Itxa/655/2017 Of The Pr. Commissioner Of Income Tax-2, Thane v. M/S. Sadhana Builders Pvt. Ltd

Priya Soparkar IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.655 OF 2017 The Pr. Commissioner of Income Tax-2, Thane... AppellantV/s.M/s. Sadhana Builders Pvt. Ltd. … Respondent ---Mr.Tejveer Singh Mastan Singh for the Appellant.--- CORAM : AKIL KURESHI AND S.J.KATHAWALLA, JJ. DATE : JUNE 06, 2019. P.C.:- 1.This appeal is filed by the revenue against thejudgment of the Income Tax Appellate Tribunal (“Tribunal”for short). Following question is presented for ourconsideration:- “Whether on the facts and circumstances ofthe case and in law, the ITAT has erred inholding that the project was complete on orbefore31.03.2009whenoccupationcertificate was accorded only in respect of9206.30 Sq.Mtr. against sanction of11960.15 Sq. Mtr.?” 2.Respondent-assessee is a private limited company. Priya Soparkar Assessee had filed a return of income for the assessmentyear 2009-10 claiming deduction of income arising outof the development of a housing project in terms ofSection 80IB(10) of the Income Tax Act, 1961. TheAssessing Officer was of the opinion that the assesseehad not fulfilled the essential requirements of completionof housing project before 31[st ] March, 2009, which wasthe last date prescribed as per the statute. He thereforedisallowed the claim. CIT (Appeals) in detailedconsideration held that the assessee had complied allthe necessary conditions including completion of thehousing project before the due date. Following portionof the order of the CIT(Appeals) may be noted:- “The housing project of the appellant company‘Dhaval Hills’ comprised of buildings A,B,C,D,E& F. The buildings C,D,E & F were to be handedover to the land owners and the buildings C& D were handed over to the landlords in theyear 2006 and the buildings E & F remainedto be handed over. The other two buildings A& B were the housing project of the appellantcompany on which it has claimed deduction u/s. 80IB(10). From the details filed, it can beobserved that the completion certificate wasgranted by the Thane Municipal Corporation toall the completed buildings as per the detailsgiven below, for which there is no dispute :- Priya Soparkar 4.4. It can be seen from the above table thatthe buildings A & B in respect of which theappellant has claimed deduction u/s. 80IB(10),are complete in all respects and theoccupation certificate granted by the localauthority to these buildings before the duedate of completion, which in the instant casewas 31/03/2009. The AO found the appellantis not eligible for deduction only due to thereason that it had not completed two otherbuildings of the same project i.e. buildings E& F, which were to be handed over to thelandlord and were not the part of the housingproject on which the appellant is not evenclaiming the deduction u/s 80IB(10). TheAppellant constructed the above buildings A &B on 11,279.13 sq.mtrs. of piece of land whichis a part of large housing project comprising oftotal built up area of 11,960.15 sq. mtrs. Theportion of the appellant in this entire projectwas limited to two buildings only i.e. buildingsA & B and these buildings were complete inall respect including grant of the occupationcertificateduringtheperiodunderconsideration. 4.5. It is an admitted fact that the buildings onwhich the appellant has claimed deduction u/s80IB(10) are fully complete by the appellantcompany before the due date stipulated bythe provisions of section 80IB(10) and lastoccupation certificate granted by the localauthority in respect of these buildings on01/12/2008 as mentioned in the chart above.The objection of the AO is that since theappellant has not completed buildings E & F,meant to be handed over to the landlords andare part of the same project, so it does notconstitute the completion of the housingproject. 4.5. It is an admitted fact that the buildings onwhich the appellant has claimed deduction u/s80IB(10) are fully complete by the appellantcompany before the due date stipulated bythe provisions of section 80IB(10) and lastoccupation certificate granted by the localauthority in respect of these buildings on01/12/2008 as mentioned in the chart above.The objection of the AO is that since theappellant has not completed buildings E & F,meant to be handed over to the landlords andare part of the same project, so it does notconstitute the completion of the housingproject. 4.6In my opinion, the AO has not appreciatedthe facts of the case in right perspective. Thebuildings of the housing project belonging tothe appellant company i.e. buildings A & B arealready complete in all respects and thepossession handed over to the purchasersduring the period under consideration. Thesebuildings A & B are housing projects in itselfon standalone basis, fulfilling the requiredconditions as per section 80IB(10) and thelocal authority has granted these building theoccupation certificate on 13/06/2007 and on01/12/2008 which are all well before thestipulated date of completion i.e. 31/03/2009.” 3.The CIT (Appeals) having granted the relief to theassessee, the revenue carried the matter in appeal beforethe Tribunal. The Tribunal by the impugned judgmentdismissed the revenue’s appeal upon which the presentappeal have been filed. The record of the case would Priya Soparkar5907 itxa 655-17-oshow that CIT (Appeals) and Tribunal concurrently cameto the conclusion that the assessee had proposed thehousing project comparison of buildings A,B,C,D,E and F.Out of a total area of 11960.15 sq. meters to beconstructed as per the building construction permission,the assessee had completed construction of 11,592.43sq.meters. Necessary completion certificates from thelocal authority were also issued from time to time andlast such certificate was issued on 1[st] December,2008. Thus, the construction was completed and dulycertified by the local authority before 31[st] March, 2009. 4.The record further shows that the buildings E and Fwere not to be constructed and the land was to behanded over to the landlord on account of furtherdevelopments and dispute. This was the only remainingportion of the construction out of the originallysanctioned plan. The assessee had claimed deduction inrespect of the income arising out of sale of constructiononly for which completion certificates were issued. Thatbeing the position, we do not find any error in view of Priya Soparkar the Tribunal granting deduction under Section 80IB(10) ofthe Act. No question of law arises. Income Tax Appeal isdismissed. (S.J.KATHAWALLA, J.) (AKIL KURESHI, J.) ….