TMI Blog2011 (4) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... is claimed alone should be seen though commercial area is built in the same sanctioned layout but in a different project. On verification, if commercial area is found to exist in the project Vidhi Complex AO will also verify if such area is within the permitted limits as laid down in Sec.80-IB(10).AO is accordingly to directed to verify the facts in this regard and while considering the claim for deduction u/s.80-IB(10) Total area of the plot on which the project was constructed - Condition for allowing deduction u/s.80-IB(10) of the Act is that the project is on the size of a plot of land which has a minimum area of one acre - whether the area given for the purpose of forming DP road has to be excluded or included for the purpose of calculating the size of the plot on which the housing project has been constructed? - CIT(A) held plot is less than one acre, Also, project is not sanctioned by KDMC, thus not eligible for deduction - HELD THAT:- We find that in the case of UMIYA ENTERPRISES VERSUS INCOME TAX OFFICER-WARD-3 (3) , KALYAN (W) [ 2010 (2) TMI 1187 - ITAT MUMBAI] has considered this issue, wherein it was held that there is no condition in the clause (b) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction u/s. 80 IB(10) was to be granted, it is submitted that the disallowance of ₹ 19,58,399/- u/s. 40(a)(ia) of the Income Tax Act, 1961 was not called for. 1.5 without prejudice to the above, it is submitted that assuming but not admitting that disallowance with respect to the commercial shops was called for, it is submitted that in the facts and circumstances of the case, and in law, only the proportionate profit attributable to the commercial shop was required to be excluded from the deduction. 2. The assessee is a partnership firm engaged in the business of Civil Construction. The assessee had under taken construction of building projects at Village Gouripada, Taluka Kalyan on Plot Bearing Survey No.22 23 H No.1(PT). On this land the assessee constructed two projects namely Amurt Dham comprising Building No. 9 10 and Vidhi Complex Comprising Building No.11 to 14. In respect of the project Amurt Dham for which the assessee did not claim deduction under section 80 IB(10) of the Income Tax Act 1961 (the Act), the work-in-progress was ₹ 69,25,000/-. For the Project Vidhi Complex for which the assessee claimed deduction under section 80 IB(10) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place; ( d ) the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less. 3. One of the condition to be fulfilled by the Assessee for claiming deduction u/s.80-IB(10) of the Act is that under clause (d) of Sec.80-IB(10) of the Act, the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less. The objection of the AO was that in the Project Vidhi Complex there was commercial area and since it was not a building project in the sense consisting of only buildings for residential purposes, the deduction under section 80IB(10) was not to be allowed. On this objection it is seen fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Hon ble Mumbai Bench of the Tribunal in the case of ITAT Mumbai in the case of Saroj Sales Organization Vs. ITO 115 TTJ 485 (mum) supports the view that the existence of commercial area for the project for which deduction u/s.80-IB(10) of the Act is claimed alone should be seen though commercial area is built in the same sanctioned layout but in a different project. On verification, if commercial area is found to exist in the project Vidhi Complext, the AO will also verify if such area is within the permitted limits as laid down in Sec.80-IB(10) of the Act. The AO is accordingly to directed to verify the facts in this regard and while considering the claim for deduction u/s.80-IB(10) of the Act. 5. The next issue is with regard to the total area of the plot on which the project was constructed. One of the condition for allowing deduction u/s.80-IB(10) of the Act is that the project is on the size of a plot of land which has a minimum area of one acre. According to the AO the plot area after reducing the area consumed for D.P.Road was only 3461.68 sq. meters which was less than one Acre. According to the assessee the plot area is 4746.26 sq.mtrs including the ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of calculating the size of the plot on which the housing project has been constructed. On this issue we find that the Hon ble Mumbai ITAT in the case of Umiya Enterprises vs. ITO in ITA No.2750/M/09 for A.Y 2004- 05 has considered this issue. In that case the dispute was whether the area for road set back, recreation open space and internal road set back is to be excluded for the purpose of calculating the size of plot area on which the housing project is constructed. The Tribunal held as follows: So far as the precise point raised by the CIT(A) is concerned, it is seen from page 66, which is a copy of the communication dated 20.09.2003 sent by Kalyan-Dombivli Mahanagar Palika that it mentions the size of the plot as 4600 sq.metres only. The communication dated 29.6.2000 (page 63 of the paper book) also refers to the area of the plot as 4600 sq.metres. The assessee has also filed at page 68 of the paper book an annexure to the communication issued by the Kalyan-Dombivli Mahanagar Palika dated 20.09.2003, referred to earlier. This annexure is a map showing the details of the site plans, plan of the residential units to be built by the assessee etc. It also contain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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