2015 (8) TMI 1148 - AT - Income Tax

Deductions u/s 80IB(10)(10) - whether the assessee constructed residential cum commercial complex in violation of the Act? - CIT(A) allowed claim - Held that - If the totality of facts available on record is kept in juxtaposition with the order of the Hon ble jurisdictional High Court in Brahma Associated vs JCIT (2011 (2) TMI 373 - BOMBAY HIGH COURT), we find that the cases of the assessee falls within the parameters set out by Hon ble High Court. Our view is further fortified by the decision of the Special Bench in Brahma Associated vs JCIT (2009 (4) TMI 215 - ITAT PUNE). The Hon ble High Court held that in a case of a housing project which includes commercial area, permitted under the rules of a local authority. Since, the housing project/commercial area is within the parameters laid down by the Hon ble jurisdictional High Court, therefore, we find no infirmity in the conclusion drawn by the ld. Commissioner of Income Tax (Appeals). - Decided in favour of assessee.

Summary

Issues Involved:
1. Eligibility for deduction under Section 80IB(10) of the Income Tax Act, 1961.
2. Compliance with the built-up area restriction for commercial establishments within a housing project.
3. Completion of the housing project before the stipulated date.

Detailed Analysis:

1. Eligibility for Deduction under Section 80IB(10):
The primary issue in these appeals is the eligibility of the assessee for deductions under Section 80IB(10) of the Income Tax Act, 1961. The assessee firm, engaged in building and development activities, claimed deductions for its housing projects "Gagan Vihar Complex" and "Gangan Sarita Complex." The Assessing Officer (AO) disallowed the deduction for the Gagan Vihar Complex, arguing that the project included commercial establishments, which violated the provisions of Section 80IB(10).

2. Compliance with Built-Up Area Restriction for Commercial Establishments:
The AO's denial was based on the assertion that the built-up area of the shops in the Gagan Vihar Complex exceeded the prescribed limit. However, the Commissioner of Income Tax (Appeals) referenced several judicial decisions, including the ITAT Pune Special Bench in Brahma Associates vs Joint Commissioner of Income Tax, which clarified that a housing project could include commercial establishments as long as they did not exceed 10% of the total built-up area. In this case, the commercial component was only 3.95% of the total built-up area, well within the permissible limit.

3. Completion of the Housing Project Before the Stipulated Date:
The AO also contended that the assessee did not obtain the completion certificate before the deadline of 31/03/2008. However, the assessee provided evidence that the project was completed and occupation certificates were obtained before the stipulated date. The Commissioner of Income Tax (Appeals) found no evidence from the AO to contradict this claim and thus ruled in favor of the assessee.

Conclusion:
The Tribunal upheld the decision of the Commissioner of Income Tax (Appeals), affirming that the assessee's housing project met the criteria for deductions under Section 80IB(10). The Tribunal emphasized that the project was approved as a housing project by the local authority and that the commercial area did not exceed the permissible limits. The Tribunal also noted that the project was completed before the stipulated date, as evidenced by the occupation certificates. Consequently, all appeals by the Revenue were dismissed, and the assessee was granted the claimed deductions.

Final Judgment:
All appeals by the Revenue were dismissed, affirming the eligibility of the assessee for deductions under Section 80IB(10) of the Income Tax Act, 1961.