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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI PARTHA SARATHI CHAUDHURY, JM
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM :
These two appeals preferred by the Revenue emanates from the separate orders of the Commissioner of Income Tax (Appeals)-2, Aurangabad dated 09.06.2016 for assessment years 2007-08 and 2008-09, as per grounds of appeal on record.
2 ITA Nos.1848 & 1849/PUN/2016 A.Ys.2007-08 & 2008-09
These cases were heard together and since issues common, facts
similar, they are disposed of vide this consolidated order. Though the
Revenue has taken multiple grounds of appeal, the crux of the grievance in
both the assessment years is deletion of the additions made by the Assessing
Officer disallowing deduction u/s.80IB(10) of the Income Tax Act, 1961
(hereinafter referred to as ‘the Act’).
Assessments were completed u/s.143(3) r.w.s. 147 of the Act. The Ld.
CIT(Appeals) has provided relief to the assessee by deleting additions with
regard to deduction u/s.80IB(10) of the Act.
The Ld. AR for the assessee appraised the bench at the time of hearing
that in Para 22 of the CIT(Appeals)’s order for assessment year 2007-08, the
entire crux of the matter is well defined and discussed and thereby, relief
provided to the assessee by the First Appellate Authority. The relevant portion
of the Ld. CIT(Appeals)’s order is as under:
“22. The Assessing Officer has stated in explicit terms that he is relying on the provisions of clause-(a) of section 80IB(14), and relying on the report of the Department of Valuation Officer dated 27.10.2014 wherein the areas of balconies, boxes, projections and terrace adjoining to the staircase at ground floor and first floor were also included while arriving at the maximum built up area contemplated in clause-(c) of section 80IB(10). The Departmental Valuation Officer vide his letter dated 19.02.2015 addressed to the Assessing Officer has specified that in the valuation report issued by his office on 27.10.2014 the built up area was calculated including covered areas of balconies, boxes, projections and terrace. In the report dated 19.02.2015, the Departmental Valuation Officer has excluded the areas of balconies, projections, boxes and terrace while calculating the built up area of the row-houses. It is noteworthy that the Assessing Officer has not taken into consideration the second report dated 19.02.2015 submitted by the Department Valuation Officer. In fact, the Assessing Officer has not even taken into cognizance the direction given by the learned CIT, Aurangabad in Para 3.4 of the order passed u/s.263 wherein he has categorically stated that the definition of “built up area” has been inserted in section 80IB(14) with effect from 01.04.2005 and because the project in question has got approval on 06.12.2004 i.e. before the amendment, the area of balcony and projections will not be included in calculating the total built up area. The Assessing Officer has not followed this direction given by the learned CIT, Aurangabad. It has been decided by the Hon'ble Karnataka High
3 ITA Nos.1848 & 1849/PUN/2016 A.Ys.2007-08 & 2008-09
Court that the amendment with respect to built up area is a substantive amendment and not a clarificatory one. Accordingly, same has no retrospective effect. Hence, in view of the discussion above, I hold that in the instant case, for the purposes of computing the “maximum built up area” appearing in clause (c) of section 80IB(10), the area covered by balcony, terrace, boxes and projections as appearing in clause –(a) of section 80IB(14) has to be excluded. It is evident that after the exclusion of the areas covered by balcony, terrace, box and projections the “built up area” of all the row-houses constructed by the assessee does not exceed 1500 ft in area. Hence, it is to be concluded that the assessee has fulfilled the conditions laid down for claiming deduction u/s.80IB(10) of the Act. Therefore, the assessing officer is directed to allow the deduction claimed u/s.80IB (10) of the Act to the assessee. Ground No.2 is allowed.”
We have perused the case records, heard the rival contentions and
analyzed the facts and circumstances in the case. The issue in question is
whether the amendment regarding definition of ‘built up area’ which has been
inserted in section 80IB (14) with effect from 01.04.2005 and because the
project in question has got approval on 06.12.2004 i.e. before the amendment
whether the rigours of such amendment will have effect on the project which
got approval even prior to the said amendment. We find that the Ld.
CIT(Appeals) has followed the view of Hon'ble Karnataka High Court that the
amendment with respect to built up area is a substantive amendment and
not a clarificatory one. Therefore, it does not have any retrospective effect.
Meaning thereby, whatever was not included in the definition of ‘built up
area’ prior to 01.04.2005 cannot be inserted since the project viz. got
approval on 06.12.2004 i.e. before the amendment came into effect. This is
the ground in which Ld. CIT(A) has given relief to the assessee.
Factually also, we find that as on record, the Assessing Officer has
stated in explicit terms that he is relying on the provisions of clause –(a) of
section 80IB(14) and relying on the report of the Department of Valuation
Officer dated 27.10.2014 wherein the areas of balconies, boxes, projections
and terrace adjoining to the staircase at ground floor and first floor were also
included while arriving at the maximum built up area contemplated in clause
4 ITA Nos.1848 & 1849/PUN/2016 A.Ys.2007-08 & 2008-09
–(c) of section 80IB(10). The Department Valuation Officer vide his letter
dated 19.02.2015 addressed to the Assessing Officer has specified that in the
valuation report issued by his office on 27.10.2014, the built up area was
calculated including covered areas of balconies, boxes, projections and
terrace. In the report dated 19.02.2015, the Departmental Valuation Officer
has excluded the areas of balconies, projections, boxes and terrace while
calculating the built up area of the row-houses. The Assessing Officer has not
taken into consideration second report dated 19.02.2015 submitted by the
Departmental Valuation Officer. In fact, the Assessing Officer has not even
taken into cognizance the direction given by the Ld. CIT(A), Aurangabad in
para 3.4 of the order passed u/s.263 of the Act wherein he has categorically
stated that the definition of ‘built up area’ has been inserted in section
80IB(14) w.e.f. 01.04.2005 and because the project in question has got
approval on 06.12.2004 i.e. before the amendment, the area of balcony and
projections will not be included in calculating the total built up area. It is on
this background, the CIT(A) has held that for the purposes of computing the
‘maximum built up area’ appearing in clause-(c) of section 80IB(10), the area
covered by balcony, terrace, box and projections as appearing in clause –(a) of
section 80IB(14) has to be excluded. After the exclusion of the areas covered
by balcony, terrace, box and projections the ‘built up area’ of all the row-
houses constructed by the assessee does not exceed 1500sq.ft. in area.
Hence, the assessee has fulfilled the conditions laid down for claiming
deduction u/s.80IB(10) of the Act and the same was allowed by the Ld.
CIT(Appeals). That even as per the legal parameters opined by the Hon'ble
Karnataka High Court as on record, it is very much clear that the projections
whatever was taken prior to the amendment in definition of built up area
which got inserted in sub section (a) of section 80IB, which came into effect
from 01.04.2005, the rigors of the amendment cannot be applied
5 ITA Nos.1848 & 1849/PUN/2016 A.Ys.2007-08 & 2008-09
retrospectively to put the assessee in jeopardy. Accordingly, we do not find any infirmity in the order of CIT(Appeals) and therefore, relief granted by CIT(Appeals) to the assessee is sustained. Accordingly, grounds of appeal raised by Revenue for the assessment year 2007-08 are dismissed.
In the result, appeal of the Revenue in ITA No.1848/PUN/2016 is dismissed.
Since the facts are similar and issues are common in ITA No.1849/PUN/2016, the decision taken by us in ITA No.1848/PUN/2016 shall also be applied for ITA No.1849/PUN/2016.
In combined result, both the appeals of the Revenue are dismissed. 8. Order pronounced on 1st day of January, 2019.
Sd/- Sd/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 1st January, 2019. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-2, Aurangabad. 4. The Pr. CIT-2, Aurangabad. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy // आदेशानुसार / BY ORDER,
�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.
6 ITA Nos.1848 & 1849/PUN/2016 A.Ys.2007-08 & 2008-09
Date 1 Draft dictated on 31.12.2018 Sr.PS/PS 2 Draft placed before author 01.01.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order