DCIT, Dehradun V. M/s. J.J. Buildtech, Dehradun

ITA 4320/DEL/2009

• Counselvise Citation: 432020114 RSA 2009
• Duration Of Justice: 4 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 18-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 11-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40A(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH D DD D : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .4320/DEL/2009 4320/DEL/2009 4320/DEL/2009 4320/DEL/2009 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2005 2005 2005 2005- -- -06 0606 06 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, RANGE RANGE RANGE RANGE- -- -1, DEHRADUN. 1, DEHRADUN. 1, DEHRADUN. 1, DEHRADUN. VS VSVS VS. .. . M/S J.J. BUILDTECH, M/S J.J. BUILDTECH, M/S J.J. BUILDTECH, M/S J.J. BUILDTECH, 42, SUBHASH ROAD, 42, SUBHASH ROAD, 42, SUBHASH ROAD, 42, SUBHASH ROAD, SHIVALIK GOLD APARTMENTS, SHIVALIK GOLD APARTMENTS, SHIVALIK GOLD APARTMENTS, SHIVALIK GOLD APARTMENTS, BEHIND KAVERI STORES, BEHIND KAVERI STORES, BEHIND KAVERI STORES, BEHIND KAVERI STORES, DEHRADUN DEHRADUN DEHRADUN DEHRADUN 248 001. 248 001. 248 001. 248 001. PAN : PAN : PAN : PAN : AAFFJ1910P. AAFFJ1910P. AAFFJ1910P. AAFFJ1910P. (APPELLANT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO.4697/DEL/2009 .4697/DEL/2009 .4697/DEL/2009 .4697/DEL/2009 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2006 2006 2006 2006- -- -07 0707 07 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(2), 1(2), 1(2), 1(2), DEHRA DEHRA DEHRA DEHRADUN DUN DUN DUN VS. VS. VS. VS. M/S J.J. BUILDTECH, M/S J.J. BUILDTECH, M/S J.J. BUILDTECH, M/S J.J. BUILDTECH, 42, SUBHASH ROAD, 42, SUBHASH ROAD, 42, SUBHASH ROAD, 42, SUBHASH ROAD, SHIVALIK GOLD APARTMENTS, SHIVALIK GOLD APARTMENTS, SHIVALIK GOLD APARTMENTS, SHIVALIK GOLD APARTMENTS, BEHIND KAVERI STORES, BEHIND KAVERI STORES, BEHIND KAVERI STORES, BEHIND KAVERI STORES, DEHRADUN DEHRADUN DEHRADUN DEHRADUN 248 001. 248 001. 248 001. 248 001. PAN : AAFFJ1910P. PAN : AAFFJ1910P. PAN : AAFFJ1910P. PAN : AAFFJ1910P. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.N. BHATIA, SR.DR. RESPONDENT BY : SHRI ASHWANI TANEJA, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-I, DEHRADUN DATED 31.08.2009 AND 23. 09.2009 FOR AY 2005-06 AND 2006-07 RESPECTIVELY. 2. SINCE IN BOTH THESE APPEALS COMMON ISSUES ARE RA ISED BY THE REVENUE, WE REPRODUCE HEREIN BELOW THE GROUNDS RAIS ED BY THE REVENUE FOR AY 2005-06:- ITA-4320 & 4697/D/2009 2 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACT IN D ELETING THE DEDUCTION U/S 80IB(10) OF THE I.T. ACT, 1961 WI THOUT JURISDICTION IN AS MUCH AS IN ABSENCE OF THE COMPLE TION CERTIFICATE BEFORE THE A.O. AT THE TIME OF ASSESSME NT, THE DISALLOWANCE MADE BY THE A.O. WAS JUSTIFIED. 2. SINCE DEDUCTIONS U/S 80IB(10) WAS NOT AVAILABLE TO THE ASSESSEE, THE A.O. WAS JUSTIFIED IN MAKING DISALLOWANCES U/S 40A(3) AND 40(A)(IA) OF THE I.T. ACT 1961. 3. THE ORDER OF THE LD.CIT(A) BE SET-ASIDE AND THAT THE AO BE RESTORED. 3. GROUND NO.1 HAS BEEN MODIFIED AND SUBSTITUTED BY THE FOLLOWING GROUND:- THE LD.CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80IB(10) AFTER OBTAINING A REMAND REPORT FROM THE A.O. WITH THE INTENTION TO ENHANCE THE INCOME BY WITHDRAWING DEDU CTION WRONGLY ALLOWED BY THE A.O. IN ABSENCE TO TIMELY IS SUE OF COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY WIT HOUT ASCERTAINING THE REASONS FOR THE DELAY IN ISSUING T HE SAME. 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL PLACED BEFORE US. WE FIND THAT THE ASSESSING OFFICER HIMS ELF HAS ALLOWED DEDUCTION UNDER SECTION 80IB(10) TO THE ASSESSEE. BEFORE THE LEARNED CIT(A), THE ASSESSEE HAD FILED THE APPEAL DISPUTING THE QUANTUM OF THE DEDUCTION ALLOWED UNDER SECTION 80IB(10). HOWEVER, DURING APPELLATE PROCEEDINGS, THE CIT(A) HIMSELF RAISED THE ISSUE OF ALLOWABILITY OF DEDUCTION UNDER SECTION 80IB(10) PER SE ON THE GROU ND THAT WHETHER THE COMPLETION CERTIFICATE WAS RECEIVED BY THE ASSE SSEE IN TIME ON WHICH THE COMMENT OF THE ASSESSING OFFICER WAS ALSO SOUGHT. THE ASSESSING OFFICER IN HIS REPORT DATED 26.08.2009 HA S STATED AS UNDER:- THIS IS A CASE OF A BUILDER WHO HAS CLAIMED DEDUCT IONS U/S 80IB(10). THE HOUSING PROJECT WAS APPROVED BY MUSS OORIE DEHRADUN DEVELOPMENT AUTHORITY (MDDA) ON 07.05.2003 . IN TERMS OF THE REQUIREMENTS OF SEC 80IB(A)(I), THE ITA-4320 & 4697/D/2009 3 CONSTRUCTION SHOULD HAVE BEEN COMPLETED ON OR BEFOR E 31 ST DAY OF MARCH 2008 AND AS PER EXPLANATION (II) TO TH AT SECTION, THE DATE OF COMPLETION OF CONSTRUCTION SHA LL BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. IN THIS CASE THE HOUSING PROJECT WAS COMPLETE BEFOR E 31.03.2008 BUT THE COMPLETION CERTIFICATE HAS BEEN ISSUED ON 18.04.2009. PRIMA-FACIE, THE REQUIREMENT OF EXPLANATION (II) AS DISCUSSED ABOVE ARE NOT MET. I N THIS REGARD THE EXPLANATIONS OF THE ASSESSEE AS SUBMITTE D BEFORE YOUR GOODSELF AND THE INFORMATION PROVIDED T O THE UNDERSIGNED HAVE BEEN CAREFULLY EXAMINED. IT IS IM PORTANT TO HIGHLIGHT THAT THE ASSESSEE HAD MOVED AN APPLICA TION FOR THE ISSUE OF CERTIFICATE WITH MDDA ON 31.10.2007 AN D IT TOOK MDDA 18 MONTHS TO ISSUE THE CERTIFICATE AND TH E SAME HAS BEEN ISSUED ON 18.04.2009. IN VIEW OF THE SAME, THE VIOLATION OF THE REQUIREMENTS OF EXPLANATION (I I) APPEARS TO BE MORE OF THE NATURE OF A TECHNICAL ISS UE RATHER THAN BEING A CASE OF GROSS VIOLATION OF THE PROVISIONS. THE ASSESSEE ON ITS PART MOVED AN APPL ICATION BEFORE THE COMPETENT AUTHORITIES WELL BEFORE THE LI MITATION PERIOD OF 31.03.2008 AFTER COMPLETION OF THE PROJEC T. THE CAUSE OF VIOLATION IN THE PRESENT CASE THEREFORE, D OES NOT APPEAR TO BE ATTRIBUTABLE TO THE ASSESSEE. THE BASIC FACT THAT NEEDS TO BE ESTABLISHED IS ACTU AL COMPLETION OF THE HOUSING PROJECT. IN THIS REGARD THE ASSESSEE HAS FURNISHED CERTIFICATES OF DISTRICT FIR E OFFICER, ELECTRICITY AND WATER DEPARTMENTS, FORMATION OF WEL FARE ASSOCIATION BY THE RESIDENTS AND ITS REGISTRATION A S CO- OPERATIVE SOCIETY ETC. THE ISSUE OF COMPLETION AND SELLING OUT OF ALL 84 FLATS AND 6 SHOPS HAS COME UP BEFORE DIFFERENT AOS IN THE INCOME TAX ASSESSMENT PROCEEDINGS AND LA TEST BEING A.Y. 2006-07 WHERE ALL THE SALE DEEDS SO EXEC UTED WERE FILED BEFORE THE A.O. NO INFIRMITY HAS BEEN F OUND ABOUT THE FACT OF COMPLETION OF HOUSING PROJECT WEL L BEFORE 31.03.2008. IN VIEW OF THE ABOVE FACTS IT IS SUBMITTED THAT THE CONSTRUCTION WAS ACTUALLY COMPLETE AND IT APPEARS T O BE A CASE WHERE THERE IS DELAY IN THE ISSUANCE OF THE CO MPLETION CERTIFICATE. 5. AFTER CONSIDERING THE ABOVE REPORT OF THE ASSESS ING OFFICER, LEARNED CIT(A) UPHELD THE VIEWS OF THE ASSESSING OF FICER AND HELD THAT ITA-4320 & 4697/D/2009 4 THE ASSESSING OFFICER WAS JUSTIFIED IN COMING TO TH E VIEW THAT DEDUCTION UNDER SECTION 80IB(10) WAS ADMISSIBLE. THE RELEVAN T FINDING OF THE LEARNED CIT(A) READS AS UNDER:- 9. A PERUSAL OF THE DISCUSSION FROM PAGE NO.3 TO T HE ABOVE WOULD BRING OUT THAT THE INQUIRES WHICH SHOUL D HAVE BEEN MADE TOWARDS ASCERTAINING THE DATE OF COMPLETI ON OF THE PROJECT AND ISSUANCE OF COMPLETION CERTIFICATE AS ENVISAGED U/S 80-IB(10) SHOULD HAVE BEEN COMPLETED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS AND ONLY THERE AFTER THE CLAIMED DEDUCTION SHOULD HAVE BEEN ALLOWED. NO W, KEEPING IN VIEW THE CONCLUSION REACHED BY THE LD. ASSESSING OFFICER AS REGARDS COMPLETION CERTIFICATE THE DEDUCTION THOUGH ALLOWED BY DEFAULT IN THE COURSE O F ASSESSMENT PROCEEDINGS, AFTER ENQUIRIES AND AS PER HIS OWN REPORT IS FOUND TO BE CORRECTLY ALLOWED, PARTIC ULARLY KEEPING IN VIEW THE FACT THAT THE APPELLANT HAD APP LIED FOR THE COMPLETION CERTIFICATE WELL IN TIME AND ITS ISS UANCE WAS KEPT PENDING BY MDDA FOR NO VISIBLE REASON. THE ASSESSING OFFICERS VIEW EXPRESSED IN THE PRECEDING PARAGRAPH THAT THE CAUSE OF DELAY IN THE ISSUANCE O F THE COMPLETION CERTIFICATE CANNOT BE ATTRIBUTED TO THE ASSESSEE IS ALSO BORNE OUT BY THE FACT THAT DURING THE PENDE NCY OF APPELLANTS APPLICATION WITH MDDA NO QUERIES OR NO OBJECTIONS WERE COMMUNICATED TO THE APPELLANT AS RE GARDS DEFICIENCY OR DEFECT IN THE COMPLETION OF THE PROJE CT BEFORE THE STATUTORY DATE IN THE PRESENT CASE. THE ASSESS ING OFFICER IS, THEREFORE, JUSTIFIED IN COMING TO THE V IEW THAT THE DEDUCTION U/S 80-IB(10) WAS ADMISSIBLE AND CORRECTL Y ALLOWED BY THE ASSESSING OFFICER. 6. HOWEVER, DESPITE THE ABOVE POSITION, THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF LEARNED CIT(A) AND RAIS ED GROUND NO.1 ABOVE. IN OUR OPINION, ONCE THE ASSESSING OFFICER HIMSELF HAS TAKEN THE STAND THAT THE ASSESSEE IS ENTITLED TO DEDUCTIO N UNDER SECTION 80IB TWICE, FIRST IN THE ASSESSMENT ORDER ITSELF AND SEC OND DURING REMAND PROCEEDINGS, HE HAS NO JUSTIFICATION NOW TO DISPUTE THE SAME BEFORE THE ITAT. EVEN ON MERITS, THE REVENUE HAS NO CASE BECAUSE AS PER THE FACTUAL DETAILS GIVEN BY THE ASSESSING OFFICER HIMS ELF IN HIS REMAND REPORT THAT THE PROJECT WAS ACTUALLY COMPLETED BEFO RE 31 ST MARCH, 2008 ITA-4320 & 4697/D/2009 5 AND IN FACT THE ASSESSEE HAD ALSO MOVED AN APPLICAT ION FOR ISSUE OF CERTIFICATE WITH MDDA ON 31 ST OCTOBER, 2007, MERELY BECAUSE MDDA TOOK MORE THAN 18 MONTHS TO ISSUE THE CERTIFICATE, THE ASSESSEE CANNOT BE PENALIZED FOR INACTION OR DELAYED ACTION ON MDDA BY WITHDRAWING THE RELIEF WHICH THE ASSESSEE IS ENTITLED UNDER SEC TION 80IB(10). IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT IN GROU ND NO.1 OF THE REVENUES APPEAL. 7. GROUND NO.2 OF THE REVENUES APPEAL IS ADMITTEDL Y CONSEQUENTIAL TO GROUND NO.1 AND FROM A READING OF THE GROUND ITSELF, IT IS EVIDENT THAT GROUND NO.2 WOULD ARISE ONLY IF THE ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER SECTION 80IB(10). WHIL E ADJUDICATING GROUND NO.1, AS WE HAVE UPHELD THE ORDER OF THE LEA RNED CIT(A) HOLDING THAT THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER SE CTION 80IB(10), GROUND NO.2 OF THE REVENUES APPEAL HAS NO LEGS TO STAND. ACCORDINGLY, THE SAME IS REJECTED. 8. IDENTICAL GROUNDS HAVE BEEN RAISED BY THE REVENU E IN AY 2006- 07 VIDE ITA NO.4697/DEL/2009. ADMITTEDLY, THE FACT S ARE IDENTICAL AS IN AY 2005-06. THEREFORE, FOR THE DETAILED DISCUSSION ABOVE, THE REVENUES APPEAL FOR AY 2006-07 HAS NO MERIT. THE SAME IS DISMISSED. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2013. SD/- SD/- ( (( (ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY ABY T. VARKEY) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 31.12.2013 VK. ITA-4320 & 4697/D/2009 6 COPY FORWARDED TO: - 1. APPELLANT : DEP DEP DEP DEPUTY COMMISSIONER OF INCOME TAX, UTY COMMISSIONER OF INCOME TAX, UTY COMMISSIONER OF INCOME TAX, UTY COMMISSIONER OF INCOME TAX, RANGE RANGE RANGE RANGE- -- -1, DEHRADUN. 1, DEHRADUN. 1, DEHRADUN. 1, DEHRADUN. 2. RESPONDENT : M/S J.J. BUILDTECH, M/S J.J. BUILDTECH, M/S J.J. BUILDTECH, M/S J.J. BUILDTECH, 42, SUBHASH ROAD, SHIVALIK GOLD APARTMENTS, 42, SUBHASH ROAD, SHIVALIK GOLD APARTMENTS, 42, SUBHASH ROAD, SHIVALIK GOLD APARTMENTS, 42, SUBHASH ROAD, SHIVALIK GOLD APARTMENTS, BEHIND KAVERI STORES, DEHRADUN BEHIND KAVERI STORES, DEHRADUN BEHIND KAVERI STORES, DEHRADUN BEHIND KAVERI STORES, DEHRADUN 248 001. 248 001. 248 001. 248 001. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR