Income-tax Officer, V. Mrs. Mala Mohan Bajaj, Pune

ITA 1867/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88822 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-01-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 15-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V L JAIN
• Keywords: Additional evidence; Reasonable cause; Competent authority
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1867/PN/2013 (ASSESSMENT YEAR : 2010-11) ITO, WARD-2(2), PUNE .. APPELLANT VS. MRS. MALA MOHAN BAJAJ, 1521, CLOVER HIGHLAND, NIBM ROAD, KONDHWA, PUNE 411048 PAN NO. AAVPB4530H .. RESPONDENT ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI RAJESH DAMOR DATE OF HEARING : 15-01-2015 DATE OF PRONOUNCEMENT : 22-01-2015 ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 17-05-2013 OF THE CIT(A)-II, PUNE RELATING TO ASSESSMENT YEAR 2010-11. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND CARRYING ON THE BUSINESS OF EXECUTIN G A HOUSING PROJECT AT PISOLI, PUNE IN THE NAME AND STYLE OF SA I PROMOTERS. HE IS ALSO THE PROPRIETOR OF MALA ESTATE AND INVESTMENTS. HE FILED HIS RETURN OF INCOME ON 15-10-2010 DECLARING TOTAL INCO ME OF RS.9,75,040/- AFTER CLAIMING DEDUCTION OF RS.39,78, 646/- U/S.80IB(10) OF THE I.T. ACT. THE AFORESAID DEDUCT ION U/S.80IB(10) WAS FOR THE PROFITS DERIVED FROM THE HOUSING PROJEC T LOCATED AT PISOLI, TALUKA HAVELI, DIST. PUNE. DURING THE COUR SE OF ASSESSMENT 2 PROCEEDINGS THE AO NOTED THAT THE HOUSING PROJECT O F THE ASSESSEE WAS GRANTED APPROVAL BY THE COLLECTOR VIDE LETTER D ATED 30-03-2007. HOWEVER, NO COMPLETION CERTIFICATE IN RESPECT OF TH E PROJECT FROM THE LOCAL AUTHORITY WAS FILED BY THE ASSESSEE. ON BEING CONFRONTED BY THE AO REGARDING THE ADMISSIBILITY OF THE CLAIM, THE ASSESSEE VIDE LETTER DATED 03-12-2012 SUBMITTED AS UNDER : ' IN SO FAR AS THE COMPLETION OF THE PROJECT IS CONCER NED, WE HAVE ALREADY FILED THE ARCHITECTS CERTIFICATE CONFIRMING THE COMPLETION OF THE PROJECT. THERE IS NO OTHER COMPLETION CERTIFICAT E FROM THE LOCAL AUTHORITY . THIS IS A PROJECT FALLING UNDER THE JURISD ICTION OF THE COLLECTORATE, PANE. FURTHER, OUR PROJECT WAS FULLY COMPLETED BEFORE THE STIPULATED TIME AND THE SAME WAS EVIDENCED BY THE ARCHITECTS CERTIFIC ATE DATED 02/03/2011, I.E. MUCH BEFORE THE STIPULATED TIME AS T HE SCHEDULED DATE OF COMPLETION AS PER THE SANCTION IS 31/03/2012. THE EXPLANATION REFERRING TO THE COMPLETION CERTIFI CATE FROM THE LOCAL AUTHORITY IS ONLY A MACHINERY PROVISION. THE HON. ITAT, PANE IN THE CASE OF CITY DEVELOPMENT CORPORATION HAVE HELD THAT 'THE MOOT QUESTION IS THE CONDITION OF THE COMPLETION CONSTRUCTION CONTAINED IN THE SUBSTANTIVE SE CTION 80IB(10(A)(I) IF FACTUALLY FOUND TO BE COMPLIED WIT H, CAN THE CONTENTS OF THE EXPLANATION CLAUSE (II) THEREOF, ALTE R THE SITUATION?.' THIS CONFIRMS THE POSITIONS THAT, WHAT IS REQUIRED IS TH E SUBSTANTIAL COMPLIANCE. SIMILAR VIEW WAS LAID DOWN BY THE GUJARAT HIGH COURT IN THE CASE OF CIT V/S TARNETAR CORPORATION, WHERE IN IT WAS HELD TH AT 'IN THE PRESENT CASE, THE FACT THAT THE ASSESSEE HAD COMPLETED CO NSTRUCTION WELL BEFORE 31 ST MARCH,2008 IS NOT IN DOUBT. IT IS OF COURSE THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNICIPA L AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLA NATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE C ONSTRUCTION TO THE BU PERMISSION GRANTED BY THE LOCAL AUTHORITY . HO WEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATOR Y. IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIEW THAT MINOR DEVIATI ON THEREOF WOULD NOT VITIATE THE VERY PURPOSE OF FOR WHICH THE DEDUCTION WAS BEING MADE AVAILABLE. SIMILARLY, HON ITAT (INDORE) IN THE CASE OF GLOBAL REALITY VS. ITA HELD THAT THE DATE OF ISSUE OF THE COMPLETION CERTIF ICATE IS NOT CRUCIAL BUT THE DATE OF THE COMPLETION OF THE PROJE CT IS RELEVANT THE COPIES OF ALL THE AFORESAID DECISIONS REFERRED ABOV E ARE ENCLOSED HEREWITH FOR YOUR READY REFERENCE. 3 IN VIEW OF ALL THE AFORESAID CLARIFICATIONS AND JUSTIF ICATIONS, REGARDING OUR CLAIM, IT IS HUMBLY REQUESTED THAT THE CLAIM BE ALLOWED 2.1 THE ASSESSEE ALSO RELIED ON THE FOLLOWING DECIS IONS : I. RUNWAL MULTIHOUSING PVT. LTD. VS. ACIT (PUNE) II. RAMANIYAM CASTLES PVT. LTD., VS. ACIT (CHENNAI) III. D.K. CONSTRUCTION VS. ITO (INDORE) 3. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLA NATION GIVEN BY THE ASSESSEE. ACCORDING TO THE AO, THE CE RTIFICATE ISSUED BY THE ARCHITECTS IS NOT ADMISSIBLE SINCE HE WAS AL SO WORKING FOR THE ASSESSEE. THE VARIOUS DECISIONS RELIED ON BY THE A SSESSEE WERE HELD TO BE NOT APPLICABLE TO THE FACTS OF THE PRESENT CA SE. THE AO ACCORDINGLY HELD THAT THE ASSESSEES PROJECT IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S.80IB(10) OF THE ACT SINCE TH E COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY WAS NOT SUBMIT TED. 4. BEFORE CIT(A) IT WAS SUBMITTED THAT PROJECT WAS PHYSICALLY COMPLETE BEFORE THE SCHEDULED DATE OF COMPLETION, I .E. 31-03-2012. IT WAS SUBMITTED THAT THE ARCHITECT HAS CERTIFIED T HE COMPLETION OF THE PROJECT ON 02-03-2011 AND THE SAID COMPLETION C ERTIFICATE FROM THE ARCHITECT WAS FILED WITH THE LOCAL AUTHORITY ON 05-03-2011 AND THE LOCAL AUTHORITY HAD NOT RAISED ANY OBJECTION TO THE SAME TILL DATE. IT WAS SUBMITTED THAT THE RECEIPT OF THE COMPLETION CERTIFICATION APPLICATION IS CONFIRMED BY THE LOCAL AUTHORITY, I. E. GRAM PANCHAYAT VIDE LETTER/CERTIFICATE DATED 17-12-2012. IT WAS S UBMITTED THAT MERE NON-COMPLIANCE WITH THE MACHINERY REQUIREMENT PROVI DED IN THE EXPLANATION IS CONSEQUENTIAL AND DOES NOT GO AGAINS T THE CLAIM OF 4 THE ASSESSEE. RELYING ON THE FOLLOWING DECISIONS I T WAS SUBMITTED THAT THE DEDUCTION HAS TO BE ALLOWED : 1. CIT VS TARNETAR CORPORATION, TAX APPEAL NO. 124 1 OF 2011 (GUJ) 2. RUNWAL MUTIHOUSING PVT LTD VS ACIT, 1015, 1016 & 1017/PN/2011 [ITAT, PUNE] 3. RAMANIYAM CASTLES (P) LTD VS ACIT (2011) 136 TTJ 101 (CHENNAI) 4. D K CONSTRUCTION VS ITO, ITA 243/LND/2010, ITAT INDORE 5. CITY DEVELOPMENT CORPORATION VS ACIT ITA NO. 57 & 1287/PN/2010 [ITAT, PUNE] 6. GLOBAL REALITY VS ITO (2012) 134 ITD 407 (IND) 7. RMS INFRASTRUCTURE LTD, 54 SOT 95 8. SANGHVI & DOSHI ENTERPRISES, 131 ITO 151 4.1 IN APPEAL THE LD.CIT(A) FOLLOWING THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF RUNWAL MULTIHO USING PVT. LTD., VS. ACIT ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10 ) OF THE ACT AS MADE BY THE ASSESSEE. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE INCOME TAX ACT, 1961 TO A HOUSING PROJECT APPROVED ON 30.03.2007 AND WAS STILL INCOMPLETE BY 31.03.2012 IN VIOLATION OF SECTION 80IB(10)(A)(III) OF THE ACT WHICH REQUIRES SUCH PROJECT TO BE COMPLETED WIT HIN FIVE YEARS FROM END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJ ECT IS APPROVED. 2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN FAILING TO APPRECIATE THAT AS PER EXPLANATION (II) TO SECTION 80IB(10)(A) OF THE ACT, THE COMPLETION CERTIFICATE IN RESPECT O F THE HOUSING PROJECT HAS TO BE ISSUED BY THE LOCAL AUTHORITY AND NOT BY ASSESSEE'S ARCHITECT. 3) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY OR ALL THE GROUNDS OF APPEAL. 6. THE LD. DEPARTMENTAL REPRESENTATIVE HEAVILY RELI ED ON THE ORDER OF THE AO. 7. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND WHILE SUPPORTING THE ORDER OF THE CIT(A) REFERRED TO PAGE 63 OF THE PAPER 5 BOOK AND SUBMITTED THAT THE ARCHITECT HAS CERTIFIED THE COMPLETION OF THE PROJECT ON 02-03-2011. THE COMPLETION CERTIFICA TE FROM THE ARCHITECT WAS FILED WITH THE LOCAL AUTHORITY (COPIE S OF WHICH IS FILED AT PAGES 30 AND 30A OF THE PAPER BOOK). THE LOCAL AUTHORITY HAS NOT RAISED ANY OBJECTION TO THE SAME TILL DATE. FURTHE R, THE ASSESSEE HAS OFFERED THE INCOME ON THE SALE OF THE UNITS IN THE A.Y. 2010-11 ITSELF WHICH OTHERWISE SHOWS THAT THE PROJECT HAS B EEN COMPLETED BY 31-03-2010. ONLY AS A MATTER OF ABUNDANT PRECAUTIO N THE ASSESSEE OBTAINED CERTIFICATE FROM THE ARCHITECT FOR COMPLET ION OF THE PROJECT. OTHERWISE THE ASSESSEE HAS COMPLIED WITH ALL THE PR OVISIONS. THEREFORE, MERE NON-RECEIPT OF THE COMPLETION CERTI FICATE FROM THE GRAM PANCHAYAT FOR NO FAULT ON THE PART OF THE ASSE SSEE CANNOT BE A GROUND FOR REJECTING THE CLAIM OF DEDUCTION U/S.80I B(10). THE ASSESSEE CANNOT BE HELD RESPONSIBLE FOR NON ISSUANC E OF THE COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY FOR N O FAULT ON ITS PART. FOR THE ABOVE PROPOSITION, HE RELIED ON THE DECISIO NS OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF HINDUSTAN SAMU HA AWAS LTD. VIDE ITA NOS. 945 TO 950/PN/2010, ORDER DATED 30-08 -2011 FOR A.YRS. 2002-03 TO 2007-08 AND IN THE CASE OF HIRAMA N NIVRUTTI BHUJBAL VS. ITO VIDE ITA NO.667/PN/2013 ORDER DATED 27-05-2015 FOR A.Y. 2009-10. HE ACCORDINGLY SUBMITTED THAT TH E ORDER OF THE LD.CIT(A) BEING IS IN CONSONANCE WITH LAW SHOULD BE UPHELD AND THE GROUNDS RAISED BY THE REVENUE SHOULD BE DISMISS ED. 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 BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO 6 CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE ASSESSEE IS AN INDIVIDUAL AND HAS EXECUTED A HOUSING PROJECT IN THE NAME AND STYLE OF SAI PROMOTERS AND THE PROJECT IS LOCATED AT PISOLI, TALUKA HAVELI, DIST. PUNE. AS P ER THE CERTIFICATE ISSUED BY THE ARCHITECT DATED 02-03-2011 THE HOUSI NG PROJECT IS COMPLETE IN ALL RESPECTS. THE ARCHITECTS CERTIFIC ATE HAS BEEN FILED BEFORE THE GRAM PANCHAYAT ON 05-03-2011 WHICH HAS B EEN ACKNOWLEDGED BY THE GRAM PANCHAYAT. 8.1 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF HIRAMAN NIVRUTTI BHUJBAL (SUPRA) HAS HELD THAT GRAM PANCHAYAT IS A LOCAL AUTHORITY FOR THE PURPOSE OF ISSUING COMPLE TION CERTIFICATE FOR CLAIMING DEDUCTION U/S.80IB(10) IN RESPECT OF P ROFIT FROM SALE OF ELIGIBLE FLATS IN A PROJECT WHICH IS SITUATED IN A VILLAGE WHICH FALLS UNDER THE GRAM PANCHAYAT. SIMILARLY, THE PUNE BENC H OF THE TRIBUNAL IN THE CASE OF HINDUSTAN SAMUHA AWAS LTD., (SUPRA) AT PARA 9 OF THE ORDER HAS OBSERVED AS UNDER : 9. FROM THE ABOVE, ONE THIS IS CLEAR THAT THE DATE THAT APPEAR ON THE ARCHITECT'S COMPLETION CERTIFICATE FILED BEF ORE THE LOCAL AUTHORITY IS A RELEVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25- 3-2008 AND THE ASSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMATING THE COMPLETION OF THE PROJECT . THE SAID CERTIFICATE/ INTIMATION WAS ACCEPTED BY THE LOCAL AU THORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORITY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING O R THE COMPLETION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, 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 CERT IFICATE BEFORE 31.3.2008 IS BEYOND THE CONTROL OF THE ASSESSEE. ASSESSEE'S JOB INCLUDES THE I COMPLETION OF THE BUILDING IN ACC ORDANCE WITH THE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCA L AUTHORITY BY WAY OF FILING THE REQUISITE FORMS TOGETHER WITH TH E COMPLETION CERTIFICATE GIVEN BY THE ARCHITECT, THE SPECIALIST I N THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWE VER, THE LOCAL AUTHORITY HAS NEITHER OBJECTED TO THE SAID APPLICATION OF THE ASSESSEE AND THE ARCHITECT BY RAISING ANY OBJECTIONS NOR 7 ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10.10.2008. THEREFORE, THE DELAY IN GRANT OF THE SAID CERTIFICAT E IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE. THEREFORE, IN OUR OPINION , THE ASSESSEE IS NOT DEFAULTER ON THIS ACCOUNT AND THUS, THE AO HAS E RRED IN DENYING THE DEDUCTION U/S 80IA(10) OF THE ACT. ACCOR DINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROU NDS RAISED IN THE APPEAL ARE ALLOWED. 8.2 IN THE INSTANT CASE ALTHOUGH THE ASSESSEE HAS F ILED THE ARCHITECTS CERTIFICATE TO THE GRAM PANCHAYAT FOR I SSUING THE OCCUPANCY CERTIFICATE, HOWEVER, NEITHER THE SAME IS ISSUED NOR ANY OBJECTION RAISED. THE SUBMISSION OF THE ASSESSEE T HAT IT HAS SOLD THE FLATS AND DECLARED THE REVENUE IN THE A.Y. 2010-11 ITSELF ALSO COULD NOT BE CONTROVERTED BY THE LD. DEPARTMENTAL REPRESE NTATIVE. 8.3 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF RUNWAL MULTIHOUSING PVT. LTD., (SUPRA) HAS OBSERVED AS UNDER : 20. SO FAR AS THE FIRST OBJECTION OF THE REVENUE THA T COMPLETION CERTIFICATE FROM PMC HAS NOT BEEN OBTAINED BY THE ASSE SSEE BEFORE 31-03-2008 WE FIND THE ASSESSEE THROUGH HIS ARCHITECT VI DE APPLICATION DATED 22-01-2004 HAS APPLIED TO PMC FOR OCCUPANCY CERTIFICATE. (PAGE 119 OF THE PAPER BOOK). THE SUBM ISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE PMC HAS NOT YET REJECTED THE SAID APPLICATION TILL DATE COULD NOT BE CONTROVE RTED BY THE REVENUE. THE FURTHER SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT ALL THE FLAT OWNERS/ROW HOUSE OWNERS HAVE BE EN GIVEN POSSESSION BETWEEN 26-10-2002 TO 15-01-2007, I.E. PRIOR TO 31-03-2008 COULD NOT BE CONTROVERTED BY THE LEARNED DR (PAGE 55 TO 63 OF THE PAPER BOOK). THE LEARNED DR ALSO COULD NOT CONTROVERT THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THA T PMC HAS STARTED LEVYING MUNICIPAL TAXES AND THE ELECTRICITY M ETERS ARE IN THE NAME OF THE FLAT OWNERS WHO HAVE STARTED PAYING ELECT RICITY BILLS. 20.1 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF CITY DEVELOPMENT CORPORATION VS. ACIT ITA NO. 57 AND 1287/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 CERTIF ICATE OF BUILDING 'E' HAVING BEEN ISSUED BY THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL CORPORATION, ON 5-5-2008. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80- IB(10) REQUIRES THAT THE CONSTRUCTION OF THE PROJEC T IN QUESTION IS TO BE COMPLETED ON OR BEFORE 31-3-2008. CLAUSE (II) OF EX PLANATION BELOW SECTION 80-IB(10)(A) PRESCRIBES THAT THE DATE OF CO MPLETION OF CONSTRUCTION OF HOUSING PROJECT SHALL BE TAKEN TO B E THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSI NG PROJECT IS ISSUED BY THE LOCAL AUTHORITY. IN THE PRESENT CASE, IT HAS BE EN ISSUED ON 5-5-2008 8 AND HENCE THE CASE SET UP BY THE REVENUE THAT THE C OMPLETION IS BEYOND THE MANDATED DATE OF 31-3-2008. IN THIS BACKGROUND, WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE APPLIED FOR OBTAINI NG THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING 'E' ON 12-3-2008 . FROM THE DISCUSSION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORD ER, WHEREIN THE FACTUAL ASSERTIONS OF THE ASSESSEE HAVE BEEN REPROD UCED, IT IS QUITE EVIDENT THAT THE ASSESSEE ASSERTED THAT BEFORE 31-3 -2008, THE CONSTRUCTION OF BUILDING WAS COMPLETE IN ALL RESPEC TS; THAT ELECTRICAL CONNECTION WAS PROVIDED TO EACH FLAT OWNER; ROAD WA S COMPLETE; WATER AND DRAINAGE CONNECTION WAS AVAILABLE; SEWERAGE SYS TEM WAS OPERATING; CLUB HOUSE WAS FUNCTIONAL; ETC. THE ASSE SSEE ALSO POINTED OUT THAT THE LOCAL AUTHORITY HAD ALSO INITIATED PRO PERTY TAX ASSESSMENTS FOR EACH OF THE FLATS AND THE SAME DEMONSTRATED THA T ALL THE FLATS IN THE BUILDING WERE COMPLETE. IN FACT, IN PARA 6.9 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER NOTICED THAT 'THE FACTS THAT THE FLATS WERE COMPLETED AND POSSESSION GIVEN WILL NOT COME TO THE RESCUE OF THE ASSESSEE'. THE AFORESAID FINDING OF THE ASSESSING OFFICER SUPPORTS THE ASSERTION MADE BY THE ASSESSEE THAT FACTUALLY SPEAKING CONSTRUCTIO N OF FLATS IN BUILDING 'E' WAS ALSO COMPLETE AND POSSESSION HANDED OVER TO THE ACTUAL USER/CUSTOMERS PRIOR TO 31-3-2008. PERTINENTLY, ON THE BASIS OF THE ARCHITECT'S CERTIFICATE CONFIRMING COMPLETION OF CO NSTRUCTION OF BUILDING, THE ASSESSEE APPLIED FOR THE COMPLETION C ERTIFICATE TO THE PUNE MUNICIPAL CORPORATION ON 12-3-2008. IT HAS BEEN POI NTED OUT BEFORE US THAT THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL CORPOR ATION DID NOT RAISE ANY OBJECTION WITH REGARD TO ASSESSEE'S APPLICATION AND THE CERTIFICATE 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 TH AT THE ASSESSEE'S PROJECT DID NOT COMPLY WITH THE CONDITION PRESCRIBE D 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 SI MILAR SITUATION WAS CONSIDERED BY OUR CO-ORDINATE BENCH IN THE CASE OF HINDUSTAN SAMUTHA AWAS LTD. (SUPRA) WHEREIN ALSO ON THE STREN GTH OF ARCHITECT'S CERTIFICATE, AN APPLICATION FOR OBTAINING COMPLETIO N CERTIFICATE WAS MOVED TO THE LOCAL AUTHORITY ON 25-2-2008 BUT IN AC TUALITY THE COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTH ORITY ON 10-10-2008. THE TRIBUNAL NOTICED THAT THE DELAY IN ISSUING COMP LETION CERTIFICATE WAS NOT ATTRIBUTABLE TO THE ASSESSEE AS NO OBJECTIO NS WERE RAISED BY THE LOCAL 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 SANGHVI AND DOSHI ENTERPRISES V S. ITO AND OTHERS ITA NO. 259 TO 263/MDS/2010 DATED 19-5- 2011 FOR A.Y. 2005- 06 AND 2006-07 (TM) HAS CONCLUDED AS FOLLOWS: 'FROM THE ABOVE, ONCE THIS IS CLEAR THAT THE DATE THAT APPEARS ON THE ARC HITECT'S COMPLETION CERTIFICATE FILED BEFORE THE LOCAL AUTHORITY IS REL EVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25- 3-2008 AND THE ASSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMATING THE COMPLET ION OF THE PROJECT. THE SAID CERTIFICATE/INTIMATION WAS ACCEPTED BY THE LOCAL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORI TY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUIL DING OR THE COMPLETION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OB TAINING THE COMPLETION CERTIFICATE ON 10-10-2008 IS CERTAINLY N OT ATTRIBUTABLE TO THE ASSESSEE AND OBTAINING THE SAID CERTIFICATE BEFORE 31-3-2008 IS BEYOND THE CONTROL OF THE ASSESSEE. ASSESSEE'S JOB INCLUDE S THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHORITY BY WAY OF FILING THE RE QUISITE FORMS TOGETHER WITH THE COMPLETION CERTIFICATE GIVEN BY THE ARCHIT ECT, THE SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPU LOUSLY IN THIS CASE. 9 HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJECTED T O THE SAID APPLICATION OF THE ASSESSEE AND THE ARCHITECT BY RA ISING ANY OBJECTIONS FOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICAT E TILL 10-10-2008. THEREFORE, THE DELAY IN GRANT OF THE SAID CERTIFICA TE IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE. THEREFORE, IN OUR OPI NION, THE ASSESSEE IS NOT DEFAULTER ON THIS ACCOUNT AND THUS, THE AO HAS ERRED IN DENYING THE DEDUCTION U/S 80-IB(10) OF THE ACT. ACCORDINGLY, TH E ORDER OF THE CIT(A) HAS TO BE REVERSED. 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 COMPLETION CERTIFICATE WAS APPLIED FOR BEFORE 31-3-2008 I.E. O N 12-3-2008. IT IS UNDISPUTABLE THAT THE APPLICATION OF THE ASSESSEE H AS BEEN APPROVED BY THE LOCAL AUTHORITY WITHOUT RAISING ANY AMENDMENT O R OBJECTION, AS HAS BEEN ASSERTED BY THE ASSESSEE ALL ALONG AND THE DEL AYED ISSUANCE OF THE COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY ON 5- 5-2008, ALBEIT AFTER THE MANDATED DATE OF 31-3-2008 CANNOT BE ATTRIBUTED TO THE ASSESSEE. IN THIS BACKGROUND OF THE MATTER, WE THEREFORE, FIND A MPLE FORCE IN THE PLEA OF THE ASSESSEE THAT DENIAL OF DEDUCTION U/S 80-IB( 10) ON SUCH SCORE IS UNCALLED FOR. IN CONCLUSION THEREFORE, IN THE INSTA NT FACTUAL BACKGROUND, WE HOLD THAT THE ASSESSEE HAS COMPLIED WITH THE CON DITION OF COMPLETING THE CONSTRUCTION OF THE PROJECT WITHIN THE MANDATED DATE OF 31-3- 2008 EVEN WITH REGARD TO BUILDING 'E', FOLLOWING THE PAR ITY OF THE REASONING LID DOWN IN THE CASE OF HINDUSTAN SAMUTHA AWAS LTD. (SUPRA). . 14. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(1 0) OF THE ACT REQUIRES THAT THE UNDERTAKING, DEVELOPING AND BUILDING A HOU SING PROJECT 'COMPLETES SUCH CONSTRUCTION' OR BEFORE 31-3-2008. IN THE PRESENT CASE, ASSESSEE HAS FACTUALLY ASSERTED RIGHT FROM THE STAG E OF ASSESSMENT PROCEEDINGS, THAT THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE IN ALL RESPECTS AS PER SANCTIONED PLAN AND ALL THE FLATS W ERE HANDED OVER TO THE ACTUAL USERS/CUSTOMERS PRIOR TO 31-3-2008. IN T HE BACKGROUND OF THE AFORESAID FACTUAL POSITION WHICH HAS REMAINED UNCON TROVERTED, IN OUR VIEW, ON A PLAIN READING OF SUB-CLAUSE (I) OF CLAUS E (A) TO SECTION 80- IB(10) THE CONDITION PRESCRIBED THEREIN IS FULFILLE D., INASMUCH AS THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE BEFORE 31 -3-2008. HOWEVER, ON THE READING OF CLAUSE (II) OF THE EXPLANATION BE LOW SEC. 80-IB(10)(A) OF THE ACT, IT EMERGES THAT THE COMPLETION OF CONST RUCTION OF A HOUSING PROJECT IS TO BE TAKEN TO BE THE DATE ON WHICH COMP LETION CERTIFICATE 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 CO NTAINED IN THE SUBSTANTIVE SECTION 80-0IB(10)(A)(I) IS FACTUALLY F OUND TO BE COMPLIED WITH, CAN THE CONTENTS OF THE EXPLANATION CLAUSE (I I) THEREOF, ALTER THE SITUATION? CAN AN EXPLANATION APPENDED TO A SECTION , ENLARGE THE SCOPE OF THE MAIN SECTION SO AS TO MAKE IT MORE ONEROUS F OR A TAX- PAYER? BE THAT AS IT MAY, WE DO NOT DWELL ON THIS ASPECT ANY FURTHER, AS THE ASSESSEE HAS BEEN FOUND TO BE ELIGIBLE FOR NECESSAR Y 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 THA T THE ASSESSEE CANNOT BE DENIED THE CLAIM OF DEDUCTION U/S 80-IB(10) ON T HE STRENGTH OF NON- ISSUANCE OF THE COMPLETION CERTIFICATE FOR BUILDING 'E' BY THE PUNE MUNICIPAL CORPORATION BEFORE 31-3-2008, HAVING REGA RD 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 : 10 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. U NDER SUB-CLAUSE (I) OF CLAUSE (A) OF SECTION 80IB(10), THE ASSESSEE SINCE HAD GOT APPROVAL FOR THE HOUSING PROJECTS FROM THE LOCAL AUTHORITY BEFOR E 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 CON STRUCTION MUST BE DEEMED TO HAVE BEEN COMPLETED AFTER SUCH DATE. EXP LANATION (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 COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS I SSUED BY THE LOCAL AUTHORITY. CIT (APPEALS) AS WELL AS THE TRIBUNAL AFTER DETAILE D DISCUSSION CAME TO THE CONCLUSION THAT SUCH REQUIREMENT WAS NO T MANDATORY IN NATURE. IN THE PRESENT CASE, THE ASSESSEE HAD COMP LETED THE CONSTRUCTION WELL BEFORE THE LAST DATE, NAMELY 31 ST MARCH 2008 AND HAD ALSO SOLD SEVERAL UNITS WHICH WAS COMPLETED AND ACT UALLY OCCUPIED, AND IT ALSO APPLIED FOR BU PERMISSION TO THE LOCAL AUTH ORITY. THE LOCAL AUTHORITY, HOWEVER, FOR TECHNICAL REASONS, AT ONE S TAGE REJECTED SUCH APPLICATION IN THE YEAR 2006 AND THEREAFTER UPON RE VISED 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 TRIBUNAL NOTED THAT THE CONSTRUCTION WAS COMPLETED IN 2006. APPLICATIO N FOR BU PERMISSION TO THE MUNICIPAL AUTHORITIES WAS FILED O N 15-02-2006 WHICH WAS REJECTED ON 1-07-06. SEVERAL RESIDENTIAL UNITS WERE OCCUPIED SINCE THE SAME WAS DONE WITHOUT NECESSARY PERMISSION. TH E ASSESSEE HAD DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HA D ALSO PAID PENALTY AND GOT SUCH OCCUPATION REGULARISED. SEVERAL TENEM ENTS WERE SOLD LONG BEFORE THE LAST DATE. 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 TR UE THAT EXPLANATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUT HORITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS M ANDATORY. IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON RE CORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIEW THAT MINOR DEVIATION TH EREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WAS BE ING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE A SSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE TH E FINAL 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, GRAN TING BENEFIT OF DEDUCTION CANNOT 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/2010 ORDER DATED 30-08-2011 HAS HELD AS UNDER : 11 7. WE HAVE CONSIDERED THE ABOVE VIEW POINTS OF THE PARTIES IN DISPUTED. WE FIND THAT IT IS A FACT THAT THE ASSESS EE THROUGH ITS ARCHITECT HAD FILED APPLICATION WITH THE AMC FOR ISSUANCE OF OCCUPANCY CERTIFICATE ON 25-3-2008. REQUISITE FEE WAS ALSO P AID BY THE ASSESSEE IN THIS REGARD. AMC DID NOT RAISE ANY OBJECTION TO THE SAID COMPLETION CERTIFICATE OF THE ARCHITECT. THE OCCUPANCY CERTIFI CATE DT.10-10-2008 HAS BEEN ISSUED BY THE AMC ONLY ON THE BASIS OF THE SAI D APPLICATION DT.25- 3-2008. IT IS ALSO AN UNDISPUTED FACT THAT ISSUANC E OF OCCUPANCY CERTIFICATE IS THE PREROGATIVE OF THE LOCAL AUTHORI TY I.E. AMC AND IN THIS REGARD, THE ASSESSEE HAS NO CONTROL AND IT IS BEYON D THE POWER OF THE ASSESSEE TO MAKE THE AMC ISSUE THE SAID COMPLETION/ OCCUPANCY CERTIFICATE BEFORE 31.3.2008. WHAT WAS UNDER THE P OWER AND CONTROL OF THE ASSESSEE WAS ONLY TO MOVE THE AMC FOR COMPLETIO N CERTIFICATE FULFILLING ALL THE REQUIREMENTS WITH THE AMC FOR IS SUANCE OF OCCUPANCY CERTIFICATE, WHICH THE ASSESSEE HAS DONE IN THE PRE SENT CASE. THUS, THE DELAY IN ISSUING THE OCCUPANCY CERTIFICATE CANNOT B E 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 COMPLETED BY 31-3-2008, ESPECIALLY WHEN THERE IS NO OBJECTION RAISED BY THE AMC REGARDING DEVIATION IN THE CONSTRUCTION OF THE PROJECT APPROV ED BY THE AMC. 8. WE HAVE GONE THROUGH THE ORDERS CITED BY THE AS SESSEES REPRESENTATIVE AND FIND RELEVANT PARAGRAPHS ARE REQ UIRED TO BE EXTRACTED FOR COMPLETION OF THE ORDER. THEY ARE AS FOLLOWS. A. EXTRACT FROM THE DECISION OF THE TRIBUNAL IN THE C ASE OF M/S. SATISH BORA & ASSOCIATES VIDE ITA NOS. 713 & 714/P N/2010 19. . 1. IN THE CASE OF PMC, THE COMPLETION CERTIFICATE I N PRESCRIBED FORM ISSUED BY THE LICENSED ARCHITECT ET C. WHO HAS SUPERVISED THE CONSTRUCTION IS FURNISHED WITH FOUR SETS OF COMPLETION PLAN UNDER RULE 7.6 OF THE DC RULES OF T HE PMC. THEREAFTER PMC IS REQUIRED TO RETURN ONE OF THE SE TS DULY CERTIFIED AS COMPLETION PLAN TO THE OWNER ALONG WIT H THE ISSUE OF FULL OCCUPANCY CERTIFICATE AFTER INSPECTION OF T HE WORK UNDER RULE 7.7 OF THE DC RULES. SINCE EXPLANATION (II) T O SECTION 80IB(10)(A) OF THE I.T. ACT REQUIRES COMPLETION CER TIFICATE ISSUED BY THE LOCAL AUTHORITY TO BE TAKEN AS THE DA TE OF COMPLETION OF THE CONSTRUCTION, A GENERAL UNDERSTAN DING IN OUR VIEW IS THAT A COMPLETION CERTIFICATE WHICH IS IS SUED BY THE LOCAL AUTHORITY AFTER CONDUCTING INSPECTIONS OF CON STRUCTION BY IT. IN CASE OF PMC, IT IS ONLY OCCUPANCY CERTIF ICATE WHICH IS ISSUED ALONGWITH CERTIFIED COMPLETION PLAN AFTER IN SPECTION OF THE CONSTRUCTION BY IT, WE HAVE TREATED THE DATE OF ISSUANCE OF SUCH OCCUPANCY CERTIFICATE ALONGWITH CERTIFIED COMP LETION PLAN AS THE DATE OF COMPLETION CERTIFICATE OF THE C ONSTRUCTION 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 L EGISLATURE HAVE ALSO INTRODUCED A DEEMING PROVISION OF 21 DAYS TO PUT CONSTRAINT UPON 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 DEEM ING PERIOD OF 21 DAYS UNDER RULE 7.7 OF DC RULES UNDER PMC, T HE DATE WHEN THE APPLICANT ACQUIRED DEEMING SANCTION WILL B E TREATED AS THE DATE OF COMPLETION (OCCUPANCY) CERTIFICATE TO M EET OUT THE 12 REQUIREMENT OF EXPLANATION (II) TO SECTION 80IB (10 )(A) OF THE ACT. WE HAVE ALREADY DISCUSSED HEREINABOVE WHAT WO ULD BE THE SMALL OBJECTIONS. IN BRIEF THOSE OBJECTIONS WHICH DO NOT AFFECT THE MAIN PROJECT AND ARE GENERALLY TEMPORARY CONSTR UCTIONS. 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 YEA RS UNDER CONSIDERATION TREATING THE REQUIRED DATE OF COMPLET ION OF CONSTRUCTION OF THE HOUSING PROJECT AS THE DATE WHE N ABOVE DISCUSSED DEEMING PROVISION PERIOD OF 21 DAYS EXPIR ED 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 THAT THE PROJECT HAD TO BE COMPLETED ON OR BEFORE 31.03.2008 AND SIN CE THE ASSESSEE DID NOT 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 AFTER THE DUE DATE FOR COMPLETING THE PROJECT. IN THIS CONNECTION, IT HAS TO BE NOTED THAT THE COMPLE TION CERTIFICATE IS TO BE ISSUED BY THE LOCAL AUTHORITY. THE QUESTI ON IS, WHETHER CMDA CAN BE CONSIDERED TO BE A LOCAL AUTHORITY OR N OT. THIS ISSUE HAD COME UP BEFORE THE CHENNAI BENCH OF THE T RIBUNAL IN THE CASE OF JAIN HOUSING & CONSTRUCTIONS LTD. IN I TA NO.1369/MDS/2009 DATED 5.2.2010. IN THAT CASE, ASS ESSEE WAS DENIED DEDUCTION IN THE ABSENCE OF COMPLETION CERTI FICATE BY THE CMDA BUT COMPLETION CERTIFICATE ISSUED BY THE CORPO RATION OF CHENNAI WAS PLACED ON RECORD. THE TRIBUNAL IN PARA GRAPH 3.5 OF ITS ORDER STATED THAT THE PROJECT LAYOUT PLAN MA Y BE REQUIRED TO BE APPROVED BY THE CMDA BUT AS FAR AS THE CONSTR UCTION OF THE BUILDING IS CONCERNED, THE LOCAL AUTHORITY, I.E . THE CORPORATION OF CHENNAI IS THE APPROPRIATE AUTHORITY TO REGULATE THE CONSTRUCTION AS PER THE BUILDING BYE-LAWS AND S ANCTION 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 CERTIF ICATE ISSUED BY THE CORPORATION BY WAY OF ADDITIONAL EVIDENCE. SINCE THE ALLOWABILITY OF THE ENTIRE DEDUCTION DEPENDS ON ALL THE CONDITIONS BEING FULFILLED DEDUCTION DEPENDS ON ALL THE CONDITIONS BEING FULFILLED, WE ADMIT THIS ADDITIONA L EVIDENCE. THE CERTIFICATE CLEARLY MENTIONS 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 DEVE LOPMENT AND URBANISATION OF THE CITY AS A WHOLE. ON THE OTHER HAND, THE ROLE OF THE CORPORATION WHILE ISSUING COMPLETION CE RTIFICATE IS TO SEE THAT THE UNIT IS HABITABLE IN ALL RESPECTS LIKE CIVIC AMENITIES AND SO ON. EVEN FOR THE SAKE OF ARGUMENT IF THE CM DA CERTIFICATE IS TO BE CONSIDERED, THEN IN THAT CASE, THE ASSESSEE DID APPLY FOR THE COMPLETION CERTIFICATE TO CMDA CERTIF ICATE ON 13.3.2006. IT IS A DIFFERENT MATTER THAT CMDA RAIS ED CERTAIN OBJECTIONS AND THE MATTER WENT UPTO THE HONBLE HI GH COURT ALSO. HOWEVER, THE FACT REMAINS THAT THE PROJECT W AS COMPLETED MUCH BEFORE THE DUE DATE, MAY BE WITH CERTAIN DEFEC TS. ALSO, IT 13 HAS TO BE NOTED THAT THE CMDA CERTIFICATE IS DATED 13.6.2008, I.E. ONLY TWO MONTHS AND THIRTEEN DAYS BEYOND THE D UE DATE. IT IS INCONCEIVABLE THAT THE TYPE OF DEFECTS WHICH WERE P OINTED OUT BY THE CMDA COULD HAVE BEEN RECTIFIED IN SUCH A SHORT PERIOD. BE THAT AS IT MAY, THE HONBLE HIGH COURT ALSO RATIFIE D THE DEVIATIONS AND DIRECTED THE CMDA TO CONSIDER THE EX PLANATION OF THE ASSESSEE. ALL THESE FACTS GO TO POINT THAT THE PROJECT WAS INDEED COMPLETED BEFORE THE 31.3.2008. THUS, THIS GROUND ALSO HAS NO FORCE TO DENY THE ASSESSEE THE IMPUGNED DEDU CTION. 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 ATTENTI ON WAS INVITED DURING THE COURSE OF HEARING BY THE LD. AUT HORIZED REPRESENTATIVE AND THE LD. SENIOR D.R. PROVISIONS OF SECTION 80IB ALLOWS CLAIM FOR DEDUCTION IN RESPECT OF HOUSI NG PROJECT, WHICH HAS BEEN APPROVED PRIOR TO 1.4.2004 AND ALSO COMPLETED BEFORE 31.3.2008. DURING THE COURSE OF ASSESSMENT WITH REGARD TO ASSESSEES CLAIM OF DEDUCTION U/S 80IB IN RESPEC T OF ITS D.K.HONEY HOMES PROJECT, THE AO HAS ASKED THE ASSES SEE TO FURNISH THE CERTIFICATE OF COMPLETION OF THIS PROJE CT M/S. D.K.HONEY HOMES. THE AO ALSO DIRECTLY CALLED INFOR MATION FROM THE LOCAL AUTHORITIES BY ISSUING SUMMONS U/S.1 33(6) AND A LETTER WAS ISSUED BY THE COMPETENT AUTHORITY DATED 11 TH NOVEMBER, 2008, CONFIRMING THAT NO COMPLETION CERTI FICATE HAS BEEN ISSUED BY THIS OFFICE. ACCORDINGLY, THE ASSES SEES CLAIM FOR DEDUCTION U/S 80-IB WAS DECLINED. SECTION 80IB CLE ARLY DEFINES THE DATE OF COMPLETION AS DATE OF COMPLETION OF CO NSTRUCTION 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 AU THORITIES IS COMPETENT TO CERTIFY THE DATE OF COMPLETION OF HOUS ING PROJECT. THE DATE OF ISSUE OF SUCH LETTER BY THE LOCAL AUTHO RITIES IS NOT SO CRUCIAL BUT IT SHOULD HAVE CLEARLY MENTIONED THE DA TE OF COMPLETION OF PROJECT. WHEN THE PROJECT IS COMPLET ED ON 31.3.2008 AND THE ASSESSEE HAS INFORMED REGARDING S UCH COMPLETION, THE LOCAL AUTHORITIES MAY TAKE ITS OWN TIME FOR ISSUE OF CERTIFICATE, WHICH MAY BE EVEN AFTER 6-7 M ONTHS, BUT THE LETTER SO ISSUED BY THE LOCAL AUTHORITIES SHOULD CL EARLY MENTION THE DATE OF COMPLETION OF SUCH PROJECT. MERELY BEC AUSE SUCH CERTIFICATE IS ISSUED AFTER GAP OF 8-9 MONTHS OR EV EN ONE YEAR, WILL NOT ADVERSELY AFFECT THE ASSESSEE IF IT HAS ME NTIONED CLEARLY THE DATE OF COMPLETION OF PROJECT PRIOR TO 31.3.200 8. ONCE THE LETTER FOR COMPLETION OF PROJECT IS GIVEN BY THE AS SESSEE TO THE LOCAL AUTHORITY, IT IS THE DUTY OF THE LOCAL AUTHOR ITY TO VERIFY PHYSICALLY THE PROJECTS STATED TO BE COMPLETED FROM ITS OWN PARAMETERS. THIS PROCESS MAY TAKE TIME AND, THERE FORE, THE DATE OF ISSUE OF LETTER IS NOT SO CRUCIAL TO DETERM INE THE ASSESSEES ELIGIBILITY FOR CLAIM OF DEDUCTION AS PE R EXPLANATION (II) OF SECTION 80IB(10)(A) OF THE INCOME-TAX ACT, 1961. WHAT IS CRUCIAL IS DATE MENTIONED IN THE LETTER SO ISSUED C ERTIFYING COMPLETION OF THE PROJECT. THUS, THE DATE OF ISSUE OF LETTER IS NOT IMPORTANT, BUT THE DATE MENTIONED IN THE LETTER CER TIFYING COMPLETION OF PROJECT IS IMPORTANT. WE, THEREFORE , DO NOT FIND MAY MERIT IN THE OBSERVATION OF THE LOWER AUTHORITI ES TO THE 14 EFFECT THAT THE DATE OF COMPLETION SHALL BE TAKEN T HE DATE ON WHICH CERTIFICATE IS PHYSICALLY ISSUED BY THE 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 25-3-2008 AND THE ASSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTH ORITIES INTIMATING THE COMPLETION OF THE PROJECT. THE SAID CERTIFICATE/ IN TIMATION WAS ACCEPTED BY THE LOCAL AUTHORITY WITHOUT ANY AMENDMENTS OR OB JECTIONS. LOCAL AUTHORITY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF THE SAME AS PER THE P LANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINI ON, 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. AS SESSEES JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH T HE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHORITY B Y WAY OF FILING THE REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIF ICATE GIVEN BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASS ESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHO RITY HAS NEITHER OBJECTED TO THE SAID APPLICATION OF THE ASSESSEE AN D THE ARCHITECT BY RAISING ANY OBJECTIONS NOR ACCEPTED BY ISSUE OF SAI D COMPLETION CERTIFICATE TILL 10.10.2008. THEREFORE, THE DELAY I N GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTRIBUTABLE TO THE AS SESSEE. THEREFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFAULTER ON THIS ACCO UNT 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 . 20.4. IN VIEW OF THE ABOVE DECISIONS WE ARE OF THE C ONSIDERED OPINION THAT SINCE THE ASSESSEE HAS DONE WHATEVER POSSIBLE ON HIS PART, I.E. DULY APPLIED TO PMC FOR ISSUE OF COMPLETIO N CERTIFICATE, HANDED OVER POSSESSION OF THE FLATS/ROW HOUSES TO THE RESPE CTIVE BUYERS, PMC HAS STARTED LEVYING MUNICIPAL TAXES AND EL ECTRICITY BILLS PAID BY RESPECTIVE OWNERS, THEREFORE, DEDUCTION U/S.80 IB(10) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE CANNOT BE DENIED TO THE ASSESSEE FOR NON-RECEIPT OF COMPLETION CERTIFICATE FROM PMC BEFORE 31-03-2008 WHICH WAS BEYOND THE CONTROL OF TH E ASSESSEE. THIS VIEW OF OURS IS FORTIFIED BY OUR DECISION IN THE CASE OF M/S. RAMSUKH PROPERTIES VS. DCIT VIDE ITA NO.84/PN/2011 ORD ER DATED 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 BUSI NESS OF BUILDER AND PROMOTER. THE ISSUE BEFORE US IS REGARDING ALLOWAB ILITY OF DEDUCTION U/S.80IB(10) OF THE ACT ON PARTIALLY COMPLETE PROJE CT. THE ASSESSING OFFICER HAS DENIED THE DEDUCTION ON THE GROUND THAT PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED TIME. THERE IS NO D ISPUTE WITH REGARD TO OTHER CONDITIONS LAID U/S.80IB(10) OF THE ACT, I.E. , COMMENCEMENT OF PROJECT, AREA OF LAND OF PROJECT, ETC. ASSESSEES HOUSING PROJECT WAS APPROVED VIDE COMMENCEMENT CERTIFICATE NO.3837/04 D ATED 13.01.2005 OUT OF WHICH COMPLETION CERTIFICATE WAS OBTAINED AN D FURNISHED BEFORE THE ASSESSING OFFICER FOR 173 OUT OF 205 FLATS. SA ME WAS REJECTED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE REQUEST FOR GRANTING WHOLE DEDUCTION IN RESPECT OF WHOLE PROJEC T HAS RIGHTLY BEEN REJECTED BECAUSE DEDUCTION U/S.80IB(10) COULD NOT B E GRANTED TO ASSESSEE ON INCOMPLETE CONSTRUCTION AT RELEVANT POI NT OF TIME. 15 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 HEAVILY RELIED ON DECISIO N OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRIGADE ENTERPRIS ES 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 P RESCRIBED LIMIT AS LAID DOWN U/S.80IB(10) OF THE ACT. ABOVE MENTIONED DECI SIONS ARE APPLICABLE IN THEIR OWN SPHERE, I.E. ON POINT OF EX CESS AREA OF SOME OF THE FLATS WHICH HOLD GOOD IN ITS OWN SPHERE. HOWEV ER, IN CASE BEFORE US, DEDUCTION U/S.80IB(10) OF THE ACT HAS BEEN REJE CTED ON THE GROUND THAT CONDITION OF COMPLETION 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 A LLOWABILITY 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 BECA USE OF A STAY BEING GRANTED BY MRTP COURT. THUS FAULT OF INCOMPLETION O F CONSTRUCTION WAS NOT ATTRIBUTABLE TO ASSESSEE. IN CASE SUCH A CONT INGENCY EMERGES WHICH MAKES THE COMPLIANCE WITH PROVISION IMPOSSIBL E, THEN BENEFIT BESTOWED ON AN ASSESSEE CANNOT BE COMPLETELY DENIED . SUCH LIBERAL INTERPRETATION SHOULD BE USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLETING PROJECT IN TIME FOR THE REASONS BEYOND HIS CONTROL. IN CASE BEFORE US, AS STATED ON BEHALF OF ASSESSEE, THAT ASSESSEE SUBMITTED CERTAIN MODIFICATIONS/RECTIFICATIONS FOR TOP FLOORS OF BUILDING. THE SAID MODIFICATION/RECTIFICATION COULD NOT BE CO MPLETED AS LOCAL AUTHORITY COULD NOT APPROVE THE MODIFICATION AS THE IR 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 DIS PUTED ON BEHALF OF REVENUE. THUS, ASSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELLED THE IMPOSSIBILITY ON PART OF THE AS SESSEE TO HAVE COMPLETION CERTIFICATE IN TIME. IT IS SETTLED LEGA L POSITION THAT THE LAW ALWAYS GIVE REMEDY AND THE LAW DOES WRONG TO NO ONE . WE AGREE TO 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 ALO NGWITH THE WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE G IVEN IN NORMAL CIRCUMSTANCES. HOWEVER, IN CASE BEFORE US, ASSESSE E WAS PREVENTED BY REASONABLE CAUSE TO COMPLETE CONSTRUCTION IN TIME D UE TO INTERVENTION OF CID ACTION ON ACCOUNT OF VIOLATION OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. ASSESSE E WAS INCAPACITATED TO COMPLETE THE SAME IN TIME DUE TO REASONS BEYOND HIS CONTROL. ASSESSEE SHOULD NOT SUFFER FOR SAME. THE REVISION O F PLAN IS VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STRICT PR OVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTIO N OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIB ERALLY. AT THE SAME TIME, RESTRICTION THEREON TOO HAS TO BE CONSTR UED STRICTLY SO AS TO ADVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRAT E THE SAME. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HA RMONIOUSLY WITH THE OBJECT OF STATUE TO EFFECTUATE THE LEGISLATIVE INTE NTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE HOLD THAT ASSESSEE IS E NTITLED FOR BENEFIT U/S.80IB(10) OF THE ACT IN RESPECT OF 173 FLATS COM PLETED BEFORE PRESCRIBED LIMIT. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 7. AS A RESULT, THE APPEAL OF THE ASSESSEE IS DISPO SED OFF AS INDICATED ABOVE. 16 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 COMPLETION CERTIFICATE IS SET-ASIDE AND THE GROUNDS RAISED BY THE A SSESSEE ON THIS ISSUE ARE ALLOWED. 8.4 SINCE THE LD.CIT(A) WHILE DECIDING THE ISSUE HA S RELIED ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN T HE CASE OF RUNWAL MULTIHOUSING PVT. LTD., (SUPRA), THEREFORE, IN THE ABSENCE OF ANY DISTINGUISHABLE FEATURES BROUGHT TO OUR NOTICE BY THE LD. DEPARTMENTAL REPRESENTATIVE, WE FIND NO INFIRMITY I N THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS UPHELD AND TH E GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22-01-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED: 22 ND JANUARY, 2015 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE