RAMSUKH PROPERTIES ,PUNE vs. DCIT CIR-7 , PUNE

आयकर अपीलीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE

BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.3025/PUN/2025 धििाारण वर्ा / Assessment Year : 2013-14 Ramsukh Properties, DCIT, Circle-7, Pune D Building 1st Floor, S Nagar, Near IDBI Bank, Vishrantwadi, Vs. Pune-411015 PAN : AAHFR6007R अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Nikhil S Pathak (Through Virtual) Department by : Shri Harshit Bari Date of hearing : 25-02-2026 Date of 06-05-2026 Pronouncement : आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 13.10.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2013-14.

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deduction u/s 80IB(10) only in respect of 1 flat, the construction of which was completed prior to 31.03.2008 but sold during the relevant AY 2013- 14, the remaining 32 flats were offered for taxation without claiming any deduction u/s 80IB(10). Before the Ld. AO, the assessee submitted that the Tribunal has allowed its claim of deduction in respect of the said project u/s 80IB(10) for AY 2007-08 in respect of 173 flats for which completion certificate was obtained before the stipulated date. The Ld. AO, however in disregard to the submission made by the assessee, disallowed the assessee’s claim of deduction u/s 80IB(10) of the Act for AY 2013-14 on the ground that the assessee did not complete the entire project comprising of 205 flats before the stipulated date i.e. 31.03.2009 and hence the condition laid down u/s 80IB(10) has not been complied by the assessee and held that the deduction u/s 80IB(10) cannot be allowed on a pro-rata/proportionate basis. Further the Ld. AO did not follow the decision of the Tribunal for AY 2007-08 for the reason that the Department has not accepted the same and a further appeal has been filed by the Revenue before the Hon’ble High Court against the said order of the Tribunal. Relying on the assessment order(s) for earlier AYs 2007-08 to 2010-11 as there was no change in the facts and circumstances of the case, the Ld. AO disallowed the deduction of Rs.28,58,817/- claimed by the assessee u/s 80IB(10) for AY 2013-14 and added the said amount to total income of the assessee. The Ld. AO also made an addition of Rs.1,16,600/- on account of undisclosed interest income (being difference between income tax refund received by the assessee of Rs.40,16,279/- for AYs 2007-08 to 2009-10 and Rs.38,99,679/- shown by the assessee in its books). The Ld. AO therefore completed the assessment u/s 143(3) of the Act at an assessed income of Rs.1,08,96,969/- vide his order dated 08.03.2016 thereby making an addition/disallowance of- (i) Rs.28,58,817/- u/s 80IB(10) of the Act and (ii) Rs.1,16,600/- as undisclosed interest on Income Tax refund.

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“6.3 During the course of appellate proceedings, the appellant has reiterated the same submissions and contentions as those given during the course of assessment proceedings. The appellant's main contention is that the deduction u/s 801B of the Act is even allowable on proportionate basis in respect of the profits earned on the residential units of the housing project construction of which is completed before the Tipulated date and since the appellant has complied with all the conditions for claim of the deduction, it is entitled for said claim whereas the AO has wrongly denied the said claim. The contention of the appellant has to be seen in the light of extant provisions of Section 801B of the Income Tax Act 1961. For reference, the provisions of Section 80IB of the Act are reproduced below:- "(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004 but not later than the 31st day of March, 2005, within four years from the end of the financial year in which the housing project is approved by the local authority, (iii) in a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority. Explanation. For the purposes of this clause, - (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority: (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority: (b) the project is on the size of a plot of land which has a minimum area of one acre. 6.4 The plain reading of the above provisions makes it clear that the deduction under this Section is allowable to the undertakings & building housing projects' as a whole and no provision has been made in the Section regarding allowance of deduction on proportionate or pro rata basis to the extent of completion of the parts of the projects within the stipulated date. In other words, it can be said that no deduction would be allowable to the extent of number of completed units of a 'housing projects. Thus, keeping in view these provisions, the AO had rightly disallowed the appellant's claim of deduction since it did not comply with all the stipulated conditions under the provisions of the Act. In this regard, it would be relevant to discuss the decision of the Hon'ble jurisdictional ITAT Mumbai in the case of M/s. Laukik Developers vs. OCIT, Circle-1, Thane in ITA No.532/M/06, which has been relied upon by the AO. In this decision, considering the identical issue of

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deduction us 801B, it has been held that no proportionate deduction can be allowed to the assessee to the extent of residential units constructed by it in the building project for the simple reason that the building project should be eligible first in order to claim exemption under the provision of Section 801B(10) of the Act by fulfilling the conditions precedent for its application and the non-fulfillment of a single, per conditions as detailed in the provisions of Section 801B(10) of the Act shall disentitle he assessee from claiming exemption of any part of its income which may accrue from its building project during the year. 6.5 This view of the Revenue is further strengthened by the Hon'ble Bombay High Court in the case of M/s. Brahma Associates in ITA No.1194 of 2010, wherein it has been held that "though the commercial use is more than 10% of the plot area, the Tribunal has allowed Section 80IB(10) deduction in respect of 15 residential buildings on the ground that the profits from these exclusively residential buildings could be determined on standalone basis. In our opinion that would not be proper, because, Section 80IB(10) allows deduction to the entire project approved by the local authority and not to a part of the project. If the conditions set out in Section 80IB(10) are satisfied, then deduction is allowable on the entire project approved by the local authority and there is no question of allowing deduction to a part of the project." The case laws relied upon by the appellant being distinguishable on facts and circumstances of the present case are considered to be of no help to the appellant. 6.6 In view of the above discussions, as per the said provisions and the judicial precedents, there is no scope for partial allowance of deduction to the project to the extent which is completed within the stipulated date. Therefore, I don't find any infirmity in the order of the AO on the issue and the same is upheld. Hence, the grounds of appeal No.1 to 7 are dismissed.”

“7. Grounds of Appeal No. 8: In this ground, the appellant has taken up the issue of addition by the AO on account of undisclosed interest as income tax refund of Rs.1,16,600/- on the basis of I.T.S. data whereas no such interest has been received by the assessee. Assessee had offered interest on income tax refund on receipt basis. In this regard, the appellant has submitted that the firm had received income tax refund cheque of Rs.3,84,27,140/- on 5.10.2012, proof of bank statement was also given to the learned A.O. Assessee had paid income tax of Rs.3,45,29,300/- as such and had offered differential amount as interest on income tax refund of Rs.3,89,99,679/- and had given all proofs of bank interest in support of refund received & taxes paid. However, learned officer had relied on I.T.S. data of interest. In refund of Rs.40,16,279/-, the Ld. AO had added differential amount of Rs. 1,16,600/- as undisclosed interest on income tax refund, whereas the assessee had offered interest on receipt basis. 7.1 In the above, it is seen that the appellant has disputed the addition on the ground of actual receipt of the interest income on income tax refund viz-a- viz. made by the AO on the basis of ITS. On this instant grievance, the AO is directed to verify the claim of the appellant with regard to the actual receipt

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of the interest on income tax refund and if found in order after necessary verification, the excess amount of addition on this account be deleted. Accordingly, the ground of appeal No.8 is allowed for statistical purposes.”

“On facts and in law, 1] The learned CIT(A) erred in confirming disallowance of deduction of Rs.28,58,817/- u/s 80IB(10) in respect of profit on sale of flats in the housing project Madhuban consisting of 173 flats at Vishrantwadi, Pune. for which 80IB (10) has allowed the deduction by ITAT. 2] The learned CIT(A) grossly erred in not following binding decision of Hon'ble ITAT, Pune in the assessee's case wherein it upheld the appellant's claim that 173 flats in Madhuban Scheme constituted a project for the purposes of section 80IB(10) and had allowed deduction in respect of the profits from the same. 3] The learned CIT(A) failed to appreciate that deduction u/s 80IB(10) has already been allowed in the past years on profit from sale of 172 flats in that project and only the last remaining flat was sold during this year and accordingly, the deduction u/s 80IB(10) had to be allowed in this year. 4] The learned CIT(A) erred in not following Bombay H.C. decision in the case of Devashri Nirman LLP [429 ITR 597] wherein Hon'ble H.C. had held that a few flats (and not entire flats) in that scheme constituted a project for the purposes of section 80IB(10) and had allowed the relief. 5] The learned CIT(A) erred in relying on the decision of ITAT in Loukik Developers and Bombay H.C. in Brahma Associates when those decisions are not applicable in the present case. 6] The learned CIT(A) erred in not following decision Hon'ble Bombay High Court in the case of Bank of Baroda [256 ITR 385] in which it was held that the decision of Tribunal in binding on the lower authorities. 7] The learned CIT(A) erred in not following the binding decisions by simply stating that they are distinguishable. 8] The appellant prays for allowing the deduction of Rs.28,58,817/- u/s 80IB(10). 9] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”

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record on page 1-27 of the paper book, the Ld. AR submitted that the Tribunal in all these years have upheld the assessee claim that 173 flats in the Madhuban Scheme flats constituted a project for the purposes of section of 80IB(10) and have allowed deduction in respect of the profits from the same. He submitted the Ld. CIT(A)/AO should have followed the binding decision of the Pune Tribunal in assessee’s own case and accordingly allowed the assessee’s claim of deduction u/s 80IB(10) for the relevant AY 2013-14 under consideration.

6.1 The Ld. AR placed reliance on the decision of the Hon’ble Bombay High Court in the case of PCIT Vs. Kumar Builders consortium and submitted that the assessee’s claim for deduction u/s 80IB(10) of the Act in respect of 173 flats should be allowed based on completion certificate and on the principle of pro-rata. The Ld. AR therefore urged that the entire addition of Rs.28,58,817/- should be deleted and assessee claim of deduction u/s 80IB(10) of the Act should be allowed.

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prevented by sufficient reasonable cause which compelled the impossibility on part of the assessee to have completion certificate in time. It is settled legal position that the law always give remedy and the law does wrong to no one. We agree to proposition put forward by Ld. Departmental Representative that plain reading of section 80IB(10) of the Act suggests about only completion of construction and no adjective should be used alongwith the word completion. This strict interpretation should be given in normal circumstances. However, in case before us, assessee was prevented by reasonable cause to complete construction in time due to intervention of CID action on account of violation of provisions of Urban Land Ceiling Act applicable to land in question. Assessee was incapacitated to complete the 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 provisions of statute. The taxing statute granting incentives for promotion of growth and development should be construed liberally and that provision for promoting economic growth has to be interpreted liberally. At the same time, restriction thereon too has to be construed strictly so as to advance the object of provision and not to frustrate the same. The provisions of taxing statute should be construed harmoniously with the object of statue to effectuate the legislative intention. In view of above facts and circumstances, we hold that assessee is entitled for benefit u/s.80IB(10) of the Act in respect of 173 flats completed before prescribed limit. The Assessing Officer is directed accordingly.”

“Admittedly in the present case, the assessee has been granted the benefit of deduction u/s 80-IB(10) of the Act in respect of 173 flats during the assessment year 2007-08 vide order of the Tribunal dated 25-7-2012 as discussed above. For the year under consideration, sale of three flat is the subject matter of allowability of deduction u/s 80-IB(10) of the Act. Therefore, on the basis of the Tribunal's decision for the earlier assessment year 2007-08, the claim of the assessee for the year under is allowed. We direct accordingly.”

“5. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. It is an undisputed fact that the Tribunal in assessee's own case has decided the issue in favour of the assessee for A.Yrs. 2007-08, 2008-09 and 2009-10 under identical circumstances. Merely because the Revenue has not accepted the decision of the Tribunal and has filed appeals before the Hon'ble High Court, the same in our opinion cannot be a ground to take a contrary decision than the decision of the Tribunal in assessee's own case especially when both of us are parties to the said orders. Since the Ld.CIT(A) has allowed the claim of the assessee by

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following the order of the Tribunal in assessee's own case in the immediately three preceding assessment years, therefore, in absence of any contrary material brought to our notice against the decision of the Tribunal, we find no infirmity in the order of the CIT(A). We accordingly uphold the same. The grounds raised by the Revenue are accordingly dismissed.”

“8. The argument advanced by the learned Counsel for the appellant was that section 80-IB(10), does not at all envisage a pro rata deduction, in respect of eligible flats. In other words, it is suggested that even if a single flat in a housing project is found to exceed the permissible maximum built-up area of 1500 sq.ft., the assessee would lose its right to claim the benefit of deduction in respect of the entire housing project under section 80-IB(10). In our opinion, a plain reading of the said section does not support that interpretation at all. Learned Counsel for the appellant would have been perfectly justified, had the legislature in its wisdom, in clause (c) used the words "each residential unit has a maximum built-up area....". This would then clearly indicate that the intention was to ensure that each and every residential unit in such a housing project confirms inter alia to the size prescribed with a view to make an assessee eligible for claiming the deduction. However, the words used in clause (c) are as under: "(c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place" It is a well settled principle of interpretation of statutes that when the language of a statute is unambiguous and admits of only one meaning, no question of construction of a statute then arises. Reliance in this regard can be placed on the Apex Court judgment in Nelson Motis v. Union of India AIR 1992 SC 1981. It, therefore, becomes clear that clause (c) only qualifies an eligible residential unit and no more and further that if there is such a residential unit, which confirms to the requirement as to size in a housing project, all other conditions being fulfilled, the benefit of deduction cannot be denied in regard to a such residential unit. section 80-IB(10), nowhere even remotely aims to deny the benefit of deduction in regard to a residential unit, which otherwise confirms the requirement of size at the cost of an ineligible residential unit with a built-up area of more than 1500 sq.ft. 9. For the reasons above, we are of the opinion that the order of the ITAT directing the A.O. to workout the pro rata deduction under section 80-IB(10) of the Act, 1961, in regard to the eligible residential units, merits no interference. The appeal is held to be without merit and is accordingly dismissed.”

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by the Revenue, we set aside the orders of the Ld. CIT(A)/NFAC and allow the assessee’s claim of deduction of Rs.28,58,817/- u/s 80IB(10) of the Act. The Ld. AO is directed to modify the assessment order accordingly. The effective grounds of appeal raised by the assessee are thus allowed.

Order pronounced in the open court on 06th May, 2026.

Sd/- Sd/- (R.K. Panda) (Astha Chandra) JUDICIAL MEMBER VICE PRESIDENT पुणे / Pune; दिन ांक / Dated : 06th May, 2026. रदि Ravi Kumar Digitally signed by Ravi Kumar Date: 2026.05.07 14:53:08 +05'30' आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, 4. पुणे / DR, ITAT, “B” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER,

सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune