Income-tax Officer, V. M/s. Pentagon Developers, Pune

ITA 393/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5306 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-04-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 10-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Assessee Lawyers: V L JAIN
• Keywords: Competent authority

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 393 /P U N/201 6 / ASSESSMENT YEAR : 20 10 - 11 INCOME TAX OFFICER, WARD 3(1), PUNE ....... / APPELLANT / V/S. M/S. PENTAGON DEVELOPERS, OFF NO. 504, ASHOK SANKUL II, ASHOK NAGAR, RANGE HILL ROAD, PUNE 411007 PAN : AAHFP8013B / RESPONDENT ASSESSEE BY : S HRI V.L. JAIN REVENUE BY : SHRI MUKESH JHA / DATE OF HEARING : 2 6 - 06 - 201 8 / DATE OF PRONOUNCEMENT : 20 - 0 7 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 10, PUNE DATED 08 - 01 - 2016 FOR THE ASSESSMENT YEAR 2010 - 11. THE REVENUE IN APPEAL HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) . 2 ITA NO . 393/PUN/2016, A.Y. 2010 - 11 2. THE BRIEF FACTS OF THE CASE AS EMANATING F ROM RECORD S ARE : THE ASSESSEE IS A BUILDER AND DEVELOPER. THE ASSESSEE DEVELOPED A HOUSING PROJECT FORTUNE EAST AT 12/1, MUNDHAWA BYPASS ROAD, KHARADI, PUNE. THE ASSESSEE HAD OBTAINED FIRST APPROVAL OF THE BUILDING PLAN IN RESPECT OF ABOVE PROJECT ON 17 - 05 - 2005. THE ASSESSEE IN I TS RETURN OF INCOME FOR ASSESSMENT YEAR 2010 - 11 HAD CLAIMED DEDUCTION U/S. 80IB(10) TO THE TUNE OF RS. 4,85,22,353/ - . THE ASSESSING OFFICER DENIED ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) ON THE GROUND THAT THE ASSESSEE SHOULD HAVE COMPLETED THE PROJECT BEFORE 31 - 03 - 2011. HOWEVER, THE ASSESSEE HAS FAILED TO FURNISH COMPLETION CERTIFICATE IN RESPECT OF ANY BUILDING OR FLAT OF THE HOUSING PROJECT FORTUNE EAST . AGGRIEVED BY THE ASSESSMENT ORDER DATED 28 - 03 - 2013, THE ASSESSEE FILED APPEAL BEFORE THE COMM ISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER ALLOWED ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. NOW, THE REVENUE IS IN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). 3. S HRI MUKESH JHA REPRESENTING THE DEPARTMENT SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED COMPLETION CERTIFICATE TILL DATE , IN RESPECT OF HOUSING PROJECT FORTUNE EAST. THERE IS NO DOCUMENT FROM THE COMPETENT AUTHORITY ON RECORD WHICH WOULD INDICATE THAT TH E HOUSING PROJECT IN RESPECT OF WHICH DEDUCTION HAS BEEN CLAIMED IS COMPLETE AND IS HABITABLE. THE LD. DR PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER AND RESTORING THE FINDINGS OF ASSESSING OFFICER. 4. ON THE OTHER HAND SHRI V.L. JAIN APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). THE LD. AR SUBMITTED THAT AS PER DEVELOPMENT CONTROL RULES, 3 ITA NO . 393/PUN/2016, A.Y. 2010 - 11 PUNE MUNICIPAL CORPORATION DOES NOT ISSUE COMPLETION CERTIFICATE. AS PER RULE 7.6 THE COMPLETION CERTIFICATE IS ISSUED BY THE ARCHITECT . RULE 7.7 CONTEMPLATES THAT ON RECEIPTS OF COMPLETION CERTIFICATE, THE PUNE MUNICIPAL CORPORATION (PMC) SHALL ISSUE OCCUPANCY CERTIFICATE AFTER INSPECTION OF SITE. THE LD. AR SUBMITTED THAT THE ARCHITECT ISSUED COMP LETION CERTIFICATE ON 16 - 02 - 2011. THE LD. AR POINTED THAT THE ARCHITECT VIDE LETTER DATED 26 - 02 - 2011 CONFIRMS THE FACT THAT LOCAL AUTHORITY I.E. PMC APPROVED ISSUANCE OF COMPLETION CERTIFICATE BUT DEFERRED THE ISSUANCE OF FORMAL COMPLETION CERTIFICATE UNT IL THE AMENITY SPACE IS TAKEN OVER BY PMC. THE LD. AR FURTHER CONTENDED THAT THE FACT OF COMPLETION OF PROJECT HAS NOT BEEN DOUBTED OR CHALLENGED BY THE DEPARTMENT. THE ONLY OBJECTION IS OF NON - AVAILABILITY OF COMPLETION CERTIFICATE FROM PMC. NON - AVAILA BILITY OF COMPLETION CERTIFICATE FROM LOCAL AUTHORITY SHOULD NOT PREJUDICE ASSESSEES CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT. THE LD. AR IN SUPPORT OF HIS CONTENTIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS : I . COMMISSIONER OF INCOME TAX VS. CHD DEV ELOPERS LTD., 362 ITR 177 (DELHI); II . COMMISSIONER OF INCOME TAX VS. HINDUSTAN SAMUH AWAS LTD., 377 ITR 150 (BOM); III . COMMISSIONER OF INCOME TAX VS. TARNETAR CORPORATION, 362 ITR 174 (GUJ). 5. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE DEDUCTION U/S. 80IB(10) OF THE ACT HAS BEEN DISALLOWED TO THE ASSESSEE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAS FAILED TO FURNISH COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY I. E. PMC. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE RECEIVED FIRST APPROVAL OF THE BUILDING 4 ITA NO . 393/PUN/2016, A.Y. 2010 - 11 PLAN ON 17 - 05 - 2005. AS PER THE PROVISIONS OF THE ACT THE ASSESSEE SHOULD HAVE COMPLETED HOUSING PROJECT ON OR BEFORE 31 - 03 - 2011. THE ASSESSING OFFICER MADE INDEPENDENT ENQUIRIES FROM THE OFFICE OF PMC AND IT TRANSPIRED THAT THE ASSESSEE HAS NOT MADE ANY APPLICATION TILL 28 - 02 - 2013 FOR OBTAINING COMPLETION/OCCUPANCY CERTIFICATE. 6. ON THE CONTRARY, THE ASSESSEE HAS POINTED THAT THE APPLICATION WAS MADE TO TH E LOCAL AUTHORITY AND THE ARCHITECT OF THE ASSESSEE VIDE LETTER DATED 26 - 02 - 2011 CONFIRMS THAT THE PMC HAS APPROVED THE COMPLETION CERTIFICATE IN PRINCIPLE BUT HAS DEFERRED THE ISSUANCE OF SAME UNTIL THE AMENITY SPACE IS TAKEN OVER BY THE PMC. THE LD. AR HAS FURTHER ASSERTED THAT IT IS THE LOCAL AUTHORITY I.E. THE PMC WHICH HAS TO COMPLETE THE PROCEEDINGS FOR TAK ING OVER OF AMENITY SPACE. 7. IN ALL THE THREE DECISIONS O N WHICH RELIANCE HAS BEEN PLACED BY THE LD. AR I.E. COMMISSIONER OF INCOME TAX VS. CHD DEVELOPERS LTD. (SUPRA), COMMISSIONER OF INCOME TAX VS. HINDUSTAN SAMUH AWAS LTD. (SUPRA) AND COMMISSIONER OF INCOME TAX VS. TARNETAR CORPORATION (SUPRA) THE COMMON FACTOR IS, THE ASSESSEE IN THE RESPECTIVE CASES AFTER CO MPLETION OF HOUSING PROJECT HAD APPLIED TO THE LOCAL AUTHORITY FOR ISSUANCE OF COMPLETION/OCCUPATION CERTIFICATE WELL IN TIME. THE HONBLE HIGH COURTS IN THE BACKDROP OF THIS FACT HELD THAT MERELY FOR THE REASON , THE LOCAL AUTHORITIES HAVE FAILED TO ISSUE COMPLETION/OCCUPATION CERTIFICATE WITHIN THE REASONABLE TIME, THE BENEFIT OF DEDUCTION U/S. 80IB(10) CANNOT BE DENIED TO THE ASSESSEE, WHO OTHERWISE HAVE COMPLETED THE HOUSING PROJECT AND HAVE APPLIED FOR APPROVAL WELL BEFORE THE DUE DATE. 5 ITA NO . 393/PUN/2016, A.Y. 2010 - 11 8. IN THE IN STANT CASE WE FIND THAT THE ARCHITECT ISSUED COMPLETION CERTIFICATE CONFIRMING COMPLETION OF PROJECT AS PER SANCTIONED PLAN ON 16 - 02 - 2011. HOWEVER, IT IS NOT EMANATING FROM RECORDS AS TO WHEN THE ASSESSEE APPLIED TO THE LOCAL AUTHORITY I.E. PMC FOR ISSUAN CE OF OCCUPANCY CERTIFICATE. THE LD. AR FOR ASSESSEE HAS POINTED THAT THE PMC HAS APPROVED THE ISSUANCE OF COMPLETION CERTIFICATE BUT HAS WITHHELD THE FORMAL ISSUANCE OF CERTIFICATE FOR SOME COMPLIANCE. THIS FACT REQUIRES VERIFICATION. WE ARE OF CONSIDE RED VIEW THAT THE BENEFIT OF DEDUCTION U/S. 80IB(10) SHOULD NOT BE DENIED TO THE ASSESSEE , IF THE ASSESSEE HAS APPLIED TO THE PMC FOR ISSUANCE OF COMPLETION/OCCUPANCY CERTIFICATE BEFORE THE DUE DATE I.E. 31 - 03 - 2011. THE ISSUE IS RESTORED TO THE ASSESSING OFFICER FOR THE LIMITED PURPOSE TO VERIFY THE DATE ON WHICH THE ASSESSEE APPROACHED PMC FOR ISSUANCE OF COMPLETION/OCCUPANCY CERTIFICATE. THE ASSESSEE IS DIRECTED TO FURNISH NECESSARY RELEVANT DOCUMENTS TO THE ASSESSING OFFICER INDICATING THE DATE ON WHIC H THE ASSESSEE APPLIED TO PMC FOR ISSUANCE OF COMPLETION / OCCUPANCY CERTIFICATE. THE ASSESSING OFFICER AFTER EXAMINING THE DOCUMENTS AND IN THE LIGHT OF OUR ABOVE OBSERVATIONS SHALL ALLOW/REJECT DEDUCTION U/S. 80IB(10) , AS THE CASE MAY BE. 9 . IN THE RE SULT, THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 20 TH DAY OF JU LY , 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 20 TH JU LY , 2018 RK 6 ITA NO . 393/PUN/2016, A.Y. 2010 - 11 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 10, PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 2, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE