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TMI Blog2016 (8) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... truction of affordable houses for common man. The AO has tried to raise super/hyper technical objections to deny the deduction to the assessee. The stand taken by him is against the spirit and intent of the provision. We also agree that the issue is not arising out of the order of the FAA. However, we have decided the issue on merits. As stated earlier, effective first ground (GOA 1-7 &11-17)stands decided against the AO. Allowability of expenditure incurred prior to receipt of commencement certificate - Held that:- Tribunal has decided the issue in favour of the assessee and in the subsequent AY. s. the AO himself has not disallowed the deduction in that regard. In our opinion, expenditure incurred by an assessee for developing the housing project was an integral part of the project and hence allowable. - ITA/2857/Mum/2012, ITA/8605/Mum/2010, ITA/2858/Mum/2012, CO/146/Mum/2012 & CO /90/Mum/2013 - - - Dated:- 12-8-2016 - Shri Rajendra, Accountant Member And C. N. Prasad, Judicial Member Revenue by : Shri Manjunatha Swamy -CIT-DR Assessee by : Dr. Sunil Pathak Shri Subodh Ratnaparakhi ORDER Per Rajendra, AM Challenging the orders of CIT(A)Thane-I, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed by assessee u/s. 80IB of the Act. While deciding the appeal filed by the AO, the Tribunal had, vide its order dated, 27. 10. 2010, (ITA / 5146/ Mum/2008)directed the First Appellate Authority (FAA) to decide the two additional grounds raised, by the AO for the first time, before it. Brief Facts 4. The assessee had constructed a housing project Prakruti Park at Thane and profit arising out of the project was offered to tax in accordance with the work in progress method of accounting followed by it. It had claimed deduction u/s. 80IB(10)of the Act for the entire profit of ₹ 2. 69 Crores. The assessee revised its return of income on 13/03/2006 for enclosing the report u/s. 80 IB (10) of the Act. The AO made an addition of ₹ 2. 45 crores to the income of the assessee by holding that it was not entitled to deduction u/s. 80 IB(10), that certain residential units of the housing project exceeded the maximum permissible built-up area of thousand square feet, that the project undertaken by the assessee was not a housing project. During the course of assessment proceedings, another issue decided against the assessee was that of location of the project. It was held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject in question was approved on 21/09/04 when the plan was approved by the Thane Municipal Corporation. The correspondence between the assessee and the Thane Municipal Corporation prior to the approval of the building is not relevant to decide the date of approval as per the explanation to section 80 IB (10). 17. In view of the above discussion, we decide this issue against the revenue and in favour of the assessee. The order of the CIT (A) is confirmed, qua this issue. Respectfully, following the above decision, first part of the first effective ground is decided against the AO. 8. Second part of the effective ground of appeal is about competence of issuing authority to issue commencement certificate. As per the AO the CC was issued under the signature of Executive Engineer(EE), a subordinate officer of Assistant Director of Town Planning(ADTP). He was of the opinion that CC not approved by the ADTP was not be considered a valid sanction for the purpose of 80IB deduction. 9. Before us, the DR supported the order of the AO. The AR stated that the issue raised by the AO is not arising out of the assessment order or appellate order, that it was not arising also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ats free of cost. He referred to the cases of Radhe Developers(113TTJ 300), Shakthi Corporation (32 SOT438) and held that the assessee had acquired dominion over the line in question to the exclusion of others, that conditions of part performance of the contract were satisfied, that it amounted to transfer as per the provisions of section 2(47)(v) of the Act, that the assessee was in possession of land on payment of agreed consideration and had all the rights to use develop construct buildings sell or transfer the flats etc. , that merely CC and OC being issued in the name of the original holder would not disentitle the assessee to claim the deduction u/s. 80 IB(10), that the section did not postulate any condition for allowing the deduction, that while passing the order u/s. 143 (3) of the Act for the AY. 2008-09 the AO had not raised the issue of ownership of land in subsequent years. The FAA allowed the appeal filed by the assessee. 12. Before us, the DR stated that expenditure was incurred before the project started, that same was not an allowable expenditure. The AR supported the order of the FAA and argued that while filing revised grounds the AO had raised a new issue and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not pressed. 19. Second ground deals with size of the flat. While completing the assessment the AO held that certain flats have been merged with adjoining flats to create six flats having built up area exceeding 1000 Sq. feet. In the appellate proceedings the FAA held that the assessee was eligible to claim deduction on proportionate basis, that proportionate deduction on residential units having more than 1000 sq. ft constructed area needed to be denied. 20. Before us, the AR argued that the housing project completed by the assessee was more than 25 Kilometers away from the municipal limits of City of Mumbai, that the eligible built up area of residential unit was 1500 Sq. feet, that none of the combined units exceeded 1500 Sq. feet built up area, that the assessee was entitled to claim deduction for those units also. He referred to the cases of Mavji Mulji Merchant (1993, (3)Bom. C. R. 220)and Silver Land Developers Pvt. Ltd. (ITA/2506/Mum/2009, dtd. 11. 07. 2012). The DR supported the order of the FAA. 21. We have heard the rival submissions and perused the material before us. We find that in the case of Silver Land Developers(supra), the Tribunal had set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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