TaxTMI 
TaxTMI 
2016 (4) TMI 872
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....le units. 3. The appellant craves leave to alter, amend or delete any of the grounds of appeal or add to the same, if deemed necessary. 3. The first issue raised by way of modified grounds of appeal is in relation to the claim of deduction under section 80IB(10) of the Act which has two aspects. The first aspect is whether where the area of plot is 4000 sq. mtrs. and therefore, less than one acre, the assessee is entitled to the claim of deduction under section 80IB(10) of the Act. The second aspect of the issue is that one of the residential units has built up area of more than 1500 sq. ft and can the deduction under section 80IB(10) of the Act be denied to the assessee. Without prejudice to the above, the assessee has raised ground of appeal No.2, in alternate, prorata claim of deduction under section 80IB(10) of the Act should be allowed with reference to eligible units. 4. Briefly, in the facts of the present case, the assessee for the year under consideration had filed return of income declaring total income of Rs. 9,43,080/-. The case of the assessee was picked up for scrutiny. The assessee for the year under consideration had shown income from two projects i.e....
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....o 0.40 Hectares, which is equivalent to 4000 sq. mtrs. as per Standards. The Assessing Officer vide para 5 noted that as per the Development Agreement of the concerned plot dated 16.07.1997, the area of the plot was 4000 sq. mtrs. only, on which the assessee had developed Eden Garden project. Further, the gross area of the plot as per layout sanctioned by the PCMC was 4000 sq. mtr., therefore, it would not make any difference that the original area of the plot was 5000 sq. mtrs. and 1000 sq. mtrs. of land was taken by PCMC for garden purpose. The Assessing Officer observed that plot area of the project as per Development Agreement and as per layout sanctioned by PCMC was only 4000 sq. mtrs., which was below one acre. The second contention of the assessee that earlier area was measured as Hectares and Are and the precision of measurement in area up to 2 digits, was also not accepted by the Assessing Officer as under section 80IB(10)(b) of the Act, the project is on size of plot which has a minimum area of one acre. The Assessing Officer thus, held as under:- "7. This contention of the assessee also cannot be accepted for the reasons that, section 80IB(10) of the I.T. Act , ....
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.... was more than one acre was neither here nor there, hence, this plea of the assessee was dismissed. The next contention of the assessee was based on the interpretation of the Standards of Weights and Measures Act, 1956, on the basis of which, the assessee contended that 4000 sq. mtrs., upon rounding off would constitute one acre. The CIT(A) observed that the said Act had been repealed by Standards of Weights and Measures Act, 1976, Under section 4(1) of the said Act, every unit of weight or measure shall be based on the units of metric system. The CIT(A) further observed that undisputedly, the metric unit of area is Hectare and not acre. However, the Legislature in its wisdom has specified the minimum area of plot of land as one acre under section 80IB(10) of the Act and in such circumstances, the Assessing Officer had no option but to give full effect to the express provisions of the law. The CIT(A) further observed that it was not in dispute that one acre of land equals 4046.9 sq. mtrs. and not 4000 sq. mtrs., which was the size of plot of land in assessee's case. Further, the CIT(A) on perusal of the Act, 1976 observed that there was no support for the assessee's contention that....
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....nd even the plans approved by PCMC talks of 4000 sq. mtrs. or one acre. He further, stated that PCMC applies the DC Rules of PCNTDA. While summarizing the issue, the learned Authorized Representative for the assessee pointed out that one acre was not defined in the Act and it should be understood by popular connotation. Further, the learned Authorized Representative for the assessee stated that in interpreting the provisions of section 80IB(10) of the Act, liberal interpretation should be given as held in Bajaj Tempo Vs. CIT reported in 196 ITR 188 (SC). The learned Authorized Representative for the assessee fairly submitted that the connotation one acre was understood differently in different States and 7/12 extract of the present plot of land referred to Guntas. He further stressed that where two views are possible, then the view which is favourable to the assessee should be applied. Reference was made to the ratio laid down in CIT Vs. Vandana Properties (2013) in 353 ITR 36 (Bom), wherein the Hon'ble Bombay High Court held that on one acre of plot, two projects were possible. Further, reliance was placed on the ratio laid down by Pune Bench of Tribunal in consolidated order with....
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....0 sq. yds. or about 4,050 sq. mtrs. As per the letter dated 03.09.2014 received from PCNTDA, it was clarified that the land was measured by the PCNTDA in sq. mtrs. and acre was not used as unit of measurement. Further, even in the approved plans submitted by the learned Authorized Representative for the assessee, the gross area of plot was mentioned as 4000 sq. mtrs. and after deduction for amenities, net area of plot was taken as 3202.261 sq. mtrs. The learned Departmental Representative for the Revenue pointed out that all the references made were available in public domain and could be utilized for this purpose. The learned Departmental Representative for the Revenue pointed out that how the relief can be given to the assessee for ignorance of law and he further submitted that the popular connotation was to be applied, only if information was not available in public domain. Further, he submitted that the case laws were dealt by the CIT(A) and it was also pointed out that the assessee has not provided any amenities and in case the plot area was one acre or more, then he was bound to provide area for amenities. Further submissions were made with respect to built up area of row hou....
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....nd. The condition of construction of housing project on a plot of land having minimum area of one acre was recognized by the Hon'ble High Court and applying the said ratio, for any assessee to avail the deduction under section 80IB(10) of the Act, one of the conditions to be fulfilled is that plot of land should have a "minimum area of one acre". Undoubtedly, the object of granting deduction under section 80IB(10) of the Act equal to 100% of the profits of an undertaking, arising from developing and constructing a housing project is, with a view to boost the stock of houses for lower and middle income groups, subject to fulfilling the specified conditions, was also the ratio laid down by the Hon'ble Bombay High Court. Applying the said ratio, we hold that in order to avail the deduction equivalent to 100% on profits of an undertaking, which is engaged in development and construction of a housing project, the conditions laid down in section 80IB(10) of the Act have to be fulfilled. The aim of introduction of section 80IB(10) of the Act was to boost stock of houses for lower and middle income group and where any enactment specifies certain conditions, then the conditions laid therein....
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....trs. and after deduction of 10% for open space and portion for internal roads, totaling 797.739 sq. mtrs., the net area of plot available with the assessee was 3202.261 sq. mtrs. In the said plan itself, it is provided that the permissible residential FSI & Floor space (7x8) would 3202.261 sq. mtrs. and the total residential FSI and Floor space proposed was 3063.105 sq. mtrs. i.e. consumption of FAR of 95.654%. 15. The case of the assessee before us is that undisputedly, the area of the plot is 4000 sq. mtrs. in the Lease Agreement, Development Agreement and also is the start point for area calculation in the sanctioned plan. However, the plan accompanying in the Lease Agreement refers to the plot as 4000 sq. mtrs. suffixed by one acre. The assessee in this regard contends that impliedly the lessor of the plot refers to 4000 sq. mtrs. as one acre. The lessor of the plot in this case was PCNTDA. The assessee has filed before us a summary of contentions made during the course of hearing, which reads as under:- "Summary of Contentions A. On the Plot Area 1. It is undisputed that the area of the plot is said to be 4000sq. mts. in the lease agreement, the develop....
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....96 ITR 188) k) Annexure 1 (page 2), Annexure 2 (page 4) and Annexure 3 (page 8) of the written submissions filled by the Revenue concede the fact that an acre is also understood as 4000 sq mtr. By pointing out that 1 hectare is 2.5 acres and 1 hectare is 10,000 sq mtrs. 3. The Lessor is the prime developer of the area under PCNTDA which falls within the jurisdiction of the PCMC whose DC rules apply to all developments therein. Accordingly, the amenity spaces at 15% have to be carved out besides other requirements. This is done by the Lessor and the net area of 4000 sq meters is granted to the assessee for the development. Such additional areas have been indicated in the lease deed at page 26 of the Paper Book by stating area for development (viz roads plus O.S. etc). The area under amenity spaces has been considered as a part of plot area in numerous decisions of the Hon. Tribunal led by the decision in Bunty Builders V ITO(56 DTR). B. On the B uilt up area 1. The plan has been sanctioned on 27.11.2003. The definition of built up area has been brought by Finance Act, 2004 w.e.f. 01.04.2005. 2. For the plans sanctioned prior to 01.04.2005....
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....Level Data Repository with uniformity across the States. " As can be seen from the above that the object of this report is to gather information about the land records of various states and standardize the same for making a uniform data base for the country. It neither defines the unit of measurement under consideration i.e. acre nor challenges the definition of acre being used in different states of the country. b) The para 2.7.1 of the report relied upon by the AR basically contains a recommendation to have the area of land only in metric units and para 2.7.3 depicts the various area units in practice in land records in various states. The AR has simply relied on that conversion factor which suits the assessee and disregarded the conversion factor of 1 acre=4046.94 Sq.mtrs as applicable in the state of Jharkhand and as mentioned at line no.4 of page no. 52 of this report. Such partial and out of context reliance on the report cannot be and should not be accepted by the Hon'ble Court. c) Though the report mention about various area units in practice and land record of various states but does not find mention of the units/conversion factors prevalent ....
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.... a) In the lease Deed (page 25-32 of the paper book dated 14/08/2014) executed on 02/03/1991 between PCNTD and Shri RC Patel the area of plot under consideration is mentioned as 4000 Sq.mtrs. Even in the development agreement executed by the assessee on 16/07/1997 (page 37-59 of the paper book dated 14/08/2014) the area of plot under consideration is mentioned as 4000 Sq.mtrs. These documents show that since beginning the size of the plot was mentioned as 4000 Sq.mtrs in all the legal documents. It nowhere says or indicate that 1 acre=4000 Sq.mtrs. The assessee cannot disregard these legally executed documents to present a distorted definition of an acre and that too purely on the basis of a word written on the layout plan. b) The valuation report submitted by the valuation officer, who is a technical expert on the subject also made it very clear that the plot under consideration is less than 1 acre. c) The Government of Maharashtra nowhere defines an acre is equal to 4000 Sq.mtrs. d) As per the official website of the BOMBAY HIGH COURT, 1 acre has been taken as 4067.23 Sq.metres. The document down loaded from the website of the BOMBAY HIGH COURT is enclose....
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.... a simple word like acre which has no scope of ambiguity. Hence the above argument of the assessee is also totally misplaced and therefore, needs to be squarely rejected. In view of the above submission, it is humbly submitted that the appeal filed by the assessee may be dismissed and the order of the AO/CIT(A) may be sustained." 17. During the course of hearing of the present appeal, the Assessing Officer was directed to examine the contention of the assessee that the plan annexed refers to the plot size as one acre though the Lease Deed talks of plot admeasuring 4000 sq. mtrs. The Assessing Officer was directed to furnish remand report after examination of the aforesaid plea and he was also free to carry out such enquiries as he may deem fit and the requisite report was to be furnished through the learned Departmental Representative for the Revenue. In reply, the Assessing Officer obtained a measuremen t report from PCNTDA along with the layout plan of the land in which it was intimated that the land available with the assessee was only 4000 sq. mtrs. The copy of the said report is available on record. Thereafter, Paper Book was filed by the Revenue authoriti....
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....s with special reference to para 2.7 at pages 50 to 52 of the Paper Book. The perusal of the Technical Report reflects that National Informatics Centre, Department of Information Technology, Ministry of Communications & Information Technology , under Land Records Information System Division had compiled the said data for the purpose of computerization of land records. The perusal of the same in para 1.3 reflects that the report was formulated to gather information about the land records of various States in order to standardize Uniform Data Base in the country. Under the said scheme, there is no definition vis-à-vis units of measurements nor definition of acre has been incorporated in the said report. In this regard, the claim of the assessee before us was that there was recommendation to have the area of land only in metric units. The perusal of the said table of conversion reflects that in different States, different area units are prevalent. Further, the said table points out that one acre is equal to 40 Guntas and one Gunta is equal to 100 sq. mtrs. and in some areas, one acre is equal to 121 sq. yds. In the said list itself, one acre is shown to be equal to 4046.94 sq. ....
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....e Standards of Weights and Measures Act, 1976, the unit of measurement of area is square meter, but it is to be taken as two decimals. One hectare was equal to 2.5 acres and since one Hectare was 1000 sq. mtrs., which was the information in public domain, then one acre was equal to 4000 sq. mtrs. First of all the Standards of Weights and Measures Act are for regulating trade and not for measuring plots, hence not applicable. Further, we find no merit in the contention raised by the assessee in view of the definition for one acre available under various sources in public domain, etc. Even the Lease Deed executed by PCNTDA to the Lessee talks of area of plot as 4000 sq. mtrs. The information was received from PCNTDA, which confirmed that as a unit of measurement, the land was measured in square meters and not in acres. The PCNTDA also confirmed that the area of 4000 sq. mtrs. i.e. 2500 + 1500 P.C. was allotted to the Lessee with whom the assessee had entered into Development Agreement. Further, the Assessing Officer during the course of assessment proceedings had received a report from the Valuation Officer, in which he confirmed that the area of the plot on which the development had....