M/s. Tapadia Constructions Ltd., Aurangabad V. Assistant Commissioner of Income-tax,

ITA 1128/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7523 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-11-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 26-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Retrospective amendment
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . . . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 1128/PUN/2014 / ASSESSMENT YEAR : 2004-05 M/S. TAPADIA CONSTRUCTIONS LTD., IST FLOOR, TAPADIA TERRACES, ADALAT ROAD, AURANGABAD PAN : AABCT0347F . /APPELLANT V/S ACIT, CENTRAL CIRCLE, AURANGABAD . /RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK REVENUE BY : DR. VIVEK AGGARWAL / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF CIT(A), AURANGABAD, DATED 28-03-2014 FOR THE ASSESSMENT YEA R 2004-05. 2. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSES SEE IS A COMPANY ENGAGED IN THE BUSINESS OF DEVELOPING AND BUILDING HOUSING PROJECTS, HOTEL BUSINESS, INVESTMENTS AND ALSO DEALING IN SHARES AN D SECURITIES. A SEARCH ACTION U/S.132 OF THE ACT WAS CONDUCTED ON 19-01-20 10 AT THE BUSINESS AND RESIDENTIAL PREMISES OF ASSESSEE AND DIFFERENT MEMB ERS/ASSOCIATE CONCERN OF THE TAPADIA GROUP OF AURANGABAD. ASSESSEE FILED TH E RETURN OF INCOME ON 15- 02-2011 DECLARING TOTAL INCOME OF RS.27,02,729/- AN D AGRICULTURAL INCOME AT NIL. ASSESSEE CLAIMED DEDUCTION OF RS.7,00,330/- U /S.80IB(10) OF THE ACT / DATE OF HEARING : 04.09.2017 / DATE OF PRONOUNCEMENT: 08.09.2017 2 ITA NO.1128/PUN/2014 M/S. TAPADIA CONSTRUCTIONS LTD.. INSPITE OF THE INCOMPLETION OF THE PROJECT. IN RES PONSE TO THE QUESTIONNAIRE, THE ASSESSEE VIDE LETTER DATED 12-12-2011 SUBMITTED HIS WRITTEN SUBMISSIONS STATING THAT THE ASSESSEE CLAIMED DEDUCTION U/S.80I B(10) AGAINST THE PROFITS OF THE HOUSING PROJECT BEING DEVELOPED BY THE COMPANY AT TAPADIA ESTATE IN GUT NO.110, 111 AND 112 SITUATED AT TISGAON, NAGAR ROAD , AURANGABAD. IN RESPECT OF GUT NO.110, MR. GARJU SONAWANE RAISED T HE DISPUTE AND THERE WAS STAY ORDER ISSUED AGAINST THE ASSESSEE COMPANY. BY VIRTUE OF THE SAID STAY ORDER BY THE COURT, THE COMPANY STOPPED THE CONSTRU CTION WORK OF THE PROJECT. AO ASSESSED THE INCOME OF THE ASSESSEE AT RS.34,03, 060/- AND DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) OF THE ACT. CIT( A) CONFIRMED THE ADDITION MADE BY THE AO. AGGRIEVED WITH SUCH ORDER OF THE C IT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 3. REFERRING TO THE ISSUE RAISED IN GROUND NO.2(I) WHICH RELATES TO INAPPLICABILITY OF THE AMENDED PROVISIONS OF THE SE CTION 80IB(10) OF THE ACT BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 01-04-2005 TO T HE ASSESSEES HOUSING PROJECT, WHICH WAS APPROVED PRIOR TO THE SAID AMEND MENT, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSSSSEES PROJECT WAS APPR OVED IN THE YEAR 2001 AND THE SAME IS INCOMPLETE AS ON DATE. THE AMENDED SUB -SECTION (10) PROVIDES FOR DUE DATES FOR COMPLETION OF THE SAID PROJECT. AS PER CLAUSE (A)(I) OF SECTION 80IB(10), IF APPLICABLE, THE ASSESSEES PROJECT IS REQUIRED TO BE COMPLETED BY 31-03-2008. IT IS THE CASE OF THE ASSESSEE THAT TH ESE PROVISIONS DO NOT APPLY TO THE ASSESSEES PROJECT, WHICH WAS APPROVED IN 20 01. THE CONDITIONS RELATING TO COMPLETION OF THE SAID PROJECT WITHIN THE SPECIF IED TIME WAS NOT ON THE STATUTE AT THE RELEVANT POINT OF TIME. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT TILL THE YEAR 2005 THERE WAS NO CLAU SE DEALING WITH THE DUE DATES FOR COMPLETION. THEREFORE, THE DEDUCTION CLA IMED U/S.80IB(10) OF THE ACT IN RESPECT OF THE ASSESSEES PROJECT SINCE APPR OVED PRIOR TO 31-03-2005, CANNOT BE DENIED. ASSESSEE RELIED ON THE JUDGMENT O F HONBLE BOMBAY HIGH 3 ITA NO.1128/PUN/2014 M/S. TAPADIA CONSTRUCTIONS LTD.. COURT IN THE CASE OF CIT VS. GURINDER SING BAVA REP ORTED IN 386 ITR 486 AND THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CA SE OF CIT VS. JAIN HOUSING & CONSTRUCTION LTD. REPORTED IN (2013) 214 TAXMANN 178 (MADRAS) 4. ON THE OTHER HAND, LD. DEPARTMENTAL REVENUE FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE AO AND THE CIT(A) DUTIF ULLY. FURTHER, DR. VIVEK AGGARWAL, LD. DEPARTMENTAL REVENUE FOR THE REVENUE BROUGHT OUR ATTENTION TO THE RELEVANT PROVISIONS OF SECTION 80IB(10), PRE -AMENDMENTS AS WELL AS POST AMENDMENTS AND SUBMITTED THAT CLAUSE (A)(I) OF SECTION 80IB(10) PRECISELY MEANT FOR THE PROJECTS COMMENCED ON OR AF TER 01-10-1998 AND COMPLETED ON OR BEFORE 31-03-2008. REFERRING TO TH E SPECIFIC PROVISIONS OF SUB-CLAUSE (A)(I) OF SECTION 80IB(10) OF THE ACT, L D. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE EXPLAINED THE PROJEC TS APPROVED PRIOR TO 01-04-2004, WHICH COVERS THE ASSESSEES CASE, IS RE QUIRED TO BE COMPLETED ON OR BEFORE 31-03-2008. 5. FURTHER, REFERRING TO THE RECENT JUDGMENT (DATED 07-04-2017) OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ARIF INDUSTRIES REPORTED IN (2017) 80 TAXMANN.COM 374, THE LD. DEPARTMENTAL RE PRESENTATIVE FOR THE REVENUE SUBMITTED THAT THE HIGH COURT TRACED THE HI STORY OF THE PROVISIONS RELATING TO THE CONDITION RELATING TO THE DATE OF C OMPLETION OF THE PROJECT AND CONSIDERED THE MADHYA PRADESH HIGH COURT JUDGMENT B EFORE EXPLAINING THE SAID PROVISIONS OF CLAUSE (A)(I) OF SECTION 80IB(10 ) OF THE ACT AND HELD THAT THE PROJECTS LIKE THAT OF THE ASSESSEE ARE NOT ENTITLED FOR DEDUCTION U/S.80IB(10) OF THE ACT. FOR THIS PROPOSITION, HE BROUGHT OUR ATTE NTION TO CONTENTS OF PARA NOS. 58 TO 66 OF THE SAID JUDGMENT TO DEMONSTRATE T HAT THE SAID PROJECTS APPROVED PRIOR TO THE AMENDMENT ARE REQUIRED TO BE COMPLETED BEFORE 31-03- 2008. IN CASE OF FAILURE, THE ASSESSEE BECOME INEL IGIBLE FOR DEDUCTION. IN THIS MATTER, THE HONBLE ALLAHABAD HIGH COURT APPROVED THE JUDGMENT OF HONBLE 4 ITA NO.1128/PUN/2014 M/S. TAPADIA CONSTRUCTIONS LTD.. MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. GL OBAL REALITY (2015) 62 TAXMANN.COM 204 (MP). FURTHER, THE LD. DEPARTMENTA L REPRESENTATIVE FOR THE REVENUE BROUGHT OUR ATTENTION TO THE DECISION OF TH E COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF PADMAVATI DEVELOPERS VS. DC IT AND VICE VERSA IN ITA NOS. 1691 TO 1694/PN/2012 AND ITA NO.2463/PN/2012 O RDER DATED 29-05- 2015 AND READ OUT THE CONTENTS FROM PARA NO.28 ONWA RDS OF THE SAID ORDER FOR AN IDENTICAL PROPOSITION, I.E. PROJECTS APPROVED PR IOR TO THE AMENDMENT ARE REQUIRED TO BE COMPLETED ON OR BEFORE 31-03-2008 FA ILING WHICH THE DEDUCTION IS NOT AVAILABLE. 6. WE HEARD BOTH THE SIDES ON THIS LIMITED ISSUE RE LATING TO EXPLAINING THE PROVISIONS OF SECTION 80IB(10)(A)(I) OF THE ACT AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. TO START WITH, WE PROCEED TO EXAMINE THE RELEVANT PROVISIONS FROM THE SAID SECTION AS IT STANDS TODAY , AND THE SAME READ AS UNDER : [(10)THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDE RTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH, [2008] BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PR OFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUS ING PROJECT IF, (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SU CH CONSTRUCTION, (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPR OVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 20 04, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; 7. THE AMENDED PROVISIONS OF CLAUSE (A) BEFORE THE AMENDMENT BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 01-04-2005 READS AS UNDER : (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAK ING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH, 2005 BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE P ROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUS ING PROJECT IF,-- (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEV ELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998; 5 ITA NO.1128/PUN/2014 M/S. TAPADIA CONSTRUCTIONS LTD.. 8. FROM THE ABOVE, WHEN COMPARISON IS MADE BETWEEN THE PRE-AMENDED AND POST-AMENDED PROVISIONS OF CLAUSE (A) OF SECTIO N 80IB(10) OF THE ACT, THE POST AMENDMENTS PROVIDE FOR SPECIFIC DUE DATE OF 31 -03-2008 IN RESPECT OF THE PROJECTS APPROVED BY THE LOCAL AUTHORITY BEFORE 01- 04-2004. ASSESSEES PROJECT IS APPROVED PRIOR TO 01-04-2004. THE LANGU AGE PROVIDED IN CLAUSE (A) EXPRESSIVELY PROVIDES FOR THE SPECIFIC DATE OF COMP LETION IN RESPECT OF THE PROJECTS CLEARED BY THE MUNICIPAL AUTHORITIES PRIOR TO THE SAID AMENDMENT. THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ARIF INDUSTRIES (SUPRA) IS RELEVANT. RELEVANT OPERATIVE PARAS FROM 58 TO 66 ARE EXTRACTED FOR REFERENCE AS UNDER : 58. NOW WE TAKE UP QUESTION (III) OF INCOME TAX AP PEAL NO. 9 OF 2014, QUESTIONS (III), (IV) AND (V) OF INCOME TAX APPEAL NO. 13 OF 2017, SINCE ALL THESE QUESTIONS RELATE TO SUB-SECTION 10(A)OF ACT, 1961, I.E., COMPLETION OF PROJECT. HISTORICAL BACKDROP SHOWS THAT PERIOD OF C OMPLETION WAS CONTEMPLATED IN SUB-SECTION 10(A) SINCE DATE OF INS ERTION OF SECTION 80-IB BUT FOR A SMALL PERIOD, BY FINANCE ACT, 2003 WHEN AMEND MENT WAS MADE WITH RETROSPECTIVE EFFECT FROM 01.04.2002, REQUIREMENT OF COMPLETION OF PROJECT WAS DISPENSED WITH AND REINTRODUCED W.E.F. 01.04.2005 BY FINANCE ACT, 2004. THUS, THIS REQUIREMENT WAS NOT EXISTING ONLY BETWEEN 01.04.2002 TO 31.03.2005. 59. ASSESSEE GOT APPROVAL OF HOUSING PROJECT FOR TH E FIRST TIME ON 08.01.2002. AT THAT TIME, IT WAS NOT WITHIN AMBIT OF BENEFITS U NDER SECTION 80-IB(10). HOWEVER, WITH THE AMENDMENT OF SECTION 80-IB(10) BY FINANCE ACT, 2003, NOT ONLY ASSESSEE GOT INCLUDED WITHIN BENEFICIAL AMBIT OF SECTION 80-IB(10) BUT EVEN CONDITION OF COMPLETION OF PROJECT DISAPPEARED . THIS CONDITION CAME TO BE REINTRODUCED W.E.F. 01.04.2005. 60. THUS, IT IS NOT A NEW CONDITION. IT CANNOT BE SAID THAT IT WAS INSERTED FOR THE FIRST TIME BY FINANCE ACT, 2004. IN FACT, T HIS CONDITION WAS THERE ALTOGETHER BUT FOR A SMALL PERIOD FROM 01.04.2002 T O 31.03.2005, IT REMAINED OUT OF STATUTE BOOK. OTHERWISE, IT WAS CONSISTENTLY THERE AND GOVERNED DEDUCTION UNDER SECTION 80-IB(10). IT IS NOT A CONDITION WHICH MADE THINGS IMPOSSIBLE BUT GIVES SUFFICIENT TIME TO ASSE SSEE TO COMPLETE PROJECT, I.E., UPTO 31.03.2008. 61. THIS ASPECT HAS BEEN CONSIDERED IN DETAIL BY MA DHYA PRADESH HIGH COURT (JABALPUR) IN INCOME TAX APPEAL NO. 40 OF 2012, THE COMMISSIONER OF INCOME TAX, BHOPAL VS. M/S GLOBAL REALITY AND OTHER CONNECTED APPEALS, DECIDED ON 21.08.2015. IT HAS BEEN HELD THAT NO DEV ELOPER CAN CLAIM VESTED RIGHT TO COMPLETE HOUSING PROJECT IN INDEFINITE PER IOD. RIGHT ARISING FROM SECTION 80-IB(10) IS COUPLED WITH THE OBLIGATI ON OR DUTY TO COMPLETE PROJECT IN SPECIFIED TIME FRAME. IF A DEVELOPER DOES NOT COMPLETE HOUSING PROJECT WITHIN SPECIFIED TIME, WILL NOT REC EIVE THAT BENEFIT. THERE IS NO COMPULSION ON HIM TO COMPLETE PROJECT I N A PARTICULAR PERIOD AS 6 ITA NO.1128/PUN/2014 M/S. TAPADIA CONSTRUCTIONS LTD.. THE SAID PERIOD IS CONTEMPLATED ONLY IF DEVELOPER CLAIMS DEDUCTION UNDER SECTION 80-IB(10) AND NOT OTHERWISE. PARAGRAPHS-23 AND 24 OF JUDGMENT, RELEVANT FOR OUR PURPOSE, READ AS UNDER:- '23. SUFFICE IT TO OBSERVE THAT, NO COMPARISON CAN BE DRAWN BETWEEN THE NEW CONDITION PRESCRIBED IN TERMS OF CLAUSE (D) AND THAT OF CLAUSE (A). CONDITION IN CLAUSE (A), NEITHER OPERATES RETR OSPECTIVELY NOR CAN BE SAID TO BE ABSURD, UNJUST OR EXPECTING THE ASSES SEE TO COMPLY WITH SOMETHING WHICH IS IMPOSSIBLE TO ACHIEVE. 24. THE NEXT QUESTION THAT NEEDS TO BE ANSWERED, IS , WHETHER THE STIPULATION IN SECTION 80IB(10)(A) CAN BE SAID TO B E DIRECTORY. CONSIDERING THE PRODIGIOUS BENEFIT OFFERED IN TERMS OF SECTION 80IB TO THE ASSESSEE (HUNDRED PER CENT OF THE PROFITS DERIV ED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR); AND THE PURP OSE UNDERLYING THE SAME - WHICH IS INTER ALIA BURDEN ON THE PUBLIC EXC HEQUER DUE TO WAIVER OF COMMENSURATE REVENUE - THE STIPULATION FO R OBTAINING COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY BEF ORE THE CUT OFF DATE, MUST BE CONSTRUED AS MANDATORY. THE FACT THAT COMPL IANCE OF THAT CONDITION IS DEPENDENT ON THE MANNER IN WHICH THE P ROPOSAL IS PROCESSED BY THE LOCAL AUTHORITY, THE PROVISION CAN NOT BE CONSTRUED AS A DIRECTORY REQUIREMENT. IT IS A SUBSTANTIVE PROVIS ION MANDATING ISSUANCE OR GRANT OF COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY BEFORE THE CUT OFF DATE OR SPECIFIED TIME, AS A PRE CONDITION TO GET THE BENEFIT OF TAX DEDUCTION. ELSE, IT WILL THEN BE OPE N TO THE ASSESSEE TO RELY ON OTHER CIRCUMSTANCES OR EVIDENCE TO PLEAD TH AT THE HOUSING PROJECT IS COMPLETE - REQUIRING ENQUIRY INTO THOSE MATTERS BY THE TAX AUTHORITIES - SANS A COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY IN THAT BEHALF. A PRIORI, THE ARGUMENT OF SUBSTANTI AL COMPLIANCE IS SUFFICIENT, WOULD LEAD TO UNCERTAINTY ABOUT THE DAT E OF COMPLETION OF THE PROJECT WHICH IS THE HALLMARK FOR AVAILING OF T HE BENEFIT OF TAX DEDUCTION. ONLY WITH THIS INTENT THE LEGISLATURE IN ITS WISDOM HAS PREDICATED THAT, 'THE COMPLETION OF CONSTRUCTION' O F THE HOUSING PROJECT IS TAKEN TO BE 'THE DATE ON WHICH' THE COMP LETION CERTIFICATE 'IS ISSUED' BY THE LOCAL AUTHORITY. TO INTERPRET IT TO INCLUDE AN EX POST FACTO CERTIFICATE OR SUCH CERTIFICATE ISSUED BY THE LOCAL AUTHORITY AFTER THE CUT OFF DATE, WOULD NOT ONLY RESULT IN REWRITIN G OF THE EXPRESS PROVISION AND RUN CONTRARY TO THE UNAMBIGUOUS POSIT ION PRONOUNCED IN THE SECTION, BUT ALSO DOING VIOLENCE TO THE LEGISLA TIVE INTENT. FOR, EXPLANATION (II) WILL THEN HAVE TO BE READ AS 'DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE AS CERTIFIED BY THE LOCAL AUTHORITY IN THAT BEHALF', I RRESPECTIVE OF THE DATE OF ISSUANCE OF SUCH CERTIFICATE BY THE LOCAL AUTHOR ITY. INDEED, IN A GIVEN CASE IF THE ASSESSEE IS ABLE TO SUBSTANTIATE THAT THE COMPLETION CERTIFICATE 'WAS IN FACT ISSUED' BY THE LOCAL AUTHO RITY BEFORE THE CUT OFF DATE, BUT COULD NOT BE PRODUCED BY HIM WITHIN TIME DUE TO REASONS BEYOND HIS CONTROL, THE ARGUMENT OF SUBSTANTIAL COM PLIANCE OF THE PROVISION CAN BE TESTED. ANY OTHER INTERPRETATION W OULD RESULT NOT ONLY IN UNCERTAINTY (IN FINALIZATION OF ASSESSMENT PROCE EDINGS DUE TO NON- ISSUANCE OR DELAYED ISSUANCE OF SUCH CERTIFICATE BY THE LOCAL AUTHORITY AND PRONE TO MANIPULATIONS AT THE END OF THE LOCAL AUTHORITY); BUT ALSO HAVE TO YIELD TO THE SUBJECTIVE SATISFACTION OF THE ASSESSING AUTHORITY AND OF INVESTING WIDE DISCRETION IN THAT AUTHORITY, WHICH, EVENTUALLY, MAY ONLY END UP IN GETTING EMBROILED IN LITIGATION. IF THE ASSESSEE HAS FAILED TO COMPLY WITH THE CONDITION OF OBTAINING CO MPLETION CERTIFICATE FROM THE LOCAL AUTHORITY BEFORE THE CUT OFF DATE, H E MUST TAKE THE CONSEQUENCE THEREFOR AND OF DENIAL OF THE BENEFIT O F TAX DEDUCTION OFFERED TO HIM ON THAT COUNT.' 7 ITA NO.1128/PUN/2014 M/S. TAPADIA CONSTRUCTIONS LTD.. 62. CIT(A) ON THIS ASPECT HAS RELIED ON MADRAS HIGH COURT'S JUDGMENT IN CIT VS. JAIN HOUSING AND CONSTRUCTION LTD., ITA NO. 755 OF 2010, DECIDED ON 02.11.2012 AND GUJARAT HIGH COURT'S JUDGMENT IN MAN AN CORPORATION VS. AICT (2013) 356 ITR 44 (GUJARAT). 63. THERE IS ANOTHER JUDGMENT OF DELHI HIGH COURT I N CIT VS. CHD DEVELOPERS LTD. (2014) 362 ITR 177 (DELHI) WHICH FOLLOWED MANA N CORPORATION VS. ACIT (SUPRA) BUT AFORESAID JUDGMENT HAS BEEN RENDERED AF TER FOLLOWING JUDGMENT IN CIT VS. VEENA DEVELOPERS (SUPRA) WHEREIN CLAUSE (D) OF SUB-SECTION 10 WAS CONSIDERED AND THEN IT WAS OBSERVED THAT SECTION 80 -IB(10) AS AMENDED W.E.F. 01.04.2005 IS PROSPECTIVE AND NOT RETROSPECT IVE. 64. THERE IS ANOTHER JUDGMENT OF GUJARAT HIGH COURT IN CIT VS. TARNETAR CORPORATION (2014) 362 ITR 174 (GUJARAT) BUT AS A M ATTER OF FACT, THEREIN CONSTRUCTION COMPLETED WELL BEFORE 31.03.2008 AND H ENCE THOSE JUDGMENTS DID NOT CONSIDER SECTION 80-IB(10)(A) IN THE LIGHT OF FACT THAT REQUIREMENT OF COMPLETION OF PROJECT WITHIN SPECIFIED TIME HAD CON TINUED SINCE INCEPTION AND WAS INAPPLICABLE FOR A SMALLER PERIOD OF THREE YEAR S. 65. LOOKING TO OBJECTIVE AND PURPOSE OF CONDITIONS OF COMPLETION OF PROJECT AND THE FACT THAT IT IS NOT A PROVISION WHICH CAME FOR THE FIRST TIME ALTOGETHER INTO EXISTENCE ON 01.04.2005, WE ARE INCLINED TO FO LLOW MADHYA PRADESH HIGH COURT'S JUDGMENT IN THE COMMISSIONER OF INCOME TAX, BHOPAL VS. M/S GLOBAL REALITY (SUPRA) AND HOLD THAT ASSESSEE IN QUESTION WAS SUPPOSED TO COMPLY SECTION 80-IB(10)(A) AS CAME TO EXIST ON AME NDMENT BY FINANCE ACT, 2004. CONSEQUENTLY, QUESTION (III) IN INCOME TAX AP PEAL NO. 9 OF 2014 AND QUESTIONS (III), (IV) AND (V) IN INCOME TAX APPEAL NO. 13 OF 2017 ARE ANSWERED IN FAVOUR OF REVENUE AND AGAINST ASSESSEE. 66. WE ARE CLARIFYING THAT AFORESAID QUESTIONS ARE ANSWERED IN FAVOUR OF REVENUE IN THE MANNER THAT REQUIREMENT OF COMPLETION OF PROJECT REINTRODUCED W.E.F. 01.04.2005 BY FINANCE A CT, 2004 WOULD BE APPLICABLE TO ASSESSEE BUT WHETHER PROJECT IN QU ESTION WAS COMPLETED BY ASSESSEE WITHIN SPECIFIED TIME, CANNOT BE EXAMINED AT THIS STAGE SINCE TRIBUNAL HAS NOT LOOKED INTO THIS ASPECT OF THE MATTER AND THIS IS A QUESTION OF FACT, HENCE, IN OU R VIEW, THIS ASPECT WOULD NOW HAVE TO BE EXAMINED BY TRIBUNAL. 9. FURTHER, WE PROCEED TO EXAMINE THE RELEVANCE OF THE RATIO OF THE ORDER OF THE TRIBUNAL IN THE CASE OF PADMAVATI DEVELOPERS (SUPRA). WE FIND THE CONTENTS OF PARA NO.28 READ AS UNDER : 28. AS REFERRED BY US IN PARAS HEREINABOVE UNDER T HE PROVISIONS OF SECTION 80- IB(10) OF THE ACT, THE CONDITIONS ARE LAID DOWN WHICH ENTITLES THE ASSESSEE TO THE CLAIM OF EQUIVALENT TO 100% OF THE PROFIT DE RIVED FROM THE DEVELOPMENT AND BUILDING OF HOUSING PROJECTS. ADMITTEDLY, THE A SSESSEE HAS FULFILLED THE CONDITIONS LAID DOWN IN CLAUSES (B), (C) AND (D) OF SECTION 80-IB(10) OF THE ACT AND BOTH THE AUTHORITIES BELOW HAVE ADMITTED THAT T HERE IS NO VIOLATION OF THE SAID CONDITIONS. THE ONLY CONDITION LEFT OUT IS THE CONDITION IN CLA USE (A) OF SECTION 80-IB(10) OF THE ACT. UNDER THE SAID CLAUSE, IT IS PROVIDED THAT WHERE SUCH UNDERTAKING HAS COMMENCED OR COMMEN CES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 THEN WHERE THE HOUSING PROJECT HAS BEEN APPROVED PRIOR T O 1ST DAY OF APRIL, 2004, THE CONSTRUCTION HAS TO BE COMP LETED ON OR BEFORE 31ST DAY OF MARCH, 2008. THE CONTENTION OF THE ASSE SSEE WITH REGARD TO THE APPLICATION OF THE SAID PROVISIONS OF THE AC T WAS THAT WHERE IT 8 ITA NO.1128/PUN/2014 M/S. TAPADIA CONSTRUCTIONS LTD.. HAD RECEIVED THE PERMISSION FOR CONSTRUCTION OF THE HOUSING PROJECT ON 15.12.2003, THEN SUCH CONDITION WAS NOT THERE IN THE ACT AND HENCE THE SAME IS NOT APPLICABLE IN THE PRESENT CAS E. IN OTHER WORDS, THE PLEA OF THE ASSESSEE IS THAT WHERE IT HAD RECEI VED THE PERMISSION ON 15.12.2003 THEN THE PRESENT PROVISIONS OF SECTION 8 0-IB(10) OF THE ACT, WHICH WERE INSERTED BY FINANCE (NO.2) ACT, 2004 W.E.F. 01 .04.2005 WERE NOT THERE ON THE STATUTE AND CONSEQUENTLY EVEN IN CASES WHERE THE ASSESSEE HAD NOT COMPLETED THE CONSTRUCTION OF THE HOUSING PROJECT O N OR BEFORE 31ST DAY OF MARCH, 2008, THE ASSESSEE IS ENTITLED TO CLAIM THE DEDUCTION IN RESPECT OF THE PERIOD WITHIN WHICH THE SAID HOUSING PROJECT HAS BE EN COMPLETED, IRRESPECTIVE OF THE DATE OF 31ST DAY OF MARCH, 2008. THE SAID PR OVISIONS OF THE ACT WHICH HAS BEEN SUBSTITUTED BY THE FINANCE (NO.2) ACT, 200 4 W.E.F. 01.04.2005 TALKS OF A HOUSING PROJECT WHICH HAD BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004 AND THEREAFTER PERIOD OF FOUR YEARS HAS FURTHER BEEN GRANTED TO COMPLY WITH THE DEVELOPMENT AND CONSTRUC TION OF THE HOUSING PROJECT I.E. ON OR BEFORE 31ST DAY OF MARCH, 2008. THE CASE OF THE ASSESSEE BEFORE US WAS THAT THE SAID PROVISIONS DO NOT HAVE RETROSPECTIVE OPERATION AND HAVE TO BE APPLIED PROSPECTIVELY. WE FIND NO MERIT IN THE SAID PLEA OF THE ASSESSEE THAT WHERE THE SECTIO N WAS INSERTED W.E.F. 01.04.2005 AND IT TALKS OF THE PROJECTS WHIC H HAVE BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE 1ST DAY OF A PRIL, 2004, THEN HOW COULD THE PROVISIONS WOULD APPLY ONLY PROSPECTI VELY. THE SAID PROVISIONS ARE APPLICABLE TO ALL THE PROJECTS WHICH WERE PENDING ON THE DATE WHEN THE SECTION WAS SUBSTITUTED, AS CLAUS E (A)(I) VERY CLEARLY TALKS OF ALL THE HOUSING PROJECTS WHICH HAV E BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE 1ST DAY OF APRIL, 2004 A ND HAVE TO BE COMPLETED ON OR BEFORE 31 ST DAY OF MARCH, 2008, FO R MAKING IT ELIGIBLE FOR THE CLAIM OF DEDUCTION UNDER SECTION 8 0-IB(10) OF THE ACT. THE BENEFICIAL PROVISIONS PROVIDED BY THE LEGISLATU RE HAVE TO BE INTERPRETED AND IT IS NOT THE INTENTION OF THE LEGI SLATURE THAT LIBERTY SHOULD BE GIVEN TO THE BUILDERS NOT TO COMPLETE THE PROJECTS WITHIN THE TIME FRAME WHICH, IN TURN, WOULD PUT THE PROSPECTIVE BUYERS AT DISADVANTAGE. THE CONDITIONS HAVE BEEN LAID DOWN IN THE SAID SECTION IN ORDER TO STREAMLINE THE DEVELOPMENT AND BUILDING OF THE HOUS ING PROJECTS WHICH, IN TURN, WOULD BE HANDED-OVER TO THE PROSPEC TIVE BUYERS WITHIN THE TIME FRAME. FURTHER PERIOD OF FOUR YEARS HAVE BEEN PROVIDED IN THE SUB-SECTION FOR COMPLIANCE TO THE C ONDITIONS LAID THEREIN. ACCORDINGLY, WE HOLD THAT IN THE PRESENT C ASE, WHERE THE ASSESSEE HAD RECEIVED PERMISSION FOR CONSTRUCTION V IDE ORDER DATED 15.12.2003 AND FOLLOWING THE PROVISIONS OF CLAUSE ( A)(I) TO SECTION 80-IB(10)OF THE ACT, THE SAID PROJECT HAD TO BE COM PLETED BEFORE 31ST DAY OF MARCH, 2008, IN ORDER FOR THE ASSESSEE TO AVAIL THE BENEFIT OF DEDUCTION UNDER THE SAID SECTION. . . . . . . (EMPHASIS SUPPLIED) 10. THUS, IT IS INESCAPABLE CONCLUSION FROM THE JUD GMENTS OF THE HONBLE HIGH COURTS AND THE ORDER OF THE TRIBUNAL (SUPRA) T HAT THE ASSESSEES PROJECT, SINCE APPROVED PRIOR TO THE AMENDMENT TO SUB-SECTIO N (10) OF SECTION 80IB OF THE ACT BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 01-0 4-2005 IS REQUIRED TO BE COMPLETED BY 31-03-2008. THEREFORE, WE ARE OF THE OPINION THAT THE ASSESSEE SHOULD HAVE COMPLETED HIS PROJECT ON OR BEFORE 31-0 3-2008 FOR BECOMING ELIGIBLE FOR CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. IT IS AN UNDISPUTED FACT 9 ITA NO.1128/PUN/2014 M/S. TAPADIA CONSTRUCTIONS LTD.. THAT THE PROJECT IN QUESTION HAS NEVER BEEN COMPLET ED EVEN TILL DATE FOR SOME REASON OR THE OTHER AND SUSTAINABLE REASON OR OTHER WISE. THE ASSESSEE IS HAVING OBLIGATION TO COMPLETE THE PROJECT BEFORE TH E DUE DATE FOR BECOMING ELIGIBLE TO CLAIM DEDUCTION U/S.80IB(10) OF THE ACT . ASSESSEE FAILED TO DISCHARGE THE SAME. IT APPEARS TO BE ASSESSEES CA SE THAT HE WANTS TO AVAIL THE BENEFIT OF SAID PROVISIONS AND DOES NOT WANT TO PAY TAXES ON THE INCOME OF THE PROJECT WHILE THE SAME IS INCOMPLETE. THEREFOR E, WE DISMISS THE SAID GROUND HOLDING THAT THE AMENDED PROVISIONS OF CLAUS E (A)(I) OF SECTION 80IB(10) OF THE ACT APPLY TO THE HOUSING PROJECTS A PPROVED PRIOR TO THE SAID AMENDMENT. 11. CONSIDERING THE ABOVE CONCLUSION DRAWN BY US, W E ARE OF THE VIEW THAT REST OF THE GROUNDS RAISED BY THE ASSESSEE BECOME C ONSEQUENTIAL AND HENCE THEY ARE DISMISSED AS ACADEMIC. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 8 TH SEPTEMBER, 2017. / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) , AURANG A BA D 4. CIT , AURANGABAD 5. , , B BENCH PUNE; 6. / GUARD FILE.