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2018 (3) TMI 1877 - AT - Income TaxDeduction u/s.80IB for the two blocks - partial completion of the project - HELD THAT - There is no provision in the Act to prevent the appellant for claiming deduction U/s.80IB(10) of the Act depending on the partial completion of the project. Therefore the Ld.CIT(A) has granted deduction of 80IB(10) for the 2 completed blocks of constructed dwelling units because the assessee had complied with the other provisions of the Act. No infirmity in the order of the Ld.CIT(A) because we are also of the view that as stated by the Ld.CIT(A) there is no prohibition in the Act to claim deduction depending on the completion of the project when all other conditions are fulfilled. Therefore on this regard we uphold the decision of the Ld.CIT(A). Size of the land - CIT(A) after examining the matter has accepted the contention of the Ld.AR, that the extent of land is 3.46 acres on which 5 blocks are constructed. Considering the total number of residential units and various survey numbers cited in the approval it is obvious that the size of the land is more than 1 acre with respect to the two blocks thereby complying with one of the provisions of Section 80IB(10) of the Act. Hence we do not find it necessary to interfere with the order of the Ld.CIT(A) on this issue. Built-up area of the flats - CIT(A) has held that in the case of the assessee the built-up area includes certain common area which is required to be excluded while considering the compliance of provision of 80IB(10)(c) - on examining the materials on record CIT(A) has arrived at the conclusion that in the case of the assessee all the residential units are within the permissible limit of 1500 per sq.ft., after excluding the common area and therefore eligible for deduction U/s.80IB(10) - Since the assessee had complied with all the conditions stipulated U/s.80IB(10) CIT(A) granted deduction for the 2 blocks of the constructed residential units. In this situation, we do not find it necessary to interfere with the order of the Ld.CIT(A) who has arrived at such decision after examining the materials produced before him. We hereby sustain the order of the Ld.CIT(A) for granting deduction U/s.80IB(10) of the Act to the assessee with respect to the 2 blocks of constructed residential units. Hence the Revenue s appeal is devoid of merits. Tribunal powers to admit any fresh legal ground raised by any of the party in the appeal for the first time - assessee has raised the additional ground that it is eligible for claiming deduction U/s.80IB(10) of the Act for the entire project because the entire project was completed before the financial year ending 31.03.2012 - HELD THAT - On perusing the materials on record we find that the assessee has a valid legal ground, hence we are of the considered view that even though the assessee has raised this legal ground before us for the first time, in the interest of justice, it is required to be admitted for adjudication in accordance with the provisions of the Act and the decisions rendered by various judicial authorities. Accordingly we hereby admit this legal ground raised by the assessee and remit the matter to the file of Ld.AO for de-nova consideration. Further we hereby direct the Ld.AO to treat the date of completion of the entire project as 23.02.2012 even though the final completion certificate is dated 14.05.2012 because the application for the final completion certificate was made on 23.02.2012. Reliance is placed in the decision of CIT vs. HINDUSTAN SAMUH AWAS LTD. 2015 (10) TMI 2306 - BOMBAY HIGH COURT wherein upholding the order of the Tribunal it was held that when the assessee had filed application for granting final completion certificate before the appropriate Authority, the subsequent delay by the appropriate Authority in issuing the completion certificate cannot be attributed to the assessee.
Issues Involved:
1. Deduction under Section 80IB(10) of the Income Tax Act for the entire project. 2. Deduction under Section 80IB(10) for two blocks. 3. Compliance with conditions of Section 80IB(10) regarding the size of the land and built-up area. 4. Admissibility of additional grounds by the Tribunal. Issue-wise Detailed Analysis: 1. Deduction under Section 80IB(10) of the Income Tax Act for the entire project: The assessee claimed a deduction under Section 80IB(10) for the entire project consisting of 372 dwelling units in 5 blocks. The Ld. Commissioner of Income Tax (Appeals) [CIT(A)] rejected this additional ground based on the decision in Goetze (India) Ltd. vs. CIT, stating that he had no power to entertain fresh claims under Section 254 of the Act. However, the Tribunal found merit in the assessee's submission that the Tribunal has the power to admit fresh legal grounds. The Tribunal admitted the additional ground and remitted the matter to the Assessing Officer (AO) for de novo consideration, directing the AO to treat the date of completion of the entire project as 23.02.2012, based on the application date for the final completion certificate. 2. Deduction under Section 80IB(10) for two blocks: The assessee initially claimed a deduction under Section 80IB(10) for two blocks based on a partial completion certificate dated 20.04.2011. The AO disallowed this claim due to non-compliance with certain conditions. However, the CIT(A) granted the deduction for the two blocks, observing that the housing project was approved by CMDA and the completion certificate for the two blocks was obtained. The Tribunal upheld the CIT(A)'s decision, agreeing that there is no provision in the Act preventing the claim of deduction based on partial completion when other conditions are fulfilled. 3. Compliance with conditions of Section 80IB(10) regarding the size of the land and built-up area: The AO disallowed the deduction on grounds that the project did not meet the conditions regarding the size of the land and built-up area. The CIT(A) found that the project was launched on a land admeasuring 3.46 acres, thus meeting the requirement of being more than 1 acre. Regarding the built-up area, the CIT(A) held that the built-up area includes common areas, which should be excluded when considering compliance with Section 80IB(10)(c). The Tribunal agreed with the CIT(A)'s findings, noting that the assessee had complied with the conditions, and upheld the decision to grant the deduction for the two blocks. 4. Admissibility of additional grounds by the Tribunal: The CIT(A) rejected the additional ground raised by the assessee for claiming deduction for the entire project, citing the Goetze (India) Ltd. case. However, the Tribunal noted that the Supreme Court's decision in Goetze (India) Ltd. does not restrict the Tribunal's power to admit additional grounds. The Tribunal admitted the additional ground and remitted the matter to the AO for de novo consideration, directing the AO to treat the date of completion of the entire project as 23.02.2012. Conclusion: The Tribunal upheld the CIT(A)'s decision to grant the deduction under Section 80IB(10) for the two blocks, finding no infirmity in the order. The Tribunal also admitted the additional ground raised by the assessee for claiming the deduction for the entire project and remitted the matter to the AO for de novo consideration. The assessee's appeal was allowed for statistical purposes, and the Revenue's appeal was dismissed.
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