mtrs.). Thus. I hold that the findings of A.O. in this regard are not correct. 8, In the assessment year 2011-12, following the order of the CIT(A)-II, Thane, as above, deduction u/s, 80IB(10) way allowed to the appellant by me vide appeal order dated 29.07.2015 after making the following observations 13. The facts of the case for the year under consideration are identical to the facts of the appellant's case for A.Y. 2010-11 in fact the same project has been continued during the year under consideration. As the facts of the case are identical to the facts of the appellant's case for A.Y. 2010-11 and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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