ITC on construction of property meant for leasing

In case of ESNP Property Builder and Developers Pvt Ltd Vs State Tax Officer Hon’ble Madra High Court set aside assessment orders regarding the denial of Input Tax Credit (ITC) on construction undertaken for commercial leasing. The Assessing Authority rejected the claim, holding that construction of property on own account is blocked irrespective of later commercial use. The Court held this is contrary to the Supreme Court ruling in Safari Retreats, which held that construction is not on a person’s own account where the property is intended to be sold, leased or licensed.