TaxTMI 
TaxTMI 
2010 (4) TMI 1110
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....ity at E-8, Arera Colony, Bhopal. The AO in order to ascertain actual built-up area of each house of the project conducted a physical verification on the site on 8th Dec., 2006 and on taking measurement of three flats, the built-up area of such flats was found to be more than 1,500 sq. ft. The details of such flats are as under : The AO, accordingly, gave the copies of the measurement so taken for the comments of the assessee and was also required to explain as to why the deduction under s. 80-IB(10) should (sic- not) have been disallowed. The assessee vide its letter dt. 26th Dec., 2006 has submitted that measurements were not correctly taken and also submitted the areas as per the report of a technical expert, was within the prescribed limit of 1,500 sq. ft. The AO, however, rejected such claim of the assessee and such report for the reason that the measurements were done by the Department in the presence of assessee's representative. Thereafter, the AO referred to the provisions of s. 80-IB(10) and cl. (a) of s. 80-IB(14) and held that definition of built-up area had been defined, which was of clarificatory nature and, therefore, as per this definition, the measurements taken ....
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....re of prospective nature and the correct method to calculate the built-up area had to be in accordance with M.P. Bhoomi Vikas Rules, 1984, which was applicable in the State of Madhya Pradesh where such housing project had been constructed. The assessee also referred to the methodology of measurement as per these rules to compute the built-up area, which was also adopted by the approved Valuation Officer and on that basis, it was found that such built-up area was less than 1,500 sq. ft. The assessee also submitted that the measurement was done by the Department through unqualified persons in spite of the fact that services of technical personnel to carry out such jobs were also available with the Department and this approach of the Department indicated that it was a predetermined action to disallow the eligible claim of the assessee. The learned CIT(A) after considering all the documents as well as legal position narrated by the assessee held that the assessee was entitled for pro rata deduction in respect of such housing project as the three flats were having built-up area of more than 1,500 sq. ft. The relevant findings of the learned CIT(A) are as under : "I have carefully exam....
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....common parking areas or common facilities, which could be excluded in computing built-up area. The learned CIT-Departmental Representative further contended that assessee's engineer's subsequent report was not to be accepted without confronting the same to the AO or verification of the same by the technical persons, hence, in view of the fact that no such exercise was done by the CIT(A), the same could not be given any weightage. The learned CIT-Departmental Representative further contended that the learned CIT(A) also did not verify the approved map/registration documents to find out the correct facts. Hence, the order of learned CIT(A) was not correct. Thereafter, the learned CIT(A) referred to pp. 123 and 124 to draw our attention towards the amount of consideration, which was not same, hence, the units could not be of same size. The learned CIT-Departmental Representative further contended that the provisions of s. 80-IB(10) were unambiguous and there was no methodology prescribed therein to give pro rata deduction and, therefore, when some flats were found to having built-up area of more than 1,500 sq. ft, then, the assessee was not eligible for deduction under s. 80-IB(10). T....
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....the year under consideration i.e., in asst. yr. 2004-05, there was no definition of built-up area in the Act. Hence, either commonsense meaning or other legislations dealing with the same subject were to be resorted to find out the meaning of built-up area. The learned counsel thereafter submitted that this housing project as per the Act had been approved as a housing project by a local authority. Hence, definition of built-up area had also to be taken as given by the local authorities. In this regard, he again relied on the decision of the Tribunal in the case of AIR Developers (supra). The learned counsel thereafter referred to the M.P. Bhoomi Vikas Adhiniyam read with Bhopal Master Plan to show that the items added by the AO were not to be added and, thus, the calculation done by the technical expert appointed by the assessee was correct and consequently, the area of three flats was also less than 1,500 sq. ft. As regard to the specific issue of area of flat No. A/6, the learned counsel submitted that at the time of physical verification, only the tenant was available and the owner of that flat, subsequently filed a confirmation to the effect that 400 sq. ft. area had been const....
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....report of the technical expert submitted subsequently, as the matter had to be given finality. He further contended that in the case of AIR Developers (supra) only a few flats were found to be of more than 1,500 sq. ft. Hence, whereas in the present case, all the flats measured on sample basis were found to have a built-up area of more than 1,500 sq. ft. Hence, this decision was not of any help to the assessee. We have considered the submissions made by both the sides, material on record and the orders of the authorities below. It is noted that the assessee is engaged in the construction of houses. The impugned houses have been constructed in three phases having different dimensions and designs. The AO has, however, taken the measurement physically only of one category of houses and that too has been carried out by non-technical staff, although the Department can utilize the services of technical personnel for this purpose. Thus, at the very outset, we are of the opinion that sample adopted by the AO is not representative of whole of the housing project and, therefore, the very basis of such action of AO is flawed. It is further noted that even the measurement of these flats, name....
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....ommonsense approach or dictionary meaning if the term is of general nature should be found out or if the term is of technical nature, then the definition of such term used in other laws should be taken into consideration. Accordingly, we hold that the meaning of term "built-up area" prior to insertion of definition clause in the Act has to be found out as per the local law i.e., rules and regulations of Bhopal Municipal Corporation as well as from M.P. Bhoomi Vikas Rules and as a consequence thereof, the built-up area of such flats is undisputedly less than the specified limit. Hence, the assessee, in our opinion, is eligible for deduction under s. 80-IB(10). In this view of the matter, there remains no question for any pro rata deduction. However, we consider it pertinent to state that it is beneficial provision and, therefore, it should be interpreted in a liberal manner and in case it is necessary then the assessee can be granted pro rata deduction. In this regard, we are further of the view that if the legislature did not want to give any pro rata deduction, it could have been provided by the legislature specifically that if one house was found to be having built-up area on th....