TMI Blog2017 (4) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... n within time limit provided in its notice under section 153A is concerned, the assessee has already filed regular return which was revised within time granted, and claim was made in connection with that return, and therefore this is not a valid reason assigned by the AO and this aspect has rightly been considered by the ld.CIT(A). Thus, out of four reasons assigned by the AO three are peripheral procedural reasons wherein the assessee has not committed any default which would statutorily prohibit the assessee for claiming such deduction. The last reasons remained to be dealt with is whether, if an assessee has violated conditions require to be fulfilled under section 80IB qua two towers then it would attract a disqualification for the remaining tower also. We find that as far construction raised by the assessee on TPS No.2, where it has raised six towers is concerned, it has not committed any irregularity or default. In the judgment replied by the ld.counsel for the assessee it has been recognized that if the assessee has completed the construction and fulfilled all the requirements for some of the units or towers in a housing project proportionate deduction would be granted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried out at the residential premises of the partners and business premises of the assessee. Accordingly, notices under section 153A were issued upon the assessee in all these four years. The assessee has filed returns in response to these notices on 18.10.2011. It is pertinent to mention that in the Asstt.Year 2008-09, the assessee has original declared income at ₹ 76,98,600/-. This return was revised on 30.11.2010 showing a total income at ₹ 3,08,66,120/-. In response to the notice under section 153A, the assessee has reiterated these amounts in the returns filed on 18.10.2011. Under similar circumstances, original returns were revised in all other years and those very amounts were again reiterated in the returns filed in response to notice under section 153A. During the course of assessment proceedings, the assessee has claimed deduction under section 80IB of the Act. In support of its claim, it has submitted a note which has duly been reproduced by the AO. This note has been filed before the ld.CIT(A) also, and it has been reproduced from page no.8 to 19 of the impugned order. Except variation in the quantum, there is no dispute on facts in this note rather it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. i.e. 5.567 acres, consisting of 2 different plots of land situated at Vill. Vesu, Dist. Surat. The detail of these 2 plots of land is as follows. (i) F. P. No. 107, 108 109, T. P. S. No. 2, admeasuring 15034 sq.mtrs. i.e. 3.715 acre and (ii) F. P. No. 05, T. P. S. No. 7, admeasuring 7495 sq. mtrs. i.e.1.852 acre. On the first plot of land bearing T. P. S. No. 2, F.P. No. 107, 108 109, six towers i.e. A, B, E, F, G H are constructed wherein - The land area is 15034 sq. mtrs. i.e. 3.715 acre which is more than 1 acre. - There are no commercial shops - Each of the flats in alI these 6 towers are having built up area of less then 1500sq. fts. - The construction has also commenced and has even been completed within the specified time. Thus, the said project consisting of 6 towers is considered as an 80IB(10) project fulfilling all the statutory conditions as laid down under the Act. Whereas, on the second plot of land bearing T. P. S. No. 7, P.P. No. 5, the other two towers i.e. C D are constructed wherein the land area is 7495 sq. mtr. of land i.e. 1.852 acres which is also more than 1 acre. There are no commercial sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jyoti Apartment has commenced after the specified date of 30-09-1998 and BUG has been obtained on 15-05-2009 for 4 towers E, F, G H and on 15-05- 2010 for other 2 towers A B, thus the entire 801B project stands completed within 5 years from the end of the financial year in which the housing project was first approved expiring on 31-03- 2012. A Copy of Building Usance Certificate (BUG) dtd. 15-05- 2009 and 15-05-2010 as issued by Local Authority is enclosed herewith in Exhibit- 4. 4 The built-up area of the shops and other commercial establishments included in the project shall not exceed 5% of the aggregate built-up area of the housing project or 2,000 sq. ft. whichever is less. There is no shop or commercial establishment in the said project as can be seen from the approved plan and hence, the subject condition is not at all applicable to the project. 5 The built-up area of each residential unit should not exceed 1500 sq.ft. The detail of built-up area of each flat as per the Building plan approved by the Local Authority is enclosed herewith in Exhibit-5. On going th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse to notice u/s. 153A. It may be noted that for the year under consideration, the appellant firm has claimed deduction u/s. 80IB(10) of the Act at ₹ 1,38,55,205/- in respect of the profit derived from the sale of flats in tower A, B, E, F, G H, out of the total income of ₹ 3,08,66,120/- of the entire firm. The learned AO has failed to appreciate the aforesaid facts and rejected the appellant firm's claim of deduction u/s. 80IB(10) of the Act, on various allegations, which are rebutted herein after. In Para 8(i) on Page No. 20 of the impugned order, the learned AO has alleged that the appellant firm has constructed one common project by the name Ratna Jyoti Apartments where in flats in Towers A, B, E, F, G and H are having built-up area of less than 1500 sq. fts. whereas, flats in Tower C and D are having built-up area of more than 1500 sq. fts. Thus, the appellant firm has built one project and there are no 2 separate projects and therefore, the claim that its single project be treated as 2 different projects is not acceptable. The aforesaid observation of the learned AO is incorrect for the following reasons: Firstly, the appellant firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim for deduction would stand rejected on the entire project. The court further held that it is no doubt true that the Section does not provide any such working of allowing deduction on pro- rata basis yet, this being a deduction provision and there being no such indication that the conditions have to be cumulatively satisfied in the context of the meaning of a 'housing project' to include residential cum commercial complex, it is fair that theproportionate relief has to be read into the provisions, so that deduction provisions are sustained. In view of the above facts and direct decisions applicable thereto, it is most humbly submitted that the learned AO has grossly erred in not granting the benefit of deduction u/s. 80IB(10) of the Act to the project consisting of 6 towers viz. A, B, E, F, G H even though the said project individually satisfies all the requirements as laid down in Section 80IB(10). The learned AO has denied the deduction u/s. 80IB(10) to the said 6 towers on the ground that the flats in the other 2 towers viz. C D are exceeding the built- up area of 1500 sq. ft. without appreciating that the appellant firm has not claimed the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered one project, which cannot be segregated in two parts i.e. one eligible for grant of deduction under section 80IB and other not eligible. Since the assessee violated conditions enumerated in section 80IB in respect of two towers i.e. C and D , therefore, it is not entitled for deduction under section 80IB. He further contended that the assessee originally did not claim this deduction in the return field under section 139(1). The assessee is precluded to claim such deduction in the return filed under section 153A of the Act. Similarly, the assessee has not filed return within time limit given to it in the notice under section 153A of the Act. 8. On the other hand, the ld.counsel for the assessee relied upon the orders of the ld.CIT(A). He further relied upon the following judgments and placed copies of these judgments/orders in the paper book i) CIT v/s B M And Brothers - (Gujarat High Court) (Tax Appeal No. 796 of 2013) ii) M/s. Aakar Associates v/s ITO [ITA No. 2903/Ahd/2008] iii) CIT v/s Arun Excelio Foundations - (Mad) - (2013) 259 CTR 0362 iv) Viswas promoters Private Limited v/s ACIT - (Mad) - (2013) 255 CTR 0149 v) CIT v/s Vandana P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstructed eight high rise towers on this area. On the first plot it has constructed tower bearing no.A, B, E, F, G H, whereas on the plot bearing F.P.No.5 it has constructed towers C and D. The flats constructed in tower C D were having more than 1500 sq.feet area. Therefore, these towers do not qualify the conditions for grant of deduction under section 80IB of the Act. As far as other towers are concerned, the assessee has fulfilled all conditions. The AO has rejected the claim of the assessee on the ground that both the plots are to be taken as a single project, and if the assessee has violated conditions of 80IB(10) qua some of the part of project then it is not entitled for deduction for its remaining part also. Apart from this, one other reason are that (a) the assessee did not file return within the time limit under section 153A in response to the notice, (b) the assessee did not claim deduction under section 80IB(10) of the Act in return filed u/s.139(1) of the Act. On due consideration of the facts and circumstances and objection of the AO, we find that the assessee has filed its regular return within time limit available under section 139(1). It has revised its re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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