AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (3) TMI 535
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....and Vidhi Complex Comprising Building No.11 to 14. In respect of the project Amurt Dham the assessee did not claim deduction under section 80 IB(10) of the Income Tax Act 1961 (the Act). For the Project Vidhi Complex the assessee claimed deduction under section 80 IB(10) of the Act. The AO denied the deduction on 3 counts , viz, (i) the plot area was less than one acre at 3461.68 sq mtr as against 4746.26 sq mtr as claimed by the assessee, (ii) the project comprises commercial area exceeding 2000 sq ft and (iii) the project failed to be completed before deadline date of 31/03/08. On the first count, the AO's finding was that, after surrendering the plot for DP road, the net plot area remained with the appellant stood at 3461.68 sq. mtr which was less than one acre and , therefore, the AO held the project to be failed to satisfy one of the conditions. On the second count, the AO found the project to have 778.95 sq mtr of commercial area thereby exceeding the permissible commercial area of 2000 sq ft and , therefore, the AO came to the conclusion that, the appellant assessee failed to qualify for the benefit of deduction. On the third count, the AO found the plan was approved before....
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....ction u/s.80-IB(10) of the Act. It was the further submission of the Assessee that existence of shops in certain buildings of the same sanctioned layout but not forming part of the housing project for which deduction u/s.80-IB(10) of the Act is claimed will not in any manner vitiate the claim for deduction u/s.80-IB(10) of the Act. In this regard the Assessee relied on the decision of the Hon'ble Mumbai Bench of the Tribunal in the case of ITAT Mumbai in the case of Saroj Sales Organization Vs. ITO 115 TTJ 485 (mum). The case of Saroj Sales Organization (supra) was a case of a Builder where there were two projects being constructed by name Nisarg and Breezy Corner. For AY 05-06, The Assessee claimed deduction u/s.80-IB(10) of the Act on the profits of Nisarg Project. The AO treated both the projects as one project and found that in the project Breezy corner the built up area of some of flats were more than 1000 sq.ft. and he therefore held that the Assessee was not entitled to deduction u/s.80-IB(10) of the Act. The Tribunal held that the two projects were to be treated as different projects for applying the tests laid down in Sec.80-IB(10)(d) of the Act. 4. On this aspect there ....
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....of deduction u/s. 80 IB(10) at Rs. 34,57,156/- in respect of the project called 'Vidhi complex'. As stated in the assessment order, the appellant was engaged in the construction of two buildings known as 'Amurt Dham' and 'Vidhi Complex'. As per the appellant, 'Vidhi Complex' was a project, which was 80 IB(10) compliant. The project 'Amurt Dham', was considered to be 80 IB(10) non compliant. The appellant had, therefore claimed deduction u/s. 80 IB (10) only in respect of 'Vidhi Complex'. The project 'Vidhi Complex' was undoubtedly a 'housing project' of the appellant, which was being constructed on a part of land admeasuring 4746.26 sq. mtrs inclusive of DP road. After excluding the area occupied by the DP road, the net area of the plot was 3461.68 sq. mtrs only. This fact was confirmed by the partner of the firm as well as the architect, Mr. R.L. Modak. This clearly means that the project was being constructed on a plot of land which was less than one acre in area. The mandatory condition for a project to become eligible for deduction under section 80IB(10) is that the project should be constructed on a plot which is not less than one acre in area. Section 80 IB(10) clearly stipul....
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....ion is thereafter set off by an addition of equivalent area allowed by MNP. The net area of the plot after the deduction of the area for road set back has been shown at 3943.25 sq. metres. Thereafter there is a deduction of 591.49 sq. metres for recreation open space and 411 sq. metres for internal road . The net plot area is then shown at 2940.76 sq. metres. The area of 656.75 sq. metres, which was earlier deducted for road set back, is added and the total area plot is shown at 3597.51 sq. metres. It will be seen that the total plot area has been worked out by the MNP at 3597.51 sq.metres only after deducting 591.49 sq. metres for recreation open space. The recreation open space is however part of the plot and though for the purpose of municipal regulations, a portion of the plot has to be reserved as a recreation area but for the purpose of clause (b) of section 80IB(10), the recreation area has also to be considered as part of the plot only. There is no condition in the clause that recreation area has to be excluded while examining whether the plot is of the size of one acre or less. If the recreation area of 591.49 sq. metres is added to the total plot area of 3597.91 sq. metre....