M/S Consortium Constructions, Pune V. Additional C.I.T., Pune

ITA 1149/PUN/2012

• Counselvise Citation: 114924514 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 01-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Revision of order; Additional evidence; Reasonable cause; Non compliance; Competent authority; Revised return; Revenue expenditure
• Section: 143(3); 80IB; 6; 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1149/PN/2012 (ASSESSMENT YEAR 2007-08) M/S. CONSORTIUM CONSTRUCTIONS, 301, EXPRESS TOWER, LAXMI ROAD, 594, SADASHIV PETH, PUNE-411030 .. APPELLANT PAN NO.AAEFC6288N VS. ADDL.CIT, RANGE-3, PUNE .. RESPONDENT APPELLANT BY : SHRI SUNIL PATHAK RESPONDENT BY : SHRI A.K. MODI DATE OF HEARING : 21-10-2013 DATE OF PRONOUNCEMENT : 29-10-2013 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT U/S.263 ON FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE HON. CIT-II, PUNE ERRED IN SETTING ASIDE THE AS ST. ORDER U/S 143(3) DT. 15.12.2009 PASSED BY THE AO AND DIRE CTING HIM TO UNDERTAKE ASSESSMENT AFRESH TO DECIDE ALLOWA BILITY OF DEDUCTION U/S 80IB(10) WITH REGARD TO THE ASSESS EE'S FLORIDA MINIS PROJECT BY MAKING ENQUIRIES ABOUT APP ROVAL, COMMENCEMENT AND COMPLETION OF THE PROJECT. 2. THE APPELLANT PLEADS THAT THE ASST. ORDER U/S 14 3(3) IS AS PER LAW, MADE AFTER DUE VERIFICATION OF FACTS AN D DOCUMENTS RELATING TO THE CLAIM FOR DEDUCTION U/S 80IB(10). 3. THE APPELLANT PLEADS THAT THE HON. CIT-II IN THE ORDER U/S 263 HAS NOT COME TO ANY INDEPENDENT CONCLUSION AS TO THE INCORRECTNESS OF THE ASSESSEE'S CLAIM FOR DEDUC TION U/S 80IB(10) W.R.T. THE FLORIDA MINIS PROJECT. 2 4. THE APPELLANT PLEADS THAT THE ASST. ORDER U/S 14 3(3) PASSED BY THE AO IS NOT ERRONEOUS AND THE CIT'S ORD ER U/S 263 IS NOT VALID. 5. THE APPELLANT PLEADS FOR DIRECTIONS ALLOWING ITS APPEAL AND CRAVES LEAVE TO ADD TO, ALTER, AMEND, MODIFY OR WITHDRAW ANY OR ALL GROUNDS OF APPEAL. 2. FOR A.Y. 2007-08 THE ASSESSEE FIRM FILED RETURN OF INCOME ON 07-11-2007 DECLARING THEREIN TOTAL INCOME OF RS.3,55,32,647/-. SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN OF INCOME ON 06-03-2009 SCALING DOWN THE TOT AL INCOME TO RS.67,48,439/-. THE REVISED RETURN WAS FILED MA INLY WITH A VIEW TO CLAIM DEDUCTION U/S.80IB(10). THE SAID CLA IM AMOUNTING TO RS.2,87,84,208/- WAS CLAIMED TO BE OMI TTED BEFORE HIM IN ORIGINAL RETURN EVEN THOUGH AUDIT REP ORT IN FORM NO.10CCB HAS BEEN FILED ALONG WITH ITR-V AND ALSO A SSESSEE HAS COMPUTED THE TAX PAYABLE ON THE RETURNED INCOME (AS PER THE ORIGINAL RETURN) AFTER REDUCING THE ABOVE DEDUC TION. THE CASE WAS TAKEN UP FOR SCRUTINY AND SCRUTINY ASSESSM ENT WAS MADE ON 15-12-2009 PASSED U/S.143(3) OF THE I.T. AC T WHEREIN THE ASSESSING OFFICER DETERMINED ASSESSEES TOTAL I NCOME AT RS.67,48,440/-. IN RESULT, THE TOTAL INCOME AS PER REVISED RETURN WAS ACCEPTED. 3. SUBSEQUENTLY, CIT ON REVIEW OF THE ASSESSMENT OR DER ALONG WITH RELEVANT RECORDS FOUND THAT ASSESSING OFFICER HAS ALLOWED ASSESSEES CLAIM OF DEDUCTION U/S.80IB(10) EVEN THO UGH ITS HOUSING PROJECT FLORIDA MINIS HAD NOT BEEN APPROV ED BY ANY LOCAL AUTHORITY. SIMILARLY, NEITHER COMMENCEMENT N OR 3 COMPLETION OF SAID PROJECT HAD BEEN APPROVED BY ANY LOCAL AUTHORITY. THE ASSESSEE HAS COMMENCED ITS PROJECT AS EARLY AS 10-11-2005 EVEN THOUGH IT GOT SOME APPROVAL VIDE AN ORDER PASSED BY ADDL. COMMISSIONER PERMITTING NON-AGRICUL TURE USE OF LAND ONLY ON 05-05-2006. FURTHER, THE COMPLETIO N OF PROJECT WAS CERTIFIED BY ARCHITECT FROM M/S. SPACE DESIGNER SYNDICATE. ACCORDING TO THE CIT, THE SAID ARCHITECT CANNOT BE EQUATED BY ANY LOCAL AUTHORITY. FURTHER, THERE WAS NOTHING ON RECORD TO SUGGEST THAT IT HAD NOT AUTHORISED BY ANY LOCAL AUT HORITY TO ISSUE COMPLETION CERTIFICATE. 4. CIT OBSERVED THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS EVEN THOUGH ASSESSING OFFICER APPEARS T O HAVE CALLED FOR SCRUTINY OF DETAILS RELATING TO ASSESSEE S FLORIDA MINIS PROJECT, THIS CRUCIAL CONDITION PERTAINING T O APPROVAL, COMMENCEMENT AND COMPLETION OF THE PROJECT WERE NOT EXAMINED BY HIM IN THE LIGHT OF STATUTORY PROVISION S. AFTER VERIFICATION AS ABOVE, THE ASSESSMENT ORDER DATED 1 5-12-2009 WAS CONSIDERED TO BE ERRONEOUS IN SO FAR AS IT IS P REJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY, A SHOW C AUSE NOTICE U/S.263 OF I.T. ACT 1961 WAS ISSUED TO THE ASSESSEE ON 14-03- 2012 CALLING UPON IT TO EXPLAIN AS TO WHY AN ORDER DATED 15-12- 2009 SHOULD NOT BE REVISED. THE RELEVANT PORTION OF THE SAID SHOW CAUSE NOTICE IS REPRODUCED AS UNDER : '4. IN SUPPORT OF YOUR CLAIM OF DEDUCTION U/S. 80- IB(10), YOU HAD SUBMITTED CERTIFICATES DT. 20.03.20 07 ISSUED BY 'SPACE DESIGNER'S SYNDICATE', AN ARCHITEC T FIRM, WHO HAD CERTIFIED THAT CONSTRUCTION OF THE SA ID 4 PROJECT HAD BEEN COMPLETED. THE SAID ARCHITECT FIRM HAD ALSO STATED THAT 'FLORIDA MINIS' PROJECT IS OUTSIDE THE PUNE MUNICIPAL CORPORATION LIMITS AND THERE IS NO COMPET ENT/ LOCAL AUTHORITY AUTHORIZED TO ISSUE COMPLETION CERT IFICATE. 'THIS FIRM IS APPROVED/ COMPETENT AUTHORITY TO ISSU E COMPLETION CERTIFICATE IN RESPECT OF BUILDINGS OF T HIS PROJECT.' 4.1 IT IS EVIDENT FROM THE ABOVE THAT YOU HAD CLAIM ED DEDUCTION U/S. 80-IB(10) EVEN THOUGH YOU HAD NOT OBTAINED COMPLETION CERTIFICATE FROM THE LOCAL AUTH ORITY. M/S. SPACE DESIGNER'S SYNDICATE HAD STATED THAT THE RE WAS NO COMPETENT LOCAL AUTHORITY AUTHORIZED TO ISSU E COMPLETION CERTIFICATE AND THAT THEY WERE THE APPRO VED/ COMPETENT AUTHORITY TO ISSUE COMPLETION CERTIFICATE IN RESPECT OF THE BUILDINGS OF YOUR PROJECT. HOWEVER, IT HAS BEEN UNAMBIGUOUSLY PROVIDED IN SEC. 80-IB(10) THAT IN ORDER TO BE ELIGIBLE TO CLAIM DEDUCTION U/S. 80-IB( 10), THE HOUSING PROJECT MUST BE APPROVED BY THE LOCAL AUTHO RITY AND EVEN THE COMPLETION CERTIFICATE SHOULD ALSO BE ISSUED BY THE LOCAL AUTHORITY. IN YOUR CASE THE COMPLETION CERTIFICATE WAS ISSUED BY M/S. SPACE DESIGNER'S SYNDICATE WHICH IS NOT A LOCAL AUTHORITY . 4.2. THE ARCHITECT FIRM HAD STATED THAT THERE WAS N O LOCAL AUTHORITY AUTHORIZED TO ISSUE COMPLETION CERTIFICATE. IT IS, HOWEVER, SEEN FROM RECORDS THAT A CERTIFICATE WAS ISSUED BY THE KESHAVNAGAR GRAMPANCHAYAT TO THE EFFECT THAT PROPERTY TAX HAS B EEN CHARGED ON THE FLATS IN YOUR PROJECT. THEREFORE, IT IS HARD TO ACCEPT THAT YOUR PROJECT DID NOT COME UNDER ANY LOCAL AUTHORITY AND THAT THERE WAS NO COMPETENT LOCAL AUTHORITY TO ISSUE COMPLETION CERTIFICATE. BE THAT AS IT MAY, IT CANNOT BE DENIED THAT THE ARCHITECT FIRM I. E. M/S. SPACE DESIGNER'S SYNDICATE WHICH ISSUED THE COMPLET ION CERTIFICATE IS NOT A LOCAL AUTHORITY WITHIN THE MEA NING OF SECTION 80-IB(10). . 4.3 IN FACT, THERE IS A CONTRADICTION BETWEEN THE R EMARKS GIVEN BY THE STATUTORY AUDITOR IN HIS AUDIT REPORT IN FORM NO. 10CCB AND IN THE ASSERTION MADE BY THE ARCHITECT FIRM WITH REGARD TO LOCAL AUTHORITY. AT C LAUSE 23 OF AUDIT REPORT IN FORM NO. 10CCB, IT HAS BEEN STATED THAT 'APPROVAL BY A LOCAL AUTHORITY HAD BEEN OBTAINED ON 5/5/2006'. IT IS SEEN THAT THE CITED APPROVAL HAD BEEN GRANTED BY THE ASSTT. DIRECTOR OF TOWN PLANNING. THEREFORE, BY THE STATUTORY AUDITOR' S REMARKS, THE ASSTT. DIRECTOR OF TOWN PLANNING WAS T HE COMPETENT LOCAL AUTHORITY IN YOUR CASE. THE CORRECT NESS OF THE REMARK THUS GIVEN BY THE STATUTORY AUDITOR I S SUBJECT TO SCRUTINY. BUT SUFFICE WOULD IT TO STATE THAT THIS REMARK ITSELF CONTRADICTS THE ARCHITECT FIRMS 5 ASSERTION THAT THERE WAS NO COMPETENT LOCAL AUTHORI TY TO ISSUE COMPLETION CERTIFICATE OF THE BUILDING OF YOU R PROJECT. 4.4 INCIDENTALLY AND WITHOUT PREJUDICE TO THE FOREG OING, IT IS NECESSARY TO REFER TO YOUR SUBMISSION DATED 2 6-10- 2008 MADE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS WHEREIN IT WAS STATED AT CLAUSE 18 THAT THE COMMENCEMENT CERTIFICATE AS WELL 'AS THE COMPLETION CERTIFICATE WERE ENCLOSED. THE COMPLETION CERTIFICA TE REFERRED TO BY YOU WAS THE CERTIFICATE ISSUED BY M/ S. SPACE DESIGNER'S SYNDICATE. AS FOR THE COMMENCEMENT CERTIFICATE, IT IS SEEN THAT THE SAME WAS ONLY IN T HE NATURE/FORM OF RECOMMENDATION FOR APPROVAL GIVEN BY THE ASSTT. DIRECTOR OF TOWN PLANNING. THERE WAS NO COMMENCEMENT CERTIFICATE AS SUCH. THUS, NOT ONLY TH AT THERE WAS NO COMPLETION CERTIFICATE, THERE WAS NOT EVEN A COMMENCEMENT CERTIFICATE TO BEGIN WITH. 4.5 IT IS ALSO NECESSARY TO MENTION THAT AS STATED BY M/S. SPACE DESIGNER'S SYNDICATE IN ITS LETTER, WORK OF THE PROJECT 'FLORIDA MINIS' WAS COMMENCED ON 10/11/2005 . AS PER CLAUSE 23 OF THE AUDIT REPORT IN FORM NO. 10 CCB, APPROVAL (SO-CALLED) WAS OBTAINED ON 5/5/2006. GOIN G BY THE ABOVE, IT IS CLEARLY ESTABLISHED THAT YOUR PROJ ECT WAS STARTED EVEN BEFORE AN ORDER WAS PASSED BY THE ADDL. COLLECTOR PERMITTING NON-AGRICULTURAL USE OF THE SUBJECT LAND. THIS WAS IN VIOLATION OF SEC. 45 OF MAHARASHTRA LAND REVENUE ACT, 1 966. IN OTHER WORDS , NOT ONLY THAT YOUR PROJECT DID NOT HAVE ANY APPROVA L BY THE LOCAL AUTHORITY AND ITS COMMENCEMENT AND COMPLETION WAS NOT CERTIFIED BY THE LOCAL AUTHORITY , IT IN FACT PRECEDED THE VERY FIRST ORDER IN RELATION TO T HE PROJECT WHICH HAD BEEN PASSED ON 5/5/2006. 5. FOR THE REASONS STATED SUPRA, IT IS CLEAR THAT T HERE WAS NO COMPLIANCE BY YOU WITH THE CONDITIONS LAID D OWN IN THE SECTION 80-IB(10) AS REGARDS THE APPROVAL, COMMENCEMENT AND, ABOVE ALL, COMPLETION OF THE PROJ ECT. HENCE YOU ARE NOT ELIGIBLE FOR DEDUCTION U/S.80-IB( 10) IN RESPECT OF INCOME FROM THE PROJECT 'FLORIDA MINIS'. HOWEVER, IN THE ASSESSMENT MADE BY HIM, THE ASSESSI NG OFFICER DID NOT MAKE THE REQUIRED VERIFICATION TO A SCERTAIN IF THE CONDITIONS LAID DOWN IN SECTION 80-IB(10) HA D BEEN FULFILLED BY YOU. HE ROUTINELY ASSUMED M/S. SP ACE DESIGNER'S SYNDICATE TO BE A LOCAL AUTHORITY COMPET ENT TO ISSUE COMPLETION CERTIFICATE. CONSEQUENTLY HE ERRONEOUSLY ALLOWED YOUR CLAIM, OF DEDUCTION U/S. 8 0- IB(10). 6. FOR THE REASONS STATED HEREINABOVE, I.E. AS THE ASSESSING OFFICER MADE THE ASSESSMENT ALLOWING THEREIN YOUR C LAIM OF 6 DEDUCTION U/S. 80-IB(10) IN RESPECT OF THE PROJECT 'FLORIDA MINIS' ON THE BASIS OF INCORRECT ASSUMPTION OF FACT S AND WITHOUT CORRECTLY APPLYING THE STATUTORY PROVISIONS , THE ORDER DT. 15.12.2009 IS HEREBY CONSIDERED TO BE ERR ONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. ACCORDINGLY, AND BY VIRTUE OF THE AUTHORITY VESTED IN THE UNDERSIGNED AS PER THE PROVISIONS OF SEC. 263 OF TH E INCOME-TAX ACT, 1961, THE SAID ORDER IS PROPOSED TO BE REVISED UNDER THE SAID SECTION.' 5. IN RESPONSE AUTHORISED REPRESENTATIVE OF THE ASS ESSEE APPEARED AND FILED WRITTEN SUBMISSION DATED 28-03-2 012 ON THE ISSUE RAISED IN ABOVE SHOW CAUSE NOTICE AND FURTHER WRITTEN SUBMISSIONS WERE FILED ON 29-03-2012. THE WRITTEN SUBMISSIONS ADVANCED BY THE ASSESSEE THROUGH HIS AU THORISED REPRESENTATIVE ARE REPRODUCED AS UNDER : '1. YOU HAVE PROPOSED REVISION U/S. 263 OF THE IT. ACT OF THE ASSESSMENT U/S. 143(3) DATED 15.12.2009 ON GROUNDS OF NON COMPLIANCE OF THE CONDITIONS LAID DOWN IN SE C. 80IB (10) AS REGARDS 'THE APPROVAL, COMMENCEMENT AND ABO VE ALL COMPLETION' OF THE ASSESSEE'S 'FLORIDA MINIS' P ROJECT. 2. THE ASSESSEE UNDERTOOK DEVELOPMENT & CONSTRUCT ION OF A SCHEME OF 96 RESIDENTIAL FLATS 'FLORIDA MINIS' W. E.F, 10.11.2005 ON A PLOT OF LAND ADMEASURING 4824.54 SQ . METERS LOCATED AT KESHAV NAGAR, MUNDHWA - AN AREA F ALLING BEYOND THE CITY LIMITS OF THE PUNE MUNICIPAL CORPOR ATION. EACH FLAT IN THE SCHEME MEASURED LESS THAN 1500 SQ. FT. THE SCHEME WAS COMPLETED ON 20.03.2007 AND CERTIFIE D AS SUCH BY ARCHITECTS M/S. SPACE DESIGNERS SYNDICATE. 3. COPY OF THE PROJECT PLAN PREPARED BY M/S. SPAC E DESIGNERS SYNDICATE, APPROVAL BY THE ASSISTANT DIRE CT OR TOWN PLANNING DT. 14.02.2006, COLLECTOR'S SANCTION LETTER DT. 05.05.2006 AND COMPLETION CERTIFICATE DT. 20.03.200 7 ISSUED BY ARCHITECT M/S. SPACE DESIGNERS SYNDICATE ARE ON THE AO'S RECORD. 4. THE RELEVANT ABSTRACT OF SEC. 80IB(10) OF THE I.T. ACT, 1961 UNDERLINING PORTIONS RELEVANT TO ISSUE RAISED IN THE NOTICE IS REPRODUCED AS UNDER: (10) 'THE AMOUNT OF DEDUCTION IN CASE OF AN UNDERT AKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE 31 ST DAY OF MARCH, 2008 BY A LOCAL AUTHORITY SHALL BE HUNDRED PERCENT OF THE PROFITS DERIVED IN THE PREVI OUS YEAR 7 RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING P ROJECT IF (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION (I) .......... NOT APPLICABLE ............ (II) ...........NOT APPLICABLE............ (III) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE IST DAY OF APRIL 2005 WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY TH E LOCAL AUTHORITY. EXPLANATION FOR THE PURPOSE OF THIS CLAUSE (I) NOT APPLICABLE .. (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WH ICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY'. 5. THE PLANS OF THE 'FLORIDA MINIS' PROJECT WERE SUBMITTED ON 24.01.2006 FOR APPROVAL TO THE ASSISTANT DIRECTO R OF TOWN PLANNING AND AFTER HIS RECOMMENDATION DT. 14.02.2006 WERE FORMALLY SANCTIONED BY THE DISTRICT COLLECTOR, PUNE ON 05.05.2006. THIS IS IN ACCORDANC E WITH 'MAHARASHTRA REGIONAL & TOWN PLANNING ACT, 1966' WHICH IS THE LAW GOVERNING THE ASSESSEE'S PROJECT WHICH W AS LOCATED OUTSIDE PMC LIMITS. THE OBSERVATION MADE IN THE NOTICE 'THERE WAS NO COMMENCEMENT CERTIFICATE TO 'B EGIN WITH' IS NOT FACTUALLY CORRECT. THE ASSESSEE'S PROJ ECT FALLS UNDER SUB CLAUSE (III) OF CLAUSE (A) OF SECTION 801 B (10). 6. IN PARA 4.4 OF THE NOTICE YOU HAVE REFERRED TO THE DATE OF COMMENCEMENT OF ACTIVITIES '10.11.2005' AND THE DAT E OF SANCTION '5.5.2006' REPORTED IN THE AUDIT REPORT IN FORM 10CCB, AND OBSERVED THAT THE ASSESSEE'S PROJECT WAS STARTED EVEN BEFORE AN ORDER WAS PASSED BY AN ADDL. COLLECTOR PERMITTING NON AGRICULTURAL USE OF THE SU BJECT LAND IN VIOLATION OF SEC. 45 OF THE MAHARASHTRA LAN D REVENUE ACT, 1966. THE SUBJECT LAND WAS CONVERTED TO N.A. USE BY COLLE CTOR'S SANCTION LETTER DATED 07.08.2003. THE ASSESSEE COMM ENCED ITS PROJECT 'FLORIDA MINIS' ON 10.11.2005 BY TAKING UP PRELIMINARY ACTIVITIES SUCH AS CLEARING THE SITE, L EVELING THE PLOT AND CONSTRUCTING A BOUNDARY WALL ETC. WHICH AC TIVITIES DO NOT REQUIRE PRIOR SANCTION OF THE AUTHORITIES. T HE 8 ASSESSEE APPLIED FOR PLAN SANCTION OF BUILDINGS TO BE CONSTRUCTED ON THE PROJECT SITE ON 24.01.2006 WHICH WERE APPROVED AS MENTIONED HEREINBEFORE. THE FACTS HAVE BEEN CORRECTLY REPORTED AND THE ASSESSEE HAS NOT VIOLATE D SECTION 45 OF THE MAHARASHTRA LAND REVENUE CODE, 1966. 7. IN PARA 4.1 OF THE NOTICE YOU HAVE OBSERVED TH AT 'THE COMPLETION CERTIFICATE SUBMITTED IN COURSE OF ASSES SMENT PROCEEDINGS IN SUPPORT OF THE CLAIM FOR DEDUCTION U /S. 801B(10), WAS ISSUED BY M/S. SPACE DESIGNERS' SYNDI CATE WHICH IS NOT A LOCAL AUTHORITY'. UNDER THE MAHARASHTRA REGIONAL & TOWN PLANNING ACT, 1966 THE AUTHORITIES ARE NOT REQUIRED TO ISSUE A CO MPLETION CERTIFICATE. THE ARCHITECTS DESIGNING AND SUPERVISI NG THE PROJECT ARE REQUIRED TO VERIFY AND CERTIFY COMPLETI ON OF THE SANCTIONED PROJECT, AS PER THE PLANS. THE ASSESSEE ACCORDINGLY OBTAINED A 'COMPLETION CERTIFICATE DATE D 20.03.2007 AND FURNISHED THE SAME TO THE GRAMPANCHA YAT KESHAVNAGAR, PUNE. IN THIS CONNECTION, WE ARE ENCLOSING A CLARIFICATIO N LETTER DT.5.7.2006 ISSUED BY ASSISTANT DIRECTOR, TOWN PLAN NING, PUNE TO A LOCAL ARCHITECT THAT UNDER THE PROVISIONS OF THE MAHARASHTRA REGIONAL & TOWN PLANNING ACT, 1966 THE COMPLETION CERTIFICATE-IS REQUIRED TO BE ISSUED BY THE ARCHITECT OF THE PROJECT. IN THE CIRCUMSTANCES THE ASSESSEES PROJECT FALLS W ITHIN THE LANGUAGE OF SUB-CLAUSE (II) OF THE EXPLANATION TO S ECTION 80IB(10). 8. CONSIDERING THE ABOVE FACTS AND SUBMISSIONS IT I S CHAR THAT THE APPROVAL COMMENCEMENT AND THE COMPLETION O F THE PROJECT ARE AS PER PROVISIONS OF LAW. THE ASSESSEE' S 'FLORIDA MINIS' PROJECT MEETS IN LETTER AND SPIRIT THE CONDI TIONS FAR AVAILING DEDUCTION U/S. 801B (10) AND IS VALID. 8.1 IN THE SUBSEQUENT LETTER DATED 29/03/2012, THE LD. AUTHORIZED REPRESENTATIVES STATED AS UNDER: 'THE MAHARASHTRA REGIONAL & TOWN PLANNING ACT, 1966 DOES NOT CONTAIN 'SPECIFIC PROVISION WITH REGA RD TO 'COMPLETION CERTIFICATE' IN RESPECT OF HOUSING PROJECTS. THE PROCEDURE FOLLOWED BY THE ADMINISTRATION IS THAT A 'COMPLETION CERTIFICATE' I S OBTAINED FROM THE ARCHITECT IN CHARGE OF THE PROJEC T, WHICH FORMS THE BASIS FOR THE LOCAL GRAMPANCHAYAT TO TAKE COGNIZANCE AND LEVY LOCAL TAXES (COPY OF INTIMATION TO GRAMPANCHAYAT ENCLOSED). THIS IS DONE ON THE BASIS OF INTERNAL INSTRUCTIONS ISSUED BY THE COLLECTOR. 9 WE HAVE OBTAINED THIS INFORMATION ON THE BASIS OF ENQUIRIES MADE BY THE ASSESSEE AT THE OFFICE OF THE ASSISTANT DIRECTOR, TOWN PLANNING, PUNE REGION, PUNE.' 6. CIT HAVING CONSIDERED SUBMISSIONS ON BEHALF OF A SSESSEE HELD AS UNDER : 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS TH US MADE BY AND ON BEHALF OF THE ASSESSEE WHEREUPON THE ISSUE RAISED IN THE SHOW-CAUSE NOTICE IS DECIDED AS UNDER: 7.1 THE FIRST THING TO BE NOTED IS THAT AS PER THE CERTIFICATE GIVEN BY M/S. SPACE DESIGNERS' SYNDICAT E, THE PROJECT WAS COMMENCED ON 10/11/2005. IN THE AUDIT REPORT IN FORM NO. 10CCB, THE DATE OF APPROVAL GIVEN BY THE LOCAL AUTHORITY HAS BEEN .MENTIONED AS 05/05/2006. GOING BY THE ABOVE, THE ASSESSEE HAD COMMENCED ITS HOUSING PROJECT 'FLORIDA MINIS' EVEN BEFORE THE SAME HAD GOT APPROVAL. AS HAS BEEN POINTED OUT IN THE SHOW CAUSE NOTICE ISSUED U/S. 263, THIS IS VIOLATIVE OF SECTIO N 45 OF THE MAHARASHTRA LAND REVENUE ACT, 1966. THE ASSESSEE HAS SUBMITTED THAT ONLY PRELIMINARY ACTIVITIES SUCH AS CLEARING SITE, LEVELING THE PLOT AND CONSTRUCTING A BOUNDARY WALL ETC. WERE CARRIED OUT AND THAT SUCH ACTIVITIES DO NOT REQUIRE PRIOR SANCT ION OF THE AUTHORITIES. HOWEVER, NO DETAILS OR EVIDEN CES IN SUPPORT OF THE ABOVE CONTENTION HAVE BEEN FURNISHED. THEREFORE, AS OF NOW, THE ASSESSEE CANN OT BE SAID TO HAVE EXPLAINED THE VIOLATION MENTIONED SUPRA. 7.2 IT HAS BEEN STATED IN THE CERTIFICATE DATED 20/03/2007 ISSUED BY M/S. SPACE DESIGNERS' SYNDICATE THAT THE ASSESSEE'S PROJECT WAS OUTSIDE T HE PUNE MUNICIPAL CORPORATION LIMITS AND, THEREFORE, THERE WAS NO COMPETENT / LOCAL AUTHORITY AUTHORIZED TO ISSUE COMMENCEMENT CERTIFICATE. THE SAME THING WAS SAID BY THE ABOVE ARCHITECT AS REGARDS THE ISSU E OF COMPLETION CERTIFICATE AS WELL. THE RECORDS CONT AIN A JT. VENTURE AGREEMENT ENTERED INTO BETWEEN THE ASSESSEE ON THE ONE HAND AND M/S. JAYPRAKASH SITARAM GOEL (LAND OWNER) ON THE OTHER, WHEREIN IT HAS BEEN STATED, AMONG OTHER THINGS, THAT 'THE SAID PROPOSED NEW BUILDINGS SHALL BE CONSTRUCTED BY THE SECOND PARTY IN ACCORDANCE WITH BUILDING PLANS AS APPROVED BY THE PUNE MUNICIPAL CORPORATION . IN THE CIRCUMSTANCES, IT IS NOT KNOWN AS TO ON WHAT BASIS M/S. SPACE DESIGNERS SYNDICATE CERTIFIED THA T 10 THERE WAS NO LOCAL AUTHORITY COMPETENT TO ISSUE THE COMMENCEMENT/COMPLETION CERTIFICATE. 7.3 ASSUMING FOR A MOMENT THAT THE PROJECT LAY OUTSIDE THE PUNE MUNICIPAL CORPORATION LIMITS, IT WAS NEVERTHELESS WITHIN THE LIMITS OF THE KESHAV NAGAR GRAMPANCHAYAT. A VILLAGE PANCHAYAT IS RECOGNIZED AS A LOCAL AUTHORITY U/S. 10(20) OF THE INCOME-TAX .ACT, 1961. IT IS ALSO SO RECOGNIZED UND ER THE GENERAL CLAUSES ACT. IT IS, THEREFORE, NOT CLEA R AS TO WHY APPROVAL WAS NOT TAKEN FROM THE VILLAGE PANCHAYAT. 7.4 IT MAY BE ARGUED THAT THE ABOVE QUERIES ARE NOT RELEVANT BECAUSE APPROVAL WAS EVENTUALLY GIVEN BY THE DISTRICT COLLECTOR ON THE BASIS OF RECOMMENDATIONS GIVEN BY THE ASST. DIRECTOR OF TOWN PLANNING. ASSUMING THAT THE DISTRICT COLLECTOR BEING THE HEAD OF THE DISTRICT WAS THE LOCAL AUTHOR ITY TO GIVE APPROVAL FOR THE PROJECT, IT IS THEN NOT COMPREHENSIBLE AS TO WHY THE COMMENCEMENT CERTIFICATE HAD TO BE ISSUED BY M/S. SPACE DESIGNERS' SYNDICATE. THE SAME APPLIES TO ISSUE OF COMPLETION CERTIFICATE AS WELL. IF THE DISTRICT COLLECTOR WAS THE COMPETENT LOCAL AUTHORITY, WHO GRANTED APPROVAL TO THE HOUSING PROJECT, HE WAS ALSO THE COMPETENT AUTHORITY TO ISSUE THE COMMENCEMENT AS WELL AS COMPLETION CERTIFICATES. BUT HE DID NOT. 7.5 THE ASSESSEE HAS SUBMITTED, VIDE ITS LETTER DT. 29.03.2012, COPY OF A CLARIFICATION ISSUED BY THE ASSISTANT DIRECTOR OF TOWN PLANNING, PUNE REGION THAT ALTHOUGH THE COLLECTOR IS THE DESIGNATED AUTHORITY IN RESPECT OF PROPERTIES LOCATED BEYOND THE MUNICIPAL CORPORATION LIMITS AND HE ALSO FINALL Y SANCTIONS THE PLANS, 'THE RESPONSIBILITY FOR CERTIFYING WHETHER THE PROJECT IS COMPLETED AS PER THE SANCTIONED PLAN AND ISSUE OF COMPLETION CERTIFICATE LIES WITH THE ARCHITECT OF THE PROJECT. ' THE ASSESSEE HAS ADDED THAT THIS PRACTICE IS FOLLOWED AS PER THE INTERNAL INSTRUCTIONS ISSUED BY THE COLLECTOR. TWO QUESTIONS ARISE HERE. FIRSTLY, WHETHER THE INTERNAL INSTRUCTIONS THUS ISSUED HAVE ANY STATUTORY BACKING. THE SECOND QUESTION IS WHETHER THE ARCHITECT SHOULD ISSUE THE COMPLETION CERTIFICATE UNLESS SPECIFICALLY DESIGNATED/ AUTHORIZED BY THE COLLECTOR TO DO SO. OTHERWISE, AN ARCHITECT CANNOT STEP INTO THE SHOES OF THE LOCAL AUTHORITY WHO HAPPENS TO BE AN AUTHORITY DECLARED IN THE OFFICIAL GAZETTE OF THE STATE. 11 7.6 THE ABOVE OBSERVATIONS WOULD CLEARLY SHOW THAT THE REPLIES GIVEN BY THE ASSESSEE ON THE VARIOUS POINTS RAISED IN THE SHOW-CAUSE NOTICE WITH REGARD TO COMMENCEMENT OF THE PROJECT EVEN BEFORE GETTING ANY APPROVAL, THE CORRECT LOCAL AUTHORITY TO ISSUE APPROVAL, AND THE CORRECT LOCAL AUTHORITY TO ISSUE COMMENCEMENT AND COMPLETION CERTIFICATES ARE NOT SATISFACTORY, AND, IN ANY CASE , CANNOT BE ASSUMED TO BE CORRECT. IT IS NECESSARY THAT THE VARIOUS SUBMISSIONS THUS MADE BY THE ASSESSEE IN ITS ABOVE REPLIES ARE SUBJECTED TO SCRUTINY BY MAKING ENQUIRIES WITH THE VARIOUS AUTHORITIES MENTIONED SUPRA AND ALSO BY CAREFULLY PERUSING THE RELEVANT ACTS, IN ORDER TO DECIDE WHETHER THE APPROVAL/COMMENCEMENT AND COMPLETION CERTIFICATES OBTAINED BY THE ASSESSEE CAN BE REGARDED AS ISSUED BY THE LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 45 OF THE MAHARASTRA LAND REVENUE ACT, 1966 AS WELL AS SECTION 80IB(10) OF THE INCOME TAX ACT, 1961. IN ORDER THAT THE REQUIRED VERIFICATIONS AND ENQUIRIES CAN BE CARRIED OUT EFFECTIVELY AND CONCLUSIVELY, I WOULD DEEM IT APPROPRIATE TO RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHALL CARRY O UT SUCH VERIFICATIONS, ENQUIRIES ETC., AND SHALL DECID E THE MATTER AFRESH IN ACCORDANCE WITH THE LAW. 6.1 IN THE RESULT ASSESSMENT OF THE ASSESSEE FOR A. Y. 2007-08 WAS SET-ASIDE ON ISSUE OF DEDUCTION U/S.80IB(10) BY INVOKING PROVISIONS OF SECTION 263 AND ASSESSING OFFICER WAS DIRECTED TO DO THE ASSESSMENT AFRESH AFTER GIVING REASONABLE OP PORTUNITY OF BEING HEARD AND AS PER LAW. SAME HAS BEEN OPPOSED BEFORE US. 7. THE LD. AR FOR ASSESSEE SUBMITTED THAT ASSESSING OFFICER MADE DETAILED ENQUIRY BEFORE PASSING THE ORDER. IN THIS REGARD LD. AR SUBMITTED THAT HE HAS FILED WRITTEN SUBMISSI ONS BEFORE THE AO ON 12-11-2009 ALONG WITH A COPY OF LETTER IS SUED BY GRAM PANCHAYAT IN RESPECT OF LEVY OF TAX (PLACED AT PAGES 10 AND 11 OF PAPER BOOK) WHICH READS AS UNDER : 12 DATED: 12 A ' NOVEMBER 2009 FROM, CONSORTIUM CONSTRUCTIONS (JV) 401, EXPRESS TOWERS, 594, SADASHIV PETH, PUNE - 30. PAN NO.: AAEFC6288N TO, THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-3, PUNE. RESPECTED SIR, REFERENCE TO THE DISCUSSION WITH YOUR HONOR DURING THE COURSE OF HEARING FOR A.Y. 07-08 ON 05.11.09 AND THE FURTHER INFORMATION CALLED FOR, WE HAVE TO SUBMIT AS UNDER: 1. XEROXED COPY OF ORDER NO. PRN/NA/SR/40/2005 DATED 05.05.06 ISSUED BY THE ADDITIONAL COLLECTOR, PUNE ACCORDING PERM ISSION FOR NA USE OF LAND ADMEASURING 4824.54 SQ. MTRS. OF PLOT NO. 111 ON WHICH THE PROJECT 'FLORIDA MINIS' IS CONSTRUCTED BY THE A SSESSEE AOP IS ENCLOSED. 2. WE HAVE BEEN INFORMED BY THE MEMBERS THAT NO PERMISSION FROM EITHER TOWN-PLANNING OR GRAMPANCHAYAT IS TAKEN FOR THE SAID PROJECT SINCE THE PROJECT IS OUTSIDE PMC LIMITS AND THERE I S NO COMPETENT/LOCAL AUTHORITY AUTHORIZED TO ISSUE THE COMME NCEMENT CERTIFICATE. CERTIFICATE FROM THE ARCHITECT 'SPACE DESIGN ERS SYNDICATE' HAS ALREADY BEEN SUBMITTED TO YOUR HONOR. 3. THE GRAMPANCHAYAT KESHAVNAGAR, MUNDWA,TAL. HAV ELI, PUNE-36 HAS LEVIED GRAMPANCHAYAT TAX ON ALL THE FLATS IN THE PRO JECT 'FLORIDA MINIS' FROM F.Y. 2007-08. XEROXED COPY OF THE CERTIFICATE IS E NCLOSED HEREWITH. 4. STATEMENT OF VALUATION OF WORK-IN-PROGRESS OF THE P ROJECT FLORIDA MINIS OF RS. 57,17,000.00 ON 31.03.07 IS ENCLOSED. WE SHALL BE GLAD TO SUBMIT ANY FURTHER INFORMATION ON HEARIN G FROM YOUR HONOR. THANKING YOU IN ANTICIPATION. YOURS FAITHFULLY , SD/- L.R. AGARWAL, CHARTERED ACCOUNTANT (AUTHORISED REPRESENTATIVE FOR ASSESSEE) GRAMPANCHAYAT KESHAVNAGAR MUNDHWA, TAL. HAVELI, DIST PUNE 36 SHRI.SANDIP MARUTI LONKAR SHRI.P.M.LONKAR SMT.ASHA MANOHAR PAKHRE (DEPUTY SARPANCH) (GRAMVIKAS OFFICER ) (SARPANCH) GRAMPANCHAYAT KESHAVNAGAR CERTIFY THAT, WE HAVE MAINTAINED RECORDS OF FLORIDA MINIS CONDOMI NIUM SOCIETY SITUATED ON S.NO.29 WITHIN THE LOCAL LIMITS OF WARD NO.6 FROM THE YEAR 2007-08. EACH FLAT ADMEASURING 630 SQ . FEET HAVE 13 BEEN ASSESSED AS 630X1.50 = 945+25+25+365 =1360 FOR THE PROPERTY TAX ASSESSMENT. THIS CERTIFICATE IS ISSUED AS PER DEMAND 7.1 IN THE SAID LETTER THE ASSESSEE CLAIMED TO HAVE FILED XEROX COPY OF THE LR.NO.PRN/NA/SR/40/2005 DATED 05-05-200 6 ISSUED BY THE ADDL. COLLECTOR, PUNE GRANTING PERMIS SION OF NA USE OF LAND ADMEASURING 4824.54 SQ.MTR OF PLOT NO.1 11 ON WHICH THE PROJECT FLORIDA MINIS WAS CONSTRUCTED B Y ASSESSEE WHICH WAS ENCLOSED ALONG WITH THE LETTER DATED 12-1 1-2009 DISCUSSED ABOVE AND INTERLIA STATED THAT PERMISSIO NS WAS NOT OBTAINED FROM PUNE MUNICIPAL CORPORATION BECAUSE SA ME WAS LYING OUTSIDE THE LIMITS OF PUNE MUNICIPAL CORPORAT ION. THE CONCERNED GRAM PANCHAYAT KESHAVNAGAR, MUNDWA, TAL : HAVELI, PUNE HAS LEVIED GRAM PANCHAYAT TAX ON ALL T HE FLATS IN PROJECT FLORIDA MINIS FOR A.Y. 2007-08. XEROX CO PY OF THE SAME WAS ENCLOSED IN THE ABOVE SAID LETTER DATED 12 -11-2009. THE STATEMENT OF VALUATION OF WORK-IN-PROGRESS OF P ROJECT FLORIDA MINIS OF RS.57,17,000/- AS ON 31-03-2007 WAS ALSO ENCLOSED IN THE SAID LETTER. 7.2 ACCORDING TO THE GRAM PANCHAYAT KESHAVNAGAR, MU NDWA, TAL : HAVELI, PUNE-36 CERTIFIED THROUGH ITS AUTHORI SED PERSONS, I.E.DY. SARPANCH, GRAM VIKAS OFFICER, SARPANCH THAT SAID GRAM PANCHAYAT MAINTAIN RECORDS OF FLORIDA MINIS CONSO RTIUM ESTATE SITUATED AT SY.NO.29 WITHIN LOCAL LIMITS OF WARD. IT WAS FURTHER CERTIFIED THAT EACH FLAT ADMEASURING BELOW 1500 SQ.FT. 14 WAS ASSESSED FOR PROPERTY TAX ASSESSMENT. THE SAID CERTIFICATE IS CLAIMED TO BE ISSUED AS PER DEMAND. 7.3 FURTHER, LD. AR DREW OUR ATTENTION TO COPY OF S UBMISSION TO ASSESSING OFFICER ON 19-11-2009 (AS PLACED ON PA GE 15 OF THE PAPER BOOK) CLAIMED TO BE FILED BEFORE THE ASSESSIN G OFFICER WHICH READS AS UNDER : DATED: 19 TH NOVEMBER 2009 FROM, CONSORTIUM CONSTRUCTIONS, (TV) 401, EXPRESS TOWERS, 594, SADASHIV PETH, PUNE - 30. PAN NO.: AAEFC6288N TO, THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-3, PUNE. RESPECTED SIR, REFERENCE TO THE DISCUSSION WITH YOUR HONOR DURING THE COURSE OF HEARING FOR A.Y. 07-08 ON 12.11.09 AND IN CONTINUAT ION OF OUR LETTER DATED 12.11.2009 AND THE FURTHER INFORMATION CALLED FOR, WE HAVE TO SUBMIT AS UNDER: 1. XEROXED COPY OF ORDER NO. PRN/NA/SR/40/2005 DA TED 05.05.06 ISSUED BY THE ADDITIONAL COLLECTOR, PUNE A CCORDING PERMISSION FOR NA USE OF LAND ADMEASURING 4824.54 S Q. MTRS. OF PLOT NO. 111 ON WHICH THE PROJECT 'FLORIDA MINIS' I S CONSTRUCTED BY THE ASSESSEE AOP WAS SUBMITTED ON 12.11.2009. THE S AID NA ORDER IS A 'COMMENCEMENT CERTIFICATE'' FOR THE PROJECT IS SUED BY THE COLLECTOR PUNE WHEREIN THEY HAVE SPECIFIED THE TERMS AND CONDITIONS TO BE COMPILED WITH BY THE ASSESSEE AOP FOR THE EXECUTION OF THE PROJECT. 2. WE HAVE BEEN INFORMED BY THE ARCHITECT OF THE PROJECT THAT AN APPLICATION WAS MADE TO THE TOWN-PLANNING ON 24.01. 2006 ALONG WITH THE PLANS OF THE PROJECT. THESE PLANS ARE SCRU TINIZED BY THE TOWN-PLANNING DEPARTMENT AND THERE AFTER SEND TO TH E OFFICE OF THE COLLECTOR FOR THEIR FINAL APPROVAL. COPIES OF T HE ORIGINAL PLANS DULY CERTIFIED BY THE ARCHITECT ARE PRODUCED FOR YO UR VERIFICATION. 3. THE GRAMPANCHAYAT KESHAVNAGAR, MUNDWA,TAL. HAV ELI, PUNE- 36 HAD BEEN INFORMED ON 04.11.2005 THAT THE PROJECT FLORIDA MINIS IS BEING STARTED ON PLOT NO. 111, S. NO. 29(P), 38( P), 39(P), KESHAVNAGAR, MUNDHAWA, PUNE WHICH FALLS UNDER THEIR JURISDICTION. ACCORDINGLY THE WORK ON THE PROJECT WAS COMMENCED O N 10.11.2005 FOR WHICH THE ARCHITECT HAS ALREADY ISSUED A CERTIF ICATE WHICH IS FORMING PART OF THE FINAL ACCOUNTS. 15 4. THE PROJECT WAS COMPLETED ON 20.03.2007 AND C ERTIFICATE FROM THE ARCHITECT WAS OBTAINED. THE SAID COMPLETION CER TIFICATE ALONG WITH THE DETAILS OF THE 96 FLATS CONSTRUCTED ON THE SAID PLOT WAS GIVEN TO THE GRAMPANCHAYAT KESHAVNAGAR, MUNDWA,TAL. HAVELI, PUNE-36 ON 25.03.2007. COPY OF THE SAID LETTER IS E NCLOSED FOR YOUR REFERENCE. 5. THE GRAMPANCHAYAT KESHAVNAGAR, MUNDWA,TAL. HAVELI, P UNE-36 HAD LEVIED GRAMPANCHAYAT TAX ON ALL THE FIATS IN THE PROJE CT FLORIDA MINIS FROM F.Y. 2007-08. XEROX COPY OF THE CERTIFICATE HAS BE EN SUBMITTED TO YOUR HONOR ON 12.11.2009. 6. WE THEREFORE SUBMIT THAT THE HOUSING PROJECT 'FL ORIDA MINIS' IS ELIGIBLE FOR DEDUCTION U/S 80IB (10) OF THE INCOME TAX ACT, 1961 SINCE THE ASSESSEE AOP HAS COMPLIED WITH ALL THE CONDITIONS LAID DOWN BY THE SECTION FOR THE HOUSING PROJECT I.E. A) THE ASSESSEE AOP HAS COMMENCED DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT BEFORE 31.03.06 AND S UCH HOUSING PROJECT IS COMPLETED BEFORE 31.03.07 I.E. WITHIN 4 YEARS FROM THE END OF THE YEAR IN WHICH THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY. B) THE PROJECT IS ON THE SIZE OF PLOT OF LAND HAVING AREA OF MORE THAN 1 ACRE. C) THE BUILT UP AREA OF ALL RESIDENTIAL UNITS IN T HIS HOUSING PROJECT IS LESS THAN 1500 SQ FT. D) THE BUILT UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED FIVE PERCENT OF THE AGGREGATE BUILT UP AREA OF TH E HOUSING PROJECT OR TWO THOUSAND SQUARE FEET WHICHEVER IS LESS (INSERTED BY THE FINANCE ACT 2004 W.E.F. 1/4/2005) NO BUILDING OF COMMERCIAL USE IS SANCTIONED IN THE PROJECT WE SHALL BE GLAD TO SUBMIT ANY FURTHER INFORMATION ON HEARING FROM YOUR HONOR. THANKING YOU IN ANTICIPATION. YOURS FAITHFULLY, SD/- L.R. CHARTERED ACCOUNTANT 7.4 ACCORDING TO THIS LETTER, NA ORDER DISCUSSED AB OVE, IS COMMENCEMENT CERTIFICATE FOR PROJECT ISSUED BY THE COLLECTOR, PUNE WHEREIN THEY HAVE SPECIFIED THE TERMS AND COND ITIONS TO BE APPLIED WITH BY ASSESSEE AOP FOR EXECUTION OF TH E PROJECT. ACCORDING TO THE SAID LETTER DATED 19-11-2009, ASSE SSEE WAS INFORMED BY ITS ARCHITECT OF THE PROJECT THAT APPLI CATION WAS MADE TO THE TOWN PLANNING DEPARTMENT AND THEREAFTER SENT TO 16 THE OFFICE OF COLLECTOR FOR THEIR FINAL APPROVAL. COPIES OF THE ORIGINAL PLAN DULY CERTIFIED BY ARCHITECT WERE PROD UCED BEFORE THE ADDL. COMMISSIONER OF INCOME TAX FOR VERIFICAT ION AT THE RELEVANT POINT OF TIME. FURTHER, VIDE PARA 3 OF TH IS LETTER DATED 19-11-2009, THE CONCERNED GRAM PANCHAYAT KESHAVNAGA R, MUNDWA, TAL : HAVELI, PUNE-36 HAD BEEN INFORMED ON 04-11- 2005 THAT PROJECT FLORIDA MINIS WAS BEING STARTED ON PLOT NO. 111 SY.NO.29P, 38P, 39P, KESHAVNAGAR, MUNDWA, PUNE WHICH FALLS UNDER THEIR JURISDICTION. ACCORDINGLY, THE W ORK ON THE PROJECT WAS COMMENCED ON 10-11-2005 FOR WHICH ARCHI TECT HAS ISSUED CERTIFICATE WHICH FORM PARTS OF FINAL ACCOUN TS. FURTHER PARA 4 OF THE SAID LETTER, PROJECT WAS COMPLETED ON 20-03-2007 AND CERTIFICATE FROM ARCHITECT WAS OBTAINED. THE S AID COMPLETION CERTIFICATE ALONG WITH DETAILS OF 96 FLA TS HAS BEEN CONSTRUCTED ON SAID PLOT WERE GIVEN TO THE GRAM PAN CHAYAT KESHAVNAGAR, MUNDWA, TAL : HAVELI, PUNE-36 ON 25-03 -2007. CONSEQUENTLY, THE GRAM PANCHAYAT KESHAVNAGAR, MUNDW A, TAL: HAVELI LEVIED GRAM PANCHAYAT TAX ON ALL FLATS IN PR OJECT FLORIDA MINIS FOR F.Y. 2007-08. FURTHER, IT WAS SUBMITTED THAT FLORIDA MINIS WAS ELIGIBLE FOR DEDUCTION U/S.80IB(10) OF I .T. ACT SINCE ASSESSEE AOP COMPLIED WITH ALL CONDITIONS LAID DOWN BY SECTION FOR HOUSING PROJECT AND ALL THESE DETAILS WERE CLAI MED TO BE SUBMITTED BEFORE THE ADDL.CIT AT RELEVANT POINT OF TIME. 17 7.5 FURTHER, LD. AR DREW OUR ATTENTION TO LETTER DA TED 26-10- 2009 ADDRESSED TO THE ADDL. COMMISSIONER WHICH READ S AS UNDER : DATED: 26 TH OCTOBER 2009 FROM, CONSORTIUM CONSTRUCTIONS (JV) 401, EXPRESS TOWERS, 594, SADASHIV PETH, PUNE - 30. PAN NO.: AAEFC6288N TO, THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-3, PUNE. RESPECTED SIR, REFERENCE TO YOUR LETTER DATED 05.10.09 RECEIVED ON 07.1 0.09 AND THE INFORMATION CALLED FOR BY THE ACIT, CIRCLE-3, PUNE VIDE LE TTER DATED 29.07.09 IN CONNECTION WITH ASSESSMENT PROCEEDING F OR A.Y. 2007-08 WE HAVE TO SUBMIT A UNDER: 1. THE ASSESSEE IS AN ASSOCIATION OF PERSONS. THE MEMBERS OF THE AOP AND THEIR PROFIT SHARING RATIOS ARE AS UNDER. SR.NO. NAME PROFIT LOSS 1. JAYPRAKASH SITARM GOYAL PAN NO.: AAWPG2099R WARD : CIRCLE 2 20% --- 2. M/S CONSORTIUM CONSTRUCTION CO. (RF) PAN NO.: AAAFC8700H WARD : CIRCLE 3 80% 100 % 2. THE REGISTERED OFFICE OF THE AOP IS AT 401, EXPRESS TO WERS, 594, SADASHIV PETH, PUNE - 411 030 AND THE SALES AND GENERA L ADMINISTRATION OFFICE IS AT 501, KINGSTON COURT, OFF. NORTH MAIN ROAD, KOREGAON PARK, PUNE - 411 001. 3. THE NAME, ADDRESS AND PAN OF THE BUSINESS ENTITIES WH ERE IN THE MEMBERS ARE INTERESTED ARE AS UNDER: CONSORTIUM CONSTRUCTION COMPANY, 401, EXPRESS TOWERS, 594, SADASHIV PETH, PUNE- 411 030, PAN: AAAFC8700H NAME OF THE PARTNERS: A)MR. A.U.SEOLEKAR 1, UTTAM TOWERS, NAGAR ROAD, PUN 18 B) MRS.MEENA P SHAH ' MALKAUNS' 41/15, KARVENAGAR CO-OP HSG. SOCIETY, HINGNE, PUNE-411029 C) MRS. VAIJAYANTI A KOTHARI 'OXFORD CLASSIC' OXFORD VILLAGE WANOWRIE, PUNE-411040 D) GAGANDEEP CREDIT CAPITAL PVT. LTD. 2K, 2 ND FLOOR, CALCOT HOUSE , 8/10 TAMARIND LANE, FORT, MUMBAI-400001 4 . THE MEMBERS OF THE ASSESSEE AOP HAVE NOT CHANGED DU RING THE PERIOD FROM INCORPORATION TO TILL DATE. 5. XEROXED COPY OF THE PROFIT AND LOSS ACCOUNT, BALANCE S HEET, COMPUTATION OF INCOME AND TAX AUDIT REPORT FOR A.Y. 2007- 08 ARE ENCLOSED. THE ASSESSEE AOP HAD E-FILED THE RETURN OF INCOM E ON 30.10.2007 VIDE ACKNOWLEDGEMENT NO. 0350001420 AND COPY THEREOF WAS SUBMITTED TO YOUR OFFICE ON 07.11.07. XEROXED C OPY OF THE ACKNOWLEDGEMENT IS ENCLOSED. THE ASSESSEE AOP E-FILED A REVISED RETURN ON 06.03.09 VIDE ACKNOWLEDGEMENT NO.0351002844 BE CAUSE DUE TO TECHNICAL ERROR THE ORIGINAL RETURN DID NOT SHOWED THE DEDUCTION OF RS.2,87,84,208.00 CLAIMED AS DEDUCTION U/S 80IB(1 0) OF THE INCOME TAX ACT, 1961. COPY OF THE REVISED RETURN HAS BEEN SUBMITTED TO YOUR OFFICE ON 09.03.09. XEROXED COPY OF THE S AME IS ENCLOSED FOR YOUR RECORD AND REFERENCE. 6. DETAILS OF ALL BANK ACCOUNTS HELD BY THE AOP. NAME AND ADDRESS OF THE BANK BANK ACCOUNT A) BANK OF INDIA LAXMI ROAD BRANCH CURRENT A/C.NO.1819 PUNE - 411030 B) THE COSMOS CO OP BANK LTD KOREGAON PARK PUNE - 411001 CURRENT A/C.NO.028100102097 7. SHRI JAYPRAKASH S. GOYAL HAD INTRODUCED LAND ADMEASUR ING 187 ARES (20300 SQ MTS.) IN AOP FOR DEVELOPMENT AS HIS CAPITAL CONTRIBUTION FOR RS. 35,00,000/- IN F.Y. 2003 -04. XEROX COPY OF THE JOINT VENTURE (AOP) DATED 11.09.2003 IS ENCLOSED. THIS LAND WAS SUBDIVIDED INTO 17 VARIOUS PLOTS OF VARIOUS SIZES BY THE AO P OF WHICH ONE PLOT ADMEASURING 442 SQ MTS. WAS SOLD IN F.Y. 200 4 - 05, SEVEN PLOTS ADMEASURING 5124 SQ MTS. WERE SOLD IN F.Y. 2 005 - 06, ONE PLOT ADMEASURING 4824.54 SQ MTS.. WAS USED FOR THE R ESIDENTIAL PROJECT FLORIDA MINI IN FY 2005-06. OUT OF EIGHT PLOTS ADMEA SURING 5485 SQ MTS., WHICH WERE IN STOCK ON 01.04.2006, FOUR PLOT S ADMEASURING 2292 SQ. MTS. WERE SOLD DURING THE YEAR, DETA ILS OF WHICH ARE FORMING PART OF THE FINAL ACCOUNTS AND BALANCE 4 PLOTS ADMEASURING 3193 SQ. MTS. ARE IN STOCK AS ON 31.03.07. 8. DURING THE FINANCIAL YEAR 2005-06 THE ASSESSEE AOP H AD STARTED A HOUSING PROJECT ON PLOT OF LAND ADMEASURING 4824.54 SQ MTS. VIZ. 19 FLORIDA MINIS. WORKS AND PROFIT AND LOSS ACCOUNT OF THIS ACT IVITY IS SEPARATELY MAINTAINED. ALL EXPENSES DIRECT AND INDIRECT OF P ROMOTER AND BUILDER ACTIVITY FORMS PART OF WIP. ALL DETAILS RELATING TO THIS PROJECT WERE SUBMITTED DURING THE COURSE OF SCRUTINY PR OCEEDINGS FOR ASSESSMENT YEAR 2006-07 IN THE AFORESAID CASE BEFORE TH E INCOME TAX OFFICER, WARD 3(2), PUNE. 9. THE AOP HAS ADOPTED COMPLETED PROJECT METHOD OF AC COUNTING IN RESPECT OF PROMOTER AND BUILDER ACTIVITY. UNDER THIS METHO D REVENUE IS RECOGNIZED AFTER THE UNIT IS COMPLETED AND POSSESSION IS HANDED OVER TO THE PURCHASERS. THE PROJECT FLORIDA MINIS CONSIST S OF 6 BUILDINGS HAVING 96 FLATS. SALEABLE BUILT UP AREA OF ALL FLATS IS 63 0 SQ FT PER FLAT. TOTAL SALEABLE AREA IS 60480 SQ FT. THE PROJECT HAS STARTED DURING THE FINANCIAL YEAR 2005-06 AND THERE WERE NO SALE S DURING F.Y. 2005 - 06. THE PROJECT WAS COMPLETED IN F.Y. 2006 - 0 7. OF THESE 78 FLATS WERE SOLD IN F.Y . 2006 - 07 AND . BALANCE 18 FLATS WERE SOLD IN F.Y. 2007 - 08. 10. DETAILS OF SALES DURING THE FINANCIAL YEAR 2006-07 ARE FOR MING PART OF THE FINAL ACCOUNTS. 11. EXTRACT OF ACCOUNTS OF SECURED LOAN TAKEN FROM CITI BANK AGAINST ACCENT CAR BY THE ASSESSEE AOP FOR THE FINANCIA L YEAR 2006- 07 IS ENCLOSED. 12. EXTRACT OF UNSECURED LOANS FROM SHANIN DIAMOND CORPO RATION IS ENCLOSED. INTEREST HAS BEEN PAID @ 12% P.A. ON AVERAGE BALANCE TO THE TUNE OF RS. 8,93,242.18. NO INTEREST IS RECEIVED DURIN G THE YEAR. 13. DETAILS OF RENT PAID. SR.NO. NAME AMOUNT A. RENT FOR OFFICE AT KOREGAON PARK TO KOTHARI SEOLEKAR ASSOCIATES (RS. 20000 PER MONTH * 12 MONTHS) 2,40,000/ - TOTAL 2,40,000/ - 14. SUPERVISION CHARGES OF RS. 13,46,880.00 HAVE BEEN PAID T O DEEPAK BHIRUD DURING THE YEAR AFTER DEDUCTION OF TDS AS APPLICABLE. 15. EXTRACT OF CREDITORS WHERE BALANCES EXCEED RS. 1,00,0 00/- ARE ENCLOSED. 16. DETAILS OF PLOT SALES ARE ALREADY FORMING PART OF FINAL ACCOUNTS. 17.THERE IS ONLY ONE SITE OF THE ASSESSEE AOP AS STATE D ABOVE AND THE ADDRESS IS PLOT NO. ILL, FLORIDA ESTATE, KESHAV NAGAR, MU NDHWA, PUNE. 18.THE PROJECT FLORIDA MINIS CONSISTS OF 6 BUILDINGS HAVING 96 FLATS. SALEABLE BUILT UP AREA OF ALL FLATS IS 630 SQ FT PER FLAT. TOTAL SALEABLE AREA IS 60480 SQ FT. THE PROJECT WAS COMMENCED ON 10.11 .2005 AND WAS COMPLETED ON 20.03.2007. OF THESE 78 FLATS WERE SOLD IN F.Y. 2006 - 07 AND BALANCE 18 FLATS WERE SOLD IN F.Y. 2007 - 08 . THE CERTIFICATE OF THE ARCHITECT SPACE DESIGNERS SYNDICATE REG ARDING COMMENCEMENT AND COMPLETION OF THE PROJECT IS ENCLOSED. 20 19. COPY OF THE SANCTIONED PLAN OF THE PROJECT IS ENCLOSED. 20.THE HOUSING PROJECT IS ELIGIBLE FOR DEDUCTION U/S 80IB (1 0) OF THE INCOME TAX ACT, 1961 SINCE THE ASSESSEE AOP HAS COMPLIE D WITH ALL THE CONDITIONS LAID DOWN BY THE SECTION FOR THE HOUSING PROJECT I.E. A) THE ASSESSEE AOP HAS COMMENCED DEVELOPMENT AND CO NSTRUCTION OF THE HOUSING PROJECT BEFORE 31.03.06 AND SUCH HOUSING P ROJECT IS COMPLETED BEFORE 31.03.07 I.E. WITHIN 4 YEARS FROM THE END OF THE YEAR IN WHICH THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY. B) THE PROJECT IS ON THE SIZE OF PLOT OF LAND HAVING AREA OF MORE THAN 1 ACRE. C) THE BUILT UP AREA OF ALL RESIDENTIAL UNITS IN THIS HOUSING P ROJECT IS LESS THAN 1500 SQ FT. D) THE BUILT UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT E XCEED FIVE PERCENT OF THE AGGREGATE BUILT UP AREA OF THE HOUSING PROJECT OR TWO THOUSAND SQUARE FEET WHICHEVER IS LESS (INSERTED BY THE FINANCE ACT 2004 W.E.F. 1/4/2005) NO BUILDING OF COMMERCIAL USE IS SANCTIONED IN THE PROJECT 21. DETAILS OF LABOUR CHARGES PAID DURING THE YEAR EXCEE DING RS.1,00,000.00 IS AS UNDER: SR. NO. NAME OF CONTRACTORS NATURE OF WORK AMOUNT PAID 1. D. C. P. CONSTRUCTION CO. RCC WORK 2703477/ - 2. VIDYADHAR ANKALJI EXCAVATION CONTRACTOR 250260/ - 3. ASHOK WAGELA TILING 401075/ - 4. J. K. PISAL MASONARY LABOUR 967706/ - 5. MANSUKH CHAUHAN MASONARY LABOUR 1081261/ - 6. FRIENDS CEMANTATION WATER PROOFING CO. WATER PROOFING 208492/ - 7. MONOJ V. CHAUDHARY FABRICATION 2673827 - 8. PARASNATH VISHWAKARMA CARPENTRY 179725/ - 9. N. M. PEDNEKAR PLUMBING 406220/ - 10. RAJU PILLEY FABRICATION 127750/ - 11. R. K. RATHOD TILING 383772/ - 12. SHRI DATTA CONSTRUCTIONS ROAD WORK 1211099/ - 13. SURESH DABHALE POP WORK 306584/ - 14. SUSHANT DOLAS PAINTING 1011079/ - 15. VINAYAK ELECTRICALS ELECTRICALS 500000/ - 21 NOTE: LABOUR CHARGES HAVE BEEN BOOKED ON PAYMENT BASIS AS AND WHEN CERTIFIED BY THE SUPERVISOR. TDS AS APPLICABLE HAS BEEN DEDUCTED AND PAID. WE SHALL BE GLAD TO SUBMIT ANY FURTHER INFORMATION ON HEAR ING FROM YOUR HONOR. THANKING YOU IN ANTICIPATION. YOURS FAITHFULLY, SD/- L.R. AGARWAL CHARTERED ACCOUNTANT (AUTHORIZED REPRESENTATIVE FOR ASSESSEE) 7.6 IN THIS BACKGROUND, IT WAS SUBMITTED THAT ASSES SING OFFICER AT RELEVANT POINT OF TIME HAS ASKED FOR DET AILS AND DETAILS WERE SUBMITTED VIDE LETTER DATED 12-11-2009 (AS PLA CED ON PAGE 10 OF PAPER BOOK), SUBMISSIONS TO ASSESSING OFFICER VIDE LETTER DATED 19-11-2009 (AS DETAILED ON PAGE 15 AS DISCUSS ED ABOVE) AND ALSO A COPY OF WRITTEN SUBMISSION DATED 26-11-2 009 AND ASSESSING OFFICER HAS PASSED THE ORDER AFTER TAKING INTO CONSIDERATION ALL FACTS ON FACT AND LAW. 7.7 IN THIS BACKGROUND LD. AR FURTHER SUBMITTED THA T HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TARNETAR CORPORATION IN ITA NO.1241/PN/2000 HAS HELD AS UNDER : WE HAVE PERUSED THE DETAILED DISCUSSION OF THE CIT(APPEALS) AS WELL AS THE TRIBUNAL ON THE ISSUE. IN PARTICULAR, THE TRIBUNAL NOTED THAT THE CONSTRUCTIO N WAS COMPLETED IN 2006. APPLICATION FOR BU PERMISSION T O THE MUNICIPAL AUTHORITIES WAS FILED ON 15-02-2006 WHICH WAS REJECTED ON 1-07-06. SEVERAL RESIDENTIAL UNITS WER E OCCUPIED SINCE THE SAME WAS DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HAD DONE WITHOUT NECESSAR Y PERMISSION. THE ASSESSEE HAD ALSO PAID PENALTY AND GOT SUCH OCCUPATION REGULARISED. SEVERAL TENEMENTS WER E SOLD LONG BEFORE THE LAST DATE. IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE ASSESSEE HAD COMPLETED THE CONSTRUCTION WELL BEFORE 31 ST MARCH 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRUE THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNIC IPAL 22 AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EX PLANATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLET ION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF T HE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON RECORD, IN A G IVEN CASE, THE COURT MAY TAKE THE VIEW THAT MINOR DEVIAT ION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHIC H DEDUCTION WAS BEING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE ASSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TW O YEARS BEFORE THE FINAL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT THE SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF THE MATTER , GRANTING BENEFIT OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL. 7.8 IT WAS FURTHER OBSERVED THAT AS PER EXPLANATIO N A CLAUSE (C) TO SECTION 80IB(10) LINK COMPLETION ON C ONSTRUCTION OF BU PERMISSION BEING GRANTED BY LOCAL AUTHORITY. HO WEVER, EVERY CONDITION OF STATUTE CAN BE SEEN AS MANDATORY IF SU BSTANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON RECORD IN A GI VEN CASE THE COURT MAY TAKE A VIEW THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WAS MA DE AVAILABLE. 7.9 THE LD. AR ALSO DREW THE ATTENTION OF THE BENC H TO THE ORDER OF ITAT PUNE BENCH IN ITA NO.1015 AND OTH ERS IN RUNWAL MULTI HOUSING PVT. LTD. VS. ACIT WHEREIN IT HAS BEEN HELD AS UNDER: 20. SO FAR AS THE FIRST OBJECTION OF THE REVENUE T HAT COMPLETION CERTIFICATE FROM PMC HAS NOT BEEN OBTAIN ED BY THE ASSESSEE BEFORE 31-03-2008 WE FIND THE ASSESSEE THROUGH HIS ARCHITECT VIDE APPLICATION DATED 22-01- 2004 HAS APPLIED TO PMC FOR OCCUPANCY CERTIFICATE. (PAGE 119 OF THE PAPER BOOK). THE SUBMISSION OF THE LEARNED COU NSEL FOR THE ASSESSEE THAT THE PMC HAS NOT YET REJECTED THE SAID APPLICATION TILL DATE COULD NOT BE CONTROVERTED BY THE 23 REVENUE. THE FURTHER SUBMISSION OF THE LEARNED COU NSEL FOR THE ASSESSEE THAT ALL THE FLAT OWNERS/ROW HOUSE OWNERS HAVE BEEN GIVEN POSSESSION BETWEEN 26-10-2002 TO 15 -01- 2007, I.E.PRIOR TO 31-03-2008 COULD NOT BE CONTROVE RTED BY THE LEARNED DR (PAGE 55 TO 63 OF THE PAPER BOOK). THE LEARNED DR ALSO COULD NOT CONTROVERT THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT PMC HAS START ED LEVYING MUNICIPAL TAXES AND THE ELECTRICITY METERS ARE IN THE NAME OF THE FLAT OWNERS WHO HAVE STARTED PAYING ELECTRICITY BILLS. 20.1 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF CITY DEVELOPMENT CORPORATION VS. ACIT ITA NO. 57 AND 1287/PN/2010 ORDER DATED 27-09-2012 HAS HELD AS UND ER : 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. QUITE CLEARLY, THE DISPUTE IS WITH REG ARD TO THE COMPLETION CERTIFICATE OF BUILDING 'E' HAVIN G BEEN ISSUED BY THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL CORPORATION, ON 5-5-2008. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) REQUIRES THAT THE CONSTRUCTION OF THE PROJECT IN QUESTION IS TO BE COMPLETED ON OR BEFORE 31-3-2008. CLAUSE (II) OF EXPLANATION BELOW SECTION 80-IB(10)(A) PRESCRIBES THAT THE DATE OF COMPLETION OF CONSTRUCTION OF HOUS ING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. IN THE PR ESENT CASE, IT HAS BEEN ISSUED ON 5-5-2008 AND HENCE THE CASE SET UP BY THE REVENUE THAT THE COMPLETION IS BEYOND THE MANDATED DATE OF 31-3-2008. IN THIS BACKGROUND, WE FIND THAT THERE IS NO DISPUTE THAT T HE ASSESSEE APPLIED FOR OBTAINING THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING 'E' ON 12-3-2008 . FROM THE DISCUSSION MADE BY THE ASSESSING OFFICER I N THE ASSESSMENT ORDER, WHEREIN THE FACTUAL ASSERTION S OF THE ASSESSEE HAVE BEEN REPRODUCED, IT IS QUITE EVIDENT THAT THE ASSESSEE ASSERTED THAT BEFORE 31-3 - 2008, THE CONSTRUCTION OF BUILDING WAS COMPLETE IN ALL RESPECTS; THAT ELECTRICAL CONNECTION WAS PROVID ED TO EACH FLAT OWNER; ROAD WAS COMPLETE; WATER AND DRAINAGE CONNECTION WAS AVAILABLE; SEWERAGE SYSTEM WAS OPERATING; CLUB HOUSE WAS FUNCTIONAL; ETC. THE ASSESSEE ALSO POINTED OUT THAT THE LOCAL AUTHORITY HAD ALSO INITIATED PROPERTY TAX ASSESSMENTS FOR EACH OF THE FLATS AND THE SAME DEMONSTRATED THAT ALL THE FL ATS IN THE BUILDING WERE COMPLETE. IN FACT, IN PARA 6.9 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER NOTICED THAT 'THE FACTS THAT THE FLATS WERE COMPLETED AND POSSESSION GIVEN WILL NOT COME TO THE RESCUE OF THE 24 ASSESSEE'. THE AFORESAID FINDING OF THE ASSESSING OFFICER SUPPORTS THE ASSERTION MADE BY THE ASSESSEE THAT FACTUALLY SPEAKING CONSTRUCTION OF FLATS IN BUILDING 'E' WAS ALSO COMPLETE AND POSSESSION HANDED OVER TO THE ACTUAL USER/CUSTOMERS PRIOR TO 31-3-2008. PERTINENTLY, ON THE BASIS OF THE ARCHITE CT'S CERTIFICATE CONFIRMING COMPLETION OF CONSTRUCTION O F BUILDING, THE ASSESSEE APPLIED FOR THE COMPLETION CERTIFICATE TO THE PUNE MUNICIPAL CORPORATION ON 12 - 3-2008. IT HAS BEEN POINTED OUT BEFORE US THAT THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL CORPORATION DID NOT RAISE ANY OBJECTION WITH REGARD TO ASSESSEE'S APPLICATION AND THE CERTIFICATE FOR BUILDING 'E' WA S THEREAFTER ISSUED ON 5-5-2008. THE MOOT QUESTION IS AS TO WHETHER IN SUCH A SITUATION CAN IT BE SAID TH AT THE ASSESSEE'S PROJECT DID NOT COMPLY WITH THE CONDITION PRESCRIBED IN SUB-CLAUSE (I) OF CLAUSE (A ) TO SECTION 80-IB(10) OF THE ACT WHEREBY THE CONSTRUCTI ON WAS TO BE COMPLETED ON OR BEFORE 31-3-2008. SOMEWHAT SIMILAR SITUATION WAS CONSIDERED BY OUR CO-ORDINATE BENCH IN THE CASE OF HINDUSTAN SAMUTHA AWAS LTD. (SUPRA) WHEREIN ALSO ON THE STRENGTH OF ARCHITECT'S CERTIFICATE, AN APPLICATION FOR OBTAINI NG COMPLETION CERTIFICATE WAS MOVED TO THE LOCAL AUTHORITY ON 25-2-2008 BUT IN ACTUALITY THE COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITY ON 10-10-2008. THE TRIBUNAL NOTICED THAT THE DELAY IN ISSUING COMPLETION CERTIFICATE WAS NOT ATTRIBUTABLE TO THE ASSESSEE AS NO OBJECTIONS WERE RAISED BY THE LOCAL AUTHORITY. THE TRIBUNAL AFTER CONSIDERING ITS EARLIER DECISIONS IN THE CASE OF M/ S. SATISH BOHRA & ASSOCIATES VS. ACIT IN ITA NO. 713 AND 714/PN/2010 FOR A.Y. 2004-05 AND 2005-06 DATED 7-1-2011; M/S. D.K. CONSTRUCTIONS VS. ITO ITA NO. 243/PN/2010 FOR A.Y. 2006-07; DATED 6-12-2010 AND SANGHVI AND DOSHI ENTERPRISES VS. ITO AND OTHERS ITA NO. 259 TO 263/MDS/2010 DATED 19-5- 2011 FOR A.Y. 2005-06 AND 2006-07 (TM) HAS CONCLUDED AS FOLLOWS: 'FROM THE ABOVE, ONCE THIS IS CLEAR THAT THE DATE THAT APPEARS ON THE ARCHITECT'S COMPLETION CERTIFICATE FILED BEFORE THE LOCAL AUTHO RITY IS RELEVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25- 3-2008 AND THE ASSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMATING THE COMPLET ION OF THE PROJECT. THE SAID CERTIFICATE/INTIMATION WAS ACCEPTED BY THE LOCAL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORITY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF T HE BUILDING OR THE COMPLETION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINI NG 25 THE COMPLETION CERTIFICATE ON 10-10-2008 IS CERTAIN LY NOT ATTRIBUTABLE TO THE ASSESSEE AND OBTAINING THE SAID CERTIFICATE BEFORE 31-3-2008 IS BEYOND THE CONTROL OF THE ASSESSEE. ASSESSEE'S JOB INCLUDES TH E COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHORITY BY WAY OF FILING THE REQUISITE FORM S TOGETHER WITH THE COMPLETION CERTIFICATE GIVEN BY T HE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE . HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJECTED T O THE SAID APPLICATION OF THE ASSESSEE AND THE ARCHIT ECT BY RAISING ANY OBJECTIONS FOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10-10-2008. THEREFORE, THE DELAY IN GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE. THEREFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFAULTER ON THIS ACCO UNT AND THUS, THE AO HAS ERRED IN DENYING THE DEDUCTION U/S 80-IB(10) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED' 13. THE AFORESAID DECISION OF THE TRIBUNAL IS CLEAR LY APPLICABLE TO THE FACTS OF THE PRESENT CASE ALSO. I N THE PRESENT CASE, THE COMPLETION CERTIFICATE WAS APPLIE D FOR BEFORE 31-3-2008 I.E. ON 12-3-2008. IT IS UNDISPUTABLE THAT THE APPLICATION OF THE ASSESSEE H AS BEEN APPROVED BY THE LOCAL AUTHORITY WITHOUT RAISIN G ANY AMENDMENT OR OBJECTION, AS HAS BEEN ASSERTED BY THE ASSESSEE ALL ALONG AND THE DELAYED ISSUANCE OF THE COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY O N 5- 5-2008, ALBEIT AFTER THE MANDATED DATE OF 31-3-2008 CANNOT BE ATTRIBUTED TO THE ASSESSEE. IN THIS BACKGROUND OF THE MATTER, WE THEREFORE, FIND AMPLE FORCE IN THE PLEA OF THE ASSESSEE THAT DENIAL OF DEDUCTION U/S 80-IB(10) ON SUCH SCORE IS UNCALLED FOR. IN CONCLUSION THEREFORE, IN THE INSTANT FACTUA L BACKGROUND, WE HOLD THAT THE ASSESSEE HAS COMPLIED WITH THE CONDITION OF COMPLETING THE CONSTRUCTION O F THE PROJECT WITHIN THE MANDATED DATE OF 31-3- 2008 EVEN WITH REGARD TO BUILDING 'E', FOLLOWING THE PAR ITY OF THE REASONING LID DOWN IN THE CASE OF HINDUSTAN SAMUTHA AWAS LTD. (SUPRA). . 14. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(1 0) OF THE ACT REQUIRES THAT THE UNDERTAKING, DEVELOPING A ND BUILDING A HOUSING PROJECT 'COMPLETES SUCH CONSTRUCTION' OR BEFORE 31-3-2008. IN THE PRESENT CASE, ASSESSEE HAS FACTUALLY ASSERTED RIGHT FROM TH E STAGE OF ASSESSMENT PROCEEDINGS, THAT THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE IN ALL 26 RESPECTS AS PER SANCTIONED PLAN AND ALL THE FLATS W ERE HANDED OVER TO THE ACTUAL USERS/CUSTOMERS PRIOR TO 31-3-2008. IN THE BACKGROUND OF THE AFORESAID FACTUAL POSITION WHICH HAS REMAINED UNCONTROVERTED, IN OUR VIEW, ON A PLAIN READING OF SUB-CLAUSE (I) O F CLAUSE (A) TO SECTION 80-IB(10) THE CONDITION PRESCRIBED THEREIN IS FULFILLED., INASMUCH AS THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE BEFORE 31 - 3-2008. HOWEVER, ON THE READING OF CLAUSE (II) OF T HE EXPLANATION BELOW SEC. 80-IB(10)(A) OF THE ACT, IT EMERGES THAT THE COMPLETION OF CONSTRUCTION OF A HOUSING PROJECT IS TO BE TAKEN TO BE THE DATE ON WH ICH COMPLETION CERTIFICATE IS ISSUED BY THE LOCAL AUTHO RITY, WHICH IN THE PRESENT CASE IS ISSUED ON 5-5-2008 I.E . BEYOND THE STIPULATED DATE OF 31-3-2008. THE MOOT QUESTION IS IN CASE THE CONDITION OF COMPLETION CONSTRUCTION CONTAINED IN THE SUBSTANTIVE SECTION 8 0- 0IB(10)(A)(I) IS FACTUALLY FOUND TO BE COMPLIED WIT H, CAN THE CONTENTS OF THE EXPLANATION CLAUSE (II) THEREOF, ALTER THE SITUATION? CAN AN EXPLANATION APPENDED TO A SECTION, ENLARGE THE SCOPE OF THE MAI N SECTION SO AS TO MAKE IT MORE ONEROUS FOR A TAX- PAYER? BE THAT AS IT MAY, WE DO NOT DWELL ON THIS ASPECT ANY FURTHER, AS THE ASSESSEE HAS BEEN FOUND TO BE ELIGIBLE FOR NECESSARY RELIEF BECAUSE THE CONDIT ION PRESCRIBED IN SECTION 80-IB(10)(A)(I) OF THE ACT HA S BEEN COMPLIED WITH IN VIEW OF THE STATED PRECEDENTS . WE THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) ON THIS ASPECT AND HOLD THAT THE ASSESSEE CANNOT BE DENIED THE CLAIM OF DEDUCTION U/S 80-IB(10) ON THE STRENGT H OF NON-ISSUANCE OF THE COMPLETION CERTIFICATE FOR BUILDING 'E' BY THE PUNE MUNICIPAL CORPORATION BEFO RE 31-3-2008, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 20.2 WE FIND THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TARNETAR CORPORATION (SUPRA) HAS HELD AS UN DER : WITH RESPECT TO THE SECOND CONTENTION, WE MAY RECORD THAT THE CONTENTION OF THE REVENUE IS THAT T HE ASSESSEE DID NOT COMPLETE THE HOUSING PROJECT WITHI N THE STATUTORY TIME FRAME. UNDER SUB-CLAUSE (I) OF CLAUSE (A) OF SECTION 80IB(10), THE ASSESSEE SINCE HAD GOT APPROVAL FOR THE HOUSING PROJECTS FROM THE LOCA L AUTHORITY BEFORE IST APRIL 2004 WAS REQUIRED TO COMPLETE THE CONSTRUCTION LATEST BY 31 ST MARCH 2008. RELYING ON EXPLANATION (II) TO CLAUSE (I), REVENUE CONTENDS THAT SINCE BU PERMISSION WAS GRANTED AFTER MARCH 2008, THE CONSTRUCTION MUST BE DEEMED TO 27 HAVE BEEN COMPLETED AFTER SUCH DATE. EXPLANATION ( II) READS AS UNDER : (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. CIT (APPEALS) AS WELL AS THE TRIBUNAL AFTER DETAILE D DISCUSSION CAME TO THE CONCLUSION THAT SUCH REQUIREMENT WAS NOT MANDATORY IN NATURE. IN THE PRESENT CASE, THE ASSESSEE HAD COMPLETED THE CONSTRUCTION WELL BEFORE THE LAST DATE, NAMELY 31 ST MARCH 2008 AND HAD ALSO SOLD SEVERAL UNITS WHICH WAS COMPLETED AND ACTUALLY OCCUPIED, AND IT ALSO APPLIED FOR BU PERMISSION TO THE LOCAL AUTHORITY. THE LOCAL AUTHORITY, HOWEVER, FOR TECHNICAL REASONS, AT ONE STAGE REJECTED SUCH APPLICATION IN THE YEAR 2006 AN D THEREAFTER UPON REVISED EFFORTS FROM THE ASSESSEE GRANTED THE SAME BY ORDER DATED 19 TH MARCH 2009. WE HAVE PERUSED THE DETAILED DISCUSSION OF THE CIT(APPEALS) AS WELL AS THE TRIBUNAL ON THE ISSUE. IN PARTICULAR, THE TRIBUNAL NOTED THAT THE CONSTRUCTIO N WAS COMPLETED IN 2006. APPLICATION FOR BU PERMISSION TO THE MUNICIPAL AUTHORITIES WAS FILED O N 15-02-2006 WHICH WAS REJECTED ON 1-07-06. SEVERAL RESIDENTIAL UNITS WERE OCCUPIED SINCE THE SAME WAS DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HAD DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HAD ALSO PAID PENALTY AND GOT SUCH OCCUPATION REGULARISED. SEVERAL TENEMENTS WERE SOL D LONG BEFORE THE LAST DATE. IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE ASSESSEE HAD COMPLETED THE CONSTRUCTION WELL BEFORE 31 ST MARCH 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRU E THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TR UE THAT EXPLANATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE THERE OF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COUR T MAY TAKE THE VIEW THAT MINOR DEVIATION THEREOF WOUL D NOT VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WA S BEING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE ASSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION 28 TWO YEARS BEFORE THE FINAL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT THE SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF THE MATTER, GRANTING BENEFIT OF DEDUCT ION CANNOT BE HELD TO BE ILLEGAL. IN THE RESULT, THE TAX APPEAL IS DISMISSED. 20.3. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF HINDUSTAN SAMUHA AWAS LTD. VS. ITO VIDE ITA NOS 945 TO 950/PN/2010 ORDER DATED 30-08-2011 HAS HELD AS UNDE R : 7. WE HAVE CONSIDERED THE ABOVE VIEW POINTS OF THE PARTIES IN DISPUTED. WE FIND THAT IT IS A FACT THAT THE ASSESSEE THROUGH ITS ARCHITECT HAD FILED APPLICATIO N WITH THE AMC FOR ISSUANCE OF OCCUPANCY CERTIFICATE ON 25-3-2008. REQUISITE FEE WAS ALSO PAID BY THE ASSESSEE IN THIS REGARD. AMC DID NOT RAISE ANY OBJECTION TO THE SAID COMPLETION CERTIFICATE OF THE ARCHITECT. THE OCCUPANCY CERTIFICATE DT.10-10-2008 HAS BEEN ISSUED BY THE AMC ONLY ON THE BASIS OF THE SAID APPLICATION DT.25-3-2008. IT IS ALSO AN UNDISPUTED FACT THAT ISSUANCE OF OCCUPANCY CERTIFICATE IS THE PREROGATIVE OF THE LOCAL AUTHORI TY I.E. AMC AND IN THIS REGARD, THE ASSESSEE HAS NO CONTROL AND IT IS BEYOND THE POWER OF THE ASSESSEE TO MAKE THE AMC ISSUE THE SAID COMPLETION/OCCUPANCY CERTIFICATE BEFORE 31.3.2008. WHAT WAS UNDER THE POWER AND CONTROL OF THE ASSESSEE WAS ONLY TO MOVE THE AMC FOR COMPLETION CERTIFICATE FULFILLING ALL T HE REQUIREMENTS WITH THE AMC FOR ISSUANCE OF OCCUPANCY CERTIFICATE, WHICH THE ASSESSEE HAS DONE IN THE PRESENT CASE. THUS, THE DELAY IN ISSUING THE OCCUPANCY CERTIFICATE CANNOT BE ATTRIBUTED ON THE PART OF THE ASSESSEE TO DENY THE CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT ON THE BASIS THAT THE PROJE CT WAS NOT COMPLETED BY 31-3-2008, ESPECIALLY WHEN THERE IS NO OBJECTION RAISED BY THE AMC REGARDING DEVIATION IN THE CONSTRUCTION OF THE PROJECT APPROV ED BY THE AMC. 8. WE HAVE GONE THROUGH THE ORDERS CITED BY THE ASSESSEES REPRESENTATIVE AND FIND RELEVANT PARAGRAPHS ARE REQUIRED TO BE EXTRACTED FOR COMPLETION OF THE ORDER. THEY ARE AS FOLLOWS. 29 A. EXTRACT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. SATISH BORA & ASSOCIATES VIDE ITA NOS . 713 & 714/PN/2010 19. . 1. IN THE CASE OF PMC, THE COMPLETION CERTIFICATE I N PRESCRIBED FORM ISSUED BY THE LICENSED ARCHITECT ET C. WHO HAS SUPERVISED THE CONSTRUCTION IS FURNISHED WITH FOUR SETS OF COMPLETION PLAN UNDER RULE 7.6 OF THE DC RULES OF THE PMC. THEREAFTER PMC IS REQUIRED TO RETURN ONE OF THE SETS DULY CERTIFIED A S COMPLETION PLAN TO THE OWNER ALONG WITH THE ISSUE O F FULL OCCUPANCY CERTIFICATE AFTER INSPECTION OF THE WORK UNDER RULE 7.7 OF THE DC RULES. SINCE EXPLATION (II) TO SECTION 80IB(10)(A) OF THE I.T. A CT REQUIRES COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY TO BE TAKEN AS THE DATE OF COMPLETION OF THE CONSTRUCTION, A GENERAL UNDERSTANDING IN OUR VIEW I S THAT A COMPLETION CERTIFICATE WHICH IS ISSUED BY T HE LOCAL AUTHORITY AFTER CONDUCTING INSPECTIONS OF CONSTRUCTION BY IT. IN CASE OF PMC, IT IS ONLY OCCUPANCY CERTIFICATE WHICH IS ISSUED ALONGWITH CERTIFIED COMPLETION PLAN AFTER INSPECTION OF THE CONSTRUCTION BY IT, WE HAVE TREATED THE DATE OF ISSUANCE OF SUCH OCCUPANCY CERTIFICATE ALONGWITH CERTIFIED COMPLETION PLAN AS THE DATE OF COMPLETION CERTIFICATE OF THE CONSTRUCTION FOR THE REQUIREMENT OF EXPLANATION (II) TO SECTION 80IB(10)(A) OF THE I.T. ACT. 2. SINCE INFACT PMC DO NOT ISSUE OCCUPANCY CERTIFICATE GENERALLY IN TIME AND WITH THIS UNDERSTANDING THE LEGISLATURE HAVE ALSO INTRODUCED A DEEMING PROVISION OF 21 DAYS TO PUT CONSTRAINT UPON PMC, WE AFTER DETAILED DELIBERATION IN PRECEDI GN PARAGRAPHS HAVE COME TO A CONCLUSION THAT IN CASE O F SMALL OBJECTIONS OF PMC RAISED AFTER EXPIRY OF DEEMING PERIOD OF 21 DAYS UNDER RULE 7.7 OF DC RULES UNDER PMC, THE DATE WHEN THE APPLICANT ACQUIRED DEEMING SANCTION WILL BE TREATED AS THE DA TE OF COMPLETION (OCCUPANCY) CERTIFICATE TO MEET OUT T HE REQUIREMENT OF EXPLANATION (II) TO SECTION 80IB (10 )(A) OF THE ACT. WE HAVE ALREADY DISCUSSED HEREINABOVE WHAT WOULD BE THE SMALL OBJECTIONS. IN BRIEF THOSE OBJECTIONS WHICH DO NOT AFFECT THE MAIN PROJECT AND ARE GENERALLY TEMPORARY CONSTRUCTIONS. 20. WE THUS WHILE SETTING ASIDE ORDERS OF THE AUTHORITIES BELOW DIRECT THE A.O TO ALLOW THE CLAIM ED DEDUCTION U/S. 80IB(10) OF THE I.T. ACT 1961 IN THE ASSESSMENT YEARS UNDER CONSIDERATION TREATING THE REQUIRED DATE OF COMPLETION OF CONSTRUCTION OF THE 30 HOUSING PROJECT AS THE DATE WHEN ABOVE DISCUSSED DEEMING PROVISION PERIOD OF 21 DAYS EXPIRED I.E. 20.11.20. B. EXTRACT FROM THE DECISION OF THE TRIBUNAL IN TH E CASE OF SANGHVI & DOSHI ENTERPRISE VIDE ITA NO. 259 TO 263/MDS/2010 24. NEXT OBJECTION OF THE ASSESSING OFFICER IS THAT THE PROJECT HAD TO BE COMPLETED ON OR BEFORE 31.03.2008 AND SINCE THE ASSESSEE DID NOT FURNISH THE COMPLETION CERTIFICATE, THE ASSESSEE IS NOT ELI GIBLE FOR DEDUCTION. THE OBJECTION IS TO THE EFFECT THAT THE COMPLETION CERTIFICATE FROM CMDA IS DATED 13.6.2008 , I.E. THREE MONTHS AFTER THE DUE DATE FOR COMPLETING THE PROJECT. IN THIS CONNECTION, IT HAS TO BE NOT ED THAT THE COMPLETION CERTIFICATE IS TO BE ISSUED BY THE LOCAL AUTHORITY. THE QUESTION IS, WHETHER CMDA CAN BE CONSIDERED TO BE A LOCAL AUTHORITY OR NOT. THIS ISSUE HAD COME UP BEFORE THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF JAIN HOUSING & CONSTRUCTIONS LTD. IN ITA NO.1369/MDS/2009 DATED 5.2.2010. IN THAT CASE, ASSESSEE WAS DENIED DEDUCTION IN THE ABSENCE OF COMPLETION CERTIFICATE BY THE CMDA BUT COMPLETION CERTIFICATE ISSUED BY THE CORPORATION OF CHENNAI WAS PLACED ON RECORD. THE TRIBUNAL IN PARAGRAPH 3.5 OF ITS ORDER STATED THAT THE PROJECT LAYOUT PLAN MAY BE REQUIRED TO BE APPROVED BY THE CMDA BUT AS FAR AS THE CONSTRUCTION OF THE BUILDING IS CONCERNED, THE LOCAL AUTHORITY, I.E. TH E CORPORATION OF CHENNAI IS THE APPROPRIATE AUTHORITY TO REGULATE THE CONSTRUCTION AS PER THE BUILDING BY E- LAWS AND SANCTION PLANS. WHEN IT IS NOT DISPUTED THAT THE CORPORATION IS THE LOCAL AUTHORITY, CERTIF ICATE ISSUED BY IT CANNOT BE DISREGARDED. THE ASSESSEE H AS PLACED ON RECORD THE COMPLETION CERTIFICATE ISSUED BY THE CORPORATION BY WAY OF ADDITIONAL EVIDENCE. SIN CE THE ALLOWABILITY OF THE ENTIRE DEDUCTION DEPENDS ON ALL THE CONDITIONS BEING FULFILLED DEDUCTION DEPENDS ON ALL THE CONDITIONS BEING FULFILLED, WE ADMIT THIS ADDITIONAL EVIDENCE. THE CERTIFICATE CLEARLY MENTI ONS THAT THE BUILDING WAS INSPECTED ON 23.11.2007 AND THAT IT IS FOUND TO BE SATISFIED THE BUILDING PERMI T CONDITIONS. WE MAY ALSO MENTIONS THAT THE ROLE OF CMDA IS QUITE DISTINCT FROM THAT OF THE CORPORATION . CMDA LOOKS AT THE PLANS FROM THE PERSPECTIVE OF THE DEVELOPMENT AND URBANISATION OF THE CITY AS A WHOLE . ON THE OTHER HAND, THE ROLE OF THE CORPORATION WHI LE ISSUING COMPLETION CERTIFICATE IS TO SEE THAT THE U NIT IS HABITABLE IN ALL RESPECTS LIKE CIVIC AMENITIES AND SO ON. EVEN FOR THE SAKE OF ARGUMENT IF THE CMDA 31 CERTIFICATE IS TO BE CONSIDERED, THEN IN THAT CASE, THE ASSESSEE DID APPLY FOR THE COMPLETION CERTIFICATE T O CMDA CERTIFICATE ON 13.3.2006. IT IS A DIFFERENT MATTER THAT CMDA RAISED CERTAIN OBJECTIONS AND THE MATTER WENT UPTO THE HONBLE HIGH COURT ALSO. HOWEVER, THE FACT REMAINS THAT THE PROJECT WAS COMPLETED MUCH BEFORE THE DUE DATE, MAY BE WITH CERTAIN DEFECTS. ALSO, IT HAS TO BE NOTED THAT THE CMDA CERTIFICATE IS DATED 13.6.2008, I.E. ONLY TWO MONTHS AND THIRTEEN DAYS BEYOND THE DUE DATE. IT I S INCONCEIVABLE THAT THE TYPE OF DEFECTS WHICH WERE POINTED OUT BY THE CMDA COULD HAVE BEEN RECTIFIED I N SUCH A SHORT PERIOD. BE THAT AS IT MAY, THE HONBL E HIGH COURT ALSO RATIFIED THE DEVIATIONS AND DIRECTE D THE CMDA TO CONSIDER THE EXPLANATION OF THE ASSESSEE. ALL THESE FACTS GO TO POINT THAT THE PR OJECT WAS INDEED COMPLETED BEFORE THE 31.3.2008. THUS, THIS GROUND ALSO HAS NO FORCE TO DENY THE ASSESSEE THE IMPUGNED DEDUCTION. C EXTRACT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. D.K.CONSTRUCTION VIDE ITA 243/IND/2010 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW AND RELEVANT MATERIAL PLACED ON RECORD TOWARD S WHICH OUR ATTENTION WAS INVITED DURING THE COURSE O F HEARING BY THE LD. AUTHORIZED REPRESENTATIVE AND TH E LD. SENIOR D.R. PROVISIONS OF SECTION 80IB ALLOWS CLAIM FOR DEDUCTION IN RESPECT OF HOUSING PROJECT, WHICH HAS BEEN APPROVED PRIOR TO 1.4.2004 AND ALSO COMPLETED BEFORE 31.3.2008. DURING THE COURSE OF ASSESSMENT WITH REGARD TO ASSESSEES CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF ITS D.K.HONEY HOMES PROJECT, THE AO HAS ASKED THE ASSESSEE TO FURNISH THE CERTIFICATE OF COMPLETION OF THIS PROJE CT M/S. D.K.HONEY HOMES. THE AO ALSO DIRECTLY CALLED INFORMATION FROM THE LOCAL AUTHORITIES BY ISSUING SUMMONS U/S.133(6) AND A LETTER WAS ISSUED BY THE COMPETENT AUTHORITY DATED 11 TH NOVEMBER, 2008, CONFIRMING THAT NO COMPLETION CERTIFICATE HAS BEEN ISSUED BY THIS OFFICE. ACCORDINGLY, THE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB WAS DECLINED. SECTIO N 80IB CLEARLY DEFINES THE DATE OF COMPLETION AS DAT E OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJEC T SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS I SSUED BY THE LOCAL AUTHORITIES, IT MEANS LOCAL AUTHORITI ES IS COMPETENT TO CERTIFY THE DATE OF COMPLETION OF HOUSING PROJECT. THE DATE OF ISSUE OF SUCH LETTER BY THE LOCAL AUTHORITIES IS NOT SO CRUCIAL BUT IT SHOU LD 32 HAVE CLEARLY MENTIONED THE DATE OF COMPLETION OF PROJECT. WHEN THE PROJECT IS COMPLETED ON 31.3.200 8 AND THE ASSESSEE HAS INFORMED REGARDING SUCH COMPLETION, THE LOCAL AUTHORITIES MAY TAKE ITS OWN TIME FOR ISSUE OF CERTIFICATE, WHICH MAY BE EVEN AF TER 6-7 MONTHS, BUT THE LETTER SO ISSUED BY THE LOCAL AUTHORITIES SHOULD CLEARLY MENTION THE DATE OF COMPLETION OF SUCH PROJECT. MERELY BECAUSE SUCH CERTIFICATE IS ISSUED AFTER GAP OF 8-9 MONTHS OR EV EN ONE YEAR, WILL NOT ADVERSELY AFFECT THE ASSESSEE IF IT HAS MENTIONED CLEARLY THE DATE OF COMPLETION OF PROJECT PRIOR TO 31.3.2008. ONCE THE LETTER FOR COMPLETION OF PROJECT IS GIVEN BY THE ASSESSEE TO T HE LOCAL AUTHORITY, IT IS THE DUTY OF THE LOCAL AUTHOR ITY TO VERIFY PHYSICALLY THE PROJECTS STATED TO BE COMPLETED FROM ITS OWN PARAMETERS. THIS PROCESS MAY TAKE TIME AND, THEREFORE, THE DATE OF ISSUE OF LETTER IS NOT SO CRUCIAL TO DETERMINE THE ASSESSEE S ELIGIBILITY FOR CLAIM OF DEDUCTION AS PER EXPLANATI ON (II) OF SECTION 80IB(10)(A) OF THE INCOME-TAX ACT, 1961. WHAT IS CRUCIAL IS DATE MENTIONED IN THE LETTER SO ISSUED CERTIFYING COMPLETION OF THE PROJECT. THUS, THE DATE OF ISSUE OF LETTER IS NOT IMPORTANT, BUT THE D ATE MENTIONED IN THE LETTER CERTIFYING COMPLETION OF PROJECT IS IMPORTANT. WE, THEREFORE, DO NOT FIND MAY MERIT IN THE OBSERVATION OF THE LOWER AUTHORITIES T O THE EFFECT THAT THE DATE OF COMPLETION SHALL BE TAK EN THE DATE ON WHICH CERTIFICATE IS PHYSICALLY ISSUED BY THE LOCAL AUTHORITIES. 9. FROM THE ABOVE, ONE THING IS CLEAR THAT THE DATE THAT APPEAR ON THE ARCHITECTS COMPLETION CERTIFICA TE FILED BEFORE THE LOCAL AUTHORITY IS A RELEVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25-3-2008 AND TH E ASSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMATING THE COMPLETION OF THE PROJEC T. THE SAID CERTIFICATE/ INTIMATION WAS ACCEPTED BY TH E LOCAL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORITY HAS NOT RAISED ANY QUER IES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10-10-2008 IS CERTAINLY NOT ATTRIBUT ABLE TO THE ASSESSEE AND OBTAINING THE SAID CERTIFICATE BEFORE 31.3.2008 IS BEYOND THE CONTROL OF THE ASSESSEE. ASSESSEES JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHORITY B Y WAY OF FILING THE REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIFICATE GIVEN BY THE ARCHITECT, THE 33 SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOC AL AUTHORITY HAS NEITHER OBJECTED TO THE SAID APPLICAT ION OF THE ASSESSEE AND THE ARCHITECT BY RAISING ANY OBJECTIONS NOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10.10.2008. THEREFORE, THE DELAY I N GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE. THEREFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFAULTER ON THIS ACCO UNT AND THUS, THE AO HAS ERRED IN DENYING THE DEDUCTION U/S 80IA(10) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED . 20.4. IN VIEW OF THE ABOVE DECISIONS WE ARE OF THE CONSIDERED OPINION THAT SINCE THE ASSESSEE HAS DONE WHATEVER POSSIBLE ON HIS PART, I.E. DULY APPLIED TO PMC FOR ISSUE OF COMPLETION CERTIFICATE, HANDED OVER POSSES SION OF THE FLATS/ROW HOUSES TO THE RESPECTIVE BUYERS, PMC HAS STARTED LEVYING MUNICIPAL TAXES AND ELECTRICITY BIL LS PAID BY RESPECTIVE OWNERS, THEREFORE, DEDUCTION U/S.80IB(10 ) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE CANNO T BE DENIED TO THE ASSESSEE FOR NON-RECEIPT OF COMPLETIO N CERTIFICATE FROM PMC BEFORE 31-03-2008 WHICH WAS BE YOND THE CONTROL OF THE ASSESSEE. THIS VIEW OF OURS IS FORTIFIED BY OUR DECISION IN THE CASE OF M/S. RAMSUKH PROPERTIES VS. DCIT VIDE ITA NO.84/PN/2011 ORDER DATED 25-07-2012 FOR A.Y. 2007-08 (WHEREIN BOTH OF US ARE PARTIES) WHERE IN IT HAS BEEN HELD AS UNDER: 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE IS A FIRM ENGAGED IN BUSINESS OF BUILDER AND PROMOTER. THE ISSUE BEFORE US IS REGARDING ALLOWABILITY OF DEDUCT ION U/S.80IB(10) OF THE ACT ON PARTIALLY COMPLETE PROJE CT. THE ASSESSING OFFICER HAS DENIED THE DEDUCTION ON THE GROUND THAT PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED TIME. THERE IS NO DISPUTE WITH REGARD T O OTHER CONDITIONS LAID U/S.80IB(10) OF THE ACT, I.E. , COMMENCEMENT OF PROJECT, AREA OF LAND OF PROJECT, E TC. ASSESSEES HOUSING PROJECT WAS APPROVED VIDE COMMENCEMENT CERTIFICATE NO.3837/04 DATED 13.01.2005 OUT OF WHICH COMPLETION CERTIFICATE WAS OBTAINED AND FURNISHED BEFORE THE ASSESSING OFFICER FOR 173 OUT OF 205 FLATS. SAME WAS REJECTED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE REQUEST FOR GRANTING WHOLE DEDUCTION IN RESPECT OF WHOLE PROJECT HAS RIGHTLY BEEN REJECTED BECAUSE DEDUCTION U/S.80IB(10) COULD NOT BE GRANTED TO 34 ASSESSEE ON INCOMPLETE CONSTRUCTION AT RELEVANT POI NT OF TIME. REGARDING PROPORTIONATE DEDUCTION IN RESPECT OF 173 OF 205 FLATS OF PROJECT COMPLETED AS RECOGNIZED BY LOCAL AUTHORITY, I.E., PMC IN ITS COMPLETION CERTIFICATE NO.BCO/03/01333 DATED 31.03.2008, THE LD. AUTHORISED REPRESENTATIVE HEAVILY RELIED ON DECISION OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRIGADE ENTERPRISES P. LT D. (SUPRA), AIR DEVELOPER (SUPRA), SHETH DEVELOPERS (SUPRA) AND ALSO G.V.CORPORATION (SUPRA), WHEREIN DEDUCTION U/S.80IB(10) WAS DENIED AS SIZE OF SOME O F THE RESIDENTIAL UNITS EXCEEDED PRESCRIBED LIMIT AS LAID DOWN U/S.80IB(10) OF THE ACT. ABOVE MENTIONED DECISIONS ARE APPLICABLE IN THEIR OWN SPHERE, I.E. ON POINT OF EXCESS AREA OF SOME OF THE FLATS WHICH HOL D GOOD IN ITS OWN SPHERE. HOWEVER, IN CASE BEFORE US , DEDUCTION U/S.80IB(10) OF THE ACT HAS BEEN REJECTED ON THE GROUND THAT CONDITION OF COMPLETION OF PROJE CT BEFORE THE DUE DATE I.E., 31.03.2008 AS LAID DOWN U/S.80IB(10)(C) OF THE ACT, HAS NOT BEEN COMPLIED B Y ASSESSEE WHICH IS BASIC CONDITION FOR ALLOWABILITY OF DEDUCTION U/S.80IB(10) OF THE ACT. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (SUPRA), WHEREIN CONDITION OF COMPLETION AS LAID DOWN IN SECTION 80IB(10)(A) COULD NOT BE COMPLIED WITH BECAUSE OF A STAY BEING GRANTED BY MRTP COURT. THUS FAULT OF INCOMPLETION OF CONSTRUCTION WAS NOT ATTRIBUTABLE T O ASSESSEE. IN CASE SUCH A CONTINGENCY EMERGES WHIC H MAKES THE COMPLIANCE WITH PROVISION IMPOSSIBLE, THEN BENEFIT BESTOWED ON AN ASSESSEE CANNOT BE COMPLETELY DENIED. SUCH LIBERAL INTERPRETATION SHO ULD BE USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLETING PROJECT IN TIME FOR THE REASONS BEYOND HIS CONTROL. IN CASE BEFORE US, AS STATED ON BEHALF OF ASSESSEE, THAT ASSESSEE SUBMITT ED CERTAIN MODIFICATIONS/RECTIFICATIONS FOR TOP FLOORS OF BUILDING. THE SAID MODIFICATION/RECTIFICATION COUL D NOT BE COMPLETED AS LOCAL AUTHORITY COULD NOT APPRO VE THE MODIFICATION AS THEIR FILES HAVE BEEN TAKEN OVE R BY CONCERN INTELLIGENCE DEPARTMENT FOR INVESTIGATIO N OF VIOLATION OF URBAN LAND CEILING ACT APPLICABLE T O LAND IN QUESTION AT RELEVANT POINT OF TIME. THIS F ACT HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. THUS, ASSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELLED THE IMPOSSIBILITY ON PART OF THE ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME . IT IS SETTLED LEGAL POSITION THAT THE LAW ALWAYS GIVE REMEDY AND THE LAW DOES WRONG TO NO ONE. WE AGREE TO PROPOSITION PUT FORWARD BY LD. DEPARTMENTAL REPRESENTATIVE THAT PLAIN READING OF SECTION 80IB(1 0) OF THE ACT SUGGESTS ABOUT ONLY COMPLETION OF 35 CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONGWITH THE WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMAL CIRCUMSTANCES. HOWEVER, IN CASE BEFORE US, ASSESSE E WAS PREVENTED BY REASONABLE CAUSE TO COMPLETE CONSTRUCTION IN TIME DUE TO INTERVENTION OF CID ACT ION ON ACCOUNT OF VIOLATION OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. ASSESSE E WAS INCAPACITATED TO COMPLETE THE SAME IN TIME DUE TO REASONS BEYOND HIS CONTROL. ASSESSEE SHOULD NOT SUFFER FOR SAME. THE REVISION OF PLAN IS VESTED RIG HT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STRICT PROVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PROVISION FO R PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. AT THE SAME TIME, RESTRICTION THEREON T OO HAS TO BE CONSTRUED STRICTLY SO AS TO ADVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUE TO EFFECTUAT E THE LEGISLATIVE INTENTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE HOLD THAT ASSESSEE IS ENTITLED FO R BENEFIT U/S.80IB(10) OF THE ACT IN RESPECT OF 173 F LATS COMPLETED BEFORE PRESCRIBED LIMIT. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 7. AS A RESULT, THE APPEAL OF THE ASSESSEE IS DISPO SED OFF AS INDICATED ABOVE. IN THE LIGHT OF THE ABOVE DISCUSSION THE ORDER OF T HE CIT(A) DENYING BENEFIT OF DEDUCTION U/S.80IB(10) FOR NON-R ECEIPT OF COMPLETION CERTIFICATE IS SET-ASIDE AND THE GROU NDS RAISED BY THE ASSESSEE ON THIS ISSUE ARE ALLOWED. 7.10 IN VIEW OF THE ABOVE LEGAL DISCUSSION LD. AR, IT WAS SUBMITTED THAT CIT WAS NOT JUSTIFIED IN INVOKING PR OVISIONS OF SECTION 263. 8. FURTHER, THE LD. AUTHORISED REPRESENTATIVE DREW THE ATTENTION TO THE ORDER OF ITAT PUNE BENCH IN CASE O F SHRI KRISHNA HARIBABU LOHOKARE VS.ITO VIDE ITA NO.937/PN /2010 36 ORDER DATED 28-02-2013 WHEREIN IN PARA 14 THE TRIBU NAL HAS HELD AS UNDER : 14. IN THIS BACKGROUND WE FIND THAT THE AUTHORITI ES BELOW FAILED TO APPRECIATE THAT LAY OUT CAN HAVE NU MBER OF HOUSING PROJECTS AND THE FACT THAT THE BUILDING PLA N APPROVED ON 25.01.2007 BY THE COLLECTOR, PUNE, WAS INDEPENDENT AND WAS NOT THE EXTENSION OF THE BUILDI NG PLAN APPROVED ON 31.03.2001 BY PMC WITH REGARDS TO FIVE EARLIER BUILDINGS. WE FIND THAT ITAT PUNE BENCH IN THE CASE OF RAHUL CONSTRUCTION CO. VS. ITO IN ITA.NO.1250/PN/2009 AND 707/PN/2010 HELD OBSERVED THAT THERE IS A DIFFERENCE BETWEEN THE LAYOUT PLAN AND BUILDING PLAN. IT WAS HELD THAT APPROVAL OF HOUSIN G PROJECT AND APPROVAL OF BUILDING PLAN ARE TWO DIFFERENT CON CEPTS. THUS IT WAS HELD THAT WHATEVER PORTION OF THE HOUSI NG PROJECT IS OTHERWISE FOUND TO BE ELIGIBLE, HAS TO B E CONSIDERED AS A HOUSING PROJECT FOR THE PURPOSES OF DEDUCTION U/S.80IB(10). THE NEXT OBJECTION OF THE ASSESSING OFFICER IS THAT THE ASSESSEE COULD NOT PR ODUCE THE COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY I.E., COLLECTOR, PUNE, THE COMPETENT AUTHORITY WHO HAS SANCTIONED THE REVISED LAY OUT AND BUILDING PLAN OF THE PROJECT. ACCORDING TO THE ASSESSING OFFICER, KESHA VNAGAR GRAMPANCHAYAT MUNDHWA WAS NOT LOCAL AUTHORITY COMPETENT TO ISSUE COMPLETION CERTIFICATE. IT IS U NDISPUTED THAT THE ASSESSEE HAS OBTAINED COMPLETION CERTIFICA TE IN RESPECT OF 80 FLATS INCLUDED IN BUILDINGS A, B, C, D & E AND 48 FLATS INCLUDED IN BUILDINGS F, G & H FROM GRAMPANCHAYAT KESHAVNAGAR, MUNDHWA, AS MENTIONED ABOVE VIDE ORDER DATED 28.02.2008. THE ASSESSING O FFICER DID NOT APPRECIATE THE FACT THAT THERE WAS NO PROCE DURE FOR ISSUING COMPLETION CERTIFICATE BY COLLECTOR, PUNE, IN RESPECT OF ANY BUILDING PLAN APPROVED BY HIM. THE ASSESSEE AFTER THE COMPLETION OF THE CONSTRUCTION M ADE ENQUIRY UNDER RIGHT TO INFORMATION ACT AS TO THE NU MBER OF APPROVALS GRANTED BY THE COLLECTOR WITHIN THE LI MITS OF VILLAGE MUNDHWA, KESHAVNAGAR. THE OFFICE OF THE CO LLECTOR VIDE LETTER DATED 14.01.2010 COMMUNICATED THAT NO COMPLETION CERTIFICATE WAS GRANTED TO ANY PROJECT A PPROVED BEFORE 31.12.2007, AS MENTIONED ABOVE. SIMILARLY, DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE B ROUGHT TO THE NOTICE OF THE CIT(A) THAT CLARIFICATION WAS ISSUED BY THE TOWN PLANNING AUTHORITY THAT IN RESPECT OF AREA FALLING OUTSIDE THE JURISDICTION OF PMC, THE PROCEDURE IS T O OBTAIN COMPLETION CERTIFICATE FROM THE REGISTERED ARCHITEC T AND IT WAS ALSO POINTED OUT THAT GRAMPANCHAYAT WAGHOLI WAS THE LOCAL AUTHORITY FOR THIS PURPOSE. IN THIS REGARD, THE STAND OF THE ASSESSEE HAS BEEN THAT THERE WAS NO PROCEDUR E TO ISSUE COMPLETION CERTIFICATE BY TOWN PLANNING DEPAR TMENT 37 IN RESPECT OF CONSTRUCTION BEYOND THE PMC LIMITS. SECTION 80IB(10) DOES NOT DEFINE A LOCAL AUTHORITY AND IT D OES NOT REQUIRE THAT COMPLETION CERTIFICATE SHOULD BE GRANT ED BY THE SAME AUTHORITY WHICH HAS APPROVED THE BUILDING PLAN OR ISSUED THE COMMENCEMENT CERTIFICATE. MOREOVER, I T WAS NOT POSSIBLE IN THIS CASE BECAUSE LAND IN QUESTION WAS EXCLUDED FROM PMC LIMIT AT RELEVANT POINT OF TIME A S STATED ABOVE. SO THERE IS NO QUESTION OF ISSUING COMPLETI ON CERTIFICATE FROM PMC AT RELEVANT POINT OF TIME AFTE R EXCLUSION OF SAME FROM PMC LIMITS AS STATED ABOVE. IN SUCH CIRCUMSTANCES THE ASSESSING OFFICER WAS NOT JU STIFIED IN HOLDING THAT GRAMPANCHAYAT KESHAVNAGAR IS NOT A LOCAL AUTHORITY. THE EXPRESSION LOCAL AUTHORITY HAS NEIT HER BEEN DEFINED U/S.2 NOR U/S.80IB(10) OF THE ACT. HOWEVER , THE EXPRESSION LOCAL AUTHORITY IS DEFINED IN EXPLANATIO N 2 TO SECTION 10(20) OF THE ACT AS UNDER: EXPLANATION - FOR THE PURPOSES OF THIS CLAUSE, EXPR ESSION 'LOCAL AUTHORITY' MEANS (I) PANCHAYAT AS REFERRED TO IN CLAUSE (D) OF ARTI CLE 243 OF THE CONSTITUTION OR (II) MUNICIPALITY AS REFERRED TO IN CLAUSE (E) OF THE ARTICLE 243P OF THE CONSTITUTION OR (III) MUNICIPAL COMMITTEE OR DISTRICT BOARD, LEGAL LY ENTITLED TO OR ENTRUSTED BY THE GOVERNMENT WITH THE CONTROL AND MANAGEMENT OF MUNICIPAL OR LOCAL FUND (IV) CANTONMENT BOARD AS DEFINED IN SECTION 3 OF TH E CANTONMENT BOARD ACT 1924. 15. IN VIEW OF ABOVE WE HOLD THAT ASSESSEE SHOULD N OT SUFFER FOR ANY ADMINISTRATIVE CHANGE WITH REGARD TO APPLICABILITY OF BUILDING BYE LAWS IN PARTICULAR AR EA. THE PROBLEM AROSE WITH REGARD TO COMPLETION CERTIFICATE BY PMC BY VIRTUE OF THE FACT THAT AREA OF THE LAND IN QUESTION WAS EXCLUDED FROM PMC LIMITS AT RELEVANT POINT OF T IME AS DISCUSSED ABOVE. IN SUCH PECULIAR CONDITIONS, THE BENEFIT BESTOWED ON ASSESSEE SHOULD NOT BE DENIED FOR NO FA ULT OF THE ASSESSEE. SUCH LIBERAL INTERPRETATION SHOULD B E USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLYING CERTAIN PROVISIONS FOR THE REASONS BEYOND HIS CONTROL. IN CASE BEFORE US, PROBLEM AROSE DUE TO T HE CHANGE OF JURISDICTION WITH REGARD TO CONFUSION OF APPLICABILITY OF BUILDING BYE LAWS BECAUSE OF CHANG E OF JURISDICTION BY VIRTUE OF EXCLUSION OF LAND IN QUES TION FROM PMC LIMITS. THE ASSESSEE SHOULD NOT SUFFER FOR THE SAME. UNDER SUCH CIRCUMSTANCES, LIBERAL INTERPRETATION SH OULD BE USED IN FAVOUR OF THE ASSESSEE. IT IS SETTLED L EGAL POSITION THAT LAW ALWAYS GIVES REMEDY AND LAW DOES WRONG TO NO ONE. WE ARE AWARE THAT PROVISIONS OF SECTION 80IB(10) SUGGEST ABOUT ONLY COMPLETION OF CONSTRUCT ION 38 AND NO ADJECTIVE SHOULD BE USED ALONGWITH WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMAL CIRCUMSTANCES BUT FACTS BEFORE US ARE PECULI AR BECAUSE OF CHANGE OF JURISDICTION OF LAND FOR THE P URPOSE OF APPLICABILITY OF BUILDING BYE LAWS. ASSESSEE WAS INCAPACITATED TO OBTAIN COMPLETION CERTIFICATE FROM PMC BECAUSE OF EXCLUSION OF LAND IN QUESTION FROM PMC L IMITS WHICH IS BEYOND THE CONTROL OF THE ASSESSEE. ASSES SEE SHOULD NOT SUFFER FOR THE SAME. MOREOVER, CONCERNE D GRAM PANCHAYAT WHO ISSUE COMPLETION CERTIFICATE WIT HIN STIPULATED TIME IS ENTITLED FOR ISSUING COMPLETION CERTIFICATE AS STATED ABOVE AFTER EXCLUSION OF THE LAND IN QUES TION FROM PMC LIMITS. THE TAXING STATUTE GRANTING INCENT IVES FOR PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONST RUED LIBERALLY AND THAT PROVISIONS FOR PROMOTING ECONOMI C GROWTH HAS TO BE INTERPRETED LIBERALLY. AT THE SAM E TIME, RESTRICTION THEREON HAS TO BE CONSTRUED STRICTLY SO AS TO ADVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRAT E THE SAME. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF THE STATU TE TO EFFECTUATE LEGISLATIVE INTENTION. THIS VIEW IS FO RTIFIED BY DECISION OF PUNE TRIBUNAL IN THE CASE OF RAMSUKH PROPERTIES (SUPRA), RAHUL CONSTRUCTION CO. (SUPRA) AND OTHERS. 16. IN VIEW OF ABOVE, WE HOLD THAT GRAM PANCHAYAT KESHAV NAGAR, MUNDHWA, PUNE, IS LOCAL AUTHORITY FOR THE PURPOSE OF ISSUING COMPLETION CERTIFICATE FOR CLAIM ING DEDUCTION U/S.80IB(10) IN RESPECT OF PROFIT FROM SA LE OF ELIGIBLE FLATS IN PROJECT IN QUESTION. ASSESSEE FU LFILLED ALL CONDITIONS LAID DOWN FOR CLAIM OF DEDUCTION U/S.80I B(10) OF THE ACT AS DETAILED ABOVE. THE ASSESSING OFFICE R IS DIRECTED ACCORDINGLY. 8.1 THE LD. AR FURTHER DREW OUR ATTENTION TO THE OR DER OF ITAT PUNE BENCH IN ITA NO.1420/PN/2007 AND ITA NO.220/PN/2009 FOR A.YRS. 2004-05 AND 2005-06 IN CA SE OF KUNAL SHELTERS VS. DCIT WHEREIN PARA 6.2 AND 6.3 HA S HELD AS UNDER : 6.2. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT IN TH E CASE OF RAMSUKH PROPERTIES (SUPRA), THE ASSESSEE HAD CLAIME D DEDUCTION U/S 80-IB(10) FOR THE ASSESSEES PROJECT WHICH CONSISTED OF SIX BUILDINGS HAVING 205 FLATS OUT OF WHICH COMPLETION CERTIFICATE WAS OBTAINED AND FURNISHED B EFORE THE ASSESSING OFFICER FOR 173 FLATS ONLY. THE ASSE SSING 39 OFFICER DENIED DEDUCTION ON THE GROUND THAT THE PRO JECT WAS NOT COMPLETE WITHIN STIPULATED PERIOD OF TIME A ND THE SAID ORDER WAS CONFIRMED BY THE CIT(A). IN SECOND A PPEAL, THE TRIBUNAL HELD THAT LIBERAL INTERPRETATION SHOUL D BE USED IN FAVOUR OF THE ASSESSEE WHEN HE IS INCAPACIT ATED IN COMPLETING PROJECT IN TIME FOR REASONS BEYOND HIS C ONTROL. THE ASSESSEE HAD SUBMITTED PLANS FOR CERTAIN MODIFICATIONS/RECTIFICATIONS FOR TOP FLOORS OF BUIL DING. SAID MODIFICATION/RECTIFICATION COULD NOT BE COMPLETED A S LOCAL AUTHORITY COULD NOT APPROVE MODIFICATION AS THEIR F ILES HAVE BEEN TAKEN OVER BY CONCERNED INTELLIGENCE DEPARTMEN T FOR INVESTIGATION OF VIOLATION OF URBAN LAND CEILING AC T APPLICABLE TO LAND IN QUESTION AT THE RELEVANT POIN T OF TIME. THIS FACT WAS NOT DISPUTED BY THE REVENUE. THUS, T HE ASSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAU SE WHICH COMPELLED IMPOSSIBILITY ON THE PART OF ASSESS EE TO HAVE COMPLETION CERTIFICATE IN TIME. ACCORDINGLY, THE TRIBUNAL HELD THAT THE ASSESSEE WAS ENTITLED FOR BE NEFIT/S 80-IB(10) IN RESPECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMIT. IN THE PRESENT CASE, THE FLATS O THER THAN 29 FLATS THE ASSESSEE WERE GRANTED COMPLETION CERTI FICATE AS STATED ABOVE AND THE COMPLETION FOR SUCH 29 FLAT S HAVE BEEN WITHHELD ON THE GROUND THAT THESE 29 FLATS WHI CH ARE PART OF THE PROJECT WAS SUBSEQUENTLY CONSIDERED AS WITHIN THE BLUE LINE BY THE CORPORATION WHICH FACT HAS NOT BEEN DISPUTED BY THE REVENUE. IT IS CLAIMED THAT THE PO SSESSION OF THESE 29 FLATS HAS BEEN GIVEN TO THE FLAT OWNERS AND THE SAID CORPORATION IS RECOVERING MUNICIPAL TAX FROM T HE RESPECTIVE FLAT OWNERS. THE INCAPACITATION OF COMP LETION CERTIFICATE IN RESPECT OF 29 FLATS HAS BEEN GRANTED BY CONCEPT OF THESE BEING HELD AS WITHIN THE BLUE LINE BY THE CORPORATION. THE ASSESSEE SHOULD NOT SUFFER FOR IT S NO FAULT. THIS FACT HAS TO BE LOOKED INTO THE FACTS A ND CIRCUMSTANCES AND THE ASSESSING OFFICER HAS TO ASCE RTAIN WHETHER THE ASSESSEE HAS BEEN PREVENTED BY SUFFICIE NT REASON WHICH WAS BEYOND ITS CONTROL. SIMILAR VIEW HAS BEEN TAKEN BY THE GUJARAT HIGH COURT IN THE CASE OF TARNETAR CORPORATION (SUPRA) WHEREIN THE ASSESSEE COMPLETED THE PROJECT AND HANDED OVER THE POSSESSIO NS TO THE FLAT OWNERS. HOWEVER, THE ASSESSEE DID NOT REC EIVE THE COMPLETION CERTIFICATE WITHIN THE PRESCRIBED TIME L IMIT. IF THE LOCAL AUTHORITY FOR TECHNICAL REASONS REJECTED THE APPLICATION MADE BY THE ASSESSEE, THE ASSESSEE SHOU LD NOT SUFFER. THE HONBLE GUJARAT HIGH COURT HAS HELD TH AT THE ASSESSEE HAD COMPLETED THE PROJECT AND THE COMPLETI ON CERTIFICATE WAS NOT GRANTED WITHIN THE TIME LIMIT F OR TECHNICAL REASONS AND THEREFORE, THE DEDUCTION CANN OT BE DISALLOWED ON THIS GROUND. THESE FACTS HAVE TO BE L OOKED INTO IN THE LIGHT OF ABOVE LEGAL DISCUSSION. IN CA SE, SIT IS FOUND JUSTIFIED, THEN THE ASSESSING OFFICER SHOULD ALLOW THE SAME. 40 6.3 WITHOUT PREJUDICE TO THE ABOVE, THE ASSESSEE SUBMITTED THAT THE CONDITION FOR COMPLETION CERTIFI CATE OF HOUSING PROJECT IS INTRODUCED FROM AY. 2005-06, AND 2006-07 AND HENCE DEDUCTION SHOULD NOT BE DENIED FO R A.Y. 2004-05. IN THIS REGARD THE ASSESSEE PLACED R ELIANCE ON THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CAS E OF JAIN HOUSING PVT. LTD. WHEREIN IT WAS HELD THAT THE CONDITION OF COMPLETION OF HOUSING PROJECT IS NOT A PPLICABLE TO ASSESSMENTS PRIOR TO A.Y. 2005-06 AND HENCE DEDU CTION SHOULD NOT BE DENIED. WITHOUT PREJUDICE, IT WAS SU BMITTED THAT THE DEDUCTION SHOULD BE ALLOWED ON THE BALANCE FLATS COMPRISING IN THE PROJECT AS OTHERWISE, THE PROJECT SATISFIED ALL OTHER CONDITIONS OF SEC. 80-IB(10). FOR THIS P ROPOSITION THAT THE DEDUCTION IS ALLOWABLE ON THE PRO RATA BAS IS, THE ASSESSEE RELIED ON THE DECISION OF ITAT CALCUTTA BE NCH IN THE CASE OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. VS. DCIT (ITA NO. 1295/KOL/2005) AND THE JUDGMENT OF TH E MADRAS HIGH COURT IN THE CASE OF VISHWAS PROMOTERS VS. ASSTT. CIT (2013) 255 CTR (MAD) 149. IN VIEW OF AB OVE LEGAL DISCUSSION, THE ASSESSING OFFICER IS ALSO DIR ECTED TO RESTRICT DISALLOWANCE TO THE EXTENT OF 29FLATS ONLY IN CASE, ASSESSEES CLAIM IS NOT FOUND TENABLE FOR THESE 29 FLATS AND ALLOW THE CLAIM ON PRORATA BASIS FOR REMAINING FLAT S. 8.2 ACCORDING TO THE LD. AR IN VIEW OF THE DECISION OF TARNETAR CORPORATION (SUPRA) THE ORDER OF ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE RE VENUE SO AS TO ATTRACT THE PROVISIONS OF SECTION 263 OF THE ACT. ACCORDINGLY SAME SHOULD BE QUASHED. ON OTHER HAND LD. DEPARTME NTAL REPRESENTATIVE SUPPORTED THE ORDER OF CIT BECAUSE A SSESSING OFFICER HAD NOT MADE PROPER ENQUIRY BEFORE ALLOWING CLAIM OF DEDUCTION U/S. 80IB(10) OF ACT. HE HAS NOT LOOKED INTO VITAL ISSUE OF COMMENCEMENT OF PROJECT AND COMPLETION THE REOF. ACCORDINGLY, SAME WAS RIGHTLY HELD ERRONEOUS AS WEL L AS PREJUDICIAL TO THE INTEREST OF REVENUE BY CIT SO TH E ORDER OF CIT UNDER SECTION 263 SHOULD BE UPHELD. 41 9. AFTER HEARING BOTH THE SIDES AND AFTER GOING THR OUGH THE MATERIAL ON RECORD, WE FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SUNBEAM AUTO LTD. REPORTED IN 332 I TR 167 HAS HELD THAT (SHORT NOTES) : REVISIONERRONEOUS AND PREJUDICIAL ORDERLACK OF PROPER ENQUIRYTHERE IS A DISTINCTION BETWEEN 'LACK OF ENQUIRY' AND 'INADEQUATE ENQUIRY'IF THERE IS AN EN QUIRY, EVEN INADEQUATE, THAT WOULD NOT BY ITSELF GIVE OCCASI ON TO THE CIT TO PASS ORDER UNDER S. 263, MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTERSUCH A COURSE OF ACTION IS OPEN ONLY IN CASES OF 'LACK OF ENQUIRY' CONTENTION OF THE REVENUE THAT THE AO DID NOT CONSIDER AS TO WHETHER THE EXPENDITURE IN QUESTION WAS CAPITAL O R REVENUE EXPENDITURE CANNOT BE ACCEPTEDALTHOUGH APPARENTLY THE ASSESSMENT DOES NOT GIVE ANY REASONS F OR ALLOWING THE ENTIRE EXPENDITURE AS REVENUE EXPENDIT URE, THAT BY ITSELF WOULD NOT BE INDICATIVE OF THE FACT THA T THE AO HAS NOT APPLIED HIS MIND TO THE ISSUEAO IS NOT REQUIRED TO GIVE DETAILED REASON IN RESPECT OF EACH A ND EVERY ITEM OF DEDUCTION IN THE ASSESSMENT ORDERAO H AD CALLED FOR EXPLANATION REGARDING THIS VERY ITEM AND THE ASSESSEE HAD FURNISHED ITS EXPLANATIONTHIS FACT HAS BEEN NOTICED BY THE CIT HIMSELF IN HIS ORDER-THUS, I T CANNOT BE SAID THAT IT IS A CASE OF 'LACK OF ENQUIRY 1 FURTHER, EVEN THE CIT WAS NOT CLEAR AS TO WHETHER TH E SAID EXPENDITURE IS TO BE TREATED AS CAPITAL OR REVENUE EXPENDITUREDYES USED BY THE ASSESSEE, A MANUFACTUR ER OF CAR PARTS, ARE THE COMPONENTS OF THE MACHINES AND NEED CONSTANT/ REPLACEMENT AS THEIR LIFE SPAN IS NOT MORE THAN A YEARWITH THE REPLACEMENT OF SUCH TOOLS AND DY ES, NO NEW ASSET COMES INTO EXISTENCE, NOR THERE IS BENEFIT OF ENDURING NATURE IT DOES NOT ENHANCE THE LIFE OF THE EXISTING MACHINE OR INCREASE ITS PRODUCTION CAPACITY THEREFORE, THE VIEW TAKEN BY THE AO WAS ONE OF THE POSSIBLE VIEWS AND THE ASSESSMENT ORDER PASSED BY THE AO COULD NOT BE HELD TO BE PREJUDICIAL TO THE REVENUE. 9.1 IN CASE BEFORE US, WE FIND THAT ASSESSEE HAS FIL ED COPY OF LETTER ISSUED BY GRAM PANCHAYAT IN RESPECT OF LEVY OF TAX (AS PLACED ON PAGE 10 OF THE PAPER BOOK) CERTIFIED TO BE FI LED BEFORE THE ASSESSING OFFICER. THE STAND OF ASSESSEE HAS B EEN THAT ANY COMPETENT AUTHORITY LEVY THE PROPERTY TAX ONLY AFTER COMPLETION OF THE BUILDING IN QUESTION. IT HAS BEEN FURTHER ASS ERTED BY ASSESSEE VIDE ITS SUBMISSION TO ASSESSING OFFICER DAT ED 19-11- 42 2009 ( AS PLACED ON PAGE 15 OF THE PB) AS DISCUSSED A BOVE. ACCORDING TO WHICH THE NA ORDER WAS A COMMENCEMENT CERTIFICATE FOR THE PROJECT ISSUED BY COLLECTOR, PUNE WHEREIN THEY HAVE SATISFIED TERMS AND CONDITIONS TO BE COMPLIED WITH BY ASSESSEE AOP FOR EXECUTION OF THE PROJECT. FURTHER, A RCHITECT OF THE ASSESSEE HAD MADE APPLICATION TO THE TOWN PLANNIN G DEPARTMENT ON 24-01-2006 ALONG WITH PLAN OF THE PROJEC T. THUS PLANS WERE SCRUTINISED BY THE TOWN PLANNING DE PARTMENT AND THEREAFTER SENT TO THE OFFICE OF COLLECTOR FOR THEIR FINAL APPROVAL. ACCORDING TO THIS LETTER DATED 19-11-2009 C ONCERNED GRAM PANCHAYAT, KESHAVNAGAR, MUNDWA, TAL : HAVELI, PUNE-36 HAD BEEN INFORMED ON 04-11-2005 THAT PROJECT FLORIDA MINIS IS BEING STARTED ON PLOT NO.111, SY.NO.29B, 38), 39P, KESHAVNAGAR, MUNDWA, PUNE WHICH FALLS UNDER THEIR JURISDICTION. ACCORDINGLY, THE WORK OF PROJECT WAS COMM ENCED ON 10-11-2005 FOR WHICH ARCHITECT HAS ALREADY ISSUED THE CERTIFICATE WHICH IS NOT IN DISPUTE. ACCORDING TO THE SAID LETTER DATED 19-11-2009 THE PROJECT WAS COMPLETED ON 20-03- 2007 AND CERTIFICATE FROM ARCHITECT WAS OBTAINED. THE SA ID COMPLETION CERTIFICATE ALONG WITH DETAILS OF 96 FLATS C ONSTRUCTED ON SAID PLOT WAS GIVEN TO THE CONCERNED GRAM PANCHAYAT KESHAVNAGAR, MUNDWA, TAL : HAVELI, PUNE-36 ON 25-03- 2007. THE SAID GRAM PANCHAYAT HAVING RECEIVED THE ABOVE D ETAILS LEVIED GRAM PANCHAYAT ON ALL FLATS IN PROJECT FLORID A MINIS FOR F.Y. 2007-08 AND ALL THESE DETAILS WERE UNDISPUTEDL Y BEFORE ADDL. CIT. ALL CONDITIONS FOR CLAIMING DEDUCTION U/S .80IB(10) IS 43 CLAIMED TO BE FULFILLED AND ASSESSING OFFICER HAS AP PLIED HIS MIND ON THESE ASPECTS. SIMILARLY, THE ASSESSEE HAS SUBMITTED THE LETTER DATED 26-10-2009 TO THE ADDL. CIT WHICH HAS ALREADY BEEN TAKEN INTO CONSIDERATION BEFORE PASSING THE ORDER IN QUESTION. 9.2 IT IS NOT A CASE OF NO ENQUIRY BY CONCERNED ASSESSI NG OFFICER. IN CASE OF NO ENQUIRY IT HAS BEEN HELD IN SUNBEAM AUTO LTD. (SUPRA) PROVISIONS OF SECTION 263 CAN BE INVOKED BUT THE RATIO CANNOT BE APPLIED IN CASE ASSESSEE HAS FILED TH E DETAILS AND CONCERNED ASSESSING OFFICER HAS APPLIED HIS MIND TO THE DETAILS FILED BEFORE HIM AT RELEVANT POINT OF TIME. WITHOUT PREJUDICE TO ABOVE, AT THE MOST, IT MAY BE THE CASE OF INADEQUATE ENQUIRY. ADEQUATE ENQUIRIES IS SUBJECTI VE CONCEPT. IT DEPENDS FROM PERSON TO PERSON. THE ENQUIRIES MAY BE INADEQUATE WITH THE ANGLE OF CIT WHICH HAS REVISED T HE ORDER BUT IT MAY BE ADEQUATE WITH THE ANGLE OF CONCERNED AS SESSING OFFICER. 9.3 UNDER THESE FACTS AND CIRCUMSTANCES, CIT WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 FOR SETTING AS IDE THE ORDER OF ASSESSING OFFICER WHO HAS GRANTED THE RELIEF AS CLAIMED BY ASSESSEE FOR DEDUCTION U/S.80IB(10) IN RESPECT OF A SSESSEES PROJECT FLORIDA MINIS AFTER MAKING ENQUIRIES WITH REGARD TO APPROVAL, COMMENCEMENT AND COMPLETION OF THE PROJECT IN QUESTION. THE CIT WAS NOT JUSTIFIED IN SETTING ASIDE THE ORDER OF ASSESSING OFFICER WHEREIN HE HAS ALLOWED THE CLAIM OF THE 44 ASSESSEE AFTER TAKING INTO CONSIDERATION THE DETAILS F ILED IN RESPECT OF CLAIM OF THE ASSESSEE IN QUESTION. ACCORDI NGLY, SAME IS QUASHED. 10. AS A RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF OCTOBER, 2013. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YA DAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 29 TH OCTOBER 2013 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT-II, PUNE 4. THE D.R, B PUNE BENCH 5. GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE