TaxTMI 
TaxTMI 
2012 (12) TMI 360
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....(10) of the Act amounting to Rs. 7,87,49,450/-. The Assessing Officer denied the deduction u/s 80-IB(10) of the Act on the ground that the project was not complete within the stipulated period of time. The assessee's project at Vishrantwadi, consisted of six buildings C, D and E1 to E4 having 205 flats. The housing project was approved vide commencement certificate no. 3837/04 dated 13-1-2005 out of which completion certificate was obtained and furnished before the Assessing Officer for 173 flats only. The stand of the assessee before the Assessing Officer was that other conditions given u/s 80-IB(10) (b), (c) and (d) were fulfilled and so far as condition given in clause (a) of section 80-IB(10) is concerned, which relates to completion of the project within the stipulated time period, it was stated that 85% of the housing project was completed. However, the Assessing Officer rejected the claim of the assessee on main as well as alternate claim with regards to the proportionate deduction. The matter was carried in appeal before the first appellate authority who confirmed the order of the Assessing Officer on main ground as well as alternate ground. 3. Before us, the learned Auth....
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..... The learned AR for the assessee drew our attention to the decision of Bombay Bench J of the Tribunal in the case of Mr. Johar Hassan Zojwalla in ITA No. 5404/MUM/2008 for A.Y. 2005-06 dated 12-1-2011 wherein it has been held as under: 6.1. In the case of Bengal Ambuja Housing Development Ltd. (supra), the facts were that the housing project consisted of 261 residential units and the individual flat size varied between 800 sq.ft. to 3000 sq.ft. and the total built up area of this housing project was 346599 sq. ft. This project contained 150 residential units with a built up area of individual unit of less than 1500 sq.ft. aggregating to 169500 sq.ft. The remaining built up area of 187593 sq. ft. was consumed by other residential units wherein the size of individual unit exceeded 1500 sq. ft. of built up area. Under these circumstances, the assessee had claimed deduction u/s.80IB(10) with reference to the profit attributable to the built up area which was occupied by residential units having individual flat size of less than 1500 sq.ft. The A.O. rejected the claim of the assessee u/s.80IB(10), inter alia, observing that as per the terms of sec.80IB(10), all the units comprised in ....
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....ata basis. 6.5 In the case of' G.V. Corporation vs. ITO (supra), the assessee, at the request of purchasers, joined some of its flat/residential units, as a result of which built up area of those flats exceeded 1,000 sq. ft. Deduction was denied u/s.80IB(10) on the ground that the aforesaid act of the assessee resulted in violation of the provisions of sec.80IB(10). The Tribunal, following the Special Bench decision of the Tribunal in the case of Brahma Associates vs. Jt. CIT (2009) 119 ITD 255, held that deduction could not be totally denied and it would be eligible for proportionate deduction. 7. In all the above decisions, deduction u/s.80IB was denied as some of the residential units exceeded the limit of 1500 sq. ft. as laid down u/s.80IB(10(c). However, in the present case, the deduction has been denied, inter alia, on the ground that the project could not be completed before 31-3-2008. It is not disputed that this condition has not been fulfilled. Now, in the light of the aforesaid decisions, we have to consider what would be the consequences of the project being not completed by 31-3-2008. This is the basic condition for allowability of deduction u/s.80IB. We find conside....
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....oard Mfg. Co. Ltd. (177 ITR 431) (SC) Hon'ble Supreme Court had emphasized the above principles. In this background, an alternate ground of the assessee was that even if it is presumed that the project is not fully completed then the proportionate deduction should have been granted on the basis of Principles of Proportionality or pro rata basis. According to Ld.AR, the Tribunal Benches have granted proportionate deduction in respect of deduction u/s 80-IB(10) of the Act in following cases: 1) Johar Hassan Zojwalla (supra) 2) G.V. Corporation Vs. ITO (2010) 30 SOT 174 (Mum) 3) Arun Excello Foundations (P) Ltd. Vs. ACIT (2007) 108 TTJ (Chennai) 71 4) Dy. CIT Vs. Brigade Enterprises (P) Ltd. (2008) 119 TTJ (Bang) 269 5) Bengal Ambuja Housing Development Ltd (supra) 6) ITO Vs. AIR Developers (2010) 122 ITD 125 (Nag) 7) ACIT Vs. Sheth Developers (P) Ltd. 33 SOT 277 (Bom). Accordingly Ld. Authorised Representative submitted that assessee should be granted relief on proportionate basis. On the point of late completion due to incapacitation the stand of the assessee is that because the assessee submitted certain modifications/rectifications for the top floors of the building....
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....ect, an amendment had been brought to section 80IB(10)(a) whereby the outer limit for completion of the project was specified. In the absence of this provision earlier, the object of providing residential accommodation to public at large within a limited time frame was getting frustrated and therefore, in order to give priority to the availability of residential accommodation, the amendment has been brought. Otherwise too, the use of the word "the" before "housing project" in Explanation (ii) clearly shows that the Legislature only intended for full completion of Housing Project and there is no scope for any other meaning etc. to be attributable to the same in view of the plain and simple language used by the Legislature. Decision in case of Johar Hassan Zojwalla in ITA No. 5404/Mum/2008 for A.Y 2005-06 does not help the assessee. He accordingly submitted that the order of the CIT(A) being just and proper should be upheld. 6. After going through rival submissions and material on record, we find that the assessee is a firm engaged in business of builder and promoter. The issue before us is regarding allowability of deduction u/s.80IB(10) of the Act on partially complete project. Th....