Dy. CIT, Circle-3(1), Hyderabad V. M/s. R V Nirmaan Pvt. Ltd., Hyderabad

ITA 352/HYD/2014

• Counselvise Citation: 35222514 RSA 2014
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: A V RAGHURAM
• Section: 115JB; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.352/HYD/2014 ASSESSMENT YEAR 2009-2010 DCIT, CIRCLE 3(1) HYDERABAD VS. M/S. RV NIRMAAN P. LTD., HYDERABAD PAN AABCR0774L (APPELLANT) (RESPONDENT) FOR REVENUE MR. P. SOMASEKHAR REDDY FOR ASSESSEE MR. A.V. RAGHURAM DATE OF HEARING 12.06.2014 DATE OF PRONOUNCEMENT 18.06.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY REVENUE AGAINST THE ORDERS OF THE CIT(A)-IV, HYDERABAD DATED 30.12.2013. THE ISSUE IN THIS APPEAL IS WITH REFERENCE TO CLAIM OF DEDUCTION UNDE R SECTION 80IB OF THE ACT. 2. BRIEFLY STATED, ASSESSEE IS A COMPANY ENGAGED I N THE BUSINESS OF CONSTRUCTION OF RESIDENTIAL APARTME NTS. FOR A.Y. 2009-2010, ASSESSEE CLAIMED DEDUCTION UNDER SE CTION 80IB OF RS.3,54,89,336/- WHILE ADMITTING INCOME UND ER SECTION 115JB ON THE BOOK PROFIT OF RS.5.35 CRORES. A.O. DID NOT ALLOW THE DEDUCTION UNDER SECTION 80IB ON THE P ROFITS EARNED FROM THREE HOUSING PROJECTS VIZ., R.V. AVANI NDRA, R.V. 2 ITA.NO.352/HYD/2014 M/S. RV NIRMAN P. LTD., HYDERABAD MANYATA AND R.V. BRUNDAVANAM ON THE REASON THAT THE PROJECTS WERE NOT COMPLETED BEFORE THE DUE DATES. A SSESSEE OBTAINED APPROVAL OF THE SAID PROJECTS ON 26.06.20 04 AND CONSTRUCTION HAS TO BE COMPLETED BY 31.03.2009 AS P ER THE PROVISIONS OF SECTION 80IB. ASSESSEE SUBMITTED A CO MPLETION CERTIFICATE ISSUED BY STRUCTURAL ENGINEER TO THE GH MC VIDE ITS LETTER DATED 15.09.2008 WITHIN THE SPECIFIED PERIOD I.E., 31.03.2009. HOWEVER, THE GHMC ISSUED THE CERTIFICAT E ON 30.11.2009 AS THERE ARE CERTAIN LEGAL MATTERS BY WH ICH IT COULD NOT ISSUE CERTIFICATE IMMEDIATELY. A.O. RELYING ON EXPLANATION- (II) TO SECTION 80IB(10)(A), DENIED THE DEDUCTION A S THE COMPLETION CERTIFICATE WAS NOT OBTAINED BEFORE 31.0 3.2009. LD. CIT(A) FOLLOWING THE ORDERS OF ITAT IN A.Y. 2007-08 AND 2008- 09 ON THE SAME ISSUE, HOWEVER, ALLOWED ASSESSEES A PPEAL DIRECTING THE A.O. TO ALLOW THE DEDUCTION. LD. CIT( A) FOLLOWED THE ITAT ORDER IN ITA.NOS.103/H/2012 AND 262/HYD/20 11 DATED 30.10.2012 WHEREIN ITAT DIRECTED THE A.O. TO EXAMINE CERTAIN ISSUES WITH REFERENCE TO COMPLETION CERTIFI CATE. LD. CIT(A) FOR IN THIS ASSESSMENT YEAR, HOWEVER, FOLLO WING THE DECISION OF ITAT, PUNE BENCH IN THE CASE OF SATISH BORA & ASSOCIATES ITA.NOS. 713 & 714/PN/2010 DATED 07.01.2 011 AND ALSO EXAMINING SECTION 455 OF GHMC ACT, 1955 AN D REVISED BUILDING RULES, 2006, EXAMINED THE ISSUE AN D ALLOWED THE CONTENTIONS OF THE ASSESSEE BY HOLDING AS UNDER : 5.6. IT IS CLEAR FROM A PERUSAL OF SEC.455 OF THE GHMC ACT, 1955 AND RULE 12 & 13 OF THE HYDERABAD REVISED BUILDING RULES, 2006 THAT THE RELEVANT PROVISIONS APPLICABLE TO HYDERABAD AND THE APPELLANT ARE SIMIL AR TO THOSE OF PUNE WHICH WERE TAKEN NOTE OF IN THE CA SE OF SATISH BORA AND ASSOCIATES: 3 ITA.NO.352/HYD/2014 M/S. RV NIRMAN P. LTD., HYDERABAD A. THERE IS NO CONCEPT OF ISSUE OF COMPLETION CERTIFICATE BY THE MUNICIPAL AUTHORITIES. ONLY AN OCCUPANCY CERTIFICATE IS REQUIRED TO BE ISSUED. B. THE MUNICIPAL LAWS/RULES SPECIFY A PERIOD OF 21 DAYS FOR THE MUNICIPAL AUTHORITIES TO PROCESS THE APPLICATION FOR ISSUE OF OCCUPANCY CERTIFICATE. C. AFTER THE LAPSE OF 21 DAYS, THE OCCUPANCY CERTIFICATE CAN BE PRESUMED TO HAVE BEEN ISSUED. 5.7 IT FOLLOWS FROM THE FACTS OF THE PRESENT CASE THAT THE APPELLANT HAVING APPLIED FOR ISSUE OF OCCUPANCY CERTIFICATE ON 15.09.2008, CAN BE DEEMED UNDER THE RELEVANT LAWS/RULES TO HAVE RECEIVED THE CERTIFICAT E ON 07.10.2008 (I.E. AFTER 21 DAYS) WHICH IS WELL BEFOR E THE SPECIFIED DATE U/S 80IB OF 31.03.2009. 5.8 THE DECISION IN THE CASE OF SATISH BORA AND ASSOCIATES ALSO REFERS TO THE FACT THAT SUCH DEEMED ISSUE OF OCCUPANCY CERTIFICATE WOULD BE APPLICABLE PROVIDED THERE ARE NO MAJOR DEVIATIONS IN THE PLAN. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT ANY SUC H MAJOR DEVIATION TOOK PLACE. INDEED, THE APPELLANT H AS REFERRED TO THE COMPLETION/OCCUPANCY CERTIFICATE DA TED 30.11.2009 ISSUED BY THE ZONAL COMMISSIONER, GHMC, WEST ZONE FOR THE CLAIM THAT THERE WERE NO DEVIATIO N POINTED OUT IN THIS CERTIFICATE. 5.9 THE ISSUE OF DELAY ON THE PART OF THE MUNICIPA L AUTHORITIES IN ISSUE OF CERTIFICATE WAS ALSO TAKEN NOTE OF IN THE CASE OF HINDUSTAN SAMUHA AWAS LTD. (ITA NOS.945 TO 950/PN/2010), DATED 30.08.2011, WHERE THE ITAT OBSERVED AS FOLLOWS: 'IT IS ALSO AN UNDISPUTED FACT THAT ISSUANCE OF OCCUPANCY CERTIFICATE IS THE PREROGATIVE OF THE LOC AL AUTHORITY I.E., AMC AND IN THIS REGARD, THE ASSESSE E 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 CONTROL OF THE ASSESSEE WAS ONLY TO MOVE THE AMC FOR COMPLETION CERTIFICATE FULFILLING ALL THE REQUIREMENTS WITH TH E AMC FOR ISSUANCE OF OCCUPANCY CERTIFICATE WHICH THE ASSESSEE HAS DONE IN THE PRESENT CASE. THUS, THE DELAY IN ISSUING THE OCCUPANCY CERTIFICATE CANNOT B E 4 ITA.NO.352/HYD/2014 M/S. RV NIRMAN P. LTD., HYDERABAD ATTRIBUTED ON THE PART OF THE ASSESSEE TO DENY THE CLAIMED DEDUCTION U/S 80-1B(10) OF THE ACT ON THE BASIS THAT THE PROJECT WAS NOT COMPLETED BY 31.03.2008, ESPECIALLY WHEN THERE IS NO OBJECTION RAISED BY THE AMC REGARDING DEVIATION IN THE CONSTRUCTION OF THE PROJECT APPROVED BY THE AMC. 5.10. IN THE CASE OF THE APPELLANT, THE APPELLANT HAD DONE WHAT WAS WITHIN ITS POWER: IT HAD APPLIED AS PER PRESCRIBED PROCEDURE TO GHMC WITHIN THE SPECIFIED PERIOD ON 15.10.2008. THE APPELLANT CANNO T BE FOUND FAULT WITH FOR THE DELAY ON THE PART OF GH MC. INDEED, THE ZONAL COMMISSIONER, WEST ZONE, GHMC IN HIS LETTER NO.140/A1/WZ/GHMC/2009, DATED 23.03.2009 WROTE TO THE APPELLANT AS FOLLOWS: 'AS VERIFIED FROM THE RECORDS, IT IS TO INFORM THAT FOR ALMOST ALL THE APARTMENT/FLATS THE PROPERTY TAX ASSESSMENTS ARE COMPLETED. AS YOU ARE AWARE THE MATTER CONCERNING BPS REGULATIONS IS PENDING BEFORE THE HON'BLE HIGH COURT OF ANDHRA THE APPLICATION WI LL BE PROCESSED ONLY AFTER APPROPRIATE ORDERS ARE RECEIVED FROM HON 'BLE HIGH COURT OF ANDHRA PRADESH . SINCE THE APARTMENTS/FLATS ARE ALREADY COMPLETED, T HE COMPLETION CERTIFICATE AS DESIRED BY YOU WILL BE IS SUED SUBJECTED TO THE OUTCOME OF THE WRIT PETITION DISPO SED BY THE HON'BLE HIGH COURT OF ANDHRA PRADESH.' THUS, THE EXPLANATION FOR THE DELAY IN ISSUE OF CERTIFICATE BY GHMC HAS BEEN DULY EXPLAINED BY GHMC. 5.11 IN VIEW OF THE ABOVE, AND IN ACCORDANCE WITH THE OBSERVATIONS OF THE ITAT IN THE APPELLANT'S CASE FO R PRECEDING YEARS, THE CLAIM OF DEDUCTION U/S 80IB IS DIRECTED TO BE ALLOWED. THE SECOND GROUND OF APPEAL IS ALLOWED. 3. AFTER CONSIDERING THE RIVAL CONTENTIONS AND EXAMINING THE ORDERS PLACED ON RECORD, WE ARE OF TH E OPINION THAT THERE IS NO NEED TO INTERFERE WITH THE ORDERS OF THE LD. CIT(A). THIS ORDER IS IN TUNE WITH THE DIRECTIONS O F THE ITAT GIVEN TO THE A.O. IN EARLIER TWO YEARS AND ALSO FOL LOWING THE PRINCIPLES LAID DOWN BY VARIOUS OTHER COORDINATE BE NCHES ON 5 ITA.NO.352/HYD/2014 M/S. RV NIRMAN P. LTD., HYDERABAD THE ISSUE. WE AGREE WITH THE FINDINGS OF THE LD. CI T(A) THAT ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80I B AND OBTAINING A COMPLETION CERTIFICATE BELATEDLY IS ONL Y A TECHNICAL DEFAULT WHICH DOES NOT AFFECT THE CLAIM OF THE ASSE SSEE. FOR THESE REASONS, THE REVENUE GROUNDS ARE REJECTED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.06.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 18 TH JUNE, 2014. VBP/- COPY TO 1. DCIT, CIRCLE 3(1), 7 TH FLOOR, B-BLOCK, I.T. TOWERS, HYDERABAD. 2. M/S. R.V. NIRMAAN P. LTD. 8-2-268/1/16/B, SRINIK ETAN, ROAD NO.3, BANJARA HILLS, HYDERABAD. 3. CIT(A)-IV, HYDERABAD 4. CIT-III, HYDERABAD 5. D.R. ITAT, A BENCH, HYDERABAD.