TaxTMI 
TaxTMI 
2012 (12) TMI 1064
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....re of profit from the said firm has been claimed as exempt. Assessee also derived income from other source comprising of interest, dividend and compensation income etc. Assessee shown the business income from the proprietary concern namely M/s Ashish Developers at Rs. 76,94,360 and has claimed deduction under section 80IB(10) of the I.T. Act on the said income. 3. The proprietary concern of assessee has undertaken the construction work relating to building viz., Building No.1 to 6 known as Shiv Amrut Dham located at Survey No.22, No.22 H.No.1(pt) (7) and S.No.23 H.No. Pt 2 at Gauripada, Kalyan on a plot admeasuring 5318.46 sq. meters equivalent to 1.33 acres. 4. During the course of the assessment proceedings, assessee has filed details such as copy of original plan and a copy of amended plan etc. The amended plan was approved by KDMC vide their No. KDMC/NRV/BP/KV/303-125 dated 29.09.2004. Assessee has also filed details of flat receipts, details of expenditure etc. As per the Profit & Loss A/c the business profit has been determined at Rs. 65,14,585 and after disallowing the claim of donation along with the disallowance under section 40(a)(ia), the business income has been w....
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....respect of part of land bearing S No. 22/23 at Gauripada Kalyan(w) from M/s. Jayshree Developers. This land originally belonged to Krishna Balu Manerkar and others. The development rights therein were originally purchased by M/s. Jayshree Developers. The plan for entire land was sanctioned by KDMC on 25/01/2001 and 5/4/2003. The principal Developers were not able to develop the entire land and therefore disposed off developments in respect of construction of six multistoried buildings to Appellant (Building No.1 to 6) and M/s. Vidhi builders (building No.11 to 14). Thus three independent developers have developed three different projects on one land under name and style of Shiv Amrut Dham' (Appellant), 'Vidhi' (Vidhi Developers) and Amrut Dham (Jayshree Builders). As far as appellant's project Shiv Amrut Dham is concerned. Area of land is 1.33 acres (more than one acre). This fact is not disputed by AO. Similarly Built up area of each Residential Unit is less than 1500 sq.ft. i.e. within permissible limit since the project is situated beyond 25 kms from Bombay Municipal Limits. This fact is also not under dispute. As regards balance two conditions, i.e. Com....
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....ver, the deduction was sought to be withdrawn since area under development of project now claimed as covered under section 80IB(10) was less than one acre (i.e. after excluding area on which building was already constructed). The reopening was challenged by assessee by way of Writ. The Hon'ble High Court dismissed the writ petition. The reasoning given by Hon'ble Court is that it needs to be examined whether part of land already developed by assessee would be part of new project or it has to be excluded". The view emerging from this decision appears to be that for purpose of claiming deduction under section 80IB(10), actual area under development is material. This view also gets support from Board Circular No.5/2005 dated 15/07/2005. The clarification given regarding provisions of section 80IB(10) as per Circular also emphasizes upon the fact that area limit of plot has to be construed with reference to the area of site on which the housing project is constructed. AO has referred to judgment of Hon'ble Madras High Court in case of Sheshasayee Paper & Boards Ltd vs. DCIT 272 ITR 165 regarding interpretation of statues. The Hon'ble High Court has laid down th....
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....that taking a liberal construction of the provision, assessee is eligible for deduction under section 80IB(10) of the Act. The Supreme Court in the case of CIT vs. U.P Cooperative Federation Ltd (1989) 76 CTR (SC) 22: (1989) 176 ITR 435 (SC) also adopted a liberal approach in granting a deduction. The Supreme Court in the case of CIT vs. J.H. Gotla 156 ITR 323 has also very categorically stated the beneficial interpretation in favour of assessee should be adopted. In the present case, there is no condition as regards to ownership and if we interpret strictly the provision, then assessee is eligible for deduction under section 80IB(10) of the Act. The ambiguity in the provisions related to section 80IB(10) is clearly evident from mushrooming disputes on various interpretation being adopted by AOs across the country and the decisions being rendered by appellate authorities. One of the recent decisions of special bench is case of Brahma Builders (Supra) wherein provisions of section 80IB(10) are discussed in depth. The most important rule of interpretation is that under no circumstances the law can be interpreted in such a way to defeat the very purpose of e....
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....jects of other developers. Even the decision of Laukik Developers cited by AO in his order has not been approved by Special bench in case of Brahma Builders (Supra). For the above reasons, I am inclined to agree with the appellant's submission that the compliance of conditions laid down under section 80IB(10) are to be examined vis-àvis project being developed by assessee developer. Once appellant's project Shiv Amrut Dham is separated from other two projects of other developers the conditions laid down under section 80IB(10) stand complied with. Even as per AO there is no other violation in the said project to deny the benefit to the appellant. The issue regarding total commercial area has also emerged only because AO has treated the three projects being developed on land bearing S.No.22/23 as one. I therefore, hold that Shiv Amrut Dham project is distinct from other projects. The conditions laid down for claiming deduction are duly fulfilled as the project is developed on land admeasuring more than one acre, having residential units each admeasuring less than 1500 sq.ft.total area of commercial units at less than 2000 sq. ft and completed before 31/03/200....