TMI Blog2013 (10) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... nstructed in the residential zone. Therefore, commercial user constructed Tulip project was within the norms of PCMC for housing project. Accordingly, issue raised in ground No.1 & 2 has rightly been decided in favour of assessee because clause (d) inserted in the provisions of section 80IB(10) restricting commercial area has prospective effect from 01-04- 2005. We uphold the same. Violation of clause (c) on the basis of report given by Ward Inspector - Held that:- Material as available on record reveals that three flats were separately sold to Mr. Oomer K. George through separate deeds. Three electricity connections were provided for respective flats and even municipal authorities recognizes three flats by assessing them separately for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2005-06 onwards as the same is violation of clause (d) of section 80IB(10) of the Act. 2. The Ld CIT(A), Pune grossly erred in accepting the assessee's plea that the decision of the Hon'ble Bombay High Court in the case of Bramha Associates (333 ITR 289), will be applicable for the A.Y. 2005-06 onwards also through the same is in violation of clause (d) of the section 80IB(10) of the Act. 3. The Ld CIT(A), Pune grossly erred in holding that there was no violation of the provisions of clause (c) of Sec.80IB(10) by the assessee without appreciating the fact that one of the three flats i.e. flat No.17 is situated on fourth floor and it has access from flats No. 13 14 which are situated on the third floor. This necessarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in violation of clause (d) of section 80IB(1). The Assessing Officer was of the view that prior to introduction of clause (d) w.e.f. 01-04-2005 there was no clause available to allow any commercial user in housing project eligible for deduction u/s. 80IB(10). Therefore, as per old provision the assessee was not eligible for deduction in Tulip Project. Alternatively, Assessing Officer conveys that clause (d) brought in the substitute section has to be accepted as clarifactory in nature. 3.2 As against this, CIT(A) was of the view that amendment brought in clause (d) was substantive provision which could have effect on project approved prior to A.Y. 2005-06. Hon'ble Bombay High Court in the case of Bhahma Associates and Others (2011) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial area has prospective effect from 01-04- 2005. We uphold the same. 4. The second issue related to the finding given by the Assessing Officer for violation of clause (c) on the basis of report given by Ward Inspector. The Ward Inspector after visiting the site on direction of Assessing Officer, informed him that flat No.13 14 of third floor and flat No.17 of fourth floor of Tulip project are combined and the total area of combined area is approximately 2500 sq.ft. In view of the above, the Assessing Officer observed that the assessee had violated the conditions prescribed in clause (c) of the section 80IB(10) of I.T. Act. Agreed to Assessing Officer three flats combined and combined area is in excess of 1500 sq. ft., it was fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore than one flat to one purchaser. 4.2 CIT(A) found that undisputedly three flats were sold to one person Mr. Oomer K. George, there was no provision at relevant point of time more than one flat. Therefore, no adverse inference could be drawn for the same. Assessing Officer tried to infer that the assessee has either facilitated or played a key role in joining the flats, therefore it resulted into violation of clause (c). Material as available on record reveals that three flats were separately sold to Mr. Oomer K. George through separate deeds. Three electricity connections were provided for respective flats and even municipal authorities recognizes three flats by assessing them separately for the purpose of municipal taxes. There is ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olation of the provisions of Clause (c) of Sec.80IB(10) by the assessee without appreciating the fact that one of the three flats i.e. flat No.17 is situated on fourth floor and it has access from flats No. 13 14 which are situated on the third floor. This necessarily required alteration in the basic RCC structure of the building which can be made by the builder (assessee) itself and not by the purchaser. 6. First issue is with regard to eligibility for deduction u/s. 80IB(10) of the I.T. Act on account of violation of clause (d) on account of commercial area in violation of provision. This issue has been discussed and decided by us in A.Y. 2006-07 vide para No.3 of this order. Facts being similar, so following same reasoning, we are n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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