TaxTMI 
TaxTMI 
2010 (9) TMI 1266
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Nos: 1 and 7 being general in nature and no specific issues involved, they do not survive for adjudication. In the remaining grounds, the crux of the issue is confined to - "that the CIT(A) has erred in deleting the disallowance of deduction u/s 80IB (10) of the Act amounting to ₹ 20,81,746/-." 3. Briefly stated, the assessee firm ('the assessee' in short), a real estate developer, for the assessment year under dispute, had claimed deduction u/s 80 IB(10) of the Act of ₹ 1.67 crores in respect of profits from housing projects styled G.R.Grand Residency and G.R. Pinnacle Project. Consequent on an action u/s 133A of the Act on 24.11.2005, according to the Revenue, it was noticed that the project was not in conformity with con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the assessee itself even though it was stoutly denied by the assessee; (v) the balconies and utilities provided were hit by the definitions of 'built-up area' in the Explanation to s.80IB (10) of the Act; & (vi) The deviations from the approved plan in construction of this project referred above were confirmed by the District Valuation officer of the Department when the issue was referred for his report. 4. Aggrieved, the assessee took up the issue before the CIT (A) for relief. After duly analyzing the assessee's various contentions as set -out in the impugned order which is under dispute and also extensively quoting the Hon'ble Tribunal's finding in ITA Nos: 668 & 669/Bang/2006 dated: 5.2.2009 in the assessee's own case for the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....annot be any commercial space in the building project of the appellant in order to entitle it for the claim u/s 80IB (10). It is a fact that the appellant has built commercial complex along with residential units in this project. The appellant has not established that the building project only a 'housing project' as discussed in the above paragraph. Hence, the construction of shops or commercial place cannot be considered as a 'housing project' for the purpose of application of section 80-I B(10) of the Act. The building project of the appellant was approved by the local authority i.e., CMC, Bommanahalli under a common L.P No.64/02-03 dated 14.6.2002 as a residential-cum-commercial project and the common approval letter of the CMC itself su....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... have not been fulfilled by the assessee; (c) he had grossly failed to notice that there were various deviations from the sanctioned plan and the housing project constructed which violated the purview of housing project as envisaged in s.80- IB (10) of the Act; & (d) that the findings of the Hon'ble Bench on a similar issue for the preceding assessment years (2004-05 & 2005-06) in the assessee's own case had not reached the finality as a reference before the Hon'ble High Court is still pending. In view of the above, it was fervently pleaded that the stand of the AO requires to be sustained. 5.1. On the other hand, the Ld. A. R had submitted that an identical issue had cropped up for the assessment years 2004-05 and 2005-06 in the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts v. ITO - ITA No:1170/B/2007 dt: 25.4.08, the Hon'ble Tribunal was pleased to observe that "Further, it is to be seen that survey was conducted by the Income-tax Department only on 30.8.2005 almost after 2 years by which time the assessee had sold the units. From the disputed facts, it is obvious that at the time when the assessee had completed the project, the entire transaction were well within the conditions provided in terms of the provisions of s. 80-IB(10) of the Act. Considering all these, we direct the AO to accept the claim of the assessee and allow deduction u/s 80IB (10) of the Act." (3) In an identical issue, the very same Bench in the case of DCIT v. Gopalan Enterprise India Pvt. Ltd. - ITA No:195/B/08 dt: 24.10.08 was v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....applying the decision of the Hon'ble ITAT, PUNE BENCH, the AO is directed to allow proportionate deduction with regard to the profit as is attributable to the residential area only." 6.4. While applauding the Ld. CIT (A)'s efforts in applying the ratio of the Hon'ble ITAT, Pune (Special Bench) in deciding the issue on hand, we would like to point out the faux pas made by the learned first appellate authority in doing so. The Hon'ble Pune Bench, in its wisdom ruled that - (para 114) "………………We have noted that section 80-IB (10) categorically refers to the 'profits derived in the previous year, relevant to any assessment year, from such housing project. What is deductible is 'profit of the housing ....