TMI Blog2015 (9) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has started in FY 2007-08. As it appears, assessee in the years under consideration i.e. AYs 2010-11 and 2011-12 has recognized revenue on percentage completion method and has also claimed deduction u/s 80IB(10) on that basis. Therefore, it is very much necessary and essential to verify whether deduction claimed in these two AYs is for the entire project (all six blocks) or only blocks A, B & F. Neither the AO has examined this aspect nor the assessee has brought any material on record to indicate that deduction claimed u/s 80IB(10) for these two years is only in respect of blocks A, B & F. While computing assessee’s claim of deduction u/s 80IB(10), AO has to examine this aspect. With the aforesaid observations, we set aside the impugned orders of ld. CIT(A) and remit the matter back to AO for deciding afresh - Decided in favour of assessee for statistical purposes. - ITA Nos. 01 and 02/Hyd/2015 - - - Dated:- 26-8-2015 - SHRI P.M. JAGTAP AND SHRI SAKTIJIT DEY, JJ. For The Assessee Shri V. Raghavendra Rao For The Revenue Shri Prabhat Kumar Gupta ORDER PER SAKTIJIT DEY, J.M.: These appeals by assessee are directed against separate orders, both, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat reasonings on which AO denied assessee s claim of deduction u/s 80IB(10) are not valid. However, she found that housing project Sadguru Krupa was approved by municipal Commissioner, Kukatpally on 30/03/07, therefore, assessee was required to complete the project by 31/03/2011 i.e. within a period of four years for claiming deduction u/s 80IB(10). As observed by ld. CIT(A), in course of appeal proceeding when assessee was asked to furnish the completion certificate for the Sadguru Krupa project, assessee filed a partial completion certificate dated 31/12/2011 issued by GHMC wherein it was mentioned that out of six blocks in the project i.e. Block A to F, assessee has completed three blocks i.e. A, B F with all amenities which are fit for occupation. From completion certificate issued by GHMC, ld. CIT(A) found that though the approval for the project was for construction of six residential blocks, which formed part of one single housing project, assessee has completed only three of the blocks. Referring to the provision contained u/s 80IB(10), ld. CIT(A) opined that the provision refers to approval of a housing project and it does not envisage for part of the housing project ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having completed three blocks with all amenities which covers an area of more than one acre and as the built up area of each residential unit is not exceeding 1500 sq.ft., it is eligible for claiming deduction u/s 80IB(10). He submitted, only because some other blocks in the housing project have not been completed, it will not disentitle assessee from availing deduction u/s 80IB(10) for the residential buildings which were completed within the stipulated period. In support of such contention, ld. AR relied upon the following decisions: 1. Rahul Construction Co Vs. ITO, [2012] 21 Taxman.com 435 2. CIT Vs. B.M. Brothers, [2014] 42 taxman.com 24 (Guj) 3. CIT Vs. Vandana properties, 35 ITR 36 (Bom.) 7. Ld. DR, on the other hand, submitted, housing project of assessee approved by the local authority consists of six blocks, whereas, assessee has submitted completion certificate in respect of three blocks. Therefore, since construction of the entire housing project i.e. six blocks have not been completed, assessee is not eligible to avail deduction u/s 80IB(10). Ld. DR referring to the provision contained u/s 80IB(10) submitted, assessee has to complete entire housing projec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by statute. Though, it may be a fact that assessee has not completed all the six blocks, but, in our view that will not deprive assessee from availing deduction u/s 80IB(10) in respect of each of the completed block on stand alone basis. The Hon ble Bombay High Court in case of CIT Vs. Vandana Properties (supra) while referring to the term housing project has observed that it has not been defined either u/s 2 of the Act or u/s 80IB(10), hence, it has to be understood as per common parlance. The Hon ble Court observed that housing project in common parlance would mean constructing a building or group of buildings consisting of several residential units. Therefore, deduction u/s 80IB(10) will be allowable even in respect of one building with several residential units, if it otherwise fulfills conditions of section 80IB(10). The ITAT, Pune Bench in case of Rahul Construction Co. Vs. ITO (supra), while deciding the dispute of identical nature, held as under: In the case of Saroj Sales Organisation (supra), before Mumbai Bench, almost similar facts as before us were there-. 'The commencement certificate in respect of six wings in Block 'N' was separately received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years. Assessee having completed blocks A, B F within five years from the date of approval, in our view, it is eligible to claim deduction u/s 80IB(10) in respect of blocks A, B F. 8.2 Though, in principle, we agree that assessee is eligible to claim deduction u/s 80IB(10) in respect of blocks A, B F, however, the quantum of deduction has to be verified. As could be seen, assessee has been recognizing revenue from Sadguru Krupa project by following percentage completion method and project of the assessee has started in FY 2007-08. As it appears, assessee in the years under consideration i.e. AYs 2010-11 and 2011-12 has recognized revenue on percentage completion method and has also claimed deduction u/s 80IB(10) on that basis. Therefore, it is very much necessary and essential to verify whether deduction claimed in these two AYs is for the entire project (all six blocks) or only blocks A, B F. Neither the AO has examined this aspect nor the assessee has brought any material on record to indicate that deduction claimed u/s 80IB(10) for these two years is only in respect of blocks A, B F. When the assessee started the project in FY 2007-08, he could not have visualized t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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