TaxTMI 
TaxTMI 
2015 (8) TMI 266
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....an. The modified plan for 213 units was approved by local authority on 23-11-2000. The assessee claimed deduction u/s. 80IB(10) of the said project. In the original assessment proceedings the claim of the assessee u/s. 80IB(10) was allowed. On 03-06-2008 a survey u/s. 133A was conducted at the business premises of the assessee. During survey apart from other shortcomings it was found that: (i) the completion certificate of the project was not issued by the local authority on or before 31-03-2008; (ii) the completion certificate dated 31-03-2003 issued by local authority was in respect of partial completion of the project, i.e. with respect to 67 units only. 2.1 The Assessing Officer observed that since the condition with respect to obtaining of completion certificate as laid down u/s. 80IB(10) was not fulfilled, therefore, the assessee is not eligible to claim deduction u/s. 80IB(10) of the Act. Consequently, reassessment proceedings were initiated and notices u/s. 148 were issued to the assessee. In assessment orders passed u/s. 143(3) r.w.s. 147 of the Act for the impugned assessment years, the Assessing Officer disallowed the claim of deduction u/s. 80IB(10) in respect ....
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....ppeals for the assessment years 2005-06, 2006-07 and 2007-08 there is ground relating to commercial area in the project. The same is not pressed. The ld. DR prayed for setting aside the impugned order and restoring the findings of the Assessing Officer. 4. Au contraire, Shri Sunil Ganoo and Shri Mayuresh Doshi appearing on behalf of the assessee submitted that the assessee has complied with all the conditions as set out in section 80IB(10) claiming deduction. Originally, the project was approved for 206 units. Subsequently, the plan was modified and number of units were increased from 206 to 213 units. The assessee applied for project completion certificate 02-01-2007. The objection was raised only on the ground that soakpits connected with septic tanks were not completed. There was no objection with regard to the completion of dwelling units. The defect pointed out by the local authority was only menial in nature and thus, cannot be said that the project was not completed. Finally, out of 213 approved units, 204 units could be completed, as space of 5 units was utilized for construction of septic tanks and 4 units were left out for proposed D P Road. The ld. AR contended that i....
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....after the removal of shortcomings the local authority issued completion certificate on 04-06-2008. The assessee claimed deduction u/s. 80IB(10) in the impugned assessment years. It is not disputed that the assessee has complied with other conditions as set out in clause (b) to (f) of Sub-section (10). The Assessing Officer disallowed the deduction on the ground that since completion certificate was obtained after 31-03-2008, therefore, the project was completed after 31-03-2008. In first appeal, the Commissioner of Income Tax (Appeals) observed that in the year 2007, the Grampanchyat had issued no objection certificate to the assessee for getting individual electricity connection in all the residential units. The soak pit and drainage system connected thereto becomes relevant and operational only when the septic tank starts overflowing. The septic tank was already in existence. The discrepancy in construction as pointed out by local authority is of venial nature and it would not render the project in eligible for deduction u/s. 80IB(10) of the Act. The Commissioner of Income Tax (Appeals) held that the assessee is eligible to claim deduction u/s. 80IB(10). 6. We find that the is....
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.... 8. In the present case, it is an admitted position that the housing project of the assessee known as 'Runwal Daffodils' commenced with effect from 12.12.2003 and therefore construction of such a housing project was required to be completed on or before 31.03.2008 as stipulated in sub-clause (i) of clause (a) to section 80-IB(10) of the Act. It is also not denied by the assessee that the relevant completion certificate has not been issued by the local authority i.e. PMC on or before 31.03.2008. However, the case setup by the assessee is that the project of the assessee was approved and it commenced on 12.12.2003, which pertains to a period prior to 01.04.2005 i.e. the date on which the amendment which insisted on production of completion certificate was brought into force. In order to appreciate the aforesaid plea of the assessee, we may refer to the provisions of section 80-IB(10) of the Act as it stood prior to the amendment brought by the Finance (No.2) Act of 2004, w.e.f. 01.04.2005 :- "(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent. of ....
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....f 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) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place; (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed three per cent. of the aggregate built-up area of the housing project of five thousand square feet, whichever is higher." 10. In the instant asses....
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....it for occupation at the time when the assessee made application for issuance of completion certificate. It has also not been refuted by the Revenue that in the year 2007, the Grampanchyat had issued no objection certificate to the assessee for getting individual electricity connection in all the residential units. Thus, we are of the considered opinion that the units were completed in all respect and ready for occupation. As far as the deficiency pointed out by the ld. DR with regard to the drainage and septic tank is concerned we concur with the findings of the Commissioner of Income Tax (Appeals) that construction of soakpit which is required to drain excess water from the septic tank of venial nature. The septic tank has substantial capacity to hold the drainage water and it is only in the case of overflow that the water flows from septic tank to the soakpit. This discrepancy pointed out by the local authority was also removed by the assessee. 9. As far as the objection of the Revenue that against 213 units approved the assessee has constructed only 204 units, we do not find any merit in the same. Four units were not constructed as space was left for 9 mtr. Proposed D P Road....