TMI Blog2015 (2) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... is to the extent of 6690.25 sq. mts. We further find that in the decision of Hob’ble Gujarat High Court in the case of Shreenath Infrastructure [2014 (4) TMI 482 - GUJARAT HIGH COURT], the underutilization of FSI as noted by Hon’ble Gujarat High Court was in the range of 25 to 30 % and therefore the ratio of decision in the case of Shreenath Infrastructure, which has been relied by ld. A.R. would not be applicable to the facts of the present case. We further find that while denying the issue, ld. CIT(A) has given no finding with respect to the unutilized FSI. We therefore feel that the issue of unutilized FSI and thereby the deduction u/s. 80IB (10) on the unutilized FSI needs to be re-examined at the end of CIT(A) in view of the decision of Hon’ble Gujarat High Court in the case of Moon Developers (2014 (4) TMI 1042 - GUJARAT HIGH COURT). We therefore remit the issue to the file of CIT(A) to decide the issue afresh as per law and after giving adequate opportunity of hearing to both the parties. - Decided in favour of revenue for statistical purposes. - ITA No. 67/AHD/2011 - - - Dated:- 14-8-2014 - Mukul Kr. Shrawat, JM And Anil Chaturvedi, AM,JJ. For the Petitioner : Mrs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown net profit of ₹ 8,26,505/- being derived from development and building of the housing project and the same was claimed as exempt from tax u/s. 80IB(10) of the Act. A.O during the course of assessment proceedings noticed that the project was approved in the name of Kashiben Gordhanbhai Patel for construction of housing projects on the area of land owned by them, the permissions of development by the local authority was not in the name of the Assessee and the land on which housing project was constructed was also not owned by the Assessee. A.O was of the view that as per section 80IB(10) of the Act the basic requirement for claiming deduction is approval of housing project of local authority in the name of the undertaking developing and building housing project and the land on which housing project is constructed should also be owned by the Assessee. He also noticed that the land owners had sold the pieces of land to unit holders directly and the Assessee had acted as merely as confirming party and further the Assessee had entered into construction agreement with the unit holders. He also noticed that Assessee had never sold the house to the unit holders as there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, it is observed the terms and conditions of the development are similar to that pf decoded by the Hon'ble ITAT in the case of ITO Others Vs. M/s. Shakti Corporation, Vadodara Others in ITA No.1503/Ahd/2008 dated 07.11.2008 . The Assessing Officer also verified that the appellant had completed its project before 31.03.2008. Since the control over the land, and the risks and costs of the project are of the appellant, the assessee is entitled to the deduction u/s. 80IB(10). The Assessing Officer is directed to compute the income accordingly. With regard to ground No.2 following the decision of the Hon'ble ITAT in the case of M/s. Radhe Builders and Others (supra) the Assessing Officer's decision of restricting, the claim of 80IB(10) on account of unutilized FSI is not acceptable and is directed to be deleted. 6. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 7. Before us, ld. D.R. took us through the order of A.O and supported his order. He also submitted that Assessee has not fully utilized the FSI available to it and the unutilized FSI has been sold on which the Assessee has claimed deduction u/s. 80IB(10). He further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. As far as the issue with respect to the sale of unutilized FSI is concerned, we find that Hon ble Gujarat High Court in the case of Moon Developers (supra) has noted as under:- 31. It is true that section 80IB(10) of the Act does not provide that for deduction, the undertaking must utilize 100% of the FSI available. The question however is, can an undertaking utilize only a small portion of the available area for construction, sell the property leaving ample scope for the purchaser to carry on further construction on his own and claim full deduction under section 80IB(10) of the Act on the profit earned on sale of the property? If this concept is accepted, in a given case, an assessee may put up construction of only 100 sq. ft. on the entire area of one acre of plot and sell the same to a single purchaser and claim full deduction on the profit arising out of such sale under section 80IB(10) of the Act. Surely, this cannot be stated to be development of a housing project qualifying for deduction under section 80IB(10) of the Act. This is not to suggest that for claiming deduction under section 80IB (10) of the Act, invariably in all cases, the assessee must utilize the full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risk and cost involved in the development of project and therefore eligible of deduction u/s. 80IB(10). As far as the issue with respect to unutilized FSI is concerned, we find that Assessing Officer while denying the deduction u/s. 80IB(10) has noted that out of the total FSI of 8000.27 s.q. mts available with Assessee, the FSI that has been consumed is to the extent of 1310.02 sq. mts (which works out to around 17% of the total FSI) and the FSI unutilized is to the extent of 6690.25 sq. mts. We further find that in the decision of Hob ble Gujarat High Court in the case of Shreenath Infrastructure, the underutilization of FSI as noted by Hon ble Gujarat High Court was in the range of 25 to 30 % and therefore the ratio of decision in the case of Shreenath Infrastructure, which has been relied by ld. A.R. would not be applicable to the facts of the present case. We further find that while denying the issue, ld. CIT(A) has given no finding with respect to the unutilized FSI. We therefore feel that the issue of unutilized FSI and thereby the deduction u/s. 80IB (10) on the unutilized FSI needs to be re-examined at the end of CIT(A) in view of the decision of Hon ble Gujarat High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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