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TMI Blog2014 (7) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, in our view, the CIT(A) made no mistake in rejecting the aforesaid stand of the Assessing Officer and proceeding to examine whether the residual project of development and construction undertaken by assessee complied with the requirements of section 80IB(10). On obtaining of multiple building sanctions, in our view, the same cannot be held against the assessee. As clarified that the housing project shall be deemed to have been approved on the date of which the building plan of such housing project is first approved by the local authority. Therefore, to say that because assessee had obtained multiple approvals and thus is disentitled for section 80IB(10) benefits, is against the legislative mandate. Hence, existence of multiple building plan approvals cannot be held against the assessee. Furthermore, the requirement that the project is to be on a size of a plot of land of a minimum area of one acre is concerned, the same has also to be examined not with respect to each and every individual building plan approval but with respect to the housing project as a whole. Thus, in the present case, the Assessing Officer erred in considering the size of individual plots of land to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer u/s 143(3) of the Income Tax Act, 1961 (in short "the Act") pertaining to the assessment years 2009-10 and 2010-11 respectively. 3. In both the appeals, the only grievance of the Revenue is that the CIT(A) erred in holding that the assessee satisfies all the conditions stipulated in section 80IB(10) of the Act. 4. In brief, the relevant facts, which are common to both the assessment years, can be summarized as follows. We may refer to the facts in the assessment year 2009-10 in order to appreciate the controversy. The respondent-assessee is an Association of Person (i.e. AOP), which is engaged in the business of promoters and developers. The respondent-assessee is an AOP comprising of Shri Dattatraya Laxman Khandge, Shri Vasant Laxman Khandge and M/s Namrata Developers (a registered partnership firm). The AOP was formed with the object of undertaking development and construction of a housing project styled as 'Flora City' in Talegaon Dabhade, Taluka Maval, Pune. The assessee-AOP furnished a return of income for assessment year 2009-10 declaring a total income of Rs. 'Nil', which, inter-alia, included a claim of deduction u/s 80IB(10) of the Act to the tune of Rs.13,26,29,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer has also noted that out of the 485 open plots which were forming a part of the layout approval dated 26.05.2006, assessee had sold some of the plots as open plots of land. 6. In the aforesaid background, the Assessing Officer objected to the assessee's claim for deduction u/s 80IB(10) of the Act. Firstly, as per the 4 Assessing Officer, the project undertaken by the assessee was a mixed project of piece-meal sanctions. In this context, the Assessing Officer noted that the project comprised of development and construction of twin bungalows, row houses, vertical bungalows/buildings and also sale of plots. As per the Assessing Officer, the project also envisaged selling of open plots of land without development; in support he referred to Clause No.5(h) of the joint venture agreement which permitted the developer i.e. assessee-AOP to sell plots also apart from development and sale of built-up buildings. This factor, according to the Assessing Officer, disentitled the assessee to the claim of the deduction u/s 80IB(10) of the Act. Secondly, as per the Assessing Officer, the project of the assessee was to have been completed on or before 31.03.2011 in terms of section 80IB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate dated 02.09.2011 issued to Shri Swanand Khandge is concerned, it was pointed out that construction on the said plot was undertaken by Shri Swanand Khandge himself as the open plot was sold to him. The building plan for the same was approved in the name of the said owner and so was the completion certificate. In other words, according to the assessee, the construction of the said bungalow was not a part of the impugned project and therefore the completion certificate dated 02.09.2011 in respect of the same would not determine the completion of project undertaken by the assessee. Before the CIT(A), assessee also furnished a certificate dated 23.02.2012 issued by the Talegaon Dabhade Municipal Council certifying that, in relation to building plan sanctions obtained by the assessee is concerned, the construction thereon was completed and the relevant completion certificates were issued by 31.03.2011. A copy of the said certificate along with the relevant Annexure has also been furnished by the assessee before us, which is placed at pages 7 to 9 of the Paper Book. 8. Considering the aforesaid material, the CIT(A) has decided the issue in favour of the assessee holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , admeasuring 5829.71 sq. mtrs. (about 1.43 acres) total land area of the land for the project developed by the appellant named as "Flora City" was reduced to 69,251.08 sq. mtrs (Approx. 17.12 acres). 9. The A.O. has held that the project is mixed one on account of open sale of plots to some parties as stated above and is also based on peace-meal sanctions. For this proposition the A.O. has heavily relied upon 7 the report of the D.V.O reproduced in the Assessment Order wherein it has been stated that the area of the plot varies from 75 sq. mtrs to 600 sq. mtrs. Since, multiple sanctions have been obtained by the appellant in respect of construction of the bungalows/row houses and residential flats, the A.O. has based his conclusion that it is a case of peace-meal sanction and not a revised sanction of the same building plan. The observation of the A.O. apparently appears to be based on the report of the D.V.O. 10. The finding of the A.O. that the project is mixed one cannot be accepted in view of the fact that the appellant is entitled to revise its project as per law. Due to sale of certain plots, the plan of the housing project stands revised to that extent which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant and since mutation was pending certificate was issued in the name of original land owner by the local authority. The appellant submitted that this is a normal practice and since the plot was excluded from the project no adverse view could have been taken. In the reply, the appellant also submitted that the A.O. mistakenly took the last date of the completion of the project as 31.03.2011 oblivious of the amendment brought in the statute which states that in respect of a housing project approved by local authority after 01.04.2005, the project was required to be completed within 5 years from the end of the financial year in which the housing project is approved by the local authority. The submissions of the appellant is found 8 to be correct. Sec. 80IB(10)(a)(iii) inserted by Finance Act 2010, w.e.f. 01.04.2010 reads as under : "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. " 13. Thus, it is clear that the A.O. was not justified in holding that the appellant was required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O. is directed to allow the claim and delete the addition of Rs.13,26,29,776/-. Accordingly, the ground is allowed." 9. Against the aforesaid, Revenue is in appeal before us. The learned Departmental Representative appearing for the Revenue has primarily relied upon the reasoning taken by the Assessing Officer to deny the claim of deduction u/s 80IB(10) of the Act, which we have already adverted to in detail 9 in para 6 of this order and the same is not being repeated for the sake of brevity. 10. On the other hand, the learned Representative for the respondentassessee pointed out that obtaining of multiple building sanctions, does not result in the project being ineligible for section 80IB(10) benefits. It was pointed out that the project of the assessee comprised of development and construction of individual plot units by way of construction of twin bungalows, row houses and vertical bungalows, etc.. Therefore, merely because multiple building plans sanction were obtained cannot be held against the assessee and that the CIT(A) has justifiably set-aside the said objection. With regard to the mixed nature of the project, it was pointed out that so far as the sale of open pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of section 80IB(10) of the Act. In coming to such conclusion, the CIT(A) has followed the decision of the Chandigarh Bench of the Tribunal in the case of Smt. Baljit Kaur Sekhon vs. JCIT, (2011) 12 taxman.com 126 (Chd.). We find no reasons to interfere with the aforesaid conclusion of the CIT(A) as neither on facts and nor on the point of law, any infirmity in the same has been pointed out by the Revenue before us. 12. Further with regard to obtaining of multiple building sanctions, in our view, the same cannot be held against the assessee. At this point, we may make a brief reference to Explanation (i) below clause (a) of section 80IB(10) of the Act which provides the date of approval of the first building plan of housing project shall be considered as the date of approval by the local authority. Notably, Explanation (i) read with clause (a) of section 80IB(10) of the Act itself recognizes a situation where an assessee may obtain building plan approvals in respect of a housing project more than once. In such a 11 situation, it is sought to be clarified that the housing project shall be deemed to have been approved on the date of which the building plan of such housing project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate is dated 31.03.2011. The claim of the Assessing Officer is that a completion certificate has also been issued by the local authority on 02.09.2011, which is the last certificate. Even if the said certificate is taken into consideration, yet it does not breach the outer limit of 31.03.2012 which is stipulated date in the present case for completion of project, as seen earlier. However, the claim of the assessee and which has been upheld by the CIT(A) is that the said completion certificate pertains to construction on a plot, which was undertaken by the purchaser himself. Assessee explained that the said plot was sold as such and the purchaser obtained the building sanction and the assessee had no role to play in the development and construction of the said plot. The aforesaid factual finding is not controverted by the Revenue before us. Accordingly, the stand of the CIT(A) on this aspect is also hereby affirmed. 14. As a result of the aforesaid discussion, we find that on all the aspects raised by the Assessing Officer, the CIT(A) made no mistake in upholding assessee's plea for the claim of deduction u/s 80IB(10) of the Act with respect to its housing project, 'Flora ..... X X X X Extracts X X X X X X X X Extracts X X X X
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