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TMI Blog2012 (12) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Assessing Officer has himself noted that the assessee is a realtor constructing building flats , development of land and real estate business. 2. The facts as brought on record before the authorities are that the assessee is in the business of real estate, developers and builders (Development, construction of House/Flats and sale thereof) and development of land for the purpose of sale thereof. The assessee has been correctly and consistently following the accounting method recognizing income on sale sale/completion of flats/houses wherein the revenue/sale is recognized upon the Housing project is completed and the title of the goods and all risks and rewards of ownership has been transferred. The incomplete portion of the project ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rogress during the year 2007-08, i. Niladree Enclave-1 Rs. 2,95,94,396 ii. Niladreee Project -1 Rs. 66,26,488 iii. Niladree Project-2 Rs. 5,65,702 iv. Niladree Project-3 Rs. 4,32,526 Total Rs. 3,82,19,112 and estimated income @6.84% on the said amount of Rs.3,82,19,112 at Rs.26,75,338 and added the same to the total income. The Assessing Officer also disallowed Rs.45,92,548 claimed by the assessee u/s.80IB in respect of the Niladree Enclave-1 House/Flats sold during the year under consideration. 3. Aggrieved, the assessee filed appeal before the CIT(A) agitating the disallowance of deduction u/s.80IB along with the proportionate computation of income in the purported work-in-progress holding the assessee is a contractor ought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that applying for completion certificate and the receipt thereof will be a procedural delay and therefore a direction may be given to the Assessing Officer to allow the deduction as and when the completion certificate is obtained from the local authority insofar as the gross income which project has been completed has been applied for in the impugned Assessment Year has been rendered to tax by the assessee in the impugned Assessment Year only. A suitable direction in accordance with the facts of the assessee's case be directed to be considered by the Assessing Officer as and when the procedural delay in obtaining the certificate crystallizes the claim u/s.80IB. 4.1. On the other issue, the learned Counsel for the assessee submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of receiving installment from the prospective buyers of the flats. AS-7 as sought to be relied upon by the authorities below is on the basis of bills raised on the tax deducted at source who pay the bills raised on them and not because the projects have been completed. The conduct of the assessee's business is such that it could be impractical to take a fixed percentage as deemed income for the impugned Assessment Year without identifying the expenditure against which the customers would be obliged to pay the installments against the flats booked in a particular project. He prayed that this addition is purely a hypothetical income which income has already been included otherwise rendered to tax by the assessee in the respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letion of project i.e., increase in the work-in-progress during the Assessment Year. The learned CIT(A) therefore, rightly did not find any infirmity in the Assessing Officer's computing the income on work-in-progress. She fully supported the orders of the authorities below for her part of submissions. 6. We have heard the rival contentions and perused the impugned orders of the authorities below and the material available on record. On consideration of the facts and circumstances of the case, we are inclined to hold that the learned Counsel for the assessee has agreed to the proposition that the claim of deduction u/s.80IB would be available to it only on the basis of obtaining the completion certificate from the local authorities in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the I.T.Act u/s.80IB for all the projects. The projects, which completed as and when approval is sought has to be rendered income claiming deduction u/s.80IB which computation cannot be faulted. This indicates that the work-in-progress held as an asset by the assessee has already reduced the income for that year on account of project remaining incomplete. The Assessing Officer sought to tax @6.84% on Rs.3.82 Crores does not bear any correctness to the fact that the income as arisen to the impugned Assessment Year on incomplete projects when the majority of the projects were sold for more than the very turnover for the impugned Assessment Year. It could not be the case of the Assessing Officer to take less tax on more income for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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