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2015 (3) TMI 144 - AT - Income TaxDisallowance of claim of deduction u/s 80IB(10) - deduction declined by the A.O. on the plea that housing project of assessee was approved by the Local Authority as “residential as well as commercial project” and not as “Housing Project”, also assessee has not completed the project within the specified time i.e. 31-08-2008 and Completion Certificate has not been granted by the Competent Authority - A.O. also observed that the commercial area exceeded the prescribed limit of 5%. The A.O. also found that built up area of three residential row houses exceeded 1500 sq. ft.- Held that:- Assessee has claimed deduction only with respect to UK Residential Project and not with respect to UK Commercial Project. The project was approved on 8-4-2003 i.e. before introduction of limit of commercial area. Commercial area was constructed as per D.C. Rules. The issue with respect to claim u/s 80IB(10) having commercial area has been considered by the Hon”ble Bombay High Court in the case of CIT vs. Happy Home Enterprises [2014 (9) TMI 707 - BOMBAY HIGH COURT) and CIT vs. Kanakia Spaces Pvt. Ltd. [ 2014 (9) TMI 707 - BOMBAY HIGH COURT] wherein it was held that there was no restriction on the quantum of commercial area that could be included in the said housing project and the same was to be determined by the local authority in accordance with its own rules and regulations. In respect of project which has been approved before 31-3-2005, the condition imposed by Finance (No.2) Act 2004 w.e.f. 1-4-2005 regarding the quantum of commercial area is not applicable. In view of the above, we modify the order of ld. CIT(A) and direct the A.O. to allow the full claim of deduction u/s 80IB(10) of the Act with respect to the entire project without restricting the same to residential area. Thus, the grounds taken by the assessee in all he years for allowing full claim of deduction u/s.80IB(10) are allowed. - Decided against revenue. With regard to the completion certificate, the ld. CIT(A) after careful consideration of the facts of the case correctly held that in respect of project approved prior to 1-4-2005, no completion certificate was required. The view of the ld. CIT(A) is also supported by the decision of Hon”ble Madras High Court in the case of CIT vs. Jain Housing & Construction Ltd. (2012 (11) TMI 588 - MADRAS HIGH COURT). - Decided against revenue. In respect of A.O.'s objection in respect of three raw houses, the ld. CIT(A) correctly held that open terrace area cannot be included in built up area in respect of project approved prior to 1-4-2005. The built up area has to be considered as per DC rules according to which the area worked out to be 1471 sq. ft. ie. below the prescribed limit. - Decided against revenue. With regard to the A.O.'s allegation regarding UK Commercial and UK residential are part of one approval, therefore, assessee is not eligible for deduction in respect of UK residential project also, the ld. CIT (A)correctly held that these are two different projects on the same piece of land of 17.67 acres. Since the assessee has not claimed any deduction in respect of UK Commercial project, the assessee’s claim for deduction u/s 80IB(10) cannot be declined in respect of UK residential project having land of more than one acre. Thus we direct the A.O. to allow full claim of the deduction u/s 80IB(10) of the Act in respect of entire residential project in all the relevant assessment years under consideration. - Decided against revenue.
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