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2013 (10) TMI 1295 - AT - Income TaxDeduction u/s.80-IB(10) denied - profits derived from developing and building a housing project - SWRH and S3 projects could not be considered as separate projects undertaken by the assessee as held by revenue - Held that - The decision of the Pune Bench of the Tribunal in the case of Hindustan Samuha Awas Ltd. (2011 (8) TMI 1061 - ITAT PUNE) is clearly applicable in the present case inasmuch as the assessee applied for obtaining completion certificate for the two row houses before 31.03.2008 i.e. on 26.03.2008 and the said application was based on a certificate issued by the Architect. Factually also the facts on record supported by the Property Tax bills Architect s certificate occupation by users etc. support the position that prior to 31.03.2008 construction of the two row houses was complete. Pertinently the completion certificate of PCMC regarding the two row houses in question which is dated 28.06.2012 clearly states that it is issued with effect from 26.03.2008. Therefore even the PCMC certification supports the position that the construction was complete as on 26.03.2008 which in our view is in substantive compliance with the requirements of section 80-IB(10)(a)(i) read with Explanation (ii) thereof. In so far as the balance of 293 row houses is concerned there is no dispute that the completion certificate has been issued by PCMC prior to 31.03.2008. Therefore considered in respect of entire 295 units comprised in SWRH project the date of completion of construction is to be understood as on or before 31.03.2008 thereby complying with the requirement of section 80-IB(10)(a)(i) read with Explanation (ii) thereof. We therefore hold that assessee is eligible for deduction u/s. 80-IB(10) of the Act of 12, 76, 88, 137/- with respect to the profits derived from SWRH project for assessment year 2006-07. - Decided in favour of assessee.
Issues Involved:
1. Eligibility for deduction under Section 80-IB(10) of the Income Tax Act, 1961. 2. Whether 'Shubhashree Woods Row Houses' (SWRH) and 'S-cube' (S3) projects are separate or a single housing project. 3. Compliance with the condition of completion of construction by the stipulated date. Detailed Analysis: 1. Eligibility for Deduction under Section 80-IB(10): The appellant, a partnership firm engaged in developing and building housing projects, claimed deductions under Section 80-IB(10) for profits derived from the 'Shubhashree Woods' project for assessment years 2006-07 and 2007-08. The income-tax authorities denied the deduction on the grounds that the project was not completed within the stipulated period as required by Section 80-IB(10)(a)(i). 2. Separate or Single Housing Project: The key dispute was whether the 'SWRH' project (295 row houses) and 'S3' project (316 flats) were separate projects or a single composite project. The Assessing Officer and CIT(A) treated them as a single project due to common approvals from PCMC and shared FSI. However, the Tribunal found that the two projects were marketed, executed, and perceived as independent projects. The Tribunal noted that the expression 'housing project' is not defined in Section 80-IB(10) and should be construed as commonly understood. References were made to various judicial precedents, including the Bombay High Court's decision in CIT vs. M/s. Vandana Properties, which supported the view that even a single building or group of buildings could constitute a 'housing project'. 3. Compliance with Completion Condition: The Tribunal examined whether the 'SWRH' project was completed by 31.03.2008. The Assessing Officer noted that completion certificates for only 293 out of 295 row houses were obtained by the stipulated date. The Tribunal admitted additional evidence showing that the completion certificate for the remaining two row houses was issued by PCMC on 28.06.2012 but effective from 26.03.2008. The Tribunal held that the delay in issuing the completion certificate was not attributable to the assessee and that the project was substantively complete by 31.03.2008. This conclusion was supported by property tax bills and the occupation of the row houses by customers before the stipulated date. Conclusion: The Tribunal concluded that the 'SWRH' project should be considered a separate housing project for the purposes of Section 80-IB(10) and that it was completed within the stipulated period. Consequently, the assessee was eligible for the claimed deductions for both assessment years. Order: The appeals for both assessment years 2006-07 and 2007-08 were allowed, granting the deductions under Section 80-IB(10) of the Income Tax Act, 1961.
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