TMI Blog2016 (2) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... ing project - HELD THAT:- No merit in this plea of the Revenue. The Tribunal in numerous cases has allowed proportionate deduction u/s. 80IB(10) on eligible units of a housing projects and the same have been upheld by the Hon'ble High Courts. Thus, the question whether proportionate deduction can be allowed u/s. 80IB(10) to the eligible units of a housing project is no more res-integra In M/S. ARUN EXCELLO FOUNDATIONS PVT. LTD [ 2012 (12) TMI 415 - MADRAS HIGH COURT] has granted proportionate deduction to the housing project u/s. 80IB(10). The Hon'ble Madras High Court in the case of Viswas Promoters Private Limited Vs. ACIT [ 2012 (11) TMI 1117 - MADRAS HIGH COURT] has held that the assessee is entitled to claim proportionate relief on the units satisfying the extent of built up area - assessee is eligible to claim deduction in respect of the residential units on which the Commissioner of Income Tax (Appeals) has denied proportionate deduction - Decided in favour of assessee. - ITA No. 991/PN/2014 - - - Dated:- 15-2-2016 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For the Appellant : Shri V.L. Jain For the Respondent : Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s will not be applicable to the assessee. The assessee made an alternate prayer, without prejudice to its primary submissions, proportionate deduction u/s. 80IB(10) may be granted on the eligible units in the project. The Commissioner of Income Tax (Appeals) after analyzing the facts of the case rejected the first prayer of the assessee in the light of the amendment to section 80IB(10) vide which Clause (e) and (f) were inserted by the Finance Act, 2009. However, the Commissioner of Income Tax (Appeals) held that the assessee is eligible to claim prorata deduction u/s. 80IB(10) on the remaining units. Against these findings of the Commissioner of Income Tax (Appeals), both the Revenue and the assessee are in appeal before the Tribunal. 3. The Revenue has raised the following ground in its appeal: 1. On the facts and in the circumstances of the case the CIT(A) has erred in allowing pro-rata deduction on eligible units u/s 80IB(10) of IT Act 1961 for the project though the assessee has violated the conditions of clausee of Section 80IB(10) of I.T. Act 1961. 2. On the facts and in the circumstances of the case the CIT(A) has erred in allowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilt up area having 1500 sq.ft. Even though the residential units have been merged, by the vendees still they are independent flats and have been approved by the authorities as independent units. All the units have independent electricity connection and are assessed to house tax separately. The flats have been merged post sales. The ld. AR contended that registered Agreement to Sale were executed with the vendees of the flat prior to the amendment brought in by the Finance (No. 2) Act, 2009. The Finance Bill was passed on 19-08-2009 and the registered Agreement to Sale were executed on 06-04-2009. Thus, the provisions of amended section 80IB(10) cannot be applied on the assessee. The ld. AR in support of his submissions placed reliance on the following decisions: i. CIT Vs. Sarkar Builders, 119 DTR 241 (SC); ii. M/s. B.U. Bhandari Nandgude Patil Associates VS, ITO in ITA Nos. 1438 1439/PN/2009 for assessment years 2005-06 and 2006-07 decided on 31-10-2012; iii. ACIT Vs. M/s. Shri Ostwal Builders Ltd. in ITA Nos. 7292 7293/PN/2008 for assessment years 2003-04 and 2004-05 decided on 17-02-2010. Therefore, in view of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall not be eligible to claim deduction u/s. 80IB(10) on a project if more than one residential unit in the housing project is allotted to any individual or the spouse or the minor children of such individual, the HUF wherein such individual is a Karta. The above clauses were inserted w.e.f. 01-04-2010. 7. In the present case undisputedly the assessee has allotted Flat Nos. 15 and 16 in Building-B, to Shri Ajay Kate. Flat Nos. 1 and 2 on 1st floor and Flat Nos. 5 and 6 on 3rd floor in Building-A to Shri Kishore Pahuja. Flat Nos. 3 and 4 on the 2nd floor, and 7 and 8 on the 4th floor to Ms. Meena Pahuja. The allottee Shri Kishore Pahuja and Ms. Meena Pahuja have horizontally joined the flats on the respective floors. The Assessing Officer denied deduction u/s. 80IB(10) to the assessee as newly inserted provisions of section 80IB(10) were violated. A perusal of the documents on record would show that the assessee has allotted Flat Nos. 15 and 16 in Building-B to Shri Ajay Kate in terms of development agreement dated 30-11-2006. Shri Ajay Kate was one of the co-owners of the land on which the residential project was developed by the assessee. The flats to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied to the transactions carried out before 19-08-2009 and accordingly deduction u/s. 80IB(10) cannot be denied to the assessee only for the reason that multiple residential units were allotted to an individual prior to the aforesaid date. Accordingly, we find merit in the appeal of the assessee and the same is allowed. ITA No. 991/PN/2014 (Revenue s Appeal) 10. The Revenue in its appeal has assailed the findings of Commissioner of Income Tax (Appeals) in allowing proportionate deduction to the assessee in respect of eligible units of housing project. The contention of Revenue is that there is no concept of allowing proportionate deduction u/s. 80IB(10) to a housing project. We do not find any merit in this plea of the Revenue. The Tribunal in numerous cases has allowed proportionate deduction u/s. 80IB(10) on eligible units of a housing projects and the same have been upheld by the Hon'ble High Courts. Thus, the question whether proportionate deduction can be allowed u/s. 80IB(10) to the eligible units of a housing project is no more res-integra. 11. The Hon'ble Madras High Court in the case of CIT Vs. Arun Excello Foundation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -up area of 1500 sq.ft, per se, would not result in nullifying the claim of the assessee for the entire projects. Consequently, in respect of each of the blocks, the assessee is entitled to have the benefit of deduction in respect of residential units satisfying the requirement under Section 80IB(10) (c) of the Act. In so holding, we also agree with the decision of the Bombay High Court in CIT v. Vandana Properties [2012] 206 Taxman 584/19 taxmann.com 316, which was decided by the Bombay High Court on similar lines as in the assessee's case before us. Similar view was taken by the Tribunal in the case of Sanghvi and Doshi Vs. ITO reported as 18 ITR (Trib.) 608. The Hon'ble Madras High Court in appeal CIT Vs. Sanghvi and Doshi Enterprises reported as 29 taxmann.com, 386 (Mad.) has affirmed the view taken by the Tribunal. 12. Be that as it may, we have allowed the appeal of assessee and have held that the assessee is eligible to claim deduction in respect of the residential units on which the Commissioner of Income Tax (Appeals) has denied proportionate deduction. Thus, in view of our above findings, the assessee is eligible to claim deduction u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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