ITO, Ward 1(3), Pune V. Shri Venkatesh Creators Promoters & Developers, Pune

ITA 1202/PUN/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8470 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Assessee Lawyers: VIPIN GUJRATHI
• Keywords: Additional evidence; Reasonable cause
• Section: 80IB; 263; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1202/PN/2013 (ASSESSMENT YEAR : 2009-10) ITO, WARD-1(3), PUNE .. APPELLANT VS. SHRI VENKATESH CREATORS PROMOTERS & DEVELOPERS, 96B, 96C DPM KAUNVAR PRABHUNAGAR, OPP : RAILWAY STATION, MUNDHWA, PUNE-411036 .. RESPONDENT PAN NO. ABCFS6199K ASSESSEE BY : SHRI VIPIN GUJRATHI REVENUE BY : SHRI P.S. NAIK DATE OF HEARING : 27-08-2014 DATE OF PRONOUNCEMENT : 09-09-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 01-03-2013 OF THE CIT(A)-I, PUNE RELATING TO ASSESSMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROMOTE RS, DEVELOPERS AND BUILDERS. IT FILED ITS RETURN OF INCOME ON 31- 10-2009 DECLARING NIL INCOME AFTER CLAIMING DEDUCTION OF RS.5,62,42,1 24/- U/S.80IB(10) OF THE I.T. ACT IN RESPECT OF THE HOUS ING PROJECT NAMED VENKATESH FLORA. THE ABOVE PROJECT OF THE ASSESS EE ADMEASURING 5130 SQ.MTRS IS LOCATED AT SURVEY.NO.96B, 96C AT MU NDHWA. THE 2 ASSESSEE ACQUIRED DEVELOPMENT RIGHTS IN RESPECT OF LAND ADMEASURING 17791.64 SQ.MTRS. FROM A JOINT VENTURE CALLED M/S DPM-RSL (COMPRISING OF DECCAN PAPER MILLS CO. LTD. AND RAJKOTIA SECURITIES LTD.) VIDE AGREEMENT DATED 5.10 .2004. OUT OF THE SAID AREA THE JOINT VENTURE DECIDED TO DEVELOP THE LAND ADMEASURING 11598 SQ.MTRS AND THE LAND REMAINING WI TH THE ASSESSEE ADMEASURED 5130 SQ.MTRS. THE HOUSING PRO JECT COMPRISED OF 5 BUILDINGS VIZ. A, B, C, D AND E. THE FIRST AP PROVAL OF THE BUILDING PLAN OF THE HOUSING PROJECT COMPRISING OF THESE 5 BUILDINGS WAS TAKEN ON 18.5.2004 VIDE COMMENCEMENT CERTIFICAT E NO. CC/0630/04. THE ASSESSING OFFICER OBSERVED FROM V ERIFICATION OF THE COMPLETION CERTIFICATE ISSUED BY THE PMC THAT T HE COMPLETION CERTIFICATE OF BUILDING C HAS NOT BEEN RECEIVED. ON BEING CONFRONTED BY THE AO, IT WAS SUBMITTED THAT COMPLET ION CERTIFICATE FOR C WING WAS PENDING DUE TO LABOUR NOC WHICH IS A NECESSARY PRE-CONDITION AND WHICH THE HIGH COURT HAS DIRECTED PMC TO ISSUE. HOWEVER, ALL OTHER NOCS HAVE BEEN OBTAINED AND THE NECESSARY APPLICATION FOR ISSUE OF NOC HAD BEEN MADE TO PMC. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT SINCE THE PROJECT HAS BEEN SANCTIONED ON 18.5.2004 I.E. BEFORE THE PRESENTATION OF FINANCE BILL, 2004, THE POST-AMENDE D PROVISION OF SEC. 80IB(10) AS INTRODUCED BY THE FINANCE BILL 200 4 (MAKING IT MANDATORY FOR AN UNDERTAKING TO COMPLETE THE HOUSIN G PROJECT COMMENCING ON OR AFTER 1.4.2004 WITHIN 4 YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH SUCH HOUSING PROJECT IS APP ROVED) IS NOT 3 APPLICABLE TO THE PROJECT. SINCE ADMITTEDLY, THE AS SESSEE HAS NOT RECEIVED THE COMPLETION CERTIFICATE OF C WING, TH EREFORE, THE AO HELD THAT THE ASSESSEE HAS NOT COMPLETED THE HOUSIN G PROJECT BEFORE 31.3.2009. ACCORDINGLY, HE DISALLOWED THE DEDUCTIO N U/S 80IB(10) CLAIMED BY THE ASSESSEE. 3. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ASSE SSEE HAS COMPLETED CONSTRUCTION OF ALL THE 5 WINGS CONSISTIN G OF 136 FLATS IN THE PROJECT. THE ASSESSEE WAS ABLE TO GET COMPLETI ON CERTIFICATE IN RESPECT OF 4 WINGS EXCEPT C WING WITHIN 4 YEARS F ROM THE END OF THE FINANCIAL YEAR IN WHICH THE PROJECT HAS BEEN ST ARTED. IT WAS SUBMITTED THAT THE APPLICATION FOR OCCUPANCY CERTIF ICATE OF THE PROJECT DATED 18-09-2007 WAS SUBMITTED ON 27-09-200 7 FOR ALL UNITS/BUILDINGS INCLUDED IN THE PROJECT. VARIOUS N OCS LIKE LIFT, DRAINAGE, FIRE AND WATER WHICH ARE REQUIRED FOR ISS UE OF COMPLETION CERTIFICATE BY PMC WERE SUBMITTED. THE ASSESSEE ALSO PRODUCED ARCHITECT CERTIFICATE AND POSSESSION LETTE RS ISSUED TO ALLOTTEES OF THE FLATS OF THE C BUILDING IN ORDER TO SUPPORT ITS CLAIM THAT THE PROJECT WAS COMPLETED BEFORE 31-03-2009. 3.1 IT WAS ARGUED THAT THE ASSESSEE, IN THE COURSE OF ASSESSMENT PROCEEDINGS, HAD AMPLY DEMONSTRATED THAT IT HAD COM PLIED WITH THE VARIOUS CONDITIONS PRESCRIBED U/S 80IB (10) TO CLAI M THE DEDUCTION UNDER THE SAID SECTION. THE ASSESSEE ALSO NARRATED THE CIRCUMSTANCES WHICH ARE REPRODUCED BY THE LD.CIT(A) AT PARA 5 PARA (E) OF THE APPEAL ORDER AND WHICH READS AS UND ER : 4 I) THE ASSESSEE HAS COMPLETED CONSTRUCTION OF ALL THE FIVE WINGS CONSISTING OF 136 FLATS IN THE PROJECT. THE A SSESSEE WAS ABLE TO GET COMPLETION CERTIFICATE IN RESPECT OF 4 WINGS EXCEPT C WING WITHIN FOUR YEARS FROM THE END OF THE FINANC IAL YEAR IN WHICH THE PROJECT HAS BEEN STARTED. II) THE ASSESSEE SUBMITTED THE APPLICATION FOR OCC UPANCY CERTIFICATE OF THE PROJECT DATED 18 TH SEPTEMBER 2007 SUBMITTED ON 27 TH NOVEMBER 2007 FOR ALL WINGS/BUILDINGS INCLUDED IN PROJECT. THE ASSESSEE SUBMITTED VARIOUS NOC LIKE LIFT, DRAINAGE, FIRE AND WATER WHICH IS REQUIRED FO R THE COMPLETION CERTIFICATE TO PMC. THE ASSESSEE ALSO PR ODUCED ARCHITECTS CERTIFICATE AND POSSESSION LETTERS TO A LLOTTEES OF THE FLAT OF THE C BUILDING IN ORDER TO SUPPORT OF I TS CLAIM THAT THE PROJECT WAS COMPETE BEFORE 31 ST MARCH 2009. III) AUTHORITIES OF VARIOUS DEPARTMENT OF PMC VISIT ED AND INSPECTED THE BUILDING F COMPRISING OF WING A, B, C . D AND E AND ISSUED NO OBJECTION IN RESPECT OF ALL WINGS I NCLUDED IN THE BUILDING. HOWEVER, PMC ISSUED COMPLETION CERTIFICATE ON 6 TH OCTOBER 2008 IN RESPECT OF WING A, WING B, WING D AND WING E WITH REFERENCE TO THE APPLICAT ION FOR OCCUPANCY CERTIFICATE DATED 7 TH FEBRUARY 2007 AS DETAILED BELOW WING FLOORS NO OF FLATS PROPOSED COMPLETION ISSUED FOR NO OF FLATS A PARKING + 7 28 28 B PARKING + 7 28 28 D PARKING + 7 28 28 E PARKING + 7 28 28 TOTAL 112 112 IV) PMC DID NOT ISSUE COMPLETION CERTIFICATE FOR WING C OF THE PROJECT EVEN THOUGH THE SAID WING C WAS COMPLET ED BEFORE 7 TH FEBRUARY 2007. PMC NEITHER COMMUNICATED ANY REASON FOR NOT ISSUING OCCUPANCY CERTIFICATE NOR REJECTED THE APPLICATION FOR WING C. V) EVEN THOUGH NO REASONS WERE COMMUNICATED TO THE ASSESSEE FOR NOT ISSUING COMPLETION CERTIFICATE IN RESPECT OF WING C OF THE PROJECT TILL THE END OF MONTH OF APRI L 2009. VI) GOVERNMENT OF MAHARASHTRA ISSUED GOVT. RESOL UTION NO. NOC-2007/PK-4771/DATED 12 TH JANUARY 2009. AS PER THE GR ALL COMPANIES/FACTORIES/MILLS WERE PROHIBITED FROM TRANSFERRING 5 THE LAND OWNED BY THEM UNLESS THE NOC IS OBTAINED F ROM THE COMMISSIONER OF LABOUR MUMBAI. VII) IN THE MEAN TIME THE ASSESSEE WAS UNOFFICIALLY AND ORALLY COMMUNICATED THE REASON FOR THE NON ISSUE OF COMPLE TION CERTIFICATE. THE ASSESSEE WAS ALSO ABLE TO OBTAIN T HE INTERNAL CORRESPONDENCE BETWEEN THE ADDITIONAL MUNICIPAL COMMISSIONER AND ADDITIONAL CITY ENGINEER DATED 21 ST APRIL 2009. COPY OF THE CORRESPONDENCE IS APPEARING ON PA GE NO 223 TO 224 OF THE PAPER BOOK. THERE WAS DISPUTE BETWEEN DECCAN PAPER MILLS AND LABOUR UNION REGARDING THE DUES TO BE PAID TO THE WORKERS AND THE SAME WAS IN THE HIGH COURT OF B OMBAY. THE DEVELOPER (DECCAN PAPER MILLS CO LTD] HAD FURNI SHED THE BANK GUARANTEE OF RS. 20,00,000/- WHICH WAS MORE TH AN THE AMOUNT/DUES TO PAID TO THE WORKER. IT WAS FURTHER C ONTAINED IN THE SAID CORRESPONDENCE THAT AS PER THE GOVT. NOTIF ICATION DATED 6 TH SEPTEMBER 2007, THERE IS A PROVISION, TO OBTAIN TH E NO OBJECTION CERTIFICATE FROM LABOUR COMMISSIONER BEFO RE PERMITTING USE OF INDUSTRIAL AREA FOR RESIDENTIAL P URPOSES. IT WAS FURTHER CONTAINED IN THE SAID CORRESPONDENCE THAT A S PER ORDERS ISSUED BY ENERGY AND LABOUR DIVISION ON 12 TH JANUARY 2009 THERE IS A PROVISION MAKING IT OBLIGATORY TO SUBMIT NO OBJECTION CERTIFICATE OF THE LABOUR COMMISSIONER. I T WAS FURTHER STATED THAT AS RESIDENTIAL USE HAS BEEN ALL OWED IN 1993 AND THE MOST OF THE DEVELOPMENT ON THE SAID PROPERT Y HAS BEEN COMPLETED AND THE PART COMPLETION CERTIFICATE HAS B EEN GIVEN. IT WAS FURTHER STATED THAT THE FINAL COMPLETION CERTIF ICATE MAY BE GIVEN ONLY AFTER RECEIVING THE REPORT OF LABOUR COM MISSIONER. VIII) THE ASSESSEE (THROUGH DECCAN PAPER MILLS CO LTD) FILED WRIT PETITION ON 20 TH JUNE 2011 AGAINST COMMISSIONER OF LABOUR, MUMBAI, THE OFFICE OF THE COMMISSIONER OF L ABOUR, SHIVAJINAGAR, PUNE, PUNE MUNICIPAL CORPORATION AND THE STATE OF MAHARASHTRA. THE ASSESSEE SUBMITTED IN WRIT PETI TION THAT THE ASSESSEE (PETITIONERS) WAS PERMITTED TO DEVELOP THE PROPERTY UNDER CONSIDERATION IN THE YEAR 1993 AND CONSTRUCTI ON OF THE PLOT IS COMPLETE IN ALL RESPECT AND IS MERELY AWAIT ING ISSUANCE OF OCCUPANCY CERTIFICATE BY THE CORPORATION. IX) THE HONBLE HIGH COURT DECIDED THE WRIT PETITIO N IN FAVOUR OF THE ASSESSEE AND DIRECTED THE CORPORATION (PMC) TO PROCESS THE REQUEST OF THE PETITIONER FOR ISSUANCE OF PROVI SIONAL OCCUPANCY CERTIFICATE WITHOUT INSISTING FOR NO DUE CERTIFICATE FROM THE APPROPRIATE AUTHORITY OF THE LABOUR DEPART MENT OF GOVT OF MAHARASHTRA. A COPY OF THE WRIT PETITION NO .2886 OF 2011 IS APPEARING AT PAGE NO 225 TO 227 OF THE PAPE R BOOK. 6 F) THE ASSESSEE BROUGHT TO THE NOTICE OF THE LEAR NED AO THE FACTS RELATING TO NON ISSUANCE OF COMPLETION CERTIF ICATE AND SUBMITTED THE COPIES OF GOVT. RESOLUTION DATED 12 TH JANUARY 2009, CORRESPONDENCE BETWEEN THE PMC OFFICIALS AND COPY OF WRIT PETITION DECIDED BY THE HONBLE BOMBAY HIGH CO URT. A COPY OF GOVERNMENT RESOLUTION DATED 12 TH JANUARY 2009 IS APPEARING ON PAGE NO 219 TO 222 OF THE PAPER BOOK. G) THE AMENDED SECTION 80IB(10) AS BROUGHT BY FINA NCE (NO. 2) ACT 2004 WAS NOT APPLICABLE TO THE ASSESSEE PROJ ECT AS THE PROJECT WAS SANCTION OR. 18 TH MAY 2004 I.E. BEFORE THE FINANCE BILL (NO. 2) WAS PRESENTED IN THE PARLIAMENT. H) THE LEARNED AO ASKED THE ASSESSEE TO SUBMIT THE COMPLETION CERTIFICATE IN RESPECT OF THE C BUILDING WHICH THE ASSESSEE COULD NOT SUBMIT. HOWEVER, THE ASSESSEE SU BMITTED A COPY OF THE APPLICATION MADE TO THE LOCAL AUTHORITY ON 27 TH DECEMBER 2011 IN RESPECT OF WING 'C' OF THE PROJECT . I) THE ASSESSEE FURTHER SUBMITTED THE REASONS FOR NON- OBTAINING OF COMPLETION CERTIFICATE AS FOLLOWS THE ASSESSEE WAS CONSTRUCTING PROJECT ON THE PLOT O F LAND ADMEASURING ABOUT 5130 SQUARE METERS SITUATED AT SU RVEY NO. 96B, 96C, 96D VILLAGE MUNDHWA, DIST: PUNE. THE SAID LAND WAS PART OF DECCAN PAPER MILL COMPANY LTD WHICH HAD CLOSED ITS OPERATION. THE GOVT. OF MAHARASHTRA HAD PROMULG ATED GOVERNMENT RESOLUTION NO. NHP-2007/PK-4771/KAKSHA-2 DATED 12 TH JANUARY 2009 IN RESPECT OF THE COMPANIES, FACTORIE S, MILLS WHICH WERE CLOSED. ACCORDING TO GR BEFORE TRA NSFERRING THE RIGHTS IN RESPECT OF THE LANDS OF THE COMPANIES/FACTORIES/MILLS ETC WHICH WERE CLOSED IT WAS NECESSARY TO OBTAIN NO OBJECTION CERTIFICATE FROM T HE COMMISSIONER OF LABOUR. SINCE, SOME DISPUTED LABOUR DUES OF DECCAN PAPER MILL WERE PENDING, WITH WHICH THE ASSE SSEE HAS NO CONCERN, THE LOCAL AUTHORITY - PMC REFUSED TO GI VE NOC. THE SAID DECCAN PAPER MILLS COMPANY LTD FILED WRIT PETITION IN THE HIGH COURT OF JUDICATURE AT BOMBAY AGAINST T HE COMMISSIONER OF LABOUR, STATE OF MAHARASHTRA. THE W RIT PETITION WAS FILED AS THE COMPLETION CERTIFICATE WA S NOT BEING ISSUED BY PMC ON THE PRETEXT THAT NO DUE CERTIFICAT E FROM THE LABOUR DEPARTMENT OF GOVT. OF MAHARASHTRA HAS NOT B EEN OBTAINED BY THE PETITIONER (THE DECCAN PAPER MILLS COMPANY LTD). THE HONBLE BOMBAY HIGH COURT ALLOWED THE PET ITION OF THE DECCAN PAPER MILLS COMPANY LTD ON THE GROUND TH AT THE REQUIREMENT OF OBTAINING NO DUE CERTIFICATE FROM TH E APPROPRIATE AUTHORITY OF LABOUR DEPARTMENT HAS BEEN 7 INTRODUCED FOR THE FIRST TIME IN TERMS OF GOVERNMEN T RESOLUTION DATED 12 TH JANUARY 2009 AND IF IT IS SO, THE SAID GR WILL HAV E NO OBLIGATION TO THE PETITIONER'S CASE. THE HONBLE BO MBAY HIGH COURT DIRECTED THE GOVT. OF MAHARASHTRA TO ISSUE PR OVISIONAL OCCUPANCY CERTIFICATE WITHOUT INSISTING FOR NO DUE CERTIFICATE FROM APPROPRIATE AUTHORITY. K) THE LEARNED ASSESSING OFFICER DID NOT TAKE ANY C OGNIZANCE OF THE, FACTS AND ISSUES UNDER CONSIDERATION IN RELATI ON TO NON - ISSUANCE OF THE COMPLETION CERTIFICATE DUE TO THE P ECULIAR SITUATION ARISING DUE TO THE GR AND THE SUBSEQUENT DEVELOPMENTS. L) THE LEARNED ASSESSING OFFICER DID NOT ACCEPT T HE CONTENTION OF THE ASSESSEE ON THE GROUND THAT THE POST AMENDED PROVISION AS MENTIONED FINANCE BILL (NO.2) 2004 WILL BE APPLI CABLE TO THE ASSESSEE PROJECT. THEREFORE THE HOUSING PROJECT OF THE ASSESSEE WAS NOT FULLY COMPLETE AS ON 31 ST MARCH 2009. M) THUS, THE LEARNED ASSESSING OFFICER DISALLOWED C LAIM OF DEDUCTION U/S 80IB(10) OF THE I. T. ACT OF RS. 5,62 ,42,124/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE HENCE, TH E ASSESSEE IS IN APPEAL BEFORE YOUR HONOUR. 4. RELYING ON VARIOUS DECISIONS, THE ASSESSEE SUBMI TTED THAT DEDUCTION U/S.80IB(10) CANNOT BE DENIED TO THE ASSE SSEE DUE TO INCAPACITATION TO PRODUCE THE COMPLETION CERTIFICAT E FOR THE REASONS BEYOND THE CONTROL OF THE ASSESSEE. FURTHER, THERE WAS NO CONDITION IN THE COMMENCEMENT CERTIFICATE REGARDING NOC FROM THE LABOUR COMMISSIONER 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(1 0) OF THE I.T. ACT BY OBSERVING AS UNDER : 3.3. I HAVE CONSIDERED THESE SUBMISSIONS AND FI ND THAT THE APPELLANT HAD SUBMITTED THE APPLICATION FOR OCCUPANC Y CERTIFICATE BEFORE PMC ON 27.11.2007 IN RESPECT OF THE ENTIRE HO USING PROJECT ENCOMPASSING ALL 5 BUILDINGS. HOWEVER DUE TO REASONS BEY OND THE CONTROL OF THE APPELLANT I.E. REQUIREMENT OF NOC FR OM LABOUR 8 COMMISSIONER, THE APPELLANT WAS ABLE TO RECEIVE ONLY P ART COMPLETION FOR 4 OUT OF 5 WINGS ON-6.10.2008. IT WAS ONLY ON 21.4.2009 THAT THE APPELLANT COULD INFORMALLY PROCU RE A LETTER ADDL. CITY ENGINEER (VIGILANCE) OF PMC TO CLARIFY THAT CO MPLETION CANNOT BE GIVEN FOR C WING TILL THE TIME THE LABOUR NOC IS NOT SUBMITTED BY THEM. A PERUSAL OF THE COMMENCEMENT CERTIFICATE ISSUED BY THE PMC AT THE FIRST INSTANCE DATED 18.5.2004, AND SUBSEQUENT COMMENCEMENT CERTIFICATES DATED 28.2.2006 AND 7.2.20 07 SHOWS THAT THERE IS NO CONDITION REGARDING REQUIREMENT OF LABOUR NOC COMMUNICATED TO THE APPELLANT FROM THE SIDE OF PMC. 3.4. THE APPELLANT HAS STATED THAT SINCE THE APPLICATI ON FOR OCCUPANCY CERTIFICATE WAS MADE BEFORE THE MUNICIPAL AUTHORITIES WELL WITHIN TIME I.E. ON 27.11.2007 AND NO REFUSAL N OR ANY OBJECTION WAS RECEIVED WITHIN A PERIOD OF 21 DAYS OF SUCH SUBMIS SION, IT SHOULD BE DEEMED TO HAVE BEEN GRANTED IN TERMS OF RUL E 7.7 OF THE DEVELOPMENT CONTROL RULES, PUNE ESPECIALLY SINCE THERE HAS BEEN NO OBJECTION FROM PMC THAT THE BUILDING CONSTRUCTED IS NOT IN ACCORDANCE WITH THE SANCTIONED PLAN. IT IS SUBMITTED T HAT THE ISSUE IS COVERED BY THE ITAT PUNE BENCH DECISION IN SATISH B ORA & ASSOCIATES VS ACIT IN ITA NO. 713 & 714/PN/2010. FURTHE R, IT IS SUBMITTED THAT THE APPELLANT HAS TRIED ITS LEVEL BEST T O PRODUCE THE OCCUPANCY CERTIFICATE BUT DUE TO REASONS BEYOND ITS CO NTROL VIZ. THE ISSUE REGARDING LABOUR NOC IN RESPECT OF THE LANDLORD, THE SAME COULD NOT BE PRODUCED. RELIANCE HAS BEEN PLACED ON P UNE ITAT DECISION IN RAMSUKH PROPERTIES VS DCIT IN ITA NO. 84/PN /2008 FOR THE PROPOSITION THAT TAXING STATUTE GRANTING INCENTIV E FOR PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE INTERPRETED LIBE RALLY. 3.5. IN THE CASE OF SATISH BORA & ASSOCIATES, THE ASSESSEE R ECEIVED OBJECTION LETTER FROM PMC ON 23.12.2005 IN RESPECT O F HIS APPLICATION DATED 29.10.2005, WHEREIN DEFECTS WERE COMMUNICATED AND WHICH REQUIRED THE ASSESSEE TO REMOVE THOSE DEFECTS FOR ISSUANCE OF OCCUPANCY CERTIFICATE. THE ITA T, AFTER ANALYSIS OF SEC. 263 OF THE BOMBAY PROVINCIAL MUNICIPA L CORPORATION ACT, 1949 AND RULES 7.6 AND 7.7 OF DEVEL OPMENT CONTROL RULES FOR PMC HELD THAT EVEN IN A CASE WHERE SMALL OBJECTION ARE RECEIVED FROM PMC AFTER A PERIOD OF 2 1 DAYS UNDER RULE 7.7, THE ASSESSEE CAN BE DEEMED TO HAVE SANCTION FO R THE PURPOSES OF COMPLETION OF THE HOUSING PROJECT. IN THE PRESENT,- CASE, ADMITTEDLY NO OBJECTION HAS BEEN RECEIVED FROM PMC TILL DATE. THIS DECISION IS THEREFORE, SQUARELY APPLICABLE TO THE APPELLANT'S CASE. SO FAR AS THE OTHER DECISION OF RAMSUKH PROPERTIE S IS CONCERNED, THE MODIFICATIONS PROPOSED COULD NOT BE CA RRIED OUT SINCE PMC TOOK INORDINATELY LONG TIME TO GRANT THE P ERMISSION FOR MODIFICATION, SINCE THEIR FILES HAD BEEN TAKEN OVER B Y INTELLIGENCE DEPARTMENT FOR INVESTIGATION OF VIOLATION OF URBAN L AND CEILING ACT. IT WAS HELD THAT SINCE COMPLETION COULD NOT BE M ADE DUE TO REASONS BEYOND HIS CONTROL, THE ASSESSEE WAS ENTITLED TO DE DUCTION U/S 80IB(10) PROPORTIONATELY IN RESPECT OF FLATS COMPL ETED WITHIN THE PRESCRIBED TIME. IT IS ALSO SEEN THAT THE HOUSING PR OJECT OF THE APPELLANT AS APPROVED ON 18.5.2004, WHEREAS THE CONDI TION FOR COMPLETION WITHIN 4 YEARS OF END OF YEAR OF APPROVAL CAME INTO EFFECT FROM 1.4.2005 VIDE FINANCE ACT, 2004. THEREF ORE, ON THIS ACCOUNT ALSO, THE CLAIM OF THE APPELLANT THAT, THE A CT AS IF THEN STOOD, DID NOT PROVIDE ANY STATUTORY TIME LIMIT FOR C OMPLETION OF 9 HOUSING PROJECTS, APPEARS TO BE CORRECT. 3.6. THE APPELLANT HAS FILED ADDITIONAL EVIDENCE IN THE FORM OF COMPLETION CERTIFICATE RECEIVED FROM THE PMC DATED 11.2.2013 IN RESPECT OF 'C' WING. HOWEVER, THE ADDITIONAL EVIDENC E IS NOT CONSIDERED EVEN NECESSARY AT THIS STAGE AND IS NOT ADMI TTED DUE TO THE FACT THAT JUDICIAL PRECEDENTS ARE AVAILABLE TO SU PPORT THE APPELLANT'S CLAIM. FOLLOWING THE DECISION OF THE JURI SDICTIONAL ITAT CITED ABOVE NAMELY SATISH BORA & ASSOCIATES, WHICH IS BI NDING ON THE UNDERSIGNED AS ALSO THE FACT THAT THE AMENDED PR OVISIONS OF SEC. 80IB(10) BY FINANCE ACT, 2004 APPLIED TO PROJEC TS APPROVED ON OR AFTER 01-04-2005, IT IS HELD THAT THE APPELLAN T IS ENTITLED FOR DEDUCTION U/S.80IB(10). GROUNDS NO.1 TO 4 ARE TREATE D AS ALLOWED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE ID. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN ALLOWING DEDUCTION TO THE ASSESSEE U/S.80IB WHEN ASSESSEE CO ULD NOT COMPLETE THE HOUSING PROJECT AS REQUIRED UNDER PROVIS IONS OF SEC.80IB(10)(A)(II) OF THE INCOME-TAX ACT, 1961. 2. THE ID. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN ALLOWING DEDUCTION TO THE ASSESSEE U/S.80IB WHEN THE EXP LANATION (II) TO CLAUSE (A) OF SEC.80IB(L0) PROVIDES THAT THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THAT THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY AND NO SUCH CE RTIFICATE WAS SUBMITTED BY THE ASSESSEE. 3. THE ID. COMMISSIONER OF INCOME-TAX(APPEALS) ERRED I N INTERPRETING SECTION 80IB(10), IN THE CONTEXT OF APP LICABILITY OF EXPLANATION (II) TO CLAUSE (A), IN A MANNER NEITHER CONTEMPLATED NOR PROVIDED FOR UNDER THE ACT. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 7. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OBJ ECTED TO THE ORDER PASSED BY THE LD.CIT(A) ALLOWING DEDUCTION U/ S.80IB(10) OF THE I.T. ACT. HE SUBMITTED THAT WHEN THE ASSESSEE COULD NOT COMPLETE THE HOUSING PROJECT AS REQUIRED UNDER PROV ISIONS OF SECTION 80IB(10)(A)(II) OF THE I.T. ACT, THE LD.CIT (A) WAS NOT JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION U/S.80 IB(10). 10 8. THE LD. COUNSEL FOR THE ASSESSEE WHILE SUPPORTIN G THE ORDER OF THE CIT(A) RELIED ON THE FOLLOWING DECISIONS AND SUBMITTED THAT THE ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DECISIONS OF THE TRIBUNAL AND THE HONBLE HIGH COUR TS : 1. THE DECCAN PAPER MILLS CO. LTD. VS. COMMISSIONER OF LABOUR & OTHERS W.P.NO.2886 OF 2011 ORDER DATED 16-06-2011 2. M/S. SATISH BORA & ASSOCIATES VS. ACIT ITA NOS.713 & 714/PN/2010 ORDER DATED 07-01-2011 (PUNE) 3. M/S. RAMSUKH PROPERTIES VS. DY.CIT ITA NO.84/PN/20 11 ORDER DATED 25-07-2012 4. HINDUSTAN SAMUHA AWAS LTD. VS. ITO ITA NOS.945 TO 950/PN/2010 ORDER DATED 30-08-2011 5. CIT VS. TARNETAR CORPORATION TAX APPEAL NO.1241 OF 2011 ORDER DATED 12-09-2012 6. CIT-I VS. CHD DEVELOPERS LTD. IT APPEAL NO.298 OF 2013 ORDER DATED 22-01-2014 8.1 REFERRING TO THE ABOVE DECISIONS HE SUBMITTED T HAT SINCE THE ORDER OF THE LD.CIT(A) IS IN CONSONANCE WITH THE VA RIOUS DECISIONS OF THE TRIBUNAL AND HONBLE HIGH COURTS, THEREFORE, THE SAME SHOULD BE UPHELD AND THE GROUNDS RAISED BY THE REVE NUE SHOULD BE DISMISSED. 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE VIDE APPLICAT ION DATED 27-11- 2007 SUBMITTED APPLICATION FOR OCCUPANCY CERTIFICAT E BEFORE PMC IN RESPECT OF THE ENTIRE HOUSING PROJECT CONSISTING OF 5 BUILDINGS. 11 THERE IS ALSO NO DISPUTE TO THE FACT THAT OUT OF TH E 5 WINGS ASSESSEE WAS ABLE TO RECEIVE PART COMPLETION CERTIFICATE IN RESPECT OF 4 WINGS ON 06-10-2008. SO FAR AS THE ISSUE OF COMPLETION C ERTIFICATE FOR THE 5 TH WING IS CONCERNED, IT IS THE SUBMISSION OF THE ASS ESSEE THAT THE SAME COULD NOT BE OBTAINED DUE TO NON SUBMISSION OF LABOUR NOC. THE NON RECEIPT OF THE ABOVE COMPLETION CERTIFICATE WAS BEYOND THE CONTROL OF THE ASSESSEE. FROM THE SUBMISSION OF TH E ASSESSEE BEFORE THE LOWER AUTHORITIES, IT IS AMPLY CLEAR THAT ASSES SEE HAS SUBMITTED VARIOUS NOCS LIKE LIFT, DRAINAGE, FIRE AND WATER WH ICH ARE REQUIRED FOR ISSUE OF COMPLETION CERTIFICATE. POSSESSION OF THE FLATS HAVE BEEN GIVEN BY THE ASSESSEE TO THE RESPECTIVE OWNERS . FURTHER, A PERUSAL OF THE RECORD SHOW THAT THE ASSESSEE HAS AP PLIED FOR OCCUPANCY CERTIFICATE TO THE MUNICIPAL AUTHORITIES ON 27-11-2007 AND NO REFUSAL OR OBJECTION WAS RECEIVED BY THE ASS ESSEE WITHIN A PERIOD OF 21 DAYS FROM THE DATE OF SUCH SUBMISSION. THEREFORE, IN TERMS OF RULE 7.7 OF THE DEVELOPMENT CONTROL RULES, PUNE IT SHOULD BE DEEMED TO HAVE BEEN GRANTED SINCE THERE HAS BEEN NO OBJECTION FROM THE PMC THAT THE BUILDING CONSTRUCTED IS NOT I N ACCORDANCE WITH THE SANCTIONED PLAN. THE DECISION OF THE TRIB UNAL IN THE CASE OF SATISH BORA AND ASSOCIATES (SUPRA) SUPPORTS THE CASE OF THE ASSESSEE. THE PUNE BENCH OF THE TRIBUNAL IN THE CA SE OF M/S. RAMSUKH PROPERTIES HAS ALLOWED THE CLAIM OF DEDUCTI ON U/S.80IB(10) OF THE I.T. ACT WHICH WAS DENIED TO IT BY THE LOWER AUTHORITIES ON THE GROUND THAT THE ASSESSEE HAS NO T COMPLETED ALL THE 205 FLATS IN THE PROJECT WITHIN TIME STIPULATED UND ER THE SECTION. 12 THE RELEVANT OBSERVATION AT PARA 6 OF THE ORDER REA DS AS UNDER : 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE IS A FIRM ENGAGED IN B USINESS OF BUILDER AND PROMOTER. THE ISSUE BEFORE US IS REGARDING ALLOWABILITY OF DEDUCTION U/S.80IB(10) OF THE ACT ON PARTIALLY CO MPLETE PROJECT. THE ASSESSING OFFICER HAS DENIED THE DEDUCTION ON THE GR OUND THAT PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED TIME. THERE IS NO DISPUTE WITH REGARD TO OTHER CONDITIONS LAID U/S.80IB( 10) OF THE ACT, I.E., COMMENCEMENT OF PROJECT, AREA OF LAND OF PROJ ECT, ETC. ASSESSEES HOUSING PROJECT WAS APPROVED VIDE COMMENCEMENT CERTIFICATE NO.3837/04 DATED 13.01.2005 OUT OF WHIC H COMPLETION CERTIFICATE WAS OBTAINED AND FURNISHED BEFORE THE ASSESSI NG OFFICER FOR 173 OUT OF 205 FLATS. SAME WAS REJECTED BY THE A SSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE REQUEST FOR GRANTI NG WHOLE DEDUCTION IN RESPECT OF WHOLE PROJECT HAS RIGHTLY BEE N REJECTED BECAUSE DEDUCTION U/S.80IB(10) COULD NOT BE GRANTED T O ASSESSEE ON INCOMPLETE CONSTRUCTION AT RELEVANT POINT OF TIME . REGARDING PROPORTIONATE DEDUCTION IN RESPECT OF 173 OF 205 FLA TS OF PROJECT COMPLETED AS RECOGNIZED BY LOCAL AUTHORITY, I.E., PM C IN ITS COMPLETION CERTIFICATE NO.BCO/03/01333 DATED 31.03. 2008, THE LD. AUTHORISED REPRESENTATIVE HEAVILY RELIED ON DECISION O F BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRIGADE ENTE RPRISES P. LTD. (SUPRA), AIR DEVELOPER (SUPRA), SHETH DEVELOPERS (SUPRA) AND ALSO G.V.CORPORATION (SUPRA), WHEREIN DEDUCTION U/S.80 IB(10) WAS DENIED AS SIZE OF SOME OF THE RESIDENTIAL UNITS EXCEEDED PRESCRIBED LIMIT AS LAID DOWN U/S.80IB(10) OF THE ACT. ABOVE ME NTIONED DECISIONS ARE APPLICABLE IN THEIR OWN SPHERE, I.E. ON POINT OF EXCESS AREA OF SOME OF THE FLATS WHICH HOLD GOOD IN ITS OWN S PHERE. HOWEVER, IN CASE BEFORE US, DEDUCTION U/S.80IB(10) OF THE ACT HAS BEEN REJECTED ON THE GROUND THAT CONDITION OF COMPL ETION OF PROJECT BEFORE THE DUE DATE I.E., 31.03.2008 AS LAID DOWN U/ S.80IB(10)(C) OF THE ACT, HAS NOT BEEN COMPLIED BY ASSESSEE WHICH IS BASIC CONDITION FOR ALLOWABILITY OF DEDUCTION U/S.80IB(10) OF THE AC T. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (SUPRA), WHEREIN CONDI TION OF COMPLETION AS LAID DOWN IN SECTION 80IB(10)(A) COULD NOT BE COMPLIED WITH BECAUSE OF A STAY BEING GRANTED BY MRT P COURT. THUS FAULT OF INCOMPLETION OF CONSTRUCTION WAS NOT ATT RIBUTABLE TO ASSESSEE. IN CASE SUCH A CONTINGENCY EMERGES WHICH MAKES THE COMPLIANCE WITH PROVISION IMPOSSIBLE, THEN BENEFIT BEST OWED ON AN ASSESSEE CANNOT BE COMPLETELY DENIED. SUCH LIBERAL INT ERPRETATION SHOULD BE USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITA TED IN COMPLETING PROJECT IN TIME FOR THE REASONS BEYOND HIS CONTROL. IN CASE BEFORE US, AS STATED ON BEHALF OF ASSESSEE, THAT ASSES SEE SUBMITTED CERTAIN MODIFICATIONS/RECTIFICATIONS FOR TOP FLOORS OF BUILDING. THE SAID MODIFICATION/RECTIFICATION COULD NOT BE COMPLETED AS LOCAL AUTHORITY COULD NOT APPROVE THE M ODIFICATION AS THEIR FILES HAVE BEEN TAKEN OVER BY CONCERN INTELLIG ENCE DEPARTMENT FOR INVESTIGATION OF VIOLATION OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION AT RELEVANT POINT OF TIME. THIS FAC T HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. THUS, ASSESSEE WAS PREVENT ED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELLED THE IMPOSSIB ILITY ON PART OF THE ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME. IT IS SETTLED LEGAL POSITION THAT THE LAW ALWAYS GIVE REMED Y AND THE LAW DOES WRONG TO NO ONE. WE AGREE TO PROPOSITION PUT FO RWARD BY LD. DEPARTMENTAL REPRESENTATIVE THAT PLAIN READING OF SEC TION 80IB(10) 13 OF THE ACT SUGGESTS ABOUT ONLY COMPLETION OF CONSTRUCTI ON AND NO ADJECTIVE SHOULD BE USED ALONGWITH THE WORD COMPLETI ON. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMAL CIRC UMSTANCES. HOWEVER, IN CASE BEFORE US, ASSESSEE WAS PREVENTED BY REA SONABLE CAUSE TO COMPLETE CONSTRUCTION IN TIME DUE TO INTERVE NTION OF CID ACTION ON ACCOUNT OF VIOLATION OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. ASSESSEE WAS INCAPACI TATED TO COMPLETE THE SAME IN TIME DUE TO REASONS BEYOND HIS CON TROL. ASSESSEE SHOULD NOT SUFFER FOR SAME. THE REVISION OF PLAN I S VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STRICT P ROVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FOR P ROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INT ERPRETED LIBERALLY. AT THE SAME TIME, RESTRICTION THEREON TOO HAS TO BE CONSTRUED STRICTLY SO AS TO ADVANCE THE OBJECT OF PROVI SION AND NOT TO FRUSTRATE THE SAME. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUE TO EF FECTUATE THE LEGISLATIVE INTENTION. IN VIEW OF ABOVE FACTS AND CI RCUMSTANCES, WE HOLD THAT ASSESSEE IS ENTITLED FOR BENEFIT U/S.80IB(10) O F THE ACT IN RESPECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMI T. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 9.1 WE FIND THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS. TARNETAR CORPORATION (SUPRA) HAS OBSERVED AS UN DER (SHORT NOTES) : THE ASSESSEE HAD COMPLETED THE CONSTRUCTION WELL BEFORE 31-3- 2008 IS NOT IN DOUBT. IT IS TRUE THAT FORMALLY BU PER MISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION (II) TO CLAUSE (A) TO SECTION 80-IB (10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BE ING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITIO N OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE TH EREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIEW THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WAS BEING MADE AVAILABLE. [PARA 6]. THE ASSESSEE HAD COMPLETED THE CONSTRUCTION TWO YEA RS BEFORE THE FINAL DATE AND HAD APPLIED FOR BU PERMISSION. SUC H BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUC TION WAS NOT COMPLETED, BUT SOME OTHER TECHNICAL GROUND. IN T HAT VIEW OF THE MATTER, GRANTING BENEFIT OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL. [PARA 7] 9.2 SIMILAR VIEW HAS BEEN TAKEN IN VARIOUS OTHER DE CISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE. IN VIEW OF THE ABOVE DECISIONS CITED (SUPRA) AND IN VIEW OF THE DETAILED REASONING GIVEN 14 BY THE LD.CIT(A) WHILE ALLOWING THE CLAIM OF DEDUCT ION U/S.80IB(10) WE FIND NO INFIRMITY IN THE SAME. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 09-09-2014. SD/- SD/- (R.S.PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 09 TH SEPTEMBER, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE