A two-judge bench of the Bombay High Court, in The Commissioner of Income Tax, Valsad v. M/s. C. N. Builders & Developers held that the deduction under section 80-IB is available to the assessee-Builder, even if the construction is not according to the plan approved by the authorities.
The respondent-builder is a partnership firm engaged in the business of construction and development of buildings. They undertook a construction of a project called Gurudev Complex and claimed for the benefit of section 80IB. However, AO held that the assessee was not eligible for the said deduction since the construction is not according to the plan. The reasons pointed by AO was that the final completion certification was not yet received and also added that since the land was not in the name of the assessee and the approval was also not in the assessee’s name.
Aggrieved by the order of AO, Assessee approached CIT (A) the said commissioner allowed this deduction later Revenue preferred the same before Tribunal, but the Tribunal dismissed the appeal by restoring the first appellate decision.
Further aggrieved, Revenue carried the matter before Bombay High Court and their advocate Tejveer Singh contended that if construction is as per the Development Control Rules (DCR), but not as per the approved plan, then it is not a violation of section 80IB (10) and the assessee entitled for a deduction.
The Revenue’s advocate further contended that construction may not be according to the approved plan but it does not contravene DCR so the benefit cannot be denied.
Both the contention of revenue got dismissed by the Court by relying on the decision in M/s. Lipid Technologies.
While dismissing the appeal of revenue, Justice S. C. Dharmadhikari and Justice Prakash D.Naik observed that “as far as the question proposed by the revenue in all these appeals are concerned on perusal of the orders under challenge, we are of the firm view that all of them have by now been dealt with and repeatedly by this court. The judgments in the cases prior to our judgments take care of all the issues. Before us, in those matters, an attempt was made by Revenue to distinguish those judgments, but we have not accepted these arguments”.
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