TMI Blog2017 (5) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... th the directions as given to the Assessing Officer in the earlier part of this paragraph. Since both the rival representatives agreed that the facts and circumstances for the assessment years 2011-12 and 2012-13 are identical, therefore, we further hold that our conclusion noted for the assessment years 2010-11 is applied to the assessment years 2011-12 and 2012-13 mutatis mutandis and the Assessing Officer is directed to make proportionate disallowance in respect of the units allotted and sold during this period keeping in view the amendments in section 80-IB(10) of the Act which are applicable with effect from April 1, 2010. - Decided partly in favour of assessee. - I. T. A. Nos. 154/RPR/2013, 43 and 44/RPR/2016 - - - Dated:- 17-1-2017 - Shamim Yahya (Accountant Member) And Chandra Mohan Garg (Judicial Member) For the Department : Sheetal Verma For the Assessee : M. C. Jain ORDER C. M. Garg (Judicial Member) 1. These three-cross appeals by the Revenue and assessee have been filed against the order of the Commissioner of Income-tax (Appeals), Raipur dated August 5, 2013 in first appeal No. 12/2013-14 for the assessment years 2010-11 to 2012-13. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s project. The learned Departmental representative contended that on verification of the claim, it was initially found that the appellant did not fulfil the conditions stipulated at sub-clauses (c), (e) and (d) to sub-section (10) of section 80-IB. The built-up area of each residential unit is 1272 square feet or 1463 square feet, but the built-up area of two penthouses is 7422.30 square feet i.e. 3711.15 square feet per penthouse. The owner of Flat No. IB and Penthouse No. 7-D of block-1 were summoned under section 131 and his statement was recorded, wherein the said person had stated that the built-up area of flat 1/B mentioned in the sale deed is 1463 sq. ft. after excluding the projections and balconies available for his independent use and after considering the space of balconies and projections, the built-up area of the flat was approximately 1600 square feet and the penthouse had additional open space admeasuring 1400 square feet for his independent use. Thus, the built-up area of the penthouse was about 3000 square feet. Therefore, the stipulation made in section 80-IB(10)(c), according to the Assessing Officer was not fulfilled. In respect of clause (e) of section 80-IB(10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative submitted that as per various decisions of the hon'ble High Courts and the Tribunal including the decision of the hon'ble Madras High Court in the case of CIT v. Arun Excello Foundations Pvt. Ltd. [2013] 1 ITR-OL 82 (Mad) dated October 18, 2012 passed in T. C. (A) Nos. 1348 and 1349 of 2007 paragraph 41 wherein it has been held that in all fairness, the claim of the assessee with regard to proportionate relief has to be read into the provisions so that deduction provisions are sustained and denial of the entire claim on the basis of some units which are not complying with the conditions is not justified. The learned authorised representative submitted that as per the decision of the hon'ble Income-tax Appellate Tribunal Bangalore C Bench in the case of Deputy CIT v. Mandavi Builders (I. T. A. Nos. 1734 and 1735/Bang/2013 order dated February 20, 2015), the provisions of section 80- IB(10)(e) and (f) of the Act are not applicable to the allotment and transactions which was held on or before March 31, 2010. The learned authorised representative also placed reliance on the decision of the Special Bench of the Income-tax Appellate Tribunal in the case of Brahm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the hon'ble Madras High Court in the case of CIT v. Arun Excello Foundations Pvt. Ltd. (supra) wherein it has been held as under (page 102 of 1 ITR-OL) : It is seen from the order of the Tribunal that the assessee made an alternative submission that to the extent of compliance with the built- up area under the residential unit, pro rata relief be given to the assessee. As far as this relief is concerned, in similar circumstances, in the decision reported in H. P. Tourism Development Corporation v. Union of India [1999] 238 ITR 38 (HP), the Himachal Pradesh High Court considered the possibility of granting the proportionate relief on pro rata basis to the extent of compliance with the provisions. It is no doubt true that the section does not provide any such working. Yet, this being a deduction provision and there being no such indication that the conditions have to be cumulatively satisfied in the context of the meaning of a 'housing project' to include residential- cum-commercial complex, we feel, in fairness to the claim of the assessee, the proportionate relief has to be read into the provisions, so that deduction provisions are sustained. 11. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the deduction under section 80-IB(10) of the Act and brought it to tax. 3. Aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) who confirmed the order of the Assessing Officer with regard to non-compliance with the provisions but directed the Assessing Officer to grant deduction proportionate to the compliance with the provisions to the assessee. Seeking the claim of 100 per cent. deduction under section 80-IB(10), the assessee is in appeal before us, while against the direction of the Commissioner of Income-tax (Appeals) to make proportionate disallowance, the Revenue is in appeal before us. 4. The learned counsel for the assessee, Shri Narendra Sharma, while reiterating the contentions made by the assessee before the authorities below, has drawn our attention to the table drawn at pages 5 to 7 of the assessment order to demonstrate that the flats were booked during the financial years 2007-08 and 2008-09 and that flat Nos. 901 and 902 in Block A, 801 and 804 in Block B, 603 and 604 in Block C, were combined before the execution of the sale deeds, but flat Nos. 904 and 905, 804 and 805 in Block A, were separate residential units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. Asst. CIT (I. T. A. Nos. 136 and 137/Bang/2009 dated November 13, 2009) to the effect that the assessee would be eligible for proportionate deduction under section 80-IB(10) of the Act. 5. The learned Departmental representative, Dr. K. Shankar Prasad, on the other hand, supported the orders of the Assessing Officer and submitted that the deduction is for the project and not for individual units of the project and where there is violation even in respect of one unit of the project, the assessee is not eligible for any deduction under section 80-IB(10) of the Act. Further he also brought to our notice that in two of the transactions which were executed by the assessee after insertion of clauses (e) and (f) to section 80-IB(10) of the Act, to demonstrate that the assessee has clearly violated the provisions and is not entitled to any deduction at all under section 80- IB(10) of the Act. As regards the proportionate disallowance granted by the Commissioner of Income-tax (Appeals), he reiterated his submission as above. 6. Having regard to the rival contentions and the material on record, we find that the assessee has sold as many as 14 flats in A, B and C blocks of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee prior to the introduction or insertion of clauses (e) and (f) to section 80-IB(10) of the Act. Further, the hon'ble Karnataka High Court has also held that these clauses are prospective in nature and therefore can be applied only for the transactions entered into after April 1, 2010. Therefore, we are of the opinion that the provisions of section 80-IB(10)(e) and (f) are not applicable to all the above trans actions of the assessee but are applicable to the allotment and bookings done after April 1, 2010. 7. As regards the assessee's claim that it is entitled to 100 per cent. deduction under section 80-IB(10), we find that the issue is now settled by the decision of the Special Bench of the Tribunal in the case of Brahma Associates v. Joint CIT reported in [2009] 315 ITR (AT) 268 (Pune) [SB] ; [2009] 119 ITD 255 (Pune) [SB] wherein it has been held that the assessee shall be eligible for deduction under section 80- IB(10) insofar as there is compliance with the conditions of section 80-IB(10) of the Act. Therefore, we confirm the finding of the Commissioner of Income-tax (Appeals) that proportionate disallowance is to be made in respect of the transactions which hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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