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TMI Blog2017 (12) TMI 1391X X X X Extracts X X X X X X X X Extracts X X X X ..... ction under section 80IB on standalone basis by treating the same as one project by itself. Subject to the said verification, the impugned order of the Ld. CIT (A) on this issue is upheld. - Decided against revenue - I.T.A. No. 1307/Kol/2015 - - - Dated:- 6-10-2017 - Shri P.M. Jagtap, AM And Shri S.S. Viswanethra Ravi, JM For The Revenue : Shri A. K. Tiwari, CIT DR For The Assessee : Shri Pawan Kr. Agarwal, FCA ORDER Per P.M. Jagtap, AM This appeal is preferred by the revenue against the order of Learned CIT (Appeals) 9, Kolkata and in the solitary ground raised therein, the revenue has challenged the action of the Ld. CIT (A) in deleting the disallowance of ₹ 11,01,49,340/- made by the AO on account of assessee s claim for deduction under section 80IB of the Income Tax Act, 1961. 2. The assessee in the present case is a partnership firm which is engaged in the business of construction of housing project at Jodhpur namely Ashiana Amar Bagh . The return of income for the year under consideration was filed by it on 27.09.2012 declaring a total income of ₹ 38,64,680/- after claiming deduction under section 80IB(10) amounting to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) ................................ ( iii) In a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority. Explanation For the purpose of this clause ( i) .................................................. the date of completion of construction of the housing project shall be taken to be date on which the completion in respect of such housing project is issued by the local authority. From the plain reading of the provision, it is clear that if the housing project is approved before the 31st day of March, 2008 but not before 1st day of April, 2005 and if such undertaking has commenced development and construction of the housing project on or after the 1st day of October, 1998, then such construction must be completed within five years from the end of the financial year in which the housing project is approved by the local authority in order to get entitlement of deduction u/s 80IB(10). Here it is not in dispute that the appellant had obtained the approval for the project on 07/12/2006 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s constructed by the assessee be given on pro rate basis. 7.4 In the case of DCIT vs Brigade Enterprise 119 TTJ 269 Bangalore Bench of ITAT has observed in respect of claim under section 80IB under similar circumstances under:- Even though the projects of the assessee are bigger ones consisting of independent units, the assessee had claimed the benefit under section 80IB only in respect of blocks A and C namely Mayflower and Cassia . In respect of other units viz. Magnolia, Jacaranda and Laburnum the assessee did not avail or claim the benefit under section 80IB. The Ld. CIT (A) after having considered the facts in detail, is justified in concluding that Mayflower and Cassia are independent projects for the purposes of section 80IB. Further, profits from the units will have to be arrived, based on the method of accounting employed. Accounting principles would mandate recognition of profits from each until separately. It is with reference to such profits that the deduction under section 80IB would be allowed. The manner of accounting for profits would also support a conclusion that the deduction under section 80IB is to be computed qua each residential unit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents of both the sides and also perused the relevant material available on record. It is observed that the claim of the assessee for deduction under section 80IB in respect of profits from the housing project at Jodhpur namely Ashiana Amar Bagh was disallowed by the AO for the reason that the completion certificates for the said project was not obtained by the assessee from the concerned local authority and the said project comprising of seven phases was not entirely completed by the assessee by the stipulated date of 31.03.2012 in as much as only five phases out of the seven phases were completed by the assessee. At the time of hearing before us, the learned DR has strongly relied on these reasons given by the Assessing Officer while disallowing the claim of the assessee for deduction under section 80IB. The learned counsel for the assessee, on the other hand, has submitted that the assessee s claim for deduction under section 80IB was disallowed by the AO in respect of the same project even in A.Y. 2010-11 for want of completion certificates from the local authority and when the matter reached to the Tribunal, the claim of the assessee for deduction under section 80IB was allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. If you want, you can obtain a completion certificate from a residential Architect or Engineer. 4.1.1. We find that the Registered Architect had indeed given the completion certificate vide letter dated 18.02.2010 which is reproduced below: Biswajit Sengupta Architect b.archfila., aiiid Ph-9887488263 01493-515305 A 305, Block 2, RANGOLI, Ashina Village Bhiwadi 301019, Alwar, Rajasthan Email: [email protected] Dated 18 Feb, 2010 Ashina Amar Developers Village Kuri Bhagtasani, Jodhpur Fali Road, Jodhpur 342001 Sub : Completion Certificate of Phase I, Ashiana Amerbagh. A housing project of Ashina Amarbagh Developers AT Village Kuri Bhagtasani, Fatwar Jhalamand, Tehsil District Jodhpur, Rajasthan . This is verify that construction of Phase I of Ashiana Amarbag comprising of 95 dwelling units bearing no. E-16 to E-30, N-08, N-35 to N-50, N-77 to N-84, S-01 to S-12, S-36 to S-59, S-86 to S- 97 situated at Village Kuri Bhagtasani, Patwar Jhalamand. Tehsil District Jodhpur, Rajasthan have been completed in all respect as per approved drawing as per norms of Building Bye Laws. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 174 (Guj) wherein it was held that : It is equally true that Explantion to Clause (A) to section 80IB(10) of the Act links the completion of the construction to the Building Use Permission being granted by the local authority. However, not every condition of the statute can be seen as mandatory. If substantial compliance thereof is established on record, in a given cases, the court may take the view that minor deviation thereof would not vitiate the very purpose for which the deduction was being made available. 4.1.5. Reliance is also placed on the decision of Hon ble Karnataka High Court in the case of CIT vs Ittina Properties (P) Ltd in ITA No. 556 of 2013 dated 15.07.2014 wherein it was held: 6. One of the project has been sanctioned subsequent to the Act. The point of controversy is regarding the date on which the project was completed to be eligible for the benefit of the said provision. The revenue contends the completion certificate issued by the village Panchayat is not valid and therefore the assessee is not entitled to the said benefit. Admittedly the plan is sanctioned by the BDA. The BDA has not issued any completion certificate. The reasons being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem by the Parliament. 4.1.6. It is also not in dispute that the project was completed within the allotted time frame and possession certificates were also duly furnished before the Learned AO. In view of the aforesaid findings and judicial precedents relied upon, it could be safely concluded that expecting the assessee to produce the completion certificate from a local authority would only result in impossibility of performance on the part of the assessee. Accordingly, the rejection of deduction u/s 80IB(10) of the Act on this ground by the Learned AO is not in order. 5. As regards the other reason given by the Assessing Officer for disallowing the claim of the assessee for deduction under section 80IB that only five phases out of the total 7 phases of the project were completed by the assessee by the stipulated date, it is observed that this aspect of the matter is also considered and decided by coordinate benches of this Tribunal in various cases cited by the learned counsel for the assessee. In want of such cases namely Vertex Homes Pvt. Ltd. vs Dy CIT (ITA No. 12/Hyd/2015 dated August 26, 2015) decided by the Hyderabad Bench, the assessee had completed construction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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