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Ravi Appasamy Versus The Assistant Commissioner of Income Tax, Circle II, 108, Chennai

2016 (5) TMI 1268 - MADRAS HIGH COURT

Deduction under Section 80IB(10) denied - date of completion - selection of relevant date - ITAT held that the assessee should be deemed to have commenced the work of development and construction, from the time even when the preliminary works started - Held that:- From the finding recorded by the Tribunal it is clear that certain expenses incurred by the assessee in removing the hut dwellers, digging of bore well, getting electricity connection, putting up compound walls and security cabins, etc .....

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al held that all pre-construction activities should be taken to be part of development, so as to pre-pone the date of development and construction. This, in our considered view, is not the correct interpretation to be offered to the composite expression "development and construction"of the housing project. - Decided in favour of assessee - Tax Case Appeal No.96 of 2008 - Dated:- 1-2-2016 - MR. V.RAMASUBRAMANIAN AND MR. N.KIRUBAKARAN, JJ. For The Appellant : Mrs.Anita Sumanth For The Respondent : .....

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n the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that the development and construction of the project has commenced prior to 01.10.1998 and consequently the claim under section 80 IB of the Act is not tenable? (3) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal is right in law in coming to the aforesaid conclusion, without taking into account the various documents, evidence and submissions placed before the .....

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ession 'development and construction' contained in section 80 IB of the Income Tax Act is correct and whether the Tribunal is right in law in concluding that the development and construction has taken place before 01.10.1998?" 2. Heard Dr.Anita Sumanth, learned counsel for the appellant and Mr.T.Ravi Kumar, learned Standing Counsel for the Revenue. 3. The assessee filed a return of income for the assessment year 2001-02 on 30.10.2001 admitting a particular amount of total income. Th .....

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20, Inner Ring Road, Koyambedu, on 25.9.1993, for the purpose of development, the Assessing Officer thought that the main issue that he was called upon to determine was whether the assessee had commenced development and construction of the housing project on or after 01.10.1998. The case of the assessee was that the development and construction work commenced on 15.10.1998. 5. The Assessing Officer passed an order dated 31.3.2004 holding that even the pre-construction work which would fall withi .....

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In paragraph 5.6 of his order, the CIT (Appeals) recorded the timeline of events as follows: "5.6. In the background of the above discussion, it is to be examined whether the appellant fulfills the conditions enumerated u/s.80IB(10) or not. For the sake of convenience the various events which have been taken place in chronological order are enumerated below:- (i) Signing of agreement for purchase of land with owners 25.09.1993 (ii) Digging of Borewell 19.10.1996 (iii) Construction of compo .....

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) Submission of revised plan for construction of Ground +10 floors to statutory authorities for plan approval and payment of fees 24.12.1997 (x) Clearance from various statutory authorities - Police Department 10.02.1998 Airport Authority 12.03.1998 (xi) Approval received from CMDA for Ground +10 floors 04.08.1998 (xii) Commencement of construction at site 15.10.1998 (xiii) Final approval from Chennai Corporation 05.07.1999 Admittedly, the construction started only on 15.10.98 which is after 1.1 .....

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er 1.10.98, the appellant would be entitled for deduction u/s.80IB(10) since the appellant would then be fulfilling all the conditions. Therefore, essentially it boils down to finding out at what point of time, the appellant can be said to have commenced the "development of the project". As stated earlier, for "development" to take place, "the project" has to be in existence. Therefore, it is necessary to find out when "the Project"came into existence.&quo .....

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levant part of Sub-section (10) of Section 80IB. It reads as follows: "(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project, if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day o .....

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construction of the housing project. 10. From paragraph 5.6 of the order of the CIT (Appeals), which we have extracted above, it is seen that the Commissioner (Appeals) recorded a finding of fact to the effect that the commencement of construction at site was on 15.10.1998. The CIT (Appeals) went one step further in paragraph 5.6 of his order pointing out that the Assessing Officer had not disputed the said fact. What was disputed by the Assessing Officer before the CIT (Appeals) was whether the .....

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ing in paragraph 11 of its decision that the expression "development and construction at site" should be given the ordinary meaning without any extraneous aid, was that it took into account the definition of the expression "development" appearing in Section 2(13) of the Tamil Nadu Town and Country Planning Act, 1971. In other words, the Tribunal held that the very fact that the development of the project had commenced, was sufficient to hold that even the construction had com .....

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