M/s Agrawal Builders, Bhopal V. The ACIT, Bhopal

ITA 337/IND/2010

• Counselvise Citation: 33722714 RSA 2010
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 28-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Retrospective amendment; Competent authority
• Section: 143(3); 80IB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 337/IND/2010 A.Y. 2006-07 M/S AGRAWAL BUILDERS BHOPAL PAN AAEFA8222 APPELLANT VS ACIT, CIR. 1(1), BHPPAL RESPONDENT APPELLANT BY : SHRI S.S. DESHPANDE, FCA RESPONDENT BY : SHRI KESHAV SAXENA, CIT DR O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE SUM AND SUBSTANCE OF THE GROUNDS TAKEN BY THE ASSESSEE IN THIS APPEAL IS THAT THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN HOLDING T HAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10 ) OF THE ACT. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON THE FIL E. THE CRUX 2 OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE TO THE COMPETENT AUTHORITY/MUNICIPAL CORPORATION ON 16.1.2008, WHICH WAS NOT ISSUED TILL DATE. IT WAS CLAIMED THAT POSSESSION OF THE DWELLING UNIT/BUNGALOWS WAS HANDED OVER TO THE 62 CUSTOMERS FOR WHICH, OUR ATTENTION WAS INVITED TO PAGE 42 & 43 OF THE PA PER BOOK, CONTENDING THAT THE POSSESSION WAS HANDED OVER ON T HE DATES MENTIONED AGAINST THE RESPECTIVE NAMES. IT WAS ALSO CLAIMED THAT REGISTERED SALE DEEDS WERE EXECUTED IN FAVOUR OF SUCH CUSTOMERS. IT WAS SPECIFICALLY CLAIMED THAT WHEN TH E MAP OF SUCH DWELLING UNITS WAS SANCTIONED IN 2004, THEREFO RE, THE LAW APPLICABLE ON THAT DATE WILL BE APPLICABLE WHEN THE PLAN WAS SANCTIONED/APPROVED BY THE COMPETENT AUTHORITIES. R ELIANCE WAS PLACED UPON THE DECISIONS IN 39 SOT 498 (MUM), ESSAR CONSTRUCTION P. LTD. VS. ACIT (17 ITJ 138) (INDORE) AND D.K. CONSTRUCTION VS. ITO, 17 ITJ 1 (INDORE) AND ALSO TH E DECISION OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESS MENT YEAR 2004-05 VIDE ITA NO.242 & 243/IND/2008. 3 3. ON THE OTHER HAND, THE LD. CIT DR STRONGLY DEF ENDED THE IMPUGNED ORDER BY CONTENDING THAT COMPLETION CERTIF ICATE WAS NOT GRANTED TO THE ASSESSEE TILL DATE AND THE AREA IS VERY MUCH PRESCRIBED IN THE SECTION ITSELF, THEREFORE, NO DEV IATION IS REQUIRED TO BE MADE FROM THE PROVISIONS OF THE ACT. IT WAS EMPHATICALLY SUBMITTED THAT IN THE YEAR 2005, BUILT UP AREA WAS DEFINED, THEREFORE, BALCONIES AND MUMTIES ARE VERY MUCH PART OF THE BUNGALOWS/CONSTRUCTED AREA. FROM 1.4.2005, T HE DEFINITION OF BUILT UP AREA WAS ARGUED TO BE CHANGE D. IT WAS STRONGLY CONTENDED THAT THE CASES RELIED UPON BY TH E ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT APPE AL. THE LD. CIT DR RELIED UPON THE DECISION OF THE MUMBAI BENCH IN HEERANANDANI AKRUTI J.V. VS. DCIT (2010) 39 SOT 498 BY SUBMITTING THAT THIS CASE CLEARLY SUPPORTS THE CASE OF THE REVENUE. RELIANCE WAS ALSO PLACED UPON THE CASES WH ICH HAVE BEEN MENTIONED IN THE IMPUGNED ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. THE BRIEF FACTS ARE THAT THE A SSESSEE IS 4 ENGAGED IN THE BUSINESS OF DEVELOPING HOUSING PROJE CTS DECLARED TOTAL INCOME AT NIL, AFTER CLAIMED DEDUCTI ON OF RS.1,45,55,377/- U/S 80IB(10) OF THE ACT ON 31.10.2 006 IN ITS RETURN. THE ASSESSMENT WAS COMPLETED U/S 143(3) DET ERMINING THE TOTAL INCOME AT RS.1,45,55,308/- VIDE ORDER DAT ED 24.12.2008 AFTER DISALLOWING THE CLAIMED DEDUCTION OF THE ASSESSEE. THE PERMISSION FOR CONSTRUCTING/DEVELOPIN G THE HOUSING PROJECTS NAMELY, SAGAR ROYAL HOMES ON AN AR EA OF 6.04 ACRES OF LAND WAS GRANTED BY THE LOCAL AUTHORI TY ON 6.8.2002. IN ORDER TO ASCERTAIN THE FULFILLMENT OF THE CONDITION LAID DOWN U/S 80IB(10) OF THE ACT, THE VERIFICATION /MEASUREMENT OF THE BUILT UP AREA WAS GOT DONE THROUGH THE REGIS TERED VALUER, IN THE PRESENCE OF THE REPRESENTATIVE OF THE ASSESS EE, AND IT WAS FOUND THAT THE BUILT UP AREA OF HOUSE NO.A77 (A S SAMPLE) WAS 1811.23 SQ. FT. THE ASSESSEE WAS CONFRONTED TO THIS FACT. HOWEVER, THE CLAIM OF THE ASSESSEE WAS THAT IF THE SPACE SUCH AS, BALCONIES AND MUMTIES IS REDUCED THEN THE BUILT UP AREA COMES TO 1387.99 SQ. FT. WHICH IS WITHIN THE PRESCR IBED LIMIT. HOWEVER, THIS CLAIM OF THE ASSESSEE COULD NOT FIND FAVOUR AT THE 5 HAND OF THE LD. ASSESSING OFFICER AND THE CLAIMED D EDUCTION WAS DISALLOWED. ON APPEAL, THE STAND OF THE LD. ASS ESSING OFFICER WAS AFFIRMED BY THE LD. CIT(A) WHICH IS UND ER CHALLENGE BEFORE THIS TRIBUNAL. THE CLAIMED DEDUCTION WAS DIS ALLOWED BY THE LD. ASSESSING OFFICER BY OBSERVING THAT THE FOL LOWING REQUIREMENTS OF SEC. 80IB(10) WERE NOT FULFILLED BY THE ASSESSEE: 1. THE ASSESSEE IS MERELY ACTING AS A CONTRACTOR T O THE CUSTOMERS TO WHOM LAND HAS BEEN SOLD. 2. NO REGISTRY WHATSOEVER IS BEING MADE FOR THE CONSTRUCTION WORK DONE BY THE ASSESSEE. NO NEW RESIDENTIAL PROPERTY IS BEING CONSTRUCTED OR TRANSF ERRED BY THE ASSESSEE AS PER BOOKS OF ACCOUNTS OF THE ASSESS EE. 3. INTENTION BEHIND ANY DEDUCTION U/S 80IB IS TO PR OMOTE INVESTMENT IN A PARTICULAR SECTION, WHICH IS LESS P ROFITABLE. IN ASSESSEES CASE VIRTUALLY NO INVESTMENT WAS MADE TO START THE PROJECT AND RETURN ON CAPITAL OR PROFITAB ILITY IS VERY SUBSTANTIAL. 4. PROJECT IS NOT APPROVED AS A WHOLE BY THE MUNICI PAL CORPORATION INDIVIDUAL BUILDING PERMISSION HAS BEEN GIVEN. 5. THE ASSESSEE HAS CONSTRUCTED THE DUPLEXES, WHICH EXCEEDS THE MAXIMUM LIMIT OF 1500 SQFT SPECIFIED IN SECTION 80IB(10) WHICH IN FACT IS ONE OF THE MAIN B ASIC CONDITION TO BE FULFILLED IN ORDER TO CLAIM THE EXE MPTION. THE ASSESSEE HAS FAILED TO FULFILL THIS MAIN BASIC CONDITION. 6. FOR BEING ELIGIBLE FOR DEDUCTION U/S 80IB(10), I T IS ESSENTIAL THAT THE APPROVED PROJECT IS COMPLETED AS LAID DOWN U/S 80IB(10). THE SECTION 80IB(10) PRESCRIBED THAT 6 THE DATE OF COMPLETION IS TO BE TAKEN AS THE DATE O N WHICH COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTH ORITY. NO SUCH CERTIFICATE HAS BEEN ISSUED BY THE LOCAL AUTHORITY. IN THE LIGHT OF THE ABOVE OBJECTIONS, WE ARE REPROD UCING HEREUNDER THE RELEVANT PROVISIONS OF THE ACT: 80-IB. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INC LUDES ANY PROFITS AND GAINS DERIVED FROM ANY BUSINESS REF ERRED TO IN SUB-SECTIONS (3) TO 81 [(11), (11A) AND (11B) 81A ] (SUCH BUSINESS BEING HEREINAFTER REFERRED TO AS THE ELIGIBLE BUSIN ESS), THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE AS SESSEE, A DEDUCTION FROM SUCH PROFITS AND GAINS OF AN AMOUNT EQUAL TO SUCH PERCENTAGE AND FOR SUCH NUMBER OF ASSESSMENT YEARS AS SPECIFIED IN THIS SECTION. 6 [(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UND ERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31ST DAY OF MARCH, 6A [ 2008 ] BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEA R RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, ( A ) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CON STRUCTION, ( I ) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; ( II ) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, I S APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004, WITHIN FOUR YEARS FROM THE END OF THE FINANCI AL YEAR IN WHICH THE HOUSING PROJECT 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 HO USING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE O N WHICH THE 7 BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPR OVED BY THE LOCAL AUTHORITY; ( II ) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING P ROJECT IS ISSUED BY THE LOCAL AUTHORITY; ( B ) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHIC H HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE ( A ) OR CLAUSE ( B ) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVE RNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPM ENT OF EXISTING BUILDINGS IN AREAS DECLARED TO BE SLUM ARE AS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; ( C ) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDEN TIAL UNIT IS SITUATED WITHIN THE CITY OF DELHI OR MUMBAI OR W ITHIN TWENTY-FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; 6B [ AND ] ( D ) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING P ROJECT DOES NOT EXCEED FIVE PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR TWO THOUSAND SQUARE FEET, WHICHE VER IS LESS.] THE FOLLOWING CLAUSES (E) AND (F) SHALL BE INSERTED AFTER CLAUSE (D) OF SUB-SECTION (10) OF SE CTION 80-IB BY THE FINANCE (NO. 2) ACT, 2009, W.E.F. 1-4-2010 : ( E ) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDI VIDUAL; AND ( F ) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL , NO OTHER RESIDENTIAL UNIT IN SUCH HOUSING PROJECT IS ALLOTTE D TO ANY OF THE FOLLOWING PERSONS, NAMELY: ( I ) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDRE N OF SUCH INDIVIDUAL, ( II ) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA, ( III ) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KA RTA. 6C [ EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL AP PLY TO ANY UNDERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORKS 8 CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTR AL OR STATE GOVERNMENT). ] 5. IF THE LANGUAGE USED IN THE PROVISIONS OF THE AC T (SUPRA) IS KEPT IN JUXTAPOSITION WITH THE FACTS OF THE PRESENT APPEAL ALONG WITH THE ARGUMENTS ADVANCED BY THE LD. RESPECTIVE C OUNSEL, ONE CLEAR FACT IS OOZING OUT THAT THE ASSESSEE WAS GRAN TED PERMISSION FOR THE HOUSING PROJECT BY THE LOCAL AUT HORITY ON 6.8.2002. IN THE ABSENCE OF FULFILLMENT OF CONDITI ONS LAID DOWN U/S 80IB(10), THE CLAIM OF THE ASSESSEE WAS DENIED. THE WHOLE DISPUTE IS TWOFOLD, FIRSTLY, AS PER THE REVENUE, TH E TOTAL BUILT-UP AREA OF THE HOUSE (SAMPLE HOUSE) WAS 1811.32 SQ.FT. WHICH INCLUDES THE AREA OF BALCONY & MUMTY ETC. AND THE S AME IS ABOVE THE PRESCRIBED LIMIT OF 1500 SQ.FT. THE BUILT -UP AREA HAS BEEN DEFINED IN SUB-SEC. (14) OF SEC. 80IB WHICH IS REPRODUCED AS UNDER: 14) FOR THE PURPOSES OF THIS SECTION, 14 [( A ) BUILT-UP AREA MEANS THE INNER MEASUREMENTS OF T HE RESIDENTIAL UNIT AT THE FLOOR LEVEL, INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREASED BY THE THICKNESS OF THE WAL LS BUT DOES NOT INCLUDE THE COMMON AREAS SHARED WITH OTHER RESIDENT IAL UNITS;] 15 [( AA )]COLD CHAIN FACILITY MEANS A CHAIN OF FACILITIES FOR STORAGE OR TRANSPORTATION OF AGRICULTURAL PRODUCE U NDER SCIENTIFICALLY CONTROLLED CONDITIONS INCLUDING REFRIGERATION AND O THER FACILITIES NECESSARY FOR THE PRESERVATION OF SUCH PRODUCE; 9 16 [ 17 [( AB )] CONVENTION CENTRE MEANS A BUILDING OF A PRESCRIBED AREA COMPRISING OF CONVENTION HALLS TO B E USED FOR THE PURPOSE OF HOLDING CONFERENCES AND SEMINARS, BEING OF SUCH SIZE AND NUMBER AND HAVING SUCH OTHER FACILITIES AND AMENITI ES, AS MAY BE PRESCRIBED 18 ;] ( B ) HILLY AREA MEANS ANY AREA LOCATED AT A HEIGHT O F ONE THOUSAND METRES OR MORE ABOVE THE SEA LEVEL; ( C ) INITIAL ASSESSMENT YEAR ( I ) IN THE CASE OF AN INDUSTRIAL UNDERTAKING OR COLD STORAGE PLANT OR SHIP OR HOTEL, MEANS THE ASSESSMENT YEAR RELEVANT T O THE PREVIOUS YEAR IN WHICH THE INDUSTRIAL UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS, OR TO OPERATE ITS COLD STORAGE PLANT OR PLANTS OR THE COLD CHAIN FACILITY OR THE SHIP IS FI RST BROUGHT INTO USE OR THE BUSINESS OF THE HOTEL STARTS FUNCTIONING; ( II ) IN THE CASE OF A COMPANY CARRYING ON SCIENTIFIC A ND INDUSTRIAL RESEARCH AND DEVELOPMENT, MEANS THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE COMPANY IS APPROVED BY T HE PRESCRIBED AUTHORITY FOR THE PURPOSES OF SUB-SECTION (8); ( III )IN THE CASE OF AN UNDERTAKING ENGAGED IN THE BUSIN ESS OF COMMERCIAL PRODUCTION OR REFINING OF MINERAL OIL RE FERRED TO IN SUB- SECTION (9), MEANS THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAKING COMMENCES THE COMMERCIAL P RODUCTION OR REFINING OF MINERAL OIL; 19 [( IV ) IN THE CASE OF AN UNDERTAKING ENGAGED 20 [IN THE BUSINESS OF PROCESSING, PRESERVATION AND PACKAGING OF FRUITS OR VEGETABLES OR] IN THE INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOODGRAINS, MEANS THE ASSESSMENT YEAR RELEVANT TO T HE PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS SUCH BUSINESS;] 21 [( V ) IN THE CASE OF A MULTIPLEX THEATRE, MEANS THE AS SESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH A CINEM A HALL, BEING A PART OF THE SAID MULTIPLEX THEATRE, STARTS OPERATIN G ON A COMMERCIAL BASIS; ( VI ) IN THE CASE OF A CONVENTION CENTRE, MEANS THE AS SESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE CON VENTION CENTRE STARTS OPERATING ON A COMMERCIAL BASIS;] 22 [( VII ) IN THE CASE OF AN UNDERTAKING ENGAGED IN OPERATIN G AND MAINTAINING A HOSPITAL IN A RURAL AREA, MEANS THE A SSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAK ING BEGINS TO PROVIDE MEDICAL SERVICES;] ( D ) NORTH-EASTERN REGION MEANS THE REGION COMPRISIN G THE STATES OF ARUNACHAL PRADESH, ASSAM, MANIPUR, MEGHAL AYA, MIZORAM, NAGALAND, SIKKIM AND TRIPURA; 23 [( DA ) MULTIPLEX THEATRE MEANS A BUILDING OF A PRESCRI BED AREA, COMPRISING OF TWO OR MORE CINEMA THEATRES AND COMME RCIAL SHOPS OF 10 SUCH SIZE AND NUMBER AND HAVING SUCH OTHER FACILITI ES AND AMENITIES AS MAY BE PRESCRIBED 24 ;] ( E ) PLACE OF PILGRIMAGE MEANS A PLACE WHERE ANY TEM PLE, MOSQUE, GURDWARA, CHURCH OR OTHER PLACE OF PUBLIC W ORSHIP OF RENOWN THROUGHOUT ANY STATE OR STATES IS SITUATED; ( F ) RURAL AREA MEANS ANY AREA OTHER THAN ( I ) AN AREA WHICH IS COMPRISED WITHIN THE JURISDICTIO N OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNI CIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COM MITTEE OR BY ANY OTHER NAME) OR A CANTONMENT BOARD AND WHICH HAS A P OPULATION OF NOT LESS THAN TEN THOUSAND ACCORDING TO THE PRECEDI NG CENSUS OF WHICH RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE T HE FIRST DAY OF THE PREVIOUS YEAR; OR ( II ) AN AREA WITHIN SUCH DISTANCE NOT BEING MORE THAN FIFTEEN KILOMETRES FROM THE LOCAL LIMITS OF ANY MUNICIPALIT Y OR CANTONMENT BOARD REFERRED TO IN SUB-CLAUSE ( I ), AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO THE STAGE OF DEVELOPMENT OF SUCH A REA INCLUDING THE EXTENT OF, AND SCOPE FOR, URBANISATION OF SUCH AREA AND OTHER RELEVANT CONSIDERATIONS SPECIFY IN THIS BEHALF BY NOTIFICATI ON IN THE OFFICIAL GAZETTE 25 ; ( G ) SMALL-SCALE INDUSTRIAL UNDERTAKING MEANS AN IND USTRIAL UNDERTAKING WHICH IS, AS ON THE LAST DAY OF THE PRE VIOUS YEAR, REGARDED AS A SMALL-SCALE INDUSTRIAL UNDERTAKING UN DER SECTION 11B 26 OF THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 (65 OF 1951).] IN SUB-CLAUSE (A) OF SUB-SEC. 14 OF SEC. 80IB MEANS THE MEASUREMENT OF RESIDENTIAL UNITS WHICH INCLUDES PRO JECTIONS AND BALCONIES BUT DOES NOT INCLUDE THE COMMON AREA SHARED WITH OTHER RESIDENTIAL UNITS. THE ASSESSEE HAS BUIL T UP INDEPENDENT BUNGALOWS AND NOT THE FLATS, THEREFORE, THERE IS NO QUESTION OF COMMON AREAS, CONSEQUENTLY, THE BUILT-U P AREA IN THESE BUNGALOWS IS BEYOND THE PRESCRIBED LIMIT OF 1 500 SQ.FT. 11 6. AS PER SUB-CLAUSE (II) TO EXPLANATION TO SUB-SEC . (10), THE DATE OF THE CONSTRUCTION OF THE HOUSING PROJECT SHA LL BE TAKEN TO THE DATE ON WHICH, THE COMPLETION CERTIFICATE, IN R ESPECT OF THE HOUSING PROJECT, IS ISSUED BY THE LOCAL AUTHORITY. WHEREAS IN THE PRESENT APPEAL, AS PER THE REVENUE, TILL DATE NO SU CH CERTIFICATE WAS ISSUED TO THE ASSESSEE, THEREFORE, FROM THIS AN GLE ALSO, THE ASSESSEE HAS NOT FULFILLED THE STIPULATED CONDITION . THE BASIC IDEA AS PER SUB-CLAUSE (III) TO SUB-SEC. 10(A) IS T O COMPLETE THE HOUSING PROJECTS WITHIN FIVE YEARS FROM THE END OF THE F.Y. IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. THE APPROVAL WAS GRANTED BY THE LOCAL AUTHORITY TO THE ASSESSEE ON 6.8.2002 AND TILL DATE, NO COMPLETION C ERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITY, MEANING THEREBY, THE HOUSING PROJECT WAS NOT COMPLETED WITHIN THE PRESCRIBED PER IOD, THEREFORE, THE ASSESSEE IS NOT ENTITLED TO CLAIM TH E DEDUCTION. 7. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION IN THE CASE OF M/S. D.K. CONSTRUC TION VS. ITO [2011] 17 ITJ 1 (TRIBUNAL) WHEREIN THE COMPLETION C ERTIFICATE WAS OBTAINED ON 15.12.2008 AND APPLICATION WAS MADE FOR THE 12 CERTIFICATE PRIOR TO 31.3.2008 AND THERE WAS A REGU LAR FOLLOW-UP. SINCE THE COMPLETION CERTIFICATE WAS ISSUED TO THE ASSESSEE, THEREFORE, THIS CASE MAY NOT HELP THE ASSESSEE BECA USE NO COMPLETION CERTIFICATE WAS ISSUED TO THE ASSESSEE T ILL DATE. IT IS PERTINENT TO MENTION HERE THAT SINCE NO DATE WAS ME NTIONED ON THE COMPLETION CERTIFICATE, THEREFORE, THE MATTER W AS REMANDED TO THE ASSESSING OFFICER. SO FAR AS THE DECISION ES SAR CONSTRUCTION P. LTD. (17 ITJ 138), RELIED UPON BY T HE ASSESSEE, IS CONCERNED, THE CONSTRUCTION WAS COMPLETED BEFORE THE PROPOSED AMENDMENT, THEREFORE, IT WAS HELD THAT SEC . 80IB(14)(A) IS NOT APPLICABLE. WHEREAS THE FACTS AR E DIFFERENT IN THE PRESENT APPEAL AS THE ASSESSMENT YEAR INVOLVED IS 2004-05 WHEREAS THE PRESENT APPEAL PERTAINS TO ASSESSMENT Y EAR 1006- 07. AS FAR AS THE DECISION IN ITA NO.242 AND 243/IN D/2008 (ASSESSMENT YEAR 2004-05) IS CONCERNED, FIRST OF AL L, IT PERTAINS TO THE PERIOD BEFORE AMENDMENT TOOK PLACE AND SECON DLY, THE DECISION IN THE CASE OF SMT. SAROJ KAPPOR (ITA NO.1 94/IND.2008 AND CO NO.51/IND/2008) WAS RELIED UPON BY THE ASSES SEE AND THE FACTUAL MATRIX CONTAINED THEREIN WAS NOT CONTRO VERTED BY THE 13 REVENUE. AT THE SAME TIME, THE ASSESSEE DEVELOPED A ND SOLD FLATS IN GREEN CITY AND IN THE FLATS, THERE WERE CE RTAIN COMMON AREAS, CONSEQUENTLY, A PARTICULAR DECISION WAS TAKE N. THE ASSESSEE ALSO GAVE DETAILS OF THE RESIDENTIAL FLATS MEASURING 929.54 SQ.FT. FOR WHICH NO MEASUREMENT WAS DONE BY THE DEPARTMENT AND IN THE SECOND PHASE, A-II TYPE DUPLE X ALSO, THE MEASUREMENT WAS ALSO FOUND LESS THAN 1500 SQ.FT. BY THE APPROVED VALUATION OFFICER. EVEN THE DEPARTMENT OF ITS OWN INDICATED THAT THE REPRESENTATIVE OF THE ASSESSEE H AD NOT CHECKED THE MEASUREMENT AND ITS CALCULATION, THEREF ORE, THE FACTS OF ASSESSMENT YEAR 2004-05 ARE DIFFERENT. AME NDMENT WAS MADE IN SUB-SEC. (10) BY THE FINANCE (NO.2) ACT , 2004 W.E.F. 1.4.2005 AND PRIOR TO ITS SUBSTITUTION, SUB- SEC. (10) AS AMENDED BY FINANCE ACT, 2000, WAS W.E.F. 1.4.2001 A ND FINANCE ACT, 2003 WITH RETROSPECTIVE EFFECT FROM 1. 4.2002, HAVING DIFFERENT CONDITIONS. IN THE PRESENT APPEAL, FIRSTLY, THE ASSESSEE DID NOT FULFILL THE CONDITIONS AS MENTIONE D IN PARA 4 (SUPRA) AND SECONDLY, THE COMPLETION CERTIFICATE WA S NOT ISSUED 14 TILL DATE, THEREFORE, THESE JUDICIAL PRONOUNCEMENTS MAY NOT HELP THE ASSESSEE. 8. THE BENEFIT OF DEDUCTION WAS FIRST INTRODUCED BY THE FINANCE ACT, 1998 W.E.F. 1.4.99 IN THE FORM OF SUB- SEC. (4F) TO SEC. 80IA OF THE ACT. BY THE FINANCE ACT, 1999 W.E. F. 1.4.2002, THE BENEFIT OF SUCH DEDUCTION WAS AVAILABLE U/S 80I B(10). BY THE FINANCE ACT, 2000 W.E.F. 1.4.2001, THE WORDS BEFOR E 31 ST DAY OF MARCH, 2001 WERE INSERTED AFTER THE WORDS HOUSING PROJECT APPROVED. THUS, ALL CONDITIONS FOR GRANT OF DEDUCT ION REMAINED THE SAME EXCEPT THE APPROVED OF LOCAL AUTHORITY FOR THE DEVELOPMENT HAS TO BE OBTAINED BEFORE 31 ST DAY OF MARCH, 2001. FOR ASSESSMENT YEAR 2002-03, THE LAW APPLICAB LE WAS THAT THE CONDITION REGARDING COMPLETION OF THE PROJ ECT BEFORE 31.3.2003 WAS DISPENSED WITH. 9. FOR THE ASSESSMENT YEAR 2003-04 AND 2004-05, THE LAW APPLICABLE WAS THAT ALL THE CONDITIONS REMAINED SAM E EXCEPT THE CONDITION REGARDING THE APPROVAL OF THE PROJECT FROM THE LOCAL AUTHORITY WHICH COULD BE BEFORE 31.3.2005. AN OTHER IMPORTANT CHANGE WAS THAT THE PERIOD OF COMPLETION OF THE 15 CONSTRUCTION ON OR BEFORE 31.3.2003 WAS DISPENSED W ITH AND THERE WAS NO TIME-LIMIT GIVEN FOR COMPLETION OF THE CONSTRUCTION. THIS WAS THE LAW FOR ASSESSMENT YEAR 2004-05 WHEN T HE ASSESSEE SUBMITTED ITS PROPOSAL FOR SLUM REHABILITA TION AND THE PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACC ORDED ON 17.11.2003 AND WHEN THE ASSESSEE COMMENCED DEVELOPM ENT. 10. BY THE FINANCE ACT, 2004 W.E.F. 1.4.2005, CLAUS E (D) TO SEC. 80IB(10) WAS INTRODUCED WHICH PROVIDED THAT BU ILT-UP AREA OF SHOPS OR OTHER COMMERCIAL ESTABLISHMENTS INCLUDE D IN THE HOUSING PROJECT SHOULD NOT EXCEED 5 PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR 2000 SQ.FT. WHICHEVER IS LESS. THE PROVISIONS AS THEY READ APPLICABLE FROM A SSESSMENT YEAR 2005-06. IN THE PRESENT APPEAL, THE ASSESSMENT YEAR 2006-07, THEREFORE, THE LAW APPLICABLE TO THE RELEV ANT ASSESSMENT YEAR WILL BE APPLICABLE. 11. WE HAVE NOTED, AS ARGUED, THE BUILT-UP AREA OF THE BUNGALOW IS MORE THAN THE PRESCRIBED LIMIT AND SINC E THE COMPLETION CERTIFICATE WAS NOT ISSUED TO THE ASSESS EE TILL DATE, THEREFORE, WE ARE OF THE VIEW THAT THE DECISION IN HEERANANDANI 16 AKRUTI J.V. (39 SOT 498) (MUM) RATHER SUPPORTS THE CASE OF THE REVENUE, CONSEQUENTLY, THE ASSESSEE IS NOT ENTITLED TO CLAIMED DEDUCTION. WE, THEREFORE, FIND NO INFIRMITY IN THE STAND OF THE LD. CIT(A). THE SAME IS AFFIRMED. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 23 RD JUNE, 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD JUNE, 2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GUARD FILE !VYAS!