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TMI Blog2014 (4) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... uction under the aforesaid section. 4. The learned Commissioner of Income-tax(Appeals) grossly erred in failing to appreciate that the size of the plot on which the assessee built its project is 3952 sq. mtrs. which is less than one acre, and thus the condition in (b) of section 80-IB(10) is not satisfied. 5. The learned Commissioner of Income-tax(Appeals) grossly erred in failing to appreciate that in the CBDT's Circular No.5/2005 dated 15.07.2005 it has been categorically clarified that "the area limit of the plot has to be construed with reference to the area of the site in which the housing project is constructed" which clearly means that the actual area on which construction is made has to be taken into consideration. 6. The learned Commissioner of Income-tax(Appeals) grossly erred in failing to appreciate that the commercial establishment in the assessee's housing project exceeded 5% of the aggregate built-up area and thus the assessee had violated the condition stipulated in clause (d) of section 80-IB(10). 7. The learned Commissioner of Income-tax(Appeals) grossly erred in holding that the condition laid down in clause (d) would apply only to projects ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter was carried before first appellate authority, wherein the various contentions were raised on behalf of assessee and agreeing to the contentions raised on behalf of assessee, the CIT(A) allowed the claim of assessee. The same has been opposed before us on behalf of revenue for the reasons stated in its grounds of appeal. On the other hand, the learned Authorized Representative has supported the order of CIT(A) on all accounts. 4. After going through the rival submissions and material on record with regard to the size of plot, we find that the CIT(A) observed from the commencement certificate and building plan approved by PMC on 03.02.2005 that the size of plot acquired by assessee vide development agreement dated 23.10.2003 was of size of 43.5 R. As per building plan, the size of plot is 4134.00 sq.mtrs. out of which, 182.99 sq.mtrs. was acquired for road widening by PMC making plot size 3952 sq.mtrs. However, as per CBDT circular No.5/2005, the area earmarked for road and common amenities must conform to the project approved by the local authority. Relying on this, ITAT Pune & Mumbai benches have taken a view that simple and plain reading of section 80IB(10) should mean tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed if the assessee would not have made 15% amenity space available to the corporation. Though amenity space was stated to be surrendered to the corporation but such sacrifice of the builder was duly recognized and compensated by granting additional FSI for the said project. If we accept the proposition of the Revenue Department that the area which was directly under the building construction should only be held as the project for construction, then a builder has to acquire a land more than 1 acre of land. Then only after the set apart of the amenity space he could be left with the balance 1 acre for project development. But such proposition was not intended in the legislature. The language of the section did not prescribe such hypothecation. Therefore, an another reasoning of our rejection of such a proposition of the Revenue Department is that it would be illogical to expect from a builder to have excess land area than 1 acre: at least 15% excessive area applicable for Pune Corporation, so that after setting apart 15% area the balance should remain 1 Acre for the purpose of construction. This suggestion of approach of interpretation of a statute is not idealistic because we cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan in 2007 in which two builders were covering 2398.16 sq. mtrs. of out of total built up area (comprising of 52 residential tenements and 16 commercial establishments) and one building covering 933.62 sq. mtrs. (19 residential tenements), accordingly, the assessee has violated the terms of approval of housing project. Against the sanctioned plan of total building, built up area 3358.62 sq. mtrs. in 2005, the assessee has completed construction of two buildings of total built up area of 2398.16 sq. mtrs. only which is equal to just 71.40% of total built up area as per initially approved housing project. 6.2 The matter was carried before first appellate authority, wherein the various contentions were raised on behalf of assessee and it was found that the Assessing Officer has taken objection to the fact that there was violation in the built up area as per initial sanction dated 03.02.2005 (3358.62 sq.mtrs.) and subsequent sanction dated 01.10.2007 (2398.16 sq.mtrs.) of the Pune Municipal Corporation. This objection of assessee was not justified since any builder is entitled to get plans revised from PMC depending on financial capacity, convenience and as per business need. While b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reasoned finding of CIT(A) on the issue of commercial limit needs no interference from our side. We uphold the same. 8. The next issue is with regard to non-completion of housing project. The Assessing Officer stated that the assessee has commenced the construction of third building in the year 2010- 11 and it clearly shows that the assessee has not completed the housing project within prescribed four years from the date of first approval of housing project. The Assessing Officer observed that if at all the assessee wanted he could have completed the total housing project except the so called 189 sq. mtrs. of land under road widening. The action of assessee proves that he had partially completed the construction of building and carried out on the same till 2010-11 by which, it is proved beyond doubt that he had not completed housing project within the prescribed period of four years. 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) granted relief to the assessee on this account as well. The same has been opposed before us on behalf of revenue. On the other hand, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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