TaxTMI 
TaxTMI 
2015 (3) TMI 880
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....fact that assessee had started the construction activities prior to 01.10.1998 and was not fulfilling the conditions as laid down under sec. 80IB(10) of the I.T. Act, 1961. 3. That the Learned CIT(Appeals) has erred on facts and in law in allowing the deduction under sec. 80IB(10) on the part of the project treating it a separate project, while approval of the whole project and construction was started prior to 01.10.1998. 4. That the order of the Learned CIT(Appeals) deserves to be set aside and the order of the A.O. be restored." 2. At the outset of hearing, the Learned AR pointed out that the issue raised in the grounds questioning the action of the Learned CIT(Appeals) in allowing the claimed deduction under sec. 80IB(10) of the Income-tax Act, 1961 in respect of the sub-projects, namely, Brahamputra, Kaveri, Amravati and Damodar which are the part of the main project 'Shipra Riviera' is covered by the order dated 30.10.2009 of the Delhi Bench of the ITAT in the case of assessee itself for the assessment years 2000-01, 2001-02 and 2002- 03 in ITA Nos.4628/Del/2003. 3719/Del/2004 & 1329/Del/2005, a copy whereof has been made available on record. The learned AR referred ....
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.... disallowance of Rs. 1,19,04,619 made in this regard. 5. Having gone through the orders of the authorities below as well of the ITAT in the case of assessee itself, cited above, we find that under similar set of facts, the ITAT after dealing in detail has decided the issue in favour of the assessee for the assessment year 2000-01 & 2001-02 (supra). For a ready reference, para nos. 17 to 26 thereof are being reproduced hereunder: "17. We have considered the rival contentions and have gone through the orders of the authorities below and the relevant provision of law. Section 80lA Inserted by Finance (No.2) Act 1991, subsection (4F) during the relevant assessment year reads as under:- "80lA(4F) This section applies to an undertaking, engaged in developing and building housing projects approved by a local authority subject to the condition that the size of the plot of land has a minimum area of one acre, and the residential unit has a built up area not exceeding one thousand square feet: Provided that the undertaking commences development and construction of the housing project on or after the 1st day of October, 1998 and completes the same before the 31st day of March, 2001."....
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....the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less." 19. It is crystal clear from the above provisions that for claiming exemption in respect of profit derived from housing project, following three conditions are required to be satisfied:- (I) Commences development and construction of housing project after 1.10.1998 and complete construction before 1.4.2004; (ii) Required land area under each project is more than one acre. (iii) Built-up area of house is not more than 1000 sq.ft. 20. The assessee has claimed fulfillment of all the conditions. The AO was not satisfied with the condition of commencement of development and construction of four projects of Shipra Riviera Complex after 1.10.1998. He therefore declined the exemption claimed. 21. The assessee company had claimed benefit of Section 80lA subsequently amended to 80IB in respect of the four projects from out of the Shipra Riviera Complex, and in respect of one project from out of the Shipra Sun City Complex. The income derived from out of the housing pr....
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....AO for declining exemption u/s 80lA which are booking of advertisement for sale of flat under various projects and earth filling activities on the land acquired for undertaking the construction and development thereon prior to 1.10.1998. In this respect, we found from the record that foundation 10 laying ceremony and Bhoomi Pujan was performed by the assessee only after the specified date i.e. 1.10.1998 and that construction contracts with the contractors were entered into by the assessee in the form of written agreement only after the specified date i.e. 1.10.1998. In this respect, the observation of the AO was that foundation laying ceremony can be held after the construction of the entire project and that there can always be oral contracts which may, be put in writing at a later date to suit the convenience of the assessee. In this regard, from the material available on record, we found that the assessee had undertaken bhoomi pujan when the project was initiated and even before digging the foundation. No contrary material was brought on record by the' AO to suggest that the construction activities were undertaken prior to perform bhoomi pujan and/or the construction material....
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....mmencement of the development and construction of the housing project and that means to include the construction of the housing project and after the construction is complete, the waste material' is removed then follows development of surroundings such as roads and parks. In the instant case, it was a big housing project where sufficient houses which ranged in thousands were proposed to 12 be constructed. It was a project where several different categories of houses were proposed to be built up and for undertaking construction of such a huge housing project, lot of different material is required to be stored around ,the project like sand, bricks, roll, iron and steel, huts for labourers etc. For all these purposes, the "and was required to be leveled or cleaned, but It cannot be taken as commencement of development insofar as development itself has no meaning unless it is in reference to construction of project. In Section 80IA, the legislature has used the language in a very simple form "commences development and construction of the housing project" and the legislature has not used the language "commences development of land and construction of housing project", This shows tha....
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....TCA) with respect to the findings, recorded by the AO in his assessment order for AY 1998-99 wherein AO himself has stated 'In bold letters that four projects in question commenced in the next financial year. Merely getting booking money in advance in respect of project which commenced development and construction of housing project after 1st October,1998 will not disentitle the assessee from the benefit of deduction u/s 80IA(4F)/80IB(10), In so far as crucial 14 condition is commencement of development and construction of housing project and not the receipt of booking amount in advance. It the commencement of development and construction is prior to 1.10.'1998, no deduction will be allowed u/s 80IA(4F)/80IB(10) notwithstanding the receipt of advance booking money prior or subsequent to 1.10.1998. 24. As per evidence placed on record the date of work order in respect of four projects of Shipra Riviera complex are as under:- (i) Brahmputra 5.10.1998 (ii ) Cavery 10.10.1998 (iii) Amravati 6.10.1998 (Iv) Damodar 15.10.1998 25. Since the work order itself in case of all the four projects were subsequent to 1.10.1998, there is no reason to....
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....years 2000-01 and 2001-02 which has also been followed by the ITAT in the case of assessee itself for the assessment years 2004-05 and 2006-07. Respectfully following the same, we uphold the First Appellate Order in this regard with this finding that the Learned CIT(Appeals) was justified in directing the Assessing Officer to delete the disallowance of Rs. 1,19,04,619 which was made by the Assessing Officer while denying the claimed deduction under section 80-IB of the Act in respect of the above stated four projects. The related ground Nos. 1 to 3 involving the issue are thus rejected. 7. In result, the appeal is dismissed. ITA No.5588/Del/2010: 8. The assessee has questioned First Appellate Order on the following grounds: " 1. Because the Learned CIT(Appeals) has erred in confirming addition of Rs. 232,556 on account of charity and donation without assigning any good reasons. 2. Because the Learned CIT(Appeals) has erred in confirming addition of Rs. 100,000 out of various expenses claimed on repair, maintenance, travelling, conveyance, stationary etc. 3. Because the Learned CIT(Appeals) has erred in confirming addition of Rs. 10,000 paid as compounding fee to t....
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....ated facts on the issue for the assessment year under consideration, we set aside the matter to the file of the Assessing Officer to decide the issue afresh noting down the facts of the case for the assessment year under consideration by passing a speaking order. The ground No.1 is accordingly allowed for statistical purposes. Regarding the addition of Rs. 1,00,000 out of various expenses claimed on repair, maintenance, travelling, conveyance, stationery etc., we find that the Assessing Officer has made the disallowance considering the element of non-business expenditure as well as self-made vouchers on record in a few instances. The ITAT in the assessment year 2004-05 has deleted this addition with this finding that on the basis of general observations ad hoc disallowance cannot be made in absence of even a single specific instance of non-verifiablity of the expenses or expenses having been incurred for nonbusiness purposes. Following this decision of the ITAT for the assessment year 2004-05, we direct the Assessing Officer to delete the addition of Rs. 1,00,000 in question. The ground No.2 is accordingly allowed. 13. Regarding the addition of Rs. 8,54,750 as non-business expen....