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2012 (12) TMI 808 - AT - Income TaxRejection of method of accounting – Project completion method – Assessee consistently following the project completion method - AO notice that the project was not completed before 31st March 2008 - Sale of flats as well as construction work were less than 30% - Held that:- As concluding from the facts of the case AO accepted this fact that on completion of project, the assessee has offered the income to tax after claiming the deduction u/s 80 IB(10). Therefore when the assessee offered the income to tax from the entire project for the A.Y 2008-09 which has been adopted by the AO for estimation of the income for the year under consideration, then this fact goes to prove that there is no difference in the rate of profit declared by the assessee for the A.Y 2008-09 and the rate adopted by the assessing officer for the year under consideration. Thus there is no revenue effect and the income offered by the assessee on completion of the project is revenue neutral. In favour of assessee Deduction u/s 80IB(10) - More than one approval obtained from the local authorities - First approval dated 12.9.2003 was obtained by the earlier owner for the project - Due to substantial change in the housing project assessee obtained another from local authorities on 28.9.2005 – Held that:- When the project in question was sanction after 1.4.2004, then as per clause (a) (ii) of sec 80IB(10), it is required to be completed within four years from the end of the F.Y in which it is approved by the local authorities. Since the project in question was sanctioned on 28.9.2005; therefore, the same was required to be completed on or before 31.3.2010. Accordingly, we hold that the assessee has complied with the conditions of completion within four years from the end of the financial year 2005-06. In favour of assessee Deduction u/s 80IB(10) – Correct measurement of size of plot on which project developed - Discrepancy in the records of the Government agencies with regard to the actual size of the plot of land – Held that:- If it is ultimately found that the area of plot is more than one acre, then deduction u/s 80IB cannot be denied on the basis of the area of plot shown in the 7/12 extract as less than one acre. This factual aspect is required to be verified physically either by the competent revenue authorities or by the AO through some agencies. The assessee is also directed to get the demarcation and correct measurement by the competent authority. Issue remand back to AO.
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