2017 (4) TMI 913 - ITAT MUMBAI

Validity of assessment u/s 143(3) r.w.s.153A passed on the non-existing entity - Held that:- The assessment made u/s 143(3) r.w.s.153A are bad in law being nullity in the eyes of law as the search warrant was issued in the name of non-existing entity. - Decided in favour of assessee

Appointment of DVO - Held that:- We find that the valuation office was engaged by the Department from Central Public Works Department, Government of India, who was technical expert. After perusing the provisions of section 132 (2) of the Act, we find in the search cases it is usually to take opinion of technical experts from the qualified engineers working in CPDW. In the case before us, the services of DVO was taken for the measurements of flats which in our opinion, no other person could have done better way as the matter being highly technical. We also find that due opportunity was given to the assessee by the department to controvert the finding of the AO by giving copy of the valuation report, so, in view of these facts we are of the considered view that the ground raised by the assessee has no substance and therefore, the ground raised by the assessee is dismissed.

Denying the claim for deduction u/s 80IB(10) for including the flower bed area which is open to sky and not on floor level and 50% of common wall area as part of built up area prescribed under section 80IB(14) - Held that:- We find considerable force in the submissions of the assessee that the flower bed area and common wall area are not includible in the definition of built up area while calculating the eligible limit of 1000 sq. ft for the purpose of allowing deduction u/s 80IB(10) of the Act. The flower bed area is open to sky and not covered by any sides whereas balcony is covered with three sides. The flower bed area is few inches below floor level. It is the submission of the assessee that the flower bed area is outside the balcony area and the starting point for the flower bed area is a point where the balcony area ends.After considering the rival submissions and materials placed before us including the decisions of the rival parties we find that the flower beds which are below the floor level can not form part of constructed area of flat for the purpose of determining the eligibility of the assessee to deduction u/s 80(IB)(10) of the Act.

CIT(A) directing the AO to exclude the service area, window area, window projection, cupboard projection from the definition of built up area for calculating the deduction u/s 80IB(10) of the Act and the eligible area of 1000 sq. ft. - Held that:- On going through the findings of the ld. CIT(A), we do not find any valid reason to include service area, window area, window projections and cupboard projection in the built up area for calculating eligible built up area of 1000 sq.ft for the purpose of computation of deduction u/s 80IB(10) of the Act.

Entitlement to deduction of profits u/s 80(IB)(10) in respect of 10 floor completed - Held that:- BMC has issued completion certificate qua the 10 floors on which the assessee calculated the profits of ₹ 61,56,52,158/-. In our opinion the provisions of Act provides for the deduction of profits accruing from housing projects fulfilling the conditions as envisaged in section 80(IB)(10) irrespective of the fact whether the project is completed partly or wholly. In the instant case before us the BMC issued part completion certificate for 10 floors which testified that the 10 floors were complete. So far as the statement recorded during the search is concerned that has no significance in view of the part completion issued by the BMC. We hold that the assessee was entitled to deduction of profits u/s 80(IB)(10) in respect of 10 floor completed.