2011 (4) TMI 1428 - AT - Income Tax

Summary

Issues Involved:

1. Date of approval of the housing project for deduction u/s 80IB(10).
2. Ownership of the land for claiming deduction u/s 80IB(10).
3. Proportionate deduction u/s 80IB(10) for merged flats exceeding the area limit.

Summary:

Issue 1: Date of Approval of the Housing Project

The primary dispute was regarding the date of approval of the housing project "Prakruti Park" for the purpose of availing deduction u/s 80IB(10). The Assessing Officer (AO) contended that the project was first approved on 27.02.2004, which required completion by 31.03.2008. Since the project was completed on 19.06.2008, the AO held that the assessee failed to comply with the provisions of section 80IB(10). The CIT(A) held that the project was finalized only when the commencement certificate was issued on 21.09.2004, making the completion date within the prescribed limit. The Tribunal confirmed the CIT(A)'s order, stating that the building plan was first approved on 21.09.2004, and thus, the project was completed within the required timeframe.

Issue 2: Ownership of the Land

The revenue argued that the assessee was not the owner of the land on which the project was constructed, as the commencement and occupation certificates were in the names of the original holders of development rights. However, this issue did not emanate from the CIT(A)'s order, nor was it recorded by the AO in the assessment order. Therefore, the Tribunal dismissed this ground of appeal in limine.

Issue 3: Proportionate Deduction for Merged Flats

The AO found that some flats were merged, resulting in units exceeding the area limit of 1000 sq. ft., thus breaching the conditions u/s 80IB(10). The CIT(A) allowed proportionate deduction by excluding the merged flats, following the decision of the Calcutta Bench in the case of Bengal Ambuja Housing Development Ltd. The Tribunal upheld the CIT(A)'s order, noting that the proportionate deduction is allowable when the other conditions regarding the area of the plot are fulfilled. The Tribunal found no error in the CIT(A)'s order and rejected both the revenue's appeal and the assessee's cross-objection on this issue.

Conclusion:

The Tribunal dismissed the revenue's appeal and the assessee's cross-objection, confirming the CIT(A)'s order on all issues. The order was pronounced in the open court on 29.04.2011.