2013 (7) TMI 776 - HC - Income Tax

Deduction u/s 80IB - A.O. granted deduction to assessee - CIT used revision power and made disallowance holding that A.O. failed to make necessary inquiries - Tribunal deleted disallowance - Held that - assessee had filed the details and calculations about the built-up area of the residential units. It would be unreasonable to hold that the Assessing Officer ignored those details - The Assessing Officer was thus made aware of the dates on which the approvals were granted in respect of each of the four housing projects - determination of the question as to when the undertaking commenced development and construction, in the absence of any statutory prescription, has to be decided in a pragmatic and reasonable way. It would have been an entirely different issue had there been a statutory prescription of what would be the date of commencement of construction or development. It is certainly a debatable issue on which more than one plausible view is reasonably possible and merely because the Assessing Officer has taken one plausible view, it cannot be said that the assessment is erroneous or prejudicial to the interest of the Revenue - Decided against Revenue. Whether the respondents could have been assessed on the basis of ALV of the unsold flats - Held that - Assessee could have been assessed on the basis of ALV of the unsold flats - Following decision of COMMISSIONER OF INCOME TAX Versus M/s ANSAL HOUSING FINANCE AND LEASING CO LTD & OTHERS 2012 (11) TMI 323 - DELHI HIGH COURT - Decided in favour of the Revenue.

Summary

Issues:
1. Entitlement to deduction under Section 80 (IB) of the Income Tax Act, 1961.
2. Liability to pay income tax on the annual letting value of unsold flats under the head income from the house property.

Entitlement to Deduction under Section 80 (IB):
The appellant commenced development of housing projects in NOIDA and claimed benefits under Section 80IB. The Assessing Officer disallowed the claim for certain years, leading to appeals and revision proceedings. The ITAT upheld the appellant's contentions, allowing the deduction for units not exceeding the statutory limit. The ITAT held that the deduction was rightly allowed as construction commenced after the approval of building plans post-1.10.98. The High Court rejected the Revenue's contentions, citing the debatable nature of the issue and the application of Supreme Court decisions. The High Court affirmed the Tribunal's findings, emphasizing the importance of approval dates for determining the commencement of construction.

Liability to Pay Income Tax on Annual Letting Value:
The Court addressed whether the assessee could be assessed based on the annual letting value (ALV) of unsold flats. Referring to a previous decision, the Court held that the assessee could indeed be assessed on the ALV of unsold flats. This decision was based on a previous Supreme Court ruling. Consequently, the Court dismissed some appeals while partly allowing one. In another case, the Court affirmed the Tribunal's decision based on previous orders, finding no substantial question of law. As a result, the appeals related to these issues were disposed of accordingly.

This comprehensive analysis of the judgment outlines the issues of entitlement to deduction under Section 80 (IB) and the liability to pay income tax on the ALV of unsold flats. The judgment delves into the factual background, legal arguments, Tribunal's findings, Revenue's contentions, and the Court's reasoning based on relevant legal precedents.