TaxTMI 
TaxTMI 
2015 (7) TMI 516
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....s as developer & builder and has undertaken the construction of a housing project called 'Prakruti Park' at Ghodbunder Road, Thane. The appellant had filed return of income showing income at Rs. NIL for the year under consideration after claiming deduction u/s. 80IB(10) amounting to Rs. 4,48,97,145/-. The project 'Prakruti Park' was found to have been constructed on a plot of land admeasuring 18,704.22 sq mtrs. and the project comprised of 13 buildings. A survey u/s. 133A of the I.T. Act 1961 was carried out on the assessee on 10.03.2006. On physical verification of the housing project, the survey party noticed that 14 adjoining flats in buildings 'Varsha' and 'Grishma' of the project "Prakruti Park" were combined thereby resulting in 7 flats having built up area exceeding 1000 sq. ft. It is for this reason that 14 flats of the housing project exceeded area of 1000 sq. ft. and therefore the assessee was not eligible for deduction u/s. 80IB(10). These findings were first given by the AO. during the assessment year 2005-06 for denying the deduction u/s. 80IB(10) to the assessee. For the year under consideration, the AO has not given any specific findin....
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....rant of development permission on 27.02 2004 and therefore the project should have been completed prior to 31.03.2008. The last of occupancy certificate being received on 19.06.2008, the completion of the project was beyond the time granted by section 80IB(10)(a)(i) and therefore the denial of deduction was correct. 5.5. In the order of assessment as well as during the course of appellate proceedings, the AO has relied upon the various clauses of the development regulations for the City of Thane to justify the argument that the approval of building plans was first granted on 27.02.2004. 5.6. In the appeal proceedings, the AO also filed a letter dated 02.7.2012 wherein he has raised issue of commencement certificate dated: 21.09.2004 being signed by Executive Engineer, Town Planning Department, whereas the Development Permission issued on 27.02.2004 under the signature of Asst. Director of Town Planning, thereby implying that the Development Permission was issued under the approval of the Commissioner as an executive function, whereas the Commencement Certificate was issued by the sub-ordinate officer as a matter of procedure. 5.7. The above arguments of the ....
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....on to section 8018(10). 17. In view of the above discussion, we decide this issue against the revenue and in favour of the assessee. The order of the CIT(A) is confirmed qua this issue". 5.11. It is also noticed from the clarifications received by my predecessor during the appellate proceedings for the A.Y. 2008-09 from Thane Municipal Corporation, Thane, (which being a Local Authority, is a final authority so far as approval of Housing Project is concerned), that any development can only be carried out after grant of Development Permission as well as Commencement Certificate as per the provisions of Development Control Regulation - 3 of Development Control Regulations,1994. It has been further clarified by the Thane Municipal Thane, that the reply sent to ITO, Ward - "(3}, Thane vide letter dated: 30/08/2011 was about the process of approval of Development Permission and Commencement Certificate. The perusal of sanction letters dated: 27/02/2004 and 21/09/2004 reveals that both the letters are in same proforma with the heading- SANCTION OF DEVELOPMENT PERMISSION 1 COMMENCEMENT CERTIFICATE and in the letter dated: 27/02/2004, the words "COMMENCEMENT CERTIFICATE" have been....
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.... section 80IB(10)(a)(ii) which are actually applicable in the case of appellant. Since the appellant has complied with the requirement of provisions of section 801B(10)(a)(ii) by obtaining a final occupation certificate on 19/06/2008 well within the time available to the appellant as per the provisions of Income-tax Act, the grounds of appeal No. 3A to 3F are allowed. Accordingly, the issue in question is decided in the favour of appellant. 5.13. My predecessor vide his order dated: 30101/2012 (A.Y. 2008-09), has also decided the alternate plea taken by the appellant in its favour that if, the date of 27/02/04 is to be considered as the date of approval of Housing Project, then the requirement to have the project completed within 4 years, i.e., before 31/03/08 would not apply to the case of the appellant, since this is only the amended Act w.e.f. 01/04/04, which introduced the cap of 4 years and prior to the amendment, there was no such requisite condition to get the project completed within 4 years. He relied upon the decision in a recent case of Hiranandani Akruti JV Vs DCIT, Central Circle-36, Mumbai, of the Hon ITAT, 'E' Bench Mumbai in ITA No 5416/Mum/09 (A.Y. 06-07)....
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.... case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b)............ (c)............. (d)............ (e),............. (f).............. [Explanation.-For the removal of doubts, it is hereby declared that nothing contained in this sub-section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government)." It is manifest from the explanation that in case the approval is obtained on more than once the date on which the building plan of such house housing project first approved shall be deemed to have been the date of approval of the housing project. In the case in hand the Thane Municipal Corporation first issued a letter dated 27.02.2004 ....
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....(Power of attorney holder). Sir, With reference to your application no.13510 dated 17.07.2003 for development permission/grant of commencement certificate under section 45 and 69 of the Maharashtra Regional and Town Planning act, 1966 to carry out development work and or to erect building no. as above in village Kollshet section no.5, ward no.1 situated at road/street 40 mtrs. D.P.Road CTS No.95-Hissa No.1, No.1,2,3, 4(Pai) 5,6,7,9,11,12,13, survey no.13, hissa no.1,2,3 H.No.----T No._____ the development permission/the commencement certificate is granted subject to the following conditions; 1. The land vacated in consequences of the enforcement the set back line shall form part of the public street; 2. No new building or part thereof shall be occupied or allowed to be occupied or permitted to be used by any person until occupancy permission has been granted. 3. The development permission/commencement certificate shall remain valid for a period of one year commencing from the date of its; issue; 4. This permission does not entitled you to develop the land which does not vest in you. 14. The assessee claimed that the approval of the ....
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....t none of the residential units of the two buildings of the project "Prakruti Park" were combined with each other at the time of grant of "Occupation Certificate" by the local authority. (ii) the report of the Valuation Officer of the Income Tax department, Thane who had at the instance of the Id A.O. made verification and certified that on the date of inspection also only 8 residential units were found to be combined thereby resulting in only 4 residential units having area exceeding 1000 sq. ft. The assessee has also taken the following grounds in its cross objection:- "2. On the facts and in law, the Id. CIT (Appeals) erred in holding that the six combined residential units of the appellant's housing project had area exceeding the permissible maximum built up area of 1000 sq. feet prescribed under sub section ( c) to sec. 80IB(10) by not appreciating the fact that the location of the appellants housing project was situated more than 25 Kms. from the Municipal limit of the "City" of Mumbai and accordingly the maximum permissible, built up area as per sub section ( c) of sec. 80IB(10) available to the appellant was 1500 sq. ft. and not 1000 sq. ft." &n....