TMI Blog2014 (4) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... l FSI in lieu of road widening was not received from PMC. The assessee could not plan the work for C building since engineers and architects could not design the structure of building in the absence of FSI. The details of follow up done by assessee with PMC have been duly appreciated by CIT(A). The legislative intent read that the clear provisions of the requisite section, do not permit any proportionate deduction u/s. 80IB(10) of Act. However, in view of the decision in Ramsukh Properties (2012 (12) TMI 360 - ITAT PUNE ) as discussed above, the CIT(A) rightly allowed the proportionate deduction in respect of project completed during the impugned assessment year. The provisions of taxing statute should be construed harmoniously with the object of statute to effectuate the legislative intention. Under the circumstances, proportionate deduction u/s.80IB(10) of the Act is justified. - Decided in favour of assessee - ITA No.330/PN/2013 - - - Dated:- 28-4-2014 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER For the Appellant : Shri P.L.Pathade For the Respondent : Shri Pramod Shingte ORDER PER SHAILENDRA KUMAR YADAV, J.M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject ought to have been completed within the prescribed period of four years and the assessee had failed to do so, which is violative of the condition laid down in sub-clause (b) of the first Explanation to section 80-IB(10). 9. The learned Commissioner of Income-tax(Appeals) grossly erred in failing to appreciate that section 80- IB(10) nowhere envisages allowance of deduction there under on a proportionate basis and, on the contrary, stipulates that deduction would be admissible only on completion of the entire housing project, which is evident from clause (ii) of the 1st Explanation to section 80-IB(10). 10. The learned Commissioner of Income-tax (Appeals) grossly erred in allowing proportionate deduction even after observing that the legislative intent read with the clear provisions of the requisite sections do not permit any proportionate reduction u/s.80-IB(10). 11. The learned Commissioner of Income-tax (Appeals) grossly erred in following the decision of the Hon'ble ITAT, Pune Bench, in the case of Ramsukh Properties Vs. DCIT Cir.2, Pune (ITA No.84/PN/2011 vide order dated 25.07.2012) even after noting that in the case of Brahma Associates the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: As per the Revenue authorities, both AO and Ld. CIT (A), since the net area available for the purpose of construction was less than 1 acre therefore the assessee was not entitled to claim of deduction u/s 80IB(10). However we are not in agreement with such an approach of the Revenue authorities. To give strength to our reasons for such disagreements, we hereby refer one of the point as explained in the CBDT circular cited in 276 ITR 170 (statute), wherein the guidelines issued were as follows:- Extension of time limit for obtaining approval of housing projects the purpose of tax holiday under section 80IB(10), and allowing deduction for re-development or reconstruction of existing building in slum areas This section does not specifically provide area limit for the garden, the development plan roads, internal means of access etc., in the housing project. Therefore, the same should conform to the project plan approved by the local authority in accordance with the regulations in force. Also the area limit of the plot has to be construed with reference to the area of the sit in which the housing project is construed and not with reference to the demarcation of land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plain and ordinary meaning. This is what we have gathered from the books available on this subject with an attempt to subscribe a simple and realistic meaning to the clause (b) to section 80IB(10) of the I. T. Act. Nothing more can be added hence we have to restrict the interpretation that the area of 1 acre should be available for the housing project inclusive of amenities required to be set apart as per the norms of a corporation. Therefore, a justifiable conclusion is that when there is no doubt, more so it is not in dispute that a portion of the land, in the present case it is 15%, to be earmarked or set-apart or reserved or segregated out of the total land in question, minimum 1 acre, meant for the purpose of project in terms of rules / regulation of a local body i.e., Pune Municipal Corporation, and without that segregation the project could not I sanctioned then that portion being mandatory for amenity purpose has to be taken as a part and parcel of the land available for the project. In the present case since the area available for the project was 4600 sq.mtr. that is more than 1 acre (4046 sq.mtr.) therefore, the appellant is entitled for the claim of deduction u/s 80IB(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be implemented in order to be eligible for claim u/s.80IB(10). The only rider in section 80IB(10) is that no matter how many revised plans were sanctioned by local authority, the date of approval (vis- -vis date of completion) would be deemed to be the date of initial approval. This issue has been discussed by Assessing Officer regarding non completion of building in the project in succeeding para. So, the same will be discussed in following para. 7. The next objection of Assessing Officer is that the assessee has exceeded the limits of commercial establishments beyond permissible limit. The Assessing Officer observed that as per sanctioned plan by PMC dated 03.02.2005, commercial establishment in housing project is 210.92 sq. mtrs. which is more than 3% of aggregate built up area as permitted u/s.80IB(10). The matter was carried before first appellate authority, wherein the various contentions were raised on behalf of assessee and having considered the same, the CIT(A) observed that Hon ble Bombay High Court in the case of CIT Vs. Brahma Associates (2011) 333 ITR 289 (Bom), wherein, it has been held that up to 31.03.2005 (subject to fulfilling of other conditions) deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction u/s.80IB(10) in the case of Ramsukh Properties Vs. DCIT, Circle 1, Pune in ITA No.84/PN/2011 vide its order dated 25.07.2012. For the convenience, the relevant portion of the order reads as under: We agree to proposition put forward by Ld. Departmental Representative that plain reading of section 80IB(10) of the Act suggests about only completion of construction and no adjective should be used along with the word completion. This strict interpretation should be given in normal circumstances. However, in case before us, assessee was prevented by reasonable cause to complete construction in time due to intervention of CID action on account of violation of provisions of Urban Land Ceiling Act applicable to land in question. Assessee was incapacitated to complete the same in time due to reasons beyond his control. Assessee should not suffer for same. The revision of plan is vested right of assessee which cannot be taken away by strict provisions of statute. The taxing statute granting incentives for promotion of growth and development should be construed liberally and that provision for promoting economic growth has to be interpreted liberally. At the same time, restricti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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