TMI Blog2012 (3) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... 07 and 2007- 08 for the quantum of assessment determined u/s.153A r.w.s 143(3). Since the issues involved in all the three appeals are similar, hence the same are disposed off by the common order. 2. The only issue involved in all these appeals is with regard to the disallowance of claim of deduction u/s.80IB(10). Since the grounds of appeals are common in all the years, however for the sake of ready reference, the grounds of appeals as raised by the department in the Assessment Year 2005-06 are reproduced here in below:- 1. The Ld. CIT(A) has erred in allowing deduction u/s.80IB(10) to the tune of `.2,37,29,264/-. 2. The Ld. CIT(A) has erred in holding that the assessee is eligible for deduction u/s.80IB(10) of the Act without appreciating that the project consists of commercial units. 3. The decision of Hon'ble Spl. Bench ITAT, Pune in the case of Brhamha Associates v/s. Joint Commissioner of Income Tax (2009) (122 TTJ (Pune) (SB) 433), is applicable only for A.Y. 2004-05 and earlier year and not for A.Y. 2005- 06 or subsequent year. However CIT(A) based on this decision allowed relief in assessee favour for A.Y. 2005-06. 4. The order of the CIT(A) may be vac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer rejected the explanation of the appellant on the ground that the project had been approved as commercial-cumresidential project having total constructed area of 1162.8 sq. mtr including 1165 sq. mtr of commercial area. He held that both constituted one single and integrated project. The commercial area also slightly exceeded by 10% and, therefore, the assessee failed to fulfil the conditions laid down u/s.80IB(10). For coming to this conclusion, he relied upon the decision passed in the case of M/s. Laukik Developers vs. DCIT passed by ITAT, Mumbai. 4. Before the CIT(Appeals), the contention of the assessee remained same that after the process of acquisition was completed from CIDCO Ltd., it entered into a negotiation with M/s. Thakkar Enterprises for transferring the development rights in respect of the portion of plot area on which compulsory commercial area was required to be developed as per the regulation of local authority and NMMC. Accordingly, the portion of the plot on which commercial component was required to be developed as per the requirements of local authority, was transferred to different party under MOU dated 06.09.2002. Thus the assessee diveste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were cited in support of the above contentions which has been dealt by the CIT(Appeals) from pages 11 to 18 of the appellate order which need not to be reiterated. After considering the entire facts and the judgments relied upon by the appellant, the CIT(Appeals) held that the assessee is entitled to deduction u/s.80IB(10) after observing and holding as under:- 4.9 In view of the above discussion and decisions in the cases like Brahma Associates, Saroj Sales Organisation and others which are squarely applicable to the case of the appellant, the project where commercial space has been constructed by M/s. Thakkar Enterprises is not a part of the project of the appellant and hence, I am convinced that, the appellant has fulfilled the conditions laid down by Sec 80IB(10) of the Act. The decisions rendered in the cases of Brahma Associates and Saroj Sales Organisation are binding on me in view of the decisions of Mumbai High Court in the case of Bank of Baroda Vs. H.C. Srivastava (256 ITR 385) and the decisions of the Hon'ble Madhya Pradesh High Court in the cases of Govindram Seksaria Charity Trust Vs. ITO (168 ItR 387) and Agarwal warehousing and Leasing Ltd. (257 ITR 235/240 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en if the housing project contains development of commercial area or unit, then also the appellant is entitled for exemption u/s 80IB(10) and secondly, the amendment which has come from 01.04.2005 will not be applicable in the case of the appellant, since the project had commenced much before that, which is evident from the Commencement Certificate dated 29.07.2003. Lastly, the Hon'ble Bombay High Court in the case of CIT vs. Brahma Associates reported in (2011) 333 ITR 289 has categorically held that the housing project approved by the local authority which also contains partly commercial user also has been held to be eligible for deduction u/s.80IB(10). 7. We have carefully considered the orders of the CIT(Appeals) and the Assessing Officer and also the rival contentions of the parties. The undisputed fact is that the assessee was allotted a plot of land admeasuring 7770 sq. mtrs from CIDCO Ltd. to develop a residential and commercial complex, out of which the component for commercial complex was 10% of the allotted land. The assessee has sold the development rights of this commercial unit to M/s. Thakker Enterprises at a portion of plot admeasuring 777 sq. mtrs, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Organisation vs. ITO (supra) would be fully applicable in the case of the appellant, wherein it has been held that if both eligible and ineligible units are constructed under single sanction plan, then the independent units or blocks which are less than eligible criteria of 1000 sq. ft. (here in this case 1500 sq. ft.), then the other ineligible units/blocks cannot be included for the purpose of denying the statutory relief to which the assessee is entitled for. This is also supported by another decision of ITAT Mumbai Bench in the case of Vandana Properties vs. ACIT reported in (2010) 128 TTJ (Mum) 89, wherein it was held that the concept of housing project does not mean that there should be a group of building and only then the same would be called as housing project and if the project contains independent building, then each unit in the said building has to be taken independently. Thus following the ratio of above decisions, we hold that the residential unit as has been developed by the assessee is less than 1500 sq.mtr, as it will not include the area embedded for commercial unit in the whole of the project. 7.2 As regards, whether the housing project which has been app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought u/s.80IB(10)(d) from 01.04.2005 will not be applicable and the judgment of Hon'ble High Court in the aforesaid case would become squarely applicable. 7.4 Further the applicability of amendment w.e.f 01.04.2005 on the projects which had commenced prior to the date of amendment has been dealt by the ITAT Mumbai Bench in several decisions viz : i) Saroj Sales Organisation vs. ITO reported in (2008) 115 TTJ 485, wherein it has been held as under :- As regards the objection of the AO that the permissible shopping area of housing project exceeds 5 per cent, the assessee is not entitled for relief under s.80IB(10). We are of the view that the housing project were approved before 31st March, 2005 and for such project which were so approved, there was no stipulation as to the shopping complex area is permissible in the project. As already stated earlier that the amendments were subsequently made while extending the deduction of income from housing project approved upto 31st March, 2007, the denial of deduction, in our view, is clearly not in accordance with law. ii) Hiranandani Akruti JV vs. DCIT reported in (2010) 39 SOT 498 (Mumbai), wherein it has been held as un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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