TaxTMI 
TaxTMI 
TaxTMI 
2018 (2) TMI 178
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.... of the case and in law, the Ld. CIT(A) erred in not considering the fact that the Commencement Certificate for the construction activities on the plot was granted on 09.06.1993 i.e. prior to 01.10.1998 which was subsequently extended over the years till 22.04.1998 and certificate issued for wing E is only an endorsement to the earlier commencement certificate. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not considering that the size of land on which wing 'F' is constructed is less than 1 acre, thus violating the condition required for availing deduction u/s. 80lB(10) of the I.T. Act. 4. The appellant prays that the order of the Ld. CIT (A) on the above grounds be set aside and that of the AO be restored. 5. The appellant craves leave to amend or alter any ground or add a new ground." 2. Briefly stated, the facts of the case are that the assessee firm which is engaged in the business of building construction and property development had e-filed its return of income for A.Y. 2011-12 on 22.09.2011, declaring total income of Rs. 1,70,306/-. Subsequently, the return of income was revised by the assessee on 08.12.2011 at th....
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....n three grounds, viz. (i) that as the Building "E" was only a part of the project which had commenced in the year 1993 as per the Commencement Certificate dated 09.06.1993, therefore, the approval of the Building "E" was just an endorsement of the original Commencement Certificate dated 09.06.1993; (ii) the size of the Plot on which the Building "E" was constructed was less than 1 acre; and (iii) the provisions of Sec. 80IB(10) was clearly restricted to only one project on minimum area of 1 acre. The submissions of the assessee in support of its claim for deduction under Sec. 80IB(1) did not find favour with the A.O. The A.O on the basis of his aforesaid conviction concluded that as the Commencement Certificate for the plot of land on which the assessee had constructed A, B, C, D & E wings was granted in 1993 and block "E" was only an endorsement on the Commencement Certificate, therefore, it could safely be concluded that the assessee had commenced the construction before 01.10.1998. It was further observed by the A.O that as the size of the plot of land on which A, B, C, D & E wings were constructed was 2.36 acres, therefore, the area apportioned in respect of Block "E" was found....
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....t year 2004 - 05. In that assessment the claim of deduction by the assessee was disallowed on several grounds. On further appeals the issue of deduction went up to the Bombay High Cour t whe re the grounds re lated wi th commencement of construction, area of plot and size of the flats were raised by the Depar tment. The Hon'ble Bombay High Cour t in i ts order dated 28/05/2012 dismissed the appeal of the Department and decided the issue in favour of the appellant. Thereafter the Department filed SLP before the Hon'ble Supreme Court of India. The Hon'ble Supreme Court disposed a bunch of appeals f iled by the Department against the judgement of various decisions of the Bombay High Court, The Hon'ble Supreme Court of India in i ts o rde r dated 30th Apr i l2015 c o nf i rmed the de c is ion g iv en by the Bombay. High Court in many cases against which the department had f iled SLP. The case of the appel lant was also accordingly disposed. From the assessment order it is absolutely clear that even though the higher judicial forum like the Bombay High Court and the ITAT Mumbai had ruled in favour. of the appel lant on the issue of deduct ion under sect ion 80( IB) (10) the ....
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....n. It was further submitted by the Ld. A.R that the Hon'ble High Court had observed that Sec. 80IB(10)(b) specifies the size of the plot of land and not the size of the housing project, therefore, what was required was that the size of the plot of land as per Sec. 80IB(10) must have a minimum area of one acre, and nowhere contemplated that the plot having minimum area of one acre must be a vacant plot. The Ld. A.R submitted that the High Court after deliberating on the various aspects on which the entitlement of the assessee towards claim of deduction under Sec. 80IB(10) was assailed by the department before it, had concluded that the assessee was entitled to the deduction claimed by it under Sec. 80IB(10) in respect of the Building "E". It was further submitted by the Ld. A.R. that the SLP filed by the revenue against the judgment of the Hon'ble High Court of Bombay had also been dismissed by the Hon'ble Supreme Court. Per Contra, the Learned Departmental Representative (for short 'D.R') admitted that the issue involved in the present case was squarely covered in the favour of the assessee by the judgment of the Hon'ble High Court of Bombay in its own case for A.Ys 2004-05 & 2005-....
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.... housing project for which approval was granted prior to 1st October 1998 and, therefore, the benefit of Section 80IB (10) cannot be granted. There is no merit in the above argument, because, when the plans for A, B, C and D buildings were approved during the period from 1993 to 1996, construction of 'E' building was not even contemplated on the plot in question. It is only in the year 2001 when the status of the land was converted from surplus vacant land into within the ceiling limit land by the State Government, an additional building could be constructed on the plot in question and accordingly building plan for construction of 'E' building was submitted and the same was approved by the local authority on 11th October 2002. 21. The fact that the local authority, namely the MunicipalCorporation approved the building plan for 'E' building on the condition that all the objections raised in the Intimation of Disapproval dated 12th May 1993 relating to the earlier housing project on the same plot of land shall be applicable and should be complied with, cannot be a ground to hold that 'E' building is extension of the earlier housing project because t....
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....9; building constitutes an independent housing project and, therefore, the date on which the earlier housing project had commenced construction could not be applied to the housing project consisting of 'E' building merely because the conditions set out while granting approval to the earlier housing project have also been made applicable to the housing project in question. 23. The next argument of the Revenue is that to avail the deduction under Section 80IB (10), the housing project must be on the size of a vacant plot of land which has minimum area of one acre. In the present case, there are five buildings (A, B, C, D and E) on a plot ad-measuring 2.36 acres, hence, the proportionate area for each building would be less than one acre and, therefore, the benefit of Section 80IB (10) could not be granted in respect of the housing project consisting 'E' building. 24. As rightly contended by the counsel for the assessee and the intervenors, Section 80IB (10)(b) specifies the size of the plot of land but not the size of the housing project. The size of the plot of land, as per Section 80IB (10) must have minimum area of one acre. The Section does not lay down that....
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....on 80IB (10) by adding words to the statute is wholly unwarranted and such a construction which defeats the object with which the Section was enacted must be rejected. 28. Apart from the above, the Central Board of Direct Taxes (CBDT) by its letter dated 4th May 2001 addressed to the Maharashtra Chamber of Housing Industry has stated thus: "The undersigned is directed to refer to your letter No.MCHI:RSA:m:388/19799/3 dated 1st January 2001 and to state that the additional housing project on existing housing project site can qualify as infrastructure facility under Section 10(23G) and 80IB (10) provided it is taken up by a separate undertaking, having separate books of accounts, so as to ensure that correct profits can be ascertained for the purpose of Section 80IB and also to identify receipts and repayments of long term finances under the provisions of Section 10(23G), separately financing arrangements and also, if it separately fulfills all other statutory conditions listed in Sections 10(23G) and 80(B(10). With regard to your query regarding the definition of Housing Project, it is clarified that any project which has been approved by a local authority as a housing project....
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.... was no merger of flats and in fact both the flats in question were neither sold nor any application was made before the local authority seeking merger of two flats on the ground floor of 'E' building. Thus, no fault can be found with the decision of the Tribunal in rejecting the argument of the Revenue relating to the merger of the flats." We further find that as observed by the CIT(A), the SLP filed by the revenue against the aforesaid order of the Hon'ble High Court had also been dismissed by the Hon'ble Supreme Court. We are of the considered view that pursuant to the aforesaid orders of the Hon'ble Courts, the entitlement of the assessee towards claimed deduction under Sec. 80IB(10) is no more res integra. We thus in the backdrop of the aforesaid observations find ourselves to be in agreement with the view taken by the CIT(A) and uphold his order. 9. The appeal filed by the revenue is dismissed. ITA No. 1397/Mum/2016 A.Y. 2012-13 10. We shall now take up the appeal of the revenue for A.Y 2012-13. The revenue had assailed the order of the CIT(A) before us by taking the following grounds of appeal : "1. On the facts and in the circumstances of the case and in law....