ITO WD 1(2), KALYAN vs. KANTILAL DHANRAJ JAIN (HUF), BHIWANDI

The only issue arising per the instant appeal is the validity of the deletion of the disallowance of the assessee’s, a HUF in the business of property development, claim

(A.Y. 2006-07) ITO vs. Kantilal Dhanraj Jain (HUF) for deduction u/s.80-IB(10), preferred in the sum of Rs.13,67,159/- in respect of a housing project by the name Silver Leaf Residency at Bhiwandi, by the ld. CIT(A) in first appeal. The same, as apparent from the grounds raised as well as the reading of the assessment order, was denied by the Assessing Officer (A.O.) on two grounds, viz: a) the plot size of the project being less than one acre (4046.85 sq. mtrs.); and b) some flats having built-up area of more than 1000 sq. ft., so that the condition of section 80-IB(10)(b) and (c) respectively stood violated, with it being trite law that all the conditions have to be met simultaneously for a housing project to qualify as an eligible project. The ld. CIT(A), whose order is combined order for A.Ys. 2005-06 and 2006-07, allowed relief to the assessee on the basis of the decision in first appeal for A.Y. 2007-08; the facts being the same. As regards the some flats having built-up area of over 1000 sq. ft., he directed proportionate deduction, i.e., by excluding the area (of the total area) occupied by such flats, working out the same though by excluding the area of the balcony (refer para 7 of the impugned order). Aggrieved, the Revenue is in appeal.

At the outset, the ld. Authorized Representative (AR), the assessee’s counsel, would submit that the issue/s arising in this appeal is squarely covered by the Order by the Tribunal in the assessee’s own case for A.Y. 2007-08 (in /2013 dated 16.10.2015/copy on record). She would then advert to the relevant part of the said order. The ld. Departmental Representative could not controvert the said assertion by the ld. AR.

The parties were heard, and the material on record perused. The housing project for which the deduction u/s.80-IB(10) is under consideration is the same as that for A.Y. 2007-08. With regard to the plot area, the tribunal has, with reference to the decision by the Hon'ble jurisdictional High Court in (A.Y. 2006-07) ITO vs. Kantilal Dhanraj Jain (HUF) the case of Vandana Properties (reported at [2012] 19 taxmann.com 316 (Mum)), clarified that the area of the plot is to be worked out for the entire housing project, i.e., as approved, and not with reference to any particular building. Further, relying on the decision in the case of Bunty Builders vs. ITO [2010] 127 ITD 286 (Pune), it stands held that the amenity space and the land surrendered for the road is not to be excluded while reckoning the plot area in-as-much as the same forms an integral part of the housing project. As regards the built-up area, the same is to be worked out by not excluding the balcony area, as the project under reference stands approved on 24.6.1999, i.e., prior to the amendment defining built-up area, effective 01.4.2005, following the decisions in the cases of CIT vs. Anriya Project Management Services Pvt. Ltd. [2012] 21 taxmann.com 140 (Kar) and CIT vs. G. R. Developers (in of 2009). The ld. CIT(A) has directed for allowance of deduction on proportionate basis, where the built-up area, so calculated, yet works to in excess of 1000 sq. ft.; the concurrent finding of the authorities below being that the assessee’s project stands located within the prescribed distance of 25 kms. from the municipal limit of Mumbai. The concept of proportionate deduction stands approved by the tribunal vide its order in Asst. CIT vs. Ekta Sankalp Developers [2015] 53 taxmann.com 75 (Mum-Trib), considering also the decision by the Hon'ble jurisdictional High Court in CIT vs. Brahma Associates [2011] 197 Taxmann 459 (Bom). Under the circumstances, we find no reason to interfere with the impugned order, which stands affirmed. I decide accordingly.