TMI Blog2018 (8) TMI 1828X X X X Extracts X X X X X X X X Extracts X X X X ..... and the claim u/s. 80IB(10) has been made only on the flats which are measuring less than 1500 sq.ft. this fact is clearly discernable with the computation of income filing along with return of income wherein net profit as per P L a/c. on flat sale amounting to ₹ 2,68,88,714/- has been shown and amount of ₹ 2,65,52,967/- has been claimed as deduction u/s. 80IB(10) of the Act. Thus, in view of decision of case of Vishwas Promoters [ 2012 (11) TMI 1117 - MADRAS HIGH COURT] claim of the assessee, on the flats which fulfill the conditions laid down provision of u/s. 80IB(10) of the Act is allowable and the CIT(A) was right in allowing the same. Entire housing project has to be treated as single unit - As in the case of Vishwas Promoters (supra) Hon'ble High Court of Madras also made it clear that each residential block in a housing project is a housing project in itself for purpose of claiming deduction u/s. 80IB(10) of the Act. Therefore, this contention of the AO is also not correct and sustainable and the first appellate authority was right in dismissing the same Thus we reach to a logical conclusion that the AO disallowed the claim by taking a hyper techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly perused the relevant material placed on the record of the Tribunal. The ld. Departmental Representative (DR) submitted that the ld. CIT(A) has erred in holding that assesse-firm will be eligible for deduction u/s. 80IB(10) of ₹ 2,65,52,967/-. It is, therefore, prayed that the order of the ld. CIT(A) be set aside and that the order of the Assessing Officer (AO) be restored. The ld. DR, supporting the findings of the AO,submitted that from the findings of the survey party, it is clear that the assessee is not eligible for deduction u/s. 80IB of the Act, as it fails to fulfill the certain basic conditions that it has owned the land and the units constructed by it are within the limit prescribed as per the provisions of s. 80IB(10) of the Act. 6. Further, the ld. DR submitted that the appellant is not the owner of the land and has only build housing project on the land without having ownership thereon hence, he is not eligible for deduction u/s. 80IB(10) of the Act. He further submitted that the assessee has sold flats measuring 2000 to 2200 sq. ft. therefore, in view of upper limit imposed by the act i.e., 1500 sq. ft. per unit the assessee has violated the limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not claimed any deduction u/s. 80IB(10) of the Act on row houses measuring from 2000 sq. ft. to 2200 sq. ft. and has only claimed said deduction on the units below 1500 sq. ft. therefore, contention of the ld. AO as well as ld. DR are not correct and the same are misdirected and based on the irrelevant and misdirected facts therefore, the same may kindly be dismissed. 9. The ld. AR also submitted that undisputedly the assessee maintained separate accounts for row houses and flats and has submitted details/list of flat sold before the authorities below which is also available at pgs. 38 39 of the assessee s paper book. The ld. AR vehemently pointed out that from the financial accounts/P L account for AY 200708placed at assessee s paper book pg. 39-40, it is clear that the assessee has shown profits on the flats at ₹ 2,68,88,713/- whereas income from row houses has been shown as ₹ 14,59,009/- and the same has been shown in the computation of income separately thus, there is no confusion or ambiguity in the claim of the assessee. The ld. AR also drew our attention towards held portion of decision of Hon'ble Bombay High Court in the case of Vandana Proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case. The AR of the appellant explained that though the appellant had purchased the land at Survey No. 882/1/2/2, Amli, Silvassa, vide Agreement dated 18/1/2005 due to court matter Final Sale deed was executed on 31/3/2008. Hence in respect of Flats sold, while executing Sale Deeds, till the said land was transferred in the appellant's name, the sellers of the Land were made as a confirming party. AR strongly argued that appellant has sold the Flats as a Builders Developers and not as a contractors. Further AR argued that the Housing Project of the appellant, consisting of Flats Row Houses, was duly approved by appropriate authorities and appellant has complied with all the requisite conditions of Section 80IB(10) of the Act. Further AR of the appellant brought to my notice that as the Built up areas of the Row Houses are more than 1500Sq. Ft. it has not claimed deduction U/s. 8oIB(10) in respect of Profit from the Sale of Row House. Further AR of the appellant explained that in respect of Sale of Flats and in respect of Sale of Row Houses appellant has prepared two separate Profit Loss A/c. In support of it's claim for deduction U/s. 80IB(10) in respect of Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre : Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with ascheme framed, by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place ; and (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent, of the aggregate built-up area of the housing proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Sq. Fts. On the other hand, though Assessing Officer has deputed Inspector for the verification of the areas of Flats in the said Housing Project, he has just relied on the observations of the Survey Party. Ignoring the fact that the appellant has not claimed deduction U/s. 80IB(10) in respect of Profit from the Sale of Row Houses Assessing Officer is not justified in denying the claimed deduction U/s. 80IB(10) in respect of Profit from the sale of the Flats. Having regards to the legal provisions I am of the opinion that in respect of the profit from the sale of the Flats the appellant has not violated any of the conditions of section 80IB(10) and as the appellant has not claimed deduction U/s. 80IB(10) in respect of the profit from the Sale of the Row Houses, appellant is eligible for deduction U/s. 80IB(10) of the Act inrespect of Profit from the Sale of Flats. The appellant also further buttress its case by citing two more judgements of Hon'ble ITAT - Essem Capital Market Ltd vs. ITO (2011) TIOL 196 (Mum.) and ITO vs. M.S.Vishnu Developers, (Ahm. ITAT). In view of the factual and legal position narrated above, the AO is directed to allow benefits U/s.80IB(10) of the Act c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 18.01.2005. The crux of these facts is that the assessee build and develop housing project under agreement dated 18.01.2005 and became owner of the said land on 31.03.2008 when the sale deed executed in favour of the assessee. At this juncture, the ratio of the order of the A Bench of ITAT, Ahmedabad in the case of Radhe Developers vs. ITO (ITA No.2482/Ahd/2006) it was held that to claim deduction u/s. 80IB(10) of the Act there is no condition precedent that the assessee must be the owner of the land on which housing project is to be constructed and hence, contention of the AO in this regard is not sustainable and ld. CIT(A) was right in dismiss the same. 15. So far as second allegation and basis taken by the AO for disallowing deduction u/s. 80IB(10) of the Act i.e., entire housing project is to be treated as single unit is concerned, we are of the view that neither the AO nor ld. DR during the arguments before us, could not controvert the fact that the assessee maintained separate books of accounts for flats and row houses and he has not claimed any deduction on the row houses which are measuring from 2000 sq. ft. to 2200 sq. ft. and claim of s. 80IB(10) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustainable and the first appellate authority was right in dismissing the same. The conclusion arrived by the ld. CIT(A) also gets strong support from the decision of Hon ble Jurisdictional High Court of Gujarat in the case of Pushkar Construction Co. (supra), wherein their lordship in para 7 held that when the project fulfilled the criteria for being approved as a housing project, the deduction u/s. 80IB(10) of the Act could not be denied. As per decision of Hon'ble High Court of Bombay in the case of Vandana Properties (supra), which was also referred by Hon'ble High Court of Madras in the case of Vishwas Promoters Ltd. (supra), it was held that the s. 80IB deduction on construction of a housing project on a plot having area of one acre is available, irrespective of fact that other housing projects exist on said land. In the present case, it is not an allegation of the AO that the housing project has been build or develop on a land having area of less than one acre, but he denied the deduction on the allegation that entire housing project to be treated as single unit which is not correct and justified in view of the conclusion arrived by us in the earlier part of this o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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