TMI Blog2012 (4) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 80IB(10) does not suggest that the plot of land must be vacant. Deduction is available on construction of a housing project on a plot having area of one acre, irrespective of the fact that there exist other housing projects or not. Further, as contended by Revenue that two flats were merged and size of flat exceeded 1000 sq ft – It is found that there was no merger of flats. Therefore, Tribunal rightly allowed deduction u/s 80IB – Decided in favor of assessee. - ITA NO. 3633 OF 2009 with ITA NO. 4361 OF 2010 - - - Dated:- 28-3-2012 - J.P. Devadhar A.R. Joshi, JJ. Mr.Suresh Kumar with Ms.Suchitra Kamble for the appellant. Mr.S.N. Inamdar, Senior Advocate with Mr.Atul K Jasani for the respondent. Mr.J.D. Mistri, Senior Advocate with Mr.Atul K Jasani for the intervenors. Mr.Vipul Joshi with Mr.Sameer G Dalal for the intervenors. ORAL JUDGMENT : (Per J P Devadhar, J.) 1. These two appeals are admitted on the following common substantial question of law and taken up for hearing by consent of both the parties. Whether on the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal was justified in holding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , survey action under Section 133A of the Income Tax Act, 1960 ('Act' for short) on the business premises of the assessee as also at the project site was conducted to ascertain the allowability of deduction under Section 80IB (10) of the Act. During the course of survey and thereafter statement of the Site Supervisor and Architect were recorded. 9. In the assessment order passed for AY 20042005, on 28th December 2005, the assessing officer disallowed the claim for deduction under Section 80IB (10) for the following reasons : a) The approval for 'E' building was granted on 11th October 2002 as an extension of the approvals granted for A, B, C and D buildings commencing from 9th June 1993 and, therefore, 'E' building being continuation of A, B, C and D buildings, the project must be held to have commenced prior to 1st October 1998 and, hence, not eligible for 80IB (10) deduction. b) A, B, C, D and E buildings are constructed on a plot admeasuring 2.36 acres and if 2.36 acres of land is proportionately divided between five buildings, the land pertaining to 'E' building would be less than one acre and, hence, deduction under Section 80IB (10) cannot be allowed. c) During the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready constructed and even if the land is proportionately divided between the five buildings viz. A, B, C, D and E, the area of the land pertaining to 'E' building would be less than one acre which would be in contravention of the conditions set out in Section 80IB (10) and, therefore, the Tribunal could not have extended the benefit of Section 80IB (10) to the assessee. 14. Lastly, counsel for the Revenue submitted that in the present case, the assessee has merged two flats on the ground floor of 'E' building into one flat as a result whereof the size of the residential unit in the housing project exceeded 1000 square feet which is in contravention of Section 80IB (10)(c) of the Act and, hence, the benefit of that Section could not be granted to the assessee. Accordingly, it is submitted that the appeals filed by the Revenue be allowed by answering the question raised in the appeal in favour of the Revenue and against the assessee. Counsel for the assessee as also the counsel for the intervenors have made elaborate arguments supporting the order passed by the Tribunal and the same are considered in the subsequent paras of this judgment. 15. Before considering the rival submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre; Provided .... (c) ......... (d) ......... 17. The first question to be considered herein is, whether, in the facts of the present case, construction of 'E' building constitutes building a 'housing project' under Section 80IB (10) of the Act. 18. The expression 'housing project' is neither defined under Section 2 of the Act nor under Section 80IB (10) of the Act. Even under the Mumbai Municipal Corporation Act, 1988 as also under the Development Control Regulations for Greater Mumbai, 1991, the expression housing project is not defined. Therefore, the expression 'housing project' in Section 80IB (10) would have to be construed as commonly understood. 19. As rightly contended by Mr.Inamdar, learned Senior Advocate appearing on behalf of the assessee and Mr.Mistri, learned Senior Advocate and Mr.Joshi, learned Advocate appearing on behalf of the intervenors, the expression housing project in common parlance would mean constructing a building or group of buildings consisting of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilding on 11th October 2002, it is stated that building 'E' constitutes extension of the earlier housing project which is already completed. The fact that the objections raised while approving the earlier housing project on the same plot of land were made applicable to the housing project in question, it cannot be inferred that the housing project in question constitutes extension of the earlier housing project. Therefore, in the facts of the present case, where, neither the assessee had sought approval of the building plan for construction of 'E' building as extension of the earlier housing project, nor the Municipal Corporation has granted approval for the housing project consisting of 'E' building as extension of the earlier housing project, it is not open to the incometax authorities to contend that approval to the housing project granted by the Municipal Corporation on 11th October 2002 constitutes extension of the housing project which was approved in the year 1993. 22. Reliance placed by the Revenue on the Explanation to Section 80IB (10)(a) which was introduced with effect from 1st April 2005 is also misplaced. What the said Explanation contemplates is that where the appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent of the profits of an undertaking arising from developing and constructing a housing project is with a view to boost the stock of houses for lower and middle income groups subject to fulfilling the specified conditions. The fact that the maximum size of the residential unit in a housing project situated within the city of Mumbai and Delhi is restricted to 1000 square feet clearly shows that the intention of the legislature is to make available large number of medium size residential units for the benefit of the common man. However, in the absence of defining the expression 'housing project' and in the absence of specifying the size or the number of housing projects required to be constructed on a plot of land having minimum area of one acre, even one housing project containing multiple residential units of a size not exceeding 1000 square feet constructed on a plot of land having minimum area of one acre would be eligible for Section 80IB (10) deduction. If the construction of Section 80IB (10) put forth by the Revenue is accepted, it would mean that if on a vacant plot of land, one housing project fulfilling all conditions is undertaken, then deduction would be available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructed on a plot of land having minimum area of one acre but with existing housing projects would qualify for Section 80IB (10) deduction. Even otherwise, the argument of the Revenue does not stand to reason because, in the city of Mumbai where there is acute space crunch, it is difficult to find a vacant plot having minimum area of one acre and even if few such plots are existing it cannot be said that Section 80IB (10) deduction was intended to give benefit only to the undertakings who construct housing projects on those few plots. Therefore, it is clear that on a plot of land having minimum area of one acre, there can be any number of housing projects and so long as those housing projects are approved by the local authority and fulfill the conditions set out under Section 80IB (10), the deduction thereunder cannot be denied to all those housing projects. Section 80IB (10) while specifying the size of the plot of land, does not specify the size or the number of housing projects that are required to be undertaken on a plot having minimum area of one acre. As a result, significance of the size of the plot of land is lost and, therefore, the assessee subject to fulfilling other con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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