DEPUTY COMMISSIONER OF INCOME-TAX vs. M/S. B.U. BHANDARI SCHEMES, PUNE

आदेश / ORDER

PER VIKAS AWASTHY, JM

This appeal by the Department is directed against the order of Commissioner of Income Tax (Appeals)-3, Pune dated 23.11.2015 for the assessment year 2010-11.

2 ITA No.205 /PUN/2016 A.Y. 2010 -11

firm is engaged in the business of promoters & builders. The assessee

developed a housing project ‘Accolade A and B, Colonnade C, Everglade D

and Promenade E’ at Hadapsar Bypass Road, Kharadi, Pune on land

admeasuring 49,900 sq.mtrs. The first plan comprising of building A having

five wings with 100 tenements was approved on 22.07.2005. Thereafter, plan

was revised increasing tenements from 100 to 200 and the same was

approved on 27.06.2006. Thereafter, assessee sub-divided the plot into A, B,

C, D and E and got plan approved for buildings B, C and D on 30.03.2007.

During assessment year under appeal, the assessee claimed deduction of

Rs.14,49,08,514/- in respect of sale of flats in building A and B in part. The

Assessing Officer rejected assessee’s claim of deduction u/s. 80IB(10) of the

Income Tax Act, 1961 (hereinafter refer to as ‘the Act’) on the ground that the

housing project is not complete before the due date. The initial approval was

granted to the assessee on 22.07.2005. Therefore, project should have been granted to the assessee on 22.07.2005. Therefore, project should have been

completed on or before 31.03.2011. The building C and building D are not

completed within the aforesaid period, therefore, the assessee is not eligible

for claiming deduction u/s. 80IB (10) of the Act.

filed appeal before the Commissioner of Income Tax (Appeals). The

Commissioner of Income Tax (Appeals) following the ratio laid down by the

Hon'ble Bombay High Court in the case of CIT Vs. Vandana Properties

reported as 353 ITR 36 held that the assessee is eligible for claiming

deduction u/s. 80IB (10) of the Act and reversed the findings of Assessing

Officer. Now, the Revenue is in appeal before Tribunal. Assailing the findings

of Commissioner of Income Tax (Appeals), the Department has raised

following grounds in appeal :

3 ITA No.205 /PUN/2016 A.Y. 2010 -11

“1. On the facts and the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing the assessee’s contention that the approvals taken on dates later than 22.07.2005 were on extension of the original approval and not separate sanctions. 2. On the facts and the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing the assessee’s claim u/s. 80IB(10) despite the fact that the project was not completed before the limitation date. 3. The order of the Ld.CIT(A) may be vacated and the Assessing Officer be restored. 4. The appellant craves leave to add, alter, amend and modify any of the above grounds of appeal.”

the findings of Assessing Officer submitted that it is well settled law that only

first approval from the competent authority, is to be considered for

determining the period of completion. In the present case, undisputedly, first

approval was granted to the assessee by PMC on 22.07.2005. Therefore, to

be eligible to claim deduction u/s. 80IB (10), the assessee was required to

complete the housing project on or before 31.03.2011. The Commissioner of

Income Tax (Appeals) has erred in granting benefit of deduction u/s.

80IB(10) of the Act on the basis of subsequent approvals obtained by

assessee. The Commissioner of Income Tax (Appeals) has erred in not

appreciating the fact that subsequent approval would not grant extension of

time for claiming deduction u/s. 80IB (10) of the Act.

the order of Commissioner of Income Tax (Appeals) submitted that first

approval in respect of building A was granted to the assessee on 22.07.2005.

At the time of first approval, building B, C, D and E were not part of the

approved plan. Approvals for building B, C, D and E were obtained by the

assessee for the first time on 30.03.2007. As far as building A is concerned,

4 ITA No.205 /PUN/2016 A.Y. 2010 -11

due date of completion was 31.03.2011. The completion certificate in respect

of building A was received in two parts. First completion certificate was

received by assessee on 24.11.2008 and second completion certificate was

received on 31.05.2010. Therefore, building A was completed in every respect

well before the due date of completion as per provision of the Act. In respect

of building B, the completion certificate was again received in two parts. First

completion certificate was received on 31.05.2010 and second completion

certificate was received on 19.03.2011. The completion certificate in respect

of building C was received on 29.11.2011 and 19.03.2012. The completion

certificate in respect of building D was received by assessee on 05.03.2012.

Since approval in respect of building B, C and D was received for the first

time on 30.03.2007, the due date of completion of the said building was

31.03.2012. The documents on record clearly indicate that all the aforesaid

building were completed well before the due date of completion. Therefore,

Commissioner of Income Tax (Appeals) rightly granted benefit of deduction Commissioner of Income Tax (Appeals) rightly granted benefit of deduction

u/s. 80IB(10) of the Act to the assessee. The ld. AR submitted that Hon'ble

Jurisdictional High court in the case of CIT Vs. Vandana Properties (supra)

has held that benefit of deduction u/s. 80IB(10) is allowable on housing

project on plot having of area 1 acre, irrespective of the fact that other

housing project exists on the said land. In the present case, plan for building

A was first approved on land having area of more than ten Acres. The other

buildings viz. B, C and D are subsequent additions forming different housing

projects.

and have perused the orders of authorities below. It is an undisputed fact

that the first plan approved on 22.07.2005 was with respect to Building A.

The other buildings i.e. B, C and D were approved for the first time on

5 ITA No.205 /PUN/2016 A.Y. 2010 -11

30.03.2007. As per the provision of section 80IB(10)(a)(iii) where a housing project has been approved by the local authority on or after the 1st day of

April, 2005, the construction of the said housing project should be

completed within five years from the end of the financial year in which

housing project is approved by the local authority. Thus, the due date of

completion for building A was 31.03.2011. Since, the remaining buildings i.e.

B, C and D were approved for the first time on 30.03.2007, the due date of

completion for aforesaid buildings to be considered eligible for claiming

deduction u/s.80IB(10) of the Act was 31.03.2012. The completion

certificates in respect of all the buildings were received by assessee as under:

Building Date of receiving completion certificate A 24.11.2008 31.05.2010 B 31.05.2010 19.03.2011 19.03.2011 C 29.12.2011 19.03.2012 B 05.03.2012

A perusal of the above details reveal that building A, B, C and D were

complete well before the due date, as has been mandated under the

provision of section 80IB(10) of the Act. In the assessment year under

appeal, the assessee has claimed deduction in respect of sale of flats in

building A and B. Since, completion certificate in respect of both the

buildings were received before the due date, we find no infirmity in the order

of Commissioner of Income Tax (Appeals) in granting deduction u/s.80IB(10)

to the assessee in respect of said housing project. A perusal of documents

on record suggest that building A, B, C and D are separate housing project

on the same plot of land and size of the plot is much more than minimum

prescribed area of 1 acre. In view of the decision rendered by the Hon'ble

6 ITA No.205 /PUN/2016 A.Y. 2010 -11

Bombay High court in the case of CIT Vs. Vandana Properties (supra), the assessee is eligible for claiming deduction u/s. 80IB(10) in respect of multiple housing projects on same plot of land.

Order pronounced on Friday, the 19th day of January, 2018.

Sd/- Sd/- (डी. क�णाकरा राव/D. KARUNAKARA RAO) (�वकास अव�थी/Vikas Awasthy) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER पुणे/ Pune; �दनांक/ Dated : 19th January, 2018. पुणे/ Pune; �दनांक/ Dated : 19 January, 2018. SB आदेश क� ��त�ल�प अ�े�षत/ Copy of the Order forwarded to : अपीलाथ�/ The Appellant. 1. ��यथ�/ The Respondent. 2. 3. The CIT (Appeals)-3, Pune. 4. The CIT-3, Pune. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” ब�च, पुणे/ DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल/ Guard File. 6.

// True Copy // आदेशानुसार/ BY ORDER,

�नजी स�चव / Private Secretary आयकरअपील�यअ�धकरण, पुणे/ ITAT, Pune.