ITO., WARD-3(2), THANE vs. SADHANA BUILDERS PVT.LTD.,, THANE

(अपीलाथ� /Appellant) (��यथ� / Respondent) िनधा�रती िनधा�रती ओर ओर सेसेसेसे/Assessee by : Shri L.P. Singh -AR िनधा�रती िनधा�रती ओर ओर राज�व क� ओर से/ Revenue by : Shri Sachidanand Dubey-DR सुनवाई सुनवाई क� क� तारीख तारीख / Date of Hearing : 19.11.2015 सुनवाई सुनवाई क� क� तारीख तारीख घोषणा क� तारीख / Date of Pronouncement : 01.01.2016 आयकर आयकर अिधिनयम अिधिनयम,1961 आदेश 1961 1961 क� 1961 क� धारा धारा 254 254 254(1)केकेकेके अ�तग�त 254 अ�तग�त आदेश आयकर आयकर अिधिनयम अिधिनयम क� क� धारा धारा अ�तग�त अ�तग�त आदेश आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) अनुसार PER RAJENDRA, AM- लेखा सद�य सद�य राजे�� राजे�� केकेकेके अनुसार लेखा लेखा लेखा सद�य सद�य राजे�� राजे�� अनुसार अनुसार Challenging the orders dt.27.09.2012 of the CIT(A)-I,Thane the Assessing Officer(AO)has filed the present appeals. Assessee- company,engaged in the business as developers and builders,filed its return of income on 28.9.2009,declaring income of Rs.9.56 laks.The AO completed the assessment on 26.12.2011,u/s. 143(3) of the Act,determining the income of the assessee at Rs.6.29 crores. 2.First effective ground of appeal deals with deduction claimed by the assessee u/s.80IB of the Act. During the assessment proceedings,the AO found that the assessee had claimed deduction amounting to Rs.6.20 Crores u/s.80IB(10)in respect of its housing project namely Dhaval Hills,that the project was first approved by the municipal authorities on 09.07.2004,that the commencement project was issued on 26.10.2004,that the net size of the plot of land was 9276.26 sq.meters,that the revised construction plan was approved on 05.10.2007,that the plan was again amended on 31.03.2008,that last completion/occupancy certificate was issued on 01.12.2008. 3.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority(FAA).Before him,it was contended that the project was first approved for construction of built up area of 9206.30 sq.mtrs.,that the plan was amended twice subsequently, as per the last completion certificate, dated 1.12.2008, out of the total sanctioned built up area of 11,960.15 sq.mtrs the assessee had completed project to the extent of built up area of 11592.43 sq.mtrs,that the incomplete portion was not for sale and was to be handed over to the landlord,that due to litigation the same could not be completed, that in similar circumstances deduction u/s.80IB(10) was allowed in earlier years,that the assessee had completed four wings namely A to D,that the ITA/597/M/13-Sadhana Builders,AY.09 -10 deduction was claimed for the completed portion of the project. After considering the submission of the assessee,the FAA held that there was no dispute as far as the other conditions stipulated in section 80IB (10) were concerned, that the housing project comprised of buildings A,B,C,D, that buildings C,D,E,F were to be handed over to the land owners, that in the year 2006 building C and D were handed over by the assessee,that building E and F remained to be handed over,that the other two building i.e. A and B were the housing project of the assessee on which it had claimed deduction u/s. 80IB(10),that the Municipality had issued completion certificate for building A and B dated 13.6.2007 and 1.12.2008 respectively, that buildings A and B were complete before the due date of completion,that occupation certificate was granted by the local authority for these buildings,that the due date of completion of the building was 31.3.2009,that the AO had denied the benefit only because building E and F were not completed,that building E and F were not part of the housing project and that the assessee had not claimed deduction u/s.80IB(10) of the Act,that the housing project of the assessee could not be denied deduction on the ground that other buildings of the project were incomplete, that the buildings E and F could not be completed because of the pending litigation before the Hon’ble High Court of Bombay.He referred to the judgment of Saroj Sales Corp. (115 TTJ 485) and Vandana Properties Ltd. (I.T appeal 3336 and 4361 of 2010 dt.28.3.2012).Finally, he allowed the appeal filed by the assessee and directed the AO to allow deduction u/s. 80IB(10) to the assessee on the eligible profits. 4.During the course of hearing before us the Departmental Representative(DR),supported the order of the AO and contended that the project of the assessee was incomplete as on 31.3.2009, that an area of 367.72sq.mtrs. remained to be constructed by the assessee out of the approval/granted for construction of built up area of 11960.15 sq.mtrs, that the assessee had violated one of the conditions of section 80IB(10) of the Act.Authorised Representative(AR)supported the order of the FAA. 5.We have heard the rival submissions and perused the material before us.We find that the AO had denied the benefit of deduction u/s.80IB(10) of the Act as he was of the opinion that the assessee had not fulfilled the conditions stipulated by the provisions of the Act,the non- completion of E & F buildings was sufficient reason for denying the benefit.Basic undisputed facts are that the project was constructed on a plot that was more than one acre,that the assessee had claimed deduction for A & B buildings only u/s.80IB of the Act,that because of court proceedings it could not complete E & F buildings,that the completion certificate issued by the municipal authorities proved that the project was completed before due date i.e. 31. 03. 2009.Thus,all the condition stipulated by the section 80IB(10)of the Act were fulfilled by the assessee for claiming deduction. Here,we would like to rely upon the case of Vandana Properties(353 ITR36)which reads as under: “The object of section 80-IB(10) of the Income-tax Act, 1961, in granting deduction equal to one hundred per cent. of the profits of an undertaking arising from developing and constructing a housing project is with a view to boost the stock of houses for lower and middle income groups, subject to fulfilling of the specified conditions. The expression “housing project” is neither defined under section 2 of the Act nor under section 80-IB(10) of the Act. Even under the Mumbai Municipal Corporation Act, 1998, as also under the Development Control Regulations for Greater Mumbai, 1991, the expression “housing project” is not defined. Therefore, the expression “housing project” in section 80-IB(10) would have to be construed as commonly understood. The expression “housing project” in common parlance would mean constructing a 2