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2010 (6) TMI 776 - ITAT MUMBAIClaimed relief u/s 80IB(1) - profits accruing from the Housing Project - method of accounting - The facts are that the assessee had executed a housing project for which the approval of the Local Authority was obtained. The Commencement Certificate was issued in the name of the assessee. The Assessee has already received the occupancy certificate in respect of Wing A,B & C. on 13.9.2005 & Wing F G & H on 26.9,2006. As regard to the E Wing still 1 to 12 floors the appellant has applied for occupancy certificate on 18.1.2008 after having completed the building which is the last & final wing of the building. The Architect has certified the completion of the building and has applied for the completion certificate on 18.1.08. In the circumstances the Assessee claimed relief u/s 80IB(1) in respect of profits accruing from the Housing Project for the year. HELD THAT:- We hold that the housing project of the assessee is different and distinct from the project for building commercial area by another entity. Housing project does not include construction of the commercial establishment carried out by another entity in that area. Therefore claim of the assessee for deduction u/s 80 IB (10) for the housing project cannot be denied because the commercial project was carried out by a sister concern in the same area. Having accepted the percentage completion method of determining the profits, it will not be correct to hold that such profits before the completion of the housing project, which otherwise satisfies all the conditions of sec 80 IB(10), though assessed as profits from the housing project will not be entitled to deduction u/s 80 IB (10). the profits from the Housing project assessed on a year to year project will be entitled to deduction u/s 80 IB (10), if it otherwise does not contravene the provisions/ requirements of that section. We find that the CBDT has also clarified vide their Instruction No 4 of 2009 dated 30.6.2009 that relief u/s 80IB (10) can be allowed on a year to year basis where the assessee is showing profits on partial completion of the project. If at the end of the period the Assessee is found not to have complied with the provisions of the section- such as failure to complete the project within the permitted time, then the relief granted for earlier years can be withdrawn. In the circumstances we agree with the CIT(A) that relief u/s 80 IB(10) cannot be denied in the case of the assessee merely because completion of the project is a contingent happening in the future. In the circumstances the profits offered by the assessee for the year from the Housing projects, under percentage completion method of accounting, is the profits derived from an eligible project and is entitled to deduction u/s 80 IB. In the result the appeal filed by the Revenue is allowed for statistical purposes.
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