KASTURI TUSHAR SHELTORS (AOP) PUNE, Pune V. ITO, Ward 2(2), Pune, Pune

ITA 431/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4317 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Assessee Lawyers: V L JAIN
• Keywords: Additional evidence; Reasonable cause; Competent authority
• Section: 133A; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 1465/M/2009 (ASSESSMENT YEAR 2006-07) KASTURI TUSHAR SHELTERS (AOP), SATSANG, OFFICE NO.4, SADHU WASWANI CHOWK, PUNE-411001 PAN NO.AAAAK 3731H .. APPELLANT VS. ACIT, RANGE-5, PUNE .. RESPONDENT ITA NO. 667/PN/2012 (ASSESSMENT YEAR 2005-06) KASTURI TUSHAR SHELTERS (AOP), SATSANG, OFFICE NO.4, SADHU WASWANI CHOWK, PUNE-411001 PAN NO.AAAAK 3731H .. APPELLANT VS. ACIT, CIRCLE-5, PUNE .. RESPONDENT ITA NO. 431/PN/2011 (ASSESSMENT YEAR 2007-08) KASTURI TUSHAR SHELTERS (AOP), SATSANG, OFFICE NO.4, SADHU WASWANI CHOWK, PUNE-411001 PAN NO.AAAAK 3731H .. APPELLANT VS. ITO, WARD-2(2), PUNE .. RESPONDENT ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : SHRI S.K. SINGH DATE OF HEARING : 10-06-2013 DATE OF PRONOUNCEMENT : 31-07-2013 2 ORDER PER R.K. PANDA, AM : THE ABOVE 3 APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE SEPARATE ORDERS OF THE CIT(A) RELATING TO A.YS. 200 6-07, 2005-06 & 2007-08 RESPECTIVELY. SINCE IDENTICAL ISSUES ARE I NVOLVED IN ALL THESE APPEALS, THEREFORE, FOR THE SAKE OF CONVENIENCE ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER ITA NO.1465/M/2009 (A.Y. 2006-07) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE AOP WAS ENGAGED IN THE DEVELOPMENT AND SALE OF RESIDENTIAL PROJECT AT PUNE IN RESPECT OF WHICH THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.4,73,50,870/- U/S 80IB(10) OF THE INCOME TAX ACT. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE PROJECT WAS COMMENCED ON 27-8-2002 I.E. BEFORE 1-4-2004 AND THE REFORE, AS PER PROVISIONS OF SECTION 80IB(10)(A)(I) THIS PROJECTS WAS REQUIRED TO BE COMPLETED BEFORE 31-3-2008. HE ALSO OBSERVED THAT AS PER EXPLANATION 2 BELOW SECTION 80IB(10)(A), THE DATE OF COMPLETION O F CONSTRUCTION OF THE HOUSING PROJECT IS TO BE TAKEN TO BE THE DATE ON WH ICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS I SSUED BY THE LOCAL AUTHORITY. IN ORDER TO VERIFY WHETHER THE CONSTRUC TION OF THE PROJECT WAS COMPLETE AS ON 31-3-2008 AS PER NECESSARY COMPLETIO N CERTIFICATE OF THE LOCAL AUTHORITY, A SURVEY U/S 133A WAS CONDUCTED BY THE ASSESSING OFFICER ON 2-6-2008 WHEREIN IT WAS FOUND THAT THE P ROJECT IN RESPECT OF WHICH DEDUCTION U/S 80IB(10) HAS BEEN CLAIMED, HAD NOT BEEN COMPLETED AS ON 31-3-2008 AS THE LOCAL AUTHORITY HAD NOT GIVE N THE NECESSARY 3 COMPLETION CERTIFICATE. AT THE TIME OF SURVEY, AS WELL AS DURING ASSESSMENT PROCEEDINGS, IT WAS STATED BY THE ASSESS EE THAT THE LOCAL AUTHORITY HAD NOT ISSUED THE COMPLETION CERTIFICATE DUE TO MANDATE FROM STATE GOVERNMENT TO STAY ISSUE OF COMPLETION CERTIF ICATE. HOWEVER, ON BEING REQUIRED BY THE ASSESSING OFFICER TO SUBSTANT IATE ITS CLAIM, THE ASSESSEE EXPRESSED ITS INABILITY TO FURNISH ANY EVI DENCE IN THIS REGARD. HOWEVER, IT WAS CONTENDED BY THE ASSESSEE THAT THE CONSTRUCTION OF THE PROJECT WAS COMPLETE BEFORE TIME AND POSSESSION OF THE RESIDENTIAL UNITS HAD BEEN HANDED OVER TO THE RESPECTIVE OWNERS BEFOR E THE YEAR 2007 AND THEREFORE, IT WAS REQUESTED THAT THE CLAIM U/S 80IB (10) SHOULD NOT BE WITHDRAWN. 2.1 HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT T HE CONTENTION OF THE ASSESSEE. HE OBSERVED FROM THE EVIDENCES PLACED ON RECORD THAT IN RESPECT OF THE BUILDINGS/VILLAS NOT COVERED BY THE COMPLETION CERTIFICATE, THAT THE DELAY IN OBTAINING THE NECESSARY COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY SEE MED TO BE ATTRIBUTABLE TO THE ASSESSEE ITSELF SINCE THE ASSESSEE HAD MOVED APPLICATIONS FOR VARIOUS NOCS IN THE FAG END OF THE MONTH OF MARCH, 2008. SINCE THE CONDITION ENVISAGED U/S 80IB(10)(A) IN TERMS OF EXP LANATION 2 BELOW THE SAID CLAUSE WAS NOT FULFILLED IN THE CASE OF THE PR OJECT IN QUESTION, THE ASSESSING OFFICER DISALLOWED ASSESSEE'S CLAIM OF DE DUCTION U/S 80IB(10) AMOUNTING TO RS.4,73,50,870/-. 2.2 THE ASSESSING OFFICER PROCEEDED FURTHER TO OBS ERVE THAT THE SALEABLE AREA AS PER AGREEMENTS WAS EXCEEDING THE LIMIT OF 1500 SQ.FT. 4 PRESCRIBED U/S 80IB(10)(C) FOR THE BUILT UP AREA OF SUCH UNITS. ON SAMPLE BASIS, HE FOUND THAT THE SALEABLE AREA OF VILLA NO. 5 AS PER SALE AGREEMENT CONSISTED OF THE FOLLOWING COMPONENTS: (I) BUILT UP AREA 1482 SQ.FT. (II) ADJACENT TERRACE 165 SQ.FT. (III) TOP TERRACE 740 SQ.FT. (IV) GARDEN AREA 1700 SQ.FT. 2.3 THE ASSESSING OFFICER OBSERVED THAT WHILE SHOWI NG BUILT UP AREA OF 1482 SQ.FT. OF VILLA NO. 5, THE ASSESSEE HA D NOT INCLUDED THE ADJACENT TERRACE AREA OF 165 SQ.FT. AND ENTRANCE PO RCH AREA OF 28 SQ.FT. IN THE EYE OF THE ASSESSING OFFICER, BOTH ADJACENT TER RACE AREA AND ENTRANCE PORCH AREA WAS INCLUDIBLE IN THE BUILT UP AREA AS P ER DEFINITION OF 'BUILT UP AREA' GIVEN IN THE ACT. WITH REGARD TO THE OBJE CTION OF THE ASSESSEE REGARDING INCLUSION OF THE ADJACENT TERRACE AREA AN D ENTRANCE PORCH AREA IN THE TOTAL BUILT UP AREA, THE ASSESSING OFFICER O BSERVED THAT THE ADJACENT TERRACE AREA IS THE AREA ADJACENT TO TWO R OOMS ON THE FIRST FLOOR AND EVEN HAS ITS ENTRANCE FROM ONE OF THE ROOMS AND WAS THEREFORE, CLEARLY INCLUDIBLE AS BALCONY / PROJECTION. SIMILARLY, TH E ENTRANCE PORCH AREA WAS THE CEMENTED AREA LEADING TO THE ENTRANCE DOOR OF THE V ILLA AND IS ARRIVED UPON AFTER CLIMBING COUPLE OF STAIRS. THEREFORE, ACCORDING TO THE ASSESSING OFFICER, THERE WAS NO JUSTIFICATION F OR EXCLUDING THIS AREA FROM THE BUILT UP AREA. SINCE, WITH THE INCLUSION O F ADJACENT TERRACE AREA AND ENTRANCE PORCH AREA, THE TOTAL BUILT UP AREA OF VILLA NO. 5 I.E. 1675 SQ.FT., EXCEEDED THE PRESCRIBED LIMIT OF 1500 SQ.FT . AND THUS VIOLATED THE CONDITION PRESCRIBED U/S.80IB(10), THE AO HELD THE PROJECT TO BE INELIGIBLE FOR DEDUCTION U/S.80IB(10). 5 3. BEFORE THE CIT(A) IT WAS SUBMITTED THAT BY MOVIN G ALL THE APPLICATIONS BEFORE 31.3.2008 FOR OBTAINING THE COMPLETION CERTIFICATES, THE ASSESSEE HAS MADE HIS PART OF COM PLIANCE FOR OBTAINING THE COMPLETION CERTIFICATE. THEREFORE, THE ISSUE OF OBTAINING THE COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY IS NO MORE THAN A VENIAL BREACH OF THE CONDITION PROVIDED FOR IN-SECTION 80I B(10) AND THE ASSESSEE CANNOT BE PENALIZED FOR THE SAME. THE ASSESSEE CONT ENDED THAT IF THE PROJECT IS OTHERWISE COMPLETE, THE MERE NON-ISSUE OF COMPLETIO N CERTIFICATE SHOULD NOT BE A STUMBLING BLOCK. IT WA S SUBMITTED THAT AS PER DEVELOPMENT CONTROL RULES APPLICABLE IN PUNE MUNICIPAL CORPORATION AREA, THE LOCAL AUTHORITY DOES NOT ISSUE ANY COMPLETION CERTIFICATE. UNDER THESE CIRCUMSTANCES, THE COMPLIANCE OF SECTION 80IB(10) IS RENDERED IMPOSSIBLE. IT WAS SUBMITTED THAT THE COMPLETION CERTIFICATE FROM THE SUPERVISING ARCHITECT SHOULD BE CONSIDERED AS SUFFI CIENT EVIDENCE PROVING THE COMPLETION OF THE PROJECT COMPLIANCE. IT WAS S UBMITTED THAT THE UNITS HAVE ALREADY BEEN OCCUPIED BY THE PURCHASERS AS IS EVIDENT FROM THE FACT THAT THE POSSESSION HAS BEEN GIVEN TO THEM BEFORE 31-3-2008. THIS FACTUALLY CONFIRMS THE POSITION THAT THE UNITS ARE COMPLETED BEFORE 31-3- 2008 THEREBY SUBSTANTIVELY COMPLYING WITH THE CONDI TION OF SECTION 80IB(10) IN SO FAR AS COMPLETION IS CONCERNED. 3.1 WITH REGARD TO THE DISPUTE IN RESPECT TO THE BU ILT UP AREA, IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS NOT NEGATE D OR REBUTTED ANY OF THE ASSESSEE'S CONTENTION SAVE FOR AN UNSUBSTANTIAT ED STATEMENT THAT THE TERRACE AREA IS INCLUDIBLE IN BALCONY OR PROJECTION . IT WAS CONTENDED THAT THE HOUSING PROJECT IN QUESTION WAS COMMENCED ON 27 -8-2002 WHEN THE 6 STATUTE WAS SILENT ON THE DEFINITION OF BUILT UP AREA AND .THER EFORE, ONE SHALL HAVE TO GO BY WHAT IS COMMONLY UNDERSTOOD AS BUILT UP AREA AND NOT BY WHAT IS THE AMENDED POSITION OF LAW. IT WAS FURTHER CONTENDED THAT A TERRACE CAN NEITHER BE A PROJECTION NOR BALC ONY AS UNDERSTOOD IN COMMON PARLANCE OR OTHERWISE. ACCORDING TO THE ASSE SSEE, A BALCONY IS A COVERED AREA AND PROJECTION IS A PROTRUSION WITH SU PPORT ONLY AT ONE END. IT WAS SUBMITTED THAT TERRACE IS NEITHER A COVERED AREA NOR IT IS A PROTRUSION AND THEREFORE, THE INCLUSION OF TERRACE AREA OR PORCH AREA IN THE BUILT UP AREA IS NEITHER JUSTIFIED IN FACT NOR IN L AW. IT WAS ACCORDINGLY SUBMITTED THAT THE ASSESSING OFFICER HAS ERRED IN D ISALLOWING THE CLAIM OF DEDUCTION U/S 80IB(10) ON THE GROUND THAT BUILT UP AREA OF CERTAIN UNITS IN THE PROJECTS EXCEEDED THE PRESCRIBED LIMIT OF 1500 SQ.FT. 3.2 WITHOUT PREJUDICE TO THE ABOVE, IT WAS CONTENDE D THAT A PRO RATA CLAIM U/S.80IB(10) WITH REFERENCE TO THE ELIGIBLE R ESIDENTIAL PORTION, BEING THE AREA OF UNITS BELOW 1500 SQ.FT. OF BUILT UP AREA, OF THE HOUSING PROJECT SHOULD BE ALLOWED. 4. HOWEVER, THE LD. CIT(A) WAS ALSO NOT SATISFIED W ITH THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE AC TION OF THE AO IN DISALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) BY HOLDING AS UNDER : 3.11. THE SUBMISSION HAS BEEN CONSIDERED. THE APPE LLANT HAS ARGUED THAT IF THE PROJECT IS OTHERWISE COMPLETE, T HE MERE ISSUE OF COMPLETION CERTIFICATE SHOULD NOT BE A STUMBLING BL OCK. THE QUESTION ARISES AS TO WHO WILL DECIDE THAT IF THE P ROJECT IS OTHERWISE COMPLETE OR NOT. THE MERE FACT OF MOVING APPLICATIONS FOR OBTAINING VARIOUS NOCS BEFORE THE EXPIRY DATE O R GIVING POSSESSION OF UNITS TO SOME OF THE PURCHASERS, CANN OT CONCLUSIVELY PROVE THAT THE PROJECT HAS BEEN COMPLETED BEFORE 31 -3-2008. WITHOUT KNOWING THE FATE OF THE APPLICATIONS MOVED BY THE 7 ASSESSEE, NOTHING CAN BE SAID IN THIS REGARD. IN FA CT, WHILE PRESCRIBING CONDITION FOR COMPLETION OF PROJECT WIT HIN THE PRESCRIBED PERIOD, THE LEGISLATURE WAS WELL AWARE O F THE POTENTIAL QUESTION AS TO WHO WILL DECIDE WHETHER THE PROJECT IS COMPLETE OR NOT, A CERTIFICATE ISSUED BY THE SUPERVISING ARCHIT ECT / ENGINEER OF THE ASSESSEE COULD AMOUNT ONLY TO SELF CERTIFICATIO N WHICH CANNOT HAVE SUFFICIENT STRENGTH AS EVIDENCE FOR COMPLETION OF THE PROJECT. IT IS ONLY IN ORDER TO RULE OUT ANY CONTROVERSY IN THIS REGARD THAT THE LEGISLATURE LAID DOWN THAT THE DATE OF COMPLETI ON OF THE HOUSING PROJECT IS TO BE TAKEN TO BE THE DATE ON WH ICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH PROJECT I S ISSUED BY THE LOCAL AUTHORITY. IN MY CONSIDERED VIEW, RELIANCE ON ANY FACT/EVIDENCE OTHER THAN THE COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY CAN BE PLACED ONLY IN UTTER DISREGA RD OF THE STATUTORY MANDATE AND THEREFORE, THE SAME IS NOT PE RMISSIBLE. IN THIS VIEW OF THE MATTER, NO ONE CAN BE ALLOWED TO D ILUTE THE IMPORTANCE OF OBTAINING COMPLETION CERTIFICATE FROM LOCAL AUTHORITY AS AN EVIDENCE REGARDING DATE OF COMPLETI ON OF PROJECT SIMPLY BY STATING THAT THE ISSUE OF OBTAINING COMPL ETION CERTIFICATE FROM THE LOCAL AUTHORITY IS NOT MORE THAN A VENIAL BREACH OF CONDITION PROVIDED FOR IN SECTION 80IB(10). THERE I S NO DENYING OF THE FACT THAT THE ASSESSEE HAS FAILED TO OBTAIN THE MANDATORY COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY TO THE EFFECT THAT THE PROJECT WAS COMPLETED BEFORE 31-3-2008 AND THEREFOR E, THE CONDITION PRESCRIBED U/S 80IB(10) REMAINS UNFULFILL ED. UNDER THESE CIRCUMSTANCES, THE ACTION OF THE ASSESSING OFFICER IN REJECTING ASSESSEE'S CLAIM OF DEDUCTION U/S 80IB(10) IS UPHEL D. 3.12. WITH REGARD TO THE DISPUTE WHETHER BUILT UP AREA SHALL INCLUDE TERRACE AREA OR NOT I AM INCLINED TO SUBSCR IBE TO THE VIEW OF THE ASSESSING OFFICER THAT THE TERRACE AREA IS INCLUDIBLE IN THE BUILT UP AREA. FIRSTLY, IN MY VIEW, THE TERRACE AREA FALLS UNDER THE CATEGORY OF 'PROJECTION' AND, AS PER THE CLARIFICAT ORY AMENDMENT, HAS TO BE CONSIDERED PART OF THE BUILT UP AREA. SEC ONDLY, ASSUMING THOUGH NOT ADMITTING THAT A PROJECTION IS NOT TO BE CONSIDERED AS PART OF THE BUILT UP AREA AS PER PRE-AMENDMENT POSI TION OF LAW, ONE SHALL HAVE TO GO, AS ALSO ADVOCATED BY THE APPE LLANT, BY WHAT IS COMMONLY UNDERSTOOD AS BUILT UP AREA. AS PER COM MON UNDERSTANDING ALSO, THE BUILT UP AREA OF A FLAT CON SISTS OF THE COVERED AREA AS WELL AS THE TERRACE AREA. THEREFORE , THE CONTENTION OF THE APPELLANT THAT THE BUILT UP AREA SHOULD BE CONSIDERED WITHOUT INCLUDING THE TERRACE AREA, HAVI NG NO SUBSTANCE, DOES NOT MERIT ACCEPTANCE AND IS REJECTE D. 4.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS OF APPE AL : 8 1. THE LEARNED CIT (A) HAS ERRED ON FACTS AND IN L AW IN CONFIRMING A DISALLOWANCE OF THE CLAIM U/S 80IB (10) OF RS.4,7 3,50,870/- ON THE GROUNDS THAT - (A) COMPLETION CERTIFICATE WAS N OT OBTAINED FOR THE/ ENTIRE PROJECT AND THAT (B) THE BUILT UP AREA OF SOME RESIDENTIAL UNIT WAS IN EXCESS OF 1500 SQ. FT. WHEN THE AREA OF ADJACENT TERRACE AND ENTRANCE PORCH WAS INCLUDED. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT (A) HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING A PRO-RATA CLAIM U /S 80IB(10) WITH REFERENCE TO THE ELIGIBLE PORTION OF THE HOUSI NG PROJECT BY OBSERVING THAT THE PROVISIONS IN LAW DO NOT SUPPORT A PRO-RATA CLAIM. 5. THE LD. COUNSEL FOR THE ASSESSEE WHILE ARGUING O N THE ISSUE OF COMPLETION CERTIFICATE SUBMITTED THAT THE APPLIC ATION FOR OCCUPANCY IS FILED ON 03-03-2008. THERE IS NO DEFICIENCY POINTED OUT BY THE LOCAL AUTHORITY. AS SUCH AFTER 21 DAYS, THE OCCUPANCY CER TIFICATE IS DEEMED TO BE GRANTED AS PER RULE 7.7 OF THE DC RULES. EVEN FI RE NOC WHICH FINDS SIGNIFICANT MENTION IN THE DC RULES (7.7.2) HAS BEE N OBTAINED MUCH BEFORE 31ST MARCH, 2008. SUCH AN NOC NOT RECEIVED B Y THE ASSESSEE IN THE CASE OF SATISH BORA AND ASSOCIATES (ITA NO.713/ PN/2010) WAS CONSIDERED MINOR DEVIATION TO BE IGNORED BY THE HON PUNE TRIBUNAL. THE FACT OF COMPLETION OF PROJECT HAS NOT BEEN DOUBTED OR CHALLENGED BY EITHER THE AO OR THE CIT(A). THE SURVEY PARTY WHICH VISITED THE PROJECT SITE ON 02-06-2008 HAD ONLY ONE OBJECTION THAT OF N ON AVAILABILITY OF COMPLETION CERTIFICATE. THE SURVEY PARTY HAD NO ISS UE WITH THE COMPLETION OF THE PROJECT OR ITS OCCUPATION THEREOF BY THE FLAT PURCHASERS. THERE IS NO DISPUTE ABOUT THE POSSESSION PRIOR TO 3 1-03-2008. THE MSEB BILLS OF INDIVIDUAL FLAT PURCHASERS ARE ALSO I N PLACE INDICATING THE POSSESSION THEREOF. IT IS THE EXPLANATION TO SECTIO N 80IB(10)(A) WHICH SPEAKS OF THE COMPLETION CERTIFICATE. THIS IS A MAC HINERY PROVISION THAT CANNOT OVERRIDE THE MAIN SECTION. WHAT IS RELEVANT IS COMPLETION AND NOT 9 THE COMPLETION CERTIFICATE. THE ASSESSEE PLACED REL IANCE ON THE FOLLOWING DECISIONS: 1. CIT VS.TARNETAR CORP.(GUJ.) ITA NO. 1241 OF 2 011 2. CITY DEVELOPMENT CORP. VS ACIT (PUNE) ITA NO. 1489/PN/2009 3. GLOBAL REALITY VS ITO (INDORE) REPORTED IN 134 ITD 407 4. RUNWAL MULTI HOUSING PVT. LTD. V ACIT (PUNE) ITA NO.L015/PN/2011 5. CIT V SANGHVI & DOSHI ENTERPRISES REPORTED IN 81 DTR (MAD.) 75 6 . MANAN CORPORATION VS. ACIT TAX APPEAL NO.1053/2011 GUJARAT HIGH COURT 7. DCIT VS. MAGARPATTA TOWNSHIP DEVELOPMENT & CONSTRUCTION CO. (PUNE) ITA NO.822/PN/2011 AND CO NO.04/PN/2012 ORDER DT. 18-09-2012 8. D.S. KULKARNI DEVELOPERS LTD. VS. ACIT VIDE IT A NO.1428/ & 1429/PN/2008 ORDER DT. 08-08-2012 5.1 HE ALSO RELIED ON THE DECISION OF THE HONBLE M ADRAS HIGH COURT IN THE CASE OF CIT VS. JAIN HOUSING AND CONSTRUCTIO N LTD. REPORTED IN 82 DTR (MAD.) 135 ACCORDING TO WHICH PRIOR TO AMENDMEN T OF SECTION80IB(10) W.E.F. 01-04-2005 THERE WAS NO OBLI GATION ON THE PART OF THE ASSESSEE TO FILE COMPLETION CERTIFICATE. 6. SO FAR AS THE ISSUE RELATING TO BUILT UP AREA HE SUBMITTED THAT VARIOUS BENCHES OF THE TRIBUNAL HAVE HELD THAT AMEN DMENTS MADE W.E.F. 01-04-2005 DO NOT APPLY TO PROJECTS APPROVED PRIOR TO 31-03-2005. SUCH CLAUSE (1) OF SECTION 80IB(4) WHICH DEFINES BUILT U P AREA DOES NOT APPLY TO THE CASE OF THE ASSESSEE. FOR THIS PROPOSITION HE RELIED ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SAROJ SALES ORGANIZATIONS VS. ITO MUMBAI REPORTED IN1 15 TTJ 48 5 AND THE DECISION 10 OF HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES REPORTED IN 333 ITR 289. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. PRIME PROPERTIE S VIDE ITA NOS.887 TO 889/PN/2010 ORDER DATED 26-04-2012 FOR A.YS. 200 3-04 TO 2005-06 AND THE DECISION IN THE CASE OF BRAHMA BUILDERS VS. DCIT VIDE ITA NO.1647 AND 649/PN/2009 ORDER DATED 15-05-2012 FOR A.Y. 2004-05 AND 2005-06 HE SUBMITTED THAT IT HAS BEEN HELD THAT IN RESPECT OF PROJECTS APPROVED PRIOR TO 01-04-2005 BALCONY/TERRACE CANNOT BE INCLUDED IN THE BUILT UP AREA OF THE UNITS. HE ACCORDINGLY SUBMITT ED THAT THE BUILT UP AREA OF THE UNITS IN THE CASE OF THE ASSESSEE BEING LESS THAN 1500 SQ.FT. THEREFORE, THE ASSESSEE IS ENTITLED TO THE BENEFIT OF DEDUCTION U/S.80IB(10). 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE ASSESSING OFFICER AND TH E CIT(A). REFERRING TO THE DECISION OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF M/S.SAINATH ESTATES PVT. LTD HYDERABAD VS. DCIT VID E ITA NO.299 TO 300/HYD/2012 ORDER DATED 08-02-2013 FOR A.YS 2005-0 6 AND 2006-07 HE SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES THE TR IBUNAL HAD DENIED THE CLAIM OF DEDUCTION U/S.80IB(10) ALTHOUGH AN APPLICA TION WAS MADE FOR OCCUPANCY CERTIFICATE BY THE LICENSED ARCHITECT. T HE TRIBUNAL IN THE SAID DECISION HAS DISTINGUISHED THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TARNETAR CORPORATION REPORTED IN 210 TAXMANN.COM 206. HE SUBMITTED THAT THE LAW IS VERY CLEAR ON TH IS ISSUE. THE LOCAL AUTHORITY HAS TO VERIFY THE VIOLATIONS, IF ANY, BEF ORE ISSUING THE COMPLETION CERTIFICATE. THERE IS CLEAR DISREGARD T O THE PROVISIONS BY THE 11 ASSESSEE IN THE INSTANT CASE. FURTHER, THE ASSESSE E HAS APPLIED FOR COMPLETION CERTIFICATE PRIOR TO OBTAINING COMPLETIO N OF SEWERAGE AND WATER CONNECTION, THEREFORE, THE ASSESSEE IN THE IN STANT CASE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10). HE ALSO RELIED ON THE D ECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASS OCIATES VIDE ITA NO.1194/2010. 8. WE HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH T HE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAV E ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DIS PUTE TO THE FACT THAT THE ASSESSEE AOP IS ENGAGED IN THE BUSINESS OF DEVELOPM ENT AND SALE OF A RESIDENTIAL PROJECT CALLED LA SALLETE. FURTHER, THERE IS ALSO NO DISPUTE TO THE FACT THAT THE DATE OF THE COMMENCEME NT OF THE PROJECT IS 27-08-2002 AND THUS HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE 01-04-2004. WE FIND THE ASSESSING OFFICER DISALLOW ED THE CLAIM OF DEDUCTION U/S.80IB(10) AMOUNTING TO RS.4,73,58,870/ - ON THE GROUND THAT (A) THE COMPLETION CERTIFICATE WAS NOT OBTAINED FOR THE ENTIRE PROJECT BEFORE 31-03-2008 AND (B) THE BUILT UP AREA OF SOME OF THE RESIDENTIAL UNITS WAS IN EXCESS OF 1500 SQ.FT. AFTER INCLUDING THE ADJACENT TERRACE AND ENTRANCE PORCH. WE FIND FROM PAGE NO.24 OF THE PAP ER BOOK THAT THE ASSESSEE THROUGH HIS ARCHITECT HAS APPLIED TO THE P MC FOR OCCUPANCY CERTIFICATE ON 03-03-2008 WHICH HAS BEEN DULY ACKNO WLEDGED BY THE PMC. EVEN THE ASSESSING OFFICER VIDE HIS LETTER DA TED 18-02-2013 ADDRESSED TO THE CIT, ITAT, PUNE, A COPY OF WHICH H AS BEEN FILED BEFORE THE BENCH, ALSO MENTIONS THE COPY OF THE COMPLETION CERTIFICATION APPLICATION OF THE ASSESSEE IS DATED 03-03-2008. T HE ASSESSING OFFICERS 12 LETTER ALSO CONTAIN THE WORK ORDER OF DRAINAGE WHIC H IS DATED 28-03-2008. THE ASSESSEE HAD APPLIED FOR SUCH CERTIFICATE ON 16 -03-2008 VIDE RECEIPT NO.878, A COPY OF WHICH IS PLACED AT PAPER BOOK PAG E NO.25. SIMILARLY THE CHIEF FIRE OFFICER OF PMC HAS ISSUED THE NOC ON 17-04-2007 A COPY OF WHICH IS ANNEXED TO THE LETTER SENT BY THE ASSES SING OFFICER TO THE CIT, ITAT AND A COPY OF WHICH IS FILED BEFORE THE B ENCH. IT IS THUS CLEAR THAT THE ASSESSEE HAS APPLIED TO THE PMC FOR ISSUE OF COMPLETION CERTIFICATE ON 03-03-2008 WHICH IS BEFORE 31-03-200 8. WE FURTHER FIND FROM PARA 4.3 OF THE ASSESSMENT ORDER THAT THE ASSE SSEE IN ITS SUBMISSION DATED 17-10-2008 HAS SUBMITTED AS UNDER : IT IS TRUE THAT THE PROJECT WAS COMMENCED PRIOR TO 01-04-2004 AND THEREFORE IS REQUIRED TO BE COMPLETED BY 31-03- 2008 AS CONTEMPLATED U/S.80IB(10). IT IS ALSO TRUE THAT TH E SECTION ENVISAGES THE COMPLETION CERTIFICATE TO BE EVIDENCE D BY THE COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORIT IES. IN SO FAR AS THIS PROJECT IS CONCERNED, THE FACT TH AT THE PROJECT HAS BEEN COMPLETED ON THE SITE IS NOT DISPUTED. HOWEVE R, AS IT HAS BEEN RIGHTLY OBSERVED IN THE COURSE OF SURVEY U/S.1 33A, THE LOCAL AUTHORITY HAS NOT ISSUED THE COMPLETION CERTIFICATE . IN THIS CONNECTION, WE HAVE ALREADY PROVIDED INFORM ATION ON THE REASONS FOR NON-AVAILABILITY OF COMPLETION CERTIFIC ATE AS THE LOCAL AUTHORITY WAS UNDER A MANDATE FROM THE STATE GOVERN MENT TO STAY THE ISSUE OF COMPLETION CERTIFICATE. AS SUCH, THOUGH WE HAVE COMPLETED THE PROJECT AND H AVE DONE EVERYTHING THAT NEEDS TO BE DONE AT OUR END, WE CAN NOT BE FAULTED FOR THE LOCAL AUTHORITIES IN-ACTION WHICH TOO IS LE GALLY CONSTRAINED. 8.1 WE FURTHER FIND DURING THE COURSE OF SURVEY THE ASSESSEE IN HIS REPLY TO QUESTION NO. 9 HAD REPLIED AS UNDER WHICH HAS BEEN REPRODUCED BY THE ASSESSING OFFICER IN THE BODY OF THE ASSESSM ENT ORDER IN PARA 4.1 AND WHICH READS AS UNDER : 13 YES I HAVE ALREADY COMPLETED THE PROJECT BEFORE TI ME AND THE POSSESSION OF THE RESIDENTIAL UNITS HAS BEEN HANDED OVER TO THE RESPECTIVE OWNER BEFORE FEBRUARY, 2007. HOWEVER, T HE LOCAL AUTHORITY (PMC) HAS NOT ISSUED THE COMPLETION CERTI FICATE AS I AM TOLD, THEY ARE UNDER INSTRUCTION FROM THE STATE GOV ERNMENT, NOT TO ISSUE THE COMPLETION CERTIFICATE BECAUSE OF SOME PE NDING ULC MATTER. I CAN SUBMIT THE POSSESSION RECEIPTS ALONGW ITH THEIR RESPECTIVE ELECTRICITY BILL PAID BY THEM, FOR THE L AST TWO YEARS AS EVIDENCE THAT THE PROJECT IS COMPLETED BEFORE TIME. HENCE, IT IS REQUESTED THAT THE CLAIM U/S.80IB(10) SHOULD NOT BE WITHDRAWN. 8.2 FROM THE ABOVE AND ON THE BASIS OF THE VARIOUS DOCUMENTS FILED BY THE ASSESSEE IN THE PAPER BOOK WE FIND THE ASSESSEE HAS HANDED OVER THE RESIDENTIAL UNITS TO THE RESPECTIVE OWNERS BEFORE F EBRUARY, 2007. THIS FACT IS ALSO NOT DISPUTED BY THE REVENUE AUTHORITIE S. WE FIND THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. T ARNETAR CORPORATION VIDE TAX APPEAL NO.1241/2011 ORDER DATED 12-09-2012 HAS OBSERVED AS UNDER : 6. IN THE PRESENT CASE, THEREFORE, THE FACT THAT T HE ASSESSEE HAD COMPLETED THE CONSTRUCTION WELL BEFORE 31 ST MARCH, 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRUE THAT FORMALLY BU PER MISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. I T IS EQUALLY TRUE THAT EXPLANATION TO CLAUSE (1) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITI ON OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANC E THEREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT M AY TAKE THE VIEW THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WAS BEING MADE AVAILABLE. 8.3 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF RUNWAL MULTI HOUSING PVT. LTD. VS. ACIT VIDE ITA NOS.1015 TO 1017/PN/2011 ORDER DATED 21-11-2012 FOR A.YS. 2003-04 TO 2005-06 HAS OBSERVED AS UNDER : 18. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE ASSESSE E OBTAINED THE PERMISSION 14 FOR CONSTRUCTION OF BUILDINGS A, B, C, D, E, F AND 17 ROW HOUSES ON 12-12- 2001. THE ASSESSEE CONSTRUCTED BUILDING NOS. A,C, D AND E AND THE 17 ROW HOUSES AND DROPPED THE IDEA OF CONSTRUCTION OF BUIL DING NOS. B AND F BEING UNECONOMICAL AND HAD NOT SUBMITTED ANY REVISED PLAN TO PMC. ALTHOUGH THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE ON 22-0 1-2004, THE SAME WAS NOT RECEIVED BY THE ASSESSEE BEFORE 31-03-2008. IT IS THE CASE OF THE REVENUE THAT DEDUCTION U/S.80IB(10) CANNOT BE AVAILED OF BY THE ASSESSEE SINCE IT HAS NOT CONSTRUCTED ALL THE SIX BUILDINGS AND 17 ROW HOUSES FOR WHICH PERMISSION WAS GRANTED AND COMPLETION CERTIFICATE WAS NOT OBTAINED BEFORE 31-03-2008. IT IS THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSES SEE THAT IT HAS CONSTRUCTED BUILDING NOS. A, C, D AND E AND 17 ROW HOUSES AND B UILDING NOS. B & F BEING NOT FEASIBLE WAS NOT CONSTRUCTED AND THE ASSE SSEE HAS DROPPED THE IDEA OF CONSTRUCTION OF THE SAME. IT IS ALSO THE SUBMIS SION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT IT HAS APPLIED FOR COMPLETION CERTIFICATE ON 22-01-2004 AND SINCE THE PMC HAS A LEGAL PROBLEM, WHICH IS SUB JUDICE, THE PMC IS NOT ABLE TO GRANT THE COMPLETION CERTIFICATE. IT IS AL SO THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT CORPORATION H AS STARTED LEVYING MUNICIPAL TAXES, THE FLAT OWNERS HAVE STARTED PAYIN G ELECTRICITY BILLS AND THE PROJECT ON WHICH BUILDING NOS. A, C, D AND E AND 17 ROW HOUSES ARE CONSTRUCTED ARE ON A PLOT OF AREA OF MORE THAN 1 AC RE. THEREFORE, THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10) ON THE 4 BUIL DINGS AND 17 ROW HOUSES WHICH IT HAS COMPLETED. 19. WE FIND THE MANAGING DIRECTOR SHRI PRADEEP AMRU TLAL RUNWAL IN HIS STATEMENT RECORDED DURING THE COURSE OF SURVEY U/S. 133A HAS REPLIED TO QUESTION NOS. 7, 8, 9, 10 & 12 AS UNDER : Q.7. HAVE YOU RECEIVED THE COMPLETION CERTIFICATE FROM PMC FOR RUNWAL PARADISE PROJECT ? ANS. THE COMPLETION CERTIFICATE FOR ROW HOUSES 7 TO 18 WAS RECEIVED. HOWEVER FOR OTHER BUILDINGS ON RUNWAL PARADISE PROJ ECT WE HAVE NOT RECEIVED THE COMPLETION CERTIFICATE AS ON TODAY THO UGH WE HAVE APPLIED FOR THE SAME. Q.8. WHETHER THE CONSTRUCTION IS COMPLETED IN RESPE CT OF ALL THE BUILDINGS AS PER REVISED PLAN DATED 10-01-2003, COMMENCEMENT CERTIFICATE NO.1372? ANS. CONSTRUCTION IS COMPLETED BEFORE 31 ST MARCH 2008 IN THE ENTIRE SCHEME RUNWAL PARADISE TO THE EXTENT THAT WE WANT T O BUILD AND ENJOY THE FSI OF THE PROJECT AND THE AREA USED SO IS ABOVE 1 ACRE. Q.9. IF THE CONSTRUCTION IS COMPLETED BEFORE 31 ST MARCH 2008, WHY YOU HAVE NOT RECEIVED COMPLETION CERTIFICATE FROM PMC FOR AL L BUILDINGS IN RUNWAL PARADISE PROJECT AS ON TODAY? ANS. THE COMPLETION CERTIFICATE ARE DEEMED RECEIVED SINCE WE HAVE APPLIED FOR THE SAME, BUT SINCE THE MATTER IS SUBJU DICE THE PMC IS NOT ABLE TO GRANT THE COMPLETION CERTIFICATE. THE VERY LOCAL A UTHORITY WHICH IS RESPONSIBLE FOR GRANTING THE COMPLETION CERTIFICATE HAS A LEGAL PROBLEM WHICH IS SUBJUDICE. Q.10. AS STATED ANSWERING THE QUESTION NO.9, PLEASE STATE WHEN YOU HAVE APPLIED FOR COMPLETION CERTIFICATE IN RESPECT OF RU NWAL PARADISE PROJECT AND ALSO SUBMIT THE RELEVANT APPLICATIONS? 15 ANS. WE HAVE APPLIED FOR COMPLETION CERTIFICATE FOR THE ENTIRE PROJECT. WE ARE SUBMITTING HEREWITH THE APPLICATION FOR COMPLET ION CERTIFICATE DATED 22- 01-2004VIDE COMMENCEMENT CERTIFICATE NO.1372 DATED 10-01-2002 AS PER ANNEXURE C. THE COPIES OF ANY FURTHER APPLICATIO N, IF ANY, WE WILL SUBMIT THE SAME ON 2 ND JUNE 2008. Q.12. AS PER REVISED BUILDING LAYOUT SANCTIONED ON 10-01-2003, YOU GOT APPROVAL FOR CONSTRUCTION OF BUILDINGS A TO F AND R OW HOUSES 1 TO 18 IN RUNWAL PARADISE PROJECT. HOWEVER AS SEEN FROM THE LIST OF FLAT HOLDERS SUBMITTED BY YOU AS ANNEXURE D AND ALSO THE INSPE CTION CARRIED OUT AT THE SITE OF RUNWAL PARADISE LOCATED AT S.NO.981, AT PAU D ROAD, KOTHRUD, PUNE, THE CONSTRUCTION OF BUILDINGS B AND F IS YET TO BE COMPLETED. PLEASE GIVE YOUR COMMENT? ANS. YES, I AGREE THAT THE CONSTRUCTION OF BUILDING S B AND F HAVE NOT BEEN CARRIED OUT WITH A PERFECT UNDERSTANDING IN THE MIN D THAT WE WANTED TO GIVE UP THESE TWO WINGS. IN CASE THESE WINGS WOULD HAVE BEEN CONSTRUCTED THEY WOULD HAVE BEEN VERY SHABBY AND BEEN PLACE FOR NON- HYGIENE IN THE ENTIRE PROJECT. LOOKING AT THE MERITS AND DEMERITS THESE WINGS WERE NOT CONSTRUCTED. FURTHER, BUILDING JUST ONE FLOOR WAS ECONOMICALLY UNVIABLE. 20. SO FAR AS THE FIRST OBJECTION OF THE REVENUE TH AT COMPLETION CERTIFICATE FROM PMC HAS NOT BEEN OBTAINED BY THE ASSESSEE BEFO RE 31-03-2008 WE FIND THE ASSESSEE THROUGH HIS ARCHITECT VIDE APPLICATION DATED 22-01-2004 HAS APPLIED TO PMC FOR OCCUPANCY CERTIFICATE. (PAGE 119 OF THE PAPER BOOK). THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE PMC HAS NOT YET REJECTED THE SAID APPLICATION TILL DATE COULD NOT B E CONTROVERTED BY THE REVENUE. THE FURTHER SUBMISSION OF THE LEARNED COU NSEL FOR THE ASSESSEE THAT ALL THE FLAT OWNERS/ROW HOUSE OWNERS HAVE BEEN GIVE N POSSESSION BETWEEN 26- 10-2002 TO 15-01-2007, I.E.PRIOR TO 31-03-2008 COUL D NOT BE CONTROVERTED BY THE LEARNED DR (PAGE 55 TO 63 OF THE PAPER BOOK). THE LEARNED DR ALSO COULD NOT CONTROVERT THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT PMC HAS STARTED LEVYING MUNICIPAL TAXES AND TH E ELECTRICITY METERS ARE IN THE NAME OF THE FLAT OWNERS WHO HAVE STARTED PAY ING ELECTRICITY BILLS. 20.1 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF CITY DEVELOPMENT CORPORATION VS. ACIT ITA NO. 57 AND 1 287/PN/2010 ORDER DATED 27-09-2012 HAS HELD AS UNDER : 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. QUITE CLEARLY, THE DISPUTE IS WITH REGARD TO THE COMPLETION CERTIFICAT E OF BUILDING 'E' HAVING BEEN ISSUED BY THE LOCAL AUTHORITY I.E. PUNE MUNICIPAL C ORPORATION, ON 5-5-2008. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) R EQUIRES THAT THE CONSTRUCTION OF THE PROJECT IN QUESTION IS TO BE COMPLETED ON OR BEFORE 31-3-2008. CLAUSE (II) OF EXPLANATION BELOW SECTION 80-IB(10)(A) PRES CRIBES THAT THE DATE OF COMPLETION OF CONSTRUCTION OF HOUSING 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. IN THE PRESENT CASE, IT HAS BEEN ISSUED ON 5-5-2008 AND HENCE THE CASE SET UP BY THE REVENUE THAT THE COMPL ETION IS BEYOND THE MANDATED DATE OF 31-3-2008. IN THIS BACKGROUND, WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE APPLIED FOR OBTAINING THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING 'E' ON 12-3-2008. FROM THE DISC USSION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, WHEREIN THE FACTUAL ASSERTIONS OF THE ASSESSEE HAVE BEEN REPRODUCED, IT IS QUITE EVID ENT THAT THE ASSESSEE ASSERTED THAT BEFORE 31-3-2008, THE CONSTRUCTION OF BUILDING WAS COMPLETE IN ALL RESPECTS; THAT ELECTRICAL CONNECTION WAS PROVID ED TO EACH FLAT OWNER; ROAD WAS COMPLETE; WATER AND DRAINAGE CONNECTION WAS AVA ILABLE; SEWERAGE SYSTEM WAS OPERATING; CLUB HOUSE WAS FUNCTIONAL; ET C. THE ASSESSEE ALSO 16 POINTED OUT THAT THE LOCAL AUTHORITY HAD ALSO INITI ATED PROPERTY TAX ASSESSMENTS FOR EACH OF THE FLATS AND THE SAME DEMO NSTRATED THAT ALL THE FLATS IN THE BUILDING WERE COMPLETE. IN FACT, IN PARA 6.9 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER NOTICED THAT 'THE FACTS THAT THE FLATS WERE COMPLETED AND POSSESSION GIVEN WILL NOT COME TO THE RESCUE OF THE ASSESSEE'. THE AFORESAID FINDING OF THE ASSESSING OFFICER SUPPORTS THE ASSER TION MADE BY THE ASSESSEE THAT FACTUALLY SPEAKING CONSTRUCTION OF FLATS IN BU ILDING 'E' WAS ALSO COMPLETE AND POSSESSION HANDED OVER TO THE ACTUAL USER/CUSTO MERS PRIOR TO 31-3-2008. PERTINENTLY, ON THE BASIS OF THE ARCHITECT'S CERTIF ICATE CONFIRMING COMPLETION OF CONSTRUCTION OF BUILDING, THE ASSESSEE APPLIED F OR THE COMPLETION CERTIFICATE TO THE PUNE MUNICIPAL CORPORATION ON 12-3-2008. IT HAS BEEN POINTED OUT BEFORE US THAT THE LOCAL AUTHORITY I.E. PUNE MUNICI PAL CORPORATION DID NOT RAISE ANY OBJECTION WITH REGARD TO ASSESSEE'S APPLI CATION AND THE CERTIFICATE FOR BUILDING 'E' WAS THEREAFTER ISSUED ON 5-5-2008. THE MOOT QUESTION IS AS TO WHETHER IN SUCH A SITUATION CAN IT BE SAID THAT THE ASSESSEE'S PROJECT DID NOT COMPLY WITH THE CONDITION PRESCRIBED IN SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT WHEREBY THE CONSTRUCTION WAS T O BE COMPLETED ON OR BEFORE 31-3-2008. SOMEWHAT SIMILAR SITUATION WAS CO NSIDERED BY OUR CO- ORDINATE BENCH IN THE CASE OF HINDUSTAN SAMUTHA AWA S LTD. (SUPRA) WHEREIN ALSO ON THE STRENGTH OF ARCHITECT'S CERTIFICATE, AN APPLICATION FOR OBTAINING COMPLETION CERTIFICATE WAS MOVED TO THE LOCAL AUTHO RITY ON 25-2-2008 BUT IN ACTUALITY THE COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITY ON 10- 10-2008. THE TRIBUNAL NOTICED THAT THE DELAY IN ISS UING COMPLETION CERTIFICATE WAS NOT ATTRIBUTABLE TO THE ASSESSEE AS NO OBJECTIO NS WERE RAISED BY THE LOCAL AUTHORITY. THE TRIBUNAL AFTER CONSIDERING ITS EARLI ER DECISIONS IN THE CASE OF M/S. SATISH BOHRA & ASSOCIATES VS. ACIT IN ITA NO. 713 AND 714/PN/2010 FOR A.Y. 2004-05 AND 2005-06 DATED 7-1-2011; M/S. D .K. CONSTRUCTIONS VS. ITO ITA NO. 243/PN/2010 FOR A.Y. 2006-07; DATED 6-1 2-2010 AND SANGHVI AND DOSHI ENTERPRISES VS. ITO AND OTHERS ITA NO. 25 9 TO 263/MDS/2010 DATED 19-5- 2011 FOR A.Y. 2005-06 AND 2006-07 (TM) HAS CONCLUDED AS FOLLOWS: 'FROM THE ABOVE, ONCE THIS IS CLEAR THAT T HE DATE THAT APPEARS ON THE ARCHITECT'S COMPLETION CERTIFICATE FILED BEFORE THE LOCAL AUTHORITY IS RELEVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25- 3-20 08 AND THE ASSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES INTIMAT ING THE COMPLETION OF THE PROJECT. THE SAID CERTIFICATE/INTIMATION WAS ACCEPT ED BY THE LOCAL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHORI TY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. I N SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10-10-2008 IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE AND O BTAINING THE SAID CERTIFICATE BEFORE 31-3-2008 IS BEYOND THE CONTROL OF THE ASSES SEE. ASSESSEE'S JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDAN CE WITH THE APPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHO RITY BY WAY OF FILING THE REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIF ICATE GIVEN BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASS ESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHO RITY HAS NEITHER OBJECTED TO THE SAID APPLICATION OF THE ASSESSEE AND THE ARCHIT ECT BY RAISING ANY OBJECTIONS FOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10-10-2008. THEREFORE, THE DELAY IN GRANT OF THE SAID CERTIFICA TE IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE. THEREFORE, IN OUR OPI NION, THE ASSESSEE IS NOT DEFAULTER ON THIS ACCOUNT AND THUS, THE AO HAS ERRE D IN DENYING THE DEDUCTION U/S 80-IB(10) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL AR E ALLOWED' 13. THE AFORESAID DECISION OF THE TRIBUNAL IS CLEAR LY APPLICABLE TO THE FACTS OF THE PRESENT CASE ALSO. IN THE PRESENT CASE, THE COM PLETION CERTIFICATE WAS APPLIED FOR BEFORE 31-3-2008 I.E. ON 12-3-2008. IT IS UNDISPUTABLE THAT THE APPLICATION OF THE ASSESSEE HAS BEEN APPROVED BY TH E LOCAL AUTHORITY WITHOUT RAISING ANY AMENDMENT OR OBJECTION, AS HAS BEEN ASS ERTED BY THE ASSESSEE ALL ALONG AND THE DELAYED ISSUANCE OF THE COMPLETION CE RTIFICATE BY THE LOCAL AUTHORITY ON 5-5-2008, ALBEIT AFTER THE MANDATED DA TE OF 31-3-2008 CANNOT BE 17 ATTRIBUTED TO THE ASSESSEE. IN THIS BACKGROUND OF T HE MATTER, WE THEREFORE, FIND AMPLE FORCE IN THE PLEA OF THE ASSESSEE THAT DENIAL OF DEDUCTION U/S 80-IB(10) ON SUCH SCORE IS UNCALLED FOR. IN CONCLUSION THEREF ORE, IN THE INSTANT FACTUAL BACKGROUND, WE HOLD THAT THE ASSESSEE HAS COMPLIED WITH THE CONDITION OF COMPLETING THE CONSTRUCTION OF THE PROJECT WITHIN T HE MANDATED DATE OF 31-3- 2008 EVEN WITH REGARD TO BUILDING 'E', FOLLOWING TH E PARITY OF THE REASONING LID DOWN IN THE CASE OF HINDUSTAN SAMUTHA AWAS LTD. (SUPRA). . 14. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(1 0) OF THE ACT REQUIRES THAT THE UNDERTAKING, DEVELOPING AND BUILDING A HOUSING PROJECT 'COMPLETES SUCH CONSTRUCTION' OR BEFORE 31-3-2008. IN THE PRESENT C ASE, ASSESSEE HAS FACTUALLY ASSERTED RIGHT FROM THE STAGE OF ASSESSMENT PROCEED INGS, THAT THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE IN ALL RESPECTS AS PER SANCTIONED PLAN AND ALL THE FLATS WERE HANDED OVER TO THE ACTUAL USERS/CUSTOMER S PRIOR TO 31-3-2008. IN THE BACKGROUND OF THE AFORESAID FACTUAL POSITION WH ICH HAS REMAINED UNCONTROVERTED, IN OUR VIEW, ON A PLAIN READING OF SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) THE CONDITION PRESCRIBED THERE IN IS FULFILLED., INASMUCH AS THE CONSTRUCTION OF BUILDING 'E' WAS COMPLETE BEFOR E 31-3-2008. HOWEVER, ON THE READING OF CLAUSE (II) OF THE EXPLANATION BELOW SEC. 80-IB(10)(A) OF THE ACT, IT EMERGES THAT THE COMPLETION OF CONSTRUCTION OF A HOUSING PROJECT IS TO BE TAKEN TO BE THE DATE ON WHICH COMPLETION CERTIFI CATE IS ISSUED BY THE LOCAL AUTHORITY, WHICH IN THE PRESENT CASE IS ISSUED ON 5 -5-2008 I.E. BEYOND THE STIPULATED DATE OF 31-3-2008. THE MOOT QUESTION IS IN CASE THE CONDITION OF COMPLETION CONSTRUCTION CONTAINED IN THE SUBSTANTIV E SECTION 80-0IB(10)(A)(I) IS FACTUALLY FOUND TO BE COMPLIED WITH, CAN THE CON TENTS OF THE EXPLANATION CLAUSE (II) THEREOF, ALTER THE SITUATION? CAN AN EX PLANATION APPENDED TO A SECTION, ENLARGE THE SCOPE OF THE MAIN SECTION SO A S TO MAKE IT MORE ONEROUS FOR A TAX- PAYER? BE THAT AS IT MAY, WE DO NOT DWEL L ON THIS ASPECT ANY FURTHER, AS THE ASSESSEE HAS BEEN FOUND TO BE ELIGIBLE FOR N ECESSARY RELIEF BECAUSE THE CONDITION PRESCRIBED IN SECTION 80-IB(10)(A)(I) OF THE ACT HAS BEEN COMPLIED WITH IN VIEW OF THE STATED PRECEDENTS. WE THEREFORE , SET ASIDE THE ORDER OF THE CIT(A) ON THIS ASPECT AND HOLD THAT THE ASSESSEE CA NNOT BE DENIED THE CLAIM OF DEDUCTION U/S 80-IB(10) ON THE STRENGTH OF NON-I SSUANCE OF THE COMPLETION CERTIFICATE FOR BUILDING 'E' BY THE PUNE MUNICIPAL CORPORATION BEFORE 31-3- 2008, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 20.2 WE FIND THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TARNETAR CORPORATION (SUPRA) HAS HELD AS UNDER : WITH RESPECT TO THE SECOND CONTENTION, WE MAY RECO RD THAT THE CONTENTION OF THE REVENUE IS THAT THE ASSESSEE DID NOT COMPLETE THE HOUSING PROJECT WITHIN THE STATUTORY TIME FRAME. UNDER SUB -CLAUSE (I) OF CLAUSE (A) OF SECTION 80IB(10), THE ASSESSEE SINCE HAD GOT APPROV AL FOR THE HOUSING PROJECTS FROM THE LOCAL AUTHORITY BEFORE IST APRIL 2004 WAS REQUIRED TO COMPLETE THE CONSTRUCTION LATEST BY 31 ST MARCH 2008. RELYING ON EXPLANATION (II) TO CLAUSE (I), REVENUE CONTENDS THAT SINCE BU PERMISSION WAS GRANTED AFTER MARCH 2008, THE CONSTRUCTION MUST BE DEEMED T O HAVE BEEN COMPLETED AFTER SUCH DATE. EXPLANATION (II) READS AS UNDER : (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LO CAL AUTHORITY. CIT (APPEALS) AS WELL AS THE TRIBUNAL AFTER DETAILE D DISCUSSION CAME TO THE CONCLUSION THAT SUCH REQUIREMENT WAS NOT MAN DATORY IN NATURE. IN THE PRESENT CASE, THE ASSESSEE HAD COMPLETED THE CONSTR UCTION WELL BEFORE THE LAST 18 DATE, NAMELY 31 ST MARCH 2008 AND HAD ALSO SOLD SEVERAL UNITS WHICH W AS COMPLETED AND ACTUALLY OCCUPIED, AND IT ALSO APPLIE D FOR BU PERMISSION TO THE LOCAL AUTHORITY. THE LOCAL AUTHORITY, HOWEVER, FOR TECHNICAL REASONS, AT ONE STAGE REJECTED SUCH APPLICATION IN THE YEAR 200 6 AND THEREAFTER UPON REVISED EFFORTS FROM THE ASSESSEE GRANTED THE SAME BY ORDER DATED 19 TH MARCH 2009. WE HAVE PERUSED THE DETAILED DISCUSSION OF THE CIT( APPEALS) AS WELL AS THE TRIBUNAL ON THE ISSUE. IN PARTICULAR, THE T RIBUNAL NOTED THAT THE CONSTRUCTION WAS COMPLETED IN 2006. APPLICATION FO R BU PERMISSION TO THE MUNICIPAL AUTHORITIES WAS FILED ON 15-02-2006 WHICH WAS REJECTED ON 1-07- 06. SEVERAL RESIDENTIAL UNITS WERE OCCUPIED SINCE THE SAME WAS DONE WITHOUT NECESSARY PERMISSION. THE ASSESSEE HAD DONE WITHOU T NECESSARY PERMISSION. THE ASSESSEE HAD ALSO PAID PENALTY AND GOT SUCH OCC UPATION REGULARISED. SEVERAL TENEMENTS WERE SOLD LONG BEFORE THE LAST DA TE. IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE A SSESSEE HAD COMPLETED THE CONSTRUCTION WELL BEFORE 31 ST MARCH 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRUE THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION T O THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANC E THEREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VIE W THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHIC H DEDUCTION WAS BEING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE A SSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE THE FIN AL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJE CTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT THE SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF THE MATTER, GRANTING BENEFIT OF DEDUCTION C ANNOT BE HELD TO BE ILLEGAL. IN THE RESULT, THE TAX APPEAL IS DISMISSED. 20.3. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF HINDUSTAN SAMUHA AWAS LTD. VS. ITO VIDE ITA NOS 945 TO 950/PN /2010 ORDER DATED 30-08-2011 HAS HELD AS UNDER : 7. WE HAVE CONSIDERED THE ABOVE VIEW POINTS OF THE PARTIES IN DISPUTED. WE FIND THAT IT IS A FACT THAT THE ASSESSEE THROUGH ITS ARCHITECT HAD FILED APPLICATION WITH THE AMC FOR ISSUANCE OF OCCUPANCY CERTIFICATE ON 25-3-2008. REQUISITE FEE WAS ALSO PAID BY THE ASSESSEE IN THIS REGARD. AMC DID NOT RAISE ANY OBJECTION TO THE SAID COMPLETION CERTIFICATE OF THE ARCHITECT. THE OCCUPANCY CERTIFICATE DT.10-10-2008 HAS BEEN ISSUED BY THE AMC ONLY ON THE BASIS OF THE SAID APPLICATION DT.25-3-2008. IT IS ALSO AN UNDISPUTED FACT THAT ISSUANCE OF OCCUPANCY CERTIFICATE IS THE PREROGATIV E OF THE LOCAL AUTHORITY I.E. AMC AND IN THIS REGARD, THE ASSESSEE HAS NO CONTROL AND IT IS BEYOND THE POWER OF THE ASSESSEE TO MAKE THE AMC ISSUE THE SAI D COMPLETION/OCCUPANCY CERTIFICATE BEFORE 31.3.2008. WHAT WAS UNDER THE P OWER AND CONTROL OF THE ASSESSEE WAS ONLY TO MOVE THE AMC FOR COMPLETION CE RTIFICATE FULFILLING ALL THE REQUIREMENTS WITH THE AMC FOR ISSUANCE OF OCCUP ANCY CERTIFICATE, WHICH 19 THE ASSESSEE HAS DONE IN THE PRESENT CASE. THUS, T HE DELAY IN ISSUING THE OCCUPANCY CERTIFICATE CANNOT BE ATTRIBUTED ON THE P ART OF THE ASSESSEE TO DENY THE CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT ON TH E BASIS THAT THE PROJECT WAS NOT COMPLETED BY 31-3-2008, ESPECIALLY WHEN THE RE IS NO OBJECTION RAISED BY THE AMC REGARDING DEVIATION IN THE CONSTRUCTION OF THE PROJECT APPROVED BY THE AMC. 8. WE HAVE GONE THROUGH THE ORDERS CITED BY THE AS SESSEES REPRESENTATIVE AND FIND RELEVANT PARAGRAPHS ARE REQUIRED TO BE EXT RACTED FOR COMPLETION OF THE ORDER. THEY ARE AS FOLLOWS. A. EXTRACT FROM THE DECISION OF THE TRIBUNAL IN THE C ASE OF M/S. SATISH BORA & ASSOCIATES VIDE ITA NOS. 713 & 714/PN/2010 19. . 1. IN THE CASE OF PMC, THE COMPLETION CERTIFICATE I N PRESCRIBED FORM ISSUED BY THE LICENSED ARCHITECT ETC. WHO HAS SUPERVISED THE CONSTRUCTION IS FURNISHED WITH FOUR SETS OF COMPLET ION PLAN UNDER RULE 7.6 OF THE DC RULES OF THE PMC. THEREAFTER PMC IS REQUIRED TO RETURN ONE OF THE SETS DULY CERTIFIED AS COMPLETION PLAN TO THE OWNER ALONG WITH THE ISSUE OF FULL OCCUPANCY CERTIFICATE AFTER INSPECTION OF THE WORK UNDER RULE 7.7 OF THE DC RULES. SINCE EXP LATION (II) TO SECTION 80IB(10)(A) OF THE I.T. ACT REQUIRES COMPLE TION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY TO BE TAKEN AS THE DA TE OF COMPLETION OF THE CONSTRUCTION, A GENERAL UNDERSTANDING IN OUR VI EW IS THAT A COMPLETION CERTIFICATE WHICH IS ISSUED BY THE LOCA L AUTHORITY AFTER CONDUCTING INSPECTIONS OF CONSTRUCTION BY IT. IN CASE OF PMC, IT IS ONLY OCCUPANCY CERTIFICATE WHICH IS ISSUED ALONGWI TH CERTIFIED COMPLETION PLAN AFTER INSPECTION OF THE CONSTRUCTIO N BY IT, WE HAVE TREATED THE DATE OF ISSUANCE OF SUCH OCCUPANCY CERT IFICATE ALONGWITH CERTIFIED COMPLETION PLAN AS THE DATE OF COMPLETION CERTIFICATE OF THE CONSTRUCTION FOR THE REQUIREMENT OF EXPLANATION (II ) TO SECTION 80IB(10)(A) OF THE I.T. ACT. 2. SINCE INFACT PMC DO NOT ISSUE OCCUPANCY CERTIFIC ATE GENERALLY IN TIME AND WITH THIS UNDERSTANDING THE L EGISLATURE HAVE ALSO INTRODUCED A DEEMING PROVISION OF 21 DAYS TO P UT CONSTRAINT UPON PMC, WE AFTER DETAILED DELIBERATION IN PRECEDIGN PA RAGRAPHS HAVE COME TO A CONCLUSION THAT IN CASE OF SMALL OBJECTIO NS OF PMC RAISED AFTER EXPIRY OF DEEMING PERIOD OF 21 DAYS UNDER RU LE 7.7 OF DC RULES UNDER PMC, THE DATE WHEN THE APPLICANT ACQUIRED DEE MING SANCTION WILL BE TREATED AS THE DATE OF COMPLETION (OCCUPANC Y) CERTIFICATE TO MEET OUT THE REQUIREMENT OF EXPLANATION (II) TO SEC TION 80IB (10)(A) OF THE ACT. WE HAVE ALREADY DISCUSSED HEREINABOVE WHA T WOULD BE THE SMALL OBJECTIONS. IN BRIEF THOSE OBJECTIONS WHICH DO NOT AFFECT THE MAIN PROJECT AND ARE GENERALLY TEMPORARY CONSTRUCTI ONS. 20. WE THUS WHILE SETTING ASIDE ORDERS OF THE AUTHO RITIES BELOW DIRECT THE A.O TO ALLOW THE CLAIMED DEDUCTION U/S. 80IB(10) OF THE I.T. ACT 1961 IN THE ASSESSMENT YEARS UNDER CONSIDERATIO N TREATING THE REQUIRED DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT AS THE DATE WHEN ABOVE DISCUSSED DEEMING PROVISION PER IOD OF 21 DAYS EXPIRED I.E. 20.11.20. 20 B. EXTRACT FROM THE DECISION OF THE TRIBUNAL IN TH E CASE OF SANGHVI & DOSHI ENTERPRISE VIDE ITA NO. 259 TO 263/MDS/2010 24. NEXT OBJECTION OF THE ASSESSING OFFICER IS THAT THE PROJECT HAD TO BE COMPLETED ON OR BEFORE 31.03.2008 AND SINCE T HE ASSESSEE DID NOT FURNISH THE COMPLETION CERTIFICATE, THE ASSESSE E IS NOT ELIGIBLE FOR DEDUCTION. THE OBJECTION IS TO THE EFFECT THAT THE COMPLETION CERTIFICATE FROM CMDA IS DATED 13.6.2008, I.E. THRE E MONTHS AFTER THE DUE DATE FOR COMPLETING THE PROJECT. IN THIS CONN ECTION, IT HAS TO BE NOTED THAT THE COMPLETION CERTIFICATE IS TO BE ISSU ED BY THE LOCAL AUTHORITY. THE QUESTION IS, WHETHER CMDA CAN BE CO NSIDERED TO BE A LOCAL AUTHORITY OR NOT. THIS ISSUE HAD COME UP BEF ORE THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF JAIN HOUSING & CONSTRUCTIONS LTD. IN ITA NO.1369/MDS/2009 DATED 5.2.2010. IN TH AT CASE, ASSESSEE WAS DENIED DEDUCTION IN THE ABSENCE OF COMPLETION C ERTIFICATE BY THE CMDA BUT COMPLETION CERTIFICATE ISSUED BY THE CORPO RATION OF CHENNAI WAS PLACED ON RECORD. THE TRIBUNAL IN PARA GRAPH 3.5 OF ITS ORDER STATED THAT THE PROJECT LAYOUT PLAN MAY BE RE QUIRED TO BE APPROVED BY THE CMDA BUT AS FAR AS THE CONSTRUCTION OF THE BUILDING IS CONCERNED, THE LOCAL AUTHORITY, I.E. THE CORPORA TION OF CHENNAI IS THE APPROPRIATE AUTHORITY TO REGULATE THE CONSTRUCT ION AS PER THE BUILDING BYE-LAWS AND SANCTION PLANS. WHEN IT IS N OT DISPUTED THAT THE CORPORATION IS THE LOCAL AUTHORITY, CERTIFICATE ISS UED BY IT CANNOT BE DISREGARDED. THE ASSESSEE HAS PLACED ON RECORD THE COMPLETION CERTIFICATE ISSUED BY THE CORPORATION BY WAY OF ADD ITIONAL EVIDENCE. SINCE THE ALLOWABILITY OF THE ENTIRE DEDUCTION DEPE NDS ON ALL THE CONDITIONS BEING FULFILLED DEDUCTION DEPENDS ON ALL THE CONDITIONS BEING FULFILLED, WE ADMIT THIS ADDITIONAL EVIDENCE. THE CERTIFICATE CLEARLY MENTIONS THAT THE BUILDING WAS INSPECTED ON 23.11.2007 AND THAT IT IS FOUND TO BE SATISFIED THE BUILDING PERMI T CONDITIONS. WE MAY ALSO MENTIONS THAT THE ROLE OF CMDA IS QUITE DISTIN CT FROM THAT OF THE CORPORATION. CMDA LOOKS AT THE PLANS FROM THE PERS PECTIVE OF THE DEVELOPMENT AND URBANISATION OF THE CITY AS A WHOLE . ON THE OTHER HAND, THE ROLE OF THE CORPORATION WHILE ISSUING CO MPLETION CERTIFICATE IS TO SEE THAT THE UNIT IS HABITABLE IN ALL RESPECT S LIKE CIVIC AMENITIES AND SO ON. EVEN FOR THE SAKE OF ARGUMENT IF THE CM DA CERTIFICATE IS TO BE CONSIDERED, THEN IN THAT CASE, THE ASSESSEE D ID APPLY FOR THE COMPLETION CERTIFICATE TO CMDA CERTIFICATE ON 13.3. 2006. IT IS A DIFFERENT MATTER THAT CMDA RAISED CERTAIN OBJECTION S AND THE MATTER WENT UPTO THE HONBLE HIGH COURT ALSO. HOWEVER, T HE FACT REMAINS THAT THE PROJECT WAS COMPLETED MUCH BEFORE THE DUE DATE, MAY BE WITH CERTAIN DEFECTS. ALSO, IT HAS TO BE NOTED THAT THE CMDA CERTIFICATE IS DATED 13.6.2008, I.E. ONLY TWO MONTHS AND THIRTEEN DAYS BEYOND THE DUE DATE. IT IS INCONCEIVABLE THAT THE TYPE OF DEF ECTS WHICH WERE POINTED OUT BY THE CMDA COULD HAVE BEEN RECTIFIED I N SUCH A SHORT PERIOD. BE THAT AS IT MAY, THE HONBLE HIGH COURT ALSO RATIFIED THE DEVIATIONS AND DIRECTED THE CMDA TO CONSIDER THE EX PLANATION OF THE ASSESSEE. ALL THESE FACTS GO TO POINT THAT THE PR OJECT WAS INDEED COMPLETED BEFORE THE 31.3.2008. THUS, THIS GROUND ALSO HAS NO FORCE TO DENY THE ASSESSEE THE IMPUGNED DEDUCTION. C EXTRACT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. D.K.CONSTRUCTION VIDE ITA 243/IND/2010 21 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREF ULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND REL EVANT MATERIAL PLACED ON RECORD TOWARDS WHICH OUR ATTENTION WAS IN VITED DURING THE COURSE OF HEARING BY THE LD. AUTHORIZED REPRESENTAT IVE AND THE LD. SENIOR D.R. PROVISIONS OF SECTION 80IB ALLOWS CLAI M FOR DEDUCTION IN RESPECT OF HOUSING PROJECT, WHICH HAS BEEN APPROVED PRIOR TO 1.4.2004 AND ALSO COMPLETED BEFORE 31.3.2008. DURING THE C OURSE OF ASSESSMENT WITH REGARD TO ASSESSEES CLAIM OF DEDUC TION U/S 80IB IN RESPECT OF ITS D.K.HONEY HOMES PROJECT, THE AO HAS ASKED THE ASSESSEE TO FURNISH THE CERTIFICATE OF COMPLETION O F THIS PROJECT M/S. D.K.HONEY HOMES. THE AO ALSO DIRECTLY CALLED INFOR MATION FROM THE LOCAL AUTHORITIES BY ISSUING SUMMONS U/S.133(6) AND A LETTER WAS ISSUED BY THE COMPETENT AUTHORITY DATED 11 TH NOVEMBER, 2008, CONFIRMING THAT NO COMPLETION CERTIFICATE HAS BEEN ISSUED BY THIS OFFICE. ACCORDINGLY, THE ASSESSEES CLAIM FOR DEDU CTION U/S 80-IB WAS DECLINED. SECTION 80IB CLEARLY DEFINES THE DATE OF COMPLETION AS DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIF ICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORI TIES, IT MEANS LOCAL AUTHORITIES IS COMPETENT TO CERTIFY THE DATE OF COMPLETION OF HOUSING PROJECT. THE DATE OF ISSUE OF SUCH LETTER BY THE LOCAL AUTHORITIES IS NOT SO CRUCIAL BUT IT SHOULD HAVE CL EARLY MENTIONED THE DATE OF COMPLETION OF PROJECT. WHEN THE PROJECT IS COMPLETED ON 31.3.2008 AND THE ASSESSEE HAS INFORMED REGARDING S UCH COMPLETION, THE LOCAL AUTHORITIES MAY TAKE ITS OWN TIME FOR ISS UE OF CERTIFICATE, WHICH MAY BE EVEN AFTER 6-7 MONTHS, BUT THE LETTER SO ISSUED BY THE LOCAL AUTHORITIES SHOULD CLEARLY MENTION THE DATE O F COMPLETION OF SUCH PROJECT. MERELY BECAUSE SUCH CERTIFICATE IS I SSUED AFTER GAP OF 8- 9 MONTHS OR EVEN ONE YEAR, WILL NOT ADVERSELY AFFEC T THE ASSESSEE IF IT HAS MENTIONED CLEARLY THE DATE OF COMPLETION OF PRO JECT PRIOR TO 31.3.2008. ONCE THE LETTER FOR COMPLETION OF PRO JECT IS GIVEN BY THE ASSESSEE TO THE LOCAL AUTHORITY, IT IS THE DUTY OF THE LOCAL AUTHORITY TO VERIFY PHYSICALLY THE PROJECTS STATED TO BE COMPLET ED FROM ITS OWN PARAMETERS. THIS PROCESS MAY TAKE TIME AND, THERE FORE, THE DATE OF ISSUE OF LETTER IS NOT SO CRUCIAL TO DETERMINE THE ASSESSEES ELIGIBILITY FOR CLAIM OF DEDUCTION AS PER EXPLANATION (II) OF S ECTION 80IB(10)(A) OF THE INCOME-TAX ACT, 1961. WHAT IS CRUCIAL IS D ATE MENTIONED IN THE LETTER SO ISSUED CERTIFYING COMPLETION OF THE PROJE CT. THUS, THE DATE OF ISSUE OF LETTER IS NOT IMPORTANT, BUT THE DATE MENT IONED IN THE LETTER CERTIFYING COMPLETION OF PROJECT IS IMPORTANT. WE , THEREFORE, DO NOT FIND MAY MERIT IN THE OBSERVATION OF THE LOWER AUTH ORITIES TO THE EFFECT THAT THE DATE OF COMPLETION SHALL BE TAKEN THE DATE ON WHICH CERTIFICATE IS PHYSICALLY ISSUED BY THE LOCAL AUTHORITIES. 9. FROM THE ABOVE, ONE THIS IS CLEAR THAT THE DATE THAT APPEAR ON THE ARCHITECTS COMPLETION CERTIFICATE FILED BEFORE THE LOCAL AUTHORITY IS A RELEVANT ONE. IN THE INSTANT CASE, THE SAID DATE IS 25-3-2008 AND THE ASSESSEE FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITIES I NTIMATING THE COMPLETION OF THE PROJECT. THE SAID CERTIFICATE/ INTIMATION WAS A CCEPTED BY THE LOCAL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOC AL AUTHORITY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF T HE BUILDING OR THE COMPLETION OF THE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINI NG THE COMPLETION 22 CERTIFICATE ON 10-10-2008 IS CERTAINLY NOT ATTRIBUT ABLE TO THE ASSESSEE AND OBTAINING THE SAID CERTIFICATE BEFORE 31.3.2008 IS BEYOND THE CONTROL OF THE ASSESSEE. ASSESSEES JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE APPROVED PLANS AND INTIMATION O F THE SAME TO THE LOCAL AUTHORITY BY WAY OF FILING THE REQUISITE FORMS TOGE THER WITH THE COMPLETION CERTIFICATE GIVEN BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER , THE LOCAL AUTHORITY HAS NEITHER OBJECTED TO THE SAID APPLICATION OF THE ASS ESSEE AND THE ARCHITECT BY RAISING ANY OBJECTIONS NOR ACCEPTED BY ISSUE OF SAI D COMPLETION CERTIFICATE TILL 10.10.2008. THEREFORE, THE DELAY IN GRANT OF THE SA ID CERTIFICATE IS CERTAINLY NOT ATTRIBUTABLE TO THE ASSESSEE. THEREFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFAULTER ON THIS ACCOUNT AND THUS, THE AO HAS ERRE D IN DENYING THE DEDUCTION U/S 80IA(10) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL AR E ALLOWED . 20.4. IN VIEW OF THE ABOVE DECISIONS WE ARE OF THE CONSIDERED OPINION THAT SINCE THE ASSESSEE HAS DONE WHATEVER POSSIBLE ON HI S PART, I.E. DULY APPLIED TO PMC FOR ISSUE OF COMPLETION CERTIFICATE, HANDED OVE R POSSESSION OF THE FLATS/ROW HOUSES TO THE RESPECTIVE BUYERS, PMC HAS STARTED LEVYING MUNICIPAL TAXES AND ELECTRICITY BILLS PAID BY RESPECTIVE OWNE RS, THEREFORE, DEDUCTION U/S.80IB(10) UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE CANNOT BE DENIED TO THE ASSESSEE FOR NON-RECEIPT OF COMPLETION CERTI FICATE FROM PMC BEFORE 31- 03-2008 WHICH WAS BEYOND THE CONTROL OF THE ASSESSE E. THIS VIEW OF OURS IS FORTIFIED BY OUR DECISION IN THE CASE OF M/S. RAMSU KH PROPERTIES VS. DCIT VIDE ITA NO.84/PN/2011 ORDER DATED 25-07-2012 FOR A .Y. 2007-08 (WHEREIN BOTH OF US ARE PARTIES) WHEREIN IT HAS BEEN HELD AS UNDER: 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT THE ASSESSEE IS A FIRM ENGAGED IN BUSINESS OF BUILDER AND PROMOTER. THE ISSUE BEFORE US IS REGARDING ALLOWABILITY OF DEDUCT ION U/S.80IB(10) OF THE ACT ON PARTIALLY COMPLETE PROJECT. THE ASSESSING OFFIC ER HAS DENIED THE DEDUCTION ON THE GROUND THAT PROJECT WAS NOT COMPLE TE WITHIN THE STIPULATED TIME. THERE IS NO DISPUTE WITH REGARD TO OTHER CON DITIONS LAID U/S.80IB(10) OF THE ACT, I.E., COMMENCEMENT OF PROJECT, AREA OF LAN D OF PROJECT, ETC. ASSESSEES HOUSING PROJECT WAS APPROVED VIDE COMMEN CEMENT CERTIFICATE NO.3837/04 DATED 13.01.2005 OUT OF WHICH COMPLETION CERTIFICATE WAS OBTAINED AND FURNISHED BEFORE THE ASSESSING OFFICER FOR 173 OUT OF 205 FLATS. SAME WAS REJECTED BY THE ASSESSING OFFICER AND CONF IRMED BY THE CIT(A). THE REQUEST FOR GRANTING WHOLE DEDUCTION IN RESPECT OF WHOLE PROJECT HAS RIGHTLY BEEN REJECTED BECAUSE DEDUCTION U/S.80IB(10 ) COULD NOT BE GRANTED TO ASSESSEE ON INCOMPLETE CONSTRUCTION AT RELEVANT POI NT OF TIME. REGARDING PROPORTIONATE DEDUCTION IN RESPECT OF 173 OF 205 FL ATS OF PROJECT COMPLETED AS RECOGNIZED BY LOCAL AUTHORITY, I.E., PMC IN ITS COM PLETION CERTIFICATE NO.BCO/03/01333 DATED 31.03.2008, THE LD. AUTHORISE D REPRESENTATIVE HEAVILY RELIED ON DECISION OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRIGADE ENTERPRISES P. LTD. (SUPRA), AIR D EVELOPER (SUPRA), SHETH DEVELOPERS (SUPRA) AND ALSO G.V.CORPORATION (SUPRA) , WHEREIN DEDUCTION U/S.80IB(10) WAS DENIED AS SIZE OF SOME OF THE RESI DENTIAL UNITS EXCEEDED PRESCRIBED LIMIT AS LAID DOWN U/S.80IB(10) OF THE A CT. ABOVE MENTIONED DECISIONS ARE APPLICABLE IN THEIR OWN SPHERE, I.E. ON POINT OF EXCESS AREA OF SOME OF THE FLATS WHICH HOLD GOOD IN ITS OWN SPHERE . HOWEVER, IN CASE BEFORE US, DEDUCTION U/S.80IB(10) OF THE ACT HAS BEEN REJE CTED ON THE GROUND THAT CONDITION OF COMPLETION OF PROJECT BEFORE THE DUE D ATE I.E., 31.03.2008 AS LAID DOWN U/S.80IB(10)(C) OF THE ACT, HAS NOT BEEN COMPL IED BY ASSESSEE WHICH IS BASIC CONDITION FOR ALLOWABILITY OF DEDUCTION U/S.8 0IB(10) OF THE ACT. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (SUPRA), WHER EIN CONDITION OF COMPLETION AS LAID DOWN IN SECTION 80IB(10)(A) COUL D NOT BE COMPLIED WITH BECAUSE OF A STAY BEING GRANTED BY MRTP COURT. THUS FAULT OF INCOMPLETION 23 OF CONSTRUCTION WAS NOT ATTRIBUTABLE TO ASSESSEE. IN CASE SUCH A CONTINGENCY EMERGES WHICH MAKES THE COMPLIANCE WITH PROVISION I MPOSSIBLE, THEN BENEFIT BESTOWED ON AN ASSESSEE CANNOT BE COMPLETELY DENIED . SUCH LIBERAL INTERPRETATION SHOULD BE USED IN FAVOUR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLETING PROJECT IN TIME FOR THE REASONS BEYON D HIS CONTROL. IN CASE BEFORE US, AS STATED ON BEHALF OF ASSESSEE, THAT AS SESSEE SUBMITTED CERTAIN MODIFICATIONS/RECTIFICATIONS FOR TOP FLOORS OF BUIL DING. THE SAID MODIFICATION/RECTIFICATION COULD NOT BE COMPLETED A S LOCAL AUTHORITY COULD NOT APPROVE THE MODIFICATION AS THEIR FILES HAVE BEEN T AKEN OVER BY CONCERN INTELLIGENCE DEPARTMENT FOR INVESTIGATION OF VIOLAT ION OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION AT RELEVANT POIN T OF TIME. THIS FACT HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. THUS, ASSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELLED THE IMP OSSIBILITY ON PART OF THE ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME. I T IS SETTLED LEGAL POSITION THAT THE LAW ALWAYS GIVE REMEDY AND THE LAW DOES WRONG T O NO ONE. WE AGREE TO PROPOSITION PUT FORWARD BY LD. DEPARTMENTAL REPRESE NTATIVE THAT PLAIN READING OF SECTION 80IB(10) OF THE ACT SUGGESTS ABO UT ONLY COMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONGW ITH THE WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMA L CIRCUMSTANCES. HOWEVER, IN CASE BEFORE US, ASSESSEE WAS PREVENTED BY REASON ABLE CAUSE TO COMPLETE CONSTRUCTION IN TIME DUE TO INTERVENTION OF CID ACT ION ON ACCOUNT OF VIOLATION OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. ASSESSEE WAS INCAPACITATED TO COMPLETE THE SAME IN TIME DUE TO REASONS BEYOND HIS CONTROL. ASSESSEE SHOULD NOT SUFFER FOR SAME. THE REVISION OF PLAN IS VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN A WAY BY STRICT PROVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FO R PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. A T THE SAME TIME, RESTRICTION THEREON TOO HAS TO BE CONSTRUED STRICTLY SO AS TO A DVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVIS IONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUE TO EFFECTUATE THE LEGISLATIVE INTENTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, WE HOLD THAT ASSESSEE IS ENTITLED FOR BENEFIT U/S.80IB(10) OF TH E ACT IN RESPECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMIT. THE ASSESSING OF FICER IS DIRECTED ACCORDINGLY. 7. AS A RESULT, THE APPEAL OF THE ASSESSEE IS DISPO SED OFF AS INDICATED ABOVE. IN THE LIGHT OF THE ABOVE DISCUSSION THE ORDER OF T HE CIT(A) DENYING BENEFIT OF DEDUCTION U/S.80IB(10) FOR NON-RECEIPT OF COMPLETIO N CERTIFICATE IS SET-ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE ON THIS ISSU E ARE ALLOWED. 8.4 WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF M/S. CITY DEVELOPMENT CORPORATION VS. ACIT VIDE ITA NO.1489/P N/2009 AND ITA NO.1100/PN/2010 ORDER DATED 22-09-2012 FOR A.Y. 2006-07 AND 2007-08 HAS OBSERVED AS UNDER : 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. QUITE CLEARLY, THE DISPUTE IS WITH REGARD TO THE COMPLETION CERTIF ICATE OF BUILDING E HAVING BEEN ISSUED BY THE LOCAL AUTHORITY I.E. PUNE MUNICI PAL CORPORATION, ON 5-5- 2008. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-I B(10) REQUIRES THAT THE CONSTRUCTION OF THE PROJECT IN QUESTION IS TO BE CO MPLETED ON OR BEFORE 31-3- 2008. CLAUSE (II) OF EXPLANATION BELOW SECTION 80- IB(10)(A) PRESCRIBES THAT 24 THE DATE OF COMPLETION OF CONSTRUCTION OF HOUSING P ROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RES PECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. IN THE P RESENT CASE, IT HAS BEEN ISSUED ON 5-5-2008 AND HENCE THE CASE SET UP BY THE REVENU E THAT THE COMPLETION IS BEYOND THE MANDATED DATE OF 31-3-2008. IN THIS BAC KGROUND, WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE APPLIED FOR O BTAINING THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING E ON 12-3-2008 . FROM THE DISCUSSION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, W HEREIN THE FACTUAL ASSERTIONS OF THE ASSESSEE HAVE BEEN REPRODUCED, IT IS QUITE EVIDENT THAT THE ASSESSEE ASSERTED THAT BEFORE 31-3-2008, THE CONSTR UCTION OF BUILDING WAS COMPLETE IN ALL RESPECTS; THAT ELECTRICAL CONNECTI ON WAS PROVIDED TO EACH FLAT OWNER; ROAD WAS COMPLETE; WATER AND DRAINAGE CONNE CTION WAS AVAILABLE; SEWERAGE SYSTEM WAS OPERATING; CLUB HOUSE WAS FUNCT IONAL; ETC. THE ASSESSEE ALSO POINTED OUT THAT THE LOCAL AUTHORITY HAD ALSO INITIATED PROPERTY TAX ASSESSMENTS FOR EACH OF THE FLATS AND THE SAME DEMO NSTRATED THAT ALL THE FLATS IN THE BUILDING WERE COMPLETE. IN FACT, IN PARA 6. 9 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER NOTICED THAT THE FACTS THAT THE FLATS WERE COMPLETED AND POSSESSION GIVEN WILL NOT COME TO THE RESCUE OF THE ASSESSEE . THE AFORESAID FINDING OF THE ASSESSING OFFICER SUPPORTS THE ASSER TION MADE BY THE ASSESSEE THAT FACTUALLY SPEAKING CONSTRUCTION OF FLATS IN BU ILDING E WAS ALSO COMPLETE AND POSSESSION HANDED OVER TO THE ACTUAL USER/CUSTO MERS PRIOR TO 31-3-2008. PERTINENTLY, ON THE BASIS OF THE ARCHITECTS CERTIF ICATE CONFIRMING COMPLETION OF CONSTRUCTION OF BUILDING, THE ASSESSEE APPLIED F OR THE COMPLETION CERTIFICATE TO THE PUNE MUNICIPAL CORPORATION ON 12-3-2008. IT HAS BEEN POINTED OUT BEFORE US THAT THE LOCAL AUTHORITY I.E. PUNE MUNICI PAL CORPORATION DID NOT RAISE ANY OBJECTION WITH REGARD TO ASSESSEES APPLI CATION AND THE CERTIFICATE FOR BUILDING E WAS THEREAFTER ISSUED ON 5-5-2008. TH E MOOT QUESTION IS AS TO WHETHER IN SUCH A SITUATION CAN IT BE SAID THAT THE ASSESSEES PROJECT DID NOT COMPLY WITH THE CONDITION PRESCRIBED IN SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT WHEREBY THE CONSTRUCTION WAS T O BE COMPLETED ON OR BEFORE 31-3-2008. SOMEWHAT SIMILAR SITUATION WAS C ONSIDERED BY OUR CO- ORDINATE BENCH IN THE CASE OF HINDUSTAN SAMUTHA AWA S LTD. (SUPRA) WHEREIN ALSO ON THE STRENGTH OF ARCHITECTS CERTIFICATE, AN APPLICATION FOR OBTAINING COMPLETION CERTIFICATE WAS MOVED TO THE LOCAL AUTHO RITY ON 25-2-2008 BUT IN ACTUALITY THE COMPLETION CERTIFICATE WAS ISSUED BY THE LOCAL AUTHORITY ON 10- 10-2008. THE TRIBUNAL NOTICED THAT THE DELAY IN IS SUING COMPLETION CERTIFICATE WAS NOT ATTRIBUTABLE TO THE ASSESSEE AS NO OBJECTIONS WERE RAISED BY THE LOCAL AUTHORITY. THE TRIBUNAL AFTER CONSIDERIN G ITS EARLIER DECISIONS IN THE CASE OF M/S. SATISH BOHRA & ASSOCIATES VS. ACIT IN ITA NO. 713 AND 714/PN/2010 FOR A.Y. 2004-05 AND 2005-06 DATED 7-1- 2011; M/S. D.K. CONSTRUCTIONS VS. ITO ITA NO. 243/PN/2010 FOR A.Y. 2006-07; DATED 6-12- 2010 AND SANGHVI AND DOSHI ENTERPRISES VS. ITO AND OTHERS ITA NO. 259 TO 263/MDS/2010 DATED 19-5-2011 FOR A.Y. 2005-06 AND 2 006-07 (TM) HAS CONCLUDED AS FOLLOWS: FROM THE ABOVE, ONCE THIS IS CLEAR THAT THE DATE THAT APPEARS ON THE ARCHITECTS COMPLETION CERTIFICATE FILED BEF ORE THE LOCAL AUTHORITY IS RELEVANT ONE. IN THE INSTANT CASE, TH E SAID DATE IS 25-3-2008 AND THE ASSESSEE FILED REQUISITE FORM BEF ORE THE LOCAL AUTHORITIES INTIMATING THE COMPLETION OF THE PROJECT. THE SAID CERTIFICATE/INTIMATION WAS ACCEPTED BY THE LOC AL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTIONS. LOCAL AUTHOR ITY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF THE SAME AS PER THE P LANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERT IFICATE ON 10-10-2008 IS CERTAINLY NOT ATTRIBUTABLE TO THE ASS ESSEE AND 25 OBTAINING THE SAID CERTIFICATE BEFORE 31-3-2008 IS BEYOND THE CONTROL OF THE ASSESSEE. ASSESSEES JOB INCLUDES T HE COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE A PPROVED PLANS AND INTIMATION OF THE SAME TO THE LOCAL AUTHO RITY BY WAY OF FILING THE REQUISITE FORMS TOGETHER WITH THE COM PLETION CERTIFICATE GIVEN BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE ASSESSEE HAS DONE HIS JOB SCRUPULOUSLY IN T HIS CASE. HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJECTED T O THE SAID APPLICATION OF THE ASSESSEE AND THE ARCHITECT BY RA ISING ANY OBJECTIONS FOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10-10-2008. THEREFORE, THE DELAY IN GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTRIBUTABLE TO THE AS SESSEE. THEREFORE, IN OUR OPINION, THE ASSESSEE IS NOT DEFA ULTER ON THIS ACCOUNT AND THUS, THE AO HAS ERRED IN DENYING THE D EDUCTION U/S 80-IB(10) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED 13. THE AFORESAID DECISION OF THE TRIBUNAL IS CLEAR LY APPLICABLE TO THE FACTS OF THE PRESENT CASE ALSO. IN THE PRESENT CASE, THE COMPLETION CERTIFICATE WAS APPLIED FOR BEFORE 31-3-2008 I.E. ON 12-3-2008. IT IS UNDISPUTABLE THAT THE APPLICATION OF THE ASSESSEE HAS BEEN APPROVED BY TH E LOCAL AUTHORITY WITHOUT RAISING ANY AMENDMENT OR OBJECTION, AS HAS BEEN ASS ERTED BY THE ASSESSEE ALL ALONG AND THE DELAYED ISSUANCE OF THE COMPLETION CE RTIFICATE BY THE LOCAL AUTHORITY ON 5-5-2008, ALBEIT AFTER THE MANDATED DA TE OF 31-3-2008 CANNOT BE ATTRIBUTED TO THE ASSESSEE. IN THIS BACKGROUND OF T HE MATTER, WE THEREFORE, FIND AMPLE FORCE IN THE PLEA OF THE ASSESSEE THAT DENIAL OF DEDUCTION U/S 80-IB(10) ON SUCH SCORE IS UNCALLED FOR. IN CONCLUSION THERE FORE, IN THE INSTANT FACTUAL BACKGROUND, WE HOLD THAT THE ASSESSEE HAS COMPLIED WITH THE CONDITION OF COMPLETING THE CONSTRUCTION OF THE PROJECT WITHIN T HE MANDATED DATE OF 31-3- 2008 EVEN WITH REGARD TO BUILDING E, FOLLOWING TH E PARITY OF THE REASONING LID DOWN IN THE CASE OF HINDUSTAN SAMUTHA AWAS LTD. (SUPRA). . 14. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(1 0) OF THE ACT REQUIRES THAT THE UNDERTAKING, DEVELOPING AND BUILDING A HOU SING PROJECT COMPLETES SUCH CONSTRUCTION OR BEFORE 31-3-2008. IN THE PRE SENT CASE, ASSESSEE HAS FACTUALLY ASSERTED RIGHT FROM THE STAGE OF ASSESSME NT PROCEEDINGS, THAT THE CONSTRUCTION OF BUILDING E WAS COMPLETE IN ALL RE SPECTS AS PER SANCTIONED PLAN AND ALL THE FLATS WERE HANDED OVER TO THE ACTU AL USERS/CUSTOMERS PRIOR TO 31-3-2008. IN THE BACKGROUND OF THE AFORESAID FACTU AL POSITION WHICH HAS REMAINED UNCONTROVERTED, IN OUR VIEW, ON A PLAIN RE ADING OF SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) THE CONDITION PRESC RIBED THEREIN IS FULFILLED., INASMUCH AS THE CONSTRUCTION OF BUILDING E WAS CO MPLETE BEFORE 31-3-2008. HOWEVER, ON THE READING OF CLAUSE (II) OF THE EXPLA NATION BELOW SEC. 80- IB(10)(A) OF THE ACT, IT EMERGES THAT THE COMPLETIO N OF CONSTRUCTION OF A HOUSING PROJECT IS TO BE TAKEN TO BE THE DATE ON W HICH COMPLETION CERTIFICATE IS ISSUED BY THE LOCAL AUTHORITY, WHICH IN THE PRES ENT CASE IS ISSUED ON 5-5- 2008 I.E. BEYOND THE STIPULATED DATE OF 31-3-2008. THE MOOT QUESTION IS IN CASE THE CONDITION OF COMPLETION CONSTRUCTION CONTA INED IN THE SUBSTANTIVE SECTION 80-0IB(10)(A)(I) IS FACTUALLY FOUND TO BE C OMPLIED WITH, CAN THE CONTENTS OF THE EXPLANATION CLAUSE (II) THEREOF, AL TER THE SITUATION? CAN AN EXPLANATION APPENDED TO A SECTION, ENLARGE THE SCOP E OF THE MAIN SECTION SO AS TO MAKE IT MORE ONEROUS FOR A TAX-PAYER? BE THA T AS IT MAY, WE DO NOT DWELL ON THIS ASPECT ANY FURTHER, AS THE ASSESSEE H AS BEEN FOUND TO BE ELIGIBLE FOR NECESSARY RELIEF BECAUSE THE CONDITION PRESCRIB ED IN SECTION 80- IB(10)(A)(I) OF THE ACT HAS BEEN COMPLIED WITH IN V IEW OF THE STATED PRECEDENTS. WE THEREFORE, SET ASIDE THE ORDER OF TH E CIT(A) ON THIS ASPECT AND HOLD THAT THE ASSESSEE CANNOT BE DENIED THE CLAIM O F DEDUCTION U/S 80-IB(10) ON THE STRENGTH OF NON-ISSUANCE OF THE COMPLETION C ERTIFICATE FOR BUILDING E 26 BY THE PUNE MUNICIPAL CORPORATION BEFORE 31-3-2008, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 8.5 SINCE IN THE INSTANT CASE THE ASSESSEE UNDISPUT EDLY HAS APPLIED TO THE PMC FOR OCCUPANCY CERTIFICATE ON 03-03-2008 AND SINCE THE PMC HAS NOT REJECTED THE APPLICATION, THEREFORE, IN VIEW OF THE DECISIONS CITED ABOVE THE ASSESSEE CANNOT BE FAULTED FOR NON-RECEIP T OF THE OCCUPANCY CERTIFICATE. THE DECISION RELIED ON BY THE LD. DEP ARTMENTAL REPRESENTATIVE IS NOT APPLICABLE TO THE FACTS OF TH E PRESENT CASE AND IS DISTINGUISHABLE ON FACTS. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE WE HOLD THAT THE ASSESSEE HAS SATISFIED THE FIRST O BJECTION RAISED, I.E. NON- RECEIPT OF THE COMPLETION CERTIFICATE BEFORE THE DU E DATE. WE ACCORDINGLY HOLD THIS ISSUE IN FAVOUR OF THE ASSESSEE. 9. NOW COMING TO THE SECOND OBJECTION RAISED BY THE REVENUE, I.E. THE BUILT UP AREA OF SOME OF THE RESIDENTIAL UNITS WAS IN EXCESS OF 1500 SQ.FT WHEN THE AREA OF ADJACENT TERRACE AND ENTRANC E PORCH ARE INCLUDED WE FIND THE DATE OF COMMENCEMENT OF THE PROJECT IN THE INSTANT CASE IS 27-08-2002. IN OTHER WORDS THE PROJECT HAS BEEN AP PROVED BY THE LOCAL AUTHORITY BEFORE 01-04-2004. IT IS THE CASE OF THE REVENUE THAT ONCE THE BALCONY AND TERRACE AREA ARE INCLUDED THE BUILT UP AREA OF SOME OF THE UNITS EXCEED 1500 SQ.FT. AND THEREFORE THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10). IT IS THE CASE OF THE ASSE SSEE THAT SINCE THE PROJECT WAS APPROVED PRIOR TO 01-04-2004, THEREFORE , THE DEFINITION OF BUILT UP AREA AS PER SECTION 80IB(14) (A) WHICH IS INSERTED W.E.F. 01-04- 2004 DOES NOT APPLY TO PROJECTS APPROVED PRIOR TO T HAT DATE AND THEREFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10). WE FIND SIMILAR ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF ITO VS. M/S. PRIME 27 PROPERTIES VIDE ITA NO.838/PN/2010 ORDER DATE 26-04 -2012 FOR A.Y. 2005-06. IN THIS CASE ALSO THE DEDUCTION U/S.80IB( 10) WAS DENIED SINCE AFTER INCLUDING THE BALCONY/TERRACE THE TOTAL BUILT UP AREA OF SOME OF THE FLATS EXCEEDED 1500 SQ.FT. THE LD. CIT(A) UPHELD T HE ORDER OF THE ASSESSING OFFICER. ON FURTHER APPEAL BY THE ASSESS EE THE TRIBUNAL VIDE PARA 11 OF THE ORDER ALLOWED THE CLAIM OF THE ASSES SEE BY HOLDING AS UNDER : 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES. THERE IS NO DISPUTE TO THE FACT THAT THE PROJECT WA S APPROVED PRIOR TO 1.4.2004. THEREFORE, THE DEFINITION OF BUILT UP AREA AS PER SEC. 80 IB (14)(A) WHICH IS INSERTED W.E.F. 1.4.2004 DOES NOT APPLY TO PROJECTS APPROVED PRIOR TO THAT DATE. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF D.S. KULKARNI & ASSOCIATES (SUPRA) AT PARA 20 OF THE ORDER HAS OBS ERVED AS UNDER: 20. BY APPLYING THE PRINCIPLE OF HARMONIOUS CONSTR UCTION TO INTERPRET THE PROVISIONS UNDER SUB-SECTION (10) TO SECTION 80IB AS AMENDED W.E.F. 1.4.2005 WE COME TO THE CONCLUSION T HAT THE LEGISLATURE ALWAYS INTENDED THAT THE PROJECT MUST B E APPROVED BY THE LOCAL AUTHORITY, THUS IN THOSE APPROVED PROJECTS WH ERE CONSTRUCTION HAS BEEN STARTED MUCH EARLIER THAN 1.4.2005, THE AS SESSEES ARE REQUIRED TO COMPLETE THE PLAN AS IT HAS BEEN APPROV ED. AS PUTTING SUCH ASSESSEES TO COMPLETE THE PLAN MEETING OUT CON DITION UNDER CLAUSE (D) OF THE SUB-SECTION WOULD LEAD INTO ABSUR DITY AND IMPOSSIBILITY FOR THE ASSESSEE AND IN CONTRADICTIO N TO THE PROVISIONS U/S. 80 IB(10) AS PREVAILED AT THE TIME OF APPROVAL AND COMMENCEMENT OF THE CONSTRUCTION OF THE PROJECT WELL BEFORE 1.4 .2005. BOMBAY BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AK RUTI J.V (SUPRA) HAS DISCUSSED ALL THESE RELEVANT ASPECTS RAISED BY THE DEPARTMENT. IN THE CASE OF HIRANANDANI AKRUTI J.V V/S. DCIT, IT HAS BEEN HELD THAT THE LAW AS EXISTED WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL AND PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACC ORDED AND WHEN THE ASSESSEE COMMENCED DEVELOPMENT IS TO BE APPLIE D. IN THE PRESENT CASES, AS PER PAGE NOS. 17 AND 20 OF THE PAPER BOOK IN THE CASE OF OPEL SHELTER THE PROJECT WAS COMMENCED ON 23.2.2001 AND EVEN COMPLETED ON 14.5.2004, SIMILARLY AS PER THE CONTEN TS OF PAGE NO.2 OF THE ASSESSMENT ORDER AND PAGE NO. 41 OF THE PAPER BOOK IN THE CASE OF D.S. KULKARNI AND ASSOCIATES, THE PROJECT WAS COMM ENCED ON 12.4.2001 AND COMPLETED IN THE MONTH OF NOVEMBER 20 03. THUS, THE ASSESSEES WERE SUPPOSED TO COMPLETE THE PROJECTS AS PER THE LAW AS EXISTED IN THE A.Y. 2001-02 IN THE CASE OF OPEL SHE LTERS AND IN THE A.Y. 2002-03 IN THE CASE OF D.S. KULKARNI AND ASSOCIATE S. WE THUS FOLLOWING THE DECISION IN THE CASE OF HIRANANDANI AKRUTI JV V/S. DCIT (SUPRA) HOLD THAT AMENDED PROVISIONS UNDER SEC TION 80 IB(10) W.E.F. 1.4.2005 ARE NOT APPLICABLE IN THE PRESENT C ASE, HENCE ASSESSEES ARE ELIGIBLE FOR THE CLAIMED DEDUCTION U/S. 80 IB ( 10) OF THE ACT. WE ACCORDINGLY DIRECT THE A.O TO ALLOW THE CLAIMED DED UCTION TO THE ASSESSEES. 28 12. WE FIND SIMILAR VIEW HAS BEEN TAKEN BY THE MUM BAI BENCH OF THE TRIBUNAL IN THE CASE OF HAWARE CONSTRUCTIONS (P) LT D. (SUPRA). SINCE THE PROJECTS HAS BEEN APPROVED PRIOR TO 1.4.2004 AND SINCE AFTER EXCLUDING THE BALCONY/TERRACE, THE TOTAL BUILT UP AREA OF NONE O F THE FLATS EXCEEDS 1500 SQ. FT., THEREFORE, RESPECTFULLY FOLLOWING THE DECISIO NS CITED (SUPRA) WE HOLD THAT THE BENEFIT OF DEDUCTION U/S. 80 IB (10) CANNOT BE DENIED TO THE ASSESSEE. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDERS OF THE CIT(A) AND DIRECT THE A.O TO ALLOW THE BENEFIT OF DEDUCTION U/S. 80 IB (1 0) CLAIMED BY THE ASSESSEE. 9.1 RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH OF THE TRIBUNAL WE HOLD THAT THE BENEFIT OF DEDUCTION U/S.80IB(10) CANNOT BE DENIED TO THE ASSESSEE ON THIS GROUND. THEREFORE, THE ASSESSEE ALSO SUCCEEDS ON THIS ISSUE. THUS, IN THE LIGHT OF THE ABOVE DISCUSSION, THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10). WE HOLD AND DIRECT ACCORDINGLY. THE FIRST GROUND RAISED BY THE ASSESS EE IS ACCORDINGLY ALLOWED. SINCE THE ASSESSEE SUCCEEDS ON THE FIRST GROUND, THE SECOND GROUND, WHICH IS AN ALTERNATE GROUND BECOMES ACADEM IC IN NATURE AND THEREFORE, THE SAME IS NOT BEING ADJUDICATED. ITA NO.667/PN/2012 (A.Y. 2005-06) : ITA NO.431/PN/2011 (A.Y. 2007-08) : 10. AFTER HEARING BOTH THE SIDES WE FIND THE GROUND S RAISED BY THE ASSESSEE IN THE ABOVE 2 APPEALS ARE IDENTICAL TO GR OUNDS IN ITA NO.1465/M/2009. THE DEDUCTION U/S.80IB(10) WAS DEN IED ON ACCOUNT OF NON-RECEIPT OF COMPLETION CERTIFICATE AND THE AREA OF SOME OF THE FLATS WERE IN EXCESS OF 1500 SQ.FT. AFTER INCLUDING THE BALCONY/TERRACE AREA. SINCE FACTS IN THE ABOVE 2 APPEALS ARE IDENTICAL TO THE FACTS IN ITA NO.1465/M/2009, THEREFORE, FOLLOWING THE REASONINGS GIVEN THEREIN THE GROUNDS RAISED IN THE ABOVE 2 APPEALS ARE ALLOWED. 29 11. IN THE RESULT, ALL THE 3 APPEALS FILED BY THE A SSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 31ST DAY OF JULY 2013 SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA ) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE DATED: 31 ST JULY 2013 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-II & III, PUNE 4 CIT-II & III, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE