Asst. CIT, Circle 11(2), Pune V. Shri Subhash.F. Bafna, Pune

ITA 319/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79927 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 01-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: V L JAIN
• Keywords: Retrospective amendment; Additional evidence; Reasonable cause; Competent authority; Retraction; Revised return
• Section: 133A; 80IB; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.316 TO 319/PN/2013 (A.YS: 2004-05 TO 2007-08) ACIT, CIRCLE 11(2), PUNE .. APPELLANT VS. SHRI SUBHASH F BAFNA 1, DEALING CENTRE, VELANKAR NAGAR, NEAR MITRA MANDAL, PARVATI, PUNE 411009 PAN: AFQPB1167A .. RESPONDENT ITA NO.1830/PN/2013 (A.Y: 2008-09) SUBHASH F. BAFNA, 1, DEALING CENTRE, VELANKAR NAGAR, NEAR MITRA MANDAL, PARVATI, PUNE 411009 PAN: AFQPB1167A .. APPELLANT VS. DCIT, CIRCLE 11(2), PUNE .. RESPONDENT ITA NO.272/PN/2014 (A.Y: 2008-09) SUBHASH F BAFNA 1, DEALING CENTRE, VELANKAR NAGAR, NEAR MITRA MANDAL, PARVATI, PUNE 411009 PAN: AFQPB1167A .. APPELLANT VS. DCIT, CIRCLE 11(2), PUNE .. RESPONDENT ASSESSEE BY : SHRI V.L. JAI N DEPARTMENT BY : SHRI S.P. W ALIMBE DATE OF HEARING : 24-06-2014 DATE OF ORDER : 26-06-2014 2 ORDER PER R.K. PANDA, AM : ITA NOS.316 TO 319/PN/2013 FILED BY THE REVENUE ARE DIRECTED AGAINST THE COMMON ORDER DATED 07-11-2012 OF THE CI T(A)-I, PUNE RELATING TO ASSESSMENT YEARS 2004-05 TO 2007-08 RES PECTIVELY. ITA NO.1830/PN/2013 FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 30-08-2013 OF THE CIT(A)-I, PUNE RELATING TO ASSESS MENT YEAR 2008-09 AND ITA NO.272/PN/2014 FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER DATED 13-12-2013 PASSED U/S.154 BY THE CIT(A) -I, PUNE RELATING TO ASSESSMENT YEAR 2008-09. SINCE COMMON ISSUES ARE I NVOLVED IN ALL THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.1830/PN/2013 (A.Y. 2008-09) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPE RS IN THE NAME OF SUBHASH BUILDERS AS A PROPRIETORSHIP CONCERN. H E FILED HIS RETURN OF INCOME ON 23-09-2008 DECLARING TOTAL INCOME OF RS.2 ,63,40,213/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE HAD UNDERTAKEN DEVELOPMENT AND CONSTRUCTIO N OF ONE PROJECT, I.E. VARDHAMAN TOWNSHIP. IT WAS STARTED ON 20-05-2002 AS PER APPROVAL DATED 23-03-2001. THE PROJECT HAS BEEN CONSTRUCTED ON LAND ADMEASURING 40,050 SQ.MTRS HAVING RESIDENTIAL UNITS FROM 480 TO 900 SQ.FT. THE PROJECT HAS ALSO COMMERCIAL ESTABLISHMENT OF ABOUT 750 SQ. FT. 3 2.1 FROM THE VARIOUS DETAILS FURNISHED BY THE ASSES SEE THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED DEDUCTION/S.80IB(10) AS UNDER : ASSESSMENT YEAR AMOUNT 2004-05 RS.29,98,262/- 2005-06 RS.60,00,309/- 2006-07 RS.1,70,70,777/- 2007-08 RS.2,51,91,854/- 2008-09 RS.2,79,35,311/- THE AO, THEREFORE, ASKED THE ASSESSEE TO JUSTIFY TH E SAID CLAIM OF DEDUCTION IN THE LIGHT OF DISALLOWANCE OF THE SAME IN EARLIER ASSESSMENT YEAR, I.E. 2007-08. FROM THE VARIOUS DETAILS FURNI SHED BY THE ASSESSE, THE AO OBSERVED THAT THE ASSESSEE DOES NOT SATISFY THE CONDITIONS PRESCRIBED U/S.80IB(10). HE NOTED THAT IN THE PRESENT CASE TH E CONSTRUCTION WORK COMMENCED ON 23-03-2001 AND THEREFORE THE PROJECT S HOULD HAVE BEEN COMPLETED ON OR BEFORE 31-03-2008. HOWEVER, DURING THE COURSE OF SURVEY IN THE PREMISES OF THE ASSESSEE ON 13-05-200 8, IT WAS SEEN THAT THE PROJECT CONSTRUCTION WORK WAS STILL GOING ON THEREB Y MAKING THE ASSESSEE NOT ELIGIBLE FOR CLAIM OF DEDUCTION U/S.80IB(10). THE STATEMENT OF THE ASSESSEE WAS ALSO RECORDED DURING THE SURVEY PROCEE DINGS WHEREIN HE HAD STATED IN REPLY TO QUESTION NO.3 THAT ALMOST 90% OF THE WORK IS COMPLETED IN MARCH 2008. FURTHER, IN REPLY TO QUESTION NO.6 HE HAS STATED THAT AS A GOOD GESTURE AND TO BUY PEACE OF MIND HE IS SURREND ERING DEDUCTION CLAIMED U/S.80IB(10) FOR THE SAID SCHEME. IN VIEW OF THE ABOVE THE AO NOTED THAT THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMIN G THE DEDUCTION U/S.80IB(10) AMOUNTING TO RS.2,79,35,311/-. HE ACC ORDINGLY DISALLOWED THE SAME. 4 2.2 IT MAY BE PERTINENT TO MENTION HERE THAT IN VIE W OF THE SURVEY UNDERTAKEN U/S.133A ON 13-05-2008 WHERE THE ASSESSE E SURRENDERED THE CLAIM OF DEDUCTION U/S.80IB(10) RE-ASSESSMENT PROCE EDINGS WERE INITIATED U/S.147 AND THE AO IN THE ORDERS PASSED US/.143(3) R.W.S. 147 DISALLOWED THE CLAIM OF DEDUCTION GRANTED EARLIER AMOUNTING TO RS.29,98,262/- FOR A.Y. 2004-05, RS.60,00,309/- FOR A.Y. 2005-06, RS.1 ,70,70,777/- FOR A.Y. 2006-07 AND RS.2,51,91,854/- FOR A.Y. 2007-08. 2.3 THE ASSESSEE WENT IN APPEAL WHEREIN THE LD.CIT( A) VIDE ORDER DATED 17-07-2012 FOR A.YRS. 2004-05 TO 2007-08 FOLL OWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S.RAMSUKH PROPERTIES VS. DCIT VIDE ITA NO.84/PN/2011 ORDER DA TED 25-07-2012 ALLOWED PROPORTIONATE CLAIM OF DEDUCTION U/S.80IB(1 0) BY OBSERVVING AS UNDER : 3.4 AFTER CONSIDERING THE SUBMISSIONS MADE AND THE FAC TUAL MATERIAL THAT IS AVAILABLE ON RECORD, IT IS FELT THAT THE CRUX OF THE ISSUES THAT HAVE A BEARING ON THE APPEAL IN QUESTION ARE THREE FOLDS : A) WHETHER THE STATEMENT MADE BY THE APPELLANT BEFOR E THE INCOME TAX AUTHORITIES DURING SURVEY ON 13-05-2008, CAN BE SUBSTITUTED BY A LEGAL CLAIM MADE DURING SUBSEQUENT PROCEEDINGS, THEREBY TANT AMOUNTING TO A RETRACTION? B) WHETHER APPELLANT IS ENTITLED TO DEDUCTION U/S.80I B(10) DESPITE THE FACT THAT ALL BUILDINGS IN THE HOUSING PROJECT ARE NO T COMPLETED? C) WHETHER APPELLANT IS ENTITLED TO PRO-RATA DEDUCTI ON ON FLATS/HOUSING UNITS COMPLETED BY 31-03-2008? 3.5 THE FIRST ISSUE IS CRUCIAL, HAVING AS IT WERE IMPOR TANT RAMIFICATIONS. IT IS SEEN FROM THE RECORD THAT, ALMOST IMMEDIATELY AF TER SURVEY AND STATEMENT RECORDED ON 13.5.2008, THE APPELLANT ADDRE SSED A LETTER TO THE ASSESSING OFFICER ON 28.5.2008, WHEREIN HE STATES THAT HE IS WILLING TO PAY TAX ON THE INCOMPLETE PART OF THE PROJECT, BUT REQU ESTING THAT DEDUCTION U/S 80IB(10) BE ALLOWED ON THE COMPLETED PART OF THE PROJECT. ON BEING INFORMED BY THE ASSESSING OFFICER BY LETTER DATED 23.6. 2008 THAT THE APPELLANT'S CONTENTION WAS INCORRECT AND CONTRARY TO THE PROVISIONS OF SEC. 80IB(10) AND THEREFORE, HE MUST HONOUR HIS COMMITMENT AND PAY THE TAXES, THE APPELLANT PAID TAXES OF RS.98,48,000 UNDER PROTEST AND WITHOUT PREJUDICE TO HIS CLAIM FOR-'DEDUCTION U/S 80IB(10) AN D INFORMED ASSESSING OFFICER VIDE LETTER DATED 14.7.2008. IT IS TO BE NOT ED THAT THE APPELLANT DID NOT, HOWEVER, FILE REVISED RETURNS IN RESPONSE TO 148 NOTICE FOR A.YS. 2004- 5 05 AND 2005-06 BUT FURNISHED REPLY STATING THAT ORIGI NAL RETURNS FILED ON 1.10.2004 AND 31.10.2005 RESPECTIVELY FOR THESE YEARS BE TREATED AS FILED IN RESPONSE TO 148 NOTICE. RETURNS WERE ALSO NOT REVISED FOR A.YS. 2006-07 AND 2007-08, FOR WHICH YEARS RETURNS ALREADY STOOD FIL ED. THUS, IT CAN BE SEEN THAT THE VOLUNTARY STATEMENT MADE U/S 131 ON 13.5 .2008, WAS ALMOST IMMEDIATELY WITHDRAWN WITHIN A SPAN OF 15 DAYS, BY A PPELLANT'S LETTER DATED 28.5.2008, ADDRESSED TO ASSESSING OFFICER REQUESTING FOR ALLOWANCE OF 80IB(10) DEDUCTION ON COMPLETED PART OF THE PROJ ECT. IT HAS BEEN SUBMITTED THAT A LEGAL CLAIM CAN BE MADE ANY TIME AN D DOES NOT AMOUNT TO RETRACTION. CONSIDERING ALL THE FACTS NARRATED ABOVE, ONE COMES TO THE INESCAPABLE CONCLUSION THAT THE APPELLANT HAD ALL ALO NG MAINTAINED, THAT HE WAS PAYING TAXES ON THE DISPUTED AMOUNT, WITHOUT PREJU DICE TO HIS CONTENTION THAT HE WAS ENTITLED TO DEDUCTION U/S 80IB (10) ON THE COMPLETED PART OF THE PROJECT. ANY STATEMENT MADE BY THE APPELLANT DURING THE COURSE OF SURVEY, IT IS FELT, CANNOT STAND IN THE W AY OF A CLAIM THAT THE APPELLANT IS LEGALLY ENTITLED TO. KEEPING IN VIEW T HE SAME IT IS HELD THAT ANY LEGAL CLAIM BY AN ASSESSEE HAS TO BE ENTERTAINED AT ANY STAGE OF THE PROCEEDINGS, UNLESS IT IS SPECIFICALLY PROHIBITED BY THE LAWS OF LIMITATION, IF ANY APPLICABLE. IN THIS BACKGROUND, IT BECOMES NECESSAR Y TO ADJUDICATE ON THE SECOND AND MAIN GROUND OF APPEAL WHICH RELATES TO ALLOWANCE OF DEDUCTION U/S 8016(10), WHICH IS ALSO INTRINSICALLY REL ATED TO THE ADDITIONAL GROUND RAISED IN THE APPELLATE PROCEEDING S. 3.6 COMING TO THE MAIN ISSUE ON WHICH THE APPEALS FOR THE FOUR IMPUGNED ASSESSMENT YEAR HINGES I.E. GROUND NO. 1, IT IS SEEN FROM THE RECORD THAT THE APPELLANT RECEIVED PERMISSION FOR CON STRUCTION OF 9 BUILDINGS, NAMELY A8, A9, B 8, B9, B10, C8, C9, C10, AND D3 IN ITS HOUSING PROJECT CALLED 'VARDHMAN TOWNSHIP' LOCATED AT SURVEY NO. 44A, SASANE NAGAR, HADAPSAR, PUNE. THE FIRST APPROVAL (COMMENCEME NT CERTIFICATE) FROM PMC BUILDING CONTROL DEPARTMENT, WAS RECEIVED O N 20.5.2002 VIDE PMC COMMENCEMENT CERTIFICATE NO. 4434 PERMITTING RESIDENTIAL FSI OF 40,050 SQ.MT. AS PER THE PLAN, THE APPLICATION PROPOSE D RESIDENTIAL FLOOR SPACE CONSTRUCTION OF 8496.99 SQ.M. SUBSEQUENTLY, THE A PPELLANT SUBMITTED REVISED PLANS, AND RECEIVED COMMENCEMENT CER TIFICATE IN RESPECT OF 12 BUILDINGS (INCLUDING PREVIOUSLY APPROV ED BUILDINGS A8, A9, B8 TO B10 AND C8 TO C10 AND D3) AND NEWLY APPROVED D, D1 AND D2 VIDE REFERENCE NO. 1256 DATED 9.10.2002. AS PER THIS APPRO VAL, IN ADDITION TO ALREADY SANCTIONED RESIDENTIAL FLOOR SPACE OF 8496.99 SQ.M., APPELLANT FURTHER PROPOSED CONSTRUCTION OF ANOTHER 7074.22 SQ.M. , THEREBY MAKING TOTAL OF 15,571.21 SQ.M. THE ANNEXURE TO THIS COMMENCEMENT CERTIFICATE, CONTAINING 14 SHEETS OF APPROVED PLAN REFER TO COMMENCEMENT CERTIFICATE NO. 4434 DATED 20.5.2002. 3.7 THE SECOND REVISED APPROVAL IN RESPECT OF THE PLO T WAS RECEIVED FROM PMC VIDE COMMENCEMENT CERTIFICATE NO. 2897 DAT ED 15.9.2003. AS PER THIS CERTIFICATE, PERMISSIBLE FSI IS 38,018.56 SQ.M. AND PROPOSED RESIDENTIAL FLOOR SPACE IS 16033.80 SQ.M. THIS PLAN MAKE S MINOR CHANGES IN THE FSI CALCULATIONS FOR BUILDINGS D, D1,D2 AND D 3. THIS CERTIFICATE ALSO REFERS TO CC NO.4434 DATED 20-5-2002. THE FINAL AND THIRD REVISION OF PLAN WAS COMMUNICATED VIDE CC NO. 3402/06 DATED 22.12.200 6. THE PERMISSIBLE FSI REMAINED UNCHANGED AT 38018.56 SQ.M. A ND PROPOSED RESIDENTIAL FLOOR SPACE WAS 18330 SQ.M. THIS PLAN MADE P ROVISION FOR COMMERCIAL SPACE OF 17.75 SQ.M. IN GROUND FLOOR OF D BUILDING AND 156.62 SQ.M. OF COMMERCIAL SPACE IN GROUND FLOOR OF D3 BUILD ING. THIS PLAN GIVES REFERENCE TO EARLIER CC NO. 4434 DATED 20.5.2002. 6 3.8 AS IS APPARENT FROM THE PRECEDING PARAGRAPHS, IT CAN BE SEEN THAT THE APPELLANT'S ORIGINAL HOUSING PROJECT 'VARDHAMAN T OWNSHIP' AT SASANENAGAR, HADAPSAR, PUNE COMPRISING 9 RESIDENTIAL BL OCKS WAS ORIGINALLY APPROVED VIDE PMC'S COMMENCEMENT CERTIFIC ATE VIDE REF. NO. 4434 ON 20.5.2002. THE SECOND, THIRD AND FOURTH ROUN DS OF APPROVAL/ COMMENCEMENT CERTIFICATES RECEIVED FROM THE MUNICIPA L AUTHORITIES RELATED TO AMENDMENTS IN THE ORIGINAL PLAN RECEIVED FROM PMC DATED 20.5.2002. THESE RELATED TO CONSTRUCTION OF 3 NEW BLO CKS (D, D1 AND D2), CHANGES IN FSI CALCULATION OF THE NEW BLOCKS AND ADDI TIONAL COMMERCIAL CONSTRUCTION OF 174.37 SQ.M IN D AND D3 BUILDINGS. HOWEVER, EACH ONE OF THESE AMENDED PLANS ARE WITH REFERENCE TO ORIGINAL PLAN SUBMITTED AND APPROVED BY PMC VIDE REF. NO. 4434 DATED 20.5.2 002. THEREFORE, THE CONSTRUCTION CARRIED OUT BY THE APPELLANT OF HOU SING PROJECT HAS TO BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH T HE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUT HORITY, NAMELY 20.5.2002. 3.9 SECTION 80IB(10) AS IT RELATES TO THE FACTS OF THE IMPUGNED ASSESSMENT YEARS, READS AS UNDER: '80IB (10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEF ORE THE 31ST DAY OF MARCH, 2007 BY A LOCAL AUTHORITY SHALL BE HUNDRED P ER 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 DEVELO PMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER T HE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVE D BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR B EFORE THE 31 ST DAY OF MARCH, 2008; . (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR , IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004, WI THIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJ ECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, (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 PLA N OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION O F THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTH ORITY;' 3.10 FROM THE PLAIN READING OF THE SECTION, IT IS CL EAR THAT THE APPELLANT RECEIVED ITS FIRST APPROVAL FOR ITS HOUSING PROJECT ON 20.5.2002 AND ALL SUBSEQUENT APPROVALS TAKEN WERE FOR AMENDMENTS TO ITS I NITIAL PLAN TO CONSTRUCT 9 RESIDENTIAL BLOCKS. CONSEQUENTLY, AS PER EX PLANATION (I) TO SEC. 80IB(10)(A) THE DEEMED DATE OF APPROVAL OF THE HOUSI NG PROJECT WOULD BE 20.5.2002. FOR THE IMPUGNED ASSESSMENTS THEREFORE, SINCE THE COMPLETION CERTIFICATE IN RESPECT OF THE HOUSING PROJECT WAS NOT RECEIVED TILL 31.3.2008, THE ASSESSING OFFICER WAS JUSTIFIED IN REJECTING THE CLAI M OF THE APPELLANT 7 U/S 80IB(10). FURTHER, AS IS DISCUSSED IN THE SUBSEQUENT P ARAGRAPHS, THE APPELLANT'S RELIANCE ON BOMBAY HIGH COURT DECISION IN VANDANA PROPERTIES IS NOT JUSTIFIED. 3.11 THE MUMBAI HIGH COURT IN VANDANA PROPERTIES CA SE HAS, (206 TAXMAN 584) IN RELATION TO EXPLANATION TO SEC. 80IB( 10)(A) HELD AS UNDER: '22. RELIANCE PLACED BY THE REVENUE ON THE EXPLANAT ION TO SECTION 80IB (10) (A) WHICH WAS INTRODUCED WITH EFFECT FROM 1ST AP RIL 2005 IS ALSO MISPLACED. WHAT THE SAID EXPLANATION CONTEMPLATES IS T HAT WHERE THE APPROVAL IN RESPECT OF A HOUSING PROJECT IS GRANTED MO RE THAN ONCE, THEN, THAT HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APP ROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIR ST APPROVED BY THE LOCAL AUTHORITY. FOR EXAMPLE. IN RESPECT OF A THE CONSTRUCTION AND THE SAME MAY BE APPROVED. IN SUCH A CASE, THE EXPLANATION PRO VIDES THAT FOR THE PURPOSES OF SECTION 80IB (10) THE HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE FIRST APPROVA L WAS GRANTED BY THE LOCAL AUTHORITY. THUS, THE EXPLANATION TO SECTION 8 0IB (10)(A) REFERS TO THE APPROVAL GRANTED TO THE SAME HOUSING PROJECT MORE THA N ONCE AND THE SAID EXPLANATION WOULD NOT APPLY WHERE (HE APPROVAL IS GR ANTED TO DIFFERENT HOUSING PROJECTS. IN THE PRESENT CASE, AS NOTED EARLIER, CONSTRUCTION OF 'E' BUILDING CONSTITUTES AN INDEPENDENT HOUSING PROJECT AN D, THEREFORE, THE DATE ON WHICH THE EARLIER HOUSING PROJECT HAD COMMEN CED CONSTRUCTION COULD NOT BE APPLIED TO THE HOUSING PROJECT CONSISTING OF 'E' BUILDING MERELY BECAUSE THE CONDITIONS SET OUT WHILE GRANTING A PPROVAL TO THE EARLIER HOUSING PROJECT HAVE ALSO BEEN MADE APPLICABL E TO THE HOUSING PROJECT IN QUESTION. ' 3.12. A CAREFUL ANALYSIS OF THE BOMBAY HIGH COURT DE CISION CITED ABOVE WOULD SHOW THAT IN THE CASE DECIDED BY THE HIGH COURT THE ASSESSEE HAD ALREADY CONSTRUCTED BUILDINGS A, B, C AND D DURING TH E PERIOD 1993 TO 1996 I.E. PRIOR TO 1.10.1998 WHEN SEC. 80IB(10) WAS N OT ON THE STATUTE. IN THE YEAR 2001 THE LAND WAS CONVERTED FROM SURPLUS VACA NT LAND INTO LAND WITHIN CEILING LIMIT BY THE STATE GOVT, THEREBY GIV ING THE APPELLANT EXTRA FSI. ACCORDINGLY, APPROVAL FOR CONSTRUCTION OF ADDIT IONAL BUILDING E WAS SUBMITTED AND APPROVED BY THE LOCAL AUTHORITY ON 11. 10.2002. IT IS IN VIEW OF THESE PECULIAR FACTS, THAT IN THIS CASE, THE HIGH CO URT HELD THAT BUILDING E COULD NOT BE CONSIDERED AS AN EXTENSION OF THE EARLIER HOUSING PROJECT NOR HAD THE MUNICIPAL CORPORATION GRANTED APPROVAL TO B UILDING E AS EXTENSION OF THE EXISTING / EARLIER HOUSING PROJECT, BUT COULD BE SAID TO BE A SEPARATE HOUSING PROJECT. CONSEQUENTLY, IT WAS HELD THAT EXPLAN ATION (I) TO SEC. 80IB(10) DID NOT APPLY. THE HIGH COURT ALSO WENT INT O THE ISSUE AS TO WHETHER A BUILDER MUST HAVE A VACANT PLOT OF LAND WI TH A MINIMUM AREA OF ONE ACRE SO AS TO BE ELIGIBLE FOR DEDUCTION U/S 80IB( 10) BUT SINCE IT IS NOT RELEVANT TO THE FACTS OF THE PRESENT CASE, THIS ASPECT MAY BE IGNORED FOR THE PRESENT. 3.13. FROM THE FACTS NARRATED ABOVE, IT CAN BE SEEN THAT THE FACTS IN THE PRESENT CASE ARE COMPLETELY DISTINGUISHABLE FROM THE FA CTS AND CIRCUMSTANCES ADJUDICATED BY MUMBAI HIGH COURT IN VAN DANA PROPERTIES. IT IS CLEAR FROM THE PRECEDING PARAGRAPHS THAT THE A PPELLANT SOUGHT REVISION OF ITS ORIGINAL HOUSING PROJECT THAT WAS EARL IER APPROVED BY PMC BEARING REFERENCE NO. 4434, AND SUCH APPROVAL WAS REC EIVED ON 20.5.2002. THE APPELLANT SOUGHT CERTAIN MODIFICATIONS TO ITS HOUSI NG PROJECT WHICH WAS APPROVED BY PMC ON 9.10.2002. A SECOND REVISION WA S SOUGHT BY THE APPELLANT AND RECEIVED ON 15.9.2003. AGAIN, FOR THE THIRD TIME THE 8 APPELLANT SOUGHT REVISION OF ITS ORIGINAL PLAN FOR THE HOUSING PROJECT FROM PMC WHICH WAS RECEIVED ON 22.12.2006. THIS IS THEREFOR E, A CASE, AS THE HON'BLE MUMBAI HIGH COURT HELD VIDE PARA 22 OF ITS J UDGEMENT REPRODUCED AT PARA 5.1 SUPRA, WHERE AMENDMENT OF THE BUILDING P LAN AT SEVERAL STAGES OF CONSTRUCTION WAS SOUGHT AND APPROVED. IN SUCH A SITUATION, THE HIGH COURT HELD THAT EXPLANATION TO SEC. 80IB(10)(A) WOUL D BE CLEARLY ATTRACTED. IN OTHER WORDS, FOR THE PURPOSES OF SEC. 80IB(10), A H OUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHIC H FIRST APPROVAL WAS GRANTED BY THE LOCAL AUTHORITY. IT WAS ONLY IN THE L IGHT OF THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE BEFORE IT, THE HIGH COUR T FOUND THAT CONSTRUCTION OF E BUILDING CONSTITUTES AN INDEPENDENT HOUSING PROJECT AND THEREFORE, THE DATE ON WHICH THE EARLIER HOUSING PRO JECT HAVE COMMENCED CONSTRUCTION COULD NOT BE APPLIED TO THE HOUSING PROJ ECT CONSISTING OF E BUILDING MERELY BECAUSE THE CONDITIONS SET OUT WHILE GRANTING APPROVAL TO THE EARLIER HOUSING PROJECT HAVE ALSO BEEN MADE APPLI CABLE TO THE HOUSING PROJECT IN QUESTION. IN THE PRESENT CASE, IT IS SEEN THA T THE PMC HAS GRANTED APPROVAL IN RESPECT OF THE HOUSING PROJECT NAMED VARD HMAN TOWNSHIP MORE THAN ONCE DUE TO MODIFICATIONS PROPOSED BY THE A PPELLANT AND THEREFORE, THE HOUSING PROJECT COULD BE DEEMED TO HA VE BEEN APPROVED AS ON THE ORIGINAL DATE OF APPROVAL VIZ. 20.5.2002. SI NCE THE APPELLANT HAS FAILED TO COMPLETE THE CONSTRUCTION OF THE ENTIRE HO USING PROJECT ON OR BEFORE 31.3.2008 AS PER THE EXISTING PROVISIONS OF LAW, IT IS HELD THAT THE APPELLANT IS NOT ENTITLED TO CLAIM DEDUCTION U/S 80IB (10). THEREFORE, THE FIRST GROUND OF APPEAL RELATING TO SEC. 80IB(10) FAIL S AND IS ACCORDINGLY, DISMISSED FOR ALL THE IMPUGNED ASSESSMENT YEARS. 4. THE THIRD ISSUE DETAILED AT PARA 3.4 (C) SUPRA, RE LATES TO CLAIM OF THE APPELLANT FOR PROPORTIONATE DEDUCTION U/S 8016(10), WHICH HAS BEEN RAISED BY WAV OF ADDITIONAL GROUND OF APPEAL AND WHICH WAS ALREADY RAISED BEFORE THE ASSESSING OFFICER VIDE LETTER DATED 28.5 .2008 AND SUBSEQUENT LETTER DATED 14.7.2008 THE APPELLANT HAS SUBMITTED, (IN CO NNECTION WITH THE ADDITIONAL GROUND FILED ON 12.11.2009 FOR GRANT OF PRO-RATA DEDUCTION) THAT ASSUMING ALL 12 BUILDINGS ARE TOGETHER CONSIDERED A S A SINGLE PROJECT, PROPORTIONATE DEDUCTION SHOULD BE GRANTED WITH REFER ENCE TO 8 BUILDINGS WHICH ARE ALREADY COMPLETED. THE DATES OF COMPLETIO N ARE 5.10.2004 (D BUILDING), 16.9.2005 (D 3 BUILDING), 4.2.2006 (C9 AND C10 BUILDINGS ), 12.12.2006 (D2 BUILDING) AND 6.8.2007 (D1 BUILDING) RELIANCE HAS BEEN PLACED ON FOLLOWING DECISIONS IN SUPPORT OF THIS PROPOSITION : I. 108 TTJ 71 (CHENNAI) ARUNA EXCELLO II. 33 SOT 277 (MUM) ACIT VS SHETH DEVELOPE RS III. 25 DTR 278 (NAG) ITO VS AIR DEVELOPERS IV. 119 TTJ 269 (BANG) BRIGADE ENTERPRISES V. 22 DTR 1 (PUNE) (SB) BRAHMA ASSOCIATES VI. 39 DBCAJ 546 (CAL) BENGAL AMBUJA HSG. DEV ELOPERS VII. 35 SOT 135 (MURN) ARPANA DEVELOPMENT CO RPORATION VIII. EKTA HOUSING PVT. LTD. (MUMBAI ITAT) I TA NO. 3649/MUM/2009 DATED 20.5.2011 4.1 ALL THE ABOVE CASE LAWS RELIED UPON BY THE APPE LLANT ARE PERUSED. IT IS SEEN THAT ALL OF THEM ARE ON THE ISSUE OF PRO-RATA D EDUCTION U/S 80IB(10) IN RESPECT OF ELIGIBLE RESIDENTIAL UNITS AS PRESCRIBED U/S 80IB(10)(C) AND ARE NOT RELEVANT TO THE FACTS OF THE INSTANT CASE, SAVE AND EXCEPT BRAHMA ASSOCIATES, WHICH REVOLVED AROUND THE ISSUE OF COMMERCIA L USER IN HOUSING PROJECT APPROVED PRIOR TO 1.04.2005, IN THAT CASE, T HE HONOURABLE MUMBAI HIGH COURT IMPLICITLY DISAPPROVED OF CONCEPT OF PROP ORTIONATE DEDUCTION U/S 80IB(10). THE HIGH COURT HELD THAT SEC. 80IB(10) ALLOWS DEDUCTION TO THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND NOT TO A PART OF THE 9 PROJECT. WHEN ALL THE CONDITIONS PRESCRIBED BY THE STA TUTE AS SATISFIED, THERE IS NO QUESTION OF ALLOWING PART DEDUCTION AND A SSESSEE IS ENTITLED TO SEC. 80IB(10) ON THE ENTIRE PROJECT. FOLLOWING IS THE OPERATIVE PORTION OF THE HIGH COURT'S DECISION IN BRAHMA ASSOCIATES : '28. IN THE PRESENT CASE, THOUGH THE COMMERCIAL USER IS MORE THAN 10 PER CENT OF THE PLOT AREA, THE TRIBUNAL HAS ALLOWED SECTION 80-IB(10) DEDUCTION IN RESPECT OF 15 RESIDENTIAL BUILDINGS ON TH E GROUND THAT THE PROFITS FROM THESE EXCLUSIVELY RESIDENTIAL BUILDINGS COU LD BE DETERMINED ON STAND ALONE BASIS. IN OUR OPINION THAT WOULD NOT B E PROPER, BECAUSE, SECTION 80-IB(10) ALLOWS DEDUCTION TO THE ENTIRE PROJ ECT APPROVED, BY THE LOCAL AUTHORITY AND NOT TO A PART OF THE PROJECT. I F THE CONDITIONS SET OUT IN SECTION 80-IB(10) ARE SATISFIED, THEN DEDUCTION IS ALL OWABLE ON THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND THERE I S NO QUESTION OF ALLOWING DEDUCTION TO A PART OF THE PROJECT. IN THE PRESENT CASE, THE COMMERCIAL USER IS ALLOWED IN ACCORDANCE WITH THE DC RULES AND HENCE THE ASSESSEE WAS ENTITLED TO SECTION 80-IB(10) DEDUCTION ON T HE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY. HOWEVER, THE ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRIBUNAL IN RESTRICTING THE DEDUC TION TO A PART OF THE PROJECT. THEREFORE, WHILE HOLDING THAT IN LAW, THE ASSESSEE WAS ENTITLED TO SECTION 80-IB(10) DEDUCTION ON THE PROFITS OF THE ENT IRE PROJECT, IN THE FACTS OF THE PRESENT CASE, SINCE THE ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRIBUNAL, WE ARE NOT INCLINED TO DISTURB THE DEC ISION OF THE TRIBUNAL IN RESTRICTING THE SECTION 80-IB(10) DEDUCTION ONLY IN R ESPECT OF THE PROFITS DERIVED FROM 15 RESIDENTIAL BUILDINGS.' 4.2. THUS, APPLYING THE LOGIC OF THE MUMBAI HIGH CO URT'S DECISION IN BRAHMA ASSOCIATES CASE, IT APPEARS THAT IN CASE THE COND ITIONS OF SECTION 80IB(10) ARE NOT SATISFIED, DEDUCTION UNDER THAT SECTI ON CANNOT BE ALLOWED ON PART OF THE PROJECT. A PLAIN READING OF THE SECT ION SHOWS THAT IT SPEAKS ONLY ABOUT 'COMPLETION' AND THERE ARE NO ADJECTIVES THAT ARE USED WITH THE WORDS COMPLETION. BY CHOOSING NOT TO QUALIFY THE WORD 'APPROVED' OR 'COMPLETED' IN SECTION 80IB(10)(A), THE LEGISLATIVE INTENT IN BRINGING IN SPECIFIED DATES FOR COMPLETION WITHIN A SPECIFIED PERI OD OF APPROVAL IS VERY CLEAR. THE LEGISLATION WAS BROUGHT IN TO FILL UP THE LACUNAE RELATING TO COMPLETION OF HOUSING PROJECTS AND THEREBY, ACHIEVE T HE OBJECTIVE OF PROVIDING AFFORDABLE HOUSING: ACCOMMODATION TO PUBLI C AT LARGE. FURTHER AS HAS BEEN HELD IN THE PRECEDING PARAGRAPHS, UNLIKE V ANDANA PROPERTIES CASE, WHERE AN INDIVIDUAL BUILDING WAS HELD TO BE A H OUSING PROJECT, PRIMARILY BECAUSE THERE WAS HELD TO BE NO LINKAGE BET WEEN THE OLD BUILDINGS COMPLETED PRIOR TO 1/10/1998, IN THE APPEL LANT'S CASE THE HOUSING PROJECT HAS BEEN AMENDED AND THE DEEMED DATE OF FIRST APPROVAL WITHIN THE MEANING OF SECTION 8018(10) READ WITH EXP LANATION(I) HAS TO BE TAKEN AS 31-10-2005. 4.3 ON THE ISSUE OF PRORATA DEDUCTION, THERE ARE TWO DECISIONS OF HIGH COURTS NAMELY KOLKATA HIGH COURT'S DECISION IN BENGAL AMBUJA HOUSING DEVT AND MUMBAI HIGH COURT'S DECISION IN BRAHMA ASSOCIA TES. NEITHER OF THESE TWO DECISIONS ARE SQUARELY ON THE ISSUE OF DEEMED D ATE OF APPROVAL OF HOUSING PROJECT AND DATE OF COMPLETION THEREOF. H OWEVER, DURING THE COURSE OF HEARING ON 29.10,2012, THE LEARNED AR OF T HE APPELLANT HAS SUBMITTED THAT ON THE IDENTICAL FACTS, THE PUNE BENCH OF ITAT HAS ALLOWED PRORATA DEDUCTION U/S 80 IB(10) IN THE CASE OF RAMSUKH PROPERTIES VS DCIT, CIRCLE 2 PUNE IN ITA NO 84/PN/2011 VIDE THEIR ORDER DATED 5.07.2012. I HAVE PERUSED THE SAID ORDER AND FIND THA T THE ITAT, PUNE BENCH, WHILE AGREEING WITH THE REVENUE'S VIEW THAT P LAIN READING OF SECTION 80IB(10) SUGGESTS ONLY ABOUT COMPLETION AND STR ICT INTERPRETATION SHOULD BE GIVEN TO COMPLETION DATES IN NORMAL CIRCUMST ANCES, IN THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE'S CASE, HAVE ALLOWED DEDU CTION U/S 10 80IB(10) ON COMPLETED PART OF THE PROJECT. THE ITAT NOTED THAT THE SUGGESTED MODIFICATIONS IN THE APPELLANT'S HOUSING PROJE CT COULD NOT BE APPROVED BY THE PUNE MUNICIPAL CORPORATION AS THEIR FILES WERE TAKEN OVER BY CID FOR INVESTIGATION OF ULC SCAM BY MAHARASHTRA GO VERNMENT AND HENCE SINCE MODIFICATION WAS DELAYED, THE ASSESSEE COULD COMPLETE THE TOTAL PROJECT ONLY ON 6.3.2010. IT WAS THUS, HELD THA T THE PROJECT COULD NOT BE COMPLETED DUE TO NO FAULT OF THE ASSESSEE. THE ITAT HELD THAT TAXING STATUTE GRANTING INCENTIVES FOR PROMOTION FOR GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY. 4.4. THE LEARNED AUTHORISED REPRESENTATIVE HAS ARG UED THAT THE FACTS OF THIS DECISION ARE APPLICABLE SQUARELY TO THE FACTS OF H IS OWN CASE. IT HAS BEEN STATED THAT EVEN DURING THE SURVEY PROCEEDINGS ON 13.5.2008, THE APPELLANT HAD MENTIONED THAT DEDUCTION U/S 80IB(10) HAD BEEN CLAIMED IN ANTICIPATION OF COMPLETION BY MARCH,2008, BUT DUE T O UNFORESEEN CIRCUMSTANCES BEYOND HIS CONTROL, THE SAME COULD NOT BE COMPLETED. IT IS STATED THAT THERE WAS AN ACCIDENT ON SITE LEADING TO U NFORTUNATE DEATH OF 3 LABOURERS IN MAY 2007, LEADING TO POLICE COMPLAINT A ND CRIMINAL PROCEEDINGS. FURTHER, THERE WAS LABOUR UNREST DUE TO AGITATION AGAINST NON-MAHARASHTRIAN LABOUR IN JANUARY, 2008 DUE TO WHI CH MAJORITY OF LABOUR LEFT MAHARASHTRA, CAUSING DELAY IN WORK. THIS W AS ALSO BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER VIDE APPELLANT'S LET TER DATED 28.5.2008, REFERRED TO IN PARA 3.5 SUPRA. : 4.5. I HAVE CONSIDERED THE SUBMISSIONS MADE VIS-A-VI S THE FACTS OF THE CASE AND THE LAW APPLICABLE. TO MY MIND, SECTION 80IB (10(A) READ WITH EXPLANATION (I) AND (II) VERY CLEARLY SPECIFIES THE C OMPLETION DATES VIS-A-VIS THE DATE ON WHICH THE HOUSING PROJECT WAS FIRST APPROV ED BY THE LOCAL AUTHORITY. AS DISCUSSED IN THE PARA 4.1 AND 4.2 SUPRA, THE LEGISLATIVE INTENT READ WITH THE CLEAR PROVISIONS OF THE REQUISITE SECTION S, DO NOT PERMIT ANY PROPORTIONATE DEDUCTION U/S 80IB(10). HOWEVER, IN V IEW ,OF THE JURISDICTIONAL ITAT DECISION IN RAMSUKH PROPERTIES, I A M CONSTRAINED TO ACCEPT THE DICTATES OF JUDICIAL DISCIPLINE AND FOLLOW THE RATIO LAID DOWN IN THE ORDER OF ITAT REFERRED TO SUPRA. CONSEQUENTLY, I T IS HELD THAT THE APPELLANT IS ALLOWED DEDUCTION U/S.80IB(10) ON PROPO RTIONATE BASIS IN RESPECT OF PROJECTS COMPLETED DURING THE IMPUGNED ASSESSM ENT YEARS. THE ADDITIONAL GROUND OF APPEAL IS THUS ALLOWED. 3. HOWEVER, FOR THE A.Y. 2008-09 THE LD.CIT(A) DEV IATED FROM THE ORDER OF HIS PREDECESSOR AND UPHELD THE ORDER OF TH E AO IN DENYING THE BENEFIT OF DEDUCTION U/S.80IB(10) BY FOLLOWING THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF SAIN ATH ESTATE PVT. LTD. REPORTED IN 142 ITD 370, THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF EVEREST HOME CONSTRUCTION I NDIA PVT. LTD. AND THE DECISION OF THE MUMBAI HIGH COURT IN THE CASE OF BR AHMA ASSOCIATES REPORTED IN 333 ITR 289. 11 3.1 AGAINST THE ORDER OF THE CIT(A) FOR A.Y. 2008-0 9 THE ASSESSEE FILED A PETITION U/S.154 OF THE I.T. ACT WHICH WAS DISMIS SED BY THE CIT(A) VIDE ORDER DATED 13-12-2012. THE ASSESSEE HAS FILED AN APPEAL AGAINST THE SAID ORDER. AS AGAINST THE ORDER OF THE CIT(A) ALLOWING PRO-RATA DEDUCTION FOR A.YRS. 2004-05 TO 2007-08 THE REVENUE IS IN APPEAL BEFORE US. FOR THE A.Y. 2008-09 THE ASSESSEE IS IN APPEAL BEFORE THE T RIBUNAL AGAINST THE ORDER OF THE CIT(A) REJECTING THE CLAIM OF DEDUCTIO N U/S.80IB(10) FOR A.Y. 2008-09. THE ASSESSEE IS ALSO IN THE APPEAL AGAINS T THE ORDER OF THE CIT(A) DISMISSING THE RECTIFICATION APPLICATION U/S .154 OF THE INCOME TAX ACT FOR A.Y. 2008-09. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS FOR A.Y. 2008- 09 : 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN NOT GRANTING A PROPER OPPORTUNITY OF HEARING. 2. THE LEARNED CIT (A) FURTHER ERRED ON FACTS AND IN LAW IN CONFIRMING A DISALLOWANCE OF THE CLAIM U/S 80IB(10) OF RS. 2,79,3 5,311/- FOR THE REASON THAT THE ENTIRE PROJECT AS APPROVED BY THE MUN ICIPAL AUTHORITIES WAS NOT COMPLETED BEFORE THE STIPULATED TIME I.E. 31. 03.2008. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT (A) HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING A PRO-RATA CLAIM U/ S 80IB(10) WITH REFERENCE TO THE ELIGIBLE UNITS OF THE HOUSING PROJEC T. 4. THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR DEL ETE ANY OF THE GROUNDS OF APPEAL OR ADD TO THE SAME, IF DEEMED NECESSA RY. 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SIDDHIVIN AYAK SHREE VS. ACIT VIDE ITA NO.883/PN/2010 FOR A.Y. 2006-07 ORDER DATE D 30-07-2013 AND SIDDHIVINAYAK SHREE VS. ITO, WARD-2(2), PUNE VIDE I TA NO.179/PN/2011 AND ITA NO.913/PN/2011 ORDER DATED 3 0-07-2013 FOR A.Y. 2005-06 AND 2007-08 AFTER CONSIDERING THE DECI SION OF THE MUMBAI 12 BENCH OF THE TRIBUNAL IN THE CASE OF EVEREST HOME C ONSTRUCTION INDIA PVT. LTD. (SUPRA) AND SAINATH ESTATE PVT. LTD. (SUPRA) H AS ALLOWED THE CLAIM OF PRO-RATA DEDUCTION U/S.80IB(10). FURTHER, THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. RAVIRAJ KOTHARI PUNJABI ASSOCIA TES VS. ACIT VIDE ITA NO.223/PN/2011 ORDER DATED 22-03-2013 FOR A.Y. 2007 -08 AFTER CONSIDERING THE DECISION OF MUMBAI BENCH OF THE TRI BUNAL IN THE CASE OF EVEREST HOME CONSTRUCTION INDIA PVT. LTD. (SUPRA) H AS ALLOWED THE CLAIM OF PRO-RATE DEDUCTION. 5.1 SO FAR AS THE RELIANCE ON THE MUMBAI HIGH COURT S DECISION BY THE CIT(A) IN THE CASE OF BRAHMA ASSOCIATES REPORTED IN 333 ITR 289 FOR NEGATING THE PROPORTIONATE DEDUCTION THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE PUNE BENCH OF THE TRIBUNAL IN TH E CASE OF D.S. KULKARNI DEVELOPERS LTD. VS. ACIT VIDE ITA NOS. 1428 AND 142 9/PN/2008 ORDER DATED 08-08-2012 FOR A.YRS. 2004-05 AND 2005-06 AFT ER CONSIDERING THE DECISION OF THE HONBLE MUMBAI HIGH COURT IN THE CA SE OF BRAHMA ASSOCIATES (SUPRA) HAS ALLOWED THE CLAIM OF PROPORT IONATE DEDUCTION. HE ACCORDINGLY SUBMITTED THAT THIS BEING A COVERED MAT TER THE CLAIM OF DEDUCTION U/S.80IB(10) FOR ALL THE YEARS SHOULD BE ALLOWED. 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A) FOR A.Y. 2008-09 AND SUBMITTED THAT SINCE THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS LAID DOWN U/S.80IB(10), THEREFORE, HE CANNOT BE ALLOWED PROPORTIONATE DEDUC TION U/S.80IB(10). 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS 13 DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT DURING THE COURSE OF SURVEY CARRIED OUT U/S.133A ON THE BUSINE SS PREMISES OF THE ASSESSEE ON 13-05-2008 IT WAS FOUND THAT THE PROJEC T HAD NOT BEEN COMPLETED AS REQUIRED UNDER THE PROVISIONS OF SECTI ON 80IB(10) AS IT STOOD PRIOR TO 31-03-2008. THERE IS ALSO NO DISPUTE TO T HE FACT THAT THE ASSESSEE IN HIS STATEMENT RECORDED U/S.131 ON 13-05-2008, IN RESPONSE TO QUESTION NO.6 HAD ADMITTED THAT OUT OF THE TOTAL REVISED APP ROVAL FOR 180000 SQ.FT. RECEIVED IN 2003 HE HAD OBTAINED THE COMPLETION CER TIFICATE FROM PMC FOR 152000 SQ.FT. ONLY THE AREA OF ONE ACRE AND THE SI ZE OF UNITS BEING LESS THAN 1500 SQ.FT. IS NOT IN DISPUTE. THE ONLY DISPU TE BEFORE US IS REGARDING THE ALLOWABILITY OF PROPORTIONATE DEDUCTION U/S.80I B(10) WHEN THE ENTIRE PROJECT IS NOT COMPLETED BEFORE THE STIPULATED DATE . WE FIND THE LD.CIT(A) ALLOWED THE CLAIM OF PROPORTIONATE DEDUCT ION U/S.80IB(10) FOR A.YRS. 2004-05 TO 2007-08 BY RELYING ON VARIOUS DEC ISIONS. HOWEVER, FOR THE A.Y. 2008-09 THE LD.CIT(A) DENIED THE CLAIM OF BENEFIT OF DEDUCTION U/S.80IB(10) BY RELYING ON THE DECISION OF THE HYDE RABAD BENCH OF THE TRIBUNAL IN THE CASE OF SAINATH ESTATE PVT. LTD.(SU PRA), THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF EVEREST HOME CONSTRUCTION INDIA PVT. LTD. (SUPRA) AND THE DECISION OF THE MUM BAI HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA). 7.1 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF SIDDHIVINAYAK SHREE (SUPRA) AFTER CONSIDERING THE D ECISION IN THE CASE OF SAINATH ESTATE PVT. LTD.(SUPRA), THE DECISION OF TH E MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF EVEREST HOME CONSTRUCTION I NDIA PVT. LTD. (SUPRA) HAS ALLOWED THE CLAIM OF PROPORTIONATE DEDUCTION U/ S.80IB(10) OF THE I.T. 14 ACT, 1961. THE RELEVANT OBSERVATION OF THE TRIBUNA L FROM PARA 13 ONWARDS READ AS UNDER : 13. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARI OUS DECISIONS CITED BEFORE US. WE FIND THE AO IN THE INSTANT CASE D ENIED THE CLAIM OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT (A) THE ASSE SSEE HAS NOT OBTAINED THE COMPLETION CERTIFICATE ON OR BEFORE 31 -03-2008 (B) THAT THE PROJECT INCLUDES SHOPS AND OTHER COMMERCIAL AREAS IN EX CESS OF THE PRESCRIBED LIMIT AND (C) THAT THE ASSESSEE HAS CLAIMED DE DUCTION U/S.80IB(10) SINCE A.Y. 2001-02 AND THE ASSESSEE IS SHOWIN G THE ENTIRE PROJECT AS A SINGLE PROJECT. WE FIND THE LD.CIT(A), ON THE BASIS OF THE ADDITIONAL EVIDENCES FILED BEFORE HIM AND THE REMAND REPORT OBTAINED FROM THE AO, HELD THAT THE PROJECTS (A) AND (B) UNDE RTAKEN BY THE ASSESSEE ARE TWO DIFFERENT PROJECTS. THE RELEVANT OBSERVATION S OF THE LD.CIT(A) ARE ALREADY REPRODUCED AT PARA 4.1 OF THE IMPUGNED ORDE R. THE REVENUE IS NOT IN APPEAL BEFORE US ON THIS ISSUE. THEREFORE, THIS ISSUE ON WHICH THE AO HAS DENIED THE DEDUCTION IS NOT RELEVANT. 14. HOWEVER, THE LD.CIT(A) UPHELD THE ACTION OF THE AO IN DENYING THE CLAIM OF DEDUCTION ON THE OTHER REASONS STATED BY THE AO, I.E. (A) THE COMPLETION CERTIFICATE HAS NOT BEEN OBTAINED ON OR B EFORE 31-03-2008 (B) THAT THE ASSESSEE DID NOT EXPLAIN ANYTHING ABOUT PROJEC T B AND (C) THAT THE PROJECT INCLUDES SHOPS AND COMMERCIAL AREA IN EXCESS OF THE PRESCRIBED LIMIT. 14.1 FROM THE DETAILS FURNISHED BY THE ASSESSEE IN THE PA PER BOOK WE FIND THE DETAILS OF COMPLETION CERTIFICATE NO AND DA TE AND THE REFERENCE TO THE DATE OF APPLICATION ARE AS UNDER : PROJECT A -PLOT NO 3 COMPLETION CERTIFICATE NO DATE COMPLETION WITH REFERENCE TO DATE BUILDING NO OF FLATS SHOPS BCO/03/262 28/06/2000 27/03/2000 F 48 0 640 30/03/2010 04/04/2006 D-1 24 7 640 30/03/2010 04/04/2006 D-2 24 8 640 30/03/2010 04/04/2006 E-2 24 9 640 30/03/2010 04/04/2006 E-3 24 7 640 30/03/2010 04/04/2006 E-4 24 8 TOTAL 168 39 PROJECT B -PLOT NO 4 COMPLETION DATE COMPLETION WITH BUILDING NO OF SHOPS CERTIFICATE NO REFERENCE TO DATE FLATS BCO/03/146 05/10/2005 05/10/2005 G 101 0 (GOLD) 15 BCO/03/146 05/10/2005 05/10/2005 H 68 0 (CROWN) TOTAL 169 0 THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING I+ K IN RESPECT OF 80 FLATS IS NOT GRANTED SO FAR BY PMC ALTHOUGH THE ASSESSEE HAS DU LY APPLIED FOR THE SAME ON 04-04-2006 AS PER APPLICATION FOR OCCUPANCY C ERTIFICATE RECEIVED BY PMC ON 04-04-2006, A COPY OF WHICH IS PLACED AT P APER BOOK PAGE NO.12. 14.2 IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSE SSEE THAT THE PROJECT A AND BUILDING I & K OF PROJECT B ARE COMPL ETE BEFORE MAY 2006 SINCE THE ASSESSEE HAS APPLIED FOR COMPLETION ON 04-04-2 006. SIMILARLY THE ASSESSEE HAS APPLIED ON 05-10-2005 FOR PROJECT B (G & H BUILDING) WHICH WAS RECEIVED BY THE ASSESSEE. THE PERMISSION WAS NOT REJECTED BUT WAS WITHHELD FOR TECHNICAL REASONS, I.E. NON ALLOTMENT OF BUILT UP AREA IN TERMS OF SECTION 20 OF THE URBAN LAND AND CEILING (RE GULATION) ACT, 1976 AND NON-PAYMENT OF COMPOUNDING FEES OF RS.2,41,805/-. THE ASSESSEE HAD ENCLOSED THE COMPLETION CERTIFICATE, NO OBJECTION CE RTIFICATES/CLEARANCE SUCH AS DRAINAGE, WATER, FIRE NOC, LIFT NOC, HEALTH N OC, ROAD NOC AND STRUCTURAL STABILITY CERTIFICATE ETC FOR THE ENTIRE P ROJECT A AND BUILDING I & K OF PROJECT B (PAGE NO.12 OF PAPER BOOK). COMPLETI ON CERTIFICATE FOR BUILDING G AND H OF PROJECT B ARE ALREADY AVAILED AND THERE IS NO DISPUTE. FURTHER, THE PMC ISSUED COMPLETION CERTIFICATE ON 31- 03-2010 WITH REFERENCE TO APPLICATION DATED 04-04-2006 IN RESPECT OF BUILDING D1, BUILDING D2, BUILDING E2, BUILDING E3 AND BUILDING E4. THEREFORE, THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING D1, D2 , E2, E3 & E4 OF BUILDING A RELATES BACK TO THE APPLICATION DATED 04 -04-2006. 14.3 WE FIND MERIT IN THE ABOVE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. IT HAS NOT BEEN DISPUTED BY THE REVENUE THAT T HE ASSESSEE HAS NOT APPLIED TO THE MUNICIPAL CORPORATION FOR ISSUE OF COMPLETION CERTIFICATE ON 04-04-2006 FOR PROJECT A AND BUILDIN G I & K OF PROJECT B. IT IS ALSO NOT IN DISPUTE THAT THE COMPLETION CERTIFICATE I SSUED BY THE PMC DATED 31-03-2010 FOR BUILDINGS OF PROJECT A IS NOT WITH REF ERENCE TO APPLICATION DATED 04-04-2006. THEREFORE, IN OUR OPINION, THE C OMPLETION CERTIFICATE ISSUED ON 31-03-2010 WITH REFERENCE TO THE APPLICATIO N DATED 04-04-2006 FOR PROJECT A RELATES BACK TO THE DATE OF APPLICATIO N, I.E. 04-04-2006. 14.4 THE SECOND ISSUE ON WHICH THE LD.CIT(A) COMPLETED THE DENIAL OF DEDUCTION U/S.80IB(10) IS THAT NOTHING WAS EXPLAINED A BOUT PROJECT B. AS ALREADY MENTIONED EARLIER COMPLETION CERTIFICATE FO R BUILDING G & H OF PROJECT B HAS ALREADY BEEN GRANTED ON 05-10-2005 WHI CH IS NOT DISPUTED BY THE REVENUE SINCE A COPY OF THE SAME WAS FILED BEFO RE THE AO & CIT(A) AS CERTIFIED IN THE PAPER BOOK AND NOT DISPUTED BY TH E REVENUE. SO FAR AS THE BUILDING I + K OF PROJECT B IS CONCERNED WE FIND ALTHOUGH THE ASSESSEE HAS APPLIED FOR THE SAME ON 04-04-2006, HOWEVER, THE SAME IS PENDING BEFORE PMC FOR TECHNICAL REASONS. 14.5 WE FIND THE PUNE BENCH OF ITAT IN THE CASE OF H INDUSTAN SAMUHA AWAS LTD. HAS OBSERVED AS UNDER : 9. FROM THE ABOVE, ONE THIS IS CLEAR THAT THE DAT E THAT APPEAR ON THE ARCHITECTS COMPLETION CERTIFICATE FILED BEFORE THE LOCAL AUTHO RITY IS A RELEVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25-03-2008 AND THE A SSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMATING THE COMPLETION OF THE PROJECT. THE SAID 16 CERTIFICATE/INTIMATION WAS ACCEPTED BY THE LOCAL AU THORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORITY HAS NOT RAISED ANY QUE RIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF THE SAME AS PER T HE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10-10-2008 IS CERTAINLY N OT ATTRIBUTABLE TO THE ASSESSEE AND OBTAINING THE SAID CERTIFICATE BEFORE 31-03-2008 IS BEYOND THE CONTROL OF THE ASSESSEE. ASSESSEES JOB INCLUDES THE COMPLETION OF THE BUILD ING IN ACCORDANCE WITH THE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LO CAL AUTHORITY BY WAY OF FILING THE REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIF ICATE GIVEN BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJECTED T O THE SAID APPLICATION OF THE ASSESSEE AND THE ARCHITECT BY RAISING ANY OBJECTION S NOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10-10-2008. THEREFORE, THE DELAY IN GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTRIBUTABLE TO THE AS SESSEE. THEREFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFAULTER ON THIS ACCOUNT AND THUS, THE AO HAS ERRED IN DENYING THE DEDUCTION U/S.80IA(10) OF THE ACT. ACCORDINGLY, TH E ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL A RE ALLOWED. 14.6 FURTHER, IN THE INSTANT CASE AS HAS BEEN POINTED O UT BEFORE THE AO AND CIT(A) AS WELL AS BEFORE US THAT THE ASSESSEE IS ALL A LONG CLAIMING THAT THE PROJECT WAS COMPLETE IN THE YEAR 2006, THE PURCH ASERS HAVE BEEN GIVEN POSSESSION OF THE FLATS, THEY HAVE UNDERTAKEN FOR THE MAINTENANCE CHARGES AND HAVE STARTED PAYING ELECTRICITY CHARGES ET C. FURTHER, THE PMC HAS NOT ISSUED ANY REJECTION LETTER WITHIN 21 DAYS FROM THE DATE OF SUBMISSION OF THE COMPLETION CERTIFICATE WHICH WAS SUBMI TTED ON 04-04- 2006. THE REVENUE HAS NOT DISPUTED THE ABOVE FACTS. 14.7 WE FIND THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TARNETAR CORPORATION (SUPRA) HAS HELD AS UNDER : 5. WE HAVE PERUSED THE DETAILED DISCUSSION OF THE CIT (APPEALS) AS WELL AS THE TRIBUNAL ON THE ISSUE. IN PARTICULAR, THE TRIBUNAL NOTED THAT THE CONSTRUCTION WAS COMPLETED IN 2006. APPLICATION FOR BU PERMISSION TO THE MUNICIPAL AUTHORITIES WAS FILED ON 15.2.2006 WHICH WAS REJECTED ON 1.7.06. SE VERAL RESIDENTIAL UNITS WERE OCCUPIED SINCE THE SAME WAS DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HAD ALSO PAID PENALTY AND GOT SUCH OCCUPATION REGULARIZED. S EVERAL TENEMENTS WERE SOLD LONG BEFORE THE LAST DATE. 6. IN THE PRESENT CASE, THEREFORE, THE FACT THAT T HE ASSESSEE HAD COMPLETED THE CONSTRUCTION WELL BEFORE 31ST MARCH, 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRUE THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNIC IPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION TO CLAUSE (A) TO SECT ION 80-IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON RE CORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIEW THAT MINOR DEVIATION THEREOF WOULD NO T VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WAS BEING MADE AVAILABLE. 7. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. TH E ASSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE THE FIN AL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT THE SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF THE MATTER, GRANTING BENEFIT OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL 8. IN THE RESULT, THE TAX APPEAL IS DISMISSED. 14.8 FROM THE DETAILS FURNISHED BY THE LD. COUNSEL FOR THE ASSESSEE WE FIND THE ASSESSEE HAS ALLOTTED THE BUILT UP AREA OF 944. 10 SQ.MTRS AGAINST 942 SQ. MTRS AS PER CONDITION OF SANCTION BEFORE 27-02 -2008. THEREFORE, WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS COMPLIED WITH THE CONDITION OF ALLOTMENT ON 27-02-2008 17 WHICH IS BEFORE 31-03-2008. WE FIND MERIT IN THE SUB MISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE ULC ACT WAS REPEAL ED IN THE YEAR 2009, THEREFORE, PMC/ULC DEPARTMENT AND SECRETARIAT TO MANTRALAYA ARE NOT RESPONDING, THEREFORE, THE ASSESSEE CANNOT BE HELD R ESPONSIBLE. 14.9 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. RAMSUKH PROPERTIES VS. DCIT VIDE ITA NO.84/PN/2011 HAS HELD AS UNDER : 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT THE ASSESSEE IS A FIRM ENGAGED IN BUSINESS OF BUILDER AND PROMOTER. THE ISSUE BEFORE US IS REGARDING ALLOWABILITY OF DEDUCT ION U/S.80IB(10) OF THE ACT ON PARTIALLY COMPLETE PROJECT. THE ASSESSING OFFIC ER HAS DENIED THE DEDUCTION ON THE GROUND THAT PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED TIME. THERE IS NO DISPUTE WITH REGARD TO OTHER CONDITIONS LAID U/S.80IB(10) OF THE ACT, I.E., COMMENCEMENT OF PROJECT, AREA OF LAND OF PROJECT, E TC. ASSESSEES HOUSING PROJECT WAS APPROVED VIDE COMMENCEMENT CERTIFICATE NO.3837/04 DATED 13.01.2005 OUT OF WHICH COMPLETION CERTIFICATE WAS OBTAINED AND FURNISHED BEFORE THE ASSESSING OFFICER FOR 173 OUT OF 205 FLA TS. SAME WAS REJECTED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE REQUEST FOR GRANTING WHOLE DEDUCTION IN RESPECT OF WHOLE PROJECT HAS RIG HTLY BEEN REJECTED BECAUSE DEDUCTION U/S.80IB(10) COULD NOT BE GRANTED TO ASSE SSEE ON INCOMPLETE CONSTRUCTION AT RELEVANT POINT OF TIME. REGARDING PROPORTIONATE DEDUCTION IN RESPECT OF 173 OF 205 FLATS OF PROJECT COMPLETED AS RECOGNIZED BY LOCAL AUTHORITY, I.E., PMC IN ITS COMPLETION CERTIFICATE NO.BCO/03/01333 DATED 31.03.2008, THE LD. AUTHORISED REPRESENTATIVE HEAVI LY RELIED ON DECISION OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRI GADE ENTERPRISES P. LTD. (SUPRA), AIR DEVELOPER (SUPRA), SHETH DEVELOPE RS (SUPRA) AND ALSO G.V.CORPORATION (SUPRA), WHEREIN DEDUCTION U/S.80IB (10) WAS DENIED AS SIZE OF SOME OF THE RESIDENTIAL UNITS EXCEEDED PRESCRIBE D LIMIT AS LAID DOWN U/S.80IB(10) OF THE ACT. ABOVE MENTIONED DECISIONS ARE APPLICABLE IN THEIR OWN SPHERE, I.E. ON POINT OF EXCESS AREA OF SOME OF THE FLATS WHICH HOLD GOOD IN ITS OWN SPHERE. HOWEVER, IN CASE BEFORE US, DEDUCT ION U/S.80IB(10) OF THE ACT HAS BEEN REJECTED ON THE GROUND THAT CONDITION OF C OMPLETION OF PROJECT BEFORE THE DUE DATE I.E., 31.03.2008 AS LAID DOWN U/S.80IB (10)(C) OF THE ACT, HAS NOT BEEN COMPLIED BY ASSESSEE WHICH IS BASIC CONDITION FOR ALLOWABILITY OF DEDUCTION U/S.80IB(10) OF THE ACT. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (SUPRA), WHEREIN CONDITION OF COMPLETION A S LAID DOWN IN SECTION 80IB(10)(A) COULD NOT BE COMPLIED WITH BECAUSE OF A STAY BEING GRANTED BY MRTP COURT. THUS FAULT OF INCOMPLETION OF CONSTRUCT ION WAS NOT ATTRIBUTABLE TO ASSESSEE. IN CASE SUCH A CONTINGENCY EMERGES WHIC H MAKES THE COMPLIANCE WITH PROVISION IMPOSSIBLE, THEN BENEFIT BESTOWED ON AN ASSESSEE CANNOT BE COMPLETELY DENIED. SUCH LIBERAL INTERPRETATION SHO ULD BE USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLETING PRO JECT IN TIME FOR THE REASONS BEYOND HIS CONTROL. IN CASE BEFORE US, AS STATED O N BEHALF OF ASSESSEE, THAT ASSESSEE SUBMITTED CERTAIN MODIFICATIONS/RECTIFICAT IONS FOR TOP FLOORS OF BUILDING. THE SAID MODIFICATION/RECTIFICATION COUL D NOT BE COMPLETED AS LOCAL AUTHORITY COULD NOT APPROVE THE MODIFICATION AS THE IR FILES HAVE BEEN TAKEN OVER BY CONCERN INTELLIGENCE DEPARTMENT FOR INVESTI GATION OF VIOLATION OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION AT RELEVANT POINT OF TIME. THIS FACT HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. TH US, ASSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELLED THE IMPOSSIBILITY ON PART OF THE ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME. I T IS SETTLED LEGAL POSITION THAT THE LAW ALWAYS GIVE REMEDY AND THE LAW DOES WRONG T O NO ONE. WE AGREE TO PROPOSITION PUT FORWARD BY LD. DEPARTMENTAL REPRESE NTATIVE THAT PLAIN READING OF SECTION 80IB(10) OF THE ACT SUGGESTS ABOUT ONLY COMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONGWITH THE WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMAL CIRCUMSTAN CES. HOWEVER, IN CASE BEFORE US, ASSESSEE WAS PREVENTED BY REASONABLE CAU SE TO COMPLETE CONSTRUCTION IN TIME DUE TO INTERVENTION OF CID ACT ION ON ACCOUNT OF VIOLATION OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. ASSESSEE WAS INCAPACITATED TO COMPLETE THE SAME IN TIME DUE TO REASONS 18 BEYOND HIS CONTROL. ASSESSEE SHOULD NOT SUFFER FOR SAME. THE REVISION OF PLAN IS VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STRICT PROVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FO R PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. A T THE SAME TIME, RESTRICTION THEREON TOO HAS TO BE CONSTRUED STRICTLY SO AS TO A DVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVISIONS OF TA XING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUE TO EFFECTUATE THE LEGISLATIVE INTENTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCE S, WE HOLD THAT ASSESSEE IS ENTITLED FOR BENEFIT U/S.80IB(10) OF THE ACT IN RES PECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMIT. THE ASSESSING OFFICER IS D IRECTED ACCORDINGLY. 14.10 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF RUNWAL MULTIHOUSING PVT. LTD. (SUPRA) HAS OBSERVED AS UNDE R : 18. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE B Y BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE ASSESSE E OBTAINED THE PERMISSION FOR CONSTRUCTION OF BUILDINGS A, B, C, D, E, F AND 17 R OW HOUSES ON 12-12-2001. THE ASSESSEE CONSTRUCTED BUILDING NOS. A,C, D AND E AND THE 17 ROW HOUSES AND DROPPED THE IDEA OF CONSTRUCTION OF BUILDING NO S. B AND F BEING UNECONOMICAL AND HAD NOT SUBMITTED ANY REVISED PLAN TO PMC. ALTHOUGH THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE ON 22-0 1-2004, THE SAME WAS NOT RECEIVED BY THE ASSESSEE BEFORE 31-03-2008. IT IS THE CASE OF THE REVENUE THAT DEDUCTION U/S.80IB(10) CANNOT BE AVAILED OF BY THE ASSESSEE SINCE IT HAS NOT CONSTRUCTED ALL THE SIX BUILDINGS AND 17 ROW HOUSES FOR WHICH PERMISSION WAS GRANTED AND COMPLETION CERTIFICATE WAS NOT OBTAINED BEFORE 31-03-2008. IT IS THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSES SEE THAT IT HAS CONSTRUCTED BUILDING NOS. A, C, D AND E AND 17 ROW HOUSES AND B UILDING NOS. B & F BEING NOT FEASIBLE WAS NOT CONSTRUCTED AND THE ASSE SSEE HAS DROPPED THE IDEA OF CONSTRUCTION OF THE SAME. IT IS ALSO THE SUBMIS SION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT IT HAS APPLIED FOR COMPLETION CER TIFICATE ON 22-01-2004 AND SINCE THE PMC HAS A LEGAL PROBLEM, WHICH IS SUBJUDI CE, THE PMC IS NOT ABLE TO GRANT THE COMPLETION CERTIFICATE. IT IS ALSO THE S UBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT CORPORATION HAS START ED LEVYING MUNICIPAL TAXES, THE FLAT OWNERS HAVE STARTED PAYING ELECTRICITY BIL LS AND THE PROJECT ON WHICH BUILDING NOS. A, C, D AND E AND 17 ROW HOUSES ARE C ONSTRUCTED ARE ON A PLOT OF AREA OF MORE THAN 1 ACRE. THEREFORE, THE ASSESSE E IS ENTITLED TO DEDUCTION U/S.80IB(10) ON THE 4 BUILDINGS AND 17 ROW HOUSES W HICH IT HAS COMPLETED. 19. WE FIND THE MANAGING DIRECTOR SHRI PRADEEP AMRU TLAL RUNWAL IN HIS STATEMENT RECORDED DURING THE COURSE OF SURVEY U/S. 133A HAS REPLIED TO QUESTION NOS. 7, 8, 9, 10 & 12 AS UNDER : Q.7. HAVE YOU RECEIVED THE COMPLETION CERTIFICATE FROM PMC FOR RUNWAL PARADISE PROJECT ? ANS. THE COMPLETION CERTIFICATE FOR ROW HOUSES 7 TO 18 WAS RECEIVED. HOWEVER FOR OTHER BUILDINGS ON RUNWAL PARADISE PROJ ECT WE HAVE NOT RECEIVED THE COMPLETION CERTIFICATE AS ON TODAY THOUGH WE HA VE APPLIED FOR THE SAME. Q.8. WHETHER THE CONSTRUCTION IS COMPLETED IN RESPE CT OF ALL THE BUILDINGS AS PER REVISED PLAN DATED 10-01-2003, COMMENCEMENT CER TIFICATE NO.1372? ANS. CONSTRUCTION IS COMPLETED BEFORE 31 ST MARCH 2008 IN THE ENTIRE SCHEME RUNWAL PARADISE TO THE EXTENT THAT WE WANT TO BUILD AND ENJOY THE FSI OF THE PROJECT AND THE AREA USED SO IS ABOVE 1 ACRE. 19 Q.9. IF THE CONSTRUCTION IS COMPLETED BEFORE 31 ST MARCH 2008, WHY YOU HAVE NOT RECEIVED COMPLETION CERTIFICATE FROM PMC FOR AL L BUILDINGS IN RUNWAL PARADISE PROJECT AS ON TODAY? ANS. THE COMPLETION CERTIFICATE ARE DEEMED RECEIVED SINCE WE HAVE APPLIED FOR THE SAME, BUT SINCE THE MATTER IS SUBJUDICE THE PMC IS NOT ABLE TO GRANT THE COMPLETION CERTIFICATE. THE VERY LOCAL AUTHORITY W HICH IS RESPONSIBLE FOR GRANTING THE COMPLETION CERTIFICATE HAS A LEGAL PRO BLEM WHICH IS SUBJUDICE. Q.10. AS STATED ANSWERING THE QUESTION NO.9, PLEASE STATE WHEN YOU HAVE APPLIED FOR COMPLETION CERTIFICATE IN RESPECT OF RU NWAL PARADISE PROJECT AND ALSO SUBMIT THE RELEVANT APPLICATIONS? ANS. WE HAVE APPLIED FOR COMPLETION CERTIFICATE FOR THE ENTIRE PROJECT. WE ARE SUBMITTING HEREWITH THE APPLICATION FOR COMPLET ION CERTIFICATE DATED 22- 01-2004VIDE COMMENCEMENT CERTIFICATE NO.1372 DATED 10-01-2002 AS PER ANNEXURE C. THE COPIES OF ANY FURTHER APPLICATIO N, IF ANY, WE WILL SUBMIT THE SAME ON 2 ND JUNE 2008. Q.12. AS PER REVISED BUILDING LAYOUT SANCTIONED ON 10-01-2003, YOU GOT APPROVAL FOR CONSTRUCTION OF BUILDINGS A TO F AND R OW HOUSES 1 TO 18 IN RUNWAL PARADISE PROJECT. HOWEVER AS SEEN FROM THE LIST OF FLAT HOLDERS SUBMITTED BY YOU AS ANNEXURE D AND ALSO THE INSPE CTION CARRIED OUT AT THE SITE OF RUNWAL PARADISE LOCATED AT S.NO.981, AT PAU D ROAD, KOTHRUD, PUNE, THE CONSTRUCTION OF BUILDINGS B AND F IS YET TO BE COMP LETED. PLEASE GIVE YOUR COMMENT? ANS. YES, I AGREE THAT THE CONSTRUCTION OF BUILDING S B AND F HAVE NOT BEEN CARRIED OUT WITH A PERFECT UNDERSTANDING IN THE MIN D THAT WE WANTED TO GIVE UP THESE TWO WINGS. IN CASE THESE WINGS WOULD HAVE BE EN CONSTRUCTED THEY WOULD HAVE BEEN VERY SHABBY AND BEEN PLACE FOR NON-HYGIEN E IN THE ENTIRE PROJECT. LOOKING AT THE MERITS AND DEMERITS THESE WINGS WERE NOT CONSTRUCTED. FURTHER, BUILDING JUST ONE FLOOR WAS ECONOMICALLY UNVIABLE. 20. SO FAR AS THE FIRST OBJECTION OF THE REVENUE TH AT COMPLETION CERTIFICATE FROM PMC HAS NOT BEEN OBTAINED BY THE ASSESSEE BEFO RE 31-03-2008 WE FIND THE ASSESSEE THROUGH HIS ARCHITECT VIDE APPLICATION DATED 22-01-2004 HAS APPLIED TO PMC FOR OCCUPANCY CERTIFICATE. (PAGE 119 OF THE PAPER BOOK). THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE PMC HAS NOT YET REJECTED THE SAID APPLICATION TILL DATE COULD NOT B E CONTROVERTED BY THE REVENUE. THE FURTHER SUBMISSION OF THE LEARNED COUNSEL FOR T HE ASSESSEE THAT ALL THE FLAT OWNERS/ROW HOUSE OWNERS HAVE BEEN GIVEN POSSESSION BETWEEN 26-10-2002 TO 15-01-2007, I.E.PRIOR TO 31-03-2008 COULD NOT BE CO NTROVERTED BY THE LEARNED DR (PAGE 55 TO 63 OF THE PAPER BOOK). THE LEARNED DR ALSO COULD NOT CONTROVERT THE SUBMISSION OF THE LEARNED COUNSEL FO R THE ASSESSEE THAT PMC HAS STARTED LEVYING MUNICIPAL TAXES AND THE ELECTRICITY METERS ARE IN THE NAME OF THE FLAT OWNERS WHO HAVE STARTED PAYING ELECTRICITY BILLS. 20.1 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF CITY DEVELOPMENT CORPORATION VS. ACIT ITA NO. 57 AND 1 287/PN/2010 ORDER DATED 27-09-2012 HAS HELD AS UNDER : 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. QUITE CLEARLY, THE DISPUTE IS WITH REGARD TO THE COMPLETION CERTIFICAT E OF BUILDING 'E' HAVING BEEN ISSUED BY THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL C ORPORATION, ON 5-5-2008. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) R EQUIRES THAT THE CONSTRUCTION OF THE PROJECT IN QUESTION IS TO BE COMPLETED ON OR BEFORE 31-3-2008. CLAUSE (II) OF EXPLANATION BELOW SECTION 80-IB(10)(A) PRES CRIBES THAT THE DATE OF COMPLETION OF CONSTRUCTION OF 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. IN THE PRESENT CASE, IT HAS BE EN ISSUED ON 5-5-2008 AND 20 HENCE THE CASE SET UP BY THE REVENUE THAT THE COMPL ETION IS BEYOND THE MANDATED DATE OF 31-3-2008. IN THIS BACKGROUND, WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE APPLIED FOR OBTAINING THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING 'E' ON 12-3-2008. FROM THE DISC USSION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, WHEREIN THE FACTUAL ASSERTIONS OF THE ASSESSEE HAVE BEEN REPRODUCED, IT IS QUITE EVIDENT THAT THE ASSESSEE ASSERTED THAT BEFORE 31-3-2008, THE CONSTRUCTION OF BUILDING WAS COMPLETE IN ALL RESPECTS; THAT ELECTRICAL CONNECTION WAS PROVIDED T O EACH FLAT OWNER; ROAD WAS COMPLETE; WATER AND DRAINAGE CONNECTION WAS AVAILAB LE; SEWERAGE SYSTEM WAS OPERATING; CLUB HOUSE WAS FUNCTIONAL; ETC. THE ASSE SSEE ALSO POINTED OUT THAT THE LOCAL AUTHORITY HAD ALSO INITIATED PROPERTY TAX ASSESSMENTS FOR EACH OF THE FLATS AND THE SAME DEMONSTRATED THAT ALL THE FLATS IN THE BUILDING WERE COMPLETE. IN FACT, IN PARA 6.9 OF THE ASSESSMENT OR DER, THE ASSESSING OFFICER NOTICED THAT 'THE FACTS THAT THE FLATS WERE COMPLET ED AND POSSESSION GIVEN WILL NOT COME TO THE RESCUE OF THE ASSESSEE'. THE AFORES AID FINDING OF THE ASSESSING OFFICER SUPPORTS THE ASSERTION MADE BY THE ASSESSEE THAT FACTUALLY SPEAKING CONSTRUCTION OF FLATS IN BUILDING 'E' WAS ALSO COMP LETE AND POSSESSION HANDED OVER TO THE ACTUAL USER/CUSTOMERS PRIOR TO 31-3-200 8. PERTINENTLY, ON THE BASIS OF THE ARCHITECT'S CERTIFICATE CONFIRMING COMPLETIO N OF CONSTRUCTION OF BUILDING, THE ASSESSEE APPLIED FOR THE COMPLETION CERTIFICATE TO THE PUNE MUNICIPAL CORPORATION ON 12-3-2008. IT HAS BEEN POINTED OUT B EFORE US THAT THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL CORPORATION DID NOT R AISE ANY OBJECTION WITH REGARD TO ASSESSEE'S APPLICATION AND THE CERTIFICAT E FOR BUILDING 'E' WAS THEREAFTER ISSUED ON 5-5-2008. THE MOOT QUESTION IS AS TO WHETHER IN SUCH A SITUATION CAN IT BE SAID THAT THE ASSESSEE'S PROJEC T DID NOT COMPLY WITH THE CONDITION PRESCRIBED IN SUB-CLAUSE (I) OF CLAUSE (A ) TO SECTION 80-IB(10) OF THE ACT WHEREBY THE CONSTRUCTION WAS TO BE COMPLETED ON OR BEFORE 31-3-2008. SOMEWHAT SIMILAR SITUATION WAS CONSIDERED BY OUR CO -ORDINATE BENCH IN THE CASE OF HINDUSTAN SAMUTHA AWAS LTD. (SUPRA) WHEREIN ALSO ON THE STRENGTH OF ARCHITECT'S CERTIFICATE, AN APPLICATION FOR OBTAINI NG COMPLETION CERTIFICATE WAS MOVED TO THE LOCAL AUTHORITY ON 25-2-2008 BUT IN AC TUALITY THE COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITY ON 10 -10-2008. THE TRIBUNAL NOTICED THAT THE DELAY IN ISSUING COMPLETION CERTIF ICATE WAS NOT ATTRIBUTABLE TO THE ASSESSEE AS NO OBJECTIONS WERE RAISED BY THE LO CAL AUTHORITY. THE TRIBUNAL AFTER CONSIDERING ITS EARLIER DECISIONS IN THE CASE OF M/S. SATISH BOHRA & ASSOCIATES VS. ACIT IN ITA NO. 713 AND 714/PN/2010 FOR A.Y. 2004-05 AND 2005-06 DATED 7-1-2011; M/S. D.K. CONSTRUCTIONS VS. ITO ITA NO. 243/PN/2010 FOR A.Y. 2006-07; DATED 6-12-2010 AND S ANGHVI AND DOSHI ENTERPRISES VS. ITO AND OTHERS ITA NO. 259 TO 263/M DS/2010 DATED 19-5- 2011 FOR A.Y. 2005-06 AND 2006-07 (TM) HAS CONCLUDE D AS FOLLOWS: 'FROM THE ABOVE, ONCE THIS IS CLEAR THAT THE DATE THAT APPEAR S ON THE ARCHITECT'S COMPLETION CERTIFICATE FILED BEFORE THE LOCAL AUTHO RITY IS RELEVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25- 3-2008 AND THE A SSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMATING THE COMPLET ION OF THE PROJECT. THE SAID CERTIFICATE/INTIMATION WAS ACCEPTED BY THE LOCAL AU THORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORITY HAS NOT R AISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLET ION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTA NCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10 -10-2008 IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE AND OBTAINING THE SAID CERTIFICATE BEFORE 31-3-2008 IS BEYOND THE CONTROL OF THE ASSESSEE. ASSESSEE'S J OB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHORITY BY WAY OF FILING THE REQUISI TE FORMS TOGETHER WITH THE COMPLETION CERTIFICATE GIVEN BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJECTED TO THE SAID APPLICAT ION OF THE ASSESSEE AND THE ARCHITECT BY RAISING ANY OBJECTIONS FOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10-10-2008. THEREFORE, THE DELAY I N GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE. THER EFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFAULTER ON THIS ACCOUNT AND THUS, THE AO HAS ERRED IN DENYING 21 THE DEDUCTION U/S 80-IB(10) OF THE ACT. ACCORDINGLY , THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED' 13. THE AFORESAID DECISION OF THE TRIBUNAL IS CLEAR LY APPLICABLE TO THE FACTS OF THE PRESENT CASE ALSO. IN THE PRESENT CASE, THE COM PLETION CERTIFICATE WAS APPLIED FOR BEFORE 31-3-2008 I.E. ON 12-3-2008. IT IS UNDISPUTABLE THAT THE APPLICATION OF THE ASSESSEE HAS BEEN APPROVED BY TH E LOCAL AUTHORITY WITHOUT RAISING ANY AMENDMENT OR OBJECTION, AS HAS BEEN ASS ERTED BY THE ASSESSEE ALL ALONG AND THE DELAYED ISSUANCE OF THE COMPLETION CE RTIFICATE BY THE LOCAL AUTHORITY ON 5-5-2008, ALBEIT AFTER THE MANDATED DA TE OF 31-3-2008 CANNOT BE ATTRIBUTED TO THE ASSESSEE. IN THIS BACKGROUND OF T HE MATTER, WE THEREFORE, FIND AMPLE FORCE IN THE PLEA OF THE ASSESSEE THAT DENIAL OF DEDUCTION U/S 80-IB(10) ON SUCH SCORE IS UNCALLED FOR. IN CONCLUSION THEREF ORE, IN THE INSTANT FACTUAL BACKGROUND, WE HOLD THAT THE ASSESSEE HAS COMPLIED WITH THE CONDITION OF COMPLETING THE CONSTRUCTION OF THE PROJECT WITHIN T HE MANDATED DATE OF 31-3- 2008 EVEN WITH REGARD TO BUILDING 'E', FOLLOWING TH E PARITY OF THE REASONING LID DOWN IN THE CASE OF HINDUSTAN SAMUTHA AWAS LTD. (SU PRA). . 14. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(1 0) OF THE ACT REQUIRES THAT THE UNDERTAKING, DEVELOPING AND BUILDING A HOUSING PROJ ECT 'COMPLETES SUCH CONSTRUCTION' OR BEFORE 31-3-2008. IN THE PRESENT C ASE, ASSESSEE HAS FACTUALLY ASSERTED RIGHT FROM THE STAGE OF ASSESSMENT PROCEED INGS, THAT THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE IN ALL RESPECTS AS PER SANCTIONED PLAN AND ALL THE FLATS WERE HANDED OVER TO THE ACTUAL USERS/CUSTOMER S PRIOR TO 31-3-2008. IN THE BACKGROUND OF THE AFORESAID FACTUAL POSITION WHICH HAS REMAINED UNCONTROVERTED, IN OUR VIEW, ON A PLAIN READING OF SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) THE CONDITION PRESCRIBED THERE IN IS FULFILLED., INASMUCH AS THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE BEFOR E 31-3-2008. HOWEVER, ON THE READING OF CLAUSE (II) OF THE EXPLANATION BELOW SEC. 80-IB(10)(A) OF THE ACT, IT EMERGES THAT THE COMPLETION OF CONSTRUCTION OF A HOUSING PROJECT IS TO BE TAKEN TO BE THE DATE ON WHICH COMPLETION CERTIFICAT E IS ISSUED BY THE LOCAL AUTHORITY, WHICH IN THE PRESENT CASE IS ISSUED ON 5 -5-2008 I.E. BEYOND THE STIPULATED DATE OF 31-3-2008. THE MOOT QUESTION IS IN CASE THE CONDITION OF COMPLETION CONSTRUCTION CONTAINED IN THE SUBSTANTIV E SECTION 80-0IB(10)(A)(I) IS FACTUALLY FOUND TO BE COMPLIED WITH, CAN THE CON TENTS OF THE EXPLANATION CLAUSE (II) THEREOF, ALTER THE SITUATION? CAN AN EX PLANATION APPENDED TO A SECTION, ENLARGE THE SCOPE OF THE MAIN SECTION SO A S TO MAKE IT MORE ONEROUS FOR A TAX- PAYER? BE THAT AS IT MAY, WE DO NOT DWEL L ON THIS ASPECT ANY FURTHER, AS THE ASSESSEE HAS BEEN FOUND TO BE ELIGIBLE FOR N ECESSARY RELIEF BECAUSE THE CONDITION PRESCRIBED IN SECTION 80-IB(10)(A)(I) OF THE ACT HAS BEEN COMPLIED WITH IN VIEW OF THE STATED PRECEDENTS. WE THEREFORE , SET ASIDE THE ORDER OF THE CIT(A) ON THIS ASPECT AND HOLD THAT THE ASSESSEE CA NNOT BE DENIED THE CLAIM OF DEDUCTION U/S 80-IB(10) ON THE STRENGTH OF NON-ISSU ANCE OF THE COMPLETION CERTIFICATE FOR BUILDING 'E' BY THE PUNE MUNICIPAL CORPORATION BEFORE 31-3- 2008, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 20.2 WE FIND THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TARNETAR CORPORATION (SUPRA) HAS HELD AS UNDER : WITH RESPECT TO THE SECOND CONTENTION, WE MAY RECO RD THAT THE CONTENTION OF THE REVENUE IS THAT THE ASSESSEE DID NOT COMPLETE THE HOUSING PROJECT WITHIN THE STATUTORY TIME FRAME. UNDER SUB -CLAUSE (I) OF CLAUSE (A) OF SECTION 80IB(10), THE ASSESSEE SINCE HAD GOT APPROV AL FOR THE HOUSING PROJECTS FROM THE LOCAL AUTHORITY BEFORE IST APRIL 2004 WAS REQUIRED TO COMPLETE THE CONSTRUCTION LATEST BY 31 ST MARCH 2008. RELYING ON EXPLANATION (II) TO CLAUSE (I), REVENUE CONTENDS THAT SINCE BU PERMISSION WAS GRANTED AFTER MARCH 2008, THE CONSTRUCTION MUST BE DEEMED TO HAVE BEEN COMPLE TED AFTER SUCH DATE. EXPLANATION (II) READS AS UNDER : 22 (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LO CAL AUTHORITY. CIT (APPEALS) AS WELL AS THE TRIBUNAL AFTER DETAILE D DISCUSSION CAME TO THE CONCLUSION THAT SUCH REQUIREMENT WAS NOT MANDAT ORY IN NATURE. IN THE PRESENT CASE, THE ASSESSEE HAD COMPLETED THE CONSTR UCTION WELL BEFORE THE LAST DATE, NAMELY 31 ST MARCH 2008 AND HAD ALSO SOLD SEVERAL UNITS WHICH W AS COMPLETED AND ACTUALLY OCCUPIED, AND IT ALSO APPLIE D FOR BU PERMISSION TO THE LOCAL AUTHORITY. THE LOCAL AUTHORITY, HOWEVER, FOR TECHNICAL REASONS, AT ONE STAGE REJECTED SUCH APPLICATION IN THE YEAR 2006 AN D THEREAFTER UPON REVISED EFFORTS FROM THE ASSESSEE GRANTED THE SAME BY ORDER DATED 19 TH MARCH 2009. WE HAVE PERUSED THE DETAILED DISCUSSION OF THE CIT( APPEALS) AS WELL AS THE TRIBUNAL ON THE ISSUE. IN PARTICULAR, THE TRIB UNAL NOTED THAT THE CONSTRUCTION WAS COMPLETED IN 2006. APPLICATION FO R BU PERMISSION TO THE MUNICIPAL AUTHORITIES WAS FILED ON 15-02-2006 WHICH WAS REJECTED ON 1-07-06. SEVERAL RESIDENTIAL UNITS WERE OCCUPIED SINCE THE S AME WAS DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HAD DONE WITHOU T NECESSARY PERMISSION. THE ASSESSEE HAD ALSO PAID PENALTY AND GOT SUCH OCC UPATION REGULARISED. SEVERAL TENEMENTS WERE SOLD LONG BEFORE THE LAST DA TE. IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE A SSESSEE HAD COMPLETED THE CONSTRUCTION WELL BEFORE 31 ST MARCH 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRUE THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION T O THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE TH EREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIE W THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHIC H DEDUCTION WAS BEING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE A SSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE THE FIN AL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT THE SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF THE MATTER, GRANTING BENEFIT OF DEDUCTION C ANNOT BE HELD TO BE ILLEGAL. IN THE RESULT, THE TAX APPEAL IS DISMISSED. 20.3. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF HINDUSTAN SAMUHA AWAS LTD. VS. ITO VIDE ITA NOS 945 TO 950/PN /2010 ORDER DATED 30- 08-2011 HAS HELD AS UNDER : 7. WE HAVE CONSIDERED THE ABOVE VIEW POINTS OF THE PARTIES IN DISPUTED. WE FIND THAT IT IS A FACT THAT THE ASSESSEE THROUGH ITS ARCHITECT HAD FILED APPLICATION WITH THE AMC FOR ISSUANCE OF OCCUPANCY CERTIFICATE ON 25-3-2008. REQUISITE FEE WAS ALSO PAID BY THE ASSESSEE IN THIS REGARD. AMC DID NOT RAISE ANY OBJECTION TO THE SAID COMPLETION CERTIFICATE OF THE ARCHITECT. THE OCCUPANCY CERTIFICATE DT.10-10-2008 HAS BEEN ISSUED BY THE AM C ONLY ON THE BASIS OF THE SAID APPLICATION DT.25-3-2008. IT IS ALSO AN UNDIS PUTED FACT THAT ISSUANCE OF OCCUPANCY CERTIFICATE IS THE PREROGATIVE OF THE LOC AL AUTHORITY I.E. AMC AND IN THIS REGARD, THE ASSESSEE HAS NO CONTROL AND IT IS BEYOND THE POWER OF THE ASSESSEE TO MAKE THE AMC ISSUE THE SAID COMPLETION/ OCCUPANCY CERTIFICATE BEFORE 31.3.2008. WHAT WAS UNDER THE POWER AND CON TROL OF THE ASSESSEE WAS ONLY TO MOVE THE AMC FOR COMPLETION CERTIFICATE FUL FILLING ALL THE REQUIREMENTS WITH THE AMC FOR ISSUANCE OF OCCUPANCY CERTIFICATE, WHICH THE ASSESSEE HAS DONE IN THE PRESENT CASE. THUS, THE DELAY IN ISSUI NG THE OCCUPANCY CERTIFICATE CANNOT BE ATTRIBUTED ON THE PART OF THE ASSESSEE TO DENY THE CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT ON THE BASIS THAT THE PROJE CT WAS NOT COMPLETED BY 31-3- 23 2008, ESPECIALLY WHEN THERE IS NO OBJECTION RAISED BY THE AMC REGARDING DEVIATION IN THE CONSTRUCTION OF THE PROJECT APPROV ED BY THE AMC. 8. WE HAVE GONE THROUGH THE ORDERS CITED BY THE AS SESSEES REPRESENTATIVE AND FIND RELEVANT PARAGRAPHS ARE REQUIRED TO BE EXTRACT ED FOR COMPLETION OF THE ORDER. THEY ARE AS FOLLOWS. A. EXTRACT FROM THE DECISION OF THE TRIBUNAL IN THE C ASE OF M/S. SATISH BORA & ASSOCIATES VIDE ITA NOS. 713 & 714/PN/2010 19. . 1. IN THE CASE OF PMC, THE COMPLETION CERTIFICATE I N PRESCRIBED FORM ISSUED BY THE LICENSED ARCHITECT ETC. WHO HAS SUPERVISED THE CONSTRUCTION IS FURNISHED WITH FOUR SETS OF COMPLET ION PLAN UNDER RULE 7.6 OF THE DC RULES OF THE PMC. THEREAFTER PMC IS REQUIRED TO RETURN ONE OF THE SETS DULY CERTIFIED AS COMPLETION PLAN T O THE OWNER ALONG WITH THE ISSUE OF FULL OCCUPANCY CERTIFICATE AFTER INSPECTION OF THE WORK UNDER RULE 7.7 OF THE DC RULES. SINCE EXPLATION (I I) TO SECTION 80IB(10)(A) OF THE I.T. ACT REQUIRES COMPLETION CER TIFICATE ISSUED BY THE LOCAL AUTHORITY TO BE TAKEN AS THE DATE OF COMP LETION OF THE CONSTRUCTION, A GENERAL UNDERSTANDING IN OUR VIEW I S THAT A COMPLETION CERTIFICATE WHICH IS ISSUED BY THE LOCA L AUTHORITY AFTER CONDUCTING INSPECTIONS OF CONSTRUCTION BY IT. IN CASE OF PMC, IT IS ONLY OCCUPANCY CERTIFICATE WHICH IS ISSUED ALONGWI TH CERTIFIED COMPLETION PLAN AFTER INSPECTION OF THE CONSTRUCTIO N BY IT, WE HAVE TREATED THE DATE OF ISSUANCE OF SUCH OCCUPANCY CERT IFICATE ALONGWITH CERTIFIED COMPLETION PLAN AS THE DATE OF COMPLETION CERTIFICATE OF THE CONSTRUCTION FOR THE REQUIREMENT OF EXPLANATION (II ) TO SECTION 80IB(10)(A) OF THE I.T. ACT. 2. SINCE INFACT PMC DO NOT ISSUE OCCUPANCY CERTIFIC ATE GENERALLY IN TIME AND WITH THIS UNDERSTANDING THE LEGISLATURE HAVE ALSO INTRODUCED A DEEMING PROVISION OF 21 DAYS TO PUT CO NSTRAINT UPON PMC, WE AFTER DETAILED DELIBERATION IN PRECEDIGN PARAGRA PHS HAVE COME TO A CONCLUSION THAT IN CASE OF SMALL OBJECTIONS OF PMC RAISED AFTER EXPIRY OF DEEMING PERIOD OF 21 DAYS UNDER RULE 7.7 OF DC RULES UNDER PMC, THE DATE WHEN THE APPLICANT ACQUIRED DEEMING SANCTI ON WILL BE TREATED AS THE DATE OF COMPLETION (OCCUPANCY) CERTIFICATE T O MEET OUT THE REQUIREMENT OF EXPLANATION (II) TO SECTION 80IB (10 )(A) OF THE ACT. WE HAVE ALREADY DISCUSSED HEREINABOVE WHAT WOULD BE TH E SMALL OBJECTIONS. IN BRIEF THOSE OBJECTIONS WHICH DO NOT AFFECT THE MAIN PROJECT AND ARE GENERALLY TEMPORARY CONSTRUCTIONS. 20. WE THUS WHILE SETTING ASIDE ORDERS OF THE AUTHO RITIES BELOW DIRECT THE A.O TO ALLOW THE CLAIMED DEDUCTION U/S. 80IB(10) OF THE I.T. ACT 1961 IN THE ASSESSMENT YEARS UNDER CONSIDERATIO N TREATING THE REQUIRED DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT AS THE DATE WHEN ABOVE DISCUSSED DEEMING PROVISION PER IOD OF 21 DAYS EXPIRED I.E. 20.11.20. B. EXTRACT FROM THE DECISION OF THE TRIBUNAL IN TH E CASE OF SANGHVI & DOSHI ENTERPRISE VIDE ITA NO. 259 TO 263/MDS/2010 24. NEXT OBJECTION OF THE ASSESSING OFFICER IS THAT THE PROJECT HAD TO BE COMPLETED ON OR BEFORE 31.03.2008 AND SINCE THE ASSESSEE DID NOT FURNISH THE COMPLETION CERTIFICATE, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION. THE OBJECTION IS TO THE EFFECT THAT THE COMPLETION CERTIFICATE FROM CMDA IS DATED 13.6.2008, I.E. THREE MONTHS AFT ER THE DUE DATE FOR COMPLETING THE PROJECT. IN THIS CONNECTION, IT HA S TO BE NOTED THAT THE COMPLETION CERTIFICATE IS TO BE ISSUED BY THE LOCAL AUTHORITY. THE QUESTION IS, WHETHER CMDA CAN BE CONSIDERED TO BE A LOCAL AUTHORITY OR NOT. THIS ISSUE HAD COME UP BEFORE THE CHENNAI BENCH OF THE 24 TRIBUNAL IN THE CASE OF JAIN HOUSING & CONSTRUCTIO NS LTD. IN ITA NO.1369/MDS/2009 DATED 5.2.2010. IN THAT CASE, ASS ESSEE WAS DENIED DEDUCTION IN THE ABSENCE OF COMPLETION CERTIFICATE BY THE CMDA BUT COMPLETION CERTIFICATE ISSUED BY THE CORPORATION OF CHENNAI WAS PLACED ON RECORD. THE TRIBUNAL IN PARAGRAPH 3.5 OF ITS OR DER STATED THAT THE PROJECT LAYOUT PLAN MAY BE REQUIRED TO BE APPROVED BY THE CMDA BUT AS FAR AS THE CONSTRUCTION OF THE BUILDING IS CONCE RNED, THE LOCAL AUTHORITY, I.E. THE CORPORATION OF CHENNAI IS THE A PPROPRIATE AUTHORITY TO REGULATE THE CONSTRUCTION AS PER THE BUILDING BY E-LAWS AND SANCTION PLANS. WHEN IT IS NOT DISPUTED THAT THE CORPORATIO N IS THE LOCAL AUTHORITY, CERTIFICATE ISSUED BY IT CANNOT BE DISRE GARDED. THE ASSESSEE HAS PLACED ON RECORD THE COMPLETION CERTIFICATE ISS UED BY THE CORPORATION BY WAY OF ADDITIONAL EVIDENCE. SINCE T HE ALLOWABILITY OF THE ENTIRE DEDUCTION DEPENDS ON ALL THE CONDITIONS BEING FULFILLED DEDUCTION DEPENDS ON ALL THE CONDITIONS BEING FULFI LLED, WE ADMIT THIS ADDITIONAL EVIDENCE. THE CERTIFICATE CLEARLY MENTI ONS THAT THE BUILDING WAS INSPECTED ON 23.11.2007 AND THAT IT IS FOUND TO BE SATISFIED THE BUILDING PERMIT CONDITIONS. WE MAY ALSO MENTIONS THAT THE ROLE OF CMDA IS QUITE DISTINCT FROM THAT OF THE CORPORATION . CMDA LOOKS AT THE PLANS FROM THE PERSPECTIVE OF THE DEVELOPMENT A ND URBANISATION OF THE CITY AS A WHOLE. ON THE OTHER HAND, THE ROLE OF THE CORPORATION WHILE ISSUING COMPLETION CERTIFICATE IS TO SEE THAT THE UNIT IS HABITABLE IN ALL RESPECTS LIKE CIVIC AMENITIES AND SO ON. EVEN FOR THE SAKE OF ARGUMENT IF THE CMDA CERTIFICATE IS TO BE CONSIDERE D, THEN IN THAT CASE, THE ASSESSEE DID APPLY FOR THE COMPLETION CERTIFICA TE TO CMDA CERTIFICATE ON 13.3.2006. IT IS A DIFFERENT MATTER THAT CMDA RAISED CERTAIN OBJECTIONS AND THE MATTER WENT UPTO THE HO NBLE HIGH COURT ALSO. HOWEVER, THE FACT REMAINS THAT THE PROJECT W AS COMPLETED MUCH BEFORE THE DUE DATE, MAY BE WITH CERTAIN DEFECTS. ALSO, IT HAS TO BE NOTED THAT THE CMDA CERTIFICATE IS DATED 13.6.2008, I.E. ONLY TWO MONTHS AND THIRTEEN DAYS BEYOND THE DUE DATE. IT I S INCONCEIVABLE THAT THE TYPE OF DEFECTS WHICH WERE POINTED OUT BY THE C MDA COULD HAVE BEEN RECTIFIED IN SUCH A SHORT PERIOD. BE THAT AS IT MAY, THE HONBLE HIGH COURT ALSO RATIFIED THE DEVIATIONS AND DIRECTE D THE CMDA TO CONSIDER THE EXPLANATION OF THE ASSESSEE. ALL THE SE FACTS GO TO POINT THAT THE PROJECT WAS INDEED COMPLETED BEFORE THE 31 .3.2008. THUS, THIS GROUND ALSO HAS NO FORCE TO DENY THE ASSESSEE THE I MPUGNED DEDUCTION. C EXTRACT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. D.K.CONSTRUCTION VIDE ITA 243/IND/2010 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND REL EVANT MATERIAL PLACED ON RECORD TOWARDS WHICH OUR ATTENTION WAS IN VITED DURING THE COURSE OF HEARING BY THE LD. AUTHORIZED REPRESENTAT IVE AND THE LD. SENIOR D.R. PROVISIONS OF SECTION 80IB ALLOWS CLAI M FOR DEDUCTION IN RESPECT OF HOUSING PROJECT, WHICH HAS BEEN APPROVED PRIOR TO 1.4.2004 AND ALSO COMPLETED BEFORE 31.3.2008. DURING THE C OURSE OF ASSESSMENT WITH REGARD TO ASSESSEES CLAIM OF DEDUCTION U/S 80 IB IN RESPECT OF ITS D.K.HONEY HOMES PROJECT, THE AO HAS ASKED THE ASSES SEE TO FURNISH THE CERTIFICATE OF COMPLETION OF THIS PROJECT M/S. D.K.HONEY HOMES. THE AO ALSO DIRECTLY CALLED INFORMATION FROM THE LO CAL AUTHORITIES BY ISSUING SUMMONS U/S.133(6) AND A LETTER WAS ISSUED BY THE COMPETENT AUTHORITY DATED 11 TH NOVEMBER, 2008, CONFIRMING THAT NO COMPLETION CERTIFICATE HAS BEEN ISSUED BY THIS OFFICE. ACCORD INGLY, THE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB WAS DECLINED. SECTIO N 80IB CLEARLY DEFINES THE DATE OF COMPLETION AS DATE OF COMPLETI ON OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DAT E ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING P ROJECT IS ISSUED BY 25 THE LOCAL AUTHORITIES, IT MEANS LOCAL AUTHORITIES IS COMPETENT TO CERTIFY THE DATE OF COMPLETION OF HOUSING PROJECT. THE DATE OF ISSUE OF SUCH LETTER BY THE LOCAL AUTHORITIES IS NOT SO CRUC IAL BUT IT SHOULD HAVE CLEARLY MENTIONED THE DATE OF COMPLETION OF PROJECT . WHEN THE PROJECT IS COMPLETED ON 31.3.2008 AND THE ASSESSEE HAS INFO RMED REGARDING SUCH COMPLETION, THE LOCAL AUTHORITIES MAY TAKE ITS OWN TIME FOR ISSUE OF CERTIFICATE, WHICH MAY BE EVEN AFTER 6-7 MONTHS, BUT THE LETTER SO ISSUED BY THE LOCAL AUTHORITIES SHOULD CLEARLY MENT ION THE DATE OF COMPLETION OF SUCH PROJECT. MERELY BECAUSE SUCH CE RTIFICATE IS ISSUED AFTER GAP OF 8-9 MONTHS OR EVEN ONE YEAR, WILL NOT ADVERSELY AFFECT THE ASSESSEE IF IT HAS MENTIONED CLEARLY THE DATE OF CO MPLETION OF PROJECT PRIOR TO 31.3.2008. ONCE THE LETTER FOR COMPLETI ON OF PROJECT IS GIVEN BY THE ASSESSEE TO THE LOCAL AUTHORITY, IT IS THE D UTY OF THE LOCAL AUTHORITY TO VERIFY PHYSICALLY THE PROJECTS STATED TO BE COMPLETED FROM ITS OWN PARAMETERS. THIS PROCESS MAY TAKE TIME AN D, THEREFORE, THE DATE OF ISSUE OF LETTER IS NOT SO CRUCIAL TO DETERM INE THE ASSESSEES ELIGIBILITY FOR CLAIM OF DEDUCTION AS PER EXPLANATI ON (II) OF SECTION 80IB(10)(A) OF THE INCOME-TAX ACT, 1961. WHAT IS CRUCIAL IS DATE MENTIONED IN THE LETTER SO ISSUED CERTIFYING COMPLE TION OF THE PROJECT. THUS, THE DATE OF ISSUE OF LETTER IS NOT IMPORTANT, BUT THE DATE MENTIONED IN THE LETTER CERTIFYING COMPLETION OF PROJECT IS I MPORTANT. WE, THEREFORE, DO NOT FIND MAY MERIT IN THE OBSERVATION OF THE LOWER AUTHORITIES TO THE EFFECT THAT THE DATE OF COMPLETI ON SHALL BE TAKEN THE DATE ON WHICH CERTIFICATE IS PHYSICALLY ISSUED BY T HE LOCAL AUTHORITIES. 9. FROM THE ABOVE, ONE THIS IS CLEAR THAT THE DATE THAT APPEAR ON THE ARCHITECTS COMPLETION CERTIFICATE FILED BEFORE THE LOCAL AUTHORITY IS A RELEVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25-3-200 8 AND THE ASSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMAT ING THE COMPLETION OF THE PROJECT. THE SAID CERTIFICATE/ INTIMATION WAS ACCEP TED BY THE LOCAL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORI TY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. I N SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10-10-2008 IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE AND OBTA INING THE SAID CERTIFICATE BEFORE 31.3.2008 IS BEYOND THE CONTROL OF THE ASSES SEE. ASSESSEES JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH T HE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHORITY BY WA Y OF FILING THE REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIFICATE GIVE N BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJE CTED TO THE SAID APPLICATION OF THE ASSESSEE AND THE ARCHITECT BY RAISING ANY OB JECTIONS NOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10.10.200 8. THEREFORE, THE DELAY IN GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTR IBUTABLE TO THE ASSESSEE. THEREFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFA ULTER ON THIS ACCOUNT AND THUS, THE AO HAS ERRED IN DENYING THE DEDUCTION U/S 80IA(10) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVE RSED. THUS, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED . 20.4. IN VIEW OF THE ABOVE DECISIONS WE ARE OF THE CONSIDERED OPINION THAT SINCE THE ASSESSEE HAS DONE WHATEVER POSSIBLE ON HI S PART, I.E. DULY APPLIED TO PMC FOR ISSUE OF COMPLETION CERTIFICATE, HANDED OVE R POSSESSION OF THE FLATS/ROW HOUSES TO THE RESPECTIVE BUYERS, PMC HAS STARTED LEVYING MUNICIPAL TAXES AND ELECTRICITY BILLS PAID BY RESPECTIVE OWNE RS, THEREFORE, DEDUCTION U/S.80IB(10) UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE CANNOT BE DENIED TO THE ASSESSEE FOR NON-RECEIPT OF COMPLETION CERTIFIC ATE FROM PMC BEFORE 31-03- 2008 WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE. THIS VIEW OF OURS IS FORTIFIED BY OUR DECISION IN THE CASE OF M/S. RAMSU KH PROPERTIES VS. DCIT VIDE ITA NO.84/PN/2011 ORDER DATED 25-07-2012 FOR A.Y. 2 007-08 (WHEREIN BOTH OF US ARE PARTIES) WHEREIN IT HAS BEEN HELD AS UNDE R: 26 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT THE ASSESSEE IS A FIRM ENGAGED IN BUSI NESS OF BUILDER AND PROMOTER. THE ISSUE BEFORE US IS REGARDING ALLOWAB ILITY OF DEDUCTION U/S.80IB(10) OF THE ACT ON PARTIALLY COMPLETE PROJE CT. THE ASSESSING OFFICER HAS DENIED THE DEDUCTION ON THE GROUND THAT PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED TIME. THERE IS NO D ISPUTE WITH REGARD TO OTHER CONDITIONS LAID U/S.80IB(10) OF THE ACT, I.E. , COMMENCEMENT OF PROJECT, AREA OF LAND OF PROJECT, ETC. ASSESSEES HOUSING PROJECT WAS APPROVED VIDE COMMENCEMENT CERTIFICATE NO.3837/04 D ATED 13.01.2005 OUT OF WHICH COMPLETION CERTIFICATE WAS OBTAINED AN D FURNISHED BEFORE THE ASSESSING OFFICER FOR 173 OUT OF 205 FLATS. SA ME WAS REJECTED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE REQUEST FOR GRANTING WHOLE DEDUCTION IN RESPECT OF WHOLE PROJEC T HAS RIGHTLY BEEN REJECTED BECAUSE DEDUCTION U/S.80IB(10) COULD NOT B E GRANTED TO ASSESSEE ON INCOMPLETE CONSTRUCTION AT RELEVANT POI NT OF TIME. REGARDING PROPORTIONATE DEDUCTION IN RESPECT OF 173 OF 205 FLATS OF PROJECT COMPLETED AS RECOGNIZED BY LOCAL AUTHORITY, I.E., PMC IN ITS COMPLETION CERTIFICATE NO.BCO/03/01333 DATED 31.03. 2008, THE LD. AUTHORISED REPRESENTATIVE HEAVILY RELIED ON DECISIO N OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRIGADE ENTERPRIS ES P. LTD. (SUPRA), AIR DEVELOPER (SUPRA), SHETH DEVELOPERS (S UPRA) AND ALSO G.V.CORPORATION (SUPRA), WHEREIN DEDUCTION U/S.80IB (10) WAS DENIED AS SIZE OF SOME OF THE RESIDENTIAL UNITS EXCEEDED P RESCRIBED LIMIT AS LAID DOWN U/S.80IB(10) OF THE ACT. ABOVE MENTIONED DECI SIONS ARE APPLICABLE IN THEIR OWN SPHERE, I.E. ON POINT OF EX CESS AREA OF SOME OF THE FLATS WHICH HOLD GOOD IN ITS OWN SPHERE. HOWEV ER, IN CASE BEFORE US, DEDUCTION U/S.80IB(10) OF THE ACT HAS BEEN REJE CTED ON THE GROUND THAT CONDITION OF COMPLETION OF PROJECT BEFORE THE DUE DATE I.E., 31.03.2008 AS LAID DOWN U/S.80IB(10)(C) OF THE ACT, HAS NOT BEEN COMPLIED BY ASSESSEE WHICH IS BASIC CONDITION FOR A LLOWABILITY OF DEDUCTION U/S.80IB(10) OF THE ACT. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (SUPRA), WHEREIN CONDITION OF COMPL ETION AS LAID DOWN IN SECTION 80IB(10)(A) COULD NOT BE COMPLIED WITH B ECAUSE OF A STAY BEING GRANTED BY MRTP COURT. THUS FAULT OF INCOMPLE TION OF CONSTRUCTION WAS NOT ATTRIBUTABLE TO ASSESSEE. IN CASE SUCH A CONTINGENCY EMERGES WHICH MAKES THE COMPLIANCE WITH PROVISION IMPOSSIBLE, THEN BENEFIT BESTOWED ON AN ASSESSEE CA NNOT BE COMPLETELY DENIED. SUCH LIBERAL INTERPRETATION SHOULD BE USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLETING PROJECT IN T IME FOR THE REASONS BEYOND HIS CONTROL. IN CASE BEFORE US, AS STATED O N BEHALF OF ASSESSEE, THAT ASSESSEE SUBMITTED CERTAIN MODIFICATIONS/RECTI FICATIONS FOR TOP FLOORS OF BUILDING. THE SAID MODIFICATION/RECTIFIC ATION COULD NOT BE COMPLETED AS LOCAL AUTHORITY COULD NOT APPROVE THE MODIFICATION AS THEIR FILES HAVE BEEN TAKEN OVER BY CONCERN INTELLI GENCE DEPARTMENT FOR INVESTIGATION OF VIOLATION OF URBAN LAND CEILING AC T APPLICABLE TO LAND IN QUESTION AT RELEVANT POINT OF TIME. THIS FACT HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. THUS, ASSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELLED THE IMPOSSIBILITY ON PART OF THE ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME. I T IS SETTLED LEGAL POSITION THAT THE LAW ALWAYS GIVE REMEDY AND THE LA W DOES WRONG TO NO ONE. WE AGREE TO PROPOSITION PUT FORWARD BY LD. DE PARTMENTAL REPRESENTATIVE THAT PLAIN READING OF SECTION 80IB(1 0) OF THE ACT SUGGESTS ABOUT ONLY COMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONGWITH THE WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMAL CIRCUMSTANCES. HOWEVER, IN CASE BEFORE US, ASSESSEE WAS PREVENTED BY REASONABLE CAUSE TO COMPL ETE CONSTRUCTION IN TIME DUE TO INTERVENTION OF CID ACTION ON ACCOUN T OF VIOLATION OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. 27 ASSESSEE WAS INCAPACITATED TO COMPLETE THE SAME IN TIME DUE TO REASONS BEYOND HIS CONTROL. ASSESSEE SHOULD NOT SUFFER FOR SAME. THE REVISION OF PLAN IS VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STRICT PROVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONST RUED LIBERALLY AND THAT PROVISION FOR PROMOTING ECONOMIC GROWTH HA S TO BE INTERPRETED LIBERALLY. AT THE SAME TIME, RESTRICTI ON THEREON TOO HAS TO BE CONSTRUED STRICTLY SO AS TO ADVANCE THE OBJECT OF P ROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVISIONS OF TAXING STATUT E SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUE TO EFFECTUAT E THE LEGISLATIVE INTENTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCE S, WE HOLD THAT ASSESSEE IS ENTITLED FOR BENEFIT U/S.80IB(10) OF TH E ACT IN RESPECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMIT. THE ASSESS ING OFFICER IS DIRECTED ACCORDINGLY. 7. AS A RESULT, THE APPEAL OF THE ASSESSEE IS DISPO SED OFF AS INDICATED ABOVE. IN THE LIGHT OF THE ABOVE DISCUSSION THE ORDER OF T HE CIT(A) DENYING BENEFIT OF DEDUCTION U/S.80IB(10) FOR NON-RECEIPT OF COMPLETIO N CERTIFICATE IS SET-ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSU E ARE ALLOWED. 14.11 IN VIEW OF THE ABOVE DECISIONS THE FIRST ISSUE O N WHICH THE LD.CIT(A) DENIED THE DEDUCTION U/S.80IB(10) I.E., THE PROJECT IS NOT COMPLETE BEFORE 31-03-2008 IS NOT CORRECT SINCE THE ASSESSEE IN THE INSTAN T CASE HAS APPLIED FOR THE COMPLETION OF THE PROJECT VIDE LETT ER DT. 04-04-2006 AND THE PMC HAS ISSUED CERTIFICATE ON 31-03-2010 WITH REFE RENCE TO THE APPLICATION DT. 04-04-2006, THEREFORE, THE COMPLETI ON CERTIFICATE BY PMC RELATES BACK TO THE DATE OF APPLICATION, I.E. 04-04- 2006 AND, THEREFORE, IN OUR CONSIDERED OPINION THE ASSESSEE HAS COMPLETED THE PRO JECT BEFORE 31- 03-2008. SO FAR AS THE SECOND ISSUE IS CONCERNED THE ASSE SSEE HAS DULY APPLIED FOR ISSUE OF COMPLETION OF BUILDINGS I+K OF PR OJECT B ON 04-04- 2006 AND HAS HANDED OVER THE FLATS TO THE CUSTOMERS, TH AT THEY HAVE UNDERTAKEN FOR MAINTENANCE CHARGES AND HAVE STARTED P AYING ELECTRICITY CHARGES. THE ASSESSEE HAS DONE EVERYTHING POSSIBLE ON ITS PART FOR ISSUANCE OF COMPLETION CERTIFICATE. THEREFORE, THE A SSESSEE CANNOT BE HELD RESPONSIBLE FOR NON-ISSUANCE OF COMPLETION CERTIFICATE BY PMC SINCE THE DELAY IS NOT ATTRIBUTABLE TO THE ASSESSEE. 15. THE THIRD ISSUE ON WHICH THE LD.CIT(A) UPHELD THE DISALLOWANCE U/S.80IB(10) IS THAT THE ASSESSEE HAD CONSTRUCTED SHOPS ADME ASURING ABOUT 9472 SQ.FT. OUT OF THE AGGREGATE BUILT UP AREA OF 1,16,433 SQ.FT. AND THEREFORE THE COMMERCIAL AREA IS 8.37% OF THE AGGRE GATE BUILT UP AREA AND THEREFORE IS IN EXCESS OF THE PRESCRIBED LIMIT U/S.80IB( 10). WE FIND, THERE IS NO DISPUTE TO THE FACT THAT THE PROJECT, IN THE IN STANT CASE, IS APPROVED ON 11-01-1999 VIDE COMMENCEMENT CERTIFICATE NO.2117 FO R PLOT NO.3. SIMILARLY, THE PMC APPROVED THE FIRST BUILDING PLAN IN RESPECT OF PLOT NO.4 VIDE COMMENCEMENT CERTIFICATE NO.4410 DATED 06-03-2 000. THUS, THE HOUSING PROJECT HAS BEEN APPROVED BEFORE 31-03-2005. IT HAS BEEN HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIATES REPORTED IN 333 ITR 289 THAT THE HOUSING PRO JECT APPROVED BEFORE 31-03-2005 CAN INCLUDE COMMERCIAL AREA. IT IS THE CASE OF THE REVENUE THAT THE RATIO OF BRAHMA ASSOCIATES WILL NOT B E APPLICABLE FOR A.Y. 2005-06 AND SUBSEQUENT YEARS SINCE IN THE CASE OF BRAHMA ASSOCIATES THE ASSESSMENT YEAR INVOLVED WAS2003-04 AND THE POSITION WOUL D BE DIFFERENT W.E.F. A.Y. 2005-06. 28 15.1 WE FIND THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MANAN CORPORATION AFTER CONSIDERING THE DECISION OF HONBL E BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES HAS HELD AS UNDER: AS MENTIONED HEREINABOVE CRITERIAS TO HOLD THIS AM ENDMENT RETROSPECTIVE ARE ABSENT THERE IS NO AS EXPLICIT AND SPECIFIC WORDING EXPRESSING RETROSPECTIVITY AND EVEN IF IT IS ASSUMED FOR THE SAKE OF ARGUMENTS THA T THE SAME IS TO BE READ BY IMPLICATION THE SAME DOES NOT APPEAR TO BE REASONAB LE BUT, IN FACT EMERGES TO BE HARSH AND UNREASONABLE WHEN Y COMES TO IMPLEMENTATI ON. 31. AGAIN, AS HELD IN CASE OF CIT VS. J.H. GOTIA(SUPRA) BY THE APEX COURT SUCH STRICT CONSTRUCTION OF THE STATUTE IF LEADS TO ABSU RD INTERPRETATION THE SAME MAY NOT SUBSERVE THE INTENT AND OBJECT OF LEGISLATION. 32. AGAIN, AS HELD IN THE CASE OF MYSORE MINERALS L TD. VS. COMMISSION OF INCOME-TAX REPORTED IN 239 ITR 775, APEX COURT WITH TWO POSSIBILITIES OF INTERPRETATION OF A TAXING STATUTE, ONE WHICH IS FA VOURABLE TO THE ASSESSEE SHOULD BE ALWAYS PREFERRED. 33. AS ALSO LAID DOWN IN THE CASE OF BAJAJ TEMPO LT D. VS. COMMISSIONER OF INCOME-TAX REPORTED IN 196 ITR 188 (SC), TAXING STA TUTE GRANTING INCENTIVES FOR PROMOTING ECONOMIC GROWTH AND DEVELOPMENT SHOUL D BE LIBERALLY CONSTRUED TO FACILITATE AND ADVANCE THE OBJECTIVES OF THE PROVIS ION. 34. ABOVE DISCUSSION CUMULATIVELY WHEN EXAMINED WIT H THE OBJECTIVES AND INTENT IT SOUGHT TO ACHIEVE IN BRINGING ABOUT THE S AID PROVISION OF SECTION 80IB(10), THIS AMENDED TAXING STATUTE REQUIRES TO BE INTERPRE TED IN FAVOUR OF THE ASSESSEE RATHER THAN INSISTING UPON STRICT COMPLIANCE LEADIN G TO ABSURDITY. 35. IT CAN BE ALSO HELD THAT THIS BEING A SUBSTANTI VE AMENDMENT AND NOT A CLARIFICATORY AMENDMENT, THE AMENDMENT OF THIS NATU RE CANNOT HAVE RETROSPECTIVE EFFECT. 15.2 SIMILAR VIEW HAS BEEN TAKEN BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AKRUTI JV VS. DCIT REPORTE D IN 39 SOT 498 WHERE IT HAS BEEN HELD THAT LAW AS IT EXISTED IN THE A.Y. 2004-05 WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL FOR SLUM REHABILITATION AND THE PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACCORDED ON 17- 11-2003 AND WHEN THE ASSESSEE COMMENCED THE DEVELOPMENT IS TO BE APPLIED AND ACCORDINGLY IT WAS HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S.80IB(10) FOR A.Y. 2006-07 15.3 THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF O PEL SHELTERS VS. ACIT VIDE ITA NO.219/PN/2009 AND D.S. KULKARNI AND ASSOCIATES VIDE ITA NIO.17/PN/2009 FOLLOWING THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE HIRANANDANI AKRUTI JV (SUPRA) H AS HELD THAT IN THOSE APPROVED PROJECTS WHERE CONSTRUCTION HAS BEEN STARTED M UCH EARLIER THAN 01-04-2005, THE ASSESSEES ARE REQUIRED TO COMPLETE THE P LAN AS IT HAS BEEN APPROVED. 15.4 IN VIEW OF THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF MANAN CORPORATION(SUPRA) IT HAS TO BE HELD THAT THE LAW AS EXISTED IN THE YEAR WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL AND THE PERM ISSION IS GRANTED BY THE LOCAL AUTHORITY AND THE ASSESSEE COMMENC ES DEVELOPMENT IS TO BE APPLIED IN DETERMINING ITS ELIGIBILITY OF TH E DEDUCTION CLAIMED U/S.80IB(10). THE ASSESSEE IN THE INSTANT CASE CANNOT BE DENIED THE BENEFIT OF DEDUCTION FOR CONSTRUCTION OF COMMERCIAL AREA WHICH IS MORE THAN 2000 SQ.FT. OR 5% OF THE BUILT UP AREA OF THE H OUSING PROJECT WHICHEVER IS LESS. IT HAS BEEN HELD BY VARIOUS JUDICIAL DECISIONS INCLUDING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CA SE OF MANAN 29 CORPORATION (SUPRA) THAT SUCH AMENDMENT TO PROVISIONS OF SECTION 80IB(10) IS PROSPECTIVE IN NATURE AND NOT RETROSPECTIV E. WE, THEREFORE, HOLD THAT THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF DEDUCTION U/S.80IB(10) ON THIS ISSUE ALSO. 15.5 SO FAR AS THE 2 DECISIONS RELIED ON BY THE LD. DE PARTMENTAL REPRESENTATIVE WE FIND BOTH THESE DECISIONS ARE DISTINGU ISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. SO FAR A S THE DECISION OF THE TRIBUNAL IN THE CASE OF SAINATH ESTATES PVT. LTD. (SUP RA) RELIED ON BY THE LD. DEPARTMENTAL REPRESENTATIVE IS CONCERNED WE FIND THE SAME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE ASSESSEE COULD NOT EXPLAIN THE REASON FOR NON ISSUANCE OF COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY IN THE CASE OF SAINATH ESTATES PVT. LTD. (SUPRA). HOW EVER, IN THE INSTANT CASE THE COMPLETION CERTIFICATE HAS BEEN ISSUED ON 30- 03-2010 WITH RESPECT TO THE OCCUPANCY CERTIFICATE ISSUED BY THE ARC HITECT ON 04-04-2006. FURTHER, THE DELAY IN ISSUE OF COMPLETION CERTIFICAT E WAS NOT FOR COMPLETING THE PROJECT BUT ON TECHNICAL GROUNDS, I.E . NON PAYMENT OF THE COMPOUNDING FEES OF RS.2,41,865/- FOR UNAUTHORIZED CO NSTRUCTIONS WHICH THE ASSESSEE HAS DENIED ALL ALONG AND NON ALLOTMENT OF C ERTAIN BUILT UP AREA TO THE ECONOMICALLY WEAKER SECTION OF THE SOCIET Y WHICH THE ASSESSEE HAS COMPLIED BEFORE 31-03-2008. SO FAR AS THE DECISIO N IN THE CASE OF EVEREST HOME CONSTRUCTION (INDIA) PVT. LTD. (SUPRA) T O THE PROPOSITION THAT THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2 004 IS APPLICABLE TO A.Y. 2005-06 AND ONWARDS, EVEN IF THE PROJECT IS APPR OVED BEFORE 31-03- 2005 WE FIND THE SAME IS NOT APPLICABLE IN VIEW OF TH E DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF MANAN CORPORATION (SUPRA) WHICH HAS ALREADY BEEN REPRODUCED. FURTHER, THE DECISION OF A HIGH COURT WOULD PREVAIL UPON THE DECISION OF THE TRIBUNAL WHICH IS A LOWER FORUM THAN THE HIGH COURT. 15.6 THEREFORE, IN VIEW OF THE ABOVE DISCUSSIONS WE HOL D THAT THE ASSESSEE IN THE INSTANT CASE IS ENTITLED TO THE BENEFIT OF DEDUCTION U/S.80IB(10) ON ITS HOUSING PROJECTS. ACCORDINGLY, THE FIRST GROUND OF THE ASSESSEE IS ALLOWED. SINCE THE ASSESSEE SUCCEEDS ON THE FIRST GROUND THE ALTERNATE CONTENTION FOR PROPORTIONATE DEDUCTION BE COME ACADEMIC IN NATURE AND THEREFORE IS NOT REQUIRED TO BE ADJUDICAT ED. 7.2 SIMILARLY, THE PUNE BENCH OF THE TRIBUNAL IN TH E CASE OF M/S. RAVIRAJ KOTHARI PUNJABI ASSOCIATES (SUPRA) AFTER CO NSIDERING THE DECISION OF HONBLE MUMBAI HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) AND THE DECISION OF THE MUMBAI BENCH OF THE ITAT I N THE CASE OF EVEREST HOME CONSTRUCTION (INDIA) PVT. LTD. (SUPRA) HAS ALL OWED THE CLAIM OF PROPORTIONATE DEDUCTION BY OBSERVING AS UNDER : 6. SO, HOWEVER, AT THE TIME OF HEARING THE LD.CIT DR APPEARING FOR THE REVENUE CONTENDED THAT THE TRIBUNAL HELD THAT THE R ESTRICTIONS ON PERMISSIBLE COMMERCIAL AREA AS PER SECTION 80IB(10)(D) OF THE ACT WAS INSERTED BY THE FINANCE (NO.2) ACT 2004 W.E.F.01-04- 2005 AND THAT SUCH AMENDMENT WAS PROSPECTIVE IN NATURE AND WOULD NOT APP LY TO THE PROJECT IN QUESTION. THE LD. CIT DR SUBMITTED THAT IN THIS CO NTEXT THE MUMBAI 30 BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. EVEREST HOME CONSTRUCTION (INDIA) (P) LTD. VIDE ITA NO.7021/MUM/2008 ORDER DA TED 12-09-2012 HAS TAKEN A CONTRARY VIEW TO HOLD THAT THE COMMERCIAL A REA LIMIT INTRODUCED BY THE FINANCE (NO.2) ACT 2004 W.E.F.01-04-2005 BY INSE RTION OF CLAUSE (D) SECTION 80IB(10) SHALL BE APPLICABLE TO EVALUATE THE DEDUCTIONS CLAIMED BY THE ASSESSEE FROM THE A.Y. 2005-06 ONWARDS. 7. WE HAVE CAREFULLY CONSIDERED THE ARGUMENT SET UP B Y THE LD. DEPARTMENTAL REPRESENTATIVE AND FIND THAT THERE IS NO REASON TO DEPART FROM THE POSITION DECIDED BY THE TRIBUNAL IN THE ASSESSE ES OWN CASE FOR THE ASSESSMENT YEARS 2003-04 TO 2006-07 VIDE ITS ORDER DA TED 23-11- 2012 (SUPRA). THE TRIBUNAL HAD CONCLUDED THAT THE AMENDMENT MADE BY THE FINANCE (NO.2) ACT 2004 W.E.F. 01-04-2005 BY IN SERTION OF CLAUSE (D) OF SECTION 80IB(10) WOULD NOT OPERATE RETROSPECTIVELY AN D THAT IT WOULD BE PROSPECTIVE IN NATURE. ACCORDING TO THE TRIBUNAL, T HE ASSESSEE HAD COMMENCED ITS PROJECT IN QUESTION PRIOR TO 01-04-2005 IN TERMS OF THE APPROVAL GRANTED BY A LOCAL AUTHORITY AND THE SAID P ROJECT ALSO STANDS COMPLETED ON 20-03-2004 AND THUS THE AMENDMENT MADE BY THE FINANCE (NO.2) ACT 2004 CANNOT BE INVOKED TO DIS-ENTITLE ASSE SSEES CLAIM OF DEDUCTION U/S.80IB(10) FOR THE ASSESSMENT YEARS 2005-06 A ND 2006-07 AS WELL. THE AFORESAID CONCLUSION OF THE TRIBUNAL WAS AL SO BASED ON CERTAIN PRECEDENTS WHICH ARE AS UNDER : 1. OPEN SHELTERS PVT. LTD. VS. ACIT (ITA NO.219/PN/ 2010 FOR A.Y. 2005- 06 ORDER DATED 31-05-2010 2. G.K. BUILDERS IN ITA NO.1077 AND 1078/PN/2010 FO R A.Y. 2005-06 AND 2006-07 ORDER DATED 30-07-2012 3. HIRANANDANI AKRUTI JV VS. DY. CIT REPORTED IN 3 9 SOT 498 (MUMBAI) THE TRIBUNAL ALSO CONSIDERED THE JUDGMENTS OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (2011) 333 ITR 2 89 (BOM.) TO HOLD THAT AMENDMENTS IN QUESTION ARE TO BE SEEN AS PROSPECTIV E IN NATURE. 8. APART FROM THE AFORESAID WE MAY ALSO NOTICE THE JU DGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MANAN CORP ORATION VS. ACIT DATED 03-09-2012 WHEREIN THE BONE OF CONTENTION WAS THE APPLICABILITY OF THE REQUIREMENTS CONTAINED IN CLAUSE (D) OF SECTION 80 IB(10) OF THE ACT. THE REVENUE HAD CANVASSED THAT THE PROVISION OF SECTION 80IB(10)(D) OF THE ACT WAS APPLICABLE FROM 01-04-2005 AND WAS TO BE CONSIDERED FOR A.Y. 2006-07 AS WELL, REGARDLESS OF THE DATE OF APPROVAL OF THE PROJECT IN QUESTION. THE HONBLE GUJARAT HIGH COURT, BY REFERR ING TO THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) AND ALSO THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. M/S. ANRIYA PROJECT MANAGEMENT VIDE ITA NO.13 8 OF 2010 DATED 29-02-2012 HELD THAT SUCH AN AMENDMENT WOULD NOT AP PLY TO A PROJECT WHICH IS APPROVED PRIOR TO 01-04-2005 AND THAT IN TH IS LIGHT THE PROSPECTIVE NATURE OF THE AMENDMENT, AS HELD BY THE H ONBLE BOMBAY HIGH COURT, IS TO BE VIEWED. 9. PERTINENTLY IN THE CASE BEFORE HONBLE GUJARAT HI GH COURT THE CLAIM OF THE ASSESSEE WAS DENIED BY THE TRIBUNAL RELYING ON TH E JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCI ATES (SUPRA) HOLDING THAT THE RESTRICTION SET OUT IN CLAUSE(D) OF SE CTION 80IB(10) INSERTED BY FINANCE (NO.2) ACT 2004 W.E.F.01-04-2005 WAS TO BE APPLIED IN A.Y. 2006-07, REGARDLESS OF THE DATE OF APPROVAL OF THE PROJECT IN QUESTION. THE AFORESAID POSITION CANVASSED BY THE TRIBUNAL IN THE CASE OF MANAN CORPORATION (SUPRA) WAS NEGATED BY THE HONBLE GUJAR AT HIGH COURT ON THE BASIS OF THE JUDGMENT OF THE HONBLE BOMBAY HIGH COUR T IN THE CASE OF BRAHMA ASSOCIATES (SUPRA). THEREFORE, IN THIS MANNER, THE RELIANCE NOW 31 SOUGHT TO BE PLACED BY THE LD. CIT DR IN THE CASE OF EVEREST HOME CONSTRUCTION (INDIA) PVT. LTD. (SUPRA) THEREFORE IS N OT OF ANY HELP TO THE REVENUE. THUS, FOLLOWING THE PARITY OF REASONING LAID DOWN IN THE ORDER OF THE TRIBUNAL DATED 23-11-2012 (SUPRA), IN ASSESSEES OW N CASE, AND WHICH IS IN CONSONANCE WITH THE JUDGMENT OF THE HONBLE GUJ ARAT HIGH COURT IN THE OF MANAN CORPORATION (SUPRA), WHICH HAS REFERRED TO AND RELIED UPON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN TH E CASE OF BRAHMA ASSOCIATES (SUPRA), WE THEREFORE FIND IT EXPEDIENT TO UPHOLD THE ASSESSEES CLAIM FOR DEDUCTION U/S.80IB(10) IN RELATION TO THE CITADEL PROJECT. IN THIS MANNER, THE CLAIM OF THE ASSESSEE IS ALLOWED. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE HOLD TH AT THE ASSESSEE IS ENTITLED TO PROPORTIONATE DEDUCTION U/S.80IB(10) OF THE I.T. ACT. WE, THEREFORE, UPHOLD THE ORDER OF THE CIT(A) FOR A.YRS. 2004-05 TO 2007-08 AND SET-ASIDE THE ORDER OF THE CIT(A) FOR A.Y. 2008-0 9. 7.3 IN VIEW OF THE DECISIONS CITED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ELIGIBLE FOR PRO-RATA CLAIM OF DEDUCTION U/S.80IB(10) WITH RESPECT TO THE ELIGIBLE UNITS OF THE HOUSING PROJECT. WE, THEREFORE, UPHOLD THE ORDER OF LD.CIT(A) FOR A.YRS. 2003-04 TO 2007-08. THE ORDER OF LD.CIT(A) FOR A.Y. 2008-09 IS SET-ASID E AND THE AO IS DIRECTED TO ALLOW PROPORTIONATE DEDUCTION FOR THE E LIGIBLE UNITS. 7.4 SINCE THE ASSESSEE SUCCEEDS IN APPEAL FOR A.Y. 2008-09, THEREFORE, THE APPEAL FILED BY THE ASSESSEE CHALLENGING THE OR DER OF THE CIT(A) PASSED U/S.154 OF THE I.T. ACT BECOMES INFRUCTUOUS AND THE SAME IS DISMISSED. 8. IN THE RESULT, ITA NOS. 316 TO 319/PN/2013 FILED BY THE REVENUE AND ITA NO.272/PN/2014 FILED THE ASSESSEE ARE DISMI SSED AND ITA NO.1830/PN/2013 FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 26-06-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PAN DA) JUDICIAL MEMBER ACCOUNTAN T MEMBER PUNE DATED: 26 TH JUNE, 2014 SATISH 32 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE