9911796707
TMI Blog2017 (5) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter and its non-completion cannot deny the claim of deduction made by the assessee in respect of project phase 1. The assessee admittedly has not claimed any deduction u/s. 80IB(10) of the Act on the additional flats. In any case and without prejudice to our order, the assessee is entitled to prorata deduction u/s. 80IB(10) of the Act in respect of completed flats. Accordingly, we direct the Assessing Officer to allow the claim of deduction u/s. 80IB(10) of the Act on the profits of the part of eligible project comprising of 148 flats - Decided in favour of assessee. - ITA No. 687/PUN/2014 - - - Dated:- 3-3-2017 - Ms. Sushma Chowla, JM And Shri Anil Chaturvedi, AM Appellant by : Shri C.V. Chitale Respondent by : Shri Anil Chaware ORDER Per Sushma Chowla, JM This appeal filed by the assessee is against the order of CIT(A)-II, Pune, dated 29.11.2013 relating to assessment year 2010-11 against order passed under section 143(3) of the Income-tax Act, 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal:- 1. The Learned Assessing Officer has erred in making addition of ₹ 88,02,525/- and the learned Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the revision on 09.05.2008, it was clear that the project was not complete as on 31.03.2008. Since, the project had not complied with the provisions of section 80IB(10) of the Act, a show cause notice was issued to the assessee by the Assessing Office to give reasons as to why the deduction claimed u/s. 80IB(10) of the Act should be allowed to it. In response to the show cause notice, the assessee explained its position that the first revised plan i.e. on 10.07.2006 envisaged construction of 148 residential units in 6 buildings i.e. A to F and this project was executed during the financial years 2003-04 to 2006-07. The construction of 6 buildings and 148 flats was completed before 31.03.2008 i.e. the date stipulated u/s. 80IB(10) of the Act, which was duly certified by the PMC and even the completion certificate was on record. He stressed that the construction of buildings A to F comprising of 148 flats as per sanctioned plan dated 11.11.2003, complied with the conditions and the claim of deduction u/s. 80IB(10) of the Act was in order. He further pointed out that a new development was initiated after completion of Surabhi Township Project phase 1. The assessee had utilized addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase 1 of the project were sanctioned. The next plea of the assessee before the Commissioner of Income Tax (Appeals) was that it had claimed the deduction u/s. 80IB(10) of the Act in assessment years 2007-08 and 2009-10, which was allowed on the same set of facts and completion certificates issued by the PMC. The Commissioner of Income Tax (Appeals) notes that the assessee had constructed all the 148 flats in 6 buildings A to F before 31.03.2008 which was also evident from the completion certificate issued by PMC on three different dates. The Commissioner of Income Tax (Appeals) observed that the Assessing Officer has not disputed the said facts. Thereafter, in May, 2008 there was revision of the original sanctioned plan which was sanctioned by the PMC on 09.05.2008 where the assessee had utilized additional FSI of 2977.60 sq. mtrs. The Commissioner of Income Tax (Appeals) observed that the issue to be decided is whether the construction of additional 60 flats sanctioned by the PMC on 09.05.2008 form part of earlier project or was a separate project. The Commissioner of Income Tax (Appeals) took note of the reliance placed by the learned Authorized Representative for the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.46 sq. mtrs. for the construction of 148 flats up to 31.03.2008. He further pointed out that the new plans in May, 2008 were sanctioned on account of the additional FSI available of 2977.60 sq. mtrs. under which 20 flats were constructed on existing building F and 40 flats were in new building G. The said building plan was sanctioned on 09.05.2008. He further pointed out that the assessee had claimed the deduction u/s. 80IB(10) of the Act on phase 1 against which the completion certificate was also received up to 31.03.2008 i.e. for 148 flats . However, no claim of deduction was made in respect of phase 2 and hence, there was no merit in the orders of the authorities below. 8. The learned Departmental Representative for the Revenue on the other hand placed reliance on the order of Commissioner of Income Tax (Appeals). 9. We have heard the rival contentions and perused the record. The assessee, an AOP was formed to develop the land situated at S. No. 38, Hissa No. 1, Dhanore, Pune vide development agreement dated 1st August, 2003. The land available measured 13,875 sq. mtrs. For the development of the said land the first plan of construction was sanctioned on 11.11.2003 und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding F was part and parcel of the earlier building plan sanctioned and since, the sanction for the additional flats was beyond the date available to the assessee to complete its eligible project hence, the assessee is not entitled to claim the deduction u/s. 80IB(10) of the Act. Here it may be clarified that the assessee had claimed deduction u/s. 80IB(10) of the Act in assessment years 2007-08 and 2009-10 which has been allowed to the assessee. However, in assessment year 2010-11 further deduction claimed by the assessee has been denied. Further, the assessee has submitted that it has not claimed any deduction u/s. 80IB(10) of the Act on the additional flats constructed in building F. The plea of the assessee before us was that the second phase could not be part of the first phase since, the second phase was constructed after receiving additional FSI of 2977.60 sq. mtrs. When the first phase of building was sanctioned the permissible area to build was 8839.69 sq. mtrs. and the assessee had utilized the area of 8827.46 sq. mtrs. for the construction of 148 flats. In other words, no FSI was available to construct the additional 20 flats in F building and 40 flats in G building. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng which was part of the earlier project, the Assessing Officer and the Commissioner of Income Tax (Appeals) held that the project was not completed by 31.03.2008. While interpreting beneficial provisions of the Act i.e. u/s. 80IB(10) of the Act, the authorities below are required to take a pragmatic view of the matter. In the present case, when the assessee envisaged the construction of project phase 1 then he had permissible area to a certain extent, under which he could only construct 148 flats, which he constructed and completed by the stipulated date. The assessee had claimed deduction u/s. 80IB(10) of the Act in respect of those 148 flats only in the respective years. However, since, the assessee is a business man and on later date, because of the additional FSI available, the assessee constructed additional space, does not mean that the additional flats constructed by the assessee were part of the eligible project, which was sanctioned to the assessee in 2003; because in 2003 the additional FSI was not available to the assessee. Hence, the situation which arises in future cannot be dated back to deny the claim of deduction to the assessee. Accordingly, we hold so. In other w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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