ACIT, CHENNAI V. M/s. True Value Homes (India) P Ltd., CHENNAI

ITA 556/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4822 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 28-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G GOPALAN
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 556/MDS/2011 ASSESSMENT YEAR : 2006-07 THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-III(2), CHENNAI. V. M/S. TRUE VALUE HOMES (INDIA) P. LTD., 21, C.V. RAMAN ROAD, ALWARPET, CHENNAI-600 018. (PAN : AAACT7955Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB RESPONDENT BY : SHRI G. GOPALAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-III, CHENNAI IN ITA NO. 433/08-09/A.II I DATED 22.12.2010 FOR THE ASSESSMENT YEAR 2006-07. 2. SHRI SHAJI P. JACOB, LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI G. GOPALAN REPRESENTED ON BEHALF O F THE ASSESSEE. I.T.A. NO.556/MDS/2011 2 3. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) IS CONTRARY TO THE LAW AND FACTS OF THE C ASE. 2. THE LEARNED CIT(A) HAS ERRED IN DELETING THE DI SALLOWANCE OF DEDUCTION U/S. 80IB(10) OF ` 13,26,78,901/-. 2.1 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE LOCAL AUTHORITY AS DEFINED IN SECTION 10(2) IS ONLY FOR THE PURPOSE OF THAT CLAUSE AND DOES NOT APPLY TO SECTION 80IB. AS PER PARA 2(C) DEVELOPMENT CONTROL RULES, CHENNAI METROPOLITA N AREA-PART 1 PERMISSION AND ZONE, THE APPLICANT OWNER, BUILDER , PROMOTER OR POWER OF ATTORNEY HOLDER SHALL NOT PUT THE BUILDING S TO USE WITHOUT OBTAINING THE COMPLETION CERTIFICATE FROM T HE CHENNAI METROPOLITAN DEVELOPMENT AUTHORITY IN CASE OF CATEG ORIES OF BUILDINGS LIKE SPECIAL BUILDINGS, GROUP DEVELOPMENT S AND MULTI- STOREYED BUILDINGS AS DEFINED IN THE SAID RULES AS MAY BE APPROVED BY THE AUTHORITY. 2.2 IT IS SUBMITTED THAT AS PER THE PERMISSION LE TTERS ISSUED BY THE CMDA FOR THE PROJECTS, FOR WHICH THE ASSESSE E HAD CLAIMED DEDUCTION UNDER SECTION 80IB, COME UNDER THE CATEGO RY OF GROUP DEVELOPMENT. 2.3 IT IS SUBMITTED THAT PARA 4(V) AND 4(VI) OF THE LETTER DATED 11.05.2006 FROM THE MEMBER SECRETARY, CMDA, C HENNAI I.T.A. NO.556/MDS/2011 3 CONVEY THE CONDITIONS PRECEDENTS THAT ON COMPLETION OF THE CONSTRUCTION, THE APPLICANT SHOULD INTIMATE CMDA AN D SHOULD NOT OCCUPY THE BUILDING OR PERMIT IT TO BE OCCUPIED UNT IL A COMPLETION CERTIFICATE IS OBTAINED FROM CMDA AND THAT WHILE TH E APPLICANT MAKES APPLICATION FOR SERVICE CONNECTION SUCH AS EL ECTRICITY, WATER SUPPLY, SEWERAGE, HE/SHE SHOULD ENCLOSE A COPY OF T HE COMPLETION CERTIFICATE OBTAINED FROM CMDA. 2.4 IT IS FURTHER SUBMITTED THAT THE SAID LETTER ISSUED BY CMDA, NEITHER SPEAKS ABOUT POWER OF ISSUING COMPLET ION CERTIFICATE BY ANY LOCAL BODY OTHER THAN CMDA NOR A UTHORIZATION TO USE SUCH A CERTIFICATE ISSUED BY ANY SUCH LOCAL BOD Y OTHER THAN CMDA FOR THE PURPOSE OF OBTAINING SERVICE CONNECTIO NS LISTED IN THE LETTER REFERRED IN PARA 2.2 ABOVE. 2.5 IT IS SUBMITTED THAT THE ASSESSEE HAS NOT P RODUCED COMPLETION CERTIFICATE OBTAINED FROM CMDA EITHER AT THE ASSESSMENT STAGE OR AT THE APPELLATE STAGE. AS THE COMPLETION CERTIFICATE, FROM LOCAL AUTHORITY WHICH APPROVED THE PROJECTS VIZ. CMDA, CONVEYING THE VITAL INFORMATION AS TO DATE OF COMPLETION, HAS NOT BEEN OBTAINED AND PRODUCED BY THE ASSESSEE, THE CLAIM FOR DEDUCTION UNDER SECTION 80IB WITHOUT FULFILLING THE CONDITION PRECEDENT PRESCRIBED, DOES NOT DESERVE CONSIDERATIO N. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDU CED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BE SET ASIDE A ND THAT OF THE ASSESSING OFFICER BE RESTORED. I.T.A. NO.556/MDS/2011 4 4. IT WAS THE SUBMISSION BY THE LEARNED DR THAT THE ONLY ISSUE IN THE APPEAL WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN HOL DING THAT THE COMPLETION CERTIFICATE ISSUED BY THE CMDA, THOUGH NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER BUT THE CERTIFICATE OF THE LOCAL PANCHAYAT HAVING BEEN SUBMITTED AND THE CONSTRUCTION HAVING BEEN COMPLETED BY THE S TIPULATED DATE AS PER THE CERTIFICATE, THE ASSESSEE IS ENTITLED TO THE BENEFI TS OF DEDUCTION UNDER SECTION 80- IB OF THE INCOME TAX ACT, 1961. THE LEARNED DR VEH EMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED AUTHORISED REPRESENTATIVE SUPPORTED THE ORDER OF THE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOTICED THAT THE ASSESSEE HAS NOT PRODUCED THE COMPLETION CERTIFICATE FROM TH E CMDA BEFORE THE ASSESSING OFFICER BUT THE ASSESSEE HAS PRODUCED THE CERTIFICA TE OF THE LOCAL PANCHAYAT. THE CERTIFICATE CLEARLY SHOWED THAT THE PROJECTS HAD BE EN COMPLETED BEFORE 31-03- 2008. IT IS ALSO NOTICED THAT THE LEARNED CIT(A) H AS ACCEPTED THAT THE LOCAL AUTHORITY AS SPECIFIED IN THE SAID SECTION INCLUDES THE PANCHAYAT ALSO. IT IS ALSO NOTICED THAT THE LEARNED CIT(A) HAS CONSIDERED THE DEFINITION OF LOCAL AUTHORITY IN SECTION 10(20) WHICH INCLUDES THE PANCHAYAT. AS IT IS NOTICED THAT THE PANCHYAT IS ALSO IN THE IN THE DEFINITION OF THE LOCAL AUTHORIT Y IN SECTION 10(20) OF THE ACT, THE COMPLETION CERTIFICATE ISSUED BY THE PANCHAYAT WOUL D ENTITLE THE ASSESSEE FOR THE BENEFIT OF DEDUCTION U/S 80IB OF THE ACT. IN THE C IRCUMSTANCES, WE FIND THAT THE I.T.A. NO.556/MDS/2011 5 FINDING OF THE LEARNED CIT(A) ON THIS ISSUE IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. IN THE CIRCUMSTANCES, THE AP PEAL OF THE REVENUE IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 24/06/201 1. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 24 TH JUNE, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE