Aakash Nidhi Builders & Developers Vs ITO (ITAT Mumbai)
Conclusion: Deduction under section 80-IB(10) was allowable for profits derived from Wings A to F of a housing project completed within the prescribed time limit and held that the additional Wing-G, which was completed later, constituted a separate project and was not eligible for deduction under the same section.
Held: Assessee was a partnership firm engaged in real estate development, had undertaken a housing project named Aakash Nidhi. It claimed deduction under section 80-IB(10) amounting to Rs. 2,51,07,390 on the entire profit of the project comprising Wings A to G. Wings A to F were completed and received their respective occupancy certificates before 31.03.2008, but the completion certificate for Wing-G had not been obtained as of that date. AO during reassessment proceedings under section 147, denied the entire deduction, holding that the project was not completed in its entirety as per the requirement of section 80-IB(10)(a)(ii) and thus, assessee was ineligible for the deduction. Aggrieved by the order of AO, assessee filed an appeal before CIT(A). CIT(A) upheld the disallowance of deduction claimed by assessee. Aggrieved by the order of the CIT(A), assessee filed an appeal before ITAT. Assessee placed reliance on the order of CIT(A) for A.Y. 2007–08, wherein deduction under section 80-IB(10) was allowed for Wings A to F and denied for Wing-G treating it as an independent project. Assessee submitted that the coordinate bench of the Tribunal in assessee’s own case had upheld that order, and the Hon’ble Bombay High Court affirmed the Tribunal’s decision in CIT v. Aakash Nidhi Builders and Developers which was also confirmed by the Hon’ble Supreme Court by dismissal of the Revenue’s SLP. It was held that claim of deduction could be allowed for the wings of A to F under section 80 IB(10). Tribunal held that assessee was entitled to claim deduction under section 80-IB(10) for Wings A to F which were duly completed before the cutoff date. Tribunal directed AO to compute deduction claimed by the assessee. Further, insofar as the claim of the assessee in respect of Wing-G of the housing project “Aakash Nidhi”, it was deemed appropriate to restore the issue to the file of the jurisdictional AO for de novo adjudication in light of the decision of the Hon’ble Jurisdictional High Court in Vandana Properties.
