TMI Blog2022 (8) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Learned Commissioner of Income Tax (Appeals)-1, Thane [hereinafter in short Ld.CIT(A) ] dated 04.08.2020 for the A.Y.2007-08. 2. Brief facts of the case are, assessee is an AOP consisting of members namely M/s Dodia Marketing Pvt Ltd and M/s Parmar Enterprises carrying on business activities of builder and developer. The assessee filed its Return of Income for A.Y. 2007-08 declaring total income of ₹.Nil on 26-10-2007. The return was processed u/s 143(1) of Income-tax Act, 1961 (in short Act ). Subsequently, the case was selected for scrutiny under CASS and notice u/s. 143(2) and 142(1) of Income-tax Act, 1961 (in short Act ) were issued and served on the assessee. In response AR of the assessee attended and submitted relevant information as called for. 3. At the time of assessment, Assessing Officer observed that assessee has developed a project called 'Cosmos Park' situated opposite Suraj Water Park, Behind Kanchan Pushpa Kavesar, Waghbil, GB Road, Thane (W). The project is consisting complex of 9 buildings viz Vinca 1 2 (stilt + 7 floors), Copperleaf 1 2 (stilt + 7 floors), Iberis 1 2 (stilt + 3 floors), Mayflower 1 (stilt + 3 floors) Mayflowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has come up in various similar cases of the housing projects whereby the courts have held the view that in case of such violations, the deduction u/s. 80IB(10) should be allowed on prorata basis. 11. In the case of ACIT-vs-Sheth Developers (P) Ltd. 33 SOT 277 dt. 25.06.2009, the jurisdictional ITAT, Mumbai while deciding the similar issue, it has held that: Thus, without doubt, by the assessee's own admission, at lest in a few cases the built-up area exceeded 1000 sq. ft. Now the question was section 80IB(10) could to a project even where some of the units exceeded 1000 sq ft. of built-up area. As aforesaid, the assessee was denied deduction u/s. 80IB(10) only for areas on that it failed the test of limit of 1000 sq. ft. However, the Kolkata, Bangalore and Nagpur benches of the tribunal had clearly held that even where some of the units exceeded the area limit, relief had to be given on a prorate basis. Following these, the assessee was eligible for relief on a prorate basis in respect of the flats which did not have a built-up area exceeding 1000 sq. ft. in respect of Aishwarya project. Thus, the quantum of deduction us. 80IB(10) in respect of the Aishwarya project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire deduction u/s. 80IB(10), it would be fair and reasonable to allow deduction on proportionate basis (ITO-vs AIR Developers 123 TTJ (Nag) 959 (2009). 15. In view of the judicial pronouncements cited supra and the facts and circumstances of the present case, in my opinion, the appellant is entitled for deduction u/s 80IB(10) on proportionate basis as held in various decisions. Therefore, the AO is directed to calculate the deduction u/s 80IB(10) on prorata basis in respect of the flats which did not have the built up area exceeding 1000 sq. feet in the housing project Cosmos Hills . In other words, all those residential units which fulfills the condition of section 80IB(10)(c)should be allowed the beneficial deduction as per provisions of that section and the residential units violating the stipulated 1000 sq. feet condition should be denied the deduction. This view is further followed in the appellant's own case by my predecessors also for A.Y. 2008-09 (order dated 30.08.2011) and for A.Y. 2009-10 (order dated 30.11.2012) in the case of M/s.Cosmos Developers. Since, the facts for the year under appeal are also the same, I follow the decision of my pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IB(10) of the Act, if certain units exceed the area as stipulated in the section. We find that in the matters of Vandana Properties, Mudhit M.Gupta, Saroj Sales Organization, Brigade Enterprises Pvt. Ltd, Magarpatta Township Development Construction Co, M/s.Rahul Construction Co., Runwal Multi-housing Pvt. Ltd.(supra) different benches of the Tribunal have held that only proportionate disallowance can be made if an assessee does not fulfills the conditions stipulated in the section. In other words an assessee is entitled to proportionate deduction u/s.80IB of the Act, even if certain conditions, stipulated by the section, are not fulfilled we find that, similar view has been taken by the Hon'ble Madras High Court in the case of Viswas Promotors (P) Ltd.(supra),Hon'ble Court has held as under: Within composite housing project, where there are eligible and ineligible units, the assessee can claim deduction in respect of eligible units in the project and even within the block the assessee is entitled to claim proportionate relief in the units satisfying the extent of the built up area. In the Matter before the Hon'ble Court assessee had constructed flats under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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