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TMI Blog2020 (7) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the aforesaid case being distinguishable as against those in the case before us, would thus not assist the case of the assessee. No infirmity in the assumption of jurisdiction by the A.O u/s 147 of the Act, and are thus not inclined to subscribe to the claim of the ld. A.R that the concluded assessment in the case of the assessee had been reopened on a mere change of opinion . As such, holding a conviction that the A.O had rightly assumed jurisdiction and reopened the case of the assessee u/s 147 of the Act, we uphold the same to the said extent. Grounds of appeal Nos. 1 2 are dismissed. Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings - HELD THAT:- Assessee was obligated to complete the construction of the housing project as per the approved plan and comply with the I.O.D conditions, and by no means could be permitted to construe the completion of the construction of buildings as completion of the housing project. Assessee at the time of approval of its plan was well conversant of the fact that on the South side of the plot of land where the road was to be constructed there was a hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls, but did not include the common areas shared with other residential units. In our considered view, if the assessee in the case before us had de facto provided the exclusive possession/enjoyment of the dry balcony attached with a flat to the purchaser of the said flat (as advertised by it in its brochures), then the same will have to be included while computing the built-up area of such flat, failing which the very purpose of the definition of the said term in Sec. 80IB(14)(a) would be rendered as otiose. But then, in the absence of the correct factual position the aforesaid issue before us cannot be adjudicated. We thus in all fairness restore the issue to the file of the A.O for fresh adjudication. In case, the flat purchaser is de facto in exclusive possession/enjoyment of the dry balcony attached with the flat, then the area of the same shall be included while computing the built-up area of such flat. However, if such projection is either in the nature of a service projection to be used for servicing the building or carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation. Accordingly, we are of the considered view that on the same terms the matter in the present appeal also requires to be restored to the file of the A.O, who is directed to adjudicate the issue afresh considering our observations/directions recorded while disposing off the Grounds of appeal Nos. 2 5. - ITA No. 5225/Mum/2017, ITA No. 5912/Mum/2017, ITA No. 4730/Mum/2016, ITA No. 5523/Mum/2016, ITA No. 5913/Mum/2017 - - - Dated:- 9-7-2020 - Shri M. Balaganesh, Accountant Member And Shri Ravish Sood, Judicial Member For the Assessee : Shri Nitesh Joshi, A.R For the Revenue : Shri S.C Tiwari, CIT D.R ORDER PER BENCH : The captioned cross-appeals for A.Y 2011-12 and A.Y 2012-13 and the appeal of the revenue for A.Y 2013-14 are directed against the respective orders of the CIT(A)-32, Mumbai, as under : ITA No./appellant Assessment Year Details of impugned order Details of assessment /penalty order ITA 5225/Mum/2017 (Assessee) A.Y 2011-12 CIT(Appeals)-32, Mumbai Order dated 20.06.2017. Assessment order u/s. 143(3) r.w. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross profit of 63.08% when the assessee had not fulfilled all the conditions laid down in the provisions of the Act. 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying upon the judgment of Hon ble Bombay High Court decision in the case of CIT Vs. Hindustan Samuh Awas Ltd. (2015) 62 Taxmann.com 175 (Bom) without appreciating that the facts of the present case are totally different from the facts of the case in the above decision. In Hindustan Samuh Awas Ltd. (supra), the Hon ble High Cout held that since the assessee had complied with all the norms of Intimation of disapproval (IOD) and had applied for completion certificate well in time before the Municipal Authority, therefore, the delay in issuing project completion certificate cannot be attributable to the assessee, whereas in the present case, the Municipal Corporation of Greater Mumbai (MCGM) had not issued completion certificate to the assessee as the assessee had not fulfilled in all the norms of IOD at the time of applying for completion certificate. Thus, the assessee is wholly and exclusively responsible for this delay. Hence, the case law relied upon by the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils gathered by the A.O in the course of the assessment proceedings for A.Y 2012-13, it stood revealed viz. (a). that the assessee had not completed its housing project viz. Adityavardhan within the stipulated period contemplated in Sec. 80IB(10)(a)(iii) of the Act; and (b). that the built up area of all 3 BHK flats in the said project was more than 1000 sq. ft. which was in violation of the conditions specified in Sec. 80IB(10)(c) of the Act. In the backdrop of the aforesaid facts, the A.O holding a conviction that the assessee had failed to comply with the provisions of Sec. 80IB(10)(a) and Sec. 80IB(10)(c) of the Act, disallowed its claim for deduction of ₹ 19,20,04,491/- raised u/s 80IB(10) of the Act. 4. Observing, that the assessee had raised a claim for deduction of ₹ 26,69,84,644/- u/s 80IB(10) for the same housing project i.e Adityavardhan in its return of income for the year under consideration i.e A.Y 2010-11, which was allowed by him vide his assessment order passed u/s 143(3), dated 28.03.2013, the A.O reopened the case of the assessee u/s 147 of the Act. Notice u/s 148, dated 20.04.2015 was issued by the A.O after recording the reasons to believe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble High Court the assessee participated in the assessment proceedings. On being called upon to furnish the Building Completion Certificate and the Occupation Certificate issued by the local authority for its project Adityavardhan , it was submitted by the assessee that the same were not issued by the local authority till date. However, the assessee in order to drive home its claim that the project viz. Adityavardhan was completed well within the stipulated time period as envisaged in Sec. 80IB(10) of the Act, therein drew support from the fact that an application dated 19.10.2010 was already filed by its architect i.e Mr. Bhupendra Patrawala with the Assistant Engineer Building Proposal, MCGM, requesting for grant of Occupation Certificate for its said project. For the sake of clarity, the chronology of events pertaining to the assessee s claim that the project viz. Adityavardhan was completed within the time frame contemplated in Sec. 80IB(10)(a)(iii) of the Act as was narrated by the assessee in the course of the assessment proceedings is reproduced as under: Sr. No. Date Particulars 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Structural Consultants Engineers Architects to certify that structural work of the said building had been carried out as per his structural design which complied with the requirement of I.S Code No. 1893 for earthquake design and requirement as mentioned in clause Nos. 45 and 46 of Development Control Regulations. The said certificate also enclosed two sets of complete plans of the structural work. 4. 2006(onwards) Assessee made several attempts to convince Tata Electric Company to shift its transmission tower to another location with a view to enable completion of the D.P. road on South side of the plot of land (see pages 1A to A28 of our submissions vide letter dated 05.08.2015). Since the assessee was unsuccessful various representations were also made by proposed society formed by the flat purchasers to Tata Electric Company as the completion certificate in respect of the said building was held up by MCGM for this purpose. (See pages 29B to B41 of our submissions vide letter dated 05.08.2015). As an alternative, the Assessee represented before MCGM to construct the road on South side of the plot on their own for which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 flats were to be constructed in the said 2 wings. Further, as per the approved plan the assessee was to construct and hand over two D.P Roads on the said plot to MCGM viz. (i) the road on the east side of the plot; and (ii). the road on the south side of the plot. As can be gathered from the records, though the assessee had constructed and handed over the road running on the east side of the plot to MCGM but had failed to construct the road on the south side of the plot of land. As claimed by the assessee, it had failed to construct the road on the south side of the plot, as where the road was to be constructed there was a hill on which there was a pylon i.e a tower for transmission of electricity of Tata Electric Company. It is stated by the assessee that all efforts on its part to convince Tata Electric Company to shift its transmission tower to another location in order to facilitate completion of the D.P road on the South side of the plot had failed. Also, similar was the fate of the persuasions/representations made by the proposed society that was formed by the flat purchasers before the Tata Electric Company. Alternatively, the assessee is stated to have tried to persuade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assesee that since it had granted possession of almost 85% of flats to the purchasers before 31.03.2012, therefore, it could safely be presumed that the buildings were complete in all respect and were ready for occupation. In the backdrop of the aforesaid facts, it was the claim of the assessee that de hors issuance of the Building Completion Certificate/Occupation certificate by the local authority for reasons beyond the assessee s control, since the housing project i.e the residential buildings were complete in all respect before the stipulated time period i.e 31.03.2012, therefore, its claim for deduction u/s 80IB was in order. 7. However, the A.O was not persuaded to accept the aforesaid claim of the assessee. It was inter alia observed by the A.O, that the assessee had failed to complete the residential project within the stipulated time period envisaged in Sec. 80IB(10)(a)(iii) of the Act. On the basis of information received by the A.O from MCGM vide its letter No. DyChE/BP/19415/ES, dated 19.03.2015, it was intimated that the Building Completion Certificate and Occupation Certificate was not issued to the assessee on account of certain failure on its part to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee as stock-in-trade), it was gathered by the A.O that the dry balcony area was almost at the floor level and was in the nature of a usable area. Apart from that, it was observed by the A.O that a perusal of the Index-II of 3 BHK flat in the project Adityavardhan revealed that the built-up area of the flat i.e 98.88 square meter (1064 sq. feet) was being charged and sold by the assessee to its customers. Further, referring to the definition of built-up area as provided in sub-section (14) of Sec. 80IB of the Act, it was observed by the A.O that as per the section and its Explanation , the built-up area was to be taken as the sum total of the inner measurements of the residential unit at the floor level, alongwith the projections and balconies. As such, the A.O held a conviction that the area of all projections like drying area etc. were to be added while calculating the built-up area of the residential units. Based on his aforesaid observations, it was concluded by the A.O that the built-up area of certain residential units of the assessee exceeded 1000 sq. feet. In order to support his aforesaid observation, the A.O relied on the order of the ITAT, Mumbai in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstructing the road, therefore, for the said reason it had failed to comply with the said condition in the IOD/CC. In the backdrop of the aforesaid facts, the CIT(A) was of the view that the assessee should not have been denied deduction under Sec. 80IB(10) for not performing of an act which was impossible of performance, and that the Building Completion Certificate/Occupation Certificate could not be obtained for reasons beyond its control. The CIT(A) further drawing support from the judgment of the Hon ble High Court of Bombay in the case of CIT Vs. Hindustan Samuh Awas Ltd. (2015) 62 taxmann.com 175 (Bom), therein observed that the facts borne from the records viz. purchasers of the flats had taken possession and were residing in the said flats; approvals were obtained by the assessee from the Fire Brigade authority, Lift Inspector, Asst. Engineer MCGM for drainage works etc., evidenced that the assessee had completed the physical construction of the project. Accordingly, the CIT(A) holding a conviction that the assessee had completed its project viz. Adityavardhan within the time allowed u/s 80IB(10)(a)(iii), therein vacated the adverse inferences that were drawn by the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted by the ld. A.R that the A.O in the garb of the present reassessment proceedings had sought to review the concluded assessment that was earlier framed by his predecessor vide an order passed u/s 143(3), dated 28.03.2013. It was submitted by the ld. A.R that the A.O while framing the Original assessment u/s 143(3), vide his order dated 28.03.2013 had deliberated at length on the assessee s claim for deduction u/s 80IB(10) of the Act, and after making exhaustive verifications and calling for requisite documents had found the same to be in order. It was averred by the ld. A.R, that the case of the assessee was reopened merely on the basis of a change of opinion as regards its entitlement towards claim of deduction u/s 80IB(10) of the Act. In the backdrop of his aforesaid submissions, it was averred by the ld. A.R that as per the settled position of law a concluded assessment could not be reopened merely on the basis of a change of opinion . In his attempt to drive home his claim that the case of the assessee was reopened on the basis of a mere change of opinion , the ld. A.R took us through the copy of the reasons to believe on the basis of which the case of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a request was made for grant of Occupation Certificate for the aforesaid project viz. Adityavardhan . Further, the ld. A.R took us through a letter of the Site Supervisor, dated 07.10.2010 addressed to the Executive Engineer, MCGM (Page 34 of APB ); Certificate of stability of structure, dated 16.10.2010 issued by Shri. Niranjan Pandya, Structural Consultants (Page 35 of APB ); and letter dated 28.03.2013 of the assessee addressed to the A.O, as per which the assessee had inter alia enclosed Building Completion Certificate issued by its architect viz. Mr. Bhupendra Patrawala. In the backdrop of the aforesaid facts, it was submitted by the ld. A.R that in the course of the Original assessment proceedings, the A.O only after exhaustive verifications had allowed the assessee s claim for deduction u/s 80IB(10) of the Act. It was vehemently submitted by the ld. A.R that the A.O vide his letter dated 22.02.2013 (supra), had in the course of the Original assessment proceedings called upon the assessee to furnish the Completion Certificate of the project issued by the local authorities. In the backdrop of the aforesaid fact, it was submitted by the ld. A.R that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son that the A.O had not drawn correct inferences, income which had escaped assessment could not be brought to tax u/s 147 of the Act. In support of his said claim the ld. A.R had relied on the judgment of the Hon ble Supreme Court in the case of CIT, Calcutta Vs. Burlop Dealers Ltd. (1971) 79 ITR 609 (SC). 15. Per Contra, the ld. Departmental Representative (for short D.R ) took us through the relevant pages of the assessment order. It was submitted by the ld. D.R, that the assessee after obtaining the copy of the reasons to believe had vide its letter dated 05.03.2016 filed objections as regards the validity of the reopening of its concluded assessment. It was submitted by the ld. D.R, that the objections raised by the assessee were rejected by the A.O by a speaking order dated 17.11.2015. Thereafter, the assessee had challenged the validity of the reopening of its assessment by filing a writ petition with the Hon ble High Court of Bombay, which however was dismissed vide order dated 16.12.2015. It was submitted by the ld. D.R, that as the writ petition of the assessee was dismissed by the Hon ble High Court, therefore, there was no merit in the objections raised by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. D.R, that it was in the backdrop of the aforesaid information that it stood revealed that the residential project of the assessee was not completed within the stipulated time period envisaged in Sec. 80IB(10)(a)(iii) of the Act. Also, as averred by the ld. D.R, it was in the course of the assessment proceedings for A.Y 2012-13, that the fact that the built-up area of all 3BHK flats in the project viz. Adityavardhan was more than 1000 sq. ft had surfaced which was in clear violation of the norms prescribed in Sec. 80IB(10)(c) of the Act. On the basis of the aforesaid facts, it was submitted by the ld. D.R that the A.O having reason to believe that by wrongly allowing the assessee s claim for deduction u/s 80IB(10) of the Act, its income chargeable to tax had escaped assessment, had thus rightly assumed jurisdiction and reopened the concluded assessment of the assessee by taking recourse to Sec. 147 of the Act. In support of his aforesaid claim the ld. D.R had relied on the judgment of the Hon ble High Court of Bombay in the case of Export Credit Guarantee Corporation of India Ltd. Vs. Addl. CIT (2013) 350 ITR 651 (Bom). Also support was drawn from the judgments of the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find that it was on the basis of the aforesaid facts that the A.O held a bonafide reason to believe that by wrongly allowing the assessee s claim for deduction u/s 80IB(10) of the Act, its income chargeable to tax for the year under consideration i.e A.Y 2011-12 had escaped assessment. Accordingly, on the basis of the aforesaid factual matrix the A.O had assumed jurisdiction and reopened the case of the assessee u/s 147 of the Act. 17. Before adverting to the issue as to whether or not the A.O had validly assumed jurisdiction for reopening the concluded assessment of the assessee, it would be relevant to point out that as such reopening was done by the A.O within a period of four years from the end of the assessment year, therefore, the requirement of proving that there was no full and true disclosure on the part of the assessee would not be germane for the present adjudication. Admittedly, as observed by the Hon ble Supreme Court in case of CIT Vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) , one needs to give a schematic interpretation to the words reason to believe failing which, an A.O would get vested with arbitrary powers to reopen assessments on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O had a reason to believe that the failure of the assessee to complete its project viz. Adityavardhan within the stipulated time period provided in Sec. 80IB(10)(a)(iii) of the Act, had thus, rendered it ineligible for claim of deduction under the said statutory provision. Apart from that, the A.O on the basis of verifications carried out in the course of the assessment proceedings for A.Y 2012-13, had also gathered that the built-up area of all 3BHK flats in the project viz. Adityavardhan was more than the prescribed area of 1000 sq. ft, which clearly contravened the norms prescribed in Sec. 80IB(10)(c) of the Act. Accordingly, on the basis of the aforesaid fresh material gathered by the A.O in the course of the assessment proceedings for the immediately succeeding year i.e A.Y 2012-13, we find that he had arrived at a bonafide belief that the assessee who had violated the requisite conditions contemplated in Sec. 80IB(10) of the Act, viz. (a). Sec. 80IB(10)(a)(iii); and (b). 80IB(10)(c), was wrongly allowed deduction u/s 80IB(10) while framing of its regular assessment for A.Y 2011-12, which had thus resulted to escapement of its income chargeable to tax. Although, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 013 for the year under consideration. We are unable to persuade ourselves to subscribe to the claim of the ld. A.R that overlooking of the aforesaid statutory requirement by the A.O in the course of the Original assessment proceedings has to be construed as a deemed acceptance of the completion of the project on the basis of the certificate of the assessee s architect and other supporting documents which were filed by the assessee. Be that as it may, in our considered view, the failure on the part of the assessee to support its claim as regards the completion of the construction of its housing project within the stipulated time period envisaged in Sec. 80IB(1)(a)(iii), on the basis of a completion certificate issued by the local authority would clearly suffice for formation of a belief on the part of the A.O that as the assessee had failed to cumulatively satisfy the conditions envisaged in Sec. 80IB(10) of the Act, its income chargeable to tax to the said extent had escaped assessment. Our aforesaid view is fortified by the judgment of the Hon ble High Court of Bombay in the case of Export Credit Guarantee Corporation Of India Ltd. Vs. Addl. CIT (2013) 350 ITR 651 (Bom) . I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid deliberations, we are of the considered view that the A.O had rightly assumed jurisdiction for reopening the concluded assessment of the assessee u/s 147 of the Act. 18. Before parting, we shall deal with the judicial pronouncements that had been pressed into service by the ld. A.R in his attempt to buttress his claim that the A.O had exceeded his jurisdiction while reopening the concluded assessment in the case of the assessee, as under: (i). CIT, Calcutta Vs. Burlop Dealers Ltd. (1971) 79 ITR 609 (SC) : The ld. A.R in the course of hearing of the appeal had drawn support from the aforesaid judgment of the Hon ble Apex Court. It was submitted by the ld. A.R that once the assessee had disclosed the material facts in its books of account , thereafter, it was under no obligation to inform the A.O about the possible inferences that might be raised against it. On a perusal of the said judgment, we find that the same was delivered in context of Sec. 34(1)(a) of the Income-tax Act, 1922, as per which the ITO had an authority to serve a notice when he had reason to believe that by reason of omission or failure on the part of the assessee to disclose fully and truly all m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h it had worked out its claim for deduction u/s 80-IA of the Act. As per the Note the expenses were allocated between the three manufacturing units on its turnover, actual basis and time spent depending upon the nature of expenses. During the course of the assessment proceedings, the A.O called for exhaustive information/clarification as regards the working of the claim for deduction u/ss. 80-IA/80-IB of the Act. In reply, the assessee petitioner responded to the queries raised by the A.O as regards its working of deduction u/ss. 80-IA/80-IB of the Act, and in particular gave details of the manner in which the expenses had been allocated amongst the three manufacturing units, i.e., two in the backward region and one at Pimpri. The A.O vide his assessment order passed u/s 143(3), dated 09.03.2005 accepted the assessee s claim for deduction u/ss. 80-IA/80-IB to the extent of ₹ 2.08 crores. Subsequently, the A.O was in receipt of a communication from the Addl. CIT, who had assessed the assessee petitioner to tax for A.Y 2004-05, indicating that the allocation of expenditure amongst the three manufacturing units of the assessee was disproportionate having regard to its turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be sustained and was liable to be vacated. ( ii). As observed by us hereinabove, the facts in the case before us are clearly distinguishable as against those involved in aforesaid case viz. GKN Sinter Metals Ltd.(supra). The A.O in the case before us had reopened the concluded assessment of the assessee for two reasons viz. (a). that as per intimation received by the A.O from the MCGM vide its letter No. DyChE/BP/19415/ES, dated 19.03.2015, the Building Completion Certificate and Occupation Certificate was not issued to the assessee till date by the local authorities on account of certain failure on its part as regards complying with the building I.O.D (Intimation of Disapproval) conditions, on the basis of which the A.O held a bona fide belief that as the assessee had contravened the provisions of Sec. 80IB(10)(a)(iii), it was thus not entitled for claim of deduction u/s 80IB; and (b). the A.O on the basis of verifications carried out in the course of the assessment proceedings for A.Y 2012-13, had gathered, that the built-up area of some of the residential units in the project viz. Adityavardhan was more than the prescribed area of 1000 sq. ft, which being in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of the assessment proceedings for A.Y 2012-13 had revealed that the built-up area of some of the residential units in the project viz. Adityavardhan was more than the prescribed area of 1000 sq. ft, thus the assessee had contravened the norms prescribed in Sec. 80IB(10)(c) of the Act. On appeal, the CIT(A) finding the claim for deduction raised by the assessee u/s 80IB in order, had vacated the disallowance made by the A.O. 22. Aggrieved, the revenue has assailed the allowing of the assessee s claim for deduction u/s 80IB by the CIT(A) in appeal before us. The ld. D.R submitted that on the basis of information received by the A.O from the MCGM vide its letter No. DyChE/BP/19415/ES, dated 19.03.2015, it was gathered by him that the Building Completion Certificate and Occupation Certificate was not issued by MCGM to the assessee, till date, on account of certain failure on its part as regards complying with the building I.O.D (Intimation of Disapproval) conditions. As per the information received from MCGM, the Building Completion Certificate/Occupation Certificate was not issued to the assessee since as per the approved plan portion of 18.30 mtr. wide D.P road passing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plan the assessee was to construct and hand over two D.P Roads on the said plot to MCGM viz. (i) the road on the east side of the plot; and (ii). the road on the south side of the plot. It was submitted by the ld. A.R, that though the assessee had constructed and handed over the road running on the East side of the plot to MCGM, but had failed to construct the road on the South side of the plot of land, as where the road was to be constructed there was a hill on which there was a pylon i.e a tower for transmission of electricity of Tata Electric Company. It was stated by the ld. A.R that all efforts on the part of the assessee to convince Tata Electric Company to shift its transmission tower to another location in order to facilitate construction of the D.P road on the South side of the plot had failed. Further, as submitted by the ld. A.R, the representations made by the proposed society formed by the flat purchasers i.e Adityavardhan Residents Welfare Association to Tata Electric Company for shifting of its Pylon had also gone in vain. The ld. A.R submitted that under the aforesaid circumstances the assessee had requested MCGM to construct the road on the South side of the plot o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... design and requirements as mentioned in clause Nos. 45 and 46 of the Development Control Regulations. It was submitted by the Ld. A.R, that now when it was proved to the hilt that the residential project of the assessee was completed within the time frame prescribed in Sec. 80IB(10)(a)(iii) of the Act i.e latest by 31.03.2012, its claim for deduction under the said section could not be denied merely for the reason that Completion Certificate was not obtained from the local authority. It was vehemently submitted by the ld. A.R, that the Building Completion Certificate/Occupation Certificate had been withheld by MCGM, for the reason, that the assessee for reasons beyond its control was unable to construct the 18.30 mtr wide D.P road passing through the South side of the plot. The ld. A.R reiterated the facts leading to the failure on the part of the assessee to construct and hand over the aforesaid 18.30 mtr wide D.P road on the South side of the plot. It was submitted by the ld. A.R, that considering the fact that the construction of the housing project of the assessee was completed in all respects, the CIT(A) had rightly concluded that the assessee having completed the project wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea of the residential flat in the building for the purpose of approving the building plan. Lastly, the ld. A.R took us through the certificate issued by the assessee s architect wherein he had cerified that the built-up area of each flat did not exceed 1000 sq. feet. In support of his aforesaid claim the ld. A.R had relied on the judgment of the Hon ble High Court of Bombay in the case of CIT Vs. M/s Raviraj Kothari Punjabi Associates [ITA No. 1628 of 2013, dated 24.04.2015] (Bom) and that of the Hon ble High Court of Madras in the case of CIT, Chennai Vs. Mahalkshmi Housing (2014) 41 taxmann.com 146 (Madras), wherein it was held that open terrace area cannot form part of the built-up area of the residential unit. It was thus averred by the ld. A.R that as the assessee had duly complied with the conditions contemplated in Sec. 80IB(10) of the Act, therefore, its claim for deduction under the said statutory provision was in order. 24. Rebutting the aforesaid contentions of the ld. A.R the counsel for the revenue vehemently submitted that in interpreting a taxing statute, equitable considerations are entirely out of place. Accordingly, it was submitted by the ld. D.R that a tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case had rightly concluded that the assessee was eligible for claim of deduction u/s 80IB(10) of the Act. 26. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the judicial pronouncements relied upon by them in context of the aforesaid issue under consideration. Before adverting any further and adjudicating upon the issue as to as to whether or not the assessee firm had in letter and spirit complied with the mandate of Sec. 80IB(10) of the Act, it would be relevant to reproduce Sec. 80IB(10), which read as under: Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. 80-IB (1) Where the gross total income of an assessee includes any profits and gains derived from any business referred to in sub-sections [(3) to [(11), (11A) and (11B)] (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at [any other place;] (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed [three per cent] of the aggregate built-up area of the housing project or [five thousand square feet, whichever is higher].] [(e) not more than one residential unit in the housing project is allotted to any person not being an individual; and (f) in a case where a residential unit in the housing project is allotted to a person being an individual, no other residential unit in such housing project is allotted to any of the following persons, namely:- (i) the individual or the spouse or the minor children of such individual, (ii) the Hindu undivided family in which such individual is the karta, (iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta;] [ Explanation.- For the removal of doubts, it is hereby declared that nothing containe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -13, PAN : AADFH6590D Madam/Sir, With reference to above subject matter and as requested by you, the remarks regarding for the file No. CE/4040/BPES/AL are as follows: (1). Regarding Point No. (i). : - First Commencement Certificate by this office has been issued on 18/07/2006. (2). Regarding Point No. (ii) (iii) : - No Occupation Certificate/Building Completion Certificate has been issued by this office for the building under reference. Occupation Certificate/Building Completion Certificate has not been issued by this office since portion of set back of 18.30 mt. wide D.P road passing through the plot under reference has not been handed over to M.C.G.M as per IOD conditions issued by this office. Yours faithfully Sd/- Executive Engineer (Building Proposal) E.S.I 27. In the backdrop of the aforesaid facts, we find that as the assessee as per the approved plan had failed to construct and hand over 18.30 mt wide D.P Road passing through the south side of the plot to MCGM, therefore, the Building Completion Certificate and Occupation Certificate was not issued to it by the said local authority. The ld. A.R had emphasized on two main aspects pertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he completion certificate in the case of the assessee before us was not issued by the local authority i.e MCGM, because the assessee had failed to complete the project as per the approved plan, and had failed to construct and hand over 18.30 mt wide D.P Road passing through the south side of the plot to MCGM as per the I.O.D conditions. To be brief and explicit, it can safely be concluded that as the assessee had failed to complete the housing project as per the approved plan, therefore, the completion certificate was not issued by the local authority. We are unable to agree with the claim of the ld. A.R that as it had placed on record material/certificates from the respective departments of MCGM and independent professionals, which as per him evidenced the fact that the housing project was completed within the stipulated time period i.e upto 31.03.2012, therefore, no adverse inference as regards completion of the said project within the prescribed time limit contemplated in Sec. 80IB(10)(a)(iii) was liable to be drawn. As observed by us hereinabove, the said claim of the ld. A.R has to fail on two grounds viz. (i). that as per the mandate of law the housing project is to be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan approved was well aware of the existence of a pylon i.e a tower for transmission of electricity of Tata Electric Company on the south side of the plot where it had agreed to construct a 18.30 mt wide D.P Road, it could not thereafter be allowed to plead impossibility of performance of the said act. Be that as it may, in the backdrop of our aforesaid observations, we are of a strong conviction that as the assessee had failed to complete the construction of the housing project within the prescribed time limit envisaged in Sec. 80IB(10)(a)(iii) of the Act, therefore, the A.O had rightly declined its claim for deduction u/s 80IB(10) of the Act . 29. We shall now advert to the judicial pronouncements relied upon the ld. A.R, which we find being distinguishable on facts would not assist the case of the assessee : (i). CIT, Aurangabad Vs. Hindustan Dsamuh Awas Ltd. (2015) 377 ITR 150 (Bom) (a). In the aforesaid case, the assessee company was required to complete its project prior to 31.03.2008. The assessee had well in time i.e on 25.03.2008 submitted an application alongwith its architect s certificate with the Municipal authority for issuance of the Completion Certificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon by the ld. A.R are totally distinguishable as against the facts involved in the case before us. In the aforesaid case, the Hon ble High Court had observed that though the assessee before them had completed the construction of the housing project much prior to the last date i.e March 31,2008, however, the BU was declined by the local authority for a technical reason. It was thus in the backdrop of the said facts that the Hon ble High Court had observed that if substantial compliance thereof is established on record, in a given case, the court may take the view that minor deviation thereof would not vitiate the very purpose for which the deduction was being made available. As such, it was observed by the High Court that delay in obtaining of the BU permission by the assessee for a technical reason would not justify denial of the assessee s claim for deduction u/s 80IB(10) of the Act. However, in the case before us the Completion Certificate for the project viz. Adityavardhan, had till date not been issued to the assessee, for the reason, that it had failed to comply with the building I.O.D (Intimation of Disapproval) conditions and thus not completed the housing projec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee before the stipulated time period i.e 31.03.2008. It was in the backdrop of the said fact, that it was further observed that the assessee after the completion of the project had filed an application for obtaining the Occupation Certificate from MCGM. Accordingly, the Tribunal taking cognizance of the fact that the project was completed by the assessee in all respect before 31.03.2008, had therein observed that merely for the reason that the Occupation Certificate was not issued by MCGM would not justify declining of the assessee s claim for deduction u/s 80-IB(10) of the Act. (b). Again, as is discernible from the facts of the aforesaid case, we find, that the assessee in the said case had admittedly completed the project. As such, it was observed by the Tribunal that in the totality of the facts of the case, the assessee s claim for deduction u/s 80IB(10) could not justifiably be declined for the reason that the Occupation Certificate was not issued by MCGM to the assessee. As the facts of the case of the assessee before us, wherein the construction of the housing project had not been completed till date as per the approved plan, therefore, the same are distinguish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs of the section are clear, then benefits, which are not available under the section cannot be conferred by ignoring or misinterpreting the words in the section. Adopting a similar view, the Hon ble Apex Court in the case of Petron Engg. Construction Pvt. Ltd. Vs. CBDT Ors. (1989) 175 ITR 523 (SC) , had earlier observed, that liberal interpretation of an incentive provision can be resorted to only when it is possible without impairing the legislative requirement and the spirit of the provision. It was observed by the Hon ble Apex Court, that where the phraseology of a particular provision takes within its sweep the transactions which are taxable, it is not for the courts to strain and stress the language so as to enable the taxpayer to escape the tax. On a similar footing the Hon ble Apex Court in the case of Pandian Chemicals Vs. VIT (2003) 262 ITR 278 (SC) , had observed, that rules of interpretation would come into play only if there is any doubt with regard to the express language used in the provision. It was observed by the Hon ble Court that where the words are unequivocal, there is no scope for importing the rule of liberal interpretation of an incentive provision. Als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the applicability of the exemption clause strictly, then the court may construe the notification by giving full play bestowing wider and liberal construction. As regards the tools for interpreting a statutory provision, it was held by the Hon ble Apex court that an Explanation to a statute is inter alia an internal aid for construction of the same. Further, it was observed by the Hon ble Court that if the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, the courts are bound to give effect to the said meaning irrespective of consequences. It was observed that if the words in the statute are plain and unambiguous, it becomes necessary to expound those words in their natural and ordinary sense. In fact, the Hon ble Court observed that the words used declared the intention of the legislature. Apart from that, it was observed that the fact that applying of the rule of plain meaning had resulted into any hardship or inconvenience cannot be allowed to form a basis to alter the meaning to the language employed by the legislation. It was further observed by the Hon ble Apex Court that any vagueness in the exemption clauses must go to the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned, we find that the said statutory provision clearly lays down the set of conditions that are required to be cumulatively satisfied for entitling an assessee to claim deduction therein contemplated. We are unable to persuade ourselves to accept the claim of the ld. A.R that now when the assessee had substantially complied with the conditions contemplated in Sec. 80IB(10), it could not on the basis of a strict interpretation of the said statutory provision be divested of its claim for deduction therein raised. In so far the claim of the ld. A.R that the assessee had substantially complied with the mandate of Sec. 80IB(10) of the Act is concerned, we are afraid that the same does not find favour with us. As observed by us hereinabove, as per the innate statutory requirement contemplated in Sec. 80IB(10), the assessee was obligated to substantiate the date of completion of construction of its housing project viz. Adityavardhan on the basis of the Completion Certificate of the local authority i.e MCGM, which admittedly in its case was not issued by MCGM as the project was not completed by the assessee as per the building I.O.D (Intimation of Disapproval) conditions. As such, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was any ambiguity then the benefit of the same must go in favour of the revenue. Our aforesaid view is fortified by the judgment of the Hon ble Apex Court in the case of Dilip Kumar (supra), wherein it was observed that any vagueness in the exemption clauses must go to the benefit of the revenue, as the same being the creation of the statute itself has to be construed strictly. In fact, it was observed by the Hon ble Apex Court that an exemption from taxation is to be allowed based wholly by the language of the notification and cannot be gathered by necessary implication or by construction of words. Further, it was observed by the Hon ble Court that one has to look to the language alone and the object and purpose for granting exemption is irrelevant and immaterial. In so far construing of Sec. 80IB(10) is concerned, we find that the same clearly lays down the set of conditions that are required to be satisfied for entitling an assessee to claim deduction therein contemplated. We are of a strong conviction that as from the clear, plain and unambiguous words used in Sec. 80IB(10) only one meaning can be inferred, therefore, effect has to be given to the same, irrespective of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at [any other place;] (d) .; (e) .; (f) .. Accordingly, as per the mandate of Clause (c) of Sec. 80IB(10) the maximum built-up area of a residential unit in a housing project situated within Mumbai or within twenty five kilometres from its municipal limits is not to exceed one thousand square feet. Admittedly, the A.O while framing the Original assessment, vide his order passed u/s 143(3), dated 28.03.2013, after raising exhaustive queries as regards the eligibility of the assessee towards claim of deduction u/s 80IB(10) of the Act, finding the same to be in order had allowed the same. However, after the culmination of the Original assessment framed vide order passed u/s 143(3), dated 28.03.2013 for A.Y 2011-12, that the A.O inter alia acting upon the information that the built-up area of all 3BHK flats in the project viz. Adityavardhan was more than 1000 sq. ft, which was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilt-up area calculation of the flats. Based on his aforesaid observations, it was concluded by the A.O that the built-up area of certain residential units of the assessee exceeded 1000 sq. feet. In order to support his aforesaid observation the A.O relied on the order of the ITAT, Mumbai in the case of ITO Vs. Siddhivinayak Homes, ITA No. 8726/Mum/2010, A.Y 2007-08 ITA No. 5986/Mum/2011, A.Y 2008-09. Accordingly, the A.O concluded that as the area of certain flats constructed by the assessee exceeded the prescribed area of 1000 sq. feet, therefore, the assessee had violated the provisions of Sec. 80IB(10)(c) of the Act. 34. On appeal, the CIT(A) after deliberating on the facts borne from the records, observed, that the assessee had not sold the dry balcony area to the purchasers and the same represented service projections. It was further observed by him that MCGM had considered the built-up area of the residential flats in the building for the purpose of approving the building plan. Further, it was noticed by the CIT(A) that the assessee s architect had also certified that the built-up area of each flat did not exceed 1000 sq. ft. In the backdrop of his aforesaid observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case before us, it is the claim of the assessee that the projections like dry balcony are not be added to the built-up area of the flats for the reason viz. (i). that as the dry balcony area was 6 inches below the floor area, therefore, the same not being at the floor level was not includible in the built-up area as defined in Sec. 80IB(14)(a) of the Act; (ii). that as per the certificate of the architect the area of the 3 BHK flats was 997 sq. ft; and (iii). that as per Index II of 3 BHK flats the dry balcony was not sold to the flat purchasers. On the contrary, the A.O was of the view that the dry balcony was liable to be included for computing the built-up area as defined in Sec. 80IB(14)(a) of the Act, for the reason viz. (i). the dry balcony which was 4 to 6 inches below the floor level implied that it was an extended area which could be very well utilized as carpet area; (ii). that as per the brochures of the assessee company and also the Index II of the 3 BHK flats the balconies and projections provided by the assessee had been sold to the flat purchasers; (iii). that as the projections and balconies are not in the nature of a common area shared wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the issue had not been appreciated in the right perspective by the CIT(A). As per the mandate of Sec. 80IB(10)(c) the maximum built-up area of the residential unit in the housing project of the assessee viz. Adityavardhan was not to exceed one thousand square feet. Finance (No.2) Act, 2004 w.e.f 01.04.2005 had provided for a definition of the term built-up area in Sec. 80IB(14)(a) of the Act. As per the definition of built-up area in Sec. 80IB(14)(a), the same would include the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but would not include the common areas shared with other residential units. In sum and substance, the built-up area would include inner measurements of a residential unit on the floor level added by thickness of a wall as also projections and balconies. This would however, exclude the common areas shared with other residential units. As such, in order to be a part of the built-up area, the same must be part of the inner measurements of a residential unit or projection or balcony. In our considered view, the claim of the assessee that as the dry balco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tached to the flats. As noticed by us hereinabove, the Hon ble Supreme Court in the case of CIT Vs. Sarkar Builders (2015) 375 ITR 392 (SC) , considering the legislative intent behind defining of the term built-up area by way of insertion of Section 80IB(14)(a) vide the Finance (No.2) Act, 2004 w.e.f 01.04.2005, had observed, that prior to defining of the term built-up area , in many of the rules and regulations of the local authority approving the housing project built-up area did not include projections and balconies. Probably, taking advantage of this fact, builders provided large balconies and projections making the residential units far bigger than as stipulated in Section 80IB(10), and yet claimed the deduction under the said provision. As observed by the Hon ble Apex Court, in order to plug this lacuna, clause (a) was inserted in Section 80IB(14) defining the words built-up area to mean the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls, but did not include the common areas shared with other residential units. In our considered view, if the assessee in the case befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the said section allow deduction only upon completion of the entire project and not on part project or on part fulfillment of the requirements stated in the said section, we are afraid does not find favor with us. Although, we find that the CIT(A) after observing that area of neither of the flat in the assessee s project had exceeded the prescribed area of 1000 sq. feet, had thus not given any finding as regards allowing of deduction u/s 80IB(10) on the flats whose built-up area did not exceed one thousand square feet, but then, as the said issue will have a bearing in the course of set aside proceedings before the A.O, therefore, we shall deal with the same. In our considered view, within a composite housing project, where there are eligible and ineligible units, the assessee can claim deduction in respect of eligible units in the project and claim proportionate relief in the units satisfying the extent of the built-up area. Our aforesaid view is fortified by the judgment of the Hon ble High Court of Madras in the case of Viswas Promoters Private Limited Vs. ACIT (2013) 214 Taxman 524 (Mad) and CIT Vs. Elegant Estates (2016) 383 ITR 49 (Mad). Also, a similar view had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. We thus not finding any infirmity in the view taken by the CIT((A) in context of the issue under consideration uphold his observations to the said extent. The Ground of appeal No. 3 raised by the revenue is dismissed. 41. Resultantly, the appeal of the revenue is partly allowed in terms of our aforesaid observations. A.Y 2012-13 [ITA No. 4730/Mum/2016 (Assessee s appeal)] [ITA No. 5523/Mum/2016 (Revenue appeal)] 42. We shall now advert to the cross-appeals for A.Y 2012-13. The assessee has assailed the impugned order on the following effective grounds of appeal before us: 1. The CIT(A) erred in upholding the disallowance of deduction under section 80-IB(10) of the Act to the extent of ₹ 4,52,95,102/-. 2. The CIT(A) erred in holding that built-up area of Flat Nos. 1,2 and 7 on each floor of the building exceeded the maximum built-up area of 1000 sq. ft. In violation of section 80-IB(10)(c) of the Act. 3. The CIT(A) failed to appreciate that the area of 30 sq, ft. Referred to as dry balcony area actually represented a service projection constructed from the point of view of servicing the building. The said area was 6 to 7 below t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) is not applicable to this case. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying upon the decision in the case of M/s Ekta Sankalp Developers, Mumbai, when the facts of the case are different in as much as M/s Ekta Sankalp Developers had complied with all other eligible conditions of Sec. 80IB(10) the only dispute was in respect of 80IB(10)(c), whereas in the instant matter the eligibility conditions of Sec. 80IB(10(a)(iii) are not satisfied and therefore, the decision of M/s Ekta Sankalp Developers is not directly applicable. Further, the Revenue is also contesting the decision in the case of M/s Ekta Sankalp Developers before the Hon ble Bombay High Court. 6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing proportionate deduction under section 80IB(10) of the Act to the assessee when provisions of section 80IB(10) of the Act allow deduction only upon completion of the entire project and not on part project or on part fulfilment of the requirements stated in the provisions of the section. 7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t obtained by the assessee from MCGM, therefore, the project viz. Adityavardhan could not be held to have been completed within the stipulated time period as envisaged in Sec. 80IB(10)(a)(iii) i.e latest by 31.03.2012, the same did not find favour with the CIT(A). It was observed by the CIT(A) that the withholding of the aforesaid certificates by the local authority was because the assessee which as per the approved plan was mandated to construct and hand over a 18.3 mtr wide DP road on the South side of the plot had failed to comply with the said requirement. On a perusal of the facts borne from the records, it was observed by the CIT(A) that the construction of the aforesaid road was being obstructed by a power pylon transmission line belonging to Tata Electric Company, which had to be relocated before the road could be constructed. It was further observed by the CIT(A) that despite persuasion by the assessee the aforesaid power company had refused to relocate or shift the power pylon. After deliberating at length on the facts attending to the issue under consideration, it was observed by the CIT(A) that as it was impossible on the part of the assessee to remove the hill for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 80IB(10) was qua the residential units and not qua the project. Accordingly, it was observed by the CIT(A) that only the residential units which exceeded the prescribed built-up area would not be eligible for deduction u/s 80IB(10) of the Act. Observing, that the dry balcony area of 30 sq. ft was to be included in the built-up area of the residential units, the CIT(A) on the basis of details gathered noticed that only flats nos. 1, 2 7 on each of the 10 floors of the project exceeded the limit of 1000 sq. ft. (if the dry balcony area of 30 sq. ft was added). Accordingly, it was observed by the CIT(A) that a total of 30 flats out of the total 108 flats exceeded the prescribed area limit. As regards quantification of the assessee s claim of deduction u/s 80IB(10), in so far the same pertained to the residential units whose built-up area exceeded the prescribed area of 1000 sq. ft, the CIT(A) called for the details such as the total area sold and the A.Ys in which the profits from the sale were recognized, which were furnished by the assessee as under: Assessment Year B/U Area Sold During the Year (Sq/ft) B/U Area i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017. In the preceding year, the CIT(A) finding favour with the claim of the assessee that the dry balcony was not to be included while calculating the built-up area of the flats in the assessee s project, had concluded, that the area of all the flats was well within the prescribed limit of 1000 sq.ft. As we have after exhaustive deliberations not found favour with the manner as per which the CIT(A) had construed the term built-up area which stands defined in Sec. 80IB(14)(a), therefore, with specific directions we have restored the matter to the file of the A.O for fresh adjudication. Accordingly, we are of the considered view that on the same terms the matter in the present appeal also requires to be restored to the file of the A.O, who is directed to adjudicate the issue afresh considering our observations/directions recorded while disposing off the Grounds of appeal Nos. 2 5 in ITA No. 5912/Mum/2017 raised in the revenue s appeal in the assessee s own case for the immediately preceding year i.e A.Y 2011-12. On the same terms, we may herein observe that in case the flat purchasers are de facto in exclusive possession/enjoyment of the dry balcony attached with the flat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal Nos. 2,3 and 4 raised by the revenue are allowed in terms of our aforesaid observations. 52. We shall now take up the claim of the revenue that the CIT(A) had erred in allowing pro rata deduction u/s 80IB(10) to the assessee as regards the residential units whose built-up area did not exceed the prescribed limit of 1000 sq. ft. As the said issue had been adjudicated by us in the appeal filed by the revenue in the case of the assessee for the immediately preceding year i.e A.Y 2011-12 in ITA No. 5912/Mum/2017, therefore, our order passed while disposing off the Ground of appeal No. 5 in revenue s appeal in the assessee s own case for A.Y 2011-12, ITA No. 5912/Mum/2017, shall apply mutatis mutandis for the purpose of disposing off the Grounds of appeal Nos. 6 7 of the present appeal of the revenue for A.Y 2012-13. Accordingly, the Grounds of appeal No. 6 7 raised by the revenue are on the same terms dismissed. 53. We shall now advert to the claim of the revenue that the CIT(A) had erred in relying on the order of the ITAT, Mumbai in the case of ACIT Vs. Ekta Sankalp Developers (2015) 152 ITD 805 (Mum), while deciding the issue as regards pro-rata allowing of deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssailed on the following effective grounds of appeal before us: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction u/s 80IB(10) of the IT Act, 1961 to the assessee when the assessee failed to produce the Building Completing Certificate and the Occupation Certificate as required u/ 80IB(10)(a)(iii) r.w explanation (ii) of the IT Act, 1961. 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction u/s 80IB(10) of the IT Act, 1961 to the assessee in spite of fact that the assessee did not fulfil the conditions laid down under the section 80IB(10)(c) of IT Act, as some of the flats were more than the prescribed area. 3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction u/s 80IB(1) of the IT Act, 1961 to the assessee in spite of the fact that the assessee has claimed high gross profit of 63.08% when the assessee had not fulfilled all the conditions laid down in the provisions of the Act. 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its housing project viz. Adityavardhan within the stipulated period contemplated in Sec. 80IB(10)(a)(iii) of the Act; and (b). that the built up area of all 3 BHK flats in the said project was more than 1000 sq. ft. which was in violation of the conditions specified in Sec. 80IB(10)(c) of the Act. In the backdrop of the aforesaid facts, the A.O holding a conviction that the assessee had failed to comply with the provisions of Sec. 80IB(10)(a) and Sec. 80IB(10)(c) of the Act, disallowed its claim for deduction of ₹ 7,85,16,411/- raised u/s 80IB(10) of the Act. 59. Aggrieved, the assessee assailed the assessment order before the CIT(A). As regards the declining of the assessee s claim for deduction u/s 80IB(10) by the A.O, for the reason, that as the Building Completion Certificate and Occupation Certificate was not obtained by the assessee from MCGM, therefore, the project viz. Adityavardhan could not be held to have been completed within the stipulated time period as envisaged in Sec. 80IB(10)(a)(iii) i.e latest by 31.03.2012, the same did not find favour with the CIT(A). It was observed by the CIT(A) that the withholding of the aforesaid certificates by the loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -up area of the residential flats in the building for the purpose of approving the building plan. Further, it was noticed by the CIT(A) that the assessee s architect had also certified that the built-up area of each flat did not exceed 1000 sq. ft. In the backdrop of his aforesaid observations the CIT(A) concluded that there was no violation of Sec. 80IB(10)(c) as was alleged by the A.O. 61. Accordingly, on the basis of his aforesaid deliberations the CIT(A) allowed the appeal of the assessee. 62. The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. We shall first advert to the claim of the revenue that the CIT(A) had erred in concluding that the assessee had duly complied with the provisions of Sec. 80IB(10)(a)(iii) of the Act, and completed the construction of its housing project within the prescribed limit. As the facts and the issue involved in the present appeal of the assessee in context of the issue under consideration remains the same as were there before us in the appeal of the revenue in the assessee s own case for the preceding year i.e A.Y 2011-12, in ITA No. 5912/Mum/2017, therefore, our order therein passed while d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee s own case for the preceding year i.e A.Y 2011-12. In case, the flat purchaser is de facto in exclusive possession/enjoyment of the dry balcony attached with the flat, then the area of the same shall be included while computing the built-up area of such flat. However, if such projection is either in the nature of a service projection to be used for servicing the building or carrying out repairs of the building, or a common area shared with the other residential units, then the same would not be included in the built-up area of the flat. The Grounds of appeal No. 2 and 5 are allowed for statistical purposes. 64. We shall now advert to the grievance of the revenue that the CIT(A) has erred in allowing deduction u/s 80IB(10) of the Act, despite the fact that the assessee had claimed high gross profit of 63.08%. As the said issue had been adjudicated by us in the appeal filed by the revenue in the case of the assessee for the preceding year i.e A.Y 2011-12 in ITA No. 5912/Mum/2017, therefore, our order passed while disposing off the Ground of appeal No. 3 in revenue s appeal in the assessee s own case for A.Y 2011-12, ITA No. 5912/Mum/2017, shall apply mutatis mutandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anwhile (emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment . In the rule so framed, as a result of these directions, the expression ordinarily has been inserted in the requirement to pronounce the order within a period of 90 days. The question then arises whether or not the passing of this order, beyond a period of ninety days in the case before us was necessitated by any extraordinary circumstances. 66. We find that the aforesaid issue after exhaustive deliberations had been answered by a coordinate bench of the Tribunal viz. ITAT, Mumbai F Bench in DCIT, Central Circle-3(2), Mumbai Vs. JSW Limited Ors. [ITA No. 6264/Mum/18; dated 14/05/2020, wherein it was observed as under: Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. The epidemic situation b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only in consonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed while calculating the time for disposal of matters made time bound by this Court, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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