TaxTMI 
TaxTMI 
TaxTMI 
2013 (6) TMI 690
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....vant :- "3. That in the month of September 2010, we decided to shift the accounts office of the said partnership firm to our registered office i.e. 98/2 Guruvihar, Tarangan Apartments, Bhosari, Pune 411 039. 4. That in the last week of September 2010 or thereabout, our tax consultant handed over to me the appellate order for the A.Y. 2006-07 passed by the learned CIT(A)-V, Pune in the case of our said partnership firm and advised that the further appeal was to be filed before the Income Tax Appellate Tribunal. However during that period since the shifting work of our accounts office was in progress, through oversight mistake and inadvertence, the Income Tax File of our said partnership firm was misplaced by me. Being not much educated, I did not realize the importance of the said file and unfortunately I completely failed to remember that the appeal was to be filed before the Income Tax Appellate Tribunal, Pune. 5. That on 4th February 2011, when our firm received a show cause notice from the office of the learned Income Tax Officer, Ward 8 (3) Pune regarding penalty proceedings u/s 271(1)(c) of the I.T. Act 1961 for the A.Y. 2006-07, we the partners were appraised by our tax....
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.... to be preferred and a liberal approach in such situations is also justified. In this background, we may now examine the present petition of the assessee for condonation of delay in filing of the appeal before the Tribunal. The delay in filing of the appeal is of 114 days. The assessee explained that it was in the month of September, 2010 that the order of the CIT(A) was handed over to it by the tax consultant and in the same month assessee also decided to shift its accounts office to another premises. Due to the shifting work of the accounts office and oversight by the concerned partner, it appears that the assessee could not file its appeal in time. It was only in February 2011 when assessee received a show-cause notice from the Assessing Officer regarding the penalty proceedings, the non-filing of appeal came to light and it is submitted that thereafter the appeal was immediately filed before the Tribunal on 09.02.2011. The concerned partner has also 4 averred the same on an affidavit. In our considered opinion, the facts of the case do not suggest that there was any mala-fide intention or that the reasons explained are only a device to cover any ulterior purpose. It may a....
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....to one family i.e. one each in the name of both the spouses. The Assessing Officer found that the two units i.e. Bunglow Nos. G1 & G2 individually admeasured 1286 sq.ft. and 508 sq.ft. respectively, and that the two were amalgamated into one Bunglow used by one family. Thus, the Assessing Officer concluded that there was only one Bunglow admeasuring 1794 sq.ft. i.e. 1286 sq.ft. + 508 sq.ft.. The Assessing Officer also noted that there was a projection of 116 sq.ft. in Bunglow G1 and 655 sq.ft. projection in Bunglow G2 and if the aforesaid areas were considered, the total built-up area of the amalgamated Bunglow aggregated to 1975 sq.ft. 7. The Assessing Officer noted that in terms of clause (c) of Section 80-IB(10) of the Act the built-up area of each residential unit in the cities other then Delhi and Mumbai is not to exceed 1500 sq.ft. in order to be eligible for benefit of Section 80-IB(10) of the Act. Since the built-up area of the amalgamated Bunglow exceeded 1500 sq.ft., it was violative of clause (c) of Section 80-IB(10) of the Act and accordingly the deduction under Section 80-IB(10) of the Act of the entire project was disallowed. The CIT(A) has also affirmed the stand of....
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.... deduction should be allowed. The Revenue has opposed the said plea on the ground that the assessee is not entitled to a proportionate deduction under Section 80-IB(10) of the Act. 21. On this aspect, we find that the Mumbai Bench of the Tribunal in the case of M/s Ekta Housing Pvt. Ltd., ITA No.3649/Mum/2009 dated 20.05.2011 has upheld the plea of the assessee for a proportionate deduction under Section 80-IB(10) of the Act where some of the residential units in the 7 project violated the condition contained in Section 80-IB(10)(c) of the Act. The Mumbai Bench after noticing the precedents in the case of - i) ITO vs. Air Developers, 25 DTR 287 (Nag.); ii) DCIT vs. Brigade Enterprises Pvt. Ltd., 14 DTR 371 (Bang.); iii) ACIT vs. Sheth Developers P. Ltd., 33 SOT 277 (Mum.); iv) Bengal Ambuja Housing Development Ltd. vs. DCIT; v) SJR Builders vs. ACIT, 3 ITR 569 (Mum.) held that the assessee would not loose the exemption under Section 80-IB(10) in entirety where some of the residential units wings had a 'built-up area' in excess of the limit prescribed in clause (c) of Section 80-IB(10) but, it would be entitled to proportionate deduction under Section 80-IB(10) of the Act wit....
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.....04.2005. Therefore, it was not open to the Tribunal to hold that prior to 01.04.2005, projects having commercial user upto 10% of the plot area alone would be eligible for Section 80-IB(10) deduction. 28. In the present case, though the commercial user is more than 10% of the plot area, the Tribunal has allowed Section 80-IB(10) deduction in respect of 15 residential 8 buildings on the ground that the profits from these exclusively residential buildings could be determined on stand along basis. In our opinion, that would not be proper, because Section 80- IB(10) allows deduction to the entire project approved by the local authority and not to a part of the project. If the conditions set out in Section 80-IB(10) are satisfied, then deduction is allowable on the entire project approved by the local authority and there is no question of allowing deduction to part of the project. In the present case, the commercial user is allowed in accordance with the DC Rules and hence the assessee was entitled to Section 80-IB(10) deduction on the entire project approved by the local authority. However, the assessee has not challenged the decision of the Tribunal in restricting the deduction to ....
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....the Revenue, similar to what has been argued before us, to the effect that in the absence of any contemplation under Section 80-IB(10) of the Act for proportionate relief on partial compliance, section cannot be interpreted to granted pro rata relief. The aforesaid argument of the Revenue has been negated by the Hon'ble Madras High Court and therefore the claim of the assessee for proportionate deduction under Section 80-IB(10) of the Act cannot be denied. 12. Thus, on the aforesaid aspect, assessee succeeds and we direct the Assessing Officer to re-compute the deduction under Section 80-IB(10) of the Act in relation to the 'Lakshdweep' project by limiting the denial only to the profits in respect of Bunglow G1 & G2. For balance of the residential units, assessee shall be allowed deduction under Section 80-IB(10) of the Act. 13. Now, we may take-up the claim of the assessee for deduction in respect of 'Samarth Nagari' project. The Assessing Officer has discussed the objections in para 5.2 of the assessment order. As per the discussion, it transpires that the built-up area of two units exceeded 1500 sq.ft. after including the areas of Terrace and Canopy. As per the assessee, the b....
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....gari' project is that some of the flats constructed by the assessee do not comply with the condition prescribed in clause (c) of Section 80-IB(10) of the Act. As per the Assessing Officer, the built-up area of the few units exceeded the limit prescribed in clause (c) of Section 80-IB(10) of the Act. The Assessing Officer has differed with the assessee on the calculation of built-up area of such units. As per the Assessing Officer, the area covered by the terrace and canopy was 11 includible while calculating the built-up area of the residential units. The Assessing Officer as well as the CIT(A) have referred to the definition of 'builtup area' contained in Section 80-IB(14)(a) of the Act for the said purpose. Ostensibly, the definition of the expression 'built-up area' including the areas of projections and balconies was inserted by the Finance (No.2) Act, 2004 w.e.f. 01.04.2005 whereas the project of the assessee commenced prior to 01.04.2005. In an earlier decision, the Pune Bench of the Tribunal in the case of D.S. Kulkarni Developers Ltd. (supra) relied upon the decision of the Mumbai Bench of the Tribunal in the case of Haware Construction (P) Ltd. vs. ITO, 64 DTR (Mumbai) (Tr....
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....gement of the Hon'ble Gujarat High Court in the case of ITO vs. Keval Construction (2013) 33 taxmann.com 277 (Gujarat) wherein an identical claim of the assessee has been upheld. As per the learned counsel, the disallowance under Section 40(a)(ia) of the Act would qualify for deduction under Section 80-IB(10) of the Act as such disallowance merely increases the ultimate profits of the assessee from business. 21. On the other hand, the learned Departmental Representative has defended the order of the lower authorities and placed reliance on the same. 22. In our considered opinion, the stand of the assessee is fully covered by the judgement of the Hon'ble Gujarat High Court in the case of Keval Construction (supra). The following discussion in the order of the Hon'ble Gujarat High Court is worthy at notice :- "Having heard counsel on both the question today in this appeal, we find no error in the Tribunal's ultimate conclusion. Even if a certain expenditure which was incurred by the assessee for the purpose of developing housing project was not allowable by virtue of section 40(a)(ia) of 13 the Act, since the assessee had not deducted the tax at source as required under law, it c....