The ACIT, (1), v. M/s Agrawal Construction,

ITA 243/IND/2008 | misc
Pronouncement Date: 11-05-2010 | Result: Dismissed

Appeal Details

RSA Number 24322714 RSA 2008
Bench Indore
Appeal Number ITA 243/IND/2008
Duration Of Justice 1 year(s) 11 month(s) 11 day(s)
Appellant The ACIT, (1),
Respondent M/s Agrawal Construction,
Appeal Type Income Tax Appeal
Pronouncement Date 11-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 11-05-2010
Date Of Final Hearing 06-05-2010
Next Hearing Date 06-05-2010
Assessment Year misc
Appeal Filed On 30-05-2008
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER 1.ITA NO.242/IND/08 A.YS. 2004-05 AND 2. ITA NO.243/IND/08 A.YS. 2004-05 ASSTT. COMMISSIONER OF INCOME TAX 1(1) BHOPAL PAN AAEFA-8222A APPELLANT VS 1. M/S AGRAWAL BUILDERS BHOPAL 2. M/S AGRAWAL CONSTRUCTION BHOPAL RESPONDENT APPELLANT BY : SHRI K.K. SINGH RESPONDENT BY : SHRI H.P. VERMA AND SHRI ASHISH GOYAL O R D E R PER BENCH THESE APPEALS ARE BY THE REVENUE AGAINST THE DIFFER ENT ORDERS OF THE LEARNED CIT(A) DATED 6.3.2008. 2 2. THE SUM & SUBSTANCE OF VARIOUS GROUNDS TAKEN BY THE REVENUE IS THAT ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80IB(10 ) FOR ENTIRE PROJECTS THUS ALLOWING RELIEF OF RS.72 08 522/- AND RS.1 63 10 147/- RESPECTIVELY TO THE ASSESSEE EVEN THOUGH THE VIOLATION OF CLAUSE OF SUB-SECTION 10 OF SECTION 80IB OF THE IT ACT HAS BEEN ESTABLISHED. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHRI K .K. SINGH LEARNED CIT DR AND SHRI H.P. VERMA AND SHRI ASHISH GOYAL LD. COUNSEL FOR THE ASSESSEE. AT THE OUTSET IT WAS CLAIMED THA T THE IMPUGNED ISSUE IS COVERED BY THE DECISION DATED 16 TH APRIL 2010 OF THE TRIBUNAL IN THE CASE OF ACIT V. SMT. SAROJ KAPOOR (ITA NO. 194/IND/ 2008 AND CO NO.51/IND/2008). THIS FACTUAL MATRIX WAS NOT CONTR OVERTED BY THE REVENUE. 3. ON PERUSAL OF RECORD AND AFTER HEARING THE ASSERTIONS/ADMISSIONS/SUBMISSIONS OF RIVAL PARTIES WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID O RDER: THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECT ION FILED BY THE ASSESSEE ARISE OUT OF ORDER OF THE LD. CIT(A )-I BHOPAL DATED 18.01.2008 FOR THE ASSESSMENT YEAR 2004-05. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. FIRST WE SHALL TAKE UP THE REVENUES APPEAL WHEREI N THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LD. CIT (A) IN ALLOWING DEDUCTION TO THE ASSESSEE U/S 80IB(10) ON PRO-RATA BASIS. THIS IS THE ONLY ISSUE INVOLVED THOUGH THE REVENUE HAS TAKEN FIVE GROUNDS. 3 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAG ED IN THE BUSINESS OF DEVELOPING AND CONSTRUCTION OF HOUSING PROJECTS AND CLAIMED DEDUCTION U/S 80IB(10) AMOUNTING TO RS. 1 5 2 67 762/-. THE A.O. FOUND THAT IN THE YEAR UNDER CONSIDERATION THE ASSESSEE DEVELOPED AND SOLD HOUSING PROJECTS COMPRISING OF R OW HOUSES AND FLATS IN GREEN CITY AT E-8 ARERA COLONY BHOPA L. THE A.O. IN ORDER TO ASCERTAIN ACTUAL BUILT UP AREA OF EACH HOUSE OF THE PROJECT CONDUCTED A PHYSICAL VERIFICATION ON THE SI TE ON 8.12.2006 AND ON TAKING MEASUREMENT OF THREE FLATS THE BUILT UP AREA OF SUCH FLATS WAS FOUND TO BE MORE THAN 1500 SQ.FT. TH E DETAILS OF SUCH FLATS ARE AS UNDER :- HOUSE NO. MEASURED & PROJECT NAME OF THE OWNER/OCC UPIER TOTAL BUILT UP AREA A-2-18 GREEN CITY SMT. KAVITA BHATT 1875.33 SQ.FT. A-4 GREEN CITY SHRI O.P. BEOHAR 1928.56 SQ.FT. A-6 GREEN CITY SMT. KRISHNA MURTHY W/O SHRI C. S. KRISHNA MURTHY 2639.14 SQ.FT. 5. THE A.O. ACCORDINGLY GAVE THE COPIES OF THE MEASUREMENT SO TAKEN FOR THE COMMENTS OF THE ASSESS EE AND WAS ALSO REQUIRED TO EXPLAIN AS TO WHY THE DEDUCTIO N U/S 80IB(10) SHOULD HAVE BEEN DISALLOWED. THE ASSESSEE VIDE ITS LETTER DATED 26.12.2006 HAS SUBMITTED THAT MEASUREM ENTS WERE NOT CORRECTLY TAKEN AND ALSO SUBMITTED THE AREAS AS PER THE REPORT OF A TECHNICAL EXPERT WAS WITHIN THE PRESCR IBED LIMIT OF 1500 SQ.FT.THE A.O. HOWEVER REJECTED SUCH CLAIM O F THE ASSESSEE AND SUCH REPORT FOR THE REASON THAT THE ME ASUREMENTS WERE DONE BY THE DEPARTMENT IN THE PRESENCE OF ASSE SSEES REPRESENTATIVE. THEREAFTER THE A.O. REFERRED TO TH E PROVISIONS OF SECTION 80IB(10) AND CLAUSE (A) OF SECTION 80IB( 14) AND HELD THAT DEFINITION OF BUILT UP AREA HAD BEEN DEFINED WHICH WAS OF CLARIFICATORY NATURE AND THEREFORE AS PER THIS DE FINITION THE MEASUREMENTS TAKEN BY THE ENGINEER HIRED BY THE ASS ESSEE WAS NOT OF MUCH USE AS THERE WAS NO CONCEPT OF NET BUIL T UP AREA IN SECTION 80IB. THE LD. A.O. ALSO HELD THAT PROVISION S OF SECTION 80IB(14)(A) OF THE ACT WAS OF CLARIFICATORY NATURE HENCE HAD RETROSPECTIVE APPLICATION. THE A.O. FURTHER FOUND T HAT IN CASE OF HOUSE NO. A/6 ON THE DATE OF PHYSICAL VERIFICATION NOBODY HAD POINTED OUT ANY DISCREPANCIES IN THE MEASUREMENTS T AKEN BY THE DEPARTMENT AND FACT OF SO CALLED ADDITIONAL CONSTRU CTION BY THE OWNERS SUBSEQUENTLY WAS BROUGHT TO THE NOTICE OF TH E DEPARTMENT WHICH WAS AN AFTER THOUGHT ON THE PART OF THE ASSESSEE. IT WAS ALSO HELD THAT EVEN IF 400 SQ.FT. AREA WAS EXCLUDED THEN ALSO THE REMAINING PART WAS MORE THAN THE LIMIT PRESCRIBED U/S 80-IB. ACCORDINGLY THE A.O. REJECTE D THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80-IB(10) OF THE ACT. AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER INTO APPEAL 4 BEFORE THE LD. CIT(A) WHEREIN IT WAS CONTENDED THA T THE ASSESSEE HAD COMPLIED WITH ALL THE THREE CONDITIONS AS LAID DOWN U/S 80IB(10). THE ASSESSEE ALSO GAVE THE DETAI LS OF THE TYPES OF FLATS CONSTRUCTED BY THE ASSESSEE. IN THIS REGARD THE ASSESSEE SUBMITTED THAT IN FIRST PHASE THE RESIDEN TIAL FLATS WERE CONSTRUCTED ADMEASURING 929.46 SQ.FT. 1082.35 SQ.F T. OF WHICH NO MEASUREMENTS WERE DONE BY THE DEPARTMENT. IN TH E SECOND PHASE 9 A-1 TYPE AND 13 A-II TYPE DUPLEX HOUSES W ERE CONSTRUCTED AND THE MEASUREMENT OF DUPLEX HOUSES WA S FOUND LESS THAN 1500 SQ.FT. BY THE APPROVED VALUATION OFF ICER. IT WAS ALSO SUBMITTED THAT IN THE THIRD PHASE DUPLEX HOUS ES AND EWS FLATS WERE CONSTRUCTED AND THE AREA OF SUCH DUPLEX RESIDENTIAL WAS 1254.22 SQ.FT. AND EWS FLATS WAS 217 SQ.FT. IT WAS ALSO SUBMITTED THAT PHYSICAL MEASUREMENT OF HOUSES CONST RUCTED IN THIRD PHASE WAS ALSO NOT DONE BY THE DEPARTMENT. T HE ASSESSEE ALSO SUBMITTED THAT IN CASE OF A/6 DUPLEX HOUSES T HE DEPARTMENT PRIMARILY MEASURED THE AREA THEREOF AT 3 812 SQ.FT. WHICH WAS SUBSEQUENTLY CORRECTED TO 2639.14 SQ.FT. BY THE DEPARTMENT ON ITS OWN WHICH FACT INDICATED THAT TH E ASSESSEES REPRESENTATIVE HAD NOT CHECKED THE MEASUREMENT AND ITS CALCULATION. IT WAS ALSO CONTENDED THAT THE OWNER O F SUCH HOUSE HAD ALSO ACCEPTED THAT 400 SQ.FT. OF ADDITIONAL POR TION WAS CONSTRUCTED SUBSEQUENTLY BY THE OWNER. THE ASSESSEE ALSO SUBMITTED THAT THE PROVISIONS OF CLAUSE (A) OF SUB SECTION (14) OF SECTION 80IB WERE OF PROSPECTIVE NATURE AND THE CORRECT METHOD TO CALCULATE THE BUILT UP AREA HAD TO BE IN ACCORDANCE WITH M.P. BHOOMI VIKAS RULES 1984 WHICH WAS APPLI CABLE IN THE STATE OF M.P. WHERE THE SUCH HOUSING PROJECT HA D BEEN CONSTRUCTED. THE ASSESSEE ALSO REFERRED TO THE METH ODOLOGY OF MEASUREMENT AS PER THESE RULES TO COMPUTE THE BUILT UP AREA WHICH WAS ALSO ADOPTED BY THE APPROVED VALUATION OF FICER AND ON THAT BASIS IT WAS FOUND THAT SUCH BUILT UP AREA WAS LESS THAN 1500 SQ.FT. THE ASSESSEE ALSO SUBMITTED THAT THE ME ASUREMENT WAS DONE BY THE DEPARTMENT THROUGH UNQUALIFIED PERS ONS INSPITE OF THE FACT THAT SERVICES OF TECHNICAL PERS ONNEL TO CARRY OUT SUCH JOBS WERE ALSO AVAILABLE WITH THE DEPARTME NT AND THIS APPROACH OF THE DEPARTMENT INDICATED THAT IT WAS A PREDETERMINED ACTION TO DISALLOW THE ELIGIBLE CLAIM OF THE ASSESSEE. THE LD. CIT(A) AFTER CONSIDERING ALL THE DOCUMENTS AS WELL AS LEGAL POSITION NARRATED BY THE ASSESSEE HELD THAT THE ASSESSEE WAS ENTITLED FOR PRO-RATA DEDUCTION IN RES PECT OF SUCH HOUSING PROJECT AS THE THREE FLATS WERE HAVING BUIL T UP AREA OF MORE THAN 1500 SQ.FT. THE RELEVANT FINDINGS OF THE LD. CIT(A) ARE AS UNDER :- I HAVE CAREFULLY EXAMINED THE DETAILED REASONS GIV EN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND VARIO US SUBMISSIONS OF THE APPELLANT ON THIS ISSUE AND ALSO THE LEGAL POSITION BROUGHT OUT BY THE AR I FIND THAT ONLY T HREE DUPLEX RESIDENTIAL HOUSES HAVE BEEN MEASURED WHICH ACCORD ING TO THE APPELLANT IS BELOW 1 500 SQ.FT. I FIND THAT THE MEA SUREMENT OF 5 FLATS AND DUPLEXS TYPE A-III AND EWS FLATS ARE BELO W 1 500 SQ.FT. AS PER THE CERTIFICATE OF MEASUREMENT OF ENG INEER AND DECLARATION MADE BY THE APPELLANT UNDER PRAKOSHTA SWAMITVA ADHINIUM 1976 DULY REGISTERED FILED BY THE APPEL LANT. THE MEASUREMENT OF DUPLEX TYPE A-I AND A-II AFTER CONSI DERING THE DEDUCTION PERMISSIBLE UNDER BHOOMI VIKAS RULES 19 84 AS PER THE CERTIFICATE OF THE ENGINEER SUBMITTED BY TH E APPELLANT IS LESS THAN 1 500 SQ.FT. I THEREFORE OF THE CONSIDE RED VIEW THAT IT WILL BE FAIR ENOUGH TO TAX THE PROFIT OF 3 DUPLEXS OF TYPE AI & AII OF PHASE/PART 2 WHICH WERE MEASURED BY THE DEP ARTMENT AND FOUND EXCEEDING 1 500 SQ.FT. AS PER THE PROFIT AND LOSS ACCOUNT SUBMITTED BY THE APPELLANT IT IS SEEN THA T THE TOTAL SALE CONSIDERATION OF DUPLEXES AND FLATS IS RS. 6 73 38 296/- AND SALE OF 3 DUPLEX TYPE A-I & A-II IS FOR RS. 39 18 9 20/-. THE PRO-RATA RATE OF PROFIT ON THESE THREE DUPLEXES @ 2 2.67 % COMES TO RS. 8 88 420/-. BUT HOWEVER IT IS SEEN T HAT THE A.O. HAS DISALLOWED THE ENTIRE CLAIM INSTEAD OF DISALLO WANCE ON PRO RATA BASIS WHICH IN MY OPINION IS NOT PROPER. THUS THE DISALLOWANCE IS RESTRICTED TO RS. 8 88 420/- ONLY A ND AS SUCH THE APPELLANT GETS A RELIEF OF RS. 1 43 79 342/- I.E. ( RS. 1 52 67 762/- MINUS RS. 8 88 420/-) AND THE APPEAL IS PARTLY ALLOWED. 6. THE LD. CIT DR CONTENDED THAT WHATEVER FLATS WERE MEASURED ON SAMPLE BASIS WERE FOUND HAVING BUILT UP AREA OF MORE THAN 1500 SQ.FT. HENCE OTHER FLATS WERE ALSO TO BE CONSIDERED OF HAVING BUILT UP AREA OF MORE THAN THI S LIMIT. IT WAS FURTHER CONTENDED THAT PROVISIONS OF SECTION 80 IB(14)(A) WERE OF CLARIFICATORY NATURE AND HENCE APPLICABLE FOR THE YEAR UNDER CONSIDERATION ALSO AND IF THAT BE THE CASE THEN THE M.P. BHOOMI VIKAS RULES WERE NOT RELEVANT AND CONSEQUENT LY METHODOLOGY OF SUCH RULES COULD ALSO NOT BE APPLIED IN COMPUTING THE BUILT UP AREA OF EACH FLAT. THE LD. C IT DR FURTHER CONTENDED THAT IT WAS A CASE OF ROW HOUSING AND NOT A CASE OF TOWER/MULTI-STOREYED FLATS HENCE NO QUEST ION OF COMMON PARKING AREAS OR COMMON FACILITIES WHICH CO ULD BE EXCLUDED IN COMPUTING BUILT UP AREA. THE LD. CIT DR FURTHER CONTENDED THAT ASSESSEES ENGINEERS SUBSEQUENT REP ORT WAS NOT TO BE ACCEPTED WITHOUT CONFRONTING THE SAME TO THE A.O. OR VERIFICATION OF THE SAME BY THE TECHNICAL PERSONS HENCE IN VIEW OF THE FACT THAT NO SUCH EXERCISE WAS DONE BY THE CIT(A) THE SAME COULD NOT BE GIVEN ANY WEIGHTAGE. THE LD. CIT DR FURTHER CONTENDED THAT THE LD. CIT(A) ALSO DID NOT VERIFY THE APPROVED MAP/REGISTRATION DOCUMENTS TO FIND OUT THE CORRECT FACTS. HENCE THE ORDER OF LD. CIT(A) WAS NOT CORRE CT. THEREAFTER THE LD. CIT(A) REFERRED TO PAGE 123 & 1 24 TO DRAW OUR ATTENTION TOWARDS THE AMOUNT OF CONSIDERATION WHICH WAS NOT SAME HENCE THE UNITS COULD NOT BE OF SAME SIZ E. THE LD. CIT DR FURTHER CONTENDED THAT THE PROVISIONS OF SEC TION 80IB(10) WERE UNAMBIGUOUS AND THERE WAS NO METHODOL OGY PRESCRIBED THEREIN TO GIVE PRO-RATA DEDUCTION AND THEREFORE 6 WHEN SOME FLATS WERE FOUND TO HAVING BUILT UP AREA OF MORE THAN 1500 SQ.FT THEN THE ASSESSEE WAS NOT ELIGIBL E FOR DEDUCTION U/S 80IB(10). THE LD. CIT DR THEREAFTER ALSO REFERRED TO THE ENGINEERS REPORT SUBMITTED BY THE ASSESSEE AND SUBMITTED THAT IT WAS NOT AS PER THE CRITERIA LAID DOWN IN THE ACT HENCE NOT CORRECT PIECE OF EVIDENCE. THE LD. CIT DR FURTHER SUBMITTED THAT LETTER OF THE OWNER OF THE H OUSE OF A/6 WAS A CASE OF AFTER THOUGHT ONLY HENCE NOT CONSID ERABLE. ACCORDINGLY HE PRAYED THAT THE ORDER OF THE A.O. W AS TO BE CONFIRMED. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT FOLLOWING FOUR QUESTIONS WERE TO BE DECIDED :- (I) WHETHER PROVISIONS OF SECTION 80IB(14)(A) OF THE AC T WERE RETROSPECTIVE OR PROSPECTIVE ? (II) IF PROSPECTIVE THEN WHAT CRITERIA HAD TO BE ADOPTE D TO COMPUTE THE BUILT UP AREA ? (III) WHETHER ACTUAL AREA OF THREE FLATS WAS MORE THAN 15 00 SQ.FT. OR NOT. (IV) WHETHER THE LD. CIT(A) WAS CORRECT IN GIVING PRO RA TA DEDUCTION ? 8. AS REGARDS TO QUESTION NO. 1 HE SUBMITTED THAT T HIS ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN THE CASE OF AIR DEVELOPERS AS REPORTED IN 14 ITJ 206 (NAGPUR ) WHEREIN THE TRIBUNAL HELD THAT THE DEFINITION OF BUILT UP A REA AS PRESCRIBED IN SECTION 80IB(14)(A) COULD NOT BE SAID TO BE RETROSPECTIVE. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT IN THE CASE OF BRAHMA ASSOCIATES SP ECIAL BENCH OF THE TRIBUNAL HAD ALSO HELD THAT THE PROVIS IONS SPECIFYING MAXIMUM COMMERCIAL AREA LIMITS WERE ALSO OF PROSPECTIVE NATURE. IN THIS REGARD THE LEARNED COU NSEL FURTHER REFERRED TO NOTES TO CLAUSES AS WELL AS C.B.D.T. CI RCULAR WHEREIN IT HAD BEEN CLARIFIED THAT DEFINITION OF BU ILT UP AREA HAD TO BE APPLIED WITH EFFECT FROM ASSESSMENT YEAR 2005 -06. IT WAS ALSO CONTENDED THAT SUCH DEFINITION WAS IN THE NATU RE OF SUBSTANTIVE PROVISIONS HENCE IT COULD NOT BE CONS IDERED CLARIFICATORY AND RETROSPECTIVE. FOR THIS PROPOSITI ON THE LEARNED COUNSEL RELIED ON THE DECISION OF THE HON'B LE SUPREME COURT IN THE CASE OF GOVIND DAS AS REPORTED IN 103 ITR 123. THEREAFTER THE LEARNED COUNSEL SUBMITTED THAT THE A.O. HAD WORKED OUT THE BUILT UP AREA AS PER SUCH DEFINITION BY INCLUDING MUMTY STAIR CASE BALCONY ARCH PROJECTION AND T ERRACE AND IF THAT WAS EXCLUDED THEN THE AREA WAS LESS THAN THE S PECIFIED LIMITS. THE LEARNED COUNSEL FURTHER SUBMITTED THAT IN THE YEAR UNDER CONSIDERATION I.E. IN ASSESSMENT YEAR 2004-0 5 THERE WAS NO DEFINITION OF BUILT UP AREA IN THE ACT. HENCE E ITHER COMMON SENSE MEANING OR OTHER LEGISLATIONS DEALING WITH TH E SAME SUBJECT WERE TO BE RESORTED TO FIND OUT THE MEANING OF BUILT UP AREA. THE LEARNED COUNSEL THEREAFTER SUBMITTED THAT THIS HOUSING PROJECT AS PER THE ACT HAD BEEN APPROVED AS A HOUSING PROJECT BY A LOCAL AUTHORITY. HENCE DEFINITION OF BUILT UP AREA 7 HAD ALSO TO BE TAKEN AS GIVEN BY THE LOCAL AUTHORIT IES. IN THIS REGARD HE AGAIN RELIED ON THE DECISION OF THE TRIB UNAL IN THE CASE OF AIR DEVELOPERS (SUPRA). THE LEARNED COUNSEL THEREAFTER REFERRED TO THE M.P. BHOOMI VIKAS ADHINIYAM READ WI TH BHOPAL MASTER PLAN TO SHOW THAT THE ITEMS ADDED BY THE ASSESSING OFFICER WERE NOT TO BE ADDED AND THUS T HE CALCULATION DONE BY THE TECHNICAL EXPERT APPOINTED BY THE ASSESSEE WAS CORRECT AND CONSEQUENTLY THE AREA OF THREE FLATS WAS ALSO LESS THAN 1500 SQ.FT. AS REGARD TO THE SPE CIFIC ISSUE OF AREA OF FLAT NO. A/6 THE LEARNED COUNSEL SUBMITTED THAT AT THE TIME OF PHYSICAL VERIFICATION ONLY THE TENANT WAS AVAILABLE AND THE OWNER OF THAT FLAT SUBSEQUENTLY FILED A CONFIR MATION TO THE EFFECT THAT 400 SQ.FT. AREA HAD BEEN CONSTRUCTED BY HIM AFTER PURCHASE OF THE PROPERTY AND THE SAME WAS TO BE ACC EPTED. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE A.O. DID NOT CHANGE THE COST OF CONSTRUCTION OF THIS FLAT FOR THE ADDIT IONAL CONSTRUCTION. HENCE THE BUILT UP AREA AS CLAIMED B Y THE ASSESSEE COULD NOT BE DISTURBED. IT WAS ALSO CONTEN DED THAT THE A.O. HAD STATED THAT IT WAS STATED BY THE ASSESSEE AND HER REPRESENTATIVE IN THE COURSE OF PHYSICAL VERIFICATI ON ON 8.12.06 THAT NO ADDITIONAL CONSTRUCTION WAS DONE BY THE OW NER WHICH WAS NOT A CORRECT FACT AS NEITHER ANY STATEMENT WAS RECORDED NOR ANY QUESTION WAS PUT TO THE ASSESSEE OR HER REP RESENTATIVE IN THIS REGARD. THE LEARNED COUNSEL FURTHER CONTEND ED THAT THE ASSESSEE WAS ENTITLED FOR PRO-RATA DEDUCTION WHICH WAS DULY SUPPORTED BY THE DECISION OF THE TRIBUNAL IN THE C ASE OF AIR DEVELOPERS (SUPRA) THE DECISION OF THE SPECIAL BEN CH IN THE CASE OF BRAHMA ASSOCIATES AS REPORTED IN 22 DTR 1 AND ALSO BY THE DECISION OF THE CALCUTTA BENCH OF THE TRIBU NAL IN THE CASE OF ACIT VS. BENGAL AMBUJA HOUSING DEVELOPMENT LIMITED WHICH HAD ALSO BEEN CONFIRMED BY THE HON' BLE CALCUTTA HIGH COURT. THE LEARNED COUNSEL ALSO DREW OUR ATTENTION TO THE RELEVANT PORTION OF THE JUDICIAL D ECISIONS RELIED BY HIM. 9. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTEN TION TO THE FACT THAT THE A.O. HAD ALSO APPOINTED A TECH NICAL EXPERT NAMELY SHRI AMOGH KUMAR GUPTA WHO VIDE ITS REPORT DATED 2.12.2008 HAD ALSO STATED THAT FLATS CONSTRUCTED BY THE ASSESSEE WERE HAVING BUILT UP AREA OF LESS THAN 1500 SQ.FT. HOWEVER THE A.O. COMPLETELY IGNORED THIS REPORT. THE LEARNED CO UNSEL ALSO SUBMITTED THAT EVEN AS PER THE A.O. ALL THE FLATS WERE NOT HAVING THE SAME BUILT UP AREA BECAUSE EVEN AS PER THE VERSION OF A.O. IN THE ASSESSMENT ORDER AT PAGE 6 WERE THAT HOUSE NO. A/6 WAS QUITE BIGGER THAN THIS CATEGORY OF OTHER H OUSES IN THE PROJECT. 10. THE LD. CIT DR IN THE REJOINDER MAINLY REITERATED THE SUBMISSIONS MADE EARLIER AND FURTHER SUBMITTED THAT THE OBJECT OF STATE GOVERNMENT RULES/ BY LAWS WERE DIFFERENT F ROM THE OBJECT OF PROVISIONS OF SECTION 80IB(10) HENCE SA ID RULES COULD NOT BE CONCLUSIVE. HE FURTHER CONTENDED THAT ONCE THE 8 MEASUREMENT TAKEN BY THE DEPARTMENT HAD BEEN SIGNE D BY THE PROJECT MANAGER OF THE ASSESSEE AS EVIDENT FROM TH E ASSESSMENT RECORD HENCE THERE WAS NO NECESSITY FO R THE A.O. TO CONSIDER THE REPORT OF THE TECHNICAL EXPERT SUBM ITTED SUBSEQUENTLY AS THE MATTER HAD TO BE GIVEN FINALIT Y. HE FURTHER CONTENDED THAT IN THE CASE OF AIR DEVELOPERS ONLY A FEW FLATS WERE FOUND TO BE OF MORE THAN 1500 SQ.FT. HENCE WH EREAS IN THE PRESENT CASE ALL THE FLATS MEASURED ON SAMPLE BASIS WERE FOUND TO HAVE A BUILT UP AREA OF MORE THAN 1500 SQ. FT. HENCE THIS DECISION WAS NOT OF ANY HELP TO THE ASSESSEE. 11. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUT HORITIES BELOW. 12. IT IS NOTED THAT THE ASSESSEE IS ENGAGED IN THE CONSTRUCTION OF HOUSES. AT THE IMPUGNED HOUSES HAVE BEEN CONSTRUCTED IN THREE PHASES HAVING DIFFERENT DIMENS IONS AND DESIGNS. THE A.O. HAS HOWEVER TAKEN THE MEASUREME NT PHYSICALLY ONLY OF ONE CATEGORY OF HOUSES AND THAT TOO HAS BEEN CARRIED OUT BY NON-TECHNICAL STAFF ALTHOUGH THE DE PARTMENT CAN UTILIZE THE SERVICES OF TECHNICAL PERSONNEL FOR THI S PURPOSE. THUS AT THE VERY OUT-SET WE ARE OF THE OPINION TH AT SAMPLE ADOPTED BY THE ASSESSING OFFICER IS NOT REPRESENTAT IVE OF WHOLE OF THE HOUSING PROJECT AND THEREFORE THE VERY BAS IS AS SUCH ACTION OF A.O. IS FLAWED. IT IS FURTHER NOTED THAT EVEN THE MEASUREMENT OF THESE FLATS NAMELY A/6 HAS BEEN RE VISED BY THE DEPARTMENT ITSELF WHICH SHOWS THAT THE MEASU REMENT OF SAMPLE FLATS HAS ALSO NOT BEEN DONE IN A SCIENTIFIC MANNER. THE OTHER FACT WHICH IS IMPORTANT IS THAT THE A.O. ALS O TOOK THE HELP OF TECHNICAL EXPERT AND EVEN AS PER HIS REPORT AFTE R TAKING INTO CONSIDERATION THE LOCAL BY- LAWS THE AREA OF CERT AIN FLATS MEASURED BY THE DEPARTMENT IS LESS THAN 1500 SQ.FT. AND THE A.O. HAS NOT GIVEN ANY COGNIZANCE TO THIS FACT WHIC H MAKES THE APPROACH OF A.O. UNJUSTIFIED. WE FURTHER FIND THAT WHATEVER EXPLANATIONS/CLARIFICATIONS/OBJECTIONS HAVE BEEN RA ISED BY THE ASSESSEE SUBSEQUENT TO THE MEASUREMENT DONE BY THE DEPARTMENT THE SAME HAVE BEEN REJECTED IN A SUMMAR ILY MANNER MERELY FOR THE REASON THAT DURING THE COURSE OF PHYSICAL MEASUREMENT REPRESENTATIVE OF THE ASSESSEE WERE PRE SENT AND IT ALSO SIGNED THE MEASUREMENTS TAKEN BY THE DEPARTME NT. IN OUR OPINION THIS APPROACH OF THE A.O. WHO IS A JUDICI AL OFFICER IS NOT JUSTIFIED BECAUSE BEFORE MAKING ADDITION OR RE JECTING A GENUINE CLAIM OF THE ASSESSEE IT IS THE BOUNDEN DU TY OF THE A.O. TO DEAL WITH THE OBJECTIONS OF THE ASSESSEE. W E ARE FURTHER UNABLE TO UNDERSTAND WHY THE A.O. DID NOT DO THE RE - VERIFICATION EXERCISE TO FIND OUT THE CORRECT MEASU REMENT. WE ALSO FIND THAT AS PER THE LD. CIT DR THE SALE CONS IDERATION IS DIFFERENT WITH REFERENCE TO DIFFERENT FLATS AND TH EREFORE THERE MUST BE DIFFERENT SIZES. IN OUR OPINION THIS FACT RATHER SUPPORTS THE CLAIM OF THE ASSESSEE BECAUSE THIS AGAIN GOES TO SHOW THAT SAMPLE TAKEN BY THE DEPARTMENT IS NOT THE REPRESEN TATIVE ONE. 9 THUS ON THE BASIS OF ABOVE FACTS ITSELF THE ACTIO N OF THE A.O. IS NOT CORRECT IN LAW. 13. HAVING STATED SO NOW WE SHALL DEAL WITH OTHER ASP ECTS. ON THE ASPECT OF NATURE OF PROVISIONS OF SECTION 80 IB(14)(A) WE FIND THAT IT IS A SETTLED PROPOSITION OF LAW THAT W HEN A PARTICULAR TERM IS DEFINED BY AN AMENDMENT WHICH RESULTS INTO INCREASE/LEVY OF CIVIL LIABILITY THE SAME HAS TO B E CONSIDERED AS THE SUBSTANTIVE ONE HENCE PROSPECTIVE. THE JUDICIA L DECISIONS CITED BY THE ASSESSEE ALSO SUPPORT THIS VIEW. ACCOR DINGLY WE REJECT THE CONTENTION OF THE REVENUE THAT THE PROVI SIONS OF SECTION 80IB(14)(A) ARE OF RETROSPECTIVE NATURE. TH IS VIEW LEADS US TO ANOTHER QUESTION I.E. IN THE ABSENCE OF ANY S PECIFIC TERM IN THE ACT HOW THAT TERM SHOULD BE INTERPRETED. IN THI S REGARD IT IS ALSO A SETTLED PRINCIPLE THAT SOME COMMON SENSE APP ROACH OR DICTIONARY MEANING IF THE TERM IS OF GENERAL NATURE SHOULD BE FOUND OUT OR IF THE TERM IS OF TECHNICAL NATURE TH EN THE DEFINITION OF SUCH TERM USED IN OTHER LAWS SHOULD B E TAKEN INTO CONSIDERATION. ACCORDINGLY WE HOLD THAT THE MEANIN G OF TERM BUILT UP AREA PRIOR TO INSERTION OF DEFINITION CL AUSE IN THE ACT HAS TO BE FOUND OUT AS PER THE LOCAL LAW I.E. RULES AND REGULATIONS OF BHOPAL MUNICIPAL CORPORATION AS WELL AS FROM M.P. BHOOMI VIKAS RULES AND AS A CONSEQUENCE THEREO F THE BUILT UP AREA OF SUCH FLATS IS UNDISPUTEDLY LESS TH AN THE SPECIFIED LIMIT. HENCE THE ASSESSEE IN OUR OPINIO N IS ELIGIBLE FOR DEDUCTION U/S 80IB(10). IN THIS VIEW OF THE MAT TER THERE REMAINS NO QUESTION FOR ANY PRO-RATA DEDUCTION. HOW EVER WE CONSIDER IT PERTINENT TO STATE THAT IT IS BENEFICIA L PROVISION AND THEREFORE IT SHOULD BE INTERPRETED IN A LIBERAL MA NNER AND IN CASE IT IS NECESSARY THEN THE ASSESSEE CAN BE GRANT ED PRO RATA DEDUCTION. IN THIS REGARD WE ARE FURTHER OF THE VI EW THAT IF THE LEGISLATOR DID NOT WANT TO GIVE ANY PRO-RATA DEDUCT ION IT COULD HAVE BEEN PROVIDED BY THE LEGISLATOR SPECIFICALLY THAT IF ONE HOUSE WAS FOUND TO BE HAVING BUILT UP AREA ON THE G ROUND OF SPECIFIED LIMIT THEN THE ASSESSEE WOULD NOT BE ENT ITLED FOR ANY DEDUCTION U/S 80IB(10). IN THIS VIEW OF THE MATTER WE DISMISS ALL THE GROUNDS RAISED BY THE REVENUE. 14. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. 15. NOW WE SHALL TAKE UP ASSESSEES CROSS OBJECTION WHEREIN THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN REJECTING ITS CLAIM FOR DEDUCTION U/S 80I B IN RESPECT OF THREE SAMPLE HOUSES PHYSICALLY MEASURED BY THE DEPARTMENT. 16. THE FACTS HAS ALREADY BEEN NARRATED AS ABOVE AND HA VE NO NECESSITY TOBE REPEATED AGAIN. HOWEVER HE DREW OUR ATTENTION TO THE FINDING OF THE LD. CIT(A) WHEREIN THE LD. CIT(A) HAD ACCEPTED THAT THE AREA OF THESE FLATS WA S ALSO LESS THAN THE SPECIFIED LIMIT HENCE THE LD. CIT(A) SHO ULD HAVE ACCEPTED THE CLAIM OF THE ASSESSEE IN TOTO. 10 17. THE LD. CIT DR ON THE OTHER HAND PREFERRED TO REL Y ON THE ORDER OF THE LD. CIT(A) ON THIS ASPECT. 18. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUT HORITIES BELOW. 19. IT IS NOTED THAT THE LD. CIT(A) HAS OBSERVED IN THE FINDINGS REPRODUCED HEREINBEFORE THAT THE MEASUREME NT OF DUPLEX FLAT TYPE A/1 AND TYPE A/2 AS PER THE BHOOMI VIKAS RULES 1984 WAS LESS THAN 1500 SQ.FT. AND THE ASSE SSEE HAS COMPLIED WITH ALL OTHER CONDITIONS AND INSPITE OF THAT THE LD. CIT(A) HAS GRANTED ONLY PRO-RATA DEDUCTION. WE FURT HER FIND THAT THE LD. CIT(A) HAS NOT GIVEN ANY SPECIFIC FIND INGS ON THE LEGAL CONTENTIONS RAISED BY THE ASSESSEE WHICH RES ULTS INTO AN INFERENCE THAT THE LD. CIT(A) HAS NOT ACCEPTED THE PLEA OF ASSESSEE REGARDING APPLICABILITY OF LOCAL RATES TO COMPUTE BUILT UP AREA. HOWEVER SINCE WE HAVE ACCEPTED THE LEGAL CONTENTIONS RAISED BY THE ASSESSEE IN THIS REGARD HENCE WE FI ND NO REASON NOT TO GRANT A DEDUCTION THEREON U/S 80IB(10). ACCO RDINGLY WE ACCEPT THIS GROUND OF THE CROSS OBJECTION FILED BY THE ASSESSEE AND DIRECT THE A.O. TO GRANT DEDUCTION U/S 80IB AS CLAIMED BY THE ASSESSEE. 20. IN THE RESULT THE CROSS OBJECTION STANDS ALLOWED. 21. TO SUM UP THE REVENUES APPEAL IS DISMISSED AND CR OSS OBJECTION IS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT O N 16TH APRIL 2010. NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE THE REFORE KEEPING IN VIEW THE SUBMISSION/ADMISSION OF THE RESPECTIVE PARTIES THAT THE ISSUE IS COVERED BY THE AFORESAID DECISION CONSEQUENTLY RESPECTFULLY FOLLOWING THE SAME THESE APPEALS OF THE REVENUE ARE DISMISSE D. FINALLY APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11 TH MAY 2010. SD SD (V.K. GUPTA) (JOGINDER S INGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MAY 11 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/