DEPUTY COMMISSIONER OF INCOME TAX, PUNE vs. JINDAL MITTAL GRIHA NIRMAN PVT.LTD, PUNE

आदेश / ORDER PER ANIL CHATURVEDI, AM :

These two appeals filed by the Revenue are emanating out of 1. separate orders of Commissioner of Income Tax (Appeals) – 7, Pune dated 15.12.2016 for A.Ys. 2011-12 and 2012-13, respectively.

ITA Nos.1439 & 1440/PUN/2017

heard together. In view of the aforesaid submissions of both the parties,

we, for the sake of convenience, proceed to dispose of both the appeals by

a consolidated order but however, proceed with narrating the facts in ITA

No.1439/PUN/2017 for assessment year 2011-12.

under :-

Assessee is a company stated to be engaged as Builders and

Developers. Assessee electronically filed its return of income for A.Y.

2011-12 on 13.09.2012 declaring total income of Rs.39,89,550/- after

claiming deduction of Rs.3,62,38,796/- u/s 80IB(10) of the Act. It was

noted that assessee had claimed deduction u/s 80IB(10) of the Act in A.Y.

2010-11 which was disallowed by the AO. Since the assessee had

claimed deduction u/s 80IB(10) of the Act for the same project in A.Y.

2011-12, AO after recording the reasons, issued notice u/s 148 of the

Act on 01.07.2013 which was served on the assessee. Thereafter, the

case was taken up for scrutiny. Subsequently, assessment was framed

u/s 143(3) r.w.s. 147 of the Act vide order dated 03.03.2015 and the total

income was determined at Rs.4,02,28,750/- by denying the claim of

deduction u/s 80IB(10) of the Act. Aggrieved by the order of AO, assessee

carried the matter before Ld.CIT(A), who vide order dt.15.12.2016 (in

appeal No.PN/CIT(A)-7/Cir-14/86/2015-16) allowed the appeal of

assessee. Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us, and has raised the following grounds :

“1. Whether on the facts and circumstances of the Ld. CIT(A)-7 was not justified in allowing proportionate deduction u/s 80IB(10) when no such

ITA Nos.1439 & 1440/PUN/2017

provision for proportionate and percentage deduction exists in the Act with respect to this section under consideration as mentioned above. 2. For the facts and such other reasons as may be urged at the time of hearing, the order of Commissioner of Income Tax (Appeals) – 7 Pune may be vacated and that of the Assessing Officer be restored.”

A.Y. 2012-13.

Orbit” at Sun City Road, Anand Nagar, Pune. AO noted that while

completing the assessment for A.Y. 2010-11, it was noticed that in

respect of “B” Building, the area of 10 flats exceeded 1500 sq. ft. AO was

of the view that as per the provisions of Clause (d) of Sec.80IB(10) of the

Act, the built up area of a flat in the housing project should not exceed

1500 sq.ft. In case of assessee since the conditions specified in clause (d)

of Sec.80IB(10) of the Act were not fulfilled, AO was of the view that the

profits of the entire project are not eligible for deduction and he

accordingly denied the claim of deduction u/s 80IB(10) of the Act

amounting to Rs.3,62,38,796/- for the entire project. Aggrieved by the

order of AO, assessee carried the matter before Ld.CIT(A), who following

the decision of his Predecessor for A.Y. 2010-11 noted that assessee had

fulfilled the other conditions stipulated u/s 80IB(10) of the Act regarding

the area of the plot, having commercial area within the limits etc. and

therefore assessee was entitled for deduction u/s 80IB(10) of the Act on

pro-rata basis with respect to the blocks and units satisfying the

conditions stipulated u/s 80IB(10) of the Act. He accordingly granted

proportionate deduction to the units/flats which were having area less

than 1500 sq. ft. and denied the claim with respect to units/flats whose

area exceeded the specified limits.

ITA Nos.1439 & 1440/PUN/2017

Aggrieved by the order of Ld.CIT(A), Revenue is now before us.

hand, reiterated the submissions made before AO and Ld.CIT(A) and

further submitted that while deciding the issue in case of assessee for

A.Y. 2010-11, the Co-ordinate Bench of the Tribunal has allowed the

claim of the assessee and upheld the order of Ld.CIT(A) with respect to

the granting of proportionate deduction. He placed on record the copy of

the aforesaid order. He submitted that since the project in the year under

consideration is the same Project as in A.Y. 2010-11 and without there

being any change in facts, the order of Ld.CIT(A) needs to be upheld.

record. The issue in the present case is with respect to the claim of

deduction u/s 80IB(10) of the Act. We find that in A.Y. 2010-11, the

claim of deduction u/s 80IB(10) of the Act was denied for the entire

project by the AO. Thereafter, the matter was carried before the first

appellate authority and Ld.CIT(A) allowed the claim of deduction with

respect to the units which were having area less than 1500 sq.ft. Against

the order of Ld.CIT(A), Revenue and assessee had carried the matter

before the Tribunal. The Co-ordinate Bench of the Tribunal (in ITA

Nos.981 & 1015/PUN/2015 order dated 27.10.2017) upheld the order of

Ld.CIT(A) by observing as under :

“8. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to denial of deduction u/s 80IB(10) of the Act. We find that the claim of assessee of deduction u/s 80IB(10) for the entire project was disallowed by AO for the reason that out of the total 149 flats built by assessee, 10 flats were having area of more than 1500 sq ft. We find that while deciding the issue, Ld CIT(A) has given a finding that the project was on a plot area of 13400 sq mtrs (i.e.3.31

ITA Nos.1439 & 1440/PUN/2017

acres) which was more than 1 acre, approval from the competent authority for commencement of present project was granted on 30.03.2007 and the completion of the project was received on 28.02.2012 i.e. within the due date of 31.03.2012. He has further given a finding that the other required conditions were also fulfilled by the assessee. As far as the issue of area of 10 flats is concerned, AO had noted that the Valuer appointed by the Revenue authorities had certified that 10 flats were having an area exceeding 1500 sq. ft. On the other hand, the 2 Valuers / Architects appointed by the assessee had certified that the area in respect of the 10 flats were less than 1500 sq.ft. The reason for the difference in the area as calculated by the Valuers was on account of the measurement of the thickness of the wall. The Valuer appointed by the Revenue had considered the thickness of the external walls at 18” at six places which was in actual a double wall taken as an architectural projection for aesthetic purpose whereas the Architects had considered the thickness of the wall at 6” which was as per the sanctioned plan. We find that CIT(A) in his order has also noted that the Valuer approved by Revenue had not given the breakup of the calculation for arriving at the area exceeding 1500 sq.ft. for 10 flats. He has also noted that that Shri Ruparel has observed that as a general trend prevalent in the industry, the architectural projections in the form of features, chajjas, hollow boxes, solid boxes for enhancing the aesthetics of the building which is also allowed by the local authorities are not counted by any Corporation in the built-up area calculations and the projections was not utilizable from inside and neither it was added to the carpet area nor it was in habitable nature. The findings namely that the projections are external projections, it is for the purpose of aesthetic beauty of the building, are not habitable and not utilizable from inside and all allowed by the Corporation and not considered by them for the purpose of calculating the area of the flat, has not been controverted by the Revenue. In such a situation, we are of the view that the deduction u/s 80IB(10) of the Act cannot be denied to the assessee. We therefore direct the AO to allow the deduction on the entire project. Thus the grounds of the assessee are allowed.

in the facts of the present case and to that of assessee’s own case in A.Y.

2010-11 nor has placed any material on record to demonstrate that the

decision of Pune Tribunal in assessee’s own case in A.Y. 2010-11 which

has been relied upon by Ld.CIT(A) has been set aside / overturned or

ITA Nos.1439 & 1440/PUN/2017

stayed by Higher Judicial Forum. In view of the aforesaid facts, we find no

reason to interfere with the order of Ld.CIT(A) and thus the grounds of

Revenue are dismissed.

for A.Y. 2011-12 is dismissed.

A.Y 2012-13.

for A.Y. 2012-13 are concerned, in view of the submission of both the

parties that the facts of the case in the year being identical to the facts

and issue of the case in ITA No.1439/PUN/2017 for A.Y. 2011-12, we

therefore for the reasons stated herein while disposing of the appeal in

ITA No.1439/PUN/2017 for A.Y. 2011-12, and for similar reasons,

dismiss the grounds of Revenue. Thus, the appeal of Revenue in ITA

No.1440/PUN/2017 for A.Y. 2012-13 are dismissed.

Order pronounced on 11th day of June, 2019.

Sd/- Sd/- (SUSHMA CHOWLA) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 11th June, 2019. Yamini

ITA Nos.1439 & 1440/PUN/2017

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-7, Pune. 4. Pr. CIT-6, Pune. 5 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” / DR, ITAT, “B” Pune; 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER // True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.