TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 1794
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....110/2013-14/30). Aggrieved by the order of ld. CIT(A), Revenue is now in appeal before us and has raised the following grounds :- "1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing deduction u/s. 80IB(10) of the Act in respect of project 'Parkland' even though the provisions of sec. 80IB(10)(a)(iii) and sec. 80IB(10)(c) of the Act are not satisfied in the case of the said project. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not appreciating the fact that the house project had not been completed by 31/03/2012, thus violating the conditions provided in clause (a) to section 80IB(10) of the Act. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not appreciating the import of Section 80IB(10) of the Act which speaks about sanction to the 'housing project' and not to the individual building in the project. 4. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing prorata claim of deduction u/s. 80IB( 10) of the Act in respect of eligible blocks 1 buildings and units 1 flats i....
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....iced that five row houses (F1 to F5) had area in excess of 1500 Sq.Ft. AO therefore concluded that there were violation of conditions of Sec.80IB(10) namely that the project was not completed within 5 years from the date of commencement and secondly 5 Units of the Housing Project were measuring more than 1500 Sq.Ft. and therefore assessee was not eligible for deduction u/s80IB(10). The submission of the assessee that the construction of the project was as per the sanctioned plans and revised sanctioned plans and as per the plans the building "C" was covered only till plinth stage due to FSI issues was not found acceptable to AO. Its submission with respect to areas exceeding 1500 Sq.Ft that for considering the built-up area, the terrace area needs to excluded was also not found acceptable to the AO. AO therefore denied the claim of deduction u/s 80IB(10). Aggrieved by the order of AO, assessee carried the matter before CIT(A), who decided the issue in favour of the assessee by holding as under : 3.6 I have considered the submission made by the appellant and perused material on record. The only issue raised by the appellant relates to the disallowance of the claim of deduction u/s....
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.... amenity space and the DP road is not completed because the PMC has shifted the 9 meter DP road in the development plan of Baner and Balewadi through EP 32. The appellant has filed the copy of the notification dated 18-9-2008 issued by the govt. of Maharashtra, Urban Development Dept in this regard. Thus on the final sanction of Development plan by the govt. of Maharashtra the process of handing over of the areas of amenity space and DP road will be completed. However, as the development plan is pending for sanction before the State Govt. and the appellant firm for the said reasons could not start and complete the building 'C' of the project. However, the construction, sanction and approval by the original and subsequent revised plans has been fully completed by the appellant firm and the required occupancy/completion certificate also obtained prior to the specified date i.e. 31-3-2012. Thus it can be noticed that the construction of building 'C' could not be completed because of the fact that the required FSI for construction has not yet been sanctioned and allowed by the PMC and no pending compliance remains on the part of the appellant. In such a situation and circumstances wher....
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....on as laid down in section 80IB(10)(a) could not be complied with because of a stay being granted by MRTP Court. Thus fault of non completion of construction was not attributable to assessee. In case such a contingency emerges which makes the compliance with provision impossible, then benefit bestowed on an assessee cannot be completely denied. Such liberal interpretation should be used in favour of assessee when he is incapacitated in completing project in time for the reasons beyond his control. In case before us, as stated on behalf of assessee, that assessee submitted certain modifications/rectifications for top floors of buildings. The said modification/rectification could not be completed as local authority could not approve the modification as their files have been taken over by concern intelligence department for investigation of violation of urban land ceiling Act applicable to land in question at relevant point of time. This fact has not been disputed on behalf of revenue. Thus, assessee was prevented by sufficient reasonable cause which compelled the impossibility on part of the assessee to have completion certificate in time. It is settled legal position that the law al....
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....ra) as discussed above, the CIT(A) rightly allowed the proportionate deduction in respect of project completed during the impugned assessment year. The provisions of taxing statute should be construed harmoniously with the object of statute to effectuate the legislative intention. Under the circumstances, proportionate deduction under s. 80-IB(10) of the Act is justified. Accordingly, the order of CIT(A) on this issue needs no interference from our side. We uphold the same............" In the present case the construction of the project has the sanctioned plan dated 4-8-2006 and further revised commencement dated 18-11-2006, 3-2-2007, 13-2-2008, 21-7- 2011 has been totally completed before the specific date i.e. 31- 3-2012. The construction of the 'C' wing has not started till date as the required FSI for construction of the building 'C' is not available with the appellant firm and which will be given in lieu of amenity space and 9.0 meter DP road to be sanctioned by the local authority. However, the PMC has shifted 9 mtr. DP road in development plan of Baner & Balewadi and only on final sanction of development plan by the govt. of Maharashtra the process of handing over of the ....
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....vt. authorized valuer and that by the architect of the appellant is as under: Sr. No. Row House Area as per assessee (sq. ft.) Area actually measured (sq. ft.) 1 F1 1451 1919 2 F2 1495 1603 3 F3 1360 1534 4 F4 1421 1618 5 F5 1423 1632 It is found that there is one or two terrace area exclusively for each row house. The details are as below: Sr. No. Row House Terrace-1(sq. ft.) Terrace-2(sq. ft.) Total 1 F1 216.33 222.11 438.44 2 F2 90.18 - 90.18 3 F3 120.24 - 120.24 4 F4 128.12 - 128.12 5 F5 128.12 - 128.12 The authorized valuer has added the area of the car porch, terrace area above porch, formed open to sky terraces area above living room and bedroom in the measurement of row house whereas the appellant's architect has excluded the aforesaid areas in its calculation for the built up area of the row houses F1 to F5. Thus, if the terrace area which is open to sky is excluded from calculation of area the built up area, the total area of the units do not exceed the 1500 sq ft limit as per sec 80IB(10)(c) in respect to three units. It has been the contention of the appellant that the valuer has wrongly included the area of the ....
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....ilt-up area is to be worked out from the wall of the residential unit. The question of extending it to mean that the area within the compound around an open land is erroneous. the Division Bench of the Madras High Court in the judgment reported in - 2012-TIOL-951-HC-MAD-IT in the case of the CIT, Channai V/s M/s Mahalakshmi Housing has held that the open terrace area cannot form part of the built up area; in the result, the assessee would be entitled to deduction u/s 80-IB(10) and that the assessee would be entitled to proportionate relief as regards the units having built up area not more than 1500 square feet. Considering the ratio laid down in the aforesaid judgments, we find that the area of courtyard cannot be included to calculate the built-up area in terms of Section 80- IB(10). Tribunal was not justified to come to the conclusion that the said area of the courtyard is to be included to calculate the built-up area and thereby holding that the residential unit was more than 1500 square feet which would disentitle the appellant to claim such deduction. The contention of the counsel appearing for the respondent that the findings of the fact arrived at by the Tribunal cannot be ....
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....port in the decision of the ITAT Ahmedabad in the case of Safal Associates Vs ITO ITA No.520/Ahd/2011 and ACIT Vs Yug Corporation ITA No.2703/Ahd/2009. In the case of Amaltas Associates Vs ITO (2011) 142 TTJ 849 (Ahd)., the ITAT with respect to the inclusion of terrace in the built-up area - the head note reads as follows: "As per the terms of the development agreement between the parties, planning, sanction of plan, construction work, development of property, labour engagement activities are to be carried out by the assessee .................................................................................... There was no bar on the assessee to construct more flats or units than that originally stipulated in the agreement- Once the plan was approved by the municipal authorities on the basis of the papers submitted by the real owner, it could be deemed as approval in favour of the assessee, more so, as the assessee entered into an agreement to sell the whole of the property-Hence, the objection of the authorities below that the assessee constructed 110 units as against 94 units mentioned in the agreement is not sustainable in law-As per the definition given in s. 80- IB(14)....
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....vey Nos.44, 45 and 51/1 of Bangalore South Taluka. This macro project comprised certain housing blocks, community hall etc. as its micro components. It comprised, among other things, 5 residential blocks by name Mayflower, Cassia, Magnolia, Jacaranda and Laburnum. Approval had been obtained from BDA on 24-5-2002. The assessee took two blocks separately, viz., Mayflower and Cassia, and claimed the benefit of deduction u/s.80IB of the Act in respect of the said two blocks, claiming them to be separate projects, as only the said two blocks could fulfill the requirements prescribed u/s.80IB of the Act. The AO, however, denied the claim of deduction u/s.80IB treating Brigade Millennium as only one project. The Tribunal, after considering the facts, observed that the use of the words "residential units" means that deduction should be computed unit-wise. Therefore, if a particular unit satisfies the conditions of sec.80IB, the assessee is entitled for deduction. Therefore, the Tribunal upheld the order of Id. CIT(A) in allowing deduction u/s.80IB(10) in respect of two blocks as claimed by the assessee. 3.8.2 In ITO Vs AIR Developers (supra) The tribunal held that "Assessing Officer is ....
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....es clear that the date of completion of construction of such housing project would be taken 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 date of first approval of housing project 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 the date of completion certificate in respect of such housing project issued by local authority will be considered to compute the prescribed time-limit for verification of eligibility of assessee for the claimed deduction. In view of the above Explanation, approval of the housing project and approval of building plan are two different concepts. Thus Part A of the project comprising of building A1 and A2 is a separate project and which satisfies all the conditions stipulated u/s 80IB(10) and hence the appellant is very much entitled to claim the deduction u/s 80IB(10) of the Act on Part A of the buildings A1 and A2............" 3.8.6 In the case of M/s Runwal Multihousing Pvt. Ltd Vs ACIT (Supra) after considering various judicial precedents of different High courts and co-....
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....assessee would be entitled to the relief on a proportionate basis. Similar view was also taken by the Madras High Court in the case of CIT Vs Arun Excello Foundation (P) Ltd (2013) 212 taxman 342 (Mad) wherein it was held that in a given case when the housing project @ 100% residential units satisfies other clauses (a) and (b) and the built up area given under clause (c) of sec 80IB(10) of the Act, there would be no difficulty for the revenue to grant the deduction. The question becomes a little complicated when 100% residential housing project has built up area of mixed nature while few of the units may satisfy the criteria of the built up area of less than 1500 sq.ft, there may be units which have built up area crossing the limit as specified in clause (a) of sec 80IB(10) of the Act. In such event on a reading of the provision, it is held that the assessee would not be entitled to have the benefit of 100% absolute deduction u/s 80IB(10) of the Act in respect of the entire project, but would be entitled to pro rata deduction on the units satisfying the conditions........." 3.8.9 In DCIT Vs Ekta Housing (P) Ltd (2011) 41 (II) ITCL 404 (Mum) it was held that in cases certain resi....