2018 (2) TMI 178 - AT - Income Tax

Claim of deduction u/s. 801B(10) - conditions contemplated under the said statutory provision were not found to be satisfied by the assessee - (i) that as the Building E was only a part of the project which had commenced in the year 1993 as per the Commencement Certificate dated 09.06.1993, therefore, the approval of the Building E was just an endorsement of the original Commencement Certificate dated 09.06.1993; (ii) the size of the Plot on which the Building E was constructed was less than 1 acre; and (iii) the provisions of Sec. 80IB(10) was clearly restricted to only one project on minimum area of 1 acre. - Held that - We find that the Hon ble High Court of Bombay in the case of CIT-25, Vs. M/s Vandana Properties 2012 (4) TMI 54 - BOMBAY HIGH COURT while disposing of the appeals of the assessee for A.Y(s) 2004-05 & 2005-06 had held that the assessee was entitled towards claim of deduction under Sec. 80IB(10) in respect of Building E , after deliberating on the various aspects on which the claim of the assessee was assailed by the revenue before it - Decided in favour of assessee.

Summary

Issues Involved:
1. Deduction under Section 80IB(10) of the Income Tax Act, 1961.
2. Commencement Certificate and its extensions.
3. Size of the plot of land for deduction eligibility.
4. Previous judicial decisions and their finality.

Issue-wise Detailed Analysis:

1. Deduction under Section 80IB(10) of the Income Tax Act, 1961:
The primary issue revolves around the eligibility of the assessee for claiming deductions under Section 80IB(10) of the Income Tax Act, 1961. The assessee had claimed deductions for the construction of Wing "E" of a housing project. The Assessing Officer (A.O.) disallowed the deduction on the grounds that the conditions under Section 80IB(10) were not met. The CIT(A) allowed the deduction, citing previous judicial decisions favoring the assessee.

2. Commencement Certificate and its Extensions:
The A.O. argued that the Commencement Certificate for the construction activities was initially granted on 09.06.1993, which was prior to 01.10.1998, and was subsequently extended over the years. The A.O. considered the approval for Wing "E" as merely an endorsement of the original Commencement Certificate. However, the CIT(A) and the Tribunal noted that the approval for Wing "E" was granted independently on 11.10.2002, which qualifies it as a separate housing project.

3. Size of the Plot of Land for Deduction Eligibility:
The A.O. contended that the size of the plot on which Wing "E" was constructed was less than 1 acre, thus violating the conditions required for availing deductions under Section 80IB(10). The CIT(A) and the Tribunal, referencing the High Court's decision, clarified that Section 80IB(10)(b) specifies the size of the plot of land and not the size of the housing project. It was concluded that the plot of land must have a minimum area of one acre, and it does not need to be a vacant plot.

4. Previous Judicial Decisions and Their Finality:
The CIT(A) and the Tribunal relied on the decision of the Hon'ble High Court of Bombay in the assessee's own case for A.Ys 2004-05 and 2005-06, which was upheld by the Hon'ble Supreme Court. The High Court had ruled that the construction of Wing "E" constituted an independent housing project and was eligible for deduction under Section 80IB(10). The Tribunal observed that the Special Leave Petition (SLP) filed by the revenue against the High Court's decision was dismissed by the Supreme Court, thus making the issue res judicata.

Conclusion:
The Tribunal upheld the CIT(A)'s order allowing the deduction under Section 80IB(10) for A.Ys 2011-12 and 2012-13. The appeals filed by the revenue were dismissed based on the precedent set by the Hon'ble High Court of Bombay and the Supreme Court's dismissal of the SLP. The Tribunal emphasized that the conditions for deduction under Section 80IB(10) were met, and the previous judicial decisions in favor of the assessee were binding.