TaxTMI 
TaxTMI 
2008 (8) TMI 453
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the said Brigade Millennium as a single project for the purpose of Section 80-IB(10) and disallowed the deduction under the said Section stating that the said project did not conform to the stipulations of the said section. 3. On the other hand the assessee took two blocks separately viz., Mayflower and Cassia of the above macro project and claimed benefits of deduction under Section 80-IB of the Act in respect of the said two blocks, claiming them to be separate projects, as only the said two blocks could fulfil the requirements prescribed under Section 80-IB of the Act. 4. As could be seen, the project by name Brigade Millennium as a whole does not qualify for deduction under Section 80-IB of the Act. Hence, the assessing officer disallowed the claim of deduction under Section 80IB for the whole project. 5. The Commissioner (Appeals) erred in categorizing two bits of the projects viz., Mayflower and Cassia, that were mere blocks of the macro project, as individual projects and allowed deduction under Section 80IB for the said two blocks. The bits and parts cannot be considered as projects even in terms of the approval sanctioned by the BDA to promote housing. The stipulati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....002, by the BDA had approved the development and construction of entire complex of 22 acres and 19 guntas as one single group housing project. The assessee cannot now turn around and claim, merely on the basis of having obtained two separate plan sanction letters from the BDA for construction of Block A and Block C that the Mayflower and Cassia blocks can now metamorphosis into two separate projects within the purview of the provisions of Section 80IB(10) of the Income Tax Act. The learned departmental Representative therefore contended that the order of the learned Commissioner (Appeals) has to be reversed and that of the assessing officer has to be upheld. 4. On the other hand, learned Counsel for the assessee submitted that the assessing officer himself calls the approval from the BDA as an approval for the development plan. The said work order of the BDA was a concept plan approval for independent projects comprising of residential projects, row houses, school, convention centre and a club. Each of the said projects required an independent plan approval and sanctions for construction and completion apart from permissions and approval from various other regulatory bodies and Go....
X X X X Extracts X X X X
X X X X Extracts X X X X
....UD/341/MNX/95, dated 17-11-1995. This document is found at pp. 29-30 of the paper book. The assessee had clearly identified and demarcated land in respect of each project within Brigade Millennium independently. From the facts submitted by. Both the revenue and the assessee, following facts emerge : (i) Approval for group housing project was secured from BDA on 24-5-2002. (ii) Plan approval for construction from BDA was obtained on 14-2-2003, and 20-6-2003, for blocks C and A respectively. (iii) Commencement certificates had been issued by the authorities. (iv) The assessee obtained clearance from BWSSB for block A on 17-2-2004, and block C on 18-8-2005. (v) The assessee obtained permission from BESCOM for block A on 18-6-2003, and block C on 13-1-2005. (vi) The assessee also obtained clearance from the Fire Service department for block A on 12-3-2004, and block C on 13-1-2006. 5.1 From the facts it transpires that the authorities like BESCOM, BWSSB and Fire Service department duly inspected the plot and sanctioned plans for each of the blocks separately, after satisfying themselves. Further, it is seen that the group housing approval was a master plan. It was an appro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of other units viz. Magnolia, Jacaranda and Laburnum the assessee did not avail or claim the benefit under Section 80-IB. The learned Commissioner (Appeals), after having considered the facts in detail, is justified in concluding that Mayflower and Cassia are independent projects for the purposes of Section 80-IB. Further, profits from the units will have to be arrived, based on the method of accounting employed. Accounting principles would mandate recognition of profits from each unit separately. It is with reference to such profits that the deduction under Section 80-IB would be allowed. The manner of accounting for profits would also support a conclusion that the deduction under Section 80-IB is to be computed qua each residential unit. 6. The cardinal rule for interpretation of any provision relating to exemption, allowance, deduction, rebate or relief is that they should be interpreted liberally and broadly so as to advance the object sought to be achieved and not frustrate it. 6.1 In the case of Union of India and Ors. V. Wood Papers Ltd. And Anr. AIR 1991 SC 2049 the Supreme Court, in the context of interpreting exemption provisions held as under: Literally exemption is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve to be restricted to the extent of non-compliance of the provisions. This rule of proportionality is well-founded in the income-tax law and is recognized under various provisions of the Act. 6.4 The Chennai Bench of the Tribunal in the case of Arun Excello Foundations (P) Ltd. V. Asstt. CIT (2007) 108 TTJ (Chennai) 71 held as follows: The learned Authorized Representative of the assessee has already raised alternative plea in this regard that the deduction under Section 80-IB(10) on the residential units constructed by the assessee be given on pro rata basis. Here, we agree with the plea taken by the assessee and accordingly, we direct the assessing officer to allow the claim of the assessee on the residential units constructed on pro rata basis. 6.5 The Kolkata Bench of the Tribunal, in the case of Asstt. CIT v. Bengal Ambuja Housing Development Ltd. (2007) 39-D BCAJ 546 , was faced with a case involving a project consisting of 26 residential units wherein the individual flat sizes varied between 800 to 3,000 sq. ft. Deduction under Section 80-IB(10) was claimed with reference to profit attributable to the built-up area, which was occupied by the residential units having ind....