TMI Blog2013 (6) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had claimed deduction u/s 80IB(10) of the Act of ₹ 1,46,24,573/- in respect of a housing project viz. 'Oakwoods' at Viman Nagar, Pune. In the course of assessment proceedings, the Assessing Officer held that assessee was not eligible for the claim of deduction u/s 80IB(10) of Act and accordingly the deduction claimed at ₹ 1,46,24,573 was denied. The CIT(A) has upheld the claim of the assessee and therefore the Revenue is in appeal challenging the action of the CIT(A). 4. Section 80IB(10)of the Act permits an assessee to claim deduction in respect of profits derived from development and construction of a housing project, which has been approved by the 'local authority' before 31.3.2007, subject to fulfillment of the conditions prescribed therein. In the case before us the dispute revolves around the condition prescribed in Clause(a) to Section 80IB(10) of the Act and the Explanation thereof, which read as under :- (10) The amount of deduction in the case of an undertaking developing and building house projects approved before the 31st day of March 2007 by a local authority shall be hundred per cent of the profits derived in the previous yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer is to the effect that the date of first approval granted by the PMC is to be considered, which is 02.11.2003 and not 19.01.2005, which is the date on which a Revised plan has been approved by PMC. Therefore, as per the Assessing Officer, period available for completion of construction shall be governed by sub-clause (i) of clause (a) of section 80IB(10) of the Act, and accordingly the construction of the project was to be completed by 31.3.2008. Since the final completion certificate in respect of assessee's housing project has been issued by the PMC on 20.12.2008, and thus as per the Assessing Officer, project of the assessee does not comply with the requirements of clause (a) of section 80IB(10) of the Act. Explanation (i) to clause (a) of section 80IB(10) prescribes that in a case where the approval in respect of 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 the housing project was first approved by the 'local authority'. The Assessing Officer has noted that the completion certificate issued by the PMC referred to first commencement certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommencement certificate dated 01.11.2003, which has been referred to in the assessment order. However, it has been clarified by the PMC that no development was carried out on any of the three difference plots sanctioned in 2003. Subsequently, on 20.07.2004, the PMC vide commencement certificate no. DPO2822 dated 20.07.2004 sanctioned the plot admeasuring the area 7826.89 sq. mtrs. after amalgamation. It was for development of this particular piece of land that the appellant firm had obtained the development rights and the building plan approval taken in January, 2005 was for this land; containing 4 buildings and 112 flats. It was also clarified that account of approval of layout plan after amalgamation vide the commencement certificate No. DPO 2822 dated 20.07.2004 all previous approvals were canceled. However, since the original three plots were part of the amalgamated piece of land, the building plan sanctioned on 19.1.2005 was termed and approved as a 'revised plan'. Accordingly, it is contended that the 'Oakwoods' project of the appellant firm can be treated to have commenced w.e.f January 2005 only, and therefore, time was a available upto 31.3.2009 for the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner but no development ever took place even as per that sanction. Therefore, it was pointed out that merely because the building plan approval dated 19.01.2005 issued the PMC mentions it as a revised approval, it cannot be treated as the first building plan approval for the project undertaken by the assessee. In this connection the learned counsel has referred to the detailed submission made before the CIT (Appeals) which have been reproduced in the impugned order and in particular reference has been made to a letter dated 31.12.2009 issued by PMC which clarified that prior to assessee acquiring the plot of 7826.89 sq. mtrs. on 01.10.2004, the previous owners had three different plots and it was in respect of one such plot admeasuring 1983 sq. mtrs. the building plan approval was obtained on 2.11.2003 as referred by Assessing Officer. The PMC had clarified that no development was carried out on any of the three different plots and it was only on 20.07.2004 that the PMC amalgamated the plots into a single plot of 7826.89 sq. mtrs. , whose development rights were obtained by the assessee on 1.10.2004 and the assessee obtained approval for development of said plot in January 2005. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-94 of the Paper Book. The aforesaid facts are not in dispute. As per the assessee the project eligible for 10IB(10) benefit is the project undertaken on the plot of 7826.89 sq. mtrs. whose layout plan was approved by the PMC on 12.1.2005 and Building Pplans were approved on 19.1.2005. 11. As noted earlier, the date of approval of the project is relevant to ascertain the permissible period of completion of construction. In terms of sub- clauses (i) and (ii) of clause (a) to sec. 80IB(10) of the Act, the determination of date of completion of construction is to be reckoned with reference to the date of approval by the local authority. The Explanation (i) below Clause (a) to sec. 80IB(10) of the Act prescribes that in a case where the approval in respect of a 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 local authority. Notably, Explanation (i) is to be applied in a situation where in respect of a housing project, approvals have been obtained more than once. Pertinently the said Explanation is not relevant to a case where approvals are g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, whose Building Plan approval was first made on 19.1.2005. It cannot be denied that the approval on 2.11.2003 was by the previous owners in as much as the assessee was incorporated on 20.7.2004 only. Assessee acquired development rights of the plot of 7826.89sq. mtrs. of land only on 1-10-2004. Originally there were three different plots and it was in respect of one of these plots admeasuring 1983sq. mtrs. that the previous owner obtained a building plan approval dated 01-11- 2003, which has been referred to in the assessment order. It has been brought out by the CIT(Appeals) that no development work was carried out on any of the three plots sanctioned in 2003. Before acquisition by the assessee, the three plots were amalgamated and assessee acquired the amalgamated plot and made new layout and building plans which were later approved by PMC in 2005. Therefore, the Building Plan approval dated 19-01-2005 is the first Building plan approval in respect of the aseessee's project. Moreover, at page 92 of Paper Book, assessee has made a statement showing the difference in the layout and building plan submitted by the previous owner with respect to 2003 approval and the im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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