The Ahmedabad bench of the Income Tax Appellate Tribunal held that Assessee cannot be denied claim of exemption under Section 80IB(10) for he obtained each block and usage permission from local authority within 5 years.
The assessee developed 11 Blocks of residential housing projects under the scheme of Takshashila Colonial starting with Block Nos. C to Q. The assessee obtained separate planning permission for construction of residential buiing from the local authority namely Ahmedabad Municipal Corporation (AMC) and the date of commencement of the project and also completion of construction Buiing Usage permission obtained from AMC for the 8 Blocks (except) 3 Blocks.
The Assessing Officer he that as per Section 80IB(10), the housing project shou have been completed within five years from the end of the financial year in which the housing project is approved by the Local Authority. The assessee obtained housing project for Blok Nos. C to Q from the Local Authority on 01-03- 2007, therefore the entire housing projects shou have been completed on or before 31-03-2012. But no construction was started in Block Nos. E, F & G by the assessee. Therefore the A.O. issued a show cause notice, asking why the entire deduction claimed under Section 80IB(10) should not be disallowed.
The assessee replied that the Block Nos. E, F & G of the housing project was not started by the assessee, but however other 8 Blocks namely, C, D, L, M, N, O, P & Q were completed within five years period. Further for every Block, the assessee obtained separate planning permission from AMC. Thus the assessee claimed deduction under Section 80IB(10) only to the 8 blocks. However the above explanation of the assessee was rejected by the Assessing Officer and thereby denied the claim of deduction under Section 80IB(10) of the Income Tax Act of Rs. 31,64,266/- and added the same as the total income of the assessee.
Aggrieved against the same, the assessee filed an appeal before CIT(A). The CIT(A), after considering the submissions of the assessee he that the assessee has not fulfilled the conditions laid down in Section 80IB(10) of the Income Tax Act and thereby uphe the addition made by the Assessing Officer. Aggrieved, the assessee appealed before the tribunal.
After hearing both the parties, the tribunal noted that it is an admitted fact that separate buiing planning permission were obtained by assessee from Local Authority namely AMC for each Block as a separate housing project. Further Buiing Usage permission was also obtained by the assessee from the Local Authorities namely Ahmedabad Municipal Corporation well within the period of 2 to 5 years.
The two member bench consisting of Waseem Ahmed (Accountant member) and T.R Senthil Kumar (Judicial member) held that separate planning permission was obtained by the assessee for each Block separately and after construction, separate Buiing Usage permission from the Local Authority within 5 years period, therefore the assessee cannot be denied the claim of exemption under Section 80IB(10) of the Income Tax Act. Thus the order passed by the Lower Authorities on this issue is hereby set aside and the Assessing Officer is directed to allow the claim of deduction under Section 80IB(10) of the Income Tax Act amounting to Rs. 31,64,266/-. Thus the appeal was allowed.
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