TMI Blog2016 (2) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee filed a Miscellaneous Application stating that one of the issues, i.e. disallowance u/s.80IB(10) in respect of the housing project Kumar Padmalaya remained unadjudicated. The Tribunal vide M.A.Nos. 75 76/PN/2014 order dated 22-05-2015 recalled the order of the Tribunal for the limited purpose of deciding the above issue. Hence, this is a recalled matter. 3. The grounds relating to disallowance of deduction u/s.80IB(10) in respect of housing project Kumar Padmalaya are as under : On the facts and in the circumstances of the case and in law, the Ld.CIT(A) 6. erred in confirming the disallowance of deduction/s.80IB(10) of the Act of ₹ 1,01,94,782/- in respect of a housing project Kumar Padmalaya . 7. should have appreciated that deduction u/s.80IB(10) of the Act, is available, if housing project on standalone basis satisfy all the conditions of the section 80IB(10) of the Act, the deduction is to be allowed. 4. Facts of the case, in brief, are that the assessee, in the return of income, claimed deduction u/s.80IB(10) in respect of 3 projects namely, Padmalaya, Pragati and Priyadarshan. In order to examine the allowability of deduction u/s.80IB(10) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those decisions have been challenged by the Department. Since the assessee has not complied with the completion condition u/s.80IB(10)(a)(i) in respect of the Padmalaya Project the AO held that the assessee is not eligible for claiming of deduction u/s.80IB(10) in respect of the project. He accordingly rejected the claim of deduction u/s.80IB(10) amounting to ₹ 1,01,94,782/- u/s.80IB(10) in respect of the Padmalaya Project. 7. In appeal the Ld.CIT(A) upheld the action of the AO. While doing so, he distinguished the various decisions cited by the assessee and held that those decisions were rendered on a different set of facts and in all those cases the profits were derived from approved housing projects and in that context it was held that deduction can be allowed on standalone basis or proportionate basis, if other conditions for availing the benefit of deduction are complied with. Relying on the decision of the Chennai Bench of the Tribunal in the case of ACIT Vs. Viswas Promoters Pvt. Ltd. reported in 126 ITD 263 and various other decisions he rejected the claim of the assessee that in case of non completion of few units in a housing project the entire deduction can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding allowability of pro-rata deduction u/s.80IB(10) in respect of the housing project Kumar Padmalaya where admittedly some of the units have not been completed before 31-03-2008. According to the revenue, for claiming deduction u/s.80IB(10) the assessee has to fulfil all the conditions laid down in section 80IB(10) and there is no concept of pro-rata deduction. According to the assessee it is entitled to pro-rata deduction u/s.80IB(10) in respect of the units which fulfill the conditions laid down in section 80IB(10). 13. We find the Hon ble Madras High Court in the case of Viswas Promoters Pvt. Ltd. (Supra) while allowing proportionate deduction u/s.80IB(10) has observed as under : 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 underSection 80IB(10)(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 correct in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the projects called Agrini and Vajra, but to the extent of each of the blocks satisfying the conditions under Section 80IB(10) of the Act, the assessee would be entitled to the relief on a proportionate basis. 14. We find following the above decision the Pune Bench of the Tribunal in the case of Padmavati Developers (Supra) has decided the issue of prorata deduction in favour of the assessee by holding that assessee is entitled to pro-rata deduction in respect of the residential units which have complied with the conditions and were eligible for the deduction u/s.80IB(10). The relevant observation of the Tribunal at Paras 36 to 38 of the order read as under : 36. Now, coming to the second housing project in Sector No.7. Admittedly, the assessee in assessment year 2006-07 has completed only 2 buildings i.e. Q-1, Q-2 and some flats in assessment year 2007-08. The building comprised in P-1 to P-6 and the row houses have not been constructed by the assessee till the date of survey and upto 31.03.2008. 37. The Hon ble Madras High Court in Viswas Promoters Pvt. Ltd. vs. ACIT, (2013) 255 CTR 149 (Mad.) have laid down that within a composite housing project, where there are ..... 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