TMI Blog2021 (9) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... units, the Ld. CIT(A) has accepted the arguments advanced on the alternative ground in the light of the cases relied upon by the assessee and directed the AO to allow the deduction on proportionate basis. - Decided against revenue. - ITA NO. 1619/Chd/2019 (Assessment Year : 2011-12) - - - Dated:- 11-8-2021 - SHRI. N.K.SAINI, VP AND SHRI , R.L. NEGI, JM Revenue by: Shri Manveet Singh Sehgal, Addl. CIT Assessee by: Shri Tej Mohan Singh, Advocate ORDER PER R.L. NEGI, JUDICIAL MEMBER: The present appeal has been filed by the Revenue against the order dated 25/10/2019, passed by the Commissioner of Income Tax (Appeals)-1, Chandigarh (CIT(A) pertaining to the assessment year 2011-12, whereby the Ld. CIT(A) has partly allowed the appeal filed by the assessee against the assessment order passed under section143(3) of the Income Tax Act, 1961 (For short the Act ). 2. Brief facts of the case are that the assessee filed its return of income for the A.Y. under consideration declaring nil income after claiming deduction u/s 80IB(10) of the Act amounting to ₹ 2,08,89,635/-. Thereafter the AO reopened the case u/s 147 read with 148 of the Act for the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulfilled in its case and accordingly offered the disallowance of deduction on pro rata basis. The ld. DR further submitted that the cases referred and relied upon by the Ld. CIT(A) in this case are not applicable to the present case as the facts of the cases relied upon are different from the facts of the present case. In the present case the assessee has claimed full deduction u/s 80IB(10) of the Act in contravention of the provisions of law and in the first appeal, the Ld. CIT(A) has wrongly issued directions to the AO to allow the deduction on proportionate basis. Flat No.136 was allotted to Shri Rakesh Makkar alongwith two co-owners by the assessee company. Further Flat No. 127 was allotted to Mrs. Ritu Makkar wife of Shri Rakesh Makkar in contravention of the provisions of clause (f)(i) of section 80IB(10) of the Act. Therefore, the AO has rightly rejected the claim of the assessee. Since the findings of the Ld. CIT(A) are not in accordance with the provisions of the Act, the impugned order is liable to be set aside. 5. On the other hand, the Ld. counsel for the assessee relying on the findings of the ld. CIT(A) submitted that since the findings of the ld. CIT(A) are based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding housing projects approved before the 31st day of March, [2008] by a local authority shall be hundred per cent of the profits denved in the previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 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 a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004, within four 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be restricted to the profit derived from the construction of smaller units and not from larger residential units. Though the AO has denied the claim of the assessee observing that larger units were also constructed by the assessee, at the same time, it is also a fact on record that the assessee had claimed deduction only on account of smaller residential units which were fulfilling all the conditions as contained in s. 80-IB(10) and the same has not been disputed by the AO also. We have also noted down the fact that even the provision as laid down in s. 80-IB(10) does not speak regarding such denial of deduction in case of profit from a housing complex containing both the smaller and large residential units and since the assessee has only claimed deduction on account of smaller Qualifying units by fulfilling all the conditions as laid down under s. 80-lB(10). the denial of claim by the assessee is on account of rather restricted and narrow interpretation of provisions of cl. (c) of s. 80-1 B(1) while coming to such conclusion, we also find support from the order of the Hon'ble Supreme Court in the case of Baiai Tempo Ltd. (supra), wherein it was held that provisions shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the wife of Sh. Rakesh Makker. Accordingly, Ground No. 2 of appeal is Partly Allowed. 7. As pointed out by the ld. counsel, the findings of the ld. CIT(A) are based on the decisions of the various Benches of the Tribunal and the law laid down by the Hon'ble Madras High Court in the case of M/s Visvas Promotors Pvt. Ltd. 255 CTR 149 in which the Hon'ble Court has held that the assessee is entitled to claim proportionate relief in respect of units satisfying the condition of the built-up area. In the case of ITO vs. Paras Builders the Pune Bench of the Tribunal has held that where the assessee had violated provisions of section 80-IB(10)(C) in respect of two units of housing project, denial of deduction u/s 80IB would be limited only to said two units and for balance units assessed would be entitled to deduction. Similarly, in the case of Om Swami Smaran Develpoers (P) Ltd. vs. ITO (supra), the Mumbai Bench of the Tribunal has held that where the assessee developer had allotted three flats in a housing project to a single person in violation of section 80 IB(10)(f) of the Act, the assessee would be entitled to deduction in respect of the remaining flats. In the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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