2017 (6) TMI 1047 - HC - Income Tax

Entitlement for the deduction u/s 80IB(10) - whether the residential housing project executed by the assessee firm got completed within stipulated time? - whether the respondent assessee sold the TDR for commercial activity? - Held that - Commencement Certificate has been given to the respondent assessee on 7th September 2004 for residential project. The project was completed in Financial Year 200708 and received full occupancy on 2nd December 2008 from the local Authority. The assessee had from the sale of flats declared profit of 15, 47, 18, 442/for Assessment Year 200809 and the same has been assessed by the Assessing Officer and the necessary benefit has been given to the assessee. In the year under consideration the profit declared is 3, 53, 34, 185/from the sale of the said housing project. It has been observed that the conditions laid down under Section 80IB(10) of the Act has been complied with. It is observed that the Commencement Certificate was given before 31st March 2005 i.e. prior to the amendment - Decided against revenue.

Summary

Issues:
1. Appeal against Tribunal's order for Assessment Year 2009-10.
2. Deletion of addition under Section 80IB(10) of the Income Tax Act.
3. Interpretation of project completion and eligibility for deduction.
4. Validity of Commencement Certificate and compliance with Section 80IB(10).

Analysis:

Issue 1:
The appeal was filed against the Tribunal's order for the Assessment Year 2009-10, challenging the confirmation of the CIT(A)'s order.

Issue 2:
The primary contention revolved around the deletion of an addition under Section 80IB(10) of the Income Tax Act amounting to ?3,53,34,185. The appellant argued that the Tribunal erred in ignoring the requirement of the project to be on a plot of land with a minimum area of 1 acre, and that the project's completion within the stipulated time was misunderstood.

Issue 3:
The interpretation of project completion and eligibility for deduction under Section 80IB(10) was a crucial point of dispute. The appellant claimed that the residential housing project was part of an extension of the commercial project, falling within the subclause (ii) to clause (e) of Section 80IB(10). The respondent, however, contended that the project was completed within the stipulated time, making it eligible for the deduction.

Issue 4:
The validity of the Commencement Certificate and compliance with Section 80IB(10) were significant factors in determining the eligibility for deduction. The respondent had received the Commencement Certificate before the relevant amendment, and the project was completed within the specified period. The judgment in the case of Vandana Properties and the Apex Court's decision in the case of Sarkar Builders were cited to support the respondent's position.

In the final analysis, the court found that the conditions under Section 80IB(10) had been met, with the Commencement Certificate issued before the amendment deadline. The judgment in the case of Vandana Properties and the Apex Court's decision in Sarkar Builders were deemed relevant to the present case. Consequently, the court concluded that no substantial question of law arose, leading to the dismissal of the appeal without costs.