The Pr. Commssioner Of Income ... vs M/S Prathamesh Constructions
2021 Latest Caselaw 14207 Bom

                                                                      904.ITXA.1313.17.doc



           IN THE HIGH COURT OF JUDICATURE AT BOMBAY
               ORDINARY ORIGINAL CIVIL JURISDICTION

                INCOME TAX APPEAL NO. 1313 OF 2017

The Pr. Commissioner of Income Tax-2                       .... Appellant
      V/s.
M/s Prathamesh Constructions                               .... Respondent
                                ----

Mr. Vineet Sawant a/w Ms. Lizna Namawati i/b Mr. Charanjeet Chanderpal for appellant.

Mr. Aniket Malu i/b Mr. Akshay Petkar for respondent.

----

                                   CORAM :        K.R.SHRIRAM &
                                                  R.I. CHAGLA JJ.
                                   DATED :        1st OCTOBER, 2021

P.C. :



1             Respondent      carried      on   business    as   builders    and

developers and developed a project named "Amrut Kalash" consisting

of 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 were

planned at plot 'G'. For assessment year 2008-2009 Respondent

claimed deduction of Rs.3,89,07,405/-under Section 80IB (10). The

project was first approved on 31.03.2001 and as per the provisions of

Section 80IB (10) the same should have been completed on or before

31.03.2008. The assessee - Respondent, as recorded in the order of

CIT(A), submitted a completion certificate dated 28.03.2008. Even on

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28.03.2008, the building 'G' was marked to be parking only is

undisputed. Therefore, upto 31.03.2008, respondent had not

contemplated any residential units in the building 'G'. Subsequently,

on 19.04.2011 respondent got the plan approved after purchase of

TDR whereby the plan for said building 'G', which contemplated

parking only, was revised and the same was approved as a building

with ground plus 6 floors comprising of 48 residential units.

According to appellant as the completion certificate issued on

29.03.2008 did not show building 'G' with ground plus 6 floors, the

certificate issued by the Pune Municipal Corporation was a part

completion certificate and hence, respondent was not entitled to the

deductions under Section 80IB (10). The Assessing Officer rejected

the deduction claimed and passed the assessment order dated

28.03.2013. Aggrieved by this order, respondent preferred an appeal

before Commissioner of Income Tax (Appeals). The CIT (A) allowed

respondent's appeal relying on his own decision in the case of

respondent for asessment year 2009-2010 as identical issues were

involved and held that respondent qualifies for deduction under

Section 80IB (10). Aggrieved by this order, appellant preferred an

appeal before the Income Tax Appellate Tribunal (ITAT). ITAT

dismissed the appeal of the appellant and confirmed the conclusions

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arrived at by CIT (A). Shri Sawant, the learned counsel for appellant

submitted that the tribunal erred in allowing the deduction under

Section 80IB (10) of the Act without appreciating that since the

housing project was approved on 31.03.2001, it was liable to be

completed by 30.03.2008 and the assessee had not completed the

entire project by 30.03.2008. Shri Sawant further submitted that the

stipulated completion certificate issued by the Pune Municipal

Corporation 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 buildings 'A', 'B', 'C', 'D', 'E', 'H' and 'I' and 'G' as parking

slab, Shri Sawant submitted that the plan which got sanctioned in

2001, ought to be seen as a whole and it had contemplated building

'G' to be parking. Shri Sawant submitted that respondent had taken

part completion certificate only before 31.03.2008 and the completion

certificate of building 'G' was obtained from respondent in which it

clearly mentioned that building 'G' was completed on 12.05.2011

along with the parking. Shri Sawant submitted that as per the

provisions under Section 80IB (10), the amount of deduction in the

case of an undertaking developing and building housing projects

approved before 31.03.2008 by a local authority shall be 100% of the

profits derived in the previous year from such housing project if, the

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housing project has been approved by the local authority before

01.04.2004 and the assessee completes such construction of housing

project on or before 31.03.2008. Shri Sawant submitted that the date

of completion of the housing project shall be taken to be the date on

which the completion certificate in respect of housing project is issued

by the local authority and as respondent had only a part completion

certificate on 20.03.2008 and the completion certificate for building

'G' was only issued much later, respondent was not entitled to claim

deduction under Section 80IB (10).

2 Shri Malu for respondent opposed the appeal and

submitted that the plan for constructing building 'G' was itself

conceived much later after 31.03.2008. Shri Malu submitted that

when 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 the

purchase of TDR on 19.04.2011, a fresh plan for building 'G' was

prepared as a building with ground plus 6 floors comprising of 48

residential units. Relying upon the judgment of this Court in the

matter of CIT vs. Vandana Properties1, Shri Malu submitted that

building 'G' constituted a separate project and cannot be considered as

an extension of the original project.

1 2012 SCC OnLine Bom 474
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3           We have heard learned counsel and in our view the

appeal requires to be rejected.


4           The substantial questions of law proposed are as under :


            (i)    "Whether on the facts and circumstances of the

case and in law, the Hon'ble Income Tax Appellate Tribunal was justified in allowing the deduction u/s 80IB(10) of the Act, without appreciating that since the housing project was approved on 31.03.2001, it was liable to be completed by 31.03.2008, whereas, the assessee had not completed the entire project by the stipulated date, i.e. 31.03.2008 and the stipulated completion certificate issued by the Pune Municipal Corporation 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 Buildings A, B, C, D, E, G, H and I ?

(ii) "Whether on the facts and circumstances of the case and in law, the Hon'ble Income Tax Appellate Tribunal was justified in allowing the deduction u/s 80IB(10) of the Act without appreciating the ratio of the decision of the Hon'ble Apex Court in Sarkar Builders which envisages deduction u/s 80IB(10) in respect of the entire project as a whole ?"

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5            In our view whether the assessee had not completed the

entire project by the stipulated date as observed by the Assessing

Officer or whether the assessee had completed the stipulated project

as held by CIT (A), are questions of fact.

6 In any event, we would agree with the view expressed by

CIT (A) and ITAT. This is because the original plan that was

sanctioned in 2001 had contemplated building 'G' to be only parking

slab and the revised plan dated 20.3.2008 also showed building 'G' to

be parking only. Therefore, upto 31.03.2008, respondent had not

even contemplated any residential units in the said building 'G'. It was

only subsequently that respondent got the plan approved after the

purchase of TDR on 19.04.2011 whereby the plan for said building 'G'

which contemplated only parking was revised and the same was

approved as a building with ground plus 6 floors comprising of 48

residential units. What is pertinent to also note is that respondent has

not claimed any deduction under Section 80IB (10) on the said

building 'G'. A question that was considered was whether the housing

project should be considered to be completed without the parking of

building 'G' as approved by the local authority. Undisputably the

entire project excluding building 'G' has been completed within the

stipulated period and the completion/ occupancy certificate was also Waghmare 6/7

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received within the time limit prescribed under Section 80IB (10). As

TDR for building 'G' was not available upto 2011, appellant could not

have constructed the said building. As held in Vandana Properties

(supra), the expression housing project is not defined under the Act

and the expression housing project in common parlance should be

accepted, which would mean constructing a building or group of

buildings consisting of several residential units.

7 In our view, the building 'G' cannot be part and parcel of

the housing project because the TDR for constructing building 'G' itself

was purchased on 19.04.2011. Consequently, in our view, respondent

was entitled to claim of deduction under Section 80IB (10) of the Act.

8 In our view, ITAT has not committed any perversity or

applied incorrect principles to the given facts and when the facts and

circumstances are properly analyzed and correct test is applied to

decide the issue at hand, then, we do not think that question as

pressed raises any substantial question of law.

9 The appeal is devoid of merits and it is dismissed with no

order as to costs.

Digitally signed by WAISHALI WAISHALI SUSHIL SUSHIL WAGHMARE

(R.I. CHAGLA, J.) (K.R. SHRIRAM, J.) WAGHMARE Date:

2021.10.08 03:05:06 +0530

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