ACIT, Circle-4, Pune V. Shri Krishna Haribhau Lohokare, Pune

ITA 1733/PUN/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8471 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 11-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR

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.1733/PN/2013 (A.Y:2009-10) ACIT, CIRCLE-4, PUNE APPELLANT VS. SHRI KRISHNA HARIBHAU LOHOKARE PROP. HARI-KRUPA BUILDERS, NO.19, UNITED APARTMENT, EAST STREET, CAMP, PUNE 411001 PAN: AAFPL4889D RESPONDENT APPELLANT BY : SHRI B.C. MALAKAR RESPONDENT BY : NONE DATE OF HEARING : 08.09.2014 DATE OF PRONOUNCEMENT : 09.09.2014 ORDER PER SHAILENDRA KUMAR YADAV : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE D ATED 28.03.2013 FOR A.Y.2009-10 ON THE FOLLOWING GROUNDS . 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN ALLOWING THE DEDUCTION U/S.80IB(10) OF THE ACT T O THE PROJECT MAHAGANESH NAGARI APPROVED ON 31.03.2001 AN D WHICH WAS STILL INCOMPLETE BY 31.03.2008 IN VIOLATI ON OF SECTION 80IB(10)(A)(I) OF THE ACT WHICH REQUIRES SU CH PROJECT TO BE COMPLETED BEFORE 31.03.2008. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN HOLDING THAT BUILDING PLAN APPROVED BY COLLECTOR ON 25.01.2007 WAS INDEPENDENT AND NOT EXTENSION OF BUI LDING PLAN APPROVED ON 31.03.2001 BY PUNE MUNICIPAL CORPORATION WITHOUT APPRECIATING THE FACT THAT THE BUILDINGS CONSTRUCTED AS PER THE FIRST PLAN WERE NO T A ITA NO.1733/PN/13 KRISHNA HARIBHAU LOHOKARE SEPARATE PROJECT FROM THE REVISED LAYOUT & BUILDING PLAN APPROVED ON 25.01.2007 AND THE ASSESSEE HAD CONSTRUCTED CONTIGUOUS BUILDINGS AS PER THE REVISED PLAN WHICH SHOWS THAT IT WAS ONE PROJECT. 3. ALTERNATIVELY, THE LEARNED COMMISSIONER OF INCOME-T AX (APPEALS) ERRED IN FAILING TO APPRECIATE THAT AS PE R EXPLANATION (II) TO SECTION 80IB(10)(A) OF THE ACT, THE COMPLETION CERTIFICATE IN RESPECT OF THE HOUSING PR OJECT HAS TO BE ISSUED BY THE LOCAL AUTHORITY AND NOT A GRAM PANCHAYAT. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 2. THE ASSESSEE IS AN INDIVIDUAL AND IS PROPRIETOR OF M/S HARIKRIPA BUILDERS ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT AND CONSTRUCTION OF RESIDENTIAL PROJECT S. THE ASSESSEE IS ALSO DERIVING INCOME FROM BUSINESS OF STONE QUAR RY AND HOTEL. THE RETURN OF INCOME WAS FILED DECLARING TOTAL INCO ME OF RS. 44,55,243/- AND THE SAME HAS BEEN ASSESSED U/S 143( 3) OF THE ACT DETERMINING THE TOTAL INCOME OF RS.1,75,27,907/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT AMOUNTING TO RS.1,30,72,664/-. THE ASSESSING OFFICER RELIED ON THE DETAILED DISCUSSION ON THE SAME ISSUE OF 80IB(10) DEDUCTION CLAIM OF THE ASSESSEE DISALLOWED DURING A.Y. 2006-07 AND FOUND T HE FACTS OF THE CASE DURING THE YEAR UNDER CONSIDERATION WAS SIMILA R TO A.Y. 2006- 07 AND THUS DISALLOWED THE CLAIM OF DEDUCTION U/S 8 0IB(10) OF THE ACT. 2.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF THE ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE. THE SAME HAS BEEN OPPOS ED BEFORE US ON BEHALF OF THE REVENUE, INTER ALIA, SUBMITTED THA T THE CIT(A) ERRED IN ALLOWING THE DEDUCTION U/S.80IB(10) OF THE ACT T O THE PROJECT MAHAGANESH NAGARI APPROVED ON 31.03.2001 AND WHICH WAS STILL ITA NO.1733/PN/13 KRISHNA HARIBHAU LOHOKARE INCOMPLETE BY 31.03.2008 IN VIOLATION OF SECTION 80 IB(10)(A)(I) OF THE ACT WHICH REQUIRES SUCH PROJECT TO BE COMPLETED BEF ORE 31.03.2008. ACCORDINGLY, THE ORDER OF CIT(A) BE SET ASIDE AND T HAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, NONE APPEA RED ON BEHALF OF THE ASSESSEE, SO THE MATTER IS BEING DECIDED EXPART E. 2.2 AFTER GOING THROUGH THE ARGUMENTS OF THE LEARNE D DEPARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF DEDU CTION OF RS.1,30,72,664/- U/S.80IB(10) OF THE ACT. IN FACT, A SIMILAR DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER IN A .Y.2006-07, SO FOLLOWING THE SAME, HE DISALLOWED THE DEDUCTION DUR ING THE YEAR UNDER CONSIDERATION AND THE SAME WAS CONFIRMED BY T HE CIT(A). IN SECOND APPEAL IN A.Y. 2006-07, THE TRIBUNAL IN ITA NO. 937/PN/2010 FOR A.Y. 2006-07 HAS ALLOWED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE PROJECT WAS APPROVE D ON 31-03- 2001 BY PMC AND THE PROJECT APPROVED ON 25.01.2007 WERE TWO DIFFERENT AND INDEPENDENT PROJECTS. THE CIT(A) IN THE YEAR UNDER CONSIDERATION FOUND THAT THE ISSUE WAS COVERED IN F AVOUR OF THE ASSESSEE BY DECISION OF ITAT, WHEREIN, THE TRIBUNAL HAS OBSERVED AS UNDER: 15. IN VIEW OF THE ABOVE WE HOLD THAT ASSESSEE SHO ULD NOT SUFFER FOR ANY ADMINISTRATIVE CHANGE WITH REGARD TO APPLICABILITY OF BUILDING BYE LAWS IN PARTICULAR AR EA. THE PROBLEM AROSE WITH REGARD TO COMPLETION CERTIFICATE BY PMC BY VIRTUE OF THE FACT THAT AREA OF THE LAND IN QUESTIO N WAS EXCLUDED FROM PMC LIMITS AT RELEVANT POINT OF TIME AS DISCUSSED ABOVE. IN SUCH PECULIAR CONDITIONS, THE BENEFIT BESTOWED ON ASSESSEE SHOULD NOT BE DENIED FOR NO FA ULT OF THE ASSESSEE. SUCH LIBERAL INTERPRETATION SHOULD BE US ED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMP LYING CERTAIN PROVISIONS FOR THE REASONS BEYOND HIS CONTR OL. IN CASE BEFORE US, PROBLEM AROSE DUE TO THE CHANGE OF JURIS DICTION WITH REGARD TO CONFUSION OF APPLICABILITY OF BUILDI NG BYE LAWS BECAUSE OF CHANGE OF JURISDICTION BY VIRTUE OF EXCL USION OF LAND IN QUESTION FROM PMC LIMITS. THE ASSESSEE SHOULD NO T SUFFER FOR THE SAME. UNDER SUCH CIRCUMSTANCES, LIBERAL INTERPRETATION SHOULD BE USED IN FAVOUR OF THE ASSE SSEE. IT IS ITA NO.1733/PN/13 KRISHNA HARIBHAU LOHOKARE SETTLED LEGAL POSITION THAT LAW ALWAYS GIVES REMEDY AND LAW DOES WRONG TO NO ONE. WE ARE AWARE THAT PROVISIONS OF SECTION 80IB(10) SUGGEST ABOUT ONLY COMPLETION OF CONSTRUCT ION AND NO ADJECTIVE SHOULD BE USED ALONGWITH WORD 'COMPLET ION'. THIS, STRICT INTERPRETATION SHOULD BE GIVEN IN NORM AL CIRCUMSTANCES BUT FACTS BEFORE US ARE PECULIAR BECA USE OF CHANGE OF JURISDICTION OF LAND FOR THE PURPOSE OF A PPLICABILITY OF BUILDING BYE LAWS. ASSESSEE WAS INCAPACITATED TO OBTAIN COMPLETION CERTIFICATE FROM PMC BECAUSE OF EXCLUSIO N OF LAND IN QUESTION FROM PMC LIMITS WHICH IS BEYOND THE CON TROL OF THE ASSESSEE. ASSESSEE SHOULD NOT SUFFER FOR THE SA ME. MOREOVER CONCERNED GRAM PANCHAYAT WHO ISSUE COMPLET ION CERTIFICATE WITHIN STIPULATED TIME IS ENTITLED FOR ISSUING COMPLETION CERTIFICATE AS STATED ABOVE AFTER EXCLUS ION OF THE LAND IN QUESTION FROM PMC LIMITS. THE TAXING STATUT E GRANTING INCENTIVES FOR PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PROVISION FOR PROMO TING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. AT THE SAME TIME, RESTRICTION THEREON HAS TO BE CONSTRUED STRIC TLY SO AS TO ADVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRAT E THE SAME. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUE D HARMONIOUSLY WITH, THE OBJECT OF THE STATUTE TO EFF ECTUATE LEGISLATIVE INTENTION. THIS VIEW IS FORTIFIED BY DE CISION OF PUNE TRIBUNAL IN THE CASE OF RAMSUKH PROPERTIES (SUPRA), RAHUL CONSTRUCTION CO. (SUPRA) AND OTHERS. 16. IN VIEW OF ABOVE, WE HOLD THAT GRAM PANCHAYAT K ESHAV NAGAR, MUNDHWA PUNE, IS LOCAL AUTHORITY FOR THE PUR POSE OF ISSUING COMPLETION CERTIFICATE FOR CLAIMING DEDUCTI ON U/S.80IB(10) IN RESPECT OF PROFIT FROM SALE OF ELIG IBLE FLATS IN PROJECT IN QUESTION. ASSESSEE FULFILLED ALL CONDITI ONS LAID DOWN FOR CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT AS D ETAILED ABOVE. THE ASSESSING OFFICER IS DIRECTED ACCORDINGL Y.' 2.3 THUS, THE ITAT PUNE HAS IN CLEAR TERMS HELD THA T THE PROJECT APPROVED BY PMC ON 31.03.2001 CONSISTED OF BUILDING S A,B,C,D & E AND THE LOCAL AUTHORITY FOR THE PURPOSES OF ISSUI NG COMPLETION CERTIFICATE FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT IS THE GRAM PANCHAYAT, KESHAV NAGAR, MUNDHWA, PUNE. IN VI EW OF THE ABOVE FACT THE CLAIM OF DEDUCTION U/S 80IB(10) OF T HE ACT FOR THE PROJECT APPROVED ON 31.03.2001 AND WHICH COMPRISES OF BUILDINGS A TO E OF 80 FLATS AMOUNTING TO RS.18,68,951/- WAS HELD ALLOWABLE FOR A.Y. 2006-07. IN VIEW OF ABOVE, THE CIT(A) ALL OWED THE CLAIM OF ITA NO.1733/PN/13 KRISHNA HARIBHAU LOHOKARE DEDUCTION U/S.80IB(10) OF THE ACT FOLLOWING THE DEC ISION OF ITAT IN A.Y.2006-07 AS DISCUSSED ABOVE. 2.4 NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLE DGE ON BEHALF OF THE REVENUE. FACTS BEING SIMILAR, SO FOL LOWING THE SAME REASONING, WE ARE NOT INCLINED TO INTERFERE WITH TH E FINDING OF CIT(A), WHO HAS ALLOWED THE CLAIM OF THE ASSESSEE B Y FOLLOWING THE DECISION OF ASSESSEES OWN CASE BY ITAT ORDER FOR A .Y. 2006-07. WE UPHOLD THE SAME. 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 9 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED THE 9 TH SEPTEMBER, 2014 GCVSR COPY TO:- 1) THE DEPARTMENT 2) ASSESSEE, 3) THE CIT(A)-II, PUNE 4) THE CIT-II, PUNE 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, PUNE.