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2015 (10) TMI 2235 - ITAT PUNE

2015 (10) TMI 2235 - ITAT PUNE - TMI - Deduction u/s. 80IB(10) - housing project “Kumar Primavera” - AO denied the benefit on the ground that the assessee has not completed the project within the time frame as stipulated under the provisions of section 80IB(10)- Held that:- It is not disputed by the Revenue that buildings A1 and A2 in Phase-I were complete and occupation certificate was granted by the PMC in respect of said buildings on 05-09-2008. In so far as buildings A3 to A8 in Phase-II are .....

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ligible to claim deduction u/s. 80IB(10) on all the residential buildings comprising in Phase-I (A1 and A2) and Phase-II (A3 to A8). The date of completion of Phase-II shall be reckoned from the date of commencement certificate issued by PMC in respect of buildings A3 to A8. We do not find any infirmity in the order of Commissioner of Income Tax (Appeals), accordingly, the same is upheld and the appeals of the Department are dismissed. - Decided in favour of assessee. - ITA Nos. 2028 & 2218/PN/2 .....

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ppeals) in allowing deduction u/s. 80IB(10) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) to the assessee in respect of housing project Kumar Primavera . The Revenue has challenged the findings of Commissioner of Income Tax (Appeals) by raising following grounds in the appeal for the assessment year 2008-09. 1. The order of the Id. Commissioner of Income-tax(Appeals) is contrary to law and to the facts and circumstances of the case. 2. The Id. Commissioner of Income-tax(Appea .....

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been completed before 31.03.2009, the assessee was entitled to deduction u/s. 80IB(10). 4. The Id. Commissioner of Income-tax(Appeals) grossly erred in failing to appreciate that buildings A-3 to A-8 formed part of the same one housing project which included buildings A-l to A-2; and as the assessee had not completed buildings A-3 to A-8 before 31.03.2009, it was not entitled to deduction u/s. 80IB(10) in respect of the "Kumar Primavera" project. 5. The Id. Commissioner of Income-tax(A .....

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se of computing the limitation period u/s. 80IB(10), the date of first approval has to be taken into account and as per Explanation (i) to sec. 80IB(10), subsequent approvals, if any, would date back to the first approval; and that by applying the said Explanation the assessee had failed to complete the construction of buildings A-3 to A-8 before 31.03.2009. 7. The Id. Commissioner of Income-tax(Appeals) grossly erred in holding that separate rule of completion had to be applied to buildings A-3 .....

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permitted by, the statutory provisions. 9. For these and such other grounds as may be urged at the time of hearing, the order of the ld. Commissioner of income-tax (Appeals) may be vacated and that of the Assessing officer be restored. 10. The appellant craves leave to add, alter or amend any or all the grounds of appeal. Identical grounds have been taken by the Revenue in assessment year 2009-10, except for the amount of deduction. 2. The brief facts of the case as emanating from records are : .....

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sidential buildings A3 to A8. The certificate of commencement in respect of phase-I was obtained on 02-02-2005. The phase-I of the project was approved for parking + 7 floors, whereas the commencement certificate in respect of phase-II was obtained on 08-09-2006. An approval was granted for construction of parking + 9 floors of the buildings. At the time of grant of commencement in respect of phase-II i.e. on 08-09-2006, the plan for phase-I was also revised and two more floors were added to the .....

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egistered Valuer (Category-I) with respect to the projects. The Registered Valuer vide his report dated 29-11-2010 inter alia observed that the plot area of the project is 6.15 acres, the area of each flat in the buildings constructed is less than 1500 sq. ft., there are total 288 flats in 8 buildings of P + 9 storey s, there is no shopping area, the completion certificate for 80 flats is yet to be received along with final completion certificate for plot no. 69. The date of first commencement i .....

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dated 30-12-2010 rejected the claim of the deduction u/s. 80IB(10) for assessment year 2008-09. For identical reasons, the claim of assessee u/s. 80IB(10) was denied by the Assessing Officer in the assessment year 2009-10. Aggrieved by the assessment orders, the assessee preferred appeals before the Commissioner of Income Tax (Appeals) for respective assessment years. The Commissioner of Income Tax (Appeals) after considering the submissions of the assessee and appreciation of the facts of the .....

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ucted 8 buildings i.e. A1 to A8 under the project Kumar Primavera . The commencement certificate was issued on 02-02-2005. The said commencement certificate was in respect of buildings A1 and A2 for construction of P + 7 floors. Thereafter, the plan was revised and the clearance was sought for 6 more buildings i.e. A3 to A8 for P + 9 floors. Vide same revised plan 2 more floors were added to buildings A1 and A2. As per the provisions of section 80IB(10), the assessee was required to complete the .....

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area of the project was 24902.715 sq. mtrs. The assessee bifurcated the area i.e. 4642 sq. mtrs. for Phase-I and 12458 sq. mtrs. for Phase-II. This bifurcation made by the assessee is an afterthought. There was no such bifurcation at the time of seeking approval for the alleged Phase-I. The fact that the buildings have been numbered consecutively from A1 to A8 itself shows that they are part of one single project. A perusal of the Auditor s report would further make it clear that there is no me .....

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f the Act. To support of his submissions the ld. DR placed reliance on the decision of Chennai Bench of the Tribunal in the case of ACIT Vs. Viswas Promoters (P.) Ltd. reported as 126 ITD 263 (Chennai). The ld. DR prayed for setting aside the impugned orders and restoring the findings of the Assessing Officer. 4. On the other hand Shri Rajendra Agiwal appearing on behalf of the assessee vehemently supported the order of First Appellate Authority. The ld. AR submitted that originally the plan was .....

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roved for P + 9 floors. The assessee had also obtained revised plan for building A1 and A2 in Phase-I and added two more floors to the buildings A1 and A2. The total area of plot on which the project Kumar Primavera was developed measured 24902.715 sq. mtrs. Thus, there is no dispute about the total area on which the entire project was developed. The assessee had obtained completion certificate in respect of buildings A1 and A2 comprises in Phase-I on 05-09-2008. Thus, the assessee had complied .....

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on certificate in respect of buildings in Phase-II was 31-03-2012. However, the assessee had obtained completion certificate in respect of flats in buildings A3 to A8 in Phase-II on 31-03-2011, i.e. well before the last date as mentioned in the Act. 4.1 Ld. AR submitted that the decision rendered in the case of ACIT Vs. Viswas Promoters (P.) Ltd. (supra) by the Chennai Bench of the Tribunal on which the ld. DR has placed reliance has been reversed by the Hon'ble Madras High Court vide judgme .....

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xman 524 (Madras HC)); iii. Rahul Construction Vs. ITO, 51 SOT 192 (Pune-Trib.); iv. Mudhit Madanlal Gupta Vs. ACIT, 51 DTR 217 (Mum-Trib.); v. ACIT Vs. Octave Exports, 36 ITR (T) 1 (Chandigarh-Trib.). 5. We have heard the submissions made by the representative of rival sides and have perused the orders of authorities below. We have also considered the decisions on which reliance has been placed during the course of making submissions. The undisputed facts as emerging from the records are, that .....

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0), the assessee was required to obtain completion certificate within 4 years from the end of financial year in which the housing project was approved by the local authority. Thus, in the present case, the last date for obtaining completion certificate was 31-03-2009. The assessee obtained completion certificate in respect of two buildings i.e. A1 and A2 on 05-09-2008. For the remaining six buildings i.e. A3 to A8 completion certificate was obtained on 31-03-2011. The assessee claimed deduction .....

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the provisions of section 80IB(10) of the Act. 6. The contention of the assessee is that the buildings A1 and A2 are in Phase-I and buildings A3 to A8 are part of Phase-II of the project. The completion certificate in respect of Phase-I was obtained on 05-09-2008, well before last date on which the project should be completed i.e. 31-03-2009. As regards building A3 to A8 in Phase-II the completion certificate was obtained in March, 2011 and as per the provisions of Act, the last date for obtaini .....

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rts on the basis of commencement certificate and claim deduction u/s. 80IB(10) on the same by treating them as sub-projects under the larger project. 8. The Commissioner of Income Tax (Appeals) allowed the claim of assessee by holding as under: 3.3. ……………. It is an established position of law now as per various decisions of various Tribunals including the Pune Tribunal, that the "project" is not defined in the Income tax Act and therefore, it has been .....

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unts so as to ensure that correct profit can be ascertained for the purpose of 80IB and also to identify receipts and repayments of long term finances under the provisions of sec. 10(23G), separate financing arrangements and also, if it is separately fulfils all other statutory conditions listed in section 10(23G) and 8018(10). With regard to your query regarding the definition of housing project it is clarified that any project which has been approved by a local authority as a housing project s .....

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andana Properties 128 TTJ 89 (Mum) etc. In this case, it is a fact that the plot area is 24,902.715 sq. mtrs. and in the first commencement certificate dated 2.2.2005, only two buildings were approved along with layout for road, open area etc. and there was definitely no mention of construction of other buildings. As per this certificate the appellant has total area available for construction at 20,694.905 sq. mtrs. for permissible tenements of 655 numbers, out of which only 56 were proposed in .....

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rva Properties and Estate Pvt. Ltd., Brahma Associates Vs. JCIT, DCIT Vs. Brigade Enterprises Pvt. Ltd., Saroj Sales Organization Vs. ITO, Vandana Properties Vs. ACIT support the above claim. The clarification issued by the CBDT referred to above and relied upon by the appellant also supports the above view. Therefore, the claims of the appellant raised vide Ground No. 1 and 2 are allowed. 9. It is evident from documents that originally the assessee sought approval of buildings A6 and A7, subseq .....

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buildings i.e. A3 to A8 is concerned the building plan was approved for the first time. It is not disputed by the Revenue that buildings A1 and A2 in Phase-I were complete and occupation certificate was granted by the PMC in respect of said buildings on 05-09-2008. In so far as buildings A3 to A8 in Phase-II are concerned, the completion certificate in respect of all the flats comprising in said buildings were granted by PMC up to March, 2011, whereas, the last date for obtaining completion cert .....

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projects are existing on the said plot or not. The relevant extract of the judgment is reproduced here-in-under: 27. Moreover, plain reading of Section 80IB (10) does not even remotely suggest that the plot of land having minimum area of one acre must be vacant. The said Section allows deduction to a housing project (subject to fulfilling all other conditions) constructed on a plot of land having minimum area of one acre and it is immaterial as to whether any other housing projects are existing .....

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88/19799/3 dated 1st January 2001 and to state that the additional housing project on existing housing project site can qualify as infrastructure facility under Section 10(23G) and 80IB (10) provided it is taken up by a separate undertaking, having separate books of accounts, so as to ensure that correct profits can be ascertained for the purpose of Section 80IB and also to identify receipts and repayments of long term finances under the provisions of Section 10(23G), separately financing arrang .....

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hat the housing project must be on a vacant plot of land having minimum area of one acre and that where a new housing project is constructed on a plot of land having minimum area of one acre but with existing housing projects would qualify for Section 80IB(10) deduction. Even otherwise, the argument of the Revenue does not stand to reason because, in the city of Mumbai where there is acute space crunch, it is difficult to find a vacant plot having minimum area of one acre and even if few such pl .....

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s. Section 80IB(10) while specifying the size of the plot of land, does not specify the size or the number of housing projects that are required to be undertaken on a plot having minimum area of one acre. As a result, significance of the size of the plot of land is lost and, therefore, the assessee subject to fulfilling other conditions becomes entitled to Section 80IB(10) deduction on construction of a housing project on a plot having area of one acre, irrespective of the fact that there exist .....

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to be various group of buildings constructed on a particular land but it can also be a particular building or any building which is part of the large project. 12. The Co-ordinate Bench of the Tribunal in the case of Rahul Construction Vs. ITO (supra) while dealing with a similar dispute has held as under: 9. To decide the above issue, it is necessary to decide firstly as to what would be first date of approval of the housing project by the PMC to compute the time limit prescribed for completion .....

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oject has not been defined in the Income Tax Act but in the context of deduction u/s. 80IB(10) an Explanation has been provided below clause (a) to subsection (10) to Section 80 IB. For a ready reference, the said Explanation is being reproduced hereunder : (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the .....

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of the housing project. When we read Explanation (ii) with Explanation (i) it makes clear that completion of construction of such building plan first approved by the local authority will be taken the date of completion of construction of such building plan when completion certificate has been issued by the local authority. In other words, in clause (i) of the Explanation, it has been made clear that would be the housing project, first approval of which, by the local authority would be taken as s .....

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of the Tribunal in the case of DCIT Vs. Brigade Enterprises (P) Ltd. (Supra) has held that plan for development is only a work order and not final plan sanctioned by the local authority. For any project, there could not have been a plan without submission of the detailed building plans, by the architect and what requisite details required to be submitted for approval of the building plans by the local authority. In the case of Saroj Sales Organization Vs. ITO (Supra), before Mumbai Bench, almost .....

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not claimed relief u/s. 80IB in respect of Block BC . In the case of Mudhit Madanlal Gupta Vs. ACIT (Supra ) before the Mumbai Bench, it has been held that the housing project does not necessarily have to be various group of buildings constructed on that particular land, but it can also be a particular building or any building which is part of a large project. It has been further held that whatever portion of the housing project is otherwise found to be eligible has to be considered as a housin .....

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the building plans for these buildings were firstly approved by the local authority and taking the said date of approval a starting point, he has to verify as to whether these buildings were completed within the prescribed time limit i.e. 31st March 2008 on the basis of the Completion Certificate in respect of such housing project issued by the PMC. When we examine the facts of the present case under the above background, we find that the authorities below have not disputed the fact furnished i .....

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ect A type building i.e. A1 to A5 consists of 360 residential units and the construction has been completed between 10.1.2005 to 31.8.2005 (page Nos. 6 to 9 of paper book). The authorities below have also not disputed this material fact that residential units has a maximum built up area of 1500 sq.ft. Likewise, these material facts that B Group buildings in Rahul Nisarg Cooperative Housing Society Ltd., have been constructed on land area of 138203 sq.ft., has not been denied by the authorities b .....

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