M/s Bhujbal Construction Co., Pune V. ITO, Pune

ITA 125/PUN/2013

• Counselvise Citation: 12524514 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 11-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Reasonable cause
• Section: 80IB; 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.125/PN/2013 (ASSESSMENT YEAR 2009-10) M/S. BHUJBAL CONSTRUCTION COMPANY, GAT NO.12/29, PASHAN, TAL : HAVELI, DISTRICT PUNE-411008 .. APPELLANT PAN NO.AAFFB7317L VS. ITO, WARD-4(6), PUNE .. RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI REVENUE BY : SHRI S.P. WALIMBE DATE OF HEARING : 07-02-2014 DATE OF PRONOUNCEMENT : 11-02-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 07-09-2012 OF THE CIT(A)-II, PUNE RELATING TO ASSES SMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPING HOUSING PROJE CTS. IT FILED ITS RETURN OF INCOME ON 24-12-2009 DECLARING NIL INCOME AFTER CLAIMING DEDUCTION OF RS.1,61,64,219/-. DURING THE COURSE OF ASSESSME NT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE HOUSING PROJECT OF THE ASSESSEE IS APPROVED BY THE LOCAL AUTHORITY ON 06-12-2003 ACCOR DING TO WHICH THE RESIDENTIAL AREA AS PER PLAN IS 7172.09 SQ. MTRS. A ND THE COMMERCIAL AREA OF 770.74 SQ. MTRS. I.E.,8296.44 SQ.FT. IS MORE THA N 2000 SQ.FT. THE ASSESSEE FURTHER HAD A REVISED APPROVED PLAN DATED 30-07-2005 ACCORDING TO WHICH THERE ARE 11 BUILDINGS WHICH CAN BE CLASSI FIED AS UNDER : 2 RESIDENTIAL BUILDINGS : A2, B2, B3, C1, C2, C3, F ( TOTAL 237 TENEMENTS) COMMERCIAL BUILDINGS : A1, B1, D, E WHICH ARE PUREL Y FOR COMMERCIAL PURPOSES 2.1 HE OBSERVED THAT THE ASSESSEE RECEIVED PART COM PLETION CERTIFICATE OF THE PMC ACCORDING TO WHICH THE FOLLOWING BUILDIN GS WERE COMPLETED BY 31-03-2008: B2, B3, C2, C3 (TOTAL 172 TENEMENTS) D, E (TOTAL 24 SHOPS AND 30 OFFICES 2.2 THE ASSESSING OFFICER THUS OBSERVED THAT OUT OF THE RESIDENTIAL BUILDINGS APPROVED VIDE PLAN DATED 30-07-2005 BUILD INGS A1, A2, B1, C1 AND F REMAIN TO BE COMPLETED BY 31-03-2008. HE, THEREFORE, CAME TO THE CONCLUSION THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10) SINCE IT HAS DEFAULTED IN RESPECT OF THE FOLLOWING PROVISIONS LAID DOWN IN THE ACT: (A) COMPLETION WAS NOT WITHIN STIPULATED TIME (B) COMMERCIAL AREA IS MORE THAN 2000 SQ.FT. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE DEDUCTION CLAIMED U/S.80IB(10) SHOULD NOT BE DISALLOWED. REJ ECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND DISTINGUISHI NG THE VARIOUS DECISIONS CITED BEFORE HIM THE ASSESSING OFFICER RE JECTED THE CLAIM OF THE ASSESSEE. WHILE DOING SO, HE FURTHER NOTED THAT UN DER IDENTICAL FACTS AND CIRCUMSTANCES THE CIT(A) HAS UPHELD THE DISALLOWANC E MADE BY THE ASSESSING OFFICER U/S. 80IB(10) FOR THE A.Y. 2006-0 7. THE ASSESSING OFFICER IN THE SAID YEAR HAS DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) OF THE I.T. ACT ON THE GROUND THAT (A) COMMERCIAL A REA IN THE PROJECT WAS MORE THAN 2000 SQ.FT. AND (B) THE COMPLETION WAS NO T WITHIN THE 3 STIPULATED TIME AND THEREFORE THE ASSESSEE HAD VIOL ATED THE PROVISIONS OF SECTION 80IB(10). RELYING ON THE ORDER OF THE CIT(A ) IN ASSESSEES OWN CASE FOR A.Y. 2006-07 WHEREIN THE CIT(A) HAS DISMIS SED THE APPEAL OF THE ASSESSEE AND OBSERVING THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES AND OTHERS HAS REJECTED THE CLAIM FOR PROPORTIONATE DEDUCTION U/S.80IB(10) THE ASSESSING OFFICER DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10). IN APPEAL THE L D.CIT(A) FOLLOWING THE ORDER OF THE CIT(A) IN CASE OF THE ASSESSEE FOR A.Y RS. 2006-07, 2007-08 & 2005-06 UPHELD THE DISALLOWANCE MADE BY THE ASSES SING OFFICER U/S.80IB(10). 3. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : WITHOUT PREJUDICE TO EACH OTHER 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A|-II, PUNE WAS NOT JUSTIFIED IN CONFIRMING THE R EJECTION OF THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT MADE BY THE A. O. FOR VIOLATION OF PROVISIONS OF S. 80IB(10)(A)(I) OF THE ACT WITHOUT AP PLICATION OF MIND WHEN SUCH CONTRAVENTION WAS NOT THERE AS PER PROVISIONS OF THE LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A)-II, PUNE WAS ALSO NOT JUSTIFIED IN REJECTING T HE CLAIM OF DEDUCTION SO CLAIMED UNDER S. 80IB(10) OF THE ACT OF RS.1,61,64 ,219/- FOLLOWING SUCH REJECTION IN ASSTT. YRS 2005-06, 2006-07, 2007-08 AND 2008-09 AND WITHOUT APPRECIATING THE FACT THAT THE APPELLANT WA S FOLLOWING THE PERCENTAGE COMPLETION METHOD (WORK-IN-PROGRESS METHOD ) A RECOGNIZED METHOD OF ACCOUNTING AND THEREFORE, AS PER PRECEDENT S WAS NOT REQUIRED TO SUBMIT COMPLETION CERTIFICATE EVERY YEAR. THE CLA IM OF DEDUCTION BE ALLOWED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A)-II-PUNE WAS NOT JUSTIFIED IN REJECTING THE CLA IM OF DEDUCTION UNDER S. 80-IB(10) WITHOUT APPRECIATING THE LEGAL PRINCIP LE THAT THE 'HOUSING PROJECT' DOES NOT NECESSARILY HAVE TO BE VARIOUS GROUPS OF BUILDINGS CONSTRUCTED ON A PARTICULAR LAND BUT IT CAN ALSO BE A PARTICULAR BUILDING OR ANY BUILDING WHICH IS A PART OF LARGE PROJECT. THE A PPELLANT HAS ALREADY COMPLETED 4 RESIDENTIAL BUILDING AS PER APPROVED PLAN AND THEREFORE, WAS ENTITLED TO CLAIM DEDUCTION U/S.80-IB(10) OF THE ACT . IT BE ALLOWED ACCORDINGLY. 4 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W AND SINCE THE HOUSING PLANS WERE APPROVED PRIOR TO THE AMENDMEN T MADE EFFECTIVE FROM 01-04-2005 IN S. 80IB(10)(D) THE DEDUCTION U/S 80IB(10) COULD NOT BE DENIED ON THE PLEA THAT THE COMMERCIAL BUILT UP AREA IN THE HOUSING PROJECT WAS IN EXCESS OF THAT ONE MENTIONED IN S.80IB( 10) OF THE ACT AS THE HOUSING PROJECT APPROVED PRIOR TO 01-04-2005 HAD NO SUCH PROVISION IN THE ACT. THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DENYING THE DEDUCTION FOR CONTRAVENTION OF PROVISIONS OF S. 80-IB (10)(D) OF THE ACT. IT BE HELD ACCORDINGLY AND THE DEDUCTION UNDER S. 80IB (10) BE ALLOWED AS CLAIMED. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W AND SINCE HOUSING PLAN WAS REVISED ON 30-11-2004 MEANING THEREBY THE HOUSING PROJECT WAS APPROVED NOT LATER THAN 31 ST DAY OF MARCH, 2005 THEN THE DEVELOPER ASSESSEE WAS ENTITLED TO COMPLETE SUCH CONSTRUCT ION WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR 2004-0 5 THAT IS ON OR BEFORE 31-3-2009 WITHIN THE MEANING OF S. 80-IB(10)(A)(II) OF THE ACT. ACCORDINGLY THE CONSTRUCTION WAS COMPLETE BY 31-3-200 9 AND THEREFORE, THERE WAS NO REASON TO DENY THE DEDUCTION AS ALL STATUT ORY CONDITIONS HAVE BEEN FULFILLED AND COMPLIED WITH. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W AND SINCE ALL THE REQUIRED CONDITIONS WERE COMPLIED WITH AND SINCE THERE WAS NO CONTRAVENTION OF THE PROVISIONS OF S. 80IB(10)(A)(I) AS ALLEGED THE LOWER AUTHORITIES ERRED IN REJECTING THE CLAIM OF DEDUCTIO N UNDER S. 80IB(10) OF THE ACT. IT BE ALLOWED. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE APPELLANT WAS ENTITLED TO 100% DEDUCTION OF PROFITS U NDER S. 80IB(10) ON THE HOUSING PROJECT AND BUILDINGS COMPRISED THEREIN ON 'STAND ALONE PRINCIPLE' AS PER PRECEDENTS AVAILABLE SO FAR. IT BE A LLOWED ACCORDINGLY. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LEVY OF INTEREST U/S.234B AND 234C IS NOT JUSTIFIED AND IN THE CIRCUMSTANCES IT BE DELETED. 4. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET F ILED A COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE I TA NOS.1486/PN/2009, ITA NO.282/PN/2010 AND ITA NO.620 /PN/2012 ORDER DATED 26-09-2013 FOR A.YRS. 2005-06, 2006-07 & 2007-08 RESPECTIVELY AND SUBMITTED THAT THE TRIBUNAL HAS AL LOWED THE APPEAL OF THE ASSESSEE AND THE CLAIM OF DEDUCTION U/S.80IB(10) WA S ALLOWED. HE SUBMITTED THAT SINCE THE PROJECT IS SAME ON WHICH D EDUCTION U/S.80IB(10) HAS BEEN CLAIMED AND THE REASONS FOR DENIAL OF DEDU CTION U/S.80IB(10) BY 5 THE ASSESSING OFFICER AND CIT(A) IS ALSO SOME, THER EFORE, IN VIEW OF THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.YRS. 2005-06 TO 2007-08 WHICH IS THE BASIS FOR DISALLOWANCE OF DEDU CTION U/S.80IB(10) FOR THE IMPUGNED ASSESSMENT YEAR SHOULD BE ALLOWED FOR THIS YEAR ALSO. 5. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED TH AT THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS PRESCRIBED U/S.80IB(10), I .E. (A) NOT OBTAINED THE COMPLETION CERTIFICATE BEFORE 31-03-2008 FOR THE EN TIRE PROJECT AND (B) SINCE THE COMMERCIAL AREA EXCEEDS MORE THAN 2000 SQ .FT., THEREFORE, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10). HE, HOWEVER, FAIRLY CONCEDED THAT THE TRIBUNAL IN THE PRECEDING YEARS H AS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. 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 ALS O CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASS ESSING OFFICER IN THE INSTANT CASE DENIED THE BENEFIT OF DEDUCTION U/S.80 IB(10) ON THE GROUND THAT THE ASSESSEE HAS NOT RECEIVED THE COMPLETION C ERTIFICATES IN RESPECT OF BUILDINGS A1, A2, B1, C1 AND F AND THE COMMERCIAL A REA IN THE PROJECT EXCEEDS 2000 SQ.FT. WE FIND THE ASSESSING OFFICER WHILE DENYING THE BENEFIT OF DEDUCTION U/S.80IB(10) ALSO RELIED ON TH E ORDER OF THE CIT(A) AND ASSESSEES OWN CASE FOR A.Y. 2006-07 WHEREIN TH E CIT(A) HAS UPHELD THE DENIAL OF DEDUCTION U/S.80IB(10) BY THE ASSESSING OFFICER. WE FIND THE LD.CIT(A) WHILE UPHOLDING THE DISALLOWA NCE MADE BY THE ASSESSING OFFICER, APART FROM VARIOUS OTHER DECISIO NS, RELIED ON THE ORDER 6 OF HIS PREDECESSOR FOR A.YRS. 2005-06, 2006-07 & 20 07-08 IN CASE OF THE ASSESSEE. WE FIND WHEN THE MATTER TRAVELLED UPTO T HE TRIBUNAL THE TRIBUNAL VIDE ITA NOS. NOS.1486/PN/2009, 282/PN/201 0 AND 620/PN/2012 ORDER DATED 26-09-2013 FOR A.YRS. 2005- 06, 2006-07 & 2007-08 RESPECTIVELY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER : 8. WE FIND THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF DEVELOPING OF HOUSING PROJECT ENTITLED TO CLAIM DEDU CTION UNDER SECTION 80IB(10) OF THE ACT. THE ISSUE INVOLVED IS REGARDING ALLOWABILITY OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON A PAR TIALLY COMPLETED PROJECT. THE ASSESSING OFFICER HAS DENIED THE DEDUCTION ON THE GROUND THAT PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED T IME. THERE IS NO DISPUTE WITH REGARD TO OTHER CONDITIONS LAID DOWN UND ER SECTION 80IB(10) OF THE ACT. I.E. COMMENCEMENT OF PROJECT, AREA OF L AND OF PROJECT, AREA OF LAND OF PROJECT, ETC. THE ASSESSEE'S HOUSING PROJECT WAS A PPROVED WITH COMMENCEMENT CERTIFICATE NO. PSN/0064/03 DT. 06-12- 2003 OUT OF WHICH COMPLETION CERTIFICATE WAS OBTAINED BEFORE STIPULATED TIME I.E. BEFORE 31- 03-2008 IN RESPECT OF 172 RESIDENTIAL FLATS VIDE COMPL ETION CERTIFICATE NO. L DT. 27-03-2008. THE SAME WAS REJECTED BY ASSESSING OFFI CER AND CONFIRMED BY CIT(A). THE CLAIM OF DEDUCTION IN RESPE CT OF 172 FLATS OF PROJECT COMPLETED AS RECOGNIZED BY LOCAL AUTHORITY, I.E. PMC IN ITS COMPLETION CERTIFICATE NO. 1 DT. 27-03-2008. DEDUCT ION U/S. 80IB(10) HAS BEEN REJECTED BY THE CIT(A) ON THE GROUND THAT CON DITION OF COMPLETION OF PROJECT BEFORE DUE DATE IE. 31-03-2008 AS LAID D OWN UNDER SECTION 80IB(10)(C) OF THE ACT, HAS NOT BEEN COMPLIED BY ASSESSE E WHICH IS BASIC CONDITION FOR ALLOWABILITY OF DEDUCTION UNDER SECTI ON 80IB(10) OF THE ACT. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (2013) 3 5 (CCH 10) (MUM- TRIB), WHEREIN CONDITION OF COMPLETION AS LAID DOWN UNDER SECTION 80IB(10)(A) COULD NOT BE COMPLIED WITH BECAUSE OF A STAY OF BEING GRANTED BY MRTP COURT. IN THE CASE OF THIS APPELLANT THE PROTRACTED LITIGATION CONTINUED UPTO 2010 BEFORE CIVIL COURTS I N PUNE AND IN WRIT PETITION BEFORE HON'BLE HIGH COURT. THE LITIGATION STARTED ON COMPLAINT FILED BY PUBLIC REPRESENTATIVE OF THE AREA AS A RESULT OF WHICH DEMARCATION CERTIFICATE WAS CANCELLED BY PMC AND AS A RESULT THE 'STOP-WORK-NOTICE' DT. 18-03-2006 CALLING UPON THE ASSESSEE TO STOP THE WOR K OF CONSTRUCTION WAS SERVED ON THE ASSESSEE. THEN THE SAID 'STOP-WORK-NOTICE ' WAS CHALLENGED IN CIVIL COURTS. THE CIVIL COURT WAS PLEA SED TO GRANT INJUNCTION (TEMPORARY) BUT REFUSED TO GRANT SUCH INJUNCTION FOR TWO BUILDINGS OUT OF THE SANCTIONED LAY OUT PLAN AND ASSESSEE THEN HAD TO FIL E MISC. APPLICATION NO. 37/2007 AND AFTER HEARING THE SAME THE CJ.S. ALL OWED THE SAME. THEN AGAIN THE SAID REPRESENTATIVE FILED COMPLAINT BEFORE REVENUE MINISTER ALLEGING THAT THE DEMARCATION CERTIFICATE ISSUED WAS NOT VALID. THE REVENUE MINISTER ISSUED DIRECTIONS TO THE SECRETARY AND AS A RESULT THE PMC ISSUED NOTICE UNDER SECTION 260(2) OF THE BPMC ACT , 1949, CALLING UPON THE ASSESSEE TO DEMOLISH THE STRUCTURE AS IT WAS UNAUT HORIZED. AGAIN THE ASSESSEE HAD TO FILE SUIT NO. 312/2010 BEFORE CJSD WHEN SHOW-CAUSE NOTICE DT. 20-03-2010 WAS ISSUED BY THE COURT. THEN TH E WRIT PETITION WAS FILED BEFORE HON'BLE HIGH COURT WHICH WAS DECIDED ON 14-10-2010. THIS IS HOW THE LITIGATION ENSUED IN THE MATTER. THUS F AULT OF INCOMPLETION OF CONSTRUCTION WAS NOT ATTRIBUTABLE TO ASSESSEE. IN SUCH A CASE THE CONTINGENCY EMERGED WHICH MADE THE COMPLIANCE WITH PROVISION 7 IMPOSSIBLE, THEN BENEFIT BESTOWED ON THE ASSESSEE BY LAW CANNOT BE COMPLETELY DENIED. IT IS SUBMITTED THE LIBERAL INTERP RETATION BE USED IN FAVOUR OF THE ASSESSEE AS HE WAS INCAPACITATED IN COMPLET ION THE PROJECT IN TIME FOR THE REASONS BEYOND HIS CONTROL. THUS, THE A SSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELL ED THE IMPOSSIBILITY ON PART OF THE PROJECT IN TIME. IT IS SET TLED LEGAL POSITION THAT LAW ALWAYS GIVES REMEDY AND THE LAW DOES NO WRONG TO A NY ONE NO DOUBT STRICT INTERPRETATION SHOULD BE GIVEN IN NORMAL CIRCU MSTANCES. HOWEVER WHEN ASSESSEE WAS PREVENTED BY REASONABLE CAUSE TO COMPLET E CONSTRUCTION IN TIME DUE TO INTERVENTION OF LEGAL AC TIONS LIKE NOTICE TO 'STOP-WORK- OF CONSTRUCTION' AND NOTICE TO DEMOLISH TH E CONSTRUCTION CALLING IT AS 'UNAUTHORIZED CONSTRUCTION, AND THEREFO RE, IT IS CLEAR THAT THE ASSESSEE WAS INCAPACITATED TO COMPLETE THE SAME IN TIME D UE TO REASONS BEYOND HIS CONTROL. THE ASSESSEE SHOULD NOT SUFFER FOR SAME . THE TAXING STATUTE, IT IS SUBMITTED, GRANTING INCENTIVES FOR PROMO TION OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PR OVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBE RALLY. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONI OUSLY WITH THE OBJECT OF STATUTE TO EFFECTUATE THE LEGISLATIVE INTEN TION. THIS VIEW IS FORTIFIED BY THE FOLLOWING DECISIONS WHEREIN IT HAS BE EN HELD THAT ASSESSEE IS ENTITLED TO PROPORTIONATE DEDUCTION. 8.1 WE FIND THAT IN THE CASE OF RAMSUKH PROPERTIES VS. DY. CIT CIR-2 PUNE (2012) 138 ITD 278 (PUNE) IT HAS BEEN HELD AS UN DER: 6, AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE IS A FIRM ENGAGED IN BUSINESS OF B UILDER AND PROMOTER. THE ISSUE BEFORE US IS REGARDING ALLOWABILITY OF DEDUCTION U/S.80IB(10) OF THE ACT ON PARTIALLY COMPLETE PROJEC T. THE ASSESSING OFFICER HAS DENIED THE DEDUCTION ON THE GROUND THAT PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED TIME. THERE IS NO DISPU TE WITH REGARD TO OTHER CONDITIONS LAID U/S.80IB(10) OF THE ACT, I.E., COMMENCEMENT OF PROJECT, AREA OF LAND OF PROJECT, ETC. ASSESSEE'S HOUSIN G PROJECT WAS APPROVED VIDE COMMENCEMENT CERTIFICATE NO.3837/04 D ATED 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 REQU EST FOR GRANTING WHOLE DEDUCTION IN RESPECT OF WHOLE PROJECT HAS RIGHT LY BEEN REJECTED BECAUSE DEDUCTION U/S.80IB(10) COULD NOT BE GRANTED TO ASSESSEE ON INCOMPLETE CONSTRUCTION AT RELEVANT POINT 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 CERTIFICATENO.BCO/03/01333 DATED 31.03.2 008, THE LD. AUTHORISED REPRESENTATIVE HEAVILY RELIED ON DECISION O F BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRIGADE ENTERPRISES P . LTD. (SUPRA), AIR DEVELOPER (SUPRA), SHETH DEVELOPERS (SUPRA) AND AL SO G.V. CORPORATION (SUPRA), WHEREIN DEDUCTION U/S.80IB(10) W AS DENIED AS SIZE OF SOME OF THE RESIDENTIAL UNITS EXCEEDED PRESCRIBED LI MIT 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 HOLD GOOD IN ITS OWN SPHERE. HOWEVER, IN CASE BEFORE U S, DEDUCTION U/S.80IB(10) OF THE ACT HAS\BEEN REJECTED ON THE GRO UND THAT CONDITION OF COMPLETION OF PROJECT BEFORE THE DATE I.E., 31.03.2 008 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.80I B(10) OF THE ACT. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (SUPRA), WHE REIN 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. T HUS FAULT OF 8 INCOMPLETION OF CONSTRUCTION WAS NOT ATTRIBUTABLE TO ASSESSEE. IN CASE SUCH A CONTINGENCY EMERGES WHICH MAKES THE COMPLIANCE WITH PROVISION IMPOSSIBLE, THEN BENEFIT BESTOWED ON AN ASSESSEE CANNOT B E COMPLETELY DENIED. SUCH LIBERAL INTERPRETATION SHOULD BE USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLETING PROJECT IN TI ME FOR THE REASONS BEYOND HIS CONTROL. IN CASE BEFORE US, AS STATED ON BE HALF OF ASSESSEE, THAT ASSESSEE SUBMITTED CERTAIN MODIFICATIONS/RECTIFICATIONS FO R TOP FLOORS OF BUILDING. THE SAID MODIFICATION/RECTIFICATION COULD NOT BE COMPLETED AS LOCAL AUTHORITY COULD NOT APPROVE THE MODIFICATION AS THEIR FILES HAVE BEEN TAKEN OVER BY CONCERN INTELLIGENCE DEPARTMENT FOR I NVESTIGATION OF VIOLATION OF URBAN LAND CEILING ACT APPLICABLE TO L AND IN QUESTION AT RELEVANT POINT OF TIME. THIS FACT HAS NOT BEEN DISPUTE D ON BEHALF OF REVENUE. THUS, ASSESSEE WAS PREVENTED BY SUFFICIENT REASON ABLE CAUSE WHICH COMPELLED THE IMPOSSIBILITY ON PART OF THE ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME. IT IS SETTLED LEGAL P OSITION THAT THE LAW ALWAYS GIVE REMEDY AND THE LAW DOES WRONG TO NO ONE. WE AGREE TO PROPOSITION PUT FORWARD BY LD. DEPARTMENTAL REPRESENT ATIVE THAT PLAIN READING OF SECTION 80IB (10) OF THE ACT SUGGESTS ABOUT ONLY COMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONGWIT H THE WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMAL CIRCUMSTANCES. HOWEVER, IN CASE BEFORE US, ASSESSEE WAS PRE VENTED BY REASONABLE CAUSE TO COMPLETE CONSTRUCTION IN TIME DUE TO INTERVENTION OF CID ACTION ON ACCOUNT OF VIOLATION OF PROVISIONS OF U RBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. ASSESSEE WAS INCAPACITATE D TO COMPLETE THE SAME IN TIME DUE TO REASONS BEYOND HIS CONTROL. ASSESSE E SHOULD NOT SUFFER FOR SAME. THE REVISION OF PLAN IS VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STRICT PROVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTION OF GROWTH AND DEVE LOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. AT THE SAME TIME, RE STRICTION THEREON TOO HAS TO BE CONSTRUED STRICTLY SO AS TO ADVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVISIONS OF TAXING STAT UTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUE TO EF FECTUATE THE LEGISLATIVE INTENTION. IN VIEW OF ABOVE FACTS AND CIR CUMSTANCES, WE HOLD THAT ASSESSEE IS ENTITLED FOR BENEFIT U/S.80IB(10) OF THE ACT IN RESPECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMIT. THE ASSESSIN G OFFICER IS DIRECTED ACCORDINGLY. 8.2 FURTHER, WE FIND THAT IN THE CASE OF RAHUL CONSTR UCTION CO., VS. ITO, (2012) 21 TAXMANN.COM 435 (PUNE) IT HAS BEEN HELD AS UNDER: 10. IN VIEW OF ABOVE DISCUSSION, WE COME TO THE CONCL USION THAT FOR VERIFICATION OF ELIGIBILITY OF BENEFIT CLAIMED U/S. 80IB(10) OF THE ACT BY THE ASSESSEE OF BUILDINGS AL TO A5 IN 'ATUL NAGAR' AND BUILD INGS BL TO B6 IN 'RAHUL NISARG COOPERATIVE HOUSING SOCIETY LTD.', THE ASSESSING AUTHORITY HAS TO VERIFY AS TO WHEN THE BUILDING PLANS FOR THESE B UILDINGS WERE FIRSTLY APPROVED BY THE LOCAL AUTHORITY AND TAKING THE SAID DATE OF APPROVAL A STARTING POINT, HE HAS TO VERIFY AS TO WHETHER THESE B UILDINGS WERE COMPLETED WITHIN THE PRESCRIBED TIME LIMIT I.E. 31 ST MARCH 2008 ON THE BASIS OF THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT ISSUED BY THE PMC. WHEN WE EXAMINE THE FACTS OF THE PR ESENT CASE UNDER THE ABOVE BACKGROUND, WE FIND THAT THE AUTHORITIES B ELOW HAVE NOT DISPUTED THE FACT FURNISHED IN THIS REGARD BY THE ASSESSEE THAT UNDER THE PROJECT 'ATUL NAGAR' CONSISTING OF BUILDINGS AL TO A5, THE FIRST BUILDING PLAN FOR A TYPE WAS APPROVED BY THE PMC ON 29.4.2003 VIDE COMMENCEMENT CERTIFICATE NO. 4269 (PAGE NO. 4 OF TH E PAPER BOOK). HOWEVER, ACTUAL CONSTRUCTION OF A TYPE BUILDING WAS E XECUTED AS PER THE REVISED PLAN VIDE NO. C.C. 4101/27/6/2003 (PAGE NO. 5 OF THE PAPER BOOK). THE SIZE OF THE PLOT ON WHICH THE A TYPE BUIL DING I.E. AL TO A6 HAVE BEEN CONSTRUCTED IS L,39,466SQ.FT. THE PROJECT A TYPE BUILDING I.E. AL TO A5 9 CONSISTS OF 360 RESIDENTIAL UNITS AND THE CONSTRUCTION HA S BEEN COMPLETED BETWEEN 10.1.2005 TO 31.8.2005 (PAGE NOS. 6 TO 9 OF PAPER BOOK). THE AUTHORITIES BELOW HAVE ALSO NOT DISPUTED THIS MATERIAL FACT THAT RESIDENTIAL UNITS HAS A MAXIMUM BUILT UP AREA OF 1500 SQ.FT. LIKEWISE, THESE MATERIAL FACTS THAT B GROUP BUILDINGS IN 'RAHUL NISARG CO-OPERATIVE HOUSING SOCIETY LTD.,' HAVE BEEN CONSTRUCTED ON LAND AREA OF 138203 SQ.FT., HAS NOT BEEN DENIED BY THE AUTHORITIES BELOW. THEY HAVE ALSO NOT DENIED THESE MATERIAL FACTS THAT THE FIRST BUILDING PL AN WAS SANCTIONED ON 29.4.2003 VIDE COMMENCEMENT CERTIFICATE NO. 4269 ISSU ED BY THE PMC (PAGE NO. 16 OF THE PAPER BOOK). THE OTHER MATERIAL FACTS LIKE ACTUAL CONSTRUCTION WAS EXECUTED AS PER THE REVISED PLAN SANCTI ON ON 20 TH MARCH 2004 VIDE CC NO. 2225 (PAGE NO. 17), THE PROJECT CO NSISTS OF 396 FLATS AND CONSTRUCTION OF THESE FLATS HAVE BEEN COMPLETED ON 14. 7.2006 AS PER THE COMPLETION CERTIFICATE ISSUED BY THE PMC (PAGE NOS. 13 TO 18 OF PAPER BOOK) ARE NOT IN DISPUTE. THE AUTHORITIES BELOW HAVE ALSO NOT DENIED THAT BUILT UP AREA OF EACH OF THESE FLATS DOES NOT EXCEED 1 500 SQ.FT. IT IS ALSO NOT IN DISPUTE THAT BOTH THE PROJECTS ARE ENTIRELY A RESI DENTIAL PROJECT AND THERE IS NO COMMERCIAL AREA THEREIN. UNDER THE ABOVE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE IS VERY MUCH ENTITLED TO THE CLAIMED DEDUCTION U/S. 80IB (10) OF THE ACT ON THE BUILDINGS AL TO A5 IN 'ATUL NAGAR' AND BUILDINGS BL TO B6 IN 'RAHUL NISARG COOPER ATIVE HOUSING SOCIETY LTD.' THE ISSUE IS THEREFORE DECIDED IN FAVOUR OF THE ASSESSEE. WE THUS WHILE SETTING ASIDE THE ORDERS OF THE AUTHORITIES B ELOW ON THE ISSUE, DIRECT THE A.O TO ALLOW THE CLAIMED DEDUCTION U/S. 8 0IB(10) IN QUESTION. THE RELATED GROUNDS ARE ACCORDINGLY ALLOWED. 8.3 IN VIEW OF THIS, WE HOLD THAT THE ASSESSEE IS ENTITLE D TO BENEFIT UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF 172 F LATS COMPLETED BEFORE PRESCRIBED LIMIT AS EVIDENT FROM COMPLETION CERTIFICA TE. ACCORDINGLY, THE APPROPRIATE DEDUCTION BE GIVEN TO THE ASSESSING OFFICER IN THIS MATTER. 9. IT IS PERTINENT TO MENTION HERE THAT WE ARE DECID ING THE ISSUE OF DEDUCTION OF PROFIT OF FOUR COMPLETED BUILDINGS AT T HE STRENGTH OF PART COMPLETION CERTIFICATE UNDER THE PROVISIONS OF SEC. 80 -IB(10) OF THE ACT. IT IS WITHOUT PREJUDICE WITH LEGAL ISSUE SUBJUDICE BEFORE VARIOUS LEGAL FORUMS AS DISCUSSED ABOVE. 10. SIMILAR ISSUE AROSE IN A.Y. 2005-06 AND 2007-08. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, THE ASSESSING OFFICER IS DIRECTED TO GRANT DEDUCTION IN RESPECT OF PROFIT OF COMPLETED F OUR BUILDINGS ONLY AS DISCUSSED ABOVE. 6.1 SINCE FACTS IN THE INSTANT CASE ARE IDENTICAL T O THE FACTS IN A.YRS. 2005-06, 2006-07 AND 2007-08, THEREFORE, RESPECTFUL LY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING YEARS WHICH WAS THE BASIS FOR DENIAL OF DEDUCTION U/S.80I B(10) BY THE ASSESSING OFFICER AS WELL AS THE CIT(A) AND IN ABSE NCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE, WE SET-ASIDE THE OR DER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S.80IB(10) 10 OF THE I.T. ACT, 1961. GROUNDS RAISED BY THE ASSES SEE ARE ACCORDINGLY ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 11-02-2014. SD/- SD/- (R.S.PADVEKAR ) ( R. K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED 11 TH FEBRUARY 2014 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 B BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE