9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 800 - AT - Income TaxDeduction under section 80IB(10) in respect of row houses constructed under the name and style of M/s. Suman Constructions - Held that - The two projects which have been commenced on different dates after taking separate approvals cannot be said to be a single project, in which the residential row houses also included the commercial area. We hold that the assessee is entitled to the claim of deduction under section 80IB(10) of the Act in respect of residential project. The commercial project which has been sanctioned, commenced and completed on a later date and on which, no deduction under section 80IB(10) of the Act has been claimed by the assessee, is a separate project from the residential project of row houses completed by the assessee. Accordingly, we find no merit in the order of Assessing Officer in this regard and upholding the order of CIT(A), we hold that the assessee is entitled to the claim of deduction under section 80IB(10) of the Act. In view thereof, there is no merit in the observations of Assessing Officer that the assessee is not entitled to the claim of deduction under section 80IB(10) of the Act since the commercial area exceeded 2000 sq.ft. Denial of deduction to the assessee was since the total built up area of some units exceeded 1500 sq.ft., by including the area of canopy / porch in the built up area - Admittedly, as pointed out by us from the certificate of Grampanchayat, the built up area of each unit of row houses was below 1500 sq.ft. However, in respect of the first floor, there was an area of canopy which was lower than the first floor unit. The case of the assessee was that the area of canopy could not be included in the built up area since it was not a projection on floor level or ground floor, it was projection on the first floor. The said canopy / porch was only a shelter to be provided to the person from sun and rain while getting down from the vehicle and entering the premises. The CIT(A) during the course of appellate proceedings had sought remand report in this regard from the Assessing Officer and under para 6.2, the finding of the Assessing Officer is that the canopy was not a habitable area. In view thereof, the CIT(A) allowed the claim of the assessee and the Revenue vide ground of appeal No.6 has agitated the issue. The case of the Revenue before us is that the said canopy could be accessed from the first floor and used as portion. We find no merit in the plea of the Revenue and the ground of appeal raised in this regard is dismissed. Denial of deduction as where the plans were sanctioned on 21.03.2004 by the local authority, the project had to be completed by 31.03.2008 and the said row houses were not completed as on 09.12.2008 i.e. the date of Survey - It was clarified by the assessee that in the audit report, the reference was to the expenses incurred and not the stipulated date of commencement of project as prescribed under section 80IB(10) of the Act. Further, in respect of the bills found during the course of Survey, the same related to renewal and replacement work to be carried out in bungalow Nos.12, 13 and 15. The major construction work was completed by 31.03.2008. The completion certificate in this regard was issued by the Grampanchayat, Wadi, against construction of 129 units for completion before 31.03.2008. Thus we hold that the assessee is entitled to the claim of deduction under section 80IB(10) of the Act in the captioned assessment year. - Decided in favour of assessee.
Issues Involved:
1. Deduction under Section 80IB(10) of the Income Tax Act, 1961. 2. Inclusion of commercial area exceeding prescribed limits. 3. Inclusion of canopy area in built-up area exceeding 1500 sq.ft. 4. Non-completion of the project before the stipulated date. Issue-wise Detailed Analysis: 1. Deduction under Section 80IB(10) of the Income Tax Act, 1961: The primary issue in the appeals was the deduction claimed under Section 80IB(10) of the Act for the housing project known as M/s. Suman Construction. The Revenue contended that the project included a commercial area exceeding the prescribed limits and that certain flats had a built-up area exceeding 1500 sq.ft. due to the inclusion of canopy areas. Additionally, the Revenue argued that the project was not completed before the stipulated date. 2. Inclusion of Commercial Area Exceeding Prescribed Limits: The Assessing Officer noted that the original plan included a commercial area totaling 40,911 sq.ft., which exceeded the 2000 sq.ft. limit for claiming deduction under Section 80IB(10). The assessee argued that there were two separate projects: a residential project under M/s. Suman Constructions and a commercial cum residential project under M/s. Suman Developers. The CIT(A) accepted the assessee's plea, noting that the two projects were distinct and separate, with separate approvals, books of account, and licenses. The CIT(A) concluded that the residential project did not include the commercial area and thus did not violate the provisions of Section 80IB(10). 3. Inclusion of Canopy Area in Built-up Area Exceeding 1500 sq.ft.: The Assessing Officer included the canopy area in the built-up area calculation, leading to some units exceeding the 1500 sq.ft. limit. The assessee contended that the canopy was not a habitable area and should not be included in the built-up area. The CIT(A) agreed, noting that the canopy was merely a weather shed and not a projection or balcony as defined under Section 80IB(14)(a). The CIT(A) relied on the remand report, which confirmed that the canopy was not a usable area. Consequently, the CIT(A) held that the built-up area of the residential units did not exceed 1500 sq.ft., and there was no violation of Section 80IB(10). 4. Non-completion of the Project Before the Stipulated Date: The Assessing Officer argued that the project was not completed by 31.03.2008, based on the date of commencement mentioned in the audit report and the findings during the survey. The assessee clarified that the commencement date in the audit report referred to expenses incurred, not the stipulated date under Section 80IB(10). The CIT(A) accepted the assessee's explanation and noted that the completion certificate from the local authority confirmed that the project was completed before 31.03.2008. The CIT(A) concluded that the project was completed within the stipulated time, and the assessee was entitled to the deduction under Section 80IB(10). Conclusion: The CIT(A) held that the assessee was entitled to the deduction under Section 80IB(10) for the residential project, as it was separate from the commercial project, the built-up area of the units did not exceed 1500 sq.ft., and the project was completed before the stipulated date. The Tribunal upheld the CIT(A)'s findings and dismissed the Revenue's appeals.
|
