Itxa.1313.17.Doc v. Vandana Properties1, Sh

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1313 OF 2017 Mr. Vineet Sawant a/w Ms. Lizna Namawati i/b Mr. CharanjeetChanderpal for appellant. Mr. Aniket Malu i/b Mr. Akshay Petkar for respondent. ----CORAM : K.R.SHRIRAM &R.I. CHAGLA JJ.DATED : 1[st] OCTOBER, 2021 P.C. : 1Respondent carried on business as builders anddevelopers and developed a project named “Amrut Kalash” consistingof 7 buildings ‘A’, ‘B’, ‘C’, ‘D’, ‘E’, ‘H’ and ‘I’ and parking slab of building‘G’ having total 174 flats and 4 shops. No residential flats wereplanned at plot ‘G’. For assessment year 2008-2009 Respondentclaimed deduction of Rs.3,89,07,405/-under Section 80IB (10). Theproject was first approved on 31.03.2001 and as per the provisions ofSection 80IB (10) the same should have been completed on or before31.03.2008. The assessee – Respondent, as recorded in the order ofCIT(A), submitted a completion certificate dated 28.03.2008. Even on 28.03.2008, the building ‘G’ was marked to be parking only isundisputed. Therefore, upto 31.03.2008, respondent had notcontemplated any residential units in the building ‘G’. Subsequently,on 19.04.2011 respondent got the plan approved after purchase ofTDR whereby the plan for said building ‘G’, which contemplatedparking only, was revised and the same was approved as a buildingwith ground plus 6 floors comprising of 48 residential units.According to appellant as the completion certificate issued on29.03.2008 did not show building ‘G’ with ground plus 6 floors, thecertificate issued by the Pune Municipal Corporation was a partcompletion certificate and hence, respondent was not entitled to thedeductions under Section 80IB (10). The Assessing Officer rejectedthe deduction claimed and passed the assessment order dated28.03.2013. Aggrieved by this order, respondent preferred an appealbefore Commissioner of Income Tax (Appeals). The CIT (A) allowedrespondent’s appeal relying on his own decision in the case ofrespondent for asessment year 2009-2010 as identical issues wereinvolved and held that respondent qualifies for deduction underSection 80IB (10). Aggrieved by this order, appellant preferred anappeal before the Income Tax Appellate Tribunal (ITAT). ITATdismissed the appeal of the appellant and confirmed the conclusions arrived at by CIT (A). Shri Sawant, the learned counsel for appellantsubmitted that the tribunal erred in allowing the deduction underSection 80IB (10) of the Act without appreciating that since thehousing project was approved on 31.03.2001, it was liable to becompleted by 30.03.2008 and the assessee had not completed theentire project by 30.03.2008. Shri Sawant further submitted that thestipulated completion certificate issued by the Pune MunicipalCorporation was also in respect of only buildings ‘A’, ‘B’, ‘C’, ‘D’, ‘E’, ‘H’and ‘I’ and not in respect of building ‘G’. Even though the sanctionedproject was for buildings ‘A’, ‘B’, ‘C’, ‘D’, ‘E’, ‘H’ and ‘I’ and ‘G’ as parkingslab, Shri Sawant submitted that the plan which got sanctioned in2001, ought to be seen as a whole and it had contemplated building‘G’ to be parking. Shri Sawant submitted that respondent had takenpart completion certificate only before 31.03.2008 and the completioncertificate of building ‘G’ was obtained from respondent in which itclearly mentioned that building ‘G’ was completed on 12.05.2011along with the parking. Shri Sawant submitted that as per theprovisions under Section 80IB (10), the amount of deduction in thecase of an undertaking developing and building housing projectsapproved before 31.03.2008 by a local authority shall be 100% of theprofits derived in the previous year from such housing project if, the housing project has been approved by the local authority before01.04.2004 and the assessee completes such construction of housingproject on or before 31.03.2008. Shri Sawant submitted that the dateof completion of the housing project shall be taken to be the date onwhich the completion certificate in respect of housing project is issuedby the local authority and as respondent had only a part completioncertificate on 20.03.2008 and the completion certificate for building‘G’ was only issued much later, respondent was not entitled to claimdeduction under Section 80IB (10). 2Shri Malu for respondent opposed the appeal andsubmitted that the plan for constructing building ‘G’ was itselfconceived much later after 31.03.2008. Shri Malu submitted thatwhen the original plan was sanctioned in 2001 only the 7 buildings ‘A’,‘B’, ‘C’, ‘D’, ‘E’, ‘H’ and ‘I’ were under reckoning and only after thepurchase of TDR on 19.04.2011, a fresh plan for building ‘G’ wasprepared as a building with ground plus 6 floors comprising of 48residential units. Relying upon the judgment of this Court in thematter of CIT vs. Vandana Properties1, Shri Malu submitted thatbuilding ‘G’ constituted a separate project and cannot be considered asan extension of the original project. 3We have heard learned counsel and in our view theappeal requires to be rejected. 4 The substantial questions of law proposed are as under : (i)“Whether on the facts and circumstances of thecase and in law, the Hon’ble Income Tax AppellateTribunal was justified in allowing the deduction u/s80IB(10) of the Act, without appreciating that sincethe housing project was approved on 31.03.2001, itwas liable to be completed by 31.03.2008, whereas,the assessee had not completed the entire project bythe stipulated date, i.e. 31.03.2008 and the stipulatedcompletion certificate issued by the Pune MunicipalCorporation was also in respect of only Buildings A, B,C, D, E, H and I and not in respect of Building ‘G’,even though the sanctioned project was for BuildingsA, B, C, D, E, G, H and I ? (ii) “Whether on the facts and circumstances of thecase and in law, the Hon’ble Income Tax AppellateTribunal was justified in allowing the deduction u/s80IB(10) of the Act without appreciating the ratio ofthe decision of the Hon’ble Apex Court in SarkarBuilders which envisages deduction u/s 80IB(10) inrespect of the entire project as a whole ?” 5In our view whether the assessee had not completed theentire project by the stipulated date as observed by the AssessingOfficer or whether the assessee had completed the stipulated projectas held by CIT (A), are questions of fact. 6In any event, we would agree with the view expressed byCIT (A) and ITAT. This is because the original plan that wassanctioned in 2001 had contemplated building ‘G’ to be only parkingslab and the revised plan dated 20.3.2008 also showed building ‘G’ tobe parking only. Therefore, upto 31.03.2008, respondent had noteven contemplated any residential units in the said building ‘G’. It wasonly subsequently that respondent got the plan approved after thepurchase of TDR on 19.04.2011 whereby the plan for said building ‘G’which contemplated only parking was revised and the same wasapproved as a building with ground plus 6 floors comprising of 48residential units. What is pertinent to also note is that respondent hasnot claimed any deduction under Section 80IB (10) on the saidbuilding ‘G’. A question that was considered was whether the housingproject should be considered to be completed without the parking ofbuilding ‘G’ as approved by the local authority. Undisputably theentire project excluding building ‘G’ has been completed within thestipulated period and the completion/ occupancy certificate was alsoWaghmare Digitallysigned byWAISHALIWAISHALISUSHILSUSHILWAGHMAREWAGHMAREDate:2021.10.0803:05:06+0530 Digitallysigned byWAISHALIWAISHALISUSHILSUSHILWAGHMAREWAGHMAREDate:2021.10.0803:05:06+0530 received within the time limit prescribed under Section 80IB (10). AsTDR for building ‘G’ was not available upto 2011, appellant could nothave constructed the said building. As held in Vandana Properties(supra), the expression housing project is not defined under the Actand the expression housing project in common parlance should beaccepted, which would mean constructing a building or group ofbuildings consisting of several residential units. 7In our view, the building ‘G’ cannot be part and parcel ofthe housing project because the TDR for constructing building ‘G’ itselfwas purchased on 19.04.2011. Consequently, in our view, respondentwas entitled to claim of deduction under Section 80IB (10) of the Act. 8In our view, ITAT has not committed any perversity orapplied incorrect principles to the given facts and when the facts andcircumstances are properly analyzed and correct test is applied todecide the issue at hand, then, we do not think that question aspressed raises any substantial question of law. 9The appeal is devoid of merits and it is dismissed with noorder as to costs. (R.I. CHAGLA, J.) (K.R. SHRIRAM, J.)