TMI Blog2008 (1) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... ing project either in the section or anywhere in the IT Act. Is it open for the Revenue to consider all the housing activities undertaken by the assessee as one project or different projects. All the above wings are part of 'Nisarg' block and independently satisfies the necessary approval of a housing project. It really makes no difference whether M/s Conwood Agencies had applied for or the assessee had applied to the municipal corporation to make any difference in deciding the assessee's claim for deduction under s. 80-IB(10) of the Act. It must be appreciated that the main developer was M/s Conwood Agencies (P) Ltd. The sanction plan have only approved the construction of the dwelling units of less than 1,000 sq. ft. in all the wings of the said project. There is no dispute that all the flats in these wings contain the eligible units. It is not open to the Revenue to conclude the next project as part of the earlier housing project just to deny the statutory relief which the assessee is entitled in respect of the eligible housing project. In our view, combining these two projects into one will lead to a result which manifestly will be unjust and absurd and defeat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER This is an appeal filed by the assessee arising out of the order dt. 28th March, 2007 of the CIT(A), Mumbai, for the asst. yr. 2005-06. 2. The assessee is a partnership firm engaged in the business as builder and developer. The only dispute in this appeal relates to the disallowance of deduction claimed under s. 80-IB(10) of the IT Act. 3. The facts of the case are found by the authorities are that M/s A.W. Pereira Ors., were the owners of certain plots of land in village Kandivali, Borivali Taluka, Mumbai. M/s Conwood Agencies (P) Ltd., (hereinafter referred to as the 'principal developer') acquired the development rights of this plot of land from the said owners. On the basis of the application, the Mumbai Municipal Corporation sanctioned a building plan to the said principal developer for construction of one building consisting of 11 wings i.e. wings, A, B, C, D, E, F,. G, F1, A1, B1 and B2. The principal developer in pursuance of the sanctioned plan itself constructed only two wings, viz. wing A and wing B of this building and granted sub-development rights for the remaining 9 wings of this building to the assessee firm by an agreement dt. 29th May, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... combined project and some of the flats in 'Breezy Corner' have a built-up area of more than 1,000 sq. ft., the assessee is not entitled to get deduction under s. 80-IB(10) of the Act. (ii) According to s. 80-IB(10)(d) of the IT Act, the permissible shopping area is only 5 per cent of the built-up area or 2,000 sq. ft. whichever is less whereas the shopping area of 'Nisarg' is about 7.60 per cent of built-up area of this block and if both the blocks are taken together, the total shopping area is 22.39 per cent of the total built-up area which also exceeded 5 per cent limit prescribed in s. 80-IB(10)(d) of the Act. (iii) Yet another objection for denying the relief under s. 80-IB is that the assessee has not received the completion certificate of the housing project from the municipality as required under s. 80-IB(10)(a) of the Act. 6. The CIT(A) agreed with the findings of the AO in denying the relief under s. 80-IB(10) of the IT Act. The assessee is now in appeal before us. 7. We have heard both the sides. The learned counsel for the assessee contended that the AO was not justified in holding that the two blocks 'Nisarg' and 'Breezy Corner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er s. 80-IB(10) of the Act. It also estimated the income of Rs. 12 crores from this project and paid the advance-tax thereon to establish the bona fides of the claim from the very beginning of the project. 8. The learned counsel for the assessee has placed reliance on the decision of the Tribunal, Kolkata Bench in the case of Bengal Ambuja Housing Development Ltd. vs. Dy. CIT, ITA Nos. 1594 and 1737/Kol/2005 dt. 24th April, 2006. wherein identical issue was involved and the Tribunal accepted the claim of the assessee under almost identical circumstances. In fact, the Department filed an appeal against the order of the Tribunal before the Hon'ble Kolkata High Court. The Kolkata High Court rejected the appeal filed by the Revenue. In other words, the Kolkata High Court has put a seal of approval on the order of the Tribunal which fits into the facts and circumstances of the present case. 9. Now coming to the objection that the area of shopping complex exceeded 5 per cent of the limit prescribed, it is pointed out that this sub-section was amended by the Finance (No. 2) Act, 2004 w.e.f. 1st April, 2005. Prior to its substitution the section granting 100 per cent deduction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Oct., 1998; (b) the project is on the size of a plot of land which has minimum area of one acre; and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities 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. After 1st April, 2005 The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st March, 2007 by a local authority shall be hundred per cent of the profits derived 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 Oct., 1998 and completes such construction,' (i) in a case where a housing project has been approved by the local authority before the 1st April, 2004, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998. Date of commencement is same (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. No completion requirement before 1.4.2005 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. No such stipulation before 1.4.2005 The date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... housing activities undertaken by the assessee as one project or different projects ? The Concise Oxford Dictionary (9th Edition) defines a 'project' as a plan, a scheme, a planned undertaking, a usually long-term task undertaken by a student to be submitted for assessment. The commencement certificates in respect of building No. 1 were received by the principal developer on 7th March, 2001 and 30th March, 2001 respectively. But the commencement certificates for various wings were approved by the municipality as per the details given below : Wing-C on 10.9.2001 Wing-E on 11.9.2001 Wings-C, D, E, F G on 27.3.2002 Wings-F G on 7.5.2002 Wing-F1 on 23.9.2003 All the above wings are part of 'Nisarg' block and independently satisfies the necessary approval of a housing project. It really makes no difference whether M/s Conwood Agencies had applied for or the assessee had applied to the municipal corporation to make any difference in deciding the assessee's claim f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that since the units comprised in the housing project of the assessee was more than 1,500 sq. ft., the assessee's claim for deduction under s. 80-IB(10) was not entertained. The Tribunal after appreciating the clear provisions of s. 80-IB(10), which does not speak regarding such denial of deduction in case of profit from a housing complex containing both the small 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-IB(10), the denial of claim by the assessee was held to be based on narrow and restricted interpretation of the provisions of cl. (c) of s. 80-1B(10) of the Act. They drew support from the decision of the Hon'ble Supreme Court in the case of Bajaj Tempo Ltd. vs. CIT (1992) 104 CTR (SC) 116 : (1992) 196 ITR 188 (SC), wherein it was held that provisions should be interpreted liberally and since the present case also, the assessee by claiming pro rata income on qualifying units which satisfied the condition laid down by s. 80-IB(10), the assessee's claim should be accepted. This order of the Tribunal was taken up in appeal before the Kolk ..... X X X X Extracts X X X X X X X X Extracts X X X X
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