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TMI Blog2020 (3) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;The Tribunal'] in the ITA No.2000/AHD/2014 for the A.Y 2010-11. 2. The facts giving rise to this appeal may be summarized as under: 2.1 The respondent - assessee firm is engaged in the business of Real Estate Developers. During the assessment year 2010-11, the assessee had undertaken various housing projects. 2.2 During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee claimed deduction under section 80IB(10) of the Act, 1961 in respect of five projects, for which, the assessee had purchased land in respect of (1) Pratham Citadel Project, (2) Pratham Vatika Project, Ahmedabad, (3) Pratham Shrusti Project, (4) Pratham Residency Project and (5) Pratham Vistas, Bhaily, whereas, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of which 55 residential units had build up area which exceeded the prescribed built up area of 1500 sq.ft. in contravention of the provisions of section 80IB(10)(c) of the Act. From the submissions made by the learned Authorized Representative, it is seen that the appellant firm has developed a residential housing project namely 'Pratham Vista' which consisted of 103 residential units and from the details furnished, it is also seen that all the residential units developed by the appellant firm under the scheme 'Pratham Vista' are below the prescribed built up area of 1500 sq.ft. 3.3.4. As regards the 55 residential units referred to in the assessment order, the appellant has furnished the following documents to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Baroda. The project undertaken is located in fully developed area. The Assessing Officer had made addition in case of Pratham Properties by applying profit ratio declared in the case of M/s. Pratham Developers in which the assessee has calimed deduction u/s.80IB(10) and has shown profit on around 30%, whereas in the case of Pratham Properties rate of profit was shown 23.47% (in the case of residential projects) and 36.12% (in the case of commercial project). Thus, it can be seen that the issue that the appellant is a separate concern fulfilling the conditions prescribed u/s. 80IB(10) of the Act and the profit of the residential units which do not qualify the conditions, is shown in a separate business entity namely M/s. Pratham Properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the facts and circumstances of the case, the learned ITAT has erred in law and on facts in upholding the decision of the CIT(A) deleting the disallowance of Rs. 7,61,58,914/with respect to deduction u/s.80IB(10) of the Income Tax Act, 1961 without appreciating that the assessee is not eligible for deduction u/s.80IB(10) of the Act as the assessee had obtained the single approval from Local Authority consisting of approval for development and construction of residential unit having area of more than 1500 sq.ft. which is in violation of provisions of clause (c) of section 80IB(10) of the Act? [b] Whether in the facts and circumstances of the case, the learned ITAT has erred in law and on facts in allowing deduction u/s.80IB(10) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 4[2008] by a local authority shall be hundred percent of the profits derived in the previous year relevant to any assessment year from such housing, if - (a) Such undertaking has commenced or commences development and construction of the housing project on or after 1st day of October, 1998 and completes such construction. - (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008. (ii) in a case where as housing project has been or is approved by the local authority on or after the 1st day of April, 2004 5[but n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit is situated within the city of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place; 8[***]..............." 7. In view of the above provisions, it is discernible that as there is no provision of obtaining commencement certificate from the local authority for development and construction of the residential unit having more than 1500 sq.ft area. In the facts of the present case, when the assessee claimed the deduction with respect to the residential units, which are having built up area less than 1500 sq.ft, the condition laid down under section 80IB(10)(c) is fulfilled. Therefore, whether such development permission includes th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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