2016 (10) TMI 633 - HC - Income Tax

Claim of deduction u/s 80IB(10) - housing property - Revenue contended that the project which was approved in 2003 was the same as was approved in 19th January, 2005. Therefore, the CIT(A) as well as the Tribunal were not correct in holding that the two projects were different and that the approval obtained on 19th January, 2005 was the approval obtained on a project different from that obtained on 2nd November, 2003 Held that - We find that this Court in Commissioner of Income Tax Vs. Vandana Properties 2012 (4) TMI 54 - BOMBAY HIGH COURT has specifically held that the Explanation to Section 80IB(10)(a) of the Act refers to approval granted to the same housing project more than once and the said Explanation would not apply where the approval is granted to different housing projects. In view of the concurrent finding of fact by two Authorities, which is not shown to be perverse and the application of law as settled by this Court on those facts, the question of law as framed does not give rise to any substantial question of law. Thus, not entertained.

Summary

Issues:
- Appeal challenging order under Income Tax Act, 1961 for Assessment Year 2007-08.
- Interpretation of Section 80IB(10) regarding deduction claim.
- Dispute over approval date for housing project for tax benefit eligibility.

Analysis:
1. The appeal before the Bombay High Court under Section 260A of the Income Tax Act, 1961 contested the order of the Income Tax Appellate Tribunal (the Tribunal) dated 25th June, 2013, pertaining to Assessment Year 2007-08.

2. The primary legal questions raised for consideration were regarding the Tribunal's alleged errors in allowing the assessee's claim of deduction under Section 80IB(10) of the Act and in failing to recognize the significance of the initial approval date for the housing project by the Municipal Corporation.

3. The Tribunal's decision upheld the Commissioner of Income Tax (Appeals) [CIT(A)]'s stance, which was challenged by the Revenue. The core issue revolved around determining the approval date of the housing project by the local authority to ascertain the completion date for tax benefit under Section 80IB(10) of the Act.

4. Both the CIT(A) and the Tribunal found that the building plan approved on 2nd November, 2003, was for a different project compared to the one approved on 19th January, 2005, which was the project of the respondent assessee. The amalgamation of plots and subsequent sale to the assessee further clarified the distinction between the projects.

5. The Revenue contended that the projects approved in 2003 and 2005 were the same, contrary to the findings of the lower authorities. However, the High Court referenced a previous judgment to support the view that the Explanation to Section 80IB(10)(a) applies to the same housing project, not different ones. As there was no evidence of a perverse finding, the legal question raised was deemed unsubstantial and not entertained.

6. Consequently, the High Court dismissed the appeal, emphasizing that the approval dates for the projects were distinct, leading to the denial of the deduction claim under Section 80IB(10) for the assessee. No costs were awarded in this decision.