TMI Blog2015 (9) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... e project, two units bearing Nos.118 and 121 (correct No. is 21, as pointed out by the learned counsel for the assessee) were having built up area of more than the maximum area of 1,500 sq. ft. permissible as per the relevant provisions - Held that:- As explained on behalf of the assessee before the authorities below as well as before us, the said unit was built on a corner plot and keeping in view the location as well as the size of the plot, duplex house was constructed, having a built up area of less than 1,500 sq. ft. It is also observed that a copy of the sale deed for residential unit No.21 was filed by the assessee even before the learned CIT(A), but still the learned CIT(A) brushed aside the same, by observing that the same was not sufficient to prove that the built up area of the unit was less than the limit of 1,500 sq. ft. prescribed under S.80IB(10). In our opinion, the said sale deed was sufficient to show that the area of the duplex unit constructed by the assessee as residential unit No.21 was having less than 1,500 sq. ft. built up area and the approved plan annexed to the sale deed further established this position. As demonstrated by the learned counsel for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . yards and built up area of 1475 sq. ft. During the previous years relevant to assessment years 2009-10, 2010- 11 and 2011-12, 38, 16 and 37 residential units were sold by the assessee and deduction under S.80IB(10) for the profits derived from the said project for the year under consideration, i.e. 2009-10 was claimed in the return of income to the extent of ₹ 3,29,78,844. 3. During the course of assessment proceedings, the claim of the assessee for deduction under S.80IB(10) was examined by the Assessing Officer. In this regard, a commission under S.131(1)(d) of the Act was also issued by the Assessing Officer to the DVO, who inspected the project site of the assessee on 17.12.2011 with his team of engineers. The Assessing Officer also accompanied the DVO during the said visit. On the basis of the report received from the DVO on 20.12.2011, the Assessing Officer proposed to make a disallowance of deduction claimed by the assessee under S.80IB(10) He accordingly issued a show cause notice calling for the explanation of the assessee. According to the Assessing Officer, the project undertaken by the assessee was not completed in as much as only 91 residential units were so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to claim deduction under S.80IB(10). 5. As further found during the physical inspection of the project site of the assessee, there was a big commercial complex at plot No.10 within the project. According to the report of the DVO the built up area of the said commercial complex was 11,913 sq. ft. In this regard, the explanation offered by the assessee before the Assessing Officer was that the plot No.10 was sold to Md. Zaheeruddin and Md. Zamiluddin, who constructed the commercial complex thereon, which had nothing to do with the project of the assessee. According to the Assessing Officer, the said commercial complex, however, was a part and parcel of the project undertaken by the assessee and in order to circumvent the provisions of law, a third party was introduced by the assessee for the purposes of constructing a commercial complex. Since the total commercial area of 11,913 sq. ft. was more than 5% of the total built up area of the project, the Assessing Officer held that there was a violation of other condition also stipulated for claiming deduction under S.80IB(10). Accordingly, the claim of the assessee for deduction under S.80IB was disallowed by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, held that there was a violation of the norm of 1,500 sq.ft. in respect of two residential units bearing Nos.118 and 121. 9. As regards the violation in the norms of commercial space, it was submitted by the assessee before the learned CIT(A) that the commercial complex was not part of the project. It was submitted that the land on which commercial complex was constructed had been sold by the assessee vide sale deed dated 13.9.2007 to Md. Zaheeruddin and Md. Zamiluddin and the commercial complex was developed and built by them on the said plot of land. This stand of the assessee was also not found acceptable by the learned CIT(A). According to him, the plot of land on which the commercial complex was constructed, did form part of the total project as approved by the concerned authority. He also noted that even the completion certificate dated 12.3.2012 submitted by the assessee clearly indicated that the project was comprising of 136 housing units and one commercial unit-cum-club house. He held that the commercial complex was thus very much a part of the project for which deduction under S.80IB was claimed by the assessee and since the total built up commercial area exceede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there is such violation either in respect of one unit or even two units, the claim of the assessee for deduction under S.80IB(10) can be disallowed only proportionately and not entirely as done by the authorities below. 11. As regards the violation of the norm of maximum commercial area allowed in the project, the learned counsel for the assessee submitted that no commercial area was actually built up by the assessee in the project undertaken by her. He submitted that one vacant plot in the project was sold by the assessee in the year 2007 itself and the profit of ₹ 3 lakhs arising from the said sale was duly offered to tax by the assessee in assessment year 2008-09. He submitted that the purchasers of the said plot actually built up the commercial area and since the assessee neither constructed nor sold the commercial area, the commercial area did not form part of the housing project developed by the assessee and no deduction under S.80IB(10) was claimed by the assessee in respect of the said commercial complex. He submitted that the commercial area developed by the concerned owners/purchasers of the plot was sold by them and the profit arising from such sale was duly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, there is no dispute that the relevant plot of land on which the commercial complex was built had already been sold by the assessee to Md. Zaheeruddin and Md. Zamiluddin vide sale deed dated 13.9.2007 and the profit arising from the said sale was duly offered to tax by the assessee for the relevant assessment year, assessment year 2008-09. There is also no dispute that the commercial complex on the said plot of land was constructed by the owners and not by the assessee and the profit arising from the sale of the commercial complex so constructed was duly offered to tax by the said owners in their returns of income. The learned CIT(A), however, still confirmed the disallowance made by the Assessing Officer on account of assessee's claim for deduction under S.80IB(10) on the ground that the plot of land on which the commercial complex was built was part and parcel of the project of the assessee, as approved by the concerned authorities. He also noted that the said plot of land was found mentioned even in the completion certificate dated 12.3.2012 issued by the concerned authority, which again strengthened the fact that the land on which the commercial complex was built ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned, which allegedly were having more than the permissible maximum built up area of 1,500 sq. ft. each, the learned counsel for the assessee has filed before us a copy of the relevant sale deed dated 11th September, 2008, whereby the residential unit No.21 comprising of plot of land and duplex house built thereon was sold by the assessee. A perusal of the said sale deed clearly mentions the built up area as 1,364 sq. ft. in the description of the property sold and even the building plan annexed to the said sale deed as approved by the concerned authorities, shows the total area of the ground and first floors as 1336 sq. ft. It is observed that the Assessing Officer, however, presumed the area of this unit as more than 1,500 sq. ft. merely on the basis that the duplex house was having two floors. As explained on behalf of the assessee before the authorities below as well as before us, the said unit was built on a corner plot and keeping in view the location as well as the size of the plot, duplex house was constructed, having a built up area of less than 1,500 sq. ft. It is also observed that a copy of the sale deed for residential unit No.21 was filed by the assessee even befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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