TMI Blog2015 (11) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of the revenue that when the claim of deduction u/s.80Ib(10) was not made for the entire project in the return of income filed or in the course of assessment proceedings or in Form 10CCB filed before the AO, the CIT(A) erred in allowing the claim of deduction u/s.80IB(10) of the Act to the project is devoid of any merit and accordingly the same is dismissed. Where housing projects were sanctioned before the amendment but have been completed after 01-04-2005 when the amended provisions came into operation the assessee would be entitled to the deduction u/s.80IB(10)and the conditions mentioned in clause (d) would not apply. Thus, the benefit restricted to cases where the area utilized for shops and commercial establishments does not exceed 5% of aggregate built up area of housing project or 2000 sq.ft which was less does not to apply to projects where approval of local authority was granted prior to 01-04-2005 even if project is completed thereafter.Since in the instant case admittedly, the project has been sanctioned prior to 01-04-2005 and the project has been completed after 01-04-2005, therefore, the restriction on the area of commercial building is not applicable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the different authorities/organisations like PMC for corporation tax, MSEB for electricity meters and housing society for membership etc. and since he has also given a finding that it is the customers who have combined the adjacent units for their own requirements, therefore, in view of the decision of the Hon’ble Bombay High Court in the case cited supra and in absence of any contrary material brought to our notice, the assessee cannot be denied the benefit of deduction u/s.80IB(10) in respect of the 2 units of building D. In view of our above discussion, we are of the considered opinion that the order of the Ld.CIT(A) is in consonance with law. We accordingly uphold the same and the grounds raised by the revenue are dismissed. - ITA No. 2210/PN/2013 - - - Dated:- 23-9-2015 - Shri R. K. Panda, AM And Shri Vikas Awasthy, JM For the Petitioner : Shri Nikhil Pathak/ Shri Suhas Bora For the Respondent : Smt. Harshavardhini Buty ORDER Per R. K. Panda, AM : This appeal filed by the Revenue is directed against the order dated 27-08-2013 of the CIT(A)-II, Pune relating to the Assessment Year 2008-09. 2. Facts of the case, in brief, are that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details have been given by the assessee along with its submission dated 03.11.2010, which is annexed as Annexure - IV of this order forming part of this order. 3. From the above, the AO noted that in the project itself there is a building namely F and part of building D with built up area of 51,302 sq.ft. where the area of each flat is more than 1500 sq.ft. Further in the project itself, there are commercial/shop spaces with total built up area of 12,325 sq.ft. Therefore, these 2 facts of the project are not in conformity with the project eligible for deduction u/s.80IB(10) of the Act. He observed that the assessee in its return of income has claimed deduction u/s.80IB(10) in respect of the residential units having built up area of less than 1500 sq.ft. Further in Form No.10CCB under the declaration he observed that the following points have been mentioned : 1. The housing project/undertaking for which deduction u/s.80IB(10) has been claimed comprises of residential units having built-up area of less than 1500 sq.ft. and built-up area of more than 1500 sq.ft. Relying on the ITAT judgment in the case of Bengal Ambuja Housing Development Ltd. Vs. DCIT ITA No.1595/Kol/2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1595/Kol/2005 order dated 24-03-2006 and the decision of the Special Bench of the Tribunal in the case of Bramha Associates Vs. JCIT (119 ITD 255) (Pune). 6. However, the AO was not satisfied with the arguments advanced by the assessee. He noted that the entire project Treasure Park is one single project and that it is residential and commercial project which has been mentioned in Form 10CCB. The approval letter, i.e. the commencement certificate given by the PMC shows the approval as residential + commercial. The commencement certificate also mentions the completion of shops and establishments, i.e. commercial premises. Therefore, the Treasure Park cannot be called as a housing project at the first place because the project is residential + commercial. Further, the assessee also does not satisfy clause (c) and clause (d) of section 80IB(10) of the Act. Therefore, the deduction u/s.80IB(10) of the Act is not available to the assessee. He also rejected the alternate claim of proportionate deduction by the assessee on the ground that deduction u/s.80IB(10) is allowable on the housing project as a whole and not for a portion thereof. 7. The AO further noted that the various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of building D. 10. As regards the commercial area is concerned, it was stated that the AO has considered commercial area at 12,325 sq.ft. which was much higher than the limit prescribed in section 80IB(10)(d) and therefore according to him clause (d) introduced w.e.f. 01-04- 2005 is applicable to the case of the assessee and since the commercial area exceeded 2000 sq.ft. the assessee is not eligible to claim deduction. The assessee took an additional ground before the CIT(A) for the proposition that it is entitled to claim deduction u/s.80IB(10) for the entire housing project including 3 buildings viz.,J, K and F and 4 flats of building D. It was argued that the commencement certificate in respect of the housing project was received on 17-12-2004 and therefore the limit of 5% or 2000 sq.ft. whichever is less criteria introduced w.e.f. 01-04-2005 is not applicable to the assessee. Relying on the decision of the Hon ble Bombay High Court in the case of Brahma Associates reported in 333 ITR 289 it was submitted that the Hon ble High Court in the said decision has held that prior to the amendment there was no restriction in the area of commercial buildings and hence this restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omers where the area exceeded the prescribed limit of 1500 sq.ft. To avoid litigation the assessee has not claimed deduction u/s.80IB(10) in respect of the above 4 flats of Building D. 14. It was argued that the AO denied deduction for all the flats in the project. It was explained that the flats which are combined were sanctioned as separate flats by the PMC and the completion certificate issued also noted the said units to be independent. However, the customers have subsequently after purchase combined the said 2 flats. The assessee filed the declaration of Mrs. Nisha Bhalerao and Mr. Sarnaik Prabhanjan, the customers of Flat Nos. 1101 and 1201 and Mr. Keskar Laxmikant and Mrs. Keskar, owners of flat No. 1104 and 1204 stating that they have combined the flats. The assessee also submitted that if the units are combined by the customers the built up area has to be computed independently and the assessee cannot be denied the benefit of deduction u/s.80IB(10). For the above proposition, the assessee relied on various decisions. The assessee on a without prejudice basis submitted that if the contentions raised above are not accepted, still the deduction u/s.80IB(10) be allowed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 17-12-2004 which is prior to 01-04-2005 is acceptable in view of the decision of the Hon ble Bombay High Court in the case of Brahma Associates reported in 333 ITR 289. It has been held in the said decision that prior to the amendment there was no restriction in the area of commercial buildings and the said restriction is not applicable to the earlier years. Even though the assessment year involved in 2008-09, still the limit is not applicable because the project was sanctioned prior to the said amendment. For the above proposition, he relied on the decision of the Pune Bench of the Tribunal in the case of Opel Shelters Pvt. Ltd. vide ITA No.219/PN/2009 and the decision of the Mumbai Bench of the Tribunal in the case of Hiranandani Akruti J.V Vs. DCIT reported in 39 SOT 498 where it has been held that clause (d) of section 80IB(10) amended w.e.f. 01- 04-2005 is not applicable to housing projects commenced prior to the amendment. It has also been held that the allowability of deduction u/s.80IB(10) has to be considered as per the law prevalent in the year in which the housing project was commenced. 19. As regards the claim of deduction u/s.80IB(10) in respect of 4 flats in b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Form No.35 filed before the CIT(Appeals)? 2. The learned Commissioner of Income-tax (Appeals) erred in not appreciating the fact that the project had been approved as a residential + commercial project which had also been confirmed by the PMC and not as a housing project ? 3. The learned Commissioner of Income-tax (Appeals) erred in holding that the amended provisions u/s.80IB(10)(d) and 80IB(10)(c) would not be applicable to projects commenced prior to 01.04.2005? 4. The learned Commissioner of Income-tax (Appeals) erred in coming to the above conclusion on the incorrect premise that estoppel can be invoked against the Government in exercise of its legislative powers? 5. The learned Commissioner of Income-tax (Appeals) erred in holding that though the amended provision of section 80IB(10)(d) and 80IB(14)(a) came into operation w.e.f 01.04.2005, those were not applicable in the case of assessee relating to A. Y.2005-06 without appreciating and applying the principle laid down by Hon'ble Supreme Court in the case of CIT Vs Isthmian Steamship Line, 20 ITR 52 and Karimtharuvi Tea Estate Ltd., 60 ITR 262 ? 6. The learned Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on certificate mentions the completion of both the shops and showrooms. We find the AO denied the claim of deduction u/s.80IB(10) on the ground that (a) the project approved by PMC is both residential and commercial (b) the projected consisted of commercial area of 12,325 sq.ft. (c) the built up area of all the units in building F exceeded 1500 sq.ft. and (d) the built up area of 4 flats after being combined exceeded 1500 sq.ft. in respect of building D. 25. We find before the CIT(A) the assessee took additional ground that it is entitled to claim deduction u/s.80IB(10) in respect of building F as well as J and K and the 4 flats of building D. We find after considering the various submissions made by the assessee the Ld.CIT(A) allowed the claim of deduction u/s.80IB(10) in respect of the entire housing project. While doing so, he held that since the project has been approved on 17-12-2004 which is prior to 01-04-2005 , therefore, the areas covered by terraces and balconies are to be excluded from the built up area and therefore the units of building F, where none of the units exceed 1500 sq.ft. after reducing the terraces and balconies and therefore the assessee is entitled to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts own facts. Therefore, the first ground of the revenue that when the claim of deduction u/s.80Ib(10) was not made for the entire project in the return of income filed or in the course of assessment proceedings or in Form 10CCB filed before the AO, the CIT(A) erred in allowing the claim of deduction u/s.80IB(10) of the Act to the project is devoid of any merit and accordingly the same is dismissed. 29. Now coming to the other issues are concerned, we find the AO denied the benefit of deduction u/s.80IB(10) on the ground that the project consisted of commercial area of 12,325 sq.ft. As mentioned earlier, the project has been approved by the PMC on 17-12-2004, i.e. prior to 01-04-2005. The Hon ble Supreme Court in the case of Sarkar Builders (Supra) has held that where housing projects were sanctioned before the amendment but have been completed after 01-04-2005 when the amended provisions came into operation the assessee would be entitled to the deduction u/s.80IB(10)and the conditions mentioned in clause (d) would not apply. Thus, the benefit restricted to cases where the area utilized for shops and commercial establishments does not exceed 5% of aggregate built up area of hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on/approval prior to 1st April, 2005 would the provision of section 80IB(14)(a) of the Act, have any application. 4. Mr. Suresh Kumar, Ld. Counsel for the Revenue fairly states that the present controversy stands concluded in favour of the Respondent Assessee by the decision of this Court in Income Tax Appeal No.1628 of 2013 (CIT Vs. Raviraj Kothari Punjabi Associates) rendered on 24th April, 2015 in respect of section 80IB(14)(a) of the Act. Further, it is submitted that the ratio of decision of the Apex Court in CIT Vs. M/s. Sarkar Builders would also apply to the present case. 5. In view of the above, both substantial questions of laws are answered in the affirmative, i.e. in favour of the Respondent Assessee and against the Revenue. 32. Since in the instant case the built up area of all the units of building F are less than 1500 sq.ft. after excluding the balconies and terraces, therefore, the CIT(A) was fully justified in allowing the claim of deduction u/s.80IB(10) in respect of building F. 33. So far as denial of deduction u/s.80IB(10) in respect of the 2 units of building D are concerned, we find the assessee has not claimed deduction in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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