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2012 (9) TMI 993 - AT - Income TaxEligibility for deduction u/s.80IB(10) - partial completion - Held that - 8th building renamed as Type G should not be confused with originally conceived Type G in commencement certificate dated 26.03.2004 as clarified above. It is pertinent to mention here that originally assessee conceived Type G on left hand side subsequently it was relocated on right hand side as Type G but same should not be confused because the locations are different. Initially it was on the left hand side subsequently it was shifted to right hand side. Assessee has completed construction of A B C and D buildings vide completion certificate No.BCO/14/6/264 dated 14.03.2006 while remaining E F and I were completed vide completion certificate No.BCO/6/OC/57 dated 07.12.2007. Issue of relocated Type G is not before us. In these circumstances assessee is eligible for deduction u/s.80IB(10) in respect of building Types A B C D E F and I completed in two stages as discussed above. The Assessing Officer is directed accordingly.
Issues Involved
1. Disallowance of deduction under section 80-IB(10) of the Income Tax Act. 2. Completion of buildings within the stipulated time under section 80-IB(10). 3. Applicability of subsequent conditions introduced by Finance (No.2) Act, 2004. 4. Proportionate deduction under section 80-IB(10) for completed buildings. 5. Levy of interest under sections 234A, 234B, 234C, and 234D of the Act. Issue-wise Detailed Analysis 1. Disallowance of Deduction under Section 80-IB(10) The primary issue was whether the assessee was entitled to a deduction of Rs. 3,42,86,458 under section 80-IB(10) for the assessment years 2006-07 and 2007-08. The Assessing Officer disallowed the deduction on the grounds that the completion certificates for buildings 'G' and 'H' were not issued within the stipulated time of 31.03.2008. The assessee argued that the project was initially sanctioned on 26.03.2004 and should be governed by the provisions applicable to the assessment year 2004-05, which did not stipulate a completion period. 2. Completion of Buildings within the Stipulated Time The Assessing Officer noted that the project, Prakriti at Balewadi, Pune, included buildings 'A' to 'I'. Completion certificates for buildings 'A' to 'D' were issued on 14.03.2006, and for buildings 'E' and 'F' on 07.11.2007. However, building 'G' was not completed by the date of the survey (21.05.2008). The assessee contended that buildings 'A' to 'F' and 'I' were completed within the stipulated time, and building 'G' was a separate project approved later. 3. Applicability of Subsequent Conditions Introduced by Finance (No.2) Act, 2004 The assessee argued that the housing project should be governed by the provisions as applicable to the assessment year 2004-05, and subsequent conditions introduced by Finance (No.2) Act, 2004, should not be the basis for denying the deduction. The Tribunal noted that the project commenced on 26.03.2004, and the relevant provisions did not stipulate a completion period at that time. 4. Proportionate Deduction under Section 80-IB(10) for Completed Buildings The Tribunal examined whether the assessee could claim proportionate deduction for the buildings completed within the stipulated time. The Tribunal found that the assessee completed buildings 'A', 'B', 'C', and 'D' by 14.03.2006, and buildings 'E', 'F', and 'I' by 07.11.2007. The Tribunal held that the assessee was entitled to the deduction for these buildings, excluding the relocated building 'G'. 5. Levy of Interest under Sections 234A, 234B, 234C, and 234D of the Act The Tribunal noted that the issue of interest under sections 234A, 234B, 234C, and 234D was similar to the issue in the appeal for A.Y. 2006-07. Following the same reasoning, the Tribunal held that the assessee was entitled to the claim of deduction under section 80-IB(10), and the Assessing Officer was directed accordingly. Conclusion The Tribunal allowed both appeals of the assessee, holding that the assessee was entitled to the deduction under section 80-IB(10) for the completed buildings 'A', 'B', 'C', 'D', 'E', 'F', and 'I'. The Tribunal directed the Assessing Officer to grant the deduction accordingly and to re-evaluate the levy of interest under sections 234A, 234B, 234C, and 234D. The judgment was pronounced on 13.09.2012.
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