9911796707
TMI Blog2013 (2) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... era Road (East), District Thane. The Assessee is following percentage completion method of accounting. The Assessee has offered income from the said housing project at Rs. 4,49,62,880, and the same was claimed as deduction at 100%. In response to the show cause notice as to whether all the conditions laid down under section 80IB(10) is fulfilled, the Assessee submitted that it has undertaken consideration of one housing project which comprises of seven wings i.e., "A" Wing to "G" Wing. Commencement certificate was obtained on 2nd May 2000, from Meera-Bhayander Municipal Corporation (MBMC) whereby approval for "A" Wing to "F" Wing (six wings) on a plot of land bearing serial no.378/5 and 379/4 was granted. Thereafter, revised a commencement certificate was issued on 27th January 2006, by the same authority, permitting commencement of seven buildings i.e., from "A" Wing to "G" Wing. The plot numbers remained the same in both the certificates. It was, thus, submitted that commencement of the project for all the seven wings ("A" to "G" wing) should be taken from 27th January 2006. The Assessing Officer, however, observed that the Assessee has commenced its construction activities from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the year 2000 itself. Thus, he noted that though the Assessee had obtained No Objection Certificate for the wings "A" to "F", the completion certificate of "G" Wing, which is also a part of the project, has not been obtained by the Assessee as on 31st March 2008. The Assessing Officer has also dealt with the submissions of the Assessee in this regard in Paras- 16 and 18 and, thereafter, held that the Assessee had not completed its said housing project before 31st March 2008 and, therefore, he disallowed the entire claim of deduction under section 80IB(10), after observing and holding as under:- "20. From the above facts and circumstances of the case, the assessee has obtained first approval for commencement of construction activities on the said plot on 02-05-2000 and thereafter, the assessee has constructed 7 buildings in the said plot of land named as Wings A to Q. However, the assessee as on 31-03- 2008 has completed only Wings A to F and obtained completion certificate from the said Corporation, however the Wing G is still under construction and has not obtained completion certificate. As per the provisions of section 80IB(10)(a)(ii), the assessee has to complete the said p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovember 2005. 6. On these facts, he observed that the basic issue was whether the project which started with the permission to complete only six wings in the year 2000 and seventh wing got attached after a lapse of five years after the conversion of the plot into non-agricultural use cannot be considered part of the original project. He held that seventh building, which came up after the conversion of contiguous plot of land into non-agricultural use, cannot be considered to be forming part of the original land. If this is to be permitted, then any number of contiguous wing can be added to the original project and claimed to be forming a single project. Therefore, he held that only Wings "A" to "F" forms part of the project and "G" Wing which got subsequently appended, has to be considered as separate project altogether. Therefore, the deduction under section 80IB(10) for all the seven wings of a single project cannot be approved. However, he noted that the Assessing Officer require the assessee to submit working of profit of "G" Wing, which was also taken into consideration by him. From this, he held that if the wings "A" to "F" are considered to be forming part of a single proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofits from such completed wings. The main reliance was placed on the judgment of Hon'ble Jurisdictional High Court in CIT v/s Vandana Properties, [2012] 206 Taxman 584 (Bom.) and catena of other Tribunal decisions. 9. On the other hand, the learned Departmental Representative strongly relied upon the reasoning given by the Assessing Officer and submitted that even according to the Assessee, the project consisted of seven wings and even if one of the wings is incomplete, then the full deduction under section 80IB(10) cannot be given. 10. We have carefully considered the rival contentions and have perused the relevant findings of the Assessing Officer and the learned Commissioner (Appeals) as well as the material available on record. In this case, the approval for commencement certificate for the construction of housing project was given on 2nd May 2000, which comprised of six buildings namely "A" Wing to "F" Wing. This commencement certificate was given to M/s. Sweet Land Developers. Later on, a Memorandum of Understanding dated 5th June 2005, was signed between the Assessee and M/s. Sweet Land Developers, whereby the Assessee came into the project. After getting necessary app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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