ITO, Ward-2, New Panvel V. M/s. Mateshwari Developers, Raigad

ITA 2015/PUN/2012

• Counselvise Citation: 201524514 RSA 2012
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 18-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH DAMOR S HRI HARI KISHAN
• Keywords: Retrospective amendment; Additional evidence; Competent authority
• Section: 133A; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO S . 2014 & 2015 /PN/2012 ASSESSMENT YEAR S : 200 7 - 0 8 & 2008 - 09 THE INCOME TAX OFFICER , WARD 2 , P ANVEL . / APPELLANT VS. M/S. MATESHWARI DEVELOPERS, 3, SHINGARPURE APARTMENT, SHIVAJI ROAD, PANVEL, DIST : RAIGAD . / RESPONDENT PAN: AALFM7324C / APPELLANT BY : SHRI RAJESH DAMOR / APPELLANT BY : SHRI RAJESH DAMOR / RESPOND ENT BY : S HRI HARI KISHAN / DATE OF HEARING : 06 .0 7 .2015 / DATE OF PRONOUNCEMENT: 08 .07.2015 / ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEAL S FILED BY THE REVENUE ARE AGAINST THE CONSOLIDATED ORDER OF CIT (A) - I, THANE DATED 1 9 .0 7 .201 2 RELATING TO ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION 143 (3) OF THE INCOME - TAX ACT, 1961. 2. BOTH THE APPEALS FILED BY REVENUE RELATING TO THE SAME ASSESSEE ON SIMILAR ISSUES WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS ITA NO S . 2014 & 2015 /PN/201 2 M/S. MATESHWARI DEVELOPERS 2 CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, REFERENCE IS BEING MADE TO THE F ACTS AND ISSUES IN ITA NO. 2014 /PN/2012 TO ADJUDICATE THE ISSUE S. 3. THE REVENUE IN ITA NO. 2014 /PN/201 2 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) - I, THANE WAS JUSTIFIED IN HO LDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE I.T. ACT EVEN THOUGH THE ASSESSEE HAS NOT SATISFIED THE CONDITION OF ELIGIBILITY. 2 . THE APPELLANT PRAYS THE ORDER OF THE LD. CIT(A) - I, THANE, MAY BE VACATED AND THAT OF THE ASSESSING OFFI CER BE RESTORED. 3 . THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUND /GROUNDS, WHICH MAY BE NECESSARY . 4. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE ALLOWABILITY OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 5. BR IEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF APEKSHA COMPLEX . THE ASSESSEE HAD UNDERTAKEN TWO HOUSING PROJECTS I.E. MATESHWARI COMPLEX AND APEKSHA COMPLEX . THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS ALLOWED BY THE ASSESSING OFFICER IN RESPECT OF MATESHWARI COMPLEX. HOWEVER, ON THE BASIS OF INFORMATION GATHERED DURING THE COURSE OF SURVEY CONDUCTED AT THE PREMISES OF THE ASSESSEE UNDER SECTION 13 3A OF THE ACT ON 30.08.2007 AND 31.08.2007, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD CONSTRUCTED COMMERCIAL AREA EXCEEDING 2000 SQ. FT. IN APEKSHA COMPLEX . FURTHER, IT WAS NOTED BY THE ASSESSING OFFICER THAT THE CERTIFICATE OF APPROVAL OF THE P ROJECT WAS NOT PRODUCED BY THE ASSESSEE. THE ASSESSING OFFICER FURTHER REFERRED TO THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT MADE IN ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 IN RESPECT OF APEKSHA COMPLEX ON SIMILAR GROUNDS AND SHOW CAU SED THE ASSESSEE TO EXPLAIN THE SAME. IN REPLY, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE GRAMPANCHAYAT IN ITS COMPLETION CERTIFICATE HAD CLEARLY MENTIONED ABOUT THE APPROVAL OF THE PROJECT. IT WAS FURTHER PLEADED BY THE ITA NO S . 2014 & 2015 /PN/201 2 M/S. MATESHWARI DEVELOPERS 3 ASSESSEE THAT THE APPROVAL LETTER WAS DESTROYED IN THE FLOODS OCCURRED IN JULY, 2005 . FURTHER, IN RESPECT OF COMMERCIAL A REA , THE ASSESSEE POINTED OUT THAT SINCE APEKSHA HOUSING COMPLEX WAS APPROVED BY THE GRAMPANCHAYAT IN THE YEAR 2003 , THE AMENDMENT S TO SECTION 80IB(10) OF THE ACT IN RESPECT OF COMMERCIAL AREA INTRODUCED W.E.F. 01.04.2005 WERE NOT APPLICABLE . THE ASSESSING OFFICER CONSEQUENT TO THE ABOVE SAID DEFAULTS, DENIED THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT . 6. THE CIT(A) IN TURN, FOLLOWING THE EARLIER ORDER OF CIT(A) RELATING TO ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 , ALLOWED THE CLAIM OF THE ASSESSEE. 7. ON PERUSAL OF THE RECORD, WE FIND THAT SIMILAR ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF APEK SHA COMPLEX AROSE BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.214/PN/2009 , CO NO.40/PN/2011 AND ITA NO.142/PN/2010 , RELATING TO ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 , ORDER DATED 30.01.2015. THE TRIBUNAL VIDE CONSOLIDATED ORDER DATED 30.01.2015 C ONSIDERED BOTH THE ASPECTS OF THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT I.E. THE APPROVAL CERTIFICATE NOT BEING PRODUCED BY THE ASSESSEE AND ALSO THE FACTUM OF COMMERCIAL AREA IN THE SAID HOUSING PROJECT. THE TRIBUNAL AFTER CONSIDERING THE FACTS OF THE CASE , HELD AS UNDER: - 22. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD CARRIED ON THE CONSTRUCTION ACTIVITY AND HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN R ESPECT OF PROJECT APEKSHA COMPLEX, WHICH WAS A RESIDENTIAL CUM COMMERCIAL PROJECT. SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED UPON THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON 30.08.2007 AND STATEMENT OF ONE OF THE PARTNERS OF THE A SSESSEE FIRM WAS RECORDED. THE ASSESSING OFFICER AFTER ANALYZING THE ISSUE, HAD DENIED THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, WHICH WAS CONFIRMED BY THE CIT(A) RELATING TO ASSESSMENT YEAR 2005 - 06, AGAINST WHICH THE ASSESSEE IS IN APPEAL. SIMILA R CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN ASSESSMENT YEAR 2006 - 07 WAS DENIED BY THE ASSESSING OFFICER. HOWEVER, THE SAME WAS ALLOWED BY THE CIT(A), AGAINST WHICH, THE REVENUE IS IN APPEAL. 23 . 24. THE SECOND ISSUE RAISED IN THE PRESEN T APPEAL IS NON - FURNISHING OF THE COMMENCEMENT CERTIFICATE FROM THE LOCAL AUTHORITY. THE PROJECT OF THE ASSESSEE IS SITUATED IN VILLAGE AKURLI, TAL. PANVEL AND THE REQUIREMENT OF PROVISIONS OF THE ACT ARE THAT THE COMMENCEMENT CERTIFICATE SHOULD BE ISSUED BY THE LOCAL AUTHORITY. IN THE CASE OF ASSESSEE, ADMITTEDLY, THE LOCAL AUTHORITY WAS THE GRAMPANCHAYAT, THOUGH, A PLEA WAS RAISED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW THAT THE LOCAL AUTHORITY, WHO SANCTIONS THE BUILDING PROJECT WAS ITA NO S . 2014 & 2015 /PN/201 2 M/S. MATESHWARI DEVELOPERS 4 THE COLLECTOR, ALIBAG. THE ASSESSEE HAD FURNISHED THE APPROVAL LETTER OF COLLECTOR, ALIBAG, DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE COMMENCEMENT CERTIFICATE ISSUED BY THE GRAMPANCHAYAT WAS NOT FURNISHED BY THE ASSESSEE AS THE SAME REPORTEDLY, WAS WAS HED AWAY IN FLOODS BOTH FROM THE OFFICE OF THE ASSESSEE AND FROM THE OFFICE OF THE COLLECTOR. HOWEVER, THE ASSESSEE HAD FURNISHED THE COMPLETION CERTIFICATE ISSUED BY GRAMPANCHAYAT, WHICH IS PLACED AT PAGE 63 OF THE PAPER BOOK ALONG WITH ITS ENGLISH TRANS LATION AT PAGE 64. THE LETTER DATED 22.05.2009 READS AS UNDER: - TO, RESPECTED SARPANCH SAHEB, GRAMPANCHAYAT AAKURLI, TAL. PANVEL, DIST. RAIGAD. RESPECTED SIR, AT VILLAGE AAKURLI, AT GAT NO. 98, HISSA NO. 1 & 2, THE APPLICATION FOR APPROVAL FOR THE CONSTRUCTION OF BUILDING IS SUBMITTED TO THE OFFICE OF COLLECTOR, RAIGAD ALIBAG. THE SAID PLAN IS APPROVED BY THE COLLECTOR, RAIGAD ALIBAG AS ON DATED 02/05/2003 AND HAS GIVEN THE PERMISSION TO CONSTRUCT THE BUILDING. THE SAID PLAN IS ALSO APPROVED BY GR AMPANCHAYAT, AKURLI & HAS GIVEN THE PERMISSION TO CONSTRUCT THE BUILDING AT THE SAID PREMISES. BUT ALL THE RELATED RECORDS WERE WASHED OUT IN FLOOD OCCURRED AS ON DATED 26/07/2005. AS THE APPROVAL FROM THE GRAMPANCHAYAT, AKURLI HAD BEEN TAKEN FOR THE CONS TRUCTION OF BUILDING, THE GRAMPANCHAYAT, AKURLI HAD ALSO ISSUED THE COMPLETION CERTIFICATE AS ON DATED 21/07/2006. AS PER THE COMPLETION CERTIFICATE THE GRAMPANCHAYAT HAS LEVIED THE PROPERTY TAX (GHAR PATTI) TO ALL FLAT OWNERS AS PER THE MEASURE AREA OF TH E FLATS & ALSO COLLECTS THE SAID TAX FROM THE FLAT OWNERS. SO WE REQUEST YOU TO ISSUE THE LETTER THAT WE (M/S MATESHWARI DEVELOPERS) HAD TAKEN THE APPROVAL OF BUILDING PLAN FROM THE GRAMPANCHAYAT, AKURLI. RECD. BY, YOURS TRULY, YOURS TRULY, SIGNATURE OF SURPANCH GRAM PANCHAYAT AAKURLI M/S.MATESHWARI DEVELOPERS TAL PANVEL PARTNERS SIGNATURE 25. THE PERUSAL OF THE SAID COMMUNICATION CLEARLY REFLECTS THAT THE ASSESSEE HAD FURNISHED THE APPLICATION FOR APPROVAL OF THE CONSTRUCTION OF BUILDING TO THE OFFICE OF THE COLLECTOR, RAIGAD, ALIBAG, WHICH WAS APPROVED ON 02.05.2003. THE LETTER FURTHER MENTIONS THAT THE SAID PLAN WAS ALSO APPROVED BY THE GRAMPANCHAYAT, AKURLI, WHO HAD GIVEN THE PERMISSION TO CONSTRUCT THE BUILDING AT THE SAID PREMISES. THE SAID LETTER FURT HER MENTIONS THAT THE RELATED RECORDS WERE WASHED AWAY IN FLOODS OCCURRED ON 26.07.2005. IT FURTHER STATED THAT THE GRAMPANCHAYAT HAD ISSUED THE COMPLETION CERTIFICATE DATED 21.07.2006 AND HAD ALSO LEVIED THE PROPERTY TAX TO ALL THE FLAT OWNERS. THE LETT ER DATED 22.05.2009 WAS ISSUED BY THE GRAMPANCHAYAT IN REPLY TO THE LETTER DATED 18.05.2009 ISSUED BY THE ASSESSEE TO THE GRAMPANCHAYAT, THE COPIES OF WHICH ARE PLACED AT PAGES 61 AND 62 OF THE PAPER BOOK. THE COMPLETION CERTIFICATE IS PLACED AT PAGES 66 AND 67 OF THE PAPER BOOK WHICH DATED 21.07.2006 IN WHICH IT IS CERTIFIED THAT THE ASSESSEE HAD TAKEN CONSTRUCTION PERMISSION FROM THE COLLECTOR, RAIGAD, ALIBAG AND THE CONSTRUCTION OF BUILDING HAS BEEN COMPLETED. 26. THE ASSESSEE DURING THE COURSE OF HEAR ING HAS FURNISHED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE BEING THE COPY OF GRAMPANCHAYAT PERMISSION ISSUED VIDE LETTER DATED 05.02.2003. THE CLAIM OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND EVEN BEFORE US WAS THAT HE HAD LOST THE SAID C ERTIFICATE IN FLOODS AND EVEN THE GRAMPANCHAYAT HAD LOST THE CERTIFICATE IN THE FLOODS. HOWEVER, COPY OF THE GRAMPANCHAYAT CERTIFICATE WAS OBTAINED FROM THE OWNER OF THE PLOT OF LAND AND THE SAID PHOTO COPY OF CERTIFICATE IS PLACED AT PAGE 4 OF THE PAPER BOOK ALONG WITH ITS ENGLISH TRANSLATION AT PAGE 5 OF THE PAPER BOOK. VIDE MEETING HELD ON 05.02.2003, THE GRAMPANCHAYAT AT AKURLI HAD GIVEN PERMISSION TO THE ASSESSEE FOR THE CONSTRUCTION OF COMPLEX, RESIDENTIAL AND COMMERCIAL PURPOSES. IN VIEW OF THE SA ID CERTIFICATE BEING A STATE RECORD, THE ITA NO S . 2014 & 2015 /PN/201 2 M/S. MATESHWARI DEVELOPERS 5 SAME IS ADMITTED AS ADDITIONAL EVIDENCE, WHERE THE GRAMPANCHAYAT HAD GIVEN THE PERMISSION FOR CONSTRUCTION OF THE BUILDING AT THE SITE ON 05.02.2003 AND THE COPY OF THE CERTIFICATE BEING FILED BY THE ASSESSEE AS AN ADDITIONAL EVIDENCE, WE FIND NO MERIT IN THE ORDERS OF AUTHORITIES BELOW IN DENYING THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT FOR THE REASON THAT THE ASSESSEE HAD FAILED TO FURNISH THE COMMENCEMENT CERTIFICATE OF THE CONSTRUCTION OF THE PROJ ECT. IN ANY CASE, THE ASSESSEE HAD FURNISHED THE COMPLETION CERTIFICATE AND HAD ALSO FURNISHED A COMMUNICATION, UNDER WHICH IT WAS STATED BY THE SARPANCH, GRAMPANCHAYAT, AKURLI THAT THE BUILDING PLANS WERE APPROVED BY THE GRAMPANCHAYAT, AKURLI, WHO IN TUR N HAD GIVEN THE PERMISSION FOR CONSTRUCTION OF THE BUILDING AT THE SAID SITE. FURTHER, THE PLANS WERE ALSO APPROVED BY THE COLLECTOR, RAIGAD, ALIBAG ON 02.05.2003 AND THE COMPLETION CERTIFICATE WAS ISSUED ON 21.07.2006. IN THE ENTIRETY OF THE ABOVE SAID DOCUMENTS AND EVIDENCES FURNISHED BY THE ASSESSEE, THE FINDINGS OF CIT(A) ARE REVERSED. THE ASSESSEE HAVING OBTAINED THE COMMENCEMENT CERTIFICATE FROM THE COMPETENT AUTHORITY I.E. THE GRAMPANCHAYAT AND IN ADDITION HAVING RECEIVED THE COMMENCEMENT CERTIFIC ATE FROM THE COLLECTOR, RAIGAD, ALIBAG, WE FIND NO MERIT IN THE ORDERS OF THE AUTHORITIES BELOW IN DENYING THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON THIS ACCOUNT. 27 . 28. ANOTHER ISSUE ON WHICH THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS REFUSED TO THE ASSESSEE WAS THAT THE PROJECT OF THE ASSESSEE COMPRISED OF COMMERCIAL AREA OF ABOUT 4000 SQ. FT. THE CASE OF THE ASSESSEE BEFORE US WAS THAT THE COMMENCEMENT CERTIFICATE FOR CONSTRUCTION OF THE SAID PROJECT WAS ISSUED ON 02.05.2 003 AND THE CONDITION OF THE REQUISITE OF COMMERCIAL USAGE DOES NOT APPLY TO THE EARLIER PROJECTS, WHICH WERE SANCTIONED BY THE AUTHORITIES. THE PRESENT PROVISIONS OF SECTION 80IB(10) OF THE ACT WERE SUBSTITUTED BY THE FINANCE (NO.2) ACT OF 2004 W.E.F. 01 .04.2005, UNDER WHICH AS PER CLAUSE (D) TO SECTION 80IB(10) OF THE ACT, LIMIT OF COMMERCIAL USAGE IN A HOUSING PROJECT IS PROVIDED. HOWEVER, THE PRE - AMENDED PROVISIONS OF SECTION 80IB(10) OF THE ACT WHICH WERE AMENDED BY THE FINANCE ACT, 2000 W.E.F. 01.04 .2001 AND FINANCE WHICH WERE AMENDED BY THE FINANCE ACT, 2000 W.E.F. 01.04 .2001 AND FINANCE ACT, 2003 WITH RETROSPECTIVE EFFECT FROM 01.04.2002 READ AS UNDER: - (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH, 2005 BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, - ( A ) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBE R, 1998; ( B ) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE; AND ( C ) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT - UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR W ITHIN TWENTY - FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. 29. UNDER THE SAID PROVISIONS, ADMITTEDLY, THERE WAS NO CLAUSE RELATING TO THE BUILT UP AREA OF SHOPS AND COMMERCIAL ESTABLISHMENTS. THE PROJECT OF THE ASSESSEE BEFORE US WAS APPROVED ON 05.02.2003 AND ADMITTEDLY, THE PRE - AMENDED PROVISIONS OF THE ACT WERE APPLICABLE. 30. THE PUNE BENCH OF THE TRIBUNAL IN OPEL SHELTERS PVT. LTD. VS. ACIT IN ITA NO.219/PN/2009 & ANOTHER , RELATING TO ASSESSMENT YEAR 2005 - 06, VIDE ORDER DATED 31.05.2011, WHILE DECIDING THE ISSUE OF APPLICATION OF AMENDED PROVISIONS OF SECTION 80IB(10) OF THE ACT W.E.F. 01.04.2005 TO THE PROJECTS ALREADY APPROVED AND STARTED IN EARLIER YEARS, HAD CONSIDERED THE VARIOUS DECISIONS ON THE ISSUE INCLUDING THE RATIO LAID DOWN BY THE MUMBAI BENCH OF THE TRIBUNAL IN HIRANANDANI ITA NO S . 2014 & 2015 /PN/201 2 M/S. MATESHWARI DEVELOPERS 6 AKRUTI VS. DCIT, ITA NO.5416/MUM/2009, RELATING TO ASSESSMENT YEAR 2006 - 07, VIDE ORDER DATED 30.03.2010, AND HELD AS UNDER: - 19. WE, THUS , FIND THAT THE ISSUES RAISED IN THE PRESENT APPEALS ARE FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AKRUTI J.V V/S. DCIT (SUPRA). RESPECTFULLY FOLLOWIG THE SAID DECISION IN THE CASE OF HIRANANDANI AKRUTI J.V. (SUPRA), WE DECIDE THE ISSUES 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) (N OW UPHELD BY THE HONBLE BOMBAY HIGH COURT) AS APPLICABLE UPTO A.Y. 2004 - 05. AND SECONDLY, THE LAW AS IT EXISTED IN THE ASSESSMENT YEAR WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL OF THE PROJECT AND PERMISSION FOR THE SAME WAS ACCORDED TO AND WHEN THE ASSESSE E COMMENCED THE PROJECT IS TO BE APPLIED. IN THE PRESENT CASE, UNDISPUTEDLY THE ASSESSEES HAD STARTED THE PROJECT IN THE YEAR 2001 WHEN SUB - CLAUSE (D) TO SECTION 80IB(10) WAS NOT IN EXISTENCE, HENCE IT CANNOT BE APPLIED ON SUCH PROJECTS AS HELD BY THE MUMB AI BENCH OF THE TRIBUNAL 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 RAISED BEFORE IN THE CASE OF HIRANANDANI AKRUTI J.V. THAT IF THE ASSESSEE HAD FOLLOWED WIP (WORK - IN - PROGRESS) METHOD, THE INCOME FROM THE PROJECT WOULD HAVE BEEN TAXABLE IN THE EARLIER YEARS AS THE PROJECT WAS COMPLETED EARLIER TO THE AMENDMENT AND IN THAT CASE, AS PER THE OLD PROVISION THE ASSESSEE WOULD HAVE BEEN ELIGIBLE FOR THE DEDUCTION. BUT, JUST B ECAUSE THE ASSESSEE HAS FOLLOWED THE PROJECT COMPLETION 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 UPTO 31.3. 05 SINCE IN THOSE PROJECTS ASSESSEES ARE REQUIRED TO CONSTRUCT 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) ON OR BEFORE 31.3.2008. IN THE CASES BEFORE US THE PROJECTS 1.4. 2004) ON OR BEFORE 31.3.2008. IN THE CASES BEFORE US THE PROJECTS HAVE BEEN COMPLETED WELL BEFORE THIS DATE. PUTTING OF SUCH CONDITION OF TIME LIMIT IS WELL UNDERSTOOD. SINCE THE LEGISLATURE INTENDED THE COMPLETION OF PROJECTS WITHIN A TIME FRAME TO AVOID INCONVENIENCE TO THE BENEFICIARIES I.E. THE BUYERS. IN THIS REGARD THE LEGISLATURE HAS CATEGORISED THE TIME LIMIT FOR THE PROJECTS APPROVED ON DIFFERENT PERIOD BEFORE 31.3.2007 BUT REQUIREMENT REMAINED THE SAME THAT PROJECTS WOULD BE APPROVED BY THE LOCAL AUTHORITY. COMPLIANCE OF THE REQUIREMENT 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 A PPLYING THE PRINCIPLE OF HARMONIOUS CONSTRUCTION TO INTERPRET THE PROVISIONS UNDER SUB - SECTION (10) TO SECTION 80IB AS AMENDED W.E.F. 1.4.2005 WE COME TO THE CONCLUSION THAT THE LEGISLATURE ALWAYS INTENDED THAT THE PROJECT MUST BE APPROVED BY THE LOCAL AUT HORITY, THUS IN THOSE APPROVED PROJECTS WHERE CONSTRUCTION HAS BEEN STARTED MUCH EARLIER THAN 1.4.2005, THE ASSESSEES ARE REQUIRED TO COMPLETE THE PLAN AS IT HAS BEEN APPROVED. AS PUTTING SUCH ASSESSEES TO COMPLETE THE PLAN MEETING OUT CONDITION UNDER CLAU SE (D) OF THE SUBSECTION WOULD LEAD INTO ABSURDITY AND IMPOSSIBILITY FOR THE ASSESSEE AND IN CONTRADICTION TO THE PROVISIONS U/S. 80 IB(10) AS PREVAILED AT THE TIME OF APPROVAL AND COMMENCEMENT OF THE CONSTRUCTION OF THE PROJECT WELL BEFORE 1.4.2005. BOMBA Y 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 ASSESSEE SUBMITTED I TS PROPOSAL AND PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACCORDED AND WHEN THE ASSESSEE COMMENCED DEVELOPMENT IS TO BE APPLIED. IN THE PRESENT CASES, AS PER PAGE NOS.17 AND 20 OF THE PAPER BOOK IN THE CASE OF OPEL SHELTER THE PROJECT WAS COMMENCED O N 23.2.2001 AND EVEN COMPLETED ON 14.5.2004, SIMILARLY AS PER THE CONTENTS OF PAGE NO.2 OF THE ASSESSMENT ORDER AND PAGE NO. 41 ITA NO S . 2014 & 2015 /PN/201 2 M/S. MATESHWARI DEVELOPERS 7 OF THE PAPER BOOK IN THE CASE OF D.S. KULKARNI AND ASSOCIATES, THE PROJECT WAS COMMENCED ON 12.4.2001 AND COMPLETED IN THE MONTH OF NOVEMBER 2003. THUS, THE ASSESSEES WERE SUPPOSED TO COMPLETE THE PROJECTS AS PER THE LAW AS EXISTED IN THE A.Y. 2001 - 02 IN THE CASE OF OPEL SHELTERS AND IN THE A.Y. 2002 - 03 IN THE CASE OF D.S. KULKARNI AND ASSOCIATES. WE THUS FOLLOWING THE DECISION IN THE CASE OF HIRANANDANI AKRUTI JV V/S. DCIT (SUPRA) HOLD THAT AMENDED PROVISIONS UNDER SECTION 80 IB(10) W.E.F. 1.4.2005 ARE NOT APPLICABLE IN THE PRESENT CASE, HENCE ASSESSEES ARE ELIGIBLE FOR 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. 31. THE HONBLE HIGH COURT OF GUJARAT IN MANAN CORPORATION VS. ACIT, IN TAX APPEAL NO.1053 OF 2011, VIDE ORDER DATED 30.09.2012 HAD HELD THAT THE AMENDMENT BROUGHT IN TO SECTION 80IB(10) OF THE ACT BY THE FINANCE ACT, 2004 W.E.F. 01.04.2005 WAS A SUBSTANTIVE AMENDMENT AND NOT A CLARIFICATORY AMENDMENT AND THE AMENDMENT OF THIS NATURE COULD NOT HAVE RETROSPECTIVE EFFECT. 32. IN VIEW OF THE ABOVE SAID PROPOSITION LAID DOWN, WE HOLD THAT THE PRE - AMENDED PROVISIONS OF SECTION 80IB(10) OF THE ACT ARE TO BE APPLIED TO THE PROJECT UNDERTAKEN BY THE ASSESSEE, WHERE THE APPROVAL FOR THE COMMENCEMENT OF CONSTRUCTION WAS GIVEN BEFORE 01.04.2005. AS PER THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESS EE WHICH HAS BEEN ADMITTED BY US, THE COMMENCEMENT CERTIFICATE WAS ISSUED BY THE GRAMPANCHAYAT ON 05.02.2003 I.E. APPROVED BEFORE 01.04.2004 AND CONSTRUCTION HAD TO BE COMPLETED ON OR BEFORE 31.03.2008. THE ASSESSEE HAS FILED THE COMPLETION CERTIFICATE DA TED 21.07.2006 AT PAGES 66 AND 67 OF THE PAPER BOOK UNDER WHICH, IT HAS BEEN CERTIFIED THAT THE SAID PROJECT HAS BEEN COMPLETED AS ON THE DATE OF CERTIFICATE I.E. WITHIN STIPULATED DATE PROVIDED UNDER THE ACT. THE PROJECT HAVING BEEN APPROVED BY THE COMPE TENT AUTHORITY AND HAVING BEEN COMPLETED BY THE ASSESSEE IN LINE WITH THE APPROVAL GIVEN BY THE COMPETENT AUTHORITY, MERELY BECAUSE THE COMMERCIAL AREA OF THE SAID PROJECT WAS ABOUT 4000 SQ. FT., DOES NOT DIS - ENTITLES THE ASSESSEE FROM THE CLAIM OF DEDUCTI ON ABOUT 4000 SQ. FT., DOES NOT DIS - ENTITLES THE ASSESSEE FROM THE CLAIM OF DEDUCTI ON UNDER SECTION 80IB(10) OF THE ACT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE SAID DEDUCTION TO THE ASSESSEE. 33. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAD RELIED ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN ITO VS. EVEREST HOME CONSTRUCTION (INDIA) (P) LTD. (2012) 26 TAXMANN.COM 246 (MUM.) FOR THE PROPOSITION THAT THE LIMIT ON THE COMMERCIAL BUILT UP AREA PRESCRIBED IN SECTION 80IB(10) OF THE ACT W.E.F. 01.04.2005 WOULD ALSO BE APPLICABLE TO THE INSTANT PROJE CT EVEN IF SUCH PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY PRIOR TO 01.04.2005. THE SAID DECISION RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IS NO LONGER GOOD LAW HAVING REGARD TO THE JUDGMENT OF HONBLE JURISDICTIONAL HI GH COURT IN CIT VS. M/S. HAPPY HOME ENTERPRISES IN INCOME TAX APPEAL NO.201 OF 2012, DATED 19.09.2014. AS PER THE HONBLE HIGH COURT, CLAUSE (D) OF SECTION 80IB(10) OF THE ACT AS AMENDED BY THE FINANCE (NO.2) ACT, 2004 W.E.F. 01.04.2005 SHALL NOT BE APPLI CABLE TO THE HOUSING PROJECTS APPROVED BEFORE 31.03.2005. THEREFORE, THE STAND OF THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE BASED ON THE ORDER OF THE MUMBAI BENCH OF THE TRIBUNAL IN ITO VS. EVEREST HOME CONSTRUCTION (INDIA) (P) LTD. (SUPRA) IS NOT JUSTIFIED. 8. THE ISSUE RAISED IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL IN EARLIER YEARS AND FOLLOWING THE SAME PARITY OF REASONING, WE UPHOLD THE ORDER OF CIT(A) IN ALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10 ) OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS, DISMISSED. ITA NO S . 2014 & 2015 /PN/201 2 M/S. MATESHWARI DEVELOPERS 8 9. THE FACTS AND ISSUE IN ITA NO. 2014 /PN/2012 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO.2 015 /PN/2012 AND OUR DECISION IN ITA NO. 2014 /PN/2012 SHALL APPLY MUTATIS MUTANDIS TO ITA NO.2 01 5/PN/2012. 1 0 . IN THE RESULT, BOTH THE APPEAL S OF THE REVENUE ARE DISMISSED. ORDER P RONOUNCED ON THIS 8 TH DAY OF JULY , 201 5 . SD/ - SD/ - ( R.K. PANDA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 8 TH JU LY , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1 . / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - I , THANE ; 3. ( ) / THE CIT(A) - I , THANE ; 4. / THE CIT I I , THANE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE