ITO, Ward-3(2), Pune V. M/s.A.V. Bhat developers, Pune

ITA 1218/PUN/2010

• Counselvise Citation: 121824514 RSA 2010
• Duration Of Justice: 2 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 09-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL PATHAK
• Assessee Lawyers: ANN KAPTHUAMA
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1218/PN/2010 (ASSESSMENT YEAR: 2007-08) INCOME TAX OFFICER WARD 3 (2), PUNE . APPELLANT VS. M/S A. V. BHAT DEVELOPERS 1348, SADASHIV PETH, PUNE 411 030 PAN : AAKFA5590M . RESPONDENT APPELLANT BY : MR. SUNIL PATHAK & MR. SUHAS BORA RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 16-05-2013 DATE OF PRONOUNCEMENT : 25-06-2013 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE ( IN SHORT THE CIT(A)) DATED 16-6-2010, WHICH IN-TURN, HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER ON 21.12.2009 U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2. ALTHOUGH, THE REVENUE HAS RAISED MULTIPLE GROUND S OF APPEAL IN THE MEMO OF APPEAL, HOWEVER, THE SOLITARY DISPUTE IS WI TH REGARD TO ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT WITH RE SPECT TO THE PROFITS ARISING FROM DEVELOPMENT AND CONSTRUCTION OF A HOUSING PROJ ECT UNDERTAKEN BY THE ASSESSEE. ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 3. THE RESPONDENT ASSESSEE IS A PARTNERSHIP FIRM WH ICH IS ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS. FOR THE ASSESS MENT YEAR UNDER CONSIDERATION, ASSESSEE HAD CLAIMED DEDUCTION U/S 8 0IB(10) OF THE ACT OF RS.1,46,24,573/- IN RESPECT OF A HOUSING PROJECT VI Z. OAKWOODS AT VIMAN NAGAR, PUNE. IN THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER HELD THAT ASSESSEE WAS NOT ELIGIBLE FOR THE CLAIM O F DEDUCTION U/S 80IB(10) OF ACT AND ACCORDINGLY THE DEDUCTION CLAIMED AT RS. 1, 46,24,573 WAS DENIED. THE CIT(A) HAS UPHELD THE CLAIM OF THE ASSESSEE AND THE REFORE THE REVENUE IS IN APPEAL CHALLENGING THE ACTION OF THE CIT(A). 4. SECTION 80IB(10)OF THE ACT PERMITS AN ASSESSEE T O CLAIM DEDUCTION IN RESPECT OF PROFITS DERIVED FROM DEVELOPMENT AND CON STRUCTION OF A HOUSING PROJECT, WHICH HAS BEEN APPROVED BY THE LOCAL AUTH ORITY BEFORE 31.3.2007, SUBJECT TO FULFILLMENT OF THE CONDITIONS PRESCRIBED THEREIN. IN THE CASE BEFORE US THE DISPUTE REVOLVES AROUND THE CONDITION PRESCRIBE D IN CLAUSE(A) TO SECTION 80IB(10) OF THE ACT AND THE EXPLANATION THEREOF, WH ICH READ AS UNDER :- (10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UND ERTAKING DEVELOPING AND BUILDING HOUSE PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH 2007 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING P ROJECT IF,-- (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEV ELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION,- (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPR OVED BY THE LOCAL AUTHORITY BEFORE THE 1 ST DAY OF APRIL 2004, ON OR BEFORE THE 31 ST DAY OF MARCH, 2008; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1 ST DAY OF APRIL, 2004 WITHOUT FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WH ICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION FOR THE PURPOSES OF THIS CLAUSE- (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SH ALL BE ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH T HE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPR OVED BY THE LOCAL AUTHORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. 5. IN TERMS OF CLAUSE (A), DEDUCTION IS AVAILABLE I N RESPECT OF HOUSING PROJECT WHICH COMMENCES DEVELOPMENT AND CONSTRUCTIO N ON OR AFTER 1.10.1998 AND COMPLETES SUCH CONSTRUCTION WITHIN THE PERIOD P RESCRIBED IN SUB-CLAUSE (I) OR (II) THEREOF, AS THE CASE MAY BE. IN THE CASE BE FORE US, AS PER ASSESSEE THE BUILDING PLAN OF THE HOUSING PROJECT WAS FIRST APPR OVED BY THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL CORPORATION (IN SHORT PMC) ON 19.01.2005 AND THEREFORE THE PERIOD AVAILABLE FOR COMPLETION OF CONSTRUCTION SHALL BE GOVERNED BY SUB- CLAUSE (II) OF CLAUSE (A) OF SECTION 80IB(10) OF TH E ACT. ACCORDINGLY, AS PER THE ASSESSEE IT IS ENTITLED TO COMPLETE THE CONSTRUCTIO N OF THE PROJECT WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH T HE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY I.E. UPTO 31-3-2009 . THE ASSESSEE FURNISHED THE NECESSARY COMPLETION CERTIFICATES ISSUED BY PMC , AS DETAILED BY THE ASSESSING OFFICER IN PARA 2.1 OF THE ASSESSMENT ORD ER, AS PER WHICH THE FINAL COMPLETION CERTIFICATE WAS ISSUED BY THE PMC ON 20. 12.2008. ON THIS BASIS, THE ASSESSEE ASSERTED THAT IT HAD COMPLIED WITH THE CONDITION PRESCRIBED IN CLAUSE (A) OF SECTION 80IB(10) OF THE ACT. ON THE C ONTRARY, THE CLAIM OF THE ASSESSING OFFICER IS TO THE EFFECT THAT THE DATE OF FIRST APPROVAL GRANTED BY THE PMC IS TO BE CONSIDERED, WHICH IS 02.11.2003 AND N OT 19.01.2005, WHICH IS THE DATE ON WHICH A REVISED PLAN HAS BEEN APPROVED BY PMC. THEREFORE, AS PER THE ASSESSING OFFICER, PERIOD AVAILABLE FOR COM PLETION OF CONSTRUCTION SHALL BE GOVERNED BY SUB-CLAUSE (I) OF CLAUSE (A) OF SECT ION 80IB(10) OF THE ACT, AND ACCORDINGLY THE CONSTRUCTION OF THE PROJECT WAS TO BE COMPLETED BY 31.3.2008. SINCE THE FINAL COMPLETION CERTIFICATE IN RESPECT O F ASSESSEES HOUSING PROJECT HAS BEEN ISSUED BY THE PMC ON 20.12.2008, AND THUS AS PER THE ASSESSING ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 OFFICER, PROJECT OF THE ASSESSEE DOES NOT COMPLY WI TH THE REQUIREMENTS OF CLAUSE (A) OF SECTION 80IB(10) OF THE ACT. EXPLANAT ION (I) TO CLAUSE (A) OF SECTION 80IB(10) PRESCRIBES THAT IN A CASE WHERE TH E APPROVAL IN RESPECT OF HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HO USING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH T HE BUILDING PLAN OF THE HOUSING PROJECT WAS FIRST APPROVED BY THE LOCAL AU THORITY. THE ASSESSING OFFICER HAS NOTED THAT THE COMPLETION CERTIFICATE I SSUED BY THE PMC REFERRED TO FIRST COMMENCEMENT CERTIFICATE DATED 02.11.2003 AND THEREFORE ACCORDING TO HIM, HAVING REGARD TO THE PRESCRIPTION OF EXPLANATI ON (I) BELOW CLAUSE (A) OF SEC. 80IB(10) OF THE ACT, WHICH HAS BEEN REPRODUCED ABOVE, THE DATE OF APPROVAL OF THE HOUSING PROJECT FOR THE PURPOSES OF CLAUSE (A) HAS TO BE RECKONED AS 02.11.2003 I.E WHEN THE PROJECT WAS FIR ST APPROVED BY THE LOCAL AUTHORITY. ACCORDING TO ASSESSING OFFICER IN THE IN STANT CASE, THE APPROVAL GRANTED BY PMC ON 19.01.2005 IS A REVISED SANCTION, WHEREAS THE ORIGINAL SANCTION WAS DATED 02.11.2003 AND THEREFORE THE PER IOD ALLOWED FOR COMPLETION OF CONSTRUCTION IN THIS CASE HAS TO BE I N TERMS OF SUB-CLAUSE (I) OF CLAUSE (A) OF SECTION 80IB(10) OF THE ACT MEANING T HEREBY THAT THE CONSTRUCTION OF THE PROJECT IS TO BE COMPLETED ON OR BEFORE 31.0 3.2008. AS THE ASSESSEE HAD OBTAINED THE FINAL COMPLETION CERTIFICATE FROM THE PMC AFTER 31.03.2008, IT WAS HELD BY THE ASSESSING OFFICER THAT THE ASSESSEE DID NOT FULFILL THE CONDITION PRESCRIBED IN CLAUSE (A) TO SECTION 80IB(10) OF THE ACT. ACCORDINGLY, THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IB(10 ) OF THE ACT AMOUNTING TO RS. 1,46,24,573 WAS REJECTED BY THE ASSESSING OFFIC ER. 6. FROM THE AFORESAID, IT IS CLEAR THAT THE CRUX OF THE CONTROVERSY IS TO DETERMINE THE DATE ON WHICH THE HOUSING PROJECT OF THE ASSESSEE HAS BEEN APPROVED BY THE LOCAL AUTHORITY AS CONTAINED IN CLAUSE (A) TO SECTION 80IB(10) OF THE ACT SO AS TO DECIDE WHETHER THE DAT E OF COMPLETION OF CONSTRUCTION IS TO BE GOVERNED BY SUB-CLAUSE (I) OR BY SUB-CLAUSE (II) OF CLAUSE (A) TO SECTION 80IB(10) OF THE ACT. NOTABLY, THE CI T(A) HAS UPHELD THE STAND OF ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 THE ASSESSEE BY APPRECIATING THE FACTUAL POSITION A ND IN PARTICULAR THE FOLLOWING DISCUSSION IN HIS ORDER IS RELEVANT: IT IS A MATTER OF RECORD THAT THE APPELLANT FIRM I TSELF CAME INTO EXISTENCE ON 20.07.2004 AS PER THE PARTNERSHIP DEED. IT WAS A SEPARATE LEGAL ENTITY THAN THE EARLIER OWNERS OF THE PROPERTY BEING THE MAHAVI R PARK CO.OPERATIVE SOCIETY, OF WHICH THE POWER OF ATTORNEY HOLDERS WER E SHRI. DILIP PARDESI, SECRETARY OF THE SOCIETY AND OTHERS. AFTER THIS, TH E PARTNERSHIP FIRM OBTAINED THE DEVELOPMENT RIGHTS OF THE PLOT OF 7826.89 SQ. M TRS. OF LAND ON 01.10.2004. IT HAS ALSO BEEN CLARIFIED THAT ORIGINALLY THERE WE RE THREE DIFFERENT PLOTS AND IT WAS IN RESPECT OF ONE OF THESE PLOTS ADMEASURING 19 83 SQ. MTRS. THAT BUILDING PLAN APPROVAL WAS OBTAINED VIDE COMMENCEMENT CERTIF ICATE DATED 01.11.2003, WHICH HAS BEEN REFERRED TO IN THE ASSESSMENT ORDER. HOWEVER, IT HAS BEEN CLARIFIED BY THE PMC THAT NO DEVELOPMENT WAS CARRIE D OUT ON ANY OF THE THREE DIFFERENCE PLOTS SANCTIONED IN 2003. SUBSEQUENTLY, ON 20.07.2004, THE PMC VIDE COMMENCEMENT CERTIFICATE NO. DPO2822 DATED 20. 07.2004 SANCTIONED THE PLOT ADMEASURING THE AREA 7826.89 SQ. MTRS. AFT ER AMALGAMATION. IT WAS FOR DEVELOPMENT OF THIS PARTICULAR PIECE OF LAND TH AT THE APPELLANT FIRM HAD OBTAINED THE DEVELOPMENT RIGHTS AND THE BUILDING PL AN APPROVAL TAKEN IN JANUARY, 2005 WAS FOR THIS LAND; CONTAINING 4 BUILD INGS AND 112 FLATS. IT WAS ALSO CLARIFIED THAT ACCOUNT OF APPROVAL OF LAYOUT P LAN AFTER AMALGAMATION VIDE THE COMMENCEMENT CERTIFICATE NO. DPO 2822 DATED 20. 07.2004 ALL PREVIOUS APPROVALS WERE CANCELED. HOWEVER, SINCE THE ORIGINA L THREE PLOTS WERE PART OF THE AMALGAMATED PIECE OF LAND, THE BUILDING PLAN SA NCTIONED ON 19.1.2005 WAS TERMED AND APPROVED AS A REVISED PLAN. ACCORD INGLY, IT IS CONTENDED THAT THE OAKWOODS PROJECT OF THE APPELLANT FIRM CAN BE TREATED TO HAVE COMMENCED W.E.F JANUARY 2005 ONLY, AND THEREFORE, T IME WAS A AVAILABLE UPTO 31.3.2009 FOR THE COMPLETION OF THE PROJECT. ON A C AREFUL PERUSAL OF THIS EXPLANATION ALONGWITH THE LETTER DATED 31.12.2009 O BTAINED FROM PMC, IT IS HELD THAT SINCE THE APPELLANT FIRM ITSELF HAD COME INTO EXISTENCE W.E.F. 20.7.2004, THE APPROVED PLAN DATED 02.11.2003 CANNO T BE BELONGING TO THE APPELLANT FIRM. FURTHER, THE DEVELOPMENT RIGHTS OF THE AMALGAMATED PLOT OF LAND 7826.89 SQ. MTRS. WAS ITSELF OBTAINED ON 01.10 .2004. THEREFORE, THE BUILDING PLAN APPROVED VIDE COMMENCEMENT CERTIFICAT E 19.01.2005 IS HELD TO BE THE FIRST BUILDING PLAN APPROVAL IN RESPECT OF T HE APPELLANT, AND THE DATE 19.01.2005 THE DATE OF COMMENCEMENT OF THE APPELLAN TS PROJECT. SINCE IT IS NOT DISPUTED THAT THE PROJECT WAS COMPLETED BY 20. 12.2008, AND THE FINAL COMPLETION CERTIFICATE WAS ALSO OBTAINED ON THIS DA TE, IT IS HELD THAT THE APPELLANTS PROJECT WAS COMPLETED WITHIN STIPULATED TIME 80IB(10)(A)(II) OF THE I.T.ACT, 1961. THE DEDUCTION 80IB(10) IS THEREFORE, HELD TO BE ALLOWABLE. GROUNDS OF APPEAL NOS. 2 & 3 ARE, THEREFORE, ALLOWE D. ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 7. BEFORE US THE LEARNED CIT(DR) APPEARING FOR THE REVENUE HAS PRIMARILY RE-ITERATED THE OBJECTION RAISED BY THE ASSESSING O FFICER WHICH IS TO THE EFFECT THAT THE COMPLETION CERTIFICATE ISSUED BY THE PMC I TSELF CONTAINS REFERENCE TO THE FIRST SANCTION OF 02.11.2003 AND THEREFORE THE CASE OF THE ASSESSEE WAS TO BE GOVERNED BY SUB-CLAUSE (I) OF CLAUSE (A) OF SECT ION 80IB(10) OF THE ACT. 8. ON THE OTHER HAND, THE LEARNED COUNSEL APPEARING FOR THE RESPONDENT ASSESSEE HAS VEHEMENTLY SUBMITTED THAT THE COMMENCE MENT CERTIFICATE DATED 02.11.2003 WAS ON A PLOT OF 1983 SQ. MTS., WHICH WA S OBTAINED BY THE PREVIOUS OWNERS. THE PREVIOUS OWNERS AMALGAMATED TH E ADJOINING PLOT SUBSEQUENTLY AND SUCH AMALGAMATED REVISED LAYOUT WA S SANCTIONED BY THE PMC VIDE COMMENCEMENT CERTIFICATE DATED 02.07.2004 TO CREATE A PLOT OF 7826.89 SQ. MTRS. THE ASSESSEE FIRM WAS INCORPORATE D ON 20.07.2004 AND IN TERMS OF A DEVELOPMENT AGREEMENT DATED 01.10.2004, IT ACQUIRED THE DEVELOPMENT RIGHTS OF THIS PLOT OF 7826.89 SQ. MTRS . THEREAFTER THE BUILDING PLAN APPROVAL WAS FIRST TIME OBTAINED BY THE ASSESS EE ON 19.01.2005 ON SUCH PLOT AREA. THE LEARNED COUNSEL POINTED OUT THAT BEF ORE ACQUISITION OF THE PLOT BY THE ASSESSEE THERE WAS NO DEVELOPMENT TAKEN UP A ND THAT THE SANCTION OF 2.11.2003 REFERRED BY THE ASSESSING OFFICER WAS ON A PLOT OF 1983 SQ. MTRS. ONLY WHICH WAS OBTAINED BY THE PREVIOUS OWNER BUT N O DEVELOPMENT EVER TOOK PLACE EVEN AS PER THAT SANCTION. THEREFORE, IT WAS POINTED OUT THAT MERELY BECAUSE THE BUILDING PLAN APPROVAL DATED 19.01.2005 ISSUED THE PMC MENTIONS IT AS A REVISED APPROVAL, IT CANNOT BE TRE ATED AS THE FIRST BUILDING PLAN APPROVAL FOR THE PROJECT UNDERTAKEN BY THE ASSESSEE . IN THIS CONNECTION THE LEARNED COUNSEL HAS REFERRED TO THE DETAILED SUBMIS SION MADE BEFORE THE CIT (APPEALS) WHICH HAVE BEEN REPRODUCED IN THE IMPUGNE D ORDER AND IN PARTICULAR REFERENCE HAS BEEN MADE TO A LETTER DATED 31.12.200 9 ISSUED BY PMC WHICH CLARIFIED THAT PRIOR TO ASSESSEE ACQUIRING THE PLOT OF 7826.89 SQ. MTRS. ON 01.10.2004, THE PREVIOUS OWNERS HAD THREE DIFFERENT PLOTS AND IT WAS IN RESPECT OF ONE SUCH PLOT ADMEASURING 1983 SQ. MTRS. THE BUI LDING PLAN APPROVAL WAS ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 OBTAINED ON 2.11.2003 AS REFERRED BY ASSESSING OFFI CER. THE PMC HAD CLARIFIED THAT NO DEVELOPMENT WAS CARRIED OUT ON AN Y OF THE THREE DIFFERENT PLOTS AND IT WAS ONLY ON 20.07.2004 THAT THE PMC AMALGAMA TED THE PLOTS INTO A SINGLE PLOT OF 7826.89 SQ. MTRS. , WHOSE DEVELOPMEN T RIGHTS WERE OBTAINED BY THE ASSESSEE ON 1.10.2004 AND THE ASSESSEE OBTAINED APPROVAL FOR DEVELOPMENT OF SAID PLOT IN JANUARY 2005. IN PARTIC ULAR, THE LEARNED COUNSEL HAS REFERRED TO THE COPY OF COMMUNICATION OF PMC DA TED 31-12-2009, PLACED AT PAGES 163-165 OF THE PAPER BOOK TO SUBMIT THAT A S PER THE PMC ON ACCOUNT OF APPROVAL OF LAYOUT PLAN AFTER AMALGAMATION OF PL OTS ON 20-07-2004 ALL PREVIOUS APPROVAL WERE CANCELLED. EVEN WITH REGARD TO THE PRESENCE OF THE EXPRESSION REVISED PLAN ON THE CERTIFICATE ISSUED B Y PMC ON 19.1.2005, THE LEARNED COUNSEL REFERRED TO THE CLARIFICATION OF TH E PMC TO POINT OUT SINCE THE ORIGINAL THREE PLOTS WERE PART OF THE AMALGAMATED P LOT, THE BUILDING PLAN SANCTIONED ON 19.1.2005 CONTAINED THE EXPRESSION RE VISED PLAN. 9. ON THE BASIS OF THE AFORESAID, IT IS SOUGHT TO B E MADE OUT THAT THE PROJECT OF THE ASSESSEE I.E., OAKWOODS IS TO BE TREATED TO HAVE COMMENCED W.E.F. 19.1.2005 AND THEREFORE THE TIME AVAILABLE F OR COMPLETION OF CONSTRUCTION WAS UPTO 31.3.2009. THE LEARNED COUNSEL FURTHER POI NTED OUT THAT THE LETTER FROM PMC DATED 31.12.2009 COULD NOT BE OBTAINED AT THE TIME OF ASSESSMENT DUE PAUCITY OF TIME AND THEREFORE IT WAS PRODUCED B EFORE THE CIT (APPEALS) AS ADDITIONAL EVIDENCE IN TERMS OF RULE 46A OF THE INC OME TAX RULES 1962 AND HAS BEEN RIGHTLY ADMITTED BY THE CIT (APPEALS) TO A DJUDICATE THE CONTROVERSY. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. FACTUALLY SPEAKING, IT WOULD BE PERTINENT TO OBSERVE THAT THE ASSESSEE FIRM WAS INCORPORATED ON 20-07-2004 IN TERMS OF PARTNERSHIP DEED, A COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGES 7-12. FURTHER, ASSESSEE ACQ UIRED DEVELOPMENT RIGHTS IN RESPECT OF A PLOT OF LAND ADMEASURING 7826.89 SQ . MTRS. SITUATED AT S.NO. 209, HISSA NO. 2 OF VILLAGE LOHGAON, TAL. HAWELI, D IST. PUNE BY WAY OF A ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 DEVELOPMENT AGREEMENT DATED 1.10.2004 AND ALSO OBTA INED POSSESSION OF THE SAME ON SUCH DATE, COPIES OF THE DEVELOPMENT AGREEM ENT, ETC. ARE PLACED AT PAGES 13-81 OF THE PAPER BOOK. NOW, THE CASE OF THE ASSESSEE IS THAT IT HAS UNDERTAKEN DEVELOPMENT AND BUILDING OF A HOUSING PR OJECT ON THE AFORESAID PIECE OF LAND, A FACT SITUATION WHICH IS NOT IN DIS PUTE. THE ASSESSEE OBTAINED A COMMENCEMENT CERTIFICATE DATED 12.1.2005 WHICH WAS A LAYOUT PLAN APPROVAL FROM THE PMC FOR DEVELOPMENT OF THE SAID PLOT OF LA ND OF 7826.89 SQ. MTRS., A COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGES 90-91. THE APPROVAL OF THE CORRESPONDING BUILDING PLANS BY THE PMC IS DATED 19-01-2005, WHICH IS PLACED AT PAGES 93-94 OF THE PAPER BOOK. T HE AFORESAID FACTS ARE NOT IN DISPUTE. AS PER THE ASSESSEE THE PROJECT ELIGIBL E FOR 10IB(10) BENEFIT IS THE PROJECT UNDERTAKEN ON THE PLOT OF 7826.89 SQ. MTRS. WHOSE LAYOUT PLAN WAS APPROVED BY THE PMC ON 12.1.2005 AND BUILDING PPLAN S WERE APPROVED ON 19.1.2005. 11. AS NOTED EARLIER, THE DATE OF APPROVAL OF THE P ROJECT IS RELEVANT TO ASCERTAIN THE PERMISSIBLE PERIOD OF COMPLETION OF C ONSTRUCTION. IN TERMS OF SUB- CLAUSES (I) AND (II) OF CLAUSE (A) TO SEC. 80IB(10) OF THE ACT, THE DETERMINATION OF DATE OF COMPLETION OF CONSTRUCTION IS TO BE RECK ONED WITH REFERENCE TO THE DATE OF APPROVAL BY THE LOCAL AUTHORITY. THE EXPLAN ATION (I) BELOW CLAUSE (A) TO SEC. 80IB(10) OF THE ACT PRESCRIBES THAT IN A CASE WHERE THE APPROVAL IN RESPECT OF A HOUSING PROJECT IS OBTAINED MORE THAN ONCE SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE O N WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY T HE LOCAL AUTHORITY. NOTABLY, EXPLANATION (I) IS TO BE APPLIED IN A SITUATION WHE RE IN RESPECT OF A HOUSING PROJECT, APPROVALS HAVE BEEN OBTAINED MORE THAN ONC E. PERTINENTLY THE SAID EXPLANATION IS NOT RELEVANT TO A CASE WHERE APPROVA LS ARE GRANTED TO DIFFERENT HOUSING PROJECTS. THE AFORESAID UNDERSTANDING OF EX PLANATION (I) TO CLAUSE (A) OF SECTION 80IB(10) OF THE ACT IS IN LINE WITH THE JUDGMENT OF THE HONBLE ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 BOMBAY HIGH COURT IN CASE OF CIT V/Z VANDANA PROPER TIES 19 TAXMANN.COM 316 (BOMBAY) WHOSE RELEVANT PORTION IS REPRODUCED A S UNDER : RELIANCE PLACED BY THE REVENUE ON THE EXPLANATION TO SECTION 80IB(10)(A) WHICH WAS INTRODUCED WITH EFFECT FROM 1 ST APRIL 2005 IS ALSO MISPLACED. WHAT THE SAID EXPLANATION CONTEMPLATES I S THAT WHERE THE APPROVAL IN RESPECT OF A HOUSING PROJECT IS GRANTED MORE THA N ONCE, THEN, THAT HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON TH E DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPR OVED BY THE LOCAL AUTHORITY. FOR EXAMPLE, IN RESPECT OF A HOUSING PROJECT, THE A SSESSEE MAY SEEK AMENDMENT OF THE BUILDING PLAN AT SEVERAL STAGES OF THE CONSTRUCTION AND THE SAME MAY BE APPROVED. IN SUCH A CASE, THE EXPLANATI ON PROVIDES THAT FOR THE PURPOSES OF SECTION 80IB(10) THE HOUSING PROJECT SH ALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE FIRST APPROV AL WAS GRANTED BY THE LOCAL AUTHORITY. THUS, THE EXPLANATION TO SECTION 8 0IB(10)(A) REFERS TO THE APPROVAL GRANTED TO THE SAME HOUSING PROJECT MORE T HAN ONCE AND THE SAID EXPLANATION WOULD NOT APPLY WHERE THE APPROVAL IS G RANTED TO DIFFERENT HOUSING PROJECTS. IN THE PRESENT CASE, AS NOTED EARLIER, CONSTRUCTIO N OF E; BUILDING CONSTITUTES AN INDEPENDENT HOUSING PROJECT AND, THE REFORE, THE DATE ON WHICH THE EARLIER HOUSING PROJECT HAD COMMENCED CONSTRUCT ION COULD NOT BE APPLIED TO THE HOUSING PROJECT CONSISTING OF E BUILDING M ERELY BECAUSE THE CONDITIONS SET OUT WHILE GRANTING APPROVAL TO THE EARLIER HOUS ING PROJECT HAVE ALSO BEEN MADE APPLICABLE TO THE HOUSING PROJECT IN QUESTION . [UNDERLINED FOR EMPHASIS BY US] 12. WE ARE ONLY TRYING TO EMPHASIS THE AFORESAID FO R THE REASON THAT EXPLANATION (I) TO CLAUSE OF SECTION80IB(10) OF THE ACT HAS BEEN WRONGLY APPLIED BY THE AUTHORITIES BELOW. THE SAID EXPLANAT ION IS TO BE APPLIED WITH REFERENCE TO THE PROJECT OF THE ASSESSEE AND NOT TO A PROJECT OWNED BY PREVIOUS OWNERS AND THAT TOO ON A DIFFERENT PLOT SI ZE. INFACT, FACTUALLY SPEAKING THE ASSESSEE BROUGHT TO THE NOTICE OF THE LOWER AUT HORITIES THAT THE BUILDING PLAN APPROVAL DATED 2.11.2003 REFERRED BY THE ASSES SING OFFICER IS FOR A PROJECT DISTINCT THAN THE PROJECT OF THE ASSESSEE, WHOSE BUILDING PLAN APPROVAL WAS FIRST MADE ON 19.1.2005. IT CANNOT BE DENIED TH AT THE APPROVAL ON 2.11.2003 WAS BY THE PREVIOUS OWNERS IN AS MUCH AS THE ASSESSEE WAS INCORPORATED ON 20.7.2004 ONLY. ASSESSEE ACQUIRED D EVELOPMENT RIGHTS OF THE PLOT OF 7826.89SQ. MTRS. OF LAND ONLY ON 1-10-2004. ORIGINALLY THERE WERE THREE DIFFERENT PLOTS AND IT WAS IN RESPECT OF ONE OF THE SE PLOTS ADMEASURING 1983SQ. ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 MTRS. THAT THE PREVIOUS OWNER OBTAINED A BUILDING P LAN APPROVAL DATED 01-11- 2003, WHICH HAS BEEN REFERRED TO IN THE ASSESSMENT ORDER. IT HAS BEEN BROUGHT OUT BY THE CIT(APPEALS) THAT NO DEVELOPMENT WORK WA S CARRIED OUT ON ANY OF THE THREE PLOTS SANCTIONED IN 2003. BEFORE ACQUISIT ION BY THE ASSESSEE, THE THREE PLOTS WERE AMALGAMATED AND ASSESSEE ACQUIRED THE AMALGAMATED PLOT AND MADE NEW LAYOUT AND BUILDING PLANS WHICH WERE L ATER APPROVED BY PMC IN 2005. THEREFORE, THE BUILDING PLAN APPROVAL DATED 1 9-01-2005 IS THE FIRST BUILDING PLAN APPROVAL IN RESPECT OF THE ASEESSEES PROJECT. MOREOVER, AT PAGE 92 OF PAPER BOOK, ASSESSEE HAS MADE A STATEMENT SHO WING THE DIFFERENCE IN THE LAYOUT AND BUILDING PLAN SUBMITTED BY THE PREVI OUS OWNER WITH RESPECT TO 2003 APPROVAL AND THE IMPUGNED PROJECT OF THE ASSES SEE. THE AFORESAID DIFFERENCE WAS VERY MUCH BEFORE THE LOWER AUTHORITI ES AND READS AS UNDER:- PARTICULARS PLAN 2003 PLAN 2005 PLOT AREA ON WHICH SANCTIONED OBTAINED NO. OF BUILDINGS NO. OF FLOORS IN EACH BUILDINGS NO. OF FLATS COMPLAINT WITH THE PROVISION OF 80IB(10) WITH RESPECT TO PLOT AREA 1997.73 SQ. MTRS. 2 4 28 NO 7286.89 SQ. MTRS. 4 7 112 YES 13. FURTHER IN OUR CONSIDERED OPINION THE FACTUAL F INDINGS OF THE CIT(APPEALS) BASED ON THE COMMUNICATION OF PMC DTD. 31.12.2009 WHICH HAVE BEEN EXTRACTED IN THE EARLIER PART OF THIS ORD ER, CLEARLY BRINGS OUT THE DISTINCTION THAT THE BUILDING PLAN APPROVAL OF 2003 CANNOT BE CONSTRUED AS THE FIRST APPROVAL FOR ASSESSEES PROJECT WHICH WAS ON A AMALGAMATED PLOT OF LAND OF 7826.89 SQ. MTRS.THE PMC HAS FURTHER CLARIFIED T HAT ONCE THE PREVIOUS OWNERS AMALGAMATED THE THREE PLOTS INTO A PLOT OF L AND OF 7826.89 SQ. MTRS. ON 20.7.2004, ALL PREVIOUS APPROVALS WERE CANCELLED. T HE ASSESSEE CAME INTO PICTURE ONLY ON 1.10.2004 AND ACQUIRED THE RIGHTS O F SUCH 7826.89 SQ. MTRS. OF PLOT AND THEREFORE 19.1.2005 BUILDING PLAN APPROVAL IS TO BE CONSIDERED FIRST APPROVAL BY THE LOCAL AUTHORITY OF THE ASSESSEES H OUSING PROJECT IN QUESTION. ITA NO. 1218/PN/2010 M/S A. V. BHAT DEVELOPERS A.Y. 2007-08 14. AS A CONSEQUENCE, THE DATE OF COMPLETION OF CON STRUCTION OF SUCH PROJECT IS TO BE GOVERNED BY SUB-CLAUSE (II) OF CLA USE(A) TO SEC.80IB(10) AND ACCORDINGLY THE ASSESSEE WAS ENTITLED TO COMPLETE T HE CONSTRUCTION BY 31.3.2009. THE ASSESSEE OBTAINED THE FINAL COMPLETI ON CERTIFICATE ON 20-12- 2008, AS NOTED BY THE ASSESSING OFFICER IN THE ASSE SSMENT ORDER AND THEREFORE IN OUR VIEW THE CIT(APPEALS) MADE NO MIST AKE IN HOLDING THAT THE ASSESSEE COMPLIES WITH THE CONDITION PRESCRIBED IN CLAUSE (A) OF SECTION 80IB(10) OF THE ACT. AS A RESULT, WE HEREBY AFFIRM THE ORDER OF THE CIT(APPEALS) ALLOWING ASSESSEES CLAIM FOR DEDUCTION UNDER SECTI ON 80IB(10)OF THE ACT. 15. IN RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 25 TH JUNE, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE.