The DCIT, Central Circle- 3, Surat V. M/s. Rekha Construction Company, Surat

ITA 3659/AHD/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1987 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 30-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINIVAS T BIDARI
• Assessee Lawyers: SANJAY N KAP ADIA
• Keywords: Corroborative evidences; Non compliance; Competent authority
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.3659/AHD/2015/SRT / ASSESSMENT YEAR: 2012-13 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3, SURAT. VS. M/S. REKHA CONSTRUCTION COMPANY, 1194-95, RADHAKRISHNA TEXTILE MARKET, NR. SAHARA DARWAJA, RING ROAD, SURAT 395 002. [PAN: AAEFR 4596 G] ( ' / APPELLANT) ( #$' /RESPONDENT) / ASSESSEE BY : SHRI SANJAY N. KAPADIA, C.A /REVENUE BY : SHRI SRINIVAS T.BIDARI, CIT-DR /DATE OF HEARING : 03-08-2018 / DATE OF PRONOUNCEMENT : 26-10-2018 / ORDER PER C.M.GARG, JUDICIAL MEMBER: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-4, SURAT (CIT (A) FOR SHORT) DATED 23.10.2015 FOR THE ASSESSMENT YEAR (A.Y) 2012-13. 2. THE GROUNDS RAISED BY THE REVENUE READ AS FOLLOW S: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACTS AND CIRCUM STANCES OF THE CASE BY ALLOWING DEDUCTION U/S 80IB (10) OF THE I.T.ACT BY 2 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY AMOUNTING TO RS. 50,58,54,491/-, IN SPITE OF THE FA CT THAT THE ASSESSEE DID NOT MEET ONE OF THE MOST CRITICAL COND ITION I.E. COMPLETION OF THE PROJECT WITHIN FIVE YEARS AS PER SECTION 80IB(10)(A)(III) OF THE I.T.ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN LAW BY RELYING ON THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF TARNETAR CORPORATION (2012) 26 TAXMANN.COM 180 SINCE THE FACTS MENTIONED IN THE CASE OF M/S TARNETAR CORPORATION I S NOT IDENTICAL WITH THE PRESENT CASE I.E. M/S REKHA CONS TRUCTION COMPANY. HOWEVER THE DECISION OF THE HON'BLE GUJARAT HIGH COURT WAS NOT ACCEPTED BY THE DEPARTMENT AND THE SA ME HAS BEEN CHALLENGED BEFORE THE APEX COURT VIDE CIVIL AP PEAL NO.8121 OF 2013 AND STATUS OF THE SAME IS STILL PEN DING. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACTS AND CIRCUM STANCES OF THE CASE BY ALLOWING DEDUCTION U/S 80IB (10) OF THE I.T.ACT BY AMOUNTING TO RS.50,58,54,491/- BY IGNORING THE EXPL ANATION (II) OF THE PROVISIONS OF THE SECTION 80IB(10)(A) OF THE I.T.ACT, WHICH STATED THAT 'THE DATE OF COMPLETION OF CONSTR UCTION OF HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WH ICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING P ROJECT IS ISSUED BY THE LOCAL AUTHORITY. ' HOWEVER IN THIS CASE, THE LOCAL AUTHORITY I.E. SURAT MUNCIPAL CORPORATION HAS ISSUE D BUC FOR THE TOWERS 2,5 AND 7 OF THE PROJECT ON 28.09.2012, WHICH IS BEYOND STIPULATED TIME I.E. 31.03.2012. HENCE THE ORDER PASSED BY THE LD.CIT(A) IS PERVERSE IN VIEW OF THE ABOVE EXPLANATION (II) OF THE PROVISIONS OF SECTION 80IB( 10)(A) OF THE I.T.ACT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80IB (10 ) OF THE I.T.ACT BY IGNORING THE FACTS THAT THE AUDITOR OF T HE ASSESSEE HAS REPORTED IN HIS AUDIT REPORT THAT 'TOWER- 2,5 A ND 7 OF THE SAID PROJECT WERE COMPLETED AFTER 31.03.2012' AS ME NTIONED AT FORM 10CCB OF THE AUDIT REPORT. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT (A) MAY BE SET ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE T RIBUNAL. THE LD. CIT- 3 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY DEPARTMENTAL REPRESENTATIVE (CIT-DR) SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACTS AND CIRCUMSTANCES OF THE CASE BY ALLOWING DEDUCTION U/S 80IB (10) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') BY AMOUNTING TO RS. 50,58,54,491/-, IN SPITE OF THE FA CT THAT THE ASSESSEE DID NOT MEET ONE OF THE MOST CRITICAL CONDITION I.E. CO MPLETION OF THE PROJECT WITHIN FIVE YEARS AS PER SECTION 80IB(10)(A)(III) O F THE I.T. ACT. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN LAW BY R ELYING ON THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF TARNETAR CORPORATION (2012) 26 TAXMANN.COM 180 SINCE, THE FACTS MENTIONED IN THE CASE OF M/S TARNETAR CORPORATION IS NOT IDENTICAL WITH THE PRES ENT CASE I.E. M/S REKHA CONSTRUCTION COMPANY. HOWEVER THE DECISION OF THE HON'BLE GUJARAT HIGH COURT WAS NOT ACCEPTED BY THE DEPARTMENT AND THE SA ME HAS BEEN CHALLENGED BEFORE THE APEX COURT VIDE CIVIL APPEAL NO.8121 OF 2013 AND STATUS OF THE SAME IS STILL PENDING. 4. THE LD. CIT-DR FURTHER POINTED OUT THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACTS AND CIRCUMSTANCES OF THE CASE BY ALLOWING DEDUCTION U/S 80IB (10) OF THE I.T. ACT BY AMOUNTING TO RS. 5 0,58,54,491/- BY IGNORING THE EXPLANATION (II) OF THE PROVISIONS OF THE SECTION 80IB(10)(A) OF THE I.T. ACT, WHICH STATED THAT 'THE DATE OF COMPLE TION OF CONSTRUCTION OF HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WH ICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS I SSUED BY THE LOCAL AUTHORITY. ' HOWEVER IN THIS CASE, THE LOCAL AUTHORITY I.E. SUR AT MUNCIPAL 4 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY CORPORATION HAS ISSUED BUC FOR THE TOWERS 2, 5 AND 7 OF THE PROJECT ON 28.09.2012, WHICH IS BEYOND STIPULATED TIME I.E. 31.03.2012. HENCE THE ORDER PASSED BY THE LD.CIT(A) IS PERVERSE IN VIEW O F THE ABOVE EXPLANATION (II) OF THE PROVISIONS OF SECTION 80IB( 10)(A) OF THE I.T. ACT. HE FURTHER CONTENDED THAT THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80IB (10) OF THE I.T. ACT BY IGNORING THE FACTS THA T THE AUDITOR OF THE ASSESSEE HAS REPORTED IN HIS AUDIT REPORT THAT 'TOW ER- 2,5 AND 7 OF THE SAID PROJECT WERE COMPLETED AFTER 31.03.2012' AS ME NTIONED AT FORM 10CCB OF THE AUDIT REPORT. THE LD. CIT-DR PRAYED T HAT KEEPING IN VIEW ABOUT FACTS AND CIRCUMSTANCES THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO AND THE FIRST APPELLATE AUTHORITY W AS NOT CORRECT AND JUSTIFIED IN GRANTED RELIEF TO THE ASSESSEE THEREFO RE, THE IMPUGNED ORDER MAY KINDLY BE SET ASIDE BY RESTORING THAT OF THE AO . 5. THE LD. CIT-DR ALSO SUBMITTED THAT AS PER PROVIS ION OF S. 80- IB(10)(III) OF THE ACT THE ASSESSEE IS ENTITLED FOR DEDUCTION IF SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE FIRST DAY OF OCTOBER, 1988 AND COMPLETES SUCH CONSTRUCTION, IN A CASE WHE RE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON OR AFTE R 01.04.2005, WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WH ICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITIES. THE LD. CIT-DR SUBMITTED THAT FROM PARA 5 OF ASSESSMENT ORDER, IT IS CLEAR THAT THE PR OJECT OF THE ASSESSEE 5 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY WAS COMPLETED AFTER 31.03.2012 AS BUILDING USE CERT IFICATE (HEREAFTER REFERRED AS BUS) FOR BUILDING NO. 2, 5, 7 WAS ISSUE D AFTER 31.03.2012 ON 28.09.2012. THUS, THE ASSESSEE FIRM HAS VIOLATED TH E PROVISIONS OF THE S. 80-IB(10)(A)(III) OF THE ACT. THE LD. CIT-DR SUBMI TTED THAT THE CONCLUSION DRAWN BY THE LD. AO IN PARA 6 OF ASSESSMENT ORDER, THE ASSESSEES PROJECT NAMELY VRAJBHUMI COMPLEX FAILS TO QUALIFY FOR DED UCTION U/S. 80-IB(10) OF THE ACT, THEREFORE THE AO WAS RIGHT IN DISALLOWING CLAIM OF DEDUCTION TO THE ASSESSEE. THE LD. CIT-DR SUBMITTED THAT THE FIRST APPELLATE AUTHORITY HAS ERRED IN GRANTED RELIEF TO THE ASSESSEE BY FOLLOWIN G AND RELYING ON THE RATIO OF THE DECISION OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF TARENTAR CORPORATION (SUPRA) AS THE SAME HAS NOT BEEN ACCEPT ED BY THE DEPARTMENT AND SLP HAS BEEN FILED BEFORE HON'BLE SU PREME COURT AGAINST SAID JUDGMENT, WHICH IS STILL PENDING. THE REFORE, THE AO WAS NOT BOUND TO FOLLOW THE SAID JUDGMENT OF HON'BLE HIGH C OURT AS THE SAME HAS BEEN CHALLENGED BY THE REVENUE BEFORE HON'BLE APEX COURT. THEREFORE, THE LD. CIT-DR SUBMITTED THAT THE IMPUGNED FIRST AP PELLATE ORDER MAY KINDLY BE SET ASIDE BY RESTORING THAT OF THE AO. 6. REPLYING TO THE ABOVE, THE LD. AR SUBMITTED THAT THE ORDER/JUDGMENT PASSED BY HONBLE JURISDICTIONAL HIGH COURT OF GUJA RAT ARE BINDING ON ALL THE REVENUE AUTHORITIES AND TRIBUNAL UNTIL AND UNLE SS THE SAME IS REVERSED, MODIFIED OR SET ASIDE BY THE HON'BLE LARG ER BENCH OR BY HON'BLE SUPREME COURT THEREFORE, THE AO RIGHT IN FOLLOWING DECISION OF HON'BLE 6 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY HIGH COURT IN THE CASE OF TARENTAR CORPORATION (SUPRA). THE LD. AR SUBMITTED THAT THE GROUND NO.4 OF REVENUE HAS BEEN DRAFTED BY TAKING INCORRECT AND INCOMPLETE FACTS THEREFORE, THE SAME IS MISLEADING. THE FACTUAL POSITION IS THAT THE AUDITED REPORT FOR AY 2012-13 DATED 20.09.2012 IN FORM-10CCB CLEARLY REVEALS THAT THE D ATE OF COMPLETION OF HOUSING PROJECT OF TOWER 2, 5 & 7 WAS 17.03.2012 AN D APPLICATIONS SEEKING COMPLETION CERTIFICATE FOR THESE THREE TOWE RS WERE SUBMITTED BY THE ASSESSEE ON 20.03.2012 BEFORE THE COMPETENT AUT HORITY AND THE BUILDING COMPLETION CERTIFICATES FOR THESE THREE TO WERS WERE ISSUED TO THE ASSESSEE ON 28.09.2012. 7. THE LD. AR SUBMITTED THAT AS PER JUDGMENT OF HON 'BLE SUPREME COURT IN THE CASE OF S. SUNDARAM PILLAI VS. V.R. PATTABIRAMAN REPORTED I N 1985 AIR 582 (SC) FOR PROPER UNDERSTANDING OF PROVISIONS OF ACT OR A NY STATUE THE LETTERS AND SCRIPTS SHOULD BE UNDERSTOOD IN A RIGHT PROSPECTIVE WITHOUT PUTTING THEREIN ANY WORD OR MEANING BY THE JUDICIAL AUTHORITY, WHO IS CONSIDERING THE INTERPRETATION OF SUCH PROVISION , OTHERWISE THERE WOULD BE A HAVOC AND POSSIBILITIES OF MISINTERPRETATION A ND MISUNDERSTANDING OF THE PROVISIONS OF THE ACT. 8. THE LD. AR VEHEMENTLY SUBMITTED THAT THE LD. CIT (A) WHILE GRANTED RELIEF TO THE ASSESSEE HAS FOLLOWED AND RELIED ON T HE BINDING JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. TARENETAR 7 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY CORPORATION (SUPRA), WHEREIN IT WAS HELD THAT WHERE ASSESSEE HAD COMPLETED HOUSING PROJECT WILL BEFORE FINAL DATE BU T LOCAL AUTHORITY, FOR TECHNICAL REASONS, GRATED BUSINESS USE PERMISSION A FTER SUCH DATE, ASSESSEE WOULD BE ENTITLED TO DEDUCTION. MERELY BE CAUSE SLP IS PENDING AGAINST THE SAID JUDGMENT, THE REVENUE AUTHORITIES CANNOT IGNORE OR DISCARD THE RATIO OF THE BINDING DECISION OF HONBL E JURISDICTIONAL HIGH COURT OF GUJARAT THEREFORE, THE CONCLUSION DRAWN BY THE LD. CIT-DR BY FOLLOWING DECISION OF HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE OF CIT VS. TARENETAR CORPORATION (SUPRA) IS QUITE CORRECT, JUSTIFIED AND SUSTAINABLE THEREFORE, THE SAME MAY KINDLY BE UPHEL D BY DISMISSING APPEAL OF THE REVENUE. 9. THE LD. AR SUBMITTED THAT AS PER RATIO OF THE AN OTHER DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF ITO VS. SAKET CORPORATION REPORTED IN 62 TAXMANN.COM 38 (GUJ.), WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE HAD COMPLETED CONSTRUCTION OF ITS ENTIRE HOUSING PROJECT AND APPLIED FOR BUILDING USE PERMISSION/COM PLETION CERTIFICATE WITHIN PRESCRIBED TIME-LIMIT, IT WOULD BE ENTITLED TO DEDUCTION U/S. 80-IB(10) OF THE ACT NOTWITHSTANDING FACT THAT IT COULD NOT R ECEIVE PERMISSION FOR ITS ENTIRE PROJECT. THE LD. AR CONTENDED THAT AS PER RA TIO OF DECISION OF HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. HINDUSTAN SAMUH AWAS LTD. REPORTED IN 377 ITR 150 (BOM.) , WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE-BUILDER UNDERTOOK A HOUSING PROJECT WH ICH WAS COMPLETED 8 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY ON TIME AND AN APPLICATION WAS MOVED IN TIME FOR SE EKING COMPLETION CERTIFICATE FROM MUNICIPAL AUTHORITY BUT SAME WAS I SSUED TO ASSESSEE WITH DELAY, THAT DELAY COULD NOT BE ATTRIBUTED TO THE AS SESSEE AND ASSESSEE WAS ENTITLED TO EXEMPTION U/S. 80-IB(10) OF THE ACT . THE LD. AR ALSO PLACED RELIANCE ON THE ORDERS OF ITAT, PUNE IN THE CASE OF SIDDHIVINAYAK KOHINOOR VENTURE VS. ACIT REPORTED IN 54 TAXMANN.COM 31 (PUNE-TRIB.), IN THE CASE OF ITO VS. SHRI RAMESH VITHAL GALANDE ORDER DATED 03.03.2017 IN ITA NO.1909/PUN/2014 (PUNE-TRIB.) & I N THE CASE OF SATISH BORA AND ASSOCIATES VS. ACIT ORDER DATED 07.01.2011 IN ITA NOS.713 & 714/PN/2010 (PUNE-TRIB.) TO SUPPORT THE CLAIM OF THE ASSESSEE U/S. 80IB(10) OF THE ACT. 10. THE LD. AR ALSO SUBMITTED THAT IN THE PRESENT C ASE FROM THE UNDISPUTED AUDIT REPORT PREPARED BY COMPETENT AND A UTHORIZED AUDITOR IN FORM-10CCB, WHICH WAS SUBMITTED BEFORE THE AUTHORIT IES BELOW, IT IS CLEAR THAT THE AUDITOR HAS CERTIFIED THAT THE CONSTRUCTIO N OF TOWERS NO.2, 5 & 7 WAS COMPLETED ON 17.03.2012 AND THEREAFTER, THE ASS ESSEE SUBMITTED APPLICATION SEEKING FOR BUILDING COMPLETION CERTIFI CATE ON 23.03.2012 FOR ALL THREE TOWERS AND THESE FACTS HAVE NOT BEEN CONT ROVERTED BY THE AO DURING ASSESSMENT PROCEEDINGS AND BY THE LD. CIT-DR DURING ARGUMENTS BEFORE THE BENCH THEREFORE, IN VIEW OF THESE UNDISP UTED FACTS, IT HAS TO BE PRESUMED THAT THE ASSESSEE COMPLETED CONSTRUCTION A ND ALSO APPLIED FOR BUILDING COMPLETION CERTIFICATES FOR ALL THREE TOWE RS. THE LD. AR 9 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY VEHEMENTLY POINTED OUT THAT IF, THE COMPETENT AUTHO RITY IS ISSUING BUILDING COMPLETION CERTIFICATE ON 28.09.2012 AFTER PRESCRIB ED TIME LIMIT THEN, THE ASSESSEE CANNOT BE DENIED DEDUCTION U/S. 80IB(10) O F THE ACT DESPITE THE FACT THAT IT COULD NOT RECEIVE PERMISSION WITHIN PR ESCRIBED TIME LIMIT AS THE ISSUANCE OF CERTIFICATE IS BEYOND CONTROL OF THE AS SESSEE. 11. THE LD. AR AGAIN TOOK US THROUGH RELEVANT OPERA TIVE PART OF THE FIRST APPELLATE ORDER I.E., PARA 8 AND SUBMITTED THAT THE LD. CIT(A) AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF T HE CASE IN RIGHT PROSPECTIVE AND BY FOLLOWING THE RATIO OF THE DECIS ION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. TARNETAR CORPORATION (SUPRA) RIGHTLY ALLOWED RELIEF TO THE ASSESSEE AND THE FIRST APPELLATE ORDER IS QUITE CORRECT AND SUSTAINABLE THUS, THE SAME MAY KINDLY BE UPHELD BY DISMISSING APPEAL OF REVENUE. 12. PLACING REJOINDER TO THE ABOVE, THE LD. CIT-DR AGAIN SUBMITTED THAT WHEN THE SLP OF DEPARTMENT IS PENDING AGAINST THE O RDER OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. TARNETAR CORPORATION (SUPRA) THEN, IT CANNOT BE PRESUMED THAT THE ISSUE HAS ATTAINED F INALITY AND THE AO IS NOT DUTY BOUND TO FOLLOW THE JUDGMENT AND HENCE, TH E LD. CIT(A) WAS NOT CORRECT IN GRANTING RELIEF TO THE ASSESSEE BY FOLLO WING ORDER OF HON'BLE HIGH COURT. 10 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY 13. IN VIEW OF ABOVE NOTED CONTENTIONS AT THE VERY OUTSET, WE OBSERVE THAT FROM THE CONCLUSION RECORDED BY THE AO IN THE ASSESSMENT ORDER, WE OBSERVE THAT THE LD. AO DENIED DEDUCTION U/S. 80-IB (10) OF THE ACT WITH FOLLOWING CONCLUSIONS AND FINDINGS: A. THE CONSTRUCTION OF THE ELIGIBLE PROJECT WAS NOT COMPLETE ON 31.03.2012 AS IS EVIDENCED BY THE INSPECTION REPORT OF THE LOCAL AUTHORITY SMC DTD. 11.04.2012. B. THE BUC HAS BEEN ISSUED IN THE CASE OF TOWERS 2, 5 & 7 ON 28.09.2012. THE DATE OF COMPLETION THEREFORE NEEDS TO BE TAKEN AS 28.09.2012 IN ACCORDANCE WITH S. 80-IB(10)(A)(II I)(EXPLN.II) OF THE I.T. ACT. C. THE ALLEGED OCCUPATION OF THE FLATS BY THE FLAT PUR CHASERS, AS SOUGHT TO BE SHOWN BY THE ASSESSEE, IS, [WITHOUT PR EJUDICE TO ACTUAL GROUND SITUATION IN THIS REGARD], AGAINST TH E LAW APPLICABLE IN THIS REGARD AND SO ILLEGAL. THE SAME CANNOT BE COUNTENANCED AND PERMITTED IN LAW SO AS TO BE USED AS VALID BAS IS FOR ALLOWING ANY DEDUCTION TO THE ASSESSEE. 14. FURTHER, ON CAREFUL AND VIGILANT CONSIDERATION OF ABOVE RIVAL SUBMISSIONS, FIRST OF ALL, FOR THE SAKE OF COMPLETE NESS, WE ALSO FIND IT NECESSARY AND APPROPRIATE TO REPRODUCE RELEVANT OPE RATIVE PART OF THE FIRST APPELLATE ORDER, WHEREIN THE LD. CIT(A) RECORDED HI S FINDINGS FOR GRANTING RELIEF TO THE ASSESSEE, WHICH READ AS FOLLOWS: 8. I HAVE GONE THROUGH THE FACTS OF THE CASE, OBSE RVATIONS OF THE AO, THE CASE LAW RELIED ON BY THE AO AND THE APPELLANT, THE CONTENTIONS OF THE ASSESSEE AND THE DOCUMENTS/EVIDENCES RELEVANT T O THE ISSUE IN APPEAL. THE FOLLOWING PERTINENT OBSERVATIONS ARE MA DE AFTER CONSIDERING ALL THE ASPECTS: 1) THE PROJECT OF THE ASSESSEE WAS APPROVED .IN MAR CH, 2007 WHILE THE PROVISIONS OF SECTION 80IB(10) MANDATE COMPLETI ON OF THE PROJECT WITHIN FIVE YEARS FROM THE END OF 31.0.3.20 07 I.E. ON OR BEFORE 31.03.2012. THE MAIN REASON, ACCORDING TO THE A.O. FOR 11 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY DENYING THE BENEFIT OF SECTION 80IB(10) OF THE ACT WAS THE FACT THAT BUC FOR BUILDING NO. 2, 5, 7 WAS ISSUED AFTER 31.03.2012; AND THEREFORE HE HELD THAT THE FIRM HAD VIOLATED THE PR OVISIONS OF THE SECTION S01B(10} OF THE I.T. ACT. WHEN THE ASSESSEE FIRST APPLIED FOR BUC, THERE WERE CERTAIN DEFICIENCIES NOTED BY T H(~SMC WERE WITH REGARDS TO UNAUTHORIZED CONSTRUCTION IN C.O.P AND NON COMPLIANCE WITH CERTAIN OTHER MANDATORY RULES OF TH E GD & CR NAMELY RULE 7.2 OF GDCR. THE A.O HAS HIGHLIGHTED THE FACT THAT, THE BUC WAS ISSUED BY THE SMC BELATEDLY ON 28/09/20 12 ONLY AFTER A FRESH SUBMISSION DT.25/09/2012. 2) THE FOLLOWING FACTS RELATED TO CONSTRUCTION AND OCCUPANCY OF THE BUILDING IS UNDISPUTED: A. CONSTRUCTION OF ALL TOWERS INCLUDING TOWERS NO.2 ,5& 7 WAS COMPLETED BEFORE 31/03/2012. EVEN THE BUC HAD BEEN GIVEN MUCH EARLIER FOR TOWERS 1,3,4 & 8. MANY FLATS WERE SOIA AND OCCUPIED BEFORE 31/03/2012 INCLUDING IN THE TOWERS 2,5 & 7 FOR WHICH PROOF LIKE COPIES CF SC J E DEEDS, ELECTRICITY BILLS ,MUNCIAPAL TAX PAYMENTS ETC. WERE FILED DURING THE CO-SE OF A SSESSMENT PROCEEDINGS. B) THE BU PERMISSION FOR THE TOWERS NO.2,5& 7 ALSO WAS APPLIED BEFORE THE LAST DATE I.E 23/03/2012.THE FOLLOWING E VIDENCES WERE FILED BY THE APPELLANT BEFORE THE A.O IN SUPPO RT OF IT'S CASE THAT THE BUILDING WAS COMPLETE BEFORE THAT DATE SUC H AS 1) COMPLETION CERTIFICATE OF GOVERNMENT APPROVED CHART ERED ENGINEERS 2) STABILITY CERTIFICATE OF STRUCTURE ENG INEERS 3) LICENSE TO USE LIFT CERTIFICATE 4) POSSESSION LETTE RS, 5) CERTAIN ELECTRICITY CONSUMPTION --STATEMENT REFLECTING THE ELECTRICITY CONNECTION 6) FIRE FIGHTING CERTIFICATE 7) CERTAIN SMC MUNICIPAL TAX BILLS. C) THE AO'S OBJECTION IS BASED ON THE REJECTION LET TER DT.IL/04/2012 AND DEFICIENCIES NOTED BY THE SMC; WHICH HAVE BEEN DISCUSSED IN PARA 5.1 AND IT'S SUB PARAS IN THE ASSESSMENT OR DER. 3) THE DEFICIENCIES POINTED OUT IN THE SMC LETTER, THE A.O'S OBSERVATIONS AND ASSESSEE'S CONTENTIONS AND MATERIA L EVIDENCES HAVE BEEN CAREFULLY CONSIDERED BY ME AND THE FOLLOWING PERTINENT OBSERVATIONS ARE MADE: A. THE FIRST OBJECTION WAS NOT REGARDING NON COMPLE TION OF BUILDING BUT WAS ACTUALLY RELATED TO UNAUTHORIZED/A DDITIONAL CONSTRUCTION. IN MY CONSIDERED VIEW ONCE IT IS REGU LARIZED EVEN AFTER STIPULATED PERIOD ON THE APPLICATION FILED BEFORE THE DUE DATE (WHICH IS UNDISPUTED FACT);.. IT ONLY PROVES THAT ADDITIONAL CONSTRUCTION WAS MADE BEFORE THE 12 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY STIPULATED DUE DATE AND NOT IN ANY WAY IT CAN BE INTERPRETED TO MEAN INCOMPLETE CONSTRUCTION; PARTIC ULARLY AS IT HAS BEEN REGULARIZED. B. THE GDCR PROVIDES FOR NUMEROUS CONDITIONS AND REQUIREMENTS TO BE FULFILLED BEFORE THE ISSUE OF BU C. THIS INCLUDE SOME VERY BASIC AND FUNDAMENTAL STIPULATION S LIKE I) THE STRUCTURAL STABILITY II) THE COMPLETION OF B UILDING UNDER STIPULATED SUPERVISION AND CERTAIN(III) CONDITIONS FOR CONVENIENCE ( LIKE LIFT, PROVISION OF PROPER, PAVED AND MARKED PARKING) , SAFETY (LIFT SAFETY & FIRE ETC.) AND (IV) CERTAIN PROVISIONS FOR ENVIRONMENT PROTECTION (TREE PLANTATION AND RAIN WATER HARVESTING). C. THE NEXT TWO OBJECTIONS ARE RELATED TO MARKINGS FOR PARKING AND PROVISION OF PERCOLATION WELL (FOR WATE R HARVESTING). THESE ARE NOT SUBSTANTIVELY LINKED TO ESSENTIAL CONSTRUCTION OF BUILDING BUT ECO-CONVERSION AND CONVENIENCE OF PARKING DIRECTIONS (NOT PARKING PER SE). ACCORDING TO APPELLANT THE BORE WELL AND CONNECTION S TO IT WERE COMPLETE, THE OBJECTION WAS RAISED AS ACCORDIN G TO INSPECTORS THE FLOW TO BORE WELL WAS NOT OKEY. THE APPELLANT'S CONTENTION CARRIES WEIGHT AS JUDGING BY PREPONDERANCE OF PROBABILITY AS 4 TOWERS WERE ALREA DY GIVEN BUC; THE BORE WELLS WERE ALREADY IN DESIGN AN D THE SMC HAS NOT ALLEGED THAT BORE WELL WERE NOT THERE A T ALL. THERE IS NO OBJECTION THAT PARKING PLACES WERE NOT PROVIDED FOR, NOT COMPLETE OR NOT PAVED. MARKING FR OM MAIN GATES MUST ALREADY BE THERE FOR BUC FOR 4 TOWE RS. IN MY CONSIDERED VIEW; IT WOULD BE VERY FAR- FETCHED T O HOLD THAT THE BUILDING IS NOT COMPLETE, IN VIEW OF THESE OBJECTIONS ALONE. D. THE LAST OBJECTION WAS VERY TECHNICAL. SMC WAS N OT SATISFIED WITH THE MISSING SIGNATURE OF SUPERVISOR ON FORM 8. I HAVE GONE THROUGH COPY OF FORM 8 SUBMITTED WHI CH IS DATED 17 TH MARCH 2012. IT IS SIGNED BY OWNER AND STRUCTURAL ENGINEER SH JALIL A SHEIKH. IT CERTIFIES THAT BUILDING HAS BEEN CONSTRUCTED ACCORDING TO SANCTION ED PLAN, AND STRUCTURAL DESIGN AND UNDER SUPERVISION. IT IS TRUE THAT SUPERVISING ENGINEER HAS NOT SIGNED IT, BUT I HAVE NOTED THAT THE STIPULATED FORM WHICH IS NUMBERED AND IS SOLD BY SMC FOR RS 10; ITSELF PROVIDES FOR SIGNATURE OF THE STRUCTURAL DESIGNER AND IN PRINTED FORM ITSELF AT A SINGLE PLA CE OPTION OF 13 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY SIGNATURE OF EITHER OWNER OR SUPERVISOR HAS BEEN GI VEN. OWNER HAS SIGNED IT. IF SIGNATURE OF SUPERVISOR WERE MAND ATORY AND THERE WAS ANY SHOT-COMING; IT WAS IN THE PRINTED FORM ITS ELF. PENALIZING THE BUILDER FOR IT, IS INJUSTICE. E) BUC HAS BEEN IN FACT GRANTED ON APPLICATION DATE D 23/03/12. THE RELEVANT PART OF THE BUC DT.28/09/2012 IS REPRODUCE D BELOW. 'REFERENCE:-APPLICATION FOR OCCUPANCY CERTIFICATE 9 B.U.C) ON DEVELOPMENT SCHEME:- TP SCHEME NO. 19 (PARVAT-MAGOB ]) WITH REFERENCE TO YOUR APPLICATION FOR BUILDING USE CERTIFICATE, DATED: 23/03/2012, THE PERMISSION FOR OCCUPANCY IS HEREBY GRANTED FOR THE FOLLOWING UNITS ON THE FLOOR MENTIONED AGAINST EACH UNIT AND FOR THE USE SPECIFIED AGAINST EACH UNIT. AS PER APPROVED PLAN DATED: 23/03/2012 AND SUBJECT TO THE COMPLETION CERTIFICATE SUBMITTED BY ARCHITECT BHARATKUMAR MAGA NBHAI PATEL AND STRUCTURAL STABILITY CERTIFICATE FROM JALIL A SHEIK H ON FOLLOWING CONDITIONS. . A VERY IMPORTANT POINT TO NOTE FROM ABOVE LETTER IS THAT NOT ONLY HAS THE FINAL BUC BEEN GIVEN ON THE APPLICATION FILED ORIGI NALLY ON 23.03.2012, BUT ALSO IT HAS BEEN GIVEN BASED ON THE COMPLETION CERTIFICATES SUBMITTED BY ARCHITECT BHARATKUMAR MAGANBHAI PATEL AND STRUCTURAL STABILITY CERTIFICATE FROM JALIL A SHEIKH FILED IN MARCH, 2012 ITSELF. CONSIDERING THE ABOVE FACTS AND MY OBSERVATIONS INC LUDING THE VERY IMPORTANT FACT THAT BUC HAS BEEN GRANTED BASED ON C OMPLETION CERTIFICATES OF MARCH, 2012; EVIDENCES HAVE BEEN FI LED SHOWING COMPLETION OF THE BUILDING [SUCH AS 1) CERTIFICATE OF GOVERNMENT APPROVED CHARTERED ENGINEERS 2) STABILITY CERTIFICA TE OF STRUCTURE ENGINEERS 3) LICENSE TO USE LIFT CERTIFICATE 4) POS SESSION LETTERS, ETC. DISCUSSED IN PARA 'B' ABOVE; I HOLD THAT THE PROJEC T WAS COMPLETED I MARCH, 2012 ITSELF AND THE CONDITIONS FOR ELIGIBILI TY FOR DEDUCTIONS U/S. 80IB(10) OF THT ACT HAVE BEEN MET. IN HOLDING SO, I HAVE RELIED HEAVILY ON THE JUDGMEN T OF HON'BLE JURISDICTIONAL GUJARAT HIGH COURT IN THE CASE OF TA RENTAR CORPORATION (2012) 26 TAXMANN.COM 180 (GUJARAT). THE RELEVANT P AN O:' THE JUDGMENT IS REPRODUCED BELOW: R.S NO. BLOCK NO. O.P NO. F.P NO. C.S. NO. T.P.S NO.19 114 2 5 -- CASE NO.:CTDO/OUT/02042012/2 DEVELOPMENT TYPE: HIGH RISE BUILDING TYPE:-APARTMEN T WITHOUT PODIUM 14 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY '5. WE HAVE PERUSED THE DERAILED DISCUSSION OF THE CIT (APPEALS) AS WELL AS THE TRIBUNAL ON THE ISSUE. IN PARTICULA R, THE TRIBUNAL NOTED THAT THE CONSTRUCTION WAS COMPLETED IN 2006. APPLICATION FOR BU PERMISSION TO THE MUNICIPAL AUTHORITIES WAS FILE D ON 15.2.2006 WHICH WAS REJECTED ON 1.7.06. SEVERAL RESIDENTIAL UNITS WERE OCCUPIED SINCE THE SAME WAS DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HAD ALSO PAID PENALTY AND GOT SUCH OCC UPATION REGULARIZED. SEVERAL TENEMENTS WERE SOLD LONG BEFO RE THE LAST DATE. 6. IN THE PRESENT CASE, THEREFORE, THE FACT THAT TH E ASSESSEE 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 S. 80-IB(1) LINKS THE COMPETITION ON THE CONSTRUCTION T THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STAT UTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIE W THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOS E FOR WHICH DEDUCTION WAS BEING MADE AVAILABLE 7. IN TEE PRESENT CASE, THE FACTS ARE PECULIAR. T HE ASSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFOR E THE FINAL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSI ON WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT CO MPLETED, BUT THE SOME OTHER TECHNICAL GROUND, IN MAT VIEW OF THE MAT TER, GRANTING BENEFIT OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL.' IN VIEW OF THE ABOVE, I HOLD THAT THE MINOR DE VIATIONS AS DISCUSSED IN PARA 'C' ABOVE ARE NOT OF THE NATURE THAT SHOULD VITIATE THE VERY PURPOSE FOR WHICH THE DEDUCTION WAS MADE AVAILABLE. I HAVE CONSIDERED THE CASE LAW CITED BY THE AO WHICH ARE MAINLY ON ST RICT AND LITERAL MEANING OF THE WORDS USED. I FIND THAT THE REQUIREM ENT OF THE SECTION IS COMPLETION OF BUILDING WITHIN TIME AND NOT STRICTLY 'PERMISSION FOR USE' AND INTERPRETATION IS REQUIRED. I HAVE ALSO NOTED T HE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF IPCA LABORATORIES LTD. 266 ITR 521 & IN THE CASE OF BAJAJ TEMPO LTD. 62 TAXMAN 480 WHICH IS RELIED UPON, BY THE APPELLANT. CONSIDERING ALL THESE, I HOLD A VIEW THAT THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT GIVES BETTER GUIDANCE PARTICULARLY AS IT IS ON THE SPECIFIC SECTION ITSELF. IN VIEW OF THE ABOV E, HOLDING THAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S. 80IB(10) OF THE ACT, IN VIEW OF THE SPECIFIC FACTS OF THE CASE; THE GROUND OF APPEAL IS ALLOWED. 15 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY 15. FROM THE FACTUAL ASPECTS AND POSITION NOTED BY THE AO THE CONSTRUCTION OF ELIGIBLE PROJECT WAS TO BE COMPLETE ON OR BEFORE 31.03.2012 BUT THE SAME WAS NOT COMPLETED AS PER IN SPECTION REPORT OF SURAT MUNICIPAL CORPORATION DATED 11.04.2012, AND T HE BUC ISSUED COMPLETION CERTIFICATE FOR TOWER 2, 5 & 7 ON 28.09. 2012 THEREFORE, THE DATE OF COMPLETION IS TO BE TAKEN ON THE SAME DATE OF IS SUANCE OF COMPLETION CERTIFICATION I.E., 28.09.2012. WITH THESE OBSERVA TIONS, THE AO HELD THAT THE ASSESSEES PROJECT NAMELY VRAJBHUMI COMPLEX F AILS TO QUALIFY FOR DEDUCTION U/S. 80-IB(10) OF THE ACT. THE CLAIM OF THE ASSESSEE ON THIS ACCOUNT IS ACCORDINGLY REJECTED. 16. FROM THE RELEVANT PART OF FIRST APPELLATE ORDER , AS REPRODUCED HEREIN ABOVE, WE OBSERVE THAT THE LD. CIT(A) ANALYZED AND EVALUATED ABOVE FINDINGS OF THE LD. AO IN THE LIGHT OF FACTS AND CI RCUMSTANCES OF THE CASE AS WELL AS EXPLANATION OF THE ASSESSEE. THE UNDISPUTE D FACTS LEADING TO THE PROJECT OF THE ASSESSEE WAS APPROVED IN MARCH, 2007 AND AS PER MANDATE OF S. 80-IB(10) OF THE ACT THE COMPLETION O F PROJECT IS REQUIRED TO BE MADE WITHIN FIVE YEARS FROM THE END OF FINANCIAL YEAR (FY) 2006-07 I.E., ON OR BEFORE 31.03.2012. AS WE HAVE NOTED ABOVE, A S PER AUDIT REPORT U/S. 80-IB(10) OF THE ACT IN FORM-10CCB, THE CONSTR UCTION OF TOWERS 2, 5 & 7 WAS COMPLETED ON 17.03.2012 AND THEREAFTER, THE A SSESSEE APPLIED FOR BUILDING COMPLETION CERTIFICATION ON 23.03.2012 INF ORMING THE COMPETENT AUTHORITY THAT THE CONSTRUCTION OF THREE TOWERS HAS BEEN COMPLETED AND 16 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY THEREFORE, BUILDING COMPLETION CERTIFICATE MAY KIND LY BE ISSUED AND THIS EXERCISE WAS DONE BEFORE THE REQUIRED DUE DATE OF 3 1.03.2012 AS PER MANDATE S. 80-IB(10) OF THE ACT. 17. FROM THE COPY OF THE LETTER OF COMPETENT AUTHOR ITY/ASST. ENGINEER, SURAT MUNICIPAL CORP. DATED 11.04.2012 (COPY AT ASS ESSEES PAPER BOOK PAGE 29) SHOWS THAT THE COMPETENT AUTHORITY REJECTE D THE PERMISSION TO LIVE FOR THE FOLLOWING REASONS. 1. NECESSARY CLARIFICATION REQUIRED REGARDING CONST RUCTION IN C.O.P. 2. IT IS NECESSARY TO PUT DIRECTION INSTRUCTION BOA RD FOR ENTRANCE WAY AND EXIT WAY, VISITOR PARKING, CAR PARKING, SCOOTER PARKING ETC. 3. IT IS NECESSARY TO MAKE PROVISION FOR PERCOLATED BOREWELL. 4. SIGNATURE OF THE SITE SUPERVISOR IS REQUIRED IN THE PRESENTED FORM NO.8 OF LIVING APPLICATION. 18. FROM ABOVE REASONS, IT IS CLEARLY DISCERNABLE T HAT THE COMPETENT AUTHORITY DID NOT REJECT THE APPLICATION OF THE ASS ESSEE SEEKING COMPLETION CERTIFICATE BUT POINTED OUT SOME DEFICIENCIES, WHIC H WERE REQUIRED TO BE ELIMINATED OR CURED BEFORE THE AUTHORITY GRANTS PER MISSION TO LIVE IN THE BUILDING CONSTRUCTED BY THE ASSESSEE. THEREFORE, A DVERSE VIEW TAKEN BY THE AO ON THE BASIS OF SAID LETTER IS NOT CORRECT A ND JUSTIFIED AS THE DEFICIENCIES POINTED BY THE COMPETENT AUTHORITY WER E WITH REGARD TO UNAUTHORIZED CONSTRUCTION OF COP; PUTTING INSTRUCTI ON BOARD FOR ENTRANCE AND EXIT WAY, CAR PARKING, VISITORS PARKING, SCOOTE R PARKING ETC; FOR MAKING PROVISION FOR PERCOLATED BOREWELL AND SIGNATURE OF SITE SUPERVISOR IN FORM- 8 OF LIVING APPLICATION/PERMISSION TO LIVE APPLICAT ION AND NO DEFICIENCY HAS 17 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY BEEN POINTED OUT IN TOWER 2, 5 & 7 AND THEREFORE, EVEN IN EXISTENCE OF ABOVE NOTED DEFICIENCIES, WHICH ARE RECTIFIABLE AND CURABLE, IT CANNOT BE DENIED THAT THE BUILDING WAS COMPLETED ON 17.03.201 2 AND APPLICATION FOR ISSUANCE OF COMPLETION CERTIFICATE WAS SUBMITTED ON 23.03.2012. 19. THE LD. CIT(A) ALSO NOTED SOME OTHER RELEVANT A ND GLARING FACTS SUCH AS THE CONSTRUCTION OF ALL TOWERS INCLUDING TO WERS NO. 3, 5 &B 7 WAS COMPLETED BEFORE 31.03.20112 AND THE BUC HAD BEEN G IVEN MUCH EARLIER FOR TOWERS 1, 3 4 & 8 AND THE NUMBER OF FLATS WERE SOLD AND OCCUPIED BEFORE 31.03.2012 INCLUDING IN THE TOWERS 2, 5 & 7 FOR WHICH PROOF LIKE COPIES OF SALE DEEDS, ELECTRICITY BILLS, MUNICIPAL TAX PAYMENTS ETC. WERE FILED BEFORE THE AO. FURTHER, AS WE HAVE NOTED ABO VE, THE BU PERMISSION FOR TOWER 2, 5 & 7 WAS APPLIED ON 23.03.2012 AND RE LEVANT EVIDENCES IN SUPPORT OF COMPLETION OF BUILDING ON 17.03.2012 WER E FILED IN THE FORM OF 1) COMPLETION CERTIFICATE OF GOVERNMENT APPROVED CH ARTERED ENGINEERS 2) STABILITY CERTIFICATE OF STRUCTURE ENGINEERS 3) LIC ENSE TO USE LIFT CERTIFICATE 4) POSSESSION LETTERS 5) CERTAIN ELECTRICITY CONSUM PTION STATEMENT REFLECTING THE ELECTRICITY CONNECTION 6) FIRE FIGHT ING CERTIFICATE 7) SMC MUNICIPAL TAX BILLS. THESE FACTS HAVE NOT BEEN CON TROVERTED BY THE AO AND BY THE LD. CIT-DR DURING ARGUMENTS BEFORE US. 20. SO FAR AS DEFICIENCIES POINTED OUT BY THE COMPE TENT AUTHORITY IN THE LETTER DATED 11.04.2012 ARE CONCERNED FIRST DEFICIE NCY WAS RELATED TO 18 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY UNAUTHORIZED/ADDITIONAL CONSTRUCTION AND WAS NOT RE GARDING NON- COMPLIANCE OF BUILDING AND THIS DEFICIENCY DOES NOT ESTABLISH IN ANY MANNER THAT THE BUILDING WAS NOT COMPLETED ON THE D ATE OF APPLICATION I.E., 23.03.2012 AND THUS, WE SAFELY PRESUME THAT SOME AD DITION CONSTRUCTION WAS MADE IN CONTRAVENTION OR BEYOND THE SCOPE OF CO NSTRUCTION PERMISSION, WHICH WAS REQUIRED TO BE REMOVED AND IT CANNOT BE INTERPRETATED AS AN ALLEGATION OF INCOMPLETE CONSTR UCTION. THE GUJARAT DEVELOPMENT AND CONSTRUCTION RULES (GDCR) PROVIDES CERTAIN OTHER REQUIREMENT TO BE FULFILLED BEFORE ISSUANCE OF BUIL DING COMPLETION CERTIFICATION SUCH AS CERTIFICATES OF COMPETENT TEC HNICAL EXPERT/AUTHORITY REGARDING THE STRUCTURAL STABILITY, COMPLETION OF B UILDING UNDER STIPULATED SUPERVISION, EXISTENCE OF CERTAIN FACILITIES SUCH A S LIFT, PROVISION OF PROPER MARKED PARKING, LIFT AND FIRE SAFETY, AND CERTAIN O THER PROVISIONS FOR ENVIRONMENTAL PROTECTION IN THE FORM OF TREE PLANAT ION AND RAIN WATER HARVESTING AND AS WE HAVE NOTED ABOVE, THE ASSESSEE ALONG WITH APPLICATION SEEKING BUILDING COMPLETION CERTIFICATE FILED CERTIFICATES/LETTERS SHOWING ABOVE MANDATORY COMPLIANCES. 21. DEFICIENCY NO.2 IS PERTAINING TO LACK OF MARKIN G OF ENTRANCE & EXIT WAY, VISITORS PARKING, CAR PARKING AND SCOOTER PARK ING ETC. WHICH ARE REQUIRED TO BE COMPLETED BY WAY OF PUTTING SOME MAR KING BOARDS AND THE SAME IS NOT SUBSTANTIALLY RELATED TO THE DEFICIENCY IN THE CONSTRUCTION OF BUILDING BUT THE SAME ARE RELATED WITH THE LACK OF INDICATION/MARKING 19 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY BOARDS/DISPLAYS. IT IS NOT A CASE OF THE AO THAT TH E ASSESSEE DID NOT PROVIDE ENTRANCE & EXIT WAY AND PARKING PLACES FOR RESIDENTS & VISITORS THEREFORE, IN ABSENCE OF CERTAIN INDICATION OR MARK ING BOARDS, IT CANNOT BE HOLD THAT THE BUILDING WAS NOT COMPLETED ON THE DAT E OF APPLICATION SEEKING CERTIFICATE OF CONSTRUCTION AS ON 23.03.201 2. 22. SO FAR AS THIRD OBJECTION REGARDING PROVISION F OR PERCOLATED BOREWELL IS CONCERNED, THIS IS ALSO RELATING TO RAIN WATER H ARVESTING SYSTEM AS THE SMC INSPECTOR REPORTED THAT THE WATER FLOW TO BOREW ELL WAS NOT OK, WHICH SHOWS THAT THE CONSTRUCTION WAS PERCOLATED BOREWELL , AS REQUIRED BY THE GDCR WAS MADE BUT THE FLOW OF WATER WAS NOT UP TO R EQUIRED MARK AND THIS DEFICIENCY DOES NOT ESTABLISH THAT THE BUILDIN G WAS NOT COMPLETED BUT ONLY SHOWS THAT THE WATER FLOW IN THE PERCOLATED BO REWELL WAS NOT PROPER FUNCTIONING AND THE SAME WAS NOT UP TO REQUIRED STA NDARD OR MARK. IN OUR CONSIDERED OPINION ON THE BASIS OF SAID DEFICIENCY ALSO IT CANNOT BE PRESUMED THAT THE BUILDING WAS NOT COMPLETED ON THE DATE OF APPLICATION AS ON 23.03.2012. 23. LAST AND FOURTH OBJECTION WAS REGARDING MISSING SIGNATURE OF SUPERVISION OF FORM NO.8 AND THE LD. CIT(A) NOTED T HAT THE COPY OF FORM- 8 DATED 17.03.2012 WAS SIGNED BY THE OWNER OF PROJE CT AND STRUCTURAL ENGINEER SHRI JALIL A SHEIKH, WHICH CERTIFIES THAT THE BUILDING HAS BEEN CONSTRUCTED ACCORDING TO SANCTIONED PLAN, AND STRUC TURAL DESIGN UNDER 20 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY SUPERVISION OF QUALIFIED ENGINEER. IN OUR CONSIDER ED OPINION, THIS DEFICIENCY IS NOT ATTRIBUTABLE TO THE ALLEGATION OF THE AO REGARDING INCOMPLETENESS IN THE BUILDING BUT THE SAME WAS MER ELY RELATED TO A DEFICIENCY IN THE PAPERS SUBMITTED ALONG WITH APPLI CATION SEEKING BUILDING COMPLETION CERTIFICATE AND THIS SHORTCOMING DOES NO T ESTABLISH THAT THE CONSTRUCTION OF TOWER NO.2, 5 & 7 WAS NOT COMPLETED AS ON 17.03.2012 AND ON 23.03.2012 I.E., THE DATE ON WHICH SAID APPL ICATION WAS SUBMITTED BEFORE THE COMPETENT AUTHORITY OF SMC. 24. IN VIEW OF ABOVE DISCUSSION, WE ARE INCLINED TO HOLD THAT THE LD. FIRST APPELLATE AUTHORITY WAS RIGHT IN CONCLUDING AND HOL DING THAT THE BUC HAS BEEN GRANTED BY THE COMPETENT AUTHORITY OF SMC ON T HE BASIS OF COMPLETION CERTIFICATES OF MARCH, 2012 ON THE BASIS OF SUPPORTING EVIDENCES FILED BY THE ASSESSEE ESTABLISHING AND SH OWING COMPLETION OF BUILDING VIZ. COMPLETION CERTIFICATE OF GOVT. APPRO VED CHARTED ENGINEER, STABILITY CERTIFICATION OF STRUCTURE ENGINEER, LICE NSE TO USE THE LIFT CERTIFICATE & EXISTENCE OF REQUIRED FIRE FIGHTING EQUIPMENTS AN D POSSESSION LETTER ISSUED TO THE ALLOTTEES AND THE CONSTRUCTION OF PRO JECT INCLUDING TOWER NO. 2, 5 & 7 WAS COMPLETED ON 17.03.2012 AND APPLICATIO N SEEKING BUILDING COMPLETION CERTIFICATE BEFORE THE COMPETENT AUTHORI TY IN THE PRESCRIBED FORM ALONG WITH SUPPORTING DOCUMENTS AND CERTIFICAT ES WAS FILED BEFORE THE COMPETENT AUTHORITY/ASST. ENGINEER OF SMC ON 23 .03.2012 I.E., BEFORE THE REQUIRED DATE I.E., 31.03.2012, WHICH SUPPORTS THE FACTUM THAT THE 21 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY PROJECT QUALIFIES THE CONDITIONS FOR ELIGIBILITY OF DEDUCTION U/S. 80-IB(10) OF THE ACT. 25. AT THIS JUNCTURE, WE FIND IT NECESSARY AND APPR OPRIATE TO CONSIDER THE RATIO OF THE DECISION OF HONBLE HIGH COURT OF GUJA RAT IN THE CASE OF TARENTAR CORPORATION (SUPRA), WHEREIN SPEAKING FOR HONBLE JURISDICTIONAL HIGH COURT THEIR LORDSHIP HELD THUS: 5 . WE HAVE PERUSED THE DETAILED DISCUSSION OF THE CIT (APPEALS) AS WELL AS THE TRIBUNAL ON THE ISSUE. IN PARTICULAR, T HE TRIBUNAL NOTED THAT THE CONSTRUCTION WAS-COMPLETED IN 2006. APPLICATION FOR BU PERMISSION TO THE MUNICIPAL AUTHORITIES WAS FILED O NM.5.2.2006 WHICH WAS REJECTED ON 1.7.06. SEVERAL RESIDENTIAL UNITS W ERE OCCUPIED SINCE THE 'SAME WAS DONE WITHOUT NECESSARY PERMISSION. TH E ASSESSEE HAD ALSO PAID PENALTY AND GOT SUCH OCCUPATION REGULARIZ ED. SEVERAL TENEMENTS WERE SOLD LONG BEFORE THE LAST DATE. 6. IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE ASSESSEE HAD COMPLETED THE CONSTRUCTION WELL BEFORE 31ST MARCH, 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRUE THAT FORMALLY BU PERM ISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION TO CLAUSE (A) TO SECTION 80-IB(L0) LINK S THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE' LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STAT UTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE THEREOF IS EST ABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIEW THAT M INOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHIC H DEDUCTION WAS BEING MADE AVAILABLE. 7. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE ASSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE TH E FINAL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSION W AS 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.' 26. WHEN WE RESPECTFULLY CONSIDER THE RATIO OF THE ABOVE OBSERVATIONS OF HONBLE JURISDICTIONAL HIGH COURT THEN, WE CLEAR LY FIND THAT IT HAS BEEN 22 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY CATEGORICALLY HELD THAT WHEN THE ASSESSEE HAD COMPL ETED THE CONSTRUCTION WELL BEFORE STIPULATED DATE, WHICH WAS 31.03.2012 I N THE PRESENT CASE, IS NOT IN DOUBT AND THE VIEW PERMISSION WAS NOT GRANTE D BY THE MUNICIPAL AUTHORITY BY SUCH DATE. THE EXPLANATION TO CLAUSE (A) TO S. 80-IB(10) LINKS THE COMPLETION OF CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY, HOWEVER, NOT EVERY CONDITION OF TH E STATUTE CAN BE SEEN AS MANDATORY. THEIR LORDSHIPS FURTHER HELD THAT IF SUB STANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIEW THE MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WAS BEING MADE AVAILABLE. 27. IN THE PRESENT CASE, THE FACTS ARE GLARING WHIC H CLEARLY SHOWS THAT THE ASSESSEE COMPLETED CONSTRUCTION OF PROJECT INCL UDING TOWERS NO.2, 5 & 7 ON 17.03.2012 AND APPLICATION SEEKING CONSTRUCTIO N CERTIFICATE WAS SUBMITTED TO THE COMPETENT AUTHORITY/ASST. ENGINEER , SMC ON 23.03.2012 I.E., BEFORE THE LAST DATE 31.03.2012 AS PER REQUIR EMENT OF S. 80-IB(10) OF THE ACT AND THUS, WE SAFELY PRESUME THAT THE ASSESS EE HAD NOT ONLY COMPLETED THE CONSTRUCTION WITHIN PRESCRIBED TIME L IMIT BUT HAD ALSO APPLIED FOR BU PERMISSION BEFORE THE STIPULATED LAS T DATE FOR COMPLETION OF PROJECT I.E., 31.03.2012. MERELY BECAUSE, THE COMP ETENT AUTHORITY POINTED OUT SOME DEFICIENCIES IN THE PROJECT, WHICH WERE CU RABLE AND LINKED WITH THE GDCR COMPLIANCE, AND NOT SHOWING ANY DEFICIENCY OR INCOMPLETENESS IN THE PROJECT, IT WOULD BE UNJUSTIF IED TO HOLD THAT THE 23 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY PROJECT WAS NOT COMPLETED ON THE DATE OF SUBMITTING APPLICATION SEEKING BUILDING CONSTRUCTION CERTIFICATE BEFORE THE COMPET ENT AUTHORITY. 28. THE HONBLE JURISDICTIONAL HIGH COURT OF GUJARA T IN THE CASE OF ITO VS. SAKET CORPORATION (SUPRA), HELD THAT WHERE THE ASSESSEE HAD COMPLETED CONSTRUCTION OF ITS ENTIRE HOUSING PROJEC T AND APPLIED FOR BUILDING USE PERMISSION/COMPLETION CERTIFICATE WITH IN PRESCRIBED TIME-LIMIT, IT WOULD BE ENTITLED TO DEDUCTION U/S. 80-IB(10) OF THE ACT NOTWITHSTANDING FACT THAT IT COULD NOT RECEIVE PERMISSION FOR ITS E NTIRE PROJECT. IN THE PRESENT CASE ALSO THE ASSESSEE COMPLETED THE CONSTRUCTION O F PROJECT INCLUDING TOWER 2, 5 & 7 ON 17.03.2012 AND ALSO APPLIED FOR L IVING PERMISSION AND COMPLETION CERTIFICATE WITHIN PRESCRIBED TIME LIMIT ON 23.03.2012 THEN, IT HAS TO BE HELD THAT THE ASSESSEE IS ENTITLED FOR DE DUCTION U/S. 80-IB(10) OF THE ACT DESPITE THE FACT THAT THE ASSESSEE COULD NO T RECEIVE BUILDING COMPLETION CERTIFICATE FOR THE PROJECT ON OR BEFORE LAST DATE OF 31.03.2012 FROM THE COMPETENT AUTHORITY. IN OUR HUMBLE UNDERS TANDING THE PURPOSE OF ABOVE DECISION OF HONBLE JURISDICTIONAL HIGH CO URT OF GUJARAT IS THAT THE DELAY ON THE PART OF COMPETENT AUTHORITY IN ISS UING BUILDING COMPLETION CERTIFICATE CANNOT BE ATTRIBUTED TO THE ASSESSEE FO R DENYING DEDUCTION U/S. 80-IB(10) OF THE ACT AND IF SUCH DELAY IS ATTRIBUTE D TO THE ASSESSEE THEN, IT WOULD DEFEAT THE PURPOSE OF LEGISLATURE IN PROVIDIN G DEDUCTION U/S. 80- IB(10) OF THE ACT TO THE DEVELOPER OF A HOUSING PRO JECT. 24 ITA NO.3659/AHD/2015/SRT (A.Y: 2012-13) M/S. REKHA CONSTRUCTION COMPANY 29. ON THE BASIS OF FOREGOING DISCUSSION, WE REACH TO A LOGICAL CONCLUSION THAT THE LD. CIT(A) WAS RIGHT IN ALLOWIN G CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 80IB(10) OF THE ACT AND WE ARE U NABLE TO SEE ANY AMBIGUITY, PERVERSITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE SAME AND THUS, WE UPHOLD THE SAME. ACCORDINGLY, GROUNDS OF REVENUE BEING DEVOID OF MERITS ARE DISMISSED. 30. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 6 TH OCTOBER, 2018. / SURAT ; DATED : 26 TH OCTOBER, 2018 EDN # & / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. $ ( ) / THE CIT(A)-4, SURAT; 4. PRL. CIT(CENTRAL), SURAT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // * / ASSISTANT REGISTRAR , / ITAT, SURAT SD/- SD/- ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) /JUDICIAL MEMBER