ITO, Ward 1(3), Pune v. Shri Satyanarayan Ramswaroop Agarwal, Pune

ITA 330/PUN/2013 | 2009-2010
Pronouncement Date: 28-04-2014 | Result: Dismissed

Appeal Details

RSA Number 33024514 RSA 2013
Assessee PAN AAPPA6151M
Bench Pune
Appeal Number ITA 330/PUN/2013
Duration Of Justice 1 year(s) 2 month(s) 27 day(s)
Appellant ITO, Ward 1(3), Pune
Respondent Shri Satyanarayan Ramswaroop Agarwal, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 28-04-2014
Assessment Year 2009-2010
Appeal Filed On 01-02-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO.330/PN/2013 (A.Y: 2009-10) ITO WARD 1(3) PUNE APPELLANT VS. SHRI SATYANARAYAN RAMSWAROOP AGARWAL PLOT NO.15 GEET SWAROOP KANIFNATH SOCIETY HADAPSAR PUNE - 411028 PAN: AAPPA6151M RESPONDENT APPELLANT BY : SHRI P.L.PA THADE RESPONDENT BY : SHRI PRA MOD SHINGTE DATE OF HEARING: 02.04.2014 DATE OF ORDER : 28.04.2014 ORDER PER SHAILENDRA KUMAR YADAV J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-I [IN SHORT CIT(A)] PUNE DATED 29.11.2012 FOR A.Y. 2009-10 ON THE FOLLOWING GROUNDS. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX(APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AN D CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN DELETING THE DISALLOWANCE MADE BY THE ASSE SSING OFFICER OF THE ASSESSEE'S CLAIM OF DEDUCTION U/S.80 -IB(10) INSTEAD OF CONFIRMING THE SAID DISALLOWANCE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO APPRECIATE THAT THE ASSESSEE FA ILED TO FULFILL THE CONDITIONS LAID DOWN IN CLAUSES (A) (B ) AND (C) OF 2 SUB-SECTION (10) OF SECTION 80-IB AND THEREFORE W AS NOT ENTITLED TO DEDUCTION UNDER THE AFORESAID SECTION. 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO APPRECIATE THAT THE SIZE OF THE PLOT ON WHICH THE ASSESSEE BUILT ITS PROJECT IS 3952 SQ. MT RS. WHICH IS LESS THAN ONE ACRE AND THUS THE CONDITION IN (B) OF SECTION 80-IB(10) IS NOT SATISFIED. 5. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO APPRECIATE THAT IN THE CBDT'S C IRCULAR NO.5/2005 DATED 15.07.2005 IT HAS BEEN CATEGORICALL Y CLARIFIED THAT 'THE AREA LIMIT OF THE PLOT HAS TO B E CONSTRUED WITH REFERENCE TO THE AREA OF THE SITE IN WHICH THE HOUSING PROJECT IS CONSTRUCTED' WHICH CLEARLY M EANS THAT THE ACTUAL AREA ON WHICH CONSTRUCTION IS MADE HAS TO BE TAKEN INTO CONSIDERATION. 6. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO APPRECIATE THAT THE COMMERCIAL ESTABLISHMENT IN THE ASSESSEE'S HOUSING PROJECT EXC EEDED 5% OF THE AGGREGATE BUILT-UP AREA AND THUS THE ASSE SSEE HAD VIOLATED THE CONDITION STIPULATED IN CLAUSE (D) OF SECTION 80-IB(10). 7. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN HOLDING THAT THE CONDITION LAID DOWN IN CL AUSE (D) WOULD APPLY ONLY TO PROJECTS APPROVED AFTER 01.04.2 005 AND NOT TO PROJECTS APPROVED PRIOR THERETO. SUCH AN INTERPRETATION IS ALIEN TO SECTION 80-IB(10) WHICH IS CLEAR AND UNAMBIGUOUS. 8. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) GRO SSLY ERRED IN FAILING TO APPRECIATE THAT RECKONED FROM T HE DATE ON WHICH THE ASSESSEE HAD TAKEN THE FIRST APPROVAL FROM THE LOCAL AUTHORITY THE HOUSING PROJECT OUGHT TO H AVE BEEN COMPLETED WITHIN THE PRESCRIBED PERIOD OF FOUR YEARS AND THE ASSESSEE HAD FAILED TO DO SO WHICH IS VIOL ATIVE OF THE CONDITION LAID DOWN IN SUB-CLAUSE (B) OF THE FI RST EXPLANATION TO SECTION 80-IB(10). 3 9. THE LEARNED COMMISSIONER OF INCOME-TAX(AP PEALS) GROSSLY ERRED IN FAILING TO APPRECIATE THAT SECTION 80- IB(10) NOWHERE ENVISAGES ALLOWANCE OF DEDUCTION THE RE UNDER ON A PROPORTIONATE BASIS AND ON THE CONTRARY STIPULATES THAT DEDUCTION WOULD BE ADMISSIBLE ONLY ON COMPLETION OF THE ENTIRE HOUSING PROJECT WHICH IS EVIDENT FROM CLAUSE (II) OF THE 1ST EXPLANATION TO SECTION 80-IB(10). 10. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN ALLOWING PROPORTIONATE DEDUCTION EVEN AFTER OBSERVING THAT 'THE LEGISLATIV E INTENT READ WITH THE CLEAR PROVISIONS OF THE REQUISITE SEC TIONS DO NOT PERMIT ANY PROPORTIONATE REDUCTION U/S.80-IB(10 ). 11. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN FOLLOWING THE DECISION OF THE HON' BLE ITAT PUNE BENCH IN THE CASE OF RAMSUKH PROPERTIES VS. DCIT CIR.2 PUNE (ITA NO.84/PN/2011 VIDE ORDER DATE D 25.07.2012) EVEN AFTER NOTING THAT IN THE CASE OF B RAHMA ASSOCIATES THE HON'BLE BOMBAY HIGH COURT HAD DISAPPROVED OF THE CONCEPT OF PROPORTIONATE DEDUCTI ON U/S.80-IB(10). 12. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF THE HEARING THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX(APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 13. THE APPELLANT CRAVES LEAVE TO ADD AMEND ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL DURING TH E COURSE OF THE APPELLATE PROCEEDINGS BEFORE THE HON' BLE TRIBUNAL. 2. IN ASSESSMENT ORDER THE ASSESSING OFFICER HAD D ENIED THE ASSESSEES CLAIM FOR DEDUCTION U/S.80IB(10) ON THE FOLLOWING GROUNDS: 1. THE PLOT SIZE IS LESS THAN ONE ACRE 2. VIOLATION OF TERMS OF APPROVAL OF THE HOUSING P ROJECT 3. EXCEEDING LIMIT OF COMMERCIAL ESTABLISHMENT BEY OND PERMISSIBLE LIMIT 4. NON-COMPLETION OF THE HOUSING PROJECTS. 4 3. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AU THORITY WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AND AGREEING TO THE CONTENTIONS RAISED ON BEHALF OF ASSESSEE THE CIT(A) ALLOWED THE CLAIM OF ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE FOR THE REAS ONS STATED IN ITS GROUNDS OF APPEAL. ON THE OTHER HAND THE LEAR NED AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE ORDER OF CIT(A) ON ALL ACCOUNTS. 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD WITH REGARD TO THE SIZE OF PLOT WE FIND THA T THE CIT(A) OBSERVED FROM THE COMMENCEMENT CERTIFICATE AND BUIL DING PLAN APPROVED BY PMC ON 03.02.2005 THAT THE SIZE OF PLOT ACQUIRED BY ASSESSEE VIDE DEVELOPMENT AGREEMENT DATED 23.10.200 3 WAS OF SIZE OF 43.5 R. AS PER BUILDING PLAN THE SIZE OF PLOT IS 4134.00 SQ.MTRS. OUT OF WHICH 182.99 SQ.MTRS. WAS ACQUIRED FOR ROAD WIDENING BY PMC MAKING PLOT SIZE 3952 SQ.MTRS. HOW EVER AS PER CBDT CIRCULAR NO.5/2005 THE AREA EARMARKED FOR ROAD AND COMMON AMENITIES MUST CONFORM TO THE PROJECT APPROV ED BY THE LOCAL AUTHORITY. RELYING ON THIS ITAT PUNE & MUMB AI BENCHES HAVE TAKEN A VIEW THAT SIMPLE AND PLAIN READING OF SECTION 80IB(10) SHOULD MEAN THAT PLOT AREA OF ONE ACRE SHO ULD BE AVAILABLE FOR HOUSING PROJECT INCLUSIVE OF AMENITIE S REQUIRED TO BE SET APART AS PER NORMS OF CONCERNED MUNICIPAL CORPO RATION OR LOCAL BODY WHATEVER APPLICABLE. A SIMILAR ISSUE IN THE CASE OF BUNTY BUILDERS VS ITO IN ITA NO.1808/PN/05 FOR A. Y. 2003-04 WHEREIN THE TRIBUNAL HAS OBSERVED AS UNDER: 'AS PER THE REVENUE AUTHORITIES BOTH AO AND LD. CI T (A) SINCE THE NET AREA AVAILABLE FOR THE PURPOSE OF CON STRUCTION WAS LESS THAN 1 ACRE THEREFORE THE ASSESSEE WAS NOT ENTITLED TO CLAIM OF DEDUCTION U/S 80IB(10). HOWEVER WE ARE NOT IN AGREEMENT WITH SUCH AN APPROACH OF THE REVENUE AUTH ORITIES. TO GIVE STRENGTH TO OUR REASONS FOR SUCH DISAGREEME NTS WE HEREBY REFER ONE OF THE POINT AS EXPLAINED IN THE C BDT CIRCULAR CITED IN 276 ITR 170 (STATUTE) WHEREIN TH E GUIDELINES ISSUED WERE AS FOLLOWS:- 5 'EXTENSION OF TIME LIMIT FOR OBTAINING APPROVAL OF HOUSING PROJECTS THE PURPOSE OF TAX HOLIDAY UNDER SECTION 80IB(10) AND ALLOWING DEDUCTION FOR RE-DEVELOPMENT OR RECONSTRUCTION OF EXISTING BUILDING IN SLUM AREAS T HIS SECTION DOES NOT SPECIFICALLY PROVIDE AREA LIMIT FO R THE GARDEN THE DEVELOPMENT PLAN ROADS INTERNAL MEANS OF ACCESS ETC. IN THE HOUSING PROJECT. THEREFORE THE SAME SHOULD CONFORM TO THE PROJECT PLAN APPROVED BY THE LOCAL AUTHORITY IN ACCORDANCE WITH THE REGULATIONS IN FOR CE. ALSO THE AREA LIMIT OF THE PLOT HAS TO BE CONSTRUED WITH REFERENCE TO THE AREA OF THE SIT IN WHICH THE HOUSI NG PROJECT IS CONSTRUED AND NOT WITH REFERENCE TO THE DEMARCATION OF LAND DONE BY THE LAND DEVELOPMENT AUTHORITY. 9. THIS CIRCULAR THUS GIVES A CLEAR INDICATION THAT THOUGH THE SECTION DO NOT SPECIFICALLY PROVIDE FOR THE DEVELOP MENT PLAN ROADS OR GRANT OF OTHER FACILITIES ETC. IN A HOUSIN G PROJECT BUT THE SAME SHOULD CONFORM TO THE PROJECT PLAN APPROVE D BY THE LOCAL AUTHORITY. OUR NEXT REASONING IS ON THE BASIS OF ABOVE DISCUSSION THAT THE LIMIT OF THE PLOT HAS TO BE CON STRUED WITH REFERENCE TO THE AREA AVAILABLE ON THE SITE ON WHIC H THE HOUSING PROJECT IS TO BE CONSTRUCTED AND NOT WITH R EFERENCE TO THE DEMARCATION OF LAND. MEANING THEREBY THE HOUSIN G PROJECT THUS CONSTITUTE DEVELOPMENT PLAN ROADS AND GRANT OF OTHER FACILITIES: THEREFORE THOSE AREAS SHOULD EXIST WITH IN THE PRESCRIBED LIMITS AND TO BE CONSIDERED AS PART AND PARCEL OF THE PROJECT. EVEN IN THE PRESENT CASE THE FACTS HAV E REVEALED THAT THE PLAN WOULD NOT HAVE BEEN APPROVED IF THE A SSESSEE WOULD NOT HAVE MADE 15% AMENITY SPACE AVAILABLE TO THE CORPORATION. THOUGH AMENITY SPACE WAS STATED TO B E SURRENDERED TO THE CORPORATION BUT SUCH SACRIFICE O F THE BUILDER WAS DULY RECOGNIZED AND COMPENSATED BY GRAN TING ADDITIONAL FSI FOR THE SAID PROJECT. IF WE ACCEPT T HE PROPOSITION OF THE REVENUE DEPARTMENT THAT THE AREA WHICH WAS DIRECTLY UNDER THE BUILDING CONSTRUCTION SHOULD ONLY BE HELD AS THE PROJECT FOR CONSTRUCTION THEN A BUILDE R HAS TO ACQUIRE A LAND MORE THAN 1 ACRE OF LAND. THEN ONLY AFTER THE SET APART OF THE AMENITY SPACE HE COULD BE LEFT WIT H THE BALANCE 1 ACRE FOR PROJECT DEVELOPMENT. BUT SUCH PR OPOSITION WAS NOT INTENDED IN THE LEGISLATURE. THE LANGUAGE OF THE SECTION DID NOT PRESCRIBE SUCH HYPOTHECATION. THERE FORE AN ANOTHER REASONING OF OUR REJECTION OF SUCH A PROPOS ITION OF THE REVENUE DEPARTMENT IS THAT IT WOULD BE ILLOGICAL TO EXPECT FROM A BUILDER TO HAVE EXCESS LAND AREA THAN 1 ACRE : AT LEAST 15% EXCESSIVE AREA APPLICABLE FOR PUNE CORPORATION SO THAT AFTER SETTING APART 15% AREA THE BALANCE SHOULD RE MAIN 1 ACRE FOR THE PURPOSE OF CONSTRUCTION. THIS SUGG ESTION OF APPROACH OF INTERPRETATION OF A STATUTE IS NOT IDEA LISTIC 6 BECAUSE WE CANNOT READ BEYOND THE SCOPE OF THE STAT UTE. NORMAL RULE OF INTERPRETATION OF STATUTES IS THAT T HE GENERAL WORDS MUST RECEIVE A GENERAL CONSTRUCTION UNLESS TH ERE IS SOMETHING OTHERWISE EXPRESSLY PROVIDED IN THE STATU TE. GENERAL WORDS HAVE ORDINARILY A GENERAL M EANING THE FIRST TASK IN INTERPRETATION IS TO GIVE THE WORD THEIR PLAIN AND ORDINARY MEANING. THIS IS WHAT WE HAVE GATHERED FRO M THE BOOKS AVAILABLE ON THIS SUBJECT WITH AN ATTEMPT TO SUBSCRIBE A SIMPLE AND REALISTIC MEANING TO THE CLAUSE (B) TO SECTION 80IB(10) OF THE I. T. ACT. NOTHING MORE CAN BE ADDE D HENCE WE HAVE TO RESTRICT THE INTERPRETATION THAT THE AREA O F 1 ACRE SHOULD BE AVAILABLE FOR THE HOUSING PROJECT INCLUSI VE OF AMENITIES REQUIRED TO BE SET APART AS PER THE NORMS OF A CORPORATION. THEREFORE A JUSTIFIABLE CONCLUSION IS THAT WHEN THERE IS NO DOUBT MORE SO IT IS NOT IN DISPUTE THA T A PORTION OF THE LAND IN THE PRESENT CASE IT IS 15% TO BE EA RMARKED OR SET-APART OR RESERVED OR SEGREGATED OUT OF THE TOTA L LAND IN QUESTION MINIMUM 1 ACRE MEANT FOR THE PURPOSE OF PROJECT IN TERMS OF RULES / REGULATION OF A LOCAL BODY I.E. P UNE MUNICIPAL CORPORATION AND WITHOUT THAT SEGREGATION THE PROJE CT COULD NOT I SANCTIONED THEN THAT PORTION BEING MANDATORY FOR AMENITY PURPOSE HAS TO BE TAKEN AS A PART AND PARCE L OF THE LAND AVAILABLE FOR THE PROJECT. IN THE PRESENT CASE SINCE THE AREA AVAILABLE FOR THE PROJECT WAS 4600 SQ.MTR. THA T IS MORE THAN 1 ACRE (4046 SQ.MTR.) THEREFORE THE APPELLANT IS ENTITLED FOR THE CLAIM OF DEDUCTION U/S 80IB(10)(B) IN THIS PORTION OF LAND. WE HOLD ACCORDINGLY.' 5. NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLED GE ON BEHALF OF REVENUE. FACTS BEING SIMILAR SO FOLLOWI NG THE SAME REASONING WE ARE NOT INCLINED TO INTERFERE WITH TH E FINDING OF CIT(A) WHO HAS DECIDED THE ISSUE OF SIZE OF PLOT A S DISCUSSED ABOVE IN FAVOUR OF ASSESSEE BY FOLLOWING THE RATIO OF BUNTY BUILDERS (SUPRA). THIS REASONED FINDING OF CIT(A) ON THE POINT OF SIZE OF PLOT OF 1 ACRE NEEDS NO INTERFERENCE FROM O UR SIDE. WE UPHOLD THE SAME. 6. THE NEXT OBJECTION IS WITH REGARD TO VIOLATION OF TERMS OF APPROVAL OF HOUSING PROJECT. THE ASSESSING OFFICER NOTED THAT HOUSING PROJECT WAS SANCTIONED INITIALLY FOR THREE BUILDINGS COVERING 3358.62 SQ. MTRS. OF TOTAL BUILT-UP AREA ( COMPRISING OF 71 RESIDENTIAL TENEMENTS AND 16 COMMERCIAL ESTABLIS HMENTS) IN 7 THE YEAR 2005. THE ASSESSEE HAS SUBSEQUENTLY REVIS ED THE PLAN IN 2007 IN WHICH TWO BUILDERS WERE COVERING 2398.16 SQ. MTRS. OF OUT OF TOTAL BUILT UP AREA (COMPRISING OF 52 RESIDE NTIAL TENEMENTS AND 16 COMMERCIAL ESTABLISHMENTS) AND ONE BUILDING COVERING 933.62 SQ. MTRS. (19 RESIDENTIAL TENEMENTS) ACCORD INGLY THE ASSESSEE HAS VIOLATED THE TERMS OF APPROVAL OF HOUS ING PROJECT. AGAINST THE SANCTIONED PLAN OF TOTAL BUILDING BUIL T UP AREA 3358.62 SQ. MTRS. IN 2005 THE ASSESSEE HAS COMPLET ED CONSTRUCTION OF TWO BUILDINGS OF TOTAL BUILT UP ARE A OF 2398.16 SQ. MTRS. ONLY WHICH IS EQUAL TO JUST 71.40% OF TOTAL B UILT UP AREA AS PER INITIALLY APPROVED HOUSING PROJECT. 6.2 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AND IT WAS FOUND THAT THE ASSESSING OFFICER HAS TAK EN OBJECTION TO THE FACT THAT THERE WAS VIOLATION IN THE BUILT U P AREA AS PER INITIAL SANCTION DATED 03.02.2005 (3358.62 SQ.MTRS. ) AND SUBSEQUENT SANCTION DATED 01.10.2007 (2398.16 SQ.MT RS.) OF THE PUNE MUNICIPAL CORPORATION. THIS OBJECTION OF ASSE SSEE WAS NOT JUSTIFIED SINCE ANY BUILDER IS ENTITLED TO GET PLAN S REVISED FROM PMC DEPENDING ON FINANCIAL CAPACITY CONVENIENCE AN D AS PER BUSINESS NEED. WHILE BUILDING SPECIFICATION HAVE T O MATCH AS PER REVISED PLAN THE DATE OF APPROVAL OF SUCH REVISED PLAN WOULD BE DEEMED TO BE DATE OF FIRST APPROVAL IN TERMS OF EXP LANATION TO SECTION 80IB(10). THIS OBJECTION DOES NOT ARISE OU T OF RELEVANT PROVISION TO SECTION 80IB(10) AS PER INITIALLY APPR OVED BY LOCAL AUTHORITY HAS TO BE IMPLEMENTED IN ORDER TO BE ELI GIBLE FOR CLAIM U/S.80IB(10). THE ONLY RIDER IN SECTION 80IB(10) I S THAT NO MATTER HOW MANY REVISED PLANS WERE SANCTIONED BY LOCAL AUT HORITY THE DATE OF APPROVAL (VIS--VIS DATE OF COMPLETION) WOU LD BE DEEMED TO BE THE DATE OF INITIAL APPROVAL. THIS ISSUE HAS BE EN DISCUSSED BY ASSESSING OFFICER REGARDING NON COMPLETION OF BUILD ING IN THE 8 PROJECT IN SUCCEEDING PARA. SO THE SAME WILL BE D ISCUSSED IN FOLLOWING PARA. 7. THE NEXT OBJECTION OF ASSESSING OFFICER IS THAT THE ASSESSEE HAS EXCEEDED THE LIMITS OF COMMERCIAL ESTABLISHMENT S BEYOND PERMISSIBLE LIMIT. THE ASSESSING OFFICER OBSERVED THAT AS PER SANCTIONED PLAN BY PMC DATED 03.02.2005 COMMERCIAL ESTABLISHMENT IN HOUSING PROJECT IS 210.92 SQ. MTRS . WHICH IS MORE THAN 3% OF AGGREGATE BUILT UP AREA AS PERMITTE D U/S.80IB(10). THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHORITY WHEREIN THE VARIOUS CONTENTIONS WERE RAI SED ON BEHALF OF ASSESSEE AND HAVING CONSIDERED THE SAME THE CIT (A) OBSERVED THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V S. BRAHMA ASSOCIATES (2011) 333 ITR 289 (BOM) WHEREIN IT HA S BEEN HELD THAT UP TO 31.03.2005 (SUBJECT TO FULFILLING OF OTH ER CONDITIONS) DEDUCTION U/S.80IB(10) IS ALLOWABLE TO HOUSING PROJ ECT APPROVED BY LOCAL AUTHORITY HAVING RESIDENTIAL UNITS WHICH W ITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER DC RULES / REGUL ATIONS FRAMED BY RESPECTIVE AUTHORITY. THE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES HELD THAT AM ENDMENT IN CLAUSE (D) OF SUB-SECTION SPECIFYING COMMERCIAL ARE A UP TO 10% OF PROJECT IN HOUSING PROJECT APPLIES TO THE PROJECT A PPROVED AFTER 01.04.2005 AND THE AMENDMENT AFFECTED BY FINANCE AC T (NO.2) OF 2004 W.E.F. 01.04.2005 WOULD NOT HAVE RETROSPECTIVE EFFECT AND THAT APPROVAL OF HOUSING PROJECT PRIOR TO 01.04.200 5 WITH COMMERCIAL USER PERMITTED UNDER DC RULES / REGULATI ONS FRAMED BY RESPECTIVE LOCAL AUTHORITY WOULD STILL BE EXEMPT U/S.80IB(10). THIS ISSUE OF COMMERCIAL LIMIT IS FORTIFIED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASS OCIATES (SUPRA). THIS REASONED FINDING OF CIT(A) ON THE IS SUE OF COMMERCIAL LIMIT NEEDS NO INTERFERENCE FROM OUR SID E. WE UPHOLD THE SAME. 9 8. THE NEXT ISSUE IS WITH REGARD TO NON-COMPLETION OF HOUSING PROJECT. THE ASSESSING OFFICER STATED THAT THE ASS ESSEE HAS COMMENCED THE CONSTRUCTION OF THIRD BUILDING IN THE YEAR 2010- 11 AND IT CLEARLY SHOWS THAT THE ASSESSEE HAS NOT C OMPLETED THE HOUSING PROJECT WITHIN PRESCRIBED FOUR YEARS FROM T HE DATE OF FIRST APPROVAL OF HOUSING PROJECT. THE ASSESSING OFFICER OBSERVED THAT IF AT ALL THE ASSESSEE WANTED HE COULD HAVE COMPLET ED THE TOTAL HOUSING PROJECT EXCEPT THE SO CALLED 189 SQ. MTRS. OF LAND UNDER ROAD WIDENING. THE ACTION OF ASSESSEE PROVES THAT HE HAD PARTIALLY COMPLETED THE CONSTRUCTION OF BUILDING AN D CARRIED OUT ON THE SAME TILL 2010-11 BY WHICH IT IS PROVED BEY OND DOUBT THAT HE HAD NOT COMPLETED HOUSING PROJECT WITHIN THE PRE SCRIBED PERIOD OF FOUR YEARS. THE MATTER WAS CARRIED BEFOR E FIRST APPELLATE AUTHORITY WHEREIN THE VARIOUS CONTENTIONS WERE RAI SED ON BEHALF OF ASSESSEE AND HAVING CONSIDERED THE SAME THE CIT (A) GRANTED RELIEF TO THE ASSESSEE ON THIS ACCOUNT AS WELL. TH E SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE. ON THE OTH ER HAND THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 8.1 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD WE FIND THAT THE ISSUE BEFORE US IS WITH RE GARD TO PRORATA DEDUCTION U/S.80IB(10). ON THE ISSUE OF PRORATA DE DUCTION THE ITAT PUNE BENCH HAS ALLOWED PRORATA DEDUCTION U/S.8 0IB(10) IN THE CASE OF RAMSUKH PROPERTIES VS. DCIT CIRCLE 1 PUNE IN ITA NO.84/PN/2011 VIDE ITS ORDER DATED 25.07.2012. FOR THE CONVENIENCE THE RELEVANT PORTION OF THE ORDER READ S AS UNDER: WE AGREE TO PROPOSITION PUT FORWARD BY LD. DEPARTM ENTAL REPRESENTATIVE THAT PLAIN READING OF SECTION 80IB(1 0) OF THE ACT SUGGESTS ABOUT ONLY COMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONG WITH THE WORD COMPLE TION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMA L CIRCUMSTANCES. HOWEVER IN CASE BEFORE US ASSESS EE WAS PREVENTED BY REASONABLE CAUSE TO COMPLETE CONSTRUC TION IN TIME DUE TO INTERVENTION OF CID ACTION ON ACCOUNT O F VIOLATION 10 OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. ASSESSEE WAS INCAPACITATED TO COMPLETE TH E SAME IN TIME DUE TO REASONS BEYOND HIS CONTROL. ASSESSEE SHOULD NOT SUFFER FOR SAME. THE REVISION OF PLAN IS VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STRICT PROVI SIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBER ALLY AND THAT PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. AT THE SAME TIME RESTRICTIO N THEREON TOO/ HAS TO BE CONSTRUED STRICTLY SO AS TO ADVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRATE THE SAME. THE PRO VISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WIT H THE OBJECT OF STATUTE TO EFFECTUATE THE LEGISLATIVE INT ENTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES WE HOLD THAT ASSE SSEE IS ENTITLED FOR BENEFIT U/S 80IB(10) OF THE ACT IN RES PECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMIT. THE ASSESS ING OFFICER IS DIRECTED ACCORDINGLY.' 8.2 IN VIEW OF ABOVE IT IS CLEAR THAT ASSESSEE REC EIVED APPROVAL FOR C BUILDING FROM PMC VIDE CERTIFICATE DATED 03.0 2.2005 BUT WORK ON C BUILDING COULD NOT START SINCE ADDITIONAL FSI IN LIEU OF ROAD WIDENING WAS NOT RECEIVED FROM PMC. THE ASSES SEE COULD NOT PLAN THE WORK FOR C BUILDING SINCE ENGINEERS AN D ARCHITECTS COULD NOT DESIGN THE STRUCTURE OF BUILDING IN THE A BSENCE OF FSI. THE DETAILS OF FOLLOW UP DONE BY ASSESSEE WITH PMC HAVE BEEN DULY APPRECIATED BY CIT(A). THE LEGISLATIVE INTENT READ THAT THE CLEAR PROVISIONS OF THE REQUISITE SECTION DO NOT P ERMIT ANY PROPORTIONATE DEDUCTION U/S. 80IB(10) OF ACT. HOWE VER IN VIEW OF THE DECISION IN RAMSUKH PROPERTIES (SUPRA) AS DISCU SSED ABOVE THE CIT(A) RIGHTLY ALLOWED THE PROPORTIONATE DEDUCT ION IN RESPECT OF PROJECT COMPLETED DURING THE IMPUGNED ASSESSMENT YEAR. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HA RMONIOUSLY WITH THE OBJECT OF STATUTE TO EFFECTUATE THE LEGISL ATIVE INTENTION. UNDER THE CIRCUMSTANCES PROPORTIONATE DEDUCTION U/ S.80IB(10) OF THE ACT IS JUSTIFIED. ACCORDINGLY THE ORDER OF CIT(A) ON THIS ISSUE NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHO LD THE SAME. 9. IN THE RESULT APPEAL FILED BY THE REVENUE IS DI SMISSED. 11 PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 28 TH OF APRIL 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 28 TH APRIL 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I PUNE 4) THE CIT-I PUNE 5) THE DR A BENCH I.T.A.T. PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY I.T.A.T. PUNE