M/s. AGRAWAL BUILDERS, Bhopal V. The DCIT 1(2), Bhopal

ITA 488/IND/2014

• Counselvise Citation: 48822714 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Competent authority
• Section: 80IB

Judgement Text

AGRAWAL BUILDERS ITA NO. 488/2014 1 IN THE INCOME TAX APPELLATE TRIBUNA L INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 488/IND/2014 A.Y. 2008-09 M/S AGRAWAL BUILDERS BHOPAL PAN AAEFA 8222A ::: APPELLANT VS DY. COMMR. OF INCOME TAX 1(2) BHOPAL ::: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 23 .7.2015 DATE OF PRONOUNCEMENT 1 8 . 8 .2015 O R D E R PER BENCH THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A), BILASPUR CAMP AT BHO PAL, DATED 26.2.2013. AGRAWAL BUILDERS ITA NO. 488/2014 2 2. THE ASSESSEE IS A PARTNERSHIP FIRM. THE RETURN OF INCOME WAS FILED ON 2.9.2008 DECLARING GROSS INCOME AT RS.3,45,41,045/- AND CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT OF EQUAL AMOUNT. THE SUM AND SUBSTANCE OF THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE IS THAT THE LOWE R AUTHORITIES WERE NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE U/S 80IB(10) OF THE ACT AND ALSO IN TREATING THE ASSESSEE AS A CONTRACTOR INSTEAD OF A DEVELOPER. 3. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE I S A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPIN G COLONIES AND SELLING RESIDENTIAL HOUSES. DURING THE Y EAR UNDER CONSIDERATION THE ASSESSEE FIRM HAD DEVELOPED ON LY ONE HOUSING PROJECT WHICH, FOR THE ADMINISTRATIVE PU RPOSES, WAS BIFURCATED INTO TWO SUBJECT-PROJECTS, VIZ. (I) SAG AR ROYAL VILAS PKT-1 AND (II) SAGAR ROYAL VILASPKT-2. THESE PROJEC TS WERE SITUATED AT VILLAGE BAWADIA KALAN, HOSHANGABAD AGRAWAL BUILDERS ITA NO. 488/2014 3 ROAD, BHOPAL. THE ASSESSEE, ON THESE NEW PROJECTS WH ICH WERE APPROVED IN JUNE, 2006, COMPLETED THE PROJECT WORK PRIOR TO 31 ST MARCH, 2012 WHICH WAS THE LAST DATE FOR COMPLETION OF THE PROJECTS FOR CLAIMING DEDUCTION U/ S 80IB(10) OF THE ACT. THE DETAILS OF THE AREA AND THE SANCTION OF THE PROJECTS ARE AS UNDER :- NAME OF THE PROJECT SAGAR ROYAL VILAS PKT-1 & PKT -2 1.TOTAL LAND AREA 5.15 ACRE PKT-1 AND 5.92 ACRES FOR PKT-2 2.LOCATED AT KHASRA NO.428/2/1,428/2/1/1K,428/2/2 VILLAGE BABADIA KALAN, DISTRICT BHOPAL 3.PERMISSION FROM TOWN & COUNTRY PLASNNING WAS OBTAINED VIDE LETTER NO. TNCP 2006/1140 & TNCP 2006/1342 DATED 07.04.2006 & 22.04.2006 (PAGE 27 TO 29 OF PB) 4.PERMISSION FOR THE PROJECT IS OBTAINED FROM MUNIC IPAL CORPORATION, BHOPAL, VIDE THEIR PERMISSION NO. NC5314-392-62006, NC5314-1129-102006 & NC5211-172-52011 DATED 5.6.2006, 31.10.2006 & 28.4.2011 5.DURING PREVIOUS YEAR RELEVANT TO THE ASSESSMENT Y EAR 2008-09 AS PER P&L ACCOUNT SALES FOR THE PROJECT HAS BEEN CREDITED FOR RS.6,98,53,697/- FOR PKT-1 AND RS.4,90,93,050/- FOR PKT-2. FOR CONVENIENCE SEPA RATE BOOKS ARE MAINTAINED AND SEPARATE P&L A/C ARE AGRAWAL BUILDERS ITA NO. 488/2014 4 PREPARED. THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE ON 4. 3.2012 AND ALSO SENT REMINDERS ON 22.3.2012 AND 18.5.2012. T HE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE U/S 80IB(10) OF THE ACT BY HOLDING THE ASSESSEE AS A CONT RACTOR RATHER THAN DEVELOPER AND NOT FURNISHING COMPLETION CERTIFICATE AS CONTEMPLATED IN EXPLANATION TO SECTION 80IB(10) OF THE ACT. THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE LEARNED CIT(A) HAS RELIED ON THECAS E OF SKY BUILDERS FOR HOLDING THE ASSESSEE AS A CONTRACTOR THAN A DEVELOPER. HE SUBMITTED THAT THE ASSESSEE WAS A BUILD ER AND DEVELOPER OF THE COLONY. ALL SANCTIONS WERE IN T HE NAME OF THE ASSESSEE. JUST TO FACILITATE THE BANK LOAN, T HE REGISTRIES OF THE STRUCTURE (INCOMPLETE HOUSES) WER E MADE AND THESE SALE DOCUMENTS HAVE REFERENCE TO THE INITIAL AGREEMENT WHICH CLEARLY PROVIDE THAT AFTER RECEIVING TH E SALE CONSIDERATION, THE REGISTRATION FOR STRUCTURE/ AGRAWAL BUILDERS ITA NO. 488/2014 5 FINISHED/UNFINISHED FLATS/BUNGALOWS MAY BE DONE WHENEVER THE PURCHASERS DESIRE. EVEN AFTER EXECUTION OF THE REGISTERED SALE DEED OF THE STRUCTURE/SEMI-FINIS HED FLATS/BUNGALOWS, THE SALE DEED PROVIDES THAT THE POSSES SION SHALL REMAIN WITH THE ASSESSEE TILL THE FULL AND FINAL PAYMENT IS MADE. FURTHER, THE RISK IS ALWAYS WITH THE ASSESSEE IN RESPECT OF DEVELOPING THE COLONY. THESE FACTS SHOW THAT THE ASSESSEE WAS A DEVELOPER AND IT WAS NOT A CONTRACTOR AS HELD BY THE LOWER AUTHORITIES. THE LEA RNED AR RELIED ON THE DECISION OF THE ITAT, COORDINATE BENCH IN THE CASE OF PARAS HOUSING PVT. LTD.; 22 ITJ 273 AND VARDHMA N BUILDERS AND DEVELOPERS 20 ITJ 277. THE LEARNED COU NSEL FOR THE ASSESSEE ALSO RELIED ON THE DECISION OF THE H ON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RADHE DEVELOPERS; 341 ITR 403. HE ALSO SUBMITTED THAT IN T HE CASE OF SKY DEVELOPERS IT WAS THE PLOT WHICH WAS REGIS TERED IN THE PURCHASERS NAME AND THEREAFTER THE WORK, AS A AGRAWAL BUILDERS ITA NO. 488/2014 6 CONTRACTOR, WAS CARRIED OUT BUT IN THE ASSESSEES CASE, REGISTRY WAS ONLY MADE FOR THE PURPOSE OF AVAILING HOUS ING LOAN AND ALL THE TERMS AND CONDITIONS REMAIN AS PER THE ORIGINAL AGREEMENT WHERE THE ASSESSEE HAD ENTERED INTO AGREEMENT AS A DEVELOPER/COLONIZER. WITH REGARD TO COMPLETION CERTIFICATE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS COMPLETED THE PROJECT IN ALL RESPECT PRIOR TO THE LAST DATE AS PER THE PROVISIO NS OF THE ACT. HE ALSO SUBMITTED THAT THE EVIDENCES IN THE FORM OF PERMANENT ELECTRICAL CONNECTION OBTAINED BY THE PURCHASERS, POSSESSION CERTIFICATE ISSUED TO THE PURCHASERS, HOUSE TAX PAID BY THE PURCHASES AND A CERTIFICATE FROM THE ARCHITECT, WERE SUBMITTED. ALL T HESE EVIDENCES PROVE BEYOND DOUBT THAT THE PROJECTS WERE COMPLETE ON OR BEFORE 31 ST MARCH, 2012. FURTHER, THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE ON 14 TH MARCH, 2012. THE LETTER SUBMITTED TO THE CITY PLANNER THRO UGH AGRAWAL BUILDERS ITA NO. 488/2014 7 INCHARGE COLONY CELL, BHOPAL MUNICIPAL CORPORATION, DATE D 14.3.2012 IS PLACED AT PAGE 2 OF THE PAPER BOOK. THEREAF TER, REMINDER ISSUED ON 22.3.2012 COPY OF WHICH IS PLACED AT PAGE 3 OF PAPER BOOK. FURTHER THE REMINDER DATED 16.5.2012 WAS ALSO ISSUED A COPY OF WHICH IS PLACED AT PAGE 4 OF THE PAPER BOOK. CERTIFICATE FROM THE ARCHITEC T PULKIT SAXENA DATED 28.3.2012, WHEREIN IT HAS BEEN CERTIFIED THAT THE PROJECT IS COMPLETE IN ALL RESPECT AS PER THE APPROVAL GRANTED BY THE MUNICIPAL CORPORATION, BHOPAL, IS PLACED AT PAGE 5 OF THE PAPER BOOK. FINALLY THE ASSESSEE GOT COMPLETION CERTIFICATE ON 17.7.2015 WHIC H HAS BEEN ISSUED ACCORDING TO THE SANCTIONED PLAN AND CERTIFICATE ISSUED BY PULKIT SAXENA, ARCHITECT, ON 28.3.2012. THUS, THESE FACTS PROVE BEYOND ANY DOUBT THAT THE ASSESSEE COMPLETED THE PROJECT PRIOR TO 31.3.201 2 AS PER THE PLAN SANCTIONED. THERE IS NO DEVIATION IN THE PROJECT WHICH IS CERTIFIED BY THE COMPLETION CERTIF ICATE AGRAWAL BUILDERS ITA NO. 488/2014 8 ISSUED BY THE MUNICIPAL CORPORATION. IN THESE CIRCUMSTANCES, LEARNED COUNSEL FOR THE ASSESSEE PLEADED THAT THERE WAS NO JUSTIFICATION IN DENYING THE CLAIM OF THE ASSESSEE U/S 80IB(10) OF THE ACT. THE LEARNED COUNSE L FOR THE ASSESSEE ALSO RELIED ON THE FOLLOWING DECISIONS : - A. CIT VS. CHD DEVELOPERS; 362 ITR 177 (DEL) B. CIT VS. TARNERTAR CORPN; 362 ITR 174 (GUJ) C. RAJ REALITY VS. DCIT;25 ITJ 381 (INDORE TRIBUNAL) D. ACIT VS. GIRIJA COLONISER (DELHI BENCH ITA NO.2417/DEL/2010 E ACIT VS. SURENDRA DEVELOPERS (DELHI BENCH) ITA NO. 2743/DEL/2010. 4. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE OR DERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE PROJEC T WAS SANCTIONED AFTER 1.4.2005, THEREFORE, THE ONLY AMENDED PROVISIONS ARE APPLICABLE IN THE CASE OF THE ASSESSEE. 5. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO PERUSED THE VARIOUS DOCUMENTS PLACED IN THE PAPER BOOK AS WELL AS AGRAWAL BUILDERS ITA NO. 488/2014 9 THE DOCUMENTS SUBMITTED BEFORE US WHICH INCLUDE COMPLETION CERTIFICATE ISSUED BY THE MUNICIPAL CORPO RATION, BHOPAL, IN RESPECT OF THE PROJECT SANCTIONED. THE ASSE SSEE GOT SANCTION FOR THE PROJECT FROM VARIOUS AUTHORITIES ON VARIOUS DATES, DETAILS OF WHICH HAVE BEEN MENTIONED ABOV E. SECTION 80IB(10) CLAIM OF THE ASSESSEE WAS DENIED ON ACCOUNT OF THE REASONS FIRSTLY THE COMPLETION CERTIFI CATE ISSUED BY THE LOCAL AUTHORITY I.E. MUNICIPAL CORPORATIO N WAS NOT SUBMITTED AND SECONDLY THE ASSESSEE WAS ACTING A S A CONTRACTOR AS IT HAS REGISTERED THE UNITS IN THE NAMES OF THE PURCHASERS PRIOR TO COMPLETION OF THE PROJECT. W E WOULD LIKE TO MENTION THAT THE ASSESSEE APPLIED FOR COMPLETI ON CERTIFICATE ON 14.3.2012 TO THE CITY PLANNER THROUGH INCHARGE COLONY CELL, BHOPAL MUNICIPAL CORPORATION. THE ASSESSEE GAVE REMINDER TO MUNICIPAL CORPORATION ON 22.3.2012 AND 16.5.2012. THE PROJECT IN THE NAME OF S AGAR ROYAL VILAS PKT- AND SAGAR ROYAL VILAS PKT-2 LOCATED AT AGRAWAL BUILDERS ITA NO. 488/2014 10 KHASRA NOS. 417/1/2, 417/2/1, 417/1/2/1, 417/2/1/1, 428/2/1, 428/2/1/1, 428/2/2, TOTAL LAND AREA 11.07 ACRE S LOCATED AT GRAM BAWADIA KALAN, HOSHANGABAD ROAD, BHOPAL, WAS COMPLETE IN ALL RESPECT AS PER THE APPROVAL GRANTED BY THE MUNICIPAL CORPORATION, BHOPAL PRIOR TO 31.3.2012. THE ASSESSEE FINALLY GOT COMPLETION CERT IFICATE FROM THE MUNICIPAL CORPORATION, BHOPAL, ON 17.7.2015. HOWEVER, VARIOUS DOCUMENTS WHICH INCLUDE POSSESSION LETTER ISSUED TO VARIOUS PURCHASERS, HOUSE TAX PAID BY VARIOUS OWNERS TO THE MUNICIPAL CORPORATION, BHOPAL, SI NCE 2009-10 AND PERMANENT ELECTRIC CONNECTION OBTAINED BY THESE PURCHASERS AND THE OCCUPANCY OF THESE FULLY BUIL T UNITS BY VARIOUS PURCHASERS ESTABLISH BEYOND ANY DOUBT THAT THE PROJECT WAS COMPLETE IN ALL RESPECT PRIOR TO 31.3.2012. THE BUILDING WAS SANCTIONED IN THE F.Y. 20 06- 07, THE PLANS WERE INITIALLY SANCTIONED IN JUNE, 2006. THEREFORE, FOR CLAIMING DEDUCTION U/S 80IB(10) OF TH E ACT, AGRAWAL BUILDERS ITA NO. 488/2014 11 THIS PROJECT WAS TO BE COMPLETED BY 31.3.2012. THE ASSESSEE HAS FURNISHED VARIOUS DOCUMENTS WHICH ESTABLIS H BEYOND DOUBT THAT THE PROJECT WAS COMPLETED PRIOR TO 31.3.2012. THE ASSESSEE APPLIED FOR COMPLETION CERTIF ICATE PRIOR TO MARCH, 2012 AND HAS ALSO ISSUED VARIOUS REMINDERS. THEREFORE, IN VIEW OF VARIOUS DECISION O F THE HON'BLE HIGH COURTS INCLUDING THE DECISION OF THE H ON'BLE DELHI HIGH COURT IN THE CASE OF CHD DEVELOPERS (SUP RA), THE ASSESSEE DESERVES TO BE ALLOWED DEDUCTION U/S 80I B(10) OF THE ACT. IN THE CASE OF CHD DEVELOPERS LTD. VS. ACIT, CIRCLE 3(1), NEW DELHI, HON'BLE DELHI HIGH COURT HAS HELD AS UNDER :- THE ASSESSEE IS EXPECTED TO COMPLETE THE PROJECT AS PER THE APPROVED PLAN AT A PARTICULAR POINT OF TIME AND THE ASSESSEE IS NOT EXPECTED TO DO OR TO FULFIL L THE CONDITIONS WHICH ARE NOT IN EXISTENCE AT THE RELEVA NT POINT OF TIME OR MADE COMPULSORY AFTER MAKING SOME AGRAWAL BUILDERS ITA NO. 488/2014 12 AMENDMENT IN THE ACT FROM THE FUTURE DATE. SINCE TH E ASSESSEE WAS TO COMPLETE THE PROJECT ON OR BEFORE AND 31.03.2009 AND REQUEST WAS DULY MADE WITH THE COMPETENT AUTHORITY ON 05.11.2009 MENTIONING THAT THE PROJECT HAS BEEN COMPLETED AND COMPLETION CERTIFICATE MAY BE ISSUED AND IF THE SAME IS NOT ISSUED BY THE COMPETENT AUTHORITY THE ASSESSEE SHOULD NOT BE PENALIZED FOR THE SAME UNLESS AND UNT IL SOME CONTRARY FACTS ARE BROUGHT ON RECORD EVIDENCIN G THAT THE ASSESSEE CONTRAVENED THE CONDITIONS CONTAINED IN THE APPROVAL GRANTED BY SUCH COMPETENT AUTHORITY. AS PER SUB-SECTION (10) OF SECTION 80IB( 10), THE BENEFIT WILL BE HUNDRED PERCENT SUBJECT TO FULFILLMENT OF CERTAIN CONDITIONS. HOWEVER, THIS CONDITION WAS SUBSTITUTED BY THE FINANCE (NO. 2) AC T OF 2009 WITH EFFECT FROM 01.04.2009 WHICH HAS BEEN FURTHER EXPLAINED BY SUB-CLAUSE (II) TO THE EXPLANA TION AGRAWAL BUILDERS ITA NO. 488/2014 13 REGARDING COMPLETION CERTIFICATE. HOWEVER, SINCE TH E APPROVAL WAS GRANTED TO THE ASSESSEE ON 01.04.2005, THEREFORE, THE ASSESSEE IS NOT EXPECTED TO FULFILL THE CONDITIONS WHICH WERE NOT ON THE STATUTE WHEN SUCH APPROVAL WAS GRANTED TO THE ASSESSEE. THEREFORE, TH E APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. IN THE CASE OF CIT VS. TARNETAR CORPORATION (2012) 26 TAXMAN.COM 180 (GUJ.) IT WAS HELD THAT IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE APPELLANT HAD COMPLETED THE CONSTRUCTION WELL BEFOR E 31 ST MARCH, 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRU E THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRU E THAT EXPLANATION TO CLAUSE (A) TO SECTION 88IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE AGRAWAL BUILDERS ITA NO. 488/2014 14 SEEN AS MANDATORY. IF SUBSTANTIAL COMPLETION THEREO F IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COUR T MAY TAKE A VIEW THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH THE DEDUCTIO N WAS BEING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE ASSESSEE HAS NOT ONLY COMPLETED THE CONSTRUCTION TW O YEARS BEFORE THE FINAL DATE AND APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT ON SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF MATTER, GRANTING RELIEF OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL. IN ACIT VS. SURENDRA DEVELOPERS IN ITA NOS. 2743 TO 2745/DEL/2010 IT WAS HELD AS UNDER :- THE LD. CIT(A), IT IS SEEN, HAS GRANTED RELIEF TO THE APPELLANT ON THE BASIS OF THE FACT THAT THOUGH THE AGRAWAL BUILDERS ITA NO. 488/2014 15 APPELLANT HAD APPLIED FOR COMPLETION CERTIFICATE BEFORE THE LOCAL AUTHORITY6 IN TIME, THE SAID CERTI FICATE WAS NOT ISSUED IN TIME BY THE LOCAL AUTHORITY. SUCH ISSUANCE OF COMPLETION CERTIFICATE HAS BEEN HELD AN D IN OUR OPINION, CORRECTLY SO, TO BE BEYOND THE CONT ROL OF THE ASSESSEE. IN THE CASE OF HINDUSTAN SAMUDHA AWAS LTD. VS. ITO IN I TA NOS. 945 TO 950/PNP 2010 HON'BLE ITAT, PUNE BENCH HELD AS UNDER :- FROM THE ABOVE, ONE THING IS CLEAR THAT THE DATE TH AT APPEAR ON THE ARCHITECTS COMPLETION CERTIFICATE FI LED BEFORE THE LOCAL AUTHORITY IS A RELEVANT ONE. IN TH E INSTANT CASE, THE SAID DATE IS 25.03.2008 AND THE APPELLANT FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITY INTIMATING THE COMPLETION OF THE PROJECT. THE SAID CERTIFICATE/INTIMATION WAS ACCEPTED BY THE LOC AL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTS. LOCAL AGRAWAL BUILDERS ITA NO. 488/2014 16 AUTHORITY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF T HE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10.10.2008 IS CERTAINLY NOT ATTRIBUTABLE TO THE APPELLANT AND OBTAINING THE SAID CERTIFICATE BEFORE 31.03.2008 IS BEYOND THE CONTROL OF THE APPELLANT. THE APPELLANT S JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE APPROVAL PLANS AND INTIMATION O F THE SAME TO THE LOCAL AUTHORITY BY WAY OF FILING TH E REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIFICATE GIVEN BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE APPELLANT HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJECTED TO THE SAID APPLICAT ION OF THE APPELLANT AND THE ARCHITECT BY RAISING ANY AGRAWAL BUILDERS ITA NO. 488/2014 17 OBJECTION NOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10.10.2008. THEREFORE, THE DELAY I N GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTRIBUTABLE TO THE APPELLANT. THEREFORE, IN OUR OPINION, THE APPELLANT IS NOT DEFAULTER ON THIS ACC OUNT AND THUS THE A.O. HAS ERRED IN DENYING THE DEDUCTIO N U/S 80IB(10) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED. HON'BLE ITAT, DELHI BENCH IN THE CASE OF M/S GIRIJA COLONISERS IN ITA NOS. 2417 TO 2422/DEL/2011 HAS HE LD AS UNDER :- IN THE LIGHT OF THE FACTS NARRATED IN A.O.S REMAND REPORT AND FACTS AVAILABLE ON RECORD, THE LD. CIT(A ) HAS TAKEN A VIEW THAT THE APPELLANT HAS COMPLETED THE CONSTRUCTION MUCH PRIOR TO 31.03.2008 AND HAD FULFILLED ALL REQUIREMENTS/FORMALITIES OF THE AGRAWAL BUILDERS ITA NO. 488/2014 18 COMPLETION CERTIFICATE AS NOTIFIED BY THE CORPORATI ON AT THE TIME OF FILING APPLICATION FOR ISSUANCE OF COMPLETION CERTIFICATE ON 26.11.2007. THE LD. CIT(A ) HAS ALSO RECORDED A FINDING THAT SALES OF ALL RESIDENTIAL UNITS IN RESPECT OF THREE PROJECTS WERE MATERIALIZED ON OR BEFORE 31.03.2008. THE MUNICIPAL AUTHORITY HAS NOT POINTED OUT ANY DEFECT AND IRREGULARITY IN THE APPELLANTS APPLICATION DATED 26.11.2007 SUBMITTED FOR ISSUANCE OF COMPLETION CERTIFICATE OF ALL THE SAID PROJECTS. THEREFORE, IN THE LIGHT OF FACTS FOUND BY THE LD. CIT(A) AND REASONS GIVEN BY HIM AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF ITAT, PUNE BENCH B IN THE CASE HINDUSTAN SAMUHA AWAS LIMITED (SUPRA), WE DO NOT FIND ANY REASON TO TAKE A VIEW OTHER THAN TH E VIEW TAKEN BY THE LD. CIT(A) IN THE PRESENT CASE. W E, AGRAWAL BUILDERS ITA NO. 488/2014 19 THEREFORE, UPHOLD THE ORDER OF LD. CIT(A) AND DISMI SS ALL THESE APPEALS FILED BY THE REVENUE. 6. IN M.P. MUNICIPAL CORPORATION ACT, THERE IS A PROVI SION IN SECTION 301 WHEREIN THE UNITS CAN BE OCCUPIED WHE RE THE COMMISSIONER OF MUNICIPAL CORPORATION FAILS TO ISSUE COMPLETION CERTIFICATE WITHIN 15 DAYS FROM THE DATE O F RECEIPT OF THE APPLICATION. SECTION 301 OF THE SAID AC T SPEAKS ABOUT COMPLETION CERTIFICATE AND THE RELEVANT PORTION IS REPRODUCED HEREUNDER :- 301. COMPLETION CERTIFICATE AND PERMISSION TO OCCUPY OR USE (1) EVERY PERSON WHO (I) ERECTS OR RE-ERECTS ANY BUILDING; OR (II) MAKES ANY MATERIAL EXTERNAL ALTERATION IN OR ADDITION TO ANY EXISTING BUILDING : OR AGRAWAL BUILDERS ITA NO. 488/2014 20 (III) CONSTRUCTS OR RE-CONSTRUCTS ANY PROJECTING PORTION OF A BUILDING WHICH THE COMMISSIONER IS EMPOWERED IS EMPOWERED UNDER SECTION 305 REQUIRE TO BE SET BASK OR IS EMPOWERED TO GIVE PERMISSION TO CONSTRUCT OR RE-CONSTRUCT. SHALL WITHIN ONE MONTH OF THE COMPLETION OF THE WORK DELIVER TO THE COMMISSIONER AT HIS OFFICE A NOTICE IN WRITING OF SUCH COMPLETION AND SHALL GIVE TO THE COMMISSIONER ALL NECESSARY FACILITIES FOR THE INSPECTION OF SUCH WORK. (2) WITHIN SEVEN DAYS AFTER THE RECEIPT OF THE SAID NOTICE THE COMMISSIONER SHALL DEPUTE AN OFFICER TO COMMENCE THE INSPECTION OF SUCH WORK. AGRAWAL BUILDERS ITA NO. 488/2014 21 (3) WITHIN SEVEN DAYS FROM THE DATE OF COMMENCEMENT OF SUCH INSPECTION THE COMMISSIONER SHALL (A) GIVE PERMISSION FOR THE OCCUPATION OF THE BUILDING ERECTED OR FOR THE USE OF THE PART OF THE BUILDING RE-ERECTED; OR (B) REFUSE SUCH PERMISSION IN CASE SUCH ERECTION, CONSTRUCTION OR RE-CONSTRUCTION IS IN CONTRAVENTION OF ANY PROVISION OF THIS ACT OR ANY RULE OR BYELAW MADE THEREUNDER OR ANY OTHER ENACTMENT FOR THE TIME BEING IN FORCE. (4) NO PERSON SHALL OCCUPY OR PERMIT TO BE OCCUPIED ANY SUCH BUILDING OR USE OR PERMIT TO BE USED ANY PART AFFECTED BY THE RE-ERECTION OF SUCH BUILDING AGRAWAL BUILDERS ITA NO. 488/2014 22 (A) UNTIL THE PERMISSION REFERRED TO IN CLAUSE (A) OF SUB-SECTION (3) HAS BEEN GRANTED IN THE MANNER PRESCRIBED BY BYELAWS; (B) UNLESS THE COMMISSIONER HAS FAILED FOR FIFTEEN DAYS AFTER THE RECEIPT OF NOTICE OF COMPLETION TO INTIMATE HIS REFUSAL TO GRANT THE SAID PERMISSION. 7. AS PER THE ABOVE PROVISIONS, WHEREVER A BUILDING IS ERECTED WITHIN ONE MONTH OF THE COMPLETION OF TH E WORK, THE PERSON WAS UNDER OBLIGATION TO DELIVER TO THE OFF ICE OF THE COMMISSIONER A NOTICE IN WRITING OF SUCH COMPLET ION AND SUBMIT ALL NECESSARY FACILITIES FOR INSPECTION OF S UCH COMPLETED WORK. THEREAFTER WITHIN 7 DAYS OF THE RE CEIPT OF SUCH NOTICE FROM THE PERSON, THE COMMISSIONER SHALL DEPUTE AN OFFICER TO COMMENCE THE INSPECTION OF SUCH WORK. WITHIN 7 DAYS FROM THE DATE OF COMMENCEMENT OF AGRAWAL BUILDERS ITA NO. 488/2014 23 SUCH INSPECTION, THE COMMISSIONER SHALL GIVE PERMISS ION FOR OCCUPATION OF THE BUILDING ERECTED OR REFUSE SUC H PERMISSION IN CASE SUCH ERECTION IS IN CONTRAVENTION TO ANY PROVISION OF THE ACT OR ANY RULE OR ANY BYELAWS MADE U NDER ANY OTHER ENACTMENT FOR THE TIME BEING IN FORCE. NO PERSON WAS ALLOWED TO OCCUPY OR PERMIT TO OCCUPY SUCH BUILDI NG UNTIL THE PERMISSION HAS BEEN GRANTED IN THE MANNER PRESCRIBED BY BYELAWS. HOWEVER, THERE IS A PROVISIO N THAT UNLESS THE COMMISSIONER HAS FAILED FOR 15 DAYS AFTER T HE RECEIPT OF THE NOTICE OF COMPLETION, INTIMATE HIS RE FUSAL TO GRANT THE SAID PERMISSION. THE PERSON SHALL NOT OCCUP Y THE BUILDING. THUS, WHEN THE COMMISSIONER HAS NOT ACTED UPON FOR 15 DAYS ON THE APPLICATION OF THE ASSESSEE REGARDING COMPLETION OF THE PROJECT THEN THE PERSONS CAN OCCUPY SUCH BUILDING. IN THE ASSESSEES CASE THE ASSE SSEE HAS SUBMITTED THE APPLICATION WELL IN TIME AND THE AGRAWAL BUILDERS ITA NO. 488/2014 24 COMMISSIONER HAS FAILED FOR MORE THAN 15 DAYS AFTER THE RECEIPT OF THE NOTICE OF COMPLETION TO INTIMATE THE ASSESSEE REGARDING REFUSAL TO GRANT THE PERMISSION. THE ASSESSEE OTHERWISE HAS ALSO SUBMITTED VARIOUS DOCUMENTS WHICH ESTABLISH THAT THE PROJECT WAS PHYSICALLY COMPLETE AS P ER THE APPROVED BUILDING PLAN PRIOR TO THE STATUTORY PERI OD. 8. SIMILARLY IN RESPECT OF SEMI-FINISHED, FINISHED U NITS WHERE THE REVENUE HAS TREATED THE ASSESSEE AS A CONTRACTO R RATHER THAN A DEVELOPER, WE HOLD THAT EVEN AFTER REGISTR Y, THE PURCHASERS WERE NOT GIVEN POSSESSION OF THE HOUS E TILL IT IS COMPLETED. AS REGARDS THE RELIANCE OF THE REVEN UE IN THE CASE OF SKY BUILDERS (SUPRA), WE FIND THAT IN THAT CASE ONLY THE PLOTS WERE SOLD TO THE PURCHASERS AND NOT TH E CONSTRUCTED AREA. VARIOUS DOCUMENTS SUBMITTED BEFORE US INCLUDING SANCTION FROM THE MUNICIPAL CORPORATION AND T HE COMPLETION CERTIFICATE AND OTHER DOCUMENTS ESTABLISH T HAT AGRAWAL BUILDERS ITA NO. 488/2014 25 THE REGISTRIES OF THE STRUCTURE WERE MADE ONLY TO FAC ILITATE THE HOUSING LOAN TO THE PURCHASERS. THE INITIAL AGREEM ENT CLEARLY PROVIDED THAT AFTER RECEIVING THE SALE CONSIDER ATION, THE REGISTRATION FOR STRUCTURE/ SEMI-FINISHED/ FINIS HED FLATS/ BUNGALOWS MAY BE DONE WHENEVER THE PURCHASER DESIRES. EVEN AFTER EXECUTION OF THE REGISTRATION OF SALE DEED OF STRUCTURE/SEMI-FINISHED/FINISHED FLATS/BUNGAL OWS, THE POSSESSION SHALL REMAIN WITH THE SELLER TILL FULL PAYMENT IS MADE. ALL THESE FACTS SUGGEST THAT THE ASSESSEE WAS A DEVELOPER AND IT HAS NEVER WORKED AS A CONTRACTOR ON BEHALF OF THE PURCHASERS. WE ALSO GET SUPPORT FROM TH E DECISION OF THE ITAT IN THE CASE OF PARAS HOUSING (SUP RA) AND VARDHMAN BUILDERS & DEVELOPERS (SUPRA). OUR THIS VIEW IS ALSO SUPPORTED BY THE DECISION OF THE HON'BL E GUJARAT HIGH COURT IN THE CASE OF CIT VS. RADHE DEVELOP ERS AGRAWAL BUILDERS ITA NO. 488/2014 26 (SUPRA) WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UND ER :- THE ASSESSEE HAD, IN PART PERFORMANCE OF THE AGREEMENT TO SELL THE LAND IN QUESTION, WAS GIVEN POSSESSION THEREOF AND HAD ALSO CARRIED OUT THE CONSTRUCTION WORK FOR DEVELOPMENT OF THE HOUSING PROJECT. COMBINED READING OF S. 2(47)(V) AND S. 53A OF THE TRANSFER OF PROPERTY ACT WOULD LEAD TO A SITUAT ION WHERE THE LAND WOULD BE FOR THE PURPOSE OF IT ACT DEEMED TO HAVE BEEN TRANSFERRED TO THE ASSESSEE. IN THAT VIEW OF THE MATER, FOR THE PURPOSE OF INCOME DERIVED FROM SUCH PROPERTY, THE ASSESSEE WOULD BE T HE OWNER OF THE LAND FOR THE PURPOSE OF THE SAID ACT. IT IS EQUALLY TRUE THAT SUCH TITLE WOULD PASS ONLY UPON EXECUTION OF A DULY REGISTERED SALE DEED. HOWEVER, FOR THE LIMITED PURPOSE OF THESE PROCEEDINGS, ONE IS NO T AGRAWAL BUILDERS ITA NO. 488/2014 27 CONCERNED WITH THE QUESTION OF PASSING OF THE TITLE OF THE PROPERTY BUT ONLY EXAMINING WHETHER FOR THE PURPOSE OF BENEFIT UNDER S. 80IB(10), THE ASSESSEE COULD BE CONSIDERED AS THE OWNER OF THE LAND IN QUESTION. F OR THE LIMITED PURPOSE OF DEDUCTION U/S 80IB(10), THE ASSE SSEE HAD SATISFIED THE CONDITION OF OWNERSHIP ALSO, EVEN IF IT WAS NECESSARY. THE TRIBUNAL COMMITTED NO ERROR IN HOLDING THAT THE ASSESSES WERE ENTITLED TO THE BENEFIT U/S 80IB(10) EVEN WHERE THE TITLE OF THE LANDS HAD NOT PASSED ON TO T HE ASSESSEE AND IN SOME CASE, THE DEVELOPMENT PERMISSIONS MAY ALSO HAVE BEEN OBTAINED IN THE NAME OF THE ORIGINAL LAND OWNERS. IT IS NOT EVEN THE CAS E OF THE REVENUE THAT OTHER CONDITIONS OF S. 80IB WERE NOT FULFILLED. AGRAWAL BUILDERS ITA NO. 488/2014 28 THE DECISIONS IN THE CASES OF RADHE DEVELOPERS AND PARAS HOUSING PVT. LTD. (SUPRA) WERE OF A LATER DATE THAN THE DECISION OF ITAT IN THE CASE OF SKY DEVELOPERS (SUPR A). 9. IN VIEW OF THE ABOVE PECULIAR FACTUAL MATRIX, WE ALLOW THE APPEAL OF THE ASSESSEE. PRONOUNCED IN OPEN COURT ON 18 TH AUGUST, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 18 TH AUGUST, 2015 DN/-