The ACIT,Vapi Circle,, Vapi v. M/s. Agrawal Construction Co.,

ITA 2375/AHD/2008 | 2005-2006
Pronouncement Date: 09-02-2012 | Result: Dismissed

Appeal Details

RSA Number 237520514 RSA 2008
Assessee PAN AAHFA4798C
Bench Ahmedabad
Appeal Number ITA 2375/AHD/2008
Duration Of Justice 3 year(s) 7 month(s) 15 day(s)
Appellant The ACIT,Vapi Circle,, Vapi
Respondent M/s. Agrawal Construction Co.,
Appeal Type Income Tax Appeal
Pronouncement Date 09-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 09-02-2012
Date Of Final Hearing 02-02-2012
Next Hearing Date 02-02-2012
Assessment Year 2005-2006
Appeal Filed On 24-06-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD . .!'#$ % & BEFORE SHRI MUKUL KR.SHRAWAT JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ./ I.T.A. NO.2375/AHD/2008 ( ( ) ( ) ( ) ( ) / / / / ASSESSMENT YEAR : 2005-06) THE ASST.CIT VAPI CIRCLE VAPI ( ( ( ( / VS. M/S.AGRAWAL CONSTRUCTION CO. 03 RAJ APARTMENT NAROLI ROAD SILVASSA (D & NH) * % ./+ ./ PAN/GIR NO. : AAHFA 4798 C ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI SAMIR TEKRIWAL SR.D.R. ./*- 1 0 / RESPONDENT BY : SHRI S.N.L. AGARWAL A.R. (2 1 3% / / / / DATE OF HEARING : 02.02.2012 4') 1 3% / DATE OF PRONOUNCEMENT : 09/02/2012 5 / O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHI CH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-VALSAD DATED 14/03/2008 PASSED FOR A.Y. 2005-06 AND THE GROUNDS RAISED BY THE REVE NUE WERE AS FOLLOWS:- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT ASSESSEE-F IRM WILL BE ELIGIBLE FOR DEDUCTION U/S.80IB OF RS.71 10 713/-. ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 2 - 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS GRANTED RELIEF TO ASSESSEE WITHO UT CONSIDERING THE FACT THAT ASSESSEE DID NOT OWN THE LAND IN WHIC H THE PROJECT WAS CONSTRUCTED AND BENEFIT U/S.80IB(10) WAS CLAIMED. 2. LATER ON REVENUE HAS RAISED REVISED GROUNDS; R EPRODUCED BELOW:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS ERRED IN HOLDING THAT ASSESSEE-FIRM W ILL BE ELIGIBLE FOR DEDUCTION U/S.80IB(10) OF RS.71 10 713/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THA T IN THE GUISE OF SALE OF 12 FLATS WITH LESS THAN 1500 SFT (AS REQUIR ED UNDER SEC 80IB) THE ASSESSEE HAD SOLD ENTIRE BUILDING RAMAYA N-A WITH 640.98 SQ.METERS WHICH CONSISTED OF 12 FLATS FOR RS .14 LAKHS TO TAINWALA CHEMICALS & PLASTICS INDIA LTD. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THA T SEPARATE APPROVAL WAS SOUGHT FOR RAMAYAN-B C & D FROM THE A TP OF D&NH ON VARIOUS DATES AND THEREFORE EVERY PROJECT IS CONSIDERED AS A SINGLE UNIT AS PER THE PERMISSION OBTAINED FOR CONSTRUCTING THE PARTICULAR BUILDING AND AS SUCH THE PROJECT IS NOT A SINGLE PROJECT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THA T THE WHOLE LAND PURCHASED BY THE ASSESSEE WAS ONLY AROUND 1 ACRE I N WHICH THE ASSESSEE CONSTRUCTED 4 UNITS AFTER GETTING SEPARATE APPROVAL FOR EACH INDEPENDENT BUILDING AND THEREFORE EACH APPROV AL IS LESS THAN ONE ACRE AS AGAINST THE PRESCRIBED AREA OF LAN D REQUIRED UNDER SEC 80IB. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED 28/12/2007 WERE THAT THE ASSESSEE- ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 3 - FIRM IS ADMITTEDLY ENGAGED IN DEVELOPMENT AND CONST RUCTION OF A HOUSING PROJECT KNOWN AS M/S.AGRAWAL CONSTRUCTION. AS P ER THE FIRST PAGE OF THE ASSESSMENT ORDER THE AO HAS NOTED THAT THE ASS ESSEE HAD OBTAINED CONSTRUCTION PERMISSION FROM TOWN PLANNER ON 19/03/ 1997. SUBSEQUENTLY A REVISED PERMISSION WAS OBTAINED ON 29/05/2002. AGAIN AN ANOTHER REVISED PERMISSION WAS OBTAINED ON 19/05 /2004 FOR THE PURPOSE OF CONSTRUCTION OF SAID HOUSING PROJECT. I T HAS ALSO BEEN INFORMED THAT THE SIZE OF THE PLOT WAS 4100 SQ.METE RS OR 44132 SQ.FT. OR 1.01 ACRE. IT HAS ALSO BEEN INFORMED THAT BUILT-UP AREA OF EACH UNIT WAS BETWEEN 550 SQ.FT. TO 1100 SQ.FT. THE ASSESSEE HAS CLAIMED THE DEDUCTION IN RESPECT OF THE ENTIRE PROFIT OF THE SAID HOUSING PROJECT OF RS.71 10 713/-. THE ASSESSEE HAS FURNISHED CERTAI N DETAILS IN RESPECT OF THE SAID HOUSING PROJECT; REPRODUCED BELOW:- 1) EXTRACT 7/12 SHOWING THAT A) LAND IN QUESTION WAS ORIGINALLY OWNED BY LAXMA NBHAI RAMJIBHAI PATEL. HE GOT THE SAID LAND CONVERTED IN TO N.A. LAND I.E. FOR THE RESIDENTIAL PURPOSE AS PER THE OR DER NO.RD/LND/N.A.173/93/3315 DATED 09.09.1993. B) SHRI LAXMANBHAI RAMJIBHAI PATEL SUB-DIVIDED THE ABOVE PLOT OF LAND INTO 11 PLOTS ON 29.09.93 WITH DIFFER ENCE SURVEY NOS.4/1/1 TO 4/1/11. C) SHRI LAXMANBHAI RAMJIBHAI PATEL SOLD THE SAID PLOT S TO M/S.TAINWALA CHEMICALS & PLASTICS [INDIA] LIMITED A S PER SALE DEED EXECUTED ON 20.04.94. D) M/S.TAINWALA CHEMICALS & PLASTICS [INDIA] LIMITED AMALGAMATED THE SAID ELEVEN PLOTS/SURVEY NUMBERS IN TO ONE ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 4 - SURVEY NUMBER AND ALLOTTED NEW AND DISTINCT SURVEY NO.4/1 TOTALLY ADMEASURING 4100 SQ.MTRS. ON 30.08.94. E) M/S.TAINWALA CHEMICALS & PLASTICS [INDIA] LIMITED S OLD THE SAID PLOT OF LAND OF M/S.AGRAWAL CONSTRUCTION VIDE SALE DEED DATED 29.11.2003. 2) COPY OF APPROVAL LETTER OF ASSOCIATE TOWN PLANNER TCPD D & NK DATED 19.03.97. COPIES OF REVISED PERMISSIO NS DATED 29.05.02 AND 19.05.04. 3) A STATEMENT GIVING DETAILS OF FLATS SOLD DURING THE YEAR IN THE FORMAT; BUILDING AND FLAT NO. DATE OF SALE DEED S IZE OF FLAT IN SQ.FT RATE PER SQ.FT AND SALE DEED VALUE. 4) COMPLETION/OCCUPANCY CERTIFICATE FROM THE LOCAL AUT HORITY. 5) SAMPLE COPIES OF AGREEMENTS EFFECTED DURING THE YEA R. 6) AS REGARDS THE SALE OF 12 FLATS TO M/S.TAINWALA CHE MICALS & PLASTICS INDIA LTD. IN LIEU OF SALE CONSIDERATION O F LAND PRICE. IT WAS SUBMITTED THAT PROVISIONS OF SECTION 80IB(1) DO NOT BAR IN SELLING OF THE RESIDENTIAL UNITS TO ONE AND ONLY PERSON/ENTITY. THE ASSESSEE FURTHER STATED THAT SA ID FLATS WERE PURCHASED BY M/S.TAINWALA CHEMICALS & PLASTICS INDIA LTD. FOR ITS EMPLOYEES. 7) AS REGARDS DIFFERENT-DIFFERENT APPROVAL FOR EACH PR OJECT IT IS EXPLAINED BY ASSESSEE THAT AS PER THE PROVISIONS OF SECTION 80IB(1) THE HOUSING PROJECT SHOULD BE APPROVED BEF ORE 31.03.2007. IN THE PRESENT CASE APPROVAL WAS GRAN TED BY THE LOCAL AUTHORITY ON 19.03.97 AND CONSTRUCTION OF PROJECT WAS COMMENCED DURING THE YEAR 2001-02 RELEVANT TO A .Y. 2002-03. SUBSEQUENTLY REVISED APPROVALS WERE OBTA INED FOR THE DIFFERENT BUILDINGS IN THE SAME PLOT OF LAND. ASSESSEE RELY ON THE EXPLANATION TO SECTION 80IBG(1) WHICH R EAD AS FOLLOWS: EXPLANATION FOR PURPOSE OF THIS CLAUSE [I] IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE SUCH HOUSING PR OJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE O N WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY. ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 5 - ASSESSEE CLAIMED THAT THE WHOLE LAND IS ONE ACRE AN D IT GOT ENTIRE PROJECT SANCTIONED ON 19.03.97 AND THEREAFTE R IT INTRODUCED CHANGE IN PLAN OF SUCH BUILDING AND THER EFORE OBTAINED REVISED PERMISSIONS FROM TIME TO TIME. TH EREFORE WHAT IS TO BE SEEN IN ITS ENTIRETY AND NOT WHAT IS BEING DONE TO EACH BUILDING SEPARATE? 8) ASSESSEE CLAIMED THAT BUILT-UP AREA OF EACH FLA T IS LESS THAN 1500 SQ.FT. AS PER CHART OF FLATS SOLD DURING THE Y EAR AND COPIES OF AGREEMENTS EFFECT MADE AVAILABLE FOR VERI FICATION AT THE TIME OF ASSESSMENT PROCEEDINGS. 3.1. THEREAFTER A SURVEY U/S.133A OF THE ACT WAS C ONDUCTED AT THE SAID PREMISES. THE SAID SURVEY PARTY HAS ALSO RECORDED A STATEMENT AND MADE THE FOLLOWING OBSERVATIONS:- A) THE ASSESSEE HAS PROJECT IN THE NAME AND STYLE OF RAMAYAN THE PROFITS OF WHICH HAS BEEN CLAIMED EX EMPT U/S.80IB OF THE ACT. HOWEVER AS PER THE SALE DEED EXECUTED ON 29.01.03 THE ASSESSEE WAS GIVEN ONLY DEVELOPMENT RIGHTS BY THE OWNER OF THE LAND M/S.TAINWALA CHEMICALS & P LASTICS INDIA LTD. AND NO OWNER SHIP WAS EXCHANGED. IT WAS ALSO FOUND THAT THE ASSESSEE AGARWAL CONSTRUCTION AGREED TO ADJUST A SUM OF RS.14 LACS (PURCHASE PRICE) AGAINST THE SALE OF ONE FULL SET OF FLATS TO THE OWNER OF THE LAND I .E. TAINWALLA CHEMICALS & PLASTICS INDIA LTD. IT APPEARS THAT TH E SALE PRICE AT RS.14 LAKHS WAS NOT PAID TO THE VENDOR BY MONEY BUT ADJUSTED AGAINST THE SALE PRICE OF THE ENTIRE B UILDING RAMAYAN-A CONSISTING OF 12 FLATS. THIS SHOWS THAT THE FLATS CONSTRUCTED WERE NOT SOLD TO THE PUBLIC AT LARGE NO R WAS IT AVAILABLE TO THE GENERAL PUBLIC AS THE SAID BUILDIN G WAS CONSTR4UCTED AND GIVEN TO THE VENDOR OF THE LAND AG AINST THE SALE PRICE I.E. RS.14 LAKHS. ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 6 - B) IT WAS ALSO FOUND THAT THE ASSESSEE HAS CONSTR UCTED AND SOLD FOUR MORE BUILDINGS I.E. RAMAYAN-B (16 FLATS) RAMA YAN C&D-(32 FLATS) RAMAYAN-E (27 FLATS). FOR ALL THES E CONSTRUCTION ACTIVITIES THE ASSESSEE HAS OBTAINED SEPARATE APPROVAL/PERMISSION FROM THE ATP OF D & NH ON VARIO US DATES. THEREFORE EVERY PROJECT IS CONSIDERED AS A SINGLE UNIT AS PER THE PERMISSION OBTAINED FOR CONSTRUCTIN G THE PARTICULAR BUILDING. C) THE WHOLE LAND PURCHASED BY THE ASSESSEE WAS O NLY AROUND 1 ACRE IN WHICH THE ASSESSEE CONSTRUCTED 4 UNITS AF TER GETTING APPROVAL FOR EACH INDIVIDUAL INDEPENDENT BUILDING O N VARIOUS DATES. THIS SHOWS THAT NONE OF THE PROJECT ON WHICH THE ASSESSEE HAS CLAIMED DEDUCTION U/S.80IB HAD THE PRESCRIBED AREA OF LAND. 3.2. THE AO HAS FINALLY CONCLUDED THAT THE LAND IN QUESTION WAS NOT OWNED BY THE ASSESSEE THEREFORE THE ASSESSEE WAS N OT ELIGIBLE FOR CLAIM OF DEDUCTION 80IB(10) OF THE ACT. AGAINST THE SAID REJECTION OF THE CLAIM THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY. 4. THE LD.CIT(A) HAS EXAMINED THE FACTUAL AS WELL A S LEGAL ASPECT OF THE CASE IN THE LIGHT OF THE DECISION OF RADHE DEVE LOPERS & ORS. VS. ITO REPORTED AT 113 TTJ 300 (AHD.) AND AFTER CALLING A REMAND REPORT FROM THE AO CONCLUDED AS UNDER:- 5.4. I HAVE CONSIDERED THE CONTENTION OF THE APPE LLANT AND THE OBSERVATION OF THE AO IN THE ASSESSMENT ORDER AS WE LL AS REMAND REPORT. IT IS A FACT THAT THE APPELLANT FIRM HAS D EVELOPED AND BUILT A HOUSING PROJECT ON A LAND NOT BELONGING TO IT AND IT HAS ENTERED INTO A DEVELOPMENT AND CONSTRUCTION AGREEMENT WITH THE LAND OWNERS WHERE UNDER THE LAND OWNERS AGREED TO GET T HE LAND DEVELOPED THROUGH THE APPELLANT FIRM AND NECESSARY PROJECT APPROVAL WERE GRANTED BY THE CONCERNED AUTHORITY. IT IS ALSO TRUE ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 7 - THAT ALL RIGHTS OF DEVELOPMENT AND CONSTRUCTION AND TO DEAL WITH THE LAND FOR A CONSIDERATION WERE EFFECTIVELY TRANS FERRED TO THE APPELLANT AND THE APPELLANT WAS PUT IN POSSESSION O F THE LAND. IT IS ALSO NOT DISPUTED BY THE AO THAT THAT THE SIZE OF THE PLOT ON WHICH THE PROJECT WAS DEVELOPED WAS IN EXCESS OF ONE ACRE AND THE SIZE OF EACH RESIDENTIAL HOUSE WAS LESS THAN 1500 SQ.FT. AN D THEREFORE I FIND FORCE IN THE CONTENTION THAT THE APPELLANT IS THE UNDERTAKING THAT DEVELOPED AND BUILT THE HOUSING PROJECT AND HA S FULFILLED THE CONDITIONS PRECEDENT FOR A VALID CLAIM FOR DEDUCTIO N U/S.80IB(10) AND THEREFORE IS ENTITLED TO DEDUCTION U/S.80IB(10) IRRESPECTIVE OF THE FACT WHETHER IT IS THE OWNER OR NOT AS THE ONLY SINE-QUA-NON FOR A VALID CLAIM U/S.80IB(10) IS THAT THE UNDERTAKING MUST DEVELOP AND BUILD HOUSING PROJECT BE IT ON THEIR OWN LAND O R ON THE LAND OF OTHERS. MOST RELEVANT ISSUE HERE IS ALREADY DISCUS SED IN PODAR CEMENTS CASE (1997) 226 ITR 625 (S.C) WHICH IS A T REND-SETTER IN APPRECIATING THE CONCEPT OF OWNERSHIP. I AM THER EFORE OF THE VIEW THAT ASSISTANT FROM THE LAW LAID DOWN THEREIN CAN BE TAKEN FOR FINDING OUT THE MEANING OF THE TERM OWNED AS OCCU RRING IN SECTION 32(1) OF THE ACT. .. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS LEGAL PROPOSITION LAID DOWN BY THE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD. REPORTED IN 239 ITR 775 (SC) A ND RADHE DEVELOPERS V/S. ITO (ITAT A BENCH) (ITA NO.2482/ AHD/2006). I HOLD THAT THE APPELLANT IS ENTITLED FOR CLAIM OF DEDUCTION OF THE PROFIT DERIVED FROM CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL HOUSING PROJECT. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE ITAT AHMEDABAD IN CASE OF RADHE DEVELOPERS V/S. ITO (ITAT A BENCH) (ITA NO.2482/AHD/2006) I FIND THA T THE AO IS NOT JUSTIFIED IN DENYING THE BENEFIT OF THE DEDUCTI ON U/S.80IB(10) TO THE APPELLANT. THE APPELLANTS GROUND NO.1 IS ALLOWED . NOW THE REVENUE IS IN APPEAL. ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 8 - 5. FROM THE SIDE OF THE REVENUE LD.SR.DR MR. SAMIR TEKRIWAL APPEARED AND VEHEMENTLY ARGUED THAT AS PER THE SALE S EXECUTED BY THE ASSESSEE IT WAS EVIDENT THAT A BUILDING AS A WHOLE WAS TRANSFERRED. WHICH MEANS THAT THERE WAS NO SALE OF EACH UNIT OR A SINGLE FLAT HAVING AREA OF 1500 SQ.FT. OR LESS THAN THAT. BECAUSE THE ASSESSEE HAS NOT SOLD INDIVIDUAL UNITS OF FLATS BUT SOLD THE BUILDING AS A WHOLE THEREFORE NOT ENTITLED FOR THE CLAIM OF DEDUCTION. HIS SECOND A RGUMENT WAS THAT THE LAND WAS NOT OWNED BY THE ASSESSEE AND THAT THE DOM AIN OVER THE SAID LAND WAS NOT ACQUIRED BY THE ASSESSEE THEREFORE NO T ENTITLED FOR U/S.80IB(10) OF THE ACT. THE THIRD ARGUMENT OF LD .SR.DR MR.SAMIR TEKRIWAL IS THAT THE PROJECT WAS SANCTIONED IN PHAS ES AND EACH PROJECT WAS THUS CONSTRUCTED ON THE LAND HAVING PLOT SIZE L ESS THAN 1.01 ACRE. LD.SR.DR HAS ALSO FURNISHED SUBMISSIONS IN WRITING SUMMARIZED AS FOLLOWS:- CASE OF THE A.O. 2. A.O. HAS DISALLOWED THE CLAIM OF 80IB(10) DEDUC TION OF RS.71 10 713/- FOR FOLLOWING 3 REASONS AS MENTIONED ON PAGE 4 OF THE ASSESSMENT ORDER. (A) ASSESSMENT WAS NOT OWNER OF THE LAND IT WAS G IVEN ONLY DEVELOPMENT RIGHTS BY THE OWNER M/S.TAINWALA CHEMIC ALS & PLASTICS INDIA LTD. AND NO OWNERSHIP WAS EXCHANGED . (B) FOUR BLOCKS A B C & D WERE CONSTRUCTED BY TH E ASSESSEE ON THE LAND OF 1.00 ACRE. BLOCK A WAS CON STRUCTED AS PER ORIGINAL APPROVAL AND TRANSFERRED TO THE LAN D OWNER AGAINST ADJUSTMENT OF RS.14.00 LAKHS BEING THE PART OF THE SALE CONSIDERATION OF LAND. FOR THE REMAINING BLOC KS B C & ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 9 - D SEPARATE APPROVAL WERE TAKEN THEREFORE EVERY PROJ ECT IS A SINGLE UNIT AS PER SEPARATE PERMISSIONS OBTAINED. 3. AGAINST THE DISALLOWANCE OF 80IB(10) ON THREE GR OUNDS . LD. CIT(A) CONSIDERED THE ISSUE ONLY ON THE GROUND B EING THE OWNERSHIP OF THE LAND AND DELETED THE DISALLOWANCE FOLLOWING THE RADHE DEVELOPERS CASE. HOWEVER IN THE PROCESS L D. CIT(A) FAILED TO CONSIDER AND ADJUDICATE THE FACTUAL ISSUE S RAISED BY THE AO WITH REGARD TO COMPLIANCE TO THE CONDITIONS OF 8 0IB. 4. FURTHER FOLLOWING VIOLATIONS ARE PART OF TH E RECORD WHICH ARE BEFORE THE HON'BLE ITAT. 4.1. AS PER 80IB(10) THE DEVELOPER HAS A CONSTRUCT AND SELL RESIDENTIAL UNITS WHICH ARE LESS THAN 1500 SFT. WHI CH IS SINE-QUA- NON FOR AVAILING THE DEDUCTION. 4.2. ASSESSEE CONSTRUCTED BLOCK A RAMAYAN AND SOL D TO LAND OWNER (M/S.TAINWALA CHEMICALS & PLASTICS INDIA LTD. ). IT MAY BE SEEN FROM THE AGREEMENT DATED 07.02.2002 PAGE 4 T HAT THE ASSESSEE SOLD 640.98 SQ.MTR (204.04 SQ.MTR. ON GF 218.07 SQ. MTR. ON FF AND 218.07 SQ.MTR. ON SF). THIS FACT MAY ALS O BE VERIFIED FROM THE ACTUAL SALE DEED OF BLDG. A DATED 29.01 .2003 (P.29-51 OF PAPER BOOK SEE PAGES INTERNAL 37 38 & 39). WHA T WAS SOLD TO M/S.TAINWALA CHEMICALS & PLASTICS INDIA LTD. WAS NOT 12 FLATS BUT COMPLETE FLOOR SPACE OF 640.98 SQ. METERS ON THREE FLOORS OF BUILDINGS RAMAYAN A. THEREFORE THERE IS NO SALE OF 12 FLATS OF EACH BELOW 1500 SFT. BUT WAS OF 640.98 SQ.MTR. FLOOR SPACE WHICH IS AGAINST THE CONDITIONS OF 80IB. 5. AS ALREADY MENTIONED ASSESSEE CONSTRUCTED RAMAY AN BLOCK A AS PER APPROVAL GIVEN IN 1997 AND AFTER SUCH CONST RUCTION APPROVALS WERE TAKEN IN 2002 AND 2004 WHICH ARE PLA CED ON FILED. LD. CIT(A) FAILED TO CONSIDER THE REVISED APPROVAL IN 2004 IS IN THE NAME OF THE ASSESSEE AS AGAINST THE ORIGINAL TWO A PPROVALS WHICH WERE IN THE NAME OF M/S.TAINWALA CHEMICALS & PLASTI CS INDIA LTD. ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 10 - (1977 & 2002 APPROVALS) WHICH MAKES IT A SEPARATE APPROVAL IN THE EYES OF THE LAW. 5.1. ON THE ISSUE OF REVISED APPROVALS AR HAS RE LIED ON THE ORDER OF THE ITAT NAGPUR IN THE CASE OF ITO WARD-8 (1) NAGPUR VS. AIR DEVELOPERS REPORTED AT 122 ITD 125 (NAGPUR) . THIS CASE IS DISTINGUISHABLE. IN THAT CASE ENTIRE LAND WAS 6 4 ACRES AND EVEN AFTER MULTIPLE APPROVALS EACH APPROVAL WAS ON AN A REA OF MORE THAN ONE ACRE; WHERE AS IN THE PRESENT CASE ENTIRE LAND IS ONLY 1.00 ACRE. 6. FURTHER AS DISCUSSED IN PARA 4.2 ABOVE ASSESS EE DID NTO CONSTRUCT AND SELL UNITS OF 1500 SFT. IN RAMAYAN BL OCK A BUT SOLD CONSTRUCTED ARE AS 640.98 SQ.METERS AS ONE UNIT TH EREFORE DEDUCTION 80IB DISALLOWED BY THE AO MAY BE UPHELD SETTING ASIDE THE ORDER OF THE CIT(A). 7. NOW AS TO THE ISSUE OF 1500 SFT. UNITS NOT SOLD IN RAMAYAN BLOCK A AND THE CONTENTION THAT THE FAILURE OF THE ASSESSEE/NON COMPLIANCE ON THIS COUNT WAS NOT THE CASE OF THE A O. IT MAY BE TRUE BUT THE SAME MAY BE EXAMINED AND ADJUDICATED BY THE HON'BLE ITAT. RELIANCE IS PLACED AS THESE CASE LAW S. KAPURCHAND CHEMICAL VS. CIT (SC) 131 ITR 451 IT HAS BEEN HELD BY THE APEX COURT THAT APPELLATE AUTHORITY HAS THE JURISDICTION AS WELL A S THE DUTY TO CORRECT ALL ERRORS IN THE PROCEEDINGS UNDER APPEAL AND TO ISSUE IF NECESSARY APPROPRIATE DIRECTIONS TO THE AUTHORI TY AGAINST WHOSE DECISION THE APPEAL IS PREFERRED TO DISPOSE O F THE WHOLE OR ANY PART OF THE MATTER AFRESH UNLESS FORBIDDEN FROM DOING SO BY THE STATUTE. 8. THEREFORE IT IS REQUESTED THAT THE HON'BLE ITAT BEING THE FINAL FACT FINDING AUTHORITY CAN TAKE INTO ACCOUNT ALL THE FACTS OF THE CASE RELEVANT TO THE ISSUE ON HAND AND ADJUDICA TE OR ISSUE APPROPRIATE DIRECTIONS AS DEEMED FIT. ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 11 - 6. FROM THE SIDE OF THE ASSESSEE LD.AR MR.S.N.L.AG ARWAL APPEARED AND INFORMED THAT THE DECISION OF M/S.RADHE DEVELOP ERS & ORS.(SUPRA) WHICH WAS RELIED UPON BY CIT(A) NOW STOOD UPHELD B Y THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF DY.CIT VS . RADHE DEVELOPERS INDIA LTD. IN TAX APPEAL NO.171 OF 1999 VIDE ORD ER DATED 01/04/2009 {REPORTED AT [2010]329 ITR 01 (GUJ.)}. THE HONBLE COURT HAS OPINED THAT SINCE THE SAID ASSESSEE HAD UNDERTAKEN THE DEV ELOPMENT OF HOUSING PROJECT AT ITS OWN RISK AND COST AND THAT THE LAND OWNER HAD ACCEPTED THE FULL PRICE OF THE LAND THEREFORE THE ENTIRE RISK O F INVESTMENT AND EXPENDITURE WAS OF THE ASSESSEE THEREFORE ENTITLED FOR CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. 7. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES WE ARE OF THE CONSCIENTIOUS VIEW THAT NOW THIS TYPE OF CONTROVER SY IS VERY WELL SETTLED BY THE HONBLE JURISDICTIONAL HIGH COURT. AS FAR AS OF THE PRESENT SET OF FACTS ARE CONCERNED THE ADMITTED FACTUAL POSITION WAS THAT THE ASSESSEE HAD ACQUIRED THE DEVELOPMENT RIGHT FOR CONSTRUCTION OF A HOUSING PROJECT OVER THE LAND WHICH WAS HAVING TOTAL AREA OF 4100 S Q.METERS. THE ASSESSEE HAS INFORMED THAT ONE M/S.TAINWALA CHEMICA LS & PLASTICS INDIA LTD. SOLD THE SAID PLOT TO THE ASSESSEE VIDE A SALE DEED DATED 29/11/2003. THEREAFTER THE ASSESSEE HAS OBTAINED CERTAIN PERM ISSIONS AS ALSO REVISED PERMISSIONS TIME AND AGAIN FROM THE TOWN PLANNER A S PER THE DATES ALREADY MENTIONED HEREINABOVE. THOSE APPROVALS W ERE ADMITTEDLY RECEIVED BY THE ASSESSEE BEFORE 31/03/2007. BECAUS E OF THESE REASONS AND ADMITTED FACTUAL POSITION WE HEREBY HOLD THAT THE ASSESSEE HAD POSSESSION AS WELL AS DOMAIN OVER THE PLOT IN QUEST ION WHICH WAS ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 12 - UNDISPUTEDLY USED FOR CONSTRUCTION OF RESIDENTIAL BUILDINGS. THE NEXT QUESTION WAS THAT ONE OF THE BUILDING STYLED AS RA MAYAN WAS TRANSFERRED BACK TO M/S.TAINWALA CHEMICALS & PLASTI CS INDIA LTD. FOR A SALE PRICE OF RS.14 LACS WHICH WAS STATED TO BE ADJ USTED AGAINST THE AMOUNT OF DEVELOPMENT RIGHTS PAID BY THE ASSESSEE. LD.SR.DR AND THE AO HAS EXPRESSED THAT IT WAS A SALE ENBLOC OF A BUI LDING AND NOT A SALE OF FLATS THEREFORE THE ENTIRE AREA HAS EXCEEDED THE PRESCRIBED LIMIT OF 1500 SQ.FT. WE ARE NOT CONVINCED WITH THE SAID ARGUMENT BECAUSE THE SURVEY PARTY HAS INFORMED THE AO THAT RAMAYAN BUILDING C ONSISTED OF 12 FLATS. THE AO HAS NOT PLACED ON RECORD ANY EVIDENCE CONTRA RY TO THE SAID FACT WHICH WAS INFORMED BY THE SURVEY PARTY. FACTS HAV E REVEALED THAT THE AREA WHICH WAS CONSTRUCTED IN RAMAYAN BUILDING WA S IN RESPECT OF 12 FLATS AND THEREFORE THE VIEW AS EXPRESSED BY LD.S R.DR WAS VERY MUCH A TECHNICAL VIEW THAT IF A BUILDING WAS SOLD NEVERTH ELESS CONTAINING FLATS BUT NOT ELIGIBLE FOR THE DEDUCTION. ACCORDING TO US THIS IS A VERY NARROW INTERPRETATION OF THE SCHEME AND THE BENEFIT AS PRE SCRIBED UNDER THE STATUTE SHOULD NOT BE DENIED MERELY ON THIS TECHNIC AL REASON THOUGH OTHERWISE ALLOWABLE UNDER THE PROVISIONS OF THE SAI D SECTION. LASTLY WE ARE ALSO NOT CONVINCED BY THE ARGUMENT OF THE LD.SR .DR THAT THERE WERE NUMBER OF SANCTIONS IN RESPECT OF THE BUILDINGS IN QUESTION AND THEREFORE EACH BUILDING WAS CONSTRUCTED OVER A PLOT HAVING AR EA LESS THAN ONE ACRE. ADMITTEDLY THOSE SANCTIONS WERE NOT BUILDING-WISE BUT THE SANCTIONS WERE FOR THE ENTIRE PROJECT SITUATED ON A PIECE OF PLOT HAVING 4100 SQ.METERS. THAT PLOT WAS NOT DIVIDED OR SUB-DIVIDE D HENCE IT WAS WRONG ON THE PART OF THE REVENUE AUTHORITIES TO DRAW A PR ESUMPTIVE INFERENCE THAT BY DIFFERENT SANCTIONS A SEPARATE PROJECT WAS ALLOWED FOR ITA NO.2375/AHD /2008 ASST.CIT VS. M/S.AGRAWAL CONSTRUCTION CO. ASST.YEAR - 2005-06 - 13 - CONSTRUCTION. MERELY ON THE GROUND OF DIFFERENT SA NCTIONS THE AO HAD WRONGLY DISALLOWED THE CLAIM. WE FIND NO FORCE I N THIS ARGUMENT AS WELL. FINALLY WE HEREBY FOLLOW THE VERDICT OF T HE HONBLE GUJARAT HIGH COURT PRONOUNCED IN THE CASE OF RADHE DEVELOPERS IN DIA LTD.(SUPRA) AND DISMISS THE GROUNDS AS WELL AS THE ADDITIONAL GROUN DS OF THE REVENUE. 8. IN THE RESULT REVENUES APPEAL IS DISMISSED. SD/- SD/- ( . .!'#$ ) ( ) % ( A.K. GARODIA ) ( M UKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 09/ 02 /2012 63..( .(../ T.C. NAIR SR. PS 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-VALSAD 5. 7 >> >/ // / + + + + ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD 1. DATE OF DICTATION.. 6.2.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 6.2.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 9.2.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 9.2.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER