TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 2235
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.... Commissioner of Income-tax(Appeals) grossly erred in deleting the disallowance made by the Assessing Officer of the assessee's claim of deduction of Rs. 6,64,09,622/- in respect of the housing project "Kumar Primavera" instead of confirming the" said disallowance. 3. The Id. Commissioner of Income-tax(Appeals) grossly erred in holding that buildings No. A-1 and A-2 constituted a separate "housing project" independent of buildings No. A-3 to A-8 and further that as the buildings A-l and A-2 had been completed before 31.03.2009, the assessee was entitled to deduction u/s. 80IB(10). 4. The Id. Commissioner of Income-tax(Appeals) grossly erred in failing to appreciate that buildings A-3 to A-8 formed part of the same one housing project which included buildings A-l to A-2; and as the assessee had not completed buildings A-3 to A-8 before 31.03.2009, it was not entitled to deduction u/s. 80IB(10) in respect of the "Kumar Primavera" project. 5. The Id. Commissioner of Income-tax(Appeals) grossly erred failing to appreciate that the plan in respect of buildings A-3 to A-8 were a mere revision of the original plan and further that buildings A-3 to A-8 were merely in the natur....
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....2005. The phase-I of the project was approved for parking + 7 floors, whereas the commencement certificate in respect of phase-II was obtained on 08-09-2006. An approval was granted for construction of parking + 9 floors of the buildings. At the time of grant of commencement in respect of phase-II i.e. on 08-09-2006, the plan for phase-I was also revised and two more floors were added to the buildings A1 and A2. The plan was revised for phase-I vide same communication in which the approval for commencement in respect of buildings in phase-II i.e. A3 to A8 was granted by PMC. The assessee had obtained completion certificate in respect of buildings in Phase-I on 05-09-2008 and in respect of Phase-II in March, 2011. During the course of scrutiny assessment proceedings for the assessment year 2008-09 the Assessing Officer appointed the commission u/s. 131(1)(d) and sought report from Registered Valuer (Category-I) with respect to the projects. The Registered Valuer vide his report dated 29-11-2010 inter alia observed that the plot area of the project is 6.15 acres, the area of each flat in the buildings constructed is less than 1500 sq. ft., there are total 288 flats in 8 buildings of ....
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....d even on 29-11-2010, as the completion certificate in respect of 80 flats was still pending. The assessee in order to circumvent the provisions of section bifurcated the project in two phases i.e. Phases-I comprising of buildings A1 and A2 and Phase-II comprising of buildings A3 to A8. The total area of the project was 24902.715 sq. mtrs. The assessee bifurcated the area i.e. 4642 sq. mtrs. for Phase-I and 12458 sq. mtrs. for Phase-II. This bifurcation made by the assessee is an afterthought. There was no such bifurcation at the time of seeking approval for the alleged Phase-I. The fact that the buildings have been numbered consecutively from A1 to A8 itself shows that they are part of one single project. A perusal of the Auditor's report would further make it clear that there is no mention of two separate projects. No separate books of account are maintained for the alleged two separate projects. An examination of books of account does not show that there are two projects. Ld. AR pointed out that the completion certificate issued in respect of flats does not mention that the flats are in Phase-I and Phase-II of the project. There is no document on record which would support the t....
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....n the case of ACIT Vs. Viswas Promoters (P.) Ltd. (supra) by the Chennai Bench of the Tribunal on which the ld. DR has placed reliance has been reversed by the Hon'ble Madras High Court vide judgment dated 02-11-2012 reported as 214 Taxman 524 (Madras). In support of his submissions, the ld. AR submitted that the project can be completed in part and the assessee is eligible to claim deduction u/s. 80IB(10) on the part completion of the project if all the conditions laid down in section 80IB(10) are satisfied. In support of his submissions he placed reliance on the following case laws: i. CIT Vs. Vandana Properties, 76 DTR 363 (Bom HC); ii. Viswas Promoters Private Limited Vs. ACIT, 214 Taxman 524 (Madras HC)); iii. Rahul Construction Vs. ITO, 51 SOT 192 (Pune-Trib.); iv. Mudhit Madanlal Gupta Vs. ACIT, 51 DTR 217 (Mum-Trib.); v. ACIT Vs. Octave Exports, 36 ITR (T) 1 (Chandigarh-Trib.). 5. We have heard the submissions made by the representative of rival sides and have perused the orders of authorities below. We have also considered the decisions on which reliance has been placed during the course of making submissions. The undisputed facts as emerging from the r....
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....spect to area of plot, size of each flat, etc. The only dispute is whether the assessee can bifurcate the project in two parts on the basis of commencement certificate and claim deduction u/s. 80IB(10) on the same by treating them as sub-projects under the larger project. 8. The Commissioner of Income Tax (Appeals) allowed the claim of assessee by holding as under: "3.3. ................ It is an established position of law now as per various decisions of various Tribunals including the Pune Tribunal, that the "project" is not defined in the Income tax Act and therefore, it has been interpreted liberally on the basis of commercial considerations and commonly understood views. The clarification issued by the CBDT vide dated 4.5.2001 has been often considered for this interpretation. As per the letter F. No. 205/3/2001/ITA-II dated 4.5.2001 it has been stated that "the additional housing project on existing housing project site car qualify as infrastructure facility u/s 10(23G) and 80IB(10), provided it it taken up by a separate undertaking having separate books of accounts so as to ensure that correct profit can be ascertained for the purpose of 80IB and also to identify receipts....
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....named as A1 and A2 on 02-02-2005. It was after the time lag of 18 months that the approval of other six residential buildings was obtained by the assessee on 08-09-2006 from PMC, while seeking initial approval there was no mention of other buildings. The observation of the Assessing Officer that the subsequent approval by PMC is not fresh approval but revised approval in our opinion does not carry weight. The building plan has been revised for buildings A1 and A2 only. As regards other buildings i.e. A3 to A8 is concerned the building plan was approved for the first time. It is not disputed by the Revenue that buildings A1 and A2 in Phase-I were complete and occupation certificate was granted by the PMC in respect of said buildings on 05-09-2008. In so far as buildings A3 to A8 in Phase-II are concerned, the completion certificate in respect of all the flats comprising in said buildings were granted by PMC up to March, 2011, whereas, the last date for obtaining completion certificate was 31-03-2012. Thus, the assessee had obtained completion certificates well within the time frame mentioned in the provisions of section 80IB(10) of the Act in respect of all the buildings in Phase-I....
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....here a new housing project is constructed on a plot of land having minimum area of one acre but with existing housing projects would qualify for Section 80IB(10) deduction. Even otherwise, the argument of the Revenue does not stand to reason because, in the city of Mumbai where there is acute space crunch, it is difficult to find a vacant plot having minimum area of one acre and even if few such plots are existing it cannot be said that Section 80IB (10) deduction was intended to give benefit only to the undertakings who construct housing projects on those few plots. Therefore, it is clear that on a plot of land having minimum area of one acre, there can be any number of housing projects and so long as those housing projects are approved by the local authority and fulfill the conditions set out under Section 80IB(10), the deduction there under cannot be denied to all those housing projects. Section 80IB(10) while specifying the size of the plot of land, does not specify the size or the number of housing projects that are required to be undertaken on a plot having minimum area of one acre. As a result, significance of the size of the plot of land is lost and, therefore, the assessee....
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....sued by the local authority." The very reading of above Explanation (i), it makes clear that for the eligibility of the deduction provided u/s. 80 IB (10) of the Act, the date on which building plan of such housing project has been firstly approved by the local authority will be treated as approval in respect of the housing project. When we read Explanation (ii) with Explanation (i) it makes clear that completion of construction of such building plan first approved by the local authority will be taken the date of completion of construction of such building plan when completion certificate has been issued by the local authority. In other words, in clause (i) of the Explanation, it has been made clear that would be the housing project, first approval of which, by the local authority would be taken as starting point of the Housing Project and in clause No. (ii), it has been made clear that what would be the Completion Certificate in respect of such housing project issued by local authority to compute the prescribed time limit for verification of eligibility of assessee for the claimed deduction. In view of the above explanation, we find substance in the contention of the ld. A.R. that....
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....he Completion Certificate in respect of such housing project issued by the PMC. When we examine the facts of the present case under the above background, we find that the authorities below have not disputed the fact furnished in this regard by the assessee that under the project "Atul Nagar" consisting of buildings A1 to A5, the first building plan for A type was approved by the PMC on 29.4.2003 vide Commencement Certificate No. 4269 (page No. 4 of the paper book). However, actual construction of A type building was executed as per the revised plan vide No. C.C. 4101/27/6/2003 (PAGE No. 5 of the paper book). The size of the plot on which the A type building i.e. A1 to A6 have been constructed is 1,39,466 sq.ft. The project A type building i.e. A1 to A5 consists of 360 residential units and the construction has been completed between 10.1.2005 to 31.8.2005 (page Nos. 6 to 9 of paper book). The authorities below have also not disputed this material fact that residential units has a maximum built up area of 1500 sq.ft. Likewise, these material facts that B Group buildings in "Rahul Nisarg Cooperative Housing Society Ltd.," have been constructed on land area of 138203 sq.ft., has not b....