ASSISTANT COMMISSIONER OF INCOME-TAX vs. M/S. NAMRATA DEVELOPERS,, PUNE

This bunch of appeals filed by Revenue and Cross Objections filed by the assessee were heard together and are being disposed of by this consolidated order for the sake of convenience.

First, we take up ITA No.1974/PUN/2016 and CO No.40/PUN/2018, relating to assessment year 2011-12.

The Revenue in ITA No.1974/PUN/2016, relating to assessment year 2011-12 has raised the following grounds of appeal:- 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in allowing deduction u/s 80IB(10) of the Act when the plot was divided into two parts due to 30 meters reservation on DP road & 30 meters reservation for HCMTR, as a result plot area of both the buildings located at Plot No.I & II was less than 1 acre individually, without considering the facts elaborated by the AO? 2. The order of CIT(A) may be vacated and that of the Assessing Officer be restored.

The assessee in CO No.40/PUN/2018, relating to assessment year 2011-12 has raised the following ground of objections: 1. The learned CIT(A) has erred in law and on facts in not deciding the additional ground of appeal that the additions in assessment proceedings are beyond the jurisdiction in view of the fact that there was no incriminating material found during the course of search.

The Revenue is aggrieved by the order of CIT(A) in allowing deduction under section 80IB(10) of the Act on the project where plot was divided into two parts due to 30 meters reservation on DP road and 30 meters reservation for HCMTR.

The learned Authorized Representative for the assessee pointed out that the issue raised in the present appeal is covered by the order of Tribunal in assessee’s own case relating to assessment year 2008-09 in ITA No.1281/PN/2012, order dated 11.03.2014. The learned Authorized Representative for the assessee was asked to clarify the factual aspects of said project undertaken by the assessee known as ‘Namrata Magic’. The learned Authorized Representative for the assessee explained that the project commenced on 28.04.2005 i.e. after first approval, copy of which is placed at pages 1 to 4 of Paper Book-II. He also pointed out that the scheduled date of completion was 31.03.2011 as per the Act. However, part of project was completed on 31.03.2008 and balance on 31.03.2011 and the assessee received completion certificate which are placed at pages 5 to 10 of Paper Book-II. He stressed that project was completed within time. He further pointed out that for the first time, claim under section 80IB(10) of the Act was made in assessment year 2007-08, wherein the said claim was allowed pursuant to the order of Tribunal under section 143(3) r.w.s. 254 of the Act, dated 31.03.2015. The learned Authorized Representative for the assessee pointed out that the issue of claim of deduction under section 80IB(10) of the Act was decided in its favour by the Tribunal for the first time in assessment year 2008-09 vide order dated 11.03.2014, which was also followed for assessment year 2007-08. In assessment years 2009-10 and 2010-11, no claim was made and the appeal under consideration relates to assessment

The learned Departmental Representative for the Revenue on the other hand, stressed that in view of DP road within project, the plot size of each project was less than one acre and the assessee was not entitled to the aforesaid claim of deduction under section 80IB(10) of the Act. However, he fairly agreed that the issue has been decided by the Tribunal in earlier years.

We have heard the rival contentions and perused the record. The assessee had undertaken the development of project ‘Namrata Magic’ and had claimed deduction under section 80IB(10) of the Act. However, in assessment years 2007-08 and 2008-09 the claim of assessee for deduction under section 80IB(10) of the Act was denied. The Assessing Officer in the present year also, took note of the said fact, against which the assessee claimed that the issue has been decided in its favour by the Pune Bench of Tribunal. However, since an appeal was filed before the Hon’ble High Court, the Assessing Officer in order to keep the issue alive, denied the claim of deduction under section 80IB(10) of the Act. The CIT(A) however, following the order of Tribunal in assessee’s own case allowed the aforesaid claim, against which the Revenue is in appeal.

We find that the issue is squarely covered by the order of Tribunal (supra) in assessee’s own case, wherein in para 3 it was observed that the total area of plot was 6900 sq.mtrs. and after reducing 300 sq.mtrs. for project road, remaining area was 6600 sq.mtrs. The first approval of PMC authorities was given on 28.04.2005 and in the said approval, area of land was shown at 6600

Before parting, we may also mention that the project had commenced on 28.04.2005 as per first approved plan and the said project has been completed within stipulated time allowed under section 80IB(10) of the Act i.e. by 31.03.2011, for which necessary evidence has been filed on record. Consequently, the assessee is entitled to claim the deduction under section 80IB(10) of the Act. Thus, grounds of appeal raised by the Revenue are dismissed.

The learned Authorized Representative for the assessee pointed out that Cross Objections filed by the assessee would become academic in case the

Now, we take up the appeal filed by Revenue and Cross Objections filed by assessee relating to assessment year 2012-13.

The issue raised by the Revenue is in respect of another project developed by the assessee i.e. ‘Leelawati Greens’, wherein it was noted that the assessee in violation to the provisions of section 80IB(10)(f) of the Act had made multiple allotments of the flats to family members.

Brief facts relating to the issue are that the assessee during the year under consideration had developed another project i.e. Leelawati Greens, wherein it had allotted flats to various persons. The Assessing Officer on verification found that the assessee had made multiple allotments of flats to family members i.e. two flats were allotted to spouses of the individuals. The Assessing Officer held the assessee not to be entitled to claim the deduction under section 80IB(10) of the Act in violation of clause (f) of the said section. The Assessing Officer did not accept the claim of prorata deduction to be allowed to the assessee.

The CIT(A) however, vide paras 10.4 to 10.4.2 deliberated on the issue of multiple allotments and held it entitled to claim deduction on prorata basis except for the profits arising on sale of two flats out of i.e. Flat Nos.A8-302 and 303, which were allotted to Mrs.Khushboo Kularia and Mr. Ashok Kularia (wife & husband) and A2-103 and 104 allotted to Mrs. Snehlata Joshi and Mr. Vasant Hoshi (wife & husband). The CIT(A) was of the view that the profits on

The Revenue is in appeal against the order of CIT(A).

The learned Departmental Representative for the Revenue placed reliance on the order of Assessing Officer.

The learned Authorized Representative for the assessee placed reliance on the order of CIT(A).

We have heard the rival contentions and perused the record. The assessee had claimed deduction under section 80IB(10) of the Act in respect of project ‘Leelawati Greens’. Under the provisions of section 80IB(10)(f) of the Act, which came into force w.e.f. 19.08.2009, where more than one residential unit was allotted to person being an individual, no other residential unit in such housing project is to be allotted to the individual or the spouse or the minor children of such individual or Hindu Undivided Family in which such individual was the Karta or any person representing such individual, then where the assessee has violated the provisions of the Act, would not be eligible for the claim of deduction under section 80IB(10) of the Act. It may be pointed out that the assessee had violated the aforesaid provisions of clause (f) of section 80IB(10) of the Act, wherein flat Nos.A8-302 and 303 were allotted to

Now, coming to the Cross Objections filed by the assessee, wherein the assessee is aggrieved by the order of CIT(A) in not allowing deduction under section 80IB(10) of the Act on prorata basis in respect of profits from Club house in the project ‘Leelawati Greens’ for want of completion certificate. The assessee had also constructed Club house within the said project ‘Leelawati Greens’. However, the assessee did not furnish the requisite document before the Assessing Officer i.e. no completion certificate was furnished before the

Before the CIT(A), the assessee furnished additional evidence by way of application submitted for completion certificate within time frame allowed, which was admitted as additional evidence after confronting the same to Assessing Officer. The assessee further placed reliance on the decision of the Hon’ble Bombay High Court in CIT Vs. Hindustan Samuh Awas Ltd. reported in 377 ITR 150 (Bom) for the proposition that mere non-receipt of completion certificate should not be held against the assessee and prorata deduction should be allowed under section 80IB(10) of the Act. However, the CIT(A) denied the claim of assessee as even after gap of time, the assessee was unable to produce the completion certificate in respect of Club house.

The assessee by way of Cross Objections raised the issue before us.

We find merit in the plea of assessee especially in view of the proposition laid down by the Hon’ble Bombay High Court in CIT Vs. Hindustan Samuh Awas Ltd. (supra). The Hon’ble Bombay High Court has held that in case application is made in time before the local authority and even though no completion certificate has been received, that would be sufficient compliance of the conditions stipulated under section 80IB(10) of the Act. The CIT(A) has distinguished the factual aspects and observed that in the case before the Hon’ble Bombay High Court, the completion certificate was issued after stipulated date and was filed before the Hon’ble High Court. However, in the present case, no completion certificate has been received by the applicant till date. The learned Authorized Representative for the assessee pointed out that

The learned Authorized Representative for the assessee pointed out that grounds of appeal raised in assessment year 2013-14 are identical to the grounds of appeal raised by the Revenue in assessment year 2012-13 in respect of multiple allotment to spouses in ‘Leelawati Greens’.

The issue being similar and following the same parity of reasoning as in assessment year 2012-13, we dismiss the grounds of appeal raised by the Revenue in assessment year 2013-14.

The Cross Objections filed by assessee in assessment year 2013-14 are also similar to the Cross Objections filed in assessment year 2012-13 and following the same parity of reasoning, we hold that the assessee is entitled to

In the result, all appeals of Revenue and Cross Objections of assessee in assessment year 2011-12 are dismissed and Cross Objections of assessee in assessment years 2012-13 and 2013-14 are allowed.