EXCEL REALITY, ULHASNAGAR V. PR CIT 3, THANE

ITA 2807/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8029 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 19-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Keywords: Difference of opinion; Competent authority; Change of opinion
• Section: 143(3); 142(1); 80IB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E, MU MBAI BEFORE SHRI P.K. BANSAL, VICE-PRESIDENT AND SHRI PA WAN SINGH, JUDICIAL MEMBER ITA NO. 2807/MUM/2017 (ASSESSMENT YEAR-2012-13) M/S EXCEL REALITY SHOP NO.1, JETHANAND APARTMENT, NEAR UMC, ULHASNAGAR- 421003 PAN: AACFE8775G VS. PCIT-3, ASHAR IT PARK, A WING, 6 TH FLOOR, ROAD NO. 16Z, WAGLE INDUSTRIAL ESTATE, THANE-400604. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. GOPAL (AR) REVENUE BY : SHRI MANJUNATHA SWAMY (DR) DATE OF HEARING : 31.10.2017 DATE OF PRONOUNCEMENT : 20.12.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE U/S 253 OF THE INCOME-TAX A CT (THE ACT) IS DIRECTED AGAINST THE ORDER LD. PCIT-3, THANE DATED 31.03.2017 PASSED UNDER SECTION 263 OF THE ACT FOR ASSESSMENT YEAR (AY) 201 2-13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX-3, THANE (THE PR. CIT') ERRED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT AND THEREBY SE T-ASIDE THE ORDER PASSED BY THE INCOME 'TAX OFFICER WARD 2(1), KALYAN (THE AO' ) U/S. 143(3) OF THE ACT DATED MARCH 30 TH , 2015 (THE ORDER') ON THE ALLEGED GROUND THAT THE ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE PR. CIT FAILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT: (A) THE AO HAS EXAMINED THE ISSUE AFTER THROUGH VER IFICATION AND ENQUIRY DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND TAK EN A CORRECT VIEW THAT ITA NO. 2807/M/2017- M/S EXCEL REALITY 2 GRAM PANCHAYAT ADAI IS A LOCAL AUTHORITY SO FOR AS THE ASSESSEE'S HOUSING PROJECT IS CONCERNED; (B) THE PR. CIT HAS ACCEPTED THE FACT THAT GRAM PAN CHAYAT, ADAI IS AUTHORITY TO ACCORD THE APPROVAL; (C) THE PERMISSION OBTAINED BY THE APPELLANT FROM D ISTRICT COLLECTOR, RAIGAD WAS N.A CUM SANCTION OR HOUSING PROJECT AS P ER RULES OR REAL ESTATE DEVELOPMENT PROJECT FOR RAIGAD DIST.; (D) THE PR. CIT HAS ACCEPTED THE FACT THAT THE PROJ ECT WAS CONSTRUCTED IN ACCORDANCE WITH THE LAW; (E) THE NAGAR/ GRAM PANCHAYAT ARE LOCAL AUTHORITIES UNDER THE INCOME TAX ACT, AS WELL AS CONSTITUTION OF INDIA; (F) THE APPROVED SANCTIONED PLAN WAS SUBMITTED, VER IFIED AND ACCEPTED BY THE A.O; (G) THE PR. CIT HAS NOT POINTED OUT ANY SINGLE DEFE CT FROM THE DETAILS AND DOCUMENTS SUBMITTED TO THE SATISFACTION OF THE A.O AND AS PER THE CONDITIONS LAID DOWN U/S 80IB(10); (H) IN ABSENCE OF ORDER BEING ERRONEOUS AND ALSO PR EJUDICIAL TO THE INTEREST OF THE REVENUE, ORDER U/S.143(3) OF THE ACT COULD N OT BE SET-A SIDE ON MERE SUSPICION, HYPOTHETICAL/NOTIONAL ASSUMPTIONS/PRESUM PTIONS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE ORDER PASSED U/S 263 IS MERELY THE CHANGE OF OPINION AND THE ASSESSM ENT ORDER PASSED BY THE AO AFTER APPLICATION OF MIND IS NEITHER ERRONEOUS N OR PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY THE ACTION OF THE PR. CIT IN INVOKING PROVISIONS OF SECTION 263 OF THE ACT AND SET- A SID ING THE ORDER BE HELD AB- INITIO AND/ OR OTHERWISE VOID AND BAD-IN-LAW. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE PR. CIT ERRED IN NOT PASSING A SPEAKING ORDER AGAINST THE SUBMISSION S OF YOUR APPELLANT AND RAISED A NEW GROUND WHICH WAS NOT MENTIONED IN THE SHOW CAUSE NOTICE FOR INITIATING ACTION U/S. 263 OF THE INCOME TAX, 1961. AS SUCH THE ORDER PASSED U/S. 263 IS VOID AB INITIO. THE ACTION OF PR. CIT W AS WHOLLY UNREASONABLE, UNCALLED FOR AND BAD IN LAW. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE PR. CIT ERRED IN GIVING DIRECTIONS TO CONDUCT DETAILED ENQUIRES REGA RDING THE ELIGIBILITY OF CLAIM OF DEDUCTION U/S. 80IB(10) TO THE AO IN VIEW OF THE PROVISIONS OF MAHARASHTRA REGIONAL AND TOWN PLANNING ACT, 1966 AN D CIRCULAR DATED 16/09/1998 ISSUED BY THE DISTRICT COLLECTOR, RAIGAD BY IGNORING THE FACT THAT THE CONSTRUCTION PERMISSIONS WERE SOUGHT FROM DISTR ICT COLLECTOR, RAIGAD AS PER REAL ESTATE DEVELOPMENT RULES, REGULATIONS, PRO CEDURE AND REQUIREMENTS AND SUCH DIRECTIONS ARE UNTENABLE, ULTRA VIRES, BEY OND THE JURISDICTION AND OTHERWISE BAD IN LAW. 6. FOR THE FACT AND IN THE CIRCUMSTANCES OF THE CAS E THE ORDER PASSED BY THE COMMISSIONER U/S 263 BE QUASHED AND CANCELLED AND O RDER OF AO DATED 30/03/2015 PASSED U/S 143(3) FOR AY 2012-13 BE REST ORED. ITA NO. 2807/M/2017- M/S EXCEL REALITY 3 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER. THE ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 24.09.2012 DECLARING NIL INCOME. THE ASSESSEE CL AIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT FOR RS. 14,29,60,523/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 30.03.2015. THE A O ACCEPTED THE EXEMPTION CLAIMED BY ASSESSEE AND PASSED THE FOLLOW ING ORDER: 3. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER AND CARRIES ON THE BUSINESS UNDER THE NAME AND STYLED A S M/S EXCEL REALITY. DURING THE CONSIDERATION YEAR THE ASSESSEE FIRM DEVELOPING AND CONSTRUCTING A HOUSING PROJECT NAME SATYA JYOT BEARING SURVEY NO. 146, HIS SA NO. 3, 4 5B AT ADAI VILLAGE, TAL-PANVEL, DIST-RAIGAD TOTALLY ADMEASURIN G ABOUT 5940 SQ. MTRS. IN THIS PROJECT THE ASSESSEE FIRM HAS CONSTRUCTED 11 BUILDI NGS VIZ. A TO K. DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS SHOWN TOTAL TURNOV ER OF RS. 21,47,95,000/-. AFTER CLAIMING VARIOUS EXPENSES, NET PROFIT HAS BEEN SHOW N AT RS. 14,29,60,532/-. THE ASSESSEE HAS CLAIMED ENTIRE PROFIT AS EXEMPT U/S 80 IB(10) OF THE I.T. ACT, 1961. IN SUPPORT OF THIS CLAIM THE ASSESSEE FILED FORM NO. 1 0CCB CERTIFIED BY THE AUDITORS. 3. THE ASSESSMENT ORDER PASSED BY AO WAS REVISED BY LD . PCIT UNDER SECTION 263 OF THE ACT ON 31.03.2007 HOLDING THAT ASSESSMEN T ORDER PASSED BY AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. THE ASSESSMENT ORDER WAS SET-ASIDE WITH THE DIRECTION TO AO TO PASS THE FRESH ASSESSMENT ORDER AFTER CONDUCTING DETAILED QUERIES REGARDING THE ELI GIBILITY OF CLAIM OF DEDUCTION UNDER SECTION 80IB. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENU E AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASS ESSEE ARGUED THAT ORDER PASSED BY AO IS NEITHER ERRONEOUS NOR PREJUDICIAL T O THE INTEREST OF REVENUE. DURING THE ASSESSMENT PROCEEDING, THE AO EXAMINED T HE ISSUE BY MAKING ITA NO. 2807/M/2017- M/S EXCEL REALITY 4 THOROUGH ENQUIRY AND TAKEN A CORRECT VIEW THAT GRAM PANCHYAT, AADAI IS A LOCAL AUTHORITY SO FAR AS ASSESSEES HOUSING PROJEC T IS CONCERNED. THE ASSESSEE OBTAINED NECESSARY PERMISSION FROM GRAM PA NCHYAT. THE PROJECT UNDERTAKEN BY ASSESSEE FULFILLED ALL CONDITION AND CRITERIA PRESCRIBED UNDER SECTION 80IB. THE ORDER PASSED BY LD. PCIT IS MEREL Y CHANGE OF OPINION. THE AO PASSED THE ORDER AFTER DUE APPLICATION OF MI ND AND ACCEPTED THE CLAIM REGARDING THE ELIGIBILITY UNDER SECTION 80IB OF THE ACT. THE ORDER PASSED BY LD. PCIT IS BAD-IN-LAW. THE LD. AR OF THE ASSESSEE FURTHER ARGUED THAT DURING THE ASSESSMENT PROCEEDING, THE AO VIDE NOTICE DATED 27.11.2014 REQUIRED DETAILED OF THE PROJECTS. THE COPY OF NOTI CE UNDER SECTION 142(A) DATED 27.11.2014 ALONG WITH ITS ANNEXURE IS PLACED ON RECORD) (PAGE NO. 94 TO 97 OF PAPER BOOK). THE ASSESSEE FILED HIS REPLY VIDE REPLY DATED 02.12.2014 FURNISHING THE COMPLETE DETAILS OF HOUSI NG PROJECT UNDERTAKEN BY THE ASSESSEE CONSISTING OF BUILDING WISE DETAILS, Y EAR WISE, COST OF CONSTRUCTION, COPY OF LAND PURCHASE AGREEMENT, COPY OF COMMENCEMENT, COMPLETION CERTIFICATE ALONG WITH SANCTION PLAN AND AUDITORS REPORT. THE COPIES OF ALL THOSE DOCUMENTARY EVIDENCE ARE ALSO P LACED ON RECORD (PAGE NO. 98 TO 102 OF PAPER BOOK). THE AO ISSUED A NOTIC E UNDER SECTION 142(1) DATED 20.02.2015 FOR SEEKING DETAILS OF APPROVED PL AN OF THE HOUSING PROJECT UNDERTAKEN BY ASSESSEE BY LOCAL AUTHORITY FOR CLAIM ING DEDUCTION UNDER SECTION 80IB. THE ASSESSEE FURNISHED THE DETAILED R EPLY VIDE REPLY DATED 27.02.2015. THE AO AFTER CONSIDERING THE REPLY AND HIS SATISFACTION PASSED ITA NO. 2807/M/2017- M/S EXCEL REALITY 5 THE ASSESSMENT ORDER ACCEPTING THE ELIGIBILITY OF A SSESSEE UNDER SECTION 80IB. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF T HE ASSESSEE RELIED UPON THE DECISION OF NAGPUR TRIBUNAL IN ITA NO. 35 & 36/ NAG/2014 IN ITO VS. M/S SWAPNASHILP DEVELOPERS DATED 24.11.2015, DECISI ON OF PUNE TRIBUNAL IN HIRAMAN NIVRUTTI BHUJBAL VS. ITO IN ITA NO. 667/ PN/2013 DATED 27.05.2014 AND THE DECISION OF JURISDICTIONAL HIGH COURT IN PCIT VS. M/S SWAPNASHILP DEVELOPERS IN ITA NO. 25 & 26/2016 DATE D 24.10.2016. THE LD. AR OF THE ASSESSEE SUBMITS THAT IN ALL THE DECI SIONS, THE GRAM PANCHYAT WAS HELD TO BE AUTHORITY COMPETENT TO ISSUE APPROVA L AND COMPLETION CERTIFICATE FOR HOUSING PROJECT FOR CLAIM UNDER SEC TION 80IB(10). THE HONBLE BOMBAY HIGH COURT IN PCIT VS. SWAPNASHILP D EVELOPERS HAS DISMISSED THE APPEAL OF THE REVENUE HOLDING THAT GR AM PANCHAYAT, BESA WAS COMPETENT FOR APPROVAL FOR HOUSING PROJECT FOR THE CLAIM OF PROVISION OF SECTION 80IB. ON THE OTHER HAND THE LD DR FOR THE R EVENUE RELIED ON THE ORDER OF LD PCIT. IT WAS ARGUED THAT GRAM PANCHYAT AADAI IS NOT COMPETENT TO APPROVE THE SANCTION PLAN AND THE SAME IS NOT TH E AUTHORITY COMPETENT SUCH SANCTION AND COMPLETION PLAN. THE LD DR PRAYED FOR DISMISSAL OF THE APPEAL. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. DURING THE ASSESSMENT PROCEEDING, THE AO ISSUED NOTICE UNDER SECTION 142(1) DATED 27. 11.2014 WHEREIN THE AO MADE THE ENQUIRY RELATED WITH THE PROJECT UNDERTAKE N BY THE ASSESSEE WITH ITA NO. 2807/M/2017- M/S EXCEL REALITY 6 REGARD TO AREA OF PROJECT, DATE OF APPROVAL OF PROJ ECT FROM LOCAL AUTHORITY, DATE OF COMMENCEMENT, DATE OF COMPLETION OF THE PRO JECT AND IF THE PROJECT IS COVERED UNDER SECTION 80IB(10). THE AO ALSO MADE THE ENQUIRY RELATED TO SIZE OF RESIDENTIAL UNIT, COMMERCIAL AREA IN PROJEC T, NATURE OF LAND HOLDING, COMMENCEMENT CERTIFICATE FROM APPROPRIATE AUTHORITY UNDER WHOSE JURISDICTION WORK WAS CARRIED OUT ALONG WITH COPY O F PLAN AND REVISED PLAN, PROOF OF LAND HOLDING AND TOTAL PROPOSED CONSTRUCTI ON ALONG WITH RETURN OF INCOME FILED FOR AY 2011-12 AND 2013-14 WITH BALANC E-SHEET, COMPUTATION OF INCOME AND AUDITORS REPORT. THE ASSESSEE FURNIS HED ITS REPLY VIDE REPLY DATED 02.12.2014. THE ASSESSEE IN ITS REPLY FURNIS HED THE INFORMATION RELATED WITH TOTAL AREA OF THE PROJECT WHICH IS 594 0 SQ. METER I.E. 1.5 ACRES (APPROXIMATELY), DATE OF APPROVAL OF THE PROJECT ON 29.03.2007 AND DATE OF COMPLETION OF PROJECT DATED 05.03.2012. THE ASSESSE E PROVIDED THE DETAILS OF BUILT-UP AREA, COPY OF LAND PURCHASE AGREEMENTS, CO MMENCEMENT AND COMPLETION CERTIFICATE ALONG WITH COPY OF PLAN, RET URN OF INCOME FOR AY 2011-12 AND 2012-13 AND AUDITORS REPORT. THE AO AF TER CONSIDERING THE REPLY AND THE DOCUMENTARY EVIDENCE FURNISHED BY ASS ESSEE ALLOWED THE CLAIM OF ASSESSEE UNDER SECTION 80IB IN THE ASSESSM ENT ORDER PASSED ON 30.03.2015. THE AO GRANTED THE DEDUCTION UNDER SECT ION 80IB(10). IN OUR VIEW, THE AO HAS MADE A SUFFICIENT ENQUIRY BEFORE P ASSING THE ASSESSMENT ORDER. ITA NO. 2807/M/2017- M/S EXCEL REALITY 7 6. THE CO-ORDINATE BENCH OF NAGPUR TRIBUNAL IN CASE OF ITO VS. M/S SWAPNASHILP DEVELOPERS DATED 24.11.2015(SUPRA) HELD THAT DEVELOPMENT PLAN SANCTIONED BY GRAM PANCHAYAT, BESA, NAGPUR IS COMPETENT TO ISSUE SANCTION PLAN WITHIN THE LIMIT OF GRAM PANCHAYAT. T HE TRIBUNAL RELIED UPON THE EARLIER DECISION NAGPUR BENCH IN CASE OF ACIT V S. CHINTAMONI BUILDERS WHEREIN IT WAS HELD THAT VILLAGE PANCHYAT IS A LOCA L AUTHORITY AND COMPETENT TO APPROVE THE HOUSING PROJECT. THE RELEVANT PORTIO N OF THE DECISION IS EXTRACTED BELOW. 7. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. THE A SSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPMENT OF REAL ESTATE. THE ASSESSEE HAS ENTERED INTO A DEVELOPMENT AGREEMENT AND BY VIRTUE OF THE SAID AGREEMENT OBTAINED DEVELOPMENT RIGHTS TO DEVELOP THE ENTIRE P IECE OF LAND BEARING NO.28 TO 41, 44 TO 55 AND 58 TO 69 IN KHASARA NO.3812, 38 /3 ADMEASURING 45513.47 SQ. FT. THE DEVELOPMENT PLAN WAS SANCTIONED BY GRAM PANCHAYAT, BESA, NAGPUR. THE PRELIMINARY ISSUE AS RAISED BY THE AO W AS THAT WHETHER THE GRAM PANCHAYAT IS A LOCAL AUTHORITY OR NOT. ON THIS ISSUE, THE LEARNED CIT (A) HAS DISCUSSED AT LENGTH THE FACTUAL AS WELL AS LEGA L ASPECTS. THE SAID COMPLETION CERTIFICATES WERE ANNEXED IN THE COMPILA TION. IN ONE OF THE CERTIFICATES, IT WAS MENTIONED THAT THE PERMISSION FOR CONSTRUCTION WAS GRANTED AND THE GRAM PANCHAYAT TAX HAD ALSO BEEN DEPOSITED. THE ASSESSEE HAS ALSO PLACED ON RECORD A DETAILED MAP OF THE PLOTS WHICH WERE DEVELOPED AND INFORMED THAT THE SAID DEVELOPMENT PLAN WAS ALSO SA NCTIONED BY THE AUTHORITY. OUR ATTENTION HAS ALSO BEEN DRAWN ON THE BOMBAY VIL LAGE PANCHAYAT ACT, 1958 WHICH HAS PROVIDED THAT SANCTION OF CONSTRUCTI ON OF BUILDING WITHIN THE LIMITS OF VILLAGE HAS TO BE GRANTED BY THE PANCHAYA T. SO, THE ARGUMENT BEFORE US IS THAT THE VILLAGE PANCHAYAT IS A LOCAL AUTHORI TY, THEREFORE, COMPETENT TO APPROVE A HOUSING PROJECT. ON THIS ISSUE, A JUDGMEN T HAS BEEN PASSED BY ITAT NAGPUR BENCH, NAGPUR IN THE CASE OF ACIT VS M/ S. CHINTAMONI BUILDERS, ORDER DATED 30-10-2015 WHEREIN A DISCUSSI ON OF THE BOMBAY VILLAGE PANCHAYAT ACT, 1958 WAS MADE AND IT WAS FOU ND THAT THE SANCTION OF THE CONSTRUCTION OF A BUILDING BEING SITUATED WITHI N THE LIMITS OF VILLAGE, THE APPROVAL HAS TO BE GRANTED BY THE PANCHAYAT. BECAUS E OF THAT REASON, IT WAS HELD THAT THE VILLAGE PANCHAYAT IS A LOCAL AUTHORIT Y. RELEVANT PORTION OF THE SAID ORDER IS REPRODUCED BELOW:- '6. AS FAR AS THE ISSUE WHETHER THE GRAMP PANCHAYAT IS 'LOCAL AUTHORITY' OR NOT, THE DECISION OF ITAT, PUNE BENCH HAS BEEN CITED BEFORE US BEARING NO. 667 /PN/20 13 ASSESSMENT YEAR 2009-10 IN THE CASE OF HIRAMAN N IVRUTTI BHUJAL, ORDER DATED 27-05-2014 WHEREIN OTHER DECISIONS WERE DISCUSSED A ND FINALLY CAME TO THE CONCLUSION THAT THE CONCERNED GRAM PANCHAYAT WAS A COMPETENT LOCAL AUTHORITY FOR THE PURPOSE OF ISSUING APPROVAL AND COMPLETION CERTIFICATE FOR CLAIMING ITA NO. 2807/M/2017- M/S EXCEL REALITY 8 DEDUCTION U/S 801B (10) OF I. T. ACT. MOREOVER, THE RESPONDENT-ASSESSEE HAS ALSO PLACED RELIANCE ON A DECISION OF CIT VS. GWALIOR RA YON SILK MANUFACTURING CO. LTD. 196 ITR 149 (SC) FOR LEGAL PROPOSITION THAT TH E PROVISIONS FOR DEDUCTIONS AND EXEMPTIONS SHOULD BE CONSTRUED REASONABLY AND I N FAVOUR OF THE ASSESSEE. IN OUR CONSIDERED OPINION SINCE ALL THE ISSUES IN HAND HAVE BEEN COVERED EITHER BY THE ORDERS OF THE TRIBUNAL IN ASSESEE'S OWN CASE OR BY RESPECTED COORDINATE BENCHES, THEREFORE, WE FIND NO FALLACY IN THE VIEW TAKEN BY THE LEARNED CIT (APPEALS). RESULTANTLY, THE SAME IS HEREBY CONFIRME D AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. WE HAVE NOTED THAT THE DECISION OF NAGPUR TRIBUNAL IN ITO VS. M/S SWAPNASHILP DEVELOPERS (SUPRA) WAS CHALLENGED BY TH E REVENUE BEFORE NAGPUR BENCH AND THE APPEAL OF THE ASSESSEE WAS DIS MISSED VIDE ITA NO. 25 & 26/2016 DATED 24.10.2016. FURTHER, THE CO-ORDI NATE BENCH OF PUNE TRIBUNAL IN HIRAMAN NIVRUTTI BHUJBAL VS. ITO IN ITA NO. 667/PN/2013 DATED 27.05.2014 HELD THAT CONCERNED GRAM PANCHAYAT IS A COMPETENT LOCAL AUTHORITY FOR THE PURPOSE OF ISSUING APPROVAL AND C OMPLETION CERTIFICATE FOR CLAIMING DEDUCTION UNDER SECTION 80IB(10) IN RESPEC T OF THE PROFIT FROM SALE AND ELIGIBLE FLATS IN THE PROJECT. IN OUR VIEW, THE AO HAS TAKEN A LEGALLY POSSIBLE VIEW WHILE ALLOWING DEDUCTION UNDER SECTIO N 80IB(10). IN OUR VIEW, THE PROVISION OF SECTION 263 OF THE ACT CAN B E INVOKED IF THE TWIN CONDITION PRESCRIBED UNDER SECTION 263 IS FULFILLED I.E THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IN THE PRESENT CASE, THE AO HAS TAKEN LEGALLY PERMISSIBLE AND POSSIBLE VIEW, THUS, THE ORDER PASSED BY AO IS NOT ERRONEOUS. THE HONBLE JURISDICTIONAL HIGH COUR T IN CASE OF CIT VS. GABRIEL INDIA LTD. 203 ITR 108 (BOM) HELD THAT POW ER UNDER SECTION 263 CAN BE INVOKED ONLY IF BOTH THE CONDITION ARE EXIST I.E. ORDER MUST BE ITA NO. 2807/M/2017- M/S EXCEL REALITY 9 ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. IN OUR VIEW, THE ORDER CANNOT BE TERMED AS ERRONEOUS, SO FAR AS IT I S IN ACCORDANCE WITH LAW. 9. KEEPING IN VIEW THE ABOVE DISCUSSION, THE ORDER PAS SED BY LD. CIT(A) WAS BASED ON CHANGE OF OPINION. THE GRAM PANCHAYAT AADA I OF DISTRICT RAIGAD IS A COMPETENT AUTHORITY FOR PURPOSE OF ISSUING APP ROVAL AND COMPLETION CERTIFICATE FOR CLAIMING DEDUCTION UNDER SECTION 80 IB(10), THUS THE ASSESSEES CLAIM ON MERIT IS LIABLE TO SUCCEED. HEN CE, THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE ALLOWED. RESULTANTLY, THE AP PEAL FILED BY ASSESSEE IS ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DAY OF DECEMBER 2017. SD/- SD/- (P.K. BANSAL) (PAWAN SINGH) VICE-PRESIDENT JUDICIAL MEMBER MUMBAI; DATED 20/12/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/