Kumar & Potnis Properties Pvt. Ltd., Pune V. Dy. Comm. of Income-tax, Pune

ITA 1560/PUN/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76098 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-12-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 05-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Keywords: Additional evidence; Reasonable cause
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1560/PN/2011 (ASSTT.YEAR : 2006-07) KUMAR & POTNIS PROPERTIES PVT. LTD., 6 EKTA PARK, LAW COLLEGE ROAD, PUNE 411004 PAN NO. AABCK7575Q .. APPELLANT VS. DY.CIT, CIRCLE-11(1), PUNE .. RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI P.L. PATHADE DATE OF HEARING : 05-12-2013 DATE OF PRONOUNCEMENT : 03-02-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 24-02-2011 OF THE CIT(A)-I, PUNE RELATING TO ASSESS MENT YEAR 2006-07. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. IT FILED ITS RETURN OF INCOME ON 25-11-2006 DECLARING TOTAL INCOME OF RS.12,07,580/- AFTER CLAIMING DEDUCTION U/S.80IB(10). THE ASSESSMENT WAS COMPLET ED U/S.143(1) ON 5- 10-2007. SUBSEQUENTLY, ACTION U/S.133A WAS CONDUCT ED IN THE CASE OF THE ASSESSEE ON 26-05-2008. DURING THE COURSE OF SURVE Y ACTION THE CLAIM OF DEDUCTION U/S.80IB(10) WAS FOUND TO BE INCORRECT SI NCE THE CONDITIONS WERE NOT SATISFIED. ACCORDINGLY, THE ASSESSMENT WAS RE- OPENED U/S.147 AND NOTICE U/S.148 WAS ISSUED TO THE ASSESSEE ON 02-03 -2009. 2 2.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED VARIOUS DETAILS IN RESPONSE TO THE QUERIES RAISED B Y THE ASSESSING OFFICER. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE THE ASSESSING OFFICER NOTED THAT ASSESSEE COMPANY HAD UNDERTAKEN A PROJEC T NAMELY POTNIS PROPERTIES AT SY.NO.29/2, HINGANE(B), KARVENAGAR, PUNE. THE PROJECT ENVISAGED CONSTRUCTION OF 6 BUILDINGS. ACCORDING T O THE ASSESSING OFFICER, AS PER THE PROVISIONS OF SECTION 80IB(10) OF THE I. T. ACT 1961, CONSTRUCTION OF THE HOUSING PROJECT APPROVED BY THE LOCAL AUTHOR ITY BEFORE 01-04-2004 HAD TO BE COMPLETED BEFORE 31-03-2008. IN THE INST ANT CASE, THE PROJECT POTNIS PROPERTIES WAS SANCTIONED BY THE LOCAL AUT HORITY, I.E. PMC AND COMMENCEMENT CERTIFICATES WERE ISSUED ON DIFFERENT DATES, I.E. 12-10-2001, 19-04-2002, 25-10-2002, 25-02-2004, 21-04-2004 AND 04-08-2006. HOWEVER, THE LATEST COMPLETION CERTIFICATE FROM PMC IS 09-05-2008. SINCE THE PROJECT HAS NOT BEEN COMPLETED BY 31-03-2008 TH E ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE HAS NOT SATISF IED ONE OF THE CONDITIONS PRESCRIBED U/S.80IB(10) AND THEREFORE NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S.80IB(10). 3. THE ASSESSING OFFICER FURTHER OBSERVED THAT IN T HE ASSESSMENT ORDER PASSED U/S.143(3) FOR A.Y. 2003-04 AND 2005-06 THE CLAIM OF DEDUCTION U/S.80B(10) WAS DENIED ON THE GROUND THAT THE COMME RCIAL AREA WAS 843.43 SQ.MTRS. IT WAS ALSO NOTED THAT THE PROJECT SANCTI ONED BY PMC HAS RESIDENTIAL CUM COMMERCIAL AREA. THE DENIAL OF DED UCTION U/S.80IB(10) FOR THE SAME PROJECT BY THE ASSESSING OFFICER HAS BEEN UPHELD BY THE CIT(A) VIDE ORDER DATED 21-10-2008. SINCE THE FACTS PREVA ILING IN THE A.Y. 2005- 06 ARE SIMILAR AND ISSUES INVOLVED ARE IDENTICAL, T HEREFORE, THE ASSESSING OFFICER FOLLOWING THE DECISION TAKEN BY THE ASSESSI NG OFFICER FOR A.Y. 3 2005-06 WHICH HAS BEEN CONFIRMED BY THE CIT(A) DISA LLOWED THE DEDUCTION OF RS.49,35,654/- CLAIMED U/S.80IB(10) AND ADDED TH E SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER BY OBSERVING AS UNDER : 3.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE LAW AS ARE APPARENT FROM RECORD. THE APPELLANT IS A BUILDER AN D DEVELOPER WHO HAS DEVELOPED A PROJECT CALLED POTNIS PROJECT AT S.NO. 29/2 HINGNE (B), KARVENAGAR, PUNE, WHEREIN SIX BUILDINGS HAVING A BUIL T UP AREA OF 71,383.83 SQ. MTRS WAS DEVELOPED WHICH INCLUDED 843.43 SQ.MTRS OF COMMERCIAL AREA. THEREFORE, THE COMMERCIAL AREA WAS FOUND TO BE 11.77 % OF THE TOTAL BUILT UP AREA. THE FIRST COMMENCEMENT CERTIFICATE WAS APPARENT LY RECEIVED BY THE APPELLANT 12.10.2001 AND THE SUBSEQUENT COMMENCEMENT CERTIFICATE WAS TAKEN BY THE APPELLANT ON 19.4.2002, 25.10.2002, 25 .2.2004, 21.4.2004 AND 4.8.2006. INCOME FROM THIS PROJECT ALONG WITH DEDUCT ION U/S. 80IB(10) AS PER SYSTEM OF ACCOUNTING FOLLOWED HAS SHOWN IN DIFFEREN T YEARS INCLUDING A.Y. 2004-05, A.Y. 2005-06 AND A.Y. 2006-07. A SURVE Y IN THIS CASE WAS ALSO CARRIED OUT BY THE ASSESSING OFFICER APPARENTLY ON 26. 5.2008 WHEN IT WAS FOUND THAT THE LAST COMPLETION CERTIFICATE WAS RECEIV ED BY THE APPELLANT ON 9.5.2008. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER F OUND THAT THE APPELLANT HAS VIOLATED TWO CONDITIONS I.E. COMMERCIAL AREA BEIN G MORE THAN 5% OR 2000 SQ.FT. WHICHEVER IS LESS, AND THE COMPLETION OF PR OJECT BEING BEYOND THE DEADLINE OF 31.3.2008. THE ASSESSING OFFICER WHILE MAKI NG THE AFORESAID ASSESSMENT HAS PLACED THE RELIANCE IN RESPECT OF THE VIO LATION OF COMMERCIAL AREA BEING MORE THAN 5% OR 2000 SQ.FT. WHICHEVER IS L ESS, ON HIS FINDINGS GIVEN ON SIMILAR FACTS AND LAW IN A.Y. 2004-05 AND 20 05-06 AS WELL AS THE ORDERS OF THE CIT(A)-I, PUNE WHEREIN THE FINDINGS OF THE ASSESSING OFFICER WERE CONFIRMED. DURING APPEAL, THE APPELLANT HAS PLA CED ON RECORD' HIS SUBMISSIONS WHICH HAVE ALREADY BEEN QUOTED ABOVE AND TH E ORDERS PASSED BY THE HON'BLE ITAT IN THE CASE OF THE APPELLANT IN A.Y. 2004-05 AND 2005- 06, TO CLAIM THAT THE ABOVE REFERRED DECISIONS SHOULD BE FOLLOWED FOR ALLOWING THE DEDUCTION CLAIMED. IN RESPECT OF DELAY IN THE COMPLETION OF THE PROJECT BEYOND THE STATUTORY LIMIT OF 31.3.2008 IT H AS BEEN SUBMITTED THAT ALL THE EXPENSES RELATING TO THE PROJECT WERE INCURR ED UPTO 31.3.2006 AND ALL EXCEPT THREE OUT OF THE 121 FLATS CONSTRUCTED WERE SOL D PRIOR TO 31.3.2006. IT HAS ALSO BEEN CONTENDED THAT ALL THE FLATS WERE SOLD, P OSSESSION HANDED OVER TO THE CUSTOMERS MUCH BEFORE THE DUE DATE. LIST OF BU ILDING-WISE STATEMENTS OF CONSTRUCTION AND SALE OF FLATS WERE ALSO ENCLOSED. CO PIES OF ELECTRICITY BILLS ETC., CERTIFICATE OF ARCHITECT, AND AFFIDAVIT OF ON E OF THE DIRECTORS WERE ENCLOSED TO CLAIM THAT THE AFORESAID EVIDENCES SHOW THA T THE PROJECT WAS COMPLETED BEFORE 31.3.2008. ON CAREFUL CONSIDERATION OF THE FACTS OF THE CASE AND THE LAW IN RESPECT OF INCLUSION OF COMMERCIAL ARE A BEYOND 5% OR 2000 SQ. FT. WHICHEVER IS LESS, IT IS OBSERVED THAT THE SIX B UILDINGS CONSTRUCTED BY THE APPELLANT INCLUDED COMMERCIAL AREA OF 11.77% AN D THERE IS NO DISPUTE ON THIS FACT. THE ASSESSING OFFICER HAS HELD THAT THIS IS I N VIOLATION OF CONDITION LAID IN 80IB(10). IT IS FOUND THAT THE ASSESSI NG OFFICER HAS DEALT THIS ISSUE IN DETAIL TO SHOW THAT THE CONDITION BROUGH T IN THE STATUTE BY AN AMENDMENT BROUGHT ON 1.4.2005 WAS CLARIFICATORY IN N ATURE AND THEREFORE, THE SAME IS APPLICABLE EVEN FOR EARLIER ASSESSMENT YEARS. THE LD. CIT(A) HAS CONCURRED WITH THE ABOVE VIEW IN APPEALS FILED BY T HE APPELLANT IN A.Y. 2004-05 AND 2005-06. THE HON'BLE ITAT HOWEVER HAS SET ASIDE THE ABOVE REFERRED ISSUE TO THE FILE OF THE ASSESSING OFFICER IN TH E AFORESAID ASSESSMENT 4 YEARS FOR EXAMINATION BY THE ASSESSING OFFICER AS TO WHET HER THE PROJECT IN RESPECT OF RESIDENTIAL UNITS FULFILLED THE CONDITIONS O F 80IB(10) ON STAND ALONE BASIS OR NOT. THEREFORE, ON CAREFUL CONSIDERATIO N, IT IS FOUND THAT THE CLAIM OF THE APPELLANT THAT THE APPEAL WAS ALLOWED I S INCORRECT. THE ASSESSING OFFICER ON THE ABOVE REFERRED ISSUE IS THEREFORE , DIRECTED TO ADOPT THE SAME FINDING AS IS ARRIVED AT BY HIM IN A.Y. 2005- 06 FOR THIS PROJECT. IN THIS RESPECT, IT IS HOWEVER, IMPORTANT TO POINT OUT TH AT THE AMENDMENT BROUGHT IN STATUTE W.E.F. 1.4.2005 IN RESPECT OF RESTR ICTION ON THE COMMERCIAL AREA WILL BE DIRECTLY APPLICABLE IN THIS ASSESSMENT YE AR AND THEREFORE, THIS ASPECT HAS TO BE KEPT IN MIND. NOW COMING TO THE VIO LATION OF OTHER CONDITION RELATING TO COMPLETION OF THE PROJECT BEF ORE 31.3.2008, IT IS OBSERVED THAT THE ASSESSING OFFICER CARRIED OUT A SURVEY ON 26.5.2008 AND FOUND THAT THE COMPLETION CERTIFICATE WAS ISSUED BEYON D 31.3.2008. THERE CANNOT BE ANY DISPUTE THEREFORE, THAT THE PROJECT WA S NOT COMPLETED BEFORE 31.3.2008 WHICH WAS STATUTORILY REQUIRED TO BE COMPLI ED WITH TO BECOME ELIGIBLE FOR THIS DEDUCTION. OTHER ARGUMENTS MADE BY THE APPELLANT THAT THE EXPENSES WERE MADE BY AROUND 2006, FLATS WERE SOLD BY 2 007, ELECTRICITY CONNECTIONS WERE TAKEN BY FLAT OWNERS ETC. ETC. ARE I RRELEVANT WHEN THE LAW SPECIFICALLY DEMANDS AS PER EXPLANATION (II) THAT THE DATE OF COMPLETION OF THE CONSTRUCTION SHALL BE TAKEN TO BE THE DATE ON WHI CH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. IN THE INSTANT CASE, PUNE MUNICIPAL CORPORATION IS TH E LOCAL AUTHORITY WHICH ISSUES FINAL COMPLETION CERTIFICATE AS WELL AS PROVISIONA L COMPLETION CERTIFICATE FOR PART OF THE PROJECTS FROM TIME TO TI ME IN THE FORM OF OCCUPATION CERTIFICATE. SINCE THE COMPLETION CERTIF ICATE HAS TO BE FOR THE PROJECT AS A WHOLE, THE PROVISIONAL PART CERTIFICATE ISSUED BY PMC FOR A DIFFERENT PURPOSE, CANNOT BE CONSIDERED TO SERVE THE A FORESAID PURPOSE. IT IS WELL KNOWN THAT THE FINAL COMPLETION CERTIFICATE/ O CCUPATION CERTIFICATE IS ISSUED BY THE PMC AFTER RECEIVING AN APPLICATION IN T HE PRESCRIBED FORM ALONG WITH THE CERTIFICATE OF COMPLETION BY THE PRO JECT ARCHITECT. THE APPELLANT HAS CLAIMED THAT THE APPLICATION DATED 14. 10.2005 WAS FILED WITH PMC ON 20.10.2005. HOWEVER, IT IS NOT CLEAR WHETHER THE SAID APPLICATION WAS FOR THE COMPLETE PROJECT OR NOT. THE APPELLANT H IMSELF ALSO ADMITS THAT THE COMPLETION CERTIFICATE IN RESPECT OF SOME FLATS AN D SHOPS IN BUILDING NO. A-1 AND A-5 WAS ISSUED BY ASSTT. ENGINEER, PMC ON 9.5.20 08. THE FACT THAT THE PART CERTIFICATE WAS ISSUED ON 9.5.2008, CLEARLY SHOWS THAT THE PROJECT WAS NOT COMPLETE BEFORE 31.3.2008. IN VIEW OF THE AB OVE REFERRED FACTS, THERE IS NO AMBIGUITY THAT THE PROJECT WAS NOT COMPLE TED BEFORE THE DUE DATE AND THEREFORE, THIS CONDITION REMAINED UNCOMPLI ED. THE APPELLANT VIDE LETTER DATED 23.2.2008, HAS REQUESTED FOR ADMISSION OF ADDITIONAL EVIDENCES WHICH WERE IN THE FORM OF EXPENDITURE STATEMENT, ELE CTRICITY STATEMENT, CERTIFICATE BY ARCHITECT AND AN AFFIDAVIT OF ONE OF THE DIRECTOR SHRI SHRIKRISHNA VINCHURKAR, HOWEVER, THE EVIDENCES SUBMITT ED WERE NOT FOUND TO BE OF NATURE WHICH COULD SERVE ANY RELEVANT PURPO SE AND THEREFORE, IT WERE NOT ADMITTED. THE APPELLANT WAS EXPLAINED ABOUT THIS DECISION ON 23.2.2011 AND THE SAME IS RECORDED IN THE ORDER SHEET . IT IS ALSO RELEVANT TO POINT OUT ON THIS ISSUE THAT AFTER CONSIDERING THE FACT S OF THE CASE AND THE LAW THE APPELLANT VIDE ORDER SHEET DATED 13.1.2011 W AS GIVEN AN OPPORTUNITY TO SUBMIT A CERTIFICATE FROM THE PMC TO ESTABLISH THAT THE RELEVANT PROJECT WAS COMPLETE BEFORE 31.3.2008, EVEN THOUGH THE CERTIFICATE WAS ISSUED SUBSEQUENT TO THE SAID DATE TO ENSURE WHETHER T HE EVIDENCES SUBMITTED BY THE APPELLANT IN RESPECT OF HANDING OVER , ELECTRICITY BILLS ETC. ETC. BY IMPLICATION COULD MEAN THAT THE PROJECT WAS COMPLETE BEFORE 31.3.2008. HOWEVER, THE APPELLANT ADMITTED ON 23.2. 2011, AS RECORDED IN THE ORDER SHEET THAT THE AFORESAID CERTIFICATE IS NOT POSSIBLE TO BE SUBMITTED. IN VIEW OF THE DISCUSSIONS MADE HEREIN ABOVE, IT IS CLEA R THAT THE CLAIM OF THE APPELLANT THAT THE PROJECT WAS COMPLETE BEFORE 31.3. 2008 IN TERMS OF THE EXPLANATION (II) OF SEC. 80IB(10) IS FOUND TO BE INCO RRECT. FOR THE AFORESAID REASON, THE APPEAL FAILS. GROUND NO. 1 IS DISMISSED. 5 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE CIT(A) ERRED IN REFUSING TO TAKE ON RECORD A DDITIONAL EVIDENCE WHICH PROVED THAT ALL RESIDENTIAL FLATS IN THE PROJEC T WERE COMPLETED ON OR BEFORE 31-03-2008. 2. THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF THE ASSESSEES CLAIM FOR DEDUCTION U/S.80IB(10) ON GROUNDS THAT THE ASSESSEES PROJECT INCLUDED COMMERCIAL EQUIVALENT TO 11.77% OF THE TOT AL PROJECT AREA WHICH WAS IN EXCESS OF THE LIMIT IN THE SECTION INTRODUCED W. E.F. 01-04-2005. 3. THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF THE ASSESSEES CLAIM FOR DEDUCTION U/S.80IB(10) ON GROUNDS THAT THE ASSESSEE HAD NOT OBTAINED COMPLETION CERTIFICATE FOR ITS ENTIRE PROJE CT BEFORE 31-03-2008. 4. WITHOUT PREJUDICE, THE CIT(A) ERRED IN DENYING T HE APPELLANTS CLAIMS FOR DEDUCTION U/S.80IB(10) ON PROPORTIONATE BASIS IN R ESPECT OF THE RESIDENTIAL UNITS COMPLETED BEFORE 31-03-2008. 5. THE APPELLANT PLEADS THAT ITS CLAIM FOR DEDUCTION U/S.80IB(10) IS LEGITIMATE AND OUGHT TO BE ALLOWED. 6. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSING OFFICER DI SALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) ON TWO REASONS, I.E. (I) THE BUILT UP AREA OF THE COMMERCIAL UNITS WAS 11.77% OF THE TOTAL AREA AND T HEREFORE THE COMMERCIAL AREA EXCEEDED THE LIMIT SPECIFIED IN SEC TION 80IB(10) AND (II) THE ASSESSEE HAD NOT RECEIVED THE COMPLETION CERTIF ICATE IN RESPECT OF FEW FLATS BEFORE 31-03-2008. 6.1 SO FAR AS THE FIRST ISSUE ON WHICH DEDUCTION U/ S. 80IB(10) HAS BEEN DENIED, I.E. THE BUILT UP AREA OF COMMERCIAL UNITS WAS 11.77% HE SUBMITTED THAT THE PROJECT WAS STARTED VIDE COMMENCEMENT CERT IFICATE DATED 12-10- 2001 AND THUS THE PROJECT HAS BEEN STARTED PRIOR TO 01-04-2005. SINCE THE PROJECT WAS STARTED PRIOR TO THE AMENDMENT PUTTING A LIMIT ON THE COMMERCIAL AREA INCLUDIBLE IN THE HOUSING PROJECT, THEREFORE, NO DISALLOWANCE U/S. 80IB(10) CAN BE MADE ON ACCOUNT O F COMMERCIAL AREA 6 EXCEEDING THE PRESCRIBED LIMIT. FOR THIS PROPOSITI ON, THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE DECISION OF THE TRIBUNAL I N THE CASE OF OPEL SHELTERS (P) LTD. VS. ACIT, PUNE VIDE ITA NO.219/PN/2009 ORD ER DATED 31-03-2011 FOR A.Y. 2005-06 AND THE DECISION OF THE MUMBAI BEN CH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AKRUTI (JV) VS. ACIT VIDE I TA NO.5416/PN/2009 ORDER DATED 30-03-2009. 6.2 SO FAR AS THE SECOND ISSUE ON WHICH DEDUCTION U /S. 80IB(10) HAS BEEN DENIED, I.E. ON ACCOUNT OF NON RECEIPT OF COMPLETIO N CERTIFICATE IN RESPECT OF SOME OF THE FLATS BEFORE 31-03-2008 HE SUBMITTED TH AT BEFORE THE CIT(A) THE ASSESSEE HAD CLARIFIED THAT IT HAD COMPLETED TH E ENTIRE PROJECT AND HAD EVEN APPLIED TO THE CORPORATION FOR OBTAINING THE C OMPLETION CERTIFICATE. HE SUBMITTED THAT THE ASSESSEE HAD INCURRED ALL THE EXPENSES BY AROUND F.Y. 2005-06 AND NO FURTHER EXPENDITURE ON CONSTRUCTION OF THE HOUSING PROJECT WAS INCURRED BY THE ASSESSEE THEREAFTER. 6.3 REFERRING TO PAPER BOOK PAGE 25 HE SUBMITTED TH AT AN APPLICATION WAS FILED WITH THE PMC ON 20-10-2005 FOR ISSUE OF COMPL ETION CERTIFICATE. REFERRING TO THE AFFIDAVIT FILED BY THE DIRECTOR SH RI SHRIKRISHNA VINCHURKAR (WHICH WAS FILED AT THE INSTANCE OF THE BENCH AND A COPY OF WHICH IS PLACED AT PAPER BOOK PAGES 1 & 2) HE SUBMITTED THAT THE DI RECTOR IN THE SAID AFFIDAVIT HAS STATED THAT THE ASSESSEE HAS COMPLETE D CONSTRUCTION OF ALL FLATS AND SHOPS IN THE PROJECT AS PER SANCTIONED PLANS BE FORE 14-10-2005. REFERRING TO THE SAID AFFIDAVIT HE SUBMITTED THAT S UCH COMPLETION CERTIFICATE WAS NOT RECEIVED DESPITE REGULAR FOLLOW UP FOR WHIC H ANOTHER APPLICATION WAS FILED BY THE ARCHITECT SHRI LAXMAN THITE ON 09- 04-2008 AND COMPLETION CERTIFICATE FOR FLATS AND SHOPS AND BUIL DING A1 AND A5 WAS 7 ISSUED BY THE ASSISTANT ENGINEER, PMC ON 09-05-2008 . REFERRING TO THE STATEMENT OF SHRIKRISHNA VITTALRAO VINCHURKAR RECOR DED ON THE DATE OF SURVEY, I.E. ON 26-05-2008 THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO QUESTION NO.11 PUT BY THE REVENUE AND ANSWER TO THE SAME BY THE DIRECTOR WHICH READ AS UNDER : Q.NO.11. THE LATEST COMPLETION CERTIFICATE IS DATED 09/05/2008, I.E. AFTER 31/03/2008. AS PER THE PROVISIONS OF INCOME TAX ACT, 1961 IF THE PROJECT COMMENCES BEFORE 01/04/2004 THEN TO CLAIM DE DUCTION U/S.80IB THE PROJECT SHOULD BE COMPLETED BEFORE 31/03/2008. IN VIEW OF THIS PLEASE EXPLAIN HOW YOUR PROJECT IS ELIGIBLE FOR DEDUCTION U /S.80IB(10)? ANS. THE LATEST COMMENCEMENT CERTI. IS DATED 4/8/2006, HENCE, THE PROJECT CAN BE COMPLETED AFTER 31/03/2008, HOWEVER OUR PROJECT WAS COMPLETED WELL BEFORE 31/03/2008 EVIDENT FROM MY AP PLICATION FOR COMPLETION CERTIFICATE DATED 20/10/2005. (COPY ENCL OSED AS ANNEXURE A). HOWEVER, THE COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITY, I.E. PMC ON 09/05/2008. THE DELAY IS ON ACCOUNT OF NON-R ECEIPT OF ROAD NOC FROM PMC IN WANT OF THAALE MADI (IN MARATHI) FROM BHOOMI ZINDAGI KHATHE (IN MARATHI) OF PMC. HE SUBMITTED THAT THE ELECTRICITY CONNECTIONS WERE ALSO PROVIDED TO ALL THE UNITS WHICH SHOWS THAT THE PROJECT WAS COMPLETED IN ALL RESPECTS. HE SUBMITTED THAT ON THE BASIS OF APPLICATION MADE ON 14-10-2005 THE CORPORATION HAD NOT RAISED ANY OBJECTIONS. HE SUBM ITTED THAT THE CORPORATION HAS STARTED LEVYING TAX FOR ALL THE FLA TS BEFORE 31-03-2008, THEREFORE, THE DEDUCTION CANNOT BE DENIED TO THE AS SESSEE. AS REGARDS THE ORDER FOR THE A.Y 2004-05 AND 2005-06 HE SUBMITTED THAT THE MATTER WAS RESTORED BY THE TRIBUNAL TO THE FILE OF THE ASSESSI NG OFFICER FOR DECIDING THE ISSUE IN THE LIGHT OF THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BRAHMA ASSOCIATES AND OTHERS AND THE ASSESS ING OFFICER HAS ALLOWED THE CLAIM OF THE ASSESSEE. 6.4 REFERRING TO THE DECISION OF THE HONBLE GUJARA T HIGH COURT IN THE CASE OF CIT VS. TARNETAR CORPORATION HE SUBMITTED T HAT HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT IF THE ASSESSEE HAS COMPLETED THE PROJECT 8 THE DEDUCTION U/S.80IB(10) SHOULD BE ALLOWED TO THE ASSESSEE EVEN IF THE COMPLETION CERTIFICATE IS NOT ISSUED BY THE CORPORA TION WITHIN THE PRESCRIBED TIME LIMIT. 6.5 REFERRING TO THE DECISION OF COORDINATE BENCH O F THE TRIBUNAL IN THE CASE OF RUNWAL MULTIHOUSING PVT. LTD. VS. ACIT IN I TA NOS.1015 TO 1017/PN/2011 FOR A.Y. 2003-04 TO 2005-06 VIDE ORDER DATED 27-11-2012 HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT THE ASSES SEE HAS DULY APPLIED TO PMC FOR ISSUE OF COMPLETION CERTIFICATE, HANDED OVE R POSSESSION OF THE FLATS/ ROW HOUSES TO THE RESPECTIVE BUYERS, PMC HAS STARTED LEVYING MUNICIPAL TAX AND ELECTRICAL BILLS PAID BY RESPECTI VE OWNERS AND THEREFORE DEDUCTION U/S.80IB(10) CANNOT BE DISALLOWED. SINCE THE FACTS OF THE ASSESSEE IN THE INSTANT CASE ARE IDENTICAL TO THE F ACTS OF THE CASE DECIDED BY THE TRIBUNAL IN THE CASE OF RUNWAL MULTIHOUSING PVT . LTD. (SUPRA), THEREFORE, THE ASSESSEE HAS TO BE ALLOWED THE DEDUC TION/S.80IB(10) FOR BELATED RECEIPT OF COMPLETION CERTIFICATE. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THA T SINCE THE ASSESSEE HAS CONSTRUCTED COMMERCIAL AREA WHICH IS MORE THAN THE PRESCRIBED LIMIT AND HAS NOT OBTAINED THE COMPLETION CERTIFICATE BEFORE 31-03-2008, THEREFORE, THE CONDITIONS PRESCRIBED U/S.80IB(10) ARE NOT FULF ILLED AND THEREFORE THE CIT(A) WAS JUSTIFIED IN DENYING THE DEDUCTION U/S.8 0IB(10) OF THE I.T. ACT, 1961. 8. 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 9 BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE ASSESSING OFFICER DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) TO THE ASSESSEE ON THE GROUND THAT THE BUILT UP AREA OF THE COMMERCIAL UNITS WAS 11.77% OF THE TOTAL AREA WHICH EXCEEDS THE PRESCRIBED LIMIT U/S.80IB(10) AND THEREFORE THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10). FURTHER , ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE HAS NOT RECEIVED TH E COMPLETION CERTIFICATE IN RESPECT OF CERTAIN FLATS BEFORE 31-03-2008, THER EFORE, ASSESSEE IS NOT ENTITLED TO BENEFIT OF DEDUCTION U/S.80IB(10). HE, THEREFORE, DENIED THE DEDUCTION U/S.80IB(10) WHICH HAS BEEN UPHELD BY THE CIT(A). 8.1 IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE PROJECT WAS STARTED PRIOR TO 01-04-2005 AND THEREFO RE THE AMENDMENT RESTRICTING THE COMMERCIAL AREA IS NOT APPLICABLE T O THE ASSESSEE. SO FAR AS THE ISSUE OF NON-RECEIPT OF COMPLETION CERTIFICATE BEFORE 31-03-2008 IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAD COMPLETED THE ENTIRE PROJECT AND HAD APPLIED TO THE CORPORATION FOR OBTAINING THE COMPLETION CERTIFICATE. THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE AFTER 2006, ELECTRICITY CONNECTIONS WER E PROVIDED TO ALL THE UNITS, THE CORPORATION HAS STARTED LEVYING TAX FOR ALL THE FLATS BEFORE 2008, THEREFORE, THE PROJECT WAS COMPLETED IN ALL RESPECT S. 8.2 SO FAR AS THE FIRST OBJECTION OF THE REVENUE DE NYING DEDUCTION U/S.80IB(10) IS CONCERNED, I.E. THE COMMERCIAL AREA IS AROUND 11.77% OF THE TOTAL AREA AND THEREFORE THE COMMERCIAL AREA EXCEED S THE LIMITS PRESCRIBED IN SECTION 80IB(10) WE FIND ADMITTEDLY THE PROJECT WAS SANCTIONED VIDE COMMENCEMENT CERTIFICATE DATED 12-10-2001. IT HAS BEEN HELD IN VARIOUS 10 JUDICIAL DECISIONS THAT IN RESPECT OF PROJECTS WHIC H ARE STARTED PRIOR TO THE AMENDMENT, THE AMENDMENT RESTRICTING COMMERCIAL ARE A IS NOT APPLICABLE. 8.3 WE FIND THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF OPEL SHELTERS PVT. LTD. (SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER : 17. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THA T THERE IS NO DISPUTE ON FACTS. THE ONLY ISSUE FOR OUR ADJUDICAT ION IS AS TO WHETHER AMENDED PROVISIONS OF SECTION 80IB (10) CAME W.E.F. 1.4.2005 IS ALSO APPLICABLE ON THE PROJECT ALREADY APPROVED AND STA RTED IN EARLIER YEARS AS PER THE THEN PREVAILING LAW.. THE CASE OF THE ASSESSEE REMAINED THAT THE PROJECT IN THE CASE OF D.S. KULKA RNI & ASSOCIATES STARTED IN APRIL 2001 AND COMPLETED IN NOVEMBER 200 3. SIMILARLY, THE PROJECT IN THE CASE OF OPEL SHELTERS COMMENCED ON 23.2.2001 AND WAS COMPLETED BY 21.6.2002. THE SUBMISSION OF LD. A.R. ALSO REMAINED THAT THE ISSUE RAISED IN THE PRESENT APPEA LS IS FULLY COVERED BY THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AKRUTI J.V. V/S. DCIT (SUPRA). THE OB JECTION OF THE LD. D.R. IN THIS REGARD REMAINED THAT THE SPECIAL BENC H IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) HAD DECIDED THE ISSUE BY HOLDING THAT THE AMENDED PROVISION WILL APPLY FROM A.Y. 2005-06. IT WAS ALSO CONTENDED BY THE LD. D.R. THAT CO-ORDINATE BENCH DE CISION IN THE CASE OF HIRANANDANI AKRUTI J.V. (SUPRA) IS NOT BINDING O N THIS BENCH SINCE THE CO-ORDINATE BENCH HAS NOT CONSIDERED THE DECISI ON OF THE SPECIAL BENCH IN THE CASE OF BRAMHA ASSOCIATES (SUPRA). WE , HAVING GONE THROUGH THESE HEAVILY RELIED UPON DECISIONS, FIND T HAT THE ISSUE RAISED IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) BEFORE THE SPECIAL BENCH WAS AS TO WHETHER AMENDMENT IN SECTION 80IB (10) I S RETROSPECTIVE IN OPERATION AND IT WAS IN THAT CONTEXT, THEY HELD THAT IT WAS NOT RETROSPECTIVE. THUS, DISCUSSION ON THE ISSUE WHICH IS COVERED IN HIRANANDANI AKRUTI J.V. CASE IS AS TO WHETHER THE A MENDED PROVISION APPLIES TO THE PROJECTS STARTED ON OR AFTER 1.4.200 5 OR FOR ALL THE ASSESSMENTS FROM THE A.Y. 2005-06. WE FIND THAT TH E MUMBAI BENCH WHILE DECIDING THE ISSUE IN THE CASE OF HIRANANDANI AKRUTI J.V. HAS ALREADY DISCUSSED THE DECISION OF THE SPECIAL BENCH IN THE CASE OF BRAHMA ASSOCIATES. THE A.Y. INVOLVED IN THE CASE O F HIRANANDANI IS 2006-07. THE TOTAL COMMERCIAL SPACE IN THE PROJECT IN THAT CASE WAS 117800 SQ.FT. ACCORDING TO THE A.O, AS THE PROVISI ONS OF SECTION 80IB(10)(D) IS APPLICABLE W.E.F. 1.4.2005, THE LIMI T FOR HAVING COMMERCIAL SPACE IN THE HOUSING PROJECT IS 5% OF TH E TOTAL BUILT UP AREA OR 2000 SQ.FT WHICHEVER IS LESS. ACCORDINGLY, THE ASSESSEE WAS ASKED TO EXPLAIN WHY DEDUCTION CLAIMED BY IT U/S. 8 0IB(10) AMOUNTING TO RS. 51,06,05,521/- SHOULD NOT BE DISAL LOWED. THE TRIBUNAL AFTER DISCUSSING THE ARGUMENTS OF THE PART IES AND THE DECISIONS CITED BY THEM INCLUDING THE DECISION OF SPECIAL BENCH IN THE CASE OF BRAMHA ASSOCIATES (SUPRA), HAS COME TO THE FOLLOWING CONCLUSION ON THE ISSUE : 26. THERE IS TRUTH IN THE PLEA OF HARDSHIP PUT FORT H ON BEHALF OF THE ASSESSEE. LET US ASSUME AN ASSESSEE APPLIES AND OB TAINS APPROVAL OF A LOCAL AUTHORITY FOR BUILDING A HOUSING PROJECT IN THE PREVIOUS YEAR RELEVANT TO AY 02-03. AS PER THE LAW AS IT STOOD IN THE PREVIOUS YEAR RELEVANT TO AY 02-03 UPTO 04-05, THERE WAS NO TIME LIMIT WITHIN WHICH THE CONSTRUCTION HAS TO BE COMPLETED OR ANY RESTRIC TION REGARDING COMMERCIAL AREA THAT CAN BE BUILT IN A HOUSING PROJ ECT. LET US 11 ASSUME THAT THE ASSESSEE COMPLIES WITH ALL THE COND ITIONS FOR ALLOWING RELIEF U/S. 80-IB(10) I.E. IT IS APPROVED AS A HOUS ING PROJECT BY THE LOCAL AUTHORITY BUT THE AREA OF COMMERCIAL SPACE AS APPROVED BY THE LOCAL AUTHORITY IS MORE THAN 2000 SQ.FT. THE ASSES SEE COMMENCES THE PROJECT BUT IS ABLE TO COMPLETE ONLY IN THE PREVIOU S YEAR RELEVANT TO AY 05-06. AS PER THE CHANGE IN LAW FROM AY 05-06 W ITH REGARD TO THE AREA OF COMMERCIAL SPACE IN A HOUSING PROJECT THE A SSESSEE WOULD LOOSE HIS ELIGIBILITY TO CLAIM DEDUCTION. IN SUCH CASES THERE IS DEFINITELY GRAVE HARDSHIP TO THE ASSESSEE. THE INT ERPRETATION SOUGHT TO BE CANVASSED BY THE LEARNED D.R WILL ALSO LEAD T O ABSURD SITUATION. LET US ASSUME AN ASSESSEE OBTAINS APPROVAL OF A HO USING PROJECT PRIOR TO 1-4-2005 SAY IN PREVIOUS YEAR RELEVANT TO AY 02-03. HE BUILDS COMMERCIAL SPACE IN EXCESS OF 2000 SQ.FT. IN THE HOUSING PROJECT. HE FOLLOWS PERCENTAGE COMPLETON METHOD OF ACCOUNTING AND OFFERS PROFITS IN AY 02-03 TO 04-05, CLAIMS EXEMPTI ON U/S. 80-IB(10) AND IS ALLOWED EXEMPTION. ON THE SAME PROJECT IN A Y 05-06, THE ASSESSEE WOULD NOT GET THE BENEFIT OF SEC. 80-IB(10 ). WE THEREFORE FIND NO GROUNDS TO TAKE A VIEW DIFFERENT FROM THE O NE TAKEN BY THE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SAROJ SALES ORGANIZATION (SUPRA). 27. WE ARE OF THE VIEW THAT WE ARE NOT SUPPLYING AN Y WORDS TO THE STATUTE BUT ARE ONLY HOLDING THAT THE LAW AS IT EXI STED IN THE A.Y.04-05 WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL FOR SLUM R EHABILITATION AND THE PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACCORDED ON 17.11.2003 AND WHEN THE ASSESSEE COMMENCED DEVELOPM ENT IS TO BE APPLIED. THEREFORE THE SUBMISSIONS OF THE LEARNE D D.R IN THIS REGARD CANNOT BE ACCEPTED. WE ARE OF THE VIEW THAT THE LEGISLATURE WOULD NOT HAVE INTENDED TO TAKE AWAY A VESTED RIGHT WITHOUT CLEAR WORDS TO THAT EFFECT IN THE PROVISIONS OF SEC. 80-I B(10) AS AMENDED BY THE FINANCE ACT, 2005, W.E.F. 1-4-2005. WE THER EFORE HOLD FOLLOWING THE DECISION IN THE CASE OF SAROJ SALES ORGANISATION (SUPRA) THAT THE LAW AS IT EXISTED IN THE A.Y. 04-05 WHEN T HE ASSESSEE SUBMITTED ITS PROPOSAL FOR SLUM REHABILITATION AND THE PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACCORDED ON 17.11. 2003 AND WHEN THE ASSESSEE COMMENCED DEVELOPMENT IS TO BE APPLIED . SO FAR AS THE ISSUE AS TO WHAT IS HOUSING PROJECT AND AS TO WHETHER COMMERCIAL AREA CAN BE CONSTRUCTED IN A HOUSING PR OJECT IS CONCERNED, THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AKRUTI J.V. (SUPRA) HAS HELD AS UNDER : 28. WE HAVE ALREADY HELD THAT ON THE ISSUE ON WHAT IS A HOUSING PROJECT AND WHETHER COMMERCIAL AREA CAN BE CONSTRUC TED IN A HOUSING PROJECT AND IF SO CONSTRUCTED WHETHER THE ASSESSEE WOULD LOOSE EXEMPTION UNDER THE LAW AS APPLICABLE UPTO A.Y. 04- 05 HAS BEEN SETTLED BY THE SPECIAL BENCH OF ITAT IN THE CASE OF BRAMHA ASSOCIATES 122 TTJ 433(SB) (PUNE). THE AO HELD THE LAW AS AMEN DED BY THE FINANCE ACT, 2005 W.E.F. 1-4-2005 WHEREBY IT WAS LA ID DOWN THAT THE BUILT UP AREA OF THE SHOPS AND COMMERCIAL ESTABLI SHMENT INCLUDED IN THE HOUSING PROJECT SHOULD NOT BE MORE THAN 5% OF T HE TOTAL BUILT UP AREA OF THE PROJECT OR 2000 SQ.FT. WHICHEVER IS LES S WILL APPLY AND THEREFORE HE HAD NO OCCASION TO APPLY THE TEST AS L AID DOWN BY THE SPECIAL BENCH REFERRED TO ABOVE. SINCE WE HAVE HEL D THAT THE LAW AS IT EXISTED IN THE A.Y. 04-05 WHEN THE ASSESSEE SUBM ITTED ITS PROPOSAL FOR SLUM REHABILITATION AND THE PERMISSION FOR CAR RYING OUT THE DEVELOPMENT WAS ACCORDED ON 17.11.2003 AND WHEN THE ASSESSEE COMMENCED DEVELOPMENT IS TO BE APPLIED, THE ASSESSE E TO CLAIM DEDUCTION U/S. 80-IB(10) OF THE ACT HAS TO PASS THE TEST LAID DOWN BY THE SPECIAL BENCH AS ABOVE. WE THEREFORE SET ASIDE THE ORDER THE 12 CIT(A) AND REMAND THE ISSUE TO THE AO FOR THE LIMIT ED PURPOSE OF SATISFYING HIMSELF AS TO WHETHER THE ASSESSEE WOULD BE ENTITLED TO DEDUCTION ON THE PROFITS DERIVED ON DEVELOPING AND BUILDING HOUSING PROJECTS AS PER THE RATIO LAID DOWN BY THE SPECIAL BENCH REFERRED TO ABOVE, WHILE COMPUTING TOTAL INCOME AND IF SO TO WH AT EXTENT. FOR STATISTICAL PUROSES, THE APPEAL IS TREATED AS ALLOW ED. 18. THE HONBLE BOMBAY HIGH COURT HAS BEEN PLEASED TO APPROVE THE AFORESAID DECISION OF SPECIAL BENCH IN THE CASE OF BRAHMA ASSOCIATES VIDE ORDER DATED 22.2.2011 IN ITA NO. 11 94 OF 2010. THE CONCLUDING PARA NO. 30 OF THE DECISION OF THE HONB LE HIGH COURT IS BEING REPRODUCED HEREUNDER : 19. WE, THUS, FIND THAT THE ISSUES RAISED IN THE P RESENT APPEALS ARE FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECI SION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AK RUTI J.V V/S. DCIT (SUPRA). RESPECTFULLY FOLLOWIG THE SAID DECISION I N THE CASE OF HIRANANDANI AKRUTI J.V. (SUPRA), WE DECIDE THE ISS UES IN FAVOUR OF THE ASSESSEES THAT A HOUSING PROJECT WILL ALSO CONSIST OF COMMERCIAL AREA TO A PERMISSIBLE LIMIT, AS SETTLED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BRAMHA ASSOCATES (SUPRA) (NOW UPHEL D BY THE HONBLE BOMBAY HIGH COURT) AS APPLICABLE UPTO A.Y. 2004-05. AND SECONDLY, THE LAW AS IT EXISTED IN THE ASSESSMENT Y EAR WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL OF THE PROJECT AND PERMISSION FOR THE SAME WAS ACCORDED TO AND WHEN THE ASSESSEE COMMENCE D THE PROJECT IS TO BE APPLIED. IN THE PRESENT CASE, UNDISPUTEDL Y THE ASSESSEES HAD STARTED THE PROJECT IN THE YEAR 2001 WHEN SUB-CLAUS E (D) TO SECTION 80IB(10) WAS NOT IN EXISTENCE, HENCE IT CANNOT BE A PPLIED ON SUCH PROJECTS AS HELD BY THE MUMBAI BENCH OF THE TRIBUNA L IN THE CASE OF HIRNANDANI AKRUTI J.V. (SUPRA). IN THIS REGARD, WE ALSO FIND STRENGTH FROM THIS PLEA OF THE LD. A.R. WHICH WAS ALSO RAIS ED BEFORE IN THE CASE OF HIRANANDANI AKRUTI J.V. THAT IF THE ASSESSE E HAD FOLLOWED WIP (WORK-IN-PROGRESS) METHOD, THE INCOME FROM THE PROJ ECT WOULD HAVE BEEN TAXABLE IN THE EARLIER YEARS AS THE PROJECT W AS COMPLETED EARLIER TO THE AMENDMENT AND IN THAT CASE, AS PER THE OLD P ROVISION THE ASSESSEE WOULD HAVE BEEN ELIGIBLE FOR THE DEDUCTIO N. BUT, JUST BECAUSE THE ASSESSEE HAS FOLLOWED THE PROJECT COMPL ETION METHOD, IN THESE CASES, THE DEDUCTION IS BEING DENIED BECAUSE IT FALLS IN A.Y. 2005-06. IN OUR VIEW THE NEWLY INSERTED CLAUSE (D) TO SECTION 80IB(10) WILL NOT APPLY ON THE PROJECTS APPROVED UP TO 31.3.05 SINCE IN THOSE PROJECTS ASSESSEES ARE REQUIRED TO CONSTRU CT WHAT HAS BEEN APPROVED. THE ONLY FISSIBLE COMPLIANCE IS REQUIRED TO BE MET AS PER THE HARMONIOUS INTERPRETATION OF SECTION 80IB(10) AS AMENDED IS TO COMPLETE SUCH PROJECTS (APPROVED BEFORE 1.4.2004) O N OR BEFORE 31.3.2008. IN THE CASES BEFORE US THE PROJECTS HAV E BEEN COMPLETED WELL BEFORE THIS DATE. PUTTING OF SUCH CONDITION O F TIME LIMIT IS WELL UNDERSTOOD. SINCE THE LEGISLATURE INTENDED THE COM PLETION OF PROJECTS WITHIN A TIME FRAME TO AVOID INCONVENIENCE TO THE B ENEFICIARIES I.E. THE BUYERS. IN THIS REGARD THE LEGISLATURE HAS CAT EGORISED THE TIME LIMIT FOR THE PROJECTS APPROVED ON DIFFERENT PERIOD BEFORE 31.3.2007 BUT REQUIREMENT REMAINED THE SAME THAT PROJECTS WOU LD BE APPROVED BY THE LOCAL AUTHORITY. COMPLIANCE OF THE REQUIREM ENT PROVIDED IN CLAUSE (D) TO THE SECTION IS POSSIBLE ONLY IN THOSE PROJECTS WHICH HAVE BEEN STARTED ON OR AFTER 1.4.2005 AS BY THEN THOSE ASSESSEES WERE ALL AWARE ABOUT THE PROVISIONS LAID DOWN IN CLAUSE (D). 20. BY APPLYING THE PRINCIPLE OF HARMONIOUS CONSTRU CTION TO INTERPRET THE PROVISIONS UNDER SUB-SECTION (10) TO SECTION 80IB AS AMENDED W.E.F. 1.4.2005 WE COME TO THE CONCLUSION T HAT THE LEGISLATURE ALWAYS INTENDED THAT THE PROJECT MUST B E APPROVED BY THE LOCAL AUTHORITY, THUS IN THOSE APPROVED PROJECTS WH ERE CONSTRUCTION HAS BEEN STARTED MUCH EARLIER THAN 1.4.2005, THE AS SESSEES ARE 13 REQUIRED TO COMPLETE THE PLAN AS IT HAS BEEN APPROV ED. AS PUTTING SUCH ASSESSEES TO COMPLETE THE PLAN MEETING OUT CON DITION UNDER CLAUSE (D) OF THE SUB-SECTION WOULD LEAD INTO ABSUR DITY AND IMPOSSIBILITY FOR THE ASSESSEE AND IN CONTRADICTIO N TO THE PROVISIONS U/S. 80 IB(10) AS PREVAILED AT THE TIME OF APPROVAL AND COMMENCEMENT OF THE CONSTRUCTION OF THE PROJECT WE LL BEFORE 1.4.2005. BOMBAY BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AKRUTI J.V (SUPRA) HAS DISCUSSED ALL THESE RELEVANT ASPECTS RAISED BY THE DEPARTMENT. IN THE CASE OF HIRANANDANI AKRUTI J.V V/S. DCIT, IT HAS BEEN HELD THAT THE LAW AS EXISTED WHEN THE ASSE SSEE SUBMITTED ITS PROPOSAL AND PERMISSION FOR CARRYING OUT THE DE VELOPMENT WAS ACCORDED AND WHEN THE ASSESSEE COMMENCED DEVELOPMEN T IS TO BE APPLIED. IN THE PRESENT CASES, AS PER PAGE NOS. 1 7 AND 20 OF THE PAPER BOOK IN THE CASE OF OPEL SHELTER THE PROJECT WAS COMMENCED ON 23.2.2001 AND EVEN COMPLETED ON 14.5.2004, SIMILARL Y AS PER THE CONTENTS OF PAGE NO.2 OF THE ASSESSMENT ORDER AND PAGE NO. 41 OF THE PAPER BOOK IN THE CASE OF D.S. KULKARNI AND ASS OCIATES, THE PROJECT WAS COMMENCED ON 12.4.2001 AND COMPLETED IN THE MONTH OF NOVEMBER 2003. THUS, THE ASSESSEES WERE SUPPOSED T O COMPLETE THE PROJECTS AS PER THE LAW AS EXISTED IN THE A.Y. 200 1-02 IN THE CASE OF OPEL SHELTERS AND IN THE A.Y. 2002-03 IN THE CASE O F D.S. KULKARNI AND ASSOCIATES. WE THUS FOLLOWING THE DECISION IN THE CASE OF HIRANANDANI AKRUTI JV V/S. DCIT (SUPRA) HOLD THAT A MENDED PROVISIONS UNDER SECTION 80 IB(10) W.E.F. 1.4.2005 ARE NOT APPLICABLE IN THE PRESENT CASE, HENCE ASSESSEES ARE ELIGIBLE F OR THE CLAIMED DEDUCTION U/S. 80 IB (10) OF THE ACT. WE ACCORDING LY DIRECT THE A.O TO ALLOW THE CLAIMED DEDUCTION TO THE ASSESSEES. 8.4 SINCE THE PROJECT IN THE INSTANT CASE WAS APPRO VED ON 12-10-2001, I.E. PRIOR TO 01-04-2005, THEREFORE, IN VIEW OF THE DECI SION CITED (SUPRA) THE AMENDED PROVISIONS OF SECTION 80IB(10) W.E.F. 01-04 -2005 RESTRICTING THE COMMERCIAL AREA IN A HOUSING PROJECT ARE NOT APPLIC ABLE IN THE PRESENT CASE AND THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80IB (10) OF THE ACT. 8.5 NOW COMING TO THE SECOND ISSUE ON WHICH THE CIT (A) DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) IS CONCERNED, WE FIND THE DIRECTOR OF THE ASSESSEE COMPANY IN HIS REPLY TO QUESTION NO.11 DUR ING THE COURSE OF SURVEY HAD CATEGORICALLY STATED THAT THE PROJECT WA S COMPLETED WELL BEFORE 31-03-2008 WHICH IS EVIDENT FROM THE APPLICATION FO R COMPLETION CERTIFICATE DATED 20-10-2005. IT WAS CLARIFIED AT THAT TIME TH AT THE COMPLETION CERTIFICATE WAS ISSUED BY PMC ON 09-05-2008 AND THE DELAY WAS ON ACCOUNT OF NON-RECEIPT OF ROAD NOC FROM PMC. FROM THE VARI OUS DETAILS FURNISHED 14 BY THE ASSESSEE WE FIND THE ASSESSEE HAS NOT INCURR ED ANY EXPENDITURE AFTER 31-03-2006 ON ACCOUNT OF THE HOUSING PROJECT . ELE CTRICITY CONNECTIONS WERE PROVIDED TO ALL THE UNITS AND THE CORPORATION HAS STARTED LEVYING TAXES BEFORE 31-03-2008. AT THE INSTANCE OF THE TRIBUNAL THE ASSESSEE ALSO FILED AN AFFIDAVIT STATING THAT THAT THE ASSESSEE HAS COM PLETED CONSTRUCTION OF ALL FLATS AND SHOPS IN THE PROJECT AS PER SANCTIONED PL ANS BEFORE 14-10-2005. 8.6 WE FIND THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF RUNWAL MULTIHOUSING PVT. LTD. (SUPRA) HAS DECIDED AN IDENT ICAL ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER : 20. SO FAR AS THE FIRST OBJECTION OF THE REVENUE THA T COMPLETION CERTIFICATE FROM PMC HAS NOT BEEN OBTAINED BY THE ASSESSEE BEFORE 31 -03-2008 WE FIND THE ASSESSEE THROUGH HIS ARCHITECT VIDE APPLICATION DATE D 22-01-2004 HAS APPLIED TO PMC FOR OCCUPANCY CERTIFICATE. (PAGE 119 OF THE PAPER BOOK). THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE PMC HAS NOT YET REJECTED THE SAID APPLICATION TILL DATE COULD NOT BE CONTROVERTED BY THE REVENUE. THE FURTHER SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT ALL THE FLAT OWNERS/ROW HOUSE OWNERS HAVE BEEN GI VEN POSSESSION BETWEEN 26-10-2002 TO 15-01-2007, I.E.PRIOR TO 31-0 3-2008 COULD NOT BE CONTROVERTED BY THE LEARNED DR (PAGE 55 TO 63 OF TH E PAPER BOOK). THE LEARNED DR ALSO COULD NOT CONTROVERT THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT PMC HAS STARTED LEVYING MUNICIPAL T AXES AND THE ELECTRICITY METERS ARE IN THE NAME OF THE FLAT OWNER S 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 12 87/PN/2010 ORDER DATED 27-09-2012 HAS HELD AS UNDER : 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. QUITE CLEARLY, THE DISPUTE IS WITH REGARD TO THE COMPLETION CERTIFICAT E OF BUILDING 'E' HAVING BEEN ISSUED BY THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL C ORPORATION, ON 5-5-2008. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) R EQUIRES 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) PRESCRIBE S THAT THE DATE OF COMPLETION OF CONSTRUCTION OF 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. IN THE PRESENT CASE, IT HAS BE EN ISSUED ON 5-5-2008 AND HENCE THE CASE SET UP BY THE REVENUE THAT THE COMPL ETION IS BEYOND THE MANDATED DATE OF 31-3-2008. IN THIS BACKGROUND, WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE APPLIED FOR OBTAINING THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING 'E' ON 12-3-2008. FROM THE DISC USSION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, WHEREIN THE FACTUAL ASSERTIONS 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 PROVIDED T O EACH FLAT OWNER; ROAD WAS 15 COMPLETE; WATER AND DRAINAGE CONNECTION WAS AVAILAB LE; SEWERAGE SYSTEM WAS OPERATING; CLUB HOUSE WAS FUNCTIONAL; ETC. THE ASSE SSEE 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 FLATS IN THE BUILDING WERE COMPLETE. IN FACT, IN PARA 6.9 OF THE ASSESSMENT OR DER, THE ASSESSING OFFICER NOTICED THAT 'THE FACTS THAT THE FLATS WERE COMPLET ED AND POSSESSION GIVEN WILL NOT COME TO THE RESCUE OF THE ASSESSEE'. THE AFORES AID FINDING OF THE ASSESSING OFFICER SUPPORTS THE ASSERTION MADE BY THE ASSESSEE THAT FACTUALLY SPEAKING CONSTRUCTION OF FLATS IN BUILDING 'E' WAS ALSO COMP LETE AND POSSESSION HANDED OVER TO THE ACTUAL USER/CUSTOMERS PRIOR TO 31-3-200 8. PERTINENTLY, ON THE BASIS OF THE ARCHITECT'S CERTIFICATE CONFIRMING COMPLETIO N OF CONSTRUCTION OF BUILDING, THE ASSESSEE APPLIED FOR THE COMPLETION CERTIFICATE TO THE PUNE MUNICIPAL CORPORATION ON 12-3-2008. IT HAS BEEN POINTED OUT B EFORE US THAT THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL CORPORATION DID NOT R AISE ANY OBJECTION WITH REGARD TO ASSESSEE'S APPLICATION AND THE CERTIFICAT E FOR BUILDING 'E' WAS THEREAFTER ISSUED ON 5-5-2008. THE MOOT QUESTION IS AS TO WHETHER IN SUCH A SITUATION CAN IT BE SAID THAT THE ASSESSEE'S PROJEC T DID NOT COMPLY WITH THE CONDITION PRESCRIBED IN SUB-CLAUSE (I) OF CLAUSE (A ) TO SECTION 80-IB(10) OF THE ACT WHEREBY THE CONSTRUCTION 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 AC TUALITY THE COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITY ON 10 -10-2008. THE TRIBUNAL NOTICED THAT THE DELAY IN ISSUING COMPLETION CERTIF ICATE WAS NOT ATTRIBUTABLE TO THE ASSESSEE AS NO OBJECTIONS WERE RAISED BY THE LO CAL 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 S ANGHVI AND DOSHI ENTERPRISES VS. ITO AND OTHERS ITA NO. 259 TO 263/M DS/2010 DATED 19-5- 2011 FOR A.Y. 2005-06 AND 2006-07 (TM) HAS CONCLUDE D AS FOLLOWS: 'FROM THE ABOVE, ONCE THIS IS CLEAR THAT THE DATE THAT APPEAR S 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 A SSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMATING THE COMPLET ION OF THE PROJECT. THE SAID CERTIFICATE/INTIMATION WAS ACCEPTED BY THE LOCAL AU THORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORITY HAS NOT R AISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLET ION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTA NCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10 -10-2008 IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE AND OBTAINING THE SAID CERTIFICATE BEFORE 31-3- 2008 IS BEYOND THE CONTROL OF THE ASSESSEE. ASSESSE E'S JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE A PPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHORITY BY WA Y OF FILING THE REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIFICATE GIVE N BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJE CTED TO THE SAID APPLICATION OF THE ASSESSEE AND THE ARCHITECT BY RAISING ANY OB JECTIONS FOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10-10-200 8. THEREFORE, THE DELAY IN GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTR IBUTABLE TO THE ASSESSEE. THEREFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFA ULTER ON THIS ACCOUNT 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 REVE RSED. 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. IN THE PRESENT CASE, THE COM PLETION CERTIFICATE WAS APPLIED FOR BEFORE 31-3-2008 I.E. ON 12-3-2008. IT IS UNDISPUTABLE THAT THE 16 APPLICATION OF THE ASSESSEE HAS BEEN APPROVED BY TH E LOCAL AUTHORITY WITHOUT RAISING ANY AMENDMENT OR OBJECTION, AS HAS BEEN ASS ERTED BY THE ASSESSEE ALL ALONG AND THE DELAYED ISSUANCE OF THE COMPLETION CE RTIFICATE BY THE LOCAL AUTHORITY ON 5-5-2008, ALBEIT AFTER THE MANDATED DA TE OF 31-3-2008 CANNOT BE ATTRIBUTED TO THE ASSESSEE. IN THIS BACKGROUND OF T HE 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 THEREF ORE, IN THE INSTANT FACTUAL BACKGROUND, WE HOLD THAT THE ASSESSEE HAS COMPLIED WITH THE CONDITION OF COMPLETING THE CONSTRUCTION OF THE PROJECT WITHIN T HE MANDATED DATE OF 31-3- 2008 EVEN WITH REGARD TO BUILDING 'E', FOLLOWING TH E PARITY OF THE REASONING LID DOWN IN THE CASE OF HINDUSTAN SAMUTHA AWAS LTD. (SU PRA). . 14. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(1 0) OF THE ACT REQUIRES THAT THE UNDERTAKING, DEVELOPING AND BUILDING A HOUSING PROJ ECT 'COMPLETES SUCH CONSTRUCTION' OR BEFORE 31-3-2008. IN THE PRESENT C ASE, ASSESSEE HAS FACTUALLY ASSERTED RIGHT FROM THE STAGE OF ASSESSMENT PROCEED INGS, THAT THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE IN ALL RESPECTS AS PER SANCTIONED PLAN AND ALL THE FLATS WERE HANDED OVER TO THE ACTUAL USERS/CUSTOMER S PRIOR TO 31-3-2008. IN THE BACKGROUND OF THE AFORESAID FACTUAL POSITION WH ICH HAS REMAINED UNCONTROVERTED, IN OUR VIEW, ON A PLAIN READING OF SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) THE CONDITION PRESCRIBED THERE IN IS FULFILLED., INASMUCH AS THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE BEFOR E 31-3-2008. HOWEVER, ON THE READING OF CLAUSE (II) OF THE 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 WHICH COMPLETION CERTIFICAT E IS ISSUED BY THE LOCAL AUTHORITY, 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 SUBSTANTIV E SECTION 80-0IB(10)(A)(I) IS FACTUALLY FOUND TO BE COMPLIED WITH, CAN THE CON TENTS OF THE EXPLANATION CLAUSE (II) THEREOF, ALTER THE SITUATION? CAN AN EX PLANATION APPENDED TO A SECTION, ENLARGE THE SCOPE OF THE MAIN SECTION SO A S TO MAKE IT MORE ONEROUS FOR A TAX- PAYER? BE THAT AS IT MAY, WE DO NOT DWEL L ON THIS ASPECT ANY FURTHER, AS THE ASSESSEE HAS BEEN FOUND TO BE ELIGIBLE FOR N ECESSARY RELIEF BECAUSE THE CONDITION PRESCRIBED IN SECTION 80-IB(10)(A)(I) OF THE ACT HAS 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 CA NNOT BE DENIED THE CLAIM OF DEDUCTION U/S 80-IB(10) ON THE STRENGTH OF NON-ISSU ANCE OF THE COMPLETION CERTIFICATE FOR BUILDING 'E' BY THE PUNE MUNICIPAL CORPORATION BEFORE 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 O F CIT VS. TARNETAR CORPORATION (SUPRA) HAS HELD AS UNDER : WITH RESPECT TO THE SECOND CONTENTION, WE MAY RECO RD THAT THE CONTENTION OF THE REVENUE IS THAT THE ASSESSEE DID NOT COMPLETE THE HOUSING PROJECT WITHIN THE STATUTORY TIME FRAME. UNDER SUB -CLAUSE (I) OF CLAUSE (A) OF SECTION 80IB(10), THE ASSESSEE SINCE HAD GOT APPROV AL FOR THE HOUSING PROJECTS FROM THE LOCAL 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 HAVE BEEN COMPLE TED 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 COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LO CAL AUTHORITY. 17 CIT (APPEALS) AS WELL AS THE TRIBUNAL AFTER DETAILE D DISCUSSION CAME TO THE CONCLUSION THAT SUCH REQUIREMENT WAS NOT MANDAT ORY IN NATURE. IN THE PRESENT CASE, THE ASSESSEE HAD COMPLETED THE CONSTR UCTION WELL BEFORE THE LAST DATE, NAMELY 31 ST MARCH 2008 AND HAD ALSO SOLD SEVERAL UNITS WHICH W AS COMPLETED AND ACTUALLY OCCUPIED, AND IT ALSO APPLIE D 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 TRIB UNAL NOTED THAT THE CONSTRUCTION WAS COMPLETED IN 2006. APPLICATION FO R BU PERMISSION TO THE MUNICIPAL AUTHORITIES WAS FILED ON 15-02-2006 WHICH WAS REJECTED ON 1-07-06. SEVERAL RESIDENTIAL UNITS WERE OCCUPIED SINCE THE S AME WAS DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HAD DONE WITHOU T NECESSARY PERMISSION. THE ASSESSEE HAD ALSO PAID PENALTY AND GOT SUCH OCC UPATION REGULARISED. SEVERAL TENEMENTS WERE SOLD LONG BEFORE THE LAST DA TE. IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE A SSESSEE 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 MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION T O THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANC E THEREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIE W THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHIC H DEDUCTION WAS BEING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE A SSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE THE FIN AL 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 C ANNOT 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/20 10 ORDER DATED 30-08-2011 HAS HELD AS UNDER : 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 APPLICATION 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 PREROGATIV E OF THE LOCAL AUTHORITY 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 COMP LETION/OCCUPANCY CERTIFICATE BEFORE 31.3.2008. WHAT WAS UNDER THE P OWER AND CONTROL OF THE ASSESSEE WAS ONLY TO MOVE THE AMC FOR COMPLETION CE RTIFICATE FULFILLING ALL THE REQUIREMENTS WITH THE AMC FOR ISSUANCE OF OCCUPANCY CERTIFICATE, WHICH THE ASSESSEE HAS DONE IN THE PRESENT CASE. THUS, THE D ELAY 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 PROJECT WAS NOT 18 COMPLETED BY 31-3-2008, ESPECIALLY WHEN THERE IS NO OBJECTION RAISED BY THE AMC REGARDING DEVIATION IN THE CONSTRUCTION OF THE PROJECT APPROVED BY THE AMC. 8. WE HAVE GONE THROUGH THE ORDERS CITED BY THE AS SESSEES REPRESENTATIVE AND FIND RELEVANT PARAGRAPHS ARE REQUIRED TO BE EXTRACTE D FOR COMPLETION OF THE ORDER. THEY ARE AS FOLLOWS. A. EXTRACT FROM THE DECISION OF THE TRIBUNAL IN THE CA SE 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 ETC. WHO HAS SUPER VISED THE CONSTRUCTION IS FURNISHED WITH FOUR SETS OF COMPLET ION PLAN UNDER RULE 7.6 OF THE DC RULES OF THE PMC. THEREAFTER PMC IS REQUIRED TO RETURN ONE OF THE SETS DULY CERTIFIED AS COMPLETION PLAN T O THE OWNER ALONG WITH THE ISSUE OF FULL OCCUPANCY CERTIFICATE AFTER INSPECTION OF THE WORK UNDER RULE 7.7 OF THE DC RULES. SINCE EXPLATION (I I) TO SECTION 80IB(10)(A) OF THE I.T. ACT REQUIRES COMPLETION CER TIFICATE ISSUED BY THE LOCAL AUTHORITY TO BE TAKEN AS THE DATE OF COMPLETI ON OF THE CONSTRUCTION, A GENERAL UNDERSTANDING IN OUR VIEW I S THAT A COMPLETION CERTIFICATE WHICH IS ISSUED BY THE LOCA L AUTHORITY AFTER CONDUCTING INSPECTIONS OF CONSTRUCTION BY IT. IN CASE OF PMC, IT IS ONLY OCCUPANCY CERTIFICATE WHICH IS ISSUED ALONGWITH CER TIFIED 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 CERTIFICA TE 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 CERTIFIC ATE GENERALLY IN TIME AND WITH THIS UNDERSTANDING THE LEGISLATURE H AVE ALSO INTRODUCED A DEEMING PROVISION OF 21 DAYS TO PUT CONSTRAINT UP ON PMC, WE AFTER DETAILED DELIBERATION IN PRECEDIGN PARAGRAPHS HAVE COME TO A CONCLUSION THAT IN CASE OF SMALL OBJECTIONS OF PMC RAISED AFTER EXPIRY OF DEEMING PERIOD OF 21 DAYS UNDER RULE 7.7 OF DC RUL ES UNDER PMC, THE DATE WHEN THE APPLICANT ACQUIRED DEEMING SANCTION W ILL BE TREATED AS THE DATE OF COMPLETION (OCCUPANCY) CERTIFICATE TO M EET OUT THE REQUIREMENT OF EXPLANATION (II) TO SECTION 80IB (10 )(A) OF THE ACT. WE HAVE ALREADY DISCUSSED HEREINABOVE WHAT WOULD BE TH E 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 AUTHO RITIES BELOW DIRECT THE A.O TO ALLOW THE CLAIMED DEDUCTION U/S. 80IB(10) OF THE I.T. ACT 1961 IN THE ASSESSMENT YEARS UNDER CONSIDERATIO N TREATING THE REQUIRED DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT AS THE DATE WHEN ABOVE DISCUSSED DEEMING PROVISION PER IOD 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 T HAT THE PROJECT HAD TO BE COMPLETED ON OR BEFORE 31.03.2008 AND SINCE THE ASSESSEE DID NOT 19 FURNISH THE COMPLETION CERTIFICATE, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION. THE OBJECTION IS TO THE EFFECT THAT THE COMPLETION CERTIFICATE FROM CMDA IS DATED 13.6.2008, I.E. THREE MONTHS AFT ER THE DUE DATE FOR COMPLETING THE PROJECT. IN THIS CONNECTION, IT HA S TO BE NOTED 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 BEN CH OF THE TRIBUNAL IN THE CASE OF JAIN HOUSING & CONSTRUCTIONS LTD. IN ITA NO.1369/MDS/2009 DATED 5.2.2010. IN THAT CASE, ASS ESSEE 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 OR DER 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 CONCE RNED, THE LOCAL AUTHORITY, I.E. THE CORPORATION OF CHENNAI IS THE A PPROPRIATE AUTHORITY TO REGULATE THE CONSTRUCTION AS PER THE BUILDING BY E-LAWS AND SANCTION PLANS. WHEN IT IS NOT DISPUTED THAT THE CORPORATIO N IS THE LOCAL AUTHORITY, CERTIFICATE ISSUED BY IT CANNOT BE DISRE GARDED. THE ASSESSEE HAS PLACED ON RECORD THE COMPLETION CERTIFICATE ISS UED BY THE CORPORATION BY WAY OF ADDITIONAL EVIDENCE. SINCE T HE ALLOWABILITY OF THE ENTIRE DEDUCTION DEPENDS ON ALL THE CONDITIONS BEING FULFILLED DEDUCTION DEPENDS ON ALL THE CONDITIONS BEING FULFI LLED, 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 PERMIT 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 U RBANISATION OF THE CITY AS A WHOLE. ON THE OTHER HAND, THE ROLE OF THE CORPORATION WHILE 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 CERTIFICATE IS TO BE CONSIDERED, THEN IN T HAT CASE, THE ASSESSEE DID APPLY FOR THE COMPLETION CERTIFICATE TO CMDA CE RTIFICATE ON 13.3.2006. IT IS A DIFFERENT MATTER THAT CMDA RAIS ED CERTAIN OBJECTIONS AND THE MATTER WENT UPTO THE HONBLE HIGH COURT AL SO. HOWEVER, THE FACT REMAINS THAT THE PROJECT WAS COMPLETED MUCH BE FORE THE DUE DATE, MAY BE WITH CERTAIN DEFECTS. ALSO, IT HAS TO BE NO TED THAT THE CMDA CERTIFICATE IS DATED 13.6.2008, I.E. ONLY TWO MONTH S AND THIRTEEN DAYS BEYOND THE DUE DATE. IT IS INCONCEIVABLE THAT THE TYPE OF DEFECTS WHICH WERE POINTED OUT BY THE CMDA COULD HAVE BEEN RECTIF IED IN SUCH A SHORT PERIOD. BE THAT AS IT MAY, THE HONBLE HIGH COURT ALSO RATIFIED THE DEVIATIONS AND DIRECTED THE CMDA TO CONSIDER THE EX PLANATION 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, CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND REL EVANT MATERIAL PLACED ON RECORD TOWARDS WHICH OUR ATTENTION WAS IN VITED DURING THE COURSE OF HEARING BY THE LD. AUTHORIZED REPRESENTAT IVE AND THE LD. SENIOR D.R. PROVISIONS OF SECTION 80IB ALLOWS CLAI M 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 C OURSE OF ASSESSMENT WITH REGARD TO ASSESSEES CLAIM OF DEDUCTION U/S 80 IB IN RESPECT OF ITS D.K.HONEY HOMES PROJECT, THE AO HAS ASKED THE ASSES SEE TO FURNISH THE CERTIFICATE OF COMPLETION OF THIS PROJECT M/S. D.K. HONEY HOMES. THE AO 20 ALSO DIRECTLY CALLED INFORMATION FROM THE LOCAL AUT HORITIES BY ISSUING SUMMONS U/S.133(6) AND A LETTER WAS ISSUED BY THE C OMPETENT AUTHORITY DATED 11 TH NOVEMBER, 2008, CONFIRMING THAT NO COMPLETION CERTIFICATE HAS BEEN ISSUED BY THIS OFFICE. ACCORD INGLY, THE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB WAS DECLINED. SECTIO N 80IB CLEARLY DEFINES THE DATE OF COMPLETION AS DATE OF COMPLETI ON OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE O N WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING P ROJECT IS ISSUED BY THE LOCAL AUTHORITIES, IT MEANS LOCAL AUTHORITIES IS C OMPETENT TO CERTIFY THE DATE OF COMPLETION OF HOUSING PROJECT. THE DAT E OF ISSUE OF SUCH LETTER BY THE LOCAL AUTHORITIES IS NOT SO CRUCIAL B UT IT SHOULD HAVE CLEARLY MENTIONED THE DATE OF COMPLETION OF PROJECT . WHEN THE PROJECT IS COMPLETED ON 31.3.2008 AND THE ASSESSEE HAS INFO RMED REGARDING SUCH COMPLETION, THE LOCAL AUTHORITIES MAY TAKE ITS OWN TIME FOR ISSUE OF CERTIFICATE, WHICH MAY BE EVEN AFTER 6-7 MONTHS, BUT THE LETTER SO ISSUED BY THE LOCAL AUTHORITIES SHOULD CLEARLY MENT ION THE DATE OF COMPLETION OF SUCH PROJECT. MERELY BECAUSE SUCH CE RTIFICATE IS ISSUED AFTER GAP OF 8-9 MONTHS OR EVEN ONE YEAR, WILL NOT ADVERSELY AFFECT THE ASSESSEE IF IT HAS MENTIONED CLEARLY THE DATE OF CO MPLETION OF PROJECT PRIOR TO 31.3.2008. ONCE THE LETTER FOR COMPLETI ON OF PROJECT IS GIVEN BY THE ASSESSEE TO THE LOCAL AUTHORITY, IT IS THE D UTY OF THE LOCAL AUTHORITY TO VERIFY PHYSICALLY THE PROJECTS STATED TO BE COMPLETED FROM ITS OWN PARAMETERS. THIS PROCESS MAY TAKE TIME AN D, THEREFORE, THE DATE OF ISSUE OF LETTER IS NOT SO CRUCIAL TO DETERM INE THE ASSESSEES ELIGIBILITY FOR CLAIM OF DEDUCTION AS PER EXPLANATI ON (II) OF SECTION 80IB(10)(A) OF THE INCOME-TAX ACT, 1961. WHAT IS C RUCIAL IS DATE MENTIONED IN THE LETTER SO ISSUED CERTIFYING COMPLE TION OF THE PROJECT. THUS, THE DATE OF ISSUE OF LETTER IS NOT IMPORTANT, BUT THE DATE MENTIONED IN THE LETTER CERTIFYING COMPLETION OF PR OJECT IS IMPORTANT. WE, THEREFORE, DO NOT FIND MAY MERIT IN THE OBSERVA TION OF THE LOWER AUTHORITIES TO THE EFFECT THAT THE DATE OF COMPLETI ON SHALL BE TAKEN THE DATE ON WHICH CERTIFICATE IS PHYSICALLY ISSUED BY T HE LOCAL AUTHORITIES. 9. FROM THE ABOVE, ONE THIS IS CLEAR THAT THE DATE THAT APPEAR ON THE ARCHITECTS COMPLETION CERTIFICATE FILED BEFORE THE LOCAL AUTHORITY IS A RELEVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25-3-200 8 AND THE ASSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMAT ING THE COMPLETION OF THE PROJECT. THE SAID CERTIFICATE/ INTIMATION WAS ACCEP TED BY THE LOCAL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORI TY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. I N SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10-10-2008 IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE AND OBTA INING THE SAID CERTIFICATE BEFORE 31.3.2008 IS BEYOND THE CONTROL OF THE ASSES SEE. ASSESSEES JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH T HE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHORITY BY WA Y OF FILING THE REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIFICATE GIVE N BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJE CTED TO THE SAID APPLICATION OF THE ASSESSEE AND THE ARCHITECT BY RAISING ANY OB JECTIONS NOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10.10.200 8. THEREFORE, THE DELAY IN GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTR IBUTABLE TO THE ASSESSEE. THEREFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFA ULTER ON THIS ACCOUNT 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 REVE RSED. THUS, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED . 21 20.4. IN VIEW OF THE ABOVE DECISIONS WE ARE OF THE CO NSIDERED OPINION THAT SINCE THE ASSESSEE HAS DONE WHATEVER POSSIBLE ON HIS PART, I .E. DULY APPLIED TO PMC FOR ISSUE OF COMPLETION CERTIFICATE, HANDED OV ER POSSESSION OF THE FLATS/ROW HOUSES TO THE RESPECTIVE BUYERS, PMC HAS STARTED LEVYING MUNICIPAL TAXES AND ELECTRICITY BILLS PAID BY RESPECTI VE OWNERS, THEREFORE, DEDUCTION U/S.80IB(10) UNDER THE FACTS AND CIRCUMSTANC ES OF THE CASE CANNOT BE DENIED TO THE ASSESSEE FOR NON-RECEIPT OF COM PLETION CERTIFICATE FROM PMC BEFORE 31-03-2008 WHICH WAS BEYOND THE CONT ROL OF THE ASSESSEE. THIS VIEW OF OURS IS FORTIFIED BY OUR DECISION IN THE C ASE OF M/S. RAMSUKH PROPERTIES VS. DCIT VIDE ITA NO.84/PN/2011 ORDER DAT ED 25-07-2012 FOR A.Y. 2007-08 (WHEREIN BOTH OF US ARE PARTIES) WHEREIN IT HAS BEEN HELD AS UNDER: 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL 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 PROJECT. THE ASSESSING OFFIC ER HAS DENIED THE DEDUCTION ON THE GROUND 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 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 FLA TS. 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 B EEN REJECTED BECAUSE DEDUCTION U/S.80IB(10) COULD NOT BE GRANTED TO ASSE SSEE 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 CERTIFICATE NO.BCO/03/01333 DATED 31.03.2008, THE LD. AUTHORISED REPRESENTATIVE HEAVI LY RELIED ON DECISION OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRI GADE ENTERPRISES P. LTD. (SUPRA), AIR DEVELOPER (SUPRA), SHETH DEVELOPERS (S UPRA) AND ALSO G.V.CORPORATION (SUPRA), WHEREIN DEDUCTION U/S.80IB (10) WAS 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 US, DEDUCT ION U/S.80IB(10) OF THE ACT HAS BEEN REJECTED ON THE GROUND THAT CONDITION OF C OMPLETION 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 ACT. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (SUPRA), WHEREIN CONDITION OF COMPLETION A S 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 CONSTRUCT ION WAS NOT ATTRIBUTABLE TO ASSESSEE. IN CASE SUCH A CONTINGENCY EMERGES W HICH 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 PRO JECT IN TIME FOR THE REASONS BEYOND HIS CONTROL. IN CASE BEFORE US, AS STATED O N BEHALF OF ASSESSEE, THAT ASSESSEE SUBMITTED CERTAIN MODIFICATIONS/RECTIFICAT IONS FOR TOP FLOORS OF BUILDING. THE SAID MODIFICATION/RECTIFICATION COUL D NOT BE COMPLETED AS LOCAL AUTHORITY COULD NOT APPROVE THE MODIFICATION AS THE IR FILES HAVE BEEN TAKEN OVER BY CONCERN INTELLIGENCE DEPARTMENT FOR INVESTI GATION OF VIOLATION OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION AT RELEVANT POINT OF TIME. THIS FACT HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. TH US, ASSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELLED THE IMPOSSIBILITY ON PART OF THE ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME. I T IS SETTLED LEGAL POSITION THAT THE LAW ALWAYS GIVE REMEDY AND THE LAW DOES WRONG T O NO ONE. WE AGREE TO 22 PROPOSITION PUT FORWARD BY LD. DEPARTMENTAL REPRESE NTATIVE THAT PLAIN READING OF SECTION 80IB(10) OF THE ACT SUGGESTS ABO UT ONLY COMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONGW ITH THE WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMA L CIRCUMSTANCES. HOWEVER, IN CASE BEFORE US, ASSESSEE WAS PREVENTED BY REASON ABLE 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. ASSESSEE 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 RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STR ICT PROVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. A T THE SAME TIME, RESTRICTION THEREON TOO HAS TO BE CONSTRUED STRICTLY SO AS TO A DVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVIS IONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUE TO EFFECTUATE THE LEGISLATIVE INTENTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE HOLD THAT ASSESSEE IS ENTITLED FOR BENEFIT U/S.80IB(10) OF TH E ACT IN RESPECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMIT. THE ASSESSING OF FICER 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 THE CIT(A) DENYING BENEFIT OF DEDUCTION U/S.80IB(10) FOR NON-RECEIPT OF COMPLET ION CERTIFICATE IS SET- ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSUE AR E ALLOWED. 8.7 SINCE IN THE INSTANT CASE THE ASSESSEE HAS APPL IED TO THE PMC VIDE APPLICATION DATED 14-10-2005 FOR ISSUE OF COMPLETIO N CERTIFICATE AND THAT POSSESSIONS WERE GIVEN TO ALL THE RESPECTIVE FLAT O WNERS BEFORE 31-03-2008, CORPORATION HAS STARTED LEVYING TAXES TO ALL THE IN DIVIDUAL FLAT OWNERS, ELECTRICITY CONNECTIONS HAVE BEEN GIVEN TO ALL THE FLAT OWNERS AND THE FINAL COMPLETION CERTIFICATE IS ALSO OBTAINED BY THE ASSE SSEE ON 09-05-2008, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF T HE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF RUNWAL MULTIHOUSING PVT . LTD. (SUPRA) WE HOLD THAT THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF D EDUCTION U/S.80IB(10) FOR NOT OBTAINING THE COMPLETION CERTIFICATE BEFORE 31 -03-2008. IN THIS VIEW OF THE MATTER WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S.80IB(10 ) TO THE ASSESSEE. 23 9. SINCE THE ASSESSEE SUCCEEDS ON THIS ISSUE THE GR OUND RELATING TO PROPORTIONATE DEDUCTION IN RESPECT OF RESIDENTIAL U NITS COMPLETED BEFORE 31- 03-2008 BECOME ACADEMIC IN NATURE AND DOES NOT REQU IRE ANY ADJUDICATION. 10. GROUNDS OF APPEAL NO.5 AND 6 BEING GENERAL IN N ATURE ARE DISMISSED. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 03-02-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMB ER PUNE, DATED : 3 RD FEBRUARY 2014 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE