2013 (6) TMI 796 - AT - Income Tax

Summary

Issues Involved:
1. Eligibility for deduction u/s 80IB(10) of the Income Tax Act, 1961.
2. Determination of the date of approval of the housing project by the local authority.
3. Compliance with the conditions prescribed in clause (a) of section 80IB(10) of the Act.

Summary:

1. Eligibility for Deduction u/s 80IB(10):
The primary issue in this appeal is the assessee's claim for deduction u/s 80IB(10) of the Income Tax Act, 1961, amounting to Rs. 1,46,24,573/- for the housing project 'Oakwoods' at Viman Nagar, Pune. The Assessing Officer (AO) denied the deduction, but the Commissioner of Income Tax (Appeals) [CIT(A)] upheld the assessee's claim, leading to the Revenue's appeal.

2. Determination of the Date of Approval:
The crux of the controversy is determining the date on which the housing project was "approved by the local authority" as per Clause (a) to section 80IB(10) of the Act. The AO considered the date of first approval as 02.11.2003, while the assessee argued that the relevant date is 19.01.2005, when the revised plan was approved by the Pune Municipal Corporation (PMC). The CIT(A) supported the assessee's view, noting that the assessee firm came into existence on 20.07.2004 and obtained development rights on 01.10.2004. The building plan approval dated 19.01.2005 was for the amalgamated plot of 7826.89 sq. mtrs., and all previous approvals were canceled.

3. Compliance with Conditions in Clause (a) of Section 80IB(10):
The CIT(A) found that the project commenced with the approval dated 19.01.2005, and the final completion certificate was issued on 20.12.2008, within the permissible period ending on 31.03.2009. The CIT(A) concluded that the assessee complied with the conditions prescribed in clause (a) of section 80IB(10) of the Act. The Tribunal affirmed this view, noting that the Explanation (i) to clause (a) of section 80IB(10) applies to the project of the assessee and not to a project owned by previous owners on a different plot size. The Tribunal also referenced the judgment of the Hon'ble Bombay High Court in CIT v. Vandana Properties, which supports this interpretation.

Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s order allowing the assessee's claim for deduction u/s 80IB(10) of the Act. The order was pronounced in the open Court on 25th June, 2013.