TaxTMI 
TaxTMI 
2023 (10) TMI 1271
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..... 80IB(1) of the Income-tax Act of Rs. 9,91,54,852/- without properly appreciating the facts of the case. 1.1 The Ld CIT(A) failed to consider that in respect of 'Parshwanath Om Residency Project' no approval from the local authority had been obtained before 31.3.2008 and the assessee has violated clause (a)(i) of Section 80(IB)(10) of the Act and was not eligible for deduction u/s 80IB(10) of the Act. 1.2 The Ld. CIT(A) failed to appreciate that by not completing the entire project 'Parshwanath Metro City' consisting of 376 units before 31.3.2012, the assessee has violated clause (a)(iii) of Section 80(IB)(10) of the Act and was not eligible for deduction u/s 80(IB)(10) of the Act. 2. The appellant craves leave to amend alter any ground or add a new ground, which may be necessary." 3. The brief facts of the case are that assessee had claimed deduction under Section 80(IB)(10) of the Act, in respect of two projects namely 'Parshwanath Om Residency Project' ('POR' Project) and 'Parshwanath Metro City' ('PMC' Project). While passing the order, the Assessing Officer observed that the assessee has claimed that the approval of the Project POR was taken on 3....
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.... three blocks (B-1, P-1, and Z-1), which comprised of 21 units. It was submitted that these three blocks were absolutely independent and separate from those blocks in respect of which BU Permission was obtained by the assessee. Accordingly, it was submitted that it was not the case of the assessee that the assessee has not obtained BU Permission for few units in one block but it is the case of the assessee that BU Permission was not received for all the units of two blocks. Accordingly, it was submitted that since these units were in a separate block from those blocks in respect of which approval was granted i.e. BU Permission was obtained, the Ld. Assessing Officer is not justified in denying the entire claim of deduction under Section 80(IB)(10) of the Act. After going through the facts of the assessee's case, Ld. CIT(A) allowed the appeal of the assessee with the following observation:- "So far as disallowance of deduction of POR is concerned, it is observed that deduction under Section 80-16(10) on entire profit derived from this project was denied by AO on the ground that approval of the project was taken on 27th October, 2010 whereas provisions of the Act requires th....
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....DA: On perusal of this letter, it is clear that GUDA has already given in principle approval on 30th March, 2007, which means that such permission is revised development permission. It is also found that at clause No. 37, GUDA has clearly stated that as permission is given on 27th October, 2010, earlier approval of 30th March, 2007 is withdrawn. This fact clearly prove that project in which Appellant has constructed the housing unit was approved on 30th March, 2007. The provisions of Section 80-IB(10) as reproduced herein above also states that when approval of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which building plan of such housing project is first approved by local authority, which in present case is 30th March, 2007. The fact that project is approved in 2007 is also substantiated by Appellant from project expenditure being material, carting, labour expenditure, advertisement and other expenditure as shown in Profit & Loss Account. The Audited Annual Accounts for AY 2010-11 and 2011-12 are already on record of AO which support the contention of Appellant that expenditure pertaining to th....
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....laimed. In this background, Appellant has claimed deduction under Section 80-IB(10) for blocks for which it has received BU permission before prescribed date. Whether each building or block is a separate housing project is not is dealt with by Hon'ble Bombay High Court in the case of CIT V/s Vandana Properties 353 ITR 36 wherein it is held as under: "The expression 'housing project' is neither defined under section 2 of the Act nor under section 80-IB(10). Even under the Mumbai Municipal Corporation Act, 1988 as also under the Development Control Regulations for Greater Mumbai, 1991, the expression 'housing project' is not defined. Therefore, the expression 'housing project' in section 80-IB(10) would have to be construed as commonly understood. [Para 18] The expression 'housing project' in common parlance would mean constructing a building or group of buildings consisting of several residential units. In fact, the Explanation in section 80-IB(10) supports the contention of the assessee that the approval granted to a building plan constitutes approval granted to a housing project. Therefore, it is clear that construction of even....
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.... do not find any infirmity in the findings of Commissioner of Income Tax (Appeals) in allowing pro-rata deduction to the assessee in respect of completed residential units. Accordingly, ground Nos. 2 and 3 of the appeal by the Revenue are dismissed being devoid of any merit." The decision referred supra are on similar facts with the facts of the Appellant's case and ratio of this decision which has in turn followed the decision of Hon'ble Bombay High Court squarely applied to the facts of the Appellant's case. During the course of Assessment Proceedings, Appellant has relied upon various decisions in its written submission dated 30th October, 2017, which inter alia, refer to decision of Hon'ble Hyderabad ITAT in the case of Vertex Homes Pvt. Limited 62 Taxmann 285. The head note of said decision is as under: Section 80-IB of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertaking other than infrastructure development undertakings (Housing project) - Assessment years 2010-11 and 2011-12 - Assessee company was engaged in business of construction of residential apartments/housing projects - In terms of construction agreement, assessee had to cons....
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.... facts of these decisions with the facts of Appellant's case nor brought on record how ratio of these decisions cannot be made applicable to present case. Even in entire Assessment Order the Assessing Officer has not brought any contrary decision which can support his contention. During the course of appellate hearing, Appellant has also relied upon following decisions of Hon'ble Pune ITAT and ratio of these decisions are also applicable on facts of the case. (i) Hon'ble Pune Bench in case of Rahul Construction Co. reported in 21 taxmann.com 435 (ii) Hon'ble Pune IT AT in case of Anand Ashok Gandhi in IT A No. 20047 PUN/2014 dated 25.05.2016 "Claim of pro-rata deduction u/s. 80IB(10) - non-completion of the few buildings -Held that- We find the assessee in the instant case is an individual and engaged in the activity of Promoters and Builders in the name and fashion of "Harshad Constructions". During the impugned assessment year the assessee has constructed a housing project at Ashok Nagar, Handewadi Road, Hadapsar, Pune. The commencement certificate for this project was received by the assessee on 14-02-2007 which was subsequentl....
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....ousing project except the so called 189 sq. mtrs. of land under road widening. The action of assessee proves that he had partially completed the construction of building and carried out on the same till 2010-11 by which, it is proved beyond doubt that he had not completed housing project within the prescribed period of four years. The matter was carried before first appellate authority, wherein the various contentions were raised on behalf of assessee and having considered the same, the CIT(A) granted relief to the assessee on this account as well. The same has been opposed before us on behalf of revenue. On the other hand, the learned Authorized Representative has supported the order of CIT(A) on the issue. 8.1 After going through the rival submissions and material on record, we find that the issue before us is with regard to prorata deduction u/s. 80IB(10). On the issue of prorata deduction, the ITAT Pune Bench has allowed prorata deduction u/s. 80IB(10) in the case of Ramsukh Properties Vs. DCIT, Circle 1, Pune in ITA No.84/PN/2011 vide its order dated 25.07.2012. For the convenience, the relevant portion of the order reads as under: "We agree to proposition pu....
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.... Under the circumstances, proportionate deduction u/s. 80IB(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." 17. In view of categorical finding of the Tribunal that where the project in respect of buildings 'A' and 'B' has been completed by 31.03.2009 and where non-completion of building 'C' was beyond the control of assessee, since it had not received FSI within stipulated period, we find no merit in the orders of authorities below in denying deduction under section 80IB(10) of the Act to the assessee for prorata units completed by the assessee before stipulated date. The issue in this regard is settled by various decisions of the High Courts including the decision of Hon'ble Bombay High Court in CIT Vs. Vandana Properties reported in 353 ITR 36 (Bom), wherein it has been held that the developer is entitled to prorata deduction under section 80IB(10) of the Act on the completed units. (iv) Hon'ble Pune ITAT in case of M/s Varun Developers in ITA No. 1624/PN/2011 dated 22.03.2013 In view of detailed discussion made herein above and the contention of AO that BU per....
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....ther, it was submitted that GUDA had granted permission for development vide Certificate dated 27.10.2010 and it can be seen that the said Certificate had issued in prescribed format as per Rule 10 which is quite different from the letter issued on 30.03.2007. Further, the Ld. D.R. submitted that GUDA had furnished reply of the Assessing Officer in response notice under Section 143(6) of the Act related to POR Project. On perusal of the reply, it is seen that GUDA had provided the copy of permission for Development Certificate 27.10.2010. However, there is no mention of alleged approval letter dated 30.03.2007, which shows that the letter dated 30.03.2007 was not a Permission Certificate for development but simply a letter of acknowledgement of application filed by the assessee. With regard to the PMC Project, it was submitted that on perusal of the BU Permission letter, it is also seen that the AUDA had granted BU Permission for completed 349 Units. It is an undisputed fact that the assessee completed only 349 Units before 31.03.2012 as against original approval for 396 residential Units which was given on 30.03.2007. Therefore, the Assessing Officer was correct in holding that th....
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.... obtained on 30.03.2007. Further, the Ld. CIT(A) has also correctly observed that the provisions of Section 80(IB)(10) of the Act clearly provides that when approval of the Housing Project is approved more than once, such Housing Project shall be deemed to be have approved on the date on which the building plan of such Housing Project is first approved by the local authority, which in the present case is 30.03.2007. Accordingly, Ld. CIT(A) in the instant facts has correctly allowed the appeal of the assessee with respect to the POR Project. 8. Before going to the specific facts of the POR & PMC Projects, we shall first adjudicate on the issue deduction under Section 80(IB)(10) of the Act with respect to these two Projects. The issue for consideration before us is that when the Assessing Officer, on identical set of facts has granted deduction under Section 80(IB)(10) of the Act with respect to the aforesaid projects, can the approval be withdrawn in the subsequent years, without pointing out to any change in facts. We observe that in the case of Saurashtra Cement & Chemical Industries Ltd. 123 ITR 669 (Guj.) the Hon'ble Gujarat High Court has held that in respect of income from ....
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....g plan of such Housing Project is first approved by local authorities, which in the present case is 30.03.2007. Accordingly, in view of the above facts, we are of the considered view that the Ld. CIT(A) has not erred in facts and in law in holding that the assessee was eligible for deduction under Section 80(IB)(10) of the Act with respect to POR Project. 9. Now we shall come to the facts of the PMC Project, wherein the issue for consideration before is this that the BU Permission was obtained in respect of only 349 Units out of a total of 376 Units and therefore, can the assessee be allowed to take benefit of deduction under Section under Section 80(IB)(10) of the Act only with respect to the Units which have been completed, or whether the entire claim of deduction under Section 80(IB)(10) of the Act has to be denied to the assessee with respect to PMC Project. We observe that in the case of ITO vs. Saket Corporation 62 taxmann.com 38, the Gujarat High Court held that where assessee had completed construction of its entire Housing Project and applied for BU Permission / Completion Certificate within prescribed time limit, it would be entitled to deduction under Section 80(IB)(1....
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....or the Hon'ble Apex Court. We do not find any infirmity in the findings of Commissioner of Income Tax (Appeals) in allowing pro-rata deduction to the assessee in respect of completed residential units. Accordingly, ground Nos. 2 and 3 of the appeal by the Revenue are dismissed being devoid of any merit." 10. Further, the Ld. CIT(A) has also cited various decisions which have held that the assessee is eligible for claim of pro-rata deduction under Section 80(IB)(10) of the Act. In the case of Models Construction Pvt. Ltd. 124 taxmann.com 513 (Bombay), the High Court held that pro-rata deduction can be granted under Section 80(IB)(10) of the Act. In the case of Sreevatsa Real Estates Pvt. Ltd 42 taxmann.com 329 (Madras), the High Court held that where assessee engaged in property development claimed deduction under section 80-IB(10), Tribunal rightly concluded that assessee was entitled to pro rata deduction in respect of units which had built up area of less than 1500 sq. ft. and, thus, there could be no disallowance of entire claim if built area of some of units exceeded 1500 sq. ft. In the case of Arun Excello Foundations (P.) Ltd. 29 taxmann.com 149 (Madras), the High Court he....
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....2296/2007 To Shri Navnitbhai C. Patel etc 50 3 Floor, Harsiddh Chambers Ashram Road, Ahmedabad 30/03/2007 Sub-Regarding according of permission for development Ref: Your application dated 21/03/2007 of PRM/ Adalaj/280/03/2007 of MoujeAdalaj for development of land of Final Plot No. 35 of R.S.No. 1367 of TP.10 for the purpose of residential buildings Sir With reference to abovestated letter, it is informed that permission is granted in respect of your application filed for development. However, as per the Revenue Department's Resolution No. BKHP/10/102001/2685/K dated 16/02/2004, the copy of order/letter of permission and copy of approved lay- out plan, key-plan, building plan shall be given on production of order of permission for Non-Agricultural Use obtained in respect of said land from the Competent Authority under Land Revenue Code Clause-65. Copy to: District Development Officer Office of District Panchayat Gandhinagar for information. Sd/- Junior Town Planner Gandhinagar Urban Development Authority Gandhinagar Document 2 ૪, ગાંધીનગર શહà«....
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....à«€ ૪à«à«« 12 2017 '' pa જોવર નગર નિયોજક ધીનક કી + માં ગાંધીનગર Document 3 Translation of Page No. 26 of Paper Book -Parshwanath Corporation A.Y. 2012-13 Schedule GH (Rule-10) Permission for Development Shri NavnitbhaiChunibhai Patel and Indiraben N. Patel, Rushabh N Patel etc are accorded permission for development of land for residence,subject to the conditions herein mentioned, admeasuring 8,549Sq.Mts of Sub Plot No. of Final Block No.35 of Original Block No. 35 of Revenue Survey No: 1367 of Gandhinagar T.P.S.No: 10 of Mouje Village Adalaj. Taluka: Gandhinagar, District: Gandhinagar under Clause 29 (1)(1), 29(1)(2) 49(1)(kh) of Gujarat Town Planning & Urban Development Actm,1976 (President Act No. 27). Description of work: Planning of A,B,C,D,EFGHIJKLMNOPQRST type Sr. Floor Area Sq.Mts) of Use of Construction No. of units Construction (1) 1 (2) (Built up) (3) (4) (5) TheIn Cellar/ 2345678 ....
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.....-1,2,15,16,17,18,19,20 ટાબીટ ને નમન કે જાનૠકà«àª·à«‡àª¤à«àª°àª«àª³ 28176.00 ચો.મી. છે. તે બિલà«àª¡à«€àª‚ગ, ફà«àª²à«‡àªŸ / બà«àª²à«‹àª• નà«àª‚ .... ટેનામેનà«àªŸ નંબર BLOCK- AB, C, D,F,G, A1,C1,D1,J&K,L,N&O,P&z,Q 2 જ અમદાવાદ શહેરી વિકાસ સતà«àª¤àª¾àª®àª‚ડળ વિસà«àª¤àª¾àª°àª®àª¾àª‚ આવે છે. જેમાં તા. 14/02/2012 ની આપની અરજીનાં સંબંધે અતà«àª°à«‡àª¥à«€ તા. 15/02/2012 ના રોજ કરાયેલ સà«àª¥àª³ નિરિકà«....
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....2UNET 12G - FIRS, AI C1 721-84 #Unga UNIT BLOCK-3SKIP=48 વિકાસનà«àª‚ ઉપયો ફà«àª²à«‹àª° - સેલર/ાંચર 2 àªàª²à«‹àªªà«àª²à«€àª¨à«àª¥ 11567.84 PARKINGER F 3 ગà«àª°àª¾àª‰àª¨à«àª¡ ફà«àª²à«‹àª° 11676.52 RESI+SOCLof નà«àª‚ ફરà«àª¸à«àªŸ ફà«àª²à«‹àª° 11567.54 RESIDENTIAL 215 5 સકા કà«àª²à«‹àª° 11567.84 RESIDENTIAL 116 UNIT BLOCK-BOKER UTT STAIR CALIN+LIFT 765.95 HACHINE ROOM 9.OCK-CHATT BLOCK- 47145.99 PARKIN REST SUCLOFF 3481-1 ગમ 3.TU,M&KY SUIT 130 29 MAR 2012 6/2/12/2007;1511705/03/2011 CHP/4131/2/2012/194 સà«àª¬àª¹ VIR17 AUDA લવાના કરà«àª¯à«àª‚. મારફત T 20CD મદદનીશ નગર નિયોજ અમ....
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....ª¾àª‚ તેમની હદમાં નીચે વરà«àª£àª¨ કરà«àª¯à«‹ પà«àª°àª®àª¾àª£à«‡ આ સાથેની શસà«àª¤à«‹àª¨à«‡ બાધીન વિકાસ પરવાનગી આપવામાં આવે છે. સà«àª®àª¨ વાવા yours of Yau 2 શાયર બાબીનà«àª¯ ||નà«àª¡ ફà«àª²à«‹àª° 1 કટ ફાઈર કાકા કાલોટ હોસà«àªŸà«‡àªŸ કેબીન આંચકા માહિગાનà«àª‚ ઉપયોગી કà«àª·à«‡àª¤à«àª°àª«àª³ (ચો.મી ) 3 બાંધકામનો ઉપàª....