2023 (10) TMI 1319

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.... (2) Any other ground which may be adduced at the time of hearing" 2. Succinctly stated, the assessee, a builder, had filed his return of income for A.Y.2013-14 on 24.09.2013, declaring an income of Rs. 2,02,97,950/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. 3. During the assessment proceedings, it was, inter alia, observed by the A.O. that the assessee had sold two flats, viz. (i) Flat No. "A-101"; and (ii) Flat No. "A-102" to Smt. Usha Basant Sethi. Although it was the claim of the assessee that it had sold Flat No. "A-102" to Shri Mahendra Kumar Sethia, HUF, but the A.O. observed that the claim was factually incorrect. The assessee had, based on an "Agreement to sell," claimed that he had sold flat No." A-102" to Shri Mahndra Sethiya, HUF, but the same did not find favor with the A.O. On the basis of information that was shared with him by the ITO, Ward-4(3), Raipur, before whom the case of Smt. Usha Basant Sethia (supra) was fixed for scrutiny assessment; the A.O. observed that the assessee had vide a registered sale deed sold Flat No.A-102" to Smt. Usha Basant Sethia (supra). On the basis of the aforesaid facts,....

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....to do. Thus, these are two separate sales. Appellant's appeal is therefore allowed. 4. In result, the appeal of the appellant is allowed." Accordingly, the CIT(Appeals), on the basis of his aforesaid deliberations, allowed the assessee's claim for deduction u/s. 80IB(10) of the Act. 5. The Revenue, being aggrieved with the order of the CIT(Appeals), has carried the matter in appeal before us. 6. We have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 7. Shri R.B Doshi, Ld. Authorized Representative (for short 'AR') for the assessee at the threshold of hearing of the appeal submitted, that there was no justification for the A.O to have declined the assessee's claim for deduction u/s. 80IB(10) of the Act for the reason that he had allegedly sold more than one residential flat of his housing project to an individual. The Ld. AR, in support of his aforesaid claim, relied on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. ....

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.... Ld. AR and, rightly so, the issue raised in the present appeal is no more res-integra and is squarely covered by the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Shreenath Buildcon (2019) 267 taxman. 115 (SC). The Hon'ble Apex Court had observed that where the assessee had carried out any construction with respect to some of the residential units exceeding the specified built-up area of 1500 sq. ft, then deduction claimed u/s 80IB(10) of the Act could not be denied in respect of the entire housing project. Also, a similar view had been taken by the Hon'ble Apex Court in the case of CIT Vs. Sarkar Builders (2015) 7 SCC 579.. Apart from that, we find that the Division Bench of this Tribunal in the case of ACIT-1(1) Vs. M/s. Kuber Developers, ITA No.256/RPR/2017 dated 29.08.2022, had observed that violation attributable to some residential units of a housing project would not justify the declining of the assessee's entire claim for deduction u/s. 80IB(10) of the Act, observing as under: "9. We have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as consider....

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....im. Before proceeding any further, it would be relevant to cull out Section 80IB(10) of the Act, which reads as under (relevant extract): "80IB(10) (10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004 but not later than the 31st day of March, 2005, within four years from the end of the financial year in which the housing project is approved by the local authority; (iii) in a case where a housing project has been approved by the local autho....

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....ndividual is the karta. Explanation.-For the removal of doubts, it is hereby declared that nothing contained in this sub-section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government)." As is discernible from the aforesaid statutory provision, the same, inter alia, states that where more than one residential unit in the housing project is allotted to one individual, then the same would fall within the sweep of the violation contemplated in clause (f) of sub-section (10) of Section 80IB of the Act. 14. Backed by the aforesaid mandate of law, we shall now look into the fact as to whether or not the assessee had violated the aforesaid statutory provision with respect to residential units sold to Smt. Usha Basant Sethiya (supra). As the assessee had vide, registered sale deed sold Flat No. A-102 to Smt. Usha Basant Sethiya (supra), therefore, it can safely be concluded that the residential unit in his housing project was allotted to the said person. Although, it is the claim of the assessee that he had as regards the aforesaid property, viz. Flat No. A-102 executed the agreem....