TMI Blog2022 (12) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... h the prefix of municipal limit . The municipal limit refers to municipality and municipality of Mumbai is known as Brihanmumbai Muncipal Corporation which is the governing civic body of the city known as BMC . Further, the statue has provided in clause (c) the residential unit must be of maximum built up area of 1000 Sq. ft. if such residential unit is situated within the municipal limit of city of Delhi or Mumbai. It is only when the residential unit is outside 25 Kms from the municipal limits of Delhi or Mumbai, the maximum built up area eligible for deduction is 1500 Sq. ft. The enactments which has been referred by the learned counsel before us mainly envisages about the area of city of Mumbai which extend from Colaba in the South, Mahim on the western side and Sion on the eastern side. And Mumbai Suburban extends from Kurla to Dahisar on western side and Mulund on the eastern side. These are two administrative districts but it does not refer that this is the municipal limit and these are two Municipal Corporation or there are two municipal limits, one for city of Mumbai and one for Mumbai Suburban district. Though, in colloquial terms the Mumbai is divided into town a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny flat or unit in wing C which is slightly less than 1000 Sq. ft.; and incase if there is any such unit, then AO is directed to allow the proportionate deduction on pro-rata basis and allow the deduction of u/s 80IB(10). Thus, the revenue appeal is dismissed. - I.T.A. No. 895/Mum/2020, 288/Mum/2020, 287/Mum/2020, 896/Mum/2020, 897/Mum/2020, 289/Mum/2020 - - - Dated:- 31-10-2022 - Shri Amit Shukla, JM And Shri S Rifaur Rahman, AM For the Appellant : Shri. Subodh Ratnaparkhi, CA For the Respondent : Shri. Chetan M. Kacha, Sr. AR. ORDER PER AMIT SHUKLA, JUDICIAL MEMBER: The aforesaid cross appeals have been filed by the assessee as well as by revenue against common order dated 15.11.2019. passed by Ld. CIT(A) 26, Mumbai for the quantum of assessment passed under section 143/147 for the A.Y. 2009-10 2010-11 under section 143 (3) for the A.Y. 2011-12. The issues involved in all three years are common rising out of identical set of facts, therefore, same were heard together and are being disposed of by way of this consolidated order. 2. Since the main finding is given in the order of AO and CIT(A) for A.Y. 2011-12 and based on such finding, assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing project Jai Gurudeo Complex at Kamothe, Navi Mumbai, for the reason that the condition imposed by sub section (c) of sec. 80IB(10) with regards to maximum permissible built up area of residential unit stood breached, not appreciating that the appellant fulfilled all the conditions of sec. 80IB(10) in respect of C Wing also and therefore deduction u/s 80IB(10) was required to be allowed for all the wings of the housing project. 2. The Hon CIT (A) erred in holding that the appellant was not entitled for deduction u/s 80IB (10) of the IT Act 1961 in respect of income from development of C Wing of the housing project Jai Gurudeo Complex at Kamothe, Navi Mumbai, for the reason that certain residential units of C Wing exceeded the maximum permissible built up area 1000 Sq. ft., not appreciating that the appellant was entitled for such maximum permissible built up area 1500 Sq. ft. and as none of the residential units exceeded such permitted area, disallowance of deduction u/s 801B (10) was not justified. 3. The appellant prays that deduction u/s 801B (10) may kindly be granted to the appellant as claimed in the return of income. 5. Thus, the main issue involved i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be taken from Mumbai town/Mumbai city and the Municipal limit of city of Mumbai hence falls on the eastern side between Sion and Kurla. Whereas the assessee s housing project is situated at Kamothe Navi Mumbai which is more than 25 kms from this point by road and therefore, the maximum built up area permissible is 1500 Sq. ft. and not 1000 Sq. ft. The assessee had also referred to Mumbai Municipal Corporation Act of 1988 which has distinguished the city of Mumbai and the Corporation of Greater Mumbai which is known as Brihanmumbai . Assessee had also referred to various enactments to demonstrate that city of Mumbai has been identified upto Chunabhatti near Sion on the eastern side. Therefore, the Municipal limit has to be seen from the city of Mumbai as defined in these enactments. The learned Assessing Officer held that there is only one Municipal Corporation in Mumbai which is known as BMC and the outer limit of the BMC of Mumbai is upto, Panvel octroi check naka in Mankhurd area. Thus, the distance of assessee project is less than 23 kms., which limit is to be counted from this check naka and if the distance by road from this place to the assessee s project is measured as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed area. Accordingly, he held that assessee is not eligible for deduction under Section 80IB(10) of entire project as it exceeded 1000 sq. ft. 10. The learned CIT(A) in so far as the assessee s claim that the project was beyond 25 kms from the city of Mumbai, rejected the said contention and upheld the order of the Assessing Officer holding that assessee is only entitled for Maximum built up area 1000 Sq. ft. and not 1500Sq. ft. in respect of project at Kamothe, Navi Mumbai, because AO has correctly taken the municipal limit of BMC which is the only municipal corporation of Mumbai and that alone has to be taken for the purpose of calculating the distance of 25 Kms. However, in so far as the assessee contention that certain residential units of the housing project did not exceeded 1000Sq. ft. therefore, Pro-rata deduction should be given. The relevant observation and finding of the CIT (A) are as under : (i) It is the claim of the appellant that as the project is situated at Kamothe, Navi Mumbai, which is stated to be more than 25 km from the municipal limits of the City of Mumbai, the appellant is entitled for maximum built up area of 1500 sq. ft.. as per sub-section (c) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up area of units of C wing of the housing project, as identified by the AO exceeds the maximum permissible built up area of 1000 sq. ft. Accordingly, ground nos 1, 2A to 2D are Dismissed. (iv) In ground no 2E, the appellant has argued that even if it is held that certain residential units of the housing project exceed 1000 sq. ft. built up area, the appellant should be granted deduction u/s 80IB(10) in respect of profit arising from development of other residential units of the same project which do not exceed the permissible built up area on proportionate basis. Having examined this issue, I find merit in the arguments of the appellant. The issue of pro-rata deduction has been the subject matter of various judicial pronouncements, some of which are cited by the appellant in his written submission. The Hon. Mumbai Tribunal in the case of ACIT v Sheth Developers Pvt. Ltd 33 SOT 277 (Mum) has allowed proportionate deduction by stating that we are of the opinion that assessee is eligible for relief on pro-rata 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 u/s 80IB(10) in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on eastern side. Thusv, the municipal limit of city of Mumbai therefore, ends on Sion on eastern and from limit the distance to the housing project of assessee at Kamothe, Navi Mumbai is more than 25 kms. He also submitted that above issue as to the exact geographical location of the City of Mumbai has been the subject matter of the decision of the Hon. Bombay High Court in the case of Shri. Mavji Mulji Merchant -Vs- State of Maharashtra Others, 1993(3) Bom C.R. 220 (Bom). Similarly, the issue was also considered by the Hon. Mumbai Tribunal in the case of Silver Land Developers Pvt. Ltd. -Vs- ITO, ITA No.2506/Mum/2009 DL11.07.2012 I Bench ITAT, Mumbai, wherein the Tribunal has appreciated the issue that the term City of Mumbai is different from the term Municipal Corporation and therefore the exact limits of the geographical location of the City of Mumbai has to be taken into consideration to determine the maximum permissible built up area of residential units as per sub-section (c) of section 80 (IB)10. Thus, he submitted that the housing project developed by the appellant at Thane being more than 25 kms from the Municipal limits of the City of Mumbai, the maximum permissibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'C' have been stated by the ld. AO to be above maximum permissible area of 1000 sq. feet but below 1500 sq. feet. Without prejudice to the claim, that none of the residential units of the housing project exceed the maximum permissible area, the Ld. Counsel contended that in case if it is held that certain residential units of Wing C of the project exceed the maximum permissible area, then in such a situation, proportionate deduction may be granted in respect of units which undisputedly comply with the conditions prescribed u/s 80IB (10) of the I. Tax Act 1961. He pointed out that even as per the ld. AO, none of the residential units of the 'A' 'B' Wing of the housing project exceed 1000 sq. ft. (built-up) area. In such circumstances, denial of deduction in respect of those units of Wing 'A' Wing 'B' is not justified. In support of this preposition learned counsel relied upon the following judgments of the Hon ble Bombay High Court: (i) Devashri Nirmann LLP-vs-ACIT, 429 ITR 597 (Bom)(2020)/ 124 tanmann.com 125 (Bombay)(2021) (ii) Models Construction (P) Ltd.-vs-DCIT, 429 ITR 605 (Bom)(2020)/ 124 taxmann.com 362 (Bombay)(2021) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.3 At this stage, kind attention of the Hon'ble Bench is also invited to the section 80-IB(1)(c) of the Act, which reads as under (emphasis supplied): (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city 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; If the arguments of the assessee regarding the distinction between the word city and corporation were to be accepted, then the very purpose of explicitly mentioning the word municipal by the Legislature would be rendered nugatory. In other words, the aforesaid section does not merely deploy the word limits of the city, but prefixes municipal to it The argument of the assessee is erroneous since in such a case it would not have been necessary for the statute to use the word municipal which cannot be read down. It is, therefore, apparent beyond doubt that municipal refers and pertains to a municipality and, in the context of the instant appeal means the municipality of Mumbai which is the Brihanmumbai Municipal Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay are involved. 2.6 The assessee has also relied on the decision of Hon'ble Appellate Tribunal in ITO vs Ms Silver Land Developers P Ltd ITA No 2506/Mum/2009). This also does not advance the case of the assessee. Firstly, this case makes a reference to the Shri Mavji Mulji Merchant va State Of Maharashtra And Ors (supra) discussed above Secondly, the Hon'ble ITAT set aside the matter to the file of the Assessing Officer with a direction to reconsider the entire matter in accordance with law, with all the issues left open Hence, the case has little precedent value. 2.7 Another aspect raised by the assessee is the reference to the words used in section 80-IB(7A)(a) of the Act. However, it is not written in stone that the statute must use exactly the same words at all times and at all places. Even otherwise, it may kindly be noted that section 80-IB(7A)(a) refers to areas within the municipal jurisdiction of Chennai, Delhi, Mumbai or Kolkata. However, this reference is also made in section 80-IB(10)(c) of the Act by referring to situated within the city of Delhi or Mumbai and it goes on to add a further restrictive condition of 25km from municipal limits Thus, it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision before us on this issue, we hold that the distance of 25 Kms for the purpose of Section 80IB(10) of the Act has to be measured as per the road distance and not as per the straight line distance on a horizontal plain. The other issue regarding whether this Section 80IB(10)(c) referred the outer limit of city of Mumbai or outer limits of municipal Corporation of Greater Mumbai, we find that it is the BMC having the jurisdiction over the municipal limits of Mumbai and therefore, the site of building project of the assessee has to be measured from the outer municipal limits of municipal corporation Le. BMC only. [Emphasis Supplied] It is respectfully submitted that the aforesaid decision is squarely applicable to the facts obtaining in the appeal under consideration. 4. In view of the submissions made as foregoing, it is respectfully prayed that the decision of the Ld CIT holding that appellant is ineligible to claim deduction under section 80IB(10) of the Act in view of relevant project falling within 25kms from the limits of BMC with the units therein having built up area greater than 1000 sq ft, may kindly be upheld. 15. On the issue of proportionate dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he municipal limit refers to municipality and municipality of Mumbai is known as Brihanmumbai Muncipal Corporation which is the governing civic body of the city known as BMC . Further, the statue has provided in clause (c) the residential unit must be of maximum built up area of 1000 Sq. ft. if such residential unit is situated within the municipal limit of city of Delhi or Mumbai. It is only when the residential unit is outside 25 Kms from the municipal limits of Delhi or Mumbai, the maximum built up area eligible for deduction is 1500 Sq. ft. The enactments which has been referred by the learned counsel before us mainly envisages about the area of city of Mumbai which extend from Colaba in the South, Mahim on the western side and Sion on the eastern side. And Mumbai Suburban extends from Kurla to Dahisar on western side and Mulund on the eastern side. These are two administrative districts but it does not refer that this is the municipal limit and these are two Municipal Corporation or there are two municipal limits, one for city of Mumbai and one for Mumbai Suburban district. Though, in colloquial terms the Mumbai is divided into town area is referred as Mumbai city and suburba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s judgment of Hon ble Bombay High Court and series of ITAT order as incorporated in the earlier part of order dealing with the submissions of the learned counsel for the assessee. However, it is not borne out from the record, whether there is any flat or unit in wing C which is slightly less than 1000 Sq. ft.; and incase if there is any such unit, then Assessing Officer is directed to allow the proportionate deduction on pro-rata basis and allow the deduction of under section 80IB(10). Thus, the revenue appeal is dismissed. 21. Admittedly, in A.Y. 2009-10 A.Y. 2010-11 exactly similar facts and issued are involved therefore, or finding given above will apply mutatis mutandis and accordingly the appeals of the assessee are dismissed as well as the appeal of the revenue are also dismissed. 22. In so far as, the additional ground on the issue of 147, the same has not been argued before us and therefore it is treated as not pressed and accordingly we are not adjudicating the validity of reopening under section 147/148. 23. All Appeals of the assessee are dismissed and review appeal of the assessee is also dismissed. Orders pronounced in the open court on 31st Oct, 2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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