TaxTMI 
TaxTMI 
2008 (5) TMI 333
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....rcumstances of the case the CIT(A) erred in holding that there is violation of any of the conditions to become eligible for claiming deduction under s. 80-IB(10) of the Act though the assessee firm has sold some of plots to individual buyers without constructing any tenements thereon. 4. On the facts and circumstances of the case the CIT(A) erred in holding that assessee firm would be eligible for making pro rata deduction in respect of dwelling units having built-up area less than 1,500 sq. ft. 5. On the facts and circumstances of the case the CIT(A) erred in holding that the assessee firm satisfies all the conditions stipulated in the provisions of s. 80-IB(10) of the Act, and therefore would become eligible to claim deduction. 6. On the facts and circumstances of the case the CIT(A) erred in holding that mandatory requirement of furnishing audit report in Form CCB of the Act in respect of each layout separately would not be adverse to claim deduction under s. 80-IB(10) of the Act. 7. Any other ground that may kindly be allowed to be raised at the time of hearing of appeal." 3. At the time of hearing before us, the learned Departmental Representative argued at length. He sta....
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....o 2.06 acres. It is submitted by the learned counsel that the total land acquired by the assessee was 64 acres, out of which, the assessee developed a housing project in the total land of 2.06 acres. He pointed out that in such a project, there were more than one building and for each building, a separate approval was taken. However, each building was not a separate project but the part of one housing project scheme developed at Dixit Nagar by the assessee. He also stated that from the plot number given in the letter of NIT, it is seen that all the plots were adjoining and it is in the same campus. In support of this contention, he also referred to the printed brochure which was used by the assessee for sale of residential units in this project. With regard to the sale of plot, it is submitted by the learned counsel that the assessee did not sell the plot but only sold the duplex bungalow as a residential unit. However, in order to identify the area of plot to each customer, there were marking of the plot area in the layout but on all the plots, buildings were constructed and a residential unit, that is, the plot along with the bungalow constructed thereon was sold. A consolidated ....
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....uch 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; (b) the project is on the size of a plot of land which has a 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." Let us examine whether the assessee has fulfilled the conditions prescribed by s. 80-IB(10). There is no dispute about the fulfillment of the conditions prescribed under cl. (a) of s. 80-IB(10) i.e., the project was commenced after the first day of October, 1998. 5.1 The first dispute is whether the project is on the size of a plot of land which has a minimum area of one acre. As per the assessee, the project is developed on the area of 2.06 acres, while as per the AO, the project is developed in an area of below one acre. In the paper book, the assessee has furnished the certificate from the NIT which is the local authority enti....
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....---------------- 2. 261 to 270 1,350 1,350 67.33 1,346.6 PH/17664/11042 dt. 26-3-2002 --------------------------------------------------------------------- 3. 288 to 290, 1,092 1,092 90.933 1,091.196 PH/17568/11015 293 to 295, dt. 11-1-2002 298 to 300, PH/17833/11015 303 to 305 &nbs....
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....overed under each approval was below 4,000 sq. mtrs. but the total area covered together in all the six approvals was 8,370 sq. mtrs. which is more than two acres. Now, the question is whether by six different approvals, the assessee has developed six different housing projects or it was in pursuance to development of one housing project. 5.3 From the letter of NIT, it is evident that there was only one housing project at Dixit Nagar for which multiple sanctions were granted, as per the zoning of the plot and access road. This contention of the assessee is further fortified by the brochure circulated by the assessee for the sale of the plot. The copy of the brochure is placed at p. 28 of the assessee's paper book. The relevant portion of the brochure reads as under: "Over ten years the group-AIR Developers, carefully studied home needs of the people of this region. After thoughtful and meticulous analysis, the group realized the people of this region needed a home which is much more affordable than all existing options. This glaring need of the people motivated AIR Developers to lay the foundation of Dixit Nagar. Dixit Nagar is not just a township. It's a determined effort by AIR....
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....f the balcony is to be included in the built-up area. The IT Act did not define the term "built-up" area till the Finance (No. 2) Act, 2004 inserted cl. (a) in the s. 80-IB(14). This clause defines the built-up area as under: (a) "built-up area" means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units; 5.8 The learned CIT(A) is of the opinion that this definition of built-up area is clarificatory in nature and therefore would be retrospective in operation. He has, therefore, applied the same to the assessment year under consideration. We are unable to agree with the above view of the CIT(A) because the Finance (No. 2) Act of 2004 itself has made the provision effective from 1st April, 2005, i.e., from asst. yr. 2005-06. The legislature has the power to give retrospective effect to any provision and wherever the legislature intends to make any provision effective from back date, a specific mention is made in the Act with regard to the date from which the provision is intended to be effective. In respect of the....
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....rd "built-up" area in para 2.11 of the Regulation which reads as under: "2.11 Built-up area: The area covered by a building on all floors including cantilevered portion, if any, but excepting the areas excluded specifically under these regulations." 6.1 Para 15.4 provides exemption to the open spaces/covered area which reads as under: "15.4.1 The following exemption to open spaces shall be permitted (a) Projections into open spaces: Every open space provided either interior or exterior shall be kept free from any erection thereon and shall be open to the sky and no cornice, Chajja, roof or weather shade more than 0.75 mtrs. wide shall overhang or project over the said open space so as to reduce the width to less than the minimum required. However, slopping Chajja provided over balcony/gallery etc. may be permitted to project 0.3 mtrs. beyond balcony projections at an angle of 30 degree from horizontal level. (b) A canopy not exceeding 5 mtrs. in length and 2.5 mtrs. in width in the form of cantilever and unenclosed over the main entrance providing a minimum clear height of 2.40 mtrs. below the canopy. The canopy shall not have access from upper floors (above floors), for using....
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.... all the conditions laid down under the beneficial provision of s. 80-IB(10). The construction of shops or commercial place cannot be considered a 'housing project' for the purposes of application of the provision of s. 80-IB(10). In this case, it was not established by the assessee that its building project is primarily a 'housing project' in the facts of the case of the assessee. The building project of the assessee was approved by the local authority (KDMC) as a residential as well as commercial project. The CIT(A) has given a clear-cut finding on this issue on the basis of a copy of the approval letter by KDMC filed by the assessee. It is not possible to accept the argument of the assessee that since the case pertains to preamendment period, the deduction under s. 80-IB(10) will be available to the assessee even if the shops and other commercial establishments are included in the housing project of the assessee. If this argument of the assessee is accepted, then it shall nullify the very object of introducing the provision of s. 80-IB(10) in the statute book for promotion of housing activity in the country since there shall be no limit of the total built-up area devoted to the ....
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....-IB(10) while coming to such conclusion, we also find support from the order of the Hon'ble Supreme Court in case of Bajaj Tempo Ltd. vs. CIT, wherein it was held that provisions should be interpreted liberally and since in the present case also, the assessee by claiming pro rata income on qualifying units has complied with all the provisions as contained in the said section, in our considered opinion, such claim of the assessee was rightly allowed by the learned CIT(A) by reversing the order of AO." 6.6 The above decision of the Tribunal, Kolkata Bench is also upheld by the Hon'ble Tribunal, Calcutta High Court in IT Appeal No. 453 of 2006 wherein the Hon'ble High Court vide order dt. 5th Jan., 2007 held as under: "The appeal is now taken up for hearing and after hearing the learned counsel for the parties and perusing the order passed by the Tribunal, we find that no substantial question of law is involved in this matter. Hence we dismiss the appeal." 6.7 The ratio of the above decision of the Tribunal, Kolkata Bench would be squarely applicable to the case under consideration before us because the facts are identical. Moreover, even if it is held that in view of the above two....