KRISH ENTERPRISES, MUMBAI V. ASST CIT 24(1),

ITA 5554/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87844 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 05-01-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 03-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIPDR
• Keywords: Competent authority
• Section: 234B; 80IB; 133(6)

Judgement Text

, , , , , ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.5554/MUM/2014 ASSESSMENT YEAR: 2010-11) M/S KRISH ENTERPRISES, 2/12, VIJAY VILLA BUILDING, HARDEVI SOCIETY, NEAR JAIN TEMPLE, STATION ROAD, JOGIESHWARI (W), MUMBAI-4000060 ! ! ! ! / VS. THE ASST. COMMISSIONER OF INCOME-TAX-24(1), MUMBAI ( ! $% /ASSESSEE) ( & / REVENUE) P.A. NO.AAIFK4450A ( ! $% ' ( ' ( ' ( ' ( / // / ASSESSEE BY ) SHRI VIMAL PUNMIYA ( & ' ( ' ( ' ( ' ( / REVENUE BY : SHRI NEIL PHILIP-DR ! ' %) / // / DATE OF HEARING : 05/01/2015 *+, ' %) / DATE OF PRONOUNCEMENT : 05/01/2015 - - - - / / / / O R D E R PER JOGINDER SINGH (JM) : AGGRIEVED BY THE IMPUGNED ORDER DATED 25/07/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. THE ASSESSEE IS AGGRIEVED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB(10) OF T HE INCOME M/S KRISH ENTERPRISES 2 TAX ACT, 1961 AMOUNTING TO RS.1,42,53,667/- ON THE PLEA THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DID NO T APPRECIATE THAT THE CONDITION OF COMPLETION IS NOT APPLICABLE SINCE THE PROJECT WAS APPROVED ON 05/03/2004, BEFORE THE INSE RTION OF CONDITION OF COMPLETION INSERTED WITH EFFECT FROM 0 1/04/2005. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE, SHRI VIMAL PUNMIYA, ADVANCED HIS ARGUMENTS WHICH ARE IDEN TICAL TO THE GROUND RAISED BY SUBMITTING THAT THE PROJECT WA S APPROVED ON 05/03/2004, THEREFORE, THERE WAS NO REQUIREMENT OF OBTAINING COMPLETION CERTIFICATE AND GRAM PANCHAYAT WAS THE C OMPETENT AUTHORITY AT THE RELEVANT TIME TO ISSUE COMPLETION CERTIFICATE. IT WAS ALSO PLEADED THAT ASSESSEE APPLIED FOR COMPLETI ON CERTIFICATE VIDE LETTER DATED 31/03/2008 BUT WAS NOT GRANTED SU CH CERTIFICATE WHICH WAS BEYOND THE CONTROL OF THE ASS ESSEE. PLEA WAS ALSO RAISED THAT SECTION 80IB(10) OF THE ACT IS A BENEFICIAL PROVISION, CONSEQUENTLY, IT SHOULD BE INTERPRETED L IBERALLY. RELIANCE WAS PLACED UPON THE DELHI BENCH OF THE TRI BUNAL IN THE CASE OF CHD DEVELOPERS LTD. WHICH WAS APPROVED BY H ONBLE DELHI HIGH COURT IN (2014) 43 TAXMAN.COM 249 (DEL.) . RELIANCE WAS ALSO PLACED UPON THE DECISIONS IN ITO VS SAI KR UPA DEVELOPERS (ITA NO.3661/MUM/2011), CIT VS JAIN HOUS ING & CONSTRUCTION LTD. (2013) 30 TAXMAN.COM 131 (MAD.), AND MANAN CORPORATION VS ACIT (ITA NO.1053 OF 2011 ORDER DATE D 03/09/2012) FROM HONBLE GUJARAT HIGH COURT. IT WAS ALSO EXPLAINED THAT IDENTICALLY FOR A.Y. 2009-10 IN THE CASE OF ASSESSEE ITSELF, THE MUMBAI BENCH OF THE TRIBUNAL VIDE ORDER DATED 22/09/2014 (ITA NO.6728/MUM/2013) ALLOWED THE APPEAL OF THE ASSESSEE. M/S KRISH ENTERPRISES 3 2.1. ON THE OTHER HAND, THE LD. DR, SHRI NEIL PHILI P, THOUGH DEFENDED THE CONCLUSION DRAWN IN THE IMPUGNED ORDER BUT DID NOT CONTROVERT THE FACTUAL FINDING THAT THE IMPUGNE D ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION C ITED BY THE LD. COUNSEL FOR THE ASSESSEE. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION F ROM THE AFORESAID ORDER OF THE TRIBUNAL DATED 22/09/2014 IN THE CASE OF ASSESSEE ITSELF ON IDENTICAL FACTS/ISSUE. 2. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER IN THE VASAI-VIRAR REGION OF THANE DIST. SHRI PURUSHOTTAM A. KAWALI THE ORIGINAL OWNER OF THE LAND WAS AWARDED WITH COMMENCEMENT CERTIFICATE FROM CIDCO AS PER LETTER NO.CIDCO/VVSR/BP-1087/W/2500 DATED 5/3/2004 WITH RE GARD TO VARIOUS SECTORS INTER-ALIA INCLUDING SECTOR-4, WHIC H IS DEVELOPED BY THE ASSESSEE AS PER ITS AGREEMENT WITH M/S.ADINATH DEVE LOPERS. SEQUENCE OF EVENTS IS STATED IN THE FACT SHEET SUB MITTED BY LD. AR OF THE ASSESSEE AS UNDER. DATE EVENT REMARK PAGE NO. BEFORE 7.2.1997 PURUSHOTTAM A. KAWALI THE ORIGINAL OWNER OF AGRICULTURE LAND. 07/02/1997 OWNER CONVERTED AGRICULTURE LAND INTO NON-ARCULTURE LAND. VIDE ORDER BEARING NO.REV/DESK-1/T- 9/NAP/SR-3/96 OF OFFICE OF COLLECTOR, THANE. 05.03.2004 CIDCO APPROVED BLOCK PLAN AS RESIDENTIAL WITH SHOPLINE BUILDING VIDE NO.CIDCO/VVSR/BP- 1087/W/2500 FOR DVELOPMENT OF SECTOR.I,II,III, IV & V 0.2.07.2004 OWNER TRANSFER DEVELOPMENT RIGHT TO MR. KUNVERJI BACHHU SHAH FOR DEVELOPMENT OF SECTOR NO.I,II,III, IV & V 40-77 09.07.2004 MR. KUNVERJI BACHHU SHAH TRANSFER DEVELOPMENT RIGHT TO M/S. ADINATH DEVELOPERS FOR DEVELOPMENT OF SECTOR NO.I,II,III, IV & V 78-121 30.04.2007 M/S. ADINATH DEVELOPERS TRANSFER DEVELOPMENT RIGHT TO APPELLANT FOR BUILDING NO.1 WING C, BUILDING NO.2 WING A,B,C & BUILDING NO.3 WING A,B,C OF SECTOR NO.IV (100% RESIDENTIAL 122-142 M/S KRISH ENTERPRISES 4 PROJECT) ADMEASURING AREA OF 5499.17 SQ.MTR. (I.E. MORE THAN 1 ACRE) 15.9.2005 M/S.ADINATH DEVELOPERS TRANSFER DEVELOPMENT RIGHT TO LEELA BUILDERS. FOR REMAINING BUILDING AND ALL COMMERCIAL AREA RIGHT 143-161 ..3.2008 PROJECT WAS COMPLETED 17.03.2008 HOUSE TAX LEVIED 168-170 27.03.2008 PAID WATER CONNECTION CHARG ES TO VIRAR NAGARPALIKA 171-172 28.03.2008 ARCHITECT CERTIFIED THAT PROJECT IS COMPLETED 29.03.2008 BOLINJ GRAMPANCHAYAT ISSUED COMPLETION CERTIFICATE 177 31.03.2008 FIRM APPLIED TO CIDCO FOR GRANTING OCCUPATION CERTIFICATE 176 2.1 DURING THE YEAR UNDER CONSIDERATION THE ASSESSE E CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE INCOME TAX ACT, 1961 (THE ACT), WHICH HAS BEEN DISALLOWED BY THE AO. THE REASONS GIVEN BY AO FOR DISALLOWANCE OF THE CLAIM ARE AS UNDER: I. THE ASSESSEE COULD NOT PRODUCE COMPLETION CERTI FICATE OBTAINED FROM CIDCO WITHIN A PERIOD OF FOUR YEARS I.E. BEFORE 31/ 3/2008. II. VASAI VIRAR MUNICIPAL CORPORATION IN RESPONS E TO QUERY RAISED BY AO VIDE NOTICE ISSUED UNDER SECTION 133(6) HAS STAT ED THAT IT DID NOT ISSUE COMPLETION CERTIFICATE TO THE ASSESSEE AND A S PER LETTER RECEIVED FROM VASAI-VIRAR MUNICIPAL CORPORATION PERMISSION O F REVISED DEVELOPMENT PLAN WAS ISSUED VIDE LETTER DATED 23/3/ 2010. THUS AO OBSERVED THAT ASSESSEE DID NOT COMPLETE THE BUILDIN G WITHIN THE MANDATORY TIME LINE I.E. 31/3/2008. III. ACCORDING TO DETAILS FILED BEFORE AO THE ASSE SSEE HAD BEEN INCURRING EXPENDITURE BEYOND 31/3/2008 IN THE SHAPE OF FIXING OF KITCHEN DOORS, SLIDING WINDOWS, ELECTRIC METER PURC HASE, LOFT TANK PURCHASE, PLUMBING PIPES, ELECTRIC WIRING CABLES E TC. WHICH IS INDICATIVE OF THE FACT THAT PROJECT OF THE ASSESS EE WAS NOT COMPLETE. M/S KRISH ENTERPRISES 5 2.2 FURTHER THE AO REJECTED THE CONTENTION OF THE ASSESSEE THAT COMPLETION CERTIFICATE ISSUED BY GRAM PANCHAYAT BOL INJ, VIRAR SHOULD BE CONSIDERED TO BE FULFILLMENT OF THE CONDITION OF CO MPLETION OF PROJECT. THE AO REJECTED SUCH CONTENTION ON THE BASIS THAT T HE CERTIFICATE ISSUED BY GRAM PANCHAYAT WILL NOT SERVE THE PURPOSE OF TH E ASSESSEE AND ONLY CIDCO COULD ISSUE SUCH CERTIFICATE, THEREFORE, THE CERTIFICATE ISSUED BY GRAM PANCHAYAT CANNOT BE TAKEN AS FULFILLMENT O F THE CONDITION OF COMPLETION OF THE PROJECT BEFORE 31/3/2008. 2.3 THE A.O ALSO OBSERVED THAT THE PROJECT WAS APPR OVED AS SINGLE PROJECT BY LOCAL AUTHORITY WHICH WAS CAPABLE OF B EING DIVIDED INTO VARIOUS PARCELS AND ALLOCATE TO DIFFERENT ENTITIES FOR DEVELOPMENT BY THE DEVELOPMENT RIGHT OWNER THEN THE VERY ACTION OF THE OTHER PARTY WHICH INTER-ALIA INCLUDE M/S.ADINATH DEVELOPERS WILL ABSO LVE THE BUYERS FROM THE ELIGIBILITY TO CLAIM DEDUCTION UNDER SECTION 80 IB(10) OF THE ACT. THE DISALLOWANCE OF DEDUCTION WAS CHALLENGED IN AN APPE AL FILED BEFORE LD. CIT(A). IT WAS SUBMITTED THAT ASSESSEE HAD APPLIED TO CIDCO FOR COMPLETION CERTIFICATE ON 31/3/2008. HOWEVER, CID CO DID NOT ISSUE COMPLETION CERTIFICATE. THE GRAM PANCHAYAT HAD ISS UED THE COMPLETION CERTIFICATE ON 29/3/2008 CERTIFYING THE FACT THAT T HE PROJECT IS COMPLETE AND IS HABITABLE AND IS ALSO READY TO BE OCCUPIED BY THE FLAT OWNERS. THEREFORE, THE CONDITION REGARDING COMPLETION OF P ROJECT WAS COMPLIED WITH. IT WAS ALSO SUBMITTED THAT AS PER EXPLANATIO N TO SECTION 10(20) OF THE ACT GRAM PANCHAYAT ALSO FALLS UNDER LOCAL AUTHO RITY AND REFERENCE WAS MADE TO THE DECISION OF PUNE BENCH OF THE TRIB UNAL IN THE CASE OF KRISHNA HARUBHAU LOHOKARE VS. ITO(ITA NO.937/PN/201 0) , WHEREIN IT HAS BEEN HELD THAT FOR THE PURPOSE OF ISSUE OF COM PLETION CERTIFICATE UNDER SECTION 80 IB(10) GRAM PANCHAYAT IS A LOCAL AUTHORITY. 2.4 IT WAS FURTHER SUBMITTED THAT REQUIREMENT OF CO MPLETION CERTIFICATE DOES NOT APPLY TO A CASE WHERE PROJECT HAS BEEN APPROVED BEFORE 31/3/2005. ALL THESE CONTENTIONS OF THE ASS ESSEE ARE NOTED IN M/S KRISH ENTERPRISES 6 PARA -4 OF THE ORDER OF LD. CIT(A). LD. CIT(A) HA S SUMMARIZED THE CONTENTIONS OF THE ASSESSEE AS UNDER: I. THAT THE DEDUCTION UNDER SECTION 80 IB(10) SHO ULD NOT BE DISALLOWED SINCE THE ASSESSEE HAS COMPLETED THE PROJECT BEFORE 31.03 .2008 AND HAS ALSO OBTAINED THE COMPLETION CERTIFICATE FROM THE GRAM P ANCHAYAT, BOLINJ. II. THAT GRAM PANCHAYAT , BOLINJ IS A COMPETENT LOC AL AUTHORITY AUTHORIZED TO ISSUE A COMPLETION CERTIFICATE AS PER THE INCOME TAX ACT AS WELL AS THE CONSTITUTION OF INDIA. III. THAT THE REQUIREMENT OF A COMPLETION CERTIFIC ATE IS A TECHNICAL FORMALITY FOR WHICH THE DEDUCTION SHOULD NOT BE DISALLOWED. IV) THAT THE ASSESSEE IS NOT REQUIRED TO OBTAIN THE COMPLETION CERTIFICATE BECAUSE THE PROJECT WAS APPROVED PRIOR TO 01.04.200 5 WHEN THE AMENDED PROVISION DID NOT EVEN EXIST AND THE QUESTION OF P UTTING THEM INTO EFFECT DID NOT ARISE AT THAT TIME. THE OLD PROVISIONS NEVER R EQUIRED THE COMPLETION CERTIFICATE AND HENCE, THE ASSESSEE IS NOT REQUIRE D TO OBTAIN THE SAME. HENCE, IN VIEW OF THE ABOVE, WE REQUEST YOUR HONOUR TO GRANT A SYMPATHETIC CONSIDERATION TOWARDS THE ASSESSEE AND ALLOW THE CL AIM OF DEDUCTION UNDER SECTION 80 IB(10) OF THE IT ACT, 1961. 2.5 AFTER CONSIDERING THE AFOREMENTIONED SUBMISSION S OF THE ASSESSEE LD. CIT(A) HAS COME TO THE CONCLUSION THAT PRIMA FACIE THE PROJECT WAS NOT APPROVED BY LOCAL AUTHORITY I.E. CI DCO AS HOUSING PROJECT BUT AS RESIDENTIAL BUILDING IN SHOP LINE AS THERE WAS NO PROVISION FOR COMMERCIAL AREA IN HOUSING PROJECT PR IOR TO 01/04/2004. THE COMPLETION CERTIFICATE WAS NOT ISSUED BY LOCAL AUTHORITY/COMPETENT AUTHORITY I.E. CIDCO TILL THE D ATE OF THE ASSESSMENT ORDER. THE PROJECT OF THE ASSESSEE COUL D NOT BE CONSIDERED TO BE COMPLETE IN VIEW OF THE FACTS MENTIONED BY THE AO IN THE ASSESSMENT ORDER. THE PERMISSION TO CONSTRUCT THE STRUCTURE WAS GIVEN BY THE LOCAL AUTHORITY I.E. CIDCO AND THE COMPLETI ON CERTIFICATE WAS ISSUED BY ANOTHER LOCAL AUTHORITY I.E. GRAM PANCHAY AT BOLINJ, VIRAR. THOUGH GRAM PANCHAYAT MAY BE A COMPETENT AUTHORITY TO ISSUE SUCH CERTIFICATE BUT IN THE INSTANT CASE THE PERMISSION TO CONSTRUCT THE BUILDING WAS NOT ACCORDED BY THE GRAM PANCHAYAT BO LINJ, VIRAR. THE APPELLANT HAD APPLIED FOR COMPLETION CERTIFICATE FR OM CIDCO AND COULD NOT OBTAIN IT FROM THE SAID COMPETENT AUTHORITY. IN THE CIRCUMSTANCES M/S KRISH ENTERPRISES 7 GETTING A CERTIFICATE FROM OTHER LOCAL AUTHORITY CA NNOT HOLD ANY VALIDITY. THE QUESTION WHICH IS IMPORTANT TO BE DECIDED IS TH AT WHETHER IT IS A COMPETENT AUTHORITY TO ISSUE THE CERTIFICATE OF CO MPLETION TO THE ASSESSEE. THE EVIDENCE OF SUCH COMPETENCE OF THE AUTHORITY HAS NOT BEEN PROVIDED BY THE ASSESSEE EITHER BEFORE TH E AO OR BEFORE LD. CIT(A), THEREFORE, THE CASE LAW RELIED UPON BY THE ASSESSEE WILL NOT SUPPORT ITS CASE. IN THIS MANNER LD. CIT(A) HAS UP HELD THE DISALLOWANCE. THE CONCLUDING OBSERVATIONS OF LD. C IT(A) ARE AS UNDER: 5.1.. THE APPELLANT HAD FILED COPY OF APPLICATION LETTER DATED 31.3.2008, SUBMITTED TO THE CIDCO REGARDING THE COM PLETION OF THE PROJECT AND ISSUANCE OF .COMPLETION CERTIFICATE, BEFORE THE ASSESSING OFFIC ER. BUT THE AID CERTIFICATE WAS NOT ISSUED BY THE CIDCO. IT WAS OB SERVED B THE ASSESSING OFFICER THAT IT WAS PENDING FOR MORE THAN A, YEAR. THE APPELLANT IN THE MEANWHILE OBTAINED COMPLETION CER TIFICATE FROM ANOTHER. LOCAL AUTHORITY VIZ. GRAM PANCHAYAT, BOLI NJ, VIRAR AND CLAIMED THAT THE PROJECT WAS COMPLETED ARID IT HAD FULFILLED THE CONDITIONS FOR CLAIMING DEDUCTION U/S.801B(10) OF T HE INCOME TAX ACT. THE ASSESSING OFFICER HAD ALSO ISSUED SUMMONS U/SJ3 3(6) OF THE. INCOME TAX ACT TO VASAI -VIRAR MUNICIPAL CORPORATIO N OR EXAMINATION OF THE ISSUE; BY WHICH SHE CAME TO KNOW THAT THERE WA S A REVISED DEVELOPMENT PERMISSION ISSUED BY THE CIDCO IN RESPE CT OF THE SAID PROJECT BEARING REFERENCE NO. CIDCO/VVSR/RDP/BP-108 71W/6048 DATED 23.3.20W, THE COPY OF THE SAME WAS ENCLOSED B Y THE ASSESSING OFFICER FOR REFERENCE. AS PER THE ABOVE STATED LETT ER, THE ASSESSING OFFICER HAD COME TO THE CONCLUSION THAT THE PROJECT WAS NOT COMPLETED TILL THE MANDATORY TIME LINE I.E. 31.3.2008 AND DEN IED THE DEDUCTION U/S.8OLB(10) OF THE INCOME TAX ACT. 5.2. FROM THE FOREGOING PARAS, IT IS OBSERVED THAT THERE ARE CERTAIN IRREGULARITIES/DELAYS IN GETTING THE COMPLETION CER TIFICATE FROM CIDCO BY THE APPELLANT. IT IS VERY MUCH OBVIOUS THAT THE APPELLANT APPROACHED ANOTHER LOCAL AUTHORITY TO CUT SHORT THE REGULAR PR OCEEDINGS AND OBTAINED THE COMPLETION CERTIFICATE FROM ANOTHER LO CAL AUTHORITY. THE PERMISSION TO CONSTRUCT THE STRUCTURE WAS GIVEN BY THE LOCAL AUTHORITY I.E. CIDCO AND THE COMPLETION CERTIFICATE WAS ISSUE D BY ANOTHER LOCAL AUTHORITY I.E. GRAM PANCHAYAT, BOLINJ, VIRAR. THE A PPELLANT SUBMITTED THAT GRAM PANCHAYAT ALSO WAS A COMPETENT AUTHORITY TO ISSUE THE COMPLETION CERTIFICATE TO CLAIM THE BENEFIT OF DEDU CTION U/S.8OLB(10) OF THE INCOME TAX ACT. HOWEVER, I AM OF THE OPINION TH AT GRAM PANCHAYAT MAY BE A COMPETENT AUTHORITY TO ISSUE SUCH A CERTIF ICATE BUT IN THE INSTANT CASE, THE PERMISSION TO CONSTRUCT THE BUILD ING WAS NOT ACCORDED BY THE GRAM PANCHAYAT, BOLINJ, VIRAR. THE APPELLANT HAD APPLIED FOR COMPLETION CERTIFICATE FROM CIDCO ONLY AND COULD NO T OBTAIN FROM THE SAID COMPETENT AUTHORITY. IN THE CIRCUMSTANCES GE TTING A CERTIFICATE FROM ANOTHER LOCAL AUTHORITY CANNOT HOLD ANY VALIDI TY. IT MAY BE A LOCAL AUTHORITY AS DEFINED BY THE INCOME TAX ACT BU T THE QUESTION M/S KRISH ENTERPRISES 8 REMAINS IN THE INSTANT CASE WHETHER IT IS A COMPETE NT AUTHORITY TO ISSUE THE CERTIFICATE OF COMPLETION TO THE APPELLANT. TH E QUESTION OF COMPETENCE HAS NOT BEEN PROVED BY THE APPELLANT E ITHER, BEFORE THE ASSESSING OFFICER OR BEFORE THE APPELLATE AUTHORITY . HENCE THE CASE LAWS RELIED ON BY THE APPELLANT DOES NOT SUPPORT IT S CASE. IN THE CIRCUMSTANCES, THE CLAIM OF DEDUCTION U/S.801B(1O) OF INCOME. TAX ACT CANNOT B ALLOWED AND THE ADDITION MADE BY THE ASSES SING OFFICER IS SUSTAINED. THIS GROUND OF APPEAL IS DISMISSED. AGGRIEVED, ASSESSEE HAS FILED THE AFORE MENTIONED G ROUNDS OF APPEAL. 3. AFTER NARRATING THE FACTS IT WAS SUBMITTED BY L D. AR THAT THE DEVELOPMENT AGREEMENT OF THE ASSESSEE, COPY OF WHIC H IS FILED AT PAGE 122 TO 142 OF THE PAPER BOOK WAS IN RESPECT OF S ECTOR NO.4 FOR BUILDING NO.1,WING-C, BUILDING NO.2, WING-A,B & C A ND BUILDING NO.3, WING A,B & C AND THIS IS 100% RESIDENTIAL PROJECT ADMEASURING AN AREA OF 5499.17 SQ.MTS., WHICH IS MORE THAN ONE ACR E. RELYING TO THE DEVELOPMENT AGREEMENT IT WAS SUBMITTED THAT THE TOT AL DEVELOPMENT RIGHTS IN RESPECT OF TOTAL AREA WERE TO THE TUNE OF 409272 SQ.FTS., OUT OF WHICH APPROVED AREA WAS 274272 SQ.FTS. OUT OF THE TOTAL DEVELOPED AREA THE ASSESSEE GOT 5499.12 SQ.MTRS. I.E. 59193 S Q.FTS. IN SECTOR -4. IN THIS REGARD LD. AR REFERRED TO CLAUSE (V) & (Z- B) OF PAGES 6 & 7 OF THE DEVELOPMENT AGREEMENT, COPY PLACED AT PAGES 128 TO 129 OF THE PAPER BOOK. IT WAS SUBMITTED THAT THIS PROJECT WAS 100% RESIDENTIAL PROJECT AND REST OF THE AREA WAS TRANSFERRED BY M/S. ADINAT H DEVELOPERS FOR DEVELOPMENT TO SAI LEELA BUILDERS AND COPY OF THIS AGREEMENT IS ALSO FILED AT PAGES 143 TO 161 OF THE PAPER BOOK. HE SU BMITTED THAT M/S. SAI LEELA BUILDERS IS DIFFERENT PARTY UNRELATED T O THE ASSESSEE. HE SUBMITTED THAT THE AREA OF DEVELOPMENT OF M/S. SAI LEELA BUILDERS WAS COMPRISING OF RESIDENTIAL AS WELL AS COMMERCIAL AREA. THUS IT WAS SUBMITTED BY LD. AR THAT IN THE AREA DEVELOPED BY THE ASSESSEE NO COMMERCIAL BUILDING WAS INVOLVED. 3.1 LD. AR FURTHER SUBMITTED THAT REVISED BUILDING PLAN FOR WHICH INFORMATION WAS RECEIVED BY THE AO VIDE LETTER DATED 23/3/2010 DID NOT BELONG TO ASSESSEE AS THE SAID PLAN WAS NOT REV ISED IN RESPECT OF M/S KRISH ENTERPRISES 9 PROJECT DEVELOPED BY THE ASSESSEE BUT WAS IN RESPEC T OF PROJECT DEVELOPED BY OTHER DEVELOPER. THEREFORE, LD. AR PL EADED THAT THE SAID REVISED PLAN HAS NOTHING TO DO WITH THE PROJECT OF THE ASSESSEE. 3.2 SO FAR AS IT RELATES TO CONTENTION REGARDING CO MPLETION CERTIFICATE IT WAS SUBMITTED BY LD. AR THAT PROJECT OF THE ASSESSE E WAS APPROVED BY CIDCO AS PER LETTER DTED 5/3/2004 ( THE COPY OF THE SAID LETTER WAS NOT ENCLOSED IN THE PAPER BOOK. HOWEVER, IT WAS SUBMIT TED DURING THE COURSE OF HEARING AND COPY WAS ALSO GIVEN TO LD. D R) IT WAS SUBMITTED BY LD. AR THAT THE CONDITION REGARDING COMPLETION OF PROJECT IS NOT APPLICABLE ON THE PROJECT WHICH ARE APPROVE D BEFORE 31/3/2005. LD. AR HAS SUBMITTED A CHART SHOWING THE ESSENTIAL CONDITIONS BEFORE 01/04/2005 AND AFTER 01/04/2005 AND THE SAID CHART READ AS UNDER: SN HEAD BEFORE 1.4.05 AFTER 1.4.05 REMARKS 1. CUT OF DATE PROJECTS APPROVED BEFORE 31.3.2005 PROJECTS APPROVED BEFORE 31.03.2007 DEDUCTION PERIOD INCREASED 2. COMMENCEMENT AFTER 1.10.1998 AFTER 1.10.1998 SAM E 3. COMPLETION NO PROVISION I) PROJECTS APPROVED BEF ORE 1.4.2004 ON OR BEFORE 31.03.2008 II.PROJECTS APPROVED AFTER 1.4.2004 WITHIN 4 YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH APPROVAL RECEIVED THESE PROVISIONS ADDED 4. AREA MINIMUM 1 ACRE PLOT SIZE. MINIMUM 1 ACRE PLOT SIZE SAME. 5. MAXIMUM BUILT UP AREA 1000 SQ.FT. OR 1500 SQ.FT. AS APPLICABLE ACCORDING TO CITIES 1000 SQ.FT. OR 1500 SQ.FT. AS APPLICABLE ACCORDING TO CITIES SAME 6. BUILT UP AREA NO DEFINITION BUILT-UP AREA DEFIN E DETAIL DEFINITION 7. PERMITTED COMMERCIAL AREA NO PROVISION NOT EXCEEDING 5% OR 2000 SQ.FT. BUILT UP AREA NO RESTRICTION IN COMMERCIAL USE OF LAND SUBJECT TO APPROVING UNDER HOUSING CATEGORY 8. COMPLETION CERTIFICATE NO PROVISION COMPLETION CERTIFICATE TO BE OBTAINED BY LOCAL AUTHORITY. THESE PROVISIONS ADDED. THUS, THERE IS NO CONDITION OF COMPLETION AND FURNI SHING COMPLETION CERTIFICATE. 3.3 FOR RAISING THE CONTENTION THAT COMPLETION OF T HE PROJECT WAS NOT A CONDITION PRECEDENT IN RESPECT OF PROJECT WHICH WE RE APPROVED BEFORE 31/3/2005, LD. AR RELIED UPON THE FOLLOWING DECISIO NS: M/S KRISH ENTERPRISES 10 (1) CIT VS. CHD DEVELOPERS (2014) 43 TAXMAN.COM 24 3(DEL)- IN THIS CASE APPROVAL FOR THE PROJECT WAS GIVEN BY MATHURA VRINDAVAN DEVELOPMENT AUTHORITY ON 16/03/2005. THE AO APPLIE D THE PROVISIONS OF SUB-SECTION (10) OF SECTION 80IB BEING SUBSTITU TED BY FINANCE (NO.2) ACT, 2004, W.E.F. 1/4/2005 AND DISALLOW THE CLAIM O F DEDUCTION ON THE REASONING THAT THE COMPLETION CERTIFICATE IN TERMS OF EXPLANATION (II) TO CLAUSE (A) OF SECTION 80IB(10) HAD NOT BEEN GRANTED TO THE ASSESSEE SO AS TO ENABLE IT TO AVAIL THE BENEFIT PROVIDED BY S ECTION 80 IB. IT WAS CONTENDED BEFORE AO THAT VIDE LETTER DATED 5/11/20 08 IT HAD APPLIED FOR COMPLETION CERTIFICATE BUT THE SAME WAS NOT IS SUED WHICH WAS BEYOND ITS CONTROL AND POWER. ORDER PASSED BY AO W AS UPHELD BY LD. CIT(A). THE TRIBUNAL HELD THAT IN A CASE WHERE APP ROVAL OF THE PROJECT IS GRANTED BY THE COMPETENT AUTHORITY BEFORE 1/4/20 05 THE POSITION WILL BE GOVERNED BY THE NON-AMENDED PROVISIONS AND IN NON-AMENDED PROVISIONS THERE WAS NO CONDITION LIKE PROJECT C OMPLETION CERTIFICATE. THE ASSESSEE WAS NOT EXPECTED TO FULFILL THE COND ITION WHICH WAS NOT ON THE STATUTE WHEN SUCH APPROVAL WAS GRANTED AND T RIBUNAL DIRECTED THE AO TO ALLOW THE DEDUCTION. HONBLE DELHI HIGH COURT HAS UPHELD THE ORDER PASSED BY THE TRIBUNAL. (2) ITO VS. SAI KRUPA DEVELOPERS, DECISION DATED 14/3/2012 IN ITA NO.3661/MUM/2011, COPY PLACED ON RECORD. THE AFOR EMENTIONED PROPOSITION WAS UPHELD AS PER FOLLOWING OBSERVATION S: REGARDING THE NEXT OBJECTION OF THE AO, THAT THE P ROJECT WAS NOT COMPLETED BEFORE 31.3.2008, THE CONTENTION OF THE R EPRESENTATIVE IS THAT AS THE PROJECT OF THE APPELLANT WAS APPROVED BEFORE 31.3.2005, THERE WAS NO REQUIREMENT OF OBTAINING THE COMPLETION CERT IFICATE. THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS. IN T HE CIRCUMSTANCES, I ACCEPT THE PLEA OF THE REPRESENTATIVE THAT DEDUCTIO N U/S. 80 IB(10) CANNOT BE DENIED MERELY BECAUSE THE APPELLANT DID N OT OBTAIN THE COMPLETION CERTIFICATE ON OR BEFORE 31.3.2008. IN V IEW OF ABOVE, I FIND THAT THERE IS NO JUSTIFICATION FOR DENYING DEDUCTIO N U/S. 80IB(10). 10. AGGRIEVED BY THE STAND SO TAKEN BY THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. II. HAVING HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE AND GOING TO THE FACTS OF THE CASE AND DETAILED REASONING GIVEN BY THE CIT(A), WE ARE M/S KRISH ENTERPRISES 11 NOT INCLINED TO DISTURB THE WELL REASONED ORDER OF THE CIT(A), WHEREIN, HE HAS ALLOWED THE CLAIM FOR DEDUCTION U/S. 80 IB(1 0)) TO THE ASSESSEE FIRM. (3) CIT VS. JAIN HOUSING & CONSTRUCTION LTD. ( 201 3) 30 TAXAMAN.COM 131 (MAD) - IN THIS CASE IT WAS HELD BY HONBLE MA DRAS HIGH COURT THAT IT IS DIFFICULT TO ACCEPT THE CASE OF REVENUE THAT THAT THE CLAIM FOR DEDUCTION HAS TO BE REJECTED ON THE GROUND THAT AS SESSEE DID NOT FURNISH THE COMPLETION CERTIFICATE AS THERE WAS NO SUCH REQUIREMENT UNDER SECTION 80 IB(10), AS IT STOOD DURING THE REL EVANT ASSESSMENT YEAR 2004-05. 3.4 LD. AR FURTHER SUBMITTED THAT THE ASSESSEE HAD SUBMITTED VARIOUS EVIDENCES TO SHOW THAT THE PROJECT WAS COMP LETED ON 31/3/2008 AND REFERENCE WAS MADE TO THE FOLLOWING E VIDENCES: (I) COMPLETION CERTIFICATE FROM ARCHITECT. (II) COMPLETION CERTIFICATE FROM GRAM PANCHAYAT, BO LINJ, VIRAR (LOCAL AUTHORITY) DATE 29/03/2008. (PAGE NO.177) (III) NO DUE CERTIFICATE FROM GRAM PANCHAYAT DATED 17/03/2008. (REFER PAGE NO. 173-175). (IV) APPLIED TO CIDCO FOR GRANTING COMPLETION CERTI FICATE VIDE LETTER DATED 3 1/03/2008. (PAGE NO.176) (V) NOC FROM WATER DEPARTMENT AND ACCORDINGLY WATER CHARGES WERE PAID TO VIRAR NAGAR PALIKA ON 27/03/2008. (IT IS RE QUIRE AFTER COMPLETION OF PROJECT). (REFER PAGE NO.171-172) (VI) HOUSE TAX WAS PAID ON 17/03/2008 AS COMPLETED HOUSE. IN MAHARASHTRA HOUSE TAX ARE LEVIED ACCORDINGLY TO NAT URE AND CONDITION OF PROPERTY. IN APPELLANT CASE PROJECT IS COMPLETED THEREFORE LOCAL BODY CHARGE HOUSE TAX ON PROJECT AS COMPLETED HOUSE. (PA GE NO. 168-170). 3.5 FOR THE PROPOSITION THAT NO COMMERCIAL PROPERTY WAS INVOLVED IN THE PROJECT OF THE ASSESSEE AS THE PROJECT OF THE A SSESSEE HAS TO BE CONSIDERED A SEPARATE PROJECT, LD. AR RELIED UPON T HE FOLLOWING DECISION. M/S KRISH ENTERPRISES 12 (I) KHYTI FINANCIAL SERVICES,ITA NO.3740/MUM/2008 A ND REFERENCE WAS MADE TO THE FOLLOWING FACTS AND FINDINGS RECORDED B Y ITAT: FACTS (PARA 2) THE ASSESSEE IS A PARTNERSHIP FIRM CONSISTING OF TW O PARTNERS VIZ M/S KHYATI FINANCIAL SERVICES P.LTD & SHRI. PARESH MOHANLAL PAREKH. THE APPELLANT FIRM ENTERED INTO A DEVELOPMENT AGREEMENT ON 25.4.2003 WITH HICKSON & DADAJEE P.LTD A COMPANY DULY INCORPORATED UNDER THE COMPANIES ACT, 1956 TO DEVELOP PROPERTY SITUATED AT VILLAGE PAHADI, GOREGAON (E) OWED BY M/S HICKSON & DADAJEE P.LTD IN PURSUANCE OF SAID DEVELOPMENT AGREEMENT, THE ASSESSEE FIRM UNDERTOOK TO CONSTRUCT RESIDENTIAL BUILDING VIZ., ACMEE ARMAY TO BE RESIDENTIAL AREA CONSTRUCTED AT 60,000 SQ.FT. APPRO X. COMPRISING 200 FLATS IN 7 WINGS IN GROUND PLUS UPPE R FLOORS TO BE APPROVED. THE SAID RESIDENTIAL BUILDIN G HAS TO BE CONSTRUCTED ON A SHOPPING COMPLEX COMPRISING OF APPROX. 10,566 SQ/FT/ BUILT UP AREA WHEREIN THE LIM ITED DEVELOPMENT RIGHT TO CONSTRUCT SHOPPING COMPLEX WAS ASSIGNED TO A DIFFERENT CONCERN VIZ LAKSHADEEP INVESTMENT & FINANCE P.LTD HEREINAFTER CALLED AS LI FPL, BEING A SISTER CONCERN OF THE APPELLANT THROUGH A SEPARATE DEVELOPMENT AGREEMENT DT 25.4.2003 ENTERED BETWEEN LIFPL & M/S HICKSON & DADAJEE PUT .LTD (OWNER OF THE PROPERTY) IN OTHER WORDS THE DEVELOPM ENT RIGHT OF THE PROPERTY WAS DIVIDED BETWEEN THE ASSES SEE FOR CONSTRUCTING RESIDENTIAL FLATS AND SHOPPING COM PLEX AT GROUND FLOOR TO LIFPL. THE CONSIDERATIONS TO BE PAID BY THE APPELLANT AND LIFPL WERE FIXED AT RS.11.56 C RORE & 2 CRORE RESPECTIVELY IN LIEU OF DEVELOPMENT RIGHT S RECEIVED BY THEM. FINDING (PARA 15) HOUSING PROJECT OF THE ASSESSEE IS DIFFERENT AND DISTINCT FROM THE PROJECT FOR BUILDING COMMERCIAL AREA BY ANOTHER ENTITY. HOUSING PROJECT DOES NOT INCLUDE CONSTRUCTION OF COMMERCIAL ESTABLISHMENT CARRIED BUT BY ANOTHER ENTITY IN THAT AREA. THEREFORE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 801B(10) FOR THE HOUSING PROJECT CANNOT BE DENIED BECAUSE THE COMMERCIAL PROJECT WAS CARRIED OUT BY A SISTER CONCERN. 3.6 HE HAS ALSO RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VANDANA PROPERTIES, 3 53 ITR 36 (BOM) AND REFERENCE WAS MADE TO THE FOLLOWING OBSERVATIONS: THE EXPRESSION HOUSING PROJECTS IS NEITHER DEFIN ED UNDER SECTION 2 OF ACT NOR UNDER SECTION 801B(10) OF THE ACT. EVEN UNDER MUMBAI MUNICIPAL CORPORATION ACT, 1988 AS ALSO UNDER DEVEL OPMENT CORPORATION REGULATIONS FOR GREATER MUMBAI, 1991, T HE EXPRESSION HOUSING PROJECT IS NOT DEFINED. THEREFORE, THE EX PRESSION HOUSING PROJECT IN SECTION 801B(10) WOULD HAVE TO BE CONST RUED AS COMMONLY UNDERSTAND. AS RIGHTLY HAVE TO BE CONSTRUCTED AS COMMONLY UNDER STOOD. AS RIGHTLY CONTENDED BY MR. INAMDAR SENIOR ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE AND MR. MISTRI, LEARNED SENI OR ADVOCATE AND MR. JOSHI, LEARNED ADVOCATE APPEARING ON BEHALF OF THE INTERVENERS, THE EXPRESSION HOUSING PROJECT IN COMMON PARLANCE WOU LD MEAN M/S KRISH ENTERPRISES 13 CONSTRUCTING A BUILDING OR GROUP OF BUILDINGS CONSI STING OF SEVERAL RESIDENTIAL UNITS. IN FACT, THE EXPLANATION IN SECT ION 801B(10) SUPPORTS THE CONTENTION OF THE ASSESSEE THAT THE APPROVAL GR ANTED TO A HOUSING PROJECT. THEREFORE, IT IS CLEAR THAT CONSTRUCTION O F EVEN ONE BUILDING WITH SEVERAL RESIDENTIAL UNITS OF THE SIZE NOT EXCEEDING 1000 SQ.FT. (E BUILDING IN THE PRESENT CASE) WOULD CONSTITUTE A H OUSING PROJECT UNDER SECTION 801B(10) OF THE ACT. THUS IT WAS SUBMITTED BY LD. AR THAT LD. CIT(A) HAS ERRED IN NOT ALLOWING THE RELIEF TO THE ASSESSEE AND ASSESSEE SH OULD BE GRANTED WITH DEDUCTION UNDER SECTION 80 IB(10) OF THE ACT. 4. ON THE OTHER HAND, LD. DR RELYING UPON THE ASSES SMENT ORDER AS WELL AS ORDER PASSED BY LD. CIT(A), WHICH HAVE BEE N DISCUSSED IN DETAIL IN THE ABOVE PART OF THIS ORDER SUBMITTED TH AT LD. CIT(A) HAS RIGHTLY HELD THAT ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80 IB(10) OF THE ACT AS IT DID NOT FULFILL THE REQUIRED CONDITION AS MENTIONED BY AO AND LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THE FIRST AND FOREMOST CASE OF THE REVENUE IS THAT THE ASSESSEE DID NOT SUBMIT COMPLETION CERT IFICATE FROM COMPETENT AUTHORITY WHICH ACCORDING TO THE OPINION OF AO AND LD. CIT(A) IS CIDCO. THE ASSESSEE HAD NOT ONLY SUB MITTED THE PROJECT COMPLETION CERTIFICATE ISSUE BY THE GRAM PANCHAYAT BUT ALSO VARIOUS EVIDENCES TO SHOW THAT THE PROJECT WAS COMPLETED BY 31/03/2008 AND THESE EVIDENCES HAVE ALSO BEEN DESCRIBED IN PARA 3. 4 OF THIS ORDER. IN OUR OPINION IT WILL NOT BE RELEVANT TO GO INTO MUC H DETAIL FOR THIS ISSUE AS IT IS CLEAR FROM THE DECISIONS OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHD DEVELOPERS AND HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. JAIN HOUSING CONSTRUCTION (SUPRA) THAT S UCH CONDITION OF SUBMISSION OF COMPLETION CERTIFICATE WAS NOT APPLIC ABLE TO THE PROJECTS WHICH HAVE BEEN APPROVED BY THE PUBLIC AUTHORITY BE FORE 31/3/2005. IN THE PRESENT CASE THE PROJECT WAS APPROVED FOR C OMMENCEMENT VIDE LETTER OF CIDCO DATED 05/03/2004. THUS, THE PROJEC T WAS APPROVED FOR M/S KRISH ENTERPRISES 14 COMMENCEMENT BEFORE 31/3/2005 AND OLD LAW WILL APPL Y WHEN IT WAS NOT A CONDITION PRECEDENT TO SUBMIT COMPLETION CER TIFICATE. IN VIEW OF THESE DECISIONS AND ALSO THE DECISIONS OF CO-ORDINA TE BENCHES RELIED UPON BY LD. AR WHICH HAVE BEEN DISCUSSED IN THE A BOVE PART OF THIS ORDER WE HOLD THAT DEDUCTION U/S. 80 IB (10) CAN NOT BE DENIED TO THE ASSESSEE FOR WANT OF COMPLETION CERTIFICATE FROM CIDCO. 5.1 THE OTHER OBJECTION BY THE AO IS REGARDING COMM ERCIAL ELEMENT WHICH ACCORDING TO THE SUBMISSIONS OF THE ASSESSE E IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE AS THERE IS NO COMMERCI AL ELEMENT IN THE PROJECT CONSTRUCTED BY THE ASSESSEE AND COMMERCIAL ELEMENT, IF ANY, FOR DEVELOPMENT WAS IN ANOTHER PROJECT WHICH IS NO T THE SUBJECT MATTER OF THIS APPEAL. 5.2 IT MAY ALSO BE MENTIONED HERE THAT THOUGH AO H AS GIVEN A PASSING REMARK FOR DISALLOWING THE CLAIM THAT WHEN A PROJECT IS APPROVED AS A SINGLE PROJECT BY THE LOCAL AUTHORITY WHICH IS CAPABLE OF DIVIDING INTO VARIOUS PARCELS AND ALLOCATED TO DIF FERENT ENTITIES FOR DEVELOPMENT BY THE DEVELOPMENT RIGHT OWNER THEN T HE ACTION OF THE DEVELOPER OF SPLIT SELLING OF THE PROJECT TO THE AS SESSEE AND M/S. SAI LEELA DEVELOPERS WILL ABSOLVE THE BUYERS FROM ELI GIBILITY TO CLAIM DEDUCTION UNDER SECTION 80 IB(10) OF THE ACT BUT AO HAS NOT SPELT OUT THAT HOW SUCH SPLITTING DONE BY M/S. ADINATH DEVELO PERS WILL DISENTITLE THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 80 IB (10) OF THE ACT. AS PER DECISION OF HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. VANDANA PROPERTIES (SUPRA) IT IS HELD THAT THE EXP RESSION HOUSING PROJECT IS NEITHER DEFINED UNDER SECTION 2 OF THE ACT NOR UNDER SECTION 80IB(10) OF THE ACT. IT IS ALSO NOT DEFINED UNDER MUMBAI MUNICIPAL CORPORATION ACT, THEREFORE, THE SAME HAS TO BE CONS TRUED AS COMMONLY UNDERSTOOD. IN COMMON PARLANCE HOUSING PROJECT W OULD MEAN CONSTRUCTING THE BUILDING OR GROUP OF BUILDINGS CON SISTING OF SEVERAL RESIDENTIAL UNITS. IN FACT THE EXPLANATION IN SEC TION 80 IB(10) SUPPORTS THE CONTENTION OF THE ASSESSEE THAT APPROVAL GRANTE D TO HOUSING PROJECT. M/S KRISH ENTERPRISES 15 THEREFORE, IT IS CLEAR THAT CONSTRUCTION OF EVEN ON E BUILDING WITH SEVERAL RESIDENTIAL UNITS OF SIZE NOT EXCEEDING 1000 SQ.FTS . E BUILDING IN THAT CASE WOULD CONSTITUTE A HOUSING PROJECT UNDER SECTI ON 10 IB(10) OF THE ACT. IF FACTS OF THE PRESENT CASE ARE SEEN IN THE LIGHT OF THE AFOREMENTIONED DECISION OF HONBLE BOMBAY HIGH COUR T THEN IT WILL BE CLEAR THAT PROJECT CONSTRUCTED BY THE ASSESSEE WAS A SEPARATE PROJECT DIFFERENT FROM THE PROJECT CARRIED OUT BY M /S. SAI LEELA DEVELOPERS. THEREFORE, SUCH PASSING OBSERVATIONS OF AO CANNOT BE HELD TO BE A GROUND FOR REJECTION OF ASSESSEES CLA IM FOR DEDUCTION UNDER SECTION 80 IB (10) OF THE ACT. 5.3 FOR THE AFOREMENTIONED REASONS WE SET ASIDE TH E ORDER PASSED BY LD. CIT(A) AND HOLD THAT ASSESSEE IS ENTITLED TO GET DEDUCTION UNDER SECTION 80 IB(10) AND ACCORDINGLY THE AO IS DIRECT ED TO ALLOW THE DEDUCTION TO THE ASSESSEE UNDER SECTION 80 IB(10). GROUND NO.1 TO 5 ARE ALLOWED IN THE MANNER AFORESAID. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDE R/IMPUGNED ORDER, CONCLUSION DRAWN IN THE ORDER OF THE TRIBUNA L ( IN THE CASE OF ASSESSEE ITSELF), WE NOTE THAT THE FACTS ARE IDE NTICAL BECAUSE FOR ASSESSMENT YEAR 2009-10, THE PROJECT WAS APPROVED O N 05/03/2004 I.E. BEFORE INSERTIONS OF CONDITIONS OF COMPLETION WITH EFFECT FROM 01/04/2005. THE ASSESSEE IS A FIR M ENGAGED IN THE BUSINESS OF BUILDER AND DEVELOPER IN VASAI-VIRAR REGION OF THANE DISTRICT. THE CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT WAS DENIED TO THE ASSESSEE ON THE REASONS AS CONTAI NED IN THE ASSESSMENT ORDER, BROADLY, THE ASSESSEE COULD NOT P RODUCE COMPLETION CERTIFICATE FROM CIDCO WITHIN THE STIPU LATED PERIOD. ON APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) ALSO AFFIRMED THE STAND OF THE ASSESSING OFFICER. IT IS NOT WORTHY THAT AS PER EXPLANATION TO SECTION 10(20) OF THE ACT GRA M PANCHAYAT M/S KRISH ENTERPRISES 16 ALSO FALLS UNDER LOCAL AUTHORITY FOR WHICH REFERENC E CAN BE DRAWN FROM THE DECISION IN THE CASE OF KRISHAN HARUBHAU L OHOKARE VS ITO (ITA NO.937/PN/2010), WHEREIN, IT WAS HELD THAT FOR THE PURPOSES OF ISSUANCE OF COMPLETION CERTIFICATE U/S 80IB(10) OF THE ACT GRAM PANCHAYAT IS A LOCAL AUTHORITY, THEREFORE, WE FIND MERIT IN THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE. SUBSTITUTION WAS MADE BY THE FINANCE (NO.2) ACT 2004 WITH EFFECT FROM 01/04/2005 AND PRIOR TO ITS SUBSTITUTION, IN SUB-SE CTION (10) TO SECTION 80IB, THERE WAS NO REQUIREMENT OF COMPLETIO N CERTIFICATE. THIS ISSUE HAS BEEN ELABORATELY DEALT WITH BY THE D ELHI BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS CHD DEVELOPERS ( WHEREIN ONE OF US I.E. JUDICIAL MEMBER) IS SIGNATORY TO THE ORD ER, WHICH WAS AFFIRMED BY THE HONBLE DELHI HIGH COURT IN (2014) 43 TAXMAN. COM 249 (DEL.) VIDE ORDER DATED 22/01/2014. THE HO NBLE DELHI HIGH COURT AFFIRMED THE STAND OF THE TRIBUNAL TO TH E FACT THAT BEFORE THE SUBSTITUTION OF THE ACT WITH EFFECT FROM 01/04/2005 AND IN TERMS OF EXPLANATION (II) TO CLAUSE (A) OF S ECTION 80IB (10), THERE IS NO REQUIREMENT OF COMPLETION CERTIFICATE F OR AVAILING DEDUCTION FOR THE PROJECT WHICH WERE APPROVED BEFOR E THE DATE OF SUBSTITUTION I.E. 01/04/2005. IN THE PRESENT APPEA L APPROVAL WAS GRANTED BY THE COMPETENT AUTHORITY ON 05/03/200 4, BEFORE THE INSERTIONS OF CONDITION OF COMPLETION CERTIFICA TE (I.E. W.E.F. 01/04/2005), THEREFORE, THE ASSESSEE IS NOT EXPECTE D TO FULFILL THE CONDITIONS WHICH WERE NOT ON THE STATUTE BOOK WHEN THE APPROVAL WAS GRANTED BY THE COMPETENT AUTHORITY TO THE ASSES SEE, CONSEQUENTLY, FOLLOWING THE DECISION OF THE PUNE BE NCH OF THE TRIBUNAL IN SHRI KRISHNA HARIBHAU LOHOKARE (ITA NO.937/PN/2010) ORDER DATED 28/02/2013, CIT VS CHD M/S KRISH ENTERPRISES 17 DEVELOPERS (ITA NO.2902 & 4694/DEL/2010) ORDER DATE D 26/09/2012 AND THE DECISION FROM HONBLE DELHI HIGH COURT IN THE CASE OF CHD DEVELOPERS, RATIO LAID DOWN IN CIT VS TARNETAR CORPORATION ORDER DATED 12/09/2012 FROM HONBLE GUJ ARAT HIGH COURT, HONBLE MADRAS HIGH COURT IN CIT VS JAIN HOUS ING CONSTRUCTIONS HOLDING THAT THE CONDITIONS OF COMPLE TION CERTIFICATE WHICH WERE NOT APPLICABLE TO THE PROJEC TS APPROVED BY THE COMPETENT AUTHORITY BEFORE 31/03/2005. EVEN FOR ASSESSMENT YEAR 2009-10, THE MUMBAI BENCH OF THE TR IBUNAL VIDE ORDER DATED 22/09/2014 (REPRODUCED HEREINABOVE ) DEALT WITH THE ISSUE IN DETAIL AND THAT TOO AFTER PLACING RELIANCE UPON VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING THE CASE OF CHD DEVELOPERS, AND OTHER CASES RELIED UPON BY THE ASS ESSEE, THEREFORE, ON THIS ISSUE, THE APPEAL OF THE ASSESSE E IS ALLOWED. 3. SO FAR AS, CHARGING OF INTEREST U/S 234B AND 234 C OF THE ACT IS CONCERNED, IN VIEW OF OUR DECISION, IT IS CO NSEQUENTIAL IN NATURE. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. $ %. ! $% ' /% ' &% 01 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 05/01/2015. - ' *+, 2!. 05/01/2015 + ' 7 SD/- SD/- (SANJAY ARORA) (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 2! DATED : 05/01/2015 M/S KRISH ENTERPRISES 18 F{X~{T? P.S/. !.. - ' 9%: ;:,% - ' 9%: ;:,% - ' 9%: ;:,% - ' 9%: ;:,%/ COPY OF THE ORDER FORWARDED TO : 1. <= / THE APPELLANT 2. 9><= / THE RESPONDENT. 3. ? ( ) / THE CIT, MUMBAI. 4. ? / CIT(A)- , MUMBAI 5. :A7 9%! , , / DR, ITAT, MUMBAI 6. 7B C / GUARD FILE. -! -! -! -! / BY ORDER, >:% 9% //TRUE COPY// D DD D/ // /0 & 0 & 0 & 0 & (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI