TaxTMI 
TaxTMI 
2015 (6) TMI 286
X X X X Extracts X X X X
X X X X Extracts X X X X
....ovision for allowing such partial deduction in terms of provisions of section 80IB(10) of the Act. 2. On the facts and in the circumstances of the case, and in law, the CIT (A) is not justified in accepting the assessee's claim to allow piece-meal deduction, when the provisions of section 80IB (10) of the Act, categorically speaks of lump-sum deduction for entire profits derived from such Housing projects, subject to fulfillment of all the conditions prescribed u/s 80IB (10) (a) to 80IB (10) (f) of the Act. 3. On the facts and in the circumstances of the case, and in law, the CIT- (A), is not justified in accepting the assessee's claim, when provisions of section 80IB (10) (c) clearly lays down upper limit of each residential unit, and no such exclusion is contemplated. 4. The appellant prays that the order of the Commissioner of Income-tax (Appeals), Kolhapur be vacated and that of the Assessing Officer be restored. 5. The appellant craves leave to add, alter, amend, raise, any of the above, or any other grounds raised. 4. The assessee in CO No.16/PN/2014 has raised the following grounds of objections:- 1. In the facts and circumstances of the case and in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....per plan approved by the local authority and the same was constructed in violation of the conditions laid down under section 80IB(10) of the Act. The assessee in reply to the show-cause issued by the Assessing Officer in this regard pointed out that the building was constructed as per revised sanctioned plans and hence, had complied with the conditions laid down under section 80IB(10) of the Act. In respect of two units i.e. D-3 and D-4, the claim of the assessee was that it had constructed independent units which had been amalgamated by the buyer and hence, the assessee was entitled to the claim of deduction under section 80IB(10) of the Act in entirety. In the alternate, the assessee pointed out that pro-rata deduction under section 80IB(10) of the Act be allowed for 51 units which complied with the requirements of the Act. The Assessing Officer rejecting the same disallowed the deduction claimed under section 80IB(10) of the Act in entirety. 7. The CIT(A) noted that the assessee had violated the provisions of the section 80IB(10) (c) of the Act in respect of the two units i.e. D-3 and D-4 constructed in the project. However, reliance was placed on series of the decisions of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be allowed to the assessee in respect of the balance eligible units contained in the project. We find the similar issue arose before the Pune Bench of the Tribunal in the case of Pharande Developers (supra) and in turn reliance was placed on the ratio laid down by the Pune Bench of the Tribunal in the case of D.S. Kulkarni Developers Ltd. Vs. ACIT in ITA Nos. 1428 & 1429/PN/2008, order dated 08.08.2012 and also the subsequent judgment of the Hon'ble Madras High Court in the case of Viswas Promoters (P) Ltd. (2013) 29 taxman.com 19 (Madras) and it was held as under:- "10. On this aspect, we have considered the plea of the assessee in the light of the precedents. A similar situation has been considered by this Bench in the case of D.S. Kulkarni Developers Ltd. (supra) wherein the following discussion is relevant :- "20. In this background, the alternative plea of the assessee springs up. The plea is that the deduction under Section 80-IB(10) be denied only with respect to the units which do not conform to the condition contained in Section 80-IB(10)(c) and for the balance eligible residential units, the deduction should be allowed. The Revenue has opposed the said plea on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....local authority approved a plan as a housing project or a residential cum commercial project, the assessee would be entitled to claim for deduction under Section 80-IB(10) even if the project had commercial element in excess of 10%. At paras 27 and 28, the Court observed as follows :- "27. The question then to be considered is, whether the Special Bench of the Tribunal was justified in holding that the projects having commercial area upto 10% of the built-up area of the plot are eligible for deduction under Section 80-IB(10) on the entire project upto 01.04.2005. Once the basic argument of the revenue that the housing projects with commercial user are not entitled to Section 80-IB(10) deduction is rejected, then in the absence of any restriction imposed under the Act, it was not open to the Tribunal to hold that the projects approved by the local authorities having residential buildings with commercial user upto 10% of the plot area would alone be entitled to deduction under Section 80-IB(10). As noted earlier, restriction regarding commercial user has been imposed for the first time by introducing clause (d) to Section 80-IB(10) with effect from 01.04.2005. Therefore, it was no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee has violated the condition under Section 80-IB(10)(c) in relation to the flats on the 11th floor, the deduction under Section 80-IB(10) cannot be denied in its entirety, but, the denial shall be limited to the profits in respect of the flats on the 11th floor alone. For the balance of the residential units, the plea of the assessee for deduction under Section 80-IB(10) of the Act is justified, and the assessee succeeds on this aspect." 11. Following the aforesaid precedent, we hold that merely because assessee violated the condition prescribed under Section 80-IB(10)(c) of the Act in relation to the amalgamated Bunglow G1 & G2, the deduction under Section 80-IB(10) of the Act cannot be denied in its entirety. In other words, the denial of deduction shall be limited to the profits in respect of the amalgamated Bunglow G1 & G2 alone. For balance of the residential units, which complied with the requirements of clause (c) of Section 80-IB(10) of the Act, assessee shall be eligible for deduction. The Hon'ble Madras High Court in the case of Arun Excello Foundations (P) Ltd. vs. CIT (2013) 29 taxmann.com 149 (Madras) considered an argument on behalf of the Revenue, simila....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Ld. AR for the assessee pointed out that after passing of the appellate order, the Commissioner of Income Tax Administration who was earlier the CIT(A) in the case of the assessee, had asked the Assessing Officer to file the appeal against his own order. Where the CIT had to apply his mind independently and the exercise of the jurisdiction in the case of the assessee, as per the Ld. AR for the assessee, was not correct and was a case of judicial impropriety. The Ld. AR for the assessee referred to the definition of the word appeal by Law Lexicon. Further reliance was placed on the ratio laid down by the Hon'ble Allahabad High Court in Writ - C No. - 24629 of 2012 in Mohd. Chand And Another Vs. State of U.P. And Others and also upon Hon'ble Supreme Court in Ashok Kumar Yadav And Others Vs. State of Haryana And Others reported in 1985-(SC2)-GJX-0211-SC judgment dated 10.05.1985, copies of which were filed on record. 14. The Ld. DR for the Revenue on the other hand pointed out that the appellate authority had acted judicially in deciding the appeal but when he was the Commissioner of Income Tax Administration, he further acted judicially and proposed the filing of the app....