TaxTMI 
TaxTMI 
2012 (12) TMI 360
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.... issue before us is regarding deduction u/s 80-IB(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 a....
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....ta Bench has been approved by Hon'ble Calcutta High Court. 3.3. 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....
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.... housing complex exceed the area limit, relief has to be given on a pro rata 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 i....
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.... the statute to effectuate the legislative intention. In the case of CIT Vs. Strawboard 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 bec....
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....of the Legislature. The Legislature, having realized the lacunae about the date of completion of the project, 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....
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....f assessee when he is incapacitated in completing project in time for the reasons beyond his control. In case before us, as stated on behalf of assessee, that assessee submitted certain modifications/rectifications for top floors of building. The said modification/rectification could not be completed as local authority could not approve the modification as their files have been taken over by concern intelligence department for investigation of violation of urban land ceiling Act applicable to land in question at relevant point of time. This fact has not been disputed on behalf of revenue. Thus, assessee was prevented by sufficient reasonable cause which compelled the impossibility on part of the assessee to have completion certificate in time. It is settled legal position that the law always give remedy and the law does wrong to no one. We agree to proposition put forward by Ld. Departmental Representative that plain reading of section 80IB(10) of the Act suggests about only completion of construction and no adjective should be used alongwith the word completion. This strict interpretation should be given in normal circumstances. However, in case before us, assessee was preve....