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TMI Blog2012 (10) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) grossly erred in allowing the deduction u/s 80IB(10) of the I.T. Act 1961 of Rs.5,32,174/- instead of confirming the disallowance made in the assessment of this issue. 03. The learned CIT(A) erred in holding the assessee as eligible for deduction u/s. 80 IB (10) even when the built up area of some of the units after combining exceeds 1500 sq.ft. 04. The learned CIT (A) erred in holding the assessee's plea that built up area should be considered as per the meaning understood by the sanctioning authority (PMC) and not as per the provisions of sec. 80IB(10) of the Income tax Act, 1961. 05. For these and such other grounds as may be urged at the time of the hearing, the order of the learned CIT (APPEALS) may be vacated and that of the Assessing Officer be restored" 3. Facts of the case in brief are that the assessee is a promoter and builder. During the relevant previous year, the assessee has shown sale of flats of Rs.1.06,81,985/- in a project named 'Prime Heights' situated at Pashan - Sus Road. The assessee claimed the entire profit earned on this project amounting to Rs. 5,32,174/- as deduction u/s. 80 IB (10). In order to check the eligibility of the project for claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submission of the appellant and material available on record. The issue involved in this case regarding computation of built-up area of some of the residential units has got two aspects; One factual and the other legal. So far as the legal basis is concerned, on the issue whether definition of 'Built-up area' introduced into the statute by way of section 80IB(14(a) w.e.f. 1.4.2005, it has already been held by various tribunal benches that the same was prospective in nature, and applicable w.e.f. 1.4.2005. These tribunal decisions which were cited by the appellant, are listed below : i) ITO vs. A.R. Developers (2009) 25 DTR 287 (Nag) order dtd. 21.5.08 ii) ACIT vs. Sheth Developers (P) Ltd. (2009) 33 SOT 277 (Mum); order dated 25.6.2009; and iii) ACIT vs. M/s. Vaman Estate, ITA No. 3106/Mum/2008 dtd. 27.10.2009 In all these three decisions of various tribunal benches, assessment years involved were either 2003-04 or 2004-05; and it has been held that the definition of built-up area given in 80IB(14)(a) cannot be considered with retrospective effect. Following these decisions, it is held that for the A.Ys. 2003-04 and 2004-05 in the appellant's case, the definition of built-up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer in the remand report, the Built-up area can be calculated. Therefore, it was only to give the measurement of all the flats which could otherwise also have been calculated as per the floor plan, that the Architect's Certificate was submitted, and therefore, the additional evidence should be admitted. It is also contended that the built-up area which is mentioned in the brochure was inclusive of common areas, and the total saleable area was shown including the terrace. The appellant has then cited decisions regarding admission of additional evidence including that of the jurisdictional High Court in the case of Prabhavati S. Shah, 231 ITR 1 (Bom.) in support of the contention that the additional evidence deserves to be admitted. 3.10 In the submission dated 26.3.2010 it is pointed out by the appellant that in response to its contention that the flats in building A were not combined at all, the Assessing Officer has not objected to this in her report. Therefore, it is reiterated that the flats in building A mentioned in para 4 of the assessment order for A.Y. 2004-05 were not combined. Therefore, there was no question of computing the combined built-up are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able area is arrived at 819 sq.ft. Thus, this fact itself indicates that the built up area of 781 sq.ft. includes the proportionate area for amenities and is nothing but the super built up area. Hence, this fact is clarified by the architect in his certificate wherein the built up area of the said two flats is calculated at 700 sq.ft. each as against 781 sq.ft. shown in the brochure. Accordingly, the assessee submits that the area mentioned in the brochure - 781 sq.ft. is the super built up area and not the basic built up area. If 781 sq.ft. is the basic built up area, the super built up area would have been increased by minimum 10 - 15% and the saleable area would have been more than 900 sq.ft. in respect of each flat. The internal details of the said two flats are as under - Particulars Area (sq.ft) Living Room 216 Kitchen 90 Bedroom 1 122 Toilet 1 13 Bath 27 Passage 51 Bedroom 2 147 Toilet 2 34 Total 700 Therefore, the assessee submits that the built up area of the above two flats is only 700 sq. ft each and this fact has been clarified in the form of the architect's certificate." 3.11 I have considered the above explanation of the appellant and have also g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, it was stated that the basic built-up area was normally increased by 10 to 15% to arrive at the super built-up area or the saleable area. This explanation of the appellant has been carefully considered and found to be acceptable. Accordingly, it is held that even after combining the adjacent flats no. 501 and 502 in building 'B', as mentioned by the Assessing Officer in the assessment order, the combined areas did not exceed 1500 sq.ft., since terrace area was to be excluded as discussed above. Therefore, there were no combined units in building B also which violated the restrictions given in section 80IB(10)(c ) of the Act. Grounds of appeal Nos. 1 to 3 are therefore, held to be allowed for both the assessment years; while ground no. 4 is partly allowed." Aggrieved with such order of the CIT(A), the Revenue is in appeal before us. 5. The Ld. D.R. strongly relied on the order of the A.O. She submitted that since the assessee has violated the provisions of 80 IB(10) by constructing, more than 1500 sq.ft. per unit therefore it is not entitled to benefit of deduction u/s. 80 IB (10). The Ld. Counsel for the assessee, on the other hand, submitted that even if certain flats are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 80 IB (10) of the I.T. Act. The grounds raised by the revenue are accordingly dismissed. ITA No. 887/PN/2010 7. After hearing both the sides, we find the grounds raised by the Revenue in the grounds are identical to the grounds in ITA No. 888/PN/2010. We have already decided the issue and the grounds raised by the Revenue have been dismissed. Following the same ratio, the ground raised by Revenue are dismissed ITA No. 889/PN/2010 (A.Y. 2005-06 (By Revenue) & 838/PN/2010(A.Y. 2005-06) (BY Assessee) 8. Facts of the case in brief are that the A.O following his orders for the preceding A.Y. disallowed the claim of deduction u/s. 80 IB (10) amounting to Rs.1,13,290/- on the ground that assessee had constructed flats which were having built up area of more than 1500 sq ft. In appeal, the ld CIT(A) held that there is material difference in the impugned A.Y. as compared to the earlier A.Ys. He observed that as per the provisions of Sec. 80 IB (14)(a) of the I.T. Act w.e.f. 1.4.2005, the definition of "built up" area has been provided according to which, projections, balcony, terraces etc., are to be included in the computation. He observed that in respect of the additional flat No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant case, the housing project was started by the assessee on 2nd April 2003 which is much before 1.4.2004, therefore, in view of the decisions cited above, balconies/terrace etc. cannot be included in the built up area. Since after excluding balcony/terrace etc. the total built up area of none of the flats would exceed 1500 sq.ft. Therefore, the assessee cannot be denied the benefit of deduction u/s. 80 IB (10). 11. We have considered the rival arguments made by both the sides. There is no dispute to the fact that the project was approved prior to 1.4.2004. Therefore, the definition of built up area as per Sec. 80 IB (14)(a) which is inserted w.e.f. 1.4.2004 does not apply to projects approved prior to that date. We find the Pune Bench of the Tribunal in the case of D.S. Kulkarni & Associates (Supra) at para 20 of the order has observed as under: "20. By applying the principle of harmonious construction to interpret the provisions under Sub-section (10) to Section 80IB as amended w.e.f. 1.4.2005 we come to the conclusion that the Legislature always intended that the project must be approved by the local authority, thus in those approved projects where construction has be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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