TaxTMI 
TaxTMI 
2019 (1) TMI 673
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....IB(10) of the Act, by the Assessing Officer on the following grounds:- a) The entire development activity is on a land measuring 74.97 Acres and contains common facilities created in the project which is accessible to all the allottees of the project. As per the agreement with the Government Agency ADDA, the project is not only for housing but for development of an integrated township which consists of commercial, in addition to residential and township project at Kanyapur, Asansol. Hence the residential projects Poorvi and Triveni cannot be held as a housing project for the purpose of Section 80-IB of the Act. b) No evidence is placed on record that the size of all the flats constructed in the two projects do not exceed the limit of 1500 sq. ft. c) No separate accounts have been have been maintained for the two projects, profits from which are claimed to be exempt u/s 80-IB of the Act. d) A perusal of the audit report in Form No. 10CCB under Rule 18BBB points out that copies of approvals, evidence as regards the area, were not placed on record. All the necessary details required for grant of deduction are not filed by the assessee. ....
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.... separate housing projects and that each block in a larger project has to be taken as an independent building and hence housing project, if such a housing project is separately approved by the municipal authorities and that approval granted by the municipal authorities would be construed as approval granted to housing projects. He further submitted that the claim of the assessee u/s 80-IB(10) of the Act, was allowed to the assessee in the earlier Assessment Years on the same facts and on the principle of consistency, deduction should be allowed. It was also contended that maintenance of separate accounts is not required when the assessee has filed separate statements of accounts and profit and loss account and the Assessing Officer has not found any deficiencies in these profit and loss accounts. He argued that all details as required, has been filed in relation to sale to the same individual/relative which are 8 in number. The ld. CIT(A) rejected the contentions of the assessee by holding as follows:- "I have perused the order of the A.O., grounds of appeal and written arguments submitted by the appellant. In this case the appellant has not controverted the fact that h....
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....or the assessee submitted that all the evidences in question were furnished before the Assessing Officer as well as the ld. CIT(A) and that the ld. CIT(A) had called for a remand report and that the Assessing Officer finally rested his objections only on three aspects. The arguments of the ld. A/R are summarized as follows:- a) It is not necessary that the assessee should be exclusively engaged in the housing projects and phase of the project which fulfil the conditions laid down u/s 80-IB of the Act, if separately approved by the local authority is eligible for deduction. b) The nature of business of the assessee, i.e., agreement with ADDA, requires infrastructural development and, construction of commercial, residential and township projects. This continued to be the same for all the earlier years and also the subsequent years and the claim of the assessee for deduction u/s 80-IB of the Act, was allowed in the assessment orders passed u/s 143(3), for the Assessment Years 2005-06 & 2006-07. Hence on the ground of consistency the claim of the assessee should have been allowed. Reliance in this regard was placed on the judgments in the following case-law:- ....
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....s. Vandana Properties; [2012] 206 Taxmann 584 (Bom.) Viswas Promoters P. Ltd. v. ACIT; [2013] 29 taxmann.com 19 (Madras) Madanlal Gupta vs. CIT 9 Taxmann.com 235 ACIT vs. Ashiana Amar Developers, 178 TTJ 424 (ITAT Kolkata) CBDT Circular No. 205/3/2001/ITA-II dated 4th May 2001 Bengal Ambuja Housing Development Ltd. vs. DCIT( ITA NO. 1595 and 1735/Kol/2005; dt. 24th April, 2006 (Cal HC) For the proposition that maintenance of separate books of account is not necessary:- Leo Meridian Infrastructure Projects & Hotels Ltd. vs. DCIT; 144 ITD 445 DCIT vs. SMR Builders Pvt. Ltd.; 54 SOT 105 On the issue of amendment with regard to the sale to the same person or relatives not applicable prior to the amendment coming into force:- Ravi Appasamy vs. ACIT; [2016] 69 taxmann.com 305 Mad For the proposition of proportional disallowance:- ACIT vs. Ekta Sankalp Developers; 53 taxmann.com 75 Mumbai HC On the issue of consistency to be maintained:- CIT vs. Excel Industries Ltd. 358 ITR 295 SC Radhasoami Satsang v. Commissioner of Income-tax [1992] 193 ITR 321 (SC) ....
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....able for all the residents as per maintenance charges. c) It is not controverted that in the entire project, as per original agreement, there is claim for bungalow, multiplex, commercial space, ground space, common commercial multiples, landscaping etc. which would exceed the limit laid down under the provisions of Section 80-IB(1)(d) of the Act, which specifies that the shop and commercial shop built up area should not exceed 3% of the aggregate built up area of the housing project. 5.1. The ld. D/R submitted that under the agreement of the assessee with ADDA, more than 40% space was utilised for commercial and non-residential construction and that the claim also shows that the space for bungalow required more than 1500 sq.ft. This, he pointed out, violated Section 80-IB(10)(d) of the Act. He further argued that the agreement of sale with the buyers clearly shows that the housing project in question is part of the township project and submitted that phase-wise development of the entire town ship cannot be treated as a separate project. He further submitted that the assessee failed to maintain separate books of account and hence the profits from these residential pro....
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.... the following grounds:- a) The project is an integrated development project and if the entire project is considered, the building area of shops and commercial shops is more than 40% which violates the provision of Section 80-IB(10)(d) of the Act, which prescribes that the shops and commercial shops does not exceed 3%. b) The scheme under the agreement of the assessee with ADDA shows space for bungalow requires more than 1500 sq.ft., which violates conditions stipulate u/s 80-IB(10) of the Act. c) The phase wise development of the entire township cannot be broken up into separate projects. 7.2. Before we deal with the issue, we find that there is no dispute on the issue that the denial of deduction by the Assessing Officer on the ground that the requisite details were not submitted, has been addressed during the course of appellate proceedings before the ld. CIT(A). Copy of Form No. 10CCB with all the required annexure is placed at page 263 of the paper book. At pages 274 to 277 of the paper book, the copy of the agreement with ADDA, sanction plan of the municipal corporation, in respect of the two housing projects on which deduction 80-IB(10) was clai....
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.... of the entire infrastructure of the overall township was not complete. The agreement, the assessee has with ADDA, Asanasol Municipal Corporation in an overall broad agreement and the municipal corporation has treated "Poorvi" and "Triveni" housing projects as independent housing projects. On such facts we shall now examine the legal positions. The Hon'ble Bombay High Court in the case of CIT vs. Vandana Properties (supra) held as follows:- "Whether construction of building 'E' constitutes a 'housing project under section 80- IB(10) The expression 'housing project' is neither defined under section 2 of the Act nor under section 80-IB(10). Even under the Mumbai Municipal Corporation Act, 1988 as also under the Development Control Regulations for Greater Mumbai, 1991, the expression 'housing project' is not defined. Therefore, the expression 'housing project' in section 80-IB(10) would have to be construed as commonly understood. [Para 18] The expression 'housing project' in common parlance would mean constructing a building or group of buildings consisting of several residential units. In fact, the Explanation....
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....he Municipal Corporation had granted approval for the said project as extension of earlier housing project, it is not open to the income-tax authorities to contend that approval granted on 11-10-2002 constituted extension of the housing project which was approved in the year 1993. [Para 21] Reliance placed by the revenue on the Explanation to section 80-IB(10)(a) which was introduced with effect from 1-4-2005 is also misplaced. What the said Explanation contemplates is that where the approval in respect of a housing project is granted more than once, then that housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority. For example, in respect of a housing project, the assessee may seek amendment of the building plan at several stages of the construction and the same may be approved. In such a case, the Explanation provides that for the purposes of section 80-IB(10) the housing project shall be deemed to have been approved on the date on which the first approval was granted by the local authority. Thus, the Explanation to section 80-IB(10)(a) refers to the approval granted to ....
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....The construction of any building, road, bridge or other structure in any part of India " 13. Section 80IA of the Act is a specific provision which deals with deduction in respect of profits and gains from industrial undertakings or enterprises engaged in the development of infrastructural facilities such as roads, bridges and other structure as regards the grant of deduction in respect of development and construction of a housing project. Section 80IB is a specific provision in respect of profits and gains from undertakings engaged in developing and constructing housing projects other than infrastructure development undertakings. Thus, housing projects considered herein under Section 80IB refers to any building other than road, bridge or other structure. Thus, going by the definition of "housing project" to mean the construction of "any building" and the deduction under Section 80IB of the Act is hundred per cent of the profits derived in the previous year relevant to the assessment year from such housing project complying with the condition, each block in the larger project by name "Agrini" and "Vajra", has to be taken as an independent building and hence a housi....
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....tely, there is no finding by the revenue that the condition specified u/s 80-IB(10)(d) of the Act are violated. Hence we decide this issue in favour of the assessee. 8. The second issue is whether separate books of account are required to be maintained by the assessee for each housing projects Poorvi and Triveni. There is no provision in the Act prescribing that separate books of account have to be maintained for each of the housing projects. It was so held by the Hyderabad Bench of the ITAT in the case of Leo Meridian Infrastructure Projects & Hotels Ltd. vs. DCIT; 144 ITD 445 and in DCIT vs. SMR Builders Pvt. Ltd.; 54 SOT 105. The assessee has filed separate profit and loss accounts for each project has been filed by the assessee before the Assessing Officer, they cannot be rejected without pointing out deficiencies. The purpose of the exercise is to ascertain the profits of each project separately when the assessee is filing these profit and loss accounts and making a claim, no defects or deficiencies are pointed out by the Assessing Officer and these are rejected only the ground that they are not signed. This is not the correct approach to this issue. When no deficiencies ha....
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....t, we have already upheld the case of the assessee in T.C. Nos.1348 and 1349 of 2007 dated 10.10.2012 for grant of relief under Section 80IB(10) of the Act on a proportionate basis, by following the decision of the Bombay High Court in CIT v. Brahma Associates [2011] 333 ITR 289/197 Taxman 459/9 taxmann.com 289. Thus applying the decision of this Court in T.C. Nos. 1348 and 1349 of 2007 dated 10.10.2012, we hold that the assessee is entitled to succeed both on the principle of proportionality as well as by reason of the construction on the meaning of the expression "housing project" as referring to construction of any building and the wordings in Section 80IB(10) of the Act. In the circumstances, we hold that the mere fact that one of the blocks have units exceeding built-up area of 1500 sq.ft, per se, would not result in nullifying the claim of the assessee for the entire projects. Consequently, in respect of each of the blocks, the assessee is entitled to have the benefit of deduction in respect of residential units satisfying the requirement under Section 80IB(10)(c) of the Act. In so holding, we also agree with the decision of the Bombay High Court in CIT v. Vandana Pr....
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....er dt. 11/12/2007, passed u/s 143(3) deduction u/s 80-IB(10) of the Act was granted for the housing project by segregating the same from the entire township project. The deduction u/s 80-IB of the Act was granted for Rs. 1,42,44,914/-. For the Assessment Years 2008-09 & 2009-10, similar claims were made by the assessee for deduction of profits u/s 80-IB(10) of the Act and the same was accepted u/s 143(1) of the Act. Under these circumstances, the principle of consistency comes into play. We are of the view that the Assessing Officer as well as the ld. CIT(A) could not have taken a different view for the impugned Assessment Year 2010-11 than what was taken for the earlier Assessment Years when the same facts continue year after year. The Hon'ble Supreme Court in the case of Commissioner of Income-tax vs. Excel Industries Ltd. 358 ITR 295 SC held as follows:- "29. In Radhasoami Satsang Saomi Bagh v. CIT [1992] 193 ITR 321/60 Taxman 248 (SC) this Court did not think it appropriate to allow the reconsideration of an issue for a subsequent assessment year if the same "fundamental aspect" permeates in different assessment years. In arriving at this conclusion, this Court refe....