Tribunal Upholds CIT(A)'s Deduction Approval u/s 80IB(10), Remands Additional Claim for Full Project to AO.

The Tribunal upheld the CIT(A)'s decision to grant the deduction under Section 80IB(10) for two blocks, confirming compliance with relevant conditions. It admitted the assessee's additional ground for claiming deduction for the entire project, remitting the matter to the AO for de novo consideration. The assessee's appeal was allowed for statistical purposes, and the Revenue's appeal was dismissed.

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Issues Involved:

1. Deduction under Section 80IB(10) of the Income Tax Act for the entire project.
2. Deduction under Section 80IB(10) for two blocks.
3. Compliance with conditions of Section 80IB(10) regarding the size of the land and built-up area.
4. Admissibility of additional grounds by the Tribunal.

Issue-wise Detailed Analysis:

1. Deduction under Section 80IB(10) of the Income Tax Act for the entire project:

The assessee claimed a deduction under Section 80IB(10) for the entire project consisting of 372 dwelling units in 5 blocks. The Ld. Commissioner of Income Tax (Appeals) [CIT(A)] rejected this additional ground based on the decision in Goetze (India) Ltd. vs. CIT, stating that he had no power to entertain fresh claims under Section 254 of the Act. However, the Tribunal found merit in the assessee's submission that the Tribunal has the power to admit fresh legal grounds. The Tribunal admitted the additional ground and remitted the matter to the Assessing Officer (AO) for de novo consideration, directing the AO to treat the date of completion of the entire project as 23.02.2012, based on the application date for the final completion certificate.

2. Deduction under Section 80IB(10) for two blocks:

The assessee initially claimed a deduction under Section 80IB(10) for two blocks based on a partial completion certificate dated 20.04.2011. The AO disallowed this claim due to non-compliance with certain conditions. However, the CIT(A) granted the deduction for the two blocks, observing that the housing project was approved by CMDA and the completion certificate for the two blocks was obtained. The Tribunal upheld the CIT(A)'s decision, agreeing that there is no provision in the Act preventing the claim of deduction based on partial completion when other conditions are fulfilled.

3. Compliance with conditions of Section 80IB(10) regarding the size of the land and built-up area:

The AO disallowed the deduction on grounds that the project did not meet the conditions regarding the size of the land and built-up area. The CIT(A) found that the project was launched on a land admeasuring 3.46 acres, thus meeting the requirement of being more than 1 acre. Regarding the built-up area, the CIT(A) held that the built-up area includes common areas, which should be excluded when considering compliance with Section 80IB(10)(c). The Tribunal agreed with the CIT(A)'s findings, noting that the assessee had complied with the conditions, and upheld the decision to grant the deduction for the two blocks.

4. Admissibility of additional grounds by the Tribunal:

The CIT(A) rejected the additional ground raised by the assessee for claiming deduction for the entire project, citing the Goetze (India) Ltd. case. However, the Tribunal noted that the Supreme Court's decision in Goetze (India) Ltd. does not restrict the Tribunal's power to admit additional grounds. The Tribunal admitted the additional ground and remitted the matter to the AO for de novo consideration, directing the AO to treat the date of completion of the entire project as 23.02.2012.

Conclusion:

The Tribunal upheld the CIT(A)'s decision to grant the deduction under Section 80IB(10) for the two blocks, finding no infirmity in the order. The Tribunal also admitted the additional ground raised by the assessee for claiming the deduction for the entire project and remitted the matter to the AO for de novo consideration. The assessee's appeal was allowed for statistical purposes, and the Revenue's appeal was dismissed.

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