ITO WD 1(3), KALYAN vs. RAI RESIDENCY P.LTD, KALYAN

Per Sanjay Garg, Judicial Member:

1. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in allowing the deduction u/s 80IB(1) of the I.T. Act, 1961 claimed by the assessee.

2. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in following its own decision in assessee's case for AY 2009-10 on similar issue for which department is in appeal before Hon'ble High Court.

3. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in relying on the decision of the ITAT in the case of M/s Vidhi Builders and M/s Umiya Enterprises which is yet to attain its finality in Mumbai High Court.

4. On the facts and circumstances of the case and in law, the Ld. CIT (A) has 2 M/s. Rai Residency Pvt. Ltd. erred in not appreciating the fact that the Architect's Certificate submitted during assessment proceedings clearly stated that the area of land on which the project is constructed is less than one acre.

5. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in interpreting CBDT's Circular No. 5 of 2005.”

3. In this case, the Revenue is aggrieved by the decision of the Ld. CIT(A) in granting the deduction under section 80IB(10) of the Income Tax Act pleading that the area of project is less than the specified area of one acre of land. The dispute involved is as to whether the area of DP Road, Recreation Garden etc. should be excluded for the purpose of admeasuring the one acre of land. At the outset, the Ld. A.R. of the assessee has stated that the issue is squarely covered in favour of the assessee in the own case of the assessee for A.Y. 2009-10 vide order dated 18.12.13 passed in ITA No.6245/M/2012. The relevant part of the said decision of the Tribunal is reproduced as under: “5. We have heard both the parties and perused the orders of the Revenue Authorities on this limited issue and find that the contents of para 6 of the CIT (A)’s order where the issue was discussed at length. It is an undisputed fact that the local authorities have approved the project by holding that the plot has more than one acre of land. The issue of whether the area of D.P. Road, recreation garden etc should be excluded for the purpose of admeasuring the one acre of land was considered by various decisions and the same was decided in favour of the assessee. The relevant decisions in this regard are as under:

2. Johar Hassan Zojwalla vs. Addl. CIT, ITA No.5404/Mum/2008 (AY 2005-06) dated 12.1.2011. 3. ACIT vs. Mrs. Anjana S. Chavan, ITA No. 1080/Mum/2010 (AY 2006- 07) dated 20.4.2011. 4. M/s. B.K. Pate Enterprises vs. ACIT, ITA No.736/PN/2010 (AY 2005- 06) dated 8.7.2011. 6. We have also perused the operational para 4 from the order of the CIT (A) and same reads as under: “4..............On the perusal of approval letters issued by KDMC dated 7.11.2006 and 30.3.2007, it is noticed that the housing project (Hari Complex) has been approved on a plot area of 4200.19 sq. Mts., and housing project (Dwarka Nagari) has been approved on an area of 4219.37 sq. Mtrs. Under these circumstances, as also in view of the decision of Hon’ble ITAT, Mumbai as discussed above, which are binding on me, I am of the considered view that the area of road and reservation for recreation ground, etc., which is as per the housing project approved by the Local

3 M/s. Rai Residency Pvt. Ltd. Authority could not be excluded from the total are of the plot from the purpose of claim of deduction u/s 80IB(10). Undisputedly, without excluding the area of road and reservation for recreation ground, the area of plot in both the projects exceeded one acre. Therefore, I hold that the appellant has satisfied the condition in this regard and hence is eligible for deduction u/s 80IB(10) of the Act in respect of both the housing projects. The AO is directed to grant relief accordingly and appellant succeeds on ground no.2.”

Order pronounced in the open court on 21.10.2016.