9911796707
Advanced Search 
TMI Blog2013 (9) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... report in the prescribed form. During the course of assessment proceedings, the date of commencement certificate, approved plans and percentage of completion of work was duly furnished. On verifying the copies of agreement of sale with the flats purchasers, the Assessing Officer noted that in case of two buyers, Sulbha M. Waghle and Mangesh G. Waghle, they have entered into a joint agreement of the said flats admeasuring 300 sq.ft. and 674 sq.ft. respectively totaling to Rs. 974 sq.ft. carpet area was converted into built-up area after taking 15% as booking area which exceeded 1,000 sq.ft. Thus, the total flat area had become 1120 sq.ft. of the built-up area. From this instance, the Assessing Officer came to the conclusion that built- up area of the unit has exceeded to 1,000 sq.ft. and, therefore, as per the provisions of section 80IB(10), the assessee is not eligible for deduction especially when these two flats have been sold to one family. Simply on this premise the disallowance of the deduction under section 80IB(10) was made by the Assessing Officer vide order dated 28th December 2007. The penalty under section 271(1)(c) was also initiated on this reasoning only. 3. Against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate order. 7. Before us, the learned Counsel, Mr. Vijay Mehta, on behalf of the assessee, submitted that the penalty proceedings has been initiated during the course of original assessment proceedings under section 143(3) vide order dated 28th December 2007. The reason for initiation of penalty proceedings was that in one case, the two members of the family have joint the flats which have aggregated to more than 1,000 sq.ft. and, hence, there is a violation of the provisions of 80IB(10). The reasons given by the learned Commissioner (Appeals) is the post event i.e., search and seizure action, which was carried on at a much later date i.e., on 24th July 2008. At that time, the assessee had time upto 31st March 2008 for completion of the project. The penalty cannot be confirmed on the reasoning given by the learned Commissioner (Appeals) because those are post assessment event and completely different from the ground of initiation of penalty proceedings by the Assessing Officer. Once the penalty has been initiated on one ground, the same cannot be confirmed on all together different grounds and reasoning. Moreover, the reason being given by the Assessing Officer that such a joining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,04,55,261 and has claimed 100% deduction under section 80IB(10). The assessee's claim has been denied by the Assessing Officer during the course of scrutiny proceedings under section 143(3), mainly on the ground that in one of the instances of the sale, two members of the same family had entered into two separate agreements for two flats which was later joined by them which resulted into area of slightly more than 1,000 sq.ft. Once the assessee has made two separate units which was less than 1,000 sq.ft. and has sold these units separately then the subsequent event of joining of the flats by the purchasers cannot be adversely viewed against the assessee for denying the claim of deduction under section 80IB(10), on the ground that it has violated the conditions of section 80IB(10). The Assessing Officer has initiated the penalty proceedings under section 271(1)(c) on this condition only which is evident from order dated 28th December 2007. The appeal against the said assessment order in quantum proceedings was later on withdrawn by the assessee on the ground that proceedings under section 153A have been initiated for the assessment year 2005-06, in the wake of search and seizure a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee has not fulfilled the conditions of completion of project after 31st March 2008, then only the deduction allowed can be withdrawn. This can be done only at the subsequent stage i.e., post 31st March 2008. This has also been clarified by the CBDT vide instruction no.4 of 2009 dated 30th June 2009 which, for the sake of ready reference, is reproduced herein below:- "INSTRUCTION NO 04/2009, Dated: June 30, 2009 Sub: Section 801B - Deduction u/s 801B(10) available on a year to year basis where the assessee is showing profit from partial completion of the project in every year 1. Under sub-section (10) of section 80-lB an undertaking developing and building housing projects is allowed a deduction of 100% of its profits derived from such projects if it commenced the project on or after 1.10.1998 and completes the construction within four years from the financial year in which the housing project is approved by the local authority. 2. Clarifications have been sought by various CCsIT on the issue whether the deduction u/s 80-IB(l0) would be available on a year to year basis where an assessee is showing profit on partial completion or if it would be available only ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
