TaxTMI 
TaxTMI 
TaxTMI 
2013 (8) TMI 596
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....ted on 20.02.2006 by CIDCO Ltd. The said commencement certificate does not contain any approval for the construction of commercial establishments. Subsequently, due to the peculiar location of plot no. 37, Sector 5, Kharghar, Navi Mumbai, the assessee became entitled for additional FSI on payment of certain premium. Accordingly, apart form the residential building already sanctioned, a separate commercial building having built up area of 745.214 sq.mtrs was approved for construction by CIDCO on 18.10.2006 As the assessee did not intend to develop the building having commercial establishment, the development right in respect of the said commercial building was sold by the assessee to M/s Pyramid Developers under registered development agreement dt. 20.03.2009 for the consideration of Rs. 2,51,00,000/-. The profit from sale of development rights fell in asst. yr. 2009-10 i.e. the previous year relevant to the year under appeal and accordingly the profit on sale of such development rights amounting to Rs. 1,74,30,346/- was offered to tax in A.Y. 2009-10. The same has been accepted by the assessing officer. 2.1 The position of sanction/completion of the two separate buildings are as p....
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....ct developed by the appellant at Kharghar, Navi Mumbai. 2. The learned CIT(A) erred in not appreciating that the housing project developed by the appellant in the name of Eden Garden at Kharghar, Navi Mumbai comprised of only residential units and therefore deduction u/s 80IB (10) amounting to Rs. 21,47,31,259/- was allowable. 3. The learned CIT(A) erred in holding that the appellant had intentionally circumvented the provisions of clause (d) of section 80IB(10) when in reality this was not the case. 4. The learned CIT(A) erred in upholding the disallowance of deduction u/s 80IB(10) amounting to Rs. 21,47,31,259/- in respect of the residential housing project "Eden Garden" at Kharghar, Navi Mumbai." 4. We have heard Ld. Counsel for assessee and Ld. DR and perused the paper book placed on record. There is no dispute with the reference to the facts as stated above and also to the fact that Assessing Officer allowed deduction u/s 80IB in earlier two years to the assessee on the same project. The dispute therefore confines to the issue whether the 'project' developed by the assessee includes the commercial project, later approved by CIDCO on the said plot of land. 5. Hon'ble Bomba....
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....a 'housing project' u under section 80-IB(10). Whether construction of building 'E' is an independent housing project or extension of housing project already existing on plot in question. When the plans for A, B, C and D buildings were approved during the period from 1993 to 1996, construction of building 'E' was not even contemplated on the plot in question. It is only in the year 2001 when the status of the land was converted from 'surplus vacant land' into 'within the ceiling limit land' by the State Government that an additional building could be constructed on the plot in question and, accordingly, building plan for construction of building 'E' was submitted and the same was approved by the local authority on 11.10.2002. The fact that the local authority, namely, the Municipal Corporation approved the building plan for building 'E' on the condition that all the objections raised in the intimation dated 12.05.1993 relating to the earlier housing project on the same plot of land would be applicable and should be complied with, cannot be a ground to hold that building 'E' is extension of the earlier housing project because the earlier housing project was completed prior to 1.1....
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....using project have also been made applicable to the housing project in question. Expression 'plot of land' in section 80IB(10)(b) does not mean vacant plot of land. The revenue contended that there are five buildings (A, B, C, D and E) on a plot admeasuring 2.36 acres; hence, the proportionate area for each building would be less than one acre and, therefore, the benefit of section 80IB(10) could not be granted in respect of the housing project consisting of building 'E'. (Para 23) Section 80IB(10) (b) specifies the size of the plot of land but not the size of the housing project. The size of the plot of land, as per section 80IB(10) must have minimum area of one acre. The section does not lay down that the plot having minimum area of one acre must be a vacant plot. (Para 24) The object of section 80IB(10) in granting deduction equal to one hundred per cent of the profits of an undertaking arising from developing and constructing a housing project is with a view to boost the stock of houses for lower and middle income groups subject to fulfilling the specified conditions. The fact that the maximum size of the residential unit in a housing project situated within city of Mumbai a....
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....because, in the city of Mumbai where there is acute space crunch, it is difficult to find a vacant plot having minimum area of one acre and even if few such plots are existing it cannot be said that section 80IB(10) deduction was intended to give benefit only to the undertakings who construct housing projects on those few plots. Therefore, it is clear that on a plot of land having minimum area of one acre, there can be any number of housing projects and so long as those housing projects are approved by the local authority and fulfil conditions set out under section 80IB(10), deduction thereunder cannot be denied to all those housing projects. Section 80IB(10) while specifying the size of plot of the land, does not specify the size or the number of housing projects that are required to be undertaken on a plot having minimum area of one acre. As a result, under section 80IB(10) there is significance of the size of the plot of land and, therefore, the assessee subject to fulfilling some conditions becomes entitled to section 80IB(10) deduction on construction of a housing project on a plot having area of one acre, irrespective of the fact that there exist other housing projects or not....
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....egrated project. The commercial area also slightly exceeded by 10% and, therefore, the assessee failed to fulfil the conditions laid down u/s.80IB(10). For coming to this conclusion, he relied upon the decision passed in the case of M/s. Laukik Developers vs. DCIT passed by ITAT, Mumbai. 7.1 From the records and the findings given by the CIT(Appeals), it is amply clear that the plot admeasuring 777 sq. mtrs. was sold to an another concern 'M/s. Thakker Enterprises', wherein the development rights were given to built commercial units as was required to be done by the assessee in terms of allotment given by CIDCO Ltd. Once the assessee has transferred the development right to a different concern on a sale consideration of Rs. 1,90,36,500/- and same has been offered for tax in the Assessment Year 2004-05, we have no hesitation in holding that the said area of 777 sq. mtrs. has to be segregated from the entire plot area of 7770 sq. mtrs for the purpose of deduction u/s.80IB(10). Firstly, no claim for deduction has been made by the assessee on the income from this commercial unit and secondly, it has already been taxed. Once the said commercial unit which was to be developed by 'M/s. T....
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....t permitted under the Development Control Rules/ Regulations framed by the respective local authority. (b) In such a case, where the commercial user permitted by the local authority is within the limits prescribed under the Development Control Rules/Regulation, the deduction under section 80-IB(10) up to March 31, 2005 would be allowable irrespective of the fact that the project is approved as "housing project" or "residential plus commercial". (c) In the absence of any provisions under the Income-tax Act, the Tribunal was not justified in holding that up to March 31, 2005 deduction under section 80-IB(10) would be allowable to projects approved by the local authority having residential building with commercial user up to 10 per cent. of the total built-up area of the plot. (d) Since the deduction under section 80-IB(10) is on the profits derived from the housing projects approved by the local authority as a whole, the Tribunal was not justified in restricting the section 80- IB(10) deduction only to a part of the project. However, in the present case, since the assessee has accepted the decision of the Tribunal in allowing section 80-IB(10) deduction to a part of the project, w....
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....ct by inserting the sub-s. 80-IB(10)(d) w.e.f. 1st April, 2005. The legislature nowhere provided the definition of a housing 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 ? 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 ass....
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....as of the view 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 accepted. This order of the Tribunal was taken up in appeal before the....
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....In the result, the assessee ' s claims for deduction under s. 80-IB(10) are accepted and the appeal is to be treated as allowed. The AO is directed to allow the deduction as claimed by the assessee in the light of the above discussions. Thus, from the above it is clear that legislature has not provided any definition of the housing project and, therefore, the definition has to be construed by making reference to the dictionary and as long as the segregated blocks are being eligible for deduction u/s.80IB(10), then same shall be construed as eligible housing project and deduction has to be allowed accordingly. In fact, in this decision the Tribunal has referred to the decision of the Calcutta Bench of the Tribunal in the case of Bengal Ambuja Housing Development Ltd. vs. DCIT. In that case the assessee had undertaken construction of a housing project Eastern Metropolitan Bye-Pass, which was also known as Udayan. This project, inter alia, included Udita-III housing project which was under construction during the relevant year and such construction was being made on land measuring 4.2 acres. The said housing project consisted of 251 residential units and the individual flat size vari....