2016 (4) TMI 1232 - AT - Income Tax

Invocation of revisional jurisdictional u/s 263 - non entitlement to claim deduction u/s 80IB(10) - Held that - Assessing Officer duly examined the evidences filed by the assessee, bases of claim and found that the assessee has duly fulfilled the conditions laid down u/s 80IB(10) of the Act and accepted the claim of the assessee as is oozing out para 10.2 of the assessment order. The assessment order was not framed in a mechanical manner and was passed after application of mind and on appreciation of facts, considering the documentary evidences filed by the assessee. CIT-A ignored the factual matrix that the eligible housing project, for which claimed deduction u/s 80IB(10) of the Act was made, were consisting of building C (Ochana) and D (Allamanda) and the remaining buildings were not part of the eligible project. It is also noteworthy that even the ld. Assessing Officer has specifically mentioned in the assessment order that the assessee has satisfied all the conditions stipulated in the section with respect to these two buildings, therefore, there is no reason to disallow the claimed deduction, simply, because, the layout plan was entire land which was common for various buildings but the fact remains that for the remaining buildings, no such claim was made by the assessee, therefore, there is no reason to include buildings, A, B, E and F as part of the project for claiming deduction u/s 80IB(10) of the Act. So far as, the letter from the municipal corporation, Thane, is concerned, it is not relevant because for the remaining building, no deduction was claimed u/s 80IB(10) by the assessee. We are satisfied that requisite details were duly furnished by the assessee and the same were duly examined by the Assessing Officer. In such a situation, we are of the view, that there is a distinction between lack of enquiry and inadequate enquiry . In the present case the Assessing Officer collected necessary details, examined the same and then framed the assessment u/s. 143(3) of the Act. We set aside the order of the ld. Commissioner holding that invoking of revisions jurisdiction u/s 263 of the Act - Decided in favour of assessee.

Issues Involved:
1. Invocation of revisional jurisdiction under Section 263 of the Income Tax Act, 1961.
2. Eligibility for deduction under Section 80IB(10) of the Income Tax Act, 1961.
3. Inclusion of commercial establishments in the housing project.
4. Completion of the housing project within the stipulated time.
5. Definition and scope of "housing project" for the purposes of Section 80IB(10).

Issue-wise Detailed Analysis:

1. Invocation of Revisional Jurisdiction under Section 263:
The assessee challenged the invocation of revisional jurisdiction under Section 263 by the Commissioner of Income Tax (CIT). The CIT held that the assessee was not entitled to claim deductions under Section 80IB(10) for the assessment years 2008-09 and 2009-10. The CIT's reasons included the inclusion of commercial establishments beyond the statutory limit and the project not being completed within the stipulated time. The Tribunal analyzed whether the assessment order was erroneous and prejudicial to the interest of the Revenue, as required for invoking Section 263. The Tribunal found that the Assessing Officer (AO) had duly examined the facts and allowed the deduction after considering the documentary evidence provided by the assessee. Therefore, the Tribunal concluded that the invocation of Section 263 was not justified.

2. Eligibility for Deduction under Section 80IB(10):
The Tribunal examined the eligibility of the assessee for deductions under Section 80IB(10). The assessee contended that the eligible housing project consisted only of buildings C (Ochana) and D (Allamanda), and the conditions stipulated under Section 80IB(10) were satisfied for these buildings. The AO had accepted this claim after due examination. The Tribunal noted that the CIT's observation that the entire project, including buildings A, B, E, and F, should be considered for the deduction was incorrect, as the assessee had not claimed deductions for these buildings. The Tribunal upheld the AO's finding that the assessee had fulfilled all conditions for the eligible project and allowed the deduction.

3. Inclusion of Commercial Establishments in the Housing Project:
The CIT disallowed the deduction on the grounds that the housing project included commercial establishments exceeding 17,445 sq. ft., which was beyond the statutory limit. The Tribunal referred to previous decisions, including the case of DCIT vs. Krunal Pravinchandra Gala, where it was held that the existence of commercial units in a project approved before 01/04/2005 does not affect the claim for deduction under Section 80IB(10). The Tribunal found that the assessee had not claimed deductions for the commercial units and that the residential units met the conditions of Section 80IB(10). Therefore, the inclusion of commercial establishments did not justify the disallowance of the deduction.

4. Completion of the Housing Project within the Stipulated Time:
The CIT argued that since some buildings were completed after 31st March 2008, the project did not meet the completion criteria for Section 80IB(10). The Tribunal noted that the eligible buildings C and D were completed within the stipulated time, as evidenced by the occupation certificates from the Thane Municipal Corporation. The Tribunal concluded that the assessee had satisfied the completion requirement for the eligible project, and the deduction should not be disallowed on this ground.

5. Definition and Scope of "Housing Project":
The CIT contended that the term "housing project" should include all buildings proposed in the layout plan, not just buildings C and D. The Tribunal disagreed, stating that the eligible project for the deduction consisted only of buildings C and D, as claimed by the assessee. The Tribunal emphasized that the layout plan's inclusion of other buildings did not affect the eligibility of the specific project for the deduction. The Tribunal supported this view with references to previous cases, such as CIT vs. Vandana Properties and others, which upheld the concept of a cluster of buildings within a larger layout being eligible for deduction under Section 80IB(10).

Conclusion:
The Tribunal concluded that the assessment order was not erroneous or prejudicial to the Revenue's interest, as the AO had duly examined and accepted the assessee's claim for deduction under Section 80IB(10). The Tribunal set aside the CIT's order invoking revisional jurisdiction under Section 263 and allowed the assessee's appeals. The Tribunal's decision was based on a thorough analysis of the facts, legal provisions, and relevant judicial precedents.

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