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2016 (7) TMI 182 - AT - Income TaxDeduction u/s. 80IB(10) - AO had held that occupancy certificates (OC) was received by the assessee after the due date i.e. 31.3.2008 in case of KP and therefore, the assessee was not entitled to claim deduction u/s. 80IB(10) - FAA held that amended provisions were not applicable to KP - Held that - Amended provisions were applicable to the projects that were approved before 1. 4. 2005. Thus we hold that assessee was not entitled to claim deduction u/s. 80IB in respect of building A-1, A-2, C-3, C-4, Club-house of KP. As far as building No. B- 1, B-2, B-3, B-4, C-1, C-2 are concerned it is found that OC was obtained on or before 31. 3. 2008, therefore, claim made by the assessee u/s. 80IB cannot be denied for those buildings. See Commissioner of Income-tax, Bhopal Versus Global Reality 2015 (10) TMI 2384 - MADHYA PRADESH HIGH COURT - Decided in favour of revenue in part.
Issues Involved:
1. Deduction claim under Section 80IB(10) of the Income Tax Act. 2. Application of amended provisions of Section 80IB(10) to projects approved before 1.4.2005. 3. Issuance and timing of Occupation Certificates (OCs) for housing projects. Issue-wise Detailed Analysis: 1. Deduction Claim under Section 80IB(10): The primary issue in this case was the assessee's claim for deduction under Section 80IB(10) for various housing projects, particularly the Kavyadhara Project (KP). The Assessing Officer (AO) disallowed the deduction of ?3.48 crores, asserting that the project was not completed by the stipulated date of 31.3.2008, as required by the amended provisions of Section 80IB(10). The AO's decision was based on the fact that the Occupation Certificates (OCs) for certain buildings within the project were obtained after the due date. 2. Application of Amended Provisions of Section 80IB(10): The First Appellate Authority (FAA) held that the amended provisions of Section 80IB(10), which required completion of the project within a specified time, were not applicable to KP since the project was approved before 1.4.2005. The FAA referred to several case laws, including Hiranandani Aakriti and Brahma Associates, to support this view. The FAA concluded that the pre-amended provisions, which did not specify a time limit for completion, governed the KP project. 3. Issuance and Timing of Occupation Certificates: The AO argued that the OCs for buildings A-1, C-3, C-4, and the Club-house were obtained after the due date, disqualifying the project from the deduction. The FAA, however, noted that the delay in obtaining the OCs was due to procedural delays from the Thane Municipal Corporation (TMC) and not the fault of the assessee. The FAA emphasized that the original approval was granted on 16.1.2003, and subsequent amendments were continuations of this approval. Tribunal's Decision: The Tribunal examined the core issue of whether the amended provisions applied to projects approved before 1.4.2005. It referenced the Hon'ble M.P. High Court's decision in Global Reality, which clarified that the amended provisions required completion certificates to be issued by the local authority before the cut-off date for eligibility under Section 80IB(10). The Tribunal found that the assessee did not obtain the OCs for certain buildings before 31.3.2008, thus failing to meet the amended requirements. Final Judgment: The Tribunal held that the assessee was not entitled to claim the deduction under Section 80IB(10) for buildings A-1, A-2, C-3, C-4, and the Club-house of KP, as the OCs were obtained after the stipulated date. However, for buildings B-1, B-2, B-3, B-4, C-1, and C-2, which had OCs issued on or before 31.3.2008, the deduction claim was allowed. Consequently, the appeal by the AO was partly allowed, and the cross-objection by the assessee was dismissed. Order Pronounced: The order was pronounced in the open court on 29th June 2016.
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