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Cecon Builders Versus Asstt. Commissioner of Income Tax And Others

2016 (3) TMI 453 - ITAT HYDERABAD

Eligibility of deduction under section 80IB(10) - Held that:- All these issues had arisen in the assessee's own case in the earlier assessment year, i.e., A.Y. 2009-10 and this Tribunal has upheld the order of the Ld. CIT(A) in holding that the assessee is eligible for deduction under section 80IB(10) as the permission was obtained for the project and it was not really important that the permission was in the name of the land owners. As regards the excess of the constructed area and the allowabi .....

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Madhavi Devi, JM The appeals are for the A.Y. 2010-2011. ITA.No.106/Hyd/2015 is the appeal of the Assessee against the order of the Ld. CIT(A) in restricting the assessee's claim of deduction under section 80IB of the I.T. Act and ITA.No.124/Hyd/2015 is filed by the Revenue against the order of the Ld. CIT(A) in holding that assessee is eligible for deduction under section 80IB(10) of the I.T. Act even though the second permission was taken by the assessee beyond the prescribed due date. 2. .....

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ed for various details to verify the genuineness and allowability of the deduction claimed under section 80IB(10) of the Act. The assessee filed the required details and on scrutinizing the said information, the A.O. observed that the firm has taken-up development of housing project over a land of 01 Acre 9 ½ guntas situated at D.No.1-42/G, Pragathi Nagar Enclave, Miyapur, Hyderabad and that the deduction under section 80IB claimed is for this project. He observed that the formal sanction .....

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l of 108 residential units. He observed that as per the development agreement with the land owners, the assessee firm had agreed to give 41% of the constructed area (inclusive of common areas) and one car parking per flat to the land owners. The A.O. further observed that as per the initial municipal plan, the assessee obtained permission only for the development of cellar, stilt plus 9 upper floors with a total constructed area of 9763.76 sq. mts. Whereas, the assessee firm constructed 16307.60 .....

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aks about the grant of permission and applicability of exemption only to the firm for which the municipal permission is granted for. He observed that the assessee firm has satisfied all the conditions required under section 80IB(10) of the Act for allowing the deduction under section 80IB except for obtaining the plan approval from the local authority in the name of the land owners and also in not submitting the completion certificate from the local authority. Further, the A.O. also held that as .....

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t, bills and vouchers etc., but the assessee did not produce the same. In view of the above reasons, the A.O. disallowed the claim of deduction under section 80IB(10) of the Act and proceeded to estimate the income of the assessee at 12.5% of the total turnover. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who held that the assessee is eligible for deduction under section 80IB(10) of the Act but restricted it to the constructed area of 9763.76 sq. mts on proportionate basis. .....

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. Counsel for the assessee submitted that the A.O. himself has observed that the assessee has fulfilled all the conditions prescribed under section 80IB(10) of the I.T. Act except for the obtaining municipal permission for construction of the building in its name. He has submitted that the Coordinate Bench of this Tribunal in assessee's own case for the A.Y. 2009-10 in ITA.No.550/Hyd/2013 and ITA.No.590/Hyd/2013 dated 07.03.2014, while considering the assessee's claim of deduction under .....

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by the assessee in accordance with the approval of the GHMC and whether the assessee was eligible for 80IB(10) deduction even for the excess of the constructed area, the Ld. Counsel for the assessee, submitted that the Tribunal at para-7 of its order in assessee's own case for the A.Y. 2009-2010 has considered the issue at length along with the issue of estimation of income and has remanded both the issues to the file of the A.O. for re-consideration. 4. The Ld. D.R., on the other hand, rel .....

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wners. As regards the excess of the constructed area and the allowability of the deduction on the entire building and also on the estimation of income, we find that for the year under consideration also, the issue needs re-consideration by the A.O. on similar lines as in the earlier assessment year. The relevant paragraph is reproduced hereunder for ready reference. "7. Even though principles considered therein do apply to the present facts, what we are unable to decide is whether the same .....

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we are unable to give any finding on this. Moreover, the BPS scheme was applicable only to the applications made on or before 31-03-08. The plans were approved only in July 2007. Payments for penalty were made later as can be seen from copy of approval placed on record. Since revised plans were not placed on record we are unable to decide issue only on legal principles. The A.O. is directed to examine the original plans, revised plans and examine whether the deduction under 80IB is eligible for .....

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