INCOME TAX OFFICER, WARD-1(4), Nagpur V. M/S. SWAPANASHILP DEVELOPERS, Nagpur

ITA 35/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1588 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 21-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Competent authority
• Section: 143(3); 80IB; 2

Judgement Text

1 ITA NO S . 35 & 36 /NAG/2014 IN TH E INCOME TAX APPELLATE TRIBUNAL: NAGPUR BENCH: NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO S .35 AND 36 /NAG/2014 ASSESSMENT YEAR: 2009 - 10 AND 2010 - 11 THE INCOME TAX OFFICER, WARD 1(4), ROOM NO.504, 5 TH FLOOR, MECL BUILDING, SEMINARY HILLS, NAGPUR 440006 VS M/S. SWAPNASHILP DEVELOPERS, PLOT NO.3, VIJAYA APARTMENTS, RING ROAD, NARENDRA NAGAR, NAGPUR - 440015 PAN: ABHFS1103J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI NARENDRA KANE, DR R ESPONDENT BY SHRI K. P. DEWANI, ADVOCATE DATE OF HEARING: 03 - 09 - 2015 DATE OF PRONOUNCEMENT: 24 - 11 - 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE EMANATING FROM A CONSOLIDATED ORDER OF THE LEARNED C IT (A), NAGPUR DATED 22 - 10 - 2013 FOR THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11 RESPECTIVELY. THE LEAD YEAR BEFORE US IS ASSESSMENT YEAR 2009 - 10. THE REVENUE HAS RAISED IDENTICALLY WORDED GROUNDS OF APPEALS IN THESE TWO YEARS, HENCE, REPRODUCED FROM THE GROUN DS OF APPEAL FOR ASSESSMENT YEAR 2009 - 10 AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) ERRED IN HOLDING THAT THE GRAM PANCHAYAT BESA WAS THE COMPETENT AUTHORITY TO SANCTION THE PLANS OF THE HOUSING PROJECT AND TO ISSUE COMMENCEMENT CERTIFICATE AND COMPLETION CERTIFICATE FOR HOUSING PROJECT ELIGIBLE FOR DEDUCTION U/S 80IB (10) OF THE I. T. ACT, 1961; 2 ITA NO S . 35 & 36 /NAG/2014 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (A) ERRED IN ARRIVING AT A FINDING THAT BESA GRAM PANCHAYAT WAS THE LOCAL AUTHORITY AND COMPETENT AUTHORITY U/S 80IB (10) WITHOUT CONSIDERING THE DEVELOPMENT CONTROL REGULATIONS, 2000 NAGPUR AS AMENDED FROM TIME TO TIME AND WITHOUT APPRECIATING THE CONTENTS OF NOTIFICATION DT. 31.8.2010 ISSUED BY THE URB AN DEVELOPMENT DEPARTMENT WHICH APPOINTED THE NAGPUR IMPROVEMENT TRUST AS THE SPECIAL PLANNING AUTHORITY FOR DEVELOPING NOTIFIED AREA INCLUDING BESA VILLAGE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) ERRED IN HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80IB (10) DISREGARDING THE FACT THAT THE HOUSING PROJECT WAS NEITHER APPROVED NOR COMMENCEMENT CERTIFICATE AND COMPLETION CERTIFICATE WERE OBTAINED FROM THE COMPETENT AUTHORITY PRESCRIBED U/S 80 IB(10) OF THE I. T. ACT, 1961. 2. FACTS IN BRIEF, AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S 143(3) OF THE IT ACT DATED 27 - 12 - 20011 WERE THAT THE ASSESSEE FIRM IS IN THE BUSINESS OF REAL ESTATE AND STATED TO BE DEVELOPING HOUSING PROJECTS. FOR ASSESSMENT YEAR 2009 - 10, T HE ASSESSEE HAS COMPUTED THE NET PROFIT AT RS.37,79,941/ - AND THE ENTIRE PROFIT WAS CLAIMED AS DEDUCTION U/S 80IB OF THE ACT. LIKEWISE, FOR ASSESSMENT YEAR 2010 - 11, THE NET PROFIT WAS DECLARED AT RS.1,60,61,384/ - AND THE DEDUCTION U/S 80 IB OF THE ACT WAS CLAIMED AT RS.1,55,03,286/ - . AN ENQUIRY WAS MADE ABOUT THE ELIGIBILITY OF THE CLAIM U/S 80IB (10) OF THE ACT. FROM THE SIDE OF THE ASSESSEE, COPIES OF DEVELOPM ENT AGREEMENT, SANCTIONED PLAN AND PERMISSION FOR COMMENCEMENT OF CONSTRUCTION, COMPLETION CERTIF ICATE AND OCCUPANCY CERTIFICATE WERE FURNISHED. THE AO RAISED FEW OBJECTIONS IN THE FOLLOWING MANNER: - (A) FULFILMENT OF CONDITION OF MINIMUM AREA OF ONE ACRE : - ON THIS ISSUE, THE OBSERVATION OF THE AO WAS AS UNDER: - THE CLAIM OF DEDUCTION U/S. 80IB FOR THE REMAINING AMOUNT WAS EXAMINED. IT WAS FOUND THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80IB ON DEVELOPMENT OF KHASARA NO.38/2 AND 38/3, PHN - 38, MOUZA BESA , NAGPUR. THERE WERE 38 PLOTS OVER THE SAID PLOT OF LAND OUT OF WHICH 11 3 ITA NO S . 35 & 36 /NAG/2014 PLOTS BELONGED TO THE A SSESSEE, 15 PLOTS TO M/S. RAJESHWAR BUILDERS AND ITS PARTNERS AND THE REMAINING 12 PLOTS BELONGED TO DIFFERENT INDIVIDUALS. THE ASSESSEE ENTERED IN TO AN AGREEMENT OF DEVELOPMENT ON 27/06/2007 WITH M/S. RAJESHWAR BUILDERS AND OTHER PERSONS TO DEVELOP THE E NTIRE PLOTS. THE TOTAL AREA OF THE SAID 38 PLOTS COMES TO 4040 SQ. MTRS. THE ASSESSEE CLAIMED THAT IT HAD DEVELOPED THE ENTIRE AREA OF 38 PLOTS ADMEASURING 4080 SQ. MTRS. WHICH WAS MORE THAN ONE ACRE, THUS IT HAD FULFILLED ONE OF THE CONDITIONS OF SECTION 80IB (10) OF DEVELOPING A PLOT OF LAND OF MINIMUM AREA OF ONE ACRE. 3A. THE SUBMISSION MADE BY THE ASSESSEE THAT IT HAD DEVELOPED AN AREA OF ONE ACRE AND ABOVE IS NOT ACCEPTABLE. SECTION 80IB (10) STATES AS UNDER - THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE 3B. IT IS CLEAR FROM THE ABOVE CONDITION THAT TO SATISFY THE ABOVE CONDITION THE ASSESSEE SHOULD HAVE DEVELOPED ONE PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE. THE ASSESSEE ONLY HAD 11 PLOTS AND THE TOTAL A REA OF LAND WAS OF 1207 SQ. MTRS. AND SUBSEQUENTLY IT PURCHASED REMAINING 27 PLOTS FROM VARIOUS PERSONS. THIS CLEARLY SHOWS THAT THE ASSESSEE HAD NOT COMPLIED WITH THIS BASIS CONDITION OF HAVING DEVELOPED THE AREA OF LAND OF ONE ACRE. (B) FULFILMENT OF C ONDITION OF APPROVAL OF PROJECT BY LOCAL AUTHORITY : - THE PROJECT WAS CLAIMED TO HAVE BEEN APPROVED BY SARPANCH, GRAM PANCHAYAT, BESA, NAGPUR ON 05 - 12 - 2006. AN INSPECTOR OF INCOME TAX DEPARTMENT WAS DEPUTED TO VERIFY THE GENUINENESS OF THE CERTIFICATE ISSU ED. THE INSPECTOR HAD OBTAINED THE PROCEEDING BOOK FROM THE OFFICE OF THE GRAM PANCHAYAT. IT WAS FOUND THAT PERMISSION WAS GRANTED FOR CONSTRUCTION IN RESPECT OF PLOT NOS. 59 TO 69 AND R - 4. ON THE OTHER HAND, THE ASSESSEE HAS FURNISHED PERMISSION IN RESPE CT OF PLOT NOS. 28 TO 60 AND R - 4. ACCORDING TO THE AO, THE ASSESSEE WAS HOLDING ONLY 11 PLOTS FROM PLOT NO.59 TO PLOT NO.69 ADMEASURING LESS THAN ONE ACRE AREA, HENCE ONE OF THE IMPORTANT CONDITIONS OF SECTION 80 IB (10) OF THE ACT WAS NOT FULFILLED. 4 ITA NO S . 35 & 36 /NAG/2014 (C) COMPLETION CERTIFICATE ISSUED BY LOCAL AUTHORITY : THE ASSESSEE HAS FURNISHED COMPLETION CERTIFICATE ISSUED BY AN ARCHITECT. ACCORDING TO THE AO, THAT WAS NOT ADMISSIBLE UNDER THE PROVISIONS OF THE ACT; HENCE, THE CERTIFICATE ISSUED BY THE ARCHITECT WAS RE JECTED. THE ASSESSEE HAS ALSO FURNISHED ANOTHER COMPLETION CERTIFICATE ISSUED BY THE SARPANCH, GRAM PANCHAYAT, BESA, NAGPUR DATED 16 - 03 - 2011. THE AO HAS QUESTIONED THE SAID CERTIFICATE ON THE GROUND THAT SARPANCH, GRAM PANCHAYAT WAS NOT THE LOCAL AUTHORITY . VIDE PARA 6 OF THE ASSESSMENT, THE AO HAS SUMMARIZED AS UNDER: - 6. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES I HOLD THAT THE ASSESSEE WAS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 80IB FOR THE FOLLOWING REASONS: - (I) IT HAD DEVELOPED A PLOT OF LAND WHICH DID N OT HAVE A MINIMUM AREA OF ONE ACRE. (II) THE CERTIFICATE TO CONSTRUCT THE WORK ISSUED BY THE LOCAL AUTHORITY TO THE ASSESSEE WAS ALSO FOR THE AREA OF LAND WHICH DID NOT HAVE A MINIMUM AREA OF ONE ACRE AS IT WAS ISSUED FOR THE PLOT NOS. FROM 59 TO 69 AS PER THE PROCEEDINGS BOOKS MAINTAINED BY THE GRAMPANCHAYAT BESA. (III) THE COMPLETION CERTIFICATE SUBMITTED BY THE ASSESSEE WAS ALSO NOT FOUND TO BE IN ORDER. THE COMPLETION CERTIFICATE WAS ISSUED FOR PLOT NOS. FROM 28 TO 69, WHEREAS THE LOCAL AUTHORITY IN THEIR PROCEEDI NGS BOOK HAD SANCTIONED FOR THE CONSTRUCTION WORK PLOT NOS. 59 TO 69. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS THE PLEAD ING THAT THE RETURN OF INCOME WAS FILED ALONG WITH AN AUDIT REPORT U/S 44 AB OF THE ACT. AS PER THE RECORD, THE HOUSING PROJECT WAS CONSTRUCTED ON KHASA RA NO.38/2, 38/3, BESA, NAGPUR ON THE TOTAL AREA ADMEASURING 4230 SQ. MTRS. EQUIVALENT TO 1.04 ACRE. IT WAS ALSO SUBMITTED THAT DEVELOPMENT AGREEMENT WAS ENTERED INTO ON 07 - 11 - 2006 FOR A TOTAL CONSIDERATI ON OF RS.1,39,28,142/ - . BY VIRTUE, OF THE SAID AGREEMENT, THE ASSESSEE WAS ENTITLED TO DEVELOP THE SAID PIECE OF LAND. THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE 5 ITA NO S . 35 & 36 /NAG/2014 DECISION OF RADHE DEVELOPERS, 341 ITR 403 (GUJ.). CONSIDERING ALL THOSE FACTS, THE LEARNED C IT (A) HAS GIVEN A FINDING AS UNDER: - 10.10 THE GRAM PANCHAYAT IN THE STATE OF MAHARAS H TRA ARE OPERATING UNDER THE PROVISIONS OF THE BOMBAY VILLAGE PANCHAYAT ACT 1958. UNDER SECTION 52 OF THE BOMBAY VILLAGE PANCHAYAT ACT 1958 GRAMPANCHAYAT IS THE AUTHORIT Y TO GRANT PERMISSION FOR ERECTION OR RE - ERECTION OF BUILDING WITHIN ITS JURISDICTION. UNDER SECTION 124 OF THE BOMBAY VILLAGE PANCHAYAT ACT 1958, GRAM PANCHAYAT IS THE AUTHORITY TO LEVY AND COLLECT TAX FOR BUILDING ERECTED WITHIN THE JURISDICTION OF GRAM PANCHAYAT. AS BROUGHT BY THE APPELLANT THE PROVISIONS OF MAHARASHTRA REGIONAL TOWN PLANNING IS ONLY FOR MAKING PROVISIONS FOR PLANNING AND DEVELOPMENT AND USE OF LAND IN THE STATE OF MAHARASHTRA. IN THE INSTANT CASE, THE REQUIRED APPROVAL FROM THE COLLECTO R WAS OBTAINED ON 2.2.2005. FROM THE READING OF THE PROVISIONS OF THE ABOVE ACTS, I AM OF THE CONSIDERED OPINION THAT GRAM PANCHAYAT IS THE LOCAL AUTHORITY FOR THE PURPOSE OF 80IB OF THE IT ACT, 1961. THE HOUSING PROJECT CONSTRUCTED BY THE APPELLANT IS LOC ATED AT VILLAGE BESA AND GRAM PANCHAYAT BESA IS BEING THE LOCAL AUTHORITY FROM WHOM THE APPELLANT HAS OBTAINED THE APPROVAL FOR THE HOUSING PROJECT. 10.11 THE APPELLANT PLACED RELIANCE ON THE FOLLOWING DECISIONS OF ITAT, WHEREIN IT HAS BEEN HELD THAT GRA M PANCHAYAT OF VILLAGE IS THE LOCAL AUTHORITY8 FOR THE PURPOSE OF GRANT OF APPROVAL OF HOUSING TO MAKE THE APPELLANT ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S 80IB (10) OF I. T. ACT, 1961. 1. ITATS ORDER IN ITA NO.556/MDS/2011 IN THE CASE OF TRUE VALUE HOME S (INDIA) PVT. LTD. DATED 24 TH JUNE 2011. 2. ITATS ORDER IN I.T.A. NOS. 248 & 249/VIZAG/2009 IN THE CASE OF RAGHAVA ESTATES LTD., VIJAYAWADA DATED 4 TH AUGUST, 2011. 3. DCIT VS. ARIHANT FOUNDATIONS AND HOUSING LTD. (2012) 18 ITR (TRIB) 588 (CHENNAI). 4. O N THE NEXT ISSUE OF COMPLETION CERTIFICATE, THE VERDICT OF THE LEARNED CIT (A) WAS AS UNDER: - 11. AS REGARDS TO THE ISSUE OF COMPLETION CERTIFICATE OF HOUSING PROJECT, THE VIEW TAKEN BY THE LD. AO THAT TWO COMPLETION CERTIFICATES ISSUED BY THE ARCHITECT AND THE GRAM PANCHAYAT ARE CONTRADICTORY IS NOT FACTUALLY CORRECT. THE SUBMISSION OF COMPLETION CERTIFICATE FROM A REGISTERED ARCHITECT IS A PRE - REQUISITE FOR ISSUE OF FINAL COMPLETION 6 ITA NO S . 35 & 36 /NAG/2014 CERTIFICATE BY THE COMPETENT AUTHORITY. ACCORDINGLY, ON SUBMISSION OF C ERTIFICATE FROM THE REGISTERED ARCHITECT, THE GRAM PANCHAYAT, BESA HAS ISSUED A COMPLETION CERTIFICATE WHICH IS OBVIOUS FROM THE FACT THAT THE DATE OF ARCHITECTS CERTIFICATE PRECEDES THE DATE OF COM PLETION CERTIFICATE ISSUED BY T HE GRAM PANCHAYAT. THEREFO RE, THERE IS NO CONTRADICTION IN BOTH THE CERTIFICATES WHICH ARE FOUND IN ORDER. THE HOUSING PROJECT THEREFORE HAS BEEN COMPLETED WITHIN THE STIPULATED TIME I.E. BY 31 ST MARCH 2011. IN THIS REGARD, IT HAS ALREADY BEEN HELD THAT THE GRAM PANCHAYAT, BESA IS THE LOCAL AUTHORITY FOR GRANT OF APPROVAL FOR CONSTRUCTION OF THE HOUSING PROJECT, THEREFORE, THE COMPLETION CERTIFICATE OBTAINED FROM THE SAID AUTHORITY, WITHIN THE STIPULATED TIME IS IN ORDER. 12. BESIDES, THE APPELLANT HAS ALSO PLACED RELIANCE ON THE F OLLOWING JUDICIAL DECISIONS: (I) BAJAJ TEMPO LTD. VS. CIT (1992) 136 ITR 188 SC, (II) CIT VS. GWALIOR RAYON SILK MANUFACTURING CO. LTD. (1992) 196 ITR 149, (III) CIT VS. STRAW BOARD MANUFACTURING CO. LTD. 177 ITR 413 (SC), & (IV) RAMSUKH PROPERTIES VS. DEP UTY COMMISSIONER OF INCOME TAX (2012) 138 ITD 278 (PUNE). 5. FROM THE SIDE OF THE REVENUE , THE LEARNED DR, MR. NARENDRA KANE HAS OBJECTED THE VIEW TAKEN BY THE LEARNED CIT (A) THAT THE GRAM PANCHAYAT IS A LOCAL AUTHORITY. HE HAS ALSO ARGUED THAT THE AREA OF EACH PLOT WAS TO BE CONSIDERED SEPARATELY AND THE PROJECT WAS NOT A CONSOLIDATED PROJECT. HENCE, EACH PROJECT WAS HAVING LESSER AREA THAN THE PRESCRIBED AREA. F INALLY, IT WAS THE PLEAD ED THAT THE ACTION OF THE AO DESERVES TO BE CONFIRMED. 6. ON THE OT HER HAND, FROM THE SIDE OF THE RESPONDEN T ASSESSEE, THE LEARNED AR, MR. K. P. DEWANI APPEARED AND DRAWN OUR ATTENTION ON THE EVIDENCES FILED IN THE COMPILATION SUCH AS CO PY OF TOWN PLANNING, COPY OF LA Y OUT PLAN SANCTIONED BY THE COLLECTOR, COPY OF SANCTIONED M AP OF ROW HOUSES, BUILDING COMPLETION CERTIFICATE, RELEVANT SECTIONS OF BOMBAY VILLAGE PANCHAYAT ACT, 1958, CERTIFICATE ISSUED ETC. HE HAS ALSO PLACED RELIANCE ON CERTAIN ORDERS LISTED BELOW: - 1. ITAT ORDER, IN ITA NO .667/PN/2013 IN THE CASE OF HIRAMAN NIV RUT T I BHUJAL ORDER DATED 27/05/2014 7 ITA NO S . 35 & 36 /NAG/2014 2. ITAT ORDER, IN ITA NO .937/PN/2010 IN THE CASE OF SHRI KRISHNA HARIBHAU LOHOKARE ORDER DATED 28/02/2013 3. ITAT ORDER, IN ITA NO.556/MDS/2011 IN THE CASE OF M/S. TRUE VALUE HOMES (INDIA) P. LTD., ORDER DATED 24/6/2011 4. ITAT ORDER IN ITA NO.248 & 249/VIZAG/2009 IN THE CASE OF RAGHAVA E STATES LTD ORDER DATED 4/8/2011 5. (2012) 18 ITR 0588 (CHENNAI) DCIT VS A RIHANT FOUNDATIONS AND HOUSING LTD. 6. ITAT ORDER, IN ITA NO.327/NAG/2008 IN THE CASE OF M/S. CHINTAMANI BUILDERS ORDER DATED 05/06/2009 7. ITAT ORD ER IN ITA NO .248/NAG/2007 IN THE CASE OF M/S. CHINTAMANI BUILDERS ORDER DATED 05/01/2009 8. (1992) 196 ITR 0149 (SC) CIT VS GWALIOR RA Y O N SILK MANUFACTURING CO. LTD. 9. (1989) 177 ITR 0431 (SC) CIT VS STRAWBOARD MANUFACTUR ING CO. LTD. 10. (1992) 196 ITR 0188 (SC) BAJAJ TEMPO LTD. VS CIT 11. (2013) 84 DTR 0383 (TRIB.) RAMSUKH PROPERTIES VS DCIT. 7. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPMENT OF REAL E STATE. THE ASSESSEE HAS ENTERED INTO A DEVELOPMENT AGREEMENT AND BY VIRTUE OF THE SAID AGREEMENT OBTAINED DEVELOPMENT RIGHTS TO DEVELOP THE ENTIRE PIECE OF LAND BEARING NO.28 TO 41, 44 TO 55 AND 58 TO 69 IN KHASA RA NO.38/2, 38/3 ADMEASURING 4 5513. 47 SQ. FT . THE DEVELOPMENT PLAN WAS SANC TIONED BY GRAM PANCHAYAT, BESA, NAGPUR. THE PRELIMINARY ISSUE AS RAISED BY THE AO WAS THAT WHETHER THE GRAM PANCHAYAT IS A LOCAL AUTHORITY OR NOT. ON THIS ISSUE, THE LEARNED CIT (A) HAS DISCUSSED AT LENGTH THE FACTUAL AS WELL AS LEGAL ASPECTS. THE SAID COMPLETION CERTIFICATES WERE ANNEXED IN THE COMPILATION. IN ONE OF THE CERTIFICATES, IT WAS MENTIONED THAT THE PERMISSION FOR CONSTRUCTION WAS GRANTED AND THE GRAM PANCHAYAT TAX HAD ALSO BEEN DEPOSITED. THE ASSESSEE HAS ALSO PLA CED ON RECORD A DETAILED MAP OF THE PLOTS WHICH WERE DEVELOPED AND 8 ITA NO S . 35 & 36 /NAG/2014 INFORMED THAT THE SAID DEVELOPMENT PLAN WAS ALSO SANCTIONED BY THE AUTHORITY. OUR ATTENTION HAS ALSO BEEN DRAWN ON THE BOMBAY VILLAGE PANCHAYAT ACT, 1958 WHICH HAS PROVIDED THAT SANCTION OF CONSTRUCTION OF BUILDING WITHIN THE LIMITS OF VILLAGE HAS TO BE GRANTED BY THE PANCHAYAT. SO, THE ARGUMENT BEFORE US IS THAT THE VILLAGE PANCHAYAT IS A LOCAL AUTHORITY, THEREFORE, COMPETENT TO APPROVE A HOUSING PROJECT. ON THIS ISSUE, A JUDGMENT HAS BEEN PASSED BY ITAT NAGPUR BENCH, NAGPUR IN THE CASE OF ACIT VS M/S. CHINTAMONI BUILDERS, ORDER DATED 30 - 10 - 2015 WHEREIN A DISCUSSION OF THE BOMBAY VILLAGE PANCHAYAT ACT, 1958 WAS MADE AND IT WAS FOUND THAT THE SANCTION OF THE CONSTRUCTION OF A BUILDING BEING S ITUATED WITHIN THE LIMITS OF VILLAGE, THE APPROVAL HAS TO BE GRANTED BY THE PANCHAYAT. BECAUSE OF THAT REASON, IT WAS HELD THAT THE VILLAGE PANCHAYAT IS A LOCAL AUTHORITY. RELEVANT PORTION OF THE SAID ORDER IS REPRODUCED BELOW: - 6. AS FAR AS THE ISSUE WHE THER THE GRAMP PANCHAYAT IS LOCAL AUTHORITY OR NOT, THE DECISION OF ITAT, PUNE BENCH HAS BEEN CITED BEFORE US BEARING NO.667/PN/2013 ASSESSMENT YEAR 2009 - 10 IN THE CASE OF HIRAMAN NIVRUTTI BHUJAL, ORDER DATED 27 - 05 - 2014 WHEREIN OTHER DECISIONS WERE DISCU SSED AND FINALLY CAME TO THE CONCLUSION THAT THE CONCERNED GRAM PANCHAYAT WAS A COMPETENT LOCAL AUTHORITY FOR THE PURPOSE OF ISSUING APPROVAL AND COMPLETION CERTIFICATE FOR CLAIMING DEDUCTION U/S 80IB (10) OF I. T. ACT. MOREOVER, THE RESPONDENT - ASSESSEE HA S ALSO PLACED RELIANCE ON A DECISION OF CIT VS. GWALIOR RAYON SILK MANUFACTURING CO. LTD. 196 ITR 149 (SC) FOR LEGAL PROPOSITION THAT THE PROVISIONS FOR DEDUCTIONS AND EXEMPTIONS SHOULD BE CONSTRUED REASONABLY AND IN FAVOUR OF THE ASSESSEE. IN OUR CONSIDER ED OPINION SINCE ALL THE ISSUES IN HAND HAVE BEEN COVERED EITHER BY THE ORDERS OF THE TRIBUNAL IN ASSESEES OWN CASE OR BY RESPECTED COORDINATE BENCHES, THEREFORE, WE FIND NO FALLACY IN THE VIEW TAKEN BY THE LEARNED CIT (APPEALS). RESULTANTLY, THE SAME IS HEREBY CONFIRMED AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. THE NEX T OBJECTION WAS ABOUT THE PRESCRIBED AREA FOR THE PURPOSE OF CLAIM OF DEDUCTION U/S 80 IB (10) OF THE ACT. IN SUPPORT OF THE ABOVE CLAIM, THE ASSESSEE HAS FURNISHED THE COPY OF SANCTIONED MAP, LAY OUT PLAN AND DEMONSTRATED THAT THE TOTAL PLOT AREA WAS ABOVE THE PRESCRIBED LIMIT OF ONE ACRE. IN THIS REGARD, WE HAVE NOTED THAT HATE FIRST APPELLATE AUTHORITY HAS GIVEN A 9 ITA NO S . 35 & 36 /NAG/2014 FINDING OF FACTS DEMARCATING THE RESPECTIVE AREA OF THE PLOTS AND THERE UPON CAME TO THE CONCLUSION THAT THE TOTAL AREA OF THE PLOTS WAS ABOVE THE P RESCRIBED LIMIT OF ONE ACRE. WE HAVE NOTED THAT THE SAID FINDING OF FACT HAD NOT BEEN CONTROVERTED BY THE REVENUE DEPARTMENT. IN THE ABSENCE OF ANY CONTRARY MATERIAL ON R ECORD, WE HEREBY CONFIRM THE FINDINGS OF THE LEARNED CIT (A). AS A RESULT, THE GROUNDS RAISED BY THE REVENUE DEPARTMENT ARE HEREBY DISMISSED. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THI S 24 TH DAY OF NOV., 2015. SD/ - SD/ - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 24 TH NOV., 2015 . LAKSHMIKANT DEKA/SR. PS COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT ( APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE C OPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. 10 ITA NO S . 35 & 36 /NAG/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTAT ED ON 19.11.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 23.11.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. DATE OF PRONO UNCEMENT SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER