The ITO, Ward-9(1),, Ahmedabad v. M/s. Surya Estate Developers, Ahmedabad

ITA 2232/AHD/2012 | 2006-2007
Pronouncement Date: 04-10-2013 | Result: Dismissed

Appeal Details

RSA Number 223220514 RSA 2012
Assessee PAN AANFS8617V
Bench Ahmedabad
Appeal Number ITA 2232/AHD/2012
Duration Of Justice 11 month(s) 29 day(s)
Appellant The ITO, Ward-9(1),, Ahmedabad
Respondent M/s. Surya Estate Developers, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 04-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 04-10-2013
Date Of Final Hearing 13-09-2013
Next Hearing Date 13-09-2013
Assessment Year 2006-2007
Appeal Filed On 05-10-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI A. MOHAN ALANKAMONY AM AND SHRI KUL B HARAT JM) ITA NO. 485/AHD/2010 (A.Y.: 2006-07 ) & ITA NO. 2859/AHD/2011 (A.Y.: 2005-06) M/S. SURYA ESTATE DEVELOPERS 32 EMBASSY MARKET NR. DINESH HALL ASHRAM ROAD AHMEDABAD. P. A. NO. AANFS8617 VS ITO WARD 9(1) AHMEDABAD. (APPELLANT) (RESPONDENT) I.T.A. NO.2232/AHD/2012 (IN ITA NO.2741/AHD/2010 FOR A.Y.: 2006-07) ITO WARD 9(1) AHMEDABAD. VS M/S. SURYA ESTATE DEVELOPERS 32 EMBASSY MARKET NR. DINESH HALL ASHRAM ROAD AHMEDABAD. P. A. NO. AANFS8617 (APPELLANT) (RESPONDENT) DEPARTMENT BY SHRI K. C. MATHEW SR. DR ASSESSEE BY SHRI S. N. DIVETIA AR DATE OF HEARING: 13-09-2013 DATE OF PRONOUNCEMENT: 04-10-2013 O R D E R PER A. MOHAN ALANKAMONY: THESE APPEALS ARE PREFERRED BY THE ASSESSEE AND REVENUE AGGRIEVED BY THE DIFFERENT ORDERS OF THE LEARNED CIT(A)-XV AHMEDABAD DATED 14 TH DECEMBER 2009 IN APPEAL NO. CIT(A)-XV/ITO/9(1)/326/08-09 FOR A.Y. 06 -07 IN ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 2 ASSESSEES APPEAL ORDER DATED 10 TH OCTOBER 2011 IN APPEAL NO. CIT(A)-XV/ITO/9(1)/354/10-11 FOR THE ASSESSMENT YE AR 2005-06 IN ASSESSEES APPEAL AND ORDER DATED 03 RD JULY 2012 IN APPEAL NO. CIT(A)-XV/9(1)/23/11-12 FOR A.Y. 2006-07 IN REVENUE S APPEAL. SINCE THE FACTS OF THE CASE AND THE ISSUES INVOLVE D ARE SIMILAR AND IDENTICAL IN ALL CASES; THE SAME WERE HEARD TOGETHE R AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.485/AHD/2010 (ASSESSEES APPEAL FOR AY 2006-07) 2. FIRST WE SHALL TAKE UP THE APPEALS OF THE ASSE SSEE. ASSESSMENT YEAR 2006-07 THOUGH THE ASSESSEE HAS RAISED NUMBERS OF ELABORATE GROUNDS IN EACH RELEVANT ASSESSMENT YEAR VIDE LETTER DATED 29 -06-2012 THE ASSESSEE HAS FURNISHED CONCISE GROUNDS OF APPEAL T HE SAME ARE REPRODUCED HEREIN UNDER FOR REFERENCE: 1.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW OR ON FACTS IN CONFIRMING THE DISALLOWANCE OF THE DEDUCTION U/S. 8 0-IB(10) OF RS. 42 00 136/- FOR A.Y. 2006-07 ON THE GROUND THAT THE CONDITIONS PRECEDENT FOR CLAIMING THE SAME WERE NOT FULFILLED. 1.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED THE DISALLOWANCE OF THE CLAIM OF DEDUCTION U/S.80-IB(10 ) OF RS. 42 00 136/- FOR A.Y. 2006-07. ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 3 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN MAKING R EFERENCE TO DVO AND THE FINDINGS GIVEN BY DVO ARE NOT ADMITTED BY THE APPELLANT SINCE THE SAME ARE CONTRARY TO THE FACTS ON RECORD. 2.2 THE LD. DVO HAS GRIEVOUSLY ERRED IN HOLDING THA T (A) THE BUILT- UP AREA OF THE BUNGLOWS WAS IN EXCESS OF 1500 SQ.FT AND (B) THAT OF COMMERCIAL ESTABLISHMENTS IN EXCESS OF 5% O F THE AGGREGATE BUILT-UP AREA. ASSESSMENT YEAR 2005-06 1.1 THE ORDER PASSED U/S. 250 OF THE ACT ON 10.10. 2011 FOR A.Y. 2005-2006 BY CIT(A)-XV AHMEDABAD UPHOLDING THE VAL IDITY OF RE-ASSTT. PROCEEDINGS AND THE DISALLOWANCE OF DE DUCTION U/S. 80-IB(10) OF RS. 43 LAKH IS WHOLLY ILLEGAL UN LAWFUL AND WITHOUT JURISDICTION. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDIN G THE VALIDITY OF RE-ASSTT. AND DISALLOWANCE OF THE CLAIM OF DEDUCTIO N U/S.80- IB(10) OF RS. 43 LAKH WITHOUT CONSIDERING FULLY AND PROPERLY THE EXPLANATION OFFERED AND EVIDENCE PRODUCED BY TH E APPELLANT. 1.3 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND /OR ON FACTS IN UPHOLDING VALIDITY OF THE NOTICE ISSUED U/S. 16.7.2 009 BY AO. 1.4 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE VA LIDITY OF RE- ASSTT. PROCEEDINGS INITIATED BY AO U/S. 147 THOUGH THERE WAS A CLEAR CHANGE OF OPINION ON HIS PART WITHOUT ANY N EW OR FRESH MATERIAL ON RECORD. THE LD. CIT(A) HAS ERRED IN UP HOLDING THE VALIDITY OF RE-ASSTT. BY RELYING UPON THE AMENDMEN T BY WAY OF INSERTION OF EXPLANATION TO SEC. 80-IB(10) THOUGH T HE REASONS RECORDED BY AO DID NOT MENTION ABOUT IT. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW OR O N FACTS IN CONFIRMING THE DISALLOWANCE OF THE DEDUCTION U/S. 8 0-IB(10) BY ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 4 RELYING UPON THE APPELLATE ORDER FOR A.Y. 2006-07 T HOUGH THE FACTS OF THE CASE WERE DIFFERENT AND DISTINGUISH FR OM THE FACTS OF THE YEAR UNDER APPEAL. THE APPELLANT STRONGLY O BJECTS TO THE FINDINGS OF THE CIT(A) THAT FACTS WERE THE SAME FOR BOTH THE YEARS. 3.1 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED THE DISALLOWANCE OF THE CLAIM OF DEDUCTION U/S. 80-IB(1 0). 4.1 WITHOUT PREJUDICE TO THE ABOVE AND IN THE ALTER NATIVE THE APPELLANT SHOULD HAVE BEEN ALLOWED PRO-RATA DEDUCTI ON U/S. 80-IB(10) IN RESPECT OF THE UNITS WHICH FULFILLED T HE CONDITIONS. 2. AFTER EXAMINING THE GROUNDS RAISED BY THE ASSESS EE FIRM IN BOTH THE APPEALS FOR A.Y. 06-07 & 05-06 (SUPRA) WE FIND THAT THE RELEVANT TWIN GROUNDS FOR OUR CONSIDERATION IN BOTH THE APPE ALS ARE AS FOLLOWS WHICH IS CONCEDED BY BOTH THE PARTIES: I. THE REVENUE HAS ERRED IN HOLDING THAT THE BUILT UP AREA OF THE BUNGALOWS WAS IN EXCESS OF 1500 SQ.FT. II. THE REVENUE HAS ERRED IN HOLDING THAT THE CONS TRUCTION OF COMMERCIAL SPACE IN THE PROJECT IS IN EXCESS OF 5% OF THE AGGREGATE BUILT UP AREA. 3. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS O F DEVELOPING RESIDENTIAL HOUSING PROJECTS FILED ITS RETURN OF I NCOME ON 11.10.2006 FOR THE ASSESSMENT YEAR 2006-07 AND FINALLY ASSESSM ENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 26.12.2008 AND 15.12.2010 FOR A.Y. 05-06. ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 5 4. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLA NT HAD ENTERED INTO A DEVELOPMENT AGREEMENT WITH DEVALAY (MOTERA) CO.OP. HOUSING LTD. ON 09.09.2000 FOR DEVELOPMENT OF LAND BEARING SURVEY NO. 224/B AND S.P. NO.2 OF F.P. NO.141/1 ADMEASURIN G ABOUT 5436 SQ.YDS. AT NR. ONGC OFFICE [AVANI BHAWAN] SABARMA TI-KALOL HIGHWAY MOTERA AHMEDABAD (PAGE-122-134). LATER ON A SUPPLEMENTARY DEVELOPMENT AGREEMENT WAS EXECUTE ON 15.02.2001 WITH IT (PB;PAGE-81). DURING THE COURSE OF ASSESS MENT PROCEEDING THE LD. A.O. OPINED AND CAME TO CONCLUSION THAT THE ASSESSEE WAS NOT ENTITLED TO CLAIM THE BENEFIT FOR DEDUCTION U/S . 80-IB (10) OF THE ACT BECAUSE OF THE FOLLOWING REASONS: 1. AS PER TERMS AND CONDITIONS OF THE SUPPLEMENTARY DEVELOPMENT AGREEMENT DATED. 15.02.2001 THE ASSESS EE WAS ENTITLED TO FIXED CHARGES AS REMUNERATION OF RS . 50 00 000/- PER ANNUM AND THEREFORE IT WAS EVIDENT THAT THE ASSESSEE HAD WORKED AS AN AGENT OF THE LAND OWN ER AND THEREFORE THERE WAS NO RISK FACTOR SUFFERED BY THE ASSESSEE. 2. LOCAL AUTHORITY APPROVED 25 RESIDENTIAL HOUSES W HEREAS THE ASSESSEE HAS CONSTRUCTED 26 RESIDENTIAL HOUSES. 3. THE B.U. PERMISSION DATED 01.03.2004 SHOWS THAT THE CONSTRUCTION LIMIT OF 1500 SQ. FT. HAS BEEN EXCEEDE D FOR FIVE RESIDENTIAL HOUSES CONSTRUCTED IN BLOCK C. 5. WHEN THE MATTER REACHED THE LD. CIT (APPEAL) LD . CIT(A) ENDORSED THE FINDING OF THE LD. A.O. WITH FURTHER FINDING THAT THE BUILT UP AREA SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 6 HOUSING PROJECT EXCEEDED 5% OF THE AGGREGATE BUILT UP AREA OR 2000 SQ.FT. WHICHEVER IS LESS. 6. BEFORE US LD. A.R. VEHEMENTLY ARGUED THAT WITH RESPECT TO THE FIXED REMUNERATION OF RS.50 LACS THE AMOUNT WAS DE VELOPMENT FEE CHARGED @ RS. 2 LACS FOR EACH BUNGALOW AS AGREED BE TWEEN THE ASSESSEE AND THE CO-OPERATIVE HOUSING SOCIETY AND T HAT HAD NOT ALTERED IN ANY WAY THE RISK UNDERTAKEN BY THE ASSES SEE AS A DEVELOPER. ON REGARD TO CONSTRUCTION OF 26 RESIDEN TIAL HOUSES THE LD. A.R. STOUTLY DENIED STATING THAT THE ASSESSEE HAD C ONSTRUCTED ONLY 25 RESIDENTIAL HOUSES AND ACCORDINGLY RAISED THE BILLS . FURTHER WITH RESPECT TO THE BU PERMISSION DATED 01.03.2004 FOR H AVING OBTAINED PERMISSION FOR CONSTRUCTION OF RESIDENTIAL HOUSES O VER AND ABOVE 1500 SQ.FT. PER RESIDENTIAL HOUSE IT WAS SUBMITTE D THAT THE ADDITIONAL CONSTRUCTION WAS CARRIED BY THE PARTIES AFTER HANDI NG OVER THE POSSESSION TO THEM AND ALSO THERE WAS A MISTAKE IN THE BU PERMISSIONS CERTIFICATE WITH RESPECT TO MENTIONING OF PERMISSIBLE LIMIT OF CONSTRUCTION. FINALLY THE LD. A.R. ALSO CITED THE DECISION OF THE JURISDICTIONAL HIGH COURTS CASE MANAN CORPORATION VS. ACIT CITED IN [2012] 78 DTR (GUJ.) 2005 TO OVERCOME THE LIMIT OF 5% OF THE AGGREGATE BUILT UP AREA OR 2000 SQ.FT. WHICHEVER I S LESS WITH REGARD TO THE COMMERCIAL AREA CONSTRUCTED IN THE PROJECT. 7. LD. D.R. OPPOSED TO THE SUBMISSION OF LD. A.R. A ND FURTHER RELIED UPON THE ORDERS OF THE REVENUE AND PLEADED T HAT THE SAME MAY BE SUSTAINED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE MATERIAL ON RECORD. AS ARGUED BY THE LD. A.R. THE REVENUE HAS NOT ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 7 BROUGHT OUT ANY COGENT REASON AS TO HOW THE RISK UN DERTAKEN BY THE DEVELOPER HAS BEEN ALTERED BY THE SUPPLEMENTARY CON STRUCTION AGREEMENT WHICH STIPULATED PAYMENTS OF RS. 50 LACS AS FIXED FEE PAID BY THE HOUSING SOCIETY TO THE APPELLANT. THEREFORE WE DO NOT FIND ANY MERIT IN THIS CONTENTION OF THE REVENUE. FURTH ER WITH RESPECT TO THE CONSTRUCTION OF THE 26 TH BUNGALOW THE ASSESSEE HAS CATEGORICALLY DENIED AND HAD REPLIED THAT IT HAD RAISED BILLS FOR CONSTRUCTION OF 25 BUNGALOWS AND NOT FOR 26 BUNGALOWS. THE REVENUE HA D ONLY STATED THAT FROM THE TWO BILLS RAISED BY THE ASSESSEE DATE D 31.03.2005 AND 31.03.2006 OF RS. 50 LACS EACH MENTIONED THAT THE F EES CHARGE WAS FOR 13 BUNGALOWS IN EACH BILL WHICH MEANT THAT THE FEE WAS CHARGED FOR 26 BUNGALOWS. OTHER THAN THIS STATEMENT THERE IS NOT FINDING BY THE ASSESSEE TO ESTABLISH THAT THE ASSESSEE HAD CON STRUCTED THE 26 TH BUNGALOW. FURTHER IT IS PERTINENT TO NOTE THAT TH E DVOS REPORT ALSO DO NOT SUGGEST CONCLUSIVELY THAT THE CONSTRUCTION W AS CARRIED OUT BY THE ASSESSEE. THIS IS EVIDENT FROM THE REPORT OF TH E DVO; THE RELEVANT PORTION OF THE REPORT IS REPRODUCED FOR REFERENCE ( PAPER BOOK PAGE NO. 137). IN FACT IT IS NOTED THAT IN RESIDENTIAL UNIT NO.10 ONE STOREY HAS BEEN ADDED AND IN RESIDENTIAL UNIT NO.18 ADDIT IONAL CONSTRUCTION HAS BEEN ADDED PROVIDING COVERED PARKI NG AT GROUND FLOOR AND ROOM ABOVE IT. THUS ON DATE OF IN SPECTION BUILT-UP AREA OF THESE UNITS EXCEED 1500 SQ.FEET. ADDITIONAL CONSTRUCTION SAID TO HAVE BEEN CONSTRUCTED BY ALLOT TEES OF THE RESIDENTIAL UNITS FOR WHICH IF REQUIRED DOCUMENTARY EVIDENCES MAY BE OBTAINED FROM THE ASSESSEE. THEREFORE THIS ISSUE RAISED BY THE REVENUE ALSO L ACKS MERIT. WITH RESPECT TO UNIT NO. 10 & 18 THE ASSESSEE HAD SUBMI TTED A LETTER FROM ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 8 THE SECRETARY OF THE HOUSING SOCIETY (PAGE NO. 138 OF THE PAPER BOOK) WHICH STATES AS UNDER: DATE: 30/11/2009 TO SURYA ESTATE DEVELOPERS 32 EMBASSY MARKET NEAR DINESH HALL ASHRAM ROAD AHMEDABAD. SUB: ADDITIONAL CONSTRUCTION IN BUNALOW NO. 10 AND NO. 18. DEAR SIR WE HEREBY SEEK TO CLARIFY THE ISSUE OF ADDITIONAL C ONSTRUCTION DOEN IN BUNGALOW NO.10 AND NO.18 OF OUR SOCIETY I.E . KALSASH TWIN BUNGALOWS AT MOTERA AHMEDABAD. THE ADDITIONAL CONSTRUCTION DONE IN BUNGALOW NO.10 AND NO.18 OF OUR SOCIETY HAS BEEN CARRIED OUT BY THE MEMBERS THEMSELVES OCCUPYING THE SAID BUNGALOWS SUBSEQUENT TO TAKING P OSSESSION OF THEIR RESPECTIVE UNITS THAT WERE ORIGINALLY CONS TRUCTED BY YOU AS PER THE AUDA APPROVED PLANS. THE ADDITIONAL CON STRUCTION IN UNIT NO.18 WAS UNDERTAKEN IN 2007 AND CONSTRUCTI ON IN UNIT 10 IS UNDERWAY. THESE MEMBERS HAVE NOT TAKEN REQUI RED PERMISSION FROM EITHER THE SOCIETY OR CONCERNED AUT HORITIES FOR THE ADDITIONAL CONSTRUCTION CARRIED OUT BY THEM. THE SOCIETY DOES NOT TAKE ANY RESPONSIBILITY FOR SU CH UNAUTHORIZED CONSTRUCTION CARRIED OUT BY THE MEMBER S. FOR DEVALAYA CO-OPERATIVE HOUSING SOC. LTD. SECRETARY ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 9 9. FROM THE ABOVE I.E. CONSIDERING THE DVO REPORT AND THE LETTER FROM THE SOCIETY THE ASSESSEE HAS TRIED TO ESTABLI SH THAT IT HAD NOT CONSTRUCTED ANY AREA BEYOND THE PRESCRIBED LIMITS. FURTHER THE REVENUE HAS NOT MADE ANY CATEGORICAL FINDING TO COU NTER THE SUBMISSION OF THE ASSESSEE. THE REVENUE HAS ALSO N OT BROUGHT OUT ANY MATERIALS ON RECORD FROM THE BOOKS OF ACCOUNTS AND THE DOCUMENTS OF THE ASSESSEE THAT THE ASSESSEE HAD IND ULGED IN CONSTRUCTION BEYOND THE PRESCRIBED LIMITS STIPULATE D UNDER THE ACTS. MOREOVER THE PERMISSION GRANTED BY AUDA (PAPER BOO K PAGE NO.111) ALSO MAKES IT CLEAR THAT THE PERMISSION GRA NTED FOR CONSTRUCTION OF THE RESIDENTIAL HOUSES IS 1459.28 S Q.FT. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE THE FIRST CONCISED GROUND MENTIONED IN PARA 2 HEREINABOVE IS DECIDED I N FAVOUR OF THE ASSESSEE. 10. WITH RESPECT TO THE OTHER ISSUE THAT THE REVEN UE HAS ERRED IN HOLDING THAT THE CONSTRUCTION OF COMMERCIAL SPACE I N THE PROJECT IS IN EXCESS OF 5% OF THE AGGREGATE BUILT UP AREA WE AR E OF THE CONSIDERED OPINION THAT THE MATTER IS SQUARELY COVE RED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N CASE OF MANAN CORPORATION VS. ACIT CITED BY THE ASSESSEE (SUPRA) FOR THE ASSESSMENT YEAR 2006-07. AS IS VERY APPARENT FROM THE RECORD THERE WERE NO CRITERIA FOR MAKING COMMERCIAL CONSTRUCTION PRIOR TO THE AMENDED SECTION AND THE PLANS ARE APPROVED AS HOUSING PROJECTS BY T HE LOCAL AUTHORITY FOR BOTH THE PROJECTS OF THE APPELLANT. PERMISSION FOR CONSTRUCTION OF SHOPS HAS BEEN ALLOWED BY THE LOCAL AUTHORITY IN ACCORDANCE WITH RULES AND REGULATIONS KEEPING IN M IND PRESUMABLY THE REQUIREMENT OF LARGE TOWNSHIPS. HOW EVER THE PROJECTS ESSENTIALLY REMAINED RESIDENTIAL HOUSING P ROJECTS AND ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 10 THAT IS ALSO QUITE APPARENT FROM THE CERTIFICATES I SSUED BY THE LOCAL AUTHORITY AND THEREFORE NEITHER ON THE GROUN D OF ABSENCE OF SUCH PROVISION OF COMMERCIAL SHOPS NOR ON ACCOUN T OF SUCH COMMERCIAL CONSTRUCTION HAVING EXCEEDED THE AREA CONTEMPLATED IN THE PROSPECTIVE AMENDMENT CAN BE MA DE APPLICABLE TO THE ASSESSEE WHOSE PLANS ARE SANCTION ED AS PER THE PREVALENT RULES AND REGULATIONS BY THE LOCAL AU THORITY FOR DENYING THE BENEFIT OF DEDUCTION OF PROFIT DERIVED IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR AS MADE AVAILA BLE OTHERWISE UNDER THE STATUTE. CONCLUSION: AMENDMENT OF S. 80-B(10) AND THE INSERTION OF CL. (D) W.E.F. 1 ST APRIL 2005 IS PROSPECTIVE ONLY AND CANNOT BE APPLIED RETROSPECTIVELY; ASSESSEES TWO HOUSING PRO JECTS HAVING BEEN APPROVED PRIOR TO 31 ST MARCH 2005 AND THE BUILT-UP AREA OF COMMERCIAL USE BEING 5.12 PER CENT AND 3.5 PER C ENT RESPECTIVELY IT WAS ENTITLED TO DEDUCTION UNDER S. 80-IB(10). 11. IN THE CASE BEFORE US THE PERMISSION OF DEVEL OPMENT WAS GRANTED BY AUDA ON 16.10.2002 (PAPER BOOK PAGE NO. 109) AND BU PERMISSION WAS GRANTED ON 01.03.2004 (PAPER BOOK PA GE NO. 119). THE AMENDMENT BY WAY OF INSERTION IN CLAUSE (D) OF 80-IB(10) CAME TO EFFECT FROM 01.04.2005 AND IT IS PROSPECTIVE IN NATURE AND THEREFORE IT CANNOT BE APPLIED FOR HOUSING PROJECT S APPROVED PRIOR TO 01.04.2005 AS HELD BY THE HONBLE JURISDICTIONAL HI GH COURT MENTIONED (SUPRA). THEREFORE THE SECOND CONCISE GROUND MENTIONED HEREINABOVE IS ALSO DECIDED IN FAVOUR OF THE ASSESSEE. ASSESSMENT YEAR 2006-07(REVENUES APPEAL) 1). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)- XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS. 14 13 765/- LEVIED U/S. 271(1)(C) OF THE ACT. ITA NO.485/AHD/10 2859/AHD/11 & 2232/AHD/12 (AY 06 -07 05-06 & 06-07 RESP.) M/S. SURYA ESTATE DEVELOPERS VS. ITO 11 2). ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CAS E THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 12. SINCE WE HAVE ALLOWED BOTH THE APPEALS OF THE ASSESSEE LEVY OF PENALTY BY THE REVENUE HAVE BECOME BAD IN LAW AN D THEREFORE WE HEREBY DISMISS THE APPEAL OF THE REVENUE. 13. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED IN ITS FAVOUR AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04-10-2013 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER S. K. SINHA/- TRUE COPY COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT AHMEDABAD