2015 (10) TMI 2235 - AT - Income Tax

Tribunal upholds deductions for separate housing project under section 80IB(10) for assessment years 2008-09 and 2009-10.

The Asstt. Commissioner of Income Tax, Circle – 11 (1), Pune Versus Kewal Real Estate Pvt. Ltd.

The Tribunal upheld the Commissioner of Income Tax (Appeals)'s decision, allowing deductions under section 80IB(10) for the assessment years 2008-09 and ... Deduction u/s. 80IB(10) - housing project “Kumar Primavera” - AO denied the benefit on the ground that the assessee has not completed the project within the time frame as stipulated under the provisions of section 80IB(10)- Held that:- It is not disputed by the Revenue that buildings A1 and A2 in Phase-I were complete and occupation certificate was granted by the PMC in respect of said buildings on 05-09-2008. In so far as buildings A3 to A8 in Phase-II are concerned, the completion certificate in respect of all the flats comprising in said buildings were granted by PMC up to March, 2011, whereas, the last date for obtaining completion certificate was 31-03-2012. Thus, the assessee had obtained completion certificates well within the time frame mentioned in the provisions of section 80IB(10) of the Act in respect of all the buildings in Phase-I and Phase-II. See Rahul Construction Vs. ITO [2012 (6) TMI 319 - ITAT PUNE] The assessee is eligible to claim deduction u/s. 80IB(10) on all the residential buildings comprising in Phase-I (A1 and A2) and Phase-II (A3 to A8). The date of completion of Phase-II shall be reckoned from the date of commencement certificate issued by PMC in respect of buildings A3 to A8. We do not find any infirmity in the order of Commissioner of Income Tax (Appeals), accordingly, the same is upheld and the appeals of the Department are dismissed. - Decided in favour of assessee. Issues Involved:1. Whether the Commissioner of Income Tax (Appeals) erred in allowing the deduction u/s 80IB(10) of the Income Tax Act, 1961.2. Whether buildings A1 and A2 can be considered a separate housing project from buildings A3 to A8.3. Whether the entire project 'Kumar Primavera' should be treated as a single housing project for the purpose of deduction u/s 80IB(10).4. The implications of the completion certificate dates on the eligibility for deduction u/s 80IB(10).Issue-wise Detailed Analysis:1. Allowing Deduction u/s 80IB(10):The Revenue challenged the decision of the Commissioner of Income Tax (Appeals) for allowing the deduction u/s 80IB(10) for the assessment years 2008-09 and 2009-10. The assessee claimed deductions of Rs. 6,64,09,622/- and Rs. 2,93,16,865/- for the respective years, arguing that the project 'Kumar Primavera' was developed in two phases. The Commissioner of Income Tax (Appeals) accepted the claim, treating buildings A1 and A2 as a separate project from buildings A3 to A8.2. Separate Housing Project for Buildings A1 and A2:The Commissioner of Income Tax (Appeals) held that buildings A1 and A2 constituted a separate housing project independent of buildings A3 to A8. The approval for Phase-I (A1 and A2) was obtained on 02-02-2005, with a completion certificate issued on 05-09-2008. The Revenue argued that the entire project should be treated as one, but the Commissioner differentiated based on separate commencement certificates and phases.3. Single Housing Project Argument:The Revenue contended that the entire project, including buildings A1 to A8, should be considered a single housing project. They argued that the plan for buildings A3 to A8 was a mere revision of the original plan and additional constructions on the same plot. The Revenue emphasized that the original commencement certificate was issued on 02-02-2005, and the project should have been completed by 31-03-2009.4. Completion Certificate Dates:The Assessing Officer denied the deduction on the grounds that the project was not completed by 31-03-2009. The Commissioner of Income Tax (Appeals) found that the completion certificate for buildings A1 and A2 was obtained on 05-09-2008, and for buildings A3 to A8 on 31-03-2011. The Tribunal upheld that the assessee complied with the completion requirements for both phases within the stipulated timelines, making them eligible for the deduction.Tribunal's Conclusion:The Tribunal concluded that the assessee is eligible for the deduction u/s 80IB(10) for both phases of the project. The Tribunal supported the Commissioner of Income Tax (Appeals)'s decision to treat buildings A1 and A2 as a separate project from buildings A3 to A8. The Tribunal referenced various case laws, including CIT Vs. Vandana Properties and Mudhit Madanlal Gupta Vs. ACIT, supporting the eligibility for deduction on part completion of the project if all conditions are met.Final Decision:The Tribunal dismissed the Revenue's appeals, upholding the Commissioner of Income Tax (Appeals)'s orders and allowing the deductions claimed by the assessee for the assessment years 2008-09 and 2009-10. The Tribunal emphasized that the completion certificates were obtained within the permissible timeframes, and the project complied with all conditions under section 80IB(10).