Deputy Commissioner of Income-tax, V. M/s. Varun Developers, Pune

ITA 2030/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85131 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 22-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Retrospective amendment
• Section: 143(3); 234B; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 2030/PN/2013 (ASSESSMENT YEAR: 2010-11) THE DY. COMMISSIONER OF INCOME TAX, CIRCLE - 4, PUNE. . APPELLANT VS. M/S. VARUN DEVELOPERS, SUPREME ICON, OFF 304, 305, PLOT NO. 5, AUNDH BANER ROAD, NEAR SAKAL NAGAR, BANER, PUNE PAN: AACFV8009J . RESPONDENT APPELLANT BY : SHRI P.S. NAIK RESPONDENT BY : SHRI NIKHIL PATHAK DATE OF HEARING : 30-09-2014 DATE OF PRONOUNCEMENT : 27-10-2014 ORDER PER SUSHMA CHOWLA, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-II, PUNE DATED 26-08-2013 RELATING TO ASSESSMENT YEAR 201 0-11 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRE D IN ALLOWING THE DEDUCTION U/S. 80IB(10) OF THE ACT TO THE HOUSING PROJECT HARSH PARADISE APPROVED ON 28.05.2003 AND WA S STILL INCOMPLETE BY 31.03.2008 IN VIOLATION OF SECTION 80IB(1 0)(A)(I) OF THE ACT WHICH REQUIRES SUCH PROJECT TO BE COMPLETED BEFORE 31.03.2008. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRE D IN ALLOWING THE CLAIM U/S.80IB(10) OF THE ACT ON PARTIAL COM PLETION OF THE HOUSING PROJECT HOLDING THAT SUCH DEDUCTION W AS AVAILABLE ON STANDALONE BASIS WITHOUT APPRECIATING THE FACT THAT THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY ON 28.05.2003 WHEREIN CONSTRUCTION OF H-1, H-2, H-3 & G BUILD ING ITA NO. 2030/PN/2013 AND FIRST FLOOR OF H-4 BUILDING WERE SANCTIONED AND C OMPLETION CERTIFICATE WAS ADMITTEDLY NOT ISSUED BY PUNE MUNICI PAL CORPORATION WITH RESPECT TO BUILDING H-4. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRE D IN HOLDING THAT THE AMENDMENT TO SUB SECTION (F) TO SEC TION 80IB(10) OF THE ACT IS NOT APPLICABLE TO THE ASSESSEE'S CASE WITHOUT APPRECIATING THE FACT THAT THE AMENDMENT WAS MADE EF FECTIVE FROM 01.04.2009 BY THE FINANCE ACT (NO.2) 2009. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRE D IN NOT APPRECIATING THE FACT THAT THE AGREEMENT FOR SALE OF FLAT ALLOTTED TO THE SPOUSE OF THE MR. GURDAS ANDAR WHO WAS ALREADY A LLOTTED FLAT ALONGWITH THIS SON IN THE HOUSING PROJECT, WAS REG ISTERED ON 07.07.2009 I.E. AFTER THE INTRODUCTION OF THE FINANCE A CT (NO.2) 2009 IN THE LEGISLATION ON 06.07.2009. 3. THE ISSUE IN GROUND NOS. 1 AND 2 RAISED BY THE REVEN UE ARE AGAINST THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT. 4. THE LD. AR FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED BY THE REVENUE IN GROUNDS OF APPEAL NO. 1 A ND 2 ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEARS 2008 -09 AND 2009- 10. 5. THE LD. DR ON THE OTHER HAND PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 6. THE BRIEF FACTS RELATING TO THE ISSUE RAISED BEFORE US ARE THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PROMOTERS AND BUILDERS OF BOTH RESIDENTIAL AND COMMERCIAL PROJECTS. FOR THE YEAR U NDER CONSIDERATION, THE ASSESSEE HAD MADE CLAIM FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF THE PROFITS DERIVE D FROM THE PROJECT NAME HARSH PARADISE. THE SAID PROJECT CONSISTE D OF FOUR BUILDINGS I.E. H-1, H-2, H-3, H-4 AND G BUILDING. THE PROJECT W AS APPROVED BY THE LOCAL AUTHORITY I.E. PMC UNDER WHICH THE PROJECT CONSISTING OF H-1, H-2, H-3 AND G BUILDING AND FOUR FLATS OF H -4 ITA NO. 2030/PN/2013 BUILDING WERE SANCTIONED. HOWEVER, THE CONSTRUCTION OF REM AINING FLATS IN H-4 BUILDING WAS TO BE CARRIED OUT BY THE ASSESSE E AFTER THE ACQUISITION OF TRANSFERABLE DEVELOPMENT RIGHTS (TDR). THE S AID PROJECT WAS SANCTIONED BEFORE 01-04-2004 AND AS PER T HE ASSESSING OFFICER, THE DATE OF COMPLETION OF THE PROJECT WAS 31-03-20 08. THE ASSESSEE HAD RECEIVED THE COMPLETION CERTIFICATE OF H-1, H -2, H-3 AND G BUILDING ON 19-03-2008 AND 06-03-2007 RESPECTIVELY. T HE ASSESSEE WAS UNABLE TO PURCHASE ANY TDR FOR H-4 BUILDING AND AS S UCH THE SAID BUILDING COULD NOT BE COMPLETED AND PART COMPLETION CE RTIFICATE WAS NOT ISSUED BY PMC. THE ASSESSING OFFICER ALSO NOTED T HAT THE COMPLETION CERTIFICATE IN CASE OF H-4 BUILDING HAVING FOUR FLAT S HAD NOT BEEN RECEIVED TILL THE COMPLETION OF THE ASSESSMENT SINCE T HE ASSESSEE HAD NOT COMPLETED THE HOUSING PROJECT AS BUILDING H-4 WA S STILL INCOMPLETE. THE ASSESSEE WAS SHOW-CAUSED TO EXPLAIN AS TO WHY THE DEDUCTION UNDER SECTION 80IB(10) SHOULD NOT BE ALLOWED. I N REPLY IT WAS POINTED OUT THAT THE CERTIFICATE OF COMPLETION OF THE CONSTRUCTION OF HOUSING PROJECT COMPRISING OF H-1, H-2, H-3 AND G BUILDING W AS ISSUED BY PMC PRIOR TO 31-03-2008. HOWEVER, THE BUILDING H-4 COULD NOT BE CONSTRUCTED BY THE ASSESSEE. THE ASSESSING OFFIC ER UNDER THE SAID CIRCUMSTANCES SHOW CAUSED THE ASSESSEE THAT SINCE THE WHOLE PROJECT WAS NOT COMPLETED BEFORE THE STIPULATED DATE I.E . 31-03-2008, THE ASSESSEE WAS NOT ENTITLED TO CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 7. IN CONTRAST, THE ASSESSEE CLAIMED THAT SINCE THE PRO JECT COMPRISING OF H-1, H-2, H-3 AND G BUILDING WAS COMPLETED FOR WHICH THE COMPLETION CERTIFICATE WAS ISSUED BY THE PMC ON 19-03 -2008 AND 06-03-2007, THE CONDITIONS PRESCRIBED UNDER SECTION 80IB (10) WERE COMPLIED WITH AND AS SUCH IT WAS ENTITLED TO BE CLAIM OF THE SAID DEDUCTION. THE ASSESSEE ALSO CLARIFIED BEFORE THE ASSESSING OFFICER THA T ITA NO. 2030/PN/2013 NO CLAIM OF DEDUCTION UNDER SECTION 80IB(10) WAS MADE IN R ESPECT OF H-4 BUILDING. THE ASSESSING OFFICER, HOWEVER, DISALLOWED THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AS PMC HAD N OT ISSUED THE FINAL COMPLETION CERTIFICATE TO HARSH PARADISE PROJECT A S THE HOUSING PROJECT WAS NOT COMPLETED DUE TO NON-COMPLETION OF BUILDING H-4 OF THE PROJECT. THE ASSESSEE WAS HELD NOT BE ELIGIBLE FOR CLAIMING THE SAID DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 8. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE AS SIMILAR CLA IM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF THE COMPLETED FLATS IN BUILDING OTHER THAN H-4 BUILDING WAS ALLOWED BY THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT Y EAR 2008-09 IN ITA NO. 1624/PN/2011 VIDE ORDER DATED 22.03.2013. 9. WE FIND THAT SIMILAR ISSUE OF CLAIM OF DEDUCTION UNDER SECTIO N 80IB(10) OF THE ACT IN RESPECT OF BUILDING H-1, H-2, H-3 AND G BUILDING I.E. IN RESPECT OF FLATS COMPLETED IN THE SAID PROJECT AROSE BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT Y EARS 2008-09 AND 2009-10. ADMITTEDLY THE BUILDING H-4 WAS NOT COMPLET ED HOWEVER, THE ASSESSEE HAD RECEIVED THE COMPLETION CERTIFIC ATE IN RESPECT OF THE BALANCE BUILDINGS PRIOR TO THE STIPULATED DA TED I.E. 31- 03-2008. THE TRIBUNAL IN ITA NO. 1624/PN/2011 RELATING TO ASSESSMENT YEAR 2008-09 VIDE ORDER DATED 22-03-2013 AND FURTHER IN ITA NO. 1845/PN/2012 RELATING TO ASSESSMENT YEAR 2009- 10 VIDE ORDER DATED 30-10-2013 ALLOWED THE CLAIM OF THE ASSESSEE IN RES PECT OF THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT OBSERVING AS UNDER: 14. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT IN THE INSTANT CASE ASSESSEE HA S OBTAINED PERMISSION FOR CONSTRUCTION OF FOUR BUILDINGS H-1, H-2 , H-3, H-4 AND G BUILDING. THE SAID G BUILDING WAS TO BE GIVEN T O THE PMC TO BE ALLOTTED TO THE WEAKER SECTION OF THE SOCIETY. T HE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY ON 28.05.200 3 ITA NO. 2030/PN/2013 WHEREIN PLAN FOR CONSTRUCTION OF WHOLE PROJECT INCLUD ING H-1, H-2, H-3 & G BUILDING, AND FIRST FLOOR OF H-4 BUILDING WAS SAN CTIONED. THE ASSESSEE WAS PLANNING TO PURCHASE FURTHER TDR F OR CONSTRUCTION OF REMAINING FLOORS OF H-4 BUILDING. AS T HE PROJECT WAS SANCTIONED BEFORE 01.04.2004, THE DUE DATE OF COMP LETION OF THE PROJECT WAS 31.03.2008. IT IS UNDISPUTED THAT THE ASSESSEE HAS RECEIVED THE COMPLETION CERTIFICATE IN RESPECT OF H-1, H-2, H-3 & G BUILDING ON 19.03.2008 AND 06.03.2007. HOWEVER, IN RESPECT OF THE BUILDING H-4, THE ASSESSEE SUBMITTED THAT THE TDR COUL D NOT BE PURCHASED AND, THEREFORE, THE BUILDING H-4 COULD NO T BE COMPLETED AND HENCE THE COMPLETION CERTIFICATE WAS NO T ISSUED BY THE PMC FOR THE H-4 BUILDING HAVING FOUR FLATS. SO TH E QUESTION BEFORE US IS WHETHER ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTION IN RESPECT OF THE PROFITS FROM BUILDINGS H-1, H-2, H-3 AND G -1 COMPLETED THROUGH COMPLETION CERTIFICATE DATED 06.03.20 07 AND 19.03.2008 AS STATED ABOVE. ACCORDING TO THE ASSESSI NG OFFICER, THE HOUSING PROJECT WAS NOT COMPLETED WITHIN THE STI PULATED TIME PERIOD I.E., 31.03.2008 AND REJECTED THE CLAIM OF THE AS SESSEE WHICH WAS CONFIRMED BY THE CIT(A). THE UNDISPUTED FA CTS REMAIN THAT ASSESSEE HAS COMPLETED THE BUILDINGS H-1, H-2, H-3 & G ON AREA OF PLOT MEASURING 6722.12 SQ.MTRS. AS DETAILED ABO VE. SO IRRESPECTIVE OF NON-CONSTRUCTION OF BUILDING H-4, ASS ESSEE IS ENTITLED FOR ITS CLAIM OF DEDUCTION U/S.80IB(10) WITH REG ARD TO THESE BUILDINGS H-1, H-2, H-3 & G, BECAUSE, THESE ARE ON STANDALONE BASIS, FULFILLED THE CONDITIONS WITH REGARD TO CLAIM OF DEDUCTION U/S.80IB(10). 15. WE FIND THAT ITAT PUNE BENCH IN THE CASE OF RAH UL CONSTRUCTION CO. (SUPRA) HAS HELD THAT THE ASSESSING OFFICER HAS TO VERIFY AS TO WHEN THE BUILDING PLAN OF THESE BUILD INGS WERE FIRSTLY APPROVED BY THE LOCAL AUTHORITY AND TAKING TH E SAID DATE OF APPROVAL AS STARTING POINT, HE HAS TO VERIFY AS TO W HETHER THESE BUILDINGS WERE COMPLETED WITHIN PRESCRIBED TIME LIMIT, I.E ., 31.03.2008 ON THE BASIS OF COMPLETION CERTIFICATE IN R ESPECT OF SUCH HOUSING PROJECT ISSUED BY THE PMC. IN CASE BEF ORE US, REVENUE AUTHORITIES HAVE NOT DISPUTED THE FACT THAT ASSESSEE HAS COMPLETED THE CONSTRUCTION IN RESPECT OF BUILDINGS H-1 , H-2, H-3 AND G AS DISCUSSED ABOVE. THERE IS ALSO NO DISPUTE OF AREA OF THE PLOT AS LAID DOWN IN PROVISIONS OF SECTION 80IB(1 0) OF THE ACT, ON WHICH PROJECT TOOK PLACE. ONLY DISPUTE IS THAT BU ILDING H-4 WAS NOT COMPLETED AT RELEVANT POINT OF TIME SO CLAIM OF ASSESSEE ITA NO. 2030/PN/2013 SHOULD NOT BE DISALLOWED AS A WHOLE. WHATEVER PORTION COMPLETE D BY ASSESSEE WHICH SATISFY THE CONDITION PRESCRIBED U/S.80IB(10) IS ELIGIBLE FOR DEDUCTION AS HELD IN BRIGADE ENTERPRI SES PVT. LTD. (SUPRA). 16. IN CASE BEFORE US, ASSESSEE HAS RECEIVED THE CO MPLETION CERTIFICATE WITH REGARDS TO BUILDINGS H-1, H-2, H-3 AND G AS STATED ABOVE. SO ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTION U/ S.80IB(10) IN THE STIPULATED TIME IN RESPECT OF COMPLETED BUILDIN GS OF THE PROJECT IN QUESTION. THE CONSTRUCTION ON H-4 BUILDING COULD NOT BE COMPLETED FOR THE CONDITIONS BEYOND THE CONTROL OF THE ASSE SSEE FOR WHICH ASSESSEE IS NOT CLAIMING THE DEDUCTION U/S.80IB (10). IN SUCH SITUATION THE ASSESSEE SHOULD NOT BE DENIED CLA IM OF DEDUCTION U/S.80IB(10) IN RESPECT OF COMPLETED BUILDIN GS AND CLAIM OF THE ASSESSEE SHOULD NOT BE COMPLETELY DENIED. AS MENTIONED ABOVE, THIS VIEW IS FORTIFIED BY DECISION OF BRIGADE ENTERPRISES PVT. LTD. (SUPRA). WE ALSO FIND THAT SUCH L IBERAL INTERPRETATION SHOULD BE USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLETING WHOLE PROJECT BECAUSE ASSE SSEE COULD NOT COMPLETE H-4 BUILDING FOR THE REASONS BEYOND HIS C ONTROL AS STATED ABOVE. IT IS SETTLED LEGAL POSITION THAT LAW ALW AYS GIVES REMEDY AND LAW DOES WRONG TO NO ONE. WE ARE AWARE T HAT PLAIN READING OF SECTION 80IB(10) OF THE ACT SUGGESTS ABOU T ONLY COMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONGWITH WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMAL CIRCUMSTANCES. HOWEVER, IN THE CASE B EFORE US UNDISPUTEDLY ASSESSEE HAS COMPLETED THE CONSTRUCTION OF BUILDINGS H-1, H-2, H-3 AND G AS STATED ABOVE AND ASSESS EE COULD NOT COMPLETE THE CONSTRUCTION OF BUILDING H-4 FO R THE REASONS DISCUSSED ABOVE THE ASSESSEE SHOULD NOT SUFFER FOR T HE SAME WITH REGARD TO THE COMPLETED PORTIONS OF THE PROJECT. THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTION OF GROWTH AND DEV ELOPMENT BE CONSTRUED LIBERALLY AND THE PROVISIONS FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. AT THE SAME TIME R ESTRICTION THEREON HAS TO BE CONSTRUED STRICTLY SO AS TO ADVAN CE THE OBJECT OF PROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVI SIONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJE CT OF STATUTE TO EFFECTUATE LEGISLATIVE INTENTION. THIS VI EW IS FORTIFIED BY DECISION OF PUNE TRIBUNAL IN THE CASE OF RAMSUKH PRO PERTIES (SUPRA), RAHUL CONSTRUCTION CO. (SUPRA), SATISH BOHRA & ASSOCIATES (SUPRA). ACCORDINGLY WE HOLD THAT ASSESSEE IS ENTITLED ITA NO. 2030/PN/2013 TO THE CLAIM OF DEDUCTION U/S.80IB(10) IN RESPECT OF A LL BUILDINGS EXCEPT BUILDING H-4. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 10. IT IS AN ADMITTED FACT THAT THE FACTS AND CIRCUMSTANC ES OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS AND CIRCUMSTANCE S IN THE EARLIER YEARS I.E. ASSESSMENT YEARS 2008-09 AND 2009-10 AND FOL LOWING THE SAME PARITY OF REASONING, WE HOLD THAT THE ASSESSEE IS EN TITLED TO CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RELATION TO THE PROFITS DERIVED FROM THE HOUSING PROJECT HARSH PARADISE. THUS, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE GROUNDS OF APPEAL NO . 1 AND 2 RAISED BY THE REVENUE. 11. THE ISSUE RAISED IN GROUNDS OF APPEAL NO. 3 AND 4 ARE IN RELATION TO THE APPLICABILITY OF THE AMENDED PROVISIONS OF SUB SECTION (F) TO SECTION 80IB(10) OF THE ACT. 12. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASS ESSEE FIRM HAD SOLD FLAT NO. 401 TO GURUDAS ANDAR AND YOGESH ANDAR DURING THE FINANCIAL YEAR 2007-08. FURTHER ON 16-06-2009 NALINI ANDAR AND GURUDAS ANDAR HAVE PAID RS.5,00,000/- AND BOOKED ANOTHE R FLAT NO. 402. THE STAMP DUTY OF RS.1,63,900/- WAS PAID ON 26-06-2 009 AND THE AGREEMENT FOR SALE OF FLAT NO. 402 FOR REGISTERED ON 07 -07-2009. THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 80I B(10) OF SUB SECTION (F) OF THE ACT AND AS TWO MEMBERS OF THE SAME FAMIL Y WERE HOLDING TWO FLATS IN THE SAME PROJECT, THE ASSESSEE WAS H ELD TO BE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. TH E ASSESSING OFFICER OBSERVED THAT THOUGH THE FINANCE (NO.2) ACT, 2009 W AS PASSED ON 19-08-2009, HOWEVER THE SAME WAS DEEMED TO HAVE COME INTO EFFE CT FROM 1 ST DAY OF APRIL 2009. AS PER THE ASSESSING OFFICER SUB SECTIO N (F) OF SECTION 80IB(10) WAS EFFECTED WELL BEFORE THE PURCHASE O F FLAT BY MRS. NALINI ANDAR AND SHRI GURUDAS ANDAR AND AS THE ASSESSEE HAD ITA NO. 2030/PN/2013 VIOLATED THE PROVISION OF SECTION 80IB(10)(F) OF THE ACT, THE CLAIM OF DEDUCTION WAS REJECTED. 13. BEFORE THE CIT(A) THE PLEA OF THE ASSESSEE WAS THAT C LAUSE (F) TO SECTION 80IB(10) WAS INSERTED BY THE FINANCE (NO. 2) ACT, 20 09 W.E.F. 01-04-2010 I.E. ASSESSMENT YEAR 2010-11. THE CASE OF TH E ASSESSEE BEFORE THE CIT(A) WAS THAT ONE FLAT NO. 401 WAS SOLD TO GU RUDAS ANDAR AND HIS SON IN THE FINANCIAL YEAR 2007-08 AND THE WIFE OF SHRI GURUDAS ANDAR PAID RS.5,00,000/- AND BOOKED ANOTHER FLAT ON 16-06 -2009, FOR WHICH THE STAMP DUTY WAS PAID ON 26-06-2009 AND THE A GREEMENT FOR SALE WAS REGISTERED ON 07-07-2009. IN OTHER WORDS, THE RE WAS AN AGREEMENT TO SALE THE FLAT IN THE MONTH OF JUNE, 2009 I.E. B EFORE THE INTRODUCTION OF THE FINANCE (NO.2) ACT, 2009 WHICH AMENDED THE RELEVANT PROVISIONS. THE ASSESSEE SUBMITTED THAT AN AME NDMENT WHICH WAS INTRODUCED IN THE PARLIAMENT ON 06-07-2009 COU LD NOT EFFECT THE TRANSACTION ENTERED INTO, BEFORE THAT DATE. FU RTHER RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF KRISHNASWAMY S. PD. VS. UNION OF INDIA [2006] 281 ITR 305 (SC). THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE OBSERVIN G THAT THE BOOKING OF THE FLAT HAD TAKEN PLACE MUCH BEFORE THE INTROD UCTION OF THE FINANCE (NO. 2) ACT, 2009 WHICH EVENTUALLY WAS PASSED ON 19-08-2 009. FURTHER RELIANCE WAS PLACED ON RATIO LAID DOWN BY THE HON 'BLE SUPREME COURT IN THE CASE OF KRISHNASWAMY S. PD. VS. UNI ON OF INDIA (SUPRA) AND THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) O F THE ACT WAS ALLOWED TO THE ASSESSEE. 14. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF THE CIT (A. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE A SSESSING OFFICER. ITA NO. 2030/PN/2013 15. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT FINANCE BILL WAS INTRODUCED ON 06-07-2009 AND WAS PASSED ON 19-08-200 9. HOWEVER, THE ASSESSEE HAD BOOKED THE FLAT PRIOR TO EVEN INTRODUC TION OF THE FINANCE BILL AND SINCE THE SAID FLAT WAS ALLOTTED PRIOR TO PASS ING OF THE RELEVANT PROVISIONS OF THE ACT, THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT CANNOT BE DENIED TO THE ASSESSEE. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ASSESSEE H AD ALLOTTED ONE FLAT IN FINANCIAL YEAR 2007-08 IN THE HOUSING PROJECT TO ONE SHRI GURUDAS ANDAR AND HIS SON. THE SAID FLAT WAS ALLOTTED ON 03-11-2007 AS PER THE SALE DEED PLACED AT PAGE 86 OF THE PAPER BO OK. THEREAFTER THE WIFE OF SHRI GURUDAS ANDAR, MRS. NALINI ANDAR BOOKED ANO THER FLAT IN THE SAID FLAT BY PAYING AN ADVANCE OF RS.5,00,000/-. THE SAID CHEQUE WAS PAID ON 16-06-2009 AND HAS BEEN CREDITED T O THE ACCOUNT OF THE ASSESSEE ON 16-06-2009. THE COPY OF ACCOUNT OF MRS. NALINI ANDAR IN THE BOOKS OF THE ASSESSEE IS PLACED AT PAGE 8 2 OF THE PAPER BOOK AND THE COPY OF THE BANK STATEMENT EVIDENCING THE CREDIT OF RS.5,00,000/- IS PLACED AT PAGE 83 OF THE PAPER BOOK. THEREAFTER THE STAMP DUTY WAS PAID ON 26-06-2009 AND THE AGREEMENT TO SALE THE SAID FLAT WAS ENTERED INTO BETWEEN THE PARTIES ON 07-07- 2009. THE COPY OF THE SALE DEED IS PLACED AT PAGE 28 OF THE PAPER BOOK AND COPY OF THE EVIDENCE OF PAYMENT OF STAMP DUTY IS PLACED AT PAG E 27 OF THE PAPER BOOK. THE ISSUE ARISING BEFORE US IS WHERE THE ASS ESSEE HAD ALLOTTED TWO SEPARATE FLATS TO MEMBERS OF THE SAME FAMILY , WHETHER THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT COULD BE ALLOWED TO THE ASSESSEE, IN VIEW OF THE AMENDED PROVISIONS OF CLAU SE (F) TO SECTION 80IB(10) OF THE ACT. ITA NO. 2030/PN/2013 17. THE FINANCE BILL FOR AMENDING THE PROVISIONS OF SECTION 80I B(10) WAS INTRODUCED ON 06-07-2009 AND THE FINANCE (NO. 2) AC T, 2009 PASSED ON 19-08-2009 INSERTED CLAUSES (E) AND (F) TO SECTIO N 80IB(10) OF THE ACT. THE SAID PROVISIONS WERE INSERTED W.E.F. 01-04-2 010. THE RELEVANT PROVISIONS OF CLAUSE (F) TO SECTION 80IB(10) OF THE AC T READS AS UNDER: SECTION 80IB(10): THE AMOUNT OF DEDUCTION IN THE CAS E OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH, 2009 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREV IOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJ ECT IF - (A) (B) (C) (D) (E) (F) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSING P ROJECT IS WALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RE SIDENTIAL UNIT IN SUCH HOUSING PROJECT IS ALLOTTED TO ANY OF THE FOLLO WING PERSONS, NAMELY:- (I) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDRE N OF SUCH INDIVIDUAL, (II) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVI DUAL IS THE KARTA, (III) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOU SE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDIVID ED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA. EXPLANATION FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY TO A NY UNDERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRA L OR STATE GOVERNMENT). 18. UNDER THE SAID CLAUSE (F) TO SECTION 80IB(10) OF THE ACT, IT IS PROVIDED THAT WHERE A RESIDENTIAL UNIT IN THE HOUSING PROJ ECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, THEN NO OTHER RESIDENTIAL U NIT IN SUCH HOUSING PROJECT SHALL BE ALLOTTED TO ANY INDIVIDUAL OR TH E SPOUSE OR THE ITA NO. 2030/PN/2013 MINOR CHILDREN OF SUCH INDIVIDUAL, THE HINDU UNDIVIDED FAMILY, IN SUCH INDIVIDUAL IS THE KARTA OR ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUSE OR THE MINOR CHILDREN OR THE HINDU UNDIVIDED FAMILY. IN OTHER WORDS IF AN INDIVIDUAL, HAD BEEN ALLOTTED A RESIDENTIAL UNIT IN A NY HOUSING PROJECT THEN SUCH INDIVIDUAL OR THE SPOUSE OF SU CH INDIVIDUAL OR THE MINOR CHILDREN OF SUCH INDIVIDUAL INCLUDING THE HINDU UNDIVIDED FAMILY IN WHICH HE IS THE KARTA OR ANY PERSON RE PRESENTING ABOVE SAID PERSON ARE NOT ENTITLED TO BE ALLOTTED ANY OT HER RESIDENTIAL UNIT, IN SUCH HOUSING PROJECT. AND IN CASE OF VIOLATION OF THE SAID PROVISIONS OF THE ACT, THE ASSESSEE WHO HAD SO ALLOTTED T HE FLATS TO SUCH PERSONS, SHALL NOT BE ENTITLED TO CLAIM OF DEDUCTION UN DER SECTION 80IB(10) OF THE ACT. THE SAID PROVISIONS WERE INSERTED BY THE FINANCE (NO. 2) ACT, 2009 W.E.F. 01-04-2010. 19. NOW COMING TO THE FACTS OF THE PRESENT CASE, THE ASS ESSEE HAD ALLOTTED ONE FLAT TO SHRI GURUDAS ANDAR IN THE FINANCIAL YEAR 2007-08 THEREAFTER THE WIFE OF SHRI GURUDAS ANDAR I.E. MRS. NALINI ANDA R HAD BOOKED ANOTHER FLAT IN JUNE, 2009 AGAINST WHICH AN ADVANC E OF RS.5,00,000/- WAS PAID WAS RECEIVED BY THE ASSESSEE ON 2 6-06-2009. FURTHER STAMP DUTY IN RESPECT OF THE SALE OF SAID FLAT WAS PAID ON 26- 06-2009 AND THE AGREEMENT TO SALE BETWEEN THE PARTIES WAS EXECUTED ON 07-07-2009. THE FINANCE BILL WAS PASSED ON 19-08-200 9 I.E. AFTER THE EXECUTION OF AGREEMENT TO SELL BETWEEN THE PARTIES ON 07-07-2009. THE FINANCE BILL WAS INTRODUCED ON 07-06-2009 BUT WAS PA SSED ONLY ON 19-08-2009 I.E. AFTER THE DATE OF EXECUTION OF AGREEME NT TO SELL BETWEEN THE ASSESSEE AND MRS. NALINI ANDAR, WIFE OF SHRI GUR UDAS ANDAR, WHERE THE TRANSACTION WAS COMPLETED PRIOR TO INSE RTION OF CLAUSE (F) TO SECTION 80IB(10) OF THE ACT BY THE FINANCE (NO.2 ) ACT, 2009, THE SAME PROVISIONS CANNOT BE APPLIED IN ORDER TO D ENY THE DEDUCTION U/S. 80IB(10) OF THE ACT. IN THE FIRST INSTANCE T HE SAID ITA NO. 2030/PN/2013 FINANCE (NO.2) ACT, 2009 HAS BEEN MADE EFFECTIVE FROM 01-04- 2010 AND EVEN OTHERWISE THE SAID PROVISIONS CAN AT BEST BE M ADE EFFECTIVE FROM THE DATE OF ITS INTRODUCTION I.E. PASSING OF THE FINANC E (NO. 2) ACT, 2009 I.E. ON 19-08-2009. 20. THE AMENDED PROVISIONS HAVING BEEN INTRODUCED ON A LATER DATE CANNOT BE APPLIED TO THE TRANSACTIONS COMPLETED BEFORE T HE SAID PROVISIONS WERE INTRODUCED WERE AMENDED AS THE ASSESSE E CANNOT BE EXPECTED TO DO DEEDS WHICH ARE IMPOSSIBLE. THE HON'BLE S UPREME COURT IN THE CASE OF KRISHNASWAMY S. PD. V. UNION OF INDIA (SUPRA) OBSERVED AS UNDER: 9. THE OTHER RELEVANT MAXIM IS, LEX NON COGIT AD IMPOSSI BILIA- THE LAW DOES NOT COMPEL A MAN TO DO WHAT HE CANNOT P OSSIBLY PERFORM. THE LAW ITSELF AND ITS ADMINISTRATION IS UNDER STOOD TO DISCLAIM AS IT DOES IN ITS GENERAL APHORISMS, ALL INTENTIO N OF COMPELLING IMPOSSIBILITIES, AND THE ADMINISTRATION OF LA W MUST ADOPT THAT GENERAL EXCEPTION IN THE CONSIDERATION OF PARTICULAR CASES. [SEE U. P. S. R. T. C. V. IMTIAZ HUSSAIN [2006] 1 SCC 380, SHAIKH SALIM HAJI ABDUL KHAYUMSAB V. KUMAR [2006] 1 SC C 46, MOHAMMED GAZI V. STATE OF M. P. [2000] 4 SCC 342 AND GURSHARAN SINGH V. NEW DELHI MUNICIPAL COMMITTEE [1996 ] 2 SCC 459]. 21. FURTHER THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. REVATHI EQUIPMENT LTD., 298 ITR 67 (MAD.) WHILE CONSIDERING TH E ISSUE OF RETROSPECTIVE AMENDMENT INTRODUCED IN RELATION TO THE LEVY OF INTEREST UNDER SECTIONS 234A AND 234B OF THE ACT OBSERVED AS UNDE R: HELD, DISMISSING THE APPEAL, THAT THE ASSESSEE HAD PAI D ADVANCE TAX AFTER DEDUCTING THE PAYMENT MADE UNDER THE VOLUN TARY RETIREMENT SCHEME. IN VIEW OF THE DECISIONS OF THE JURISDICTIONAL HIGH COURT THE ASSESSEE WAS ALLOWED TO DEDUCT EXPENDIT URE INCURRED ON PAYMENT TO WORKERS TOWARDS VOLUNTARY RET IREMENT SCHEME. SINCE SECTION 35DDA WAS INTRODUCED BY THE FI NANCE ACT, 2001, WITH EFFECT FROM APRIL 1, 2001, AND RECEIVED ASSENT ON MAY 11, 2001, THE ASSESSEE COULD NOT HAVE ENVISAGED THAT IT WOULD ITA NO. 2030/PN/2013 BECOME LIABLE FOR PAYMENT OF TAX EVEN AGAINST VOLUNTA RY RETIREMENT PAYMENTS, WHICH WERE OTHERWISE ALLOWABLE. FURT HER THE ASSESSEE HAD PAID A SUM OF RS. 90,00,000 ON AUGUST 6, 2001, AS SELF-ASSESSMENT TAX, I. E., MUCH BEFORE THE FILING OF THE RETURN ON OCTOBER 30, 2001, WHICH ALSO PROVED THE BONA FIDES OF THE ASSESSEE. ON THE ABOVE TWO GROUNDS THE TRIBUNAL ACCEP TED THE CASE THAT THE ASSESSEE WAS NOT SUBJECT TO ADVANCE T AX. THE FINDINGS OF THE TRIBUNAL WERE BASED ON VALID MATERIALS AND EVIDENCE AND DID NOT WARRANT INTERFERENCE. 22. APPLYING THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF KRISHNASWAMY S. PD. V. UNION OF INDIA (SUPRA) AND HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. REVATHI EQUIPME NT LTD. (SUPRA), WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM OF D EDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF THE FLAT A LLOTTED TO MRS. NALINI ANDAR I.E. SECOND RESIDENTIAL UNIT ALLOTTED IN THE SAME P ROJECT TO TWO MEMBERS OF THE SAID FAMILY. 23. WE, FURTHER FIND THAT THE CBDT VIDE CIRCULAR NO. 5 OF 20 10 DATED 03-06-2010 IN THE EXPLANATORY NOTE TO THE PROVISIONS OF FINANCE (NO. 2 ) ACT, 2009 HAD CLARIFIED THE APPLICABILITY OF THE AMENDED PROV ISIONS OF THE ACT, OBSERVING AS UNDER: 33.8 APPLICABILITY THESE AMENDMENTS HAVE BEEN MADE APPLICABLE WITH EFFECT FROM 1ST APRIL, 2010 AND WILL ACC ORDINGLY APPLY IN RELATION TO ASSESSMENT YEAR 2010-11 AND SUB SEQUENT YEARS. THE AMENDMENTS RELATE TO RESTRICTIONS ON SPEC IFIC TRANSACTIONS (I.E., ALLOTMENT OF RESIDENTIAL UNITS). THERE FORE, THEY WOULD APPLY TO TRANSACTIONS AFTER A SPECIFIED DATE DURI NG THE YEAR. SINCE THE FINANCE (NO.2) ACT, 2009 BECAME LAW ON 19 TH AUGUST, 2009, THE RESTRICTIONS REGARDING ALLOTMENT OF RESIDENT IAL UNITS SHALL NOT APPLY IN RESPECT OF ALLOTMENTS MADE BEFORE 19.08.2009. 24. IN THE TOTALITY OF THE ABOVE FACTS AND CIRCUMSTANCES, WE HOLD TH AT THE AMENDED CLAUSE (F) TO SECTION 80IB(10) OF THE ACT ARE T O BE APPLIED W.E.F. 19-08-2009 AND CANNOT BE USED TO DENY THE DEDUC TION UNDER ITA NO. 2030/PN/2013 SECTION 80IB(10) OF THE ACT IN RESPECT OF THE RESIDENTIAL UN IT ALLOTTED PRIOR TO THE COMING INTO OPERATION OF AMENDED PROVISIONS I.E. CLAUSE (F) INSERTED TO SECTION 80IB(10) OF THE ACT. ACCORDINGLY, WE U PHOLD THE ORDER OF THE CIT(A) AND DISMISS THE GROUNDS OF APPEAL NO. 3 AND 4 RAISED BY THE REVENUE. 25. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF OCTOBER, 2014. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 27 TH OCTOBER, 2014. RK / GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE