AI Drafter 
TaxTMI 
TaxTMI 
2015 (10) TMI 80
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.... assessee furnished the details of the housing project developed by him. From the details submitted, AO noticed that assessee was developing a housing project on a piece of land admeasuring 7.39 acres at Kompalli, Qutubullapur Mandal, R.R. Dist. Out of the total land, 5.8 aces is owned by assessee and balance 2.31 acres are owned by partners. He further noticed that HUDA has given a technical permission on 07/05/01 for construction of six blocks in the housing project. He further noticed that local authority i.e. Gram Panchayat, Kompalli has accorded permission for construction on 10/05/01 for two blocks named as 'Daffodils' and 'Lotus' on an area of 1.2 acres. As far as the balance four blocks named as 'Prime Rose', 'Lilly', 'Morning Glory' and 'Jasmine' and club house are concerned, permission was granted by HUDA on 20/01/2006 and these four blocks were constructed on land admeasuring 3.28 acres. AO referring to the provisions of section 80IB(10) observed, a housing project approved before 01/04/04, has to be completed on or before 31/03/08, for claiming deduction u/s 80IB(10). Whereas, four blocks for which assessee has claimed deduction u/s 80IB(10) were not completed within th....
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....area of 1500 sq.ft., but, assessee has deviated from the approved plan by converting some of the flats to larger residential units thereby exceeding the prescribed limit of 1500 sq.ft. He, therefore, held that assessee is not eligible for exemption u/s 80IB(10). Though, assessee submitted 91% of the residential units are having plinth area less than 1500 sq.ft. and only 9% of the residential units are having built up area of more than 1500 sq.ft., which assessee himself has disallowed while claiming deduction u/s 80IB(10), but, AO rejected assessee's explanation by holding that even if one residential unit exceeds the prescribed limit of 1500 sq.ft., assessee will not be eligible for claim of deduction u/s 80IB(10). Accordingly, AO completed the assessment by rejecting assessee's claim of deduction u/s 80IB(10). Being aggrieved of the assessment order so passed, assessee preferred appeal before ld. CIT(A). 4. Reiterating the stand taken before AO, it was submitted by assessee before ld. CIT(A) that the approval for the four blocks in respect of which assessee has claimed deduction u/s 80IB(10) was granted by HUDA on 20/01/06 and building plan was approved by Grampanchayat, Kompa....
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....e's housing project approved by HUDA is an integrated housing project consisting of six blocks. He submitted, as the approval by HUDA for the entire housing project was granted on 07/05/2001 and the approval of the local authority i.e. Kompalli Grampanchayat was on 10/05/2001, therefore, for claiming deduction u/s 80IB(10)(a), assessee should have completed the project on or before 31/03/08. Since assessee did not complete four blocks on which deduction u/s 80IB(10) was claimed by assessee for the impugned AY, it is not eligible for deduction. Ld. DR referring to Explanation (i) to section 80IB(10) submitted, in a case where assessee obtains approval for the same housing project on more than one occasion, the first of such approval shall be taken as the date of approval for computing the period of completion. Ld. DR submitted, in the light of explanation to section 80IB(10) since the approval from HUDA for the entire integrated housing project was granted on 07/05/01, assessee should have completed the entire housing project on or before 31/03/08. Since assessee did not complete the entire housing project within the stipulated period, it is not eligible for deduction. Ld. DR submit....
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....d.) 2. CIT Vs. Vandana Properites, [2012] 353 ITR 36 (Bom.) 3. CIT Vs. M/s Voora Property Developers Pvt. Ltd., 373 ITR 317 (Mad.) As far as the second allegation of AO that some of the residential units exceeded prescribed built up area of 1500 sq.ft., ld. AR submitted, assessee cannot be denied deduction u/s 80IB(10) for the entire housing project only because some of the units have exceeded the prescribed built up area. He submitted, assessee himself has disallowed the deduction proportionately in respect of residential units, which exceeded built up area of 1500 sq.ft., which constitute approximately 9% of the total housing project. He, therefore, submitted, there is no reason to interfere with the order of ld. CIT(A). 8. We have considered the submissions of the parties and perused the materials on record as well as the orders of revenue authorities. We have also applied our mind to the decisions relied upon by ld. AR. As is evident from record, AO has rejected assessee's claim of deduction u/s 80IB(10) for the following reasons: 1. The housing project has not been completed on or before 31/03/08. 2. Some of the residential units have exceeded the prescribed ....
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....erned, approval was granted by local authority only on 06/02/06. Therefore, as per the provisions contained u/s 80IB(10)(a)(iii) for a housing project approved by local authority after 01/04/05, the project has to be completed within 5 years for claiming deduction u/s 80IB(10). Since, in the present case, approval by the local authority for the four blocks i.e. Prime Rose, Lilly, Jasmine and Morning Glory was granted on 06/02/06, the department's argument that assessee should have completed the project on or before 31/03/08 cannot be accepted. Even the explanation to section 80IB(10), on which ld. DR has put much stress, would indicate that the date on which local authority has granted its approval for building plan is to be taken as date on which housing project is approved. That being the case, since approval by local authority for the four blocks was granted only on 06/02/06 that should be taken as the date of approval for the purpose of granting deduction u/s 80IB(10). As far as the argument of ld. DR that entire housing project is an integrated one consisting of six blocks, it is to be observed that the term 'housing project' has not been defined u/s 80IB(10) of the Act. As he....