TaxTMI 
TaxTMI 
2022 (8) TMI 528
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....ar Enterprises carrying on business activities of builder and developer. The assessee filed its Return of Income for A.Y. 2007-08 declaring total income of Rs..Nil on 26-10-2007. The return was processed u/s 143(1) of Income-tax Act, 1961 (in short "Act"). Subsequently, the case was selected for scrutiny under CASS and notice u/s. 143(2) and 142(1) of Income-tax Act, 1961 (in short "Act") were issued and served on the assessee. In response AR of the assessee attended and submitted relevant information as called for. 3. At the time of assessment, Assessing Officer observed that assessee has developed a project called 'Cosmos Park' situated opposite Suraj Water Park, Behind Kanchan Pushpa Kavesar, Waghbil, GB Road, Thane (W). The pro....
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....red an appeal before the CIT(A) and Ld.CIT(A) after considering submissions of the assessee partly allowed appeal of the assessee by following the earlier assessment year order and decision of his predecessor, and held as under: - "The alternate, argument of the appellant is that benefit of deduction u/s 80IB(10) should be allowed in respect of those residential units which undisputedly complied with the conditions of the said section. I find that this issue of proportionate deduction has been decided by my predecessors in the case of appellant only for the earlier assessment years. My predecessor, in the appeal order for A.Y 2007-08 (Appeal no. THN/CIT(A)-11/ITO/wd 1(3)/THN/198/09-10 dated 03.06.2010) has decided this issue in favour of ....
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....rya project for the flats which had built up area less than 1000 sq. ft. had to be workout on a prorate basis in line with discussion in the preceding paras." 12. Further in the case of ITO-vs-AIR Developers 123 TTJ (Nag) 959 (2009) the ITAT has held that: In this case following the decision of the Kolkatta Bench of the tribunal in the case of Bengal Ambuja Housing Development Ltd-vs-DCIT, the tribunal held that where a few residential units of the housing project exceeded 1500 sq. ft., there would be no justification to disallow the entire deduction u/s. 80IB(10). It was held that it would be fair and reasonable to allow deduction on proportionate basis i.e. on the profit derived from the construction of the residential units which has....
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.... (Bangalore) 269 (2008). "Whereas few residential units of housing project exceeded 1500 sq. feet, there would be no justification to disallow the entire deduction u/s. 80IB(10), it would be fair and reasonable to allow deduction on proportionate basis" (ITO-vs AIR Developers 123 TTJ (Nag) 959 (2009). 15. In view of the judicial pronouncements cited supra and the facts and circumstances of the present case, in my opinion, the appellant is entitled for deduction u/s 80IB(10) on proportionate basis as held in various decisions. Therefore, the AO is directed to calculate the deduction u/s 80IB(10) on prorata basis in respect of the flats which did not have the built up area exceeding 1000 sq. feet in the housing project "Cosmos Hills". In ....
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....f 80IB(10) of the Act." 7. We observe that this appeal is filed with a delay of 160 days, the delay is due to pandemic of COVID-19, accordingly, the delay is condoned. 8. At the time of hearing, Ld.DR brought to our notice grounds of appeal raised by the Department and relied on the order passed by the Assessing Officer. 9. On the other hand, Ld. AR submitted that these issues are already covered in favour of the assessee in particular he relied on the decision of Hon'ble Bombay High Court in the case of Devashri Nirman LLP v. ACIT, [429 ITR 597 (Bom) (2020)] and decisions of the Coordinate Bench in assessee's group case in the case of ITO v. Cosmos Developers in ITA No. 6745/Mum/2010 & CO No. 196/Mum/2011 dated 11.10.2013 for A.Y.20....
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....;ble Court has held as under: Within composite housing project, where there are eligible and ineligible units, the assessee can claim deduction in respect of eligible units in the project and even within the block the assessee is entitled to claim proportionate relief in the units satisfying the extent of the built up area. In the Matter before the Hon'ble Court assessee had constructed flats under four schemes ie. Blocks. It claimed deduction u/s.80IB of the Act in respect of flats measuring less than 1500 Sq.ft. but for the flats measuring more than 1500 Sq.ft.no claim was made. AO rejected the claim of the assessee on the ground that deduction was for the project as a whole and all residential units in the project should satisfy ....