THE COMMISSIONER OF INCOME T vs. PACE BUILDERS (MADRAS) PVT L

T.C.A.No.231 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.08.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE PUSHPA SATHYANARAYANA T.C.A.No.231 of 2020 The Commissioner of Income Tax, Chennai. .. Appellant Versus M/s.Pace Builders (Madras) Pvt Ltd., B-56, Anna Nagar East, Chennai 600 102 PAN AABCP0675N .. Respondent Prayer:- Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 16.03.2018 made in I.T.A.No.280/Mds/2017 relating to the Asst Year 2012-13. For Appellant : Ms.R.Hemalatha Senior Standing Counsel For Respondent : Mr.Ashok Pathy for M/s.Pass Associates 1/7 http://www.judis.nic.in T.C.A.No.231 of 2020 JUDGMENT [Order of the Court was made by

T.S.SIVAGNANAM

, J.]

This appeal by the assessee under Section 260 A of the Income Tax Act, 1961 ('the Act' for brevity) is directed against the order dated 25.07.2018 passed by the Income Tax Appellate Tribunal, Madras, 'A' Bench,('Tribunal' for brevity) in I.T.A.No.280/Mds/2017 for the assessment year 2012-13. The appeal has been filed, raising the following substantial questions of law. 1. Whether the Tribunal was correct in holding that the Section 80IB (10) deduction is to be allowed to the assessee only on two completed blocks during the present assessment years out of the total five blocks which the assessee has applied before the competent authority indicating the project as a whole? 2. Whether the Tribunal was right in granting relief u/s.80IB (10) on two completed blocks out of 5 blocks for which project approval has been obtained especially when the income tax act does not provide for any partial allowance for completion of the project? 3. Whether relief is to be granted to the assessee 2/7 http://www.judis.nic.in T.C.A.No.231 of 2020 u/s.80IB (10) especially when the assessee did not substantiate with documentary evidence in respect of size of the land, built up area etc which is a condition precedent for granting relief? 2. We have elaborately heard Ms.R.Hemalatha, learned Senior Standing Counsel appearing for the appellant / Revenue and Mr.Ashok Pathy, learned counsel for M/s.Pass Associates accepting notice on behalf of the respondent. 3. The assessee in the Return of Income filed for the assessment year under consideration / AY 2012-13, among other things claimed deduction under Section 80 IB(10) of the Act. The Assessing Officer issued notice calling upon the assessee to explain as to why the deduction should not be disallowed on the ground that the assessee did not give the breakup details of the size of the land in which the apartment complex is developed. The assessee did not furnish the details of survey number and filed few details without the purchasers address and copy of some documents. On perusal of the same, the Assessing Officer was of the view that the built up area of a flat sold to one Mr.Sivaramakrishnan Natarajan was about 1570 3/7 http://www.judis.nic.in T.C.A.No.231 of 2020 sq.ft and as it exceeds 1500 sq.ft as mentioned in Clause (c) of Proviso under Section 80 IB (10), the Assessing Officer proposed to disallow the claim for deduction. The assessee by letter dated 26.03.2015 stated that they had developed a housing project at Selaiyur, Tambaram for an area more than one acre, after obtaining approval from CMDA on 29.03.2007. The project was completed during the financial year 2011-12 relevant to the assessment year 2012-13 and upon completion, they obtained the Completion Certificate from the CMDA on 20.04.2011 and they were eligible for claiming deduction under Section 80 IB(10), as all conditions have been fulfilled. Further the assessee stated that they have consistently followed the completed contract method, since incorporation which has been accepted by the Assessment Officers for the earlier assessment years. The reply given by the assessee did not find favour with the Assessing Officer and accordingly, the assessment was completed under Section 143(3) by order dated 27.03.2015, disallowing the claim for deduction. 4. The assessee carried the matter on appeal to the Commissioner of Income Tax (Appeals)-III, Chennai ('CIT(A)' for brevity). By order dated 4/7 http://www.judis.nic.in T.C.A.No.231 of 2020 30.09.2016, the Appeal was partly allowed. The CIT(A) reversed the decision of the Assessing Officer in disallowing the deduction under Section 80IB(10). As against that portion of the order of the CIT(A), the Revenue preferred an appeal before the Tribunal which was dismissed and challenging the same, the Revenue is on appeal before us. 5. The assessee has given a factual explanation which was taken note of by the CIT(A). The condition to be fulfilled by the assessee to sustain his claim for deduction under Section 80IB(10) is to establish that the residential unit has a maximum built-up area of 1500 sq.ft as it is in a place which is not more than 25 km from the municipal limits of the cities. The Assessing Officer appears to have examined one document and stated that the built-up area is more than 1500 sq.ft. The word used in Clause c in the proviso to Section 80IB(10) is ''Maximum Built-up area'' and not 'Carpet area' or 'super built-up area'. 6. the undisputed fact is that the land on which the project was developed, measured an extent of 3.46 acres in which the assessee has 5/7 http://www.judis.nic.in T.C.A.No.231 of 2020 constructed two blocks and made a claim for deduction. It is an admitted case that the development has taken place in an extent of 1.65 acres. The Assessing Officer has failed to note the effect of a Completion Certificate which certifies that the developer has completed the project in accordance with the approved Building Plan as approved by the CMDA. The assessee also specifically states that the built-up area is 'maximum built-up area' and not 'carpet area' or 'super built-up area' and this fact has been considered by the CIT(A) as well as by the Tribunal and the assessee has been granted relief. In our considered view, there is no questions of law, much less Substantial Questions of Law arises for consideration in this appeal. The Tax Case Appeal fails and the same is dismissed. No costs. (T.S.S.,J) (P.S.N.,J) 26.08.2020 sk Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order To The Commissioner of Income Tax, Chennai. 6/7 http://www.judis.nic.in T.C.A.No.231 of 2020 T.S.SIVAGNANAM, J. AND PUSHPA SATHYANARAYANA, J. sk T.C.A.No.231 of 2020 26.08.2020 7/7 http://www.judis.nic.in