TMI Blog2015 (7) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... sing project Prakruti Park at Thane - Held that:- The proportionate deduction is allowable when the other conditions regarding the area of plot is fulfilled after reducing the proportionate area of the plot representing the residential units which have the area exceeding 1000 sq.ft.. In the case in hand, the learned AR of the assessee has pointed out from the record that the total area of plot is 18742.2 sq.mtrs. and if proportionate area of 12 flats combined into six residential units is reduced from the total area of plot, ,the balance would be much more than the requirement of one acre. We note that the total number of flats in two buildings are 192 out of which 13 flats are merged for making six residential units. Therefore, keeping in view of the total area of the plot, we find that the remaining area is more than one acre as required u/s.80IB(10). We do not find any error or illegality in the order of the CIT(A) qua this issue - Decided against assessee. - ITA No.1767/Mum/2013,Cross Objection No.80/Mum/2014 - - - Dated:- 3-7-2015 - Shri R.C.Sharma Shri Sanjay Garg, JJ. For the Petitioner : Shri Neil Philip For the Respondent : Shri Shri Sunil U Pathak Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat housing project was approved on 21-9-2004 when the plan was approved by the Thane Municipal Corporation. The CIT(A) further observed that correspondence between the assessee and Thane Municipal Corporation prior to that approval of building is not relevant to decide the date of approval as per the Explanation to Section 80IB(10). The precise observation of the CIT(A) are as under :- 5.1. I have considered the various facets of these grounds in the background of the provisions of law. I have also deliberated at length with the AO as well as the authorized representative of the appellant, both of whom have argued their cases in detail. I have also gone through the voluminous record on this issue forming part of the appeal proceedings for the earlier asst. years as well as for the year under appeal. 5.2. The case of the appellant is that having complied with all the conditions laid down under the local authority letter dated: 27.02.04, the appellant firm was granted Commencement Certificate being the approval for commencing construction on 21.09.04. 5.3. It is accordingly the argument of the appellant that the building plans were first approved for constructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner - TMC but the relevant papers are signed by different officers to whom powers have been delegated by the corporation. This has been clarified by the Thane Municipal Corporation vide its letter dated: 15.03.2004 which is placed on record. Thus the above contention of the A.D. has no substance. 5.8. The AO also vide letter dated: 09.07.2012, drew attention to various clauses of the development regulations of the local authority as well as has commented upon in writing on the written submission filed by the assessee. The comments of the AO have been considered but lacks merit in view of the detailed discussions on the issue in the preceding paras. 5.9. Apart from the above, the AO has also relied upon the various contentions forming part of the assessment orders for AY. 2005-06 to 2008-09 in support of the disallowance. The AO also personally attended the appeal proceedings and vehemently argued for upholding the disallowance and mostly reiterated the same arguments taken in the assessment order. 5.10. The perusal of the assessment records and the appellate orders on the issue in the earlier years reveal that the issue has been discussed elaborately and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 27/02/2004 are of no significance in view of the above clarification and observations of the local authority. It is also relevant to mention that both Sanction of Development Permission and Commencement Certificate can be issued simultaneously at the first instance itself, if all the conditions provided by Development Control Regulations are satisfied before submitting the proposal. As regards the observations of AD. that expenditure of ₹ 21,86,495/- was incurred before the issuance of Commencement Certificate i.e. immediately after approval on 27.02,04, the AR.'s submission that the expenses referred to as recorded in the books of the appellant by the Id AO. pertain to Construction of temporary shelter for security personnel at main entry point and at the boundary line, temporary shed for storage of material-which was to be procured on receipt of commencement certificate, bore well for water, erection of boundary markers on the plot of land, general beautification of plot to attract customers, security charges paid to Royal Security Force, advance to construction contractor, etc. appears to be correct and reasonable and also acceptable looking to the total project plot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground nos. 3A to 3C of the appellant are allowed. The grounds raised under 3D to 3F are in-fructuous and not adjudicated . 6. We have carefully gone through the order of the Tribunal dated 29-4-2011 for assessment year 2006-07. The precise observation and conclusion of the Tribunal was as under :- 12. We have considered the rival contentions and relevant record. The dispute is only regarding the date of approval of the project and there is no dispute about the completion of the project related to these two buildings as on 19.06.2008 when the completion certificate was issued by the Thane Municipal Corporation. The AO held that the project was approved on 27.2.2004 which is prior to 1.4.2004 and therefore the completion on 19.6.2008 is after 31.3.2008. Thus, the AO was of the view that the assessee is not entitled for deduction u/s.80IB(10). The CIT(A) held that the housing project to be considered as approved when both the sanction of development permission and commencement certificate are issued as both are essential. There is no ambiguity about the requirement of the provisions of Section 80IB(10) that if the project is approved prior to 1.4.2004 then same has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,11,12,13, survey no.13, hissa no.1,2,3 H.No.----T No._____ the development permission/the commencement certificate is granted subject to the following conditions; 1. The land vacated in consequences of the enforcement the set back line shall form part of the public street; 2. No new building or part thereof shall be occupied or allowed to be occupied or permitted to be used by any person until occupancy permission has been granted. 3. The development permission/commencement certificate shall remain valid for a period of one year commencing from the date of its; issue; 4. This permission does not entitled you to develop the land which does not vest in you. 5 .. 6 .. 7. .. 8. .. 9. .. 10. .. 11. Before CC, NOC from ULC department required in respect of units as per sanctioned plan to be given to government. 12. .. 13. Before CC, Non-agricultural permission required to be presented. 14. .. 15. .. 13. As it is evident from the above letter, the Thane Municipal Corporation had set out certain conditions to be fulfilled by the assessee for development permissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erification of the sanction plan. The learned DR has produced the assessment record before us. We find that the building plan of the housing project has been first approved by the Thane Municipal Corporation on 21.9.2004 which was sanctioned by the Executive Engineer, Thane Municipal corporation on 17.09.2004. Once it is established that the building plan of the housing project was first approved on 21.9.2004 and no plan was approved prior to that date, we need to go into the other aspects of question. 16. Accordingly the housing project in question was approved on 21.09.2004 when the plan was approved by the Thane Municipal Corporation. The correspondence between the assessee and the Thane Municipal Corporation prior to that approve of the building is not relevant to decide the date of approval as per the Explanation to section 80IB(10). 17. In view of the above discussion, we decide this issue against the revenue and in favour of the assessee. The order of the CIT(A) is confirmed qua this issue. 7. As the facts and circumstances during the year under consideration are same and the CIT(A) has followed the order of the Tribunal, therefore, we uphold the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has been approved by the Hon ble High Court. Therefore, to maintain the consistency, we do not find any reason to interfere with the order of the CIT(A). However, we clarify that the proportionate deduction is allowable when the other conditions regarding the area of plot is fulfilled after reducing the proportionate area of the plot representing the residential units which have the area exceeding 1000 sq.ft.. In the case in hand, the learned AR of the assessee has pointed out from the record that the total area of plot is 18742.2 sq.mtrs. and if proportionate area of 12 flats combined into six residential units is reduced from the total area of plot, ,the balance would be much more than the requirement of one acre. We note that the total number of flats in two buildings are 192 out of which 13 flats are merged for making six residential units. Therefore, keeping in view of the total area of the plot, we find that the remaining area is more than one acre as required u/s.80IB(10). We do not find any error or illegality in the order of the CIT(A) qua this issue. Hence this ground of revenue and cross-objection of the assessee stand rejected. 10. Respectfully following the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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