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2021 (6) TMI 560 - HC - Income TaxDeduction u/s 80IB - whether the approval of the Project and completion date is as per section 801B(10) of the Act or not? - HELD THAT - Following the ratio laid down in own case 2013 (11) TMI 1745 - ITAT CHENNAI and M/S. SANGHVI AND DOSHI ENTERPRISE 2012 (12) TMI 84 - MADRAS HIGH COURT , THE COMMISSIONER OF INCOME TAX VERSUS M/S. VANDANA PROPERTIES, 2012 (4) TMI 54 - BOMBAY HIGH COURT and COMMISSIONER OF INCOME-TAX VERSUS RADHE DEVELOPERS 2011 (12) TMI 248 - GUJARAT HIGH COURT the questions of law are decided against the Revenue and in favour of the assessee
Issues Involved:
1. Inclusion of open terrace area in built-up area for deduction under Section 80IB(10). 2. Computation of time limit for completion of the eligible project. 3. Validity of completion certificate issued by Pallikaranai Panchayat instead of Chennai Metropolitan Development Authority (CMDA). Issue-wise Detailed Analysis: 1. Inclusion of Open Terrace Area in Built-up Area for Deduction under Section 80IB(10): The Tribunal held that the open terrace area should not be included while computing the built-up area for the purpose of claiming deduction under Section 80IB(10). This was contested by the Revenue, but the Tribunal's decision was based on the precedent set by the Hon'ble Jurisdictional High Court in the case of Sanghvi and Doshi Enterprise, where it was observed that open terrace area could not be the subject matter of inclusion as built-up area to deny the benefit under Section 80IB(10). The Tribunal meticulously calculated the built-up area and determined it to be 1465.03 sq ft, excluding the open terrace. This calculation was upheld, and the appeal on this ground was dismissed. 2. Computation of Time Limit for Completion of the Eligible Project: The Tribunal was right in holding that the time limit for completion of the eligible project should be computed from the date on which the building plan approval was obtained for the last time on 29.03.2007, rather than from the initial layout approval date of 22.09.2003. The Tribunal referred to the case of CIT v. Vandana Properties, where it was clarified that the date of approval should be the date on which the building plan of such housing project is first approved by the local authority, which in this case was 29.03.2007. The project was completed on 03.03.2011, within the five-year limitation period, thus complying with Section 80IB(10). 3. Validity of Completion Certificate Issued by Pallikaranai Panchayat: The Tribunal held that the completion certificate issued by Pallikaranai Panchayat was valid and sufficient, instead of a certificate from the Chennai Metropolitan Development Authority (CMDA). The Tribunal noted that the local authority, Pallikaranai Panchayat, was the competent authority for issuing planning permission and building permits for independent buildings in each plot under the ordinary building category. This position was supported by a letter from the Member-Secretary, CMDA. The Tribunal found no reason to require a separate CMDA approval, and the completion certificate from Pallikaranai Panchayat was deemed satisfactory. Conclusion: The High Court, following the precedents set by the Madras, Bombay, and Gujarat High Courts, decided all the questions of law against the Revenue and in favor of the assessee. The appeal was dismissed, affirming the Tribunal's decisions on the inclusion of open terrace area, the computation of the project completion time limit, and the validity of the completion certificate issued by Pallikaranai Panchayat. The appeal was dismissed with no costs.
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