2013 (3) TMI 675 - AT - Income Tax

Appellant wins appeal: Building E qualifies for deduction under section 80IB(10)

M/s. G.K. Associates Versus Income Tax Officer

The Tribunal ruled in favor of the appellant, holding that building E constituted a separate Housing Project eligible for deduction under section ... Disallowance of the claim u/s.80IB(10)- whether building ‘E’ is a separate Housing Project or it is a part of the Housing Project originally sanctioned vide order dated 15-09-2003? - Held that:- There are no restrictions in the Income-tax Act on the assessee how to design his Housing Project. Moreover, merely because part of the FSI has been utilized in building ‘E’ which is claimed as separate Housing Project, the assessee should not be deprived of the benefit of Section 80IB(10). We, therefore, hold that on the facts and circumstances of this case, building ‘E’ is a separate Housing Project. Another aspect to be considered here, as submitted by the learned counsel, the utilities space is shifted to separate plot and building E was conceptuated separately. We, therefore, allow the appeal filed by the assessee and direct the Assessing Officer to allow the claim u/s.80IB(10) to the assessee. Issues:Challenge to disallowance under section 80IB(10) for Assessment Year 2007-08. Dispute over completion of Housing Project for deduction under section 80IB(10).Analysis:1. The appellant challenged the disallowance of a claim under section 80IB(10) amounting to Rs. 2,53,18,877 for the Assessment Year 2007-08. The Assessing Officer noted the original sanction of the Housing Project, revisions in the building plan, and completion certificates for various buildings. The Assessing Officer concluded that the Housing Project was not completed by the specified date, thus denying the deduction claim.2. The appellant contended that the project consisted of only 4 buildings, and the addition of building E was a separate project. The CIT(A) upheld the Assessing Officer's decision, stating that the completion of building E was necessary for the deduction under section 80IB(10). The CIT(A) rejected the argument that building E was a separate project based on the revised plan and completion certificates.3. The Tribunal analyzed whether building E constituted a separate Housing Project. It was observed that building E was added later and was conceptually separate, even though part of the FSI was utilized in all buildings. Referring to the decision in CIT Vs. Vandana Properties, it was held that a single building could constitute a separate Housing Project. The Tribunal ruled in favor of the appellant, directing the Assessing Officer to allow the claim under section 80IB(10).4. The Tribunal emphasized that the Income-tax Act does not restrict how the Housing Project should be designed, and the utilization of FSI in building E should not disqualify the appellant from the deduction. Considering the circumstances and arguments presented, the Tribunal concluded that building E was indeed a separate Housing Project, overturning the decisions of the Assessing Officer and CIT(A).5. The Tribunal allowed the appellant's appeal, setting aside the disallowance under section 80IB(10) and directing the Assessing Officer to grant the deduction to the appellant. The judgment was pronounced on 4th March 2013.