9911796707
TMI Blog2015 (11) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals)-II, Pune dated 15-05-2013 for the assessment year 2010-11. Since, the facts in all the impugned assessment years and the issues raised in the appeals are similar, these appeals are taken up together for adjudication. The assessee in all the three appeals have impugned the findings of Commissioner of Income Tax (Appeals) in disallowing deduction u/s. 80IB(10) of the Income Tax Act, 1961, claimed by the assessee in respect of project 'Damodar Residency'. On the other hand the Revenue in its appeals have challenged the findings of Commissioner of Income Tax (Appeals) in allowing deduction u/s. 80IB(10) to the assessee in respect of housing project at 'Bhujbal Township'. 2. The brief facts of the case as emanating from the records are : The assessee is a builder and a developer. The assessee had developed two residential projects, one at 'Bhujbal Township' and the other at 'Damodar Residency'. The project Bhujbal Township is situated in S. No. 67, Kothrud, Pune on land measuring 40,700 Sq. Mtrs. The entire property on which the project is developed is an ancestral property of Bhujbal Family. The assessee is a partnership firm, consisting of two Bhujbal brothers and their fami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings A2, A3, open space, internal road and building B1 is 4371 Sq. Mtrs. The assessee claimed deduction u/s. 80IB(10) in respect of residential buildings A2 and A3 in the assessment years 2008-09, 2009-10 and 2010-11. During the course of assessment proceedings for the assessment year 2007-08, the property was referred to the DVO. The DVO vide report dated 14-12-2009 observed that the total area of the plot on which the project Damodar Residency is developed is 14,400 Sq. Mtrs. and the gross area of the plot after deduction is 12,300 Sq. Mtrs. The assessee has claimed the area of plot on which the buildings A2, A3 and B1 are constructed as 4370.92 Sq. Mtrs. but there is no separate sanction or demarcation of the land on which the buildings A2, A3 and B1 are constructed. There is no separate demarcation by way of sub-division of the plot on which residential buildings are constructed and developed by the assessee. The DVO further observed that since share of the assessee is undivided there cannot be separate open space pertaining to buildings A2, A3 and B1. Based on the report of DVO the Assessing Officer rejected the claim of the assessee for deduction u/s. 80IB(10). The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Residency is being developed is approximately 3 acres. The residential buildings constructed and developed by the assessee are part of the larger project. It is an undisputed fact that the assessee has complied with all other conditions as envisaged u/s. 80IB(10). Accordingly, the assessee is eligible to claim deduction u/s. 80IB(10). In support of his submissions the ld. AR placed reliance on the decision of Hon'ble Bombay High Court in the case of CIT Vs. Vandana Properties reported as 353 ITR 36 (Bom) and on the decision of Hon'ble Madras High Court in the case of CIT Vs. Sanghvi and Doshi Enterprise reported as 29 taxmann.com 386 (Madras). As regards the appeals filed by the Revenue, the ld. AR contended that the issue raised by the Department in its appeals is squarely covered in favour of the assessee by the order of Tribunal in the assessee's own case for the assessment year 2007-08 decided on 25-02-2013 in ITA No. 641/PN/2011. 4. Shri S.K. Rastogi representing the Department vehemently defended the findings of Commissioner of Income Tax (Appeals) in disallowing the claim of deduction u/s. 80IB(10) in respect of housing project Damodar Residency. The ld. DR submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h has been also perused. It is seen that the project is situated in survey no.67 and consist of the building B- 5, B-9 & B-2. The survey no.69 is having the area of 40,700 sq.mtrs. and the entire property belong to Bhujbal family and it is the ancestral property. The present assessee firm is consisting of the family members as partners. There was a MOU with the bigger Bhujbal family and an area of 4902 sq.mtrs. out of the total area of 40700 sq.mtrs. in the survey no.67 was acquired by the said Partnership firm for the development vide agreement dated 13.4.2006 and 21.8.2007 which is also duly registered with the sub-registrar. The assessee firm proceeded to construct the building no.B-5, B-9 & B-2 on the said area. Admittedly in the agreements, the open space is shown at 1628 sq.ft. in addition to area covered by the internal roads i.e. 2017.87 sq.mtrs. As per the document on record, the project is situated on the piece of land admeasuring 4902 sq.mtrs. We find that the A.O. is influenced with the report of the Department Valuation officer (DVO). The DVO has referred to 26 buildings in the plot admeasuring 40700 sq.mtrs. but the said area belong to the Bhujbal family or Bhujbal (H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of residential buildings A2 and A3 only. Thus, the total area of plot on which the residential project is developed by the assessee stands on land measuring more than 1 acre (conversion 1 acre = 4047 Sq. Mtrs.). Even if the project developed by the assessee is considered as the part of the larger project even then the area of plot is much more than the minimum area specified under the provisions of section 80IB(10) of the Act. There is no bar to claim deduction u/s. 80IB(10) on the housing project which has been developed on a plot of land having area more than 1 acres, even if some other residential projects are already in existence thereon. 9. The Hon'ble Bombay High Court in the case of CIT Vs. Vandana Properties (supra) has held that the provisions of section 80IB(10) does not mandate that the housing project should be on a vacant plot having minimum area. The housing project is eligible for deduction u/s. 80IB(10) subject to fulfilling other conditions, if it is on a plot where other housing projects are already in existence. The relevant extract of the judgment of the Hon'ble High Court in the case of CIT Vs. Vandana Properties (supra) reads as under: "27. Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be said that Section 80IB (10) deduction was intended to give benefit only to the undertakings who construct housing projects on those few plots. Therefore, it is clear that on a plot of land having minimum area of one acre, there can be any number of housing projects and so long as those housing projects are approved by the local authority and fulfill the conditions set out under Section 80IB(10), the deduction there under cannot be denied to all those housing projects. Section 80IB(10) while specifying the size of the plot of land, does not specify the size or the number of housing projects that are required to be undertaken on a plot having minimum area of one acre. As a result, significance of the size of the plot of land is lost and, therefore, the assessee subject to fulfilling other conditions becomes entitled to Section 80IB(10) deduction on construction of a housing project on a plot having area of one acre, irrespective of the fact that there exist other housing projects or not. In these circumstances, the decision of the Tribunal in rejecting the contention of the Revenue regarding the size of the plot cannot be faulted." 10. So far as the objection of the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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