Income Tax Appellate Tribunal - Pune
M/S Parmar Properties Pvt. Ltd, Pune vs Dcit,Cir.4, Pune on 22 March, 2017
आयकर अपील य अ धकरण पण
ु े यायपीठ "ए" पण
ु े म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
सु ी सुषमा चावला, या यक सद य एवं ी अ नल चतुव!द , लेखा सद य के सम$
BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM
आयकर अपील सं. / ITA No.234/PUN/2009
नधा&रण वष& / Assessment Year : 2003-04
M/s. Parmar Properties Pvt. Ltd.,
Office No.2A, Wing 1,
Thaker House, 2418,
East Street, Pune - 411001 .... अपीलाथ /Appellant
PAN: AABCP1016F
Vs.
The Dy. Commissioner of Income Tax,
Circle 4, Pune .... यथ / Respondent
आयकर अपील सं. / ITA No.569/PUN/2009
नधा&रण वष& / Assessment Year : 2004-05
M/s. Parmar Properties Pvt. Ltd.,
Office No.2A, Wing 1,
Thaker House, 2418,
East Street, Pune - 411001 .... अपीलाथ /Appellant
PAN: AABCP1016F
Vs.
The Income Tax Officer (Tech)-II,
Pune .... यथ / Respondent
अपीलाथ क ओर से / Appellant by : S/Shri Kishore Phadke and
M.G. Rathi
यथ क ओर से / Respondent by : S/ Shri Rajeev Kumar, CIT
Achal Sharma, JCIT
and Gaurav Batham, Addl.CIT
सन
ु वाई क तार ख / घोषणा क तार ख /
Date of Hearing : 09.03.2017 Date of Pronouncement: 22.03.2017
2
ITA No.234/PUN/2009
ITA No.569/PUN/2009
M/s. Parmar Properties Pvt. Ltd.
आदे श / ORDER
PER SUSHMA CHOWLA, JM:
Both the appeals filed by the assessee are against separate orders of CIT(A)-II, Pune, dated 11.11.2008 and 24.02.2009 relating to assessment years 2003-04 and 2004-05 against respective orders passed under section 143(3) of the Income-tax Act, 1961 (in short 'the Act').
2. Both the appeals relating to the same assessee on similar issue were heard together and are being disposed of by this consolidated order for the sake of convenience. However, reference is being made to the facts and issues in ITA No.234/PN/2009 to adjudicate the issue.
3. The assessee in ITA No.234/PN/2009 has raised the following grounds of appeal:-
1. The learned CIT(A)-II, Pune erred in law and on facts in confirming the disallowance of deduction of Rs.4,09,79,023/- u/s 80IB(10) of the ITA, 1961 made by the learned DCIT, Circle-4, Pune.
2. The learned CIT(A)-II, Pune erred in law and on facts in concurring with the learned AO that the housing project of the appellant has commenced before 1/10/1998.
3. The learned CIT(A)-II, Pune erred in law and on facts in concurring with the learned AO that some of the tenements in the housing project of the appellant were exceeding built-up area of 1500 Square Feet, and hence violate conditions of section 80IB(10) of the ITA, 1961.
4. The learned CIT(A)-II, Pune erred in law and on facts in concurring with the learned AO that construction of tenements in B-1 and C-3 buildings of the housing project of the appellant were not fulfilling conditions laid down in section 80IB(10) of the ITA, 1961, leading to denial of deduction thereto.
5. The learned CIT(A)-II, Pune also erred in not appreciating that the appellant was denied the opportunity of cross verification of parties / customers, etc. of the appellant. He ought to have appreciated that under principles of natural justice, cross verification of evidences should have been ensured.3 ITA No.234/PUN/2009 ITA No.569/PUN/2009
M/s. Parmar Properties Pvt. Ltd.
6. Alternatively and without prejudice (to Ground Numbers 3 and 4 above), the learned CIT(A)-II, Pune erred in law in not permitting a proportionate deduction u/s 80IB(10) of the ITA, 1961 with respect to such tenements of the housing project, which lead to satisfaction of conditions of section 80-IB(10).
4. The issue arising in both the appeals is with regard to the claim of deduction under section 80IB(10) of the Act.
5. Briefly, in the facts of the case, the assessee for the year under consideration had filed return of income declaring total income of Rs.1,25,59,327/-. The assessee was engaged in the business of builders, developers, dealers in real estate. During the year under construction, the assessee had constructed two projects i.e. 'Parmar Garden' at Survey No.66A/2A+2B/1A/1 (P), Wanawadi, Pune City, Pune and KPCT, a commercial project, situated at Survey No.16, Wanawadi, Pune.. For the year under consideration, the assessee had claimed the deduction under section 80IB(10) of the Act at Rs.4,09,79,023/- for the project 'Parmar Garden'. The said project consisted of buildings B-1 (Lily), B-2 (Lotus), B-3 (Daffodil), A-1 (Tulip). These are four nine storied buildings, in addition to the buildings called as C-1, C-2, C- 3, which were also called as Marigold. The Assessing Officer has noted that the project was completed during assessment year 2003-04 and had received the completion certificate from Pune Municipal Corporation. Part completion certificate was received on 16.07.2002 in respect of flats of buildings C-1, C-2 and some of the flats of building B-1. The said completion certificate was issued with reference to building commencement certificates No.2098, dated 19.12.1998 and 1032, dated 16.03.2002. Subsequently, the assessee received final completion certificate on 20.03.2003. As per final completion certificate, the same was issued with reference to building commencement certificate No.1032, dated 16.03.2002. The said completion certificate was for the remaining flats of buildings B-1, B-2, B-3, A-1, C-3 and remaining flats of C-1 & C-2. By certificate 4 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
dated 20.03.2003, the assessee claims that it had completed project called 'Parmar Garden'. During the course of assessment proceedings statements of certain officials of assessee company were recorded under section 131 of the Act. In addition to the same, Investigation Wing of Income Tax Department, Pune had recorded statement of Mr. Vilas Parmar, Director on 05.12.2005 and 27.12.2005. The statement of Mr. Kantilal C. Parmar was recorded during survey under section 133A of the Act on 24.11.2005. Subsequently, statement of Mr. Kantilal C. Parmar was recorded on 27.12.2005 by the Investigation Wing. In this case, survey under section 133A of the Act was conducted by the Investigation Wing on 24.11.2005. The statements of certain customers were also recorded under section 131 of the Act during the course of assessment proceedings for assessment year 2003-04, who were the occupants of flats in C- 2, Marigold and Row House No.5, C-2 Marigold and 3-4 Row House No.6, C-1 Marigold, Row House No.1 and also flats of A-1 Tulip. The Assessing Officer noted the eligibility of deduction under section 80IB(10) of the Act and observed that primary condition for obtaining deduction under section 80IB(10) of the Act was that the same was allowable for only housing project approved by local authority. Further, development and construction of housing project should start after 01.10.1998 and the residential units should have maximum built up area of 1500 sq.ft. The Assessing Officer thereafter, analyzed the entire project of 'Parmar Garden' from the aspect of built up area and found that there was one big hall in building B-1 of Carpet area 2576 which was violative of conditions laid down in section 80IB(10) of the Act. Further, Row Houses in buildings C-1 and C-2 also exceeded 1500 sq.ft. The Assessing Officer noted that in building C-1, there were eight flats, however, in reality, there were only four Row Houses. Similarly, in C-2, there were eight flats as against which in reality, there were four Row Houses. The investigation made by the Assessing Officer from the statements recorded of the employees of assessee company and of the 5 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
prospective buyers and buyers of the said flats, the Assessing Officer noted that the Row Houses which were constructed by the assessee were as single unit and purchaser did not ask the builder to combine the two flats and the said Row Houses of 'Parmar Garden' were more than 1500 sq.ft. Even the bungalow called as C-3 exceeded built up area of 1500 sq.ft. and even the actual construction was not as per approved plan. Thereafter, the Assessing Officer took note of the building Tulip called as A-1, wherein as per the assessee there were 66 flats. However, on inspection, it was found that there were four flats on floor No.1 to 6 and 8, three flats and space for fire fighting on 7th floor and there were two flats in 9th floor. Various information was called for from the assessee and statements of buyers were recorded and of the customers were recorded. The assessee combined flats and there was variance in the built up area of each flat, even in the different submissions made by the assessee. The Assessing Officer has got the carpet area verified from the Government Approved Valuer and found that the area exceeded 1500 sqft. In view thereof, the Assessing Officer was of the view that since the assessee has violated the conditions of section 80IB(10) of the Act, the assessee was not entitled to the claim of deduction under section 80IB(10) of the Act.
6. The Assessing Officer also considered another aspect i.e. development and construction of the said project whether the same was prior to 01.10.1998 or after 01.10.1998. The first aspect noted by the Assessing Officer was the returns of income filed for assessment year 1997-98 which was filed on 25.11.1997, wherein in the Directors report, it was stated that the development of first project namely 'Parmar Garden' had started and there was loss of Rs.7,59,657/- during the year because the same was at initial stage. In the scrutiny proceedings for assessment year 1997-98, similar submissions were made that the company had started first project namely 'Parmar Garden' and the 6 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
development work was going on. The Assessing Officer noted that in the return of income for assessment year 1997-98, work-in-progress was shown at Rs.7,03,884/-, which did not include the land cost. The Assessing Officer thus, deduced the same as for construction expenses of this project. Similar disclosure was made in the Directors Report relating to assessment year 1996-
97. The Assessing Officer further noted that the commencement certificate from Pune Municipal Corporation was received on 01.08.1996, under which permission was granted to carry out development at Wanawadi, Pune. The Assessing Officer was of the view that the assessee had received the permission for development on 01.08.1996. Thereafter, the Assessing Officer referred to the application made to MSEB dated 11.03.1997 and the NA order dated 30.12.1996. The Assessing Officer noted that the NA order referred to the commencement certificate dated 01.08.1996 and it also categorically stated that the building was to be constructed strictly in accordance with the plans sanctioned by PMC vide commencement certificate dated 01.08.1996. Further, reference was made by the Assessing Officer to the work-in-progress shown by the assessee in the returns of income for assessment years 1996-97, 1997-98 and 1998-99. Even in the Directors Report, there was acknowledgement that the development had started of the project 'Parmar Garden' at Wanawadi. Further, statement of assessee's Engineer Mr. Ghuge was recorded under section 131 of the Act on 11.11.2005, in which he stated that the development work started prior to 1998. Further, site visit reports were obtained and in the report dated 01.07.1997, there was mention of road work done at site called 'Parmar Garden'. The said reports were confronted to the persons who were signatory to the same and they confirmed that the contents were correct. The assessee was asked to produce the Sales Register, Purchase Register, Material receipt Register since financial year 1997-98 for perusal and in reply, the assessee pointed out that the accounts were scrutinized for assessment year 2001-02 and the work-in- 7 ITA No.234/PUN/2009 ITA No.569/PUN/2009
M/s. Parmar Properties Pvt. Ltd.
progress and other balances as on 31.03.2001 were thoroughly verified and accepted by the predecessor Assessing Officer. Hence, the assessee questioned the move of Assessing Officer in asking to produce old records again. The Assessing Officer noted that during the course of survey under section 133A of the Act on 24.11.2005, material details were found and impounded which clearly shows the purchase of material for 'Parmar Garden' site prior to 01.10.1998. Another point noted by the Assessing Officer was the list of sundry creditors for 'Parmar Garden' as on 31.03.1997, which included sales from parties for steel, timber prior to 01.04.1998 for 'Parmar Garden'. The Assessing Officer thus, concluded that the work of 'Parmar Garden' had started during the course of assessment proceedings 1996-97. Show cause notice in this regard was issued to the assessee, who acknowledged that it had carried out the landscaping, plantation, compound wall, etc. in order to safeguard the rights of company in the property, which did not relate to development and construction of housing project. The said claim of assessee was rejected in view of various contentions and in view of the conclusion of Assessing Officer and also where the assessee had constructed godowns, site office and also carried out Bhoomipoojan for 'Parmar Garden' in financial year 1996-97. The Assessing Officer thus, concluded that the project 'Parmar Garden' had started in financial year 1996-97 itself. The contention of assessee that work-in-progress in earlier year's record were for area related works and not the building related works, was not accepted by the Assessing Officer as he was of the opinion that the assessee could not start the building related work unless the plot is developed. He held that development of plot was a pre-condition for starting construction work and since the assessee had started road work, had done excavation, plantation and even constructed borewell, these were all activities, which were essential activities before starting construction work. As per the Assessing Officer, the assessee had started development work which was integral part of 8 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
construction of building prior to 01.10.1998 and hence, the assessee was not eligible to claim the deduction under section 80IB(10)(a) of the Act. The reliance placed upon by the learned Authorized Representative for the assessee on the decision of Pune Bench of Tribunal in Nirmitee Constructions Vs. DCIT in ITA No.1389/PN/2003, was held to be distinguishable on facts and hence, the ratio was held to be not applicable. In the facts of the case before the Pune Bench of Tribunal, NA permission was received on 13.06.1999 and after that it got the commencement certificate, hence the Tribunal had allowed the claim of assessee, though the land was purchased prior to that. In the case of assessee, the Assessing Officer noted that the expenditure incurred was significant and large and was incurred well before 01.10.1998 and even NA certificate was received on 30.12.1996. Another facet of denial of deduction by the Assessing Officer was that section 80IB(10) of the Act refers to commencement of development and construction of housing project after 01.10.1998 and since the phase 'development' includes several activities prior to construction, where admittedly, the assessee had carried out the development activities, the Assessing Officer held that the assessee had started development work of the project prior to 01.10.1998 and hence, was not eligible for claiming the said deduction. One more aspect noted by the Assessing Officer was that the construction undertaken by the assessee was not as per approved plan of the project, this was because of combining of various flats in different buildings. Since the project was not constructed as per building plans approved by the local authority, the Assessing Officer was of the view that the assessee has violated the very basic conditions of section 80IB(10) of the Act. The Assessing Officer in para 14 has summarized the reasons for denial of deduction under section 80IB(10) of the Act which read as under:-
9ITA No.234/PUN/2009 ITA No.569/PUN/2009
M/s. Parmar Properties Pvt. Ltd.
"14.....
1) Area of Residential units exceeds 1500 sq.ft.
The carpet area of unit in B1, building is 2576 sq.ft.
• Row Houses actually constructed with area exceeding 1500 sq.ft. though on paper two flats shown - Marigold. On paper in C1, C2 & C3 - 22 flats are shown. Actually there are 8 row houses in C1 and C2, C-3 on paper are 6 flats but is actually one bungalow. • Flats actually constructed with area more than 1500 sq. ft. though on paper two flats shows - Tulip. On paper 66 flats shown. Actually there are lesser flats.
• Statement recorded of sales executive, site engineer, brochure obtained from site office & website of company confirm that these were row houses & 3 bedroom flats - Tulip & Marigold -
exceeding 1500sq. ft.
• Statement of flats holders recorded confirming the sale as single unit to them & that it was explained to them that 2 agreements would save registration & stamp duties.
• All the flats in Tulip building - actual 33 on paper 66-in Marigold, actual 9 - on paper 22, are exceeding 1500 sq. ft. & there is not a single case where flats are actually constructed as 2 flats as per the building plan. There is single electricity meter.
2) Commercial area exceeding 2000 sq. ft.
In the brochure a shopping mall is shown. On verification it was found to be actually constructed as a hall on ground & first floor, connected from inside, but used as a sales office - carpet area 2576 sq. ft. On paper it has been shown as 3 flats. This was referred to the PMC who have issued a Show cause notice to the assessee for construction in violation of sanctioned plan. Even if it is treated as residential unit, the area exceeds 1500 sq. ft.
Final completion certificate is received on 20/03/2003
3) Project has Commenced prior to 01/10/1998 • First commencement certificate of PMC is dated 01/08/1996. • Balance sheet filed with returns for AY 1997-98 & 1998-99 show WIP for this project exclusive of cost of land.
• Directors Report of relevant period shows development in this project was started.
• Statement recorded of site engineer & architect, who confirmed that roads were made, boundary wall was erected & land was excavated prior to 01/10/98.
10ITA No.234/PUN/2009 ITA No.569/PUN/2009
M/s. Parmar Properties Pvt. Ltd.
• Material purchase bills impounded also confirm the development activity prior to 01/10/98.
4) The Project Parmar Garden has got residential built up area more than 1500 sq.ft. in buildings B1, C1, C2, C3, A1. Area of the unit of B1 has been certified by Director of assessee.
5) It had started development of the Project Parmar garden by obtaining Commencement certificate dt 1-8-1996, which is evident from the WIP appearing in earlier returns.
6) The Project Parmar Garden has not been constructed as per approved Municipal Plan.
7) It has a commercial premises.
Hence deduction claimed by assessee for Parmar Garden Project U/S 80IB(10) is disallowed.
7. The CIT(A) after going through the order of Assessing Officer and submissions of assessee, was of the view that the basic issues arising in the present appeal for adjudication were as under:-
"3.....
(i) Whether the appellant commenced the development and construction of the housing project on or after 1-10-1998, as required under the law to be eligible for deduction under section 80IB(10)?
(ii) Whether the unit built in B1 building of the project, shown as 'shopping plaza' and with an area exceeding 1500 sq.ft. shall render the appellant ineligible for deduction under section 80IB(10)?
(iii) Whether the units in B1, A1, C1, C2 and C3 buildings of the projects are constructed by the appellant as per the approved plan, and fulfilled the condition as laid down in clause (c) of Section 80IB(10)?
(iv) Where the units or buildings are not constructed as per the plan approved by the local authorities, whether deduction u/s 80IB(10) can be allowed?"
8. The CIT(A) thereafter, observed that there was no dispute about the fact that the assessee had obtained layout / development plan sanctioned by the Municipal Corporation vide commencement certificate dated 01.08.1996. As per the said certificate after deducting the areas under reservations i.e. 3780 sq.mt., net area of 8124.05 sq.mt. was approved for development of the project which consisted various buildings with different tenements. As per the said certificate, 11 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
demolition of existing structure on the land had to be carried out in addition to laying of drainage and sewage pipelines, electric poles, internal roads and construction of building up to plinth area, etc. The revised layout sanctioned plan was dated 24.06.1998 which also had pre-printed activities / conditions to be completed before building construction could be permitted. In this revised plan, there was change in number of floors and the total number of tenements were 93 along with proposal for club house and swimming pool. As per the assessee, no work was carried out consequent to layout sanction plan dated 01.08.1996 and the same lapsed after one year.
9. The next plea of the assessee before the CIT(A) was that whatever expenditure was made before 01.10.1998 on the project was to protect the land from encroachment and dispute, by way of boundary wall construction, shed for watchman, plantation, etc. and the expenditure related to the land / site / area and not the space in the project. The assessee further claimed that building construction had started only after the construction commencement certificate dated 10.05.1999 in consequence to commencement certificate dated 19.12.1998 issued by the PMC. With regard to C1 and C2 buildings, the CIT(A) observed that the contentions of assessee that the development / layout plan sanctioned vide certificate dated 01.08.1996 was not acted upon and the same had lapsed after one year, was not factually correct as was evident from the factual position narrated in the paras below. Vide para 3.2, the CIT(A) acknowledges that the assessee had submitted a layout plan of the project to the PMC along with necessary copies of building plans prepared by the Architect. The PMC granted commencement certificate on 01.08.1996. The assessee had paid Rs.2,84,150/- vide draft dated 02.07.1996 to the PMC towards development charges. The CIT(A) noted that the permission was granted with certain conditions which included demolition of existing structure on the land, laying 12 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
electric cables, etc. Another point noted by the CIT(A) was that during survey under section 133A of the Act which was conducted on assessee's office on 24.11.2005, loose papers relating to assessee's project under consideration were found and impounded. The loose paper bundle No.3, 6, 7 and 8 pertained to various expenditure incurred before and after the assignment of development rights to the assessee on 20.03.1996 which expenses were incurred up to May, 1998 totaling Rs.8,34,572/-. The details of expenditure are tabulated by the CIT(A) under para 3.3 at pages 25 and 26 of the appellate order. Thereafter, the CIT(A) vide para 3.4 observed that expenses related to wire fencing and plantation up to 31.03.1996. Thereafter, the assessee carried out extensive work relating to development of land readying it for construction up to 31.03.1998, as per CIT(A). Such activities including demolition of old structure, removal of debris, ground water survey and installation of borewells, installation of water pumps and water storage facilities, erection of temporary sheds, godowns and site office. Further expenses are Electric connection from MSEB, advertisement hoarding installed on the site in March, 1997, newspaper advertisements published in February, 1997, invitation cards for the Bhoomi Poojan on the site were printed in February, 1997, etc,. were incurred. As per the CIT(A), such rituals normally are conducted before commencement of construction activity. Further, the assessee had received advances from buyers before 31.03.1998 and the receipt vouchers were impounded during the course of survey. The CIT(A) referred to the commencement certificate dated 01.08.1996 which clearly mentioned that "permission is hereby granted to carry out development of Survey No.66A, Hissa No.2A+2B/1, Village Wanawadi, Pune (plan enclosed) subject to the following conditions." As per the CIT(A), the assessee had received permission for development on 01.08.1996. Further, NA permission was received from Collector, Pune vide order dated 30.12.1996, 13 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
which admittedly was pre-requisite for development and construction of any land. The CIT(A) concluded by holding as under:-
"3.5 .........
From the details in Para 3.4 above, and facts discussed above, it is clear that by March, 1997 the land was fully developed and ready for construction activity to commence. Statements of Shri Ghuge, engineer of the company and Shri Laxman Thite, architect, confirm the fact that development had started prior to 1998. The site visit reports of Shri Azim Shaikh, junior of the architect of the appellant, are contemporaneous dated 01-08-1997 and 25-08-1997. The fact of commencement is evident from these reports. Excavation and construction of roads within the plot, Bhoomi Pujan, advertisements in newspaper hoardings and receipt of advance booking show development work had infact started prior to 01-04-1998. In view of the above, it is held that ratio of Hon'ble ITAT, Pune decision in case of Nirmittee Construction Vs. DCIT (ITA No.1389/PN/03) is not applicable to the facts of assessee's case."
10. Thereafter, the CIT(A) dealt with the built up area of B1 building of the project wherein, the assessee had shown shopping plaza with carpet area of 2576 sq.ft. Reference was made to the site visit on 11.03.2008 and the finding of CIT(A) in this regard was that the assessee had not constructed the said portion as approved by the local authority. Similarly, in respect of Row Houses and buildings in C1 and C2, the finding of Assessing Officer that each of the Row Houses was more than 1500 sq.ft. was held to be correct. Further, the CIT(A) in this regard has given a finding that combination of two flats were not at the request of purchaser but the Row Houses were combined by the assessee and the built up area being more than 1500 sq.ft., the assessee had contravened the plans approved by the local authority. In respect of building C3 Marigold which was claimed to be consisting of six residential units, the Assessing Officer had found that there was combination of flats and the total area of bungalow measured about 6500 sq.ft. So the building C3 was held to be not according to plan approved by the local authority and even the built up area was more than 1500 sq.ft. With regard to building A-1 Tulip, wherein the assessee claimed that it consists of 66 flats but the Assessing Officer on inspection found that the construction of building was not in accordance with the approved plan and there was combination of flats and the assessee had constructed only 33 flats. The 14 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
area of combined flat was found to be more than 1500 sq.ft. and as such, the CIT(A) held that even building A1 Tulip was not as per plan approved by the local authority. In view of assessee having constructed shopping plaza, whose built up area was more than 1500 sq.ft. and further the units B1, C1, C2, C3 and A1 Tulip were constructed in contravention of specific provisions of section 80IB(10) of the Act, wherein the area of residential units after combination was more than 1500 sq.ft. and also the buildings constructed did not conform with the plan approved by the local authority, the CIT(A) held that the assessee was not entitled to the claim of deduction under section 80IB(10) of the Act. Furthermore, the development of housing project had commenced prior to 01.10.1998 and on this account also, it was held that the assessee is not entitled to the claim of deduction under section 80IB(10) of the Act.
11. The assessee is in appeal against the order of CIT(A).
12. The learned Authorized Representative for the assessee elaborately took us through the factual aspects of the case and pointed out that both the authorities below had not allowed the deduction claimed under section 80IB(10) of the Act. The learned Authorized Representative for the assessee at the outset pointed out that it was not disputed that Lity-I i.e. B1 area was constituted of basement which was more than 1500 sq.ft. and was the shopping area and the assessee was not claiming any deduction in respect of the same. Further, it was also not claiming the deduction in respect of Marigold C3. The learned Authorized Representative for the assessee thereafter, took us through the contentions of CIT(A) in various paragraphs and tried to meet the same. The first contention raised by the assessee was with regard to area of combined flats. The learned Authorized Representative for the assessee pointed out that even after combination of flats, the total area was less than 1500 sq.ft. i.e. built up 15 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
area. However, the Assessing Officer and CIT(A) had referred to super built up area which is also called the saleable area, which is not to be adopted for allowing deduction under section 80IB(10) of the Act. The learned Authorized Representative for the assessee in this regard stressed that the area within four walls of flat is to be taken into account for determining whether the assessee fulfils the conditions of area being less than 1500 sq.ft. With regard to statements recorded of officials of assessee company and various customers, the Assessing Officer pointed out that though before the Assessing Officer and CIT(A) various contentions were raised in this regard but the assessee admits that it has amalgamated the flats but even after amalgamation, the area of flats in dispute is less than 1500 sq.ft. He further pointed out that the Assessing Officer during the course of assessment proceedings for assessment year 2003- 04 had asked the DVO to find out the area of flats and he on the basis of plans and on his own working has given a finding that the combined area of flats was more than 1500 sq.ft. However, during the course of assessment proceedings relating to assessment year 2004-05, the Assessing Officer again deputed the same DVO to verify the claim of assessee, who went to site and providing working sheet as part of valuation report, wherein the combined area of flats is less than 1500 sq.ft. The learned Authorized Representative for the assessee points out that the CIT(A) while deciding the appeal for assessment year 2003- 04 takes note of the first report of DVO and confirmed the addition. While deciding the appeal relating to assessment year 2004-05, he confirmed the addition since his predecessor had already taken a view. The learned Authorized Representative for the assessee pointed out that in such scenario, verification exercise can be carried out in order to determine the physical area of flats and if the claim of the assessee is found to be correct, then the assessee is entitled to proportionate deduction of 80IB(10) of the Act. 16 ITA No.234/PUN/2009 ITA No.569/PUN/2009
M/s. Parmar Properties Pvt. Ltd.
13. With regard to second issue i.e. whether construction started prior to 01.10.1998 or after 01.10.1998, the learned Authorized Representative for the assessee pointed out that the Assessing Officer and CIT(A) referred to the permission granted on 01.10.1996 by the PMC which is not the material permission for construction of project. He stressed that first certificate dated 01.08.1996 was the layout plan which has been so accepted by the CIT(A) in para 3.1 of the appellate order. The second layout plan was dated 24.06.1998 under which the assessee had to carry out certain activities for making the plot ready for construction purpose. The building plans were sanctioned firstly for C1, C2 on 10.05.1998 and thereafter on 19.12.1998. Our attention was drawn to the list of expenses which are tabulated at pages 24 and 25 of CIT(A)'s order totaling Rs.8,34,752/- and it was pointed out that the assessee is not disputing all the said facts but the development is not material development but activities undertaken to make the land suitable for development. The word 'development' used in section is material development and not activities undertaken to make the land suitable for development. The learned Authorized Representative for the assessee in this regard placed reliance on the following decisions:-
a. Ravi Appasamy Vs. ACIT (2016) 69 taxmann.com 305 (Madras) b. Nirmiti Construction Vs. DCIT (2005) 95 TTJ (Pune) 1117 c. CBDT Circular No.5/2010 dated 03-06-2010
14. He further pointed out that the first layout plan dated 01.08.1996 was not acted upon. The revised layout plan dated 24.06.1998, under which certain conditions had to be fulfilled. Thereafter, first sanction of building plan was dated 19.12.1998 and on 10.05.1998 building plan with respect to tenements were sanctioned.
15. The learned Authorized Representative for the assessee in this regard pointed out that the entire expenses on pre-condition activities totaled to Rs.12 17 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
lakhs, whereas the cost of entire project was about Rs.12 crores. He stressed that the development and construction of building project had not started by spending Rs.12 lakhs. The learned Authorized Representative for the assessee has filed event chart with date-wise, sequence of events, wherein from the date of assignment of land in favour of assessee, where there was dispute with the owner and the owner had tried to sell the same land to two different persons. Our attention was drawn to the events chart which is date-wise sequence of events.
16. He pointed out that the first layout sanction was dated 01.08.1996, wherein within one year, the assessee was to start the construction, copy of the same is placed at pages 303 and 304 of Paper Book. However, the NA order is dated 30.12.1996 and hence, the first layout sanction was not complied with. Further, on 11.08.1997, a letter was sent to the PMC, Pune for sanctioning the plans on 24.06.1998. Revised second layout plan was sanctioned, copy of which is placed at page 330 of the Paper Book, which was not structural or engineering plan. At page 331 of the Paper Book at serial No.13, reference was made to cancellation of all earlier plans. Further, in the revised layout plan, condition numbers18 to 23 were laid down and as per condition No.24, existing structure had to be demolished. Even on 30.11.1998, a communication was issued where it is clearly stated that building plans were not sanctioned, copy of which is placed at page 333 of the Paper Book. On 19.12.1998, the first building plan i.e. the commencement certificate to construct and develop the building was sanctioned. The learned Authorized Representative for the assessee pointed out that there was no dispute to the date of completion i.e. the building had to be completed before 31.03.2003 and the assessee had completed the building by 20.03.2003. He further referred to the letters of PMC, Pune placed at page 344 of the Paper Book, where in respect of combination of flats, PMC asked to the 18 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
assessee to file record plans for regularization. He stressed that as far as PMC is concerned, the assessee was not in default vis-à-vis the amalgamation of flats.
17. The next argument of learned Authorized Representative for the assessee was the dimension of violation by the assessee i.e. combination of two flats. He pointed out that even in case of violation, if any, where the area of combined flats was less than 1500 sq.ft., then the deduction under section 80IB(10) of the Act was to be allowed. In any case, prorata deduction is to be allowed to the assessee. He fairly admitted that the Assessing Officer may carry out the necessary verification exercise by deputing the DVO to verify the area of flats within boundaries and in case the same is found even after amalgamation, at less than 1500 sq.ft., then the assessee is entitled to claim the said deduction.
18. Coming to the violation of building plans he pointed first of all, PMC has regularized the violation in the case of assessee. Even otherwise, where the violations are not regularized, then such violations has to be looked into by the Corporation and it is not the requirement of section 80IB(10) of the Act. Such is the ratio laid down by the Bangalore Bench of Tribunal in ITO Vs. Mahaveer Calyx (2012) 26 taxmann.com 181 (Bang.).
19. The learned Departmental Representative for the Revenue placing reliance on the orders of Assessing Officer and CIT(A), pointed out that the Assessing Officer vide para 14 had clearly established that the commencement was prior to 01.10.1998 and hence, the assessee was not entitled to claim the aforesaid deduction, wherein section was introduced for projects commencing construction after 01.10.1998. He further referred to the revised layout sanctioned plan and pointed out that as per the said plans, plinth area was allowed. Our attention also drawn to the list of expenses incurred by the 19 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
assessee and he stressed that the same establishes the case of Revenue that the development and construction of property had started prior to 01.10.1998. He made reference to the expenses, wherein boundary wall was constructed, landscape was undertaken and internal roads were made and old structure were demolished, which all acts are necessary for development and construction. The learned Departmental Representative for the Revenue also referred to the declaration made by the assessee under the project head, wherein all the said expenses were debited. He admitted that the assessee received NA on 30.12.1996 but the development had already started as observed by the CIT(A) in para 3.5 of the appellate order. Referring to the reliance placed upon by the learned Authorized Representative for the assessee on the decision of Pune Bench of Tribunal in Nirmiti Construction Vs. DCIT (supra), he pointed out that expenses in the said case were very nominal. He then, made reference to the violations made by the assessee, wherein the commercial area i.e. B1 was more than 10% and then, there was merger of flats and even merger of row-houses. He stressed that in the claim of allowing deduction under section 80IB(10) of the Act, the same was for smaller units but where the assessee has constructed big flats and row-houses, no such benefit can be allowed to the assessee. He also pointed out that the buildings which were constructed by the assessee are not as per approved plans and hence, even prorata deduction is not to be allowed. The learned Departmental Representative for the Revenue stressed that the assessee is not even aware when the construction had started as in different documents different statements were made. However, the documents found during the course of Survey, established the case of Revenue.
20. The learned Authorized Representative for the assessee in rejoinder pointed out that the layout plan was passed without building plans being passed and till the same are passed, nothing can be constructed. He further stressed 20 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
that laying of internal roads was part of layout plan. He further referred to the decision in Nirmiti Construction Vs. DCIT (supra) and pointed out that real ratio laid down was that the development would lead to material change in land and in the absence of the same, it cannot be said that the assessee had started construction. As far as the decision of Hon'ble High Court of Madras in Ravi Appasamy Vs. ACIT (supra) is concerned, the learned Authorized Representative for the assessee pointed out that the Hon'ble High court has laid down the proposition that under section 80IB(10) of the Act, there is conjunction of words i.e. development and construction, so construction of the project is necessary, which can be carried out only when building plans are sanctioned, mere development as per the layout plan does not justify invoking of provisions of section 80IB(10) of the Act.
21. We have heard the rival contentions and perused the record. The issue arising in the present appeal before us is in relation to the claim of deduction under section 80IB(10) of the Act. The section provides certain conditions, on fulfillment of which, the assessee is entitled to claim deduction against the profits arising from the development, construction and sale of housing project. The amended provisions of section 80IB(10) of the Act lays down that the housing project should be constructed on a plot of land having minimum area of one acre. Thereafter, conditions are laid down to complete the project within specified time limit and also the limits are provided in respect of constructed area of each of the tenements or units to be constructed in the aforesaid housing project. Further, by an amendment w.e.f. 01.04.2005 clause (d) to section 80IB(10) of the Act has been inserted, under which there is a restriction in respect of commercial area to be built within housing project. The provisions of section 80IB(10) of the Act have been subjected to various judicial reviews and various propositions have 21 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
been laid down by different Courts and even the Hon'ble Supreme Court on this aspect.
22. The Hon'ble Bombay High Court in CIT Vs. Vandana Properties (2013) 353 ITR 36 (Bom), while deciding the issue of availability of deduction under section 80IB(10) of the Act, where a new housing project is constructed on a plot of land having minimum area of one acre but with existing housing projects in the city of Mumbai, held that on a plot of land having minimum area of one acre, there can be any number of housing projects and so long as those housing projects are approved by the local authority and fulfill the conditions set out under section 80IB(10) of the Act, the deduction thereunder cannot be denied to those housing projects". It was further held that section 80IB(10) of the Act while specifying the size of plot of land does not specify the size or the number of housing projects that are required to be undertaken on a plot having minimum area of one acre. The Hon'ble Bombay High Court held that as a result significance of size of plot of land is lost and therefore the assessee subject to fulfilling other conditions, becomes eligible to section 80IB(10) of the Act deduction on construction of housing project on a plot having minimum area of one acre irrespective of the fact that there existed other housing projects or not.
23. The Hon'ble Supreme Court in CIT Vs. Sarkar Builders (2015) 277 CTR 301 (SC) was abreast of the issue of restriction imposed by clause (d) to section 80IB(10) of the Act in respect of commercial space in a housing project. The Hon'ble Supreme Court observed that section 80IB(10) of the Act stipulates certain conditions which are to be satisfied in order to avail the benefit of said provisions. Further, it was held that the benefit was available to those undertakings which are developing and building housing projects approved by a local authority. The section was applicable in respect of housing projects but at 22 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
the same time, certain commercial establishments and shops were held to be needed even in the housing project. The extent of commercial area which could be constructed earlier was as per local laws, under which the local authority gave the sanctions to the housing projects. The Hon'ble Supreme Court thus, further held that however vide clause (d) which was inserted and made effective from 01.04.2005, it was stipulated that the built up area of the shops and commercial establishments in the housing projects would not exceed 5% of aggregate built up area of housing project or 2000 sq.ft., whichever was less.
24. It was noted by the Apex Court that the Hon'ble Bombay High Court in CIT Vs. Brahma Associates (2011) 333 ITR 289 (Bom) held that since the expression 'housing project' was not defined under the Act, the intention of Parliament was that whatever was approved by local authority under the Rules as a housing project would be treated as housing project under section 80IB(10) of the Act, since the sub-section (10) itself mandates that housing project is to be approved by local authority which was a necessary condition for claiming deduction under the said provision. The Hon'ble Supreme Court further held when the local authority has approved a housing project, whether residential or residential cum commercial, the assessee is entitled to the deduction on the entire profits including the commercial establishments portion. The next proposition addressed by the Hon'ble Supreme Court was that after insertion of clause (d) to sub-section (10) by the amendment which was effective from 01.04.2005, where even if the local authority had sanctioned a larger area for shops and commercial establishments, the benefit of section 80IB(10) of the Act would not be admissible to the assessees / developers, in case the area used for shops and commercial establishments exceeded 5% of aggregate built up area of housing or 2000 sq.ft., whichever was less. The Hon'ble Supreme Court 23 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
further held that the amendment was prospective in nature and would operate from 01.04.2005.
25. The Hon'ble Supreme Court further referred to various amendments carried out to sub-section (10) to section 80IB(10) of the Act from time to time and noted the changes brought in to section 80IB(10) of the Act and also noted that significant amendment was carried out by the Finance (No.2) Act, 2004 w.e.f. 01.04.2005, several new conditions were incorporated for the first time including the conditions mentioned in clause (d) which was not on the Statute Book earlier when the projects were sanctioned. The Hon'ble Supreme Court further noted that another important amendment by this Act to sub-section (14) to section 80IB(10) of the Act w.e.f. 01.04.2005 and clause (a) was inserted in section 80IB(14) of the Act defining the words 'built-up area' to mean the inner measurements of residential units at the floor level. including the projections and balconies, as increased by thickness of walls, but did not include common area shared with other residential units. The Hon'ble Supreme Court further observed that in order to avail the benefit in assessment years after 01.04.2005 holding that the balconies should be removed though these were permitted earlier would lead to absurd results as one cannot expect an assessee to comply with a condition which was not part of Statute when housing project was approved.
26. The Hon'ble Supreme Court in CIT Vs. M/s. Veena Developers with SLP(C) No.24329/2011 along with bunch of appeals including the appeal against order of Hon'ble Bombay High Court in CIT Vs. Brahma Associates (supra), deliberated upon the aforesaid issue of grant of deduction under section 80IB(10) of the Act i.e. provisions which stood prior to 01.04.2005. The issue before the Hon'ble Apex Court was whether within housing project, if some commercial activity was also undertaken, whether such projects were eligible for 24 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
claim of deduction under section 80IB(10) of the Act. The Hon'ble Apex Court held that where section 80IB(10) of the Act very categorically mentioned such project which is undertaken as housing project is approved by local authority and once the project is approved by local authority, it is to be treated as housing project. The Hon'ble Supreme Court further clarified that housing project should be as per Development Control Regulations. The Hon'ble Supreme Court also noted another aspect of the issue that where the project was cleared as residential plus commercial project, the Hon'ble Apex Court held that the commercial user which is permitted alongwith the residential units and that too as per DCR and the same is said to be project as predominantly housing / residential project and is entitled to the deduction under section 80IB(10) of the Act. Further, the Hon'ble High Court held that for the projects up to 31.03.2005, the deduction under section 80IB(10) of the Act would be allowable where the projects are approved by local authority having residential buildings with commercial user and not restricted to 10% of total built up area of the plot. It also approved the order of Hon'ble High Court that deduction under section 80IB(10) of the Act was to be allowed to the project as a whole and there was no justification in restricting the said deduction only to part of project. Further, it was held that clause (d) inserted w.e.f. 01.04.2005 was prospective and not retrospective and hence, could not be applied for projects prior to 01.04.2005.
27. The Hon'ble High Court of Madras in Ravi Appasamy Vs. ACIT (supra) while interpreting the pre-condition for benefit of section 80IB(10) of the Act by the housing project, whether the assessee had commenced the development and construction on or after 01.10.1998, noted that the steps taken to remove the hut dwellers, digging of bore wells, getting electricity connection, putting up compound walls and security cabins, etc. were part of development activity but it was not correct to interpret such activity to be composite activity of development 25 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
and construction of housing project. The Hon'ble High Court held that the words of Statute have to be interpreted without taking an extraneous aid for definition of expression 'development'. It was further held by the Hon'ble High Court that the requirement under section 80IB(10) of the Act was twin requirement, which speaks both about development and construction of the housing project. It was further held that conjunction between development and construction, by the use of word "and", cannot be made a dead letter, by applying the definition of the expression "development" to the phrase "development and construction". The Hon'ble High Court held that the expenses incurred by the assessee in removing the hut dwellers, digging of bore wells, getting electricity connection, putting up compound walls and security cabins, etc. have all been taken by the Tribunal to be part of construction activity and accordingly, pre-pone date of development and construction. The Hon'ble High Court held that where the actual date of commencement of construction was 15.10.1998, the correct interpretation is to be then offered to the composite expression 'development and construction' of the housing project and hence, the conditions of section 80IB(10) of the Act were held to be fulfilled.
28. The Pune Bench of Tribunal in Nirmiti Construction Vs. DCIT (supra) while answering an issue of allowability of deduction under section 80IB(10) of the Act for such housing projects which had commenced development and construction after 01.10.1998, observed that the activities i.e. approval of plan, marking for booking the residential units, availing of finance, receipt of advance booking money, etc. could not be construed to mean the commencement of development and construction of housing projects. Where the agricultural land acquired by the assessee was converted into non-agricultural land on 30.01.1999 and where building plans were sanctioned by the Municipal Corporation on 23.07.1999, it was held that the development and construction of housing project had 26 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
commenced after 01.10.1998 so as to qualify for deduction under section 80IB(10) of the Act notwithstanding incurring of expenses on cleaning of land, for Puja before 01.10.1998. The Tribunal held that the expenses do not indicate that the development and construction of housing project had commenced before 01.10.1998. It was further held that there is no material on record to show that the assessee had made any material change on the land before first October, 1998. The Tribunal further observed that since the assessee had fulfilled the remaining conditions under the law for claiming deduction under section 80IB(10) of the Act, the same was to be allowed to the assessee.
29. The Pune Bench of Tribunal in DCIT Vs. Aditya Developers in ITA Nos.791 & 792/PN/2008, relating to assessment years 2003-04 & 2004-05, vide order dated 30.01.2012 had laid down the proposition that the layout plan and building plans were not one and the same thing. It was held that the date of approval of layout plan by the Municipal Corporation cannot be the date of approval of building plan to verify the eligibility to claim deduction under section 80IB(10) of the Act.
30. The Hon'ble High Court of Madras in CIT Vs. Arun Excello Foundations (P.) Ltd. (2013) 29 taxmann.com 149 (Madras) had laid down the proposition that where the housing project has both commercial and residential units, then proportionate deduction to the extent of compliance of provisions of section 80IB(10) of the Act is allowable. The Hon'ble High Court held that question of disallowance would arise only if and when the residential flats are beyond the limits provided under section 80IB(10) of the Act and not otherwise. The relevant findings of the Hon'ble High Court were as under:-
"40. Thus, in the face of the clear provisions and going by the strict construction, one cannot read any limitation into the expression "housing project"
to mean residential project alone and that if and when the projects have mixed 27 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
built-up area of commercial and residential, the question of disallowance will arise only if and when the residential flats are beyond the limit as provided under sub-clause (c) of section 80IB(10) and not otherwise. Even herein, the disallowance could be only proportionate to the extent of units in violation of the area prescribed under clause (c). In a pure commercial housing project, the question of applicability of sub-clause (c) does not arise at all."
31. Now, coming to the facts of the present case, the assessee has filed exhaustive events chart, under which various transactions relating to the acquisition of the plot of land by the assessee from original landholder and also dispute created by the original landholder by selling the same piece of land to another person are tabulated herebelow:-
Sr. Date of Type of Property Brief contents of Page No. Page No. No Agreement document Survey No documents From To 1 13/03/1986 "Sathe Khat" 66 Agreement for sale 195 205 between Kedari family & Mr. Vilas parmar 1A (free Translation) 206 208 2 16/01/1988 "Sathe Khat" 65 Agreement for sale 209 219 between Kedari family & Mr.Vilas Parmar 2A (Free Translation) 220 222 3 07/04/1989 "Puravani Karar" 65 & 66 Supplementary agreement 223 231 between Kedari family & Mr. Vilas Parmar for increase in the consideration for agreements at Sr.No. and 2 3A (Free Translation) 232 234 25/03/1995 Assignment Deed 65 & 66 Between Kedari Family & (Not Available) Mr.Sharda Shelters 4 14/04/1995 Advocate Notice 66 & 65 Declaration that the said 235 237 published in local lands are sold to Vilas MARATHI Parmar and that any other newspaper persons buying same land will be illegal 4A (Free Translation) 238 238 5 19/04/1995 Complain to Stating that unauthorized 239 239 police station by persons are creating Vilas Parmar temporary structures on our land and they are also filling the water well with sand / dubber 5A (Free Translation) 240 240 6 21/04/1995 Notice from the Notice given by police 241 241 police station authorities to all the parties, regarding the i.e. Parmar properties and disputes Sharda Group (Mr.APD, Partner, Sharda Shelters).28 ITA No.234/PUN/2009 ITA No.569/PUN/2009
M/s. Parmar Properties Pvt. Ltd.
It is stated that considering the disputes, ensure status quo and do not disturb peace and create any disturbance.
6A (Free Translation) 242 242
7 24/04/1995 Petition filed 66 * 65 Petition filed seeking Court 243 246
before Honorable INJUNCTION and giving
Civil Court warning to Kedari not to
create any obstacles over
possession of both lands
7.1 25/04/1995 Injunction order Directing to Kedari not to 246 249
passed by create any disturbances in
Honorable Civil possession of Vilas Parma
Court over the both land.
7A (Free Translation) 250 251
8 13/06/1995 MOU 65 & 66 i) S.no.65 allocated to 252 254
(Memorandum Of Sharda Group
Understanding) ii) S.no.66 allocated to
between Sharda Vilas Parmar
and Parmar iii) Accordingly, the parties
may retain the possession
iv) Suits shall be
withdrawn by both the
parties
9 18/03/1996 Cancellation 65 As per above MOU 255 263
Deed Parmars rights in this land
are cancelled.
9A (Free Translation) 264 265
10 20/03/1996 Cancellation 66 As per the above MOU, 266 273
Deed Sharda's rights in this land
are cancelled
10A (Free Translation) 274 276
11 20/03/1996 Development 66 That Sharda Group has left 277 300
Agreement rights on Sr.no 66 and
Parmars have left rights in
Survey No.65.
Hence, this new
Development Agreement
(between Parmar
Properties & Kedari Family
and others)
11A (Free Translation) 301 302
32. The assessee claims that in view of the above said scenario, it had to file a petition before the Civil Court, wherein an injunction was passed on 25.04.1995, under which the original landholder Mr. Kedari's family was directed not to create any disturbance in the possession of the assessee. Consequent thereto, on 13.06.1995, a memorandum of understanding was reached between 29 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
the interested parties, who had separately negotiated with the original landholder and as per the understanding, survey No.65 was executed to the other party i.e. to Sharda group, survey No.66 was allocated to the assessee before us. Consequent thereto, certain other documents were made and new development agreement was executed on 20.03.1996 between Kedari's family and other and Parmar properties in respect of survey No.66. As tabulated hereinabove, all these documents are placed in the Paper Book as listed above.
33. Now coming to the second part of events chart i.e. vis-à-vis sanction obtained by the assessee for layout plants, the revised layout plan and the building plans, its commencement and completion. The tabulated events chart reads as under:-
Sr.No Date of Type of document Property Brief contents of documents Page Page Agreement Survey No. No. No From To 12 01/08/1996 Commencement 66 Mentioned in certificate at 303 304 Certificate condition no 12 That the certificate is valid for 1 year.
13 Extracts of MRTP Section 45 The said is valid for 305 306 Act one year from the date of receipt. 14 01/08/1996 First Layout 66 Land Layout approved. All 307 307 sanctioned probable use of the land confirmed. 15 30/12/1996 NA Order 66 Non Agriculture use of the said 308 309 land permitted now. Also permitted construction of buildings on the said land, s.t. PMC permission, etc. 16 11/08/1997 Letter to PMC for 66 Stating that all the 310 312 delay in sanction compliances done regarding of building plans the issue raised by PMC. Yet, considering some frivolous old complaints, the building plans not sanctioned 17 16/09/1997 Letter from Stating that not to start any 313 313 Architect Mr. development work till the Laxman Thite sanctioning of plans 18 04/04/1998 Development 66 Agreement between Parmar 314 328 Agreements with Properties Limited & Jijaba new land owners Pandurang Jadhav and others on S. No. 66 at giving rights in the said Rs.410,000/- Property and also permitted to demolish old structure. 18A (Free Translation) 329 329 30 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd. nd 19 24/06/1998 Revised (2 ) 66 Land Layout approved. All 330 330 Layout sanction probable use of the land by PMC confirmed. 19.1 24/06/1998 Commencement 66 Additional condition: Existing 331 332 Certificate structure should be demolished. 20 30/11/1998 Letter to PMC Company stated that - 333 337 pointing out the i) Fresh demarcations of creeping delay in boundary are already sanction of submitted building plans ii) That the Company is ready to do joint demarcation with Kedari (land lord) 21 19/12/1998 Commencement 66 Various conditions stated 338 338 certificate (such as follow DC Rules, Ensure road alignments, plant four trees, debris to be cleared, etc.) 22 16/07/2002 Part Completion 66 Flats Completed 339 339 certificate B-1: 5-10, 13-23, 25, 26,29,32 (total ---) C-1: 5-8 (total ---) C-2: 1-2 = 2 Total 27 Flats 22A (Free Translation) 340 340 23 20/03/2003 Final Completion 66 Flats completed 341 341 certificate B-1: 1,3,4, 11-12, 24,28,30- 31, 33-36 = 13 B-2: 37 - 61, 63 - 72= 35 B-3: 73-97, 100-108=35 A-1: 109-133, 135-142=33 109A- 133A, 135A-142A = 33 C-1: 1-4 = 4 C-2: 3-8 = 6 C-3: 1-6 = 6 Total = 165 23A (Free Translation) 342 342 24 04/03/2006 Letter from PMC 66 a) That in B-1 building, due to 343 343 regarding internal the internal changes, flats changes in flats no.1, 1A & 2 are converted into office. b) That in A-1 building (i.e. TULIP), 2 flats are merged into 1 and on every floor, instead of 8 flats, only 4 flats are made out c) That in C-1 & C-2 building, 8 flats made out in 4 flats d) That in C-3 building, flat nos. 1+2 & 3+4 are merged, internal changes made and the same is used commercially and rented out to a computer 31 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd. company for commercial use. e) Society office made in Parking without PMC permission. f) Construct as per plans else appropriate action will be taken. g) Else, make a RECORD plan and get the above changes marked in RECORD PLAN and get the same sanctioned / approved. f) Also pay fines & development charges for changes made in actual construction 24A (Free Translation) 344 344 25 10/03/2006 Reply Letter to 66 Adherence of all the 345 345 PMC compliance as per PMC and if required, will make the changes.
34. The assessee received commencement certificate which is dated 01.08.1996, which in fact is the sanctioning of layout plan. The perusal of the said certificate issued by the PMC, Pune, placed at pages 303 and 304 of the Paper Book reflects that various conditions were laid down in order to develop the plot of land which relate to the plotting of the land, sub-plotting, laying of roads and water lines, drainage, provision of septic tanks and also the development plan road i.e. DP road passing through the land to be demarcated.
As per clause 12, certificate was valid for a period of one year commencing on the date of its issue. Further, as per clause 18, it is provided that the PMC would not be held responsible regarding plot boundaries, ownership, access, etc. if it arises in future. As per clause 19, area under H.C.M.T.R. Ring Railway and 40'
- wide DP road should be handed over to the PMC before asking building permission. The additional FAR for 40' DP road should be granted only after the same is handed over to the PMC free of cost. As per clause 20, corrected ULC order was to be produced before plinth checking and up to date Tax NOC should be produced in A.E.D.P before asking building permission. The perusal of the 32 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
above said certificate reflects that the said permission granted by the PMC, Pune is not a building permission, it is a layout plan issued to the assessee to carry out certain basic activities and provide facilities and receive various permissions before asking for building permission. The perusal of plan which is annexed to the said commencement certificate which is placed at page 307 of Paper Book, very clearly mentions it to be a layout plan. Where the area of the land lays reservations are provided in the area statement of plot and balance area available for development of 8124 sq.mtrs.; undoubtedly, the project is mentioned as proposed building layout of survey No.66A, H.No.2/A/2B/1, Wanawadi, Pune. The perusal of said plan reflects the area calculation for H.C.M.T.R road Ring Railway, play ground, DP road and also FSI statement for various buildings and the area to be occupied. Further, it provides the plan for division of area available for development, but does not provide any structural or engineering plans for buildings to be constructed.
35. The assessee on 30.12.1996 received NA permission i.e. conversion of agricultural land into non-agricultural land, copy of which is placed at pages 308 and 309 of the Paper Book. As pointed out earlier, the commencement certificate for the layout plan was issued on 01.08.1996 and the same was valid for period of one year, that means all conditions laid down therein had to be complied with by 31.07.1997. However, the learned Authorized Representative for the assessee stated that for some reason or the other, the conditions could not be fulfilled within that period. Our attention was drawn to the communication sent to the PMC by the assessee on 11.08.1997, wherein it is mentioned that building proposal is pending for some reason or the other, wherein there is some dispute had been raised by the neighbours about the ownership of land. The said letter was filed in the office of PMC on 13.08.1997. The next communication is dated 16.09.1997, which is a letter from the Architect 33 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
addressed to the assessee, wherein it was categorically stated that the plans from PMC have not been sanctioned and all the necessary drawings would be prepared only after sanctioning of the plans. The assessee was also requested not to start any development work on site. The copy of the said letter is placed at page 313 of the Paper Book. As per the assessee, the said document was impounded during the course of Survey. The next communication which is referred to by the assessee is the development agreement with the land owner of piece of land, wherein for consideration, the rights in the said property were acquired and along with permission to demolish old structure. The copies of the said documents are placed at pages 315 to 328 of the Paper Book. The ownership rights in the said piece of land were transferred for sum of Rs.4,10,000/- and the consent was given to demolish old construction. The assessee thereafter, received a revised layout sanction from the PMC dated 24.06.1998, copy of which is placed at pages 331 and 332 of the Paper Book. As per the revised layout of building sanction, the conditions as in the earlier layout sanction are same i.e. provision of colony roads, water lines, drainage and also the road to demarcation and sub-plotting of land. It is also one of the conditions to provide the development plan road passing to the land. The said commencement certificate also was valid for one year from the date of issue and as per clause 13, commencement certificate cancels all previous sanctions. Further, the other conditions of marking the area for HCMTR, Ring Railway before asking for building permission and also availing additional FAR against HCMTR Ring Railway area, corrected ULD order and upto date Tax clearance to be submitted before asking for building permission. One more clause which was in the revised plan was that the existing structure should be demolished before starting any development. The layout plan is also annexed, wherein it is mentioned that it is DP layout plan which makes the calculations and area statement under which the balance area which is available for development of 34 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
plot is worked out at 8124.93 sq. mtrs. and all the conditions are also mentioned in the plan itself.
36. The above said clearly establishes that till date 24.06.1998, the assessee had not received the building plans but conditions were laid upon the assessee to carry out certain activities of clearance of the land and plotting of the land and also making the provisions for colony roads, water lines, drainage, etc. The said layout plan also lays down that the development work would not start unless peripheral permanent fencing is constructed on site. One of the conditions laid down by the PMC was that existing structure should be demolished before starting any development. In this regard, the assessee wrote a letter to the PMC on 30.11.1998, wherein it was pointed out that the demarcation of property from the City Survey Officer had been submitted and a request was made to sanction the building plans of C1, C2 and C3 buildings. The assessee further received another commencement certificate No.2098, dated 10.12.1998 from the Pune Municipal Corporation, Pune, which is the sanctioning of building plans along with list of conditions to be complied with by the assessee. The copy of said commencement certificate is placed at page 334 of the Paper Book along with English transaction at page 338 of the Paper Book. The list of conditions which are imposed while granting the commencement certificate for undertaking the building construction are at variance to the earlier conditions being imposed while sanctioning the layout plan. The list of terms and conditions are as under:-
1. You have to make construction as per revised development plan of govt. of Maharashtra dated 05/01/1987.
2. Construction is to be carried out as per attached plans.
3. Construction upto plinth work is to be get checked by the office of the construction department of PMC. No further work should be carried out without the checking.
4. This permission has been given on the condition that road alignments is to be get checked from the office of the Assist Engineer (Lands).
5. This permission is being given at the back of the plans.
6. Before asking for the completion certificate , the owner of the plot should plant 4 trees within the compound wall & should take proper care of the same.35 ITA No.234/PUN/2009 ITA No.569/PUN/2009
M/s. Parmar Properties Pvt. Ltd.
7. Before giving completion certificate all the debris should be cleared from the public road & within the compound of the building.
8. Before starting the work, permission should be obtained from assistant engineer (Drainage & Water) by submitting necessary plans.
9. Before starting the work is there are trees on the land the same should not be cutoff without the permission of the tree authority.
10. Even if permission is given for septic tank necessary permission should be obtained from the assistant city engineer (Drainage) after submission of necessary plans.
11. You have to start the new construction work only after clearing the existing structure on the lands.
12. Applicant will only be responsible for NA, disputes in the land or land rights.
37. The said permission given by the PMC for construction of proposed building at the site of the assessee, which was given vide Certificate No.2098, dated 19.12.1998. All the earlier communications which are also called commencement certificate were for the layout of plot and are separate and distinct from the commencement certificate issued by the PMC for construction of the building. The assessee has been given the permission to construct the buildings which were plotted as per the layout plans. Accordingly, we hold that where the assessee has got permission on 19.12.1998 to construct the building, then the assessee has fulfilled the basic conditions laid down in section 80IB(10) of the Act in order to avail the benefits of the said section; since the deduction under the said section is available to such projects which commenced construction on or after 01.10.1998. The previous commencement certificates were in respect of layout plan of the said project and are at variance with the commencement certificate issued for construction of building and in such circumstances, it could not be held that the assessee had received the permission to construct the building prior to 01.10.1998 and hence, was not eligible for claiming the deduction under section 80IB(10) of the Act. We find no merit in the orders of authorities below in this regard. We hold that where the permission has been granted to the assessee for the first time for constructing the building vide commencement certificate No.2098, dated 19.12.1998, the 36 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
assessee fulfils the basic conditions of starting the project on or after 01.10.1998 and hence, is eligible to claim the deduction under section 80IB(10) of the Act.
38. Now, coming to the second aspect of denial of deduction under section 80IB(10) of the Act to the assessee, wherein the case of authorities below was that the assessee had incurred certain expenses which are on account of several activities including payment of land development charges, Architect fees, MSEB, bore well drilling charges, designing and development of press advertisements and the advertisement charges, designing of brochures and also purchase of GI sheets, bricks, water storage tanks, etc and also invitation cards for Bhoomi Puja. The list of expenses date-wise are tabulated at pages 25 and 26 of the order of CIT(A) and we make reference to the same for adjudicating the issue. The perusal of expenses reflects that these are the preliminary expenses which have been incurred by the assessee in view of various conditions laid down for passing of layout plan. Undoubtedly, the first layout plan was sought by the assessee on 01.08.1996 and the expenses except the charges of PMC are incurred thereafter. The above said expenses incurred by the assessee are to make the land ready for construction and were necessitated because of the conditions laid down by the PMC. The advertisement expenses also are before start of construction. Where the assessee had already incurred expenditure on acquisition of cost of plot of land which in turn, was to be utilized for building the housing project purpose, the expenditure of Rs.3,680/- incurred for Bhoomi Puja does not justify the conclusion of authorities below that the building plans have been sanctioned. The conclusion drawn by the Assessing Officer and the CIT(A) that the advertisement and invitation cards for Bhoomi Puja in 1997 are rituals which are normally conducted before commencement of construction activity does not establish that the construction activities started thereafter itself. The assessee had further received certain advances from the buyers and such 37 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
receipt vouchers were impounded during the course of Survey. However, the assessee has clarified that as the project did not take off, the said advances were returned. The Revenue has not brought on record anything to contrary. The Assessing Officer and the CIT(A) thereafter refers to the commencement certificate issued by the PMC on 01.08.1996 which mentions that the permission is granted to carry out the development of survey No.66 with plan, is subject to the following conditions. The conclusion of the authorities below is that the assessee had received permission for development on 01.08.1996, which is ironic that the authorities come to conclusion that the assessee had received the so-called permission on 01.08.1996 i.e. on the date when the land in question was an agricultural land. The NA permission for the said land was received from the Collector, Pune office on 30.12.1996 which is placed at pages 308 and 309 of the Paper Book. This NA permission received on 30.12.1996 is admittedly, a pre-requisite for the development and construction of any land and it makes the land ready for construction activity. However, the activity to construct would only happen once the permission is received by the assessee i.e. building plan commencement certificate. The authorities below have also referred to certain communication of the Architect that the development had started prior to 1998 and the site visits on 01.08.1997 and 25.08.1997 which as per authorities below is the factum of commencement in addition to excavation and construction of roads prior to 01.04.1998. The above said stand of authorities below gets demolished by the revised layout plan issued by the PMC on 24.06.1998 which admittedly, is an approval for layout of the land. The said commencement certificate clearly mentions that it is valid for a period of one year, under which all the terms and conditions mentioned in the commencement certificate have to be complied with by the assessee. It also mentions that earlier sanction granted if any, is cancelled meaning thereby that even if certain sanction was given by the PMC, the same stands cancelled by the revised layout commencement 38 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
certificate issued on 24.06.1998. Accordingly, the stand of authorities below in respect of activities carried on prior to that date does not stand. We have already held in the paras hereinabove that there is distinction between the layout sanction and the building sanctioned plan and in the case of assessee, commencement certificate dated 19.12.1998 is the sanction granted by the local authority to construct the building and the date of start of project is dated 19.12.1998, which falls within pre-conditions laid down in section 80IB(10) of the Act and hence, the assessee is eligible to claim the deduction.
39. Now, coming to the next aspect of denial of deduction to the assessee by the Assessing Officer and confirmed by the CIT(A) is that the assessee has (a) not constructed the units as per sanctioned building plan; (b) the area of residential flats constructed by the assessee is more than 1500 sq.ft.; ànd (c) many flats have been merged together and the total area of the flats is more than 1500 sq.ft. and also the assessee has violated the conditions of the building plans sanctioned by converting the residential units into commercial units and consequently, occupying the area more than 1500 sq.ft. The perusal of orders of Assessing Officer and the CIT(A) would show that extensive exercise has been carried out by them to establish the violation of building B1 and C3, wherein there is violation of not only usage but also the area occupied. The learned Authorized Representative for the assessee at the outset pointed out that despite the stand of assessee before the authorities below, but the assessee is withdrawing its claim of deduction under section 80IB(10) of the Act in respect of B1 and C3, the assessee has agreed that the total area on merger was more than stipulated area of 1500 sq.ft. and hence, the assessee was not entitled to claim the aforesaid deduction. In the first instance, where the assessee has withdrawn is claim, the same stands decided against the assessee. However, the next aspect of the same issue is that the authorities below are of the view 39 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
that since the assessee has violated building plans in making the aforesaid construction, hence, the assessee should be denied the deduction under section 80IB(10) of the Act. First of all, while deciding the issue of grant of deduction under section 80IB(10) of the Act, the role of authorities of Income Tax is to see whether the conditions laid down in the Act are satisfied. The violation, if any of merging the flats and having area more than the sanctioned area and also change in usage of portion is to be looked into by the said authorities who are the sanctioning authorities. The violation of increasing the area of flats by merging two or more units justify the denial of deduction under section 80IB(10) of the Act in respect of that area but it does not justify the denial of deduction to the balance residential units which have been constructed by the assessee within parameters provided in the section. Accordingly, we hold so. Further, it may be pointed out that there is mechanism provided that the said authorities wherein after sanctioning of the plans, in case any internal changes are made, then the assessee can seek regularization of such change by paying extra cost to the state authorities. The assessee has pointed out that in the first instance, it has received completion certificate for different flats constructed by it; first on 16.07.2002 and second on 20.03.2003, which are placed at pages 339 to 342 of the Paper Book. Further, the assessee has also referred to the letter from the PMC regarding internal changes in flats, wherein the assessee was directed to make record plan and get the above changes, mark in record plan and get the same sanctioned / approved and also pay fines and development charges for changes made in actual construction. The said communication dated 04.03.2006 is placed at page 343 of the Paper Book along with reply of the assessee dated 10.03.2006 to the PMC for adherence of all the compliances as directed by the PMC and if required to make the changes.
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M/s. Parmar Properties Pvt. Ltd.
40. In the totality of the above said facts and circumstances, the question which arises is whether the assessee has deviated from the sanctioned building plans and had constructed the flats having area more than 1500 sq.ft. or change the usage of sanctioned flats from the residential to commercial, we hold that the assessee is entitled to claim the deduction in respect of such flats which fulfill the conditions laid down in section 80IB(10) of the Act i.e. having residential use and having total area of 1500 sq.ft. within boundaries of the flats. Merely because the assessee has merged flats but in case the area of merged flats is within prescribed limit of 1500 sq.ft., then such flats are eligible for deduction under section 80IB(10) of the Act and in this regard of merger of flats, there is mechanism provided by the municipal authorities, wherein suitable fines and fees are levied after the assessee submits the record plans. Similar issue of combination of flats and entitlement to deduction to flats if the area of combined flats was within the prescribed limit of 1500 sq.ft. has been decided in following cases of various Benches of Tribunal and we place reliance on the same:-
a) Kura Homes P. Ltd. Vs. ITO reported in 139 ITD 445 (Hyd)
b) ITO Vs. Ashray Premises P. Ltd. reported in 54 SOT 209 (Mum)
c) ITO Vs. Siddhivinayak Homes in ITA No.8726/MUM/2010
d) Kasturi Housing & Construction P Ltd. Vs. ACIT in ITA No.1370/PN/2007
41. Even if the assessee has made extra construction than the approval received from the local authority, then such extra construction has to be looked into by the municipal authorities and the Income Tax authorities are to ensure that the conditions laid down under section 80IB(10) of the Act are fulfilled in respect of such flats for which the said deduction is to be allowed. Where the area of flat is more than 1500 sq.ft., the assessee is not entitled to the deduction, having not fulfilled the conditions of said section. In this regard, we place reliance on the ratio laid down in Bangalore Bench of Tribunal in ITO Vs. Mahaveer Calyx (supra).
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M/s. Parmar Properties Pvt. Ltd.
42. Another aspect of the issue is the usage i.e. extra commercial usage as against sanctioned commercial usage. Again this facet is to be looked into by State Authorities. The assessee before us has not claimed deduction on account of units of commercial usage.
43. The last aspect of the issue raised in the present appeal is the area of flat. The deduction claimed under section 80IB(10) of the Act has been denied to the assessee for violation of conditions of clause (c) of section 80IB(10) of the Act i.e. built up area. Various facets have been looked into by the authorities below i.e. joining of flats, row-houses, statement recorded of the purchasers, etc. The Assessing Officer also directed the DVO to inspect and submit a report of the built up area. The DVO on the basis of building plans and without physical verification in assessment year 2003-04 gave a report that the built up area of the flats was more than 1500 sq.ft. The DVO also considered the sale agreements executed by the assessee with the intended purchasers. The explanation of the assessee in this regard was that the sale agreement talk about the super built up area i.e. the saleable area which is different from the covered area. It was also stressed by the assessee before the Assessing Officer that the DVO had not carried out any physical verification exercise by way of physically verifying the area within boundaries of individual residential flats whether merged or not. The claim of assessee was that except for B1 and C3, all the other units were fulfilling the conditions of being less than 1500 sq.ft. The Assessing Officer did not accept the plea of assessee in the instant assessment year and held the assessee to have violated the conditions of clause (c) of section 80IB(10) of the Act and denied the deduction to the assessee. Similar plea was made by the assessee in the succeeding year i.e. assessment year 2004-05 and the Assessing Officer directed the same DVO to file physical verification report of the constructed residential flats. The DVO has submitted 42 ITA No.234/PUN/2009 ITA No.569/PUN/2009 M/s. Parmar Properties Pvt. Ltd.
the report, under which it is reported that the area of flats was less than 1500 sq.ft. However, the CIT(A) did not adopt the said report since in the preceding year, this issue was decided against the assessee.
44. The learned Authorized Representative for the assessee before us has pleaded that physical verification exercise of measurement of flats i.e. within boundaries of the flats and not the super built up area can be verified by the Assessing Officer by directing the DVO and after the verification, the claim of assessee may be looked into and decided on the basis of said verification. In the totality of the above said facts and circumstances of the case and because of conflicting reports of DVO in the two years i.e. assessment years 2003-04 and 2004-05, we find merit in the plea of the assessee. As per the provisions of the Statute in the relevant years, it is the area within four boundaries which has to be taken into consideration and if the same is up to 1500 sq.ft., then the assessee is entitled to avail the deduction, in case it exceeds 1500 sq.ft., then the deduction to such units can be denied. The denial of deduction under section 80IB(10) of the Act is unit-wise. In other words, the assessee is entitled to prorata deduction under section 80IB(10) of the Act in respect of all those residential units which fulfill the conditions laid down in the section of having built up area of 1500 sq.ft. Accordingly, the Assessing Officer is directed to verify the claim of assessee through the DVO and after affording reasonable opportunity of hearing to the assessee. The Assessing Officer is also directed to allow prorata deduction under section 80IB(10) of the Act to the assessee in respect of such units which fulfill the conditions. All the other units which do not fulfill the conditions of area of 1500 sq.ft. are not entitled to the said deduction. We hold so. The tenements in B1 and C3 building admittedly, have not fulfilled the conditions and are not eligible for deduction. Accordingly, grounds of appeal raised by the assessee vis-à-vis deduction claimed under section 80IB(10) of the Act are partly allowed. 43 ITA No.234/PUN/2009 ITA No.569/PUN/2009
M/s. Parmar Properties Pvt. Ltd.
45. The facts and issue in ITA No.569/PUN/2009 are identical to the facts and issue in ITA No.234/PUN/2009 and our decision in ITA No.234/PUN/2009 shall apply mutatis mutandis to ITA No.569/PUN/2009.
46. In the result, both the appeals of assessee are partly allowed.
Order pronounced on this 22nd day of March, 2017.
Sd/- Sd/-
(ANIL CHATURVEDI) (SUSHMA CHOWLA)
लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER
nd
पुणे / Pune; दनांक Dated : 22 March, 2017.
GCVSR
आदे श क( ) त*ल+प अ,े+षत/Copy of the Order is forwarded to :
1. अपीलाथ / The Appellant;
2. यथ / The Respondent;
3. आयकर आयु'त(अपील) / The CIT(A)-II, Pune;
4. आयकर आयु'त / The CIT - II, Pune;
5. *वभागीय -त-न.ध, आयकर अपील य अ.धकरण, पुणे " ए / DR "
'A', ITAT, Pune;
6. गाड3 फाईल / Guard file.
ु ार/ BY ORDER,
आदे शानस
स या*पत -त //True Copy//
सहायक पंजीकार / Assistant Registrar,
आयकर अपील य अ.धकरण, पुणे / ITAT, Pune