9911796707
TMI Blog2020 (3) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) and the Tribunal have arrived at concurrent findings of fact except the project of Pratham Citadel . After taking into consideration the special grounds and circumstances, the ratio of the decision in the case of Shreenath Infrastructure [ 2014 (4) TMI 482 - GUJARAT HIGH COURT ] was applied for allowing the deduction claimed by the assessee under Section80IB(10) of the Act. In respect of the project Pratham Citadel , for which, the CIT(A) disallowed the claim of the assessee under Section80IB(10) of the Act, the deduction in respect of utilization of FSI, the Tribunal has restored the matter back to the file of Assessing Officer for deciding afresh for examination and verification of the details to be furnished by the assessee so as to consider whether there is any special reasons for underutilization of FSI as enunciated in the case of Shreenath Infrastructure [ 2014 (4) TMI 482 - GUJARAT HIGH COURT ] When both the CIT(A) and the Tribunal have arrived at concurrent findings of fact on the basis of the material and records, none of the questions nos.2(d), (e) and (f) could be termed as substantial question of law. The appeal, therefore, fails and stands dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... nements? (e) Whether in the facts and circumstances of the case, the learned ITAT has erred in law and on facts in upholding the decision of Ld. CIT(A) in allowing the deduction u/s.80IB(10) ignoring the facts that in Pratham Residency, Pratham Vatika and Pratham Vistas, assessee has exploited the project land to the maximum keeping in view the various legal and regulatory impediments and the assessee firm had sufficient reasons for not being able to fully utilize the FSI in project? (f) Whether in the facts and circumstances of the case, the learned ITAT has erred in law and on facts in upholding the decision of CIT(A) in allowing the deduction u/s.80IB(10) ignoring the fact that the only the profits which are derived from development and construction of housing units are eligible for benefit u/s.80IB(10) and not the profits which are attributable to the FSI that was sold as such without developing and constructing?" 3. So far as the question nos.2(a), (b) and (c) are concerned, similar questions are considered in the Tax Appeal No.25 of 2020 and similar questions are not admitted by the order in the Tax Appeal No.25 of 2020 of even date. Therefore, the question nos.2(a), (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilization of FSI is discussed at length. The Hon'ble ITAT has followed the decision of the Hon'ble Coordinate Bench in the case of Radhe Developers & Ors. The decision of Radhe Developers & Ors. is overruled by the decision of Moon Star Developers (supra) and, therefore, I do not find any merit in holding that the issue regarding under utilization of FSI was duly considered in the earlier years and that it is a matter which is covered by the order of the Hon'ble ITAT in appellant's own case. 4.3.2 On merits of the case, the Authorized Representative has made further submissions before me regarding the reasons why the full FSI could not utilize in the four projects. This was particularly in light of the Gujarat High Courts pronouncements in the case of Shreenath Infrastructure (Tax Appeal No.147 of 2014 with Tax Appeal No.148 of 2014) wherein, the Hon'ble High Court while referring to the case of Moon Star Developers (Supra) has remarked as under: "Marginal under utilization of FSI certainly cannot be a ground for rejecting the claim under section 80IB(10) of the Act. Even if there has been considerable under utilization, if the assessee can point out any sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject roads) there as requirements for distance of construction line from the center of the road. For example, where the developer incorporates a naliya road (called a village road basically meant for drainage of rain water) into a road as a part of the housing scheme, the requirement in the GDCR is that no construction can be made up to a distance of six meters from the center of the naliya road. Similarly, where an overhead high tension electricity line passes, no construction is permitted up to a distance of 17.5 meters from the center of such line. e. The developer tries to fit in the maximum number of housing units in the remaining area which is plotted for the individual houses. The ground coverage for the houses is kept to the maximum permissible in law. However, issues like architectural aesthetics and marketability of the houses, sometimes concessions have to be made. f. In the various projects undertaken during the year by the appellant the ground coverage is as under: Project Name No. of Residential Units Available Ground Floor Coverage Actual Ground Floor Coverage Utilization % Ahmedabad Pratham Vatika 100 7604 7283 96 Pratham Residency 285 19021 1403 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resulting in a very odd shape for the project. This odd shape resulted in nooks and crannies and keeping in mind the need to keep the required Common Plot and the 7.5 meter wise roads, the maximum number of residential units which could be fitted in the plot came to 285. After the project drawings was approved a Town Planning Scheme No.40, demarcating the final plot/s for the project was announced. According to the revised TP Scheme there was substantial delineation which has affected the plot size of a number of plots. Examples are: 1. Straightening of the boundary between Plot No.261 and 268 which reduces the area of individual plots in the section. 2. Similarly, the size of Plot Nos.175 to 179 has also reduced by demarcating of fresh Final Plot Line. 3. Similarly, bulge between Plot Nos.46, 47, 48 & 49 has been straightened with a result that the plot area available to those unit holders is reduced. 4. Similarly, there is a straightening of the line on the east of the project, where, Plot Nos.80 & 81 have been pruned. 5. It will not be out of place to state here that a portion of the common plot of the society shown as common plot no.3 in the brochure has been proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plots, which are covered by the reasons for under utilization is 3426.81 square meteres. This leaves balance plot area of 27063.68 square meters. The FSI available on the same works out to 43301.89 square meters, as against this the actual utilization of FSI in Pratham Residency project is 32279.28 square meters, i.e. utilization is 75% of the available FSI. Your honour will kindly appreciate that the underutilization was in the marginal range of 25% to 30%. The judgment of the Hon. Gujarat High Court in the case of Shreenath Developers would apply to the facts of this project and therefore, the marginal under utilization would not be hit by disallowance of deduction u/s.80IB(10) of the Act." 6.4 In view of the various reasons cited and the explanation given above, I agree with the AR that the appellant had exploited the project land to the maximum keeping in mind the various legal and regulatory impediments and that the Appellant had sufficient reasons for not being able to fully utilize the FSI in the project. Hon'ble Gujarat High Court in the case of Moon Star Developers (supra) has considered utilization of FSI up to 65% as reasonable. However, later on Hon'ble G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as side to side. The only exception are plot Nos.1, 10 & 11 where because of the common plot odd shape has come across leaving space constructing only 3 units there. The row 42 to 51 and 93 to 100 are twin units i.e. conjoined side to side. This is because of the space constraints. Similarly, plot Nos.52 to 62 are twin units conjoined from side to side because of the space limitation. 7.3 The Authorized Representative has also furnished plot wise and projectwise summary of plot size, special reasons for underutilization of FSI as enunciated in the case of Shreenath Infrastructure (supra). This summary is placed as Annexure 'B' of the paper book and from that it transpires that Gross FSI available with the appellant is 21,120 Sqm and total 1221 Sqm is to be reduced considering special reasons forcing underutilization of FSI and this eluded town planning restriction, irregular shape of particular plots and layout of the project. Considering these special reasons, available FSI remains 17,843 Sqm. whereas FSI utilized in this project is 13,588.04 Sqm. This is verifiable from the plotwise details submitted by the Authorized Representative along with copies of maps and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. The defect in the plot is that towards south west of the plot there is 220KV high tension electricity power line passing and towards the south of the plot in the middle there is a naliya road which extends almost 8.0 meter inside the project. As per the guidelines, a margin of 17.5 meter from the center of the high tension line is required to be kept before any construction work can be done. 8.2 It is also contended before me that there is a legal requirement that no construction is permitted up to a distance of 6 meters from the center of the naliya (drain) road line. On examination of the site plan furnished which shows that the developer of the project had to realign main road leading into the project with 7.5 meter road so as to avail the best possible constructive area. Eight plots are affected by these margin requirements. While most of the residential units are twin units, there are four plots on the edge of the project which are single units in view of the fact that there was insufficient place to pace a twin unit. There is one single unit on the side of the high tension electricity line. There are three other units where extra land was available because of the odd sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the existence of the high tension electricity line passing on the plot and the naliya road necessitating higher margins. I am of the opinion that the Appellant had sufficient reasons for not being able to fully utilize the FSI in the project. Hon'ble Gujarat High Court in the case of Moon Star Developers (Supra) has considered utilization of FSI up to 65% as reasonable. However, later on Hon'ble Gujarat High Court in the case of Shreenath Infrastructure (supra) has allowed deduction due to special reasons for underutilization of FSI and after considering the same FSI utilization becomes 70% as mentioned by the Ld. Authorized Representative in above para. Therefore, keeping in mind this decision of Shreenath Infrastructure (supra), I hold that the profits from the Pratham Residency project are fully eligible for deduction under section 80IB(10) of the Income Tax Act, 1961. The Assessing Officer is accordingly directed to allow the deduction under the said section as claimed by the appellant. In view of the aforesaid discussion, the Assessing Officer is directed to delete the addition made on account of the profit attributable to unutilized FSI of ₹ 3,00,39,403/for P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Plots in Sq.mtr. Excess Plot Area in view of limitations Balance Land Area FSI on Balance land Actual Utilization of FSI Utilization % Pratham Citadel 11163 751 10412 16658 9139 55.00% 9.7 I have gone through the details of the Project and also the various explanations given to me during the course of the appeal proceedings. From the representations, it is seen that Pratham Citadel Scheme consisted of 66 Residential Units on Plot Area of 11163 Sq. Mtrs. According to the Ld. Authorized Representative, as per the Town Planning Scheme, plot numbers 14, 32, 33, 34, 65 and 66 were getting affected in so far as the construction of the same was concerned and that a revised/renewal permission was required to commence construction on the said plots. In case of plot nos.43, 55, 56, 62, 63 and 64, it is submitted that the same are at the edge of the project and the shape of the plots are odd and in view of the shape of the plot of the entire project, the plot nos.43, 55, 56, 62, 63 and 64 were different in size as compared to the rest of the plots. I do not find merit in the submissions made before me in respect of the plots listed supra and hold that though, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Star Developers (supra). Even after considering special circumstances (viz. various regulatory restrictions), as propounded by later decision of Hon'ble Gujarat High Court in the case of Shreenath Infrastructure (Supra) the underutilization of FSI is worked out ast 6,193 Sqm. i.e. 45.30%, which in my mind, does not entitle the appellant any relief and, therefore, disallowance on account of underutilization of FSI as calculated by the Assessing Officer at ₹ 10,07,054/in respect of Pratham Citadel is upheld and this ground of appeal is dismissed." 6. Being aggrieved by order of the CIT(A), Revenue went in appeal before the Tribunal. The assessee also filed cross-objections. The Tribunal after considering the findings arrived at by the CIT(A) has held as under: "13. We have heard both the sides and perused the material on record carefully. We have gone through the aforesaid mentioned finding of ld. CIT(A). It is noticed that the ld. CIT(A) has considered the different circumstances in respect of different project mentioned by the assessee i.e. land demarcated for road, deduction in the size of plot, shape of the plot etc. We have further noticed that ld. CIT(A) has consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessees have made any special ground for nonutilization of the FSI." In the light of the above fact and findings, we observed that the ld. CIT(A) is justified in allowing the appeal of the assessee for deduction in respect of unutilized FSI except Pratham Citadel after taking into consideration the special grounds and circumstances as elaborated supra in his findings. Therefore, we do not find any merit in the this ground of appeal of the revenue and the same are dismissed. Considering the similar facts and circumstances, ground of appeal vide ITA 3086/Ahd/2016 is partly allowed as per finding of ld. CIT(A) given above except the claim of 80IB(10) in respect of unutilized FSI from the project claimed Pratham Citadel. In respect of Project 1. Pratham Vatika (Ahmedabad), 2. Pratham Vistas and 3. Pratham Residency in assessment year 2011-12 and all the above projects in assessment year 2012-13 including Pratham Srushti on similar facts and circumstances, ld. CIT(A) has allowed deduction due to special reasons for underutilization of FSI as enunciated in the case of Shreenath Infrastructure. In view of the above facts and circumstances, we do not find any infirmity in the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
