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2016 (7) TMI 446 - ITAT MUMBAI

2016 (7) TMI 446 - ITAT MUMBAI - TMI - Eligibility of deduction u/s.80IB - Held that:- The undertaking qualifying for deduction u/s.80IB of the Act is an undertaking developing and building housing projects and the deduction is in respect of profits and gains derived from such housing project, satisfying the conditions stipulated in the clause therein. Thus, within a composite housing project, where there are eligible and ineligible units, assessee can claim deduction in respect of eligible unit .....

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owers T2 and T3 of Kapil Malhar Intelligent Home would be revenue neutral as regular tax liability is less than tax paid on the book profit. Assessee has not filed any specific submission or details for Tower T2 and T3 regarding the claim made for 80IB of the Act. Since the eligible deduction would be tax neutral the adjudication of balance amount becomes mere academic in nature and same was not directed. Above reasoned finding of CIT(A) needs no interference from our side, whereby CIT(A) has al .....

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6.2014 for A.Y. 2010-11. 2. In ITA No.5436/Mum/2014, Revenue has filed the appeal on the following grounds: 1. On the facts and in the circumstances of the case and in low, the Ld CIT(A) erred in relying on the order of the Hon'ble Madras High Court in the case of Vishwas Promoters Pvt. Ltd. and the order of the Hon'ble Bombay High Court in the case of Vandana Properties while allowing claim of deduction u/s 80IB(10) of the I.T. Act to the assessee, without appreciating the fact that the .....

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the towers no T4 to T6 were still under construction & section 80IB(10) stipulates that the entire project shall be completed within four years. 3. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction u/s 80IB(10) by holding that the condition for deduction is that the minimum plot area on which housing projects are required to be completed shall not be less than one acre and it was not relevant that there are more than one housing p .....

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the condition that none of the residential unit shall be of area exceeding 1,500 sq.ft. 5. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in accepting that the disallowance of deduction u/s 80IB(10) of the I T Act as revenue neutral for the reason that the income was assessable u/s 115JB of the IT Act, without appreciating the fact that the assessee is eligible to avail MAT credit in subsequent years. 3. In C.O. No.18/Mum/2016, assessee has filed the a .....

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rements. The aforesaid finding being arbitrary, perverse, and devoid of merits the same may please be vacated. 2. The learned CIT(A) has erred on facts and in law in confirming the disallowance of claim u/s 80IB(10) of ₹ 1 70,09,616/- in relation to the Tower T2 and Tower T3 of the Kapil Malhar Intelligent Home Project on the grounds that some of the units of the Housing Project have a built-up area exceeding 1500 sq.ft. 3. The learned CIT(A) erred in not accepting the Respondent Assessee& .....

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gent Homes, Baner, Pune by deed of assignment dated 10.04.2006. Assessee completed project T1, T2 and T3 and claiming deduction u/s. 80IB(10) of the Act and further observed that presently assessee is in the project of T4, T5 & T6. From the above deeds, it was placed that assessee itself treated T1, T2 & T3 as one phase and T4, T5 and T6 as another phase. Thus, accordingly, the project completion method, the profit was recognized only at the end of the project and the 80IB deduction can .....

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.80IB is for one single undertaking and deduction cannot be given on proportionate basis. According to Assessing Officer, as per the provisions of section 80IB the project undertaken to be eligible for 80IB has to be completed within a period of 4 years. But as per the above discussion, it was very clear that the assessee has completed only phase I and yet to complete phase II. Thus, it failed beyond the period of 4 years of completion. In view of this, Assessing Officer disallowed the claim of .....

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ted the order of CIT(A). 7. After going through rival submissions and material on record, we find that all flats in Tower T1 is less than 1500 sq.ft. Hence, as per the revised working submitted before the Assessing Officer, he should be allowed deduction of ₹ 1,44,91,313/- u/s.80IB(10) of the Act being eligible profit u/s.80IB of the Act. CIT(A) observed from the above that sole reason for denying the deduction u/s.80IB of the Act is that the entire project of assessee is not yet complete .....

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far as assessee s entitlement on proportionate basis u/s.80IB(10) of the Act is concerned, Hon ble Bombay High Court in case of M/s. Vandana Properties in Appeal No. ITA 3633 of 2009 held as under: Facts The assessee had constructed buildings A, B, C and D over a period of many years on a plot 01 land, admeasuring 2.36 acres situated at Kandivali (West), Mumbai. Pursuant to an order passed by the State Government in the year 2001 permitting conversion of the status of the land, the assessee beca .....

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lowing reasons:- a. The approval for 'E' building was granted on 11th October 2002 as an extension of the approvals granted for A, B, C and D buildings commencing from 9th June 1993 and, therefore, 'E' building being continuation of A, B, C and D buildings, the project must be held to have commenced prior to 1st October1998. b. A, B, C, D and E buildings are constructed on a plot ad-measuring 2.36 acres and if 2.36 acres of land is proportionately divided between five buildings, .....

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inimum area of one acre must be vacant. The said Section allows deduction to a housing project 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 on the said plot of land or not. The court also noted that Central Board of Direct Taxes (CBDT) by its letter dated 4th May 2001 addressed to the Maharashtra Chamber of Housing Industry had stated that additional housing project on existing housing project site can qu .....

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projects are approved by the local authority and fulfil the conditions set out under Section 80IB (10), the deduction there under cannot be denied to all those housing projects. 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 other housing projects or not Accordingly High Court held that the deduction u/s 80IB should be allowed. 7.2 .....

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ts derived in previous year relevant to assessment year from such housing project complying with the condition, each block in the larger project by name T1 , has to be taken as an independent building and hence a housing project, for the purpose of considering a claim of deduction. The undertaking qualifying for deduction u/s.80IB of the Act is an undertaking developing and building housing projects and the deduction is in respect of profits and gains derived from such housing project, satisfyin .....

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