Income Tax Appellate Tribunal - Pune
Ito, Ward 8(4), Akurdi, Pune, vs Assessee on 17 April, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
Before Shri Shailendra Kumar Yadav, Judicial Member,
and Shri R.K. Panda, Accountant Member.
ITA.No.498/PN/2012
(Assessment Year 2008-09)
Income Tax Officer,
Ward-8(4), Akurdi, Pune
.. Appellant
Vs.
M/s.Yash Promoters and Builders,
Shop No.14, Mhada Complex,
Sant Tukaram Nagar, Pimpri,
Pune.
PAN No. AAAFY 5813H .. Respondent
Assessee by : Sri Nikhil Pathak
Revenue by : Sri Mukesh Verma
Date of Hearing : 17-04-2013
Date of Pronouncement : 17-04-2013
ORDER
PER SHAILENDRA KUMAR YADAV, JM:
This appeal has been filed by the revenue against the orders of CIT(A)-V, Pune on following grounds :
"1. On the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the road acquisition area is to be considered as part of area of the plot for calculation of minimum 1 acre of area for claiming deduction u/s.80IB(10) of the Income Tax Act, 1961.
2. On the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred while interpreting the CBDT Circular No.5 of 2005, dated 15-07-2005 to include the area of road to be the area eligible u/s.80IB.
2. The appellant craves leave to add, amend or alter any of the above grounds of appeal".
2. The Assessing Officer relying on the report of the approved valuer came to a conclusion that assessee's project was situated at a plot of land having area of 3560.30 sq.mtrs. Among other conditions assessee is supposed to raise the project on plot equivalent to 1 acre for claiming deduction u/s.80IB(10). The Assessing Officer disallowed the claim of 80IB(10) because according to him project was on less than 1 acre area. 2
3. Matter was carried before the first appellate authority wherein various contentions were raised on behalf of assessee and having considered the same the CIT(A) allowed relief to the assessee under the provisions of 80IB(10). Same has been opposed before us on behalf of revenue and inter alia contended that CIT(A) erred in holding that road acquisition area is to be considered as part of area of plot for calculation of minimum 1 acre of area for claiming deduction u/s.80IB(10) of the Income Tax Act.
4. On the other hand Ld. Authorised Representative supported the order of CIT(A) and submitted that this issue is covered in favour of assessee by the order of Pune ITAT in the case of Mahesh Pandurang Bhagwat Vs. ITO in ITA No.824/PN/2011 wherein the Tribunal has discussed this issue by observing as under :
"4. Having heard the rival submissions and perused the material on record, we find that the issue raised by the Revenue in this appeal is squarely covered in favour of the assessee, by the decision of co-ordinate Bench of this Tribunal in the case of M/s Bunty Builders (supra). In the case of M/s Bunty Builders (supra) there were deductions mentioned for road widening area, open space, area under internal roads, amenities spaces and transformer and the net area after deduction came only to 2923.25 sq. mtrs. The Tribunal also relied upon the CBDT circular No. 5 of 2005 dated 15-7-2005 which contained the explanatory notes on amendments brought out by the Finance Act (No. 2) cited in 276 ITR 170 (Statute), wherein the guidelines issued were as follows:
"Extension of the time limit for obtaining approval of housing projects for the purpose of tax holiday under section 80-IB and allowing deduction for re-development or reconstruction of existing building in slum areas.
This section does not specifically provide area limit for the garden, the development plan roads, internal means of access, etc., in the housing project. Therefore, the same should conform to the project plan approved by the local authority in accordance with the regulations in force. Also, the area limit of the plot has to be construed with reference to the area of the site on which the housing project is constructed and not with reference to the demarcation of land done by the land development authority".3
5. Respectfully following the aforesaid decision of the Tribunal in the case of Bunty Builders (supra), we hold that the assessee is entitled to deduction u/s 80IB(10) of the Act based on the area of the plot as per 7/12 extract being 4500 sq. mtrs, which is more than the minimum stipulated area of one acre (4047 sq. mtrs). Accordingly, we direct the authorities below to allow the deduction u/s 80- IB(10) as claimed by the assessee.
2. Nothing contrary was brought to our knowledge by Revenue. The facts being similar, following same reasoning, we are not inclined to interfere with the finding of the CIT(A) who has allowed the deduction u/s.80IB(10) based on the area of plot as per 7/12 extract being 450 sq. mt. which is more than minimum stipulated area of 1 acre (4047 sq.mt.). Same is upheld.
3. In the result, the appeal filed by the Revenue is dismissed."
5. After going through rival submissions and material on record we find that issue before us is regarding disallowance of deduction u/s.80IB(10) on the basis that condition given u/s.80IB(10) that area of the plot of project should be minimum 1 acre. Infact the Assessing Officer has not considered the area of 513.80 sq.mtrs. which was a road acquisition area reserved on this plot. As stated above among various conditions including deduction u/s.80IB(10) area of the plot of project should be 1 acre. After reducing this area net area remained at 3560.20 sq. mtrs as against the plot size of 4074 sq. mtrs, therefore, the Assessing Officer rejected the claim of deduction u/s.80IB(10).
6. According to the assessee he had purchased the land by way of Registered Development agreement dated 31-08-2004 in which total land area of 4074 sq. mtrs was mentioned. It was also found that registration of this development agreement was also made for 4074 Sq.mtrs for the purpose of registration and payment of stamp duty thereon. The sanctioned plan or the building plan approved also mentioned the plot area at 4074 sq. mtrs out of which deduction for road acquisition area by PCMC at 513.80 sq. mtrs was made.
4
7. The Assessing Officer did not consider the argument of assessee that road acquisition area should not be excluded. The Assessing Officer has not disputed the fact that when the project was sanctioned the road acquisition area was still in possession of the assessee and was not handed over to the Corporation till that point of time. Further, the assessee was entitled to FSI on account of road acquisition and therefore this was taken care in development agreement itself.
8. In view of the above, assessee was correct in taking stand that area of the plot is 4074 sq. mtrs as per plan and registered development agreement and reduction of road acquisition area from this gross plot area for calculation of minimum 1 acre was not justified. Accordingly, CIT(A) was justified in holding that assessee was entitled for deduction in respect of housing project "Prem Aangan" which needs no interference from our side. With the above reasoning we uphold the same.
9. As a result, the appeal filed by the revenue is dismissed.
Pronounced in the Open at the time of hearing itself, i.e. on 17-04-13.
Sd/- Sd/-
( R.K. PANDA ) (SHAILENDRA KUMAR YADAV )
ACCOUNTANT MEMBER JUDICIAL MEMBER
satish
Pune, dated the 17th April 2013.
Copy of the order is forwarded to:
1. The Assessee 2. The Department
3. The CIT(A)-V, Pune 4. The CIT-V, Pune
5. The DR "A" Bench, Pune.
6. Guard File
By Order
// True Copy //
Private Secretary,
Income Tax Appellate Tribunal, Pune.