SAVITA BUILDERS & DEVELOPERS, THANE v. D.C.I.T. CIRCLE-4, THANE

ITA 2882/MUM/2012 | 2006-2007
Pronouncement Date: 26-10-2016 | Result: Allowed

Appeal Details

RSA Number 288219914 RSA 2012
Assessee PAN AAYFS1480N
Bench Mumbai
Appeal Number ITA 2882/MUM/2012
Duration Of Justice 4 year(s) 5 month(s) 29 day(s)
Appellant SAVITA BUILDERS & DEVELOPERS, THANE
Respondent D.C.I.T. CIRCLE-4, THANE
Appeal Type Income Tax Appeal
Pronouncement Date 26-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 26-10-2016
Date Of Final Hearing 05-08-2015
Next Hearing Date 05-08-2015
Assessment Year 2006-2007
Appeal Filed On 27-04-2012
Judgment Text
E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE SHRI C.N. PRASAD JUDICIAL MEMBER AND SHRI RAMIT KOCHAR ACCOUNTANT MEMBER ./ I.T.A. NO. 2882 /MUM/2012 ( / ASSESSMENT YEAR : 2006-07) M/S SAVITA BUILDERS AND DEVELOPERS SAKHARAM BABA SANKUL BOLINJI NEAR UNION BANK VIRAR (W) TALUKA VASAI DIST THANE 401 303. / V. THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 4 THANE. ./ PAN : AAYFS1480N ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI ANIL SATHE REVENUE BY : SHRI VISHWAS JADHAV (D.R.) / DATE OF HEARING : 02-08-2016 / DATE OF PRONOUNCEMENT : 26-10-2016 / O R D E R PER RAMIT KOCHAR ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE BEING ITA NO. 2882/MUM/2012 IS DIRECTED AGAINST THE APPELLATE ORDER DATED 8 TH NOVEMBER 2011 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- II T HANE (HEREINAFTER CALLED THE CIT(A)) FOR THE ASSESSMENT YEAR 2006-07 THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSME NT ORDER DATED 29 TH DECEMBER 2008 PASSED BY THE LEARNED ASSESSING OFFI CER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INCOME TAX ACT 1961 (HE REINAFTER CALLED THE ACT). ITA 2882/MUM/2012 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN DISALLOWING THE APPELLANT'S CLAIM OF DEDUCTION UNDER SEC. 80IB (10) OF THE INCOME-TAX ACT 1961 OF RS. 16 48 773/- WITHOUT APPR ECIATING THAT THE APPELLANT HAD DULY COMPLIED WITH ALL THE REQUISITE CONDITIONS PROVIDED IN THE ACT. 2. THE LEARNED COMMISSIONER (APPEALS) FAILED TO APPR ECIATE THE FACT THAT THE PROJECT WAS CONSTRUCTED ON A SIZE OF PLOT OF LAND A DMEASURING 9734.86 SQ. MTRS WHICH WAS MORE THAN ONE ACRE. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THE FACT THAT ASSESSEE HAD RECEIVED COMPLET ION CERTIFICATE IN RESPECT OF BOTH THE BUILDINGS UNDERTAKEN BY THEM AND COPIES OF THE OCCUPATION CERTIFICATES HAVE ALREADY BEEN PLACED ON RECORD AND THAT THE PROJECT CONSTRUCTED WAS COMPLETED BEFORE 31.03.2008 . 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT THE SIZE OF PLOT OF LAND ON WHICH THE BUIL DING IS CONSTRUCTED IS TO BE MORE THAN ONE ACRE WITHOUT APPRECI ATING THAT THE SPECIFIED SIZE IS WITH RESPECT TO THE ENTIRE PLOT OF LAN D AND NOT WITH RESPECT TO THE SIZE OF EACH HOUSING PROJECT. 5. THE LEARNED CIT (APPEALS) FAILED TO APPRECIATE TH AT THERE CAN BE MULTIPLE HOUSING PROJECTS ON A PLOT OF LAND HAVING M INIMUM AREA OF ONE ACRE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS. THE ASSESSEE FIRM HAS UNDERTAKEN THE CONSTRUCTION OF THE PROJECT VIZ. BUI LDING NO. 3 HAVING 3 WINGS AND BUILDING NO. 4 DURING THE YEAR UNDER REVIEW. TH E BUILDING DEVELOPED AND CONSTRUCTED BY THE ASSESSEE IS 'AUDUMBAR' AND 'PANC HAMRUT '. THE PROJECT WAS APPROVED BY THE LOCAL AUTHORITY I.E. CIDCO VIDE COMMENCEMENT CERTIFICATE NO. CIDCO/VVSR/CC/BP-1785/W-284 DATED 1 2-05-2000 AND THIS WAS SUBSEQUENTLY AMENDED ON 18 TH OCTOBER 2001 AND 27 TH FEBRUARY 2004. THE ASSESSEE ALSO FURNISHED OCCUPANCY CERTIFICATE I N RESPECT OF RESIDENTIAL ITA 2882/MUM/2012 3 BUILDING NO. 3 AND 4 DATED 20 TH MARCH 2006 AND 14 TH AUGUST 2007 RESPECTIVELY. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS SHOWN THE SALES AT RS. 1 05 26 361/-AND NET PROFIT DECLAR ED AT RS. 11 50 794/- WHICH WORKS OUT @ 10.93%. THE ENTIRE NET PROFIT OF RS. 11 50 794/- AND DISALLOWANCE ON ACCOUNT OF FBT AND U/S. 40A OF THE ACT TOTAL AMOUNTING TO RS. 4 97 979/- AGGREGATING TO NET PROFIT OF RS. 16 48 773/- WAS CLAIMED AS DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF TH E ABOVE PROJECT AND ACCORDINGLY CLAIMED ENTIRE PROFIT OF RS. 16 48 773/ - AS EXEMPT FROM TAX. IT WAS OBSERVED BY THE A.O. THAT COMMENCEMENT CERTI FICATE WAS ISSUED BY THE LOCAL AUTHORITY I.E. CIDCO ON 12 TH MAY 2000. SINCE THE COMMENCEMENT CERTIFICATE WAS ISSUED PRIOR TO 1ST APRIL 2004 TH E PROJECT SHOULD HAVE BEEN COMPLETED BY 31 ST MARCH 2008 THE ASSESSEE WAS ASKED TO SUBMIT COMPLETION CERTIFICATE. THE ASSESSEE SUBMITTED THE COMPLETION CERTIFICATE AND ACCORDING TO THE CERTIFICATES ISSUED BY THE CIDCO THE SAID PROJECT WAS COMPLETED ON 20 TH MARCH 2006 AND 14 TH AUGUST 2007 WITH RESPECT TO THE AFORE-STATED TWO BUILDINGS. THE A.O. ON PERUSAL O F THE AUDIT REPORT IN FORM NO. 10CCB CLAIMING DEDUCTION U/S 80IB(10) OF THE AC T AS PER COLUMN 23(C) OBSERVED THAT THE SIZE OF PLOT OF LAND OF THE PROJ ECT IS MENTIONED AT 2131.40 SQ.MTRS. I.E. 22933.864 SQ.FEET WHICH IS LESS THAN 1 ACRE. TO QUALIFY FOR THE DEDUCTION U/S. 80LB(10) OF THE ACT THE ASSESSEE IS REQUIRED TO HAVE MINIMUM SIZE OF PLOT NOT LESS THAN 1 ACRE I.E. 40000 SQ. FE ET WHILE THE ASSESSEE SIZE OF THE PLOT IS LESS THAN ONE ACRE AND HENCE THE ASSESS EE HAS NOT FULFILLED THE CONDITION AS LAID DOWN U/S 80IB(10) OF THE ACT TH E ASSESSEE FIRM IS NOT ENTITLED FOR THE DEDUCTION U/S 80IB(10) OF THE ACT . THE A.O. ALSO MADE REQUEST TO THE GOVERNMENT REGIST ERED VALUER TO UNDERTAKE PHYSICAL MEASUREMENT OF THE PLOT OF LAND BEARING S. NO. 205A AT VILLAGE BOLING ON WHICH THE ASSESSEE HAS CONSTRUCTED BUILDING NAME LY 'AUDUMBAR' AND 'PANCHAMRUT'. THE PHYSICAL MEASUREMENT OF THE SAID PLOT OF LAND WAS ITA 2882/MUM/2012 4 CONDUCTED BY GOVERNMENT REGISTERED VALUER IN THE PR ESENCE OF THE A.O. AND THE PARTNER OF THE ASSESSEE FIRM WHO SUBMITTED I TS REPORT DATED 25 TH DECEMBER 2008 WHEREBY THE SIZE OF PLOT INCLUDING T HE AREA RESERVE FOR GARDEN COMES TO 2163.90 SQ. MTRS WHICH IS LESS THAN 1 ACRE . THE COPY OF THE MEASUREMENT HAS ALSO BEEN HANDED OVER TO THE ASSESS EE. THE A.O. HELD THAT SINCE THE SIZE OF THE PLOT OF LAND WAS LESS THAN ON E ACRE AND THE ASSESSEE FAILED TO COMPLETE ITS PROJECT AND OBTAINED THE COM PLETION CERTIFICATE BEFORE 31 ST MARCH 2008 AND HENCE THE ASSESSEE IS NOT ENTITL ED FOR THE DEDUCTION U/S 80IB(10) OF THE ACT. THE ASSESSEE WAS SHOW CAUS ED BY THE AO AND IN REPLY THE ASSESSEE SUBMITTED A LETTER ISSUED BY M/S SANATH MEHTA AND ASSOCIATES STATING THE TOTAL AREA OF SAKHARAM BABA SANKUL WHERE TWO BUILDINGS OF THE ASSESSEE ARE SITUATED. THE ASSES SEE HAS PURCHASED TOTAL OF 9734.86 SQ. MTRS OF AREA VIDE DEVELOPMENT AGREEMENT DATED 24 TH SEPTEMBER 2008. THE ASSESSEE FURTHER SUBMITTED THAT DUE TO MARKET CONDITIONS AND LACK OF DEMAND IN THE AREA WHERE THE BUILDINGS ARE SITUATED THE ASSESSEE DECIDED NOT TO PROCEED WITH THE FURTHER DEVELOPMENT OF THE CONSTRUCTION OF THE BUILDING AND ALLOWED TO LAPSE VALIDITY OF THE C.C. ISSUED BY THE CIDCO FOR THE REST OF THE BUILDINGS. THE ASSESSEE SUBMITTED THAT IT HAS ALSO RECEIVED COMPLETION CERTIFICATE FOR THE BOTH THE BUILDINGS U NDERTAKEN BY IT. THE ASSESSEE ALSO PLACED COPIES OF OCCUPATION CERTIFICA TE ON RECORD AND HENCE REQUEST WAS MADE BY THE ASSESSEE TO CONSIDER THE W HOLE PLOT OF LAND AS PURCHASED BY THE ASSESSEE FOR CALCULATING PIECE OF LAND AS PER SECTION 80IB (10) OF THE ACT WHICH IS MORE THAN 1 ACRE AND 80IB (10) BENEFIT SHOULD BE GRANTED TO THE ASSESSEE WAS THE CONTENTION OF THE A SSESSEE BEFORE THE AO. THE A.O. CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND HELD THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS AS LAID D OWN U/S 80IB (10) ACT AS THE PROJECT UNDERTAKEN BY THE ASSESSEE HAS NOT BEEN COM PLETED ON OR BEFORE 31 ST MARCH 2008 ( THE COMMENCEMENT OF PROJECT BEING PRI OR TO 1ST APRIL 2004 ) . THE AREA OF THE PLOT OF LAND ON WHICH THE PROJECT I S CONSTRUCTED IS LESS THAN 1 ITA 2882/MUM/2012 5 ACRE. THE ASSESSEE DID NOT OFFERED ANY COMMENTS WI TH RESPECT TO THE PHYSICAL MEASUREMENT REPORT OF THE GOVERNMENT REGISTERED VAL UER WHICH MEANS THAT THE ASSESSEE HAS ACCEPTED THE REPORT AND HAS NO OBJ ECTIONS ABOUT THE AREA OF THE PLOT OF LAND . THE A.O. OBSERVED THAT THE ASSES SEE FIRM DID NOT FULFILLED THE CONDITIONS LAID DOWN U/S 80IB(10) OF THE ACT AND AC CORDINGLY DISALLOWED AN AMOUNT OF RS. 16 48 773/- CLAIMED AS DEDUCTION U/S 80IB OF THE ACT AND THE SAME WAS BROUGHT TO TAX VIDE ASSESSMENT ORDER DAT ED 29.12.2008 PASSED BY THE AO U/S 143(3) OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 29.12.20 08 PASSED BY THE A.O. U/S. 143(3) OF THE ACT THE ASSESSEE FILED FIRST A PPEAL BEFORE THE LD. CIT(A). 5. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED TH AT THE ASSESSEE IS NEW IN THE ABOVE BUSINESS AND COULD COMPLETE ONLY TWO OUT OF EIGHT BUILDINGS AND THE OCCUPANCY CERTIFICATE FOR SUCH BUILDING WAS ALS O RECEIVED AND IS PLACED ON RECORD. THE ASSESSEE SUBMITTED THAT THE ASSESSEE SH OULD NOT BE DENIED THE BENEFIT OF SECTION 80IB(10) OF THE ACT ON THE COMP LETED PROJECT ONLY ON THE GROUND THAT NO FURTHER C.C. WAS OBTAINED FOR THE BA LANCE FSI WHICH WAS THERE UNUTILIZED IN THE PROJECT. THE ASSESSEE FURTHER SUB MITTED THAT THE ARCHITECT OF THE ASSESSEE M/S SANAT MEHTA & ASSOCIATES HAD ISSUE D A LETTER SHOWING THE TOTAL AREA OF PROJECT AS STATED IN DEVELOPMENT AGRE EMENT WHICH WAS 9734.86 SQ. MTRS AND SINCE THE ENTIRE AREA OF 9734.86 SQ. M TRS. IS PURCHASED BY THE FIRM FOR DEVELOPMENT IT CANNOT BE SAID THAT THE SI ZE OF PLOT OF THE PROJECT IS LESS THAN 1 ACRE. THUS IN NUTSHELL THE ENTIRE PROJ ECT IS OF AN AREA OF 9734.86 SQ. METERS AS STATED BY THE ASSESSEE IN ITS LETTER DATED 26 TH DECEMBER 2008. IT WAS SUBMITTED THAT THE OBJECTIVE BEHIND INTRODUC TION OF SECTION 80IB(10) OF THE ACT WAS TO PROMOTE HOUSING ACTIVITY. SINCE THE TWO BUILDINGS WERE COMPLETED THE ASSESSEE SHOULD BE GRANTED THE BENEF IT OF SECTION 80IB(10) OF THE ACT W.R.T. THESE TWO COMPLETED BUILDINGS AND NO N COMPLETION OF THE OTHER BUILDINGS SHALL NOT ACT AS DETRIMENTAL TO THE GRANT OF BENEFIT U/S 80IB(10) OF ITA 2882/MUM/2012 6 THE ACT. THE LD. CIT(A) CONSIDERED THE SUBMISSION OF THE ASSESSEE AND OBSERVED THAT THERE IS NO MERIT IN THE SUBMISSIONS OF THE ASSESSEE. THE LEARNED CIT(A) OBSERVED THAT THE PROVISIONS OF THE CLAUSE (B) OF SECTION 80IB(10) OF THE ACT ARE CLEAR AND UNAMBIGUOUS WHICH STATES THAT THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS MINIMUM AREA OF ONE ACRE AND THE AREA OF THE PLOT ON WHICH THE HOUSING PROJECT IS CO NSTRUCTED HAS TO BE MINIMUM 1 ACRE IN SIZE WHICH MEANS THAT IT SHOULD B E CONSTRUCTED ON A SINGLE PLOT HAVING MINIMUM OF 1 ACRE OF LAND. THE L D. CIT(A) ALSO OBSERVED THAT THE ASSESSEE HAS ALSO NOT DENIED THAT THE AREA OF THE PLOT IS LESS THAN 1 ACRE AND HAS NOT CONTRADICTED THE OBSERVATIONS OF T HE GOVERNMENT APPROVED VALUER REGARDING THE SIZE OF THE PLOT TAKEN AFTER P HYSICAL MEASUREMENT AT 2163.90 SQUARE METERS WHICH AMOUNTS TO ACCEPTANCE O F THE FACT THAT SIZE OF THE PLOT AS MEASURED BY THE GOVERNMENT APPROVED VAL UER IS LESS THAN ONE ACRE AND ALSO ACCEPTING THE VIOLATION OF THE PROVIS IONS OF SECTION 80IB(10) OF THE ACT. THUS THE LD. CIT(A) CONFIRMED THE ASSESSM ENT ORDER DATED 29.12.2008 PASSED BY THE A.O. U/S 143(3) VIDE APPEL LATE ORDERS DATED 08-11- 2011 PASSED BY LEARNED CIT(A) AS THE ASSESSEE HAS N OT COMPLIED WITH THE BASIC CONDITION SPECIFIED IN CLAUSE (B) OF SECTION 80IB(10) OF THE ACT WHICH STATES THAT THE PROJECT IS ON THE SIZE OF A PLOT O F LAND WHICH HAS MINIMUM AREA OF ONE ACRE AND THE ASSESSEE HAS VIOLATED THE ABOVE CONDITIONS AND THEREFORE THE ASSESSEE IS NOT ENTITLED FOR THE BENE FIT OF DEDUCTION U/S. 80IB(10) OF THE ACT AND HENCE THE ACTION OF THE AO DISALLOWI NG THE DEDUCTION OF RS.16 48 773/- U/S. 80IB(10) OF THE ACT WAS CONFIRM ED BY LEARNED CIT(A) VIDE APPELLATE ORDERS DATED 08-11-2011. 6. AGGRIEVED BY THE APPELLATE ORDERS DATED 08-11-2 011 PASSED BY THE LD. CIT(A) THE ASSESSEE FILED FURTHER APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS ACQUIRED THE DEVELOPMENT RIGHT OVER A PLOT OF LAND ADMEASURING 9734.86 SQ. ITA 2882/MUM/2012 7 MTRS. FOR THE PURPOSE OF CONSTRUCTION OF EIGHT BUIL DINGS. THE AREA OF PLOT OF LAND IS 9734.86 SQUARE METERS WHICH IS MORE THAN ON E ACRE. THE CIDCO APPROVAL WAS OBTAINED FOR THE CONSTRUCTION OF EIGHT BUILDINGS. THE ASSESSEE CONSTRUCTED ONLY TWO BUILDINGS WHICH WERE CONSTRUCT ED PRIOR TO 31-03-2008 . THE PLINTH AREA OF THE LAND IS LESS THAN ONE ACRE S O FAR AS THE TWO BUILDINGS CONSTRUCTED BY THE ASSESSEE ARE CONCERNED WHICH WAS 2163.90 SQUARE METERS WHILE THE TOTAL PLOT AREA WAS 9734.86 SQUARE METERS FOR WHICH THE ASSESSEE ENTERED INTO DEVELOPMENT AGREEMENT WHICH WAS MORE T HAN ONE ACRE AND HENCE THE ASSESSEE HAS DULY COMPLIED WITH CONDITION S OF SECTION 80IB(10) OF THE ACT. THE REST OF THE SIX BUILDINGS COULD NOT B E COMPLETED BY THE ASSESSEE DUE TO ADVERSE MARKET CONDITIONS AND LACK OF DEMAND OF RESIDENTIAL UNITS. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE A CCORDINGLY THE BENEFIT OF SECTION 80IB(10) OF THE ACT WAS DENIED TO THE ASSES SEE IN ENTIRETY DESPITE THE FACT THAT TWO BUILDINGS WERE COMPLETED PRIOR TO 31- 03-2008. THE LD. COUNSEL DREW OUR ATTENTION TO THE ORDERS OF AUTHORITIES BEL OW WHEREBY THE ASSESSEE HAS COMPLETED ONLY TWO BUILDINGS PRIOR TO 31 ST MARCH 2008 OUT OF EIGHT BUILDING APPROVED IN THE HOUSING PROJECT AND OBTA INED THE COMPLETION CERTIFICATE W.R.T. TWO BUILDING COMPLETED PRIOR TO 31-03-2008 . THE LD. COUNSEL ALSO DREW OUR ATTENTION TO THE DEVELOPMENT RIGHT AG REEMENT FOR THE TOTAL PLOT AREA OF 9734.86 SQUARE METERS WHICH IS PLACED AT P APER BOOK PAGE 1 TO 34 WHICH ALSO INCLUDED THE ENGLISH VERSION OF ORIGINAL AGREEMENT IN VERNACULAR LANGUAGE. THE LD. COUNSEL ALSO DREW OUR ATTENTION TO THE OCCUPANCY CERTIFICATE WHICH HAVE BEEN OBTAINED BY THE ASSESSE E WITH RESPECT TO THE TWO BUILDINGS WHICH ARE ALSO PLACED ON RECORD VIDE PAPE R BOOK PAGE 41 TO 46 AND THE CERTIFICATE OF COMPLETION IS PLACED AT PAPER BO OK PAGE 47. THE CERTIFICATE OF THE ARCHITECT IS PLACED AT PAPER BOOK PAGE 48. THE LD. COUNSEL RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT V. VANDANA PROPERTIES (2012) 206 TAXMAN 584 (BOMBAY) AND SUBM ITTED THAT THE PLOT OF LAND SIZE IS MORE THAN 1 ACRE ON WHICH HOUSING PROJ ECTS WAS CONSTRUCTED COMPRISING TWO BUILDINGS PRIOR TO 31-03-2008 AND HE NCE DEDUCTION SHOULD BE ITA 2882/MUM/2012 8 ALLOWED U/S. 80IB(10) OF THE ACT. THE LD. COUNSEL ALSO RELIED ON THE FOLLOWING DECISIONS:- 1. HONBLE BOMBAY HIGH COURT DECISION IN THE CASE O F CIT V. HAPPY HOME ENTERPRISES (2014) 90 CCH 0106 MUM HC. 2. ITAT HYDERABAD DECISION IN THE CASE OF ITO V. PRASHANTH SAI BUILDERS (2014) 39 CCH 0029 HYD TRIB. 3. ITAT MUMBAI BENCH DECISION IN THE CASE OF MUDHIT MADANLAL GUPTA V. ACIT (2011) 51 DTR (MUMBAI)(TRIB) 217. 4. ITAT MUMBAI DECISION IN THE CASE OF SAROJ SALES ORGANISATION V. ITO (2008) 115 TTJ 0485 5. HONBLE DELHI HIGH COURT DECISION IN THE CASE OF CIT V. CHD DEVELOPERS LTD. (2014) 362 ITR 0177 (DELHI). 8. THE LD. D.R. ON THE OTHER HAND RELIED ON THE O RDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AGREEMENT DOES NOT MEN TION THE NAME OF THE ASSESSEE. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAWS RELIED UPON. WE HAVE OBSERVED THAT THE ASSESSEE HAS ENTERED INTO DEVELOPMENT AGRE EMENT DATED 24 TH SEPTEMBER 2004 WITH RESPECT TO DEVELOPMENT OF 9734 .86 SQ. MTRS OF LAND WHICH IS FOR THE PURPOSE OF DEVELOPMENT OF EIGHT RE SIDENTIAL BUILDINGS AT VILLAGE BOLINJ TALUKA VASAI DIST THANE BEARING SU RVEY NO. 205/A FOR A TOTAL CONSIDERATION OF RS. 1 20 46 000/-. THE DEVELOPMENT AGREEMENT IS PLACED ON RECORD BEFORE US IN PAPER BOOK AT PAGE 1-34. THE A SSESSEE HAS COMPLETED ONLY TWO BUILDINGS OUT OF EIGHT BUILDINGS PROPOSED TO BE CONSTRUCTED ON THE SAID PLOT OF LAND AS APPROVED BY CIDCO . HOWEVER THE PLINTH AREA OF LAND IS LESS THAN 1 ACRE W.R.T. CONSTRUCTION OF THESE TWO C OMPLETED RESIDENTIAL BUILDINGS WHICH IS 2163.90 SQUARE METERS AS PER THE PHYSICAL MEASUREMENT WHICH IS AN UNDISPUTED AND ADMITTED POSITION BETWEE N THE RIVAL PARTIES. THE ITA 2882/MUM/2012 9 ASSESSEE STATED THAT IT DID NOT CONTINUE WITH THE C ONSTRUCTION OF THE REST SIX BUILDINGS DUE TO ECONOMIC DOWNTURN AND LACK OF DEMA ND OF RESIDENTIAL UNITS WHICH ARE BEYOND CONTROL OF THE ASSESSEE. THE AUTHO RITIES BELOW DENIED THE DEDUCTION U/S. 80IB(10) OF THE ACT TO THE ASSESSEE AS THE PLINTH AREA OF PLOT OF LAND ON WHICH TWO BUILDINGS WERE CONSTRUCTED WAS 21 63.90 SQUARE METERS WHICH IS LESS THAN ONE ACRE IN SIZE. IT IS NOT BOR NE OUT FROM THE RECORDS BEFORE US WHETHER THE ASSESSEE HAS UNDERTAKEN ANY EFFECTIV E STEP TOWARDS THE CONSTRUCTION OF THE REST SIX BUILDINGS BEFORE ABAND ONING THE SAME AND AFTER ENTERING INTO DEVELOPMENT AGREEMENT DATED 24-09-200 4 WITH THE LAND-OWNERS AND AT WHAT STAGE THE SAID PLANS FOR DEVELOPMENT /CONSTRUCTION OF REST SIX BUILDINGS WERE ABANDONED BY THE ASSESSEE AND CANCEL LATION AGREEMENT ENTERED INTO WITH THE LANDOWNERS. IT IS ALSO NOT B ORNE OUT FROM RECORDS WHETHER THE ASSESSEE MADE FULL PAYMENT OR NOT TO TH E LAND OWNERS AS STIPULATED IN THE DEVELOPMENT AGREEMENT DATED 24-09 -2004 BEFORE ABANDONING/CANCELLING THE DEVELOPMENT AGREEMENT W.R .T. SIX BUILDINGS NOT CONSTRUCTED BY THE ASSESSEE ON THE SAID PLOT OF LAN D. WHICH FACTS ALSO NEEDS VERIFICATION BY LOWER AUTHORITIES TO ESTABLISH THAT THE ASSESSEE WAS GENUINELY AND BONAFIDELY INVOLVED IN CONSTRUCTION/DEVELOPMENT OF EIGHT BUILDINGS ON PLOT OF LAND OF 9734.86 SQUARE METERS WHICH IS MORE THAN ONE ACRE IN SIZE BUT FOR THE REASONS BEYOND ASSESSEES CONTROL THE R EST SIX BUILDINGS COULD NOT BE COMPLETED DESPITE ASSESSEE TAKING EFFECTIVE STEP S FOR CONSTRUCTION OF THESE REST SIX BUILDINGS WHICH PLAN FOR CONSTRUCTION WAS ABANDONED LATER ON BY THE ASSESSEE. IN CASE THE ASSESSEE IS ABLE TO PROVE THE GENUINENESS AND BONA-FIDE OF DEVELOPMENT AGREEMENT DATED 24-09-2004 ENTERED I NTO BY THE ASSESSEE WITH THE LAND OWNERS AND ITS PLANS AND CAPABILITIES TO CONSTRUCT EIGHT BUILDINGS THE ASSESSEE IN THAT CASE WILL BE ENTI TLED FOR BENEFIT OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WITH RESPECT TO T WO BUILDINGS COMPLETED PRIOR TO 31-03-2008. THUS IN NUT-SHELL GENUINENES S OF THE DEVELOPMENT AGREEMENT DATED 23-09-2004 NEEDED TO BE ASCERTAINED BEFORE ALLOWING THE DEDUCTION U/S 80IB(10) OF THE ACT W.R.T. TWO COMPLE TED BUILDINGS IN THE ITA 2882/MUM/2012 10 INSTANT CASE KEEPING IN VIEW THE PECULIAR FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. THE ASSESSEE IN OUR CONSIDERED VIEW HAS NOT PLACED SUFFICIENT MATERIAL BEFORE THE AUTHORITIES BELOW AS WELL BEFOR E US TO VERIFY THE GENUINENESS OF THE DEVELOPMENT AGREEMENT DATED 24-0 9-2004 AND BONA-FIDE OF ITS PLAN TO CONSTRUCT EIGHT BUILDINGS VIDE DEVEL OPMENT AGREEMENT DATED 24- 09-2004. IN OUR CONSIDERED VIEW THESE ASPECTS AS SET OUT ABOVE BY US NEEDS FURTHER ENQUIRY AND VERIFICATIONS BY THE AUTHORITI ES BELOW AND HENCE WE ARE INCLINED TO SET-ASIDE AND RESTORE THE ISSUE TO THE FILE OF THE AO FOR CONDUCTING NECESSARY ENQUIRY AND VERIFICATIONS BY THE AO AS RE FERRED TO BY US AS ABOVE BEFORE DE-NOVO ADJUDICATION OF THE ISSUE ON MERITS. THE ASSESSEE IS DIRECTED TO PRODUCE ALL THE RELEVANT EVIDENCES AND EXPLANATI ONS BEFORE THE A.O. SUCH AS DEVELOPMENT AGREEMENT ENTERED INTO BY THE ASSESS EE WITH THE OWNERS FOR DEVELOPMENT/ CONSTRUCTION OF EIGHT BUILDINGS ON THE PLOT OF LAND ADMEASURING 9734.87 SQUARE METERS PAYMENTS MADE BY THE ASSESSE E AS PER THE DEVELOPMENT AGREEMENT TO THE OWNERS OF THE PLOT OF LAND EFFECTIVE STEPS TAKEN BY THE ASSESSEE FOR CONSTRUCTION OF THE REST SIX BUILDINGS ON THE PLOT OF LAND PERMISSIONS OBTAINED FROM THE AUTHORITIES FO R CONSTRUCTING SIX BUILDINGS THE CANCELLATION AGREEMENT ENTERED INTO BY THE ASSESSEE WITH THE LAND OWNERS AND THE STAGE OF ENTERING CANCELLATION AGREEMENT WITH THE LAND OWNERS ETC. TO ESTABLISH THAT THE ASSESSEE GENUI NELY AND BONAFIDELY ENTERED INTO DEVELOPMENT AGREEMENT DATED 24-09-2004 WITH T HE LAND OWNERS TO CONSTRUCT EIGHT BUILDINGS ON THE PLOT OF LAND OF 97 34.86 SQUARE METERS BUT FOR REASONS BEYOND ITS CONTROL DUE TO LACK OF DEMAND FO R RESIDENTIAL UNITS AND DOWNTURN IN THE ECONOMY THE PLANS FOR CONSTRUCTION OF REST SIX BUILDINGS WERE SHELVED/ABANDONED. THE ASSESSEE IS DIRECTED T O PRODUCE ALL THE RELEVANT EVIDENCES AND EXPLANATIONS BEFORE THE A.O. . NEEDLE SS TO SAY THE A.O. SHALL PROVIDE PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE A ND IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. ITA 2882/MUM/2012 11 10. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 2882/MUM/2012 FOR THE ASSESSMENT YEAR 2006-07 IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER 2016. # $% &' 26-10-2016 ( ) SD/- SD/- (C.N. PRASAD) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 26-10-2016 [ .9../ R.K. R.K. R.K. R.K. EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED MUMBAI 4. : / CIT- CONCERNED MUMBAI 5. =>( 99?@ ?@ $ / DR ITAT MUMBAI E BENCH 6. (BC / GUARD FILE. / BY ORDER = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) $ / ITAT MUMBAI