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2017 (8) TMI 1665 - AT - Income TaxDeduction u/s 80IB(10) with respect to the profits earned from Housing Project namely “Kamadhenu Siddhi” at Kothrud, Pune - HELD THAT:- It is an undisputed fact that the project of the assessee was on a piece of land having area of more than one acre and the area of flats is within the prescribed limit of the Act. The only reason for denial of deduction by the AO was on account of non-completion of the Project before 31.03.2012. It is an undisputed fact that the first completion certificate in respect of 46 flats was granted by Pune Municipal Corporation on 11.10.2010 with reference to its application dt.16.08.2010 and the final completion certificate with respect to 15 flats was granted vide certificate dt.21.07.2012 with reference to the application made by the assessee on 27.03.2012. Thus it is an undisputed fact that the application for granting of completion of certificate was made by the assessee before the due date being 31.03.2012. On the issue of the claim of deduction, when assessee has made application to the concerned authorities before the due date find in the case of CIT Vs. Hindustan Samuh Awas Limited [2015 (10) TMI 2306 - BOMBAY HIGH COURT] has held that when assessee undertook a Project which was completed on time and an application was moved for seeking completion certificate from Municipal Authority but the same was issued to the assessee after delay and then the delay could not be attributed to the assessee and the assessee is entitled for exemption u/s 80IB(10) of the Act. Before us, Revenue has not placed any contrary binding decision in its support nor has demonstrated as to how the ratio of decision in the case of Hindustan Samuh [2015 (10) TMI 2306 - BOMBAY HIGH COURT] is not applicable to the preset facts. In view of the aforesaid facts, we are of the view that assessee is entitled to deduction u/s 80IB(10) of the Act. We thus direct accordingly. Thus, this ground of the assessee is allowed. Disallowance in respect of compensation paid to flat owners - AO noticed that assessee had debited as compensation to flat owners and had claimed it as deduction - HELD THAT:- Whether the covenant for payment of compensation for delay in handing over of possession of flat is contained in the agreement or not, the assessee was bound to compensate the flat owners in the case of delay in handing over of possession of the flats beyond a reasonable time - In the present case the delay in handing over of flats was almost 2 years. The Courts are now taking a very serious view against the delay in handing over of possession of flats by the builders. The Consumer Courts as well as Civil Courts are directing the builders, promoters to pay heavy compensation to the flat holders for delay in handing over of possession of flats. Recently, the Parliament has enacted the Real Estate (Regulation and Development) Act, 2016 to leash the builders and put on hold the unethical practices followed by developers to harass the consumers. The Real Estate Act also aim to curb the practice of delay in handing over of possession of flats to the flat holders. Section 18 of the Real Estate (Regulation and Development) Act, 2016 provides for the payment of compensation by the developer to the allottees of the flats in case the developer fails to complete or is unable to give possession of the apartment/flat, in accordance with the terms of the agreement on or before the specified date - Decided in favour of assessee.
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