TMI Blog2015 (12) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) erred in interpreting the relevant provisions when they held that the losses suffered by the assessee from two projects, viz. 'Shreyas' and 'Coimbatore' be reduced from the profits of the other two units viz. 'Spandhana' and 'Samruddhi' for granting deduction u/s 80IB. Accordingly, the impugned orders of the lower authorities are set aside. The Assessing Officer is directed to allow deduction u/s 80IB on the profits derived by the assessee from two projects viz. 'Spandhana' and 'Samruddhi' of ₹ 2,23,22,237 - Following decision of CIT v. Canara Workshop (P.) Ltd. [1986 (7) TMI 5 - SUPREME Court] - Decided in favour of assessee. - I.T.A No. 1080 & 1081/Kol/2010 - - - Dated:- 24-11-2015 - Shri Mahavir Singh, JM And Shri Waseem Ahmed, AM For the Appellant : Shri S. S. Alam, JCIT, Sr. DR For the Respondent: Shri D. S. Damle, FCA ORDER Per Shri Mahavir Singh, JM Both these appeals by revenue are arising out of common order of CIT(A)-XXXII, Kolkata in Appeal Nos. 208 12/CIT(A)-XXXII/08-09/Cir-12/R T/Kol dated 12.02.2010. Assessments were framed by ACIT/DCIT, Cir-12, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income of Efficiency (LIG): (-) ₹ 57,23,499/- Income of Comfort (MIG) (-) ₹ 52,89,908/- Income of Luxury (HIG) Rs.3,63,02,849/- Income of the eligible housing project: Rs.2,52,89,442/- Deduction u/s. 80IB(10) @ 100% Rs.2,52,89,442/- 4. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of assessee vide para 6.10 to 6.13 as under: 6.10. It is also noted that the appellant maintained separate books of account for each housing project and profit or loss of each project was separately identifiable. In fact in the impugned assessment the AOP has not disputed the book results disclosed by Profits Loss A/cs prepared by the appellant in respect of each housing project. The AO having accepted profit or loss disclosed by individual Profit Loss A/c prepared for each project; aggregated the profit and loss of all projects for the purpose of computing deduction permissible u/s 80IB(l0). I therefore find that the AO per se did not disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and gone through facts and circumstances of the case. We have also gone through the case records as well as the paper book filed by the assessee. The facts are that the West Bengal Housing Board ( the Board in short) is a autonomous body functioning under the Govt. of West Bengal. The Board granted development rights of housing project to assessee in respect of land admeasuring 5 acres vide agreement dated 26.08.2002. The assessee after taking possession of land, bifurcated the same into two parts (i) admeasuring 3 acres and (ii) admeasuring 2 acres. The building plans for HIG, MIG and LIG projects were separately approved by West Bengal Housing Infrastructure Development Corporation Ltd. (in short WBHIDCL) i.e. the Regulatory Authority for New Town Rajarhat granted approval vide letter dated 23.10.2002. Admittedly, the plans for HIG, MIG and LIG projects were approved separately. It also approved building plans for resident s club and commercial complex separately on 04.12.2002. The assessee claimed that these are three separate projects and approval is also granted by a Regulatory Authority separately. From the records, the assessee claimed that the housing projects for MI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l segments to form one single composite undertaking. He also argued that the documents on record show that after taking possession of the land the assessee consciously demarcated the land in 2 parts to promote two separate housing projects which catered to the housing needs of different class of customers. The objectives behind demarcating and executing housing projects separately were apparent since the target customer base for these housing projects was separate. Even construction specifications, cost of construction and the price charged for apartments in each category were much different and therefore, merely because the assessee constructed apartments on contiguous land did not make 3 housing projects to constitute one single composite housing project. 7. Ld. Counsel for the assessee also argued that the issue of the assessee s appeal is squarely covered by the decision of Coordinate bench in the case of Shriram Properties (P) Ltd. Vs. ACIT (2013) 36 Taxmann 398 (Chennai Trib.). 8. We have gone through the precedents cited by Ld. Counsel for the assessee and found that the Coordinate Bench in the case of Shriram Properties (P) Ltd., supra has dealt with the similar issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead by the authorities below, then instead of the phrase extracted in the preceding line, it should have been aggregate of profits and gains derived from such industrial undertakings . It is, therefore, abundantly clear that there is no reference to the aggregate of profits from all the eligible industrial undertakings. We are, therefore, of the considered opinion that if there is profit derived from a particular industrial undertaking, that will qualify for deduction without reduction of loss suffered by any other eligible industrial undertaking(s). 10. Section 80IB(13) reads as under: (13) The provisions contained in sub-section (5) and subsections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible business under this section22. 11. Sub section(5) of section 80IA reads asunder: (5) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for deduction because the amount of the eligible relief does not exceed the gross total income. Therefore it is mandatory to work out the eligible amount of deduction under various sections of Chapter VI-A individually and then such aggregate amount has to be restricted to the amount of gross total income as computed under section 80B(5), which means the income available after adjusting all the brought forward losses and unabsorbed depreciation etc. 14. Thus, a careful reading of all the above provisions shows that what is relevant for ascertaining the amount which is allowable deduction u/s 80IB are (i) Amount of profit derived from eligible business; and (ii) The amount of gross total income of the assessee The amount of profit derived from eligible business qualifies for deduction u/s 80IB subject to the amount of gross total income of the assessee. There is absolutely no relevance for this purpose of the amount which is arrived at by aggregating income from all the different business of the assessee which is the amount assessable as business income of the assessee. 15. We are reminded of the celebrated judgment rendered by the Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... units viz. Spandhana and Samruddhi of ` 2,23,22,237/- is obviously less than the gross total income. In our considered opinion, the Assessing Officer as well as the ld. CIT(A) erred in interpreting the relevant provisions when they held that the losses suffered by the assessee from two projects, viz. Shreyas and Coimbatore be reduced from the profits of the other two units viz. Spandhana and Samruddhi for granting deduction u/s 80IB. Accordingly, the impugned orders of the lower authorities are set aside. The Assessing Officer is directed to allow deduction u/s 80IB on the profits derived by the assessee from two projects viz. Spandhana and Samruddhi of ` 2,23,22,237/-. Thus, the grounds of appeal of the assessee are allowed. We find from the above precedent and facts of the case, that the issue is squarely covered by the decision of Chennai Tribunal in the case of Shriram Properties (P) Ltd., supra. Similar is the issue and facts are exactly identical in ITA No.1081/kol/2010 for the AY 2005-06, hence, taking consistent view, we decide this appeal also taking similar view. Respectfully following the same, we uphold the orders of CIT(A) and this common issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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