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TMI Blog2015 (10) TMI 2235X X X X Extracts X X X X X X X X Extracts X X X X ..... and Phase-II (A3 to A8). The date of completion of Phase-II shall be reckoned from the date of commencement certificate issued by PMC in respect of buildings A3 to A8. We do not find any infirmity in the order of Commissioner of Income Tax (Appeals), accordingly, the same is upheld and the appeals of the Department are dismissed. - Decided in favour of assessee. - ITA Nos. 2028 & 2218/PN/2012 - - - Dated:- 21-9-2015 - Shri R. K. Panda, AM And Shri Vikas Awasthy, JM For the Petitioner : Shri Rajendra Agiwal For the Respondent : Shri S.K. Rastogi ORDER Per Vikas Awasthy, JM These two appeals by the Revenue are against the order of Commissioner of Income Tax (Appeals)-I, Pune dated 23-03-2012 for the assessment year 2008-09 and order dated 29-05-2012 for the assessment year 2009-10, respectively. In both the appeals, the Revenue has impugned the findings of Commissioner of Income Tax (Appeals) in allowing deduction u/s. 80IB(10) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) to the assessee in respect of housing project Kumar Primavera . The Revenue has challenged the findings of Commissioner of Income Tax (Appeals) by raising followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval given to the project and not the approval given for a building . 8. The Id. Commissioner of Income-tax(Appeals) grossly erred in deciding the appeal without applying Explanation (i) of section 80IB(10) to the case at hand and also by interpreting rule of completion in a manner not provided in, nor permitted by, the statutory provisions. 9. For these and such other grounds as may be urged at the time of hearing, the order of the ld. Commissioner of income-tax (Appeals) may be vacated and that of the Assessing officer be restored. 10. The appellant craves leave to add, alter or amend any or all the grounds of appeal. Identical grounds have been taken by the Revenue in assessment year 2009-10, except for the amount of deduction. 2. The brief facts of the case as emanating from records are : The assessee is a Promoter and Builder. In the return of income for the impugned assessment years, the assessee claimed deduction of ₹ 6,64,09,622/- in assessment year 2008-09 and ₹ 2,93,16,865/- in assessment year 2009-10 u/s. 80IB(10) of the Act in respect of its project Kumar Primavera . The assessee allegedly developed the aforesaid project in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee preferred appeals before the Commissioner of Income Tax (Appeals) for respective assessment years. The Commissioner of Income Tax (Appeals) after considering the submissions of the assessee and appreciation of the facts of the case, accepted the claim of assessee and allowed deduction u/s. 80IB(10) of the Act. The Commissioner of Income Tax (Appeals) treated buildings A1 and A2 as separate housing project in Phase-I and the remaining buildings A3 to A8 in Phase-II as separate project. Now, the Revenue is in appeal against the findings of Commissioner of Income Tax (Appeals) in both the impugned assessment years before the Tribunal. 3. Shri S.K. Rastogi representing the Department submitted that the assessee had constructed 8 buildings i.e. A1 to A8 under the project Kumar Primavera . The commencement certificate was issued on 02-02-2005. The said commencement certificate was in respect of buildings A1 and A2 for construction of P + 7 floors. Thereafter, the plan was revised and the clearance was sought for 6 more buildings i.e. A3 to A8 for P + 9 floors. Vide same revised plan 2 more floors were added to buildings A1 and A2. As per the provisions of section 80IB( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificate on 08-09-2006 in respect of another 6 buildings i.e. A3 to A8 to be constructed on area measuring 12458 sq. mtrs. The said buildings were approved for P + 9 floors. The assessee had also obtained revised plan for building A1 and A2 in Phase-I and added two more floors to the buildings A1 and A2. The total area of plot on which the project Kumar Primavera was developed measured 24902.715 sq. mtrs. Thus, there is no dispute about the total area on which the entire project was developed. The assessee had obtained completion certificate in respect of buildings A1 and A2 comprises in Phase-I on 05-09-2008. Thus, the assessee had complied with the condition for completion of project to be eligible to claim deduction u/s. 80IB(10) in respect of building A1 and A2 in Phase-I much prior to the last date as prescribed under the provisions of section i.e. 31-03-2009. The 80 flats in respect of which the completion certificate was not obtained at the time of inspection by the Registered Valuer was in respect of the buildings comprises in Phase-II, the commencement of which had started on 08-09-2006. The last date for obtaining completion certificate in respect of buildings in Phase-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to A8 completion certificate was obtained on 31-03-2011. The assessee claimed deduction u/s. 80IB(10) in assessment years 2008-09 and 2009-10. During the assessment proceedings the Assessing Officer had deputed Registered Valuer to report about the status of project. The Registered Valuer vide his report dated 29-11-2010 inter alia observed that the completion certificate in respect of 80 flats is still pending. The Assessing Officer denied the benefit of deduction u/s. 80IB(10) on the ground that the assessee has not completed the project within the time frame as stipulated under the provisions of section 80IB(10) of the Act. 6. The contention of the assessee is that the buildings A1 and A2 are in Phase-I and buildings A3 to A8 are part of Phase-II of the project. The completion certificate in respect of Phase-I was obtained on 05-09-2008, well before last date on which the project should be completed i.e. 31-03-2009. As regards building A3 to A8 in Phase-II the completion certificate was obtained in March, 2011 and as per the provisions of Act, the last date for obtaining completion certificate was 31-03-2012. The Revenue has strongly objected to the bifurcation of the projec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his case, it is a fact that the plot area is 24,902.715 sq. mtrs. and in the first commencement certificate dated 2.2.2005, only two buildings were approved along with layout for road, open area etc. and there was definitely no mention of construction of other buildings. As per this certificate the appellant has total area available for construction at 20,694.905 sq. mtrs. for permissible tenements of 655 numbers, out of which only 56 were proposed in the first commencement certificate consuming a total area of 3479.28 sq. mtrs. This was subsequently revised to make two additional floors in both these buildings (P+9). There is no dispute that all the conditions are satisfied if buildings A-1 and A-2 are considered as part of one project separate from the remaining buildings. Therefore, it is apparent that the appellant is eligible for its claim for deduction by treating building A-1 and A-2 as a separate housing project. The judgments of Apoorva Properties and Estate Pvt. Ltd., Brahma Associates Vs. JCIT, DCIT Vs. Brigade Enterprises Pvt. Ltd., Saroj Sales Organization Vs. ITO, Vandana Properties Vs. ACIT support the above claim. The clarification issued by the CBDT referred to abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute is wholly unwarranted and such a construction which defeats the object with which the Section was enacted must be rejected. 28. Apart from the above, the Central Board of Direct Taxes (CBDT) by its letter dated 4th May 2001 addressed to the Maharashtra Chamber of Housing Industry has stated thus: The undersigned is directed to refer to your letter No.MCHI:RSA:m:388/19799/3 dated 1st January 2001 and to state that the additional housing project on existing housing project site can qualify as infrastructure facility under Section 10(23G) and 80IB (10) provided it is taken up by a separate undertaking, having separate books of accounts, so as to ensure that correct profits can be ascertained for the purpose of Section 80IB and also to identify receipts and repayments of long term finances under the provisions of Section 10(23G), separately financing arrangements and also, if it separately fulfills all other statutory conditions listed in Sections 10(23G) and 80(B(10). With regard to your query regarding the definition of Housing Project, it is clarified that any project which has been approved by a local authority as a housing project should be considered adequate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Rahul Construction Vs. ITO (supra) while dealing with a similar dispute has held as under: 9. To decide the above issue, it is necessary to decide firstly as to what would be first date of approval of the housing project by the PMC to compute the time limit prescribed for completion of the project to take benefit of deduction u/s. 80 IB (10) of the Act. There is no dispute on some material facts that out of 16 buildings in the housing project of the assessee only 11 buildings were completed within the prescribed time limit upto 31st March 2008. The lay out plan in respect of entire complex was sanctioned by PMC vide order No. DPO/45/D/646 dated 3.4.2003 and the building plan was sanctioned vide Commencement Certificate No. 4269 dt. 29.4.2003. Admittedly, the term housing project has not been defined in the Income Tax Act but in the context of deduction u/s. 80IB(10) an Explanation has been provided below clause (a) to subsection (10) to Section 80 IB. For a ready reference, the said Explanation is being reproduced hereunder : (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... block N just to deny relief to the assessee u/s. 80 IB(10). The Tribunal observed that Block BC was meant for higher strata of the Society had been kept separately by assessee in all the respect, assessee had not claimed relief u/s. 80IB in respect of Block BC . In the case of Mudhit Madanlal Gupta Vs. ACIT (Supra ) before the Mumbai Bench, it has been held that the housing project does not necessarily have to be various group of buildings constructed on that particular land, but it can also be a particular building or any building which is part of a large project. It has been further held that whatever portion of the housing project is otherwise found to be eligible has to be considered as a housing project for the purpose of deduction u/s. 80 IB (10) of the Act. Similar view has been expressed by Mumbai Bench of the Tribunal in the case of Vandana Properties Vs. ACIT (Supra). 10. In view of above discussion, we come to the conclusion that for verification of eligibility of benefit claimed u/s. 80 IB (10) of the Act by the assessee on buildings A1 to A5 in Atul Nagar and buildings B1 to B6 in Rahul Nisarg Co-Operative Housing Society Ltd. , the assessing authority h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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