TMI Blog2017 (4) TMI 1544X X X X Extracts X X X X X X X X Extracts X X X X ..... s regarding allotment of residential units shall not apply in respect of allotments made before 20/08/2009 Whereas in this case, allotments were made subsequent to insertion of clause (f) in the Act. The submission of the assessee that in other cases, memorandum of sale agreements were entered into on 29/06/2007, have no substance for simple reason that sale agreements were not registered and no consideration was stated to have been paid on the date of agreement and there is nothing to show that possession of the flats was handed over to the purchasers nor any right in favour of the buyer was created by virtue of entering into such sale agreement. The object behind the tax benefit for housing project is to build housing to low middle income groups. This has been ensured by limiting size of residential units to 1000 sq.ft. or 1500 sq.ft. as the case may be. However, rule is circumvented by some developers by entering into agreements to sell multiple adjacent units to single buyers. To curb this practice clause (f) has been inserted to sub-section (10) of section 80-IB. Thus restriction imposed on allotment of flats is only intended to safeguard the objects of the beneficial provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h flat of the project exceeds 1500 sq.ft. The DVO submitted a report dated 17/02/2014 wherein he mentioned Wing 2 meaning Block B of the Project, there are 3 duplexes apartments viz, B-901, 1001, B-902 and 1002 and B-903 1003. It was further stated that as per sanctioned plan, only 4 units of B-1 of the project 4 units in 1092 of the block. But on inspection, it is found that units in 9th and 10th blocks are clubbed and made into duplex apartment. DVO specifically mentioned that measurements taken are excluding common areas, lobby, corridors, staircase, club house etc. Based on this report of DVO, AO called upon the assessee to show cause why benefit u/s 80IB(10) should not be denied to the assessee as it has infringed the conditions which are required to be fulfilled to entitle it to claim deduction u/s 80-IB of the Act. In response to show case notice, assessee contended inter alia that the DVO took physical inspection after lapse of nearly 3 years from the date of issue of occupancy certificate dated 31/03/2011. It was further submitted that subsequent alterations made by the buyers of the flat does not disentitle the assessee to claim deduction. Confirmation letters to this eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices, Hon ble Madras High Court decision in CIT vs. Sanghvi Doshi Enterprises and the decision of the Hon ble Supreme Court in the case of Krishnaswamy S PD another vs. UOI (281 ITR 305). It is further submitted that since the issue in appeal is covered in favour of the assessee by the co-ordinate bench in the case of Emgeen Holdings Pvt. Ltd. vs. DCIT (Bom); DCIT vs. M/s.Varun Developers (Pune) and Patel Jashwantlal A Patel Punamchand N vs. ITO (Ahd.) If for any reason this Tribunal differs with the decision of the above co-ordinate bench, the matter may be referred to Special Bench. Thus, it was contended that the lower authorities were not justified in denying 80-IB(10) deduction. 8. On the other hand, learned DR opposed the submissions. He submitted that the provisions of clauses (c) and (f) of subsection (10) of section 80-IB are not complied with in the present case. He submitted that the law to be applied is the law in force in the assessment year unless otherwise expressly provided by necessary implication. For this principle, he pointed out that for assessment year 2011-12, provisions of clause (f) of sub-section (10) of section 80-IB were very applicable and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004 but not later than the 31st day of March, 2005, within four years from the end of the financial year in which the housing project is approved by the local authority; (iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority. Explanation.-For the purposes of this clause,- (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (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) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea of one acre. iii. The built-up area of each residential unit should not exceed 1,000 sq.ft. in the cities of Delhi and Mumbai (including areas falling within 25 kms. of municipal limits of these cities) and 1,500 sq.ft. in other places. iv. The built-up area of the shops and other commercial establishments included in the housing project should not exceed 5 per cent of the total built-up area of the housing project or 2,000 sq.ft. whichever is less. v. The project has to be completed within 4 years from the end of the financial year in which the project is approved by the local authority. It has been further clarified that benefits of this sub-section are not available to an undertaking which executes housing project as works contract awarded by any other person. It is further stipulated that by inserting clause (f) to sub-section (10) of section 80-IB that undertaking which develops housing project should not allot more than one unit to an individual. Where the person is an individual, no other residential unit in such house project should be allotted to any of the following persons: i. Individual or spouse or minor children of such individual. ii. HUF in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law w.e.f. 19/08/2009, restrictions regarding allotment of residential units shall not apply in respect of allotments made before 20/08/2009 Whereas in this case, allotments were made subsequent to insertion of clause (f) in the Act. Furthermore, the submission of the assessee that in other cases, memorandum of sale agreements were entered into on 29/06/2007, have no substance for simple reason that sale agreements were not registered and no consideration was stated to have been paid on the date of agreement and there is nothing to show that possession of the flats was handed over to the purchasers nor any right in favour of the buyer was created by virtue of entering into such sale agreement. 9.4 Reliance placed by the learned counsel for assessee on the decisions of co-ordinate benches of Tribunal in the case of Emgeen Holdings Pvt. Ltd. (supra); M/s.Varun Developers (supra) and Patel Jashwantlal A Patel Punamchand N (supra) are not applicable to the facts of the case as, in those cases it was undisputed fact that allotment in respect of same family members was made before insertion of clause (f) to sub-section (10) of section10-IB of the Act whereas, in the present case as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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