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3. Whether on the facts and in the circumstances of the case, the Tribunal was right in that the assessee is entitled for the deduction under Section 80IB(10) for the housing project with respect to residential flats with built up area not exceeding 1500 sq.ft. even though in the same housing project, the assesseee had constructed flats exceeding built up area of 1500 sq.ft.?
4. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of Section 80IB(10) provide for partial deduction to the housing project with respect to residential flats with built up area of less than 1500 sq.ft. where the same project contains flats with built up area exceeding 1500 sq.ft.?"

8. Aggrieved by this, the assessee went on further appeal before the Income Tax Appellate Tribunal. Along with the assessee's case, two other assessees, viz., M/s.Sri Mahalakshmi Housing and M/s. Sri Mahalakshmi Builders, who were also similarly placed and whose claims also suffered rejection by the respective Assessing Officer, had appealed before the Tribunal. Thus, under a common order along with the assessee's case, the Tribunal considered the other assessees' case too.

9. As far as the claim of the Revenue that the assessee not being the owner of the building, the question of grant of deduction under sub-section (10) of Section 80 IB of the Income Tax Act was not available, the Tribunal pointed out that the ownership of the land was not the criteria to decide the status of the developer to claim deduction. Pointing out the situation where the owner may desire to retain the ownership of a portion of the land and sell it in an undivided portion, the Tribunal held that the Legislature must have taken note of such a situation in mind while providing for the deduction. Referring to the Memorandum explaining Finance Bill, 2009, introducing Explanation to Section 80IB(10) of the Income Tax Act, the Tribunal pointed out to the provisions emphasised about the investment risk, which could be taken either by the owner or the builder or jointly by both. Thus, taking note of the risk elements involved in the promotion of developing a project, ownership as an element for consideration for deduction did not arise. The Tribunal further pointed out to the argument of the Revenue that as the owner was paid based on the built-up area, it was only the owner, who was the developer. Rejecting such a reasoning by the Revenue, the Tribunal pointed out that all that the owner was entitled to on the terms of the agreement between the parties was for the undivided share of the land measured in terms of the built-up area and he had no interest in the cost of construction, which the builder alone had to bear. In the circumstances, the consideration that was payable to the owner in respect of the sale of undivided share was with reference to the super built-up area. Irrespective of whether all the flats are booked or not, the owner would receive the cost of the land. Thus, on a reading of the various clauses in the agreement, the Tribunal held that the fact that the assessee was not the owner would not disentitle the assessee from claiming relief under Section 80IB(10) of the Income Tax Act. It further pointed out that the builder on its part had invested on materials and labour as and when the construction progressed and the recoupment of the investment was uncertain. Thus, irrespective of whether all the flats were booked or not, the builder would have to construct the entire building and even if there was a booking for a flat in the fourth floor and the third floor remained unbooked, the assessee nevertheless would have to go ahead with the construction of the third floor and hand over the possession of the fourth floor to the person, who had paid for the undivided share in the land. In this, the Tribunal pointed out that the risk of the assessee was multifold in contrast to the owner, who had no risk involved at all.

14. As regards the contention of the Revenue that certain flats exceeded 1500 sq.ft., the Tribunal thought it fit to remand the matter back to the Assessing Officer to find out whether, in fact, there had been any violation of section 80IB(10)(c) of the Income Tax Act.

15. The last of the question that was raised before the Tribunal was as regards the expression 'built-up area'. The Tribunal pointed out that it was an admitted fact that the open terrace attached to the particular flats purchased were adjoining to the dwelling unit. In the circumstances, the Tribunal viewed that it had to be held as a projection of dwelling unit itself and the owner of the top floor having access to the said terrace as a private terrace. Taking this area along with the built-up area, the Tribunal considered the question of proportionate relief. Learned Accountant Member held that the assessee was not entitled to relief in respect of those flats, which exceeded 1500 sq.ft. The learned Accountant Member pointed out that if the built-up area of the building exceeding 1500 sq.ft. was more than 10% of the total built-up area of the project, then the assessee would lose deduction on the entire project. Thus the learned Member viewed that if flats measuring more than 1500 sq.ft. did not exceed 10% of the total built-up area, the assessee would be entitled to the deduction on the units satisfying the condition, failing which the assessee would lose the entire deduction. In considering this issue, learned Accountant Member also referred to the decision of the Calcutta High Court in the case of CIT V. Bengal Ambuja Housing Development in I.T.A.No.458 of 2006 dated 5.1.2007 as well as to the decision of the Bombay Tribunal, which was a subject matter of appeal before the Bombay High Court reported in [2011] 333 ITR 289  CIT v. BRAHMA ASSOCIATES, which was ultimately confirmed in favour of the assessee. He referred to the decision of the Special Bench of the Tribunal in the case of Brahma Associates V. JCIT reported in 122 TTJ 433 holding that if the commercial built-up area was not more than 10% of the total built-up area, the assessee would be entitled to pro-rata relief. Thus, the Tribunal viewed that even in case of units having more than 1500 sq.ft. Of the build-up area, the total extent should not exceed 10% of the total built-up area, a line which was adopted by the Tribunal to consider the relief.

(d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less."

29. We had already seen the various clauses in the agreement between the assessee and the owner dated 28.4.2003. A reading of the various clauses therein clearly points out the role of the assessee, which is not just as that of a builder to put up construction as per the directions of the owner; on the other hand, as rightly pointed out by the Tribunal, the risk element that is involved in the project undertaken by the assessee is more than of a normal builder, undertaking mere construction. It is seen from the data furnished before the Assessing Officer that while flats in the 6th floor and 11th floor were sold even as early as 2003, flats in first floor with Nos.104 and 103 were sold in the year 2009. So too, some of the flats in second floor and third floor were sold in the year 2007, 2006 and 2005. The flat in 12th floor was sold on 15.10.2003 and in the 9th floor on 5.11.2003. The flats in the first floor with Nos.101 and 102 were sold on 17.6.2009. Apart from this, we find that there were still some flats left unsold.