2023 (10) TMI 1271 - AT - Income Tax

Deduction u/s 80(IB)(10) in respect of POR project - whether granted deduction can be withdrawn in the subsequent years, without pointing out to any change in facts? - HELD THAT - When the deduction under Section 80(IB)(10) of the Act was allowed to the assessee in the initial assessment year i.e. A.Y. 2012-13, then unless the said deduction is withdrawn, deduction u/s 80(IB)(10) cannot be withdrawn on identical set of facts. Secondly, on the facts placed on record before us, and letter issued by GUDA, it is seen that the GUDA has in all the letters issued on various dates, maintained its position that in-principal approval in respect of POR Project was granted to the assessee on 30.30.2007. While allowing deduction u/s 80(IB)(10) in respect of POR residency, CIT(A) has taken note of this fact while allowing the assessee s appeal. During the course of arguments before us, the Ld. D.R. has not brought forth any substantive evidence to dispute or disprove the factual findings made by the CIT(A) on this issue, which are to the effect that the approval with respect to POR Project was granted to the assessee on 30.03.2007. CIT(A) has also observed that in view of the provisions of Section 80(IB)(10) of the Act, when the approval of the Housing Project is obtained more than once, such Housing Project shall be deemed to have been approved on the date on which the building plan of such Housing Project is first approved by local authorities, which in the present case is 30.03.2007. Accordingly CIT(A) has not erred in holding that the assessee was eligible for deduction u/s 80(IB)(10) with respect to POR Project. PMC Project - BU Permission was obtained in respect of only 349 Units out of a total of 376 Units - entire project was not approved within five years from the end of the Financial Year in which project was approved - HELD THAT - , we are of the considered view that the assessee is eligible to claim deduction under Section 80-IB(10) of the Act with respect to those blocks, where BU Permission was obtained since the same were separate and distinguishable from those blocks for which BU Permission was not obtained. Accordingly, in our considered view the fact that assessee could not obtain BU Permission with respect to 27 Units comprising of three blocks, out of total of 276 Units, and had obtained BU Permission with respect to 349 Units, the assessee cannot be denied claim of deduction under Section 80-IB(10) with respect to the entire PMC Project. The assessee, in our considered view is eligible for claim of deduction under Section 80-IB(10) of the Act with respect to those Units for which BU Permission has been obtained.

Summary

Issues Involved:
1. Eligibility for deduction under Section 80IB(10) of the Income-tax Act for the Parshwanath Om Residency Project (POR Project).
2. Eligibility for deduction under Section 80IB(10) of the Income-tax Act for the Parshwanath Metro City Project (PMC Project).

Summary:

Issue 1: Deduction under Section 80IB(10) for POR Project
- Department's Argument: The Ld. CIT(A) erred in allowing the deduction as the approval from the local authority was not obtained before 31.03.2008, violating clause (a)(i) of Section 80(IB)(10).
- Assessing Officer's Observations: The actual approval from GUDA was taken on 27.10.2010, not before 31.03.2008.
- Assessee's Argument: Approval for the POR Project was obtained on 30.03.2007, and the letter dated 27.10.2010 was a revised development permission.
- CIT(A)'s Findings: Approval was indeed obtained on 30.03.2007, as supported by GUDA's letter dated 12.06.2017. The project met all conditions under Section 80-IB(10).
- Tribunal's Decision: The Ld. CIT(A) correctly allowed the deduction, as the approval date was 30.03.2007, and the Department did not provide substantive evidence to dispute this.

Issue 2: Deduction under Section 80IB(10) for PMC Project
- Department's Argument: The assessee did not complete the entire project of 376 units before 31.03.2012, violating clause (a)(iii) of Section 80(IB)(10).
- Assessing Officer's Observations: BU permission was given for only 349 units out of 376.
- Assessee's Argument: BU permission was obtained for 349 units, and deduction was claimed only for these units. The remaining units in three blocks were separate and independent.
- CIT(A)'s Findings: The assessee was entitled to pro-rata deduction for the completed units, as supported by various judicial precedents.
- Tribunal's Decision: The assessee is eligible for deduction under Section 80-IB(10) for the units for which BU permission was obtained. The denial of deduction for the entire project was not justified.

Conclusion:
The appeals by the Department for both A.Y. 2013-14 and A.Y. 2014-15 are dismissed. The assessee is entitled to deductions under Section 80-IB(10) for both the POR and PMC projects as per the findings of the CIT(A) and supported by judicial precedents.