Appeal Details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 5649 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 8 month(s) 25 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-01-2017
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
A
Assessment Year
2009-2010
Appeal Filed On
29-04-2015
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 417/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 D.C.I.T, CIRCLE-2, JAIPUR. CUKE VS. M/S GURU PRAGYA INFRA (P) LTD., B-37, NIRMAN NAGAR, AJMER ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCG 8882 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RES PONDENT IZR;K{KSI.K @ C.O. NO. 39/JP/2015 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 417/JP/2015) D.C.I.T, CIRCLE-2, JAIPUR. CUKE VS. M/S GURU PRAGYA INFRA (P) LTD., B-37, NIRMAN NAGAR, AJMER ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA- @ PAN/GIR NO.: AACCG 8882 H IZR;K{KSID@ OBJECTOR IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 418/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 D.C.I.T, CIRCLE-2, JAIPUR. CUKE VS. M/S GURU PRAGYA INFRA (P) LTD., B-37, NIRMAN NAGAR, AJMER ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCG 8882 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SMT. ROSHANTA MEENA (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA) ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 2 LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 27/10/2016 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 24/01/2017 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE LD.CIT(A)-I, JAIPUR FOR THE A.Y. 2009 -10 & 2010-11 DATED 27/02/2015 AND 24/02/2015 RESPECTIVELY WHEREIN THE SIMILAR GROUNDS OF APPEAL HAVE BEEN TAKEN BY THE REVENUE IN RESPECT OF CLAIM OF DEDUCTION UNDER SECTION U/S 80IB(10) OF THE ACT. FURTHER, THE ASSESSEE HAS FILED CROSS-OBJECTION IN AY 2009-10 AGAINST THE ORDER OF LD CIT(A) UPHOLDING THE VALIDITY OF ASSESSMENT FRAMED U/S 147. THE RESP ECTIVE GROUNDS OF APPEAL ARE AS UNDER:- GROUND OF REVENUES APPEAL IN ITA NO. 417/JP/2015. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS.1,16,92,294/- U/S 80IB(10) OF THE ACT. GROUND OF ASSESSEES C.O. NO. 39/JP/2015. (1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF ASSES SMENT FRAMED U/S 147. GROUNDS OF REVENUES APPEAL IN ITA NO. 418/JP/2015. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.91,68,150/- MADE ON A/C OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 80I B(10) OF THE ACT. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 3 2. THE FACTS RELEVANT FOR ISSUE UNDER CONSIDERATI ON ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE CONSTRUCTION AND DEVELOPMENT OF HOUSING PROJECT. IT HAD UNDERTAKEN CONSTRUCTION AND DEVELOPMENT OF A HOUSING PROJECT GURU SHIKHAR AT VILLAGE- NANAKPUR A ALIS HEMA KI NAGAL AND AJAYRAJPURA, TEHSIL SANGANER, TONK ROAD, JAIPUR . THE HOUSING PROJECT COMPRISES OF DIFFERENT BLOCKS. IN KHASARA N O. 1 TO 8 AND 11 TO 17, BLOCK A TO G IS CONSTRUCTED AND AT KHASARA NO. 9, 1 0 & 18, BLOCK H & I IS CONSTRUCTED. THE ASSESSEE SUBMITTED THE APPLICATION FOR APPROVAL OF MAPS OF THE TWO KHASARA NO. COMPRISING OF DIFFEREN T BLOCKS AS STATED ABOVE ON 25-03-2007 TO GRAM PANCHAYAT AND ON 26-03- 2014 TO JAIPUR DEVELOPMENT AUTHORITY. THE VARIOUS DATES RELATING T O THE FILING OF THE APPLICATION, APPROVAL OF MAP AND THE DATES RELATING TO THE COMPLETION OF THE DIFFERENT BLOCKS OF THE HOUSING PROJECT AND THE ISSUE OF COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY IS AS UNDER:- S.NO. PARTICULARS PARTICULARS OF PROJECT KHASRA NO. 1 TO 8 & 11 TO 17 (BLOCK A TO G) KHASRA NO.9, 10 & 18 (BLOCK H & I) DATES RELATING TO THE APPROVAL OF HOUSING PROJECTS 1 DATE OF APPLICATION FOR APPROVAL OF MAP OF THE PROPOSED RESIDENTIAL 25-03-2007 25-03-2007 ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 4 PROJECT TO GRAM PANCHAYAT 2 DATE OF APPROVAL OF MAP BY SARPANCH, GRAM PANCHAYAT AND COMMUNICATION THEREOF 10-04-2007 10-04-2007 3 DATE OF APPLICATION FOR APPROVAL OF MAP OF THE PROPOSED RESIDENTIAL PROJECT TO JDA 26-03-2007 26-03-2007 4 DATE OF APPROVAL OF MAP BY JDA 29-03-2007 29-03-2007 5 DATE OF COMMUNICATION OF THE APPROVED BUILDING MAP BY JDA TO THE ASSESSEE 26-08-2008 01-10-2008 DATES RELATING TO COMPLETION OF THE HOUSING PROJECT 1 DATE OF APPLICATION TO GRAM PANCHAYAT FOR ISSUE OF THE COMPLETION CERTIFICATE 01-03-2012 01-03-2012 2 DATE OF ISSUE OF THE COMPLETION CERTIFICATE BY GRAM PANCHAYAT 27-03-2012 27-03-2012 3 DATE OF ISSUE OF COMPLETION CERTIFICATE BY ARCHITECTS MISHRA GARG & ASSOCIATES 21-03-2012 05-03-2012 4 DATE OF SUBMISSION OF APPLICATION TO JDA FOR 23-03-2012 23-03-2012 ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 5 ISSUE OF THE COMPLETION CERTIFICATE 5 ISSUE OF NO OBJECTION BY CHIEF FIRE BRIGADE OFFICER, NAGAR NIGAM, JAIPUR 23-05-2012 30-03-2012 6 DATE OF ISSUE OF THE COMPLETION CERTIFICATE BY JDA WITH REFERENCE TO APPLICATION DATED 23-03- 2012 PLACED IN 121 ST MEETING DATED 11-07- 2012 01-08-2012 7 LETTER OF JDA NOTING THAT CONSTRUCTION OF BLOCK A TO D IS COMPLETE AND OF BLOCK E TO G IS UNDER PROGRESS. 8-05-2012 8 LETTER OF JDA STATING THAT IN 122 ND MEETING DATED 28-08-2012 APPROVING THE PROJECT AND REQUIRING ASSESSEE TO COMPLY CERTAIN FORMALITIES. 5-10-2012 9 LETTER OF JDA FOR PRODUCING ENVIRONMENT CLEARANCE CERTIFICATE 7-01-2013 10 APPLICATION DATED 15-1- 2013 TO JDA SUBMITTING REVISED MAPS FOR ISSUE OF PARTIAL COMPLETION CERTIFICATE 15-1-2013 ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 6 11 DATE OF ISSUE OF THE COMPLETION CERTIFICATE BY JDA WITH REFERENCE TO APPLICATION DATED 23-03- 2012 PLACED IN 122 ND MEETING DATED 28-08- 2012 IN RESPECT OF BLOCK NO. A TO E 21-03-2013 3. DURING AY 2010-11, THE ASSESSEE COMPANY FILED IT S RETURN OF INCOME DECLARING AN INCOME OF RS.16,43,530/- AFTER CLAIMING DEDUCTION U/S 80-IB AT RS.91,68,155/-. THIS DEDUCTION WAS REV ISED IN ASSESSMENT PROCEEDING TO RS.1,41,53,488/- BUT RESTRICTED TO RS .1,08,11,680/- I.E. TO THE EXTENT OF AVAILABLE PROFIT. 4. THE AO DISALLOWED THE CLAIM OF DEDUCTION FOR THE REASON THAT ASSESSEE HAS NOT FULFILLED THE FOLLOWING CONDITIONS PRESCRIBED U/S 80- IB(10):- (I) AS PER SECTION 80-IB(10)(A), THE PROJECT MUST BE CO MPLETED WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEA R IN WHICH IT IS APPROVED BY THE LOCAL AUTHORITY. THE PERIOD OF F IVE YEARS EXPIRED ON 31-03-2012. AS PER EXPLANATION (II) TO T HIS SECTION, DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING P ROJECT IS TO ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 7 BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CER TIFICATE IS ISSUED BY THE LOCAL AUTHORITY. SUCH CERTIFICATE IS ISSUED BY JDA AFTER 31-03-2012 AND THEREFORE THIS CONDITION IS VI OLATED. FOR DRAWING THIS INFERENCE, AO MADE FOLLOWING OBSERVATI ONS:- (A) THE ASSESSEE FILED THE COPY OF THE COMPLETION CERTIFICATE DATED 01-08-2012 ISSUED BY THE JDA IN R ESPECT OF KHASARA NO. 9, 10 & 18. NO COMPLETION CERTIFICAT E WAS FILED IN RESPECT OF KHASARA NO. 1TO 8 & 11 TO 17. H ENCE, DATE OF COMPLETION OF THE PORTION OF THE PROJECT WA S 01- 08-2012. IN ANY CASE, THE PROJECT WAS NOT COMPLETED BY 31-03-2012. (B) THE ASSESSEE WAS WELL AWARE OF THE FACT THAT ISSU E OF COMPLETION CERTIFICATE REQUIRES FORMALITIES LIKE FI LING OF THE APPLICATION, PROCESSING AND INSPECTION BY JDA AUTHO RITIES. THEREFORE, ASSESSEE SHOULD HAVE STARTED THIS PROCES S IN TIME TO GET THE COMPLETION CERTIFICATE BY 31-03-201 2. THE ASSESSEE COMPANY IS SHIFTING THE RESPONSIBILITY ON JDA BY SIMPLY PUTTING AN APPLICATION ON 23-03-2012. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 8 (C) THE AO INSPECTED THE FILE OF ASSESSEE COMPANY IN JDA ON 15-03-2013 AND FOUND THAT ON 8-05-2012, JDA WROT E A LETTER TO THE ASSESSEE COMPANY WITH REFERENCE TO APPLICATION OF ASSESSEE COMPANY DATED 23-03-2012 APPLYING FOR ISSUE OF COMPLETION CERTIFICATE. IN TH E LETTER IT IS MENTIONED THAT OUT OF TOTAL SEVEN BLOCKS, THE WO RK OF BLOCK A TO D IS ALMOST COMPLETE AND THE CIVIL WORK OF BLOCK E, F & G IS IN PROGRESS. AFTER COMPLETION OF THIS WORK AND SITE INSPECTION IT WOULD BE POSSIBLE TO TA KE ACTION FOR ISSUE OF COMPLETION CERTIFICATE. THIS SH OWS THAT THE PROJECT ON KHASARA NO. 1 TO 8 & 11 TO 17 WAS NO T COMPLETE AS ON 31-03-2012. (D) THE ASSESSEE HAS PRODUCED THE COMPLETION CERTIFIC ATE ISSUED BY GRAM PANCHAYAT. IT IS INTERESTING TO NOTE THAT AS PER ASSESSEE INITIALLY THE LOCAL AUTHORITY WAS JDA JAIPUR BUT WHEN COMPLETION CERTIFICATE WAS NOT ISSUED BY J DA, IT CHANGED THE LOCAL AUTHORITY FROM JDA TO GRAM PANCHA YAT. THEREFORE, THE CHANGED STAND HAS NO SUBSTANCE. FURT HER THE SARPANCH IN HER STATEMENT RECORDED ON 21-03-201 3 SATED THAT THE CERTIFICATE HAS BEEN ISSUED WITHOUT SITE ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 9 VERIFICATION AND THEREFORE THE CERTIFICATE FROM SAR PANCH WAS OBTAINED TO DECEIVE THE DEPARTMENT. (E) THE NEWSPAPER CUTTINGS SHOWING OCCUPATION BY FEW RESIDENTS DO NOT PROVE THAT THE WHOLE PROJECT WAS COMPLETE ON THAT DATE. (II) AS PER SECTION 80-IB(10)(E)/(F), NOT MORE THAN ONE RESIDENTIAL UNIT SHOULD BE ALLOTTED TO ANY PERSON OTHER THAN IN DIVIDUAL AND IN CASE OF INDIVIDUAL NO OTHER RESIDENTIAL UNIT IN THE PROJECT IS ALLOTTED TO HIS SPOUSE OR MINOR CHILD OR HUF. THIS CONDITION IS EFFECTIVE FROM 01-04-2010. IN FIVE CASES, ASSESSEE HAS VIOLATED THIS CONDITION WHERE MORE THAN ONE RESIDENTIAL UNIT IS ALLOTTED TO INDIVIDUAL AND IN ONE CASE THIS CONDITION IS VIO LATED WHERE IT IS ALLOTTED TO PERSON OTHER THAN INDIVIDUAL. 5. BASED ON THE FINDINGS GIVEN IN AY 2010-11, THE A O ISSUED NOTICE U/S 148 FOR AY 2009-10 ON 07.08.2013 AND DISALLOWED CLAIM OF DEDUCTION U/S 80-IB OF RS.1,16,92,294/-. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 10 6. THE LD. CIT(A) ALLOWED THE CLAIM OF DEDUCTION U/ S 80-IB TO THE ASSESSEE IN AY 2010-11 AND FOLLOWING THE SAME, IT W AS ALLOWED FOR AY 2009-10 ALSO WHICH HAS NOW BEING CONTESTED BEFORE U S. 7. THE RELEVANT PROVISIONS OF SECTION 80-IB(10) WHI CH ARE UNDER CONSIDERATION ARE AS UNDER: THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTA KING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31 ST DAY OF MARCH 2008 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO AN Y 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 1 ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, - (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1 ST DAY OF APRIL, 2004, ON OR BEFORE THE 31 ST DAY OF MARCH, 2008; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1 ST DAY OF APRIL, 2004 [BUT NOT LATER THAN THE 31 ST DAY OF MARCH, 2005], WITHIN FOUR YEARS FROM THE END OF THE ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 11 FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPR OVED BY THE LOCAL AUTHORITY; (III) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1 ST DAY OF APRIL, 2005, WITHIN FIVE YEARS FROM THE END OF THE FINANCI AL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY TH E LOCAL AUTHORITY. EXPLANATION.- FOR THE PURPOSE OF THIS CLAUSE,- (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSI NG PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA ONE ACRE: ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 12 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 GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DECLAR ED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORC E 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 RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWEN TY-FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIE S AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; (D) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED THREE PER CENT OF THE AGGREGATE BUILT-UP ARE A OF THE HOUSING PROJECT OR FIVE THOUSAND SQUARE FEET, WHICH EVER IS HIGHER; (E) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSING P ROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND (F) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSING P ROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 13 UNIT IN SUCH HOUSING PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS, NAMELY:- (I) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDREN 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 HIN DU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KA RTA.] 8. THERE IS NO DISPUTE AS TO THE FACT THAT ASSESSEE HAS COMPLIED WITH THE CONDITIONS STATED IN SUB CLAUSE (B), (C) & (D). THE DISPUTE REMAINS ONLY WITH REFERENCE TO THE CONDITIONS STATED IS SUB CLAUSE (A), (E) & (F). IN PRESENT CASE, TO DECIDE THE FULFILLMENT OF CONDI TION REFERRED IN CLAUSE (A), (E) & (F), FOLLOWING ISSUES NEEDS TO BE CONSID ERED:- (I) WHO IS THE LOCAL AUTHORITY TO APPROVE THE HOUSING P ROJECT AND TO ISSUE THE COMPLETION CERTIFICATE OF THE HOUSING PROJECT? (II) WHEN THE APPLICATION FOR ISSUE OF THE COMPLETION CE RTIFICATE IS MADE WITHIN THE PRESCRIBED TIME, ANY DELAY IN ISSUE OF THE COMPLETION CERTIFICATE WOULD RELATE BACK TO THE DAT E OF MAKING OF APPLICATION OR NOT? ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 14 (III) WHETHER EACH BLOCK OF HOUSING COMPLEX IN THE PROJEC T IS TO BE CONSIDERED SEPARATELY OR ALL BLOCK OF THE HOUSING C OMPLEX IN THE PROJECT IS TO BE CONSIDERED TOGETHER FOR ASCERT AINING THE DATE OF COMPLETION OF THE CONSTRUCTION OF THE HOUSI NG PROJECT? (IV) WHETHER WHERE SOME OF THE FLATS IN A BLOCK ARE NOT FULFILLING THE CONDITION OF ALLOTMENT OF THE FLAT, ENTIRE DEDU CTION IS TO BE DISALLOWED OR THE CLAIM IS TO BE RESTRICTED PROPORT IONATELY? 9. EACH OF THE ISSUES STATED ABOVE ALONG WITH OBSER VATIONS OF THE AO AND THE CONTENTIONS OF THE ASSESSEE IN RELATION TO THE SAME IS DEALT WITH AS UNDER:- 9.1 WHO IS THE LOCAL AUTHORITY TO ISSUE THE COMPLET ION CERTIFICATE OF THE HOUSING PROJECT?. 9.2 IN THIS REGARD, THE LD AR HAS SUBMITTED AS UNDE R: (A) THE TERM LOCAL AUTHORITY IS NOT DEFINED IN SECTIO N 80-IB(10). HOWEVER, SECTION 10(20) OF THE ACT DEFINES THE EXPR ESSION LOCAL AUTHORITY TO MEAN PANCHAYAT AS REFERRED TO IN CLAU SE (D) OF ARTICLE 243 OF THE CONSTITUTION. AS PER ARTICLE 243(D) OF T HE CONSTITUTION, PANCHAYAT MEANS AN INSTITUTION (BY WHATEVER NAME CALLED) OF SELF GOVERNMENT CONSTITUTED UNDER ARTICLE 243B FOR RURAL AREAS. THEREFORE, THE GRAM PANCHAYAT WHERE THE PROJECT OF THE ASSESSEE COMPANY IS LOCATED IS THE LOCAL AUTHORITY FOR GRANT ING THE APPROVAL OF THE PROJECT AND FOR ISSUE OF THE COMPLETION CERTIFI CATE. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 15 (B) THE JAIPUR DEVELOPMENT AUTHORITY ACT, 1982 (JDA) WAS ENACTED BY THE RAJASTHAN STATE LEGISLATURE WITH THE MAIN OBJEC T TO SECURE THE INTEGRATED DEVELOPMENT OF JAIPUR REGION. ONE OF THE OBJECT OF JDA AS SPECIFIED IN SECTION 16 OF THIS ACT IS TO FORMUL ATE AND SANCTION THE SCHEME FOR THE DEVELOPMENT OF JAIPUR REGION OR ANY PART THEREOF. SECTION 3(3) OF THIS ACT FURTHER PROVIDES THAT THE AUTHORITY SHALL BE DEEMED TO BE A LOCAL AUTHORITY WITHIN THE MEANING O F THE TERM LOCAL AUTHORITY AS DEFINED IN RAJASTHAN GENERAL C LAUSES ACT, 1955. THUS, JDA IS A DEEMED LOCAL AUTHORITY UNDER THE JDA ACT, 1982. (C) IN CASE OF SREEVATSA REAL ESTATE P. LIMITED 41 DT R 497 (CHENNAI)(TRIB.) IT WAS HELD THAT THE VILLAGE ADMIN ISTRATIVE OFFICER OR DY. DIRECTOR OF TOWN PLANNING ARE THE LOCAL AUTHORI TY FOR THE PURPOSE OF APPROVAL OF THE HOUSING PROJECT/ISSUE OF COMPLET ION CERTIFICATE FOR THE HOUSING PROJECT. (D) IN CASE OF DCIT VS. ARIHANT FOUNDATIONS & HOUSING LTD. 18 ITR(TRIB.) 588 (CHENNAI) IT IS HELD THAT LOCAL AUTH ORITY HAS NOT BEEN DEFINED IN SEC. 80-IB(10). HOWEVER, SEC. 10(20) EXP LANATION PROVIDES THAT LOCAL AUTHORITY WILL DEFINITELY INCLUDE A MUNI CIPAL COMMITTEE, PANCHAYAT AND CANTONMENT BOARD. THUS LOCAL AUTHORIT Y WILL INCLUDE CORPORATION OF CHENNAI. CHENNAI CORPORATION WAS ISS UING BUILDING PERMITS TO ALL THE BUILDINGS INCLUDING CMDA'S SPECI AL BUILDINGS, AFTER ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 16 THE PLANNING PERMITS WERE ISSUED BY CMDA. HENCE, DE DUCTION U/S 80-IB(10) IS ALLOWED TO THE ASSESSEE AS CORPORATION OF CHENNAI HAS GIVEN COMPLETION CERTIFICATE. (E) FROM THE ABOVE IT CAN BE NOTED THAT THE GRAM PANC HAYAT IS THE COMPETENT AUTHORITY FOR APPROVAL OF THE HOUSING PRO JECT AND FOR ISSUE OF THE COMPLETION CERTIFICATE IN RESPECT OF T HE HOUSING PROJECT. (F) IN THE PRESENT CASE, APPROVAL OF THE HOUSING PROJ ECT FROM GRAM PANCHAYAT WAS OBTAINED ON 10-04-2007. THUS, THE PER IOD OF FIVE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE PRO JECT IS APPROVED ENDS ON 31-03-2013. THE HOUSING PROJECT WAS COMPLET ED IN FEB. 2012. THEREFORE, ASSESSEE MOVED AN APPLICATION FOR ISSUE OF THE COMPLETION CERTIFICATE TO GRAM PANCHAYAT ON 01-03-2 012. THE SARPANCH OF THE GRAM PANCHAYAT HAS ISSUED THE COMPL ETION CERTIFICATE ON 27-03-2012. THE AO HAS RECORDED THE STATEMENT OF THE SARPANCH ON 21-03-2013 WHERE SHE STATED THAT THE CE RTIFICATE WAS ISSUED IN GOOD FAITH WITHOUT SITE VERIFICATION. HOW EVER, THE STATEMENT OF THE SARPANCH WAS NOT CONFRONTED TO THE ASSESSEE. THEREFORE, SUCH STATEMENT RECORDED AT THE BACK OF THE ASSESSEE HAS NO EVIDENTIARY VALUE. IT IS A SETTLED LAW THAT A STATEMENT RECORDE D AT BACK OF THE ASSESSEE AND NOT CONFRONTED TO HIM CANT BE USED AG AINST THE ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 17 ASSESSEE AS HELD BY THE SUPREME COURT IN ITS DECISI ON DT. 02.09.2015 IN CASE OF ANDAMAN TIMBER INDUSTRIES VS. CCE 127 DT R 0241 WHEREIN IT WAS HELD THAT DENIAL OF OPPORTUNITY TO T HE ASSESSEE TO CROSS-EXAMINE THE WITNESSES WHOSE STATEMENTS WERE M ADE THE SOLE BASIS OF THE ASSESSMENT IS A SERIOUS FLAW RENDERING THE ORDER A NULLITY IN AS MUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLE S OF NATURAL JUSTICE. (G) IT IS ALSO SUBMITTED THAT THE GRAM PANCHAYAT HAS NOT WITHDRAWN THE COMPLETION CERTIFICATE ISSUED BY IT AND THUS IT REMAINS IN FORCE EVEN TODAY. THE OBSERVATION OF THE AO THAT GRAM PAN CHAYAT HAS NO TECHNICAL PERSON TO APPROVE THE BUILDING MAP, THERE IS A CHANGE IN THE STAND OF THE ASSESSEE, ASSESSEE HAS TAKEN THE P LEA OF GRAM PANCHAYAT CERTIFICATE ONLY AT THE FAG END OF THE AS SESSMENT PROCEEDING AND THEREFORE THE CERTIFICATE OBTAINED F ROM SARPANCH WAS TO DECEIVE THE DEPARTMENT ARE ALL IRRELEVANT ISSUES MORE PARTICULARLY WHEN THE APPROVAL OF MAPS FROM GRAM PANCHAYAT WAS O BTAINED ON 10-04-2007 WHICH IS NOT DISPUTED BY THE AO. THE FAC T THAT THE HOUSING PROJECT WAS COMPLETED BEFORE 31-03-2012 IS FURTHER EVIDENT FROM FOLLOWING EVIDENCES:- - COMPLETION CERTIFICATE DATED 21-03-2012 ISSUED BY M /S MISHRA GARG AND ASSOCIATES WHO ARE ARCHITECTS, PLANNERS, R EGISTERED ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 18 VALUER AND THE TECHNICAL PERSON. THIS CERTIFICATE G IVEN TO THE AO IS IGNORED BY HIM. - THE NEWSPAPER CUTTINGS DATED 30-03-2012 TO 05-04-20 12 SHOWING THE ACTUAL SITE PHOTOGRAPHS AND THE NEWS OF COMPLET ION OF THE CONSTRUCTION OF 576 FLATS IN THE HOUSING PROJECT AN D THE GRAH PRAVESH BY AROUND 100 FAMILIES IN THESE FLATS. - NOC ISSUED BY CHIEF FIRE BRIGADE OFFICER, NAGAR NIG AM JAIPUR ON 30.03.2012 & 23.05.2012 FOR MEETING THE FIRE SAFETY STANDARD. (H) WITHOUT PREJUDICE TO ABOVE, EVEN IF THE JDA IS DE EMED TO BE LOCAL AUTHORITY FOR APPROVAL AND ISSUE OF COMPLETION CERT IFICATE, IT MAY BE NOTED THAT THE JDA COMMUNICATED THE APPROVAL OF MAP S TO THE ASSESSEE IN THE MONTH OF AUGUST 2008 AND OCT 2008 A ND THEREFORE THE PERIOD OF FIVE YEARS FROM THE END OF THE FINANC IAL YEAR FROM THE COMMUNICATION OF THE APPROVAL ENDS ON 31-03-2014. H OWEVER, AS THE PROJECT WAS COMPLETED IN THE MONTH OF FEB 2012, THE ASSESSEE ALSO MOVED AN APPLICATION TO JDA FOR ISSUE OF COMPL ETION CERTIFICATE ON 23-03-2012. THE JDA AFTER COMPLETING ITS FORMALI TIES ISSUED THE COMPLETION CERTIFICATE ON 01-08-2012/23-03-2013 BUT ALL THESE CERTIFICATE WOULD RELATE BACK TO THE DATE OF THE AP PLICATION DATED 23- 03-2012 AS DISCUSSED BELOW. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 19 FROM THE ABOVE DISCUSSION IT IS EVIDENT THAT ASSESS EE HAS COMPLETED THE HOUSING PROJECT PRIOR TO 31-03-2012 AND ALSO OBTAIN ED THE COMPLETION CERTIFICATE FROM LOCAL AUTHORITY AND THEREFORE, THE CONDITION SPECIFIED IN CLAUSE (A)(III) TO SECTION 80-IB(10) IS FULLY SATIS FIED. THEREFORE, THE LD. CIT(A) CONSIDERING ALL THESE EVIDENCE HAS RIGHTLY H ELD THAT THE PROJECT WAS COMPLETED PRIOR TO 31.03.2012. 9.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. THE TERM LOCAL AUTHORITY HAS NOT BEEN DEFINED U/S 80IB(10) OF THE ACT. THEREFORE, THE EXPRESSION LOC AL AUTHORITY HAS TO BE EXAMINED IN THE CONTEXT OF SECTION 80IB(10) OF THE ACT WHERE IT HAS BEEN USED. THIS SECTION REQUIRES THAT THE DEDUCTION SHAL L BE AVAILABLE TO AN UNDERTAKING DEVELOPING AND BUILDING THE HOUSING PRO JECT WHICH HAS BEEN APPROVED BY THE LOCAL AUTHORITY AND COMPLETES SUCH CONSTRUCTION WITHIN A PERIOD OF FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. IN THIS CONTEXT, THE LOCAL AUTHORITY SHOULD BE SUCH AN AUTHORITY WHICH H AS BEEN AUTHORIZED AND EMPOWERED TO APPROVE THE DEVELOPMENT AND BUILDI NG OF HOUSING PROJECTS AS WELL AS ISSUING THE COMPLETION CERTIFIC ATE IN RESPECT OF SUCH HOUSING PROJECT WHICH FALLS WITHIN ITS JURISDICTION . THE LD. AR HAS CONTENDED THAT THE GRAM PANCHAYAT WHERE THE PROJECT OF THE ASSESSEE COMPANY IS LOCATED IS THE LOCAL AUTHORITY FOR GRANT ING THE APPROVAL OF THE ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 20 PROJECT AND FOR ISSUANCE OF THE COMPLETION CERTIFIC ATE. FURTHER, OUR REFERENCE WAS DRAWN TO THE JAIPUR DEVELOPMENT AUTHO RITY ACT, 1982 WHERE JDA HAS BEEN DEFINED AS A DEEMED LOCAL AUTHOR ITY. 9.4 ON PERUSAL OF THE JDA ACT, THE PREAMBLE TO THE ACT STATES THAT THE JAIPUR CITY AND AREAS CONTIGUOUS TO IT ARE BEING PR OGRESSIVELY DEVELOPED AND POPULATED AND THE NECESSITY IS BEING INCREASING LY FELT FOR FORMING THIS AREA INTO JAIPUR REGION AND FOR SETTING UP AN AUTHORITY FOR THE PURPOSE OF PLANNING, COORDINATING AND SUPERVISING T HE PROPER, ORDERLY AND RAPID DEVELOPMENT OF THESE AREAS IN WHICH SEVER AL GOVT. AGENCIES, LOCAL AUTHORITIES AND OTHER ORGANIZATIONS ARE AT PR ESENT ENGAGED WITHIN THEIR OWN JURISDICTIONS, TO PROVIDE ALSO THAT SUCH AUTHORITY BE ENABLED EITHER ITSELF OR THROUGH OTHER AUTHORITY TO FORMULA TE AND EXECUTE PLANS, PROJECTS AND SCHEMES FOR THE DEVELOPMENT OF JAIPUR REGION SO THAT HOUSING, COMMUNITY FACILITIES, CIVIC COMMUNITIES AN D OTHER INFRASTRUCTURE ARE PROPERLY CREATED FOR THE POPULATION OF JAIPUR R EGION IN THE PERSPECTIVE OF 2001 AD OR THEREAFTER INCLUDING THE INTERMEDIATE STAGES AND TO PROVIDE FOR MATTERS CONNECTED WITH THE AFORE SAID. THEREAFTER, SECTION 2(8) OF JDA ACT DEFINES THE JAIPUR REGION T O MEAN THE AREAS IN THE LIMIT OF THE CITIES, TOWNS AND VILLAGES SPECIFI ED IN SCHEDULE-I. THE TERM LOCAL AUTHORITY HAS BEEN DEFINED UNDER SECTI ON 2(10) TO MEAN A MUNICIPALITY OR A PANCHAYAT. THE TERM MUNICIPALITY HAS BEEN DEFINED ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 21 UNDER SECTION 2(11) TO MEAN A MUNICIPALITY ESTABLIS HED UNDER THE RAJASTHAN MUNICIPALITIES ACT, 1959 IN JAIPUR REGION . THE TERM PANCHAYAT HAS BEEN DEFINED UNDER SECTION 2(14) TO MEAN A PANCHAYAT ESTABLISHED UNDER THE RAJASTHAN PANCHAYAT ACT, 1953 (RAJASTHAN ACT 21 OF 1953) IN JAIPUR REGION; OR A PANCHAYAT SAMITI OR ZILA PARISHAD CONSTITUTED UNDER THE RAJASTHAN PANCHAYAT SAMITIS A ND ZILA PARISHADS ACT, 1959 (RAJASTHAN ACT 37 OF 1959) IN JAIPUR REGI ON. SECTION 3(1) TALKS ABOUT ESTABLISHMENT OF AN AUTHORITY TO BE CAL LED JAIPUR DEVELOPMENT AUTHORITY FOR THE PURPOSES OF THIS ACT AS NOTIFIED BY THE STATE GOVERNMENT. SECTION 3(3) STATES THAT THE AUT HORITY SHALL BE DEEMED TO BE A LOCAL AUTHORITY WITHIN THE MEANING O F THE TERM LOCAL AUTHORITY AS DEFINED IN THE RAJASTHAN GENERAL CLAU SES ACT, 1955. SECTION 4 TALKS ABOUT COMPOSITION OF THE JAIPUR DEV ELOPMENT AUTHORITY WHICH SHALL CONSIST OF THE FOLLOWING MEMBERS:- (I) A CHAIRMAN, WHO SHALL BE THE MINISTER-IN-CHARGE OF URBAN DEVELOPMENT OF THE STATE OF RAJASTHAN OR A NOMINEE OF THE GOVERNOR DURING PRESIDENTS RULE; (II) A VICE-CHAIRMAN, WHO SHALL BE STATE MINISTER O F URBAN DEVELOPMENT OF THE STATE OF RAJASTHAN, OR A NOMINEE OF THE GOVERNOR DURING PRESIDENTS RULES; (III) SECRETARY TO THE GOVERNMENT, URBAN DEVELOPMENT AND HOUSING DEPARTMENT; ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 22 (IV) JAIPUR DEVELOPMENT COMMISSIONER (APPOINTED UNDER TH IS ACT); (V) CHAIRMAN, RAJASTHAN HOUSING BOARD; (VI) CHIEF ENGINEER, PUBLIC HEALTH ENGINEERING DEPARTMEN T; (VII) CHIEF ENGINEER, PUBLIC WORKS DEPARTMENT; (VIII) DISTRICT COLLECTOR, JAIPUR; (IX) CHIEF ENGINEER, RAJASTHAN STATE ELECTRICITY BOARD; (X) CHAIRMAN/ADMINISTRATOR, MUNICIPAL COUNCIL, JAIPUR; (XI) ZILA PRAMUKH OF ZILA PARISHAD, JAIPUR DISTRICT; (XII) CHIEF TOWN PLANNER RAJASTHAN; AND (XIII) NON-OFFICIAL MEMBERS, NOT EXCEEDING SEVEN TO BE NOM INATED BY THE STATE GOVERNMENT. 9.5 SECTION 16 DEFINES THE FUNCTION OF THE JDA AUTH ORITY AS UNDER:- THE MAIN OBJECT OF THE AUTHORITY SHALL BE TO SECUR E THE INTEGRATED DEVELOPMENT OF THE JAIPUR REGION AND FOR THAT PURPO SE THE FUNCTIONS OF THE AUTHORITY SHALL BE:- (A) URBAN PLANNING INCLUDING THE PREPARATION OF MASTER DEVELOPMENT PLAN AND ZONAL DEVELOPMENT PLANS AND CARRYING OUR SURVEYS FOR THE PURPOSE AND ALSO MAKIN G ALTERATIONS THEREIN AS MAY BE DEEMED NECESSARY; (B) FORMULATION AND SANCTION OF THE PROJECTS AND SCHEME S FOR THE DEVELOPMENT OF THE JAIPUR REGION OR ANY PART TH EREOF; (C) EXECUTION OF PROJECTS AND SCHEMES DIRECTLY BY ITSEL F OR THROUGH A LOCAL AUTHORITY OR ANY OTHER AGENCY; ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 23 (D) TO MAKE RECOMMENDATIONS TO THE STATE GOVERNMENT ON ANY MATTER OR PROPOSAL REQUIRING ACTION BY THE STATE GOVERNMENT, CENTRAL GOVERNMENT, ANY LOCAL AUTHORITY OR ANY OTHER AUTHORITY FOR OVERALL DEVELOPMENT OF THE JAIP UR REGION; (E) PARTICIPATION WITH ANY OTHER AUTHORITY FOR THE DEVE LOPMENT OF THE JAIPUR REGION; (F) COORDINATING EXECUTION OF PROJECTS OR SCHEMES FOR T HE DEVELOPMENT OF THE JAIPUR REGION; (G) SUPERVISION OR OTHERWISE ENSURING ADEQUATE SUPERVIS ION OVER THE PLANNING AND EXECUTION OF ANY PROJECT OR SCHEME , THE EXPENSES OF WHICH, IN WHOLE OR IN PART ARE TO BE ME T FROM THE JAIPUR REGION DEVELOPMENT FUND; (H) PREPARING SCHEMES AND ADVISING THE CONCERNED AUTHOR ITIES DEPARTMENTS AND AGENCIES IN FORMULATING AND UNDERTA KING SCHEMES FOR DEVELOPMENT OF AGRICULTURE, HORTICULTUR E, FLORICULTURE, FORESTRY, DAIRY DEVELOPMENT, TRANSPOR T, COMMUNICATION, SCHOOLING, CULTURAL ACTIVITIES, SPOR TS, MEDICARE, TOURISM, ENTERTAINMENT AND SIMILAR OTHER ACTIVITIES; (I) EXECUTION OF PROJECTS AND SCHEMES ON THE DIRECTIONS OF THE STATE GOVERNMENT; (J) UNDERTAKING HOUSING ACTIVITY IN JAIPUR REGION, PROV IDED THAT THE DELINEATION OF RESPONSIBILITY FOR HOUSING BETWE EN RAJASTHAN HOUSING BOARD AND THE AUTHORITY WILL BE M ADE BY STATE GOVERNMENT EFFECTIVE FROM THE DATE TO BE FIXE D BY IT; ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 24 (K) TO ACQUIRE, HOLD, MANAGE AND DISPOSE OF PROPERTY, M OVABLE OR IMMOVABLE, AS IT MAY DEEM NECESSARY; (L) TO ENTER INTO CONTRACTS, AGREEMENTS OR ARRANGEMENTS WITH ANY PERSON OR ORGANIZATION AS THE AUTHORITY MAY DEE M NECESSARY FOR PERFORMING ITS FUNCTIONS; (M) TO PREPARE MASTER PLAN FOR TRAFFIC CONTROL AND MANA GEMENT, DEVISE POLICY AND PROGRAMME OF ACTION FOR SMOOTH FL OW OF TRAFFIC AND MATTERS CONNECTED THEREWITH; (N) TO PERFORM FUNCTIONS DESIGNATED BY THE STATE GOVERN MENT IN THE AREAS OF URBAN RENEWAL, ENVIRONMENT AND ECOLOGY , TRANSPORT AND COMMUNICATION, WATER ENERGY RESOURCE MANAGEMENT DIRECTLY OR THROUGH ITS FUNCTIONAL BOARD S OR OTHER DEPARTMENTS/AGENCIES AS THE STATE GOVERNMENT MAY SPECIFY; (O) REGULATING THE POSTING OF BILLS, ADVERTISEMENT HOAR DINGS, SIGNPOST, AND NAME BOARDS IN JAIPUR REGION OR IN AN Y PART THEREOF AS SPECIFIED BY THE AUTHORITY; (P) REGULATING THE ERECTION OR RE-ERECTION OF BUILDINGS AND PROJECTIONS, MAKING MATERIAL ALTERATIONS THEREIN AN D PROVIDING FOR OPEN SPACES IN JAIPUR REGION OR IN AN Y PART THEREOF AS SPECIFIED BY THE AUTHORITY; (Q) REMOVING OBSTRUCTIONS AND ENCROACHMENTS UPON PUBLIC STREETS, OPEN SPACES AND PROPERTIES VESTING IN THE GOVERNMENT OR THE AUTHORITY; (R) TO DO ALL SUCH OTHER ACTS AND THINGS WHICH MAY BE N ECESSARY FOR OR INCIDENTAL OR CONDUCIVE TO, ANY MATTERS WHIC H ARISE ON ACCOUNT OF ITS ACTIVITY AND WHICH ARE NECESSARY FOR ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 25 FURTHERANCE OF THE OBJECTS FOR WHICH THE AUTHORITY IS ESTABLISHED: AND (S) TO PERFORM ANY OTHER FUNCTIONS THAT THE STATE GOVER NMENT MAY DESIGNATE IN FURTHERANCE OF THE OBJECTIVES OF T HIS ACT; 9.6 SECTION 17 OF THE JDA ACT PROVIDES THAT NO OTHE R AUTHORITY OR PERSON TO UNDERTAKE CERTAIN DEVELOPMENT WITHOUT PER MISSION OF THE AUTHORITY WHICH IS AS UNDER:- (1) NOTWITHSTANDING ANYTHING CONTAINED IN ANY LAW FOR T HE TIME BEING IN FORCE, EXCEPT WITH THE PREVIOUS PERMISSION OF TH E AUTHORITY, NO AUTHORITY OR PERSON SHALL UNDERTAKE ANY DEVELOPMENT WITHIN THE JAIPUR REGION OF THE TYPE AS THE AUTHORITY MAY FROM TIME T O TIME SPECIFY, BY NOTIFICATION PUBLISHED IN THE OFFICIAL GAZETTE, AND WHICH IS LIKELY TO ADVERSELY AFFECT THE OVERALL DEVELOPMENT OF THE JAI PUR REGION. (2) ANY AUTHORITY OR PERSON DESIRING TO UNDERTAKE DEVELOPMENT REFERRED TO IN SUB-SECTION (1) SHALL APPLY IN WRITI NG TO THE AUTHORITY FOR PERMISSION TO UNDERTAKE SUCH DEVELOPMENT; PROVIDED THAT SUCH PERSON MAY APPLY FOR SUCH PERMIS SION THROUGH THE CONCERNED LOCAL AUTHORITY AND SUCH LOCAL AUTHOR ITY SHALL FORWARD HIS APPLICATION TO THE AUTHORITY WITH ITS RECOMMENDATIO NS, IF ANY. (3) THE AUTHORITY SHALL, AFTER MAKING SUCH ENQUIRY AS IT DEEMS NECESSARY AND WITHIN SIXTY DAYS FROM THE RECEIPT OF AN APPLICATION UNDER SUB-SECTION (2), GRANT SUCH PERMISSION WITHOUT ANY CONDITIONS OR WITH SUCH CONDITIONS AS IT MAY DEEM FIT TO IMPOSE OR REF USE TO GRANT SUCH PERMISSION. IF SUCH PERMISSION IS NOT GRANTED OR RE FUSED WITHIN SIXTY DAYS AS AFORESAID, THE APPLICANT MAY, BY A WRITTEN COMMU NICATION PRESENTED ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 26 IN PERSON OR THROUGH HIS AUTHORIZED REPRESENTATIVE TO THE SECRETARY OF THE AUTHORITY OR ANY OTHER OFFICER NOMINATED BY HIM IN THIS BEHALF, CALL THE ATTENTION OF THE AUTHORITY TO THE OMISSION OR N EGLECT IN GRANTING OR REFUSING PERMISSION, AND IF SUCH OMISSION OR NEGLEC T IN GRANTING OR REFUSING PERMISSION, AND IF SUCH OMISSION OR NEGLEC T CONTINUES FOR A FURTHER PERIOD OF THIRTY DAYS FROM THE RECEIPT OF S UCH COMMUNICATION, THE AUTHORITY SHALL BE DEEMED TO HAVE PERMITTED THE PRO POSED DEVELOPMENT AND SUCH DEVELOPMENT MAY BE PROCEEDED WITHIN THE MA NNER SPECIFIED IN THE APPLICATION: PROVIDED THAT NOTHING HEREIN CONTAINED SHALL BE CO NSTRUED TO AUTHORIZE ANY PERSON TO ACT IN CONTRAVENTION OF ANY PROVISION OF THIS ACT OR THE RULES, REGULATIONS OR ORDER MADE THEREUNDER, RELATING TO ANY MATTERS OTHER THAN THE REQUIREMENT OF OBTAINING PER MISSION OF THE AUTHORITY BEFORE UNDERTAKING OR CARRYING OUT ANY IM PROVEMENT UNDER THIS ACT. (4) ANY AUTHORITY OR PERSON AGGRIEVED BY THE DECISI ON OF THE AUTHORITY UNDER SUB-SECTION (3), MAY, WITHIN THIRTY DAYS, APP EAL AGAINST SUCH DECISION TO THE STATE GOVERNMENT WHOSE DECISION SHA LL BE FINAL: PROVIDED THAT, WHERE THE AGGRIEVED AUTHORITY SUBMI TTING SUCH APPEAL IS UNDER THE ADMINISTRATIVE CONTROL OF THE C ENTRAL GOVERNMENT, THE APPEAL SHALL BE DECIDED BY THE STATE GOVERNMENT AFTER CONSULTATION WITH THE CENTRAL GOVERNMENT. (5) IN CASE ANY PERSON OR AUTHORITY DOES ANYTHING C ONTRARY TO THE DECISION GIVEN UNDER THIS SECTION, THE AUTHORITY SH ALL HAVE POWER TO PULL DOWN, DEMOLISH OR REMOVE ANY DEVELOPMENT UNDERTAKEN CONTRARY TO SUCH DECISION AND RECOVER THE COST OF SUCH PULLING DOWN, DEMOLITION OR REMOVAL FROM THE PERSON OR AUTHORITY CONCERNED. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 27 9.7 IN LIGHT OF ABOVE, IT IS CLEAR THAT THE AUTHORI TY WHICH HAS BEEN AUTHORIZED AND MANDATED TO APPROVE THE DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECTS IN THE JAIPUR REGION IS THE JAI PUR DEVELOPMENT AUTHORITY. FURTHER, IN TERMS OF SECTION 3(1) READ WITH SECTION 3(3) OF THE JDA ACT, THE JAIPUR DEVELOPMENT AUTHORITY IS DEEMED TO BE A LOCAL AUTHORITY FOR THE PURPOSES OF THIS ACT WHICH INCLUD ES THE DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECTS IN THE JAIPUR REGION. THE OTHER LOCAL AUTHORITIES SUCH AS MUNICIPALITY OR GRAM PANC HAYAT SHALL WORK IN THEIR RESPECTIVE JURISDICTIONS AND AT THE SAME TIME WHEN IT COMES TO THE DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECTS, T HE APPLICANT CAN SEEK THE PERMISSION THROUGH THE CONCERNED LOCAL AUT HORITY AND SUCH AUTHORITIES SHALL FOREWARD THE APPLICATION WITH THE IR RECOMMENDATIONS, IF ANY TO JAIPUR DEVELOPMENT AUTHORITY. THE AUTHORITY TO APPROVE THE DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECTS LI ES WITH JAIPUR DEVELOPMENT AUTHORITY AND IT IS UP TO JAIPUR DEVELO PMENT AUTHORITY WHETHER TO APPROVE THE HOUSING PROJECT OR NOT. IN ABSENCE OF APPROVAL FROM THE JAIPUR DEVELOPMENT AUTHORITY, THE ASSESSEE S BUILDING PLANS AND CONSTRUCTION THEREOF WOULD BE IN VIOLATION OF T HE JDA ACT AND CANNOT BE SAID TO BE APPROVED. FURTHER, ON PERUSAL OF THE APPLICATION FILED BY THE ASSESSEE FOR APPROVAL OF MAPS AS WELL AS FOR IS SUANCE OF COMPLETION CERTIFICATES TO THE GRAM PANCHAYAT AS WELL AS TO TH E JDA, IT IS AGAIN CLEAR THAT IT IS JDA WHICH IS THE FINAL APPROVING AUTHORI TY, THE REASON FOR THE SAME IS THAT HAD THE GRAM PANCHAYAT BEING THE ULTIM ATE AUTHORITY, THERE WAS NO NECESSITY FOR THE ASSESSEE TO APPROACH JDA F OR APPROVAL OF ITS PROPOSED BUILDING, PLAN AS WELL AS FOR ISSUANCE OF THE COMPLETION CERTIFICATE. GIVEN THAT THE ASSESSEE HAS ITSELF RE ACHED OUT TO THE JDA ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 28 WHICH ESTABLISHES BEYOND ANY DOUBT THAT THE PROJECT AREA FALLS WITHIN THE JURISDICTION AND THE AUTHORITY OF JDA AND IT IS JDA WHICH IS TO APPROVE THE BUILDING PLAN AND ISSUANCE OF THE COMPLETION CE RTIFICATE. IN LIGHT OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT HOUSING P ROJECT FALLS WITH THE JAIPUR REGION AND THE JDA IS THE APPROVING AUTHORIT Y FOR DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECTS AND IT SHA LL BE THE LOCAL AUTHORITY FOR THE PURPOSES OF CLAIM OF DEDUCTION UN DER SECTION 80IB(10) OF THE ACT. 10. WHERE THE HOUSING PROJECT IS COMPLETED AND THE APPLICATION FOR ISSUE OF THE COMPLETION CERTIFICATE IS MADE WITHIN THE PRESCRIBED TIME, WHETHER ANY DELAY IN ISSUE OF THE COMPLETION CERTIF ICATE WOULD RELATE BACK TO THE DATE OF MAKING OF APPLICATION OR NOT? 10.1 IN THIS REGARD, THE LD AR HAS SUBMITTED AS UND ER: (A) IN CASE JDA IS CONSIDERED TO BE LOCAL AUTHORITY FOR APPROVAL IN ISSUE OF COMPLETION CERTIFICATE, IT CAN BE NOTED TH AT THE ASSESSEE HAS ALSO MOVED AN APPLICATION FOR APPROVAL OF THE M AP OF THE HOUSING PROJECT TO JDA ON 26.03.2007 (PB 2 & 15) BU T THE APPROVAL WAS CONVEYED ON 26.08.2008 (17 MONTHS DELA Y) FOR BLOCK A TO G (PB 2-3) AND ON 01.10.2008 (18 MONTHS DELAY) FOR BLOCK H & I (PB 15-16). FROM THE DATE OF CONVEYING THE APPR OVAL, THE PERIOD OF 5 YEARS ENDS ON 31.03.2014. HOWEVER, AS THE PROJECT WAS COMPLETED IN FEBRUARY, 2012, ASSESSEE MOVED APP LICATION ON 23-03-2012 TO JDA FOR ISSUING THE COMPLETION CERTIF ICATE. THE COMPLETION CERTIFICATE IS ISSUED BY JDA FOR BLOCK H & I ON 01-08- 2012 (PB 21), FOR BLOCK A TO E ON 21-03-2013 (PB 13 ) BUT THE COMPLETION CERTIFICATE FOR BLOCK F & G WAS NOT ISSU ED FOR WANT OF ENVIRONMENT CLEARANCE CERTIFICATE. HOWEVER, THE FA CT REMAINS IS ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 29 THAT THE FLATS IN THESE BLOCKS ARE OCCUPIED AND USE D FOR RESIDENCE BY ITS OWNERS. (B) THE AO AT PG 7 OF THE ORDER HAS STATED THAT HE HAS INSPECTED THE FILE OF THE ASSESSEE WITH JDA ON 15-03-2013 AND FOU ND THAT ON 08- 05-2012 (PB 10), JDA WROTE A LETTER TO THE ASSESSEE IN RESPONSE TO ITS APPLICATION DATED 23-03-2012 FOR ISSUE OF COMPL ETION CERTIFICATE AND IN THAT MATTER IT IS STATED THAT OUT OF SEVEN B LOCKS, WORK OF BLOCK A, B, C & D IS ALMOST COMPLETE BUT THE CIVIL CONSTRUCTION AT BLOCK E, F & G IS IN PROGRESS. THE AO HAS FURTHER O BSERVED THAT ASSESSEE HAS ALSO FILED AN APPLICATION ON 15-01-201 3 SUBMITTING REVISED MAPS FOR ISSUE OF PARTIAL COMPLETION CERTIF ICATE IN RESPECT OF BLOCK A TO E WHICH SHOWS THAT THE PROJECT WAS IN COMPLETE AS ON 31-03-2012. (C) IT MAY BE NOTED THAT THAT THE LETTER DATED 08-05-20 12 ISSUED BY JDA WAS NEVER RECEIVED BY THE ASSESSEE. THIS LETTER WAS ISSUED WITH REFERENCE TO BLOCK A TO G. THE LETTER IS SILE NT IN RESPECT OF BLOCK H & I. THE ISSUE OF COMPLETION CERTIFICATE IN RESPECT OF BLOCK H & I WAS CONSIDERED IN BUILDING MAP COMMITTEE ON 1 1-07-2012 AND COMPLETION CERTIFICATE ISSUED ON 01-08-2012 (PB 21). FURTHER, THE CHIEF FIRE BRIGADE OFFICER HAS ISSUED NO OBJECT ION CERTIFICATE IN RESPECT OF BLOCK H & I ON 30-03-2012 (PB 20). THIS SHOWS THAT THE CONSTRUCTION OF BLOCK H & I WERE COMPLETE BEFORE 31 -03-2012. ANY DELAY IN ISSUE OF THE COMPLETION CERTIFICATE BY JDA WOULD, THEREFORE, RELATE BACK TO THE DATE OF APPLICATION. FOR THIS RELIANCE IS PLACED ON THE FOLLOWING CASES:- CIT VS. TARNETAR CORPORATION 362 ITR 174 (GUJ) (PB 30-31): IN THIS CASE AO DID NOT ALLOW THE ASSESSEE DEDUCTIO N UNDER SECTION 80-IB(10) OF THE INCOME-TAX ACT, 1961, ON DEVELOPME NT OF A HOUSING PROJECT ON THE GROUNDS THAT THE ASSESSEE DID NOT COMPLETE THE HOUSING PROJECT WITHIN THE STATUTORY TIME FRAME . THE TRIBUNAL NOTED THAT THE CONSTRUCTION WAS COMPLETED IN 2006. APPLICATION FOR ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 30 BUILDING USE PERMISSION TO THE MUNICIPAL AUTHORITIE S WAS FILED ON FEBRUARY 15, 2006, BUT WAS REJECTED ON JULY 1, 2006 .THEREAFTER UPON REVISED EFFORTS FROM THE ASSESSEE GRANTED THE SAME BY ORDER DATED MARCH 19, 2009. SEVERAL RESIDENTIAL UNITS WER E OCCUPIED WITHOUT NECESSARY PERMISSION. THE ASSESSEE PAID A P ENALTY AND GOT SUCH OCCUPATION REGULARISED. ON APPEAL THE COURT HELD THAT UNDER SUB-CLAUSE (I) OF CLAUSE (A) OF SECTION 80-IB(10), SINCE THE ASSESSEE HAD GOT APPRO VAL FOR THE HOUSING PROJECT FROM THE LOCAL AUTHORITY BEFORE APR IL 1, 2004, IT WAS REQUIRED TO COMPLETE THE CONSTRUCTION LATEST BY MARCH 31, 2008. THE ASSESSEE HAD NOT ONLY COMPLETED THE CONST RUCTION TWO YEARS BEFORE THE FINAL DATE BUT HAD APPLIED FOR THE BUILDING USE PERMISSION. SUCH PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED BUT ON SOME OTHER TE CHNICAL GROUND. THUS, GRANTING THE BENEFIT OF DEDUCTION COU LD NOT BE HELD TO BE ILLEGAL. CIT V. RADOMIR DZELATOVIC 206 ITR 320 (BOM.): THE ASSESSEE, A FOREIGN TECHNICIAN, FILED AN APPLIC ATION BEFORE THE CENTRAL GOVERNMENT CLAIMING EXEMPTION FROM PAYMENT OF TAX UNDER SECTION 10(6)(VIIA)(I)(B) OF THE INCOME-TAX A CT, 1961. THE CENTRAL GOVERNMENT GRANTED THE APPROVAL ON MAY 26, 1972, FOR A PERIOD OF TWO YEARS. ON MARCH 25, 1974, THE ASSESSE E APPLIED FOR EXTENSION OF THE EXEMPTION WHICH WAS GRANTED ON OCT OBER 4, 1975, I.E., BEYOND OCTOBER 1, 1975, RESULTING IN A DELAY OF THREE DAYS ON THE PART OF THE CENTRAL GOVERNMENT. THE TRI BUNAL HELD THAT THE ASSESSEE COULD NOT BE DENIED THE BENEFIT O F EXEMPTION FOR THE ASSESSMENT YEAR 1975-76 FOR THE DELAY ON THE PA RT OF THE CENTRAL GOVERNMENT, THAT THE APPROVAL, ONCE ACCORDE D, RELATED BACK TO THE DATE OF THE APPLICATION AND THAT HENCE THE ASSESSEE WAS ENTITLED TO THE EXEMPTION FOR THE ASSESSMENT YE AR 1975-76. ON A REFERENCE THE COURT AFFIRMING THE ORDER OF THE TRIBUNAL, HELD THAT THE ASSESSEE WAS ENTITLED TO EXEMPTION UNDER S ECTION ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 31 10(6)(VIIA)(1)(B) OF THE INCOME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 1975-76 . CIT VS AKSHAY EMINENCE DEVELOPERS (P.) LTD. 206 TAXMAN 99 (KAR.) IN THIS CASE ASSESSEE COMPANY UNDER TOOK A PROJECT WITH REGARD TO CONSTRUCTION OF A RESIDENTIAL FLATS IN BANGALORE. I T APPLIED FOR APPROVAL OF THE SAID PROJECT BEFORE THE BANGALORE D EVELOPMENT AUTHORITY (BDA) ON 8-10-2004, THE BDA GRANTED THE A PPROVAL ON 28-03-2005 BUT COMMUNICATED THE SAID APPROVAL TO TH E ASSESSEE ON 4-04-2005. THE BDA ALSO CLARIFIED THAT ASSESSEE S PROJECT WAS APPROVED FOR CONSTRUCTION W.E.F. 4-04-2005 AND THE SAID APPROVAL WOULD BE IN FORCE TILL 3-04-2007. THE AO, ACCORDING LY, DENIED THE BENEFIT OF SECTION 80-IB(10) FOR A.Y. 2005-06 TO 20 07-08 AS PROJECT WAS NOT APPROVED BEFORE 31-03-2005. IN APPEAL THE CIT(A)/ITAT ALLOWED THE DEDUCTION TO THE ASSESSEE BY HOLDING THAT ONCE APPROVAL IS GRANTED IT SHOULD RELATE BACK TO THE DATE OF APPLICATION AND THEREFORE APPROVAL WOUL D RELATE BACK TO 8-10-2004. ON FURTHER APPEAL THE HONBLE HIGH COURT HELD THAT IT IS NOT IN DISPUTE THAT THE APPROVAL IS GRANTED ON 28-03-2005. IT IS COMMUNICATED ON 4-04-2005. BECAUSE IT WAS COMMUNICA TED TO THE ASSESSEE ON 4-04-2005 AND IN LAW THE ASSESSEE SHOUL D HAVE TWO YEAR TIME TO COMPLETE THE CONSTRUCTION, THE SAID CO MMUNICATION AND THE SANCTIONED LETTER MADE IT CLEAR THE TIME FO R COMPLETING THE CONSTRUCTION START FROM 04-04-2005 AND IT ENDS ON 3 -04-2007. THAT IS NOT THE DATE OF APPROVAL. THE DATE OF APPRO VAL IS 28-03- 2005. AS PER THE JUDGMENT OF THE BOMBAY HIGH COURT, ONCE APPROVAL IS GRANTED IT RELATE BACK TO THE DATE OF A PPLICATION. EVEN THAT EXERCISE IS NOT TO BE DONE IN THE INSTANCE CAS E, AS THE DATE OF APPROVAL IS 28-03-2005, THE ASSESSEE IS ENTITLED TO THE BENEFIT U/S 80-IB(10) FROM THE A.Y. 2005-06. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 32 CIT VS. HINDUSTAN SAMUH AWAS LTD. (2015) 377 ITR 15 0 (BOM.) IN THIS CASE WHERE APPLICATION FOR ISSUE OF COMPLET ION CERTIFICATE WAS MADE PRIOR TO 31.03.2008 BUT THE SAME WAS ISSUE D BY THE MUNICIPAL CORPORATION ON 10.10.2008, THE DEDUCTION U/S 80-IB(10) WAS HELD ALLOWABLE BY GIVING FOLLOWING FINDINGS IN PARA 11 & 12 OF THE ORDER:- 11. THE QUESTION WE RAISE HERE IS WHETHER THE EXPL ANATION INTRODUCED AN ELEMENT OF HARSHNESS TO SUCH AN EXTEN T THAT IT RENDERED THE MAIN PROVISION NUGATORY? IN OUR VIEW, THE EXPLANATION IS INTRODUCED RECENTLY TO PUT AN END TO A CONTROVERSY, WHICH MIGHT ARISE BEFORE THE ASSESSING OFFICER ABOU T THE DATE OF COMPLETION. THE INTENTION OF THE LEGISLATURE IN PRO VIDING EXPLANATION TO FIX THE DATE OF COMPLETION OF A PROJ ECT IS QUITE HELPFUL WHEN THIS PROVISION IS UTILIZED IN PRACTICE . IN OUR VIEW THE EXPLANATION HAS INTRODUCED AN UNNECESSARILY STRICTN ESS IN THE PROVISION WHICH IS IN THE NATURE OF EXEMPTION AND N OT IN THE NATURE OF CHARGING. SUB-SECTION (10) MENTIONS THAT A HOUSI NG PROJECT SHOULD BE COMPLETE BEFORE 31.03.2008 SO AS TO GET T HE EXEMPTION. COMPLETION OF HOUSING PROJECT IS A PHYSICAL ACT. IT CAN BE DEMONSTRATED ON THE SPOT AND ALSO THROUGH A CERTIFI CATE ISSUED BY AN ARCHITECT WHO IS APPOINTED FOR SUPERVISING THE C ONSTRUCTION WORK. HE IS A PROFESSIONAL WHO WOULD DECLARE THAT T HE PROJECT IS COMPLETE. UNFORTUNATELY, SUB-SECTION (10) AND THE E XPLANATION DO NOT GIVE ANY IMPORTANCE TO THE ISSUANCE OF SUCH COM PLETION CERTIFICATE BY THE CONCERNED ARCHITECT. IT GIVES IM PORTANCE ONLY TO THE CERTIFICATE OF MUNICIPAL AUTHORITY. IT IS COMMO N KNOWLEDGE THAT AN APPLICATION FOR COMPLETION CERTIFICATE SUBMITTED TO THE MUNICIPAL AUTHORITIES IS ACCOMPANIED BY A COMPLETIO N CERTIFICATE ISSUED BY THE CONCERNED ARCHITECT. NO DOUBT, THE MU NICIPAL AUTHORITIES THEN CAUSE INSPECTION OF THE SITE AND V ERIFY THE CLAIM. THEREAFTER, THEY ISSUE COMPLETION CERTIFICATE. BUT, IF A PROJECT IS REALLY COMPLETE BEFORE 31.03.2008 AND AN APPLICATIO N IS MOVED QUITE IN TIME, FOR SEEKING COMPLETION CERTIFICATE F ROM THE MUNICIPAL ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 33 AUTHORITIES, AND IF THEY DO NOT TAKE STEPS URGENTLY AND DELAY THE ISSUANCE OF COMPLETION CERTIFICATE FROM THEIR SIDE, CAN IT BE SAID THAT SUCH CERTIFICATE WOULD ALONE DECIDE THE DATE O F COMPLETION OF THE PROJECT? THE ANSWER IS IN NEGATIVE. 12. IN THE FACTS OF THIS CASE, ADMITTEDLY, THE ARCH ITECT OF THE PROJECT HAD GIVEN A CERTIFICATE PRIOR TO 31.03.2008 . THE RESPONDENT SUBMITTED APPLICATION TO THE MUNICIPAL AUTHORITY AL ONG WITH SUCH CERTIFICATE WELL IN TIME ON 25.03.2008. IT SEEMS TH AT THE MUNICIPAL AUTHORITIES DIRECTED THE RESPONDENT TO DEPOSIT CERT AIN AMOUNT FOR ISSUANCE OF COMPLETION CERTIFICATE ON 27.03.2008 AN D THE AMOUNT WAS ACCORDINGLY DEPOSITED ON 31.03.2008. THEREAFTER , THE CERTIFICATE WAS ISSUED IN OCTOBER, 2008. THIS DELAY CANNOT BE ATTRIBUTED TO THE RESPONDENT ASSESSEE. GERA DEVELOPMENTS PVT. LTD. VS. JCIT (2015) 116 DTR 290 (PUNE) (TRIB.) CLAUSE (II) OF EXPLANATION TO SECTION 80-IB(10)(A) STATES THAT THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING P ROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIF ICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTH ORITY. IN THE PRESENT CASE, ASSESSEE HAVING COMPLETED THE CONSTRU CTION OF THE HOUSING PROJECT MUCH BEFORE THE STIPULATED DATE OF COMPLETION SPECIFIED IN SECTION 80-IB(10)(A) AND APPLIED TO TH E LOCAL AUTHORITY I.E. PMC FOR OBTAINING OCCUPANCY CERTIFICATE BASED ON THE ARCHITECTS CERTIFICATE AND OTHER NOCS REQUIRED FOR THE SAID PURPOSE, CLAIM FOR DEDUCTION U/S 80-IB(10) COULD NO T BE DENIED ON THE GROUND THAT THE PMC HAS NOT ISSUED THE COMPLETI ON CERTIFICATE BEFORE THE STIPULATED DATE. SANGHVI & DOSHI ENTERPRISE VS. ITO (2011) 60 DTR 30 6/131 ITD 151(CHENNAI) (TRIB.) (TM) ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 34 ASSESSEE CAN MAKE AN APPLICATION FOR COMPLETION CER TIFICATE ONLY WHEN THE PROJECT IS COMPLETED. THUS, GRANT OF A COM PLETION CERTIFICATE AFTER VERIFICATION BY THE COMPETENT AUT HORITY ON A SUBSEQUENT DATE WOULD RELATE BACK TO THE DATE ON WH ICH THE APPLICATION IS MADE. THUS, THERE CANNOT BE TWO VIEWS THAT CONSTRUCTION O F BLOCK H & I WAS COMPLETED BEFORE 31-03-2012. (D) IN RESPECT OF BLOCK A TO G, THE LETTER DATED 8-05-2 012 (PB 10) WRITTEN BY JDA TO THE ASSESSEE MENTIONS THAT THE WO RK OF BLOCK A TO D IS ALMOST COMPLETE AND THE CIVIL WORK OF BLOCK E, TO G IS IN PROGRESS. THE LETTER DOES NOT SPECIFY THE NATURE OF CIVIL WORK WHICH IS IN PROGRESS. THIS LETTER WAS NEVER RECEIVED BY T HE ASSESSEE. AS AGAINST THIS, THE CHIEF FIRE BRIGADE OFFICER VIDE I TS LETTER DATED 23- 05-2012 (PB 8-9) HAVE STATED THAT BLOCK A TO G HAS BEEN CONSTRUCTED FOR WHICH NO OBJECTION CERTIFICATE IS I SSUED. HOW THE FIRE FIGHTING DEPARTMENT COULD HAVE ISSUED NO OBJEC TION CERTIFICATE ON 23-05-2012 IF THE CONSTRUCTION OF BLOCK A TO G W ERE INCOMPLETE ON 8-05-2012. THIS SHOWS THAT THE LETTER DATED 08-0 5-2012 OF JDA IS VAGUE AND CANT BE RELIED UPON. (E) THE JDA VIDE LETTER DATED 05-10-2012 (PB 11) HAS CO MMUNICATED THAT THE ISSUE OF THE COMPLETION CERTIFICATE WAS PU T IN THE BUILDING MAP COMMITTEE ON 08-08-2012 WHERE IT IS STATED THAT ASSESSEE HAS CONSTRUCTED MORE THAN 20,000 SQ. MT. THAN THE A PPROVED CONSTRUCTION FOR WHICH ENVIRONMENT CLEARANCE IS TO BE PRODUCED AND IT IS TO GIVE AN UNDERTAKING THAT THE SPACE BEL OW THE WATER TANK WOULD NOT BE USED FOR RESIDENTIAL OR ANY OTHER USE. IF THE CIVIL CONSTRUCTION WAS IN PROGRESS ON 08-05-2012, IN RESP ECT OF BLOCK E TO G, HOW IN THE MEETING DATED 08-08-2012, THE MAPS ALREADY SUBMITTED ON 23-03-2012 IS PUT FOR APPROVAL. AGAIN VIDE LETTER DATED 07-01-2013 (PB 12), IT IS INTIMATED TO PRODUC E ENVIRONMENT CLEARANCE CERTIFICATE SO THAT FURTHER ACTION CAN BE TAKEN FOR ISSUE OF COMPLETION CERTIFICATE. HOWEVER, BECAUSE OF CERT AIN ISSUES WITH ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 35 REFERENCE TO THE ENVIRONMENT CLEARANCE, THE ASSESSE E FILED LETTER DATED 15-01-2013 FOR ISSUE OF COMPLETION CERTIFICAT E IN RESPECT OF BLOCK A TO D. THIS WAS ISSUED BY JDA ON 21-03-2013 (PB 13) WITH REFERENCE TO THE MEETING OF BUILDING COMMITTEE HELD ON 28-08- 2012. ALL THESE FACT SHOWS THAT THE JDA HAS NOT DIS PUTED THAT THE CONSTRUCTION OF THE BLOCKS A TO D WAS NOT COMPLETE BEFORE 31-03- 2012. IT IS ONLY BECAUSE THE ENVIRONMENT CLEARANCE CERTIFICATE COULD NOT BE OBTAINED, THERE IS A DELAY IN ISSUE OF THE COMPLETION CERTIFICATE. HOWEVER, ONCE THE ENVIRONMENT CLEARANC E IS OBTAINED AND THE COMPLETION CERTIFICATE IS ISSUED, IT WOULD RELATE BACK TO THE DATE OF APPLICATION AS STATED SUPRA. (F) SO FAR AS BLOCK E, F & G ARE CONCERNED, IT IS STATE D IN LETTER DATED 08-05-2012 (PB 10) THAT THE CIVIL WORK IS UNDER PRO GRESS. NO DETAIL OF SUCH WORK IN PROGRESS IS GIVEN. THIS LETTER IS A LSO NOT RECEIVED BY THE ASSESSEE. IF THE CIVIL WORK WAS IN PROGRESS, HOW THE MATTER OF ISSUE OF COMPLETION CERTIFICATE WAS PLACED IN BU ILDING MAP COMMITTEE MEETING ON 28-08-2012. THIS SHOWS THAT TH E BLOCK E, F & G WERE COMPLETE BEFORE 31-03-2012 AS IS EVIDENT F ROM THE CERTIFICATE ISSUED BY ARCHITECTS, COMPLETION CERTIF ICATE ISSUED BY GRAM PANCHAYAT AND THE PAPER CUTTINGS. THE COMPLETI ON CERTIFICATE FOR BLOCK E WAS ALSO ISSUED ON 21-03-20 13. THIS SHOWS THAT EVEN THE BLOCK F & G WERE COMPLETE BEFORE 31-0 3-2012 BUT BECAUSE THERE IS DELAY IN GETTING THE ENVIRONMENT C LEARANCE CERTIFICATE, THE COMPLETION CERTIFICATE IN RESPECT OF THESE BLOCKS WERE NOT ISSUED BY JDA. THIS WOULD NOT MEAN THAT TH E CONSTRUCTION OF BLOCK F & G WAS NOT COMPLETE BEFORE 31-03-2012. IN VIEW OF THE ABOVE, IT IS PROVED BEYOND DOUBT THA T THE CONSTRUCTION OF ALL THE BLOCKS OF THE HOUSING PROJE CT WAS COMPLETE BEFORE 31-03-2012. IF THERE IS DELAY ON PART OF THE JDA FOR ISSUING COMPLETION CERTIFICATE OR BECAUSE OF SOME TECHNICAL REASON SUCH CERTIFICATE IS NOT ISSUED BY JDA BUT ISSUED BY GRAM PANCHAYAT, THE CONDITION OF ISSUE OF COMPLETION CERTIFICATE BY LOC AL AUTHORITY STANDS SATISFIED AND THEREFORE EVEN IF JDA IS CONSI DERED TO BE ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 36 LOCAL AUTHORITY U/S 80-IB(10), THE CONDITION REFERR ED IN CLAUSE (A)(III) OF SECTION 8IB(10) STANDS SATISFIED. IN TH ESE FACTS AND CIRCUMSTANCES, THE LD. CIT(A) HAS RIGHTLY HELD THAT CONDITION REFERRED TO IN SECTION 80-IB(10)(A)(III) IS FULFILL ED. 10.2 WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS REGARD WHAT IS RELEVA NT TO EXAMINE IS FIRSTLY, WHEN THE HOUSING PROJECT WAS APPROVED BY THE JDA AN D SECONDLY WHEN THE HOUSING PROJECT WAS COMPLETED AND COMPLETION CE RTIFICATE ISSUED BY THE JDA. 10.3 HERE IT WOULD BE RELEVANT TO LOOK AT THE PROVI SIONS OF SECTION 80IB(10)(A)(III) WHICH PROVIDES THAT THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING P ROJECTS APPROVED BEFORE 31.03.2008 BY A LOCAL AUTHORITY SHALL BE 100 % OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESS MENT YEAR FROM SUCH HOUSING PROJECT WHERE SUCH UNDERTAKING COMMENCES DE VELOPMENT AND CONSTRUCTION OF HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION WITHIN 5 YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPR OVED BY THE LOCAL AUTHORITY. FURTHER, EXPLANATION (I) TO CLAUSE (III ) PROVIDES THAT IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJEC T IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUS ING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY. AND EXPLANATION ( II) FURTHER PROVIDES THAT THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE DATE ON WHICH THE COMPLETION CERTIFI CATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORI TY. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 37 10.4 IN THE INSTANT CASE, IN RESPECT OF KHASRA NO. 1 TO 8 & 11 TO 17 TO 217 LOCATED AT VILLAGE AJAYRAJPURA, TEHSIL SANGANER , JAIPUR, THE MEMBER SECRETARY OF BUILDING MAP COMMITTEE OF JDA HAS ISSU ED A LETTER DATED 26.08.2008 WHEREIN IN CONTEXT OF THE ASSESSEES APP LICATION DATED 26.03.2007 FOR SEEKING APPROVAL OF THE BUILDING PLA N, IT HAS BEEN STATED THAT THE APPROVAL OF THE BUILDING PLAN COMMITTEE HA S BEEN GIVEN ON 29.03.2007 AND THE APPROVED BUILDING PLAN AS WELL A S THE CONDITIONS TO BE FULFILLED FOR THE CONSTRUCTION OF BUILDING WERE STATED THEREIN. SIMILARLY, IN THE CONTEXT OF KHASRA NO. 9,10,18 AT VILLAGE NAN AKPURA ALIAS HEMAKI NAGAL, TONK ROAD JAIPUR, IN RESPECT OF THE ASSESSEE S APPLICATION DATED 26.03.2007, THE MEMBER SECRETARY OF BUILDING MAP CO MMITTEE OF JDA VIDE ITS LETTER DATED 01.10.21008 HAS STATED THAT T HE BUILDING PLAN HAS BEEN APPROVED BY THE BUILDING PLAN COMMITTEE ON 29. 03.2007. IN LIGHT OF ABOVE, IT IS CLEAR THAT RESPECT OF KHASRA NO. 1 TO 8 AND 11 TO 17 (BLOCK A TO G) AND KHASRA NO. 9,10,18 (BLOCKS H &I ),THE B UILDING PLAN COMMITTEE OF JDA HAS APPROVED THE BUILDING PLANS ON 29.03.2007. HOWEVER, THE FIRST APPROVAL HAS BEEN ISSUED ON 26.0 8.2008 AND THE SECOND APPROVAL HAS BEEN ISSUED ON 01.10.2008. ON PERUSAL OF BOTH THESE APPROVALS AND OTHER MATERIAL AVAILABLE ON REC ORD, THERE IS NOTHING TO SUGGEST WHAT CAUSED THE UNDUE DELAY ON THE PART OF JDA TO CONVEY THE APPROVAL TO THE ASSESSEE AFTER A GAP OF SO MANY MONTHS. IN ANY CASE, GIVEN THAT THE BUILDING MAPS HAVE BEEN APPROV ED ON 29.03.2007 EVEN THOUGH THE SAME HAS BEEN CONVEYED AT A LATER P OINT IN TIME TO THE ASSESSEE, IT IS CLEAR THAT THE BUILDING PLANS HAVE BEEN APPROVED BEFORE THE 31 ST DAY OF MARCH, 2008. THEREFORE, THE FIRST CONDITIO N, REQUIRING ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 38 DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE 31.03.2008 BY A LOCAL AUTHORITY, IS SATISFIED IN THE INSTANT CASE . 10.5 NOW COMING TO THE ISSUE OF COMPLETION CERTIFIC ATE ISSUED BY JDA, THE LD. AR HAS SUBMITTED THAT THE ASSESSEE HAS MOVE D AN APPLICATION FOR APPROVAL OF THE MAP OF THE HOUSING PROJECT TO JDA O N 26.03.2007 IN RESPECT OF BLOCKS A TO G AND BLOCK H& I RESPECTIVEL Y. THE JDA CONVEYED THE APPROVAL ON 26.08.2008 FOR THE BLOCKS A TO G AN D ON 01.10.2008 FOR THE BLOCK H &I AND FROM SUCH DATE OF CONVEYING THE APPROVAL, THE PERIOD OF 5 YEARS FOR COMPLETION OF THE HOUSING PROJECT EN DS ON 31.03.2014. HOWEVER, AS THE PROJECT WAS COMPLETED IN FEBRUARY, 2012, THE ASSESSEE MOVED APPLICATION ON 23.03.2012 TO JDA FOR ISSUING THE COMPLETION CERTIFICATE IN RESPECT OF BLOCKS A TO G AS WELL AS BLOCKS H & I. THEREAFTER THE COMPLETION CERTIFICATE FOR BLOCKS A TO G WAS IS SUED ON 21.03.2013 AND FOR BLOCKS H & I ON 01.08.2012. IN RESPECT OF BLOCKS F & G THE COMPLETION CERTIFICATE WAS NOT ISSUED BY JDA FOR WA NT OF ENVIRONMENTAL CLEARANCE CERTIFICATE HOWEVER, THE FACTS REMAINS TH AT THE FLATS IN THESE BLOCKS WERE OCCUPIED AND USED FOR RESIDENCE BY OWNE RS. 10.6 IN THIS REGARD, FIRSTLY, AS WE HAVE STATED ABO VE, THE HOUSING PROJECT WAS APPROVED ON 29.03.2007, THEREFORE THE P ERIOD OF FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOU SING PROJECT IS APPROVED BY THE LOCAL AUTHORITY ENDS ON 31.03.2012. HERE, WE ARE UNABLE TO ACCEDE TO THE CONTENTION OF THE LD AR THA T THE PERIOD OF FIVE YEARS SHOULD BE COUNTED FROM THE DATE OF ISSUANCE A ND COMMUNICATION OF APPROVAL (26.08.2008/1.10.2008). INFACT, THIS I S THE RATIO DECIDENDI OF THE DECISION OF HONBLE KARNATAKA HIGH COURT IN CAS E OF AKSHAY ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 39 EMINENCE DEVELOPERS (SUPRA). THE REASON FOR THE SAM E IS THAT ONCE A DATE OF APPROVAL HAS BEEN ACCEPTED FOR SATISFACTION OF THE ONE OF THE CONDITIONS OF GRANT OF APPROVAL, THE SAME DATE FORM S THE BASIS AND STARTING POINT FOR THE SATISFACTION OF THE SECOND C ONDITION WHICH TALKS ABOUT THE COMPLETION OF HOUSING PROJECT WITHIN FIVE YEARS OF END OF THE FINANCIAL YEAR IN WHICH THE PROJECT HAS BEEN APPROV ED. BOTH THESE CONDITIONS ARE INTER-CONNECTED. IN ANY CASE, ENOUGH LEEWAY HAS BEEN GIVEN BY THE STATUE ITSELF WHERE THE PERIOD OF FIVE YEARS IS COUNTED FROM THE END OF THE FINANCIAL YEAR AND NOT FROM THE DATE OF APPROVAL. EXTENDING THAT PERIOD FURTHER, IN OUR VIEW, WOULD N OT BE REASONABLE. THE ASSESSEE NEED TO BE CONSISTENT IN ITS APPROACH AND CANNOT EXPECT TO TAKE TWO DIFFERENT APPROACHES/CRITERIA FOR DEFINING THE DATE OF APPROVAL AND DATE OF COMPLETION OF THE HOUSING PROJECT. IN LIGHT OF ABOVE, THE ASSESSEE NEEDS TO SATISFY THE CONDITION THAT THE HO USING PROJECT WAS COMPLETED ON OR BEFORE 31.03.12 AND THE COMPLETION CERTIFICATE IS ISSUED BY JDA. 10.7 NOW COMING TO KHASRA NO. 9, 10, 18 (BLOCK H&I) , THE ASSESSEE HAS MOVED AN APPLICATION TO JDA ON 23.03.2012 AND THERE AFTER IN 121 ST MEETING OF JDA HELD ON 11.07.2012, A DECISION WAS T AKEN TO APPROVE THE AMENDED BUILDING PLAN AND TO ISSUE THE COMPLETION C ERTIFICATE AND THEREAFTER, ON 1.08.2012, A LETTER WAS ISSUED TO TH E ASSESSEE CONVEYING THE DECISION TAKEN IN THE MEETING HELD ON 11.07.201 2. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE BLOCKS H & I WERE EIT HER NOT COMPLETE OR THERE WERE CERTAIN DEFICIENCIES ON THE PART OF THE ASSESSEE BETWEEN THE DATE OF FILING OF THE APPLICATION AND ITS APPROVAL THEREOF IN THE MEETING HELD ON 11.07.2012. THE BLOCKS H & I ARE THEREFORE HELD TO BE COMPLETE ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 40 AS ON THE DATE OF MOVING THE APPLICATION ON 23.03.2 012 EVEN THOUGH THE APPROVAL HAS BEEN GRANTED ON 11.07.2012 AND COMPLET ION CERTIFICATE ISSUED ON 1.08.2012. 10.8 IN RESPECT OF KHASRA NO. 1 TO 8 AND 11 TO 17 ( BLOCKS A TO G), THE JDA VIDE ITS LETTER DATED 05.10.2012 HAS STATED THA T THE MATTER RELATING TO THE APPLICATION FILED BY THE ASSESSEE WAS TAKEN UP IN THE 122 ND MEETING OF BUILDING PLAN COMMITTEE HELD ON 28.08.20 12 WHEREIN THE ASSESSEE WAS ASKED TO TAKE CERTAIN ACTIONS STEPS. FIRSTLY, IT WAS STATED THAT SOLAR ENERGY EQUIPMENTS HAVE BEEN INSTALLED IN FOUR TOWERS, HOWEVER, IN RESPECT OF REMAINING 3 TOWERS, SOLAR EN ERGY EQUIPMENT NEEDS TO BE INSTALLED BEFORE THE COMPLETION CERTIFI CATE IS ISSUED BY JDA. SECONDLY, IT WAS STATED THAT THE BUILT UP AREA IS M ORE THAN 20,000 SQ. METERS AND THEREFORE, ENVIRONMENTAL CLEARANCE FROM THE ENVIRONMENTAL DEPARTMENT NEEDS TO BE PRODUCED. THIRDLY, IT WAS S TATED THAT IN ALL THE BLOCKS, 2.90 FT. COLUMNS HAVE BEEN BUILD ON THE TER RACE FOR WATER TANK WHICH WERE NOT APPROVED EARLIER. IN THIS REGARD, A N UNDERTAKING WAS SOUGHT FROM THE ASSESSEE THAT THE AREA UNDER THE SA ID COLUMNS ON THE TERRACE WILL NOT BE USED FOR HOUSING OR ANY OTHER P URPOSES. THEREAFTER, ANOTHER LETTER WAS ISSUED BY JDA ON 07.01.2013 WHER EIN THE ASSESSEE WAS AGAIN REMINDED ABOUT OBTAINING THE ENVIRONMENTA L CLEARANCE WHICH WAS STILL NOT BEEN OBTAINED AND SUBMITTED TO JDA AN D THEREAFTER, FINALLY ON 21.03.2013, THE JDA ISSUED A LETTER STATING THAT PURSUANT TO DECISION TAKEN IN THE 122 ND MEETING HELD ON 28.08.2012, THE AMENDED BUILDING PLAN AND COMPLETION CERTIFICATE FOR BLOCK A TO E IS BEING ISSUED. ON PERUSAL OF THESE DOCUMENTS WHAT IS EMERGING THAT IN THE MEETING HELD ON 28.8.2012, THE MATTER RELATING TO ASSESSEES APP LICATION DATED ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 41 23.03.2012 PERTAINING TO ALL THE 7 BLOCKS (BLOCKS A TO G) WERE TAKEN UP AND THEREAFTER THREE ISSUES AS NOTED ABOVE WERE RAI SED BY JDA WHEREBY THE ASSESSEE WAS ASKED TO TAKE THE NECESSARY CORREC TIVE STEPS AND THESE WERE TOWARDS INSTALLATION OF SOLAR ENERGY EQUIPMENT S ON THREE TOWERS, OBTAINING THE ENVIRONMENTAL CLEARANCE AND FURNISHIN G AN UNDERTAKING IN RESPECT OF NON-USAGE OF AREA BELOW THE WATER TANK C OLUMNS CONSTRUCTED ON THE TERRACE ON THESE BLOCKS. IN OTHER WORDS, EX CEPT FOR THESE THREE REQUIREMENTS, THE CONSTRUCTION IN THESE BLOCKS WERE COMPLETE IN ALL RESPECT AND THEREAFTER ON ASSESSE TAKING THE NECESS ARY CORRECTIVE STEPS, THE COMPLETION CERTIFICATE WAS FINALLY ISSUED ON 21 .03.2013 IN RESPECT OF BLOCKS A TO E. HOWEVER, AS FAR AS THE BLOCKS F AND G WERE CONCERNED, THE COMPLETION CERTIFICATE HAS NOT BEEN ISSUED BY J DA FOR WANT OF THE ENVIRONMENTAL CLEARANCE. 10.9 THE NEXT QUESTION THAT ARISES FOR CONSIDERATIO N IS WHEN IT CAN BE SAID THAT THE CONSTRUCTION OF THESE BLOCKS A TO G W ERE COMPLETE. WHETHER THE CONSTRUCTION GOT COMPLETED ON THE DATE OF APPLICATION I.E, 23.03.2012 OR ON/BEFORE THE MEETING OF JDA HELD ON 28.08.2012 OR WHEN THE COMPLETION CERTIFICATE WAS ISSUED BY JDA O N 21.03.2013 (IN RESPECT OF BLOCK A TO E). IN THIS REGARD, THE ASSE SSEE HAS SUBMITTED THAT AT THE TIME OF MOVING THE APPLICATION FOR ISSUANCE OF THE COMPLETE CERTIFICATE AS EVIDENCE BY THE ARCHITECT REPORT AS WELL AS ISSUANCE OF THE NO OBJECTION CERTIFICATE BY THE CHIEF FIRE BRIGADE OFFICER, NAGAR NIGAM, JAIPUR ALL BLOCKS WERE COMPLETED IN MARCH, 2012 ITS ELF. HOWEVER, THE JDA HAS ISSUED A LETTER DATED 08.05.2012 WHEREIN IT IS STATED THAT ON PHYSICAL INSPECTION, WORK IN RESPECT OF BLOCK A TO D IS ALMOST COMPLETE EXCEPT SOME FITTING/FINISHING AND IN RESPECT OF BLO CK E, F AND G, THE CIVIL ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 42 CONSTRUCTION WORK IS IN PROGRESS. THE ASSESSEE HAS CHALLENGED THIS LETTER OF JDA DATED 08.05.2012 STATING THAT IT DOESNT SPE CIFY THE NATURE OF CIVIL WORK WHICH IS IN PROGRESS AND SECONDLY, THIS LETTER WAS NEVER RECEIVED BY THE ASSESSEE. IN OUR VIEW, THERE ARE NOT ENOUGH MA TERIAL ON RECORD FOR US TO TAKE A VIEW IN THE MATTER. IN THE INTEREST O F JUSTICE AND FAIR PLAY, THE MATTER REQUIRE TO BE SET-ASIDE TO THE FILE OF A O FOR FRESH EXAMINATION SO THAT ALL RELEVANT FACTS AND DOCUMENTS ARE BROUGH T ON RECORD TO DETERMINE THE ACTUAL DATE OF COMPLETION OF BLOCKS A TO G. 10.10 IN LIGHT OF ABOVE, IT IS CLEAR THAT IN RESPE CT OF BOCK H & I, THE CONSTRUCTION HAS BEEN COMPLETED AS ON 31.03.2012 EV EN THOUGH THE APPROVAL HAS BEEN GRANTED ON 11.07.2012 AND COMPLET ION CERTIFICATE ISSUED BY JDA ON 1.08.2012. THE DELAY IN ISSUANCE OF COMPLETION CERTIFICATE CANNOT BE ATTRIBUTED TO THE ASSESSEE AN D THE ASSESSEE CANNOT BE PENALIZED BY WAY OF DENIAL OF TAX DEDUCTION WHIC H IT IS OTHERWISE ELIGIBLE TO AND SOLELY ON THE GROUND OF DELAY IN IS SUANCE OF COMPLETION CERTIFICATE. AS HELD BY HONBLE BOMBAY HIGH COURT IN CASE OF HINDUSTAN SAMUH AWAS LTD (SUPRA), THE EXPLANATION HAS INTRODU CED AN ELEMENT OF UNNECESSARY STRICTNESS IN THE PROVISION WHICH IS IN THE NATURE OF EXEMPTION AND NOT IN THE NATURE OF CHARGING AND THE COMPLETION OF THE HOUSING PROJECT IS A PHYSICAL ACT WHICH CAN BE DEMO NSTRATED ON THE SPOT. WE ARE ACCORDINGLY OF THE VIEW THAT IN RESPECT OF B LOCK H & I, THE ASSESSEE SATISFIES THE CONDITION OF COMPLETION OF C ONSTRUCTION BEFORE 31.03.2012. 11. WHETHER EACH BLOCK OF HOUSING COMPLEX IN THE PR OJECT IS TO BE CONSIDERED SEPARATELY OR ALL BLOCK OF THE HOUSING C OMPLEX IN THE PROJECT ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 43 IS TO BE CONSIDERED TOGETHER FOR ASCERTAINING THE D ATE OF COMPLETION OF THE CONSTRUCTION OF THE HOUSING PROJECT? 11.1 IN THIS REGARD, THE LD AR HAS SUBMITTED THAT T HE HOUSING PROJECT OF THE ASSESSEE COMPRISES OF 9 BLOCKS I.E. BLOCK A TO I. THE GRAM PANCHAYAT HAS ISSUED COMPLETION CERTIFICATE IN RESPECT OF ALL THE BLOCKS. HOWEVER, THE JDA HAS ISSUED COMPLETION CERTIFICATE IN RESPEC T OF SEVEN BLOCKS. THE COMPLETION CERTIFICATE IN RESPECT OF BLOCK F & G IS NOT ISSUED BY JDA FOR WANT OF ENVIRONMENT CLEARANCE CERTIFICATE BY THE ST ATE POLLUTION CONTROL BOARD. THEREFORE, THE ISSUE ARISES THAT IN THE ABSE NCE OF COMPLETION CERTIFICATE FROM JDA FOR BLOCK F & G, THE ENTIRE CL AIM OF DEDUCTION U/S 80-IB(10) IS TO BE DISALLOWED OR ONLY THE PROPORTIO NATE DISALLOWANCE IS TO BE MADE IN CASE THE COMPLETION CERTIFICATE ISSUED B Y GRAM PANCHAYAT IS NOT ACCEPTED. THE FACT THAT EACH BLOCK OF THE HOUSI NG PROJECT IS A PROJECT IN ITSELF IS ALSO EVIDENT FROM THE FACT THAT THE JD A ITSELF HAS ISSUED THE COMPLETION CERTIFICATE IN RESPECT OF EACH BLOCK OF THE HOUSING PROJECT AND NOT TO THE COMPLETE PROJECT ITSELF. THEREFORE, THE ASSESSEE IS ENTITLED FOR DEDUCTION IN RESPECT OF THAT BLOCK OF THE HOUSING P ROJECT IN RESPECT OF WHICH COMPLETION CERTIFICATE HAS BEEN ISSUED. FOR T HIS RELIANCE IS PLACED IN CASE OF VISWAS PROMOTERS PRIVATE LIMITED V. ACIT 81 DTR 68 (MAD.) (PB 37-38). IN THIS CASE IT WAS HELD THAT WITHIN A COMPOSITE HO USING PROJECT, WHERE THERE ARE ELIGIBLE AND INELIGIBLE UN ITS, THE ASSESSEE CAN CLAIM DEDUCTION IN RESPECT OF ELIGIBLE UNITS IN THE PROJECT AND EVEN WITHIN THE BLOCK, THE ASSESSEE IS ENTITLED TO CLAIM PROPOR TIONATE RELIEF IN THE UNITS SATISFYING THE EXTENT OF THE BUILT UP AREA. I N THIS CASE THE ASSESSEE COMPLETED FOUR HOUSING PROJECTS IN THE CITY OF MADU RAI. OUT OF THESE, IN TWO OF THE PROJECTS, THE ASSESSEE CONSTRUCTED FLATS EXCEEDING 1500 SQ. FT. AND ALSO FLATS OF LESS THAN 1500 SQ.FT IN AREA. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80-IB(10) OF THE INCOME-TAX ACT, 1961, IN RESPECT OF FLATS WHICH HAD AREA MEASURING LESS THAN 1500 SQ. FT. THE ASSESSING OFFICER DENIED THE DEDUCTION BECAUSE THE HOUSING PROJECT COMPRISED RESIDENTIAL UNITS EXCEEDING 1500 SQ. FT. THE COMMISSIONER (APPEALS) ALLOWED THE DEDUCTIONS UNDER SECTION 80-I B(10) IN RESPECT OF THE RESIDENTIAL UNITS WITH AN AREA OF LESS THAN 150 0 SQ. FT. ON APPEAL BY THE DEPARTMENT, THE TRIBUNAL ALLOWED THE APPEAL BY HOLDING THAT THE ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 44 ELIGIBILITY CONDITIONS UNDER SECTION 80-IB ARE THAT THE BUILT-UP AREA SHOULD NOT EXCEED 1500 SQ. FT. IN THE CONTEXT OF CITIES OT HER THAN DELHI AND MUMBAI AND THE PROFITS MUST BE DERIVED IN THE PREVI OUS YEAR FROM THE HOUSING PROJECT. THIS RESTRICTION IS APPLICABLE FOR THE ENTIRE PROJECT. IF SOME OF THE RESIDENTIAL UNITS OF THE PROJECT COMPRI SED AREA EXCEEDING THE PRESCRIBED LIMIT, THE BENEFIT COULD NOT BE EXTE NDED TO THE PROJECT. ON FURTHER APPEAL, HONBLE COURT HELD THAT WITHIN A CO MPOSITE HOUSING PROJECT WHERE THERE ARE ELIGIBLE AND INELIGIBLE UNI TS, THE ASSESSEE CAN CLAIM DEDUCTION IN RESPECT OF ELIGIBLE UNITS IN THE PROJECT AND EVEN WITHIN THE BLOCK, THE ASSESSEE IS ENTITLED TO CLAIM PROPOR TIONATE RELIEF IN THE UNITS SATISFYING THE EXTENT OF THE BUILT UP AREA. FURTHER, GUJARAT HIGH COURT IN CASE OF ITO VS. SAKET CORPORATION (2015) 234 TAXMAN 435 WHERE ASSESSEE CLAIMED DEDUCTION U/S 80-IB WITH RES PECT TO HOUSING PROJECT CONSISTING OF 43 UNITS WHICH WAS DISALLOWED ON GROUND THAT BUILDING USE (BU) PERMISSION AND COMPLETION CERTIFI CATE WAS GRANTED ONLY WITH RESPECT TO 20 UNITS WITHIN A PERIOD OF FO UR YEARS FROM DATE OF APPROVAL OF PROJECT BY LOCAL AUTHORITY AND NOT WITH RESPECT TO ENTIRE HOUSING PROJECT CONSISTING OF 43 UNITS, IT WAS HELD THAT SINCE ASSESSEE HAD COMPLETED CONSTRUCTION OF ALL 43 UNITS AND HAD APPLIED FOR BU PERMISSION/COMPLETION CERTIFICATE WITHIN PRESCRIBED TIME LIMIT, IT WAS ENTITLED TO DEDUCTION U/S 80-IB(10) NOTWITHSTANDING FACT THAT BU PERMISSION WAS GRANTED WITH RESPECT TO 20 UNITS ONL Y. IN VIEW OF THE ABOVE, THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80-IB BY THE AO ON THIS GROUND IS INCORRECT. IN ANY CASE, THE LD. CIT(A) AFTER CONSIDERING THE ENTIRE EVIDENCE HAS CONCLUDED THAT ALL THE BLOCKS OF THE HOUSING PROJECT WERE COMPLETED BEFORE 31.03.2012 AN D THEREFORE, HE HAS RIGHTLY ALLOWED THE ENTIRE CLAIM OF DEDUCTION U /S 80-IB. 11.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUE D THE MATERIAL AVAILABLE ON RECORD. THE MADRAS HIGH COURT IN CASE OF VISWAS PROMOTERS PRIVATE LIMITED (SUPRA) IN THE CONTEXT OF CONDITION RELATING TO BUILT-UP AREA NOT EXCEEDING 1500 SQ. FT HAS HELD THAT WITHIN A COMPOSITE HOUSING PROJECT WHERE THERE ARE ELIGIBLE AND INELIGIBLE UNI TS, THE ASSESSEE CAN ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 45 CLAIM DEDUCTION IN RESPECT OF ELIGIBLE UNITS IN THE PROJECT AND EVEN WITHIN THE BLOCK, THE ASSESSEE IS ENTITLED TO CLAIM PROPOR TIONATE RELIEF IN THE UNITS SATISFYING THE EXTENT OF THE BUILT UP AREA. NO CONTRARY AUTHORITY HAS BEEN BROUGHT TO THE NOTICE OF THE BENCH. IN OU R VIEW, SIMILAR ANALOGY CAN BE DRAWN IN RESPECT OF HOUSING PROJECT CONSISTING OF NUMBER OF BLOCKS WHERE THE CONSTRUCTION HAS BEEN COMPLETED AND COMPLETION CERTIFICATE ISSUED IN RESPECT OF SOME OF THE BLOCKS . AS WE HAVE NOTED ABOVE, THE CONSTRUCTION HAS BEEN COMPLETED AND COMP LETION CERTIFICATE HAS BEEN ISSUED BY JDA IN RESPECT OF BLOCK H & I. ACCORDINGLY, THE ASSESSEE SHALL BE ELIGIBLE TO CLAIM PROPORTIONATE D EDUCTION U/S 80-IB(10) IN RESPECT OF BLOCK H & I. 12. WHETHER WHERE SOME OF THE FLATS IN A BLOCK ARE NOT FULFILLING THE CONDITION OF ALLOTMENT OF THE FLAT, ENTIRE DEDUCTIO N IS TO BE DISALLOWED OR THE CLAIM IS TO BE RESTRICTED PROPORTIONATELY? 12.1 IN THIS REGARD, THE LD AR HAS SUBMITTED THAT: (A) THE AO HAS OBSERVED THAT ASSESSEE HAS ALLOTTED MORE THAN ONE FLAT TO THE PERSONS COVERED UNDER PROVISIONS OF SEC. 80- IB(10)(E) & (F). IN THE SHOW CAUSE NOTICE, HE HAS GIVEN REFERENCE TO SIX INSTANCES. THE ASSESSEE EXPLAINED THAT OUT OF THESE SIX CASES EXCEPT IN CASE OF M/S RAJASTHAN PATRIKA PVT. LTD., ALLOTMENTS WERE MA DE PRIOR TO INSERTION OF CLAUSE (E) & (F). IT WAS FURTHER STATE D THAT EVEN IN THESE FIVE CASES, ULTIMATELY NOT MORE THAN ONE FLAT IS AL LOTTED OR TWO UNITS WERE COMBINED TO MAKE ONE UNIT, AREA OF WHICH DOES NOT EXCEEDS 1500 SQ. FT. THE AO HOWEVER, HAS NOT ACCEPTED THE E XPLANATION GIVEN BY THE ASSESSEE. THE AO FURTHER OBSERVED THAT CERTAIN FLATS WERE ALLOTTED TO HUSBAND AND WIFE AND THEREFORE CON DITION OF SECTION 80-IB(10)(F) IS VIOLATED. HE THEREFORE HELD THAT DEDUCTION OF SEC. 80-IB(10) IS NOT AVAILABLE AND THEREFORE DENIE D THE CLAIM OF DEDUCTION. (B) IT MAY BE NOTED THAT IN ALL, AO HAS REFERRED TO 8 I NSTANCES WHICH ACCORDING TO HIM VIOLATES THE CONDITION OF SECTION 80-IB(10)(F). THE ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 46 EXPLANATION OF THE ASSESSEE IN RESPECT OF THESE 8 I NSTANCES IS AS UNDER:- S.N . FLAT NO. NAME OF THE CUSTOMER EXPLANATION 1 C-801 C-802 R. P. SAINI THE FLAT WAS BLOCKED TENTATIVELY FOR HIS PROSPECTIVE CUSTOMER, WHICH WAS CANCELLED. NO FLAT HAS BEEN ALLOTTED TO THIS PARTY. 2 F-902 F-903 LATA SHARMA THE FLAT NO. 902 WAS BLOCKED BY LATA SHARMA BUT LATER ON CANCELLED. THUS, ONLY ONE FLAT WAS ALLOTTED TO HER. 3 B-801 C-403 B-805 B-808 PRAKASH DEVI THE FLAT WAS BLOCKED TENTATIVELY FOR HIS PROSPECTIVE CUSTOMER, WHICH WAS CANCELLED. NO FLAT HAS BEEN ALLOTTED TO THIS PARTY. FURTHER THESE FLATS WERE BOOKED PRIOR TO INSERTION OF THE CLAUSE (F) OF SECTION 80-IB(10). 4 H-507 H-506 S.S. SHARMA SADHNA SHARMA BOTH THE UNITS HAVE BEEN SOLD AS ONE UNIT ON THE REQUEST OF THE PARTY. THE TOTAL OF BOTH THE UNITS DOES NOT EXCEED 1500 SQ. FT. FURTHER, THE FLATS WAS ALLOTTED PRIOR TO INSERTION OF CLAUSE (F) OF SECTION 80- ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 47 IB(10). 5 D-410 D-401 H.L. MITTAL USHA MITTAL D-410 (RECEIPT NO.1551) IS ALLOTTED TO KAPIL MITTAL WHO IS MAJOR SON OF USHA MITTAL AND THEREFORE REQUIREMENT OF SECTION 80-IB(10)(F) IS NOT DEFEATED. 6 F-702 D-508 RASHMI JAIN AMIT KUMAR JAIN BOTH THE FLATS WERE ALLOTTED PRIOR TO INSERTION OF CLAUSE (F) OF SECTION 80-IB(10). 7 C-303 C-302 ANURADHA GOYAL J.P. GOYAL BOTH THE FLATS WERE ALLOTTED PRIOR TO INSERTION OF CLAUSE (F) OF SECTION 80-IB(10). 8 C-301 D-302 VINOD KUMAR CHOMAL MANJU SHARMA C-301 IS PURCHASED BY VINOD KR. CHOMAL & D-302 IS PURCHASED BY NAND KISHORE SHARMA AND NOT BY MRS. MANJU SHARMA. (C) FROM THE ABOVE TABLE IT CAN BE NOTED THAT IN NONE O F THE ABOVE CASES, MORE THAN ONE FLAT (EXCEEDING 1500 SQ. FT.) HAS BEEN ALLOTTED TO THE SAME PERSON OR TO THE SPOUSE OR MINOR CHILD OF SUCH PERSON. FURTHER, EXCEPT IN CASE OF S.S SHARMA AND H.L MITTA L, THE FLATS WERE ALLOTTED PRIOR TO INSERTION OF CLAUSE (F) W.E.F. 01 .04.2010. IT MAY BE NOTED THAT THE EMPHASIS OF CLAUSE (F) IS THAT TWO F LATS SHOULD NOT BE ALLOTTED TO THE SAME INDIVIDUAL OR TO THE SPOUSE OR MINOR CHILDREN OF SUCH INDIVIDUAL. THEREFORE, EVEN IF THE BOOKING AMO UNT IS RECEIVED FROM SUCH PERSON IN RESPECT OF TWO OR MORE FLATS BU T ULTIMATELY NOT MORE THAN ONE FLAT IS ALLOTTED TO SUCH PERSON, THE CONDITION OF CLAUSE (F) WOULD NOT BE VIOLATED. FURTHER, THIS CLA USE INSERTED FROM 01.04.2010 HAS PROSPECTIVE EFFECT. THEREFORE, WHERE THE FLATS ARE ALLOTTED IN RESPECT OF BOOKING WHICH IS MADE PRIOR TO 01.04.2009, ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 48 CLAUSE (F) WOULD NOT APPLY. GUJARAT HIGH COURT IN C ASE OF MANNAN CORPORATION VS. ACIT (2013) 214 TAXMAN 373 AND BOMB AY HIGH COURT IN CASE OF CIT VS. JOGANI CONSTRUCTIONS LTD. 217 TAXMAN 95 (MAG.) WITH REFERENCE TO AMENDMENT MADE TO SECTION 80-IB(10)(D) W.E.F. 01.04.2005 HELD THE SAME TO BE PROSPECTIVE I N NATURE FOR THE PURPOSE OF CLAIM OF DEDUCTION BY ASSESSEE U/S 80-IB (10). ON THE SAME ANALOGY, INSERTION OF CLAUSE (E) AND (F) W.E.F . 01.04.2010 ARE PROSPECTIVE IN NATURE AND THEREFORE IF MORE THAN ON E FLAT IS BOOKED IN THE NAME OF SAME INDIVIDUAL OR IN THE NAME OF SP OUSE OR MINOR CHILDREN PRIOR TO 01.04.2009, THE CONDITION OF CLAU SE(E)/(F) CANNOT BE APPLIED ON THE SAME. (D) OTHERWISE ALSO, IF THERE IS ANY VIOLATION OF THE CO NDITIONS SPECIFIED IN CLAUSE (E) & (F) OF SECTION 80-IB(10), THE DEDUCTIO N CANT BE DISALLOWED IN ENTIRETY BUT SHOULD BE RESTRICTED ONL Y WITH REFERENCE TO THOSE FLATS WHERE THERE IS A VIOLATION OF THE CONDI TION. FOR THIS, RELIANCE IS PLACED ON THE FOLLOWING CASES:- SJR BUILDERS VS. ASS. CIT 3 ITR 569 (TRIB.) (BANG.) IN THIS CASE THE ASSESSEE WAS ENGAGED IN REAL ESTAT E AND CONSTRUCTION BUSINESS. FOR THE ASSESSMENT YEAR 2005 -06, IT CLAIMED DEDUCTION UNDER SECTION 80-IB(10) AMOUNTING TO RS. 2,02,08,690 BEING 100 PERCENT OF THE PROFIT IN RESPECT OF A PRO JECT. THE DEDUCTION WAS CLAIMED BY THE ASSESSEE ON THE GROUND THAT EACH DWELLING UNIT/FLAT CONSTRUCTED IN THE PROJECT WAS L ESS THAN 1500 SQ. FT. PER UNIT. THERE WAS A SURVEY ACTION UNDER SECTI ON 133A ON FEBRUARY 8, 2007 WHICH COVERED THE PROJECT SITES AS WELL. IT WAS FOUND THAT SOME OF THE RESIDENTIAL UNITS MEASURED M ORE THAN 1500 SQ. FT. THE ASSESSING OFFICER HELD THAT THE ASSESSE E WAS NOT ENTITLED TO DEDUCTION UNDER SECTION 80-IB(10). THIS WAS CONF IRMED BY THE COMMISSIONER (APPEALS). ON APPEAL TO THE TRIBUNAL I T WAS HELD THAT MERELY BECAUSE SOME FLATS WERE LARGER THAN 1500 SQ. FT., THE ASSESSEE WOULD NOT LOSE THE BENEFIT IN ITS ENTIRETY . ONLY WITH ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 49 REFERENCE TO THE FLATS WHICH HAD MORE THAN THE PRES CRIBED AREA, THE ASSESSEE WOULD LOSE THE BENEFIT. SREEVATSA REAL ESTATE PVT. LIMITED 41 DTR 497 (CHENNAI.) (TR IB.) THE FACT OF THE CASE IS THAT ASSESSEE WAS ENGAGED I N THE BUSINESS OF PROPERTY DEVELOPMENT. IT OBTAINED APPROVAL FROM DY. DIRECTOR TOWN PLANNING FOR CONSTRUCTION ON THE PLOTS. THE BU ILT UP AREA OF ALL THE HOUSES WAS NOT LESS THAN 1500 SQ. FT. AND THERE FORE ASSESSEE CLAIMED DEDUCTION U/S 80-IB(10) ON PRO RATA BASIS. THE AO DENIED THE CLAIM BY GIVING THE REASON THAT PROJECT WAS NOT EXCLUSIVELY FOR UNITS WITH BUILT UP AREA LESS THAN 1500 SQ. FT. AND CERTIFICATE FROM VILLAGE ADMINISTRATIVE OFFICER (VAO) COULD NOT BE A CCEPTED SINCE VAO WAS NOT THE AUTHORITY TO ISSUE APPROVAL FOR HOU SING PROJECT. CIT(A) CONFIRMED THE ACTION OF THE AO. ON FURTHER APPEAL THE TRIBUNAL ALLOWED THE CLAIM OF ASSESSEE BY HOLDING THAT SECTION 80-IB(10) REQUIRES APPROVAL BY A LOCAL AUTHORITY. SUCH LOCAL AUTHORITY IS NOT DEFINED ANYW HERE. IT CANT BE SAID THAT VAO OR DY. DIRECTOR OF TOWN PLANNING IS N OT A LOCAL AUTHORITY. THEREFORE, ASSESSEE HAVING OBTAINED APPR OVAL FROM DY. DIRECTOR TOWN PLANNING FOR CONSTRUCTION IS THE APPR OVAL OF LOCAL AUTHORITY. FURTHER, ASSESSEE IS ENTITLED FOR DEDUCT ION U/S 80-IB(10) PRO RATA FOR HOUSING UNITS HAVING BUILT UP AREA LES S THAN 1500 SQ. FT. SANGHVI AND DOSHI ENTERPRISE V. INCOME-TAX OFFICER SRI MAHALAKSHMI HOUSING V. INCOME-TAX OFFICER SRI MAHALAKSHMI BUILDERS V. ITO 18 ITR 608 (TRIB.)( CHENNAI) IN THESE CASES, BY FOLLOWING THE DECISION OF CALCUT TA HIGH COURT IN CASE OF CIT VS. BENGAL AMBUJA HOUSING DEVELOPMENT L IMITED IN I.T.A.NO.458 OF 2006 DATED 5 JANUARY 2007, IT WAS H ELD THAT A PRO RATA DEDUCTION IS PERMISSIBLE U/S 80-IB WHERE SOME RESIDENTIAL UNITS EXCEEDS 1500 SQ. FT. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 50 SREEVATSA REAL ESTATE P. LIMITED 41 DTR 497 (CHENNA I)(TRIB.) IN THIS CASE IT WAS HELD THAT WHERE THE BUILT UP AR EA OF SOME OF THE HOUSING UNITS ARE MORE THAN 1500 SQ. FT., ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80-IB(10) ON PRO RATA FOR HOUSING UNI TS HAVING BUILT UP AREA LESS THAN 1500 SQ. FT. (E) THE LD. CIT(A) AFTER CONSIDERING THESE EVIDENCES AT PG 34 OF THE ORDER HAS RIGHTLY HELD THAT ASSESSEE HAS NOT VIOLAT ED REQUIREMENT OF SEC. 80-IB(10)(F). 12.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUE D THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, REGARDING THE CONTEN TION OF THE LD AR THAT THE CLAUSES (E) AND (F) INSERTED BY THE FINANCE ACT , 2009 W.E.F 1.04.2010 IS PROSPECTIVE IN NATURE, WE REFER TO NOTES TO CLAU SES AND MEMORANDUM EXPLAINING THE FINANCE BILL, 2009. THE NOTES TO CL AUSES PROVIDES THAT THE PROPOSED AMENDMENT SEEKS TO INSERT TWO NEW CON DITIONS BY WAY OF TWO NEW CLAUSES NAMELY CLAUSE ( E ) WHICH PROPOSES TO PROVIDE THAT NOT MORE THAN ONE RESIDENTIAL UNIT IS ALLOTTED TO ANY P ERSON NOT BEING AN INDIVIDUAL AND CLAUSE ( F ) WHICH PROPOSES TO PROVIDE THAT IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTT ED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UNIT IN SUCH HOUSI NG PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS : ( I ) THE SPOUSE OR MINOR CHILDREN OF SUCH INDIVIDUAL, ( II ) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDU AL IS THE KARTA, ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 51 ( III ) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOU SE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST APRIL, 201 0 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YE AR 2010-11 AND SUBSEQUENT YEARS. 12.3 THE MEMORANDUM EXPLAINING THE FINANCE BILL 200 9 PROVIDES THAT FURTHER, THE OBJECTIVE OF THE TAX BENEFIT FOR HOUS ING PROJECTS IS TO BUILD HOUSING STOCK FOR LOW AND MIDDLE INCOME HOUSEHOLDS. THIS HAS BEEN ENSURED BY LIMITING THE SIZE OF THE RESIDENTIAL UNI T. HOWEVER, THIS IS BEING CIRCUMVENTED BY THE DEVELOPER BY ENTERING INTO AGRE EMENT TO SELL MULTIPLE ADJACENT UNITS TO A SINGLE BUYER. ACCORDIN GLY, IT IS PROPOSED TO INSERT NEW CLAUSES IN THE SAID SUB-SECTION TO PROVI DE THAT THE UNDERTAKING WHICH DEVELOPS AND BUILDS THE HOUSING P ROJECT SHALL NOT BE ALLOWED TO ALLOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSING PROJECT TO THE SAME PERSON, NOT BEING AN INDIVIDUAL, AND WHERE THE PERSON IS AN INDIVIDUAL, NO OTHER RESIDENTIAL UNIT IN SUCH HOUSI NG PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSON : ( I ) SPOUSE OR MINOR CHILDREN OF SUCH INDIVIDUAL; ( II ) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDU AL IS THE KARTA; ( III ) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOU SE OR MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA. THIS AMENDMENT WILL TAKE EFFECT FROM THE 1ST DAY OF APRIL, 2010 AND SHALL ACCORDINGLY, APPLY IN RELATION TO ASSESSMENT YEAR 2 010-11 AND SUBSEQUENT YEARS. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 52 12.4 IN LIGHT OF ABOVE, CLAUSES (E) AND (F) ARE ADD ITIONAL AND NEW CONDITIONS WHICH HAVE BEEN BROUGHT ON THE STATUE BY THE FINANCE ACT, 2009 TO AID AND SUPPLEMENT THE EXISTING CONDITION O F LIMITING THE SIZE OF THE RESIDENTIAL UNIT (LESS THAN 1500 SQ. FT) WITH A N ULTIMATE OBJECTIVE OF ENSURING TAX BENEFIT FOR HOUSING PROJECTS FOR LOW A ND MIDDLE INCOME HOUSEHOLDS. HERE WE REFER TO THE DECISION OF THE HO NBLE GUJARAT HIGH COURT IN CASE OF MANAN CORPN. VS. ASSISTANT COMMISS IONER OF INCOME- TAX, CIRCLE-5 [2013] 29 TAXMANN.COM 15 (GUJ.) WHERE IN THE CONTEXT OF AMENDMENT BY WAY OF INSERTION OF CLAUSE (D) TO SECT ION 80IB(10), THE HONBLE HIGH COURT HAS HELD THAT THE CRITERIA TO HO LD THE AMENDMENT IN QUESTION RETROSPECTIVE ARE ABSENT AS THERE IS NO EX PLICIT AND SPECIFIC WORDING EXPRESSING RETROSPECTIVITY AND EVEN IF IT I S ASSUMED FOR THE SAKE OF ARGUMENTS THAT THE SAME IS TO BE READ BY IMPLICA TION, THE SAME DOES NOT APPEAR TO BE REASONABLE BUT, IN FACT EMERGES TO BE HARSH AND UNREASONABLE WHEN IT COMES TO IMPLEMENTATION. DRAW ING AN ANALOGY IN THE INSTANT CASE, WHERE THE ALLOTMENT OF THE FLATS HAS ALREADY BEEN DONE PRIOR TO 1.04.2009, IT WOULD BE UNREASONABLE TO EXP ECT THE BUILDER TO CANCEL SUCH ALLOTMENT AND REFUND THE AMOUNT OR FORF EIT THE TAX BENEFIT ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 53 FOR THE NON-FULFILLMENT OF SUCH CONDITIONS WHICH EI THER OF THE PARTIES WERE NOT AWARE AT THE TIME OF ALLOTMENT OF THE FLATS. T HOUGH THE OBJECTIVE OF THESE CONDITIONS ARE TO AID AND SUPPLEMENT THE EXIS TING CONDITIONS, AT THE SAME TIME, THE SAME CANNOT BE READ TO APPLY RET ROSPECTIVELY IN ABSENCE OF ANY EXPLICIT AND SPECIFIC WORDING EXPRES SING RETROSPECTIVITY AND ALSO ON GROUND OF REASONABLENESS. THEREFORE, T HE CLAUSES (E) AND (F) SHALL APPLY IN RESPECT OF ALLOTMENT MADE ON OR AFTER 1.04.2009. 12.5 REGARDING THE SECOND CONTENTION OF THE LD AR T HAT WHERE THERE IS STILL ANY VIOLATION OF THE CONDITIONS SPECIFIED IN CLAUSE (E) & (F) OF SECTION 80-IB(10), THE DEDUCTION CANT BE DISALLOWED IN ENT IRETY BUT SHOULD BE RESTRICTED ONLY WITH REFERENCE TO THOSE FLATS WHERE THERE IS A VIOLATION OF THE CONDITION. THE DECISION OF HONBLE MADRAS HIGH COURT IN CASE OF VISHWAS PROMOTERS PRIVATE LIMITED AND VARIOUS OTHER DECISIONS OF THE COORDINATE BENCHES REFERRED SUPRA SUPPORT THE CONTE NTIONS OF THE LD AR. WE AGREE WITH THE CONTENTIONS OF THE LD AR AND ARE OF THE VIEW THAT WHERE THERE IS ANY VIOLATION OF THE CONDITIONS SPEC IFIED IN CLAUSE (E) & (F) OF SECTION 80-IB(10), THE DEDUCTION CANT BE DISALL OWED IN ENTIRETY BUT SHOULD BE RESTRICTED ONLY WITH REFERENCE TO THOSE F LATS WHERE THERE IS A VIOLATION OF THE SAID CONDITIONS. ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 54 12.6 IN LIGHT OF ABOVE DISCUSSIONS, WHERE THE ALLOTMENT OF FLATS HAS BEEN MADE PRIOR TO 1.4.2009, THE ASSESSEE SHALL BE ELIGIBLE TO CLAIM THE TAX DEDUCTION IN RESPECT OF SUCH FLATS EVEN IF THERE IS VIOLATION OF CLAUSE (E) & (F) OF SECTION 80IB(10) OF THE ACT. HOWEVER, WHERE THE ALLOTMENTS OF FLATS HAVE BEEN MADE AFTER 1.4.20 09, THE ASSESSEE WILL NECESSARILY BE REQUIRED TO DEMONSTRAT E THE SATISFACTION OF CLAUSES (E) AND (F) OF SECTION 80IB (10) OF THE ACT. ON PERUSAL OF ASSESSMENT ORDER, IT IS NOTED THAT CO MPLETE DETAILS OF ALLOTEES WERE NOT FURNISHED BEFORE THE AO AND THE A O BASED ON LIMITED INFORMATION PROVIDED BY THE ASSESSEE, HAS I DENTIFIED CERTAIN CASES WHERE VIOLATION OF ABOVE SAID CONDITIONS HAVE BEEN NOTED. THE ASSESSEE HAS RESPONDED TO THESE LIMITED CASES A ND EVEN LD CIT(A) HAS UPHELD THE CONTENTION OF THE ASSESSEE TH AT THE ALLOTMENT HAS EITHER NOT BEING MADE OR BOOKING OF F LATS HAS HAPPENED PRIOR TO INSERTION OF CLAUSE (F) OF SECTIO N 80IB(10) OF THE ACT IN THESE LIMITED CASES. IN OUR VIEW, THE LEGIS LATURE HAS USED THE EXPRESSION ALLOTMENT AND NOT THE EXPRESSION BOOK ING OF THE RESIDENTIAL UNIT WHICH PRECEDE THE ALLOTMENT OF RES IDENTIAL UNIT AS GENERALLY UNDERSTOOD IN THE HOUSING SECTOR. UNLESS , IN A GIVEN CASE, WHERE THE BOOKING AND ALLOTMENT ARE SAME AS D EMONSTRATED THROUGH THE CONTRACTUAL UNDERSTANDING BETWEEN THE B UILDER AND THE ALLOTTEE OF THE RESIDENTIAL UNIT, IT WOULD NOT BE C ORRECT TO USE THESE TERMS INTER-CHANGEABLY. IN LIGHT OF ABOVE DIRECTIO NS, WE ACCORDINGLY SET-ASIDE THE MATTER TO THE FILE OF THE AO TO EXAMINE THE ALLOTMENT OF FLATS MADE BY THE ASSESSEE IN ENTI RETY AND EXAMINE ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 55 THE SATISFACTION OF CONDITIONS UNDER CLAUSE (E) AND CLAUSE (F) OF SECTION 80IB(10) OF THE ACT. 12.7 IN LIGHT OF ABOVE DISCUSSIONS AND TAKING INTO CONSIDERATION THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASES IN CLUDING THE ARGUMENTS AND LEGAL AUTHORITIES QUOTED BEFORE US, THE REVENUE S APPEAL FOR BOTH THE YEARS IS PARTLY ALLOWED WITH ABOVE DIRECTIONS F OR STATISTICAL PURPOSES. ASSESSEES C.O. NO. 39/JP/2015. 13. IN ASSESSEES CROSS OBJECTION FOR AY 2009-10, T HE ASSESSEE HAS CHALLENGED THE ACTIONS OF THE LD CIT (APPEALS) IN U PHOLDING THE VALIDITY OF ASSESSMENT FRAMED U/S 147 OF THE ACT AND HAS RELIED UPON THE WRITTEN SUBMISSIONS MADE BEFORE THE LD CIT(A). ON PERUSAL OF RECORDS, IT IS NOTED THAT THE ASSESSMENT WAS REOPENED WITHIN THE P ERIOD OF 4 YEARS BASIS THE COMPLETION OF ASSESSMENT FOR AY 2010-11 W HERE THE ASSESSEES CLAIM UNDER SECTION 80IB(10) WAS DISALLOWED. THE A SSESSEE WAS PROVIDED COPY OF REASONS RECORDED FOR REOPENING AND AFTER DISPOSING OFF THE ASSESSEES OBJECTIONS, THE IMPUNGED REASSESSMEN T ORDER HAS BEEN PASSED BY THE AO. THE LD CIT(A) HAS UPHELD THAT TH E AO HAS SUFFICIENT MATERIAL EVIDENCE/INFORMATION PRIOR TO ISSUANCE OF NOTICE UNDER SECTION ITA NO.417&418/JP/2015 D.C.I.T VS. M/S GURU PRAGYA INFRA (P) LTD., JAIPUR 56 148 AND RELYING UPON THE DECISION OF THE HONBLE SU PREME COURT DECISION IN CASE OF RAYMOND WOOLLEN MILLS, HAS UPHELD THE AC TION OF AO IN REOPENING OF ASSESSMENT U/S 147 OF THE ACT. WE SEE NO REASON TO INTERFERE WITH THE ORDER OF LD CIT(A) AND HENCE, TH E CROSS-OBJECTION FILED BY THE ASSESSEE IS REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/01/20 17. SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24 /01/2017. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE D.C.IT, CIRCLE-2, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S GURU PRAGYA INFRA(P) LTD., JAIP UR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 417&418/JP/2015} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR
Other Referred Cases
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Laws Referred To
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1:1 Consultation on SME Listing
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1:1 Consultation on Business Valuations
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1:1 Consultation on Startup Compliance
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Startup Dissolution Resolution
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Research Collaboration Agreement
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