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TMI Blog2014 (2) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings. He observed that the projects "Leela Garden" and "Hill View Residency" are not qualified for deduction u/s.80IB(10) for the reasons that the completion certificates are not available and that some residential units in "Leela Garden" are over 1500 sq.ft. He referred both the projects to the Registered Valuer who reported that out of the total 81 flats in "Leela Garden" 25 flats are having area of more than 1500 sq.ft. and final completion certificate has not been issued. In respect of "Hill View Residency" he reported that although the flats are less than 1500 sq.ft. , however, only part completion certificate has been obtained and completion certificates of Buildings D and E are not obtained. 2.1 In view of the above the AO asked the assessee to explain as to why the deduction u/s.80IB(10) claimed by the assessee on the profit of the above 2 projects should not be disallowed. The assessee submitted that the project "Leela Garden" fulfils both the criteria regarding the commencement and completion because the part completion certificate issued by the PMC is practically not part completion but full completion. As regards the objection on the ground that some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of proportionate deduction for the part of the project for which part completion certificate has been issued and holding that there is no provision of proportionate allowance in the Act, the AO disallowed the claim of deduction u/s.80IB(10) amounting to Rs.81,71,409/- in respect of the project "Hill View Residency". In appeal the Ld.CIT(A) upheld the action of the AO. 4. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds : "1. On the facts and the circumstances of the case, the Ld.CIT(A)-II, Pune, has erred in confirming the addition of Rs.4,90,97,647/- made by the Ld. Addl.CIT, Range-3, Pune, disallowing the claim of deduction made by the assessee u/s.80IB(10) of Income Tax Act, 1961 on the ground that the entire project of Leela Garden is not eligible for deduction u/s.80IB(10) as some of the floats having built up area more than 1500 sft. 2. On the facts and the circumstances of the case, the Ld.CIT(A)-II, Pune, has erred in confirming the addition of Rs.71,71,409/- made by the Ld. Addl.CIT, Range-3, Pune, disallowing the claim of deduction made by the assessee u/s.80IB(10) of the Income Tax Act, 1961 on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been obtained on 13- 01-2005. Referring to page 5 of the paper book he submitted that completion certificate in respect of Building E has been obtained on 07- 11-2007. He submitted that the assessee has obtained completion certificate for Building D on 23-07-2008. He submitted that during the impugned assessment year the assessee had completed Buildings A, B, C and E and had profits received only from Buildings A, B and C. Further, the total built up area of Buildings A, B, C and E are 5102.83 sq. mtrs. Referring to the decision of the Pune Bench of the Tribunal in the case of Runwal Multihousing vide ITA Nos. 1015 to 1017/PN/2011 order dated 27-11-2012 for A.Yrs. 2003-04 to 2005-06, decision in the case of M/s. Rahul Construction Co. Vs. ITO vide ITA No.1250/PN/2009 and ITA No.707/PN/2010 order dated 30-03-2012 for A.Y. 2006-07 and 2007-08 and the decision of the Mumbai Bench of the Tribunal in the case of Mudhit Madanlal Gupta reported in 51 DTR 217 he submitted that deduction u/s.80IB(10) should be allowed in respect of 4 buildings. Referring to the decision of Hon'ble Bombay High Court in the case of Vandana Properties vide ITA No.3633/PN/2009 and ITA No.4361/PN/2010 order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant case the Assessing Officer disallowed the claim of deduction u/s.80IB(10) in the projects "Leela Garden" and "Hill View Residency" on the ground that the assessee has not fulfilled all the conditions prescribed u/s.80IB(10). 7.1 So far as the denial of deduction u/s.80IB(10) in respect of the housing project "Leela Garden" is concerned, we find the assessee has obtained the completion certificate before the statutory due date and the grievance of the Revenue is that out of 83 flats only 61 flats conform to the area of less than 1500 sq.ft. and in case of 22 flats the area exceeds 1500 sq.ft. It is the case of the assessee that he has claimed proportionate deduction in respect of 61 flats only and has not claimed deduction u/s.80IB(10) in respect of the 22 flats where the area of each flat exceeds 1500 sq.ft. It is the case of the revenue that there is no such case for proportionate deduction u/s.80IB(10) and each flat in the project should be less than 1500 sq.ft. The area of proportionate deduction u/s.80IB(10) where some of the flats exceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate for Building D has not been obtained before 31-03-2008, therefore, deduction u/s.80IB(10) should not be allowed. 7.5 We find the Coordinate Bench of the Tribunal in the case of Runwal Multihousing Pvt. Ltd., (Supra) has observed as under : "21. So far as the second grievance of the Revenue that Building Nos. B and F are not constructed and therefore the project has not been completed as per the approved plan, we find the buildings A, C, D, E and the 17 row houses are constructed on a plot area of more than 1 acre, none of the flats/row houses is beyond 1500 sq.ft. and the completion thereof has been over before 31-03-2008 in view of our findings above. 21.1 We find the Pune Bench of the Tribunal in the case of M/s. Rahul construction Co. Vs. ITO - ITA No.1250/PN/2009 and ITA No.707/PN/2010 order dated 30-03-2012 has held as under : "8. Considering the above submission, and having gone through the orders of the authorities below, material available on record and the decisions relied upon, we find that the issue involved is as to whether the assessee had completed the housing project within the prescribed time limit since the date of first approval of the project by the PMC. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the prescribed time limit for verification of eligibility of assessee for the claimed deduction. In view of the above explanation, we find substance in the contention of the ld. A.R. that approval of the housing project and approval of building plan are two different concepts. The Bangalore Bench of the Tribunal in the case of DCIT Vs. Brigade Enterprises (P) Ltd. (Supra) has held that plan for development is only a work order and not final plan sanctioned by the local authority. For any project, there could not have been a plan without submission of the detailed building plans, by the architect and what requisite details required to be submitted for approval of the building plans by the local authority. In the case of Saroj Sales Organization Vs. ITO (Supra), before Mumbai Bench, almost similar facts as before us were there. The commencement certificate in respect of six wings in Block 'N' was separately received by the assessee and all the flats in Block were less than 1000 sq.ft. It was held by the Tribunal that it is not upon to the revenue to include block 'BC' as part of block 'N' just to deny relief to the assessee u/s. 80 IB(10). The Tribunal observed that Block "BC" was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area of 1500 sq.ft. Likewise, these material facts that B Group buildings in "Rahul Nisarg Co-operative Housing Society Ltd.," have been constructed on land area of 138203 sq.ft., has not been denied by the authorities below. They have also not denied these material facts that the first building plan was sanctioned on 29.4.2003 vide Commencement Certificate No. 4269 issued by the PMC (Page No. 16 of the Paper Book). The other material facts like actual construction was executed as per the revised plan sanction on 20th March 2004 vide CC No. 2225 (page No. 17), the project consists of 396 flats and construction of these flats have been completed on 14.7.2006 as per the Completion Certificate issued by the PMC (Page Nos. 13 to 18 of paper book) are not in dispute. The authorities below have also not denied that built up area of each of these flats does not exceed 1500 sq.ft. It is also not in dispute that both the projects are entirely a residential project and there is no commercial area therein. Under the above circumstances, we are of the view that the assessee is very much entitled to the claimed deduction u/s. 80 IB (10) of the Act on the buildings A1 to A5 in "Atul Nagar" and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present case. We accordingly hold that the assessee is eligible for deduction u/s.80IB(10) in respect of building No. A,C,D, E and the 17 row houses. The grounds raised by the assessee on this issue are accordingly allowed. 22. In the result, the appeal filed by the assessee is partly-allowed." 7.6 Similar view has been taken by the Coordinate Benches of the Tribunal in various other decisions relied on by Ld. Counsel for the assessee. Since in the instant case the assessee has claimed deduction u/s.80IB(10) in respect of Buildings A, B, C on which profit has been earned on sale of units and the completion certificate has been obtained before the statutory date and none of the units in the above building is in excess 1500 sq.ft., therefore, following the decision of the Coordinate Bench of the Tribunal in the case of Runwal Multihousing Pvt. Ltd., (Supra) and various other decisions we hold that the assessee is entitled to deduction u/s. 80IB(10) in respect of buildings A, B and C of the project "Hill View Residency". 7.7 In view of the above discussion, we set-aside the order of the CIT(A) and direct the Assessing Officer to allow the claim of deduction u/s.80IB(10) in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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