TMI Blog2011 (7) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of two projects viz Amrit Dham and Vidhi Complex and the projects stand as per plant on 4918.68 sq. mtr and 3461.68 sq. mtr respectively. The original larger plan had been approved by the Municipal authorities for construction on 18761.36 sq. mtr of residential space and 778.94 sq. mtr for commercial area. The assessee had acquired development rights in respect of Amrit Dham comprising of two buildings namely Bldg. No. 9 10 and Vidhi Complex consisting of Bldg. Nos. 11 to 14. 4. The AO during the assessment proceedings found that the project Amrit Dham was having a plot area of 1456.92 sq. mtr and Vidhi Complex 3461.98 sq. mtrs. The statement of one of the partners and the architect were recorded during the assessment proceedings. In respect of A.Y.2005-06 Shri Dilip Patel, one of the partners, admitted to the facts of the plan having been approved as commercial cum residential project. Shri R.G. Modak, the architect admitted the project Vidhi Complex to have been built up on a net plot area of 3461.68 sq. mtr, after the space for DP road is reduced. 5. The AO disallowed the claim of deduction u/s. 80IB(10) for the following reason: 1) The assessee has not fulf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions made by the Assessee before the CIT(A) that as far as the Project Vidhi complex is concerned, there was no commercial area whatsoever. Eighteen shops admeasuring in all 2700 sq. ft. was part of Amurt Dham project for which the Assessee did not claim any deduction u/s.80-IB(10) of the Act. It was the further submission of the Assessee that existence of shops in certain buildings of the same sanctioned layout but not forming part of the housing project for which deduction u/s.80-IB(10) of the Act is claimed will not in any manner vitiate the claim for deduction u/s.80-IB(10) of the Act. In this regard the Assessee relied on the decision of the Hon ble Mumbai Bench of the Tribunal in the case of ITAT Mumbai in the case of Saroj Sales Organization Vs. ITO 115 TTJ 485 (mum). The case of Saroj Sales Organization (supra) was a case of a Builder where there were two projects being constructed by name Nisarg and Breezy Corner. For AY 05-06, The Assessee claimed deduction u/s.80-IB(10) of the Act on the profits of Nisarg Project. The AO treated both the projects as one project and found that in the project Breezy corner the built up area of some of flats were more than 1000 sq.ft. an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .P.Road. On this issue the CIT(A) held as follows:- 5.2 Ground of appeal No.2: This ground of appeal is related to the disallowance of the claim of deduction u/s. 80 IB(10) at ₹ 34,57,156/- in respect of the project called Vidhi complex . As stated in the assessment order, the appellant was engaged in the construction of two buildings known as Amurt Dham and Vidhi Complex . As per the appellant, Vidhi Complex was a project, which was 80 IB(10) compliant. The project Amurt Dham , was considered to be 80 IB(10) non compliant. The appellant had, therefore claimed deduction u/s. 80 IB (10) only in respect of Vidhi Complex . The project Vidhi Complex was undoubtedly a housing project of the appellant, which was being constructed on a part of land admeasuring 4746.26 sq. mtrs inclusive of DP road. After excluding the area occupied by the DP road, the net area of the plot was 3461.68 sq. mtrs only. This fact was confirmed by the partner of the firm as well as the architect, Mr. R.L. Modak. This clearly means that the project was being constructed on a plot of land which was less than one acre in area. The mandatory condition for a project to become eligible for dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which shows that the area of the plot is 4600 sq. metres. It further shows that there is a deduction 656.75 sq. metres for road set back. This deduction is thereafter set off by an addition of equivalent area allowed by MNP. The net area of the plot after the deduction of the area for road set back has been shown at 3943.25 sq. metres. Thereafter there is a deduction of 591.49 sq. metres for recreation open space and 411 sq. metres for internal road . The net plot area is then shown at 2940.76 sq. metres. The area of 656.75 sq. metres, which was earlier deducted for road set back, is added and the total area plot is shown at 3597.51 sq. metres. It will be seen that the total plot area has been worked out by the MNP at 3597.51 sq.metres only after deducting 591.49 sq. metres for recreation open space. The recreation open space is however part of the plot and though for the purpose of municipal regulations, a portion of the plot has to be reserved as a recreation area but for the purpose of clause (b) of section 80IB(10), the recreation area has also to be considered as part of the plot only. There is no condition in the clause that recreation area has to be excluded while examinin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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