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2013 (7) TMI 198 - AT - Income TaxDeduction u/s 80-IB(10) - issuance of completion certificate by local authority - Held that - Completion certificate was applied for before 31-3-2008 i.e. on 12-3-2008. It is undisputable that the application of the assessee has been approved by the local authority without raising any amendment or objection, as has been asserted by the assessee all along and the delayed issuance of the completion certificate by the local authority on 5-5-2008, albeit after the mandated date of 31-3-2008 cannot be attributed to the assessee. - denial of deduction u/s 80-IB(10) on such score is uncalled for. - Deduction allowed - Decided in favor of assessee. Deduction u/s 80-IB(10) - Certain adjoining flats in the housing project were sold to a single person or person belonging to one family - Held that - local authority has sanctioned two flats separately and even in the occupation/completion certificate issued by the Pune Municipal Corporation, two flats have been considered as independent units - no material to show that the assessee had combined two adjoining flats so as to consider them as one unit for the purpose of examining the applicability of clause (c) to section 80-IB(10) - Following decision of Emgeen Holdings P. Ltd. Vs. DCIT 2011 (7) TMI 199 - ITAT MUMBAI and DCIT Vs. Arcade Bhoomi Enterprises 2013 (7) TMI 210 - ITAT MUMBAI - Decided in favour of assessee.
Issues Involved:
1. Denial of deduction under section 80IB(10) of the Income Tax Act, 1961. 2. Completion certificate issuance date. 3. Combining of adjacent flats and its impact on built-up area. Issue-wise Detailed Analysis: 1. Denial of Deduction under Section 80IB(10): The primary issue in this appeal is the denial of deduction under section 80IB(10) amounting to Rs. 30,10,876/- claimed by the assessee for the housing project "Kasturkunj" in Pune. The Assessing Officer disallowed this deduction, a decision upheld by the CIT(A), based on similar disallowances in previous assessment years. The Tribunal, however, had allowed the deduction for the assessee in the preceding assessment years 2006-07 and 2007-08, setting a precedent for the current appeal. 2. Completion Certificate Issuance Date: The dispute centers around the completion certificate for building 'E' issued by the Pune Municipal Corporation on 5-5-2008, while the statutory deadline was 31-3-2008. The Tribunal found that the assessee applied for the completion certificate on 12-3-2008, asserting that the construction was complete before the deadline. The Tribunal noted that the local authority did not raise any objections and the delay in issuing the certificate was not attributable to the assessee. Citing similar cases, the Tribunal concluded that the assessee had complied with the completion requirement of section 80-IB(10)(a)(i) and that the delay in the issuance of the certificate should not deny the deduction. 3. Combining of Adjacent Flats and Its Impact on Built-Up Area: The Assessing Officer also denied the deduction on the grounds that certain adjacent flats were sold to single individuals or families and combined, resulting in a built-up area exceeding 1500 sq.ft., which violates clause (c) of section 80-IB(10). The assessee contended that the flats were sanctioned and sold as independent units, and any combining was done by the purchasers post-possession. The CIT(A) found no evidence that the assessee combined the flats before selling them. The Tribunal upheld this view, noting that the flats were sanctioned and sold as separate units, and any post-sale combination by purchasers does not affect the compliance with section 80-IB(10)(c). Conclusion: The Tribunal, following its earlier decisions in the assessee's own case for the preceding assessment years, allowed the appeal. It directed the Assessing Officer to allow the deduction under section 80IB(10), as the assessee had complied with the statutory requirements, and any delays or combinations post-possession were not attributable to the assessee. The appeal filed by the assessee was thus allowed.
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