TMI Blog2010 (5) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned issue is covered by the decision dated 16th April, 2010 of the Tribunal in the case of ACIT v. Smt. Saroj Kapoor (ITA No. 194/Ind/2008 and CO No.51/Ind/2008). This factual matrix was not controverted by the revenue. 3. On perusal of record and after hearing the assertions/admissions/submissions of rival parties, we are reproducing hereunder the relevant portion from the aforesaid order: This appeal filed by the Revenue and cross objection filed by the assessee arise out of order of the Ld. CIT(A)-I, Bhopal, dated 18.01.2008, for the assessment year 2004-05. 2. We have heard both the parties and have also perused the material available on record. 3. First, we shall take up the Revenue s appeal wherein the Revenue is aggrieved by the decision of the Ld. CIT(A) in allowing deduction to the assessee u/s 80IB(10) on pro-rata basis. This is the only issue involved, though the Revenue has taken five grounds. 4. The facts, in brief, are that the assessee is engaged in the business of developing and construction of Housing Projects and claimed deduction u/s 80IB(10) amounting to ₹ 1,52,67,762/-. The A.O. found that in the year under consideration, the assessee de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 400 sq. ft. area was excluded then also the remaining part was more than the limit prescribed u/s 80-IB. Accordingly, the A.O. rejected the claim of the assessee for deduction u/s 80-IB(10) of the Act. Aggrieved by this, the assessee carried the matter into appeal before the ld. CIT(A), wherein it was contended that the assessee had complied with all the three conditions as laid down u/s 80IB(10). The assessee also gave the details of the types of flats constructed by the assessee. In this regard, the assessee submitted that in first phase, the residential flats were constructed admeasuring 929.46 sq. ft., 1082.35 sq. ft. of which no measurements were done by the Department. In the second phase, 9, A-1 Type and 13 A-II type Duplex Houses were constructed and the measurement of Duplex Houses was found less than 1500 Sq. ft. by the approved Valuation Officer. It was also submitted that in the third phase, Duplex Houses and EWS Flats were constructed and the area of such Duplex Residential was 1254.22 sq. ft. and EWS Flats was 217 Sq. ft. It was also submitted that physical measurement of houses constructed in third phase was also not done by the Department. The assessee also submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Bhoomi Vikas Rules, 1984, as per the certificate of the engineer submitted by the appellant is less than 1,500 sq. ft. I, therefore, of the considered view that it will be fair enough to tax the profit of 3 duplexs of Type AI AII of phase/part 2 which were measured by the Department and found exceeding 1,500 sq. ft. As per the profit and loss account submitted by the appellant, it is seen that the total sale consideration of duplexes and flats is ₹ 6,73,38,296/- and sale of 3 duplex type A-I A-II is for ₹ 39,18,920/-. The pro-rata rate of profit on these three Duplexes @ 22.67 % comes to ₹ 8,88,420/-. But, however, it is seen that the A.O. has disallowed the entire claim, instead of disallowance on pro rata basis, which in my opinion is not proper. Thus, the disallowance is restricted to ₹ 8,88,420/- only and as such the appellant gets a relief of ₹ 1,43,79,342/- i.e. (Rs. 1,52,67,762/- minus ₹ 8,88,420/-) and the appeal is partly allowed. 6. The ld. CIT DR contended that whatever flats were measured on sample basis were found having built up area of more than 1500 sq.ft. Hence, other flats were also to be considered of having bui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the Ld. CIT(A) was correct in giving pro rata Deduction. 8. As regards to question no. 1, he submitted that this issue came up for consideration before the Tribunal in the case of Air Developers as reported in 14 ITJ 206 (Nagpur), wherein the Tribunal held that the definition of built up area as prescribed in section 80IB(14)(a) could not be said to be retrospective. The Learned counsel for the assessee further contended that in the case of Brahma Associates, Special Bench of the Tribunal had also held that the provisions specifying maximum commercial area limits were also of prospective nature. In this regard, the Learned counsel further referred to notes to clauses as well as C.B.D.T. circular wherein it had been clarified that definition of built up area had to be applied with effect from assessment year 2005-06. It was also contended that such definition was in the nature of substantive provisions, hence, it could not be considered clarificatory and retrospective. For this proposition, the Learned counsel relied on the decision of the Hon'ble Supreme Court in the case of Govind Das as reported in 103 ITR 123. Thereafter, the Learned counsel submitted that the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also by the decision of the Calcutta Bench of the Tribunal in the case of ACIT vs. Bengal Ambuja Housing Development Limited, which had also been confirmed by the Hon'ble Calcutta High Court. The Learned counsel also drew our attention to the relevant portion of the judicial decisions relied by him. 9. The Learned counsel for the assessee drew our attention to the fact that the A.O. had also appointed a technical expert , namely, Shri Amogh Kumar Gupta, who vide its report Dated 2.12.2008 had also stated that flats constructed by the assessee were having built up area of less than 1500 sq.ft. However, the A.O. completely ignored this report. The Learned counsel also submitted that even as per the A.O., all the flats were not having the same built up area, because even as per the version of A.O. in the assessment order at page 6 were that house no. A/6, was quite bigger than this category of other houses in the project. 10. The ld. CIT DR, in the rejoinder, mainly reiterated the submissions made earlier and further submitted that the object of State Government Rules/ By Laws were different from the object of provisions of section 80IB(10), hence, said rules could not be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer is not justified, because before making addition or rejecting a genuine claim of the assessee, it is the bounden duty of the A.O. to deal with the objections of the assessee. We are further unable to understand why the A.O. did not do the reverification exercise to find out the correct measurement. We also find that as per the ld. CIT DR, the sale consideration is different with reference to different flats and, therefore, there must be different sizes. In our opinion, this fact rather supports the claim of the assessee, because this again goes to show that sample taken by the Department is not the representative one. Thus, on the basis of above facts itself, the action of the A.O. is not correct in law. 13. Having stated so, now we shall deal with other aspects. On the aspect of nature of provisions of section 80IB(14)(a),we find that it is a settled proposition of law that when a particular term is defined by an amendment, which results into increase/levy of civil liability, the same has to be considered as the substantive one, hence prospective. The judicial decisions cited by the assessee also support this view. Accordingly, we reject the contention of the revenue that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the submissions made by both the sides, material on record and the orders of the authorities below. 19. It is noted that the Ld. CIT(A) has observed in the findings reproduced hereinbefore that the measurement of Duplex flat Type A/1 and Type A/2 as per the Bhoomi Vikas Rules, 1984, was less than 1500 sq.ft. and the assessee has complied with all other conditions and, inspite of that the Ld. CIT(A) has granted only pro-rata deduction. We further find that the Ld. CIT(A) has not given any specific findings on the legal contentions raised by the assessee, which results into an inference that the Ld. CIT(A) has not accepted the plea of assessee regarding applicability of local rates to compute built up area. However, since we have accepted the legal contentions raised by the assessee in this regard, hence, we find no reason not to grant a deduction thereon u/s 80IB(10). Accordingly, we accept this ground of the cross objection filed by the assessee and direct the A.O. to grant deduction u/s 80IB as claimed by the assessee. 20. In the result, the cross objection stands allowed. 21. To sum up, the Revenue s appeal is dismissed and cross objection is allowed. This order ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
