Amrutlal Hassanand Pamnani, Solapur V. ITO, Solapur

ITA 2238/PUN/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2016 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 30-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 09-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Reopening of assessment
• Section: 143(3); 133A; 80IB; 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , AM . / ITA NO S . 2238 TO 2240 /PN/201 2 / ASSESSMENT YEAR S : 20 0 5 - 0 6 TO 2007 - 08 AMRUTLAL HASSANAND PAMNANI, 35, GURUNANAK NAGAR, SOLAPUR . / APPELLANT PAN: AA BHP1407K VS. THE INCOME TAX OFFICER , WARD - 1 (2) , SOL APUR . / RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 0 5 . 0 4 .201 6 / DATE OF PRONOUNCEMENT: 07 . 0 4 .201 6 / ORDER PER SUSHMA CHOWLA, JM: THIS BUNCH OF THREE APPEAL S FILED BY THE ASSESSEE ARE AGAINST CONSOLIDATED ORDER OF CIT (A) - III , PUNE , D ATED 28 . 0 7 .201 1 RELATING TO ASSESSMENT YEAR S 200 5 - 0 6 TO 2007 - 08 AGAINST RESPECTIVE ORDER S PASSED U NDER S ECTION 143(3) / 143(3) R.W.S. 147 OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT) . ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 2 2 . TH IS BUNCH OF THREE APPEALS FILED BY THE ASSESSEE RELATING TO SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CON VENIENCE. HOWEVER, REFERENCE IS BEING MADE TO THE FACTS AND ISSUES IN ASSESSMENT YEAR 2007 - 08 BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AND HENCE, WE PROCEED TO ADJUDICATE THE ISSUE BY REFERRING TO THE ORDERS OF AUTHORITIES BELOW RELATING TO ASSESSMENT YEAR 2007 - 08. 3. THE ASSESSEE IN ITA NO. 2240 /PN/201 2 HAS RAISED THE FOLLOWING GROUND OF APPEAL: - 1] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE REASST. U/S 147 WAS VALID IN LAW. HE FAILED TO APPRECIATE THAT THE APPELLANT HAD COMPLIED WITH ALL THE CONDITIONS OF SECTION 80IB(10) AND THUS, THERE WAS NO WARRANT FOR REOPENING THE ASST. 1.1] THE APPELLANT SUBMITS THAT THE REASST. IS NULL AND VOID. 2] THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE DEDUCTION U/S 80IB(10) OF RS.3,51,663/ - ON THE GRO UND THAT THE APPELLANT HAD NOT COMPLETED THE PROJECT BY 31.03.2008 . 2.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT 2.1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT A . THE APPELLANT HAD APPLIED FOR COMPLETION CERTIFICATE BEFORE 31.03.2008 TO SOLAPUR MUNICIPAL CORPORATION BUT THE CERTIFICATE WAS NOT G IVEN BEFORE THAT DATE. B . THE APPELLANT HAD PRODUCED ALL OTHER EVIDENCES LIKE ELECTRICAL BILLS, WATER BILLS, MUNICIPAL TAX BILLS, ETC. TO INDICATE THAT THE PROJECT WAS COMPLETED IN TIME. C . DURING THE SURVEY OPERATION, THE DEPT. DID NOT FIND ANY EVIDENCE THAT THE PROJECT WAS NOT COMPLETED BEFORE 31.03.2008. D . AND HENCE, THE DENIAL OF DEDUCTION U/S 80IB(10) ON THE GROUND THAT THE PROJECT WAS NOT COMPLETED BEFORE 31.03.2008 IS NOT JUSTIFIED. 3] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 4. THE GROUND S OF APPEAL NO.1 AND 1.1 RAISED IN ALL THE APPEALS AGAINST REOPENING OF ASSESSMENT ARE NOT PRESSED AND HENCE, THE SAME ARE DISMISSED AS NOT PRESSED. ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 3 5. THE ISSUE IN GROUND OF APPEAL NO.2 RAISED IN ALL THE APPEALS IS AGAINST THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 6. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF DEVELOPING AND BUILDING HOUSING PROJECTS . ONE HOUSING PROJECT HAD BEEN DEVELOPED BY THE ASSESSEE WAS APPRO VED BY THE LOCAL AUTHORITY IN THE YEAR 2002 AND THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF THE SAID PROJECT IN ASSESSMENT YEARS 2004 - 05 TO 2007 - 08 . THE ASSESSING OFFICER WAS OF THE VIEW THAT IN ORDER TO CLAIM DEDUCT ION UNDER SECTION 80IB(10) OF THE ACT , PROJECT OF THE ASSESSEE WAS REQUIRED TO BE COMPLETED ON OR BEFORE 31.03.2008. IN THIS CASE, SPOT SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED ON 28.05.2008 FOR THE PURPOSE OF VERIFICATION OF CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN ORDER TO CHECK WHETHER THE PROJECT WAS COMPLETED BY 31.03.2008 AND COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITY AND OBTAINED BY THE ASSESSEE. DURING THE COURSE OF SURVEY, THE AUTHORITY AND OBTAINED BY THE ASSESSEE. DURING THE COURSE OF SURVEY, THE ASSESSEE WAS ASKED TO FURNISH T HE COPY OF COMPLETION CERTIFICATE OF THE PROJECT. HOWEVER, THE ASSESSEE COULD NOT FURNISH THE SAME STATING THAT HE HAD APPLIED ON 17.03.2008 , BUT IT HAD NOT BEEN ISSUED BY THE LOCAL AUTHORITY I.E. SOLAPUR MUNICIPAL CORPORATION. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE NO COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITY IN RESPECT OF THE SAID HOUSING PROJECT, THE ASSESSEE WAS NOT DEEMED TO HAVE COMPLETED CONSTRUCTION BEFORE 31.03.2008, HENCE THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF DED UCTION UNDER SECTION 80IB(10) OF THE ACT. ACCORDINGLY, REASONS WERE RECORDED FOR REOPENING ASSESS MENT UNDER SECTION 147 OF THE ACT AND IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE FURNISHED A LETTER STATING THAT THE ORIGINAL RETURN OF INCOME FILED BY IT SHOULD BE TREATED AS REPLY TO NOTICE UNDER SECTION 148 OF THE A C T . THE REASONS FOR REOPENING OF THE ASSESSMENT WERE SUPPLIED TO THE ASSESSEE IN THIS REGARD AND AFTER CONSIDERING ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 4 THE SUBMISSIONS OF ASSESSEE, THE ASSESSING OFFICER VIDE PA RAS 6 AND 7 OBSERVED AS UNDER: - 6. THE ASSESSEES SUBMISSION HAS DULY BEEN CONSIDERED. DURING COURSE OF SURVEY IT WAS SEEN THAT THERE WAS NO CONSTRUCTION ACTIVITY GOING ON. PHOTOGRAPHS AND VIDEO RECORDING WAS TAKEN DURING COURSE OF SURVEY AND SAME ARE P LACED ON RECORDS. FURTHER, IN RESPONSE TO QUESTION 14 AND 15 OF THE STATEMENT RECORDED DURING SURVEY ASSESSEE PRODUCED MSEB BILLS AND MUNICIPAL TAX PAID RECEIPTS, PAID BY THE OCCUPANTS BEFORE 31 - 3 - 2008, IN SUPPORT OF THE CLAIM THAT OWNERS WERE ACTUALLY RE SIDING AND PROJECT WAS COMPLETED BEFORE 31 - 03 - 2008. 6.1 REGARDING COMPLETION CERTIFICATE IT IS SUBMITTED BY THE ASSESSEE THAT ASSESSEE HAS FILED APPLICATION AS PER PROVISIONS OF BPMC ACT, 1949 TO SMC ON 17.03.2008 BUT THE COMMISSIONER OF SOLAPUR MUNICIPAL CORPORATION HAS NEITHER COMMUNICATED HIS REFUSAL / OBJECTION NOR ISSUED THE CERTIFICATE OF COMPLETION. IT IS THE CLAIM OF ASSESSEE THAT AS PER BPMC ACT, 1949, ON AN APPLICATION BY THE BUILDER, THE COMMISSIONER SHALL GRANT CERTIFICATE OF COMPLETION ALONG WITH PERMISSION TO OCCUPY PREMISES. IN CASE, THE COMMISSIONER FAILS TO ISSUE SUCH CERTIFICATE WITHIN 21 DAYS FROM THE DATE OF APPLICATION, IT SHALL BE PRESUMED THAT, THE COMPLETION CERTIFICATE ALONG WITH PERMISSION TO OCCUPY IS DEEMED TO HAVE BEEN GRANTED . IT IS ARGUED BY THE ASSESSEE THAT THE COMMISSIONER HAS NOT REJECTED OUR APPLICATION AND HAS FILED COPY OF AFFIDAVIT STATING THAT, APPLICATION FOR COMPLETION CERTIFICATES WAS MADE TO SMC ON 17 - 03 - 2008 AND A LETTER OF REJECTION HAS NOT BEEN RECEIVED FROM THE SMC TILL DATE. 6.2 AS PER SECTION 80IB(10)(A) EXPLANATION (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 ISSUED BY THE LOCAL AU THORITY. CONSIDERING THE FACT THAT COMPLETION CERTIFICATE IN THIS CASE IS NOT AU THORITY. CONSIDERING THE FACT THAT COMPLETION CERTIFICATE IN THIS CASE IS NOT ISSUED BY THE SOLAPUR MUNICIPAL CORPORATION ON OR BEFORE 31 - 03 - 2008 THERE IS VIOLATION OF CONDITION FOR ELIGIBILITY FOR DEDUCTION U/S 80IB(10). CONSIDERING THESE PROVISIONS OF INCOME TAX ACT ASSESSEES EXPLANATIONS ARE NOT FOUND ACCEPTABLE AND THEREFORE ASSESSEES CLAIM OF RS.3,51,663/ - FOR DEDUCTION U/S 80IB(10) IS HEREBY REJECTED. THE ADDITION OF RS.3,51,663/ - IS THEREFORE MADE TO THE TOTAL INCOME. 7. WITH THESE REMARKS TOTA L INCOME OF THE ASSESSEE IS COMPUTED AS UNDER: - TOTAL INCOME RETURNED RS. 93,750/ - ADD: - DEDUCTION CLAIMED U/S 80IB DISALLOWED RS. 3,51,663/ - TOTAL INCOME ASSESSED RS.4,45,410/ - 7. SINCE THE ASSESSEE HAD NOT RECEIVED COMPLETION CERTIFICA TE BY 31.03.2008 , THE ASSESSING OFFICER HELD THE ASSESSEE WA S NOT ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AND THE SAID DEDUCTION WAS NOT ALLOWED TO THE ASSESSEE. ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 5 8. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER IN DENYING THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT FOR NON - RECEIPT OF COMPLETION CERTIFICATE BY 31.03.2008 WITH REGARD TO ASSESSMENT YEARS 2005 - 06 TO 2007 - 08 . HOWEVER, WITH REGARD TO ASSESSMENT YEAR 2004 - 05 , IT WAS OBSERVED BY THE CIT(A) THAT THE SAID PR OVISIONS OF RECEIPT OF COMPLETION CERTIFICATE WERE BROUGHT INTO STATUTE ON 01.04.2004 AND HENCE, WERE NOT APPLICATION TO ASSESSMENT YEAR 2004 - 05. ACCORDINGLY, THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT WAS ALLOWED TO THE ASSESSEE. 9. THE LE ARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AFTER REFERRING TO THE FACTUAL ASPECTS OF THE CASE AND STATEMENT RECORDED DURING THE COURSE OF SURVEY, POINTED OUT THAT THE CONSTRUCTION OF ALL THE UNITS TOTALING 27 FLATS WERE COMPLETED BY THE ASSESSEE BEFO RE THE END OF MARCH, 2008 AND PERSONS HAD OCCUPIED THE FLATS AND ALSO RECEIVED NOTICES FOR PAYMENT OF MUNICIPAL TAXES AND EVEN ELECTRICITY BILLS AND SINCE THE SAID UNITS WERE OCCUPIED BY THE RESPECTIVE EVEN ELECTRICITY BILLS AND SINCE THE SAID UNITS WERE OCCUPIED BY THE RESPECTIVE OWNERS OF THE FLATS , HENCE COMPLETED AND THE ASSESSEE WAS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT WHERE ALL THE FORMALITIES HAVE BEEN COMPLETED BY THE ASSESSEE, MERELY BECAUSE THE COMPLETION CERTIFICATE HAD NOT BEEN ISSUED, THE DEDUCTION CLAIMED UNDER SECTION 80IB(10) OF THE ACT COULD NOT BE DENIED TO THE ASSESSEE. IN THIS REGARD, RELIANCE WAS PLACED ON THE DECISION OF PUNE BENCH OF TRIBUNAL IN RUNWAL DEVELOPERS VS. ACIT IN ITA NO.1339/PN/201 0, RELATING TO ASSESSMENT YEAR 2006 - 07, ORDER DATED 30.12.2014 . FURTHER, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT EVEN IF THE ASSESSEE HAD NOT APPLIED FOR THE SAID COMPLETION CERTIFIC ATE, SINCE THE PROJECT WAS SANCTIONED PRI OR TO THE AMENDMENT IN SECTION 80IB(10)(II)(A) OF THE ACT, THERE WAS NO REQUIREMENT OF COMPLETION CERTIFICATE AND IN THIS REGARD, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 6 HONBLE DELHI HIGH COURT IN CIT VS. CHD DEVELOPERS LTD. (2014) 362 ITR 177 ( DEL) . 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IN TURN, RELIED ON THE ORDERS OF AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING BEFORE US IS IN RESPECT OF CLAIM OF DEDUCTION UNDER S ECTION 80IB(10) OF THE ACT , W HERE THE ASSESSEE HAD NOT RECEIVED COMPLETION CERTIFICATE BEFORE 31.03.2008 IN RESPECT OF THE PROJECT FOR WHICH THE CONSTRUCTION WAS STARTED BEFORE 01.04.2004. AS PER THE PROVISIONS OF SECTION 80IB(10) OF THE ACT, THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, IN CASE THE CONSTRUCTION OF THE SAID PROJECT WAS COMPLETED ON OR BEFORE 31.03.2008 AND THE ASSESSEE HAD RECEIVED THE COMPLETION CERTIFICATE IN THIS REGARD. THE ASSESSEE CLAIMS TO HAVE FUL FILLED THE CONDITIONS OF DEVELOPMENT OF THE SAID PROJECT AND HANDING OVER OF THE RESPECTIVE UNITS TO THE INDIVIDUAL FLAT OWNE RS, WHO IN TURN, HAD OCCUPIED THE SAID FLATS BEFORE 31.03.2008 . THE ASSESSEE FURTHER CLAIMS TO HAVE APPLIED FOR THE ISSUE OF COMPL ETION CERTIFICATE VIDE LETTER DATED 17.03.2008 . HOWEVER, NO SUCH COMPLETION CERTIFICATE WAS ISSUED TO THE ASSESSEE B Y 31.03.2008 . IN THE ABSENCE OF COMPLETION CERTIFICATE, BOTH THE AUTHORITIES BELOW HELD THE ASSESSEE NOT TO BE ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 12. W E FIND THAT SIMILAR ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN RESPECT OF PROJECT WHICH HAD COMMENCED ON 12.12.2003 AND WHICH WAS TO BE COM PLETED ON OR BEFORE 31.03.2008 AND IN THE ABSENCE OF ANY COMPLETION CERTIFICATE BEING ISSUED BY THE LOCAL AUTHORITY, THE ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN SUCH CIRCUMSTANCES WAS DELIBERATED UPON BY THE PUNE BENCH OF TRIBUNAL IN RUN WAL DEVELOPERS VS. ACIT ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 7 (SUPRA). THE FACTS AS REFERRED TO BY THE TRIBUNAL IN PARAS 4 AND 5 WERE AS UNDER: - 4. THE PROJECT OF THE ASSESSEE COMMENCED ON 12.12.2003. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PROJECT OF THE ASSESSEE DID NOT COMPL Y WITH THE CONDITIONS PRESCRIBED IN CLAUSE (A) TO SECTION 80 - IB(10) OF THE ACT READ WITH EXPLANATION (II) THEREOF. AS PER THE ASSESSING OFFICER, THE CONSTRUCTION OF THE PROJECT WAS TO BE COMPLETED BY 31.03.2008 AND IN TERMS OF EXPLANATION (II) OF CLAUSE ( A) TO SECTION 80 - IB(10) OF THE ACT, THE DATE ON WHICH THE COMPLETION CERTIFICATE IS ISSUED BY THE LOCAL AUTHORITY IS TO BE TAKEN AS THE DATE OF COMPLETION. IN THE PRESENT CASE, ACCORDING TO THE ASSESSING OFFICER, ASSESSEE DID NOT OBTAIN THE COMPLETION CER TIFICATE FROM THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL CORPORATION (PMC) ON OR BEFORE 31.03.2008. THEREFORE, THE ASSESSING OFFICER DISALLOWED ASSESSEES CLAIM FOR DEDUCTION U/S 80 - IB(10) OF THE ACT AMOUNTING TO RS.1,20,25,699/ - . THE AFORESAID ACTION OF TH E ASSESSING OFFICER HAS ALSO BEEN AFFIRMED BY THE CIT(A), AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. 5. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESSEE VEHEMENTLY POINTED OUT BY REFERRING TO THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER, WHICH ARE REPRODUCED IN THE ASSESSMENT ORDER, THAT ASSESSEE HAD DULY APPLIED FOR OBTAINING OF OCCUPANCY CERTIFICATE FROM PMC BUT THE SAME WAS NOT ISSUED BY PMC FOR THEIR INTERNAL REASONS. FACTUALLY, IT IS POINTED OUT THAT THE PROJECT OF THE ASSESSEE CONSISTED O F 56 FLATS AND 7 ROW HOUSES AND THE CONSTRUCTION OF ALL OF THEM WAS COMPLETED AND IN - FACT POSSESSION WAS HANDED - OVER TO THE RESPECTIVE BUYERS. THE LD. REPRESENTATIVE ALSO POINTED OUT THAT THE PMC WAS LEVYING MUNICIPAL TAXES IN RESPECT OF EACH OF THE RESID ENTIAL UNIT AND THE SAME WAS BEING DONE IN THE NAME OF THE CONCERNED OWNERS. ASSESSEE ALSO RELIED UPON THE ELECTRICITY BILLS AND THE POSSESSION DOCUMENTS TO PROVE THAT THE BUYERS OF THE FLATS WERE INDEED USING THE FLATS AND THE SAME COULD HAVE BEEN POSSIB LE ONLY FLATS WERE INDEED USING THE FLATS AND THE SAME COULD HAVE BEEN POSSIB LE ONLY AFTER COMPLETION OF THE PROJECT. THE LD. REPRESENTATIVE SUBMITTED THAT THE AFORESAID ASSERTIONS OF THE ASSESSEE HAVE NOT BEEN DISPUTED BUT THE CLAIM OF DEDUCTION U/S 80 - IB(10) OF THE ACT HAD BEEN REJECTED MERELY BECAUSE THE PMC DID NOT ISSUE THE O CCUPANCY CERTIFICATE ON OR BEFORE 31.03.2008. IN THIS CONTEXT, REFERENCE HAS ALSO BEEN MADE TO THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHD DEVELOPERS LTD., (2014) 362 ITR 177 (DELHI) FOR THE PROPOSITION THAT THE REQUIREMENT OF ISSUANCE OF COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY BEFORE THE STIPULATED DATE CANNOT BE INSISTED UPON IN THE PRESENT CASE SINCE THE PROJECT OF THE ASSESSEE HAD COMMENCED PRIOR TO THE AMENDMENT INSERTED BY THE FINANCE (NO.2) ACT OF 2004, W.E.F. 01.0 4.2005 IN TERMS OF EXPLANATION (II) TO SECTION 80 - IB(10)(A) OF THE ACT WHICH REQUIRED PRODUCTION OF COMPLETION CERTIFICATE. 13. THE TRIBUNAL IN VIEW OF THE SAID FACTS, HELD AS UNDER: - 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. THE CRUX OF THE CONTROVERSY IN THE PRESENT APPEAL RELATES TO THE PROVISIONS OF SUB - CLAUSE (I) OF CLAUSE (A) TO SECTION 80 - IB(10) OF THE ACT READ WITH EXPLANATION (II) THEREOF. AS PER THE REVENUE, HAVING REGARD TO SUB - CLAUSE (I) OF CLAUSE (A) TO SECTION 80 - IB(10) OF T HE ACT, THE CONSTRUCTION OF THE HOUSING PROJECT WAS TO BE COMPLETED ON OR BEFORE 31.03.2008. SUB - CLAUSE (I) OF CLAUSE (A) TO SECTION 80 - IB(10) OF THE ACT PRESCRIBES THAT WHERE A HOUSING PROJECT IS APPROVED ON OR BEFORE 01.04.2004 THEN THE DEVELOPMENT AND CONSTRUCTION OF SUCH HOUSING PROJECT SHALL BE COMPLETED ON OR BEFORE 31.03.2008. EXPLANATION (II) BELOW CLAUSE (A) OF SECTION 80 - IB(10) OF THE ACT PROVIDES THAT 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 ISSUED BY THE LOCAL AUTHORITY. ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 8 8. IN THE PRESENT CASE, IT IS AN ADMITTED POSITION THAT THE HOUSING PROJECT OF THE ASSESSEE KNOWN AS RUNWAL DAFFODILS COMMENCED WITH EFFECT FROM 12.12 .2003 AND THEREFORE CONSTRUCTION OF SUCH A HOUSING PROJECT WAS REQUIRED TO BE COMPLETED ON OR BEFORE 31.03.2008 AS STIPULATED IN SUB - CLAUSE (I) OF CLAUSE (A) TO SECTION 80 - IB(10) OF THE ACT. IT IS ALSO NOT DENIED BY THE ASSESSEE THAT THE RELEVANT COMPLETI ON CERTIFICATE HAS NOT BEEN ISSUED BY THE LOCAL AUTHORITY I.E. PMC ON OR BEFORE 31.03.2008. HOWEVER, THE CASE SETUP BY THE ASSESSEE IS THAT THE PROJECT OF THE ASSESSEE WAS APPROVED AND IT COMMENCED ON 12.12.2003, WHICH PERTAINS TO A PERIOD PRIOR TO 01.04. 2005 I.E. THE DATE ON WHICH THE AMENDMENT WHICH INSISTED ON PRODUCTION OF COMPLETION CERTIFICATE WAS BROUGHT INTO FORCE. IN ORDER TO APPRECIATE THE AFORESAID PLEA OF THE ASSESSEE, WE MAY REFER TO THE PROVISIONS OF SECTION 80 - IB(10) OF THE ACT AS IT STOOD PRIOR TO THE AMENDMENT BROUGHT BY THE FINANCE (NO.2) ACT OF 2004, W.E.F. 01.04.2005 : - (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH, 2005 BY A LOCAL AUTHORITY, SHALL B E 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 TILE 1ST DAY OF OCTO BER, 1998; ( B ) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS MINIMUM AREA OF ONE ACRE; AND ( C ) THE RESIDENTIAL UNIT HAS A MINIMUM BUILT - UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WIT HIN TWENTY - FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. 9. SUBSEQUENTLY, FINANCE (NO.2) ACT OF 2004, WHICH WAS BROUGHT INTO FORCE W.E.F. 01.04.2005, AMENDED THE PROVISIONS OF SECTION 80 - IB(10) OF THE ACT; AND, POST - AMENDMENT SECTION 80 - IB(10) OF THE ACT READ AS UNDER: - (10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH, 2008 BY A LOCAL AUTH ORITY SHALL BE HUNDRED PER CENT. OF THE PROFITS DERIVED IN THE 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 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION - (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; (II) IN A CASE WHERE A HOUSING PROJECT H AS BEEN, OR, IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004 BUT NOT LATER THAN THE 31ST DAY OF MARCH, 2005, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. (II I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2005, WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION - FOR THE PURPOSES OF THIS CLAUSE, - ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 9 (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APP ROVED BY THE LOCAL AUTHORITY; (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 ISSUED BY THE LOCAL AUTHORITY; (B) THE PROJECT IS ON TH E SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE (A) OR CLAUSE (B) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR R ECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DECLARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; (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 WITHIN TWENTY - FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; (D) THE BUILT - UP AREA OF T HE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED THREE PER CENT. OF THE AGGREGATE BUILT - UP AREA OF THE HOUSING PROJECT OF FIVE THOUSAND SQUARE FEET, WHICHEVER IS HIGHER. 10. IN THE INSTANT ASSESSMENT YEAR I.E. 2006 - 07, THE ASSESSING OFFICER HAS SOUGHT TO DISALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE ON THE GROUND THAT THE COMPLETION CERTIFICATE IN TERMS OF EXPLANATION (II) HAS NOT BEEN OBTAINED. A SIMILAR SITUATION HAD ARISEN BEFORE THE HONBLE DELHI HIGH COUR T IN THE CASE OF SIMILAR SITUATION HAD ARISEN BEFORE THE HONBLE DELHI HIGH COUR T IN THE CASE OF CHD DEVELOPERS LTD. (SUPRA). IN THE CASE BEFORE THE HONBLE DELHI HIGH COURT, THE PROJECT OF THE ASSESSEE WAS APPROVED ON 16.03.2005 AND THE ASSESSING OFFICER PROCEEDED TO DISALLOW THE DEDUCTION CLAIMED FOR ASSESSMENT YEAR 2007 - 08 ON THE GROUND THAT THE COMPLETION CERTIFICATE IN TERMS OF EXPLANATION (II) WAS NOT GRANTED WITHIN THE STIPULATED PERIOD I.E. ON OR BEFORE 31.03.2009. NOTABLY, IN THE CASE BEFORE THE HONBLE DELHI HIGH COURT, THE TIME - LIMIT FOR COMPLETION OF CONSTRUCTION OF THE H OUSING PROJECT WAS GOVERNED BY SUB - CLAUSE (II) OF CLAUSE (A) TO SECTION 80 - IB(10) OF THE ACT. THE HONBLE DELHI HIGH COURT NOTED THAT SINCE THE PROJECT OF THE ASSESSEE WAS APPROVED PRIOR TO 2005 I.E. BEFORE THE AMENDMENT WHICH INSISTED ON ISSUANCE OF COMP LETION CERTIFICATE BY THE END OF FOUR YEARS WAS BROUGHT INTO FORCE, THE CLAIM OF DEDUCTION COULD NOT BE DENIED FOR THE SAID REASON. THE CASE OF THE ASSESSEE BEFORE US IS FULLY COVERED BY THE RATIO OF THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF CHD DEVELOPERS LTD. (SUPRA). IN THIS BACKGROUND, WE THEREFORE FIND NO REASONS TO UPHOLD THE OBJECTION OF THE LOWER AUTHORITIES IN ORDER TO DISALLOWANCE CLAIMED U/S 80 - IB(10) OF THE ACT. 11. FACTUALLY SPEAKING, ASSESSEE HAS CONSISTENTLY CANVASSED B EFORE THE LOWER AUTHORITIES AS WELL AS BEFORE US THAT THE CONSTRUCTION OF THE PROJECT WAS COMPLETE IN ALL RESPECTS BY 31.03.2008. IN - FACT, BEFORE THE CIT(A) ASSESSEE ALSO POINTED OUT THAT IT HAD MADE AN APPLICATION TO THE PMC FOR ISSUANCE OF COMPLETION CE RTIFICATE BEFORE 31.03.2008. IT WAS, THUS, CONTENDED THAT THE CONSTRUCTION OF THE PROJECT WAS COMPLETE WITHIN THE STIPULATED PERIOD AND THE SAME SHOULD BE TAKEN AS A DUE COMPLIANCE WITH THE REQUIREMENTS OF CLAUSE (A) TO SECTION 80 - IB(10) OF THE ACT. WE F IND THAT THE LOWER AUTHORITIES HAVE REPRODUCED THE SUBMISSIONS OF THE ASSESSEE IN THIS REGARD IN THEIR RESPECTIVE ORDERS. THE ASSESSING OFFICER HAS REPRODUCED THE SUBMISSIONS OF THE ASSESSEE IN PARA 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS AL SO NOTED THAT ASSESSEE FURNISHED THE COPY OF ELECTRICITY BILLS AND POSSESSION DOCUMENTS IN RESPECT OF THE FLAT OWNERS, WHICH FORMED A PART OF WRITTEN SUBMISSIONS. ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 10 ASSESSEE HAD ASSERTED BEFORE THE ASSESSING OFFICER THAT THE PMC WAS LEVYING MUNICIPAL TAXES IN RESPECT OF EACH OF THE FLAT IN THE PROJECT AND SUCH LEVIES WERE IN THE NAME OF THE RESPECTIVE OWNERS. THE MSEB RECEIPTS AND POSSESSION DOCUMENTS WERE ALSO FURNISHED TO THE ASSESSING OFFICER. BEFORE THE CIT(A) ASSESSEE ALSO POINTED OUT THAT WHILE MAKIN G APPLICATION FOR ISSUANCE OF COMPLETION CERTIFICATE TO PMC, ASSESSEE HAD TAKEN ALL THE NECESSARY STEPS REQUIRED TO BE DONE BEFORE SEEKING THE COMPLETION CERTIFICATE, NAMELY, OBTAINING OF NOCS FROM VARIOUS DEPARTMENTS LIKE, FIRE DEPARTMENT, GARDEN DEPARTME NT, ENCROACHMENT DEPARTMENT, CONSTRUCTION AND DEVELOPMENT CONTROL DEPARTMENT, ETC.. ON THIS BASIS, IT WAS SOUGHT TO BE CONTENDED THAT THE NON - ISSUANCE OF THE COMPLETION CERTIFICATE BY THE PMC BEFORE 31.03.2008 WAS FOR REASONS BEYOND THE CONTROL OF THE ASS ESSEE. 12. WE FIND THAT ALL THE AFORESAID FACTUAL ASSERTIONS MADE BY THE ASSESSEE HAVE NOT BEEN CONTROVERTED EITHER BY THE ASSESSING OFFICER OR BY THE CIT(A). IN THE ABSENCE OF ANY MATERIAL TO CONTROVERT THE ASSERTIONS OF THE ASSESSEE THAT THE CONSTRUCTI ON WAS COMPLETED BEFORE THE STIPULATED DATED I.E. 31.03.2008, WE FIND NO REASONS TO BELIE THE SAME. THEREFORE, ON FACTS, THE POSITION CONSISTENTLY CANVASSED BY THE ASSESSEE TO THE EFFECT THAT THE CONSTRUCTION OF THE PROJECT WAS COMPLETE BEFORE THE STIPULA TED DATE OF 31.03.2008 HAS TO PREVAIL. WE HOLD SO. 14. THE TRIBUNAL IN TURN, RELYING ON THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN CIT VS. CHD DEVELOPERS LTD. (SUPRA) NOTED THAT WHERE THE PROJECT OF ASSESSEE WAS APPROVED PRIOR TO 2005 I.E. BE FORE AMENDMENT, WHICH INSISTED OF ISSUANCE OF COMPLETION CERTIFICATE BY THE END OF FOUR YEARS WAS BROUGHT INTO FORCE , THE CLAIM OF DEDUCTION IN SUCH CASES COULD NOT BE DENIED FOR THE SAID REASON. 15. SINCE THE ISSUE ARISING IN THE PRESENT APPEAL BEFORE US IS SIMILAR TO THE ISSUE BEFORE THE HONBLE DELHI HIGH COURT IN CIT VS. CHD DEVELOPERS LTD. (SUPRA) , WH ICH IN TURN, HAS BEEN RELIED BY THE PUNE BENCH OF TRIBUNAL IN RUNWAL DEVELOPERS VS. ACIT (SUPRA) , W E FIND NO REASON IN THE DISALLOWANCE MADE BY THE AUT HORITIES BELOW IN DENYING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT . THE ASSESSEE BEFORE US HAS FURNISHED EVIDENCE TO THE EFFECT THAT THE INDIVIDUAL FLAT OWNERS HAVE OCCUPIED THE RESPECTIVE FLATS, AGAINST WHICH MUNICIPAL TAXES HAVE BEEN LEVIED BY THE ST ATE AUTHORITIES AND EVEN ELECTRICITY CONNECTIONS HAVE BEEN MADE TO THE FLATS, AGAINST WHICH THE CHARGES HAVE BEEN PAID. FURTHER, THE ASSESSEE HAD APPLIED FOR COMPLETION CERTIFICATE BEFORE DUE DATE I.E. 17.03.2008 AND MERELY BECAUSE THE COMPLETION CERTIFIC ATE WAS NOT RECEIVED BY THE ITA NO S . 2238 TO 2240 /PN/201 2 AMRUTLAL HASSANAND PAMNANI 11 ASSESSEE, THE DEDUCTION ALLOWABLE UNDER SECTION 80IB(10) OF THE ACT CANNOT BE DENIED. WE HOLD SO. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF ASSESSEE IN THIS REGARD. THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS THUS, ALLOWED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 1 6 . THE FACTS AND ISSUE IN ITA NOS. 2238 & 2239/PN/2012 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO.2240/PN/2012 AND OUR DECISION IN ITA NO.2240/PN/2 012 SHALL APPLY MUTATIS MUTANDIS TO ITA NOS.2238 & 2239/PN/2012. 1 7 . IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER P RONOUNCED ON THIS 7 TH DAY OF APRIL , 201 6 . SD/ - SD/ - SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 7 TH APRIL , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE AP PELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - III , PUNE ; 4. / THE CIT - IV, PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE