M/s. Lavanyaa Property Developers Private Limited, Trichy v. ACIT, Trichy

ITA 148/CHNY/2010 | 2005-2006
Pronouncement Date: 16-09-2011 | Result: Allowed

Appeal Details

RSA Number 14821714 RSA 2010
Assessee PAN AAACL1049D
Bench Chennai
Appeal Number ITA 148/CHNY/2010
Duration Of Justice 1 year(s) 7 month(s)
Appellant M/s. Lavanyaa Property Developers Private Limited, Trichy
Respondent ACIT, Trichy
Appeal Type Income Tax Appeal
Pronouncement Date 16-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-09-2011
Date Of Final Hearing 17-08-2011
Next Hearing Date 17-08-2011
Assessment Year 2005-2006
Appeal Filed On 15-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NO. 148/MDS/2010 ASSESSMENT YEAR : 2005-06 M/S. LAVANYAA PROPERTY DEVELOPERS PVT. LTD. NEW NO. 31/C-8 THIRD CROSS EAST THILLAI NAGAR TRICHY. (PAN : AAACL1049D) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX COMPANY CIRCLE-II TRICHY. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR ADVOCATE RESPONDENT BY : SHRI SHAJI P. JACOB SR. DR DATE OF HEARING : 17-08-2011 DATE OF PRONOUNCEMENT : 16/09/2011 O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS) TIRUCHIRAPPALLI IN ITA NO. 380/07-08 DATED 23-11-2009 FOR THE ASSESSMENT YEAR 2005-06. 2. SHRI S. SRIDHAR ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI SHAJI P. JACOB LEARNED SR. DR REPRESENTED ON BEHAL F OF THE REVENUE. I.T.A. NO.148/MDS/2010 2 3. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT IN THE ASSESSEES APPEAL THE MAIN CHALLENGE WAS AGAINST TH E ACTION OF THE LEARNED CIT(A) IN NOT GRANTING THE CLAIM OF THE ASSESSEE UNDER SEC TION 80-IB(10) INASMUCH AS THE CLAIM WAS NOT RELATING TO THE SAPPHIRE BLOCK AND THE ELIGIBLE PROFITS WERE COMPUTED WITH REFERENCE TO OTHER FOUR BLOCKS. IT W AS THE SUBMISSION THAT THE ASSESSEE WAS ALSO CHALLENGING THE DISALLOWANCE MADE BY THE LEARNED CIT(A) IN REGARD TO THE APPLICATION OF THE PROVISIONS OF SECT ION 40A(IA) OF THE ACT IN RESPECT OF THE WORK-IN-PROGRESS CLAIMED BY THE ASSESSEE. I T WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSEE WAS A C OMPANY WHICH WAS DOING THE BUSINESS OF PURCHASE AND SALE OF LANDS; PURCHASING DEVELOPING AND SELLING OF PLOTS AND PURCHASING DEVELOPING CONSTRUCTION AND SALE OF FLATS. IT WAS THE SUBMISSION THAT DURING THE ASSESSMENT YEAR 2003-04 THE ASSESSEE COMPANY HAD STARTED A PROJECT BY NAME LAVANYAA BRINDAVANAM AT STATE BANK OFFICERS COLONY AND THE PROJECT CONSISTED OF 5 BLOCKS NAMELY PAD MAVATHI BLOCK SAPPHIRE BLOCK BALAJI BLOCK RAGHAVENDRA BLOCK AND ALAMELUMANGAI B LOCK. IT WAS THE SUBMISSION THAT THE TOTAL LAND AREA PURCHASED BY THE ASSESSEE WAS 1.5 ACRES. OUT OF THE SAID AREA THE ASSESSEE HAD SOLD 5.5 CENTS AS PLOT TO ON E INDIVIDUAL AND GOT APPROVAL FOR 1.445 ACRES. AS MONEY WAS REQUIRED FOR DEVELOP ING THE FLATS THE ASSESSEE COMPANY HAD SOLD OFF THE LAND PERTAINING TO ONE OF THE APPROVED BLOCKS VIZ. D BLOCK WHICH WAS THE SAPPHIRE BLOCK THUS THE ASS ESSEE WAS LEFT WITH A BALANCE AREA OF 1.2 ACRES I.E. NEARLY 52 550 S.FT. IN 4 BL OCKS. IT WAS THE SUBMISSION THAT I.T.A. NO.148/MDS/2010 3 THE LAND IN RELATION TO THE SAPPHIRE BLOCK AS ALSO THE CONSTRUCTION IN RESPECT OF THE SAPPHIRE BLOCK WAS HIVED OFF THROUGH A MEMORANDUM O F UNDERSTANDING DATED 17- 06-2003 TO M/S. LAVENS CONSTRUCTION PVT. LTD. IT W AS THE SUBMISSION THAT THE CONSTRUCTION OF THE SAPPHIRE BLOCK WAS DONE BY M/S. LAVENS CONSTRUCTION PVT. LTD. AND 27% OF THE CONSTRUCTED AREA IN THE BUILDING WAS TO BE GIVEN TO THE ASSESSEE. IT WAS THE SUBMISSION THAT AS THE SAID SAPPHIRE BLO CK FELL WITHIN THE TOTAL PROJECT AREA OF THE LAVANYAA BRINDAVANAM THE COMMON FACILI TIES AS PER THE APPROVED PROJECT WAS TO BE DONE BY THE ASSESSEE AND ONLY THE CONSTRUCTION OF THE BUILDING OF SAPPHIRE BLOCK WAS HIVED OFF. THE EXCLUSIVE RIG HT TO USE THE 23 FEET ACCESS WAY TO THE PROPERTY WAS RETAINED BY THE ASSESSEE AS THE SAID SAPPHIRE BLOCK WAS IN THE FRONT PORTION OF THE MAIN PROPERTY. IT WAS THUS THE SUBMISSION THAT THE APPROVAL FOR THE PROPOSED APARTMENTS FOR SAPPHIRE B LOCK WAS ALSO IN THE NAME OF M/S. LAVENS CONSTRUCTION PVT. LTD. IT WAS THE SUB MISSION THAT THERE WAS PHYSICAL DEMARCATION INDICATING SEGREGATION OF THE BLOCKS BE ING THE 4 BLOCKS BUILT BY THE ASSESSEE AND THE SAPPHIRE BLOCK BUILT BY M/S. LAVEN S CONSTRUCTION PVT. LTD. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSEE HAD CL AIMED DEDUCTION U/S. 80- IB(10) ONLY IN RELATION TO THE 4 BLOCKS BUILT BY TH E ASSESSEE AND NO PORTION OF THE CLAIM UNDER SECTION 80-IB(10) RELATED TO ANY PORTIO N OF THE CONSTRUCTION IN RESPECT OF THE SAPPHIRE BLOCK. IT WAS THE SUBMISSION THAT THE EXPENSES RELATING TO THE CONSTRUCTION OF THE SUPERSTRUCTURE OF THE SAPPHIRE BLOCK WAS ALSO NOT TAKEN INTO THE BOOKS OF THE ASSESSEE COMPANY. IT WAS THE SUBM ISSION THAT AS THE SAPPHIRE I.T.A. NO.148/MDS/2010 4 BLOCK WAS PART OF THE ORIGINAL PROJECT ENVISAGED BY THE ASSESSEE AND AS THE AREA OF THE FLATS IN THE SAPPHIRE BLOCK EXCEEDED 1500 S. FT. THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80-IB(10). IT WAS THE SUBMISSION THAT EXCLUDING THE SAPPHIRE BLOCK THERE WAS NO OTHER VIOLATION IN RESPECT OF THE CLAIM OF DEDUCTION U/S. 80-IB(10) AN D AS THE ASSESSEE HAD HIVED OFF THE SAID SAPPHIRE BLOCK ALONG WITH THE LAND APPURTE NANT THERETO THE SAME COULD NOT BE CONSIDERED IN THE HANDS OF THE ASSESSEE COMP ANY. IT WAS THE FURTHER SUBMISSION THAT THE PROFITS IN RELATION TO THE SAPP HIRE BLOCK HAD BEEN SEPARATELY OFFERED FOR TAXATION BY M/S. LAVENS CONSTRUCTION PV T. LTD. AND THE ASSESSEE HAD NOTHING TO DO WITH THE SAID SAPPHIRE BLOCK OR THE L AND APPURTENANT TO THE SAID SAPPHIRE BLOCK. IT WAS THE SUBMISSION THAT THE LEA RNED CIT(A) HAD NOT ACCEPTED THE ASSESSEES CLAIM ON THE GROUND THAT THE APPROVA L OBTAINED FROM THE LOCAL AUTHORITIES FOR DEVELOPING THE PROJECT INCLUDED THE LAND IN RELATION TO THE SAPPHIRE BLOCK. THE SAPPHIRE BLOCK WAS HELD TO BE PART OF T HE ASSESSEES PROJECT AND CONSEQUENTLY DENIED THE ASSESSEE THE BENEFIT OF DED UCTION U/S 80-IB(10). IT WAS THE SUBMISSION THAT AS THE SAPPHIRE BLOCK WAS NOT B ELONGING TO THE ASSESSEE THE SAME SHOULD NOT BE CONSIDERED IN THE HANDS OF THE A SSESSEE FOR THE PURPOSE OF DENYING THE ASSESSEE THE CLAIM OF DEDUCTION UNDER S ECTION 80-IB(10) OF THE ACT. 4. IN REPLY THE LEARNED DR SUBMITTED THAT THE APPR OVAL FOR THE PROJECT WAS COMPOSITE APPROVAL AND THE CONSTRUCTION OF THE SAPP HIRE BLOCK WAS DONE ON THE BASIS OF THE APPROVAL OBTAINED BY THE ASSESSEE FOR THE TOTAL PROJECT. IT WAS THE I.T.A. NO.148/MDS/2010 5 SUBMISSION THAT THE COMMON FACILITIES SUCH AS DRAIN AGE ETC. HAD BEEN DONE BY THE ASSESSEE WHICH INCLUDED THAT FOR THE SAPPHIRE BLOCK . THE APPROVAL HAD NOT BEEN MODIFIED TO EXCLUDE THE SAPPHIRE BLOCK. IT WAS THE FURTHER SUBMISSION THAT THE DEDUCTION U/S 80-IB(10) HAD BEEN CLAIMED IN RESPECT OF THE UNDIVIDED SHARE OF THE LAND SOLD BY THE ASSESSEE IN RESPECT OF THE VARIOUS FLATS AND THE DEDUCTION U/S 80- IB(10) COULD BE GRANTED ONLY IN RESPECT OF THE PROF ITS ARISING OUT OF THE SALE OF THE RESIDENTIAL HOUSES AS PROVIDED UNDER SECTION 80-IB( 10). IT WAS FAIRLY AGREED BY THE LEARNED DR THAT THE ASSESSEE HAD NOT INCLUDED I N ITS BOOKS THE PROFITS ON THE CONSTRUCTION AND SALE OF THE SAPPHIRE BLOCK. 5. IN REPLY THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAD DEMARCATED THE COST OF THE UNDIVIDED SHARE OF T HE LAND AND THE COST OF THE SUPERSTRUCTURE AND THE PROFITS INCLUDED BOTH THAT O F THE LAND AND THE SUPERSTRUCTURE IN RESPECT OF THE BALANCE 4 BLOCKS. IT WAS THE SUBMISSION THAT THE SAME WAS FULLY PERMISSIBLE U/S 80-IB(10). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE PROVISIONS OF SECTION 80-IB(10) CLEARLY SHOWS THAT AN UNDERTAKING WHICH HAS COMMENCED OR COMMENCES THE DEVELOPMENT OF THE CONSTRUCTION OF A HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBER 1998 AND COMPLIES WITH ALL SUCH CO NDITIONS AS PRESCRIBED UNDER SECTION 80-IB(10) IS ENTITLED TO A DEDUCTION AT 100% OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELATING TO THE ASSESSMENT YEA R FROM SUCH HOUSING PROJECT. IT IS NOTICED HERE THAT THE HOUSING PROJECT IS AN APPR OVED PROJECT OF THE ASSESSEE. I.T.A. NO.148/MDS/2010 6 THE HOUSING PROJECT ORIGINALLY WAS IN RELATION TO A N AREA OF LAND ADMEASURING 1.445 ACRES WHICH AFTER HIVING OFF THE SAPPHIRE BL OCK CAME TO 1.2 ACRES. HERE WE MAY SPECIFICALLY MENTION THAT THE HOUSING OF THE SA PPHIRE BLOCK OF THE PROJECT TO M/S. LAVENS CONSTRUCTION PVT. LTD. HAS NOT BEEN CHA LLENGED BY THE LOCAL AUTHORITIES. EVEN AFTER HIVING OFF THE SAPPHIRE BLO CK PROJECT THE ASSESSEE STILL COMPLIES WITH ALL THE CONDITIONS AS PRESCRIBED UNDE R SECTION 80-IB(10). A PERUSAL OF THE EXPLANATION (I) TO SECTION 80-IB(10(A) SHOWS THAT IF THE APPROVAL IS OBTAINED MORE THAN ONCE THEN SUCH 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. THIS CLEARLY SHOW S THAT THE LEGISLATURE DID RECOGNIZE THAT HOUSING PROJECT COULD CONSIST OF VAR IOUS MODIFICATIONS ONE SUCH EXAMPLE BEING IN THE PRESENT CASE. AS LONG AS THE CONDITIONS PRESCRIBED UNDER SECTION 80-IB(10) ARE FULLY COMPLIED WITH JUST BEC AUSE THE ASSESSEE HIVES OFF ONE BLOCK IN THE PROJECT AND THE HIVED OFF BLOCK HAS VI OLATED THE CONDITIONS PRESCRIBED U/S 80-IB(10) IT WOULD NOT DISENTITLE THE COMPLETE PROJECT FROM THE DEDUCTION UNDER SECTION 80-IB(10) ESPECIALLY WHEN THE HIVED OFF BLOCK IS NOT IN ANY WAY CONNECTED WITH THE ASSESSEES BALANCE PROJECT AND T HE BALANCE PROJECT COMPLIES WITH ALL THE CONDITIONS U/S 80-IB(10). IN FACT TH IS IS NOT A CASE WHERE SOME OF THE UNITS IN THE PROJECT HAVE VIOLATED THE CONDITIONS O F SECTION 80-IB(10) OF THE ACT. THIS IS THE CASE WHERE THERE HAS BEEN A COMPLETE HI VING OFF OF A PARTICULAR BLOCK FROM THE PROJECT ITSELF. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE I.T.A. NO.148/MDS/2010 7 ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION UNDE R SECTION 80-IB(10) IN RESPECT OF THE HOUSING PROJECT DEVELOPED AND CONSTRUCTED BY TH E ASSESSEE. 7. COMING TO THE ISSUE AS TO WHETHER THE UNDIVIDED INTEREST IN THE LAND CAN BE CONSIDERED FOR THE CLAIM OF DEDUCTION UNDER SECTION 80-IB(10) IT IS NOTICED THAT THE DEDUCTION IS IN RELATION TO THE RESIDENTIAL UNI TS IN THE HOUSING PROJECT AND THE RESIDENTIAL UNIT WOULD INCLUDE THE UNDIVIDED SHARE IN THE LAND WHICH IS SOLD ALONG WITH THE RESIDENTIAL UNIT. JUST BECAUSE THE ASSESS EE HAS MAINTAINED SEPARATE ACCOUNTS IN RELATION TO THE UNDIVIDED SHARE IN THE LAND AND IN RELATION TO THE PROFITS FROM THE CONSTRUCTION ON THE SAID UNDIVIDED SHARE IN THE LAND WOULD NOT DENY THE ASSESSEE THE BENEFIT OF DEDUCTION U/S 80-I B(10) IN RESPECT OF THE UNDIVIDED SHARE IN THE LAND. THE DEDUCTION IS ON T HE PROFITS AND GAINS FROM THE HOUSING PROJECT WHICH IS ENTITLED TO THE DEDUCTION UNDER SECTION 80-IB(10). IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO THE DEDUCTION UNDER SECTION 80-IB(10) IN RESPECT OF THE 4 BLOCKS PUT UP BY THE ASSESSEE. IN THE CIRCUMSTANCES GROUNDS 2 TO 8 OF THE ASSESSEES APPE AL STAND ALLOWED. 8. IT WAS FURTHER SUBMITTED BY THE LEARNED AUTHORIS ED REPRESENTATIVE THAT THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT NOTIC ED THAT THE ASSESSEE HAD SHOWN AN AMOUNT OF RS 2 30 52 000/- TO BE CREDITED IN THE ACCOUNTS OF M/S. BALAJI BUILDERS BEING IN RELATION TO THE CONSTRUCTION COS T IN RESPECT OF THE PADMAVATHI BLOCK WHICH WAS SHOWN AS WORK-IN-PROGRESS. IT WAS THE SUBMISSION THAT AS THE ASSESSEE HAD NOT DEDUCTED TDS ON THE AMOUNT CREDITE D TO M/S. BALAJI BUILDERS I.T.A. NO.148/MDS/2010 8 THE ASSESSING OFFICER HAD INVOKED THE PROVISIONS OF SECTION 40A(IA) OF THE ACT AND HAD DISALLOWED THE EXPENDITURE OF RS. 2 30 52 000/- . IT WAS THE SUBMISSION THAT THERE WAS A DISPUTE BETWEEN THE ASSESSEE AND M/S. B ALAJI BUILDERS IN REGARD TO THE COST OF CONSTRUCTION BUT TO RECOGNIZE THE DUES TO M/S. BALAJI BUILDERS THE ASSESSEE HAD SHOWN THE SAME AS WORK-IN-PROGRESS AND HAD INCLUDED IT IN ITS INCOME AND EXPENDITURE ACCOUNT AND HAD ALSO SHOWN IN THE BALANCE SHEET OF THE ASSESSEE UNDER THE HEAD STOCK OF INVENTORIES IN T HE CURRENT ASSETS SIDE. IT WAS THE FURTHER SUBMISSION THAT IN THE COMPUTATION OF T HE TOTAL INCOME THE ASSESSEE HAD STARTED ITS COMPUTATION BY TAKING THE NET PROFI TS AS PER THE P & L ACCOUNT. IT WAS THE SUBMISSION THAT THE WORK-IN-PROGRESS WAS SHOWN IN THE BALANCE SHEET ONLY TO RECOGNIZE THE BILLS ISSUED BY M/S. BALAJI B UILDERS WHO HAD RAISED THE BILL ON THE ASSESSEE. IT WAS THE SUBMISSION THAT THE PAYME NT HAD BEEN MADE ONLY DURING THE SUBSEQUENT YEAR AND TDS HAD BEEN MADE. THE LEARNED AUTHORISED REPRESENTATIVE DREW OUR ATTENTION TO PAGE 18 OF THE SUBMISSIONS BEFORE THE LEARNED CIT(A) TO SHOW THAT THE ASSESSEE WAS HAVING DISPUTE WITH M/S. BALAJI BUILDERS IN REGARD TO THE COST OF CONSTRUCTION OF P ADMAVATHI BLOCK. SUBJECT TO THE FINALISATION OF THE CONTRACT PRICE BETWEEN THE ASSE SSEE COMPANY AND M/S. BALAJI BUILDERS THE AMOUNT OF RS. 2 30 52 000/-HAD BEEN CR EDITED TO THE ACCOUNT OF M/S. BALAJI BUILDERS ON THE BASIS OF THE BILLS RAISED BY M/S. BALAJI BUILDERS AS IF THE SAME WAS NOT SHOWN IN THE ACCOUNTS THE ACCOUNTS OF THE ASSESSEE WOULD NOT SHOW A TRUE AND CLEAR PICTURE. IT WAS THE SUBMISSI ON THAT THE SAME WAS ALSO I.T.A. NO.148/MDS/2010 9 SHOWN IN THE BALANCE SHEET AS WORK-IN-PROGRESS. IT WAS THE SUBMISSION THAT THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE DISA LLOWANCE BY INVOKING THE PROVISIONS OF SECTION 40A(IA) WAS LIABLE TO BE REVE RSED. 9. IN REPLY THE LEARNED DR SUBMITTED THAT IN THE I NCOME & EXPENDITURE ACCOUNT THE ASSESSEE HAD SHOWN THE AMOUNT AS EXPEND ITURE THOUGH IT HAD ALSO SHOWN THE SAME IN THE WORK-IN-PROGRESS IN THE INCOM E SIDE. IT WAS THE SUBMISSION THAT EVEN ASSUMING THAT THE SAME WAS NOT AN EXPENDITURE ON ACCOUNT OF THE DISPUTE AS THE SAME WAS A CONTRACTUAL LIABI LITY WHICH WAS NOT CRYSTALLIZED IN VIEW OF THE DECISION OF THE HON'BLE GUJARAT HIGH CO URT IN THE CASE OF ALEMBIC CHEMICAL WORKS LTD. V. DEPUTY COMMISSIONER OF INCOM E-TAX REPORTED IN 266 ITR 47 THE EXPENDITURE COULD NOT BE ALLOWED AND THE IN COME WAS LIABLE TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. 10. IN REPLY THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT IF THE DEDUCTION UNDER SECTION 80-IB(10) WAS GRANTED TO TH E ASSESSEE ANY ADDITION WHICH IS MADE TO THE NET PROFIT ON ACCOUNT OF ANY D ISALLOWANCE WOULD ALSO BE ELIGIBLE DEDUCTION UNDER SECTION 80-IB(10) AS THE S AME IS RELATED TO THE HOUSING PROJECT. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. UNDI SPUTEDLY THE AMOUNT OF RS. 2 30 52 000/- IS SHOWN AS THE WORK-IN-PROGRESS. IT HAS ALSO BEEN ADMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE PAYMENT HAS BEEN MADE IN THE SUBSEQUENT YEAR AND TDS HAD ALSO BEEN DEDUCTED ON T HE SAID AMOUNT. I.T.A. NO.148/MDS/2010 10 CONSEQUENTLY IF ANY DISALLOWANCE IS MADE BY INVOKI NG THE PROVISIONS OF SECTION 40A(IA) DURING THE RELEVANT ASSESSMENT YEAR IN RESP ECT OF THIS AMOUNT THE ASSESSEE WOULD BE ENTITLED TO CLAIM THE EXPENDITURE WHEN THE TDS ON THE SAID AMOUNT IS DEDUCTED AND PAID IN THE SUBSEQUENT YEAR IN VIEW OF THE PROVISO TO SECTION 40A(IA). FURTHER AS WE HAVE ALREADY HELD T HAT THE ASSESSEE IS ENTITLED TO THE DEDUCTION UNDER SECTION 80-IB(10) THIS DISALLO WANCE AS IT RELATES TO THE HOUSING PROJECT MORE SPECIFICALLY PADMAVATHI BLOCK THE ASSESSEE WOULD BE ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80 -IB(10) ON THIS DISALLOWANCE. THUS THE ASSESSEE WOULD BECOME ENTITLED TO TWO DEDU CTIONS WHICH ARE NOT PERMISSIBLE IN RESPECT OF THE SAME AMOUNT. THE LEG ISLATURE NEVER INTENDED FOR SUCH BENEFITS. IN THE CIRCUMSTANCES AS IT IS NOTI CED THAT THE EXPENDITURE IN RESPECT OF THE PADMAVATHI BLOCK DUE TO M/S. BALAJI BUILDERS IS SHOWN IN THE BALANCE SHEET OF THE ASSESSEE AS WORK-IN-PROGRESS WE ARE OF THE VIEW THAT NO TDS IS LIABLE TO BE DEDUCTED ON THE SAID AMOUNT DUR ING THE RELEVANT ASSESSMENT YEAR. THIS VIEW OF OURS IS ALSO SUPPORTED BY THE D ECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF ALEMBIC CHEMICAL WORKS LT D. REFERRED TO SUPRA WHEREIN IT HAS BEEN CATEGORICALLY HELD THAT THE SAME BEING A CONTRACTUAL LIABILITY WHICH HAS NOT BEEN CRYSTALLIZED THE SAME CANNOT BE CLAIMED A S AN EXPENDITURE DURING THE RELEVANT ASSESSMENT YEAR. IN THE CIRCUMSTANCES GR OUNDS 9 AND 10 OF THE ASSESSEES APPEAL STAND ALLOWED. GROUNDS 1 11 AND 12 ARE GENERAL IN NATURE AND I.T.A. NO.148/MDS/2010 11 DO NOT REQUIRE ANY ADJUDICATION. IN THE CIRCUMSTAN CES THE APPEAL OF THE ASSESSEE IS ALLOWED. 12. THE ORDER WAS PRONOUNCED IN THE COURT ON 16/09/ 2011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 16 TH SEPT. 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE