TMI Blog2013 (3) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... e is dismissed. - ITA 2554/MUM/2011 - - - Dated:- 31-1-2012 - SHRI N. V. VASUDEVAN SHRI R. K. PANDA, JJ. Appellant by : Shri V.V.Shastri Respondent by : Shri Satendra Pandey ORDER PER N.V.VASUDEVAN, J.M: This is an appeal by the revenue against the order dated 31/12/2010 of CIT(A)-1, Thane relating to A.Y 2007-08. Ground of appeal raised by the revenue reads as follows: On the facts of the case and in law, the ld. CIT(A) has erred in deleting an addition of ₹ 33,45,105/- made on account of denial of assessee s claim of deduction u/s. 80IB(10) of the I.T. Act, 1961, without appreciating the findings of the AO regarding violation of conditions prescribed for claim of deduction u/s. 80IB(10) of the I.T. Act. 2. The assessee is a partnership firm engaged in the business of Civil Construction. The assessee had under taken construction of building projects at Village Gouripada, Taluka Kalyan on Plot Bearing Survey No.22 23 H No.1(PT). On this land the assessee constructed two projects namely Amurt Dham comprising Building No. 9 10 and Vidhi Complex Comprising Building No.11 to 14. In respect of the project Amurt Dham the assessee did not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of the assessee. 6. On the question of commercial area in the project being more than 2000 sq.ft., the Tribunal held as follows: 3. One of the condition to be fulfilled by the Assessee for claiming deduction u/s.80-IB(10) of the Act is that under clause (d) of Sec.80- IB(10) of the Act, the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less. The objection of the AO was that in the Project Vidhi Complex there was commercial area and since it was not a building project in the sense consisting of only buildings for residential purposes, the deduction under section 80IB(10) was not to be allowed. On this objection it is seen from the submissions made by the Assessee before the CIT(A) that as far as the Project Vidhi complex is concerned, there was no commercial area whatsoever. Eighteen shops admeasuring in all 2700 sq. ft. was part of Amurt Dham project for which the Assessee did not claim any deduction u/s.80-IB(10) of the Act. It was the further submission of the Assessee that existence of sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project. On verification, if commercial area is found to exist in the project Vidhi Complext, the AO will also verify if such area is within the permitted limits as laid down in Sec.80-IB(10) of the Act. The AO is accordingly to directed to verify the facts in this regard and while considering the claim for deduction u/s.80-IB(10) of the Act. 7. With regard to the total area of the plot on which the construction was completed the Tribunal hold as follows: 5. The next issue is with regard to the total area of the plot on which the project was constructed. One of the condition for allowing deduction u/s.80-IB(10) of the Act is that the project is on the size of a plot of land which has a minimum area of one acre. According to the AO the plot area after reducing the area consumed for D.P.Road was only 3461.68 sq. meters which was less than one Acre. According to the assessee the plot area is 4746.26 sq.mtrs including the area given for D.P.Road. On this issue the CIT(A) held as follows:- 5.2 Ground of appeal No.2: This ground of appeal is related to the disallowance of the claim of deduction u/s. 80 IB(10) at ₹ 34,57,156/- in respect of the project called Vidhi com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In that case the dispute was whether the area for road set back, recreation open space and internal road set back is to be excluded for the purpose of calculating the size of plot area on which the housing project is constructed. The Tribunal held as follows: So far as the precise point raised by the CIT(A) is concerned, it is seen from page 66, which is a copy of the communication dated 20.09.2003 sent by Kalyan-Dombivli Mahanagar Palika that it mentions the size of the plot as 4600 sq.metres only. The communication dated 29.6.2000 (page 63 of the paper book) also refers to the area of the plot as 4600 sq.metres. The assessee has also filed at page 68 of the paper book an annexure to the communication issued by the Kalyan-Dombivli Mahanagar Palika dated 20.09.2003, referred to earlier. This annexure is a map showing the details of the site plans, plan of the residential units to be built by the assessee etc. It also contains an area statement which shows that the area of the plot is 4600 sq. metres. It further shows that there is a deduction 656.75 sq. metres for road set back. This deduction is thereafter set off by an addition of equivalent area allowed by MNP. The net ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in his order. We therefore, hold that the assessee would be entitled to deduction under section 10 IB(10) of the Act subject to the verification of the existence of commercial area in the project Vidhi Complex. The fact that the commercial complex exists in the Amurt Dham Project would not be relevant for denying the claiming of the assessee for deduction under section 80 IB(10) of the Act for the Project Vidhi Complex. With the aforesaid observation we set aside the order of the CIT(A) and direct the AO to allow the claim for deduction under section 80 IB(10) of the Act after verifying the commercial area in the project Vidhi complex. For statistical purposes appeal of the assessee is treated as allowed. 8. As far as completion of the construction is concerned, the certificate of KDMC dated 31/3/2008 is clear that Building No.9 to 14 were completed and occupation certificate was given. The AO s stand that project was only partly completed cannot therefore, be sustained. The deduction under section 80 IB(10) was claimed only in respect of the project Vidhi Complex which comprise of building No.11 to 14. As far as this project is concerned there could be no doubt that the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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