2021 (9) TMI 535 - AT - Income Tax

Denial of exemption u/s.80IB(10) - single residential project OR multiple units - HELD THAT - We are of the opinion that neither party s submissions regarding the impugned issue of sec 80IB(10) deduction claim(s) therein, as the case may be, deserve to be accepted in entirety. So far as the Revenue s objection(s) are concerned that none of the assessee s residential projects is eligible for the impugned deduction, there is hardly any dispute that the learned coordinate bench has already declined the same regarding blocks G, H, I, K, F, L in the foregoing detailed discussion in preceding paragraphs. Meaning thereby that all these Revenue s objections are presumed to have been raised and declined regarding the corresponding conditions enshrined in section 80IB(10) of the Act. We therefore, adopt the foregoing detailed discussion mutatis mutandis so far as the assessee s residential projects, except A , D and E projects are concerned. The Revenue s arguments to this effect are rejected accordingly. The assessee s corresponding ground in the above housing projects stand accepted. Remaining three housing projects i.e. A, D and E - The assessee has not placed on record any corresponding clinching document to this effect as to whether it had filed the completion certificate in the prescribed format or not. We must also emphasize herein that the said prescribed proforma makes it mandatory for an applicant to submit Building Completion Notice which was submitted on 4.7.2014 only (supra). We thus adopt a different approach herein regarding the assessee s impugned sec 80IB(10) Explanation (i), (ii) deduction claim(s) pertaining to its A , D and E housing projects. Learned lower authorities action rejecting the same stands upheld. Proportionate section 80IB(10) deduction claim - We therefore direct the assessing authority to frame its consequential computation as per law i.e. he shall reiterate his impugned sec 80IB (10) disallowance qua blocks A , D and E and delete the same pertaining to G, H, I, K, F, K and L in foregoing terms. It clear before the parties that both the learned representatives had placed record a catena of case law before us regarding the basic principles of interpretation and multi-dimensional facets of the impugned sec 80IB(10) deduction claim. The same are not dealt with specifically in view of the fact that the assessee herein has not completed its corresponding housing block(s)/project s within the stipulated deadline falling 31.3.2013.

Summary

Issues Involved:
1. Delay in filing appeals.
2. Disallowance of Section 80IB(10) deduction claims.
3. Completion of housing projects within the stipulated time.
4. Proportionate deduction for partially completed projects.
5. Interest income eligibility under Section 80IB(10).

Detailed Analysis:

1. Delay in Filing Appeals:
The assessee's appeals No.1554/Hyd/2018 and 1599/Hyd/2019 were delayed by 453 and 128 days, respectively. The assessee attributed the delays to the resignation of their tax consultant and communication gaps. The Revenue argued that the delay was not sufficiently explained as required by Section 5 of the Indian Limitation Act. The Tribunal condoned the delays, citing the Supreme Court's decisions in *Collector of Land Acquisition vs. Mst Katiji & Ors* and *University of Delhi vs. Union of India*, which emphasize that technicalities should not impede substantive justice when a cogent explanation for the delay is provided.

2. Disallowance of Section 80IB(10) Deduction Claims:
The primary issue was the disallowance of the assessee's Section 80IB(10) deduction claims for various assessment years. The Assessing Officer (AO) disallowed the claims based on the report from the District Valuation Officer (DVO), which indicated that the housing project was not completed within the prescribed time limit and some units exceeded the maximum built-up area of 1500 sq. ft. The CIT(A) upheld the AO's decision, emphasizing that the entire housing project must be completed within the specified time and that the built-up area conditions must be met.

3. Completion of Housing Projects Within the Stipulated Time:
The Tribunal noted that the assessee had obtained plan approval for the entire housing project on 04.02.2008, and the project was to be completed by 31.03.2013. The assessee completed only four blocks (G, H, I, and J) within this time frame, obtaining partial occupancy certificates. The remaining blocks (F, K, L, A, D, and E) did not receive occupancy certificates within the stipulated time. The Tribunal referred to the Hyderabad Municipal Corporation Act, which mandates that the date of completion is the date on which the completion certificate is issued by the local authority. The Tribunal found that the assessee failed to meet this requirement for several blocks.

4. Proportionate Deduction for Partially Completed Projects:
The Tribunal considered whether the assessee could claim deductions for partially completed projects. It referred to various judicial precedents, including the decisions of the Bombay High Court in *CIT vs. Vandana Properties* and the Madras High Court in *CIT vs. Voora Property Developers P Ltd*, which allowed proportionate deductions for completed parts of a housing project. The Tribunal concluded that the assessee was eligible for deductions for the completed blocks (G, H, I, and J) but not for the incomplete blocks (A, D, and E).

5. Interest Income Eligibility Under Section 80IB(10):
The assessee claimed that interest income from margin money deposits should be eligible for deduction under Section 80IB(10). The Tribunal agreed, citing the decisions of the Telangana & A.P. High Court in *CIT vs. Indo Aquatics* and *CIT vs. Godavari Drugs Ltd*, which held that interest income from deposits linked to the project is eligible for deduction.

Conclusion:
The Tribunal partially allowed the assessee's appeals. It upheld the disallowance of deductions for blocks A, D, and E due to non-completion within the stipulated time but allowed deductions for the completed blocks G, H, I, and J. The Tribunal also allowed the deduction for interest income linked to the project.