ACIT, New Delhi V. M/s Surendra Developers, Bhopal

ITA 2745/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65235 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 03-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 04-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTY
• Assessee Lawyers: MANOJ AYACHIT
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NOS.2743 TO 2745/DEL/2010 ASSESSMENT YEARS : 2004-05 TO 2006-07 ACIT, CIRCLE 27(1), ROOM NO.218, D BLOCK, VIKAS BHAWAN, NEW DELHI. VS. SURENDRA DEVELOPERS, C-47, NARYANA VIHAR, NEW DELHI & 240, ZONE-1, M.P. NAGAR, BHOPAL. PAN : AAWFS1669R ITA NOS.3056 TO 3058/DEL/2010 ASSESSMENT YEARS : 2004-05 TO 2006-07 SURENDRA DEVELOPERS, C-47, NARYANA VIHAR, NEW DELHI & 240, ZONE-1, M.P. NAGAR, BHOPAL. PAN : AAWFS1669R VS. ACIT, CIRCLE 27(1), ROOM NO.218, D BLOCK, VIKAS BHAWAN, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANOJ AYACHIT, ADVOCATE REVENUE BY : SMT. SRUJANI MOHANTY, SR.DR ORDER PER A.D. JAIN, JUDICIAL MEMBER ITA NOS. 2743 TO 2745/DEL/2010 ARE DEPARTMENTAL APP EALS FOR A.Y. 2004-05 TO 2006-07 INVOLVING ONE SINGLE ISSUE, I. E., ALLOWABILITY OF DEDUCTION U/S 80IB (10) OF THE IT ACT, 1961. 2. THE ASSESSEE IS A PARTNERSHIP FIRM. IT DEVELOPED A RESIDENTIAL HOUSING PROJECT BY THE NAME OF SURENDRA ESTATE AT C HUNA BHATTI, BHOPAL. THE ASSESSEE GOT THE APPROVAL FOR THE PROJECT FROM BHOPAL ITA NOS.2743 TO 2745/DEL/2010 ITA NOS.3056 TO 3058/DEL/2010 2 MUNICIPAL CORPORATION ON 07.05.2003. THE PROJECT W AS STARTED IN F.Y.2003-04, RELEVANT TO A.Y.2004-05. IT WAS COMPLE TED IN F.Y. 2005-06 RELEVANT TO A.Y. 2006-07. AS PER THE SUBMISSIONS PLACE D ON RECORD AND THE ARGUMENTS MADE BEFORE US, ALL UNITS OF THE PROJECT WERE SOLD IN F.Y.S 2003-04 TO 2005-06. 3. FOR A.Y. 2004-05, THE ASSESSEE CLAIMED DEDUCTION U/S 80IB (10) OF THE ACT FOR THE FIRST TIME. THE SAME WAS ALLOWED B Y THE ASSESSING OFFICER VIDE AN ORDER PASSED U/S 143(3) OF THE ACT. F OR A.Y. 2006-07 ALSO, THE DEDUCTION CLAIMED WAS GRANTED, THOUGH U/S 14 3(1) OF THE ACT. FOR A.Y. 2006-07, HOWEVER, THE CLAIM OF THE ASSESSEE FO R DEDUCTION U/S 80IB (1) OF THE ACT WAS DISALLOWED BY THE ASSESSING OFFIC ER, OBSERVING THAT THE ASSESSEE HAD FAILED TO COMPLY WITH THE PROVISIO NS OF SECTION 80IB (10) (A)(I) OF THE ACT, REGARDING ISSUANCE OF C OMPLETION CERTIFICATE BEFORE 31.03.2008. SUBSEQUENTLY, THE CASES FOR A.Y.S 2 004-05 TO 2005- 06 WERE RE-ASSESSED AND THE DEDUCTION CLAIMED BY THE ASSE SSEE WAS DISALLOWED. 4. THE LD. CIT (A), ON APPEAL BY THE ASSESSEE FOR ALL THE THREE YEARS, PASSED A COMPOSITE ORDER DATED 29.03.2010 AND GRANTED RELIEF TO THE ASSESSEE OBSERVING, INTER ALIA , AS FOLLOWS:- THE A.O. HAD NOT DISPUTED THE FACT THAT THE APPELLANT HAS NOT APPLIED FOR COMPLETION CERTIFICATE ON 26.11.2007. HER E, THE ASSESSEE COULD NOT BE HELD RESPONSIBLE FOR NON ISSUA NCE OF THE COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY. IMPOS SIBLE CANNOT BE REQUIRED TO BE PERFORMED BY A PERSON ESPECIALLY W HEN THING IS BEYOND HIS CONTROL. THE ASSESSEE COULD NOT BE PU NISHED FOR SUCH ACT WHICH IS BEYOND HIS CONTROL. THE DOCUMENTS MENTIONED IN PARA 5.7.1 ABOVE ESTABLISH THAT THE ASSESSEE HAD COM PLETED THE CONSTRUCTION OF THE PROJECT BEFORE 31.03.2008. THE ASSESSEE HAD ALSO APPLIED FOR THE COMPLETION CERTIFICATE, BUT I T COULD NOT GET THE COMPLETION CERTIFICATE WITH IN THE STATUTORY TIME PRESCRIBED IN THE SECTION OF 301 OF MADHYA PRADESH N AGAR PALIKA ADHINIYAM. THE WORD ISSUED HAS BEEN USED IN THE I T ACT FOR THE COMPLETION CERTIFICATE AND NOT THE WORD OBTAINED BY THE ASSESSEE. AS THE LEGISLATURE HAD ALREADY ANTICIPATED S UCH HARDSHIPS OF THE ASSESSEE AND THAT IS WHY THE WORK ISSU ED BY ITA NOS.2743 TO 2745/DEL/2010 ITA NOS.3056 TO 3058/DEL/2010 3 THE CORPORATION HAS BEEN USED. IN THIS CASE THERE IS N O REFUSAL FOR ISSUANCE OF THE COMPLETION CERTIFICATE BY THE COMMI SSIONER OF MUNICIPAL CORPORATION TILL 31.03.2008, THEREFORE, IT IS HEREBY HELD THAT THE PROJECT OF THE ASSESSEE IS DEEMED TO BE COM PLETED AND COMPLETION CERTIFICATE IS DEEMED TO HAVE BEEN ISS UED BY 31.03.2008, KEEPING IN VIEW (I) THE SUBMISSION OF THE AR, (II) ABSENCE OF ANY CONTRARY MATERIAL BROUGHT ON THE RECORDS BY THE A.O. AND (III) PROVISIONS OF SECTION 301(4) OF THE M ADHYA PRADESH NAGAR PALIKA NIGAM ADHINIYAM. HOWEVER LATER ON, THE CORPORATION ISSUED THE COMPLETION CERTIFICATE ON 02.06 .2009. HERE, THERE IS NO DISPUTE REGARDING THE APPELLANT COMPL YING WITH THE ELIGIBILITY CONDITIONS REQUIRED FOR CLAIMING DEDU CTION U/S 80IB (10) AND ONLY CONTENTION OF THE A.O. FOR REJECTING THE CLAIM OF APPELLANT IS THAT THERE IS NO COMPLETION CERTIFICATE ISSUE D BY THE CORPORATION. TAKING INTO ACCOUNT THE FACT THAT THE A.O. H AS NOT DISPUTED THE ELIGIBILITY OF THE APPELLANT FOR CLAIMING THE DEDUCTION AND FURTHER IN VIEW OF THE FACT THAT THERE IS DEEMING COMPLETION CERTIFICATE ISSUED BY THE CORPORATION AS DI SCUSSED ABOVE, IT IS HEREBY HELD THAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S 80IB (10). 5. AGGRIEVED, THE DEPARTMENT IS IN APPEAL. 6. CHALLENGING THE IMPUGNED ORDER, THE LD. DR HAS CO NTENDED THAT THE CIT (A) WAS NOT JUSTIFIED IN ALLOWING THE DEDUCTI ON U/S 80IB(10) OF THE ACT TO THE ASSESSEE BY DEEMING THAT THE COMPLETION CERTIFICATE WAS ISSUED TO THE ASSESSEE BY 31.03.2008, IGNORING THE OBSERVA TIONS OF THE ASSESSING OFFICER THAT THE COMPLETION CERTIFICATE WAS FI LED MUCH LATER. RELIANCE HAS BEEN SOUGHT TO BE PLACED ON THE EXPLANAT ION TO SECTION 80IB (10) OF THE ACT, AS PER WHICH, THE PROVISIONS OF SECTION 80IB (10) SHALL APPLY TO ANY UNDERTAKING WHICH EXECUTES THE HOU SING PROJECT AS A WORKS CONTRACT AWARD BY ANY PERSON. 7. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS CONTENDED THAT THE ASSESSEE DULY FULFILLED ALL THE COND ITIONS OF SECTION 80IB (10) OF THE ACT AND IT WAS ONLY THEREFORE, THA T THE LD. CIT (A) GRANTED RELIEF TO THE ASSESSEE. IT HAS BEEN CONTENDED TH AT FINANCE (NO.2) BILL, 2004 BROUGHT IN AN AMENDMENT IN THE AC T BY SUBSTITUTING THE THEN EXISTING SECTION 80IB (10) BY A NEW SUB-SECT ION W.E.F. 01.04.2005. IT HAS BEEN SUBMITTED THAT THE SAID AMEND MENT IS ITA NOS.2743 TO 2745/DEL/2010 ITA NOS.3056 TO 3058/DEL/2010 4 APPLICABLE FOR AND FROM A.Y. 2005-06. IT HAS BEEN A RGUED THAT THE ASSESSEE HAD COMPLETED THE CONSTRUCTION OF ITS PROJECT B EFORE 31.03.08, DETAILS WHEREOF WERE DULY SUBMITTED TO THE ASSESSING OFFICER. IT HAS BEEN STATED THAT THE ASSESSEE HAD APPLIED TO THE LOCAL AUTHORITY FOR ISSUANCE OF COMPLETION CERTIFICATE ON 26.11.2007, BUT THE SAID CERTIFICATE WAS ISSUED TO THE ASSESSEE ONLY ON 02.06.2009. IT HAS BEEN AVERRED THAT THE MATTER IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL RENDERED ON 09.12.20 11, IN ITA NOS.2417/DEL/2011 TO 2422/DEL/2011 (COPY PLACED ON R ECORD) IN THE CASE OF M/S GIRIJA COLONISERS, A SISTER CONCERN OF THE ASSESSEE FIRM. IT HAS BEEN CONTENDED THAT SINCE THE FACTS OF THE PRESENT CASE ARE EXACTLY SIMILAR TO THOSE IN THE CASE OF M/S GIRIJA COL ONISERS (SUPRA) THE SAID DECISION OF THE TRIBUNAL IS DIRECTLY APPLICAB LE HERETO. 8. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MAT ERIAL ON RECORD. THE FACTS ARE NOT DISPUTED. THE ISSUE IS AS TO WHETHER THE LD. CIT (A) HAS CORRECTLY GRANTED RELIEF TO THE ASSESSEE. 9. THE LD. CIT (A), IT IS SEEN, HAS GRANTED RELIEF TO THE ASSESSEE ON THE BASIS OF THE FACT THAT THOUGH THE ASSESSEE HAD APPLIE D FOR COMPLETION CERTIFICATE BEFORE THE LOCAL AUTHORITY I N TIME, THE SAID CERTIFICATE WAS NOT ISSUED IN TIME BY THE LOCAL AUTHOR ITY. SUCH ISSUANCE OF COMPLETION CERTIFICATE HAS BEEN HELD AND, IN OUR OPINION, CORRECTLY SO, TO BE BEYOND THE CONTROL OF THE ASSESSEE. 10. IN M/S GIRIJA COLONISERS (SUPRA), THE CASE OF A SIST ER CONCERN OF THE ASSESSEE FIRM, UNDER SIMILAR FACTS, THE TRIBUNAL HAS H ELD, INTER ALIA , AS FOLLOWS:- 9. IN THE PRESENT CASE, THE ASSESSEE VIDE APPLICATION DATED 26.11.2007 HAS REQUESTED THE MUNICIPAL CORPORATION FOR ISSUANCE OF COMPLETION CERTIFICATE IN RESPECT OF HOUS ING PROJECTS NAMED AS SURENDRA ENCLAVE SURENDRA VIHAR PHASE-I AND SURENDRA GARDEN COMPLETED BY THE ASSESSEE. THE MUN ICIPAL ITA NOS.2743 TO 2745/DEL/2010 ITA NOS.3056 TO 3058/DEL/2010 5 CORPORATION HAD ISSUED THE COMPLETION CERTIFICATE ON 18.06.2010, 23.06.2010 AND 24.06.2010 IN RESPECT OF PERMISSION NO. 3737/27.03.2001, 299/04.09.1999 AND 580/02.11.1 999 RESPECTIVELY. THE AO IN HIS REMAND REPORT DATED 08.0 2.2011 HAS STATED THAT AN ENQUIRY WAS MADE FROM THE CITY PLANNER, BH OPAL MUNICIPAL CORPORATION, WHO HAS REPORTED THAT THE ASSESSE E SUBMITTED APPLICATION FOR COMPLETION CERTIFICATE IN RESP ECT OF ITS HOUSING PROJECTS ON 26.11.2007, THE ASSESSEE M/S GIRI JA COLONISERS HAD COMPLIED WITH ALL THE FORMALITIES AND T HE MUNICIPAL CORPORATION HAS TO CARRY OUT INSPECTION OF A LL THE CONSTRUCTED UNITS BEFORE ISSUING COMPLETION CERTIFICATE, AND M/S GIRIJA COLONISERS HAD GIVEN POSSESSION OF MOST OF THE UNITS BEFORE SUBMITTING THE APPLICATION FOR COMPLETION CERTIF ICATE, AS A RESULT OF WHICH IT TOOK TIME FOR INSPECTION. IN THE LIGH T OF THE FACTS NARRATED IN AOS REMAND REPORT AND FACTS AVAILABL E ON RECORD, THE LD. CIT(A) HAS TAKEN A VIEW THAT THE ASSESSE E HAS COMPLETED THE CONSTRUCTION MUCH PRIOR TO 31.03.2008 AN D HAD FULFILLED ALL REQUIREMENTS/FORMALITIES OF THE COMPLETI ON CERTIFICATE AS NOTIFIED BY THE CORPORATION AT THE TIME OF FILLING APP LICATION FOR ISSUANCE OF 36 COMPLETION CERTIFICATE ON 26.11.200 7. THE LD. CIT(A) HAS ALSO RECORDED A FINDING THAT SALES OF ALL RESIDENTIAL UNITS IN RESPECT OF THREE PROJECTS WERE MATERIALIZED ON OR BEFORE 31.03.2008. THE MUNICIPAL AUTHORITY HAS NOT POINTED OU T ANY DEFECT AND IRREGULARITY IN THE ASSESSEES APPLICATION DATED 26.11.2007 SUBMITTED FOR ISSUANCE OF COMPLETION CERTIF ICATE OF ALL THE SAID PROJECTS. THEREFORE, IN THE LIGHT OF FAC TS FOUND BY THE LD. CIT(A) AND REASONS GIVEN BY HIM, AND RESPECTFULL Y FOLLOWING THE AFORESAID DECISION OF ITAT, PUNE BENCH B, PUNE IN THE CASE OF HINDUSTAN SAMUHA AWAS LTD. (SUPRA), WE DO NOT FIND ANY REASON TO TAKE A VIEW OTHER THAN THE VIEW TAKEN BY THE LEA RNED CIT(A) IN THE PRESENT CASE. WE, THEREFORE, UPHOLD THE ORDER OF THE LEARNED CIT(A) AND DISMISS ALL THESE APPEALS FILE D BY THE REVENUE. 11. GIRIJA COLONISERS (SUPRA) (CO-AUTHORED BY ONE OF US THE HONBLE VICE PRESIDENT), IT IS SEEN, IS ON FACTS EXACTLY SIMILAR TO THOSE PRESENT BEFORE US. IN THAT CASE, THE ISSUE IN THE PRESEN T CASE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THUS, RESPECTFULLY FO LLOWING GIRIJA COLONISERS (SUPRA), THE GRIEVANCE SOUGHT TO BE ADDRESSE D BY THE DEPARTMENT IS FOUND TO BE DEVOID OF FORCE AND IS REJE CTED. 12. AS SUCH, ALL THE THREE APPEALS FILED BY THE DEPART MENT ARE DISMISSED. ITA NOS.2743 TO 2745/DEL/2010 ITA NOS.3056 TO 3058/DEL/2010 6 ITA NOS.3056 TO 3058/DEL/2010 13. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AGAINST TH E AFORE- DISCUSSED THREE APPEALS PREFERRED BY THE DEPARTMENT. T HE LD. COUNSEL FOR THE ASSESSEE HAS STATED AT THE BAR THAT THESE APPEALS A RE NOT PRESSED. 14. DISMISSED AS NOT PRESSED. 15. IN THE RESULT, ALL THE THREE APPEALS FILED BY THE DEPARTMENT ARE DISMISSED, WHEREAS ALL THE THREE APPEALS INSTITUTED BY TH E ASSESSEE ARE DISMISSED AS WITHDRAWN. THE ORDER PRONOUNCED IN THE OPEN COURT ON 01.08.20 12. SD/- SD/- [G.D. AGRAWAL] [A.D. JAIN] VICE PRESIDENT JUDICIAL MEMBER DATED, 01.08.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES