AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (4) TMI 1004
X X X X Extracts X X X X
X X X X Extracts X X X X
....ication was moved on its behalf. We therefore proceed to dispose of the appeal ex parte qua the Assessee. 3. The facts as culled out from the material on record are as under. 4. Assessee is a partnership firm engaged in the business of developing and building housing project. Assessee filed its return of income for A.Y. 2006-07. Assessment was thereafter framed under section 143(3) vide order dated 24.12.2008 and the total income was determined at Rs. 13,80,630/-. Aggrieved by the order of A.O, Assessee preferred the appeal before CIT(A). CIT(A) vide order dated 01.07.2010 partly allowed the appeal of the Assessee. Aggrieved by the order of CIT(A), the Revenue is now in appeal before us and has raised the following ground:- 1. On the fac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onstruction agreement with the unit holders, Assessee had never sold the house to the unit holders as there was no registered document in respect thereof. A.O. also noticed that Assessee had carried out construction activity on the land without fully utilizing the permissible Floor Space Index (FSI). He also noticed that the part of un-utilized FSI relating to the approved units were not constructed or developed but were sold directly as rights attached with the sale of plot of land. He also noticed that Assessee had total plot area of 8900.32 sq. mtrs of land for development but Assessee had constructed the housing project by deploying construction of only 4067.58 sq. mtrs of FSI. In view of the aforesaid facts, A.O. was of the view that A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntical matter the AO has examined the decision in the case of M/s. Shakti Corporation and has mentioned that risks and costs are borne by the appellant. As the facts during the current year are identical, the appellant is entitled to deduction u/s. 801B(10). Ground No. 1 is allowed. 6. Aggrieved by the order of CIT(A), the Revenue is now in appeal before us . 7. Before us the ld. D.R. submitted that in the present case, the A.O. apart from denying the deduction for the reason that Assessee was not the owner of land had also denied the deduction to Assessee as the Assessee had not fully utilized the FSI. He further submitted that in a recent decision of jurisdictional High Court in the case of Moon Developers (Tax Appeal No. 549 of 2008 an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ilize 100% of the FSI available. The question however is, can an undertaking utilize only a small portion of the available area for construction, sell the property leaving ample scope for the purchaser to carry on further construction on his own and claim full deduction under section 80IB(10) of the Act on the profit earned on sale of the property? If this concept is accepted, in a given case, an assessee may put up construction of only 100 sq. ft. on the entire area of one acre of plot and sell the same to a single purchaser and claim full deduction on the profit arising out of such sale under section 80IB(10) of the Act. Surely, this cannot be stated to be development of a housing project qualifying for deduction under section 80IB(10) of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uction under section 80IB(10) of the Act cannot be declined, cannot be accepted. As noted earlier, in case of M/s. Moon Star Developers and many other assesses, such full utilization of the ground floor area available for construction resulted into barely 20% to 25% of the FSI being used, remaining more than 75% being left unused. 33. What is available for deduction under section 80IB(10) of the Act is the profit of an undertaking derived from developing and building a housing project. Mere sale of open land or unused FSI as part of the housing project where utilization of the FSI is way short of permissible limits cannot be said to have been derived from such housing project. 9. In the present case, as noted from the order of CIT(A), the....