TMI Blog2015 (9) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... flat size being in excess of 1500 sq. ft. is concerned, we find that the Assessee had sold 4 flats namely C-401, 402, 403 and 404 to 4 different purchasers vide separate sale deeds which have also been confirmed by the respective purchasers and at the time of its sale each flat was less than 1500 sq. ft. It is also a fact that the inspection was carried out by the DVO subsequent and much after the date when Assessee had handed over the possession to respective owners of the flat. The respective owners have also confirmed by carrying out the modification in those flats and combining those 4 flats into 2 flats. In such a situation the act of the purchasers of flats of converting the 2 flats in to 1 flat resulting into the area of are combined flat being excess of 1500 sq. ft. cannot be said to be done by Assessee and therefore it cannot be said that Assessee has sold flat whose area was in excess of 1500 sq. ft. In view of the aforesaid facts, we are of the view that the Assessee is eligible for deduction u/s. 80IB(10) and therefore set aside the order of A.O on this ground. - Decided in favour of assessee. Disallowance u/s. 40(a)(ia) - late deduction tax at source from payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed an order without considering and appreciating the facts of case of appellant. 2.1 In law and in the facts and circumstances of the appellant s case, the learned CIT(A) has grossly erred in upholding the disallowance for deduction u/s. 80IB(10) of the Income tax Act, 1961 (hereinafter referred as the Act ) amounting to ₹ 62,83,272/-, when she ought to have allowed the claim of the appellant. 2.2. In law and in the facts and circumstances of the appellant s case, the learned CIT(A) has grossly erred in holding that the appellant has not fulfilled conditions u/s. 80IB (10) (b) (c) of the Act, without considering the submission by the appellant and certain important observations in the DVO s report, as highlighted by the appellant. 2.3 In law and in the facts and circumstances of the appellant s case, the CIT(A) should have realized that as appellant has satisfied all the conditions laid down u/s. 801B(10) of the Act, deduction u/s. 80IB cannot be denied. 3. In law and in the facts and circumstances of the appellant s case, the CIT(A) has grossly erred in upholding the disallowance of ₹ 39,00,000/-, on account of alleged late deduction tax at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plots of land each below 1 acre: Sr. No. Date of agreement Plot Area 1 08.10.2004 1463 sq. mtr. 2 14.12.2005 1608.21 sq. mtr. 3 20.03.2006 1544 sq. mtr. AMC gave permissions on different dates for construction of different blocks. Building Use permission was also given on different dates as obvious from the table below given in the assessment order: Sr. No. Date of permission/Revised Date of B.U permission Block Unit 1 17.12.2004/21.02.2006 30.06.2006 A 40 2 19.10.2005 20.12.2006 B 30 3 21.02.2006 18.07.2007 C 40 4 30.03.2007 29.11.2007 B-2 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now in appeal before us. 7. Before us, ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted that Assessee s project named Pushkar Residency was approved by Ahmedabad Municipal Corporation (AMC) with plot area of 4717 sq. mtrs, which is equivalent to 1.166 acres in its first approval dated 19.10.2005. He pointed to lay out plan of the project placed at page 2/2 of the paper book and from it, he pointed that the AMC not only recognized the plot area to be 4717 sq. mtrs. but also recognized that the project consist of more than one blocks namely Block-A, B C. He further submitted that Assessee had entered into 3 development agreements and obtained permission from AMC to begin construction on different dates for different blocks of the project since it was required to make the payment of substantial amount of charges to local authorities for getting permission for construction and in order to avoid financial squeeze, Assessee had carried out the construction of the project in a phased manner. He therefore submitted that the project remained as a one whole project only. With respect to ld. CIT s observation that in Block-C on the 5 th Floor, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 36 (Bom) had an occasion to decide on the issue of deduction u/s. 80IB(10) wherein it has held that the expression housing project is neither defined under section 2 of the Act nor under Section 80IB(10) of the Act and therefore the expression housing Project in Section 80IB(10) would have to be construed as commonly understood Housing Project in common parlance and it would mean constructing a building or group of buildings consisting of several residential units. It further, at para 26 has noted as under:- 26. How ever, in the absence of defining the expression housing project and in the absence of specifying the size or the number of housing projects required to be constructed on a plot of land having minimum area of one acre, even one housing project containing multiple residential units of a size not exceeding 1000 square feet constructed on a plot of land having minimum area of one acre would be eligible for Section 80IB (10) deduction. If the construction of Section 80IB (10) put forth by the Revenue is accepted, it would mean that if on a vacant plot of land, one housing project fulfilling all conditions is undertaken, then deduction would be availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d notes reads as under:- HOUSING PROJECT-SPECIAL DEDUCTION-CONDITION PRECEDENT- PLOT MUST HAVE MINIMUM AREA OF ONE ACRE -COMPOSITE HOUSING SCHEME CONSISTING OF SIX BLOCKS IN AREA EXCEEDING ONE ACRE - HOUSING PROJECT APPROVED UNDER DEVELOPMENT CONTROL RULES- THAT SEPARATE PLAN PERMITS OBTAINED FOR six BLOCKS-NOT GROUND FOR DENIAL OF DEDUCTION-ASSESSEE ENTITLED TO DEDUCTION INCOME-TAX ACT, 1961, S. 80IB(10). 10. Thus, in light of the decision cited hereinabove, we are of the view that Assessee cannot be denied deduction u/s. 80IB(10) on the ground that the area of project is less than 1 acre and more so when Revenue has not disputed about the fulfillment of other conditions stipulated u/s. 80IB(10) by the Assessee. 11. As far as denial of deduction on the ground of flat size being in excess of 1500 sq. ft. is concerned, we find that the Assessee had sold 4 flats namely C-401, 402, 403 and 404 to 4 different purchasers vide separate sale deeds which have also been confirmed by the respective purchasers and at the time of its sale each flat was less than 1500 sq. ft. It is also a fact that the inspection was carried out by the DVO subsequent and much after the date when Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried the matter before ld. CIT(A) who confirmed the order of A.O and decided the issue against the Assessee by holding as under:- 15. Ground No.3: The Id. AO has erred in making a disallowance of ₹ 39,00,000 on accounted of alleged late deduction tax at source from payments by wrongly invoking the provisions of section 40(a)(ia). During the course of appellate proceedings it was conceded that there was late deduction of TDS. Vide reply dated 10.8.2009 Annexure 5 was enclosed by the appellant which in turn is enclosed as Annexure 3 of this order, which showed that all payments / credits totaling to ₹ 39,00,000 were made to one Shreenath Builders on different dates from 1.4.2005 to 28.2.2006, and as per statutory requirements TDS should have been deposited in government account by 31.3.2006 whereas it was deposited deposited on 31.5.2006. I have therefore no alternative but to confirm the addition made by the AO u/s.40(a)(ia) of ₹ 39,00,000. 16. Ground No.4 the AO erred in making disallowance of ₹ 5,48,483 on account of alleged non-deduction of tax at source u/s.40(a)(ia), The format enclosed by the appellant through its reply dated 10.8.2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT vs Omprakash Chaudhary (T. A. No. 412 of 2013) order dated 22.11.2013 no disallowance u/s. 40(a)(ia) is called for. The relevant observation of the Hon ble Gujarat High Court in the case of CIT vs. Omprakash Chaudhary is as under:-. 17. The core issue as to whether the amendment made by the Finance Act 2010 to Section 40 [a](ia) of the Act is retrospective from the date of insertion of the provision ie., 1 st April 2005 therefore needs to be answered in affirmation. It can be seen that the amendment made by the Finance Act 2010 allows additional time upto the due date of filing of the return in respect of even those instances where TDS has been deducted during the first eleven months of the previous year. The additional time till the due date of filing of the return, in case of TDS made during the last month of the previous year was already available by the amendment made by Finance Act 2008. Thus, it is apparent that the relaxation made by the amendment made under the Finance Act, 2010 brings the law in parity with the aforementioned situation and accordingly, for the TDS deducted all throughout the year, time is extended from payment till the filing of return. It is thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40 (a)(ia) of the Income Tax Act, 1961 by the Finance Act 2010, as retrospective in operation, having effect from 1 st April 2005 ie., from the date of insertion of Section 40 (a) (ia) of the Act. 17. With respect to the payment made to Anar Builders Pvt. Ltd., we find that though Assessee had submitted that the payee has already included the payment received from the Assessee as its income and paid tax on it but we find that there is no finding to that effect either by the A.O or ld. CIT(A). In such a situation, we are of the view that the issue needs to be re-examined and re-decided at the end of A.O. in accordance with law. 18. With respect to the submission of the Assessee in connection with the payments made to Dayal Krupa and Viral Transport, we are of the view that in the absence of categorical finding of A.O or ld. CIT(A) and in the light of the factual submission made by the Assessee the issue needs re-verification. We therefore restore the issue to the file of A.O for verification and thereafter decide the issue in accordance with law. Needless to state that A.O shall grant adequate opportunity of hearing to the Assessee. The Assessee is also directed to file pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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