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2017 (11) TMI 1590 - AT - Income TaxClaim for deduction under section 80-IB - assessee company is engaged in the business of developing and building housing projects - date of commencement of the project - dispute regarding the built up area - Held that:- FAA has recorded a finding that no development activity was carried on by the assessee prior to the appointed date, that is, 01/10/1998. A perusal of the assessment order shows that the AO has treated the date of approval of the project by the Noida authority, i.e., 03/09/1998 as the date of commencement of project. However, this reasoning of the AO seems illogical as grant of approval does not necessarily mean commencement of development and building activities. The AO has not demonstrated with concrete evidence that the assessee had in fact commenced operations relating to development and construction prior to 01/10/1998. Even in the proceedings before us, the Department could not demonstrate that the assessee had commenced the development and construction before the appointed date. In such a circumstance we are unable to concur with the interpretation of the AO on this issue. the basis for calculation of built up area has been inserted in the Act w.e.f. 01/04/2005 and prior to this the built up area was to be considered as per the general terms of the agreements and certificates issued by the architects. It is undisputed that the project was completed in the year 2001 and at that point of time, the definition of built up area was not in the Act. The assessee had furnished sale deeds before the AO where in the built up area was less than 1000 ft.². These sale deeds were not found to be incorrect or fabricated. The sale deeds have been signed both by the buyers as well as by the seller and have been duly witnessed. The assessee has also submitted certificates from the architects regarding the two projects “Kingston” and “Monarch” with respect to the built up area. It is also a fact on record that the assessee has been granted deduction under section 80-IB (10) of the Act for assessment years 2000–01 to 2005–06 and assessment year 2007–08. There has been no change in facts and circumstances in the year under consideration and there being no evidence to the contrary, the rule of consistency requires that the settled position should not be disturbed. The Hon’ble High Court of Allahabad in the case of CIT versus Arif industries Ltd (2017 (4) TMI 530 - ALLAHABAD HIGH COURT) has also held that the insertion of the definition of “built up area” was prospective in nature. While doing so, the Hon’ble High Court of Allahabad referred to the judgment in CIT versus Sarkar Builders (2015 (5) TMI 555 - SUPREME COURT)wherein considering the applicability of section 80-IB (14) in respect of projects which were approved before 01/04/2005. - Decided against revenue
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