AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 424
X X X X Extracts X X X X
X X X X Extracts X X X X
....re residential buildings and J&K are commercial buildings/ shops. 2. In the residential buildings from A to H, part of building D and full of building F are non-80-IB residential flat where the build-up area of the flats are more than 1500 sq. ft. A certificate in this regard of an Architect Shri Jagdish P Deshpande has been filed by the assessee which is annexed as Annexure-I of this order. 3. The total residential built-up area is 4,35,295 sq. ft. out of which the total built-up area in respect of building F and part of building D which is non-80IB(10) is 51,302 sq. ft. 4. The other buildings A, B, C, E, G & H and part of building D have put together a built-up area of 383993 sq. ft. where the built-up-area of each flat is less than 1500 sq. ft. 5. The buildings J & K named as Sant Nagar shops are exclusive commercial buildings which has total built-up area of 12,325 sq. ft. 6. The total residential built-up area of the project "Treasure Park" is 97.25% and the built-up area of commercial/shop area is 2.75%. However, the commercial built-up area totals to 12325 sqft. The aforesaid details in the shape of statement of summary sheet of total project has been given by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee has claimed deduction u/s.80IB(10) in respect of the project which is residential and commercial project and where the residential units in one full Building and also in part of one Building have built up area of more than 1500 sq.ft. Further, there are 2 exclusive commercial/shop building with total built up area of 12,325 sq.ft. Since the project "Treasure Park" is one single project which comprises of buildings having residential units having built up area in excess of 1500 sq.ft and also has commercial shops and showrooms named as "Sant Nagar shops" having built up area of 12,325 sq.ft., therefore, there is non-conformity in respect of the provisions of section 80IB(10)(c) and 80IB(10)(d) of the Act. He, therefore, asked the assessee to explain as to why the deduction claimed u/s.80IB(10) should not be disallowed. 5. It was submitted by the assessee that it has claimed deduction in respect of buildings A, B,C, D (Part) and E which complied with the conditions laid down in section 80IB(10) of the Act. It was submitted that even if all the buildings are considered as part of the entire housing project, then also, all the conditions of the section are complied with e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Therefore, the project clearly violates the condition brought out in section 80IB(10). Rejecting the various submissions given by the assessee and distinguishing the various decisions cited before him, the AO held that the assessee is not eligible for the claim of deduction u/s.80IB(10) amounting to Rs. 9,51,90,486/-. He accordingly disallowed the same and added to the total income of the assessee. 9. Before CIT(A) it was submitted that the firm constructed a project "Treasure Park" where there are total 10 buildings A to H and J and K. The buildings A to H were residential buildings and J and K were commercial buildings and the claim of deduction u/s.80IB(10) was in respect of the profits out of the said project. The assessee submitted that during assessment proceedings it was submitted that buildings J and K, the two commercial buildings were not part of the project and that the built up area of all the units of building F exceeded 1500 sq.ft. and few units in building D were combined by the customers and hence in order to avoid litigation the assessee accepted such units/buildings from the project for claiming the deduction u/s.80IB(10). Thus, the buildings J and K which includ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rgued that in respect of the building F the deduction had not been claimed on the ground that the built up area of all the units exceeded 1500 sq.ft. which was based on the certificate of the architect Shri Jagsish P. Deshpande who had calculated the built up area as per the definition given in section 80IB(14)(a) whereby the projection/terrace and balconies are to be included in the built up area. It was emphasized that the definition of built up area was introduced w.e.f. 01-04-2005 and for the earlier period there is no definition of built up area and hence for the projects started prior to 01-04-2005 the dentition of built up area as per provisions of section 80IB(14)(a) is not applicable. 12. It was argued that for the project started prior to 01-04-2005, the built up area has to be calculated as per the definition provided in the Development Control Rules of PMC or the DC Rules whereby the area covered by terraces and balconies are not to be included in built up area. The assessee filed a revised certificate showing calculation of the area of the residential units from the architect Shri Jagdish Deshpande as per the definition given in DC Rules. It was accordingly contended ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Brahma Associates relied upon by the assessee is not acceptable to the department since an appeal has been filed before the Hon'ble Supreme Court. 17. After considering the remand report of the AO and the counter comments of the assessee to such remand report, the Ld.CIT(A) allowed the claim of deduction u/s.80IB(10) made by the assessee on the entire housing project. While doing so, he held that the housing project in the present case started prior to 01-04-2005, i.e. vide commencement certificate dated 17-12-2004. Therefore, the contention raised by the assessee as per the definition provided in the DC Rules of the PMC the areas covered by terraces and balconies are not to be included in built up area which is supported by various decisions of the Tribunal has to be accepted. He observed that the Tribunal in the case of ITO Vs. Prime Properties and Brahma Builders has held that for the projects started prior to 01-04-2005 the areas covered by terraces and balconies are to be excluded while computing the built up area of the residential units. Once the terraces and balconies are excluded the built up area of none of the units of building F exceed 1500 sq.ft. Therefore, the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....equirement necessary internal changes were made through a labour contractor. He observed that the 4 flats which have been combined by the customers of the assessee have been sanctioned as separate flats by the PMC and the completion/occupancy certificate issued shows the flats to be independent. The assessee had entered into 2 separate agreements with the customers and the entry is separate so as the kitchen, electricity meters, corporation tax receipts etc. The materials brought on record clearly indicate that the assessee had constructed separate flats and it was the customers who had combined them which is evident from the declaration of both the customers who had purchased the 2 units and made necessary internal changes as per their requirement from a labour contractor. Relying on various decisions he held that the benefit cannot be denied since the residential units were sold to 4 different individuals. The individual ownership is legally enforceable, individuality of ownership exists before different authorities/organizations like PMC for corporation tax, MSEB for electricity meters and housing society for membership etc. Relying on various decision he held that the assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erties vide ITA No.237/2013 order dated 27-07-2015 and the decision of Hon'ble Bombay High Court in the case of CIT Vs. Ankit Enterprises vide ITA (LOD) 1795/2012 order dated 18-02-2013 submitted that in the aforementioned cases all the issues raised by the revenue have been answered. Therefore, this being a covered matter in favour of the assessee the order of the CIT(A) be upheld and the grounds raised by the revenue be dismissed. 23. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case has constructed a housing project at Survey No.61, Sahakar Nagar, Pune which comprise of 10 buildings A,B,C,D,E,F,G, H, J &K. The buildings A to H are residential buildings and the buildings J &K are exclusively commercial buildings/shops. The total residential built up area of the project is 97.25% and that of the commercial/shop is 2.75% whose area totals to 12,325 sq.ft. We find the assessee in its return of income had claimed deduction only in respect of the residential units having built u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection of the AO that built up area of 4 flats after being combined exceeded 1500 sq.ft. in respect of building D, he held that the assessee has sold separate units to the respective customers where the built up area of each of the flat is less than 1500 sq.ft. and the customers after purchasing the flats have combined them and therefore the assessee cannot be denied the benefit of deduction u/s.80IB(10). 27. It is the grievance of the revenue that when the claim of deduction u/s.80IB(10) was not made for the entire project in the return of income filed and when the project has been approved as a residential cum commercial project, therefore, the assessee is not entitled to deduction u/s.80IB(10) and the CIT(A) was not justified in allowing the claim. 28. We do not find any merit in the above argument of the revenue. It has been held by the Hon'ble Bombay High Court in the case of CIT Vs. Pruthvi Brokers and Shareholders reported in 349 ITR 336 that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities but is also entitled to raise additional claims before them. The appellate authorities have the discretion to permit such additi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the flats of building F exceeded 1500 sq.ft. could not be controverted by the Ld. Departmental Representative. It is an admitted fact that the commencement certificate is dated 17- 12-2004 which is prior to 01-04-2005. The Hon'ble Bombay High Court had an occasion to decide the issue of built up area introduced by way of section 80IB(14)(a) w.e.f. 01-04-2005 in the case of Prime Properties (Supra) and held that the same is not applicable to housing projects approved prior to 01-04-205. The relevant observation of the Hon'ble High Court read as under : "2. This appeal was admitted on 14th January, 2013 on the following substantial questions of law : "(a) Whether on the facts and in the circumstances of the case and in law, the Tribunal did not err in holding that the clarification of the built up area introduced by way of section 80IB(14)(a) with effect from 01- 04-2005 can only be applied to projects which have been sanctioned after 01-04-2005? (b) Whether on the facts and in the circumstances of the case and in law, the order of the Tribunal passed without appreciating and evaluating all the relevant facts and evidences including circumstantial evidences, not perverse?" ....