IN HIGH COURT OF JUDICATURE AT MADRAS DATED 02.03.2020 CORAM HONOURABLE MR. JUSTICE M. SATHYANARAYANAN AND HONOURABLE MR. JUSTICE ABDUL QUDDHOSE TCA.No.377 of 2018 Commissioner of Income Tax Chennai Appellant Versus Smt.A.Jagadeeswari Respondent PRAYER:- Tax Case Appeal filed under Section 260-A of Income Tax Act, 1961, against order of Income Tax Appellate Tribunal dated 20.11.2017, made in ITA No.245/Mds/2017 relating to Assessment Year 2008-09. For Appellant Mr.T.Ravikumar 1/10 JUDGMENT [Judgment of Court was made by M.SATHYANARAYANAN,J.,] (1)The Revenue is appellant herein. Though respondent / Assessee has been served and her name appears in Cause List, there is no representation on her behalf. (2)The respondent/Assessee filed Return of Income Tax for Assessment Year 2007-08 on 29.09.2008, admitting income of Rs.28,69,400/- after claiming deduction under Section 80IB[10] of Income Tax Act, 1961, as amended from time to time, sum of Rs.4,99,11,555/- and it was processed on 27.02.2010. Assessing Officer, in course of completing assessment for Assessment Year 2009-10, noticed fact that Assessee did obtain plan for construction of entire plot of measuring slightly over one acre, where blocks ranging from to L were constructed. It was also noticed that each block of flat was constructed on plot measuring less than one acre and therefore, Assessing Officer held that project was not unified project in extent of one acre and treated each approval as separate project extending in area less than one acre and therefore, not allowed claim of deduction under said Section. Assessing Officer has also placed reliance upon Board of Direct Taxes Instructions No.4 of 2009 dated 20.06.2009 and that apart, deduction allowed in respect of earlier orders has to be withdrawn and therefore, notice under Section 148 of Income Tax Act, 1961, was issued on 01.03.2013 for Assessment Year 2008-09. (3)The Income Tax Officer, BW XV[1], Chennai, vide Assessment Order dated 08.03.2014, has concluded assessment holding that similar view was taken for year 2009-10, that is, each plan and approval is independent project comprised in area less than that specified in Section and thus, not qualifying for purported benefit of deduction and accordingly, assessed income at Rs.5,27,80,960/-. (4)The Assessee, challenging said order, filed Appeal before Commissioner of Income Tax [Appeals]-4, Chennai and Appellate Authority, vide order dated 24.10.2016, found that Assessing Officer was well within her jurisdiction in reopening present case and therefore, confirmed said action. Appellate Authority, insofar as not allowing deduction under Section 80-IB[10] of Income Tax Act, 1961, found that in respect of Assessment Year 2007-08, Division Bench of this Court, in judgment dated 12.11.2014 in Tax Case [Appeal] No.257 of 2012, filed by Revenue, has considered issues relating to substantial questions of law 3 and 4 therein and found that appeal filed by Revenue lacks merit and accordingly, dismissed appeal. (5)The Commissioner of Income Tax [Appeals] had also considered plea as to development of composite project in proposed site in S.Nos.486/1 and 482 and recorded finding that at no point of time, Assessee considered each plot as separate project and it was considered as single project and development was also on those lines. Thus, Commissioner of Income Tax [Appeals], by taking into consideration, facts and circumstances of case, especially, above cited judgment dated 12.11.2014 in TCA.No.257 of 2012, has allowed appeal filed by Assessee partly, vide order dated 24.10.2016. (6)The Revenue, aggrieved by same, filed further appeal before Income Tax Appellate Tribunal, [D Bench], at Chennai, [in short ''the ITAT'']. (7)The ITAT, vide order dated 20.11.2017, has taken note of judgment in TCA.No.257 of 2012 and further found that project of assess was also in area more than one acre and approvals were obtained on unit basis only for benefit of taking advantage of Development Control Rules of Local Authority, viz., Chennai Metropolitan Development Authority [CMDA]. ITAT, having recorded said finding, found that appeal filed by Revenue is devoid of merits and insofar as Assessee's Cross Objection is concerned, ITAT, having found that it do not merit any consideration, had dismissed appeal filed by Revenue as well as Cross Objection filed by Assessee and challenging legality of dismissal of appeal filed by Revenue, present Tax Case Appeal is filed. (8)The appeal was admitted on following substantial questions of law vide order dated 02.08.2018:- 1.Whether, claim of deduction u/s.80IB[10] is to be allowed even if there has been violation of condition of provisions of Section 80IB[10][c] since area of two plots situated in two different streets, which Assessee has considered as single project constituted area of less than 1 acre each when considered individually? 2.Whether Tribunal was right in allowing claim of deduction under Section 80IB[10] especially, when built up area of certain residential units exceeded 1500 sq.ft. which was in violation of conditions specified in Section 80IB[10][c]? (9)Mr.T.Ravikumar, learned counsel appearing for appellant/Revenue would contend that projects was developed in area abutting two streets and therefore, it should be considered as separate projects and for purpose of circumventing Development Control Rules of CMDA, project was developed separately and therefore, Assessee was disentitled from availing benefits of Section 80-IB[10] of Income Tax Act, 1961 and also took stand that challenging legality of judgment dated 12.11.2014 made in TCA.No.257 of 2012, Revenue has preferred Special Leave Petition before Hon'ble Supreme Court of India and same is pending and hence, prays for interference. (10)This Court paid its best attention to arguments advanced by learned counsel for appellant/Revenue and also carefully scrutinised materials placed before it. (11)In TCA.No.257 of 2012, following substantial questions of law were raised:- 1.Whether on facts and in circumstances of case, Tribunal was right in holding that assessee is entitled for deduction under Section 80IB when assessee is not owner of property and had executed contract with purchasers of undivided share in land to construct building? 2.Whether on facts and in circumstances of case, Tribunal was right in holding that completion certificate is not necessary in view of letter dated 14.12.2009, issued by Assistant Commissioner, Corporation, when assessee itself had stated that project is 'under construction in form submitted to Assessing Officer? 3.Whether on facts and in circumstances of case, Tribunal was right in holding that each of unit of flats had built up area of less than 1500 sq.ft., and is entitled to deduction under Section 80IB[10]? 4.Whether assessee is entitled for deduction under Section 80IB[10] when assessee had applied for sanction of building permission separately for each of plots measuring less than 1 acre? (12)The Division Bench, in judgment dated 12.11.2014, in TCA.No.257 of 2012, had answered questions of law and has taken note of earlier common judgment dated 01.11.2012 made in TC[A] Nos.581 582 of 2011 and 314 and 315 of 2012, which came to be decided in favour of Assessee, holding that for purpose of considering deduction, it is not necessary that Assessee, engaged in developing and construction of housing project and only point is that he should be owner of property. (13)It is also brought to notice of this Court that so far, no challenge has been made to common judgment dated 01.11.2012 in TCA.Nos.581 and 582 of 2011 and 314 and 315 of 2012. (14)The ITAT, on facts also found that Assessee has obtained approvals of plan for proposed projects and also planned entire project regarding number of floors, number of apartments in each floor, cost of each apartment based on square foot area of apartment and it was done as composite project at proposed site in S.Nos.486/1 and 482. (15)In light of factual findings coupled with fact that Assessee's own case, on earlier occasions in TCA.Nos.581 & 582/2011 and 314 and 315/2012 vide common judgment dated 01.11.2012, was allowed and though ground was raised before ITAT as to location of plots in two different streets, but no arguments have been advanced, this Court is of considered view that there are no substantial questions of law arise for consideration in this appeal. (16)In result, Tax Case Appeal is dismissed, confirming order of Income Tax Appellate Tribunal dated 20.11.2017, made in ITA No.245/Mds/2017 relating to Assessment Year 2008-09. No costs. [M.S.N.,J] [A.Q., J] 02.03.2020 AP Internet : Yes To 1.The Income Tax Appellate Tribunal ''D'' Bench, Chennai. 2.The Commissioner of Income Tax Chennai. M.SATHYANARAYANAN, J., AND ABDUL QUDDHOSE, J. Commissioner of Income-tax, Chennai v. A.Jagadeeswari