TMI Blog2015 (3) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... ial user to the extent permitted under the rules. This is further verified by clause (d) of Sec. 80IB(10) inserted with effect from 1.4.2005. It provides that even though shops and commercial establishments are included in the housing project, deduction u/s. 80IB(10) w.e.f. 1.4.2005 would be allowable where such commercial user does not exceed 5% of the aggregate built up area of the housing project or 2000 Sq.ft whichever is lower. By the Finance Act, 2010, clause (d) was amended to the effect that the commercial user should not exceed 3% of the aggregate built up area of the housing project or 5000 sq.ft whichever is higher. The expression “included” in clause (d) makes it amply clear that commercial user is an integral part of a housing project. Applying the above ratio of the Hon’ble High Court to the facts of the present case, the assessee itself vide letter dt. 18.12.2007 has admitted that four buildings are approved as purely residential buildings and one is approved as commercial and the assessee has kept separate project-wise accounts in respect of Rehab Component i.e. 17 Rehab buildings, 4 Residential buildings and one free sale commercial premises. Thus in assessee’s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erect buildings on said plot of land. The said Authority has given Letter of Intent vide No.SRA/ENN/448//GI/LOI dated 25/05/2000 already submitted in our earlier submission and principally approved the Development Scheme under which the rehabilitation component is 72966.66 sq. Meters, and sale component permissible is 72966.66 sq. meters taking into account both Slum Plot and Non-Slum Plot. The sale component permissible is hereinafter called the Free Sale Residential component , Free Sale Commercial component and Rehabilitation Component is hereinafter called the Rehab Component . The Developers have also prepared the plans for construction of 17 Rehab Buildings, 4 Residential Buildings and 1 Commercial Building which have been approved under intimation of approval already submitted in our earlier submission. The entire Housing scheme undertaken by the assessee firm is summarized in the following lines. 1) The assessee is required to construct 17 Rehab Buildings admeasuring about 72966.66 Sq.mtrs to provide 2467 residential premises for the benefit of slum dwellers 2) In consideration of development of such rehab housing project, the assessee firm is entitled to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this, the Revenue is before us. 5. The sum and substance of the grievance of the Revenue for assessment year 2005-06 is that the Ld. CIT(A) erred in allowing the claim of deduction u/s. 80IB(10) of the Act even though the assessee has not complied with the mandatory condition for the claim of deduction u/s. 80IB(10) of the Act. 6. In assessment year 2006-07, while scrutinizing the return of income, the AO noticed that the assessee has allocated maintenance expenses to residential and commercial building. The AO was of the opinion that the allocation by the assessee is highly disproportionate. The AO found that the assessee has allocated maintenance expenses to M/s. Heritage Housing Development 5 Corpn. commercial building at ₹ 98,84,148/- and towards residential building at ₹ 88,63,017/-. The AO was of the firm belief that when the total FSI received has been allocated in ratio of 64.48:35.52. The maintenance expenses should also have been allocated on the total saleable area of the residential and commercial building in the same ratio. The assessee was asked to justify its allocation. On receiving no plausible reply, the AO proceeded by allocating maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done on assumption basis. The Ld. CIT(A) rejected the apportionment of expenditure as made by the AO and deleted the addition. 8.1. In so far as the claim of deduction u/s. 80IB is concerned, the Ld. CIT(A) followed the findings given in assessment year 2005-06 and after relying upon the same decisions as relied upon in A.Y 2005-06, the Ld. CIT(A) allowed the claim of deduction u/s. 80IB(10) of the Act. 9. Aggrieved by this, the Revenue is before us. Facts of assessment year 2007-08 are identical to the facts of assessment year 2006-07 in so far as apportionment of maintenance expenditures are concerned. The claim of assessee from deduction u/s. 80IB(10) was allowed by the Ld. CIT(A). in the similar line as that of A.Yrs 2005-06 and 2006-07. the grievance of the Revenue is in the same line as that of A.Y. 2006-07 in so far as apportionment of maintenance expenditure is concerned, and in M/s. Heritage Housing Development 7 Corpn. so far as the allowability of deduction u/s. 80IB(10) is concerned, in the same line as that of A.Y.2005-06 and A.Y 2006-07. 10. Before us, the Ld. Departmental Representative strongly submitted that the documents relating to the approval by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... htly allowed the claim. 12. We have heard the rival submissions and carefully perused the orders of the authorities below and the relevant documentary evidences brought on record and referred to during the course of the hearing. There is no dispute that the slum rehabilitation authority has approved the Slum Rehabilitation Scheme u/s. 45 of Maharashtra Regional and Town Planning Act, 1966 and allowed the assessee to erect building as per the scheme on the land approved by the SRA. It is also not in dispute that the assessee has prepared the plans for construction of 17 Rehab buildings, 4 residential buildings and one commercial building. The dispute raised relates to the commercial part involved in this project. This issue is no more res-integra as the jurisdictional High Court has settled this issue in favour of the assessee and against the Revenue by holding that the amendment brought to Sec. 80IB(10) w.e.f. 2005-06 are not applicable to the projects sanctioned prior to 1.4.2005. The assessee passes this test as it its project were approved prior to 1.4.2005. 12.1. In so far as the observations of the AO that 3 flats/2 flats were sold as one composite unit, thereby the buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st day of March, 2008. 12.7. Going through the notification, we find that the notification has been issued for the scheme contained in Regulation 33(10) of Development Control Regulation for Greater Mumbai 1991 subject to the following conditions: i) slum Development falling in Category VII mentioned in notification No. TPB-4391/4080(A)/UD-11(RDP) dt. 3rd June, 1992 shall be excluded from the scheme. ii) slum development falling within clause 7.7 of the Appendix IV of regulation 33(10) which provides for M/s. Heritage Housing Development 11 Corpn. joint development of slum and non-slum areas shall be excluded from the scheme; and iii) Any amendment in the Scheme hereby notified shall be required to be re-notified by the Board. 12.8. Clause (ii) hereinabove is relevant on the facts of the case in hand. Since this notification has been issued after the completion of the assessment and the appellate proceedings and has been submitted before us for the first time, we understand that the lower authorities had no occasion to consider the facts of the case in hand in the light of this notification and the conditions mentioned therein. 12.9. To be fair to the Revenue, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 263 of the Act for allocation of the market value of F.S.I between residential and commercial buildings. According to the CIT, this aspect needed verification. In the meantime, the Ld. CIT(A) vide order dt. 24.2.2009 allowed assessee s appeal. 17. The Revenue preferred an appeal against the order of the Ld. CIT(A) on 23.4.2009. The CIT u/s. 263 of the Act directed the AO to do the allocation on reasonable basis vide order dt. 29.8.2009. Against this order of the CIT, assessee preferred an appeal before the Tribunal which was disposed off by the Tribunal on 29.6.2012 upholding the order of the CIT. This order of the Tribunal was received on 13.7.2012. The assessee has filed the appeals for the assessment years under consideration and the cross objections only after receiving the order of the Tribunal. This conduct of the assessee cannot be considered as a reasonable and sufficient cause for the delay in filing of the appeal. Once the assessee was aware of the order of the Ld. CIT(A), it was incumbent upon the assessee to prefer the appeal or otherwise. It is worthwhile to mention that on 23.4.2009, the assessee was well aware that the Revenue has preferred an appeal against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that even though shops and commercial establishments are included in the housing project, deduction u/s. 80IB(10) w.e.f. 1.4.2005 would be allowable where such commercial user does not exceed 5% of the aggregate built up area of the housing project or 2000 Sq.ft whichever is lower. By the Finance Act, 2010, clause (d) was amended to the effect that the commercial user should not exceed 3% of the aggregate built up area of the housing project or 5000 sq.ft whichever is higher. The expression included in clause (d) makes it amply clear that commercial user is an integral part of a housing project. 19. Applying the above ratio of the Hon ble High Court to the facts of the present case, the assessee itself vide letter dt. 18.12.2007 exhibited at page-183 of the paper book has admitted that four buildings are approved as purely residential buildings and one is approved as commercial and the assessee has kept separate project-wise accounts in respect of Rehab Component i.e. 17 Rehab buildings, 4 Residential buildings and one free sale commercial premises. Thus in assessee s own submission, it is clear that the commercial building is a separate project and is not included as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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