9911796707
TMI Blog2014 (7) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Revenue is that the CIT(A) erred in holding that the assessee satisfies all the conditions stipulated in section 80IB(10) of the Act. 4. In brief, the relevant facts, which are common to both the assessment years, can be summarized as follows. We may refer to the facts in the assessment year 2009-10 in order to appreciate the controversy. The respondent-assessee is an Association of Person (i.e. AOP), which is engaged in the business of promoters and developers. The respondent-assessee is an AOP comprising of Shri Dattatraya Laxman Khandge, Shri Vasant Laxman Khandge and M/s Namrata Developers (a registered partnership firm). The AOP was formed with the object of undertaking development and construction of a housing project styled as 'Flora City' in Talegaon Dabhade, Taluka Maval, Pune. The assessee-AOP furnished a return of income for assessment year 2009-10 declaring a total income of Rs. 'Nil', which, inter-alia, included a claim of deduction u/s 80IB(10) of the Act to the tune of Rs.13,26,29,776/- in relation to the profits derived from the aforesaid housing project. The claim of deduction has been denied by the Assessing Officer for the reason that the assessee's projec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and. 6. In the aforesaid background, the Assessing Officer objected to the assessee's claim for deduction u/s 80IB(10) of the Act. Firstly, as per the 4 Assessing Officer, the project undertaken by the assessee was a mixed project of piece-meal sanctions. In this context, the Assessing Officer noted that the project comprised of development and construction of twin bungalows, row houses, vertical bungalows/buildings and also sale of plots. As per the Assessing Officer, the project also envisaged selling of open plots of land without development; in support he referred to Clause No.5(h) of the joint venture agreement which permitted the developer i.e. assessee-AOP to sell plots also apart from development and sale of built-up buildings. This factor, according to the Assessing Officer, disentitled the assessee to the claim of the deduction u/s 80IB(10) of the Act. Secondly, as per the Assessing Officer, the project of the assessee was to have been completed on or before 31.03.2011 in terms of section 80IB(10)(a)(ii) of the Act whereas in the present case the last of the completion certificate was issued by the local authority on 02.09.2011. Thirdly, according to the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e open plot was sold to him. The building plan for the same was approved in the name of the said owner and so was the completion certificate. In other words, according to the assessee, the construction of the said bungalow was not a part of the impugned project and therefore the completion certificate dated 02.09.2011 in respect of the same would not determine the completion of project undertaken by the assessee. Before the CIT(A), assessee also furnished a certificate dated 23.02.2012 issued by the Talegaon Dabhade Municipal Council certifying that, in relation to building plan sanctions obtained by the assessee is concerned, the construction thereon was completed and the relevant completion certificates were issued by 31.03.2011. A copy of the said certificate along with the relevant Annexure has also been furnished by the assessee before us, which is placed at pages 7 to 9 of the Paper Book. 8. Considering the aforesaid material, the CIT(A) has decided the issue in favour of the assessee holding that assessee has duly complied with the conditions prescribed in section 80IB(10) of the Act. The relevant discussion in the order of the CIT(A), which brings out the manner in which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The A.O. has held that the project is mixed one on account of open sale of plots to some parties as stated above and is also based on peace-meal sanctions. For this proposition the A.O. has heavily relied upon 7 the report of the D.V.O reproduced in the Assessment Order wherein it has been stated that the area of the plot varies from 75 sq. mtrs to 600 sq. mtrs. Since, multiple sanctions have been obtained by the appellant in respect of construction of the bungalows/row houses and residential flats, the A.O. has based his conclusion that it is a case of peace-meal sanction and not a revised sanction of the same building plan. The observation of the A.O. apparently appears to be based on the report of the D.V.O. 10. The finding of the A.O. that the project is mixed one cannot be accepted in view of the fact that the appellant is entitled to revise its project as per law. Due to sale of certain plots, the plan of the housing project stands revised to that extent which has been approved by the Municipal Authorities too. The only condition to be seen is that after reduction of the area on account of sale of certain plots, the size of the project should not be less than one Acr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the project no adverse view could have been taken. In the reply, the appellant also submitted that the A.O. mistakenly took the last date of the completion of the project as 31.03.2011 oblivious of the amendment brought in the statute which states that in respect of a housing project approved by local authority after 01.04.2005, the project was required to be completed within 5 years from the end of the financial year in which the housing project is approved by the local authority. The submissions of the appellant is found 8 to be correct. Sec. 80IB(10)(a)(iii) inserted by Finance Act 2010, w.e.f. 01.04.2010 reads as under : "In a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority. " 13. Thus, it is clear that the A.O. was not justified in holding that the appellant was required to complete the project by 31.03.2011 as the Act itself was amended to incorporate the completion date to be 31.03.2012. It is also a fact that the completion certificate dated 02.09.2011 was in respect of open plot sold by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for the Revenue has primarily relied upon the reasoning taken by the Assessing Officer to deny the claim of deduction u/s 80IB(10) of the Act, which we have already adverted to in detail 9 in para 6 of this order and the same is not being repeated for the sake of brevity. 10. On the other hand, the learned Representative for the respondentassessee pointed out that obtaining of multiple building sanctions, does not result in the project being ineligible for section 80IB(10) benefits. It was pointed out that the project of the assessee comprised of development and construction of individual plot units by way of construction of twin bungalows, row houses and vertical bungalows, etc.. Therefore, merely because multiple building plans sanction were obtained cannot be held against the assessee and that the CIT(A) has justifiably set-aside the said objection. With regard to the mixed nature of the project, it was pointed out that so far as the sale of open plots to some parties is concerned, no deduction in respect of the same has been claimed by the assessee. In any case, by excluding the area of such plots, the size of the project did not reduce below one acre stipulated in section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no reasons to interfere with the aforesaid conclusion of the CIT(A) as neither on facts and nor on the point of law, any infirmity in the same has been pointed out by the Revenue before us. 12. Further with regard to obtaining of multiple building sanctions, in our view, the same cannot be held against the assessee. At this point, we may make a brief reference to Explanation (i) below clause (a) of section 80IB(10) of the Act which provides the date of approval of the first building plan of housing project shall be considered as the date of approval by the local authority. Notably, Explanation (i) read with clause (a) of section 80IB(10) of the Act itself recognizes a situation where an assessee may obtain building plan approvals in respect of a housing project more than once. In such a 11 situation, it is sought to be clarified that the housing project shall be deemed to have been approved on the date of which the building plan of such housing project is first approved by the local authority. Therefore, to say that because assessee had obtained multiple approvals and thus is disentitled for section 80IB(10) benefits, is against the legislative mandate. Hence, existence of multip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto consideration, yet it does not breach the outer limit of 31.03.2012 which is stipulated date in the present case for completion of project, as seen earlier. However, the claim of the assessee and which has been upheld by the CIT(A) is that the said completion certificate pertains to construction on a plot, which was undertaken by the purchaser himself. Assessee explained that the said plot was sold as such and the purchaser obtained the building sanction and the assessee had no role to play in the development and construction of the said plot. The aforesaid factual finding is not controverted by the Revenue before us. Accordingly, the stand of the CIT(A) on this aspect is also hereby affirmed. 14. As a result of the aforesaid discussion, we find that on all the aspects raised by the Assessing Officer, the CIT(A) made no mistake in upholding assessee's plea for the claim of deduction u/s 80IB(10) of the Act with respect to its housing project, 'Flora City' undertaken at Talegaon Dabhade, Pune. Thus, the order of the CIT(A) is hereby affirmed. 15. In the result, the appeal of the Revenue in ITA No.1795/PN/2012 for assessment year 2009-10 is dismissed. 16. In so far as, another ..... X X X X Extracts X X X X X X X X Extracts X X X X
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