9911796707
TMI Blog2011 (2) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... ar project as found during the course of search was to the extent of 5313.25 sq.ft. which was less than 10% of the total built up area of the said project as submitted by the assessee before the learned CIT(A). As such, keeping in view all the facts and circumstances of the case, we find ourselves in agreement with the learned CIT(A) that there was no justifiable reason for the Assessing Officer to deny the benefit of deduction u/S 80IB(10) to the assessee in respect of Asha Nagar project - Decided in favour of assessee. - ITA No. 2144/Mum/2010, ITA No. 2153/Mum/2010 - - - Dated:- 28-2-2011 - R.V. Easwar, P.M. Jagtap, JJ. Sumeet Kumar for the Appellant Vimal Punmiya for the Respondent ORDER P.M. Jagtap: These two appeals are preferred by the Revenue against two separate orders passed by the learned Commissioner of Income-tax (Appeals)-I, Thane, both dated 30.11.2009 for the assessment years 2004-05 and 2003-04 respectively and since common issues are involved therein relating to the assessee's claim for deduction under section 80IB, the same have been heard together and are being disposed of by this single composite order. 2. First we shall take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 03.08.1998 and even the commencement certificate was also issued simultaneously. According to the Assessing Officer, one of the conditions to make the project eligible for deduction u/s.80IB i.e. it should be commenced after 01.10.1998 thus was not satisfied in the case of Ostwal Nagari project. In this regard, he found no merit in the stand of the assessee that the land on which the said project was originally approved by CIDCO was purchased by it from M/s. Sonal Venture by an Agreement dated 30.8.2001 and at the time of purchase, the land was vacant without any structure constructed thereon. The ground given by the Assessing Officer for by not accepting the stand of the assessee was that the phrase "commences development" used in section 80IB(10) means start of a project and the initial jobs which are required to be done such as planning, obtaining approval of the Competent Authority, etc. are the integral part of such commencement of the project and its development. He, therefore, held that the basic condition for making the Ostwal Nagari project eligible for deduction u/s. 80IB(10) was not satisfied as the said project had been commenced prior to 01.10.1998. The Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the period relevant to AY under consideration and earned a profit of Rs.1,64,03,164/- and the same claimed a deduction." 7. After taking into consideration the submissions made on behalf of the assessee before him and the material available on record, the learned CIT(A) found that even though the approval of the plan was originally accorded to M/s. Sonal Venture prior to 1.10.1998, the assessee company had purchased the plot of land from M/s. Sonal Venture by an agreement executed on 30.8.2001. He noted that there was no structure existing on the said land at the time of purchase by the assessee and the commencement of project thus could have taken place only after the purchase of land. He also noted that Section 80IB(10) speaks about the commencement of project after 1.10.1998 and not the approval and it was, therefore, not necessary that commencement should have taken place simultaneously with the approval. He held that Ostwal Nagari project thus was commenced by the assessee only after purchase of land from M/s. Sonal Venture on 30.8.2001 i.e. much after 1.10.1998 and the condition for making such project eligible for deduction u/s.80IB(10) was duly satisfied. As regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.80IB(10). He contended that this basic condition to make the Ostwal Nagari project eligible for deduction u/s.80IB was not satisfied in the case of the assessee. 9. The learned counsel for the assessee on the other hand submitted that the land on which Ostwal Nagari project was to be constructed was purchased by the assessee in the month of August 2001 only from M/s. Sonal Venture and at the time of the said project, there was no structure existing on the plot. He submitted that the assessee company actually revised the building plan and got it sanctioned on 04.01.2002. In this regard, he invited our attention to the sanction letter dated 4.01.2002 placed at page 100 of the paper book to support and substantiate his submission. He contended that the construction of the project thus was commenced only after 04.01.2002 and this position was verifiable from the books of account of the assessee wherein the construction expenses of Ostwal Nagari project were recorded only after 04.01.2002. He contended that the Ostwal Nagari project was thus commenced by the assessee company only after 01.10.1998 and the relevant condition to make the said project eligible for deduction u/s.80- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after purchase of land in the month of August, 2001 and the conditions stipulated for making the said project eligible for deduction u/s.80IB thus was duly satisfied. 11. As regards the other issue relating to existence of commercial area, we find that this issue is squarely covered in favour of the assessee by the decision of the Special Bench of the I.T.A.T in the case of Brahma Associates (supra) and the learned CIT(A) was fully justified in following the said decision to hold that deduction u/s.80IB could not be denied to the assessee on the basis of existence of Ostwal Nagari project especially when the said project was sanctioned by the competent authority as housing project and the total commercial area in the said project was less than 10% of the total constructed area. We, therefore, find no infirmity in the impugned order of the learned CIT(A) deleting the disallowance made by the Assessing Officer on account of asessee's claim for deduction ui/s.80IB(10) in respect of Ostwal Nagari Project and upholding the same on this issue, we dismiss ground Nos. 1 to 3 of the revenue's appeal. 12. The issue raised by the revenue in ground Nos. 4 and 5 relates to the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elaborate submissions were made on its behalf before him which, as summarized by the learned CIT(A) in para 6.3 of his impugned order were as under: i. The project Asha Nagar was originally constructed to have only residential units. The then AO, after spot inspection by ITI allowed the claim in full. ii. After purchase, some of the flat owners converted the residential units in to go-downs on their own and the appellant assessee has no control them. iii. The decisions rendered in the cases of Laukik Developers have been reconsidered by CIT v. Harshad P. Dhoshi. iv. The AO has failed to consider the finding of the previous AO that it was a residential project. v. The total built up commercial area is 5313.25 sq.ft. which is less than 5% or 2000 sq.ft. vi. In connection with the scrutiny assessment in respect of the AY 2004-05 also the ITI inspected the project and based on his report the then AO completed the assessment allowing deduction, and consisted of only residential units. This fact was verified by the then AO and accordingly he allowed the claim of deduction in respect of this project in the original assessment order dated 27/12/06. 15. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of the assessee since Asha Nagar project was completed prior to 1.4.2005. He contended that the assessee was not required to obtain any completion certificate in order to claim deduction under section 80-IB in respect of Asha Nagar project as the said project was completed even prior to 1/4/2005. 18. We have considered the submission and also perused the relevant material on record. It is observed that deduction claimed by the assessee under section 80IB(10) in respect of Asha Nagar project was allowed by the Assessing Officer in the assessment originally completed under section 143(3) after having satisfied on the basis of Inspector's report that the said project completed by the assessee was comprising of only residential units. This action of the Assessing Officer thus is sufficient to support and substantiate the stand of the assessee that some of the residential units of Asha Nagar project were converted for commercial use by the purchasers only after the completion of the project. Admittedly, the building plan of Asha Nagar project was approved by the competent authority entirely for residential area and there is nothing brought on record by the Assessing Officer t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
