TMI Blog2016 (1) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered entire facts & circumstances of the case. Present eligible projects is similar to Omaxe Green Land project. Therefore, treat the eligible projects as a separate housing project on similar lines of Noida project. Commercial area of entire housing scheme is more than permissible limit as per clause (d) of Section 80IB(10) - CIT(Appeals) did not agree with the assessee that the commercial area are within the limit of amended permissible area as per clause D of section 80IB(10) introduced by Finance Act, 2010 as clarificatory in nature as it would apply to the project started before 31.3.2008. We concur with this finding of the Learned CIT(Appeals) that amendment in the said clause (d) is not clarificatory and, therefore, it would not apply retrospectively. The Learned CIT(Appeals) has, however, held that the eligible towers are separate housing projects and, therefore, deduction under sec. 80IB (10) is available. The further contention of the assessee that the commercial area is not developed and right to develop the same is transferred to other company and the said transfer is duly intimated to the local authority and that a transfer is not a mere book entry as claimed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng sites i.e. developed plots consisted in the housing projects. Both the parties are in appeal before us against the order of learned CIT(A) for their respective grievances as per Grounds of Appeal. 6. The Revenue has questioned First Appellate Order on the following grounds: Grounds ITA No. 4034: 1. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in allowing deduction u/s. 10IB(10) of the Income-tax Act, 1961 in respect of profits from housing projects which are Group housing schemes of multistoried flats in the projects namely Omaxe Heights, Faridabad, Omaxe Heights, Badadurgarh, Omaxe Heights, Sonepat, Omaxe Parkwood, Baddi and Omaxe Reviera, Pant Nagar. 2. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the Group housing projects of housing projects namely Omaxe Heights, Faridabad, Omaxe Heights, Bahadurgarh, Omaxe Heights, Sonepat, Omaxe Parkwood, Baddi and Omaxe Reviera, Pant Nagar are separately satisfying the conditions of sec. 80IB(10) of the Income-tax Act, 1961 despite observing that the consolidated approval of the local authority is for the entire project. 3. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in holding that the project Omaxe Heights, Sonepat and plots and villas included in Omaxe City, Sonepat as district housing projects, when the assessee himself has considered the projects Omaxe City, Sonepat which contains plots and villas and Omaxe Heights, Sonepat as one project and in allowing deduction under sec. 80IB(10) of the Income-tax Act, 1961 to the assessee in excess of the deduction claimed by the assessee in the return of income. 11. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 7. The assessee on the other hand has impugned the First Appellate Order on the following grounds: 1. On the facts and circumstances of the case and in law, the Learned CIT(Appeals) (i) Erred in confirming the action of the Learned Assessing Officer in disallowing the deduction under sec. 80IB(10) of the Income-tax Act, 1961 (the Act) claimed by the appellant in respect of following eligible housing projects. Name of the project Deduction claimed and disallowed under sec. 80IB(10) in Rs. Omaxe City, Rohtak 1,91,34,660 Omaxe Parkswood II, Chakkan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... large scale townships consisting of group housing and independent residential units some of which are built up i.e. villas, floors etc. and some are unbuilt i.e. plots. These townships also consist of separate area earmarked for commercial use. Commercial area from group housing projects and township housing projects was transferred to other entities (group companies/ independent entities) without any construction thereon. 9. Out of these large group housing projects/ townships, the assessee claimed deduction of ₹ 189,70,14,901 only on eligible housing projects i.e. built up residential units having built up area within the prescribed limit and unbuilt residential units. Detailed project wise chart has been submitted during course of hearing. No deduction was claimed on commercial area of any project and residential units having built up area more than the prescribed limit. This fact is undisputed. 10. Departmental Appeal : The primary issue raised in the present case relates to the aforesaid projects undertaken by the assessee satisfying some of the conditions prescribed in section 80IB(10) of the Act. The major legal issues on which deduction has been denied to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 holding that deduction under sec. 80IB(10), provided to a project and if there is violation of condition in any of the residential units no deduction under sec. 80IB(10) can be allowed to the assessee . Similar view has been expressed by the ITAT, Chennai Bench in the case of ACIT vs. Viswas Promoters Pvt. Ltd. in ITA No. 1912/MDS/2007 (A.Y. 2004-05) order dated 13.10.2008. The learned CIT(DR) also cited the decision of Hon ble Supreme Court in the case of Padmasundara Reassessment order Ors. Vs. State of Tamilnadu 255 ITR 147 (S.C) holding that the court cannot read anything into a statutory provisions which is plain and unambiguous. He submitted that a project cannot be approved in piecemeal. Approval is accorded to the entire project. Blocks of residential units are part s of a project and not project by itself. As such a block of residential unit cannot be construed to be a separate project. 12. The Learned AR on the other hand reiterated the submissions made before the authorities below and the decisions cited there. He submitted that in the case of the assessee, various township projects were undertaken on large plots with size varying from 10 acres to 329 acres. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. Once approval is granted by the local authority, the entire project is approved. Merely because consolidated application is filed by the assessee for approval of the housing project, that does not, in his submission, mean that one has to only look at the complete/ consolidated project as such. What is material and important is to examine whether the consolidated license consists of any independent and separate eligible housing project, which independently and separately satisfies the various conditions for claiming deduction under section 80IB(10) of the Act or not. If any part of the consolidated project consists of eligible independent/ separate housing project, which satisfies all the conditions of that section, there is, no reason to deny deduction in respect of the profits derived from such eligible housing project. Further, the commercial area, also, did not form part of the eligible housing project. It is, important to note that deduction was not at all claimed by the assessee in respect of profits from the commercial area. Despite the aforesaid, in order to put the matter beyond any doubt and to strengthen the claim, the assessee decided to transfer the commercial area ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial area, in any case, was not at all claimed by the assessee to be part of the eligible housing project in respect of which deduction was claimed. The assessing officer had proceeded on the ground that the entire housing project has to be seen with reference to the consolidated approval granted by the local authority and, therefore, the commercial area shall continue to form part of the housing project, despite the fact that the same was transferred to other company(ies). Such contention of the assessing officer, as elaborately discussed supra, is not legally sustainable. As discussed supra, the mere fact that a consolidated license had been approved for the large housing project does not, it was submitted, bar transfer of any part thereof, to be independently developed by a third party, and cannot be the ground for denying deduction in respect of profits of the eligible housing project. 12.4 In view of the aforesaid, it was submitted by the Learned AR that the assessing officer totally misconstrued the provisions of section 80IB(10) of the Act to hold that if the consolidated project does not satisfy all the conditions prescribed in the said section, then no deduction is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... building and the wordings in Section 80IB(10) of the Act, the question of rejection in entirety of the project on account of any one of the blocks not complying with the conditions, does not arise. Even in the case of each one of the blocks, wherever there are flats which satisfied the conditions particularly of the nature stated under Section 80IB(10)(c) of the Act, we have already upheld the case of the assessee in T.C.Nos.1348 and 1349 of 2007 dated 10.10.2012 for grant of relief under Section 80IB(10) of the Act on a proportionate basis, by following the decision of the Bombay High Court reported in [2011] 333 ITR 289 (CIT Vs. Brahma Associates). Thus applying the decision of this Court in T.C.Nos.1348 and 1349 of 2007 dated 10.10.2012, we hold that the assessee is entitled to succeed both on the principle of proportionality as well as by reason of the construction on the meaning of the expression housing project as referring to construction of any building and the wordings in Section 80IB(10) of the Act. In the circumstances, we hold that the mere fact that one of the blocks have units exceeding built-up area of 1500 sq.ft, per se, would not result in nullifying the claim o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0) of the Act. In such an event, on a reading of the provision, we hold that the assessee would not be entitled to have the benefit of 100% absolute deduction under Section 80-IB(10) of the Act in respect of the entire project, but would be entitled to pro-rata deduction on the units satisfying the condition under Clause (c). Given the object of the provisions under Section 80-IB(10) of the Act, when the deduction to be granted is on the profits and gains of undertaking developing and constructing approved housing projects, in the absence of restrictive covenant under sub- Section (10) of Section 80-IB, we do not find any justifiable ground to hold that on the mere fact of some of the units having the built-up area exceeding the condition specified under clause (c), the claim for deduction would stand rejected on the entire project. As pointed out in the decision of the Bombay High Court reported in [2011] 333 ITR 289 CIT v. BRAHMA ASSOCIATES, with zones classification permitting commercial establishment in residential flats too, once the local authorities approved the project with or without the commercial use as permitted under the Rules, the project approved is eligible for dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows deduction to a housing project (subject to fulfilling all other conditions ) constructed on a plot of land having minimum area of one acre and it is immaterial as to whether any other housing projects are existing on the said plot of land or not.. 12.7 In the aforesaid case, the project of the assessee consisted of buildings A, B, C, D and E, out of which only building E was eligible for deduction under section 80IB(10) of the Act. The assessing officer, however, denied deduction on the ground that the size of the plot in relation to Building E did not exceed the prescribed area of 1 acre and therefore, the assessee was not eligible for deduction. The Bombay High Court, approving the order of the Tribunal held that the plot of land may have other housing projects, which may not be eligible for deduction under section 80IB(10) of the Act; nevertheless, the deduction will be admissible on that part of the housing project which is eligible for deduction under that section. It will, thus, kindly be appreciated that the aforesaid decision, in fact, goes a step further and held that claim of deduction cannot be denied on portion of the housing project, even though the eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. 12.9 The Special Bench of the Tribunal in the case of Brahma Associates vs. JCIT: 119 ITD 255/ 30 SOT 155 (Pune), while considering the provisions prior to 1.04.2005, held that: (i) Once a housing project consisting of residential and commercial establishments is approved by the local authority, then the same is eligible for deduction; (ii) There was no specific limit/ restriction as to the commercial area forming part of the housing project. In case residential area was 90% or more of the built up area, then, the entire project was eligible for deduction; (iii) However, in case commercial area is 10% or more of the built up area, but residential segment on a standalone basis satisfies the conditions of section 80-IB(10) of the Act, then, deduction would be admissible in respect of residential segment of the project. 12.10 In further appeal preferred by the Revenue against the aforesaid decision of the Special Bench of the Tribunal, the Bombay High Court has partly affirmed the decision in CIT v. Brahma Associates: 333 ITR 289 (Bom.). The Hon ble Court held that restriction inserted with effect from 1.4.2005 as to permissible limit of commercial use in project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are of the view that no substantial question of law arises for our consideration in ITA Nos.485/2010 480/2010. The orders of the Tribunal are accordingly upheld and the appeals filed by the Revenue are dismissed. 12.13 Pro-rata deduction has similarly been held allowable in the following decisions: - Brigade Enterprises (P) Ltd.: [2009] 28-SOT-7 (Bang.) - ITO v. AIR Developers: [2010] 122 ITD 125 (Nag) - G.V. Corporation V. ITO: [2010] 38 SOT 174 (Mum.) - ACIT v. Sheth Developers (P.) Ltd.: [2009] 33-SOT-277 (Mum) - Prakruti Constructions (P) Ltd V. ITO: ITA No. 2264 2265/ Mum/ 2011 - Delhi Iron and Steel Pvt. Ltd in ITA No. 2497/ Del/ 2007 12.14 The Learned AR thus pointed out that the Hon ble High Courts and various benches of the Tribunal have consistently held that proportionate deduction can be allowed in respect of profits of residential units forming part of the housing project, which satisfies conditions prescribed in section 80IB(10) of the Act. 12.15 The Learned AR submitted further that once pro-rata deduction has been held to be admissible in respect of eligible area of the project, the location of the eligible residential units, withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (5), some of the residential Towers have flats/residential units having built up area more than the prescribed limit as per clause (c) of Section 80IB (10) i.e. 1000 sq. ft. within the city of Delhi or Mumbai or within 25 Kms from the limit of Municipal Limits of these two cities or 1500 sq. ft. at any other place. In all such cases there is consolidated approval for the entire projects from Local authority. The assessing officer has denied the deduction on one of the ground that since some of residential towers have residential units more than constructed area of 1000 sq. ft. or 1500 sq. ft. as the case may be, therefore conditions contained in clause (c) is violated as there is consolidated approval from local Authority. Therefore, the assessing officer has treated entire project as one housing project has held that the condition contained in clause (c) is not fulfilled. Second ground for denial of deduction u/s 80IB (10) for all these project IS commercial area exceeded the limit prescribed under clause (d) of Section 80IB (10). Ld. AR has argued that the appellant has claimed deduction only from the profit of eligible housing projects within the consolidated project. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts by the assessing officer is violation of clause (d) of Section 80m (l0). There has been amendment in clause (d) w.e.f. 01-04-2010. Prior to amendment the permissible commercial area in the housing project was five percent of the agreegate built up area of the housing project or two thousand sq. ft. which even is less. W.e.f. 01-04-2010, the permissible commercial area is three percent of the aggregate built up area of the housing project or five thousand sq. ft. whichever is higher. On factual aspect Ld. AR has argued that total commercial area in entire project is not conforming to the condition prior to 01-04-2010, but conforms to the condition in clause (d) after 01-04-2010. Further, he argued, that amendment w.e.f. 01-04-2010 is curative clarificatory. I do not agree with the view of Ld. AR that the amendment in clause (d) is clarificatory apply retrospectively. The amendment has been made prospectively w.e.f 01-04-2010 not retrospectively. If the purpose of amendment was clarificatory then it should have been made retrospectively as it is substantive provision. Accordingly I do not agree with arguments of Ld. AR on this issue. Second arguments of Ld. AR is that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the name and style of Agrini and Vajra is stated to be the master plan of the project, it is not denied by the Revenue that each block in each of the projects has its own specification; hence had gone for planning approval by the competent planning authority. In the background of this, the question that arises/or consideration is as to whether the assessee would lose its claim: for deduction in respect of those blocks which satisfied the conditions under Section 80lE (la) of the Act by reason of some of the stocks not satisfying the condition under Section 80lE (la) of the Act. 14. On the facts admitted by the Revenue in the projects Agrini and Vajra there are number of flats which are below 1500 sq. f]. and the relevant built-up area requirement is specified under Section 80lE (lO)(c) of the Income Tax Act Thus, the built-up area in some of the flats ill boin these projects are in excess of 1500 sq. ft., i.e., 32 flats in Agrini and only one flat in Vajra and that the assessee had not claimed any deduction on this. We hold that the Tribunal is not correct in its vie w, that by reason of these U!1its being in excess of 1500 sq. ft., the entire claim of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sociates (citied supra). Ld. AR argued that the said judgment was delivered in the context of commercial area argued that the said judgment has been considered by hon able Madaras High Court in the case of Vishwas Promoters Pvt. Ltd. and after analyzing the Judgement of Mumbai High Court, Madras High Court has delivered the Judgement. Ld. AR further argued that on proportional deduction of eligible housing projects U/S 80IB (10) the Kolkata High Court has concurred the view by not interfering the Judgment of Kolkata Tribunal on this issue in the case of Bengal Ambuja Housing Development Ltd. in ITA No. 453 of 2006. Ld. AR further has relied on numerous decisions of honable IT AT in assessees favour holding that prorata deduction is available with respect to residential unit which satisfies the requirement of maximum constructed area where the other residential units violates the maximum built up area that the appellant s case is on much better footings where these eligible residential houses are identifiable cluster of Towers, having separate identified Land Various facilities. These residential towers do not contain even a single residential unit which violates the max ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing appellate proceedings, Ld. AR has segrated the projects where only plot were sold where the appellant has sold both plot villas. 5.2.2 In following projects, the appellant has sold only residential plots without construction of residential units. 1. Omaxe City, Rohtak 2. Omaxe Parkwood II, chakkan Baddi. 3. Omaxe City-II, Mangaliya, Indore 4. Omaxe City, Mayakheri, Indore 5. PDA Omaxe City, Patiala 5.2.3 In following projects, the appellant has sold residential plots as well as villas. 1. Omaxe City, Sonepat 2. Omaxe City, Lucknow 3. Omax City, Jaipur 4. Omaxe City, Palwal 5.2.4 Firstly I would consider 5 projects mentioned in para 5.2.3, where the appellant has sold only residential plots. The Ld. AR has relied upon the decision of Sreevasta Real Estate Ltd. 9 ITR Trib 808 (IT A T, Chennai) argued that housing project is not defined under the section 0IB, therefore even residential plot will be included in housing project. I have perused the decision of Sreevastsa Real Estate Ltd. Cited Supra. In that case the issue was whether there was approval of local authority. Facts of the case is as under :- Now if we see sub-section (lO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer s action for non-allowance the deduction u/s 80IB in respect of these 5 projects are hereby confirmed . 5.2.6 Now I would consider the allow ability of deduction uls SOIB (10) in respect of other projects as numerated in para 5.2.4, these are the projects where, the appellant has sold some plots without construction some plots after construction. The appellant claims that where ever constructed residential units are sold, construction area is less than the prescribed limit as per condition c of section 80IB (10). The Ld. AR has argued that the appellant has taken approval for each residential units for its sectioned construction plan and completion certificate for each villas are separately issued in favour of the appellant. Therefore, Ld. AR argued that assessing officer s claim that the approval is for plotted colony there is no approval of construction of residential units is not proper. The total constructed area, No. of villas Land area of different project is as under :- S.No. Projects Name and total area of the project. Components No. Of Towers/Plots/Villas/Area ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order. The facts are similar i.e. constructed villas constitutes eligible housing projects pro-rata deduction is allowable. Ld. AR specially argued that pro-rata deduction was allowed u/s 80IB (l0) in the case of Sreevastsa Real Estate Ltd. 9 ITR Trib. 808 (ITA T, Chennai) in case of eligible villas constructed on plots. Second issue raised by the assessing officer is violation of clause (d) of Section 80IB (l0). There has been amendment in clause (d) w.e.f. 01-04-2010. Prior to amendment. the permissible commercial area in the housing project was five percent of the aggregate built up area of the housing project or two thousand sq. ft, which even is less. W.e.f. 01- 04-2010, the permissible commercial area is three percent of the aggregate built up area of the housing project or five thousand sq. ft. whichever is higher. On factual aspect Ld. AR has argued that total commercial area in entire project is not conforming to the condition prior to 01-C4-201O, but conforms to the condition in clause (d) after 01-04- 2010. However, he h . -s argued, that amendment w.e.f. 01-04-2010 is curative clarificatory. I do not agree with the view of Ld. AR that the amendment in clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Omaxe City, Patiala 48,82,09,699 Omaxe Reviera, Pant Nagar, Uttranchal 45,22,38,237 Omaxe City, Mayakheri, Indore 19,17,82,533 Omaxe City, Mayakheri, Indore 6,86,87,350 Total 1,88,25,94,379 12.18. The Assessing Officer has discussed the eligibility of the claimed deduction on projectwise and has denied the claim to the above extent mainly on the basis that out of several conditions laid down under sec. 80IB(10) of the Act, the assessee has not fulfilled the conditions laid down under clause (c) and (d) of section 80IB(10) of the Act. The conditions laid down in clause (c) of the section is that the residential unit should have maximum built up area of 1500 sq. feets as the project is not located within 25 kilometers from the municipal limit of Delhi and 1000 sq. ft. where project falls in the said 25 kilometers. As per the Assessing Officer, this condition was not satisfied as the prescribed area was exceeding in some of the flats of the projects. The Assessing Officer was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80HHBA. Deduction in respect of profits and gains from housing projects in certain cases.: Explanation: (a) housing project means a project for- (i) the construction of any building, road, bridge or other structure in any part of India; (ii) the execution of such other work (of whatever nature) as may be prescribed; The assessee did undertake construction of roads, other structures like STP, water tanks, bridges etc. in its housing projects. It also undertook construction of residential houses/flats in the housing projects, albeit, in some cases, profits from the same were booked in succeeding years. Perhaps the law makers, in all their wisdom, did not see the need of defining the housing project again in section 80IB as reference could very well be drawn from section 80HHBA, as both the sections fall in the same chapter and are incentive provisions for development of housing projects. In fact this view has been approved by Hon ble Madras High Court in case of CIT vs Arun Excello Foundations Pvt Ltd (259 CTR 362) (Madras) in ITA No. 1348 and 1349 of 2007. Relevant extracts are as under: ..There is no definition of housing project under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved as under: The clarification of CBDT vide letter dt. 04.05.01 to Maharastra Chamber of Housing Industry clearly states that any project, which is approved by local authority as a housing project , should be considered adequate for the purpose of Section-10(23G) and 80IB(10) of the Act. This clarification by the CBDT is of no help to the case of the assessee for the reason that the Building Project of the assessee was not approved by the local authority namely KDMC as a Housing Project and was in fact approved as a residential as well as commercial project by them. Though the aforesaid case was decided against the assesse as his project was approved not as a housing project but as a residential and commercial project , but Hon ble ITAT has reached on this conclusion by placing reliance on the clarification given by CBDT. The learned AR submitted that the aforesaid decisions support the case of the Appellant inasmuch the project under consideration was, as discussed supra, undisputedly approved as residential project by the local authority. Thus, applying the ratio laid down in the cases discussed above, once the project was approved as housing project by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction of the housing project are preconditions for claiming deduction under section 80IB(10). However Ld. CIT(A) has interpreted this provision in a very narrow manner. What is specified is development and construction of housing project and not residential units. Construction of the housing project includes construction of roads, boundary walls, overhead tanks, STP, etc. The appellant undertook development and construction of the housing project as under: Construction of sector road, service road and internal circulation road Provision of sewerage system, drainage, STP Electrification of the residential township and provision of street lights. Provision of water supply system Provision of parks and plantation of trees Provision of basic amenities like community centre, schools, dispensary, cr ches, playground etc. Provision for units reserved for economically weaker section Providing developed and demarcated housing sites in the residential township as per the approved lay out plan. (vii) The Learned AR submitted that various activities are involved in the development and construction of a housing project, of which construction of residential un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been provided in order to promote the housing policy of the Government, which not only aims at construction of the dwelling units but providing well planned housing schemes with adequate infrastructure facilities as under: (i) Creation of adequate housing stock both on rental and ownership basis. (ii) Facilitating accelerated supply of serviced land and housing with particular focus to EWS and LIG categories and taking into account the need for development of supporting infrastructure and basic services to all categories. (iii) Facilitate Upgradation of infrastructure of towns and cities and to make these comparable to the needs of the times. (iv) Ensuring that all dwelling units have easy accessibility to basic sanitation facilities and drinking water. Development of the housing project consisting of residential plots, as done by the appellant, it is respectfully submitted, also achieves the aforesaid objective inasmuch as the same results in development of housing sites leading to development of states and towns. (ix) Lower Authorities failed to appreciate that provision in a taxing Statute granting incentive for promoting growth and development should be constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction of some plots in later years would not qualify the assessee for exemption. The Hon ble Court further observed that the legal issues were clearly understood by the Tribunal and it is not a case where any interpretation of law was required by the High Court. Accordingly, the Hon ble High Court proceeded to dismiss the appeal filed by the Appellant holding that no substantial question of law was involved. 13.5 The Learned AR fairly inferred that review petition filed by the Appellant was also dismissed by the Hon ble High Court vide order dated 14.03.2014. 14. The learned CIT(DR) on the other hand placed reliance on the orders of the authorities below on the above issues. 15. Considering the above submission, we fully concur with the orders of the authorities below that deduction under sec. 80IB(10) of the Act in respect of profits derived from the housing project consisting of unbuilt housing sites cannot be allowed. We also do not find reason to agree with the contention of the Learned AR that activity of mere developing housing site along with construction of all infra-structural facility and amenities with unbuilt residential unit is development and construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in allowing deduction u/s. 80IB(10) of the Income-tax Act, 1961 amounting to ₹ 16,82,15,090 in respect of profits derived from 24 towers in project Omaxe Palms, Greens, Sec. MU, Gr. Noida where each residential unit is having constructed area less than 1500 sq. ft. 4. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the 24 towers in project Omaxe Palms Greens, Sec. MU, Gr. Noida where each residential unit is having constructed area less than 1500 sq. ft. are separate housing project despite a single approval by the competent authority for the entire project. 5. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the commercial area of 4004.24 sq. meter in Project Omaxe Palms Greens, Sec. MU, Gr. Noida whch is more than the limit prescribed under sec. 80IB(10) of the Income-tax Act, 1961 and its transfer to other group companies is not material for examining the allowability of deduction u/s. 80IB(10) of the Incometax Act, 1961. The order of the Learned CIT(Appeals) is erro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portionate deduction cannot be allowed under sec. 80IB(10) of the Act. The Learned CIT(Appeals) has allowed the claimed deduction on those residential units complying the conditions laid down under sec. 80IB(10) of the Act on standalone and proportionate basis, which has been questioned by the Revenue before the ITAT vide ground Nos. 3 to 5 of the appeal. 19. The parties have adopted similar arguments on the issues raised in the grounds of the appeal as they have advanced on identical issues hereinabove in the appeal of the department in the case of Omaxe Ltd. for the assessment year 2008-09. 20. We firstly take up ground Nos. 1 and 2 of the appeal preferred by the Revenue together which is regarding allowability of deduction under sec. 80IB(10) of the Act in respect of profit derived from Group Housing Scheme GH-03 in Housing Project, Omexe Grand Woods, Sector 93B, Noida and as to whether the group housing scheme GH-03 in housing project, Omexe Grandwood, Sector-93, Noida constitutes a separate housing project despite a single approval by the competent authority in respect of group housing scheme GH-01, GH-02 and GH-03 . 20.1 We have already discussed the related fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) are named as G H -03 having each flat (housing units) less than 1000 sq. ft. Other Towers T-l3 to T-33(21) which was revised to 14 towers T-12 to T-25 are under Group Housing Scheme 01 02 namely GH-O 1 GH-02, having bigger flats. The appellant company has maintained separate Books of accounts for GH-Ol, GH-02 OH-03 claimed deduction uls. 80IB in respect of profit derived from GH-03. These facts are not disputed by the assessing officer. The basic issued raised by the assessing officer is that entire projects namely Omaxe Greenwood consisting of 33 Towers is a single housing projects in towers 13 to 33 built up area of each residential unit is more than 1000 sq. ft. Therefore, condition( c) of Section 80IB is not fulfilled. He has supported his logic on the basis of single approval by the competent authority. I have perused the allotment of NOIDA dated 03-10-2006 in favour of the appellant company which is part of the paper book. Subject of this letter is Allotment of Group Housing Plot No. OH-OI, 02, 03 Sector 93B under Group Housing Scheme GH 2006(4) . This letter is basically approval of the Local authority. That being the case, this approval recognizes se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that each one of blocks had separate sanction from the competent authority. Even though the larger area comprised in the name and style of Agrini and Vajra is stated to be the master plan of the project, it is not denied by the Revenue that each block in each of the projects has its own specification; hence had gone for planning approval by the competent planning authority. In the background of this, the question that arises for consideration is as to whether the assessee would lose its claim for deduction in respect of those blocks which satisfied the conditions under Section BOIB (] 0) of the Act by reason of some of the stocks not satisfying the condition under Section BOIB (10) of the Act. 14. On the facts admitted by the Revenue in the projects Agrini and Vajra there are number of flats which are below 1500 sq. ft. and the relevant built-up area requirement is specified under Section BOIB (IO)(c) of the Income Tax Act. Thus, the built-up area in some of the flats in both these projects are in excess of 1500 sq. ft., i. e., 32 flats in Agrini and only one flat in Vajra and that the assessee had not claimed any deduction on this. We hold that the Tribunal is not corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is. The assessing officer has relied on the Judgement of Hon ble Mumbai High Court in the case Brahma Associates (citied supra). Ld. AR argued that the said judgment was delivered in the context of commercial area argued that the said judgment has been considered by Hon ble Madaras High Court in the case of Vishwas Promoters Pvt. Ltd. and after analyzing the Judgement of Mumbai High Court, Madras High Court has delivered the Judgement. Ld. AR further argued that on proportional deduction of eligible housing projects u/s 80lB (10) the Kolkata High Court has concurred the view by not interfering the Judgment of Kolkata Tribunal on this issue in the case of Bengal Ambuja Housing Development Ltd. in ITA No. 453 of2006. Ld. AR further has relied on numerous decisions of hen able IT A T in assessee s favour holding that prorata deduction is available with respect to residential unit which satisfies the requirement of maximum constructed area where the other residential units violates the maximum built up area that the appellant s case is on much better footings where these eligible residential houses are identifiable cluster of Towers, having separate identified Land Variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not dilute the independent housing scheme and demarcated in approved plan and independent facilities. Under these circumstances and keeping in view the decision followed by the Learned CIT(Appeals), we are of the view that the Learned CIT(Appeals) has rightly allowed the claimed deduction on prorate basis available with respect to residential unit which satisfied the requirement of maximum constructed area. It has not been disputed in the present case that these eligible residential houses were identifiable cluster of towers, having separate identified land and various facilities. We thus do not find reason to interfere with the first appellate authority. In this regard, the same is upheld. Ground Nos. 1 and 2 are accordingly rejected. 21. Ground Nos. 3 to 5: It is regarding eligibility of deduction under sec. 80IB(10) of the Income-tax Act, 1961 in respect of profits derived from 24 towers in project Omaxe Palm Green, Sector- MU, Greater Noida. The Learned CIT(Appeals) has given relief accepting the alternative submission of the assessee that proportionate deduction under sec. 80IB(10) should be given in respect of the residential unit having built up area of less than 150 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th reference to Project and not Projects . The Assessing Officer noted further that the commercial area included in the project is 404.24 sq. mtr. which is much more than the prescribed limit. The assessee tried to meet out all the objections. Regarding approval of the project or projects, the Learned AR adopted similar arguments as advanced by him in relation to the issues raised in ground Nos. 1 and 2 hereinabove. Regarding the exceeding commercial area, it was contended that the commercial area was a part of other projects which was not accepted by the Assessing Officer on the basis that the entire projects is only one project and that the assessee is not entitled to divide the project into two parts as per its sweet will. He held that the approved commercial area is on integral part of the entire project. Meeting out objections raised by the Assessing Officer and explanation thereto provided by the assessee, the Learned CIT(Appeals) has come to the following conclusion vide para No. 5.4 of his order: 5.4 Findings: I have considered entire facts circumstances of the case. The assessing officer has raised two objection for satisfaction of conditions contained in Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessing officer. In my view this fact is not material for examining the allowability of deduction u/s 80IB (10). However as I have held earlier that these eligible Towers are separate housing projects, therefore deduction u/s 80IB (10) is available. In view of the above, I allow deduction u/s 80IB (l0) in respect of profit of the eligible housing projects U/S 80IB (l0). I, accordingly allow the deduction U/S 80IB (l0) on the project. As a result, this ground of appeal is allowed . 23.2 On perusal of the orders of the authorities below, we find that the Learned CIT(Appeals) has rightly accepted the eligible projects as a separate housing project on similar lines of Noida Project adjudicated upon in Ground Nos. 1 and 2, which we have discussed in detail hereinabove while dealing with the ground Nos. 1 and 2 which is also supported by the decisions of the Hon ble High Courts and different Benches of the ITAT followed therein. The finding of the Learned CIT(Appeals) in this regard is thus upheld. 23.3 So far the second objection of the Assessing Officer that the commercial area of entire housing scheme is more than permissible limit as per clause (d) of Section 80IB(10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(Appeals) has erred in allowing deduction u/s. 80IB(10) of the Income-tax Act, 1961 amounting to ₹ 29,14,11,809 in respect of income arising from project GH-03. 3. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the 24 towers in project Omaxe Palms Greens, Plot No. GH-02, Sec.-MU, Gr. Noida where each residential unit is having constructed area less than 1500 sq. ft. are separate housing project. 4. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in allowing deduction u/s. 80IB(10) of the Income-tax Act, 1961 amounting to ₹ 41,18,93,907 in respect of income arising from 24 towers in project Omaxe Palms Greens, Plot No. GH-02, Sec. MU, Gr. Noida where each residential unit is having constructed area less than 1500 sq. ft. 26. In the appeal for the assessment year 2009-10, the Revenue has raised only one issue i.e. allowability of deduction under sec. 80IB(10) in respect of profits derived from group housing scheme GH-03 in housing project Omaxe Grandwoods, Sector 93B, Noida holding that it constitutes a separate housing project despite a single approval by the compe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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