The Commissioner of Income-tax, Chennai v. Pace Builders (Madras) Pvt. Ltd
[Citation -2020-LL-0826-39]

Citation 2020-LL-0826-39
Appellant Name The Commissioner of Income-tax, Chennai
Respondent Name Pace Builders (Madras) Pvt. Ltd.
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 26/08/2020
Assessment Year 2012-13
Judgment View Judgment
Keyword Tags completion certificate • documentary evidence • competent authority • condition precedent • municipal limits • housing project • built-up area
Bot Summary: Whether the Tribunal was correct in holding that the Section 80IB deduction is to be allowed to the assessee only on two completed blocks during the present assessment years out of the total five blocks which the assessee has applied before the competent authority indicating the project as a whole 2. 231 of 2020 u/s.80IB especially when the assessee did not substantiate with documentary evidence in respect of size of the land, built up area etc which is a condition precedent for granting relief 2. The assessee in the Return of Income filed for the assessment year under consideration / AY 2012-13, among other things claimed deduction under Section 80 IB(10) of the Act. The Assessing Officer issued notice calling upon the assessee to explain as to why the deduction should not be disallowed on the ground that the assessee did not give the breakup details of the size of the land in which the apartment complex is developed. The reply given by the assessee did not find favour with the Assessing Officer and accordingly, the assessment was completed under Section 143(3) by order dated 27.03.2015, disallowing the claim for deduction. The condition to be fulfilled by the assessee to sustain his claim for deduction under Section 80IB(10) is to establish that the residential unit has a maximum built-up area of 1500 sq. The Assessing Officer has failed to note the effect of a Completion Certificate which certifies that the developer has completed the project in accordance with the approved Building Plan as approved by the CMDA. The assessee also specifically states that the built-up area is 'maximum built-up area' and not 'carpet area' or 'super built-up area' and this fact has been considered by the CIT(A) as well as by the Tribunal and the assessee has been granted relief.


T.C.A.No.231 of 2020 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.08.2020 CORAM HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and HONOURABLE MRS.JUSTICE PUSHPA SATHYANARAYANA T.C.A.No.231 of 2020 Commissioner of Income Tax, Chennai. .. Appellant Versus M/s.Pace Builders (Madras) Pvt Ltd., B-56, Anna Nagar East, Chennai 600 102 PAN AABCP0675N .. Respondent Prayer:- Tax Case Appeal filed under Section 260-A of Income Tax Act, 1961, against order of Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 16.03.2018 made in I.T.A.No.280/Mds/2017 relating to Asst Year 2012-13. For Appellant : Ms.R.Hemalatha Senior Standing Counsel For Respondent : Mr.Ashok Pathy for M/s.Pass Associates 1/7 http://www.judis.nic.in T.C.A.No.231 of 2020 JUDGMENT [Order of Court was made by T.S.SIVAGNANAM, J.] This appeal by assessee under Section 260 of Income Tax Act, 1961 ('the Act' for brevity) is directed against order dated 25.07.2018 passed by Income Tax Appellate Tribunal, Madras, 'A' Bench,('Tribunal' for brevity) in I.T.A.No.280/Mds/2017 for assessment year 2012-13. appeal has been filed, raising following substantial questions of law. 1. Whether Tribunal was correct in holding that Section 80IB (10) deduction is to be allowed to assessee only on two completed blocks during present assessment years out of total five blocks which assessee has applied before competent authority indicating project as whole? 2. Whether Tribunal was right in granting relief u/s.80IB (10) on two completed blocks out of 5 blocks for which project approval has been obtained especially when income tax act does not provide for any partial allowance for completion of project? 3. Whether relief is to be granted to assessee 2/7 http://www.judis.nic.in T.C.A.No.231 of 2020 u/s.80IB (10) especially when assessee did not substantiate with documentary evidence in respect of size of land, built up area etc which is condition precedent for granting relief? 2. We have elaborately heard Ms.R.Hemalatha, learned Senior Standing Counsel appearing for appellant / Revenue and Mr.Ashok Pathy, learned counsel for M/s.Pass Associates accepting notice on behalf of respondent. 3. assessee in Return of Income filed for assessment year under consideration / AY 2012-13, among other things claimed deduction under Section 80 IB(10) of Act. Assessing Officer issued notice calling upon assessee to explain as to why deduction should not be disallowed on ground that assessee did not give breakup details of size of land in which apartment complex is developed. assessee did not furnish details of survey number and filed few details without purchasers address and copy of some documents. On perusal of same, Assessing Officer was of view that built up area of flat sold to one Mr.Sivaramakrishnan Natarajan was about 1570 3/7 http://www.judis.nic.in T.C.A.No.231 of 2020 sq.ft and as it exceeds 1500 sq.ft as mentioned in Clause (c) of Proviso under Section 80 IB (10), Assessing Officer proposed to disallow claim for deduction. assessee by letter dated 26.03.2015 stated that they had developed housing project at Selaiyur, Tambaram for area more than one acre, after obtaining approval from CMDA on 29.03.2007. project was completed during financial year 2011-12 relevant to assessment year 2012-13 and upon completion, they obtained Completion Certificate from CMDA on 20.04.2011 and they were eligible for claiming deduction under Section 80 IB(10), as all conditions have been fulfilled. Further assessee stated that they have consistently followed completed contract method, since incorporation which has been accepted by Assessment Officers for earlier assessment years. reply given by assessee did not find favour with Assessing Officer and accordingly, assessment was completed under Section 143(3) by order dated 27.03.2015, disallowing claim for deduction. 4. assessee carried matter on appeal to Commissioner of Income Tax (Appeals)-III, Chennai ('CIT(A)' for brevity). By order dated 4/7 http://www.judis.nic.in T.C.A.No.231 of 2020 30.09.2016, Appeal was partly allowed. CIT(A) reversed decision of Assessing Officer in disallowing deduction under Section 80IB(10). As against that portion of order of CIT(A), Revenue preferred appeal before Tribunal which was dismissed and challenging same, Revenue is on appeal before us. 5. assessee has given factual explanation which was taken note of by CIT(A). condition to be fulfilled by assessee to sustain his claim for deduction under Section 80IB(10) is to establish that residential unit has maximum built-up area of 1500 sq.ft as it is in place which is not more than 25 km from municipal limits of cities. Assessing Officer appears to have examined one document and stated that built-up area is more than 1500 sq.ft. word used in Clause c in proviso to Section 80IB(10) is ''Maximum Built-up area'' and not 'Carpet area' or 'super built-up area'. 6. undisputed fact is that land on which project was developed, measured extent of 3.46 acres in which assessee has 5/7 http://www.judis.nic.in T.C.A.No.231 of 2020 constructed two blocks and made claim for deduction. It is admitted case that development has taken place in extent of 1.65 acres. Assessing Officer has failed to note effect of Completion Certificate which certifies that developer has completed project in accordance with approved Building Plan as approved by CMDA. assessee also specifically states that built-up area is 'maximum built-up area' and not 'carpet area' or 'super built-up area' and this fact has been considered by CIT(A) as well as by Tribunal and assessee has been granted relief. In our considered view, there is no questions of law, much less Substantial Questions of Law arises for consideration in this appeal. Tax Case Appeal fails and same is dismissed. No costs. (T.S.S.,J) (P.S.N.,J) 26.08.2020 sk Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order To Commissioner of Income Tax, Chennai. 6/7 http://www.judis.nic.in T.C.A.No.231 of 2020 T.S.SIVAGNANAM, J. AND PUSHPA SATHYANARAYANA, J. sk T.C.A.No.231 of 2020 26.08.2020 7/7 http://www.judis.nic.in Commissioner of Income-tax, Chennai v. Pace Builders (Madras) Pvt. Ltd
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