TaxTMI 
TaxTMI 
2017 (11) TMI 116
X X X X Extracts X X X X
X X X X Extracts X X X X
....), who vide order dated 21.04.2015 granted partial relief to the assessee. Aggrieved by the order of CIT(A), assessee and Revenue are now in appeal before us. The grounds raised by the assessee in appeal No.981/PUN/2015 reads as under: "1. The learned CIT(A) erred in disallowing deduction u/s 80IB(10) in respect of 10 fiats in building B in the housing project 'Sun Orbit on the ground that the built up area of each of these flats exceeded 1500 sq.ft. 2. The learned CIT(A) failed to appreciate that- a. The built up area of these flats did not exceed 1500 sq.ft. each as per the reports given by the appellant. b. The area of columns, window chhajjas, etc. in a flat could not be included in the built up area of the fiats and thus, the built up area of every flat was less than 1500 sq.ft. The learned CIT(A) erred in following the report of Shri Nitin Lele, Engineer who was engaged by the dept. and who had wrongly calculated the built up area of the fiats. 3. The learned CIT(A) ought to have accepted the appellant's contentions and should have allowed deduction u/s 80IB(10) in respect of the entire project 'Sun Orbit." 3. On the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sidential units in a building or number of buildings with qualified residential units in a given project. He was further of the view that unless all the required conditions stipulated in Sec.80IB(10) are fulfilled by the assessee, assessee is not eligible for deduction. He accordingly denied the claim of deduction of Rs. 27,90,33,915/- u/s 80IB(10) of the Act. Aggrieved by the order of AO, assessee carried the matter before Ld CIT(A), who granted partial relief to the assessee by observing as under: "3.7 I have considered the submission made by the appellant and perused material on record. The only issue contested relates to the disallowance of the claim of deduction u/s 80IB(10) amounting to Rs. 27,90.33,915/-. The fact of the case indicate that the appellant company who are builders and developers undertook the residential project at S.No. 12/5/1B, 12/6/2, 1A, 1B & 1C at Wadgaon Budruk, Pune in the name of 'Sun Orbit'. The size of the plot on which the said project was built was 13400 sq. mtrs. or 1,64,689 sq. ft. and comprised of 4 buildings namely A, B, C, D and contained 149 residential flats and 2 shops. The Assessing Officer during the assessment proceedings iss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the appellant to be of 6", however, in the calculation of the valuer the same was found to be 18" and the valuer as per the definition given of the built up area in section 80IB(14)(a) considered the same in computation of built up area, and found the built to area to have exceeded 1500 sq. ft. in respect of 10 flats of Building 'B'. The appellant, however, not satisfied with the aforesaid findings of Shri Lele appointed his own architect Shri Prakash Kulkarni who in its report dated 01.03.2013 stated the area to be 1493.61 sq. ft. The appellant also appointed another architect and Govt. approved valuer Shri Harshad Ruparel for a report on the built-up area of the said flats and Shri Ruparel in his report dated 26.02.2013 also calculated the area of each of the 10 flats to be 1493.53 sq. ft. The A.O., however, did not consider the aforesaid report of the architect appointed by the appellant and relying on the report of Shri L.ele the Govt. Approved Valuer, held that the housing project did not fulfill the condition provided in clause (d) of section 80IB(10) and hence, the profits not eligible for deduction as claimed by the appellant. The Assessing Officer, however, allowed....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the built-up area and arrived at the area of each flat at 1493.53 sq. ft. It has been observed by the valuer Shri Ruparel that the only point leading to the difference in areas of the flats was on account of inclusion of the architectural projections in the built-up area by Shri Lele and not considered by him in making calculation of the built-up area. It has been further observed by him that as a general trend prevalent in the construction industry architects provide architectural projections in the form of features, chhajjas, hollow boxes, solid boxes for enhancing the aesthetics of the buildings which are also allowed by the local authority i.e. PMC, PCMC etc. and are rot counted by any Corporation in the built-up area calculations. Shri Ruparel has also noted in its report that the particular projection is also not utilizable from inside and neither it is added to the carpet area nor it was of habitable nature and, therefore, such projections at a few places cannot be construed as thickness of the wall. Thus, the material brought on record prima facie do not indicate the architectural projection to be includable in the built-up area of the aforesaid flats as the same is see....
X X X X Extracts X X X X
X X X X Extracts X X X X
....may increase as contende:: by him though the exact working in this regard is not available, however, if the same is excluded the built-up area of the said flats will be less than the stipulated area of 1500 sq. ft. as per section 801B(10)(c), The Govt. Approved Valuer being an authorized technically qualified person specifically for such issues & matters its findings certainly carries more weight hence, the contention raised cannot be disregarded. However, in the present case as reports of three Govt. Approved Valuers are available the issue has become debatable one. 3.10. So far as the additional ground of appeal raised by the appellant on without prejudice that the claim of deduction u/s 80IB(10) shall be tenable on pro-rata basis in respect of those balance units of the project & buildings which satisfies the conditions stipulated u/s 80IB(10) do finds support of the decisions of various Courts and Tribunals including Pune ITAT and reliance has been placed on a number of decisions which Includes the following: 1. DCIT vs. Brigade Enterprises Pvt. Ltd.,(20Q8) 119 TT J (Bang) 269 2. AIR Developers. (supra),(201 0) 122 ITD 125 (Nag) 3. Sheh Devel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ipulated area of 1500 sq. ft. He therefore submitted that since none of the area of the flats exceeded 1500 sq. ft. and since the project has been approved by the PMC authorities as Residential Project, the claim of deduction u/s 80IB(10) of the Act has to allowed in full. Without prejudice to the claim of deduction for the full project he submitted that in case if the area of 10 flats exceeded the limit of 1500 sq. ft., the deduction cannot be denied for the entire project and that it was eligible for proportionate deduction. 8. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to denial of deduction u/s 80IB(10) of the Act. We find that the claim of assessee of deduction u/s 80IB(10) for the entire project was disallowed by AO for the reason that out of the total 149 flats built by assessee, 10 flats were having area of more than 1500 sq ft. We find that while deciding the issue, Ld CIT(A) has given a finding that the project was on a plot area of 13400 sq mtrs (i.e.3.31 acres) which was more than 1 acre, approval from the competent authority for commencement of present project was granted on 30.03.2007 and th....