Asstt.CIT. Cir.5, Pune, v. M/s. Viraj Properties,, Pune

ITA 49/PUN/2010 | 2006-2007
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 4924514 RSA 2010
Assessee PAN AACFV8012B
Bench Pune
Appeal Number ITA 49/PUN/2010
Duration Of Justice 2 year(s) 2 month(s) 23 day(s)
Appellant Asstt.CIT. Cir.5, Pune,
Respondent M/s. Viraj Properties,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-03-2012
Date Of Final Hearing 30-01-2012
Next Hearing Date 30-01-2012
Assessment Year 2006-2007
Appeal Filed On 07-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER ITA NO. 49/PN/2010 (ASSTT. YEAR : 2006-07 ) ACIT CIRCLE - 5 PUNE . .. APPELLANT V. M/S. VIRAJ PROPERTIES RESPONDENT 783 BHAWANI PETH PUNE 411 042 PAN : AACFV8012B ITA NO. 369/PN/2010 (ASSTT. YEAR : 2006-07 ) M/S. VIRAJ PROPERTIES APPELLANT 783 BHAWANI PETH PUNE 411 042 PAN : AACFV8012B V. ADDL. CIT CIRCLE-5 PUNE RESPONDENT ASSESSEE BY : S/SHRI R.R. VORA & RAJENDRA AGIWAL DEPARTMENT BY : SHRI. S.K. SINGH DATE OF HEARING : 30/1/12 DATE OF PRONOUNCEMENT : 30-3-12 ORDER PER I.C. SUDHIR JM THESE ARE CROSS APPEALS AGAINST THE SAME FIRST APPE LLATE ORDER. THE ISSUE RAISED IN THE GROUNDS OF THESE APPEALS ARE I NTER CONNECTED HENCE THESE ARE BEING DISPOSED OFF VIDE A CONSOLIDATED ORDER. 2. THE REVENUE HAS QUESTIONED THE FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS : 1) THE ORDER OF THE LEARNED CIT (APPEALS) IS CONTR ARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2) THE LEARNED CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN FOLLOWING DECISION OF HONBLE SPECIAL BENCH ITAT I N CASE OF BRAHMA ASSOCIATES AND OTHERS IN ITA NO. 1417/PN/20 06 LOSING SIGHT OF THE FACT THAT THE DECISION OF HONB LE ITAT WAS ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 2 ERRONEOUS ON FACTS AND IN LAW AND HAS NOT BEEN ACCE PTED BY THE DEPARTMENT. 3) THE LEARNED CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE DIRECTION OF TRIBUNAL TO ALLO W DEDUCTION U/S 80IB(10) IN CASE OF PROJECT HAVING UPTO 10% COM MERCIAL CONSTRUCTION IS CONTRARY TO PROVISIONS OF LAW CONT AINED UNDER INCOME-TAX ACT WHICH DO NOT PERMIT ANY COMMERCIAL CONSTRUCTION BEFORE AMENDMENT AND LIMIT AREA OF SUC H CONSTRUCTION W.E.F. 01.4.2005 BY VIRTUE OF AMENDMEN T BROUGHT BY FINANCE ACT 2004. 4) THE LEARNED CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN ALLOWING DEDUCTION U/S. 80IB(10) TO THE ASSESSEE N OT APPRECIATING THE FACT THAT THE PROJECT OF THE ASSE SSEE WAS APPROVED AS RESIDENTIAL-CUM-COMMERCIAL PROJECT AND IN FACT OUT OF TOTAL 8 BLOCKS 2 BLOCKS NAMELY E AND E-1 A RE TOTALLY COMMERCIAL BLOCKS AND THEREFORE ASSESSEES PROJECT CANNOT BE SAID TO BE A HOUSING PROJECT FOR THE PURPOSE OF SE C. 80IB(10) OF THE ACT. 5) THE LEARNED CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THE REASONS GIVEN BY THE ASSESSING OFF ICER FOR MAKING DISALLOWANCE OF DEDUCTION U/S. 80IB(10) OF RS.3 44 33 719/-. 6) THE LEARNED CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IB(10) IN RESPECT OF KUMAR PARISAR IF THE RESID ENTIAL AREA IS 90% OR MORE AND IN NOT APPRECIATING THAT PRIOR TO 0 1 ST APRIL 2004 NO COMMERCIAL CONSTRUCTION IS PERMITTED IN HO USING PROJECT ENVISAGED U/S 80IB(10) OF THE ACT. 7) THE LEARNED CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN RELYING ON THE DECISION OF HONBLE SPECIAL BENCH I TAT IN CASE OF BRAHMA ASSOCIATES AND OTHERS WHICH HOLDS THAT 90 % OF COMPLIANCE IS TAKEN AS SUBSTANTIVE OR FULL COMPLIA NCE OF THE PROVISION E.G. FOR DISCHARGING ADVANCE-TAX OBLIGAT IONS EVEN 90% COMPLIANCE OF CONDITIONS IS SUFFICIENT FOR DEDU CTION OF CLAIM U/S. 80IB(10). 8) THE LEARNED CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW IN RELYING ON THE DECISION OF HONBLE SPECIAL BENCH I TAT WHERE ITAT HAS HELD THAT THE AMENDMENT TO SECTION 80IB(1 0) ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 3 BROUGHT ABOUT BY THE FINANCE ACT 2004 PERMITTING A LLOWANCE OF DEDUCTION TO RESIDENTIAL PROJECT HAVING 5% OF TH E CONSTRUCTED AREA AS COMMERCIAL CONSTRUCTION OR 2000 SQ.FTS. WHICHEVER IS LESS IS SUBSTANTIVE IN NATURE AND THU S TAKING A VIEW THAT THERE WAS NO SUCH RESTRICTION FOR EARLIER ASST. YEARS IGNORING THE PRINCIPLES OF LAW THAT CONDITIONS OF A LLOWANCES ENUMERATED U/S.80IB(10)(D) ARE EXHAUSTIVE AND CANNO T BE SUBJECT MATTER OF INTERPRETATION BECAUSE SUCH CONDI TIONS DO NOT LEAVE SCOPE FOR ANY TWO VIEWS IN THE MATTER. 9) THE LEARNED CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN RELYING ON THE DECISION OF HONBLE SPECIAL BENCH ITAT WHICH INTRODUCES A NEW CONDITION OF COMMERCIAL CONSTRUCT ION UPTO 10% IN RESIDENTIAL PROJECT EVEN THOUGH THE PLAIN RE ADING OF SUB-SECTION (5) OF SECTION 80IB(10) WHICH CONTAIN S THE CONDITIONS FOR SUCH ALLOWANCE DOES NOT LEAVE ANY SC OPE FOR SUCH INTERPRETATION. 10) THE LEARNED CIT (APPEALS) HAS ERRED ON FACTS AN D IN LAW IN RELYING ON THE DECISION OF HONBLE SPECIAL BENCH I TAT WHICH HOLDS THAT COMMERCIAL CONSTRUCTION UPTO 10% IS ALLO WABLE IN RESIDENTIAL PROJECT PRIOR TO CHANGE IN LAW BROUGHT ABOUT THE FINANCE ACT 2004 AND THUS IMPORTING THE PRINCIPLE OF EQUITY IN TAXATION STATUTE WHICH HAS BEEN HELD BY HONBLE SUPREME COURT IN A NUMBER OF CASES TO HAVE NO APPLICATION T O A TAXING STATUTE. 3. THE ASSESSEE ON THE OTHER HAND HAS QUESTIONED FI RST APPELLATE ORDER ON THE FOLLOWING GROUNDS : 1. DENIAL OF DEDUCTION UNDER SECTION 80-IB (10) OF THE ACT OF RS. 6 141 481 IN RESPECT OF THE HOUSING PROJECT KUMAR PRERANA. THE HONBLE CIT(A) HAS ERRED IN CONFIRMING THE DISA LLOWANCE OF DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT OF RS.6 141 481 IN RESPECT OF A HOUSING PROJECT KUM AR PRERANA. ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 4 2. CLAIM OF DEDUCTION UNDER SECTION 80-IB(10) ON PR OFITS FROM SALE OF COMMERCIAL AREA OF RS.2 660 570 IN RESPECT OF THE HOUSING PROJECT KUMAR PARISAR. IN VIEW OF THE DECISION OF HONBLE INCOME TAX APPE LLATE TRIBUNAL PUNE (ITAT) IN APPELLANTS OWN CASE FOR AY 2004- 05 THE APPELLANT PRAYS THAT IT IS ADDITIONALLY ENT ITLED FOR CLAIM OF DEDUCTION OF RS. 2 660 570 UNDER SECTION 80-IB(1 0) OF THE ACT ON PROFIT FROM SALE OF COMMERCIAL AREA IN RESPE CT OF THE HOUSING PROJECT KUMAR PARISAR. 4. THE ISSUE RAISED IN THE ABOVE GROUNDS IS AS TO W HETHER THE ASSESSEE IS ENTITLED FOR THE CLAIMED DEDUCTION U/S. 80 IB (10) ON THE PROFIT EARNED ON ACCOUNT OF SALE OF THE PREMISES IN ITS PR OJECTS NAMELY KUMAR PRERANA AND KUMAR PARISAR. 5. THE RELEVANT FACTS ARE THAT THE ASSESSEE FIRM EN GAGED IN THE DEVELOPMENT AND SALE OF RESIDENTIAL & COMMERCIAL PR OJECTS IN PUNE HAD CLAIMED DEDUCTION U/S. 80 IB (10) AT RS. 61 41 481 /- IN THE PROJECT KUMAR PRERANA AND RS.3 44 33 709/- IN THE PROJECT KUMAR PARISAR IN THE PROFIT EARNED BY IT FROM THESE TWO PROJECTS AT RS.4 05 75 200/-. 6. THE A.O DENIED THE CLAIMED DEDUCTION U/S. 80IB ( 10) IN CASE OF THE PROJECT KUMAR PRERANA ON THE BASIS THAT THE SAID PROJECT APPROVED BY THE LOCAL AUTHORITY BEFORE 1.4.2004 WERE REQUIRED TO BE COMPLETED BEFORE 31 ST MARCH 2008 BUT IN THE PROJECT AS PER THE SURVEY REPORT ONE OF THE BUILDINGS VIZ. A-6 FORMING PART OF THE APPROVED PR OJECT HAD NOT BEEN COMPLETED TILL THE DATE OF SURVEY I.E. 28.5.2008. THE A.O. NOTED FURTHER THAT DURING THE COURSE OF SURVEY SHRI RAJESH JAIN PARTNER HAD AGREED THAT THE PROJECT KUMAR PRERANA WAS NOT COMPLETE AS ON 31 ST MARCH 2008 AND HAD AGREED TO VOLUNTARILY WITHDRAW THE CLAIM IN RES PECT OF THIS PROJECT FOR A.YS. 2003-04 2004-05 2005-06 AND 2006-07. AS PE R THE A.O THE DATE ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 5 OF APPROVAL OF PROJECT BY THE PUNE MUNICIPAL CORPO RATION (PMC) WAS 8.9.2000. REGARDING THIS PROJECT I.E. KUMAR PRER ANA THE A.O OBSERVED FURTHER THAT THE BUILT UP AREA OF ONE OF THE UNITS IN THE PROJECT WAS EXCEEDING THE LIMIT OF 1500 SQ.F.T PRESCRIBED U/S. 80 IB(10)( C ) FOR THE BUILT UP AREA OF SUCH UNIT. HE NOTED THAT THE UNIT IN THE BUILDING A-8 OF KUMAR PRERANA PROJECT CONSISTED A BUNGALOW HAVIN G BUILT UP AREA OF 3250 SQ.FT. THE A.O ACCORDINGLY DISALLOWED THE CLA IMED DEDUCTION U/S. 80IB(10) ON THE PROFIT EARNED FROM THE SALE OF PREM ISES IN THE PROJECT KUMAR PRERANA. 7. IN RESPECT OF THE PROJECT KUMAR PARISAR THE A.O NOTED THAT THE PROJECT WAS CONSISTING OF COMMERCIAL ESTABLISHMENT S HAVING BUILT UP AREA OF 11 964 SQ.FT. WHICH WERE EXCEEDING THE PRESCRI BED LIMIT OF 2000 SQ.FT. AS PER PROVISION OF SEC. 80IB(10)(D). THE A.O ACC ORDINGLY DISALLOWED THE ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF THE PROJECT KUMAR PARISAR ALSO. 8. THE LD CIT(A) HAS UPHELD THE ACTION OF THE A.O. SO FAR AS THE CLAIM OF DEDUCTION MADE IN THE PROJECT KUMAR PRERANA. HE HAS HOWEVER ALLOWED THE CLAIMED DEDUCTION ON THE PROFIT EARNED IN RESPECT OF THE PROJECT KUMAR PARISAR. 9. IN ITS APPEAL THE REVENUE HAS QUESTIONED THE FIRST APPELLATE ORDER ALLOWING THE CLAIMED DEDUCTION ON THE PROFIT EARNED OUT OF THE SALE OF PREMISES IN THE PROJECT KUMAR PARISAR. THE ASSES SEE ON THE OTHER HAND HAS IMPUGNED THE FIRST APPELLATE ORDER IN DE NYING THE CLAIMED DEDUCTION OF RS. 61 41 481/- IN RESPECT OF THE PROJ ECT KUMAR PRERANA AND DENIAL OF DEDUCTION UP-TO RS. 26 60 570/- ON PR OFIT FROM SALE OF COMMERCIAL AREA IN RESPECT OF THE HOUSING PROJECT KUMAR PARISAR. ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 6 10. IN SUPPORT OF THE ISSUE RAISED KIN THE GROUNDS OF THE APPEAL PREFERRED BY THE REVENUE THE LD. D.R. HAS BASICAL LY PLACED RELIANCE ON THE ASSESSMENT ORDER. HE REITERATED THE CONTENTS O F THE GROUNDS RAISED IN THE APPEAL OF THE REVENUE. THE LD. A.R. ON THE OTHER HAND POINTED OUT THAT THE ISSUE RAISED IN THE GROUNDS OF APPEAL OF THE REVENUE IS FULLY COVERED BY THE DECISION OF SPECIAL BENCH OF THE TRI BUNAL IN THE CASE OF BRAHMA ASSOCIATES AND ORS. IN ITA NO. 1417/PN/2006 ON THE BASIS OF WHICH THE LD CIT(A) HAS GIVEN RELIEF IN QUESTION. HE POINTED OUT FURTHER THAT THE SPECIAL BENCH WHILE DECIDING THE ISSUE HAS HELD THAT WHERE 90% OR MORE OF THE BUILT UP AREA IS USED FOR DWELLING U NIT IN ACCORDANCE WITH THE CLAIM OF SEC. 80 IB (10) BENEFIT OF DEDUCTION U/S. 80 IB (10) WILL NOT BE DECLINED. HE SUBMITTED FURTHER THAT THE HONBLE BOMBAY HIGH COURT IN THE APPEAL PREFERRED BY THE REVENUE AGAINST THE ORD ER OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS. BRAHMA ASSOCIAT E & OTHERS 333 ITR 289 (BOM.) WHILE AFFIRMING THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL THAT THE CLAUSE (D) INSERTED IN SECTION 80 IB (10) W.E.F. 1.4.2005 IS PROSPECTIVE IN NATURE HENCE NOT APPLICABLE TO THE A.YS. BEFORE A.Y. 2005- 06 HAS BEEN PLEASED TO HOLD THAT THE SPECIAL BENCH WAS NOT JUSTIFIED IN RESTRICTING THE LIMIT OF THE COMMERCIAL AREA UPTO 1 0% OF THE BUILT UP AREA IN THE PROJECT FOR CLAIMING THE DEDUCTION WITH THIS OBSERVATION THAT THERE IS NO SUCH RESTRICTION IN THE PROVISIONS OF INCOME TAX ACT. THUS THE ASSESSEE IS ALSO ENTITLED FOR THE DEDUCTION U/S. 80 IB (10) OF RS. 26 60 570/- ON PROFIT FROM SALE OF COMMERCIAL AREA IN RESPECT OF PROJECT KUMAR PARISAR. 11. CONSIDERING THE ABOVE SUBMISSION REGARDING THE ELIGIBILITY OF THE CLAIMED DEDUCTION DURING THE YEAR BY THE ASSESSEE ON THE PROJECT KUMAR PARISAR WE FIND THAT THE ISSUE RAISED IN THE GROUNDS OF APPEAL PREFERRED BY THE PARTIES IS FULLY COVERED BY THE DE CISION OF HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF CIT V/S. M/S. BRAHMA ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 7 ASSOCIATES & OTHERS (SUPRA). WE FIND THAT THE A.O HAD DENIED THE CLAIMED DEDUCTION ON THE PROFIT EARNED DURING THE Y EAR FROM THE SALE OF PREMISES IN THE KUMAR PARISAR SOLELY ON THE BASIS THAT THE PROJECT WAS HAVING BUILT UP AREA OF COMMERCIAL ESTABLISHMENTS A T 11 964 SQ.FT. WHICH WERE IN EXCESS OF THE PRESCRIBED LIMIT OF 2000 SQ. FT. AS PER PROVISIONS OF SECTION 80 IB (10)(D) OF THE ACT. IN THIS REGARD THE A.O PLACED RELIANCE ON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF LAUKIK DEVELOPERS VS. CIT 108 TTJ 364 (BOM.). BEFORE TH E LD CIT(A) THE ASSESSEE CONTENDED THAT THE DEVELOPED AREA OF THE P LOT IN THE PROJECT KUMAR PARISAR IS 183 548 SQ.FT. OUT OF WHICH TH E COMMERCIAL AREA IS 11 964 SQ.FT. WHICH IS LESS THANM 10% OF THE TOTAL BUILT UP AREA. THE ASSESSEE CONTENDED THAT IN VIEW OF THE DECISION OF SPECIAL BENCH IN THE CASE OF BRAHMA ASSOCIATES & OTHERS VS. JCIT 119 IT D 255 (SB) PUNE AS WELL AS THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF FOR A.Y. 2004-05 IN ITA NO. 1580/PN/2007 TH E CLAIMED DEDUCTION U/S. 80IB(10) IS ALLOWABLE TO THE ASSESSEE. THE LD CIT(A) BEING SATISFIED WITH THE CONTENTION OF THE ASSESSEE HAS ALLOWED THE CLAIMED DEDUCTION. NOW WE FIND THAT THE HON BLE JURISDICTIONAL BOMBA Y HIGH COURT IN THE APPEAL PREFERRED BY THE REVENUE AGAINST THE SAID DE CISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BRAHMA ASSOCIA TES & OTHERS HAS APPROVED THE DECISION WITH FURTHER FINDING THAT THE RE IS NO SUCH PROVISION IN THE INCOME TAX ACT TO RESTRICT THE ALLOWABLE DE DUCTION IN CASE OF COMMERCIAL AREA UP-TO 10% OF THE BUILT UP AREA IN THE PROJECT. IN OTHER WORDS BEFORE COMING INTO OPERATION THE AMENDED PR OVISION U/S. 80 IB (10) I.E. INSERTION OF CLAUSE (D) THEREIN W.E.F. 1 .4.2005 THE ASSESSEE WILL BE ELIGIBLE FOR CLAIMING DEDUCTION DESPITE THIS FAC T THAT THE COMMERCIAL AREA EXCEEDS EVEN 10% OUT OF THE BUILT UP AREA IN T HE HOUSING PROJECT. ADMITTEDLY THE PROJECT WAS APPROVED BEFORE INSERTI ON OF CLAUSE (D) IN SECTION 80 IB (10) OF THE ACT W.E.F. 1.4.2005 HENC E IN VIEW OF THE ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 8 DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF OPEL SHELTERS PVT. LTD. AND OTHERS VS. ITO ITA NO. 219/PN/2009 & ORS. (A.Y. 2005-06) ORDER DATED 31.5.2011 AMENDED PROVISIONS WILL NOT BE APPLICABLE ON THE PROJECT APPROVED BY THE LOCAL AUTHORITY BEFORE COMI NG INTO THE OPERATION OF CLAUSE (D) OF SECTION 80IB(10)(D ) OF THE ACT WE ARE OF THE VIEW THAT THE LD CIT(A) WHILE ALLOWING THE CLAIMED DEDUCTION WAS NOT JUSTIFY IN RESTRICTING THE DEDUCTION OF COMMERCIAL AREA UPTO THE 10% OF THE TOTAL BUILT UP AREA FOLLOWING THE DECISION OF THE SPECIA L BENCH OF THE TRIBUNAL IN THE CASE OF M/S. BRAHMA ASSOCIATES. WE THUS R ESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF BRAHMA ASSOCITES & OTHERS (SUPRA) DIRECT THE A.O TO ALLOW THE CLAIMED DEDUCTION ON THE PROJECT KUMAR PARISAR WITHOUT ANY RESTRICT ION ON ACCOUNT OF COMMERCIAL AREA. EVEN OTHERWISE THIS MATERIAL FACT HAS NOT BEEN DISPUTED BY THE REVENUE BEFORE THE TRIBUNAL THAT TH E COMMERCIAL AREA IN THE PROJECT IS LESS THAN 10% OF TOTAL BUILT UP AREA AS CLAIMED BY THE ASSESSEE. IN VIEW OF THIS FINDING THE GROUNDS OF THE APPEAL PREFERRED BY THE REVENUE ARE REJECTED AND GROUND NO.2 OF THE APP EAL PREFERRED BY THE ASSESSEE IS ALLOWED. 12. THE APPEAL PREFERRED BY THE REVENUE IS ACCORDIN GLY DISMISSED. GROUND NO.1 (ASSESSEES APPEAL) 13. THE RELEVANT FACTS ARE THAT THE A.O NOTED THAT PROJECT KUMAR PRERANA WAS APPROVED BY THE LOCAL AUTHORITY BEFORE 1.4.2004. THE A.O NOTED FURTHER THAT AS PER SURVEY U/S. 133A REPORT THE PROJECT WAS NOT COMPLETE TILL 31 ST MARCH 2008 SINCE THE LOCAL AUTHORITY HAD NOT GIVE N NECESSARY COMPLETION CERTIFICATE IN RESPECT OF THE ENTIRE PROJECT. HE OBSERVED THAT DURING THE COURSE OF SURVEY IT WAS F OUND THAT ONE OF THE ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 9 BUILDINGS VIZ. A-6 FORMING PART OF THE APPROVED P ROJECTS HAD NOT BEEN COMPLETED EVEN ON THE DATE OF SURVEY ON 28.5.2008 . THE A.O. OPINED THAT AS PER PROVISIONS OF SEC. 80 IB (10)(A)(I) THE PROJECT APPROVED BEFORE 1.4.2005 IS REQUIRED TO BE COMPLETED BEFORE 31 ST MARCH 2008 AND AS PER EXPLANATION-2 BELOW SECTION 80IB(10)(A) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT IS TO BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSI NG PROJECT IS ISSUED BY THE LOCAL AUTHORITY. AS THE ASSESSEE FAILED TO FU LFILL THE REQUIRED CONDITION THE A.O DISALLOWED ASSESSEES CLAIM OF D EDUCTION U/S. 80 IB(10) IN RESPECT OF THE PROJECT KUMAR PRERANA. HE ALS O DISALLOWED THE CLAIMED DEDUCTION ON THE PROJECT ON THE BASIS THA T THE BUILT UP AREA TO ONE OF THE UNITS IN BUILDING NO. A-8 HAVING 3250 SQ .FT. WAS EXCEEDING THE LIMIT OF 1500 SQ.FT. PRESCRIBED U/S. 80IB(10)(C ) F OR THE BUILT UP AREA OF SUCH UNITS. THE LD CIT(A) HAS APPROVED THE ACTION OF THE A.O. 14. BEFORE THE TRIBUNAL THE LD. A.R. SUBMITTED TH AT THE BUILDING A-6 AND BUILDING A-8 CAN BE SEPARATED FROM THE REST OF THE RESIDENTIAL PROJECT KUMAR PRERANA FOR THE PURPOSE OF ALLOWING DEDUCTI ON U/S. 80IB(10) AND ON THE REMAINING ELIGIBLE UNITS OF THE PROJECT THE CLAIMED DEDUCTION MAY BE ALLOWED ON STAND ALONE BASIS IN VIEW OF THE DEC ISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BRAHMA ASSOCIATES (S UPRA). HE ALSO ARGUED THAT BUILDING A-6 IS A SEPARATE PROJECT ALTOGETHER. THE LD. A.R. PLACED RELIANCE ON THE FOLLOWING DECISIONS : 1. CIT VS. APOORVA PROPERTIES & ESTATE PVT. LTD. I TA NO. 1550/PN/2008 A.R. 2005-06 ORDER DATED 21 ST AUGUST 2009. 2. KASTURI HOUSING & CONSTRUCTION PVT. LTD. VS. ACI T ITA NO. 1370/PN/2007 A.Y. 2004-05 ORDER DATED 26 TH MARCH 2010. ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 10 3. M/S. TUSHAR DEVELOPERS VS. ITO AND VICE VERSA I TA NO. 165/PN/2007 AND OTHER (A.YS 2003-04 & 2004-05) ORD ER DATED 31 ST MAY 2011. 4. VANDANA PROPERTIES VS. ACIT ITA NO. 1253/MUM/20 07 (A.Y. 2005-06) ORDER DATED 29 TH APRIL 2009. 5. BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VS. ACIT ITA NO. 1595/CAL/2005 (AFFIRMED BY HONBLE CALCATTA HIGH CO URT) (ASSTT. YEAR 2002-03) ORDER DT. 24 TH MAY 2006 6. SANGHI & DOSHI ENTERPRISE ITA NOS.259 & 60/MAD /2010(TM ) (CHEN.) 7. GEE VEE CORPORATION VS. ITO 38 SOT 174 (BOM.) 8. CIT VS. M/S. BRAHMA ASSOCIATES 333 ITR 289 (BO M.) 15. THE LD. D.R. TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW. HE POINTED OUT THAT DURING THE COURSE OF THE SURVEY S HRI RAJESH JAIN PARTNER OF THE ASSESSEE FIRM HAD AGREED THAT THE PR OJECT KUMAR PRERANA WAS NOT COMPLETE AS ON 31 ST MARCH 2008 AND HAD AGREED TO VOLUNTARILY WITHDRAW THE CLAIM OF DEDUCTION U/S. 80 IB (10) IN RESPECT OF THIS PROJECT FOR A.Y. 2003-04 2004-05 2005-06 AND 2006-07. 16. CONSIDERING THE ABOVE SUBMISSIONS WE DO NOT AG REE WITH THE LD. D.R. THAT THE DISALLOWANCE/ADDITION IN QUESTION IS AN AGREED ADDITION SINCE BEFORE THE AUTHORITIES BELOW THE ASSESSEE HAS ALSO ARGUED ITS CASE ON MERITS AND THE AUTHORITIES BELOW HAVE ALSO DECIDED THE ISSUE ON ITS MERITS. WE HOWEVER FIND THAT THE ISSUE OF PRORAT A OR STAND ALONE BASIS FOR CONSIDERING THE CLAIMED DEDUCTION U/S. 80 IB (1 0) HAS BEEN ADDRESSED BY THE HONBLE MUMBAI HIGH COURT IN THE C ASE OF CIT VS. M/S. BRAHMA ASSOCIATES & OTHERS (SUPRA). SINCE THE BENE FIT OF THIS DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT WAS NOT AVAIL ABLE BEFORE THE ITA . NOS.49 & 369//PN/2010 M/S. VIRAJ PROERTIES A.Y. 2006-07 PAGE OF 11 11 AUTHORITIES BELOW AND THE ASSESSEE BEFORE THEM WE IN THE INTEREST OF JUSTICE SET ASIDE THE MATTER TO THE FILE OF LATE CIT(A) TO DECIDE THE ISSUE AFRESH IN VIEW OF THE DECISION OF HONBLE BOMBAY HI GH COURT IN THE CASE OF CIT VS. M/S. BRAHMA ASSOCIATES & OTHERS (SUPRA) AFT ER AFFORDING OPPORTUNITY OF BEING HEARD TO THE PARTIES. GROUND N O. 1 IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 17. IN RESULT APPEAL PREFERRED BY THE ASSESSEE IS PARTLY ALLOWED. 18. IN SUMMARY ITA NO. 49/PN/2010 (REVENUE) IS DIS MISSED AND ITA NO. 369/PN/2010 (ASSESSEE) IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON M ARCH 2012. SD/- SD/- ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 30TH MARCH 2012 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30.3.2012. SD/- SD/- (R.K. PAN DA) (I.C. S UDHIR) AM JM US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT III PUNE 4. THE CIT(A)- III PUNE 5. THE D.R. A BENCH PUNE 6. GUARD FILE BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE