2020 (9) TMI 331 - HC - Income Tax

Deduction u/s 80 IB(10) - assessee did not give the breakup details of the size of the land in which the apartment complex is developed AND did not furnish the details of survey number and filed few details without the purchasers address and copy of some documents - HELD THAT - Undisputed fact is that the land on which the project was developed, measured an extent of 3.46 acres in which the assessee has constructed two blocks and made a claim for deduction. It is an admitted case that the development has taken place in an extent of 1.65 acres. AO has failed to note the effect of a Completion Certificate which certifies that the developer has completed the project in accordance with the approved Building Plan as approved by the CMDA. The assessee also specifically states that the built-up area is 'maximum built-up area' and not 'carpet area' or 'super built-up area' and this fact has been considered by the CIT(A) as well as by the Tribunal and the assessee has been granted relief - No Substantial Questions of Law arises for consideration in this appeal.

Summary

Issues:
1. Interpretation of Section 80IB (10) deduction regarding completed blocks in a housing project.
2. Granting relief under Section 80IB (10) for completed blocks in a project without full completion.
3. Requirement of documentary evidence for granting relief under Section 80IB (10).

Issue 1:
The main issue in this case was whether the Tribunal was correct in allowing the Section 80IB (10) deduction to the assessee for only two completed blocks out of five in the project. The assessee argued that the deduction should be allowed for the entire project. The Court noted that the condition for the deduction is that the residential unit must have a maximum built-up area of 1500 sq.ft within 25 km from municipal limits. The Assessing Officer disallowed the claim based on the built-up area exceeding 1500 sq.ft for one unit. However, the Court emphasized that the relevant provision mentions "maximum built-up area" and not carpet area or super built-up area. It was established that the project was developed on 3.46 acres, with two blocks constructed on 1.65 acres. The Completion Certificate confirmed compliance with the approved Building Plan. The Court concluded that the Tribunal's decision to grant relief for the completed blocks was appropriate, as the conditions were met.

Issue 2:
The second issue revolved around whether relief under Section 80IB (10) could be granted for completed blocks in a project without full completion. The assessee argued that they were eligible for the deduction as all conditions were fulfilled, despite not providing detailed documentation initially. The Court considered the Completion Certificate and the fact that the built-up area was within the specified limits. The CIT(A) had allowed the deduction, which was upheld by the Tribunal. The Court found that the assessee's explanation was satisfactory, and there was no legal basis to challenge the decision to grant relief for the completed blocks.

Issue 3:
The final issue concerned the requirement of documentary evidence for granting relief under Section 80IB (10). The Assessing Officer had raised concerns about the lack of detailed information regarding the project. However, the assessee provided explanations and clarified that they followed the completed contract method consistently. The Court noted that the CIT(A) had considered the relevant facts and granted relief based on the provided information. The Court found that the assessee had met the necessary conditions for the deduction, and there was no legal basis to disallow the claim based on documentary evidence.

In conclusion, the Court dismissed the Tax Case Appeal, stating that no substantial questions of law arose for consideration. The decision to grant relief under Section 80IB (10) for the completed blocks in the housing project was upheld based on the fulfillment of statutory conditions and the Completion Certificate.