TaxTMI 
TaxTMI 
2018 (8) TMI 1828
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....circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the disallowance of deduction u/s.80IB amounting to Rs. 3,08,46,290/- made by the AO. 2. It is, therefore, prayed that the order of the Ld. CIT (A) be set aside and that the order of the AO be restored. 4. At the very outset we placed on record that the parties have agreed to that the facts and circumstances of both the appeals are similar and identical and only sole issue has been challenged by the Revenue i.e., the relief granted by the ld. CIT(A) holding that the assessee is eligible for deduction u/s. 80IB(10) of the Income Tax Act, 1961 (in short 'the Act'). Thus, for the sake of convenience and brevity, we are taking up appeal for AY 2009-10 as lead case. 5. We have heard the arguments of both sides and carefully perused the relevant material placed on the record of the Tribunal. The ld. Departmental Representative (DR) submitted that the ld. CIT(A) has erred in holding that assesse-firm will be eligible for deduction u/s. 80IB(10) of Rs. 2,65,52,967/-. It is, therefore, prayed that the order of the ld. CIT(A) be set aside and that the order of the Ass....
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.... Voora Property Develop Pvt. Ltd. 373 ITR 317 (Mad), that when the project fulfilled the criteria for being approved as a housing project, the deduction u/s. 80IB(1) could not be denied on the ground that the assessee had obtained a separate plan permits for the six blocks. 8. The ld. AR further drawing our attention towards registered development agreement dated 26.09.2005 available at pgs. 138-151 of the assessee's paper book and the ratio of the decision of Hon'ble Jurisdictional High Court of Gujarat in the case of Radhe Developers reported in 341 ITR 403 (Guj.) submitted that even if the assessee is not owner of the land and has taken the land from the owner for the purpose of building and developing housing project then also the assessee is eligible for deduction u/s. 80IB(10) of the Act. The ld. AR submitted that the assessee has not claimed any deduction u/s. 80IB(10) of the Act on row houses measuring from 2000 sq. ft. to 2200 sq. ft. and has only claimed said deduction on the units below 1500 sq. ft. therefore, contention of the ld. AO as well as ld. DR are not correct and the same are misdirected and based on the irrelevant and misdirected facts there....
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....hich are more than 2000 sq. ft. and thus, the assessee was rightly held as non-eligible for deduction u/s. 80IB(10) of the Act. The ld. DR also submitted that in view of finding of Hon'ble High Court of Madras in para 14 of the decision in the case of Vishwas Promoters Pvt. Ltd. (supra), it is also clear that when the assessee is not satisfying with the conditions prescribed u/s. 80IB(10) of the Act then, the assessee would not be entitled for such claim. The ld. DR submitted that the impugned first appellate order may kindly be set aside by restoring that of the AO. 12. On careful consideration of above rival submissions, we find it appropriate, necessary and profitable to reproduce the relevant paras of first appellate order wherein the ld. CIT(A) granted relief to the assessee, which reads as follows: 5.4DECISION: I have perused the facts of the case. The AR of the appellant explained that though the appellant had purchased the land at Survey No. 882/1/2/2, Amli, Silvassa, vide Agreement dated 18/1/2005 due to court matter Final Sale deed was executed on 31/3/2008. Hence in respect of Flats sold, while executing Sale Deeds, till the said land was....
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....ruction of the housing project on or after the 1st day of October, 1998 and completes such construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008 ; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004, within four years from the end of the financial year in which the housing project is approved by the local authority. Explanation.-For the purposes of this clause,- (i) in a 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) 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) s....
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....tion. Ahmedabad ITAT Appeal No. 1503 of 2008 aptly support the case of the appellant. Thus in my opinion, for claiming deduct U/s. 80IB(10) the ownership of the Land is not a condition and subject to fulfillment of conditions of Section 80IB(10) of the Act, deduction is available, to any Undertaking, which derives profit from developing and building of housing projects. Further, from the perusal of Assessment Order I find that Assessing Officer has nowhere observed that the area of the Flats sold by the appellant is more than the area prescribed except on the Row Houses for which the appellant had paid tax. In support of it's claim, the appellant has submitted Certificate of an Architect certifying that the Built up area of none of the Flats is more than 1500 Sq. Fts. On the other hand, though Assessing Officer has deputed Inspector for the verification of the areas of Flats in the said Housing Project, he has just relied on the observations of the Survey Party. Ignoring the fact that the appellant has not claimed deduction U/s. 80IB(10) in respect of Profit from the Sale of Row Houses Assessing Officer is not justified in denying the claimed deduction U/s. 80IB(10) in respect ....
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....tion to the claim of deduction U/s. 80IB(10). In view of the above, the AO concluded that the appellant is not entitled for the benefit u/s. 80IB(10) of the Act." 14. In view of contentions of the AO and findings and observations recorded by the ld. CIT(A) in the impugned first appellate order, we observe that undisputedly the appellant though had purchased the land survey No.882/1/2/2, Amli, Silvasaa vide agreement dated 18.01.2005 and due to civil dispute pending before the Court final sale deed in favour of appellant was executed on 31.03.2008. Therefore, all the necessary permissions for development of housing project, building and developing of housing project on the said land was obtained in the name of land owner under agreement dated 18.01.2005. The crux of these facts is that the assessee build and develop housing project under agreement dated 18.01.2005 and became owner of the said land on 31.03.2008 when the sale deed executed in favour of the assessee. At this juncture, the ratio of the order of the 'A' Bench of ITAT, Ahmedabad in the case of Radhe Developers vs. ITO (ITA No.2482/Ahd/2006) it was held that to claim deduction u/s. 80IB(10)....
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.... has been claimed as deduction u/s. 80IB(10) of the Act. Thus, in view of ratio of decision of Hon'ble Madras High Court in the case of Vishwas Promoters (supra) claim of the assessee, on the flats which fulfill the conditions laid down provision of u/s. 80IB(10) of the Act is allowable and the ld. CIT(A) was right in allowing the same. 17. So far as last contention of the AO that the entire housing project has to be treated as single unit is concerned, in the case of Vishwas Promoters (supra) Hon'ble High Court of Madras also made it clear that each residential block in a housing project is a 'housing project' in itself for purpose of claiming deduction u/s. 80IB(10) of the Act. Therefore, this contention of the AO is also not correct and sustainable and the first appellate authority was right in dismissing the same. The conclusion arrived by the ld. CIT(A) also gets strong support from the decision of Hon'ble Jurisdictional High Court of Gujarat in the case of Pushkar Construction Co. (supra), wherein their lordship in para 7 held that when the project fulfilled the criteria for being approved as a housing project, the deduction u/s. 80IB(10) of the Ac....