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2015 (6) TMI 358 - ITAT HYDERABAD

2015 (6) TMI 358 - ITAT HYDERABAD - TMI - Rejection of claim u/s 80IB(10) - Project not completed within stipulated time Completion certificate not furnished Held that:- As decided in assessee's own case [ 2014 (1) TMI 1232 - ITAT HYDERABAD ] though the assessee's case is related to A.Ys. 2007-08 and 2008-09, the project was got approved by the concerned local authority before 1.4.2004. The provisions of section 80IB as stood prior to the amendment are applicable to the assessee's case. As t .....

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vant at this point of time in view of the judgment of Madras High Court in the case of CIT vs. Jain Housing & Construction Ltd. [2012 (11) TMI 588 - MADRAS HIGH COURT] though the certificate issued by the Zonal Commissioner is to be considered as proper. - Decided in favour of assesse. - ITA Nos.1652 & 1653/Hyd/2014 - Dated:- 11-3-2015 - Shri P.M. Jagtap And Smt.Asha Vijayaraghavan JJ. For the Appellant : Shri Rajat Mitra, DR For the Respondent : Shri K.C. Devdas, CA ORDER Per Smt. Asha Vijayara .....

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me of ₹ 16,30,020 and for A.Y 2011-12 on 30.09.211 determining total income at ₹ 15,23,350. AO completed the assessment on 28.03.2013 for A.Y 2010-11 and on 18.02.2014 for A.Y 2011-12 u/s 143(3) determining total income at ₹ 2,17,15,740 and ₹ 85,62,700 respectively. 3. The ld CIT (A) allowed the appeal of the assessee on further appeal and held as under: 11. The first issue is with regard to rejection of claim u/s 80IB(10) of the I.T. Act by the assessing officer. Detaile .....

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ction u/s 80IB of the I.T. Act were not sustainable and thus confirmed the order of the CIT (A). Following the same decision, the Hon'ble ITAT Hyderabad in their order dated 30.06.2014 for the A.Y 2006-07 (ITA No.416/Hyd/2014) and A.Y 2009-10 (ITA No.417/Hyd/2014) dismissed the appeal filed by the Department against the order of the CIT (A) allowing the appellant s claim with regard to deduction u/s 80IB(10). Thus, the claim of the appellant u/s 80IB(10) was allowed in respect of the housing .....

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d by 31.03.2008 itself, because as explained by the appellant, in the light of an understanding with the customers i.e. flat owners the appellant incurred further expenditure in respect of thes said project. The appellant filed a detailed explanation, the same is reproduced as under: ………….. It can be seen from the profit and loss a/c that expenditure relating to finishing works is incurred during the financial year 2009-10 relevant to the A.Y 2010-11 mainly expenditur .....

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der: A.Y Amount of expenses (Rs.) 2004-05 1,33,05,906 2005-06 3,50,46,385 2006-07 6,02,08,607 2007-08 12,29,43,792 2008-09 10,91,44,432 2009-10 5,13,83,769 2010-11 3,83,80,629 When the total expenditure is ₹ 43,04,13,520, the expenditure relating to this year is only ₹ 3,83,80,629. As far as the expenditure relating to water pipeline, the amount paid amount to ₹ 58,13,100 for water works department. Whether the assessee was going round the department to lay water pipe the asses .....

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t is clear that the project was completed by 31.03.2008. It is supported by the certificate issued by the Zonal Commissioner, GHMC. It is also supported by the fact that the assessee applied for BPS by 15.07.2008 itself. The assessee handed over the share of flats to the land lord by 31.03.2008 itself. The assessee sold away the flats fallen to his share except 27 by 31.03.2008 itself. Whatever expenditure was incurred and debited to profit and loss account subsequent to 31.03.2008 was incurred .....

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ite the fact that project was not completed by the stipulated time i.e. 31.03.2008. 3. The Hon'ble CIT (A) erred in law in granting relief to the assessee basing on the certificate issued by the Zonal Commissioner, GHMC which is against the basis on the information furnished by the assessee. 4. The Hon'ble CIT (A) erred in ignoring the information furnished by the Dy. Commissioner, GHMC in which it is clearly mentioned that construction of the project still in progress as on the date of .....

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val from the local authority is applicable. As per provisions of section 80IB(10) Incometax Act, 1961 an undertaking which develops and builds housing projects approved before 31.3.2007 by a local authority is eligible for deduction u/s. 80IB(10) of the Act subject to the following conditions: "i) In a case where the housing project has been approved by the Local Authority before 01-04-2004, the construction should be completed on or before 31- 03-2008. In a case where the approval from Loc .....

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and other commercial establishments included in the housing projects does not exceed 5% of the aggregate built-up area of the housing project or 2000 sq. ft., whichever is less." 18. In the present case, the building plan approval was obtained on 10.3.2004 and there is no dispute on this issue. Being so, the provisions as stood during the A.Y. 2004-05 are applicable which read as follows: "80IB(10): The amount of profits in case of an undertaking and building housing projects approved .....

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the deduction provision pointed out to the grant of 100% deduction on the profits derived from a housing project, if the undertaking had commenced development and construction of the housing project on or9 after 1st October, 1998. Thus, till 2005, there was no clause dealing with completion, in which event, one cannot read into the provision as a condition, which is not specifically provided for therein. 20. As far as the present case is concerned, though the assessee's case is related to A. .....

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observation of the AO that the claim for deduction was rejected on the ground that the assessee had not furnished the completion certificate. Being so, in the absence of any requirement u/s. 80IB(10)(a) of the Act and going by the provisions as applicable to the relevant assessment year, it is difficult to accept the contention of the Department that the claim of deduction has to be allowed to the assessee only on production of completion certificate. 21. Further, our view is supported by judgme .....

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d construction of the housing project on or after 1st October, 1998. Thus, till 2005, there was no clause dealing with completion, in which event, one cannot read into the provision as a condition, which is not specifically provided for therein. 10. As far as the present case is concerned, it relates to the assessment year 2004-05. The substitution of Explanation to clause (a) to sub-section (10) of Section 80IB of the Income Tax Act was brought in under Finance No.(2) Act of 2004, effective fro .....

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