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The Dy. Commissioner of Income Tax, Circle 1 (1) , Pune Versus Amit Enterprises Housing Ltd.

2016 (6) TMI 122 - ITAT PUNE

Claim of deduction under section 80IB(10) - Held that:- The issue arising before us is identical to the issue before the Tribunal in assessee’s own case in assessment year 2008-09, where the deduction claimed under section 80IB(10) of the Act was denied to the assessee on account of area of flats in building F including balcony exceeding 1500 sq.ft. and further in respect of 4 flats adjacent were merged and the area exceeded 1500 sq.ft. and also because of commercial shops / establishments in bu .....

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he same under Rule 46A of the Rules, the CIT(A) held the assessee to be eligible to claim the deduction under section 80IB(10) of the Act. Similar claim has been made by the assessee in the instant assessment year relating to assessment year 2009-10 and where the factual aspects and issue raised are identical to the issue in assessment year 2008-09, following the same parity of reasoning and also because of reason that the CIT(A) in allowing the claim of deduction, had in turn relied on the orde .....

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CHOWLA, JM: This appeal filed by the Revenue is against the order of CIT(A)-I, Pune, dated 29.11.2013 relating to assessment year 2009-10 against order passed under section 143(3) of the Income-tax Act, 1961 (in short the Act ). 2. The Revenue has raised the following grounds of appeal:- 1. The order of the learned Commissioner of Income-tax (Appeals) is contrary to law and to the facts and circumstances of the case. 2. The learned Com missioner of Income-tax(Appeals) erred in not appreciating t .....

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stoppel can be invoked against the Government in exercise of its legislative powers. 5. The learned Com missioner of Income-tax(Appeals) erred in holding that though the am ended provision of section 80IB (10)(d) and 80IB (14)(a) cam e into operation w.e.f. 01.04.2005, those were not applicable in the case of assessee relating to A .Y.2005 -06 without appreciating and applying the principle laid down by Hon'ble Supreme Court in the case of CIT Vs. Isthmian S team ship Line, 20 ITR 52 and Kar .....

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set pointed out that the issue raised in the present appeal is covered by the order of Tribunal in assessee s own case relating to assessment year 2008-09. He further pointed out that in the preceding year, the assessee was a partnership concern and during the year under consideration, the said firm had been converted into a limited company. The learned Authorized Representative for the assessee further referred to the orders of CIT(A) at page 40, wherein he had referred to the issue being ident .....

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exceeded 1500 sq.ft. and again deduction was not claimed by the assessee under section 80IB(10) of the Act. However, the Assessing Officer denied entire claim of deduction under section 80IB(10) of the Act in view of the amendments to the said section. The CIT(A) on the other hand, allowed deduction on all accounts except on which items which were not claimed in the return of income. Our attention was drawn to the order of Tribunal in this regard relating to assessment year 2008-09, wherein addi .....

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ommercial area and hence, the assessee was not entitled to the claim of deduction under section 80IB(10) of the Act. 5. We have heard the rival contentions and perused the record. The assessee was engaged in the business of developing and construction of residential projects. For the year under consideration, the assessee had declared total income at ₹ 2,42,19,620/-. The assessee had claimed deduction under section 80IB(10) of the Act at ₹ 4,83,83,848/- in respect of the project name .....

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ildings J & K were commercial buildings / shops. The Assessing Officer also noted that in buildings A to H, part of building D and entire building F had non-80IB(10) residential units with built up area of each unit to be more than 1500 sq.ft. The total residential built up area was 4,35,295/-, out of which the total built up area in respect of building F and part of building D, which had flats exceeding 1500 sq.ft., was 51,302 sq.ft. The rest of area where built up area of each flat was les .....

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ionate deduction on profits attributable to residential flats having built up area of less than 1500 sq.ft. Further, the assessee had not claimed any deduction on the profits attributable to commercial part of project. In view of all this, the Assessing Officer observed that the deduction claimed by the assessee under section 80IB(10) of the Act was in respect of the project which was residential and commercial project and had flats, where built up area was in excess of 1500 sq.ft. In view there .....

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t for the condition relating to maximum built up area as per clause (c) of section 80IB(10) of the Act in respect of part of building D and building F. The assessee further contended that on this ground alone, the deduction under section 80IB(10) of the Act in respect of eligible units could not be denied. Without prejudice basis, the assessee claimed that the proportionate deduction under section 80IB(10) of the Act in respect of eligible residential units and deduction of ₹ 1,71,831/- on .....

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ed as housing project in the first place and further since the conditions laid down in the said section were not satisfied, the deduction claimed under section 80IB(10) of the Act was held to be not available for the project. The claim of assessee for proportionate deduction in respect of eligible units was also denied by the Assessing Officer on the ground that the said deduction was admissible to the housing project as a whole and not for portion thereof. The Assessing Officer in this regard, .....

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as not justified in disallowing the claim made by the assessee. It was claimed by the assessee that the buildings F, J, K and 4 flats of building D were not part of eligible housing projects and even if they were part of eligible housing projects, the deduction was still allowable on the profits including the said buildings and 4 flats of building D. Various propositions in this regard were raised by the assessee before the CIT(A), which are incorporated at pages 14 to 19 of the Paper Book. The .....

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n the housing project, the assessee claimed that since the project was sanctioned prior to amendment brought in by section 80IB(10)(d) of the Act, the assessee was entitled to the claim of deduction under section 80IB(10) of the Act. The CIT(A) referred to the decision of his predecessor relating to assessment year 2008-09, wherein the issue was examined in detail and it was held that there was no violation of conditions by the assessee as the project of the assessee was approved by local author .....

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1962 (in short the Rules ) , fresh evidence filed, was admitted for adjudication and the CIT(A) while deciding the present appeal relating to assessment year 2009-10, similarly admitted additional evidence for adjudication for the year under consideration also and noted that there was no change either in the factual aspects of the matter, except the quantum of deduction claimed and the status of assessee or the relevant legal position for the assessment year for the year under consideration. He .....

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urvive, in view of the assessee succeeding on the main aspects of the issue. 7. The Revenue is in appeal against the order of CIT(A) in this regard and has raised objections that where the project was approved as a residential and commercial project and not as housing project, the assessee was not entitled to the claim of deduction under section 80IB(10) of the Act. Further, grounds of appeal have been raised against non-fulfillment of amended provisions of section 80IB(10)(c) of the Act and 80I .....

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the CIT(A) and the order of CIT(A) in holding that the assessee was entitled to claim the deduction under section 80IB(10) of the Act in respect of building F, 4 flats in building D and commercial shops in buildings J & K. The Tribunal held as under:- 23. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee .....

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ential units having built up area less than 1500 sq.ft which is evident from the Form 10CCB filed along with the return of income wherein it has been mentioned that the housing project comprises of residential units having built up area of both more or less than 1500 sq.ft. In other words, the assessee has claimed proportionate deduction u/s.80IB(10). 24. We find the commencement certificate issued by PMC clearly shows that approval is residential + commercial and the occupancy/completion certif .....

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ditional ground that it is entitled to claim deduction u/s.80IB(10) in respect of building F as well as J and K and the 4 flats of building D. We find after considering the various submissions made by the assessee the Ld.CIT(A) allowed the claim of deduction u/s.80IB(10) in respect of the entire housing project. While doing so, he held that since the project has been approved on 17-12-2004 which is prior to 01-04-2005 , therefore, the areas covered by terraces and balconies are to be excluded fr .....

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y High Court in the case of Brahma Associates reported in 333 ITR 289 where it has been held that prior to the amendment there was no restriction in the area of commercial buildings and the said restriction is not applicable to the earlier years. Even though the assessment year involved in 2008-09 still the limit is not applicable because the project was sanctioned prior to the said amendment. 26. As regards the third objection of the AO that built up area of 4 flats after being combined exceede .....

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oject has been approved as a residential cum commercial project, therefore, the assessee is not entitled to deduction u/s.80IB(10) and the CIT(A) was not justified in allowing the claim. 28. We do not find any merit in the above argument of the revenue. It has been held by the Hon ble Bombay High Court in the case of CIT Vs. Pruthvi Brokers and Shareholders reported in 349 ITR 336 that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities but i .....

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ng the reason of a new plea in an appeal and each case must be considered on its own facts. Therefore, the first ground of the revenue that when the claim of deduction u/s.80Ib(10) was not made for the entire project in the return of income filed or in the course of assessment proceedings or in Form 10CCB filed before the AO, the CIT(A) erred in allowing the claim of deduction u/s.80IB(10) of the Act to the project is devoid of any merit and accordingly the same is dismissed. 29. Now coming to t .....

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the assessee would be entitled to the deduction u/s.80IB(10)and the conditions mentioned in clause (d) would not apply. Thus, the benefit restricted to cases where the area utilized for shops and commercial establishments does not exceed 5% of aggregate built up area of housing project or 2000 sq.ft which was less does not to apply to projects where approval of local authority was granted prior to 01-04-2005 even if project is completed thereafter. 30. Since in the instant case admittedly, the p .....

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terraces none of the flats of building F exceeded 1500 sq.ft. could not be controverted by the Ld. Departmental Representative. It is an admitted fact that the commencement certificate is dated 17-12-2004 which is prior to 01-04-2005. The Hon ble Bombay High Court had an occasion to decide the issue of built up area introduced by way of section 80IB(14)(a) w.e.f. 01-04-2005 in the case of Prime Properties (Supra) and held that the same is not applicable to housing projects approved prior to 01- .....

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nd in the circumstances of the case and in law, the order of the Tribunal passed without appreciating and evaluating all the relevant facts and evidences including circumstantial evidences, not perverse? 3. The Respondent Assessee is a builder who claimed deduction u/s.80IB(10) of the Act in respect of its Housing Project at Pune. The admitted position is that the subject project was sanctioned/approved prior to 1st April, 2005. The Parliament by Finance (No.2) Act, 2004 introduced sub-section 1 .....

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bi Associates) rendered on 24th April, 2015 in respect of section 80IB(14)(a) of the Act. Further, it is submitted that the ratio of decision of the Apex Court in CIT Vs. M/s. Sarkar Builders would also apply to the present case. 5. In view of the above, both substantial questions of laws are answered in the affirmative, i.e. in favour of the Respondent Assessee and against the Revenue. 32. Since in the instant case the built up area of all the units of building F are less than 1500 sq.ft. after .....

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and claimed the deduction in respect of the above 2 units on the ground that assessee has sold independent units to the respective customers which were less than 1500 sq.ft. It is the customers who have combined the flats and therefore the assessee is entitled to deduction u/s.80IB(10). We find the Ld.CIT(A) admitted the additional evidence and on the basis of the declaration of the customers held that it is the customers who have combined the units and the assessee has sold separate units to t .....

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: 3. So far as question (ii) is concerned, in the impugned order the Tribunal has recorded a finding of fact that two adjoining flats were approved by the local authority as separate units and completion certificate issued on that basis. Therefore, on the above finding of fact, the Tribunal held that the two flats cannot be treated as one unit to compute the built up area for the purposes of section 80IB(10) of the Income Tax Act, 1961. The decision of the Tribunal being based on finding of fact .....

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ho have combined the adjacent units for their own requirements, therefore, in view of the decision of the Hon ble Bombay High Court in the case cited supra and in absence of any contrary material brought to our notice, the assessee cannot be denied the benefit of deduction u/s.80IB(10) in respect of the 2 units of building D. In view of our above discussion, we are of the considered opinion that the order of the Ld.CIT(A) is in consonance with law. We accordingly uphold the same and the grounds .....

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